Capitol Records, LLC v. Redigi Inc.

Filing 154

REPLY MEMORANDUM OF LAW in Support re: 149 MOTION for Reconsideration re; 148 Memorandum & Opinion,,, Notice of Motion of Individual Defendants' Motion for Reconsideration. . Document filed by John Ossenmacher, Larry Rudolph. (Attachments: # 1 Certificate of Service)(Giddings, Nathaniel)

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 SUPPORT OF
INDIVIDUAL DEFENDANTS’
MOTION FOR RECONSIDERATION

TABLE OF CONTENTS
I.

PRELIMINARY STATEMENT ......................................................................................... 1

II. ARGUMENT ......................................................................................................................... 1
A.

MOTIONS FOR RECONSIDERATION ARE APPROPRIATE IN CASES SUCH AS THIS. ................ 1
1.

Overlooked Controlling Case Law Warrants Reconsideration. ..................................... 1

2.

The Likelihood of Reversal Warrants Reconsideration. ................................................. 2

B. PLAINTIFF MISSTATES THE STANDARDS FOR ADEQUATELY PLEADING OFFICER/DIRECTOR
LIABILITY IN COPYRIGHT ACTIONS. ............................................................................................. 4
C. THE AMENDED COMPLAINT FAILS TO PLEAD REQUISITE ELEMENTS OF EACH OF ITS
CLAIMS AGAINST THE INDIVIDUAL DEFENDANTS. ....................................................................... 5
1.
2.

The Contributory Infringement Claim. ........................................................................... 7

3.

The Vicarious Liability Claim......................................................................................... 8

4.
D.

The Inducement to Infringe Claim. ................................................................................. 6

The Direct Infringement Claim. ...................................................................................... 9
PLAINTIFF WAIVED ANY RIGHT TO REPLEAD. ................................................................... 10

III. CONCLUSION ................................................................................................................... 10

i

TABLE OF AUTHORITIES
Page(s)
CASES
Ashcroft v. Iqbal,
556 U.S. 662 (2009) ...................................................................................................................4
Banff Ltd. v. Limited, Inc.,
869 F. Supp. 1103 (S.D.N.Y. 1994)...........................................................................................8
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) ...................................................................................................................4
Broadcast Music, Inc. v. Haibo, Inc.,
10-CV-240S, 2012 WL 843424 (W.D.N.Y. Mar. 12, 2012) .....................................................4
Brown v. City of Oneonta, N.Y.,
858 F. Supp. 340 (N.D.N.Y. 1994) ............................................................................................2
Buttnugget Publ’g v. Radio Lake Placid, Inc.,
807 F. Supp. 2d 100 (N.D.N.Y. 2011) .......................................................................................5
Crystal Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc.,
246 F.3d 1336 (Fed. Cir. 2001)..................................................................................................9
Flava Works, Inc. v. Clavio,
No. 11 C 05100, 2012 WL 2459146 (N.D. Ill. June 27, 2012) .................................................6
Friedl v. City of New York,
210 F.3d 79 (2d Cir. 2000).........................................................................................................3
Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc.,
443 F.2d 1159 (2d Cir.1971)..................................................................................................7, 9
Granite Music Corp. v. Ctr. St. Smoke House, Inc.,
786 F. Supp. 2d 716 (W.D.N.Y. 2011) ......................................................................................5
Green v. McLaughlin,
480 F. App’x 44 (2d Cir. 2012) .................................................................................................3
Hudson v. Imagine Entm’t Corp.,
128 F. App’x 178 (2d Cir. 2005) ...............................................................................................6
In re Jiangbo Pharm., Inc., Sec. Litig.,
884 F. Supp. 2d 1243 (S.D. Fla. 2012) ......................................................................................5
In re MF Global Holdings Ltd. Inv. Litig.,
No. 11 CIV. 7866 (VM), 2014 WL 667481 (S.D.N.Y. Feb. 11, 2014) .....................................6
ii

