SONG FI, INC. v. GOOGLE, INC. et al

Filing 127

ORDER by Judge Claudia Wilken granting in part and denying in part 114 Motion for Sanctions; granting 123 Motion for Leave to File Surreply. (dtmS, COURT STAFF) (Filed on 8/8/2016)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SONG FI, INC., JOSEPH N.
BROTHERTON, LISA M. PELLEGRINO,
N.G.B., RASTA ROCK, INC.,

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Plaintiffs,

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v.

United States District Court
For the Northern District of California

ORDER GRANTING IN
PART MOTION FOR
SANCTIONS
(Docket Nos. 114
and 123)

GOOGLE, INC., YOUTUBE LLC,

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No. C 14-5080 CW

Defendants.
________________________________/

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Defendants Google, Inc. and YouTube LLC move for sanctions

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against Plaintiffs' counsel under Federal Rule of Civil Procedure

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11 for allegations made in the Third Amended Complaint (3AC).

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Defendants wish to strike several enumerated paragraphs within

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Plaintiffs' 3AC.

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expenses incurred as a result of the Rule 11 violations.

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described below, the Court GRANTS in part Defendants' motion.1

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They also seek reimbursement for litigation
As

BACKGROUND
Descriptions of Plaintiffs' allegations can be found in the

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Court's Order Granting Motion to Dismiss Second Amended Complaint

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and Order on Motion to Dismiss Third Amended Complaint.

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disputed allegations were part of Plaintiffs' Cartwright Act and

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fraud claims, which the Court dismissed with prejudice as the

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parties were briefing this motion.

The

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The Court also GRANTS Plaintiffs' motion for leave to file
a surreply, which the Court considers (Docket No. 123).

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LEGAL STANDARD
Federal Rule of Civil Procedure 11 permits a court to impose
sanctions on an attorney when he or she has signed and submitted

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to the court a pleading that is not, to the attorney's knowledge,

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information and belief after reasonable inquiry, presented for a

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proper purpose, warranted by existing law or by a non-frivolous

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argument for altering the law, or supported or likely to be

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supported with evidence.

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under Rule 11 "raises two competing concerns: the desire to avoid

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United States District Court
For the Northern District of California

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abusive use of the judicial process and to avoid chilling zealous

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advocacy."

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1159-60 (9th Cir. 1987).

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extraordinary remedy, one to be exercised with extreme caution."

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Operating Eng'rs Pension Trust v. A-C Co., 859 F.2d 1336, 1345

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(9th Cir. 1988).

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why sanctions are justified.

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Shelly Irrigation Dev., Inc., 834 F.2d 833, 837 (9th Cir. 1987).

Fed. R. Civ. P. 11.

Awarding sanctions

Hudson v. Moore Business Forms, Inc., 836 F.2d 1156,
An award of sanctions is "an

The moving party bears the burden to demonstrate
See Tom Growney Equip., Inc. v.

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Where a complaint is the primary focus of a Rule 11 motion, a

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court must determine that 1) the complaint is legally or factually

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baseless from an objective perspective and 2) the attorney has not

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conducted a reasonable and competent inquiry before signing and

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filing it.

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In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431, 434 (9th Cir.

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1996).

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signing.

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1519, 1526 (9th Cir. 1990).

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claim in a complaint does not immunize it from Rule 11 sanctions.

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Holgate, 425 F.3d at 677.

Holgate v. Baldwin, 425 F.3d 671, 676 (9th Cir. 2005);

The standard is objective, examined at the time of
W. Coast Theater Corp. v. City of Portland, 897 F.2d
The existence of a non-frivolous

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A claim is well grounded in fact if an independent

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examination reveals some credible evidence in support of a party’s

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statements.

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710 (N.D. Cal. 1995).

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a weak one, is sufficient to avoid sanctions under Rule 11.

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United Nat'l Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1117-18

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(9th Cir. 2001).

