Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Ticketmaster L.L.C. v. Prestige Entertainment West Inc.

United States District Court, C.D. California

May 29, 2018

TICKETMASTER L.L.C., a Virginia limited liability company, Plaintiff,
v.
PRESTIGE ENTERTAINMENT WEST, INC., a California corporation, RENAISSANCE VENTURES LLC, a Connecticut limited liability company, NICHOLAS LOMBARDI, STEVEN K. LICHTMAN, and DOES 1 through 10, inclusive, Defendants.

          ORDER DENYING DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT [37]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Ticketmaster L.L.C. (“Ticketmaster”) brings this suit against Prestige Entertainment West, Inc., Renaissance Ventures LLC, Nicholas Lombardi, and Steven K. Lichtman[1] (collectively, “Defendants”), alleging thirteen causes of action based on Defendants' use of automated programs generally known as bots, which navigate Ticketmaster's website and mobile app in order to purchase large quantities of tickets for resale at a profit. (See generally Compl., ECF No. 1.) Defendants moved to dismiss the Complaint, and the Court granted the motion in part with leave to amend. (ECF Nos. 24, 32.) Ticketmaster filed its First Amended Complaint on February 21, 2018. (First Am. Compl. (“FAC”), ECF No. 36.) Defendants now move to dismiss the First Amended Complaint in its entirety. (Mot. 1, ECF No. 37.) The parties submitted briefs in support of their positions, and the Court heard the parties' arguments on April 9, 2018 at 1:30 p.m. (Mot.; Opp'n, ECF No. 39; Reply, ECF No. 41; ECF No. 42.) For the foregoing reasons, the Court DENIES Defendants' Motion to Dismiss.

         II. BACKGROUND

         A. Factual Background

         Ticketmaster sells tickets for live entertainment events to the general public on behalf of its clients through its website, mobile app, and telephone call centers. (FAC ¶ 17.) Consumer demand for tickets to a given event often exceeds the supply available through Ticketmaster. (FAC ¶ 18.) This results in intense competition among consumers, who try to purchase tickets the moment that the tickets become available for sale on Ticketmaster's website and mobile app. (FAC ¶ 18.)

         Ticketmaster has employed various measures in an effort to ensure a fair and equitable ticket purchasing process for its consumers. (FAC ¶ 19.) For instance, Ticketmaster requires each user to create a password-protected account before the user can purchase a ticket. (FAC ¶ 42.) This allows Ticketmaster to better regulate ticket sales, and it also functions as a form of password protection against unauthorized access to the Ticketmaster platform. (FAC ¶ 42.) Ticketmaster also limits the No. of tickets that may be purchased in a single transaction and regulates the speed with which users may refresh their requests to search for, reserve, and purchase tickets. (FAC ¶ 19.)

         Defendants are an enterprise that seeks to profit off the intense competition for tickets that Ticketmaster's platforms engender. They do this by purchasing large quantities of tickets from Ticketmaster and selling them at a markup on StubHub.com and other ticket resale sites. (FAC ¶ 47.) In order to gain an unfair advantage in searching for and buying these tickets, Defendants have employed robots, programs, and other automated devices, generally known and referred to herein as “bots.” (FAC ¶¶ 3, 5.) These bots inundate Ticketmaster's website and mobile app with page requests and ticket reserve requests at a far higher rate than would be possible for a human alone. (FAC ¶¶ 3, 5.)

         In an effort to put a stop to bots Ticketmaster has employed several countermeasures, including:

• CAPTCHA, a security program whose purpose is to distinguish between human users and bots by requiring the purchaser to retype a series of random, partially obscured characters, a task designed to be impossible for a bot to accomplish (FAC ¶ 20);
• Splunk and other commercial data compilation and analysis services, which help Ticketmaster analyze its sales data and detect patterns that indicate that tickets have been purchased by bots (FAC ¶ 21);
• Over Ticket Limit, a proprietary feature created to automatically block, in real time, the purchase of tickets that appear to be coming from bots (FAC ¶ 22).Despite Ticketmaster's efforts, Defendants have found ways to circumvent these countermeasures by using, among other things, colocation facilities with high speed bandwidth, random No. and letter generators, cookie trading, and CAPTCHA farms. (FAC ¶¶ 43-44, 47, 51, 52.)

