Flava Works, Inc. v. Gunter et al

Filing 185

MEMORANDUM OPINION. Signed by the Honorable John F. Grady on 12/13/2012. Mailed notice(meg, )

10-6517.121-JCD

December 13, 2012

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
FLAVA WORKS, INC.,
Plaintiff,
v.
MARQUES RONDALE GUNTER d/b/a
myVidster.com; SALSAINDY, LLC
d/b/a myVidster.com;
JOHN DOES 1-26; LEASEWEB USA,
INC. d/b/a LeaseWeb.com; and
LEASEWEB B.V. d/b/a LeaseWeb.com,
Defendants.

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No. 10 C 6517

MEMORANDUM OPINION
Before the court is the motion of defendant LeaseWeb USA, Inc.
pursuant to Federal Rule of Civil Procedure 12(b)(2) and 12(b)(6)
to dismiss the claims asserted against it.

For the reasons

explained below, the motion is granted.
BACKGROUND
Flava Works, Inc. is a company that produces and distributes
adult entertainment products, including DVDs and streaming video.
Flava asserts copyright infringement claims against defendants
Marques Rondale Gunter, who owns and operates a website called
myVidster.com

(“myVidster”);

SalsaIndy,

LLC

(“SalsaIndy”),

an

entity controlled by Gunter; John Doe defendants who allegedly used
myVidster’s backup service to make copies of Flava’s videos;

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LeaseWeb B.V. (“Leaseweb B.V.”), which allegedly operated the
server that hosted myVidster; and LeaseWeb USA, Inc. (“Leaseweb
USA”), an affiliate of LeaseWeb B.V.

We will refer to the latter

two defendants collectively, where appropriate, as the “Leaseweb
defendants.”
A

bit

of

the

pleading

defendants is in order.

history

regarding

the

Leaseweb

They were first named as defendants in

this action in the Fourth Amended Complaint, which was filed on
October 26, 2011.
2012.

Summons was issued to Leaseweb USA in February

It moved to dismiss the Fourth Amended Complaint, but that

motion was mooted by the filing of a Fifth Amended Complaint, which
Leaseweb USA also moved to dismiss. Then, at a hearing on November
7, 2012, plaintiff sought leave to file a Sixth Amended Complaint.
We granted leave to do so.

We also indicated that unless the

allegations of the Sixth Amended Complaint are materially different
from those of the Fifth Amended Complaint as to Leaseweb USA, that
defendant need not plead to the new complaint.
Complaint

does

add

some

allegations

The Sixth Amended

regarding

the

Leaseweb

defendants, but it does not transform the landscape to the extent
that a new motion to dismiss is required.

We will construe the

motion to dismiss as being directed to the Sixth Amended Complaint.

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DISCUSSION
Leaseweb USA’s motion is based on two grounds: lack of
personal jurisdiction and failure to state a claim upon which
relief could be granted.
A.

Does This Court Have Personal Jurisdiction over Leaseweb USA?
“The

plaintiff

has

the

burden

of

establishing

personal

jurisdiction, and where . . . the issue is raised by a motion to
dismiss and decided on the basis of written materials rather than
an evidentiary hearing, the plaintiff need only make a prima facie
showing of jurisdictional facts.”
693, 700 (7th Cir. 2010).

Tamburo v. Dworkin, 601 F.3d

In a federal-question case, “a federal

court has personal jurisdiction over the defendant if either
federal law or the law of the state in which the court sits
authorizes

service

of

process

to

that

defendant.”

Mobile

Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston
Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010).

The Copyright

Act does not authorize nationwide service of process, Janmark, Inc.
v. Reidy, 132 F.3d 1200, 1201 (7th Cir. 1997), so Leaseweb USA is
“amenable to service (and hence subject to personal jurisdiction)
only if it could be served in Illinois under Illinois law,” see
Mobile Anesthesiologists, 623 F.3d at 443; see also Fed. R. Civ. P.
4(k)(1)(A).