J & J Sports Prods., Inc. v. Daley,
No. 06–CV–0238, 2007 WL 7135707 (E.D.N.Y. Feb. 15, 2007) .............................................8
Kajoshaj v. New York City Dep’t of Educ.,
543 F. App’x 11 (2d Cir. 2013) ...............................................................................................10
Klatch-Maynard v. ENT Surgical Assocs. Hazleton Health & Wellness Ctr.,
404 F. App’x 581 (3d Cir. 2010) .............................................................................................10
Luft v. Crown Publishers, Inc.,
772 F. Supp. 1378 (S.D.N.Y. 1991)...........................................................................................9
Matthew Bender & Co. v. West Publ’g Co.,
158 F.3d 693 (2d Cir. 1998).......................................................................................................7
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
545 U.S. 913 (2005) ...................................................................................................................6
NCR Corp. v. Korala Assocs., Ltd.,
512 F.3d 807 (6th Cir. 2008) .....................................................................................................5
Ng v. HSBC Mortgage Corp.,
07-CV-5434 RRM VVP, 2014 WL 4699648 (E.D.N.Y. Sept. 22, 2014) .................................2
Outsource Servs. Mgmt., LLC v. Ginsburg,
Civ. No. 08-5897 DWF FLN, 2010 WL 5088190 (D. Minn. Dec. 7, 2010) .............................6
Paige v. New York City Police Dep’t,
10- CV-3773 (SLT) (LB), 2012 WL 1118012 (E.D.N.Y. Mar. 30, 2012) ................................4
Singh v. Wells,
445 F. App’x 373 (2d Cir. 2011) ...............................................................................................3
Too, Inc. v. Kohl’s Dep’t Stores, Inc.,
213 F.R.D. 138 (S.D.N.Y. 2003) ...............................................................................................5
STATUTES
15 U.S.C.A. § 78t .............................................................................................................................5
OTHER AUTHORITIES
6 Patry on Copyright § 22:196 .........................................................................................................5
Charles S. Wright, Actual Versus Legal Control: Reading Vicarious Liability for
Copyright Infringement into the Digital Millennium Copyright Act of 1998, 75 Wash.
L. Rev. 1005, 1010 (2000) .........................................................................................................5

iii

Mr. John Ossenmacher and Prof. Larry Rudolph (the “Individual Defendants”)
respectfully submit this reply memorandum of law in further support of their motion for
reconsideration of this Court’s September 2, 2014 Opinion and Order, ECF No. 148 (“Order”).
I.

PRELIMINARY STATEMENT
In response to the Memorandum of Law in Support of Individual Defendants’ Motion for

Reconsideration, ECF No. 150 (filed Sept. 16, 2014) (hereinafter “Memorandum”), Plaintiff,
Capitol Records, LLC (“Plaintiff” or “Capitol”) has submitted an opposition brief that largely
(and sometimes altogether) ignores the arguments made in the Memorandum. Pl.’s Mem. in Opp.
to Individual Defs.’ Mot. for Reconsideration, ECF No. 153 (filed Sept. 30, 2014) (hereinafter
“Opposition”). To the extent Plaintiff’s Opposition actually addresses the Individual Defendants’
arguments, it ignores the well-settled law the Individual Defendants cited in the Memorandum
(and overlooked by this Court) in favor of Plaintiff’s desired version of what the law should be.
As explained in further detail below, Individual Defendants’ Motion should be granted and this
case should be dismissed against them with prejudice.
II.

ARGUMENT
A.

Motions for Reconsideration are Appropriate in Cases Such as This.

As previously discussed, reconsideration of this Court’s Order is appropriate for two
distinct reasons: (1) controlling case law mandates a different result, and (2) the likelihood of
reversal on appeal. Plaintiff’s Opposition only addresses the former, and in so doing, concedes
the latter. This alone is sufficient to warrant reconsideration.
1.

Overlooked Controlling Case Law Warrants Reconsideration.

