Nebraska Machinery Company v. Erickson Productions, Inc. et al

Filing 25

MEMORANDUM AND ORDER - The Motion to Dismiss Complaint or, in the alternative, to Transfer Venue (Filing No. 17 ), filed by Defendants Erickson Productions, Inc., and Jim Erickson, is granted. This case is dismissed without prejudice. A separate judgment will be entered. Ordered by Chief Judge Laurie Smith Camp. (GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
NEBRASKA MACHINERY COMPANY, a
Nebraska corporation;
8:14CV91
Plaintiff,
vs.

MEMORANDUM
AND ORDER

ERICKSON PRODUCTIONS, INC., a
California corporation; and JIM
ERICKSON, an individual;
Defendants.

This matter is before the Court on the Motion to Dismiss Complaint or, in the
alternative, to Transfer Venue (Filing No. 17), filed by Defendants Erickson Productions,
Inc. (“Erickson Productions”) and Jim Erickson (“Erickson”) (collectively “Defendants”).
For the reasons discussed, the Motion will be granted, and this case will be dismissed
without prejudice.
BACKGROUND
For purposes of the pending Motion, the Court accepts as true all well-pled
factual allegations in the Plaintiff’s= Amended Complaint (Filing No. 7), although the
Court need not accept Plaintiff’s legal conclusions. The Court has considered additional
evidence with respect to jurisdictional issues (see Filing Nos. 19, 20, 23.) The following
is a summary of the factual allegations.
Plaintiff, Nebraska Machinery Company (ANMC@) is a Nebraska corporation with
its principal place of business in Omaha, Nebraska.

NMC is a dealer of heavy

machinery, and sells or leases products manufactured by industry leaders such as

Caterpillar for use in the construction, power generation, material, trucking, agriculture,
and railroad industries.
Erickson is a resident of the state of California, and is the owner of Erickson
Productions. (Filing No. 20 at ECF 3 ¶ 18.) Erickson Productions is a California
corporation with its principal place of business in Petaluma, California. Erickson
Productions is not registered to do business in the state of Nebraska. It does not have
any offices in Nebraska, nor does it have any employees, officers, members, or agents
who work or live in Nebraska. (Id. at ECF 2 ¶¶ 8, 9.) Erickson Productions is the sole
U.S. distributor and licensor of photographic images taken by Erickson. (Id. at ECF 1 ¶
4.)
In 2012, NMC began a redesign of its company website, www.nmc-corp.com.
The NMC employee in charge of the redesign proposed the use of various digital
images as background and website banners. The proposed images were drawn from
NMC’s own photographs, a machinery manufacturer’s photograph collection, and from
the Internet, including images found on Erickson’s website (the “Photographs”). An
NMC employee obtained the Erickson images by using the right-click function on
images contained in the Erickson website, and copying and pasting the images into the
draft redesign.
The NMC employee in charge of the redesign received internal approval for the
draft redesign of the website, then sought Erickson Productions= permission to use the
Photographs on NMC=s redesigned website by completing and submitting an online
2

form

through

the

Erickson

website,

www.ericksonstock.com,

which

Erickson

Productions made available to attract those seeking a nonexclusive license to use its
images. In its request, NMC provided links to unpublished examples of NMC’s proposed
and internally approved use of the Photographs in the redesigned website, which had
not been launched.
In response to NMC’s inquiry, a representative of Erickson contacted the NMC
employee by telephone to discuss NMC=s intended use of the Erickson Images and
related licensing. During the conversation, the Erickson representative confirmed that
NMC was not operated or owned by Caterpillar, and the parties discussed a licensing
fee of $400 for a nonexclusive license for the Erickson Images. The NMC employee
agreed to the proposed amount and asked the Erickson representative to provide a
license and written invoice for the cost of licensing the Erickson Images. The NMC
employee provided his email for delivery of the requested materials; however, Erickson
did not provide the license and invoice as discussed.
NMC launched its new website in December 2012, although NMC had not
received the license from Defendants. When launched, the redesigned website included
the Photographs which still displayed the Erickson watermark, as the images appear on
Erickson=s website. Generally, once a written license is signed, Erickson Productions
provides a high resolution version of the image without the watermark. NMC believed it
substantially completed the process for obtaining a written license, and was waiting for
confirmation and delivery of the high resolution images before replacing the draft
3

images with high resolution images. NMC also expected to be invoiced for the promised
license from Erickson.
On or about January 21, 2014, counsel for Defendants contacted NMC claiming
that NMC was using numerous photos created and owned by Erickson, and such use
was without a proper license. Defendants= counsel advised NMC that this unlicensed
use of Erickson=s copyright photos infringed Erickson=s copyrights and demanded that
NMC cease and desist using the photos. Upon receipt of the letter, NMC removed the
draft images from its website and began discussing the accusations with Erickson=s
attorney. Erickson threatened litigation against NMC for copyright infringement and
demanded $900,000 in damages for alleged copyright infringement of the Erickson
Images.
Erickson now disputes that the parties discussed a $400 licensing fee, or that
NMC was ever quoted a licensing fee.

