Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 1 of 8 Page ID #:2435
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`Matthew F. Schwartz * Pro Hac Vice
`Brian S. Levenson * Pro Hac Vice
`SCHWARTZ, PONTERIO & LEVENSON, PLLC
`134 West 29th Street, Suite 1006
`New York, New York 10001
`Phone: (212) 714-1200
`Fax: (212) 714-1264
`E-mail: mschwartz@splaw.us
`E-mail: blevenson@splaw.us
`
`Oren S. Giskan * Pro Hac Vice
`GISKAN SOLOTAROFF & ANDERSON LLP
`90 Broad Street, 10th Floor
`New York, New York 10004
`Phone: (212) 847-8315
`Fax: (646) 520-3237
`E-mail: ogiskan@gslawny.com
`
`Allen Hyman (California State Bar No. 73371)
`LAW OFFICES OF ALLEN HYMAN
`10737 Riverside Drive
`North Hollywood, CA 91602
`Phone: (818) 763-6289
`Fax: (818) 763-4676
`E-mail: lawoffah@aol.com
`
`Attorneys for Plaintiffs
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`
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`Plaintiffs respectfully submit this response to this Court’s Order to Show Cause
`(Docket # 218) why the court should not exercise its discretion and sever and dismiss
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`1
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` Case No. 2:19-cv-04073-JFW-RAO
`
`PLAINTIFFS’ RESPONSE TO ORDER
`TO SHOW CAUSE WHY THE COURT
`SHOULD NOT DISMISS ALL
`DEFENDANTS EXCEPT APPLE, INC.
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`SA MUSIC, LLC, et al.,
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`Plaintiffs,
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`v.
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`APPLE INC., et al.,
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`
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`Defendants.
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`

`

`Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 2 of 8 Page ID #:2436
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`the claims against all of the defendants except Apple, Inc. (“Apple”). For the reasons
`discussed herein, Plaintiffs consent to the proposed severance and dismissal except
`propose that the Court, rather than sever all Defendants but Apple, allow Plaintiffs to
`proceed with respect to the Forty-Second Claim against Defendants Apple, Isolation
`Network Inc. (“Ingrooves”), Genepool Distribution Ltd. (“Genepool”) and Ideal
`Music Limited (“Ideal”).
`A. Background
`The First Amended Complaint (“FAC”) pleads 307 separate claims for
`copyright infringement against 66 defendants. Each claim arises from infringements
`of Plaintiffs’ copyrighted musical works committed by a separate “distribution
`chain”, usually a label, a distributor, and an online music store. The FAC describes
`how the infringements have occurred and alleges that the members of each
`distribution chain are jointly and severally liable for the infringements associated with
`that chain. FAC ¶¶ 151-176.
`While Plaintiffs believe that the claims against all Defendants in this action
`arise from the same series of transactions or occurrences and that questions of law or
`fact common to all defendants will arise in the action, they do not oppose severance
`and dismissal without prejudice of certain Defendants. Plaintiffs respectfully
`acknowledge the Court’s conclusion that, as currently constituted, the FAC is
`“unwieldy and will present a severe strain on the Court’s limited resources.” Dkt. 219.
`Plaintiffs accept the Court’s proposed course of action to dismiss certain defendants
`form the case so as to narrow the scope of the claims but respectfully submit that the
`Court’s proposal to dismiss all defendants except Apple would not be the most
`efficient way to proceed.
`Consistent with the Court’s Order to Show Cause why joinder is proper under
`FRCP 20(a)(2), Plaintiffs submit that the most efficient way to divide and proceed
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`2
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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`Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 3 of 8 Page ID #:2437
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`with these claims is by distribution chains, as the entities in each chain are jointly and
`severally liable for the alleged infringements and would be properly joined in one
`action. See 17 USC § 504(c)(1). Plaintiffs propose to proceed in this action on the
`Forty-Second Claim in the First Amended Complaint against the distribution chain
`comprising Apple, Ingrooves, Genepool, and Ideal.
`Joinder of Apple, Ingrooves, Genepool and Ideal is Proper
`B.
`Joinder of defendants who are alleged to be jointly and severally liable for
`copyright infringement is proper. “Courts have long held that in patent, trademark,
`literary property, and copyright infringement cases, any member of the distribution
`chain can be sued as an alleged joint tortfeasor. Since joint tortfeasors are jointly and
`severally liable, the victim of trademark infringement may sue as many or as few of
`the alleged wrongdoers as he chooses,” Lockheed Martin Corp. v. Network Solutions,
`Inc., No. CV 96–7438 DDP (ANx), 1997 WL 381967, *3 (C.D. Cal. Mar. 19,
`1997)(internal citations omitted). Members of a common distribution chain are jointly
`and severally liable for infringement and can be permissively joined under Rule 20.
