Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 1 of 18 Page ID #:5931 1 2 3 4 5 6 7 8 STEPHEN R. MICK (SBN 131569) smick@btlaw.com KEVIN D. RISING (SBN 211663) krising@btlaw.com DAVID W. NELSON (SBN 240040) dnelson@btlaw.com BARNES & THORNBURG LLP 2029 Century Park East, Suite 300 Los Angeles, California 90067 Telephone: 310.284.3880 Facsimile: 310.284.3894 Attorneys for Plaintiff and Counter-Defendants LMNO CABLE GROUP, INC. and LMNO ENTERTAINMENT GROUP, LLC 9 UNITED STATES DISTRICT COURT 10 CENTRAL DISTRICT OF CALIFORNIA 11 12 LMNO CABLE GROUP, INC., a California corporation, 13 14 15 16 Plaintiff, v. DISCOVERY COMMUNICATIONS, LLC, a Delaware limited liability company, 17 Case No. 2:16-cv-4543-JAK-SK LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFFINTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Defendants. 18 19 20 DISCOVERY COMMUNICATIONS, LLC, a Delaware limited liability company, 23 24 25 Hon. John A. Kronstadt Counterclaimant, 21 22 Judge: v. LMNO CABLE GROUP, INC., a California corporation, and LMNO ENTERTAINMENT GROUP, LLC, a California limited liability company, Counter-Defendants. 26 27 28 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 2 of 18 Page ID #:5932 1 TABLE OF CONTENTS 2 Page(s) 3 I. INTRODUCTION AND FACTUAL BACKGROUND .................................1 4 II. 5 PLAINTIFF-INTERVENORS’ APPLICATION SHOULD BE DENIED BECAUSE THEY ARE NOT ENTITLED TO A TEMPORARY RESTRAINING ORDER ................................................................................4 6 A. 7 8 Plaintiff-Intervenors Do Not Establish A Likelihood that They Will Succeed on the Merits ...........................................................................4 1. Plaintiff-Intervenors Identify No Legal Theory Under Which They Own or Could Obtain LMNO’s Intellectual Property Rights in The Little Couple .........................................................5 2. Plaintiff-Intervenors are Not Entitled to Rescission ...................7 9 10 11 12 B. Plaintiff-Intervenors Do Not Establish A Likelihood that They Will Suffer Irreparable Harm ........................................................................9 C. Plaintiff-Intervenors Do Not Show That The Balance of Equities Tips in Their Favor ..............................................................................11 D. Plaintiff-Intervenors Requested Injunction is Against the Public Interest .................................................................................................12 13 14 15 III. PLAINTIFF-INTERVENORS’ REQUESTED INJUNCTION WOULD REQUIRE PLAINTIFF-INTERVENORS TO POST A SUBSTANTIAL BOND ............................................................................................................12 IV. CONCLUSION..............................................................................................13 16 17 18 19 20 21 22 23 24 25 26 27 28 i LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 3 of 18 Page ID #:5933 1 TABLE OF AUTHORITIES 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Page(s) Cases Ahern v. Central Pacific Freight Lines, 846 F.2d 47 (9th Cir. 1988) ........................................................................................12 Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989)...................................................................................................... 6 Defense of Animals v. U.S. Dept. of Interior, 737 F. Supp. 2d 1125 (E.D. Cal. 2010) ........................................................................ 4 Effects Associates, Inc. v. Cohen, 908 F.2d 555 (1990)...................................................................................................... 6 Garcia v. Google, Inc., 786 F.3d 733 (9th Cir. 2015) ........................................................................................6 Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc., 736 F.3d 1239 (9th Cir. 2013) ................................................................................9, 10 Leppard v. Mukasey, 530 F.3d 862 (9th Cir. 2008) ......................................................................................12 17 18 19 20 21 22 23 24 25 26 27 NML Capital, Ltd. v. Spaceport Systems Intern., L.P., 788 F. Supp. 2d 1111 (C.D. Cal. 2011) ........................................................................ 