Cats and Dogs Animal Hospital, Inc. v. Yelp! Inc.

Filing 71

Memorandum in Opposition re 64 MOTION to Consolidate Cases DEFENDANT YELP! INC.S OPPOSITION TO PLAINTIFFS CROSS-MOTION FOR:(A1) DESIGNATION OF CATS AND DOGS AS LEAD ACTION AND STAY OF LEVITT ACTION-OR, IN THE ALTERNATIVE (A2) CONSOLIDATION OF ACTIONS, DEEMING CATS AND DOGS FIRST AMENDED COMPLAINT AS THE OPERATIVE PLEADING (B) APPOINTMENT OF THE WESTON FIRM AND BECK & LEE AS INTERIM CLASS COUNSEL; AND (C) SUBMISSION OF FULLY-BRIEFED MOTION TO DISMISS FOR HEARING filed byYelp! Inc.. (Brown, Matthew) (Filed on 6/28/2010)

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

COOLEY LLP MICHAEL G. RHODES (116127) ([e-mail]) MATTHEW D. BROWN (196972) ([e-mail]) BENJAMIN H. KLEINE (257225) ([e-mail]) 101 California Street, 5th Floor San Francisco, CA 94111-5800 Telephone: [phone] Fax: [phone] Attorneys for Defendant YELP! INC.

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

BORIS Y. LEVITT, on behalf of himself and all others similarly situated, Plaintiff, v. YELP! INC.; and DOES 1 through 100, inclusive, Defendants.

No. CV 10-01321 MHP DEFENDANT YELP! INC.'S OPPOSITION TO PLAINTIFFS' CROSS-MOTION FOR: (A1) DESIGNATION OF CATS AND DOGS AS LEAD ACTION AND STAY OF LEVITT ACTION ---OR, IN THE ALTERNATIVE--(A2) CONSOLIDATION OF ACTIONS, DEEMING CATS AND DOGS' FIRST AMENDED COMPLAINT AS THE OPERATIVE PLEADING (B) APPOINTMENT OF THE WESTON FIRM AND BECK & LEE AS INTERIM CLASS COUNSEL;
AND

(C) SUBMISSION OF FULLY-BRIEFED MOTION TO DISMISS FOR HEARING Date: Monday, July 19, 2010 Time: 2:00 p.m. _ Judge: Hon. Marilyn Hall Patel CATS AND DOGS ANIMAL HOSPITAL, INC., et al., on behalf of itself and all others similarly situated, Plaintiffs, v. YELP! INC., Defendant. No. CV 10-02351 MHP

DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

I.

INTRODUCTION Defendant Yelp! Inc. ("Yelp") has sought, for months now, to simplify the procedural

setting of this case and to have it (and the related litigations against Yelp) conducted in an orderly fashion. In contrast, Plaintiffs in Cats and Dogs Animal Hospital, Inc. v. Yelp! Inc., No. CV 1002351 MHP ("Cats and Dogs") have repeatedly taken positions that would increase the complexity of the cases and increase the burden on the Court and the parties. Plaintiffs' crossmotion here is no exception. This case was originally filed in the Central District, as was another putative class action arising from the same facts, which Yelp attempted--without cooperation from Plaintiffs' counsel--to consolidate with this action.1 The case was ordered transferred to this district (over Plaintiffs' objection), which the Central District found to be more convenient for the parties and witnesses, in part, because of the potential for consolidation with the related putative class action already pending here, Boris Y. Levitt v. Yelp! Inc., Case No. CV 10-01321 MHP ("Levitt"). Yelp has now moved to consolidate this action with Levitt, seeking to streamline the proceedings and avoid litigating related lawsuits separately. Again, Plaintiffs take an

