Bryan Pringle v. William Adams Jr et al

Filing 134

NOTICE OF MOTION AND MOTION for Reconsideration re Order on Motion to Dismiss Party, 126 requesting reconsideration of award of sanctions pursuant to 28 U.S.C. 1927, filed by plaintiff Bryan Pringle. Motion set for hearing on 6/13/2011 at 10:00 AM before Judge Josephine Staton Tucker. (Attachments: # 1 Memorandum in support of Motion to Reconsider April 12, 2011 Order Awarding Sanctions, # 2 Declaration of Dean A. Dickie in support of Motion to Reconsider April 12, 2011 Order Awarding Sanctions)(Holley, Colin)

1 Dean A. Dickie (appearing Pro Hac Vice)
[e-mail]
2 Kathleen E. Koppenhoefer (appearing Pro Hac Vice)
[e-mail]
3 MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.
225 West Washington Street, Suite 2600
4 Chicago, IL 60606
Telephone: [phone]
5 Facsimile: 312.460.4288

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

6 Ira Gould (appearing Pro Hac Vice)
[e-mail]
7 Ryan L. Greely (appearing Pro Hac Vice)
[e-mail]
8 GOULD LAW GROUP
120 North LaSalle Street, Suite 2750
9 Chicago, IL 60602
Telephone: [phone]
10 Facsimile: 312.726.1328
11 George L. Hampton IV (State Bar No. 144433)
[e-mail]
12 Colin C. Holley (State Bar No. 191999)
[e-mail]
13 HAMPTONHOLLEY LLP
2101 East Coast Highway, Suite 260
14 Corona del Mar, California 92625
Telephone: [phone]
15 Facsimile: 949.718.4580
16 Attorneys for Plaintiff
BRYAN PRINGLE
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18

UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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SOUTHERN DIVISION
)
)
)
Plaintiff,
)
)
v.
)
)
WILLIAM ADAMS, JR.; STACY
)
FERGUSON; ALLAN PINEDA; and
)
JAIME GOMEZ, all individually and
collectively as the music group The Black )
)
Eyed Peas, et al.,
)
)
Defendants.
)

21 BRYAN PRINGLE, an individual,

Case No. SACV 10-1656 JST(RZx)

22

MEMORANDUM IN SUPPORT
OF PLAINTIFF BRYAN
PRINGLE’S MOTION TO
RECONSIDER THE COURT’S
APRIL 12, 2011 ORDER
AWARDING SANCTIONS
PURSUANT TO 28 U.S.C. § 1927

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DATE: June 13, 2011
TIME: 10:00 a.m.
CTRM: 10A

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TABLE OF CONTENTS

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Page
I.

INTRODUCTION........................................................................................... 1

II.

PROCEDURAL BACKGROUND ................................................................. 2

III.

STANDARD FOR MOTION TO RECONSIDER......................................... 6

IV.

ARGUMENT .................................................................................................. 6

7

A.

8

Plaintiff’s Counsel’s Conduct Does Not Constitute Bad Faith
Warranting the Exceptional Penalty of Sanctions ................................ 7

9

1.

Plaintiff’s Counsel’s Honest Interpretation of the Court’s
January 27, 2011 Order............................................................... 8

2.

Evidence that Plaintiff’s Counsel Reasonably Relied in
Good Faith on Available Evidence Regarding the Implied
Authority of Shapiro Was Erroneously Excluded from the
Court’s Analysis ....................................................................... 10

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V.

CONCLUSION ............................................................................................. 13

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-i-

1

INDEX OF AUTHORITIES

2
3

Page(s)

4

CASES

5

Am. Football League v. Nat’l Football League, Inc., 27 F.R.D. 264 (D. Md. 1961)....................12

6

Barber v. Hawaii, 42 F.3d 1185 (9th Cir. 1994) .............................................................................6

7

Beaudry Motor Co. v. Abko Properties, Inc., 780 F.2d 751 (9th Cir. 1986) ...................................7

8

Dogherra v. Safeway Stores, Inc., 679 F.2d 1293 (9th Cir. 1982) ..................................................7

