Opinion
CIVIL ACTION NO. SA-03-CA-0465 XR (NN)
April 27, 2004
MEMORANDUM AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Introduction
The matter before the court is the motion to dismiss brought by defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc. (Docket Entry 59). The motion was filed on March 5, 2004, and seeks dismissal of all the claims against defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc. on the basis that this court lacks personal jurisdiction over said defendants.
Plaintiff's Second Amended Complaint in federal court alleges that defendants Bago Luma Collections, Inc. and Judy Deaton (collectively, "Bago Luma defendants") hired plaintiff to take photographic images of defendant Bago Luma Collections, Inc.'s merchandise for a catalog. Defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc. were hired by the Bago Luma defendants to prepare the catalog for publication.
Docket Entry 53, at 3.
Id, at 3-4.
When plaintiff completed the photographs, plaintiff sent the Bago Luma defendants an invoice which stated, inter alia, that the usage rights to the images were not released until full payment was received. Plaintiff contends that, although full payment was never received in breach of the contract between plaintiff and the Bago Luma defendants, plaintiff's copyrighted images were nevertheless included in the catalog. By including the images in the catalog even though full and final payment was not tendered, plaintiff contends that the Wiesenberg and Bago Luma defendants conspired to, and did in fact, infringe upon plaintiff's copyright. For these reasons, plaintiff asserts that defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc. are liable for copyright infringement and conspiracy to commit copyright infringement.
Docket Entry 53, ¶ 15, at 4.
See Docket Entry 53.
Docket Entry 53, at 6-8.
Defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc. (hereafter "defendants") move to dismiss the complaint on the basis that they do not have sufficient minimum contacts with the state of Texas such that this court can properly exercise personal jurisdiction over them. For this reason, defendants assert that the imposition of personal jurisdiction over them runs afoul of traditional notions of fair play and substantial justice.
Docket Entry 59.
Having reviewed the entire record in this case, including defendants' arguments in favor of dismissal, plaintiff's arguments through its reply to defendants' motion, and the applicable case and statutory law, I have concluded that defendants' motion to dismiss is without merit. Therefore, I recommend that defendants' motion to dismiss be DENIED .
Docket Entries 59, 65.
Docket Entry 61.
I have jurisdiction to enter this Memorandum and Recommendation under 28 U.S.C. § 636(b) and the District Court's Order referring all pretrial matters in this proceeding to me for disposition by order, or to aid in their disposition by recommendation where my authority as a Magistrate Judge is statutorily constrained.
Docket Entry 5.
II. Issue Presented
Does this court have personal jurisdiction over defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc.?III. Applicable Legal Standards
A. Dismissal Standard
Defendants' motion to dismiss is brought under Federal Rule of Civil Procedure 12(b)(2). Under Federal Rule of Civil Procedure 12(b)(2), a plaintiff's claim may be dismissed as against person over whom the federal court lacks jurisdiction.
IV. Analysis
Defendants, residents of Florida, move to dismiss plaintiff's claims against them on the basis that this court lacks personal jurisdiction over them Specifically, defendants contend that they do not have the requisite minimum contacts with this forum state (Texas). In addition, defendants assert that they have not personally availed themselves of the privileges of conducting activities in the state of Texas, nor have they purposefully directed activities at forum residents. As such, they argue that the exercise of personal jurisdiction would offend traditional notions of fair play and substantial justice.A. Overview: The principles governing the court's exercise of personal jurisdiction over a nonresident defendant.
A district court can properly exercise jurisdiction over a nonresident defendant only when `"state law confers such jurisdiction and its exercise comports with due process under the Constitution.'" Because Texas' long-arm statute extends "as far as is permitted by due process," the aforementioned two-part jurisdictional inquiry is collapsed into a single analysis of "whether the exercise of personal jurisdiction comports with federal constitutional requirements."
