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

Filing 172

RESPONSE in Opposition re 164 MOTION to Compel Discovery from Plaintiff and Counter-Defendant Warner Bros. Entertainment Inc. of Warner's Takedown Investigation and Memorandum of Law filed by Warner Bros. Entertainment Inc.. (Attachments: # 1 Affidavit Declaration of Luke Platzer in Support of Warner's Opposition to Motion to Compel, # 2 Exhibit A to Declaration)(Stetson, Karen)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-20427-WILLIAMS/TURNOFF

DISNEY ENTERPRISES, INC.,
TWENTIETH CENTURY FOX FILM CORPORATION,
UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP,
COLUMBIA PICTURES INDUSTRIES, INC., and
WARNER BROS. ENTERTAINMENT INC.,
Plaintiffs,
v.
HOTFILE CORP., ANTON TITOV, and
DOES 1-10.
Defendants.
/
HOTFILE CORP.,
Counterclaimant,
v.
WARNER BROS. ENTERTAINMENT INC.,
Counterdefendant.
/

OPPOSITION OF WARNER BROS. ENTERTAINMENT INC.
TO HOTFILE CORP.’S MOTION TO COMPEL DISCOVERY FROM PLAINTIFF AND
COUNTERDEFENDANT WARNER BROS. ENTERTAINMENT INC. OF WARNER’S
TAKEDOWN INVESTIGATIONS

64049.1

INTRODUCTION
When Hotfile Corp. (“Hotfile”) sued Warner Bros. Entertainment, Inc. (“Warner”) in
August of this year, Warner’s counsel did what any responsible attorney would do in such a
situation: direct an investigation into Hotfile’s allegations against Warner, specifically, into
Hotfile’s claim that Warner had sent mistaken notifications of copyright infringement to Hotfile.
This type of counsel-directed investigation is a routine, and expected, element of any competent
defense. And the law treats such counsel-directed investigations in response to litigation as
attorney work product protected from disclosure. Otherwise, attorneys defending litigation
would always be faced with the untenable prospect that their efforts to analyze the claims against
their clients would run the risk of simultaneously creating and organizing evidence against their
clients – as well as allowing opposing counsel to free-ride off their work and analysis. Hotfile’s
demand that Warner turn over the results of counsel’s investigation and analysis of Hotfile’s
Counterclaim that it undertook in August 2011, therefore, strikes at the heart of attorney work
product protection and should be denied.
First, Warner must take issue with Hotfile’s argument that Warner is seeking to withhold
facts. That is just plain wrong. Warner produced all relevant facts, including all “facts” related
to the counsel-directed analysis. Counsel for Warner instructed as to a single line of questioning
in the entire deposition, because the line of questioning asked for counsel’s work product. What
Hotfile wants are not the “facts” about Warner’s takedown notices to Hotfile, but rather
Warner’s work product “analysis” of those facts – i.e., whether, in the judgment of Warner’s
counsel’s designees, certain takedown notices may have been sent in error. Analyses are not
facts. The analysis at issue is attorney work product.
For perspective, in the main case, Plaintiffs accuse Hotfile of fostering massive
infringement through its website. One would expect that, in response to that claim, Defendants’
counsel directed analyses, with the help of Hotfile personnel, to assess the level of infringement
on the Hotfile website. If Plaintiffs sought to compel the results of those analyses, Hotfile would
of course object on the basis of work product. And if Plaintiffs argued that the level of
infringement or the identify of infringing files on the Hotfile website are just “facts” not subject
to work product protection, Hotfile’s counsel would undoubtedly mock those arguments as
frivolous, arguing, as Warner does here, that those are not “facts” but “conclusions” and the
work product of an analysis. Defendants would tell Plaintiffs to go conduct their own analyses
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of infringement on Hotfile, arguing that Plaintiffs have access to all the files and data that are the
facts from which such an analysis would proceed. That is in fact what Plaintiffs did.
It is also what Hotfile did here. Hotfile can and indeed has performed the same analysis
as that directed by Warner’s counsel, using the same underlying facts. Hotfile itself has the
content files that it contends were erroneously taken down. Hotfile analyzed all the files noticed
for takedown by Warner and included over 800 of them in its Counterclaim. After undertaking
months of its own analysis, Hotfile filed an initial counterclaim, then a first amended
counterclaim, and finally a second amended counterclaim. Now, Hotfile seemingly just wants to
see whether Warner’s counsel’s analysis identified any apparent errors in Warner’s notices that
Hotfile’s counsel’s own analysis did not. That is not a proper basis to invade attorney work
product.
Moreover, by stipulation of the parties and Order of this Court, the list of files appended
to Hotfile’s current Counterclaim constitutes the “definitive” list of files that Hotfile contends
violate DMCA § 512(f). See Joint Motion and Memorandum of Law of the Parties for Voluntary
Dismissal of Second and Third Counts of Hotfile’s First Amended Counterclaim and for
Amendment of First Count (Dkt. No. 151) at 3, ¶ 4. Thus, Hotfile seeks information that is not
only work product, but is rendered irrelevant by its stipulation. Hotfile is not permitted to claim
that any files, other than those in the exhibits to its current Counterclaim, violate DMCA §
512(f).
Second, Warner has not put its counsel’s work product analysis “in issue” or tried to rely
on it as part of its defense, and Hotfile’s argument to the contrary distorts the facts and the
relevant timeline. Hotfile argues that Warner has injected counsel’s investigation into the case
by claiming that Warner had a “good faith” belief that its notices were accurate. But Warner’s
counsel-directed investigation happened after Warner had already sent the takedown notices of
which Hotfile complains, not before. Under DMCA § 512(f), Warner’s knowledge is judged at
the time it sent the notices in question, for it is then that Warner made the representation that
Hotfile contends was “knowingly” false. Counsel’s work product analysis, which was conducted
after the filing of the Counterclaim, cannot have any bearing on Warner’s state of knowledge
before the Counterclaim.
In any event, Warner did not, and does not, contend that its faith in its antipiracy system
was in any way based on the results of the counsel-directed investigation. Rather, that
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contention rests on the fact that Warner has, from the very beginning of its antipiracy system,
continually sought to identify errors and always uses any information gleaned to improve the
system and ensure as best possible that the error does not recur. That longstanding practice – not
its counsel’s work product – is what Mr. Kaplan referred to as bolstering Warner’s confidence in
its system. And Warner did produce its documents and seat a corporate representative to testify
about that longstanding practice, including any errors discovered and curative actions taken, both
before and after the filing of the Counterclaim. The documents subject to Hotfile’s Motion that
Warner withheld on the basis of work product were the memorialization of its counsel-directed
investigation and related documents. Hotfile’s attempt to invade counsel’s work product is
improper and, respectfully, should be rejected.
ARGUMENT
I.

