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finding plaintiff's repetitive motions that lacked merit, "coupled with the fact that this case was duplicative and the District Court noted that his conduct is 'nearly vexatious,' favors awarding fees."
Summary of this case from Photo v. Mcgraw-Hill Global Educ. Holdings LLCOpinion
No. C07-05850 MJJ.
March 4, 2008
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
INTRODUCTION
Before the Court is Defendants Storage Technology Corporation (StorageTek), Sun Microsystems, Inc., ("Sun"), Michael Melnick ("Melnick"), Julie DeCecco ("DeCecco"), Michael P. Abramovitz ("Abramovitz"), Lisa K. Rady ("Rady") and Jonathan Schwartz's ("Schwartz") (collectively, "Defendants") Motion to Dismiss. (Docket No. 35.) Plaintiff Dongxiao Yue ("Yue") opposes the Motion and filed a Motion Strike Portions of Defendant's Motion to Dismiss, which Defendants opposed in their Reply brief. For the following reasons, the Court GRANTS Defendants' Motion.
FACTUAL BACKGROUND
Beginning in 1994, Plaintiff Yue developed technology he later named PowerRPC and ONC RPC (collectively, "PowerRPC"). ( See First Amended Complaint ("FAC") ¶ 1.) Plaintiff Yue formed Netbula, LLC ("Netbula") in July 1996 to market PowerRPC. ( See id.) PowerRPC software contains: (1) a software development kit ("SDK") that consists of software tools used by programmers to create applications that use RPC technology; and (2) supporting programs ("Supporting Programs") that consist of software programs and components that can be used by applications developed with ONC RPC or PowerRPC. ( Id. ¶ 17.)
Plaintiff, on his own and through Netbula, has filed numerous actions to vindicate his rights. First, Netbula brought an action against Bindview Development Corporation (" Netbula-Bindview"), an entity that is not a Defendant in this action. ( See Netbula, LLC v. Bindview Development Corp., No. 06-0711MJJ.) Then, on December 4, 2006 Netbula filed an action (" Netbula-Sun") against Sun, StorageTek, International Business Machines Corporation ("IBM"), EMC Corporation ("EMC") and Darden Restaurants ("Darden"). ( See Netbula, LLC v. Storage Technology Corp., Case No. CV 06-7391MJJ.) In Netbula-Sun, Netbula alleged that the defendants engaged in: (1) copyright infringement, (2) intentional fraud, (3) breach of contract, (4) statutory unfair competition under California Business Professions Code Section 17200 et seq.; and (5) equitable accounting and imposition of a constructive trust. ( See No. CV 6-7391MJJ, Complaint, Docket No. 15.) In September 2007, while a Motion for Summary Judgment was pending in the Netbula-Sun case, Netbula assigned to Plaintiff all exclusive copyrights in the versions of PowerRPC created before January 1, 2007. (FAC ¶ 3.) Netbula's counsel moved to withdraw from the action and substitute Yue as a pro se plaintiff. The Court did not grant Plaintiff's request to proceed pro se because, inter alia, he could not, as a pro se litigant, represent the rights of the entity.
The Court takes judicial notice of matters in the public record, here documents filed with and by the Court, in the other actions filed by Plaintiff and/or Netbula insofar as they aid the Court in resolution of this matter. See MGIC Indem. Corp. v. Weisman, 803 F.2d 50, 504 (9th Cir. 1986) (taking judicial notice of other court documents filed in the public record); Day v. Moscow, 955 F.2d 807, 811 (2d Cir. 1992) (explaining that a court may take judicial notice of its own records).
Plaintiff, in his Motion to Strike, argues that the Court may not take judicial notice of documents filed in the Netbula-Bindview matter. Plaintiff also agues that the Court should strike portions of Defendants' Motion which reference this case. The Court, however, does not rely on matters presented in Netbula-Bindview to resolve this Motion. The Court simply recognizes the existence of this case. In any event, Plaintiff does not cite any authority for the proposition that the Court cannot take judicial notice of matters in the public record, here a case on the Court's docket. The Court therefore denies Plaintiff's Motion to Strike.
After a hearing, the Court granted the Netbula-Sun defendants' motion for summary judgment. The Court found that the defendants' use of Netbula's software was within the scope of the license agreements entered into in 2000 and 2004 by Netbula and StorageTek, which therefore precluded claims for copyright infringement.
While the Motion for Summary Judgment in the Netbula-Sun case was pending, Plaintiff filed this action against Sun and StorageTek (" Yue-Sun"). Plaintiff later amended his Complaint to include the individual defendants. ( See FAC.) Plaintiff alleges that Defendants' use, beyond the scope of the 2000 and 2004 license agreements entered into by Netbula and StorageTek, amounts to copyright infringement. (FAC ¶¶ 30, 44.) Defendants now move to dismiss the Yue-Sun case on the ground that it is duplicative of the Netbula-Sun case.
