Opinion
03 Civ. 0520 (LAP)
March 1, 2004
OPINION
Facts
Defendant, Major Trading, Inc., moves to dismiss plaintiff Capitol Records, Inc.'s action for copyright infringement on the ground of improper venue pursuant to F.R.C.P. 12(b)(3) and Section 1406 of Title 28 of the United States Code. Alternatively, defendant seeks to transfer venue to the United States District Court for the Central District of California pursuant to 28 U.S.C. § 1404. The plaintiff's claims arise out of Major Trading's sales and distribution of "The Jazzman" Versions 1, 2 and 3 (the "Jazzman"), a mechanical doll which plaintiff alleges utilizes an unauthorized copy of its copyrighted sound recording "Surrender." Major Trading is a California corporation and does not maintain a place of business in New York. Major Trading further claims that its witnesses are located in California, along with files and other materials germane to the case. Nonetheless, it appears undisputed that Major Trading made sales of the doll to entities in New York that, in turn, resold the allegedly infringing product in New York.
Venue
In an action for copyright infringement, venue is controlled by 28 U.S.C. § 1400(a), which states that an action may be brought "where the defendant or his agent resides or may be found." Editorial Musical Latino Americana. S.A. v. Mar Int'l. Records. Inc., 829 F. Supp. 62, 66 (S.D.N.Y. 1993). "It is well-established that a defendant `may be found' in any district in which he is amenable to personal jurisdiction; thus, venue and jurisdiction are coextensive."Id. at 66; Lipton v. The Nature Company, 781 F. Supp. 1032, 1035 (S.D.N.Y. 1992); Business Trends Analysts v. Freedonia Group, Inc., 650 F. Supp. 1452, 1456 (S.D.N.Y. 1987). Accordingly, venue is properly exercised by this Court under New York long-arm statute CPLR 302(a)(2). Under this subsection, a court may exercise jurisdiction "over any non-domiciliary . . . who in person or through an agent . . . commits a tortious act within the state." N.Y.C.P. L.R. 302(a)(2). "Copyright infringement is a commercial tort that is deemed to take place at the point of consumer purchase." Lipton, 781 F. Supp. at 1035 (internal quotations omitted); Dan-Dee Int'l., Ltd v. KMart Corp., 2000 WL 1346865, at *4 (S.D.N.Y. Sept. 19. 2000)(mem.); Business Trends, 650 F. Supp. at 1456. In the instant case, Major Trading is alleged to have purposely made sales of an infringing product to entities in New York, thus making it amenable to suit under 302(a)(2). See Editorial, 829 F. Supp. at 64 (stating that offering even one copy of an infringing work for sale in New York, even if there is no actual sale, "constitutes commission of a tortious act within the state sufficient to imbue the Court with personal jurisdiction over the infringers"); see also Pecoware Co. v. Posh Int'l., Ltd., 2004 WL 210634, at *1 (S.D.N.Y. Feb. 4, 2004) (holding that the sale of even "a small amount of allegedly infringing goods to one or more buyers in New York" was sufficient to satisfy 302(a)).
Moreover, under certain circumstances a non-domiciliary who merely supplies infringing goods to the party that ultimately passes them off in New York may be subject to jurisdiction under 302(a)(2). Topps Co. v. Gerrit J. Verburg Co., 961 F. Supp. 88, 91 (S.D.N.Y. 1997);see Lipton, 781 F. Supp. at 1035-36 ("[e]ven if a non-domiciliary defendant commits infringement through sales by independent brokers or retail merchants in New York, this constitutes tortious conduct within New York and subjects the defendant to jurisdiction under CPLR 302"); Linzer v. EMI Blackwood Music, Inc., 904 F. Supp. 207, 214 (S.D.N.Y. 1995). Specifically, the supplier must sell the goods to the latter party with full knowledge that the goods will or can be reasonably expected to be sold in New York, where they will infringe plaintiff's copyright. Topps, 961 F. Supp. at 91;Dan-Dee, 2000 WL 1346865, at *4. Here, Major Trading hardly disputes that it made sales to at least two New York entities, or that it was unaware that the product it supplied and distributed would eventually be resold in New York. Further, plaintiff's cause of action clearly arises from the defendant's attempts to sell or distribute its products in New York, so the nexus requirement of 302(a) — that the cause of action arise from the acts of the defendant that form the basis for personal jurisdiction — is satisfied.
Indeed, Major Trading's briefs are largely devoid of claims to contradict plaintiff's assertion that sales and/or distributions were made to entities in New York. Instead, Major Trading chooses to argue that the situs of these allegedly violative sales is nonetheless California, using dubious assertions such as, "since the product was allegedly sold and distributed by Defendants, any copyright violations would have arisen where the Defendant maintains its business, to wit, in California." (Def. Motion to Dismiss ¶ 9.)
