Liberty Media Holdings, LLC v. Letyagin

• Decision Date: 14 February 2013
• Docket Number: No. 02:12–CV–00923–LRH.,02:12–CV–00923–LRH.
• Citation: 925 F.Supp.2d 1114
• Parties: LIBERTY MEDIA HOLDINGS, LLC, Plaintiff, v. Sergej LETYAGIN, d/b/a SunPorno.Com, Ideal Consult, Ltd., “Advert”, “Casta”, “Trikster”, “Worker”, “Likis”, “Tester” and Does 1–50, Defendants.
• Court: U.S. District Court — District of Nevada

925 F.Supp.2d 1114

LIBERTY MEDIA HOLDINGS, LLC, Plaintiff,

v.Sergej LETYAGIN, d/b/a SunPorno.Com, Ideal Consult, Ltd., “Advert”, “Casta”, “Trikster”, “Worker”, “Likis”, “Tester” and Does 1–50, Defendants.

No. 02:12–CV–00923–LRH.

United States District Court, D. Nevada.

Feb. 14, 2013.

Laura Bielinski, Mitchell J. Langberg, Brownstein Hyatt Farber Schreck, LLP, Las Vegas, NV, for Plaintiff.

Evan Fray–Witzer, Ciampa Fray–Witzer, LLP, Boston, MA, James D. Boyle, Kimberly J. Cooper, Cotton, Driggs, Walch, Holley, Woloson & Thompson, Las Vegas, NV, Valentin David Gurvits, Boston Law Group, PC, Newton Center, MA, for Defendants.

ORDER

LARRY R. HICKS, District Judge.

This is a copyright dispute. Before the court is defendants Sergej Letyagin and Ideal Consult, Ltd.'s (“Ideal”) Motion to Dismiss for Lack of Personal Jurisdiction (# 16 ¹). Plaintiff Liberty Media Holdings, LLC (“Liberty Media”) has responded (# 28), and Letyagin and Ideal have replied (# 30). Also before the court is Liberty Media's Motion to Strike (# 34), to which Letyagin and Ideal have responded (# 37).

I. Facts and Procedural History

Both Letyagin and Liberty Media run websites on which users can view pornographic videos. (Complaint # 1, p. 2; Letyagin and Ideal's Motion to Dismiss # 16, Ex. 1, p. 1.) Liberty Media has alleged that Letyagin and his company Ideal have infringed its copyrights in at least six such videos. Liberty Media claims that Letyagin and Ideal copied Liberty Media's videos and posted them on Ideal's own websites, including SunPorno.com, the website at issue here.

Letyagin is currently a resident of the Czech Republic, and Ideal is a Seychellois corporation. (Letyagin and Ideal's Motion to Dismiss # 16 at Ex. 1, pp. 1–2). Letyagin has neither resided in nor visited the United States. ( Id. at Ex. 1, p. 1.) He does not maintain servers in the United States, he does not advertise there, and he has never paid United States taxes. ( Id.)

Letyagin is Director of Technology for Ideal. ( Id.) Ideal does not advertise in the United States, it has never paid United States taxes, and it does not have any employees in the United States. ( Id. at Ex. 1, p. 3.) Ideal does, however, contract with a company that provides server space on servers located in the United States. ( Id.) Ideal also contracts with foreign companies who advertise to United States residents through pop-up and banner ads on SunPorno.com. ( Id. at Ex. 1, p. 5.) The SunPorno website had been registered with an Internet registrar located in the United States, but it is now registered with a foreign registrar.² ( Id. at Ex. 1, pp. 3–4.)

While SunPorno does not offer “premium memberships” currently, it has offered such memberships in the past. ( Id. at Ex. 1, p. 5.) These memberships took the form of access to “white label sites”—sites on which SunPorno agreed to put its logo but did not create, own, or run. ( Id. at Ex. 1, p. 6.)

II. Jurisdiction under Federal Rule of Civil Procedure 4(k)(2)

The parties agree that jurisdiction under Federal Rule of Civil Procedure 4(k)(2) is at issue here.³ The appropriate exercise of jurisdiction under this Rule, commonly referred to as the federal long-arm statute, invokes three requirements. “First, the claim against the defendant must arise under federal law. Second, the defendant must not be subject to the personal jurisdiction of any state court of general jurisdiction. Third, the federal court's exercise of personal jurisdiction must comport with due process.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1159 (9th Cir.2006) (citations omitted). The plaintiff bears the burden of proving the first and third requirements. Id. However, “absent any statement from [the defendant] that it is subject to the courts of general jurisdiction in another state, the second requirement of Rule 4(k)(2) is met.” Holland America Line Inc. v. Wartsila N. America, Inc., 485 F.3d 450, 462 (9th Cir.2007) (collecting cases).