Illinois’s

long-arm

statute

authorizes

personal

jurisdiction to the extent permitted by the Illinois Constitution
and the United States Constitution.

See 735 ILCS 5/2-209(c).

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“[T]here

is

no

operative

difference

between

these

two

constitutional limits,” so a single constitutional inquiry will
suffice.

Mobile Anesthesiologists, 623 F.3d at 443; see also

International Shoe Co. v. Washington, 326 U.S. 310 (1945).
Plaintiff’s argument is somewhat difficult to follow, but it
appears that plaintiff is arguing that Leaseweb USA is subject to
both general and specific jurisdiction in Illinois.
1.

General Personal Jurisdiction

“A defendant with ‘continuous and systematic’ contacts with a
state is subject to general jurisdiction there in any action, even
if the action is unrelated to those contacts.”

Tamburo, 601 F.3d

at 701 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 416 (1984)).

To be subject to general jurisdiction,

Leaseweb USA’s contacts with Illinois must be “so ‘continuous and
systematic’ as to render [the defendants] essentially at home in
the forum.”

Abelesz v. OTP Bank, 692 F.3d 638, 654 (7th Cir. 2012)

(quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, --- U.S.
----, 131 S. Ct. 2846, 2851 (2011)).

This standard “is demanding

because the consequences can be severe: if a defendant is subject
to general jurisdiction in a state, then it may be called into
court there to answer for any alleged wrong, committed in any
place, no matter how unrelated to the defendant’s contacts with the
forum.”

uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 426 (7th

Cir. 2010).

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Leaseweb USA has submitted the affidavit of Dewey Coerper III,
Senior Account Manager.

He states that Leaseweb USA is a legally

separate entity from Leaseweb B.V. (the Dutch entity that is
alleged to have hosted myVidster) that maintains its own separate
networks, servers, records, and offices and does not have access
to, custody of, or control over any elements of Leaseweb B.V.’s
network.

(Def.’s Mem. in Supp. of Mot., Ex. A, Aff. of Dewey

Coerper III ¶¶ 4-5.)

Coerper also states that Leaseweb USA is a

Delaware corporation that maintains its sole office in Manassas,
Virginia.

It does not have an office in Illinois, nor do any of

its employees.

(Coerper Aff. ¶¶ 3, 6.)

It does not specifically

target Illinois consumers in its advertising, and it has only one
customer in Illinois.

(Coerper Aff. ¶¶ 7-8.)

In response, plaintiff points to Leaseweb USA’s maintenance of
an interactive and commercial website through which prospective or
existing customers can order Internet hosting services, as well as
a

press

release

issued

at

some

point

by

Leaseweb

B.V.

that

indicated that it would be opening its “first datacenter in the
United States.”

(Pl.’s Resp. at 2, 9; Sixth Am. Compl. ¶ 16.)

Plaintiff contends that Leaseweb USA “stood ready and willing to do
business with Illinois residents” and knowingly did do business
with one Illinois resident.

Plaintiff also asserts that “Leaseweb

offered peering services via a data center in Chicago, Illinois.”
(Pl.’s Resp. at 9.)

Attached to plaintiff’s response is a copy of

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a webpage from Leaseweb.com that states: “LeaseWeb has an open
peering policy” and “will generally peer with anyone who wants to
and is connected to any or all of the internet exchanges below,”
and lists an exchange in Chicago. (Pl.’s Resp., Ex. A.) Plaintiff
fails to define “peering” or discuss how it should factor into our
analysis of personal jurisdiction.

Leaseweb, however, helpfully

explains that “peering” occurs when “traffic from Leaseweb USA’s
network . . . travel[s] over the network of another company that is
based in Illinois.”

(Def.’s Reply at 8-9.)

Both plaintiff’s latest complaint and its response brief
suffer from serious imprecision and vagueness.

