Capitol Records, LLC v. Redigi Inc.

Filing 172

REPLY MEMORANDUM OF LAW re: 170 Memorandum of Law in Opposition Individual Defendants Reply Memorandum of Law Regarding the Application of Res Judicata, Collateral Estoppel, and Law of The Case. 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, CAPITOL
CHRISTIAN MUSIC GROUP, INC., and
VIRGIN RECORDS IR HOLDINGS, INC.,

12-CV-00095 (RJS)

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

INDIVIDUAL DEFENDANTS’ REPLY MEMORANDUM OF LAW
REGARDING THE APPLICATION OF
RES JUDICATA, COLLATERAL ESTOPPEL, AND LAW OF THE CASE

TABLE OF CONTENTS
I.

INTRODUCTION................................................................................................................. 1

II. ARGUMENT ......................................................................................................................... 2
A.

THE COURT NEED NOT ADDRESS THE PRIVITY ISSUE. ......................................................... 2

B.

RES JUDICATA AND COLLATERAL ESTOPPEL REQUIRE REPETITIOUS SUITS. ......................... 2

C. THE PARTIAL SUMMARY JUDGMENT ORDER SHOULD NOT BE AFFORDED COLLATERAL
ESTOPPEL OR RES JUDICATA AFFECT. ........................................................................................... 6
D.

THE PLAINTIFFS’ ARGUMENT RAISES SERIOUS DUE PROCESS CONCERNS. ......................... 7

E.

THE DISCOVERY REQUESTS AT ISSUE ARE APPROPRIATE. ................................................... 7

F.

PLAINTIFFS’ “MOTION TO STRIKE” CERTAIN AFFIRMATIVE DEFENSES FAILS. .................... 9

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

ii

TABLE OF AUTHORITIES
Page(s)
CASES
Arizona v. California,
460 U.S. 605 (1983) decision supplemented, 466 U.S. 144 (1984)...........................................3
Capacchione v. Charlotte-Mecklenburg Sch.,
182 F.R.D. 486 (W.D.N.C. 1998) ..............................................................................................8
Carter v. Adirondack Park Agency,
203 A.D.2d 788, 610 N.Y.S.2d 408 (3rd Dep’t 1994)...............................................................5
Carter-Wallace, Inc. v. Riverton Labs., Inc.,
47 F.R.D. 366 (S.D.N.Y. 1969) ...............................................................................................10
Columbia Gas Transmission, LLC v. David N. Martin Revocable Trust,
833 F. Supp. 2d 552 (E.D. Va. 2011) ........................................................................................2
Cont’l Airlines, Inc. v. Am. Airlines, Inc.,
824 F. Supp. 689 (S.D. Tex. 1993) ............................................................................................5
Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co.,
600 F.3d 190 (2d Cir. 2010).......................................................................................................5
Feigen v. Advance Capital Mgmt. Corp.,
146 A.D.2d 556, 536 N.Y.S.2d 786 (1st Dep’t 1989) ...............................................................6
Goodheart Clothing Co. v. Laura Goodman Enters., Inc.,
962 F.2d 268 (2d Cir. 1992).......................................................................................................3
Holzsager v. Valley Hosp.,
482 F. Supp. 629 (S.D.N.Y. 1979) ............................................................................................4
Horn v. Greenwood Rehab. Ctr., Inc.,
No. 84 CIV. 312, 1984 WL 531 (S.D.N.Y. June 28, 1984).......................................................9
Huang v. Gruner,
No. 99 CIV. 5058, 2000 WL 640660 (S.D.N.Y. May 17, 2000)...............................................9
In re AmeriServe Food Distrib., Inc.,
315 B.R. 24 (Bankr. D. Del. 2004) ............................................................................................5
In re Hyman,
335 B.R. 32 (S.D.N.Y. 2005) aff’d on other grounds, 502 F.3d 61 (2d Cir. 2007)...................4
Jones v. U.S. Dep’t of Hous. & Urban Dev.,
No. 11 CV 0846, 2012 WL 1940845 (E.D.N.Y. May 29, 2012) ...............................................3
iii

