Righthaven LLC v. Democratic Underground, LLC et al

Filing 150

REPLY to Response to 120 MOTION to Intervene as of Right Pursuant to Federal Rule of Civil Procedure 24(a)(2) ; filed by Plaintiff Righthaven LLC. (Mangano, Shawn)

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SHAWN A. MANGANO, ESQ.
Nevada Bar No. 6730
[e-mail]
SHAWN A. MANGANO, LTD.
9960 West Cheyenne Avenue, Suite 170
Las Vegas, Nevada 89129-7701
[phone] – telephone
[phone] – facsimile
DALE M. CENDALI, ESQ. (admitted pro hac vice)
[e-mail]
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, New York 10022
Tel: [phone]
Fax: [phone]
Attorneys for Righthaven LLC

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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RIGHTHAVEN LLC, a Nevada limitedliability company,

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RIGHTHAVEN LLC’S REPLY IN
SUPPORT OF ITS APPLICATION TO
INTERVENE AS OF RIGHT PURSUANT
TO FEDERAL RULE OF CIVIL
PROCEDURE 24(a)(2)

Plaintiff,

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Case No.: 2:10-cv-01356-RLH-GWF

v.
DEMOCRATIC UNDERGROUND, LLC, a
District of Columbia limited-liability
company; and DAVID ALLEN, an individual,

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Defendants.

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DEMOCRATIC UNDERGROUND, LLC, a
District of Columbia limited-liability
company,
Counterclaimant,

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v.
RIGHTHAVEN LLC, a Nevada limitedliability company; and STEPHENS MEDIA
LLC, a Nevada limited-liability company,
Counterdefendants.

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I.

INTRODUCTION

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Righthaven has sought to intervene as a matter of right in this action based on its

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ownership of the copyrighted work (the “Work”) at issue, which was assigned to it, along with

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the right to sue for past, present and future infringements of the Work (the “Assignment”). As

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noted in its Application, Righthaven does not seek to challenge the Court’s June 14, 2011

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standing decision, which was limited to the Assignment and the Strategic Alliance Agreement

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(the “SAA”) prior to being amended on May 9, 2011 (the “Amendment”). (Doc. # 116 at 7-8

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n.1.)

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Rather, Righthaven seeks to intervene based on its ownership of the Work in view of the

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Amendment and in further view of the more recent Restated and Amended Strategic License

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Agreement (the “Restated and Amended SAA”). It is black-letter law that a non-exclusive

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licensee lacks standing to sue for infringement. See 17 U.S.C. § 101; Silvers v. Sony Pictures

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Entm’t, Inc., 402 F. 3d 881, 898 n. 7 (9th Cir. 2005) (“Silvers”). Stephens Media LLC

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(“Stephens Media”) is a non-exclusive licensee under the amended SAA. Righthaven is

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therefore the only party with the ability to sue for infringement of the Work.

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In response, Democratic Underground, LLC (“Democratic Underground”) has asserted

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numerous arguments, such as collateral estoppel, fraud upon the Court and champerty, in urging

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denial of Righthaven’s Application. (Doc. # 140.) Ironically for a party seeking to invoke the

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doctrine of collateral estoppel, Democratic Underground had these exact same arguments

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rejected by the court in Righthaven LLC v. Pahrump Life, et al., Case No. 2:10-cv-01575-JCM-

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PAL (Mahan, J.) (“Pahrump Life”) (Doc. # 63). In dismissing Righthaven’s claims without

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prejudice in view of the original SAA for lack of standing, the refused to apply collateral

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estoppel or adopt Democratic Underground’s champerty and fraud-based arguments. (Pahrump

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Life, Doc. # 63.) Nevertheless, Democratic Underground is apparently perfectly content with

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trotting out its previously rejected arguments under the hope of garnering a different result from

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this Court.

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As argued in this submission and in its prior submission, Righthaven’s ownership of the
Work is demonstrated through the Assignment in view of the amended SAA. Once this

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conclusion is reached, and which would not be inconsistent with the Court’s June 14, 2011

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decision given the nature of its standing analysis based on the jurisdictional facts as of the filing

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of the Complaint, Righthaven’s Application should be granted.