As Plaintiff acknowledges, reconsideration is appropriate where ‘“the moving party can
point to controlling decisions or data that the court overlooked – matters, in other words, that
might reasonably be expected to alter the conclusion reached by the Court.” Opp. at 2 (quoting
1

Schrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995)); see also Mem. at 4 (quoting the
same). Individual Defendants previously referenced binding precedent requiring this Court to
determine whether Plaintiff had pled sufficient facts establishing each element of each claim
against the Individual Defendants, Mem. at 4-6, and argued that because Plaintiff had failed to do
so for each of its claims, dismissal of each claim was warranted. Mem. at 6-17. That is,
Individual Defendants set forth an appropriate basis for reconsideration.
Rather than attempting to refute the holdings of the cases cited by Individual Defendants,
however, Plaintiff’s Opposition takes the same position it took in its motion to dismiss briefing:
because Your Honor found ReDigi liable for copyright infringement, it must necessarily find the
Individual Defendants liable regardless of how thin the allegations against them may be and
regardless of whether those allegation actually plead the necessary elements of each claim
against Individual Defendants. See Opp. at 4; Mem. of Law in Opp. to Individual Defs.’ Mot. to
Dismiss First Am. Compl. 10, ECF No. 133 (filed Oct. 4, 2013) (hereinafter “Original
Opposition”). This is not the law under Supreme Court and Second Circuit precedent, and
because the Court previously accepted Plaintiff’s incorrect position, 1 reconsideration is
appropriate. See, e.g., Brown v. City of Oneonta, N.Y., 858 F. Supp. 340, 345 (N.D.N.Y. 1994)
(reconsidering the prior denial of a motion to dismiss a section 1981 claim and finding that
reconsideration and dismissal was appropriate because plaintiffs had failed to plead a factual
basis for a requisite element of their claim).
2.

The Likelihood of Reversal Warrants Reconsideration.

Reconsideration is also appropriate for a second reason: the likely reversal of this Court’s
order. See Ng v. HSBC Mortgage Corp., 07-CV-5434 RRM VVP, 2014 WL 4699648, at *3
1

See Order at 5 (“At least for the purposes of this motion, there is no need to separately
plead the elements of the infringing activities as to the Individual Defendants: their liability is
predicated on their direction of and supervision over ReDigi’s infringing activity”).
2

(E.D.N.Y. Sept. 22, 2014) (holding that reconsideration is appropriate where “there is a strong
likelihood that the district court’s decision would ultimately be reversed on appeal.”). As argued
in the Memorandum (and never refuted, let alone discussed, in Plaintiff’s Opposition), 2
Individual Defendants submit that this Court could not have reached the conclusion it did
without inappropriately relying on its summary judgment order (and the corresponding record)
pertaining to ReDigi; this alone warrants reconsideration. Mem. at 17-18.
This Court’s apparent reliance on the summary judgment record of a co-defendant during
a motion to dismiss warrants reversal of this Court’s Order, as “[v]acatur is required even where
the court’s ruling simply mak[es] a connection not established by the complaint alone or contains
an unexplained reference that raises the possibility that it improperly relied on matters outside
the pleading in granting the defendant’s Rule 12(b) motion.” Friedl v. City of New York, 210
F.3d 79, 83-84 (2d Cir. 2000) (internal citations and quotations omitted) (alternations in original)
(emphasis added). Indeed, the mere fact that the Court “assume[d] the parties’ familiarity with
the facts . . . as set forth in the Court’s summary judgment Order,” and did not affirmatively
disclaim any reliance on the summary judgment record (despite the propriety of such being
briefed by the parties) is likely sufficient to warrant reversal. Compare Green v. McLaughlin,
480 F. App’x 44, 49 (2d Cir. 2012) (affirming the dismissal of a complaint where “the district
court clearly chose to exclude the additional material attached to the defendants’ motion to
dismiss”) (emphasis added); Singh v. Wells, 445 F. App’x 373, 376 (2d Cir. 2011) (noting that
the district court “expressly stated that it would not consider” materials beyond the pleadings in

2

As discussed herein, Plaintiff, for the first time, distances itself from the summary
judgment order and record, relying almost exclusively on allegations in the Amended Complaint,
many of which Plaintiff did not cite or rely on in its Original Opposition. This demonstrates
Plaintiff’s tacit agreement that its Original Opposition combined with the Court’s Order creates
an appearance that the Court likely (and inappropriately) relied on the summary judgment order
and record in denying Individual Defendants’ motion to dismiss.
3

rendering its motion to dismiss decision). 3
B.