L-Tec Elecs. Corp. v. Cougar Elec. Org., Inc.,
No. 97 CV 4303, 1998 WL 960302 (E.D.N.Y. Dec. 14, 1998) aff’d, 198 F.3d 85 (2d
Cir. 1999) ...................................................................................................................................5
La Framboise Well Drilling, Inc. v. R.J. Dooley & Assocs., Inc.,
No. 05CIV.956, 2007 WL 430285 (S.D.N.Y. Feb. 7, 2007) .....................................................7
Lucero v. Valdez,
240 F.R.D. 591 (D.N.M. 2007) ..................................................................................................9
Nelson v. Adams USA, Inc.,
529 U.S. 460 (2000) ...................................................................................................................7
Oppenheimer Fund, Inc. v. Sanders,
437 U.S. 340 (1978) ...................................................................................................................8
Piazza v. Aponte Roque,
909 F.2d 35 (1st Cir. 1990) ........................................................................................................3
Rezzonico v. H & R Block, Inc.,
182 F.3d 144 (2d Cir. 1999).......................................................................................................4
Scripps Clinic & Research Found. v. Genentech, Inc.,
678 F. Supp. 1429 (N.D. Cal. 1988) ..........................................................................................5
Sierra Club v. Alexander,
484 F. Supp. 455 (N.D.N.Y. 1980) aff’d, 633 F.2d 206 (2d Cir. 1980) ....................................3
Sloth v. Constellation Brands, Inc.,
No. 11-CV-6041T, 2013 WL 6628270 (W.D.N.Y. Dec. 16, 2013) ..........................................3
Tap Holdings, LLC v. Orix Fin. Corp.,
109 A.D.3d 167, 970 N.Y.S.2d 178 (1st Dep’t 2013) ...............................................................5
United States v. McGann,
951 F. Supp. 372 (E.D.N.Y. 1997) ............................................................................................6
Waste Mgmt. of Ohio, Inc. v. City of Dayton,
169 F. App’x 976 (6th Cir. 2006) ..............................................................................................5
Whitman v. Mastrodonato,
11 A.D.3d 796, 783 N.Y.S.2d 112 (3rd Dep’t 2004).................................................................3
Wisell v. Indo-Med Commodities, Inc.,
74 A.D.3d 1059, 903 N.Y.S.2d 116 (2nd Dep’t 2010) ..............................................................5

iv

STATUES
Fed. R. Civ. P. 12 ...........................................................................................................................10
OTHER AUTHORITIES
18B Fed. Prac. & Proc. Juris. § 4478 (2d ed.) .................................................................................5

v

Mr. John Ossenmacher and Prof. Larry Rudolph (the “Individual Defendants”) submit
this reply brief in response to Capitol Records, LLC (“Capitol’); Capitol Christian Music Group,
Inc. and Virgin Records IR Holdings, Inc. (collectively, “Plaintiffs”) Memorandum of Law
Regarding Application of Res Judicata to Individual Defendants’ Affirmative Defenses, ECF
No. 170 (filed Dec. 19, 2014) (hereinafter “Plaintiffs’ Response”). 1
I.

INTRODUCTION
Plaintiffs’ Response attempts to (1) avoid the plain language of binding precedent

holding that res judicata and collateral estoppel only apply in repetitious suits, and in so doing,
fails to discuss the only doctrine that could even potentially be applicable here: law of the case;
(2) brush-off the very significant due process issues that would result if Individual Defendants
are barred from litigating and obtaining discovery in the manner that Plaintiffs’ propose, and (3)
improperly seek to convert the parties’ present discovery dispute into a “motion to strike.”
Plaintiffs’ arguments ignore well-settled law in favor of their desired version of the law; in
essence, Plaintiffs’ argument is that this Court should ignore binding Supreme Court and Second
Circuit precedent and relieve Capitol from its strategic decision of adding the Individual
Defendants to this action on the eve trial on the (misplaced) hope that they would simply
acquiesce to their alleged liability. In order to avoid this erroneous course of action, this Court
should reject Plaintiffs’ arguments in their entirety and allow Individual Defendants to take
discovery on their pending defenses. In addition, because Plaintiffs have not filed a motion to
strike, their arguments on a number of Individual Defendants’ defenses are not properly before
the Court, and the Court should therefore disregard this portion of Plaintiffs’ Response.

1

Plaintiffs’ Response was filed in response to was filed in response to Individual
Defendants’ Memorandum of Law Regarding the Application of Res judicata, Collateral
Estoppel, and Law of the Case, ECF No. 169 (filed Dec. 5, 2014) (hereinafter “Individual
Defendants’ Memorandum”).
1

II.

