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Gregory P. Stone (State Bar No. 078329) MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, 35th Floor Los Angeles, California 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 Email: [email protected] Burton A. Gross (State Bar No. 166285) Carolyn Hoecker Luedtke (State Bar No. 207976) MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, California 94105 Telephone: (415) 512-4000 Facsimile: (415) 512-4077 Email: [email protected]; [email protected] Attorneys for RAMBUS INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

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RAMBUS INC., Plaintiff,

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CASE NO.: C 05-00334 RMW

vs. HYNIX SEMICONDUCTOR INC., et al.,

RAMBUS’S OPPOSITION TO SAMSUNG’S MOTION TO DISMISS CERTAIN CLAIMS AND DEFENSES WITHOUT PREJUDICE

Defendants.

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Date: September 5, 2008 Time: 9:00 a.m.

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RAMBUS INC., Plaintiff/Counter-Defendant

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CASE NO.: C-05-02298 RMW

vs.

24 SAMSUNG ELECTRONICS CO., LTD., et al. 25 Defendants/Counter-Plaintiffs 26 27 28 Rambus Inc’s Opposition to Samsung’s Motion to Dismiss Without Prejudice Case Nos. 05-02298 RMW & 05-00334 RMW

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Page I. II. III.

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TABLE OF CONTENTS

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IV.

INTRODUCTION .............................................................................................................. 1 BACKGROUND ................................................................................................................ 2 ARGUMENT ...................................................................................................................... 5 A. Samsung Made A Binding Commitment To Try Its JEDEC-Related Counterclaims and Defenses In This Court With Its Other “Samsung-Unique” Allegations.................................... 5 B. Rambus Would Be Prejudiced By Being Forced To Start Over On Samsung’s Partially-Adjudicated JEDEC Claims and Affirmative Defenses .............................................................. 6 C. Samsung Cannot Dismiss A Portion of Its Counterclaims and Affirmative Defenses Under Rule 41(a) .......................................................... 8 D. Samsung’s Motion Impermissibly Splits Its Section 17200 Counterclaim .......... 10 CONCLUSION ................................................................................................................. 12

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TABLE OF AUTHORITIES

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Page

3 FEDERAL CASES 4 5 6 7 8 9 10 11 12 13 14 15

American States Ins. Co. v. Dastar Corp., 318 F.3d 881 (9th Cir. 2003)................................................................................................... 10 AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946 (9th Cir. 2006)..................................................................................................... 7 Davis v. Wakelee, 156 U.S. 680 (1895) .................................................................................................................. 6 Ethridge v. Harbor House Restaurant, 861 F.2d 1389 (9th Cir. 1988)................................................................................................... 8 Gronholz v. Sears, Roebuck and Co., 836 F.2d 515 (Fed. Cir. 1987)................................................................................................... 9 Jackson v. Bank of Hawaii, 902 F.2d 1385 (9th Cir. 1990)................................................................................................... 7 New Hampshire v. Maine, 532 U.S. 742 (2001) .................................................................................................................. 6 Rambus, Inc. v. Hynix Semiconductor, Inc., No. 5:05-cv-00334-RMW ......................................................................................................... 8 State Treasurer of the State of Michigan v. Barry, 168 F.3d 8 (11th Cir. 1999)..................................................................................................... 10

16 STATE CASES 17 18 19 20

Mycogen Corp. v. Monsanto Co., 51 P.3d 297 (Cal. 2002) .......................................................................................................... 11 People v. Damon, 51 Cal.App.4th 958 (Ct. App. 1996)....................................................................................... 11 Wulfjen v. Dolton, 24 Cal.2d 891 (1944) .............................................................................................................. 11

21 22 FEDERAL STATUTES 23 24

United States Code Title 28 Section 1927 .............................................................................................................. 13

25 FEDERAL RULES 26 27

Federal Rules of Civil Procedure Rule 15 ............................................................................................................................ 7, 9, 10 Rule 15(a).................................................................................................................................. 9

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TABLE OF AUTHORITIES (continued) Page Federal Rules of Civil Procedure Rule 41 ...................................................................................................................... 2, 7, 10, 11 Rule 41(a).......................................................................................................................... 7, 8, 9 Rule 41(a)(1)(i) ......................................................................................................................... 9 Rule 41(a)(2) ............................................................................................................................. 7

6 OTHER AUTHORITIES 7 8 9

9 Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE & PROCEDURE § 2364 (3d ed. 2008) ................................................................................................................. 7 5 J. Moore, J. Lucas & J. Wicker, MOORE’S FEDERAL PRACTICE § 41.06-1 (1987)....................................................................................................................... 9

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I.