4 Nokia Corp. v. InterDigital, Inc., 645 F.3d 553 (2d Cir. 2011) .......................................................................................13 Seven Arts Filmed Entertainment Ltd. v. Content Media Corp. PLC, 733 F.3d 1251 (9th Cir. 2013) ......................................................................................7 Spark Industries, LLC v. Kretek International, Inc., 2014 WL 12600262 (C.D.Cal. July 29, 2014)..............................................................9 U.S. v. McInnes, 556 F.2d 436 (9th Cir. 1977) ......................................................................................12 Winter v. National Resources Defense Council, Inc., 555 U.S. 7 (2008)....................................................................................................4, 11 28 ii LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 4 of 18 Page ID #:5934 1 2 Wood v. Kalbaugh, 39 Cal. App. 3d 926 (Cal. Ct. App. 1974)................................................................7, 8 3 Statutes 4 17 U.S.C. § 507(b) ............................................................................................................. 7 5 6 7 8 Cal. Civ. Code § 1689(b)(1) ..........................................................................................7, 8 Other Authorities Fed. R. Civ. Proc. 65(c) ...................................................................................................13 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 5 of 18 Page ID #:5935 1 2 I. Introduction And Factual Background Following several months of negotiations, Plaintiffs and Counter-Defendants 3 LMNO Cable Group, Inc. and LMNO Entertainment Group, LLC (together “LMNO”) 4 and Defendant and Counterclaimant Discovery Communications, LLC (“Discovery”) 5 have reached a settlement in principle, which they anticipate will result in the dismissal 6 of their respective claims and LMNO’s claims against the cable and satellite providers. 7 Yet now, through their Application for a Temporary Restraining Order, Plaintiff- 8 Intervenors ask the Court to effectively prohibit LMNO and Discovery from finalizing 9 their settlement based on Plaintiff-Intervenors’ vague contention that they have some 10 undefined ownership interest in unspecified “intellectual property” associated with The 11 Little Couple. Plaintiff-Intervenors’ Application is supported by no material evidence, it 12 fails to identify any cognizable legal theory under which Plaintiff-Intervenors could be 13 entitled to an ownership interest in any of LMNO’s intellectual property rights, it 14 depends on the rescission of an agreement that Plaintiff-Intervenors have no right to 15 rescind, it cites to no evidence of irreparable harm, it would impose substantial costs 16 and burdens on both the parties and the Court to continue litigating a matter that the 17 parties are prepared to settle, and it directly contravenes the Ninth Circuit’s recognized 18 strong public policy in favor of settlements. Plaintiff-Intervenors’ Application should be 19 denied. 20 Plaintiff-Intervenors are actors on The Little Couple, one of the programs that 21 LMNO produced and licensed for broadcast on Discovery’s TLC network. Pursuant to a 22 2008 Option Agreement, Plaintiff-Intervenors contend that they were entitled to receive 23 certain backend compensation from LMNO, but that they were underpaid under the 24 terms of the agreement. Plaintiff-Intervenors further contend that LMNO made 25 “misrepresentations” in participation statements sent to Plaintiff-Intervenors because the 26 statements did not calculate the backend compensation in the manner they contend was 27 required under the contract. Thus, in describing their own claim, Plaintiff-Intervenors 28 argue that LMNO “consistently misrepresented to Plaintiff-Intervenors amounts of 1 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 6 of 18 Page ID #:5936 1 contingent compensation owed to them, to the tune of hundreds of thousands of dollars 2 fraudulently withheld from Plaintiff-Intervenors.” (Application, 8:4-8.) 