Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 1 of 10 Page ID #:249
`
`
`
`
`
`Does 1-4
`
`
`
`
`vs.
`
`
`William Grover Arnett, et al.
`
`
`Defendants.
`
`
`
`
`
`1
`
`O
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
` CASE NO. SACV 12-96-JST (ANx)
`
`ORDER GRANTING IN PART AND
`DENYING IN PART DEFENDANTS’
`MOTION TO DISMISS (Doc. 7)
`
`
`Plaintiffs,
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 2 of 10 Page ID #:250
`
`
`
`
`Before the Court is a Motion to Dismiss Plaintiff’s First Amended Complaint
`(“FAC”) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2) filed by
`Defendants William Grover Arnett (“Arnett”) and William Grover Arnett, P.S.C. (the
`“Firm”) (collectively, “Defendants”). (Mot., Doc. 7.) Plaintiffs Does 1-4 (“Plaintiffs”)
`opposed the Motion (Opp’n, Doc. 12), and Defendants replied (Reply, Doc. 16). Having
`considered the briefs and supporting documents submitted by the parties, and having taken
`the matter under submission, the Court GRANTS IN PART and DENIES IN PART
`Defendants’ Motion.
`
`BACKGROUND
`
`This declaratory relief action arises out of a dispute between the parties regarding
`Plaintiffs’ right to use in a web posting a photograph of Arnett copied from the Firm’s
`website. On December 13, 2011, Plaintiffs posted a comment entitled, “The Missing Link:
`How One Attorney’s Bribery and Corruption Slipped Through the Cracks,” on the website
`citizens4justice.com (the “Post”). (FAC ¶¶ 1, 8, Doc. 6.) The Post identified Arnett as one
`of several attorneys who made donations to the political campaign of the daughter of an
`Administrative Law Judge before whom he regularly appeared. (Id. ¶¶ 9-12.) The Post
`was accompanied by a photograph of Arnett, which Plaintiffs obtained by cropping a
`photograph of Arnett and Congressman J.C. Watts that had appeared on the Firm website
`(the “Photograph”). (Id. ¶¶ 12, 14.)
`
`On December 21, 2011, Arnett sent a takedown notice under the Digital Millennium
`Copyright Act, 17 U.S.C. § 512 (the “DMCA”) to New Dream Network LLC (“NDN”),
`the company that hosts the citizens4justice website. (Id. ¶¶ 7, 16.) The takedown notice
`asserted that Arnett owns the copyright to the Photograph. (Id. ¶ 16.) It also stated that the
`website “published false, defamatory and injurious statements regarding [Defendant
`Arnett], which have caused and will continue to cause him substantial personal and
`occupational harm.” (Id.) NDN removed the Photograph to obtain immunity under the
`DMCA, and has not subsequently reposted it. (Id.; Voelzke Decl. ¶ 4, Doc. 13.) NDN is
`
`
`
`2
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 3 of 10 Page ID #:251
`
`
`
`willing to repost the Photograph if its use on the website is deemed non-infringing by this
`Court. (Voelzke Decl. ¶ 4.) The Post was not removed, and remains on the
`citizens4justice website. (FAC ¶ 16.)
`
`On December 22, 2011, Arnett filed an administrative request for a subpoena with
`this Court pursuant to § 512(h) of the DMCA, which was subsequently served on NDN
`(the “Subpoena”). (Id. ¶ 17, Ex. B.) The Subpoena sought information “sufficient to
`identify the alleged infringer of the [Photograph] described in the [takedown notice] . . . .”
`(Id., Ex. B at 19.) It also contained a declaration of Arnett’s attorney pursuant to § 512(h),
`which certified that “I am the copyright owner or I am authorized to act on behalf of the
`copyright owner on matters involving the infringement of certain copyrighted works as
`detailed herein,” that “[t]he purpose of the accompanying subpoena is to obtain the identity
`of the alleged copyright infringer,” and that “[t]he information obtained will be used only
`for the purpose of protecting the rights granted to William Grover Arnett under [the
`DMCA].” (Id. at 20.)
