This lawsuit arose as a result of a failed merger between wrestling entities. In one corner are Global Force Entertainment, Inc. ("GFE") and Jeffrey Jarrett, who bring a number of federal and state law claims. In the other, are Anthem Sports & Entertainment, Corp. ("Anthem Sports") and Anthem Wrestling Exhibitions, LLC ("Anthem Wrestling"), who have filed a Motion to Dismiss (Doc. No. 61) the majority of those claims. Anthem Sports has also filed a Motion to Dismiss for Lack of Personal Jurisdiction (Doc. No. 58). Both Motions have been fully briefed by the parties (Doc. Nos. 59, 62, 70, 74, 75), and will be considered after a brief recitation of the relevant facts as they are alleged in the Second Amended Complaint ("SAC") (Doc. No. 54).
I. Factual Background
Jarrett, a seventeen-time world wrestling champion, and World Wrestling Entertainment hall-of-famer, is a Tennessee resident. (SAC ¶ ¶ 15, 16). In 2014, he formed GFE for the purpose of promoting wrestling events and creating original wrestling programming for pay-per-view and television markets. (Id. ¶ 17). GFE is the owner of the "Global Force Wrestling" ("GFW") brand, and owns trademarks and associated registrations for use in connection with "(1) posters and photographs; (2) insulated containers for beverage cans for domestic use; (3) clothing, including, but not limited to, t-shirts, bandanas and hats; (4) streaming of audio and video material on the Internet; and (5) entertainment services, including, but not limited to, wrestling exhibitions and performances by professional wrestlers and entertainers." (Id. ¶¶ 19, 20). GFE also uses a logo with a distinctive green color for GFW on its website and in interstate commerce. (Id. ¶ 21).
On July 24, August 21, and October 23, 2015, in Las Vegas, Nevada, GFE produced sixteen (16) hours of original wrestling programming to market to television and pay-per-view markets. The collective content was called "GFW Amped" and featured completely original content developed and owned solely by GFE, including appearances by Jarrett. (Id. ¶¶ 22, 23, 29). Plaintiffs believe each one-hour segment is worth $ 300,000 or more, and applications (with the requisite fees) were filed for federal copyright registration for each of them. (Doc. No. 25, 26, 30).
Anthem Sports was formed in 2010 when Leonard Asper acquired a majority stake in the Fight Network. Fight Network is an English language television channel that broadcasts programming related to mixed martial arts, boxing, kickboxing and professional wrestling throughout the world. It is available digitally through streaming services such as Apple TV, Roku, computers, and tablets. (Id. ¶¶ 32-35).
In October 2016, Anthem Sports approached Plaintiff about merging with GFE in exchange for membership and equity shares in Anthem Sports. The discussions
In January 2017, Anthem Wrestling retained Jarrett as a consultant. (Id. ¶ 41). Around this same time, Jarrett provided Defendants with the only set of masters for the sixteen, one-hour episodes of GFW Amped. (Id. ¶ 42). Several months later, in May 2017, Jarett and Anthem Wrestling executed a term sheet in relation to both Jarrett's employment as Chief Creative Officer of Anthem Wrestling and the merger. Among other things, the term sheet made clear that GFE owned all of the GFW Amped content.
In anticipation of a "Slammiversary" pay-per-view event in June 2017, Anthem Wrestling issued a press release announcing the acquisition of GFE, and indicating that Jarrett would be joining Anthem Wrestling as an equity owner and member of its board of managers. (Id. ¶ 46). However, Anthem and GFE never completed the merger contemplated by the term sheet, and Jarett's employment with Anthem Wrestling was terminated in October 2017. (Id. ¶¶ 47, 51).
Despite the failed merger, "Defendants reproduced, distributed, publicly displayed, offered for sale, and sold the GFW Amped content without providing any compensation or royalties to GFE or Mr. Jarrett." (Id. ¶ 52). This began with Defendants promoting the GFW Amped content as a four-part pay-per-view program on July 19, 2017, and continued with the airing of that content on the Fight Network website. Thereafter, Defendants aired "GFW Amped Anthology" in four parts between August and December 2017 as part of their "One Night Only Series." Anthem Wrestling continues to sell DVD copies of the GFW Amped content on its website, and through other online retail outlets. (Id. ¶¶ 56-59, 60). Additionally, Defendants launched a new subscription streaming service known as Global Wrestling Network ("GWN") that features archived content from other predecessor wrestling entities run by Jarrett. GWN also uses a similar logo with "a green color identical or nearly identical to the green color in GFE's logo." (Id. ¶¶ 61-68).