THE DISCOVERY WITHHELD IS CLASSIC WORK PRODUCT.
Under Rule 26, a party is not entitled to discovery of “documents and tangible things that

are prepared in anticipation of litigation or for trial by or for another party or its representative,”
and the Court “must protect against disclosure of,” inter alia, “the mental impressions,
conclusions, [and] opinions” of a party developed in anticipation of litigation or for trial. Fed. R.
Civ. P. 26(b)(3)(A) & (b)(3)(B). Warner’s counsel-directed investigation squarely fits this bill.
Hotfile does not dispute that the analysis was prepared at the direction of counsel or that
it was prepared specifically in anticipation of litigation. “[A]nalysis of one’s case ‘in
anticipation of litigation’ is a classic example of work product . . . and receives heightened
protection under Fed. R. Civ. P. 26(b)(3).” United States v. Adlman, 134 F.3d 1194, 1196-97 (2d
Cir. 1998) (citing N.L.R.B. v. Sears, Roebuck & Co., 421 U.S. 132, 154 (1975)). See, also, e.g.,
Cox v. Adm’r United States Steel & Carnegie, 17 F.3d 1386, 1421-1423 (11th Cir. 1994); Sandra
T.E. v. S. Berwyn Sch. Dist. 100, 600 F.3d 612, 622 (7th Cir. 2009) (“Work-product protection
applies to attorney-led investigations when the documents at issue can fairly be said to have been
prepared or obtained because of the prospect of litigation”) (internal quotation marks and citation
omitted); Jeffers v. Russell County Bd. of Ed., No. 3:06cv685-CSC, 2007 U.S. Dist. LEXIS
74480, at *8 (M.D. Ala. Oct. 4, 2007) (“To allow the plaintiffs to secure the results of the
defendants’ investigation would vitiate the work-product doctrine”); see generally Dimension
Leasing, Inc. v. Variety Children’s Hosp., No. 05-22701-Civ, 2007 U.S. Dist. LEXIS 45460, at
*4 (S.D. Fla. June 22, 2007). Moreover, even though facts themselves may be discoverable, the