`Following service of the Subpoena, counsel for Plaintiffs and counsel for
`Defendants met and conferred regarding Plaintiffs’ intent to move to quash the Subpoena.
`(Koltun Decl. ¶ 3-4, Doc. 14.) During those discussions, Defendants’ counsel indicated
`that Arnett may file a complaint against Plaintiffs in the Eastern District of Kentucky—
`where he and the Firm reside—that would include state-law defamation claims. (Id. ¶ 5;
`Arnett Decl. ¶¶ 2-3, Doc. 9.) In light of those discussions, and the inability of the parties
`to reach a settlement of all potential claims, Plaintiffs initiated this declaratory relief action
`on January 19, 2012. (Compl., Doc. 1.) On January 30, 2012, Defendants’ counsel sent a
`letter to counsel for NDN withdrawing the Subpoena pursuant to § 512(h) of the DMCA.
`(Kronenberger Decl. ¶ 3, Ex. A, Doc. 8.)
`The FAC seeks declaratory relief as to three underlying issues: (1) whether, under
`the Copyright Act, Arnett is the owner of the copyright in the Photograph and Plaintiffs are
`liable for copyright infringement for posting the Photograph on the citizens4justice
`website; (2) whether Defendants are liable for damages under §512(f) of the DMCA
`
`
`
`3
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 4 of 10 Page ID #:252
`
`
`
`because they “knowingly materially misrepresent[ed]” in the takedown notice that the
`publication of the Photograph was “infringing”; and (3) whether the Post is defamatory.
`(FAC at 7, ¶¶1(a)-(k).) It also seeks injunctive relief preventing Defendants from filing an
`action against Plaintiffs related to the Post or Photograph, including an action under the
`copyright laws or state defamation laws, and damages, including, inter alia, attorneys’ fees
`and costs, under § 512(f). (Id. at 8, ¶¶ 2-3.) Defendants seek dismissal of the FAC under
`Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction, and under
`Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. (Mot. at 2.)
`
`DISCUSSION
`I. SUBJECT MATTER JURISDICTION
`A. Legal Standard
`“A jurisdictional challenge under Rule 12(b)(1) may be made either on the face of
`the pleadings or by presenting extrinsic evidence.” Warren v. Fox Family Worldwide, Inc.,
`328 F.3d 1136, 1139 (9th Cir. 2003). In other words, a motion to dismiss for lack of
`subject matter jurisdiction pursuant to Rule 12(b)(1) can be facial or factual. Safe Air for
`Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). Where, as here, the defendant
`asserts a facial attack (see Mot. at 2), “[it] asserts that the allegations contained in a
`complaint are insufficient on their face to invoke federal jurisdiction.” Id. “Dismissal for
`lack of subject matter jurisdiction is appropriate if the complaint, considered in its entirety,
`on its face fails to allege facts sufficient to establish subject matter jurisdiction.” In re
`Dynamic Random Access Memory (DRAM) Antitrust Litig., 546 F.3d 981, 984-985 (9th
`Cir. 2008).
`B. Analysis
`Defendants assert that the Court lacks subject matter jurisdiction over this action for
`two reasons. First, Defendants argue that Plaintiffs’ claim for declaratory relief as to
`copyright infringement and damages under the DMCA should be dismissed as moot.
`(Mot. at 2.) Second, Defendants argue that Plaintiffs’ claim for declaratory relief as to
`
`
`
`4
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 5 of 10 Page ID #:253
`
`
`
`defamation under state law should be dismissed because the Court lacks supplemental
`jurisdiction under 28 U.S.C. § 1367. (Reply at 5.) The Court considers each in turn.
`i. Mootness
`“Article III of the Constitution requires that there be a live case or controversy at
`the time that a federal court decides the case.” C.F. ex rel. Farnan v. Capistrano Unified
`Sch. Dist., 654 F.3d 975, 983 (9th Cir. 2011) (quoting Burke v. Barnes, 479 U.S. 361, 363
`(1987). “A federal court cannot issue a declaratory judgment if a claim has become moot.”
`Pub. Utils. Comm’n v. F.E.R.C., 100 F.3d 1451, 1459 (9th Cir. 1996).