At some point, Defendants destroyed the only masters of the GFW Amped series that Jarrett had provided to them. This meant that Plaintiffs could not complete the trademark registration process. (Id. ¶¶ 27, 72).
Based upon the foregoing events, Plaintiffs sue Defendants for (1) copyright infringement under the Copyright Act; (2) violations of the Tennessee Personal Rights Protection Act; (3) trademark infringement, unfair competition, and false designation of origin under the Lanham Act; (4) unfair competition under Tennessee law; (5) violations of the Tennessee Consumer Protection Act; and (6) tortious interference under Tennessee law.
II. Motion to Dismiss for Lack of Personal Jurisdiction by Anthem Sports
"The Due Process Clause of the Fourteenth Amendment constrains a State's authority to bind a nonresident defendant to a judgment of its courts," Walden v. Fiore,
"Personal jurisdiction maybe found either generally or specifically." Miller v. AXA Winterthur Ins. Co.,
A. General Jurisdiction
In Goodyear Dunlop Tires Operations, S.A. v. Brown,
Goodyear and Daimler "wrought [a] sea change" in the law of general jurisdiction because the "continuous-and-systematic standard" that had prevailed "for decades" is no longer the standard. BNSF Ry. Co. v. Tyrrell, --- U.S. ----,
Notwithstanding the substantial narrowing of general jurisdiction by the Supreme Court, Plaintiffs raise three grounds for that type of jurisdiction in this case. None are persuasive.
First, Plaintiffs argue that "Anthem Sports reportedly maintains an office and studio in Nashville." (Doc. No. 67 at 4). The use of the word "reportedly" is telling because the only "evidence" to support this argument is a copy of a screen-shot from a press release posted on the Internet that states: "Anthem Sports & Entertainment Corp. is a global sports and entertainment media company with offices and studios in New York, Toronto, Los Angeles and Nashville." (Doc. No. 31-1 at 2). Even if it could be assumed from this that Anthem Sports has an office in all of those places, it does not follow that there would be general jurisdiction in each. See e.g., Daimler,
Second, Plaintiffs point to Anthem Sports' presence on the Internet and its website's accessibility by Tennessee residents as a basis for general jurisdiction. This, too, fails.
The Sixth Circuit has held that the operation of "a website that is accessible to anyone over the Internet is insufficient to justify general jurisdiction," even where the website enables the defendant to do business with residents of the forum state, because such activity does not "approximate[ ] physical presence within the state's borders." Bird v. Parsons,
the operation of a website may justify specific jurisdiction, if it satisfies the three factors set forth in Southern Machine [Company v. Mohasco Industries, Inc.,, 381 (6th Cir.1968) ], namely, if the operation of the website constitutes purposeful availment, is the basis of the cause of action against the defendant, and jurisdiction over the defendant is reasonable. There is strand of law which holds that whether a court can assert specific personal jurisdiction over a website owner depends on how interactive the website is with the people in the forum state. There is another relevant strand of law dealing with whether the court can assert personal jurisdiction over defamatory publications which reach into the forum state.... 401 F.2d 374
The "operation of an Internet website can constitute the purposeful availment of the privilege of acting in a forum state ... if the website is interactive to a degree that reveals specifically intended interaction with residents of the state." Bird,(internal quotations omitted). In evaluating whether the defendant's contact with the forum state constituted purposeful availment, this and other circuits have used the " Zippo [v. Mfg. Co. v. Zippo Dot Com, Inc., 289 F.3d at 874, 1124 (W.D. Pa.1997) ] sliding scale" approach, which distinguishes between interactive websites, where the defendant establishes repeated online contacts with residents of the forum state, and websites that are passive, where the defendant merely posts information on the site.... Interactive websites can subject the defendant to specific personal jurisdiction, whereas passive websites are less likely to confer such jurisdiction. 952 F.Supp. 1119
Cadle Co. v. Schlichtmann,
Leaving aside Nordholm's uncontroverted declaration in which he states that "Anthem Sports' website is not interactive," and "simply has links to other websites," (Doc. No. 25, Nordholm Decl. ¶ 11), Plaintiffs do not address the " Zippo sliding scale," or even suggest that the website is interactive. Instead, they merely assert that "Anthem Sports also has a website accessible globally, including in Tennessee." (Doc. No. 67 at 4). This is not nearly enough.
