Free MOTION to Relate Case - District Court of California - California

Case 3:07-cv-02769-JL

Document 73

Filed 07/30/2007

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HARVEY SISKIND LLP D. PETER HARVEY (SBN 55712) e-mail: [email protected] SETH I. APPEL (SBN 233421) e-mail: [email protected] Four Embarcadero Center, 39th Floor San Francisco, California 94111 Telephone: (415) 354-0100 Facsimile: (415) 391-7124 Attorneys for Defendants and Counterclaimants in Case No. C 07-2769 JL, SEOK KI KIM and STV ASIA, LTD. IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION STV ASIA LTD., Plaintiff, v. PRN CORPORATION, PREMIER RETAIL NETWORKS, INC., BEST BUY CO., INC., BEST BUY STORES L.P., CIRCUIT CITY STORES INC., CIRCUIT CITY STORES WEST COAST, INC., COSTCO WHOLESALE CORPORATION, WAKEFERN FOOD CORPORATION d/b/a SHOPRITE, and ALBERTSONS, LLC., Defendants. ADMINISTRATIVE MOTION TO CONSIDER WHETHER CASES SHOULD BE RELATED Case No.: C 06-1664 JCS Possible Related Case No.: C 07-2769 JL

Pursuant to Judge Larson's Referral and Briefing Order of July 10, 2007 and Civil Local Rule 3-12, Seok Ki Kim ("Kim") and STV Asia, Ltd. ("STV") hereby move the Court to consider whether this case (the "PRN case") is related to Case No. C 07-2769 JL, Nemirofsky v. Kim, et al., removed to this Court on May 25, 2007 (the "Nemirofsky case"). Kim and STV respectfully submit that the two cases are not related. They involve substantially different parties and entirely different issues.

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ARGUMENT Local Rule 3-12(a) provides that an action is related to another action when: (1) The actions concern substantially the same parties, property, transaction or event; and (2) It appears likely that there will be an unduly burdensome duplication of labor and expense or conflicting results if the cases are conducted before different Judges. Here, the relationship between the two cases does not satisfy either of these requirements. 1. The Present Litigation Does Not Concern Substantially the Same Parties, Property, Transaction or Event as the Earlier Litigation. In the PRN case, STV asserted patent infringement claims against its competitor Premier Retail Network and Premier's owner/operator, PRN Corporation (collectively, "PRN"). STV alleged that these entities manufactured and sold an "in-store television network" that infringed STV's patents. STV also asserted patent infringement claims against some of PRN's customers, namely Best Buy Company, Inc.; Best Buy Stores L.P.; Circuit City Stores, Inc., Circuit City Stores West Coast, Inc., Costco Wholesale Corporation; Wakefern Food Corporation d/b/a Shoprite; and Albertsons LLC, for their role in the alleged infringement. On May 15, 2007, the parties to the PRN case entered into a settlement agreement whereby PRN paid money to STV. At that time, STV also assigned the patents at issue to PRN for additional money. The PRN case was then dismissed per the parties' stipulation. Plaintiff Frank Nemirofsky ("Nemirofsky") filed the Nemirofsky case on May 16, 2007, as San Francisco Superior Court Civil Case No. 07-463428. Defendants removed it to this Court on May 25, 2007. Nemirofsky asserts breach of contract and related claims against Kim and STV. Nemirofsky alleges that he is entitled to 50% of the payments PRN made to STV in connection with the settlement of the PRN case. Nemirofsky asserts that Kim and STV agreed to amend a contract he had entered into with them which originally entitled him to 15% of the net proceeds of the settlement of the PRN case. Kim and STV deny that there was any such amendment. They also have

counterclaimed for abuse of process because Nemirofsky, when he filed the case, intentionally obtained state court temporary protective orders ("TPOs") freezing 100% of the money paid by PRN.
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Kim and STV allege that he did so, not because he believed in good faith that he was entitled to that money. Rather Nemirofsky, knowing he was not entitled to even 50% of the PRN case's net settlement proceeds, intentionally and in bad faith froze 100% of STV's funds in order to force a favorable settlement. Of the ten parties to the PRN case, only one of them, STV, is a party to the Nemirofsky case. The property involved in the PRN case was intellectual property, specifically two patents. The property involved in the Nemirofsky case is money. The "transaction or event" involved in the PRN case was the manufacture, use, and sale of allegedly infringing products. The "transaction or event" involved in the Nemirofsky case is the parties' agreement concerning the net proceeds of the settlement of a lawsuit, and the obligations flowing therefrom. In short, comparing the two cases, there is almost no overlap in parties, property, transaction or event. 2. No Unduly Burdensome Duplication of Labor and Expense Will Occur if the Nemirofsky Case is Conducted Before a Different Judge From the PRN case. Few of the issues pertinent to the PRN case are relevant to the Nemirofsky case. The key matters in dispute in the former case were apparently the validity of STV's patents; whether the technology offered by PRN infringed STV's patents; and PRN's customers' role in the alleged infringement. None of these matters has any bearing on the present litigation. The Nemirofsky case is a straightforward contract dispute. Both parties acknowledge that they entered into an agreement whereby Kim and STV agreed to pay Nemirofsky 15% of the net settlement proceeds from the PRN litigation. Nemirofsky claims that the parties later modified this agreement such that he is entitled to 50% of the net settlement proceeds. STV and Kim deny the agreement was modified. The parties also dispute whether PRN's payment for STV's assignment of its patents constituted "settlement proceeds." The key matters in dispute in the Nemirofsky case are whether the parties ever modified their agreement; whether PRN's payment for the patents constituted settlement proceeds; and whether Nemirofsky intentionally obtained excessive state court TPOs for an improper purpose.
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Because the issues in the two cases are substantially different, hardly any of the Court's efforts concerning the PRN case will duplicate the efforts undertaken by the Court in connection with the Nemirofsky case. It is worth noting that STV, the one party common to both cases, retained new counsel for the Nemirofsky case.1 Thus, long before Judge Larson's Referral and Briefing Order, STV determined that its interests could be best represented by attorneys who knew little about the earlier litigation without a significant duplication of labor and expense. 3. Conducting the Nemirofsky Case Before a Different Judge From the PRN Case Will Not Cause Conflicting Results. Because they involve such different issues, it is hard to imagine a result in the Nemirofsky case that would be inconsistent with the result in the PRN case. Indeed, all parties to the Nemirofsky case accept the outcome of the PRN case, i.e., that it was settled and dismissed per the parties' stipulation. The question is how the net settlement proceeds of the PRN case, and moneys paid for the assignment of the STV Asia patents, should be distributed. CONCLUSION Apart from the happenstance that the parties in the Nemirofsky case dispute their entitlement to net settlement proceeds from the PRN case, there is substantively little relationship between the two matters. For the reasons stated, the Court should conclude that the PRN case and the Nemirofsky case are unrelated, and that the latter case can proceed before the Honorable James Larson. Dated: July 30, 2007 Respectfully submitted, HARVEY SISKIND LLP By: /s/ Seth I. Appel

Attorneys for Defendants and Counterclaimants in Case No. C 07 2769 JL, SEOK KI KIM and STV ASIA, LTD.
1

Harvey Siskind LLP, STV's counsel in the Nemirofsky case, appeared in the PRN case on May 21, 2007, the day before it was dismissed, for the sole purpose of filing the stipulation of dismissal and joint motion to vacate claim construction order.
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