Righthaven LLC v. Newman

Filing 25

MOTION to Dismiss for Lack of Jurisdiction Subject Matter and Personal First Amended Complaint by Defendant Garry Newman. Responses due by 8/18/2011. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J)(DiRaimondo, Anthony)

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BONE McALLESTER NORTON PLLC
STEPHEN J. ZRALEK (Admitted pro hac vice)
Nashville City Center
511 Union Street, Suite 1600
Nashville, Tennessee 37219
Telephone: [phone] // Facsimile: [phone]
Email: [e-mail]
Attorneys for Defendant
GARRY NEWMAN

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100 NORTH CITY PARKWAY, SUITE 1600
LAS VEGAS, NV 89106
[phone]

BROWNSTEIN HYATT FARBER SCHRECK, LLP

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
KIRK B. LENHARD (Nevada Bar No. 1437)
ANTHONY J. DIRAIMONDO (Nevada Bar No. 10875)
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106
Telephone: [phone] // Facsimile: [phone]
Email: [e-mail]
Email: [e-mail]

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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RIGHTHAVEN, LLC,

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Plaintiff,
v.

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GARRY NEWMAN, an individual; and
FACEPUNCH STUDIOS LTD., a limited
company formed under the laws of Great
Britain,

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Case No.: 2:10-cv-01762-JCM -PAL
DEFENDANT GARRY NEWMAN’S
MOTION TO DISMISS THE FIRST
AMENDED COMPLAINT FOR LACK OF
SUBJECT MATTER JURISDICTION
AND LACK OF PERSONAL
JURISDICTION

Defendants.

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On June 28, 2011, Defendant Garry Newman (“Newman”) filed a Motion to Dismiss the

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Original Complaint filed by Plaintiff Righthaven, LLC (“Righthaven”). (Doc. 19). Righthaven’s

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deadline to respond to the Motion to Dismiss was July 15, 2011.

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Righthaven did not respond.

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Despite such deadline,

On July 16, 2011, without seeking leave of Court, Righthaven filed an improperly labeled

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“Amended Complaint,” asserting that it was being filed as of right pursuant to Fed. R. Civ. P.

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15(a). See Doc. 21. In the Amended Complaint, Righthaven sets forth a new “transaction,

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occurrence, or event that happened after the date” of the Original Complaint – namely the

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execution of a second amendment to the Strategic Alliance Agreement (“SAA”) between

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Righthaven and Stephens Media, which it refers to as the “Restated Amendment.” See Doc. 21 at

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¶ 21. Because the Amended Complaint is based largely on facts that occurred after the filing of

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the Original Complaint, Rule 15 requires Righthaven to have sought permission to file a

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supplemental pleading and to have provided notice to Newman, pursuant to Fed. R. Civ. P. 15(d).

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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Righthaven sought no such permission and provided no such notice.

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window to file an amended complaint as of right, pursuant to Rule 15(a)(1)(B), has expired. This

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ground alone is sufficient for dismissal.

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Righthaven’s 21-day

On July 22, 2011, the Court entered an Order granting the Motion to Dismiss without

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prejudice, finding that Righthaven failed to respond to the Motion to Dismiss.

(Doc. 22).

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Newman now files the present Motion to Dismiss the Amended Complaint, pursuant to Rules

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12(b)(1) and 12(b)(2) of the Federal Rules of Civil Procedure.

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As set forth in the following Memorandum of Points and Authorities, and as supported by

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the Declaration of Newman (Doc. 20), the Amended Complaint must be dismissed for lack of

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subject matter jurisdiction under Rule 12(b)(1) for two reasons. First, as this Court has already

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found in related cases, Righthaven lacks standing to bring this case. Even if the Restated

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Agreement provided Righthaven with standing (which Newman cannot ascertain since

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Righthaven has not filed a copy of the Restated Agreement with the Amended Complaint or

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otherwise provided a copy to Newman), the Amended Complaint did not affect the second basis

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for lack of subject matter jurisdiction: the Copyright Act does not apply extraterritorially, and the

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alleged infringement in this case occurred in Great Britain.

