Soundgarden Et Al V UMG Motion To Stay Discovery

Case 2:19-cv-05449-JAK-JPR Document 28-1 Filed 08/21/19 Page 1 of 29 Page ID #:981
1 SCOTT A. EDELMAN, SBN 116927

sedelman@gibsondunn.com
2 DEBORAH L. STEIN, SBN 224570
dstein@gibsondunn.com
3 NATHANIEL L. BACH, SBN 246518
nbach@gibsondunn.com
4 GIBSON, DUNN & CRUTCHER LLP
333 South Grand Avenue
5 Los Angeles, CA 90071
Telephone: 213.229.7000
6 Facsimile: 213.229.7520
7 Attorneys for Defendant
UMG RECORDINGS, INC.
8
9 UNITED STATES DISTRICT COURT
10 CENTRAL DISTRICT OF CALIFORNIA
11 WESTERN DIVISION
12 SOUNDGARDEN, a Partnership; TOM CASE NO. 2:19-cv-05449-JAK-JPR
WHALLEY, as Trustee of the Afeni
13 Shakur Trust; JANE PETTY; STEVE DEFENDANT UMG RECORDINGS,
EARLE, individually and on behalf of INC.’S MEMORANDUM OF POINTS
14 all others similarly situated, AND AUTHORITIES IN SUPPORT
OF ITS MOTION TO STAY
15 Plaintiffs, DISCOVERY
16 v. Hearing:
Date: November 4, 2019
17 UMG RECORDINGS, INC., a Time: 8:30 a.m.
Delaware corporation, Place: Courtroom 10B
18 First Street Courthouse
Defendant. 350 W. First Street
19 Los Angeles, CA 90012
Judge: Hon. John A. Kronstadt
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1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ................................................................................................ 1
4 II. BACKGROUND .................................................................................................. 4
5 III. LEGAL STANDARD .......................................................................................... 8
6 IV. ARGUMENT........................................................................................................ 9
7 A. Good Cause Exists to Stay Discovery Because Plaintiffs Have
Twice Failed to State a Viable Claim and Further Amendment
8 Would Be Futile ....................................................................................... 10
9 1. The Plain Language of Plaintiffs’ Contracts Undermine Their
Breach of Contract Claims ............................................................. 10
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2. Plaintiffs’ Newly Pleaded Tort Claims Are Similarly
11 Deficient and Cannot Form the Basis for Plaintiffs’
Sweeping Discovery Requests ....................................................... 15
12
3. Even After UMG Informed Plaintiffs’ Counsel That No
13 Master Recordings Embodying Several Plaintiffs’
Performances Were Lost, Plaintiffs’ Counsel Still Named
14 Them Without a Factual Basis to Do So ....................................... 18
15 4. Plaintiffs’ Claims Are Time Barred in Any Event ........................ 20
16 B. Plaintiffs’ Extraordinarily Burdensome Initial Discovery Requests
Confirm the Appropriateness of the Requested Stay ............................... 22
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C. Plaintiffs Will Suffer No Prejudice from a Stay of Discovery ................ 24
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V. CONCLUSION .................................................................................................. 24
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1 TABLE OF AUTHORITIES
2 Page(s)
3 Cases
4 Allen v. Similasan Corp.,
5 96 F. Supp. 3d 1063 (S.D. Cal. 2015) ...................................................................... 21
6 Ashcroft v. Iqbal,
7 556 U.S. 662 (2009).................................................................................................. 23
8 Bell Atl. Corp. v. Twombly,

550 U.S. 544 (2007).................................................................................................... 8
9
10 Careau & Co. v. Sec. Pac. Bus. Credit, Inc.,
222 Cal. App. 3d 1371 (1990) .................................................................................. 15
11
Carter v. Oath Holdings, Inc.,
12 2018 WL 3067985 (N.D. Cal. June 21, 2018)............................................................ 8
13
Cooper v. Sony Records Int’l,
14 2001 WL 1223492 (S.D.N.Y. Oct. 15, 2001)........................................................... 18
15
Farmers Ins. Exchange v. Zerin,
16 53 Cal. App. 4th 445 (1997) ..................................................................................... 16
17 Gerawan Farming, Inc. v. Rehrig Pac. Co.,
18 2012 WL 691758 (E.D. Cal. Mar. 2, 2012).............................................................. 16
19 Gibbs v. Carson,
2014 WL 172187 (N.D. Cal. Jan. 15, 2014)............................................................... 8
20
21 Greenberg Bros., Inc. v. Ernest W. Hahn, Inc.,
246 Cal. App. 2d 529 (1966) .................................................................................... 13
22
Grisham v. Philip Morris U.S.A., Inc.,
23
40 Cal. 4th 623 (2007) .............................................................................................. 20
24
GTE Wireless, Inc. v. Qualcomm, Inc.,
25 192 F.R.D. 284 (S.D. Cal. 2000) ................................................................................ 8
26
H.S. Crocker Co. v. McFaddin,
27 148 Cal. App. 2d 639 (1957) .................................................................................... 14
28
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TABLE OF AUTHORITIES
1 (continued)
2 Page(s)
3 Haaland v. Garfield Beach CVS, LLC,
4 2018 WL 5086493 (C.D. Cal. June 6, 2018) (Kronstadt, J.).................................... 20
5 Hamilton v. Rhoads,
2011 WL 5085504 (N.D. Cal. Oct. 25, 2011) ............................................................ 8
6
7 Jarvis v. Regan,
833 F.2d 149 (9th Cir. 1987) ...................................................................................... 8
8
Kim v. Westmoore Partners, Inc.,
9 201 Cal. App. 4th 267 (2011) ................................................................................... 16
10
Little v. City of Seattle,
11 863 F.2d 681 (9th Cir. 1988) .................................................................................. 8, 9
12 Long v. Keller,
13 104 Cal. App. 3d 312 (1980) .................................................................................... 13
14 Moua v. Int’l Bus. Machs. Corp.,
15 2012 WL 5373401 (N.D. Cal. Oct. 30, 2012) .......................................................... 23
16 In re Nexus 6p Prod. Liab. Litig.,

2017 WL 3581188 (N.D. Cal. Aug. 18, 2017) ........................................................... 9
17
18 Patten v. Deschamps,
2018 WL 6307895 (C.D. Cal. Sept. 7, 2018) ................................................... 8, 9, 21
19
Peel v. BrooksAmerica Mortg. Corp.,
20
788 F. Supp. 2d 1149 (C.D. Cal. 2011) .................................................................... 17
21
Rutman Wine Co. v. E&J Gallo Winery,
22 829 F.2d 729 (9th Cir. 1987) .................................................................................. 4, 9
23
Top Rank, Inc. v. Haymon,
24 2015 WL 9952887 (C.D. Cal. Sept. 17, 2015) ....................................................... 3, 8
25 UMG Recordings, Inc. v. NBCUniversal Media LLC,
26 L.A. Sup. Ct. No. 106213 ........................................................................................... 4
27 Union Carbide Corp. v. Super. Ct.,
36 Cal. 3d 15 (1984) ................................................................................................. 20
28
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TABLE OF AUTHORITIES
1 (continued)
2 Page(s)
3 Vivendi S.A. v. Axa Ins. Co.,
4 Case No. 2:09-cv-8893-DDP-PLA (C.D. Cal.) .......................................................... 4
5 Wood v. McEwen,
644 F.2d 797 (9th Cir. 1981) ...................................................................................... 8
6
7 Statutes
8 Cal. Civ. Code § 1710(3) ............................................................................................... 18

