Deadline.com UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION

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1 QUINN EMANUEL URQUHART & SULLIVAN, LLP Duane R. Lyons (Bar No. 1) duanelyons@quinnemanuel.com Valerie Lozano (Bar No. 000) valerielozano@quinnemanuel.com Justin Givens (Bar No. ) justingivens@quinnemanuel.com South Figueroa Street, th Floor Los Angeles, California 001- Telephone: (1) -000 Facsimile: (1) -0 Attorneys for Defendant DIRECTV National Association of African- American Owned Media, a California limited liability company; and Entertainment Studios Networks, Inc., a California corporation, vs. Plaintiffs, AT&T, Inc. a Delaware corporation; AT&T Services, Inc., a Delaware corporation; AT&T Mobility LLC, a Delaware corporation; and DirecTV, a California limited liability company; and DOES 1 through, inclusive. Defendant. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION CASE No. :1-cv-0-PJW DEFENDANT DIRECTV S NOTICE OF MOTION AND MOTION TO DISMISS DEFENDANT DIRECTV PURSUANT TO RULES 0 AND 1 [Memorandum of Points and Authorities; Request for Judicial Notice; Declaration of Duane R. Lyons; and [Proposed] Order filed concurrently herewith] Hearing Date: September 1, 01 Hearing Time: :00 a.m. Hearing Place: Ctrm., Spring St. Judge: Honorable Patrick J. Walsh DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

2 NOTICE OF MOTION PLEASE TAKE NOTICE that, on September 1, 01, at :00 a.m., in Courtroom of the United States District Court for the Central District of California, located at 1 North Spring Street in Los Angeles, California, Defendant DIRECTV will and hereby does move this Court for an order dismissing Defendant DIRECTV from this action. The Motion seeks dismissal of Defendant DIRECTV pursuant to Rules 0 and 1 of the Federal Rules of Civil Procedure on the grounds that DIRECTV is not properly joined as a defendant. This Motion is based upon this Notice of Motion; the attached Memorandum of Points and Authorities; the concurrently-filed Request for Judicial Notice; the concurrently-filed Declaration of Duane R. Lyons; and such additional evidence and argument as may be presented at or before the hearing on this matter. This Motion is made following conferences of counsel pursuant to Local Rule -, which took place on March and, 01, May, 01, and July, 01. DATE: July, 01 QUINN EMANUEL URQUHART & SULLIVAN, LLP By /s/ Duane R. Lyons Duane R. Lyons Attorneys for DIRECTV DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

3 TABLE OF CONTENTS Page PRELIMINARY STATEMENT... 1 ARGUMENT... I. PLAINTIFFS HAVE IMPROPERLY JOINED DEFENDANT DIRECTV IN VIOLATION OF RULE 0... II. III. A. Plaintiffs Claims Against Defendants Do Not Arise Out Of The Same Transaction(s) Or Occurrence(s)... B. The Fact That There May Be A Common Question Of Law Is Insufficient To Allow Joinder... C. Allowing This Action To Proceed Against All Defendants Would Not Comport With Principles of Fundamental Fairness And Would Prejudice DIRECTV... PLAINTIFFS PREMATURE ARGUMENT IS PREMISED ON A MISUNDERSTANDING OF THE STRUCTURE OF THE PROPOSED MERGER AND, AS SUCH, FAILS... PURSUANT TO RULE 1, DEFENDANT DIRECTV SHOULD BE DISMISSED FROM THIS ACTION... 1 CONCLUSION i- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

4 TABLE OF AUTHORITIES Cases Page Argent Classic Convertible Arbitrage Fund L.P. v. Countrywide Fin. Corp., 00 WL 0 (C.D. Cal. Mar., 00)... Arguello v. Conoco, Inc., 0 F.d 0 (th Cir. 000)... Armstead v. City of Los Angeles, 01 WL 0 (C.D. Cal. Dec., 01)..., 1 BMG Music v. Does 1-, 00 WL (N.D. Cal. Aug. 1, 00)...,,, 1 Bercy Indus., Inc. v. C. I. R., 0 F.d (th Cir. 1)... Bravado Int l Grp. Merch. Servs. v. Cha, 0 WL 0 (C.D. Cal. June 0, 0)...,,, 1 Causey v. Sewell Cadillac-Chevrolet, Inc., F.d (th Cir. 00)... Coughlin v. Rogers, F.d 1 (th Cir. )..., Desert Empire Bank v. Ins. Co. of N. Am., F.d 11 (th Cir. 0)... Dole Food Co. v. Patrickson, U.S. (00)... Giovanini v. United States, F.d (th Cir. )... Heritage Pac. Fin., LLC v. Cole, 0 WL 1 (C.D. Cal. May, 0)...,, 1 Iyigun v. Cavalry Portfolio Servs., LLC, 01 WL (C.D. Cal. Jan., 01)... Nat l Rural Telecomm. Coop. v. DIRECTV, Inc., F. Supp. d 0 (C.D. Cal. 00)... United States v. Bennett, 1 F.d 1 (th Cir. 0)... Visendi v. Bank of Am., N.A., F.d (th Cir. 01)... -ii- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