9
10

Edinburgh Assur. Co. v. R. L. Burns Corp., 669 F.2d 1259 (9th Cir. 1982) ...................................9
Hall v. Cole, 412 U.S. 1 (1973) .......................................................................................................7

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12
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Montclair Electronics, Inc. v. Electra/Midland Corp., 326 F. Supp. 839 (S.D.N.Y. 1971)..........12
Pratt v. California, 11 Fed. Appx. 833 (9th Cir. 2001)...................................................................6

14

United States v. Nutri-cology, Inc., 982 F.2d 394 (9th Cir. 1992) ..................................................6

15

United States v. Westlands Water Dist., 134 F. Supp. 2d 1111 (E.D. Cal. 2001) ...........................6

16

United States v. Ziegler Bolt & Parts Co., 111 F.3d 878 (Fed. Cir. 1997) .............................10, 12

17

Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988)..........................................10

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STATUTES

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28 U.S.C. § 1927............................................................................................................1, 5, 6, 7, 13

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COURT RULES

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Fed. R. Civ. P. 4(e)(2)..........................................................................................................9, 10, 11

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Fed. R. Civ. P. 4(h)(1) .............................................................................................................10, 12

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Fed. R. Civ. P. 60(b)(1)-(b)(6).........................................................................................................6

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Rule 4 of the Federal Rules of Civil Procedure...............................................................................4
L.R. 78-230(k) .................................................................................................................................6
Rule 4...............................................................................................................................................1
Rule 26.............................................................................................................................3, 4, 10, 11
Rule 59.............................................................................................................................................6

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Rule 60.............................................................................................................................................6
Rule 60(b) ........................................................................................................................................6
OTHER AUTHORITIES
CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1097, at
84-85 (2d ed. 1987)..................................................................................................................10

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-iii-

1 I.

INTRODUCTION

2

Plaintiff, Bryan Pringle (“Plaintiff” or “Pringle”), respectfully requests that

3 this Court reconsider its April 12, 2011 Order awarding sanctions against Plaintiff’s
4 counsel. As appears from the facts set forth below, Plaintiff’s counsel at all times
5 material acted in good faith in a professionally appropriate manner under the
6 circumstances. Moreover, there was no evidence presented by Defendants that
7 supports or suggests that Plaintiff acted in “bad faith,” thereby justifying the extreme
8 measure of sanctions pursuant to 28 U.S.C. § 1927.
9

Plaintiff’s counsel requests that the Court reverse its April 12, 2011 Order for

10 several reasons. Pringle’s counsel did not disregard this Court’s January 27, 2011

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 Order intentionally. To the contrary, Plaintiff’s counsel believed in good faith that
12 they were following the January 27, 2011 Order by remedying the proof of service
13 issues identified initially by the Court. Counsel’s actions thereafter in attempting to
14 effectuate prompt, effective service on Rister Editions (“Rister”) were based on
15 counsel’s honestly held and good faith interpretation of the Court’s January 2011
16 order and were not done in derogation thereof. If counsel erred in its belief that
17 Shapiro, Bernstein & Co. (“Shapiro”) was the lawful representative of Rister under
18 Rule 4 based upon public statements on the Internet, their mistake was neither
19 reckless nor done for the purpose of intentionally ignoring the Court’s January 27,
20 2011 Order.
21

Moreover, Plaintiff’s counsel’s conduct certainly did not rise to the level of

22 “bad faith” warranting draconian sanctions. To the contrary, each of Plaintiff’s
23 counsel’s actions researching applicable law regarding service on implied or
24 designated agents was taken in good faith. Plaintiff’s counsel believed that service
25 on Shapiro was appropriate due to its implied authority as Rister’s United States
26 representative and as such, had authority to accept service on Rister’s behalf. In
27 opposing Rister’s motion to dismiss, Plaintiff asserted clearly that Shapiro had
28 implied authority to accept service for Rister as its managing agent for all purposes

