Capitol Records, LLC v. Redigi Inc.

Filing 136

REPLY MEMORANDUM OF LAW in Support re: 126 MOTION to Dismiss Notice of Individual Defendants' Motion to Dismiss the First Amended Complaint.. Document filed by John Ossenmacher, Larry Rudolph. (Gassman, Seth)

IN THE UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

CAPITOL RECORDS, LLC,

12-CV-00095 (RJS)

Plaintiff,
v.
REDIGI INC., JOHN OSSENMACHER, and
LARRY RUDOLPH a/k/a LAWRENCE S.
ROGEL,
Defendants.

REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF
INDIVIDUAL DEFENDANTS’ MOTION TO DISMISS
PLAINTIFF’S FIRST AMENDED COMPLAINT

TABLE OF CONTENTS
PRELIMINARY STATEMENT .................................................................................................... 1
ARGUMENT .................................................................................................................................. 2
A.

The First Amended Complaint Fails to State Claims Against the Individual
Defendants and Should be Dismissed. .................................................................... 2
1.
2.

Plaintiff Must Do More Than Simply Plead that the Individual Defendants
“Participated, Controlled, or Benefited” From The Corporation’s Infringement. .. 5

3.

Collective-Style Pleading Cannot Save Plaintiff’s First Amended Complaint. ..... 6

4.
B.

Plaintiff’s Opposition Inappropriately Attempts to Transform the Individual
Defendants’ Motion to Dismiss into a Motion for Partial Summary Judgment. .... 2

The Complaint Fails to Adequately Plead the Elements of Each Claim Allegedly
Brought Against the Individual Defendants ........................................................... 7
The First Amended Complaint Should be Dismissed with Prejudice..................... 8

CONCLUSION ............................................................................................................................. 10

- ii -

TABLE OF AUTHORITIES
Page(s)
CASES
Arista Records LLC v. Lime Group LLC,
784 F. Supp. 2d 398 (S.D.N.Y. 2011)........................................................................................6
Arista Records LLC v.Usenet.com, Inc.,
633 F. Supp. 2d 124 (S.D.N.Y. 2009) ...................................................................................6, 7
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) ...........................................................................................................5, 6, 8
Capitol Records, Inc. v. Wings Digital Corp.,
218 F. Supp. 2d 280 (E.D.N.Y. 2002) .......................................................................................6
Cartier, Inc. v. Four Star Jewelry Creations, Inc.,
No. 01 Civ. 11295, 2004 WL 169746 (S.D.N.Y. Jan. 28, 2004) .........................................9, 10
Chambers v. Time Warner, Inc.,
282 F.3d 147 (2d Cir. 2002).......................................................................................................3
Channer v. Loan Care Service Center,
No. 3:11cv135, 2011 WL 5238878 (D. Conn. Nov. 1, 2011) ...................................................4
Conley v. Gibson,
355 U.S. 41 (1957) .....................................................................................................................6
Cortec Indust., Inc. v. Sum Holding L.P.,
949 F.2d 42 (2d Cir. 1991).....................................................................................................1, 3
Global Network Commc’ns, Inc. v. City of New York,
458 F.3d 150 (2d Cir. 2006).......................................................................................................4
Goldman v. Belden,
754 F.2d 1059 (2d Cir. 1985).....................................................................................................4
In re Bear Stearns Cos., Inc. Sec., Derivative, & ERISA Litig.,
763 F. Supp. 2d 423 (S.D.N.Y. 2011)........................................................................................5
Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger U.S.A., Inc.,
146 F.3d 66 (2d Cir. 1998).........................................................................................................4
Michael Aram, Inc. v. Laurey,
No. 05 Civ. 8380, 2006 WL 510527 (S.D.N.Y. Mar. 1, 2006) .................................................6
Mosdos Chofetz Chaim, Inc. v. Vill. of Wesley Hills,
815 F. Supp. 2d 679 (S.D.N.Y. 2011)........................................................................................5
- iii -

