Xiaoning et al v. Yahoo! Inc, et al

Filing 104

Memorandum in Opposition re 90 MOTION to Initiate Initial and Jurisdictional Discovery filed byYahoo! Inc.. (Petrocelli, Daniel) (Filed on 10/11/2007)

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Xiaoning et al v. Yahoo! Inc, et al Doc. 104 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 1 of 20 1 2 3 4 5 ^ ^ 8 DANIEL M. PETROCELLI ( S.B. #97802) ^etrnce[l�r^nm^n.cnm MAT`T`HEW T. KLINE ( S.B. #21140) rr^l{l�ne^�amm.com O'MELVENY & MYERS LLP 1999 Avenue Df The Stars Las Angeles, Ca1^f� rnia 9006-6035 Mais Number: {310) 553-6700 Facs�r^�le : (310) 246-779 Attorneys for Defendant YAHOO!, INC. and Specially Appearing Defendant YAHOO? HONG KOI^^G. LTD. UNITED STATES DISTRICT COURT NORTHERiV' DISTRICT OF CALIFORNIA OAKLAND DIVISION WANG XIAOI^^1NG, YU LING, SHI TAO, and ADDITIONAL PRESENTLY UNNAMED AND TD BE IDENTIFIED INDIVIDUALS, Plai ^ t�ff, v. YAHOO!, INC., a Delaware Cnrpnrat^nn, YAHOO! HONG KONG, LTD., a Foreign Subsidiary of Yahoo?, AND OTHER PRESENTLY UNI^^AMED AND TO BE IDENTIFIED INDIVIDUAL EMPLOYEES ^F SAID CORPORATIONS, Defe ^dant. Case Na. C07-I12151 CW DEFENDANT YAHOO?, ING'S OPPOSITION TO PLAINTIFFS' MOTION TO INITIATE INITIAL AND JURISDICTIONAL DISCOVERY' Hearing Date: November 1, 2007 Time: 2.00 p.^n. Judge: Hon. Claudia W�llcen 9 10 11 12 13 ^^ 14 E[ 15 1^ 17 18 19 20 21 22 23 24 25 26 27 28 ^ Without wa�v�rzg its object�ax^ ta the exercise of personal jur�sdict�orz �r� this case, specially appearing defendant Yahool I-Iong Kong , Ltd. ("YRKE") joins this opposition. Dockets.Justia.com Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 2 of 20 I 2 I. II. 4 5 ^ 7 8 B. 9 A. TABLE OF CONTENTS Introduct�on .............................................................................................................................. 1 The W�de-Ranging Discovery Plaintiffs Seek Is At Odds With The Purposes Of Federal Rule 12 ...........................................................................^....................................... 3 III. Plaintiffs' Specific Arguments To Support W�de-Rang�r^g Discovery Disregard The Actual Basis Of Defendants' Motions .............................................................................. S Defendants' Justicial^il�ty Arguments Raise No Factual Issues ......................... .................. Defendants' Foreign Sovereign Compulsion Argu^rz^ent Does l^^ot Reau�re Discovery Or Convert Their Motion To A Motion For Summary .lodgment .................. S 10 C. 11 Indisp^nsahle Party ........................................................................................................ 1 Q 12 13 l4 D. E. There Is No I^as�s For Discovery Regacd�^^g Defendants' Anti-SLAPP Motion ............... I 1 Plaintiffs Cannot Now Search For Jur�sdictio^al Facts Regarding YHKL That They Were Obliged "fo Plead In Their Complaint......^ ..................................................................... 13 N. If The Court Decides To Permit Limited Discovery, Defendants' Rule l2 Mol�ans Should Be Heard On The Unaffected C"^^o^ ds .................................................................................. I4 V. Conclus�on ..............................................................................................................................IS No Discovery Is Necessary To Deter^n�ne Whether The PRC Is An 15 16 I7 I8 I9 20 21 22 23 24 26 27 28 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 3 of 20 TABLE OF AUTHO^TES 2 3 4 5 Abrego v. Dew Chem. Co., 443 Fad 676, 681 {9th Cir. 2006} ......................................................................................9-10 Advanced Cardiovascular Sys., inc. v. Scimed Life Sys., Inc.; Page CASES 6 988 F.2d 1157 (Fed. C ^ r. 1993} ............................................................................................... � 8 APL Co. PTE, Lt^^ v. UK Ae^�^sols Ltcl , 452 F. Sopp. 2d 939 {N.D. Cal. 2006) ..............................................................................3, 14 Bell Atlantic Carp. v. Tvvom^ly, 127 S. Ct. 1 955 {2007} ..........................................................................................................1 4 Berioz v. Wahl, 84 Cal. App. 4th 485 {2000) ..................................................................................................12 Branch v. Tunnell, 1 4 F.�d 449 {9th Cir. 1994} ...................................................................................................10 Chavez v. �Ylendoza, 94 Cal. App. 4th 1 083 (Cal. App. 2001 ) ............................^..................................................12 C^^omos v. Chase 1Ylanhatt^n Carp., 1998 U.S. Dist. LERIS 3135, (S.D.N.Y. 1998) ....................................................................14 C^rr�e v. Caterpillar, Inc., --- F.3d ---, 2007 WL 2b94701, (9th Cir. Sept. 17, 2007) ..................................................... & F'echt v. Price C�., 70 F.3d 1078 (9th Cir. 1995) .................................................................................................10 Fl^tley v. 1Yla^^ro, 39 Cal. 4th 299 {2006) ..........................................................................................................1 2 Frt^-C^^^ C^n^7r. Corp. v. Sacraments Main. Util. Dist., Case N�. CIV. 5-05-583, 2007 WL 2384841, {E.D. Cal. Aug. 17, 2007) ............................14 9 10 11 12 1� I4 15 16 17 18 19 20 21 22 2� 24 25 26 27 28 -ii- Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 4 of 20 1 2 3 4 S 5 7 TABLE OF AUTHORITIES (eo^ti^ued) Na^e Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002) ...............................................................................................10 Golan v. Ohio Sa^^. Bank, 1999 ^.5, Dist. LEX1S 16452 (N.D. Ill. Opt. 14, 1999) .......................................................14 ^avac^ afAmer�ca, LiC^r. v. Shell O�1 C'o., 8 9 10 1l 12 � 14 15 15 17 526 F.2d 549 (7th Cir. 1980)--^ ..........................