American Broadcasting Companies, Inc. et al v. Aereo, Inc

Filing 12

ORDER RE AEREO'S MOTION TO QUASH by Judge Paul S. Grewal denying 1 Motion to Quash (psglc2, COURT STAFF) (Filed on 4/10/2013)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 United States District Court For the Northern District of California 8 SAN JOSE DIVISION 11 12 13 14 15 16 17 18 19 20 21 22 AMERICAN BROADCASTING ) COMPANIES, INC., DISNEY ) ENTERPRISES, INC., CBS ) BROADCASTING, INC., CBS STUDIOS ) INC., NBC UNIVERSAL MEDIA, LLC, NBC ) STUDIOS, LLC, UNIVERSAL NETWORK ) TELEVISION, LLC, TELEMUNDO ) NETWORK GROUP, LLC, AND WNJU-TV ) BROADCASTING, LLC, ) ) Plaintiff/Counterclaim ) Defendants, ) ) v. ) ) AEREO, INC., ) ) Defendant/Counterclaim ) Plaintiff ) ) Case No.: CV-12-80300-RMW ORDER RE: DEFENDANT’S MOTION TO QUASH PRODUCTION (Re: Docket No. 1) Defendant Aereo, Inc. (“Aereo”) moves to quash a subpoena demanding the production of 23 documents and information related to its AdWords purchases and Google Analytics information 24 from third-party Google, Inc. (“Google”). For the reasons set forth below, the court DENIES the 25 motion. 26 27 28 1 Case No.: 12-80300-RMW ORDER I. 1 BACKGROUND Plaintiffs are television broadcasting companies that filed complaints against Aereo in the 2 3 Southern District of New York in March 2012. 1 The complaints allege that Aereo infringes 4 Plaintiffs’ copyright by providing technology that allows consumers to access a remote antenna 5 and a remote digital video recorder to record and watch their own recordings of over-the-air 6 broadcast television. 2 For a monthly fee, Aereo provides its subscribers with live or recorded 7 8 transmission of Plaintiffs’ broadcasts to any Internet-connected device. 3 The parties have engaged in discovery related to Plaintiffs’ claims of both direct and 9 United States District Court For the Northern District of California 10 indirect infringement and Aereo’s fair use defense. 4 On September 24, 2012, Plaintiffs served 11 Aereo with their second request for production of documents and electronically stored information, 12 seeking a broad range of documents and information, including information concerning consumers’ 13 use of the Aereo technology and Aereo’s marketing and business plans. 5 Aereo claims that it has, 14 to date, produced over 114,000 pages of documents in addition to the over 40,000 pages of 15 16 documents produced during the preliminary injunction phase. 6 It also apparently produced a copy 17 of the source code for the entire Aereo system, and over 80 GB of data from its logs and 18 databases. 7 Aereo has indicated that documents related to their Google AdWords purchases have 19 20 1 21 See Dkt. No. 8, at 1, n. 1 (Plaintiffs consist of WNET, THIRDTEEN, Fox Television Stations, Inc., Twentieth Century Fox film corporation, WPIX, Inc., Univision Television Group, Inc., The Univision Network Limited Partnership, and Public Broadcasting Service.) 22 2 WNET, et al. v. Aereo, Inc., Case No. 12-cv-1543 (S.D.N.Y. filed Mar. 1, 2012). 23 3 See Dkt. No. 8. 24 4 See id. 5 See Dkt. No. 2. 6 See id. 7 See id. 25 26 27 28 2 Case No.: 12-80300-RMW ORDER 1 2 been produced among the documents. 8 Plaintiffs claim that a search for the terms “Adword” and “Google” through Aereo documents did not reveal Aereo’s Adwords purchases. 9 In May 2012, the parties entered into an Amended Stipulated Protective Order (“Protective 3 4 Order”) issued by the Southern District of New York governing the treatment of confidential 5 proprietary information that would be produced during the discovery process. 10 The Protective 6 Order remains in effect. 11 7 On December 7, 2012, Plaintiffs served Google a subpoena seeking the production of “[a]ll 8 9 documents concerning Aereo or the Aereo Service . . . (i) all Google Adwords purchases made by United States District Court For the Northern District of California 10 Aereo, (ii) all documents related to the Google Analytics account for Aereo . . . (iii) all reports 11 reflecting Google Analytic data concerning Aereo.” 12 Google relayed to Plaintiffs’ counsel its 12 willingness to produce documents in response to the subpoena if Aereo did not object. 13 Now 13 before the court is Aereo’s motion to quash the subpoena served on Google. 14 14 II. LEGAL STANDARDS 15 Litigants may serve a subpoena requiring a non-party “to produce documents, electronically 16 17 stored information, or tangible things” pursuant to Fed. R. Civ. P. 45. 15 The subpoena is subject to 18 the relevance requirements set forth in Fed. R. Civ. P. Rule 26(b). 