Oracle U.S. Inc. v. Rimini St. Inc.

• Decision Date: 12 January 2022
• Docket Number: 2:10-cv-00106-LRH-VCF
• Parties: ORACLE USA, INC.; a Colorado corporation; ORACLE AMERICA, INC.; a Delaware corporation; and ORACLE INTERNATINAL CORPORATION, a California corporation, Plaintiffs, v. RIMINI STREET, INC., a Nevada corporation; and SETH RAVIN, an individual, Defendants.
• Court: U.S. District Court — District of Nevada

ORACLE USA, INC.; a Colorado corporation; ORACLE AMERICA, INC.; a Delaware corporation; and ORACLE INTERNATINAL CORPORATION, a California corporation, Plaintiffs,
v.
RIMINI STREET, INC., a Nevada corporation; and SETH RAVIN, an individual, Defendants.

No. 2:10-cv-00106-LRH-VCF

United States District Court, D. Nevada

January 12, 2022

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER

LARRY R. HICKS UNITED STATES DISTRICT JUDGE

On March 31, 2021, the Court ordered Rimini Street, Inc. (“Rimini”) to show cause why it should not be held in contempt for violating the Permanent Injunction in this action and ordered an evidentiary hearing on several discrete issues. ECF No. 1459.^[1] Rimini filed its response (ECF No. 1467), Oracle USA, Inc., Oracle America, Inc., and Oracle International Corporation (collectively “Oracle”) replied (ECF No. 1472); and Rimini sur-replied (ECF No. 1478). A sevenday hearing was then held commencing on September 20, 2021. See ECF Nos. 1520, 1522, 1523, 1524, 1525, 1526, & 1529. In accordance with the Court's orders, the parties filed proposed findings of fact and conclusions of law on October 19, 2021. ECF Nos. 1544 & 1545. Having reviewed the record before it, the Court now finds that Rimini has, in part, violated the Permanent Injunction and that it should be held in contempt for those violations; conversely, the Order to Show Cause is discharged in part, in accordance with this Order. The Court orders sanctions against Rimini for its conduct in the manner described herein.

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I. BACKGROUND

This action has an extensive 11-year history that includes two causes of action. In brief and relevant part, Oracle develops, manufactures, and licenses computer software, particularly Enterprise Software Programs. Oracle also provides after-license software support services to customers who license its copyrighted software. Rimini is a company that provides similar afterlicense software support services to customers licensing Oracle's copyrighted software and directly competes to provide those services. Seth Ravin is the CEO of Rimini.

Oracle first sued Rimini in 2010, alleging that Rimini infringed several of Oracle's copyrights when it, inter alia, used work that it completed for one client for the benefit of other clients. Following the filing of dispositive motions, the Court granted summary judgment in favor of Oracle on some of its copyright infringement claims. Of importance to these proceedings was the Court's finding that Rimini violated the “facilities restriction” within PeopleSoft's standard licensing agreement when it hosted its clients' development environments on its own computer systems, a process called “local hosting.” ECF No. 474; Oracle USA, Inc. v. Rimini St., Inc., 6 F.Supp.3d 1086, 1096-98 (D. Nev. 2014) (“Oracle USA”). The Court further held that Rimini was infringing on Oracle's copyrights for Oracle Database when it downloaded many copies of the software off Oracle's network and failed to adhere to the Developer License. ECF No. 476; Oracle USA, Inc. v. Rimini St., Inc., 6 F.Supp.3d 1108, 1115-20 (D. Nev. 2014). Later, after a month-long jury trial, the jury found in favor of Oracle on other copyright infringement claims related to Oracle's J.D. Edwards and Siebel software.

On appeal, the Ninth Circuit affirmed both this Court's grant of summary judgment and all of the jury's verdict on infringement violations under the Copyright Act, only reversing regarding violations of the California Computer Data Access and Fraud Act (“CDAFA”) and the Nevada Computer Crimes Law (“NCCL”).^[2] Oracle USA, Inc. v. Rimini St., Inc., 879 F.3d 948, 962 (9th Cir. 2018) (“Rimini I”). Given its rulings, the Ninth Circuit vacated this Court's permanent

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injunction and remanded the case to determine whether a permanent injunction was warranted based solely on Rimini's copyright infringement. Id. at 964.^[3]

On August 14, 2018, this Court granted Oracle's renewed motion for a permanent injunction, which enjoins Rimini from continuing to infringe on Oracle's copyrighted software. ECF No. 1164; Oracle USA, Inc. v. Rimini St., Inc., 324 F.Supp.3d 1157, 1167 (D. Nev. 2018). In relevant part, the Permanent Injunction provides:

a. Rimini Street shall not reproduce, prepare derivative works from, or distribute PeopleSoft, J.D. Edwards, or Siebel software or documentation unless solely in connection with work for a specific customer that holds a valid, written license agreement for the particular PeopleSoft, J.D Edwards, or Siebel software and documentation authorizing Rimini Street's specific conduct

...

