PHILPOT v. THE CELEBRITY CAFE.COM, LLC

Filing 21

ORDER granting Celebrity's 8 Motion to Dismiss for Lack of Jurisdiction; granting Plaintiff's 10 Motion for Leave to File Amended Complaint. The Amended Complaint, submitted at Filing No. 10-2, is deemed filed as of the date of this Order and now is the operative pleading in this action. Mr. Philpot is ordered to effectuate service on each of the new defendants. Copy to Plaintiff via U.S. Mail. Signed by Judge Tanya Walton Pratt on 8/25/2015. (MAC)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
LARRY G. PHILPOT,
Plaintiff,
v.
THE CELEBRITY CAFE.COM, LLC,
Defendant.

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Case No. 1:14-cv-01982-TWP-DML

ORDER ON MOTION TO DISMISS AND MOTION FOR LEAVE
TO FILE AMENDED COMPLAINT
This matter is before the Court on a Motion to Dismiss filed pursuant to Federal Rule of
Civil Procedure 12(b)(2) and 12(b)(3) by Defendant The Celebrity Cafe.Com, LLC (“Celebrity”)
(Filing No. 8). Also before the Court is a Motion for Leave to File Amended Complaint filed by
Plaintiff Larry G. Philpot (“Mr. Philpot”) (Filing No. 10). Mr. Philpot initiated this action,
asserting various copyright claims against Celebrity for alleged copyright violations involving
photographs of musicians Willie Nelson and Kid Rock taken and copyrighted by Mr. Philpot.
Celebrity moved to dismiss Mr. Philpot’s Complaint based on lack of personal jurisdiction and
improper venue. Soon thereafter, Mr. Philpot requested leave to amend his Complaint to include
additional defendants. The Court will address each motion in turn.
I. BACKGROUND
Mr. Philpot is a professional photographer who lives in Indianapolis, Indiana, and works
with concert events across the country. Most of Mr. Philpot’s work involves musicians and
concerts, and he licenses his photographs to various end users. On October 4, 2009, Mr. Philpot
took a photograph of musician Willie Nelson while he was performing in St. Louis, Missouri. Mr.
Philpot secured a copyright for this photograph through the United States Copyright Office

approximately three years later on September 5, 2012. Before securing the copyright, Mr. Philpot
published the photograph on the internet on May 31, 2011.
On August 25, 2013, Mr. Philpot took a photograph of entertainer Kid Rock while he was
performing in Indianapolis, Indiana. Mr. Philpot secured a copyright for this photograph through
the United States Copyright Office on November 25, 2013. Before securing the copyright, Mr.
Philpot published the photograph on the internet on September 21, 2013.
Celebrity owned and operated the website thecelebritycafe.com from January 2003 to
December 3, 2014. The website was used to report on celebrity and entertainment news. Copies
of Mr. Philpot’s photographs of Willie Nelson and Kid Rock were posted on Celebrity’s website
in connection with four news articles. The copies of the photographs were posted to the website
without any attribution to Mr. Philpot. Mr. Philpot discovered the copies of his photographs on
Celebrity’s website and sent a cease and desist letter to Celebrity on or about March 28, 2014,
directing the removal of the photographs from the website. Mr. Philpot initiated this copyright
lawsuit on December 2, 2014. On January 5, 2015, Celebrity moved to dismiss the action, and
Mr. Philpot requested leave to amend his Complaint sixteen days later on January 21, 2015.
II. CELEBRITY’S MOTION TO DISMISS
The Court first addresses Celebrity’s Motion to Dismiss, and for the following reasons, the
Motion to Dismiss is GRANTED.
A.