Roth v. Jennings,
489 F.3d 499 (2d Cir. 2007)...................................................................................................3, 4
Smart v. Goord,
441 F. Supp. 2d 631 (S.D.N.Y. 2006)........................................................................................4
Spence v. Senkowski,
No. 91-CV-955, 1997 WL 394667 (N.D.N.Y. July 3, 1997) ....................................................4
Sun Micro Medical Technologies Corp. v. Passport Health Communications, Inc.,
No. 06 Civ. 2083, 2007 WL 2230082 (S.D.N.Y. July 31, 2007) ..............................................4
Thomas v. Westchester Cnty. Health Care Corp.,
232 F. Supp. 2d 273 (S.D.N.Y. 2002)....................................................................................3, 4
Tokio Marine v. Canter,
No. 07 Civ. 5599, 2009 WL 2461048 (S.D.N.Y. Aug. 11, 2009) .............................................4
United States v. Int'l Longshoremen's Ass'n,
518 F. Supp. 2d 422 (E.D.N.Y. 2007) .......................................................................................7
RULES
Federal Rule of Civil Procedure 8 ...............................................................................................6, 7

- iv -

PRELIMINARY STATEMENT
In an attempt to overcome the failings of the First Amended Complaint (“Complaint”)
that Mr. Ossenmacher and Prof. Rudolph (the “Individual Defendants”) identified in their
Memorandum of Law in support of their Motion to Dismiss (hereinafter “Motion” or MTD”),
ECF No. 127, Plaintiff Capitol Records, LLC (“Plaintiff”) improperly seeks to interject
purported evidence into its opposition brief that, if anything, is most notable for its complete
absence from the Complaint itself. See Mem. of Law in Opp. to Individual Defs.’ Mot. to
Dismiss Pl.’s First Am. Compl. 5, ECF No. 133 (hereinafter “Opposition” or “Pl.’s Opp.”) (i.e.,
the summary judgment record). Plaintiff’s inappropriate attempt to have the Court overcome
these missing allegations by examining the summary judgment record (instead of the Complaint)
is all but a concession that the Complaint is devoid of the specific allegations necessary to state a
claim against the Individual Defendants. As the Second Circuit has explained, a “plaintiff should
not so easily be allowed to escape the consequences of its own failure.” Cortec Indust., Inc. v.
Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991).
When stripped of this improper “evidence,” the reality of Plaintiff’s Complaint becomes
obvious: it contains only two conclusory allegations that make any reference to the Individual
Defendants. Am. Compl. ¶ 33; 37. As explained in the Individual Defendants’ Motion, such
cursory allegations are insufficient to satisfy Twombly/Iqbal. Further, even if this Court considers
Plaintiff’s un-pled allegations (which, as explained below, it should not), Plaintiff still fails to
point the Court to the specific facts needed to state each claim it is attempting to pursue against
the Individual Defendants. Therefore, dismissal of the Complaint would still be appropriate.
Nor should Plaintiff be allowed to amend its failed pleading for a second time. Plaintiff
already had the opportunity to state its allegations against the Individual Defendants with

1

particularity and either could not or chose not to do so in a legally sufficient manner. Plaintiff’s
contention that it will be prejudiced by ReDigi’s supposed inability to pay if not permitted to
replead is without foundation. This Court should not give Capital another opportunity to do what
it could have tried to do months ago and which has already delayed the ultimate resolution of the
legal and factual issues in this case. If Plaintiff truly had the facts available to assert viable
claims against the Individual Defendants, it should have done so at its first opportunity, and as
explained in the Individual Defendants’ Motion, the onus of Plaintiff’s pleading failure falls on
the Plaintiff and not on the Individual Defendants or this Court.
ARGUMENT
A.

