Toyrrific LLC v. Karapetian

          ORDER GRANTING DEFENDANTS’ REVISED MOTION FOR SUMMARY JUDGMENT [103]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiff Toyrrific, LLC (“Toyriffic”) maintains that Defendants Edvin Karapetian, Edward Minasyan, Lena Amerkhanian, and EDO Trading, Inc. (collectively, “Defendants”) violated the terms of the parties’ settlement agreement from a predecessor action. In light of the Ninth Circuit’s decision, which reversed and remanded this Court’s previous Order, Defendants renew their Motion for Summary Judgment. (Motion for Sum. J. (“Mot.”), ECF No. 103.) The Ninth Circuit held that when imposing Rule 37(c)(1) exclusionary sanctions, the Court must do so under the standard of R&R Sails, Inc. v. Ins. Co. of Penn., 673 F.3d 1240, 1246 (9th Cir. 2012). (ECF No. 87.) That is, the Court must find that a plaintiff’s “noncompliance involved willfulness, fault or bad faith, ” and must consider “the availability of lesser sanctions” before imposing a sanction that would amount in the dismissal of a claim. Id. at 1245, 1247. For the reasons discussed below, the Court GRANTS Defendants’ Motion for Summary Judgment pursuant to the standard in R&R Sails.^[1]

         II. FACTUAL BACKGROUND

         Toyrrific is a leader in the manufacturing, selling, and marketing of airsoft toy guns and remote-control toys. (Additional Material Facts (“AMF”) 57, ECF No. 67-2.) It also operates HobbyTron, which sells toys through its website, Hobbytron.com. (Id. 58.) Defendant Karapetian is a former Toyrrific employee who, along with Defendant Minasyan, allegedly stole Toyrrific’s products, trade dress, copyrighted materials, trademarks, and trade-secret information to establish a competing business, HobbyChase. (Id. 59.)

         As a result of Karapetian and Minasyan’s alleged infringement, Toyrrific filed an action against both individuals in August 2010 for copyright infringement and other claims related to the alleged unlawful interference with Toyrrific’s company. (Id. 61.); Toyrrific v. Karapetian (“Toyrrific I”), No. CV 10-5813-ODW(Ex) (C.D. Cal. Aug. 5, 2010). The parties ultimately resolved Toyrrific I on December 12, 2011, through the execution of a Settlement Agreement and Mutual General Release (“Agreement”). (Id. 63.)

         Six months later, on May 23, 2012, Toyrrific filed the present action alleging that Defendants violated the terms of the Agreement. (Compl. ¶ 21, ECF No. 1.) Specifically, Toyrrific alleges that Defendants breached the Agreement by: 1) failing to comply with the terms of the Court’s preliminary injunction; 2) failing to stop operating a website similar to hobbychase.com; 3) failing to cease operating the HobbyChase business; and 4) failing to deliver assets of HobbyChase, as described in the Bill of Sale included with the Agreement. (Id. ¶ 49.) On August 16, 2012, the Court dismissed all claims except for Toyrrific’s breach of contract claim. (ECF No. 30.)

         On March 25, 2013, Defendants moved for summary judgment on Toyriffic’s remaining claim. (ECF No. 50.) The Court entered judgment in favor of Defendants on April 16, 2013 based on Rule 37(c)(1) exclusionary sanctions. Toyriffic v. Karapetian (“Toyrrific II”), Case No. 2:12-cv-04499-ODW(Ex) (C.D. Cal. Apr. 16, 2013, ECF No. 71.) Toyriffic appealed the Court’s order, and the Ninth Circuit reversed and remanded the case back to this Court, holding that the district court erred as a matter of law by imposing Rule 37(c)(1) exclusionary sanctions without finding that Toyrrific’s “noncompliance involved willfulness, fault, or bad faith, ” and without considering “the availability of lesser sanctions.” (ECF No. 87.); R&R Sails, 673 F.3d at 1245, 1247. On February 22, 2016, Defendants filed a renewed Motion for Summary Judgment. (ECF No. 103.) On March 02, 2016, Toyriffic filed its Opposition to Defendants’ Revised Motion for Summary Judgment, two days after the Court imposed deadline. (Pl.’s Opp’n to Def.’s Mot. for Summary Judgment. (“Opp’n.”), ECF No. 105.) On March 07, 2016, Defendants filed a timely Reply. (Def.’s Reply to Pl.’s Opp’n (“Reply”), ECF No. 107.)

         III. LEGAL STANDARD

         Summary judgment should be granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Once the moving party has met its burden, the nonmoving party must go beyond the pleadings and identify specific facts through admissible evidence that show a genuine issue for trial. Id.; Fed.R.Civ.P. 56(c). Conclusory or speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill’s Publ’g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979).

         A genuine issue of material fact must be more than a scintilla of evidence, or evidence that is merely colorable or not significantly probative. Addisu v. Fred Meyer, 198 F.3d 1130, 1134 (9th Cir. 2000). A disputed fact is “material” where the resolution of that fact might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1968). An issue is “genuine” if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Id. Where the moving and nonmoving parties’ versions of events differ, courts are required to view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007).

         IV. DISCUSSION

         As a general rule, a motion for summary judgment is not granted automatically solely because no response has been filed. Smith v. Hudson, 600 F.2d 60, 65 (6th Cir. 1979); Champion v. Artuz, 76 F.3d 483, 486 (2d Cir. 1996). “Such a motion may properly be granted only if the facts as to which there is no genuine dispute ‘show that the moving party is entitled to a judgment as a matter of law.’” Id. (quoting Fed.R.Civ.P. 56(c)). As such, the effect of the nonmovant’s failure to respond to a motion for summary judgment is that it constitutes an admission by the nonmovant that there are no disputed issues of genuine fact warranting trial, but does not constitute a waiver by the nonmoving party of all the legal arguments based upon those undisputed facts. Flynn v. Sandahl, 58 F.3d 283, 288 (7th Cir. 1995).

         Central District of California Local Rule 7-9 requires an opposing party to file an opposition to any motion at least twenty-one (21) days prior to the date designated for hearing the motion. C.D. Cal. L.R. 7-9. Despite the Court imposed deadline, Toyriffic failed to timely file its Opposition, and thus the Court takes this Motion as unopposed. ...