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One Media IP Limited v. Henry Hadaway Organisation, Ltd.

United States District Court, M.D. Tennessee, Nashville Division

February 7, 2017

ONE MEDIA IP LIMITED, Plaintiff,
v.
HENRY HADAWAY ORGANISATION, LTD.; HHO Licensing Ltd.; and Henry Hadaway, Defendants.

          MEMORANDUM & ORDER

          ALETA A. TRAUGER United States District Judge.

         Pending before the court is a Motion to Grant Relief from Default Judgment Under Rule 60(b)(4) and Dismiss Under Rule 12(b)(2) (Docket No. 89) filed by the defendants, Henry Hadaway Organisation, Ltd., HHO Licensing, Ltd., and Henry Hadaway (collectively, the “Hadaway Defendants”), to which the plaintiff, One Media IP Limited (“One Media”), has filed a Response in opposition (Docket No. 97), and the Hadaway Defendants have filed a Reply (Docket No. 98). The court allowed the parties to conduct limited discovery as to the issue of personal jurisdiction before deciding the motion (Docket No. 99), and the parties have filed supplemental briefing on the pending motion following this limited discovery period (Docket Nos. 113, 114). For the reasons discussed herein, the motion will be granted.

         BACKGROUND AND PROCEDURAL HISTORY

         One Media initially filed this copyright action against S.A.A.R. SrL (“SAAR”) and Believe SAS (“Believe”) on April 8, 2014. (Docket No. 1.) The Amended Complaint was filed on July 30, 2014, naming the Hadaway Defendants for the first time. (Docket No. 15.) A more complete discussion of the allegations in the Amended Complaint can be found in the court's August 7, 2015 Memorandum dismissing the claims against SAAR and Believe for lack of jurisdiction, following limited jurisdictional discovery. (Docket No. 71 (the “SAAR/Believe Opinion”).) The SAAR/Believe Opinion also contains a discussion of the court's factual findings related to jurisdiction over SAAR and Believe. The court will not repeat herein all of the factual allegations, factual findings, or legal holdings contained in the SAAR/Believe Opinion, familiarity with which is presumed, but briefly recounts below the following facts that are pertinent to the currently pending motion.

         One Media and the Hadaway Defendants are all residents of England.[1] One Media's claims against the Hadaway Defendants arise from allegations that the Hadaway Defendants illegally issued licenses to SAAR for a number of recordings now owned by One Media (the “Recordings”) and that SAAR, in turn, distributed the Recordings through Believe and other third parties, allowing the Recordings to be downloaded throughout the world, including in Tennessee. The Amended Complaint alleges, and the court found the undisputed evidence to show, that, in 2006, the Hadaway Defendants entered into a representation agreement with Point Classics, LLC (“PC”), a now-defunct Tennessee limited liability corporation that was the owner of the Recordings at the time and is a predecessor-in-interest to One Media (the “2006 Rep. Agreement”).[2] The 2006 Rep. Agreement gave the Hadaway Defendants rights to the Recordings for a three-year period, without the right to issue sub-licenses. It is undisputed that the Hadaway Defendants executed the 2006 Rep. Agreement through dealings with Jim Long, who was a member of PC at the time and who resided in Malibu, California at an address registered as the principal office of PC.

         Finally, the Amended Complaint alleges, and the evidence shows, that the allegedly infringing use of the Recordings stems from a sublicensing agreement entered into between the Hadaway Defendants and SAAR in 2000, six years prior to the execution of the 2006 Rep. Agreement (a sublicense that One Media claims was illegally issued). The record shows that the Recordings were downloaded just nine times in Tennessee, a miniscule fraction of the global distribution of the Recordings. Further, in the SAAR/Believe Opinion, the court found that the Tennessee downloads were not the result of any particular targeting of Tennessee or even under the direct control of SAAR or Believe. Ultimately, the court found this nominal number of downloads insufficient to warrant specific personal jurisdiction over SAAR and Believe in Tennessee, based on Tennessee's stream of commerce plus standard laid out in Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 479-80 (6th Cir. 2003). The SAAR/Believe Opinion did not address the Hadaway Defendants, who are now the sole remaining defendants in this action, because the Hadaway Defendants had not moved for dismissal or otherwise responded to the litigation at that time. The court subsequently entered a default judgment against the Hadaway Defendants on September 17, 2015 (Docket No. 76) and a final Entry of Judgment was issued by the Clerk of Court on September 23, 2015 (Docket No. 77).

         In the currently pending motion, the Hadaway Defendants seek to vacate the default judgment against them on the grounds that the court lacks personal jurisdiction. On June 28, 2016, the court issued a Memorandum & Order related to this motion, allowing the parties to engage in limited jurisdictional discovery for 90 days and then file supplemental briefing before the motion would be decided. (Docket No. 99 (the “Discovery Opinion”).) A more complete discussion of the background and procedural history of this action up to that point in time can be found in the Discovery Opinion, familiarity with which is presumed, and will not be repeated herein. Briefly, the Discovery Opinion held, for reasons more fully discussed therein, that, if the court finds personal jurisdiction to be lacking upon review of the supplemental briefing following limited jurisdictional discovery, the court must grant the Hadaway Defendants' Motion, vacate the default judgment, and dismiss the case.