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Further, nothing in the Amended Complaint changes the fact that, under Rule 12(b)(2), the

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Court also lacks personal jurisdiction over Newman for two reasons: (a) he does not own or

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control the allegedly infringing website; rather, a limited company organized under the laws of
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Great Britain does, and (b) he is a resident of Great Britain, who has not purposefully availed

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himself of the rights and privileges of the State of Nevada, and jurisdiction over him would be

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manifestly unreasonable.

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DATED this 1st day of August, 2011.

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BROWNSTEIN HYATT FARBER SCHRECK LLP

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By: /s/ Anthony J. DiRaimondo
Kirk B. Lenhard, Nevada Bar No. 1437
Anthony J. DiRaimondo, Nevada Bar No. 10875
100 N. City Parkway, Suite 1600
Las Vegas, NV 89106
[e-mail]
[e-mail]
[phone]

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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BONE McALLESTER NORTON PLLC

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By: /s/ Stephen J. Zralek
Stephen J. Zralek, Admitted pro hac vice
511 Union Street, Suite 1600
Nashville, TN 37212
[e-mail]
[phone]

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Attorneys for Defendant
GARRY NEWMAN

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

FACTUAL BACKGROUND
This is a copyright infringement action brought by Plaintiff Righthaven, LLC

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(“Righthaven”) against Defendant Garry Newman (“Newman”).1

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resident of Great Britain. See Doc. 21 at ¶ 4; Decl. of Garry Newman (Doc. 20) at ¶ 2.2 He was

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born in England and has resided there his entire life. Doc. 20 at ¶ 2. He has never been to

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Nevada, and has never conducted or solicited business there. Id. at ¶¶ 3, 13-14.

Newman is a citizen and

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Righthaven alleges that it owns the copyright in a newspaper article entitled: “‘Death ray’

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scorched hair,” (the “Article”), attached to the Amended Complaint as Exhibit 1. (Doc. 21 at ¶

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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16). The Article describes an architectural curiosity: a “concave reflective surface” on the outside

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wall of a skyscraper – the Vdara Hotel at CityCenter on the Strip in Las Vegas – that directs the

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sun’s rays toward guests at the hotel’s swimming pool, melting their plastic cups and shopping

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bags, and singeing their hair. See Doc. 1 at Ex. 1. The phenomenon is so powerful, apparently,

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that it has earned the nickname “Vdara death ray.” Id.

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The Amended Complaint alleges that Newman is the registrant and administrative contact

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for the website facepunch.com (the “Website”). Doc. 21 at ¶ 8. It also alleges that Newman

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allowed the Article to be reproduced on the Website (copy of Article allegedly appearing on

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Website in Exhibit 2 to the Original Complaint, Doc. 1), in violation of the copyrights owned by

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Righthaven. Doc. 21 at ¶ 20.

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Although Newman concedes he is the individual listed at the domain registrar as the

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contact for the Website, he does not personally own the Website or control it in his individual

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In its First Amended Complaint, Righthaven has added as a defendant Facepunch Studios Ltd.,
(“Facepunch”), a limited company formed under the laws of Great Britain. Righthaven has not
served process on Facepunch, and this Motion to Dismiss is filed solely on behalf of Newman.
Without entering an appearance on behalf of Facepunch, undersigned counsel notes that it
appears the Court also lacks personal jurisdiction and subject matter jurisdiction over Facepunch,
on many of the same grounds it lacks jurisdiction over Newman and this complaint against him.

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The Court may examine extrinsic evidence without converting the motion to dismiss into a
motion for summary judgment when determining subject matter jurisdiction, see Safe Air for
Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004), or personal jurisdiction. See Doe v.
Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001).
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capacity. Doc. 20 at ¶ 4. Rather, the Website is owned by Facepunch Studios Ltd., which is

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registered as a Limited Company in the United Kingdom, organized under the laws of Great

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Britain. Id. A certified copy of the Certificate of Incorporation of Facepunch Studios Ltd. (the

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“Company”) is attached to Newman’s Declaration as Exhibit A.

