Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-00711/USCOURTS-cand-3_06-cv-00711-18/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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United States District Court

For the Northern District of California

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Docket No. 193

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

NETBULA, LLC,

 Plaintiff,

 v.

BINDVIEW DEVELOPMENT

CORPORATION, et al.,

Defendants.

 /

No. C06-0711 MJJ (EMC)

ORDER ADOPTING MAGISTRATE

JUDGE’S JUNE 11, 2007 ORDER ON

PLAINTIFF’S MOTION FOR

SANCTIONS 

INTRODUCTION

Before the Court is Plaintiff Netbula, LLC’s (“Plaintiff”) Objection to the Magistrate’s Order

Denying Plaintiff’s Motion For Sanctions.1

 For the following reasons, the Court ADOPTS the

magistrate judge’s order. 

FACTUAL BACKGROUND

On March 14, 2007, Plaintiff served Birdview Devellopment Corporation, Symantec

Corporation, and Eric J. Pulaski (“Defendants”) with a Rule 11 motion. On April 3, 2007, counsel

for Defendants sent a letter to Plaintiff, refusing to withdraw any of the statements or contentions on

which Plaintiff based its motion. On April 6, 2007, Plaintiff filed its Rule 11 motion with the Court. 

On April 24, 2007, the Court referred the motion to Magistrate Judge Chen. On May 16, 2007,

Defendants filed an opposition to Plaintiff’s motion as well as a motion for attorneys’ fees. After a

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United States District Court

For the Northern District of California

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June 6, 2007 hearing, Magistrate Judge Chen issued a June 11, 2007 order that denied the Rule 11

motion on the grounds that it was untimely. In addition, he granted Defendants’ attorneys $20,000

in attorneys’ fees.

STANDARD OF REVIEW

The district judge to whom the case is assigned shall consider such objections and shall

modify or set aside any portion of the magistrate judge’s order found to be clearly erroneous or

contrary to law. Fed. R. Civ. P. 72(a). “A judge of the court may reconsider any pretrial matter . . .

where it has been shown that the magistrate judge’s order is clearly erroneous or contrary to law.” 

28 U.S.C. § 636(b)(1)(A). The “clearly erroneous” standard applies to the magistrate judge's

findings of fact; legal conclusions are freely reviewable de novo to determine whether they are

contrary to law. Wolpin v. Philip Morris Inc., 189 F.R.D. 418 (1999). “[A] magistrate’s order is

‘clearly erroneous’ if, after considering all of the evidence, the district court is left with the definite

and firm conviction that a mistake has been committed, and the order is ‘contrary to law’ when it

fails to apply or misapplies relevant statutes, case law or rules of procedure.” Yent v. Baca, 2002 WL

32810316, at *2 (C.D. Cal. 2002); See also 32 Am. Jur. 2d Federal Courts § 143 (2007). 

ANALYSIS

A. Plaintiff’s Motion for Sanction

Because Magistrate Judge Chen denied Plaintiff’s motion for sanctions on the grounds that it

was untimely, a chronology of the events leading to the motion is instructive. 

First, Plaintiff’s claims that Defendants’ statements in its motions to dismiss justify sanctions

by the Court. Plaintiff claimed that Defendants mischaracterized its fraud claim and improperly

argued that it lacked the right to sue. Defendants filed motions to dismiss on June 15, 2006, based

on Plaintiff’s failure to state a claim and the Court’s lack of personal jurisdiction over Defendants. 

Plaintiff filed oppositions to those motions on July 26, 2006, and Defendants filed reply briefs on

August 1, 2006. In an August 23, 2006 order, the Court granted in part and denied in part

Defendants’ motions. Plaintiff served its Rule 11 motion on Defendants on March 14, 2007, over

six months later.

