3:15-cv-00866-SB 

Page 1 

Defendant’s Response to Plaintiff’s Objections to

Magistrate Judge Beckerman’s Findings & Recommendation 

David H. Madden

Mersenne Law 

9600 S.W. Oak Street 

Suite 500 

Tigard, Oregon 97223 

(503)679-1671 

ecf@mersenne.com 

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

COBBLER NEVADA, LLC, 

Plaintiff 

v. 

Thomas GONZALES, 

Defendant 

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Civil Action No.: ........... 3:15-cv-00866-SB 

DEFENDANT’S RESPONSE TO 

PLAINTIFF’S OBJECTIONS TO 

MAGISTRATE’S FINDINGS & 

RECOMMENDATION 

DEFENDANT’S RESPONSE TO OBJECTION TO

FINDINGS & RECOMMENDATION

Defendant GONZALES submits this Response to Plaintiff COBBLER NEVADA, LLC’s 

(“COBBLER”) Objections to Magistrate Judge Beckerman’s Findings and 

Recommendation (“F&R,” doc. 35) in favor of granting Defendant GONZALES’s Motion 

to Dismiss under Fed. R. Civ. P. 12(b)(6) (docs. 27, 29, 30, 35 & 37). For the reasons 

discussed below, the Court should ADOPT the magistrate’s recommendations and 

DISMISS the second cause of action with prejudice. The first cause of action should be 

DISMISSED with leave to amend. 

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 1 of 13
3:15-cv-00866-SB 

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Defendant’s Response to Plaintiff’s Objections to

Magistrate Judge Beckerman’s Findings & Recommendation 

INTRODUCTION

Plaintiff’s Objections are long on colorful rhetoric but short on relevant facts, and 

devoid of persuasive analysis. Plaintiff impugns Defendant’s reputation, asking the 

Court to “accept[] that Gonzales does not appear in this action with completely clean 

hands,” (Plaintiff’s Objections, doc. 36, p. 2) but it is not Defendant’s hands that are at 

issue – it is only Plaintiff’s allegations, taken as true, and whether those allegations 

would be legally sufficient to support a judgment against Defendant if they could be 

substantiated. Magistrate Judge Beckerman correctly found that they are not, and her 

recommendations should be followed. 

PLAINTIFF’S FIRST CAUSE OF ACTION: DIRECT COPYRIGHT INFRINGEMENT

While Defendant GONZALES did not initially challenge Plaintiff’s first cause of action, 

Plaintiff’s counsel acknowledged at oral argument that it knew a number of other 

individuals resided at the site of the alleged infringement (Exhibit A, Hearing Transcript, 

6:7-15) and that it did not know “whether or not [GONZALES] was for sure the firstparty direct infringer.” (Id., 6:2-4) Plaintiff had admitted in its initial pleadings that it 

only knew the defendant by way of a computer address (Complaint, doc. 1, ¶12; Ex 

Parte Motion to Expedite Discovery, doc. 3, p. 2) and Plaintiff’s counsel was unable to 

offer a single fact uncovered during early discovery that would make Mr. GONZALES a 

more likely candidate for the role of direct infringer. 

Based on these and other undisputed facts Plaintiff’s counsel acknowledged at the 

hearing, Defendant stated his intent to answer and move immediately for summary 

judgment on the direct claim under R.56 (Exhibit A, Hearing Transcript, 28:18-21). But 

Magistrate Judge Beckerman cut to the chase, finding that Plaintiff’s allegations were 

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 2 of 13
3:15-cv-00866-SB 

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Defendant’s Response to Plaintiff’s Objections to

Magistrate Judge Beckerman’s Findings & Recommendation 

insufficient to support the direct-infringement cause of action – that its allegations 

amounted to nothing more than a guess at who is liable (F&R p. 9) – and 

recommending dismissal under Petzschke v. Century Aluminum Co., 729 F.3d 1104 (9th

Cir. 2013). 

Plaintiff misinterprets Petzschke, which affirmed the dismissal of a “false or 

misleading securities registration” cause of action under Iqbal and Twombly. Petzschke

is on point: it dismissed a federal statutory cause of action over inadequate factual 

pleadings. Plaintiff’s analysis focuses on Petzschke’s mention of an earlier case, Starr v. 

