Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 1614

MOTION for Leave to File Sur-Reply to Samsung's Motion for De Novo Determination of Dispositive Matter Referred to Magistrate Judge, In the Alternative, Motion for Relief from Nondispositive Pretrial Order of Magistrate Judge filed by Apple Inc.. (Attachments: # 1 Apple's Sur-Reply to Samsung's Motion)(Jacobs, Michael) (Filed on 8/8/2012)

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HAROLD J. MCELHINNY (CA SBN 66781)
[e-mail]
MICHAEL A. JACOBS (CA SBN 111664)
[e-mail]
RACHEL KREVANS (CA SBN 116421)
[e-mail]
JENNIFER LEE TAYLOR (CA SBN 161368)
[e-mail]
ALISON M. TUCHER (CA SBN 171363)
[e-mail]
RICHARD S.J. HUNG (CA SBN 197425)
[e-mail]
JASON R. BARTLETT (CA SBN 214530)
[e-mail]
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: [phone]
Facsimile: [phone]

WILLIAM F. LEE
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
60 State Street
Boston, MA 02109
Telephone: [phone]
Facsimile: [phone]
MARK D. SELWYN (SBN 244180)
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
950 Page Mill Road
Palo Alto, California 94304
Telephone: [phone]
Facsimile: [phone]

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Attorneys for Plaintiff and
Counterclaim-Defendant APPLE INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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APPLE INC., a California corporation,
Plaintiff,

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v.
SAMSUNG ELECTRONICS CO., LTD., a
Korean business entity; SAMSUNG
ELECTRONICS AMERICA, INC., a New York
corporation; SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC, a
Delaware limited liability company,

Case No.

11-cv-01846-LHK (PSG)

APPLE’S SUR-REPLY TO
SAMSUNG’S MOTION FOR
DE NOVO DETERMINATION OF
DISPOSITIVE MATTER
REFERRED TO MAGISTRATE
JUDGE, IN THE ALTERNATIVE,
MOTION FOR RELIEF FROM
NONDISPOSITIVE PRETRIAL
ORDER OF MAGISTRATE
JUDGE

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Defendants.
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APPLE’S SUR-REPLY TO MOT. FOR DE NOVO DETERMIN./MOT. FOR RELIEF FROM NON-DISPOSITIVE ORDER BY MAG.
CASE NO. 11-CV-01846-LHK (PSG)

sf-3180402

Samsung has wisely abandoned its original argument for de novo review, as Judge

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Grewal’s Order is plainly not a “dispositive motion.” (See Dkt. No. 1392 (Mot.) at 2.) But

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equally unavailing is Samsung’s new theory that Judge Grewal lacks inherent power to impose

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sanctions because he is not an Article III judge. (See Dkt. No. 1579 (Reply) at 7.) This theory

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relies on a clear misreading of Ninth Circuit law and on an unpublished Fourth Circuit case that is

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distinguishable on its facts. Judge Grewal’s Order is reviewable only for clear error, and he made

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none.1

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Samsung’s lead case for the proposition that Judge Grewal lacks inherent power to impose

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sanctions is Rainbow Magazine, Inc. v. Unified Capital Corp., 77 F.3d 278 (9th Cir. 1996). But

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Rainbow Magazine held that Article I bankruptcy court judges do have inherent power to issue

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sanctions. Id. at 284. There, the Ninth Circuit relied on Chambers v. NASCO, Inc., 501 U.S. 32,

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43 (1991), which “recognizes that courts created by Congress have inherent powers, unless

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Congress intentionally restricts those powers,” Rainbow Magazine, 77 F.3d at 284. “[A]bsent

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congressional restriction, inherent powers exist within a court as part of the nature of the

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institution,” Rainbow Magazine, 77 F.3d at 285.

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Section 636 of the Federal Magistrates Act confers a magistrate judge’s powers.

