PUBG Corporation v. NetEase, Inc. ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 PUBG CORPORATION, et al., Case No. 19-cv-06615-JSW 8 Plaintiffs, REDACTED ORDER DISMISSING 9 v. FOR LACK OF JURISDICTION1 10 NETEASE, INC., et al., Re: Dkt. No. 53 Defendants. 11 12 13 This matter comes before the Court upon consideration of the parties’ joint letter brief 14 addressing the issue of whether this Court has jurisdiction to hear this case, which the Court shall 15 refer to as PUBG II. The Court has considered that brief, relevant legal authority, the record in 16 this case, and the record in the related case PUBG Corporation, et al. v. NetEase, Inc., et al., No. 17 18-cv-02010-JSW (“PUBG I”). The Court concludes it does not require oral argument from the 18 parties. For the reasons set forth herein, the Court concludes it does not have jurisdiction, denies 19 Plaintiffs’ request to amend under Federal Rule Civil Procedure 60(a), and dismisses this case 20 without prejudice. 21 BACKGROUND 22 In PUBG I, Plaintiffs alleged Defendants copied protected elements of its video game 23 “Playerunknown’s Battlegrounds” and asserted claims for copyright infringement of in violation 24 of 17 U.S.C. sections 101, et seq., trade dress infringement, in violation of 15 U.S.C. section 25 1125(a), unfair competition in violation of California Business and Professions Code sections 26 17200, et seq., and unfair competition in violation of California common law. 27 1 On April 8, 2019, the Court approved the parties’ stipulation of dismissal. (PUBG J, Dkt. 2 || No. 102. (“Dismissal Order”).) The parties stated they had “settled this matter on or about March 3 11, 2009” and stipulated that “the above-captioned action should be dismissed with prejudice 4 || pursuant to Fed. R. Civ. P. 41(a)(1)(A).” (dd. at 2:1-3.) The parties did not submit the Settlement 5 || Agreement as an exhibit to the stipulation and they did not specifically refer to its terms. The 6 || Court stated: “The Court having considered the stipulation of the parties, and good cause 7 || appearing therefor, orders that this action is dismissed with prejudice pursuant to Fed. R. Civ. P. 8 || 41(a)(1)(A).” Cd. at 3:2-3.) 9 On October 15, 2019, Plaintiffs filed the complaint in this case, in which they alleged a 10 || single claim for breach of contract. Plaintiffs allege that “[t]his Court has subject matter 11 || jurisdiction over PUBG’s claims because they arise under a Settlement Agreement «(12 | i 028 7. (PG 17, Dit. No. 4-5, Compl. § 13 |} 10.) Plaintiffs also alleged that [ii | LS 6.5.10 (ine settemen 8 15 || Agreement, ¥ 14.)) a 16 Paragraph 14, which is entitled as . provides, in part, that an Z 17 |} action 19 20 21 22 23 24 || (Dkt. No. 4-6, Settlement Agreement § 14.) 25 On October 30, 2019, Plaintiffs moved to relate this case to PUBG J, and the Court granted 26 || that motion. 27 On January 21, 2020, Defendants filed a joint motion to dismiss pursuant to Federal Rule 28 || of Civil Procedure 12(b)(6) for failure to state a claim. On February 3, 2020, Plaintiffs filed a 1 motion for a preliminary injunction. Those motions are scheduled to be heard on May 8, 2020. 2 On February 21, 2020, the parties submitted a stipulated request for a joint case 3 management conference and to brief the issue of whether the Court has jurisdiction over the 4 matter. In that stipulation, Defendants stated that “on February 11, 2020, [they] determined, for 5 the first time, that the Court may lack subject matter jurisdiction over this litigation because the 6 stipulated dismissal filed in PUBG I does not expressly state that the Court retained jurisdiction 7 over the matter.” (Dkt. No. 50, Stipulation at 1:12-15.)2 8 The Court granted the request to permit briefing and denied the request for a case 9 management conference without prejudice. 10 On February 25, 2020, the parties filed their joint letter brief. 11 ANALYSIS 12 “Federal courts are courts of limited jurisdiction,” and “[i]t is to be presumed that a cause 13 lies outside this limited jurisdiction” unless otherwise shown. Kokkonen v. Guardian Life Ins. Co. 14 of Am., 511 U.S. 375, 377 (1994). In Kokkonen, the Supreme Court held that “[i]f parties wish to 15 provide for the court’s enforcement of a dismissal-producing settlement agreement, they can seek 16 to do so,” by stating in the dismissal that the court would retain jurisdiction or by incorporating the 17 terms of the settlement agreement in the order. Id. (emphasis added/in original). “Absent such 18 action, however, enforcement of the settlement agreement is for state courts, unless there is some 19 independent basis for federal jurisdiction.” Id. at 381-82. 20 Plaintiffs do not suggest there is an independent basis for federal jurisdiction over the 21 current claims, and it is undisputed that the parties are not completely diverse. (PUBG II, Compl. 