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INTRODUCTION Trial of Samsung’s 17200 counterclaim, its counterclaim for declaratory judgment of

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unenforceability, and various related defenses began in January of this year. Seven and one-half

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weeks of testimony and evidence have now been presented to this Court and are part of the record

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on which Samsung’s claims and defenses will be decided. All that remains is a very short trial to

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supplement the record with Samsung-unique evidence. Now, on the eve of that supplemental

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trial, Samsung has filed an extraordinary motion to dismiss without prejudice a host of claims and

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defenses, including the claims for which all this testimony and evidence has already been taken.

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Why? So that Samsung can have a “do-over.” Samsung wants to run from this Court and the

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evidence already presented to this Court and pursue these claims instead in San Francisco

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Superior Court.

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Specifically, Samsung wants to withdraw without prejudice its 17200 counterclaim and

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various defenses founded on its allegations related to Rambus’s conduct at JEDEC, Samsung’s

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RDRAM license negotiations, and conduct of Neil Steinberg, as well as the portion of its Section

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17200 claim based on Rambus’s alleged spoliation. Apparently unhappy with the direction its

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case has taken, Samsung suddenly wants to forego the comprehensive, individualized trial that it

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demanded nine months ago, abandon all the work that went into the seven and one-half weeks of

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trial, and start over again – and require Rambus to start over again – so that Samsung can present

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its allegations to a different judge, or to a jury, in a different forum. Samsung’s motion should be

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denied, and Samsung should be ordered to provide its now-overdue pretrial disclosures by the end

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of the day, on September 5, 2008, or, alternatively, Samsung’s claims and defenses should be

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dismissed with prejudice so that they may not be relitigated in some other forum.

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Samsung’s motion should be denied for at least four different reasons. First, Samsung

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made a binding commitment to this Court, and to Rambus, to try its JEDEC-related claims and

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defenses, together with its other “Samsung-unique” counterclaims, in this Court. Only on that

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condition was it permitted to not participate directly in the January 2008 Trial. Second, it would

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be unfair and prejudicial to Rambus, which has already spent two months trying these issues in

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Francisco Superior Court. Third, Samsung’s motion is procedurally improper because Rule 41

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does not allow for dismissal without prejudice of some, but not all, of a party’s claims. Fourth,

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Samsung’s motion impermissibly seeks to split causes of action, dividing the Section 17200

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counterclaim into bits and pieces for resolution in different lawsuits, contrary to controlling

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California law. In short, Samsung’s motion is prejudicial to Rambus, is procedurally improper,

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and contradicts its prior representations to this Court. Its request to hold certain claims and

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defenses in abeyance should be summarily rejected.

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II.

BACKGROUND

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In November 2007, Samsung asked to be excused from the coordinated January 2008

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Trial. It urged, among other things, that it would be prejudiced unless all of its evidence and

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arguments could be considered together, by a single judge, in a single trial. Samsung argued:

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It is inefficient and unfair to divide the evidentiary presentation on Samsung’s claims between two trials, months apart, when Samsung’s claims are based on a relationship and course of conduct unique to Samsung and Rambus, including, but not limited to, the 1994 RDRAM license, the 1997 amendment to the RDRAM license, Rambus’s hiring of Samsung employees, Rambus’s concealing of plans to sue its “partner” Samsung until Samsung’s RDRAM commitment was past the point of no return, the 2000 SDRAM/DDR license, the 2001 amendment to the SDR/DDR license, the 2004-2005 renewal negotiations of the SDRAM/DDR license, and Samsung’s Most Favored Licensee rights under the SDRAM/DDR license. This fact pattern is best presented and understood in a single trial that permits review of the entire relationship and facts as a whole.

