TROMA ENTERTAINMENT, INC., Plaintiff-Appellant, - v - CENTENNIAL PICTURES INC., PAN GLOBAL ENTERTAINMENT, LLC, Defendants, LANCE H. ROBBINS, KING BRETT LAUTER, Defendants-Appellees.
Docket No. 12-1883-cv
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
September 6, 2013
Before: JACOBS and SACK, Circuit Judges, and RAKOFF, District Judge.*
August Term, 2013 (Argued: April 29, 2013; Final Submission: July 25, 2013)
Affirmed.
STUART REISER (Manuel A. Arroyo, Rachel Schulman, Esq., on the brief), Shapiro, Croland, Reiser, Apfel & Di Iorio, LLP, Hackensack, NJ, for Plaintiff-Appellant.
Lance H. Robbins, pro se, North Hollywood, CA.
King Brett Lauter, pro se, Marina Del Rey, CA.
Brian Marc Feldman, John P. Bringewatt, Harter Secrest & Emery LLP, Rochester, NY, pro bono amicus curiae at the request of the Court in support of the Defendants-Appellees.*
The subject of this appeal is the reach of New York State‘s long-arm statute in the context of alleged infringement of intellectual property. At issue is
The following facts are drawn from the allegations in Troma‘s complaint, which are taken as true for purposes of resolving this appeal. See Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 56 (2d Cir. 2012).
Troma is a New York-based corporation in the business of producing and distributing “controlled budget motion pictures.” Compl. ¶ 5. Two such motion pictures are spoof films titled “Citizen Toxie, Toxic Avenger Part IV,” created by Troma, and “Poultrygeist: Night of the Chicken Dead,” to which Troma owns distribution rights. Id.
In October 2009, Troma authorized one Lance Robbins to represent it in negotiations concerning the licensing of distribution rights to Citizen Toxie and Poultrygeist to a German distributor. Such authorization was supposed to lapse after thirty days if no agreement was reached. Thirty days passed with Robbins apparently unable to negotiate a deal with a German distributor. At least that was what Troma‘s officers thought.
As it turned out, Robbins, in cahoots with codefendant King Brett Lauter, had, a week prior to receiving authorization, entered into a distribution license in Germany with an outfit called Intravest Beteiligungs GMBH (“Intravest“). Troma alleges that Robbins and Lauter falsely assured Intravest
Troma learned in August 2010 that Intravest, “via pay-per-channel distribution on Silverline AG‘s Movie Channels,” id. ¶ 18, had been broadcasting Citizen Toxie and Poultrygeist in Germany. Troma filed suit on March 7, 2011, against Robbins, Lauter, and two entities that are no longer parties to this litigation, in the United States District Court for the Eastern District of New York. Its complaint alleges copyright infringement under federal law, and state law claims of common law fraud and tortious interference with prospective economic advantage.
In March 2012, Robbins and Lauter, both proceeding pro se, filed motions to dismiss for want of personal jurisdiction. In a memorandum decision and order filed April 10, 2012, the district court (Brian M. Cogan, Judge) concluded that New York State‘s long-arm statute did not permit it to exercise personal jurisdiction over Robbins and Lauter in the Eastern District of New York. Troma Entertainment, Inc. v. Centennial Pictures Inc., 853 F. Supp. 2d 326, 327-30 (E.D.N.Y. 2012).
On April 18, 2012, after Troma advised the district court that it did not wish to pursue a transfer of the action to the Central District of California -- where personal jurisdiction over the defendants could be exercised -- the court entered judgment dismissing Troma‘s lawsuit for lack of jurisdiction and improper venue.
Troma appeals.
DISCUSSION
The only issue before us is whether the district court erred in determining that it lacked personal jurisdiction over Robbins and Lauter under New York State‘s long-arm statute. “A plaintiff bears the burden of demonstrating personal jurisdiction over a person or entity against whom it seeks to bring suit.” Penguin Group (USA) Inc. v. American Buddha (”Penguin I“), 609 F.3d 30, 34 (2d Cir. 2010). At this stage of the proceedings, a plaintiff need only make a ”prima facie showing that jurisdiction exists.” Id. at 34-35. In other
In order to exercise personal jurisdiction over a defendant, a district court must possess a statutory basis for doing so. Id., 2013 U.S. App. LEXIS 16396 at *13. With few exceptions not applicable to the case at bar, the existence of such a statutory basis “is determined by the law of the state in which the court is located,” Spiegel v. Schulmann, 604 F.3d 72, 76 (2d Cir. 2010) -- here, New York.
