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

Filing 52

Opposition re: MOTION for Judgment on the Pleadings or, in the Alternative MOTION to Transfer Case to Southern District of New York 42 filed by Plaintiff Entrepreneur Media Inc. (Attachments: # 1 Declaration of Ronald L. Young in Opposition to Motions for Judgment on the Pleadings and, in the Alternative, to Transfer)(Holmes, Michael)

1 Jeffrey R. Patterson, Esq. (State Bar No. 126148)
2

Michael R. Adele, Esq. (State Bar No. 138339)
Michael J. Holmes, Esq. (State Bar No. 199311)

3

ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP
4 12348 High Bluff Drive, Suite 210
5 San Diego, CA 92130

Telephone: [phone]
6 Facsimile: [phone]
7

Attorneys for Plaintiff/Counter-Defendant
8 ENTREPRENEUR MEDIA, INC.
9

UNITED STATES DISTRICT COURT

10

FOR THE CENTRAL DISTRICT OF CALIFORNIA

11
12 ENTREPRENEUR MEDIA, INC.,
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

)
)
Plaintiff,
)
)
v.
)
)
)
EYGN LIMITED; ERNST & YOUNG )
LLP;and ERNST & YOUNG
)
ADVISORY INC.,
)
)
Defendants.
)
)
EYGN Limited and ERNST &
)
YOUNG LLP
)
Counterclaimants, )
)
v.
)
)
)
ENTREPRENEUR MEDIA, INC.
)
)
Counterdefendant.)
)

28
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

No. SACV08-0608 DOC
MEMORANDUM OF POINTS
AND AUTHORITIES OF
ENTREPRENEUR MEDIA, INC. IN
OPPOSITION TO MOTION OF ERNST
AND YOUNG LLP FOR JUDGMENT
ON THE PLEADINGS OR, IN THE
ALTERNATIVE, TO TRANSFER
Date: December 22, 2008
Time: 8:30 a.m.
Courtroom: 9D
Judge: Honorable David O. Carter

1

Plaintiff Entrepreneur Media, Inc. (“Plaintiff”) respectfully submits this

2 memorandum in opposition to the motion (the "Motion") of Defendant Ernst &
3 Young LLP ("Defendant" or "Defendant Ernst & Young") for Judgment on the
4 Pleadings or, in the Alternative, to Transfer.
5

I.

6

Defendant Ernst & Young erroneously contends, through judgment on

Introduction.

7 the pleadings, that this Court lacks jurisdiction over it because, purportedly,
8 this Court lacks personal jurisdiction over Defendant EYGN (who is a
9 necessary party to this action). However, as argued in detail in opposition to
10 Defendant EYGN's motion for judgment on the pleadings, Defendant EYGN is
11 not entitled to dismissal for lack of personal jurisdiction – certainly not based
12 on its motion for judgment on the pleadings – and this Court does in fact have
13 jurisdiction over Defendant EYGN.
14

The Complaint expressly alleges that the defendants have had

15 sufficient contacts with California generally, and in connection with this matter
16 particularly, so as to give rise to personal jurisdiction over each defendant
17 (including Defendant EYGN). Complaint, ¶ 7. Accepting this allegation as
18 true, as is mandated by Ninth Circuit law, requires denial of the motion for
19 judgment on the pleadings. Moreover, even if this Court were to require
20 greater specificity in pleading jurisdictional allegations than the short and plain
21 statement included in the Complaint, Plaintiff is entitled to leave to amend to
22 provide it.
23

Defendants have submitted a variety of declarations attesting to a lack of

24 jurisdiction over Defendant EYGN, but those declarations cannot be
25 considered in the context of a judgment on the pleadings. To the extent the
26 Court considers the declarations, it must treat the motion as one for summary
27 judgment – in which case Plaintiff is entitled to a continuance to allow it to
28 conduct discovery on the issue of jurisdiction. FRCP 56(f). Based on the
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-1-

1 information known to date and the information Plaintiff believes it can gather
2 during discovery, Plaintiff contends that this Court does have jurisdiction over
3 Defendant EYGN.
4

In short, Defendant Ernst & Young LLP is not at this time entitled to

5 dismissal for lack of personal jurisdiction (nor is it entitled to dismissal for lack
6 of personal jurisdiction at all). Indeed, it is doubtful that Defendant Ernst &
7 Young LLP is even entitled to bring the instant motion because, even though it
8 has approximately at least 12 offices in California, it is not currently registered
9 with the California Secretary of State as being qualified to do business in
10 California. Defendant Ernst & Young's motion must be denied or, at the very
11 least, continued to allow Plaintiff a full and fair opportunity to conduct
12 jurisdictional discovery.
13

II.

