LegalZoom.com Inc v. Rocket Lawyer Incorporated

Filing 166

EX PARTE APPLICATION for Leave to TO FILE MOTION TO SUPPLEMENT FACTUAL RECORD IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT AND TO SET BRIEFING SCHEDULE filed by Defendant Rocket Lawyer Incorporated. (Attachments: # 1 DECLARATION OF HONGAN VU IN SUPPORT OF ROCKET LAWYER INCORPORATEDS EX PARTE APPLICATION TO FILE MOTION TO SUPPLEMENT FACTUAL RECORD AND TO ESTABLISH BRIEFING SCHEDULE, # 2 ROCKET LAWYER INCORPORATEDS NOTICE OF MOTION AND MOTION TO SUPPLEMENT FACTUAL RECORD IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT, # 3 DECLARATION OF MICHAEL JONES IN SUPPORT OF ROCKET LAWYER INCORPORATEDS MOTION TO SUPPLEMENT FACTUAL RECORD IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT, # 4 Proposed Order GRANTING MOTION TO SUPPLEMENT FACTUAL RECORD, # 5 Proposed Order GRANTING LEAVE TO FILE MOTION TO SUPPLEMENT FACTUAL RECORD AND TO ESTABLISH BRIEFING SCHEDULE)(Vu, Hong-An)

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Forrest A. Hainline III (SBN 64166)
[e-mail]
Hong-An Vu (SBN 266268)
[e-mail]
GOODWIN PROCTER LLP
Three Embarcadero Center, 24th Floor
San Francisco, California 94111-4003
Tel.: [phone]
Fax.: [phone]
Michael T. Jones (SBN 290660)
[e-mail]
GOODWIN PROCTER LLP
135 Commonwealth Drive
Menlo Park, California 94025-1105
Tel.: [phone]
Fax.: [phone]
Brian W. Cook (Pro Hac Vice)
[e-mail]
GOODWIN PROCTER LLP
53 State Street
Boston, Massachusetts 02109-2802
Tel.: [phone]
Fax.: [phone]
Attorneys for Defendant
ROCKET LAWYER INCORPORATED
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

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LEGALZOOM.COM, INC., a Delaware
corporation,

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Plaintiff,
v.
ROCKET LAWYER
INCORPORATED, a Delaware
corporation,
Defendant.

Case No. 2:12-cv-09942-GAF-AGR
ROCKET LAWYER
INCORPORATED’S NOTICE OF
MOTION AND MOTION TO
SUPPLEMENT FACTUAL RECORD
IN SUPPORT OF ITS MOTION FOR
SUMMARY JUDGMENT
Date:
Time:
Judge:
Courtroom:

TBD
TBD
Judge Gary A. Feess
740
255 East Temple Street
Los Angeles, CA 90012
Action Filed: November 20, 2012

NOTICE OF MOTION AND MOTION

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TO ALL PARTIES AND THEIR COUNSEL OF RECORD:

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PLEASE TAKE NOTICE that, on ___________, 20____, at 9:30 a.m., or as

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soon thereafter as the matter may be heard before the Honorable Gary A. Feess,

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United States District Judge, in Courtroom 740, of the United States District Court

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for the Central District of California, located at 255 East Temple Street, Los

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Angeles, CA 90012, Defendant Rocket Lawyer Incorporated (“Rocket Lawyer”) by

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and through its counsel, requests leave to supplement the factual record it has

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submitted in support of its Motion for Summary Judgment. This motion is based on

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the accompanying memorandum of points and authorities, the attached Declaration

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of Michael Jones and exhibits thereto, and such argument as the Court allows at any

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hearing to decide this motion.
The evidence that Rocket Lawyer seeks to add to the factual record was not

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previously available to Rocket Lawyer and impacts the disposition of Rocket

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Lawyer’s Motion for Summary Judgment, set to be heard by the Court on November

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10, 2014. LegalZoom has persistently refused to produce a witness to testify about

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its alleged damages resulting from the Rocket Lawyer advertisements at issue in this

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case. On October 6, 2014, LegalZoom served a third report from its damages

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expert, providing a damages theory for only one of the four ads at issue.

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LegalZoom also continues to refuse to produce documents its experts supposedly

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relied on in reaching a damage opinion. This new evidence on LegalZoom’s

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damages, which was provided on October 3, 2014 and October 6, 2014, was

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unavailable when the parties briefed the Motion and Rocket Lawyer will be

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substantially harmed if this recently produced, relevant evidence is not considered

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by the Court.