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courts in discovering whether an attorney, after conducting an

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objectively reasonable inquiry into the facts and law, would have

Himaka v. Buddhist Churches of Am., 917 F. Supp. 698,
A claim that has some plausible basis, even

"The reasonable inquiry test is meant to assist

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United States District Court
For the Northern District of California

See

found the complaint to be well-founded."

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677.

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Holgate, 425 F.3d at

DISCUSSION

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Defendants argue that four sets of allegations were baseless:

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that YouTube conspired to allow view count manipulation, that

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Defendants and their senior executives conspired to remove music

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videos by independent artists, that Defendants and their senior

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executives fail to combat view count gaming and how YouTube

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calculates view counts.

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I.

Alleged conspiracy to allow view count manipulation
Defendants take issue with paragraphs 19(a), 22-24, 30, 38,

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44, 91, 92, 103, 109 and 110 of Plaintiffs' 3AC.

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paragraphs alleged that Defendants and their named executives

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agreed to permit certain record labels to game the view count

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without enforcement.

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no evidentiary basis for this theory.

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significant circumstantial evidence supported their theory.

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example, the 3AC described very high view counts for certain

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videos, and noted that Defendants would have benefitted from such
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Together, these

First, Defendants argue that Plaintiffs have
Plaintiffs respond that
For

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a conspiracy because they shared in advertising revenue.

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Court concludes that it was baseless to allege that Defendants

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conspired to game view counts--the circumstantial evidence does

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not provide a basis for such an allegation.

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violate Rule 11.

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The

These allegations

Second, Defendants argue that, contrary to Plaintiffs'

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allegations, YouTube has taken action against the alleged

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conspirator record labels.

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the G-Y Executives refrain from 4H TOS enforcement action against

See 3AC ¶ 22 (alleging that "G-Y and

United States District Court
For the Northern District of California

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the Major Labels and the other Conspiring Entities").

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available information demonstrates that Plaintiffs' counsel could

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not have undertaken an objectively reasonable inquiry before

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presenting this allegation.

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online news article entitled: "YouTube cancels billions of music

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industry video views after finding that they were fake or 'dead,'"

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discussing a video by Rihanna, a Universal artist.

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5.

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Id. Ex. 6.

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Publicly-

For example, Defendants submit an

Haas Dec. Ex.

Huffington Post published a similar story the following day.
Paragraph 22 violates Rule 11.

Third, Defendants argue that Plaintiffs have insufficient

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factual support for their allegations regarding Google and YouTube

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executives' actions.

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They argue that David Drummond's inaction following Plaintiffs'

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counsel's May 12, 2014 letter to him outlining the sequence of

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events giving rise to their legal claims could be construed as

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evidence of his and others' prior awareness of the conspiracy.

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See Docket No. 101-9.

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not serve as a basis for Plaintiffs' specific claims about

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Defendants' executives' participation in and knowledge of a view
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Plaintiffs make two arguments in response.

The lack of response to this letter does

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count gaming conspiracy.

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were a conspiracy, it must have been at the direction of senior

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management.

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allege the view count gaming conspiracy.

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allegations pertaining to the actions and knowledge of particular

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Google and YouTube executives violate Rule 11.

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II.

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Next, Plaintiffs argue that, if there

However, as explained above, there was no basis to
For these reasons, the

Allegations regarding removal of independent music videos

According to the 3AC, the alleged conspiracy was "designed to
prevent the Independent Artists from competing fairly in the

United States District Court
For the Northern District of California

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relevant market."

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Defendants allegedly accused these artists of violating the terms

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of service, removed their videos and associated view counts and

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posted in their place a defamatory notice still at issue in this

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case.

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violate Rule 11.

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3AC ¶ 35.

Id. ¶¶ 23, 80.

In furtherance of the conspiracy,

Defendants argue that these allegations

Plaintiffs justify their allegations citing Darnaa v. Google,

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Inc., 2015 WL 7753406 (N.D. Cal.), and Bartholomew v. Youtube,

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LLC, No. 15-275833 (Cal. Super. Ct. 2015).

