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ITN Flix, LLC v. Univision Television Group, Inc.

United States District Court, D. Utah, Central Division

May 31, 2018

ITN FLIX, LLC, Plaintiff,
v.
UNIVISION TELEVISION GROUP, INC., UNIVISION HOLDINGS, INC., UNIVISION COMMUNICATIONS, INC., and EL REY NETWORK, LLC, Defendants.

          David Nuffer, District Judge

          MEMORANDUM DECISION AND ORDER DENYING DEFENDANTS' MOTION FOR RULE 11 SANCTIONS

          DUSTIN B. PEAD, UNITED STATES MAGISTRATE JUDGE

         This matter was referred to the court under 28 U.S.C. § 636(b)(1)(A). (ECF No. 3.) The case involves allegations of copyright violations related to the film Machete. (See ECF No. 46.) Defendants filed a “Motion for Rule 11 Sanctions” seeking dismissal of all claims against Univision Salt Lake City, LLC, Univision Communications Inc., and Univision Holdings, Inc. (collectively “Univision Defendants”), as well as attorney fees expended defending this action. (ECF No. 90). The Motion is fully briefed and ready for the court's decision. (See ECF Nos. 90, 96, 107). The court declines the parties' requests for oral argument, finding no good cause to entertain a hearing.

         STANDARD OF REVIEW

         By signing, filing, submitting, or advocating a written submission to the court, counsel represents “the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.” Fed.R.Civ.P. 11(b)(3). This requires an attorney to conduct an objectively-reasonable investigation of the facts before signing a document filed with the court. See Adamson v. Bowen, 855 F.2d 668, 673 (10th Cir. 1988). Reasonableness of counsel's conduct necessarily depends upon the prevailing facts and circumstances of a given case. See Garth O. Green Enterprises, Inc. v. Harward, No. 2:15-cv-556, 2017 WL 213787, at *7 (D. Utah Jan. 18, 2017) (discussing relevant factors mentioned in the advisory committee notes to Rule 11). The court enjoys broad discretion in determining whether Rule 11 sanctions are appropriate. Adamson at 673.

         PARTIES' ARGUMENTS

         Defendants contend Rule 11 sanctions are warranted because the Univision Defendants did not broadcast Machete at any time, but Plaintiff alleges they have done so every year since 2010. (ECF No. 90 at 8-9[1]). Defendants point out that Plaintiff has not identified any facts to support its allegation that Univision Defendants broadcast Machete, despite discovery requests seeking such information. (Id. at 10). Defendants contend Plaintiff's investigation of the underlying facts was unreasonable under the six factors applied in Garth O. Green Enterprises v. Harward, No. 2:15-cv-556, 2017 WL 213787, *7 (D. Utah Jan. 18. 2017). (Id. at 11-17).

         Plaintiff's former counsel at Parr Brown Gee & Loveless (“Parr Brown”) argues Rule 11 sanctions are not warranted simply because certain factual allegations are ultimately proven untrue, so long as there was some evidentiary basis supporting Plaintiff's claims when they were alleged. (ECF No. 96 at 4). Parr Brown contends it adequately investigated the allegations against the Univision Defendants and found those allegations adequately supported by client testimony and circumstantial evidence. (Id. at 5-15). Parr Brown also contends the motion is procedurally improper insofar as it seeks dismissal with prejudice. (Id. at 15-17). Finally, Parr Brown requests an award of its attorney fees incurred in defending the motion. (Id. at 17).

         ANALYSIS

         As an initial matter, the court notes Defendants' request for dismissal pursuant to Rule 11 is now moot because Judge Nuffer dismissed Plaintiff's claims. (ECF No. 127) The court turns now to the second portion of Defendants' request for sanctions: an award of attorney fees to Univision Defendants.

         a. The court denies Defendants' request for attorney-fee sanctions because Defendants have not established a violation of Rule 11

         The court declines to award Univision Defendants their attorney fees because Defendants have not shown Plaintiff's claims lacked evidentiary support or that counsel failed to reasonably investigate Plaintiff's claims. “[T]he court should not ordinarily have to explain its denial of a motion for sanctions.” Fed.R.Civ.P. 11, advisory committee note. Nonetheless, the court does so here because it believes an explanation may benefit future parties and counsel when they consider whether to file Rule 11 motions.

         Univision Defendants take issue with the following allegations in the ...


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