"#$%& '()*&)+
!"#"$ &"'()*+ , -*'*./$
,-./.012 34 5678/9 "16:; "<
1
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No.: CV 16-04109-AB (PLAx) Date: December 29, 2016 Title: Disney Enterprises, Inc. et al v. VidAngel Inc
.
Present: The Honorable
ANDRÉ BIROTTE JR., United States District Judge
Carla Badirian N/A Deputy Clerk Court Reporter Attorneys Present for Plaintiffs: Attorneys Present for Defendants: None Appearing None Appearing
Proceedings: [In Chambers] Order DENYING Defendant’s Ex Parte Application to Stay Preliminary Injunction Pending Appeal Or Alternatively, Pending Decision by the Ninth Circuit On Stay Pending Appeal (Dkt. No. 147)
This matter is before the court on Defendant VidAngel, Inc.’s (“VidAngel”) ex parte application to stay the Court's December 12, 2016 preliminary injunction order granting Plaintiffs’ Disney Enterprises, Inc., Lucasfilm Ltd. LLC, Twentieth Century Fox Film Corporation, and Warner Bros. Entertainment Inc. (“Plaintiffs”) Motion for Preliminary Injunction. (Dkt. No. 144, “Order.”) The Courts Order enjoined VidAngel from copying, streaming, transmitting or otherwise publicly performing or displaying any of Plaintiffs’ copyrighted works. (
Id.)
VidAngel was also enjoined from circumventing technological measures protecting Plaintiffs’ copyrighted works or engaging in any activity that violates Plaintiffs anti-circumvention right under § 1201 of the Copyright Act, 17 U.S.C. §1201(a), or infringing Plaintiffs’ exclusive rights under § 106 of the Copyright Act, 17 U.S.C. § 106. (
Id
.) VidAngel requests that the Order be stayed in its entirety pending resolution of its appeal of the Court's Order to the Ninth Circuit. VidAngel
!"#$ &'()*+,*-.(-/*01*230 45+67$89 ()) :;<$= (&>&/>() 2"?$ ( 5@ A 2"?$ B4 C'A&/A
"#$%& '()*&)+
!"#"$ &"'()*+ , -*'*./$
,-./.012 34 5678/9 "16:; "<
2
alternatively moves this Court to stay its Order pending VidAngel's motion to the Ninth Circuit for a stay of the injunction which VidAngel intends to file should the instant motion be denied. For the reasons set forth below, the court
DENIES
VidAngel's motion for a stay in its entirety.
I.
LEGAL STANDARD
Federal Rule of Civil Procedure 62(c) provides that "[w]hile an appeal is pending from an interlocutory order or final judgment that grants . . . an injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or other terms that secure the opposing party's rights." In determining whether to issue a stay pending an interlocutory appeal, courts must consider: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.”
Hilton v. Braunskill
, 481 U.S. 770, 776, 107 S. Ct. 2113, 95 L. Ed. 2d 724 (1987). "The first two factors of the traditional standard are the most critical."
Nken v. Holder
, 556 U.S. 418, 434, 129 S. Ct. 1749, 173 L. Ed. 2d 550 (2009). In applying these factors, the Ninth Circuit employs a "sliding scale" approach whereby "the elements of the . . . test are balanced, so that a stronger showing of one element may offset a weaker showing of another."
Alliance for the Wild Rockies v. Cottrell
, 632 F.3d 1127, 1131 (9th Cir. 2011);
see also Leiva-Perez v. Holder
, 640 F.3d 962, 964-66 (9th Cir. 2011) (noting that the sliding scale test for preliminary injunctions described in
Alliance for the Wild Rockies
is the "essentially the same" as the test used in the stay context, and holding that this approach "remains in place" following the Supreme Court's decision in
Nken
). The Ninth Circuit “has adopted and applied a version of the sliding scale approach under which a preliminary injunction could issue where the likelihood of success is such that ‘serious questions going to the merits were raised and the balance of hardships tips sharply in [plaintiff's] favor.’”
