Case 2:17-cv-06278-DRH-SIL Document 29 Filed 10/18/18 Page 1 of 13 PageID #: 248
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`Plaintiff,
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`MEMORANDUM & ORDER
`17-CV-6278(DRH)(SIL)
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`-against-
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`—————————————————— X
`ADWAR CASTING CO., LTD., a New York
`Corporation,
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`STAR GEMS INC., a Georgia Corporation,
`ANISH DESAI, an individual, and Does 1-20,
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`Defendants.
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`—————————————————— X
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`APPEARANCES:
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`For Plaintiff:
`THE LAW OFFICES OF TEDD S. LEVINE, LLC
`1305 Franklin Avenue, Suite 300
`Garden City, New York 11530
`By:
` Tedd S. Levine, Esq.
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`For Defendants
`ENNS & ARCHER LLP
`939 Burke Street
`Winston-Salem, NC 27101
`By: Rodrick J. Enns, Esq.
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`
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`HURLEY, Senior District Judge:
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`Plaintiff Adwar Casting (“Plaintiff” or “Adwar”) commenced this action against
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`defendants Star Gems Inc. (“Star”) and Anish Desai (“Desai”) (collectively “Defendants”)
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`asserting claims for copyright infringement pursuant to 17 U.S.C. §501, as well as related state
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`law claims. Presently before the Court is Defendants’ motion pursuant to Fed. R. Civ. P. 12(b)(2)
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`to dismiss the complaint for lack of personal jurisdiction. For the reason set forth below, the
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`motion is granted.
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`Case 2:17-cv-06278-DRH-SIL Document 29 Filed 10/18/18 Page 2 of 13 PageID #: 249
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`BACKGROUND
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`I.
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`Allegations in the Complaint
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`The following allegations are taken from the Complaint (“Comp.”)
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`Adwar is a New York corporation with its principal place of business in Rockville
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`Centre, New York. It creates, manufactures and distributes original jewelry products, which it
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`actively markets and sells throughout the United States. (Comp. ¶¶1, 9.) Star is a Georgia
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`corporation with its principal place of business in Georgia. It is a wholesale manufacturer and
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`seller of jewelry products, which it sells and distributes throughout the United States and
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`internationally. (Id. ¶ 2, 10, 11.) Desai is the principal shareholder and chief executive officer of
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`Star and has his principal place of business in Georgia. As such he is responsible for all of Star’s
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`important business decisions, including what artwork is used in connection with the products
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`Star manufactures, markets and sells. (Id. ¶¶ 3, 19, 20.)
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`In or about July 2017, Star, without Adwar’s consent, copied certain of Adwar’s jewelry
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`items, specifically a ring and a pendant (referred to in the complaint and herein as “Artwork”),
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`and began marketing and selling jewelry products using the Artwork (“referred to in the
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`complaint and herein as the “Knock-off Products”). (Comp. ¶ 12.) A substantial similarity exists
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`between the Artworks and the Knock-off Products. (Id. ¶ 14.) Prior to Star marketing and selling
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`the Knock-off Products, Adwar, as owner of the Artwork registered it with the United States
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`Copyright office and said registration was in full force and effect at the time of the relevant
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`events. (Id. ¶ 13.) Star was not licensed or authorized to use any of the Artwork. (Id. ¶¶ 15-17.)
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`Adwar has lost income as a result of Star’s activities using the Artwork. (Id. ¶ 18.)
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`I.