5 Voltage Pictures, LLC v. Does 1-, 01 WL 00 (D. Or. May, 01)...,,, 1 Wynn v. Nat l Broad. Co., F. Supp. d (C.D. Cal. 00)...,,, Statutes Fed. R. Civ. P. 0(a)()...,, Fed. R. Civ. P iii- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

6 MEMORANDUM OF POINTS AND AUTHORITIES Preliminary Statement In an attempt to bolster their claims of discrimination, Plaintiffs Second Amended Complaint ( SAC ) alleges that several AT&T executives transmitted racially offensive photographs and made racially offensive statements. Plaintiffs argue that these statements help demonstrate that Defendants decisions not to advertise with or to pay Entertainment Studios Networks, Inc. ( ESN ) license fees for carrying its programming over their respective platforms was the product of intentional discrimination. 1 As set forth below, these new allegations simply underscore that DIRECTV has been improperly joined in this action. The SAC readily admits that ESN separately negotiated with AT&T and DIRECTV regarding advertising and carriage agreements. Plaintiffs do not contend that Defendants acted in concert during those negotiations. In fact, the SAC admits that Defendants decisions regarding carriage and advertising were made at separate times by independent companies. Thus, DIRECTV s motion to dismiss for improper joinder should be granted on that basis alone. However, Plaintiffs new allegations of racially offensive conduct by former AT&T employees provides an additional basis to sever these claims. Rule 0 of the Federal Rules of Civil Procedure requires that, in order to join multiple defendants in a single action, the claims against those defendants must arise out of the same transaction(s) or occurrence(s), and a common question of law or fact must exist. It is well settled that allegations like ESN s namely, that multiple defendants violated the same statute in a similar manner are insufficient to demonstrate permissive joinder. Moreover, even if joinder were proper, Plaintiffs 1 As set forth in DIRECTV s contemporaneously filed Motion to Dismiss Pursuant to Rule 1(b)(), the Second Amended Complaint ( SAC ) fails to plead facts which would even support an inference of intentional racial discrimination by DIRECTV and should be dismissed on those grounds. -1- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

7 attempts to rely on racially offensive conduct by AT&T executives to paint DIRECTV with the same brush demonstrate that DIRECTV should be severed from this action. If DIRECTV remains AT&T s co-defendant in this action, it will be forced to defend itself against racially offensive conduct with which it had nothing to do. That is the definition of undue prejudice. As such, DIRECTV respectfully requests that it be dismissed from this action pursuant to Rules 0 and 1. Failure to do so will unduly prejudice DIRECTV. Argument I. PLAINTIFFS HAVE IMPROPERLY JOINED DEFENDANT DIRECTV IN VIOLATION OF RULE 0 Rule 0(a)() governs the permissive joinder of multiple defendants into a single action. It provides that defendants may be joined in one action if: (A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action. Fed. R. Civ. P. 0(a)(). Thus, Rule 0 permits the joinder of multiple defendants only if two requirements are satisfied: transactional relatedness and commonality. Bravado Int l Grp. Merch. Servs. v. Cha, 0 WL 0, at *1 (C.D. Cal. June 0, 0). Both of [t]hese requirements must be satisfied in order to allow for joinder under Rule 0(a), however, even if these requirements are satisfied, there is no requirement that the parties must be joined. Wynn v. Nat l Broad. Co., F. Supp. d, (C.D. Cal. 00) (emphasis in original). A. Plaintiffs Claims Against Defendants Do Not Arise Out Of The Same Transaction(s) Or Occurrence(s) The Ninth Circuit interprets the same transaction requirement to require a degree of factual commonality underlying the claims. Bravado, 0 WL 0, at *; see also Coughlin v. Rogers, F.d 1, (th Cir. ) -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

