Facebook, Inc. v. Studivz, Ltd et al

Filing 174

Memorandum in Opposition re 163 MOTION to Compel Further Discovery Responses to Facebook's Second Round of Discovery to Defendants filed byStudivz, Ltd. (Attachments: # 1 Appendix Opinion only Available on Lexis or Westlaw, # 2 Appendix Opinion only Available on Lexis or Westlaw, # 3 Appendix Opinion only Available on Lexis or Westlaw, # 4 Appendix Opinion only Available on Lexis or Westlaw, # 5 Appendix Opinion only Available on Lexis or Westlaw)(Walker, William) (Filed on 6/9/2009)

Facebook, Inc. v. Studivz, Ltd et al

Doc. 174

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GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP

STEPHEN S. SMITH (SBN 166539) [e-mail] WILLIAM M. WALKER (SBN 145559) [e-mail] GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP 1900 Avenue of the Stars, 21st Floor Los Angeles, California 90067-4590 Telephone: [phone] Fax: [phone] Attorneys for Defendants studiVZ Ltd. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION FACEBOOK, INC., Plaintiff, v. STUDIVZ LTD., HOLTZBRINCK NETWORKS GmbH, HOLTZBRINCK VENTURES GmbH, and DOES 1-25, Defendants. Case No. 5:08-CV-03468 JF Assigned To: Hon. Jeremy Fogel STUDIVZ'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL Date: June 19, 2009 Time: 2:00 p.m. Place: Courtroom 2, 5th Floor Hon. Howard R. Lloyd [Declaration of Stephen S. Smith (and exhibits thereto) concurrently filed] Complaint Filed: July 18, 2008

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1900 Avenue of the Stars, 21st Floor Los Angeles, California 90067 4590 -

STUDIVZ'S OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL
Dockets.Justia.com

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TABLE OF CONTENTS Page I. II. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. B. C. D. E. F. G. H. III. The First Set of Discovery .................................................................. 4 The Deposition of Michael Brehm...................................................... 6 Facebook's First Motion to Continue.................................................. 6 The Second Set of Discovery Requests............................................... 7 Facebook's Second Motion to Continue ............................................. 7 The Hearing of the Motions to Dismiss .............................................. 8 Facebook Files Its Second Motion to Compel..................................... 9 Facebook Files Its Third Motion to Continue ..................................... 9

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 A. B. C. D. Facebook Was Not Permitted to Serve New Discovery ...................... 9 Facebook Waived Its Right to Move to Compel ............................... 10 Most of the New Discovery is Not Related to Jurisdiction................ 12 Facebook Has Failed to Make a Sufficient Showing to Permit Any Additional Discovery Related to Jurisdiction ............................ 15 1. 2. E. Facebook Does Not Even Argue General Jurisdiction ............ 16 The Calder v. Jones "Effects Test" Does Not Apply............... 17

Facebook Could Have Obtained Anything Remotely Related to Jurisdiction from the Second Set of Discovery By Deposing Michael Brehm ................................................................................. 20

IV.

CONCLUSION .......................................................................................... 20

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TABLE OF AUTHORITIES Page

Calder v. Jones, 465 U.S. 783 (1984)..........................................................................3, 17, 18, 19 Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390 (4th Cir. 2003) ...................................................................... 15, 18 Central States, Southeast & Southwest Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934 (7th Cir. 2000) ........................................................................... 15 Consolidated Develop. Corp. v. Sherritt, Inc., 216 F.3d 1286 (11th Cir. 2000) ....................................................................... 16 eMag Solutions, LLC v. Toda Kogyo Corp., 2006 U.S. Dist. LEXIS 94462 (N.D. Cal. Dec. 21, 2006).................................. 16 Fielding v. Hubert Burda Media, Inc., 2004 WL 532714 (N.D. Tex. Feb. 11, 2004) ......................................................... 19 Holland America Line Inc. v. Wartsila North America, Inc., 485 F.3d 450 (9th Cir. 2007) .................................................................................... 3 Gault v. Nabisco Biscuit Co., 184 F.R.D. 620 (D. Nev. 1999) ........................................................................ 12 In re Sulfuric Acid Antitrust Litigation, 231 F.R.D. 331 (N.D. Ill. 2005)........................................................................ 12 Jazini v. Nissan Motor Co., 148 F.3d 181 (2d Cir. 1998) ............................................................................ 15 Mitan v. Feeney, 497 F.Supp.2d 1113 (C.D. Cal. 2007).............................................................. 15 Pebble Beach Co. v. Caddy, 453 F.3d 1151 (9th Cir. 2006) ........................................................................... 3 Protrade Sports, Inc. v. Nextrade Holdings, Inc., 2006 U.S. Dist. LEXIS 6631 (N.D. Cal. Feb. 2, 2006)...................................... 15 Purnell v. Arrow Financial Services, L.L.C., 2007 U.S. Dist. LEXIS 4588 (E.D. Mich. Jan. 23, 2007) .................................. 12 Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729 (9th Cir. 1987) ............................................................................ 16 West v. Miller, 2006 U.S. Dist. LEXIS 56243 (N.D. Ill. Aug. 11, 2006) ................................... 12

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TABLE OF AUTHORITIES (continued) OTHER AUTHORITIES Page

F.R.Civ.P. 4(K)(2) ............................................................................................ 3, 16 F.R.Civ.P. 11 ........................................................................................................ 15 F.R.Civ.P. 12(b)(6) ............................................................................................... 16 Local Rule 6-3 .............................................................................................................. 10

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I.