^...............................................................,.....2 Interstate Naturel Gas Co. v. Southern Cal�f. Gas Co.^ 209 F.2d 380 (9th Cir. 1954) ..................................................................................................9 Jones v, C^pit^l Cities/ABC Inc, , 168 F.R.D. 477 (S.D.N. ^ . 1 995) ............................................................................................ ^ K^dic v. Karad^ic, 70 F.^d 232 (2d Cir. 1995) ......................................................................................................7 Kearns v. Tempe Tech. Inst., 110 F.3d 44 {9th C�r. 1997) ...................................................................................................10 Lopez v. Smith, 203 F.^d 1 122 {9tih Cir. 2flflfl) ..................................................................^.............................. 3 Lundquist v. IZe^^sser, 7 Cal. 4th 1 1 93 (Cal. 1994) ...................................................................................................13 Martinez v. Wells Faro Bink, N.A., 2fl07 ^.5. Dist. LEX1S S^ 171 (N.D. Ca1..Tu1y 10, 2007) ....................................................... 3 Nat'l Coalition G v't v. Unocal, hoc., 17^ F.R.D. 329 {C.D. Cal. 1997 ) ............................................................................................ 8 Nietzke v. Williams, 490 U.S. 319 {1989) I'arrino v. FHI', 145 Fad 599 (9th Cir. 1998) ...................................................................................................9 -ii�- 18 19 20 21 22 23 24 25 25 27 28 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 5 of 20 1 2 � TABLE OF AUTHORITIES (eontin^ed) Page Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729 {9th Cyr. 1987) ...................................................................................................3 Safe ^ it for Everyone v. Meyer, 4 5 ^ �7� F.3d 1035 (9th Cyr. 2004} .................................................................................................7 Sarei v. Rio Tinto PLC, 221 . Supt. 2d 1116 {C.D. Cal. 2002) ...................................................................................7 Soe�ete Internationale Pour Participations Industrielles et Co^nmerci^les, ^�'.A. v. Rogers, 357 U.S. 197 (1958 ) ................................................................................................................8 Sosa v. Alv^re^-Macha�n, 7 8 9 1a 11 12 542 U.S. 692 (2004) ................................................................................................................ l S^ved^erg v. Marotzke, 339 F.3d 1.139 (9th C�r. 2003) ...................^.....^.....................................................................10 united States v. Swiss American Bank, 13 14 1S 16 17 274 F.3d X10 {lit Cyr. 2001) STATUTES 18 19 20 71 Cal. C^v. Code � 48 RULES Fed. R. C�v. Progi. ^ 2 ........................................................................................................... pa.^si^n CC I :7721 >^.7 22 23 24 25 26 27 28 -iv- Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 6 of 20 1 2 3 4 5 6 T. TNTRDDUCTIDN Rule 12 of the Federal Rules of Civil Procedure assures defendants an early hearing on motions challenging the legal sufficiency of claizx^s against them. While plaintiffs' motion nominally seeps the right to take limited discovery, by the looks of their cnmprehcnsive "Discovery Plan,'' the motion's real purpose �s to delay for at least a year the hearing on defendants' pending motions to dismiss. There is no just�ficat�^n for that dewy ^r for subjecting defendants t^ discovery aimed got at supporting justiciable and will-pleaded claims, but at attempting to find a viable claim or to advance an extra-judicial agenda. Were plaintiffs to spend the next year pursuing their discovery plan, the hearing an defendants' rrotions to dis^x^iss would still turn on the sarrze Ie^^^l propositions, each suff^c�ent to support dis^n�ssal of some or all of plaintiffs' claims: � the act-af-state doctrine an^ other justiciability doctrines 1^ar complaints c ^ alleng ^ ng the right of foreign sovereigns to enforce their laws; * the Alien Tort Statute ("ATS"), as interpreted ^y Soso v. tllv^rez-M^^ch^in, 542 U.S. 692 (2004), does moot cover forced labor and arbitrary detention claims; 7 8 9 10 11 12 � 14 15 16 17 l8 l9 20 21 � the Torture Victims protection Act ("TVpA") preempts torture claims brought under the ATS, and corporations may not be held liable under the TVPA; � the Electronic Communicat�ans privacy Act {"ECPA") does not apply exiraterrii^rially ar ^n the facts alleged in this ease; � � plaintiffs' California law claims are barred by statutory privilege; and the People's Republic of China ("PRC") is an indispensable party. Plaintiffs' motion to delay consideration of these and other legal issues until they take extensive 23 24 25 25 disco^^jery must be denied because they did not, anal cannot, explain low anything they could possibly learn, or how any document they could possibly obtain, would make a difference to the legal sufficiency of the pleaded claims. The simple truth is that plaintiffs' claims are defined---- and constrained-by the facts they allege about their awn circumstances ^n China and the legal bases up�n which they claim ^nt�tlement to relief, not by anything about defendants. 