1 in the United States. Plaintiff’s counsel provided the Court with the specific
2 evidence upon which Plaintiff’s counsel relied in proceeding as they did. Regardless
3 of whether Shapiro took the position that there was no express authorization to
4 accept service of the summons and First Amended Complaint on behalf of Rister, the
5 law recognizes that such authorization may nevertheless be implied where, as in this
6 case, Shapiro holds itself out as the United States representative of Rister and is even
7 identified by Rister’s attorney as Rister’s “sub-publisher” in the United States. The
8 Court’s April 12, 2011 Order demonstrates that Plaintiff’s clear evidence as
9 submitted in its opposition was not considered by the Court in its analysis of
10 Plaintiff’s conduct. Accordingly, the Court’s conclusion that Plaintiff did not submit

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 evidence and that sanctions were proper based on the “recklessness” of Plaintiff
12 should be reconsidered to remedy what was clear error and represents a manifest
13 injustice against Plaintiff. At all times material, counsel for Plaintiff sought to
14 comply with the Court’s order.
15

As is further noted in Plaintiff’s opposition to Defendants’ Motion to Dismiss,

16 the proper procedure in cases such as this one is to quash service of the summons and
17 complaint and give the Plaintiff additional time to complete service pursuant to the
18 Hague Convention. Here, the Court awarded sanctions even though Defendants
19 unsuccessfully sought a remedy to which they were never entitled, i.e., dismissal.
20 The award of sanctions against Plaintiff’s counsel is a particularly harsh penalty
21 given the circumstances in this matter, and Plaintiff’s counsel requests that this Court
22 reconsider its position.
23 II.

PROCEDURAL BACKGROUND

24

This action was filed on October 28, 2010. [ECF Docket Entry Number

25 (“Doc.”) #1]. On November 5, 2010, the summons and complaint for Rister were
26 served on Defendant Shapiro. [Doc. #40]. The proof of service for the November 5,
27 2010 service on Rister did not, however, indicate that Shapiro was being served as
28 the agent or representative of Rister. As it did not specify the capacity in which
2

1 Shapiro was served with Rister’s summons and complaint, this Court held that
2 service was improper and ordered Plaintiff to serve Rister promptly. [See Doc.
3 #126].
4

On November 19, 2010, Pringle filed the First Amended Complaint in this

5 action. [Doc. #9]. On December 1, 2010, the summons and First Amended
6 Complaint for Rister were served on Shapiro. [Doc. #50]. The proof of service for
7 the December 1, 2010 service on Rister did not indicate the relationship between
8 Shapiro and Rister and did not specify the capacity in which Shapiro was served with
9 Rister’s summons and First Amended Complaint. [See Doc. #50].
10

On December 13, 2010, Rister filed a motion to dismiss based on improper

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 service. [Docs. #53 and #58]. On January 27, 2011, the Court issued an order
12 denying Rister’s motion to dismiss. [Doc. #95].
13

On February 28, 2011, Defendant Shapiro and the collective Black Eyed Peas

14 Defendants served their initial disclosures pursuant to Rule 26. In the Shapiro
15 disclosures, individual Defendant Frederic Riesterer is identified as having
16 discoverable information, but no address was provided in contravention of the Rule’s
17 requirements. (See Declaration of Dean A. Dickie in Support of Motion to
18 Reconsider the Court’s April 12, 2011 Order (“Dickie Decl.”) at ¶ 18 & Exh. A.)
19 The Black Eyed Peas Defendants, like Shapiro, also identified individual Defendant
20 Frederic Riesterer as a person with discoverable information. The Black Eyed Peas
21 Defendants identified Loeb & Loeb, counsel for Shapiro, as the address for
22 Defendant Riesterer. (See Dickie Decl. at ¶ 19 & Exh. B.) Pursuant to this
23 information, Plaintiff sought to serve Defendant Riesterer at Loeb & Loeb. Loeb &
24 Loeb refused service, however, as improper and demanded that Plaintiff withdraw
25 service. (See Dickie Decl. at ¶ 20 & Exh. C.)
26

In response, Plaintiff’s counsel wrote to Mr. Slotnick, indicating that Loeb &

27 Loeb was served pursuant to information contained within Defendants’ Rule 26
28 disclosures, and requesting that the information be provided. (See Dickie Decl. at
3