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Declaration of Carolyn Hoecker Luedtke In Support of Rambus’s Opposition to Samsung’s

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Motion to Dismiss Certain Claims and Defenses Without Prejudice (hereinafter “Luedtke Decl.”),

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Exh. A at 2 (Letter from David Healey to the Court, November 2, 2007) (emphasis added);

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Luedtke Decl. Exh. B at 4:18-27 (Samsung’s Motion for Administrative Relief to Set a Case

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Management Conference) (same). In argument before this Court, Samsung repeated the refrain

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that breaking up its counterclaims and defenses made it hard to tell a coherent story and was

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unfairly prejudicial. See Luedtke Decl. Exh. E (December 13, 2007 Hearing Transcript at 71)

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(“And having us break up our story and tuck in bits and pieces here and not tell it coherently is

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very prejudicial.”); id. at 49-50 (arguing for severance and agreeing to be bound by the joint -2-

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proceedings because “if you break that up among different judges, that’s a problem”).

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In response, Rambus objected to Samsung’s request to be excused from participating in

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the coordinated January 2008 Trial, arguing that it would be inefficient to try the Manufacturers’

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overlapping claims in multiple proceedings and anticipating the tactical ploy that Samsung is

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attempting now. Nine months ago, Rambus noted that Samsung had the same Section 17200

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claim, with the same JEDEC-related allegations, as a counterclaim in the San Francisco Superior

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Court action and warned: “Samsung’s JEDEC-based unfair competition claim should not be

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delayed, creating the risk that Samsung could try to pursue duplicative litigation in multiple

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courts in subsequent repetitive proceedings.” Luedtke Decl. Exh. C at 11 (Rambus’s Opp. to

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Samsung’s Mot. for Admin. Relief to Set A Case Management Conf.).

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The Court allowed Samsung to forego participating directly in the coordinated

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presentation of evidence on the Manufacturers’ allegations related to JEDEC and RDRAM

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license nondisclosure, but only on certain conditions. At the Case Management Conference on

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December 14, 2007, the Court stated:

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But with respect to how the trial should proceed, my thought is that the Hynix, Micron and Nanya trial should proceed as scheduled and that Samsung be severed, this being on the following conditions: . . . that Samsung agree to be bound by the result on the prosecution laches aspect of the consolidated trial; that Samsung agree that it will not claim collateral estoppel with respect to any factual finding from the consolidated [case]; and that the trial – well, the trial of the remaining issues as to Samsung be presented, be tried by the Court within six months of the result of the Hynix and Nanya and Micron consolidated trial; and that Samsung agree to the admissibility of any relevant evidence from the consolidated trial . . ..

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Luedtke Decl. Exh. F (December 14, 2007 Hearing Transcript at 6) (emphasis added). Samsung 22 accepted these conditions. Its counsel unequivocally stated: “Samsung agrees to the conditions 23 the Court has outlined for severance and asks to be excused from the remainder of the hearing.” 24

Id. at 9. 1

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Indeed, even before that hearing, Samsung had recommended that its subsequent, Samsungspecific proceedings be merely a continuation of the coordinated January 2008 Trial, and that it could be bound by those proceedings in certain important ways. See, e.g., Luedtke Decl. Exh. A at 3 (November 2, 2007 Letter from David Healey to the Court at 2) (“Samsung can, in a later trial, avoid duplication of some significant part of the January 2008 Trial and rely on the transcript for certain third-party evidence on its non-jury claims.”); Luedtke Decl. Exh. D at 2 -3-

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Citing this very commitment by Samsung’s counsel, on May 7, 2008, the Court affirmed

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and repeated these conditions in a written order “to minimize later confusion in the event that a

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dispute arises.” Luedtke Decl. Ex. G at 3-4 (Superseding Order Regarding Procedural Schedule

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and Related Matters for September 22, 2008 Trial, Docket No. 1712 (hereinafter the “May 7,

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2008 Order”)) (explaining further that the court “granted Samsung’s request to be severed from

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the consolidated conduct trial on a variety of conditions,” including agreeing to try the remaining

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issues “within six months of the result of the consolidated conduct trial” and “to the admissibility

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of any relevant evidence from the consolidated conduct trial” (emphasis added)).

