Case 2:10-cv-01356-RLH-GWF Document 116 Filed 06/14/11 Page 1 of 16
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF NEVADA
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`* * *
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`Case No.: 2:10-cv-01356-RLH-GWF
`O R D E R
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`(Motion for Voluntary Dismissal
`with Prejudice–#36; Motion to
`Dismiss or Strike–#38; Motion
`for Summary Judgment–#45)
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`RIGHTHAVEN LLC, a Nevada limited-liability
`company,
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`Plaintiff,
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`vs.
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`DEMOCRATIC UNDERGROUND, LLC, a
`District of Columbia limited-liability company;
`and DAVID ALLEN, an individual,
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`Defendants.
`_______________________________________
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`DEMOCRATIC UNDERGROUND, LLC, a
`District of Columbia limited-liability company,
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`Counterclaimant,
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`vs.
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`RIGHTHAVEN, LLC, a Nevada limited-
`liability company; and STEPHENS MEDIA
`LLC, a Nevada limited-liability company,
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`Counterdefendants.
`_______________________________________
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`Before the Court is Plaintiff/Counterdefendant Righthaven LLC’s Motion for
`Voluntary Dismissal with Prejudice (#36, filed Aug. 10, 2010). The Court has also considered
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`Defendant/Counterclaimant Democratic Underground, LLC and David Allen’s (collectively
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`“Democratic Underground”) Opposition (#44, filed Dec. 7, 2010), and Righthaven’s Reply (#57,
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`filed Jan. 7, 2011).
`Also before the Court is Counterdefendant Stephens Media LLC’s Motion to
`Dismiss or Strike (#38, filed Nov. 17, 2010). The Court has also considered the Democratic
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`Underground’s Opposition (#46, filed Dec. 7, 2010), and Stephens Media’s Reply (#56, filed Jan.
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`7, 2011).
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`Also before the Court is Democratic Underground’s Motion for Summary
`Judgment (#45, filed Dec. 7, 2010). The Court has also considered Righthaven’s Opposition
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`(#58, filed Jan. 8, 2011), and Democratic Underground’s Reply (#62, filed Jan. 28, 2011).
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`Finally, the Court allowed and ordered supplemental briefing relevant to the three
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`motions under consideration because of important evidence that only came to light after these
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`motions were fully briefed. Accordingly, the Court has considered Democratic Underground’s
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`Supplemental Memorandum Addressing Recently Produced Evidence (#79, filed Mar. 9, 2011),
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`Stephens Media’s Response (#99, filed May 9, 2011), Righthaven’s Response (#100, filed May 9,
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`2011), and Democratic Underground’s Replies (##107 and 108, filed May 20, 2011).
`BACKGROUND
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`This dispute arises out of Democratic Underground’s allegedly copyright infringing
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`conduct. About May 13, 2010, a Democratic Underground user posted a comment on Democratic
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`Underground’s website which included a portion of a Las Vegas Review-Journal (“LVRJ”) article
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`about Nevada politics, particularly about the Tea Party effect on Sharon Angle’s senatorial
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`campaign (the “Work”). The posting included a link to the full article and the LVRJ’s website.
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`As such, Democratic Underground displayed this selection from the article on its website and
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`Righthaven claims that this infringed on the copyright.
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`Case 2:10-cv-01356-RLH-GWF Document 116 Filed 06/14/11 Page 3 of 16
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`Righthaven claims that after the Work was posted on Democratic Underground’s
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`website, it purchased the copyright to the Work from Stephens Media, the owner of the LVRJ,
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`along with the right to sue for past infringement. (Dkt. #102, Decl. of Steve Gibson, Ex. 1,
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`Copyright Assignment (hereinafter referred to as the “Assignment”).) Righthaven then registered
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`the copyright with the United States Copyright office. Thereafter, Righthaven sued Democratic
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`Underground alleging copyright infringement. Democratic Underground, in turn, filed a
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`counterclaim for a declaratory judgment of non-infringement against both Righthaven and
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`Stephens Media, which was not originally a party to this case. Righthaven has since filed a motion
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`for voluntary dismissal with prejudice due to an adverse fair use ruling by the Honorable Larry R.
