Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 1 of 8
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`Mark Holscher (SBN 139582)
`mark.holscher@kirkland.com
`Michael Shipley (SBN 233674)
`michael.shipley@kirkland.com
`KIRKLAND & ELLIS LLP
`555 South Flower Street
`Los Angeles, CA 90071
`Telephone: (213) 680-8400
`
`Attorneys for Third Parties Europlay
`Capital Advisors, LLC and Claria
`Innovations, LLC
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`[Additional Counsel on Signature Page]
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`Case No.: 5:18-md-02834-BLF
`Case No.: 5:18-cv-00767-BLF
`Case No.: 5:18-cv-05619-BLF
`
`SECURED CREDITORS’
`ADMINISTRATIVE MOTION
`FOR LIMITED INTERVENTION
`FOR THE PURPOSE OF
`OPPOSING FURTHER
`SUPPLEMENTAL FEE REQUEST
`(dkt. # 880)
`
`IN RE: PERSONAL WEB
`TECHNOLOGIES, LLC ET AL., PATENT
`LITIGATION,
`
`AMAZON.COM, INC., and AMAZON
`WEB SERVICES, INC.,
`Plaintiffs
`
`v.
`PERSONALWEB TECHNOLOGIES,
`LLC and LEVEL 3 COMMUNICATIONS,
`LLC,
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`Defendants.
`PERSONALWEB TECHNOLOGIES,
`LLC, and LEVEL 3
`COMMUNICATIONS, LLC,
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`Plaintiffs,
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`v.
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`TWITCH INTERACTIVE, INC.,
`
`Defendant.
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`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPPLEMENTAL FEE REQUEST
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 2 of 8
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`Non-party movants Europlay Capital Advisors LLC, Claria Innovations LLC,
`Brilliant Digital Entertainment Inc., and Monto Holdings Pty. Ltd. (“Movants”)
`respectfully bring this administrative motion to request permission to intervene for the
`limited purpose of opposing Amazon’s motion to supplement its $5.4 million attorney fee
`judgment against Plaintiff PersonalWeb Technologies LLC, with an additional $3.1
`million in fees for post-judgment collection activities. See dkt. ## 873-75 (declarations);
`880 (motion); 882 (briefing schedule).
`
`* * *
`In its related alter ego cross-complaint filed in L.A Superior Court, Amazon
`alleges that Europlay, BDE, and Monto “own approximately 98% of PersonalWeb.”
`Shipley Decl. Ex. 1 (Cross-Complaint) ¶ 41. They, along with Claria, also hold about $19
`million in secured debt to PersonalWeb. See id. ¶¶ 8–14. In this Court, Amazon has spent
`months taking extensive and expensive third-party judgment debtor discovery, for the
`ostensible purpose of proving that Movants are jointly and severally liable for a $5.4
`million attorneys’ fees award the Court granted to Amazon because they are
`PersonalWeb’s alter egos. Amazon demands that relief in its state-court pleading. See id.
`¶ 1 (“[T]he Court should analyze whether [Movants] are in fact alter egos of
`PersonalWeb and liable for the $5.4 million judgment entered against it in Amazon’s
`favor.”) Amazon now seeks an order from this Court adding more than $3.1 million in
`costs and fees to that judgment, ostensibly for costs of collection. See Dkt. # 880 (the
`“Fee Motion”). The Motion is set to be heard on October 5, 2023. Dkt. # 882.
`PersonalWeb’s opposition is due on July 14, 2023. Amazon’s reply is due on September
`15, 2023. Id.
`Given Amazon’s pending state court alter ego complaint, Movants’ interests are
`clearly implicated by the Fee Motion. On May 9, 2023, Movants first asked Amazon to
`consent to their intervention for the limited purpose of being heard on the Fee Motion.
`Shipley Decl. Ex. 2. Amazon stonewalled that request, before ultimately taking the
`position—six weeks later—that it would consent to Movants intervention only if
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`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPP. FEE REQ.
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 3 of 8
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`Movants agreed to various discovery and substantive demands unrelated to the Fee
`Motion. Id. Amazon also declined to agree to an orderly briefing schedule, insisting that
`Movants brief intervention and the Fee Motion at the same time. Id. Movants now seek
`limited intervention to have an opportunity to be heard on the merits of the Fee Motion.