Legal Standard
Federal Rule of Civil Procedure 12(b)(2) allows a defendant to move to dismiss a complaint

where there is a “lack of personal jurisdiction” over the defendant. Fed. R. Civ. P. 12(b)(2). Rule
12(b)(3) allows for dismissal when venue is improper. When deciding a motion under Rule 12(b),
the Court accepts the factual allegations in the complaint and draws all reasonable inferences in

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favor of the plaintiff if they weigh on the issue of personal jurisdiction. Int’l Medical Group, Inc.
v. American Arbitration Ass’n, 149 F. Supp. 2d 615, 623 (S.D. Ind. 2001). But where a complaint
consists of conclusory allegations unsupported by factual assertions, the complaint fails even under
the liberal standard of Rule 12(b). Id.
When considering a motion to dismiss for lack of personal jurisdiction, the Court examines
the sufficiency of the complaint, not the merits of the lawsuit. Id. The complaint does not need to
include factual allegations concerning personal jurisdiction, but if the defendant moves to dismiss
the action under Rule 12(b)(2), the plaintiff bears the burden of demonstrating the existence of
personal jurisdiction. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th
Cir. 2003). The court may consider affidavits and all other documentary evidence that have been
filed, and any conflicts must be resolved in favor of the plaintiff as the non-moving party. Int’l
Medical Group, 149 F. Supp. 2d at 623.
The level of the plaintiff’s burden to show personal jurisdiction depends on whether an
evidentiary hearing has been held. Purdue Research, 338 F.3d at 782. Where a hearing has been
conducted, the plaintiff must show by a preponderance of the evidence that personal jurisdiction
exists. Id. Where no hearing is conducted and the motion to dismiss is decided solely on written
materials, the plaintiff must establish a prima facie case that personal jurisdiction exists. Id.
“If jurisdiction is exercised on the basis of a federal statute that does not authorize
nationwide service of process, the law requires a federal district court to determine if a court of the
state in which it sits would have personal jurisdiction.” 1 Annie Oakley Enters. v. Sunset Tan

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The federal statute serving as the basis for this litigation, the Copyright Act, does not authorize nationwide service
of process or govern personal jurisdiction. Novelty, Inc. v. RCB Distrib., 2008 U.S. Dist. LEXIS 52443, *10 (S.D.
Ind. July 9, 2008) (“Congress did not create national service of process under the Lanham Act or the Copyright Act.”);
see also Lighthouse Carwash Sys., LLC v. Illuminator Bldg. Co., LLC, 2004 U.S. Dist. LEXIS 21666, *6 n.4 (S.D.
Ind. Aug. 31, 2004). Therefore, determining personal jurisdiction in this case is governed by Indiana law.

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Corporate & Consulting, LLC, 703 F. Supp. 2d 881, 886 (N.D. Ind. 2010) (citing United States v.
Martinez De Ortiz, 910 F.2d 376, 381 (7th Cir. 1990)). Indiana Trial Rule 4.4(A), Indiana’s longarm statute, governs personal jurisdiction in Indiana. “Although Rule 4.4(A) enumerates eight
bases for the assertion of jurisdiction on the basis of a defendant’s actions, the rule also includes a
provision that ‘a court of this state may exercise jurisdiction on any basis not inconsistent with the
Constitutions of this state or the United States.’” Id. (internal citation omitted). Thus, a court has
personal jurisdiction to the limit allowed by the Federal Due Process Clause of the Fourteenth
Amendment. LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 966–67 (Ind. 2006).
For a court to have personal jurisdiction over a defendant, the Due Process Clause requires
that the defendant have “certain minimum contacts with [the state] such that the maintenance of
the suit does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
Under federal due process standards, personal jurisdiction can be either specific or general.
Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1244 (7th Cir. 1990). “If the defendant’s
contacts with the state are so ‘continuous and systematic’ that the defendant should reasonably
anticipate being haled into the courts of that state for any matter, then the defendant is subject to
general jurisdiction.” LinkAmerica, 857 N.E.2d at 967. “If the defendant’s contacts with the forum
state are not ‘continuous and systematic,’ specific jurisdiction may be asserted if the controversy
is related to or arises out of the defendant’s contacts with the forum state.” Id. “Specific
jurisdiction requires that the defendant purposefully availed itself of the privilege of conducting
activities within the forum state so that the defendant reasonably anticipates being haled into court
there.” Id.