Given the large sum of damages that

Defendants seek, and the threat of being sued in a foreign and/or inconvenient
jurisdiction, NMC filed this action to seek a declaration of its legal rights. Specifically,
NMC seeks a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202, that NMC
did not infringe copyrights allegedly owned by Erickson in certain photographs at issue,
and that damages for infringement, if any, are minimal.
Defendants dispute NMC’s factual allegations. Defendants also assert that
Erickson Productions is not registered to do business in Nebraska, nor does it have any
employees, officers, members, or agents who live or work in Nebraska. (Filing No. 20 ¶¶
4

7-12.) Erickson Productions asserts that it never licensed the Photographs to NMC, or
to any customers in Nebraska. (Id. ¶ 14-15.) Erickson Productions has no record of any
communication or correspondence with NMC, or any of its employees or agents. (Id. ¶
13.) Erickson Productions has not licensed any photographs to any Nebraska
customers within the last five years. (Id. ¶ 17.)
STANDARD OF REVIEW
“To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff need
only make a prima facie case showing there is personal jurisdiction over the defendant.”
Pecoraro v. Sky Ranch for Boys, Inc., 340 F.3d 558, 561 (8th Cir. 2003). The Court
“views the evidence in the light most favorable to the plaintiff and resolves all factual
conflicts in the plaintiff's favor.” Id. To withstand Defendants’ motion under Fed. R. Civ.
P. 12(b)(2), Plaintiffs “must state sufficient facts in the complaint to support a
reasonable inference that [Defendants] may be subjected to the jurisdiction of the forum
state.” Steinbuch v. Cutler, 518 F.3d 580, 585 (8th Cir. 2008) (citing Dever v. Hentzen
Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004)). Plaintiffs’ prima facie case “must
be tested, not by the pleadings alone, but by the affidavits and exhibits presented with
the motions and opposition thereto.” Miller v. Nippon Carbon Co., Ltd., 528 F.3d 1087,
1090 (8th Cir. 2008) (internal quotations and citations omitted).
DISCUSSION
In determining whether this Court has personal jurisdiction over a nonresident
defendant, two issues are presented: (1) whether the requirements of the Nebraska
5

long-arm statute are satisfied and (2) whether the exercise of jurisdiction over this
Defendant will violate the Fourteenth Amendment Due Process Clause. Downing v.
Goldman Phipps, PLLC, 764 F.3d 906, 911 (8th Cir. 2014). Because Nebraska’s longarm statute, Neb. Rev. Stat. § 25-536 (Reissue 2008),1 has been interpreted to extend
jurisdiction over nonresident defendants to the fullest degree allowed by the Due
Process Clause of the United States Constitution, Ameritas Inv. Corp. v. McKinney, 694
N.W.2d 191, 199 (Neb. 2005), the Court need only determine whether the assertion of
jurisdiction offends constitutional limits.1

1

Neb. Rev. Stat. § 25-536 provides:
A court may exercise personal jurisdiction over a person:
(1) Who acts directly or by an agent, as to a cause of action arising from the
person:
(a) Transacting any business in this state;
(b) Contracting to supply services or things in this state;
(c) Causing tortious injury by an act or omission in this state;
(d) Causing tortious injury in this state by an act or omission outside this
state if the person regularly does or solicits business, engages in any other
persistent course of conduct, or derives substantial revenue from goods used
or consumed or services rendered, in this state;
(e) Having an interest in, using, or possessing real property in this state; or
(f) Contracting to insure any person, property, or risk located within this state
at the time of contracting; or
(2) Who has any other contact with or maintains any other relation to this state to
afford a basis for the exercise of personal jurisdiction consistent with the
Constitution of the United States.