3 LMNO disputes Plaintiff-Intervenors’ contentions and, in fact, believes that 4 Plaintiff-Intervenors were long overpaid based on advances that LMNO provided 5 against backend compensation. But, even assuming Plaintiff-Intervenors’ contentions 6 were correct, Plaintiff-Intervenors’ remedy against LMNO would be a monetary 7 judgment for the “hundreds of thousands of dollars” purportedly owed to Plaintiff- 8 Intervenors under the contract. For any purported underpayment (or related 9 misrepresentations regarding the amounts owed to them), this monetary remedy would 10 11 make them whole. Nonetheless, seeking to obtain a windfall from a simple contract dispute, 12 Plaintiff-Intervenors have concocted claims of fraud and contend that alleged post- 13 contract misrepresentations by LMNO concerning the backend compensation owed to 14 Plaintiff-Intervenors give Plaintiff-Intervenors the right to rescind the 2008 Option 15 Agreement, and that upon rescission Plaintiff-Intervenors would then obtain some 16 undefined ownership interest in “certain intellectual property rights in and to” The Little 17 Couple. (Application, 7:13-14.) Both contentions are legally and factually unsupported. 18 Yet, based on these unsupported contentions, Plaintiff-Intervenors now seek an 19 injunction vaguely prohibiting LMNO from transferring any intellectual property rights 20 in The Little Couple as part of a settlement agreement with Discovery – a broad, vague 21 prohibition that would effectively prevent the parties from finalizing a settlement of this 22 litigation. Plaintiff-Intervenors’ Application should be denied for several independent 23 and sufficient reasons: 24  Plaintiff-Intervenors identify no legal theory – and cite to no legal authority 25 – to support their claim to an ownership interest in LMNO’s intellectual 26 property. LMNO owns the copyrights and associated intellectual property 27 in The Little Couple episodes based on its creation of these works, and 28 2 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 7 of 18 Page ID #:5937 1 rescission of the 2008 Option Agreement would have no effect on LMNO’s 2 rights. 3  While Plaintiff-Intervenors’ argument depends on them obtaining 4 rescission of the 2008 Option Agreement based on “fraud in the 5 inducement,” they present no evidence that they were induced to enter into 6 the 2008 Option Agreement based on any misrepresentation by LMNO. To 7 the contrary, both their Application and their own interrogatory responses 8 claim only that LMNO purportedly made misrepresentation to Plaintiff- 9 Intervenors years later in backend participation statements. Alleged post- 10 11 contract misrepresentations cannot support a right to rescind.  The Ninth Circuit requires a plaintiff seeking an injunction to proffer 12 evidence sufficient to establish a likelihood of irreparable harm. Plaintiff- 13 Intervenors have proffered none. Under Ninth Circuit precedent, it would 14 be an abuse of discretion for a district court to grant an injunction where 15 the record contains no evidence establishing irreparable harm. 16  The balance of equities and public interest strongly favor denial of the 17 requested injunction. The Ninth Circuit recognizes a strong public policy in 18 favor of settlement, and an injunction that would effectively prohibit 19 LMNO and Discovery from finalizing a settlement in this matter would 20 require the parties to continue litigating a case that they have already 21 agreed in principle to settle. The harm would be millions of dollars in 22 attorneys’ fees, a risk to both LMNO and Discovery that any litigation 23 result would be substantially worse than their agreed settlement, and a 24 wholly unnecessary burden on the Court to continue presiding over a 25 complex matter that would likely end in two lengthy jury trials (between 26 LMNO and Discovery and then between LMNO and the cable and satellite 27 providers). 28 3 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 8 of 18 Page ID #:5938 1 2 LMNO, therefore, respectfully requests that the Court deny Plaintiff-Intervenors’ Application in its entirety. 3 4 II. Plaintiff-Intervenors’ Application Should Be Denied Because They Are Not 5 Entitled To A Temporary Restraining Order 6 “The standard for issuing a temporary restraining order is identical to the standard 7 for issuing a preliminary injunction.” NML Capital, Ltd. v. Spaceport Systems Intern., 8 L.P., 788 F. Supp. 2d 1111, 1117 (C.D. Cal. 2011). Thus, a temporary restraining order, 9 like a preliminary injunction, is “an extraordinary remedy that may only be awarded 10 upon a clear showing that the plaintiff is entitled to such relief.” See Winter v. National 11 Resources Defense Council, Inc., 555 U.S. 7, 22 (2008); see also In Defense of Animals 12 v. U.S. Dept. of Interior, 737 F. Supp. 2d 1125, 1131 (E.D. Cal. 2010) (because 13 “preliminary injunctive relief is an extraordinary remedy, [plaintiffs] have the burden of 14 proving the propriety of such a remedy by clear and convincing evidence.”). 