Case 1:12-cv-01343-KPF-DCF Document 59 Filed 03/26/13 Page 1 of 14
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`---------------------------------------------------------------){
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`ACCURATE GRADING QUALITY
`ASSURANCE, INC. and ELECTRONIC
`SALES DEALER NETWORK, INC.,
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`~SI>C SDNY
`1 :GOCUf,lENT
`I
`.
`I S LECT :l.0 1:ICALI .. Y FILED
`I DOC#:. _ __ =----- -
`ih~~~-~~_:~~~!:~~~-~~-
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`Plaintiffs,
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`12 Civ. 1343 (ALC)
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`-against-
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`OPINION AND ORDER
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`JOHN THORPE AND KGK JEWELRY LLC,
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`Defendants.
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`---------------------------------------------------------------){
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`ANDREW L. CARTER, United States District Judge:
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`Defendant John Thorpe ("Thorpe") seeks to dismiss the complaint for lack of personal
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`jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) (Dkts. No. 30, 42). Defendant KGK Jewelry
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`('-'KGK") and Thorpe (collectively, "Defendants") additionally seek dismissal of the complaint
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`for failure to state a claim under Fed. R. Civ. P. 12(b)(6) and, in the alternative, move to strike
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`certain allegations incorporated into the Amended Complaint, pursuant to Fed. R. Civ. P. 12(f)
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`(Dkt. No. 52). For the reasons below, Thorpe's first motion to dismiss for lack of personal
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`jurisdiction is denied as moot and Thorpe's renewed motion to dismiss is denied. Defendants'
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`motion to dismiss under 12(b )( 6) is granted in part.
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`BACKGROUND
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`Plaintiffs Accurate Grading Quality Assurance, Inc. ("Accurate Grading") and Electronic
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`Sales Dealer Network, Inc. ("ESDN") (together, "Plaintiffs") brought suit against Defendants
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`alleging copyright infringement and a myriad of related state-law claims. Plaintiffs provide
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`Internet-based marketing for the jewelry industry. Thorpe, a former employee of Accurate
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`1
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`Case 1:12-cv-01343-KPF-DCF Document 59 Filed 03/26/13 Page 2 of 14
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`Grading and a continued shareholder ofESDN, is individually alleged to have breached his
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`contract and fiduciary duty for sharing trade secrets with Plaintiffs' former client, KGK. Thorpe
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`is a resident of Missouri. Plaintiffs also allege intentional interference of contract against KGK
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`and allege copyright infringement, misappropriation oftrade secrets, unfair competition, and
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`unjust enrichment against both Defendants.
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`Defendants' motion for dismissal pursuant to 12(b)(6) is unopposed. 1 Thorpe's motion
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`for dismissal for lack of personal jurisdiction is partially opposed. I will review the 12(b )(2)
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`motion first. Arrowsmith v. United Press lnt'l, 320 F.2d 219,221 (2d Cir. 1963) ("Not only does
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`logic compel initial consideration of the issue of jurisdiction over the defendant-a court without
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`such jurisdiction lacks power to dismiss a complaint for failure to state a claim-but the
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`functional difference that flows from the ground selected for dismissal likewise compels
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`considering jurisdiction and venue questions first."); Phoenix-Dolezal v. Lili Ni, No. 11 Civ.
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`3722(LAK)(JLC), 2012 WL 121105, at *4 (S.D.N.Y. Jan. 17, 2012) (Report and
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`Recommendation). This is also prudent as the motions have different consequences for a
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`litigant, for instance, the plaintiff's ability tore-file a claim. Arrowsmith, 320 F.2d at 221 ("A
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`dismissal for lack of jurisdiction or improper venue does not preclude a subsequent action in an
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`1 It is true that Plaintiffs did file a motion in opposition to Defendants' motion (Dkt. No. 55).