16 Rule 45 also provides that 19 8 See Dkt. No. 10. 9 See Dkt. No. 8. 10 See Dkt. No. 11 See Dkt. No. 8. 12 See id. 13 See Dkt. No. 8. 26 14 See Dkt. No. 1. 27 15 Fed. R. Civ. P. 45(a)(1)(C). 28 16 Fed. R. Civ. P. 26(b). 20 21 22 23 24 25 3 Case No.: 12-80300-RMW ORDER 1 “[o]n timely motion, the issuing court must quash or modify a subpoena that . . . (iv) subjects a 2 person to undue burden.” 17 The issuing court may also quash the subpoena upon determination 3 that the subpoena requires disclosure of “a trade secret or other confidential research, development, 4 or commercial information.” 18 A party challenging a subpoena by claiming a privilege must 5 sufficiently describe the withheld material so that the parties and the court can assess the claim. 19 6 The party moving to quash a subpoena bears the burden of persuasion. 20 7 III. 8 DISCUSSION The parties dispute over (1) whether Aereo has standing to move to quash production of 9 United States District Court For the Northern District of California 10 documents from a non-party such as Google; (2) whether the Protective Order is sufficient to 11 protect the disclosure of Aereo’s confidential proprietary information and; (3) whether production 12 of documents related to Aereo’s AdWords purchase and Google Analytics is duplicative, 13 burdensome and irrelevant. 14 A. Standing 15 Aereo seeks to quash the subpoena because it claims that the subpoena seeks production of 16 17 its confidential and proprietary information. 21 Plaintiffs argue that Aereo lacks standing to move to 18 quash the subpoena on the ground of undue burden on the producing non-party because Aereo is 19 not the subject of the subpoena. 22 20 21 22 17 Fed. R. Civ. P. 45(c)(3)(A). 23 18 Fed. R. Civ. P. 45(c)(3)(B). 24 19 Fed. R. Civ. P. 45(d)(2). 20 Green v. Baca, 226 F.R.D. 624, 653 (C.D. Cal. 2005). 21 Dkt. No. 1, at 4, ll. 11-12. 22 Dkt. No. 8, at 3, ll. 24-25. 25 26 27 28 4 Case No.: 12-80300-RMW ORDER As a general rule, a party does not have standing to quash a subpoena issued to a non- 1 2 party. 23 But as the court pointed out in Knoll v. Moderno, Inc., “a party moving to quash a non- 3 party subpoena has standing when the party has a personal right or privilege in the information 4 sought to be disclosed.” 24 The movant must demonstrate, for example, “that they possess a 5 cognizable privacy interest in the . . . documents and communications sought by the subpoena” 6 and, thus, “have standing to move to quash the subpoena seeking those documents.” 25 7 The court finds that the facts here are indistinguishable from those in Knoll, and therefore 8 9 Aereo has standing as to the content of the documents and information sought by the subpoena. As United States District Court For the Northern District of California 10 in Knoll, the information here is related to Aereo’s AdWord purchases and Google Analytics 11 account and so can be Aereo’s proprietary information regarding its strategies. Aereo, thus, has 12 established the requisite interest in the information to have standing to object to the production. 13 In response, Plaintiffs point to Kremen v. Cohen, in which the court held that a “party does 14 not have standing to quash a subpoena on the basis that the non-party recipient of the subpoena 15 16 would be subjected to an undue burden when the non-party has failed to object.” 26 Aereo, 17 however, did not argue for standing on the basis of undue burden alone. 27 The court in Kremen 18 recognized that “a party may seek an order [to quash] if it believes its own interest is jeopardized 19 by discovery sought from a third person.” 28 Aereo accordingly has standing at least regarding the 20 content of the information being sought by Plaintiffs’ subpoena. 21 22 23 23 See Malibu Media, LLC v. Does 1–25, Case No. 12–80193-LAB(DHB), 2012 WL 2367555, at *2 (S.D.Cal. June 21, 2012). Case No. 12–8019- MISC SI, 2012 WL 4466543, at *2 (N.D. Cal. 2012). 25 Id. 26 Kremen v. Cohen, Case No. 11-05411-LHK (HRL), 2012 WL 2277857, at *3 (N.D. Cal. 2012). 27 Dkt. No. 1, at 4-5. 28 24 24 Kremen, 2012 WL 2277857, at *3. 25 26 27 28 5 Case No.: 12-80300-RMW ORDER 1 B. Sufficiency of the Protective Order “In deciding whether to quash the subpoena, the [c]ourt must balance the need for the 2 3 particular information against the privacy right asserted. In making that determination, the [c]ourt 4 also considers whether a protective order addresses the asserted privacy concerns.” 29 5 6 7 8 9 Plaintiffs point out that the Protective Order is in place to allow the parties and any third parties to designate the information to be produced as confidential and thereby prevent the disclosure of proprietary information. 