27 28 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 7 of 20 1 2 3 4 5 Plaintiffs fall woefully short of justifying a long delay to take discovery. For example, they say discovery is required to obtain a "realistic understanding" of Ch�nese leg�l standards and to assess the views of the U.S. and Ch�nese governments regarding this case. Disc. Mot. at 9. Statutes, regulations, case law, and expert opinion testirr^ony will conclusively establish what Chinese law is; the views of the U.S. and Chinese governments will shortly be before the Court when they respond to the Court's August 23 letter to the State Department. Plaintiffs also argue they need discovery concerning Hong Kong court documents relied on in defendants' motions. But under established Ninth C�rcu�t precedent, plaintiffs introduced those documents into the Rule 12 arena ^y referencing them in their complaint. Defendants' reference to them does not transform the motion to dismiss into a su^xmary judgment motion. Under those c�rcumstar^ces, defendants' citation to the couri documents �s entirely proper and does not trigger discovery. Plaintiffs' argument that YI-IKL's Rule 12(b)(2) ^not�on to dismiss for lack of personal jurisdiction opens both defendants to immediate discovery fails for a different reason: plaintiffs did not satisfy their obl�gation to plead sufficient jur�sd�ctionaE f�Cts. Plaintiffs cited various authorities for the proposition that discovery ^s generally available �n responding to a Rule I2{b)(2) motion. however, these authorities apply whett plaintiff has alleged facts ostensibly establishing personal jurisdiction and defendant contests those facts. Here, plaintiffs have alleged no facts establishing YIiKL's minimum contacts with California; instead, They have merely asserted the legal conclusion. that YHKL is an "alter ego'' or "agent" of the California-based Yahoo, Inc. Plaintiffs' eonclusory labels cannot sustain a claim against a motion to dismiss and thus do not entitle plaintiffs to discovery. In short, to allow plaintiff to sue �^rst and ask questions later would subvert the important gatekeeper functions of Rule 12 and deny the defendants their right to a I ^ rnmpt hearing on their legal motion to be relieved of the substantial and multi-faceted burden of this improvidently filed litigation. As one court put �t, `'if the allegations of the complaint fall to establish the requisite elements of the cause of action, our requiring costly and time consuming discovery and trial work would represent an abdication of our judicial responsib�l^ty." H^voco ofAmer�ca, Ltd. v. Shell O�1 C'o., 62^ P.2d 549, 553 (7th Cyr. 1980). 2 6 7 8 9 10 11 12 13 14 l5 l6 17 18 19 20 2l 22 23 24 25 26 27 28 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 8 of 20 1 2 3 4 5 b 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 ^. THE WIDE-�NGING DISCOVERY PLAINTIFFS SEEK IS AT ODDS WITH THE PURPOSES OF FEDE�L RULE l2. Rule 12 exists ^� spare the courts and defendants the burden of litigating eases that have ^^o basis in law. Advanced Cardiovascular Sys., Inc. v. Sc�med Life Sys., Inc., 988 F.2d 1157, 1160 (Fed. C�r. 1993) ('`The purpose of the rule �s to allow the court to eliminate actions that are l�tally flawed in their legal premises and destined to fall, and thus to spare litigants the burdens of unnecessary pretrial and trial activity.") No plaintiff can file a legally defective complaint and avoid dismissal by demanding discovery, because the central purpose of Rule 12(b)(�) is "to enable defendants to challenge the legal sufficiency of complaints without subjecting therr^selves to discovery." Rutm^n Wine Cv, v. E. c^ J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 19$7}. As the Supreme Court has recognized, Rule 12(b) "strea^x^lines l�t�gation by dispensing with needless discover}T and factfinding." Niet^ke v. Williams, 490 U.S. 319, 326-27 (1989), superseded by scat. vr^ other grounds as .stated in Lopez v. Smith, 203 F.3d 1122, 1126 (9th C�r. 2000). Contrary to plaintiffs' view, the "purpose of discovery is to find out additional facts about awell-pleaded claim, not ta.find v^^t ^>hether such a cl^in^ exists." Jones v, Capital Cities/AI3C Inc., 168 F.R.D. 477, 480 (S.D.N.Y. l99�) (emphasis added). At "issue on a] 12(b)(�) motion is whether plaintiff states a claim and �s therefore entitled to proceed with discovery." Id. (citation omitted). Courts in this jurisdiction and others routinely deny exactly the sort of discovery plaintiffs seek. See, e.g., M^x^�tinez v. Wells Fargo Bank, 1V A., 2007 ^J,S. Dist. LLXiS 53171, at *3, 7 {N.D. Cal. July 10, 2007) (staying discovery pending defendant's motion to dismiss and rejecting argurr^ent that plaintiff needed discovery "�n order to oppose defendants' Rule 12j ^not�on"). A plaintiff cannot "allege deficient claims and then seek discovery to cure the defie�enc^es." APL Co. PTE, Ltd. v. UKAerosvls Ltd., 452 F. Supp. 2d 939, 945 (N.D. Cal. 2O0�). Plaintiffs' motion works hard to eonv^y the in^pressivn that defendants' Rule 1 2 motions rely heavily on disputed issues of fact. This is wrong. Defendants' motions accept as true the 26 facts asserted in plaintiffs' complaint (when facts, rather than conclusions, are asserted), and rest on indisputable matters of law. None of the legal issues defendants raise can be affected by the results of discovery: 3 27 28 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 9 of 20 1 + tl^e act-of--state doctr�nc, the pal^t�eal cluest�on doctrine, and principles of �nternat^onal comity preclude campla�nts aimed at foreign nations' enforcement of their own laws; see Yahoo?'s Mot. to D�sm�ss at 4-15 (corrected version filed Aug. 30, 2007); 2 3 4 5 � plaintiffs' ATS claims f�r forced Mbar and ar ^^ tr^ry detention are not based on "definable, universal and ol^l�gatory" international norms "accepted by the civilized world and defined with ... specificity," id. ^^ 17-19; 6 7 8 9 10 � � plaintiffs' farture claims under the ATS are preempted by the TVFA, see gid. at l ^17; the TVFA does not provide a remedy for arbitrary arrest or (arced labor, see �d. at 23; 12 13 14 15 16 17 l8 � � the TVFA applies only to �^^dividuals, not carparat�ans, see id.; plaintiffs' ATS and TVFA claims cannot be brought against private actors, see id. at 