INTRODUCTION Defendant StudiVZ, Ltd. ("StudiVZ") opposes Plaintiff Facebook, Inc.'s

("Facebook") latest motion to compel. Facebook's second motion to compel StudiVZ to answer 33 new requests for production of documents and 22 new requests for admissions raises the following issue -- when a motion to dismiss is pending, is there any limit to (a) the time within which to propound discovery, or (b) the scope of such discovery? StudiVZ believes that there are and that Facebook's motion should be denied because it violates both such limits. Time: Facebook's motion violates its own stipulation to take discovery about personal jurisdiction within a particular schedule. Facebook fully admits that "[i]n order to allow time to take discovery and resolve discovery disputes, Facebook and Defendants negotiated a stipulation regarding the scheduling of Defendants' motions to dismiss and the filing of Facebook's opposition thereto." (Dkt. No. 77 at 2:26-3:5). Facebook did not serve the second set of discovery that is the subject of the instant motion to compel until February 2, 2009, far outside of the stipulated schedule. Facebook never asked the Court to relieve it from its stipulation to "take discovery" within the stipulated time period, and the Court never issued any order relieving Facebook from its stipulation in that regard. When it filed its first motion to enlarge time, Facebook referred only to the discovery disputes related to the already-existing discovery, which had been served on October 14, 2008. It did not make any mention of the need or desire to serve new discovery requests. And the Court did not move the date in order to allow Facebook to do so. The Court moved the hearing only so that Facebook could have the disputes concerning the original set of discovery heard (which StudiVZ did not even oppose). Facebook propounded the new discovery two days later. Defendants responded on March 4, 2009, objecting that the discovery was untimely.
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Facebook then filed a second motion to enlarge time but, again, made no mention of the second set of discovery. Its request was based solely on the "discovery dispute currently pending before the Magistrate Judge Lloyd." (Dkt. No. 122-2 at 1:6-8 (emphasis added); see also Dkt No. 122 at 2:19-21). At the hearing of the motion to dismiss on May 1, 2009, the Court twice asked Facebook about the state of discovery and how much time Facebook needed to have personal jurisdiction "teed up" and "ready to be heard." (Dkt. No. 157 at 11:14-17, 12:11-12). Facebook replied by referencing only the first motion to compel. It again made no mention of the second set of discovery. Then, after the May 4, 2009 Order lifting the stay, Facebook waited another 22 days to file its motion to compel and, as a result, has separately asked the presiding Court for another continuance of the motion to dismiss hearing -- to a sixth date. (Dkt. No. 170). Facebook fully admits that it intentionally delayed filing its second motion to compel "until the first dispute was settled." (Mot., Dkt No. 163, at 2:11). But it always intended to file both. The vast majority of the second set of discovery does not overlap with the first. So if Facebook wanted it, it had to file the second motion to compel no matter what the ruling on the first. In sum, Facebook did not propound this discovery within the time period to which it stipulated. It did not ask for or obtain the Court's relief from that stipulation. It then delayed filing the motion. Thus, the discovery and the motion are both untimely, and for this reason alone the motion should be denied. Scope: The motion should also be denied because the discovery is not limited in scope to any material disputed issue related to personal jurisdiction. Facebook served 55 new requests on StudiVZ and 14 new requests on the Holtzbrinck Defendants. That discovery literally seeks, "ALL DOCUMENTS in possession, custody or control of STUDIVZ that RELATE in ANY way to the subject matter of this lawsuit." (Dkt. No. 164-3 at 30:20-22, Request No. 50). Yet, Facebook has the
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gall to describe this discovery as "Limited" to personal jurisdiction. (Mot., Dkt. No. 163, at 1:6-13). Simply put, Defendants should not be subject to such obviously unlimited discovery while the motions to dismiss are undecided, especially given that the presiding Court has stated that it is already "inclined to dismiss" this action on forum non conveniens grounds. (Dkt. No. 155 at 3:12-14). Even as to the minority of the requests that arguably relate to jurisdiction, the discovery is irrelevant and Facebook has not established a prima facie case for it. First, after having propounded requests related to StudiVZ's general jurisdiction contacts with "California" in October 2008, Facebook now seeks the same categories of discovery, but with respect to general jurisdiction "contacts" with the "United States." But Facebook's "Jurisdiction" allegations in both its original complaint and amended complaint refer to Defendants' alleged contacts with "California." (Dkt. No. 1 at 3:3-25; Dkt. No. 140 at 3:2-26). Moreover, Facebook did not argue in its opposition to the motions to dismiss that Defendants were subject to general jurisdiction at all ­ based on contacts with California or the United States. (Dkt. No. 76). This is simply another, long "after-the-fact," entirely speculative fishing expedition. Facebook should not be permitted to pursue discovery into "nationwide contacts" jurisdiction, when it had never before even argued for jurisdiction on this basis.1 Second, Facebook continues its improper attempt to seek discovery under the "effects test" of Calder v. Jones. The effects test has three elements, all of which must exist to establish jurisdiction. The third element -- brunt of the harm occurring in the jurisdiction -- does not exist in this case. Facebook has previously admitted that StudiVZ's alleged conduct caused Facebook to be harmed "in the European Market." (Dkt. No. 1, ¶ 41; Dkt. No. 140, ¶ 60). The Court has already
1