`However, this filing is filing is the same as a previous submission in form and substance,
`namely, Plaintiffs' Opposition to Thorpe's Renewed Motion to Dismiss the Amended Complaint
`for Lack of Subject Matter Jurisdiction. (Dkt. No. 46). On July 30,2012, this court ordered any
`opposition to Defendant's 12(b )( 6)/ 12(f) Motion be filed by August 31. At a status conference
`on September 7, this Court gave Plaintiff an on-the-record extension until September 14 to file
`an opposition. At no point has the Court received any requests tore-file, not that the request,
`given this Court's on-the-record extension of a past-due motion, would be granted. Thus, the
`motion is unopposed.
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`2
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`Case 1:12-cv-01343-KPF-DCF Document 59 Filed 03/26/13 Page 3 of 14
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`appropriate forum, whereas a dismissal for failure to state a claim upon which relief can be
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`granted is with prejudice.")
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`I. Motion for Lack of Personal Jurisdiction (Dkt. No. 42)
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`DISCUSSION
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`It is undisputed that Thorpe is a Missouri resident. As its basis for personal jurisdiction
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`over Thorpe for this action in New York, Plaintiffs argue that Thorpe attended four meetings in
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`New York. The first meeting was in August 2011, when Thorpe while still an Accurate Grading
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`employee, visited KGK, Plaintiffs' client, "to provide the KGK developers with in-person
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`instructions and guidance" on linking to Plaintiffs' databases. (Yeko Decl. ~ 40). Thorpe also
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`visited New York twice in December 2011 and once in February 2012 to attend meetings in
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`conjunction with KGK's bids for a new jewelry venture with a Danish jewelry executive
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`("Newco venture") (Am. Compl. ~ 35(j); Dkt. No. 25, Thorpe Decl. ~ 61). Plaintiffs also claim
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`an agency relationship exists between KGK and Thorpe because Thorpe acted in concert with
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`KGK, a New York entity.
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`On a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(2), the plaintiff bears the burden
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`of establishing jurisdiction. In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir.
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`2003). In the absence of jurisdictional discovery, "allegations of jurisdictional fact must be
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`construed in the light most favorable to the plaintiff." National Union Fire Ins. Co. of
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`Pittsburgh, PA. v. BP Amoco P.L.C., 319 F. Supp. 2d 352,357 (S.D.N.Y. 2004) (citing CutCo
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`Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir.1986). Thus, "[ w ]here, as here, a court relies
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`on pleadings and affidavits," Wickers Sportswear, Inc. v. Gentry Mills, Inc., 411 F. Supp. 2d 202,
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`205 (E.D.N.Y. 2006), the complaint need "only allege facts constituting a prima facie showing of
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`personal jurisdiction." National Union, 319 F. Supp. 2d at 357 (citation omitted)). The Court,
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`however, "will not draw ' argumentative inferences' in the plaintiffs favor" and need not "accept
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`as true a legal conclusion couched as factual allegation. Licci ex rel. Licci v. Lebanese Canadian
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`Bank, SAL, 673 F.3d 50, 59 (2d Cir. 2012) (internal citations omitted).
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`Absent a statutory provision allowing for nationwide jurisdiction, where a defendant
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`resides outside the forum state, a federal court applies the forum state's personal jurisdiction
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`rules. P DK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997). A New York court
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`may exercise personal jurisdiction over an out-of-state defendant if "New York law would confer
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`upon its courts the jurisdiction to reach the defendant" and, so finding, if "extension of
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`jurisdiction is permissible under the Due Process Clause of the Fourteenth Amendment. Bank
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`Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2003).
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`To establish personal jurisdiction over a defendant under New York law, a plaintiff must
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`"demonstrate either that the defendant was 'present' and 'doing business' in New York within
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`the meaning of [CPLR] § 301 , or that the defendant committed acts within the scope of New
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`York's long-arm statute, [CPLR] § 302." Schultz v. Safra Nat. Bank of New York, 377 Fed.
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`Appx. 101, 102 (2d Cir. 2010). Plaintiffs have not opposed Thorpe's argument that general
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`jurisdiction does not exist under CPLR § 301 . The Court finds that general jurisdiction under
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`CPLR § 301 has not been established since there is no indication that Thorpe is engaged in a
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`continuous or systematic course of doing business in New York. A. WL.l. Group, Inc. v. Amber
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`Freight Shipping Lines, 828 F. Supp. 2d 557, 564 (E.D.N.Y. 2011). Only the arguments for
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`jurisdiction under CPLR § 302(a)(l)-(3) need be addressed?
