Opinion
No. 3:01-0707
January 18, 2002
MEMORANDUM
Pending before the Court is the motion of defendants N-The Water Publishing, Inc. and N-The Water Publishing, Inc. d/b/a Still N-The Water Publishing (collectively, "NTW") to dismiss for lack of personal jurisdiction or, alternatively, for improper venue (Docket No. 3). For the reasons set forth below, the motion to dismiss for lack of personal jurisdiction is GRANTED without prejudice, and the motion to dismiss for improper venue is DENIED as moot.
This case is one of several hundred filed by plaintiffs against various defendants in which plaintiffs allege that the defendants, all entities and/or individuals associated with the "rap" or "hip-hop" music industry, have infringed upon plaintiffs' copyrights in several sound recordings and musical compositions by "sampling" these recordings and/or compositions in subsequent recordings, compositions and performances. The First Amended Complaint (Docket No. 2) alleges copyright infringement arising out of the composition titled "Aggravated Monkeys" on the sound recording "Secrets of the Hidden Temple," which plaintiffs allege contains an infringing "sample" of the composition "Good Old Music."
Plaintiffs originally filed one, massive complaint against almost eight hundred defendants alleging close to five hundred causes of action. Bridgeport Music, Inc. v. 11C Music, Case No. 3:01-0412 (M.D. Tenn. 2001). The Court severed the case by count into 476 surviving cases (the "Bridgeport Cases"), including the instant case, by Order dated July 25, 2001 (Case No. 3:01-0412, Docket No. 349).
Plaintiffs have alleged copyright infringement against NTW in ten other Bridgeport Cases (3:01-0749, 3:01-0750, 3:01-0860, 3:01-0869, 3:01-0881, 3:01-0905, 3:01-0964, 3:01-1093, 3:01-1094, and 3:01-1128), each involving a different allegedly infringing composition that was released on one or more sound recordings distributed by defendant Rap-A-Lot Records, Inc.
FACTS
NTW is a Texas corporation with its principal place of business in Texas. NTW claims that there is no basis for asserting personal jurisdiction over it in Tennessee because (1) NTW has never maintained any place of business or substantial presence in Tennessee; (2) NTW does not regularly market, sell, license or otherwise regularly conduct business in Tennessee; (3) NTW has entered into only one contract that could be construed as having been entered into or consummated in Tennessee; and (4) NTW has never maintained a registered agent for service of process in Tennessee. Memorandum of Law in Support of Motion to Dismiss for Lack of Personal Jurisdiction or, Alternatively, for Improper Venue ("NTW's Memorandum") at 9-10 (Docket No. 4).In response, plaintiffs allege that NTW, a music publishing company, has directly and indirectly transacted business in Tennessee by: (1) licensing its musical compositions to be included in sound recordings sold in Nashville, Tennessee; (2) collecting royalties from sales of its compositions in Nashville, Tennessee; (3) licensing performances of its compositions in Tennessee; and (4) licensing one composition to be synchronized in a movie that was released, distributed, sold and is available to rent in Tennessee. Plaintiffs' Response to the Motion to Dismiss for Lack of Personal Jurisdiction or, Alternatively, for Improper Venue of N-The Water Publishing, Inc. d/b/a N-The Water and Still N-The Water ("Plaintiffs' Response") at 1-2 (Docket No. 22). In relation to the subject of these lawsuits, plaintiffs allege that NTW has infringed on plaintiffs' copyrights through "sampling" of its compositions and has participated in the distribution of the infringing compositions and/or sound recordings in Tennessee, thereby committing torts and causing tortious injury in Nashville, Tennessee (Docket No. 22 at 2).
Plaintiffs' jurisdictional allegations in the First Amended Complaint do not provide any factual basis for assertion of jurisdiction, as they recite no facts specific to NTW or any acts or omissions of NTW upon which jurisdiction may be based (Docket No. 2, § 17). However, the Federal Rules of Civil Procedure do not require plaintiffs to plead any facts alleging personal jurisdiction in their complaint. Wright Miller, Fed. Practice and Procedure: Civil 2d § 1363, at 458 (West 1990). The Court must look, then, to plaintiffs' submissions in response to NTW's motion to see if plaintiffs have asserted facts sufficient to establish a prima facie showing of jurisdiction.
