Alivecor, Inc. v. Apple, Inc. ( 2023 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALIVECOR, INC., Case No. 21-cv-03958-JSW 8 Plaintiff, ORDER DENYING MOTION FOR 9 v. LEAVE TO FILE MOTION FOR RECONSIDERATION 10 APPLE INC., Re: Dkt. No. 184 Defendant. 11 12 13 Now before the Court for consideration is the motion for leave to file a motion for 14 reconsideration filed by Defendant Apple Inc. (“Apple”). Apple seeks reconsideration of the 15 Court’s May 16, 2022 Order granting the motion to dismiss Apple’s counterclaim in light of the 16 Ninth Circuit’s decision in Epic Games, Inc. v. Apple, Inc., 67 F.4th 946 (9th Cir. 2023). 17 AliveCor has filed an opposition to Apple’s motion. For the following reasons, the Court 18 DENIES Apple’s motion. 19 A party moving for reconsideration “must specifically show reasonable diligence in 20 bringing the motion” and one of the following circumstances: (1) that at the time of the motion for 21 leave, a material difference in fact or law exists from that which was presented to the Court or, in 22 the exercise of reasonable diligence could have been presented, before the entry of the order for 23 which reconsideration is sought; (2) the emergence of new material facts or a change of law 24 occurring after the time of such order; or (3) a manifest failure by the Court to consider material 25 facts or dispositive legal arguments presented to the Court before such interlocutory order. See 26 N.D. Civ. L.R. 7-9(b). 27 Apple contends that the decision in Epic Games constitutes a change in law occurring after 1 Order”).) In Epic Games, the Ninth Circuit reversed the district court’s holding as to the 2 indemnification provision in Apple’s developer license program agreement (“DPLA”). 67 F.4th at 3 1003. In that case, Apple asserted a breach of contract counterclaim against Epic Games for 4 breach of the DPLA. The issue before the Ninth Circuit was whether Apple was entitled to 5 recover its attorneys’ fees for the breach of contract counterclaim pursuant to the DPLA’s 6 indemnification provision. Section 10 of the DPLA provides that a party “agree[s] to indemnify 7 and hold harmless, and upon Apple’s request, defend, Apple[]…from any and all claims, losses, 8 liabilities, damages, taxes, expenses and costs, including without limitation, attorneys’ fees and 9 court costs…incurred by [Apple] and arising from or related to” several enumerated grounds. The 10 Ninth Circuit’s analysis was limited to clause (i) of Section 10, which applied to Epic’s “breach of 11 any certification, covenant, obligation, representation or warranty in [the DPLA].” Id. at 1004. 12 The Ninth Circuit held that clause (i) rebutted the general presumption that indemnification 13 provisions allow one party to recover costs incurred in defending actions by third parties because 14 it “expressly refer[red] to Epic’s ‘breach’ of its obligations pursuant to the DPLA—contemplating 15 an intra-party action for breach of contract, not claims by third parties.” Id. at 1004. Thus, the 16 Ninth Circuit held that “clause (i) contemplates intra-party disputes and Apple [was] entitled to 17 attorney fees pursuant to it.” Id. 18 The Court disagrees that the Ninth Circuit’s decision in Epic Games represents a change of 19 law occurring after this Court’s dismissal of its counterclaim. The Ninth Circuit addressed 20 whether Apple could seek indemnification for its breach of contract counterclaim pursuant to 21 Section 10(i) of the DPLA. The Ninth Circuit held that Apple could, but it limited its analysis and 22 holding to clause (i) of the DPLA—the clause relevant to Apple’s breach of contract counterclaim. 23 Here, in contrast, there is no breach of contract counterclaim. Apple alleged a counterclaim for 24 indemnification seeking attorneys’ fees “arising from or related to AliveCor’s use of the Apple 25 Software or Services, its Covered Products, and/or its development and distribution of AliveCor’s 26 apps, Authorized Test Units, Registered Devices, and/or Covered Products…” (Dkt. No. 46, ¶16.) 27 Thus, the language of Apple’s counterclaim tracks clause (vi) of Section 10. This Court’s ] intra-party disputes. Indeed, in its prior Order, the Court analyzed the surrounding clauses of 2 Section 10 and acknowledged that clause (1) presented the strongest argument for applicability to 3 intra-party disputes, but the Court explained that even if clause (1) contemplated intra-party 4 || disputes, it would not change the Court’s conclusion as to clause (v1). (5/16/22 Order at 5.) Thus, 5 || the Court is not persuaded that Apple has met its burden to show that the Ninth Circuit’s decision 6 || in Epic Games, which 1s expressly limited to clause (i), represents a change in law with respect to 7 || this dispute. 8 Apple now contends that its indemnification counterclaim is not limited to clause (vi) 9 || because Apple broadly pled AliveCor breached Section 10, not one specific provision within that 10 || section. Although the counterclaim does not expressly cite clause (v1), the language in the 11 counterclaim comes directly from that clause. No other clause of Section 10 is cited or referenced. 12 || Moreover, in its Order dismissing Apple’s counterclaim, this Court clearly understood Apple’s 13 indemnification counterclaim as based solely on clause (vi) of the DPLA. (See Dkt. No. 56 at 14 || 4:13-15 (explaining that clause (vi) is the clause relevant to Apple’s counterclaim), 6:11-12 15 (“Apple’s counterclaim is not for breach of contract”); 7:3-4 (limiting its holding to clause (vi).) a 16 || If Apple believed, as it now contends, that its counterclaim was not limited to clause (vi), it seems 2 17 || it could have raised that issue much sooner perhaps by seeking to amend its counterclaim or by Z 18 || requesting clarification or reconsideration of that issue. Apple’s failure to raise this issue with the 19 || Court until now calls into question whether it exercised “reasonable diligence” in presenting this 20 argument. 21 For the foregoing reasons, the Court concludes reconsideration of its Order dismissing the 22 || counterclaim is not warranted and DENIES Apple’s motion. If Apple seeks to amend its 23 counterclaim to allege a breach of contract implicating clause (1) of Section 10 of the DPLA, it 24 || may file a motion requesting leave to do so. 25 IT IS SO ORDERED. a) 26 Dated: June 12, 2023 / / / 4, 27 \Y Shaws te JEFFREY S,/WHIT 28 United States Distriét Judge