Final - Opposition To Ex Parte Application For TRO

1 Alex M. Weingarten (SBN 204410) aw@wbllp.com 2 Leslie A. Eggers (SBN 275394) 3 le@wbllp.
com WEINGARTEN BROWN LLP 4 10866 Wilshire Boulevard, Suite 500 Los Angeles, California 90024-4340 5 Telephone: (310) 229-9300 6 Facsimile: (310) 229-9380 7 Attorneys for Defendants Studio Solutions Group, Inc. and Johnny Lin 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CATCHPLAY INC. (CAYMAN) and 12 CATCHPLAY INC. (TAIWAN), 13 Plaintiffs, 14 v. 15 16 STUDIO SOLUTIONS GROUP, INC. and JOHNNY LIN, 17 Defendants. 18 19 20 21 22 23 24 25 26 27 28
DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO
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WEINGART EN BR OWN LLP
CASE NO.: CV12-07525-GW DEFENDANTS OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER Date: N/A Time: N/A
1 2 3 I. 4 II. 5 6 7 8 9
TABLE OF CONTENTS
Page
INTRODUCTION ........................................................................................... 1 STATEMENT OF FACTS.............................................................................. 2 A. B. C. D. SSG Was Never CatchPlays Agent, Much Less Its Exclusive Agent ..................................................................................................... 2 CatchPlay Seeks to Cut SSG Out of the Business ................................ 5 CatchPlay Breaches Its Obligations to SSG and Refuses to Perform.................................................................................................. 7 CatchPlay Tries to Extract Concessions on Threat of Suit ................... 8
10 III. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV.
ARGUMENT ................................................................................................ 10 A. CatchPlays Motion For A Temporary Restraining Order Should Be Denied ............................................................................... 10 1. 2. 3. 4. Balance Of The Hardships Tips Overwhelmingly In Defendants Favor .................................................................... 12 CatchPlays Request For Injunction Is Barred By Its Unreasonable Delay .................................................................. 14 CatchPlay Has Failed To Establish Irreparable Harm.............. 16 CatchPlay Has Failed to Demonstrate a Likelihood of Success ...................................................................................... 16 a. b. c. 6. CatchPlay Cannot Establish a Fiduciary Duty with Defendants ...................................................................... 17 CatchPlay Has No Current Fiduciary Relationship with Chang ..................................................................... 19 CatchPlays Breach of Contract Claim Fails as a Matter of Law ................................................................. 20
CatchPlay Must Post Multi-Million Dollar Bond .................... 23
CONCLUSION ............................................................................................. 24
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1 2
TABLE OF AUTHORITIES
Page(s) 3 FEDERAL CASES 4 Buddy Systems, Inc. v. Exer-Genie, Inc. 545 F.2d 1164 (9th Cir. 1976) ............................................................................ 23 5 6 Citibank, N.A. v. Citytrust 756 F.2d 273 (2d Cir. 1985) ............................................................................... 14 7 8 Comedy Club, Inc. v. Improv West Assoc. 553 F.3d 1277 (9th Cir. 2009) ............................................................................ 22 9 10 Diamontiney v. Borg 918 F.2d 793 (9th Cir. 1990) .............................................................................. 16 11 Direx Israel, Ltd. v. Breakthrough Med. Group 12 952 F.2d 802 (4th Cir. 1991) .............................................................................. 12 13 FDIC v. Cafritz 14 762 F. Supp. 1503 (D.D.C. 1991) ...................................................................... 14 15 Fort Wayne Womens Health Org. v. Brane 16 734 F. Supp. 849 (N.D. Ind. 1990) ..................................................................... 11 17 Gidatex, S.r.L. v. Campaniello Imports, Ltd. 13 F. Supp. 2d 417 (S.D.N.Y 1998) ................................................................... 14 18 19 Hoechst Diafoil Co. v. Nan Ya Plastics Corp. 174 F.3d 411 (4th Cir. 1999) .............................................................................. 23 20 21 Hribar Trucking, Inc. v. Teamsters Local No. 43 379 F. Supp. 993 (E.D. Wis. 1974) .................................................................... 11 22 23 In re TFT-LCD (Flat Panel) Antitrust Litig. MDL No. 1827, 2012 WL 3730534 (N.D. Cal. Aug. 27, 2012) ........................ 18 24 Kearns v. Ford Motor Co. 25 567 F.3d 1120 (9th Cir. 2009) ............................................................................ 18 26 Kikumura v. Hurley 27 242 F.3d 950 (10th Cir. 2001) ............................................................................ 11 28
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1 Mazurek v. Armstrong 520 U.S. 968 (1997) ........................................................................................... 11 2 3 Mead Johnson & Co. v. Abbott Labs. 201 F.3d 883 (7th Cir. 2000) .............................................................................. 24 4 5 Motorola, Inc. v. Adams 433 F. Supp. 267 (C.D. Cal. 1977) ..................................................................... 16 6 Neilson v. Union Bank of California, N.A. 7 290 F. Supp. 2d 1101 (C.D. Cal. 2003) .............................................................. 20 8 New Dana Perfumes Corp. v. The Disney Store, Inc. 9 131 F. Supp. 2d 616 (M.D. Pa. 2001) ................................................................ 14
10 Salomon North America, Inc. v. AMF Inc. 484 F. Supp. 846 (D. Mass 1980)....................................................................... 11 11 12 Stanley v. University of Southern California 13 F.3d 1313 (9th Cir. 1994) .............................................................................. 11 13 14 State of Alaska v. Native Village of Venetie 856 F.2d 1384 (9th Cir. 1988) ............................................................................ 12 15 16 Sterling Fifth Associates v. Carpentile Corp. No. 03 Civ. 6569 (HB), 2003 WL 22227960 (S.D.N.Y. Sept., 26, 2003) ......... 23 17 Stormans, Inc. v. Selecky 18 586 F.3d 1109 (9th Cir. 2009) ............................................................................ 10 19 CALIFORNIA CASES 20 Alvarz v. Felker Manufacturing Co. 21 230 Cal. App. 2d 987 (1964) .............................................................................. 18 22 Postal Instant Press, Inc. v. Sealy 23 43 Cal. App. 4th 1704 (1996) ............................................................................. 22 24 Whitney Inv. Co. v. Westview Dev. Co. 273 Cal. App. 2d 594 (1969) .............................................................................. 21 25 26 STATUTES 27 28 U.S.C. Section 1746 ................................................................................. 2, 22, 23 28
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1 OTHER AUTHORITIES 2 Fed. Rule Civ. Proc. 9(b) ......................................................................................... 18 3 Fed. Rule Civ. Proc. 65(c) ....................................................................................... 23 4 William W. Schwarzer, et al., California Practice Guide: Federal Civil 5 Procedure Before Trial 12:50, at 12-19 .......................................................... 23 6 7 8 9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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1 I. 2
INTRODUCTION After filing a complaint wrought with claims that unequivocally fail as a
3 matter of law, Plaintiffs CatchPlay Inc. (Cayman) and CatchPlay Inc. (Taiwan) 4 (collectively CatchPlay) now bring a request for emergency ex parte relief 5 based on facts that it has known about for months. CatchPlay seeks imposition of 6 an emergency mandatory injunction, altering the status quo, forcing Defendants 7 Studio Solutions Group, Inc. and Johnny Lin (collectively SSG) to allow 8 CatchPlay to license certain films even though CatchPlay is in material breach of 9 the licensing agreements between the parties and those films have already been
10 licensed to a third party film distributor in Taiwan. As set forth below, 11 CatchPlays demand for emergency relief must be denied because: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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CatchPlay has unreasonably delayed for months to take action despite its knowledge of the dispute and breach of contract. CatchPlay now seeks a mandatory injunction disrupting the status quo to the severe detriment of SSG. SSG has already entered into a new agreement with another distributor in Taiwan and an injunction would severely harm SSG and numerous other third parties not before this Court, and would result in at least $2 million in lost profits and loss of investment to SSG and likely as much as $6 million in damages. CatchPlay has failed to satisfy any or all of the requisite elements necessary to prove entitlement to emergency relief and cannot establish either irreparable harm or a likelihood of success on the merits. The balance of hardships now weighs overwhelmingly in favor of SSG, the new distributor in Taiwan, and other third party studios that will be devastated by imposition of a restraining order. CatchPlays request for emergency relief is procedurally improper
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and offered without any evidentiary support because it is predicated upon an out-of-country declaration that fails to comply with 28 U.S.C. section 1746. Should a temporary restraining order issue (and it should not), CatchPlay should be required to post a bond of no less than $2 million and likely $6 million to cover the profits SSG and third parties are likely to lose. CatchPlays claims are not only insufficient to justify the extreme remedy
9 sought, they are not even sufficient to survive a motion to dismiss.

