Metro-Goldwyn-Mayer Studios, Inc. v. Grokster

• Decision Date: 27 September 2006
• Docket Number: No. CV0108541SVWPJWX.,No. CV0109923SVWPJWX.,CV0108541SVWPJWX.,CV0109923SVWPJWX.
• Citation: 454 F.Supp.2d 966
• Parties: METRO-GOLDWYN-MAYER STUDIOS, INC., et al., Plaintiffs, v. GROKSTER, LTD., et al., Defendants. Jerry LEIBER, et al., Plaintiffs, v. CONSUMER EMPOWERMENT BV, et al., Defendants. And Related Counterclaims
• Court: U.S. District Court — Central District of California

Page 966

454 F.Supp.2d 966

METRO-GOLDWYN-MAYER STUDIOS, INC., et al., Plaintiffs, v. GROKSTER, LTD., et al., Defendants.

Jerry LEIBER, et al., Plaintiffs, v. CONSUMER EMPOWERMENT BV, et al., Defendants. And Related Counterclaims

No. CV0108541SVWPJWX.

No. CV0109923SVWPJWX.

United States District Court, C.D. California.

September 27, 2006.

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ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT ON LIABILITY AGAINST DEFENDANT STREAMCAST NETWORKS, INC. [1070]; ORDER DENYING DEFENDANT STREAMCAST NETWORK, INC.'S, MOTION FOR A CONTINUANCE PURSUANT TO RULE 56(f) [1123]

WILSON, District Judge.

I. INTRODUCTION

In October 2001, Plaintiffs — a group of record companies, movie studios, and music publishers — filed a single-count complaint against Defendants Grokster Ltd. ("Grokster"), Consumer Empowerment By, and the corporate predecessors of StreamCast Networks, Inc. ("Stream-Cast"). The complaint alleged that Defendants' file-sharing software contributed to massive infringement of copyrighted works owned by Plaintiffs. On July 12, 2002 Plaintiffs filed the first amended complaint, which dropped Consumer Empowerment By, replaced StreamCast's corporate predecessors with StreamCast, and also joined a host of Defendants associated with the Kazaa file-sharing network, most notably Sharman Networks ("Sharman").

On April 25, 2003, the Court granted summary judgment for Defendants StreamCast and Grokster, and denied Plaintiffs' motions for summary judgment. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F.Supp.2d 1029 (C.D.Cal.2003). Because Plaintiffs sought primarily injunctive relief, the Court considered only the then-current versions of Defendants' software, and did not address Grokster and StreamCast's alleged liability for past versions of their software or services. The Ninth Circuit affirmed the Court's ruling in August 2004. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 380 F.3d 1154 (9th Cir.2004). The Supreme Court unanimously reversed the grant of summary judgment for Grokster and StreamCast in a decision issued on June 27, 2005. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005) (hereinafter "Grokster"). The Supreme Court remanded the case for renewed consideration of Plaintiffs' motions for summary judgment. Id. at 2782.

Defendant Grokster settled with Plaintiffs shortly after the Supreme Court decision. On February 14, 2006, Plaintiffs filed motions for summary judgment as to the liability of Defendants StreamCast and Sharman. Defendants filed opposition papers on April 7, 2006, along with motions for a Rule 56(f) continuance. Plaintiffs replied on May 1, 2006. After the motions were fully briefed, Defendant Sharman purportedly reached a tentative settlement agreement with Plaintiffs early in August 2006. StreamCast is now the only remaining Defendant in this action.

For reasons discussed below, the Court GRANTS Plaintiffs' motion for summary judgment as to StreamCast's liability.

II. EVIDENTIARY OBJECTIONS

"A trial court can only consider admissible evidence in ruling on a motion for summary judgment." Orr v. Bank of Am., 285 F.3d 764, 773 (9th Cir.2002). Accordingly, as a threshold matter, the Court needs to address StreamCast's evidentiary objections. StreamCast has objected to nearly all of the voluminous documentary evidence offered by Plaintiffs, which are contained in Exhibits 14 through 17 of Plaintiffs' moving papers. Exhibits 14 and 15 consist of internal documents produced by StreamCast in discovery, most of which were emails sent or received by Stream-Cast or its employees, and documents relating to corporate strategy and objectives. Each email shows on its face the date it was sent and received, as well as the names of the sender and the receiver. Emails comprise a sizeable majority of the documents offered into evidence. In addition, the record contains standalone documents, which were not attached to emails, such as presentation slides, presentation notes, and marketing plans. Exhibit 16 consists of documents produced by KVO Communications, a public relations firm hired by Defendant StreamCast. Exhibit 17 consists of documents produced by StreamCast's primary investor, Timberline Venture Partners. StreamCast has objected to each document in these exhibits on the basis of failure to authenticate and hearsay.