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`Hicks, United States District Judge for this district (Righthaven is appealing that decision),
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`Stephens Media has filed a motion to dismiss or strike the counterclaim and a partial joinder to
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`Righthaven’s motion, and Democratic Underground has filed a motion for summary judgment on
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`Righthaven’s claim.
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`After these motions were fully briefed, Stephens Media disclosed to Democratic
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`Underground the Strategic Alliance Agreement (“SAA”) between Stephens Media and
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`Righthaven. The SAA defines their relationship and governs all future copyright assignments
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`between them (including the assignment at issue here). (Dkt. #79, Supplemental Mem. Ex. 1,
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`SAA, dated Jan. 18, 2010.) After learning the details of this agreement, Democratic Underground
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`sought leave to file a supplemental memorandum addressing this newly discovered evidence and
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`its effect on the outstanding motions. The Court allowed the supplemental briefing as it too
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`considered the SAA highly relevant to Righthaven’s standing in this and a multitude of other
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`pending Righthaven cases. After considering the supplemental brief and for the reasons discussed
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`below, the Court dismisses Righthaven for lack of standing and, therefore, denies both
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`Righthaven’s motion and Democratic Underground’s motion as moot. The Court also denies
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`Stephens Media’s motion.
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`/
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`Case 2:10-cv-01356-RLH-GWF Document 116 Filed 06/14/11 Page 4 of 16
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`DISCUSSION
`Righthaven’s Standing to Assert Copyright Claims
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`I.
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`As stated above, before the Court are two motions to dismiss and a motion for
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`summary judgment. However, the Court must first address the supplemental briefing addressing
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`the SAA and the question of Righthaven’s standing to pursue this copyright infringement claim.
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`The Court will then address the outstanding motions.
`A.
`Background - The Strategic Alliance Agreement
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`Months prior to purportedly assigning the Work to Righthaven, Stephens Media
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`and Righthaven signed a Strategic Alliance Agreement governing future copyright assignments
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`between them. (Dkt. #79, Ex. 1, SAA, dated Jan. 18, 2010.) The SAA details the relationship
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`between Righthaven and Stephens Media, explains the rights and responsibilities of each party,
`and limits and defines future copyright assignments between them. (See generally, id.) As such, it
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`limits and explains the intent behind the Assignment, which was executed in July 2010.
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`Critically, the SAA expressly denies Righthaven any rights from future assignments
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`(including the Assignment of the Work) other than the bare right to bring and profit from copyright
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`infringement actions. This conclusion is clearly expressed in Section 7.2 of the SAA:
`7.2 Despite any such Copyright Assignment, Stephens Media shall
`retain (and is hereby granted by Righthaven) an exclusive license to
`Exploit the Stephens Media Assigned Copyrights for any lawful
`purpose whatsoever and Righthaven shall have no right or
`license to Exploit or participate in the receipt of royalties from
`the Exploitation of the Stephens Media Assigned Copyrights
`other than the right to proceeds in association with a Recovery.
`To the extent that Righthaven's maintenance of rights to pursue
`infringers of the Stephens Media Assigned Copyrights in any manner
`would be deemed to diminish Stephens Media's right to Exploit the
`Stephens Media Assigned Copyrights, Righthaven hereby grants an
`exclusive license to Stephens Media to the greatest extent permitted
`by law so that Stephens Media shall have unfettered and exclusive
`ability to Exploit the Stephens Media Assigned Copyrights. . . .
`
`/
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`(Id., Section 7.2 (bold emphasis added, italicization in original)). The plain and simple effect of
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`this section was to prevent Righthaven from obtaining, having, or otherwise exercising any right
`other than the mere right to sue as Stephens Media retained all other rights. Even Righthaven’s
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`right to sue is not absolute. The SAA gives Stephens Media the right to prevent Righthaven from
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`suing an alleged copyright infringer for various specific reasons, including that the lawsuit might
`“result in an adverse result to Stephens Media.” (Id., Section 3.3.) Other sections also give
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`Stephens Media a right to reversion and other rights which, collectively, destroy Righthaven’s
`supposed rights in the Work. (See generally, id.) Now that the SAA has shed light upon
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`Righthaven’s true interest in the copyright to the Work, Democratic Underground asserts that
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`Righthaven lacks standing to maintain this lawsuit.