The First Amended Complaint Fails to State Claims Against the Individual
Defendants and Should be Dismissed.
1. Plaintiff’s Opposition Inappropriately Attempts to Transform the Individual
Defendants’ Motion to Dismiss into a Motion for Partial Summary Judgment.
Instead of reviewing the Complaint and the allegations as pled, Plaintiff argues that this

Court should instead consider the vast summary judgment record – including the Court’s Order,
the documents filed in connection with the cross-motions, and the declarations previously filed
by the Individual Defendants. Pl.’s Opp. at 3-10. This material is not properly before the Court
on the instant motion. And even if these materials did support Plaintiff’s allegations (which
Individual Defendants dispute), one has to wonder why Plaintiff ultimately failed to include them
in its Complaint. The Individual Defendants are unable to respond to (and seek dismissal of)
allegations that are not actually made against them, but instead, only referred to generically in
the record, and they should not be forced to defend against Plaintiff’s vague and amorphous
assertions that the bases for its claims lie somewhere in the vast record before the Court.
In order to make use of documents outside the four corners of the complaint in opposing
a motion to dismiss, a “plaintiff's reliance on the terms and effect of a document in drafting the
2

complaint is . . . necessary . . . ; mere notice or possession is not enough.” Chambers v. Time
Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (emphasis in original) (citing Cortec, 949 F.2d at
47-48). Plaintiff here does contend that it “relied” on any of these newly cited documents in
drafting its Complaint – nor could it. As the Individual Defendants explained in their opening
Motion, the Complaint is a near-complete facsimile of the original complaint written prior to the
existence of the very materials on which Plaintiff would now have to contend that it relied. See
MTD at 11. Plaintiff’s lack of any specific reliance in drafting the Complaint on the outside
documents it now seeks to have this Court consider is fatal to its argument. Nearly the entire
Complaint, save the two conclusory and wholly insufficient paragraphs referenced above, is cut
and pasted from the initial complaint except that “Defendant” was changed to “Defendants.”
Even if Plaintiff, contrary to temporal logic, relied on these unreferenced materials in
drafting its Complaint, the Court could only consider them in evaluating a motion to dismiss in
three narrow exceptions to the general rule that extraneous materials should not be considered on
a motion to dismiss: (1) where the document is integral to the complaint; 1 (2) where the
document is incorporated by reference; or (3) where judicial notice may be taken of the
document. Plaintiff contends only that the judicial notice exception applies. 2 See Pl. Opp. at 8. It

1

Plaintiff does not contend that the integral exception applies here. While “a document ‘upon
which [the complaint] solely relies and which is integral to the complaint’ may be considered by
the court in ruling on such a motion,” Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007)
(quoting Cortec, 949 F.2d at 47) (emphasis in original), materials are only “integral” where the
complaint “is replete with references to” those materials and “requests judicial interpretation of
their terms.” Chambers, 282 F.3d at 153 n.4. The Complaint does not meet this high standard.
2

Plaintiff also states, without citation to a single authority, that Paragraph 37 of the Complaint
incorporates “the Court’s detailed descriptions and analysis of the ReDigi service in its summary
judgment opinion.” Pl.’s Opp. at 7. But “[t]o be incorporated by reference, the [c]omplaint must
make a clear, definite and substantial reference to the documents.” Thomas v. Westchester Cnty.
Health Care Corp., 232 F. Supp. 2d 273, 275 (S.D.N.Y. 2002). In practice, this means that the
complaint must identify the specific material that it seeks to incorporate and make repeated and
3

does not, nor do any of the other exceptions apply.
In general, a court can take judicial notice of “records and reports of administrative
bodies, items in the record of the case, matters of general public record, and copies of documents
attached to the complaint.” Smart v. Goord, 441 F. Supp. 2d 631, 637 (S.D.N.Y. 2006) (citing
Calcutti v. SBU, Inc., 224 F. Supp. 2d 691, 696 (S.D.N.Y. 2002)). If the court takes judicial
notice, however, it only does so “in order ‘to determine what statements [they] contained’ – but
‘again not for the truth of the matters asserted.’” Roth, 489 F.3d at 510 (quoting Kramer v. Time
Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991)) (emphasis in original); see also Int'l Star Class
Yacht Racing Ass'n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d 66, 70 (2d Cir. 1998). Thus, for
example, the Second Circuit has reversed district courts that consider “extraneous documents . . .
to provide the reasoned basis for [their] conclusion . . . .” Global Network Commc’ns, Inc. v. City
of New York, 458 F.3d 150, 157 (2d Cir. 2006).
The judicial notice exception does not apply here, and even if it did, this Court could not
properly consider the documents to strengthen the insufficient allegations of the Complaint as
Plaintiff suggests. 3 This is not the prototypical situation where a defendant asks a court to take