         Defendants' enterprise seems to have achieved its goals. Defendants used their bots to acquire tens of thousands of tickets for the New York stage play Hamilton, often purchasing thirty to forty percent of the entire amount of tickets available for a given performance. (FAC ¶ 5.) Defendants' bots also procured a majority of tickets available through Ticketmaster to the high-profile Mayweather v. Pacquiao boxing match in Las Vegas in 2015. (FAC ¶ 5.) In total, Ticketmaster estimates that between January 2015 and September 2016, Defendants generated 9, 047 dummy user accounts and 313, 528 ticket orders, sending a total of six million requests to the Ticketmaster website and mobile app. (FAC ¶¶ 42, 51, 58.)

         Use of Ticketmaster's website is governed by its Terms of Use. (FAC ¶ 24.) Users must agree to the Terms of Use before they can view and use Ticketmaster's platforms, and both the website and mobile app repeatedly remind users that the Terms of Use govern the use of Ticketmaster's services. (FAC ¶¶ 25, 27.) The Terms of Use grant users a “limited, conditional no-cost, non-exclusive, non-transferable, non-sub-licensable license to view Ticketmaster's site to purchase tickets as permitted by these Terms for non-commercial purposes only if” the user agrees not to conduct certain activities. (FAC ¶ 30.) These activities include:

• using “any robot . . . or any other . . . device, tool, or process to retrieve, index, data mine, or in any way reproduce or circumvent the navigational structure or presentation of the Content or the Site, including with respect to any CAPTCHA displayed on the site, ”
• using any “automated software or computer system to search for, reserve, buy, or otherwise obtain tickets, ”
• accessing, reloading, or refreshing transactional event or ticketing pages, or making any other request to transactional servers, more than once during any three-second interval,
• requesting “more than 1, 000 pages of the Site in any 24-hour period, whether alone or with a group of individuals;” and
• reproducing, modifying, displaying, publicly performing, distributing, or creating derivative works of the Site or its Content.

(FAC ¶ 30.)

         Ticketmaster owns registered copyrights in its website and mobile app. (FAC ¶ 28.) According to the express language in the Terms of Use, any of the above activities constitutes copyright, patent, and trademark infringement, because engaging in any prohibited activity revokes the user's permission to use the Ticketmaster website and mobile app. (FAC, Ex. A at 56.) Continued use of the Ticketmaster website without permission to do so, says the Terms of Use, constitutes infringement. (FAC ¶ 32.)

         Ticketmaster diligently attempts to identify and stop the users of bots, but Defendants' sophisticated techniques have hindered Ticketmaster's ability to do so. (FAC ¶ 58.) After tracing the bot-related ticket purchases for the Mayweather-Pacquiao boxing match to Renaissance, Ticketmaster sent a cease-and-desist letter (the “Letter”) in May 2015 addressed to Nicholas Lombardi describing some of the evidence Ticketmaster had uncovered that linked him, his colleagues, and their companies to the improper ticket purchases. (FAC ¶ 59, Ex. E.) The Letter demanded that Defendants “cease and desist from any further violations of Ticketmaster's rights.” (FAC ¶ 59, Ex. E at 72.)

         Lombardi acknowledged receiving the Letter, but Defendants continued their enterprise. (FAC ¶ 60.) On October 2, 2017, Ticketmaster initiated this lawsuit against Defendants and several Doe Defendants. Does 7 and 8 are the computer programmers and developers that created, marketed, and provided the named Defendants with the bots, and they are referred to herein as the Bot Developers. (FAC ¶ 6.) Does 9 and 10 are those entities who assisted and conspired with Prestige West by purchasing the improperly procured tickets from Defendants for later resale. (FAC ¶ 7.) These Doe defendants are referred to herein as the Additional Purchasers.

