Reflex Media, Inc. v. Luxy Ltd.
Reflex Media, Inc. v. Luxy Ltd.
2021 WL 5936223 (C.D. Cal. 2021)
October 15, 2021

Stevenson, Karen L.,  United States Magistrate Judge

Third Party Subpoena
Protective Order
Attorney-Client Privilege
Attorney Work-Product
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Summary
The court found that ESI was relevant to the case and ordered the parties to meet and confer to set a mutually convenient date for the SF Firm deposition. The court denied the motion to quash in part and granted it in part, allowing the deposition to proceed on certain topics related to the authorship, ownership, originality, and assignment of the works.
Additional Decisions
Reflex Media, Inc. et al.
v.
Luxy Limited
Case No. CV 20-423-RGK (KSx)
United States District Court, C.D. California
Filed October 15, 2021

Counsel

Mark L. Smith, Jacob Lex Fonnesbeck, Pro Hac Vice, SF Firm LLP, Los Angeles, CA, Isaac J. Eddington, Pro Hac Vice, SF Firm LLP, Salt Lake City, UT, for Reflex Media, Inc., Clover8 Investments Pte. Ltd.
Camden Aurora Minervino, Beatrice O'Neil Strnad, Kilpatrick Townsend and Stockton LLP, San Francisco, CA, Brittany T. Knutson, Pro Hac Vice, Kilpatrick Townsend and Stockton LLP, Washington, DC, H. Forrest Flemming, III, Pro Hac Vice, Kilpatrick Townsend and Stockton LLP, New York, NY, Kollin J. Zimmermann, Kilpatrick Townsend and Stockton LLP, Los Angeles, CA, for Luxy Limited.
Stevenson, Karen L., United States Magistrate Judge

Proceedings: (IN CHAMBERS) ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO QUASH SUBPOENA ISSUED TO THE SF FIRM LLP AND REQUEST FOR A PROTECTIVE ORDER [DKT. NO. 146]

*1 Before the Court for resolution is Plaintiffs’ Motion to Quash F.R.C.P. 45 Subpoena Issued to the SF Firm LLP and for a Protective Order, deemed filed on October 12, 2021 (“Motion to Quash”), along with the Declaration of Isaac J. Eddington (“Eddington Decl.”) and related exhibits. (Dkt. No. 146.)[1] On October 14, 2021, the Court granted Plaintiffs’ ex parte application to have the Motion to Quash heard on an expedited basis. (Dkt. No. 143.) Defendant Luxy Limited (“Defendant” or “Luxy”) filed an Opposition to the Motion to Quash (“Opp.”) on October 14, 2021. (Dkt. No. 147.) Plaintiffs filed a Reply in Support of the Motion to Quash on October 15, 2021 (Dkt. No. 148) and the Court heard oral argument on the same date.
Having thoroughly considered the parties’ briefing and the arguments of counsel at the hearing, for the reasons outlined below, the Court GRANTS in part and DENIES in part the Motion to Quash.
RELEVANT BACKGROUND
Plaintiffs commenced this trademark and copyright infringement action on January 15, 2020. (Dkt. No. 1.) The operative pleading is the First Amended Complaint (“FAC”) filed on July 15, 2020. (Dkt. No. 17.) Defendant filed an Answer and Counterclaim on February 19, 2021. (Dkt. No. 42.)
Plaintiff Reflex Media operates www.Seeking.com and www.SeekingArrangement.com, a leading dating website, and its Seeking mobile application. (FAC at ¶ 2.) Plaintiff owns trademarks to “several terms that customers identify as originating from the Plaintiffs brands and services” such as “Seeking Millionaire,” “Seeking Arrangement,” “Seeking,” “Carrot Dating,” and “What's your Price.” (Id. at ¶ 4.) Plaintiffs allege that Defendant owns and/or operates a competing website www.OnLuxy.com and the mobile application “LuxyApp.” (Id. at ¶ 5.) The FAC further alleges that Defendant has attempted “to profit illicitly from Plaintiffs’ work, goodwill, and trademarks, [by using] the Plaintiffs trademarks in conjunction with their goods and services.” (Id. at ¶ 6.)