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`Standard – Rule 12(b)(2) Motion
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`DISCUSSION
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` On a motion to dismiss under Rule 12(b)(2), the plaintiff bears the burden of establishing
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`jurisdiction over the defendant. See Metro. Life Ins. Co. v. Robertson–Ceco Corp., 84 F.3d 560,
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`566 (2d Cir. 1996). Courts may rely on additional materials outside the pleading when ruling on
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`a 12(b)(2) motion. Minnie Rose LLC v. Yu, 169 F. sup.3d 504, 510 (S.D.N.Y. 2016). Where, as
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`here, the parties have not yet conducted discovery, a plaintiff may defeat a defendant’s Rule
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`12(b)(2) motion “by making a prima facie showing of jurisdiction by way of the complaint’s
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`allegations, affidavits, and other supporting evidence.” Mortg. Funding Corp. v. Boyer Lake
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`Pointe, L.C., 379 F. Supp. 2d 282, 285 (E.D.N.Y.2005). Moreover, given the early stage of the
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`proceedings here, the Court must view the pleadings in the light most favorable to the plaintiff,
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`see Sills v. The Ronald Reagan Presidential Found., Inc., 2009 WL 1490852, *5 (S.D.N.Y. May
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`27, 2009), and when evidence is presented, “doubts are resolved in the plaintiff's favor,
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`notwithstanding a controverting presentation by the moving party,” A.I. Trade Fin., Inc. v. Petra
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`Bank, 989 F.2d 76, 80 (2d Cir. 1993). A court need not, however, “draw argumentative
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`inferences in the plaintiff's favor,” nor “accept as true a legal conclusion couched as a factual
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`allegation.” In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir. 2013) (quoting
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`Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994) and Jazini v. Nissan
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`Motor Co., 148 F.3d 181, 185 (2d Cir. 1998)). Thus, the plaintiff “may not rely on conclusory
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`statements without any supporting facts, as such allegations would ‘lack the factual specificity
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`necessary to confer jurisdiction.’ ” Art Assure Ltd., LLC v. Artmentum GmbH, 2014 WL
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`5757545, at *2 (S.D.N.Y. Nov. 4, 2014) (quoting Jazini 148 F.3d at 185); accord Cont’l Indus.
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`Grp. v. Equate Petrochemical Co., 586 F. App’x 768, 769 (2d Cir. 2014) (A plaintiff “must
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`Case 2:17-cv-06278-DRH-SIL Document 29 Filed 10/18/18 Page 4 of 13 PageID #: 251
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`make allegations establishing jurisdiction with some factual specificity and cannot establish
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`jurisdiction through conclusory assertions alone.”) (internal quotation marks omitted).
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`II.
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`Personal Jurisdiction Generally
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`In a diversity case, a federal district court exercises personal jurisdiction over a party in
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`accordance with the law of the forum state, subject to the requirements of due process under the
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`United States Constitution. See Whitaker v. American Telecasting, Inc., 261 F.3d 196, 208 (2d
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`Cir. 2001). Due process requires that the defendant have certain “minimum contacts” with the
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`forum state; such minimum contacts assure that a defendant “will only be subjected to the
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`jurisdiction of a court where the maintenance of a lawsuit does not offend traditional notions of
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`fair play and substantial justice.” Waldman v. Palestine Liberation Org., 835 F.3d 317 (2d Cir.
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`2016) (internal quotation marks omitted). In assessing a defendant’s contact with the forum state
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`for due process purposes, “the crucial question is whether the defendant has purposefully availed
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`itself of the privilege of conducting activities within the forum Sate, thus invoking the benefits
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`and protections of its laws,” and therefore “should reasonably anticipate being haled into court
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`there.” Best Van Lines, Inc. v. Walker, 490 F.3d 239, 242-43 (2d Cir. 2007). (internal citations
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`and quotation marks omitted).
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`In New York, courts may exercise either general or specific jurisdiction over defendants.
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`A. General Jurisdiction
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`“In New York, general jurisdiction is governed by N.Y. CPLR § 301. Section 301
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`preserves the common law notion that a court may exercise general jurisdiction over a
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`nondomiciliary defendant if that defendant is engaged in such a continuous and systematic
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`course of doing business here to warrant a finding of its presence in this jurisdiction.”
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`Thackurdeen v. Duke Univ., 130 F. Supp. 3d 792, 798 (S.D.N.Y. 2015); see Sonera Holding B.V.
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`v. Cukorova Holding, A.S., 750 F.3d 221, 224 (2d Cir. 2014). “Defendant’s ‘continuous activity
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`of some sort[ ] within a state ... is not enough to support the demand that the corporation be
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`amendable to suits unrelated to that activity.’ Rather, a corporation’s ‘affiliations with the State’
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`must be ‘so continuous and systematic’ as to render it essentially at home in the forum State.”