WNS, Inc. v. Farrow , 884 F.2d 200, 202 (5th Cir. 1989), quoting Interfirst Bank Clifton v. Fernandez . 884 F.2d 279, 282 (5th Cir. 1988), opinion withdrawn in part on other grounds, 853 F.2d 292 (1988).
Id.
The due process inquiry itself, however, is divided into two parts. First, the court must determine whether a plaintiff has sufficient minimum contacts with the forum state. Second, the court must assess whether the exercise of personal jurisdiction would be constitutionally permissible, i.e. whether it would be fair.
See Ham v. La Cienega Music Co. , 4 F.3d 413.415 (5th Cir. 1993).
WNS, Inc. , 884 F.2d at 204. See also Ham , 4 F.3d at 415, "Due process requires that (1) the defendant have established `minimum contacts' with the forum state; and (2) the exercise of personal jurisdiction does not offend `traditional notions of fair play and substantial justice (internal citations omitted).'"
1. Minimum contacts
A nonresident defendant's minimum contacts with the forum may support the imposition of either general or specific jurisdiction. General jurisdiction
WNS, Inc. , 884 F.2d at 204.
exists when the nonresident defendant maintains `continuous and systematic' contacts with the forum state.
Crown Sterling, Inc. v. Clark , 815 F. Supp. 199, 202 (N.D. Tex. 1993), citing Bullion v. Gillespie, 895 F.2d 213, 216 (5th Cir. 1990).
On the other hand, a nonresident defendant's minimum contacts will support a finding of specific jurisdiction when said defendant's
purposeful activities directed at the forum state have invoked the benefits of that state's laws, so that he could reasonably anticipate being hauled into court there.
Ham , 4 F.3d at 415.
For example, when a defendant perpetrates an intentional tort against a forum resident, said defendant has "engaged in activity that had reasonably foreseeable consequences" in that forum Thus,
WNS. Inc. , 884 F.2d at 203.
Purposeful forum-directed activity — even if only a single substantial act — may permit the exercise of specific jurisdiction in an action arising from or related to such acts.
Ham , 4 F.3d at 415-416. See also Ruston Gas Turbines, Inc. v. Donaldson Co., Inc. , 9 F.3d 415, 419 (5th Cir. 1993); Aviles v. Kunkle , 978 F.2d 201, 204 (5th Cir. 1992), "To exercise specific jurisdiction, defendants' contacts with the forum which are asserted as the basis for jurisdiction must be related to the subject matter of the controversy."
Stated another way,
A single act by the defendant directed at the forum state, therefore, can be enough to confer personal jurisdiction if that act gives rise to the claim being asserted.
Ruston Gas Turbines. Inc. , 9 F.3d at 419. See also Aviles . 978 F.2d at 204.
In contrast, however, where the relationship between defendant's forum-related activity and plaintiff's cause of action is too attenuated, i.e. when the plaintiff's cause of action does not arise from the defendant's contacts with the forum, the court may not properly exercise personal jurisdiction over the nonresident defendant.
Ham , 4 F.3d at 416. See also Crown Sterling. Inc. , 815 F. Supp. at 202 (N.D. Tex. 1993), "Some single or occasional act may give rise to only an attenuated connection with the forum that would be insufficient to support a court's exercise of personal jurisdiction," citing Burger King Corp. v. Rudzewicz . 471 U.S. 462, 475, n. 18.
2. Fairness and Reasonableness
Once it has been determined that the defendant has sufficient minimum contacts with the forum state to support a finding of general or specific jurisdiction, the court must conclude that the imposition of personal jurisdiction comports with due process — that the exercise of personal jurisdiction is reasonable.
In this reasonableness analysis, a court is to consider such factors as the extent of the defendant's purposeful interjection, the existence of an alternate forum, the burden on the defendant in appearing locally, the forum state's interest in adjudicating the dispute, the shared interest of all states involved in furthering their respective policies, the plaintiffs interest in obtaining convenient and effective relief and the interstate judicial system's interest in obtaining the most efficient resolution of controversies.