10 II. 11 12 13
STATEMENT OF FACTS A. SSG Was Never CatchPlays Agent, Much Less Its Exclusive Agent Studio Solutions Group, Inc. (SSG), a California corporation based in
14 Beverly Hills, is in the business of acquiring rights for premier Hollywood motion 15 pictures for distribution in international markets. Declaration of Johnny Lin (Lin 16 Decl.) 1. SSG also produces and finances films targeted for foreign markets. 17 Lin Decl. 1. Johnny Lin is SSGs principal and has been involved in the motion 18 picture industry for 18 years. Lin has relationships with a number of major movie 19 studios from which SSG has been able to license films. Indeed, SSG has 20 successfully licensed films from virtually every major Hollywood studio. Lin 21 Decl. 2-5. 22 CatchPlay Inc. (Taiwan) and CatchPlay Inc. (Cayman) (collectively, 23 CatchPlay) are foreign corporations in the business of acquiring and exploiting 24 various rights to motion pictures in Taiwan. CatchPlay was founded by Cher 25 Wang, a Taiwanese billionaire and founder of hTc Corporation, one of the worlds 26 largest smart phone manufacturers. Compl. 1. Until earlier this year, CatchPlay 27 licensed motion pictures from SSG for exploitation in Taiwan. Lin Decl. 6-13. 28
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CatchPlays Complaint alleges, assumes and relies almost exclusively on the
2 existence of a putative SSG Agency Agreement, which it avers exists as a 3 Frankensteins monster of contracts: some oral, some written and others implied in 4 fact. Compl. 16. CatchPlay, however, does not attach any such agreement 5 because it does not exist and never has. Lin Decl. 14-22. Indeed, the Complaint 6 sets forth a list of purported terms of this SSG Agency Agreement that appear 7 nowhere in any document. Compl. 17. It is this entirely fictitious SSG Agency 8 Agreement a figment of CatchPlays imagination that it claims governed the 9 parties multi-million dollar relationship and spanned more than four years upon
10 which CatchPlay now purports to bring this action and present Application for a 11 Temporary Restraining Order (TRO). Indeed, CatchPlay concedes that it has no 12 documentation of the relationship it alleges, contending vaguely that the SSG 13 Agency Agreement was partially oral, partially in writing, and partially evidence 14 by the consistent business practices of SSG and CatchPlay Cayman. Compl. 17. 15 In other words, during the more than four year, multi-million dollar business 16 relationship that involved almost 1000 film titles, the parties never executed any 17 document describing the relationship in the manner CatchPlay now alleges. This is 18 presumably because it is not true. To be clear, SSG never acted as CatchPlays 19 agent, much less its exclusive agent at any time. Lin Decl. 14-22. 20 Quite to the contrary, and not disclosed by the Complaint, CatchPlay and 21 SSGs relationship was governed by some two dozen written contracts none of 22 which contain the agency terms CatchPlay alleges and none of which are attached 23 to the Complaint. The actual as opposed to CatchPlays fictitious contracts that 24 govern the relationship detail the true nature of the relationship between the 25 parties. Lin Decl. 21-22. In fact, SSG licensed certain motion picture rights 26 from movie studios such as Lionsgate and Miramax. Lin Decl. 16. In those 27 contracts, SSG is the licensee and CatchPlay is never mentioned nor is it a party. 28
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1 Lin Decl. 16. In separate transactions with CatchPlay (and others), SSG, in turn, 2 re-licensed the rights to exploit those motion picture rights in Taiwan to CatchPlay. 3 Lin Decl. 21 and Exhs. 1-23. In those two dozen written contracts, SSG is 4 defined as the Licensor; CatchPlay as the Distributor. Lin Decl. 22, Exh. 1 5 at 4. None of the contracts describe or refer to SSG as CatchPlays agent, much 6 less its exclusive agent for acquiring motion pictures for license in Taiwan. Lin 7 Decl. 21. Of course, if there were any merit to CatchPlays theory that CatchPlay 8 is the real contracting party on the underlying licensing agreements with the 9 studios, why are there two dozen written contracts that show otherwise? Nor,
10 contrary to CatchPlays contention, was there an exclusive relationship between 11 CatchPlay and SSG. Lin Decl. 14-22. CatchPlay could and would decline to 12 license films SSG acquired, SSG licensed titles to other distributors and CatchPlay 13 could and would seek to license film titles independently from SSG. Lin Decl. 14 11. 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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Importantly, the contracts contain a default term that states: Default: In the event of distributors failure to submit payment following payment notice, licensor has the right to revoke all rights licensed to distributor. Distributor shall cease and desist all release activities against all pictures. Default is failure to pay within 10 business days following notice of royalties/gross receipt share payment(s). Cure period: Distributor has 5 business day[s] to submit payment and cure default status. If distributor entered cancellation, it will be upon licensors discretion to further remedies. Cancellation: After 5 business days following default this agreement shall automatically cancel itself providing all necessary prior documents such as notice(s) of payment are in receipt by distributor. Lin Decl. 22, Exh. 1 at 4. This provision is critical for multiple reasons. First, it evidences the parties agreement that SSG had the right to terminate the licensing
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1 rights should CatchPlay default on payments (which it has, as shown below). 2 Second, the termination provisions are fundamentally inconsistent with 3 CatchPlays agency allegations. If, as CatchPlay contends, SSG merely acted as 4 CatchPlays agent in acquiring licensing rights, CatchPlay would be the principal 5 and the true contracting party with the movie studios. It would make no sense for 6 SSG to be able to terminate CatchPlays rights to the movie license SSG would 7 only be acting as agent and would not held the rights itself. 8 9
B.
CatchPlay Seeks to Cut SSG Out of the Business
The background of SSGs and CatchPlays business relationship is critical to
10 understanding CatchPlays intentions here. CatchPlay first approached SSG in 11 2008. Lin Decl. 6. CatchPlay wanted to enter the licensing business in Taiwan 12 and offered to pay SSG a fee to teach CatchPlay the ropes. Lin Decl. 7. 13 Founded three years earlier and relying on Lins 18 years in the industry, SSG was 14 already established in the business with strong relationships with studios and other 15 licensors. Lin Decl. 7. SSG declined CatchPlays original proposal because SSG 16 was uninterested in a short-term fee based relationship. Lin Decl. 7-8. Rebuffed, 17 CatchPlay sought to enter the marketplace without SSGs help, but was unable to 18 gain traction. Lin Decl. 8. CatchPlay then came back to SSG and asked SSG to 19 propose terms whereby SSG would agree to work with CatchPlay. Lin Decl. 9. 20 SSGs terms and the basis for the relationship between the parties was simple 21 SSG would continue its business and acquire titles from Hollywood studios. The 22 parties would then negotiate to see if they could agree on terms for CatchPlay to 23 license those titles from SSG. Nothing obligated SSG to license titles to CatchPlay 24 and nothing required CatchPlay to pay for any titles. Lin Decl. 10. SSG was not 25 acquiring titles to films for the benefit of CatchPlay; SSG was acquiring titles for 26 the benefit of SSG. SSG was able to exploit those titles to its benefit by, inter alia, 27 licensing them to CatchPlay, and others, for distribution in Taiwan. Lin Decl. 11. 28
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For the first four years SSG was doing business with CatchPlay, CatchPlay
2 was run by its General Manager, Wayne Chang (Chang). Lin Decl. 23. In late 3 2011, CatchPlay brought in new management. Compl. 26. New management 4 purportedly investigated Mr. Chang and accused him of various wrongful acts. 5 Compl. 26. SSG has no way to know whether Mr. Chang committed such acts or 6 whether new management trumped up accusations as a means to force Mr. Chang 7 aside for other reasons. Lin Decl. 24. 8 What is clear, however, is that new management of CatchPlay began a 9 campaign to supplant SSG as the licensee of motion pictures from Hollywood
