Hubbard v. Electronic Arts Inc

Filing 51

ORDER granting in part and denying in part 26 Motion to Intervene is granted, Motion to transfer or stay is denied.. Signed by District Judge J Ronnie Greer on 8/5/2011. (RET)

UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF TENNESSEE
AT GREENEVILLE

TOMMY HUBBARD,
on behalf of himself and
all others similarly situated,
Plaintiff,
v.
ELECTRONIC ARTS, INC.,
Defendant.

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NO.

2:09-CV-233

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Intervenor Phillip Cribb’s (“Cribb”or
“intervenor”), “Motion to Intervene, and Motion to Transfer or in the Alternative, Stay Action,”
[Doc. 26]. Cribb seeks to intervene in the action for the purpose of transferring this case to the
United States District Court for the Northern District of California where Pecover v. Electronic Arts,
Inc., is pending. Alternatively, Cribb seeks to stay this action pending the outcome of that case. For
the reasons that follow, the motion is GRANTED IN PART AND DENIED IN PART.
I. BACKGROUND
On June 5, 2008, the plaintiffs in Pecover filed their original complaint. It alleged
generally “that [Electronics Arts] foreclosed competition in a market for interactive football software
by acquiring, in separate agreements, exclusive rights to publish video games using the trademarks
and other intellectual property of ‘the only viable sports football associations and leagues in the
United States.’” 633 F.Supp.2d 976, 978 (N.D. Cal. 2009). The plaintiffs alleged specifically: “(1)
violation of section 2 of the Sherman Act, 15 U.S.C. § 2; (2) violation of California's Cartwright Act,

Cal. Bus. & Prof. Code § 16700 et seq.; (3) violation of California's Unfair Competition Act, Cal.
Bus. & Prof. Code § 17200 et seq.; (4) unjust enrichment; and, in the event that the court does not
apply California law on a nationwide basis, (5) violation of various other state antitrust and restraint
of trade laws; and (6) violation of various state consumer protection and unfair competition laws.”
Id. at 978-79. On June 5, 2009, the District Court for the Northern District of California dismissed
all state law claims, except California and the District of Columbia, for lack of standing. Id. at 98485. This included the State of Tennessee. Id.
Then, on September 4, 2009, Tommy Hubbard (“Hubbard” or “plaintiff”) filed this
instant case in the Circuit Court for Washington County, and it was removed to this Court. He sued
individually and on behalf of all others similarly situated. The counts charged include Count One,
an alleged violation of the Tennessee Trade Practices Act, and Count Two, an unjust enrichment
allegation. In sum, the plaintiff claims, “Through unlawful and competitive agreements with the coconspirators National Football League, the NFL Players Union, Arena Football League and the
National Collegiate Athletic Association (“NCAA”), Electronic Arts, Inc. has driven its competition
out of the market for interactive football software . . . and has prevented additional competitors from
entering the market. As a direct result of these anticompetitive agreements, the price of interactive
football software has soared
. . . .”
Subsequently, on November 9, 2009, the Pecover plaintiffs filed a Motion to Certify
the Class, arguing that the District Court for the Northern District of California should certify a
nationwide class and apply California law. Alternatively, they argued that twenty state subclasses
should be certified, if the Court declined to apply California law nationwide. In so doing, those

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plaintiffs alluded to having a Tennessee resident to represent the Tennessee subclass. EA responded
that the plaintiffs did not amend their pleading and add these proposed state subclass representatives.
Then, on April 1, 2010, the plaintiffs moved to amend their complaint, and they sought to add such
representatives, including Cribb as the Tennessee subclass representative.
On December 21, 2010, the District Court for Northern District of California granted
plaintiffs’ request to certify a nationwide class and apply California law and denied the motion to
amend the complaint as moot. Accordingly, Cribb was not allowed to become a representative of
a Tennessee subclass, for the subclasses were not certified.
II. ANALYSIS
Cribb seeks to intervene in the instant action for the purpose of transferring this case
to the Northern District of California. Alternatively, Cribb seeks to stay this action pending the
outcome of Pecover. Cribb argues that he should be permitted to intervene as a matter of right. He
also argues that permissive intervention is warranted. This Court will take each issue in turn.
Federal Rule of Civil Procedure 24 states:
(a) Intervention of Right. On timely motion, the court must permit
anyone to intervene who:
(1) is given an unconditional right to intervene by a federal
statute; or
(2) claims an interest relating to the property or transaction
that is the subject of the action, and is so situated that
disposing of the action may as a practical matter impair or
impede the movant's ability to protect its interest, unless
existing parties adequately represent that interest.
(b) Permissive Intervention.
(1) In General. On timely motion, the court may permit
anyone to intervene who:
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(A) is given a conditional right to intervene by a
federal statute; or
(B) has a claim or defense that shares with the main
action a common question of law or fact.
...
(3) Delay or Prejudice. In exercising its discretion, the court
must consider whether the intervention will unduly delay or
prejudice the adjudication of the original parties' rights.
Fed. R. Civ. P. 24.
A movant must satisfy four requirements before he will be allowed to intervene as
of right:
1. The request to intervene must be timely;
2. The movant must have a substantial legal interest in the case;
3. The movant’s ability to protect that interest would be impaired in
the absence of intervention; and
4. The movant’s interest is not adequately represented by parties
already before the court.
See Stupak-Thrall v. Glickman, 226 F.3d 467, 471 (6th Cir. 2000) (citation omitted). “Rule 24
should be broadly construed in favor of potential intervenors.” Id. at 472 (citation and quotation
omitted).
In determining whether a motion to intervene is timely, the court considers:
1. The point to which the suit has progressed;
2. The purpose for which intervention is sought;
3. The length of time preceding the application during which the