Plaintiffs' Response dated Nov. 2, 2001 (Docket No. 22); Statement of Facts in Support of Plaintiffs' Response to the Motion for Lack of Personal Jurisdiction or, Alternatively, for Improper Venue of N-The Water Publishing, Inc. d/b/a N-The Water and Still N-The Water dated Nov. 2, 2001 ("Statement of Facts") (Docket No. 23) and exhibits thereto; Transcript of the July 23, 2001 deposition of Bruce Toval (Docket No. 23, Ex. A); Declaration of Kerry Flanagan executed on July 23, 2001 (Docket No. 23, Ex. B); Affidavit of Billie Lowe sworn to Nov. 2, 2001 (Docket No. 23, Ex. C); and Plaintiffs' Additional Filing Concerning Defendant Still N-The Water Publishing's Motion to Dismiss for Lack of Personal Jurisdiction filed Nov. 30, 2001 ("Plaintiffs' Surreply") (Docket No. 36).
In their Statement of Facts (Docket No. 23), plaintiffs allege that:
NTW is a music publisher whose three main sources of income are mechanical royalties, performance royalties and synchronization royalties (§§ 5,20);
NTW does business as both N-The Water Publishing (which is affiliated with ASCAP) and Still N-The Water Publishing (which is affiliated with BMI) (§§ 8-9);
NTW granted a mechanical license to Rap-A-Lot Records, Inc. ("RAL") for the allegedly infringing composition to be included in a sound recording released by RAL, from which NTW has received royalty income (§§ 23-24, 49);
RAL is a nationally distributed record label, and NTW understood that RAL intended to sell the sound recordings containing NTW's musical compositions on a nationwide basis (§§ 42-45);
RAL is an affiliate of NTW — RAL was wholly owned prior to 1996 by James Price (who wholly owned NTW prior to 1994), RAL's office is located at the same address as NTW's, RAL licenses 85% of NTW's compositions, and RAL pays less than the statutory royalty rate for those licenses (§§ 11-12, 15-16, 27, 34);
RAL advertises its sound recordings on a national basis, including in national magazines, radio spots, newspaper ads and national TV ads, and "probably" advertised some of the sound recordings containing allegedly infringing compositions (§§ 52-54);
RAL's sound recordings that contain allegedly infringing compositions are available for sale in Nashville, Tennessee (§§ 57-59);
NTW is affiliated with the American Society of Composers Authors Publishers ("ASCAP") and Broadcast Music, Inc. ("BMI"), performing rights organizations that administer licenses with third parties for live performances nationwide of NTW's compositions, collect licensing fees from these performances and remit them to NTW, and police performances by bringing suit against third parties for unauthorized performances (§§ 82-89);
Both ASCAP and BMI have offices in Nashville, Tennessee (§ 83);
BMI and ASCAP license NTW compositions to third parties in Tennessee, including the allegedly infringing compositions (§ 91);
NTW has licensed one of the allegedly infringing compositions, "Having Thangs, " for synchronization in the nationally released film "Dangerous Minds," for which NTW received a flat fee of around $20,000 (§§ 95-96);
The film "Dangerous Minds" is available for sale and rental in Nashville, Tennessee, and was released in movie theaters in Nashville, Tennessee (§§ 99-100);
In 1998, NTW entered into a contract with Bluewater Music Co., a Tennessee company, to monitor NTW publishing interests in foreign markets (§§ 101- 102);
The sound recordings containing the allegedly infringing compositions are available for sale over the Internet (§ 105).
A mechanical license is a license from the copyright holder for use of its composition in a sound recording in return for payment of a royalty; royalties are usually paid each time a copy of the sound recording is sold. Statement of Facts, §§ 22-23, 25-26 (Docket No. 23).
Performance royalties are earned when a composition is played on the radio, in business or service establishments, or at live concerts. Statement of Facts, § 81 (Docket No. 23).
A synchronization license is a license for use of a composition in a film, pre-recorded radio or television program, or radio or television commercial. 2 LINDEY ON ENTERTAINMENT, PUBLISHING AND THE ARTS § 7.01 (2d ed. 2000); Statement of Facts, § 93-94 (Docket No. 23).
