Cable News Network v. Video Monitoring Services, Civ. A. No. 1:88-CV-2660-JOF.

• Decision Date: 23 June 1989
• Docket Number: Civ. A. No. 1:88-CV-2660-JOF.
• Citation: 723 F. Supp. 765
• Parties: CABLE NEWS NETWORK, INC., Plaintiff, v. VIDEO MONITORING SERVICES OF AMERICA, INC., Defendant.
• Court: U.S. District Court — Northern District of Georgia

723 F. Supp. 765

CABLE NEWS NETWORK, INC., Plaintiff, v. VIDEO MONITORING SERVICES OF AMERICA, INC., Defendant.

Civ. A. No. 1:88-CV-2660-JOF.

United States District Court, N.D. Georgia, Atlanta Division.

June 23, 1989.

June Ann Kirkland and William T. Plybon, Troutman, Sanders, Lockerman & Ashmore, Atlanta, Ga., for plaintiff.

Stephen M. Schaetzel, Jones, Askew & Lunsford, Atlanta, Ga., for defendant.

ORDER

FORRESTER, District Judge.

This matter is before the court on defendant's motion to dismiss, Fed.R.Civ.P. 12(b)(2), (3); and plaintiff's motion for preliminary injunction. Fed.R.Civ.P. 65(a); 17 U.S.C. § 502(a).

I. STATEMENT OF FACTS.

The parties to this action are plaintiff Cable News Network, Inc. (CNN), a corporation organized and existing under the laws of the State of Georgia with its principal place of business in Atlanta, Georgia, and defendant Video Monitoring Services of America, Inc. (VMS), a New York corporation with its principal place of business in New York. Plaintiff is in the business of producing news programming which it transmits via satellite to viewers world-wide. Defendant is in the business of monitoring the news and public interest programming of television and radio stations throughout the country and, on request of the customer, providing a videotape copy of a particular broadcast. By its four-count complaint, plaintiff charges defendant with violations of federal copyright and communications laws, as well as state deceptive trade practices and unfair competition laws. The court's subject matter jurisdiction is predicated upon 28 USC §§ 1331 and 1332. The facts giving rise to this action are as follows.

On October 17, 1988, plaintiff transmitted a television program called "Cross Fire" featuring Senator Barry Goldwater which defendant is alleged to have "captured" and copied. On October 26, 1988, an employee of plaintiff, Alma Sanders, contacted defendant via telephone at its Miami, Florida office and placed an order for a videotape copy of the October 17, 1988 program. The order was placed on behalf of an entity called "Sanders and Company." Defendant accepted Ms. Sanders' order and mailed to Sanders and Company at its Atlanta, Georgia address an invoice dated October 27, 1988 requesting payment in the amount of $130.00 for the videotape. The videotape was received at the Atlanta, Georgia offices of Sanders and Company on November 2, 1988. Ms. Sanders subsequently forwarded a check in the amount of $130.00 in payment of the invoice to defendant which defendant endorsed and deposited November 14, 1988.

Plaintiff contends that the above-described facts are sufficient to confer personal jurisdiction over defendant under the Georgia long-arm statute, O.C.G.A. § 9-10-91. Defendant, on the other hand, argues that personal jurisdiction is lacking on the grounds that (1) it does not maintain an office in Georgia; (2) it has no employees or sales representatives in Georgia; (3) it does not manufacture any product or perform any services in Georgia; (4) it does not derive any substantial revenue from the State of Georgia; (5) it monitors plaintiff's broadcasts from its New York and California offices; (6) it videotaped the program in question at its New York office; and (7) it sold the videotape in question from its Miami, Florida office.

II. CONCLUSIONS OF LAW.

A. Defendant's Motion To Dismiss.

Under Rule 12(b)(2), the plaintiff bears the burden of proving the existence of in personam jurisdiction. Welt Industries, Inc. v. Weingart, 660 F.Supp. 424, 425 (N.D.Ga.1987) (Shoob, J.). As a general rule, a motion to dismiss for lack of personal jurisdiction should be denied if the complaint alleges sufficient facts to support a reasonable inference that the defendant can be subjected to the jurisdiction of the court. General Electric Credit Corp. v. Scott's Furniture Warehouse Showroom, Inc., 699 F.Supp. 907, 910 (N.D.Ga. 1988) (Moye, J.). If, however, the defendant makes a factual showing controverting the jurisdictional allegations of the complaint, the plaintiff must come forward with sufficient factual evidence to establish a prima facie showing of jurisdiction. Welt Industries, 660 F.Supp. at 425. In the present case, plaintiff contends that the uncontroverted allegations of the complaint are sufficient to confer jurisdiction over defendant.¹ Plaintiff argues alternatively that in the event the court determines additional evidence is required, that it should be permitted discovery² regarding the extent of defendant's activities in Georgia.