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ownership interest in the Company and is one of two directors of the Company. Id. at ¶ 5. The

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Company has no employees. Id.

Newman merely has an

The Website serves as a forum for online game users and enthusiasts. Id. at ¶ 6. It

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provides a place for gamers to share their thoughts on various issues and topics. Id. The Website

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has always been controlled out of the Company’s offices in England, and the Company has no

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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other offices. Id. at ¶ 7.

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Exhibit 2 to the Original Complaint shows that the user who posted the alleged

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unauthorized reproduction uses the name “Wii60.” Doc. 20 at ¶ 9; Doc. 1-1 at Ex. 2. The user

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name “Wii60” does not belong to Newman. Id. Further, Newman has never used “Wii60” to

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post content on the Website. Id. Newman does not direct or create content that third parties, such

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as Wii60, post on the Website. Id. at ¶ 10.

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On October 12, 2010, Righthaven filed its Original Complaint against Newman. Doc. 1.

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Prior to filing the Original Complaint, Righthaven never sent a cease & desist letter requesting

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removal of the alleged unauthorized reproduction. Newman Decl. at ¶ 11. Immediately upon

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learning of Righthaven’s allegations, Newman, acting in his corporate capacity with the

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Company, disabled the thread to the posting that is referenced in Exhibit 2 of the Original

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Complaint. Id. at ¶ 12. He did this from the Company’s offices in England on November 4,

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2010. Id.

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Newman has never been to Nevada or conducted business there. Id. at ¶¶ 3, 13. He has

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never solicited business in Nevada; designated an agent for service of process in Nevada; held a

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license in Nevada; incorporated in Nevada; paid taxes in Nevada; or had a bank account in

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Nevada. Id. at ¶¶ 3, 14. Moreover, none of the servers supporting the Website are located in

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Nevada. Id. at ¶ 17.

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Prior to receiving notice of the Original Complaint, Newman had never heard of

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Righthaven or The Las Vegas Review – Journal. Id. at ¶ 15. As the Website’s readership is

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worldwide and not focused on or limited to any particular geographic region, Newman disagrees

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with Righthaven’s contention that reproduction of the Article on the Website was of specific

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interest to Nevada residents. Id. at ¶ 16. To the contrary, his experience has been that interest in

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the Website is based on visitors’ identity as a gamer, regardless of their residency. Id.
Given that Newman is a British citizen residing in England, defending this lawsuit in

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Nevada would be extremely burdensome for him. Id. at ¶ 18. He has limited funds and cannot

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afford to travel to Nevada for the multiple hearings and depositions that would be required. Id.

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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Participating by telephone would put Newman at a disadvantage to Plaintiff. Id. Having to

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defend this lawsuit in Nevada would result in a substantial hardship for him. Id.

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This Court has found Righthaven Lacks Standing in Related Cases

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Righthaven’s claims of copyright ownership in the Article have been rejected by this

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Court in related cases. As background, the Copyright Office records indicate that Stephens

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Media, LLC (“Stephens Media”) is the author of the Article. (Copy of copyright registration

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information obtained from Copyright Office webpage attached hereto as Exhibit A.)3

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Righthaven is listed therein as the copyright claimant, by virtue of a written assignment.4 Id.

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Righthaven did not attach to the Original or Amended Complaint a copy of the specific

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assignment giving it putative rights in the Article.

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Pursuant to Fed. R. Evi. 201(d), the Court is requested to take judicial notice of facts obtained
from Righthaven’s putative copyright registration of the Article, as obtained from the Copyright
Office website. The Court may take judicial notice because this is a matter “of public record” and
“readily verifiable.” Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir.
2006). The Certificate of Registration also appears at Doc. 1-1, Ex. 4.
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Righthaven would have no contractual right to bring the present suit without such assignment,
and the records from the Copyright Office (attached hereto as Exhibit A) indicate that Stephens
Media assigned certain putative rights to Righthaven. In response to Newman’s argument that
Righthaven lacks standing, it is presumed that Righthaven will need to produce a copy of the
SAA, any amendments thereto, and any specific assignment purporting to transfer rights in the
Article from Stephens Media to Righthaven.
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lack of standing.5 When pressed about its alleged ownership in these related cases, Righthaven

