Disney Enterprises, Inc. et al v. VidAngel Inc.

Filing 230

JUDGMENT PURSUANT TO RULE 54(b) by Judge Andre Birotte Jr.: Pursuant to Federal Rule of Civil Procedure 54(b), a final partial judgment is hereby entered dismissing Defendant and Counterclaimant VidAngel, Inc.'s First, Second and Third Counterclaims 203 for the reasons set forth in the Order Granting VidAngel's Motion for Entry of Final Judgment Dismissing VidAngel's First, Second and Third Counterclaims (ECF No. 266), attached hereto as Exhibit A. (gk)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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WESTERN DIVISION

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DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
TWENTIETH CENTURY FOX FILM
CORPORATION; AND WARNER
BROS. ENTERTAINMENT, INC.,

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Plaintiffs,

Case No. 2:16-cv-04109-AB-PLA
[PROPOSED] JUDGMENT
PURSUANT TO RULE 54(b)
Judge: Hon. André Birotte Jr.

vs.
VIDANGEL, INC.,

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Defendant.

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VIDANGEL, INC.,

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Counterclaimant,
vs.

22 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
23 TWENTIETH CENTURY FOX FILM
CORPORATION; WARNER BROS.
24 ENTERTAINMENT, INC., AND
DOES 1-100,
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Counterclaim-Defendants.
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2:16-cv-04109-AB-PLA
JUDGMENT

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Pursuant to Federal Rule of Civil Procedure 54(b), a final partial judgment is
hereby entered dismissing Defendant and Counterclaimant VidAngel, Inc.’s First,
Second and Third Counterclaims for the reasons set forth in the Order Granting
VidAngel’s Motion for Entry of Final Judgment Dismissing VidAngel’s First,
Second and Third Counterclaims (ECF No. 266), attached hereto as Exhibit A.

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IT IS SO ORDERED.

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9 Dated: October 31, 2017
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_____________________________________
Honorable André Birotte Jr.
United States District Judge

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-1JUDGMENT

2:16-cv-04109-AB-PLA

EXHIBIT A

EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 226 Filed 10/05/17 Page 1 of 5 Page ID #:6509

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

Case No.: CV 16-04109-AB (PLAx)
Title:

Date:

October 5, 2017

Disney Enterprises, Inc. et al v. VidAngel Inc.

Present: The Honorable

ANDRÉ BIROTTE JR., United States District Judge

Carla Badirian
Deputy Clerk

N/A
Court Reporter

Attorneys Present for Plaintiff:

Attorneys Present for Defendant:

N/A

N/A

Proceedings:

Order Granting VidAngel’s Motion for Entry of Final
Judgment Dismissing VidAngel’s First, Second and Third
Counterclaims (Dkt. No. 203)
Before the Court is Defendant VidAngel’s (“VidAngel”) Motion for Entry of Final
Judgment on the Dismissal of its Counterclaims Under Rule 54(b). (“Mot.”, Dkt. No.
203). VidAngel moves for entry of final judgment pursuant to Federal Rule of Civil
Procedure 54(b) on the grounds that the Court’s dismissal of VidAngel’s Counterclaims
with prejudice is a final decision, and there is no just reason for delay. (Mot. at 1).
Plaintiffs Disney Enterprises, Inc., Lucasfilm Ltd. LLC, Twentieth Century Fox Film
Corporation, and Warner Bros. Entertainment Inc.(“Plaintiffs”) filed an opposition
(“Oppo.”, Dkt. No. 210), and Plaintiffs filed a reply (“Reply”, Dkt. No. 213). The Court
finds the motion appropriate for resolution without oral argument and VACATES the
hearing set for October 6, 2017. See Fed. R. Civ. Proc. 78(b), Local Rule 7-15. For the
following reasons, the Court GRANTS VidAngel’s Motion.

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I.

