personalized media communications , llc v. amazon.com inc., c.a. no. 13-1608-rga (d. del. aug. 20,...

8/20/2019 Personalized Media Communications , LLC v. Amazon.com Inc., C.A. No. 13-1608-RGA (D. Del. Aug. 20, 2015)

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

PERSONALIZED MEDIA

COMMUNICATIONS LLC,

Plaintiff,

C.A. No. 13-1608-RGA

v.

AMAZON.COM INC., eta/.

Defendants.

SPECIAL MASTER OPINION RE:

PLAINTIFF S APPLICATION FOR SANCTIONS

I conducted a Special Master hearing in this case on February 9 2015, at which time I

entertained the then-latest iteration o the plaintiffs request that Amazon be ordered to produce

much more

o

its source code than it had reluctantly provided beforehand. The relative

positions o the parties

at

the time o my hearing had not effectively changed since their hearing

last October with Judge Andrews, whose apparent frustration with their relative mutual

intransigence

led

to my assignment as Special Master. Following the hearing, I issued an Order

on February 18 2015 by which I directed the litigants to try the Rule 30(b)(6) deposition route.

t

was my proposed solution to,

as

I put it then, break open the logjam, to see i information

learned

at

those depositions would narrow the scope o the plaintiffs search for source code and

consequently induce the defendants

to

produce information because their resistance based on

relevance and burden might be reasonably overcome.

Consistent with my February 18 2015 Order, the parties undertook to schedule

depositions o five Amazon source code engineers. However, only two depositions actually

occurred; others were postponed for various reasons. One deposition was canceled when the


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defendants produced one

o

the source code packages, relating to recommendations service ,

that the plaintiff claims it had long been seeking. Then, the plaintiff moved to stay this litigation

pending resolution

o

inter partes review.

The PTO's acceptance o

inter partes

review o the subject patents interrupted

scheduling. The motion to stay, which was resisted in pati by Amazon, was to have been heard

by Judge Andrews this month. However, on August 10, 2015, the Couti granted the defendants'

pending motion for judgment on the pleadings, effectively ending the case. Nevertheless, I retain

the authority to rule on plaintiffs motion for sanctions.

See e.g.

FRCP 54( d)[ contemplating

motions for fees post-judgment] and FRCP 54(d)(2)(D) [post-judgment, court may refer

attorneys' fees value issue to Special Master].

The plaintiff raised two distinct applications for relief: (i) it wanted sanctions against

Amazon for discovery misconduct, and (ii) it wanted me to once more consider ordering

Amazon to finally deliver source code packages which had still not been produced despite

plaintiffs relentless efforts. In addition to receiving the parties' initial submissions with respect

to these applications, I conducted a telephonic hearing on July 8 2015. Subsequently, the

parties provided additional written argument and I am now ready to advise them o my rulings.

I will respond first to the request for an order requiring Amazon to produce additional

source code. Before Judge Andrews' recent order granting judgment on the pleadings, I would

have been hard-pressed to reconcile plaintiffs repeated request for additional source code with

the plaintiffs own then-pending motion to stay this litigation. t would have been fairly

presumptuous o me to order production o source code that might never be used in this

litigation. However, any possible presumptuousness has been (dare I say it this political season)

trumped by the judgment in defendants' favor. For purposes o Rule 34 issues and concomitant

2


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Rule 37 enforcement features, this case is closed. Consequently, I have

no

authority to order

source code production, even if I had been inclined to do so, or

to

order sanctions related to

previous failures to produce source code,

1

and thus plaintiffs application for source code

production is denied. IT

IS

SO ORDERED.

With respect to sanctions for past discovery misconduct, the issue revolves around the

timing

of

recommendations service source code production. Plaintiff contends that, by waiting

until the evening before the deposition of the recommendations service-informed Amazon

engineer

to

produce that source code in exchange for eliminating the deposition, the defendants'

actions were sanctionable. Plaintiff characterizes Amazon's conduct in March as discovery

abuses manifested by an exploitation and manipulation of the discovery process, which

behavior was prejudicial and costly. Plaintiff believes it should be compensated for Amazon's

prior abuses , and cites Rule 37(a)(5)

2

as the basis for its application for sanctions. Its

application to Judge Andrews this past year was, effectively, a motion to compel. Rule

37(a)(5)(A) is available under circumstances where a motion to compel is granted or if the

requested discovery is provided after a motion is filed. No motion to compel with respect to the

production

of

recommendations service source code has ever been granted. Consequently, it is

That

is,

other than

recommendations

service

source code, which is the subject

o

the remainder

o

this opinion.