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has pointed to several documents showing an alleged assignment of rights from Stephens Media

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to Righthaven. After examining the primary agreement – the “Strategic Alliance Agreement” or

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“SAA”)6 – that Righthaven filed in its case against Democratic Underground, this Court held that

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Righthaven does not actually own any of the underlying copyrights belonging to Stephens Media,

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but merely owns the right to sue for infringement of Stephens Media’s copyrights.7 Righthaven

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LLC v. Democratic Underground, LLC, __ F. Supp. 2d __, 2011 WL 2378186, at *3 (D. Nev.

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June 14, 2011) (slip copy) (copy attached hereto as Exhibit D). Pointing to Section 7.2 of the

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

In recent months, this Court has dismissed multiple complaints filed by Righthaven for

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BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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SAA, the Court found that the only right that Righthaven is granted under the SAA is “the bare

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right to bring and profit from copyright infringement actions.” Id. at *2. Finding that “the SAA

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prevents Righthaven from obtaining any of the exclusive rights necessary to maintain standing in

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Pursuant to Fed. R. Evi. 201(d), the Court is requested to take judicial notice of this fact and all
facts contained within the declarations Righthaven has previously filed with the District of
Nevada in similar cases, and the exhibits thereto. The Court may take judicial notice because
these facts are a matter “of public record” and “readily verifiable.” Reyn’s, 442 F.3d at 746 n.6.
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Righthaven LLC v. Democratic Underground LLC, No. 2:10-cv-01356-RLH-GWF, at Ex. 1 to
Doc. 79 thereto (D. Nev. Mar. 9, 2011) (copy of SAA dated Jan. 18, 2010, attached hereto as
Exhibit B). A duplicate copy of the SAA was filed in Righthaven LLC v. Hoehn, and was
authenticated by the Declaration of the CEO of Stephens Media, Steven Gibson. See No. 2:11cv-00050-PMP-RJJ, at Ex. 2 to Doc. 24 thereto (D. Nev. May 9, 2011) (attached hereto as
Exhibit E). Although cases generally should not be attached to filings, many of these cases have
not yet been published or are very recent decisions, thus Newman attaches them here for the
Court’s convenience.
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In that case, Democratic Underground moved to unseal the SAA. In granting that motion, this
Court stated: “As I have . . . considered the multitude of cases filed by Righthaven, on the
claimed basis that Righthaven owns the copyrights to certain Stephens Media copy, it appears to
the Court that there is certainly an interest and even a right in all the other defendants sued by
Plaintiff to have access to this material.” Democratic Underground, No. 2:10-cv-01356-RLHGWF, at p. 4 of Doc. 93 thereto (Apr. 14, 2011) (Order Unsealing SAA) (copy attached hereto as
Exhibit C).
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a copyright infringement action,” the Court dismissed Righthaven for lack of standing.8 Id. at *6.

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“As such, Righthaven’s complaint is dismissed in its entirety.” Id. at *9.
On May 9, 2011, Righthaven amended the SAA. While not providing a copy to Newman

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or filing a copy of the amendment in this case, Righthaven did file a copy in its lawsuit against

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defendant Wayne Hoehn.9 Despite the amendment, this Court held that Righthaven still lacked

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standing since the amendment continued to deprive Righthaven of ownership over Stephens

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Media’s copyrights. Righthaven LLC v. Hoehn, ___ F. Supp. 2d ___, 2011 WL 2441020 (D.

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Nev. June 20, 2011) (slip copy) (copy attached hereto as Exhibit F).

