AMA Multimedia, LLC v. Wanat

• Decision Date: 17 August 2020
• Docket Number: No. 18-15051,18-15051
• Citation: 970 F.3d 1201
• Parties: AMA MULTIMEDIA, LLC, a Nevada limited liability company, Plaintiff-Appellant, v. Marcin WANAT, a foreign citizen; Maciej Madon, a foreign citizen; MW Media, a foreign corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

970 F.3d 1201

AMA MULTIMEDIA, LLC, a Nevada limited liability company, Plaintiff-Appellant,

v.Marcin WANAT, a foreign citizen; Maciej Madon, a foreign citizen; MW Media, a foreign corporation, Defendants-Appellees.

No. 18-15051

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 11, 2019

Submission Withdrawn December 20, 2019

Resubmitted August 10, 2020 San Francisco, California

Filed August 17, 2020

OPINION

R. NELSON, Circuit Judge:

AMA Multimedia, LLC ("AMA") appeals the district court's dismissal of its copyright infringement, trademark infringement, and unfair competition action against Marcin Wanat for lack of personal jurisdiction. We agree with the district court that AMA has not met its burden of showing that Wanat is subject to personal jurisdiction in the United States. We also conclude that the district court did not abuse its discretion by denying AMA certain jurisdictional discovery and decline to consider arguments about changes in European law for the first time on appeal that bear on AMA's entitlement to additional jurisdictional discovery. We therefore affirm.

I

Plaintiff AMA is a Nevada limited liability company that produces and distributes "adult entertainment over the Internet." AMA owns several online websites where paying customers can view AMA's materials. AMA's videos are copyrighted as audiovisual works and display the company's trademark in the corner of the screen.

AMA discovered that ePorner.com ("ePorner")—an internationally available website which hosts adult videos and allows users to search for, select, and watch them—was displaying AMA's copyrighted works. At the time this suit was filed, ePorner allowed users to upload adult videos anonymously. ePorner does not charge visitors; instead, it generates revenue solely through advertising. ePorner contracts with a third-party advertising company that chooses the advertisements. The advertiser then "geolocates" the advertisements, meaning visitors to ePorner.com see advertisements based on their perceived location. For example, visitors thought to be in the United States see selected advertisements in English, while visitors thought to be in France see selected advertisements in French.

AMA was unable to determine who owned and operated ePorner, so, in 2015, AMA sued all defendants as Doe Defendants and Roe Corporations in the United States. The district court permitted AMA to conduct early discovery to ascertain who owned the domains epornergay.com and eprncdn.com, both of which forwarded visitors to ePorner.com. That early discovery revealed that two companies located in Arizona, GoDaddy.com and Domains by Proxy, were used to register the domains and privatize the owner's identity. AMA subpoenaed both companies and learned that Defendant Marcin Wanat was the registrant of the domains. AMA amended its complaint and named Wanat as a defendant.¹

Wanat is a citizen and resident of Poland. Wanat and Madon are partners in MW Media, a Polish civil law partnership which owns and operates ePorner. Through MW Media, Wanat assists in the operation of ePorner. Although Wanat registered epornergay.com and eprncdn.com, he did not register the ePorner.com domain.

Through his operation of ePorner, Wanat maintains limited contacts with the United States. Wanat registered the domain names through GoDaddy.com, an American company, but did so from Poland using a Polish version of GoDaddy's website. Wanat also entered into an agreement with an American domain name server ("DNS"), Tiggee LLC (doing business as DNSMadeEasy.com) ("Tiggee"), that allows users to access ePorner more efficiently by translating its domain names into Internet Protocol addresses.

However, Wanat has never visited the United States, has never paid taxes in the United States, does not have a visa to travel to the United States, and has never "derived any profit from any of [his] activities in the [United] States as [he] conduct[s] no such activities." Nor do Wanat, MW Media, or ePorner maintain any offices or agents in the United States.

At the time this suit was filed, the adult content available on ePorner was stored on a server in the Netherlands. Wanat stated he does not "specifically target any of [his] services to residents of the [United] States." 19.21% of ePorner's visitors are in the United States, making the United States its largest market.

AMA asserted federal claims for copyright infringement, trademark infringement, and unfair competition. Wanat moved to dismiss based on a lack of personal jurisdiction. After a hearing, the district court ordered jurisdictional discovery.