PeopleSoft

3. Rimini Street shall not distribute PeopleSoft software or documentation or any derivative works created from or with PeopleSoft software or documentation;

4. Rimini Street shall not reproduce, prepare derivative works from, or use a specific licensee's PeopleSoft software or documentation other than to support the specific licensee's own internal data processing operations;

5. Rimini Street shall not reproduce, prepare derivative works from, or use PeopleSoft software or documentation on, with, or to any computer systems other than a specific licensee's own computer systems;

6. Rimini Street shall not reproduce, prepare derivative works from, or use PeopleSoft software or documentation on one licensee's computer systems to support, troubleshoot, or perform development or testing for any other licensee, including specifically, that Rimini Street shall not use a specific licensee's PeopleSoft environment to develop or test software updates or modifications for the benefit of any other licensee[.]

J.D. Edwards

7. Rimini Street shall not distribute J.D. Edwards software or documentation or any derivative works created from or within J.D. Edwards software or documentation;

8. Rimini Street shall not copy J.D. Edwards software source code to carry out development and testing of software updates;

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10. Rimini Street shall not reproduce, prepare derivative works from, or use J.D. Edwards software or documentation on one licensee's computer systems to support, troubleshoot, or perform development or testing for any other licensee, including, specifically, that Rimini Street shall not use a specific licensee's J.D. Edwards environment to develop or test software updates or modifications for the benefit of any other licensee;

...

Oracle Database

15. Rimini Street shall not reproduce, prepare derivative works from, or distribute Oracle Database software.

ECF No. 1166 (modified per the Ninth Circuit's order).

In granting the Permanent Injunction, the Court noted that the balance of the hardships weighed in favor of its issuance because Oracle was seeking to enjoin only acts that had already been determined unlawful and that had been affirmed on appeal. ECF No. 1164 at 9. The Ninth Circuit affirmed this Permanent Injunction, except instructing the Court to strike paragraphs nine and thirteen and the words “or access” in paragraphs eight and twelve. ECF No. 1236; Oracle USA, Inc. v. Rimini St., Inc., 783 F. App'x. 707, 710-11 (9th Cir. 2019) (unpublished) (“The injunction enjoins ‘local hosting' as to PeopleSoft, J.D. Edwards, and Siebel. But only the PeopleSoft license limits the licensee to using the licensed Software ‘at its facilities ....' (emphasis added), which is the basis for the local hosting requirement.... ‘Accessing' a copyrighted work is not an infringing activity under the Copyright Act.”).^[4]

On April 4, 2019, the Court granted Oracle's motion to reopen discovery to determine if Rimini had been complying with the Permanent Injunction. ECF Nos. 1199; 1215; 1218. The parties engaged in discovery for approximately a year and a half. ECF No. 1354. Following the close of discovery, Oracle filed its motion for an order to show cause why Rimini should not be held in contempt for violating the Permanent Injunction. Based on extensive briefing by the parties, the Court issued an Order to Show Cause on 10 discrete issues and held a seven-day bench trial on those issues; the Court's order on which now follows. ECF Nos. 1459; 1520; 1522; 1523; 1524; 1525; 1526; & 1529.

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II. LEGAL STANDARD

Pursuant to Title 18, United States Code, Section 401, a federal court may hold any party in civil contempt for failing to comply with or violating a court order. 18 U.S.C. § 401(3). In the Ninth Circuit, a party fails to comply with a court order if they fail “to take all reasonable steps within the party's power to comply.” United States v. DAS Corp., 18 F.4th 1032, 1039 (9th Cir. 2021) (quoting In re Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d 693, 695 (9th Cir. 1993) (“In re Dual-Deck”)). To support a judgment of contempt, a district court must find, based on clear and convincing evidence, that (1) the party violated a specific and definite court order; (2) the violation did not constitute “substantial compliance” with the order; and (3) the violation was not based on a good faith and reasonable interpretation of the order. In re Dual-Deck, 10 F.3d at 695; see also FTC v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir. 1999); United States v. Bright, 596 F.3d 683, 694 (9th Cir. 2010). A party's substantial compliance with a court order cannot be “vitiated by a few technical violations where every reasonable effort has been made to comply.” In re Dual-Deck, 10 F.3d at 695 (quotation omitted). Nor does a party's failure to comply need to be intentional or willful to support a finding of contempt. In re Crystal Palace Gambling Hall, Inc., 817 F.2d 1361, 1365 (9th Cir. 1987). To satisfy the clear and convincing standard, the moving party must provide “evidence sufficient to reasonably satisfy [the court] that it is highly probable the ultimate fact at issue happened.” United States v. Century Clinic, Inc., 75 F.Supp.2d 1127, 1134-35 (D. Nev....