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Arista Records LLC; Atlantic Recording Corporation; Arista Music, Fka v. Lime Group LLC; Lime Wire LLC; Mark Gorton; Greg Bildson; and M.J.G.

February 28, 2011

ARISTA RECORDS LLC; ATLANTIC RECORDING CORPORATION; ARISTA MUSIC, FKA BMG MUSIC; CAPITOL RECORDS, INC; ELEKTRA ENTERTAINMENT GROUP INC; INTERSCOPE RECORDS; LAFACE RECORDS LLC; MOTOWN RECORD COMPANY, L.P.; PRIORITY RECORDS LLC; SONY MUSIC ENTERTAINMENT, FKA SONY BMG MUSIC ENTERTAINMENT; UMG RECORDINGS, INC; VIRGIN RECORDS AMERICA, INC.; AND WARNER BROS. RECORDS INC.,
PLAINTIFFS,
v.
LIME GROUP LLC; LIME WIRE LLC; MARK GORTON; GREG BILDSON; AND M.J.G. LIME WIRE FAMILY LIMITED PARTNERSHIP, DEFENDANTS.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.:

OPINION AND ORDER

I. Introduction

On May 11, 2010, this Court granted summary judgment in favor of Plaintiffs on their claims against Defendants Lime Wire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants induced users of the LimeWire online file-sharing program ("LimeWire") to infringe Plaintiffs' copyrights. In the Court's Opinion and Order (as amended on May 25, 2010), the Court detailed this case's procedural and factual background, familiarity with which is assumed. See Dkt. Entry No. 223.

The litigation is now in the damage phase, with a trial on damages scheduled for May 2, 2011. For the past few months, the parties have been engaged in vigorous discovery concerning Plaintiffs' potential statutory damage awards. The instant dispute concerns the scope of damage-related discovery to which Defendants are entitled.

Plaintiffs have filed an objection to Magistrate Judge Freeman's Order of January 18, 2011, directing Plaintiffs "to produce internal communications referring to 'LimeWire' from the files (including email) of 10 custodians." See Dkt. Entry No. 413, at 4 (hereinafter, the "January 18 Order"); see also Dkt. Entry No. 463 (hereinafter, "Pl. Obj."). The procedural background leading up to the January 18 Order is as follows:

On November 2, 2010, Judge Freeman ordered:

Order 1: That Plaintiffs produce all [external] communications, relating to licensing, between Plaintiffs and the 15 third-party licensees recently subpoenaed by Defendants, except for draft license agreements, from the last point in time discovery was collected ("Order 1");

Order 2: That Plaintiffs produce all communications with other licensees referring or relating to LimeWire ("Order 2");

Order 3: That the parties meet and confer regarding the parameters of an appropriate search for Plaintiffs' communications with their potential (as opposed to actual) licensees ("Order 3");

Order 4: That Plaintiffs search for and produce internal emails regarding LimeWire contained in the email accounts of those employees of Plaintiffs who have been primarily responsible for negotiating licensing agreements with the 15 third-party licensees recently subpoenaed by Defendants ("Order 4").

See Dkt. Entry No. 339. Plaintiffs filed an objection to all four Orders.

In an Opinion and Order issued on November 19, 2010, the undersigned acknowledged the "potentially burdensome nature and broad scope of the discovery, as well as the potentially tenuous connection of the evidence sought to the damages inquiry at issue." Dkt. Entry No. 363 at 6. However, the undersigned also acknowledged "Defendants' right to seek discovery relevant to a potential defense." Id. Accordingly, the Court affirmed only Order 1. With respect to Orders 2-4, the Court stated the following:

[The] Court holds in abeyance its decision [on Orders 2-4], to give Defendants the opportunity to make a presentation of evidence to Judge Freeman to demonstrate that the discovery pursuant to Order 1 has yielded relevant evidence, and that further discovery pursuant to Orders 2-4 is necessary. The Parties shall meet and confer in good faith regarding when production of evidence pursuant to Order 1 may be made, and when the Parties will be prepared to appear before Judge Freeman to address the need for discovery pursuant to Orders 2-4.

Id. at 7 (emphasis added). Thus, the undersigned was clear that, in order to reinstate Orders 2-4, Defendants would need to show (1) that the compelled discovery into communications between Plaintiffs and fifteen third-party licensees pursuant to Order 1 has ...


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