1

NMC argues that Defendants transacted business in Nebraska and, construed liberally, the
Complaint suggests that NMC believed the parties entered into some form of an oral licensing agreement.
Because the Court concludes that personal jurisdiction over Defendants would violate due process, it

6

Due process requires that a defendant have sufficient minimum contacts with the
forum state such that summoning the defendant would not offend the “traditional notions
of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S.
310, 316 (1945); Burger King Corp. v. Rudzewicz, 471 U.S. 475, 476 (1985). “Minimum
contacts must exist either at the time the cause of action arose, the time the suit is filed,
or within a reasonable period of time immediately prior to the filing of the lawsuit.”
Pecoraro, 340 F.3d at 562 (citing Clune v. Alimak Ab, 233 F.3d 538, 544 n. 8 (8th Cir.
2000)). The minimum contacts must be such that the defendant “purposefully avails
itself of the privilege of conducting activities within the forum State” and “the defendant's
conduct and connection with the forum State are such that he should reasonably
anticipate being haled into court there.” Burger King, 471 U.S. at 475 (citations omitted);
see also World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
“The Supreme Court has recognized two theories for evaluating personal
jurisdiction: general and specific jurisdiction.” Steinbuch, 518 F.3d at 586 (citing
Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414-415 (1984)). “A
state may exercise general jurisdiction if a defendant has carried on in the forum state a
continuous and systematic, even if limited, part of its general business; in such
circumstances the alleged injury need not have any connection with the forum state.”
Id. at 586.

“The plaintiff must make a prima facie showing, however, that the

defendant's contacts were not ‘random,’ ‘fortuitous,’ or ‘attenuated.’” Id. (quoting Keeton
need not discuss whether Defendants’ actions fall within the other provisions of Nebraska’s long-arm
statute.

7

v. Hustler Magazine, Inc., 465 U.S. 770, 779 (1984)). “Specific jurisdiction on the other
hand is appropriate only if the injury giving rise to the lawsuit occurred within or had
some connection to the forum state, meaning that the defendant purposely directed its
activities at the forum state and the claim arose out of or relates to those activities.” Id.
(citing Burger King, 471 U.S. at 472).
Once it has been determined that the nonresident defendant purposefully
established minimum contacts with the forum state, such contacts must be analyzed in
light of other factors to determine whether the exercise of personal jurisdiction over the
nonresident defendant comports with “'fair play and substantial justice.'” Burger King,
471 U.S. at 476 (quoting Int'l Shoe Co. v. Washington, 326 U.S. at 320). The factors, as
articulated by the Eighth Circuit Court of Appeals, are: “(1) the nature and quality of
contacts with the forum state; (2) the quantity of those contacts; (3) the relation of the
cause of action to the contacts; (4) the interest of the forum state in providing a forum
for its residents; and (5) the convenience of the parties.” Downing, 764 F.3d at 912
(citing Steinbuch, 518 F.3d at 586) (internal marks omitted). “The third factor applies
only on the question of whether specific jurisdiction exists, and the last two factors ‘carry
less weight and are not dispositive.’” Id. (internal citations omitted) (quoting Johnson v.
Woodcock, 444 F.3d 953, 956 (8th Cir. 2006)). Evaluating the factors, the Court
concludes that it lacks personal jurisdiction over Defendants.
I.

Specific Jurisdiction

8

NMC argues that Defendants’ contacts include (1) providing an interactive
website, (2) responding to NMC’s inquiry with a phone call, and (3) contacting NMC with
the cease and desist letter. Viewing the evidence in a light most favorable to NMC, the
Court concludes these contacts are insufficient individually or collectively to establish
personal jurisdiction over defendants.2
A.

Erickson Productions Website

To determine whether an Internet website or presence provides sufficient
minimum contact to invoke specific jurisdiction, the Eighth Circuit adopted the analytical
approach pronounced in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F.Supp.
1119 (W.D.Pa.1997). See Lakin v. Prudential Sec., Inc., 348 F.3d 704, 710 (8th Cir.
2003) (citing Zippo, 952 F.Supp. at 1124). In Zippo, the court held that the “the
likelihood that personal jurisdiction can be constitutionally exercised is directly
proportionate to the nature and quality of the commercial activity that an entity conducts
over the Internet.” Zippo, 952 F.Supp. at 1124. To measure the nature and quality of the
commercial activity, the Eighth Circuit uses a “sliding scale” approach:
At one end of the spectrum are situations where a defendant clearly does
business over the Internet. If the defendant enters into contracts with
residents of a foreign jurisdiction that involve the knowing and repeated
transmission of computer files over the Internet, personal jurisdiction is
proper. At the opposite end are situations where a defendant has simply
posted information on an Internet Web site which is accessible to users in
foreign jurisdictions. A passive Web site that does little more than make
2

The Court’s analysis focuses on NMC’s assertion of specific jurisdiction over Defendants
because NMC only argued specific jurisdiction. For the reasons set forth below in part B., the Court will
not permit jurisdictional discovery to determine whether Defendants are subject to general jurisdiction in
Nebraska.