30 The parties do not dispute the application of the Protective Order to the production of Aereo’s source code, service usage data and technical documents. 31 United States District Court For the Northern District of California 10 Aereo nevertheless claims that the Protective Order does not provide adequate protection, because 11 Google would not have the same interests in protecting confidential information as the party to 12 whom the information belongs. 32 13 14 Much like the court in Knoll, this court finds that Aereo has “failed to demonstrate that the protective order will not sufficiently address the asserted privacy interests.” 33 Given that the 15 16 17 Protective Order allows active screening of the documents to be produced by both parties, and that the party that opposes the production of the information may do so prior to production, 34 Aereo is 18 19 20 29 Id. (internal citation omitted). 21 30 See Dkt. No. 8. 22 31 See Dkt. No. 1; Dkt. No. 8. 23 32 Dkt. No. 10. 24 33 Knoll, 2012 WL 4466543, at *2. 25 34 26 27 28 Dkt. No. 2-1, ¶ 5 (“Documents, material or information that cannot be stamped with a legend can be designated as “Confidential” or “Highly Confidential” by furnishing a written notice to the undersigned counsel for the party receiving such documents, material or information at the time of production, identifying the documents, material or information as “Confidential” or “Highly Confidential.”). 6 Case No.: 12-80300-RMW ORDER 1 able to intercept or retrieve any confidential document prior to production. 35 That is, the Protective 2 Order allows both parties to designate any document to be produced as confidential or highly 3 confidential. 36 Aereo offers no specific explanation regarding how these measures fail to safeguard 4 information produced by Google. 5 6 Because the Protective Order addresses any privacy concerns Aereo raises, the court finds Aereo’s argument does not require quashing the subpoena. 7 8 C. Relevance and Undue Burden Balancing. Rule 26 also specifies that “[a]ll discovery is subject to the limitations imposed by Rule 9 United States District Court For the Northern District of California 10 26(b)(2)(i), (ii), and (iii)” which requires that discovery methods be limited where “ the discovery 11 sought is unreasonably cumulative or duplicative, or is obtainable from some source that is more 12 convenient, less burdensome, or less expensive.” 37 “Thus, a court determining the propriety of a 13 14 subpoena balances the relevance of the discovery sought, the requesting party's need, and the potential hardship to the party subject to the subpoena.” 38 15 Moreover, Rule 26(b) allows the discovery of non-privileged material “relevant to the claim 16 17 or defense of any party,” and the “relevant information need not be admissible at trial if the 18 discovery appears reasonably calculated to lead to the discovery of admissible evidence.” 39 19 Relevancy, for the purposes of discovery, is defined broadly, although it is not without “ultimate 20 and necessary boundaries.” 40 21 35 ¶ 6, 16. 36 ¶ 14. 24 37 Gonzales v. Google, Inc., 234 F.R.D. 674, 80 (N.D. Cal. 2006). 25 38 Id. 26 39 Gonzales, 234 F.R.D. at 679-80. 27 40 22 23 28 Pacific Gas & Elec., Co. v. Lynch, Case No. 01-3023 VRW, 2002 WL 32812098, at *1 (N.D. Cal. August 19, 2002) (citing Hickman v. Taylor, 329 U.S. 495, 507 (1947)). 7 Case No.: 12-80300-RMW ORDER Aereo contends that documents concerning Aereo’s marketing plan would be irrelevant to 1 2 the claims in this case, “as they have no bearing on how the copies are made and to whom the 3 performances are transmitted.” 41 Aereo further asserts that the marketing plan documents are 4 irrelevant to copyright infringement claims because they reveal nothing about how consumers use 5 its technology or how the use would affect the potential market for Plaintiffs’ works. 42 In addition, 6 7 8 Aereo argues that the subpoena is duplicative because it already produced thousands of documents concerning its marketing strategies including its use of AdWords. 43 Plaintiffs respond that the information sought from Google would relate to “how Aereo is 9 United States District Court For the Northern District of California 10 marketing itself and bears directly on the issue of the impacted markets and market harm, which is 11 a critical factor in Aereo’s asserted fair use defense.” 44 Regarding the issue of undue burden, 12 Plaintiffs points out that no burden showing has been made by Aereo, and that Google does not 13 object to the production of the requested documents. 