Datatech Enterprises, LLC v. FF Magnat Limited et al

Filing 43

ORDER by Judge Charles R. Breyer denying 38 Motion for Leave to File Motion for Reconsideration. (crblc2, COURT STAFF) (Filed on 10/4/2012)

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1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA United States District Court For the Northern District of California 10 11 DATATECH ENTERPRISES LLC, 12 Plaintiff, 13 14 No. C 12-04500 CRB ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION v. FF MAGNAT LIMITED ET AL., 15 Defendants. / 16 17 INTRODUCTION 18 Defendant FF Magnat Ltd. (“Magnat”) has moved for leave to file a motion for 19 reconsideration of this Court’s asset-freeze preliminary injunction. See dkt. 38, 39. Magnat 20 says (1) this Court overlooked controlling Supreme Court authority; (2) newly submitted 21 bank records show that Magnat never attempted to conceal funds; and (3) this Court got the 22 personal jurisdiction issue wrong. All of the cases and documents Magnat now relies on 23 were available to it during the original briefing, and none of Magnat’s new arguments have 24 merit. 25 I. BACKGROUND 26 This Court previously granted Datatech’s request for an asset-freeze preliminary 27 injunction. Dkt. 34, 35. In relevant part, the Court found that (1) a pretrial asset-freeze 28 injunction was available upon a proper showing because Datatech’s claim for disgorgement of profits under section 504(b) of the Copyright Act involved an equitable remedy, dkt. 34 at 1 6-7; (2) Datatech established a “reasonable probability of success” on the issue of personal 2 jurisdiction, id. at 3-5; and (3) Datatech established a likelihood of dissipation of assets and 3 irreparable harm, id. at 7. 4 II. To be granted leave to file a motion for reconsideration, a party must demonstrate one 5 6 of the following: (1) That at the time of the motion for leave, a material difference in fact or law exists from that which was presented to the court before entry of the interlocutory order for which reconsideration is sought. The party shall also show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or (2) The emergence of new material facts or a change of law occurring after the time of such order; or (3) A manifest failure by the court to consider material facts which were presented to the court before such interlocutory order. 7 8 9 10 United States District Court For the Northern District of California LEGAL STANDARD 11 12 Civil L.R. 7-9(b); see also Fed. R. Civ. P. 54(b). 13 III. DISCUSSION 14 A. Propriety of Motion for Reconsideration 15 Magnat argues that this Court made a “fundamental error of law” by overlooking a 16 1998 Supreme Court case that neither party brought to the Court’s attention, and further 17 contends that this Court reached the wrong conclusions on the issues of personal jurisdiction 18 and likelihood of dissipation. Mot. at 1. Those arguments do not identify a change in law or 19 facts, nor do they explain why Magnat could not have cited these cases and provided these 20 documents during the previous briefing. Accordingly, Magnat has not made the necessary 21 showing under Local Rule 7-9(b). 22 B. Substance of Magnat’s Arguments 23 Regardless, the arguments Magnat advances have no merit. 24 1. Disgorgement of profits 25 Magnat says that the Supreme Court has “specifically held that the damages available 26 under Section 504(b) are legal and not equitable.” Mot. at 3-4 (citing Feltner v. Columbia 27 Pictures Television, Inc., 523 U.S. 340, 346 (1998)). In fact, the Supreme Court has never 28 2 1 addressed, in Feltner or any other case, whether disgorgement of profits under Section 504(b) 2 is an equitable remedy permitting a pretrial asset-freeze injunction. 3 Rather, in Feltner, the Court held that “the Seventh Amendment provides a right to a 4 jury trial on all issues pertinent to an award of statutory damages under § 504(c) of the 5 Copyright Act, including the amount itself.” Id. at 355. In construing section 504(c), the 6 Court looked at nearby statutory provisions and commented in dicta that “awards [under 7 504(b)] of actual damages and profits . . . generally are thought to constitute legal relief.” Id. 8 at 346 (emphasis added). The Court hedged on the issue, and cited only cases dealing with 9 actual damages–not profits. United States District Court For the Northern District of California 10 And, the Ninth Circuit has previously observed that whether an asset freeze injunction 11 is appropriate and whether the Seventh Amendment right to a jury trial attaches–which was 12 the issue the Supreme Court addressed in Feltner–are not fungible inquiries. See Microsoft 13 Corp. v. U-Top Printing Corp., 46 F.3d 1143 (9th Cir. 1995) (unpublished). This Court is not 14 aware of a single case holding that asset-freeze injunctions are unavailable in actions for 15 disgorgement of profits under section 504(b), and several cases have observed that section 16 504(b)’s disgorgement remedy is equitable in nature.1 Nothing in Feltner persuades the 17 Court that its previous conclusion was incorrect. 18 2. Asset dissipation 19 Magnat next provides a “supplemental” declaration of Defendant Stanislav, attaching 20 to it bank records purportedly showing that transferring assets out of the United States was a 21 routine business transaction and not an attempt to conceal money. See Stanislav Decl. (dkt. 22 39). The controlling question for purposes of the injunction is whether “absent a freeze, 23 [Defendant] would either dispose of, or conceal, or send abroad, all of the moneys.” F.T.C. 24 v. H. N. Singer, Inc., 668 F.2d 1107, 1113 (9th Cir. 1982) (emphasis added). Magnat’s 25 documents may well suggest that it did not intend to conceal the money, but the reason for 26 27 1 See Data Gen. Corp. v. Grumann Sys. Support Corp., 36 F.3d 1147, 1176 (1st Cir. 1994), abrogated on other grounds, 130 S. Ct. 1237 (2010); Microsoft Corp. v. Quebec, Inc., No. 0628 CV-0892, 2007 WL 3232465, at *1 (N.D. Ohio Nov. 1, 2007); cf. Semerdjian v. McDougal Littell, 641 F. Supp. 2d 233, 247 (S.D.N.Y. 2009). 3 1 the money disappearing abroad is less important than the fact it will move beyond this 2 Court’s reach. Magnat’s new documents actually provide further evidence of the likelihood 3 of that happening. 4 3. Personal jurisdiction 5 Finally, Magnat says this Court was wrong about the likelihood of Datatech showing 6 that this Court has personal jurisdiction over Magnat. It cites one new case that bears no 7 resemblance to the facts here, see Glencore Gain Rotterdam B.V. v. Shivnath Rai Harnarain 8 Co., 284 F.3d 1114, 1126-27 (9th Cir. 2002) (action by Dutch company to confirm British 9 arbitration award against Indian company stemming from contract dispute involving United States District Court For the Northern District of California 10 shipments of rice to India), and otherwise rehashes the arguments this Court previously 11 found unpersuasive. Nothing has changed. 12 IV. 13 CONCLUSION Magnat has failed to identify a proper basis for bringing a motion for reconsideration, 14 and in any event its arguments have no merit. The Court therefore DENIES Magnat’s 15 Motion for Leave to File a Motion for Reconsideration. 16 IT IS SO ORDERED. 17 Dated: October 4, 2012 CHARLES R. BREYER UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28 G:\CRBALL\2012\4500\order re reconsideration.wpd 4

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