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Live Face on Web, LLC v. Twelfth Street Dental Office, P.A.

United States District Court, D. Minnesota

April 6, 2018

Live Face on Web, LLC, Plaintiff,
v.
Twelfth Street Dental Office, P.A., Defendant. Live Face on Web, LLC, Plaintiff,
v.
River's Edge Dental Clinic, PLLC, et al., Defendant.

         Vlad Tinovsky, for Live Face on Web, LLC. Kristine Boylan and Kathryn Short, for Twelfth Street Dental and River's Edge Dental Clinic. David Davenport, for Solution21, Inc.

          ORDER AND REPORT & RECOMMENDATION

          FRANKLIN L. NOEL UNITED STATES MAGISTRATE JUDGE

         THIS MATTER came before the undersigned United States Magistrate Judge on Third-Party Defendant Solution21, Inc.'s motions to dismiss (ECF No. 28, 17-cv-1941; ECF No. 20, 17-cv-1950) and to stay discovery (ECF No. 42, 17-cv-1941; ECF No. 34, 17-cv-1950), and Defendant Twelfth Street Dental Office, P.A.'s motion to compel and to amend (ECF No. 53, 17-cv-1941). The motions to dismiss were referred to the undersigned for Report and Recommendation pursuant to 28 U.S.C. § 636 and Local Rule 72.1. See Orders, ECF No. 34, 17-cv-1941; ECF No. 29, 17-cv- 1950. For the reasons set forth below, this Court recommends that Third-Party Defendant Solution21, Inc.'s motions to dismiss (ECF No. 28, 17-cv-1941; ECF No. 20, 17-cv-1950) be DENIED and orders that its motions to stay discovery (ECF No. 42, 17-cv-1941; ECF No. 34, 17-cv-1950) are DENIED, and Defendant Twelfth Street Dental Office P.A.'s motion to compel and to amend (ECF No. 53, 17-cv-1941) is GRANTED in part and DENIED in part.

         I. BACKGROUND

         On June 6, 2017, Plaintiff Live Face on Web, LLC (“Live Face”) commenced three separate actions, raising one copyright infringement count under 17 U.S.C. § 501 in each Complaint, seeking identical relief: actual damages, profit disgorgement, attorney's fees and costs, and a permanent injunction.[1] See generally Compl., ECF No. 1; Compl., ECF No. 1, No. 17-cv-1950 (DWF/FLN) (the “River's Edge Action”); Compl., ECF No. 1, No. 17-cv-1948 (JRT/TNL) (the “Cedar Sign Action”). In each case, Live Face alleges that Defendant's websites infringe its copyrighted, web spokesperson software code. See generally Id. In the instant Actions, Defendants have filed a Third-Party Complaint against Solution21, Inc., (“Solution 21") seeking contribution and indemnification, alleging that Solution 21 was responsible for creating and developing the infringing websites. See generally Third-Party Compl., ECF No. 10; Third-Party Compl., ECF No. 11, 17-cv-1950. On August 17, 2017, this Court consolidated the instant Actions for pretrial purposes. See ECF No. 21. On September 13, 2017, the Cedar Sign Action was dismissed pursuant to Federal Rule of Civil Procedure 41(a)(1). See Order and Judgment, ECF Nos. 15, 16, 17-cv-1948. On October 25, 2017, Defendant Twelfth Street Dental Office, P.A., (“Twelfth Street”) served interrogatories and requests for document production on Solution 21 and Live Face. See generally ECF No. 57.

