Troma Entertainment, Inc. v. Robbins et al.
In a case involving de novo review of personal jurisdictions over the defendant, the U.S. Court of Appeals for the Second Circuit affirmed a district court dismissal of copyright infringement allegations for lack of jurisdiction, finding no injury in the jurisdiction where the copyright holder chose to file its action. Troma Entertainment, Inc. v. Robbins et al., Case No. 12-1883 (2d Cir., Sept. 6, 2013) (Sack, J.).
The action began as a business dispute between a producer and distributor of "spoof films" and its outside distribution/licensing specialists Lance H. Robbins and King Brett Lauter. Troma Entertainment, creator of the spoof films Citizen Toxie, Toxic Avenger Part IV and Poultrygeist: Night of the Chicken Dead, sought to license the film distribution rights. In October 2009, it authorized defendant Robbins to negotiate a distribution deal for the films in Germany. After 30 days of seemingly unsuccessful efforts to secure the desired license, Robbins's authorization lapsed. Troma Entertainment was of the impression that no agreements had been reached, yet it later came to light that Robbins had actually secured a distribution deal for the films with German distributor Intravest before he had authorization to do so. Unbeknownst to Troma Entertainment, instead of disseminating authorized copies of the spoof films, Robbins and co-defendant Lauter purchased German-language copies of the films on Amazon.com, sent Intravest those unauthorized copies for distribution and kept the proceeds of the arrangement with Intravest.
Upon learning that Robbins and Lauter had exceeded the scope of their authority—and that the unauthorized actions resulted in Intravest's distribution of the spoof films on a German movie channel—Troma Entertainment filed suit. The complaint alleged federal copyright infringement and state law claims of fraud and tortious interference with prospective economic advantage. After the district court dismissed the complaint on jurisdictional grounds, Troma appealed.
The 2d Circuit chronicled the facts underlying the suit, but never reached the substance of Troma's allegations because the complaint made no suggestion that the defendants' tortious conduct caused personal injury in New York. The 2d Circuit retraced the district court's application of the New York long-arm statute and concluded that the lost licensing opportunity was not a statutory basis for exercising personal jurisdiction over Robbins or Lauter. The panel noted that Troma's theory of out-of-state infringement harm was plausible and suggested that defendants' conduct may have undercut the protections afforded to copyright holders, but ultimately held the case must proceed where plaintiff's business was lost or threatened. While the decision hints that California or Germany were the appropriate litigation forums, it dismissed the action without affording Troma any relief.
Practice Note: While this case was decided as a straightforward motion to dismiss, there is indication that the action would have proceeded if plaintiff had been willing to litigate in a different forum. When the district court inquired as to transferring the case to U.S. District Court for the Central District of California, Troma indicated that it was not willing to transfer venue. The district court then entered judgment dismissing the law suit for both lack of jurisdiction and improper venue.
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