Opinion ID: 737229
Heading Depth: 2
Heading Rank: 1

Heading: Charly Records

Text: 21 Records' California contacts asserted by MCA are of two types: sales and advertising.
22
23 MCA submitted the deposition of Franklyn Scott, the president and vice-president of Roots and Rhythm, Inc. and formerly an officer of Down Home Music, Inc. Roots and Rhythm and Down Home are a mail order and retail record business, respectively, and both are located in El Cerrito, California. Scott testified that Down Home (and later Roots and Rhythm) had been selling Charly recordings in California since the formation of Charly in the 1970s. Charly Records, Ltd. was incorporated in 1981 and began releasing Chess recordings in August 1988. Since that time, Charly Records' recordings, including Chess recordings, have been among those sold by Down Home in California. 24 Prior to 1988, Down Home bought its Charly products from a company called Street Level Trading Co. Although MCA submitted evidence indicating that Street Level was not completely independent from Records, this evidence is largely irrelevant because Records did not produce Chess recordings until August 1988. About that time (August 1988), and lasting until early 1990, Street Level and Records began having problems. When Street Level and Records were having problems, Down Home would purchase directly from Records in London. Included among these direct purchases were seventeen Chess recordings (totalling pounds sterling59.50) ordered on September 19, 1988, and fourteen Chess recordings (totalling pounds sterling49.00) ordered on November 25, 1988. 25 In early 1990, Street Level and Records terminated their relationship. In an April 11, 1990 letter, Records informed Down Home that it should thereafter order directly from Records, with the export invoicing to be handled by Expan Marketing, Ltd. At the time of Scott's deposition in April 1992, Roots and Rhythm continued to place orders directly with Records, which would then fill the orders via Expan Marketing. Orders from May 7, 1990 to February 4, 1992, indicate that Down Home ordered over 452 Chess recordings directly from Records. 26
27 MCA also submitted the declaration of Harvey Geller, one of MCA's attorneys, who declared that on May 24, 1991, he bought two Records recordings, one of which was from the Chess Masters, at a Tower Records store in West Hollywood, California. No evidence was presented as to how the recordings made their way to California.
28
29 Billboard Magazine is a weekly music industry magazine distributed worldwide, including in Southern California. In the November 30, 1991 edition, in an advertising supplement devoted to a company called Media 7, was an ad that stated, CHARLY RECORDS CELEBRATES 10 YEARS OF JOY WITH MEDIA 7! Below the statement was pictured four Charly products, including a collection by Chuck Berry containing Chess recordings and depicting the Chess trademark. Records contends that Media 7 is a French distribution company and that Records placed the ad with Billboard Ltd. (a British company) with the intent of reaching customers in France. 30
31 Records distributed a catalog of its products. The 1991 catalog included numerous products containing Chess recordings. Records printed an offer to sell the catalog for $3 on the back of its CDs, at least some of which found their way to Southern California. Records also sent several hundred copies to Down Home and Roots and Rhythm in California, which would distribute them to their customers. The customers could then order anything in the catalog from Roots and Rhythm. Finally, Records mailed a few of its catalogs to California residents. 32
33 About once a month, Records also sent letters and other promotional material to Down Home. Included among this material was a new release list containing Chess recordings, a promotional letter touting Chess recordings, and brochures advertising Chess recordings.
34 Records' contacts with California are not of a sufficiently substantial nature to justify the exercise of general jurisdiction. See Helicopteros Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 410-11, 418-19 (1984) (holding no general jurisdiction despite sales negotiations, purchasing of equipment, and training of personnel in forum state).

35 The purposeful availment requirement is satisfied if the defendant has performed some type of affirmative conduct which allows or promotes the transaction of business within the forum state. Sinatra v. National Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir.1988). It is designed to ensure that the defendant is not haled into court as the result of random, fortuitous or attenuated contacts, or on account of the unilateral activities of third parties. Shute v. Carnival Cruise Lines, 897 F.2d 377, 381 (9th Cir.1990), rev'd on other grounds, 499 U.S. 585 (1991). As noted by the court in Sinatra, the solicitation of business in the forum state that results in business being transacted or contract negotiations will probably be considered purposeful availment. Sinatra, 854 F.2d at 1195; see also Shute, 897 F.2d at 382-83 (holding that advertising, conducting promotional seminars, and paying commission on sales within the forum state were more than sufficient to meet the purposeful availment test). 36 Records has purposefully availed itself of the privilege of conducting business in California. It advertised, promoted, and sold its products directly to Down Home Records in El Cerrito, California. While Records contends that the Chess products it sold to Down Home were inconsequential (amounting to a total of pounds sterling108.50 or $170.00 over an eighteen-month period prior to April, 1990), Records fails to acknowledge that Down Home continued to place substantial orders with Records after April, 1990. Although Expan Marketing Ltd. may have filled Down Home's orders during this period, the evidence indicates that the orders were placed directly with Records. Thus it was Records' affirmative conduct, and not solely the unilateral activity of Expan, that was responsible for selling Records' products to Down Home after April, 1990. Moreover, it was reasonable for the district court to find that the products sold included over 452 Chess recordings during this period. 37 Even apart from these sales, Records directly promoted its products, including its Chess products, to Down Home in California. Although the Billboard ad and the catalog offer printed on the back of Records' CDs likely made their way to California through the conduct of third parties (and are therefore insufficient to establish purposeful availment), the advertising materials Records sent to Down Home, including catalogs, brochures, and letters, are more than sufficient to demonstrate an affirmative effort on the part of Records to market its products in California. Included among these products were those derived from the Chess Masters. 38 The evidence submitted by MCA is more than sufficient to make a prima facie showing of purposeful availment on the part of Records.
39 This Circuit applies a but for test to determine whether a claim arises out of a defendant's forum-related activities. Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir.1995). Records does not contend that the arising out of requirement is not met. But for Records advertisement and sale of Chess recordings, MCA's rights in those recordings and related trademarks would not have been infringed. Because some of the advertisement and sales activity was directed to California, MCA's claims arise out of this forum-related activity. See generally Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780-81 (1984) (recognizing that a defendant may sue in any forum with which the defendant has minimum contacts and may seek recovery for damages suffered in other forums); Vencedor Mfg. Co. v. Gougler Industries, Inc., 557 F.2d 886, 892 (1st Cir.1977) (fact that defendant's sales in forum were less than .5 percent of its total sales volume is irrelevant, so long as its sales there are part of a regular course of dealing, and are not isolated or exceptional events).
40 Because Records' contacts satisfy the purposeful availment requirement, personal jurisdiction is presumptively reasonable. Sher, 911 F.2d at 1364. The burden falls on Records to present a compelling case that the exercise of jurisdiction would be so unreasonable as to violate due process. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985); Sher, 911 F.2d at 1364. In determining the reasonableness of jurisdiction, this Circuit has identified the following factors to consider: the extent of the defendant's purposeful interjection into the forum state; the burden on the defendant of defending in the forum state; the extent of conflict with the sovereignty of the defendant's state; the forum state's interest in adjudicating the dispute; the most efficient forum for judicial resolution of the dispute; the importance of the chosen forum to the plaintiff's interest in convenient and effective relief; and the existence of an alternative forum. Sher, 911 F.2d at 1364; Sinatra, 854 F.2d at 1198-99. 41
42 The purposeful interjection factor is analogous to the purposeful availment factor discussed above. Sinatra, 854 F.2d at 1199; see Corporate Investment Business Brokers v. Melcher, 824 F.2d 786, 790 (9th Cir.1987) (Ninth Circuit cases give the 'purposeful interjectment' factor no weight once it is shown that the defendant purposefully directed its activities to the forum state....). It does not weigh against jurisdiction. 43
44 Records makes no argument as to why the exercise of jurisdiction would be burdensome. While defending oneself in a foreign country should be accorded significant weight in assessing the reasonableness of jurisdiction, Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 114 (1987), modern advances in communication and transportation have significantly reduced the burden on litigating in another country. Sinatra, 854 F.2d at 1199. In the absence of a developed argument as to why the exercise of jurisdiction would be unreasonably burdensome on Records, this factor should not weigh against jurisdiction. 45
46 The Supreme Court has cautioned that [g]reat care and reserve should be exercised when extending our notions of personal jurisdiction into the international field. Asahi, 480 U.S. at 115 (citation omitted); see also FDIC v. British-American Ins. Co., 828 F.2d 1439, 1444 (9th Cir.1987) (stating that litigation against an alien defendant creates a higher jurisdictional barrier than litigation against a citizen from a sister state because of important sovereignty concerns). English sovereignty will not be undermined by this action, however, for MCA asserts claims based on Defendants' violation of MCA's rights in the United States under United States trademark law, and seeks recovery of only those damages incurred in the United States. As Records' own British solicitor acknowledged, [t]he English Court can no more determine the validity of claims for infringement of USA Trademark than this Court could such claims in respect of English Trademarks. While Records points to its decision to default rather than defend this action as evidence of the conflict with English sovereignty, its decision was merely a strategic one made after the district court's finding of jurisdiction, and does not reflect an actual conflict with English sovereignty. 47
48 California maintains a strong interest in providing an effective means of redress for its residents tortiously injured by commercial misappropriation. Sinatra, 854 F.2d at 1200. As MCA is a California corporation with its principle place of business in California and is alleging tortious interference with its commercial property rights, California's interest weighs in favor of jurisdiction. 49
50 MCA can only obtain effective relief for the alleged infringement of its federally-protected trademark rights in the United States. Within the United States, California is the most efficient forum because it is where most of MCA's witnesses are located. 51
52 Records has failed to identify any other forum available for redressing the harm to MCA's federally-protected trademark rights caused by Records' alleged sales of infringing recordings in the United States. In any event, [w]hether another reasonable forum exists becomes an issue only when the forum state is shown to be unreasonable. Sinatra, 854 F.2d at 1201 (citation omitted). 53 Taking all of the factors as a whole, Records has failed to demonstrate that the exercise of specific jurisdiction is so unreasonable as to violate due process. By advertising and selling allegedly infringing products in California, Records should reasonably expect to be haled into a California court to defend an infringement action.