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28 U.S.C. § 636. Nothing in Section 636 “abrogate[s] or restrict[s] the inherent power to

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sanction.” Rainbow Magazine, 77 F.3d at 285. Consistent with magistrate judges’ retention of

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inherent power, the portion of Section 636 that concerns magistrate judges’ civil contempt

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authority provides that the section “shall not be construed to limit the authority of a magistrate

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judge to order sanctions under any other statute, the Federal Rules of Civil Procedure, or the

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Federal Rules of Criminal Procedure.” 28 U.S.C. § 636(e)(4). As in Rainbow Magazine,

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Section 636(e)(4) “impliedly recognize[s] that [magistrate judges] have the inherent power to

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Although this Sur-Reply addresses only the standard of review, Apple disagrees with
many other statements in Samsung’s Reply, including any suggestion that Apple’s August 2010
presentation to Samsung was limited to utility patents or that Samsung’s litigation-hold notice in
August went only to lower-level engineers. (See, e.g., PX52 (August 2010 presentation); Dkt.
No. 128 (Lutton Decl., filed under seal) ¶¶ 2-4; Dkt. No. 1047-2 (Reply) at 4 and Dkt. No. 895-1
(Mot.) at 4-5 (Samsung repeatedly represents that August litigation-hold notice went to lead
designer Minhyouk Lee and apex witness Won Pyo Hong).)
APPLE’S SUR-REPLY TO MOT. FOR DE NOVO DETERMIN./MOT. FOR RELIEF FROM NON-DISPOSITIVE ORDER BY MAG.
CASE NO. 11-CV-01846-LHK (PSG)

sf-3180402

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sanction that Chambers recognized exists within Article III courts.” Rainbow Magazine, 77 F.3d

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at 284.

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Samsung relies on National Labor Relations Board v. A-Plus Roofing, Inc. for the

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proposition that “federal magistrates are creatures of statute, and so is their jurisdiction,” 39 F.3d

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1410, 1415 (9th Cir. 1994) (Dkt. No. 1579 at 2). But that principle does not limit the inherent

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power to sanction. Even as to courts “created by act of Congress, . . . we do not lightly assume

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that Congress has intended to depart from established principles such as the scope of a court’s

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inherent power.” Chambers, 501 U.S. at 47 (citation omitted). Moreover, A-Plus Roofing did not

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address a magistrate judge’s power to issue sanctions in civil actions; it addressed whether a

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magistrate judge has authority to initiate and preside over criminal contempt proceedings.

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National Labor, 39 F.3d at 1415-1417.

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Finally, Samsung relies heavily on Reddick v. White, an unreported per curiam decision

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from the Fourth Circuit holding that a magistrate judge’s order denying sanctions against a non-

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party was subject to de novo review. 456 F. App’x 191 (4th Cir. 2011). That decision is readily

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distinguishable, as the magistrate judge’s order was “dispositive” of the only claim against the

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non-party, an individual who had made threatening statements against one of the lawyers while

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the litigation was pending. Id. at 193. The underlying litigation settled before the magistrate

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judge’s order issued. Id. Here, Judge Grewal’s order granting an adverse inference instruction

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issued against a party, before conclusion of this case, consistent with a proper exercise of his

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inherent power to issue sanctions. Reddick is thus inapposite.

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Accordingly, de novo review is neither necessary nor permitted. The Court should review

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for clear error, and Judge Grewal’s order granting an adverse inference jury instruction for

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Samsung’s spoliation of evidence should be affirmed.

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APPLE’S SUR-REPLY TO MOT. FOR DE NOVO DETERMIN./MOT. FOR RELIEF FROM NON-DISPOSITIVE ORDER BY MAG.
CASE NO. 11-CV-01846-LHK (PSG)

sf-3180402

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Dated: August 8, 2012

MORRISON & FOERSTER LLP

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By:

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/s/ Michael A. Jacobs
Michael A. Jacobs
Attorneys for Plaintiff
APPLE INC.

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APPLE’S SUR-REPLY TO MOT. FOR DE NOVO DETERMIN./MOT. FOR RELIEF FROM NON-DISPOSITIVE ORDER BY MAG.
CASE NO. 11-CV-01846-LHK (PSG)

sf-3180402

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