`Defendants assert that Plaintiffs’ declaratory relief claim based upon the DMCA
`takedown notice should be dismissed as moot because the Photograph has been removed
`from the website and the Subpoena has been withdrawn. (Mot. at 4.) They further assert
`that Plaintiffs’ claims seeking a declaration of rights regarding copyright infringement
`should also be dismissed as moot based upon Defendants’ representation that “[they] are
`willing to agree not to pursue any copyright claims against Plaintiffs in the future.” (Reply
`at 4.) The Court disagrees.
`The Court need not determine the effect of the Subpoena withdrawal and
`Defendants’ representation regarding future claims for copyright infringement at this stage
`of the proceedings. Even if Defendants’ withdrawal of the Subpoena and representation
`were sufficient to moot Plaintiffs’ declaratory relief claim as to copyright infringement, the
`FAC would not be subject to dismissal because a live case or controversy exists between
`the parties as to whether Defendants “knowingly materially misrepresent[ed]” in the
`takedown notice that the publication of the Photograph was “infringing.” § 512(f)(1).
`While the Court may need to pass upon the validity of Arnett’s copyright in the
`Photograph to resolve Plaintiffs’ damages request, the § 512(f) claim does not depend
`upon future claims for copyright infringement; it seeks damages for past
`misrepresentations in the takedown notice. Because Plaintiffs have a live claim for
`damages, the FAC is not subject to dismissal for mootness. C.F. ex rel. Farnan v.
`Capistrano Unified Sch. Dist., 654 F.3d 975, 983 (9th Cir. 2011) (“[A] ‘live claim for
`
`
`
`5
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 6 of 10 Page ID #:254
`
`
`
`[even] nominal damages will prevent dismissal for mootness.’”) (quoting Jacobs v. Clark
`Cnty. Sch. Dist., 526 F.3d 419, 425 (9th Cir. 2008)).
`Defendants’ argument that the FAC should be dismissed because the allegations in
`the FAC demonstrate that Plaintiffs cannot succeed on their DMCA claim does not require
`a different result. Even if Defendants had brought a motion to dismiss for failure to state a
`claim under Rule 12(b)(6), which they did not, Plaintiffs have sufficiently alleged a claim
`for damages under § 512(f). Plaintiffs allege that Arnett is not the owner of the copyright
`in the Photograph, and that neither Arnett, nor defense counsel had a good faith belief that
`Arnett owned the copyright at the time they sent the takedown notice and applied for the
`Subpoena. (FAC ¶¶ 19-20, 25.) Those allegations of bad faith are sufficient at this stage
`of the proceedings to establish a case or controversy under the DMCA. See Lenz v.
`Universal Music Grp., 572 F. Supp. 2d 1150, 1154-55 (N.D. Cal. 2008) (“An allegation
`that a copyright owner acted in bad faith by issuing a takedown notice without proper
`consideration of the fair use doctrine . . . is sufficient to state a misrepresentation claim
`pursuant to § 512(f) of the DMCA.”)
`For the foregoing reasons, the Court concludes that it has subject matter jurisdiction
`over Plaintiffs’ declaratory relief claim insofar as it seeks relief pertaining to Plaintiffs’
`rights under federal law.
`ii. Supplemental Jurisdiction
`Having determined that it has subject matter jurisdiction over Plaintiffs’ claims
`under federal law, the Court considers whether it may exercise supplemental jurisdiction
`under 28 U.S.C. § 1367 over Plaintiffs’ request for declaratory judgment as to potential
`state-law defamation claims. See Countrywide Homes Loans, Inc. v. Mortg. Guarantee
`Ins. Corp., 642 F.3d 849, 853 (9th Cir. 2011) (“federal courts have discretion under the
`DJA only as to whether to award declaratory relief pursuant to the jurisdiction that they
`must properly derive from the underlying controversy between the litigants”); Gritchen v.
`Collier, 254 F.3d 807, 811 (9th Cir. 2001) (“The Declaratory [Judgment] Act applies only
`if federal jurisdiction independently exists.”).