10 studios in the apparent hope that CatchPlay could obtain the same distribution 11 rights without having to pay SSG. Indeed, now that CatchPlay believes it has 12 learned the ropes from working with SSG for these past four years, CatchPlay 13 now seeks to revert to its original plan of cutting out SSG and taking all of the 14 business for its own. Lin Decl. 27. 15 In the Spring of 2012, CatchPlay began demanding copies of all of SSGs 16 contracts with licensors of the motion pictures. Lin Decl. 26. It appears that 17 these requests were designed to allow CatchPlay to gather all of the information it 18 would need to approach the studios directly. Lin Decl. 27. CatchPlay has never 19 demonstrated (because it cannot) any right to the original documents and contracts 20 between SSG and the licensors with which it does business. Lin Decl. 27. SSG is 21 not in practice of sharing confidential and proprietary information with third 22 parties and takes steps to ensure that its trade secrets are protected. Declaration of 23 Tamara Nagahiro (Nagahiro Decl.) 11. 24 When CatchPlay was unable to strong-arm SSG into obtaining its contracts 25 with licensors, it terminated Mr. Chang and accused him of wrongdoing. Compl. 26 36. Without basis, CatchPlay began asserting that SSG was somehow complicit in 27 Mr. Changs alleged wrongdoing. Lin Decl. 28. That CatchPlay has no actual 28
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1 evidence supporting this contention is evidenced by the fact that CatchPlay even 2 now makes this allegation only on information and belief. Compl. 36. 3 CatchPlay then began contacting studios and motion picture licensors in 4 apparent hopes of obtaining the licenses directly. Lin Decl. 29. CatchPlay 5 attended the Cannes Film Festival and Market in mid May 2012 to directly 6 compete with SSG for the purchase of film licenses. Lin Decl. 30. CatchPlays 7 ploy was unsuccessful because, unlike SSG, it lacks a long and successful business 8 relationship with the studios and licensors. Lin Decl. 31. In an effort to sabotage 9 SSGs relationship with the licensors, on or about August 3, 2012, CatchPlays
10 Chairman sent letters to studios and licensors accusing SSG of misrepresenting its 11 relationship with CatchPlay, accusing Mr. Chang of unspecified serious 12 irregularities and immediately thereafter stating that CatchPlay would no longer 13 do business with SSG. Lin Decl. 32, Exh. 24 (emphasis in original). The 14 juxtaposition of the charges against Mr. Chang and the casting aside of SSG was 15 transparently designed to connect the two and imply that SSG was somehow 16 involved in Mr. Changs alleged wrongful acts. In an effort to distance itself from 17 SSG, CatchPlay admitted that which it now denies: its relationship with SSG was 18 solely premised on the licensing agreements between CatchPlay and SSG: 19 20 21 22 23 24 25 26 27 28
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We would like to clarify that CatchPlay and SSG are two unrelated entities without either entity ever having any shareholding interest in the other or ever having been otherwise affiliated with the other except through the licensing agreements. Lin Decl. 32, Exh. 24 (bold in original, underlining added). Thus, CatchPlay itself, in a rare moment of candor, concedes that there was no agency relationship between the parties and that its supposed SSG Agency Agreement is a lie. C. CatchPlay Breaches Its Obligations to SSG and Refuses to Perform At the same time CatchPlays new management was trying, unsuccessfully,
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1 to steal SSGs business with the studios and licensors, CatchPlay stopped paying 2 SSG much of the amounts it was owed. Lin Decl. 34. Those amounts come in 3 several forms. First, certain minimum guarantees on the motion pictures were due. 4 Lin Decl. 34, Exh. 25-37. After CatchPlay declared that it would no longer do 5 business with SSG, it refused to pay the minimum guarantees on the motion 6 pictures it licensed. Lin Decl. 34. Based on CatchPlays own records, it owed 7 $7.7 million to SSG. Nagahiro Decl. 8. SSG demanded the required payments; 8 when CatchPlay refused to pay, it terminated the licenses. Lin Decl. 37, Exhs. 9 44-46.
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In addition, as explained above, CatchPlay owed SSG a portion of the
11 receipts generated by the motion pictures through the distribution of cinematic, 12 video and television rights. Lin Decl. 35. CatchPlay failed to timely pay those 13 amounts to SSG. Lin Decl. 35. SSG demanded an accounting of the gross 14 receipts. Lin Decl. 37, Exh 44-46. Rather than comply by providing SSG with 15 information that CatchPlay should have readily had, CatchPlays new management 16 delayed turning over the information. Lin Decl. 35. 17 In addition to the failure to pay, information came to SSGs attention that 18 CatchPlay was selling unauthorized merchandise related to the motion pictures 19 without obtaining the necessary approvals. Lin Decl. 36. This was not only a 20 breach but also imperiled SSGs contractual rights with the studios and licensors 21 and threatened to damage SSGs reputation. Lin Decl. 36. 22 23 D. CatchPlay Tries to Extract Concessions on Threat of Suit
When it became clear that CatchPlays bullying tactics and attempts to steal
24 SSGs business had backfired, CatchPlay began making additional accusations 25 against SSG and resumed its demand for licensing contracts between SSG and 26 third parties to which it had no rights, contractual or otherwise. Lin Decl. 39. 27 Notwithstanding CatchPlays own public declaration that it would no longer do 28
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1 business with SSG, and its refusal to pay amounts due and owing to SSG, 2 CatchPlay demanded that SSG turn over the motion picture rights to CatchPlay for 3 several films that CatchPlay wished to release in Taiwan. Lin Decl. 39, Exhs. 4 47-48. CatchPlay threatened legal action and that it would seek emergency action 5 from the Court notwithstanding that the dispute between the parties has been 6 going on for weeks. Lin Decl. 39, Exh. 49. 7 CatchPlay apparently contends that it will suffer irreparable harm if it is 8 unable to acquire the motion picture rights it seeks to release. However, there is no 9 basis for this assertion. Assuming arguendo that CatchPlay were to prevail, it can
10 recoup any out-of-pocket expenses related to the motion pictures and can seek 11 damages for the exploitation of the motion pictures. Lin Decl. 40. SSG is a 12 solvent and successful company. Lin Decl. 40. 13 14 15 16 E. SSG Has Already Entered Into A Distribution Agreement for the Films That Purportedly Give Rise To This Emergency Application In the face of CatchPlays numerous breaches of its contracts with SSG, and
17 the fact that CatchPlays new management team was both incompetent and 18 engaging in conduct harmful to SSGs hard won reputation with the major U.S. 19 film companies, SSG was compelled to enter into a new distribution agreement 20 with Media Development Corp. (MDC) for distribution in Taiwan of the 3 films 21 purportedly giving rise to this TRO: Dredd 3D, Looper and Lawless. Lin Decl. 22 42.1 SSG has already delivered all materials necessary to release Dredd 3D to 23 24 Although CatchPlays complaint references the fact that SSG licensed approximately 950 titles and has now revoked the rights to all of them the vast 26 majority of those titles are not at issue in this case as they are older titles that are no longer in theatrical distribution. If these titles are still in the market, they are 27 already subject to sub-distribution agreements between CatchPlay and licensees such as television stations. SSG has terminated CatchPlays rights in those titles as 28 well but has not and will not re-license them to any third party as there is no longer any market for them. CatchPlays claims are really focused on the small handful 25