`See Lockheed Martin Corp. v. Network Solutions, Inc., No. CV 96–7438 DDP (ANx),
`1997 WL 381967, *3 (C.D. Cal. Mar. 19, 1997); see LMNO Cable Group, Inc. v.
`Discovery Communications LLC, 2017 WL 8932167 (C.D. Cal 2017) (“It is clear that
`where defendants are alleged to be jointly liable, they may be joined under Rule 20
`because the [Rule 20] transaction-or-occurrence test is always satisfied.” (citing
`Temple v. Synthes Corp., 498 U.S. 5, 7, 111 S.Ct. 315, 112 L.Ed.2d 263 (1990) (per
`curium) (noting that a joint tortfeasor is a permissive party). See Frank Music Corp.
`v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 519 (9th Cir. 1985)(“[w]hen a copyright
`is infringed, all infringers are jointly and severally liable for plaintiffs’ actual
`damages…”).
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`3
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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`Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 4 of 8 Page ID #:2438
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`Where there is some factual commonality among infringement claims, this
`suffices to satisfy the “same transaction, occurrence or series of transactions or
`occurrences” test. See Brighton Collectibles, Inc. v. RK Texas Leather Mfg., No. 10–
`CV–419–GPC (WVG), 2013 WL 2631333, *3 (S.D. Cal. June 11, 2013) (“Typically,
`... a party ‘must assert rights or have rights asserted against them, that arise from
`related activities—a transaction or an occurrence or a series thereof’ ”). Thus, “claims
`that arise out of a systematic pattern of events and have a very definite logical
`relationship” meet the “same transaction” requirement. Id. (internal quotation marks
`omitted).
`Where one defendant has supplied infringing goods to other defendants, or
`multiple infringers have supplied goods to a common retailer, the claims arise out of
`the “same transaction” for purposes of Rule 20. Brighton Collectibles, at *3–4. See
`also, N. Face Apparel Corp. v Dahan, 2014 WL 12596716, at *6 (CD Cal Mar. 14,
`2014)(“members of a common distribution chain are jointly and severally liable for
`trademark infringement, and can be permissively joined under Rule 20”); Bravado
`International Group Merchandising Services v. Jin O. Cha et. al., 2010 WL 2650432
`(C.D.Cal 2010); Arista Records, LLC v. Does 1-4, 589 F.Supp.2d 151, 155
`(D.Conn.2008) (“The ‘same transaction’ requirement [of Rule 20(a)(2)] means that
`there must be some allegation that the joined defendants ‘conspired or acted
`jointly.’”).
`C. The Forty-Second Claim Should Proceed in this Action
`Plaintiffs respectfully submit that the Court should sever and dismiss, without
`prejudice, all defendants and claims except those in the Forty-Second Claim against
`Apple, Ingrooves, Genepool, and Ideal. FAC ¶¶ 1-234, 317-318, Exhibit B-42. The
`FAC alleges that these defendants are properly joined as jointly and severally liable
`members of a distinct distribution chain that distributed 39 pirated recordings of
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`4
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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`Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 5 of 8 Page ID #:2439
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`copyrights owned by Plaintiffs SA Music, LLC and William Kolbert as trustee of the
`Harold Trust. (See FAC, Exh. B-42). Ideal is the record label that reproduced and
`distributed the infringing recordings to Genepool (a subdistributor) which, in turn,
`distributed the recordings to Ingrooves (a distributor) which, in turn, distributed them
`to Apple for sale in its online music store.
`Apple is a corporation organized under the laws of the State of California with
`a place of business at 1 Apple Park Way in Cupertino, California. FAC, ¶ 27. Isolation
`Network, Inc. is a corporation organized under the laws of the State of California with
`a place of business at 15821 Ventura Blvd # 420, Encino, CA. FAC, ¶ 39. Jurisdiction
`and venue are therefore both appropriate in this district. Martenson v. Koch, 942
`F.Supp. 983, 993-997 (N.D.Cal 2013); Brayton Purcell LLP v. Recordon & Recordon,
`606 F.3d 1124, 1126 (9th Cir. 2010)(venue is proper wherever defendant is subject to
`personal jurisdiction). Genepool and Ideal Music are both business entities organized
`and doing business in the United Kingdom. FAC, ¶¶ 46, 51. Venue for foreign
`corporations is governed by the general venue statute, which provides that “a
`defendant not resident in the United States may be sued in any judicial district.” 28
`U.S.C. § 1391(c)(3).
`Judicial economy will be facilitated if the Court allows this cause of action to
`proceed because the claims within it arise from the same series of transactions and
`occurrences and there are common core questions of law and fact including: (1)
`plaintiffs’ ownership of the copyrights; (2) whether the same 39 recordings distributed
`by each of member of the distribution chain were pirated; and (3) whether the same
`39 recordings in the distribution chain infringed Plaintiffs’ copyrights. If these parties
`are severed, Plaintiffs will be required to put on the same evidence in as many as four
`different trials as to the same issues. In addition, there is no prejudice to these
`Defendants because multiple separate trials for each member of the distribution chain
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`5
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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`Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 6 of 8 Page ID #:2440
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`(Apple, Isolation, Genepool and Ideal) concerning the distribution of the same 39
`recordings will multiply the amount of costs and expenses and waste the time and
`resources of the court, witness, juries and the parties, particularly given the
`overlapping factual and legal issues identified above. Moreover, the burden on the
`Court to conduct four separate trials concerning the same distribution chain would be
`great.
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`Conversely, judicial economy would not be promoted if the Court were to
`divide the claims by defendant. Leaving Apple as the sole remaining defendant would
`present a far more complicated proceeding because it would encompass 33 separate
`distribution chains comprising over 750 recordings originating from 32 different
`record labels distributed by as many as 8 different distributors. See Claims 39-71 in
`the First Amended Complaint at FAC, Ex. B-39 through B-72. Such a proceeding
`would also involve widespread non-party discovery for each of the claims against
`Apple.
`Accordingly, Plaintiffs propose that the Court sever and dismiss, without
`prejudice, all defendants and claims with the exception of those in the Forty-Second
`Claim against Apple, Ingrooves, Genepool, and Ideal. Plaintiff will proceed with the
`claims in Claim 42 in this action and refile separate actions for the other distribution
`chains in the appropriate districts depending on the composition of the distribution
`chain relevant to a particular claim.
`D. The Dismissal Should be Without Prejudice
`Whatever the scope of the Court’s dismissal order, it should be without
`prejudice. Where the Court finds that FRCP Rule 20's test for permissive joinder is
`not satisfied, Rule 21 gives the court discretion, “ ‘on motion of any party or of its
`own initiative at any stage of the action and on such terms as are just’ to add or drop
`parties so as to avoid dismissing an action.” Sams v. Beech Aircraft Corp., 625 F.2d
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`6
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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`Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 7 of 8 Page ID #:2441
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`273, 277 (9th Cir. 1980). Misjoinder or parties, however, “is not a ground for
`dismissing an action.” Fed. R. Civ. P. 21; Coughlin v Rogers, 130 F.3d 1348, 1350
`(9th Cir 1997)(stating that a court may sever misjoined plaintiffs by dismissing them
`without prejudice to the institution of new, separate lawsuits by the dropped
`plaintiffs). “When a court ‘drops’ a defendant under Rule 21, that defendant is
`dismissed from the case without prejudice.” Harris v Lappin, 2009 WL 789756, at *7
`(CD Cal Mar. 19, 2009) citing DirecTV, Inc. v. Leto, 467 F.3d 842, 845 (3d Cir. 2006).
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`7
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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`Case 2:19-cv-04073-JFW-RAO Document 221 Filed 09/10/19 Page 8 of 8 Page ID #:2442
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`Conclusion
`Plaintiffs therefore consent to the dismissal, without prejudice, of all claims
`except those by SA Music LLC and William Kolbert as trustee of the Harold Arlen
`Trust in Claim Number 42 against Apple, Ingrooves, Genepool, and Ideal Music.
`DATED: September 10, 2019 Respectfully submitted,
`
`
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`
`By: /s/
`Matthew F. Schwartz (Pro Hac Vice)
`Brian S. Levenson (Pro Hac Vice)
`SCHWARTZ, PONTERIO & LEVENSON, PLLC
`134 West 29th Street, Suite 1006
`New York, New York 10001
`Phone: (212) 714-1200
`E-mail: mschwartz@splaw.us
`E-mail: blevenson@splaw.us
`
`Oren S. Giskan (Pro Hac Vice)
`GISKAN SOLOTAROFF & ANDERSON LLP
`90 Broad Street, 10th Floor
`New York, New York 10004
`Phone: (212) 847-8315
`E-mail: ogiskan@gslawny.com
`
`Allen Hyman (California State Bar No. 73371)
`LAW OFFICES OF ALLEN HYMAN
`10737 Riverside Drive
`North Hollywood, CA 91602
`Phone: (818) 763-6289
`E-mail: lawoffah@aol.com
`
`Attorneys for Plaintiffs
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`8
`PLAINTIFFS’ RESPONSE TO ORDER TO SHOW CAUSE WHY
`WHY THE COURT SHOULD NOT DISMISS ALL DEFENDANTS EXCEPT APPLE, INC.
`Case No. 2:19-cv-04073-JFW-RAO
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