LEGAL STANDARD
The Ninth Circuit has held that "[d]istrict courts retain broad discretion to control their dockets and in the exercise of that power they may impose sanctions including, where appropriate, default or dismissal." Adams v. State of California Department of Health Services, 487 F.3d 684, 688 (9th Cir. 2007) (quotations omitted). In the case of duplicative later-filed actions, "[a]fter weighing the equities of the case, the district court may exercise its discretion to dismiss a duplicative later-filed action, to stay that action pending resolution of the previously filed action, to enjoin the parties from proceeding with it, or to consolidate both actions." Id. To determine if a later-filed action is duplicative, the court examines "whether the causes of action and relief sought, as well as the parties or privies to the action, are the same." Id. at 689.
ANALYSIS
Defendants contend that this action, Yue-Sun, is duplicative of Netbula-Sun and seek an order dismissing Yue-Sun with prejudice. The Court first determines if Yue-Sun is a duplicative action under Adams, then turns to the proper resolution of the matter.
I. Yue-Sun Presents the Same Causes of Action as Netbula-Sun.
To determine if the same causes of action are presented by the two actions, the Court applies the familiar transaction test, which was developed in the context of claim preclusion, and looks to four factors:
(1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts. The last of these criteria is the most important.Adams, 487 F.3d at 689 (quoting Costantini v. Trans World Airlines, 681 F.2d 1199, 1201-02 (9th Cir. 1982) (quotations and citation omitted).
Here, it is clear that Yue-Sun presents the same claims already asserted in Netbula-Sun. Essentially, Plaintiff alleges in each action that StorageTek exceeded the scope of the license agreements and engaged in copyright infringement. In both actions, the same licensing agreements, one entered into in 2000 and the other entered into in 2004, are at stake. The additional facts Plaintiff pleads in the Yue-Sun Complaint are a regurgitation of the evidence presented by Netbula in opposition to the Netbula-Sun defendants' motion for summary judgment. In fact, much of the Yue-Sun Complaint is a verbatim restatement of Mr. Yue's declaration presented to the Court in opposition to the Netbula-Sun defendants' motion for summary judgment. It is clear, therefore, that the two actions arise out of the same transactional nucleus of facts — Defendants' license agreements with Netbula and Defendants' use of Netbula's PowerRPC software.
Next, in Netbula-Sun the Court granted summary judgment on the merits of the claims that are now presented again in Yue-Sun, therefore the rights of the defendants in Netbula-Sun would be destroyed or impaired by prosecution of Yue-Sun. In addition, presumably the same evidence would be presented in Yue-Sun as was presented in Netbula-Sun, especially in light of the Complaint's heavy reliance on evidence already presented in the Netbula-Sun action.
Finally, the two actions involve infringement of the same rights — Plaintiff's rights to the PowerRPC software that he alleges Defendants used in excess of their license agreements. While Plaintiff argues that there are two copyrights at issue in Yue-Sun, both of which were not asserted in Netbula-Sun, this distinction does not change the underlying rights at issue. In both actions, Plaintiff alleges the same use, in excess of the same licenses, of the same software. The claim that Defendants' infringing use of the PowerRPC software impacted additional copyrights is an attempt to make out a separate claim for the same allegedly infringing use of the same software by Defendants. However, Plaintiffs' allegation that the same conduct violated his interest in different copyrights, "does not mean that the underlying right is different in this suit." Fantasy, Inc. v. LaFace Records, Case No. CV 98-0856, 1998 U.S. Dist. LEXIS 20931, *13 (E.D. Cal. Nov. 12, 1998) (finding that breach-of-contract and fraud claims in a later-filed lawsuit vindicated the same rights as were presented in a prior action for violation of federal copyright law); see also Feminist Women's Health Center v. Codispoti, 63 F.3d 863, 868 (9th Cir. 1995) (holding that a RICO claim in a later-filed action vindicated the same rights as were presented in a prior action for alleged deprivation of constitutional rights). Instead, if the facts underlying Netbula-Sun supported copyright infringement of additional copyrights, Netbula should have asserted violations of those copyrights in Netbula-Sun and not by filing a subsequent action. See id. at 694 (holding that dismissal with prejudice is appropriate where the plaintiff in successive actions attempts to "litigat[e] piecemeal . . . issues that could have been resolved in one action") (quoting Flynn v. State Bd. of Chiropractic Exam'rs, 418 F.2d 668, 668 (9th Cir. 1969)). In addition, the most important criteria in determining if the actions present the same causes of action is whether the two actions arise out of the same transactional nucleus of facts. Here, they most certainly do. The Court therefore finds that Yue-Sun and Netbula-Sun present the same causes of action. See id. at 691 (holding that even though the later-filed action involved a violation of a different and distinct right, the fact that the actions arose from a common transactional nucleus of facts was the most important, and most persuasive, factor).
