Securities Training Corp. v. SECURITIES SEMINAR
Decision Date | 20 March 1986 |
Docket Number | No. 84 Civ. 8984 (SWK).,84 Civ. 8984 (SWK). |
Citation | 633 F. Supp. 938 |
Parties | SECURITIES TRAINING CORP., Plaintiff, v. SECURITIES SEMINAR, INC., and Roy Lutzi, Defendants. |
Court | U.S. District Court — Southern District of New York |
Robert L. Beerman, New York City, for plaintiff.
Fried, Greenbaum, Spector, Scher, Schwartz & Feldman, New York City, by Jeffrey C. Dannenberg, for defendants.
Plaintiff brought this copyright infringement action pursuant to 17 U.S.C. § 501 et seq. Defendants have moved for dismissal of the complaint on the grounds of lack of personal jurisdiction and improper venue pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(3).
Plaintiff, a New York corporation having its principal place of business in the Southern District of New York, teaches preparation courses for the securities dealer licensing examination. Defendant, Securities Seminar, Inc., a California corporation operating only in the Northern District of California, also conducts preparatory courses for these examinations. Plaintiff alleges it has copyrighted its study materials and that defendants have wilfully infringed on the copyright. Defendants state in affidavits that they have no contacts with New York, derive no revenue from interstate commerce or New York sources, and pay no New York taxes.
Plaintiff makes three arguments in favor of jurisdiction. First, plaintiff argues that defendants waived their right to assert the personal jurisdiction defense by failing to raise it promptly. Second, plaintiff argues that defendants have waived any objections to personal jurisdiction or venue because the parties received an Order of Discontinuance.1 Third, plaintiff maintains that the Court has personal jurisdiction over the defendants through New York's long-arm statute, N.Y. CPLR § 302(a).
Lack of personal jurisdiction is a defense which may be waived by "failure to assert it seasonably...." Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 84 L.Ed. 167 (1939).
In this case, the delay was due largely to the parties' involvement in settlement negotiations. Defendants clearly expected to settle this dispute; an earlier motion could have been premature. Compare Lynn v. Cohen, 359 F.Supp. 565, 566 (S.D.N.Y.1973) ( ) with Marcial Ucin, S.A. v. SS Galicia, 723 F.2d 994, 997 (1st Cir.1983) ( ) and Burton v. Northern Dutchess Hospital, 106 F.R.D. 477, 481 (S.D.N.Y.1985) ( ). Plaintiff's failure to respond promptly to interrogatories also contributed to the delay.
Although their motion was filed ten months after initiation of this suit, the delay was not "harmful" or "subversive of orderly procedure". Commercial Insurance Co. v. Consolidated Stone Co., 278 U.S. 177, 180, 49 S.Ct. 98, 99, 73 L.Ed. 252 (1929) ( ). Thus, defendants have acted seasonably in asserting their defense.
The defense of lack of personal jurisdiction may also be waived "by formal submission in a cause or by submission through conduct." Neirbo Co., 308 U.S. at 168, 60 S.Ct. at 155. The Court's issuance of an Order of Discontinuance, which was not followed by settlement but by restoration of the case to the Court's docket, fails to constitute a waiver by formal submission or conduct. In arguing otherwise, plaintiff has erroneously relied upon Meetings & Expositions, Inc. v. Tandy Corp., 490 F.2d 714 (2d Cir.1974).
In Tandy, the defendant had filed a 12(b)(2) motion which was never decided because the parties entered into a settlement agreement, which was "So Ordered" by the district court judge. The defendant allegedly defaulted on the agreement and reasserted the 12(b)(2) defense. The district judge granted the motion. As described in the Second Circuit's opinion, the district judge ruled on the issue of waiver that 12(b) permits a general appearance without waiver of a timely 12(b) defense, citing Orange Theatre Corp. v. Rayherstz Amusement Corp., 139 F.2d 871, 874 (3d Cir.), cert. denied, 322 U.S. 740, 64 S.Ct. 1057, 322 U.S. 740 (1944) ( ).2 490 F.2d at 716. Holding that the "So Ordered" contract established consent to the Court's power over the parties, the Court of Appeals reversed.3
This Court's issuance of an Order of Discontinuance in the instant case differs substantially from the district court's action in Tandy. Here, no settlement was ever reached. This Court did not put its stamp of approval on any agreement pursuant to which power could be asserted over defendants.