20, 24; ^ there �s na civil aiding axed abetting liability under the ATS or the TVFA, see id. at 19-24; � plaintiffs have not alleged facts sufficient to plead civil aiding and a^ett�ng liability under federal or state law, see id. at 20-23, 28-29; 19 20 21 22 23 24 25 � plaintiffs failed to allege facts sufficient to establish that they were tortured, rather than subjected to non_actionable strong-arm police tactics, see id. at 24; � plaintiffs car^nat sustain an ECPA claim for disclosure of records ar �nfarmat�on to the PRC because �t �s nota "governmental entity" far purposes of ECPA, id. at 26; + plaintiffs cannot sustain an ECPA cla�rrz under l8 U.S.C. � 2701{a) against an email service provider, see id. at 27; � � the ATS and ECPA do not apply e^traterr�tarially, see �d. at 1 ^, 24-26; plaintiffs' California claims are preempted by the foreign affairs doctrine, see id. at 27-28; 2b 27 2$ � plaintiffs have not alleged facts suff^c�ent to state a claim for false imprisonment -4- Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 10 of 20 1 2 3 � because defendants did not detain them, see �d. at 29; plaintiffs cannot state a claim for negligence because defendants awed them no duty of care, see �d, at 2�-31; and pla^nt�ffs lack standing to bring a claim under California's unfair ^ompetrt�on laws, 5 see id, at 31-32. The discovery pla�nt�ffs wish to pursue w�11 yield no information relevant to any of these legal points, as they all arise and must be resolved w^�h^n the closed universe of the allegations of pla�nt�ffs' complaint, federal and state statutory and common law, and the case law interpreting those statutes and laws. Knowing what Yahoo! executives said before Congress w�11 not alter the fact that the TVPA applies only to individuals, not corporations. Knowing why Yahoo! chose to da business in China will not reverse the Supreme Court's decision �n Sosa, much less revitalize plaintiffs' ATS claims. Pursuing discovery------somehow-concerning the PRC's �mpletnentation of its laws, �n general and �n the particular cases of two of the plaintiffs, will not expand the territorial reach of ECPA or alter the standing requirements under California's unfair competition laws. Deposing numerous present and former Yahool employees regarding, according to plaintiffs' proposed "Discovery Plan,'' virtually all communications between Yah^a! and the PRC w�11 not change the California co^-r^^nan law of false iznprisonment.2 llI. PLAINTIFFS ' SPECIFIC ARGUMENTS TO SUPPORT WIDE-RANGING DISCOVF, RY DISREGARD THE ACTUAL BASIS OF DEFENDANTS' MOTIONS. Plaintiffs say the requested discovery is "limited" to factual issues raised in defendants' nations, Disc. Mot. at 1, but even a cursory review of their "Discovery Plan" shows �t has nothing to do with defendants' motions and, instead, represents an effort to undertake full-blown merits discovery. Plaintiffs' Discovery Plan seeks information on such expansive subjects as Yahoo!'s entire business plan and structure in China, Yahoo4's enure mode of operation in China, b 7 8 9 10 1I I2 13 14 15 1b 17 18 19 20 2I 22 2� 24 25 26 27 2$ ^ Instead, as the Hong Kong Privacy Commission concluded when plaintiff Shi previously made this request, �t w�11 only expose defendants to legal sanction far disclosing what the PRC considers to be state secrets. See Yahooi's Mot. to Dismiss Ex. A ^�� 7.17-18. .. 5 .. Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 11 of 20 1 2 3 4 5 ^ 7 8 9 10 1I 12 and Yanaol's dealings with the Chinese government. The Discovery Play's wide range of topics------which plaintiffs intend to pursue by depositions of what would likely be dozens of former anal present Yahoos employees in the U.S. and �n China, by �nt^rrogatories, and by extensive document requests----are aryth�ng but "l ^ m ^ ted." If all�wed to pursue this discovery before having to respond to defendants' motions to dismiss, plaintiffs will have effectively ^lim^nated defendants' right to test pla^nt�ffs' complaint at the threshold, as perrr^^tted by law. While plaintiffs insist that them are "numerous" .factual disputes justifying their proposed broad discovery, their motion addresses only a handful of d^f^ndants' several independent grounds for dismissal; and even as to those grounds, the supposed factual disputes actually have ^oth�^g to do with the issues posed ley defendants' r^otio^s, as showy below. A. Defendants' Justiciability Arguments Raise N^ Factual Issues. Plaintiffs contend discovery is necessary to respond to defendants' assertion that their claims are not just�c�abl^ under the act of state doctrine, principles of international ca^nity, and 14 I5 I6 7 I8 I9 the political question doctrine. Defendants moved to dismiss plaintiffs' complaint on justiciability grounds because, at their core, ilaintiffs' claims challenge the ability of the Chinese government to enact and enforce laws proscr�bi^g certaizl fo r^ms of political speech. See Yahooi's Mot. to Dismiss at 4-I5. Plaintiffs' intent to challenge the power of the Ch�^ese government is manifest �r^^ their complaint. It says the PRC �s unlawfully imprisoning plaintiffs for ex^rcisi^g free-speech rights, see ic�. at 5-7, and demands an order requiring defendants to help secure plaintiffs' release from prison and never aga�.n assist the Chinese gavernn^ern in its e^farcement 21 22 of its political speech laws. see ��z' at 4. Plaintiffs do got dispute in their mfltion that their complaint challenges these aspects of Chinese law. Instead, they speculate that Chinese law, as applied, did not require defendants to 24 25 comply with Chinese evidence-gathering laws, and they need discovery to see �f that might be the case. See D�sc. Mot. at S- I ^. Even apart from the anecdotal nature of the information plaintiffs would attempt to gather, discovery of this sort will not allow them to sidestep the