Goodman v. Sharp

• Decision Date: 12 July 2022
• Docket Number: 21-CV-10627 (VEC)
• Parties: JASON GOODMAN, Plaintiff, v. ADAM SHARP, TERRANCE O'REILLY, FRANK SCHERMA, MARGARET ESQUENET, NATIONAL ACADEMY OF TELEVISION ARTS AND SCIENCES, INC., ACADEMY OF TELEVISION ARTS AND SCIENCES, INC., Defendants.
• Court: U.S. District Court — Southern District of New York

JASON GOODMAN, Plaintiff,
v.
ADAM SHARP, TERRANCE O'REILLY, FRANK SCHERMA, MARGARET ESQUENET, NATIONAL ACADEMY OF TELEVISION ARTS AND SCIENCES, INC., ACADEMY OF TELEVISION ARTS AND SCIENCES, INC., Defendants.

No. 21-CV-10627 (VEC)

United States District Court, S.D. New York

July 12, 2022

MEMORANDUM OPINION & ORDER

VALERIE CAPRONI, United States District Judge

Plaintiff Jason Goodman, appearing pro se, brings this action against numerous defendants^[1] (“Defendants”) asserting claims for: (1) abuse of process in violation of 47 U.S.C. § 230; (2) unjust enrichment in violation of 26 U.S.C. § 501(c)(6); and (3) attorney misconduct pursuant to New York Judiciary Law § 487. Am. Compl., Dkt. 41. Defendants have moved to dismiss Plaintiff's Amended Complaint, arguing: (1) lack of subject matter jurisdiction pursuant to Rule 12(b)(1); (2) lack of standing pursuant to Rule 12(b)(1); (3) failure to state a claim pursuant to Rule 12(b)(6); and (4) that Defendants' prelitigation activity and prior litigation falls within the scope of immunity granted under the Noerr-Pennington doctrine. See Defs. Mem.,

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Dkt. 53. Plaintiff opposes the motion. Pl. Opp., Dkt. 68. For the reasons that follow, Defendants' motion is GRANTED because the Court lacks subject matter jurisdiction.^[2]

BACKGROUND

Plaintiff Jason Goodman is the sole owner and employee of Multimedia System Design, Inc. (“MSD”), d/b/a “Crowdsource the Truth.” Am. Compl. ¶ 13. In 2020, the National Academy of Television Arts and Sciences, Inc. and the Academy of Television Arts & Sciences, Inc. (collectively, “the Academies”), sued MSD for copyright and trademark infringement. See generally Nat'l Acad. of Television Arts & Scis., Inc. v. Multimedia Sys. Design, Inc., 551 F.Supp.3d 408 (S.D.N.Y. 2021) (hereinafter, “NATAS v. MSD” or the “NATAS Action”). That case grew out of MSD's creation and production of the “Crony Awards.” Id. at 418. The “Crony Awards” was an online award show honoring countries that downplayed the COVID-19 pandemic. Id. As part of the show, MSD included an image that depicted the Academies' Emmy Statuette but with the Statuette's atom replaced by a depiction of the COVID-19 virus (the “Infringing Image”). Id.

After becoming aware of the Infringing Image, which was part of a video posted on YouTube, the Academies issued a copyright violation notice to YouTube pursuant to the Digital Millennium Copyright Act (“DMCA”). Id. at 419. Upon learning of the notice, MSD submitted a counter-notice challenging the removal of the video containing the Infringing Image. Id. Defendants filed suit to protect their copyright and trademark rights and ultimately prevailed. Id. at 433.^[3]

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Plaintiff alleges that, before the NATAS Action was filed, Plaintiff offered to remove “all occurrences of the alleged infringement” if Defendants first withdrew their complaint to YouTube. Am. Compl. ¶ 56. Plaintiff alleges that it was unreasonable for the Academies, represented by Esquenet, to reject his pre-litigation offer. Id. His complaint recites other events that occurred during NATAS v. MSD as part of the factual background of this case.

Plaintiff commenced this action on December 13, 2021; on March 15, 2022, with leave from the Court, Plaintiff filed an amended complaint. See Dkts. 1, 41.^[4] Plaintiff claims Defendants are liable for abuse of process and attorney misconduct for having initiated the prior lawsuit against MSD.^[5] Am. Compl. ¶ 1. Plaintiff also asserts a claim for unjust enrichment. Id. On April 5, 2022, Defendants moved to dismiss Plaintiff's amended complaint, see Defs. Mem., which Plaintiff opposes, Pl. Opp. On April 15, 2022, Plaintiff filed a motion for Rule 11 sanctions against Defendants. See Dkt. 65.^[6]

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DISCUSSION

I. Legal Standard

The party asserting that the Court has subject matter jurisdiction over a particular claim has the burden of proving by a preponderance of the evidence that the court has jurisdiction. Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). In resolving a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), courts “must take all uncontroverted facts in the complaint [] as true, and draw all reasonable inferences in favor of the party asserting jurisdiction.” Tandon v. Captain 's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). Where “jurisdictional facts are placed in dispute,” however, “‘the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits.'” Id. (quoting APWUv. Potter, 343 F.3d 619, 627 (2d Cir. 2003)); see also Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (“In resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1),” the Court “may consider evidence outside the pleadings.” (citation omitted)).