So-called "nationwide contacts" can be used as a method to establish jurisdiction under FRCP 4(k)(2). Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006); Holland America Line Inc. v. Wartsila North America, Inc., 485 F.3d 450, 461 (9th Cir. 2007). Facebook only first alleged anything related to Defendants' possible "systematic and continuous contacts" (i.e., general jurisdiction) with the United States in its amended complaint filed on March 31, 2009, more than five months after the motions to dismiss were filed. 37106-00002/1691182.4 3 STUDIVZ'S OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL

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found that the "conduct complained of appears to have occurred principally in Germany." (Dkt. 155 at 4:21) (emphasis added). The Court has noted that the "source" of the alleged infringement is in "Germany." (Dkt. No. 155 at 5:21-23) (emphasis added). These two categories of discovery show clearly why Courts employ the prima facie test before allowing jurisdictional discovery. Facebook has not made, and cannot make, a prima facie case of general jurisdiction or that the brunt of the harm has occurred in the forum. Accordingly, Facebook should not be permitted to invoke either argument now as a basis to engage in far-reaching discovery. The presiding Court has already noted that "Defendants have shown that discovery related to personal jurisdiction has grown complicated and burdensome" and that the "efficiency considerations raised by Defendants are legitimate." (Dkt. No. 138:3-4; Dkt No. 155 at 7:21-22). That was before Facebook filed this motion to compel. Since then, this Court has noted that the issues presented by the pending discovery motions are numerous and complex. (Dkt. No. 169 at 2:9). This dispute, which has been ongoing since September 2008, requires the Court to draw a line between two competing policy concerns -- the right of a plaintiff to oppose fairly a motion to dismiss versus the right of a defendant, who argues it should never have been sued in that action, to be free of the burden and expense associated with litigating that action. StudiVZ submits that the line to be drawn is now clear. Facebook made a deal as to timing and should be held to that deal. And, given Facebook's complete inability to establish a prima facie case for the discovery it seeks, and given the expense and burden that has already been found to exist, the Court should decide that no further discovery is allowed. II. FACTS A. The First Set of Discovery On October 14, 2008, before the motions to dismiss were filed, Facebook served written discovery that it claimed was related to personal jurisdiction. The
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parties then met and conferred for the purpose of setting a mutually agreeable hearing date and briefing schedule for the motions to dismiss. Facebook admits that the parties stipulated to take discovery related to the motions to dismiss by January 16, 2009. In its first Motion to Enlarge Time, Facebook wrote as follows: "In order to allow time to take discovery and resolve discovery disputes, Facebook and Defendants negotiated a stipulation regarding the scheduling of Defendants' motions to dismiss and the filing of Facebook's opposition thereto. The Court entered the Proposed Stipulated Scheduling Order on November 4, 2008, which provides that Facebook's deadline was to be January 16, 2009 to file and serve its opposition to Defendants' motions to dismiss. Id.; see Docket No. 54. Defendants were given two weeks from that date to file their Reply papers. Id. The hearing on Defendants' motions to dismiss was set for February 13, 2009. Id." (Dkt. No. 77 at 2:26-3:5) (emphasis added); see also Dkt. Nos. 41, 42, 48 and 54). StudiVZ timely responded to the discovery on November 17, 2008. Facebook believed the responses were inadequate. The parties met and conferred and resolved the large majority of the disputes. Facebook served 30 document demands and 23 interrogatories. StudiVZ answered 22 of the document demands (73%) and 18 of the interrogatories (78%) to Facebook's satisfaction. By December 16, 2008, all issues with respect to the Holtzbrinck defendants and the large majority of issues with respect to StudiVZ were resolved. As Facebook represented to the Court: "We have largely been able to work out every issue, and there remain, I believe, Your Honor, very few issues that would come back before this court . . . ." (Exhibit A to Avalos Decl. at pp. 5-6 of 28 [Reporter's Transcript at 4:23-5:4]) (Docket No. 78-2).
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B.

