Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 1 of 9
`
`BAKER BOTTS L.L.P.
`Jeremy J. Taylor (SBN 249075)
`jeremy.taylor@bakerbotts.com
`Arya Moshiri (SBN 324231)
`arya.moshiri@bakerbotts.com
`101 California St., Ste. 3600
`San Francisco, CA 94111
`Telephone: 415.291.6200
`Facsimile: 415.291.6300
`Kurt M. Pankratz (pro hac vice)
`Bethany R. Salpietra (pro hac vice)
`kurt.pankratz@bakerbotts.com
`bethany.salpietra@bakerbotts.com
`2001 Ross Ave., Ste. 900
`Dallas, TX 75201
`Telephone: 214.953.6500
`Facsimile: 214.953.6503
`Attorneys for Plaintiff Lyft, Inc.
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`LYFT, INC.
`
`v.
`
`Plaintiff,
`
`Case No. 5:21-cv-04653-BLF
`
`PLAINTIFF LYFT, INC.’S REPLY IN
`SUPPORT OF ITS MOTION FOR LEAVE
`TO FILE FIRST AMENDED COMPLAINT
`
`AGIS SOFTWARE DEVELOPMENT LLC,
`
`REDACTED VERSION
`
`Defendant.
`
`Date: July 28, 2022
`Time: 9:00 A.M.
`Judge: Hon. Beth Labson Freeman
`Trial Date: October 16, 2023
`Courtroom: 3, Fifth Floor
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
`
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 2 of 9
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`I.
`
`INTRODUCTION
`This Court should grant Lyft’s Motion (Dkt. 78) to add its breach of contract claim and the
`Alter Ego Parties in view of the strong policy in favor of permitting amendment and AGIS Software’s
`failure to demonstrate that Lyft’s amendment runs counter to the Foman factors. Notably, in its
`Response (Dkt. 93), AGIS Software leaves all but two Foman factors—futility and dilatory motive—
`entirely unrebutted. AGIS Software has thus failed to provide any evidence—let alone strong
`evidence—demonstrating that Lyft’s amendment would cause prejudice, create undue delay, or
`constitute a repeated failure to cure deficiencies. Furthermore, AGIS Software’s arguments regarding
`futility and dilatory motive do not withstand scrutiny.
`First, contrary to AGIS Software’s allegations, both publicly available and discovered facts
`strongly support Lyft’s addition of AGIS Holdings, AGIS, Inc., and Malcom K. Beyer, Jr. as Alter
`Ego Parties to this case. Their addition is not futile. Lyft’s amendment is replete with facts showing
`that AGIS Software, AGIS Holdings, AGIS, Inc., and Malcom Beyer are alter egos of one another.
`Specifically, Lyft has pled facts—based on publicly available information and the limited amount of
`discovery provided to date by AGIS Software—that support almost every one of the unity of interest
`factors considered by California courts when determining whether alter ego liability exists.
`Second, AGIS Software argues that Lyft was dilatory in seeking to add its breach of contract
`claim, which it further argues will be moot if this Court permits AGIS Software to amend its
`infringement contentions. Both assertions are incorrect. AGIS Software’s accusations of delay ignore
`that (1) Lyft timely brought its claim in advance of the deadline to amend pleadings and in a manner
`that respected the resources of the Court and the parties to streamline the administration of this case;
`and (2) AGIS Software’s own litigation tactics of continuing to withhold the Apple license in this case
`and claiming discovery is not open because there is not an operative complaint on file limited Lyft’s
`ability to bring its breach of contract claim at an earlier time. AGIS Software further fails to appreciate
`that its breach is not cured by simply withdrawing its allegations regarding Lyft’s iOS products. Lyft’s
`claim arose when AGIS Software initially breached the relevant contract—during the EDTX Action—
`and ended when it recently withdrew its allegations regarding the iOS products.
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 3 of 9
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`Because AGIS Software has not met its burden under the liberal standard of Rule 15 to freely
`allow amendment at this stage of the case, the Court should grant Lyft’s Motion.
`II.
`ARGUMENT
`In its Response, AGIS Software argues that Lyft’s amendment should be denied due to the
`alleged futility of the amendment and Lyft’s alleged dilatory motive in seeking amendment. Neither
`argument, even when considered in combination, is sufficient to overcome the presumption to grant
`leave to amend. See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003)
`(“Absent prejudice, or a strong showing of any of the remaining Foman factors, there exists a
`presumption under Rule 15(a) in favor of granting leave to amend.”); Sonoma Cty. Ass’n of Ret. Emps.