“It is well established that the submissions of a pro se litigant must be construed liberally and interpreted to raise the strongest arguments that they suggest.” Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (emphasis in original) (internal quotation marks and citation omitted). Courts are required to give pro se submissions “special solicitude,” Ruotolo v. I.R.S., 28 F.3d 6, 8 (2d Cir. 1994), because “[i]mplicit in the right of self-representation is an obligation on the part of the court to make reasonable allowances to protect pro se litigants from inadvertent forfeiture of important rights because of their lack of legal training,” Triestman, 470 F.3d at 475 (quoting Traguth v. Zuck, 710 F.2d 90, 95 (2d Cir. 1983)). Because Goodman is a pro se plaintiff, the Court construes Goodman's pleadings liberally and draws every inference in his favor. Nevertheless, for the reasons discussed below, the Court grants the Motion to Dismiss.

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II. The Court Lacks Subject Matter Jurisdiction

An action must be dismissed for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) when the trial court lacks power to adjudicate the case. Biran v. JP Morgan Chase & Co., 2002 WL 31040345, at *1 (S.D.N.Y. Sept. 12, 2002). “[F]ailure of subject matter jurisdiction is not waivable and may be raised at any time by a party or by the court sua sponte.” Lyndonville Sav. Bank & Trust Co. v. Lussier, 211 F.3d 697, 700 (2d Cir. 2000). A district court has subject matter jurisdiction if the case arises under federal law, see 28 U.S.C. § 1331, or if there is complete diversity between the parties and the amount in controversy exceeds $75,000, see 28 U.S.C. § 1332.

A. Federal Question Jurisdiction

To successfully invoke federal question jurisdiction, claims must arise “under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Plaintiff asserts that the Court has federal question jurisdiction under the Communications Decency Act, 47 U.S.C. § 230(c)(1), and under Section 501 of the Internal Revenue Code, 26 U.S.C. § 501(c)(6). An action presents a federal question when the complaint “establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law.” Perpetual Sec., Inc. v. Tang, 290 F.3d 132, 137 (2d Cir. 2002) (quoting Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 25 (2d Cir. 2000)). In this case, Plaintiff purports to state claims under two federal statutes - 47 U.S.C. § 230(c)(1) and 26 U.S.C. § 501(c)(6).

1. 47 U.S.C. § 230(c)(1)

Plaintiff asserts that the Court has subject matter jurisdiction over Plaintiff's abuse of process claim, a state-law tort, pursuant to 47 U.S.C. § 230(c)(1), which is part of the

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Communications Decency Act (“CDA”).^[7] Plaintiff argues that, under the CDA, “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c)(1); see also Am. Compl. ¶ 20. At its core, “[Section] 230 bars ‘lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions - such as deciding whether to publish, withdraw, postpone or alter content.'” Fed. Trade Comm'n v. LeadClick Media, LLC, 838 F.3d 158, 174 (2d Cir. 2016) (quoting Jones v. Dirty World Entm't Recordings LLC, 755 F.3d 398, 407 (6th Cir. 2014)).

Liberally construed, Plaintiff alleges that Defendants abused process and engaged in attorney misconduct when the Academies sued MSD for copyright infringement in the NATAS Action, and that Esquenet failed in her “legal and ethical obligation” to tell her clients, the Academies, about “substantial defects” in their claims. Am. Compl. ¶ 81. Plaintiff argues that under Section 230(c)(1), his company, MSD, is “a provider and a user of interactive computer services,” that Plaintiff is individually “a separate legal entity” from MSD, and, therefore, under Section 230(c)(1), MSD could not be sued for content provided by Plaintiff. Id. ¶ 80. Accordingly, Plaintiff argues, Defendants abused process when they brought suit against MSD because MSD is immune from liability for Goodman's infringing use of the Academies' statuette. Id. ¶ 81.

Defendants argue that Plaintiff fails sufficiently to allege any facts suggesting that federal question jurisdiction exists. Defs. Mem. at 10. According to Defendants, Section 230(c)(1)

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creates an affirmative defense; it does not create a cause of action. Id. at 11; see also Herrick v. Grindr LLC, 765 Fed.Appx. 586, 589 (2d Cir. 2019) (discussing Section 230(c)(1)'s function of providing immunity to service providers against specific causes of action) (summary order). Thus, Defendants claim that Section 230(c)(1) was not properly invoked by Plaintiff, and that Section 230(c)(1) cannot be the basis for federal question jurisdiction in this case.

The Court agrees with...