AMA sought documents related to epornergay.com and eprncdn.com, including contracts and correspondence between the websites and U.S. companies. Wanat objected to several of AMA's discovery requests, primarily arguing that producing certain personal data as part of the requested discovery would expose him to criminal liability under Poland's Personal Data Protection Act of 29 August 1997 ("PDP"). AMA argued that exceptions to the PDP allowed Wanat to produce the data and that, even if the exceptions did not apply, Wanat could redact such personal information.

The district court appointed a Special Master agreed upon by the parties and familiar with U.S. and Polish law to resolve the discovery disputes. See Fed. R. Civ. P. 53. AMA and Wanat hired their own Polish lawyers to evaluate Wanat's discovery objections. In June 2016, AMA filed a Motion to Compel and Wanat filed a Motion for Protective Order. In an exhibit to his Motion for Protective Order, Wanat raised the fact that changes to the European privacy laws were under consideration. Specifically, his Polish law expert noted that work on a "Privacy Shield" that could replace the PDP's "Safe Harbor" provision was in progress and could affect the transfer of personal data from European countries to the United States. AMA did not address this potential change in the law in its briefing.

On July 12, six days after the parties completed their briefing to the Special Master, the European Commission issued its Implementing Decision (EU) 2016/1250² (the "Privacy Shield Decision"), which, among other things, established that Member States (including Poland) could transfer personal data to certain organizations in the United States that committed to a set of privacy principles and self-certified their adherence to these principles to the Department of Commerce. See id. §§ 2, 2.1. Neither party raised this change in law with the Special Master, and AMA did not argue that it was a self-certified organization or provide any evidence to that effect.

On August 22, the Special Master submitted its 52-page Report and Recommendation to the district court. Most of the discovery disputes addressed by the Special Master did not involve the application of the PDP.

The Special Master recommended some of AMA's discovery requests involving personal information be denied because responding to the requests would require Wanat to produce "personal data," potentially exposing him to criminal liability under the PDP. The Special Master explained that personal data could not be transferred to the United States because: (1) the PDP's "Safe Harbor" provision, which allows the transfer of such data to certain countries that provide "adequate level[s] of personal data protection," did not apply to the United States, and (2) none of the PDP's other exceptions permitting such transfer applied. As to the first point, relying on the Court of Justice of the European Union's decision in Case C-362/14, Schrems v. Data Prot. Comm'r , 2015 E.C.R. 650, the Special Master determined that "the U.S. has been deemed a Third Country that does not ensure a level of protection that meets European standards."

AMA thereafter submitted its Objections to Special Master's Report and Recommendation, but did not raise the Privacy Shield Decision in its briefing. The Special Master's Report and Recommendation did not address the recent implementation of the Privacy Shield Decision. Adopting the recommendations of the Special Master in full, the district court sustained Wanat's objections to AMA's discovery requests. AMA moved for reconsideration, but again did not raise the Privacy Shield Decision. The district court denied the motion. Wanat then renewed his motion to dismiss for lack of personal jurisdiction. The district court granted the motion to dismiss, holding that because AMA could not establish sufficient minimum contacts between Wanat and the United States, asserting specific jurisdiction over Wanat would be unreasonable. AMA timely appealed, challenging both the jurisdictional and discovery orders.

After two extensions, AMA filed its opening brief on June 18, 2018. But twenty-four days earlier, the European Parliament repealed and replaced the PDP with the General Data Protection Regulation (EU) (2016/679) ("GDPR"),³ which also addressed the transfer of personal data outside of EU Member States, although not specifically focused on transfers to the United States. Neither party mentioned the Privacy Shield Decision or the GDPR in their briefs. Following oral argument, we withdrew submission of the appeal and directed the parties to file supplemental briefs on several issues, including the effect of the Privacy Shield Decision on this appeal. We did not inquire about the GDPR, although AMA discussed it in its supplemental brief. AMA did not argue or provide evidence that it is a self-certified organization under the Privacy Shield Decision in its supplemental brief.

II

We review de novo the district court's dismissal for lack of personal jurisdiction. Boschetto v. Hansing , 539 F.3d 1011, 1015 (9th Cir. 2008). "The factual findings underlying the district court's jurisdiction determination are reviewed for clear error." Freestream Aircraft (Berm.) Ltd. v. Aero Law Grp. , 905 F.3d 597, 602 (9th Cir. 2018). AMA "bears the burden of establishing that jurisdiction is proper." Mavrix Photo,...