1 ¶ 21 & Exh. D.) In response, Mr. Slotnick refused to provide Mr. Riesterer’s
2 contact information so that Plaintiff could properly serve him. (See Dickie Decl.
3 at ¶ 22 & Exh. E.) Finally, only after Mr. Dickie persisted and again followed up
4 reminding counsel of his obligations under Rule 26, did Mr. Slotnick provide
5 Mr. Riesterer’s address. Once Mr. Riesterer was served, after refusing service and
6 refusing to provide Mr. Riesterer’s address, Mr. Slotnick, along with Donald Miller
7 and Tal Dickstein, all of Loeb & Loeb, appeared for Mr. Riesterer and filed an
8 Answer and Affirmative Defenses on his behalf. [Doc. #127].
9

Concurrently, on March 16, 2011, Pringle served a copy of the summons and

10 First Amended Complaint on Rister by personally serving a copy of the summons

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 and First Amended Complaint on Shapiro as agent for Rister. The proof of service
12 for the March 16, 2011 service on Rister specifically indicates that Shapiro was
13 served as “the agent, United States representative for and United States administrator
14 of Rister Editions.” [Doc. #117 at page 3]. Service was effectuated pursuant to and
15 in reliance upon Rule 4 of the Federal Rules of Civil Procedure.
16

On March 28, 2011, Rister filed a second motion to dismiss and for sanctions

17 based on improper service rehashing the same arguments presented in its first motion
18 to dismiss. [Docs. #121 and #122].
19

In Plaintiff’s opposition to the second motion to dismiss, Plaintiff attached the

20 Declaration of Jeremy Katz for purposes of demonstrating the evidence upon which
21 Plaintiff’s counsel relied in determining that Shapiro was the implied agent of Rister.
22 [Doc. #123-1] The declaration specifically sets forth the facts as follows:
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2.
On or about February 24, 2011, I visited defendant Shapiro
Bernstein and Co., Inc.’s (“Shapiro Bernstein”) website, located at
http://www.shapirobernstein.com. Using the “site search” function on
Shapiro Bernstein’s website, I performed a search for the term “Rister
Editions.” My search returned a link to a news post -- titled “Shapiro
Bernstein Representing Square Rivoli Music and Rister Editions” (the
“News Post”) – located at the website address
http:/www.shapirobernstein.com/newspost/2/Shapiro-BernsteinRepresenting-Square-Rivoli-Music-and-Rister-Editions. The News Post
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states that “Shapiro Bernstein is representing Square Rivoli Music and
Rister Editions of France for the USA.” A true and correct copy of
contents of the News Post is attached hereto as Exhibit “A.” An
enlarged and highlighted copy of the contents of the News Post is
attached hereto as Exhibit “B.”
3.
Also on or about February 24, 2011, I reviewed the liner notes for
the album “The E.N.D.” by the Black Eyed Peas which contains the song
“I Gotta Feeling” that is at issue in this lawsuit. The liner notes contain,
among other things, a description of the producers, writers, publishers,
and those administrating the rights related to the song “I Gotta Feeling.”
The liner notes expressly state that:

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Square Rivoli Publishing and Rister Editions [are] administered in
the United States by Shapiro, Bernstein & Co., Inc. (ASCAP).

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

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A true and correct copy of the liner notes that I reviewed is attached
hereto as Exhibit “C.” An enlarged and highlighted copy of the relevant
portion of the liner notes is attached hereto as Exhibit “D.”
See Declaration of Jeremy T. Katz attached to Plaintiff’s Opposition
(“Katz Declaration”) at ¶¶ 2-3 & Exhs. A-D [Doc. #123-1].

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On April 12, 2011, the Court entered an order denying Defendants’ motion to

17 dismiss but quashing service on Rister and granting Rister’s attorneys’ fees pursuant
18 to 28 U.S.C. §1927. [Doc. #126] In its order, the Court stated that Plaintiff
19 proceeded recklessly by intentionally ignoring the January 27, 2011 Order and
20 ordered that Plaintiff pay sanctions to Rister. Id. Despite the evidence that was
21 presented to the Court in the Katz Declaration attached to Plaintiff’s opposition as
22 mentioned above, the Court’s order also specifically stated: “Here, Plaintiff has
23 failed to provide any evidence that Shapiro is Rister’s managing agent or that it had
24 any express or implied authority to accept service for Rister.” Id. That statement is
25 mistaken, factually incorrect and ignores the Katz Declaration.
26 III. STANDARD FOR MOTION TO RECONSIDER
27

The Court has discretion to reconsider and vacate a prior order. Barber v.