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particular organization, selection, and characterization of those facts for counsel is protected as
work product as well. See Shelton v. Am. Motors Corp., 805 F.2d 1323 (8th Cir. 1986); Sporck
v. Peil, 759 F.2d 312 (3d Cir. 1985); Kallas v. Carnival Corp., No. 06-20115-CIV, 2008 U.S.
Dist. LEXIS 42299, at *11-12 (S.D. Fla. May 27, 2008) (where information was “gathered and
prepared by employees of the law firm of Plaintiffs’ counsel, at the direction of counsel, for a
litigation purpose,” discovery of that information – including survey results and the related
documentation – was presumptively protected from disclosure because it “would classically fall
under the ‘fact work product’ category”).
That Warner’s analysis consists of conclusions made and organized by its non-legal
personnel, at the direction of counsel, rather than “attorney mental impressions,” as Hotfile
argues, see Mot. at 7, is irrelevant. The “work-product doctrine will generally apply with respect
to an internal investigation that is undertaken in anticipation of litigation, whether it is conducted
by counsel or by other agents of the corporation.” Barton v. Zimmer Inc., No. 1:06-CV-208,
2008 U.S. Dist. LEXIS 1296, at *22 (N.D. Ind. Jan. 7, 2008); see also Duplan Corp. v. Deering
Milliken, Inc., 540 F.2d 1215, 1219 (4th Cir. 1976) (Opinion work product applies to lawyers
and nonlawyers alike); 4 James Wm. Moore, Moore’s Federal Practice § 26-70[4] at 26-217-18
(3d ed. 2006) (studies conducted at the direction of counsel are protected by the work product
doctrine); Fed. R. Civ. P. 26(b)(3)(A) (work product extends beyond attorneys to a party’s
“agent”).
The counsel-directed analysis at issue clearly is attorney work product.
II.

WARNER HAS NOT PUT ITS COUNSEL’S WORK PRODUCT “IN ISSUE.”
Warner has not, contrary to Hotfile’s claims, relied on its work product investigation as a

defense to Hotfile’s Counterclaim. Moreover, Warner’s investigation postdates the takedown
notices that form the basis of Hotfile’s Counterclaim, and therefore could not have conceivably
informed Warner’s views or knowledge as to the accuracy of those notices at the time Warner
sent them (the only thing relevant under the statute that governs Hotfile’s claims), and is
therefore not necessary, or even relevant, to Hotfile’s claimed desire to challenge Warner’s good
faith in the notices over which Hotfile is suing.
Warner intends to prove that, at the time it sent each takedown notice to Hotfile, it had a
good faith belief in that it held the rights to the actual content contained in the identified files.
Hotfile’s Counterclaim contends the opposite; Hotfile alleges that Warner sent 800 or so notices

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(out of hundreds of thousands) that violated 17 U.S.C. § 512(f), which prohibits anyone from
“knowingly materially misrepresent[ing]” that the “material … [identified in a notice] is
infringing.” Since the DMCA does not make it illegal to make a mistake in a takedown notice,
Hotfile’s Counterclaim depends entirely on the allegation that Hotfile knowingly made
misrepresentations in the notices it sent to Hotfile.1
After full document discovery and the completion of its deposition of Warner, Hotfile
does not have even a shred of evidence for this proposition. Therefore, it has been forced to
embark on a new theory: generically attacking Warner’s system for sending takedown notices.
Saving for another day whether §512(f) allows liability on Hotfile’s theory dispensing with
knowledge of any specific misrepresentation (it does not), Warner has great faith in its system,
and so testified in response to questioning from Hotfile’s counsel.
Warner’s faith in its antipiracy system, however, does not come from its counsel’s work
product investigation after Hotfile’s Counterclaim was filed, and Warner has never so contended.
It comes from Warner’s selection, design, implementation, maintenance, and ongoing efforts to
improve its system, which include taking immediate curative actions whenever Warner learns of
a notice that might have been sent in error. This practice is longstanding and long predates
Hotfile’s Counterclaim. See Deposition of David Kaplan (“Kaplan Tr.”) (Attached to
Declaration of Luke C. Platzer (“Platzer Decl.”)) at 90:16-20 (testifying that Warner took steps
to verify its takedown notices “not just after this deposition [notice] but through the whole
process. Any time we got additional information that we thought we could use to improve the