Crown Sterling, Inc. , 815 F. Supp. at 202, citing Burger King Corp. , 471 U.S. at 476-77: Dalton v. RW Marine, Inc. , 897 F.3d 1359 (5th Cir. 1990).
Importantly, the party seeking to impose the court's jurisdiction (ordinarily the plaintiff) bears the burden of establishing a prima facie case that the court may properly exercise jurisdiction. Plaintiff, however, is not required to prove the propriety of jurisdiction by a preponderance of the evidence. Finally, in assessing the evidence in support of, and opposition to, the exercise of personal jurisdiction, the court must accept all uncontroverted allegations in the complaint as true. Similarly, all factual conflicts must be resolved in favor of plaintiff.
WNS, Inc. , 884 F.2d at 203, "the party who seeks to invoke the jurisdiction of the district court bears the burden of establishing contacts by the nonresident defendant sufficient to invoke the jurisdiction of the court."
WNS, Inc. , 884 F.2d at 203, 204; Ruston Gas Turbines, Inc. , 9 F.3d at 418, "we must resolve all conflicts in favor of the party seeking to invoke the court's jurisdiction."
B. Can this court properly exercise personal jurisdiction over nonresident defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc.?
In the instant case, the court may properly exercise in personam jurisdiction over the nonresident Wiesenberg defendants. Plaintiff's Second Amended Complaint alleges that defendants conspired to, and did in fact, infringe upon plaintiff's copyright by utilizing plaintiff's copyrighted images in the catalog it prepared for the Bago Luma defendants despite the knowledge that plaintiff had not released the usage rights. Thus, plaintiff's complaint has alleged that defendants committed the intentional tort of copyright infringement against plaintiff, a forum resident. As such, defendants' "intentional, and allegedly tortious, actions were expressly aimed" at Texas.
See Docket Entry 53.
See Bucklew v. Hawkins, Ash, Baptie Co. L.L.P. , 329 F.3d 923, 931 (7th Cir. 2003), "Copyright infringement . . . is an intentional tort . . ." See also 17 U.S.C. § 106, 501.
Calder v. Jones , 465 U.S. 783, 789 (1984).
Moreover, plaintiff has proffered evidence that defendants communicated with plaintiffs and the Bago Luma defendants on numerous occasions about the catalog via telephone and e-mail, prepared the catalog with the knowledge that payment for the images had been withheld (and, consequently, that the usage rights had not been released), placed their products into the "stream of commerce" in Texas by shipping some of the finished catalogs to Texas, and billed their Texas client (Bago Luma Collections, Inc.) at its Texas address. Based on the foregoing, plaintiff has established a prima facie case that defendants have the requisite minimum contacts with this forum.
See Docket Entry 61, ¶ 2, at 2; ¶ 9, at 5.
Id. , ¶¶ 5-6, at 3; ¶ 10, at 5-6.
Docket Entry 61, ¶ 6, at 3-4; ¶ 10, at 5-6.
Id.
Defendants argue that although their invoice to the Bago Luma defendants "references the [Texas] shipping destination," it
is not evidence of Wiesenberg's participation in the actual shipping . . . the shipping reference is merely a notation of where the catalogs went. The shipping was done by other entities, not Wiesenberg or Wiesenberg Design. Thus, the `contact' of shipping relied upon by Plaintiff never existed and does not provide personal jurisdiction for this Court.
Docket Entry 65, at 1-2.
Case law is clear, however, that a nonresident need not actually perform the shipping themselves in order to place their product into the stream of commerce in the disputed forum. Rather, a nonresident defendant can intentionally place
its products into the stream of commerce by delivering them to a shipper destined for delivery in Texas.
Ruston Gas Turbines, Inc. , 9 F.3d at 420.
When a defendant does the same, it
not only could have foreseen that the products might end up in Texas, it knew as a fact that the products were going to be delivered to a specific user in . . . Texas . . .
