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AMA Multimedia LLC v. Sagan Limited

United States District Court, D. Arizona

October 24, 2018

AMA Multimedia LLC, a Nevada limited liability company, Plaintiff,
v.
Sagan Limited, a Republic of Seychelles company, Cyberweb Ltd., a Barbados company, and Netmedia Services Inc., a Canadian company, individually and d/b/a Porn.com; GLP 5, Inc., a Michigan company d/b/a Trafficforce.com; and David Koonar, an individual, Defendants.

          ORDER

          David G. Campbell Senior United States District Judge.

         Before the Court is Defendants' renewed motion to dismiss based on forum non conveniens. Doc. 154. The motion is fully briefed, and oral argument has not been requested. For the reasons stated below, the motion will be granted.

         I. Background.

         Plaintiff AMA Multimedia, LLC, a producer of pornographic material, asserts copyright infringement claims against several entities and one individual associated with Porn.com. Doc. 16. Porn.com is a video streaming website that generates revenue through paid memberships and advertising space. Id. ¶¶ 48-49, 57. AMA alleges that Defendants Sagan Limited, Cyberweb Ltd., Netmedia Services Inc., and David Koonar are owners or operators of Porn.com. Id. ¶¶ 2-8, 46. AMA further alleges that these Defendants own and operate Defendant GLP 5, Inc., an advertising broker doing business as Trafficforce.com. Id. ¶¶ 7, 47, 94-95.

         AMA distributes its pornographic material through DVD sales and various websites. Id. ¶ 28. Users of AMA websites must be paid members to view the material. Id. ¶¶ 29-30. AMA provides sample promotional videos to advertising affiliates and licenses certain material to other pornographic websites. Id. ¶ 30. Beginning in 2007, pursuant to an AMA affiliate program agreement, AMA provided certain promotional videos for Defendants to display on Porn.com for the purpose of directing traffic to AMA's paid membership sites. Id. ¶ 63; see Doc. 157-1 at 19.

         In November 2015, AMA learned that Porn.com had displayed 64 of AMA's copyrighted works, none of which was a promotional video provided by AMA pursuant to the affiliate program agreement. Doc. 16 ¶¶ 63, 78; see Doc. 1-1 at 1-9. AMA asserts that the works were uploaded onto Porn.com by Defendants, not third-party users as Defendants claim. Doc. 16 ¶¶ 78-92. AMA further asserts that in March 2016, other copyrighted works were displayed on Trafficforce advertising banners on Porn.com. Id. ¶ 98; see Doc. 1-1 at 31-34. Claiming that the works were displayed on Porn.com without its approval or consent, AMA asserts various copyright infringement claims against all Defendants. Doc. 16 ¶¶ 82, 105-58.

         Defendants contend that they had the right to display the allegedly infringing material based on a licensing agreement between AMA and one of Defendants' affiliates, GIM Corporation. This agreement - formally, the Content Partner Revenue Sharing Agreement (“CPRA”) - was entered into in September 2012 when AMA joined GIM's Paidperview.com revenue sharing program. Doc. 27-3 at 25-34. The CPRA granted GIM a license to use content provided by AMA on websites whose advertisements are controlled by Trafficforce.com. Id. at 25 (CPRA §§ B, 1.1).

         Defendants moved to dismiss or stay this case based in part on the CPRA's forum selection clause, which provides that “[a]ny legal action arising out of or relating to [the CPRA] must be instituted in a court located in Barbados[.]” Id. at 30 (CPRA § 10.5); see Docs. 27-1 at 18, 42-1 at 18, 49-1 at 14-17, 70-1 at 11-17. The Court denied the stay request and deferred ruling on motions to dismiss pending jurisdictional discovery. Doc. 64. Following the discovery and additional briefing, the Court granted Defendants' motions to dismiss on the basis of the forum selection clause. Doc. 126. The Court found that the clause (1) applies to AMA's copyright infringement claims because the dispute arises out of or relates to the CPRA, (2) is valid and enforceable, and (3) can be invoked by Koonar as an officer of GIM and by Cyberweb, Netmedia, and Sagan because they are affiliates of GIM which were assigned rights under the CPRA. Id. at 5-17. AMA appealed and the Ninth Circuit reversed, finding that the record did not support an assignment of GIM's rights under the CPRA. Doc. 147-1 at 4. The case was remanded for further proceedings, including consideration of Defendants' alternative arguments for enforcing the forum selection clause. Id. at 5.[1]

         At the Court's direction, the parties filed supplemental briefs. Docs. 154, 157, 161. Defendants argue that they have standing to enforce the forum selection clause as agents of GIM, third-party beneficiaries of the CPRA, implied licensees and assignees of rights under the CPRA, and closely related parties under Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509 (9th Cir. 1988). Doc. 154 at 10-20. AMA contends that these arguments lack merit because Defendants' infringing conduct and operation of Porn.com have nothing to do with the CPRA or GIM. Doc. 157 at 9-21.

         The Court previously found that the CPRA's forum selection clause applies to AMA's copyright claims and otherwise is valid and enforceable. Doc. 126 at 5-11, 14-17. These findings were not disturbed on appeal. See Doc. 147-1. Having considered the supplement briefs and relevant case law, the Court now finds that Defendants have standing to enforce the CPRA's forum selection clause because they are closely related to the contractual relationship between AMA and GIM. The Court therefore will grant the renewed motion to dismiss. Given this ruling, the Court need not consider Defendants' other arguments for enforcing the forum selection clause.

         II. Legal Standard.

         Interpretation and enforcement of forum selection clauses are procedural issues to be decided under federal law. See Manetti-Farrow, 858 F.2d at 513; TAAG Linhas Aereas de Angola v. Transamerica Airlines, Inc., 915 F.2d 1351, 1353 (9th Cir. 1990). The Supreme Court has instructed that such clauses are presumptively valid and should not be set aside unless the party challenging the clause “clearly show[s] that enforcement would be unreasonable and unjust, or that the clause [is] invalid for reasons such as fraud or overreaching.” M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). Courts decline to enforce forum selection clauses “[o]nly under extraordinary circumstances unrelated to the convenience of the parties[.]” Atl. Marine Constr. Co. v. U.S. Dist. Ct. for the W. Dist. of Tex., 571 U.S. 49, 61 (2013).

         A motion to dismiss based on a forum selection clause is treated as an improper venue motion under Federal Rule of Civil Procedure 12(b)(3). See Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). In ruling on a Rule 12(b)(3) motion, the pleadings are not accepted as true and the court may consider other evidence. Id. The court must resolve all factual conflicts and draw all reasonable inferences in favor of the non-moving party. See Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133, 1138 (9th Cir. 2004); Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 455 (9th Cir. 2007).

         III. ...


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