"Having Thangs" is the subject composition in Bridgeport Case No. 3:01-0881.
The question for the Court is whether the foregoing facts provide a sufficient basis for this Court to assert personal jurisdiction over NTW.
ANALYSIS I. Standard
On a motion to dismiss for lack of personal jurisdiction, plaintiffs have the burden of setting forth specific facts in support of the Court's exercise of personal jurisdiction over the moving defendants. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). Plaintiffs cannot rely solely on the allegations pleaded in their complaint. Id.
The Sixth Circuit has clearly defined the procedure and standards for determining personal jurisdiction. See Dean v. Motel 6 Operating L.P., 134 F.3d 1269, 1271-1272 (6th Cir. 1998) (citing Serras v. First Tennessee Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989)). The district court may determine the motion on the basis of affidavits alone; it may permit discovery in aid of the motion; it may conduct an evidentiary hearing on the merits of the motion, or it may reserve its decision until trial. Serras, 875 F.2d at 1214. Plaintiffs may defeat the motion by making a prima facie showing of jurisdiction in their pleadings and affidavits, which must be considered by the court in a light most favorable to plaintiffs. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996). This burden changes if die court chooses to hold an evidentiary hearing; plaintiffs must then establish jurisdiction by a preponderance of the evidence. Id. If the court chooses to rule on the motion without conducting an evidentiary hearing, it "does not weigh the controverting assertions of the party seeking dismissal." Id. (quoting Theunissen, 935 F.2d at 1459). The Sixth Circuit has determined that "[a]ny other rule would empower a defendant to defeat personal jurisdiction merely by filing a written affidavit contradicting jurisdictional facts alleged by a plaintiff" Serras, 875 F.2d at 1214. "Dismissal in this procedural posture is proper only if all the specific facts which the plaintiff alleges collectively fail to state a prima facie case for jurisdiction." CompuServe, 89 F.3d at 1262. If the defendant's written submissions raise disputed issues of fact or require determinations of credibility, the court may exercise its discretion to hold an evidentiary hearing, or may reserve the issue for trial. Dean, 134 F.2d at 1272.
NTW has filed a Reply Memorandum in which it challenges some of the factual assertions made by plaintiffs. Memorandum of Law in Support of NTW's Reply to the Plaintiffs' Response to NTW's Motion to Dismiss for Lack of Personal Jurisdiction or, Alternatively, for Improper Venue ("NTW's Memorandum") at 3 (Docket No. 31). Because the Court has chosen to rule on the parties' written submissions, it cannot give weight to any of NTW's controverting assertions. CompuServe, 89 F.3d at 1262. NTW's Reply Memorandum also raises the issue that plaintiffs did not reply to NTW's Request for Admissions in the time allowed (Docket No. 31 at 2). Plaintiffs' response was filed with the Court on Nov. 30, 2001, as Exhibit A to its Surreply (Docket No. 36). The Court finds that no prejudice to NTW has occurred from the late response.
Because this action raises a federal question, the Court must analyze the personal jurisdiction issue pursuant to Rule 4(k) of the Federal Rules of Civil Procedure, which requires this Court to consider whether jurisdiction over the defendant is consistent with the specific requirements of Tennessee's long-arm statute and constitutional principles of due process See e.g., Mitchell v. White Motor Credit Corp., 627 F. Supp. 1241, 1246 (M.D. Tenn. 1986). Under Tennessee's long-arm statute, jurisdiction may be asserted on "[a]ny basis not inconsistent with the constitution of this state or of the United States." TENN. CODE. ANN. § 20-2-214(a)(6). This subsection has been interpreted to extend to the limits of personal jurisdiction imposed by the Due Process Clause. Payne v. Motorists' Mutual Ins. Cos., 4 F.3d 454, 455 (6th Cir. 1993).
See also TENN. CODE. ANN. § 20-2-223.
The Court's Due Process analysis is governed by the Fifth Amendment of the United States Constitution instead of the Fourteenth Amendment in a federal question case such as this one; however, the standards to be applied under the Fifth Amendment are essentially the same as those applicable under the Fourteenth Amendment. See, e.g., Dakota Inds., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1389 n. 2 (8th Cir. 1991).