15 A plaintiff seeking a temporary restraining order “must establish [1] that he is 16 likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the 17 absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] 18 that an injunction is in the public interest.” Winter, 555 U.S. at 20. As explained below, 19 Plaintiff-Intervenors Application fails on each of these grounds. 20 21 22 A. Plaintiff-Intervenors Do Not Establish A Likelihood that They Will Succeed on the Merits Without a single citation to evidence – and having submitted no material 23 evidence in support of their Application – Plaintiff-Intervenors argue that they are 24 entitled to a temporary restraining order prohibiting LMNO from transferring any of 25 LMNO’s intellectual property rights in The Little Couple. Plaintiff-Intervenors contend 26 that a TRO is appropriate because they seek to obtain such undefined intellectual 27 property rights in their seventh cause of action for declaratory relief, through which they 28 4 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 9 of 18 Page ID #:5939 1 purportedly “seek to rescind the contract with LMNO and recover any and all 2 intellectual property rights purportedly assigned to LMNO.” (Application, 13:8-10.) 3 Plaintiff-Intervenors, however, fail to identify any legal theory under which 4 rescission of the 2008 Option Agreement would result in them obtaining LMNO’s 5 ownership interest in any intellectual property associated with The Little Couple. 6 Moreover, even if such a theory existed, there is no evidentiary or legal basis for 7 Plaintiff-Intervenors to obtain rescission of the 2008 Option Agreement. Thus, Plaintiff- 8 Intervenors’ claim for a declaration that they own “certain intellectual property rights in 9 and to” The Little Couple will not succeed on the merits. 10 1. Plaintiff-Intervenors Identify No Legal Theory Under Which They 11 Own or Could Obtain LMNO’s Intellectual Property Rights in The 12 Little Couple 13 Arguing that they are entitled to rescind the 2008 Option Agreement, Plaintiff- 14 Intervenors contend that they should be granted some unidentified ownership interest in 15 “certain intellectual property rights in and to [The Little Couple] Program.” 16 (Application, 5:17-25.) Plaintiff-Intervenors, however, do not identify any legal theory 17 (and cite to no legal authority) under which rescission of the 2008 Option Agreement 18 would result in Plaintiff-Intervenors obtaining ownership of any intellectual property 19 rights in The Little Couple now owned by LMNO. 20 While Plaintiff-Intervenors fail to specify which intellectual property rights they 21 purportedly seek to obtain, at this stage (with the works at issue now completed and 22 published) the primary intellectual property interests are the copyrights in each finished 23 episode of the program. In their Application, Plaintiff-Intervenors do not dispute that 24 LMNO owns (and has registered) the copyright in each episode of The Little Couple 25 based on its creation of the works. (Mick Decl., ¶ 2.) And, they do not explain how – 26 even if they could rescind the 2008 Option Agreement – Plaintiff-Intervenors could 27 possibly obtain ownership of the copyrights to these works. 28 5 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 10 of 18 Page ID #:5940 1 On the issue of ownership, copyright law is clear: “the exclusive rights of 2 copyright ownership vest in the creator of [the work], unless there is a written 3 agreement to the contrary.” Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557 (1990) 4 (citing Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989)). Plaintiff- 5 Intervenors have submitted no evidence – and do not even argue – that they were the 6 creators or authors of any episode of The Little Couple. And contrary to any such claim, 7 the Ninth Circuit has recognized that the law does “not allow a copyright claim by an 8 individual actor or actress in his or her performance contained within a motion picture,” 9 but instead that the copyright to the whole work is owned by the party who “fixed” the 10 work in a tangible medium. See Garcia v. Google, Inc., 786 F.3d 733, 741-44 (9th Cir. 11 2015); see also Community for Creative Non-Violence, 490 U.S. at 737 (“[T]he author is 12 the party who actually creates the work, that is, the person who translates an idea into a 13 fixed, tangible expression entitled to copyright protection.”). Here, there is no dispute 14 that LMNO (through its employees) was the party that “fixed” each episode of The 15 Little Couple in a tangible medium. 