Major Trading's argument that it does not reside in New York and that the principal events in this dispute took place in California are essentially irrelevant for purposes of determining the propriety of venue under CPLR 302(a)(2). Major Trading's appeals to the constitutional due process requirements of International Shoe are similarly unavailing. New York courts are in accord that § 1400(a) "require [s] no more contact than is required by a state's long arm statute."Business Trends, 650 F. Supp. at 1456; World Film Servs., Inc. v. RAI Radiotelevisione Italiana S.p.A., 1999 WL 47206, at *7 (S.D.N.Y. Feb. 3, 1999)(mem.);Editorial, 829 F. Supp. at 66. Having established statutory jurisdiction, International Shoe and its progeny deal with a separate constitutional due process issue: whether a defendant not physically present within the forum state has certain minimum contacts of sufficient quality and nature such that a statutory exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice. See Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102 (1987). Put differently, the question becomes whether the defendant's conduct and connections with New York are such that it should reasonably anticipate being haled into court here.World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
The Court's exercise of personal jurisdiction in this case does not offend due process. "Ordinarily . . . if jurisdiction is proper under the CPLR, due process will be satisfied because CPLR § 302 does not reach as far as the constitution permits." Topps, 961 F. Supp. at 90 (emphasis added); Banco Ambrosiano, S.p.A. v. Artoc Bank Trust, Ltd., 62 N.Y.2d 65, 7-1 (1984). Here, an actual sale of the allegedly infringing product by Major Trading to an entity in New York satisfies minimum contacts analysis and renders Major Trading amenable to suit in this Court. Moreover, even assuming Major Trading's activities were limited to distribution, while mere knowledge that an item sold is destined for New York will not support a finding of personal jurisdiction, "[t]he forum state does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state." World-Wide Volkswagen, 444 U.S. at 297-98; Editorial, 829 F. Supp. at 65. Accordingly, Major Trading has not demonstrated that venue is improper in this district.
This is an important distinction from Paradise Prods. Corp. v. Allmark Equip. Co., Inc. (Def. Reply Br. at 6 n. 4) where the court rejected jurisdiction because mere "[knowledge] that a product may be destined for a particular forum is insufficient . . . to sustain jurisdiction." 526 N.Y.S.2d 119 (N.Y.App.Div. 1988) (plaintiff contracted to have a kettle shipped to New York, but instead picked up the kettle in New Jersey and brought it into New York to avoid shipping charges).
Transfer
"Motions for transfer lie within the broad discretion of the district court and are determined upon notions of convenience and fairness on a case-by-case basis." Hall v. South Orange, 89 F. Supp.2d 488, 493 (S.D.N.Y. 2000); In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992). The party seeking a transfer of venue bears the significant burden of making a clear and convincing showing that the case should be transferred. Editorial, 829 F. Supp. at 66;Lipton, 781 F. Supp. at 1036 ("heavy burden" in a copyright infringement action); Rolls-Royce Motors. Inc. v. Charles Schmitt Co., 657 F. Supp. 1040, 1060 (S.D.N.Y. 1987) ("clear cut showing"). The plaintiff's choice of forum is accorded great weight and must be deferred to unless the balance of conveniences strongly favors the defendant. Editorial, 829 F. Supp. at 66; see Lipton, 781 F. Supp. at 1036 ("[U]nless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed"). Factors to be weighed by a court considering a motion to transfer include the convenience of witnesses; the convenience of the parties; the locus of the operative facts; the location of relevant documents and relative ease of access to sources of proof; the availability of process to compel the attendance of unwilling witnesses; the forum's familiarity with the governing law; the relative financial means of the parties; calender congestion and trial efficiency; and the interests of justice generally. 28 U.S.C. § 1404(a); Orb Factory, Ltd. v. Design Science Toys. Ltd., 6 F. Supp.2d 203, 208 (S.D.N.Y. 1998). Plaintiff's choice of forum is to be respected whenever a transfer would merely shift the inconveniences from one party to another. Stinnes Interoil, Inc. v. Apex Oil Co., 604 F. Supp. 978, 983 (S.D.N.Y. 1985).