Plaintiff Misstates The Standards for Adequately Pleading Officer/Director
Liability in Copyright Actions.

Plaintiff contends that the “import” of three summary judgment cases 4 is that all it needs
to plead in order to survive a motion to dismiss are “sufficient facts” showing that the Individual
Defendants “personally participated in or had the ability to supervise and an interest in ReDigi’s
infringing activity. . .” because having to plead each element to each claim “would of course
render completely superfluous the established theory of joint and several liability” and because
“[n]o case supports such an absurd result.” Opp. at 4. But Plaintiff’s bold assertion and use of
colorful language cannot change the myriad cases, including Supreme Court cases, rejecting this
position. 5
Supreme Court precedent requires a plaintiff to plead a factual basis for each element of
each claim. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556
U.S. 662, 675 (2009); see also Paige v. New York City Police Dep’t, 10- CV-3773 (SLT) (LB),
2012 WL 1118012, at *4 (E.D.N.Y. Mar. 30, 2012) (noting that a plaintiff is required to “plead
adequate factual content supporting each element of the claim . . .”). This black-letter law is not
abandoned in copyright cases or where the plaintiff is relying on a joint and several liability
3

Because Plaintiff did not take issue with Individual Defendants’ second basis for
reconsideration (thereby conceding its appropriateness), the remainder of this brief will focus on
the Individual Defendants’ first basis for reconsideration.
4
Two of these cases – Lime Group and Usenet – have been previously distinguished on a
number of grounds. Mem. at 16-17. Plaintiff does not address these distinctions or otherwise
attempt to explain why this Court should give any weight to these opinions. Instead, Plaintiff
merely restates the holdings in those cases, which were supported by fully-developed factual
records not present here. See, e.g., Opp. at 3-4. The third case, Broadcast Music, Inc. v. Haibo,
Inc., 10-CV-240S, 2012 WL 843424 (W.D.N.Y. Mar. 12, 2012), is similarly distinguishable.
5
None of the nine cases cited in a footnote are contrary to Individual Defendants’
position. Four are summary judgment orders (one of which is Usenet), two relate to damage
awards, one is a default judgment opinion, and two are pre-Twombly motion to dismiss opinions
that were distinguished previously. See Reply Mem. of Law in Further Supp. of Ind. Defs.’ Mot.
to Dismiss Pl.s’ First Am. Compl. 6 n.5, ECF No. 136 (filed Oct. 18, 2013).
4

theory. 6 For instance, in Buttnugget Publ’g v. Radio Lake Placid, Inc., the court examined, in
detail, the factual allegations contained in a copyright infringement complaint against both the
corporation and its officers and found that “[r]egarding the issue of joint and several liability,
plaintiffs ha[d] sufficiently pled the necessary elements.” 807 F. Supp. 2d 100, 107-08
(N.D.N.Y. 2011) (emphasis added). Numerous other copyright infringement cases have also
critically examined the factual allegations pled against officers in copyright infringement actions
in order to ensure the complaint adequately pled each of the requisite elements of each claim
against those individuals. See, e.g., Too, Inc. v. Kohl’s Dep’t Stores, Inc., 213 F.R.D. 138, 141-42
(S.D.N.Y. 2003); Granite Music Corp. v. Ctr. St. Smoke House, Inc., 786 F. Supp. 2d 716, 728
(W.D.N.Y. 2011); NCR Corp. v. Korala Assocs., Ltd., 512 F.3d 807, 816 (6th Cir. 2008). 7 In
short, Plaintiff’s Opposition misstates the applicable pleading standard and because this Court
adopted this position in its Order, reconsideration and dismissal are therefore appropriate.
C.

The Amended Complaint Fails to Plead Requisite Elements of Each of its
Claims Against the Individual Defendants.

