Editorial Musical Latino Americana v. Mar Intern.

• Decision Date: 16 July 1993
• Docket Number: No. 92 Civ. 9298 (RWS).,92 Civ. 9298 (RWS).
• Parties: EDITORIAL MUSICAL LATINO AMERICANA, S.A., Plaintiff, v. MAR INTERNATIONAL RECORDS, INC. and Arturo Sanchez, Defendant.
• Court: U.S. District Court — Southern District of New York

829 F. Supp. 62

EDITORIAL MUSICAL LATINO AMERICANA, S.A., Plaintiff, v. MAR INTERNATIONAL RECORDS, INC. and Arturo Sanchez, Defendant.

No. 92 Civ. 9298 (RWS).

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

July 16, 1993.

Silverman & Shulman, P.C., New York City, for plaintiff; Alan L. Schulman, of counsel.

Cohen, Pontani, Lieberman & Pavane, New York City, for defendants; Martin B. Pavane, of counsel.

OPINION

SWEET, District Judge.

The defendants Mar International Records, Inc. ("MAR") and Arturo Sanchez ("Sanchez") have moved under Rule 12(b)(2), Fed.R.Civ.P., to dismiss the complaint of Editorial Musical Latino Americana, S.A. ("Editorial") or alternatively to transfer the action under 28 U.S.C. 1404(a) to the Central District of California. For the reasons set forth below, the motions are denied.

Prior Proceedings

This action was initiated on December 28, 1992 by the filing of a complaint by Editorial alleging that MAR and Sanchez wilfully infringed Editorial's copyright by making and distributing a phonorecord "La Tropa Chicana" on which MAR is listed as a distributor.

The instant motion was heard and considered submitted on April 14, 1993.

The Facts

While there is a factual dispute as to the conduct of MAR and Sanchez, the Editorial affidavits establishing that the Phonorecord was purchased in New York on June 11, 1992 from Telestar Records & Tapes, 155 West 14th Street, New York, New York, are unrebutted.

The Phonorecord stated, "Manufactured by MAR International Records, Inc." and "Distributed by Disco Azteca Distributors" and "Mar International Distributors." Four other MAR records were purchased, one of which contained a label stating, "A Production of Humberto and Arturo Sanchez for: Mar International Records, Inc." and "Manufactured and Distributed by Mar International Records, Inc." At least four retailers sell MAR records in New York.

According to the submission by MAR and Sanchez, Discos Azteca is a related company and MAR's exclusive distributor in the United States.

Sanchez is President of MAR and Humberto Sanchez ("Humberto") is its Chief Executive Officer. Both are residents of California, City of Stockton. Sanchez has never been present in New York and Humberto has visited the State of New York on two occasions in the last five years, both in connection with business concerns unrelated to MAR.

MAR is a California corporation with its principal place of business in Stockton. It also conducts business in a Los Angeles office and is engaged in the business of recording and promoting musical groups. MAR is not incorporated in the State of New York nor qualified to do business here. It has no subsidiaries incorporated or qualified to do business in the State of New York nor does it have any personnel, employees, offices or property here, nor has it contracted to distribute its goods in New York.

Neither MAR, Sanchez nor Humberto have any bank accounts or other tangible personal or real property located in the State of New York.

A Sufficient Showing of Jurisdiction Has Been Made

In order to demonstrate personal jurisdiction sufficiently to defeat a motion to dismiss, a plaintiff need only make a prima facie showing that jurisdiction exists. See Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985). Plaintiff's complaint and affidavits are to be construed, and any doubts are to be resolved in the light most favorable to the plaintiff. See id.; Shube's Mfg. Corp. v. Blake Bros. Int'l, Inc., 1990 Corp.L.Dec. (CCH) ¶ 26,535 at 23,169 (S.D.N.Y.1990); see also Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974) (on motion to dismiss pleadings are considered in light most favorable to pleader).

Here, the jurisdictional analysis is the same for both MAR and its president, Sanchez, who can be held individually liable for his acts of infringement. See, e.g., Lauratex Textile Corp. v. Allton Knitting Mills, Inc., 517 F.Supp. 900 (S.D.N.Y.1981) (corporate president and shareholder personally liable for copyright infringement).

