Livevideo.AI Corp v. Redstone

Background

Magistrate Judge Moses issued a Report and Recommendation recommending four actions: dismissal without prejudice under Federal Rule of Civil Procedure 4(m); a $10,000 monetary sanction against Livevideo.AI Corp. and its counsel, Alfred Camillo Constants, III, jointly and severally under Rule 11; referral of Constants to the District Court’s Grievance Committee; and a limited filing injunction. Livevideo objected to each recommendation.

Service and Dismissal

Rule 4(m) generally requires a plaintiff to serve the complaint within 90 days. The court found that Livevideo did not timely serve any defendant. The court also accepted the magistrate judge’s conclusion that Livevideo failed to show good cause for the delay. Livevideo’s arguments that defendants had actual notice, suffered no prejudice, and experienced only a technical error did not establish a sufficient excuse for the failure to serve.

The court also treated Livevideo’s arguments about prior service and other alleged problems with National Amusements, Inc.’s default as previously raised matters that did not show clear error. The court therefore adopted the recommendation that the case be dismissed without prejudice under Rule 4(m).

Rule 11 Violations and Sanctions

Rule 11 governs representations made in court filings and requires, among other things, that filings not be submitted for improper purposes or to advance legally frivolous claims. The court adopted the finding that Livevideo and Constants violated Rule 11(b)(1) and Rule 11(b)(2). It stated that Livevideo did not properly object to the finding under Rule 11(b)(1). As to Rule 11(b)(2), the court found that Livevideo’s federal claims under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Computer Fraud Abuse Act were frivolous.

The court declined to consider new arguments and evidence in a declaration from Brad Greenspan because the arguments were raised for the first time in the objections, the declaration attempted to add evidence after the parties had briefed the sanctions issue, and Greenspan was not an attorney. The court adopted the recommendation that Livevideo and Constants pay $10,000 to the Clerk of Court within 60 days of the opinion’s issuance.

Referral of Counsel

The court adopted the recommendation that Constants be referred to the District Court’s Grievance Committee. The recommendation concerned whether Constants should be disciplined for allowing others to use his electronic filing credentials to submit papers he did not write, review, or authorize, and for representing under penalty of perjury that National Amusements, Inc. had been properly served and that proper service was undisputed. The court rejected Constants’s objections and stated that it retained authority to impose sanctions related to conduct in the case.

Filing Injunction

The court also adopted the recommendation for a limited filing injunction. In this action, Livevideo may not file another motion seeking affirmative relief unless its counsel first seeks leave by submitting a one-page letter summarizing the proposed motion and explaining why it would not be duplicative or baseless.

The order further bars Livevideo from filing or refiling in any federal district court claims arising from the Paramount/Skydance merger without first obtaining leave from the court where it proposes to proceed. The required leave application must list Livevideo’s prior related cases and their dispositions, certify that sanctions in those cases have been paid, attach the proposed complaint, explain the basis for subject-matter jurisdiction, and explain why proposed federal claims are not frivolous if federal-question jurisdiction is asserted.

Disposition

Judge Dale E. Ho adopted the Report and Recommendation in full, imposed the $10,000 penalty, referred Constants to the Grievance Committee, ordered the filing restrictions, directed the Clerk to close the case, and dismissed the case without prejudice. The opinion did not decide the underlying Dodd-Frank or Computer Fraud Abuse Act claims on their merits.