BACKGROUND
a. Factual and Procedural Background

On June 9, 2016, Plaintiffs commenced this action by filing a complaint alleging that
VidAngel was infringing upon Plaintiffs’ exclusive rights under the Copyright Act (17
U.S.C. § 101 et seq.), and violating the Digital Millennium Copyright Act (§ 1201 et seq.)
(“DMCA”), with regard to several of Plaintiffs’ copyrighted works. (Dkt. No. 1). On
July 12, 2016, VidAngel filed an answer and counterclaim, which they subsequently
amended on September 16, 2016. (Amended Answer and First Amended Counterclaims,
(“FACC”), Dkt. No. 77). On October 14, 2016, Plaintiffs filed a motion to dismiss
VidAngel’s First Amended Counterclaims and strike VidAngel’s affirmative defense of
copyright misuse. (Dkt. No. 103). Plaintiffs sought dismissal of all counterclaims, but
specifically sought to dismiss the First, Second and Third Counterclaims on the grounds
that: (1) VidAngel failed to plead a plausible Sherman Act § 1 claim based on any alleged
vertical or horizontal conspiracy (First Counterclaim); (2) VidAngel failed to plead a claim
for intentional interference with prospective economic advantage (Second Counterclaim);
and (3) VidAngel failed to plead a claim for violation of California’s Unfair Competition
Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq. (Third Counterclaim). (Court’s
August 10, 2017 Order, Dkt. No. 199 at 1-2). On, August 10, 2017 the Court granted
Plaintiffs’ motion, dismissing each of VidAngel’s counterclaims with prejudice.
VidAngel filed the instant motion on August 31, 2017.
II.

LEGAL STANDARD

Federal Rule of Civil Procedure 54(b) provides that:
When an action presents more than one claim for relief—whether as a claim,
counterclaim, crossclaim, or third-party claim—or when multiple parties are
involved, the court may direct entry of a final judgment as to one or more, but
fewer than all, claims or parties only if the court expressly determines that
there is no just reason for delay.
Fed. R. Civ. P. 54(b).
In determining whether to enter an appealable final judgment pursuant to Rule
54(b) a court must conduct a two-part inquiry. See Curtiss-Wright Corp. v. General
Elec. Co., 446 U.S. 1, 7-8, 100 S. Ct. 1460, 64 L. Ed. 2d 1 (1980). First, the
judgment must be final with respect to one or more claims. Id. Second, "the
district court must go on to determine whether there is any just reason for delay."
Id. at 8. The Supreme Court has made clear that "[n]ot all final judgments on
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individual claims should be immediately appealable." Id. For this reason, "[i]t is
left to the sound judicial discretion of the district court to determine the 'appropriate
time' when each final decision in a multiple claims action is ready for appeal." Id.
III.