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For the last nine months, Samsung provided no indication to the Court or to Rambus that

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it would not abide by this agreement codified in the May 7, 2008 Order. Indeed, it gave no hint

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whatsoever that it intended to drop its claims and defenses based on allegations regarding JEDEC,

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RDRAM license negotiations, and Neil Steinberg’s conduct so that it could pursue them instead

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in state court. To the contrary, following the August 11, 2008 summary judgment order,

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Samsung and Rambus conducted extensive negotiations over a stipulation that would dismiss

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with prejudice the claims and defenses that are the subject of Samsung’s motion, subject only to

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an appeal by Samsung from the August 11, 2008 Order. See Luedtke Decl. ¶ 2. Throughout

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those negotiations, Rambus’s counsel made it clear that the claims and defenses could not be

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pursued in any other forum, including the San Francisco Superior Court action. See id. ¶ 3.

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Indeed, on August 25, 2008, Samsung’s counsel sent Rambus’s counsel a proposed draft of the

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stipulation that dismissed the claims and defenses with prejudice, and included an explicit

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agreement not to pursue them in the San Francisco Superior Court case. See id. Based on what

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appeared to be an imminent stipulation to dismiss with prejudice all claims and defenses founded

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on Samsung’s JEDEC, RDRAM license negotiations, and Steinberg allegations, the parties

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agreed that pretrial disclosures related to those allegations – otherwise due on August 27, 2008

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pursuant to the Court’s August 22, 2008 scheduling order – should be deferred a few days and

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due instead on September 2, 2008, in the event that a stipulation of dismissal was not finalized

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(December 10, 2007 Letter from David Healey to the Court) (same). -4-

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before then. Id. at ¶ 4. The parties’ agreement to this effect is codified in the Joint Pretrial

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Statement, filed August 27, 2008, at page 2. Id. However, on Friday afternoon, August 29, 2008,

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Samsung announced that it had “revisited” the stipulation and now required the dismissal without

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prejudice and that Rambus agree that the claims and defenses could be pursued in other

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jurisdictions. Id. at ¶ 5. Rambus would not agree to these conditions, and negotiations ended. Id.

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On September 2, 2008, the agreed-upon due date for the pretrial disclosures relating to

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Samsung’s JEDEC, RDRAM license negotiations, and Steinberg allegations, Rambus provided

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its supplemental disclosures as required. Id. at ¶ 5. Samsung, by contrast, disregarded the

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deadline and failed to disclose any exhibits, witnesses, or deposition designations whatsoever.

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See Supplemental Joint Pretrial Statement, filed September 2, 2008.

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Now, in an eleventh-hour motion, Samsung seeks to escape from the ongoing trial of its

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claims and defenses related to JEDEC, RDRAM license negotiations, and Neil Steinberg and to

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try these claims and defenses elsewhere. Further, Samsung has demanded that Rambus respond

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to this motion within 48 hours and that the Court hear argument the morning after that, all in the

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middle of a very busy pretrial preparation period.

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III.

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ARGUMENT A.

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Samsung Made A Binding Commitment To Try Its JEDEC-Related Counterclaims and Defenses In This Court With Its Other “SamsungUnique” Allegations

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Samsung was excused from attending the January 2008 Trial based on its agreement that

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(a) it would complete the adjudication of its claims and defenses within six months before this

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Court and (b) it would agree to the admissibility of all evidence admitted in the coordinated

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portion of the trial. Luedtke Decl. Exh. F at 9 (December 14, 2007 Hearing Transcript); Luedtke

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Decl. Exh. G at 3-4 (May 7, 2008 Order). Now, having watched the coordinated January 2008

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Trial unfold, Samsung has changed its tune and seeks to get out of its binding agreement with this

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Court. Samsung should be held to its agreement.

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In striking contrast to the position it took last November, Samsung now no longer believes

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that its claims and evidence are “best presented and understood in a single trial that permits

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review of the entire relationship and facts as a whole.” Luedtke Decl. Exh. A at 2 (November 2, -5-

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2007 Letter from David Healey to the Court); Luedtke Decl. Exh. B at 4:18-27 (Samsung’s

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Motion for Administrative Relief to Set A Case Management Conference). Instead, it now

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contends that the case will be “brought to conclusion faster and more effectively” if certain claims

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are tried piecemeal by this Court and “other claims [are] cut out for resolution by the State

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Court.” Motion at 3. But, having invoked one argument to escape participation in the

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coordinated January 2008 Trial, Samsung cannot now take a diametrically opposed position to

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again avoid resolution of its claims and defenses. See New Hampshire v. Maine, 532 U.S. 742,

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742-743 (2001) (“[W]here a party assumes a certain position in a legal proceeding, and succeeds

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in maintaining that position, he may not thereafter, simply because his interests have changed,

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assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in

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the position formerly taken by him.” (quoting Davis v. Wakelee, 156 U.S. 680, 689 (1895)).