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`Mali v. British Airways, 2018 WL 3329858, at *5 (S.D.N.Y., July 6, 2018) (quoting Goodyear
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`Dunlop Tires Ops. v. Brown, 564 U.S. 915, 919, 927 (2011). The Supreme Court has made clear
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`that, consistent with due process, a corporate defendant is subject to general jurisdiction only in
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`its (i) place of incorporation and (ii) principal place of business, unless (iii) the “exceptional
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`case” exists in which the foreign defendant’s contacts with the forum state is “so substantial and
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`of such a nature as to render the corporation ‘at home’ in” the forum state. SPV OSUS Ltd. v.
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`UBS AG, 114 F. Supp. 3d 161, 168 (S.D.N.Y. 2015), aff'd, 882 F.3d 333 (2d Cir. 2018) (quoting
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`Daimler AG v. Bauman, 571 U.S. 117, 134 S. Ct. 746, 761, n.19 (2014). If general jurisdiction
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`exists, courts in New York can adjudicate all claims against an individual or a corporation, even
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`those unrelated to its contacts with the state. Sonera Holding, 750 F.3d at 225.
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`B.
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`Specific Jurisdiction
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`Specific jurisdiction in New York is governed by CPLR § 302. The existence of specific
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`jurisdiction “depends on an affiliation between the forum [state] and the underlying controversy,
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`principally, activity or an occurrence that takes place in the forum State and is therefore subject
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`to the State's regulation.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919
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`(2011) (internal quotation marks and citations omitted); see Powell v. Monarch Recovery
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`Management, Inc., 2016 WL 8711210, at *6 (E.D.N.Y. 2016) (New York’s long-arm statute
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`requires that the claim asserted arise from the activity asserted). New York’s “long-arm” statute,
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`allows for specific jurisdiction over non-domiciliaries “ who, in person or through an agent . . .
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`(i) transacts business within the state or contracts anywhere to supply goods or services in the
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`state, (ii) commits a tortious act within the state . . . [or] (iii) commits a tortious act without the
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`state causing injury to person or property within the state . . .” if the claim arises from those
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`transactions. N.Y. CPLR ¶ 302.
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`III.
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`The Parties’ Contentions.
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`In their opening memorandum, Defendants first argue that general jurisdiction does not
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`exist as Star is not incorporated in New York and does not maintain its principal place of
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`business here. Further, general jurisdiction does not exist over Desai as he is domiciled in
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`Georgia, was not served in New York and has not consented to jurisdiction here. Turning to
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`specific jurisdiction, Defendants point out that there are no allegations in the complaint that any
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`of the acts with respect to the “Knock-off Products” occurred in New York, i.e. that they were
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`sold, advertised or offered in New York or to any New York resident.
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`In response, Plaintiff’s limit their jurisdictional argument to specific jurisdiction under
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`N.Y. CPLR 302(a)(3)(iii) which, in relevant part, provides for personal jurisdiction over a person
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`who “commits a tortious act without the state causing injury to person or property within the
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`state . . . .” Relying pricipally upon the decision in Penguin Group (USA) Inc. v. Am. Buddha,16
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`N.Y.3d 295 (2011), they argue that the situs of the injury in this case is New York as Star
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`“retrieved the images of the Ring and the [Pendent] from Adwar’s website and digitally down
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`loaded them to Star’s computer,” reproduced the Artwork, “and publicly displayed such images
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`on its Facebook page which is linked to its website offering its customers the ability to freely
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`access such works.” (Pl.’s Opp. Mem. at 9-10). It further maintains that Defendants waived any
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`object to personal jurisdiction in New York when it retrieved the images from Adwar’s website,
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`which has a condition of use that the user consents to the exclusive jurisdiction of federal and
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`states court in New York. (Id. at 13-16.)1
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`In reply, Defendants argue that Plaintiff’s jurisdictional argument is not grounded in the
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`allegations in the complaint and, in any event, the new claim does not support the exercise of
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`personal jurisdiction. (Defs.’ Reply at 1-7.) In addition, they cannot be deemed to have consented
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`to jurisdiction in New York as the terms in the website are unenforceable under controlling New
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`York law. (Id. at 8-10.)