9 Other Authorities
10 Interview with Steve Hoffman (May 9, 2012),
11 http://judygarlandnews.com/2012/ 05/09/interview-with-steve-
hoffman/ ...................................................................................................................... 7
12
13 Jody Rosen, The Day the Music Burned, NYT MAG. (June 11, 2019) ........................... 6
14 May 2016 Code of Conduct, available at

https://www.universalmusic.com/wp-content/uploads/2018/03/Code-
15
of-Conduct.pdf .......................................................................................................... 16
16
Universal Music Group’s Vintage Recordings Head to Library of
17 Congress (Jan. 10, 2011),
18 https://latimesblogs.latimes.com/music_blog/2011/01/universal-music-
library-of-congress-bing-crosby-ella-fitzgerald.html ................................................. 7
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1 I. INTRODUCTION
2 This lawsuit reflects an attorney-driven reaction to a June 11, 2019 New York
3 Times Magazine article that brought back into the spotlight a devastating and well-
4 publicized 2008 fire on the Universal Studios backlot that destroyed a vault containing
5 archived recordings, videos, and other materials owned by UMG Recordings, Inc.
6 (“UMG”). Now, eleven years after the fire, and seven years after UMG resolved two
7 public litigations over its fire losses, Plaintiffs have filed suit to recover a portion of
8 UMG’s settlement proceeds, and more, obtained in those lawsuits. But Plaintiffs have
9 no ownership interest in the masters and their grievances are not legally actionable.
10 Notwithstanding the baselessness of Plaintiffs’ claims, they have served burdensome
11 and harassing discovery on UMG that seeks documents stretching back decades,
12 including for every single recording artist pertaining to UMG’s assets that were
13 destroyed in the 2008 fire. UMG therefore moves for a temporary stay of discovery
14 pending the Court’s consideration of UMG’s forthcoming motion to dismiss Plaintiffs’
15 recently filed First Amended Complaint (“FAC”).
16 Plaintiffs filed their original complaint believing that they could wage a loud and
17 vigorous public relations campaign on the heels of the Times article (as they have) that
18 they believed would force UMG to capitulate to their unmeritorious claims (which it
19 won’t). UMG moved to dismiss Plaintiffs’ original complaint on the grounds that
20 Plaintiffs’ claims are barred both by the terms of their contracts with UMG (or its
21 predecessors) and the applicable statutes of limitations. Five days ago, Plaintiffs filed
22 their FAC, which still asserts the same two meritless “breach of contract” claims and
23 adds new but equally meritless claims for negligence, “reckless conduct,” conversion,
24 and “misrepresentation by omission.” But rather than remedy the defects of the
25 original complaint, the FAC further exposes them—confirming the futility of
26 Plaintiffs’ efforts to find a legal hook to recover a portion of UMG’s fire-related
27 settlement recoveries. Indeed, faced with long odds to bring a viable claim—and
28 hoping to exert undue pressure on UMG—Plaintiffs have wildly expanded their theory
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1 of recovery to somehow demand additional insurance and settlement funds that UMG
2 allegedly failed to recover and to demand punitive damages related to fire losses that
3 UMG did not cause.
4 First, Plaintiffs’ contract theory—that UMG’s fire-related recoveries somehow
5 constitute “exploitation,” “use,” or a “license” of master recordings for which Plaintiffs
6 are due a royalty—is unsupported both by the contracts attached to the FAC, the law,
7 and the plain English meaning of those terms. Second, Plaintiffs’ tort claims are
8 frivolous and appear to be brought for the improper purpose of seeking a hook for
9 unavailable punitive damages. Specifically, Plaintiffs allege that statements contained
10 in UMG’s May 2016 “Code of Conduct” for its employees creates a legal duty that
11 Plaintiffs may enforce notwithstanding that the Code of Conduct (a) was not in
12 existence at the time Plaintiffs signed their agreements with UMG or its predecessors,
13 (b) is a website posting that is directed at UMG’s personnel (not its artists), and (c) is
14 not alleged to have ever been seen or relied upon by Plaintiffs. Third, Plaintiffs fail to
15 plead any exception to the clear statute-of-limitation bar on their claims, which accrued
16 no later than February 2013, when UMG’s lawsuits were settled and dismissed.
17 Looming over Plaintiffs’ FAC is another troubling problem: Plaintiffs’ counsel
18 have persisted in naming as plaintiffs three parties—Tom Whalley (for Tupac Shakur),
19 Jane Petty (for Tom Petty), and Steve Earle—despite the fact that UMG has
20 affirmatively informed them that no original master recordings were destroyed for
21 these artists and that Plaintiffs have not alleged facts confirming otherwise. Notably,
22 Plaintiffs did drop Hole as a plaintiff in their FAC based on UMG’s confirmation to
23 Plaintiffs’ counsel that no masters embodying the performances of Hole were lost in
24 the fire, yet Plaintiffs inexplicably persist in naming Whalley, Petty, and Earle, without
25 a factual basis.
26 Despite lacking any conceivable basis to sue UMG, and despite not having any
27 actual information that original master recordings related to Plaintiffs were lost in the
28 2008 fire, Plaintiffs served UMG with Demands for Production of Documents seeking
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1 sweeping discovery, including decades-old documents that in many cases have nothing
2 to do with Plaintiffs’ contracts with UMG (or its predecessors). See Declaration of
3 Scott A. Edelman (“Edelman Decl.”) Ex. F. Instead, among other things, those
4 documents relate to:
5 · Recording contracts of artists who are not plaintiffs in this lawsuit (and who
6 may not be in the putative class);
7 · Financial, legal, and other proprietary business information;