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In other words, specific jurisdiction exists when a defendant has deliberately directed its
activities toward the forum’s residents, and the cause of action results from alleged injuries that
arise out of or relate to those activities. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985).

In Burger King, the Supreme Court explained the “constitutional touchstone” of

“minimum contacts” for personal jurisdiction:
The unilateral activity of those who claim some relationship with a nonresident
defendant cannot satisfy the requirement of contact with the forum State. . . . [I]t is
essential in each case that there be some act by which the defendant purposefully
avails itself of the privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws.
This “purposeful availment” requirement ensures that a defendant will not be
haled into a jurisdiction solely as a result of “random,” “fortuitous,” or “attenuated”
contacts, or of the unilateral activity of another party or a third person. Jurisdiction
is proper, however, where the contacts proximately result from actions by the
defendant himself that create a “substantial connection” with the forum State. Thus
where the defendant deliberately has engaged in significant activities within a State,
or has created continuing obligations between himself and residents of the forum
he manifestly has availed himself of the privilege of conducting business there, and
because his activities are shielded by the benefits and protections of the forum’s
laws it is presumptively not unreasonable to require him to submit to the burdens
of litigation in that forum as well.
Id. at 474–76 (internal citations, quotation marks, and footnote omitted).
The Seventh Circuit has provided additional guidance for cases involving the internet and
online activity.
Courts 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. Beyond simply operating an interactive website
that is accessible from the forum state, a defendant must in some way target the
forum state’s market. If the defendant merely operates a website, even a highly
interactive website, that is accessible from, but does not target, the forum state, then
the defendant may not be haled into court in that state without offending the
Constitution.
be2 LLC v. Ivanov, 642 F.3d 555, 558–59 (7th Cir. 2011) (citations and quotation marks omitted).

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Concerning venue in a copyright action, the Supreme Court has made clear that 28 U.S.C.
§ 1400 identifies “the proper venue for copyright and patent suits” and thus overrides the general
venue statute. Atl. Marine Constr. Co. v. United States Dist. Court for the Western District of
Texas, 134 S. Ct. 568, 577 n.2 (U.S. 2013). Under 28 U.S.C. § 1400(a), “[c]ivil actions, suits, or
proceedings arising under any Act of Congress relating to copyrights . . . may be instituted in the
district in which the defendant or his agent resides or may be found.”
B.

Discussion
Celebrity is a New York limited liability company with its only office located in Oceanside,

New York. Celebrity is not registered to do business in Indiana. It does not have any offices, paid
employees, members, agents, or operations in Indiana. Celebrity has no telephone or fax listings
in Indiana. It also has no bank accounts in Indiana, has never paid taxes in Indiana, and does not
own, lease, or control any property or assets in Indiana. Dominick Miserandino, Celebrity’s sole
member, has been to Indiana only twice in his life, visiting Madison, Indiana in 2003 and
Indianapolis, Indiana in 2012. Celebrity does not currently conduct any business or own any
significant business assets.
Celebrity presented evidence showing that it previously operated the website
thecelebritycafe.com from January 2003 until December 3, 2014. It is on this website that Mr.
Philpot’s photographs of Willie Nelson and Kid Rock appeared without permission. On December
3, 2014, ownership and operation of the website was transferred to Bigfoot Ventures LLC
(“Bigfoot”) pursuant to an asset purchase agreement between Celebrity and Bigfoot, which was
entered into on November 26, 2014.