frequent quotations to that material. Id.; see also Goldman v. Belden, 754 F.2d 1059, 1066 (2d
Cir. 1985). The Complaint here fails to do so.
3

Plaintiff’s cases arguing that judicial notice is appropriate are inapposite. The court in Sun
Micro Medical Technologies Corp. v. Passport Health Communications, Inc., No. 06 Civ. 2083,
2007 WL 2230082 (S.D.N.Y. July 31, 2007), for example, only considered the allegations
contained within the four corners of the complaint when reaching its conclusion. Channer v.
Loan Care Service Center, No. 3:11cv135, 2011 WL 5238878 (D. Conn. Nov. 1, 2011), involved
materials that were actually attached to the defendants’ briefing. The court in Tokio Marine v.
Canter, No. 07 Civ. 5599, 2009 WL 2461048 (S.D.N.Y. Aug. 11, 2009), took judicial notice of a
stipulation filed in a state court proceeding involving the same parties or their privies only in
order to determine whether the plaintiff’s federal lawsuit was barred by res judicata. And in
Spence v. Senkowski, No. 91-CV-955, 1997 WL 394667 (N.D.N.Y. July 3, 1997), the defendants
attached an affidavit previously filed by the plaintiff in the same case in support of their motion
4

judicial notice of an extraneous document in order to support its motion to dismiss. See, e.g., In
re Bear Stearns Cos., Inc. Sec., Derivative, & ERISA Litig., 763 F. Supp. 2d 423 (S.D.N.Y.
2011); Mosdos Chofetz Chaim, Inc. v. Vill. of Wesley Hills, 815 F. Supp. 2d 679 (S.D.N.Y.
2011). Instead, Plaintiff (the author and master of its own Complaint) makes the extraordinary
and unprecedented request for this Court to take judicial notice of materials it never relied upon
or referenced in order to save its own Complaint from dismissal – materials that it could have
(and should have, if able) cited and quoted so that Mr. Ossenmacher and Prof. Rudolph could
truly understand the nature of the claims asserted against them. Plaintiff’s novel “hide the ball”
approach is improper and it has not cited a single case where a plaintiff was permitted or even
sought to do what it is attempting to do here. Moreover, Plaintiff essentially concedes that the
statements made in these extraneous documents would need to be taken as true. See Pl.s’ Opp. at
4-5; 12-15; 17-19. 4 But this is improper, and Plaintiff cannot preserve its inadequate Complaint
by asking this Court to take judicial notice of materials for their supposed truth.
2. Plaintiff Must Do More Than Simply Plead that the Individual Defendants
“Participated, Controlled, or Benefited” From The Corporation’s Infringement.
Despite conceding that Twombly applies in copyright infringement actions, Pl.’s Opp. at
9, Plaintiff claims that it only needs to allege that ReDigi’s directors “personally participated in,
exercised control over, or benefited from” the corporation’s infringement, and that its Complaint
meets this low standard. Pl.’s Opp. at 10-15. But this is wrong, as such a conclusory allegation is

to dismiss. Plaintiff has not cited a single case supporting its argument that judicial notice of
extraneous documents can be taken in opposition to a motion to dismiss.
4

