STUDIO A ENTERTAINMENT, INC., Plaintiff v. ACTION DVD, et al., Defendants Case No.: 1:05 CV 1196 United States District Court, N.D. Ohio, Eastern Division Filed: February 02, 2007 Counsel Jules D. Zalon, West Orange, NJ, for Plaintiff Oliver Jr., Solomon, United States District Judge ORDER *1 This lawsuit arises out of allegations that Defendants infringed Plaintiff’s copyrighted material by selling unauthorized, or bootleg, DVDs of adult feature-length films rightfully owned by Plaintiff. (Pl.’s Compl., ECF No. 1.) Now pending before the court are Defendants Action DVD, Action Software, Inc., and Alex Belfer’s (collectively “Defendants”) Motion to Limit Discovery or in Alternative Motion for Protective Order (“Defendants’ Motion for Protective Order”) (ECF No. 84); Plaintiff Studio A Entertainment, Inc.’s (“Plaintiff”) Motion to Review Seized DVDs (ECF No. 87); Defendants’ Motion for Sanctions Motion to Dismiss or in the Alternative Motion in Limine (“Defendants’ Motion to Dismiss”) (ECF No. 91); Defendants’ Motion to Disqualify Plaintiff’s Attorneys (ECF No. 93); and Plaintiff’s Motion to Extend Deadlines for Conclusion of Discovery and Filing Dispositive Motions (“Plaintiff’s Motion to Extend Deadlines”) (ECF No. 102). For the reasons stated below, Defendants’ Motion for Protective Order is denied as moot (ECF No. 84); Plaintiff’s Motion to Review Seized DVDs is denied (ECF No. 87); Defendants’ Motion to Dismiss is denied (ECF No. 91); Defendants’ Motion to Disqualify Plaintiff’s Attorneys is denied (ECF No. 93); and Plaintiff’s Motion to Extend Deadlines is granted in part and denied in part (ECF No. 102). The court will hold a telephonic conference with the parties on February 13, 2007, at 11:00 a.m. I. DEFENDANTS’ MOTION FOR PROTECTIVE ORDER Defendants request that the court either allow them to redact customer names and addresses from certain discovery documents or, alternatively, that the court issue a protective order regarding this potentially confidential information. (ECF No. 84.) On January 20, 2007, Plaintiff submitted a Proposed Stipulated Protective Order (ECF No. 98), which the court signed on January 25, 2007 (Order, ECF No. 101). Therefore, this motion is denied as moot. Defendants are required to fully comply with any outstanding discovery requests by Plaintiff, and such information shall comply with the Stipulated Protective Order. II. PLAINTIFF’S MOTION TO REVIEW SEIZED DVDS Plaintiff requests that the court authorize Hal-Com, Inc. (“Hal-Com”), the non-party custodian of the seized evidence, to distribute one DVD of each title to each party, so that each party may view them in their entirety to confirm that the entire content contains Plaintiff’s copyrighted material. (ECF No. 87, at 1-2.) Plaintiff alleges that Defendants did not respond to Plaintiff’s numerous requests that Defendants stipulate to this statement. (Id. at 6-8.) On December 20, 2006, Plaintiff requested that Defendants agree to the following language: Plaintiff and defendants hereby stipulate – for purposes of the trial of this action, only – that, to the naked eye, each of the 21 Studio A DVD titles acquired by Action Software from Active Distributors, Inc. in Toronto, Ontario pursuant to invoices dated June 23, October 14 and December 17, 2004 is essentially identical to the corresponding DVD title manufactured and sold by Studio A Entertainment, Inc. Specifically, when viewed on a standard DVD player, there would be no discernible difference between each of the DVDs sold by Active Distributors, Inc. and the corresponding title manufactured and sold by Studio A. *2 (Id. at 7, ¶ 11.) In their Opposition Brief, Defendants made the following statement: Defendants hereby stipulate that, each one of the DVDs examined on December 13, 2006 at Hal-Com, Inc., location contained corresponding title manufactured by Studio A; and each of said DVDs is technically and visually identical to corresponding DVD titles manufactured by Studio A. (Defs.’ Reply to Pl.’s Mot. to Review Seized DVDs 1, ECF No. 92.) Although the language is not identical to Plaintiff’s requested stipulation, the court finds that the content of the stipulation is substantially similar so as to render Plaintiff’s motion moot. Plaintiff’s Reply Brief does not acknowledge Defendants’ stipulation. (See Pl.’s Reply Br. in Supp. of Pl.’s Mot. to View Seized DVDs, ECF No. 94.) Instead, Plaintiff provides a new rationale for viewing each DVD title in its entirety: to disprove statements made in Defendants’ expert report by John Karl Ban, who was present at the joint inspection of DVDs held on December 13, 2006. (Id. at 2; see Defs.’ Expert Report, ECF Nos. 88-1, 88-2, 88-3.) Ban’s report states that a. After reviewing Adult store practices and purchasing several relevant titles of Studio A DVD’s and inspecting allegedly pirated confiscated DVD’s from the Defendant it is of my opinion they are visually identical to the naked eye. I did not see a discrepancy in bar codes being fuzzy or clear. The DVD cover artwork was identical. The DVD content of audio, video, and authoring commands were identical.... b. It is impossible to either visually or technically distinguish between the allegedly authorized and allegedly unauthorized DVDs. (Defs.’ Expert Report 4, ECF No. 88-2.) Plaintiff contends that these statements are plainly false “[b]ecause an even casual examination of the competing DVDs [without the aid of any mechanical device] clearly shows visible differences in codes found on the inner rings (or hubs) of each DVD.” (Pl.’s Reply Br. at 2.) Plaintiff’s argument thus demonstrates that they are able to contradict Ban’s statements without viewing the DVDs in their entirety. Moreover, Plaintiff has submitted a separate Motion in Limine to Strike Report of John Ban, in which Plaintiff submits several exhibits to challenge Ban’s conclusions. (ECF No. 100.) Finally, in light of how the within case has progressed so far, the court is not persuaded that allowing each party to view the disputed DVDs outside the presence of the opposing party will lead to any joint stipulations whatsoever. Therefore, Plaintiff’s motion is denied. Plaintiff’s Motion in Limine to Strike Report of John Ban will be decided separately once the motion becomes ripe. III. DEFENDANTS’ MOTION TO DISMISS In its Temporary Restraining Order of May 11, 2005, the court provided the following instructions: The items so seized and impounded shall forthwith be delivered to the care and custody of Plaintiff’s attorneys or such attorneys’ designee as substitute custodian, pending further order of this court. At the time of the seizure, Plaintiff’s counsel shall provide Defendants with a receipt listing the number of videos seized, along with a general description of any business records and other materials seized. Once the seizure is completed, counsel shall create a complete inventory of all items seized and shall provide the same to Defendants, and shall return to Defendants their business records promptly upon completion of copying thereof. *3 (Order, ECF No. 23, at 6.) Defendants allege that the DVDs at the center of the instant dispute have been spoiled by Plaintiff. Consequently, Defendants seek sanctions from Plaintiff, including dismissal of the case (erroneously pursuant to Fed. R. Civ. P. 56, which actually controls summary judgment); or, alternatively, that the court issue an order excluding the DVDs from evidence in the within case.[1] (Defs.’ Mot. to Dismiss at 1.) Defendants allege five separate incidents that lead to their claim of spoliation. The court will discuss each in turn. A. Receipt of Seized DVDs at Time of Seizure First, Defendants allege that, in violation of the court’s Temporary Restraining Order, Plaintiff did not provide Defendants with a receipt of the seized DVDs at the time of the seizure on May 12, 2005. (Defs.’ Mot. to Dismiss at 1.) Plaintiff contends that it did provide the required receipt, and submits an affidavit of a U.S. Marshal who was present at the seizure, in which he states that Plaintiff’s counsel “provided both [Defendant] Mr. [Alex] Belfer and me with a copy of a hand-written receipt.” (Decl. of Mark L. Hebert ¶ 6, ECF No. 97-4, at 3) (“Hebert Aff.”) Hebert’s affidavit attaches a copy of the receipt, which was provided by Plaintiff, because Hebert’s office “does not retain such documents,” and Hebert states that the document “appears to me to be a copy of the receipt that he gave to Mr. Belfer and me at the seizure. [His scribble is very memorable.]”