District Court Allows Claims of Infringement of Non-U.S. Copyright Laws by Non-U.S. Parties

The World in U.S. Courts: Summer 2015 - Personal Jurisdiction/Forum Non Conveniens | April.22.2015

Levitin v. Sony Music Entertainment, U.S. District Court for the Southern District of New York, April 22, 2015

This copyright infringement claim was brought by the composers of a 1978 song "San Francisco Bay" against U.S. and non-U.S. entities that have distributed internationally the hit song, "Timber," co-written in 2013 by Pitbull, Kesha, and Lukasz Gottwald. They, and the publisher "Far Out Music" ("FOM"), co-own the copyright. FOM, but not the other copyright owners, licensed the copyright to the defendants for worldwide use.

The District Court in New York first determined that the complaint only stated a claim against the non-U.S. affiliates of defendant Sony Music Entertainment ("SME"), a U.S. company, under the copyright laws of nine different countries. It then turned the question whether personal jurisdiction could be asserted over those defendants.

The plaintiffs first argued that SME was an "agent" of the non-U.S. defendants, and that the non-U.S. entities should be deemed to be doing business in the U.S. themselves through SME and thus be subject to the court's general personal jurisdiction. The District Court disagreed, stating that the "agency" theory of general personal jurisdiction was "of dubious validity" following the U.S. Supreme Court's landmark 2014 decision in the Daimler case. Regardless, the court found that facts supporting such a relationship had not been alleged.

The Court did, however, find that specific personal jurisdiction existed. First, it held that the complaint alleged facts sufficient to trigger the New York requirement for specific jurisdiction that a defendant have "transact[ed] business" in the State, and that the claims arose out of that contact. In so holding the Court noted that the non-U.S. defendants "obtained the recording of 'Timber' from New York, agreed to the further distribution of the recording in New York, and executed contracts for the foreign exploitation of 'Timber' in New York."

The District Court also found that asserting jurisdiction over the non-U.S. defendants was consistent with federal Due Process requirements. The actions cited above as establishing the transaction of business in New York were also found to establish that the non-U.S. defendants had "purposely availed" themselves of the benefits and protection of New York law, and that it was "foreseeable" that they could be held accountable for the implications of their actions in a New York Court. The catch-all Due Process requirement that the assertion of jurisdiction be "reasonable" was assessed by the Court based on the factors of "the burden on the defendant, the interests of the forum state, the plaintiff's interest in obtaining relief, the judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies." The District Court found these factors to have been satisfied, notably adding to the list of courts increasingly unwilling to give credence to claims of undue burden of litigating in a U.S. forum. It called the non-U.S. defendants' citation of costs attendant to translation and foreign law expertise and non-U.S. witnesses "an exaggeration," and added "in any event, such inconvenience as may exist constitutes the cost of affiliating with a company that does business on a global scale."

Finally, the District Court declined to dismiss the action on grounds of forum non conveniens, reviewing the factors required to be considered in assessing whether maintaining the case in New York was too "inconvenient" to be permitted. The Court first concluded that the plaintiffs were entitled to considerable deference in their choice of forum, as they are U.S. citizens, and their choice of a New York forum seemed no less inconvenient than any other forum and did not appear to represent a tactical example of "forum shopping." The Court next found that the nine countries in which the non-U.S. defendants were based were adequate "alternative" fora for litigation, and so this factor did not itself counsel that the case be retained. Finally, the Court weighed the "private and public" interests at stake. It concluded that the public interests weighed "slightly" in favor of dismissal, principally because of the limited interest New York has in the resolution of a dispute involving foreign copyright infringement, and the need to apply the laws of other countries. The private interests, however, weighed "heavily" in favor of retaining the case, principally because dismissal would replace one case with moderately inconvenient circumstances with the possibility of nine cases outside the U.S. with moderately inconvenient circumstances. "The consequences of dismissal for Plaintiffs would be the likely inability to pursue their claims, in light of the insuperable obstacles that three individuals litigating in nine different countries against sophisticated entities would face."

[Editor's note: The Levitin case is also discussed in the Intellectual Property-Copyright section of this issue.]

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