Mattel, Inc. v. Mca Records, Inc.
| Decision Date | 03 August 1998 |
| Docket Number | No. CV 97-6791-WMB (RNBx).,CV 97-6791-WMB (RNBx). |
| Parties | MATTEL, INC., a Delaware corporation, Plaintiff, v. MCA RECORDS, INC., a California corporation, et al., Defendants. |
| Court | U.S. District Court — Central District of California |
Adrian M. Pruetz, Christopher Tayback, Adam D. Samuels, Quinn, Emanuel, Urquhart & Oliver, Los Angeles, CA, for Plaintiff.
Russell J. Frackman, George M. Borkowski, Jeffrey D. Goldman, Brent Rabowsky, Mitchell, Silberberg & Knupp, LLP, Los Angeles, CA, for Defendants.
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AS TO ALL CLAIMS, GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AS TO DEFENDANTS' COUNTERCLAIM, AND DENYING DEFENDANTS' MOTION TO DISMISS
WM. MATTHEW BYRNE, Jr., District Judge.
In March, 1997, a Danish musical group known as "Aqua" released in Europe an eleven-song album, Aquarium. This album included a song entitled Barbie Girl, in which a woman and man assume the identities of two popular Mattel dolls known as Barbie and Ken. Defendants claim this song parodies the popular toys, with the singers referring to Barbie as a "blond bimbo girl" who loves to party and whose "life is plastic." Barbie Girl quickly became a hit in Europe and later was released in the United States where the Aquarium album sold over 1.4 million compact discs (CDs) and cassettes.
On September 11, 1997, Mattel filed suit in this Court, bringing eleven claims1 against MCA and other defendants.2 Defendants, in turn, filed a counterclaim for defamation. On February 19, 1998, this Court denied plaintiff's motion for a preliminary injunction, on the grounds that it was not likely to succeed on the merits.3
Defendants now move for summary judgment; they also seek to dismiss the foreign defendants for lack of subject matter jurisdiction, personal jurisdiction, and forum non conveniens.
Plaintiff moves for summary judgment as to defendants' counterclaim for defamation and request reconsideration of the Court's earlier Order denying a preliminary injunction. Although plaintiff did not file a formal cross-motion for summary judgment on its own claims, during the hearing on April 30, 1998, plaintiff's counsel orally requested that the Court grant summary judgment for Mattel rather than defendants.
At the hearing, the Court advised the parties that, because the pre-trial and trial dates were approaching, it would issue a brief order on the motions, followed by this more detailed order.
MCA Records is a California corporation that sells Aqua's album in the United States. Universal Music & Video Distribution Inc. is a New York corporation that distributes the album in the United States. This Court's jurisdiction over those two defendants is not contested. Three foreign defendants have also been sued by Mattel, and those three defendants have filed a motion to dismiss the case against them for lack of personal jurisdiction. All three foreign defendants are affiliated members of the Universal Music Group. (Pl.'s Ex. H.) All three have an active and on-going relationship with each other. (Cacciatore Dep.; Bowen Dep.)
Universal Music A/S is a Danish corporation ("Universal Denmark"). Aqua recorded the album in Denmark and is party to a recording agreement with Universal Denmark that gives Universal Denmark the worldwide rights to the Aqua album. Universal Denmark has a preexisting agreement with MCA Records that gives MCA the rights to Aqua and other bands for distribution in all countries except Denmark. Universal Denmark collects a license fee for all sales of the album in the United States. MCA Music Scandinavia A/B ("MCA Scandinavia") is a Swedish corporation. Through an agreement with Universal Denmark, it owns the music publishing rights to the words and the music of the Barbie Girl song. It receives money from the sale of Aqua's album anywhere in the world, including those sold in the United States. (Ingestrom Dep. at 40-42.)
Universal Music International, Ltd. ("UMI") is a British holding company that has no rights to the song or to the album. It acts to coordinate information among various international, affiliated companies. However, it does coordinate the release of various musical products by its affiliates all over the world, including in the United States. (Bowen Dep. at 18-23.) Universal Music International then helps "coordinate touring activities and promotional activities" of the released records, including Aqua in the United States and elsewhere around the world. (Id. at 31.) It also sent the Barbie Girl video to MCA in the United States. (Id. at 35.) UMI worked with Universal Denmark to market the Aqua album in the United States and rest of the world. (Id. at 42-71.)