Assuming this Court grants Individual Defendants’ Motion, it will be necessary to
determine whether the Amended Complaint adequately pleads each element of each remaining
claim against the Individual Defendants. Plaintiff strains to argue that it has adequately pled a
sufficient factual basis for each element of each claim, frequently pointing this Court to
6

Plaintiff appears to be confusing the application of joint and several liability in
copyright infringement actions. In particular, joint and several liability refers to liability for
statutory damages for infringement, not to liability for the underlying infringement claim. See 6
Patry on Copyright § 22:196; see also Charles S. Wright, Actual Versus Legal Control: Reading
Vicarious Liability for Copyright Infringement into the Digital Millennium Copyright Act of
1998, 75 Wash. L. Rev. 1005, 1010 (2000) (“[A] finding of direct infringement can reverberate
widely and draw all associated actors into the scope of secondary liability.”).
7
Further support for this proposition can be found in claims brought under Section 20(a)
of the Exchange Act, which imposes joint and several liability for “[e]very person who, directly
or indirectly, controls any person liable under any provision of this chapter.” 15 U.S.C.A. §
78t(a). See generally In re Jiangbo Pharm., Inc., Sec. Litig., 884 F. Supp. 2d 1243, 1256 (S.D.
Fla. 2012) (“To state a Section 20(a) claim, [p]laintiffs must allege three elements . . . .”).
5

allegations in the Amended Complaint never referenced in its Original Opposition (which
inappropriately relied on the summary judgment order and record). But Plaintiff’s newly
discovered allegations cannot save its claims against the Individual Defendants.
1.

The Inducement to Infringe Claim.

As noted in the Memorandum, an inducement to infringe claim, 8 to the extent it even
exists in this Circuit,9 “premises liability on purposeful, culpable expression and conduct. . . .”
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 937 (2005) (“Grokster III”).
In order to adequately plead this level of culpability, the complaint should allege “facts such as [the

defendant’s] use of advertisements or his making of statements urging others to infringe.” Flava
Works, Inc. v. Clavio, No. 11 C 05100, 2012 WL 2459146, at *4 (N.D. Ill. June 27, 2012) (citing
Grokster III, 545 U.S. at 923-24).
Plaintiff does not dispute the applicability of above elements, and instead, unsuccessfully
attempts to argue that it has adequately pled these elements. In particular, Plaintiff, for the first
time, 10 points this Court to the only paragraph that has any bearing on the Individual Defendants’
alleged liability (¶ 37), two wholly conclusory allegations, one of which is not even in the factual
allegation section of the Amended Complaint (¶¶ 29, 45), and three paragraphs that Plaintiff

8

Plaintiff argues, for the first time in any brief, that inducement to infringe is a
recognized cause of action in this Circuit. Opp. at 5-6. Plaintiff’s argument comes too late to
save this claim, and reconsideration and dismissal are therefore warranted. See In re MF Global
Holdings Ltd. Inv. Litig., No. 11 CIV. 7866 (VM), 2014 WL 667481, at *21 (S.D.N.Y. Feb. 11,
2014); see also c.f., Hudson v. Imagine Entm’t Corp., 128 F. App’x 178, 179 (2d Cir. 2005)
(holding that the district court did not err by dismissing a claim that did not exist). Indeed,
Plaintiff does not even attempt to address the Individual Defendants’ waiver argument in its
opposition, which arguably concedes the waiver. See, c.f., Outsource Servs. Mgmt., LLC v.
Ginsburg, Civ. No. 08-5897 DWF FLN, 2010 WL 5088190, at *12 (D. Minn. Dec. 7, 2010)
(finding defenses waived where the defendant did not argue that there were not waived).
9
Individual Defendants stand on their arguments as to the non-availability of this claim.
10
Plaintiff did not address what paragraphs in its Amended Complaint it thought applied
to its inducement claim in its Original Opposition
6

