Lisa Coppola, LLC v. Mathew K. Higbee, Esq., Nicholas Youngson, RM Media, Ltd.
| Decision Date | 09 March 2020 |
| Docket Number | Case No. 1:19-cv-00678 |
| Parties | LISA COPPOLA, LLC d/b/a THE COPPOLA FIRM, Plaintiff, v. MATHEW K. HIGBEE, ESQ., NICHOLAS YOUNGSON, RM MEDIA, LTD., and HIGBEE & ASSOCIATES, Defendants. |
| Court | U.S. District Court — Western District of New York |
(Docs. 8 and 15)
On May 24, 2019, Plaintiff Lisa Coppola, LLC, doing business as The Coppola Firm ("Plaintiff"), filed a Complaint against Defendants RM Media, Ltd. ("RM"); Nicholas Youngson, a photographer who allegedly owns RM; and RM's legal counsel, Mathew K. Higbee, Esq.1 and Higbee & Associates (the "Higbee Defendants") (collectively, "Defendants"). Plaintiff asserts that it is the victim of Defendants' fraudulent scheme in which they offer images on the internet "free for use" subject to certain licensing requirements and then seek damages for copyright infringement from those who use the images without attribution.
Plaintiff's Complaint seeks declaratory relief pursuant to the Declaratory Judgment Act, 28 U.S.C. 2201 (the "DJA"), and asserts claims pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962 ("RICO"), and New York General Business Law § 349 ("GBL § 349"). In addition to a declaratory judgment,Plaintiff seeks an injunction, statutory remedies under RICO, compensatory damages, attorney's fees, and costs. Pending before the court are motions to dismiss filed by the Higbee Defendants (Doc. 8) and RM (Doc. 15). Plaintiff opposes the motions.
Plaintiff is represented by Lisa A. Coppola, Esq., and Erin Kathleen Ewell, Esq. The Higbee Defendants are represented by Rayminh L. Ngo, Esq. RM is represented by Jeanne M. Weisneck, Esq. Defendant Nicholas Youngson has not responded to the Complaint or appeared in the case, and it is unclear whether he has been properly served.
Plaintiff, a law firm based in Buffalo, New York, publishes "educational blog posts" on its website regarding changes in the law. (Doc. 1 at 5, ¶ 25.) These blog posts are sometimes accompanied by a "relevant image[,]" id., ¶ 26, and Plaintiff alleges it has a policy that all images it uses must be owned, created, or licensed for use by the firm unless they are "royalty-free." Id., ¶ 28. Plaintiff asserts that it "generally does not generate revenue" from its blog posts. Id., ¶ 27. It was Plaintiff's understanding that images labeled "free to use, share or modify, even commercially" could be used free of charge without attribution. Id., ¶ 30.
Plaintiff posted five images (the "Images") on its website that were allegedly made available online by Defendants free of charge, but the Complaint does not specify when or from what website Plaintiff obtained the Images. In March 2019, Plaintiff received a letter from an unspecified Defendant or Defendants demanding payment of $9,200 for use of the Images. Plaintiff alleges that it removed the Images from its website after it received the March 2019 letter.
Counsel for Plaintiff attempted to negotiate a settlement with a "Claims Resolution Specialist" employed by defendant Higbee & Associates, id. at 7, ¶ 39, but no settlement was reached. Defendants allegedly threatened litigation, seeking up to $150,000 in damages, and mailed Plaintiff a draft complaint which they represented they would file if Plaintiff did not resolve the matter within fifteen days.
Plaintiff asserts that Defendants do not have a valid copyright claim for the Images and that Defendants "intentionally lure[]" consumers to use their images with the claimthat they are free to use, "then extort[] the deceived consumers to make a profit." (Doc. 1 at 8, ¶ 51.) The Complaint alleges that Plaintiff has identified "many victims" of Defendants' purported scheme. Id. at 7, ¶ 44.
The Complaint seeks a declaratory judgment that Plaintiff's use of the Images was not copyright infringement. It further alleges violations of RICO predicated on mail fraud and seeks a court order requiring Mathew Higbee to "divest himself of any direct or indirect interest in defendants Higbee & Associates [or] RM Media," id. at 12, ¶ 80, requiring Nicholas Youngson to divest himself of any interest in RM, "impos[ing] reasonable restrictions on defendants Higbee and Youngson[,]" id., ¶ 82, and dissolving Higbee & Associates and RM. Based upon the same allegations, the Complaint also asserts Defendants knowingly and willfully violated GBL § 349 for unfair and deceptive business practices for which Plaintiff seeks treble damages along with its attorney's fees and costs.