16 Not surprisingly, while disputes between producers and talent regarding backend 17 compensation are hardly uncommon, Plaintiff-Intervenors cite to no case in which any 18 court has ever awarded an actor an ownership interest in a copyright for a motion 19 picture based on a finding that the producer failed to pay (or made misrepresentations 20 concerning) the amount of backend compensation to which the actor was entitled. 21 Indeed, so novel (and unsupported by law) is Plaintiff-Intervenors’ theory, that LMNO 22 has been unable to identify any case in which such relief has ever even been sought. 23 Quite simply, LMNO owns the copyrights in each episode of The Little Couple. 24 And, even assuming a rescission of the 2008 Option Agreement, there is no legal 25 grounds on which Plaintiff-Intervenors could either claim or obtain an ownership 26 27 28 6 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 11 of 18 Page ID #:5941 1 interest in these copyrights. Thus, Plaintiff-Intervenors’ declaratory relief claim will fail 2 on the merits. 1 3 2. 4 Plaintiff-Intervenors are Not Entitled to Rescission Plaintiff-Intervenors’ declaratory relief claim will also fail on the merits because 5 Plaintiff-Intervenors are not entitled to rescission of the 2008 Option Agreement, and 6 rescission of the 2008 Option Agreement is the only basis upon which Plaintiff- 7 Intervenors argue that they can prevail on their claim for declaratory relief. 8 Plaintiff-Intervenors’ contend that they are entitled to rescission of the 2008 9 Option Agreement based on “fraud in the inducement.” (Application, 13:17-18.) A party 10 seeking to rescind a contract based on fraud must prove that they entered into the 11 contract in reliance on a material misrepresentation. See Cal. Civ. Code § 1689(b)(1) 12 (“A party to a contract may rescind the contract . . . [i]f the consent of the party 13 rescinding . . . was . . . obtained through . . . fraud . . . .”); Wood v. Kalbaugh, 39 Cal. 14 App. 3d 926, 932 (Cal. Ct. App. 1974) (“It is elementary that to justify the rescission of 15 a contract on the ground that there was a misrepresentation of a material fact, it must be 16 shown that the party seeking to rescind relied on the representation and that he would 17 not have entered into the contract without it.”). Plaintiff-Intervenors, however, have 18 submitted no evidence – and, indeed, do not even appear to argue – that they were 19 induced to enter the 2008 Option Agreement in reliance on any misrepresentation by 20 LMNO. To the contrary, Plaintiff-Intervenors contend only (and still without evidence) 21 that years after the parties entered the 2008 Option Agreement, LMNO sent Plaintiff- 22 Intervenors inaccurate participation statements concerning their backend compensation. 23 (See, e.g. Application, 5:17-21 [“Plaintiff-Intervenors contend that LMNO’s failure to 24 perform its material obligations under certain contracts – including, without limitation, 25 26 27 28 1 LMNO additionally notes that any claim to ownership regarding most of the episodes at issue would be barred by the three-year statute of limitations. See 17 U.S.C. § 507(b); Seven Arts Filmed Entertainment Ltd. v. Content Media Corp. PLC, 733 F.3d 1251, 1254-56 (9th Cir. 2013). 7 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 12 of 18 Page ID #:5942 1 its fraudulent reporting of costs and revenues derived from the Program and payable to 2 Plaintiff-Intervenors – has resulted in Plaintiff-Intervenors owning certain intellectual 3 property rights in and to the Programs.”]) LMNO’s alleged post-contract 4 misrepresentations cannot support rescission of a contract that was already made. See 5 Cal. Civ. Code § 1689(b)(1); Wood, 39 Cal. App. 3d at 932. 