Salinas v. Procter & Gamble
Salinas v. Procter & Gamble
2020 WL 8455137 (C.D. Cal. 2020)
October 9, 2020

Sagar, Alka,  United States Magistrate Judge

Failure to Produce
Proportionality
Download PDF
To Cite List
Summary
The parties filed joint stipulations regarding Plaintiff's motion to compel responses to certain discovery requests and Defendants' motion for bifurcation of discovery. The Court denied the motion for bifurcation without prejudice and addressed the parties' dispute over Plaintiff's motion to compel responses to discovery requests.
H. Scott Salinas
v.
The Procter and Gamble Company, et al
No. CV 19-06794-RGK (ASx)
United States District Court, C.D. California
Filed October 09, 2020

Counsel

Scott A. Burroughs, Justin M. Gomes, Stephen M. Doniger, Trevor William Barrett, Doninger Burroughs, Venice, CA, for H. Scott Salinas.
Guy R. Cohen, Pro Hac Vice, Jacklyn M. Siegel, Pro Hac Vice, Davis and Gilbert LLP, New York, NY, Matthew Robert Stephens, Salil Bali, Douglas Quinton Hahn, Stradling Yocca Carlson and Rauth PC, Newport Beach, CA, for The Procter and Gamble Company, et al.
Sagar, Alka, United States Magistrate Judge

Proceedings (In Chambers): Order GRANTING IN PART AND DENYING IN PART Plaintiff's Motion to Compel Discovery (Docket Nos. 62-63, 69-70) and Order DENYING Defendants' motion for Bifurcation of Discovery (Docket No. 64-66, 68, 71)

*1 On September 8, 2020, the parties filed joint stipulations regarding (1) Plaintiff's motion to compel responses to certain discovery requests from Defendants (“motion”) (Dkt. Nos. 62-63); and (2) Defendants' motion for bifurcation of discovery (“motion to bifurcate”) (Dkt. Nos. 64-66). On September 15, 2020, the parties each filed a supplemental memorandum in support of their positions. (Dkt. Nos. 68-71). A telephonic hearing was held on September 29, 2020 and the matter was taken under submission. The Court has reviewed the above-referenced pleadings and considered the parties' arguments at the hearing. For the reasons discussed below, the motion to bifurcate discovery is DENIED; and the motion to compel is GRANTED IN PART AND DENIED IN PART.
 
A. Background
On August 5, 2019, Plaintiff initiated this lawsuit, asserting claims for, inter alia, copyright infringement, against the Proctor and Gamble Company (“P&G”) and Wieden Kennedy, Inc. (“W+K”) (collectively “Defendants”). (Dkt. No. 1). On June 10, 2020, Plaintiff filed the operative Second Amended Complaint (“SAC”), alleging copyright infringement, vicarious and/or contributory copyright infringement, and breach of contract. (Dkt. No. 59). The SAC alleges that Plaintiff created and performed an original audio work, the “Salinas Whistle,” which has been registered with the U.S. Copyright Office. (SAC ¶ 10). Beginning in 2006, Plaintiff licensed Defendant W+K to use the Salinas whistle in the commercials they created for P&G's Old Spice marketing and advertising campaign. Id. at ¶ 11. When the licensing period ended, Defendants continued to use the Salinas whistle without Plaintiff's consent even though they had informed him that they would no longer be using the Salinas whistle and that they had engaged or authorized another performer to create a whistle to be used in their marketing and advertising campaign. Id. at ¶¶ 12-13. Defendant P&G disputes Plaintiff's claimed ownership of a copyright, which was registered in 2019, and has filed a counterclaim seeking a declaratory judgment that it owns the “Salinas whistle” recording. (Motion at 9).
 