Second, Plaintiff also moves under Rule 11 to sanction claims that Defendants made in their

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opposition to Plaintiff’s October 10, 2006 motion to strike. In that opposition, according to

Plaintiff’s motion, Defendants made a frivolous argument regarding Plaintiff’s copyright

registration, mischaracterized Plaintiff’s licensing and pricing procedures, and offered a meritless

affirmative defense of unclean hands. On November 17, 2006, the Court ruled on the motion to

strike, issuing an order that granted in part and denied in part the motion. Plaintiff served its Rule 11

motion on Defendants on March 14, 2007, nearly four months later.

Third, Plaintiff also raises grounds for sanctions arising out of Defendants’ September 29,

2006 joint case management statement, alleging that Defendants falsely accused Plaintiff of failing

to produce necessary documents at a conference. In addition, Plaintiff argues that in their December

6, 2006 seconded amended answer, Defendants repeated their misstatement of Plaintiff’s pricing of

its products. The March 14, 2007 service of the Rule 11 motion on Defendants came over five

months after the joint case management statement and over three months after the seconded

amended answer.

Magistrate Judge Chen concluded that Plaintiff’s Rule 11 motion was untimely based on

Advisory Committee Notes that accompany the rule. He applied the standard that “[o]rdinarily [the]

motion should be served promptly after the inappropriate paper is filed, and, if delayed too long,

may be viewed as untimely.” Fed. R. Civ. P. 11(b) and (c), 1993 Advisory Committee Notes. The

magistrate judge’s order properly applied appropriate law. He reasonably concluded that the motion

was untimely because “it was not filed until may months after Defendants’ offending contentions

were made and long after the presiding judge had already considered or ruled upon the papers

containing the offending contentions.” (Ord. Denying Pl.’s Mot. for Sanctions and Grant. Defs’ Mot

for Atty.’s Fees, p. 2.) The Plaintiff admits in its objection that a determination of timeliness is

discretionary; the magistrate judge acted within this discretion. 

Plaintiff points out that the magistrate judge erroneously found that the Rule 11 motion did

not involve pleadings, since Plaintiff did request that the Court impose sanctions on Defendants for

claimed mischaracterizations in their second amended answer. However, this argument does not

undermine the conclusion that the motion is untimely. “Plaintiff pointed out that . . . sanctions for

violations in pleadings are determined at the end of case.” (Pl.’s Obj. to Mag. Judge’s Ruling, p. 5.) 

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 Because the order denied sanctions based on the untimeliness of Plaintiff’s motion, the Court does not reach

Plaintiff’s objections to Magistrate Judge Chen’s dicta on the merits of Plaintiff’s claims for sanctions.

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Therefore, Rule 11 motion for sanctions arising from Defendants’ pleading was untimely because

Plaintiff filed it too early by not awaiting the end of the case. 

Because Magistrate Judge Chen’s order denying Plaintiff’s request for sanctions is not in

clear error nor is it contrary to law, the Court declines to set aside his order.2 

B. Defendant’s Motion for Attorney’s Fees

A court has discretion to award attorney’s fees to the party that prevails on the motion. Fed.

R. Civ. P. 11(c)(1)(A). Plaintiff relies on a Supreme Court case that interpreted the attorney fee

shifting provisions of the Fair Housing Amendments Act and of the Americans with Disabilities Act

to define “prevailing party.” See Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of

Health and Human Resources, 532 U. S. 598, 605 (2001). This case does not inform an analysis of

Rule 11. The magistrate judge provided authority for imposition of attorney’s fees on the party that

successfully defends against a Rule 11 motion. See EEPC v. Tandem Computers, 159 F.R.D. 224

(D. Mass. 1994). Since Defendant was the prevailing party on the Rule 11 motion, the magistrate

judge had discretion to award it attorney’s fees. The award was neither clearly erroneous nor

contrary to law.

CONCLUSION

The Court DENIES Plaintiff’s objection to the magistrate judge’s June 11, 2007 order on

Plaintiff’s Motion for Sanctions.

IT IS SO ORDERED.

Dated: August___, 2007 _________________________________

MARTIN J. JENKINS

UNITED STATES DISTRICT JUDGE

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