45 14 As to the issue of the duplicativeness of the subpoena, Plaintiffs argue that Aereo has yet to 15 16 produce the same documents asked for in the subpoena. 46 But even if Aereo had, or will, produce 17 18 19 41 Dkt. No. 1, at 6. 42 Dkt. No. 10, at 3. 43 Dkt. No. 10. 20 21 22 44 23 24 25 26 Dkt. No. 8, at 7-8 (citing Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994) (“The fourth fair use factor is ‘the effect of the use upon the potential market for or value of the copyrighted work.’ It requires courts to consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also ‘whether unrestricted and widespread conduct of the sort engaged in by the defendant ... would result in a substantially adverse impact on the potential market’ for the original.”)). 45 See id. 46 See id. 27 28 8 Case No.: 12-80300-RMW ORDER 1 2 documents requested in the subpoena to Google, Plaintiffs claim that they nevertheless are entitled to those documents from Google to verify any similar information provided by Aereo. 47 3 The court agrees that no issue of undue burden exists in this case. “The burden of showing 4 that a subpoena is unreasonable and oppressive is upon the party to whom it is directed.” 48 In this 5 case, the subpoena is directed to Google, not Aereo, and Google has not shown any unwillingness 6 to produce the documents requested on the grounds of the unreasonableness or oppressiveness. 7 8 Hence, no issue of undue burden exists. As to the duplicativeness argument, the court finds that Aereo has not met its burden of 9 United States District Court For the Northern District of California 10 showing that the requested discovery would be duplicative. Other than attorneys’ affidavits, Aereo 11 proffered no evidence, such as examples of produced documents, to show that the information 12 sought to be produced has already been produced. The court in Knoll found such statements to be 13 insufficient for the showing of duplicative discovery and this court agrees with that reasoning. 49 14 On the issue of relevancy, the court finds that the documents sought from Google would be 15 16 relevant to Aereo’s fair use defense and therefore discoverable. 50 According to the fair use factors 17 enumerated in Campbell v. Acuff-Rose Music, “the extent of market harm caused by the particular 18 actions of the alleged infringer” needs to be established. 51 Plaintiffs have articulated that the 19 information regarding the internet traffic flow and Aereo users’ access provided in the Google 20 Analytics information would demonstrate the impact on the potential market, which is relevant to 21 22 23 47 Dkt. No. 8, at 6-7. 24 48 Goodman v. United States, 369 F.2d 166, 169 (9th Cir. 1966). 49 See Knoll, 2012 WL 4466543, at *2. 50 See Fed. R. Civ. P. 26(b). 51 Acuff-Rose Music, Inc., 510 U.S. at 587. 25 26 27 28 9 Case No.: 12-80300-RMW ORDER 1 Aereo’s fair use defense. 52 Under the broad definition of relevance in Rule 26(b), Plaintiffs’ 2 argument that the information can establish market harm would make the information relevant. 53 3 The type of purchases Aereo made on AdWords can further allow Plaintiffs to uncover whether 4 Aereo engaged in diverting relevant consumers within Plaintiffs’ potential market to Aereo’s 5 website. 54 Aereo’s argument that Google Analytics does not shed light on consumers’ use of 6 Aereo technology fails to show how Plaintiffs’ requested information will not be relevant to market 7 8 harm. Aereo’s motion to quash the subpoena is DENIED. 9 United States District Court For the Northern District of California 10 11 IT IS SO ORDERED. Dated: April 10, 2013 _________________________________ PAUL S. GREWAL United States Magistrate Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 52 See Dkt. No. 8. 53 City of Rialto v. U.S. Dept. of Def., 492 F. Supp. 2d 1193, 1202 (C.D. Cal. 2007) (“Relevance is broadly construed and a request for discovery should be considered relevant if there is any possibility that the information sought may be relevant to the claim or defense of any party.”). 54 WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594, 620 (S.D.N.Y. 2011) aff'd, 691 F.3d 275 (2d Cir. 2012) (determining that ivi service inflicted irreparable harm on broadcaster plaintiffs by “diverting customers who would otherwise watch their local stations, [and, therefore, ivi was] weakening plaintiffs' negotiating position with advertisers.”). 10 Case No.: 12-80300-RMW ORDER

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