8 · Documents that are subject to protective orders in other cases; and
9 · UMG’s communications with artists other than Plaintiffs.
10
Id. In fact, Plaintiffs’ document demands essentially seek every piece of “paper”
11
(digital or otherwise) from the past 11 years—and for some, well beyond—that
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arguably has any remote connection to the 2008 fire or the contents of the vault, as
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well as extensive documents regarding UMG’s recording artists. To say Plaintiffs are
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on a proverbial “fishing expedition” would be an understatement.
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Because Plaintiffs are seeking intrusive discovery on a legally unviable, time-
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barred, and factually baseless pleading, UMG seeks a temporary stay of discovery
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pursuant to Federal Rule of Civil Procedure 26(c) pending resolution of UMG’s
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forthcoming motion to dismiss the FAC. Plaintiffs will suffer no prejudice from a
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stay—they have waited 11 years to seek records relating to the 2008 fire, and UMG is
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preserving whatever documents it has in its possession, custody, or control that might
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relate to Plaintiffs’ claims. UMG is mindful that some courts in this district ordinarily
22
require discovery to proceed even in the face of a motion to dismiss. But these
23
circumstances are anything but ordinary. Here, where the FAC has no legal basis—and
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the facts pleaded (and contracts cited) affirmatively disprove Plaintiffs’ breach claims—
25
it is “‘sound[] practice to determine whether there is any reasonable likelihood that
26
plaintiffs can construct a claim before forcing the parties to undergo the expense of
27
discovery.’” Top Rank, Inc. v. Haymon, 2015 WL 9952887, at *2 (C.D. Cal. Sept. 17,
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1 2015) (quoting Rutman Wine Co. v. E&J Gallo Winery, 829 F.2d 729, 738 (9th Cir.
2 1987)). In the face of the obvious legal bars to Plaintiffs’ claims, and without any
3 factual basis to have brought claims for at least three of the four named plaintiffs, any
4 discovery—much less the extraordinarily broad and harassing discovery propounded to
5 date—is unwarranted. A stay of discovery is therefore appropriate.
6 II. BACKGROUND
7 More than a decade ago—on June 1, 2008—a fire broke out on the Universal
8 Studios backlot in an area consisting of movie set facades, and public litigation ensued.
9 Dkt. 25 (FAC) ¶ 17. The fire ultimately consumed other structures including attractions
10 on the Universal Studios tour and a building housing various archival materials owned
11 by UMG. See FAC ¶¶ 17–20. That building had been leased from Vivendi Universal
12 Entertainment, which was obligated to maintain the structure in “good order, repair[,]
13 and condition.” Request for Judicial Notice ISO Stay Motion (“RJN”) Ex. 1 ¶ 11; see
14 FAC ¶ 16. A roofing crew performing repairs started the fire. FAC ¶ 20. Public
15 lawsuits between UMG and its landlord and insurer began soon thereafter.1 Id. ¶ 18;
16 RJN Ex. 1 (UMG Recordings, Inc. v. NBCUniversal Media LLC, L.A. Sup. Ct. No.
17 106213, Second Am. Compl. ¶ 12); RJN Ex. 6 (Vivendi S.A. v. Axa Ins. Co., Case No.
18 2:09-cv-8893-DDP-PLA (C.D. Cal.), Case Docket).
19 Plaintiffs File This Action Against UMG. Eleven years after the fire, and long
20 after the public litigation between UMG and the warehouse owners concluded,
21 Soundgarden, Tom Whalley, Jane Petty, Hole, and Steve Earle filed this putative class
22 action against UMG on behalf of themselves and all other allegedly similarly situated
23 recording artists, their heirs, successors, and assigns. Dkt. 1. UMG thereafter timely
24 filed a motion to dismiss the complaint, without seeking an extension. Dkt. 14. Rather
25 than oppose the motion, Plaintiffs filed their FAC, on August 16, 2019. Dkt. 25. The
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Though UMG and Universal Studios had historically shared a common parent
company, they were no longer affiliated by the time of the fire. FAC ¶ 16.
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1 FAC asserts six claims for relief: 2 (1) for breach of contract relating to UMG’s alleged
2 failure to share revenues derived from master recordings (FAC ¶¶ 37–50); (2) for
3 breach of an alleged implied bailment contract (id. ¶¶ 51–57); (3) for negligence for
4 allegedly breaching a supposed website-based duty to preserve the master recordings
5 (id. ¶¶ 58–63); (4) for “reckless conduct” for allegedly doing the same acts maliciously
6 (id. ¶¶ 64–70); (5) for conversion for allegedly failing to deliver to Plaintiffs a portion
7 of UMG’s fire-related litigation settlements that Plaintiffs claim was owed under their
8 recording contracts (id. ¶¶ 71–75); and (6) for “misrepresentation by omission” for the
9 alleged failure to inform Plaintiffs that the master recordings were at risk of fire (id. ¶¶
10 76–82). The Complaint inaccurately speculates that UMG received a $150 million
11 settlement payment to resolve the earlier litigation, as well as additional compensation
12 from UMG’s insurers. Id. ¶¶ 5, 44.
13 Plaintiffs seek a share of UMG’s litigation settlements on the theory that “by the
14 express or clearly implied terms of their recording contracts, Plaintiffs are entitled to a
15 percentage of any UMG proceeds from any uses or exploitations of any Master
16 Recordings.” Id. ¶ 5. However, the contracts attached to the FAC do not support such
17 an expansive reading, and do not entitle Plaintiffs to any portion of UMG’s litigation
18 settlements for the loss of assets that UMG owned outright. Rather, each of the
19 plaintiff’s contracts provides for royalty payments from UMG’s licensing of the master
20 recordings or sales of physical phonorecords (or other media) made therefrom. See id.
21 ¶ 40; FAC Exs. 1–4 (Dkts. 25-1, 25-2, 25-3, 25-4). Indeed, Plaintiffs allege that these
22 settlement proceeds were paid “as a lump sum replacement for the revenues which
23 could no longer be derived from furnishing them, authorizing their use or licensing
24 them . . . because they were destroyed in the fire.” Id. ¶ 46 (emphasis added). In other
25 words, Plaintiffs allege that UMG “exploited” the destroyed master recordings by
26 obtaining monetary recovery in settlements with their insurer and landlord, but
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While the last cause of action is labeled the “Seventh,” Plaintiffs did not include a
“Sixth” cause of action.
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1 contradict that theory by admitting that those recoveries were the result of UMG’s
2 inability to exploit (e.g., furnish or license) the masters.
3 Plaintiffs’ FAC confirms that UMG owns the master recordings at issue,
4 asserting that master recordings are among UMG’s “most prized and valuable assets.”
5 FAC ¶¶ 3, 53. That these masters constitute UMG’s property is crucial and plainly
6 reflected in the recording contracts that form the basis for Plaintiffs’ claims. For
7 example, Soundgarden’s 1988 contract states that the master recordings “shall be
8 entirely [UMG’s] property, free of any claims whatsoever by [Soundgarden] or any
9 other person, firm, or corporation.” Dkt 25-2, § 6(a) (emphasis added). Materially
10 similar contractual language is found in each of the recording agreements at issue,
11 which specify that the master recordings created pursuant to the agreements belong to
12 record labels now owned by UMG. See Dkts. 25-1, 25-3, 25-4.
13 Plaintiffs’ Allegations regarding Notice of Their Claims. Plaintiffs claim that it
14 was not until publication of the June 11, 2019 article in The New York Times Magazine
15 that they first had “notice” that some UMG recordings embodying their performances
16 may have been destroyed in the fire. FAC ¶ 24. The FAC alleges that “[d]uring the
17 relevant statute of limitations period . . . Plaintiffs and members of the Class did not
18 discover, and could not have discovered through the exercise of reasonable diligence,
19 the existence of any conspiracy.” Id. ¶ 28. The FAC makes no other reference to an
20 alleged “conspiracy.” Even so, it alleges that UMG “is estopped to raise the statute of
21 limitations as a result of its fraudulent concealment of the loss of the Master
22 Recordings.” Id.
23 As Plaintiffs acknowledge in the FAC, the loss of UMG’s master recordings
24 resulted in the multiyear legal action that UMG filed against the warehouse owners in
25 2009, and that concluded in 2013. FAC ¶ 44. Much of the information in the article
26 that spurred this suit “comes from depositions and documents that emerged from this
27 [decade-old] litigation.” RJN Ex. 5 (Jody Rosen, The Day the Music Burned, NYT
28 MAG. (June 11, 2019)). Among the publicly filed documents in that case were multiple
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1 rounds of pleadings, summary judgment briefing, and motions in limine. See FAC ¶ 18
2 (recognizing existence of public filings in that litigation and incorporating the second
