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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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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GREE, INC.,

Case No. 21-mc-80069-TSH
Plaintiff,

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ORDER GRANTING MOTION FOR
ORDER TO SHOW CAUSE

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v.

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SUPERCELL OY,
Defendant.

United States District Court
Northern District of California

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I.

INTRODUCTION

GREE, Inc. moves this Court for an order pursuant to Federal Rule of Civil Procedure

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45(g) for non-party Discord, Inc. to show cause why it should not be held in civil contempt for

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failing to obey the subpoena served upon it on March 5, 2021. ECF No. 1. For the reasons

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explained below, the Court ORDERS Discord to appear before this Court on April 29, 2021 at

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10:00 a.m. to show cause why it should not be held in civil contempt for failure to obey the

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subpoena.

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II.

BACKGROUND

The litigation giving rise to this motion is a patent litigation matter pending in the United

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States District Court for the Eastern District of Texas, Gree, Inc. v. Supercell Oy, No. 2:20-cv-

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00113-JRG-RSP, filed on April 21, 2020. In that case, GREE accuses the Clash Royale game of

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Supercell Oy of infringing U.S. Patent Nos. 10,549,187, 10,610,771, and 10,625,149. Fact

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discovery in the underlying litigation is set to close on April 2, 2021. Mot. at 1. According to

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GREE, it identified comments posted on Discord’s social media platform relevant to issues in the

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underlying litigation as they relate to users experience with and consideration of specifically

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accused features. Id.; Boothe Decl., Ex. B (representative sampling of such comments).

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On March 5, 2021, pursuant to Rule 45, and after multiple attempts at service on Discord’s

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registered agent in California, GREE served a subpoena duces tecum and subpoena ad

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testificandum on Discord on its other registered agent in Delaware. Boothe Decl., Ex. A

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(subpoenas); Ex. C (affidavits of service). The subpoenas request that Discord produce documents

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and testimony relating to specifically identified posts on Discord’s website. The subpoenas

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request that documents be produced on March 17, 2021, and that Discord provide a witness to

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authenticate its documents by March 18, 2021. Discord failed to respond to the subpoenas by the

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required dates. Id., Decl. ¶ 4.

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On March 23, 2021, counsel for GREE, Norris P. Boothe, sent an email to
[e-mail] attempting to reach Discord and informing Discord that it had not timely

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United States District Court
Northern District of California

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responded to the subpoenas. Id., Ex. D. When Discord failed to respond to that email, Mr. Boothe

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followed up with a second email to Discord on March 25, 2021, informing Discord that GREE

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would seek Court intervention if Discord did not respond. Id., Ex. E. Further, on March 26,

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counsel for GREE, Taylor Ludlam, discovered an additional email address for Discord to which

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all service of process and law enforcement claims were to be sent (see Working with law

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enforcement, Discord.com, https://discord.com/safety/360044157931-Working-with-law-

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enforcement (last visited April 1, 2021)). Ludlam Decl. ¶ 1. Ms. Ludlam followed up on the two

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prior emails with another email to the address: [e-mail] attempting, yet

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again to obtain a response from Discord. Id., Ex. A. Further, Ms. Ludlam left a voicemail in the

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general voicemail box for Discord asking for any response from Discord. Id. ¶ 2. Despite further

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diligence, no further contact information is available for Discord.

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GREE filed the present motion on March 31, 2021.

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III.

LEGAL STANDARD

Federal Rule of Civil Procedure 45 permits the use of a subpoena to command a nonparty

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recipient to produce specified books, documents, electronically stored information, or other

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tangible things in the recipient’s possession, custody and control. Fed. R. Civ. P. 45(a)(1)(A)(iii).

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After the proponent has served the subpoena, the recipient may elect to comply with the subpoena,

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or may move to quash based on undue cost or burden, object to the subpoena’s form, or challenge
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the subpoena, according to procedures set forth in Rule 45. If the recipient fails or refuses to

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respond to the subpoena, the proponent may first try to negotiate compliance, as by offering to

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meet and confer, but ultimately, if the recipient fails to comply without adequate excuse, the

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recipient is in contempt of court, and the proponent must file an application for an order to show

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cause why a contempt citation should not issue. See Alcalde v. NAC Real Est. Invs. &

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Assignments, Inc., 580 F. Supp. 2d 969, 971 (C.D. Cal. 2008). “[W]hen a non-party does not

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comply with a subpoena and does not appear for deposition, the most appropriate procedural step

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is to file an application for an order to show cause, not a motion to compel.” Martinez v. City of

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Pittsburg, 2012 WL 699462, at *4 (N.D. Cal. Mar. 1, 2012).

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United States District Court
Northern District of California

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IV.

DISCUSSION

Here, the subpoenas sought compliance in this District, where Discord’s principal place of

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business is located, yet Discord has failed to respond. Boothe Decl., Ex. A. The subpoenas

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contained all required information (such as the time and place of the deposition) and service of the

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subpoenas was properly made on Discord’s agent for service of process. Boothe Decl., Ex. C. As

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such, the Court turns to the consequences of Discord’s non-compliance.