Alliance for the Wild Rockies
, 632 F.3d at 1131-32. "Serious questions" are those which are "substantial, difficult, and doubtful, as to make them fair ground for litigation and thus for more deliberative investigation."
Senate of State of Cal. v. Mosbacher
, 968 F.2d 974, 977-78 (9th Cir. 1992) (citing
Gilder v. PGA Tour
, Inc., 936 F.2d 417, 422 (9th Cir.1991));
see also
Republic of the Philippines v. Marcos
, 862 F.2d 1355, 1362 (9th Cir. 1988) ("'serious questions' refers to questions which cannot be resolved one way or the other at the hearing on the injunction and as to which the court perceives a need to preserve the status quo lest one side prevent resolution of the questions or execution of any judgment by altering the status quo").
!"#$ &'()*+,*-.(-/*01*230 45+67$89 ()) :;<$= (&>&/>() 2"?$ & 5@ A 2"?$ B4 C'A&/)
"#$%& '()*&)+
!"#"$ &"'()*+ , -*'*./$
,-./.012 34 5678/9 "16:; "<
3
II.
DISCUSSION a.
Likelihood of Success on the Merits
VidAngel's application for a stay raises the same arguments made in its original opposition to Plaintiffs' motion for a preliminary injunction. (Dkt. No. 42) The Court addressed each of VidAngel's arguments in its Order, and will not repeat the analysis here. For the reasons set forth in the Order, the Court determined that the Plaintiffs have demonstrated a strong likelihood of success on the merits of their claims that VidAngel’s service violates Plaintiffs’ rights pursuant to § 1201(a) of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 1201(a), and infringes Plaintiffs’ exclusive rights under § 106 of the Copyright Act,
id
. § 106. A district court's decision regarding preliminary injunctive relief is subject to limited review.
Harris v. Bd. of Supervisors, L.A. Cnty
, 366 F.3d 754, 760 (9th Cir. 2004) (review "limited and deferential”) The Ninth Circuit will reverse a district court's issuance of a preliminary injunction only if the district court abused its discretion by basing its decision on an erroneous legal standard or on clearly erroneous factual findings.
Alliance for the Wild Rockies,
632 F.3d at 1131. Moreover, the Court’s factual findings are reviewed for clear error and will not be reversed "as long as [the] findings are plausible in light of the record viewed in its entirety.”
Nat'l Wildlife Fed'n v. Nat'l Marine Fisheries Serv
., 422 F.3d 782, 795 (9th Cir. 2005). Considering the deferential standard of review and the Court’s determination that the Plaintiffs have demonstrated a strong likelihood of success on the merits of its claims, VidAngel has not shown that it is likely to prevail on the merits of the appeal.
b.
Balance of the Hardships
VidAngel raises similar arguments from its original opposition regarding the harms it will suffer if the injunction is not stayed. Specifically, VidAngel contends that the injunction “threatens to destroy VidAngel’s unique market position and its market value” and will cause “serious financial loss.” (Dkt. No. 147 at 12.) VidAngel also asserts that the injunction threatens to damage customer goodwill. (
Id.
) The Court addressed these arguments by noting that “[Defendants] cannot complain of the harm that will befall it when properly forced to desist from its infringing activities."
Triad Sys. Corp. v. Southeastern Express Co
., 64 F.3d 1330, 1338 (9th Cir. 1995). “Where the only hardship that the defendant will suffer is lost profits from an activity which has been shown likely to be infringing, such an argument in defense 'merits little equitable consideration [on an appeal from a preliminary injunction].'"
Id
. (citing
Concrete Mach. Co. v. Classic Lawn Ornaments, Inc.,
843 F.2d 600, 612 (1st Cir. 1988);
accord Apple Comput., Inc. v. Franklin
!"#$ &'()*+,*-.(-/*01*230 45+67$89 ()) :;<$= (&>&/>() 2"?$ D 5@ A 2"?$ B4 C'A&/E