legal doctrines 27 28 on which defendants' motions rest. Plaintiffs' argument attempts to suppori an assertion that is not even �z plaintiffs' coplai^^t-^---that defendants were free to ignore Chinese law as written. -^- Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 12 of 20 1 There is good reason plaintiffs did not make this claim. Court r lings cited in their co^r^plair^t establish that PRC law co^x^pelled Yahoo! China to provide the information it did to the PRC. See Compl. ^ ^4; Yahool's Mot. to Dismiss Ex. A ^^ 7.12, 7.8, $.25. Moreover, proof of Chinese law does vat require fact discovery. Finally, even if defendants were exempt from Chinese l aw-and they are not�efevdavts' justiciability arguments would still require dismissal. To find defendants liable, this Court would have to conclude that the PRC bad no right to investigate or arrest plaintiffs far violating its speech laws. Absent that finding------which would be a direct affront to Chinese sovereignty---^-plaintiffs' case lacks its essential first buildivg black toward liability and remedy. Plaintiffs' second argument why defendants' justiciability arguments justify discovery is also far off the mark. Plaintiffs say that by citing positions the Uvited Stags has taken iv other ATS cases-and specifically other cases involving China defendants have opened the door to discovery into the United States' views regarding this ease. Disc. Mot. at 13. To remedy this, plaznt ^ f#s seek access to "communications [^l^atj may have taken place o ^ these �^sue^ between Yahool officials and officials of the government of China" regarding this case. Id. (emphasis added). Nat only �s this request illogical-----plaintiffs have not explained how such discovery would shed light on the United States' views-it �s completely unnecessary, as this Court has already asked the United States to file a Statemern of Interest setting Earth its views. 2 3 4 5 6 7 $ 9 1Q 11 12 13 l4 15 16 l7 1$ 19 Plaintiffs are also ^^rong to suggest that defendants' reference to positions the Uvited States has taken in other ATS cases has opened the door to discovery on that subject. Defendants have made a facial challenge to the Court's jurisdiction by asserting that the allegations in plaintiffs' complaint, taken as true, constitute a direct rebuff to PRC law and sovereignty. See Safe Air,for Eve� yore v. Meyer, 373 F. ^ d 1035, 1 Q39 (9th C�r. 20Q4). Rcsolutiov of this issue does not ^jarrant discovery. Federal courts regularly consult the government's stated foreign policy interests before ruling on justiciability issues without opening the case to discovery or other factual investigation. See K^xd�^ ^. Karadzic, 7Q F.3d 232, 250 (2d Cir. 1995) (considering Statement of Interest submitted by State Department in ruling on facial challenge to subject matter jurisdiction); Sare^ v. Rig Tinto PLC, 221 F. Supp. 2d 1116, 1182-83 (C.D. Cal . 2002), _ 7 .. zo 21 22 23 24 25 26 27 28 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 13 of 20 1 2 rev'd on ether grounds, 487 F.^d 1193 (9th C�r. 2007) (holding that cansiderat�an of a Statement of Interest does vat convert a motiav to dismiss into a motian for summary judgment because the district court "may take [jud�c�alj notice of the gavernment's official policy avd opinion"); Nat'l 4 Coalition Gov't v. Unocal, Inc., 176 F.R.D. 329, 352 {C.D. Cal. 1997) {taking judicial notice that the United States conducted diplomatic relations with the government of Burma, based on 6 7 8 Statement of Interest submitted by the State Department and other evidence of the gavern^x^ent's views presented by defendant). Consistent with these cases, defendants' reference to prior Statements of Interest was not an attack on "the substance of the complaint's jurisdictional allegations," C^rr�e v. Caterpillar, Inc,, --- F.^d ---, 20Q7 WL 2694701, *3 (9th Cir. Sept. 1.7, 2007), but merely called the Court's attention to the government's previously stated ^�ews on fnreigv policy with respect to China. This provides vo bans for factual inquiry beyond the goverv^x ^ent's forthcoming Statement of Interest regarding this case. B. Defenda^^ts ' Forci n Soverei n Cam ulsian Ar u a ent Daes 1^'at Re wire Discove Or Convert Their Motion To A Motion Far Sun^^a Jud c^^t. 9 10 11 12 13 14 I5 I6 17 18 19 20 21 22 23 24 25 26 27 28 Pla�ntiffs say they need discovery to respond to defendants' assertion that the f^re�gn so^ere^gn compulsion doctrine bars plaintiffs' claims as a matter of law. Defendants' motion made three points. {I) that U.S. case law establishes that the foreign sovereign compulsion defense apples not only when actions are literally compelled, but also when there �s a legitimate fear of prosecution for failing to corr^ply with a foreign law, Yahaai's Mat. to Dismiss at 34-35;3 {2) that Chinese law requires that subjects of the state-e.g., Yahool China-assist in law evforce^nent investigat�ans, �^^ ai 34; and {3) that the Hong Kang legal opinion plaintiffs cite �n their awn complaint involving one plaintiff, Sh� Tao, held that the commuvicatinns with law enforcement officials at issue in this case were cozx^pelled by PRC law and were made under legitimate fear of prosecution. Id.; Ex. A � 8.25.4 ^ Ses S^^ciete Interna^�onale Pour Participations Ind^^str^elles et Com^ner^�ales, S.A. v. Rogers, 357 U.S. 197, 211 (1958) (excusing Swiss company's failure ta ca ^npIy with American discovery order that required it to violate Swiss law because "��]t �s hardly debatable that fear of criminal ^ros^cution caz^stitutes a weighty excuse for" acting) "[T)he disclosure of Information iv the circumstances of this case was not a voluntary act initiated by jYHI^L] but was compelled under the force af PRC law." Id. "Yahoo! China avd ..g_ Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 14 of 20 1 Plaintiffs say they cannot respond to any ^f