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Judge Declines to Dismiss 'Private v SunPorno' Copyright Suit

U.S. District Court Judge Mark W. Miller also allows limited jurisdictional discovery by Private Media's U.S.-based subsidiary, Fraserside IP

Judge Declines to Dismiss 'Private v SunPorno' Copyright Suit

CEDAR RAPIDS, Iowa—Beginning his order with a quote from World Brain, a collection of essays by H.G Wells, U.S. District Court Judge Mark W. Bennett ruled today in Fraserside IP v Letyagin—a copyright infringement lawsuit filed in August 2011 by the Iowa-based Private Media Group subsidiary against Sergej Letyagin, the alleged owner of Gibraltar-based tube site SunPorno.com—denying the defendant's motion to dismiss for lack of personal jurisdiction and ruling that Fraserside can proceed with "jurisdictional discovery."

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The issues before Bennett were procedural rather than substantive, but were no less difficult because of it. Indeed, the Wells quote from a 75-year-old published work was included to illustrate the fact that while the great visionary may have anticipated the internet, he could not possibly "foresee the legal challenges that the advent of the internet would present for courts considering personal jurisdiction and venue."

"Plaintiff," wrote Bennett, "a producer of adult motion pictures, alleges that defendants, an individual residing in Gibraltar and a corporation headquartered in the Republic of Seychelles, have willfully violated plaintiff’s copyright and trademarks by offering plaintiff’s motion pictures on an internet website they operate. However, the merits of plaintiff’s claims are not presently before me. Rather, I must resolve, inter alia, whether plaintiff has made a prima facie showing that defendants have sufficient minimum contacts with Iowa, or, alternatively, the United States, to satisfy due process and permit the exercise of personal jurisdiction over them."

The rest of the order is taken up with a detailed discussion of the requirements necessary for the court to claim jurisdiction over foreign defendants. "I 'may assume jurisdiction over a foreign defendant only to the extent permitted by the forum state’s long-arm statute and by the Due Process Clause of the Constitution," wrote Bennett, citing an Eighth Circuit Court of Appeals ruling.

"Iowa’s long-arm statute," he continued, "'expands Iowa’s jurisdictional reach to the widest due process parameters allowed by the United States Constitution.' As a result, the Court is left with the sole issue of whether exercising personal jurisdiction over [the] nonresident Defendant is consistent with principles of due process.”

In order for the court to invoke the Due Process Clause, "minimum contacts" between the "nonresident defendant" and the target state must be established. The Eighth Circuit one again provides a roadmap for establishing sufficient contacts, including that the defendant's "conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there," and that "maintenance of the suit does not offend traditional notions of fair play and substantial justice.”

The Eighth Circuit defined "reasonable anticipation" as "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.”

The appeals court set out “a five-part test for measuring minimum contacts:

(1) the nature and quality of the contacts with the forum state;

(2) the quantity of those contacts;

(3) the relation of the cause of action to the contacts;

(4) the interest of the forum state in providing a forum for its residents; and

(5) the convenience of the parties.”

The court also identified two types of jurisdiction, "specific" and "general," the former referring to "jurisdiction over causes of action arising from or related to a defendant’s actions within the forum state," and the latter to "the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.”

Fraserside, the court noted in its order, "does not contend that defendants’ contacts with Iowa are sufficient to establish general jurisdiction over them... Thus, I will confine my analysis to whether specific jurisdiction exists."

In that regard, Bennett stated, "Fraserside asserts that specific jurisdiction over defendants exists because they have directed tortious conduct at Iowa through the activities of the SunPorno website." In making that argument, Fraserside "relies upon the Calder effects test formulated by the United States Supreme Court in Calder v. Jones," which provides that “a defendant’s tortious acts can serve as a source of personal jurisdiction only where the plaintiff makes a prima facie showing that the defendant’s acts (1) were intentional, (2) were uniquely or expressly aimed at the forum state, and (3) caused harm, the brunt of which was suffered—and which the defendant knew was likely to be suffered—[in the forum state].”