Baca, 652 F.3d 1202 (9th Cir. 2011), and specifically on a salacious quote, “why the 

defendant allegedly took no action to stop that misconduct.” (Plaintiff’s Objections, p. 

2). This focus misses the point entirely: the defendant in Starr v. Baca had an 

obligation to stop his deputies from kicking Starr in the face after allowing another 

group of prisoners into his cell to stab him.

On the facts alleged here, however, the statement is all sizzle and no steak. 

Defendant had no obligation to Plaintiff, so even if he did know of the alleged 

infringement, he had no duty to do anything about it. 

Furthermore, of course, “knowledge of the infringement” and “failure to stop it” 

are only relevant to the indirect infringement claim. Claim 1 is a direct infringement 

count, and Plaintiff has not represented that has an evidentiary basis that would allow it 

to allege additional facts that would cure its admissions at the hearing. (F&R pp. 8-9.) 

Magistrate Judge Beckerman did not err in recommending dismissal of the first 

cause of action on the basis of facts Plaintiff’s counsel conceded at the hearing. The 

recommendation to dismiss with leave to amend is the correct result, and despite some 

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 3 of 13
3:15-cv-00866-SB 

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Defendant’s Response to Plaintiff’s Objections to

Magistrate Judge Beckerman’s Findings & Recommendation 

nattering about possibility versus plausibility, Plaintiff does not seriously dispute that 

outcome. The Court should ADOPT Judge Beckerman’s recommendation and reasoning 

on this point. 

SECOND CAUSE OF ACTION: INDIRECT COPYRIGHT INFRINGEMENT

Plaintiff’s second cause of action for indirect copyright infringement is predicated upon 

allegations that are insufficient – as a matter of law – to support such liability. 

Defendant argued, and the Court agreed, that “knowledge of the infringement” means 

“knowledge of THE INFRINGEMENT ALLEGED,” i.e., knowledge that the work in suit was 

being copied (F&R, p. 6, fn. 2). See also, UMG Recordings v. Shelter Capital Partners, 

718 F.3d 1006, 1021 (9th Cir. 2013). 

Plaintiff clearly dislikes this binding precedent, but rather than distinguish it, 

COBBLER NEVADA invites the Court to ignore it in favor of “traditional tort liability 

standards,” as exemplified by dog-bite law. But there is no need to frolic so far afield, 

when clear, on-point and binding precedent is at hand. Magistrate Judge Beckerman 

correctly determined that Plaintiff’s failure to allege (indeed, its inability to allege) that 

it had provided notice to Defendant of the alleged infringement of its rights in The 

Cobbler, is a sufficient stake through the heart of the second cause of action. 

However, “lack of notice” is not the only stake – the second and independently 

fatal problem Plaintiff faces is that it “has not alleged that Gonzales promoted, 

encouraged enticed, persuaded or induced another to infringe any copyright, let alone 

Plaintiff’s copyright.” (F&R, p. 6.) COBBLER NEVADA makes much of the “simple 

measures” Defendant could allegedly have taken to prevent the infringement, but again, 

it misrepresents the authority it relies upon for this proposition. For example, it cites 

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 4 of 13
3:15-cv-00866-SB 

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Defendant’s Response to Plaintiff’s Objections to

Magistrate Judge Beckerman’s Findings & Recommendation 

Religious Technology Center v. Netcom On-Line Communication Services, 907 F.Supp. 

1361 (N.D.Cal. 1995) to suggest that Gonzales could have “simply cancel[ed] [the] 

account.”1 But “the account” is not one of thousands of such accounts Gonzales 

operates on behalf of unaffiliated users or customers – Gonzales is not an Internet 

Service Provider, and Plaintiff does not allege that he is. Gonzales is merely a customer

of an Internet Service Provider; he has one account, and can no more “simply” cancel it 

to prevent alleged infringement, than he can cancel his water service to prevent bathtub 

drownings. 

As to the indirect infringement claim, Plaintiff’s allegations fail twice, and there has 

been no suggestion that they could be amended to overcome their legal deficiencies. 