The Supreme Court has held that personal jurisdiction over a defendant comport with the Due Process Clause where that jurisdiction stems from "certain minimum contacts with [the forum] such that maintenance of the suit does not offend "traditional notions of fair play and substantial justice."' Calder v. Jones, 465 U.S. 783, 788, 104 S.Ct. 1482, 1486, 79 L.Ed.2d 804 (1984) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 158, 90 L.Ed. 95 (1945)).
Personal jurisdiction may be general or specific depending on the nature of the contacts in a particular case. Compuserve, 89 F.3d at 1263. General jurisdiction exists "when a defendant has 'continuous and systematic contacts with the forum state sufficient to justify the state's exercise of judicial power with respect to any and all claims."'Aristech Chemical Int'l Ltd. v. Acrylic Fabricators Ltd., 138 F.3d 624, 627 (6th Cir. 1998) (quoting Kerry Steel v. Paragon Indus. Inc., 106 F.3d 147, 149 (6th Cir. 1997)). Specific jurisdiction, on the other hand, subjects the defendant "to suit in this forum state only on the claims that 'arise out of or relate to' a defendant's contacts with the forum."' Id.
The Sixth Circuit has established three criteria to be used in determining whether specific jurisdiction exists in a particular case:
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.Payne, 4 F.3d at 455 (quoting Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)). The "purposeful availment" requirement is "the sine qua non of in personam jurisdiction." Mohasco Indus., 401 F.2d at 381-82. It is satisfied "when the defendant's contacts with the forum state 'proximately result from actions by the defendant himself that create a "substantial connection" with the forum State,' and when the defendant's conduct and connection with the forum are such that he 'should reasonably anticipate being haled into court there."' CompuServe. Inc., 89 F.3d at 1263 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-74, 105 S.Ct. 2174, 2183-84, 85 L.Ed.2d 528 (1985)). A defendant should not be haled into a jurisdiction where his contacts are random, fortuitous, or attenuated. Id. Plaintiffs argue that NTW is subject to both general and specific jurisdiction.
Venue
In addition to its jurisdictional challenge, NTW also argues that venue is not proper in the Middle District of Tennessee. The venue provision of the Copyright Act provides that "[c]ivil actions, suits, or proceedings arising under any Act of Congress relating to copyrights . . . may be instituted in the district in which the defendant or his agent resides or may be found." 28 U.S.C. § 1400(a). It is widely accepted that, for the purposes of this venue provision, a defendant is "found" wherever personal jurisdiction can be properly asserted against it. Linzer v. EMI Blackwood Music, Inc., 904 F. Supp. 207, 214 (S.D.N.Y. 1995). Therefore, if NTW is subject to the personal jurisdiction of this Court, then venue would properly lie in this District. Walker v. Concoby, 79 F. Supp.2d 827, 835 (N.D. Ohio 1999).
II. NTW Does Not Have Systematic And Continuous Contacts with Tennessee
In arguing for assertion of general jurisdiction over NTW, plaintiffs point to activities of RAL (Docket No. 22 at 9-12). In order to attribute RAL's activities to NTW for the purposes of jurisdiction, plaintiffs must show that RAL is either an agent or alter ego of NTW. Plaintiffs' assertions, however, fall short of showing the existence of either relationship. See Hospital Underwriting Group, Inc. v. Summit Health Ltd., 791 F. Supp. 627, 633 (M.D. Tenn. 1989) (essential test under Tennessee law for existence of agency relationship is right of control);In re Telectronics Pacing Systems, Inc., 953 F. Supp. 909, 918-920 (S.D. Ohio 1997) (facts alleging alter ego relationship for purposes of jurisdiction must indicate either attribution (instigation of local entity's activities by foreign entity) or merger (ownership, control or integrated management)).