`ARGUMENT
`Movants make this request by administrative motion because there not enough
`time between the filing of the Motion and the hearing date for Movants to bring a noticed
`motion for limited intervention and to oppose the substance of the Motion. See N.D. Cal.
`L.R. 7-11. Courts of this district have considered the merits of administrative motions for
`intervention when intervention is sought not “for the purpose of litigating any claims on
`the merits,” but instead for leave to be heard on a discrete issue. See Apple, Inc. v.
`Samsung Elecs. Co., 2013 WL 3958232, at *2 (N.D. Cal. July 29, 2013). If the Court is
`of the contrary view that intervention must be sought by noticed motion, Movants request
`in the alternative a briefing schedule on intervention that would nonetheless permit them
`to timely oppose the Fee Motion.
`Indeed, unless the Court permits Movants to intervene, the Fee Motion may face
`no effective opposition. PersonalWeb is under the control of a state court appointed
`Receiver. See Decl. of Todd Gregorian, dkt. # 873, ¶ 7. The Receiver acts as a neutral
`officer of the Court for the benefit of all with interests in the receivership property,
`including both Movants and Amazon. Cal. R. Ct. 3.1179(a). The Receiver’s conduct is
`subject “to the control of the appointing court and not of the parties to the action.”
`Seccombe v. Dionne, 3 Cal. App. 2d 731, 736 (1935). It is undisputed that the
`PersonalWeb estate cannot satisfy even the un-enhanced $5.4 million fee award. Shipley
`Decl. Ex. 3 & ¶ 4 (receiver’s most recent status report). PersonalWeb thus lacks both
`means and incentive to challenge the Fee Motion. Yet, it is essentially inevitable that, if
`the Fee Motion is granted, Amazon will seek to enforce the full $8.5 million against
`Movants in its state court alter ego claim.1 It is thus imperative that the Court permit
`1 This Court does not have subject matter jurisdiction to entertain an alter ego claim against Movants.
`“[A]bsent an independent basis for federal jurisdiction, a new defendant may not be joined in a
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`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPP. FEE REQ.
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 4 of 8
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`Movants to intervene, on a limited basis, to oppose the Fee Motion. For that purpose,
`Movants satisfy the standards for both mandatory and permissive intervention.
`Intervention as of Right: A “party seeking to intervene as of right [under Federal
`Rule of Civil Procedure 24(a)], must meet four requirements: (1) the applicant must
`timely move to intervene; (2) the applicant must have a significantly protectable interest
`relating to the property or transaction that is the subject of the action; (3) the applicant
`must be situated such that the disposition of the action may impair or impede the party’s
`ability to protect that interest; and (4) the applicant’s interest must not be adequately
`represented by existing parties.” Arakaki v. Cayetano, 324 F.3d 1078, 1083 (9th Cir.
`2003) (cleaned up).2 Each element is met here.
`First, Movants’ motion is timely. See United States v. State of Wash., 86 F.3d
`1499, 1503 (9th Cir. 1996). Movants could not object to the Fee Motion until it was
`made. Following Amazon’s ultimate decision not to consent to intervention, Movants
`acted with alacrity. There is no prejudice to Amazon.
`Second, Movants have an interest in disputing additional fees. Amazon already
`sued Movants in state court to enforce the fee award against them. If the Fee Motion is
`granted, Movants’ potential joint and several liability in the state court proceedings will
`increase by upwards of $3.1 million. When “the specter of joint and several liability
`hang[s] over” a perspective intervenor’s relationship with a defendant, the intervenor
`merits a “place at the table because any liability assessed to Defendant may have a direct
`impact on” the intervenor. See Hinkle v. Phillips 66 Co., 2020 WL 10352346, at *4
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`supplementary proceeding to pierce the corporate veil.” Thomas, Head & Greisen Emps. Trust v. Buster,
`95 F.3d 1449, 1454 (9th Cir. 1996); see also Sandlin v. Corp. Int’rs Inc., 972 F.2d 1212, 1216 (10th Cir.
`1992); U.S.I. Props. Corp. v. M.D. Const. Co., 230 F.3d 489, 498 (1st Cir. 2000). The alter ego issues
`must thus be resolved in state court.