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musician who creates and publishes original Christian ministry

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music, Docket No. 78-2, and Darnaa is the name of both an

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independent recording artist and the music label that promotes

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Darnaa's music, Darnaa, 2015 WL 7753406, at *1.

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here, the two cases allege libel claims based on the notice that

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replaced the artists' removed videos stating that they violated

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YouTube's terms of service.

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Joyce Bartholomew is a

Like Plaintiffs

Plaintiffs' allegations that other independent artists

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experienced a similar sequence of events are not baseless.

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However, their allegations regarding the motivations and
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machinations undergirding this repeated take-down sequence are

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objectively baseless.

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that the events were conspiratorial.

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independent artists stemmed from a conspiracy was not the only

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logical inference to make in light of Darnaa and Bartholomew; that

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Defendants were concerned about view count fraud is equally

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plausible.

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United States District Court
For the Northern District of California

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Plaintiffs present no evidence to support
Further, that treatment of

See Haas Dec. ¶ 9.

For this reason, to the extent that paragraphs 35 and 80 of
the 3AC connect actions taken against independent artists to a
larger conspiracy, the allegations violate Rule 11.
III. Allegations regarding combatting view count gaming
Paragraph 36 of the 3AC stated that "G-Y, at the direction of

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G-Y Executives, and as part of the conspiracy, refuses to program

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any firewall, delay, or minimum time requirement into the View

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Count algorithm to prevent millisecond Fake Views from instantly

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showing up in published View Counts . . ."

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that, contrary to the 3AC, YouTube works to counter view count

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gaming.

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explains that views are "algorithmically validated," which may

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require YouTube to "temporarily slow down, freeze, or adjust the

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view count, as well as discard low-quality playbacks."

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Ex. 3.

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hours after a video has been published, we'll only show views that

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our systems believe to be valid."

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Defendants explain

On a public page entitled "Frozen view count," YouTube

Haas Dec.

This website further explains: "During the first couple of

Id.

Plaintiffs counter that they did not allege that Defendants

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do nothing to counter view count gaming, but that Defendants

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refuse to incorporate a mechanism to prevent non-human views from

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instantly appearing in view counts.
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This assertion contradicts

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the frozen view count webpage's statement that, after a video is

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first posted, views must appear trustworthy before they are

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included in the view count.

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evidence to support this allegation, and because Defendants have

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shown that a reasonable investigation would have uncovered that

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YouTube takes measures to counter view count fraud, paragraph 36

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violates Rule 11.

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United States District Court
For the Northern District of California

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IV.

Because Plaintiffs provide no

Allegations regarding YouTube's view count calculation

The 3AC contained the following allegations:
Another primary role of G-Y and the G-Y
conspiracy is to keep the way views are
Count "top secret" and to never publish
standards as to how views are counted.

Executives in the
counted in the View
any guidelines or
3AC ¶ 46.

Defendants' counsel has made representations in open Court
that "views" are counted every time any user watches a
particular video; i.e., if someone watches a video 5 times
for a meaningful duration, it is counted as 5 views. This is
not the case. Plaintiff Joe Brotherton has observed that the
first time he watches a video on YouTube, the View Count
increases by one, but there are no additional increases in
the View Count for his subsequent views of the same video.
Id. ¶ 47
Plaintiffs allege upon information and belief that views are
counted only one time per user in the YouTube View Count
prior to any Fake View enhancement. Id. ¶ 49.
Defendants point to publicly-available explanations of how

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views are counted.

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entitled "Increase YouTube views: Buying and getting YouTube views

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through third-party services" explains that a legitimate view "is

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an intended watch of a video where the primary purpose is to watch

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the video; this means that a real human being wishes to see a

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video, chooses which video to watch and then acts on that choice."

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Haas Dec. ¶ 27 & Ex. 8.