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Celebrity explains that while it was operating the website, it used the website to report on
celebrity and entertainment news. The website was accessible to the general public. A small
portion (approximately 1.5% in 2014) of the visitors to the website were located in Indiana.
The evidence indicates that Celebrity never sold any goods or services or entered into any
financial transactions with any Indiana residents. Celebrity never directly advertised in Indiana or
specifically targeted Indiana residents in any way. Celebrity used a third-party advertising server
to place banner advertisements on the website. Those advertisements were populated on the
website based on internet “cookies” that are on the end user’s computer. Thus, an end user would
see advertisements that are relevant to his location or recent internet activity. While these
advertisements appeared on Celebrity’s website, they did not originate from Celebrity.
The articles that contained Mr. Philpot’s photographs on Celebrity’s website were not
targeted toward Indiana or its residents. Celebrity explains that based on the website’s statistics,
the articles with the copyrighted photographs were viewed by only a limited number of consumers
and resulted in less than $20.00 in advertising revenue for Celebrity. It therefore follows, Celebrity
asserts, that assuming approximately 1.5% of that revenue was the result of Indiana residents who
may have accessed the articles, which is consistent with the general usage of the website, the
revenue related to Indiana residents would be virtually nothing, only $0.30.
Based on these facts, Celebrity argues that this Court cannot exercise personal jurisdiction
over it. Relying on be2 LLC, 642 F.3d at 558–59, and Bell v. Kirchner, 2014 U.S. Dist. LEXIS
29483 (S.D. Ind. Mar. 7, 2014) from this Court, Celebrity asserts that simply placing content on
the internet cannot result in a finding that Celebrity has engaged in activity that establishes
minimum contacts with the State of Indiana. Without conducting any business in Indiana or
purposefully directing any activities at or targeting the State of Indiana, personal jurisdiction

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cannot be established over Celebrity. Celebrity explains that personal jurisdiction cannot be
established because Celebrity does not do or solicit business in Indiana, target any Indiana
residents, have any financial transactions with Indiana residents, or generate substantial revenue
from or in Indiana.
Mr. Philpot’s response in opposition to the Motion to Dismiss fails to present a cogent
argument against dismissal. His thirty page brief strings together lengthy quotations from court
opinions from across the country while largely ignoring the binding, Seventh Circuit precedent
directly on point. Amidst the lengthy, non-binding case law quotations, Mr. Philpot presents
sparse unverified, personal assertions regarding his “information and belief” concerning
Celebrity’s business operations and contacts. He fails to present any argument regarding how the
non-binding case law from other circuits applies to the facts of this case to save his case from
dismissal.
Mr. Philpot argues that Celebrity advertised to Indiana residents and solicited Indiana
advertisers to advertise on its website. However, the Complaint, exhibits, and Celebrity’s affidavit
evidence clearly establish that Celebrity did not target any individual or entity in Indiana. Rather,
Celebrity’s website included a standard, fill-in-the-blank form where potential advertisers could
contact Celebrity about advertising on its website. Furthermore, Celebrity presented evidence that
even with the potential opportunity for Indiana advertisers to contact Celebrity, such contact and
advertising never actually occurred. Mr. Philpot fails to rebut this evidence to establish any
contacts between Celebrity and the State of Indiana.
Regarding Mr. Philpot’s argument concerning Celebrity’s advertisements to Indiana
residents, such advertisements were from third-parties beyond the control of Celebrity and were
based on internet “cookies” and the location of internet end users. Thus, Indiana residents would

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receive banner advertisements and information regarding Indiana content because of their location
and internet activity, not because of Celebrity’s intentional targeting of the forum state.
Furthermore, the banner advertising to Indiana residents is not related to Mr. Philpot’s alleged
injury, so it cannot serve as the basis for personal jurisdiction. See Burger King, 471 U.S. at 472
(specific jurisdiction arises where the cause of action results from alleged injuries that arise out of
or relate to defendant’s activities that are deliberately directed toward the forum’s residents).
Because Celebrity has “submitted affidavits or other evidence” that shows a lack of
personal jurisdiction, Mr. Philpot “must go beyond the pleadings and submit affirmative evidence
supporting the exercise of jurisdiction.” Purdue Research, 338 F.3d at 783. Mr. Philpot has failed
to do so. Rather, he has presented only unverified assertions and unauthenticated exhibits to stretch
to create contacts between Celebrity and the State of Indiana. But even those exhibits and
assertions fail to establish minimum contacts between the defendant and the forum state. Celebrity
has challenged personal jurisdiction and shown that it does not exist. Mr. Philpot’s personal
assertions and unauthenticated exhibits fail to show that Celebrity has any contacts with the State
of Indiana. Having failed to meet his burden to sustain this action against Celebrity, Mr. Philpot’s
claims against Celebrity must be dismissed for lack of personal jurisdiction.
Improper venue provides an additional basis to dismiss Mr. Philpot’s claims against
Celebrity. Under 28 U.S.C. § 1400(a), “[c]ivil actions, suits, or proceedings arising under any Act
of Congress relating to copyrights . . . may be instituted in the district in which the defendant or
his agent resides or may be found.” Celebrity does not reside in and is not found in the State of
Indiana. See Milwaukee Concrete Studios, Ltd. v. Fjeld Mfg. Co., 8 F.3d 441, 445 (7th Cir. 1993)
(a defendant is “found” in any forum in which the defendant is amenable to personal jurisdiction).