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II.

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ARGUMENT
As the below arguments will demonstrate, Democratic Underground’s response to

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Righthaven’s Application does not alter the result that leave to intervene as a matter of right

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should be granted. This conclusion is warranted because Righthaven is the current owner of the

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Work, and the only party vested with standing to sue for infringement, based on the amended

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SAA, which was not fully considered by the Court in its June 14th Order. (Doc. # 116 at 8 n.1.)

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In this regard, it is quite telling that Democratic Underground does not substantively

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challenge the rights granted under the Restated and Amended SAA or that the amended SAA

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fails to address the concerns expressed by prior decisions in this District. Rather, Democratic

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Underground is apparently content with relying upon prior arguments that were found to lack

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merit recently in the Pahrump Life case. (Pahrump Life, Doc. # 63.) The Court should likewise

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reject Democratic Underground’s arguments and grant Righthaven’s Application.

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A. Contrary to Democratic Underground’s Contention, Righthaven’s Application is
Timely.
Democratic Underground argues that Righthaven’s Application is untimely. (Doc. # 140

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at 12.) In support of its position, Democratic Underground argues: (1) that ten months and

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substantial litigation has occurred before the Application was filed; (2) Democratic Underground

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would be prejudiced because it has devoted substantial efforts to addressing the issue of

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standing; and (3) the reason for delay is due to Righthaven’s fault for failing to have true

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ownership of the Work sued upon. (Id.) Democratic Underground’s arguments are unpersuasive

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and should be rejected.

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To begin with, Righthaven unquestionably sought to intervene shortly after the Court’s

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June 14, 2011 decision. In doing so, Righthaven clearly acted diligently once it received notice

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of the Court’s decision and appreciated the standing analysis employed in view of its current

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ownership rights under the amended SAA. See R & G Mortg. Corp. v. Federal Home Loan

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Mortg. Corp., 584 F.3d 1, 8 (1st Cir. 2009) (“[T]he timeliness inquiry centers on how diligently

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the putative intervenor has acted once he has received actual or constructive notice of the

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impending threat.”). Democratic Underground attempts to improperly construe the length of

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time encompassed while Righthaven was a party to this action as being material to the Court’s

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timeliness inquiry. Democratic Underground is wrong. Righthaven could not have sought to

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intervene as a matter of right while it was the Plaintiff in this action. It could only have sought to

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intervene once it was dismissed as a party to this case and it did so promptly upon this occurring.

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Even if Democratic Underground’s logic were adopted, the mere lapse of time does not render an

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application untimely. United States v. Oregon, 745 F.2d 550, 552 (9th Cir. 1984).

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While Democratic Underground asserts that granting the Application cause it to suffer

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prejudice given the “substantial efforts to address the issues of standing . . .” devoted by it in this

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case. (Doc. # 140 at 12:23-25.) In evaluating the prejudice to an existing party for purpose of

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deciding whether an application to intervene is timely, the court should not consider “whether

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the intervention itself will cause the nature, duration, or disposition of the lawsuit to change.”

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Smith v. Marsh, 194 F.3d 1045, 1051 (9th Cir. 1999); see also Edwards v. City of Houston, 78

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F.3d 983, 1002 (5th Cir. 1996); United States v. Union Elec. Co., 64 F.3d 1152, 1159 (8th Cir.

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1995). If Democratic Underground’s claimed prejudice were grounds to deny the Application,

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intervention would never be allowed because doing so inevitably prolongs the litigation. See id.