3 amended complaint by reference). Those public filings reveal that at least as far back as
4 2012, UMG acknowledged that over 100,000 of its recordings had been destroyed in the
5 fire (RJN Ex. 2 (Opp. to UMG Mot. in Limine No. 6 at 2–3)), and that UMG had
6 created a database to attempt to document which of its tapes had been destroyed (RJN
7 Ex. 3 (Decl. Supporting Mot. in Limine No. 2 at 1)).
8 The FAC alleges no facts concerning what any of the plaintiffs or their
9 representatives knew, read, or heard about the fire at any time between 2008 and 2019.
10 Nor does the FAC plead facts demonstrating why Plaintiffs “could not have discovered
11 [the factual bases of their purported claims] through the exercise of reasonable
12 diligence,” FAC ¶ 28, or how any such failure to discover the facts underlying their
13 claims can be squared with years-old public references to the destruction of master
14 recordings in the fire. Indeed, back in 2011, long-time Los Angeles Times reporter and
15 music critic Randy Lewis published an article stating that the 2008 fire “destroyed
16 many thousands of master tapes and other recordings originally issued by Decca, MCA
17 and ABC Records.”3 Even journalists on niche music-industry blogs have long been
18 asking interviewees questions relating to the fire, including about their “reaction to the
19 fire at Universal in 2008, during which many masters . . . might have been destroyed.” 4
20 Plaintiffs Seek and Receive Information from UMG regarding the Status of
21 Masters. After The New York Times Magazine article was published on June 11, 2019,
22 UMG received numerous inquiries from artists and their representatives inquiring
23 whether master recordings embodying recordings of their performances were destroyed
24 in the fire. Edelman Decl. ¶ 3. UMG assembled a team to respond to those inquiries
25
26 3
Universal Music Group’s Vintage Recordings Head to Library of Congress (Jan.
10, 2011), https://latimesblogs.latimes.com/music_blog/2011/01/universal-music-
27 library-of-congress-bing-crosby-ella-fitzgerald.html.
28 4
See, e.g., Interview with Steve Hoffman (May 9, 2012),
http://judygarlandnews.com/2012/ 05/09/interview-with-steve-hoffman/.
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1 and advise artists and their representatives what items, if any, relating to a particular
2 artist were destroyed in the fire. Id. Since then, UMG has responded to more than 80
3 artist inquiries. Id. From that ongoing investigation, UMG has already informed
4 Plaintiffs’ counsel that no original masters were lost related to Mr. Shakur, Mr. Petty,
5 Mr. Earle, or Hole. Id. ¶¶ 4–9. Plaintiffs allege no facts indicating they are aware of
6 contrary information, but they have nonetheless included Mr. Whalley, Ms. Petty, and
7 Mr. Earle in their FAC, without a factual basis to do so. See generally id.
8 III. LEGAL STANDARD
9 “District Courts have ‘wide discretion in controlling discovery.’” Patten v.
10 Deschamps, 2018 WL 6307895, at *1 (C.D. Cal. Sept. 7, 2018) (quoting Little v. City of
11 Seattle, 863 F.2d 681, 685 (9th Cir. 1988)). Good cause exists to stay discovery where,
12 as here, a motion may resolve “potentially dispositive” issues “absent discovery.”
13 Carter v. Oath Holdings, Inc., 2018 WL 3067985, at *4 (N.D. Cal. June 21, 2018); Top
14 Rank, 2015 WL 9952887, at *3 (granting “brief stay of discovery . . . until the pleadings
15 are settled”); Gibbs v. Carson, 2014 WL 172187, at *3 (N.D. Cal. Jan. 15, 2014)
16 (same); Hamilton v. Rhoads, 2011 WL 5085504, at *1 (N.D. Cal. Oct. 25, 2011)
17 (same); see also Jarvis v. Regan, 833 F.2d 149, 155 (9th Cir. 1987); cf. Bell Atl. Corp.
18 v. Twombly, 550 U.S. 544, 558 (2007) (where “complaint … could not raise a claim of
19 entitlement to relief, ‘this basic deficiency should … be exposed at the point of
20 minimum expenditure of time and money’” (citation omitted)).
21 To assess “whether or not a stay is warranted,” courts “should take a
22 ‘preliminary peek’ at the merits” of dismissal arguments. Patten, 2018 WL 6307895,
23 at *1 (finding dispositive motion “facially meritorious” and staying discovery pending
24 motion’s resolution). Courts in this Circuit stay discovery where there is a “clear
25 possibility” that a dispositive motion will be granted. See, e.g., GTE Wireless, Inc. v.
26 Qualcomm, Inc., 192 F.R.D. 284, 287 (S.D. Cal. 2000) (emphasis added); Wood v.
27 McEwen, 644 F.2d 797, 802 (9th Cir. 1981) (finding that the district court did not
28 abuse its discretion in staying discovery when there “was a real question whether
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1 [plaintiff’s] claim” could succeed); cf. In re Nexus 6p Prod. Liab. Litig., 2017 WL
2 3581188, at *1–2 (N.D. Cal. Aug. 18, 2017) (stay motion need not resolve every
3 claim; stay is warranted where ruling on motion may “limit the scope of discovery” by
4 resolving some issues in the case). Doing so “furthers the goal of efficiency for [both]
5 the court and the litigants.” Little, 863 F.2d at 685 (upholding discovery stay pending
6 ruling on dispositive motion); Rutman, 829 F.2d at 738 (affirming district court’s
7 denial of discovery during pending motion to dismiss).
8 In this Circuit, courts generally follow a two-part test to evaluate whether a
9 discovery stay is warranted in light of a potentially case-dispositive motion: (1) “the
10 pending motion must be potentially dispositive of the entire case,” and (2) the court
11 must determine whether the motion “can be decided absent additional discovery.”
12 Patten, 2018 WL 6307895, at *1 (citations omitted). If the moving party satisfies that
13 two-part test, then the court has discretion to issue a stay. Id.
14 IV. ARGUMENT
15 Both of the threshold requirements for granting a temporary stay pending
16 resolution of a motion to dismiss are satisfied here, and a stay is warranted in the face of
17 Plaintiffs’ facially meritless claims. First, as UMG will detail in its forthcoming motion
18 to dismiss the FAC (and as previewed in this motion), Plaintiffs fail—for the second
19 time—to plausibly allege a timely breach of contract claim grounded in either the
20 provisions of the recording agreements or a supposed (but non-existent) bailment.
21 Plaintiffs’ newly pleaded tort claims fare no better, as they are not tied to any
22 cognizable legal duties, among other deficiencies.5 Moreover, Plaintiffs’ counsel has
23 asserted claims on behalf of artists or their representatives for whom UMG has already
24 informed Plaintiffs’ counsel that no masters were lost. Second, Plaintiffs’ served
25 discovery requests are overly burdensome, harassing, and not proportional to the needs
26
27
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Here, UMG brought a Motion for a Protective Order to Stay Discovery (Dkt. 20)
28 prior to Plaintiffs’ filing of their FAC. UMG will bring a motion to dismiss the
FAC by September 20, 2019, the stipulated deadline. Dkt. 19.
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1 of the case or even tailored to the named Plaintiffs. Third, Plaintiffs will suffer no
2 prejudice from a temporary stay. The Court should therefore exercise its discretionary
3 power to stay discovery unless and until Plaintiffs are found to have stated a viable
4 claim.
5 A. Good Cause Exists to Stay Discovery Because Plaintiffs Have Twice Failed
6 to State a Viable Claim and Further Amendment Would Be Futile
7 1. The Plain Language of Plaintiffs’ Contracts Undermine Their Breach
8 of Contract Claims
Plaintiffs’ first claim for relief—and the gravamen of their action—theorizes
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that UMG has an obligation to share with Plaintiffs proceeds that UMG received by
10
settling lawsuits with the backlot owners and UMG’s insurer. See FAC ¶ 46. But
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nothing in the underlying contracts at issue (or Plaintiffs’ broad-brush generalizations
12
thereof) even remotely entitles Plaintiffs to any such proceeds.
13
Specifically, Plaintiffs maintain their recording agreements require, either
14
expressly or by “clear implication,” that UMG “pay a percentage royalty on its ‘Net
15
Receipts’ derived from any use or exploitation of the Master Recordings other than
16
through the distribution of an album.” FAC ¶ 40 (emphasis added). But contrary to
17
this sweeping allegation, none of the cited contracts contains such expansive language.
18
Indeed, Plaintiffs selectively quote (and at times misquote) provisions requiring royalty
19
payments in very specific enumerated circumstances—e.g., licensing to third-parties or
20
on sales of physical recorded media—that are wholly inapplicable here.
21
For example, Plaintiffs claim that “Soundgarden’s contract provides that ‘for
22
any other uses . . . of the Masters . . . your royalty shall be an amount equal to fifty
23
percent (50%) of our Net Receipts from . . . those other uses of the Masters.’” FAC ¶
24
40(b). As an initial matter, Plaintiffs misquote this provision (the term “Net Receipts”
25
does not appears anywhere in the entire contract, let alone in this particular provision).
26
See generally Dkt. 25-2 (Soundgarden Contract). More importantly, the actual
27
contractual language makes clear that this provision does not encompass any
28
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1 “exploitation” and applies only to “Masters licensed by [UMG] to others on a flat-fee

