Disney Enterprises, Inc. et al v. Hotfile Corp. et al

Filing 146

ORDER granting in part and denying in part 110 Motion to Compel. Signed by Judge Adalberto Jordan on 9/14/2011. (lh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 11-20427-CIV-JORDAN
DISNEY ENTERPRISES, INC. et al.,

)
)
Plaintiffs
)
vs.
)
)
HOTFILE CORP. et al.,
)
Defendants
)
____________________________________ )
ORDER ON PLAINTIFFS’ MOTION TO COMPEL
As explained below, Disney Enterprises, Inc.’s, Twentieth Century Fox Film Corporation’s,
Universal City Studios Productions LLLP’s, Columbia Pictures Industries, Inc.’s, and Warner Bros.
Entertainment Inc.’s motion to compel responses from Lemuria Communications, Inc. [D.E. 110]
is GRANTED IN PART AND DENIED IN PART .
First, the movie studios request “[a]ll documents reflecting the use of Hotfile service by any
employee, owner, shareholder, principal, officer, director, agent, business partner, or contractor of
any Defendant or Hotfile Entity” [D.E. 110 at 3]. Hotfile and Mr. Titov believe the request to be too
broad and unduly burdensome. I do not find this argument convincing.
Hotfile and Mr. Titov complain that the movie studios define “employee, owner, shareholder,
principal, officer, director, agent, business partner, or contractor” broadly, but Hotfile and Mr. Titov
note that Hotfile does not have “employees.” Instead, it hires third parties and independent
contractors to do work. Given the lack of a defined workforce, Hotfile and Mr. Titov cannot
complain of the movie studios’ expansive definition. Similarly, because Hotfile does not issue
company-supplied computers (its personnel must use personal computers), Hotfile and Mr. Titov
cannot complain that they must search their employees’ personal computers for this information. So
long as the third parties, independent contractors, and employees used their personal computers
while doing work on Hotfile’s behalf, the information is discoverable. See Riddell Sports Inc. v.
Brooks, 158 F.R.D. 555, 558–59 (S.D.N.Y. 1994). Thus, by September 26, 2011, Hotfile and Mr.
Titov will produce the content files uploaded and downloaded by their personnel.

The movie studios also request that Hotfile provide it with a list naming all potential
investors in Hotfile and documents concerning the presentations, solicitations, and materials
provided to potential investors. Again claiming a trade secret, Hotfile and Mr. Titov do not want to
produce this information. I do not, however, find that Hotfile or Mr. Titov will be harmed by the
disclosure of this information.
In an affidavit, Mr. Titov asserts that Hotfile may be harmed by this disclosure because
disclosure “might deter the potential investor from being willing to invest in Hotfile” [D.E. 130-1
¶ 5]. This sort of nebulous harm, however, is insufficient to prevent disclosure. A party, rather, must
demonstrate that “disclosure will work a clearly defined and very serious injury.” Empire of
Carolina, Inc. v. Mackle, 108 F.R.D. 323, 326 (S.D. Fla. 1985) (quoting Citicorp v. Interbank Card
Ass’n, 478 F. Supp. 756, 765 (S.D.N.Y. 1979)). That disclosing the name of investors and materials
shown to investors “might” deter future investments is insufficient. In contrast, disclosure of
Hotfile’s source code or schema could allow anyone to plug the code into a compiler and, within
hours, have access to thousands of man-hours worth of work. By September 26, 2011, therefore,
Hotfile and Mr. Titov shall produce the identities of potential investors and documents concerning
presentations, solicitations, materials provided to, and communications with potential investors.
In an interrogatory, the movie studios asked that Hotfile and Mr. Titov “[i]dentify each user
whose access to the Hotfile website any Defendant or Hotfile Entity has ever terminated, limited,
suspended, or otherwise penalized” [D.E. 110 at 10]. The interrogatory asks that Hotfile and Mr.
Titov explain the specific reasons for the terminations.
Hotfile and Mr. Titov responded by providing a spreadsheet. The spreadsheet contains all
terminations on hotfile.com. Next to those terminations appear explanations for the termination.
Among the terms, the spreadsheet uses terms like “cheater checks,” “cp,” “spam,” “nazi,” and
“Repeated Copyright Infringement” [D.E. 112-4 at 3–5]. Hotfile and Mr. Titov believe this
spreadsheet suffices under Rule 33(d), which allows a party to answer an interrogatory through its
business records. The movie studios retort that the spreadsheet is insufficient because it contains
incomprehensible terms like “nazi.” Hotfile and Mr. Titov counter that the spreadsheet lists
“Repeated

Copyright

Infringement” as

a reason

for termination.