The recommendation to dismiss this claim with prejudice is the only correct outcome. 

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1

 This quote is from Plaintiff’s Objections, p. 4. Netcom was decided ten years before 

the controlling MGM v. Grokster case, 545 U.S. 913 (2005), and Plaintiff misstates this 

portion of the earlier decision. Netcom was not faulted for failing to cancel an account, 

but for failing to cancel a message. 

The Netcom court actually said “[i]f plaintiffs can prove the knowledge element, 

Netcom will be liable for contributory infringement since its failure to simply cancel 

Erlich’s infringing message and thereby stop an infringing copy from being 

distributed worldwide constitutes substantial participation in Erlich’s public 

distribution of the message.” 907 F.Supp. 1361, 1374 (N.D. Cal. 1995), emphasis 

added. 

In light of the Supreme Court’s decision in Grokster, though, Netcom is simply no 

longer valid law. 

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 5 of 13
3:15-cv-00866-SB 

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Defendant’s Response to Plaintiff’s Objections to

Magistrate Judge Beckerman’s Findings & Recommendation 

CONCLUSION

Magistrate Judge Beckerman’s findings and analysis are sound, and her 

recommendations are balanced and just. The Court should leave dog-bite law to the 

State of Oregon, and ADOPT the Findings and Recommendation: 1) dismiss the indirect 

infringement claim with prejudice, and 2) dismiss the direct infringement claim with 

leave to amend. 

18 April 2016 s/David Madden/ 

Date David H. Madden, SBN OR080396 

Attorney for Defendant Thomas GONZALES 

Mersenne Law 

9600 S.W. Oak Street 

Suite 500 

Tigard, Oregon 97223 

dhm@mersenne.com 

(503)679-1671 

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 6 of 13
3:15-cv-00866-SB Exhibit A

EXHIBIT A

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 7 of 13
 1

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

COBBLER NEVADA, LLC, )

 ) 

 Plaintiff, ) Case No. 3:15-cv-00866-SB 

 ) 

 v. ) 

 ) March 14, 2016 

THOMAS GONZALES, )

 ) 

 Defendant. ) Portland, Oregon 

________________________________) 

ORAL ARGUMENT 

TRANSCRIPT OF PROCEEDINGS 

BEFORE THE HONORABLE STACIE F. BECKERMAN 

UNITED STATES DISTRICT COURT MAGISTRATE JUDGE 

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Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 8 of 13
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APPEARANCES 

FOR THE PLAINTIFFS: 

 CARL D. CROWELL 

 Crowell Law 

 943 Liberty St. SE 

 PO Box 923 

 Salem, OR 97308 

FOR THE DEFENDANT: 

 DAVID H. MADDEN 

 Mersenne Law LLC 

 9600 SW Oak Street 

 Suite 500 

 Tigard, OR 97223 

COURT REPORTER: Jill L. Jessup, CSR, RMR, RDR, CRR 

 United States District Courthouse 

 1000 SW Third Avenue, Room 301 

 Portland, OR 97204 

 (503)326-8191 

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Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 9 of 13
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TRANSCRIPT OF PROCEEDINGS 

COBBLER NEVADA, LLC V. GONZALES 

DEPUTY COURTROOM CLERK: Your Honor, we are here on

the matter of Cobbler Nevada, LLC, v. Gonzales, civil case

number 3:15-cv-00866-SB, for oral argument on defendant's

motion to dismiss plaintiff's second claim for relief.

Document No. 27.

Counsel, please state your appearances for the record,

beginning with plaintiff.

MR. CROWELL: Carl Crowell for plaintiff, Your Honor.

THE COURT: Good morning.

MR. MADDEN: David Madden for defendant,

Tom Gonzales.

THE COURT: Good morning.

MR. MADDEN: Good morning, Your Honor.

THE COURT: I've read your papers, and the first

thing I would like to start with is a brief discussion as to

the underlying facts of this case. It was a little vague on

the briefing as to what plaintiff actually learned in the

deposition of Mr. Gonzales. 

So, Mr. Crowell, let me turn to you first. If you could

just briefly set forth your factual basis for both your first

count that there's direct infringement here as well as the

second count that there's been direct infringement.

