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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK SIMONE KELLY-BROWN and OWN YOUR POWER COMMUNICATIONS, INC., Plaintiffs, v. OPRAH WINFREY, HARPO PRODUCTIONS, INC., HARPO, INC., HEARST CORPORATION, HEARST COMMUNICATIONS, INC., Defendants. PLAINTIFFS REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION SEEKING LEAVE TO AMEND COMPLAINT AND JOIN OWN, LLC AND HARPO PRINT, LLC AS DEFENDANTS Hon. Paul A. Crotty, U.S.D.J. Hon. James L. Cott, U.S.M.J. Civil Action No. 1:11-cv-07875-PAC (ECF Case)

Patricia Lawrence-Kolaras THE PLK LAW GROUP, P.C. 284 U.S. Route 206 Bldg. E Suite 10 Hillsborough, NJ 08844 Tel: (908) 431-3108 Fax: (908) 431-3109 patricia@plklawgroup.com Fernando M. Pinguelo Robert E. Levy SCARINCI HOLLENBECK, LLC 1100 Valley Brook Avenue Lyndhurst, NJ 07071 Tel: (732) 568-8374 Fax: (732) 568-8375 fpinguelo@scarincihollenbeck.com rlevy@scarincihollenbeck.com Attorneys for Plaintiffs Simone Kelly-Brown and Own Your Power Communications, Inc.

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TABLE OF CONTENTS
TABLE OF AUTHORITIES ....................................................................................................................... iii ARGUMENT ................................................................................................................................................ 3 I. Defendants Failure to Comply With Their Initial Disclosure Obligations Creates Sufficient Good Cause For The Court To Grant Plaintiffs Request................................................................................... 4 II. Plaintiffs Interrogatories Contained Numerous Demands Which Should Have Produced Discovery Identifying OWN and/or Harpo Print ...................................................................................... 5 III. Mere Knowledge That a Company Exists is Insufficient to Plausibly State a Claim for Trademark Infringement and Justice Requires Joinder ............................................................................. 7 A. Defendants Removed Own Your Power From the Website When It Was Ostensibly Owned and Controlled By OWN....................................................................................................................... 8 B. Justice Requires Joinder of OWN and Harpo Print ...................................................................... 9

CONCLUSION ........................................................................................................................................... 10

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TABLE OF AUTHORITIES Cases Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................................................... 7 Capitol Records, LLC v. Vimeo, LLC, No. 09-cv-10101, 2013 U.S. Dist. LEXIS 181882 (S.D.N.Y. Dec. 31, 2013) .......................... 3 Electronic Switching Indus. v. Faradyne Elecs. Corp., 833 F.2d 418 (2d Cir. 1987) ...................................................................................................... 10 Freeman v. Complex Computing Co., 119 F.3d 1044 (2d Cir. 1997) ...................................................................................................... 9 In re Tyson, 412 B.R. 623 (Bankr. S.D.N.Y. 2009) ...................................................................................... 10 Kwon v. Yun, 606 F. Supp. 2d 344 (S.D.N.Y. 2009) ........................................................................................ 4 Parker v. Columbia Pictures Indus., 204 F.3d 326 (2d Cir. 2000) ........................................................................................................ 3

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INTRODUCTION In their haste to insult and revert to ad hominem attacks on Plaintiffs in their opposition to the motion (Opposition), Defendants have contradicted themselves numerous times and exposed their strategy to hide the full nature and scope of their Own Your Power Campaign.1 Generally, when allegations are made against an incorrect party who knows the identity of the responsible party, the accused would naturally point the finger where it belongs. The Defendants did not do this until now. Instead, Defendants have: (i) intentionally withheld information about OWN LLC (OWN) and Harpo Print, LLC (Harpo Print) until after the end of the time period set by the Court to add new parties; (ii) deliberately withheld evidence from Plaintiffs; (iii) obstructed Plaintiffs efforts to depose witnesses; and (iv) presented misstatements on numerous occasions to misdirect the Courts attention, discredit Plaintiffs, and conceal their conduct via abuse of the corporate form, substantiated as follows: Contradictions and/or Misstatements 1. Defendants contend that OWN solely controls and owns oprah.com (Website).