6 Plaintiff-Intervenors’ own interrogatory responses reinforce their inability to show 7 that they were induced to enter the 2008 Option Agreement based on any 8 misrepresentation by LMNO. In response to an interrogatory asking Plaintiff- 9 Intervenors to identify any false representation that they contend was made by LMNO, 10 they identify only purported misrepresentations made between November 2010 and 11 May 2016. (Mick Decl., Ex. B, Interrogatory No. 1.) The 2008 Option Agreement, as 12 Plaintiff-Intervenors allege, was executed over two years prior, in October 2008. 13 (Plaintiff-Intervenors’ First Amended Complaint, DK # 213, ¶ 42.) Consistently, when 14 asked to identify any action that they took (or refrained from taking) based on any 15 alleged misrepresentation by LMNO, Plaintiff-Intervenors responded that they 16 “continued to work on the Program,” and “desist[ed] from auditing the Program, as was 17 their contractual right pursuant to their agreements with LMNO.” (Mick Decl., Ex. B, 18 Interrogatory No. 2 [emphasis added].) Thus, consistent with their failure to adduce any 19 evidence of fraud in the inducement in support of their Application here, Plaintiff- 20 Intervenors’ own interrogatory responses establish that any alleged fraud occurred long 21 after the parties executed the 2008 Option Agreement. 22 Without any evidence that they were induced to enter the 2008 Option Agreement 23 based on misrepresentations by LMNO, Plaintiff-Intervenors have not shown that they 24 have any right to rescind the 2008 Option Agreement. Because, by their own argument, 25 Plaintiff-Intervenors’ declaratory relief claim is dependent on their obtaining rescission 26 of the 2008 Option Agreement, their failure to support an entitlement to rescission is 27 fatal to their argument that this claim will succeed on the merits. 28 8 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 13 of 18 Page ID #:5943 1 2 3 B. Plaintiff-Intervenors Do Not Establish A Likelihood that They Will Suffer Irreparable Harm “Those seeking injunctive relief must proffer evidence sufficient to establish a 4 likelihood of irreparable harm.” Herb Reed Enterprises, LLC v. Florida Entertainment 5 Management, Inc., 736 F.3d 1239, 1251 (9th Cir. 2013) (emphasis added); see also 6 Spark Industries, LLC v. Kretek International, Inc., 2014 WL 12600262 at * 3 (C.D.Cal. 7 July 29, 2014) (“[A] plaintiff must show – with evidence – that it is likely to suffer 8 irreparable harm absent an injunction.” [emphasis added].) Thus, it is an abuse of 9 discretion for a district court to grant an injunction where a plaintiff has not adduced 10 evidence sufficient to establish a likelihood of irreparable harm. Herb Reed, 736 F.3d at 11 1250. This requirement is explained by the Ninth Circuit in Herb Reed: 12 [Defendant] asserts that the district court abused its discretion by relying on 13 “unsupported and conclusory statements regarding harm [plaintiff] might 14 suffer.” We agree. 15 The district court’s analysis of irreparable harm is cursory and conclusory, 16 rather than being grounded in any evidence or showing offered by [plaintiff]. 17 . . . [T]he court’s pronouncements are grounded in platitudes rather than 18 evidence and relate neither to whether “irreparable injury is likely in the 19 absence of an injunction,” [citation omitted] nor whether legal remedies, 20 such as money damages, are inadequate in this case. It may be that [plaintiff] 21 could establish the likelihood of irreparable harm. But missing from this 22 record is any such evidence. 23 Id. (emphasis in original). 24 Here, Plaintiff-Intervenors have submitted no evidence in support of their 25 conclusory argument that they may suffer irreparable harm if their requested injunction 26 were denied. Indeed, like their argument on likelihood of success on the merits, their 27 argument on irreparable harm includes not a single citation to evidence. And the only 28 evidence submitted by Plaintiff-Intervenors in support of their Application – two sparse 9 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 14 of 18 Page ID #:5944 1 attorney declarations – include no reference to any purported harm that they may suffer 2 absent the requested injunction. Under Herb Reed, Plaintiff-Intervenors’ failure to 3 proffer any evidence to supporting a likelihood of irreparable harm requires the denial 4 of Plaintiff-Intervenors’ Application. 