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In reality, Democratic Underground would suffer absolutely no prejudice if the

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Application were granted. It apparently intends to litigate its non-infringement counterclaim

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against Stephens Media. If Righthaven were to re-enter this case, Democratic Underground

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would be placed in the same position as it was in until the Court’s June 14th Order. It has

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propounded written discovery on both Righthaven and Stephens Media. It has received

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responses to these discovery requests from Righthaven and from Stephens Media. There is no

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claim that evidence has been lost over time. Its non-infringement claim raises the same issues

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that would be raised by Righthaven’s complaint in intervention. In sum, it is not like Righthaven

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is some unknown third party seeking to enter the fray at the last minute. Righthaven’s

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Application merely seeks to re-establish its position as a party in this dispute based upon its

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ownership rights to the Work based on the amended SAA.

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Democratic Underground’s final argument in support of deeming Righthaven’s

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Application untimely asserts that Righthaven’s misrepresentations are the alleged reason for the

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delay in it seeking to intervene. (Doc. # 140 at 12-13.) Democratic Underground provides

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absolutely no supporting authority that a party’s alleged culpability is germane to the Court’s

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timeliness inquiry. Rather, Democratic Underground has simply sought to inject this as part of

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the inquiry as a means for additional mudslinging. As stated, Righthaven promptly moved to

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intervene upon its dismissal for lack of standing. Since there was no delay, material or

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otherwise, in seeking to intervene there are no meaningful grounds to find the Application

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untimely.

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B. Righthaven Has a Significantly Protectable Interest in The Work.

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Righthaven’s Application demonstrates that it has a significantly protectable interest as

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the current owner of the Work based on the amended SAA, thereby satisfying the second

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intervention as of right requirement under Rule 24(a)(2). Democratic Underground, however,

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argues that Righthaven does not have such an interest. In attempting to advance this argument,

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Democratic Underground claims that Righthaven is barred by collateral estoppel from claiming

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ownership of the Work, that the amended SAA is champertous and unenforceable, and that the

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SAA constitutes the unauthorized practice of law. (Doc. # 140 at 15-18.) Judge Mahan rejected

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these very same arguments made by Democratic Underground in the Pahrump Life case. This

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Court should do the same and find that Righthaven has demonstrated significantly protectable

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interest in support of its Application.

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1. Righthaven is not barred by arguing that it has a significantly protectable
interest through its ownership of the Work.
Democratic Underground asserts that Righthaven is barred by the doctrine of collateral

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estoppel (also known as issue preclusion) from arguing that it has a significantly protectable

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interest through its ownership of the Work. (Doc. # 140 at 15-18.) As it did in connection with

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the Pahrump Life order to show cause hearing, Democratic Underground has incorrectly applied

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the elements of collateral estoppel in order to secure the result it desires. A dismissal for lack of

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subject matter jurisdiction, which all of the prior decisions relied upon by Democratic

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Underground have found, does not constitute an adjudication on the merits as is required for

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application of collateral estoppel. In fact, Judge Mahan expressly rejected Democratic

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Underground’s collateral estoppel argument in the Pahrump Life case by expressly dismissing

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Righthaven’s claims without prejudice for lack of standing. (Pahrump Life, Doc. # 63.)
A prior federal court decision has preclusive effect where (1) the issue necessarily

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decided at the previous proceeding is identical to the one which is sought to be relitigated; (2)

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the first proceeding ended with a final judgment on the merits; and (3) the party against whom

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collateral estoppel is asserted was a party or in privity with a party a the first proceeding.”

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Kourtis v. Cameron, 419 F.3d 989, 994 (9th Cir. 2005) (emphasis added) (citing Hydranautics v.

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FilmTec Corp., 204 F.3d 880, 885 (9th Cir. 2000)); Owens v. Kaiser Found. Health Plan, Inc.,

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244 F.3d 708, 713 (9th Cir. 2001); W. Radio Servs. v. Glickman, 123 F.3d 1189, 1192 (9th Cir.

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1997).

