Atlantic Recording Corp. v. Project Playlist, Inc.

• Decision Date: 25 March 2009
• Docket Number: No. 08 Civ. 3922 (DC).,08 Civ. 3922 (DC).
• Citation: 603 F.Supp.2d 690
• Parties: ATLANTIC RECORDING CORPORATION, et al., Plaintiffs, v. PROJECT PLAYLIST, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

603 F.Supp.2d 690

ATLANTIC RECORDING CORPORATION, et al., Plaintiffs, v. PROJECT PLAYLIST, INC., Defendant.

No. 08 Civ. 3922 (DC).

United States District Court, S.D. New York.

March 25, 2009.

COPYRIGHT MATERIAL OMITTED

Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, by Gary A. Orseck, Esq., Alison C. Barnes, Esq., Eva A. Temkin, Esq., Washington, D.C., for Plaintiffs.

Wilson Sonsini Goodrich & Rosati, P.C., by Tonia Ouellette Klausner, Esq., Joshua A. Plaut, Esq., New York, NY, for Defendant.

OPINION

CHIN, District Judge.

Defendant Project Playlist, Inc. ("Playlist") operates a website, www.project playlist.com (the "Website"), that provides an index of links to songs available on third-party websites. Users can create playlists of songs on the Website—hence the name—that they can save on the Website or upload to their profiles on social networking sites. Users can also download the songs from the third-party websites.

In this case, six of the world's largest record companies sue Playlist for copyright infringement and unfair competition. Plaintiffs own copyrights to the majority of sound recordings in the United States, and claim that most of the songs on the third-party websites to which Playlist provides links are posted without plaintiffs' permission, and therefore infringe plaintiffs' copyrights. Through this action, plaintiffs seek to hold Playlist responsible for copyright infringement.

Playlist moves, pursuant to 28 U.S.C. § 1404(a), for a transfer of venue to the Northern District of California, where Playlist's business is located. In the event that motion is denied, Playlist moves to dismiss plaintiffs' state law claims. For the reasons set forth below, both motions are denied.

BACKGROUND

A. Allegations of the Complaint

Plaintiffs are some of the largest record companies in the world. (Compl. ¶ 11).¹ Atlantic Recording Corporation and Elektra Entertainment Group, Inc. are organized under the laws of Delaware and have their principal place of business in New York. (Id. ¶¶ 12-14, 17). Interscope Records is organized under the laws of California and has its principal place of business in California. (Compl. ¶ 15). Motown Record Company, L.P. is organized under the laws of California and has its principal place of business in New York. (Id. ¶¶ 16, 19; Orseck Decl. ¶ 12(d)).² UMG Recordings, Inc. and Warner Bros. Records, Inc. are organized under the laws of Delaware and have their principal place of business in California. (Compl. ¶¶ 18, 20).

Playlist is a Delaware corporation with its principal place of business in Palo Alto, California, in the Northern District of California. (Riney Decl. ¶ 3). Playlist owns and operates the Website. (Compl. ¶ 2). The Website, through a computer program called a "spider," searches the Internet to compile an index of links to sound recordings on other websites. (Id. ¶¶ 3, 29-30). The Website works as follows: A user searches for a particular song or artist, clicks "Search," and then an index appears.³ The user then has a number of options. First, she can listen to the song, through the Website's proprietary music player,⁴ by clicking the "Play" button located next to the song's title. (Id. ¶ 33). Second, she can add the song to a playlist that she can save on the Website, share with other users of the Website, or upload to her profile on a number of social networking sites such as Facebook and MySpace. (Id. ¶ 36). Finally, she can download the song, but only by clicking on a link that reads, "Visit site." The Website then opens a new window with the third-party website. At the top of the page is the following message, provided by Playlist:

Below is the website [address] containing the music file. Some music files located in this site may be subject to copyright. To be safe, don't download from this site. If you like it, click here to download from itunes [link] or you can download the ringtone [link]!

Notwithstanding Playlist's warning to users to exercise caution with respect to illegally downloading copyrighted works, users are not prevented from downloading songs from these third-party websites. (Id. ¶ 34).

In addition to providing an index of songs found through its "spider," Playlist also builds its database of links by permitting users to submit links to songs they found on the Internet. (Id. ¶ 31).

The "overwhelming majority" of the songs in Playlist's index are posted without permission of the copyright owners. (Id. ¶ 4). Plaintiffs own the copyright to many of these songs. (Id. ¶¶ 25-26 & Exs. A & B).