Defendant has not met its burden of demonstrating a basis for transfer. To begin, the convenience of party and non-party witnesses is generally considered the most important factor in a motion to transfer venue. See Frene NV v. Kmart Corp., 1998 U.S. Dist. LEXIS 11572, at *3 (S.D.N.Y. July 29, 1998). "In order to meet its burden, the motion of the party seeking transfer must specifically list the evidence and witnesses on which the party intends to rely in the transferee district, along with a general statement of the topics of each witness' testimony." Editorial, 829 F. Supp. at 66-67; see Factors Etc., Inc. v. Pro Arts. Inc., 579 F.2d 215, 218 (2d Cir. 1978). Major Trading has not identified specific witnesses it intends to call or any acute hardship peculiar to those witnesses, nor has it specified their proposed testimony. Instead, Major Trading simply asserts, without more, that most of its witnesses are located in California. Such assertions are not sufficient to justify a transfer of this action to the Central District of California. See Orb Factory, 6 F. Supp.2d at 208-09 ("Vague generalizations and failure to clearly specify the key witnesses to be called, along with a statement concerning the nature of their testimony, are an insufficient basis upon which to grant a change of venue.").
Defendant cites to MBCP Peerlogic v. Critical Path for the proposition that it need not provide a list of potential witnesses since "the events giving rise to [the] action demonstrate that the vast majority of material witnesses" are in California and would therefore find it more convenient to testify in California. 2002 WL 31729626 (S.D.N.Y. Dec. 5, 2002). First, MBCP's lesser requirement appears to be in tension with other Second Circuit holdings. See Arrow Elecs. Inc. v. Ducommun Inc., 724 F. Supp. 264, 267 n. 1 (S.D.N.Y. 1989) ("A party making a motion to transfer based on the convenience of the witnesses does have an obligation to provide the Court with a list of the witnesses inconvenienced by the current forum and must `make a general statement of what their testimony will cover'") (quotingFactors, 579 F.2d at 218). Nevertheless, the defendants inMBCP specified to some degree who the potential witnesses were, their relation to the case, and from where they would be drawn.Id. at *4 (defendants asserted that "potential principal witnesses include current and former . . . employees, officers, and directors involved in either the restatement of the company's financial statements for year 2000 or the transaction put in issue by this action"). In contrast, Major Trading fails to provide the Court with information sufficient to conclude that the events giving rise to this action themselves demonstrate burdensome future inconvenience to potential key witnesses.
None of the remaining factors weighs heavily in Major Trading's favor either. Because this is a simple copyright infringement action, the courts of either forum are presumed to be equally familiar with the governing law. IDT Worldwide, Inc. v. Supreme Int'l Corp., 1995 WL 702359, at *3 (S.D.N.Y. Nov. 28, 1995). Despite Major Trading's contention that the events at issue took place exclusively in California (i.e., defendant's residence, plaintiff's corporate home, the issuance of the copyright, and the situs of importation), the facts demonstrate that New York also has a significant connection with this dispute, albeit one slightly weaker than that of California. Specifically, the allegedly infringing product was sold in the Southern District of New York, and Capitol complains that this infringement occurred as a result of Major Trading's decision to contract with New York entities and distributers. See Toy Biz, Inc. v. Centuri Corp., 990 F. Supp. 328, 331 (S.D.N.Y. 1998). Thus, New York has a connection to the locus of operative events, and the "center of gravity of the litigation" is not heavily tilted in favor of transfer.Cf. Kiss My Face Corp. v. Bunting, 2003 WL 22244587, at *3 (S.D.N.Y. Sept. 30, 2003) (stating courts in the Southern District of New York have held the locus of operative facts to be in the initially chosen forum if acts of trademark infringement, dilution, or unfair competition occur in that forum); Student Advantage, Inc. v. Int'l Student Exch. Cards, Inc., 2000 U.S. Dist. LEXIS 13138, at *21 (S.D.N.Y. Sep. 13, 2000) (finding locus of operative facts to be in the Southern District of New York where defendant sold business cards in New York via the internet and through third party businesses, despite the fact that defendant was an Arizona corporation with its principle place of business in Arizona). Major Trading asserts in conclusory fashion that the documents relevant to this case are located in California. However, this statement weighs only slightly in Major Trading's favor because "[i]n today's era of photocopying, fax machines and Federal Express, [defendant's] documents easily could be sent to New York," and Major Trading does not contend that the volume of evidence in question is so cumbersome as to make reproduction and transfer of the documents unduly burdensome. Coker v. Bank of America, 984 F. Supp. 757, 765 (S.D.N.Y. 1997). The relative means of the parties, calender congestion, and trial efficiency do not weigh in favor of either New York or California as the proper venue. Finally, Major Trading has not made an adequate showing that transfer of this action to the Central District of California is compelled by the interests of justice. Accordingly, Major Trading has not carried its burden of demonstrating that plaintiff's choice of forum should be overruled.
Plaintiff maintains that its principal place of business is New York, New York.
Conclusion
Major Trading's motions to dismiss or transfer (docket No. 42) are denied.
SO ORDERED