United States District Court, S.D. New York
March 1, 2004.
CAPITOL RECORDS, INC., Plaintiff -against- KUANG DYI CO. OF RM, et al., Defendants
The opinion of the court was delivered by: LORETTA PRESKA, District Judge
Defendant, Major Trading, Inc., moves to dismiss plaintiff Capitol
Records, Inc.'s action for copyright infringement on the ground of
improper venue pursuant to F.R.C.P. 12(b)(3) and Section 1406 of Title 28
of the United States Code. Alternatively, defendant seeks to transfer
venue to the United States District Court for the Central District of
California pursuant to 28 U.S.C. § 1404. The plaintiff's claims arise
out of Major Trading's sales and distribution of "The Jazzman" Versions
1, 2 and 3 (the "Jazzman"), a mechanical doll which plaintiff alleges
utilizes an unauthorized copy of its copyrighted sound recording
"Surrender." Major Trading is a California corporation and does not
maintain a place of business in New York. Major Trading further claims
that its witnesses are located in California, along with files and other
materials germane to the case. Nonetheless, it appears undisputed that
Major Trading made sales of the doll to entities in New York that, in
turn, resold the allegedly infringing product in New York.
In an action for copyright infringement, venue is controlled by
28 U.S.C. § 1400(a), which states that an action may be brought "where
the defendant or his agent resides or may be found." Editorial
Musical Latino Americana. S.A. v. Mar Int'l. Records. Inc.,
829 F. Supp. 62, 66 (S.D.N.Y. 1993). "It is well-established that a defendant
`may be found' in any district in which he is amenable to personal
jurisdiction; thus, venue and jurisdiction are coextensive."
Id. at 66; Lipton v. The Nature Company, 781 F. Supp. 1032,
1035 (S.D.N.Y. 1992); Business Trends Analysts v. Freedonia
Group, Inc., 650 F. Supp. 1452, 1456 (S.D.N.Y. 1987). Accordingly,
venue is properly exercised by this Court under New York long-arm statute
CPLR 302(a)(2). Under this subsection, a court may exercise jurisdiction
"over any non-domiciliary . . . who in person or through an
agent . . . commits a tortious act within the state." N.Y.C.P. L.R.
302(a)(2). "Copyright infringement is a commercial tort that is deemed
to take place at the point of consumer purchase." Lipton,
781 F. Supp. at 1035 (internal quotations omitted); Dan-Dee Int'l., Ltd
v. KMart Corp., 2000 WL 1346865, at *4 (S.D.N.Y. Sept. 19.
2000)(mem.); Business Trends, 650 F. Supp.
at 1456. In the instant case, Major Trading is alleged to have
purposely made sales of an infringing product to entities in New York,
thus making it amenable to suit under 302(a)(2). See
Editorial, 829 F. Supp. at 64 (stating that offering even one copy
of an infringing work for sale in New York, even if there is no actual
sale, "constitutes commission of a tortious act within the state
sufficient to imbue the Court with personal jurisdiction over the
infringers"); see also Pecoware Co. v. Posh Int'l., Ltd., 2004
WL 210634, at *1 (S.D.N.Y. Feb. 4, 2004) (holding that the sale of even
"a small amount of allegedly infringing goods to one or more buyers in
New York" was sufficient to satisfy 302(a)).
Moreover, under certain circumstances a non-domiciliary who merely
supplies infringing goods to the party that ultimately passes them off in
New York may be subject to jurisdiction under 302(a)(2). Topps Co.
v. Gerrit J. Verburg Co., 961 F. Supp. 88, 91 (S.D.N.Y. 1997);
see Lipton, 781 F. Supp. at 1035-36 ("[e]ven if a
non-domiciliary defendant commits infringement through sales by
independent brokers or retail merchants in New York, this constitutes
tortious conduct within New York and subjects the defendant to
jurisdiction under CPLR 302"); Linzer v. EMI Blackwood Music,
Inc., 904 F. Supp. 207, 214 (S.D.N.Y. 1995). Specifically, the
supplier must sell the goods to the latter party with full knowledge that
the goods will or can be
reasonably expected to be sold in New York, where they will
infringe plaintiff's copyright. Topps, 961 F. Supp. at 91;
Dan-Dee, 2000 WL 1346865, at *4. Here, Major
Trading hardly disputes that it made sales to at least two New York
entities, or that it was unaware that the product it supplied and
distributed would eventually be resold in New York.*fn1 Further,
plaintiff's cause of action clearly arises from the defendant's attempts
to sell or distribute its products in New York, so the nexus requirement
of 302(a) that the cause of action arise from the acts of the
defendant that form the basis for personal jurisdiction is
Major Trading's argument that it does not reside in New York and that
the principal events in this dispute took place in California are
essentially irrelevant for purposes of determining the propriety of venue
under CPLR 302(a)(2). Major Trading's appeals to the constitutional
due process requirements of International Shoe are similarly
unavailing. New York courts are in accord that § 1400(a) "require
[s] no more contact than is required by a state's long arm statute."
