Entrepreneur Media Inc v. Eygn Limited Ernst & Young LLP et al

Filing 37

MEMORANDUM in Opposition to MOTION for Preliminary Injunction re: Second-Filed Action 29 filed by Defendants Eygn Limited Ernst & Young LLP, Ernst & Young Advisory Inc. (Attachments: # 1 Proposed Order)(Donahue, David)

1 Craig S. Mende, admitted pro hac vice
David A. Donahue, admitted pro hac vice
2 Betsy Judelson Newman, admitted pro hac vice
Grace W. Kang, admitted pro hac vice
3 FROSS ZELNICK LEHRMAN & ZISSU, P.C.
866 United Nations Plaza
4 New York, New York 10017
Telephone: [phone]
5 Facsimile: [phone]
6 James H. Berry, Jr. (State Bar No. 075834)
Kevin R. Lussier (State Bar No. 143821)
7 BERRY & PERKINS
A Professional Corporation
8 2049 Century Park East, Suite 950
Los Angeles, California 90067-3134
9 Telephone: [phone]
Facsimile: [phone]
10
Attorneys for Defendants EYGN Limited and Ernst &
11 Young LLP
THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA

12
13

14 ENTREPRENEUR MEDIA, INC.,
15

Plaintiff,

Case No. SACV08-0608 DOC
(MLGx)

16 vs.
17 EYGN Limited, ERNST & YOUNG
LLP and ERNST & YOUNG
18 ADVISORY INC.,
19

Defendants.

20
21 EYGN Limited and ERNST &
YOUNG LLP,
22
Counterclaim-Plaintiffs,
23 vs.
24 ENTREPRENEUR MEDIA, INC., a
25 New York corporation,
26

OPPOSITION OF DEFENDANTS
EYGN LIMITED AND ERNST &
YOUNG LLP TO PLAINTIFF’S
MOTION FOR INJUNCTION
REGARDING SECOND-FILED
ACTION
Date: December 22, 2008
Time: 8:30 a.m.
Courtroom: 9D
Judge: Honorable David O. Carter

Counterclaim-Defendant.

27
28
SACV08-0608 DOC (MLGX)
MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFF'S MOTION FOR INJUNCTION

{F0377320.1 }

1

In opposition to the motion by Plaintiff Entrepreneur Media, Inc. (“EMI”) for

2 an “Injunction Regarding Second-Filed Action,” Defendants EYGN Limited
3 (“EYGN”) and Ernst & Young LLP (“Ernst & Young”) submit this memorandum of
4 points and authorities; the accompanying declarations of Larry J. Haynes, dated
5 October 29, 2008, Victoria Cochrane, dated October 29, 2008 and Craig Mende,
6 dated November 12, 2008; and the accompanying memoranda of points and
7 authorities in support of EYGN’s Motion for Judgment on the Pleadings for Lack of
8 Personal Jurisdiction (“EYGN’s Dismissal Motion”) and Ernst & Young’s Motion
9 for Judgment on the Pleadings or, in the Alternative, to Transfer (“Ernst & Young’s
10 Dismissal Motion”).
11
12

ARGUMENT
EMI asks this Court to enjoin EYGN and Ernst & Young from prosecuting

13 their trademark infringement action against EMI in the United States District Court
14 for the Southern District of New York (the “New York Action”). In support of its
15 motion, EMI argues that (1) its declaratory judgment action in this Court was filed
16 first, (2) the New York Action is “identical” to this one, and (3) this declaratory
17 judgment action was not a prohibited “anticipatory filing.” EMI emphasizes that the
18 “first-to-file” rule on which it relies was developed for the purpose of “promoting
19 efficiency,” and asserts that the rule should apply absent compelling circumstances.
20 (Pl. Inj. Mem. at 6 (internal quotation marks and citations omitted).)
21

EMI’s argument, however, ignores the circumstances of this case. As set

22 forth in EYGN’s Dismissal Motion, this Court does not have personal jurisdiction
23 over EYGN, a Bahamian corporation with no ties to California. Accordingly, this
24 Court cannot enjoin EYGN from prosecuting its trademark infringement action
25 against EMI in New York. See Zepeda v. United States Immigration &
26 Naturalization Serv., 753 F.2d 719, 727 (9th Cir. 1985) (“A federal court may issue
27 an injunction [only] if it has personal jurisdiction over the parties …; it may not
28 attempt to determine the rights of persons not before the court.”).
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SACV08-0608 DOC (MLGX)
MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFF'S MOTION FOR INJUNCTION

Thus, the injunction sought by EMI, if granted, would bar only one party—

1

2 Ernst & Young—from participating in the New York Action. But the end result
3 would be two actions across the country—one on the East Coast between EYGN
4 and EMI, and another on the West Coast between EMI and Ernst & Young1—
5 involving overlapping issues. Such a perverse result would hardly “promot[e]
6 efficiency” in the resolution of the parties’ disputes. Rather, for the reasons set forth
7 in Ernst & Young’s Dismissal Motion, the Court should not only deny EMI’s
8 request for an injunction, but also dismiss EMI’s action in its entirety or, in the
9 alternative, transfer EMI’s action to the New York forum, where all of the relevant
10 parties are subject to jurisdiction.
CONCLUSION

11

For the foregoing reasons, EYGN and Ernst & Young respectfully request

12

13 that this Court deny EMI’s motion to enjoin prosecution of the New York Action.
14
15 DATED: November 12, 2008

Respectfully submitted,

16 BERRY & PERKINS,
A Professional Corporation
17

FROSS ZELNICK LEHRMAN & ZISSU, P.C.

18

By:____________________________
Craig S. Mende
[e-mail]
David A. Donahue
[e-mail]
Betsy Judelson Newman
[e-mail]
Grace W. Kang
[e-mail]
Phone: [phone]

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20
21
22
23

Counsel for Defendants EYGN Limited and
Ernst & Young LLP

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25
1

As set forth in the accompanying Motion for Judgment on the Pleadings for Lack
of Subject Matter Jurisdiction filed by the remaining defendant, Ernst & Young
27 Advisory Inc. (“EYAI”), the Court must dismiss EMI’s claims against that entity for
lack of subject matter jurisdiction because there is no case or controversy involving
28 EYAI.
26

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SACV08-0608 DOC (MLGX)
MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFF'S MOTION FOR INJUNCTION