14

Defendant Ernst & Young LLP's Motion should be denied because

Argument.

15 Defendant Ernst & Young LLP is a foreign corporation transacting intrastate
16 business within California without having registered with the California
17 Secretary of State. Ernst & Young has approximately twelve offices in
18 California. Declaration of Michael R. Adele, Exh. A. In California, "[a] foreign
19 limited liability partnership transacting intrastate business in this state shall not
20 maintain any action, suit, or proceeding in any court of this state until it has
21 registered in this state pursuant to this section." Cal. Corp. Code § 16959.
22 Accordingly, Ernst & Young LLP does not have standing to bring this Motion
23 unless and until it registers to do business with the California Secretary of
24 State. Accord Tsakos Shipping & Trading, S.A. v. Juniper Garden Town
25 Homes, Ltd., 12 Cal.App.4th 74, 86-87 (1993) (time to bring motion was tolled
26 when Court delayed hearing to give defendant/movant time to cure lack of
27 registration with the California Secretary of State).
28
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-2-

1

A.

2
3

EYGN Limited Is a Properly Joined Party Over Which
This Court Has Jurisdiction

Plaintiff agrees that EYGN is an indispensible party to this action.

4 However, as argued in opposition to Defendant EYGN's motion to dismiss, this
5 Court has personal jurisdiction over EYGN.
6

Defendant Ernst & Young LLP erroneously claims that Rheodyne, Inc. v.

7 Ramin', 201 U.S.P.Q. 667, 670 (N.D.Cal. 1978) is "on point." In Rheodyne,
8 the court dismissed patent owners for lack of personal jurisdiction in a
9 declaratory relief regarding alleged patent infringement, then dismissed the
10 remainder of the action against the licensees because the dismissed owners
11 were necessary and indispensible parties. In essence, Defendant Ernst &
12 Young LLP has adopted, in the very different context of a trademark license,
13 the strategy employed by the Defendant in Rheodyne. However, Rheodyne is
14 not "on point" with regard to the present action because it involved a patent
15 license, not a trademark license, and there was no indication that the terms of
16 the license required licensor enforcement, granted licensee authorization for
17 trademark enforcement actions, required co-operation of the licensor and
18 licensee in such actions and obligated the licensor to lending its name to
19 infringement suits. Compare Rheodyne, 201 U.S.P.Q. 667 (which does not
20 delve into any of the terms of the license agreement) with Cochrane Decl.,
21 Exh. C (which provides for extensive co-operation, oversight and involvement
22 in policing the licensed trademarks, including a provision requiring the licensor
23 to "lend its name" to any legal proceedings). As argued in opposition to
24 Defendant EYGN's motion for judgment on the pleadings, these additional
25 oversight and enforcement obligations establish specific jurisdiction against
26 Defendant EYGN here.
27

In short, Plaintiff Entrepreneur Media Inc. agrees that Defendant EYGN

28 is a necessary party to this action, but contends that Rheodyne is not on point.
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-3-

1 For the reasons set forth in greater detail in opposition to Defendant EYGN's
2 motion for judgment on the pleadings, this Court has jurisdiction over EYGN.
3 Plaintiff incorporates those arguments by reference as if set forth herein in full.
4

B.

5
6

The Court Should Not Decline to Exercise Declaratory
Relief Jurisdiction

Defendant Ernst & Young LLP claims that the Court should decline to

7 exercise Declaratory Relief Jurisdiction because the Court lacks jurisdiction
8 over Defendant EYGN Limited. However, as argued above and in detail in
9 Plaintiff's opposition to Defendant EYGN's motion for judgment on the
10 pleadings, Defendant EYGN Limited is a proper party to this action over which
11 this Court has personal jurisdiction. Because Defendant Ernst & Young's
12 argument for this Court declining declaratory relief jurisdiction is based
13 exclusively upon the erroneous assertion that this Court lacks personal
14 jurisdiction over Defendant EYGN Limited, the Court should reject the
15 argument and should retain jurisdiction over this action.
16
17

C.