9

information available to those who are interested in it is not grounds for
the exercise [of] personal jurisdiction. The middle ground is occupied by
interactive Web sites where a user can exchange information with the host
computer. In these cases, the exercise of jurisdiction is determined by
examining the level of interactivity and commercial nature of the exchange
of information that occurs on the Web site.
Lakin, 348 F.3d at 710-11 (citing Zippo, 952 F.Supp. at 1124).
In Lakin, the Eighth Circuit found that the website it was asked to examine fell
into the “middle ground” of the Zippo analysis, and ultimately held that such a website
was not sufficient to establish general personal jurisdiction without more evidence
concerning the quantity of the website’s contacts with the forum state. Id. at 712–13.3
NMC does not specifically argue that Defendants’ Internet activities subject it to
general jurisdiction in Nebraska, but argues that because the website was more than
passive, Defendants were subject to specific jurisdiction. NMC argues that the website
was more than interactive because it permitted users to access photographs using the
copy and paste function and because it permitted NMC to contact Defendants via email
through a link on the website. The Court concludes that neither of these aspects of the
website made the website more than passive.
First, NMC suggests that because it was able to copy and paste the Photographs
from the Erickson Production website, the website was interactive. NMC alleges that, on
“information and belief, a website viewer’s right-click function may be disabled to
prevent copying of content, including images, from a website by its viewer. This
3

Although the court in Lakin was asked to address Internet contacts in the context of general
jurisdiction, the court agreed that the Zippo model was an appropriate approach in cases of specific
jurisdiction. Id. at 711.

10

capability is common knowledge in the web design industry.” (Filing No. 7 ¶ 14.) Thus,
according to NMC, because it was able to copy and paste the Photographs, the website
was interactive. The Court disagrees. There is no evidence that Defendants intended to
permit website users to copy photos from the website. Defendants included a
watermark on all photographs in an apparent attempt to discourage copying. The Court
cannot conclude that by failing to prevent viewers from copying photos directly from the
website the Defendants intended to avail themselves of doing business in Nebraska, or
any other jurisdiction.
Second, a website’s capacity to receive a message from a viewer does not
make the website more than passive. Courts have held that “a website is still
considered passive and insufficient to confer jurisdiction where, as here, the only
purported ‘exchange of information’ available on the website is a direct link allowing a
user to contact the seller and does not allow for any part of a transaction to occur
online.” A.W.L.I. Grp., Inc. v. Amber Freight Shipping Lines, 828 F. Supp. 2d 557, 569
(E.D.N.Y. 2011) (citing Stephan v. Babysport, LLC, 499 F.Supp.2d 279, 288 (E.D.N.Y.
2007)). NMC employee Jason McCants contacted Defendants through the “Contact Us”
section of the Defendants’ website. (Filing No. 19-3.) The contact us page allows the
customer to enter first name, last name, company, email, phone and question/comment.
(Filing No. 19-6.) Although NMC attempts to categorize this communication as a request
for a written license, there is no evidence that the “Contact Us” link allowed any part of a
business transaction to occur through the website. Accordingly, based upon the
11

evidence in the record, the Court concludes that Defendants’ website did little more than
make information available to potential customers, and was insufficient to confer
personal jurisdiction.
B.

Telephone Call to NMC

NMC asserts that, in response to its online inquiry to Defendants, a
representative of Erickson Productions contacted NMC by telephone to negotiate a
license agreement. Defendants have no record of any call made to NMC, and
accordingly deny any call was made. Nevertheless, even viewing the evidence in a light
most favorable to NMC, a single phone call is insufficient to support personal
jurisdiction. The Eighth Circuit has said that “[t]he use of interstate facilities, such as
telephones or mail, is a ‘secondary or ancillary’ factor ‘and cannot alone provide the
‘minimum contacts' required by due process.’” Bell Paper Box, Inc. v. Trans W.
Polymers, Inc., 53 F.3d 920, 923 (8th Cir. 1995) (quoting Scullin Steel Co. v. National
Ry. Utilization Corp., 676 F.2d 309, 314 (8th Cir. 1982)). The same Court has held that
“some emails and phone calls” are “insufficient to establish personal jurisdiction.”
Fastpath, Inc. v. Arbela Technologies Corp., 760 F.3d 816, 823 (8th Cir. 2014) (citing
Viasystems, Inc. v. EBM Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 594 (8th
Cir. 2011) (holding that scattered e-mails, phone calls, and a wire-transfer of money to a
Missouri corporation did not constitute a “deliberate” and “substantial connection” with
the state such the defendant could “reasonably anticipate being haled into court
there.”)).
12