[2] (Id.) (bracketed language in original). The court finds Hebert’s affidavit persuasive and, therefore, that Plaintiff did in fact provide the required receipt of the seized DVDs at the time of seizure. B. Complete Inventory of Seized DVDs Second, Defendants allege that, in violation of the court’s Temporary Restraining Order, Plaintiff did not provide Defendants with a complete inventory of the seized DVDs after the seizure. (Defs.’ Mot. to Dismiss at 2.) Plaintiffs contend that the initial receipt they provided at the time of seizure also satisfied the complete inventory requirement. (Pl.’s Decl. and Br. in Opp’n to Defs.’ Mot. to Dismiss 2, ECF No. 97.) Without deciding that issue, the court notes that Plaintiff provided the complete list of seized DVDs in conjunction with its Opposition Brief, as well as an exhibit introduced during the deposition of Anthony Batary, a Hal-Com employee who was present during the seizure. (ECF No. 97-3, at 5-6; see Dep. of Anthony Batary 14:15-25, ECF No. 51) (“Batary Dep.”) Consequently, the court finds that even if the initial receipt does not constitute a complete inventory, Plaintiff has since provided a complete inventory of the seized DVDs. In addition, the court notes that Defendants neglected to make their own inventory of the seized DVDs. Therefore, the court does not find that this issue constitutes spoliation. C. Hal-Com’s Inspection Without Defendant’s Knowledge and Discrepancy in Number of DVDs *4 Third, Defendants allege that Plaintiff spoiled evidence in or about March, 2006, by telephoning Batary at Hal-Com, and instructing him to unseal the seized box and to open and count the DVDs without notifying either the court or Defendants. (Defs.’ Mot. to Dismiss at 4.) Plaintiff does not deny that this occurred. (Pl.’s Opp’n Br. at 3, 8-10.) Instead, Plaintiff points out that the court’s Temporary Restraining Order directed Plaintiff to maintain control of the seized evidence (Order, ECF No. 23, at 6) and that, at the seizure, the parties decided to have Hal-Com, a neutral non-party, maintain control instead.[3] Plaintiff’s counsel goes so far as to state that [h]ad I had custody of the DVDs, I would – as a matter of course – have opened up every single package and examined it, so I could represent to the court that the DVDs were in fact bootleg. The only difference in this case was that I had Mr. Batary do what I otherwise would have done. (Pl.’s Opp’n Br. at 10.) The court notes that awarding one party control over the seized evidence is very different from allowing that party to inspect the evidence outside the presence of opposing counsel. In the instant case, Plaintiff could have permissibly kept control of the DVDs in accordance with the court’s Order; however, had Plaintiff then inspected the evidence by itself, without the knowledge or presence of Defendants, the issue of spoliation would be much more difficult to resolve. As here, however, where the inspection was conducted without the presence of either party, by a neutral non-party upon whom both parties had previously agreed, the court finds that no spoliation occurred. Going forward, however, at least one representative from each party must be present for any future inspection of the box of DVDs or the DVDs themselves. More troubling is the fact that during Batary’s inspection in or around March, 2006, he recorded a different number of DVDs and titles than were recorded during the seizure. At the seizure, Plaintiff recorded on the initial receipt that 188 DVDs and 15 titles were being seized. (Receipt on Seizure, ECF No. 97-2.) Yet Batary recorded 233 DVDs and 17 titles when he opened the box at Plaintiff’s direction.[4] (ECF No. 97-3, at 5-6.) Defendants allege that the fact that a different number of DVDs were counted at this point indicates spoliation. (Defs.’ Mot. to Dismiss at 8.) Plaintiff’s explanation is that he must have miscounted the DVDs at the time of seizure and noted the wrong number on the receipt. (Pl.’s Opp’n Br. at 4.) A difference of 45 DVDs and 2 additional titles is potentially significant, and Defendants are free to raise this discrepancy at trial. At this point, however, Defendant has failed to show that the disparity is due to any wrongdoing or neglect on the part of either Plaintiff or Hal-Com, and therefore the court finds no spoliation. D. Unauthorized Opening of the Box and DVDs Fourth, Defendants state that when they saw the box during the joint inspection of DVDs on December 13, 2006, they observed that the box appeared to have been previously opened multiple times and the condition of the DVDs was different that at the time of seizure. “Examination of the box suggests that it was opened numerous times prior to December 13, 2006.” (Defs.’ Mot. to Dismiss at 4.) As discussed, it is undisputed that the box was opened once, by Batary. Defendants do not explain or offer any support for their allegation that the box had been opened “numerous times.” Defendants also state that the cellophane wrapper had been removed from each DVD “rendering its condition different from the time of their [sic] original receipt at Action Software’s warehouse as well as the time of the seizure on May 12, 2005.” (Id.) Plaintiffs admit that one copy of each DVD was taken out of its cellophane wrapper during the seizure – in the presence of Defendant Belfer and Defendants’ counsel. (Pl.’s Opp’n Br. at 6; accord Hebert Aff. ¶ 5.) In addition, the affidavit of Batary further details how the box and DVDs were maintained: *5 5. After the box of DVDs was taped up, Mr. Zalon [Plaintiff’s attorney], accompanied by one or two Marshal deputies, brought the DVD box out to the parking lot and placed it in my car. I then drove it directly to the Hal-Com office and placed it in a room where it remained, unopened and untouched, until February 28th or March 1st, 2006. 6. On that date, at the request of Mr. Zalon, I opened the box and examined every single DVD contained therein. I did this by cutting open the cellophane wrapper on the individual disks .... I should mention that the cellophane on some of the boxes had already been opened .... ..* * * 9. Following my examination of the DVDs, I put them all back into the box, taped it shut and did not open it again. * * * 11. I understand that Action’s attorneys are claiming that the DVDs were in some manner spoliated (the term was explained to me by Hal-Com’s attorneys). I can state with absolute assurance that between the time that I took custody until the time that I opened the box and produced the inventory described above in ¶¶6-8, I did not touch any of those DVDs. And to the best of my knowledge, neither did anyone else at Hal-Com. Before I opened up the box, I observed the tape around it, and it appeared clear that it had not been opened. (Decl. of Anthony Batary ¶¶ 5-6, 9, 11, ECF No. 97-3, at 2-4; see also Batary Dep. at 10:5-13:10.) In the absence of contradictory evidence by Defendants, Defendants have failed to prove that any spoliation of the box of DVDs, or the DVDs themselves, occurred before, or as a result of, Batary’s inspection. E. Hal-Com’s Office Relocation Fifth, Defendants point out that Hal-Com moved its offices in the summer of 2005 without notifying either the court or Defendants. (Defs.’ Mot. to Dismiss at 4.) Although Plaintiff does not address this allegation in its Opposition Brief, Batary’s affidavit states that 10. Since making that inspection, Hal-Com moved its offices to 5507 Detroit Avenue in Cleveland. To my knowledge, the box was moved, along with everything else, to the new office. (Batary Aff. ¶ 10.) As Defendants do not allege that anything untoward or improper happened to the evidence as a result of the move, the court declines to find that the relocation is evidence of spoliation. After reviewing all the relevant documents and finding credible the affidavits of Batary and Hebert, the court finds that Defendants have failed to prove the spoliation of the seized evidence. Accordingly, the court hereby denies Defendants’ motion to dismiss (ECF No. 91). However, the court also notes that nothing in this Order prevents Defendants from introducing evidence regarding the condition of the seized evidence, the chain of control, or any other relevant matter. IV. DEFENDANTS’ MOTION TO DISQUALIFY PLAINTIFF’S ATTORNEYS Defendants seek to disqualify Plaintiff’s attorney, Jules Zolon, Esq., based solely on his representation to Defendants by e-mail on December 26, 2006, that “I thought I should let you know that I am considering making myself a witness in this case, in which event I will be obtaining substitute trial counsel. I have not yet made that decision ....” (Defs.’ Mot. to Disqualify Pl.’s Att’ys 1, ECF No. 93; Pl.’s Br. in Opp’n to Mot. to Disqualify Pl.’s Att’y 2, ECF No. 95.) Defendant provides no case law or authority in support of its motion. Plaintiff likewise cites no binding precedent either for or against disqualifying an attorney from pretrial activities where that attorney will serve as a witness during trial. *6 As Plaintiff’s counsel has not yet decided whether to become a witness, and as he readily agreed to withdraw from the case if he chooses to do so, the court hereby denies Defendants’ motion at this time. Defendants may renew their motion if Plaintiff’s counsel decides to serve as a witness and refuses to withdraw. (ECF No. 93.) V. PLAINTIFF’S MOTION FOR EXTENSION OF DEADLINES AND REQUEST FOR TELEPHONIC CONFERENCE Plaintiff requests that the court extend only Plaintiff’s deadlines for discovery and filing of dispositive motions due to the number of pending motions as well as Defendants’ alleged delay in producing certain discovery. (ECF No. 102-2, at 1-3 & n.1.) The court declines to extend these deadlines for one party and not the other. At the same time, the court finds that a modest extension of time is warranted in light of the rulings in the instant Order. Therefore, the discovery cut-off is extended until March 15, 2007, and dispositive motions are due by April 16, 2007. Finally, the court will hold a telephonic conference with the parties, to discuss the two outstanding motions – Plaintiff’s Renewed Motion To Strike Defendants’ Pleadings for Failure to Comply with this Court’s Discovery Orders (ECF No. 96) and Plaintiff’s Motion in Limine to Strike Report of John Ban (ECF No. 100), on February 13, 2007, at 11:00 a.m. VI. CONCLUSION For the reasons stated above, Defendants’ Motion for Protective Order is denied as moot (ECF No. 84); Plaintiff’s Motion to Review Seized DVDs is denied (ECF No. 87); Defendants’ Motion to Dismiss is denied (ECF No. 91); Defendants’ Motion to Disqualify Plaintiff’s Attorneys is denied (ECF No. 93); and Plaintiff’s Motion to Extend Deadlines is granted in part and denied in part (ECF No. 102). Defendants are required to fully comply with any outstanding discovery requests by Plaintiff, and such information shall comply with the Stipulated Protective Order (see Order, ECF No. 101). In addition, any future inspection of the seized box of DVDs, or the DVDs themselves, must be conducted in the presence of at least one representative from each party. IT IS SO ORDERED. Footnotes [1] Defendants’ motion twice asks the court to prohibit Defendants from introducing the evidence of the allegedly spoiled DVDs. (See Defs.’ Mot. to Dismiss at 1, 9.) However, Defendants’ argument, as well as basic common sense, dictates that Defendants actually seek to prevent Plaintiff from introducing the DVDs, not themselves. Accordingly, the court will treat the Motion as seeking the latter relief. [2] Plaintiff also quotes from a deposition of Hebert apparently taken on April 19, 2006, which offers additional support for Plaintiff’s position that a receipt was provided at the time of seizure. (Pl.’s Opp’n Br. at 3.) However, the court was unable to find Hebert’s deposition on the docket. [3] The court notes that both the seizure and custody determination were handled by Defendants’ previous counsel, Mark Avsec. (See 9/27/05 Defs.’ Notice of Withdrawal, ECF No. 25.) [4] Both parties, at times, incorrectly state that 18 titles were seized. However, the court’s review of Batary’s handwritten count reveals 17 titles. (ECF No. 97-3, at 5-6; accord Batary Aff. ¶ 8.)