`v. Sonoma Cnty., 708 F.3d 1109, 1117 (9th Cir. 2013) (explaining that leave to amend should
`especially be granted where the nonmoving party is unable to show strong evidence that the
`amendment would cause prejudice, is sought in bad faith, creates undue delay, is futile, or there was a
`repeated failure to cure deficiencies by previous amendments). Because AGIS Software has failed to
`meet its burden to show why Lyft’s amendment should not be granted, this Court should grant Lyft’s
`request because “justice so requires.” See Senza-Gel Corp. v. Seiffhart, 803 F.2d 661, 666 (Fed. Cir.
`1986); FED. R. CIV. P. 15(a)(2).
`a. AGIS Software Makes No Showing of Prejudice, Undue Delay, or Previous
`Amendment.
`AGIS Software makes no attempt in its Response to allege that Lyft’s amendment should be
`denied due to prejudice, undue delay or previous amendment. See Dkt. 93. Of all the Foman factors,
`prejudice carries the greatest weight. Eminence Capital, 316 F.3d at 1052 (“Not all of the factors
`merit equal weight. As this circuit and others have held, it is the consideration of prejudice to the
`opposing party that carries the greatest weight.”). With respect to prejudice, AGIS Software
`summarily concludes that Lyft’s amendment would be “unduly prejudicial” despite the fact that it
`identifies no basis for such finding. See Dkt. 94 at 4. That AGIS Software cannot identify any
`prejudice is unsurprising because this case is in the early stages of litigation and it has been on notice
`of theories and facts underlying Lyft’s request to add its breach of contract claim and the Alter Ego
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 4 of 9
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`Parties for many months. See Dkt. 78 at 7. Likewise, AGIS Software failed to set forth any argument
`that granting Lyft’s amendment would result in undue delay to the proceedings, essentially agreeing
`that there will be not impact to the case schedule. Lastly, AGIS Software has not and cannot allege
`that there has been a repeated failure to cure deficiencies as Lyft has not previously sought to amend
`its complaint.
`In view of the above, AGIS Software has thus failed to make any showing of prejudice, and
`thus these Foman factors do not weigh against permitting Lyft’s amendment.
`b. Contrary to AGIS Software’s Arguments, Lyft’s Amendment is Not Futile.
`AGIS Software’s argument that Lyft’s addition of the Alter Ego Parties is futile is belied by
`publicly available facts and the discovery obtained despite AGIS Software’s attempts to obfuscate the
`relationship between the parties. See Dkt. 78. For example, the limited financial records produced by
`AGIS Software, in combination with the testimony from AGIS Software’s 30(b)(6) deponent Mr.
`Meriam, indisputably demonstrate that AGIS Software intermingles its funds with the Alter Ego
`Parties. In particular, the limited financial records produced by AGIS Software show that, since 2017,
`
`
`
` See id. And, as is also
`
` See Dkt. 79-5 at 12-17.
`
`shown in AGIS Software’s financial records,
`
`
` See id.; Dkt. 79-6
`at 144:7-8. Indeed, according to AGIS Software’s financial records, AGIS Software has
`
`
`
`
` See Dkt. 79-5 at 15-17. As confirmed by Mr. Meriam, AGIS
` See Ex. 13 at
`
`Software’s financial records
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 5 of 9
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`112:6-113:22 & 116:2-117:20
`
`
` Lyft
`has been unable to confirm whether the omitted licensing revenues were deposited in one of AGIS,
`Inc.’s or AGIS Holdings’ bank accounts because all of the AGIS entities, represented by the same
`attorneys, have refused to provide financial records for AGIS, Inc. and AGIS Holdings. See Dkt. 78.
`Nevertheless, the facts available support multiple unity of interest factors, including the commingling
`of funds, the holding out by one entity that it is liable for the debts of the other, use of a company as a
`mere shell for the affairs of another, and inadequate capitalization. See Stewart v. Screen Gems-EMI
`Music, Inc., 81 F. Supp. 3d 938, 954 (N.D. Cal. 2015) (setting forth the nine unity of interest factors).
`The regular deposits and payments to AGIS, Inc. and AGIS Holdings also confirms that AGIS
`Software lacks the funds to cover its liabilities, including the potential
` in costs and fees that
`Lyft is currently seeking from AGIS Software in the EDTX Action as the prevailing party and due to
`AGIS Software’s insufficient pre-suit investigation and other exceptional litigation conduct. See
`EDTX Action, ECF Nos. 373 & 375. AGIS Software’s lack of funds in its bank account to cover its
`potential liabilities is the definition of an undercapitalized company and demonstrates the need to add
`the other AGIS entities and their CEO, Mr. Beyer, to the instant case—to ensure any liabilities are
`recoverable.