28 Hawaii, 42 F.3d 1185, 1198 (9th Cir. 1994); United States v. Nutri-cology, Inc., 982
5

1 F.2d 394, 396 (9th Cir. 1992). Rule 60(b) permits reconsideration of a district court
2 order based on: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly3 discovered evidence that supports grounds for a new trial under Rule 59; (3) fraud by
4 an adverse party; (4) the judgment is void; (5) the judgment has been satisfied,
5 released or discharged; or (6) any other reason justifying relief from the operation of
6 the judgment. United States v. Westlands Water Dist., 134 F. Supp. 2d 1111 (E.D.
7 Cal. 2001); see also Fed. R. Civ. P. 60(b)(1)-(b)(6). Rule 60 reconsideration is
8 generally appropriate in three instances: (1) when there has been an intervening
9 change of controlling law, (2) new evidence has come to light, or (3) when necessary
10 to correct a clear error or prevent manifest injustice (emphasis added). Westlands,

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2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 134 F. Supp. 2d at 1130 (citing School Dist. No. 1J, Multnomah County, Or. v.
12 ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993)); see also E.D. Cal. L.R. 78-230(k).
13 Imposition of sanctions against Plaintiff for bad faith pursuant to 28 U.S.C. § 1927
14 under the attendant circumstances and the express language of the Court’s
15 January 27, 2011 Order represents clear error by the Court and is manifestly unjust
16 based on the facts presented to this Court. The Court’s April 12, 2011 Order
17 awarding attorneys’ fees to Defendant Rister should be reconsidered.
18 IV.

ARGUMENT

19

Section 1927 sanctions “must be supported by a finding of subjective bad

20 faith.” Pratt v. California, 11 Fed. Appx. 833 (9th Cir. 2001) (citing In re: Keegan
21 Mgmt. Co., Securities Litigation, 78 F.3d 431, 436 (9th Cir. 1995) (quoting New
22 Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir. 1989))). “Bad faith
23 is present when an attorney knowingly or recklessly raises a frivolous argument, or
24 argues a meritorious claim for the purpose of harassing an opponent.” Id. at 835
25 (quoting Estate of Blas v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986)). For sanctions
26 to apply in the face of 28 U.S.C. § 1927, “a filing submitted recklessly, that filing
27 must be frivolous, or if not frivolous, it must be intended to harass.” Id. A filing is
28 frivolous if it “is both baseless and made without a reasonable and competent
6

1 inquiry.” Id. at 434. Plaintiff’s counsel’s conduct here was neither baseless nor made
2 without a reasonable inquiry. (See Dickie Decl. at ¶¶ 1-17.) Indeed, the filing and
3 service at issue was duly made after discovery of the public admission by Shapiro
4 that it was Rister’s United States representative.
5

The Ninth Circuit emphasizes the fact that an award of attorney fees under the

6 “bad faith” exception “is punitive, and the penalty can be imposed ‘only in
7 exceptional cases and for dominating reasons of justice.’” Beaudry Motor Co. v.
8 Abko Properties, Inc., 780 F.2d 751 (9th Cir. 1986) (citing United States v. Standard
9 Oil Co., 603 F.2d 100, 103 (9th Cir. 1979) (quoting 6 J. MOORE, MOORE’S FEDERAL
10 PRACTICE ¶ 54.77[2] (2d ed. 1972))); see Hall v. Cole, 412 U.S. 1, 5 (1973). By way

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 of example, in Dogherra v. Safeway Stores, Inc., 679 F.2d 1293 (9th Cir. 1982), the
12 district court found bad faith on Safeway’s part only because one of its employees
13 lied, and because Safeway pursued the action after it discovered the lie, by bringing
14 needless, frivolous motions.
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A.