Given these allegations, the ownership, authorship, and validity of Plaintiffs’ copyright registrations are central to the lawsuit. In discovery, Plaintiffs’ produced Certificates of Registration from the United States Copyright Office that reflect registration of Plaintiffs’ Terms of Use and Privacy Policy. Both the Terms of Use and Privacy Policy Certificates of Registration list two authors: Leigh Davis-Schmidt and SmithWashburn, LLP (predecessor to the SF Firm) and the documents bear identifiers “Reflex 005615” and “Reflex 005617”, respectively. (Zimmermann Decl., Ex. 5.)
*2 On September 28, 2021, pursuant to Rule 45 of the Federal Rules of Civil Procedure, Defendant served a deposition subpoena for deposition testimony by Plaintiffs’ attorney and the SF Law Firm to take place on October 14, 2021 (the “SF Subpoena”). The SF Subpoena describes twenty-four (24) topics on which examination is requested. (Eddington Decl. ¶ 3, Ex. 1.)[2]
On October 12, 2021, following an informal pre-motion discovery conference with the Court, Plaintiff filed the Ex Parte Application, seeking an order to shorten time to hear Plaintiffs’ Motion to Quash the Subpoena and for a protective order precluding the deposition of Plaintiffs’ counsel and the SF Law Firm.
MOTION TO QUASH
A. Plaintiffs’ Positions
Plaintiffs argue that the SF Subpoena seeks testimony concerning information that is shielded by the attorney-client privilege and is neither relevant to any claim or defense in this case nor proportional to the needs of the case. (Motion to Quash at 1.) Plaintiff contends that the SF Subpoena must be quashed because it subjects the SF Firm and Reflex Media to undue burden and it is “highly inappropriate and harassing to seek to depose a party's litigation counsel.” (Id.)
Plaintiff acknowledges that the Copyright Registrations for the Terms of Use and Privacy Policy “are clear on their face” that Leigh Davis-Schmidt (an SF Firm employee) is the author, and the Smith Washburn firm, the predecessor of the SF Firm is the “employer for hire.” (Id. at 2.) Nevertheless, Plaintiffs maintain that the law firm's “ ‘authorship’ is therefore a function of the ‘work for hire’ doctrine, meaning that any listing of authorship only occurs because ‘the party that hired the [creating] individual is considered both the author and the copyright owner of the work.’ ” (Id.) Thus, according to Plaintiff “the creating individual—the person who actually did write the documents in question and who is listed on the copyright for having done so—is Firm employee Leigh Davis-Schmidt, who has been offered for deposition.” (Id. at 3 (emphasis omitted).) Further, Plaintiff argues that the breadth of the topics for testimony in the SF Subpoena, “go far beyond any rational discovery scope” and would require the SF Firm to produce a witness “to reveal privileged information the firm has developed from the client relationship with Reflex.” (Id. at 3.)
Plaintiffs argue that Luxy has not met its burden under Shelton v. Amer. Motors Corp., 805 F.2d 1321 (8th Cir. 1986), which requires that a party seeking to depose opposing counsel must show: (1) no other means exists to obtain the information; (2) the information sought is relevant and non-privileged; and (3) the information is crucial to the preparation of the case. (Id. at 8.) Specifically, Plaintiffs insist that they have already provided the discoverable relevant information regarding their copyrighted policies in their First and Second Supplemental Rog Responses as well as in their document productions. As a result, Plaintiffs argue that the relevant non-privileged testimony has either already been produced or can be obtained without deposing Plaintiffs’ law firm. (Id. at 11-12.) Plaintiffs also insist that the SF Subpoena imposes an undue burden on Reflex Media and the SF Firm by putting the “client and its lawyers in a potential position to violate the ethical absolute duty of confidentiality that is far broader than the attorney client privilege.” (Id. at 13.)