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Rocket Lawyer met and conferred with LegalZoom on October 20, 2014, by

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phone and email about this motion, but seeks ex parte relief to file this motion and

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to set a briefing schedule so that this motion may be heard on November 10, 2014.

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Dated: October 21, 2014

Respectfully submitted,
By: /s/ Hong-An Vu
Forrest A. Hainline III (SBN 64166)
[e-mail]
Hong-An Vu (SBN 266268)
[e-mail]
Michael T. Jones (SBN 290660)
[e-mail]
Brian W. Cook (Pro Hac Vice)
[e-mail]
GOODWIN PROCTER LLP
Three Embarcadero Center, 24th Floor
San Francisco, California 94111-4003
Tel.: [phone]
Fax.: [phone]
Attorneys for Defendant
ROCKET LAWYER INCORPORATED

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I.

THE COURT SHOULD ALLOW ROCKET LAWYER TO
SUPPLEMENT THE SUMMARY JUDGMENT RECORD

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The Court should permit Rocket Lawyer to supplement the summary

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judgment record because the evidence it seeks to introduce is newly acquired and

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was not previously available. Courts have considered such evidence in deciding

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motions for summary judgment. See, e.g., Lassen Mun. Utility Dist. v. Kinross Gold

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U.S.A. Inc., 2013 WL 875974, at *2 (E.D. Cal. Mar. 7, 2013) (granting motion to

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supplement summary judgment record with evidence obtained by the moving party

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more than two months after submission of the summary judgment motion); Robinett

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v. Opus Bank, 987 F. Supp. 2d 1099, 1105 (W.D. Wash. 2013) (allowing party’s

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submission of supplemental evidence after summary judgment pleading deadline

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passed “based on their representation that they could not have produced it earlier.”).

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A.

Summary Judgment Briefing and Discovery

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Rocket Lawyer filed for summary judgment on June 30, 2014, and set the

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hearing on this motion for August 18, 2014. See ECF No. 60. Around July 18,

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2014, after Rocket Lawyer completed its productions, but while LegalZoom was

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still producing documents, the parties began to discuss depositions. See Declaration

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of Michael Jones in Support of Rocket Lawyer’s Motion to Supplement the Record

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(“Jones Decl.”) at ¶ 4. Given scheduling conflicts, the Court allowed the parties to

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take depositions after the August 12, 2014, discovery-cut off, and later allowed the

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parties to continue these depositions pending mediation set for early September. See

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ECF Nos. 85 and 115.

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1.

Rocket Lawyer’s 30(b)(6) Damages Notice

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Rocket Lawyer served a 30(b)(6) notice of deposition on LegalZoom on July

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30, 2014, which included Topic 26, “LegalZoom's damages sought in this lawsuit.”

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Jones Decl. at ¶ 5, Ex. 3 (the “Notice”).

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2.

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LegalZoom Refuses to Produce Documents Relied Upon By
Its Experts

On July 31, 2014, LegalZoom served its responses and objections to Rocket

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Lawyer’s third requests for production of documents. Id. at ¶ 6, Ex. 4. In response

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to Request No. 2 of this third set, “All Documents relied on by Your experts in

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rendering their expert opinion,” LegalZoom responded:

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“LegalZoom incorporates by reference each of the foregoing General

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Objections. LegalZoom further objects to this Request to the extent that it is

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not is properly directed to LegalZoom, overbroad, unduly burdensome,

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harassing, and is virtually unlimited in time and scope.”

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Id. LegalZoom did not produce documents referenced in his expert reports

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considered by its experts. Id. at ¶¶ 15-17.

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3.

Legal Zoom Refused to Produce a Damage Witness

The parties met and conferred about deposition schedules and mediation in

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August 2014. Id. at ¶ 7. On September 18, 2014, after mediation failed, LegalZoom

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served its response to the Notice. Id. at ¶ 8, Ex. 5. In this response, LegalZoom

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refused to produce a witness to testify about damages and ten other topics. Id.

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4.

The Parties Meet and Confer

On September 23, 2014, Rocket Lawyer wrote to LegalZoom about its

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objections and refusal to provide a damages and other witnesses, id. at ¶ 9, Ex. 6,

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and met and conferred with LegalZoom on September 24, 2014, id. at ¶ 10.

