AMA Multimedia LLC v. Sagan Limited

CourtDistrict Court, D. Arizona
DecidedJuly 27, 2020
Docket2:16-cv-01269
StatusUnknown

This text of AMA Multimedia LLC v. Sagan Limited (AMA Multimedia LLC v. Sagan Limited) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AMA Multimedia LLC v. Sagan Limited, (D. Ariz. 2020).

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 AMA Multimedia LLC, a Nevada limited No. CV-16-01269-PHX-DGC liability company, 10 Plaintiff, 11 ORDER v. 12 Sagan Limited, a Republic of Seychelles 13 company, Cyberweb Ltd., a Barbados company, and Netmedia Services Inc., a 14 Canadian company, individually and d/b/a Porn.com; GLP 5, Inc., a Michigan 15 company d/b/a Trafficforce.com; and David Koonar, an individual, 16

17 Defendants.

18 19 The Court has dismissed this case twice on the basis of a forum selection clause. 20 Docs. 126, 171. Both times, the Ninth Circuit has reversed the dismissal and remanded the 21 case. Docs. 147, 177. After all of this litigation, many of Defendants’ dismissal arguments 22 remain unaddressed. Docs. 154, 157, 161. This order will address those arguments on the 23 basis of the parties’ previous extensive briefing. Docs. 154, 157, 161, 179, 180.1 24 I. Background. 25 Plaintiff AMA Multimedia, LLC, a producer of pornographic material, asserts 26 copyright infringement claims against several entities and one individual associated with