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1 MDC there is nothing more for SSG to do or provide MDC to facilitate its 2 release of Dredd 3D in Taiwan. Lin Decl. 43. In addition, SSG has already 3 provided a substantial portion of the deliverables to MDC for the release of Looper 4 and Lawless as well. Declaration of Alfredo Lopez (Lopez Decl.) __. 5 At this point, CatchPlays request for emergency relief to enjoin the sale of 6 distribution rights for these 3 films Dredd 3D, Looper and Lawless is not an 7 effort to maintain the status quo. Rather, CatchPlay is seeking to go back in time 8 and reverse events that have already transpired. SSG has already terminated 9 CatchPlays license agreements and rights. Further, SSG has already entered into
10 new license agreements with MDC. A restraining order at this point would not 11 maintain the status quo. Rather, it would affirmatively prevent SSG from 12 following through on its new distribution license agreement with MDC. 13 Accordingly, CatchPlays demand would, if granted, cause severe harm to SSG 14 and innocent third parties including MDC, the Hollywood film studios and even 15 the Taiwanese public who could be prevented or delayed from viewing these films 16 during the expected theatrical release period. 17 III. 18 19 20 ARGUMENT A. CatchPlays Motion For A Temporary Restraining Order Should Be Denied To obtain a preliminary injunction, a party must demonstrate that he is
21 likely to succeed on the merits, that he is likely to suffer irreparable harm in the 22 absence of preliminary relief, that the balance of equities tips in his favor, and that 23 an injunction is in the public interest. Stormans, Inc. v. Selecky, 586 F.3d 1109, 24 1127 (9th Cir. 2009) (vacating an improperly issued preliminary injunction). It is 25 well settled that courts should be extremely cautious about issuing a preliminary 26 27 of titles set for theatrical release later this year and those titles have been licensed 28 to MDC. Lin Decl. 42.
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1 injunction. Stanley v. University of Southern California, 13 F.3d 1313, 1319 (9th 2 Cir. 1994). Moreover, CatchPlay maintains the burden of persuasion at all times 3 and must carry this burden by a clear showing. Mazurek v. Armstrong, 520 U.S. 4 968, 972 (1997). 5 CatchPlays burden here, however, is significantly heightened above and 6 beyond these already stringent requirements because it seeks a temporary 7 restraining order (TRO). Fort Wayne Womens Health Org. v. Brane, 734 F. 8 Supp. 849, 850 (N.D. Ind. 1990) (An ex parte temporary restraining order is an 9 extraordinary remedy which will not be granted unless the movant clearly shows
10 that such relief is warranted.) Accordingly, CatchPlay must prove both a 11 reasonable likelihood of success on the merits and the existence of immediate 12 irreparable harm that outweighs any possible harm to the defendants. Salomon 13 North America, Inc. v. AMF Inc., 484 F. Supp. 846, 848 (D. Mass 1980) (denying 14 request for injunctive relief where plaintiff waited two months to initiate legal 15 action.) Ultimately, CatchPlay carries a heavy burden of proof and a temporary 16 restraining order should not issue in doubtful cases where substantial issues of fact 17 persist. Hribar Trucking, Inc. v. Teamsters Local No. 43, 379 F. Supp. 993, 996 18 (E.D. Wis. 1974) (denying request for temporary restraining order where there 19 were disputed issues of fact including the existence of a contract). 20 Additionally, CatchPlays burden is even further heightened because it seeks 21 a mandatory injunction that would disturb the now existing status quo. Kikumura 22 v. Hurley, 242 F.3d 950, 955 (10th Cir. 2001) (party moving for injunction must 23 prove that the factors weigh heavily and compellingly in its favor to obtain this 24 extraordinary relief ). At this point, the status quo consists of a separate licensing 25 agreement between SSG and a third party, MDC, for distribution of the film titles 26 in Taiwan. (Lin Decl. 41-44.) As SSGs counsel advised during the telephonic 27 conference with the Court, the proverbial horse has already left the barn. The 28
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1 films to be distributed between now and the end of 2012 Dredd 3D, Looper and 2 Lawless have already been licensed to MDC. (Lin Decl. 44.) Accordingly, this 3 Court is not simply being asked to enter an injunction to maintain the status quo. 4 Rather, the Court is being asked to affirmatively set aside existing agreements and 5 revive contracts that have already been terminated due to CatchPlays myriad 6 breaches. SSG respectfully contends that CatchPlays request for a TRO in this 7 context is completely improper and unwarranted. To the extent CatchPlay wishes 8 to challenge the propriety of SSGs licensing agreement with MDC in Taiwan, it 9 can certainly do so and seek monetary damages. However, given the extremely
10 heightened standard applicable here, SSG contends there is no legitimate basis for 11 CatchPlay to seek a TRO that would completely upend the now existing status quo. 12 13 14 1. Balance Of The Hardships Tips Overwhelmingly In Defendants Favor The critical element in determining the test to be applied is the relative
15 hardship to the parties. If the balance of harm tips decidedly toward the plaintiff, 16 then the plaintiff need not show as robust a likelihood of success on the merits as 17 when the balance tips less decidedly. State of Alaska v. Native Village of Venetie, 18 856 F.2d 1384, 1389 (9th Cir. 1988) (emphasis supplied); see also Direx Israel, 19 Ltd. v. Breakthrough Med. Group, 952 F.2d 802, 813-814 (4th Cir. 1991) (balance 20 of harm evaluation should precede likelihood of success analysis). Here, the 21 balance of the hardships tips overwhelmingly in Defendants favor and, 22 accordingly, CatchPlays Application must fail. 23 Through years of hard work and substantial capital expenditure, SSG 24 acquired the licenses to the films at the center of this dispute. Based upon past 25 experience, SSG expects to receive royalties ranging from $2 million to $6 million 26 on the unreleased motion pictures subject to CatchPlays Application depending 27 on the box office success and print and advertising expense for the picture. Lin 28
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1 Decl. 47. On this record, CatchPlay cannot legitimately claim hardship and 2 reasonably demand an injunction disrupting the existing status quo and entitling it 3 to the distribution rights for these films. It was CatchPlays own greed, 4 incompetence and material breaches that forced SSG to terminate the contracts 5 with CatchPlay and switch to a new distributor in Taiwan. CatchPlay refused to 6 pay for the film rights in accordance with the parties written agreements. 7 CatchPlay demonstrated that it was incapable of delivering a first class theatrical 8 release of premier titles in Taiwan. And it was CatchPlay that was selling 9 unauthorized merchandise related to the motion pictures. Lin Decl. 36. In the
10 face of CatchPlays improper conduct, SSG could not afford to risk its reputation 11 with the Hollywood studios, lose its initial investment in the licenses to these films, 12 (as well as the royalties and other profits) by it continuing to license the film titles 13 to CatchPlay. Lets also not forget that CatchPlay was engaged in a campaign 14 attempting to assassinate SSGs reputation and was attempting to steal business 15 and clients out from under SSG. SSG had no choice but to license the titles to 16 another distributor in Taiwan that would comply with its contractual obligations 17 and comport itself in an appropriate manner. 18 If this Court were to issue a TRO and set aside or otherwise prevent SSG 19 from abiding its new distribution agreement with MDC, it undoubtedly would 20 cause a material delay in the exhibition of these films in Taiwan. Any delay in 21 allowing SSG to contract with MDC (or any other distributor) would cause 22 insurmountable loss due to the unavoidable emergence of counterfeits on the 23 market after a film has made its original release. Lin Decl. 48. Time is of the 24 essence in the film industry; any delay in the release date can cause devastating 25 losses due to the nature of the business. Accordingly, granting CatchPlays request 26 for a TRO would inexorably disrupt the distribution of at least the 3 films already 27 licensed to MDC. Lin Decl. 45. 28
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Additionally, innocent third parties would suffer from imposition of an
