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Wake Up & Ball LLC v. Sony Music Entm't Inc.

United States District Court, D. Arizona

August 13, 2015

Wake Up and Ball LLC, Plaintiff,
Sony Music Entertainment Incorporated, et al., Defendants

Page 945

For Wake Up and Ball LLC, an Arizona limited liability company, Plaintiff: Eric Dell Gere, LEAD ATTORNEY, Jennings Strouss & Salmon PLC, Phoenix, AZ; Michael K Kelly, LEAD ATTORNEY, Jennings Strouss & Salmon PLC - Phoenix - Washington St, Phoenix, AZ.

For Sony Music Entertainment Incorporated, a Delaware Corporation, also known as Louder than Life, Defendant: Eric Michael Fraser, LEAD ATTORNEY, Osborn Maledon PA, Phoenix, AZ; Peter J Anderson, LEAD ATTORNEY, Law Offices of Peter J Anderson APC, Santa Monica, CA.

For Deepfreeze Entertainment LLC, an Arizona limited liability company, Robert Carr, also known as Judge Da Boss, Defendants: Charlene Tarver, LEAD ATTORNEY, Tarver Law Group PLLC, Phoenix, AZ.

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David G. Campbell, United States District Judge.

Defendant Sony Music Entertainment (" Sony" ) has filed a motion to dismiss for lack of personal jurisdiction, improper venue, and failure to state a claim. Doc. 35. Defendants Deepfreeze Entertainment, LLC (" Deepfreeze" ) and Robert Carr have also filed a motion to dismiss for failure to state a claim. Doc. 51. The motions are fully briefed. The Court will deny the motions, but allow jurisdictional discovery so that the personal jurisdiction issues may be addressed in a more complete factual context.[1]

I. Background.

Plaintiff Wake Up and Ball, LLC (" Wake Up" ) is an Arizona limited liability company with its principal place of business in Maricopa County, Arizona. Doc. 25, ¶ 1. Wake Up's business model is based on the discovery, production, and distribution of hip-hop musicians and sound recordings. Id., ¶ 17. Alonzo Harris and Kareem Rogers formed Wake Up on December 9, 2013. Id., ¶ ¶ 16, 31. Felipe Delgado was a former principal member of Wake Up, but left in October 2014. Id., ¶ 16.

According to Wake Up, Delgado approached hip-hop artist Robert Carr (a.k.a. " Judge da Boss" ) after Carr recorded the composition " Judge da Boss, Hell Yeah" in October 2013. Id., ¶ ¶ 18, 20. Delgado allegedly

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discussed with Carr the possibility of Wake Up financing a music video for the Hell Yeah composition. Id., ¶ 20. Wake Up alleges that Carr " verbally indicated" that he would sign a recording contract if Wake Up financed the production of the music video. Id., ¶ 27. Harris and Delgado then met with music video producer Irin Daniels, whom Harris subsequently hired to produce the Hell Yeah video. Id., ¶ ¶ 21-24. Harris provided Daniels with $4,000, and video production began on January 4, 2014. Id., ¶ ¶ 25, 32. On February 16, 2014, Daniels finished production of the video. Id., ¶ 35. Wake Up alleges that Daniels maintained complete creative control of the video, a fact Carr understood and never disputed. Id., ¶ ¶ 28, 29, 39-44. In April 2014, Daniels assigned his copyright in the video to Wake Up. Id., ¶ 50.

Wake Up claims that on February 7, 2014, Harris had his attorney draft a recording contract for Carr to sign, and that throughout February and March the two parties exchanged several drafts and met many times. Id., ¶ ¶ 45, 46. During the negotiations, Harris expressed his desire to own both the lyrics and beat to the Hell Yeah composition, and Carr verbally indicated that he owned the rights to the lyrics and beat and was free to sign a recording contract with Wake Up. Id., ¶ ¶ 47, 48. In March, Harris learned that Marshae Green had obtained the rights to the lyrics and beat of the Hell Yeah composition. Id., ¶ 49. Green later notified Wake Up that Carr had signed with Defendant Deepfreeze, an Arizona company with its principal place of business in Glendale, as his managing company. Id., ¶ ¶ 3, 53. Deepfreeze expressed its desire to purchase rights to the Hell Yeah video from Wake Up, and the two parties negotiated over the sale price but did not reach an agreement. Id., ¶ ¶ 54-56.