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Samsung should be held to its agreement.

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Samsung’s about-face is an unabashed attempt to manipulate the judicial process and is a

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direct violation of the Court’s May 7, 2008 Order. The Court should require Samsung to pursue

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its claims and defenses based on JEDEC, RDRAM license negotiations, and Neil Steinberg in this

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forum, or in no forum at all.

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B.

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Rambus Would Be Prejudiced By Being Forced To Start Over On Samsung’s Partially-Adjudicated JEDEC Claims and Affirmative Defenses.

Samsung’s request to be relieved of its obligations under the Court’s May 7, 2008 Order 19 would cause serious prejudice to Rambus. Pursuant to Samsung’s agreement, seven and one-half 20 weeks of evidence has already been presented to this Court on Samsung’s JEDEC-based claims 21 and defenses. Now, on the eve of the trial that will complete that presentation of evidence, 22 Samsung improperly seeks to unravel its promises to be bound by that evidentiary record and 23 instead seeks to force Rambus to start over and present the entire complex, burdensome, and 24

expensive January 2008 trial anew in San Francisco Superior Court. 2 Samsung’s request clearly

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Were Samsung to offer to “transport the record” of the January 2008 Trial to the San Francisco Superior Court, the prejudice would remain. That Court or the jury would need to read the record. Counsel would need to explain it. Witnesses who this Court has seen live, and thus been able to judge their credibility, would not be seen by the Superior Court judge or jury. Exhibits would not have been displayed during testimony, and explained. The result would be that many witnesses would need to be recalled, the same evidence repeated in large part, and some of the -6-

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would create prejudice to Rambus and should thus be denied. The critical inquiry for evaluating Samsung’s motion is whether Rambus is prejudiced by

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the withdrawal of certain claims and defenses without prejudice. 3 “Prejudice to the opposing

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party is the most important factor” for a court to consider in reviewing a party’s request to

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withdraw a claim or defense. See Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir.

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1990). A party is not permitted to withdraw a claim or defense where doing so “prejudices the

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opposing party” or “produces an undue delay in litigation,” or when the motion “is sought in bad

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faith.” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006). In

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AmerisourceBergen, the Ninth Circuit upheld the trial court’s decision to disallow an amendment

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to the pleadings where, after eighteen months of delay, the request suggested “gamesmanship” in

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connection with related litigation, and where amendment “would have unfairly imposed

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potentially high, additional litigation costs.” Id. at 953.

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It cannot be disputed that Samsung’s motion threatens enormous prejudice to Rambus. At

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the coordinated January 2008 Trial, Rambus litigated and tried, and this Court considered and

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resolved, countless evidentiary and legal issues. The coordinated January 2008 Trial lasted nearly

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eight weeks. It involved, and the Court resolved, approximately 20 motions in limine filed by the

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Manufacturers, and almost as many filed by Rambus. It included the presentation of live

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testimony from 28 witnesses and the presentation of deposition or prior trial testimony for more

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than 20 witnesses. The Court heard, considered, and evaluated the testimony of these 48

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witnesses. It entailed the presentation and admission of 294 exhibits, as well as the introduction

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and consideration of even more that were not admitted. It included briefing, argument, and

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evidence would simply be lost because of unavailability of witnesses to again testify live. 3 As explained in greater detail below, see Section II.C, Samsung has filed its motion as a “motion to dismiss certain claims” under Rule 41(a). This is procedurally improper because the motion attempts to eliminate only some portion, but not all, of Samsung’s counterclaims and defenses, which is not allowed under Rule 41. However, under both Rule 41 and a motion to amend its pleadings under Rule 15, the critical inquiry focuses on prejudice. Compare 9 Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE & PROCEDURE § 2364, at 496 (3d ed. 2008) (“It is the possibility of prejudice to the defendant, rather than the convenience of the court, that is to be considered in deciding a motion for dismissal under Rule 41(a)(2).”), with 6 Wright & Miller § 1487, at 613 (“Perhaps the most important factor listed by the [Supreme] Court and the most frequent reason for denying leave to amend is that the opposing party will be prejudiced if the movant is permitted to alter his pleading.”).