         Solution 21 now moves to dismiss the Third-Party Complaints. See ECF No. 28; ECF No. 20, 17-cv-1950. Solution 21 argues that in contracting with it, Twelfth Street and Defendant River's Edge Dental, PLLC (“River's Edge”) consented to a forum selection clause, which requires “that exclusive jurisdiction for any dispute with Solution21, Inc. . . . or in any way relating to your use of the Solution21, Inc. . . . Websites, resides in the courts of the County of Orange, State of California.” ECF No. 31 at 5. Alternatively, Solution21 argues that the Third-Party Complaints must be dismissed because they fail to state a plausible claim under Federal Rule of Civil Procedure 12(b)(6) and because the common law contribution and indemnification claims brought by Twelfth Street and River's Edge are preempted by the Federal Copyright Act. See Id. at 6, 10. In addition, Solution 21 avers that discovery should be stayed in the instant Actions given that Twelfth Street and River's Edge's Third-Party Complaints are deficient under Federal Rule of Civil Procedure 12(b)(6). See ECF No. 42.

         Twelfth Street and River's Edge counter that Solution 21's forum selection clause should not be considered at the motion to dismiss stage because it is not corroborated by, nor attached to, the pleadings. See ECF No. 39 at 9; ECF No. 31 at 9, 17-cv-1950. Twelfth Street and River's Edge further argue that they have sufficiently stated a plausible claim for contribution and indemnification, and their common law contribution and indemnification claims are not preempted by the Federal Copyright Act. See Id. at 3; see also ECF No. 31 at 3, 17-cv-1950. To that end, Twelfth Street and River's Edge assert that discovery should remain open. See ECF No. 49; ECF No. 41, 17-cv-1950.

         Conversely, Twelfth Street moves to compel discovery from both Solution 21 and Live Face, and to modify the Scheduling Order (ECF No. 35). See ECF No. 53. As to the motion to compel, Twelfth Street argues that Solution 21 has not provided any discovery to its served October 25, 2017, interrogatories and requests for document production, and although Live Face has provided responsive discovery, it “mostly provided boilerplate objections instead of meaningful responses.” ECF No. 57 at 9. Twelfth Street also seeks a fifteen month extension of the Scheduling Order deadlines. See ECF No. 59. Solution 21 counters that it is not required to respond to Twelfth Street's October 25, 2017, discovery requests given that its Third-Party Complaint fails to state a plausible claim. See generally ECF No. 60. Live Face agrees to a ninety-day Scheduling Order extension, but opposes Twelfth Street's requested fifteen month extension, and further maintains that its discovery production satisfies the Federal Rules of Civil Procedure. See generally ECF No. 62.

         II. LEGAL STANDARD

         A. Motion to Dismiss

         In analyzing the adequacy of a complaint, the Court must construe the complaint liberally and afford the plaintiff all reasonable inferences to be drawn from those facts. See Turner v. Holbrook, 278 F.3d 754, 757 (8th Cir. 2002). For the purpose of a motion to dismiss, facts in the complaint are assumed to be true. See In re Navarre Corp. Sec. Litig., 299 F.3d 735, 738 (8th Cir. 2002). Nevertheless, dismissal under Federal Rule of Civil Procedure 12(b)(6) serves to eliminate actions that are fatally flawed in their legal premises and designed to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity. See Neitzke v. Williams, 490 U.S. 319, 326-27 (1989).

         To avoid dismissal, a complaint must allege facts sufficient to state a claim as a matter of law and may not merely state legal conclusions. See Springdale Educ. Ass'n v. Springdale Sch. Dist., 133 F.3d 649, 651 (8th Cir. 1998). A plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must contain enough facts to state a claim for relief that is “plausible on its face, ” and a claim has facial plausibility only when the plaintiff pleads factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged. Id. at 570; see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The plausibility standard is not akin to a “probability requirement, ” but it calls for more than a sheer possibility that a defendant has acted unlawfully. Iqbal, 556 U.S. at 678.

         “Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a short and plain statement of the claim showing that the pleader is entitled to relief.” Id. (internal citation omitted). “The pleading standard Rule 8 announces does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (internal citations omitted). “[A] complaint [cannot] suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. (quoting Twombly, 550 U.S. at 557).