`B.
`Legal Standard
`Pursuant to Section 501(b) of the 1976 Copyright Act, 17 U.S.C. § 101, et. seq.,
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`(the “Act”) only the legal or beneficial owner of an exclusive right under copyright law is entitled,
`or has standing, to sue for infringement. Silvers v. Sony Pictures Entm't Inc., 402 F.3d 881, 884
`(9th Cir. 2005) (en banc). In so holding, the Ninth Circuit followed the Second Circuit’s decision
`in Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27 (2d Cir. 1982), superseded by rule
`and statute on other grounds. See also, ABKCO Music, Inc. v. Harrisongs Music, Ltd., 944 F.2d
`971, 980 (2d Cir. 1991) (citing Eden Toys, “the Copyright Act does not permit copyright holders to
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`choose third parties to bring suits on their behalf.”) Section 106 of the Act defines and limits the
`exclusive rights under copyright law. Id. at 884–85. While these exclusive rights may be
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`transferred and owned separately, the assignment of a bare right to sue is ineffectual because it is
`not one of the exclusive rights. Id. Since the right to sue is not one of the exclusive rights,
`transfer solely of the right to sue does not confer standing on the assignee. Id. at 890. One can
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`only obtain a right to sue on a copyright if the party also obtains one of the exclusive rights in the
`copyright. See id. Further, to obtain a right to sue for past infringement, that right must be
`expressly stated in the assignment. See generally, id.
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`Case 2:10-cv-01356-RLH-GWF Document 116 Filed 06/14/11 Page 6 of 16
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`C.
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`Analysis
`1.
`Contract Construction
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`Righthaven argues that the SAA’s provisions, which necessarily include Section
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`7.2, do not alter the unambiguous language of the Assignment or limit the rights it obtained from
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`Stephens Media in the Assignment. This conclusion is flagrantly false—to the point that the claim
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`is disingenuous, if not outright deceitful. The entirety of the SAA was designed to prevent
`Righthaven from becoming “an owner of any exclusive right in the copyright. . . .,” Silvers, 402
`F.3d at 886 (emphasis in original), regardless of Righthaven and Stephens Media’s post hoc,
`explanations of the SAA’s intent or later assignments, (see generally Dkt. #101, Decl. of Mark A.
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`Hineuber; Dkt. #102, Decl. of Steven A. Gibson). Prior to the Assignment, Stephens Media
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`possessed all of the exclusive rights to the Work and, therefore, the right to sue. Because the SAA
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`limited the language of the Assignment, the Assignment changed nothing save for Righthaven’s
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`claim to have the right to sue. The companies’ current attempt to reinterpret the plain language of
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`their agreement changes nothing. In reality, Righthaven actually left the transaction with nothing
`more than a fabrication since a copyright owner cannot assign a bare right to sue after Silvers. To
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`approve of such a transaction would require the Court to disregard the clear intent of the
`transaction and the clear precedent set forth by the en banc Ninth Circuit in Silvers.
`2.
`Stephens Media and Righthaven’s Intent
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`Righthaven contends that the Court should construe the SAA to grant Righthaven
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`whatever rights are necessary for it to have standing in a copyright infringement action. First,
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`Righthaven argues that the Court should construe the contract in this manner because in situations
`where a contract is ambiguous, the Court should look to the parties’ intent. Sheehan & Sheehan v.
`Nelson Malley and Co., 117 P.3d 219, 223–24 (Nev. 2005). Accordingly, Righthaven argues that
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`the plain intent of the SAA is to give Righthaven all rights necessary to bring a copyright
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`infringement action. The Court, however, disagrees with Righthaven’s premise because the SAA
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`is not ambiguous. Righthaven and Stephens Media went to great lengths in the SAA to be sure
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`Case 2:10-cv-01356-RLH-GWF Document 116 Filed 06/14/11 Page 7 of 16
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`that Righthaven did not obtain any rights other than the bare right to sue. Thus, the Court finds
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`that the plain language of the SAA conveys the intent to deprive Righthaven of any right, save for
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`the right to sue alleged infringers and profit from such lawsuits. As such, the SAA is not
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`ambiguous and the Court shall not read any ambiguity into it.