5 Moreover, Plaintiff-Intervenors’ argument for irreparable harm is both 6 nonsensical and speculative. Plaintiff-Intervenors argue that “[i]n the absence of a TRO, 7 Plaintiff-Intervenors are likely to suffer the irreparable harm of the loss of unique 8 contractual rights, the intellectual property rights to the television program.” 9 (Application, 15:13-15.) But, this makes no sense because Plaintiff-Intervenors seek to 10 rescind the contract, which (were they to be successful) would leave them with no 11 contractual rights. Plaintiff-Intervenors also fail to explain what contractual rights they 12 have in intellectual property associated with The Little Couple. 13 Plaintiff-Intervenors then speculate that a settlement agreement between LMNO 14 and Discovery would somehow impair Plaintiff-Intervenors’ undefined contractual 15 and/or intellectual property rights, and that money damages would somehow be 16 inadequate to compensate Plaintiff-Intervenors for their alleged harm. Even beyond 17 these speculative, conclusory contentions being unsupported by evidence, they are also 18 impossible to evaluate when Plaintiff-Intervenors have not identified which intellectual 19 property (or contractual) rights are at issue. 20 As Plaintiff-Intervenors themselves explain in their Application, the real claim at 21 issue here is Plaintiff-Intervenors’ contention that LMNO “misrepresented to Plaintiff- 22 Intervenors amounts of contingent compensation owed to them, to the tune of hundreds 23 of thousands of dollars fraudulently withheld from Plaintiff-Intervenors.” (Application, 24 8:3-8.) Plaintiff-Intervenors alleged harm for this alleged underpayment – which LMNO 25 contests – can adequately be satisfied through monetary damages. 26 27 There is no evidence – and no logical argument – to support a finding that there is a likelihood of irreparable harm if the requested injunction were denied. 28 10 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 15 of 18 Page ID #:5945 1 C. 2 3 Plaintiff-Intervenors Do Not Show That The Balance of Equities Tips in Their Favor Before issuing an injunction, “courts must balance the competing claims of injury 4 and must consider the effect one each party of the granting or withholding of the 5 requested relief.” Winter, 555 U.S. at 24. 6 As discussed above, Plaintiff-Intervenors have established no ownership interest 7 in the copyrights, or other intellectual property, in The Little Couple, and have adduced 8 no evidence that they will suffer harm absent their requested injunction. Nonetheless, 9 Plaintiff-Intervenors ask the Court to effectively prevent LMNO and Discovery from 10 entering into a settlement of this action by imposing a vague injunction that would 11 prohibit LMNO from “any transfer of intellectual property rights or ownership rights to 12 the television program The Little Couple.” (Application, 17:6-8.) Necessarily, any 13 settlement between LMNO and Discovery must address the parties’ respective rights 14 concerning the intellectual property interests in The Little Couple (along with the 15 15 other programs at issue in this litigation), and a vague prohibition on the settlement 16 agreement granting to Discovery any of the disputed rights (or rights that could arguable 17 belong to LMNO) would render a compromise settlement virtually impossible. (Mick 18 Decl., ¶ 2.) 19 The resulting burden on the parties and the Court would be severe. LMNO and 20 Discovery would be required to continue litigating a case that they have already agreed 21 in principle to settle, millions of dollars would be spent on attorneys’ fees, both LMNO 22 and Discovery would be put at risk of a judgment at trial substantially worse than their 23 agreed settlement, and the Court would be burdened by a lengthy, complex trial on the 24 merits between LMNO and Discovery (and then likely a second trial between LMNO 25 and the cable and satellite providers).2 26 27 28 2 Plaintiff-Intervenors’ complaints about purportedly being left out of a settlement are remarkable. For months, LMNO has attempted to engage Plaintiff-Intervenors’ counsel in settlement discussions, but they have shown no interest. On December 9, 11 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 16 of 18 Page ID #:5946 1 Thus, the actual, certain harm that the requested injunction would cause to 2 LMNO, Discovery, the cable and satellite providers, and the Court far outweighs any 3 unsupported, speculative harm claimed by Plaintiff-Intervenors. 