MR. CROWELL: Your Honor, the factual basis is

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(pages omitted)

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 10 of 13
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All things being considered, it's -- you know, the

contributory claim is the stronger claim of these two, but we

don't know where he was, and we don't know whether or not he

was for sure the first-party direct infringer. We believe we

have a good faith basis to name him and continue discovery at

this time.

THE COURT: Do you have any information that there

were other persons living in the residence at the time?

MR. CROWELL: Absolutely. He refused to disclose the

identity of a number of those parties. There is -- his

daughter and his grandson were also in the house, that we know

of. He claims they are not liable for this and they did not do

it, but he refused to identify the other parties that were

present. He claims that they're parties that are protected and

that he's not able to disclose who they are.

THE COURT: Is there any evidence that it was an

unsecured network, or are the only possible infringers the

people present in that home that have access to a

password-protected Internet service?

MR. CROWELL: I do not believe there's any indication

it's an unsecured network, Your Honor. I can't be sure on that

specific. I would have to review the transcript. I don't have

any present knowledge, based on my knowledge of the file right

now, whether or not -- I believe it was, but I don't -- I can't

be sure on that. I would have to review the transcript.

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Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 11 of 13
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person was the one who committed the violation. It's not the

standard in a civil case. At the same time, you can't just

guess at who it might be. So I'm struggling with that a little

bit.

I know that there's -- it's the plausibility standard with

regard to these facts, but from what I hear you saying, you're

not challenging the factual basis for Count 1. You're just

focusing on Count 2; is that correct?

MR. MADDEN: I'm not challenging the factual

allegations for Count 1.

Plaintiff's papers say that, you know, both -- both counts

are aware of facts that could be added, and that's true. But

in the posture of the case, the defendant can't add facts. The

only person who can add facts right now is Mr. Crowell. And

since he has not done so, the allegation that Mr. Gonzales

stole a movie, that's, you know, an allegation that can't be --

can't be challenged by me at this point. Okay? 

It will certainly be challenged as soon as we answer. I

think there will be an early summary judgment motion because,

you know, the -- the facts that I'm aware of don't support the

direct infringement either. But that's as to the indirect

infringement. We don't have knowledge, and we don't have the

material contribution.

THE COURT: Okay. Mr. Crowell, anything further that

you would like to add in response to what Mr. Madden has said?

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Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 12 of 13
3:15-cv-00866-SB Certificate of Service

CERTIFICATE OF SERVICE

The undersigned hereby certifies that a true and correct copy of the document entitled: 

DEFENDANT’S RESPONSE TO PLAINTIFF’S OBJECTIONS TO MAGISTRATE’S 

FINDINGS & RECOMMENDATION

was served upon the parties listed below on the date indicated, 

 by following state law for serving a summons in an action brought in courts of 

general jurisdiction where the district court is located or where service is made: 

 by delivery of a true copy of the document to the party to be served; 

 by delivering a true copy of the document to the dwelling house or usual place 

of abode of the person to be served, to any person 14 years of age or older 

residing in the dwelling house or usual place of abode of the person to be 

served; 

 by leaving a true copy of the document during working hours at an office 

maintained by the party to be served for the conduct of business, with the person 

who is apparently in charge; 

 by mailing a true copy of the document to the party by first class mail and by any 

of the following: certified, registered, or express mail with return receipt 

requested; 

 by delivering a copy of the document to the individual personally; 

 by leaving a copy of the document at the individual’s dwelling or usual place of 

abode with someone of suitable age and discretion who resides there; 

 by delivering a copy of the document to an agent authorized by appointment or by 

law to receive service of process; 

 by electronic filing notification (PACER); or

 other: courtesy copy by electronic mail to crowell@crowell-law.com 

Carl D. Crowell, Esq. 

Crowell Law 

943 Liberty Street S.E. 

P.O. Box 923 

Salem, Oregon 97308-0923 

Attorney for Plaintiff COBBLER NEVADA, LLC 

18 April 2016 

Date David H. Madden 

Case 3:15-cv-00866-SB Document 38 Filed 04/18/16 Page 13 of 13