Joint Stock Co. v. Infomir LLC
| Decision Date | 04 September 2018 |
| Docket Number | 16-CV-1318 (GBD) (BCM) |
| Parties | JOINT STOCK COMPANY CHANNEL ONE RUSSIA WORLDWIDE, et al., Plaintiffs, v. INFOMIR LLC, et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
REPORT AND RECOMMENDATION TO THE HON. GEORGE B. DANIELS
Now before the Court, for report and recommendation, is a motion to dismiss for lack of personal jurisdiction and inadequate service of process. (Dkt. No. 482.) The motion was originally made by defendants Infomir GmbH, Alexander Marahovsky (A. Marahovsky), Evgeni Levitin, and Telecommunications Technologies, Ltd. (Teletec), but remains pending only as to Infomir GmbH, a German corporation headquartered in Frankfurt. Also before the Court, for decision, is plaintiffs' cross-motion for additional jurisdictional discovery. (Dkt. No. 497.) For the reasons that follow, I recommend that Infomir GmbH's motion be granted, and I deny the cross-motion.
Plaintiffs are a group of Russian television broadcasters (the Broadcasters) suing to redress what they characterize as the "pirating" and resale of their programming (the Programming) to consumers in the United States, over the internet, without authorization or license fees.1 Plaintiffsare "organized under the laws of the Russian Federation," First Amended Complaint (FAC) (Dkt. No. 211) ¶¶ 6, 15, 19, 21, 23, 26, and most are headquartered in Moscow. Id. ¶¶ 6, 23, 26. Plaintiffs produce and distribute Russian-language television programming, which is broadcast via satellite in Russia and neighboring countries. Id. ¶ 62.
Plaintiffs brought this action on February 19, 2016, and filed their FAC on April 5, 2017, asserting claims under the Federal Communications Act, 47 U.S.C. §§ 553 and 605, the Digital Millennium Copyright Act, 17 U.S.C. § 1201, the Lanham Act, 15 U.S.C. § 1125, and the Copyright Act, 17 U.S.C. § 101 et seq., as well as related claims under New York law. In broad outline, plaintiffs allege that all defendants intercept their encrypted satellite transmissions and re-transmit the pirated content to paying subscribers in the United States through their own unlicensed internet protocol television (IPTV) streaming services. FAC ¶¶ 1, 61, 77. In addition, plaintiffs allege that the "Infomir Defendants," discussed in more detail below, "manufacture and sell set-top boxes which are configured and marketed to facilitate piracy" by others. Id. ¶ 1.
The Infomir Defendants are Infomir LLC, a New York limited liability company with its principal place of business in Brooklyn, FAC ¶ 30; Infomir GmbH, a German corporation with its principal place of business in Frankfurt, id. ¶ 31; Teletec, "a Ukrainian entity" with its principal place of business in Odessa, id. ¶ 32; A. Marahovsky, who is one of two managing directors of Infomir GmbH, and who also "owns and controls" Teletec, id. ¶ 33; and Levitin, who is the second managing director of Infomir GmbH. Id. ¶ 34.2 Infomir LLC was named as a defendant in theoriginal Complaint (Dkt. No. 1) and appeared, through counsel, on April 19, 2016. (Dkt. No. 43.) The other Infomir Defendants were first named in the FAC.
Plaintiffs allege that the Infomir Defendants manufacture and sell "AURA" and "MAG" set-top boxes (STBs) under the Infomir brand name. FAC ¶¶ 35, 116, 119. These STBs, according to plaintiffs, are "configured and marketed to facilitate piracy" of television programming, including plaintiffs' Programming. Id. ¶¶ 1, 120. The Infomir brand STBs utilize software known as "Stalker middleware," id. ¶ 1, "which is specifically designed to promote and exploit piracy." Id.3 The AURA STBs arrive "pre-loaded" with "software 'apps' that permit subscribers to launch browsers from the [STB] permitting subscribers to view Broadcasters' channels over streaming services," id. ¶¶ 1, that is, unauthorized IPTV services which are operated by other defendants herein (the Streaming Defendants) or by "John Doe pirates." See id. ¶¶ 115, 117, 119. The MAG STBs are not "preloaded" with software, but the Infomir Defendants also use them to "encourage piracy," by (a) marketing them to "other John Doe pirates" and encouraging "such John Does to set up piracy operations," and (b) encouraging consumers who own the MAG STBs to purchase "subscriptions to unauthorized streams" from the Streaming Defendants or the John Doe pirates. Id. ¶ 116.