Third and finally, Plaintiffs assert general jurisdiction over Anthem Sports under the alter-ego theory, which holds "a non-resident parent corporation is
"(1) whether there was a failure to collect paid in capital; (2) whether the corporation was grossly undercapitalized; (3) the nonissuance of stock certificates; (4) the sole ownership of stock by one individual; (5) the use of the same office or business location; (6) the employment of the same employees or attorneys; (7) the use of the corporation as an instrumentality or business conduit for an individual or another corporation; (8) the diversion of corporate assets by or to a stockholder or other entity to the detriment of creditors, or the manipulation of assets and liabilities in another; (9) the use of the corporation as a subterfuge in illegal transactions; (10) the formation and use of the corporation to transfer to it the existing liability of another person or entity; and (11) the failure to maintain arms length relationships among related entities."
Gipson Mech. Contractors, Inc. v. U.A. Local 572 (AFL-CIO),
Plaintiffs argue that Defendants are alter egos because Anthem Sports formed Anthem Wrestling to acquire the assets of TNA Entertainment, LLC, and that "Anthem Sports has attempted to shield itself from personal jurisdiction by forming layers of entities to do its bidding and conducting no business in its own right while claiming it does no business whatsoever in Tennessee." (Doc. No. 67 at 5). Plaintiffs insist "[t]his is precisely the type of avoidance liability that the Tennessee Supreme Court has rejected" and cites Gordon v. Greenview Hospital, Inc.,
In Tennessee, mere control of a subsidiary corporation by its parent is not sufficient to disregard the presumption of corporate separateness (to "pierce the corporate veil"). Cambio Health Solutions, LLC v. Reardon,, 790 (Tenn. 2006) ; Cont'l Bankers Life Ins. Co. of the S. v. Bank of Alamo, 213 S.W.3d 785 , 631 (Tenn. 1979). To disregard the presumption, the party seeking to do so must demonstrate (1) that the subsidiary corporation is a sham or dummy, Elec. Power Bd. of Chattanooga v. St. Joseph Valley Structural Steel Corp., 578 S.W.2d 625 , 526 (Tenn. 1985), (2) that the two corporations are, in fact, identical and indistinguishable, 691 S.W.2d 522 Mfrs. Consolidation Serv., Inc. v. Rodell, 42 S.W.3d [846] at 866 [ (Tenn.Ct.App.2000) ], or (3) that the subsidiary corporation is merely an instrumentality, agent, conduit, or adjunct of the parent corporation, Stigall v. Wickes Mach., , 511 (Tenn. 1990). In sum, the presumption of corporate separateness may be overcome by demonstrating that the parent corporation "exercises complete dominion over its subsidiary, not only of finances, but of policy and business practice in respect to the transaction under attack, so that the corporate entity, as to that transaction, had no separate mind, will or existence of its own." Cont'l Bankers Life Ins. Co. of the S., 801 S.W.2d 507 . 578 S.W.2d at 632
Plaintiffs have offered nothing to suggest that Anthem Wrestling is a sham or dummy corporation, that it and Anthem Sports are identical, or that Anthem Wrestling is merely a conduit for Anthem Sports. To the contrary, the only evidence before the Court is the parties apparent agreement that Anthem Wrestling was formed to acquire the assets of TNA Entertainment, and Nordholm's unchallenged declaration that (1) "Anthem Sports and Anthem Wrestling are two separate and distinct legal entities"; (2) "all appropriate corporate formalities have been observed by both companies"; (3) "Anthem Wrestling has different shareholders than Anthem Sports"; (4) "Anthem Wrestling is funded by financing facilities separate from the financing facilities for Anthem Sport"; (5) "[t]he two companies have different purposes, corporate missions, employees, locations, and management"; and (6) "[t]he two companies maintain separate books, tax returns and financial statement, and neither entity exerts control over the daily affairs of the other." (Doc. No. 25, Nordham Decl. ¶ 9). The mere fact that Anthem Sports is a holding company does not mean that Anthem Wrestling is its alter ego. Bhd. of Locomotive Engineers v. I.C.C.,
In short, Plaintiffs have not come close to establishing that Anthem Sports' affiliation with Tennessee is so "continuous and systematic" so as to render it essentially at home here as required by Daimler. General jurisdiction over Anthem Sports does not exist.