ARGUMENT
A.

The Court Need Not Address the Privity Issue.

Plaintiffs devote significant space in their brief arguing that Individual Defendants are in
privity with ReDigi, Inc. (“ReDigi”). Pls.’ Resp. at 4-7. But, as Individual Defendants stated in
their Memorandum, “The Court need not reach the privity issue because Individual Defendants
are only seeking to assert, obtain discovery, and litigate defenses not already decided by the
Court.” Ind. Defs.’ Mem. at 1, n.1. This is not a “tacit concession that [Individual Defendants]
are in fact in privity with ReDigi,” as Plaintiffs contend, Pls.’ Resp. at 5, but rather an attempt to
streamline the issues presented to the Court in these briefs. Put simply, this Court’s decision
should turn on binding Supreme Court and Second Circuit precedent holding that res judicata
and collateral estoppel only apply in repetitious suits, not the same proceeding, such that the
Court need not even reach the privity issue. See, c.f., Columbia Gas Transmission, LLC v. David
N. Martin Revocable Trust, 833 F. Supp. 2d 552, 560 n.3 (E.D. Va. 2011) (declining to address
the additional res judicata requirements where the privity element failed).
B.

Res judicata and Collateral Estoppel Require Repetitious Suits.

In an attempt to avoid the operation of black letter law that res judicata and collateral
estoppel do not apply in the same suit, Plaintiffs (1) contend that Individual Defendants’
argument on this issue “elevat[es] form over substance,” Pls.’ Resp. at 9, (2) argue that the
statements in every single one of the numerous cases Individual Defendants’ cite for this wellsettled rule are “dicta,” Pls.’ Resp. at 12, n.5, and (3) ignore the only doctrine that could have any
application in this case: law of the case. Plaintiffs’ arguments demonstrate their fundamental
misunderstanding of each of these doctrines, and in any event, are belied by their own
parentheticals, nearly all of which note that the courts only applied res judicata or collateral
estoppel in cases where there was a “prior” or “subsequent” action. See Pls.’ Resp. at 3-4; 7.
2

Plaintiffs’ argument that res judicata and collateral estoppel are “flexible” concepts that
can “logically” be applied “with equal force to differing stages in a single lawsuit” is misplaced.
While it is true that court’s give these doctrines some flexibility in some unique circumstances
not applicable here, 2 it appears that this flexibility is afforded, if at all, when the courts are
denying application of the doctrines so as to give the party opposing their application his day in
court. See, e.g., Whitman v. Mastrodonato, 11 A.D.3d 796, 797, 783 N.Y.S.2d 112, 114 (3rd
Dep’t 2004) (declining to employ res judicata to dismiss claims); 3 Jones v. U.S. Dep’t of Hous.
& Urban Dev., No. 11 CV 0846, 2012 WL 1940845, at *3 (E.D.N.Y. May 29, 2012) (same);
Sloth v. Constellation Brands, Inc., No. 11-CV-6041T, 2013 WL 6628270, at *2 (W.D.N.Y.
Dec. 16, 2013) (same, as to collateral estoppel). Plaintiffs are attempting to do the opposite here:
they are attempting to deny Individual Defendants their day in court. 4
In any event, under binding Supreme Court and Second Circuit precedent, these doctrines
are inapplicable in the same action. See Ind. Defs.’ Mem. at 11-18; Arizona v. California, 460
U.S. 605, 619 (1983) (“It is clear that res judicata and collateral estoppel do not apply if a party
moves the rendering court in the same proceeding to correct or modify its judgment.”) decision
supplemented, 466 U.S. 144 (1984); Goodheart Clothing Co. v. Laura Goodman Enters., Inc.,
962 F.2d 268, 274 (2d Cir. 1992) (noting that where “the question posed is whether the same
2

