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Global Force Entertainment, Inc. v. Anthem Sports & Entertainment Corp.

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

June 24, 2019

GLOBAL FORCE ENTERTAINMENT, INC. and JEFFREY JARRETT, Plaintiff,
v.
ANTHEM SPORTS & ENTERTAINMENT CORP. and ANTHEM WRESTLING EXHIBITIONS, LLC, Defendants.

          MEMORANDUM OPINION

          WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE

         This lawsuit arose as a result of a failed merger between wrestling entities. In one corner are Global Force Entertainment, Inc. (“GFE”) and Jeffrey Jarrett, who bring a number of federal and state law claims. In the other, are Anthem Sports & Entertainment, Corp. (“Anthem Sports”) and Anthem Wrestling Exhibitions, LLC (“Anthem Wrestling”), who have filed a Motion to Dismiss (Doc. No. 61) the majority of those claims. Anthem Sports has also filed a Motion to Dismiss for Lack of Personal Jurisdiction (Doc. No. 58). Both Motions have been fully briefed by the parties (Doc. Nos. 59, 62, 70, 74, 75), and will be considered after a brief recitation of the relevant facts as they are alleged in the Second Amended Complaint (“SAC”) (Doc. No. 54).

         I. Factual Background

         Jarrett, a seventeen-time world wrestling champion, and World Wrestling Entertainment hall-of-famer, is a Tennessee resident. (SAC ¶ ¶ 15, 16). In 2014, he formed GFE for the purpose of promoting wrestling events and creating original wrestling programming for pay-per-view and television markets. (Id. ¶ 17). GFE is the owner of the “Global Force Wrestling” (“GFW”) brand, and owns trademarks and associated registrations for use in connection with “(1) posters and photographs; (2) insulated containers for beverage cans for domestic use; (3) clothing, including, but not limited to, t-shirts, bandanas and hats; (4) streaming of audio and video material on the Internet; and (5) entertainment services, including, but not limited to, wrestling exhibitions and performances by professional wrestlers and entertainers.” (Id. ¶¶ 19, 20). GFE also uses a logo with a distinctive green color for GFW on its website and in interstate commerce. (Id. ¶ 21).

         On July 24, August 21, and October 23, 2015, in Las Vegas, Nevada, GFE produced sixteen (16) hours of original wrestling programming to market to television and pay-per-view markets. The collective content was called “GFW Amped” and featured completely original content developed and owned solely by GFE, including appearances by Jarrett. (Id. ¶¶ 22, 23, 29). Plaintiffs believe each one-hour segment is worth $300, 000 or more, and applications (with the requisite fees) were filed for federal copyright registration for each of them. (Doc. No. 25, 26, 30).

         Anthem Sports was formed in 2010 when Leonard Asper acquired a majority stake in the Fight Network. Fight Network is an English language television channel that broadcasts programming related to mixed martial arts, boxing, kickboxing and professional wrestling throughout the world. It is available digitally through streaming services such as Apple TV, Roku, computers, and tablets. (Id. ¶¶ 32-35).

         In October 2016, Anthem Sports approached Plaintiff about merging with GFE in exchange for membership and equity shares in Anthem Sports. The discussions also concerned hiring Jarrett as Chief Creative Officer for the wrestling portion of Anthem Sports. In conjunction with the merger and employment discussions, GFE and Anthem Sports entered into a Mutual Non-Disclosure Agreement (“NDA”) on December 9, 2016. (Doc. No. 17). Several months later, on December 23, 2016, Anthem Sports formed Anthem Wrestling. (Doc. No. 54, SAC ¶ 37).

         In January 2017, Anthem Wrestling retained Jarrett as a consultant. (Id. ¶ 41). Around this same time, Jarrett provided Defendants with the only set of masters for the sixteen, one-hour episodes of GFW Amped. (Id. ¶ 42). Several months later, in May 2017, Jarett and Anthem Wrestling executed a term sheet in relation to both Jarrett's employment as Chief Creative Officer of Anthem Wrestling and the merger. Among other things, the term sheet made clear that GFE owned all of the GFW Amped content.

         In anticipation of a “Slammiversary” pay-per-view event in June 2017, Anthem Wrestling issued a press release announcing the acquisition of GFE, and indicating that Jarrett would be joining Anthem Wrestling as an equity owner and member of its board of managers. (Id. ¶ 46). However, Anthem and GFE never completed the merger contemplated by the term sheet, and Jarett's employment with Anthem Wrestling was terminated in October 2017. (Id. ¶¶ 47, 51).