Id.
Thus, defendants' affidavits and arguments are insufficient to provide a viable challenge to personal jurisdiction. Plaintiffs complaint has adequately pled the requisite minimum contacts between defendants and the forum state by asserting that defendants participated in activity directed at the forum — the commission of the intentional tort of copyright infringement against a forum resident.
Similarly, defendants' argument that the number of their communiques with plaintiff and the Bago Luma defendants in Texas is insufficient to constitute the requisite number of minimum contacts is unavailing. See Docket Entry 65, ¶ III, at 2. Because plaintiff's complaint adequately alleges that defendants participated in forum-directed activity (copyright infringement) giving rise to the instant action, plaintiff has established that defendants have sufficient minimum contacts with this forum.
Moreover, the exercise of personal jurisdiction comports with due process requirements because defendants purposefully interjected themselves into this forum through their relationship with defendant Bago Luma, a Texas corporation, and their alleged acts of wrongdoing against plaintiff, a Texas resident. Furthermore, Texas has a strong interest in protecting its residents from tortious conduct, such as copyright infringement. Similarly, this forum will provide a convenient forum for plaintiff to adjudicate its claims as plaintiff resides here and defendant Bago Luma has its principal place of business here. Finally, judicial economy and efficiency weigh in favor of litigation in this forum, as the action against the Bago Luma defendants, which centers around the same facts at issue in the action against the Wiesenberg defendants, is already pending in this forum. For all these reasons, allowing this action to proceed in this forum accommodates "the interstate judicial system's interest in obtaining the most efficient resolution of controversies."
See Crown Sterling. Inc. , 815 F. Supp. at 202, citing Burger King Corp. , 471 U.S. at 476-77; Dalton v. RW Marine. Inc. , 897 F.3d 1359 (5th Cir. 1990).
Bounty-Full Entertainment, Inc. v. Forever Blue Entertainment Group, Inc. , 923 F. Supp. 950, 956 (S.D. Tex. 1996), "the state of Texas clearly has a strong interest in protecting its citizens from torts committed in the state of Texas by nonresident entities or persons."
See, e.g. Calder . 465 U.S. at 790, "An individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause the injury in California."
Crown Sterling, Inc. , 815 F. Supp. at 202, citing Burger King Corp. , 471 U.S. at 476-77; Dalton , 897 F.3d 1359.
V. Recommendation
Based on the foregoing, it is my recommendation that defendants' motion to dismiss (Docket Entry 59) be DENIED . As previously discussed, this court may properly exercise personal jurisdiction over nonresident defendants Selma Wiesenberg and Wiesenberg Design Studio, Inc.VI. Instructions for Service and Notice of Right to Object/Appeal
The United States District Clerk shall serve a copy of this Report and Recommendation on each and every party either (1) by certified mail, return receipt requested, or (2) by facsimile if authorization to do so is on file with the Clerk. According to 28 U.S.C. § 636(b)(1) and FED. R. Civ. P. 72(b), any party who desires to object to this report must serve and file written objections to the Report and Recommendation within ten (10) days after being served with a copy unless this time period is modified by the District Court. A party filing objections must specifically identify those findings, conclusions, or recommendations to which objections are being made and the basis for such objections; the District Court need not consider frivolous, conclusive, or general objections. Such party shall file the objections with the Clerk of the Court, and serve the objections on all other parties and the Magistrate Judge. A party's failure to file written objections to the proposed findings, conclusions, and recommendations contained in this report shall bar the party from a de novo determination by the District Court. Additionally, any failure to file written objections to the proposed findings, conclusions, and recommendations contained in this Report and Recommendation within ten (10) days after being served with a copy shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.
See Thomas v. Arn, 474 U.S. 140, 149-52 (1985);Acuna v. Brown Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000), cert. denied. 530 U.S. 1229 (2000).
Douglass v. United Servs. Auto. Ass'n. , 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).