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Metabyte v. Technicolor S.A.

In a case which seems destined for the pages of a civil procedure casebook, Metabyte, Inc., appeals from the trial court’s judgment of dismissal and order sustaining Technicolor’s demurrer without leave to amend. This 2021 action represents Metabyte’s fourth attempt to hold Technicolor liable for Technicolor’s allegedly improper auction of a patent portfolio in 2009.1 The first two actions were brought in France, where Technicolor is headquartered. Metabyte brought a proceeding under Article 145 of the French Code of Civil Procedure (Article 145 proceeding), and then filed a criminal “plainte” against Technicolor. After the French courts ruled they lacked jurisdiction in the criminal action, Metabyte brought an action in United States District Court in California alleging a federal RICO claim and several state law causes of action. After the district court ruled that equitable tolling did not apply to its RICO claim as a matter of federal law, Metabyte dismissed the federal action and brought its state law claims in Los Angeles County Superior Court. The trial court granted Technicolor’s demurrer without leave to amend, finding that Metabyte’s Article 145 proceeding in France did not equitably toll the statute of limitations, and so Megabyte’s action was barred by the statute of limitations.

Metabyte contends the trial court erred in finding equitable estoppel applies only where a plaintiff invokes remedies designed to lessen the extent of a plaintiff’s injuries or damages, with the result that Article 145 proceeding in France could not support equitable tolling because it did not provide such a remedy. Technicolor defends the trial court’s ruling but devotes more of its energies to its contentions that even if equitable tolling did apply, the order should be affirmed by applying the doctrines of issue preclusion and judicial estoppel. 

We affirm the trial court’s ruling sustaining the demurrer on the alternate ground that Metabyte failed to adequately plead facts showing that its decision to proceed in France was objectively reasonable and subjectively in good faith. However, we grant Metabyte leave to amend. We therefore reverse the judgment and remand for further proceedings.

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