Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04805/USCOURTS-cand-3_14-cv-04805-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

STEPHANIE FORD STEWART,

Plaintiff,

v.

SCREEN GEMS-EMI MUSIC, INC., et al.,

Defendants.

Case No. 14-cv-04805-JSC 

ORDER RE: ADMINISTRATIVE 

RELIEF MOTION

Re: Dkt. No. 19

In this action against Defendants Screen Gems-EMI Music, Inc. (“SG-EMI”), EMI Ltd. 

(“EMI”), EMINA, and a number of Doe defendants (together “Defendants”), Plaintiff Stephanie 

Ford Stewart (“Plaintiff”) alleges that Defendants wrongfully withheld publishing royalties to the 

song “Daydream Believer,” which Plaintiff’s late husband, John Stewart (“Stewart”), wrote. (See

Dkt. No. 1-1.) The claim arises out of a 1967 songwriter’s agreement between Stewart and the 

predecessor-in-interest of SG-EMI. (See id. ¶¶ 18 & Ex. A.) Presently before the Court is 

Plaintiff’s motion for administrative relief under Civil Local Rule 7-11 for an order directing 

Defendants to file a revised Disclosure of Non-Party Interested Entities or Persons (“Corporate 

Disclosure”) in compliance with Federal Rule of Civil Procedure 7.1 and Civil Local Rule 3-15. 

(Dkt. No. 19.) Defendants oppose the motion, contending that the Corporate Disclosure they 

already filed complies with the applicable rules and that Plaintiff’s administrative motion is mere 

pretext for obtaining otherwise irrelevant discovery about Defendants’ parent corporations. (Dkt. 

No. 24.) As Defendants have neither complied with Federal Rule of Civil Procedure 7.1 nor Civil 

Local Rule 3.15, Plaintiff’s motion is granted.

DISCUSSION

Federal Rule of Civil Procedure 7.1 provides, in relevant part, that a corporate party must 

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United States District Court

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file a disclosure statement that “(1) identifies any parent corporation and any publicly held 

corporation owning 10% or more of its stock; or (2) states that there is no such corporation.” The 

Civil Local Rules in the Northern District of California, in turn, require corporate parties to 

“disclose any persons, associations of persons, firms, partnerships, corporations (including parent 

corporations), or other entities other than the parties themselves known by the party to have either: 

(i) a financial interest (of any kind) in the subject matter in controversy or in a party to the 

proceeding; or (ii) any other kind of interest that could be substantially affected by the outcome of 

the proceeding.” Civ. L.R. 3-15(b)(1). This Local Rule is designed to provide sufficient 

information for the presiding judge to make an informed determination regarding disqualification 

or recusal. See Civ. L.R. 3-15(a); see also, e.g., Best Odds Corp. v. iBus Media Ltd., No. 2:14-cv00932-RCJ-VCF, 2014 WL 5687730, at *3 (D. Nev. Nov. 4, 2014) (noting that the purpose of 

Rule 7.1 is to “enabl[e] the court to determine whether a conflict of interest exists”). 

Defendants’ Corporate Disclosure states in full:

Pursuant to Civil Local Rule 3-15 and Federal Rules of Civil 

Procedure, Rule 7.1, the undersigned certifies that the Defendants 

are all partially owned, indirect subsidiaries of Sony Corporation, a 

publicly-traded company organized under the laws of Japan. No 

publicly traded company other than Sony Corporation owns more 

than 10% of their stock.

(Dkt. No. 3.) Plaintiff contends that this Corporate Disclosure is inadequate because it fails to 

disclose the Defendants’ parent corporations or other corporations with a financial interest in 

Defendants. (Dkt. No. 19 at 3.) To support the existence of relevant parent corporations or 

otherwise interested entities, Plaintiff attaches emails from defense counsel that indicate defense 

counsel’s position that Defendant SG-EMI “is wholly owned by another corporation. In turn, that 

corporation is wholly owned by another corporation, and that chain of ownership continues for 

several levels.” (Dkt. No. 19-4 at 3.) The email continues on to note that Defendants had 

disclosed “the only publicly held corporation that owns more than a 10% interest in all of the more 

than one hundred music publishing companies that collectively comprise the EMI music 

publishing business[,]” and that other entities have only a “negligible financial interest in the 

outcome of this case” and therefore neither the federal nor the local rule requires their disclosure. 

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(Id. at 3-4.) 

Plaintiff argues that Defendants’ Disclosure Statement falls short because, although it 

disclosed the publicly held corporation owning 10% or more of its stock, it fails to disclose the

parent corporations. (Id. at 4.) Thus, Plaintiff seeks an order directing Defendants to disclose all 

parent corporations and other corporations with a financial interest in Defendants. (Id.) 

Defendants, for their part, malign Plaintiff’s purported effort to use Federal Rule 7.1 and Civil 

Local Rule 3-15, which they characterize as “procedural requirements designed for the Court’s 

edification,” as “swords to get the information he so ardently desires” through discovery. (Dkt. 

No. 24 at 4.) Defendants recount Plaintiff’s earlier efforts to seek information about Defendants’ 

parent corporations through jurisdictional discovery or informal means, and argue that a Corporate 

Disclosure is a similarly inappropriate vehicle to obtain this information. (Id.) Without 

responding to Plaintiff’s argument about the disjunctive nature of the Federal Rule—i.e., its 

requirement of mandatory disclosure of parent corporations aside from publicly held corporations 

owning more than 10% of stock—Defendants focus on the Local Rule’s emphasis on companies 

with a financial interest in the case, and contend that “[t]here is no company other than SG-EMI 

that has any financial interest in this case.” (Id. at 5.) 

A plain reading of the Federal Rule results in a simple directive: disclose “any parent 

corporation.” Fed. R. Civ. P. 7.1(a)(1). If there is no parent corporation, then the disclosure shall 

so state. Id. 7.1(a)(2). As Defendants’ disclosure neither identifies a parent corporation nor states 

that there is no such parent corporation it does not comply with Rule 7.1. Civil Local Rule 3-15 is 

also clear: the disclosure must identify other entities that have “a financial interest (of any kind) 

. . . in a party to the proceeding.” N.D. Cal. Civ. L.R. 3-15 (b)(1). Defendants admit that they did 

not do so.

While Plaintiff may be seeking to require Defendants to file a revised Disclosure Statement 

for reasons other than permitting this Court to determine if disqualification is required, a defendant 

does not have the discretion to decide whether to comply with Rule 7.1 and the Local Rule. The 

language of the Rules is mandatory. If a defendant could decide for itself whether to comply then 

the purpose of the Rules would be lost. CRS Recovery, Inc. v. Laxton, No. C 06-7093 CW, 2008 

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WL 4408001, *1 (N.D. Cal. Sept. 26, 2008), is not to the contrary. There the court held that the 

local rule did not require the disclosure urged by the defendants. Moreover, the question was not 

whether the plaintiff should have to comply with the local rule but, rather, whether plaintiff’s 

counsel should be disqualified for failing to do so. All that is sought here is to require Defendants

to comply with the same Rules with which every litigant that appears in the Northern District of 

California has to comply. As there is no good reason for creating an exception here, Plaintiff’s 

Administrative Motion is granted.

CONCLUSION

For the reasons explained above, Defendants shall file a Disclosure Statement that 

complies with Federal Rules of Civil Procedure 7.1 and Civil Local Rule 3-15 on or before 

January 21, 2015.

This Order disposes of Docket No. 19.

IT IS SO ORDERED.

Dated: January 13, 2015

______________________________________

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

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