*3 Plaintiffs reject Luxy's argument that Reflex Media completely waived the protections of the attorney-client privilege and work product doctrine in this case because the SF Firm was involved in drafting the copyrighted policies at issue in the lawsuit. (Id. at 13-14.)[3]
Finally, Plaintiffs ask that the Court quash the SF Subpoena and issue Plaintiffs an award of attorneys’ fees and costs in connection with bringing the Motion to Quash because the SF Subpoena was a “blatant attempt to obtain privileged material and harass Reflex and SF Firm.” (Id. at 15-16.)
B. Defendant's Opposition
Defendant responds to the Motion to Quash, first by pointing out that Plaintiffs created the dilemma they face by listing Smith Washburn LLP (predecessor of SF Firm) as a co-author of the copyrighted works that are being asserted against Luxy and then retaining the same firm as its litigation counsel. (Opp. at 2-3). Further, Defendant argues that the discovery sought is relevant and can only be provided by SF Firm.
Defendant argues that because SF Firm is identified as an author on the Copyright Registrations, the firm's testimony is critical to determine “whether the expressions within the Works are sufficiently ‘original’ and copyrightable.” (Opp. at 3.) In addition, Defendant maintains that the testimony is essential to determine whether “all copyright rights in the Works have been validly assigned to Plaintiffs” because unless all the rights have been validly assigned to Plaintiffs, then “Plaintiffs do not have standing to assert their copyright claims” in this case. (Id. at 4.)
Defendant rejects Plaintiffs’ argument that the work for hire doctrine precluded the deposition testimony sought through the SF Subpoena. Defendant points out that while Plaintiffs argue Leigh Davis-Schmidt is the sole author or “creating individual” of the disputed works, supplemental interrogatory responses provided by Clover8 specifically identified Davis-Schmidt as the “primary drafter, with Mark L. Smith and Jacob Fonnesbeck (partners at SF Firm)[,] Michael Downs (Principal at Downs IP Law), and Shawn Green (Product Manager at Cover8 Media, Inc.).” (Id. at 5 (emphasis omitted).) And although Ms. David-Schmidt has been separately noticed for deposition, according to Defendant, she “cannot testify as to why SF Firm, apparently, did not secure assignments from Michael Downs or Shawn Green, other authors-in fact[.]” (Id.)
At the heart of Defendant's opposition is the contention that the testimony sought is not privileged. Defendant emphasizes that a copyright assignment is an arm's length commercial transaction and “to the extent any privilege applied, Plaintiffs have waived it by placing the creation and assignment of the Works squarely ‘at issue’ in this litigation.” (Id. at 6.) In order to defend itself in this lawsuit, Defendant argues it must have access to “documents and information concerning the creation and assignment of [the] Works” at issue. (Id. at 7.) Defendant argues that Plaintiffs have the burden on implied waiver and have not satisfied their burden. (Id.)
*4 Defendant distinguishes the cases involving draft contracts that Plaintiffs rely on to support their claim of attorney-client privilege by pointing out that here, the disputed works, i.e., “the Terms of Service and Privacy Policy at issue are not mere contracts—they are the purportedly copyrighted works at issue[.]” (Id. at 8.) Thus, Defendant argues that these works are not different from a copyrighted song, book, or film and Defendant is entitled through discovery to analyze “whether they are original and protectable.” Defendant maintains that this analysis “cannot be done without deposing the authors of the copyrighted works.” (Id.) To that end, Defendant argues it has satisfied the Shelton test, if Shelton applies to this circumstance. (Id.)
Defendant seeks an award of its fees for opposing the Motion to Quash and, to avoid further disputes regarding the scope of permissible testimony, seeks specific guidance from the Court regarding the topics listed in the SF Subpoena. (Id. at 9-10.)
DISCUSSION
A. Applicable Legal Standards
Under Federal Rule of Civil Procedure 26, a party may obtain discovery concerning any nonprivileged matter that is relevant to any party's claim or defense and is proportional to the needs of the case. FED. R. CIV. P. 26(b)(1). As amended in 2015, Rule 26(b)(1) identifies six factors to be considered when determining if the proportionality requirement has been met, namely, the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to the relevant information, the parties’ resources, the importance of the discovery in resolving the issues and whether the burden or expense of the proposed discovery outweighs its likely benefit. Id. Relevant information need not be admissible to be discoverable. Id.
