Rosenthal v. Mpc Computers, LLC

• Decision Date: 02 July 2007
• Docket Number: C.A. No. 06-30060-MAP.
• Citation: 493 F.Supp.2d 182
• Parties: Morris ROSENTHAL, Plaintiff v. MPC COMPUTERS, LLC, et al, Defendants.
• Court: U.S. District Court — District of Massachusetts

493 F.Supp.2d 182

Morris ROSENTHAL, Plaintiff v. MPC COMPUTERS, LLC, et al, Defendants.

C.A. No. 06-30060-MAP.

United States District Court, D. Massachusetts.

July 2, 2007.

COPYRIGHT MATERIAL OMITTED

Michael G. Andrews, Irwin B. Schwartz, Business Litigation Associates, Boston, MA, for Gores Technology Group, LLC.

Kurt E. Bratten, Gesmer Updegrove LLP, Boston, MA, for MPC Computers, LLC.

Zick Rubin, Lori B. Silver, The Law Office of Zick Rubin, Newton, MA, for Morris Rosenthal.

MEMORANDUM AND ORDER RE: REPORT AND RECOMMENDATION WITH REGARD TO MOTION TO DISMISS OF CO-DEFENDANT GORES

(Dkt. Nos. 9 & 19)

PONSOR, District Judge.

Plaintiff, the author of computer maintenance materials, wrote a work entitled "PC Diagnostics and Repair Flowchart," which he, published on his website in December of 2002. In this complaint, he contends that Defendant MPC Computers, LLC ("MPC"), under the supervision and management of co-defendant Gores Technology Group, LLC ("GTG"), copied the substance of his work, including a large portion of it verbatim.

Plaintiff charges both Defendants with federal copyright infringement, 17 U.S.C. § 501, violation of the Digital Millennium Copyright Act ("DMCA"), codified at 17 U.S.C. § 1202(b), violation of the Lanham Act, 15 U.S.C. § 1125(a), common law unfair competition, and violation of the Massachusetts Consumer Protection Statute, Mass. Gen. Laws ch. 93A.

Defendant MPC has filed an answer to Plaintiffs complaint, admitting that it published the materials identified in the complaint without authorization. GTG filed a Motion to Dismiss, both for failure to state a claim and for lack of personal jurisdiction (Dkt. No. 9).

The Motion to Dismiss was referred to Chief Magistrate Judge Kenneth P. Neiman for a report and recommendation. On March 14, 2007, Magistrate Judge Neiman issued his Report and Recommendation, to the effect that Defendant's motion should be denied. GTG has filed an objection to the Report and Recommendation.¹

Upon de novo review of the arguments related to Defendant's Motion to Dismiss, and of Judge Neiman's Report and Recommendation, the court will adopt the Report and Recommendation and deny the Motion to Dismiss.

GTG's objection to the Magistrate Judge's finding that this court may properly exercise personal jurisdiction over this defendant breaks into two segments.

First, GTG alleges that the complaint lacks any adequate allegations that GTG caused tortious injury in this Commonwealth by an act or omission outside the Commonwealth, and that GTG regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this Commonwealth, as required by Mass. Gen. Laws ch. 223A, § 3(d).

This argument was quickly and correctly disposed of by the Magistrate Judge. The complaint, fairly construed, does allege that GTG through its active supervision and management of MPC did cause tortious injury to Plaintiff in the Commonwealth. Moreover, the several contacts reviewed by the Magistrate Judge at 20-21 of the Report and Recommendation (Dkt. No. 19) demonstrate, at least at this stage, that Defendant has at a minimum engaged "in a persistent course of conduct" in the Commonwealth. Mass. Gen. Laws ch. 223A, § 3(d).

The second portion of Defendant's objection is that it was not GTG, but a closely-related corporation, GTG PC Holdings, LLC (the supposed actual owner of MPC during the relevant period) that was the true malefactor here. This attempt to hide the penny by shifting the corporate walnut shells has been criticized by the Massachusetts Supreme Judicial Court in My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 619, 233 N.E.2d 748 (1968). In any event, the allegations in the complaint on their face are sufficient to warrant denial of the motion to dismiss directed at the current Defendant.²

Defendant GTG also objects, substantively, to the Magistrate Judge's recommendation that the Motion to Dismiss, based upon a failure to state a claim, be denied. Defendant complains only that the "weakest of allegations" support Plaintiffs vicarious copyright infringement claim. Weak these allegations may be, at least in Defendant's eyes, but they are clearly adequate to survive a threshold motion to dismiss.

Defendant's argument with regard to the vicarious DMCA violation was not ad dressed in Defendant's memorandum in support of its Motion to Dismiss. The sketchy summary of the oral comments on this point presented to the Magistrate Judge are insufficient to provide a basis for this court to reject the Magistrate Judge's recommendation.

Defendant's objection to the denial of the Motion to Dismiss on the remaining counts may be addressed during discovery and, if appropriate, via a Motion for Summary Judgment pursuant to Fed.R.Civ.P. 56 once discovery closes.