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LegalZoom requested that Rocket Lawyer provide an amended notice as to certain

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topics it considered “vague.” Id.at ¶ 11. Although Rocket Lawyer maintains that its

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topics were not vague, on September 26, 2014, Rocket Lawyer served an amended

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notice providing additional guidance as to certain topics. Id. at ¶ 12, Ex. 7.

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LegalZoom served an amended response on September 29, 2014, but continued to

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refuse to produce a witness to testify about damages. Id. at ¶ 13, Ex. 8.

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5.

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In its final response served on October 3, 2014, LegalZoom continued to
refuse to produce a witness for five topics, including those relating to LegalZoom’s
business formation ads and free ads that were amended to adopt language identical
or nearly identical to LegalZoom’s analogous topics. Id. at ¶ 2, Ex. 3. For Topic
26, LegalZoom refused to produce a corporate representative, referring Rocket
Lawyer to its expert, stating, “LegalZoom incorporates each General Objection.
LegalZoom further objects 26 on the following grounds: the Topic seeks expert
testimony and/or information protected by the attorney-client privilege, the work
product doctrine, or any applicable privilege.” Id.

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LegalZoom Persists in Refusing to Produce a Damages
Witness

Rocket Lawyer completed the depositions of LegalZoom’s fact and 30(b)(6)
witnesses between October 3 and October 9, 2014. Id. at ¶ 14.

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6.

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LegalZoom’s Second Supplemental Expert Report on
Damages

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On October 6, 2014, LegalZoom served Rocket Lawyer with a second

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supplemental report on damages from its expert, Alan G. Goedde (the “Third

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Report”). Id. at ¶ 2, Ex. 1. The Third Report “supersedes [Dr. Goedde’s] prior

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expert reports” addressed in the Motion and relied on information provided by

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Rocket Lawyer in March 2014 and at the latest July 3, 2014, the date Rocket

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Lawyer’s rebuttal report to the first supplemental Goedde report was due. Id.1
In this Third Report, LegalZoom’s damages expert opined on LegalZoom’s

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potential “lost profits from the free business formation ads and ads using

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LegalZoom trade or similar marks” in search engine marketing. See Jones Decl., ¶

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2, Ex. 1. It does not provide any opinions on LegalZoom’s theory of damages

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The Rocket Lawyer documents cited in the actual report were produced between
March 2014 and July 3, 2014. Jones Decl., ¶ 20. Dr. Goedde includes in Tab 3 to
his report other documents produced by Rocket Lawyer on or before July 18, 2014
that he considered, but that do not appear to affect his new damages opinion. Id.
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resulting from Rocket Lawyer’s “free trial,” “free help from local attorneys,” and

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“free legal review” advertisements that appear on Rocket Lawyer’s website.2 See id.

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In addition, this report continues to reference documents not produced to

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Rocket Lawyer. See Jones Decl., ¶¶ 15-17. For example, LegalZoom included as

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part of the report, a document with begin bates LZ007839. Id. at ¶ 15. However,

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LegalZoom only provided this first page and one other page (LZ007849) from this

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document in the Third Report. Id. Additional data considered by the expert but not

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produced is referenced in Tab 3 of the report. Id. at ¶ 16 (see e.g., Big Data Pull,

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Cohort Analysis, uSamp Report prepared for LegalZoom, and other documents

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without bates numbers). LegalZoom continues to refuse to provide documents

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relied upon by its experts, despite being reminded by Rocket Lawyer of its

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obligation and inexplicable refusal on October 1, 2014. Id. at ¶ 18, Ex. 9; see also

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id. at ¶ 19.

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B.

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The Court Should Consider Recently Acquired Evidence on
LegalZoom’s Lack of Damages

In its motion for summary judgment, Rocket Lawyer argued that LegalZoom
cannot meet its burden of demonstrating how it has been harmed by the Rocket
Lawyer ads at issue, in particular the intrawebsite ads where a consumer has already
chosen to explore RocketLawyer.com. ECF No. 60 at 21; see also ECF No. 92 at
13-14. After the parties completed their summary judgment briefing, LegalZoom
revealed that (i) it would not allow a corporate representative to testify about its
damages and (ii) its expert does not have an opinion on damages relating to three of
the four advertisements alleged to be misleading. Jones Decl. at ¶ 6, Ex. 4; id. at ¶
2, Ex. 1. In addition, the Third Report references documents not produced to Rocket
Lawyer. Id. at ¶¶ 15-17. LegalZoom has refused to produce documents relied upon

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Rocket Lawyer produced data relating to these advertisements that LegalZoom’s
expert reviewed, as listed in the appendix, but did not reference in his report. See
Jones Decl., ¶ 2, Ex. 1.
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by its experts, and has provided no indication that it will change its position. Id.

