Mitchell v. Universal Music Group Inc. et al

Filing 140

MEMORANDUM OPINION AND ORDER by Chief Judge Joseph H. McKinley, Jr. on 4/26/18: The objections by defendant Capitol Records, LLC and Andre Romelle Young are SUSTAINED IN PART and OVERRULED IN PART consistent with this opinion. cc: Counsel, CM-Lindsay (DJT)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CIVIL ACTION NO. 3:15-CV-00174-JHM
LEROY PHILLIP MITCHELL p/k/a
Prince Phillip Mitchell and d/b/a Hot Stuff
Publishing Co.

PLAINTIFF

V.
CAPITOL RECORDS, LLC, et al.

DEFENDANTS

MEMORANDUM OPINION & ORDER
This matter is before the Court on objections by defendants Capitol Records, LLC
(“Capitol”) and Andre Romelle Young to an opinion by the Magistrate Judge on March 30,
2018, ordering the defendants to comply with certain discovery requests. (Order at DN 132,
Objections at 135.) This matter is ripe for decision.
I.

BACKGROUND

The Magistrate Judge’s order fully sets out the factual background of this case. Briefly,
plaintiff Leroy Mitchell has brought the present action for copyright infringement against Capitol
and Young, among other defendants. He alleges that the defendants unlawfully sampled his
musical composition “Star in the Ghetto” when recording “If It Ain’t Ruff,” a song from the
1988 album Straight Outta Compton by N.W.A. After the parties exchanged some discovery,
Mitchell moved to compel Capitol and Young to provide supplemental responses to a number of
requests. (DN 83.) First, Mitchell sought financial information from the defendants going back
to the release of “If It Ain’t Ruff” in 1988, as the defendants were only providing such
information from the past three years. Second, he sought to require the defendants to respond to
certain questions with more particularity, as the defendants had repeatedly used boilerplate
language such as “proportionality,” “attorney-client privilege,” and “work product” in declining

to respond to certain requests. And third, he sought to require the defendants to produce a
privilege log of all documents that they had refused to produce by claiming such a privilege.
In response, Capitol and Young stated that their refusal to produce financial documents
going back beyond the three most recent years was justified, as the Copyright Act’s statute of
limitations only permits a plaintiff to recover for those infringements that occur within three
years of the commencement of the action. They further argued that disclosing such information
would not be proportional to Mitchell’s needs in this case and would impose an undue burden on
them. They finally argued that the answers to Mitchell’s requests were sufficiently particular
and that no privilege log was required, as no privileged documents had been uncovered.
The Magistrate Judge granted Mitchell’s motion to compel. He first concluded that the
defendants must provide financial documents beyond the three years directly preceding the
commencement of this action, as the Court had previously determined that Mitchell’s claim for
damages beyond that three-year period could proceed under the Sixth Circuit’s “discovery rule”
in copyright cases. (DN 124, at 3–8.) He further concluded that such a request was proportional
to Mitchell’s needs and that it would not impose an undue burden on the defendants. Next, he
ordered the defendants to fully respond to Mitchell’s requests that initially received only
boilerplate responses. The Magistrate Judge concluded that the frivolous use of these objections
constituted a waiver of those objections for all current discovery, but not for any future
discovery. Finally, he ordered the defendants to comply with specific requests for information
and documents that Mitchell argued were incomplete or lacking in substance. The defendants
were also ordered to pay Mitchell’s costs related to the motion.
Capitol and Young now object to the Magistrate Judge’s order on two grounds. First,
they contest the Magistrate Judge’s conclusion that they waived objections based upon attorney-

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client privilege or the work product doctrine. And second, they argue that they should not be
ordered to pay Mitchell’s costs, as their opposition to Mitchell’s request for documents going
back to 1988 was substantially justified due to the Supreme Court’s opinion in Petrella v. MetroGoldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014).
II. STANDARD OF REVIEW
Rule 72(a) of the Federal Rules of Civil Procedure permits a party to submit objections to
a magistrate judge’s ruling on non-dispositive matters, such as discovery orders. The district
court reviews an order by a magistrate judge on a non-dispositive matter under the “clearly
erroneous or contrary to law” standard. 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a).
III. DISCUSSION
A. WAIVER OF OBJECTIONS
Capitol and Young first argue that they should not be held to have waived objections
based upon proportionality, attorney-client privilege, and the work product doctrine. In regards
to the objections based upon proportionality, the defendants state that this objection was
reasonable, as Mitchell had requested information going back to 1988.