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proposed intervenor knew or should have known of her interest in the
case;
4. The prejudice to the original parties due to the proposed
intervenor’s failure to promptly intervene after she knew or
reasonably should have known of her interest in the case; and
5. The existence of unusual circumstances militating against or in
favor of intervention.
Id. at 473.
Here, the factors for timeliness have been met. First, the case has not progressed far.
Even though the motion to intervene was filed several months after the complaint, the action remains
in the initial stages. Mich. State v. Miller, 103 F.3d 1240, 1245 (6th Cir. 1997). This Court just
recently decided the motion to remand. No motion to dismiss has been filed, no motion to certify
the class has been filed, and no discovery has taken place. Actually, no answer to the complaint has
even been filed. Second, Cribb “seeks to intervene to protect the interests of absent Tennessee class
members against arguments which unduly limit their damages in this case.” Hubbard sought to limit
damages in this case, and Cribb argues that damages are much higher. Furthermore, Cribb argues
that he also seeks to intervene to promote judicial efficiency. These factors weigh in Cribb’s favor.
Third, Cribb claims he was unaware until of this action until “recently,” or shortly before he filed
his motion.1 The plaintiff offers no evidence to dispute this, for the action, according to Cribb, was
not disclosed in the Pecover action despite a local rule requiring such disclosure. Fourth, this Court

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He claims he learned of this pending action on September 13, 2010, and he filed his
motion on October 27, 2010.
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considers prejudice to the original parties. This Court acknowledges that some prejudice might exist
if Cribb is allowed to transfer the action. However, the original parties would not be prejudiced if
he is allowed to intervene to participate in the suit. At this point, the latter is the relevant question,
and the former will be addressed below. On the whole, the motion for intervention was timely.
Now, this Court must analyze whether Cribb has a substantial legal interest in the
subject matter of the pending litigation. Each side’s arguments on this point is largely moot because
they revolve around whether a nationwide class or subclasses will be certified in the Pecover action.
As stated above, a nationwide class was certified, and California law will be applied. Thus, the
alternative certification of subclasses was deemed moot. Therefore, this Court will rely on other
factors in determining whether Cribb has a substantial interest in this litigation. Cribb is apparently
a Tennessee resident who purchased EA’s product. Thus, his interests are essentially the same as
Hubbard’s. This Court has no doubt that Hubbard would consider his own interests substantial. The
two’s interests being the same, it is difficult to argue then that Cribb’s would not be significant.
The next factor in the analysis is that Cribb’s ability to protect his interest must be
impaired. In this case, this factor closely relates to the fourth factor and they will be discussed in
tandem. The fourth factor is that the present parties do not adequately represent Cribb’s interest.
As stated earlier, Hubbard has attempted to limit the damages recoverable to avoid federal
jurisdiction. This Court recently decided that it has subject matter jurisdiction and denied the motion
to remand because the defendant had shown that it is more likely than not that the amount in
controversy requirement was met. Thus, it appears that the two have very different views as to the
amount of damages suffered. As such, Cribb’s interests in the amount of damages would be
impaired and not adequately represented by Hubbard.

