Atlantic Recording Corp. v. Project Playlist, Inc.Atlantic Recording Corp. v. Project Playlist, Inc.
OPINION
Defendant Project Playlist, Inc. (“Play-list”) operates a website,
www.project playlist.com
(the “Website”), that provides an index of links to songs available on third-party websites. Users can create playlists of songs on the Website — hence the name — that they can save on the Web
In this case, six of the world’s largest record companies sue Playlist for copyright infringement and unfair competition. Plaintiffs own copyrights to the majority of sound recordings in the United States, and claim that most of the songs on the third-party websites to which Playlist provides links are posted without plaintiffs’ permission,.- and therefore infringe plaintiffs’ copyrights. Through this action, plaintiffs seek to hold Playlist responsible for copyright infringement.
Playlist moves, pursuant to
BACKGROUND
A. Allegations of the Complaint
Plaintiffs are some of the largest record companies in the world. (Compl. ¶ ll). 1 Atlantic Recording Corporation and Elek-tra Entertainment Group, Inc. are organized under the laws of Delaware and have their principal place of business in New York. (Id. ¶¶ 12-14, 17). Interscope Records is organized under the laws of California and has its principal place of business in California. (Compl. ¶ 15). Motown Record Company, L.P. is organized under the laws of California and has its principal place of business in New York. (Id. ¶¶ 16, 19; Orseck Deck ¶2®). 2 UMG Recordings, Inc. and Warner Bros. Records, Inc. are organized under the laws of Delaware and have their principal place of business in California. (Compl. ¶¶ 18, 20).
Playlist is a Delaware corporation with its principal place of business in Palo Alto, California, in the Northern District of California. (Riney Decl. ¶ 3). Playlist owns and operates the Website. (Compl. ¶ 2). The Website, through a computer program called a “spider,” searches the Internet to compile an index of links to sound recordings on other websites.
(Id.
¶¶ 3, 29-30). The Website works as follows: A user searches for a particular song or artist, clicks “Search,” and then an index appears.
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The user then has a num
Below is the website [address] containing the music file. Some music files located in this site may be subject to copyright. To be safe, don’t download from this site. If you like it, click here to download from itunes [link] or you can download the ringtone [link]!
Notwithstanding Playlist’s warning to users to exercise caution with respect to illegally downloading copyrighted works, users are not prevented from downloading songs from these third-party websites. (Id. ¶ 34).
In addition to providing an index of songs found through its “spider,” Playlist also builds its database of links by permitting users to submit links to songs they found on the Internet. (Id. ¶ 31).
The “overwhelming majority” of the songs in Playlist’s index are posted without permission of the copyright owners. (Id. ¶ 4). Plaintiffs own the copyright to many of these songs. (Id. ¶¶ 25-26 & Exs. A & B).
B. Procedural History
Plaintiffs filed the complaint in this action on April 28, 2008, asserting claims against Playlist for direct and secondary copyright infringement under
These motions followed.
DISCUSSION
Playlist moves to transfer venue and to dismiss plaintiffs’ two state law causes of action. For the reasons set forth below, both motions are denied.
A. The Motion to Transfer Venue
Playlist seeks to transfer this case to the Northern District of California pursuant to
1.
Standard Under
Under
While a district court has "broad discretion” under 1404, because that discretion “must be exercised at the very outset of the case, when relatively little is known about how the ease will develop, courts have typically accorded substantial weight to the [eighth] factor, plaintiffs choice of forum.”
Albert Fadem Trust v. Duke Energy Corp.,
2. Application
Playlist has not made a "clear and convincing” showing that transfer is warranted. I address each of the nine factors in turn. 6
(a) Convenience of Witnesses
This factor, generally considered the most important in the 1404 analysis, does not favor transfer.
See Aerotel, Ltd. v. Sprint Corp.,
Playlist has identified eight people whom it claims are key witnesses, but only four of them live in the Northern District of California; the other four live in the Central District of California, an hour and twenty minute flight away.
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Hence, moving this case to the Northern District of California will only make this case more
Plaintiffs, for their part, have identified a number of witnesses in this District whose testimony they expect to be key. While Playlist contends that plaintiffs’ witnesses are irrelevant, I do not accept that contention at this early stage of the case, as plaintiffs will undoubtedly want to call witnesses to attest to, inter alia, their ownership of the copyrights, the alleged infringement, and the adverse impact that infringement has had on plaintiffs’ business. Accordingly, this factor is neutral in the analysis.