8 (the same transaction requirement, refers to similarity in the factual background of a claim ). Proper joinder under Rule 0 requires that the parties must assert rights, or have rights asserted against them, that arise from related activities a transaction or occurrence or a series thereof. Bravado, 0 WL 0, at *. Even if the allegations against Defendants share common legal and factual issues, when they rest upon distinct and independent sets of facts they do not meet the transactionally-related requirement. Heritage Pac. Fin., LLC v. Cole, 0 WL 1, at * (C.D. Cal. May, 0). Moreover, when the conduct alleged does not clearly arise from the same transaction, courts regularly hold that absent any allegations that [defendants] acted in concert, there is no basis for joinder. BMG Music v. Does 1-, 00 WL, at * (N.D. Cal. Aug. 1, 00) ( Numerous federal courts have found that joinder is improper when there is no allegation that multiple defendants acted in concert. ) (collecting cases); Bravado, 0 WL 0, at * (dismissing improperly joined defendants, noting the complaint was entirely devoid of any allegations that Defendants conspired with one another ); Wynn, F. Supp. d at 0 (finding joinder improper and noting there were no allegations of an actual concert of action among all of the Defendants ); Voltage Pictures, LLC v. Does 1-, 01 WL 00, at * (D. Or. May, 01) (similar). As the Central District of California explained, [t]he facts that each Defendant allegedly made similar fraudulent statements in their respective loan applications is immaterial because Plaintiff does not allege that Defendants conspired together or acted in concert. Heritage, 0 WL 1, at *. Wynn v. National Broadcasting Co., F. Supp. d (C.D. Cal. 00) is instructive. There, the television writer-plaintiffs sought to join several distinct defendant entities that employ television writers, such as studios and networks, in their age discrimination action. The plaintiffs claimed joinder was proper because they were alleging an industry-wide pattern or practice of discrimination ; thus, -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

9 all Defendants are jointly responsible for this practice. Id. at. The court rejected the plaintiffs argument. Id. It first noted that the defendants are separate entities, each with distinct hiring and firing practices, and with a multitude of separate individuals in charge of determining these practices for each of the separate entities. Id. Moreover, there were no allegations that the defendants acted in concert. Id. at 0. Holding the joinder improper, the court explained that the mere assertion that defendants are members of a common industry is insufficient to satisfy the first prong of Rule 0(a)(). Id. at - (noting that even if plaintiffs could successfully allege a discriminatory pattern-or-practice against each Defendant individually, there is still no rationale behind requiring all Defendants to defend each other collectively. ) The allegations here suffer from the same problem as those in Wynn. AT&T and DIRECTV are entirely separate corporate entities with distinct practices regarding their carriage agreements and advertising decisions. Moreover, there are no allegations that the contracting decisions by these separate entities were part of the same transaction; rather, the SAC alleges the opposite. For example, ESN admits that it has a carriage agreement with AT&T for Justice Central, a program that was launched in 01. (SAC.) Nevertheless, Plaintiffs contend that AT&T has engaged in discrimination because that agreement provides that AT&T will not pay any license fees for Justice Central for at least years. (Id.) Although the SAC references the contemplated merger of AT&T and DIRECTV, it readily concedes that the merger still faces regulatory approval. (SAC.) Thus, the anticipated merger does not provide a basis on which to disregard the corporate status of these individual defendants. Moreover, as discussed further in Section II below, AT&T and DIRECTV will still be separate and distinct entities even if the merger occurs. ESN claims that it has unsuccessfully attempted to contract with defendants since 00 (id. at 1) years before the May 01 merger was announced. Thus, it is clear that the decisions resulting from those negotiations were made by separate and distinct entities. -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