District courts have broad discretion in controlling discovery. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). When considering a motion to compel, the Court has similarly broad discretion in determining relevancy for discovery purposes. Surfvivor Media, Inc. v. Survivor Productions, 406 F.3d 625, 635 (9th Cir. 2005) (citing Hallet, 296 F.3d at 751). In resolving discovery disputes, the court may exercise its discretion in “determining the relevance of discovery requests, assessing oppressiveness, and weighing those facts in deciding whether discovery should be compelled.” Unilin Beheer B.V. v. NSL Trading Corp., Case No. CV 14-2210-BRO (SSx), 2015 WL 12698382, at *4 (C.D. Cal. Feb. 27, 2015) (citing Favale v. Roman Catholic Diocese of Bridgeport, 235 F.R.D. 553, 558 (D. Conn. 2006) (internal quotation marks omitted)).
B. Plaintiffs have put its Attorneys Knowledge of the Copyright Authorship at Issue
The Motion to Quash and the SF Subpoena in particular, require a careful parsing of the line between facts and privileged communications. The attorney client privilege protects communications between an attorney and his or her client in the rendering of legal advice from compelled disclosure. Upjohn Co. v. U.S., 449 U.S. 383, 389. It is axiomatic, however, that the underlying facts of a case are discoverable and do not become privileged simply because they are in the possession of a party's attorney. Id. at 396 (attorney-client privilege extends only to communications and not to facts). Here, Plaintiffs’ law firm has put itself in the unenviable position of being both litigation counsel to Plaintiffs and a percipient witness because in the copyright registration forms, the SF Firm identified itself as a co-author of purportedly copyrighted works, i.e., the Terms of Use and the Privacy Policy, that are central in this copyright infringement case.
Central to this lawsuit are questions regarding the originality of the allegedly copyrighted works, the validity of the assignments of the works, and, as Defendant emphasizes, whether all of the rights in the works have been assigned to Plaintiffs such that they have standing to bring the infringement claims asserted in this case. Thus, information about the SF Firm's role in creating the disputed works can and should be disclosed in response to the SF Subpoena.
*5 That said, the Court is not persuaded that there is any legal or factual basis in the Motion to Quash to conclude that a wholesale waiver of Plaintiffs’ attorney-client privilege has occurred. Still, some of the twenty-four topics for examination identified in the SF Subpoena are patently overbroad, and if not narrowed, could potentially invade either the attorney-client privilege and/or the attorney work-product doctrine.
C. Shelton, if Applicable, favors Disclosure in this Case
Further, the Court finds that Shelton v. Amer. Motors Corp, 805 F.2d 1323 (8th Cir. 1986) favors allowing the testimony sought here. In Shelton, a litigation lawyer was asked in deposition to identify whether specific documents concerning the vehicle manufacturer's roll over testing existed. Id. at 1325. The court held that the attorney could not be compelled to identify any such documents from the immense volume of records she had reviewed because “the mere acknowledgment of the existence of those documents would reveal counsel's mental impressions, which are protected as work product.” Id. at 1326. Nevertheless, the appellate court recognized that “circumstances may arise in which the court should order the taking of opposing counsel's deposition” and went on to set out a three-pronged standard for when it may be appropriate to do so: (1) “no other means exists to obtain the information than to depose opposing counsel”; (2) the “information sought is relevant and nonprivileged”; and (3) the information is “crucial to the preparation of the case.” Id. at 1327.
The facts here are distinguishable from those in Shelton. Here, unlike in Shelton, SF Firm is identified as a “co-author” of the purportedly copyrighted work. Therefore, the inquiry to the SF Firm is not about litigation strategy or attorney judgment, but facts from a percipient witness about information on which it based its non-privileged disclosures to the U.S. Copyright Office. In addition, even though Shelton is not binding authority in this Circuit, Defendant has demonstrated that the circumstances that the Eighth Circuit identified as making it appropriate to take opposing counsel's deposition are satisfied. First, although SF Firm has produced documents relating to the works at issue, there is no other way to obtain information about the basis for SF Firm's submissions to the U.S. Copyright Office than to depose an SF Firm representative with knowledge of the authorship, originality, and ownership issues. Second, information about the authorship, ownership, originality, and assignment of the works is both relevant and nonprivileged. Third, the information is crucial to the resolution of this copyright infringement lawsuit. The Court is unpersuaded by Plaintiffs’ arguments to the contrary.