Plaintiff asked me to impose collateral sanctions, e.g., expenses related to reviewing the incomplete source code to

identify missing code packages and files, attorney's

fees

fees paid

to

the Special Master, and costs and expenses

associated with source code depositions and hearings. But, except possibly with respect

to

the reconunendations

service source code issue which is addressed below

no

such expenses are now

at

issue since

the

production o

source code per se is moot. The pat1ies' positions relating to relevancy of any source code package other than

recommendations

service, positions on

which

I

requested post-hearing

submissions,

are similarly moot.

2

FRCP 37(a)(5)(A):

If

the Motion is Granted ( or Discovel) is Provided After Filing). lf the motion is

granted or if

the ... requested discovery

is

provided after the motion was

filed the

court must, after giving an

opportunity to be heard, require the party .. whose conduct necessitated the motion, the party or attorney advising

that

conduct,

or

both

to

pay the movant s

reasonable expenses incurred in making

the motion, including attorney s

f e e s ~ ~

3


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only with respect to the second prong

of

Rule 37(a)(5)(A) that plaintiffs application for

sanctions can

be

considered.

Plaintiff claims that it initially applied to Judge Andrews for relief relating to

recommendations service source code on September 30, 2014. Amazon contends that plaintiffs

application was never sufficiently defined then; that only the very broadest scope of production

was contemplated. Defendants do agree that they produced the recommendations service code

package many months later in April 2015. Amazon, however, asserts that its delivery of the

recommendation service source code earlier this year was not in response

to

plaintiffs

September 2014 application

to

the Court. Rather, it explains the code delivery as a compromise

quidpr quo for the elimination of plaintiffs Rule 30(b )(6) deposition

of

one of its source code

engineers. Moreover, Amazon takes the position that

it did not,

by

producing that code

package, withdraw or undermine its assessment that what was produced was not relevant.

Under those circumstances, then, the issue before me is reduced to whether, under Rule

37(a)(5)(A)(ii), the timing of Amazon's recommendations service source code production was

substantially justified?

3

If so, sanctions are inappropriate.

On this critical issue, plaintiff contends that the produced code was relevant. Certainly

at least, plaintiffs point has been all along that it is improper for its adversary to unilaterally

characterize various segments of its source code, including recommendations service, as

irrelevant and thus non-discoverable.

Plaintiff correctly observes that, ultimately, such a determination is not for a party to

make. Smith

v

Logansport Comm. School Corp.

39

F.R.D. 637, 648 (N.D. Ind. 1991) [ex parte

3

Rule 37(a)(5)(A)(ii): But the com must not order this payment if: (ii) the opposing party's ... response, or

objection was substantially justified.


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determinations

of

relevancy not permitted];

Alexander v FBI

186 F.R.D. 54, 59 (D.D.C. 1998).

4

Plaintiff believes that documents and items such

as

source code should generally be discoverable

if

their production will lead to the discovery

of

admissible evidence. FRCP 26(b

1

).

5

In

response to FRCP 26(

c)

concerns, plaintiff posits that the parties' Protective Order serves to

protect Amazon from the revelation

of

proprietary information

to

anyone other than those

individuals specifically authorized by the Order to see it. In that sense, then, according to the

plaintiff there should have been nothing preventing the defendants from producing the various

source code segments sought through discovery. Determinations

of

relevancy would occur,

if

necessary, later.

Amazon,

on

the other hand, does not concede that production

of

the recommendations

service source code package was inevitable. t stands by the proposition that, not only did it

have no obligation to produce irrelevant code

6

,

but its production of that code, just before the

deposition

of

its source code engineer would be exploring that topic, was anything but a

concession of relevancy.

Here, the defendants claim that they produced the recommendations service package

when they did because (1) it was a single source code package, and (2) unlike PMC's earlier

demands, it could be located and collected without requiring countless hours of engineering

time. Yet, Amazon's justification for withholding what was apparently an easily identifiable,

located and collected source code package was and is that the plaintiff always wanted too much;

4

The famous Filegate case that constituted one

of

many court-centered distractions during the William

J.

Clinton

presidency.

5

Rule 26(b) I) allows discovety regarding non-privileged matter that is relevant to any party's claim,

6

Indeed, the defendants explain that in addition to relevancy, they opposed the prodnction of the recommendations

servi e

source

code on overbreadth

and

burdensomeness

grounds

5


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that it never realistically reduced its overbroad sweep

of

the material it sought. That position

begs the question, though, why a request for production that might have been overbroad and

burdensome for other source code packages did not induce production of reconunendations

service source code under circumstances

of

easy access and collection?

Amazon answers the question as follows: Until they asked the plaintiff for a delineation

of

specific Rule 30(b)(6) topics prior

to

the depositions, the plaintiff had not designated with any

specificity the topic(s) regarding the recommendations functionality, a pre-deposition exercise

that I ordered on February

18.