`AGIS Software’s financial records are but one source of proof for Lyft’s alter ego theory,
`which is further supported by publicly available information and other jurisdictional discovery. For
`example, public records confirm that AGIS Software, AGIS, Inc. and AGIS Holdings have identical
`directors and officers and share use of the same offices. See Ex. 14-16; Dkt. 32-1, ¶ 4 (affirming that
`Mr. Beyer resides in Jupiter, Florida); Dkt. 34 at 9 (“AGIS Software’s sister entity and non-party
`source code, technical documents, and other data related to the claimed inventions of the Asserted
`Patents, are stored at AGIS’s data center in Marshall, Texas.”). Mr. Meriam
`
`
`
` See Ex. 13 at
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 6 of 9
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`24:1-32:21; 36:11-43:15; 119:9-121:25; 125:10-128:10; & 134:19-135:14. Moreover, Mr. Meriam
`also confirmed that
`
` Id. at 12:22-13:24; 120:24-125:9. These facts support at least the following unity of
`interest factors: identical directors and officers, use of the same offices and employees, identical
`equitable ownership of the entities, and use of a company as a mere shell for the affairs of another.
`See Stewart, 81 F. Supp. 3d at 954 (setting forth the unity of interest factors).
`Furthermore, during the parties April 15, 2022 meet and confer, counsel for AGIS Software
`represented to counsel for Lyft that AGIS, Inc. has previously selectively cooperated with AGIS
`Software’s previous litigations, including by producing certain documents through shared counsel
`with AGIS Software during discovery without a subpoena. Decl. of B. Salpietra, ¶¶ 5-6. This previous
`history of voluntary litigation cooperation evinces a disregard of corporate formalities—yet another
`unity of interest factor—and gamesmanship on the part of AGIS Software. See Stewart, 81 F. Supp.
`3d at 954. Indeed, there is only one reasonable explanation for AGIS, Inc.’s refusal to cooperate in
`this litigation when it has voluntarily cooperated in past AGIS Software litigations—doing so would
`be harmful to AGIS Software’s personal jurisdiction defense and instead of cooperating, it is now
`trying to hide relevant facts.
`AGIS Software’s contention that “Lyft’s ‘alter ego’ theory fails” (Dkt. 94 at 4) is incredulous
`when considering the weight of the evidence supporting the various unity of interest factors, especially
`when taking into account that all of Lyft’s factual allegations in the amended complaint must be
`accepted as true and construed in the light most favorable to Lyft in the event that AGIS Software
`moves to dismiss. See Critchlow v. Critchlow, No. C 12-01198 LB, 2012 U.S. Dist. LEXIS 162977,
`at *10 (N.D. Cal. Nov. 14, 2012) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 550 (2007)). And,
`even if this Court takes AGIS Software’s unsupported statements in its Opposition at face value, this
`Court could still find that a unity of interest between AGIS Software and the Alter Ego Parties given
`AGIS Software’s failure to dispute several factors, including identical equitable ownership of the
`entities, use of the same offices and employees, and identical directors and officers. See City & Cty.
`of S.F. v. Purdue Pharma L.P., 491 F. Supp. 3d 610, 639 (N.D. Cal. 2020) (“Two or three factors can
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 7 of 9
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`be enough to plead a unity of interest.”) (citing Johnson v. Serenity Transp., Inc., 141 F. Supp. 3d 974,
`985 (N.D. Cal. 2015)).
`The arguments AGIS Software submits in its Opposition are reminiscent of those argued by
`the patent owners in Dainippon Screen Mfg. Co. v. CFMT, Inc., 142 F.3d 1266, 1271 (Fed. Cir. 1998)
`and Google Inc. v. Rockstar Consortium U.S. LP, No. C13-5933-CW, 2014 U.S. Dist. LEXIS 53757
`(N.D. Cal. Apr. 17, 2014), which were soundly rejected by the Federal Circuit and this court,
`respectively. Lyft therefore respectfully requests this Court reject AGIS Software’s arguments
`regarding the alleged futility of Lyft’s amendment.
`c. Lyft was Not Dilatory in Asserting its Breach of Contract Claim.