In Yue-Sun, Plaintiff alleges that Defendants' use infringed two copyrights: (1) the "PowerRPC PWRPC32.DLL 00-SDK-STK" registered October 3, 2006 with U.S. registration number TX 6-437-847; and (2) the "NETBULA POWERRPC 2K4" registered on December 15, 2006 with U.S. registration number TX 6-491-697. (FAC ¶ 2.) Plaintiff also alleges that Defendants infringed Plaintiff's other unpublished works with pending copyright registrations. ( Id.) In Netbula-Sun, the copyright at issue was Netbula's main product, "PowerRPC" (Registration No. TX 6-211-063, registered October 18, 2005).
This is especially true given that Netbula was the author and copyright claimant for both of the two copyrights asserted in Yue-Sun and only assigned the copyrights to Yue in September 2007. Thus, Netbula could have asserted violations of these copyrights in the Netbula-Sun action.
II. Yue-Sun Involves the Same Parties or Privies as Netbula-Sun.
Privity among successive parties is the second element used to determine whether a subsequent action is duplicative. The Ninth Circuit has
expanded the concept to include a broader array of relationships which fit under the title of `virtual representation.' The necessary elements of virtual representation are an identity of interests and adequate representation. Additional features of a virtual relationship include a close relationship, substantial participation, and tactical maneuvering.Adams, 487 F.3d at 691 (quotations and citations omitted).
Here, Plaintiff's Complaint names StorageTek and Sun, both of which were defendants in the Netbula-Sun action. Plaintiff also, however, brings this action against five individuals who were not named in the Netbula-Sun action. These five individuals are, as Plaintiff alleges, current or former employees of StorageTek or Sun who contributed to the alleged copyright infringement. ( See FAC ¶ 11.) As employees of StorageTek or Sun, these Defendants were identified in the Netbula-Sun action and four of the five provided declarations in support of summary judgment in the Netbula-Sun case. ( See Netbula-Sun, Docket Nos. 63, 116, 118, 120 (Melnick Decl., Abramovitz Decl., DeCecco Decl., Rady Decl.).) Thus, the individual Defendants had a sufficient identity of interest and close relationship with StorageTek or Sun such that they were virtually represented in the prior action. See id. (holding that three employees in a later-filed action were virtually represented by their employer in the prior action).
In addition, the plaintiffs are different in these two actions. In Nebula-Sun, Netbula represented the copyright claims, although Yue attempted to substitute in as the Plaintiff after Netbula assigned him the copyrights in September 2007. In Yue-Sun, Yue himself is representing the same claims previously brought by Netbula. In both cases, however, the rights of Netbula and Yue are deeply intertwined. Yue is the founder and president of Netbula, LLC and thus may be seen as virtually represented in the Netbula-Sun action. In addition, Netbula assigned all of its copyrights prior to January 1, 2007 to Yue. Therefore, Yue is an assignee and is in privity with Netbula. See, e.g., Headwaters Inc. v. United States Forest Serv., 399 F.3d 1047, 1052-53 (9th Cir. 2005) ("Privity, traditionally, arose from a limited number of legal relationships in which two parties have . . . transferred rights with respect to a particular legal interest, chiefly: [among others,] assignors and assignees. . . ."). Yue and Netbula are, therefore, in privity.
In sum, therefore, all of the parties in Yue-Sun were either parties in Netbula-Sun or were in privity with parties to that action. The Court, after reviewing this case against the standards set forth in Adams, finds that this case is duplicative of Netbula-Sun because it presents the same causes of action between the same parties or their privies.
III. Dismissal Is Appropriate.
The trial court has an "ample" degree of discretion in determining whether to dismiss later-filed duplicative actions. Adams, 487 F.3d at 692 ( quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952)). In addition, the Ninth Circuit has recognized that "[d]ismissal of the duplicative lawsuit, more so than the issuance of a stay or the enjoinment of proceedings, promotes judicial economy and the `comprehensive disposition of litigation.'" Id. (quoting Kerotest, 342 U.S. at 183).
Weighing the equities, the Court finds that dismissing Yue-Sun, the duplicative action, is well within its discretion and promotes judicial economy and the comprehensive disposition of litigation. Yue-Sun presents the same claims as Netbula-Sun and is effectively Plaintiff's attempt to re-litigate issues that have already been presented, and determined, by the Court. In addition, given the tactics that Plaintiff has pursued, which have ranged from duplicative to nearly vexatious, the Court finds that dismissing the action with prejudice is appropriate.
CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants' Motion to Dismiss with prejudice. The Clerk of the Court is directed to close the file.