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`Second, Righthaven argues that Section 15.1 of the SAA gives the Court authority
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`to correct any provision of the SAA that is deemed void or unenforceable to approximate the
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`manifest intent of the parties. The problem is that this argument requires a provision of the SAA
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`to be void or unenforceable. However, Righthaven’s problem is not that any provision of the SAA
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`is void or unenforceable but that the SAA simply does not grant Righthaven any of the exclusive
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`rights defined in Section 106 of the Act required for standing. Therefore, the SAA is not void or
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`unenforceable, it merely prevents Righthaven from obtaining standing to sue from the Assignment.
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`Accordingly, the Court need not and shall not amend or reinterpret the SAA to suit Righthaven’s
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`current desires.
`3.
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`Righthaven and Stephens Media’s Amendment to the SAA
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`Notwithstanding the actual transaction that occurred, Righthaven argues that the
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`amendment it executed with Stephens Media on May 9, 2011, the day that they filed their response
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`to the supplemental memorandum validates or fixes any possible errors in the original SAA that
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`would prevent Righthaven from having standing in this matter. (Dkt. #102, Gibson Decl. Ex. 3,
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`Clarification and Amendment to SAA.) However, this amendment cannot create standing because
`“‘[t]he existence of federal jurisdiction ordinarily depends on the facts as they exist when the
`complaint is filed.’” Lujan v. Defenders of Wildlife, 504 U.S. 555, 571 n.4 (1992) (quoting
`Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 830 (1989)) (emphasis in Lujan).
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`Although a court may allow parties to amend defective allegations of jurisdiction, it may not allow
`the parties to amend the facts themselves. Newman-Green, 490 U.S. at 830. As an example, a
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`party who misstates his domicile may amend to correctly state it. This is an amendment of the
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`allegation. However, that party is not permitted to subsequently move in order to change his
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`domicile and amend accordingly. This would be an amendment of the jurisdictional facts, which
`is not allowed. See id. Here, Righthaven and Stephens Media attempt to impermissibly amend the
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`facts to manufacture standing. Therefore, the Court shall not consider the amended language of
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`the SAA, but the actual transaction that took place as of the time the complaint was filed. 1
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`Regardless of this legal principle, Righthaven argues that courts routinely allow
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`parties to a copyright transfer to subsequently clarify or amend their agreements in order to express
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`their original intent to grant the assignee the right to sue for infringement. Righthaven’s assertion
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`is not entirely wrong, but the cases Righthaven cites in support of its proposition are all
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`distinguishable as they deal with matters significantly different than those presently before the
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`Court. For instance, Righthaven cites multiple cases where courts allowed an oral assignment
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`made prior to initiation of a lawsuit to be confirmed in writing after the initiation of the lawsuit.
`See Billy-Bob Teeth, Inc. v. Novelty, Inc., 329 F.3d 586, 591 (7th Cir. 2003) (allowing an oral
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`assignment to be confirmed in a later writing). These cases are all distinguishable in that the
`2
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`assignor and assignee in these cases had agreements to transfer the necessary, exclusive rights
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`prior to the initiation of a lawsuit. The only thing lacking was the written document necessary for
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`a court to recognize the transfer. In each of these cases, the courts merely gave effect to what the
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`parties had actually done, i.e. recognized rights already actually transferred. Here, Righthaven
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`does not ask the Court to recognize an oral transfer with a late made written memorandum of the
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`deal, but to fundamentally rewrite the agreement between Righthaven and Stephens Media to grant
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`Righthaven rights that it never actually received.
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` The Court does not determine whether or not the amended SAA would transfer sufficient rights to
`1
`Righthaven for it to have standing in suits filed after amendment as the Court need not make that determination
`to rule on these motions. Nonetheless, the Court expresses doubt that these seemingly cosmetic adjustments
`change the nature and practical effect of the SAA.