Specific jurisdiction deals with a defendant's contacts with the forum state relating to the claims at issue. The Sixth Circuit has identified three criteria for specific jurisdiction:
"First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable."
AlixPartners, LLP v. Brewington,
Notwithstanding their arguments to the contrary, Plaintiffs have not established the purposeful availment factor. Although asserting that the "claims in this lawsuit are not brought under" the NDA, they claim that agreement is "background for the relationships between the parties." (SAC ¶ 40). However, that "background" shows that Anthem Sports agreed to be sued in New York based on New York law in accordance with paragraph 13 of the NDA. (Doc. No. 17 at 3). Further, the Second Amended Complaint alleges that "[i]n or around May 2017, Anthem Wrestling and Mr. Jarrett signed a term sheet regarding Mr. Jarrett's employment as the Chief Creative Officer of Anthem Wrestling and the merger to be completed in which Anthem Wrestling would acquire GFE." (Doc. 43). While that document indicates that any disputes would be decided by a court in Davidson County, Tennessee, the agreement was between Plaintiffs and Anthem Wrestling, not Anthem Sports. All of this suggests that Anthem Sports agreed to sue and be sued in New York, not Tennessee.
Plaintiffs also point out that Defendants jointly argued in their Motion to Dismiss that they "entered into an implied license with Plaintiffs, who are Tennessee residents," and that "Anthem Sports cannot argue in one motion it has entered an implied agreement, while simultaneously arguing it has not contacts with Plaintiffs connected to this litigation." (Doc. No. 67 at 8). However, even assuming that an implied license is some sort of magic elixir establishing personal jurisdiction, Anthem Sports has not impermissibly pursued two contrary positions. The motion to dismiss for failure to state a claim was filed by both Defendants in conjunction with Anthem Sports' motion to dismiss for lack of personal jurisdiction. In both, Anthem Sports indicated that it had entered a special appearance to preserve the personal jurisdiction issue.
Finally, Plaintiffs claim that, because Defendants received copies of the masters from a Tennessee resident, specific jurisdiction exists in this Court. But how that is so as to Anthem Sports is never made clear in the papers. As already explained, and put even more plainly, Plaintiffs have wholly failed to show any activity or presence
III. Motion to Dismiss for Failure to State a Claim
In moving to dismiss all of Plaintiff's claims, Defendants argue:
First, Defendants assert that Plaintiffs have failed to state an adequate claim of copyright infringement (Count I) because they have failed to register their copyrights prior to the filing of this action. Second, Defendants assert that Plaintiffs cannot state an adequate claim under the Tennessee Personal Rights Protection Act (Count II) because Jeff Jarrett has previously authorized the use of his name and likeness as a trademark and Defendants own that trademark. Third, Defendants assert that Plaintiffs' claims of copyright infringement and its trademark infringement-related claims (Counts III-X) must be dismissed because Plaintiff Jarrett granted Defendants a license for all acts about which he now complains. Fourth, Plaintiffs have failed to state an adequate claim for abandonment such that their claim to cancel Defendants' "JEFF JARETT" trademark (Count XVII) should be dismissed. And, finally, Defendants assert that this Court should dismiss Plaintiffs' state law claims for unfair competition (Count VIII), unjust enrichment (Count IX), consumer protection (Count X), conversion and trover (County XI), and negligence (Count XII) because, in the absence of their claims under the U.S. Copyright Act and the Lanham Act, this Court should not exercise supplemental jurisdiction over these state law claims, especially due to the lack of diversity jurisdiction.