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On July 13, 2011, this Court granted a similarly situated defendant’s motion to dismiss on

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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grounds that Righthaven lacked standing. See Righthaven LLC v. Mostofi, Case Number 2:10-

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cv-1066-KJD-GWF, 2011 WL 2746315 (D. Nev. July 13, 2011) (slip copy) (copy attached hereto

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as Exhibit G). There, Righthaven argued that the amendment it executed with Stephens Media

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on May 9, 2011 fixed any possible errors in the original SAA that would have prevented

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Righthaven from having standing in that matter. Id. at * 3. The court disagreed, finding that the

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amendment could not create standing because “[t]he existence of federal jurisdiction ordinarily

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depends on the facts as they exist when the complaint was filed.” Id. (quoting Lujan v. Defenders

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of Wildlife, 504 U.S. 555, 571 n.4 (1992) (emphasis in Lujan)).

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After that, and after Newman moved to dismiss the Original Complaint on June 18, 2011

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(Doc. 19), Righthaven amended the SAA for a second time on July 8, 2011. (Doc. 21 at ¶ 21).

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Righthaven refers to this second amendment as the “Amended and Restated Strategic Alliance

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Agreement,” or the “Restated Amendment.” Id. Righthaven again failed to attach a copy of the

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Restated Amendment to its Amended Complaint or otherwise provide a copy to Newman.

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Because Newman is without a copy of the Restated Agreement, and because it is assumed

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Although not controlling, these decisions are highly persuasive, given the similarity of facts in
all Righthaven cases.
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Hoehn, No. 2:11-cv-00050-PMP-RJJ, at Ex. 3 to Doc. 24 thereto (D. Nev. May 9, 2011)
(Gibson Decl., attaching Clarification and Amendment to SAA) (copy attached hereto as Exhibit
E).
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Righthaven will rely on its contents and attach a copy of it when it responds to this Motion,

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Newman reserves the right to address its merits when he files his reply brief.

2010, (Doc. 5), it failed to disclose to this Court and to Newman the “direct, pecuniary interest”

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that Stephens Media has in the outcome of this case. Instead, it listed only three parties, none of

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which was Stephens Media. Id. In Democratic Underground, the Court stated that it “believes

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that Righthaven has made multiple inaccurate and likely dishonest statements to the Court.” 2011

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WL 2378186, at *9. Choosing to focus, however, on what it described as “the most factually

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brazen,” the Court reprimanded Righthaven for failing to disclose Stephens Media as an

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

Separately, when Righthaven filed its original Certificate of Interested Parties in October

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BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

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interested party in Righthaven’s Certificate of Interested Parties. Id. Only after being ordered to

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do so did Righthaven finally file an Amended Certificate of Interested Parties in the instant case,

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listing Stephens Media as an interested party, on June 20, 2011. (Doc. 17).

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II.

LEGAL STANDARD

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A.

Subject Matter Jurisdiction

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The plaintiff has the burden of establishing subject matter jurisdiction. Pesci v. I.R.S., 67

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F. Supp. 2d 1189, 1194 (D. Nev. 1999). Subject matter jurisdiction is an essential element to

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every lawsuit and must be demonstrated “at the successive stages of the litigation.” Chapman v.

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Pure One Imports (U.S.), Inc., 631 F.3d 939, 954 (9th Cir. 2011) (citing Lujan v. Defenders of

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Wildlife, 504 U.S. 555, 561 (1992)). Where subject matter jurisdiction is lacking, a court has no

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discretion and must dismiss the case. See Chapman, 631 F.3d at 954.

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In evaluating a motion to dismiss under Rule 12(b)(1), the Court may consider extrinsic

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evidence without converting the motion into one for summary judgment. See Safe Air for

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Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “Rule 12(b)(1) attacks on jurisdiction

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can be either facial, confining the inquiry to allegations in the complaint, or factual, permitting

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the court to look beyond the complaint.” Savage v. Glendale Union High Sch., 343 F.3d 1036,

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1052 n.2 (9th Cir. 2003) (citations omitted). “Once the moving party has converted the motion to

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dismiss into a factual motion by presenting affidavits or other evidence properly brought before

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the court, the party opposing the motion must furnish affidavits or other evidence necessary to
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satisfy its burden of establishing subject matter jurisdiction.” Id. (citations omitted). “The court