A. Authentication

"The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims." Fed.R.Evid. 901(a). "[T]he rule requires only that the court admit evidence if sufficient proof has been introduced so that a reasonable juror could find in favor of authenticity or identification." United States v. Tank, 200 F.3d 627, 630 (9th Cir.2000) (internal quotation marks and citations omitted). "[U]nauthenticated documents cannot be considered in a motion for summary judgment." Orr, 285 F.3d at 773.

Authentication can be accomplished by judicial admission, such as stipulation or production of the items at issue in response to a discovery request. Wright & Gold, 31 Federal Practice & Procedure; Evidence § 7105, at 39. In Maljack Productions., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 889 n. 12 (9th Cir.1996), the Ninth Circuit ruled that the authentication requirement was satisfied where the documents at issue, many of which were printed on the plaintiffs letterhead, were produced in discovery by the plaintiff and offered into evidence by the defendant. Similarly, in In re Homestore.com, Inc. Securities Litigation, 347 F.Supp.2d 769, 781 (C.D.Cal.2004), the court held that the authentication requirement was met because the documents in question were produced during discovery and were offered by the party opponent. See also Snyder v. Whittaker Corp., 839 F.2d 1085, 1089 (5th Cir.1988) (holding notes were authenticated when the party resisting admissibility produced them in discovery and admitted that the author was its employee.) In the present case, all of the documents included in Exhibit 14 and 15 were produced by StreamCast in discovery. This constitutes sufficient circumstantial evidence for a reasonable jury to find the documents authentic.

StreamCast argues that the judicial admission rule does not apply to a document produced in discovery when the party that produced the document contests its authenticity. For this proposition, Stream-Cast relies solely on language in Maljack indicating that the plaintiff there "did not contest" the authenticity of the challenged documents. 81 F.3d at 889 n. 12. However, the plaintiff in Maljack did dispute authenticity in the sense that it mounted an evidentiary objection on the ground of failure to authenticate. What the Ninth Circuit meant was that the plaintiff did not specifically deny the authenticity of the documents, in addition to alleging that the party offering the evidence failed to properly authenticate. StreamCast is in the same position. StreamCast has only alleged that Plaintiffs have not properly authenticated the documents in Exhibits 14 and 15. StreamCast has not contended that the documents are not what Plaintiffs purport them to be. That would be a hard argument to make, of course, because StreamCast produced them. The result here should be no different from that in Maljack.

Exhibits 16 and 17, on the other hand, were not produced by StreamCast in discovery but by its public relations firm, KVO Communications, and its primary venture capital investor, Timberline Venture Partners. In Homestore.com, the court ruled that documents produced by the defendant corporation's auditor were deemed authenticated by virtue of production in discovery when offered against the corporation's CEO. 347 F.Supp.2d at 781. It could be argued that Homestore.com is distinguishable because the auditor was a co-defendant there, whereas in the instant case neither KVO nor Timberline are co-defendants with StreamCast. However, the question ultimately remains whether production in discovery is sufficient for a reasonable jury to find the document authentic. Since KVO and Timberline were StreamCast's business partners and their interests are not adverse to StreamCast's there is no reason to doubt the authenticity of documents they produced. Thus, a reasonable jury can find Exhibits 16 and 17 to be authentic.

B. Hearsay

StreamCast also objects to Exhibits 14 through 17 on hearsay grounds. Hearsay is an out-of-court statement "offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). Hearsay is generally not admissible unless it meets the definition of non-hearsay set forth in Rule 801(d), or falls under an hearsay exception set forth in Rule 803 or 804. See Fed.R.Evid. 801(d), 803 & 804. For convenience, most of the documents comprising Exhibits 14 through 17 can be divided into three categories: (1) emails, including attachments, sent by StreamCast or individual StreamCast agents; (2) emails, including attachments, sent to StreamCast or its agents by third parties, including users and business associates; (3) documents, not attached to emails, that contain business or marketing plans and meeting notes.

First, under Rule 801(d)(2)(D), "a statement made by the party's agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship," is non-hearsay. Fed.R.Evid. 801(d)(2)(0). Plaintiffs contend that emails sent by StreamCast agents are admissible as vicarious admissions by a party's agents under Rule 801(d)(2)(D). The rule "requires the proffering party to lay a foundation to show that an otherwise excludable statement relates to a matter within the scope of the agent's employment." Breneman v. Kennecott Corp., 799 F.2d 470, 473 (9th Cir.1986). "When a court is...