650 F. Supp. at 1456; World Film Servs., Inc. v. RAI Radiotelevisione
Italiana S.p.A., 1999 WL 47206, at *7 (S.D.N.Y. Feb. 3, 1999)(mem.);
Editorial, 829 F. Supp. at 66. Having established statutory
jurisdiction, International Shoe and its progeny deal with a
separate constitutional due process issue: whether a defendant not
physically present within the forum state has certain minimum contacts of
sufficient quality and nature such that a statutory exercise of personal
jurisdiction does not offend traditional notions of fair play and
substantial justice. See Asahi Metal Indus. Co. v. Superior Court of
Cal., 480 U.S. 102 (1987). Put differently, the question becomes
whether the defendant's conduct and connections with New York are such
that it should reasonably anticipate being haled into court here.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297
The Court's exercise of personal jurisdiction in this case does not
offend due process. "Ordinarily . . . if jurisdiction is proper under the
CPLR, due process will be satisfied because CPLR § 302 does not
reach as far as the constitution permits." Topps,
961 F. Supp. at 90 (emphasis added); Banco Ambrosiano, S.p.A. v. Artoc
Bank & Trust, Ltd., 62 N.Y.2d 65, 7-1 (1984). Here, an
actual sale of the allegedly infringing product by Major Trading to an
entity in New York satisfies minimum contacts analysis and renders Major
Trading amenable to suit in this Court. Moreover, even assuming Major
Trading's activities were limited to
distribution, while mere knowledge that an item sold is destined
for New York will not support a finding of personal jurisdiction, "[t]he
forum state does not exceed its powers under the Due Process Clause if it
asserts personal jurisdiction over a corporation that delivers its
products into the stream of commerce with the expectation that they will
be purchased by consumers in the forum state."*fn2 World-Wide
Volkswagen, 444 U.S. at 297-98; Editorial, 829 F. Supp. at
65. Accordingly, Major Trading has not demonstrated that venue is
improper in this district.
"Motions for transfer lie within the broad discretion of the district
court and are determined upon notions of convenience and fairness on a
case-by-case basis." Hall v. South Orange, 89 F. Supp.2d 488,
493 (S.D.N.Y. 2000); In re Cuyahoga Equip. Corp., 980 F.2d 110,
117 (2d Cir. 1992). The party seeking a transfer of venue bears the
significant burden of making a clear and convincing showing that the case
should be transferred. Editorial, 829 F. Supp. at 66;
Lipton, 781 F. Supp. at 1036
("heavy burden" in a copyright infringement action);
Rolls-Royce Motors. Inc. v. Charles Schmitt & Co.,
657 F. Supp. 1040, 1060 (S.D.N.Y. 1987) ("clear cut showing"). The plaintiff's
choice of forum is accorded great weight and must be deferred to unless
the balance of conveniences strongly favors the defendant.
Editorial, 829 F. Supp. at 66; see Lipton,
781 F. Supp. at 1036 ("[U]nless the balance is strongly in favor of the
defendant, the plaintiff's choice of forum should rarely be disturbed").
Factors to be weighed by a court considering a motion to transfer include
the convenience of witnesses; the convenience of the parties; the locus
of the operative facts; the location of relevant documents and relative
ease of access to sources of proof; the availability of process to compel
the attendance of unwilling witnesses; the forum's familiarity with the
governing law; the relative financial means of the parties; calender
congestion and trial efficiency; and the interests of justice generally.