7

When the plaintiff finally specified the Recommendations

Server package

as

being the ultimate object of its discovery effort relating to the

recommendations feature of Amazon's website, Amazon was then in a position to refine its

search and produce the single-package subject source code. This explanation, however, does not

completely comport with the pre-revelation status of the reconunendations service source code

package as I understood t on February 9 2015. As plaintiff points out, Amazon knew what code

plaintiff was looking for. Specifically, there was a dialogue between defense counsel and me on

February 9 during which counsel conceded that he (and thus his client) knew exactly what

plaintiff meant

by

referring, in an exhibit

to

its January 23, 2015 pre-hearing submission

to

me,

to Recommendations Service.

8

Indeed, defense counsel also acknowledged that Amazon could

produce the package identified in the exhibit,

9

and the production could occur today .

10

If my analysis took me no further, I think that there would be a plausible basis to find

7

Special Master Order, Febmary

18

2015, p.

3 ~ 2 :

The Amazon witness being deposed must be prepared to

testify on the following topics:

c.

The identity

of

the source code that implements functionality that PMC contends

is

missing fi:om Amazon s source code production. To facilitate Amazon s

preparation

o its witness(es), PMC shall

identity, at least four (4) days prior

to

the deposition, the elements

of

the asserted claims for which

it

contends

it

does not have relevant source

code.

8

2/9115 hearing transcript, p. 37, lines 5-14.

9

2/9/15 hearing transcript, pp. 39{1ine24}-40{1ines 1-9}.

10

2/9/15 hearing transcript, p.42, lines 9-11.

6


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sanctionable recalcitrance. However, by putting this issue in context, the existence o substantial

justification becomes clearer. Later on in the transcript o the hearing

11

, defense counsel tried to

put the matter in a broader frame o reference. That context reflected both prior source code

production (which the defendants believed provided sufficient information to allow plaintiff to

try to confirm its infringement contentions) and, as well, a reasonable framework within which

the plaintiff,

by

taking the depositions o knowledgeable Amazon source code engineers

(including one or more with recommendations service background), could discover all it needed

to

know. Significantly, defendants offer

o

a source code engineer s deposition had been made

months earlier,

at

the October 2, 2014 discovery dispute hearing with the Court. l 0/2/14 hearing

transcript, pp.22-24.

Certainly, I thought that the availability o source code engineers depositions occurring

fairly promptly might do what defense counsel predicted, so I adopted that suggestion in my

February 18 Order. In other words, for purposes

o

the application that I am presently

considering, allowing the mandated depositions to take place within a few weeks could possibly

generate a resolution to the previously-intractable positions

o

the litigants. At least with respect

to

recommendations service, that process worked. That there was a further delay o a few weeks

between the February 9 concession o an immediately-available package and Amazon s qui pro

quo arrangement in lieu

o

the recommendations service engineer s deposition, does not by itself

lead me to impose a sanction, especially in light o plaintiffs previous decision not to take any

source code engineers depositions.

Previously, the litigants had been at loggerheads over what should be produced in

discovery, the bookends to the dynamic being plaintiffs insistence on getting as much

o

the

11

2/9/15

hearing transcript, p

46,

Jines

2-17.

7


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defendants' source code as possible on one end, and defendants' determination to only produce

relevant code on the other. Both sides then made concessions which resulted in the delivery

of

the Recommendations Server package .

12

Thus, the plaintiff accomplished what I had hoped

would occur when I ordered the Amazon engineers' depositions. At least for recommendations

service, it got what it really wanted all along.

Whether plaintiff failed to comply with my February 18 2015 order in terms of timely

specifying topics for Rule 30(b)(6) inquiry, or whether Amazon knew enough to agree to

production in January or February instead

of

March, are ultimately not the fulcrum events for

this opinion. Rather, when put into the perspective

of

a late arriving but prospectively evolving

approach to discovery of source code, I find that Amazon's production of the recommendation

service source code package in April 2015 was substantially justified. Accordingly, the

sanctions potential

of

Rule 37(a)(5)(A)

is

not worthy

of

invocation under these circumstances.

Plaintiff's application for discovery abuse sanctions is denied. IT IS SO ORDERED.

Special Master

Dated: August 20, 2015

12

t is difficult to reconcile Amazon s position, that it wasn t until the evening before the source code engineer s

anticipated deposition

in

March that it finally understood exactly what plaintiff was seeking, with this quoted

specific reference on plaintiff's January 23, 2015 pre-hearing submission exhibit. On the other hand, plaintiffs

assertion that all t wanted in terms o recommendations service source code is

reflected

on the exhibit presented

at

the February 9 hearing, is belied by the actual language on the exhibit: For example .. [3 Internet sites

listed)

...

Other services may also be missing. (emphasis added)

8

personalized media communications , llc v. amazon.com inc., c.a. no. 13-1608-rga (d. del. aug. 20,...

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