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Domain Protection LLC v. Sea Wasp, LLC

United States District Court, E.D. Texas, Sherman Division

August 20, 2019

DOMAIN PROTECTION, LLC,
v.
SEA WASP, LLC, ET. AL.

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendant Sea Wasp, LLC's Motion to Stay (Dkt. #199), Sea Wasp's Motion for Reconsideration (Dkt. #208), Movant Quantec, LLC's Motion for Leave (Dkt. #222), and Quantec's Second Motion to Intervene (Dkt. #224). After careful consideration, the motions will be denied.

         INTRODUCTION

         The facts and procedural history are long and complicated. See Domain Prot., LLC v. Sea Wasp, LLC, No. 4:18-cv-792, 2019 WL 3219939, at *1-3 (E.D. Tex. July 17, 2019) (discussing the facts in this case in more detail). An abbreviated summary is outlined below.

         Plaintiff Domain Protection, LLC is the registered name holder for over 50, 000 domain names (the “Domain Names”). Sea Wasp, on the other hand, is the Registrar over the Domain Names and is accredited by the Internet Corporation for Assigned Names and Numbers (“ICANN”). Domain Protection has sued Sea Wasp for placing an executive lock on the Domain Names and refusing to release it. Sea Wasp counters that ICANN requires it to lock the Domain Names until a dispute over whether Domain Protection is the rightful owner of the Domain Names (the “Ownership Dispute”) is resolved. The Ownership Dispute turns on whether, in 2014, Lisa Katz exceeded her authority as the Local Operations Manager for Quantec when she assigned the Domain Names to Domain Protection (the “Assignment”).

         Domain Protection moved for a preliminary injunction in November 2018, asking the Court to force Sea Wasp to remove the executive lock. The corresponding response and reply were timely filed but a sur-reply was not. Sea Wasp then filed three motions seeking leave to file additional briefs-two in January 2019 (Dkt. #79; Dkt. #83) and a third in April 2019 (Dkt. #120). Perhaps in light of the extensive briefing, Domain Protection and Sea Wasp agreed that no hearing on the motion was necessary (see Dkt. Entry, April 17, 2019).

         The Court took the parties at their word, and ruled on the motion for preliminary injunction without a hearing. After reviewing the Parties' briefs, however late they were filed, the Court granted Domain Protection's Motion for Preliminary Injunction (the “Preliminary Injunction Order”) (Dkt. #54). The Court found that Domain Protection had made a prima facie showing that Sea Wasp exceeded its authority by placing an executive lock on the Domain Names, that the executive lock was causing Domain Protection irreparable harm, and that these harms outweighed those to Sea Wasp. The Court consequently enjoined Sea Wasp from “interfering with Domain Protection's control over the Domain Names, ” and directed Sea Wasp “to immediately undo all changes it made without Domain Protection, LLC's permission to the Domain Names' nameserver records.” Domain Prot., 2019 WL 3219939, at *11.

         Sea Wasp now asks the Court to reconsider the Preliminary Injunction Order, and to stay its enforcement while the Court conducts its reconsideration. Sea Wasp contends that, although the motion raises arguments and evidence not before the Court when deciding the motion for preliminary injunction, any failure to timely raise these matters is due to Domain Protection's delays in the discovery process. The Preliminary Injunction Order also prompted Quantec to file three motions in this case, even though it is a non-party. These include: (1) a motion to renew its previously denied motion to intervene, (2) a motion to intervene (subject to the motion to renew), and (3) a motion to reconsider the preliminary injunction order.

         Domain Protection responds that it is still entitled to a preliminary injunction-even assuming the Court considers arguments and evidence that had not been raised in the several months its motion for preliminary injunction was pending.

         LEGAL STANDARD

         A motion seeking reconsideration may be construed under Federal Rule of Civil Procedure 54(b), 59(e), or 60(b) depending on the circumstances. “The Fifth Circuit recently explained that ‘Rule 59(e) governs motions to alter or amend a final judgment,' while ‘Rule 54(b) allows parties to seek reconsideration of interlocutory orders and authorizes the district court to revise at any time any order or other decision that does not end the action.'” Dolores Lozano v. Baylor Univ., No. 6:16-CV-403-RP, 2018 WL 3552351, at *1 (W.D. Tex. July 24, 2018) (quoting Austin v. Kroger Tex., L.P., 864 F.3d 326, 336 (5th Cir. 2017)). Further, “‘[i]nterlocutory orders,' such as grants of partial summary judgment, ‘are not within the provisions of 60(b), but are left within the plenary power of the court that rendered them to afford such relief from them as justice requires [pursuant to Rule 54(b)].” McKay v. Novartis Pharm. Corp., 751 F.3d 694, 701 (5th Cir. 2014) (quoting Zimzores v. Veterans Admin., 778 F.2d 264, 266 (5th Cir. 1985)) (citing Bon Air Hotel, Inc. v. Time, Inc., 426 F.2d 585, 862 (5th Cir. 1970)).

         Because this is a motion seeking reconsideration of an interlocutory order, the Court uses Federal Rule of Civil Procedure 54(b). “Federal Rule of Civil Procedure 54(b) provides that, in a case involving multiple claims or parties, ‘any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities or fewer than all the parties . . . may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.'” Blundell v. Home Quality Care Home Health Care, Inc., No. 3:17-cv-1990-L-BN, 2018 WL 276154, at *4 (N.D. Tex. Jan. 3, 2018) (quoting Fed.R.Civ.P. 54(b)). “Under Rule 54(b), ‘the trial court is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law.'” Austin, 864 F.3d at 336 (quoting Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 185 (5th Cir. 1990), abrogated on other grounds, Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n.14 (5th Cir. 1994)).

         DISCUSSION

         After the Court issued a preliminary injunction in this case, Sea Wasp and Quantec filed several motions: (1) Quantec's motion to renew its motion to intervene; (2) Quantec's second motion to intervene; (3) Quantec and Sea Wasp's respective motions for reconsideration; and (4) Sea Wasp's motion stay enforcement of the preliminary injunction. The Court addresses each in turn.

         I. Quantec's Motion to Renew & Second Motion to Intervene

         Quantec asks to renew a motion to intervene (Dkt. #15) that has been denied on several occasions (Dkt. #15; Dkt. #52). It argues that, because the preliminary injunction has just issued, Quantec has a meaningful interest in the case that it has timely asserted. The Court disagrees.

         Despite Quantec's misleading suggestion otherwise, the Court has already considered and rejected Quantec's position that a preliminary injunction gives it a right to intervene in the original order denying Quantec's right to intervene. The Court noted that:

Movants argue in their reply brief that disposition of the action before the court will impede the Movants' rights because Domain's preliminary injunction will affect the Movants' ownership interest in the domain names involved in this case. Immediately after this argument, however, the Movants recognize that Sea Wasp “takes no position as to ownership, ” and the dispute between Domain and Sea Wasp involves the power of a registrar under the ICANN rules. Movants' concern regarding the preliminary injunction, which the Movants allege will affect their ownership interest, does not mean that the disposition of this action, which involves Sea Wasp's power as an ICANN registrar, will necessarily affect the Movants' alleged ownership interest in the domain names. The Movants may file their own lawsuit concerning the ownership of the domain names. See ...

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