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`By way of format, the Court will first address whether the allegations in the complaint are
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`sufficient to support specific jurisdiction pursuant to CPLR 302(a)(3)(iii), the sole basis relied
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`upon by Plaintiff. Specifically, whether the situs of the injury is this case is in New York.2 It will
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`then address whether Plaintiff’s “new” theory supports specific jurisdiction under the foregoing
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`CPLR provision. Finally, it will address the issue of consent to jurisdiction.
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`IV.
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`Plaintiff has not Demonstrated that Specific Jurisdiction
`Exists over Defendants for the Claims Asserted in the Complaint
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`As set forth in the complaint, the present controversy arises from Defendants’
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`alleged marketing and selling jewelry products using Plaintiff’s copyrighted designs.
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`(Comp. ¶ 12.) Absent from the complaint are any allegations that sales causing injury
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`occurred in New York. Rather the complaint merely alleges that Plaintiff, based in New
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`York, “lost income and continues to lose income relating to” the alleged infringement.
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`(Comp. ¶ 18.) However, that a New York plaintiff may have lost income does not
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`1 Plaintiff also asserts that venue is proper in New York. However, other than a stray comment regarding a
`“conclusory venue allegation” (see Defs.’ Mem. at 2), Defendant motion is not premised on improper venue and
`therefore the Court will not address the issue.
`2 Although Plaintiff has offered evidence as to the other requirement for the exercise of jurisdiction pursuant to 
`CPLR 302(a)(3), viz. subsections (i) and (ii) (see, e.g., Adwar Decl. ¶¶ 4,5, 10), neither party addresses these 
`subsections in their memoranda and therefore neither shall the Court. 
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`Case 2:17-cv-06278-DRH-SIL Document 29 Filed 10/18/18 Page 8 of 13 PageID #: 255
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`constitute “injury to person or property within the state.” See Troma Entm’t Inc.
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`Centennial Pictures Inc., 729 F.3d 215, 218 (2d Cir. 2013) (upholding dismissal of New
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`York based motion picture producer’s copyright infringement claim for lack of personal
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`jurisdiction and stating: “It is well settled that ‘residence or domicile of the injured party
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`within [New York] is not sufficient predicate for jurisdiction’ under section 302(a)(3).)
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`(quoting Fantis Foods, Inc. v. Standard Importing Co., 49 N.Y.2d 317, 236 (1980));
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`accord Verragio, Ltd. v. Malakan Diamond Co., 2016 WL 6561384 (S.D.N.Y. Oct. 20,
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`2016).
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`Indeed, it would appear that Plaintiff does not contest the foregoing inasmuch as
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`in opposing the current motion it has “reformulated” its copyright claim. It is to the
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`question of whether jurisdiction exists under this reformulated claim that the Court now
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`turns.
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`V.
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`Specific Jurisdiction Does Not Exist for
`Plaintiff’s Reformulated Copyright Claim
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`In an apparent attempt to bring its copyright claim within the holding of Penguin
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`Group, Plaintiff’s opposition papers recast their copyright claim. Although not contained
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`in its pleading, it is now alleged that Star “retrieved the images” of the two products at
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`issue “from Adwar’s website and digitally downloaded them to its computer.” It then
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`“reproduced the Artwork, derivative versions of the Artwork, and publicly displayed such
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`images on its Facebook page which is linked to its website.” (Pl.’s Opp. Mem. at 4.) In
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`support of this position it is claimed that “Adwar has been and continues to be damaged
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`as a result of customers and potential customers of Adwar being encouraged by Star
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`Gems to download Adwar’s original jewelry designs from Adwar’s catalog and Star
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`Gems’ system to produce unauthorized products using such works.” (Adwar Declar. ¶
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`11.) For the reasons set forth below, the Court holds that personal jurisdiction does not
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`exist under this recast theory of liability.