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Democratic Underground’s flawed issue preclusion analysis can be quickly dispensed of

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because a dismissal for lack of standing is not a decision on the merits. See Stalley v. Orlando

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Reg. Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (“A dismissal for lack of

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subject matter jurisdiction is not a judgment on the merits and is entered without prejudice.”);

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Torres-Negron v. J & N Records, LLC, 504 F.3d 151, 164-65 (1st Cir. 2007) (entry of judgment

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for lack of subject matter jurisdiction failed to constitute a decision on the merits of copyright

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infringement allegations); Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1188 (11th Cir. 2003)

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(stating that a dismissal for lack of subject matter jurisdiction “plainly is not an adjudication on

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the merits that would give rise to a viable res judicata defense”); Wages v. IRS, 915 F.2d 1230,

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1234 (9th Cir. 1990) (“A jurisdictional dismissal is not a judgment on the merits.”); GHK

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Exploration Co. v. Tenneco Oil Co., 857 F.2d 1388, 1392 (10th Cir. 1988) (“[A] court-ordered

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dismissal for lack of subject matter jurisdiction is also not a decision on the merits ....”); Cook v.

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Peter Kiewit Sons Co., 775 F.2d 1030, 1035 (9th Cir. 1985) (holding that a dismissal for lack of

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subject matter jurisdiction divests the court of the power to make judgments relating to the merits

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of the case); see also FED. R. CIV. P. 41(b) (involuntary dismissal for lack of jurisdiction is not an

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adjudication on the merits). Indeed, each of the Righthaven decisions relied upon by Democratic

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Underground involve a dismissal without prejudice pursuant to the express language of

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Federal Rule of Civil Procedure 41(d), which compels such a conclusion unless the dismissal

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order states otherwise. (See Hoehn, Docs. # 28 at 7-10, 30; Mostofi, Docs. # 34 at 4-8, 35;

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DiBiase, Docs. # 72 at 2, 73.) Moreover, the Court’s decision in this case is not a final judgment

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because it is an interlocutory order. (Doc. # 116 at 11.)
Even assuming the prior decisions in this District did have preclusive effect (which they

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do not), none were based upon the Restated and Amended SAA. In fact, the decisions in

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DiBiase, Barham, Mostofi, along with the decision by this Court, were decided under the

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unamended SAA. Only the decision in Hoehn considered, on a potentially advisory basis, the

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effect of the Amendment on standing. Therefore, there is an absence of identical issues required

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to properly apply issue preclusion under controlling Ninth Circuit precedent. See Kourtis, 419

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F.3d at 994. For at least these reasons, Democratic Underground’s collateral estoppel argument

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fails.

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3. The Restated and Amended SAA is not champertous, unenforceable or
otherwise against public policy.
Democratic Underground next asserts that the Restated and Amended SAA is

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champertous, unenforceable or otherwise against public policy. (Doc. # 140 at 22-23.)

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Democratic Underground raised this exact same argument before Judge Mahan in the Pahrump

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Life case and it was rejected. Nevertheless, Democratic Underground has elected to raise it again

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in hopes of obtaining a different result. As Judge Mahan did, this Court should also reject

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Democratic Underground’s champerty argument.

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Putting aside its irrelevance to the issue of standing, Democratic Underground has

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incorrectly applied the law of champerty—a centuries-old doctrine with limited application – in

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order to advance its argument that the Restated and Amended SAA is champertous,

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unenforceable and against public policy. Prosky v. Clark, 109 P. 793, 794 (Nev. 1910) (“The

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reason for the enactment of the English statutes of champerty and maintenance having very

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largely ceased to exist, the extent to which the doctrine is applied varies greatly in different

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states. Some states, for example California, have refused to recognize it at all.”).

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Under Nevada law, champerty is a contract defense that “cannot be invoked except

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between the parties to the champertous agreement in cases where such contract is sought to be

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enforced.” Del Webb Communities, Inc. v. Partington, 2011 WL 2854086, at *7 (9th Cir. 2011)

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(citing Prosky, 109 P. at 794). Democratic Underground cannot challenge the Restated and

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Amended SAA as champertous because it was not a party to the agreement—a threshold

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requirement that it completely ignores. While this, in and of itself, is fatal to Democratic

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Underground’s argument, it should also be noted that even if it could assert champerty, there is

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no substantive basis to conclude the contractual agreement between Righthaven and Stephens

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Media is champertous. As stated by the Nevada Supreme Court, an agreement cannot be

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champertous if the plaintiff has an interest in the litigation:

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Where a person promoting the suit of another has any interest whatever,
legal or equitable, in the thing demanded, . . . he is in effect also a suitor
according to the nature and extent of his interest. McIntosh v. Harbour
Club Villas Condominium, 421 So.2d 10, 11 (Fla. Dist. Ct. App. 1982).

