United States District Court, D. Minnesota
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
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.
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. 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.
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.
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.
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.
Motion to Dismiss
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,
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.
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,
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).
Motion to Stay
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.
Motion to Compel and Amend
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)).
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).
Motions to Dismiss
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 ...