This Action Should Not Be Transferred to New York

Defendant Ernst & Young makes two arguments in support of

18 transferring this matter to New York: (1) the interests of justice (purportedly)
19 favor transfer; and (2) Plaintiff's choice of forum in this first-filed action do not
20 weigh against transfer. These arguments lack merit.
21
22

1.

The Interests of Justice Do Not Favor Transfer

The interests of justice do not favor transfer. Defendants are seeking to

23 prevent Plaintiff from holding an entrepreneur of the year awards ceremony by
24 preventing Plaintiff from using the phrase "Entrepreneur of the Year." It is
25 difficult to imagine how one can hold an entrepreneur of the year awards
26 ceremony if once cannot call the ceremony what it is. As such, preventing use
27 of the phrase effectively prevents the ability to hold such a ceremony, and
28 gives Defendants an monopoly over the ability to hold entrepreneur of the year
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-4-

1 ceremonies. A ruling in favor of Defendants in this action will not only affect
2 Plaintiff, which is a California resident, but all other California residents who
3 wish to hold entrepreneur of the year awards ceremonies, including without
4 limitation:

• The University of Southern California, located in Los Angeles,

5
6

which has been holding entrepreneur of the year awards since

7

1977;

8

• Hispanic Business Magazine, published by Hispanic Business Inc.

9

located in Santa Barbara, which has been holding entrepreneur of
the year awards since 2002;

10
11

• Loyola Marymount University, located in Los Angeles, which has

12

been holding entrepreneur of the year awards since 2003; and

13

• The San Diego Chamber of Commerce, which as been holding
entrepreneur of the year awards since at least 2007.

14

15 A ruling barring Plaintiff's use of the phrase Entrepreneur of the Year could
16 effectively bar, or at least chill, the above-entities' use of the phrase and ability
17 to continue holding their awards ceremonies. Given the potential affect of this
18 action on Plaintiff and other California residents, the interests of justice favor
19 deciding this case in California. Moreover, each of the foregoing entities will
20 likely be deponents and potential trial witnesses who cannot be compelled to
21 appear for trial in New York. With regard to the parties' own documents and
22 witnesses, it is just as easy to compel appearance and/or production in
23 California as in New York, and there is no evidence that there are likely to be
24 more party affiliated documents and/or witnesses in New York than in
25 California. In short, the interests of justice do not favor transfer.
26

Defendant Ernst & Young LLP argues that the interests of justice

27 (purportedly) do favor transfer because: (a) Defendant EYGN Limited is a
28 necessary party over which this Court lacks jurisdiction; (b) the existence of a
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-5-

1 jurisdictional dispute here makes it easier to simply proceed in New York
2 (where jurisdiction is not disputed); and (c) the New York court's familiarity
3 with New York law will make it easier to resolve claims asserted herein that
4 are based on New York law. These arguments lack merit and/or do not
5 outweigh the interests of justice served by resolving the issue here.
6

(a)

7
8

Defendant EYGN Limited Is a Party over
which this Court Has Jurisdiction

As argued above, this Court has personal jurisdiction over EYGN

9 Limited. Thus, the present action contains all of the parties necessary for
10 resolving this dispute.
11
12

(b)

13
14

This Court Is Quite Capable of Determining a
Jurisdictional Dispute

The jurisdictional dispute here raises important issues regarding a

15 trademark owner's ability to avoid jurisdiction by delegating use of the mark in
16 a territory to a licensee (even when it oversees and controls use of the mark in
17 that territory), and the ability of a trademark owner to avoid jurisdiction by
18 transferring its mark to an offshore holding company. Inasmuch as important
19 rights of California state residents are involved, the Court should not transfer
20 the present case merely to avoid deciding a jurisdictional dispute.
21
22

(c)

This Court Is Quite Capable of Determining

23

Unfair Competition Claims under New York

24

State Law

25

This Court interprets foreign states' laws all the time sitting in diversity.

26 Deciding issues of New York state law on unfair competition is well within this
27 Court's abilities
28
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-6-

1
2

2.