`
`
`
`6
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 7 of 10 Page ID #:255
`
`
`
`Section 1367 provides that, “in any civil action of which the district courts have
`original jurisdiction, the district courts shall have supplemental jurisdiction over the other
`claims that are so related to claims in the action within such original jurisdiction that they
`form part of the same case or controversy under Article III of the United States
`Constitution.” 28 U.S.C. § 1367(a). “Nonfederal claims are part of the same ‘case’ as
`federal claims when they ‘derive from a common nucleus of operative fact’ and are such
`that a plaintiff ‘would ordinarily be expected to try them in one judicial proceeding.’” Trs.
`of Constr. Indus. & Laborers Health & Welfare Trust v. Desert Valley Landscape &
`Maint., Inc., 333 F.3d 923, 925 (9th Cir. 2003) (quoting United Mine Workers of Am. v.
`Gibbs, 383 U.S. 715, 725 (1966)). That is, “pendent claims remain within the court’s
`jurisdiction if the vital facts that must be proved as predicates of the [federal claim] are the
`same as those that must be proved to establish [the state claims].” Republic of the Phil. v.
`Marcos, 862 F.2d 1355, 1360 (9th Cir. 1988).
`Plaintiffs’ state-law defamation claims are not part of the same constitutional case
`as Plaintiffs’ federal copyright claims because they are not bound by a common nucleus of
`operative fact. In order to resolve Plaintiffs’ declaratory relief claims based upon the
`DMCA and the Copyright Act, the Court will need to consider whether Arnett owned a
`valid copyright in the Photograph, whether publishing the Photograph on the website
`violated the Copyright Act, and whether Defendants knowingly misrepresented in the
`takedown notice that Plaintiffs’ use of the Photograph was infringing. See 17 U.S.C. §
`512(f); 17 U.S.C. § 107 (factors for fair use under the Copyright Act); L.A. Printex Indus.,
`Inc. v. Aeropostale, Inc, 676 F.3d 841, 846 (9th Cir. 2012) (“To establish copyright
`infringement, a plaintiff must prove two elements: (1) ownership of a valid copyright, and
`(2) copying of constituent elements of the work that are original.”). Plaintiffs’ declaratory
`relief claims based upon California state defamation law would require the Court to
`resolve whether the Post, “involves the intentional publication of a statement of fact which
`is false, unprivileged, and has a natural tendency to injure or which causes special
`damage.’” Price v. Stossel, 620 F.3d 992, 998 (9th Cir. 2010) (quoting Gilbert v. Sykes,
`
`
`
`7
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 8 of 10 Page ID #:256
`
`
`
`147 Cal. App. 4th 13, 27 (2007)). The two inquires involve entirely different aspects of
`Plaintiffs’ website content—the Photograph and the Post—and do not involve overlapping
`questions of law or fact. Accordingly, the Court lacks supplemental jurisdiction over
`Plaintiffs’ declaratory relief claims based upon state law.
`
`
`II. PERSONAL JURISDICTION
`A. Legal Standard
`Rule 12(b)(2) allows a party to assert lack of personal jurisdiction as a defense by
`motion. Fed. R. Civ. P. (12)(b)(2). “Although the defendant is the moving party on a
`motion to dismiss [for lack of personal jurisdiction], the plaintiff bears the burden of
`establishing that jurisdiction exists.” Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007,
`1019 (9th Cir. 2002). “[I]n the absence of an evidentiary hearing, the plaintiff need only
`make ‘a prima facie showing of jurisdictional facts to withstand the motion to dismiss.’”
`Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010)
`(quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006)). The
`“uncontroverted allegations in [the plaintiff’s] complaint must be taken as true, and
`conflicts between the facts contained in the parties’ affidavits must be resolved in [the
`plaintiff’s] favor.” Rio Props., 284 F.3d at 1019. In other words, “for the purpose of this
`[prima facie] demonstration, the court resolves all disputed facts in favor of the plaintiff.”
`Pebble Beach, 453 F.3d at 1154.