B. Procedural History

Plaintiffs filed the complaint in this action on April 28, 2008, asserting claims against Playlist for direct and secondary copyright infringement under 17 U.S.C. §§ 106 and 501, common law copyright infringement under New York law as to plaintiffs' pre-1972 recordings, and unfair competition under New York law as to plaintiffs' pre-1972 recordings.⁵ Plaintiffs invoked the Court's jurisdiction under 28 U.S.C. §§ 1331 and 1338 for the federal claims, and under 28 U.S.C. §§ 1367(a) and 1338(b) for the state claims.

These motions followed.

DISCUSSION

Playlist moves to transfer venue and to dismiss plaintiffs' two state law causes of action. For the reasons set forth below, both motions are denied.

A. The Motion to Transfer Venue

Playlist seeks to transfer this case to the Northern District of California pursuant to 28 U.S.C. § 1404(a), arguing that venue would be more convenient for the parties, and that defendants only filed suit in this district to avoid the reach of an adverse Ninth Circuit precedent. Plaintiffs oppose the motion, arguing that, because three of the six plaintiffs are located in this District and none in the Northern District of California, venue in this District is appropriate.

1. Standard Under 28 U.S.C. § 1404(a)

Under 28 U.S.C. § 1404(a), a court may transfer any civil action to any other district where the case might have been brought if the transfer serves "the convenience of parties and witnesses, [and is] in the interest of justice." 28 U.S.C. § 1404(a); see Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). "The threshold question in deciding transfer of venue ... is whether the action could have been brought in the transferee forum." Millennium, L.P. v. Hyland Software, Inc., 03 Civ. 3900(DC), 2003 WL 22928644, at *2 (S.D.N.Y. Dec. 10, 2003). If this is established, the district court generally should disturb the plaintiff's choice of forum only if, on balance, the following factors clearly favor transfer: (1) the convenience of witnesses; (2) the convenience of the parties; (3) the locus of operative facts; (4) the location of relevant documents and relative ease of access to sources of proof; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the forum's familiarity with the governing law; (7) the relative financial means of the parties; (8) the weight afforded plaintiff's choice of forum; and (9) trial efficiency and the interests of justice generally. See Anadigics, Inc. v. Raytheon Co., 903 F.Supp. 615, 617 (S.D.N.Y.1995).

While a district court has "broad discretion" under 1404, because that discretion "must be exercised at the very outset of the case, when relatively little is known about how the case will develop, courts have typically accorded substantial weight to the [eighth] factor, plaintiff's choice of forum." Albert Fadem Trust v. Duke Energy Corp., 214 F.Supp.2d 341, 343 (S.D.N.Y.2002). The burden rests on the moving party to make a "clear and convincing" showing that transfer under Section 1404(a) is proper. Millennium L.P. v. Dakota Imaging, Inc., No. 03 Civ. 1838(RWS), 2003 WL 22940488, at *6 (S.D.N.Y. Dec. 15, 2003) (citation omitted).

2. Application

Playlist has not made a "clear and convincing" showing that transfer is warranted. I address each of the nine factors in turn.⁶

(a) Convenience of Witnesses

This factor, generally considered the most important in the 1404 analysis, does not favor transfer. See Aerotel, Ltd. v. Sprint Corp., 100 F.Supp.2d 189, 197 (S.D.N.Y.2000) ("The convenience of both party and nonparty witnesses is probably considered the single most important factor in the analysis of whether a transfer should be granted.").

Playlist has identified eight people whom it claims are key witnesses, but only four of them live in the Northern District of California; the other four live in the Central District of California, an hour and twenty minute flight away.⁷ Hence, moving this case to the Northern District of California will only make this case more convenient for half of Playlist's key witnesses—the rest will still have to get on a plane, albeit to travel a shorter distance.⁸

Plaintiffs, for their part, have identified a number of witnesses in this District whose testimony they expect to be key. While Playlist contends that plaintiffs' witnesses are irrelevant, I do not accept that contention at this early stage of the case, as plaintiffs will undoubtedly want to call witnesses to attest to, inter alia, their ownership of the copyrights, the alleged infringement, and the adverse impact that infringement has had on plaintiffs' business. Accordingly, this factor is neutral in the analysis.

(b) Convenience of Parties

Playlist argues that its "operations will be placed in serious jeopardy if Playlist is required to send its key personnel across the country for a trial." (Def. Transfer Mem. at 13). More specifically, Playlist argues that the operation of the Website requires constant or near constant attention, and that its continued survival would be placed in jeopardy if key employees lacked Internet access for five to six hour blocks of time (the time of a flight from San Francisco to New York). I do not accept this argument, as Playlist surely must be able to make arrangements for coverage when its key personnel must travel. After all, Playlist has established what appears...