Early September Summary of the SkyRiver/Innovative vs. OCLC Case

On September 9th, OCLC filed its first substantial response with the court to the antitrust lawsuit file by SkyRiver and Innovative Interfaces. And in a motion where OCLC requests a change of venue from the Northern District of California to the Southern District of Ohio — something seemingly mundane — they certainly pulled no punches:

Through a lengthy recitation of inaccurate facts, Plaintiffs allege six claims against OCLC. In short, Plaintiffs allege that OCLC, a forty-year old non-profit entity, is making it difficult for Innovative and its one-year old sister-company, SkyRiver, to compete and gain market share in the ILL, ILS, and the online cataloging library world. Through a variety of uncited references in their Complaint to “prominent library-related internet blogs,” unnamed commentators, and unattributed articles and reports, as well as through creating an anti-OCLC website, Plaintiffs have levied a propaganda war on OCLC simply because Plaintiffs have been unable to compete successfully with OCLC’s membership base and bibliographic data which OCLC earned through forty years of dedicated service to its member libraries. SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc. Filing: 16. Page 4. Retrieved from Justia Docs on 18-Sep-2010. (link added)

The question at hand seems to be a bit more than a propogada war between SkyRiver and OCLC. But the court is not yet at the meat of the matter.

The text accompanying the motion for change of venue, though, does not deal with the issues raised in the lawsuit. Instead, it requests the California court “transfer this action from this District to the Southern District of Ohio, Eastern Division, located in Columbus, Ohio.”

“Litigation should proceed where the case finds its center of gravity.” The “center of gravity” is determined by the location of key witnesses and documents. Here, the “center of gravity” is plainly the Southern District of Ohio, for these reasons:

  • OCLC’s headquarters and virtually all of the key witnesses and documentary evidence are located in or near Central Ohio.
  • OCLC has a relatively small presence in California, as compared to its much larger and longer-established presence in Ohio.
  • OCLC made all decisions and actions operative to the allegations of Plaintiffs SkyRiver Technology Solutions, LLC (“SkyRiver”) and Innovative Interfaces, Inc. (“Innovative”) (collectively “Plaintiffs”) in Ohio.
  • The State of California does not have an interest in this lawsuit beyond the fact that Plaintiffs are residents of California, whereas the State of Ohio has a great interest in this lawsuit because Plaintiffs have alleged that one of Ohio’s non-profit entities is abusing its non-profit status, an allegation that can impact other Ohio non-profit entities.

For these and other reasons discussed in more detail below, all parties and the Court will be better served by transferring this case to the Southern District of Ohio, Eastern Division. In making this Motion, OCLC reserves any defenses that it may have against Plaintiffs’ claims. SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc. Filing: 16. Pages 1-2. Retrieved from Justia Docs on 18-Sep-2010. (Legal citations removed from text.)

The last point is probably the most interesting to the layperson watching this epic battle unfold. Pages 12 and 13 contain these statements:

The state of Ohio’s interest in adjudicating this matter within its borders also militates towards transferring this case. OCLC’s relevant policies and practices were developed and implemented in Ohio and the most important witnesses and evidence are located there.

Further, Plaintiffs have stated serious, albeit unfounded, allegations regarding OCLC’s non-profit status. Plaintiffs have stated that OCLC is “abusing its status as a tax exempt, non-profit entity and unfairly competes with for-profit companies, such as Innovative and SkyRiver, by using its non-profit status as leverage to monopolize the library services industry….” These baseless allegations could create serious implications for other Ohio non-profit entities, and Ohio courts have a greater interest in litigating these issues. While Ohio courts also have more experience applying Ohio’s laws, more importantly, they also have more experience with the routine customs and practices of non-profit entities in Ohio. In addition, the Ohio Attorney General has oversight over Ohio non-profit entities and would likewise have an interest in this lawsuit.

In contrast, California does not have an interest in litigating this action because none of the operative actions occurred in California. Though Plaintiffs asserted California state law claims, as explained below, Ohio courts will be equally skilled at applying and interpreting those laws. SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc. Filing: 16. Pages 12-13. Retrieved from Justia Docs on 18-Sep-2010. (Legal citations removed from text.)

The question of OCLC’s tax exempt status is one that bubbles up on occasion. It would seem like OCLC’s legal team is willing to take this head on.

Accompaying the motion to transfer is a declaration by Bruce Crocco, Vice President, Library Services for the Americas for OCLC, and this is a more interesting document. It goes into the history of OCLC — its founding in 1967 on the Ohio State University campus, how OCLC revolutionized the production of paper cards for card catalogs and the movement into online catalogs, and the evolution of the WorldCat brand name.

Earlier this week, the judge in the case set this schedule for hearing from the parties on the motion:

This matter is set for a hearing on October 29, 2010 on Defendant OCLC Online Computer Library Center’s motion to transfer venue. The Court HEREBY ORDERS that an opposition to the motion shall be filed by no later than September 27, 2010 and a reply brief shall be filed by no later than October 4, 2010.

If the Court determines that the matter is suitable for resolution without oral argument, it will so advise the parties in advance of the hearing date. If the parties wish to modify this schedule, they may submit for the Court’s consideration a stipulation and proposed order demonstrating good cause for any modification requested.

To refresh your memory, the lawsuit was filed on July 28, 2010, and was assigned to Judge Jeffrey S. White on August 6, 2010. On August 12th, Judge White set a Case Management Conference for January 14, 2011, and on August 13th lawyers for OCLC filed a notice with their intent to request a change of venue. Stay tuned for an update as the case moves on…