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AMA Multimedia LLC v. Sagan Ltd.

United States District Court, D. Arizona

October 13, 2016

AMA Multimedia LLC, Plaintiff,
v.
Sagan Limited, et al., Defendants.

          ORDER

          DAVID G. CAMPBELL UNITED STATES DISTRICT JUDGE

         Plaintiff AMA Multimedia, LLC, a producer of pornographic material, asserts copyright infringement claims against several entities and one individual associated with the website Porn.com: Sagan, Limited; Cyberweb, LTD; Netmedia Services, Inc.; GLP 5, Inc.; and David Koonar. Defendant Sagan, a Seychelles corporation, moves to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), or, in the alternative, to stay these proceedings pending resolution of an action currently before the Supreme Court of Barbados. Doc. 42. The parties' request for oral argument is denied because the issues have been fully briefed and oral argument will not aid in the Court's decision. See Fed. R. Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). The Court will deny both the stay request and the motion to dismiss.

         I. Background.

         Porn.com is a video streaming website that generates revenue through its Content Partnership Program and advertising banners. Doc. 16, ¶¶ 56-57. AMA asserts Defendants Sagan, Cyberweb, Netmedia, and David Koonar are each owners and/or operators of Porn.com and GLP. Doc. 16, ¶¶ 2-3, 46-47. Defendants have claimed that Cyberweb is the owner/operator of Porn.com (Doc. 27-3 at 3, ¶ 15), but Sagan is listed as an owner/operator by both Porn.com's terms of service and a designation form filed with the U.S. Copyright Office (Doc. 51-1 at 6-9). Sagan does not contest the validity of these documents, and states only that “Sagan does not own any domain names or websites or contact with any entity located in Arizona to provide services, including hosting and the like.” Doc. 42-1 at 12; Doc. 60 at 8.

         In September 2012, AMA joined Porn.com's Content Partnership Program by entering into a content partner revenue sharing agreement (“CPRA”) with GIM Corp. (“GIM”). Doc. 33 at 6; see also Doc. 52 at 2 (incorporating Doc. 33 by reference). AMA agreed to the CPRA by completing an automated process at Paidperview.com. Id. There was no direct contact between AMA and any of the Defendants. Id. The CPRA granted GIM a license to use content provided by AMA on websites whose advertisements are controlled by Traffic Force. Id. The CPRA dictated the manner and form in which AMA would provide content, and AMA granted GIM a license only for content provided under the CPRA. Id.

         In November 2015, AMA became aware that Porn.com had displayed 64 of AMA's copyright registered works over 110 separate Porn.com affiliated URLs. Doc. 16 at ¶ 78. In December 2015, AMA provided Defendants' counsel with a draft complaint and settlement offer regarding the alleged infringement. Doc. 33 at 2. According to AMA, over the next four months “Defendants provided a string of delays and misrepresentations about the matters and settlement negotiations.” Id. In April 2016, AMA presented Defendants with an amended complaint and a “deadline to choose between accepting a settlement offer or hav[ing] the case filed in U.S. District Court, for the District of Arizona.” Id. at 3. Defendants requested an extension until April 28, 2016 to consider the settlement offer, and AMA agreed. Id.

         On April 27, 2016, Cyberweb, Netmedia, Sagan, GLP, GIM, and David Koonar (collectively, “Porn.com Entities”) filed a complaint against AMA and Adam Silverman in the Supreme Court of Barbados. Doc. 27-3 at 17-23. The Porn.com Entities sought (1) injunctive relief to restrain anticipatory breach of the CPRA, (2) a declaration that any disputes related to the CPRA are governed by Barbados law and must be adjudicated in Barbados, (3) a declaration that the Porn.com Entities are entitled to rely on their rights under the CPRA, (4) a declaration that the Porn.com Entities are entitled to publicize and distribute materials provided to them by AMA and Silverman, and (5) relief for prior breaches of the CPRA, including damages. Id. at 17-18.

         AMA filed this action the next day, April 28, 2016. Defendant Sagan now moves to dismiss the claims against it for lack of personal jurisdiction, or, in the alternative, to stay these proceedings pending completion of the Barbados action. Docs. 42, 61, 62.

         II. Personal Jurisdiction.

         A. Legal Standard.

         “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). “The plaintiff cannot ‘simply rest on the bare allegations of its complaint, ' but uncontroverted allegations in the complaint must be taken as true.” Id. (quoting Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). The Court may not assume the truth of allegations in a pleading that are contradicted by an affidavit, but factual disputes are resolved in Plaintiff's favor. Id.

         B. Personal Jurisdiction over Sagan.

         AMA argues that Sagan is subject to personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2). Doc. 51 at 4-5. Rule 4(k)(2) provides that serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if (1) the claim arises under federal law, (2) “the defendant is not subject to jurisdiction in any state's courts of general jurisdiction, ” and (3) exercising jurisdiction is consistent with the United States Constitution. Fed.R.Civ.P. 4(k)(2).

         The first factor is satisfied in this case because AMA asserts claims of copyright infringement under federal law. The second factor is satisfied if the defendant “does not concede to jurisdiction in another state.” Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 461 (9th Cir. 2007) (citation omitted). Sagan does not make this concession.

         Analysis under the third factor - the due process analysis - “is nearly identical to traditional personal jurisdiction analysis with one significant difference: rather than considering contacts between the [defendant] and the forum state, we consider contacts with the nation as a whole.” Id. at 462. The question, then, is whether Sagan has sufficient minimum contacts with the United States so that maintenance of the suit here does not offend traditional notions of fair play and substantial justice. Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945). A court must consider whether (1) the defendant purposely directed conduct at 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. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1227-28 (9th Cir. 2011).[1]

         Sagan asserts that it has no contacts of any kind with either the United States or Arizona. Doc. 42-1 at 5. AMA alleges in its complaint, however, that Sagan is an owner/operator of Porn.com, and AMA provides documentation in support of its claim. Doc. 16, ¶¶ 2-3; Doc. 51-1 at 6-9 (U.S. Copyright Office Designation form and Porn.com terms of service showing Sagan as the owner/operator of Porn.com). In its reply, Sagan does not address, much less contest, AMA's allegation or supporting documentation. See Doc. 60. Accordingly, the Court will accept as true that Sagan is an owner/operator of Porn.com. Mavrix, 647 ...


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