Glass Egg Digital Media v. Gameloft, Inc.

Background

Glass Egg Digital Media brought claims for copyright infringement, conversion, and unfair competition against Gameloft SE and Gameloft Inc. The underlying discovery dispute concerned the scope of discovery allowed under Judge Maxine Chesney’s order permitting discovery about the size of Gameloft SE’s business in California for purposes of personal jurisdiction. Glass Egg and Gameloft SE adopted different interpretations of the word “size.” Glass Egg sought broad information about Gameloft SE’s business, while Gameloft SE argued that discovery should be limited to particular California sales connected to the claims.

The parties’ later briefing did not clearly identify which discovery requests remained disputed. Judge Illman ordered additional briefing and ultimately granted in part and denied in part Glass Egg’s motion to compel. Judge Chesney later clarified that only requests concerning revenue received from California residents’ use of the website and from advertising directed to California residents fell within the jurisdictional-discovery order; other disputed requests did not.

Glass Egg also served subpoenas on third parties seeking broad information referring or relating to “Gameloft.” Judge Illman granted Gameloft SE’s motion to quash those subpoenas because they did not distinguish between Gameloft SE and Gameloft Inc., exceeded the limits of jurisdictional discovery, and imposed undue burdens on third parties. He also found that most of the requested information could be obtained directly from Gameloft Inc. Judge Chesney denied Glass Egg’s later request to modify or clarify that ruling.

Sanctions Requests

Gameloft SE refiled a motion under Federal Rules of Civil Procedure 37 and 45 seeking $76,675.20 for opposing Glass Egg’s motion to compel, $81,748.40 in fees for moving to quash the third-party subpoenas, and $20,000 for preparing and filing the sanctions motion. A previous sanctions motion had been denied without prejudice because it did not provide sufficient itemization and support for the amounts requested.

Rulings

Judge Illman denied Gameloft SE’s request for $76,675.20 related to the discovery dispute. He reasoned that both sides had contributed to the confusion about the meaning of “size,” neither side had sought timely clarification from Judge Chesney, and neither side’s interpretation had been fully accepted. Under Rule 37, the court had discretion to apportion reasonable expenses, but the circumstances made an award against Glass Egg unjust.

As to the subpoena dispute, Judge Illman granted in part and denied in part Gameloft SE’s request for $81,748.40. He found that Glass Egg’s subpoenas had been formulated with an improper purpose: to obtain broad discovery about both companies despite the jurisdictional limits applicable to Gameloft SE. However, he found the requested fees unreasonable because the motion to quash involved a relatively simple issue and the billing records showed overlapping or repetitive work. He calculated reasonable expenses at $13,750, based on 25 hours at a $550 hourly rate, and ordered Glass Egg to pay Gameloft SE that amount within three weeks of the order.

Judge Illman denied Gameloft SE’s separate request for $20,000 for bringing the sanctions motion because it was an unexplained, non-itemized lump sum and was not supported by billing records. The final order therefore denied the $76,675.20 request, granted in part and denied in part the $81,748.40 request, and denied the $20,000 request.