United States District Court, N.D. California
ORDER DENYING MOTION TO ALTER THE JUDGMENT
WILLIAM ALSUP, UNITED STATES DISTRICT JUDGE
action claiming breach of the implied covenant of good faith
and fair dealing, judgment has been entered against
plaintiff. Plaintiff now moves to alter the judgment pursuant
to FRCP 59(e). For the reasons stated below, the motion is
facts of this case have been set forth in a prior order and
need not be repeated in detail herein (Dkt. No. 79). Briefly,
this action involves a dispute about a music video that
plaintiff Darnaa, LLC, posted on defendant YouTube, LLC's
website and promoted on various platforms such as Internet,
print, and radio ads, all in March 2014. Defendant Google
Inc. is Darnaa's parent company. Defendants removed the
video later that month due to alleged violations of its
terms-of-service agreement to which Darnaa indicated its
assent upon creating an account with YouTube. Specifically,
defendants removed the video because Darnaa allegedly
violated the prohibition on using automated systems to
artificially inflate video view counts on the YouTube
an order dismissed Darnaa's initial action in Los Angeles
County Superior Court pursuant to a forum-selection clause in
the terms-of-service agreement, Darnaa filed the instant
action against Google in federal court in San Jose, where it
was assigned to Judge Ronald Whyte. Judge Whyte twice
dismissed Darnaa's complaint, each time with leave to
amend (Dkt. No. 56; Dkt. No. 26). The first amended complaint
added YouTube as a defendant (Dkt. No. 29).
November 2016, upon Judge Whyte's retirement, the action
was reassigned to the undersigned. Less than two weeks later,
Darnaa moved for partial reconsideration of Judge Whyte's
decision (both initially and upon a prior request for
reconsideration) that various provisions in the YouTube
terms-of-service agreement could be enforced (Dkt. No. 59).
(Darnaa contended those provisions were unconscionable.) An
order denied Darnaa's request for leave to move for
partial reconsideration of the ruling “twice stated by
Judge Whyte” (Dkt. No. 60).
thereafter, Darnaa filed its second amended complaint,
asserting a single claim for breach of the covenant of good
faith and fair dealing (Dkt. No. 62). Defendants moved to
dismiss, contending, inter alia, that a
limitation-of-liability clause in the terms-of-service
agreement precluded Darnaa's sole surviving claim. The
provision at issue stated, in pertinent part “in no
event shall YouTube . . . be liable to [Darnaa] for any
direct, indirect, incidental, special, punitive, or
consequential damages resulting from . . . any interruption
or cessation of transmission to or from [YouTube's]
services” (Second Amd. Compl., Exh. 1 § 10)
(original in all caps).
contended that limitation-of-liability provision could not be
enforced under California Civil Code Section 1668, which
provides “all contracts which have for their objective,
directly or indirectly, to exempt anyone from responsibility
for his own fraud, or willful injury to the person or
property of another, or violation of law, whether willful or
negligent, are against the policy of the law” and
full briefing and oral argument, an order dismissed the
complaint on that theory, without leave to amend (Dkt. No.
79). Judgment followed (Dkt. No. 80).
now moves to alter the judgment pursuant to FRCP 59(e). This
order follows full briefing and oral argument.
to FRCP 59(e), a motion to alter the judgment can only be
granted if the district court is presented with newly
discovered evidence, the district court committed clear
error, or if there is an intervening change of law.
Ybarra v. McDaniel, 656 F.3d 984, 998 (9th Cir.
2011). The court of appeals will find clear error only upon
“a definite and firm conviction that a mistake has been
committed.” United States v. Ruiz-Gaxiola, 623
F.3d 684, 693 (9th Cir. 2010). If a court “got the law
right” and “did not clearly err in its factual
determinations, ” then clear error was not committed -
even if another reasonable judicial body “would have
arrived at a different result.” Alliance for the
Wild Rockies v. Cottrell, 632 F.3d 1127, 1331 (9th Cir.
2011). Here, Darnaa claims the order dismissing its second
amended complaint erroneously declined to apply Section 1668
to its claim for breach of the implied covenant of good faith
and fair dealing.
order dismissing Darnaa's claims cited binding and
persuasive California law in holding (1) that a breach of the
implied covenant of good faith and fair dealing is
“nothing more than a cause of action for breach of
contract” and (2) that Section 1668, by its own terms,
only applies to a contract claim when the contract in
question is unconscionable or insulates the contractor from
its own fraud. Food Safety Net Services v. Eco Safe Sys.