`B. Analysis
`Defendants assert that the Court lacks personal jurisdiction over them because they
`are residents of Kentucky with no connection to California. (Mot. at 7; Reply at 6; Arnett
`Decl. ¶¶ 2-3.) Plaintiffs contend that Defendants consented to jurisdiction in this Court by
`availing themselves of the subpoena process under the DMCA. For the following reasons,
`the Court agrees with Plaintiffs.
`“Personal jurisdiction over a nonresident defendant is tested by a two-part analysis.
`First, the exercise of jurisdiction must satisfy the requirements of the applicable state long-
`
`
`
`8
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 9 of 10 Page ID #:257
`
`
`
`arm statute. Second, the exercise of jurisdiction must comport with federal due process.”
`Dow Chem Co. v. Calderon, 422 F.3d 827, 830 (9th Cir. 2005) (quoting Chan v. Soc’y
`Expeditions, Inc., 39 F.3d 1398, 1404-05 (9th Cir. 1994)). “Because California permits the
`exercise of personal jurisdiction to the full extent permitted by due process, [courts] need
`only determine whether jurisdiction over [a defendant] comports with due process.”
`Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 919 (9th Cir. 2011) (internal citation and
`quotation marks omitted); see Cal. Code Civ. P. § 410.10 (“A court of this state may
`exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of
`the United States.”). “For due process to be satisfied, a defendant, if not present in the
`forum, must have ‘minimum contacts’ with the forum state such that the assertion of
`jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’”
`Pebble Beach, 453 F.3d at 1155 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 315
`(1945)).
`“Because the personal jurisdiction requirement is a waivable right, there are a
`‘variety of legal arrangements’ by which a litigant may give ‘express or implied consent to
`the personal jurisdiction of the court.’” Dow Chem. Co., 422 F.3d at 831 (quoting Burger
`King Corp. v. Rudzewicz, 471 U.S. 462, 472 n. 14 (2005)). “In general, [the Ninth Circuit
`has] held that a party has consented to personal jurisdiction when the party took some kind
`of affirmative act—accepting a forum selection clause, submitting a claim, filing an
`action—that fairly invited the court to resolve the dispute between the parties.” S.E.C. v.
`Ross, 504 F.3d 1130, 1149 (9th Cir. 2007). “[A] party cannot simultaneously seek
`affirmative relief from a court and object to that court’s exercise of jurisdiction.” Id. At
`1148.
`
`Here, because the Court lacks supplemental jurisdiction over Plaintiffs’ claims
`pertaining to state defamation law, it need only determine whether it has personal
`jurisdiction over Defendants as to Plaintiffs’ claims related to Arnett’s copyright ownership
`in the Photograph and damages under § 512(f). See Action Embroidery Corp. v. Atl.
`Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004) (“Personal jurisdiction must exist
`
`
`
`9
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`
`Case 8:12-cv-00096-FMO-AN Document 25 Filed 08/01/12 Page 10 of 10 Page ID #:258
`
`
`
`for each claim asserted against a defendant.”). As to those claims, Defendants consented to
`jurisdiction in this Court by availing themselves of the administrative subpoena process
`under the DMCA to prosecute their potential claims under the Copyright Act. This action
`pertains to that same dispute, and directly implicates the veracity of documents relied upon
`to procure relief from this Court. Therefore, at least as to Plaintiffs’ DMCA and copyright-
`based claims, which are the only matters remaining before this Court, Defendants
`consented to personal jurisdiction. Accordingly, their Motion to Dismiss on the basis of
`personal jurisdiction is denied as to those claims.
`
`CONCLUSION
`
`For the foregoing reasons, Defendants’ Motion to Dismiss is DENIED as to
`Plaintiffs’ declaratory relief claims based upon the DMCA and the Federal Copyright Act,
`and GRANTED as to Plaintiffs’ declaratory relief claims based upon state defamation law.
`
`DATED: August 1, 2012
`
`
`
`
`
`
`
`
`
`
`
`
`
` _________________________________________
`
`
` JOSEPHINE STATON TUCKER
`
`
`UNITED STATES DISTRICT JUDGE
`
`
`
`10
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28