For instance, Plaintiff states, “The FAC is further bolstered by Ossenmacher’s and Rudolph’s
multiple declarations attesting to their very personal roles in inventing, implementing, managing
and operating the service and each of its component elements found to infringe.” Pl.’s Opp. at
12. For the reasons set out above, the content of these statements cannot be considered for their
truth but only, if at all, for the fact that Mr. Ossenmacher and Prof. Rudolph submitted
declarations. These submissions cannot provide support for Capital’s insufficient Complaint.
5

precisely the type of threadbare recital of a claim’s elements that Twombly held to be
insufficient. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is unsurprising then, that
Plaintiff relies on just two easily distinguishable motion to dismiss cases. 5 And Plaintiff’s
primary summary judgment cases, Lime Group and Usenet, are wholly distinguishable as they
involved specific findings of fact that Plaintiff has failed to allege in its own Complaint. 6
In comparison, Mr. Ossenmacher and Prof. Rudolph have provided this court with three
factually similar cases that Plaintiff fails to adequately distinguish. See MTD at 7-9. The futility
of Plaintiff’s adequate pleading argument forces it to come back to the summary judgment record
in its concluding remarks of this section (Pl.’s Opp. at 15), which, for the reasons stated above,
may not be considered at this juncture. Consequently, Plaintiff’s second argument also fails.
3. Collective-Style Pleading Cannot Save Plaintiff’s First Amended Complaint.
Plaintiff’s third argument is that it can rely on collective-style pleading, and that it is

5

Plaintiff only relies on two motion to dismiss cases in this section of its Opposition: Michael
Aram, Inc. v. Laurey, No. 05 Civ. 8380, 2006 WL 510527 (S.D.N.Y. Mar. 1, 2006) and Capitol
Records, Inc. v. Wings Digital Corp., 218 F. Supp. 2d 280 (E.D.N.Y. 2002). Michael Aram is
easily distinguishable inasmuch as it relied on the Second Circuit’s Twombly standard (later
overturned by the Supreme Court) in concluding that the complaint was sufficient. 2006 WL
510527, at *3. Similarly, Wings turned on a pre-Twombly interpretation of Rule 8 notice pleading
that is no longer tenable. 218 F. Supp. 2d at 284 (relying on Conley v. Gibson, 355 U.S. 41, 47
(1957), which was explicitly overruled in Twombly to find pleading sufficient). In addition, the
individual defendant in Wings was alleged to be the 100% shareholder of the corporate defendant
and had financially benefited from the copyrighting activity. No such financial interest benefit
allegation is present here, MTD at 13, and Plaintiff does not credibly argue to the contrary.
6

See, e.g., Arista Records LLC v. Lime Group LLC, 784 F. Supp. 2d 398, 438 (S.D.N.Y. 2011)
(“The evidence establishes that [the individual defendant] . . . benefited from many of the
activities that gave rise to [the corporate defendant’s] liability. . . . This evidence, taken together,
also establishes that the [individual defendant] knew about the infringement being committed
through [the corporate defendant’s service].”); Arista Records LLC v.Usenet.com, Inc., 633 F.
Supp. 2d 124, 158 (S.D.N.Y. 2009) (“[One corporate defendant] has never had employees;
rather, its business is carried out by [the other corporate defendant’s] employees, all of whom
(besides [the individual defendant]) were terminated by August 2008. [The individual defendant]
is the director and sole shareholder of both companies, and he and other employees of [one
corporate defendant] have expressly admitted his ubiquitous role in the companies’ activities.”).
6