The Court's starting point in analyzing the issues of venue and personal jurisdiction in this action will be 28 U.S.C. § 1400(a), which states:
Civil actions, suits, or proceedings arising under any Act of Congress relating to copyrights may be instituted in the district in which the defendant resides or may be found.
Courts applying section 1400(a) have almost universally treated it as the copyright venue statute. See, e.g., Micromanipulator Co., Inc. v. Bough, 558 F.Supp. 36, 37 (D.Nev.1982) ( ); Airola v. King, 505 F.Supp. 30, 31 (D.Ariz.1980) ( ); Burns v. Rockwood Distributing Co., 481 F.Supp. 841, 845 at n. 1 (N.D.Ill. 1979) ( ); Donner v. Tams-Witmark Music Library, Inc., 480 F.Supp. 1229, 1234 (E.D.Pa.1979) ( ); Battle Creek Equipment Co. v. Roberts Mfg. Co., 460 F.Supp. 18, 21-22 (W.D. Mich.1978) ( ); Mode Art Jewelers Co. v. Expansion Jewelry Ltd., 409 F.Supp. 921, 922 (S.D.N.Y.1976) ( ); Geo-Physical Maps v. Toycraft Corp., 162 F.Supp. 141, 146 (S.D.N.Y.1958) ( ).
One court in this district, however, has stated that section 1400(a) governs both venue and personal jurisdiction in copyright actions. Boltons Trading Corp. v. Killian, 320 F.Supp. 1182, 1183 (S.D.N.Y. 1970). The question whether section 1400(a) is solely a venue statute or both a venue and personal jurisdiction provision is an important one. If it is solely a venue statute, a district court must look to the forum state's long-arm statute to test jurisdiction. See Fed.R.Civ.P. 4(e) and 4(f); Wood v. Santa Barbara Chamber of Commerce, Inc., 507 F.Supp. 1128, 1136-39 (D.Nev.1980), aff'd., 705 F.2d 1515 (9th Cir. 1983) ( ).4 If section 1400(a) is both, the Court would consider the personal jurisdiction question under a federal minimum contacts standard. While the difference would not matter in circumstances where the forum state's long-arm statute extends itself to the limits permitted by the Constitution, there are circumstances when that is not the case.
The language of section 1400(a), focusing on whether actions may be brought rather than where process may be served, indicates that section 1400(a) is solely a venue statute. Compare 28 U.S.C. § 1391 (the general federal civil venue statute, providing in 1391(a), for example, that a diversity action "may ... be brought ..." with 15 U.S.C. § 78aa ( ). Furthermore, Fed.R.Civ.P. 4(f) limits the power of a district court to serve process outside the state in which it sits unless it is authorized by a statute of the United States. Thus, without express authorization from Congress, this Court will treat section 1400(a) as a venue statute only.5
Following Rule 4(e), the Court turns to New York law to determine whether it can exercise jurisdiction over defendant. In New York, the question of personal jurisdiction over foreign corporations is governed by New York's long-arm statute, N.Y. CPLR § 302(a).6 See Backer v. Gonder Ceramic Arts, Inc., 90 F.Supp. 737 (S.D.N.Y.1950). Plaintiff has the burden of proving that this Court has jurisdiction over defendants. Birmingham Fire Ins. Co. v. KOA Fire & Marine Ins. Co., 572 F.Supp. 969, 971 (S.D.N.Y.1983). Plaintiff has alleged that defendants have committed tortious acts both inside and outside of New York which are sufficient to subject them to jurisdiction under CPLR § 302.7
Section 302(a)(2) provides jurisdiction over a defendant who committed a tort within the state. Plaintiff alleges that defendants, in order to get plaintiff's copyrighted materials, must have committed a tortious taking of the material in New York. Such a statement is merely a bald conclusion. Plaintiff has not substantiated this claim with any evidence, although plaintiff claims to have an investigative report bearing on the issue. In short, plaintiff has raised no inference at all that defendants committed a tortious act in New York.
Plaintiff has also failed to establish jurisdiction under section 302(a)(3), which provides jurisdiction over a defendant who commits a tort outside of this state causing injury within the state. Torts under Section 302(a)(3) include commercial torts. See, e.g., Sybron Corp. v. Wetzel, 46 N.Y.2d 197, 385 N.E.2d 1055, 413 N.Y.S.2d 127 (1978). Assuming that copyright infringement...
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