2 injunction. MDC would clearly be harmed if, after negotiating distribution 3 agreements with various theaters in Taiwan, the Court ruled that it could not fulfill 4 its contractual commitments. At the same time, the studios would also suffer harm 5 because they are entitled to royalties and other accounting as compensation for 6 their hard work in producing the film. Lin Decl. 46, 48. The harm to these third 7 parties alone should prevent the Court from granting the relief requested. As a 8 general matter, a court can issue a temporary restraining order only if the moving 9 party establishes . . . and (4) that other interested parties will not suffer substantial
10 harm if the temporary restraining order is granted. FDIC v. Cafritz, 762 F. Supp. 11 1503, 1505 (D.D.C. 1991). The losses to the studios would also irreparably 12 damage SSGs relationships with them, which is the bedrock of its business. 13 14 15 2. CatchPlays Request For Injunction Is Barred By Its Unreasonable Delay Restraining Orders and Preliminary injunctions are generally granted under
16 the theory that there is an urgent need for speedy action to protect the plaintiffs 17 rights. Delay in seeking enforcement of those rights, however, indicates a reduced 18 need for such drastic, speedy action. Citibank, N.A. v. Citytrust, 756 F.2d 273, 276 19 (2d Cir. 1985) (refusing to issue injunction where plaintiff had waited 10 weeks 20 after learning of defendants plans); see also New Dana Perfumes Corp. v. The 21 Disney Store, Inc., 131 F. Supp. 2d 616, 630 (M.D. Pa. 2001) (denying request for 22 injunction due to two month delay after plaintiff first became aware of facts giving 23 rise to motion); Gidatex, S.r.L. v. Campaniello Imports, Ltd., 13 F. Supp. 2d 417, 24 419 (S.D.N.Y 1998) ([C]ourts typically decline to grant preliminary injunctions in 25 the fact of unexplained delays of more than two months.). Accordingly, 26 CatchPlays emergency demand for a temporary restraining order is barred by its 27 delay in acting on facts known to it months ago. 28
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CatchPlays delay in bringing this application three weeks after filing its
2 complaint, more than one month after it first started making these specific 3 allegations and more than six months after an issue first arose is an absolute bar 4 to its request for a temporary restraining order. 5 The facts giving rise to CatchPlays complaint started six months ago, in 6 March. Indeed, as CatchPlays exhibits to its application show, CatchPlay was 7 making the exact same claims six months ago, stating that [i]t is to our great 8 disappointment that [SSG has] not fulfilled [SSGs] promise to provide the 9 required supporting documents (licensing contracts from Studios and invoices for
10 materials from labs) till now and [i]t is inevitable that we will soon be needing to 11 go into a full review of our relationship [with SSG] one way or another. TRO 12 App., Exh. 3 at 2. For months, CatchPlay continued making unsubstantiated 13 claims for original copies of confidential agreements between SSG and studio 14 licensors, as well as unreasonably delaying its payments to SSG. TRO App., Exh. 15 11 at 2. CatchPlay knew as early as June 2012 that, if they continued to be 16 delinquent in payment in breach of its agreements, then SSG would be forced to 17 find alternative distribution routes for the titles. TRO App., Exh. 13 at 8. 18 On August 17, 2012, after months of dispute over the contracts, CatchPlay 19 received a letter from SSGs transactional counsel, Matthew Wallerstein 20 (Wallerstein) that started a chain of correspondence. Lin Decl., Ex. 44. This 21 included a letter from Weingarten, SSGs litigation counsel, dated August 24, 22 2012, whereby SSG informed CatchPlay that, due to the myriad breaches of the 23 license agreements between the parties by CatchPlay, SSG had terminated the 24 agreements and any rights that CatchPlay had in the licensed titles. Weingarten 25 Decl., 2 Ex. 50. 26 CatchPlay then filed its complaint on August 31, almost three weeks 27 ago. Weingarten informed CatchPlay that he was authorized to and would accept 28
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1 service on behalf of SSG and Lin almost immediately upon learning of the fact that 2 CatchPlay filed the case and even filed an appearance as counsel for Defendants on 3 September 10. Weingarten Decl. 4-8. After two additional weeks passed, 4 CatchPlay filed its emergency papers. The record is clear, there is no 5 emergency. Assuming arguendo that an emergency did exist, it was of 6 CatchPlays own doing. At this point, enough time has passed that the Court could 7 have heard this matter as a regularly noticed motion. 8 9
3.
CatchPlay Has Failed To Establish Irreparable Harm
CatchPlay claims that it will suffer irreparable harm because potential loss
10 of goodwill or future customers serves to establish irreparable harm. TRO at 11 16:16-17. When the plaintiff delays in bringing suit, however, that delay is proof 12 that there was no irreparable harm. See Motorola, Inc. v. Adams, 433 F. Supp. 267, 13 268 (C.D. Cal. 1977) (party seeking injunction failed to show any irreparable 14 harm to itself, especially in view of the delay in bringing [the] action). 15 CatchPlays glaring lack of diligence in: (1) resolving disputes regarding its 16 contractual obligations with SSG, (2) filing and serving its complaint, and (3) 17 bringing this application all demonstrate that there is no irreparable harm. Indeed, 18 if CatchPlay was genuinely concerned about the possibility of such harm, it would 19 have exercised its legal rights months ago. Accordingly, CatchPlay cannot meet its 20 heavy and compelling burden by a clear showing that it has been irreparably 21 harmed. 22 23 4. CatchPlay Has Failed to Demonstrate a Likelihood of Success
CatchPlay has failed to demonstrate an ultimately likelihood of success on
24 the merits much less made a clear showing required to meet its heavy and 25 compelling burden. Supra at pp. 11:13-12:14. This already difficult burden is 26 further heightened by the fact that the balance of the burdens tips sharply in SSGs 27 favor. Diamontiney v. Borg, 918 F.2d 793, 795 (9th Cir. 1990) (The requirement 28
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1 that a party show a likelihood of irreparable harm prior to trial increases or 2 decreases in inverse correlation to the probability of success on the merits at 3 trial.). 4 CatchPlays failure to show a likelihood of success is aptly demonstrated by 5 its failure to articulate, much less establish, which claim for relief it bases its 6 request for a TRO, or to demonstrate that CatchPlay can present persuasive 7 evidence on each of the elements of such a claim. Rather, CatchPlays brief of 8 likelihood of success just generally refers to CatchPlays request for declaratory 9 relief without any articulation of the underlying legal basis of that request for
10 declaratory relief or the elements of that legal claim. See TRO App. at p. 20. 11 Remarkably, while the Application for a TRO seeks injunctive relief based upon 12 the Declaratory Relief Claim with a brief mention of the Breach of Contract Claim, 13 the Complaint does not request injunctive relief based on either of those two 14 claims. Rather, the Complaint seeks injunctive relief based solely upon the Breach 15 of Fiduciary Duty and Aiding and Abetting Claims. See Prayer for Relief. 16 CatchPlays utter failure to demonstrate that it has a substantial likelihood of 17 establishing any particular legal claim dooms its Application. 18 19 20 a. CatchPlay Cannot Establish a Fiduciary Duty with Defendants The Application does not purport to base the Application for a TRO on
21 Count I of the Complaint for the alleged breach of fiduciary duty. CatchPlays 22 failure to explicitly address this claim should be taken as a concession that 23 CatchPlay cannot demonstrate the necessary likelihood of success on this claim. 24 Indeed, the claim fails at the very first element the establishment of a 25 fiduciary duty. CatchPlay cannot produce any persuasive evidence of a fiduciary 26 relationship.2 Indeed, the actual contracts between SSG and CatchPlay are 27 28
2
Similarly, CatchPlays claims cannot be sustained because they are predicated,