Documented Contradiction: Defendants have repeatedly demonstrated control of the Website by removing infringing content from the Website and selling tickets to event(s) on the Website. See Dkt. No. 8; Dkt. No. 18 at 7; Dkt. No 19, Ex. 6 at 6:25; Dkt. No. 12, Exs. C and H. 2. Defendants state it is patently false that Plaintiffs sought leave to file a motion to

compel. Opp. at 7. Documented Contradiction: Plaintiffs January 31 Letter Motion for Conference regarding anticipated motion to compel discovery sought such leave.2 Dkt. No. 109.

For example, Mr. Babcock has summed up the Defendants Event as nothing but a cocktail party, ( see e.g., February 26, 2014 pre-trial conference (Feb. 26 Conf.) 8:25) despite having full knowledge that it was a motivational event with celebrity panelists, and part of a coordinated multimedia campaign which generated millions of dollars.
2

The February 26, 2014 hearing was scheduled to address Plaintiffs January 31 request (Dkt. No. 110), but Defense counsel misrepresented that such hearing was to address only Plaintiffs February 3 letter.

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3.

Defendants contend that only Plaintiffs requested extension of written discovery. Opp.

at 1. Documented Contradiction: Plaintiffs actually only requested an extension of document demands and it was Defendants who requested an extension for interrogatories. Ex. C-1A at 2. 4. Defendants contend Plaintiffs did not request documents until Christmas Eve, December

24, 2013. Feb. 26 Conf. at 13:7. Documented Contradiction: Plaintiffs initial document requests and interrogatories were submitted on September 13, 2013, and October 1, 2013, respectively. Supplemental Declaration of Patricia Lawrence-Kolaras (Kolaras Decl.), Ex G. 5. Defendants contend that the protective order delayed Defendants from responding to

Plaintiffs discovery requests. Opp. at 8-9. Documented Contradiction: Defendants did not submit their draft protective order until December 6, 2013 (Kolaras Decl., Ex. H), and furthermore, non-confidential responses were not affected, such as responses to interrogatories. Accordingly, Harpo Productions submitted non-confidential documents on December 9, 2013, 10 days before the entry of the protective order. 6. Defendants contend that they were only required to name OWN and Harpo Print in their

initial disclosures if they intended to use the relevant information about them in this lawsuit, therefore making it proper for them to withhold that information. Opp. at 7. Documented Contradiction: Defendants have used such information to their advantage and to Plaintiffs detriment on several occasions, including the February 26 conference, where they asserted that they are not responsible for OWNs use of the Website. See e.g., Feb. 26 Conf. at 5:25. 7. Defendants contend Plaintiffs did not make discovery requests implicating OWN and/or

Harpo Prints involvement. Opp. at 5. Documented Contradiction: Plaintiffs interrogatories made multiple requests for responsive information which should have revealed involvement of

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OWN and/or Harpo Print, including a request to the Harpo Defendants to identify documents evidencing your relationship with OWN LLC. Kolaras Decl. Ex. G. at 8 and 19 (No. 11). 8. Defendants contend that Plaintiffs delayed filing their Motion until six weeks after close

of fact discovery. Opp. at 3. Documented Contradiction: Plaintiffs notified the Court on February 3, 2014 that they anticipated adding OWN and Harpo Print due to the evidence suddenly produced by Defendants. See Dkt. No. 111 at 2. Plaintiffs were required to wait until after the February 26 conference to file their motion. Judge Crotty Individual R. of Practice 3A. Indeed, in addition to Defendants strategy of concealing the involvement of OWN and Harpo Print until months after the November 4 deadline, the numerous misstatements made by Defendants at the February 26 hearing and in their opposition to this Motion give even greater cause for this Court to grant Plaintiffs Motion. ARGUMENT Although Defendants claim that Rule 15 is the wrong legal standard, the Second Circuit case they rely upon acknowledges that Rule 15 and Rule 16 work together in this instance. Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000). The Second Circuit merely stated that a court does not abuse its discretion in denying leave after the deadline set in a scheduling order where the moving party has not established good cause. Id. Plaintiffs good cause was demonstrated in their original brief, and is highlighted by Defendants dubious actions in furtherance of concealing the involvement of OWN and Harpo Print. Furthermore, this district has ruled on amendments to the complaint with only a citation to rule 15, even where a scheduling order is in place. See Capitol Records, LLC v. Vimeo, LLC, No. 09-cv-10101, 2013 U.S. Dist. LEXIS 181882, at *25-31 (S.D.N.Y. Dec. 31, 2013)(granting leave to amend the complaint more than three years past the time period set in the scheduling order). In