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resolution of countless legal issues, including numerous trial briefs and motions during trial and

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extensive post-trial proceedings on the very issues that Samsung now seeks to withdraw from this

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Court’s consideration. See, e.g., Rambus, Inc. v. Hynix Semiconductor, Inc., No. 5:05-cv-00334-

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RMW, Docket No. 1984 (filed July 24, 2008) (Order Denying Manufacturers’ Motion for New

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Trial).

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The coordinated January 2008 Trial was conducted at great cost to Rambus. Samsung’s

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motion, which seeks to evade the May 7, 2008 Order, would have the effect of imposing these

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enormous expenses on Rambus a second time. Now is the time, with the finish line in sight, to

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complete the litigation of these issues in this Court. It is not the time to start all over again in

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state court. Samsung does not contend – how could it? – that Rambus will not be prejudiced. Instead,

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Samsung seeks to justify its last-minute attempt to withdraw these partially adjudicated claims

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because of “the reduction in time allotted for trial” under this Court’s August 11, 2008, summary

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judgment order dismissing Samsung’s Counts IV through VI and part of Count VII. Motion at 1.

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This rationale finds no basis in the Court’s Order, which merely suggested that “[i]t would appear

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that twelve hours per side should suffice,” and then indicates that, presumably after input from

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both sides at the pretrial conference, it will “finalize the time allocation prior to the start of trial.”

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Luedtke Decl. Exh. H at 14 (August 11, 2008 Order). Moreover, the reduction in time was the

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Court’s estimate of what could be appropriate given the dismissal of the counterclaims based on

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Mr. Steinberg. It had nothing to do with Samsung’s JEDEC-based claims and defenses or the

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time required to present those. Samsung’s reliance on the Court’s statements about the

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adjustment of time is a fig leaf. This motion is not about whether Samsung has 12 hours or 20

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hours to present its case; it is about whether Samsung can get out of the bargain it made with the

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Court and with Rambus last November.

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C.

Samsung Cannot Dismiss A Portion of Its Counterclaims and Affirmative Defenses Under Rule 41(a).

Samsung brings its “motion to dismiss certain claims without prejudice” pursuant to Federal Rule of Civil Procedure 41(a). See Motion at 1:19. This rule, however, permits -8-

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voluntary dismissal only when a cross-claimant dismisses all of its claims, not just some of them.

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See Ethridge v. Harbor House Restaurant, 861 F.2d 1389, 1392 (9th Cir. 1988) (“[W]e agree

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with those courts that have held a plaintiff may not use Rule 41(a)(1)(i) to dismiss, unilaterally, a

4

single claim from a multi-claim complaint. . . . Federal Rule of Civil Procedure 15(a) is the

5

appropriate mechanism ‘[w]here a plaintiff desires to eliminate an issue, or one or more but less

6

than all of several claims, but without dismissing as to any of the defendants.’” (quoting 5 J.

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Moore, J. Lucas & J. Wicker, MOORE’S FEDERAL PRACTICE § 41.06-1, at 41-83 (1987));

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Gronholz v. Sears, Roebuck and Co., 836 F.2d 515, 518 (Fed. Cir. 1987) (“[W]hile often dubbed

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a Rule 41(a) voluntary dismissal, the procedure [whereby a court grants plaintiff’s motion to

10

dismiss one count of a multi-count complaint] is more properly viewed as a Rule 15 amendment

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to the complaint.”). Since Samsung seeks to dismiss without prejudice some, but not all, of its

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counterclaims and defenses, the motion is not proper under Rule 41(a).

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If Samsung wishes to drop its sixth, seventh, and eighth affirmative defenses and its

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counterclaim for declaratory judgment of unenforceability that assert allegations related to Mr.

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Steinberg as a defense to Rambus’s patent infringement claims, it should withdraw those from the

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case through an amended pleading 4 and thereby forsake those arguments as equitable defenses to

17

Rambus’s patent infringement claims. In its motion, Samsung asserts that it “no longer wants to

18

pursue in this case” its equitable defenses and declaratory judgment counterclaim based on Mr.