For instance, courts appear to afford more flexibility to res judicata and collateral
estoppel where the prior proceeding was administrative in nature. See Sierra Club v. Alexander,
484 F. Supp. 455, 464 (N.D.N.Y. 1980) aff’d, 633 F.2d 206 (2d Cir. 1980).
3
The parties agree that New York and Second Circuit law on claim and issue preclusion
are substantially the same. Pls.’ Resp. at 10, n.4; Individual Defs.’ Mem. at 11, n.16.
4
Plaintiffs’ judicial economy argument, Pls. Resp. at 10-12, is misguided. The Supreme
Court has stated that “like res judicata, the law of the case doctrine ‘promotes the finality and
efficiency of the judicial process by protecting against the agitation of settled issues.”‘ Piazza v.
Aponte Roque, 909 F.2d 35, 38 (1st Cir. 1990) (quoting Christianson v. Colt Indus. Operating
Corp., 486 U.S. 800, 815-16 (1987)). Because the law of the case doctrine is animated by the
same judicial economy considerations and is the only doctrine that would apply in the same
proceeding, Ind. Defs.’ Mem. at 18, Plaintiffs’ policy argument fails to counsel in favor of
application of res judicata or collateral estoppel rather than law of the case.
3

court that issued a [prior order] should revisit the issue . . . at a subsequent stage in the same
litigation” that “to the extent that any form of preclusion might be considered . . . it would not be
a rule of res judicata or collateral estoppel, but rather the somewhat more flexible law-of-thecase doctrine . . . .”). Indeed, Plaintiffs’ “flexibility” case, Duane Reade, Inc. v. St. Paul Fire &
Marine Ins. Co., involved issues raised in a prior action. 600 F.3d 190, 197 (2d Cir. 2010)
(discussing “whether . . . claims . . . that were not raised in [the plaintiff’s] initial action are
barred by the doctrine of res judicata. . . .”).
Plaintiffs’ argument that “Individual Defendant’s fail to cite a single case that refused to
apply collateral estoppel or res judicata solely on account of the fact that the Court’s
determination had occurred in the same action,” Pls.’ Resp. at 12 (emphasis in original), is
simply incorrect. Individual Defendants cited Holzsager v. Valley Hosp., 482 F. Supp. 629
(S.D.N.Y. 1979), in which the court refused to apply both of these doctrines because the prior
determination had occurred in the same proceeding. Ind. Defs.’ Mem. at 14. There, the court
specifically addressed the argument that reconsideration of a prior determination was “barred by
the doctrines of res judicata and collateral estoppel” and held that because the prior order
occurred in “the same action” that “neither res judicata nor collateral estoppel ha[d] any
application . . . .” 482 F. Supp. at 632-33. The court then stated that the only doctrine that would
apply was law of the case, which applies “in subsequent proceedings in the same case.” Id. at
633. 5 Other cases are in accord. 6
5

Plaintiffs incorrectly contend that this holding (and the language Individual Defendants’
quoted from four other cases regarding the non-application of these doctrines in the same
proceeding) is “dicta.” Pls. Resp. at 12, n.5. As the above discussion makes plain, Holzsager’s
language on these doctrines was an essential part of the holding and not dicta, and Plaintiffs’
dicta contention as to the other cases is similarly misplaced. See, e.g., In re Hyman, 335 B.R. 32,
37 n.3 (S.D.N.Y. 2005) (specifically rejecting the argument that res judicata applied in the same
proceeding) aff’d on other grounds, 502 F.3d 61 (2d Cir. 2007). Indeed, the Sixth Circuit quoted
the Second Circuit’s pronouncement of the law in Rezzonico v. H & R Block, Inc., 182 F.3d 144,
148 (2d Cir. 1999) that the Individual Defendants quoted in their opening brief in affirming the a
4