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Capitol Records, the court noted that although Plaintiffs did not raise the issue of amendment again until [two years after the original scheduling order], the delay was justified in part because Defendants did not produce certain documents until [10 months after the scheduling order]... Id. Notably, the opinion was silent as to Rule 16, and the court relied only on Rule 15s standard that leave should be freely given when justice so requires. Id.3 I. Defendants Failure to Comply With Their Initial Disclosure Obligations Creates Sufficient Good Cause For The Court To Grant Plaintiffs Request

The Court should take notice that although Defendants present case law and Advisory Committee Notes stating that a party must only disclose witnesses or documents that it intends to use, Defendants never argue that they do not intend to use the information relating to OWN and Harpo Print which was withheld from Plaintiffs until after the end of fact discovery, and it is inconceivable that they were not planning to use such evidence in furtherance of their defense, including at the dispositive motion phase of this case. In fact, they have already used this evidence in: (1) not producing Website documents, (2) convincing the Court not to compel the Websites financials (Feb. 26 Conf. at 5:25), and (3) at least one expert report. It is becoming apparent that Defendants intentionally withheld such relevant information regarding OWN and Harpo Print until long after the Courts ordered period for joining additional parties, and then suddenly dropped that evidence on Plaintiffs at the end of fact discovery or shortly thereafter so that it could be included in Defendants upcoming filings and at trial. Condoning such blatant conduct by a party would be manifestly unjust. Again, this is not the only instance where Defendants withheld key evidence from Plaintiffs. As previously explained,

The Capitol Records court also noted that a party should be allowed to amend its complaint where the party would otherwise be free to file a new action to recover its claims. Id. In this instance, such a denial would simply force Plaintiffs to file a new cause of action against OWN and Harpo Print. Additionally, this court may grant leave to amend and at the same time consider that amendment on a motion for summary judgment. Kwon v. Yun, 606 F. Supp. 2d 344, 364 (S.D.N.Y. 2009).

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at least two documents created by Defendants that are fatal to their defenses were deliberately withheld and only obtained by Plaintiffs through third parties or an alleged accident by one of Harpos employees. See e.g. Dkt. No. 130, Ex. D. Likewise, Plaintiffs have reason to believe that Defendants are currently withholding an agreement between Hearst and OWN (and potentially Harpo) which dictates the terms under which each may exercise some measure of control over the Website. The almost certain existence of this agreement is evidenced by: (1) a previous agreement between Hearst and Harpo regarding the Website (HCI_OYP_001030-65); (2) a May, 2011 agreement whereby Hearst commissioned a web application for the Website (HCI_OYP_000707-752); and (3) representations and actions by the Defendants shortly after Plaintiffs filed their Complaint and Preliminary Injunction in New Jersey District Court, whereby Defendants demonstrated the ability to remove and alter content on the Website upon short notice. Dkt. No. 8 at 2; Dkt. No. 19, Ex. 6 at 7:9. In sum, Defendants failure to comply with their Initial Disclosure obligations, likely done intentionally to deny Plaintiffs access to critical discovery, alone gives sufficient good cause for the Court to grant Plaintiffs Motion. Any prejudice that the Defendants claim they will suffer as a result of their own conduct should not be considered by the Court. Similarly, any anticipated inconvenience to the Court or Plaintiffs can and should be addressed with the imposition of sanctions against Defendants. II. Plaintiffs Interrogatories Contained Numerous Demands Which Should Have Produced Discovery Identifying OWN and/or Harpo Print

As an initial matter, Defendants make another misstatement when they stated that [a]s for written discovery, it was Plaintiffs who requested that the deadline for responding be extended to November 13, 2013. Opp. at 1. Plaintiffs only requested an extension of document