B. Motion to Bifurcate
Defendants move to bifurcate liability and other damages discovery from profits-related discovery, contending that profits discovery should only proceed if Defendants' motion for summary judgment is denied. (Dkt. No. 65 at 3). At issue are Plaintiff's Requests for Production of Documents (“RFP”), Nos. 21, 35, and 52 directed to Defendant P&G, and RFP Nos. 35 and 44 directed to Defendant W+K. (Dkt. No. 65 at 7-10). Defendants maintain that bifurcation will ensure that substantial resources are not spent on discovery that may prove to be moot if the court finds that the Salinas whistle is not an original work entitled to copyright protection, P&G owns the copyright because it was a work made for hire, or that even if Plaintiff owns a copyright in the whistle, he granted Defendants an unrestricted implied license to use the recording in their Old Spice commercials. Id. at 11-15. Defendants also contend that judicial economy and convenience favor bifurcation, particularly if Defendants prevail on their claim that Plaintiff's damages should be limited to the three-year period prior to the filing of the Complaint in August 2019. Id. at 19-24.
 
*2 Plaintiff opposes the motion to bifurcate, contending that his discovery requests are relevant to prove both liability and damages. (Dkt. Nos. 65 at 5, 71 at 2-3). Plaintiff disputes Defendants' arguments regarding the statute of limitations, contending that the statute does not bar discovery outside the statutory period, and Defendants' arguments regarding the merits of their position on whether Plaintiff owns a copyright in the Salinas recording. (Dkt. No. 65 at 25-29). Finally, Plaintiff claims that the motion to bifurcate discovery should be brought before Judge Klausner since Defendants' request for bifurcation will necessarily require a modification of the scheduling order. Plaintiff also points out that the motion is untimely and that although Defendants raised the issue of bifurcation in their Rule 26(f) report, the scheduling order issued in this case provides for a standard discovery schedule which, according to Plaintiff, means that Defendants' request for bifurcation was denied. (Dkt. Nos. 65 at 24, 71 at 1).
 
The Court agrees that the motion for bifurcation is properly addressed to Judge Klausner because granting the motion will necessitate a modification of the scheduling order in this case. Accordingly, Defendants' motion for bifurcation of discovery is DENIED without prejudice. Given this finding, it is not necessary to address the parties' respective positions regarding the merits of the motion to bifurcate.
 
C. Motion to Compel
On February 11, 2020, Plaintiff served Defendants with his initial discovery requests and a second set of interrogatories on February 24, 2020. (Joint Stip. at 2), to which Defendants responded on April 22, 2020. After the parties met and conferred, Defendants produced additional documents on August 5, 2020 and provided supplemental responses on August 20, 2020. Nevertheless, the parties were unable to resolve their disputes regarding Plaintiff's requests for profits-related discovery and whether such disclosures should be limited to the three-year period preceding the filing of the complaint in August 2019. Id. at 10.[1]
 
Plaintiff contends that defendants exploited and infringed his copyright to the Salinas whistle by granting unauthorized licenses and broadcasting the work without his permission after the period for which he licensed its use (2006-2008) had ended. Id. at 8. Plaintiff maintains that his discovery requests properly seek information regarding Defendants' use of the recording after the license period ended and Defendants' revenue, costs, and profits relating to the exploitation of his work from 2006 to the present.[2] Id.
 
Defendant P&G claims ownership of the underlying composition and the prior performances of “the iconic whistle that has appeared in Old Spice ads for decades.” Id. at 9. P&G and its advertising agency, W+K, hired Amber Heavenly to re-record the iconic whistle “tag at the end of [its] ads,” id. at 9, and Plaintiff, an employee of Amber Heavenly, “replicated the iconic whistle as it already existed – the same notes, rhythm and style.” Id. at 11. According to P&G, Amber Heavenly transferred its rights to P&G who used it in their advertising without any reason to believe that Plaintiff had ownership until Plaintiff registered a copyright in the whistle and filed this lawsuit in 2019. Id. at 9. Defendants contend that Plaintiff's broad discovery requests, which seek fourteen years of P&G's revenues from Old Spice products and W+K's revenues from work on Old Spice advertising, should be denied because the request for profits-related discovery is based on speculative theories that are neither relevant nor proportional to the need of the case. Id.
 