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`In Penguin Group, the Second Circuit certified the following question to the New
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`York Court of Appeals: “In copyright infringement cases, is the situs of injury for
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`purposes of determining long-arm jurisdiction under N.Y.C.P.L.R. § 302(a)(3)(ii) the
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`location of the infringing action or the residence or location of the principal place of
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`business of the copyright holder?” 609 F.3d 30, 32 (2d Cir. 2001). The New York Court
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`of Appeals, however, “narrow[ed] and reformulate[d] the certified question to read: ‘In
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`copyright infringement cases involving the uploading of a copyrighted printed literary
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`work onto the Internet, is the situs of injury for purposes of determining long-arm
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`jurisdiction under N.Y. C.P.L.R. § 302(a)(3)(ii) the location of the infringing action or
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`the residence or location of the principal place of business of the copyright holder?’” 16
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`N.Y.3d 295, 301-02 (2011). “In answer to this reformulated question and under the
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`circumstance of [the] case,” the New York Court of Appeals concluded “it is the location
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`of the copyright holder.” Id. at 302.
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`In reaching this result, the court was persuaded that the convergence of two
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`factors -- the role of the internet in the case and the multifaceted nature of rights granted
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`to copyright holders -- persuaded it that the injury is in-state when a printed literary work
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`is uploaded without permission onto the Internet for public access:
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`[T]he role of the Internet in cases alleging that the uploading of
`copyrighted books distinguishes them from traditional commercial tort
`cases where courts generally link the injury to the place where the sales or
`customers are lost. The location of the infringement in online cases is of
`little import inasmuch as the primary aim of the infringer is to make the
`works available to anyone with access to an Internet connection, including
`computer users in New York. In addition, the injury to a New York
`copyright holder, while difficult to quantify, is not as remote as a purely
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`indirect financial loss due to the broad spectrum of rights accorded by
`copyright law. The concurrence of these two elements – the function and
`nature of the Internet and the diverse ownership rights employed by
`copyright holders situated in New York – leads us to view this case as
`closer to Sybron than Fantis Foods. Thus, we conclude that the alleged
`injury in this case occurred in New York for purposes of CPLR
`302(a)(3)(ii).
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`16 N.Y.3d at 306-07. However, the New York Court of Appeals explicitly declined “to
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`address whether New York copyright holder sustains an in-state injury pursuant to CPLR
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`302(a)(3)(ii) in a copyright infringement case that does not allege digital piracy.” Id. at
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`307.
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`Subsequent to Penguin Group, the Second Circuit in Troma Entertainment, Inc. v.
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`Centennial Pictures, Inc., 729 F.3d 215 (2d Cir. 2013), upheld the dismissal for lack of
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`personal jurisdiction under N.Y.C.P.L.R. § 301(a)(3) of a New York Plaintiff’s copyright
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`infringement action against two non-New York domiciliaries. These two individuals
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`entered into an agreement to broadcast two films in Germany without first acquiring a
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`license from the New York copyright holders. The Troma court began its analysis with
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`the “well-settled” principle that “residence or domicile of the injured party within New
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`York is not a sufficient predicate for jurisdiction under section 302(a)(3).” Id. at 218.
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`Continuing, the court found that Penguin was not controlling. First, it was possible to
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`“circumscribe” the alleged injury to a particular location and therefore the case was
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`“more like the traditional commercial tort cases in which the place where plaintiff’s
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`business is lost or threatened exerts a significant gravitational influence on the
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`jurisdictional analysis.” Id. at 220. With respect to the “theory that out-of-state-
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`infringement may harm the bundle of rights held” by the New York copyright holder, it
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`found “it was just a theory” and did not “relieve[] intellectual property owners of the
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`obligation in each case to allege facts demonstrating a non speculative and direct New
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`York based injury to its intellectual property rights.” Id. Applying the foregoing it
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`concluded that plaintiff’s allegations that the broadcasting of unlicensed copyrighted
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`material in Germany caused only a generalized harm to its exclusive distribution right
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`and was too speculative to support an injury suffered in New York within the meaning of
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`CPLR 302(a0(3). Id.
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`Here, there is no “non-speculative and direct New York based injury” to
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`Plaintiff’s intellectual property. The conclusory allegations as to the loss of its rights as a
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`copyright holder are similar to the allegations rejected by the Troma court. That the
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`images at issue were allegedly uploaded to the internet does not warrant a finding of in-
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`state injury under Penguin Group as this case does not involve the type of digital piracy
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`at issue therein.3 See Freeplay Music LLC v. Dave Arbogast Buick-GMS, Inc., 2017 WL
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`449913 (S.D.N.Y. Jan. 18, 2017.)4 This case does not involve a literary work posted on
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`the internet and freely downloadable by anyone with a computer. Indeed, there is nothing
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`to support that the allegedly offending image on Star’s facebook page is downloadable.