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need not presume the truthfulness of the plaintiff’s allegations.” Meyer, 373 F.3d at 1039.
A central component to subject matter jurisdiction is the question of standing, which

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requires that the party experience actual or imminent harm. Lujan, 504 U.S. at 561. A party’s

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standing to bring a case is not subject to waiver, and can be used to dismiss the instant action at

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any time. Fed. R. Civ. P. 12(h)(3); United States v. Hays, 515 U.S. 737, 742 (1995); Chapman,

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631 F.3d at 954. Within the realm of copyright law, 17 U.S.C. § 501(b) allows only the legal or

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beneficial owner of an exclusive right in a copyright, specified in 17 U.SC. § 106, to sue for

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infringement. Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 884 (9th Cir. 2005).

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
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BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

3

B.

Personal Jurisdiction

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“It is the plaintiff’s burden to establish the court’s personal jurisdiction over a defendant.”

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Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001) (citations omitted). The court may

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consider extrinsic evidence on a motion to dismiss for lack of personal jurisdiction without

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converting the motion into one for summary judgment. See id.

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Because this action raises a federal question, the issue of whether this Court may exercise

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personal jurisdiction over a defendant depends on the specific limitations of Nevada’s long-arm

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statute and the constitutional principles of due process. Myers v. Bennett Law Offices, 238 F.3d

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1068, 1072 (9th Cir. 2001). In this case, the Amended Complaint comports to allege a cause of

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action for copyright infringement against a British defendant. Because the Copyright Act does

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not provide for nationwide service of process, Nevada’s law of personal jurisdiction applies.

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Nevada’s long-arm statute is co-extensive with the due process principles of the United States

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Constitution. Myers, 238 F.3d at 1072 (citing Judas Priest v. Second Judicial Dist. Court, 104

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Nev. 424, 760 P.2d 137, 138 (1988) (interpreting Nevada’s long-arm statute to reach the limits of

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federal due process)). Thus, a non-resident party is only subject to personal jurisdiction in

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Nevada if exercising jurisdiction comports with federal Constitutional due process requirements.

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See Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir. 1977).

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Whether this Court, sitting in Nevada, has personal jurisdiction over Newman depends on

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whether Righthaven has alleged sufficient “minimum contacts” between Newman and the State
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of Nevada for purposes of general or specific jurisdiction, “such that the maintenance of the suit

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does not offend ‘traditional notions of fair play and substantial justice.’” Doe v. Unocal Corp.,

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248 F.3d 915, 923 (9th Cir. 2001) (quoting International Shoe Co. v. Washington, 326 U.S. 310,

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316 (1945)).

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III.

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LEGAL ARGUMENT
A.

1.

Righthaven Lacks Standing

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“[O]nly copyright owners and exclusive licensees of copyright may enforce a copyright.”

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Sybersound Records v. UAV Corp., 517 F.3d 1137, 1144 (9th Cir. 2008). Exclusive rights in a

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The Court Lacks Subject Matter Jurisdiction over this Dispute

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copyright are enumerated in 17 U.S.C. § 106 and include the exclusive rights:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
[and]
(3) to distribute copies or phonorecords of the copyrighted work to
the public by sale or other transfer of ownership, or by rental, lease,
or lending.

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Id. at 1145 n.3. “The right to sue for an accrued claim for infringement is not an exclusive right

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under § 106.” Silvers, 402 F.3d at 884. “Exclusive rights in a copyright may be transferred and

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owned separately, but . . . [there are] no exclusive rights other than those listed in §106.” Id. at

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885. These exclusive rights may be transferred and owned separately, but the assignment of a

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bare right to sue is ineffectual because it is not one of the exclusive rights. Id. at 884. Since the

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right to sue is not one of the exclusive rights, transfer solely of the right to sue does not confer

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standing on the assignee. Id. at 890. One can only obtain a right to sue on a copyright if the party

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also obtains one of the exclusive rights in the copyright. See id.

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Righthaven has not provided Newman with a copy of the Restated Amendment to the

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SAA that it claims to have executed with Stephens Media on July 7, 2011.