10 Plaintiffs allege that Justice Central has boasted double to triple ratings growth between the first quarter of 01 and the fourth quarter of 01, (id. at ), but that AT&T has refused to pay any license fees despite that growth, (id. at ). The SAC further alleges that AT&T told ESN that it must pay AT&T a minimum of $1 million for the cost of bandwidth, (id. at ), and refuses to even to meet with ESN to discuss a carriage agreement for its six other channels. (Id. at.) On the other hand, ESN does not have a carriage agreement with DIRECTV for Justice Central or any other program. (Id. at.) However, Plaintiffs do not claim that DIRECTV refused to meet with ESN. (See id. at.) Instead, the SAC admits that ESN met with DIRECTV and shared the Justice Central ratings growth story with DIRECTV executives. (Id. at.) During those discussions (and despite their claims of growth), ESN offered Justice Central to DIRECTV for free despite Justice Central s alleged track record of rating growth. (Id. at.) DIRECTV declined and proposed that ESN pay a $0 million annual fee per channel launched. (Id. at.) ESN admits that it could not afford to pay that fee. (Id.) Rather than evincing that Defendants carriage agreement decisions arose out of the same transaction, the SAC clearly demonstrates these decisions arose from separate negotiations with distinct companies involving different terms. (Id. at.) Moreover, the SAC is entirely devoid of any specific allegations that Although Plaintiffs trumpet the purported ratings growth of Justice Central in percentage terms, they fail to provide the whole numbers on which those percentages are based. A % growth in ratings for a program that has only 1,000 viewers is much different than a % growth in ratings for a program with 1 million viewers. Nor do plaintiffs identify the source of this data; i.e., is it based on Neilsen ratings (an industry standard) or some other less accepted company. ESN s offer to provide its leading program to DIRECTV for free underscores the fundamental flaw in its claim that DIRECTV s refusal to pay license fees for ESN programs was discriminatory. As the saying goes why buy the cow, when you can get the milk for free. -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

11 DIRECTV and AT&T acted jointly or in concert when engaging in the alleged conduct at issue. In a disingenuous attempt to demonstrate such conduct, the SAC frequently refers to the parties as AT&T/ DIRECTV or uses the phrase AT&T and DIRECTV when actually referring to conduct specific to AT&T. (See, e.g., id. at (alleging AT&T/DIRECTV s personnel... although all related allegations refer only to AT&T personnel); id. at (alleging that in AT&T s and DIRECTV s own words they have a Black problem, even though the only person the SAC alleges made this statement was an AT&T employee). As set forth in DIRECTV s Motion to Dismiss Second Amended Complaint Pursuant to Rule 1(b)(), this well-worn tactic is improper and is not a substitute for specific identification of conduct allegedly engaged in by each distinct party. The case law is clear: the conduct and circumstances alleged here do not satisfy the first prong of Rule 0(a)(). See, e.g., BMG Music, 00 WL, at * (finding element not satisfied where the defendants allegedly engaged in separate and distinct violations at different times and dates and where there are no allegations of concerted action between them); Bravado, 0 WL 0, at * ( That several Defendants in this case may have engaged in similar transactions, or had the capability of doing so, is insufficient to establish joinder. ); Heritage, 0 WL 1, at * (finding joinder improper where the defendants acted individually, on different dates ). Because both requirements of Rule 0(a)() must be met, Plaintiffs failure to meet this requirement is fatal to its attempt to join Defendants in this single action. B. The Fact That There May Be A Common Question Of Law Is Insufficient To Allow Joinder Because Plaintiffs cannot meet the first prong of Rule 0(a)(), the Court need not reach the second prong. However, even assuming arguendo that the first element was met, allegations that each Defendant violated the same statute[] in the same manner... is not sufficient to create a common question of law warranting -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

12 permissive joinder of Defendants. Iyigun v. Cavalry Portfolio Servs., LLC, 01 WL, at * (C.D. Cal. Jan., 01); see also Coughlin v. Rogers, F.d 1, (th Cir. ) ( [T]he mere fact that all Plaintiffs claims arise under the same general law does not necessarily establish a common question of law or fact. ); Wynn, F. Supp. d at 0 ( alleging claims against Defendants based on the same general theory of law [] is not a sufficient ground to find that their claims raise common legal or factual questions ); Voltage Pictures, 01 WL 00, at * (finding joinder of multiple defendants improper where the complaint merely suggests that the Doe defendants committed the same type of violation in the same way ). At most, all that is present here are allegations that DIRECTV and AT&T both violated Section 1 by allegedly refusing to offer ESN a carriage agreement with licensing terms and refusing to advertise on its channels. Those allegations, if true, demonstrate nothing more than that Defendants violated the same statute in a similar manner. That, however, is insufficient to meet the joinder requirements of Rule 0. C. Allowing This Action To Proceed Against All Defendants Would Not Comport With Principles of Fundamental Fairness And Would Prejudice DIRECTV Even if the Rule 0 requirements were met (they are not), joinder would still be inappropriate unless it comport[ed] with the principles of fundamental fairness. Armstead v. City of Los Angeles, 01 WL 0, at * (C.D. Cal. Dec., 01) (citing Desert Empire Bank v. Ins. Co. of N. Am., F.d 11, 1 (th Cir. 0)). Thus, even in situations where the requirements are met, courts must still examine whether permissive joinder would comport with the principles of fundamental fairness or would result in prejudice to either side. Visendi v. Bank of Am., N.A., F.d, 0 (th Cir. 01). Here, Plaintiffs SAC alleges that there was a culture of discrimination at AT&T and that Dan York, a former AT&T employee, carried this discriminatory -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