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Schwartz v. Eliades, 939 P.2d 1034, 1036 (Nev. 1997). Moreover, as the U.S. Supreme

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Court has held, an assignee of an accrued cause of action has standing to bring suit in his or her

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own name even if there is a promise to remit a portion of any proceeds recovered to the assignor.

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Sprint Communications Co., L.P. v. APCC Services, Inc., 554 U.S. 269, 275 (2008).

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Under the Restated and Amended SAA, Righthaven has ownership of all works assigned

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to it by Stephens Media, along with the right to sue for all past, present and future infringements.

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As such, it is beyond dispute that Righthaven has an interest in the works upon which its

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copyright infringement claims are based. This precludes a finding that the Restated and

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Amended SAA is champertous under Nevada law. See Schwartz, 939 P.2d at 1036. Moreover,

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the fact that Righthaven has agreed to share the proceeds of any recovery for infringement of a

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work assigned by Stephens Media is not improper. See Sprint Communications Co., L.P., 554

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U.S. at 275.

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3. The Restated and Amended SAA does not constitute the unauthorized
practice of law.
Democratic Underground next asserts that the Restated Amendment constitutes an illegal

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attempt to practice law without a license. (Doc. # 140 at 24-25.) Despite this Court remarks at

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the recent order to show cause hearing, Righthaven maitains that it is not engaged in the

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unauthorized practice of law. In fact, this exact same argument was recently rejected by Judge

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Mahan in the Pahrump Life case as demonstrated by his decision to dismiss the case without

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prejduice for lack of standing.

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Righthaven is not a law firm. While it has in-house counsel, all cases in this District are

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currently handled exclusively by outside counsel licensed to practice in this jurisdiction or with

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permission to do so from the Court on a pro hac vice basis. The fact that Righthaven and

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Stephens Media may share the proceeds of any recovery related to copyright litigation based on

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assigned works is neither unlawful nor does it constitute “an illicit contingency fee agreement”

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as asserted by Amici (Doc. # 58 at 19:4-5). See Sprint Communications Co., L.P., 554 U.S. at

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289 (“Petitioners . . . say [] the assignments in this litigation constitute nothing more than a

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contract for legal services. We think this argument is overstated. There is an important

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distinction between simply hiring a lawyer and assigning a claim to a lawyer (on the lawyer’s

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promise to remit litigation proceeds). The latter confers a property right (which creditors might

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attach); the former does not.”); see also In re Brooms, 447 B.R. 258, 265 (9th Cir. 2011) (“And

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for collection purposes, the assignee who holds legal title to the debt according to substantive

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law is the real party in interest, even though the assignee must account to the assignor for

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whatever is recovered in the action.”)

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Democratic Underground cites Bay County Bar Ass’n v. Finance Sys., Inc., 345 Mich.

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434 (1956) for the proposition that a law firm cannot sue on clients’ cases in its own name. This

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case is inapposite. As noted, Righthaven is not a law firm. Moreover, under the Restated and

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Amended SAA, Righthaven has been validly conveyed ownership in the assigned works, along

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with the right to sue for past, present and future infringements.

