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Richtone Design Group, LLC v. Live Art, Inc.

United States District Court, Second Circuit

November 4, 2013

RICHTONE DESIGN GROUP, LLC, Plaintiff,
v.
LIVE ART, INC., d/b/a LIVE ART STUDIO, d/b/a LIVE ART PILATES, SIRI GALLIANO, Defendants.

Andrew L. Spence, for Plaintiff RICHTONE DESIGN GROUP, LLC.

Michael F. Sarney, KATTEN MUCHIN ROSENMAN LLP, for Defendants LIVE ART, INC. AND SIRI GALLIANO.

OPINION & ORDER

JOHN F. KEENAN, District Judge.

Before the Court is Defendants' Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. For the reasons that follow, the motion is granted and the case is dismissed with prejudice.

I. Background

Plaintiff Richtone Design Group LLC is a New York LLC that licenses certification programs for exercise instructors using the "pilates" technique. Defendant Live Art, Inc., which does business as Live Art Studio and Live Art Pilates ("Live Art") is a California corporation. The owner of Live Art, pilates instructor and California resident Siri Galliano, is also named as a Defendant in this action.

Plaintiff holds the rights to the Pilates Teacher Training Manual (the "Manual"), first compiled in 1993 by Pilates, Inc. and subsequently assigned to Plaintiff. The Manual and its earlier versions allegedly contain photographs that have separately been copyrighted. The Manual is used in connection with training fitness instructors in the Pilates exercise technique. Plaintiff alleges that it learned in October 2011 that Defendants have been selling the Manual, as well as some pictures Plaintiff claims a copyright interest in, for profit without permission. Plaintiff claims that it is owed royalties on Defendants' sales. Plaintiff seeks damages, injunctive relief, attorney's fees, and costs.

Defendant Galliano copied the Court on a December 17, 2012 letter she wrote to Plaintiff's counsel, which Plaintiff has also filed as Exhibit G to its opposition papers. In the letter, Galliano stated that she has a photocopy of pilates instructions that was given to her by another instructor, and that she has made approximately 20 copies. She represented that "[t]here is no author named or copyright information on the xerox, " and that "[i]t was never my intention to injure anyone and I'm happy to give Richtone my profit of $175." She further advised Plaintiff that she "has been on disability after four surgeries." See also Galliano Supp. Dec. ¶ 5.

Galliano next filed a pro se brief urging the Court to dismiss the case for lack of personal jurisdiction and failure to state a claim. Plaintiff then amended its complaint to add that "Live Art and unknown defendants sold The Manual'... within the District without Plaintiff's permission or authorization." (Amended Compl. ¶ 6.) The amended complaint does not go into further detail about Defendants' activity in New York. Plaintiff also submitted a memorandum opposing Galliano's motion to dismiss.

Soon thereafter, Galliano secured pro bono counsel for both herself and her corporation. At a conference on March 20, 2013, counsel for both parties agreed to withdraw their briefing on the then-pending motion to dismiss. Counsel have now fully briefed a new motion to dismiss, which is premised solely on Rule 12(b)(2), lack of personal jurisdiction.

Defendants assert that personal jurisdiction in the Southern District of New York is improper. First, Galliano argues that there is no basis for jurisdiction over her because she is a California resident and because her allegedly infringing acts were undertaken as an employee of Live Art. Live Art argues that only one of the allegedly infringing sales was made in New York, which is insufficient to subject it to long arm jurisdiction. Defendants also claim that Plaintiff engineered the single sale in New York by inducing a Bronx woman to place an order for the Manual.

At oral argument on this motion, Plaintiff's counsel conceded that he orchestrated the single sale. Nevertheless, he argued that other facts demonstrate Defendants' New York contacts. Plaintiff's brief sets forth the facts that (1) Galliano advertises herself as a teacher of the "New York Pilates" method; (2) Galliano sells pilates equipment manufactured by Gratz, a New York LLC; (3) Defendants have placed "at least eleven" copies of the Manual into interstate commerce; (4) Galliano has sold pilates photos and DVDs to ten New York customers since 2010; and (5) Galliano maintains an internet newsletter, which likely reaches some New York residents. (Pl. Opp. at 6-9.)