obstructionist position. They now argue that, rather than consolidating these related cases, the Court should instead stay the Levitt action, despite Plaintiffs' belief that Levitt has an alleged factual scenario that is "identical" to seven (of the ten) Cats and Dogs named Plaintiffs. (CrossMotion at 4:15­16.) In essence, Plaintiffs ask the Court to ignore the Levitt action while this case proceeds. This approach would subvert a fundamental basis for the transfer of this action to this Court--the efficient resolution of all class actions against Yelp. Also, this would mean that after the conclusion of this action, Yelp would still be forced to defend the Levitt action, involving burdensome (and potentially duplicative) motion practice, at a minimum, and potentially even more substantially burdensome litigation through trial. Such a result is neither efficient nor orderly. In any event, Plaintiffs' motion to stay the Levitt action should be denied because they lack standing to bring it, and fail to provide any substantive basis for such a motion. Ultimately, that related case, LaPausky v. Yelp! Inc., was taken over by Plaintiffs' counsel here, and then dismissed in an apparent effort to stymie Yelp's motions to consolidate and transfer. 1.
DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP
1

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

II.

RELEVANT FACTS & PROCEDURAL HISTORY Yelp incorporates by reference Section II, Relevant Facts and Procedural History, from its

Motion to Consolidate Related Cases for All Purposes. (See Docket No. 64 at 3:15­6:20.) III. ARGUMENT A. Plaintiffs' Cross-Motion to Stay Levitt Should Be Denied. 1. Plaintiffs Lack Standing to Move to Stay the Levitt Action.

Plaintiffs in Cats and Dogs ask this Court to stay Levitt--a case to which they are not a party. This is procedurally improper, since Plaintiffs in Cats and Dogs have no standing to make such a motion.2 If Plaintiffs in Cats and Dogs wish to make procedural motions in the Levitt action, the correct course would be for Plaintiffs to first move to intervene in Levitt under Federal Rule of Civil Procedure 24(a) or 24(b) and then, if the Court were to grant Plaintiffs' status as intervenors, move to stay the Levitt action. See, e.g., Widjaja v. Yum! Brands, Inc., No. CV-F-091074 OWW/DLB, 2009 WL 3462040, at *7-10 (E.D. Cal. Oct. 22, 2009) (granting motion brought by plaintiffs of first-filed action to intervene in later-filed, related action, but then denying their motion to stay later-filed action and finding consolidation to be "the most efficient and fair way to protect the interests of all parties"). 2. Plaintiffs Have Pointed to No Authority Supporting a Stay of Levitt.

In addition to the procedural impropriety of asking the Court to stay a case to which they are not a party, Plaintiffs cite no authority whatsoever to support a stay of Levitt and merely argue that consolidation with Levitt would result in delay. Plaintiffs may argue that their motion to stay is based on the first-to-file rule, but that rule does not apply to the present circumstances. The first-to-file rule "is a generally recognized doctrine of federal comity which permits a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another jurisdiction." Pacesetter Sys. Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982) (emphasis added). Cats and Dogs and Levitt are no longer in Nor does Plaintiffs' potential status as putative class members in Levitt make them "parties" to that action. Saleh v. Titan Corp., 353 F. Supp. 2d 1087, 1091 (S.D. Cal. 2004) ("[T]he Ninth Circuit . . . [has] concluded that putative class members are not parties to an action prior to class certification."). 2.
DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP
2

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

separate jurisdictions--these related actions are both in the Northern District, before the same judge--because the Central District granted Yelp's motion, under 28 U.S.C. § 1404(a), to transfer Cats and Dogs to the Northern District. (Docket No. 56 at 7 ("[T]he Court finds that Defendant has clearly established that for the convenience of the parties and witnesses, and in the interests of justice, this action should be transferred to the Northern District of California.").) Thus, the firstto-file doctrine has no application here, and Plaintiffs have not pointed to any authority supporting an argument that the Court should stay Levitt on the basis of the first-to-file rule. Furthermore, the Central District already decided the first-to-file issue. In its decision to transfer the Cats and Dogs case to the Northern District, the Central District declined to apply the first-to-file rule based on the "balance of convenience exception": Plaintiffs argue that the first-to-file rule weighs against transfer . . . However . . . a court may relax the first-to-file rule `if the balance of convenience weighs in favor of the later-filed action.' The Court finds that the balance of convenience weighs in favor of transfer, and thus the first-to-file rule does not prevent transfer. (See id. at 6 (citing Ward v. Follett Corp., 158 F.R.D. 645, 648 (N.D. Cal. 1994).) Importantly, "[t]he balance of convenience exception to the first-to-file rule includes consideration of the same convenience factors considered under a 28 U.S.C. § 1404(a) transfer of venue motion."3 Sony Computer Ent't Am. Inc. v. Am. Med. Response, Inc., No. C06-06603 CW, 2007 WL 781969, at *4 (N.D. Cal. Mar. 13, 2007).4 Plaintiffs have already lost this argument, and this Court should reject any attempt to raise it again. 3. Staying Levitt Would Be Neither Efficient Nor Fair.