Plaintiff’s Counsel’s Conduct Does Not Constitute Bad Faith
Warranting the Exceptional Penalty of Sanctions

As is evident from Plaintiff’s argument in his Opposition to Rister’s Motion to

18 Dismiss, and as set forth again below, Plaintiff’s counsel’s service on Shapiro was
19 based on a reasonable and competent inquiry as to Shapiro’s implied authorization to
20 accept service on Rister’s behalf. Plaintiff respectfully contends that the Court’s
21 failure to acknowledge the reasonableness and competence of Plaintiff’s counsel’s
22 inquiry, conclusions and subsequent conduct (as set forth in the Katz Declaration) in
23 its analysis of the appropriateness of an award of sanctions represents clear error and
24 must be reconsidered. There is no evidence that Plaintiff’s counsel made a frivolous
25 or baseless claim or acted to harass Rister. Simply stating that an act is reckless
26 without identified factual support does not make it so. Nor is there any discussion of
27 the facts upon which the Court determined that Plaintiff’s counsel failed to make a
28 reasonable or competent inquiry, or lied about the basis for the conclusion that
7

1 Shapiro was Rister’s agent. The Court’s statement “Here, Plaintiff has failed to
2 provide any evidence that Shapiro is Rister’s managing agent or that it had any
3 express or implied authority to accept service for Rister” suggests that the Court did
4 not consider the evidence presented by Plaintiff at all during its analysis. [Doc. #126]
5 In actuality, no facts are set forth from which anyone could fairly or reasonably
6 conclude that Plaintiff’s counsel’s reliance upon a public statement available via the
7 Internet setting forth Shapiro’s representative capacity was in any way untruthful or
8 an uneducated basis for concluding that Shapiro had implied authority to serve as
9 Rister’s agent for receiving a summons and Amended Complaint.
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2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

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1.

Plaintiff’s Counsel’s Honest Interpretation of the Court’s
January 27, 2011 Order

This Court’s conclusion that Plaintiff’s counsel made a “bad faith” decision to
disregard the Court’s order likewise is without any factual basis. In the Court’s
Order of January 27, 2011 the Court expressly stated:
Defendants argue that Plaintiff’s proofs of service on Rister state
that service was made not on any employee or service agent of Rister,
but rather on Defendant Shapiro. (Shapiro, et al. Mot. at 8; see Docs.
#40 & #50.) Plaintiff does not dispute this. [Doc. #95] (emphasis
added).

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The clear impact of that statement was read by Plaintiff’s counsel to mean that
the proof of service was inadequate as it failed to denote any agency or
representative. Therefore, this Court’s January 27, 2011 Order stated:
Plaintiff shall promptly serve Rister with the summons and First
Amended Complaint so as to not unduly delay litigation.
Plaintiff’s counsel did promptly serve Rister and by so doing did not in any
way intend to delay the litigation.
Based on the language of the Order, Plaintiff’s counsel in good faith believed
that the Court had taken issue with the adequacy of the proofs of service as attacked
by Defendants for failing to indicate upon what basis Shapiro was served or that

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1 service was made on an employee or service agent of Rister. No one on Plaintiff’s
2 legal team interpreted the Court’s Order to take issue with the method of service.
3 See Dickie Decl. at ¶¶ 1-17. Since the Court’s discussion of the issue is devoid of
4 explanation, it never understood by Plaintiff’s counsel that the Court disputed the
5 form of service itself. Given this lack of clarity, it cannot be said that Plaintiff
6 proceeded recklessly by identifying Shapiro as Rister’s agent. Instead, the obvious
7 conclusion from the express language of the January 27, 2011 Order is that the lack
8 of capacity in which Shapiro was served was the problem which needed to be
9 corrected. Plaintiff’s counsel in good faith believes that was what it did. In fact, the
10 entire litigation team for Plaintiff interpreted the Court’s Order to mean that service

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 was quashed because the proof of service failed on its face to state the basis under
12 which Shapiro was served and for no other reason. See id. None of Plaintiff’s
13 attorneys read the order to mean that the service on Shapiro was improper. See id.
14