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demands. Defendants requested an extension for interrogatory responses. See e.g., Opp., Ex. C1A (attaching an October 10, 2013 e-mail from Plaintiffs counsel to Defense counsel confirming that Plaintiffs requested an extension on document demands only). It wasnt until October 31, one day before the deadline, that Defense counsel contacted Plaintiffs to request that the responses for interrogatories also be moved to the November 13 date, purportedly for the convenience of the parties. Id. Tellingly, Defendants do not address the substance of Plaintiffs interrogatories, many of which sought information that connected OWN and/or Harpo Print to the allegations in this lawsuit. For example, Plaintiffs Interrogatories to the Harpo Defendants contained the following request: Identify all documents evidencing your relationship with OWN LLC Kolaras Decl. Ex. G at 8 and 19 (No. 11). In retrospect, this request should have produced a response from Harpo Defendants identifying the document whereby Harpo Productions assigned control and/or ownership of the Website to OWN, particularly since that very Website was a significant aspect of the complained of activities. Not surprisingly, the Harpo Defendants withheld any information about such a document, but then suddenly produced this very document immediately after the close of fact discovery, months after Plaintiffs would have been able to rely on its existence to add OWN as a defendant.4 Another request stated: Identify any and all documents and persons involved in the Sponsors participation in the use of Own Your Power by you or any other Defendant(s), including but not limited to sponsorship, partnership, or licensing agreements. Id., at 8 and 19 (No. 14). In this particular instance, both OWN and Harpo Print should have been identified. If, as Defendants claim, OWN controls and owns the Website, then they would have been a
4

Similarly, Plaintiffs requested that the Hearst Defendants identify all documents describing your relationship with the Harpo Defendants. However, Hearst did not comply until days before close of fact discovery.

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person5 (and in fact the most prominent such person) involved in the Sponsors participation in the Defendants use of Own Your Power on the Website. At a minimum, Defendants could have responded by stating that OWN owned and operated the Website. Why didnt they? Because, just as Plaintiffs have argued, OWN is actually simply another shell or alter ego of Harpo, and they did not want Plaintiffs to know of OWNs involvement in the Website until long after the period to add additional defendants closed. Likewise, Hearst Defendants should have identified any licensing agreements between them and Harpo Print which allow for the sharing of revenues from advertisers in the Magazine, such as the sponsors referenced in the interrogatory. In their Motion, Plaintiffs cited numerous other interrogatories which should have produced a response identifying OWN or Harpo Print. See Dkt. No. 129 at 3 n.4; Kolaras Decl., Ex. G. III. Mere Knowledge That a Company Exists is Insufficient to Plausibly State a Claim for Trademark Infringement and Justice Requires Joinder

According to Defendants, mere knowledge of Harpo Print and OWN was sufficient to sue them. See Defendants Response at 3 (Many a plaintiff has sued a party with far less knowledge). Yet, a complaint must be plausible to survive a motion to dismiss. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). Mere knowledge that OWN and Harpo Print are companies in existence does not plausibly allege involvement in the alleged infringement here.6 With regard to the naming of Chicos, Wells Fargo and Clinique to this litigation, these parties were at least visibly involved in Defendants Campaign7. Moreover, Chicos produced a document from Defendants (Dkt. No. 130, Ex. D) which offered a proposal in regard to Own

Person is defined in Plaintiffs interrogatories to include corporate entities.

This Court previously dismissed three other corporate entities for insufficient allegations of wrongdoing, even where Plaintiffs presented evidence of involvement on their part in the complained of activities. Dkt. No. 57.
7

E.g., Chicos, Wells Fargo and Clinique all held themselves out as partners of the Campaign in Advertisements appearing in the October and December 2010 issues of the Magazine.

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Your Power. Defendants breached their legal duty to Plaintiffs by failing to provide this document in response to interrogatories requesting that they [i]dentify any and all documents and persons involved in the Sponsors participation in the use of Own Your Power by you or any other Defendant(s). See Kolaras Decl., Ex. G at 8 and 19 (Request Nos. 14). A. Defendants Removed Own Your Power From the Website When It Was Ostensibly Owned and Controlled By OWN