1

As Hotfile knows full well, moreover, almost half the files identified in Hotfile’s Counterclaim
involve takedown notices for content owned by one of Warner’s content partners (content that
Warner in fact had rights to distribute in some territories). Those files were identified as
infringing as part of a joint antipiracy project between Warner and the content partner. The
intent of the project was to identify infringing files, not send notices, so technically the notices
were in fact sent in error – an error resulting from a software glitch. No one at Warner even
knew those notices had been sent until Hotfile identified them in the process of threatening its
Counterclaim. To be clear, however, those files were blatantly infringing and owned by
Warner’s content partner. Under the DMCA, there was no reason Warner could not send notices
on behalf of its content partner. See 17 U.S.C. § 512(c)(3)(A)(vi) (anyone “authorized to act on
behalf of” the copyright owner can send a DMCA notice). Upon learning that notices
inadvertently had been sent, moreover, Warner’s content partner ratified Warner’s authority to
have sent the notices on its behalf. On this record, Hotfile’s allegations that Warner
“knowingly” misrepresented anything as to those files, much less that Warner misrepresented
that the files were infringing, 17 U.S.C. § 512(f)(1), exceeds the bounds of permissible advocacy.
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process, we used it”); id. at 85:22-86:1 (“the results of the notice sending are continually checked
to see what kind of errors if any are coming up. So that – that process has gone on from the very
beginning.”); id. at 112:13-17 (Warner “always” took action to correct errors, “[e]ven before the
April deposition notice.”); id. at 87:16-88:4 (describing Warner’s process for detecting and
correcting errors “before [Warner] received [Hotfile’s deposition notice with list of alleged
errors],” which included “people in my department … look[ing] at the daily results of links
actioned by title, by site” to scan for possible inaccuracies); Kaplan Tr. at 103:3-12 (similar);
Kaplan Tr. at 92:3-23 (similar). Based on this longstanding quality-control process, Mr. Kaplan
testified that Warner was “confident that we developed as system that would allow us over time
to continue to reduce the false positive level in response to errors that we discovered or were
pointed out to us by others.” Kaplan Tr. at 140:9-16. Warner produced, and did not withhold as
privileged, documents and testimony about this longstanding practice, including refinements to
that practice it made in response to this litigation.
By quoting Mr. Kaplan’s testimony stating his faith in this process – and then jumping
fifty pages forward to his separate description of Warner’s post-Counterclaim, counsel-driven
investigation – Hotfile seeks to create the misleading impression that Warner is relying on its
counsel-directed analysis from after the Counterclaim, as opposed to its longstanding quality
control procedures, as the basis for its good faith in the accuracy of its system. See Mot. at 4, 9.
But that was not Mr. Kaplan’s testimony, and Hotfile’s false juxtaposition of these two separate
lines of testimony is apparent from an even cursory review of the portions of the transcript
quoted above. This flaw is dispositive of Hotfile’s motion. Warner’s ongoing quality control
efforts are not work product, and Warner has produced all relevant information about them. The
August 2011 counsel-directed analysis is work product, and Warner has every right to withhold
it.
Moreover, since Warner’s investigation postdated the notices in Hotfile’s Counterclaim,
the investigation is not relevant to challenging Warner’s faith in its system, as Hotfile claims.
Mot. at 9-10. Since 17 U.S.C. § 512(f) requires a “knowing” misrepresentation, whether a
copyright owner “knew it was misrepresenting the facts” about whether a work is infringing,
Cabell v. Zimmerman, No. 09 Civ. 10134 (CM), 2010 WL 996007, at *4-5 (S.D.N.Y. Mar. 12,
2010), must be judged on the copyright owner’s state of knowledge at the time the notice was
sent. But every takedown notice listed in the attachments to Hotfile’s Counterclaim pre-dates the
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counsel-directed analysis at issue here. See Platzer Decl. ¶¶ 3-4. What Warner learned about its
takedown notices, or even generically the accuracy of its system, after it sent the notices attached
to the Counterclaim logically cannot have any bearing on its knowledge or faith in those notices
at the time it sent them. Thus, Warner did not put its counsel-directed analysis “in issue,”
Warner did not “waive” work product protection, and Hotfile does not need the investigation to
challenge Warner’s good faith in the notices at issue in its Counterclaim. Cf. Cox v. Adm’r
United States Steel & Carnegie, 17 F.3d 1386, 1419 (11th Cir. 1994) (while it is possible to
waive work product protection by putting the work product itself “in issue,” this exception
comes into play only in “very rare and extraordinary circumstances”).2
Warner produced to Hotfile its documents reflecting known instances of a mistaken
notice since Warner began using Hotfile’s SRA tool until the data of Hotfile’s Counterclaim.
Hotfile was given the opportunity to question Warner about every one of them. Warner also
produced its documents related to its ongoing quality control efforts from after the filing of the
Counterclaim, including any errors identified in that process. Hotfile again was given the
opportunity to question Warner about every one of them. Warner also allowed Hotfile to ask any
questions seeking factual information related to the counsel-directed work product analysis
conducted after the Counterclaim was filed. The only line of questioning Warner did not answer
called directly for the conclusions reached through the work product analysis.
CONCLUSION
For the reasons stated above, Warner respectfully requests that Hotfile’s Motion to
Compel be denied.