(b) Convenience of Parties
Playlist argues that its “operations will be placed in serious jeopardy if Playlist is required to send its key personnel across the country for a trial.” (Def. Transfer Mem. at 13). More specifically, Playlist argues that the operation of the Website requires constant or near constant attention, and that its continued survival would be placed in jeopardy if key employees lacked Internet access for five to six hour blocks of time (the time of a flight from San Francisco to New York). I do not accept this argument, as Playlist surely must be able to make arrangements for coverage when its key personnel must travel. After all, Playlist has established what appears to be an international business.
Plaintiffs argue that trial in the Northern District of California would be inconvenient for them, as none has its principal place of business in that District. They argue that transfer would merely “shift the inconvenience of litigating in a particular forum from one party to the other.”
DealTime.com Ltd. v. McNulty,
As Playlist points out, however, all six plaintiffs have commenced actions in the Northern District of California as recently as 2008. (Plaut Deck ¶¶ 2-3 & Ex. A (docket sheets of cases commenced by plaintiffs)). This evidence belies plaintiffs’ claim that litigation in the Northern District would be inconvenient.
See Indian Harbor Ins. Co. v. Factory Mut. Ins. Co.,
In the end, this factor is neutral.
(c) Locus of Operative Facts
Due to the nature of the claims plaintiffs assert, there are several loci of operative facts.
See Adams v. Key Tronic Corp.,
No. 94 Civ. 0535(MBM), 1996 U.S.
But New York is too. Plaintiffs claim that Playlist makes copyrighted works available to users “by compiling an ever-expanding index of links to music files hosted on websites on the Internet,” and that many of those websites are hosted on computer servers in New York. (Compl. ¶¶ 29-30). Plaintiffs also claim that Play-list receives funding from a New York investment company and generates revenue by selling advertising to New York companies through a New York ad agency. (Id. ¶ 9; Orseck Decl. ¶ 8). These facts are sufficient to make New York a locus of operative events.
Because both districts are loci of operative facts, this factor is neutral in the analysis.
(d)Location of Relevant Documents
This factor is neutral. Most, if not all, of the relevant documents in this case will be electronic, and Playlist will simply put them on disks and send them to plaintiffs.
Cf. Am. S.S. Owners Mut. Prot. & Indem. Ass’n v. Lafarge N. Am., Inc.,
(e)Availability of Process
Playlist identifies several prospective witnesses who would “[presumably ... be more willing to testify in their home state than New York.” (Def. Transfer Mem. at 17). Playlist does not argue, however, that these witnesses would be
unwilling
to testify at trial in this District, and therefore this factor is neutral in the Court’s analysis.
Cf. In re Global Cash Access Holdings, Inc. Sec. Litig.,
No. 08 Civ. 3516(SWK),
(f)Forum’s Familiarity With Governing Law
In copyright cases, this factor is given little to no weight,
see AEC One Stop Group, Inc. v. CD Listening Bar, Inc.,
(g)Relative Financial Means of Parties
Playlist places much weight on this factor, arguing that it is a plucky start-up with only twenty-five employees, while plaintiffs are some of the largest record companies in the world, with unlimited resources. This factor carries little weight, however, when the party arguing to transfer is a corporation. Cf. id. (“When both parties are corporations, however, this factor is given little weight.”). This is particularly so here, given the contacts that Playlist has with New York.
The Second Circuit has consistently held that “a plaintiffs choice of forum is presumptively entitled to substantial deference.”
Gross v. BBC,
Defendant argues this Court should afford little weight to plaintiffs’ choice of forum, however, because plaintiffs only chose to file suit in this District to escape the reach of a purportedly adverse Ninth Circuit precedent that would preclude their state law claims were this ease to proceed in California. Even assuming there is some truth to this argument, Playlist is undoubtedly moving to transfer to California in part to take advantage of that same Ninth Circuit precedent. Clearly, plaintiffs chose to file suit in this District at least in part because three out of six of them maintain their principal place of business here, and because defendant conducts business here. Accordingly, this factor weighs against transfer.
(i)Trial Efficiency and Interests of Justice
This factor relates to judicial economy, and it is undeniable that the Southern District of New York is one of the busiest district courts in the country. Defendant has adduced evidence tending to show that, on average, the Northern District of California resolves cases faster than courts in this District. That may be so, but the time differential no doubt is due in part to the complex nature of many of the cases in this Court. I do not believe this case would be resolved appreciably faster in California. This factor therefore does not favor transfer.
(j)Conclusion
Considering all the factors, Playlist simply has not made the “clear and convincing” showing required to warrant transfer of this case to the Northern District of California. Hence, its motion to transfer is denied.