`2 Rule 24(c) also requires an intervention motion to be “accompanied by a pleading setting forth the
`claim or defense for which intervention is sought.” But the Ninth Circuit has “approved intervention
`motions without a pleading where the court was otherwise apprised of the grounds for the motion.”
`Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 474 (9th Cir. 1992). That is particularly true when,
`like here, intervention is sought to be heard on a limited issue not controlled by the pleadings. See id.
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`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPP. FEE REQ.
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 5 of 8
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`(W.D. Tex. Nov. 13, 2020); United States v. TDC Mgmt. Corp., 2012 WL 13075866, at
`*4 (D.D.C. July 30, 2012). That is an adequate interest in the subject matter of the Fee
`Motion to merit protection.
`Third, the disposition of the Fee Motion will impair Movants’ ability to protect
`their interests. Movants do and will vigorously contest in the state court action that they
`are PersonalWeb’s alter egos. But they expect Amazon to argue that Movants cannot
`contest the amount the award in the state court proceedings because they cannot
`collaterally attack a federal judgment. Protecting Movants’ interest and even basic
`notions of due process require Movants to be heard on the Fee Motion in this Court, now.
`Finally, Movants’ interests cannot be adequately represented by PersonalWeb.
`PersonalWeb is essentially insolvent and under the control of its Receiver. It does not
`have, and will likely never have, assets sufficient to satisfy the $5.4 million judgment,
`much less an enhanced award of $8.5 million. Shipley Decl. Ex. 3 & ¶ 4. PersonalWeb
`(and the Receiver) thus have little motive to vigorously contest the Motion’s enhanced
`demand. Indeed, Movants understand that absent an infusion of additional cash into the
`receivership, PersonalWeb likely can’t even pay its attorneys to adequately defend
`against the motion. Id. ¶ 5. In similar contexts, courts recognize that an insolvent
`judgment debtor cannot adequately represent the interests of parties alleged to be its alter
`egos. See NEC Elecs. Inc. v. Hurt, 208 Cal. App. 3d 772, 780 (1989) (alleged alter ego’s
`interests did not align with principally liable company that was “on the verge of
`bankruptcy” because company had no “occasion to conduct the litigation with a diligence
`corresponding to the risk of personal liability that was involved” for the alleged alter
`ego); Katzir’s Floor & Home Design, Inc. v. M-MLS.com, 394 F.3d 1143, 1149 (9th Cir.
`2004) (alleged alter ego’s interests were not “protected in the underlying action” when
`principal defendant “was on the verge of dissolution”).
`Limited mandatory intervention for the purpose of opposing the Motion is thus
`appropriate.
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`-4-
`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPP. FEE REQ.
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 6 of 8
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`Permissive Intervention: Unlike Rule 24(a), a “‘significant protectable interest’ is
`not required by Rule 24(b) for [permissive] intervention; all that is necessary for
`permissive intervention is that intervenor's ‘claim or defense and the main action have a
`question of law or fact in common.’” Kootenai Tribe of Idaho v. Veneman, 313 F.3d
`1094, 1108 (9th Cir. 2002). “An applicant who seeks permissive intervention must prove
`that it meets three threshold requirements: (1) it shares a common question of law or fact
`with the main action; (2) its motion is timely; and (3) the court has an independent basis
`for jurisdiction over the applicant’s claims.” Donnelly v. Glickman, 159 F.3d 405, 412
`(9th Cir. 1998). If those requirements are satisfied, the Court has discretion to permit
`intervention. Id.
`That discretion is informed by a variety of factors, including: (1) The nature and
`extent of the intervenors’ interest; (2) Their standing to raise relevant legal issues; (3) The
`legal position they seek to advance; (4) Its probable relation to the merits of the case; (5)
`Whether changes have occurred so that intervention once denied should be reexamined;
`(6) Whether the intervenors' interests are adequately represented by other parties; (7)
`Whether intervention will prolong or unduly delay the litigation; and (8) Whether parties
`seeking intervention will significantly contribute to full development of the underlying
`factual issues in the suit and to the just and equitable adjudication of the legal questions
`presented. Callahan v. Brookdale Sr. Living Comm., Inc., 42 F.4th 1013, 1022 (9th Cir.