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` See also, Imperial Residential Design, Inc. v. Palms Dev. Group, Inc., 70 F.3d 96, 99 (11th Cir. 1995)
`2
`(“[A] copyright owner’s later execution of a writing which confirms an earlier oral agreement validates the
`transfer ab initio.”); Arthur Rutenberg Homes, Inc. v. Drew Homes, Inc., 29 F.3d 1529, 1532 (11th Cir. 1994);
`Sabroso Publ’g, Inc. v. Caiman Records Am., Inc., 141 F. Supp. 2d 224, 228 (D.P.R. 2001).
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` Righthaven cites three other district court cases from other circuits which deal with
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`matters other than oral assignments later ratified by written agreements. First is a district court
`case, Intimo Inc. v. Briefly Stated, Inc., 948 F. Supp. 315 (S.D.N.Y. 1996), wherein the court
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`allowed the parties to the assignment agreement to amend the agreement to include the right to sue
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`for pre-assignment copyright violations. Notably, the plaintiff in that case would have maintained
`standing as not all claims were based on pre-assignment copyright violations. Id. at 318–19.
`Nonetheless, the Intimo court allowed amendment to correct what it found was merely an
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`oversight on the part of the parties because the agreement was silent on pre-assignment copyright
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`violations despite the parties intent to transfer the right to sue on those violations. Here,
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`Righthaven and Stephens Media may have wanted Righthaven to be able to sue, but the SAA was
`anything but silent in making sure that Stephens Media retained complete control over the Work
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`rather than actually effectuate the necessary transfer of rights. The entirety of the SAA is
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`concerned with making sure that Righthaven did not obtain any rights other than the right to sue.
`This careful exclusion of rights made even that transfer ineffectual under Silvers.
`The other two cases are also distinguishable. The second case, Infodek, Inc. v.
`Meredith-Webb Printing Co., Inc., 830 F. Supp. 614 (N.D. Ga. 1993), is based on facts largely
`similar to Intimo and the same analysis distinguishes it from the present case. The third is an
`unreported district court case, Gondinger Silver Art Co., Ltd. v. Int’l Silver Co., No. 95 CIV. 9199,
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`1995 WL 702357 (S.D.N.Y. Nov. 28, 1995), that dealt with a later assignment because there was a
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`dispute as to whether the relevant work was a work made for hire or whether the plaintiff was a co-
`author of the work. The Gondinger court did not expressly determine the issue, finding that it was
`irrelevant as there was another basis for standing. Id. at *4–5. In sum, not one of the cases cited
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`by Righthaven persuade, much less require, the Court to find standing based on Righthaven and
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`Stephens Media’s Amended SAA.
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`/ /
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`4.
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`Democratic Underground’s Standing to Challenge the SAA
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`Righthaven also contends that Democratic Underground lacks standing to challenge
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`the validity of the SAA. However, Democratic Underground does not actually attack the SAA’s
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`validity, Democratic Underground only contends that the SAA prevented the Assignment from
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`transferring the rights Righthaven and Stephens Media currently argue the Assignment transferred.
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`In essence, Democratic Underground simply argues that, under the SAA, the Assignment only
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`transferred one particular right, which failed to have the effect Righthaven wishes it had.
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`Democratic Underground does not contest the SAA’s validity or argue that it should be undone in
`any way. Further, the Sylvers court necessarily allowed the defendant to challenge whether the
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`necessary rights were transferred from the rights holder to the plaintiff in that action. Otherwise
`the Ninth Circuit would not have been able address the plaintiff’s lack of standing in Silvers and
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`hold that a mere right to sue is insufficient to bring a copyright infringement action.
`5.
`Prior Rulings within this District
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`Finally, Righthaven contends that multiple courts within this district have already
`determined that Righthaven has standing to bring claims for past infringement under the Silver
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`standard based on the plain language of the copyright assignment. At best, this argument is
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`disingenuous. As the undersigned issued one of the orders Righthaven cites for this argument, the
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`undersigned is well aware that Righthaven led the district judges of this district to believe that it
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`was the true owner of the copyright in the relevant news articles. Righthaven did not disclose the
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`true nature of the transaction by disclosing the SAA or Stephens Media’s pecuniary interests. As
`the SAA makes abundantly clear, Stephens Media retained the exclusive rights, never actually
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`transferring them to Righthaven regardless of Righthaven’s and Stephens Media’s current
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`contentions. Further, Righthaven also failed to disclose Stephens Media in its certificates of
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`interested parties, despite Stephens Media’s right to proceeds from these lawsuits. (Dkt. #79, Ex.