The Deposition of Michael Brehm

Facebook also asked to depose Michael Brehm, the declarant in support of StudiVZ's motions to dismiss. The parties agreed that Mr. Brehm's deposition would take place in Germany at the offices of Facebook's counsel on January 12, 2009. Facebook noticed the deposition for that date. On January 8, 2009, Facebook canceled the deposition. (Smith Decl. in Support of Defendants' Motion for Sanctions, Dkt. No. 84, ¶¶ 2-20; Dkt. No. 84-2). C. Facebook's First Motion to Continue On January 23, 2009, Facebook filed its first motion to continue the hearing of the motions to dismiss. (Dkt. No. 77). Facebook did not argue that it needed to take any new discovery. The entire focus was the then-existing dispute related to discovery that Facebook had theretofore sought. (Dkt. No. 77 at 1:4, 1:8-9, 1:2425; 2:22-23, 4:9-10, 4:18-19). StudiVZ opposed Facebook's motion only in part. StudiVZ agreed to having the hearing moved as to personal jurisdiction only because the then-existing discovery dispute was a good faith dispute. (Dkt. No. 81 at 1:7-8, 2:7-4:25). But, because that dispute did not relate to forum non conveniens, it opposed moving that portion of the motions to dismiss. (Id. at 1-11 and 4:6-25). On January 28, 2009, the Court issued its Order. "A review of the record and the parties' papers reveals that Facebook has failed to demonstrate any reason to continue the February 13, 2009 hearing as to either defendant with respect to forum non conveniens, or as to Holtzbrinck with respect to personal jurisdiction." (Order, Dkt. No. 92, at 2:15-17). The Court ruled that Facebook would be "permitted to file a supplemental opposition with respect to whether this Court has personal jurisdiction over StudiVZ in light of any newly discovered material." (Id. at 2:20-22). The Court moved the hearing date of the motions to dismiss to April 10, 2009 for reasons of "judicial economy" and "because a brief continuance is
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unlikely to prejudice any party." (Id. at 2:18-19).2 D. The Second Set of Discovery Requests Two days later, on Friday, January 30, 2009, Facebook propounded and sent out for service its second set of discovery, which was then served on Defendants on Monday, February 2, 2009.3 Facebook served StudiVZ with 33 new requests for production of documents and 22 new requests for admissions. These requests fall into three main categories: (1) requests that have nothing to do with jurisdiction, but which relate solely to new issues about the merits or nothing at all; (2) requests that are more narrowly-drafted versions of prior requests related to the "access" issue; and (3) requests that relate to StudiVZ's contacts with the United States, as opposed to the prior requests which asked about StudiVZ's contacts with California.4 On March 4, 2009, StudiVZ responded to these requests. It objected and did not answer the requests or produce the documents. (Dkt. No. 164-1). E. Facebook's Second Motion to Continue On March 20, 2009, Facebook filed its second motion to continue the hearing of the motions to dismiss. Facebook did not reference the second set of discovery. It did not argue it needed more time in order to move to compel further responses to the second set of discovery. (Dkt. No. 122). Facebook argued that "in light of the pending threshold discovery issue, Facebook respectfully requests that the Court hold in abeyance or take off calendar Defendants' Motions to Dismiss currently scheduled for April 10, 2009." (Dkt. No. 122 at 2:19-21) (emphasis added). In its proposed order, Facebook proposed that the motion to dismiss be taken off calendar "until such time as the underlying discovery dispute currently pending before Magistrate Judge Lloyd is resolved." (Dkt. No. 122-2 at 1:6-8) (emphasis added).
2

The Court did not actually find that Facebook had made any showing that it was entitled to a continuance of the StudiVZ motion to dismiss, even as to personal jurisdiction. Rather, the Court simply noted that StudiVZ had not opposed that part of Facebook's motion.
3

The discovery requests, which Facebook did not attach to its motion papers, are dated Friday January 30, 2009. But they were not actually served on Defendants until Monday, February 2, 2009. (Smith Decl., ¶ 2; Ex. A).
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On March 30, 2009, the Court stayed the personal jurisdiction portion of the case in order to hear the forum non conveniens portion of the motions to dismiss first. The Court found that "Defendants have shown that discovery related to personal jurisdiction has grown complicated and burdensome." (Dkt. No. 138 at 3:3-4). The Court continued the hearing to April 17, 2009. (Id. at 3:28). The parties then moved the hearing date to May 1, 2009 via stipulation requested by Facebook due its counsel's vacations. (Dkt. No. 144). F. The Hearing of the Motions to Dismiss At the May 1, 2009 hearing of the motions to dismiss, the Court raised with Facebook the subject of the outstanding discovery. The Court noted that "you're in the midst of objections and motions and so forth." The Court asked Facebook two separate times how much time it needed to get the personal jurisdiction portion of the motions "teed up" and "ready to be heard." (Dkt. Nos. 157/168-1 at 11:14-17, 12:11-12). Facebook responded, "I think we are beyond that . . ." -- i.e., beyond being in the "midst of objections and motions and so forth." Facebook referenced only the already-existing dispute pending in front of the Magistrate Court. (Id. at 11:16-13:2). It said that jurisdiction could be ready to be heard "relatively quick if Defendants comply with the discovery issues." (Id. at 13:1-2). Facebook again made no mention of the second set of discovery and did not say that it needed such discovery in order to oppose the motions to dismiss. On May 4, 2009, the Court issued an Order stating it was "inclined to dismiss" the action on forum non conveniens grounds, but deferred the final decision until the personal jurisdiction issues could be "fairly presented." The Court noted that the "efficiency concerns raised by Defendants are legitimate," but then added that "it is possible . . . that the personal jurisdiction inquiry meaningfully will inform the Court's ultimate decision with respect to forum non conveniens." (Dkt. No. 155 at 7:21-8:1). The Court set a new hearing date for July 10, 2009 and lifted the stay. The Court allowed Facebook to file another supplemental brief on or before June 26, 2009.
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G.