Plaintiffs allege that RAL is an affiliate of NTW for several reasons (Docket No. 23,§§ 14-19). From 1992 to 1994, both entities were wholly owned by James Prince; Mr. Prince sold his interest in NTW to his wife in 1994, and sold his interest in RAL to Noo-Trybe Records in 1996 (Docket No. 23, §§ 11-12, 15-16). Plaintiffs have not indicated whether the period of common ownership coincides with the dates of alleged acts of infringement, so as an initial matter, the Court cannot determine whether the period of common control is at all relevant to this action. Because plaintiffs do not allege that Mr. Prince continues to control both entities, there is no basis to find attribution between NTW and RAL. See Telectronics, 953 F. Supp. at 918. Additionally, plaintiffs have not alleged sufficient indicators of merger — e.g., interchange of personnel, exchange of documents and records, or any acts by NTW and RAL that indicate they are part of the same entity — to support a finding of an alter ego relationship. See Telectronics, 953 F. Supp. at 919. Plaintiffs have alleged that NTW and RAL operate at the same location, that NTW licenses most of its compositions to RAL, and that RAL pays favorable royalty rates to NTW (Docket No. 23, §§ 18, 27, 34). The Court concludes that these allegations of merger between NTW and RAL are not sufficient to justify attributing RAL's activities to NTW for jurisdictional purposes. Cf. Telectronics, 953 F. Supp. at 919 (association between entities "deep and wide-ranging and evidences 'undue control"'). Because plaintiffs have not made any allegations that NTW exerts control over RAL, RAL is not an agent of NTW and there is no basis for attributing any of RAL's activities to NTW for jurisdictional purposes. See Hospital Underwriting, 791 F. Supp. at 633.
Plaintiffs' allegations regarding NTW's contacts with Tennessee do not rise to the level of "continuous and systematic contacts" and therefore there is no basis to assert general jurisdiction. Aristech, 138 F.2d at 627. Plaintiffs assert that the activities of ASCAP and BMI in Tennessee can be imputed to NTW for the purposes of jurisdiction because ASCAP and BMI are essentially agents of NTW. (Docket No. 22 at 8-10). The cases cited by plaintiffs in support of this proposition — In re Magnetic Audiotape Antitrust Litigation, 99 Civ. 1580, 2001 U.S. Dist. LEXIS 5160, *15 (S.D.N.Y. Feb. 20, 2001); Top Form Mills, Inc. v. Sociedad Nationale Industria Applicazioni Viscosa, 428 F. Supp. 1237, 1242 (S.D.N.Y. 1977); and Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116, 120-121 (2d Cir. 1967) — are clearly distinguishable from the facts presented here. ASCAP and BMI are alleged to be performance rights organizations, not music publishers (Docket No. 23, §§ 82). ASCAP and BMI provide only licensing services to NTW. In order to assert an agency relationship from which jurisdiction can be imputed, based on the case law cited by plaintiffs, plaintiffs would have to show that ASCAP'S and BMI's activities here are the same as NTW's would be if NTW had a Tennessee office — i.e., they would be performing the functions of a music publishing company in Tennessee. No such showing has been made.See Magnetic Audiotape, 2001 U.S. Dist. LEXIS 1560 at * 15 (non-resident defendant not involved in magnetic audiotape business during relevant period, therefore subsidiaries could not have been doing what non-resident defendant would do if subsidiaries did not exist). The Court concludes that the activities of ASCAP and BMI cannot be imputed to NTW for the purposes of establishing jurisdiction. See also R. L. Lipton Distrib. Co. v. Dribeck Importers, Inc., 811 F.2d 967, 970 (6th Cir. 1987) (conduct and contacts of independent distributor over which non-resident defendant had little, if any, control not attributed to defendant); Hospital Underwriting, 791 F. Supp. at 633.
Of plaintiffs' remaining assertions of contacts between NTW and Tennessee — NTW has entered into one contract with Bluewater, a Tennessee company, NTW has received royalties from sales of sound recordings containing its compositions in Tennessee and over the Internet, and NTW has granted a synchronization license for use of one of its compositions in a nationally distributed film — only the Bluewater contract arguably shows NTW purposefully availing itself of the benefits of doing business in Tennessee. However, merely entering into one contract with a Tennessee company does not amount to "continuous and systematic contacts." See State Indus., Inc. v. Beckett Gas, Inc., 200 F.R.D. 392, 397 (M.D. Tenn. 2001) (single fact that defendant sold some products to some Tennessee residents insufficient to establish general jurisdiction), and cases cited therein. Therefore, the Court declines to exercise general jurisdiction over NTW.