these poivts without discovery regarding "details of the communications between the Defendants and the Chinese Government regarding the request for Ivtervet user inforrr^at�on," "copies of the actual requests ...that Yahoo! received from Chinese officials," defendants' responses to all such requests, and "all aceo^xzpanying commuv�cat�ons" regarding such requests. Disc. Mot. at 9-I0. This massive factual discovery, however, will not aid pla^nt�ffs response to defendants' legal argument. Pla^nt�ffs do not dispute that Chinese law, as ^^rittev, prohibited their conduct and compelled defendants t^ respond to the Ch�vese government's official �nvest�gation. instead, plaintiffs resort to the ip.se dix�t pronouncement that defendants' legal argument is actually a "factual defense" requiring plaintiffs to determine hew Chinese law is applied. Id. at 9-I0, 13-14. Plaintiffs do nit cite any authority far that proposition. In any event, the point is rr^o^t. Defendants' motion does not solely rely ^^ e^vclusions about how Chinese law is actually applied-a fear of prosecution, based ^n the law on the books, is mare than enough to rule for defendants ov their compulsion argument. As for defendants' claim that this court may not consider the Hong Kong Privacy Commissioner's opinion, the Ninth Circuit has long held that a "rr^^ti^n to dismiss pursuant to Rule 12(b) of the Federal Rules of C�v�l Procedure admits all well pleaded facts, but does not admit facts which the court will judicially notice as not being true nor facts y^^hich are reveled to be unf�u^ded ^y docurne^^ts ^ nclule^ ^^ the pleadings or introduced ^^ sup^^or^ ^f^^he modan." Interstate Natural Gas C�. v. Southern Calif. Gas Co,. 209 F.2d �80, 384 (9th Cir. 1954) (emphasis added). Plaintiffs cannot rely on some of the Comm�ssiover's conclusions, see Oompl. � 64, but require this Court to ignore others. See Fecht v. Price Co., 70 1�,3d 1078, 1080, n.l (9th Cir. 1995) (holding that a district court was entitled to consider the full contents of documents cited �n the complaint, not just those portions cited by plaintiffs, in ruling on a motion to dismiss}. Nor can plaintiffs argue that they need discovery t^ respond t^ defendants' use of a document that was included in their own complaint. See Parrino v. FHP, 14^ �`.3d X99, 70^ n.4 (9t11 C�r. 1498), superseded by statute an other grounds as stated in Abreg^ v. Do^v Chem. Ca., 44� F.3d 67^, X81 2 3 4 5 ^ 7 8 9 10 11 12 I� 14 15 16 I7 I8 19 20 21 22 23 24 25 27 28 YHKL^ did in the circumstances ^f this ease have genuine penal apprehension of possible violation of Article 45 or Article 277 if refused to comply with the [PRO's} order." Id. ^ 7.8. -9- Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 15 of 20 1 2 3 (9th C�r. 2006) (where a document is attached to or described �n a complaint and integral to a plaintiff's claims, plaintiff "obviously is on notice of tY^e contents of the document and the need far a chance to refute evidence �s greatly di�v�shed"). For the same reasons, defendants' references to Ch�vese law do not require conversion of its motion to dismiss into a motion far summary judgment. Although plaintiffs claim that defendants' motion iveluded many "extraneous and additional daeu^ments," Disc. Mat. at 8, their argument for conversion is expressly based an nothing but defendants' citation to "a long list of Chinese statutes and regulations." Dise. Mot. at l0. Legal authorities are hardly "extraneous" dacun^ents requiring factual discovery. Nar is the Hong Kong Privacy Commissioner's opinion, which is incorporated by reference �n the complaint. Furthermore, even assuming arguend^ that defendants' foreign sovereign compulsion argument relies on extrinsic rrzaterials, the Court can and should rule an this argument based solely on the U.S. and PRC law that defendants cited. Swedberg v, ^^l^rotzke, 339 F.^d 1139, 1146 (9th C�r. 2003}; Ke^m,s v. Tempe Tech. Inst., 110 F.^d 44, 46 (9th C�r. 1997}.' See 4 5 6 7 8 9 10 l1 12 l3 14 15 16 17 l8 C. N^ D�s^ave Is Nec^ssa T� Determine Whether The PRC Is An Ind�s^^ensable Pa t_y. Plaintiffs also see�^ to use the foci that defendants point out that the PRC �s an indispensable party to justify merits discovery an "all information regarding China's requests for user information." Disc. Mot. at 11 . But as with defendants' justiciability arguments, our contention under Rule 19 regarding the PRC rests solely on legal issues and in na way requires ' Yal^aol's motion to dismiss referred to only three documents other than judicially noticeable statements of U.S. policy and plaintiffs' second amended complaint. The three documents are the Hong Kong Commissioner's ruling, plaintiff Wang's criminal judgment, and plaintiff Sh�'s criminal judgment-all three of which were described in and relied on in the complaint, and thereby incorporated by reference. See Compl. ^[ 42-43 (Wang judgment), �� 62 (Shi judgment}, � 64 (Commissioner's Report); ^ aF^oo^'s Mai. to Dismiss at 3 n.2. Contrary t� plaintiffs' suggestion, Yahoo?'s citation to these three docurr^ents does not justify converting Yao�!'s Rule 12 motion to a motion for su^^mary judgment: "[Djocuents whose contents are alleged in a complaint and whose authenticity vo party questions, but which are vat physically attached to the .pleading may be considered in ruling an a Rule l 2(b}(^) motion to dismiss. Such consideration does vat convert the motion to dismiss into a motion far summary judgment." Branch v. Tu^nell, 14 F.3d 449, 453-54 {9th Cir. ].994), o^^err'd ^n part on other grounds 1n Galbr^�th v. County �f Sang Clara, 307 F.