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Goes International, AB v. Dodur Ltd.

United States District Court, N.D. California, San Francisco Division

June 8, 2017

GOES INTERNATIONAL, AB, a corporation, Plaintiff,
v.
DODUR LTD., a business entity; ZHOU MING, an individual; LI ZHE, an individual; JOHN DOES 1-10, Defendants.

          ORDER STRIKING ANSWER AND IMPOSING SANCTIONS

          LAUREL BEELER United States Magistrate Judge

         INTRODUCTION

         Plaintiff Goes International moves to strike Defendant Dodur's answer, enter terminating sanctions, and impose monetary sanctions of $7, 245 for discovery violations. (Motion - ECF No. 121.[1]) The court grants the motion.

         STATEMENT

         Goes International is a Swedish company that sells a bubble-shooting video game called Bubble Bust! (First Amended Complaint - ECF No. 27 at 2, 5-8, 29.) It sued Dodur Ltd. and its shareholders/game developers for copyright infringement, claiming that they copied Bubble Bust! and marketed infringing games called Puzzle Bubble Free! and Puzzle Bubble Sea! (Id. ¶¶ 1, 3, 12-15.) The defendants moved to dismiss for lack of personal jurisdiction; the court granted the motion in part, dismissing the individual defendants but finding personal jurisdiction against Dodur based on its distribution of games in the U.S., resulting in revenues generated from U.S. players, including from ads targeted to that U.S. audience. (Order - ECF No. 51 at 19.)

         Thereafter, and following the court's order granting Goes' motion to compel Dodur to produce discovery about damages, Dodur's attorney withdrew from the case. (Orders - ECF Nos. 84, 89.) On January 12, 2017, following Goes' motion, the court again ordered Dodur to produce discovery and name a Rule 30(b)(6) deponent; it also directed Dodur to name new counsel by February 6, 2017. (Motion - ECF No. 104; Order - ECF No. 109.) The court ordered Dodur to appear at a hearing on February 16, 2017, to show cause why it had not yet substituted in a new attorney to represent it. (Id.; Clerk's Notice - ECF No. 110.) Goes thereafter filed proof of service in English and Chinese. (Proof of Service and Update - ECF No. 113.)

         Dodur did not appear at the hearing on February 16, 2017. (See Minute Entry - ECF No. 114.) Given the lack of appearance, the court allowed Goes to cancel its deposition of Dodur, apparently set in New York. (Id.) Dodur has a parent company in New York called Qihoo 360. (Supplemental Statement - ECF No. 105.)

         The court then set a further hearing for March 9, 2017, at 9:30 a.m. and directed Dodur to show cause at the hearing why it had not named new counsel or produced the discovery that the court ordered. (Order - ECF No. 116.) The court warned that if it did not do so, it risked Goes' moving to strike its answer and then moving for default judgment against it. (Id.) Dodur did not appear at the hearing. (Minute Order - ECF No. 119.) Goes then filed its motion to strike the answer and for terminating sanctions. (Motion - ECF No. 121.)

         ANALYSIS

         1. Legal Standard

         When a district court decides to impose sanctions or discipline, it must clearly delineate under which authority it acts to ensure that the attendant requirements are met. Weissman v. Quail Lodge, Inc., 179 F.3d 1194, 1200 (9th Cir. 1999) (citing Keegan Mgmt. Co. Secs. Litig., 78 F.3d 431, 435 (9th Cir. 1996) (“For a sanction to be validly imposed, the conduct must be sanctionable under the authority relied on.”) (internal quotation marks and citation omitted)). “The imposition of sanctions requires a statement of reasons for the district court's action, including the need for the particular sanctions imposed.” Couveau v. Am. Airlines, Inc., 218 F.3d 1078, 1081 (9th Cir. 2000) (“The imposition of sanctions requires a statement of reasons for the district court's action, including the need for the particular sanctions imposed.”) (citing G.J.B. & Assocs., Inc. v. Singleton, 913 F.2d 824, 830 (10th Cir. 1990) (“If the district court ultimately imposes sanctions, detailed findings are necessary to identify the objectionable conduct and provide for meaningful appellate review.”)).

         1.1 Terminating Sanctions

         1.1.1 Dismissal Under Rule 37(b) and (d)

         “Under our precedents, in order for a court to dismiss a case as a sanction [under Rule 37(b)], the district court must consider five factors: (1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the defendants; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic alternatives.'” Yourish v. California Amplifier, 191 F.3d 983, 990 (9th Cir. 1999) (applying Rule 37(b) standard in a Rule 41(b) case) (citing Hernandez v. City of El Monte, 138 F.3d 393, 399 (9th Cir. 1998) (quoting Henderson v. Duncan, 779 F.2d 1421, 1423 (9th Cir. 1986))). “We 'may affirm a dismissal where at least four factors support dismissal, . . . or where at least three factors 'strongly' support dismissal.'” Id. (quoting Hernandez, 138 F.3d at 399) (quoting in turn Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir. 1992)). “Although it is ...


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