2 basis”—a condition plainly not met here:
3 On Masters licensed by us to others on a flat-fee basis for their
4 manufacture and sale of Phonograph Records or for any other uses, your
royalty shall be an amount equal to fifty percent (50%) of the Net Flat-Fee
5 from the sale of those phonograph Records or from those other uses of the
6 Masters.
7
Dkt. 25-2 ¶ 9(b)(viii) (emphasis added). Similarly, the “royalty” provision Plaintiffs
8
cite from Tom Petty’s contract does not apply to any “use” or “exploitation,” and
9
applies only “[i]n the event that [UMG] licenses Masters to third parties” and then
10
receives payment “from such licensees.” Dkt. 25-4 ¶ 6(l) (emphasis added); FAC ¶
11
40(d) (selectively quoting provision). In other words, payment of royalties is
12
dependent upon UMG licensing the masters, which did not occur here (and is not
13
alleged to have occurred either). There is simply no plausible connection between
14
these contractual obligations (to pay royalties for licensing to third-parties) and the
15
alleged breaches (not sharing settlement proceeds of litigation with UMG’s insurer and
16
landlord). Plaintiffs do not—and cannot—plausibly allege that receiving settlement
17
payments stemming from the destruction of masters constitutes “licensing” the masters
18
to “licensees.”
19
Plaintiffs’ selective quotation of the Earle and Shakur contracts is similarly
20
selective and misleading. The provision Plaintiffs cite from Mr. Earle’s contract
21
regarding “exploitation of Masters” reads, in full, as follows:
22
With respect to the following Records and/or exploitation of Masters, the
23 royalty hereunder shall be a sum equal to fifty percent (50%) of [UMG’s]
24 net receipts with respect to such exploitation: (a) Records derived from
Masters sold through record clubs or similar sales plans; (b) licenses of
25 Masters for methods of distribution such as “key outlet marketing”
26 (distribution through retail fulfillment centers in conjunction with special
advertisements on radio or television), direct mail, or mail order, or by
27 any combination of the methods set forth above or other methods; and (c)
28 licenses of Masters on a flat fee or cent rate.
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1 Dkt. 25-3 ¶ 7.03 (emphasis added); FAC ¶ 40(c) (selectively quoting provision). The
2 true language of the provision confirms that “exploitation” under Mr. Earle’s contract
3 relates to sales and licensing of records derived from masters, and does not reach fire-
4 related litigation settlement recoveries.
5 The language quoted regarding Tupac Shakur is similarly inapposite and, even
6 worse, Plaintiffs misleadingly claim that their breach of contract claim is based on a
7 royalty provision from “Shakur’s contract.” FAC ¶ 40(a) (emphasis added). Not so.
8 Plaintiffs attach and rely on the furnishing agreement between TNT Records, Inc.
9 (“TNT”) and Interscope (UMG’s predecessor), to which Mr. Shakur was not a party,
10 claiming that for masters “exploited in any manner, whether known or unknown, . . .
11 Interscope will pay you fifty percent (50%) of Interscope’s net receipts with respect to
12 such exploitation.” Dkt. 25-1 (Aug. 15, 1991 TNT/Interscope Furnishing Contract) ¶
13 9.02(b); FAC ¶ 40(a)). 6 By wrongly calling it “Shakur’s contract,” Plaintiffs suggest
14 that “you” is Mr. Shakur, when it is actually TNT. Dkt. 25-1 (Aug. 15, 1991
15 TNT/Interscope Furnishing Contract) at 1.
16 Moreover, in a side-letter agreement to that furnishing contract, Mr. Shakur
17 affirmatively foreclosed pursuing Interscope (or UMG, its successor) relating to any
18 payments or royalties from the furnishing contract: “I agree that I will look solely to
19 Grantor [TNT] for the payment of all monies payable to me by reason of my rendering
20 services in accordance with the Agreement, and I agree that [UMG] shall have no
21 responsibility to me therefor whatsoever.” Dkt. 25-1 (Aug. 15, 1991 Ltr. Agmt.) § 8
22 (emphasis added).
23 The fire and subsequent litigation settlements do not, as a matter of law, trigger
24 any of these specified forms of licensing, use or exploitation. More broadly, Plaintiffs
25
26
6
The provision’s reference to “exploit[ation] in any manner, whether now known or
27 unknown,” Dkt. 25-1 ¶ 9.02(b), is common in the industry and is intended to
capture future media and technologies by which the masters may be “exploited,”
28 such as streaming music services, which were not in existence at the time of
Shakur’s contract, in 1991.
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1 cannot plausibly allege that UMG’s receipt of non-royalty settlement payments from
2 its insurer and landlord for losses sustained in the fire constitutes “licensing,” “use,” or
3 “exploitation” of the masters as a matter of law or common sense. Indeed, UMG did
4 not affirmatively “use” or “exploit” the masters to obtain insurance recovery, and did
5 not “license” the masters to the warehouse owners or its insurance to obtain settlement
6 recovery either. Rather, certain masters and other assets were destroyed in the fire
7 through no affirmative act of UMG, and UMG obtained recovery for that loss. As a
8 matter of California insurance law, any proceeds that UMG received as a result of its
9 insurance settlement “[are] in no proper or just sense the proceeds of the [destroyed]
10 property.” Long v. Keller, 104 Cal. App. 3d 312, 313, 320 (1980) (explaining that “[a]
11 fire insurance policy does not insure the property covered thereby, but [rather] is a
12 personal contract indemnifying the insured against loss resulting from the destruction
13 of or damage to his interest in that property”).
14 Plaintiffs’ second claim for relief—which alleges that UMG breached a bailment
15 agreement—likewise fails because the FAC does not, and cannot, plausibly allege that
16 a bailment agreement existed. Plaintiffs’ own pleading (FAC ¶ 54) cites case law
17 describing a bailment as a “deposit of personal property to be cared for until the owner
18 demands redelivery.” Greenberg Bros., Inc. v. Ernest W. Hahn, Inc., 246 Cal. App. 2d
19 529, 531 (1966) (emphasis added). Here, the plain language of the recording
20 agreements makes clear that UMG is the owner of the master recordings, free and
21 clear of any claims by Plaintiffs:
22
· Soundgarden’s contract states “[a]ll Master Recordings recorded during the
23 Term which embody your performances . . . shall, for purposes of copyright
24 law, be deemed works made for hire for [UMG] by [Soundgarden]. . . .
Those Master Recordings . . . shall be entirely [UMG’s] property, free of
25 any claims whatsoever by you [Soundgarden] or any other person, firm, or
26 corporation.” Dkt. 25-2 § 6(a) (emphasis added).
27 · Tupac Shakur’s contract with TNT states that TNT “shall be the sole and
28 exclusive owner of the Masters and artwork, and in its sole discretion shall
have the exclusive, perpetual and universal right to use and control the
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1 Masters in any manner it deems appropriate. [TNT] shall have the right to
2 manufacture, advertise, sell, lease, license or otherwise dispose of the
Masters or any part of them, and any reproductions upon such terms as
3 [TNT] may approve.” Dkt 25-1 (Mar. 15, 1991 Artist Agmt.) § 1. In turn,
4 TNT’s contract with Interscope (now UMG) states that “[a]ll Master
Recordings made or furnished to [UMG] by you or the Artist . . . shall be
5 the sole property of [UMG], free from any claims by you or any other
6 Person.” Id. (Aug. 15, 1991 TNT/Interscope Furnishing Contract) § 7.01
(emphasis added).
7
8 · Tom Petty’s contract states “[t]itle to the Masters . . . shall vest in [UMG]
from inception of recording and thereafter [UMG] shall be the sole and
9 exclusive owner . . . of such Masters.” That contract also gave UMG (via
10 its predecessor MCA) “[t]he exclusive and perpetual right throughout the
Territory to manufacture, advertise, publicize, sell, lease, license, or
11 otherwise use or dispose of and exploit records and/or derivatives
12 manufactured from or embodying the Masters” and “[a]ll right, title and
interest in the copyright in and to the Masters and all reproductions thereof.”
13 Dkt. 25-4 § 7(a)–(c) (emphasis added).
14
· And Steve Earle’s contract states “[UMG] is the sole, exclusive and
15
perpetual owner of all Masters Delivered hereunder or recorded by
16 [Earle] during the term of this agreement, which ownership entitles
[UMG], among other things, to all right, title and interest in the
17
copyright in and to the Masters. . . . All Masters made under this
18 agreement or during its term . . . shall, from the inception of their creation, be
the sole property of [UMG], in perpetuity, free from any claims by [Earle],
19
other than as specifically set forth in this agreement, [Earle] or any other
20 person.” Dkt. 25-3 § 9.01 (emphasis added).
21 Thus, the terms of the agreements on which Plaintiffs rely flatly undermine the notion
22 that any bailment agreement could have existed here. See H.S. Crocker Co. v.
23 McFaddin, 148 Cal. App. 2d 639, 644 (1957) (“[N]o bailment can be implied where it
24 appears it was the intention of the parties . . . that the property was to be held by the
25 party in possession in some capacity other than as bailee.”). Moreover, the FAC does
26 not even allege that UMG had any obligation to return the master recordings (and
27 especially not to anyone other than its rightful owner, which nobody disputes is UMG).
28
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1 To the extent Plaintiffs’ bailment claim is actually premised on an alleged