B. The Motion to Dismiss the State Law Claims
Playlist moves to dismiss plaintiffs’ New York state law claims for common law copyright infringement and unfair competition on the ground that such claims are barred by a provision of the Communications Decency Act,
1. Standard on a Motion to Dismiss
When considering a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept plaintiffs factual allegations as true and draw all reasonable inferences in its favor.
See Bernheim v. Litt,
2. The Communications Decency Act
Congress enacted the CDA as Title V of the Telecommunications Act of 1996, Pub. L. No. 104-104, primarily to protect minors from exposure to obscene and indecent material on the Internet.
See
S.Rep. No. 104-23, at 187-193 (1996) (noting that Congress “has been troubled by an increasing number of published reports of inappropriate uses of telecommunications technologies to transmit pornography, engage children in inappropriate adult contact, terrorize computer network users through ‘electronic stalking’ and seize personal information”);
see also Batzel v. Smith,
At the same time, however, Congress was also concerned with ensuring the continued development of the Internet.
See
3.
Is Defendant Entitled to Immunity Under
Playlist argues that it is entitled to immunity under
Courts across the country
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have repeatedly held that the CDA’s grant of immunity should be construed broadly.
See Universal Commc’n Sys. v. Lycos, Inc.,
Congress’ purpose in providing the § 230 immunity was thus evident. Interactive computer services have millions of users. The amount of information communicated via interactive computer services is therefore staggering. The specter of tort liability in an area of such prolific speech would have an obvious chilling effect. It would be impossible for service providers to screen each of their millions of postings for possible problems. Faced with potential liability for each message republished by their services, interactive computer service providers might choose to severely restrict the number and type of messages posted. Congress considered the weight of the speech interests implicated and chose to immunize service providers to avoid any such restrictive effect.
Consistent with this broad reading of the statute, courts have held that an interactive computer service is not liable where it posts or links to a third-party’s content. The First Circuit’s recent decision in
Ly-cos
is particularly instructive. There, a telecommunications company and its CEO sued,
inter alia,
Lycos for allegedly defamatory statements made on an Internet message board operated by Lycos.
Lycos,
While the First Circuit affirmed on other grounds, in addressing the Section 230 issue it squarely rejected plaintiffs’ argument that Lycos was an “information content provider” under the CDA because Lycos played a role in creating the content. Id. at 419-20. Specifically, plaintiffs argued that Lycos was responsible for creating content as it was aware that some of the message board posts were defamatory and because, merely by operating its website, Lycos was assisting users in creating content. “At best,” the First Circuit held, “[these] allegations establish that Lycos’s conduct may have made it marginally easier for others to develop and disseminate misinformation. That is not enough to overcome Section 230 immunity.” Id. at 420.
Similarly, in
Parker v. Google, Inc.,
Here, Playlist engaged in conduct similar to Lycos’s and Google’s — conduct that courts held was immune under Section 230(c)(1) of the CDA. The content at issue here is the songs to which plaintiffs hold copyrights, songs which Playlist lets users play through its Website and to which
The only case plaintiffs cite to the contrary is the recent
en banc
decision of the Ninth Circuit in
Fair Housing Council v. Roommates.com, LLC,
The Ninth Circuit’s decision was based solely on the fact that the content on the website that was discriminatory was supplied by Roommates.com itself. It was Roommates.com that, in violation of federal and California state housing law, required potential subscribers to identify their sex, sexual orientation, and family status, and to indicate their preferred sex, sexual orientation, and family status in a roommate. Id. at 1161-62. The Ninth Circuit explained as follows:
Here, the part of the profile that is alleged to offend the Fair Housing Act and state housing discrimination laws— the information about sex, family status and sexual orientation — is provided by subscribers in response to Roommate’s questions, which they cannot refuse to answer if they want to use defendant’s services. By requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information. And section 230 provides immunity only if the interactive computer service does not “creat[e] or develop! ]” the information “in whole or in part.”
Id.
at 1166 (quoting
In this case, unlike
Roommates.com,
Playlist does not itself supply the content to which plaintiffs object — the songs. Playlist merely provides the interface for accessing that content — by permitting users to listen to the songs on Playlist’s Website — and provides links so users can download the songs on third-party websites. It is, in these respects, no different than Lycos, which provides chat rooms in which third-parties can voice their opinions, and Google, which provides users with lists of links responsive to user searches. At best, Playlist is guilty of “passive acquiescence in the misconduct of its users,” and, even under
Roommates, com,
Playlist is entitled to immunity under
Accordingly, I conclude, as a matter of law, that Playlist is entitled to immunity under
4.