Dated: November 25, 2011
By: /s/ Karen L. Stetson
Karen L. Stetson
GRAY-ROBINSON, P.A.
1221 Brickell Avenue
2

Hotfile’s passing references to its need for the work product of Warner’s counsel, Mot. at 9,
does not even purport to satisfy the dual requirements of “substantial need” and “undue
hardship” necessary to overcome Warner’s work product protection. See Fed. R. Civ. P.
26(b)(3). Not could Hotfile satisfy that burden. Hotfile has all the underlying facts and data and
can readily conduct its own analyses, which it in fact did to arrive at the files listed in the
exhibits to the Counterclaim.
7

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16th Floor
Miami, FL 33131
Telephone: [phone]
Facsimile: [phone]
MOTION PICTURE ASSOCIATION
OF AMERICA, INC.
Karen R. Thorland (Pro Hac Vice)
15301 Ventura Blvd.
Building E
Sherman Oaks, CA 91403
Phone: [phone]
Fax: [phone]

JENNER & BLOCK LLP
Steven B. Fabrizio (Pro Hac Vice)
Duane C. Pozza (Pro Hac Vice)
Luke C. Platzer (Pro Hac Vice)
1099 New York Ave., N.W.
Suite 900
Washington, DC 20001
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiffs and Counterdefendant

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-20427-WILLIAMS-TURNOFF
DISNEY ENTERPRISES, INC.,
TWENTIETH CENTURY FOX FILM CORPORATION,
UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP,
COLUMBIA PICTURES INDUSTRIES, INC., and
WARNER BROS. ENTERTAINMENT INC.,
Plaintiffs,
v.
HOTFILE CORP., ANTON TITOV, and
DOES 1-10.
Defendants.
/
HOTFILE CORP.,
Counterclaimant,
v.
WARNER BROS. ENTERTAINMENT INC.,
Counterdefendant.
/
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 25th Day of November, 2011, I served the foregoing
Opposition of Warner Bros. Entertainment Inc. to Hotfile Corp.’s Motion to Compel Discovery,
and the supporting Declaration of Luke C. Platzer, on all counsel of record on the attached
service list by means of the Court’s ECF System.
By: /s/ Karen L. Stetson
Karen L. Stetson

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SERVICE LIST
Disney Enterprises, Inc., et al. v. Hotfile Corp. et al.
CASE NO. 11-CIV-20427-JORDAN

FARELLA BRAUN + MARTEL LLP
Anthony P. Schoenberg
[e-mail]
Roderick M. Thompson
[e-mail]
N. Andrew Leibnitz
[e-mail]
Deepak Gupta
[e-mail]
Janel Thamkul
[e-mail]
235 Montgomery Street
San Francisco, CA 94104
Phone: [phone]

RASCO KLOCK
Janet T. Munn
[e-mail]
283 Catalonia Ave., Suite 200
Coral Gables, FL 33134
Phone: [phone]
Fax: [phone]
Attorney for Defendants Hotfile Corp. and
Anton Titov

Attorneys for Defendants Hotfile Corp. and
Anton Titov

BOSTON LAW GROUP, PC
Valentin Gurvits
[e-mail]
825 Beacon Street, Suite 20
Newton Centre, MA 02459
Phone: [phone]
Attorneys for Defendants Hotfile Corp. and
Anton Titov

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