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`1, SAA Section 5 (granting Stephens Media a fifty percent interest in any recovery, minus costs).)
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`/
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`Since those orders were tainted by Righthaven’s failure to disclose the SAA and Stephens Media’s
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`true interest, those decisions are not persuasive and do not support standing here.
`D.
`Righthaven Lacks Standing to Bring this Action
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`Because the SAA prevents Righthaven from obtaining any of the exclusive rights
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`necessary to maintain standing in a copyright infringement action, the Court finds that Righthaven
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`lacks standing in this case. Accordingly, the Court dismisses Righthaven from this case. However,
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`Righthaven requests that upon such a finding, the Court grant it leave to join Stephens Media as a
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`plaintiff to cure the jurisdictional defect. Adding Stephens Media, however, would not cure the
`jurisdictional defect as to Righthaven. Eden Toys, 697 F.2d at 32 n.3 (“While [Federal Rule of
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`Civil Procedure] 17(a) ordinarily permits the real party in interest to ratify a suit brought by
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`another party, the Copyright Law is quite specific in stating that only the owner of an exclusive
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`right under a copyright may bring suit.” (internal citations and quotations omitted).) Also, as
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`Stephens Media has already been brought into this suit as a counter-defendant to a declaratory
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`judgment claim, the Court finds it unnecessary to join Stephens Media as a plaintiff. If Stephens
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`Media wishes to assert claims against Democratic Underground, it may do so separately.
`II.
`Righthaven’s Motion and Democratic Underground’s Motion are Both Moot
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`Because the Court has dismissed Righthaven for lack of standing, the Court denies
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`both Righthaven’s motion for voluntary dismissal with prejudice and Democratic Underground’s
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`motion for summary judgment on Righthaven’s claim as moot. Since Righthaven has been
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`dismissed, its complaint is also dismissed. This, of course, does not affect Democratic
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`Underground’s right to bring a motion for attorney fees under the Act. Also, the counterclaim
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`against Stephens Media remains and so the Court now turns its attention to Stephens Media’s
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`motion.
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`/ / /
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`III.
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`Stephens Media’s Motion to Dismiss or Strike
`A.
`Legal Standard
`1.
`Motion to Dismiss Standard
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`“In this action, as in all actions before a federal court, the necessary and
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`constitutional predicate for any decision is a determination that the court has jurisdiction—that is
`the power—to adjudicate the dispute.” Toumajian v. Frailey, 135 F.3d 648, 652 (9th Cir. 1998).
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`The purpose of a complaint is two-fold: to give the defendant fair notice of the basis for the court’s
`jurisdiction and of the factual basis of the claim. See Fed. R. Civ. P. 8; Skaff v. Meridien North
`Am. Beverly Hills, LLC., 506 F.3d 832, 843 (9th Cir. 2007). Rule 12(b)(1) of the Federal Rules of
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`Civil Procedure allows defendants to seek dismissal of a claim or action for a lack of subject
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`matter jurisdiction. Dismissal under Rule 12(b)(1) is appropriate if the complaint, considered in
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`its entirety, fails to allege facts on its face that are sufficient to establish subject matter jurisdiction.
`In re Dynamic Random Access Memory (DRAM) Antitrust Litigation, 546 F.3d 981, 984–85 (9th
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`Cir. 2008). Although the defendant is the moving party in a motion to dismiss brought under Rule
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`12(b)(1), the plaintiff is the party invoking the court’s jurisdiction. As a result, the plaintiff bears
`the burden of proving that the case is properly in federal court. McCauley v. Ford Motor Co., 264
`F.3d 952, 957 (9th Cir. 2001) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178,
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`189 (1936)).
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`Attacks on jurisdiction pursuant to Rule 12(b)(1) can be either facial, confining the
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`inquiry to the allegations in the complaint, or factual, permitting the court to look beyond the
`complaint. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). “In
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`a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient
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`on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes
`the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe
`Air for Everyone v. Myer, 373 F.3d 1035, 1039 (9th Cir. 2004). A “factual” attack made pursuant
`to Rule 12(b)(1) may be accompanied by extrinsic evidence. Whitethorn v. F.C.C., 235 F. Supp.