Plaintiff’s reliance on an unpublished Eastern District of New York case that has not been
cited by a single court does not compel a different result. While Plaintiffs are correct that the
court there applied res judicata to preclude arguments in the same action, L-Tec Elecs. Corp. v.
Cougar Elec. Org., Inc., No. 97 CV 4303, 1998 WL 960302, at *2 (E.D.N.Y. Dec. 14, 1998)
aff’d, 198 F.3d 85 (2d Cir. 1999), the parties did not argue in either the district or appellate court,
as Individual Defendants do here, that the doctrine was inapplicable for failure of a separate
action. Regardless, the parties and the court in L-Tec appear to have confused law of the case and
res judicata. See Law of the Case, 18B Fed. Prac. & Proc. Juris. § 4478 (2d ed.) (“There are, to
be sure, occasions on which courts absent-mindedly refer to res judicata to support law-of-thecase conclusions.”) (citing cases). 7 The same doctrinal confusion is present in Plaintiff’s
collateral estoppel case. See Cont’l Airlines, Inc. v. Am. Airlines, Inc., 824 F. Supp. 689, 709,
n.53 (S.D. Tex. 1993) (discussing the defendants’ reliance on Scripps Clinic & Research Found.
v. Genentech, Inc., 678 F. Supp. 1429 (N.D. Cal. 1988) for the application of collateral estoppel
and stating that “[i]n the Court’s opinion, [d]efendants may have confused collateral estoppel
lower court’s conclusion that this doctrine did not apply in the same proceeding: ‘“Res judicata
does not speak to direct attacks in the same case, but rather has application in subsequent
actions.” Waste Mgmt. of Ohio, Inc. v. City of Dayton, 169 F. App’x 976, 984 (6th Cir. 2006);
see also Individual Defs.’ Mem. at 12.
6
See, e.g. Carter v. Adirondack Park Agency, 203 A.D.2d 788, 789, 610 N.Y.S.2d 408,
409 (3rd Dep’t 1994) (concluding, on appeal, that the lower court’s “determination following
reconsideration was not barred by res judicata” because, in part, “the two determinations arose in
the same proceeding . . . .”); Wisell v. Indo-Med Commodities, Inc., 74 A.D.3d 1059, 1060, 903
N.Y.S.2d 116, 117 (2nd Dep’t 2010) (“[I]n the instant case, we are not dealing with findings in a
prior action; we are dealing with the same action. Accordingly, the affirmative defenses of
collateral estoppel and res judicata are inapplicable to the instant dispute, and the Supreme Court
properly denied the defendants’ motion to dismiss the complaint as barred by the doctrines of
collateral estoppel and res judicata.”); see also Tap Holdings, LLC v. Orix Fin. Corp., 109
A.D.3d 167, 177, 970 N.Y.S.2d 178, 185 (1st Dep’t 2013) (rejecting virtually the same argument
that Plaintiffs make here).
77
See also In re AmeriServe Food Distrib., Inc., 315 B.R. 24, 36 (Bankr. D. Del. 2004)
(finding that the parties had confused res judicata and law of the case and finding that law of the
case – not res judicata - applied because the prior determination was made in the same
proceeding).
5

with the doctrine of ‘law of the case.’”). 8
In sum, under binding Supreme Court and Second Circuit precedent, Plaintiffs’ argument
that neither res judicata nor collateral estoppel requires a prior proceeding is incorrect and
confuses these doctrines with law of the case. 9 As such, Individual Defendants are only
precluded from litigating and seeking discovery, if at all, by the law of the case doctrine, which
would only preclude discovery and litigation as to those issues actually decided by the Court in
the partial summary judgment order: fair use and first sale. Ind. Defs.’ Mem. at 18-19.
C.
The Partial Summary Judgment Order Should Not Be Afforded Collateral
Estoppel or Res judicata Affect.
Plaintiffs also argue that the partial summary judgment order should be given preclusive
effect. Pls. Resp. at 7-9. As Individual Defendants pointed out in their Memorandum, “partial
summary judgment orders in and of themselves are not final judgments for collateral estoppel
purposes. Rater, there must be a prior adjudication of an issue in another action . . . .” Ind.
Defs.’ Mem. at 15 (emphasis in original) (citation and internal quotation omitted). This rule is
consistent with the above discussion, and Plaintiffs’ case parentheticals, nearly all of which note
that the partial summary judgment order was issued in a prior suit, confirm this conclusion. Pls.
Resp. at 7-8. 10 Because there is no prior action, the partial summary judgment order should not
be afforded preclusive affect.

8

Plaintiffs’ New York state court case is readily distinguishable inasmuch as the plaintiff
sought to file an amended complaint “12 years after entry of judgment dismissing the case”
against the defendants. Feigen v. Advance Capital Mgmt. Corp., 146 A.D.2d 556, 557-58, 536
N.Y.S.2d 786 (1st Dep’t 1989).
9
Plaintiffs’ confusion is further demonstrated by the fact that but for a few stray citations
intermittently placed within their collateral estoppel and res judicata arguments, Plaintiffs do not
discuss law of the case. Pls. Resp. at 2; 12, n.5.
10
Plaintiffs omit the prior adjudication language in several case parentheticals, but these
cases involved partial summary judgment orders in prior actions as well or have already been
noted as such by Individual Defendants. See United States v. McGann, 951 F. Supp. 372, 379
(E.D.N.Y. 1997); Ind. Defs.’ Mem. at 16, 17 n.24.
6

D.

