PUBG Corporation v. NetEase, Inc.
- Jeffrey White
- 4:19-cv-06615
- U.S. District Court · Northern District of California
- 6
In PUBG Corporation v. NetEase, Inc., Judge White held the federal court lacked jurisdiction, denied amendment, and dismissed the case without prejudice.
The plaintiffs and defendants in PUBG II were affected: the court denied the plaintiffs’ request to amend the earlier dismissal order and dismissed their contract case without prejudice for lack of federal jurisdiction.
What happened
PUBG Corporation and others sued NetEase, Inc. and others in PUBG II, claiming that a settlement agreement supported a contract claim. The dispute followed an earlier case that had been dismissed with prejudice.
The court ruled that the earlier dismissal order did not retain federal jurisdiction over the settlement and did not include the settlement’s terms. The parties also did not have complete diversity, and the plaintiffs identified no other basis for federal jurisdiction.
The court denied the plaintiffs’ request to amend the earlier dismissal order and dismissed PUBG II without prejudice because it lacked jurisdiction. Judge Jeffrey S. White directed the clerk to close the file.
The detailed version
- PUBG Corporation v. NetEase, Inc. · No. 4:19-cv-06615
- Jeffrey White
- Mar. 3, 2020
Background
The court considered a joint letter brief about whether it had jurisdiction over PUBG II, a case involving a single claim for breach of contract. The plaintiffs alleged that the claim arose under a settlement agreement from PUBG I, an earlier related case involving allegations that the defendants copied protected elements of the video game “Playerunknown’s Battlegrounds.”
In PUBG I, the court approved the parties’ stipulation dismissing that case with prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). The dismissal order did not say that the court would retain jurisdiction to enforce the settlement, and the settlement agreement was not incorporated into the dismissal order.
Jurisdiction
The court relied on the rule that federal courts have limited jurisdiction. Under the Supreme Court’s decision in Kokkonen v. Guardian Life Insurance Co. of America, a court may retain jurisdiction to enforce a settlement by stating that intention in the dismissal order or by incorporating the settlement’s terms into the order. Without that action, enforcement generally belongs in state court unless another independent basis for federal jurisdiction exists.
The plaintiffs did not identify an independent basis for federal jurisdiction. The opinion states that the parties were not completely diverse, and the plaintiffs acknowledged that the PUBG I dismissal order did not state that the court would retain jurisdiction. The court also concluded that merely referring to the settlement in the stipulation was not enough to incorporate the settlement’s terms into the dismissal order.
Rule 60(a) Request and Disposition
The plaintiffs asked the court to amend the PUBG I dismissal order under Rule 60(a), which allows correction of a clerical mistake or an omission. The court explained that the rule focuses on the court’s intent when it entered the original judgment and cannot be used to add a new, later intent.
The court rejected the plaintiffs’ arguments that its orders relating the cases or temporarily staying PUBG I showed an original intent to retain jurisdiction over later settlement disputes. The court therefore concluded that it lacked jurisdiction over PUBG II, denied the plaintiffs’ request to amend the dismissal order, and dismissed this case without prejudice. The clerk was directed to close the file. Judge Jeffrey S. White signed the order.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.