GREE, Inc. v. Supercell Oy

Filing 3

ORDER GRANTING MOTION FOR ORDER TO SHOW CAUSE. Order to Show Cause Hearing set for 4/29/2021 10:00 AM. Show Cause Response due by 4/15/2021. Signed by Judge Thomas S. Hixson on 4/1/2021. (cdnS, COURT STAFF) (Filed on 4/1/2021)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GREE, INC., Case No. 21-mc-80069-TSH Plaintiff, 8 ORDER GRANTING MOTION FOR ORDER TO SHOW CAUSE 9 v. 10 SUPERCELL OY, Defendant. United States District Court Northern District of California 11 12 13 14 I. INTRODUCTION GREE, Inc. moves this Court for an order pursuant to Federal Rule of Civil Procedure 15 45(g) for non-party Discord, Inc. to show cause why it should not be held in civil contempt for 16 failing to obey the subpoena served upon it on March 5, 2021. ECF No. 1. For the reasons 17 explained below, the Court ORDERS Discord to appear before this Court on April 29, 2021 at 18 10:00 a.m. to show cause why it should not be held in civil contempt for failure to obey the 19 subpoena. 20 21 II. BACKGROUND The litigation giving rise to this motion is a patent litigation matter pending in the United 22 States District Court for the Eastern District of Texas, Gree, Inc. v. Supercell Oy, No. 2:20-cv- 23 00113-JRG-RSP, filed on April 21, 2020. In that case, GREE accuses the Clash Royale game of 24 Supercell Oy of infringing U.S. Patent Nos. 10,549,187, 10,610,771, and 10,625,149. Fact 25 discovery in the underlying litigation is set to close on April 2, 2021. Mot. at 1. According to 26 GREE, it identified comments posted on Discord’s social media platform relevant to issues in the 27 underlying litigation as they relate to users experience with and consideration of specifically 28 accused features. Id.; Boothe Decl., Ex. B (representative sampling of such comments). 1 On March 5, 2021, pursuant to Rule 45, and after multiple attempts at service on Discord’s 2 registered agent in California, GREE served a subpoena duces tecum and subpoena ad 3 testificandum on Discord on its other registered agent in Delaware. Boothe Decl., Ex. A 4 (subpoenas); Ex. C (affidavits of service). The subpoenas request that Discord produce documents 5 and testimony relating to specifically identified posts on Discord’s website. The subpoenas 6 request that documents be produced on March 17, 2021, and that Discord provide a witness to 7 authenticate its documents by March 18, 2021. Discord failed to respond to the subpoenas by the 8 required dates. Id., Decl. ¶ 4. 9 On March 23, 2021, counsel for GREE, Norris P. Boothe, sent an email to attempting to reach Discord and informing Discord that it had not timely 11 United States District Court Northern District of California 10 responded to the subpoenas. Id., Ex. D. When Discord failed to respond to that email, Mr. Boothe 12 followed up with a second email to Discord on March 25, 2021, informing Discord that GREE 13 would seek Court intervention if Discord did not respond. Id., Ex. E. Further, on March 26, 14 counsel for GREE, Taylor Ludlam, discovered an additional email address for Discord to which 15 all service of process and law enforcement claims were to be sent (see Working with law 16 enforcement,, 17 enforcement (last visited April 1, 2021)). Ludlam Decl. ¶ 1. Ms. Ludlam followed up on the two 18 prior emails with another email to the address: attempting, yet 19 again to obtain a response from Discord. Id., Ex. A. Further, Ms. Ludlam left a voicemail in the 20 general voicemail box for Discord asking for any response from Discord. Id. ¶ 2. Despite further 21 diligence, no further contact information is available for Discord. 22 GREE filed the present motion on March 31, 2021. 23 24 III. LEGAL STANDARD Federal Rule of Civil Procedure 45 permits the use of a subpoena to command a nonparty 25 recipient to produce specified books, documents, electronically stored information, or other 26 tangible things in the recipient’s possession, custody and control. Fed. R. Civ. P. 45(a)(1)(A)(iii). 27 After the proponent has served the subpoena, the recipient may elect to comply with the subpoena, 28 or may move to quash based on undue cost or burden, object to the subpoena’s form, or challenge 2 1 the subpoena, according to procedures set forth in Rule 45. If the recipient fails or refuses to 2 respond to the subpoena, the proponent may first try to negotiate compliance, as by offering to 3 meet and confer, but ultimately, if the recipient fails to comply without adequate excuse, the 4 recipient is in contempt of court, and the proponent must file an application for an order to show 5 cause why a contempt citation should not issue. See Alcalde v. NAC Real Est. Invs. & 6 Assignments, Inc., 580 F. Supp. 2d 969, 971 (C.D. Cal. 2008). “[W]hen a non-party does not 7 comply with a subpoena and does not appear for deposition, the most appropriate procedural step 8 is to file an application for an order to show cause, not a motion to compel.” Martinez v. City of 9 Pittsburg, 2012 WL 699462, at *4 (N.D. Cal. Mar. 1, 2012). 