Mon Cheri Bridals, LLC v. Cloudflare, Inc.

Background

The court considered cross-motions to compel filed by Plaintiffs Mon Cheri Bridals, LLC, et al., and Defendant Cloudflare, Inc. The court held a hearing on March 30, 2021.

The copyright plaintiffs had produced annual financial statements but redacted every line item except annual sales totals. Cloudflare sought unredacted information about costs and profits, financial statements for 2018 and 2019, and business records discussing the reasons for the plaintiffs’ financial performance. The plaintiffs sought statutory damages rather than actual damages.

The plaintiffs also refused to provide a privilege log for documents responsive to Cloudflare’s requests concerning Cloudflare, this lawsuit, and other lawsuits or potential lawsuits against Cloudflare. They asserted that the documents were privileged and claimed that preparing a log would be unduly burdensome. Cloudflare agreed that the plaintiffs could omit documents created after the lawsuit was filed but continued to seek a log for pre-complaint documents.

Separately, the plaintiffs moved to compel responses to Requests for Admission 54 through 69. The requests concerned Cloudflare’s services for 109 websites, caching and temporary storage, copyright notices, Cloudflare’s responses to those notices, disciplinary actions, nameserver requirements, and continued provision of services. The opinion states that the parties had reduced the list from 142 websites to 109 during the meet-and-confer process.

Financial Information

The court explained that statutory damages under 17 U.S.C. § 504(c)(1) may range from $750 to $30,000 per infringed work, subject to a higher cap for certain proven conduct. Courts consider factors including saved expenses and profits, the plaintiff’s lost revenues, the value of the copyright, deterrence, the defendant’s conduct, cooperation in providing records, and the need to discourage the defendant.

The court agreed that a plaintiff seeking only statutory damages is not required to submit evidence of lost profits. But it distinguished that issue from whether a defendant may obtain evidence showing that the plaintiff suffered no lost profits. Because avoiding a windfall is relevant when determining statutory damages, the court held that Mon Cheri’s profit information and the reasons for its profits were relevant discovery if the plaintiffs sought damages above the statutory minimum. The court also rejected the argument that the plaintiffs’ profits were irrelevant because they used the images to advertise and promote dresses rather than selling the images directly.

The court granted Cloudflare’s motion to compel with respect to the plaintiffs’ financial information. The opinion states that the plaintiffs were not required to submit lost-profit evidence, but if they sought statutory damages above the minimum, Cloudflare could present evidence that they had not suffered lost profits.

Privilege Log

The court relied on authorities stating that communications with counsel and work product prepared for litigation generally need not be included on a privilege log, including litigation-related communications created before the complaint was filed. It declined to order the plaintiffs to log communications with outside counsel retained to represent them in this case, regardless of whether those communications occurred before or after the complaint was filed.

The court therefore denied this part of Cloudflare’s motion to compel. It reasoned that documents responsive to the specified requests and also consisting of communications with litigation counsel were overwhelmingly likely to be privileged or attorney work product, making a requirement to log them a pointless waste of time.

Requests for Admission

The court found that, except for Request for Admission 65, Cloudflare’s existing responses were evasive and nonresponsive and did not answer the requests separately for each of the 109 websites. The court rejected Cloudflare’s burden argument. It reasoned that much of the information was likely available in centralized databases or records, and that Cloudflare could state that it did not know an answer if the information could not be determined.

The court also explained that producing documents from which an answer might be inferred was not enough. Requests for admission are intended to remove matters from dispute so that the requesting party does not have to prove them through documents at trial. The court stated that Rule 36 does not allow a responding party to refer to documents in the same way that Rule 33 permits for interrogatories.

The court’s footnote states that Cloudflare had answered Request for Admission 65 by explaining that it located and provided information to facilitate investigation but did not investigate the merits of infringement accusations. Because that response stated a general business practice, the court found that Cloudflare did not need to provide a separate response for each website.

The court granted the plaintiffs’ motion to compel, except as to Request for Admission 65. The order did not decide the truth of the facts addressed by the requests for admission; it required Cloudflare to provide compliant responses.

Disposition

The court granted Cloudflare’s motion to compel as to the plaintiffs’ financial information, denied the privilege-log portion of Cloudflare’s motion, and granted the plaintiffs’ motion to compel except as to Request for Admission 65. The order was a discovery ruling and did not resolve the underlying copyright claims.