`As discussed in Lyft’s Motion, Lyft timely brought its breach of contract claim and did so
`without any dilatory motive. See Dkt. 79-3. Lyft’s breach of contract claim was originally brought in
`the EDTX Action, which was dismissed on January 19, 2022. EDTX Action, ECF Nos. 205 & 334.
`About one week later, on January 27, 2022, this Court held its case management conference and
`hearing on AGIS Software’s motion to dismiss. See Dkts. 32 & 33. On February 14, 2022, this Court
`ordered all amended pleadings to be filed by March 28, 2022, which is the date that Lyft filed its
`motion seeking to amend its complaint to add its breach of contract claim. See Dkts. 69 & 78. This
`timeline confirms Lyft was not dilatory in adding its breach of contract claim, and AGIS Software’s
`suggestion that Lyft should have filed multiple amended complaints—one immediately following
`dismissal of the EDTX Action and the other after engaging in jurisdictional discovery—fails to respect
`the Court and parties’ limited resources and Lyft’s attempt to streamline the administration of this
`case.
`
`Additionally, AGIS Software’s arguments regarding Lyft’s alleged dilatory filing of its breach
`of contract claim ignores that AGIS Software’s own actions prevented Lyft from bringing its claim at
`any earlier time. Indeed, AGIS Software confirmed with Lyft before this Court even set a deadline to
`amend pleadings that it did not agree “to permit Lyft to use protected information obtained during
`discovery in the EDTX Action and subject to the protective order in the EDTX Action.” Dkt. 51 at 4.
`Lyft, therefore, was unable to bring its breach of contract claim until it obtained independent evidence
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 8 of 9
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`
`from this case to support its claim,
` because AGIS Software has refused (and continues to refuse) to comply with its obligations
`under Patent L.R. 3-2 to produce its licensing agreements. See, e.g., Dkt. 76-3 at 4-5. In view of the
`foregoing, Lyft submits that it timely brought its breach of contract claim as early as it could have in
`view of AGIS Software’s obstruction efforts.
`AGIS Software also argues that this Court should deny Lyft’s request to add its breach of
`contract claim because such claim will allegedly be moot if this Court allows AGIS Software to amend
`its contentions as it has so moved. Dkt. 94 at 7. Such assertion is legally incorrect as it fails to
`appreciate that Lyft’s breach of contract claim is premised on nearly a year of litigation in the EDTX
`Action concerning iOS products that, as discovery will show,
`
` And, despite its claims otherwise, AGIS Software never
`withdrew its allegations against Lyft’s iOS products in the EDTX Action. Lyft’s breach of contract
`claim thus arose when AGIS Software served infringement contentions accusing Lyft’s iOS products
`in the EDTX Action and ended only recently when it withdrew its allegations regarding those same
`products. AGIS Software’s decision to withdraw its iOS-related allegations now has no impact on
`Lyft’s breach of contract claim, which resulted in damages in the forms of attorneys’ fees and other
`costs associated with Lyft’s defense. Accordingly, Lyft’s breach of contract claim is not mooted by
`AGIS Software’s withdrawal of its iOS-related allegations in this action.
`III.
`CONCLUSION
`For the foregoing reasons, Lyft respectfully requests this Court grant Lyft’s Motion for Leave
`to File First Amended Complaint.
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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`Case 5:21-cv-04653-BLF Document 107 Filed 04/19/22 Page 9 of 9
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`Dated: April 19, 2022
`
`Respectfully submitted,
`
`By:
`
`/s/ Jeremy J. Taylor
`Jeremy J. Taylor
`
`Jeremy J. Taylor (SBN 249075)
`Arya Moshiri (SBN 324231)
`jeremy.taylor@bakerbotts.com
`arya.moshiri@bakerbotts.com
`BAKER BOTTS L.L.P.
`101 California St., Ste. 3600
`San Francisco, CA 94111
`Telephone: 415.291.6200
`Facsimile: 415.291.6300
`
`Kurt M. Pankratz (pro hac vice)
`Bethany R. Salpietra (pro hac vice)
`kurt.pankratz@bakerbotts.com
`bethany.salpietra@bakerbotts.com
`BAKER BOTTS L.L.P.
`2001 Ross Ave., Ste. 900
`Dallas, TX 75201
`Telephone: 214.953.6500
`Facsimile: 214.953.6503
`
`Attorneys for Plaintiff Lyft, Inc.
`
`LYFT’S REPLY IN SUPPORT OF ITS MOTION
`FOR LEAVE TO FILE FIRST AMENDED COMPLAINT
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