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1 straight-forward licensing agreements that suggest nothing establishing the 2 existence of a fiduciary relationship. CatchPlay tries to manufacture one through 3 the SSG Agency Agreement but they concede no such written document exists, 4 suggesting instead that it should be implied through conduct and various written 5 and oral communications. Complaint 5:7-6:2. But, even giving CatchPlay the 6 benefit of all doubt, those communications at best support the notion that SSG was 7 re-licensing exclusively to CatchPlay.3 CatchPlay provides no legal support for its 8 apparent position that exclusivity equals fiduciary. Indeed, that is not the law. See 9 Alvarz v. Felker Manufacturing Co., 230 Cal. App. 2d 987, 999-1000 (1964)
10 (exclusive distributor not an agent or fiduciary). 11 Furthermore, the notion that SSG acted as CatchPlays agent, and therefore 12 fiduciary, is belied, not supported, by the parties course of conduct. CatchPlay 13 contends that SSG entered into contracts with licensors on CatchPlays behalf and 14 15 not on facts specifically alleged, but rather on information and belief. The case 16 law interpreting Federal Rule of Civil Procedure 9(b) makes clear that claims sounding in fraud cannot be based simply upon information and belief, and will 17 be dismissed. See, e.g., In re TFT-LCD (Flat Panel) Antitrust Litig., MDL No. 1827, 2012 WL 3730534 (N.D. Cal. Aug. 27, 2012) (fraud claims predicated on 18 information and belief insufficient to meet F.R.CP. 9(b) heightened pleading requirement). The Ninth Circuit has further pronounced that Rule 9(b)s 19 heightened pleading standard is not limited to an actual claim of fraud; so long as the claims are grounded in fraud or fraudulent conduct, then the heightened 20 pleading standard applies. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1124-25 (9th Cir. 2009) (F.R.C.P. 9(b) heightened pleading standard applies to claims under 21 Californias Unfair Competition Law and Consumer Legal Remedies Act). 22 Here, CatchPlay asserts, without evidentiary facts, but rather that it is informed and believe[s] that SGG and Mr. Chang were engaged in an elaborate and 23 fraudulent scheme, i.e., a conspiracy, to cover up supposed past and ongoing wrongdoing against CatchPlay resulting in breaches of contract, breaches of 24 fiduciary duties and . . .tortious conspiracy. Compl. 38, 40. CatchPlays allegations, which clearly sound in fraud, are precisely the type of assertions that 25 Rule 9(b) prohibits when predicted solely on information and belief. 26 CatchPlay relies primarily on an email communication it attaches as Exhibit 1. That email, however, refers to licenses that SSG obtained. CatchPlay seeks 27 evidence that SSG is permitted to re-license the motion pictures to CatchPlay. At most, the email supports that SSG licensed motion pictures with the intent to re28 license them exclusively to CatchPlay.
18
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15932.3
1 that CatchPlay was the actual licensee. TRO App. at p. 21. If that were the case, 2 there would be no need for SSG to license rights to CatchPlay; CatchPlay would 3 already control the rights by virtue of its contract with the original licensor. That 4 SSG and CatchPlay entered into twenty-five arms-length written licensing 5 agreements eviscerates any claim that SSG was CatchPlays agent or fiduciary. 6 Further, assuming arguendo that SSG is an agent of CatchPlay (it is not), 7 then all of SSGs separate licensing contracts with the studios would be entered on 8 behalf of CatchPlay. But absolutely no contractual privity exists between 9 CatchPlay and the parties. Indeed, Lionsgate, a major Hollywood studio, refused to
10 provide confidential information to CatchPlay regarding their contractual relations 11 with Defendants. Lin Decl 27. Nor has CatchPlay come forward with evidence 12 from even one motion picture licensor that believed it was contracting with 13 CatchPlay, rather than SSG. The evidence is overwhelming that SSG negotiated 14 licenses on its own behalf and re-licensed motion pictures to CatchPlay. 15 Finally, CatchPlay duplicitously claims that an August 17 letter from SSGs 16 counsel acknowledged that SSG had entered into the Acquisition Agreements as 17 CatchPlay Caymans agent on CatchPlay Caymans behalf. Complaint 17:7-8. 18 Nothing could be more distant from the truth. The letter is completely devoid of 19 the word agent, special agent, fiduciary, or any other indicator that any 20 special relationship exists between these parties. Lin Decl., Ex. 44. Nor do the 21 self-serving minutes of a telephone conversation between SSG and CatchPlay 22 support CatchPlays agency theory. Lin Decl. 19. 23 24 25 b. CatchPlay Has No Current Fiduciary Relationship with Chang CatchPlay also fails in its Application even to attempt to support its aiding
26 and abetting breach of fiduciary duty claim. This in unsurprising since the central 27 allegations supporting it in the Complaint are almost exclusively alleged only on 28
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15932.3
1 information and belief. See, e.g., Complaint 40. Accordingly, the Court 2 should take CatchPlays failure even to attempt to support the claim with evidence 3 as an admission that CatchPlay cannot establish the requisite likelihood of success 4 as to this claim. 5 Moreover, the aiding and abetting claim could not, even if supported, justify 6 injunctive relief. The aiding and abetting claim is premised on the breach of an 7 alleged fiduciary duty by Mr. Chang. Complaint at 26:13-28:7. To establish a 8 claim, CatchPlay must show the existence of a fiduciary relationship between 9 Chang and CatchPlay. Neilson v. Union Bank of California, N.A., 290 F. Supp. 2d
10 1101, 1137 (C.D. Cal. 2003) (In order to plead a cause of action for breach of 11 fiduciary duty, there must be shown the existence of a fiduciary relationship, its 12 breach, and damage proximately caused by that breach. The absence of any one of 13 these elements is fatal to the cause of action.). However, by CatchPlays own 14 admission, Chang has not been employed by CatchPlay since at least June 7, 2012. 15 Complaint at 14:23-24. Thus, Chang does not currently owe CatchPlay any 16 fiduciary duty. There is no immediate or future threat of SSG allegedly aiding and 17 abetting a breach, given that there is no longer a fiduciary duty to substantiate the 18 underlying tort. It is therefore no surprise that, in addition to the total lack of 19 factual support, CatchPlay does not seek a TRO based on this claim. 20 21 22 c. CatchPlays Breach of Contract Claim Fails as a Matter of Law The Breach of Contract Claim is pled in the Complaint as in the
23 alternative to CatchPlays claim for Breach of Fiduciary Duty. The Complaint 24 does not request injunctive relief for either the Breach of Contract Claim or the 25 Declaratory Relief Claim, which is presumably (though not clearly) premised on 26 the alleged Breach of Contract. Only now that it has become apparent that its 27 fiduciary duty claims cannot be effectively supported has CatchPlay come to focus 28
20
15932.3
