OPINION AND ORDER
New Jersey Media Group (“Plaintiff’ or “NJMG”) brought two actions, subsequently consolidated for trial, against Fox News Network, LLC (“Defendant” or “Fox News”) alleging that Fox News infringed on Plaintiffs copyright in its now iconic photograph of three firefighters raising the American flag at the ruins of the World Trade Center on September 11, 2001 (the “9/11 Photograph”) (the “Photo Claims”). Fox News later brought counterclaims against Plaintiff alleging copyright infringement and false endorsement claims for displaying on its website three short news video clips owned by Defendant and bearing the Defendant’s brand name (the “Video Counterclaims”). The video clips are unrelated to the 9/11 Photograph or each other. Plaintiff in turn filed a Third Party Complaint against the Daily Caller, Inc. (the “Daily Caller”) and News Distribution Network, Inc. (“NDN,” and collectively “Third Party Defendants”) seeking indemnification for Fox News’ copyright and trademark claims against it (the “Indemnification Claims”). Before this Court is Third Party Defendants’ motion, joined by Plaintiff, to sever the Video Counterclaims and the Indemnification Claims from the Photo Claims pursuant to Rule 21 of the Federal Rules of Civil Procedure. For the reasons discussed below, the motion to sever the Video Counterclaims and the Indemnification Claims is GRANTED.
I. Background
Plaintiff filed two related actions against Fox News under the Copyright Act, 17 U.S.C. § 101, alleging that Defendant infringed on the 9/11 Photograph. In the first action, brought on October 9, 2013, Plaintiff alleges that Jeanine Pirro
For reasons not relevant here, it was not until June 11, 2015 that Fox News filed its Answer in the Baier Action. Doc. 22. Fox News also asserted counterclaims against Plaintiff under the Copyright Act, 17 U.S.C. § 101, for copyright infringement, and the Lanham Act, 15 U.S.C. § 1125(a), for false endorsement, for displaying three short news video clips on its website owned by Defendant and bearing Defendant’s brand names and featuring Fox News personalities. Id. The three video clips were of (1) a panel discussion entitled “Winners and Losers” originally broadcast on Fox News’ Special Report with Bret Baier, (2) an interview with New Jersey Governor Chris Christie on Fox News Sunday conducted by Chris Wallace, and (3) a public address by President Obama on November 5, 2014. Id. ¶¶ 13-17. At the time of the alleged infringement, the video clips were hosted by Third Party Defendant NDN and made available on Plaintiffs website allegedly without Fox News’ permission. Id. ¶ 23; see also Doc. 23 at ¶¶ 14,16; Doc. 52 at ¶ 14; Doe. 53 at ¶ 14. According to Fox News, a thirty-second advertisement promoting a third-party company played when a user attempted to watch the video clips. Doc. 22 at ¶¶ 22,31, 36.
At a conference held on June 25, 2015, this Court consolidated the Fox News Action and the Baier Action for trial and scheduled the trial for January 11, 2016. Hr’g Tr. 2:22-3:2. The parties agreed to wait until the close of discovery, scheduled for October 30, 2015, to decide whether the Video Counterclaims would be included in the January 2016 trial. Id. at 6:14-22,17:17-18:2.
On July 2, 2015, Plaintiff filed its Answer to Fox News’ Counterclaims and also filed a Third Party Complaint seeking indemnification for Fox News’ counterclaims from NDN and the Daily Caller. Doe. 23. According to Plaintiff, it had the right to provide access to the three video clips pursuant to a contract it entered with NDN on March 22, 2011. Id. ¶¶ 7-9, 17. Under that contract, NDN agreed to provide Plaintiff access to content for use on Plaintiffs website, warranted that the content provided did not infringe on any third party’s rights, and agreed to fully indemnify Plaintiff if it did. Id. ¶8. Plaintiff further contends that the Daily Caller in turn provided access to the three video clips to NDN as part of a contract between j;he Daily Caller and NDN whereby the Daily Caller represented and warranted that the content it provided would not infringe on any third party’s rights, and agreed to indemnify NDN and the entities NDN distributed content to for any breach of these representations and warranties. Id. ¶¶ 10-12,14.
On August 24, 2015, the Court scheduled a pre-motion conference regarding Third Party Defendants’ proposed motion to sever and granted their request to stay discovery in connection with the Video Counterclaims and the Indemnification Claims pending the conference. Doc. 39. At the pre-motion conference held on September 4, 2015, the Court granted Third Party Defendants leave to file the instant motion and continued the stay of discovery. Hr’g Tr. 28:8-10,31:20.