Troma asserts that personal jurisdiction may be exercised in the Eastern District over Robbins and Lauter through
It is well-settled that “residence or domicile of the injured party within [New York] is not a sufficient predicate for jurisdiction” under
Troma maintains that its allegations amount to more than the assertion of mere economic injury within the state. It relies principally on the New York Court of Appeals’ decision in Penguin Group (USA), Inc. v. American Buddha (”Penguin II“), 16 N.Y.3d 295, 964 N.E.2d 159, 921 N.Y.S.2d 171 (2011), in which the Court answered a question we had certified to it. The plaintiff in that case, Penguin Group, alleged that defendant American Buddha had infringed its copyrights over four books by uploading copies of the books to its Internet website and “making them available free of charge to its 50,000 members and anyone with an Internet connection.” Id. at 300, 964 N.E.2d at 160, 921 N.Y.S.2d at 172. Penguin Group brought suit in the United States District Court for the Southern District of New York, asserting personal jurisdiction within the state pursuant to
When the issue reached us on appeal, we noted that “[n]either the New York Court of Appeals nor this Court has decided what the situs of injury is in an intellectual property case.” Id. at 36. We recognized also that “the fact that the alleged infringement . . . was conducted by means of the Internet and online libraries . . . may affect the [jurisdictional] analysis.” Id. at 34. Finding ourselves
The Court of Appeals accepted our certification, but narrowed our question to address only the situation presented to it in that matter: “copyright infringement cases involving the uploading of a copyrighted printed literary work onto the Internet.” Penguin II, 16 N.Y.3d at 301, 964 N.E.2d at 161, 921 N.Y.S.2d at 173. The Court concluded that, under the circumstances presented, the situs of the injury was the location of the copyright owner -- New York.
The Court of Appeals rested this conclusion on “the convergence of two factors.” Id. at 304, 964 N.E.2d at 163, 921 N.Y.S.2d at 175. The first was the nature of the alleged infringement, viz., the uploading and making available of Penguin Group‘s copyrighted works by means of the Internet. “The crux of Penguin‘s copyright infringement claim,” the Court reasoned, “is not merely the unlawful electronic copying or uploading of the four copyrighted books.” Id. at 304, 964 N.E.2d at 163, 921 N.Y.S.2d at 175. “Rather, it is the intended
The second factor upon which the Court of Appeals rested its decision was “the unique bundle of rights granted to copyright owners.” Id. at 305, 964 N.E.2d at 164, 921 N.Y.S.2d at 176. Infringement of intellectual property, the Court reasoned, could not only cause “indirect financial loss,” but could also “diminish[] the incentive to publish or write,” or engender “market confusion,” presumably leading to the diminution of the value of the rights themselves. Id. at 306, 964 N.E.2d at 164, 921 N.Y.S.2d at 176 (quotation marks omitted). Such injury to intellectual property rights held by New York copyright owners goes beyond mere economic loss suffered in New York. The Court concluded that this was enough to establish the situs of injury as the location of the copyright owner, at least in a case in which, as the Court had already explained, the “nature and
The Court carefully cabined its holding. First, as noted above, it modified the question we certified so as to address only copyright infringement accomplished by uploading to the Internet. And it explicitly declined “to address whether a New York copyright holder sustains an in-state injury pursuant to
As Troma appears to acknowledge, the Court of Appeals’ decision in Penguin II is too narrow to control this case. The plaintiff in Penguin levied allegations of a form of infringement that works an injury that is virtually impossible to localize -- the uploading and making available of copyrighted materials, free of charge, to anyone with an Internet connection. Troma has alleged no such injury. Nowhere in Troma‘s complaint can one find an allegation
Troma is left, then, to rely on the Court of Appeals’ endorsement of the theory that out-of-state infringement may harm the bundle of rights held by a New York-based copyright owner in New York. We acknowledge that this is a plausible theory after Penguin II and agree with Troma‘s characterization of the Court of Appeals’ articulation of it. But it is just that: a theory of injury that -- certainly in cases of the uploading and making available of copyrighted works, but also perhaps in isolation -- may satisfy
Infringement comes in many stripes. It is not the case that any infringement anywhere can be said to diminish incentives to engage in a creative enterprise, or to harm, beyond the immediate loss of profits, the continuing value of one or more of a copyright holder‘s bundle of rights. Certainly the availability of the statutory damage remedy under the copyright laws does not establish automatically that this sort of injury has occurred. And we think it entirely implausible that the infringement alleged by Troma -- discrete, geographically circumscribed theft of the opportunity to license distribution of copyrighted works -- would cause such an injury.
Troma has not articulated a non-speculative and direct injury to person or property in New York that goes beyond the simple economic losses
CONCLUSION
For the foregoing reasons, the judgment of the district court is affirmed.