^d 111 9 (9th C�r. 2002}. -10^ 19 20 21 22 23 24 25 26 27 28 Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 16 of 20 1 2 the resolution of factual questiavs. None of the information pla�nt�ffs claim to need bears on defendants' legal contention that the complaint rr^akes a facial attack an the sovereignty of the PRC. Discovery is unnecessary beca^^se it �s indisputable that pla�nt�ffs' compla�nt is an uvarr^bigu^^us attack on PRC law: �t seeks pla�nt�ffs' release from PRC prisons and seeks an order barring defendants from complying with PRC evidence-gathering laws. Any such order will subject defendants to inconsistent obligations as a rr^atter of law. Similarly, an order that requires YahooI to "secure the release of the detainees" from Chinese prisons would s��11 �rr^pair the PRG's interests regardless a^ what facts plaintiffs might 3 4 5 6 7 � discover �n any "commun�catio^s and dacunr^ents perta�nivg to any attempts made by the Defendants to obtain the Plaintiffs' release from prison." D�sc. Mot. at 14.fi pla�nt�ffs argue that 11 12 the PRC would not be ^^ ivdispe^sable party if discovery establishes that defendants could on their awn require the PRC to release plaintiffs fror^r^ prison. Ta state plai^t�ffs' argument is to expose its failing. The PRC �s a sovereign ^at�on, and plaintiffs are imprisoned under its authority far a violation of its laws. The PRC, and Duly the PRC, has the authority to release pla�nt�ffs. D, There Is N� Basis For Diseove Re ardin Defendants ' Anti-SLAPP Notion. 1^ 14 15 16 17 18 19 20 21 22 Plaintiffs also claim to need discovery to respond to defendants' Special Motion to Strike under the anti-SLAPP statute, i^ which Yahoo! shored that plaintiffs' state-law claims are barred by California law priv�legin^; com^nun�cat�ons with law enforcement aff^c�als regarding suspected cr^mi^al activity. Although plaintiffs concede that "anti-SLAPP motions do not normally generate the geed for discovery," D�sc. Mot. at 14, and although pla�nt�ffs cite ^o anti-SLAP ease evt^tl�ng them to the discovery they seek, pla�nt�ffs agar try to convert purely legal questions-do the anti-SLAPP statute and litigation privilege apply-----^� ^ to factual dzsputes meriting full-blown discovery. D�sc. Mot. at 14-15.' ^ Plaintiffs' requests also include all "factual information ... [concerning] whether Yaho�! has taken any action to pratest the abuses co^nm�tted against the Plaintiffs," "whether [Yahoo?] has sought to secure [plaintiffs'] release fram detention," and whether Yahoo has sought to "otherwise assist [plaintiffs] and their farr^ilies." D�sc. Mot. at 1 l . ^ Plaintiffs say they ca^^^zot respond to the anti-SLAPP mot��^ without discovery, including "documentat��^ regarding the nature and content of Yahao!'s communications with Chinese -11- 23 24 25 26 27 2$ Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 17 of 20 1 The exceedingly broad discovery plaintiffs request w�11 ^1ot assist the Court �n evaluating whether, assuming the tr^^th ^f all allegati^^^s pled, plaintiffs' claims are barred by California statute, and nothing plaintiffs argue establishes otherw�se. Plaintiffs note that Flatfey v. M^ur^, 39 Cal. 4th 299 (2006), holds that the anti-SLAPP statute does not apply to communications such as extortion that are "illegal as a matter of law" and tE^en claim they need discovery to determine if defendants' comznunicat^ons were illegal. Disc. Mot. at 15. What plaintiffs fail to mention, however, is that the practical reach of F^atley �s exceptionally narrow and does not apply here. It held that the anti-SLAPP statute does not apply only in the "narrow circumstances]," where the "defe^^d^nt concedes or the ev�denee conclusively establishes" the illegality of the challenged conduct. F7atley, 39 Cal. 4th at 316 (emphasis added). Where the defendant's conduct �s not conclusively ^llel;al, anti-SLAPP apples and the threshold burden remains on plaintiffs to establish the probability of prevailing on the merits. Id.; Chavez v. Mend^z^, 94 Cal. App. 4th 1083, 1090 {Cal. App. 2001). Plaintiffs cannot possibly meet that burden in the face of federal, state, and international law that both shields defendants from l�ab^lity for engaging in the commun�eat�ve acts alleged, and, indeed, compels such speech. See Yahooi's Mot. to Dismiss at 32-36; Mat. to Strike at 6-9. Plaintiffs also claim they need "jurisdictional discovery" regarding the anti-SLAPP motion to assess whether defendants acted with malice. Such discovery is entirely inappropriate. The question of whether the communication t^ a foreign law enforcement official for which antiSLAPP protection is being sought was made with malice only arises, if at all, if the foreign nation where the commun�eat�on was made lacks adequate procedural safeguards to protect those accused of a crime. See Ber�^z v. Wahl, 84 Cal. App. 4th 485, 496 (2000). F`or purposes of its motion to dis^x^^ss, Yahoo? assumed, ^rguend^, that the qualified privilege that arguably arises in that situation applies. But even then, this issue is irrele^jant because plairtiffs-^iesp�te l aving 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2^ 27 28 officials," the bases on which comunicat�onsl were obtained, the number and type of individuals affected," "the nature ^f [affected individuals] internet corr^rxaun�cat^ons," "the justification provided by Yahoo! as to why the requests were berg made," "state^x^ents that may have been made to Yahoo! regarding the compulsory or non -compulsory nature of the request," and "discovery reflecting Yahoo's state of mind in making the communications." Icl. at 14-15. -12- Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 18 of 20 1 2 amended their complaint after learning defendants would file an anti-SLAPP matiav-do not allege that defevdar^ts responded to Chinese law enforcement aff^cials with malice. Plaintiffs do vot eve^^ make that accusation in their motion seekivb discovery, nor could they consistent with Rule 11. Instead, plaintiffs v^^rongly attempt to put a burden that �s clearly theirs onto defendants, arguing that: (a) defendants must prove