1 on its alleged Breach of Contract Claim and sought to use it as a basis for a TRO. 2 In the first instance, it is difficult to discern what contract CatchPlay even 3 claims has been breached. If the SSG Agency Agreement, that claim fails because 4 CatchPlay cannot prove such a contract exists or what its specific terms might be. 5 Supra at pp. 3:10-6:4. Alternatively, CatchPlay seems to suggest that SSG 6 breached the actual written contracts between SSG and CatchPlay. In essence, 7 CatchPlay concedes that it has not fully performed on its side of the bargain under 8 those contracts, but contends that SSGs termination of CatchPlays rights was an 9 excessive remedy. CatchPlay is wrong.
10
First, CatchPlay downplays its own breach by contending that it breached
11 with respect to only eight films and in an amount less than $717,000 (as if that 12 were some inconsequential amount of money in any event). However, 13 CatchPlays own accounting records sent to SSG establish that that actual amount 14 owed by CatchPlay is $7.7 million. Nagahiro Decl. 5, Ex. 38. It is as if 15 CatchPlay is now pretending that one of those zeros no longer exists. 16 Second, CatchPlay contends that it was not in default because it only failed 17 to pay minimum guarantees and the contract does not describe the failure to pay 18 them as a default. But, CatchPlay concedes that it was required to pay the 19 minimum guarantees even if they were not addressed specifically in the parties 20 contracts. TRO App. at p. 4:18-21. 21 Third, CatchPlay claims that it partially performed so its rights cannot be 22 terminated. Even where a party performs some of its obligations, if a breach is 23 material it constitutes grounds for termination. Whitney Inv. Co. v. Westview Dev. 24 Co., 273 Cal. App. 2d 594, 601-02 (1969). Indeed, in the very case CatchPlay 25 cites for the proposition that SSG cannot terminate, the franchisor was permitted to 26 terminate an agreement after 13 years of performance based upon non-payment of 27 certain royalties. The franchisor was able to terminate; the Court just placed limits 28
21
15932.3
1 on its right to also sue for lost future profits. See Postal Instant Press, Inc. v. 2 Sealy, 43 Cal. App. 4th 1704 (1996).4 CatchPlay has unsurprisingly presented no 3 legal support that its admitted failure to pay over $7.7 million was immaterial. 4 Moreover, the written contracts call for termination of licensing rights as the 5 remedy for default, as CatchPlay itself concedes. 6 Moreover, CatchPlay refuses to acknowledge the many other breaches of the 7 written licenses agreements, any of which standing alone would be material and 8 sufficient to terminate. For example, CatchPlay created unauthorized merchandise 9 and it failed and refused to provide accounting records. Lin Dec. 36; Nagahiro
10 Decl. 16-17, Ex. 40. 11 CatchPlay has failed to prove a breach of contract by SSG, much less one 12 that supports the drastic relief of a TRO. Indeed, it is clear that CatchPlay 13 breached the relevant contracts and owes SSG. 14 15 16 17 5. CatchPlays Request For Emergency Relief Is Procedurally Defective Because It Is Entirely Predicated On A Declaration That Fails to Comply With 28 U.S.C. 1746 CatchPlay did not file a verified complaint; therefore, the evidentiary
18 support for CatchPlays purported request for emergency relief is entirely 19 predicated on the Declaration of Daphne Yang, who purports to be the Executive 20 Director of CatchPlay Cayman. Yet, in proffering the declaration, which Ms. 21 Yang claims to have signed in Taipei, Taiwan, she conspicuously failed to declare 22 that the information set forth therein was signed under penalty of perjury under the 23 laws of the United States of America. Accordingly, CatchPlay failed to abide the 24 plain language of 28 U.S.C. section 1746, which provides that if a declaration is 25 executed outside the United States, the declarant shall state in substantially the 26 27 The other case CatchPlay cites, Comedy Club, Inc. v. Improv West Assoc., 553 F.3d 1277, 1289 (9th Cir. 2009), is in apposite because neither party sought to 28 terminate the contract.
22
15932.3
1 following form: I declare (or certify, verify or state) under penalty of perjury 2 under the laws of the United States of America that the foregoing is true and 3 correct. 28 U.S.C. 1746. The failure to comply with this provision compels this 4 Court to reject the Yang Declaration in its entirety. See Sterling Fifth Associates v. 5 Carpentile Corp., No. 03 Civ. 6569 (HB), 2003 WL 22227960, at *5 (S.D.N.Y. 6 Sept., 26, 2003) (rejecting declaration signed by overseas declaration because, 7 among other things, when executed outside the United States, such an unsworn 8 statement must indicate that the statement is made under penalty of perjury under 9 the laws of the United States of America.) (emphasis in original); see also William
10 W. Schwarzer, et al., California Practice Guide: Federal Civil Procedure Before 11 Trial 12:50, at 12-19. Here, Ms. Yangs failure to abide the plain language of the 12 statute should render her entire declaration inadmissible thereby mandating 13 dismissal of CatchPlays emergency application on that ground alone. 14 15 6. CatchPlay Must Post Multi-Million Dollar Bond
No party may be granted a temporary restraining order without first posting
16 security in such sum as the court deems proper for the payment of such costs and 17 damages as may be incurred or suffered by any party who is found to have been 18 wrongfully enjoined. Fed. Rule Civ. Proc. 65(c). This rule is mandatory and 19 unambiguous. Although the amount of the bond is discretionary, the courts 20 failure to require a bond upon issuing injunctive relief is reversible error. Hoechst 21 Diafoil Co. v. Nan Ya Plastics Corp., 174 F.3d 411, 421 (4th Cir. 1999). The 22 purpose of the bond requirement is to ensure that a wrongfully enjoined party is 23 provided with some security in the event that the injunction is dissolved. Buddy 24 Systems, Inc. v. Exer-Genie, Inc., 545 F.2d 1164, 1167-1168 (9th Cir. 1976). 25 As set forth above, SSG expects to receive royalties ranging from $2-6 26 million on the unreleased motion pictures subject to the Motion filed by CatchPlay, 27 depending on the box office success and print and advertising expense for the 28
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1 picture. Lin Decl. 47. Accordingly, if the Court were to issue a TRO (and SSG 2 strongly maintains that it should not) were issued, CatchPlay should be required to 3 post a bond in this amount. Mead Johnson & Co. v. Abbott Labs., 201 F.3d 883, 4 888 (7th Cir. 2000) (When setting the amount of security, district courts should 5 err on the high side . . . (A)n error in the other direction produces irreparable 6 injury, because the damages for an erroneous preliminary injunction cannot exceed 7 the amount of the bond.). 8 IV. 9
CONCLUSION Based on the foregoing, Defendants respectfully request that CatchPlays ex
10 parte application for a temporary restraining order be denied. 11 12 Dated: September 21, 2012 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
24
WEINGARTEN BROWN LLP Alex M. Weingarten Leslie A. Eggers By: /s/ Alex M. Weingarten
Attorneys for Defendants Studio Solutions Group, Inc. and Johnny Lin
15932.3