10 United States District Court Northern District of California 11 IV. DISCUSSION Here, the subpoenas sought compliance in this District, where Discord’s principal place of 12 business is located, yet Discord has failed to respond. Boothe Decl., Ex. A. The subpoenas 13 contained all required information (such as the time and place of the deposition) and service of the 14 subpoenas was properly made on Discord’s agent for service of process. Boothe Decl., Ex. C. As 15 such, the Court turns to the consequences of Discord’s non-compliance. 16 “Subpoenas issued by attorneys are issued on behalf of the court and thus are treated as 17 orders of the court.” Martinez, 2012 WL 699462, at *2 (citing U.S. S.E.C. v. Hyatt, 621 F.3d 687, 18 693 (7th Cir. 2010); Higginbotham v. KCS Int'l, Inc., 202 F.R.D. 444, 455 (D. Md. 2001). A 19 contempt charge against a nonparty may be criminal or civil in nature. See Falstaff Brewing Corp. 20 v. Miller Brewing Co., 702 F.2d 770, 778 (9th Cir. 1983). Criminal contempt is punitive, and it is 21 designed to punish the affront to the court. See Gompers v. Buck's Stove & Range Co., 221 U.S. 22 418, 441 (1911); see also In re Sequoia Auto Brokers LTD., Inc., 827 F.2d 1281, 1283 n. 1 (9th 23 Cir.1987). Thus, it may include fines payable to the court and it also may include jail time. 18 24 U.S.C. § 401. 25 GREE asks for the Court to hold Discord in civil contempt. Mot. at 4. “Civil contempt is 26 characterized by the Court’s desire to compel obedience with a court order, or to compensate the 27 contemnor’s adversary for the injuries which result from the non-compliance.” Martinez, 2012 28 WL 699462, at *3 (citing Falstaff Brewing Corp., 702 F.2d at 778). A district court has wide 3 latitude in determining whether there has been a contemptuous defiance of one of its orders. Stone 2 v. City & Cty. of San Francisco, 968 F.2d 850, 856 (9th Cir. 1992), as amended on denial of reh’g 3 (Aug. 25, 1992). “A civil contempt order must be accompanied by a ‘purge’ condition, meaning, 4 it must give the contemnor an opportunity to comply with the order before payment of the fine or 5 other sanction becomes due.” Martinez, 2012 WL 699462, at *3 (citing De Parcq v. U.S. Dist. Ct. 6 for S. Dist. of Iowa, 235 F.2d 692, 699 (8th Cir. 1956) (“[C]ivil contempt is conditional in nature 7 and can be terminated if the contemnor purges himself of the contempt.”)). In imposing civil 8 contempt sanctions, the court must impose the least possible sanction to coerce the contemnor to 9 comply with the order. Whittaker Corp. v. Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992) 10 (“Generally, the minimum sanction necessary to obtain compliance is to be imposed.”) (citing 11 United States District Court Northern District of California 1 Spallone v. United States, 493 U.S. 265, 280 (1990)). Where the purpose of the contempt order is 12 to ensure a party’s compliance, the court must “consider the character and magnitude of the harm 13 threatened by continued contumacy, and the probable effectiveness of any suggested sanction in 14 bringing about the result desired.” Bademyan v. Receivable Mgmt Servs. Corp., 2009 WL 605789, 15 at *3 (C.D.Cal. Mar. 9, 2009) (citing Whittaker, 953 F.2d at 516). 16 To establish civil contempt, GREE must show by clear and convincing evidence that 17 Discord violated a specific order of the court. See F.T.C. v. Affordable Media, 179 F.3d 1228, 18 1239 (9th Cir. 1999). If GREE meets that burden, Discord must then show that it took every 19 reasonable step to comply with the subpoena and to articulate reasons why compliance was not 20 possible. See Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th Cir. 1983). A court may consider a 21 history of noncompliance and a failure to comply despite the pendency of a contempt motion. See 22 Stone, 968 F.2d at 856-57. If an alleged contemnor’s actions were taken in good faith or based on 23 a reasonable interpretation, it should not be held in contempt. Id. 24 As discussed above, GREE has shown that Discord violated a specific and definite order of 25 the Court by failing to comply with the subpoenas. The Court thus grants GREE’s motion for an 26 order to show cause. See Martinez, 2012 WL 699462, at *3 (employing this procedure); Prescott 27 v. Cty. of Stanislaus, 2012 WL 10617, at *4 (E.D. Cal. Jan. 3, 2012) (same); Rodriguez v. Cty. of 28 Stanislaus, 2010 WL 3733843, at *6 (Sep. 16, 2010) (proper procedure is issuing the order to 4 1 2 3 show cause). V. CONCLUSION AND ORDER TO SHOW CAUSE Based on the analysis above, the Court GRANTS GREE’s motion and ORDERS Discord, 4 Inc. to show cause why it should be held in contempt for its failure to comply with the subpoena. 5 Discord shall file a declaration by April 15, 2021, and the Court shall conduct a hearing on April 6 29, 2021 at 10:00 a.m. by Zoom video conference. The webinar link and instructions are located 7 at Should Discord arrange with GREE to 8 provide the requested documents and a witness to authenticate them prior to April 15, 2021, the 9 parties shall notify the Court immediately, and the April 15 show cause hearing will be vacated. 10 United States District Court Northern District of California 11 GREE shall serve this order upon Discord and e-file proof of service by April 5, 2021. IT IS SO ORDERED. 12 13 Dated: April 1, 2021 14 THOMAS S. HIXSON United States Magistrate Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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