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`2 CPLR § 302(a) states in relevant part:
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`As to a cause of action arising from any of the acts enumerated in this section, a court may
`exercise personal jurisdiction over any non-domiciliary ... who in person or through an agent:
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`CPLR § 302 is New York's "long-arm" statute permitting jurisdiction over an out-of-
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`state defendant. It is axiomatic that Section 302(a) provides only specific jurisdiction" over a
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`non-domiciliary defendant arising out of particular acts. Roe v. Arnold, 502 F. Supp. 2d 346, 350
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`(E.D.N.Y. 2007).
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`As an initial matter, Thorpe's first Motion to Dismiss for Lack of Personal Jurisdiction
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`(Dkt. No. 30) is denied as moot in light of Thorpe's Renewed Motion to Dismiss for Lack of
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`Personal Jurisdiction (Dkt. No. 42).
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`Agency Jurisdiction
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`Plaintiffs contend that this Court has personal jurisdiction over Thorpe "through an
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`agent" under any of the provisions of§ 302 because Thorpe acted in concert with KGK, an
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`undisputed New York entity. However, to claim an agency relationship sufficient under § 302,
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`plaintiffs must allege an agency relationship. Even though courts look to the "realities of the
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`relationship" rather than formal principles of agency law, "[t]o be considered an agent for
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`jurisdictional purposes, the alleged agent must have acted in the state for the benefit of, and with
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`1. transacts any business within the state or contracts anywhere to supply goods or services in the
`state; or
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`2. commits a tortious act within the state, except as to a cause of action for defamation of
`character arising from the act; or
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`3. commits a tortious act without the state causing injury to person or property within the state,
`except as to a cause of action for defamation of character arising from the act, if he
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`(i) regularly does or solicits business, or engages in any other persistent course of conduct, or
`derives substantial revenue from goods used or consumed or services rendered, in the state, or
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`(ii) expects or should reasonably expect the act to have consequences in the state and derives
`substantial revenue from interstate or international commerce ...
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`CPLR § 302 (emphasis added)
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`Case 1:12-cv-01343-KPF-DCF Document 59 Filed 03/26/13 Page 6 of 14
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`the knowledge and consent of the non-resident principal." CutCo Industries, Inc. v. Naughton,
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`806 F.2d 361,366 (2d Cir. 1986) (internal quotations and citations omitted).
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`At a minimum, agency requires the defendant's agent took actions in New York or
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`transacted business in New York for the benefit of the defendant. See Kreutter v. McFadden Oil
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`Corp., 71 N.Y.2d 460, 466 (N.Y. 1988). Thus, in this case, KGK-
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`the New York entity-would
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`have to be acting for Thorpe's benefit. But Plaintiffs do not adequately allege such a
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`relationship. Rather, they alleged Thorpe's "grudging" involvement to provide services to KGK.
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`To the extent they connect KGK and Thorpe, Thorpe would be deemed the agent, not KGK.
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`Plaintiffs' alternate concerted action theory-that Thorpe "acted in conjunction" with KGK-is
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`similarly fruitless.
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`While "[t]he acts of a co-conspirator may . .. be attributed to a defendant for the purpose
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`of obtaining personal jurisdiction over that defendant, the bland assertion of conspiracy ... is
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`insufficient to establish jurisdiction for the purposes of§ 302(a)(2)." Drucker Cornell v.