13 attitude with him to DIRECTV. However, Plaintiffs do not identify any discriminatory conduct or statements made by York after he moved to DIRECTV. In addition, Plaintiffs attempt to capitalize on inflammatory photographs allegedly found on the phone of former AT&T executive Aaron Slator, as well as statements made by another unidentified AT&T employee. As set forth at length in DIRECTV s contemporaneously filed Motion to Dismiss Second Amended Complaint Pursuant to Rule 1(b)(), none of this conduct is attributable to DIRECTV. However, Plaintiffs attempts to rely on alleged misconduct at AT&T highlights why DIRECTV should be severed from this action. If DIRECTV remains AT&T s co-defendant in this action, it will be forced to defend itself against (i) racially offensive photographs that it had nothing to do with and (ii) statements by AT&T employees that it did not adopt, authorize, or endorse. Plaintiffs lack any allegations implying intentional discrimination by DIRECTV and are apparently hoping to piggyback off their similarly defective allegations as to AT&T. This is improper. DIRECTV cannot be held liable for the conduct of a separate and distinct entity, particularly where there are no allegations of an agency relationship or that Defendants acted jointly or in concert. See Causey v. Sewell Cadillac-Chevrolet, Inc., F.d, 0 (th Cir. 00) (holding that General Motors is not liable for section 1 violations committed by car dealer where the dealer is an independent business and that GM does not control and has no agency relationship with ). Allowing this improper joinder would unduly prejudice DIRECTV. The Supreme Court has suggested that in order to impose liability on a defendant under 1 for the discriminatory actions of a third party, the plaintiff must demonstrate that there is an agency relationship between the defendant and the third party. Arguello v. Conoco, Inc., 0 F.d 0, 0 (th Cir. 000) (holding no section 1 liability where no agency relationship exists) (citing Gen. Bldg. Contractors Ass n v. Pennsylvania, U.S., ()). DIRECTV should -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

14 not be required to defend statements or business decisions of a separate entity particularly statements which DIRECTV was neither aware of nor endorsed. For example, the alleged statements by an AT&T executive that AT&T and DIRECTV know they have a Black problem, (SAC 1), or that an AT&T executive told Byron Allen that he should not bring up that Black stuff to Mr. Slator because he will go ballistic and terminate the meeting, (id. at ), raise the risk that a jury will improperly paint both Defendants with the same brush. Likewise, Plaintiffs allegation that Dan York stated (while employed at AT&T) that he did not need to meet with ESN because AT&T had a deal in place with Jesse Jackson to provide racial cover has nothing to do with DIRECTV. Yet, it creates a risk that a jury will improperly seek to hold DIRECTV liable for this conduct. While the risk of undue prejudice is high, joinder does not further any principles of fairness, much less provide any judicial efficiencies. See, e.g., Voltage, 01 WL 00, at * ( While there may be the same type of transaction or occurrence and certainly questions of law common to all defendants, the varying time periods, as well as a myriad of issues that may individually impact defendants, at a minimum, suggest a lack of fundamental fairness when joining all defendants into a single action. ) As distinct entities, discovery will have to be taken separately as to AT&T and DIRECTV. Furthermore, as is made clear by the differing factual allegations as to AT&T and DIRECTV, the claims will involve separate witnesses, different evidence, and different legal theories and defenses. BMG Music, 00 WL, at *. Principles of fairness do not favor joinder. As discussed in n., AT&T and DIRECTV each made their own independent business decisions regarding their respective negotiations with ESN when they were separate and distinct entities, as they still are today. -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