The Eighth Circuit, "unlike the Ninth Circuit Court of Appeals, construes the Calder effects test narrowly," holding that, "absent additional contacts, mere effects in the forum state are insufficient to confer personal jurisdiction.”

After weighing all the evidence, declarations and testimony before him, Bennett concluded "that the exercise of specific personal jurisdiction over either defendant is inappropriate under the Iowa long-arm statute and fails to comport with due process. Accordingly, viewing the circumstances of this case as a whole, Fraserside has failed to make a prima facie case of personal jurisdiction over either Letyagin or SunPorno."

But that was under the state's long-arm statute. Fraserside had also argued that "personal jurisdiction exists under the federal long-arm statute found in Federal Rule of Civil Procedure 4(k)(2)... which permits a court to exercise jurisdiction over a foreign defendant that is not subject to the jurisdiction of the courts of general jurisdiction of any state, as long as the plaintiff’s claim arises under federal law and the exercise of personal jurisdiction would not offend due process."

Specifically, the order addes, "Rule 4(k)(2) permits a court to exercise personal jurisdiction over a defendant if: (1) the plaintiff’s claim arises under federal law; (2) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and (3) the exercise of jurisdiction comports with due process."

One by one, the judge ticked off the ways in which personal jurisdiction was allowable in this case under the federal statute. First, each of the six claims brought by Fraserside against SunPorno et al involve federal infractions—including direct, contributory and vicarious copyright infringement. Second, "Defendants argue that they are not subject to personal jurisdiction in any state. Given this argument, Rule 4(k)(2)’s second requirement is satisfied here." The third prong, that "the exercise of jurisdiction comport with due process," is where the federal application of personal jurisdiction differs profoundly with state law.

"The due process analysis under Rule 4(k)(2) is nearly identical to the traditional personal jurisdiction analysis, the only difference lies in that the forum under analysis shifts from Iowa to the United States as a whole," wrote Bennett.

Once the "forum" was shifted to the national stage, it was much easier for Fraserside to prove sufficient contact by the defendants by citing, among others, numbers pertaining to daily visitors to SunPorno.com from the U.S. (2,500,000), and the fact that SunPorno’s website is hosted in Ohio and "defendants have ongoing contractual relationships with United States residents."

Though seemingly on the cusp of ruling in Fraserside's favor under the federal long-arm statute, however, Bennett pivoted right on the third to last page of his ruling, deciding to punt on the federal statute by invoking a controversial and "uniquely American device" called "jurisdictional discovery," which, according to S.I. Strong, Associate Professor of Law at the University of Missouri School of Law, "combines two of the more internationally problematic aspects of United States civil procedure, namely an exceptionally broad view of extraterritorial jurisdiction and an expansive approach to pre-trial discovery."

Fraserside, wrote Bennett, had anticipated its use, arguing before the court that "even if it did not make a prima facie showing of personal jurisdiction, I should delay ruling on defendants’ motion and permit Fraserside limited jurisdictional discovery."

And that is exactly what he did, ruling, "Presumably conclusive information regarding Letyagin’s relationship to SunPorno and SunPorno’s contacts with the United States are available to Fraserside only through discovery... Because Fraserside has proffered facts that, if proven, would affect my exercise of jurisdiction over defendants, I grant Fraserside’s request for jurisdictional discovery. To avoid potential disputes over the scope of Fraserside’s discovery, I note that discovery under the Federal Rules of Civil Procedure is 'to be accorded a broad and liberal treatment.'

"Accordingly," he added, "Fraserside’s discovery may inquire into all areas that are reasonably likely to aid in resolution of the jurisdictional issue here. Such jurisdictional discovery must be completed on or before November 30, 2012." [Emphasis in original]

Judge Bennett's order is available here.






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