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`Assicurazioni Generali S.p.A. Consolidated, No. 97 CIV. 2262(MBM), 98 CIV. 9186(MBM),
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`2000 WL 284222, 5 (S.D.N.Y. Mar. 16, 2000) (internal citations omitted); Laborers Local I 7
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`Health and Ben. Fund v. Philip Morris, Inc., 26 F.Supp.2d 593, 601 (S.D.N.Y. 1998) ("Before
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`jurisdiction based on a conspiracy can be upheld under New York law, ... the plaintiff must
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`allege both a prima facie case of conspiracy and allege specific facts warranting the inference
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`that the defendants were members of the conspiracy.") Plaintiffs have not pled a prima facie
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`conspiracy claim and the vague allegations are not sufficient to establish personal jurisdiction
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`over Thorpe through KGK.
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`Analysis Under§ 302(a)
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`Plaintiffs' clearest path to an assertion of personal jurisdiction is under 302(a)(l ). "To
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`establish personal jurisdiction under section 302(a)(1), two requirements must be met: (1) The
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`defendant must have transacted business within the state; and (2) the claim asserted must arise
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`from that business activity." Sole Resort, S.A. de C. V v. Allure Resorts Management, LLC, 450
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`F.3d 100, 103 (2d Cir. 2006) (citing McGowan v. Smith, 52 N.Y.2d 268,273,437 N.Y.S.2d 643,
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`419 N.E.2d 321 (1981)). A claim "aris[es] from" a particular transaction when there is "some
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`articulable nexus between the business transacted and the cause of action sued upon," McGowan,
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`52 N.Y.2d at 272,437 N.Y.S.2d 643,419 N.E.2d 321, or when "there is a substantial
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`relationship between the transaction and the claim asserted," Kreutter v. McFadden Oil Corp., 71
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`N.Y.2d 460,467, 527 N.Y.S.2d 195, 522 N.E.2d 40 (1988). !d. (internal citations omitted).
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`No one particular act will necessarily determine the existence of a transaction within the
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`scope of the statute, a defendant's New York activities. Fischbarg v. Doucet, 9 N.Y.3d 375, 380,
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`849 N.Y.S.2d 501, 505, 880 N.E.2d 22, 26 (N.Y. 2007) (primary consideration is "quality of the
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`defendants' New York contacts"). The transaction, at minimum, must be a purposeful act by
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`which the defendant avails itself of the benefits and protections ofNew York's laws. !d.
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`Here, Thorpe attended the August 2011 meeting on behalf of Plaintiffs. It would be
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`unjust to call his presence in New York purposeful when he was there precisely at Plaintiffs'
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`behest. The Newco meetings are another story. While Thorpe downplays the significance,
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`Plaintiffs allege that in advance of these meetings, Yeko shared his "playbook" with the Newco
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`participants, which includes Plaintiffs' alleged confidential and proprietary information. (See
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`Yeko Decl. ~~ 100-114). Unlike the August 2011 meeting on behalf of Plaintiffs, the December
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`Newco meetings reflect a purposeful act to be present in New York. At this stage, we only have
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`to establish whether Plaintiffs have adequately alleged jurisdiction not whether the underlying
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`torts were committed. It is oflittle moment that the Newco venture was ultimately a failed one
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`which did not end in a business transaction or contract. Cavu Releasing, LLC. v. Fries, 419
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`F.Supp.2d 388, 393 (S.D.N.Y. 2005) ("Even though the negotiations did not result in an
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`executed contract, it is well settled that contract negotiations in New York will satisfy Section
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`302(a)(l) 'if the discussions substantially advanced or were essential to the formation ofthe
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`contract or advanced the business relationship to a more solid level."') (citations omitted). The
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`fact that Thorpe came to New York three times over a three-month period to engage in
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`discussions about the Newco venture shows that he hoped to advance the business relationship.
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`Indeed, as Plaintiffs allege, part of Thorpe' s rationale in working with KGK was to explore
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`possible new ventures, including Newco. (Am. Compl. ~ 35(h)). Thus, Thorpe intended to avail
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`himselfof the benefits and protections ofNew York's laws." Plaintiffs' allegations about the
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`Newco meetings in New York have a substantial relationship to the claims asserted by Plaintiffs.
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`Thus, jurisdiction is possible under § 302(a)(l ).
