69 F. Supp. 3d 342
S.D.N.Y.2014Background
- Plaintiffs (photo licensors BWP Media USA Inc. d/b/a Pacific Coast News and National Photo Group, LLC) allege Defendants operate a large “Fan Sites Network” of celebrity websites that display Plaintiffs’ photographs without authorization and monetize the sites with advertising.
- Defendants include six companies and two individuals; some (the “Foreign Defendants”) are alleged to be based outside New York and moved to dismiss for lack of personal jurisdiction.
- Plaintiffs allege Defendants own the sites, recruit unpaid “dummy webmasters” to update content under Defendants’ direction, monitor sites, can remove content, and materially induce and profit from infringement.
- Claims asserted: direct, contributory, and vicarious copyright infringement; DMCA-related defenses; and substantive and conspiracy RICO claims predicated on criminal copyright infringement and mail/wire fraud.
- Procedural posture: Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(2) and 12(b)(6). Court granted dismissal for lack of personal jurisdiction as to the Foreign Defendants and dismissed all RICO claims, but denied dismissal of the remaining copyright claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Foreign Defendants (general jurisdiction) | HMC and others do sufficient business contacts in NY; HMC allegedly has a NY office and prior pleading said principal place in NY | Foreign Defendants are Florida-based (per affidavits); Daimler limits general jurisdiction to place of incorporation or principal place of business | No general jurisdiction: Plaintiffs failed to show any defendant is "at home" in NY; dismissed those defendants for lack of personal jurisdiction |
| RICO §1965(b) national jurisdiction ("ends of justice") | Nationwide RICO service is necessary because defendants are dispersed and part of a single enterprise | Plaintiffs cannot invoke §1965(b) if RICO claim fails on the merits | Court did not decide §1965(b) because RICO claims were dismissed on the merits; without RICO reach, foreign defendants cannot be kept in forum |
| Direct copyright infringement | Defendants own sites where copyrighted photos appear and allegedly reproduced thumbnails and full images | Ownership of websites alone insufficient; direct liability requires volitional conduct (actions that cause the copying) | Denied dismissal: complaint, albeit thin, plausibly alleges Defendants themselves reproduced images and created thumbnails, supporting a direct-infringement claim |
| Contributory copyright infringement | Defendants induced/controlled webmasters, provided instructions, monitored sites, and thus had knowledge and materially contributed | Plaintiffs’ allegations of knowledge and material contribution are conclusory and insufficient | Denied dismissal: factual allegations (dummy webmasters under defendants’ direction, monitoring, instructions, and profit motive) suffice to plead knowledge and material contribution at pleading stage |
| Vicarious copyright infringement | Defendants profit from ads and retain right/ability to supervise/remove infringing content | Defendants contend mere platform ownership is not enough absent control and direct profit tied to infringement | Denied dismissal: Plaintiffs plausibly allege right and ability to supervise and a direct financial interest tied to the display of the photos |
| DMCA safe-harbor defense | Defendants invoke §512 safe harbors | Safe-harbor is an affirmative defense requiring threshold facts (service-provider status, repeat-infringer policy, etc.) which are not established on the face of the complaint | Dismissal denied on DMCA grounds: insufficient factual record at pleading stage to apply safe-harbor; defendants may raise later with evidence |
| RICO substantive claim (enterprise and predicates) | Defendants formed a coordinated enterprise committing racketeering (criminal copyright infringement, mail/wire fraud) to steal and monetize photos | Allegations are group-wide and conclusory without specifics tying defendants to an enterprise or fraudulent statements; mail/wire fraud predicates not pleaded with Rule 9(b) particularity | Granted dismissal: complaint fails to plead an association‑in‑fact enterprise (no roles, hierarchy, or longevity), fails to plead mail/wire fraud with particularity, and otherwise fails to allege a distinct RICO person vs enterprise; criminal copyright predicate survives but is insufficient overall |
| RICO conspiracy (§1962(d)) | Alleged conspiracy to violate §1962(c) | Conspiracy claim depends on an adequately pleaded substantive RICO violation | Dismissed: conspiracy claim fails because the substantive RICO claim fails |
Key Cases Cited
- MacDermid, Inc. v. Deiter, 702 F.3d 725 (2d Cir. 2012) (plaintiff bears burden to make a prima facie showing of personal jurisdiction)
- Daimler AG v. Bauman, 571 U.S. 117 (U.S. 2014) (general jurisdiction exists only where a corporation is essentially at home—place of incorporation or principal place of business)
- Carnival Network LP v. CSC Holdings, 536 F.3d 121 (2d Cir. 2008) (distinguishing direct from contributory copyright liability and requiring volitional conduct for direct liability)
- Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417 (U.S. 1984) (Copyright Act does not automatically impose direct liability on those who induce infringement)
- Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012) (DMCA safe-harbor threshold criteria and requirements)
- Bell Atlantic v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (legal conclusions at pleading stage need not be accepted as true)
- H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 (U.S. 1989) (pattern of racketeering requires related predicates posing a threat of continued criminal activity)