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While Democratic Underground wishes to characterize the structure of this transaction as

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analogous to a law firm bringing a client’s suit in the firm’s own name, this is simply not the

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case. Ownership of the works is transferred to Righthaven along with right to sue for

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infringement. Stephens Media’s receipt of a non-exclusive license to exploit the works does not

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alter this conclusion. In fact, given the Stephens Media’s non-exclusive license, Righthaven is

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the only party with standing to sue for copyright infringement. See Davis, 505 F.3d at 101

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(“[T]he holder of a nonexclusive license may not sue others for infringement.”); I.A.E., Inc., 74

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F.3d at 775 (“[A] person holding a nonexclusive license has no standing to sue for copyright

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infringement.”); Eden Toys, Inc., 697 F.2d at 32 (“The Copyright Act authorizes only to types of

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claimants to sue for copyright infringement: (1) owners of copyrights, and (2) persons who have

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been granted exclusive licenses by owners of copyrights.”). Accordingly, there is no justifiable

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basis to adopt Democratic Underground’s claim the Restated and Amended SAA constitutes the

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unauthorized practice of law or to invoke the overreaching relief of barring Righthaven from

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relying on the amended version of the SAA or any other subsequent amendment of the SAA in

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any litigation commenced by the company.

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C. Righthaven’s Interests Are Not Adequately Protected Through Stephens
Media’s Defense of Democratic Underground’s Counterclaim.
Democratic Underground further contends that Righthaven’s Application should be

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denied because its interests are adequately protected through Stephens Media’s Counterclaim

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defense. (Doc. # 140 at 13-14.) Democratic Underground’s argument is unpersuasive.

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Righthaven is only required to make a minimal showing of inadequacy of representation

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to justify intervention as a matter of right. See Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th

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Cir. 2003); Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 528 (9th Cir. 1983). Once it is

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determined that Righthaven has a significantly protectable interest through its ownership of the

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Work, and that Stephens Media is the holder of a non-exclusive license, it clearly follows that

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Stephens Media would inadequately represent Righthaven’s interests in defending Democratic

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Underground’s Counterclaim and by being unable to assert an affirmative infringement claim.

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Simply put, Democratic Underground seeks to litigate its non-infringement claim against

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Stephens Media because it does not face the threat of an affirmative infringement claim against

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that Righthaven would assert through its complaint in intervention.

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Stephen Media’s current status as a non-exclusive licensee bars it from bringing an

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affirmative copyright infringement claim against Democratic Underground. See Davis v. Blige,

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505 F.3d 90, 101 (2d Cir. 2007)(“[T]he holder of a nonexclusive license may not sue others for

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infringement.”); I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996)(“[A] person holding a

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nonexclusive license has no standing to sue for copyright infringement.”); Eden Toys, Inc. v.

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Florelee Undergarment Co., 697 F.2d 27, 32 (2d Cir. 1982)(“The Copyright Act authorizes only

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to types of claimants to sue for copyright infringement: (1) owners of copyrights, and (2) persons

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who have been granted exclusive licenses by owners of copyrights.”).Righthaven, as owner of

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the Work, is permitted to bring such a claim as set forth in its proposed complaint in

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intervention. See Silvers, 402 F.3d at 884; Eden Toys, Inc., 697 F.2d at 32; 17 U.S.C. § 101.

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Denying the Application to intervene as of right would therefore preclude an infringement claim

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from being asserted against Democratic Underground, which Righthaven’s proposed complaint

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in intervention would assert.

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Democratic Underground argues that if Stephens Media’s is not the real party in interest

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based on its standing as non-exclusive licensee is improper, then it will be able to obtain a

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dismissal without prejudice or otherwise prevail in defense of the Counterclaim. (Doc. # 140 at

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13-14.) While it is true that Stephens Media would have an incentive to vigorously assert such

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an argument, Democratic Underground’s argument ignores that denying Righthaven’s

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Application permits it to seek a potentially preclusive adjudication on the merits that can be used

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against Righthaven without its participation and without the risk of facing an affirmative

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infringement claim. In essence, Democratic Underground is placed in the enviable procedural

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posture of having a tremendous amount to gain with little risk if Righthaven’s Application were

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denied. Democratic Underground’s procedural windfall aside, the clear fact remains that

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Stephens Media cannot assert an affirmative infringement claim, while Righthaven can do so.

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Accordingly, Stephens Media cannot adequately protect Righthaven’s ownership interest in the

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Work. This necessary conclusion supports granting Righthaven’s Application.