         During the limited discovery period, the court issued an Order denying a Motion to Compel by One Media. (Docket No. 112 (the “MTC Opinion”).) In that motion, One Media sought certain enumerated items from the Hadaway Defendants related to establishing the volume of sales in Tennessee or the United States, through third-party licensors or distributors, of recordings licensed by the Hadaway Defendants that are not the subject of this action. In the MTC Opinion, the court explained that evidence that recordings other than the Recordings were placed in the stream of commerce (regardless of the volume) cannot establish either specific or general personal jurisdiction because 1) specific jurisdiction in this action must arise from transactions involving the Recordings themselves and 2) general jurisdiction requires something far beyond a stream of commerce analysis. (Id. at ¶ 4.)

         On January 30, 2017, One Media filed its Supplemental Response in Opposition to the Defendant's Motion to Grant Relief from Default Judgment and Dismiss, following limited jurisdictional discovery as provided by the Discovery Opinion.[3] (Docket No. 113.) One Media has placed little new evidence in the record in support of its opposition. It has, however placed documents in the record that further confirm the facts referenced in the SAAR/Believe Opinion and discussed above. Namely, One Media has attached to its Supplemental Response the Declaration of Michael Infante, CEO of One Media, which references the nine Tennessee downloads of the Recordings that were discussed in the SAAR/Believe Opinion. (See Docket No. 113-1, ¶6.) One Media has also attached a letter indicating that SAAR believed it acquired sublicensing rights to the Recordings from the Hadaway Defendants in March of 2000 and that its exploitations of the Recordings were done in good faith reliance on that acquisition. (Docket No. 113-4.) One Meida has also attached PC's 2006 LLC Annual Report filed with the state of Tennessee. (Docket No. 113-2.) This report shows that PC was registered in Tennessee and had a Tennessee address on file, but it also shows only two members of PC at the time - Jim Long and Deborah DeBerry Long - who both had a single business address listed in Malibu, California. One Media further attached a 2009 email indicating that the Hadaway Defendants were in possession of a hard drive containing the Recordings and that, in 2009, when the 2006 Rep. Agreement was not renewed, the Hadaway Defendants were supposed to return this hard drive and also remove the Recordings from their website. (Docket No. 113-3.)

         Finally, the Infante Declaration also states that the Hadaway Defendants have distributed, through third parties, a large volume of audio and visual recordings worldwide, including throughout the United States and within the state of Tennessee, not including the Recordings. (See Docket No. 113-1. ¶¶ 4-5.) There is no indication, however, that Tennessee was in any way specifically targeted by these licensing or distribution agreements. With respect to the Recordings, One Media has provided no evidence to show that they were downloaded in Tennessee other than the nine times identified above. There is also no evidence in the record to suggest that the Hadaway Defendants have offices in Tennessee, own property in Tennessee, have bank accounts in Tennessee, have any agents, employees or representatives in Tennessee, or even that any agents, employees or representatives of the Hadaway Defendants have ever travelled to Tennessee to conduct business on behalf of the Hadaway Defendants.

         Also on January 30, 2017, the Hadaway Defendants filed their Supplemental Memorandum of Fact and Law in Support of Their Motion to Grant Relief from Default Judgment under Rule 60(b)(4) and Dismiss Under Rule 12(b)(2). (Docket No. 114.) The Hadaway Defendants attached to their Supplemental Memorandum a copy of the 2006 Rep. Agreement showing that 1) the 2006 Rep. Agreement lists only a Malibu, California address for PC, and 2) the 2006 Rep. Agreement provides that it is governed by English law and that all disputes arising from the 2006 Rep. Agreement should be resolved in English courts.

         ANALYSIS

         In keeping with the Discovery Opinion, now that jurisdictional discovery is complete and the parties have filed supplemental briefing, the court can render a final decision on the pending Motion to Grant Relief from Default Judgment. As stated above and explained in greater detail in the Discovery Opinion, a finding that the court lacks personal jurisdiction must necessarily result in the court's granting the pending motion to vacate the default judgment against the Hadaway Defendants and dismissing this action. Because the court finds that there is no basis for personal jurisdiction over the Hadaway Defendants, the pending motion will be granted.[4]

         In putting forth evidence about Tennessee downloads of recordings (other than the Recordings) that were placed into the stream of commerce by the Hadaway Defendants, [5] One Media appears to again conflate specific and general jurisdiction. As the court explained in the MTC Order, a stream of commerce analysis relates only to specific jurisdiction. General jurisdiction, to the contrary, requires a showing that the defendant is “essentially at home in the forum state.” Daimler AG v. Bauman, 134 S.Ct. 746, 751 (2014). As explained more fully in the SAAR/Believe Opinion, a stream of commerce plus analysis - as set forth in Bridgeport Music, Inc. - may be a means of establishing purposeful availment, which the Sixth Circuit has held is one of three required elements for establishing specific jurisdiction. See S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381-382 (6th Cir. 1968). Under Mohasco, the following three elements must be present for personal jurisdiction to be found: 1) “the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state;” 2) ...


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