JED S. RAKOFF, District Judge.
This Memorandum Order (1) sets forth the reasons for the Court's May 19, 2010, 2010 WL 2075927, ruling granting defendants' motion to dismiss for lack of personal jurisdiction over Persian Broadcast Service Global, Inc. and (2) denies defendant Amir Shadjareh's motion for summary judgment dismissing the claim against him for copyright infringement insofar as that claim alleges that he was vicariously liable for such infringement, but otherwise grants his motion.
By way of background, plaintiffs Tanaz Eshaghian and Forties B LLC directed and produced a film about transsexuals and homosexuality in Iran entitled "Be Like Others." Plaintiffs' original complaint, filed on October 7, 2009, alleged that defendants America West Satellite, Inc. ("America West") and Amir Shadjareh, as well as other unnamed "John Doe" defendants, broadcast without authorization an improperly copied and mutilated version of this film via satellite television stations in May 2008, thus violating the Copyright Act and the Lanham Act, tortiously interfering with plaintiffs' contractual relationships, and intentionally inflicting emotional distress upon Eshaghian. On February 19, 2010, plaintiffs filed an amended complaint adding causes of action identical to those raised in the original complaint against defendants Persian Broadcast Service Global, Inc. ("PBSG"), Fariborz Abbassi, and Azadi TV Inc.
On April 6, 2010, Shadjareh, America West, and PBSG moved to dismiss the amended complaint for failure to state a claim and for lack of personal jurisdiction over PBSG. By a Memorandum Order dated May 19, 2010, the Court granted these motions in part and denied them in part, dismissing all claims against the moving defendants with the exception of the copyright infringement and mutilation claims (Counts I and II) against defendants Shadjareh and America West, with opinion to follow on the dismissal of PBSG for lack of personal jurisdiction.
On June 8, 2010, plaintiffs filed a purported notice of voluntary dismissal without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), which, following briefing, was converted into a motion. By a Memorandum Order dated June 17, 2010, the Court denied the motion and vacated the purported dismissal as to defendants Shadjareh and America West, but granted the motion as to defendants Abbassi and Azadi TV and dismissed them without prejudice.
Turning first to the dismissal of PBSG for lack of personal jurisdiction, the relevant facts and allegations are as follows: Plaintiffs allege in their amended complaint that PBSG is a California corporation with a principal place of business in California. Amended Compl. ¶ 8. PBSG, along with America West, used the fictitious name "Pars TV" to refer to a satellite television station that "broadcast[ ] to millions of viewers worldwide," including viewers in New York and Iran. Id. ¶¶ 9-10. The amended complaint further alleges that Shadjareh is the sole and controlling principal of America West, PBSG, and Pars TV. Id. ¶ 11. The amended complaint, however, contains no specific allegations regarding the basis of personal jurisdiction over any of the defendants.
Defendants moved to dismiss the amended complaint for lack of personal jurisdiction over PBSG on the ground that PBSG had no connection to New York
In a post-argument letter brief May 13, 2010, the plaintiffs submitted additional evidence in support of a finding of jurisdiction:
Based on this record, the plaintiffs asserted that the Court has personal jurisdiction over PBSG under two subsections of New York's long-arm statute relating to specific personal jurisdiction. They argued first that pursuant to New York CPLR § 302(a)(1), PBSG "transacts . . . business within the state," and second, that pursuant to CPLR § 302(a)(3)(ii), PBSG "commit[ed] a tortious act without the state causing injury to person or property within the state," and that PBSG "expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce." The Court holds that plaintiffs have failed to make prima facie showing of jurisdiction under either provision through their pleadings and affidavits, and have certainly not adduced evidence that, if credited by a trier of fact, would establish jurisdiction.
Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d Cir.2007) (alterations in original) (citations omitted). It is apparent that the evidence plaintiffs here offer of purposeful contact by PBSG with New York is far too speculative and inferential to satisfy this test.
Next, as to the evidence of Pars TV's advertising, it is unclear from the record whether any of PARS TV's advertisers are based in New York (even if at least one of these advertisers has one office located in New York). The fact that the advertisements broadcast on Pars TV are viewable in New York, as they are everywhere, does not, without more, establish personal jurisdiction. Cf. Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9th Cir.1997) ("[S]o far as we are aware, no court has ever held that an Internet advertisement alone is sufficient to subject the advertiser to jurisdiction in the plaintiff's home state."); Citigroup, Inc. v. City Holding Co., 97 F.Supp.2d 549, 565 (S.D.N.Y.2000) (noting that the use of a "passive" website "has been analogized to an advertisement in a nationally-available magazine or newspaper, and does not without more justify the exercise of jurisdiction over the defendant"). Even the sale of advertisements to New York-based companies has been held to be insufficient to establish jurisdiction absent a showing that the defendants intentionally targeted the New York market or "touted their ability to reach the New York market to anyone." Royalty Network Inc. v. Dishant.com, LLC, 638 F.Supp.2d 410, 422 (S.D.N.Y.2009); see also Yash Raj Films (USA) Inc. v. Dishant.com LLC, 2009 WL 4891764, at *6 (E.D.N.Y. Dec. 15, 2009) ("Nothing in the record ... here indicates that defendants had targeted New York-based advertisers or touted their ability to reach the New York market."); cf. Capitol Records, Inc. v. VideoEgg, Inc., 611 F.Supp.2d 349, 360 (S.D.N.Y.2009) (finding that defendant transacted business in New York where plaintiffs introduced specific evidence that defendant's employees "touted the company's large New York user base to potential advertisers and responded directly to advertising inquiries from New York-based companies."). For these reasons, the mere facts that PBSG may have sold advertisements to at least one company with a New York office location and that some Pars TV advertisers may have sold their products to New York consumers are insufficient to establish that PBSG "transacted business" in New York.