15 II. PLAINTIFFS PREMATURE ARGUMENT IS PREMISED ON A MISUNDERSTANDING OF THE STRUCTURE OF THE PROPOSED MERGER AND, AS SUCH, FAILS The SAC attempts to imply, as Plaintiffs have previously argued, that joinder is proper because AT&T and DirecTV are preparing to merge into one company. (SAC.) Not so. DIRECTV and AT&T have structured their proposed transaction as a forward triangular merger. (See Exhibit A at *1- to the concurrently filed Declaration of Duane R. Lyons ( Lyons Dec. ); see also DIRECTV s concurrently filed Request for Judicial Notice ( RJN ).) This is a transaction in which a subsidiary corporation acquires another corporation by using the stock of the subsidiary s parent as consideration for the acquisition. Bercy Indus., Inc. v. C. I. R., 0 F.d, n. (th Cir. 1); see also Giovanini v. United States, F.d, n. (th Cir. ) ( A triangular merger is a statutory merger of a target corporation (the acquired corporation) into an acquiring corporation with the acquiring corporation using its parent s stock. ). Under the proposed transaction, DIRECTV would not merge with AT&T, Inc. Rather, DIRECTV would merge with and into a wholly owned subsidiary of AT&T, Steam Merger Sub LLC, which will be renamed DIRECTV. (See Lyons Dec. Ex. A at *1-; RJN.) The below chart demonstrates the structure of the proposed merger should it occur. -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

16 Accordingly, post-merger there would be two surviving entities: AT&T, Inc. and its wholly owned subsidiary, DIRECTV LLC. (See Lyons Dec., Ex. B at 1- ; RJN.) This distinction is crucial because under black letter law, a parent corporation and its subsidiary are legally distinct entities. Nat l Rural Telecomm. Coop. v. DIRECTV, Inc., F. Supp. d 0, (C.D. Cal. 00); see also Dole Food Co. v. Patrickson, U.S., (00); United States v. Bennett, 1 F.d 1, (th Cir. 0). Thus, even if the proposed merger occurs, there will still be two separate and legally distinct entities and AT&T will not be the real party in interest, as Plaintiffs have previously suggested. Indeed, courts have rejected similar arguments. Argent Classic Convertible Arbitrage Fund L.P. v. Countrywide Fin. Corp., 00 WL 0 (C.D. Cal. Mar., 00), is instructive. While the suit was ongoing, Countrywide completed a forward triangular merger into a subsidiary of Bank of America (BofA) called Red Oak Merger Corporation (Red Oak). In the transaction, Countrywide shareholders received shares of BofA in exchange for their Countrywide shares. Red Oak was then renamed Countrywide Financial Corporation. Id. at *1 n.1. After the merger, the plaintiffs tried joining defendant Bank of America as the parent and successor-in-interest to Countrywide. Id. at *. The court rejected this attempt, reasoning that Countrywide is still a subsidiary acquired in a triangular merger. Id. The court dismissed the claims against Bank of America without leave to amend because Countrywide and Bank of America were separate legal entities. Id. Just as joinder was improper in Argent Classic, it is likewise improper here. If the merger goes forward, AT&T and DIRECTV would still be two separate and legally distinct entities. Therefore, regardless of whether or not the merger actually occurs, there is no basis to attribute the statements made by former AT&T employees to DIRECTV. -- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1

17 III. PURSUANT TO RULE 1, DEFENDANT DIRECTV SHOULD BE DISMISSED FROM THIS ACTION Under Rule 1, the court may at any time, on just terms, add or drop a party that has been improperly joined. Fed. R. Civ. P. 1; see also Bravado, 0 WL 0, at *1 ( Upon a finding of improper joinder, the court may at any time, on just terms, add or drop a party. ) (quoting Fed. R. Civ. P. 1). Indeed, [w]here parties have been inappropriately joined, it is accepted practice under Rule 1 to dismiss all defendants except for the first named in the complaint; this operates as a dismissal of plaintiffs claims against other defendants without prejudice. Armstead, 01 WL 0, at *; see also Heritage, 0 WL 1, at *; BMG Music, 00 WL, at *; Voltage, 01 WL 00, at *. Because it has been improperly joined, DIRECTV requests that the Court dismiss it from this action without prejudice pursuant to Rule 1. Conclusion For all the foregoing reasons, DIRECTV respectfully requests that the Court dismiss DIRECTV from this action. DATE: July, 01 QUINN EMANUEL URQUHART & SULLIVAN, LLP By /s/ Duane R. Lyons Duane R. Lyons Attorneys for DIRECTV -1- DIRECTV S MOTION TO DISMISS PURSUANT TO RULES 0 AND 1