DISCUSSION

There is no dispute that the Court’s dismissal of VidAngel’s counterclaims
constitutes a final judgment. A district court's judgment is final where it "ends the
litigation on the merits and leaves nothing for the court to do but execute the judgment."
Catlin v. United States, 324 U.S. 229, 233, 65 S. Ct. 631, 89 L. Ed. 911 (1945). The Court
dismissed VidAngel’s First, Second and Third counterclaims with prejudice. This
constitutes "an ultimate disposition of [] individual claim[s] entered in the course of a
multiple claims litigation." Wood v. GCC Bend, LLC, 422 F.3d 873, 878 (9th Cir. 2005)
(quoting Curtiss-Wright, 466 U.S. at 7). Thus, the Court’s decision constituted a final
judgment.
Rule 54(b) also requires a court to make an express finding that there is no "just
reason for delay" in entering a judgment as to less than all claims. In evaluating whether
there are just reasons to delay, a court "must take into account judicial administrative
interests as well as the equities involved." Curtiss-Wright, 446 U.S. at 8. Among the
factors to be considered in assessing judicial administrative interests are: whether
certification would result in unnecessary appellate review; whether the claims finally
adjudicated were separate, distinct, and independent of any of the other claims or
counterclaims involved; whether review of these adjudicated claims would be mooted by
any future developments in the case; and whether the nature of the claims was such that no
appellate court would have to decide the same issues more than once even if there were
subsequent appeals. Id. at 5.
VidAngel’s First, Second and Third Counterclaims are both factually and legally
separable from the remaining claims and counterclaims at issue in the case. Plaintiff’s
claims arise under § 106 of the Copyright Act, 17 U.S.C. § 106, and § 1201(a) of the
Digital Millennium Copyright Act, 17 U.S.C. § 1201(a), and involve factual allegations
that VidAngel violated Plaintiff’s rights by copying and publically displaying Plaintiff’s
copyrighted works without a license. (See Complaint, Dkt. No. 1, ¶¶ 1-4). VidAngel’s
counterclaims do not arise under copyright law, nor is there any factual overlap with
Plaintiff’s claims. VidAngel’s First Counterclaim alleges that Plaintiffs violated section 1
of the Sherman Act, 15 U.S.C. § 1, by entering into horizontal and vertical agreements in
an effort to prohibit secondary editing or filtering of motion pictures. (FACC at ¶¶ 88-90).
VidAngel’s Second Counterclaim alleges that Plaintiffs intentionally interfered with
VidAngel’s prospective economic advantage by inducing VidAngel’s actual and
prospective partners not to enter into contractual relationships with VidAngel. (Id. at ¶¶
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104-05). VidAngel’s Third Counterclaim largely relies on the allegations relevant to
VidAngel’s antitrust claim (First Counterclaim), asserting that Plaintiffs alleged actions
constitute “unfair” and “unlawful” conduct pursuant to California’s Unfair Competition
Law, California Business and Professions Code §§ 17200 et seq. VidAngel does not seek
the entry of final judgment for the remainder of its counterclaims, all of which seek
declaratory relief with regard to the legality of VidAngel’s technology under copyright law
and the Family Movie Act, codified at 17 U.S.C. § 110(11). Because Plaintiffs’ claims are
factually and legally distinct from the counterclaims at issue, review of the counterclaims
would not be mooted by any future developments in this case. Moreover, while it is
possible that a subsequent appeal could be taken, it would occur after summary judgment
or trial and, thus, would not present the same pleading issues. Based on the foregoing, the
Court finds that all of the factors identified in Curtiss-Wright regarding judicial
administrative interests are met in the instant matter.
VidAngel contends that their resources have been considerably drained by the
litigation and requiring them to wait for an appeal of the dismissal of their counterclaims
would be severely prejudicial. This case is set for trial in approximately eight months,
thus VidAngel would experience a considerable delay in appealing the Court’s denial of its
counterclaims if the Court denies their request for entry of final judgment. Plaintiffs
contend that they would be prejudiced by the entry of final judgment because they would
be required to litigate simultaneously in three courts. (Oppo at 4-5). The Court is aware
of VidAngel’s declaratory judgment action in the District of Utah. While Plaintiffs
clearly have a vested interest in that litigation, none of the Plaintiffs are named as
Defendants in that action, therefore the Court does not consider this factor for the purpose
of weighing the equities in the instant matter. The Ninth Circuit holds that district courts
have substantial discretion when weighing equitable factors such as prejudice and delay.
See Noel v. Hall, 568 F.3d 743, 747 (9th Cir. 2009). Although the prospect of waiting
over eight months for an appeal is not unduly burdensome, it does tip the equities slightly
in favor of VidAngel. Moreover, as mentioned above, all of the Curtiss-Wright factors
regarding judicial administrative interests are met in the instant matter. Considering these
factors in conjunction with the equity considerations, the Court finds that there is no just
reason for delay, and therefore grants VidAngel’s motion for the entry of final judgment
pursuant to Rule 54(b).
IV.

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiffs’ Motion for the Entry of
Final Judgment pursuant to Federal Rule of Civil Procedure 54(b).

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V.

JUDGMENT

For the reasons stated in the accompanying order granting VidAngel’s Motion for
Entry of Final Judgment pursuant to FRCP 54(b), Judgment is hereby entered in favor of
Plaintiffs and against Defendant VidAngel. With respect to the Court’s August 10, 2017
Order, (Dkt. No. 199) the Clerk shall enter partial final judgment dismissing VidAngel’s
First, Second and Third Counterclaims.
IT IS SO ORDERED.

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