3

Plaintiff's Choice of Forum in this First-Filed Action
Weigh Against Transfer

Defendant Ernst & Young LLP argues that the first-to-file rule should not

4

5 apply because the "threshold factors" of "same parties" and "same claims" are
6 not met here because of the purported lack of jurisdiction over Defendant
7 EYGN. However, the threshold factors are met here because this Court does
8 have jurisdiction over Defendant EYGN and, therefore, the parties to the New
9 York Action and the claims in that action are the same as the parties and
10 claims raised here.
11

A.

12

Judgment on the Pleadings Must Be Denied Based on
the Jurisdictional Allegations in the Complaint.

“A judgment on the pleadings is a decision on the merits,” that the Ninth

13

14 Circuit reviews de novo. General Conference Corp. of Seventh-Day
15 Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228,
16 230 (9th Cir. 1989), cert. denied, 493 U.S. 1079 (1990). A motion for judgment
17 on the pleadings is proper “when the moving party clearly establishes on the
18 face of the pleadings that no material issue of fact remains to be resolved and
19 that it is entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v.
20 Richard Feiner & Co., 896 F.2d 1542, 1550 (9TH Cir. 1990). “All allegations of
21 fact by the party opposing the motion are accepted as true, and are construed
22 in the light most favorable to that party.” General Conference, 887 F.2d at
23 230.
24

Here, the Complaint expressly alleges that "Defendants have sufficient

25 contacts with this jurisdiction generally and, in particular, with the events
26 alleged herein, that each defendant is subject to the exercise of jurisdiction of
27 this court over its person." Complaint, ¶ 7. This allegation of fact must be
28 taken as true in the context of a motion for judgment on the pleadings.
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-7-

1 General Conference, 887 F.2d at 230. Moreover, the allegation conforms with
2 the requirement that Plaintiff need only provide "a short and plain statement of
3 the grounds for this court's jurisdiction . . . " FRCP, 8(a)(1). Accordingly, the
4 motion for judgment on the pleadings for lack of personal jurisdiction must be
5 denied.1
6

B.

7

If Judgment on the Pleadings Is Granted, Leave to
Amend Must Also Be Granted Here.

To the extent the Court requires greater specificity and is inclined to

8

9 grant judgment on the pleadings, Plaintiff requests (and is entitled to) leave to
10 amend the complaint to provide that specificity.
11

It is said that a motion for judgment on the pleadings is not
favored by the courts, and this is true, if the motion is permitted
to cut off the right to amend, thus preventing a hearing on the
merits. But if the motion for judgment is treated as a demurrer
to the defective pleading with leave to amend in a proper case,
as was done here, the practice is sanctioned by usage and free
from objection.

12
13
14
15
16
17
18
19
20
21
22

David v. Robert Dollar Co., 2 F.2d 803, 806 (9th Cir. 1925). In determining
whether to grant leave to amend, “a court must be guided by the underlying
purpose of [Federal] Rule [of Civil Procedure] 15-to facilitate decision on the
merits, rather than on the pleadings or technicalities.” United States v. Webb,
655 F.2d 977, 979 (9th Cir. 1981), quoted in Roth v. Garcia, 942 F2d 617, 628
(9th Cir. 1991); see also In re Rogstad, 126 F.3d 1224, 1228 (9th Cir. 1997).

23
24
25
26
27
28

1

See also WebZero, LLC v. ClicVU, Inc., 2008 WL 1734702, 4 (C.D.Cal. 2008) (without
having conducted discovery, [plaintiff] need only make a prima facie showing that
[defendant] is subject to personal jurisdiction in California, citing Data Disc, Inc. v.
Systems Technology Associates, Inc., 557 F.2d 1280, 1285 (9th Cir.1977) (stating that
Plaintiff need only "demonstrate facts which support a finding of jurisdiction in order to
avoid a motion to dismiss") (citations omitted)).

LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-8-

Here, Plaintiff can (and will) amend the Complaint to allege greater

1

2 jurisdictional specificity if need be. Trademark licensors, such as Defendant
3 EYGN, are required to oversee and control the quality and the use of its
4 trademark. In fact, Defendant EYGN's license agreement provides for such
5 control. See Declaration of Victoria Cochrane, Exhibit C section 5 (Defendant
6 EYGN's quality control rights); see also Miller v. Glenn Miller Productions, Inc.,
7 454 F.3d 975, 992 (9th Cir. 2006) ("It is well established that when the owner
8 of a trademark licenses the mark to others, he retains a “duty to exercise
9 control and supervision over the licensee's use of the mark”). As such,
10 Defendant EYGN is not a "mere" licensor, and the patent cases it cites
11 regarding "mere" licensors are unavailing.

Defendant EYGN's oversight activities (and those of its agent/designated

12

13 controller, EYGS) in assuring Ernst & Young's proper use of the mark in
14 California and in policing the mark's use in California provide jurisdiction. So
15 too, the acts of Ernst & Young LLP in using the Entrepreneur of the Year mark
16 under Defendant EYGN's supervisory control are attributable to Defendant
17 EYGN. See e.g., Akro Corp v. Luker, 45 F.3d 1541, 1548-49 (Fed. Cir. 1995)
18 (licensor subject to personal jurisdiction due to sale of licensed product in state
19 pursuant to license that granted licensee power to litigate infringement actions
20 and that required licensor to defend and pursue infringements against the
21 patent); Genetic Implant Systems v. Core-Vent Corp., 123 F.3d 1455 (Fed.
22 Cir. 1997) (licensor's obligations under an exclusive license agreement may
23 subject it to personal jurisdiction in the forum state even if the licensee is not
24 incorporated or headquarted in the forum state, so long as the exclusive
25 licensee conducts business there).2
26
27
28

2

Viam Corp. v. Iowa Export-Import Trading Co., 84 F.3d 424 (Fed.Cir. 1996) (sending
cease and desist letters, plus placing patented product into commerce through
distributor and purposefully exploiting the California market through advertising suffices
for personal jurisdiction because the “forum state does not exceed its powers under the

LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-9-

1

The case of Breckenridge Pharmaceutical, Inc. v. Metabolite

2 Laboratories, Inc., 444 F.3d 1356 (Fed. Cir. 2006) establishes that a licensor
3 may subject itself to personal jurisdiction where it goes beyond a "mere"
4 license in exchange for royalties, retains control over licensee's activities and
5 grants licensee (and retains for licensor) the right to litigate infringement
6 actions. For instance, in Breckenridge, the court held:
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Here, in addition to sending letters into the forum state, which we
presume qualify as “cease and desist” letters, Metabolite has
entered into an exclusive license with PamLab, a company that,
while not headquartered or incorporated in Florida, conducts
business in Florida. As part of the license agreement, Metabolite
granted PamLab the right to sue for patent infringement with
Metabolite's written consent, and the parties agreed to “discuss
in good faith the appropriate action, if any, with respect to third
party infringers of the Licensed Patents, and to cooperate
reasonably in any enforcement actions”. Metabolite granted
PamLab “full control of the prosecution or maintenance” of any
patent or application that Metabolite abandons or permits to
lapse and agreed to provide PamLab with an executed power of
attorney for that purpose. Metabolite further agreed to “provide
consultation to PamLab in the science, medicine and marketing
of vitamins and related products, from time to time”.
That this exclusive license agreement not only contemplated an
ongoing relationship between PamLab and Metabolite beyond
royalty payments but has actually resulted in such a relationship
is obvious from the facts of this case. Metabolite coordinates
with PamLab in sending cease and desist letters and in litigating
infringement claims in Florida and elsewhere and, as is the case
here, licensor and licensee are often represented jointly by
counsel. As such, we hold that, through its relationship with
PamLab, which sells products in Florida, Metabolite has
purposefully availed itself to the privilege of conducting activities
within Florida.

21
22 Id. at 1366-67.
23

The facts stated above are closely analogous to the facts presented

24 here. As in Breckenridge, licensor EYGN has retained for itself and granted to
25 licensee Ernst & Young LLP the right to sue third parties for infringement, and
26
27
28

Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its
products into the stream of commerce with the expectation that they will be purchased
by consumers in the forum State”).

LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-10-

1 has obligated itself to protect the licensed interests and pay for lawsuits
2 instituted by Ernst & Young LLP. Cochrane Decl., Exh. C ¶¶ 4.2 and 4.3. So
3 too, as in Breckenridge, Defendant EYGN's license requires that Ernst &
4 Young LLP abide by various quality control provisions. Cochrane Decl., Exh.
5 C ¶¶ 5.1-5.4. Just as in Breckenridge, this license resulted in the co6 ordination of the cease and desist letters sent by their joint counsel to Plaintiff
7 and Plaintiff's counsel (Complaint, Exhs. A and B), and has resulted in their
8 joint representation in both the present action and in the New York Action. As
9 in Breckenridge, the relationship between licensor EYGN and its licensee,
10 Ernst & Young LLP gives rise to this Court's jurisdiction over Defendant
11 EYGN.3

Indeed, jurisdiction is particularly appropriate where, as here, Ernst &

12

13 Young LLP owned the mark originally, then sold it to Defendant EYGN and
14 took a license back from Defendant EYGN. Notwithstanding the corporate
15 shell game, the relationship between Defendant EYGN Limited and Defendant
16 Ernst & Young LLP is either an alter ego and/or agency relationship, such that
17 Ernst & Young's conduct in connection therewith give rise to this Court's
18 jurisdiction over Defendant Ernst & Young LLP and Defendant EYGN Limited.
19 Dainippon Screen Mfg. Co., Ltd. v. CFMT, Inc., 142 F.3d 1266, 1270 –1271
20 (Fed. Cir. 1998) ("Stripped to its essentials, CFM contends that a parent
21
22
23
24
25
26
27
28

3

In the Federal Circuit, as in the Ninth Circuit, simply sending a cease and desist letter will
not create jurisdiction. See e.g, Campbell Pet Co. v. Miale, 542 F.3d 879, 885 (Fed. Cir.
2008) ("the sending of an infringement letter, without more, is insufficient to satisfy the
requirements of due process when exercising jurisdiction over an out-of-state patentee");
Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082, 1089 (9th Cir. 2000) ("a
cease-and-desist letter sent by a trademark holder to a putative infringer is not, by itself, a
sufficient basis for personal jurisdiction in the putative infringer's home state."). However,
the type of relationship at issue here, which goes beyond a mere license in exchange for
royalty payments, will suffice to give rise to personal jurisdiction. Breckenridge
Pharmaceutical, Inc. v. Metabolite Laboratories, Inc., 444 F.3d 1356 (Fed. Cir. 2006);
Dainippon Screen Mfg. Co., Ltd. v. CFMT, Inc., 142 F.3d 1266, 1270 -1271 (Fed. Cir.
1998).

LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-11-

1 company can incorporate a holding company in another state, transfer its
2 patents to the holding company, arrange to have those patents licensed back
3 to itself by virtue of its complete control over the holding company, and
4 threaten its competitors with infringement without fear of being a declaratory
5 judgment defendant, save perhaps in the state of incorporation of the holding
6 company. This argument qualifies for one of our “chutzpah” awards. ").
7

Plaintiff can and would make the foregoing allegations if the Court were

8 inclined to grant Defendant EYGN's motion for judgment on the pleadings, and
9 if leave to amend were also granted. Declaration of Peter Shea, ¶ _.
10 Consequently, if the Court grants the Motion, Plaintiff must also be granted
11 leave to amend the Complaint. Swartz v. KPMG LLP, 476 F.3d 756, 760 (9th
12 Cir. 2007) (Ninth Circuit reaffirmed that a court should not dismiss a complaint
13 for jurisdictional defects unless “it is clear ... that the complaint could not be
14 saved by any amendment”); See also David v. Robert Dollar Co., 2 F.2d at
15 806; Roth v. Garcia, 942 F2d at 628.
16

C.

If the Court Looks Beyond the Pleadings and Considers

17

Testimony and Other Extrinsic Evidence, Plaintiff Is

18

Entitled Summary Judgment in Its Favor or, in the

19

Alternative, to a Continuance to Conduct Discovery.