Here, a single phone call is insufficient to establish personal jurisdiction. In the
phone call, a representative of Defendants and a representative of NMC allegedly
reached an agreement on the price of the license, and the NMC representative
requested that the license and invoice be emailed to him. The NMC representative
believed the licensing process was complete, and that he was merely waiting for
confirmation of the license. Even if the licensing process was essentially complete, the
existence of a contract between NMC and Defendants would be insufficient on its own
to establish personal jurisdiction. Id. at 821.
C.

Cease and Desist Letter

Finally, NMC argues that the cease and desist letter from Defendants supports a
finding of personal jurisdiction. This Court has held that a cease and desist notice for
copyright infringement to a company in Nebraska is not sufficient to establish personal
jurisdiction over the sender. Integrity Mgmt. of Florida, L.L.C. v. Dental Websmith, Inc.,
No. 4:08CV3079, 2008 WL 4372878, at *5 (D. Neb. Sept. 19, 2008) (citing Yahoo! Inc.
v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1208 (9th Cir.
2006)). NMC argues that the cease and desist letter, when considered with Defendants’
website and the alleged telephone call to NMC, show that Defendants contacts were
sufficient. However, as discussed above, Defendants’ website was passive, and
Defendants made, at most, a single phone call to NMC. These contacts, collectively and
individually, are not sufficient to establish specific personal jurisdiction over Defendants.
II.

General Jurisdiction, and Jurisdictional Discovery
13

NMC does not argue that this Court has general personal jurisdiction over
Defendants, but NMC states that it has not waived such an argument. Rather, it
suggests that general jurisdiction may exist, and requests an opportunity for discovery
to determine whether Defendants’ contacts with Nebraska were systematic and
continuous. “When the plaintiff offers ‘documentary evidence, and not merely
speculations or conclusory allegations,’ about a defendant's contacts with the forum, a
district court should not dismiss the action for lack of personal jurisdiction over the
defendant ‘without permitting him to take some jurisdictional discovery to establish
whether general personal jurisdiction would be justified.’“ Marolf v. AyA Aguirre &
Aranzabal S.A., No. 4:09CV3221, 2010 WL 964956, at *2 (D. Neb. March 10, 2010)
(quoting Steinbuch, 518 F.3d at 589).
NMC argues that documentary evidence and contradictions in the record support
the need for jurisdictional discovery to determine whether Defendants are subject to
general jurisdiction in Nebraska. Other than the cease and desist letter, however, NMC
has not offered documentary evidence of Defendants’ contacts with Nebraska. With
respect to contradictory statements by the Defendants, NMC notes that Defendants
stated they have “never issued any licenses related to these photos to any person or
company in Nebraska.” (Filing No. 22 at 24.) NMC argues that this statement raises the
question of whether any of Defendants’ photos have been licensed in Nebraska. NMC
also notes that Defendants stated they have no records that indicate they received
communications from an NMC employee. NMC argues that this does not mean that
14

“records do not exist or that they never existed,” and NMC should be permitted to test
this claim. (Id. at 24-25.) The Court concludes that NMC’s basis for seeking discovery
is mere speculation, and the Court will not permit jurisdictional discovery on such
grounds.
CONCLUSION
For the reasons stated, the nature and quality of Defendants’ alleged contacts
with Nebraska are insufficient to establish personal jurisdiction over Defendants.
Further, NMC has not demonstrated that additional discovery on the question of
personal jurisdiction is warranted.
Accordingly,
IT IS ORDERED:
1.

The Motion to Dismiss Complaint or, in the alternative, to Transfer Venue
(Filing No. 17), filed by Defendants Erickson Productions, Inc., and Jim
Erickson, is granted;

2.

This case is dismissed without prejudice; and

3.

A separate judgment will be entered.

Dated this 8th day of December, 2014
BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge

15