III. Plaintiffs' Assertions Fail To Establish that NTW Purposefully Availed Itself of this Forum
In order for this Court to assert specific jurisdiction over NTW, plaintiffs must establish the following three criteria: (i) NIW must be shown to have purposefully availed itself of the privilege of acting in Tennessee or causing a consequence in Tennessee; (ii) the cause of action must arise from NTW's activities here; and (iii) the acts of NTW or consequences caused by it must have a substantial enough connection with Tennessee to make the exercise of jurisdiction over the defendant reasonable. Payne, 4 F.3d at 455. Plaintiffs have failed to establish that NTW has purposefully availed itself of this forum, and therefore NTW is not subject to the specific jurisdiction of this Court. Conti v. Pneumatic Products Corp., 977 F.2d 978, 982 (6th Cir. 1992).
"The most authoritative formulation of the [purposeful availment] requirement . . . has been provided by the Supreme Court: 'it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." International Tech. Consultants, Inc. v. Euroglas, S.A., 107 F.3d 386, 395-396 (6th Cir. 1997) (quoting Burger King, 471 U.S. at 475, 105 S.Ct. at 2183).
Plaintiffs argue that NTW has purposefully availed itself of the privilege of doing business in Tennessee by entering into a contract with Bluewater, and by entering into contracts with national record companies, national movie companies, and ASCAP and BMI to supply its compositions to Tennessee to earn the maximum amount of profits from Tennessee. Plaintiffs cite three cases in support thereof: Linzer v. EMI Blackwood Music, 904 F. Supp. at 214; Triple A Partnership v. MPL Communications, Inc., 629 F. Supp. 1520, 1524 (D. Kan. 1986); and Gray v. St. Martin's Press, 929 F. Supp. 40, 48 (D.N.H. 1996). The Court does not find these cases to be persuasive as to NTW's purposeful availment of this forum.
Plaintiffs have not alleged that the Bluewater contract has any connection to the alleged acts of infringement in this action. NTW's Reply Memorandum at 3 (Docket No. 31). Therefore, this contact with Tennessee cannot be used as a basis of assertion of specific jurisdiction. Payne, 4 F.3d at 455.
In Linzer, the plaintiffs were songwriters who claimed copyright interests in a collection of songs performed by the musical group The Four Seasons and brought an action against the group in the district court for the Southern District of New York. 904 F. Supp. at 211. In deciding whether jurisdiction existed over two individual members of the group under New York's long-arm statute, the Linzer court analyzed whether the individual defendants' contacts satisfied the requirements of that statute, but it did not perform a separate due process analysis as required in this Circuit. See CompuServe, 89 F.3d at 1263 ("crucial federal constitutional inquiry" is whether non-resident defendant has sufficient contacts; citing three criteria of purposeful availment, cause of action arising from activities in forum, and substantial connection of defendant's activities to forum). The Linzer court determined that the individuals' contracts with two licensing agencies located in New York that conducted their activities, including passing on royalties to the individuals, in New York, were sufficient to satisfy the requirements of "transacting business" in New York under the long-arm statute. Id. at 213. The court relied on the holding in Greenky v. Irving Music, Inc., 217 U.S.P.Q. 750 (S.D.N.Y. 1981), where the court found that "by soliciting services of New York licensing agents for the licensing and promotion of the Songs in this state and throughout the nation, a party contracts to sell its goods or services here and thus exposes itself to the jurisdiction of New York courts" (emphasis added). Id. at 214.
Here, plaintiffs have not shown that NTW's contracts with ASCAP or BMI provide for the provision of services in Tennessee, and while both ASCAP and BMI maintain offices in Tennessee, they are New York corporations and plaintiffs have proffered no facts to support the conclusion that their activities on behalf of NTW. including collecting and delivering royalty payments to NTW, are performed here as opposed to New York or elsewhere. Therefore, this Court does not find the reasoning in Linzer to be dispositive as to activities of all licensing agencies, and, without any Tennessee-specific facts in the record, declines to attribute ASCAP's or BMI's activities to NTW as purposeful availment. State Indus., 200 F.R.D. at 396.
NTW's Memorandum at 7 (Docket No. 4).