The Plaintiffs’ Argument Raises Serious Due Process Concerns.

Plaintiffs next argue that Individual Defendants’ due process argument “is [n]ot [e]ven
[c]olorable” because the Individual Defendants have not actually been adjudicated as liable
“yet.” Pls. Resp. at 13-14. But Plaintiffs cannot hide from their dubious sand-bagging strategy
and past positions in this case that, in their mind, the Individual Defendants’ liability is already a
foregone conclusion. See, e.g., Pizzirusso Decl., Ex. 2 at 4:17-19 (Mr. Mandel: “I think legally,
in terms of infringement being established, I don’t think there’s going to be any question under
the [partial summary judgment] opinion.”); Ex. 9 (“IDs are jointly liable with ReDigi as a matter
of law.”). Because the Individual Defendants were (inappropriately) added to this action after
ReDigi’s liability had already been determined, Ind. Defs. Mem. at 21, 21 n.29, if the Court
accepts Plaintiffs’ argument, 11 the Individual Defendants will have been denied the opportunity
to mount their defense, let alone one aided by discovery. This is the same concern that animated
the Supreme Court’s decision to overturn the lower courts in Nelson v. Adams USA, Inc., 529
U.S. 460, 463 (2000). 12 In order to avoid these due process concerns, this Court should either
reject Plaintiffs’ arguments and allow Individual Defendants to take discovery.
E.

The Discovery Requests at Issue are Appropriate.

Plaintiffs contend that the discovery requests at issue in the present motion – Requests for
Production 10, 17, & 18 and Interrogatory 17 – are “well beyond the scope of anything
reasonably required to defend the case.” Pls. Resp. at 19-21. Not only do Plaintiffs’ arguments
11

Contrary to Plaintiffs’ assertion, Pls. Resp. at 13, Individual Defendants should be
permitted to raise defenses as to ReDigi’s liability since they are only liable, if at all, through
ReDigi’s liability.
12
See also, c.f., La Framboise Well Drilling, Inc. v. R.J. Dooley & Assocs., Inc., No.
05CIV.956, 2007 WL 430285, at *5 (S.D.N.Y. Feb. 7, 2007) (rejecting plaintiff’s attempt to
obtain summary judgment against a corporate officer where the corporate officer was not a
defendant in the action because “[d]ue process requires that a corporate officer or principal
shareholder be given an opportunity to contest his personal liability for a judgment previously
rendered against the corporation”) (citing Nelson, 529 U.S. at 463, 471).
7

on these discovery requests fail to acknowledge the standard for what is discoverable − “[A]ny
matter that bears on, or that reasonably could lead to other matter that could bear on, any issue
that is or may be in the case,” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) −
but their arguments also largely fail to address Individual Defendants’ arguments as to the
relevance of the information sought. Plaintiffs’ arguments must therefore fail.
Regarding the requests for production, Individual Defendants asserted that these requests
go to “the amount of actual damages suffered by Capitol,” and that ‘“it is well-settled that the
amount of action damages is one factor that courts take into account when setting statutory
damages.’” Ind. Defs.’ Mem. at 23 (quoting Arista Records LLC v. Lime Grp., No. 06 CV 5936,
2010 WL 4720338, at *4 (S.D.N.Y. Nov. 19, 2010) (citing authorities)). Thus, for purposes of
these discovery requests, it is largely immaterial that “Plaintiffs do not even claim that they have
been harmed with respect to any such potential market.” Pls.’ Resp. at 20. Individual Defendants
are seeking relevant material that they intend to rely on to reduce the amount of any potential
statutory damages award. This meets the Supreme Court’s broad definition of relevance.
As to the interrogatory, which “seeks information related to the amount of money that
Capitol contends the Individual Defendants have made through ReDigi,” Ind. Defs. Mem. at 23,
this contention interrogatory is directly relevant to Plaintiffs’ vicarious liability claim. 13 While
Plaintiffs attempt to rest on cases that they purport “typically deem[]” the corporate officers of
closely held corporations vicariously liable, Pls. Resp. at 21, this is insufficient. Plaintiffs have
repeatedly contended that they require no additional discovery, and this being the case, under
Federal Rule of Civil Procedure 33(c), contention interrogatories are properly used to ask a party
to “articulate facts underlying a contention.” Capacchione v. Charlotte-Mecklenburg Sch., 182

13

Individual Defendants inadvertently referred to “contributory infringement” rather than
“vicarious infringement” in their Memorandum.
8

F.R.D. 486, 489 (W.D.N.C. 1998). 14 If the only fact that Plaintiffs can point to is the Individual
Defendants’ ownership in the company, there is a serious question as to whether this is a viable
claim. The Court should compel Plaintiffs’ response to this interrogatory so as to clarify whether
Plaintiffs possess any other facts that would support this claim.
F.