Final - Opposition To Ex Parte Application For TRO

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Final - Opposition To Ex Parte Application For TRO

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1 Alex M. Weingarten (SBN 204410) aw@wbllp.com 2 Leslie A. Eggers (SBN 275394) 3 le@wbllp.

WEINGART EN BR OWN LLP

CatchPlay Must Post Multi-Million Dollar Bond .................... 23

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

WEINGART EN BR OWN LLP

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

9 sought, they are not even sufficient to survive a motion to dismiss.

CatchPlays Complaint alleges, assumes and relies almost exclusively on the

CatchPlay Seeks to Cut SSG Out of the Business

The background of SSGs and CatchPlays business relationship is critical to

In addition, as explained above, CatchPlay owed SSG a portion of the

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

Additionally, innocent third parties would suffer from imposition of an

CatchPlay Has Failed To Establish Irreparable Harm

CatchPlay has failed to demonstrate an ultimately likelihood of success on

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

Similarly, CatchPlays claims cannot be sustained because they are predicated,

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

First, CatchPlay downplays its own breach by contending that it breached

DEFENDANTS' OPPOSITION TO PLAINTIFFS EX PARTE APPLICATION FOR TRO

No party may be granted a temporary restraining order without first posting

CONCLUSION Based on the foregoing, Defendants respectfully request that CatchPlays ex

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