In many instances,

primarily where it is convenient to plaintiff, plaintiff’s counsel
has simply referred to “Leaseweb” or “Leaseweb.com,” and/or lumped
the two Leaseweb defendants together.1

This sloppiness does not

suffice; plaintiff cannot ignore the fact that although affiliated,
Leaseweb B.V. and Leaseweb USA are two separate entities.
share

the

Leaseweb.com

website,

but

plaintiff’s

own

They

evidence

demonstrates that the website provides notice that Leaseweb B.V.
and Leaseweb USA are discrete entities with separate contact
information and separate legal agreements for services, depending
on which company’s servers a customer chooses to perform the web-

1/
For example, paragraph 12 of the complaint states: “Defendants,
LeaseWeb USA, Inc. and LeaseWeb B.V. will be referred to collectively as
‘LeaseWeb’.” On page 10 of plaintiff’s response, plaintiff states: “Leaseweb set
up an expansive, sophisticated commercial venture online on an international
level.”

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hosting services.

We will disregard the instances where plaintiff

has failed to specify, and we are unable to infer, to which
Leaseweb entity plaintiff is referring.
Plaintiff may be attempting--largely through innuendo--to
assert an alter-ego theory regarding the Leaseweb defendants, which
is rejected.

There are no alter-ego allegations in the complaint,

and plaintiff has failed to provide any evidence to support such a
finding, such as the failure to comply with corporate formalities,
undercapitalization, or the commingling of funds or assets.

See,

e.g., Main Bank of Chicago v. Baker, 427 N.E.2d 94, 101-02 (Ill.
1981); cf. Cent. States, Se. & Sw. Areas Pension Fund v. Reimer
Express

World

Corp.,

230

F.3d

934,

943

(7th

Cir.

2000)

(“[C]onstitutional due process requires that personal jurisdiction
cannot be premised on corporate affiliation or stock ownership
alone where corporate formalities are substantially observed and
the parent does not exercise an unusually high degree of control
over the subsidiary.”). Plaintiff makes much of the shared website
and the fact that Leaseweb B.V. at one point stated its intent to
open a “data center” in the United States, but we are concerned
with the activities of Leaseweb USA; plaintiff does not submit any
evidence that the two companies have the unity of interest or
ownership that would be required for alter-ego liability.

Cf.

Drake v. Ocwen Fin. Corp., No. 09 C 6114, 2010 WL 1910337, at *4-5
(N.D. Ill. May 6, 2010) (finding that defendants’ shared website

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features and other similarities were insufficient for imposition of
alter-ego liability).
The

cases

cited

by

plaintiff

as

support

for

finding

jurisdiction are distinguishable because they involved defendants
with significant contacts with the state in addition to the
operation of an interactive website.

In contrast, Leaseweb USA’s

contacts with Illinois are nearly nonexistent; it is physically and
legally absent from the state and has just one customer here.
operation

of

its

website

jurisdiction analysis.

does

not

add

much

to

the

The

general-

Our Court of Appeals has warned that

“[c]ourts should be careful in resolving questions about personal
jurisdiction involving online contacts to ensure that a defendant
is not haled into court simply because the defendant owns or
operates a website that is accessible in the forum state, even if
that site is ‘interactive.’”
(7th Cir. 2011).

Be2LLC v. Ivanov, 642 F.3d 555, 558

There is no evidence indicating how much revenue

is generated from Leaseweb USA’s single Illinois customer nor any
evidence that Leaseweb USA specifically targets Illinois customers.
The fact that Leaseweb USA’s network may interconnect with an
Illinois-based network to exchange traffic is a very attenuated
contact with the state that also fails to add much to the analysis.
Leaseweb USA’s contacts with Illinois fall far short of being
“continuous and systematic” and are therefore insufficient to
support general jurisdiction.

See Abelesz, 692 F.3d at 654.

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2.

Specific Personal Jurisdiction

“Specific personal jurisdiction is appropriate where (1) the
defendant has purposefully directed his activities at the forum
state

or

purposefully

availed

himself

of

the

privilege

of

conducting business in that state, and (2) the alleged injury
arises out of the defendant’s forum-related activities.”
601 F.3d at 702.