The Higbee Defendants move to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to plausibly allege claims for which relief can be granted. They also request dismissal of Plaintiff's RICO claim based on Plaintiff's failure to timely file a RICO case statement ("RCS") as required by the Western District of New York's Local Rules of Civil Procedure. RM moves to dismiss Plaintiff's claims on three grounds: under Federal Rule of Civil Procedure 12(b)(5) for insufficient service of process, under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, and under Rule 12(b)(6) for failure to state a claim. RM also asks the court to dismiss Plaintiff's RICO claim due to Plaintiff's failure to timely file an RCS.
In RM's motion to dismiss and accompanying papers, counsel for RM represents that the date on which RM was served with the Summons and Complaint is unknown. RM therefore asks the court to accept its motion to dismiss nunc pro tunc if it is untimely or, in the alternative, to dismiss the Complaint for insufficient service of process pursuantto Federal Rule of Civil Procedure 12(b)(5). Plaintiff has not responded to RM's arguments concerning the sufficiency of service.
Federal Rule of Civil Procedure 4(f) governs service of a party outside of the United States and provides that such service may be effected "by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial Documents[.]" Fed. R. Civ. P. 4(f)(1). Rule 4(f) recognizes alternative methods of acceptable service where no internationally agreed method applies. See Fed. R. Civ. P. (4)(f)(2). When a defendant seeks dismissal for insufficient service of process under Rule 12(b)(5), "the plaintiff bears the burden of proving adequate service." Dickerson v. Napolitano, 604 F.3d 732, 752 (2d Cir. 2010).
RM concedes that it eventually received a copy of the Summons and Complaint. As no valid return of service has been filed, the court is unable to ascertain when RM was served through its accountant. Because there is no dispute that RM received the Complaint and corresponding notice of Plaintiff's claims against it, the court accepts RM's motion to dismiss as timely filed. The court therefore need not and does not determine whether Plaintiff has established that it obtained adequate service of RM.
RM seeks dismissal on the basis that the court does not have personal jurisdiction over it because it is a corporation created and existing under the laws of the United Kingdom, where its principal place of business is located. "In the absence of a federal statute specifically directing otherwise, and subject to limitations imposed by the United States Constitution," a federal district court's personal jurisdiction over a foreign corporation depends on the law of the forum state. Brown v. Lockheed Martin Corp., 814 F.3d 619, 624 (2d Cir. 2016). "On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996).
Because RM has moved to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), Plaintiff bears the burden of making a "prima facie showing that jurisdiction exists." Best Van Lines, Inc. v. Walker, 490 F.3d 239, 242 (2d Cir. 2007) (citation omitted). In opposing RM's motion to dismiss, Plaintiff argues that the court has specific personal jurisdiction over RM pursuant to New York's Long Arm Statute, N.Y.C.P.L.R. § 302 ("CPLR § 302") because RM's efforts to enforce its copyrights in New York constitute the transaction of business in the state. To determine whether specific personal jurisdiction exists, the court considers first whether "the individual or entity has purposefully directed his activities at the forum and the litigation arises out of or relates to those activities[,]" and second "whether the assertion of personal jurisdiction would comport with fair play and substantial justice." In re del Valle Ruiz, 939 F.3d 520, 529 (2d Cir. 2019) (internal alterations, quotation marks, and citations omitted).
CPLR § 302 provides that "[a]s 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 . . . who in person or through an agent" "transacts any business within the state or contracts anywhere to supply goods or services in the state[.]" CPLR § 302(a)(1). To assess whether jurisdiction is proper, courts ask "(1) whether a defendant has transacted business in such a way that it constitutes purposeful activity; and (2) whether there is an articulable nexus, or a substantial relationship, between the claim asserted and the actions that occurred in New York." Megna v. Biocomp Labs. Inc., 166 F. Supp. 3d 493, 497 (S.D.N.Y. 2016) (quoting DNT Enters., Inc. v. Tech. Sys., 333 F. App'x 611, 613 (2d Cir. 2009)).
Where a party's website is cited as evidence that it transacts...
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