According to the

defendants, their opposition to this discovery would have been well taken had the Court
determined that the Copyright Act precludes damages for infringements that occurred more than
three years before the commencement of the action. But Capitol and Young misrepresent why
the Magistrate Judge concluded that they had waived any objection based on proportionality. It
was not because they had objected to the disclosure of financial documents on proportionality
grounds, but rather because they had repeatedly objected on proportionality grounds to other
requests for admission and interrogatories which were clearly proportional to Mitchell’s needs in
this case. For example, both defendants objected on proportionality grounds to Mitchell’s

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interrogatory that requested the basis for the defendants’ contention that they had not infringed
on Mitchell’s copyright. (DN 83-2, at 17; DN 83-3, at 15.) They both also objected on
proportionality grounds to Mitchell’s request to identify any witnesses that worked for the
defendants and would have information “concerning the creation, copyright registration,
production, manufacture, distribution and/or sale” of “If It Ain’t Ruff.” (DN 83-2, at 18; DN 833, at 16.) The Magistrate Judge found these objections to be frivolous, since such information is
clearly proportional to Mitchell’s needs in this case. He further concluded that the use of
objections in a frivolous manner constitutes waiver. See Wesley Corp. v. Zoom T.V. Prods.,
LLC, 2018 WL 372700, at *4 (E.D. Mich. Jan. 11, 2018) (use of “substance-free objection”
results in forfeiture). These conclusions are neither clearly erroneous nor contrary to law.
Turning to the waiver of objections based on attorney-client privilege and the work
product doctrine, Capitol and Young argue that they cannot be held to have waived these
privileges since they did not actually withhold any privileged documents. But this is the precise
reason that the Magistrate Judge concluded that they had waived objections based upon
privilege. The defendants repeatedly stated in their response to interrogatories and requests for
admission and production that certain information and documents were privileged. However,
they admit that no such privileged documents or information exist. The Magistrate Judge held
this to be a frivolous use of objections, since the defendants repeatedly claimed a privilege where
they knew none existed. The defendants cite to cases that demonstrate that the failure to produce
a privilege log should not be construed as a waiver, but the Magistrate Judge did not find that
they had waived privilege through their failure to produce a privilege log, as their fault lies not in
their failure to produce a privilege log but in asserting the objections in the first place. The

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Magistrate Judge found these objections to be frivolous, and this conclusion is neither clearly
erroneous nor contrary to law.
The defendants also argue that it would be unfair to consider their objections based upon
privilege to be a waiver, since they will now have to search documents going back to 1988 in
order to comply with the Court’s order compelling disclosure of requested documents, and this
search may reveal information that is actually privileged. Thus, they argue that they should at
least be able to object on privilege grounds if any newly discovered documents are protected.
But the defendants cannot assert that they are just now being required to search documents going
back to the creation of “If It Ain’t Ruff.” That may be the case with the financial documents that
Mitchell requested and were withheld due to a disagreement on the applicability on the statute of
limitations, but many of Mitchell’s requests sought information and documents from before
2012. For example, Mitchell asked Young to “describe the process of creation, recording,
producing, editing or mixing the musical work entitled ‘If It Ain’t Ruff.’” (DN 83-3, at 6.) The
defendants do not dispute that all of those events took place well before 2012.

For the

defendants to have answered those questions in good faith, they naturally would have had to
gather information or documents from 1988 onward. Thus, it is disingenuous for the defendants
to claim that the Magistrate Judge’s order requires them to waive privilege for a whole array of
evidence that they have never seen or searched for.
The defendants have not shown that the Magistrate Judge’s conclusion that they waived
any objection based on proportionality, attorney-client privilege, or the work product doctrine
was clearly erroneous or contrary to law. Therefore, the objection is overruled.