And

the

other

terminations—including “nazi” and “cp”—were not based on copyright infringement. While the
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spreadsheet may suffice under Rule 33(d), the movie studios have no way of verifying this without
a legend explaining what terms like “cp” or “nazi” stand for. Accordingly, by September 26, 2011,
Hotfile and Mr. Titov shall provide the movie studios with a legend explaining those terms that are
not facially obvious.
Next, the movie studios request more information about Hotfile’s relationship with Hotfile
operators. Hotfile and Mr. Titov object to this request as cumulative. Specifically, Mr. Titov and
Hotfile believe that their response to a similar interrogatory and their general production of
documents should be enough. But an interrogatory and a request for production of document are not
the same thing. And Mr. Titov’s and Hotfile’s production of documents in other requests is not
necessarily inclusive of all documents related to Hotfile’s relationship with Hotfile operators. Hotfile
and Mr. Titov contend that the term “Hotfile Entity,” defined, essentially, as any entity, is overbroad.
Though the term is broad, the movie studios need to discover what other entities may have played
a role in Hotfile’s alleged infringement—that is, the movie studios can seek discovery about the
“Doe” defendants that supposedly helped and contributed to the infringement. See United States ex
rel. Heater v. Holy Cross Hosp., Inc., 510 F. Supp. 2d 1027, 1036 (S.D. Fla. 2007). Therefore, I find
Mr. Titov’s and Hotfile’s argument unpersuasive, and, by September 26, 2011, they must produce
all documents requested by this discovery request.
The movie studios finally seek that Hotfile Corp. and Anton Titov produce Hotfile’s schema
for all databases used in operation of www.hotfile.com. The schema is, essentially, the database
structure of hotfile.com. Claiming that the schema is a trade secret and it is not necessary to the
movie studios’ claims, Hotfile and Mr. Titov assert that the movie studios should not be given access
to the schema.1
As I have previously explained in this case, “there is no absolute privilege that immunizes
trade secrets and similar confidential information from discovery.” Empire of Carolina, 108 F.R.D.
at 326. When seeking protection of a trade secret from a discovery request, a party must first show
that the information requested constitutes a trade secret. Then the party must show that the disclosure

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The movie studios, in their reply, assert that they do not seek the schema’s source code, but
the request for production contravenes this assertion. The movie studios asked for the “[s]chema for
all databases used in operation of all versions of the Hotfile Website” [D.E. 110 at 15].
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of that trade secret would harm it. It then becomes the burden of the party seeking the trade secret
to show that the trade secret’s production is both relevant and necessary to the lawsuit. See id.
Hotfile and Mr. Titov have shown that the schema is a trade secret. It took thousands of manhours to code the schema and years to refine it [D.E. 130-1 ¶ 7]. And, like the source code, anyone
with access to the schema would have automatic access to all that labor.
Because the schema contains information showing how Hotfile collects data and therefore
relevant to Hotfile’s and Mr. Titov’s knowledge of illegal activity on hotfile.com. It also asserts that
the information is necessary because it shows data not visible through other means.
This information is relevant, but I cannot agree with its characterization as “necessary.” As
Hotfile and Mr. Titov underscore, I have already ordered them to produce their content and user data,
and this data should certainly show Hotfile’s and Mr. Titov’s knowledge of illegal activity. I do not
find the movie studios’ request to be necessary and therefore deny their motion to compel the
schema. See Viacom Int’l, Inc. v. Youtube Inc., 253 F.R.D. 256, 263–64 (S.D.N.Y. 2008) (denying
motion for production of schema by Google).
DONE and ORDERED in chambers in Miami, Florida, this 14th day of September, 2011.

_______________________
Adalberto Jordan
United States District Judge
Copy to:

All counsel of record

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