2 breach of the implied covenant of good faith and fair dealing, that too fails. Plaintiffs’
3 theory—that UMG failed to take reasonable measures to preserve and maintain the
4 master recordings, FAC ¶ 52—sounds in negligence. But to state an implied covenant
5 claim, Plaintiffs “must show” that UMG’s conduct was “prompted not by an honest
6 mistake, bad judgment or negligence but rather by a conscious and deliberate act.”
7 Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1395 (1990).
8 There is no allegation here that UMG consciously or deliberately destroyed the
9 masters.
10 2. Plaintiffs’ Newly Pleaded Tort Claims Are Similarly Deficient and
11 Cannot Form the Basis for Plaintiffs’ Sweeping Discovery Requests
12 As UMG’s forthcoming motion to dismiss the FAC will make clear in further
13 detail, each of Plaintiffs’ newly-pleaded tort claims also fails as a matter of law.
14 Negligence (Third Claim for Relief) & Reckless Conduct (Fourth Claim for
15 Relief): These claims are premised on a legal duty that Plaintiffs have spun out of
16 whole cloth. Specifically, Plaintiffs allege that “UMG had a duty to make
17 commercially reasonable efforts to preserve and maintain the Master Recordings.” See
18 FAC ¶ 61; id. at ¶ 67 (same). Plaintiffs further assert that UMG breached this
19 purported duty by, among other things, “storing the Master Recordings in a manner
20 that made them susceptible to loss in the Fire,” and “failing to adequately insure [them]
21 against such a loss.” Id. ¶¶ 62, 68. But the recording agreements contain no
22 provisions that can plausibly be construed to impose such a duty upon UMG. And
23 again, the underlying contracts confirm (and Plaintiffs do not dispute) that UMG owns
24 the master recordings outright.
25 Desperate to find a hook to bring these claims, Plaintiffs have ginned up an
26 alleged duty by looking to UMG’s “Code of Conduct” on its website. But an extra-
27 contractual statement on a website does not a legal duty make. Plaintiffs’ effort to
28 invent such a duty is dead on arrival. First, UMG’s “Code of Conduct” is addressed to
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1 its employees, not its artists. See RJN Ex. 8 (May 2016 Code of Conduct, available at
2 https://www.universalmusic.com/wp-content/uploads/2018/03/Code-of-Conduct.pdf )
3 (addressed to “Dear Colleagues”)). Second, Plaintiffs do not allege that such
4 statements formed part of their contracts or that they ever saw or relied upon such
5 statements at any time. Third, and most basically, UMG’s Code of Conduct dates from
6 May 2016, and did not exist at the time any of the plaintiffs entered into their recording
7 agreements with UMG or its predecessors, nor at the time of the 2008 fire. Plaintiffs’
8 theory of a web-based duty defies time and logic. Absent an enforceable, cognizable
9 duty, Plaintiffs’ negligence and reckless-conduct claims necessarily fail.
10 Conversion (Fifth Claim for Relief): Plaintiffs allege that they “were entitled to
11 a percentage share of UMG’s recoveries in the Fire Lawsuit and its insurance proceeds
12 relating to the Fire,” and that UMG’s alleged failure to “share any of those proceeds”
13 gives rises to a conversion claim. Plaintiffs are wrong. Under California law, “[a]
14 cause of action for conversion of money can be stated only where a defendant
15 interferes with the plaintiff’s [1] possessory interest in a [2] specific, identifiable
16 sum”—“the simple failure to pay money owed does not constitute conversion.” Kim v.
17 Westmoore Partners, Inc., 201 Cal. App. 4th 267, 284 (2011) (emphasis added).
18 Here, Plaintiffs’ effort to plead the first conversion element fails because a
19 “mere contractual right of payment, without more, will not suffice” to sufficiently
20 allege a possessory interest. Farmers Ins. Exchange v. Zerin, 53 Cal. App. 4th 445,
21 452 (1997). Even if Plaintiffs’ contracts supported a claim against UMG for its fire-
22 related recoveries (and they do not), such claims would be garden-variety contract
23 claims, not conversion. Gerawan Farming, Inc. v. Rehrig Pac. Co., 2012 WL 691758,
24 at *6 (E.D. Cal. Mar. 2, 2012) (conversion claim failed where complaint alleged
25 “nothing to suggest that the royalty payments due to [plaintiff] amounted to anything
26 more than a contractual right to payment”). Plaintiffs’ effort to plead the second
27 element similarly fails because they have not alleged a “specific, identifiable sum” that
28 UMG has supposedly converted. Gerawan, 2012 WL 691758, at *6 (“general
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1 allegation that [defendant] failed to pay certain royalties over the span of almost ten
2 years does not sufficiently identify a specific sum of money”). Therefore, not only do
3 Plaintiffs lack any interest in UMG’s litigation recoveries because of the plain
4 language of the contracts, but they have failed to plead a conversion claim.
5 Misrepresentation by Omission (“Seventh” Claim for Relief): Under
6 California law, a plaintiff alleging a common-law claim for fraudulent omission must
7 plead the following elements “with particularity” under Rule 9(b): “(1) the defendant
8 concealed or suppressed a material fact; (2) the defendant was under a duty to disclose
9 the fact to the plaintiff; (3) the defendant intentionally concealed or suppressed the fact
10 with intent to defraud the plaintiff; (4) the plaintiff was unaware of the fact and would
11 have acted differently if she had known of the concealed or suppressed fact; and (5) the
12 plaintiff sustained damage as a result of the concealment or suppression.” Peel v.
13 BrooksAmerica Mortg. Corp., 788 F. Supp. 2d 1149, 1159 (C.D. Cal. 2011) (citation
14 omitted).
15 Here, Plaintiffs’ claim is principally premised upon the “web-based duty” it
16 invented based on UMG’s Code of Conduct, alleging that UMG failed to disclose “the
17 fact that the measures it employed to protect and preserve the Master Recordings were
18 insufficient to protect the Master Recordings from the threat of fire, and specifically
19 did not disclose that Plaintiffs’ musical works would be stored in an inadequate and
20 substandard, non-fireproof, storage warehouse located on the back-lot of Universal
21 Studios.” FAC ¶ 77. This claim also fails for multiple reasons. Among other things,
22 as stated supra, Plaintiffs have failed to allege that UMG had any actual duty to
23 disclose to Plaintiffs anything regarding how it stored the master recordings that it
24 owned outright, particularly a duty based on a website’s statements that did not exist at
25 the time Plaintiffs’ signed their contracts or the June 2008 fire. Plaintiffs could not
26 have relied upon statements that did not exist at the time they signed their recording
27 agreements and which were not made to them in any event. Plaintiffs’ allegations are
28 all the more perplexing because none of the plaintiffs originally signed with UMG (but
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1 rather its predecessor companies), and therefore none could have “justifiably relied to
2 their detriment upon the truth and completeness of UMG’s representations” on its web
3 sites or regarding UMG’s master-recording storage protocol in first entering the
4 agreements. FAC ¶ 80 (emphasis added).
5 Moreover, to state a misrepresentation by omission or fraudulent concealment
6 claim, a plaintiff must plausibly allege the existence of a special relationship giving
7 rise to such a duty. See 5 Witkin, Summary 11th Torts § 914 (“Liability is imposed for
8 concealment where the defendant is in a fiduciary or other confidential relationship
9 that imposes a duty of disclosure.”) (citing Cal. Civ. Code § 1710(3)). And Courts
10 have routinely rejected arguments seeking to impose a fiduciary relationship between
11 recording artists and their record companies. See Cooper v. Sony Records Int’l, 2001
12 WL 1223492, at *5 (S.D.N.Y. Oct. 15, 2001) (“Courts in this district have routinely
13 failed to find a fiduciary duty between a recording artist and a record company.”
14 (collecting cases)).
15 3. Even After UMG Informed Plaintiffs’ Counsel That No Master
16 Recordings Embodying Several Plaintiffs’ Performances Were Lost,
Plaintiffs’ Counsel Still Named Them Without a Factual Basis to Do
17 So
18 Contrary to the allegations in the FAC that “[t]o this day, UMG has failed to
19 inform Plaintiffs whether any of their Master Recordings were destroyed in the Fire”
20 (FAC ¶ 4), UMG has made multiple efforts to inform Plaintiffs’ counsel of the status of
21 master recordings embodying Plaintiffs’ performances that Plaintiffs have alleged, “on
22 information and belief,” were destroyed in the fire. Edelman Decl. ¶ 4; FAC ¶¶ 7–10.
23 In fact, even before the original complaint was filed in this case, during the ten-day
24 period of time between when The New York Times Magazine published its article, on
25 June 11, 2019, and the filing of the original complaint, UMG informed Plaintiffs’
26 counsel Howard King in writing that none of the masters embodying performances of
27 the band Hole had been destroyed in the fire. Edelman Decl. ¶ 4. The receipt of that
28 information did not stop Plaintiffs’ counsel from naming Hole as a plaintiff in the
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1 original complaint. Id. Now, in the FAC, Plaintiffs have omitted Hole as a plaintiff,
2 conceding that they “are not aware of information contradicting those recent assurances
3 regarding Hole.” FAC p. 2, n.1.
4 After the filing of the original complaint but before Plaintiffs filed the FAC—
5 and in connection with UMG’s broader effort to respond to artist inquiries regarding
6 the status of master recordings—UMG also informed Plaintiffs’ counsel that as a result
7 of its investigation, it had determined that no original master recordings embodying the
8 performances of Mr. Petty, Mr. Earle, or Mr. Shakur were lost in the fire. Id. ¶ 5.
9 While Plaintiffs’ counsel dropped Hole from their amended pleading on the basis of
10 UMG’s representations (FAC p. 2, n.1), they nevertheless again named as plaintiffs
11 Jane Petty (the artist’s ex-wife), Mr. Earle, and the Trustee who purports to manage the
12 rights of Mr. Shakur, even though Plaintiffs have not stated in their amended pleading
13 or otherwise to UMG or its counsel that they have any information contradicting what
14 UMG informed them—i.e., that no original master recordings embodying their
15 performances were destroyed in the fire. Edelman Decl. ¶ 5. This, despite Plaintiffs’
16 counsel’s request that UMG focus on providing him information on the status of
17 named Plaintiffs other than Hole. Id. ¶ 6.
18 In response to this request, UMG reported the following to Plaintiffs’ counsel:
19 · Steve Earle: On July 30, 2019, UMG’s counsel wrote to Plaintiffs’ counsel
and explained that no original masters embodying Mr. Earle’s performances
20 were affected by the fire, and that UMG has 776 Earle-related “assets” in its
vault; only 11 assets were impacted by the fire, and all were “secondary
21 materials.” Id. ¶ 6.
22 · Tom Petty: On August 7, 2019, UMG’s counsel informed Plaintiffs’
counsel that UMG has been working with the Petty estate (which is
23 separately represented) to determine whether any masters were lost (because
some of the masters are in the estate’s possession), and that UMG and the
24 Petty estate collectively determined that no original album master recordings
were lost in the fire. Id. ¶ 7.
25
· Tupac Shakur: On August 13, 2019, UMG’s General Counsel wrote to
26 Plaintiffs’ counsel and Mr. Whalley and explained the number of Tupac-
related assets that UMG’s archive team has identified, and that no original
27 audio masters were affected by the fire. UMG identified only four Tupac-
related items lost in the fire (i.e., two video products and two audio
28
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1 products), and explained that in each case, UMG possesses a viable alternate
copy. Id. ¶ 8.
2
3 On August 15, 2019, before the filing of the FAC, UMG’s counsel again wrote to
4 Plaintiffs’ counsel and summarized and again confirmed UMG’s findings that no
5 original master recordings were lost in the June 1, 2008 vault fire relating to Hole, Mr.
6 Earle, Mr. Petty, and Mr. Shakur. Id. ¶ 9. It is therefore particularly troubling and
7 inexplicable why Plaintiffs’ counsel still brought the FAC on behalf of Mr. Earle and
8 the representatives of Mr. Shakur and Mr. Petty, notwithstanding UMG’s
9 confirmations. Plaintiffs’ FAC does not allege that they have any information to
10 contradict UMG’s statements, nor does the FAC explain why UMG’s representations
11 were sufficient as it relates to Hole but not Mr. Earle, Mr. Shakur, or Mr. Petty.
12 UMG’s investigation regarding Soundgarden-related masters is ongoing, but Plaintiffs
13 have not alleged that they are aware of any lost masters for that artist either.
14 4. Plaintiffs’ Claims Are Time Barred in Any Event
15 On top of these defects, all of Plaintiffs’ claims are time-barred as a matter of
16 law, a defect not curable by amendment. Plaintiffs filed their original complaint in
17 June 2019, seeking relief over an event that occurred in June 2008, and then played out
18 in public litigation between 2009–2013. Plaintiffs were on notice of their purported
19 claims no later than the conclusion of that public litigation, in early 2013, such that the
20 statutes of limitations on Plaintiffs’ various claims all ran years before Plaintiffs filed
21 their complaint. Where, as here, “an issue as to the statute of limitations appears ‘on
22 the face of the complaint,’ the party seeking tolling ‘has an obligation to anticipate the
23 defense and plead facts to negative the bar.’” Haaland v. Garfield Beach CVS, LLC,
24 2018 WL 5086493, at *3–4 (C.D. Cal. June 6, 2018) (Kronstadt, J.) (dismissing time-
25 barred claim with prejudice) (quoting Union Carbide Corp. v. Super. Ct., 36 Cal. 3d
26 15, 25 (1984)).
27 Mindful of this reality, Plaintiffs attempt to allege “delayed discovery” or
28 “fraudulent concealment” to toll the limitations period. But that attempt fails, too. To
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1 plausibly allege delayed discovery, Plaintiff must allege “the inability to have made
2 earlier discovery despite reasonable diligence.” Grisham v. Philip Morris U.S.A., Inc.,
3 40 Cal. 4th 623, 638 (2007). But the FAC lacks any factual allegations regarding any
4 steps Plaintiffs took to investigate their potential claims in the 11 years since the fire.
5 See generally Dkt. 25 (FAC). That failure to plead the exercise of reasonable diligence
6 is also fatal to Plaintiffs’ fraudulent concealment allegations. Moreover, The New York
7 Times Magazine article that allegedly spurred Plaintiffs to file suit stated that “[t]he
8 fate of all th[e] tapes has been an open secret for years,” “hid[ing] in plain sight on the
9 internet,” including on public online message boards and even “the Wikipedia entry for
10 Universal Studios Hollywood.” RJN, Ex. 7. The article also explicitly relied on the
11 voluminous public court filings from the underlying fire and insurance lawsuits for
12 much of its reporting. Id. at 23 (quoting article’s explanation that “[m]uch of what we
13 know about the [fire] event comes from depositions and documents that emerged from
14 [UMG’s prior] litigation” over “losses suffered in the fire”). One such document—
15 UMG’s publicly filed brief in opposition to defendants’ summary-judgment motion—
16 opens as follows: “On June 1, 2008, tens of thousands of master recordings belonging
17 to [UMG] were destroyed in a catastrophic fire . . . .” RJN Ex. 4 at 43. Had Plaintiffs
18 exercised reasonable diligence, at the very least they would have discovered these
19 public filings within the limitations period. See Allen v. Similasan Corp., 96 F. Supp.
20 3d 1063, 1071 (S.D. Cal. 2015) (fraudulent-concealment allegations insufficient
21 because complaint relied on “internet research” that plaintiff could have completed 10
22 years earlier).
23 Courts in this Circuit have stayed discovery pending resolution of a motion to
24 dismiss asserting a statute of limitations defense. See, e.g., Patten, 2018 6307895, at
25 *1. This Court should do the same here. But perhaps more importantly, UMG’s
26 position that Plaintiffs’ claims are time-barred serves to further underscore and
27 magnify the burden imposed on UMG by forcing it to respond to discovery now, 11
28 years since the backlot fire.
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1 B. Plaintiffs’ Extraordinarily Burdensome Initial Discovery Requests Confirm