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`Due Process
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`Having determined that the New York long-arm statute would extend the state's
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`jurisdiction over the defendant in this case, the next issue is whether the exercise of this
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`jurisdiction comports with federal due process. To do so, we undertake an analysis consisting of
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`two components: the "minimum contacts" test and the "reasonableness" inquiry. Bank Brussels
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`Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 127 (2d Cir. 2002) (citing Metro. Life
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`Ins. Co. v. Robertson-Ceca Corp., 84 F.3d 560, 567 (2d Cir.1996)).
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`The required minimum contacts are met where the defendant "purposefully availed"
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`itself of the privilege of doing business in the forum and could foresee being "haled into court"
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`there. US. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., Ltd., 241 F.3d 135, 152 (2d Cir.
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`2001) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462,475, 105 S.Ct. 2174, 85 L.Ed.2d
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`528 (1985); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62
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`L.Ed.2d 490 ( 1980)). A court must then determine whether the assertion of personal jurisdiction
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`"comports with 'traditional notions of fair play and substantial justice"-that is, whether it is
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`reasonable under the circumstances of a particular case." US. Titan, 241 F.3d at 152.
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`Whether it is "reasonable" to exercise jurisdiction in a particular case depends on "(1) the
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`burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the
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`forum state in adjudicating the case; (3) the plaintiffs interest in obtaining convenient and
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`effective relief; ( 4) the interstate judicial system's interest in obtaining the most efficient
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`resolution of the controversy; and (5) the shared interest ofthe states in furthering substantive
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`social policies." !d. at 152 (citation omitted). The import of the "reasonableness" inquiry varies
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`inversely with the strength ofthe "minimum contacts" showing-a strong (or weak) showing by
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`the plaintiff on "minimum contacts" reduces (or increases) the weight given to "reasonableness."
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`Bank Brussels, 305 F.3d at 129 (citation omitted).
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`Thorpe purposefully availed himself of the New York market when he came for three
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`Newco meetings, obviously with the hope that the plans would succeed and the venture would go
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`forward . The fact that the venture was ultimately unsuccessful does not change the fact that he
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`purposely availed himself with the preparations and negotiations in New York. Given that a
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`cross-national venture was being negotiated in New York, Thorpe should have known that he
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`could be haled into court there if the proposed venture had ended less than amicably. Thus,
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`Thorpe had minimum contacts in New York.
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`The reasonableness factors are also satisfied. Given his frequent visits to New York in a
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`three-month period, it cannot be said that there would be a serious burden on Thorpe to attend to
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`Case 1:12-cv-01343-KPF-DCF Document 59 Filed 03/26/13 Page 10 of 14
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`proceedings here. The desire to prevent infringement of any statutory and common-law rights
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`furthers substantial social policies. The fact that there is another defendant who is under
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`jurisdiction in New York will assist in the most efficient resolution of this case in the same
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`forum. While the interests ofNew York state are not well-established at this time, given that the
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`Newco venture never materialized and Plaintiffs' economic losses here are speculative, perhaps
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`with the assistance of jurisdictional discovery there will be a showing of a significant interest.
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`On balance, I find that the exercise of jurisdiction over Thorpe reasonable at this time.
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`I. Motion to Dismiss Amended Complaint & Motion to Strike (Dkt. No. 52)
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`An unopposed motion to dismiss a complaint for failure to state a claim does not merit
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`automatic dismissal. In such a situation, "the sufficiency of a complaint is a matter of law that
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`the court is capable of determining based on its own reading of the pleading and knowledge of
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`the law." McCall v. Pataki, 232 F.3d 321, 322-323 (2d Cir. 2000). As with all Rule 12(b)(6)
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`motions, on an unopposed motion to dismiss, a court is to "assume the truth of a pleading' s
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`factual allegations and test only its legal sufficiency." I d. at 322. If a complaint is sufficient to
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`state a claim on which relief can be granted on its face, the plaintiffs failure to respond to a Rule
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`12(b)(6) motion does not wanant dismissal. Id. at 323.
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`Standard of Review
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`To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a claim must contain
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`"sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its
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`face."' Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting
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`Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim has facial plausibility "when the
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`plaintiff pleads factual content that allows the Court to draw the reasonable inference that the
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`defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.