Plaintiffs’ “Motion to Strike” Certain Affirmative Defenses Fails.

Though inappropriately framed as a “motion to strike” when the Court invited briefing on
the ability of Individual Defendants to obtain the discovery, the bulk of Plaintiffs’ Response is
essentially a premature motion for summary judgment on certain of Individual Defendants’
affirmative defenses. Pls. Resp. at 14-19. See Horn v. Greenwood Rehab. Ctr., Inc., No. 84 CIV.
312, 1984 WL 531, at *1 (S.D.N.Y. June 28, 1984) (discussing a motion to strike affirmative
defenses and saying that “[i]f plaintiffs’ motion is to prevail against defenses such as these, it
must be as a motion for summary judgment, not a motion to dismiss defenses.”). 15 Because
Plaintiff has neither moved to strike nor for summary judgment − and such motion for summary
judgment would be woefully premature given the fact that Individual Defendants have had
virtually no discovery as to their asserted defenses − the Court should disregard this portion of
Plaintiffs’ Response. In addition, under Local Rule 7.1 and Rule 2 of Your Honor’s Individual
Rules of Practice, Plaintiffs have not filed a letter requesting a pre-motion conference on this
supposed “motion to strike,” nor have they filed a motion and memorandum in support.
Regardless, Plaintiffs’ “motion to strike” fails for substantive reasons, as well. First and
foremost, it purports to rely on Plaintiffs’ faulty interpretation of res judicata and collateral

14

See also Lucero v. Valdez, 240 F.R.D. 591, 594 (D.N.M. 2007) (“Contention
interrogatories . . . may ask for the material or principal facts that support a party’s contentions,
and contention interrogatories that do not encompass every allegation, or a significant number of
allegations, made by a party are proper.”) (citations omitted)
15
See also Huang v. Gruner + Jahr USA Pub., No. 99 CIV. 5058, 2000 WL 640660, at
*1 (S.D.N.Y. May 17, 2000) (citing Horn and doing the same).
9

estoppel. Second, the “motion” is untimely under the Federal Rules of Civil Procedure, as more
than 21 days has elapsed since Individual Defendants answered the Second Amended Complaint.
See Fed. R. Civ. P. 12(f); Ind. Defs.’ Ans. to Second Am. Compl., ECF No. 163 (filed Nov. 12,
2014). Third, motions to strike are disfavored. As the Southern District of New York explained:
It is clear, that if there are either questions of fact or disputed questions of law,
the motion must be denied. For the plaintiff to succeed on this motion, the Court
must be convinced that there are no questions of fact, that any questions of law
are clear and not in dispute, and that under no set of circumstances could the
defenses succeed. . . . These narrow standards are designed to provide a party the
opportunity to prove his allegations if there is the possibility that his defense or
defenses may succeed after a full hearing on the merits.
Carter-Wallace, Inc. v. Riverton Labs., Inc., 47 F.R.D. 366, 368 (S.D.N.Y. 1969) (footnotes
omitted). Because there are still very significant questions of law and fact as to the Individual
Defendants’ asserted affirmative defenses, Plaintiffs’ attempted “motion to strike” is
inappropriate, and the Court should disregard it.
III.

CONCLUSION
For the reasons explained above, neither res judicata, collateral estoppel, nor law of the

case (which Plaintiffs failed to adequately address) bar Individual Defendants from raising,
seeking discovery, and litigating defenses not already decided by the Court, and the Court should
compel Capitol to respond to Requests for Production Nos. 10, 17, & 18 and Interrogatory No.
19. Although Plaintiffs appear to believe that by merely naming the Individual Defendants, they
should now be found liable, that is (thankfully) not the law, and Plaintiffs must live with the
consequences of their own legal strategy.

Dated: December 23, 2014

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

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