*3 The Court agrees. A copyright owner may only recover profits that are attributable to the infringement. A party seeking discovery of indirect profits, that is, profits not generated by selling an infringing product, must establish a non-speculative “causal nexus” between the alleged infringement and the applicable revenue stream.[3] In other words, the infringement must have at least partially caused the profits at issue. As Defendants' point out, Plaintiff's requests for W+K's profits from the commercials it produced for P&G after 2008 must be based on a showing that such revenue was based on the continued use of commercials containing Plaintiff's alleged copyright in the “iconic Old Spice whistle that was simply inserted at the end of commercials” rather than the quality of W+K's work on the production of the commercials. Motion at 17. P&G avers that its payments to W+K were based on the quality of its advertising and not because of the recording. Id. Similarly, Plaintiff's request for P&G's profits (revenues and expenses) from Old Spice related product sales must be based on a showing that consumers purchased Old Spice products because of the whistle recording at the end of its commercials for Old Spice products. Id. at 11. According to Defendants, this determination requires experts in marketing and apportionment to examine approximately 100 commercials containing the Salinas whistle and an equal number of commercials that contain a different whistle, and evaluate the degree to which certain advertising elements contributed to sales of Old Spice-branded products, and the degree to which sales were driven by non-advertising factors, such as brand equity. Defendants' overbroad and burdensome objections are sustained. Here, Plaintiff has not proffered any non-speculative evidence supporting his requests for indirect profits information. Without more, Plaintiff's request for “financial data necessary to establish [a] ‘reasonable approximation’ ” of the “profits attributable to the Salinas whistle,” (motion at 13), does not satisfy his burden to show a “causal nexus” between profits and the alleged infringement. Thus, Plaintiff's requests for indirect profits are not relevant or proportional to the needs of this case at this time. Given this decision, it is not necessary for the Court to rule on the parties' respective claims regarding whether the statute of limitations limits discovery of revenue and profits to the three-year period preceding the filing of the complaint. (Dkt. No. 62 at 4-6, 21-22).
 
Interrogatories:
Plaintiff's motion to compel Defendant W+K's responses to Interrogatory No. 5 (quarterly revenues received for advertising services provided for Old Spice-branded products for the years 2006 through the present), and Interrogatory No 10 (an accounting of all revenues received in connection with disputed uses), is DENIED as not relevant or proportional to the needs of this case.
 
The Court finds that Defendant W+K has provided sufficiently responsive answers to Interrogatory No. 6 (Motion at 25, Exhs. A-D), Interrogatory No. 13 (Motion at 30-31, Exhs. A-D), Interrogatory No. 17 (Motion at 37, Exhs. A-C), and Interrogatory No. 20 (Motion at 40, Exhs. A-C), see Defendants' Supplement, Dkt. No. 69, Exhs. K-M. Plaintiff's request to compel further responses is DENIED. To the extent Defendant agreed to supplement its responses to Nos. 6 and 13, Defendant agreed at the hearing, that it would do so within two weeks.
 
Plaintiff's motion to compel Defendant P&G's responses to Interrogatory No. 5 (quarterly revenues in connection with the sale or distribution of Old Spice-branded products for the years 2006 through the present), Interrogatory No. 10 (an accounting of all revenues received in connection with disputed uses),[4] Interrogatory No. 20 (amount of money paid for airing, transmission or distribution of the advertisement), and Interrogatory No. 21 (annual profit and loss ledgers from 2006 to present) is DENIED as not relevant or proportional to the needs of this case.
 
