Case Name:   LJC Media LLC v. Yahoo! Inc., et al.

Case No.:       1-13-CV-246401

Motion for Summary Judgment

Yahoo! Inc. (“Yahoo”) moves for summary judgment on the grounds that the undisputed facts demonstrate it did not breach its contract with plaintiff LJC Media LLC (“LJC”) or the implied covenant of good faith and fair dealing, and LJC has waived a number of its claims by accepting Yahoo’s performance under the contract despite its alleged breaches.

LJC alleges that Yahoo breached the parties’ contract by: (1) failing to timely pay revenues due under the contract (First Amended Complaint (“FAC”), ¶¶ 32, 36, 76, 78, 81, and 84); (2) failing to issue timely “Partner Statements” (FAC, ¶¶ 37, 77, 79, 82); (3) arbitrarily reducing revenues due under the contract (FAC, ¶¶ 80, 83, 87, 89, 91, 93), including by enacting an 8% adjustment to pay ad revenues to Microsoft (FAC, ¶¶ 38-40, 86), by reducing the amounts payable based on LJC’s “Traffic Quality” (“TQ”) rating (FAC, ¶¶ 25-35), and by making a series of reductions based on “bad clicks” (FAC, ¶¶ 41-71); and (4) failing to provide any substantiation for reductions of revenue (FAC, ¶¶ 85, 88, 90, 92).

With respect to the first alleged breach, LJC alleges that the parties’ contract required Yahoo to issue Partnership Statements reflecting the amount due to LJC for each calendar month and to pay that amount, both within 45 days of the end of the month.  (See FAC ¶ 32, citing paragraph 5 of the contract [providing that “[w]ithin 45 days after the end of the calendar month in which the relevant Paid Search Results appeared on the Publisher’s Offerings, Yahoo! will pay Publisher 77% of Adjusted Gross Revenue.”]; Opp., p. 12.)  LJC alleges that the February 2012 Partner Statement was the last statement that Yahoo timely issued and paid (FAC, ¶ 32), although LJC continued to provide services through June 5, 2012 (FAC, ¶ 36).  Thus, LJC alleges that Yahoo failed to timely pay revenues for March, April, May, and June of 2012.  (FAC, ¶¶ 76, 78, 81, and 84.)

Yahoo either overlooks or avoids the FAC’s allegations concerning its failure to timely pay these revenues (see Mot., p. 11 [listing five categories of breaches alleged by the FAC, but omitting failure to timely pay revenues]), and does not directly address this issue in its moving papers.  While it contends that the parties’ contract does not require it to issue Partner Statements at all (Mot., pp. 12-13), Yahoo does not otherwise address the 45-day requirement established by paragraph 5 of the contract.  Further, Yahoo’s discussion of the facts it presents in support of its argument as to the other alleged breaches of contract does not reference any payments to LJC between April 10, 2012 and October 18, 2012.  (See Mot., pp. 7-8.)  Thus, Yahoo has failed to establish that it made each of the payments for March-June 2012 within 45 days of the end of those months.

Finally, Yahoo’s waiver argument pertains to the breaches alleged by LJC based on certain payment deductions due to “bad clicks” and deductions based on the use of TQ ratings.  (Mot., p. 18.)  Consequently, Yahoo does not address the alleged breaches based on late payments for March-June 2012 via its waiver argument, either.

Accordingly, the motion for summary judgment is DENIED as Yahoo has failed to meet its initial burden with respect to its alleged failure to timely pay revenues for March-June of 2012.

LJC’s objections to paragraphs 2, 5, 6 [at pp. 1:24-2:1], 7, and 8 [at p. 2:8] of the declaration of Jimmy Hsu are SUSTAINED, while the objections to paragraphs 6 [at p. 2:1-2] and 8 [at p. 2:8-10] are OVERRULED.

LJC’s objections to paragraphs 27 and 29 of the declaration of Joshua Cobb are SUSTAINED.

Yahoo’s objections to evidence submitted with its reply brief are OVERRULED given that they do not comply with California Rules of Court, rule 3.1352.

Motion to Seal Records

Yahoo’s motion to seal records lodged with the court in support of the motion for summary judgment is GRANTED.  The Court makes the findings enumerated in California Rules of Court, rule 2.550(d), based on the facts set forth in Yahoo’s written submissions in support of its motion to seal.