         B. Motion to Stay

         Courts have inherent power to stay proceedings of an action in order to control their docket, conserve judicial resources, and provide just determination of pending cases. See Kemp v. Tyson Seafood Grp., Inc., 19 F.Supp.2d 961, 964 (D. Minn. 1998) (citing Landis v. N. Am. Co., 299 U.S. 248 (1936)). A decision to stay proceedings is within the court's broad discretion. See Clinton v. Jones, 520 U.S. 681, 706 (1997). Generally, an applicant for a stay has the burden of showing specific hardship or inequity if the case is allowed to move forward. See In re Hanson, No. 13-2991, 2013 WL 6571594 (D. Minn. Dec. 13, 2013); see also Landis, 299 U.S. at 255. “[A] court may stay discovery for good cause shown.” TE Connectivity Networks, Inc. v. All Sys. Broadband, Inc., 13-CV-1356 (ADM/FLN), 2013 WL 4487505 *2 (D. Minn. Aug. 20, 2013). “The mere filing of a motion to dismiss the complaint does not constitute ‘good cause' for the issuance of a discovery stay.” Id. (quoting Chesney v. Valley Stream Union Free Sch. Dist. No. 24, 236 F.R.D. 113, 115 (E.D.N.Y. 2006)). In exercising its authority, a court should construe and administer discovery “to secure [a] just, speedy, and inexpensive determination.” Fed.R.Civ.P. 1.

         C. Motion to Compel and Amend

         The Federal Rules of Civil Procedure permit discovery “regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case . . . .” Fed.R.Civ.P. 26(b)(1). “The threshold requirement of discoverability is whether the information sought is ‘relevant to the subject matter involved in the pending action.'” Archer Daniels Midland Co. v. Aon Risk Servs., Inc., 187 F.R.D. 578, 589 (D. Minn. 1999) (quoting Shelton v. Am. Motors, 805 F.2d 1323, 1326 (8th Cir. 1986)). “The standard, therefore, is widely recognized as one that is necessarily broad in its scope, in order to allow the parties essentially equal access to the operative facts.” Id. (citing Hofer v. Mack Trucks, Inc., 981 F.2d 377, 382 (8th Cir.1992)).

         “On notice to other parties and all affected persons, a party may move for an order compelling disclosure or discovery.” Fed.R.Civ.P. 37(b)(1). Federal Rule of Civil Procedure 37(a)(3)(B)(iii)-(iv), provides that a court may order disclosure if a party fails to disclose information required under Federal Rules of Civil Procedure 33 (concerning interrogatories) and 34 (concerning document requests, ESI, and other tangible things), respectively. Under Federal Rule of Civil Procedure 37(a)(4) an “evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer, or respond.” “A schedule may be modified only for good cause and with the judge's consent.” Fed.R.Civ.P. 16(b)(4). “A party that moves to modify a scheduling order must: (1) establish good cause for the proposed modification: and (2) explain the proposed modification's effect on any deadlines.” L. R. D. Minn. 16.3(b). If a party moves to modify a scheduling order's discovery deadlines, the party must explain why not all discovery has been completed. See L. R. D. Minn. 16(b)(c)(4).

         III. LEGAL ANALYSIS

         A. Motions to Dismiss

         Solution 21 first argues that its terms and conditions of use, which it alleges that Twelfth Street and River's Edge consented to, includes a forum selection clause providing that disputes relating to its website design business must be litigated in Orange County, California. See ECF No. 31 at 5; see also ECF No. 32, Ex. A at 5. However, assuming without deciding that Solution 21's purported terms and conditions of use and concomitant forum selection clause can be considered at the motion to dismiss stage, it is not certain to this Court that Twelfth Street and River's Edge actually agreed to the terms and conditions of use. Specifically, the terms and conditions of use document that Solution 21 produced in support of its motions to dismiss fails to in any way reference either Twelfth Street or River's Edge, or demonstrate their consent. At the December 18, 2017, hearing, Solution 21 represented that all of its clients must agree to ...


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