Court Opinion

ID: 4422282
Source: CourtListenerOpinion
Date Created: 2019-08-01 20:00:42.678589+00
Date Added: 2024-06-11T14:52:56.550464
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        AUG 1 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

HYDENTRA HLP INT. LIMITED, DBA                  No.    17-16637
Metart, DBA Sexart, a foreign corporation;
HYDENTRA LP HLP GENERAL                         D.C. No. 2:16-cv-01494-DGC
PARTNER INCORPORATED, DBA
Metart, DBA Sexart, a foreign corporation,
                                                MEMORANDUM*
                Plaintiffs-Appellants,

 v.

SAGAN LIMITED, DBA Porn.com, a
Republic of Seychelles company; et al.,

                Defendants-Appellees.

                   Appeal from the United States District Court
                            for the District of Arizona
                   David G. Campbell, District Judge, Presiding

                       Argued and Submitted May 14, 2019
                            San Francisco, California

Before: THOMAS, Chief Judge, and McKEOWN and GOULD, Circuit Judges.

      Hydentra HLP Int. Ltd. and Hydentra LP HLP General Partner Incorporated

(collectively, “Hydentra”), companies organized under the laws of the Republic of

Cyprus and producers of pornographic material available to their online paid

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
subscribers, assert claims of copyright infringement against foreign defendants

associated with the website Porn.com. Sagan Limited (resident of Seychelles),

MXN Limited (“Cyberweb”) (resident of Barbados), Netmedia Services, Inc.

(resident of Canada), and David Koonar (resident of Canada) (collectively,

“Sagan”), moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for

lack of personal jurisdiction.1 Reviewing de novo the district court’s dismissal for

lack of personal jurisdiction, we reverse. Mavrix Photo, Inc. v. Brand Techs., Inc.,

647 F.3d 1218, 1223 (9th Cir. 2011).

      Federal Rule of Civil Procedure 4(k)(2), the federal long-arm statute,

authorizes a district court’s exercise of personal jurisdiction over a defendant if (1)

the claim arises under federal law; (2) the defendant is not subject to jurisdiction of

any state court of general jurisdiction; and (3) exercising jurisdiction comports

with due process. Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450,

461 (9th Cir. 2007). As the district court noted, Sagan conceded that the first and

second factors are satisfied.

      The due process analysis under the third part of the federal long-arm statute

“is nearly identical to traditional personal jurisdiction analysis,” id. at 462, which

1
 The district court treated all defendants as owners or operators of Porn.com.
Sagan admits that at least one defendant, Cyberweb, is an owner or operator of
Porn.com. Personal jurisdiction is proper as to all owners or operators of
Porn.com. On remand, the district court should determine which parties are
owners or operators of Porn.com in addition to Cyberweb.

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requires:

      (1) The non-resident defendant must purposefully direct his activities or
      consummate some transaction with the forum or resident thereof . . . ; (2) the
      claim must be one which arises out of or relates to the defendant’s forum-
      related activities; and (3) the exercise of jurisdiction must comport with fair
      play and substantial justice, i.e. it must be reasonable.

Mavrix, 647 F.3d at 1227–28 (emphasis in original) (quotation omitted). The key

difference under the federal long-arm statute as compared to traditional personal

jurisdiction analysis is that, “rather than considering contacts between the

[defendant] and the forum state, we consider contacts with the nation as a whole.”

Holland Am. Line Inc., 485 F.3d at 462.

      The purposeful direction analysis is comprised of a three-parts “effects” test

and requires that “the defendant allegedly must have (1) committed an intentional

act, (2) expressly aimed at the forum state, (3) causing harm that the defendant

knows is likely to be suffered in the forum state.” Mavrix, 647 F.3d at 1228

(quotation omitted). We agree with the district court that Hydentra demonstrated

that Sagan allegedly committed an intentional act of copyright infringement and

expressly aimed at the United States. However, the district court erred in its

evaluation of the third part of the effects test. Giving weight to Hydentra’s

reasonable version of the facts, we conclude the record supports that Sagan

allegedly caused harm that it likely knew would be suffered by Hydentra in the

United States. See id. at 1223 (“Where, as here, the defendant’s motion is based on

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written materials rather than an evidentiary hearing, the plaintiff need only make a

prima facie showing of jurisdictional facts to withstand the motion to dismiss. . . .

[W]e resolve factual disputes in the plaintiff’s favor.” (quotation omitted)).

      As the district court correctly determined, Hydentra showed that Sagan

committed an intentional act of alleged copyright infringement. We have held that

“[t]he economic loss caused by the intentional infringement of a plaintiff’s

copyright is foreseeable.” Id. at 1231. Further, “[w]e have repeatedly held that a

corporation incurs economic loss, for jurisdictional purposes, in the forum of its

principal place of business,” which Hydentra asserts is the United States.

CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1079 (9th Cir. 2011).

Hydentra alleges that Sagan’s unauthorized display of its copyrighted videos,

which Hydentra makes available for a fee, resulted in lost profits and reputational

damage, and that the majority of its revenue is generated in the United States.

Thus, as we must construe all facts in Hydentra’s favor, it is not unreasonable to

infer that the foreseeable economic harm alleged would have been suffered in the

United States.

      Because the three parts of the purposeful direction “effects” test are met, we

reach the other two prongs of the specific jurisdiction analysis. Mavrix, 647 F.3d

at 1227–28. We conclude that Hydentra met its burden of showing that its

copyright infringement claims arise out of Sagan’s forum-related activities.

                                          4
      Sagan failed to show that exercising jurisdiction would be unreasonable and

violate due process. Id. at 1228 (citing Burger King Corp. v. Rudzewicz, 471 U.S.
462, 476–78 (1985) (commenting that once a plaintiff satisfies the first two prongs

of the effects test, the burden shifts to the defendant to demonstrate that the

exercise of jurisdiction is improper)). The seven-factor balancing test that we use

to “determin[e] whether the exercise of jurisdiction comports with ‘fair play and

substantial justice’ and is therefore reasonable” weighs in Hydentra’s favor.

CollegeSource, 653 F.3d at 1079.

      REVERSED AND REMANDED.

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