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`To paraphrase the Arbogast court, “to hold that the posting of copyrighted material to the
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`Internet for any purpose, such a posting a copyrighted photo to Instagram or Facebook –
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`would automatically cause an in-state injury to a New York copyright holder” is a broad
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`result not intended by the New York Court of Appeals.
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`3 The evidence in this case shows only one allegedly infringing work on the internet (via Facebook) by Defendants.
`Plaintiff’s claim that this encourages other members of the public to download Adwar’s original jewelry designs is
`specious. 
`4 The Court is aware that there are cases which have held that the situs of injury for purposes of § 302(a) is the
`location of the copyright owner when copyrighted material is uploaded to the internet. E.g. Internat’l Diamond
`Importers, Inc. v. Med Art, Inc., 2017 WL 2839640 (S.D.N.Y. 2017). In this Court’s view such an expansive view is
`not supported by the New York Court of Appeals decision in Penguin Group given its narrowing of the certified
`question and in view of the Second Circuit’s decision in Troma. 
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`VI. Defendants Did Not Consent to Jurisdiction
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`In support of it claim for in personam jurisdiction, Adwar argues that by accessing
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`Adwar’s website, Star became bound by its terms of use which prohibits the use of
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`materials on the site without its consent and purports to confer “exclusive jurisdiction of
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`federal and/or state court located in New York to enforce this Agreement or for any other
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`purpose in connection with this website . . . .” (Adwar Decl. ¶7, Ex. E) These terms and
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`conditions are referenced on the bottom of every page of the website, in a category called
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`“Information” and appear underneath links to the “help” page and the “Careers at Adwar”
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`page. These terms and conditions are retrieved by clicking on “Terms and Conditions.”
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`In Berkson v. Gogo LLC, 97 F. Supp. 3d 359 (E.D.N.Y.) Judge Weinstein
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`formulated a test to determine the enforceability of electronic adhesion contracts, “which
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`test has been favorably cited and applied by federal and state trial courts.” Starke v.
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`Squaretrade Inc., 2017 WL 3328236 (E.D.N.Y. Aug. 3, 2017) (citing cases). Under that
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`test if “the importance of the details of the contract [were] obscured or minimized by the
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`manifestation of assent expected” or “if the user’s attention was not clearly drawn to
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`material terms that would alter what a reasonable user would understand her default
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`rights, the terms should not be enforced.” Berkson, 97 F. Supp. 3d at 402.
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`Here, the mere use of the website was considered assent to the terms and
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`conditions of use. Absent is any requirement of affirmative assent, such as the checking
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`of a box that the user is agreeing to the terms and conditions. Additionally, the user’s
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`attention was not drawn to the referenced provision by either a change in font or type size
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`or other mechanism such as “***.” In view of the foregoing, the alleged consent is not
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`enforceable against Defendants.
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`VII. The Request to Amend the Complaint is Denied.
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`On the day that Defendants filed their reply, Plaintiff filed a letter requesting that
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`it be allowed to amend its complaint, stating “[w]hile Plaintiff believes in good faith that
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`its declaration (including exhibits) . . . combined with the current complaint raises the
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`necessary allegations to demonstrate personal jurisdiction over Defendants, should the
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`court believe that Plaintiff needs to supplement the facts in its complaint regarding such
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`matter, Plaintiff is prepared to do so consistent with its declaration and its present
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`pleadings.” (DE 27.) Given the Court’s conclusion that the complaint and declarations do
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`not demonstrate personal jurisdiction and the absence of a proffer of any additional
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`information by the Plaintiff, the request is denied.
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`CONCLUSION
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`For the reasons set forth above, Defendants’ motion pursuant to Fed. R. Civ. P. 12(b)(2)
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`to dismiss the complaint for lack of personal jurisdiction is granted.
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`Dated: Central Islip, New York
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`October 18, 2018
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` s/ Denis R. Hurley
`Denis R. Hurley
`United States District Judge
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`Page 13 of 13 
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