         Despite the failed merger, “Defendants reproduced, distributed, publicly displayed, offered for sale, and sold the GFW Amped content without providing any compensation or royalties to GFE or Mr. Jarrett.” (Id. ¶ 52). This began with Defendants promoting the GFW Amped content as a four-part pay-per-view program on July 19, 2017, and continued with the airing of that content on the Fight Network website. Thereafter, Defendants aired “GFW Amped Anthology” in four parts between August and December 2017 as part of their “One Night Only Series.” Anthem Wrestling continues to sell DVD copies of the GFW Amped content on its website, and through other online retail outlets. (Id. ¶¶ 56-59, 60). Additionally, Defendants launched a new subscription streaming service known as Global Wrestling Network (“GWN”) that features archived content from other predecessor wrestling entities run by Jarrett. GWN also uses a similar logo with “a green color identical or nearly identical to the green color in GFE's logo.” (Id. ¶¶ 61-68).

         At some point, Defendants destroyed the only masters of the GFW Amped series that Jarrett had provided to them. This meant that Plaintiffs could not complete the trademark registration process. (Id. ¶¶ 27, 72).

         Based upon the foregoing events, Plaintiffs sue Defendants for (1) copyright infringement under the Copyright Act; (2) violations of the Tennessee Personal Rights Protection Act; (3) trademark infringement, unfair competition, and false designation of origin under the Lanham Act; (4) unfair competition under Tennessee law; (5) violations of the Tennessee Consumer Protection Act; and (6) tortious interference under Tennessee law.

         II. Motion to Dismiss for Lack of Personal Jurisdiction by Anthem Sports

          “The Due Process Clause of the Fourteenth Amendment constrains a State's authority to bind a nonresident defendant to a judgment of its courts,' Walden v. Fiore, 577 U.S. 277, 283 (2014), and, thus, in order for this Court to have personal jurisdiction over Anthem Sports, Plaintiffs must show that Anthem Sports (as opposed to Anthem Wrestling) has (or had) sufficient minimum contacts with Tennessee such that “the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice, '” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Minimum contacts exist where a defendant purposefully avails itself of the privilege of conducting activities within the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).

         “Personal jurisdiction maybe found either generally or specifically.” Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 678 (6th Cir. 2012) (quoting Air Prods. & Controls, Inc. v. Safetech Int'1, Inc., 503 F.3d 544, 549-50 (6th Cir. 2007)). “General jurisdiction depends on continuous and systematic contact with the forum state, so that the courts may exercise jurisdiction over any claims a plaintiff may bring against the defendant.” Id. at 678-9 (citing Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 149 (6th Cir. 1997)). “Specific jurisdiction, on the other hand, grants jurisdiction only to the extent that a claim arises out of or relates to a defendant's contacts in the forum state.” Id. Although Plaintiffs assert that both types of personal jurisdiction exist over Anthem Sports, they have established the existence of neither.[1]

         A. General Jurisdiction

         In Goodyear Dunlop Tires Operations, S.A. v. Brown, 546 U.S. 915, 919 (2011), the Supreme Court held that a court may assert general jurisdiction over corporations “when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Thus, “[f]or an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” Id. at 924. “With respect to a corporation, the place of incorporation and principal place of business are ‘[p]aradigm . . . bases for general jurisdiction,' and have the virtue of being unique that is, each ordinarily indicates only one place-as well as easily ascertainable.' Daimler AG v. Bauman, 134 S.Ct. 746, 759 (2014) (citation omitted). “These bases afford plaintiffs recourse to at least one clear and certain forum in which a corporate defendant may be sued on any and all claims.” Id.

         Goodyear and Daimler “wrought [a] sea change” in the law of general jurisdiction because the “continuous-and-systematic standard” that had prevailed “for decades” is no longer the standard. BNSF Ry. Co. v. Tyrrell, 137 S.Ct. 1549, 1561 n.1 (2017) (Sotomayor, J., concurring in part and dissenting in part). Even though “Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business, . . . it is fair to say [Goodyear and Daimler] raised the bar for this type of jurisdiction.” Kipp v. Ski Enter. Corp. of Wisc, Inc., 783 F.3d 695, 698 (7th Cir. 2015) (citation omitted). As a consequence, “[a]ny additional candidates [beyond the principal place of business or state of incorporation] would have to meet the stringent criteria laid out in Goodyear and Daimler, which require more than the ‘substantial, continuous, and systematic course of business' that was once thought to suffice.” Id.; see Brown v. Lockheed Martin Corp., 814 F.3d 619, 626 (2d Cir. 2016) (concluding that, although plaintiff's arguments regarding general jurisdiction “might have sufficed under the more forgiving standard that prevailed in the past, [plaintiff's] contacts fail to clear the high bar set by Daimler to a state's exercise of general jurisdiction over a foreign corporation”); Patterson v. Aker Sols. Inc., 826 F.3d 231, 237 (5th Cir. 2016) (citing Goodyear and Daimler for the proposition that “[s]cholars have viewed the Court's recent personal jurisdiction decisions as part of an access-restrictive trend”).

