The case of the day is In re Barkats (Bankr. D.D.C. 2014). In early 2014, several creditors of Pierre Philippe Barkats filed an involuntary bankruptcy petition. They served it on him by “delivery through owner and co-resident” at a home in Chevy Chase, Maryland, which Barkats’s lawyer had listed as Barkats’s address in a document filed with the District of Columbia Superior Court in an unrelated case. But the lawyer later averred that he had given the address solely as an address for receiving mail in the Superior Court action and that Barkat lived in France. After Barkat failed to answer the petition and the creditors obtained an order for relief, Barkats moved to vacate the order on the grounds that he had never been served with the petition.
The case of the day is Blagman v. Apple, Inc. (S.D.N.Y. 2014). Norman Blagman sued Apple, Google, Microsoft, Emusic.com, and others on behalf of a purported class, alleging that the defendants had made musical works available for sale online without obtaining licenses from the owners of the copyrights. The theory was that foreign record labels were reproducing and uploading the infringing recordings to the internet, where US customers could purchase and download them.
In today’s case, Blagman sought the issuance of letters of request seeking depositions in the United Kingdom and France. The proposed witnesses were the owners of several record labels and the like. The proposed letters of request sought testimony concerning (1) whether the witness obtained licenses to make and distribute digital sound recordings, (2) whether the witness obtained licenses to duplicate already-fixed sound recordings, and (3) whether the witness had authorization to import the recordings into the United States.
The defendants’ main strategy was to parse the amended complaint and to argue that the discovery sought was irrelevant in light of the amended complaint’s allegations. For example: the plaintiffs sought to discover whether suppliers had authority to duplicate sound recordings. But the plaintiffs held copyrights in musical compositions, not sound recordings. But they were trying to parse things too finely. I won’t get into the details of the copyright law here, but here’s an example of the court’s conclusions:
Thus, although the claims in the Amended Complaint are tied solely to infringement of compositions, whether the Suppliers duplicated recordings without authorization from the copyright holder of the sound recording is critical to determining whether a compulsory license in the underlying composition is even available.
The judge also rejected the defendants’ argument of undue burden on the grounds that they had made only conclusory statements about the burden and had not shown the burden with specific evidence.
The case of the day is In re Activision Blizzard, Inc. Stockholder Litigation (Del. Ch. 2014). The case was a classic shareholder derivative action. After a complicated restructuring transaction between Activision and Vivendi, shareholders of Activision sued, claiming that Activision’s directors and Vivendi itself breached fiduciary duties to Activision by setting a price for the sale of Activision shares that enriched Vivendi and two Activision executives at the expense of the shareholders. The shareholders sought to take discovery from Vivendi and some of its directors (who were named as defendants, too), and the Vivendi defendants refused to the extent the documents requested were located in France, on the grounds that discovery had to proceed under the Hague Evidence Convention. They also argued that their depositions should occur in France rather than in Delaware. The shareholders moved to compel.