“abundantly clear” that its allegations against “Defendants” encompass ReDigi and the
Individual Defendants. Pl.’s Opp. at 15-16. As with Plaintiff’s other arguments, this section of its
Opposition relies on one distinguishable summary judgment holding (Usenet). Plaintiff is unable
to cite a single motion to dismiss case that supports its position. Because the Usenet court made
specific findings of fact on the evidentiary record at summary judgment, 633 F. Supp. 2d at 158,
and no such evidentiary record (at least as to the Individual Defendants) exists here, the case is
inapposite. The collective pleading cases cited in the Individual Defendants’ Motion – all of
which held that this form of pleading was inappropriate at this stage of the case – bear far more
resemblance to the present case than Plaintiff’s sole summary judgment decision. This Court
should similarly conclude that Plaintiff’s collective pleading is inappropriate. 7
4. The Complaint Fails to Adequately Plead the Elements of Each Claim Allegedly
Brought Against the Individual Defendants
Plaintiff’s final argument is that “there is no need to set out separately and redundantly
that Ossenmacher and Rudolph ‘personally participated in,’ ‘directed,’ or ‘supervised’ each act
described in each paragraph,” and that the complaint adequately states a claim for each of its
asserted claims against them. Id. at 16-19. By its own terms, this section of Plaintiff’s Opposition
also turns on the Court first taking inappropriate judicial notice of its summary judgment order
and then using its opinion, for the truth of the matters asserted therein, to make certain findings
against Mr. Ossenmacher and Prof. Rudolph as if such assertions had been fully pled in the
Complaint. Pl.’s Opp. at 16-17. Because the Court cannot use the summary judgment order for
7

Plaintiff’s attempt to incorporate the paragraphs preceding its single allegation against both
Individual Defendants, Pl.’s Opp. at 7, fails for this reason as well. See United States v. Int'l
Longshoremen's Ass'n, 518 F. Supp. 2d 422, 463 n. 75 (E.D.N.Y. 2007) (“[T]he practice of
simply incorporating factual allegations en masse . . . against numerous defendants has been held
to violate Rule 8(a)(2) even where the factual allegations at issue were incorporated from an
earlier portion of the complaint rather than from an external document.”) (citing Discon Inc. v.
NYNEX Corp., No. 90-CV-546A, 1992 WL 193683, at *16 (W.D.N.Y. June 23, 1992); Koch v.
Hickman, No. CV F 06-171 AWI SMS P, 2007 WL 586695, at *2 (E.D. Cal. Feb. 22, 2007)).
7

this purpose and because Plaintiff does not seriously contend that its allegations, absent the
summary judgment order, satisfy Twombly, 8 Plaintiff’s last argument fails.
Even if the Court considers the summary judgment record, however, Plaintiff has still
failed to state tenable claims against the Individual Defendants. For instance, Plaintiff can point
to no documents showing the Individual Defendants’ supposed financial interest in the infringing
acts, and instead asks the Court to imply such benefit based on three summary judgment cases.
Pl.’s Opp. at 18 (citing cases). Similarly, Plaintiff directs the Court to no documents supporting
an assertion that the Individual Defendants had actual knowledge that ReDigi allegedly infringed
on Plaintiff’s copyrights, and instead only quote a portion of the summary judgment order stating
that the Individual Defendants “presumably understood the likelihood” of infringement. Pl.’s
Opp. at 18 (emphasis added). This statement is hardly the same as a finding (or even allegation)
of actual knowledge. Finally, Plaintiff cannot allege that Mr. Ossenmacher and Prof. Rudolph
acted with scienter, regardless of whether they inappropriately rely on the summary judgment
record. Consequently, Plaintiff’s Complaint fails to satisfy Twombly even if the Court considers
this inappropriate summary judgment evidence and dismissal is warranted.
B. The First Amended Complaint Should be Dismissed with Prejudice.
In its Opposition, Plaintiff reveals its sole motivation for adding the Individual
Defendants to the complaint: ReDigi’s supposed inability “to cover the substantial liability it
faces for its infringing conduct.” Pl.’s Opp. at 21. This is a legally insufficient reason to allow
Plaintiff yet another opportunity to amend the Complaint this late in the litigation, and
consequently, dismissal with prejudice is warranted.
8

See Pl.’s Opp. at 17-19 (citing the Court’s summary judgment order for each of the claims it is
apparently pursuing against Mr. Ossenmacher and Prof. Rudolph); Id. at 19 (citing the same preTwombly motion to dismiss cases in support of this argument that are easily distinguishable for
the reasons set out in note 5, infra).
8