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`"In considering a motion to dismiss, the Court may consider documents attached as an
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`exhibit thereto or incorporated by reference, documents that are " integral" to plaintiffs claims,
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`even if not explicitly incorporated by reference, and matters of which judicial notice may be
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`taken. Thomas v. Westchester County Health Care Corp., 232 F. Supp. 2d 273, 275 (S.D.N.Y.
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`2002) (internal citations omitted). To incorporate a document by reference, "the Complaint must
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`make a clear, definite and substantial reference to the document[]." !d. at 275-76 (S.D.N.Y.
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`2002). Moreover, "when a plaintiff chooses not to attach to the complaint or incorporate by
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`reference a [document] upon which it solely relies and which is integral to the complaint, the
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`defendant may produce [the document] when attacking the complaint for its fai lure to state a
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`claim, because plaintiff should not so easily be allowed to escape the consequences of its own
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`failure." Cartee Industries, Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir. 1991);
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`Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (on a motion to dismiss, a
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`court may consider "documents attached to the complaint as an exhibit or incorporated in it by
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`reference, ... matters of which judicial notice may be taken, or ... documents either in plaintiffs'
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`possession or of which plaintiffs had knowledge and relied on in bringing suit."). Notably, a
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`plaintiffs reliance on the terms and effect of a document in drafting the complaint is a necessary
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`prerequisite to the court's consideration of the document on a dismissal motion; mere notice or
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`possession is not enough. !d.
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`Plaintiffs' Amended Complaint relies heavily on declarations from John Thorpe (Dkt.
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`No. 25) and Allan Bloom (Dkt. No. 26), submitted in support of Defendants' Opposition to
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`Preliminary Injunction (see Am. Compl. ~~ 35(a)-(j), 36(a)-(d)). In his declaration, however,
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`Thorpe also denies copying any aspect ofESDN' s system, including images, in the creation of
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`Case 1:12-cv-01343-KPF-DCF Document 59 Filed 03/26/13 Page 12 of 14
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`his cloud-based kiosk system. (Dkt. No. 25 ~~ 50-53). Furthermore, Bloom avers that the
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`images were the property of KGK. (Dkt. No. 26 ~~ 39-40).
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`While Plaintiffs have stopped short of incorporating these documents by reference, the
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`Amended Complaint in fact summarizes the very paragraphs that contradict Plaintiffs'
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`allegations. Compare Am. Compl. ~ 35(i) with Dkt. No. 25 ~~ 50-53 . Furthermore, these
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`declarations were filed on this case docket prior to the filing of Plaintiffs' amended complaint
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`and then paraphrased therein. Thus, consideration of these declarations, on a Rule 12(b )( 6)
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`motion, in their entirety is proper. See Cartee, 949 F.2d at 48 ("A finding that plaintiff has had
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`notice of documents used by defendant in a 12(b)(6) motion is significant since .. . the problem
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`that arises when a court reviews statements extraneous to a complaint generally is the lack of
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`notice to the plaintiffthat they may be so considered.") The issue of notice is a "significant one"
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`because " [w]here plaintiff has actual notice of all the information in the movant's papers and has
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`relied upon these documents in framing the complaint the necessity oftranslating a Rule 12(b)(6)
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`motion into one under Rule 56 is largely dissipated." ld.
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`Plaintiffs allege original federal jurisdiction over all of their claims pursuant to § 1331
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`(for copyright infringement) and pursuant to§ 1332 (for misappropriation oftrade secrets; unfair
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`competition, unjust enrichment, breach of contract, intentional interference with contract and
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`breach of fiduciary duty).
