312 F.R.D. 111
S.D.N.Y.2015Background
- NJMG sued Fox News for copyright infringement over a 9/11 photograph posted on Fox-associated Facebook pages; two related actions were consolidated for trial.
- Fox News counterclaimed against NJMG for copyright infringement and Lanham Act false endorsement based on NJMG’s posting of three short Fox-owned video clips on NJMG’s website.
- NJMG filed a third-party indemnification claim against News Distribution Network, Inc. (NDN) and the Daily Caller, asserting contractual indemnity for the video-hosting arrangement.
- Third Party Defendants (NDN and Daily Caller), joined by NJMG, moved under Fed. R. Civ. P. 21 to sever the Video Counterclaims and Indemnification Claims from the Photo Claims; discovery on the Photo Claims was essentially complete while discovery on the counterclaims had not begun.
- The court evaluated the Rule 21 severance factors (same transaction, common questions, witness/document overlap, judicial economy/settlement, prejudice) and found the video/indemnity claims factually distinct and minimally overlapping with the photo claims.
- Court granted severance: Video Counterclaims and Indemnification Claims were severed from the Photo Claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Video Counterclaims and Indemnification Claims should be tried with the Photo Claims or severed under Rule 21 | NJMG (joining Third Party Defs.) argued severance warranted because the counterclaims/indemnity claims arise from different facts, involve different parties, and discovery for them had not occurred | Fox News argued claims are related as all involve alleged unauthorized uses of copyrighted media and share legal issues under the Copyright Act, so a single trial promotes efficiency | Severance granted: claims are factually distinct with minimal overlap; judicial efficiencies insufficient to overcome prejudice and readiness disparities |
| Whether the claims arise from same transaction or occurrence | NJMG: different works, different media, different incidents; not the same transaction | Fox: all claims involve one media company allegedly using another's copyrighted content without permission; legal framework common | Court: not same transaction—isolated incidents require separate analyses; favors severance |
| Whether there are common questions of law or fact sufficient to deny severance | NJMG: legal overlap (copyright law) is insufficient because factual bases differ | Fox: common legal issues (fair use, commerciality) and some overlapping factual questions about NJMG’s site management | Court: legal issues overlap but factual predicates differ materially; favors severance |
| Whether severance would prejudice parties or hurt judicial economy | NJMG/Third Party Defs.: joinder would prejudice third parties forced into expedited discovery and trial; severance may facilitate settlement and fairness | Fox: severance causes inefficiency, duplicate trials, and extra expense for Fox; cautionary jury instructions can mitigate prejudice | Court: concerns of prejudice to Third Party Defs. and trial-readiness disparity outweigh marginal efficiencies; favors severance |
Key Cases Cited
- Oram v. SoulCycle LLC, 979 F. Supp. 2d 498 (S.D.N.Y. 2013) (discussing Rule 21 severance standards and factors)
- Agnesini v. Doctor's Assoc., Inc., 275 F.R.D. 456 (S.D.N.Y. 2011) (severance burden and relatedness of claims)
- Cia. Embotelladora del Pacifico v. Pepsi Cola Co., 256 F.R.D. 131 (S.D.N.Y. 2009) (joinder strongly encouraged; courts have discretion to sever)
- United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966) (proximity of claims and joinder principles)
- Costello v. Home Depot U.S.A., Inc., 888 F. Supp. 2d 258 (D. Conn. 2012) (claims under same statute may be severable where facts differ)
- Ricciuti v. New York City Transit Auth., 796 F. Supp. 84 (S.D.N.Y. 1992) (convenience and prejudice justify severance)
- Spencer, White & Prentis, Inc. v. Pfizer, Inc., 498 F.2d 358 (2d Cir. 1974) (counterclaims based on different factual situations may be severable)