         B. Procedural History

         In its initial Complaint, Ticketmaster brought claims for: (1) breach of contract; (2) copyright infringement in violation of 17 U.S.C. § 101 et seq.; (3) violation of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 1201 et seq.; (4) fraud; (5) aiding and abetting fraud; (6) inducing breach of contract; (7) intentional interference with contractual relations; (8) violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030 et seq.; (9) violation of the California Computer Data Access and Fraud Act (“CDAFA”), California Penal Code section 502 et seq.; and (10) violation of the New York Anti-Scalping Law, New York Arts and Cultural Affairs Law section 25.01 et seq.

         After Ticketmaster filed its Complaint, Defendants moved to dismiss seven of Ticketmaster's ten claims. (ECF No. 24.) The Court granted Defendants' motion in part, dismissing the copyright infringement claim, the CFAA claim, and the California CDAFA claim. (Order Mot. Dismiss (“Order”) 9, 14, ECF No. 32.) Dismissal was granted with leave to amend, except to the extent that the copyright infringement claim was based on Defendants' excess of the limitations on page refreshes and ticket requests imposed by the Terms of Use. (Order 9.) The Court also denied Defendants' motion in part, finding that Ticketmaster's initial Complaint stated a claim with respect to the Digital Millennium Copyright Act, breach of contract, and fraud. (Order 11, 16, 18.)

         Ticketmaster's First Amended Complaint asserts a new theory of copyright infringement, and adds new allegations regarding the CFAA and CDAFA claims. (See FAC ¶¶ 94-104; 160-165; 166-178.) On March 7, 2018, Defendants moved to dismiss the First Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Mot. 1.)

         III. LEGAL STANDARD

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) “tests the sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is appropriate when a complaint “lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

         In ruling on a motion to dismiss under Rule 12(b)(6), the Court assumes all factual allegations in the complaint to be true, viewing those allegations in the light most favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). While a plaintiff need not give “detailed factual allegations, ” the plaintiff must plead sufficient facts that, if true, “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Moreover, a court need not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Ultimately, “[t]he claim must be sufficiently plausible that ‘it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.'” Mora v. U.S. Bank, No. CV 15-02436 DDP (AJWx), 2015 WL 4537218, at *2 (C.D. Cal July 27, 2015) (quoting Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011)).

         IV. DISCUSSION

         Defendants argue that Ticketmaster has failed to state a claim with respect to copyright infringement, the DMCA, the CFAA, and the California CDAFA. (Mot. 1.) Defendants argue that the Court lacks subject matter jurisdiction over the remaining claims. (Mot. 1.) They also argue that the Court should dismiss the Doe defendants because Ticketmaster has failed to timely serve them. (Mot. 4.) The Court first addresses Defendants' Motion to Dismiss the Doe defendants, because some of Ticketmaster's claims against Defendants rest on the viability of its claims against the Doe defendants.

         A. Doe Defendants

         As discussed in further detail below, Ticketmaster's claim for secondary copyright infringement against the moving Defendants rests on their direct infringement claim against Doe defendants 7 and 8. Defendants argue that such Doe pleading is improper, and that the Court should dismiss these Doe defendants because Ticketmaster has failed to identify or serve them. (Mot. 4.) Defendants seek dismissal of the Doe defendants pursuant to Rule 4(m), governing dismissal of unserved defendants, and not under 12(b)(6) for failure to state a claim. (Mot. 4;) see also Fed. R.Civ.P. 4(m).

         Defendants cite Buckheit v. Dennis, 713 F.Supp.2d 910, 918 n.4 (N.D. Cal. 2010), for the observation that “[g]enerally, ‘Doe' pleading is improper in federal court.” Although there is no provision in the Federal Rules permitting the use of fictitious defendants, Fifty Associates v. Prudential Ins. Co., 446 F.2d 1187, 1191 (9th Cir. 1970), there is a provision in the Local Rules of the Central District of California allowing the practice of pleading up to 10 Doe defendants without the need for the leave of the Court. C.D. Cal. L.R. 19-1. This alone shows that, at least in some circumstances in the Central District of California, Doe pleading is proper.

         Here, although Doe defendants 7 and 8 are fictitiously named, they are anything but fictitious. Does 7 and 8 are the individuals or entities who assisted Defendants in creating and developing the bots, and the very fact that the bots exist is proof that Does 7 and 8 exist as well. Ticketmaster has identified with specificity the roles that Does 7-8 and Does 9-10 played in the alleged enterprise. (FAC ¶¶ 6-7.)