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`A. "Arising-Under" Jurisdiction Claim (28 U.S.C. § 1331): Copyright Infringement
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`Plaintiffs' complaint is insufficient as to their claim for copyright infringement. In
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`relevant part, the Copyright Act of 1976, 17 U.S.C. § 101 et seq., provides:
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`"[N]o civil action for infringement of the copyright in any United States work
`shall be instituted until preregistration or registration of the copyright claim has
`been made in accordance with this title. In any case, however, where the deposit,
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`application, and fee required for registration have been delivered to the Copyright
`Office in proper form and registration has been refused, the applicant is entitled to
`institute a civil action for infringement if notice thereof, with a copy of the
`complaint, is served on the Register of Copyrights . .. "
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`17 U.S.C. § 411(a)
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`While not a strictly jurisdictional requirement, section§ 411(a) nonetheless requires
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`copyright registration as a precondition to a copyright claims. Reed Elsevier, Inc. v.
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`Muchnick, 130 S.Ct. 1237, 1247 (2010). On the face ofthe complaint, Plaintiffs do not allege
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`existence of a valid copyright. They have likewise failed to allege that they have previously
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`sought registration and been denied. See id. at 1246 (noting that§ 411(a) allows courts to
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`adjudicate infringement claims involving unregistered works where the holder attempted to
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`register the work and registration was refused). Plaintiffs allege infringement of a "legally
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`protected image" or "legally protected information," but these phrases are nothing more than
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`self-serving and conclusory statements when they notably stop short of alleging that Plaintiffs
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`had copyright protection or had sought copyright protection and been refused at the time of the
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`complaint.
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`Even if these vague allegations were enough to allege copyright protection, such a
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`contention is belied by their acknowledgement in a previous submission to this Court that they
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`had "only recently applied for registration of the works at issue here." (Dkt. No. 14, at 10). An
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`inference of copyright registration is not reasonable when the Plaintiffs themselves have refuted
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`it. Furthermore, mere application is legally insufficient as ''[ c ]ourts in this Circuit. . . require[]
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`that a plaintiff either hold a valid copyright registration outright or have applied and been refused
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`a registration prior to filing a civil claim," thus "[a] pending application does not suffice."
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`Muench Photography, Inc. v. Houghton Mifflin Harcourt Pub. Co., No. 09 CV 2669, 2012 WL
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`13
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`

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`Case 1:12-cv-01343-KPF-DCF Document 59 Filed 03/26/13 Page 14 of 14
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`1021535, at *5 (S.D.N.Y. Mar. 6, 2012) (collecting cases). Thus, any pending application
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`cannot support their tenuous copyright claim, even if registration is later obtained. !d. at * 5
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`("registration requirement is a prerequisite to these civil claim" so subsequent registration is "of
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`no consequence") (emphasis in original). Because Plaintiffs' complaint does not adequately
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`allege that they have satisfied this "precondition to filing a claim," Reed Elsevier, 130 S.Ct. at
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`1247, their claim is necessarily barred and must be dismissed. Muench Photography, 2012 WL
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`1021535, at *5 ("It remains the law in this Circuit that§ 411(a) imposes a bar to copyright
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`infringement claims where a plaintiff has not either received or been denied a copyright
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`registration at the time such a claim is interposed.")
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`B. Diversity Jurisdiction Claims (28 U.S.C. § 1332)
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`Plaintiffs also claim diversity jurisdiction over their state-law claims. I consider each
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`claim in turn.
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`As discussed above, Plaintiffs reference the Thorpe and Bloom declarations in their
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`complaint. This finding is significant as to Plaintiffs' misappropriation of trade secrets, unfair
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`competition and breach of contract claims where the incorporated declarations contradict the
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`allegations necessary to state a claim.
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`A court need not feel constrained to accept as truth conflicting pleadings that make no
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`sense, or that would render a claim incoherent, or that are contradicted either by statements in the
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`complaint itself or by documents upon which its pleadings rely, or by facts of which the court
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`may take judicial notice. In re Livent, Inc. Noteholders Securities Litigation, 151 F. Supp. 2d
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`371,405-406 (S.D.N.Y. 2001) (collecting cases). Thus, when the facts alleged by the plaintiff
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`are "so contradictory that doubt is cast upon their plausibility," the court may "pierce the veil of
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`the complaint's factual allegations ... and dismiss the claim." Shabazz v. Pico, 994 F. Supp. 460,
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`14