Here, Letyagin has not asserted that he and his company are subject to the courts of general jurisdiction in another state. Furthermore, since Liberty Media has only asserted claims under the Copyright Act, Liberty Media has successfully demonstrated that its claims “arise under federal law.” Thus, the remaining requirement is whether the exercise of personal jurisdiction comports with due process.

A. Minimum Contacts under Rule 4(k)(2)

“The due process analysis under Rule 4(k)(2) is nearly identical to traditional personal jurisdiction analysis with one significant difference: rather than considering contacts between [the defendant] and the forum state, we consider contacts with the nation as a whole.” Id. at 462. To establish that personal jurisdiction over the foreign defendant is proper, then, Liberty Media must show that Letyagin and Ideal have at least “ ‘minimum contacts' with [the United States] such that the exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’ ” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir.2004) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).⁴

When a defendant challenges the exercise of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant. Id. Where, as here, the court receives only written materials, the plaintiff need only make a prima facie showing of jurisdiction through its pleadings and affidavits to avoid dismissal. Id. The plaintiff cannot simply rest on the bare allegations of its complaint; however, uncontroverted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor. Id.

A three-part test applies to determine whether the exercise of specific jurisdiction satisfies the requirements of due process: (1) the non-resident defendant must have either purposefully directed his activities at the United States or purposefully availed himself of the protection of its laws; (2) the claim must arise out of the defendant's United States-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice— i.e., it must be reasonable. Yahoo! Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 433 F.3d 1199, 1205–06 (9th Cir.2006) (en banc). The plaintiff bears the burden of establishing the first two prongs, and if the plaintiff succeeds “the burden then shifts to the defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be reasonable.” Schwarzenegger, 374 F.3d at 802 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476–78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). The court measures the contacts with the United States forum at the time the claim arose. See Farmers Insurance Exchange v. Portage La Prairie Mutual Insurance Co., 907 F.2d 911, 913 (9th Cir.1990).

B. Purposeful Availment or Direction

Although the term “purposeful availment” is often used as shorthand to identify the first prong, it encompasses both purposeful availment and purposeful direction, which “are, in fact, two distinct concepts.” Schwarzenegger, 374 F.3d at 802. Purposeful availment usually applies in cases sounding in contract and is typically established by evidence of the defendant's actions in the forum, such as executing or performing a contract there. Id. By contrast, purposeful direction usually applies in cases sounding in tort and is typically established by evidence of the defendant's activities outside the forum that are directed at the forum. Id. at 803. As copyright infringement is often characterized as a tort, purposeful direction is the proper analytical framework for this case. Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir.2010).

Purposeful direction is determined under the “effects” test of Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). The effects test imposes three requirements: “the defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the [United States], (3) causing harm that the defendant knows is likely to be suffered in the [United States].” Yahoo!, 433 F.3d at 1206 (citation, brackets and internal quotations omitted). Importantly, notwithstanding its label, the “effects” test is not satisfied merely by a foreign act with foreseeable effects in the forum; there must be “something more”—namely, “express aiming” at the forum state. Bancroft & Masters, Inc. v. Augusta National Inc., 223 F.3d 1082, 1087 (9th Cir.2000) (citing Calder, 465 U.S. at 789, 104 S.Ct. 1482).

The cases addressing jurisdiction under Rule 4(k)(2) have often turned on the “express aiming” requirement.⁵See Pebble Beach, 453 F.3d at 1159–60;Graduate Management Admission Council v. Raju, 241 F.Supp.2d 589, 598–99 (E.D.Va.2003). In Raju, for instance, the court considered jurisdiction over an Indian website that sold copyright-infringing test booklets. The court held that “specific ordering information for United States customers,” prices listed in dollars, testimonials from United States citizens, and advertisements directed at Americans sufficed to show that the defendant “specifically directed his electronic activity at the United States.” Id. at 598. Similarly, in Metro–Goldwyn–Mayer Studios Inc. v. Grokster, Ltd., 243 F.Supp.2d 1073 (C.D.Cal.2003), the court found that Rule 4(k)(2) supported personal jurisdiction where the defendant website knew a significant number of its users were American and where the defendant was “constructively aware” of commercial agreements entered into with Americans “daily.” On the other hand, in Pebble Beach, the Ninth Circuit held that a “.com domain name,” the use of a famous American trademark, and a record of American customers did not successfully demonstrate “express aiming.” 453 F.3d at 1159. Notably, each of these Rule 4(k)(2) case...