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Mr. Philpot fails to even mention, let alone respond to, Celebrity’s argument concerning improper
venue. The Southern District of Indiana is not the proper venue for this action.
III. MR. PHILPOT’S MOTION FOR LEAVE TO FILE AMENDED COMPLAINT
Next, the Court addresses Mr. Philpot’s Motion for Leave to File Amended Complaint and,
for the following reasons, GRANTS the Motion.
A.

Legal Standard
Federal Rule of Civil Procedure 15(a)(1) allows a party to amend its pleading once as a

matter of course within twenty-one days after serving it, or “if the pleading is one to which a
responsive pleading is required, 21 days after service of a responsive pleading or 21 days after
service of a motion under Rule 12(b).” After a responsive pleading has been filed and twenty-one
days have passed, “a party may amend its pleading only with the opposing party’s written consent
or the court’s leave. The court should freely give leave when justice so requires.” Fed. R. Civ.
Pro. 15(a)(2). The Rule, however, “do[es] not mandate that leave be granted in every case. In
particular, a district court may deny a plaintiff leave to amend his complaint if there is undue delay,
bad faith[,] or dilatory motive . . . [, or] undue prejudice . . . , [or] futility of amendment.” Park v.
City of Chicago, 297 F.3d 606, 612 (7th Cir. 2002) (internal citation and quotation marks omitted).
“Whether to grant or deny leave to amend is within the district court’s discretion.” Campbell v.
Ingersoll Milling Machine Co., 893 F.2d 925, 927 (7th Cir. 1990).
B.

Discussion
Mr. Philpot filed his Complaint on December 2, 2014. Celebrity filed its Rule 12(b)

Motion to Dismiss on January 5, 2015. Sixteen days later, on January 21, 2015, Mr. Philpot filed
his Motion for Leave to File Amended Complaint. The amended complaint mirrors Mr. Philpot’s
Motion is his first request to amend his pleading and it was filed within twenty-one days of the

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Motion to Dismiss, the amendment is permitted as a matter of course. The Court does not exercise
discretion in this instance.2
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Celebrity’s Motion to Dismiss (Filing No.
8) without prejudice and GRANTS Mr. Philpot’s Motion for Leave to File Amended Complaint
(Filing No. 10). This action will proceed without Celebrity as a defendant. The Amended
Complaint, submitted at Filing No. 10-2, is deemed filed as of the date of this Order and now is
the operative pleading in this action. Mr. Philpot is ordered to effectuate service on each of the
new defendants.
SO ORDERED.
Date: 8/25/2015
DISTRIBUTION:
Larry G. Philpot
8125 Halyard Way, 1st Floor
Indianapolis, Indiana 46236
Bradley M. Stohry
REICHEL STOHRY LLP
[e-mail]

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The Court encourages Mr. Philpot to carefully review the law on personal jurisdiction noted in this Order and in
other opinions within the Seventh Circuit, review the facts relating to the newly added defendants and any potential
contacts they might have with the State of Indiana, and determine whether personal jurisdiction exists for the added
defendants or if voluntary dismissal of the Amended Complaint is appropriate under Federal Rule of Civil Procedure
41.

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