A federal court may assert jurisdiction over a nonresident defendant only to the extent allowed by the long-arm statute of the forum state.³ Southwire Company v. Trans-World Metals and Company, Ltd., 735 F.2d 440, 442 (11th Cir.1984); Payne v. Kristofferson, 631 F.Supp. 39, 41 (N.D.Ga.1985) (Evans, J.). In addition, the exercise of jurisdiction pursuant to such state law requires satisfaction of the due process clause of the Fourteenth Amendment to the United States Constitution. Id. The standard therefore includes issues of state and federal law.

The state law relevant to this analysis is the Georgia long-arm statute, O.C.G.A. § 9-10-91. This statute provides,

A court of this state may exercise personal jurisdiction over any non-resident ... as to a cause of action arising from any of the acts or omissions ... enumerated in this code section, in the same manner as if he were a resident of the state, if in person or through an agent, he:

(1) transacts any business within this state;

(2) commits a tortious act or omission within this state, except as to a cause of action for defamation of character arising from the act;

(3) commits a tortious injury in this state caused by an act or omission outside this state if the tortfeasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;

(4) owns, uses, or possesses any real property situated within this state; or

(5) with respect to proceedings for alimony, child support, or division of property in connection with an action for divorce or with respect to an independent action for support of dependents, maintains a matrimonial domicile in this state at the time of the commencement of this action, whether cohabiting during that time or not.

The first question presented by defendant's motion concerns the proper subsection of the long-arm statute to apply to this case. Because subsections (4) and (5) are clearly inapplicable, the court will limit its inquiry to subsections (1), (2) and (3).

1. Subsection (1).

Subsection (1) permits the exercise of jurisdiction over non-resident defendants if he "transacts any business within this state." This subsection has been interpreted as applying to contract actions only, however. Delong Equipment Company v. Washington Mills Abrasive, 840 F.2d 843, 848 (11th Cir.1988) (citing Whitaker v. Krestmark of Alabama, Inc., 157 Ga.App. 536, 537-38, 278 S.E.2d 116 (1981)). For the purposes of the Georgia long-arm statute, actions brought in federal court for copyright infringement are considered tort actions. Payne, 631 F.Supp. at 43; Psychological Resources Support Systems v. Gerleman, 624 F.Supp. 483, 485 (N.D.Ga. 1985) (Moye, J.); see also Porter v. United States, 473 F.2d 1329, 1337 (5th Cir.1973). Subsection (1) is therefore unavailable to plaintiff as a means of subjecting defendant to the jurisdiction of this court.

2. Subsection (2).

Recent state and federal decisions construing subsection (2) of the Georgia long-arm statute have rendered its application to the facts of this case uncertain. To resolve the question, the court will undertake to examine the history of the Georgia long-arm statute as it pertains to the exercise of personal jurisdiction over non-resident tortfeasors.

From March 10, 1966 until July 1, 1970, the Georgia long-arm statute provided for the exercise of personal jurisdiction over non-resident tortfeasors only where the "tortious act or omission" was committed "within this state." Ga.Code Ann. § 24-113.1, Ga.L.1966, p. 343. The Georgia Court of Appeals undertook to interpret this provision in 1969. In O'Neal Steel, Inc. v. Smith, 120 Ga.App. 106, 169 S.E.2d 827 (1969), the court considered two widely differing views. The first, now known as the "Illinois rule,"⁴ provided that the term "tortious act" includes both the wrongful conduct complained of and the damage caused thereby. Thus, if either the act or omission or its consequences occur within the state, the tortious act is committed "within the state" for the purposes of the long-arm statute. The second view, called the "New York rule,"⁵ provided that the statute must be read literally to require that the wrongful act complained of occur within the state. Applying general principles of statutory construction, the O'Neal Steel court adopted the New York rule.

In response to this strict judicial application of subsection (2), the Georgia General Assembly added subsection (3) to the long-arm statute in 1970 to allow for the exercise of personal jurisdiction over non-resident tortfeasors in instances where the tort was committed outside the state but caused injuries within the state. Ga.Code Ann. § 24-113.1, Ga.L.1970, p. 443. Jurisdiction was conditional, however, on a finding that the tortfeasor "regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state." Id.

In 1973, the Georgia Supreme Court granted certiorari in three cases to address the lower court's interpretations of subsection (2). Each case involved the commission of a tort outside the state but causing injuries to the plaintiffs within the state. Subsection (3) was unavailable to these plaintiffs, because each tort was alleged to have occurred prior to its...