27 1 The Court asked the parties to file their briefs from the most recent Ninth Circuit 28 appeal, which they did. See Doc. 182. In light of the extensive briefing previously completed in this case, however, the Court ultimately chose not to review the appeal briefs. 1 Porn.com. Doc. 16. Plaintiff alleges the following facts. Porn.com is a video streaming 2 website that generates revenue through paid memberships and advertising space. Id. 3 ¶¶ 48-49, 57. AMA alleges that Defendants Sagan Limited, Cyberweb Ltd., Netmedia 4 Services Inc., and David Koonar are owners or operators of Porn.com. Id. ¶¶ 2-8, 46.2 5 AMA distributes its pornographic material through DVD sales and various websites. 6 Id. ¶ 28. Users of AMA websites must pay to view the material. Id. ¶¶ 29-30. AMA 7 provides sample promotional videos to advertising affiliates and licenses certain material 8 to other pornographic websites. Id. ¶ 30. Beginning in 2007, pursuant to an AMA affiliate 9 program agreement, AMA provided certain promotional videos for Defendants to display 10 on Porn.com for the purpose of directing traffic to AMA’s paid membership sites. Id. ¶ 63; 11 see Doc. 157-1 at 19. 12 In November 2015, AMA learned that Porn.com had displayed 64 of AMA’s 13 copyrighted works, none of which was a promotional video provided by AMA under the 14 affiliate program agreement. Doc. 16 ¶¶ 63, 78; see Doc. 1-1 at 1-9. AMA asserts that the 15 works were uploaded to Porn.com by Defendants, not third-party users as Defendants 16 claim. Doc. 16 ¶¶ 78-92. AMA further asserts that in March 2016, other copyrighted 17 works were displayed on Trafficforce advertising banners on Porn.com. Id. ¶ 98; see 18 Doc. 1-1 at 31-34. Claiming that the works were displayed on Porn.com without its 19 approval or consent, AMA asserts various copyright infringement claims against all 20 Defendants. Doc. 16 ¶¶ 82, 105-58. 21 Defendants contend that they had the right to display the allegedly infringing 22 material based on a 2012 licensing agreement between AMA and one of Defendants’ 23 affiliates, GIM Corporation. This agreement – known as the Content Partner Revenue 24 Sharing Agreement (“CPRA”) – was entered into in September 2012 when AMA joined 25 GIM’s Paidperview.com revenue sharing program. Doc. 27-3 at 25-34. The CPRA 26 27 2 AMA also alleges that Defendants own and operate Defendant GLP 5, Inc., an advertising broker doing business as Trafficforce.com. Id. ¶¶ 7, 47, 94-95. The Court 28 previously dismissed the claims against GLP 5 for lack of personal jurisdiction. See Docs. 64 at 7-8, 126 at 2 n.1, 171 at 3 n. 1. 1 granted GIM a license to use content provided by AMA on websites whose advertisements 2 are controlled by Trafficforce.com. Id. at 25 (CPRA §§ B, 1.1). 3 Defendants moved to dismiss or stay this case based in part on the CPRA’s forum 4 selection clause, which provides that “[a]ny legal action arising out of or relating to 5 [the CPRA] must be instituted in a court located in Barbados[.]” Id. at 30 (CPRA § 10.5); 6 see Docs. 27-1 at 18, 42-1 at 18, 49-1 at 14-17, 70-1 at 11-17. The Court denied the stay 7 request and deferred ruling on the motions to dismiss pending jurisdictional discovery. 8 Doc. 64. Following the discovery and additional briefing, the Court granted Defendants’ 9 motions to dismiss on the basis of the forum selection clause. Doc. 126. The Court found 10 that the clause could be invoked by Koonar as an officer of GIM and by Cyberweb, 11 Netmedia, and Sagan because they are affiliates of GIM which were assigned rights under 12 the CPRA. Id. at 5-17. AMA appealed and the Ninth Circuit reversed, finding that the 13 record did not support an assignment of GIM’s rights under the CPRA. Doc. 147-1 at 4. 14 The case was remanded for further proceedings. Id. at 5. 15 At the Court’s direction, the parties filed lengthy supplemental briefs. Docs. 154, 16 157, 161. Defendants argued that they have standing to enforce the forum selection clause 17 as agents of GIM, third-party beneficiaries of the CPRA, implied licensees and assignees 18 of rights under the CPRA, and closely-related parties under Manetti-Farrow, Inc. v. Gucci 19 America, Inc., 858 F.2d 509 (9th Cir. 1988). Doc. 154 at 10-20. AMA asserted that these 20 arguments lack merit because Defendants’ infringing conduct and operation of Porn.com 21 have nothing to do with the CPRA or GIM. Doc. 157 at 9-21. 22 After considering the supplement briefs and relevant case law, the Court held that 23 Defendants have standing to enforce the CPRA’s forum selection clause because they are 24 closely related to the CPRA. Doc. 171. On appeal, the Ninth Circuit held that the Court 25 “correctly identified the legal rule: Defendants, as nonparties, could enforce the forum 26 selection clause if their alleged conduct was ‘closely related to the contractual relationship’ 27 between AMA and GIM Corporation.” Doc. 177-1 at 2 (citing Manetti-Farrow, 858 F.2d 28 at 514 n.5). But the Court of Appeals found that the Court erred by focusing on the 1 relationship between Defendants and the CPRA, rather than the alleged conduct of 2 Defendants. Id. 3 On remand, the Court asked the parties for their views on appropriate next steps. 4 Plaintiff argued that no evidentiary hearing is necessary and that the Court should rule on 5 the remaining issues without further briefing. Doc. 179 at 2-4. Defendants agreed that an 6 evidentiary hearing is not needed, suggested that the Court need not rule on personal 7 jurisdiction issues (a suggestion they had made before, see Doc. 153), and argued that 8 additional briefing should be permitted. Id. at 4-6. Because the forum selection clause 9 issues have been briefed extensively, the Court agreed with Plaintiff and will address the 10 remaining issues on the basis of the existing briefs. Docs. 154, 157, 161. 11 II. Legal Standard. 12 Although a motion to dismiss based on a forum selection clause was formerly 13 treated as an improper venue motion under Federal Rule of Civil Procedure 12(b)(3), 14 Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996), the Supreme Court has 15 made clear that “the appropriate way to enforce a forum-selection clause pointing to a state 16 or foreign forum is through the doctrine of forum non conveniens.” Atl. Marine Const. Co. 17 v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 60 (2013).

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