2 the Appropriateness of the Requested Stay
3 On July 23, 2019, Plaintiffs served their First Set of Demands for Production of
4 Documents, which contains 40 oppressive, overbroad, and burdensome requests
5 seeking records that in some cases date even further back than the June 2008 fire.
6 Edelman Decl. Ex. F. Complying with the wide-ranging requests would force UMG to
7 scour its records for responsive documents dating back decades. And the broad
8 language of the requests confirms just how disproportionate, overbroad, and
9 burdensome they are. For example, Plaintiffs want:
10 · “All DOCUMENTS reflecting COMMUNICATIONS by YOU to anyone other

than YOUR attorneys claiming damages as a result of FIRE.” (No. 14);
11
· “All DOCUMENTS which reflect the amount of damages caused to YOU by the
12 FIRE” (No. 15);
13 · “All recording agreements entered into by YOU or YOUR predecessors which
RELATE TO, concern or encompass master recordings destroyed in the
14 FIRE.”(No. 16);
15 · “All DOCUMENTS RELATING TO YOUR claimed losses in the FIRE.” (No.
20);
16
· “ALL DOCUMENTS containing an estimate, analysis or calculation of the
17 property damages and business interruption losses claimed by YOU in the
INSURANCE CASE.” (No. 22);
18
· “ALL DOCUMENTS RELATING TO any description of the value of the
19 property in the ‘warehouse’ referred to in paragraph 10 of the INSURANCE
CASE.” (No. 27);
20
· “Any and all internal COMMUNICATIONS . . . between anyone employed by
21 YOU from June 2008 to the present” that relate to the fire, including those made
to “any musicians and/or representatives of musicians.” (Nos. 28–31);
22
· “Any and all DOCUMENTS produced by [or to] YOU to [or by] NBCUniversal
23 Media LLC in the FIRE CASE.” (Nos. 32–33);
24 · “Any and all DOCUMENTS produced by [or to] YOU to [or by] AXA Ins. Co.
in the INSURANCE CASE.” (Nos. 34–35);
25
· “Any and all DOCUMENTS and COMMUNICATIONS that RELATE TO the
26 work YOU are doing with YOUR ‘community of artists to sort through
speculation, resulting from recent media coverage, about which recordings were
27 lost and which were stored elsewhere, previously moved, or otherwise preserved
(digitally or via other copies) before the fire,’ as stated on page 1 in YOUR
28 Memorandum of Points and Authorities in Support of Your Motion to Dismiss.”
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1 (No. 36);
2 · “Any and all DOCUMENTS that describe the ‘historically significant assets
[that] may have been lost in the fire,’ as referenced on page 1 of the Motion.”
3 (No. 37);
4 · “All COMMUNICATIONS with ‘recording artists or their representatives
concerning the status of musical assets.” (No. 38);
5
· “Any and all DOCUMENTS that RELATE TO YOUR having ‘assembled a
6 worldwide team tasked with providing artists with answers as quickly and
transparently as possible,’ as stated on page 1 of the Motion. This Demand
7 includes DOCUMENTS sufficient to identify the names of every member of the
‘worldwide team,’ their title, and location, including any third-parties (e.g.,
8 consultants, auditors, and public relations firms).” (No. 39); and
9 · “Any and all DOCUMENTS that RELATE TO YOUR knowledge before the
FIRE of the hazardous and negligent conditions you alleged against Defendants
10 in the FIRE CASE.” (No. 40).
11
Edelman Decl. Ex. F. Plaintiffs’ overbroad, burdensome, and harassing demands are
12
all made in service of bolstering claims that cannot proceed past the pleadings stage.
13
These demands also constitute an invasion of UMG’s privacy interests as well as
14
those of other artists. Indeed, Plaintiffs are also fishing for information about artists
15
who are not currently part of this litigation and are not encompassed within the
16
putative class. See id. (Request Nos. 16, 30–31, 36, 38). These requests are not only
17
inappropriately invasive—seeking the terms of other artists’ recording agreements
18
irrespective of whether or not such artists would even want to be part of this litigation
19
or provide their agreements to other artists and their counsel—but also premature.
20
Plaintiffs are not entitled to receive merits discovery simply by making conclusory
21
allegations that are plainly insufficient to state any viable claim. See Ashcroft v. Iqbal,
22
556 U.S. 662, 678–79 (2009) (the “doors of discovery” will not be “unlock[ed]” when
23
a “plaintiff [is] armed with nothing more than conclusions”); Moua v. Int’l Bus.
24
Machs. Corp., 2012 WL 5373401, at *4 (N.D. Cal. Oct. 30, 2012) (noting the Supreme
25
Court’s “admonition against unlocking the ‘doors of discovery’ to a plaintiff asserting
26
mere speculation”).
27
28
Gibson, Dunn &