Plaintiffs' main objection to consolidation appears to be a purported delay of the proceedings. (Cross-Motion at 3:20­4:13.) But the real delay (and substantial additional burden) The fact that the first-to-file exception includes an analysis of the relative convenience of the courts under the § 1404(a) factors further demonstrates that the doctrine is inapplicable to a situation where the actions are pending in the same district. A determination of convenience is typically addressed by the court in the first-filed action. Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 628 (9th Cir. 1991) ("As for the respective convenience of the two courts, normally this argument should be addressed to the court in the first-filed action. Apprehension that the first court would fail to appropriately consider the convenience . . . should not be a matter for [the second court's] consideration."). 3.
DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP
4 3

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

would result from the stay that Plaintiffs are requesting in their cross-motion. Once this case was over, Yelp and the plaintiff in Levitt would be forced to restart that case and engage in complex briefing regarding the preclusive effect of the judgment in Cats and Dogs,5 and potentially even more burdensome litigation thereafter, including a new round of motions to dismiss, duplicative discovery, new expert reports, new summary judgment motions, and a new trial--all on claims that arise from nearly the same alleged facts as the claims in the Cats and Dogs litigation. This result would be wholly inefficient and inequitable, defeat a key purpose of Yelp's successful motion to transfer Cats and Dogs to this Court, and undermine the principles supporting the Court's procedures for consolidation--namely, the efficient, orderly litigation of related actions. Consolidation would not result in delay.6 Instead, consolidation would make this

litigation more efficient by streamlining the discovery process and halving the required motions. See Siegall v. Tibco Software, Inc., No. C 05-2146 SBA, 2006 WL 1050173, at *2 (N.D. Cal. Feb. 24, 2006) ("The purpose of consolidation is to avoid unnecessary costs or delays that would ensue from proceeding separately with claims or issues sharing common aspects of law or fact."). The Central District correctly reasoned that the potential consolidation of Cats and Dogs with Levitt supported transfer (see Docket No. 56 at 6), and, as Plaintiffs' admit, "the Court in its discretion could consolidate the Cats and Dogs and Levitt actions under Rule 42(a) because they involve common questions of law and fact." (Cross-Motion at 3:22­25.) Yelp requests that to promote an efficient and orderly resolution of all actions, this Court exercise its discretion to consolidate these cases rather than invite unneeded delay, burden, and uncertainty by staying the Levitt action.

While a judgment in Cats and Dogs may have some preclusive effect in Levitt, not all of the claims in Levitt have been asserted in Cats and Dogs. Thus, at a minimum, Yelp and the Levitt plaintiff would have to submit briefing on the extent of any preclusive effect prior to proceeding with litigation of the Levitt plaintiff's claims--all this even though all of the claims stem from what Plaintiffs describe as an alleged "scenario" that is "identical to seven [of ten] of the Cats and Dogs Plaintiffs." (See Cross-Motion at 4:15-16.)
6

5

Yelp will be filing a separate reply in support of its Motion to Consolidate. 4.
DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

B.

If Consolidation Is Granted, Plaintiffs' Cross-Motion to Deem Their First Amended Complaint as the Operative Pleading Should Be Denied.

