Morningstar Films, LLC v. Nasso
| Decision Date | 15 August 2021 |
| Docket Number | 20-cv-2552 (ENV) (RML) |
| Citation | 554 F.Supp.3d 525 |
| Parties | MORNINGSTAR FILMS, LLC and Grandmaster Jhong Ukh Kim, Plaintiffs, v. Julius R. NASSO, J.R. Nasso Productions, LLC, Darc Film, LLC, Phillip Goldfine, Industry Releasing, Inc. and Hollywood Media Bridge, LLC, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Francelina Maria Perdomo, Kyle George Kunst, Gallet Dreyer & Berkey, LLP, New York, NY, Gary Robert DeFilippo, Law Offices of Gary R. Defilippo, PC, Staten Island, NY, for Plaintiffs.
Robert J. Hantman, Hantman & Associates, New York, NY, for Defendants J.R. Nasso Productions, LLC, Darc Film, LLC, Phillip Goldfine, Industry Releasing, Inc., Hollywood Media Bridge, LLC.
VITALIANO, D.J.
Plaintiffs Jhong Ukh Kim and Morningstar Films, LLC bring this copyright infringement action against Julius R. Nasso, J.R. Nasso Productions, LLC, Darc Film, LLC, Phillip Goldfine, Industry Releasing, Inc. and Hollywood Media Bridge, LLC. Defendants now move to dismiss pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure and, in the alternative, request that the Court abstain from hearing the case. For the reasons set forth below, defendants’ motion is granted in part and denied in part.
This case arises from disputes over the distribution of the movie entitled "Darc ". Interpersonal relationships among many of the parties, apparently, long antedated its production. Jhong Ukh Kim, for example, had known Julius R. Nasso, even more prominent as a film producer, for decades when, in 2014, Nasso approached Kim seeking his participation in the production of Darc. Compl., Dkt. 1, ¶ 21. Nasso had been given the plot and characters for the film from actor Tony Schiena, who asked Nasso to get involved as a producer. Id. ¶ 28. Nasso, in turn, asked Kim to help finance and act in the movie. Id. A personage in his own right, Kim is a karate Grand Master, having earned one of only three ninth-degree black belts in the world, and has trained thousands of students and won various awards for his work. Id. ¶¶ 21–25. Nasso also asked Kim's three sons, who were also trained in karate, to participate. Id.
Phillip Goldfine, another long-time friend of Nasso, controlled a web of motion picture making companies, including 5G Productions, Inc., Industry Releasing, Inc. and Hollywood Media Bridge, LLC. Id. ¶ 29. Over the years, Nasso and Goldfine had collaborated on several cinema projects. Id. ¶ 30. While Kim and Nasso were on a trip to Los Angeles in November 2014, Nasso introduced Kim to Goldfine. Id. ¶ 29. At some point thereafter, Goldfine became involved in the production of Darc. Id.
Venturing on, in December 2014, Kim and Nasso created Morningstar, LLC to develop and produce Darc. Id. ¶ 32. It was agreed by the venturers that Morningstar would become the exclusive owner of all intellectual property related to Darc , including its copyrights. Id. ¶ 33. It was also agreed that no contract or agreement purporting to bind Morningstar would be valid unless it was executed by all of Morningstar's managers: Kim, Nasso and Schiena.
Id. ¶¶ 32, 34. Although Nasso would, in February 2016, assign his Morningstar membership units to Darc Film, LLC, a Nevada entity of which he is the sole manager, this transaction did not transfer ownership of Darc ’s copyrights. Id. ¶¶ 35–36.
Production of the movie would prove more than just a dream. It came to fruition in Vancouver, Canada, beginning in early 2015 and running through February 2018. Id. ¶¶ 37–38. The U.S. copyright for Darc was registered on February 20, 2018 in Morningstar's name, receiving registration number PAu003910215. Id. ¶ 38.
Looking ahead to the film's release, and, apparently, on his own, Kim had, in or around October 2017, retained the services of Elsa Ramo, a California-based attorney with experience negotiating and finalizing agency agreements to distribute films. Id. ¶ 39. At that time, Ramo's firm began negotiating an agency agreement with Goldfine's 5G Productions, Kim says, on behalf of Morningstar, which, if consummated, would have allowed 5G Productions to market and distribute Darc. Id. ¶ 40. The negotiations between 5G Productions, Nasso and Kim continued through March 2018. Id.
Unbeknownst to Kim, plaintiffs charge, Nasso had already struck an agreement on behalf of Morningstar with Goldfine for Goldfine to distribute Darc through another company of his, Industry Releasing. Id. ¶ 42; Nasso Aff., Dkt. 10-4, at Exs. E–F (providing the agreement).2 That agency agreement was entered into on October 30, 2017. Compl. ¶ 43. Although a draft version contained a signature line for Kim, the final agreement contained only signature lines for Nasso and Goldfine, on behalf of their respective corporate entities. Id. ¶¶ 44, 46. The agency agreement signed by Nasso with Industry Releasing makes clear that the distribution rights for Darc that are the object of the agreement are the distribution rights owned by Morningstar. Id. ¶¶ 43, 46. There was no indication in the executed agreement, however, that either Kim or Schiena had consented, much less had done so in writing as, plaintiffs claim, is required by the print venture agreement. See id. ¶¶ 32, 34, 44, 46; Nasso Aff. at Exs. E–F.
