FORTIES B LLC v. America West Satellite, Inc.FORTIES B LLC v. America West Satellite, Inc.
MEMORANDUM ORDER
This Memorandum Order (1) sets forth the reasons for the Court’s May 19, 2010,
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. 1
On June 8, 2010, plaintiffs filed a purported notice of voluntary dismissal without prejudice pursuant to
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 2 other than the fact that Pars TV’s satellite signal was- viewable here (as it is everywhere else in the world). They supported their motion by submitting a declaration by Shadjareh attesting to the facts that Pars TV is a “small satellite station whose main purpose is to highlight and draw attention to the abuses of the oppressive regime currently controlling Iran”; that Pars TV “is not operated for the purpose of generating significant excess revenue”; that PBSG’s revenues are “typically minimal”; and that PBSG has no contacts whatsoever with the state of New York (apart, of course, from the undisputed fact that the Pars TV signal is viewable here). Decl. of Amir Shadjareh, 4/3/10, ¶¶ 3, 6. In their memorandum of law opposing this motion, plaintiffs purported to aver additional jurisdictional facts going well beyond what was mentioned in the pleadings, but these factual assertions were unsupported by affidavits or citations to evidence. See Pis’ Mem. Opp. Mot. to Dismiss, 4/21/10, at 12-15.
In a post-argument letter brief May 13, 2010, the plaintiffs submitted additional evidence in support of a finding of jurisdiction:
3
First, they attached an excerpt
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 “committed] 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. 7
To determine the existence of jurisdiction under section 302(a)(1), a court must decide (1) whether the defendant “transacts any business” in New York and, if so, (2) whether this cause of action “aris[es] from” such a business transaction. Courts look to “the totality of the defendant’s activities within the forum,” to determine whether a defendant has “transacted] business” in such a way that it constitutes “purposeful activity” satisfying the first part of the test. As for the second part of the test, “[a] suit will be deemed to have arisen out of a party’s activities in New York if there is an articulable nexus, or a substantial relationship, between the claim asserted and the actions that occurred in New York.”
Best Van Lines, Inc. v. Walker,
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.,
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,
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.,
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, 11 are as follows: Shadjareh has attested to being PBSG’s officer and sole shareholder. Decl. of Amir Shadjareh, 2/26/10, ¶ 1. Shadjareh’s deposition testimony, viewed in the light most favorable to plaintiffs, shows that he superases the selection of Pars TV’s programming:
Q: In other words, what is shown on Pars TV, who selects that?
A: The programmers select and the with under my supervision.
You know, there is a lot of programmers here. Some of them, you know, they leasing the time. Some of them, they are working for the TV. Usually, you know, they select his own program, you know, and the under my supervision. You know, they have to let me know what they are airing.
Q: And do you review what is aired every day before it goes on Pars TV?
A: No. That’s — most of them is live. You know, they talk about them.
Q: Okay. But are you aware of what is being broadcast?
A: Most time, yes, they told me regarding the program what they are going to show.
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 infringe
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,
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.,
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.,
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. 12
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,
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.
Notes
. The Court also dismissed Count I insofar as it was premised on allegations of purely extraterritorial acts of copyright infringement.
. The claims relevant here, which are for copyright infringement and mutilation, respectively arise under the Copyright Act and the Lanham Act. Because neither of these Acts provides for national service of process, this Court adopts the personal jurisdiction rules of the forum state, and accordingly applies the New York state long-arm statute.
See, e.g., Sunward Elecs., Inc. v. McDonald,
. The Court notes that there is a question as to whether some of the exhibits attached to the letter brief may properly be considered. By way of background, at oral argument on the motion to dismiss, the Court made clear that plaintiffs could not defeat the motion to dismiss merely by relying on those facts asserted in their memorandum of law without citation or attribution. The Court then invited plaintiffs to offer supplemental factual materials in support of their opposition, and plaintiffs identified the transcript of Shadjareh’s deposition as relevant to their argument. Thus, the Court indicated that it would consider only this deposition transcript and the allegations of the complaint in ruling on the motion, and permitted the parties to submit letter briefs addressing the question of personal jurisdiction based on this expanded rec
. The date listed on Ms. Pooyan's declaration is incorrect, as the Court did not direct submission of the letter brief (itself dated May 13, 2010) until May 6, 2010.
. While it may be logical to infer that PBSG solicits donations from the fact that this screenshot displays Pars TV’s bank account information, there is nothing on the face of the undated image that confirms that it represents a solicitation of donations, and there is no assertion by anyone with personal knowledge that this is so.
. This paragraph of Ms. Pooyan's affidavit also asserts that on March 11, 2010, plaintiffs "petitioned the Court” to compel defendants to produce the requested documents. To the extent this is a suggestion that the Court considered and rejected a request to compel such production, that suggestion is disingenuous. To be sure, during their numerous teleconferences with the Court, plaintiff's counsel made various broad accusations of, among many other things, defendants’ recalcitrance in document production, but they made no specific application for leave to file a motion to compel the production of these particular documents. Plaintiffs' counsel is no doubt aware that, as clearly stated in the undersigned's Individual Practices, the Court would not deny plaintiffs the right to move to compel production of these or any other documents if the dispute could not be resolved in a premotion telephonic conference.
. Where a court "chooses to rely on pleadings and affidavits” to evaluate a motion to dismiss for lack of personal jurisdiction, "the plaintiff need only make a
prima facie
showing of personal jurisdiction over defendant.”
CutCo Indus., Inc. v. Naughton,
. Plaintiffs also urge the Court to adopt the inference that Pars TV must have targeted a New York audience simply because a large percentage of the Iranian-American population resides in the New York area. This factual assertion is not supported by admissible demographic evidence, but even if it were, it cannot suffice to establish jurisdiction where there is no evidence of any purposeful attempt to target the New York market.
See Royalty Network,
. Because of plaintiffs’ failure to satisfy this element of the statute, the Court need not reach the remaining elements for establishing personal jurisdiction under CPLR § 302(a)(3)(ii). The Court notes, however, that plaintiffs have offered no concrete evidence, beyond the mere facts that one of its advertisers has an office in New York and that plaintiff’s counsel’s brother purchased a $690 pendant from a Pars TV advertiser, that goes to whether PBSG “derives substantial revenue from interstate or international commerce.” Plaintiffs rely only on protestations that defendants failed to comply with their discovery demands in this respect, but plaintiffs never moved to compel production of such documents. This lack of evidence is independently sufficient to preclude jurisdiction under this subsection of the statute.
See,
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)(h).
See Penguin Group (USA) Inc. v. Am. Buddha,
. Because this dismissal is based on plaintiffs' failure to satisfy the requirements of New York’s long arm statute, the Court does not reach the issue of whether the exercise of personal jurisdiction over PBSG would be consistent with due process under the Constitution.
. Although defendants dispute plaintiffs’ account of PBSG’s alleged infringing broadcast of "Be Like Others,” for purposes of the motion it may be assumed that PBSG broadcast the film without authorization in May 2008. See Decl. of Tanaz Eshaghian, 6/23/10, ¶ 12.
. Shadjareh also relies on the Second Circuit's decision in
Softel,
which held that evidence that a defendant was the president and “a shareholder” of a company committing infringing acts was "too attenuated to establish a sufficiently 'direct' financial interest in the exploitation of copyrighted materials.”