The remainder of the jurisdictional facts adduced by plaintiffs are similarly unavailing. The fact that earlier this year PBSG advertised a play that was performed in New York (among other places) simply does not demonstrate a purposeful targeting of a New York audience. Nor does the allegation that Pars TV indiscriminately solicited donations from all its viewers, including its viewers in New York, make the requisite showing. Cf. Yash Raj Films, 2009 WL 4891764, at *5 ("[T]he mere availability of a site to a putative customer in New York does not automatically constitute the `purposeful availment' required for a `transaction of business' in this state . . . ."). And even if any of these utterly incidental contacts (or the more purposeful effort in September 2009 to organize a demonstration outside the UN), many of which took place years after the
For related reasons, there is no jurisdiction over PBSG under CPLR § 302(a)(3)(ii). This subsection requires plaintiffs to show, among other things, that the defendant "expects or should reasonably expect the act to have consequences in the state," which in turn requires showing a "purposeful availment of the benefits of the laws of New York such that the defendant may reasonably anticipate being haled into New York court." Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 241 (2d Cir.1999); see also id. ("[I]t is not enough that a defendant foresaw the possibility that its product would find its way here; foreseeability must be coupled with evidence of a purposeful New York affiliation, for example, a discernible effort to directly or indirectly serve the New York market." (internal quotation marks omitted)). Applying these principles, another court in this District has found that jurisdiction under this prong was lacking when plaintiffs failed to show "tangible manifestations of defendants' intent to target New York nor concrete facts known to defendants that would lead them to foresee being sued in the Southern District of New York," and when there was "nothing in the record to indicate defendants had knowledge that a New York company held copyright interests in any of the [intellectual property] at issue in th[e] action." Royalty Network, 638 F.Supp.2d at 424. Here too, the vague, speculative, and indirect connections between PBSG's broadcasting activities and the forum state that the plaintiffs rely on fall short of demonstrating that PBSG reasonably should have anticipated being haled into a New York court, and for that reason alone there can be no jurisdiction over PBSG under § 302(a)(3)(ii).
Turning next to the pending aspects of defendants' summary judgment motion, the Court reserved decision only on the issue of whether Shadjareh is liable for copyright infringement in his capacity as principal and sole officer of PBSG. For the following reasons, the Court finds that there is a genuine issue of material fact in this regard, but only as to whether Shadjareh is vicariously liable for the alleged infringement, and accordingly denies the motion as to that theory of liability alone.
The facts relevant to this aspect of the summary judgment motion, which relate only to Shadjareh's role in the alleged infringement,
Decl. of Matthew Kane, 6/11/10, Ex. K (Shadjareh Dep., 4/29/10), at 10-11. Shadjareh also testified that Pars TV carries advertising and that he employs at least ten workers at Pars TV. Id. at 9, 11.
In resisting Shadjareh's motion for summary judgment on the copyright infringement
This leaves the theory of vicarious infringement. "A defendant is liable for vicarious copyright infringement if it `profit[s] from direct infringement while declining to exercise a right to stop or limit it.'" Arista Records LLC v. Lime Group LLC, 715 F.Supp.2d 481, 518, 2010 WL 2291485, at *24 (S.D.N.Y. May 25, 2010) (alteration in original) (quoting MGM Studios Inc. v. Grokster, 545 U.S. 913, 930, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005)). To prove vicarious liability for copyright infringement, the plaintiff must show that the defendant had a "right and ability to supervise [that] coalesce[d] with an obvious and direct financial interest in the exploitation of copyrighted materials." Softel, Inc. v. Dragon Med. & Scientific Commc'ns, Inc., 118 F.3d 955, 971 (2d Cir.1997) (alterations in original) (internal quotation marks omitted).
Based on Shadjareh's status as PBSG's sole owner and controlling principal of PBSG, as well as his deposition testimony that his programmers select shows to broadcast under his supervision, it cannot be disputed on the present record that plaintiffs have shown a "right and ability to supervise."