Goldfine's distribution company moved swiftly. Without Kim's knowledge and consent, plaintiffs complain, Goldfine and Industry Releasing entered into distribution agreements with Amazon Prime, which made Darc available for rent or purchase in the United States, and Netflix, which began streaming Darc on May 1, 2018 in the United States, Germany, France, Italy and the Netherlands. Id. ¶¶ 47–48; Dkt. 10-5.
Going on offense first, on June 6, 2018, Nasso filed a lawsuit against Kim and his wife in Richmond County Supreme Court. See id. ¶ 49; State Compl., Dkt. 13-3. Nasso alleged that Kim had failed to take the necessary steps to distribute the film, and moved for an order requiring Kim to sign the agency agreement with Industry Releasing. Compl. ¶¶ 50–51. The motion was denied. Id. ¶ 51. After Nasso filed the state action, James Bruce, the director of finance for Industry Releasing and Hollywood Media Bridge, wrote to Nasso directing him to cease distribution of Darc until Kim had signed an agreement. Id. ¶ 54. Goldfine was copied on the email. Id. Undeterred, on September 25, 2018, Goldfine and Industry Releasing recorded a lien on Darc ’s copyright chain of title and a mortgage on Darc , which were later assigned to another entity. Id. ¶¶ 55–57, 60.
Notwithstanding the shots fired during the legal wrangling, Goldfine and Hollywood Media Bridge continue to distribute Darc. Id. ¶ 58. Netflix and Amazon continue to stream Darc in the United States. Id. Kim and Morningstar have not received any funds or royalties relating to the film. Id. ¶ 59. While continuing to defend Nasso's action against him in state court, Kim, along with Morningstar, filed the instant action on June 8, 2020, bringing one claim of copyright infringement related to Darc's distribution. Id. ¶¶ 61–77; Dkt. 10-3.
Three of the six defendants—Goldfine, Industry Releasing and Hollywood Media Bridge (the "California defendants")—challenge personal jurisdiction, moving to dismiss the case against them under Federal Rule of Civil Procedure 12(b)(2). See Defs.’ Mem., Dkt. 10-11, at 8–10. Jurisdictional challenges to a court's authority over a defendant or its power to entertain the subject matter of the lawsuit at all take priority over motions to dismiss sought on other grounds. They must be resolved by the court before moving on to any substantive dismissal motion. See Polera v. Bd. of Educ. of Newburgh Enlarged City Sch. Dist. , 288 F.3d 478, 481 (2d Cir. 2002) ; Arrowsmith v. United Press Int'l , 320 F.2d 219, 221 (2d Cir. 1963). On such questions, the plaintiff bears the burden to establish a court's personal jurisdiction over all defendants. See Troma Entm't, Inc. v. Centennial Pictures Inc. , 729 F.3d 215, 217 (2d Cir. 2013). To defeat a motion contesting the existence of in personam jurisdiction, a plaintiff need only make a prima facie showing of jurisdiction, through legally sufficient allegations of jurisdictional facts. See id. ; Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A. , 722 F.3d 81, 84 (2d Cir. 2013). When considering a motion to dismiss for lack of personal jurisdiction, the district court may rely on pleadings and affidavits submitted by plaintiffs or conduct an evidentiary hearing. See CutCo Indus., Inc. v. Naughton , 806 F.2d 361, 364 (2d Cir. 1986) ; Henkin v. Gibraltar Priv. Bank & Tr. Co. , No. 16-CV-5452 (LDW), 2018 WL 557866, at *2 (E.D.N.Y. Jan. 22, 2018) (quoting Dorchester , 722 F.3d at 86 ). "[T]he showing a plaintiff must make to defeat a defendant's claim that the court lacks personal jurisdiction over it ‘varies depending on the procedural posture of the litigation.’ " Dorchester , 722 F.3d at 84 (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A. , 902 F.2d 194, 197 (2d Cir. 1990) ). Although "[e]ventually personal jurisdiction must be established by a preponderance of the evidence, either at an evidentiary hearing or at trial," "where the issue is addressed on affidavits, all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor, notwithstanding a controverting presentation by the moving party." A.I. Trade Fin., Inc. v. Petra Bank , 989 F.2d 76, 79–80 (2d Cir. 1993).
To determine whether a federal district court has personal jurisdiction over an out-of-state defendant in a federal question case, the court engages in a two-step analysis. See Best Van Lines, Inc. v. Walker , 490 F.3d 239, 243–44 (2d Cir. 2007) ; Sunward Elecs., Inc. v. McDonald , 362 F.3d 17, 22, 24 (2d Cir. 2004). When, as here, a plaintiff eschews any claim that general jurisdiction exists over the contesting defendant, the district court first considers whether the long arm statute of...
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