Universal City Studios, Inc. v. Reimerdes

• Decision Date: 17 July 2000
• Docket Number: No. 00 CIV. 0277(LAK).,00 CIV. 0277(LAK).
• Citation: 104 F.Supp.2d 334
• Parties: UNIVERSAL CITY STUDIOS, INC., et al., Plaintiffs, v. Shawn C. REIMERDES, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

104 F.Supp.2d 334

UNIVERSAL CITY STUDIOS, INC., et al., Plaintiffs, v. Shawn C. REIMERDES, et al., Defendants.

No. 00 CIV. 0277(LAK).

United States District Court, S.D. New York.

July 17, 2000.

Order on Reconsideration July 19, 2000.

COPYRIGHT MATERIAL OMITTED

Leon P. Gold, Jon Baumgarten, Charles Sims, Proskauer Rose LLP, New York, NY, for Plaintiffs.

Martin Garbus, Edward Hernstadt, David Atlas, Frankfurt, Garbus, Klein & Selz, P.C., New York, NY, for Defendants.

OPINION

KAPLAN, District Judge.

This is an action by major motion picture studios against Eric Corley and 2600 Enterprises, Inc.¹ under the Digital Millenium Copyright Act ("DMCA").² Plaintiffs in substance claim that the defendants threaten to post a software program known as DeCSS on their Internet web sites. As the function of DeCSS allegedly is to circumvent the encryption software that protects plaintiffs' copyrighted movies that are distributed on digital versatile discs ("DVDs"), it is plaintiffs' position that defendants' dissemination of DeCSS via the Internet (or otherwise) would constitute trafficking in means of circumvention of the technology that controls access to their copyrighted works and therefore violate the DMCA. They seek injunctive relief.³

In January of this year, the Court granted plaintiffs' motion for a preliminary injunction.⁴ In May, after defendants moved to vacate and plaintiffs to expand the preliminary injunction, the case was set for trial on July 17. Defendants repeatedly and unsuccessfully have sought postponements. Following the denial on July 10 of their most recent application,⁵ defendants moved to recuse the undersigned as the judge in the case.

In considering the motion, the Court has borne in mind its duty to disqualify in any case in which its impartiality reasonably might be questioned. It has been mindful also of the admonition of Congress which, in passing the current version of one of the relevant recusal statutes, said this:

"[I]n assessing the reasonableness of a challenge to his impartiality, each judge must be alert to avoid the possibility that those who would question his impartiality are in fact seeking to avoid the consequences of his expected adverse decision. Disqualification for lack of impartiality must have a reasonable basis. Nothing in this proposed legislation should be read to warrant the transformation of a litigant's fear that a judge may decide a question against him into a `reasonable fear' that the judge will not be impartial. Litigants ought not to have to face a judge where there is a reasonable question of impartiality, but they are not entitled to judges of their own choice."⁶

I

As one of the bases of defendants' motion turns on the relationship, if any, between the issues in this case and an alleged prior representation of one of the plaintiffs (or a predecessor in interest) by a former law partner of the undersigned, it is useful to set out with some care the nature of this case and the issues before the Court. Further, an understanding of the place and timing of the recusal motion in the broader context of the litigation may be helpful, particularly in light of defendants' belated claim that they have been treated unfairly in the lawsuit.

A. The Background of the Litigation

DVDs are five-inch wide discs that, in this application, hold full-length motion pictures. They are the latest technology for private home viewing of recorded motion pictures. This technology drastically improves, as compared with video tape, the clarity and overall quality of a motion picture shown on a television or computer screen.

DVDs contain motion pictures in digital form, which presents an enhanced risk of unauthorized reproduction and distribution because digital copies made from DVDs do not degrade from generation to generation. Concerned about this risk, motion picture companies, including plaintiffs, insisted upon the development of an access control and copy prevention system to inhibit the unauthorized reproduction and distribution of motion pictures before they released films in the DVD format. The means now in use, Content Scramble System or CSS, is an encryption-based security and authentication system that requires the use of a DVD player or a computer DVD drive that contains the technology needed to decrypt, unscramble and play back CSS-protected motion pictures on DVDs. DVD player manufacturers therefore must license the necessary technology from an appropriate source, now the DVD Copy Control Association ("DVD CCA").⁷

The chronology of the introduction of DVDs and CSS is relevant to this motion. The predecessor of the DVD CCA first began licensing the necessary CSS technology to DVD player manufacturers on or about October 31, 1996,⁸ the same year in which DVD movies first were introduced in the United States.⁹ Since then. CSS has facilitated enormous growth in the use of DVDs for the distribution of copyrighted movies to consumers. As of earlier this year, over 4,000 motion pictures had been released in that format in the United States, and movies were being issued on DVDs at the rate of over 40 new titles per month in addition to rereleases of classic films. More than 5 million DVD players had been sold, and DVD disc sales then exceeded one million units per week.