For the foregoing reasons, upon de novo review, the Report and Recommendation of Chief Magistrate Judge Neiman dated March 14, 2007 is hereby ADOPTED. Defendant's Motion to Dismiss (Dkt. No. 9) is hereby DENIED. Co-defendant GTG will have twenty days from receipt of this memorandum to file its answer. The case will thereafter be referred to Chief Magistrate Judge Neiman for a pretrial scheduling conference.

It is So Ordered.

REPORT AND RECOMMENDATION WITH REGARD TO GORES TECHNOLOGY GROUP LLC'S MOTION TO DISMISS THE AMENDED COMPLAINT (Document No. 9)

NEIMAN, Chief United States Magistrate Judge.

Springfield author Morris Rosenthal ("Plaintiff') alleges that MPC Computers, LLC ("MPC") plagiarized his copyrighted guide to power supply troubleshooting for personal computers. Plaintiff has also sued Gores Technology Group, LLC ("GTG"), a California company that allegedly "supervised and managed MPC at the inception of and during the continuation of the infringement." (Amended Complaint ¶ 4.) GTG has moved to dismiss the complaint on personal jurisdiction and merits grounds pursuant to Fed.R.Civ.P. 12(b)(2) and (6). MPC, for its part, has answered the complaint and admitted several of Plaintiff's main allegations.

GTG's motion to dismiss has been referred to this court for a report and recommendation. See 28 U.S.C. § 636(b)(1)(B). For the reasons which follow, the court will recommend that GTG's motion to dismiss be denied.

I. BACKGROUND

The following facts are taken from the complaint and, for personal jurisdiction purposes, several other documents, including an affidavit of Brent Bradley ("Bradley"), GTG's Vice President and Fund General Counsel. See Platten v. HG Bermuda Exempted Ltd., 437 F.3d 118, 134 (1st Cir.2006) (under the typical prima facie standard for personal jurisdiction, the court must "take those specific facts affirmatively alleged as true and construe them in a light most congenial to the plaintiff's jurisdictional claim ... [and then] add to the mix facts put forward by the defendants, to the extent that they are uncontradicted"); Callahan v. Harvest Bd. Int'l, Inc., 138 F.Supp.2d 147, 152-53 (D.Mass.2001) (unlike with a Rule 12(b)(6) motion, "[t]he consideration of materials outside the complaint is appropriate in ruling on a motion to dismiss for lack of personal jurisdiction") (citing cases). Further facts with regard to the personal jurisdiction issue are addressed below.

MPC is a Delaware company headquartered in Idaho; it is in the business of manufacturing and selling personal computers. (Amended Complaint ¶ 3.) GTG is a Delaware company headquartered in California. (Id. ¶ 4.) Plaintiff alleges that, between 2001 and July of 2005, GTG "actively supervised and controlled MPC." (Id. ¶ 37.)

Plaintiff is the author of computer maintenance materials and resides in Massachusetts. (Id. ¶ 2.) He authored a work entitled "PC Diagnostics and Repair Flow Chart" (the "Work"), which he published on his web site in December of 2002. (Id. ¶¶ 10-11.) In 2003, MPC published "KnowledgeBase General Power Supply Troubleshooting" on its web site ("the MPC Solution"), which is alleged to have infringed on Plaintiff's Work. (Id. ¶¶ 18-23.) According to Plaintiff, MPC not only copied the original ideas, techniques, and troubleshooting sequences contained in his Work, but also copied a large portion of the Work verbatim. (Id. ¶ 20.)

In October of 2005, Plaintiff requested MPC to remove the MPC Solution from its web site. (Id. ¶ 52.) MPC immediately complied. (Id. ¶¶ 33, 53.) Thereafter, in February of 2006, Plaintiff registered his Work in the U.S. Copyright Office (id., Ex. 1) and then instituted this action.

Each of the five counts in Plaintiffs complaint is asserted against both MPC and GTG. Count One alleges copyright infringement in violation of 17 U.S.C. § 501. Count Two alleges a violation of the 1998 Digital Millennium Copyright Act ("DMCA"), codified at 17 U.S.C. § 1202(b). Count Three alleges a violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Count Four alleges common law unfair competition. Count Five alleges a violation of sections 9 and 11 of Massachusetts's consumer protection statute, Mass. Gen. L. ch. 93A ("chapter 93A").

GTG filed its motion to dismiss on July 3, 2006. For its part, MPC filed an answer to Plaintiffs complaint one week later; although MPC denies liability with respect to each count (and raises a number of affirmative defenses), it admits "that it published the material identified in the Complaint, to which the copyright is owned by the Plaintiff, without authorization" and "provided no credit or attribution to Plaintiff on its website" (MPC's Answer ¶¶ 11, 20, 26.) MPC's counsel thereafter told Plaintiff's counsel "that MPC is likely to become insolvent in the near future." (Document No. 15 ("Pl.'s Brief') at 6, Exs. G, I.)

As to GTG, Plaintiff alleges the following in his complaint:

[GTG]'s Active Supervision and Control of MPC

34. On or about May 1, 2001, [GTG] acquired the PC Division of Micron Electronics. While under [GTG]'s...