suggest, nonsensically, refer to the Individual Defendants’ “users” (¶¶ 26, 32, 36). Opp. at 6. 11
These allegations are insufficient under Twombly inasmuch as there is not a single, particularized
allegation regarding the Individual Defendants’ supposed intent to encourage others to infringe,
and the only allegation in the Amended Complaint regarding intent demonstrates that the
Individual Defendants actually intended to prevent copyright infringement. Am. Compl. ¶ 33. 12
Thus, Plaintiff’s inducement claim is insufficiently pled and must be dismissed.
2. The Contributory Infringement Claim.
Plaintiff is correct that one is liable for contributory infringement when he, “with
knowledge of the infringing activity, induces, causes or materially contributes to the infringing
conduct of another . . . .” Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d
1159, 1162 (2d Cir.1971) (emphasis added). 13 Rather than addressing the arguments made in the
Memorandum or pointing the Court to allegations made in the Amended Complaint that Capitol
believes support these two elements, however, Plaintiff simply points the Court to its Original
Opposition. Opp. at 7. But the Original Opposition only cites two paragraphs (¶¶ 36, 37) that
Plaintiff inappropriately contended were “bolstered by the Court’s [summary judgment] ruling.”
Orig. Opp. at 12. Neither of these paragraphs, however, says anything about the Individual
Defendants’ supposed knowledge of the infringing conduct. Moreover, the only allegation

11

How the Individual Defendants can have any “users” remains unclear and further
demonstrates the failures of Plaintiff’s group pleading strategy.
12
Plaintiff’s Opposition avoids this paragraph altogether and does not attempt to explain
why it does not undercut its inducement claim against the Individual Defendants.
13
In their Memorandum, Individual Defendants inadvertently cited to the dissent in
Matthew Bender & Co. v. West Publ’g Co., 158 F.3d 693 (2d Cir. 1998) for the proposition that
there were three elements to the contributory infringement claim and then cited to additional
cases for each of the first two elements enunciated in that case: knowledge and “policing.” Mem.
at 9-11. Individual Defendants equated the “policing” element to the material contribution
element. Mem. at 11. Thus, while Individual Defendants’ agree that their discussion on the third
element (substantial benefit) does not apply to the contributory infringement claim, their
discussion on the first two elements remains on point.
7

remotely touching on their so-called knowledge provides that the Individual Defendants believed
the ReDigi system was designed to prevent its users from infringing. See Am. Compl. ¶ 33.
This is the antithesis of knowledge of infringing activity. Further, as set out in greater detail in
the Memorandum, Plaintiff’s allegations as to the Individual Defendants’ supposed material
contribution are insufficient under Twomly. 14
3. The Vicarious Liability Claim.
In order to state a claim for vicarious liability, the plaintiff must adequately plead that the
defendant has both supervisory power and an “obvious and direct” financial interest. Mem. at 1214. In an attempt to argue that the Amended Complaint adequately pleads these elements,
Plaintiff stands on its arguments in its Original Opposition, Opp. at 8, which only pointed to
three paragraphs (¶¶ 6-7, 37) and argued that being an individual owner of a closely held
business is “typically” sufficient to impose vicarious liability. Orig. Opp. at 17-18. This is
incorrect. See Banff Ltd. v. Limited, Inc., 869 F. Supp. 1103, 1109-10 (S.D.N.Y. 1994) (“[T]here
must be indicia beyond the mere legal relationship showing that the parent is actually involved
with the decisions, processes, or personnel directly responsible for the infringing activity. . . .
[T]he actual exercise of control cannot be presumed from the mere power to control. . . .”). And
Plaintiff’s wholly conclusory allegations in paragraph 37 do not save this claim. See J & J Sports
Prods., Inc. v. Daley, No. 06–CV–0238, 2007 WL 7135707, at *3 (E.D.N.Y. Feb. 15, 2007)
(“The Complaint sets forth only conclusory allegations based on information and belief to the
effect that he is the company’s principal, that he supervises and controls its operations, and that
he derives financial benefit from the company . . . Such generalized allegations cannot suffice to
establish vicarious liability . . . .”). In short, Plaintiff’s half-hearted attempt to save its vicarious
14