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Considering all of the above factors, which weigh in favor of Cribb, this Court
FINDS that Cribb can intervene as of right. His motion is GRANTED in that regard.
Even assuming arguendo that Cribb could not intervene as of right, this Court FINDS
that permissive intervention is appropriate here. It is undisputed that the complaints in Pecover and
Hubbard are substantially similar. Hubbard does not dispute that the actions involve common
questions of law and fact. Further, it is undisputed that Cribb is a Tennessee resident who purchased
an EA product subject to the Hubbard complaint. In this Court’s discretion, it determines that
permissive intervention is also appropriate.
The harder question is whether to transfer or stay this action now that intervention
is deemed appropriate.2 Cribb relies on the first-to-file rule in arguing that this case should be
transferred to the United States District Court for the Northern District of California. The
first-to-file “rule is a doctrine of federal comity that promotes judicial efficiency.” Thomas & Betts
Corp. v. Hayes, 222 F.Supp.2d 994, 996 (W.D. Tenn. 2002). The rule provides that “when
duplicative lawsuits are pending in separate federal courts . . . ‘the entire action should be decided
by the court in which an action was first filed.’” Id. at 995 (quoting Smith v. S.E.C., 129 F.3d 356,
361 (6th Cir. 1997)). Duplicative lawsuits are suits where issues “have such an identity that a
determination in one action leaves little or nothing to be determined in the other.” Smith, 129 F.3d
at 361. “In determining whether actions are duplicative and the first-to-file rule applies, courts
consider three factors: (1) the chronology of the actions; (2) the similarity of the parties involved;

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This Court notes that the United States Judicial Panel on Multidistrict Litigation denied
centralization of actions against EA brought by former and current student athletes. One such
case that was included in that request was this Court’s case number 2:09-CV-233. This Court
has found no record where centralization was sought for actions similar to the present case.
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and (3) the similarity of the issues at stake.” Fuller v. Abercrombie & Fitch Stores, Inc., 370
F.Supp.2d 686, 689 (E.D. Tenn. 2005).
This Court will not apply the rule too rigidly or mechanically. Plating Res. Inc. V.
UTI Corp., 47 F.Supp.2d 899, 903 (N.D. Ohio 1999). In fact, whether to apply the rule is
discretionary. Smith, 129 F.3d at 361. In addition, “if the second-filed court invokes the rule, the
court can either stay the second-filed action pending the outcome of the first-filed suit or transfer
the second-filed action to the court of the first-filed action.” Fuller, 370 F.Supp.2d at 689.
It is true that the Pecover action was the first filed. Of course, the claims brought
pursuant to Tennessee law were dismissed due to lack of standing. The attempts to amend the
complaint and add a Tennessee representative also failed. Instead, the California court certified a
nationwide class of plaintiffs, which would include Cribb and Hubbard, and ruled that California
law applies. It is also true that when Hubbard was filed on September 4, 2009, no other action
pursuant to Tennessee law was still pending; however, the motion to amend had not been ruled
upon. In regards to the second factor, the parties are substantially similar. The defendant, EA, is
the same in both actions. These classes are nearly identical, for they both include Tennessee
consumers who purchased the relevant products from EA for essentially the same time periods. As
to the third factor, the cases involve similar issues and claims. Although the Pecover action is
pursuant to California law, and this action is pursuant to Tennessee law, there is substantial overlap
in the issues. Again, they need not be identical, merely substantially similar. The three factors
weigh in favor of the first-to-file rule.
That does not end the inquiry, however, because the Court now considers whether
equity warrants dispensing with the rule in this case. “District courts always [have] discretion given

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appropriate circumstances justifying departure from the first filed rule” to decline to follow the rule
in a case involving “rare or extraordinary circumstances, inequitable conduct, bad faith, or forum
shopping.” Plating Resources, 47 F.Supp.2d at 903 n. 5. Here, the extraordinary circumstance is
that all the lawyers and the parties are involved in both suits. The purpose of the rule is judicial
efficiency. The Pecover suit has advanced well beyond this suit. However, it still would be
inefficient to stay this action, for letting the suit remain pending without advancing this case just
clogs this Court’s docket and does not serve the parties’ interests pursuant to Tennessee law.
Because of the similarity of the suits, and especially because the same lawyers are involved, it would
be more efficient to charge the lawyers with recognizing when duplication has occurred and to avoid
it in both suits. This Court assumes that the lawyers will uphold their ethical obligations to both
courts and to their clients in avoiding duplication so that efficiency can be achieved.
Even in following the first-to-file rule, this Court “may exercise its discretion to stay
the suit before it, to allow both suits to proceed, or, in some circumstances, to enjoin the parties from
proceeding in the other suit.” Smith, 129 F.3d at 361. Considering the special circumstances of
these two cases, in this Court’s discretion, the motion to transfer or stay is DENIED. It would be
more efficient, in light of these unusual circumstances, if both cases proceeded at the same time.
III. CONCLUSION
For the reasons set forth above, Cribb’s motion is GRANTED IN PART AND
DENIED IN PART.
ENTER:
s/J. RONNIE GREER
UNITED STATES DISTRICT JUDGE

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