II. Discussion
Rule 21 of the Federal Rules of Civil Procedure provides that “[o]n motion or on its own, the court may at any time, on just terms, add or drop a party. The court may
In deciding whether to sever a claim under Rule 21, courts consider: “(1) whether the claims arise out of the same transaction or occurrence; (2) whether the claims present some common questions of law or fact; (3) whether settlement of the claims or judicial economy would be facilitated; (4) whether prejudice would be avoided if severance were granted; and (5) whether different witnesses and documentary proof are required for the separate claims.” Oram,
A. Arise Out of the Same Transaction or Occurrence
While “[t]here is no rigid rule as to what constitutes the same series of transactions or occurrences,” courts “repeatedly have interpreted the phrase ‘same transaction’ to encompass ‘all logically related claims.’ ” Agnesini,
B. Some Common Questions of Law or Fact
There is no dispute that while the Photo Claims and Video Counterclaims involve common issues of law arising under the Copyright Act, the claims are based on completely different facts: different copyrighted works, created on different media, infringed upon at different times, by different parties, within different media channels. See Baier Compl. ¶¶12-18; Fox News Am. Compl. ¶¶ 13-18; Baier Answer & Counterclaims ¶¶ 39-55, Aff. Defs. 2, 3; Baier Answer to the Third Party Complaint ¶¶ 11-14. Courts have severed claims under similar circumstances, where the statutory basis of the claims are the same but the facts underlying those claims are different. See S.E.C. v. Pignatiello, No. 97 Civ. 9303 (SWK),
Moreover, Fox News is also asserting claims under the Lanham Act that are not raised in connection with the Photo Claims and have no relationship, factually or legally, to the Photo Claims. Answer & Counterclaims ¶¶ 56-73. NDN and the Daily Caller also had no involvement in the events underlying the Photo Claims; their involvement is limited to the Video Counterclaims and the Indemnification Claims.
Fox News contends that at least two common questions of fact are presented by the claims: (1) whether the secondary uses of the 9/11 Photograph by Fox News and the video clips by Plaintiff were “commercial,” and (2) the extent to which NJMG manages its online content. Def.’s Opp’n Mem. at 16. However, the analysis required to answer these questions in the context of the Photo Claims and Video Counterclaims is different. The first issue, the different nature of the infringing uses — posting the 9/11 Photograph on the Facebook pages of two Fox News personalities versus posting video clips on Plaintiffs website — raises distinct questions with regard to whether these uses are properly considered commercial, For example, Fox News alleges that third party advertisements preceded the video clips while NJMG makes no allegations regarding third party advertising in the Photo Claims. The second issue— how Plaintiff manages its online content— also requires an analysis of a different set of facts. Fox News contends that NJMG’s failure to enforce its copyright in the 9/11 Photograph or to use any “meaningful rights-management technology” to protect its copyright is relevant to the Photo Claims, while separately arguing that how Plaintiff selects content for use on its website and how it polices its website for infringing content is relevant to the Video Counterclaims. Id. While the legal concepts at issue may overlap, the relevant facts do not.
C. Overlap of Witnesses and Documentary Proof
Fox News expressly acknowledged the lack of documentary overlap between the claims at a hearing held before this Court on June 25, 2015. In response to the Court’s inquiry regarding when discovery could be completed in the Fox News and Baler Actions, Defendant stated that
There’s going to be considerable overlap between [Fox News] and Baier, but it’s not complete, and certainly the counterclaims have almost no overlap .... And we also haven’t taken any discovery at all about the counterclaims, which have nothing to do with what Mr, Dunnegan has produced previously [in the Fox News Action].”
Hr’g Tr. 12:25-13:9, 15:23-25 (emphasis added). Accordingly, the overlap of documentary proof between the Photo Claims and the Video Counterclaim is, at most, minimal.
With regards to witness overlap, Fox News identifies five witnesses, three from Fox News and two from NJMG, that it contends will need to testify in connection with both the Photo Claims and the Video Counterclaims. Defs.’ Opp’n Mem. at 6, 17-18. However, there is only limited substantive
While “[njearly every trial involving multiple defendants will involve some separate issues of fact that call for testimony from different witnesses on entirely unrelated matters[, t]he more appropriate question ... is whether separate trials will require substantial overlap of witnesses or documentary proof.” Lewis,
D. Facilitates Settlement or Judicial Economy
Third Party Defendants contend that severance will facilitate settlement thereby preserving judicial resources. See Third Party Defs.’ Mem. at 10. The Court, however, is unconvinced. Prior to the Third Party Defendants entry into this action, Fox News and NJMG reached a preliminary settlement that ultimately was not finalized. Docs. 15, 16, 87, 88. Moreover, while Third Party Defendants assert the potential for settlement, they make no representations to support this assertion and include as an affirmative defense to the Indemnification Claim Plaintiffs alleged lacked of cooperation. See Answer to Third Party Compl. ¶¶ 4, 5. There is thus nothing in the procedural history of this matter or the litigation strategies employed by the parties to suggest that severance will hasten settlement.