19

Steinberg’s alleged misuse of confidential information, but instead wishes to withdraw that

20

counterclaim and those affirmative defenses without prejudice to pursue them in state court. See

21

Motion at 2. This makes no sense. Rambus’s patent infringement claims, and the associated

22

declaratory judgment counterclaim and affirmative defenses of estoppel, equitable estoppel, and

23

implied license, are not pled in the San Francisco Superior Court action, so there is nothing to

24

pursue there. See Luedtke Decl. Exh. J & K (Samsung’s Answer and Cross-Claims in San

25

4

26 27 28

And any amendment at this late date should be conditioned, since leave to amend would need to be sought, on a withdrawal of these claims with prejudice and an explicit commitment that these allegations not be asserted or reasserted in any other action or proceeding. If Samsung alleges that they are, in fact, asserting these claims and defenses in the San Francisco Superior Court action, then permission to amend the pleadings here should also be conditioned on an explicit commitment that these claims and defenses not be pursued further in that action. -9-

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Francisco Superior Court). If Samsung wants to drop its declaratory judgment counterclaim and

2

affirmative defenses that are based on its Neil Steinberg allegations and not assert them as a

3

defense to Rambus’s patent infringement claims, then that must be done with an amended

4

pleading pursuant to Rule 15 that removes the counterclaim and defenses so that they are not a

5

later impediment to the entry of a final judgment in the event that Rambus prevails in the January

6

2009 patent trial on its patent infringement claims against Samsung. 5 And it must do so with

7

prejudice and on the explicit commitment that claims and defenses based on these allegations not

8

be asserted or reasserted in any other action or proceeding, including but not limited to the San

9

Francisco Superior Court action.

10

Samsung’s Section 17200 and declaratory judgment of unenforceability claims and its

11

affirmative defenses based on JEDEC and the Rambus-Samsung RDRAM license negotiations

12

are different. For those claims, for the reason set forth above, amendment of the pleadings would

13

be improper because it would violate Samsung’s commitment to the Court and to Rambus that

14

these claims and defenses would be tried in this Court six months after the January 2008 trial and

15

based on the evidentiary record of that trial. It would further prejudice Rambus by forcing

16

Rambus to repeat the extraordinary burden of a trial on the JEDEC claims and defenses.

17

Samsung’s request to drop those claims without prejudice should be denied for the additional

18

reason that it is procedurally improper under Rule 41. 6

19

D.

20

Count VII asserts a counterclaim based on Rambus’s alleged violation of Section 17200.

Samsung’s Motion Impermissibly Splits Its Section 17200 Counterclaim

21 5

22 23 24 25 26 27 28

Samsung’s attempt to “dismiss” these claims without prejudice could have significant ramifications for the ability of Rambus to enforce any judgment that it might obtain in the upcoming patent trial. See American States Ins. Co. v. Dastar Corp., 318 F.3d 881, 885-87 (9th Cir. 2003) (dismissing a case for lack of appellate jurisdiction where the parties had reserved claims by dismissing them without prejudice). 6 The legal defect in the procedure Samsung proposes should come as no surprise to Samsung. During the negotiations related to the stipulation dismissing these claims, Rambus explained that a dismissal without prejudice would be procedurally improper and cited case law to Samsung in support of this defect. See Luedtke Decl. Exh. I (Email from Carolyn Luedtke to David Healey, August 22, 2008) (citing American States Insurance Co. v. Dastar Corp., 318 F.3d 881 (9th Cir. 2003) and State Treasurer of the State of Michigan v. Barry, 168 F.3d 8 (11th Cir. 1999)). In its gamesmanship, Samsung apparently made a calculated risk and elected to bring an improper motion. It should be held to the consequences. - 10 -

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See Second Amended Answer, Affirmative Defenses, and Counterclaims (“SAC”) ¶¶ 257-67.

2

This singular counterclaim rests on myriad allegations, ranging from spoliation, to Rambus’s

3

conduct at JEDEC, to the various issues surrounding Neil Steinberg. Id. ¶ 259.

4

The Court has already resolved many aspects of this claim. For instance, the Court has

5

already granted Rambus’s motion for partial summary judgment on the claim, insofar as it rests

6

on allegations relating to Neil Steinberg. See Luedtke Decl. Exh. H (August 11, 2008 Order).