The Linzer court also found that the individual defendants were alleged to have committed several tortious acts that brought them within the ambit of New York's long-arm statute. 904 F. Supp. at 214. One of those torts was copyright infringement, which, under New York law, is a commercial tort deemed to have occurred at the point of consumer purchase. Id. (citing Lipton v. The Nature Co., 781 F. Supp. 1032, 1036 (S.D.N.Y. 1992)). Plaintiffs claim that another basis for specific jurisdiction to be asserted against NTW is that NTW is alleged to have committed the commercial tort of copyright infringement in Tennessee (Docket 22 at 18-19).
Whether copyright infringement is a commercial tort for the purposes of Tennessee's long-arm statute appears to be an open question. CompareLipton, 781 F. Supp. at 1036 (non-resident defendant that commits copyright infringement through sales by independent brokers or retail agents subject to jurisdiction under tortious act provision of New York's long-arm statute), with Selle v. Gibb, No. 78 C 3656, 1979 U.S. Dist. LEXIS 10623, * 12-13 (N.D. Ill. Aug. 2, 1979) (cause of action against record company for copyright infringement does not arise from company's telephone solicitation of orders for infringing sound recording in Illinois). Neither party cites Sixth Circuit or Tennessee case law on this issue. NTW cites Ham v. La Cienega Music Co., 4 F.3d 413 (5th Cir. 1993), as standing for the proposition that allegations of distribution and exploitation of a defendant's copyrights within the forum are not sufficient bases for a finding of jurisdiction (Docket No. 4 at 14-18). NTW, however, misstates the holding in that case. The Fifth Circuit found that the plaintiff had "presented evidence that these efforts have borne fruit in Texas" and thus connected the defendants to Texas wider the Fifth Circuit's stream of commerce cases. Id. at 416. However, the Fifth Circuit upheld dismissal of the declaratory judgment action for lack of jurisdiction on the basis that the plaintiff had failed to show a sufficient nexus between the cause of action and defendants' exploitation activities: "resolution of this action depends solely upon whether [plaintiff's composition] infringed copyrights owned by [defendants]. Exploitation of the 'Boogie Chillen' copyrights by the defendants in no way relates to the merits of that question." Id.
The question remains, therefore, whether in the Sixth Circuit activities amounting to exploitation of an allegedly infringing copyright within the forum state are sufficient contacts by themselves to satisfy the purposeful availment requirement of the due process inquiry. This Court concludes that, without a showing of any additional conduct directed towards the state, mere generalized exploitation of a copyright in the stream of commerce does not amount to purposeful availment. To find otherwise would mean that a copyright infringement defendant would be subject to personal jurisdiction in any forum in which a copy of the allegedly infringing work was ultimately sold by others without the defendant taking any further acts directed at that forum. Such a broad rule would amount to a judicial rewriting of the Copyright Act to provide for nationwide service of process (see Johnson v. Tuff N Rumble Management, Inc., Civ. No. 99-1374, 1999 U.S. Dist. LEXIS 19574, *10 (E.D. La. Dec. 14, 1999) (no nationwide service of process under Copyright Act)), and is contrary to the Sixth Circuit's approach to stream of commerce cases. See Tobin v. Astra Pharm. Products, Inc., 993 F.2d 528, 542-544 (6th Cir. 1993) (adopting "stream of commerce plus" approach advanced by O'Connor plurality opinion in Asahi Metal Inds. Co. v. Superior Court, 480 U.S. 102, 112, 107 S.Ct. 1026, 1032 (1987));CompuServe, 89 F.2d at 1265 (injection of product into stream of commerce "without more, would be at best a dubious ground for jurisdiction").
