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Hydentra HLP Int. Limited v. Sagan Ltd.

United States District Court, D. Arizona

July 17, 2017

Hydentra HLP Int. Limited and Hydentra LP HLP General Partner Incorporated, Plaintiffs,
Sagan Limited, MXN Limited, Netmedia Services Incorporated, and David Koonar, Defendants.


          David G. Campbell United States District Judge.

         Plaintiffs Hydentra HLP Int. Ltd. and Hydentra LP HLP General Partner Incorporated (collectively “Plaintiffs”) are companies organized under the laws of the Republic of Cyprus and the producers of pornographic material. In this case they assert claims for copyright infringement against several foreign entities and one individual associated with the website Defendants Sagan Limited; MXN Limited (“Cyberweb”); Netmedia Services, Inc.; and David Koonar are residents of Seychelles, Barbados, Canada, and Canada respectively. Defendants have filed three independent motions to dismiss under Rule 12(b)(2) for lack of personal jurisdiction. Docs. 35, 36, 37. Additionally, Defendants Netmedia and Koonar move to dismiss Plaintiffs' claims under Rule 12(b)(6). Docs. 36, 37. The motions are fully briefed. Docs. 35, 36, 37, 38, 44, 45, 53, 60, 61. Defendants' 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). For the reasons that follow, the Court will grant Defendants' motions to dismiss.

         I. Background.

         The following facts are taken from Plaintiffs' complaint and are assumed true for the purposes of this motion.

         The website is a video streaming website that generates revenue through premium memberships and advertising. Doc. 1, ¶¶ 39-40. Defendants Sagan, Cyberweb, Netmedia, and David Koonar are each owners and/or operators of Id., ¶ 38.[1]
 receives a significant portion of its web traffic from the United States. Id., ¶ 47 (Plaintiffs allege 63.1 million visits per month, 21.43% of which are from the United States). Defendants sell advertising space on in several forms, including banners and links in close proximity to videos, often targeted to the user's location. Id. ¶ 48. Defendants advertise that “HD Premium members receive ‘Stunning High Definition Video, ' ‘Browse 100% Ad-Free, ' and can ‘Download videos, DVDs, and pictures to keep.' In addition, Defendants advertise that Premium Members get access to the ‘best sites and studios in HD.'” Id., ¶ 52.

         Plaintiffs assert that Defendants engage in a practice called “scraping, ” by which entities “aggregate on their own, user information and videos from other websites, then create a façade that those users exist on their own website and upload[] the videos to [their] websites directly.” Id., ¶¶ 58-59, 69. Scraping “allows a site to provide more high quality video content to their end users while maintaining the appearance that an army of third parties uploaded a vast library of professionally shot content in a concentrated period.” Id., ¶ 59.

         In November 2015, displayed four of Plaintiffs' copyright registered works over four separate URLs. Id., ¶ 65. The infringing videos were purported by Defendants to have been uploaded by third party internet users. Id. “Three of Plaintiffs' videos posted on are accompanied by a user name represented to be the uploader” of the video, but a search on for these user names resulted in a report that “there is ‘No Such Member' or user on” Id. Plaintiffs contend that this report supports the allegation that Defendants engage in “scraping” and that Defendants, not a purported third party, are liable for the infringing acts. Id., ¶¶ 60-74, 90-92. Plaintiffs allege four counts: (1) copyright infringement, (2) contributory copyright infringement, (3) vicarious copyright infringement, and (4) inducement of copyright infringement. Id., ¶¶ 75-128.

         II. Personal jurisdiction.

         “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.

         Plaintiffs assert that each Defendant is subject to personal jurisdiction pursuant to Rule 4(k)(2). Doc. 1, ¶¶ 1-24; Docs. 38 at 5, 44 at 6, 45 at 11. Rule 4(k)(2) provides that a court may exercise personal jurisdiction over a defendant if (1) the claim arises under federal law, (2) the defendant is not subject to jurisdiction in any state court of general jurisdiction, and (3) exercising jurisdiction is consistent with the United States Constitution. Fed.R.Civ.P. 4(k)(2).

         Defendants concede that the first and second factors are satisfied. See, e.g., Doc. 36 at 6. The first factor is satisfied because Plaintiffs assert claims of copyright infringement under federal law. The second factor is satisfied because no Defendant “concede[s] to jurisdiction in another state.” Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 461 (9th Cir. 2007) (citation omitted). Thus, the Court need only assess the third factor. Id. at 462.

         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 Defendants have 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, 647 F.3d at 1227-28.

         In a previous case before this Court, involving the same plaintiffs' counsel and Defendants, the Court conducted this Rule 4(k)(2) jurisdictional analysis as to Defendant Sagan. AMA Multimedia LLC v. Sagan Ltd., No. CV-16-01269-PHX-DGC, 2016 WL 5946051, at *3-8 (D. Ariz. Oct. 13, 2016) (“AMA”). The Court found that Sagan engaged in purposeful direction at the United States, and that the Court's exercise of personal jurisdiction over Sagan was reasonable. Id. In their motion, Defendants directly address the AMA decision, and contend that in this instance, “different facts, additional facts, and a different Plaintiff compel a different result.” Doc. 35 at 14. Plaintiffs argue ...

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