Notwithstanding the potential settlement of the claims, whether judicial economy is best served by severing the claims turns on whether the Court believes that having one trial encompassing all claims will be more efficient than having separate trials. While one trial is usually more efficient than two, see Lewis,
Fox News claims judicial economy would be advanced by a single trial and highlights that the only party that would not have to endure two trials if the claims were severed would be Third Party Defendants. Def.’s
Moreover, the trial of the Photo Claims was scheduled even before the Third Party Complaint was filed. Thus, in accordance with the Court’s previously entered schedule, discovery in the Photo Claims is essentially complete and the claims are ready for trial. Discovery on the Video Counterclaims or the Indemnification Claims, on the other hand, have not yet even begun. See Katsaros v. Cody,
E. Avoids Prejudice
“Severance is appropriate where a joint trial could lead to confusion of the jury.” Costello,
However, Third Party Defendants were not a party to this action until July 2, 2015 and are rightfully concerned about the costs they may incur by being forced to engage in expedited discovery while preparing for a fast-approaching trial that includes claims they have nothing to do with. See Wausau Bus. Ins. Co. v. Turner Const. Co.,
III. Conclusion
Accordingly, the Court finds that all five factors favor severing the Video Counterclaims and the Indemnification Claims from the Photo Claims. For the foregoing reasons, Third Party Defendants’ motion to sever is GRANTED. The Clerk of the Court is respectfully directed to terminate the motions, Docs. 44 and 74.
IT IS SO ORDERED.
Notes
. Ms. Pirro was dismissed from the Fox News Action on September 28, 2015. See Doc. 105.
. This photograph, taken by Joe Rosenthal, is entitled Raising the Flag on Iwo Jima.
. The image used on the Faeebook page associated with Fox News’ television program Special Report with Bret Baier does not contain the juxtaposed image of the Iwo Jima photograph and the 9/11 Photograph at issue in the Fox News Action,
. As an initial matter, Fox News questions whether Third Party Defendants have standing to bring a motion to sever the Video Counterclaims, which they are not a party to. Def.’s Opp'n Mem. at 9. Third Party Defendants rely on Federal Rule of Civil Procedure 14(a)(2)(C) as the basis for their ability to make the motion, which states that " 'third-party defendant' ... may assert against the plaintiff any defense that the third-party plaintiff has to the plaintiff's claim[.]" See Third Party Defs.’ Mem. at 6 n.5; see also 6 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1457 (3d ed.) ("Since the third-party defendant cannot relitigate the question of defendant's liability to plaintiff, this provision prevents any prejudice that might result from the third-party plaintiff’s failure to assert a particular defense against plaintiff.” (citations omitted)). Notwithstanding whether Rule 14 allows Third Party Defendants to make their motion under these circumstances, Plaintiff NJMG, who is a party to the Video Counterclaims, joins the motion to sever. See Declaration of William Dunnegan ("Dunnegan Decl.”). Pursuant to Rule 21, this Court may also sever claims sua sponte, and for the reasons set forth below, concludes that severance is warranted on the facts of this case. Fed. R. Civ. Pro. 21 ("On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any claim against a party.”); see also Esposito v. Ocean Harbor Cas. Ins. Co., No. 13 Civ. 7073 (SJF),
. Courts consider the same factors when evaluating whether to order separate trials of separate issues or claims under Federal Rule of Civil Procedure 42(b). See Crown Cork & Seal Co., Inc. Master Retirement Trust v. Credit Suisse First Boston Corp.,
. Fox News' reliance on Agnesini,
. Fox News identifies two of Plaintiff's employees who will provide testimony regarding both the Photo Claims and the Video Counterclaims, but the substance of their testimony does not overlap between the claims. See id. at 17 (Jennifer Borg, Plaintiff’s Vice President and General Counsel, and Amre Youssef, Plaintiff’s Director of Content Syndications and Archives, will testify about NJMG’s licensing practices regarding the 9/11 Photograph at issue in the Photo Claims and, separately, will testify about NJMG's relationship with and practice of syndicating content through NDN with regard to the Video Counterclaims). The topic of two other witnesses’ testimony identified by Fox News will have some relevance to the fair use defense raised in both claims as it will presumably address how Fox News generally earns revenue, but the specific topics of their testimony — that Fox News generated no revenue from the 9/11 Photograph posted on Facebook but lost advertising revenue from the video clips being posted on NJMG’s website — does not overlap. See id. at 17-18 (testimony of Zachary Friedman, Defendant’s Vice President of Digital Ad Sales, and Dominic Rossi, Defendant’s Vice President of Eastern Sales for Television). Fox News, however, does identify one witness whose testimony is relevant to both the Photo Claims and the Video Counterclaims. See id. at 18 (Diana Brandi, Fox News’ Executive Vice President of Business and Legal Affairs, will testify regarding Defendant’s licensing practices and how Defendant decides to license content, which is directly relevant to the Photo Claims and to Third Party Defendants' fair use defense raised against the Video Counterclaims).