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B. AWARD OF COSTS
The second objection by Capitol and Young contests the Magistrate Judge’s order that
they must pay Mitchell’s costs related to filing his motion to compel. They argue that payment
must not be ordered when “the opposing party’s nondisclosure, response, or objection was
substantially justified.” Fed. R. Civ. P. 37(a)(5)(A)(ii). They point to the Supreme Court’s
opinion in Petrella as proof that their failure to provide the requested documents and information
was substantially justified, as Petrella cast some doubt upon the continuing validity of the
“discovery rule” in copyright cases. But regardless of Petrella, this only addresses one aspect of
Mitchell’s motion to compel. He not only sought financial information that was being withheld
due to the dispute over the statute of limitations, but he also sought other information that was
being withheld due to the defendants’ objections based on proportionality, attorney-client
privilege, and the work product doctrine. The defendants make no argument as to why their
boilerplate use of these objections was substantially justified, and the Magistrate Judge’s
decision that no such justification existed was neither clearly erroneous nor contrary to law.
It is not clear from the Magistrate Judge’s order whether he contemplated awarding
Mitchell his costs as they relate to compelling the disclosure of the financial documents that were
potentially affected by the statute of limitations. To the extent that he did, the Court will sustain
the defendants’ objection so that they will not be required to pay Mitchell’s costs associated with
his motion to compel financial documents from 1988 to 2012. Capitol and Young both opposed
the motion to compel and filed their own motion for summary judgment on the grounds that they
could not be liable for damages going back any further than 2012 because of the Copyright Act’s
three-year statute of limitations. They clearly articulated their argument that Petrella abrogated
the discovery rule and placed a hard cap on a plaintiff’s damages in copyright infringement

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cases, as only damages from infringements that occurred within three years of commencing the
action are recoverable. And while the Court ultimately disagreed with this interpretation of
Petrella, the Court finds that the defendants were substantially justified in making that argument.
See Peterson v. Hantman, 227 F.R.D. 13, 16 (D.D.C. 2005) (“A party’s actions are substantially
justified if the issue presented is one that could engender a responsible difference of opinion
among conscientious, diligent, but reasonable advocates”) (quotations omitted). The only court
of appeals to have addressed whether Petrella abrogates the discovery rule did not answer the
question definitively. Chicago Bldg. Design, P.C. v. Mongolian House, Inc., 770 F.3d 610, 618
(7th Cir. 2014) (“If on remand CBD continues to claim a right to recover for infringing acts that
occurred in 2008, outside the three-year look-back period, the parties will need to address
whether Petrella abrogates the discovery rule in copyright cases”). And while, as the Court
detailed in its order denying the motion for summary judgment, the vast majority of district
courts have concluded that Petrella does not abrogate circuit precedent on the validity of the
discovery rule (DN 124, at 6), the defendants did cite to authority that supported their
interpretation of Petrella. See Papazian v. Sony Music Entm’t, 2017 WL 47339662, at *4–5
(S.D.N.Y. Sep. 28, 2017); Wu v. John Wiley & Sons, Inc., 2015 WL 5254885, at *6 (S.D.N.Y.
Sep. 10, 2015).

Had the Court concluded that Petrella abrogates the discovery rule, the

defendants’ argument that a request for financial documents before 2012 was not proportional to
Mitchell’s needs would have been more persuasive.

Thus, the Court concludes that the

defendants were substantially justified in opposing the disclosure of the financial documents at
issue. As such, the Court will sustain the objection to the extent that Mitchell may not recover
his costs as they relate to litigating the dispute over the disclosure of those documents, but he

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may still seek to recover his costs as they relate to any other matter that was disputed in his
motion to compel.
IV. CONCLUSION
For these reasons set forth above, IT IS HEREBY ORDERED that the objections by
defendant Capitol Records, LLC and Andre Romelle Young are SUSTAINED IN PART and
OVERRULED IN PART consistent with this opinion.

April 26, 2018

cc:

Counsel of Record
Magistrate Judge Colin H. Lindsay

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