Accordingly, the Motion to Quash is DENIED in part and SF Law Firm must provide deposition testimony on the following non-privileged relevant topics identified in the SF Subpoena:
- Topics 1, 2, 3, 4 (excluding employment agreements), 5, 8 (as to non-privileged communications only) regarding REFLEX TOU;
- Topics 9, 10, 11, 12 (excluding employment agreements), 13, 16 (as to nonprivileged communications only) regarding REFLEX PRIVACY POLICY;
- Topics 17, 18 (information only as to amounts paid for each of the COPYRIGHTS AT ISSUE) as this information is relevant to damages;
- Topic 19 (experience creating or contributing to terms of use and privacy policies for any person other than PLAINTIFFS). SF Firm may testify generally but is not required to disclose or identify other SF Firm clients;
*6 - Topic 21 (contracts, assignments, or licenses YOU have entered into with any THIRD PARTY relating to the COPYRIGHTS AT ISSUE);
- Topic 22 (facts and circumstances underlying the creation of the documents marked Bates Reflex 005284-005289 and Reflex 005294-005318, including facts and circumstances related to tasks identified in these documents); and
- Topic 23 (facts and circumstances relating to the documents marked Bates Reflex 004858-004865 and SF 000001-000036).
The Motion to Quash is GRANTED in part insofar as Defendant is not permitted to obtain any testimony on the following topics identified in the SF Subpoena: Topic 6 (seeking SF Firm's “understanding of, explanation for, or position on prior existing documents or works containing words, phrases, and sentences the same as or similar to those of the REFLEX TOU”); Topic 7 (seeking SF Firm's “understanding of whether and to what extent each person who contributed to, worked on, or authored the REFLEX TOU intended to create an original expression”); Topic 14 (“YOUR understanding of, explanation for, or position on prior existing documents or works containing words, phrases, and sentences the same as or similar to those of the REFLEX PRIVACY POLICY”); Topic 15 (“YOUR understanding of whether and to what extent each person who contributed to, worked on, or authored the REFLEX PRIVACY POLICY intended to create an original expression”); Topic 20 (“contracts, assignments, or licenses YOU have entered into with PLAINTIFFS relating to the COPYRIGHTS AT ISSUE”); and Topic 24 (“nature and extent of Mark Smith's business role with PLAINTIFFS, including whether and to what extent Mark Smith performs business functions or provides business advice to PLAINTIFFS or other entities related to or affiliated with PLAINTIFFS in connection with PLAINTIFFS’ GOODS AND SERVICES or the SEEKING ELITE SERVICE”).
The parties are directed to promptly meet and confer to set a mutually convenient date for the SF Firm deposition pursuant to the SF Subpoena as the Court has outlined above.
D. Sanctions
The Court declines to award sanctions to either party. All parties to bear their own costs.
IT IS SO ORDERED.
Exhibit 1
Subpoena on SF Firm











Footnotes

The Motion to Quash was initially submitted on October 12, 2021 in connection with Plaintiffs’ Ex Parte Application to Shorten Time to Hear the Motion to Quash the F.R.C.P. 45 Subpoena Issued to the SF Firm LLP and for a Protective Order. (Dkt. Nos. 134, 134-2.) On October 14, 2021, the Court granted Plaintiffs’ ex parte application to shorten time and directed Plaintiffs to file the Motion to Quash as a separate document and the motion would be deemed filed as of October 12, 2021. (Dkt. No. 144.)
A copy of the Subpoena on SF Firm is attached hereto as Appendix A.
The issues related to the nature and scope of any privilege waiver is the subject of Defendant and Counterclaimant Luxy Limited's First Motion to Compel pending before the Court. (Dkt. No 85.)