For the same reasons, the Court declines to follow the decision inTriple A Partnership, in which the district court interpreted Kansas's long-arm statute to extend jurisdiction over two music publishing companies whose only contacts with the forum were through the licensing activities of two performance rights organizations, an out-of-state licensing agency and the sale of sheet music by an out-of-state print publisher. 629 F. Supp. at 1521. First, the court's decision in Triple A Partnership is heavily dependent upon language in Kansas's long-arm statute that includes acts of a defendant's "agent or instrumentality" as basis for jurisdiction. Id. at 1522-1523. As discussed above, this Court has already ruled that the activities of RAL, ASCAP and BMI do not provide an independent basis for assertion of jurisdiction against NTW. Second, the Triple A Partnership court applied the stream of commerce theory for its due process analysis, reasoning that the defendant had delivered its product (the allegedly infringing work) into the stream of commerce by entering into licensing agreements and deriving revenues from sales of the song by the licensing agency and the print publisher. Id. at 1524. In this Circuit, the mere act of placing goods into the stream of commerce is not a sufficient basis for jurisdiction without a showing ofadditional conduct directed at the forum that indicates purposeful availment. Tobin at 544. Because there was no showing of additional conduct in Triple A Partnership, this case does not comport with Sixth Circuit law. Finally, the plaintiff in that case was a Kansas resident, and the court noted that Kansas had an interest in protecting the proprietary interests of its residents. Id. at 1525. No such interest can be asserted here, where plaintiffs are not residents of Tennessee, nor do they have any other significant contact with this forum.
The Court finds that Gray v. St. Martin's Press also fails to support a finding by this Court of purposeful availment. 929 F. Supp. 40. Gray is a defamation case in which the district court in New Hampshire admitted that the "evidence of purposeful availment is not particularly strong" where the defendant author had no contacts with New Hampshire other than the contract with her publisher to distribute and sell the book nationally. Id. at 48. The court applied Justice O'Connor's "stream of commerce plus" theory (Asahi Metal, 480 U.S. at 112, 107 S.Ct. at 1032) and found that the author's contract with the publisher for national distribution of the book and her receipt of a royalty payment for each book sold provided the "additional conduct" needed and evidenced "an intent to serve every forum encompassed by the Contract, including the consumers of New Hampshire." Id. This Court does not find this reasoning persuasive.
In the Sixth Circuit, the additional conduct element is not satisfied by a passive agreement to receive compensation if and when goods are sold in the forum. See State Indus., 200 F.R.D. at 396, where the plaintiff in a patent infringement action made a stream of commerce argument based on its allegations that the non-resident defendant had sent the allegedly infringing gas burners into the state through an established distribution channel. The District Court ruled that the plaintiff's claim that the defendant had sold the burners with knowledge that heaters containing those burners would be sold in Tennessee was insufficient without any evidence "of purposeful action directed toward Tennessee" by the defendant. Id.; see also Bailey v. Turbine Design, 86 F. Supp.2d at 795 (where jurisdiction was sought based on publication of allegedly defamatory statements on corporate defendant's website, plaintiff failed to show that defendants had any contacts with Tennessee other than website posting, or made any effort to "reach out to Tennessee residents, any more than to persons residing elsewhere"). These cases illustrate that in this Circuit, additional conduct requires a purposeful action directed at the state by the defendant in addition to placing its product in the stream of commerce. See CompuServe, 89 F.2d at 1264, 1265 ("There is no question that [defendant] himself took actions that created a connection with Ohio"; defendant both injected product into stream of commerce and entered into contract with plaintiff, an Ohio internet service provider).
In both their Response and Surreply, plaintiffs cite to Editorial Musical Latino Americana v. MAR Internat'l Records, Inc. where the district court found personal jurisdiction over a record label based on its distribution of the allegedly infringing record to several stores in New York (Docket No 22 at 13-14; Docket No. 36 at 3). The Editorial Musical court in its due process analysis did not look for any additional conduct with the State of New York, following Second Circuit law that has rejected the "stream of commerce plus" approach. 829 F. Supp. at 66. This case does not provide the Court with any guidance as to whether the facts alleged by plaintiffs amount to additional conduct under Sixth Circuit law.
Having found that plaintiffs have failed to show that NTW has purposefully availed itself of this forum, it is not necessary to determine whether plaintiff's showing fulfills the two remaining criteria for jurisdiction in this Circuit — that the cause of action arises from activities in the forum, and that a substantial connection exists between defendant's activities and the forum such that exercise of jurisdiction would be reasonable. CompuServe, 89 F.3d at 1263. Nor is it necessary to address defendant's arguments regarding improper venue.
For the foregoing reasons, the motion of defendants N-The Water Publishing, Inc. and N-The Water Publishing, Inc. d/b/a Still N-The Water Publishing to dismiss for lack of personal jurisdiction is GRANTED. Defendants' motion to dismiss for improper venue is DENIED as moot.