(Doc. No. 61 at 1-2). The Court need not spend a lot of time discussing these arguments because most are better made in the context of a motion for summary judgment. For now, the allegations in the Second Amended Complaint are accepted as true, and it need only "contain sufficient factual matter ...'to state a claim for relief that is plausible on its face.' " Ashcroft v. Iqbal,
A. Copyright Infringement
In the Second Amended Complaint, Plaintiffs allege that "GFE filed applications for federal copyright registration for each of the sixteen, one-hour GFW Amped videos on August 9, 2018, before the filing of this lawsuit," and that GFE "paid the required filing fees." (SAC ¶¶ 34, 35). The Second Amended Complaint also concedes that the registration process was not completed, but explains that this was a result of "Defendants' unlawful possession and/or deletion of the only master records of the 16 one-hour GFW Amped videos." (Id.). Whatever the reason that the registration process was never completed dooms Plaintiffs' copyright claim.
Section 411(a) of the Copyright Act provides that "no civil action for infringement of the copyright in any United States work
B. Tennessee Personal Rights Protection Act ("TPRPA")
Plaintiffs allege that "Defendants have violated Jarrett's exclusive property rights in his own name, photograph, and other likeness by using his name, photograph, and likeness, as well as his videorecorded performances, in their unauthorized copying, sales, distribution, and marketing of the GFW Amped content." (SAC ¶ 92). As a consequence they seek both monetary and injunctive relief under the TPRPA.
In relevant part, the TPRPA provides:
[a]ny person who knowingly uses or infringes upon the use of another individual's name, photograph, or likeness in any medium, in any manner directed to any person other than such individual, as an item of commerce for purposes of advertising products, merchandise, goods, or services, or for purposes of ... purchases of products, merchandise, goods, or services, without such individual's prior consent, ... shall be liable to a civil action.
Defendants argue they cannot be liable under the TPRPA because Anthem Wrestling had a license to use Jeff Jarrett's likeness. More specifically, they claim that, "as a matter of public record, Defendant Anthem Wrestling owns the trademark JEFF JARRETT, Reg. No. 3269268" for "[t]oy action figures and accessories therefore" in International Class 28 and for "entertainment services, namely wrestling exhibits and performances by professional wrestler and entertainment, providing wrestling news and information via a global computer network" in International Class 41.4." (Doc. No. 62 at 6-7). Attached to the Motion to Dismiss is a copy of what purports to be the Registration issued to TNA by the United States Patent and Trademark Office (Doc. No. 61-1), and what purports to be an assignment to Anthem Wrestling (Doc. No. 61-3) of a large number of Registrations from TNA to Anthem Wrestling.
C. Implied License
Defendants argue that Plaintiffs' claims for both copyright and trademark infringement fail because they had an implied license to use the Amped Content and related items. After all, Plaintiff allege that after Anthem Sports initiated merger discussion, Jarrett was hired by Anthem Wrestling as a consultant to whom Jarrett provided the only set of masters for the Amped Content. Defendant assert in addition that, shortly after being hired as a consultant, Jarrett became Chief Creative Officer for Anthem Wrestling, "with responsibility for all wrestling operations and overall responsibility and full authority for the company's content and programming of all types," and that it was "[u]nder his watch as Chief Creative Officer" the Amped Content was produced as a pay-per-view. (Doc. No. 62 at 11). Defendants submit that "facts similar to this case" were presented in Mahavisno v. Compendia Bioscience, Inc.,
There are two fundamental problems with Defendants' argument. First, Mahavisno was decided in the context of a motion for summary judgment, not a motion to dismiss. This is understandable given the factors that must be considered in determining whether an implied license exists. As explained in another case decided in the context of summary judgment and relied on by Defendants:
An "implied license" is an unwritten license to use a work that the court infers from the circumstances and from the conduct between the parties. See Bridgeport Music, Inc. v. WM Music Corp.,, 398-99 (6th Cir. 2007).... 508 F.3d 394