Facebook Files Its Second Motion to Compel

Facebook waited another 22 days, until May 26, 2009, to move to compel. (Dkt. No. 163). By that time, the motion could not be heard on normal notice before Facebook's supplemental opposition would be due. Facebook moved to shorten time, which the Court granted in part. (Dkt. No. 165). H. Facebook Files Its Third Motion to Continue On June 3, 2009, Facebook filed another motion to enlarge time, asking the Court to move the motion to dismiss hearing to a sixth date. (Dkt. No. 170). ARGUMENT A. Facebook Was Not Permitted to Serve New Discovery. Facebook was not permitted to use the extra time created by the continuance of the motion to dismiss to propound new discovery. Facebook stipulated to "take discovery" related to the motions to dismiss on a particular schedule. (Dkt. No. 77 at 2:26-3:5). It never requested that Defendants modify or amend that part of the stipulation, either in connection with the meet and confer concerning Facebook's motions to enlarge time or otherwise. Facebook did not make such a request to the Court in its January 23, 2008 motion to enlarge time or in its March 20, 2009 motion to enlarge time. It did not mention any need to take new discovery. Facebook simply stated that it wished to obtain further responses to the discovery it had already served. (Dkt. No. 77 at 1:4, 1:8-9, 1:24-25; 2:22-23, 4:9-10, 4:18-19; Dkt. No. 122 at 2:19-21; Dkt No. 122-2 at 1:6-8). It is clear that the Court understood Facebook to be asking for more time solely to have the discovery dispute concerning the first set of discovery heard. In its March 30, 2009 Order, the Court described its January 28, 2009 Order as follows: "By a previous administrative motion, Facebook requested a continuance of the hearing on Defendants' motions on the ground that it required additional discovery that it claimed Defendants were withholding improperly." (Dkt. No. 138 at 2:3-7) (emphasis added). In its May 4, 2009 Order, the Court again described its January
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28, 2009 Order as follows: "In an earlier administrative motion, Facebook requested a continuance of the hearing on Defendants' motions, claiming that it required additional discovery that Defendants improperly were withholding." (Dkt. No. 155 at 2:25-3:2). By definition, the only discovery that Defendants "were withholding" as of January 23, 2009 was discovery that had been served as of that date.5 In none of its prior Orders has the Court ever relieved Facebook of its prior stipulation. It never gave Facebook permission to serve new discovery (and would not have even known to consider the issue since Facebook never raised it). Local Rule 6-3, upon which Facebook based both of its prior motions to enlarge time, requires the moving party to state the bases for its motion "with particularity." Given that the only reason ever stated was the need to resolve the pending dispute about the already-existing discovery, Facebook should be held to that basis. Facebook was clearly lying in wait. Its second set of discovery was dated January 30, 2009, only two days after the Court granted the motion to continue the hearing date. That discovery contained 69 new requests, in six different documents served on three parties. It is not believable that Facebook only first considered serving this new discovery on January 29 or January 30, 2009. It was already drafted and ready to serve. In sum, the second set of discovery violates the stipulation of the parties. It was not a basis for Facebook's request to continue the hearing date. It was not a basis for the Court's Order continuing the hearing date. It was gamesmanship, pure and simple, designed to increase the time, burden and costs on Defendants and this Court. For this reason alone, the motion should be denied. B. Facebook Waived Its Right to Move to Compel. Facebook's motion to compel should also be denied as untimely because Facebook intentionally delayed filing it and consciously misled the presiding Court concerning its intent to file it.
5

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6

The fact of the delay is undisputed. The responses were served on March 4, 2009. Defendants' position was clearly stated therein.6 Facebook delayed filing the motion to compel until May 26, 2009. While there was a stay in effect for 35 days (from March 30 to May 4, 2009), Facebook could have filed the motion anytime during the 26 days before the stay was entered or anytime in the 22 days after the stay was lifted. The fact of Facebook's intent is also undisputed. Facebook waited on purpose for the Court to rule on the first motion to compel. It claims that it always intended to file the second motion to compel, but only after the Court ruled on the first. (Dkt. No. 163 at 2:9-11; Dkt No. 165 at 1:4-5, 2:8-12). Facebook has not claimed that any ruling on the first motion to compel would have avoided the need for the second motion to compel. It always intended to file both. (Id.) Indeed, no ruling on the first motion would have avoided the need (to the extent Facebook desired to compel further responses to its second set of discovery) for the second. The vast majority of the requests in the second set of discovery do not overlap with any of the requests that are the subject of the first motion to compel. So Facebook admits to deliberately extending the time it claims is needed to obtain this discovery for no reason other than delay itself. The fact that Facebook consciously misled the Court is also indisputable. Facebook misled the Court for the first time in its January 23, 2009 motion to continue. It asked for a continuance only for the purpose of resolving the alreadyexisting dispute about the already-existing discovery requests. It made no mention of any need to take new discovery. Two days later, it signed the second set of discovery. Facebook misled the Court a second time in its March 20, 2009 motion to continue. It again asked for a continuance only for the purpose of resolving the
Facebook argues in its Motion that it was waiting for Defendants to "voluntarily comply with their discovery obligations." (Mot. at 2:13-14). Such a statement is not believable. Defendants had stated their position explicitly in their responses, which were served on March 4, 2009. (Dkt No. 164-1). In addition, the parties met and conferred about it on March 20, 2009, wherein Defendants restated the exact same position. Facebook was not waiting for Defendants to voluntarily comply. It was just waiting. (Smith Decl., ¶ 3). 37106-00002/1691182.4 11 STUDIVZ'S OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL

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discovery dispute that was then "pending" in the Magistrate Court. It made no mention at all of the second set of discovery (or the Subpoenas). Facebook misled the Court a third time at the May 1, 2009 hearing. In response to two questions from the Court about how much time it needed to make the jurisdiction portion of the motions to dismiss ready to be heard, Facebook mentioned only the motion to compel that was pending in front of the Magistrate Court. It made no mention of the second set of discovery (or the Subpoenas). Facebook engaged in a classic bait and switch. At each of these three points in time, Facebook knew there would be discovery disputes over the second set of discovery (and the Subpoenas). Defendants had already objected on the ground that no further discovery was permitted. Some of the new requests related to the old "access" issue, which had already generated extensive motion practice. Most of the requests relate to the merits only, which Defendants have been refusing to produce since September 2008. The inevitability of the dispute could not have been more obvious. Yet, Facebook waited and waited, made no mention of the oncoming, inevitable dispute and affirmatively downplayed the extent and complexity of the problem when directly asked by the Court about it. Under these circumstances, the Court should find that Facebook has waived its right to move to compel. See e.g. Gault v. Nabisco Biscuit Co., 184 F.R.D. 620, 622 (D. Nev. 1999); In re Sulfuric Acid Antitrust Litigation, 231 F.R.D. 331 (N.D. Ill. 2005); West v. Miller, 2006 U.S. Dist. LEXIS 56243, *13-*17 (N.D. Ill. Aug. 11, 2006); Purnell v. Arrow Financial Services, L.L.C., 2007 U.S. Dist. LEXIS 4588, *1-*2 (E.D. Mich. Jan. 23, 2007). C. Most of the New Discovery is Not Related to Jurisdiction. Even assuming that Facebook was permitted to serve new discovery, such discovery must be related to jurisdiction. On January 28, 2009, the Court "denied Facebook's request except with respect to the issue of personal jurisdiction over StudiVZ." (Dkt. No. 155 at 3:1-2). In its March 30, 2009 Order, the Court noted that "Defendants have shown that discovery related to personal jurisdiction has
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grown complicated and burdensome." (Dkt. No. 138 at 3:3-4). In its May 4, 2009 Order, the Court noted that the "efficiency considerations raised by Defendants [in connection with the discovery] are legitimate." (Dkt. No. 155 at 7:21-22). The Court said that it would defer its ruling only "out of prudence" so that "the issue of personal jurisdiction can be fairly presented." (Id. at 8:1-2). Yet, most of Facebook's new discovery requests have nothing to do with personal jurisdiction, as follows: RFP 42 -- All documents related to the conception, design and development of StudiVZ and its websites RFP 43 -- All documents relating to any communications by StudiVZ to any media or media outlet regarding StudiVZ, its website or Facebook. RFP 44 --All documents that relate to StudiVZ's "business management information and procedures." RFP 45 -- All documents reflecting communications between StudiVZ and any developer of software and computer code used to create, run or operate StudiVZ's websites. RFP 46 -- All documents relating to the research and development of StudiVZ and StudiVZ's websites. RFPs 47-- All of StudiVZ's computer systems of any kind. RFPs 50-- All documents that relate in any way to the subject matter of this lawsuit. RFP 51 -- All documents regarding efforts to locate any StudiVZ computer that might contain StudiVZ computer code. RFP 52 -- All documents regarding efforts to locate any communications, documents or code that relate to the subject matter of the lawsuit. RFP 53 -- All documents relating to every investment in StudiVZ and
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the terms of such investment. RFP 57 -- All documents relating to any business plan for StudiVZ. RFP 58 -- All documents sufficient to identify any person involved in any way in the development of StudiVZ or its websites. RFP 59 -- All documents identifying any investors, potential investors, loans, gifts, contributions, offers to purchase, or other forms of financing contributed to or received by StudiVZ. RFP 60 -- All documents relating to the StudiVZ websites being modeled after or inspired by the Facebook website. RFP 61 -- All documents relating to StudiVZ's website's layout being modeled after or inspired by the Facebook website. RFP 62 -- All documents relating to StudiVZ's websites functionality or features being modeled after or inspired by the Facebook website. RFA 4 -- Ad mit you intentionally designed at least one StudiVZ website to look like Facebook's website. RFA 16 -- Admit that users of StudiVZ are required to agree to terms of use prior to receiving full access to the StudiVZ websites. RFA 18 -- Admit that StudiVZ's business, income, revenue or profit models rely, at least in part, on income from advertising, including, but not limited to, advertisements and advertisement banners placed on the StudiVZ websites. RFA 19 -- Admit that the number of StudiVZ users is a factor taken into account by YOU when negotiating the cost of advertising on at least one of the StudiVZ websites. RFA 20 -- Admit that StudiVZ's revenue is based, at least in part, on the total number of StudiVZ users. RFA 21 -- Admit that at least one of the StudiVZ websites was modeled after the Facebook website.
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For Facebook to characterize this discovery as being "limited" and related to jurisdiction crosses the line from aggressive advocacy to a violation of Rule 11. There is no conceivable argument that these requests are directed at personal jurisdiction. Facebook literally seeks all documents about all issues in the case!7 D. Facebook Has Failed to Make a Sufficient Showing to Permit Any Additional Discovery Related to Jurisdiction. The other two categories of discovery requests set forth in the second set of discovery might, under some circumstances, relate to jurisdiction. But, under the circumstances presented here, Facebook is not entitled to any further such discovery because it fails to make out a prima facie case that either category relates to any material disputed issue of personal jurisdiction in this case. Courts do not allow discovery, or strictly limit its scope, unless the plaintiff first proves a prima facie case that personal jurisdiction exists. Central States, Southeast & Southwest Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000) ("Foreign nationals should not be subjected to extensive discovery in order to determine whether personal jurisdiction over them exists."); Jazini v. Nissan Motor Co., 148 F.3d 181, 185-86 (2d Cir. 1998) (denying discovery where the plaintiff "did not establish a prima facie case that the district court had jurisdiction"); Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 402-03 (4th Cir. 2003); Mitan v. Feeney, 497 F.Supp.2d 1113, 1118 (C.D. Cal. 2007) ("In order to obtain discovery on jurisdictional facts, the plaintiff must at least make a `colorable' showing that the Court can exercise personal jurisdiction over the defendant."); Protrade Sports, Inc. v. Nextrade Holdings, Inc., 2006 U.S. Dist. LEXIS 6631, Case No. C05-04039 MJJ at *9 (N.D. Cal. Feb. 2, 2006) (a plaintiff is not entitled to early discovery concerning personal jurisdiction unless it first makes a "colorable" showing of personal jurisdiction);
7