On May 8, 2014, Harris learned that Carr had signed with Defendant Sony, a Delaware corporation with its principal place of business in New York. Id., ¶ ¶ 2, 59. On August 9, the Hell Yeah video was published on YouTube, apparently by Delgado on behalf of Wake Up. Id., ¶ 62. Wake Up claims that Sony caused the video to be removed from YouTube the same day. Id., ¶ 63. Wake Up further claims that on September 21, 2014, Sony published the video on several websites and online services, including MTV and iTunes. Id., ¶ 64. Wake Up applied for and obtained a copyright registration for the Hell Yeah video effective September 29, 2014. Id., ¶ 68. It claims that it provided notice to Sony of its infringement of Wake Up's copyright, but that Sony disregarded the notification. Id., ¶ ¶ 14, 15. The video has remained publically available ever since. Id., ¶ 64.

Wake Up filed suit against Sony, Deepfreeze, and Robert Carr. Wake Up seeks relief for copyright infringement against Sony and Deepfreeze, and seeks declaratory judgment as to its copyright ownership. Additionally, Wake Up has pled a claim for fraud and misrepresentation against Carr. Id., ¶ ¶ 80-88.

II. Sony's Motion to Dismiss.

A. Personal Jurisdiction.

1. Legal Standard.

" Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons." Daimler AG v. Bauman, 134 S.Ct. 746, 753, 187 L.Ed.2d 624 (2014). Arizona has authorized its courts to exercise jurisdiction to the maximum extent permitted by the Due Process Clause of the Constitution. See Ariz. R. Civ. P. 4.2(a). Under the Due Process Clause, a federal district court may exercise jurisdiction over a person who is not physically present within the territorial jurisdiction of the court. Walden v. Fiore, 134 S.Ct. 1115, 1121,

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188 L.Ed.2d 12 (2014). The nonresident generally must have certain minimum contacts with the forum so that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

In this circuit, specific jurisdiction exists only if: (1) the defendant purposefully availed himself of the privileges of conducting activities in the forum, thereby invoking the benefits and protections of its laws, or purposely directed conduct at the forum that had effects in the forum; (2) the claim arises out of the defendant's forum-related activities; and (3) the exercise of jurisdiction comports with fair play and substantial justice -- in other words, it is reasonable. In re W. States Wholesale Natural Gas Antitrust Litig., 715 F.3d 716, 741-42 (9th Cir. 2013). In tort cases, the inquiry under the first part is whether a defendant purposefully directed his activities at the forum state. Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006). This requirement, sometimes referred to as the " effects test," " requires that the defendant allegedly have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 803 (9th Cir. 2004) (quoting Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002) (citing Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984))).

The effects test does not " 'stand for the broad proposition that a foreign act with foreseeable effects in the forum state always gives rise to specific jurisdiction.'" Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 675 (9th Cir. 2012) (quoting Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1087 (9th Cir. 2000)). Nor does the effects test mean that specific jurisdiction may be based solely on a defendant's knowledge that the subject of his tortious activity resides in a particular state. See Walden, 134 S.Ct. at 1125. The Court must always focus on the " 'relationship among the defendant, the forum, and the litigation' [which] is the essential foundation of in personam jurisdiction." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977)). " The proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant's conduct connects him to the forum in a meaningful way." Walden, 134 S.Ct. at 1125.

" When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant." Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). " Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). " [When] the pleadings and other submitted materials raise issues of credibility or disputed questions of fact with regard to jurisdiction, the district court has the discretion to take evidence at a preliminary hearing in order to resolve the contested issues." Data Disc, Inc. v. Sys. Tech. Assocs., Inc, 557 F.2d 1280, 1285 (9th Cir. 1977). ...

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