The element of "direct financial interest" presents a somewhat closer question. On the one hand, a number of cases have imposed such liability where, as here, the defendant is the controlling principal of a corporation that committed infringing acts. See, e.g., Design Tex Group v. U.S. Vinyl Mfg. Corp., 2005 WL 2063819, at *4 n. 6, 2005 U.S. Dist. LEXIS 18276, at *13 n. 6 (S.D.N.Y. Aug. 24, 2005) ("There can be no serious question that [a defendant who was president and sole owner (with his wife) of a small company] had a financial interest in the infringing activity."); U.S. Media Corp. v. Edde Entm't Corp., 1998 WL 401532, at *7 (S.D.N.Y. July 17, 1998) ("It is . . . apparent that [a defendant who was a 50% shareholder and in charge of determining film purchases] had the `right and ability to supervise' and, as the dominant shareholder, had a direct financial interest in the company's `exploitation of copyrighted materials.'"); Peer Int'l Corp. v. Luna Records, Inc., 887 F.Supp. 560, 565 (S.D.N.Y.1995) (imposing vicarious liability on defendant who was corporation's sole shareholder and director); see also Sw. Bell Tel. Co. v. Nationwide Indep. Directory Serv., Inc., 371 F.Supp. 900, 907 (D.Ark. 1974) ("Officers or directors of a corporation guilty of infringement are individually liable if personally participating in the acts constituting infringement or if they are sole shareholders." (emphasis added)). But Shadjareh contends that an inference of direct financial benefit cannot be drawn
This distinction misses the point of vicarious liability for copyright infringement, which is predicated on "the party found strictly liable [being] in a position to police the conduct of the `primary' infringer." Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 309 (2d Cir.1963). Thus, in the seminal case of Shapiro, Bernstein & Co., the Second Circuit observed that courts had historically limited the liability of remote parties such as the "landlord [who] lets his premises without knowledge of the impending infringement by his tenant, exercises no supervision over him, charges a fixed rental and receives no other benefit from the infringement," but had held "the dance hall proprietor liable for the infringement of copyright resulting from the performance of a musical composition by a band or orchestra whose activities provide the proprietor with a source of customers and enhanced income." Id. at 307. From these cases, the Court of Appeals derived the principle that vicarious liability is appropriate when the connection between the defendant and the direct infringer resembles an "employer-employee" relationship rather than a "landlord-tenant" relationship. Id. at 308. Other courts have observed that vicarious liability has been imposed "on the operator of a business where infringing performances enhance the attractiveness of the venue to potential customers," Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 263 (9th Cir.1996), or as long as "there is a causal relationship between the infringing activity and any financial benefit a defendant reaps, regardless of how substantial the benefit is in proportion to a defendant's overall profits," Ellison v. Robertson, 357 F.3d 1072, 1079 (9th Cir.2004). For these reasons, the infringing product need not be sold directly to the market for the supervisor to be vicariously liable, as long as the causal relationship between the infringing conduct and the defendant's financial benefit is sufficiently unattenuated.
The record here does not suggest that Shadjareh is operating PBSG as a purely eleemosynary enterprise. Rather, the available evidence indicates that he intends to run a profitable business and that his sources of revenue, among others, are advertising and the solicitation of donations. The obvious inference is that Shadjareh supervises his employees' programming selections with the goal of maximizing revenues in mind. Thus, the only reason for Pars TV to have shown "Be Like Others," under Shadjareh's supervision, was to "provide the proprietor with a source of customers and enhanced income," or to "enhance the attractiveness of the [channel] to potential [advertisers]." There is no person who will benefit more directly than Shadjareh from any increases in revenues attributable to the broadcast of infringing content, and there is no person in a better position to "police" the alleged primary infringing conduct. Accordingly, plaintiffs have at the very least created triable issues on Shadjareh's vicarious liability for the alleged infringement.
In addition, the Court hereby dismisses the complaint in its entirety against defendants "XYZ Company" and "John Doe" without prejudice. See, e.g., Coward v. Town & Vill. of Harrison, 665 F.Supp.2d 281, 300 (S.D.N.Y.2009) ("Where a plaintiff `has had ample time to identify' a John Doe defendant but gives `no indication that he has made any effort to discover the [defendant's] name,' . . . the plaintiff `simply cannot continue to maintain a suit against' the John Doe defendant.").
The parties are directed to jointly call Chambers at noon on July 28, 2010 to set a trial date for the one remaining claim (vicarious copyright infringement against Shadjareh).
The Clerk of the Court is directed to close document number 25 on the docket of this case.
SO ORDERED.
Furthermore, New York law is presently unsettled on the question of when copyright and trademark torts involving out-of-state infringement cause injury to property within the forum state, which relates to another element essential to the exercise of jurisdiction under CPLR § 302(a)(3)(ii). See Penguin Group (USA) Inc. v. Am. Buddha, 609 F.3d 30 (2d Cir.2010) (certifying to the New York Court of Appeals the following question: "In copyright infringement cases, is the situs of injury for purposes of determining long-arm jurisdiction under N.Y. C.P.L.R. § 302(a)(3)(ii) the location of the infringing action or the residence or location of the principal place of business of the copyright holder?").