In Cartier, Inc. v. Four Star Jewelry Creations, Inc., No. 01 Civ. 11295, 2004 WL
169746 (S.D.N.Y. Jan. 28, 2004), the plaintiffs sought to amend their complaint for a second
time – two years after the initial complaint was filed, and after discovery had been completed –
in order “to add the Presidents and Vice Presidents of the three corporate defendants on the
theory that a corporate officer is individually liable for the torts the officer commits.” Plaintiffs
there specifically noted that they were concerned about the corporate defendant’s ability and
willingness to pay any monetary award. Id. at **2-3. Judge Motley denied plaintiffs another
opportunity to amend their complaint, concluding that this lapse in time constituted undue delay:
The factual possibility that a corporate defendant will not be able to satisfy a
money judgment attends every litigation. Further, the theory for relief against the
proposed defendants that plaintiffs advocate for was known to them at the time
they filed their initial and first amended complaints. Given that the facts and the
theory were known to the plaintiffs previously, and they do not offer a foundation
to explain their sudden preoccupation with defendants’ seeming inability or
unwillingness to pay, the court is not persuaded that the plaintiffs have provided a
satisfactory and valid reason for their delay.
Id. at *3 (citing cases). Judge Motley found that the corporate defendants’ reliance on the
plaintiffs’ theory for two years coupled with the above established that the defendants would be
unduly prejudiced if it allowed plaintiffs to add the individual defendants to their second
amended complaint. Id. at *4.
This case is on all fours with Cartier. Just as in Cartier, the Plaintiff here sought to add
corporate officers to the action nearly two years after the initial complaint was filed and after
discovery is all-but complete. Here, despite knowing that Mr. Ossenmacher and Prof. Rudolph
were directors of ReDigi at least since February 15, 2012 (when ReDigi served its initial
disclosures on Plaintiff), Plaintiff only sought to add Mr. Ossenmacher and Prof. Rudolph as
defendants on August 9, 2013 – 541 days later – well after it had succeeded on its summary
judgment motion against ReDigi. As in Cartier, the Plaintiff here sought leave to amend to add

9

the Individual Defendants because, allegedly, “ReDigi itself has insufficient funds to satisfy even
a modest damage award in this case.” Finally, like in Cartier, the facts underlying the Individual
Defendants’ alleged liability were known well before Plaintiff sought to add them to the action.
While the Court previously granted Plaintiff the opportunity it requested to add Mr.
Ossenmacher and Prof. Rudolph as defendants in this matter, Plaintiff’s pleading was wholly
deficient, and this Court should not allow Plaintiff yet another opportunity to further delay this
case. Moreover, another amendment would be futile because, as discussed above, Plaintiff has
pointed to nothing in the summary judgment record (even if it was allowed another opportunity
to actually plead it into the Complaint) that could plausibly allege that Individual Defendants’
were personally liable for any of ReDigi’s actions.
Plaintiff’s decision not to seek to add Mr. Ossenmacher and Prof. Rudolph as parties until
after it had won its motion for partial summary judgment and after discovery was all but over
(and then, only in a conclusory and unsupported pleading) constitutes inexcusable and undue
delay and is highly prejudicial. This Court should conclude, as did the court in the Cartier, that
Plaintiff knew of the facts and theories with respect to the Individual Defendants much earlier in
this action or that such a repleading would be futile. Leave to replead should be denied.
CONCLUSION
For the foregoing reasons, the Individual Defendants respectfully request the Court grant
their motion in its entirety and dismiss the Amended Complaint, as against them, with prejudice.
Dated: October 18, 2013

/s/ Seth R. Gassman
Seth R. Gassman (SG-8116)
James J. Pizzirusso (admitted pro hac vice)
Nathaniel C. Giddings (admitted pro hac vice)
HAUSFELD LLP
1700 K Street, N.W., Suite 650
Washington, D.C. 20006
Counsel for Mr. John Ossenmacher & Prof. Larry Rudolph

10