The Court finds that Defendant P&G has provided sufficiently responsive answers to Interrogatory No. 6 (Motion at 52-53, Exhs. A-D), Interrogatory No. 13 (Motion at 60-61, Exhs. A-D), and Interrogatory No. 15 (Motion at 62), see Defendants' Supplement, Dkt. No. 69, Exhs. K-M. Plaintiff's request to compel further responses is DENIED. To the extent Defendant agreed to supplement its responses to Nos. 6 and 13, Defendant agreed at the hearing, that it would do so within two weeks.
 
Requests for Production
Plaintiff's motion to compel Defendant W+K to produce documents responsive to RFP Nos. 35 (total quarterly revenues received for marketing or advertising services provided for Old Spice-branded products for the years 2006 through the present), and 44 (payments received from P&G in connection with the promotion, marketing, or advertising of any Old Spice-branded products), is DENIED as not relevant or proportional to the needs of this case.
 
*4 The Court finds that Defendant W+K has sufficiently responded to RFP Nos. 6 (motion at 76-77, Defendants' Supplement at 1-2), 40 (motion at 83-84), and 41 (motion at 87). Plaintiff's request to compel further responses is DENIED.
 
Plaintiff's motion to compel Defendant P&G to produce documents responsive to RFP Nos. 21 (annual profit and loss ledgers from 2006 to present), and 52 (payments provided to W+K in connection with the promotion, marketing, or advertising of any Old Spice-branded products) is DENIED as not relevant or proportional to the needs of this case.
 
Plaintiff's motion to compel Defendant P&G to produce documents responsive to RFP No. 35 (quarterly revenues received in connection with the sale or distribution of Old Spice-branded products for the years 2006 to present) is GRANTED-IN-PART: Defendant P&G shall produce responsive documents for the period 2016 to 2019.
 
The Court finds that Defendant P&G has sufficiently responded to RFP No. 51 (motion at 72). Plaintiff's request to compel further responses is DENIED.
 
D. Conclusion
Plaintiff's Motion to Compel Discovery from Defendants is GRANTED IN PART AND DENIED IN PART. As described above, Defendant W+K shall supplement its responses to Interrogatory Nos. 6 and 13; Defendant P&G shall supplement its responses to Interrogatory Nos. 6 and 13, and produce documents responsive to Request for Production No. 35 for the period 2016 to 2019, no later than two weeks from the date of this Order.
 
Defendants' motion to bifurcate discovery is DENIED without prejudice.
 
The parties may avail themselves of the Court's informal discovery dispute resolution process to resolve any remaining discovery issues. (See Judge Sagar's Procedures).
 
IT IS SO ORDERED.
 
cc: R. Gary Klausner United States District Judge
 
Footnotes
The Court agrees with Defendants that Plaintiff's motion to compel information regarding the existence and scope of the infringement are not at issue. See Dkt. No. 62 at 10; Defendants' supplement, Dkt. No. 69 at 2: “Defendants have produced and will continue to produce, liability discovery – including information related to the scope of the alleged infringement – to the extent reasonably available.”
Defendants claim that Plaintiff is not entitled to discovery of profits generated from 2006 to 2008 because the use of the whistle during that period was licensed and non-infringing. Dkt. No. at 17. At the hearing, Plaintiff argued that profits for the period 2006 to 2008 were relevant to show that sales of the Old Spice products increased after commercials including the whistle were aired. Plaintiff claims that prior to 2006, Old Spice was a dying brand for P&G but its profits started to increase after the commercials with the Salinas whistle were aired. These speculative assertions are insufficient to meet Plaintiff's burden to establish a causal nexus between the alleged infringement and profits from the sale of Old Spice branded products.
“[O]nce the causal nexus is shown, the infringer bears the burden of apportioning the profits that were not the result of infringement.” Polar Bear Production, Inc., v. Timex Corp., 384 F.3d 700, 711 (9th Cir. 2004).
Defendant P&G stated that it did not receive revenue from the commercials. (Motion at 56). To the extent Interrogatory No. 10 seeks revenue information from 2006 to the present regarding Old Spice products, the motion to compel is denied.