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`2d 1092, 1095–96 (D. Nev. 2002) (citing St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.
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`1989). Dismissal for lack of subject matter jurisdiction is appropriate if the complaint, considered
`in its entirety, fails to allege facts that are sufficient to establish subject matter jurisdiction. In re
`Dynamic Random Access Memory (DRAM) Antitrust Litigation, 546 F.3d 981, 984–85 (9th Cir.
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`2008).
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`2.
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`Motion to Strike Standard
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`Under Rule 12(f) a “court may strike from a pleading … any redundant, immaterial,
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`impertinent, or scandalous matter.” Matter is “immaterial” if it has no bearing on the controversy
`before the court. In re 2TheMart.com, Inc Sec. Litig., 114 F. Supp. 2d 955, 965 (C.D. Cal. 2000).
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`Allegations are “impertinent” if they are not responsive to the issues that arise in the action and
`that are admissible as evidence. Id. “Scandalous” matter is that which casts a cruelly derogatory
`light on a party or other person. Id. A court need not wait for a motion from the parties; it may act
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`on its own to strike matter from a pleading. Fed. R. Civ. P. 12(f)(1).
`B.
`Analysis
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`Stephens Media’s motion essentially relies on two separate arguments for its
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`position that there is no justiciable case or controversy: (1) that Stephens Media assigned all of the
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`rights in and to the Work to Righthaven, thus negating the possibility of any case or controversy
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`between Stephens Media and Democratic Underground, and (2) that Democratic Underground’s
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`counterclaim will necessarily be adjudicated by a decision on the original complaint and, therefore,
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`should be stricken. The Court dispelled Stephens Media’s first argument in the analysis above.
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`Stephens Media expressly avoided transferring the exclusive rights to the Work to Righthaven by
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`neutering future assignments in the SAA. As to Stephens Media’s second argument, setting aside
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`the fact that Stephens Media was never a party to Righthaven’s complaint, that argument is now
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`moot as the Court has dismissed Righthaven’s complaint. Since the complaint has been dismissed,
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`the issues raised by the counterclaim can only be adjudicated by litigating the counterclaim, not the
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`now defunct complaint.
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`1.
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`Justiciable Case or Controversy
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`Stephens Media’s principle contention for why there is no justiciable case or
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`controversy between Stephens Media and Democratic Underground relied on the Assignment of
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`rights to Righthaven. Though the Court has refuted this particular argument, the Court will,
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`nonetheless, quickly address the case or controversy requirement for a declaratory judgment action
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`as it still pertains to this case.
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`The Supreme Court has held that declaratory judgment claims must arise from
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`disputes that are “‘definite and concrete, touching the legal relations of parties having adverse
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`legal interests,’ . . . ‘real and substantial,’” and beget “specific relief through a decree of a
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`conclusive character, as distinguished from an opinion advising what the law would be upon a
`hypothetical state of facts.’” MedImmune, Inc. v. Genentech, Inc. 549 U.S. 118, 127 (2007).
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`Nonetheless, a party need not “bet the farm” and always actually engage in planned conduct that
`would result in threatened legal action before bringing a declaratory judgment suit. Id. at 133–34.
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`Contrary to its assertions in its moving papers, Stephens Media has threatened
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`Democratic Underground with litigation because, according to the SAA, Stephens Media approved
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`or consented to suit against Democratic Underground. (Dkt. #79, Ex. 1, SAA Section 3.3.)
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`Additionally, Stephens Media’s then CEO, Sherman Frederick, generally threatened potential
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`defendants that he would send his “little friend called Righthaven” after them. (Dkt. #13, Answer
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`and Countercl. ¶ 33.) Here, Stephens Media actually did send Righthaven after Democratic
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`Underground. Further, Democratic Underground desires to re-post the allegedly infringing
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`material to maintain a full archive of prior posts on its website. This could result in new copyright
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`infringement litigation against Democratic Underground if the Court does not declare that the post
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`did not infringe the copyright in the first instance. This threat of suit is sufficiently real and
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`substantial that an actual case and controversy exists between these parti