         Notwithstanding the substantial narrowing of general jurisdiction by the Supreme Court, Plaintiffs raise three grounds for that type of jurisdiction in this case. None are persuasive.

         First, Plaintiffs argue that “Anthem Sports reportedly maintains an office and studio in Nashville.” (Doc. No. 67 at 4). The use of the word “reportedly” is telling because the only “evidence” to support this argument is a copy of a screen-shot from a press release posted on the Internet that states: “Anthem Sports & Entertainment Corp. is a global sports and entertainment media company with offices and studios in New York, Toronto, Los Angeles and Nashville.” (Doc. No. 31-1 at 2). Even if it could be assumed from this that Anthem Sports has an office in all of those places, it does not follow that there would be general jurisdiction in each. See e.g., Daimler, 571 U.S. at 158 (Sotomayor, J., concurring) (“[T]he majority holds today that Daimler is not subject to general jurisdiction in California despite its multiple offices, continuous operations, and billions of dollars' worth of sales there.”); In re Packaged Seafood Prods. Antitrust Litig., 338 F.Supp.3d 1118, 1141 (S.D. Cal. 2018) (“[T]he presence of offices in the forum state does not, by itself, render a defendant subject to general jurisdiction.”); Bauer v. Nortek Glob. HVAC LLC, No. 3:14-CV-1940, 2016 WL 5724232, at *6 (M.D. Tenn. Sept. 30, 2016) (finding that company was “not at home in Tennessee” for purposes of general jurisdiction, even though it had a distribution and manufacturing facility in the state); Estate of Thompson ex rel. Thompson v. Mission Essential Pers., LLC, No. 1:11CV547, 2013 WL 6058308, at *7 (M.D. N.C. Nov. 14, 2013) (finding that fact that defendant advertised having a “major office” was not sufficient to establish general jurisdiction in that state). Besides, Defendants have submitted the Declaration of Ed Nordholm, the Executive Vice President of Anthem Sports, in which he avers that Anthem Sports (1) is incorporated under the laws of the Province of Ontario, Canada, with its primary place of business there; (2) has no business operations of its own, but instead is the parent holding company for various operating companies and brands; and (3) has not appointed an agent for service of process in Tennessee, has no employees in this state, does not own or lease property in Tennessee, and has not conducted business or marketed goods or services to resident of Tennessee. (Doc. No. 60 Nordholm Decl. ¶¶ 2-4, 11). Nordholm also avers that Anthem Wrestling, in contrast, (1) is a Delaware corporation with an office on Dickerson Pike in Nashville; (2) has approximately 15 employees and contractors that carry out its day-to-day operations; and (3) was formed to acquire the assets an entity called TNA Entertainment, LLC after a foreclosure of loans (Id. ¶¶ 7-8). Plaintiffs have provided no evidence to dispute these allegations, even though they could have moved for jurisdictional discovery. See MAG IAS Holdings, Inc. v. Schmuckle, 854 F.3d 894, 899 (6th Cir. 2017) (stating that, in deciding a motion to dismiss for lack of personal jurisdiction, a district court may, among other things “permit discovery in aid of deciding the motion”); Telos Holdings, Inc. v. X5 Grp. AB, No. CIV. 3:08-0079, 2008 WL 1330184, at *1 (M.D. Tenn. Apr. 10, 2008) (lifting stay and granting plaintiff's motion to conduct jurisdictional discovery).

         Second, Plaintiffs point to Anthem Sports' presence on the Internet and its website's accessibility by Tennessee residents as a basis for general jurisdiction. This, too, fails.

         The Sixth Circuit has held that the operation of “a website that is accessible to anyone over the Internet is insufficient to justify general jurisdiction, ” even where the website enables the defendant to do business with residents of the forum state, because such activity does not “approximate[ ] physical presence within the state's borders.” Bird v. Parsons, 289 F.3d 865, 874 (6th Cir. 2002). It has also observed, however, that

the operation of a website may justify specific jurisdiction, if it satisfies the three factors set forth in Southern Machine [Company, v. Mohasco Industries, Inc., 401 F.2d 374, 381 (6th Cir.1968)], namely, if the operation of the website constitutes purposeful availment, is the basis of the cause of action against the defendant, and jurisdiction over the defendant is reasonable. There is strand of law which holds that whether a court can assert specific personal jurisdiction over a website owner depends on how interactive the website is with the people in the forum state. There is another ...

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