they acted "to protest the interest of the ones to whom the cnmmuvisatian was made" in order to fall under anti-SLAPP qualified pr�v�lebe for extraterritorial statements; and (b) if it is defendants' burden, then plaintiffs should be entitled to take discovery to ascerta�v if defendants can meet that burden. But to overcome the privilege's protections---rand to meet their threshold burden of proof under the a^t�-SLAPP statute, it �s plaintiffs whn must prove that defendants acted with ill wi11, hatred, or reckless falsity. See Lundquist v. Reusser, 7 Cal. 4th 1193, 1208 (1994). Malice cannot be presumed; facts supporting malice must be specifically pled and proven. See CAL. C^v. Co^^ � 48. Plaintiffs Dave not pled malice. They are vat ent�tled to opev-ended discovery in hopes of finding proof that it exists, especially when they have alleged no bans for believing that it does. E, Plaintiffs Ca^aot New Search For Ju^risdic #i onal Facts Re ardin YHKL That The Were Ol^li ed T^ Plead In Their Com faint. Motions to dismiss for lack of persaval jurisdiction sometimes justify discovery by the plaintiff regarding a factual dispute as to whither the defendant has the requisite contacts with the forum jurisdiction. But to be ent�tled to jurisdictional discovery, ^ plaintiff must make a "colorable case for the existence of in personam jurisdiction." United States v. Stiviss American ^3^^k, 274 l^.M 610, X25-2^ {1st. Cir. 2001}. Plaintiffs here, however, have not alleged a single contact between YIdKL avd California, or any other fact to support suivg YHKL in this Court. Instead, their claim to personal jurisdiction over YHKL relies entirely on the empty allegation that YHKL was the "business entity, partner, alter ego and/ar abut of Yahnol, Ive." Compl. 3 4 5 ^ 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2^ 27 28 � 19. A bare allegation that YHKL was an alter ego of Yahoo !, Inc. w�11 not bet plaintiffs past the pleading stage . Plaintiffs are not entitled to use the federal discovery statutes to conduct a _13_ Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 19 of 20 1 2 3 4 5 6 7 speculative search for jurisdictional facts. They were "required to state a viable clai^r^ ai the outset, not allege deficient claims and then seek discovery to core the deficiencies." A}'L Co. PTE, �t� v. LIKAerosols Ltd., 452 P. Supp. 2d.9�9, 945 {N.D. Cal. 2�O6). See Bell Atlantic Carp. v. T^von^^ly, 127 S. Ct. 1955, 1964-65 (2�O7); ^r^^-Con Constr. Corp. v. Sacramento Mu^^. Util. Dist., Case No. CIV. S-�5-583, 2�O7 WL 2384841, at *9-l� (E.D. Cal. Aug. 17, 2��7). Plaintiffs' assertion that they are ign^rani of defendants' corporate struetu^e provides them no prot^ctian. Litigants must start with a jurisdictional bans for bring�r^g a defendant info court. 1"or example, zn Conmas v. Chase 1#^Inhttan Corp., 1998 U.S. Dist. LEX1S 3135, *7-8 (S.D.1^^.Y. Mar. 17, 1998), superseded by stat. on other grounds as stated ^n Golon ^. Ohi^^ Sav_ Bank, 1999 U.S. Dist. LEX1S 16452 (N.D. Ill. Dct. 14, 1999), the court denied a plaintiff s request f�r discovery and granted the defendant's motion to dismiss far failure to state a claim because the plaintiff failed to allege fads sufficient to establish either the defendant's contacts with the forum or an alter-ego theory: "Plaintiffs claims thai he cannot make any factual allegations because he does not know a ^ y of the facts. Litigants previously have used this argument without success." Id. at * 8. IV. IF THE COURT DECIDES TO PERMIT LIMITED DISCOVERY, DEF�NDANTS' RULE I2 MOTIONS SHOULD BE HEARll Ohl THE UNAFFECTED GROUNDS. Defendants' motions to disrx^iss rely on many discrete and readily severable legal content�ans. Most present independently sufficient grounds for dis ^ �ssal of the entire action; some address specific claims far relief Should the Court conclude that lirrzited discovery would be reasonable regarding snr^^e of defendants' arguments, we urge that before permitting the wholesale merits discovery in plaintiffs' Discovery Plan the Court schedule the completion of briefing and an early hear�nl; on the aspects of defendants' motions ihat it concludes da not warrant discovery. That approach may well result in the dismissal of the entire action on those other grounds. Even �f that does not occur, as long as any claims are dismissed the scope of discovery ^,^ill inevitably be narrowed to the benefit of the judzcial process and the parties. 8 9 1� 11 12 13 14 17 18 19 2O 21 22 23 24 25 26 27 28 -14- Case 4:07-cv-02151-CW Document 104 Filed 10/11/2007 Page 20 of 20 2 3 Defendants suggest a s^n^ilar approach should the Court decide to allow limited discovery regarding YHKL's Motion to Dismiss for Lack of Personal 3ur�sdiction. Since YHKL has joined Yahoo, Inc.'s Rule ^2 motion to dismiss and special n^otio^^ to strike, the logic of deciding those motions before allowing discovery on personal }urisd�ct�or^ that nay be mooted �s obvious. This would allow defendants the benefit of Rule 12 and the anti-SLAPP statute while preserving plaintiffs' ability to conduct discovery where, if at all, the Court finds it appropriate, While defendants Believe jurisdictional discovery �s completely unwarranted, its detr�rr^ental impact on the proceedings would be minimized �f the balance of defendants' arguments are considered before ar^y expensive and time-consu�^^g discovery �s conducted. V. CONCLUSION For the foregoing reasons, Plaintiffs' Motion to Initiate ln�tial and .lur�sd�ct�onal Discovery should be denied. Dated: October l ^, 2007 DANIEL M. PETROCELLI MATTHEW T. KLINE O'MELVENY & MYERS LLP 4 5 6 7 8 9 10 1l 12 13 14 1b 17 18 By: !sl Daniel M. Petrocell� Daniel M. Petrocelli Attorneys for Defendant YAHOO], INC. and Specially Appearing Defendant YAHOO! HONG KONG, LTD 19 20 21 22 23 24 25 2b 27 28 _l$_

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