         When the identity of alleged defendants will not be known prior to the filing of a complaint, “the plaintiff should be given an opportunity through discovery to identify the unknown defendants, unless it is clear that discovery would not uncover the identities, or that the complaint would be dismissed on other grounds.” Gillespie v. Civiletti, 629 F.2d 637, 642 (9th Cir. 1980). Doe pleading is therefore particularly appropriate when, as here, the viability of a claim against a known party depends on the actions of a party whose identity is unknown at the time of the pleading. As discussed below, Ticketmaster's copyright claim against the moving Defendants depends on direct infringement by Does 7 and 8, whose identities Ticketmaster does not yet know. Ticketmaster's lack of information prevents it from identifying the Bot Developers and the Additional Purchasers, but, as discussed below in greater detail, it knows circumstantially that these individuals or entities must exist, so it impleads them as Doe defendants. This is perfectly acceptable. There is a reasonable probability that Ticketmaster, by propounding discovery with tools such as interrogatories and requests for inspection of electronically stored information, will succeed at uncovering the identities of the Bot Developers and the Additional Purchasers. The Court will give Ticketmaster the opportunity to do so.

         Defendants maintain that Federal Rule of Civil Procedure 4(m) requires a court to dismiss a defendant who has not been served within 90 days after the Complaint was filed. Fed.R.Civ.P. 4(m). However, according to that same rule, “if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period.” Id.

         Good cause exists in this case to allow Ticketmaster additional time to serve the unidentified Defendants. The Court has yet to enter a scheduling order in this case or set a deadline for moving for leave to amend the pleadings. Moreover, as the Ninth Circuit in Gillespie implicitly recognized, an information deficit, where discovery would correct that deficit, is good cause to allow a plaintiff an extended period of time to identify and serve unknown defendants. 629 F.2d at 642. Such a deficit exists here, and the fact that Ticketmaster has indicated that it is ready to name one of the Doe defendant Bot Developers supports the conclusion that further discovery will allow Ticketmaster to identify the remaining Doe defendants. (Opp'n 23.) Ticketmaster has shown good cause, and the Court DENIES Defendants' motion to dismiss the Doe defendants from this case pursuant to Federal Rule of Civil Procedure 4(m).

         B. Copyright Infringement

         Defendants move to dismiss Ticketmaster's secondary copyright infringement claim against Prestige West, Renaissance, and the Additional Purchasers. (FAC ¶¶ 94- 99.) To establish secondary infringement, Ticketmaster must first allege direct infringement of its copyright. MDY Indus., LLC v. Blizzard Entm't, Inc., 629 F.3d 928, 937 (9th Cir. 2010). Ticketmaster alleges that Doe defendants 7 and 8, the entities that assisted the named Defendants by creating, marketing, and providing bots, are the direct infringers in this case. (FAC ¶¶ 100-04.) Although Defendants do not move to dismiss the claim against the Bot Developers, the Court analyzes Ticketmaster's claim against the Bot Developers under the same standard as that used in a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), because the sufficiency of Ticketmaster's claim for secondary infringement depends on the sufficiency of Ticketmaster's claim for direct infringement.

         “‘Anyone who violates any of the exclusive rights of the copyright owner, ' that is, anyone who trespasses into his exclusive domain by using or authorizing the use of the copyrighted work in one of the five ways set forth in the statute, ‘is an infringer of the copyright.'” Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 433 (1984) (quoting 17 U.S.C. § 501(a)). Thus, to state a claim for direct infringement, Ticketmaster must show (1) that it owns a valid copyright in the allegedly infringed material and (2) that Doe defendants 7 and 8, the Bot Developers, violated at least one exclusive right granted to copyright holders under 17 U.S.C. § 106. See A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001). These rights include the exclusive right to reproduce the copyrighted work. 17 U.S.C. § 106(1).

         However, one who reproduces the work of another is not an infringer of the copyright if the copyright holder has granted authorization to reproduce. See Sony Corp., 464 U.S. at 433. Specifically, a valid license is an affirmative defense to a claim of copyright infringement, so long as the licensee has not exceeded the scope of the license granted by the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.