Based on Plaintiff’s counsel’s assumption that its earlier service was proper

15 but for a failure to designate Shapiro’s relationship with Rister as “service agent” or
16 “employee” properly on the proof of service, Plaintiff’s litigation team obtained
17 evidence of the agency, amended the proof of service designating Shapiro as an
18 “agent” and concluded that it was in compliance with the Court’s January 27, 2011
19 Order. Id. Consistent with Rule 4(e)(2) of the Federal Rules of Civil Procedure,
20 Plaintiff’s counsel’s actions demonstrate nothing but, at most, an honest and
21 reasonable misinterpretation of this Court’s January 27th Order, and certainly not an
22 intentional, bad faith, reckless disregard for the Court’s order. See Edinburgh Assur.
23 Co. v. R. L. Burns Corp., 669 F.2d 1259 (9th Cir. 1982) (where the district court
24 found that the defendant had not acted in bad faith by refusing to pay out on an
25 insurance policy due to a good faith but erroneous interpretation of the language of
26 the policy). The Court’s conclusion that Plaintiff’s counsel intentionally and
27 recklessly disregarded this Court’s January 27th Order demonstrates clear error and
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1 should be reconsidered in light of the manifest injustice it would cause Plaintiff’s
2 counsel and the absence of real prejudice to Rister.
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2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

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2.

Evidence that Plaintiff’s Counsel Reasonably Relied in Good
Faith on Available Evidence Regarding the Implied Authority
of Shapiro Was Erroneously Excluded from the Court’s
Analysis

As set forth in Plaintiff’s Opposition and the Katz Declaration attached
thereto, Plaintiff’s counsel properly relied in good faith on the available evidence in
effectuating service on Shapiro as an implied agent. The Federal Rules of Civil
Procedure authorize service of process by delivering a copy of the summons and
operative complaint “to an agent authorized by appointment or by law to receive
service of process.” Fed. R. Civ. P. 4(e)(2). Service on a foreign entity’s managing
agent is also proper. Fed. R. Civ. P. 4(h)(1). Under Rule 4(e)(2), an agent may have
the implied authority to accept service of process on behalf of a foreign entity. See
United States v. Ziegler Bolt & Parts Co., 111 F.3d 878, 881 (Fed. Cir. 1997) (“An
agent’s authority to accept service may be implied in fact”); see also
Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 706–707 (1988)
(upholding service on an implied agent of a foreign corporation); 4A CHARLES A.
WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1097, at 84-85
(2d ed. 1987) (“Although authority to accept process need not be explicit, it must
either be express or implied from the type of relationship between defendant and the
alleged agent.”). Given the Defendants’ various Rule 26 filings and exchange with
Shapiro regarding Riesterer, Plaintiff’s counsel had a good faith basis to believe that
Shapiro was the United States agent for Rister.
Under the facts of this case, Plaintiff’s counsel, based on their reasonable
reliance on available evidence as shown in the Katz Declaration, asserted the position
that Shapiro has the implied authority to accept service on Rister’s behalf pursuant to
Rule 4(e)(2) in good faith. Indeed, by citing directly to content posted on Shapiro’s
own website specifically advertising “Shapiro Bernstein Representing Square
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1 Rivoli and Rister Editions” in the form of an announcement of its relationship as
2 Rister’s representative in the United States, together with the reference to liner notes
3 for The Black Eyed Peas album The E.N.D. (which states that “Square Rivoli and
4 Rister Editions [are] administered in the United States by Shapiro, Bernstein &
5 Co., Inc. (ASCAP)”), Plaintiff provided direct evidence as to the implied authority
6 of Shapiro. See Katz Declaration [Doc. 123-1]. Plaintiff’s counsel maintains that
7 Shapiro holds itself out as Rister’s United States representative and United States
8 administrator. As such, based on that evidence Plaintiff’s counsel concluded that at
9 the very least, Shapiro had implied authority to accept service of process. Plaintiff’s
10 counsel further maintains their position that Rister’s counsel’s disavowal of

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 Shapiro’s agency relationship with Rister is disingenuous based on the evidence
12 available. Indeed, a similar disavowal was repeatedly made by Loeb & Loeb as to its
13 representation of Frederic Riesterer when Plaintiff initially attempted to effectuate
14 service on Riesterer.1
15