Crutcher LLP
23
#:1009
1 C. Plaintiffs Will Suffer No Prejudice from a Stay of Discovery

2 As the 11-year gap (a gap that included four years of high-profile public
3 litigation between UMG and the backlot owners as well as UMG’s insurers) between
4 the fire and filing of this Complaint makes clear, there is no urgent need for Plaintiffs
5 to obtain discovery. UMG understands its preservation obligations now that litigation
6 has been filed, and it has and will continue to take the necessary steps to ensure that
7 any potentially relevant material it still has in its possession, custody, or control is
8 preserved in the unlikely event that Plaintiffs make it past the pleadings stage and
9 discovery commences. But at present, there is no reason why UMG should be forced
10 to undergo burdensome discovery before Plaintiffs have shown they can state a viable
11 claim and while UMG continues to provide targeted, artist-specific responses about the
12 post-fire status of various musical assets.
13 The Court should therefore stay discovery unless and until the Court allows
14 Plaintiffs to proceed past the pleadings stage.
15 V. CONCLUSION
16 The Court should therefore grant this motion and temporarily stay discovery
17 pending a ruling on UMG’s forthcoming motion to dismiss Plaintiffs’ FAC.
18
19 Dated: August 21, 2019 Respectfully submitted,
20 GIBSON, DUNN & CRUTCHER LLP
21 By: /s/ Scott A. Edelman
22 Scott A. Edelman (SBN 116927)
sedelman@gibsondunn.com
23 Deborah L. Stein (SBN 224570)
dstein@gibsondunn.com
24 Nathaniel L. Bach (SBN 246518)
nbach@gibsondunn.com
25 333 South Grand Avenue
Los Angeles, CA 90071
26 Telephone: 213.229.7000
Facsimile: 213.229.7520
27
Attorneys for Defendant
28 UMG RECORDINGS, INC.
Gibson, Dunn &
Crutcher LLP
24

Soundgarden Et Al V UMG Motion To Stay Discovery

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Case 2:19-cv-05449-JAK-JPR Document 28-1 Filed 08/21/19 Page 1 of 29 Page ID #:981

1 SCOTT A. EDELMAN, SBN 116927

Gibson, Dunn &

Gibson, Dunn &

8 Bell Atl. Corp. v. Twombly,

Gibson, Dunn &

16 In re Nexus 6p Prod. Liab. Litig.,

Gibson, Dunn &

8 Cal. Civ. Code § 1710(3) ............................................................................................... 18

14 May 2016 Code of Conduct, available at

Gibson, Dunn &

Gibson, Dunn &

Gibson, Dunn &

7 · Financial, legal, and other proprietary business information;

Gibson, Dunn &

Gibson, Dunn &

Gibson, Dunn &

Gibson, Dunn &

1 “exploitation” and applies only to “Masters licensed by [UMG] to others on a flat-fee

Gibson, Dunn &

Gibson, Dunn &

1 To the extent Plaintiffs’ bailment claim is actually premised on an alleged

Gibson, Dunn &

Gibson, Dunn &

Gibson, Dunn &

Gibson, Dunn &

Gibson, Dunn &

Gibson, Dunn &

1 B. Plaintiffs’ Extraordinarily Burdensome Initial Discovery Requests Confirm

4 Documents, which contains 40 oppressive, overbroad, and burdensome requests

8 language of the requests confirms just how disproportionate, overbroad, and

9 burdensome they are. For example, Plaintiffs want:

10 · “All DOCUMENTS reflecting COMMUNICATIONS by YOU to anyone other

Gibson, Dunn &

Gibson, Dunn &

1 C. Plaintiffs Will Suffer No Prejudice from a Stay of Discovery

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