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CAVU RELEASING, LLC v. FRIES

August 11, 2005.

CAVU RELEASING, LLC, Plaintiff,
v.
CHARLES M. FRIES and FRIES FILM GROUP, INC., Defendants.



The opinion of the court was delivered by: RICHARD HOLWELL, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff CAVU Releasing, LLC ("CAVU") brought this action against Charles M. Fries and Fries Film Group, Inc. ("FFGI") (collectively "defendants"), asserting claims under the Copyright Act, Lanham Act and New York unfair competition law. Plaintiff alleges, inter alia, that defendants engaged in the unauthorized reproduction and public broadcast of its copyrighted film, "The Holy Land," in Los Angeles, California and at the Cannes Film Festival. Defendants have now moved to dismiss the complaint based on lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Alternatively, defendants seek to dismiss the action based on improper venue pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1400, or transfer the action to the Central District of California pursuant to 28 U.S.C. § 1404. For the reasons set forth below, the Court denies defendants' motion to dismiss or transfer in its entirety. BACKGROUND

The following allegations, set forth by the complaint, are liberally construed in the light most favorable to plaintiff and accepted as true for the purposes of defendants' motion to dismiss. The parties have also submitted affidavits in support of and in opposition to the motion.

  CAVU is a New York limited liability corporation, with its principal place of business in New York, which finances, develops, produces and distributes independent films. (Compl. ¶¶ 1-2.) FFGI is a California corporation, with its principal place of business in California, that engages in foreign distribution of films. (Id. ¶ 3.) Fries is an officer of FFGI. (Id. ¶ 4.)

  The complaint alleges that on or about March 1, 2004, CAVU was assigned the rights to the copyright for "The Holy Land" from Y2K Productions, Inc., which had earlier been assigned the copyright by the original owner, Eitan Gorlin. (Id. ¶ 7.) In July of 2003, CAVU premiered the domestic release of "The Holy Land" in New York. (Sergio Aff. ¶ 2.) According to plaintiff, Sidney Morse, who is Fries' father-in-law, allegedly attended the premiere and told Michael Sergio, the managing member of CAVU, that he was interested in acquiring the rights to "The Holy Land" on behalf of FFGI. (Id. ¶¶ 2-4.) Sergio and Morse allegedly entered into negotiations to see whether they "could make a deal for financing a broader distribution [of "The Holy Land"] than CAVU had originally planned." (Id. ¶ 3.) Plaintiff further alleges that Morse and Fries are partners and that Morse expressed his desire to do the deal through FFGI. (Id. ¶¶ 4, 7.) Defendants assert that neither Morse nor his short-term loan business, Red Cloud Films, LLC ("Red Cloud"), were ever authorized to act on behalf of Fries or FFGI. (Morse Aff. ¶¶ 2-3.) However, defendants admit that at the very least, Morse introduced plaintiff to defendants. (Id. ¶ 5; Fries Aff. ¶¶ 7, 8.) Moreover, Red Cloud's web site includes a reference to FFGI, which states:
Added Value: Fries Film Group. In an attempt to further your project, we offer entrée to the services of the Fries Film Group, located in San Fernando Valley. Their specialties are distribution and production. For more information, please call: 818-888-3052.
(Sergio Aff. ¶ 11.)

  Plaintiff alleges that between the summer of 2003 and the spring of 2004, Sergio and Morse met in New York City several times to discuss the film, its distribution and the deal involving FFGI. (Id. ¶ 5.) According to plaintiff, Morse was the "money person" who would front the cash advance underlying the deal. (Id. ¶ 9.) Based on these conversations as well as prior occasions in which he borrowed money from Morse, Sergio believed that Morse "was acting as defendants' agent." (Id.)

  At the same time, Sergio allegedly engaged in extensive negotiations with FFGI and Fries to work out "the practical details" in getting the documentation, film and audio tracks. (Id. ¶ 8; Compl. ¶ 8.) Plaintiff alleges that Sergio continued to communicate with Morse in New York during the spring of 2004 regarding the terms of the foreign distribution contract while negotiating with Fries regarding the technical items to be produced. (Sergio Aff. ¶ 13.) Sergio attested that "[d]uring the course of these negotiations we linked the issues of a cash advance and foreign distribution rights." (Id. ¶ 7.) Around the end of April of 2004, plaintiff sent the 35mm master print of the film from New York City to Martini Techno Trans in Cannes, France, in order to enable FFGI to arrange the screening of the film at the Cannes Film Festival in May of 2004. (Fries Aff. ¶ 9.) However, defendants assert that they never had possession of the master print, and that the film remains in the possession of Martini TechnoTrans. (Id. ¶¶ 9-10.)

  Plaintiff further alleges that sometime in early May 2004, Morse — and not Fries — told Sergio that "we had a `done deal.'" (Sergio Aff. ¶ 13.) It appears that no deal was in fact reached with respect to the distribution of the film. (Fries Aff. ¶ 16.) According to plaintiff, defendants made unauthorized copies of the film and displayed it in Los Angeles in the beginning of May, 2004, and at the Cannes Film Festival during May 11-23, 2004. (Compl. ¶¶ 10-11.)

  DISCUSSION

  I. Personal Jurisdiction

  A. 12(b)(2) Standard

  The plaintiff "bears the burden of establishing that the court has jurisdiction over the defendant when served with a Rule 12(b)(2) motion to dismiss." Whitaker v. American Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001) (internal citations omitted). Where the court holds an evidentiary hearing to resolve factual disputes, the plaintiff must establish jurisdiction by a preponderance of the evidence. However, where a court rules on a Rule 12(b)(2) motion based on pleadings and affidavits, the plaintiff is only required to make a prima facie showing of jurisdiction over the defendant. DiStefano v. Carozzi North America, Inc., 286 F.3d 81, 84 (2d Cir. 2001); Whitaker, 261 F.3d at 208. In the present case, the Court had scheduled an evidentiary hearing. However, both parties subsequently requested that the motion to dismiss be determined on the basis of the papers submitted to date. While eventually, personal jurisdiction "must be established either at an evidentiary hearing or at trial," allegations submitted solely through competing affidavits, as in the present case, 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 Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).

  B. Personal Jurisdiction Under New York Law

  In determining whether personal jurisdiction is appropriate, "the court must first look to the long-arm statute of the forum state, in this instance, New York." Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997) (internal citations omitted). In addition to satisfying the requirements of New York's jurisdictional statute — N.Y.C.P.L.R. § 302 ("Section 302") ...


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