4 D. 5 Plaintiff-Intervenors Requested Injunction is Against the Public Interest 6 In explaining that “[w]e are committed to the rule that the law favors and 7 encourages settlements,” the Ninth Circuit has recognized “an overrising public interest 8 in settling and quieting litigation.” U.S. v. McInnes, 556 F.2d 436, 441 (9th Cir. 1977); 9 see also Leppard v. Mukasey, 530 F.3d 862, 863 (9th Cir. 2008) (recognizing a “strong 10 judicial policy that favors settlements of disputes . . . .”); Ahern v. Central Pacific 11 Freight Lines, 846 F.2d 47, 48 (9th Cir. 1988) (“It is well recognized that settlement 12 agreements are judicially favored as a matter of sound public policy. Settlement 13 agreements conserve judicial time and limit expensive litigation.”). 14 Plaintiff-Intervenors’ requested injunction would impair this strong public policy 15 in favor of settlement by effectively preventing LMNO and Discovery from reaching a 16 settlement of this litigation. The result would be a substantial burden on the Court to 17 continue presiding over a complex, time-consuming litigation. 18 19 III. Plaintiff-Intervenors’ Requested Injunction Would Require Plaintiff- 20 Intervenors To Post A Substantial Bond 21 “The court may issue a preliminary injunction or a temporary restraining order 22 only if the movant gives security in an amount that the court considers proper to pay the 23 24 25 26 27 28 2017, LMNO finally decided to push the issue by sending Plaintiff-Intervenors a written settlement offer. Yet still, Plaintiff-Intervenors have provided no response. As PlaintiffIntervenors recognize, the real dispute in this case concerns “hundreds of thousands of dollars” that Plaintiff-Intervenors contend they are owed in backend compensation. With no right to attorneys’ fees, the costs to litigate this matter may exceed the amount at issue. This is a case that should settle – but Plaintiff-Intervenors must come to the table. 12 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 17 of 18 Page ID #:5947 1 costs and damages sustained by any party found to have been wrongfully enjoined or 2 restrained.” Fed. R. Civ. Proc. 65(c). 3 As discussed above, LMNO would suffer substantial harm from a wrongful 4 injunction that would effectively prevent LMNO and Discovery from settling their 5 respective claims. At a minimum, LMNO would be required to spend in excess of $1 6 million to litigate their claims against Discovery through trial. (Mick Decl., ¶ 3.) While 7 attorneys’ fees incurred to litigate an injunction itself are generally not recoverable, a 8 party may recover as damages attorneys’ fees incurred as a result of complying with a 9 wrongful injunction. See Nokia Corp. v. InterDigital, Inc., 645 F.3d 553, 560 (2d Cir. 10 2011) (permitting recovery of “fees and expenses . . . incurred in complying with the 11 injunction” “is consistent with the purpose of an injunction bond – to cover the costs 12 and damages incurred as a result of complying with a wrongful injunction.”). 13 In settling their respective claims, LMNO and Discovery also each eliminate the 14 risk of a potential multi-million dollar adverse trial judgment. With respect to LMNO, 15 Discover has alleged in this litigation over $30 million in purported damages. Thus, a 16 wrongful injunction preventing the parties from entering a settlement leaves LMNO 17 vulnerable to a substantial adverse verdict, which costs would flow from the wrongful 18 injunction. 19 Were Plaintiff-Intervenors’ requested injunction granted, therefore, Plaintiff- 20 Intervenors should be required to post a bond of at least $10 million in favor of LMNO. 21 A similar bond would also be appropriate in favor of Discovery. 22 23 24 25 IV. Conclusion For the foregoing reasons, LMNO respectfully requests that the Court deny Plaintiff-Intervenors’ Application in its entirety. 26 27 28 13 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Case 2:16-cv-04543-JAK-SK Document 230 Filed 01/08/18 Page 18 of 18 Page ID #:5948 1 Dated: January 8, 2018 BARNES & THORNBURG LLP 2 3 4 5 By /s/ Stephen R. Mick___ _ Stephen R. Mick Attorneys for Plaintiff and Counter-Defendants LMNO CABLE GROUP, INC. and LMNO ENTERTAINMENT GROUP, LLC 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 LMNO CABLE GROUP, INC. AND LMNO ENTERTAINMENT GROUP, LLC’S OPPOSITION TO PLAINTIFF-INTERVENORS’ EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER