Case 2:21-cv-09317-MCS-SK Document 29 Filed 01/05/22 Page 1 of 5 Page ID #:953
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`KELLY M. KLAUS (SBN 161091)
`Kelly.Klaus@mto.com
`ROSE LEDA EHLER (SBN 296523)
`Rose.Ehler@mto.com
`SHANNON GALVIN AMINIRAD (SBN 324780)
`Shannon.Aminirad@mto.com
`MUNGER, TOLLES & OLSON LLP
`350 South Grand Avenue
`Fiftieth Floor
`Los Angeles, California 90071-3426
`Telephone: (213) 683-9100
`Facsimile:
`(213) 687-3702
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`Attorneys for Plaintiffs
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`UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`WESTERN DIVISION
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`PARAMOUNT PICTURES
`CORPORATION; UNIVERSAL CITY
`STUDIOS PRODUCTIONS LLLP;
`UNIVERSAL CONTENT
`PRODUCTIONS LLC; UNIVERSAL
`TELEVISION LLC; WARNER BROS.
`ENTERTAINMENT INC.;
`COLUMBIA PICTURES
`INDUSTRIES, INC.; DISNEY
`ENTERPRISES, INC.; NETFLIX
`STUDIOS, LLC; NETFLIX US, LLC;
`and NETFLIX WORLDWIDE
`ENTERTAINMENT, LLC,
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`Plaintiffs,
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`DOES 1-10 d/b/a PRIMEWIRE,
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`vs.
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`Defendants.
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` Case No. 2:21-cv-09317-MCS-SK
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`SUPPLEMENTAL BRIEF
`REGARDING REQUIREMENT OF
`BOND UNDER FEDERAL RULE
`OF CIVIL PROCEDURE 65(c)
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`Judge: Hon. Mark C. Scarsi
`Crtrm.: 7C
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`Case No. 2:21-cv-09317-MCS-SK
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`Case 2:21-cv-09317-MCS-SK Document 29 Filed 01/05/22 Page 2 of 5 Page ID #:954
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`Pursuant to the Court’s direction at the January 3, 2022 hearing on the Motion
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`for Preliminary Injunction, Plaintiffs respectfully submit this supplemental brief on
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`the question whether Rule 65(c) requires the Court to order the posting of a bond.
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`See ECF No. 28.
`I.
`Under Ninth Circuit Law, The Court Has Discretion To Not Require A
`Bond, Provided The Court States Its Reasons For Not Requiring One
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`Federal Rule of Civil Procedure 65(c) provides that the Court may issue a
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`preliminary injunction “only if the movant gives security in an amount that the court
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`considers proper to pay the costs and damages sustained by any party found to have
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`been wrongfully enjoined or restrained.” The Ninth Circuit has held that “[d]espite
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`[Rule 65(c)’s] seemingly mandatory language,” district courts are invested “with
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`discretion as to the amount of security required, if any.” Johnson v. Couturier, 572
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`F.3d 1067, 1086 (9th Cir. 2009) (quoting Jorgensen v. Cassiday, 320 F.3d 906, 919
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`(9th Cir. 2003)) (emphasis in original); see also Diaz v. Brewer, 656 F.3d 1008,
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`1015 (9th Cir. 2011) (same). Diaz is the Ninth Circuit’s most recent published
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`opinion on this question. More recent unpublished opinions are in accord. See, e.g.,
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`2Die4Kourt v. Hillair Cap. Mgmt., 692 F. App’x 366, 369 (9th Cir. 2017).
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`The Ninth Circuit also has said that a district court should give “a clear
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`statement . . . concerning its reasons for requiring or not requiring a bond.”
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`Language Line Servs., Inc. v. Language Servs. Assocs., Inc., 500 F. App’x 678, 682
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`(9th Cir. 2012).
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`Other Circuits have held that Rule 65(c) requires the district court to order the
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`posting of a security bond. See Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592
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`F.3d 412, 426 (3d Cir. 2010) (while “the amount of the bond is left to the discretion
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`of the court, the posting requirement is much less discretionary” (citation omitted));
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`BankDirect Cap. Fin., LLC v. Cap. Premium Fin., Inc., 912 F.3d 1054, 1057 (7th
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`Cir. 2019) (“Rule 65(c) makes the effectiveness of a preliminary injunction
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`contingent on the bond having been posted.”). See generally 11A Charles Alan
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`Case 2:21-cv-09317-MCS-SK Document 29 Filed 01/05/22 Page 3 of 5 Page ID #:955
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`
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`Wright & Arthur R. Miller, Federal Practice & Procedure § 2954 (3d ed. 2021
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`update) (collecting cases).
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`The split of authority may be more apparent than real. Rule 65(c) states the
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`amount of the bond should be set at an amount “the court considers proper.” A
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`court may “consider” the “proper” amount to be zero, for example, where there is no
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`showing the defendant stands to sustain damages (or damages the plaintiff will be
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`unable to pay) if it is later determined the injunction should not have issued. See
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`Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878, 882–83 (9th
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`Cir. 2003) (rejecting appellate argument that bond was required because plaintiff
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`“did not . . . ask the court to set a bond or submit any evidence as to what damages
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`she might incur as a result of the injunction”).
`II.
`In This Case, It Would Be Proper To Require No Bond Or, If A Bond Is
`Required, A Bond In The Amount Of No More Than $50,000
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`Sound reasons support granting Plaintiffs’ Motion without the necessity of a
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`bond or, at most, a bond in the amount of $50,000.
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`First, “the likelihood of success on the merits, as found by the district court,
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`[may] tip[] in favor of a minimal bond or no bond at all.” People of State of Cal. ex
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`rel. Van De Kamp v. Tahoe Reg’l Plan. Agency, 766 F.2d 1319, 1326 (9th Cir.
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`1985), amended, 775 F.2d 998 (9th Cir. 1985); see also 2Die4Kourt, 692 F. App’x
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`at 369 (finding district court did not abuse discretion by not requiring bond based on
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`likelihood of success on the merits).
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`Second, “[t]he district court may dispense with the filing of a bond when it
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`concludes there is no realistic likelihood of harm to the defendant from enjoining his
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`or her conduct.” Jorgensen, 320 F.3d at 919; see also Warner Bros. Entmt. Inc. v.
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`Tusa, No. 2:21-cv-05456-VAP-ASx, 2021 WL 4815947, at *4 (C.D. Cal. Aug. 16,
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`2021) (not requiring a bond when Defendant failed to appear to defend infringing
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`service because “the Court finds there is not sufficient evidence that Defendant will
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`incur any injury because of the injunction”); China Cent. Television v. Create New
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`Case 2:21-cv-09317-MCS-SK Document 29 Filed 01/05/22 Page 4 of 5 Page ID #:956
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`Tech. (HK) Ltd., No. CV 15-01869 MMM (MRWx), 2015 WL 3649187, at *14
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`(C.D. Cal. June 11, 2015) (no bond required where there was no realistic likelihood
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`that preliminary injunction would harm defendants, as “[t]he only harm defendants
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`will suffer . . . is that they will be unable to continue to profit from infringing
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`plaintiffs’ copyrights”).
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`Third, the Court may weigh Plaintiffs’ solvency in determining the proper
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`amount of a security bond. See, e.g., Disney Enters., Inc. v. VidAngel, Inc., 224 F.
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`Supp. 3d 957, 978–79 (C.D. Cal. 2016) (rejecting request for $50 million bond and
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`instead requiring a bond of $250,000 because “Plaintiffs are well funded and
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`established giants in the entertainment industry. . . . [and] have considerable assets
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`to respond in damages if [defendant] is found to have been wrongfully enjoined”),
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`aff’d, 869 F.3d 848 (9th Cir. 2017). Here, Plaintiffs would be able to pay damages
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`to Defendants if it is later determined that the injunction should not have issued.
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`Plaintiffs respectfully request that the Court order that no bond is required.
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`Alternatively, if a bond is required, the Court should set it at a minimal amount.
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`Defendants have not appeared, but in their limited communications have said the
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`revenue they earn from the PrimeWire service is low. See ECF No. 20-3,
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`Declaration of Shannon Aminirad, Ex. B at 9. If a bond is required, the Court
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`should require the bond be no more than $50,000, as Judge Walter required in
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`another case where Plaintiffs obtained a preliminary injunction. Warner Bros.
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`MUNGER, TOLLES & OLSON LLP
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`Entmt. Inc. v. WTV Sys., Inc., 824 F. Supp. 2d 1003, 1015 (C.D. Cal. 2011).
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`DATED: January 5, 2022
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`By:
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`/s/ Kelly M. Klaus
`KELLY M. KLAUS
`Attorneys for Plaintiffs
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`Case 2:21-cv-09317-MCS-SK Document 29 Filed 01/05/22 Page 5 of 5 Page ID #:957
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`CERTIFICATE OF SERVICE
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`I, Kelly M. Klaus, do hereby certify that service of this SUPPLEMENTAL
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`BRIEF REGARDING REQUIREMENT OF BOND UNDER FEDERAL
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`RULE OF CIVIL PROCEDURE 65(c) shall be made upon the Defendants, DOES
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`1-10 d/b/a PRIMEWIRE, by sending the aforementioned documents to the
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`following email addresses:
`admin@primewire.li
`admin@primewire.ag
`primewire.inbox@protonmail.com
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`Service shall be made on this day, January 5, 2022.
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`/s/ Kelly M. Klaus
`Kelly M. Klaus
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