To determine personal jurisdiction over a non-domiciliary in a federal question case, this Court applies the long-arm statute of the forum state. See Business Trends Analysts v. Freedonia Group, Inc., 650 F.Supp. 1452, 1455 (S.D.N.Y.1987); United States v. First Nat'l City Bank, 379 U.S. 378, 381, 85 S.Ct. 528, 530, 13 L.Ed.2d 365 (1965).

New York's long-arm statute provides:

As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:

1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or

2. commits a tortious act within the state....

N.Y.Civ.Prac.L. & R. § 302(a) (McKinney 1993) ("CPLR § 302(a)").

Offering 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 this Court with personal jurisdiction over the infringers. See Business Trends, 650 F.Supp. at 1455-56 (shipment of one copy into New York; actual sale not necessary); Metropa Co. v. Choi, 458 F.Supp. 1052, 1054 (S.D.N.Y.1978) (trademark infringement; only New York contact of California defendant was mail order shipment of two wigs); Honda Assocs., Inc. v. Nozawa Trading, Inc., 374 F.Supp. 886, 888-89 (S.D.N.Y.1974) (trademark infringement, actual sale not necessary; only New York contact of California defendant was mail order shipment of 3 karate uniforms valued at $37). This Court has jurisdiction even if the products for sale are offered through independent brokers in New York. See CPLR 302(a) ("in person or through an agent"); Heritage House Frame & Moulding Co. v. Boyce Highlands Furniture Co., 88 F.R.D. 172, 173 (E.D.N.Y.1980).

Further, there is a prima facie showing that MAR has contracted to supply goods in this state and are thus subject to jurisdiction pursuant to the "contracts anywhere" clause in CPLR 302(a)(1). Proof of one transaction is sufficient. See Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 198-99, 522 N.E.2d 40, 42-44 (1988). Contracting with a distributor to distribute an infringing work in New York renders personal jurisdiction proper under this section. See Lipton v. Nature Co., 781 F.Supp. 1032, 1035-36 (S.D.N.Y.1992); see also Business Trends, 650 F.Supp. at 1455 n. 8 (shipping one copy into New York is sufficient). From the defendants' submission and the appearance of records in retail stores in New York, it can be inferred that MAR has a contract with its affiliated company and exclusive distributor, Discos Azteca, to supply the infringing Phonorecord in New York.

In Asahi Metal Industry Co. v. Superior Court of Cal., 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), the Court applied the well-established due process standard for personal jurisdiction over a defendant not physically present within the forum, that such defendant "have certain minimum contacts with the forum such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). Sufficient "minimum contacts" are established when "the defendant's conduct and connection with the forum State are such that he should reasonable anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). These minimum contacts must be based upon "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State...." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958)). The Court's analysis in World-Wide Volkswagen is instructive in the instant case:

Hence if the sale of a product of an out-of-state manufacturer or distributor ... is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or others. The 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.

444 U.S. at 297-98, 100 S.Ct. at 567 (emphasis added).

MAR's phonorecords are currently being offered for sale by at least four New York retailers, who were also selling MAR's product last spring at the time the infringing Phonorecord was purchased.

The owners of MAR, including Sanchez, also own MAR's exclusive United States distributor, Discos Azteca, which distributed the infringing Phonorecord into New York. A phonorecord bearing the MAR label, different from the Infringing Phonorecord, purchased in New York, bore the legend "Manufactured and Distributed by Mar International Records, Inc." Ramirez Aff. ¶ 3.

The critical inquiry for due process is whether the manufacturer sought to serve, "directly or indirectly," the market for its phonorecords in New York. See World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567; Montalbano v. Easco Hand Tools, Inc., 766 F.2d 737, 742 (2d Cir.1985).

The facts here establish prima facie jurisdiction.

Montalbano's stream-of-commerce test remains the law in this Circuit as well as elsewhere. See, e.g., Irving v. Owens-Corning Fiberglas Corp., 864 F.2d 383, 385-86 (5th Cir.), cert. denied, ...