Tamburo,

Plaintiff contends in a cursory fashion that

Leaseweb USA is subject to personal jurisdiction in Illinois
because Leaseweb USA “offered web hosting services to Illinois
residents and to everyone in the United States” and “[p]laintiff’s
claim arises out of Defendant’s contact with Illinois customers or
prospective customers in providing web hosting services.”2

(Pl.’s

Resp. at 9.) This argument does not pass the straight-face test as
to the second prong of the specific-jurisdiction analysis.

There

is no indication that Leaseweb USA’s contract with its single
Illinois customer is in any way related to plaintiff’s copyright
claims.

Plaintiff alleges injury due to copyright infringement

that arises out of Leaseweb B.V.’s, not Leaseweb USA’s, alleged
hosting of myVidster.

(Sixth Am. Compl. ¶ 11.)3

(And in any

event, the myVidster defendants are not located in Illinois.)

2/
Plaintiff does not present any “express aiming” argument or discuss the
place of its alleged injury.
3/
As we discuss below, the complaint actually fails to allege any conduct
on the part of Leaseweb USA sufficient to state a copyright infringement claim
against it.

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Plaintiff has failed to show that Leaseweb USA is subject to
either general or specific jurisdiction in Illinois.
will therefore be dismissed from this action.

Leaseweb USA

If lack of personal

jurisdiction were the only basis for this dismissal, it would be
without prejudice to refiling in another jurisdiction; however, as
discussed below, plaintiff also fails to state a claim against
Leaseweb USA after having had three opportunities to do so.
B.

Does Plaintiff State a Claim Against Leaseweb USA?
Under federal notice-pleading standards, a complaint need not

contain “detailed factual allegations,” but it must have more than
mere “labels and conclusions.”
U.S. 544, 555 (2007).

Bell Atl. Corp. v. Twombly, 550

The complaint must contain sufficient facts

to raise a plaintiff’s right to relief above a “speculative” level,
id. at 555, and the claim must be “plausible on its face,” id. at
570.

“A claim has facial plausibility when the plaintiff pleads

factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Leaseweb

USA’s

first

Rule

12(b)(6)

argument

is

that

plaintiff’s copyright claims are barred by safe-harbor protections
of the Digital Millennium Copyright Act (the “DMCA”).

We need not

discuss the DMCA because the problem with the Sixth Amended
Complaint is more fundamental: the complaint fails to allege any
conduct on the part of Leaseweb USA that allows us to draw an

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inference

that

infringement.4

it

is

liable

for

any

species

of

copyright

It is Leaseweb B.V. that is alleged to host or have

hosted myVidster, which allegedly contained infringing material
“when the backup service was running.”

(Sixth Am. Compl. ¶ 11.)

Leaseweb USA is merely alleged to be the “U.S. Data Center and
affiliate of LeaseWeb B.V.” (Sixth Am. Compl. ¶ 12.) As discussed
above,

this

references

allegation,
to

the

as

well

as

non-existent

the

complaint’s

“defendant

frequent

Leaseweb,”

are

insufficient to impute the purported conduct of Leaseweb B.V. to
Leaseweb USA.
Plaintiff

has

been

given

the

opportunity

to

amend

its

complaint twice since it has known of Leaseweb USA’s position that
Leaseweb USA is the incorrect defendant and that the complaint
fails to state a claim against Leaseweb USA.

It has failed to

state a claim against the entity despite having had three chances.
Therefore, the claims against Leaseweb USA will be dismissed with
prejudice.

See, e.g., Stanard v. Nygren, 658 F.3d 792, 801 (7th

Cir. 2011) (“Leave to replead need not be allowed in cases of
repeated failure to cure deficiencies by amendments previously
allowed.”) (internal quotation marks omitted).
CONCLUSION
For the foregoing reasons, the motion of defendant LeaseWeb
USA, Inc. to dismiss the claims against it [153] is granted, and
4/

This is Leaseweb USA’s second argument.

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the claims against LeaseWeb USA, Inc. are dismissed with prejudice.

DATE:

December 13, 2012

ENTER:

_______________________________________________
John F. Grady, United States District Judge