Magistrate Judge Finds Personal Jurisdiction over non-U.S. Defendant based on Sales to, and Interactions with, a New York Authorized Dealer

The World in U.S. Courts: Spring 2017 - Personal Jurisdiction/Forum Non Conveniens

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Joint Stock Co. Channel One Russia Worldwide v. Infomir LLC, U.S. District Court for the Southern District of New York, March 2, 2017

Plaintiffs are a group of Russian television broadcasters that produce and distribute Russian-language television programming in the Russian Federation and worldwide. Plaintiffs sued Panorama Alliance LP (Panorama), a British limited partnership, among others, alleging “pirating” and unauthorized resale of Plaintiffs’ programming, as well as ancillary copyright and trademark violations. Plaintiffs claimed that Panorama unlawfully distributed programming to consumers in New York and throughout the U.S. through its website. Panorama moved to dismiss on personal jurisdiction grounds.

The Magistrate Judge in New York observed that resolution of the jurisdictional dispute requires that two questions be answered: (i) whether there is a statutory basis for exercising specific personal jurisdiction over Panorama under the laws of New York (the forum state) and, if so, (ii) whether the assertion of jurisdiction is consistent with the Due Process Clause of the US Constitution.

As to the first question, the Magistrate concluded that personal jurisdiction over Panorama exists because it purposefully transacted business in New York through its transactions with Asaf Yevdayev, one of its authorized dealers in New York, and the plaintiffs’ claims arose from those activities. In finding that the “purposeful business transaction” element had been met, the Magistrate reasoned that “Panorama sold multiple IPTV subscriptions to Yevdayev, through a special dealer link [on its website], knowing they would be resold locally, thus enabling it to transmit its programming to Yevdayev’s customers in New York.” Additionally, “Panorama assisted Yevdayev in making those resales by . . . listing him as an authorized dealer on its website, providing his Brooklyn address and local telephone number to consumers, authorizing him to use a email address, and providing him with technical support.” The Magistrate noted that that the sales to Yevdayev constituted “purposeful contacts within New York,” irrespective of whether Yevdayev is viewed as “a ‘dealer,’ a ‘reseller,’ or simply a large-volume purchaser with special website privileges.” Then, the Magistrate concluded that the “arising from” prong is satisfied because Plaintiffs’ claims arose from “Panorama’s unauthorized transmission of plaintiffs’ programming through the same IPTV service that it sold to Yevdayev in New York, and that he resold to consumers [in New York] and elsewhere.”

Before considering whether exercising personal jurisdiction comported with due process, the Magistrate noted that alternative statutory bases for personal jurisdiction may exist. He explained that personal jurisdiction over Panorama would also be appropriate with respect to the plaintiffs’ copyright and trademark claims because Panorama committed tortious acts within New York by streaming “subscription IPTV service into the homes of customers in New York (and elsewhere), and with that service comes plaintiffs’ Programming and plaintiffs’ trademarks.” The Magistrate, however, rejected as a basis for jurisdiction Plaintiffs’ argument that Panorama’s tortious conduct outside of New York caused injury in New York, explaining that the plaintiffs failed to allege any facts showing injury in New York, such as “a loss of business within New York as the result of Panorama’s activities.”

As to the second part of the analysis, the Magistrate observed that “due process requires a plaintiff to show (1) that a defendant has ‘certain minimum contacts’ with the relevant forum, and (2) that the exercise of jurisdiction is reasonable in the circumstances.”  He concluded that the “minimal contacts” prong was satisfied largely for the same reasons he found that Panorama transacted business in New York. He also found that the case did not present an “exceptional situation” where the exercise of jurisdiction would be unreasonable. Even though New York had a “limited interest” in the dispute and Panorama would include incur some financial burden litigating there, the Magistrate concluded that proceeding in New York would be most efficient and would avoid duplicative actions since some of the defendants were incorporated or headquartered in New York.

Having found that exercise of jurisdiction under New York’s long-arm statute was appropriate and that the requirements of due process were satisfied, the Magistrate recommended that Panorama’s motion to dismiss be denied.

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