There is no precise formula for determining whether an implied license exists, but, rather, the court is to examine the "intent" of the parties from the "totality of the circumstances." Jeffrey A. Grusenmeyer & Associates, Inc. v. Davison, Smith & Certo Architects, Inc.,, 514 (6th Cir. 2007). That is, the court should explore, based on the facts and the circumstances of the individual case, whether the evidence supports the notion that the parties, in 212 Fed. Appx. 510 essence, made an agreement permitting the defendant to use the work, consistent with certain understandings or terms. Johnson [v. Jones], 149 F.3d [494] at 500-02 [ (6th Cir. 1998) ]. The key issue, again, is intent, and the key question is whether the facts and the circumstances demonstrate that "the copyright owners intended that their copyrighted works be used in the manner in which they were eventually used." Id. at 502. Generally, the party claiming the existence of an implied license has the burden of proving the license. See Bourne v. Walt Disney Co., , 631 (2nd Cir. 1995). 68 F.3d 621
Melanie Howard Music, Inc. v. Warner Bros. Records, No. 3:08-0979,
Second, while "plaintiff can plead himself out of court by alleging facts which show that he has no claim," Soo Line R.R. Co. v. St. Louis SW Ry. Co.,
D. Abandonment
In Count Thirteen, Plaintiffs allege that Defendants abandoned the "JEFF JARRETT" trademark when Jarrett left his employment with Anthem Wrestling, and assert that Defendants have "no legitimate intent to resume use" of the mark. (SAC¶¶ 189, 191). As a consequence, Plaintiff seek "cancellation of U.S.
This is a close question, but the Court will allow the abandonment claim to go forward at this time. Plaintiffs can plead inconsistent theories of recovery under Rule 8 of the Federal Rules of Civil Procedure, which provides that "a party may state as many claims or defenses as it has, regardless of consistency." Fed. R. Civ. P. 8(d)(1). Admittedly, the factual allegations surrounding the abandonment claim are sparse. Still, it is difficult to allege a negative (i.e. that Defendants are not using a trademark) beyond merely saying so. See Cerveceria Centroamericana, S.A. v. Cerveceria India, Inc.,
As for the closeness in time between Jarrett leaving Anthem Wrestling and the filing of the initial Complaint, the touchstone of abandonment is "discontinued
E. State Law Claims
Finally, Defendants seek dismissal of Plaintiffs' unfair competition (Count VIII), unjust enrichment (Count IX), and Tennessee Consumer Protection Act (Count X) claims based upon the alleged implied license. Defendants also seek dismissal of all of the pendent state law claims for lack of federal jurisdiction. Because, however, there are factual issues not resolvable on a motion to dismiss relating to the implied license issue, and because federal question jurisdiction remains given the pendency of the trademark claim under the Lanham Act,
IV. Conclusion
For the foregoing reasons, Anthem Sports' Motion to Dismiss for Lack of Personal Jurisdiction will be granted as to that entity. Defendants' Motion to Dismiss for Failure to State a Claim will only be granted with respect to Plaintiffs' copyright claim, and all other claims will remain pending as to Anthem Wrestling.
An appropriate Order will enter.
Notes
A plaintiff has the burden of showing personal jurisdiction but "that burden is 'relatively slight' where, as here, the ... court rules without conducting an evidentiary hearing." MAG IAS Holdings, Inc. v. Schmuckle,
Had Anthem Sports not joined in the Motion to Dismiss for Failure to State a Claim, and had the Court found personal jurisdiction over Anthem Sports, Plaintiffs no doubt would be arguing that Anthem Sports waived the licensing argument by not pursuing it.
The plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."
The registration requirement is subject to several exceptions involving movies, musical compositions, or live broadcasts not relevant to this case.
As Plaintiffs point out, "Jeff Jarrett" is both a trade name and the name of an individual, not simply a character name like "The Hulk," or "The Rock."
Plaintiffs also invoke diversity jurisdiction, but Defendants disputes this because of Anthem Wrestling's status as a LLC, and the possibility that one or more of its members may be a Tennessee resident. This is an issue the Court need not address at this point because of the existence of federal question jurisdiction.