Plaintiffs make an odd request that if the Court grants consolidation, the Court should also deem their First Amended Complaint the "operative" pleading. This makes no sense. The consolidated and superseding complaint should include all eleven named plaintiffs in both the Cats and Dogs and Levitt cases, and should also include plaintiff-specific allegations for each named plaintiff. Proceeding with the current Cats and Dogs complaint--without modification-- would not incorporate all named plaintiffs, or their claims and allegations, into the litigation. It would also muddy which claims and allegations are presently asserted against Yelp. (See also Yelp's Motion to Consolidate, Docket No. 64 at 10:5­19 (citing authorities discussing advantages of consolidated complaint).) Plaintiffs have not explained how the remaining claims by Levitt would be resolved if the Cats and Dogs complaint becomes the "operative" complaint. Yelp likely would be forced to litigate these remaining claims after the conclusion of the litigation over the Cats and Dogs complaint, as discussed above. Thus, Plaintiffs' proposal would only further complicate and confuse these proceedings. C. Yelp Defers to the Court as to Appointment of Interim Class Counsel.

Yelp takes no formal position on whether moving counsel should be appointed to act as interim class counsel for the putative class. Yelp does note that moving counsel has consistently thwarted reasonable efforts to effect a procedurally streamlined process (e.g., resisting attempts to consolidate all related class actions, supported by a superseding complaint to avoid the risk of duplication and claim splitting). Moving counsel's attitude toward other plaintiffs' counsel in the related cases has also been less than exemplary. For example, in a Central District court filing, moving counsel accused counsel for LaPausky of "collusion" with Yelp simply for stipulating to consolidation and to an extension of time to respond to the complaint. (Docket No. 16:20-24.) Moving counsel has also criticized counsel for Levitt for stipulating to an extension of time to respond to the complaint (Cross-Motion at 5:12-17), and refused to include Levitt's counsel in a meet-and-confer process regarding discovery (Docket No. 66-2, ¶ 3).

5.

DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

Despite these actions, Yelp defers to the Court's judgment on this issue, and reserves its right to make any arguments in connection with later motions concerning class counsel, should they arise. D. Plaintiffs' Cross-Motion for Yelp to Re-submit Its Previously Filed Motion to Dismiss Should Be Denied.

Yelp's motion to dismiss was pending before the Central District when Judge Fairbank ordered Cats and Dogs transferred to the Northern District. Judge Fairbank did not rule on this motion, holding, in light of her decision to transfer, that "the separate Motion to Dismiss filed by [Yelp] is moot and taken off calendar." (Docket No. 56 at 1.) As an initial matter, there is no authority, and Plaintiffs cite none, that permits Plaintiffs to dictate that Yelp re-file a motion that has been declared moot. Further, if the Court grants Yelp's motion for consolidation and orders the filing of a superseding, consolidated complaint (which it should), any new motion to dismiss should address the content of the latest pleading, and not solely the claims of the Cats and Dogs complaint. If the Court does not grant consolidation, Yelp respectfully requests that the Court allow it to file a new motion to dismiss relying on case law from the Northern District of California rather than the Central District of California. Either way, Plaintiffs' Cross-Motion should be denied. Regardless, Yelp seeks clarification from the Court as to its deadline for filing a motion to dismiss, based on this Court's standing order that provides that motions to dismiss shall not be filed before the Initial Case Management Conference, except by leave of Court. To date, no CMC has been held by either court. IV. CONCLUSION For the foregoing reasons, Yelp respectfully requests that Plaintiffs' cross-motion be denied in its entirety.

6.

DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP

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
COOLEY LLP
A T T O R N E Y S A T LAW S A N FR A N C I S C O

Dated: June 28, 2010

COOLEY LLP

/s/ Matthew D. Brown Matthew D. Brown (196972) Attorneys for Defendant Yelp! Inc.

7.

DEFENDANT YELP'S OPPOSITION TO CATS AND DOGS PLAINTIFFS' CROSS-MOTION CASE NOS. CV 10-01321 & 10-02351 MHP