The Ninth Circuit has adopted Pacific Atlantic Trading Co. v. M/V Main Express, 758 F.2d 1325, 1327 (9th Cir.1985).
The Ninth Circuit utilizes seven factors under the third prong of the limited jurisdiction test to determine whether the exercise of jurisdiction is reasonable. See Insurance Co. of North America v. Marina Salina Cruz, 649 F.2d 1266, 1270 (9th Cir. 1981). The following seven factors are relevant: "(A) the extent of the purposeful interjection into the forum state; (B) the burden on the defendant of defending in the forum; (C) the extent of conflict with the sovereignty of defendant's state; (D) the forum state's interest in adjudicating the dispute; (E) the most efficient judicial resolution of the controversy; (F) the importance of the forum to plaintiff's interest in convenient and effective relief; and (G) the existence of an alternative forum." Id.
Defendants argue that the foreign defendants have no offices, employees, property, or agents in the forum, and they have not conducted any business in the forum. Defendants rely on Asahi Metal Indus. Co. v. Superior Court, for the proposition that "the placement of a product into the stream of commerce, without more, is not an act of the defendant purposely directed toward the forum state." 480 U.S. 102, 112, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987).
Defendants also rely on Rano v. Sipa Press, Inc., 987 F.2d 580 (9th Cir.1993). In Rano, the plaintiff-copyright licensor of photographs sued a French licensee, asserting jurisdiction on the basis that the licensee knew that plaintiff's photographs ultimately would be distributed in California due to the licensee's sub-licensing of the photographs to various magazines. Id. at 583-84. The Ninth Circuit rejected an argument that would render all "foreign owners of art who sell their products to publications amenable to personal jurisdiction in every state in which their art is eventually displayed." Id. However, this case is distinguishable. The three foreign defendants did more than merely have their music product end up in California by happenstance. There were cross-licensing agreements between all of the members of the Universal Group. A coordinated plan existed among of all of the defendants to distribute the Barbie Girl song around the world, including the United States.
For example, the artwork for the Barbie Girl recording was delivered to MCA in Los Angles by Universal Denmark in conjunction with the single's release in the United States. (Wheeler Dep. at 45.) Universal Denmark also has exported single versions of the song to the United States. (Id. at 63-64; Cacciatore Dep. at 105.)
UMI coordinated the release of Aqua's album with all of the Universal affiliates around the world, including the United States. (Bowen Dep. at 16.) UMI helps determine which Universal record label, if any, should release a specific album into the United States. (Id. at 23.) As part of that process, UMI sent promotional copies of the Barbie Girl video to MCA in the United States. (Id. at 35.)
Universal Scandinavia operates under a sub-licensing agreement in the United States. (Ingestrom Dep. at 39.) Thus, under this sub-publishing agreement, Universal Scandinavia would receive royalties for each Aqua album sold in the United States. (Id. at 41.) There would also be royalty payments for each time a song was played on the radio. (Id. at 41-42.) MCA Scandinavia sent albums to the United States to their affiliates in the United States for publicity in the hopes of getting the Aqua album used in commercials or other commercial ventures. (Id. at 46-49.)
All of the above contacts show sufficient purposeful availment of the United States by the foreign defendants. The district court cases upon which defendants rely are also distinguishable. In none of them do the defendants actually intend for their activities to have any effect in the forum. Here, the foreign defendants had an intent to affect the forum. Their licensing agreements, and coordination of the release strategies for the Aqua album, coupled with their sending of promotional products to the forum, suggest purposeful availment of the forum.
Defendants argue that the foreign defendants have no meaningful forum-related activities with respect to the claims in this lawsuit. Defendants contend that the foreign defendants do not manufacture, sell or distribute the album in the United States. However, the foreign defendants' conduct facilitates the activities that occurred in the United States. If plaintiff's claims are true, then the foreign defendants...
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