22 ¶¶ 5-9.) Plaintiffs acknowledge that the Court did not state in the Dismissal Order that it would 23 retain jurisdiction. Although the stipulation refers to the settlement, that alone is not sufficient to 24 incorporate the terms of the parties’ agreement into the Dismissal Order. See, e.g., Kokkonen, 511 25 U.S. at 381 (“The judge’s mere awareness and approval of the terms of the settlement agreement 26 27 2 Defendants note they also raised the issue in their reply in support of the motion to dismiss, 1 do not suffice to make them part of his order.”); O’Connor v. Colvin, 70 F.3d 530, 532 (9th Cir. 2 1995) (dismissal order stating it was “based on” settlement not sufficient to confer jurisdiction, 3 even where settlement was filed with the court); Situ v. Wong, No. 13-cv-05102 JD (NJV), 2015 4 WL 433477, at *2 (N.D. Cal. Jan. 29, 2015). 5 6 Arata v. NuSkin Int’l., Inc., 96 F.3d 1265, 1269 (9th Cir. 1996) 7 (citing cases); see also Situ, 2015 WL 433477, at *2. As noted in Kokkonen, “compliance with the 8 terms of the settlement contract (or the court’s ‘retention of jurisdiction’ over the settlement 9 contract) may, in the court’s discretion, be one of the terms set forth in the order.” 511 U.S. at 10 381 (emphasis added). By its terms, the Court did not retain jurisdiction over this matter in the 11 Dismissal Order, and the parties did not incorporate the terms of the Settlement Agreement into 12 the Dismissal Order. Therefore, the Court lacks jurisdiction over PUBG II. 13 Plaintiffs urge the Court to amend the Order of dismissal in PUBG I pursuant to Federal 14 Rule of Civil Procedure 60(a), which permits a court to correct a “clerical mistake or a mistake 15 arising from oversight or omission.” “Rule 60(a)’s touchstone is fidelity to the intent behind the 16 original judgment,” and in the Ninth Circuit the focus is on a court’s original intent. Garamendi v. 17 Henin, 683 F.3d 1069, 1078 (9th Cir. 2012); see also id. at 1080 (quoting Burton v. Johnson, 975 18 F.2d 690, 694 (10th Cir. 1992)). The Court “may use Rule 60(a) to facilitate enforcement of its 19 judgments” and to correct any ambiguities. Id. at 1078. However, the Court cannot amend the 20 order under the guise of correction “to reflect a new and subsequent intent.” Id. at 1080 (quoting 21 Burton, 975 F.2d at 964). 22 Plaintiffs rely, in part, on Kang v. Harrison to support their argument that the Court should 23 amend the Dismissal Order. 789 Fed. Appx. 68, 69 (9th Cir. 2020). In Kang, the Ninth Circuit 24 affirmed the district court’s decision to amend a dismissal order to include language retaining 25 jurisdiction to enforce the parties’ settlement agreement and concluded that “ample evidence in the 26 record” supported “a finding that this amendment comports with the district court’s original 27 intent.” Id. The court noted that a docket entry resulting from a settlement conference before a 1 court also looked to the terms of the settlement agreement, which provided that the district court 2 “has jurisdiction over this Agreement.” Id. 3 Plaintiffs argue the Court’s intent can be inferred from its Order relating this matter to 4 PUBG I. However, when Plaintiffs moved to relate the two cases, 5 They also did not specifically 6 alert the Court to paragraph 10 of the Complaint in PUBG II. Instead, Plaintiffs focused their 7 argument on the standards set forth in Northern District Civil Local Rule 3-12. The Court’s 8 decision to grant the motion to relate was based on that standard 9 10 Plaintiffs also argue the Court’s intent can be inferred from an Order in PUBG I, in which 11 the Court approved the parties’ stipulation to stay the matter for a brief period of time. In their 12 stipulation, the parties stated they had settled the matter pursuant to a Settlement Agreement and 13 asked to stay the matter until April 12, 2019 because the terms of the agreement required certain 14 actions to be taken before the case could be dismissed with prejudice. When the Court approved 15 the stipulation, it also denied a motion to dismiss without prejudice and stated Defendant could 16 renew the motion if the settlement was not finalized. (Dkt. No. 100.) When the Court stated 17 Defendant could renew a motion to dismiss so that the case could proceed if the settlement was 18 not finalized, did not 19 intend to suggest it would retain jurisdiction over disputes relating to the Settlement Agreement 20 after the parties dismissed the matter. Moreover, at that time, the case was pending, and the Court 21 would have had the inherent authority to summarily enforce the agreement. See, e.g., Thomas v. 22 Shree Jalaram, LLC, No. 18-cv-06409-LB, 2019 WL 3503806, at *10 (N.D. Cal. Aug. 1, 2019) 23 (citing In re Suchy, 786 F.2d 900, 902-03 (9th Cir. 1985) but denying motion to enforce settlement 24 because original case had been dismissed). 25 // 26 // 27 // 1 Accordingly, the Court DENIES Plaintiffs’ request to amend the Dismissal Order. 2 || Because the Court lacks jurisdiction, the Court DISMISSES this case without prejudice. The 3 Clerk shall close the file. 4 IT ISSO ORDERED. a) 5 || Dated: March 3, 2020 / } Nt \ / 6 f 7 = 7 JEFFREY S,WHITE UniseG/Statg District dge 9 10 11 13 Oo 15 Q 16 & = 17 Z 18 19 20 21 22 23 24 25 26 27 28