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described above includes a section entitled "How views are
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For example, YouTube's Policy Center page

Similarly, the Frozen view count page

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counted" which explains that, when a video is first published,

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views may take awhile to appear because YouTube displays views it

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believes to be valid.

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count updates more frequently, and YouTube is "constantly

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validating views, so view count can always be adjusted."

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This information runs contrary to Plaintiffs' allegations in that

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YouTube publishes standards and general methods.

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that it does not make public all of the details of its view count

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methods.

Id. Ex. 3.

However, afterwards the view

YouTube concedes

However, making any such information public runs counter

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United States District Court
For the Northern District of California

Id.

to the 3AC, which says that YouTube never publicizes any

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information as to how views are counted.

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paragraph 46 violate Rule 11.

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Thus, the allegations in

However, the allegations that Defendants counted views on a

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user basis, rather than a view basis, are not objectively

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baseless.

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Defendants' public statements, that could serve as a basis for

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their allegations, namely Brotherton's observations.

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Brotherton Dec. ¶¶ 3, 5, 6.

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one video repeatedly on different occasions and saw the view count

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increase only once, on first time he watched the video.

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single experiment with undisclosed methodology is meager evidence

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at best.

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characterize Brotherton's observations as fraud prevention at

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work, this conflicting interpretation does not render Plaintiffs'

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allegations baseless or without reasonable investigation.

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V.

Here, Plaintiffs present evidence, contrary to

See

Brotherton explains that he watched

Id.

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Although Defendants provide evidence to the contrary and

Sanctions
A sanction imposed "must be limited to what suffices to deter

repetition of the conduct or comparable conduct by others
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similarly situated."

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non-monetary directives or, "if imposed on motion and warranted

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for effective deterrence, an order directing payment to the movant

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of part or all of the reasonable attorney's fees . . . directly

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resulting from the violation."

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Fed. R. Civ. P. 11(c)(4).

This can include

Id.

The Court grants attorneys' fees to Defendants for their work
on this sanctions motion.
VI.

Plaintiffs' Requests

In their opposition brief, Plaintiffs request expenses in

United States District Court
For the Northern District of California

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opposing this motion under Rule 11(c)(2).

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Defendants brought this motion to intimidate Plaintiffs.

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Plaintiffs failed to satisfy the procedural requirements of Rule

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11 and to carry their burden of proof that Defendants violated

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Rule 11.

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11's safe harbor provision and they did not file this request for

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sanctions as a separate motion.

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Plaintiffs' request.

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They argue that
However,

In particular, they never argued that they followed Rule

Therefore, the Court denies

Plaintiffs also request discovery on those who submitted

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declarations in support of Defendants' motion.

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Notes state that discovery "should be conducted only by leave of

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the court, and then only in extraordinary circumstances."

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Plaintiffs have cited no legal authority that would permit

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discovery.

Rule 11's Advisory

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CONCLUSION

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The Court GRANTS in part Defendants' motion for sanctions

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under Rule 11 and GRANTS Plaintiffs' motion for leave to file a

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surreply.

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44, 91, 92, 103, 109 and 110, as well as paragraphs 35 and 80 to
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The Court strikes paragraphs 19(a), 22-24, 30, 36, 38,

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the extent they link actions against independent artists to

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conspiratorial motives and objectives.

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The Court also awards attorneys' fees to Defendants for their

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work bringing this motion.

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order, Defendants’ counsel shall submit documentation supporting

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hours spent and reasonable rates.

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Within ten days of the date of this

Based on the current record, Plaintiffs may not depose Susan

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Wojcicki, YouTube's CEO, David Drummond, Google's Chief Legal

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Officer, Larry Page, the CEO of Alphabet, Eric Schmidt, the

United States District Court
For the Northern District of California

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Executive Chairman of Alphabet, or Sergey Brin, the President of

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Alphabet Inc.

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to the antitrust or fraud claims.

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Plaintiffs may not take any discovery relating only

IT IS SO ORDERED.

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Dated: August 8, 2016
CLAUDIA WILKEN
United States District Judge

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