II. Discussion

A. 12(b)(2) Legal Standard

A Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction is "inherently a matter requiring the resolution of factual issues outside of the pleadings and all pertinent documentation submitted by the parties may be considered in deciding this motion." John Hancock Prop. & Cas. Ins. Co. v. Universale Reinsurance Co., No. 91 Civ. 3644 , 1992 WL 26765, at *6 n.1 (S.D.N.Y. Feb. 5, 1992). Moreover, a court has "considerable procedural leeway" in ruling on the motion. Marine Midland Bank, N.A. v. Miller , 664 F.2d 899, 904 (2d Cir. 1981). "It may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion." Id . The court's decision in that regard affects the plaintiff's burden of establishing jurisdiction over the defendant. "Prior to discovery, a Rule 12(b)(2) motion will fail where plaintiff has pled in good faith legally sufficient allegations of jurisdiction." Buccellati Holding Italia SPA v. Laura Buccellati, LLC, 935 F.Supp.2d 615, 620 (S.D.N.Y. 2013) (citing Ball v. Metallurgie Hoboken-Overpelt , 902 F.2d 194, 197 (2d Cir. 1990)) (internal quotation marks and alterations omitted).

In the instant case, the parties have not requested an evidentiary hearing, and discovery has not yet taken place. Accordingly, this Court "assumes the truth of the plaintiff's factual allegations for purposes of the motion and challenges their sufficiency." Ball , 902 F.2d at 197; see also Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A. , 722 F.3d 81, 84-85 (2d Cir. 2013). However, the Court need not "draw argumentative inferences' in the plaintiff's favor, " nor "accept as true a legal conclusion couched as a factual allegation." Licci ex rel. Licci v. Lebanese Canadian Bank, SAL , 673 F.3d 50, 59 (2d Cir. 2012) (citations omitted).

To decide whether it has personal jurisdiction over Defendants, this Court must look to New York law. See, e.g., Spiegel v. Schulmann , 604 F.3d 72, 76 (2d Cir. 2010) ("A district court's personal jurisdiction is determined by the law of the state in which the court is located.") Plaintiff does not claim general personal jurisdiction under section 301 of the New York Civil Practice Law and Rules ("CPLR"), but instead asserts long-arm jurisdiction under CPLR § 302(a)(1) and (a)(3).

Section 302 is a "single-act statute, " which means that one transaction may suffice to confer jurisdiction. Grand River Enters. Six Nations, Ltd. v. Pryor , 425 F.3d 158, 166 (2d Cir. 2005). But that transaction must have been purposefully entered into, and there must be a "substantial nexus" between the transacted business and the cause of action. Id . (citing Hoffritz for Cutlery, Inc. v. Amajac, Ltd. , 763 F.2d 55, 59-60 (2d Cir. 1985); Parke-Bernet Galleries, Inc. v. Franklyn , 26 N.Y.2d 13, 17 (1970)).

The purposeful requirement means that "random, fortuitous, or attenuated contacts, " or "the unilateral activity of another party, " will not be enough to confer jurisdiction. Burger King Corp. v. Rudzewicz , 471 U.S. 462, 475 (1985) (citations and internal quotation marks omitted). Rather, the defendant must have availed itself "of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." McKee Elec. Co. v. Rauland-Borg Corp. , 20 N.Y.2d 377, 382 (1967). The nexus requirement, meanwhile, directs courts to determine whether there is a substantial relationship between a plaintiff's claim and a defendant's New York contacts. See Pearson Educ., Inc. v. Shi , 525 F.Supp.2d 551, 555 (S.D.N.Y. 2007); see also Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC , 450 F.3d 100, 104 (2d Cir. 2006) (indicating that the nexus requirement tends to be satisfied unless "the event giving rise to the plaintiff's injury had, at best, a tangential relationship to any contacts the ...


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