American Directory Service Agency v. Beam

131 F.R.D. 635, 1990 U.S. Dist. LEXIS 3486, 1990 WL 104018
CourtDistrict Court, District of Columbia
DecidedMarch 30, 1990
DocketCiv. A. No. 87-1653
StatusPublished
Cited by2 cases

This text of 131 F.R.D. 635 (American Directory Service Agency v. Beam) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Directory Service Agency v. Beam, 131 F.R.D. 635, 1990 U.S. Dist. LEXIS 3486, 1990 WL 104018 (D.D.C. 1990).

Opinion

[636]*636REPORT AND RECOMMENDATION

DEBORAH A. ROBINSON, United States Magistrate.

INTRODUCTION

This copyright infringement case was referred to the undersigned United States Magistrate for supervision of discovery, a pretrial conference, and for report and recommendation on dispositive motions. Currently pending for consideration by the undersigned are:

(1) the Motion to Dismiss filed on October 14, 1988 by individual counterclaim defendants R. Clay Kime (“Kime”) and Michael D. Tracy (“Tracy”);

(2) the Motion for Sanctions filed on August 31, 1989 by defendant and counter-claimant Amy L. Beam Ed.D. (“Beam”); and

(3) the Cross-Motion for Sanctions filed by counterclaim defendants Kime and Tracy on September 13, 1989.

Upon consideration of the motions, the oppositions, the supplemental briefs filed by the parties, the transcripts of the depositions of Tracy and Kime taken in August, 1989 and the entire record herein, and for the reasons set forth below, it is recommended that the Motion to Dismiss be denied; that Beam’s Motion for Sanctions be granted; and that the Cross-Motion for Sanctions filed by counterclaim defendants Kime and Tracy be denied.

BACKGROUND

The facts giving rise to this litigation were set forth at length by the Court (Pratt, J.) in its Order granting, inter alia, Beam’s motion to add counterclaim defendants, filed March 28, 1988 (the “March 28 Order”). Thus, they will be abbreviated here. Plaintiff American Directory Service Agency, Inc. (“ADS”) is in the business of selling advertising space in the “yellow pages” of telephone directories. Defendant Beam is a computer programmer and consultant, who holds a doctorate in education. In 1984, ADS and Beam entered into a consulting agreement whereby Beam agreed to develop a software program compatible with computer equipment used by ADS. The consulting agreement specified that the copyright of the software program would be applied for in the names of Beam and the president of ADS, John Stimac.

During 1985, Beam developed the software, along with an accompanying user’s manual. In 1986, she entered into a joint marketing agreement with Datacomp Corporation to sell the software programs. Sales totalled more than $70,000 in the first year. Thereafter, in April, 1987, Beam applied for, and received, copyright registration of the software in her own name. Two months later, ADS claimed that it had se[637]*637cured a copyright for the software. In June, 1987, ADS filed the instant action against Beam for monetary, injunctive, and declaratory relief for her alleged breach of the consulting agreement.1

On March 25,1988, Beam filed a counterclaim against ADS and the following counterclaim defendants:

(1) John Stimac, the president of ADS;

(2) Datacomp Corporation, with whom Beam entered into the joint marketing agreement;

(3) R. Clay Kime, the president and controlling shareholder of Datacomp corporation; 2

(4) The National Yellow Pages Information Services Company, a subsidiary of Datacomp (“National Yellow Pages”); and

(5) Michael D. Tracy, the vice-president of Datacomp.3

Beam is a citizen of the District of Columbia.4 Datacomp is a Virginia corporation.5 Counterclaim defendants Kime and Tracy are residents of the Commonwealth of Virginia.6 Each avers that he has not “personally done business in the District of Columbia.”7

In her counterclaim, Beam makes the following allegations. In November, 1985, before the software program was completed, the president of ADS, John Stimac, terminated the consulting agreement between Beam and ADS. Therefore, Beam completed and revised the software at her own expense, and registered her “copyrighted” computer software programs in April, 1987. Thereafter, she entered into a joint marketing agreement with Datacomp, by which she granted Datacomp a license to use the software programs and the user’s manual. During the first year, sales of the software totalled approximately $70,000.

In 1986, unbeknownst to Beam, Data-comp and ADS entered into an agreement by which ADS purported to license Data-comp to sell the software, and Datacomp agreed to pay ADS a designated payment for each sale. Datacomp created the National Yellow Pages to market the software.8

Beam seeks monetary and injunctive relief from the counterclaim defendants for Copyright Infringement (Counterclaim, Count I); Breach of Contract by Datacomp (Counterclaim, Count II); Interference with Contract (Counterclaim, Count III); and Unfair Competition (Counterclaim, Count IV).

PROCEDURAL POSTURE

On June 3, 1988, counterclaim defendants Datacomp, National Yellow Pages, Kime and Tracy filed a motion to dismiss the counterclaim on the grounds that this court lacks personal jurisdiction over them. Upon consideration of the motion, the Court found that it could not address the issue of jurisdiction until additional facts were developed during discovery. Accordingly, the motion to dismiss was denied, without prejudice to renew it after further discovery was completed. June 20, 1988 Order of the Court at 2-3.

On October 14, 1988, the individual counterclaim defendants Kime and Tracy (hereinafter “counterclaim defendants”) brought a second Motion to Dismiss the counterclaim. That motion became ripe in or about October, 1989, and is currently pending for resolution. At issue is whether the counterclaim defendants had sufficient minimum contacts with the District of Columbia so that this court’s exercise of juris[638]*638diction over them pursuant to the applicable “long-arm” statute does not violate the notion of fundamental fairness. Counterclaim defendants do not contest that they had numerous contacts with the instant forum on behalf of their employer, Data-comp Corporation. However, they claim that they had no contacts within the District of Columbia in their individual capacities. For that reason, they maintain that pursuant to the “corporate shield” doctrine, the court cannot exercise jurisdiction over the individuals, whose only contacts with this forum were on behalf of their employer. Memorandum in Support of Motion to Dismiss at 3-4.

On November 4, 1988, Beam filed her Opposition to the Motion to Dismiss. In support thereof, she submitted the transcript of the deposition of a former vice-president of Datacomp, Richard Suslick, taken on October 24, 1988 (“Suslick deposition”), who testified that the District of Columbia was “one of the major areas of focus of Datacomp’s sales,”9 and that both Kime and Tracy made sales calls in the District of Columbia.10

On February 7, 1989, in accordance with certain rulings made after a discovery status conference, the undersigned ordered that Beam would be allowed to take the depositions of Kime and Tracy for the purpose of eliciting additional facts concerning their contacts within this forum. The scope of the depositions was limited to “the activities of individual counter-defendants Kime and Tracy relevant to the Court’s exercise of personal jurisdiction over them.” February 7, 1989 Order of the undersigned at 2.

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Bluebook (online)
131 F.R.D. 635, 1990 U.S. Dist. LEXIS 3486, 1990 WL 104018, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-directory-service-agency-v-beam-dcd-1990.