The conduct of Loeb & Loeb, as counsel for Shapiro in (1) refusing to

16 accept service for Riesterer, (2) refusing to provide Riesterer’s address; and
17 (3) subsequently appearing for and answering on Riesterer’s behalf, raises a
18 legitimate question as to whether Shapiro at the very least had implied authority to
19 accept service for Rister under Rule 4(h)(1). According to Shapiro’s press release,
20 the Black Eyed Peas and Mr. Slotnick, Shapiro represents Rister in connection with
21 Rister’s business activities in the United States. Those activities would of course
22
1
Co-defendants disclosed
in their Rule disclosure with
23 address of Loeb & Loeb inFrederic Riesterer (See Exhibits 26 and B to Dickie the
New York, NY.
A
Decl.).
When Plaintiff’s counsel attempted to serve Riesterer at that address, the managing
24 partner for Loeb & Loeb stated that Loeb & Loeb was not representing Riesterer.
correspondence between Dean
Barry Slotnick
25 See copies of Group C-E to Dickie Decl. Attorneys A. Dickie and Loeb have since
attached as Exhibits
from Loeb &
their appearance
behalf despite
26 filed did not represent on Riesterer’s and their initialtheir repeated assurances that
they
Mr. Riesterer
refusal to even provide his
address. See also ¶¶ 8-16 of the Declaration of Dean A. Dickie filed April 26, 2011
27 in Opposition to the Barry Slotnick Declaration [Doc. #129].
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1 ostensibly include dealing with the claims involved in the instant Amended
2 Complaint, especially those claims that relate to its sub-publishing activities. Based
3 on this information and the fact that Rister’s business activities form the basis for
4 naming Rister as a defendant and making it amenable to suit in the Central District of
5 California, Plaintiff’s counsel had a legitimate basis to conclude that Shapiro had
6 implied authority to accept service and was a managing agent for purposes of
7 effecting service on Rister. Montclair Electronics, Inc. v. Electra/Midland Corp.,
8 326 F. Supp. 839, 842 (S.D.N.Y. 1971); Am. Football League v. Nat’l Football
9 League, Inc., 27 F.R.D. 264, 269 (D. Md. 1961). The Court’s failure to discuss its
10 analysis of this evidence in concluding that Plaintiff’s conduct was reckless suggests

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HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

11 this evidence was never considered.
12

Plaintiff’s counsel appropriately relied on the case law which is clear that even

13 where the relationship is expressly denied, it may be nonetheless implied. Ziegler
14 Bolt & Parts Co., 111 F.3d at 881. Shapiro’s counsel’s past actions in denying any
15 relationship with Riesterer himself, only to file an appearance subsequently on his
16 behalf, support a basis for finding implied agency despite Shapiro’s assertions to the
17 contrary. Furthermore, it was not until after the second attempt at service on Shapiro
18 with the correct proof of service that Rister provided a declaration as evidence of the
19 lack of agency relationship with Shapiro. [Doc. #125] Plaintiff’s counsel
20 appropriately proceeded in attempting to serve Rister promptly. Given the prior
21 exchange between Plaintiff’s counsel and Loeb & Loeb, Plaintiff’s counsel could not
22 take Loeb & Loeb’s express denial at face value since its representations were in
23 conflict with the representations offered to the public on the Internet.
24

The assumption by Plaintiff’s counsel as to the relationship between Shapiro

25 and Rister and their subsequent attempt at service on Shapiro based thereon certainly
26 does not constitute subjective bad faith on the part of Plaintiff’s counsel warranting
27 the imposition of sanctions. The Court’s failure to consider evidence of Plaintiff’s
28
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1 counsels’ good faith as presented in the opposition was clear error and should be
2 reconsidered.
3 V.

CONCLUSION

4

Based upon the foregoing, Pringle’s counsel respectfully requests that the

5 Court reconsider its April 12, 2011 Order awarding the very harsh penalty of
6 sanctions pursuant to 28 U.S.C § 1927.
7
8
9

Dated: May 10. 2011

Dean A. Dickie (appearing Pro Hac Vice)
Kathleen E. Koppenhoefer (appearing Pro Hac Vice)
MILLER, CANFIELD, PADDOCK AND STONE,
P.L.C.

10

LLP

HAMPTONHOLLEY

2101 East Coast Highway, Suite 260
Corona del Mar, California 92625

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By:

Attorneys for Plaintiff Bryan Pringle

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