Do Plaintiffs’ State Law Claims Fall Within the Carve-Out of
Even if Playlist is entitled to immunity under
(1) No effect on criminal law. Nothing in this section shall be construed to impair the enforcement of section 223 or 231 of this Act, chapter 71 (relating to obscenity) or 110 (relating to sexual exploitation of children) of title 18, United States Code, or any other Federal criminal statute.
(2) No effect on intellectual property law. Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.
(3) State law. Nothing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section. No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.
(4) No effect on communications privacy law. Nothing in this section shall be construed to limit the application of the Electronic Communications Privacy Act of 1986 or any of the amendments made by such Act, or any similar State law.
Plaintiffs argue that, under the plain language of
Playlist advances two textual arguments to support its reading, neither of which has merit. First, Playlist argues that because
Second, Playlist argues that
Playlist’s primary argument is rooted not in the text of the statute but in the public policy underlying it. Playlist cor
In support of its position, Playlist relies heavily on a 2007 Ninth Circuit case in which the Ninth Circuit held that the term “intellectual property” in the CDA really means “federal intellectual property.”
See Perfect 10, Inc. v. CCBill LLC,
The problem with Playlist’s argument is that it lacks any support in the plain language of the CDA.
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In four different points in
Moreover, the modifier “any” in
Because the plain language of the CDA is clear, as “any law” means both state and federal law, the Court need not engage in an analysis of the CDA’s legislative history or purpose.
See Lee v. Bankers Trust Co.,
Accordingly, I conclude, as a matter of law, that
Because
CONCLUSION
For the foregoing reasons, Playlist’s motions for a change of venue and to dismiss plaintiffs’ state law claims are denied. The parties are ordered to appear in Courtroom 11A on April 10, 2009 at 10:00 a.m. for a conference to set a discovery schedule.
SO ORDERED.
Notes
. The Complaint was initially commenced by nine record company plaintiffs, but on March 20, 2009 three of them stipulated to a dismissal of their claims.
. The Complaint incorrectly identified the principal place of business for Motown as California. In fact, Motown has its principal place of business in New York. (Orseck Deck 112(d)).
. Some of the facts are drawn from the Court’s own review of the Website. Because the Website is incorporated by reference into the Complaint, the Court may consider it on a motion to dismiss. See
Gorran v. Atkins Nutritionals, Inc.,
The Complaint alleges that Playlist "copies to its own servers thousands (if not millions) of the music files identified on its search index, so that it can perform those works to its users more easily.” (Compl. ¶ 37). This allegation refers to Playlist’s cache. (Def. Dismiss Mem. at 5 n. 2). A computer cache is a storage area on a computer where frequently accessed data is stored to give the user faster access to it.
See LG Elecs., Inc. v. Asustek Computer,
Nos. 01 Civ. 00326, 01375, 01594, 02187, and 01552(CW),
. While the song plays through Playlist’s Website, it is not clear to the Court, either from the Complaint or the Court’s own review of the Website, whether the song file is copied over to the Playlist music player, or whether it is always located on the third-party websites.
. The Copyright Act does not govern sound recordings created before February 15, 1972,
see
. Plaintiffs do not dispute that this action could have been brought in the Northern District of California; thus, the threshold requirement for transfer has been met.
. Playlist wrote to the Court on March 24, 2009 to argue that the March 20, 2009 dismissal of claims by three of the plaintiffs changed the 1404(a) transfer analysis. As discussed below, I disagree. In that same letter, Playlist alerted the Court to a recent decision of this Court in which Judge Baer granted a venue transfer motion under circumstances that Playlist describes as “remarkably similar to those at hand.”
See Capitol Records, LLC v. VideoEgg, Inc.,
No. 08 Civ. 5831(HB),
. For the purposes of this analysis, it is not significant that the flight from the Central District of California to the Northern District of California is shorter than the flight from the Central District of California to this District.
See Eslworldwide.com, Inc. v. Interland, Inc.,
No. 06 Civ. 2503(LBS),
. The Second Circuit has not yet interpreted
. This aspect of the
Perfect 10
Court’s holding appears to be inconsistent with other Ninth Circuit precedent.
See, e.g., SEC v. Gemstar-TV Guide Int'l, Inc.,
. The Ninth Circuit did not engage in a textual analysis in Perfect 10.
. Because I have determined, based on the plain language of the CDA, that plaintiffs' state law claims can proceed, I do not address plaintiffs’ argument that Playlist's reading of the CDA would implicitly repeal