28 U.S.C. § 1404(a); Orb Factory, Ltd. v. Design Science Toys.
Ltd., 6 F. Supp.2d 203, 208 (S.D.N.Y. 1998). Plaintiff's choice of
forum is to be respected whenever a transfer would merely shift the
inconveniences from one party to another. Stinnes Interoil, Inc. v.
Apex Oil Co., 604 F. Supp. 978, 983 (S.D.N.Y. 1985).
Defendant has not met its burden of demonstrating a basis for transfer.
To begin, the convenience of party and non-party
witnesses is generally considered the most important factor in a
motion to transfer venue. See Frene NV v. Kmart Corp., 1998
U.S. Dist. LEXIS 11572, at *3 (S.D.N.Y. July 29, 1998). "In order to meet
its burden, the motion of the party seeking transfer must specifically
list the evidence and witnesses on which the party intends to rely in the
transferee district, along with a general statement of the topics of each
witness' testimony." Editorial, 829 F. Supp. at 66-67; see
Factors Etc., Inc. v. Pro Arts. Inc., 579 F.2d 215, 218 (2d Cir.
1978). Major Trading has not identified specific witnesses it intends to
call or any acute hardship peculiar to those witnesses, nor has it
specified their proposed testimony. Instead, Major Trading simply
asserts, without more, that most of its witnesses are located in
California. Such assertions are not sufficient to justify a transfer of
this action to the Central District of California. See Orb
Factory, 6 F. Supp.2d at 208-09 ("Vague generalizations and failure
to clearly specify the key witnesses to be called, along with a statement
concerning the nature of their testimony, are an insufficient basis upon
which to grant a change of venue.").*fn3
None of the remaining factors weighs heavily in Major Trading's favor
either. Because this is a simple copyright infringement action, the
courts of either forum are presumed to be equally familiar with the
governing law. IDT Worldwide, Inc. v. Supreme Int'l Corp., 1995
WL 702359, at *3 (S.D.N.Y. Nov. 28, 1995). Despite Major Trading's
contention that the events at issue took place exclusively in California
(i.e., defendant's residence, plaintiff's corporate home,*fn4 the
issuance of the copyright, and the situs of importation), the facts
demonstrate that New York also has a significant connection with this
dispute, albeit one slightly weaker than that of California.
Specifically, the allegedly infringing product was sold in the Southern
District of New York, and Capitol complains that this
infringement occurred as a result of Major Trading's decision to
contract with New York entities and distributers. See Toy Biz, Inc.
v. Centuri Corp., 990 F. Supp. 328, 331 (S.D.N.Y. 1998). Thus, New
York has a connection to the locus of operative events, and the "center
of gravity of the litigation" is not heavily tilted in favor of transfer.
Cf. Kiss My Face Corp. v. Bunting, 2003 WL 22244587, at *3
(S.D.N.Y. Sept. 30, 2003)(stating courts in the Southern District of New
York have held the locus of operative facts to be in the initially chosen
forum if acts of trademark infringement, dilution, or unfair competition
occur in that forum); Student Advantage, Inc. v. Int'l Student Exch.
Cards, Inc., 2000 U.S. Dist. LEXIS 13138, at *21 (S.D.N.Y. Sep. 13,
2000) (finding locus of operative facts to be in the Southern District of
New York where defendant sold business cards in New York via the internet
and through third party businesses, despite the fact that defendant was
an Arizona corporation with its principle place of business in Arizona).
Major Trading asserts in conclusory fashion that the documents relevant
to this case are located in California. However, this statement weighs
only slightly in Major Trading's favor because "[i]n today's era of
photocopying, fax machines and Federal Express, [defendant's] documents
easily could be sent to New York," and Major Trading does not contend
that the volume of evidence in question is so cumbersome as to make
reproduction and transfer of the documents
unduly burdensome. Coker v. Bank of America, 984 F. Supp. 757,
765 (S.D.N.Y. 1997). The relative means of the parties, calender
congestion, and trial efficiency do not weigh in favor of either New York
or California as the proper venue. Finally, Major Trading has not made an
adequate showing that transfer of this action to the Central District of
California is compelled by the interests of justice. Accordingly, Major
Trading has not carried its burden of demonstrating that plaintiff's
choice of forum should be overruled.
Major Trading's motions to dismiss or transfer (docket No. 42) are