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at ¶¶ 15-19.

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The Lassen case supports Rocket Lawyer’s request because the Response and

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the Third Report are evidence acquired after briefing on summary judgment was

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completed. In Lassen, the defendant was permitted to submit into evidence a letter

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relevant to its claims that surfaced after the parties completed their summary

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judgment briefing. Lassen, 2013 WL 875974, at *2. Rocket Lawyer could not have

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learned of the contents of the Report or that LegalZoom would rely exclusively on

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its expert to provide damages evidence when it was briefing summary judgment.

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In addition, like in Lassen, the newly available evidence that Rocket Lawyer

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seeks to enter into the record is of sufficient magnitude to determine the disposition

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of the case. See Lassen, 2013 WL 875974, at *2. Evidence of injury caused by the

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allegedly misleading ads is a necessary element of each of LegalZoom’s claims. See

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15 U.S.C. §1125(a)(1)(B); Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134,

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1139 (9th Cir. 1997) (that “plaintiff has been or is likely to be injured as a result of

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the false statement” is a necessary element of Lanham Act claim); Kwikset Corp. v.

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Super. Ct., 51 Cal. 4th 310, 326, (2011) (“[California law] requires that a plaintiff’s

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economic injury come ‘as a result of’ the unfair competition [UCL] or a violation of

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the false advertising law [Section17500].”).

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At summary judgment, Rocket Lawyer need only negate one essential

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element to succeed. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23

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(1986). LegalZoom’s reliance exclusively on its limited expert testimony that

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provides no opinion on damages relating to three of the four ads alleged by

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LegalZoom is fatal to its claims based on those advertisements. See Use Techno

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Corp. v. Kenko USA, Inc., 2007 U.S. Dist. LEXIS 85916, at *11 (N.D. Cal. Nov. 20,

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2007) (“Because damages are an essential element of Plaintiffs’ false advertising

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claim, Plaintiffs cannot prevail on that claim as a matter of law”); see also Harper

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House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 209 (9th Cir. 1989) (“the plaintiff
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may not recover if he fails to prove that the defendant’s actions caused the claimed

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harm”).

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The Court should consider LegalZoom’s position on damages and its

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deficient expert report to grant Rocket Lawyer summary adjudication at least as to

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these three categories of ads. There is no genuine dispute of material fact as to the

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essential element of injury and damages, or LegalZoom’s failure to satisfy its

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burden with respect to other elements related to these advertisements – i.e., falsity

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(see ECF No. 60 at 14-15; ECF No. 92 at 5-6); materiality (see ECF No. 92 at 2-3;

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see also ECF No. 60 at 18-19); tendency to deceive a substantial segment of

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consumers (see ECF No. 60 at 16-18; ECF No. 92 at 11-13); or causation (see ECF

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No. 60 at ECF No. 92 at 13-15).

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II.

GRANTING THIS MOTION WILL CAUSE NO PREJUDICE
The only “prejudice” to LegalZoom is that the Court will consider its

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decisions to not produce evidence in discovery. After three opportunities to provide

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a damages theory, the court should consider the absence of any damages theory

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relating to three of the advertisements LegalZoom complains of.

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III.

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CONCLUSION
For the foregoing reasons, Rocket Lawyer respectfully requests that the Court

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exercise its discretion and consider Exhibits 1 and 2 of the Jones Declaration as part

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of the evidentiary record in support of Rocket Lawyer’s positions in the cross-

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motions for summary judgment.

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Dated: October 21, 2014

Respectfully submitted,
By: /s/ Hong-An Vu
Forrest A. Hainline III (SBN 64166)
[e-mail]
Hong-An Vu (SBN 266268)
[e-mail]
Michael T. Jones (SBN 290660)
[e-mail]
Brian W. Cook (Pro Hac Vice)
[e-mail]
GOODWIN PROCTER LLP
Three Embarcadero Center, 24th Floor
San Francisco, California 94111-4003
Tel.: [phone]
Fax.: [phone]
Attorneys for Defendant
ROCKET LAWYER INCORPORATED

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