Hydentra Hlp Int. Limited v. Sagan Limited

NOT FOR PUBLICATION FILED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
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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.
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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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