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“Subpoenas issued by attorneys are issued on behalf of the court and thus are treated as

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orders of the court.” Martinez, 2012 WL 699462, at *2 (citing U.S. S.E.C. v. Hyatt, 621 F.3d 687,

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693 (7th Cir. 2010); Higginbotham v. KCS Int'l, Inc., 202 F.R.D. 444, 455 (D. Md. 2001). A

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contempt charge against a nonparty may be criminal or civil in nature. See Falstaff Brewing Corp.

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v. Miller Brewing Co., 702 F.2d 770, 778 (9th Cir. 1983). Criminal contempt is punitive, and it is

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designed to punish the affront to the court. See Gompers v. Buck's Stove & Range Co., 221 U.S.

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418, 441 (1911); see also In re Sequoia Auto Brokers LTD., Inc., 827 F.2d 1281, 1283 n. 1 (9th

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Cir.1987). Thus, it may include fines payable to the court and it also may include jail time. 18

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U.S.C. § 401.

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GREE asks for the Court to hold Discord in civil contempt. Mot. at 4. “Civil contempt is

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characterized by the Court’s desire to compel obedience with a court order, or to compensate the

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contemnor’s adversary for the injuries which result from the non-compliance.” Martinez, 2012

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WL 699462, at *3 (citing Falstaff Brewing Corp., 702 F.2d at 778). A district court has wide
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latitude in determining whether there has been a contemptuous defiance of one of its orders. Stone

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v. City & Cty. of San Francisco, 968 F.2d 850, 856 (9th Cir. 1992), as amended on denial of reh’g

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(Aug. 25, 1992). “A civil contempt order must be accompanied by a ‘purge’ condition, meaning,

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it must give the contemnor an opportunity to comply with the order before payment of the fine or

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other sanction becomes due.” Martinez, 2012 WL 699462, at *3 (citing De Parcq v. U.S. Dist. Ct.

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for S. Dist. of Iowa, 235 F.2d 692, 699 (8th Cir. 1956) (“[C]ivil contempt is conditional in nature

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and can be terminated if the contemnor purges himself of the contempt.”)). In imposing civil

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contempt sanctions, the court must impose the least possible sanction to coerce the contemnor to

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comply with the order. Whittaker Corp. v. Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992)

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(“Generally, the minimum sanction necessary to obtain compliance is to be imposed.”) (citing

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United States District Court
Northern District of California

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Spallone v. United States, 493 U.S. 265, 280 (1990)). Where the purpose of the contempt order is

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to ensure a party’s compliance, the court must “consider the character and magnitude of the harm

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threatened by continued contumacy, and the probable effectiveness of any suggested sanction in

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bringing about the result desired.” Bademyan v. Receivable Mgmt Servs. Corp., 2009 WL 605789,

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at *3 (C.D.Cal. Mar. 9, 2009) (citing Whittaker, 953 F.2d at 516).

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To establish civil contempt, GREE must show by clear and convincing evidence that

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Discord violated a specific order of the court. See F.T.C. v. Affordable Media, 179 F.3d 1228,

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1239 (9th Cir. 1999). If GREE meets that burden, Discord must then show that it took every

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reasonable step to comply with the subpoena and to articulate reasons why compliance was not

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possible. See Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th Cir. 1983). A court may consider a

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history of noncompliance and a failure to comply despite the pendency of a contempt motion. See

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Stone, 968 F.2d at 856-57. If an alleged contemnor’s actions were taken in good faith or based on

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a reasonable interpretation, it should not be held in contempt. Id.

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As discussed above, GREE has shown that Discord violated a specific and definite order of

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the Court by failing to comply with the subpoenas. The Court thus grants GREE’s motion for an

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order to show cause. See Martinez, 2012 WL 699462, at *3 (employing this procedure); Prescott

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v. Cty. of Stanislaus, 2012 WL 10617, at *4 (E.D. Cal. Jan. 3, 2012) (same); Rodriguez v. Cty. of

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Stanislaus, 2010 WL 3733843, at *6 (Sep. 16, 2010) (proper procedure is issuing the order to
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show cause).
V.

CONCLUSION AND ORDER TO SHOW CAUSE

Based on the analysis above, the Court GRANTS GREE’s motion and ORDERS Discord,

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Inc. to show cause why it should be held in contempt for its failure to comply with the subpoena.

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Discord shall file a declaration by April 15, 2021, and the Court shall conduct a hearing on April

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29, 2021 at 10:00 a.m. by Zoom video conference. The webinar link and instructions are located

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at https://cand.uscourts.gov/judges/hixson-thomas-s-tsh/. Should Discord arrange with GREE to

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provide the requested documents and a witness to authenticate them prior to April 15, 2021, the

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parties shall notify the Court immediately, and the April 15 show cause hearing will be vacated.

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United States District Court
Northern District of California

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GREE shall serve this order upon Discord and e-file proof of service by April 5, 2021.
IT IS SO ORDERED.

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Dated: April 1, 2021

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THOMAS S. HIXSON
United States Magistrate Judge

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