As early as September 2008, Defendants noted that this was always Facebook's true intent and is probably the only reason it sued StudiVZ in the United States to begin with. In their opposition to Facebook's motion for expedited discovery, Defendants wrote: "Facebook's true motive is to take massive early discovery on issues that go well beyond personal jurisdiction." (Dkt. No. at 11:20-14:4). Can there any longer be any doubt? 37106-00002/1691182.4 15 STUDIVZ'S OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL

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eMag Solutions, LLC v. Toda Kogyo Corp., 2006 U.S. Dist. LEXIS 94462, Case No. C02-1611 PJH at *10 (N.D. Cal. Dec. 21, 2006) (granting plaintiffs' request for jurisdictional discovery only because plaintiffs had "provided some evidence" of the defendant's California contacts). This case and Facebook's discovery requests reveals the need for the prima facie rule. Discovery related to personal jurisdiction is supposed to be limited to some material issue that is in dispute because Courts are rightly hesitant to subject a defendant who potentially never should have been sued in this jurisdiction to intrusive and burdensome discovery. The whole point of a motion to dismiss is to be dismissed from the case before having to litigate it extensively. Cf. Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987) ("The purpose of F.R.Civ.P. 12(b)(6) is to enable defendants to challenge the legal sufficiency of complaints without subjecting themselves to discovery."). Here, however, Facebook unashamedly seeks to subject StudiVZ to very far ranging discovery about two broad issues under the guise of "personal jurisdiction," even though it cannot make out a prima facie case that either issue is matters. 1. Facebook Does Not Even Argue General Jurisdiction. Requests for production 31-38 and 40-41 and requests for admissions 6 and 17 relates to StudiVZ's general "contacts" with the "United States." Such requests would relate to establishing that StudiVZ is subject to general personal jurisdiction based on nationwide contacts with the United States under FRCP 4(k)(2), rather than contacts with California specifically. See, e.g. Consolidated Develop. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1292 (11th Cir. 2000). But Facebook did not allege in its original or currently operative complaint that jurisdiction is based on StudiVZ's nationwide contacts. Rather, it alleges jurisdiction based on contacts with "California." (Dkt. No. 1 at 3:3-25; Dkt. No. 140 at 3:2-26).8 And it has not argued for the application of nationwide contacts,
8

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general jurisdiction in opposition to the motions to dismiss. Indeed, in its opposition to the motions to dismiss, Facebook did not argue that StudiVZ was subject to general jurisdiction at all, whether based on California contacts or nationwide contacts. StudiVZ should not be subject to entirely speculative discovery about "contacts" when Facebook has no reason to believe, evidence to show or even allegations that such contacts confer jurisdiction to begin with. 2. The Calder v. Jones "Effects Test" Does Not Apply. Requests for admissions 1-3, 5, 7-15 and 22 and requests for production 39, 48, 49, 54-56 and 63 seek more discovery related to the so-called "access" issue that was the main subject of Facebook's first motion to compel. Accordingly, in an effort to avoid repetition, StudiVZ hereby incorporates by reference the arguments it made in opposition to the first motion to compel. (Dkt. No. 94). In addition, StudiVZ makes the following argument. Facebook relies on the "effects test" of Calder v. Jones as the basis for seeking this "access" discovery. Facebook describes that test as follows: "The Calder effects test has three elements: the defendant must have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm, the brunt of which is suffered -- and which the defendants know is likely to be suffered -- in the forum state." (Dkt. No. 76 at 6:19-22) (emphasis added). Citing this test, Facebook claims that it is entitled to take discovery into any issue related to its allegations of intentional bad acts. But this is exactly why it is a prerequisite to any jurisdiction discovery that a plaintiff first prove a prima facie case of jurisdiction. If a plaintiff could simply allege a claim, then it could force a defendant who may not be subject to jurisdiction to submit to discovery about all issues in a case before having the opportunity to have its motion to dismiss heard, which is exactly what Facebook seeks to do here.
(Continued from previous page) supposed contacts with the United States, but it is not part of Facebook's jurisdiction allegations. And, this new section was raised belatedly, on March 31, 2009, more than five months after the motions to dismiss were filed, long after the originally-scheduled hearing date. 37106-00002/1691182.4 17 STUDIVZ'S OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL

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On the other hand, if Facebook is first required (as it should be) to establish a prima facie case that the effects test even applies, then the discovery would have to be denied because Facebook cannot meet (and does not try to meet) that test. Most obviously, Facebook cannot establish a prima facie case that the brunt of the harm was suffered in this jurisdiction.9 Indeed, Facebook has never made any attempt to show that it suffered the brunt of alleged harm in California or the United States because it is undisputed that it did not. Facebook has made repeated admissions in its pleadings that the brunt of harm was suffered in Germany and Europe. Facebook alleged in its original and amended complaint that it has "been hampered from entering and competing fairly in the European market." (Dkt No. 1, ¶ 41; Dkt. No. 140, ¶ 60) (emphasis added). Facebook acknowledged in its opposition to the motions to dismiss that StudiVZ runs "a German language site that competed directly against Facebook in German speaking countries." (Docket No. 76 at 1:10-11) (emphasis added). Facebook has acknowledged that StudiVZ was developed and launched from Berlin, Germany. (Dkt. No. 1, ¶ 28, Dkt. No. 76 at 3:22-25). Moreover, the Court has previously noted in connection with the May 4, 2009 Order regarding forum non conveniens that the "conduct complained of appears to have occurred principally in Germany" (Dkt. No. 155 at 4:21) (emphasis added) and that the "source" of the alleged infringement is located in "Germany." (Dkt. No. 155 at 5:21-23) (emphasis added).10
9