According to plaintiffs, the Infomir brand STBs are "primarily of assistance in the unauthorized decryption of satellite cable programming," FAC ¶ 218, and "primarily designed for the purposes of circumventing the Broadcasters' technological measures controlling access to Broadcasters' copyrighted works," id. ¶ 256, such that the manufacture and sale of these products, in and of itself, violates the Federal Communications Act, 47 U.S.C. § 605(e)(4), and the DigitalMillennium Copyright Act, 17 U.S.C. § 1201(b). FAC ¶ 256.Other than alleging that both Teletec and Infomir GmbH are controlled by A. Marahovsky, the FAC does not detail the corporate relationships among the Infomir Defendants. See FAC ¶¶ 31-32 (). Nor, for the most part, do plaintiffs otherwise distinguish between or among them, frequently attributing the conduct at issue to the "Infomir Defendants" as a group. See, e.g., id. ¶¶ 1, 2, 36, 37, 115-17, 119, 125, 155. Plaintiffs adopt the same "group pleading" approach to personal jurisdiction, alleging that all defendants (including the Infomir Defendants) are subject to personal jurisdiction in New York "because they are located in (or within 100 miles of) this judicial district, conduct business in this judicial district, and have engaged in tortious conduct outside the jurisdiction causing damage within the jurisdiction making long arm jurisdiction appropriate under New York law." FAC ¶ 59.
Plaintiffs clearly allege, however, that it is Teletec (the Ukrainian entity) that manufactures the STBs, see FAC ¶¶ 35 (), 113, 259 & Ex. 6, and it is Infomir LLC (the New York entity) that developed, distributes, owns, and controls the Stalker middleware, which is the "key component" that "transforms the MAG box into a vehicle for large-scale infringement." Id. ¶¶ 126-27.4 Plaintiffs further allege that both Infomir LLC and Infomir GmbH sell STBs manufactured by Teletec, including through their websites. Id. ¶ 123.
The Infomir Defendants promote the Infomir brand STBs through a number of websites, including www.infomir.eu (the EU Website), www.infomirusa.com, and www.infomir.us (the USWebsite). FAC ¶¶ 30, 123. The FAC alleges that Infomir LLC owns and operates all three websites. Id. ¶ 30; see also id. ¶¶ 134, 136, 138 & Ex. 13 (). It also alleges that Infomir GmbH operates all three websites. Id. ¶ 123. More recently, plaintiffs have asserted, through their attorneys, that the EU Website is "owned by Infomir GmbH." See 1/12/18 Pl. Mem. (Dkt. No. 499) at 6. Although not mentioned in the FAC, there is also a "global" website at infomir.com (the Global Website), which contains information about the "Infomir Group."5
As of 2017, when the FAC was filed, the "Contact Us" page of the US Website named "Infomir LLC" and listed its Brooklyn address and telephone number. See 10/19/17 Rowley Decl. ¶ 42 & Ex. P. The "Contact" page of the EU Website, as of 2017, listed four "Infomir" entities: "Infomir, Ukraine" (providing Teletec's address in Odessa), "Infomir, USA" (providing Infomir LLC's address in Brooklyn), "Infomir, Germany," and "Infomir, UAE." Id. ¶¶ 60-62 & Ex. Y.6
As noted above, Infomir LLC appeared in this action on April 19, 2016. Since then it has fully participated in all phases of the litigation, including discovery. Among other things, it has produced documents, answered interrogatories, and made its Chief Executive Officer Gregory Goldfedib available for deposition pursuant to Fed. R. Civ. P. 30(b)(6).7 Born in the Ukraine, Goldfedib immigrated in 1999, settled in Brooklyn, and is now a U.S. citizen. See 2/16/18 Dowd Decl. (Dkt. No. 527) Ex. L (Goldfedib Dep. Tr.), at 10-11; id. Ex. P.
On October 17, 2017, plaintiffs served the summons and the FAC on Goldfedib while he was in the "Infomir" booth at a National Association of Broadcasters (NAB) trade show at Jacob Javits Center in New York City. In their affidavits of service, filed on November 7, 2017, plaintiffs asserted that they had thereby served all four Moving Defendants: Infomir GmbH, Teletec, A. Marahovsky, and Levitin. (Dkt. Nos. 404-407.)
On December 22, 2017, Infomir GmbH, A. Marahovsky, Levitin, and Teletec filed the instant motion, arguing that all claims against them should be dismissed pursuant to Fed. R. Civ. P. 12(b)(5), for insufficient service of process, and Fed. R. Civ. P. 12(b)(2), for lack of personal jurisdiction. In an accompanying declaration, A. Marahovsky acknowledged that he and Levitin are managing directors of Infomir GmbH but asserted that all of the German company's "offices, documents, and personnel are in Germany." 12/22/17 A. Marahovsky Decl. ¶¶ 5, 9. Infomir GmbH has no offices, personnel, equipment, assets, sales, or revenue in New York; does not manufacture or distribute STBs for New York customers through any New York distributor or retailer; does notadvertise in New York; and is not "interested in selling its products" in New York. Id. ¶¶ 7-9. A. Marahovsky specifically denied that Infomir GmbH "transfer[s] any product" for Goldfedib or Infomir LLC to sell in the United States. Id. ¶ 14. Further, A. Marahovsky attested, Infomir LLC is not a subsidiary or agent of Infomir GmbH; Goldfedib is not the German company's...
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