As to the material contribution requirement, Individual Defendants stand on their
argument in the Memorandum, Mem. at 11, and note, in addition, that the only paragraph
Plaintiff cited in its Original Opposition (¶ 36) is wholly conclusory as to this element.
8

liability claim falls short, and this claim should be dismissed with prejudice on reconsideration.
4. The Direct Infringement Claim.
Plaintiff unsuccessfully attempts to save its direct infringement claim not by arguing that
it has pled each of the required elements of a direct infringement claim against the Individual
Defendants, addressing any of Individual Defendants’ cases supporting dismissal of this claim, 15
or incorporating its Original Opposition, but rather by claiming that “the principles of joint and
several liability apply equally to direct and secondary liability” and because ReDigi has already
been found liable for direct infringement, that the claim against the Individual Defendants must
be permitted. Opp. at 8.
But alleging joint and several liability is not alone sufficient under Twombly, see Part IIB, supra, and in any event, Plaintiff’s argument is based on an erroneous conception of joint and
several liability. In particular, joint and several liability, as it relates to officers accused of
leading a company that infringes a copyright, refers to their secondary liability for the acts of the
direct infringer, not for their liability for the direct infringement itself. See Crystal
Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc., 246 F.3d 1336, 1361 (Fed. Cir.
2001) (“A party that induces or contributes to infringement is jointly and severally liable with
the direct infringer for all general damages.”) (citing Hewlett–Packard Co. v. Bausch & Lomb
Inc., 909 F.2d 1464, 1469 (Fed. Cir. 1990)) (emphasis added). That is, the officers are jointly and
severally liable with the direct infringer for the damages caused by the direct infringement as a
result of their secondary infringement and not because of their own direct infringement. See
generally Gershwin Publ’g Corp., 443 F.2d at 1162 (differentiating between direct and
secondary infringement claims); see e.g., Luft v. Crown Publishers, Inc., 772 F. Supp. 1378,
15

Plaintiff falsely asserts that Individual Defendants “cite no case supporting [their]
proposition.” Opp. at 8. In fact, Individual Defendants cited and/or discussed no fewer than five
cases supporting their position, including Lime Group. Mem. at 14-16.
9

1379 (S.D.N.Y. 1991) (discussing an officers joint and several liability based on a theory of
vicarious liability). Plaintiff points this Court to no case in which an officer that himself did not
directly infringe a copyright was held liable for direct infringement as opposed to being held
jointly and severally liable for damages caused by another’s direct infringement. Because the
issue with this direct claim is whether it has been adequately stated against the Individual
Defendants (and not whether they are liable for damages for another’s direct infringement), this
claim should be dismissed upon reconsideration.
D.

Plaintiff Waived Any Right to Replead.

Individual Defendants asserted that dismissal with prejudice was appropriate on
reconsideration of this Court’s Order, Mem. at 18-19, and Plaintiff did not dispute (or even
address) this point in its Opposition. Even if leave to amend were appropriate (it is not),
Plaintiff’s decision not to dispute Individual Defendants’ dismissal with prejudice argument
unambiguously demonstrates Plaintiff’s intent to stand on its Amended Complaint and waives
any argument that leave to amend should be granted. See Kajoshaj v. New York City Dep’t of
Educ., 543 F. App’x 11, 17 (2d Cir. 2013); Klatch-Maynard v. ENT Surgical Assocs. Hazleton
Health & Wellness Ctr., 404 F. App’x 581, 584 (3d Cir. 2010).
III.

CONCLUSION
For the foregoing reasons, reconsideration is warranted, and on reconsideration, this

Court should dismiss each of Plaintiff’s claims against the Individual Defendants with prejudice.
Dated: October 6, 2014

/s/ Seth R. Gassman
Seth R. Gassman (SG-8116)
James J. Pizzirusso (pro hac vice)
Nathaniel C. Giddings (pro hac vice)
HAUSFELD LLP
1700 K Street, N.W., Suite 650
Washington, D.C. 20006
Counsel for John Ossenmacher & Larry Rudolph
10