During this period, the motion picture industry and other related constituencies evidently were concerned that hackers and intellectual property pirates would develop means to circumvent CSS and other means of controlling access to copyrighted materials. In October 1998, Congress responded by enacting the DMCA which, among other things, proscribes the provision of means of circumventing technology that effectively controls access to copyrighted works.¹⁰

In October 1999, an individual or group, believed to be in Europe, managed to "hack" CSS¹¹ and began offering, via the Internet, a software utility called DeCSS that enables users to break the CSS copy protection system, thus allegedly facilitating the making and distribution of digital copies of DVD movies. Defendants operate an Internet web site known as 2600.com. At the time this action began in January 2000, the site posted DeCSS and made it available to any visitors who wished to download it.

B. Prior Proceedings

This action was commenced on January 14, 2000. On January 18, the Court signed an order to show cause bringing on plaintiffs' motion for a preliminary injunction. Defendants submitted a memorandum in opposition to the motion, but no affidavits or other evidentiary material. The Court granted the motion from the bench on January 20, 2000, enjoining defendants from posting DeCSS on their web sites pending final resolution of this action.¹² Mindful of the First Amendment implications of the order, however, the Court noted defendants' interest in minimizing the duration of the preliminary injunction and offered a substantially immediate trial.¹³ Defendants declined. Indeed, the case was virtually inactive for the ensuing two months, although defendants in February or March retained their present counsel.¹⁴

1. The Original Trial Setting

On March 20, 2000, the Court held a routine scheduling conference at which defendants' present counsel appeared before it for the first time. Plaintiffs stated their willingness to go to trial immediately. Defendants, however, indicated a desire to conduct discovery to develop a full factual record. In consequence, the Court entered a scheduling order calling for the completion of discovery by October 20, 2000 and a trial starting on December 5, 2000. As far as the record discloses, defendants first began to seek discovery on April 3, 2000, when they served notices of deposition.¹⁵

2. Early Motion Practice

On April 5, 2000, plaintiffs moved to modify the preliminary injunction to restrain defendants not only from making DeCSS available on their web sites, but from linking to other web sites on which the program remains available.¹⁶ Three weeks later, plaintiff Time Warner moved to disqualify defendants' new counsel, Martin Garbus and the firm of Frankfurt, Garbus, Klein & Selz, P.C., on the ground that the Frankfurt firm simultaneously was representing Time Warner in another action. And on May 2, 2000, defendants cross-moved to vacate the preliminary injunction. These filings appear to have led to a breakdown in cooperation among counsel and to have precipitated a good deal of difficulty with discovery.¹⁷

On April 28, plaintiffs asked to stay all discovery in the action pending resolution of their motion to disqualify defendants' counsel or, alternatively, to adjust the deposition schedule. The Court denied the motion to stay discovery generally, stayed discovery against Time Warner pending resolution of the disqualification motion, and advised the parties to proceed with discovery.¹⁸ But this proved to be only the opening gun of the discovery contention.

3. Defendants' Sanctions Motion and the Advancement of the Trial

On May 8, defendants' counsel moved for discovery sanctions and other relief, accusing plaintiffs of sundry discovery misconduct.¹⁹ During the course of the argument of defendants' motion, plaintiffs raised the possibility of advancing the trial and consolidating it pursuant to Rule 65(a)(2) with any evidentiary hearing that might be required on defendants' motion to vacate the preliminary injunction. In the course of that discussion, the defendants indicated that they wished to keep the December 2000 trial date or, at most, advance the trial to October 2000. They indicated also that they wanted a prompt decision on the motion to vacate the preliminary injunction and, if unsuccessful on that motion on a limited record, would continue to make motions to vacate on the developing record throughout the litigation.²⁰ This discussion, moreover, came on the heels of defendants' insistence on May 2, 2000 that they needed the outstanding discovery for purposes of the pending motion to vacate,²¹ ...