Importantly, Defendants initially contended that their uses of Own Your Power on the Website were merely a recap of the Event (See, e.g., Dkt. No. 51 at 6, n. 3), but now8, they attempt to deny any responsibility for the use of Own Your Power on this Website by disclosing that another company OWN is the entity which actually owns and controls the Website. See, e.g., Gugar Dep. at 10:12, Jan. 20, 2014. This contention that OWN controls the Website, however, is contradicted by the record. For example, although Defendants maintain that OWNs offices are located in California (Dkt. No. 85-7 at 3), they have previously conceded that use of [the phrase own your power] on the [Website] took place in Chicago. Dkt. No. 17-1 at 7-8. Notably, the Harpo Defendants are based in Chicago. Notwithstanding, Defendants refuse to admit that they exercise control over OWN (See Opp. at 13, n. 6) and, by extension, Defendants are also refusing to admit that they exercise any control over the Website. Nevertheless, Defendants exercised substantial authority over the Website when they swiftly removed uses of Own Your Power from its domain in August and September of 2011 to avoid a preliminary injunction and, later, to avoid a temporary restraining order. See, e.g., Dkt. No. 8 at 2 (Plaintiffs counsel cited two online uses, one on the Oprah.com website and another on the Hearst.com website Defendants removed those uses); see also
8

In light of the Second Circuits skepticism of Defendants fair use arguments as they relate to the uses of Own Your Power on the Website (See Kolaras Decl., Ex. I at 20:8 (I start to have trouble when I get to the website because on the website Own Your Power is right there at the top)), Defendants have seemingly made the strategic decision to try and distance themselves from the Website.

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Dkt. No. 19, Ex. 6 at 7:9 ( it was an inadvertent posting that occurred But we did take it down within a matter of hours) (emphasis added). Additionally, Judge Chesler relied upon representations made by Defendants which indicated that they had the requisite authority and control over the Website to prevent its future use of Own Your Power. See Dkt. No. 8 at 2 (Defendants had no plans to make further use of the phrase.); see also Dkt. No. 19, Ex. 6 at 25:21 (The Court also understands that defendants have indicated that they are making their best efforts to make sure that they do not use the phrase in question). Tellingly, these removals of Own Your Power from the Website in late 2011, and Defendants concomitant representations to Judge Chesler which indicate that they had the authority to restrain the Websites further uses of Own Your Power, all took place after January 1, 2011 the date Defendants have identified as being the commencement of OWNs control and ownership of the Website. See Gugar Dep. at 10:24, Jan. 20, 2014. B. Justice Requires Joinder of OWN and Harpo Print

This demonstrated authority to remove uses of Own Your Power from the Website within a matter of hours despite the fact that that Website was ostensibly owned by OWN at the time clearly indicates a considerable degree of domination and control by the Defendants over OWN. See Freeman v. Complex Computing Co., 119 F.3d 1044, 1053 (2d Cir. 1997). While the present Motion merely seeks leave so that OWN and Harpo Print may be joined to this litigation, and the alter ego veil-piercing theory has thus far only been advanced to demonstrate a total lack of prejudice to Defendants if these two parties are joined, the requisite elements to pierce the corporate veil will be established in the event the present Motion is denied.

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For instance, Defendants opposition to join OWN is intended to cleave a significant portion of Plaintiffs allegations from this litigation (i.e. the unauthorized uses of Own Your Power on the Website). Such an outcome would be an egregious circumvention of this Courts purview to decide this case on the merits while simultaneously authorizing Defendants breach of their legal duty to provide initial disclosures and answer Plaintiffs Interrogatories. This breach is in contravention of Plaintiffs legal rights to obtain such information and in conjunction with Defendants dominance over OWN failure to join this party may proximately cause Plaintiffs to lose the ability to police its trademark in connection with the unauthorized uses on the Website. See Electronic Switching Indus. v. Faradyne Elecs. Corp., 833 F.2d 418, 424 (2d Cir. 1987); In re Tyson, 412 B.R. 623, 643 (Bankr. S.D.N.Y. 2009) (In any event, the relevant inquiry is whether the corporate form was abused and used to conceal true facts). Here, Defendants have abused the corporate form to conceal OWNs ownership of the Website and Harpo Prints involvement in the Magazine until after this Courts November 4, 2013 deadline to join additional parties. Under these circumstances, justice requires joinder. CONCLUSION For the foregoing reasons, Plaintiffs Motion for Leave to File an Amended Complaint to Join OWN and Harpo Print should be granted. Respectfully submitted, Dated: April 3, 2014 THE PLK LAW GROUP, P.C. /s/ Patricia Lawrence-Kolaras Patricia Lawrence-Kolaras THE PLK LAW GROUP, P.C. Fernando M. Pinguelo Robert E. Levy SCARINCI HOLLENBECK, LLC Attorneys for Plaintiffs

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