`2022) (discussing factors from Spangler v. Pasadena City Bd. of Educ., 552 F.2d 1326,
`1329 (9th Cir. 1977)).
`The threshold requirements are satisfied. An independent basis for subject matter
`jurisdiction is of no concern when intervenors, like Movants, bring no new claims into
`the action. Freedom from Religion Found., Inc. v. Geithner, 644 F.3d 836, 844 (9th Cir.
`2011). Movants intervention is clearly timely. And the issues of fact and law raised the
`Motion—whether Amazon has a factual and legal basis to add $3.1 million to the
`judgment—are not merely common, they are identical.
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`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPP. FEE REQ.
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 7 of 8
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`That being the case, the Court has discretion to permit limited intervention. Here,
`to the extent they are relevant, the Spangler factors point in favor of intervention:
`Factor 1: Movants’ interest in defeating the Fee Motion is a real and substantial
`economic interest that is at issue in the state court action. If common issues exist,
`“[p]ermissive intervention may be permitted when the intervenor has an economic
`interest in the outcome of the suit.” 7C, Wright, Miller, & Kane, Federal Practice &
`Procedure § 1911 (2023 online ed.).
`Factors 2, 3, and 4: The legal position Movants seek to advance—that Amazon’s
`fees should not be enhanced—is substantial and identical to that facing PersonalWeb.
`And it encompasses the essential merits of what remains in this case. Permissive
`intervention thus poses no risk of “injecting extraneous issues into this case[.]” See
`Jackson v. Abercrombie, 282 F.R.D. 507, 520 (D. Haw. 2012)
`Factors 6 and 8: As discussed above, PersonalWeb’s insolvency prevents it from
`adequately representing Movants’ interests in the Fee Motion. As PersonalWeb lacks the
`interest and resources to thoroughly litigate the Fee Motion, intervention will also
`contribute to a full development of the issues and ensure the just and equitable
`adjudication of the legal questions presented.
`Factor 7: Movants seek only be heard on a discrete issue already before the Court.
`That will not “unduly delay or prejudice the adjudication of the rights of the original
`parties.” Fed. Civ. P. 24(b)(2).
`The other two Spangler factors—Factors 2 (standing) and 5 (changes in the
`litigation after an earlier denial of intervention)—are irrelevant to the facts at hand.
`The Spangler factors tip overwhelmingly in favor of permissive intervention. The
`Court should thus permit Movants to intervene on the limited basis to contest the motion.
`* * *
`For the above stated reasons, Movants are entitled to intervene to contest the Fee
`Motion.
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`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPP. FEE REQ.
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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`Case 5:18-md-02834-BLF Document 883 Filed 06/27/23 Page 8 of 8
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`Respectfully submitted,
`
`KIRKLAND & ELLIS LLP
`
` /s/ Michael Shipley
`Mark Holscher (SBN 139582)
`mark.holscher@kirkland.com
`Michael Shipley (SBN 233674)
`michael.shipley@kirkland.com
`KIRKLAND & ELLIS LLP
`555 South Flower Street
`Los Angeles, CA 90071
`Telephone: (213) 680-8400
`
`Attorneys for Third Parties Europlay
`Capital Advisors, LLC and Claria
`Innovations, LLC
`
`FRANDZEL ROBINS BLOOM & CSATO,
`L.C.
`
` /s/ Thomas Robins
`Thomas M. Robins III (SBN 054423)
`trobins@frandzel.com
`Michael Gerard Fletcher (SBN 070849)
`mfletcher@frandzel.com
`Bruce David Poltrock (SBN 162448)
`bpoltrock@frandzel.com
`FRANDZEL ROBINS BLOOM & CSATO,
`L.C.
`1000 Wilshire Boulevard, 19th Floor
`Los Angeles, California 90017-2427
`Telephone: (323) 852-1000
`
`Attorneys for Third Parties Monto Holdings
`Pty Ltd, and Brilliant Digital Entertainment,
`Inc.
`
`
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`
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`Dated: June 27, 2023
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`ADMIN. MOT. FOR LIMITED INTERVENTION RE OPPOSING FURTHER SUPP. FEE REQ.
`CASE NOS. 5:18-md-02834-BLF, 5:18-cv-00767-BLF, and 5:18-cv-05619-BLF
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