20
21

Counterclaimant's motion for judgment on the pleadings is not based

22 upon the four corners of the pleadings, but rather based on extrinsic evidence
23 from various declarants. As such, to the extent such evidence is considered
24 and not excluded, the motion is not a motion for judgment on the pleadings,
25 but a de facto summary judgment motion. See FRCP 12(d) ("If, on a motion
26 under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to
27 and not excluded by the court, the motion must be treated as one for summary
28 judgment under Rule 56. All parties must be given a reasonable opportunity to
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-12-

1 present all the material that is pertinent to the motion"). Because Defendant
2 EYGN chose to bring a motion for judgment on the pleadings and not a
3 summary judgment motion, the declarations proffered by Defendant EYGN
4 should be excluded and the Motion should be denied (or at most, granted with
5 leave to amend).
6

If, however, the Court decides to consider the declarations and treat this

7 Motion as one for summary judgment, then Plaintiff should prevail based on
8 the limited evidence currently available and proffered by Defendant EYGN. As
9 the discussion above regarding Breckenridge establishes, Defendant EYGN's
10 license agreement with Defendant Ernst & Young LLP, which allows both
11 licensor EYGN Limited and licensee Ernst & Young LLP to litigate infringement
12 actions (at Defendant EYGN's expense), which requires Defendant EYGN to
13 protect the licensed trademarks, which affords Defendant EYGN quality
14 control oversight over the use of the trademarks in California (and elsewhere),
15 and which resulted in the co-ordinated cease and desist letters from counsel
16 for Defendant EYGN and Defendant Ernst & Young LLP being sent into
17 California and directed at a California resident establish personal jurisdiction
18 over Defendant EYGN.
19

Alternatively, if the limited evidence currently proffered in connection

20 with this motion (principally by Defendant EYGN) does not establish
21 jurisdiction over EYGN, Plaintiff is entitled to a continuance of the hearing on
22 this motion to allow discovery. See Portland Retail Druggists Ass'n v. Kaiser
23 Foundation Health Plan, 662 F.2d 641, 645 (9th Cir. 1981) ("Before summary
24 judgment may be entered against a party, that party must be afforded both
25 notice that the motion is pending and an adequate opportunity to respond.
26 Implicit in the “opportunity to respond” is the requirement that sufficient time be
27 afforded for discovery necessary to develop “facts essential to justify (a
28 party's) opposition” to the motion. "); See America West Airlines, Inc. v. GPA
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-13-

1 Group, Ltd., 877 F.2d 793, 801 (9th Cir. 1989) (“where pertinent facts bearing
2 on the question of jurisdiction are in dispute, discovery should be allowed”).4

Although this matter has been pending since June 2008, it has only

3

4 recently been at issue, the parties only recently met and conferred pursuant to
5 Rule 26, and discovery is not slated to commence with the initial disclosure of
6 witnesses and documents on January 30, 2008 – after the currently scheduled
7 hearing on this motion. This schedule was established on the understanding
8 that Plaintiff's motion for an injunction and Defendants' motions to dismiss,
9 stay or transfer would be based on the undisputed facts that relate to the first10 to-file and "anticipatory filing" doctrines. Inasmuch as Defendants have taken
11 a much broader, fact based, approach to have this case dismissed, stayed or
12 transferred, to the extent this Motion is not denied outright given the limited
13 facts proffered by Defendant EYGN, Plaintiff is entitled to conduct jurisdictional
14 discovery.
15

III.

16

This Court should deny Defendant EYGN's motion. Alternatively, to the

Conclusion.

17 extent the Court grants judgment on the pleadings, leave to amend must also
18 be granted. So too, to the extent that the Court is inclined to treat this Motion
19 as a summary judgment motion and is not inclined to deny the Motion outright
20 based on the limited evidence presented, Plaintiff is entitled to a continuance
21 to allow it a full and fair opportunity to conduct jurisdictional discovery.
22 Dated: December 8, 2008

ALLEN MATKINS LECK GAMBLE
MALLORY & NATSIS LLP

23
24

By:
MICHAEL R. ADELE
Attorneys for Plaintiff
ENTREPRENEUR MEDIA, INC.

25
26
27
28

4

See also FRCP 56(f) (providing for continuances to allow for discovery relevant to summary judgment
motions); see also FRCP 12(d) (If treated as a summary judgment motion, "[a]ll parties must be given a
reasonable opportunity to present all the material that is pertinent to the motion")

LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-14-

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
LAW OFFICES

Allen Matkins Leck Gamble
Mallory & Natsis LLP

709552.01/SD

-15-