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D. The Restated and Amended SAA Does Not Constitute a Fraud Upon The Court.

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Democratic Underground next accuses Righthaven of defrauding the Court because it and

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Stephens Media chose to amend their agreement to comply with the court’s ruling in Hoehn.

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Democratic Underground made this identical argument in the Pahrump Life case and Judge

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Mahan rejected it. Nevertheless, Democratic Underground trots this same argument out in the

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hopes of securing a different result in this case, which it should not.

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As with its argument in Pahrump Life, Democratic Underground makes this serious

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accusation with absolutely no basis. As the Ninth Circuit has held, the power of a Court to find

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that a party has committed fraud on the court “is narrowly construed, applying only to fraud that

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defiles the court or is perpetrated by officers of the court.” U.S. v. Chapman, 642 F.3d 1236,

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1240 (9th Cir. 2011) (citing Latshaw v. Trainer Wortham & Co., 452 F.3d 1097, 1104 (9th Cir.

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2006) (describing fraud on the court as “fraud perpetrated by officers of the court that prevents

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the judicial machinery from performing its impartial task of adjudging cases that are presented

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for adjudication.”)).

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Here, Righthaven and Stephens Media revised their agreement in order to comply with

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the court’s decision regarding standing in Hoehn. Not only did Righthaven promptly inform

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Democratic Underground and all parties in the Pahrump Life case of the existence of the

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Restated and Amended SAA just after it was executed, Righthaven also promptly informed the

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Court and disclosed the agreement. In both this case and in Pahrump Life, Righthaven

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affirmatively sought a stipulation giving all parties the opportunity to address standing under this

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agreement. Righthaven respectfully submits that its actions were consistent with providing this

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Court with the information it needs to adjudicate its standing under the Restated and Amended

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SAA. Democratic Underground’s attempt to use the Court’s prior determination concerning

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Righthaven’s failure to disclose Stephens Media as an interested party under the local rules has

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nothing to do with its standing to sue under the Restated and Amended SAA.

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Democratic Underground has failed to cite a single case that prohibits private parties,

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such as Righthaven and Stephens Media, from amending their contractual agreements to

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effectuate the parties’ intent. Moreover, through Section 15.1 of the SAA, the parties expressly

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empowered the Court to correct any defective provision in order to approximate the manifest

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intent of the parties. Indeed, even the U.S. Supreme Court has expressly acknowledged that

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failure to confer standing upon an assignee of an accrued claim “could easily be overcome” by

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rewriting the agreement. See Sprint Communications Co., L.P., 554 U.S. at 289. Thus, it would

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be illogical to hold that such revisions constitute fraud upon this Court. Accordingly,

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Democratic Underground’s argument should be rejected.

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III.

CONCLUSION
For the foregoing reasons, Righthaven respectfully requests the Court grant it request to

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intervene as of right pursuant to Rule 24(a)(2) in this action. Righthaven additionally requests

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the Court grant such other relief as it deems just and proper.

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Dated this 5th day of August, 2011.

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SHAWN A. MANGANO, LTD.

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By: /s/ Shawn A. Mangano
SHAWN A. MANGANO, ESQ.
Nevada Bar No. 6730
[e-mail]
9960 West Cheyenne Avenue, Suite 170
Las Vegas, Nevada 89129-7701
Tel: [phone]
Fax: [phone]

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KIRKLAND & ELLIS LLP
DALE M. CENDALI, ESQ. (admitted pro hac vice)
[e-mail]
601 Lexington Avenue
New York, New York 10022
Tel: [phone]
Fax: [phone]
Attorneys for Righthaven LLC

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CERTIFICATE OF SERVICE
Pursuant to Federal Rule of Civil Procedure 5(b), I hereby certify that I on this 5th day of
August, 2011, I caused the foregoing document to be served by the Court’s CM/ECF system.

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By: /s/ Shawn A. Mangano
SHAWN A. MANGANO, ESQ.

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