7

The Court has also already resolved other evidentiary aspects of the Section 17200 counterclaim

8

– for instance, the coordinated January 2008 Trial has established a record for that cause of action

9

insofar as it rests on allegations relating to JEDEC.

10

Now, with the claim partially adjudicated, Samsung wishes to divide this cause of action

11

into bits and pieces, preserving for another day those fragments that it prefers to present to the

12

San Francisco Superior Court. Samsung’s attempt to divide Count VII is evident on the face of

13

its motion, which purports to request dismissal of the “JEDEC 17200 counterclaim” and the

14

“Spoliation 17200 counterclaim.” The problem with this proposal is that Count VII is pled as a

15

unitary cause of action, and under California law it must be presented in a single proceeding.

16

Under California law, which governs the Section 17200 counterclaim, “[i]t is clearly

17

established that a party may not split up a single cause of action and make it the basis of separate

18

suits, and in such case the first action may be pleaded in abatement of any subsequent suit on the

19

same claim. The rule against splitting a cause of action is based upon two reasons: (1) that the

20

defendant should be protected against vexatious litigation; and (2) that it is against public policy

21

to permit litigants to consume the time of the courts by relitigating matters already judicially

22

determined, or by asserting claims which properly should have been settled in some prior action.”

23

People v. Damon, 51 Cal.App.4th 958, 974 (Ct. App. 1996) (quoting Wulfjen v. Dolton, 24 Cal.2d

24

891, 894-896 (1944)). In other words, once a litigant decides to advance and adjudicate its claim

25

in one forum, it cannot then present the same claim in a different forum. This prohibition on

26

claim-splitting stems from basic principles of res judicata, which hold that a party may not seek

27

multiple adjudications of the same claim once they have already been resolved. See Mycogen

28

Corp. v. Monsanto Co., 51 P.3d 297, 306-07 (Cal. 2002) (explaining that a claimant may not - 11 -

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adjudicate multiple claims based on the same “primary right” or different parts of a single claim,

2

so long as it is able to seek all appropriate relief in its initial chosen forum). Here, Samsung’s

3

counterclaim under Section 17200 derives from the same set of “rights” and circumstances --

4

namely, its right to be free of liability for patent infringement due to Rambus’s alleged

5

misconduct. Because that is the basis for all aspects of Samsung’s claim under Section 17200,

6

Samsung cannot partially pursue this cause of action, as it has already done in this Court, and then

7

turn around and seek adjudication of the very same issues and counterclaims in a different court,

8

as it now seeks to do through the vehicle of its pending motion. Simply stated, Samsung must

9

finish litigating its Section 17200 counterclaim before this Court, in this litigation, or dismiss the

10

remainder with prejudice and abandon the issues still to be tried thereunder.

11

IV.

12

CONCLUSION For the reasons set forth herein, the Court should deny Samsung’s motion to dismiss. If

13

Samsung does not want to complete the trial on its counterclaims and related affirmative defenses

14

that began in January 2008, then those claims and defenses should be dismissed with prejudice

15

and on their merits, and on the explicit condition that these claims and defenses and the

16

allegations underlying them may not be raised or litigated in any other forum. Having demanded

17

and agreed to a separate trial on very clear conditions, Samsung should not be permitted to rewind

18

the clock, evade this Court’s May 7, 2008 Order, and force Rambus to start all over again to try

19

these issues and claims in another court.

20

If Samsung does want to complete the trial on its counterclaims and related affirmative

21

defenses in this Court, then this Court should require Samsung to immediately (and in no event

22

later than 5:00 p.m. on Friday, September 5, 2008) supplement its pretrial disclosures to include

23

the claims and defenses that are the subject of its September 2, 2008, motion. Those disclosures

24

were due on August 27, 2008, and were extended to September 2, 2008, pursuant to the parties’

25

///

26

///

27

///

28

/// - 12 -

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agreement. Given Samsung’s flagrant and intentional violation of the agreed-upon deadline for

2

these pretrial disclosures, the Court should also impose sanctions on Samsung and its counsel,

3

including pursuant to 28 U.S.C. § 1927.

4 5

DATED: September 4, 2008

MUNGER, TOLLES & OLSON LLP

6 7

By:

8 9

/s/ Carolyn Hoecker Luedtke CAROLYN HOECKER LUEDTKE

Attorneys for RAMBUS INC.

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