StudiVZ does not mean to imply by its focus on the "brunt of harm" that Facebook has made out a prima facie case of the first two elements of the Calder effects test either. Indeed, it has not. Facebook has presented bare allegations, conjecture, and hearsay that is, at best, unsubstantiated speculation. Facebook's sole "evidence" is in the form of declarations from its lawyers and hearsay exhibits. On this inadmissible record, Facebook wildly speculates that the two German founders of StudiVZ copied Facebook's website before returning to Germany to form StudiVZ. In other words, even assuming something wrongful occurred from within the United States, Facebook admits that they were not the acts of StudiVZ, which had not even been formed yet. Such flimsy, unsubstantiated evidence is not a prima facie or colorable showing of evidence necessary to establish any right to jurisdictional discovery. See Carefirst of Maryland, supra, 334 F.3d at 402-03 (jurisdictional discovery should be denied when plaintiff "offers only speculation or conclusory allegations").
10

The Court also made an interesting point related to the location of the harm in its May 4, 2009 Order, albeit in connection with the forum non conveniens element of "local interest." It noted that Facebook's argument about local interest "conflates the local interest served by the assertion of adjudicatory versus legislative or prescriptive jurisdiction." In its footnote 5, explaining what it meant by this comment, the Court explained that the only "local interest" was merely adjudicatory (i.e., procedural) in the sense that Facebook wanted the case litigated here because (Continued on next page) 37106-00002/1691182.4 18 STUDIVZ'S OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL

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This case is identical in all relevant respects to Fielding v. Hubert Burda Media, Inc., 2004 WL 532714, Case No. Civ.A.3:03-CV-0872 (N.D. Tex. Feb. 11, 2004). In that case, a Texas citizen sued defendants (German companies that publish German magazines) in Texas over an alleged campaign to impugn plaintiffs' reputations. Although the articles were published by the German media, some statements set forth therein were published in the U.S. Id., *1. Defendants moved to dismiss for lack of personal jurisdiction. Plaintiff opposed, claiming defendants' actions satisfied the "effects" test of Calder v. Jones. The court granted the motion to dismiss because the "bulk of Plaintiffs' harm was suffered in Europe, where Plaintiff Borer lost his job as Swiss Ambassador to Germany and Plaintiff Fielding lost her unborn child." Id., *4. The plaintiffs in Fielding, like Facebook, also tried to rely on the fact that the German magazines had some distribution in Texas. However, the court rejected that argument, noting that "the articles published by Defendants were published in Germany, in the German language" and with less than one tenth of one percent of the magazines at issue are distributed to Texas: "In this case, only a fraction of a percent of Defendants' magazines are distributed in Texas each month. This is a far cry from the twelve percent figure in Calder." Id. at *5. Likewise, less than 1/10th of one percent of StudiVZ's users are identified with California. (Docket No. 47, ¶ 17). This is simply not enough for California to be considered the location of the brunt of the harm. Since Facebook has not established a prima facie case of a required element of the Calder v. Jones effects test, it should not be entitled to rely on that test as a basis to justify its merits-based discovery. /// ///
(Continued from previous page) it is located here. The Court "discern[ed] few legitimate interests to be vindicated by the assertion of adjudicatory jurisdiction for its own sake." (Dkt. No. 155 at 6:12-7:27, fn. 5). Analogizing to personal jurisdiction, brunt of harm similarly cannot be established solely by the fact that the plaintiff suffered some harm in the jurisdiction in which it is a citizen. Fielding v. Hubert Burda Media, Inc., 2004 WL 532714, Case No. Civ.A.3:03-CV0872, at *4 (N.D. Tex. Feb. 11, 2004) ("Although Plaintiffs' reputations might have been damaged in Texas, the bulk of plaintiffs' harm has been suffered in Europe . . . ."). 37106-00002/1691182.4 19 STUDIVZ'S OPPOSITION TO FACEBOOK, INC.'S SECOND MOTION TO COMPEL

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E.

Facebook Could Have Obtained Anything Remotely Related to Jurisdiction from the Second Set of Discovery By Deposing Michael Brehm.

Finally, most of the topics contained in the second set of discovery directed at StudiVZ, and anything related to jurisdiction, could have been explored in detail in the deposition of Michael Brehm. Had Facebook simply taken that deposition, there would have been no need for the second set of discovery. And Facebook would have had this information by January 12, 2009, in time to incorporate into its original opposition. That was the whole reason that the deposition was scheduled for January 12, 2009. But Facebook canceled that deposition without justification, and now seeks to obtain the same information via a motion to compel further responses to written discovery filed over four months later. IV. CONCLUSION For the above reasons, StudiVZ respectfully requests that Facebook's motion be denied in its entirety.

DATED: June 9, 2009

GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP By: /s Stephen S. Smith . STEPHEN S. SMITH Attorneys for Defendants studiVZ Ltd.

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