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Newman has no way of assessing Righthaven’s standing based on that agreement. Nevertheless,

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under Supreme Court precedent and this Court’s ruling in Mostofi, Righthaven cannot create

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standing by pointing to the July 7, 2011 Restated Amendment because “[t]he existence of federal

27

jurisdiction ordinarily depends on the facts as they exist when the complaint was filed.” Mostofi,

28
15141\1\1568931.1

11

Accordingly,

2011 WL 2746315 at *3. Instead, the Court must examine the original SAA that was in place at

2

the time Righthaven filed suit against Newman. “Although a lower case court may allow parties

3

to amend defective allegations of jurisdiction, it may not allow the parties to amend the facts

4

themselves.” Id. (citing Newman-Green, Inc. v. AlfonzoLarrain, 498 U.S. 826, 830 (1989)). In

5

explaining this principle, the Court stated that a party may amend a complaint to correctly

6

misstated domicile, but may not move to a new residence after filing the complaint in order to

7

change his domicile. Id. That is exactly what Righthaven is attempting to do in the present case.

8

Thus, examining the SAA in its original form, Righthaven lacks standing to bring this

9

lawsuit because it has no rights in the copyrights it claims, as demonstrated by the plain language

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

1

of at least three sections of the SAA.10 E.g., Silvers, 408 F.3d at 884; Sybersound, 517 F.3d at

11

1144.

12

First, under Section 3.3 of the SAA, Righthaven is obligated to reassign the rights to the

13

Work to Stephens Media if it does not pursue an infringement action within 60 days of the

14

Assignment. Id. at § 3.3. Additionally, this section gives Stephens Media the right to direct

15

Righthaven not to pursue an action against an alleged infringer. Id. In the end, Righthaven is left

16

with no ownership of any exclusive copyright.

17

Second, Section 7.2 of the SAA states in pertinent part:

18

Despite any such Copyright Assignment, Stephens Media shall
retain (and is hereby granted by Righthaven) an exclusive license
to Exploit the Stephens Media Assigned Copyrights for any lawful
purpose whatsoever and Righthaven shall have no right or license
to Exploit or participate in the receipt of royalties from the
Exploitation of the Stephens Media Assigned Copyrights other than
the right to proceeds in association with a Recovery. To the extent
that Righthaven's maintenance of rights to pursue infringers of the
Stephens Media Assigned Copyrights in any manner would be
deemed to diminish Stephens Media’s right to Exploit the Stephens
Media Assigned Copyrights, Righthaven hereby grants an
exclusive license to Stephens Media to the greatest extent
permitted by law so that Stephens Media shall have unfettered and
exclusive ability to Exploit the Stephens Media Assigned
Copyrights. Righthaven shall have no Obligation to protect or
enforce any Work of Stephens Media that is not Stephens Media
Assigned Copyrights.

19
20
21
22
23
24
25
26
27
28

10

The SAA is referenced surpa at n.6, and attached hereto as Exhibit B.

15141\1\1568931.1

12

1

See SAA at § 7.2, referenced supra in n.5, and attached hereto as Exhibit B (emphasis added).

2

Under the plain language of Section 7.2, Righthaven’s only right is to sue for infringement.

3

Further, the SAA gives Stephens Media the unilateral right, at any time, to terminate the

4

Copyright Assignment and enjoy a complete right of reversion. Id.

5

Third, under Section 8 of the SAA:

6

Stephens Media shall have the right at any time to terminate, in
good faith, any Copyright Assignment (the “Assignment
Termination”) and enjoy a right of complete reversion to the
ownership of any copyright that is subject of a Copyright
Assignment . . . . In order to effect termination of the [sic] any
Copyright Assignment, Stephens Media shall be required to
provide Righthaven with thirty (30) days prior written notice.
Within thirty (30) days after receipt of termination of the [sic] any
Copyright
Assignment,
Righthaven
shall
commence
documentation to effect reassignment of the Stephens Media
Assigned Copyrights to Stephens Media.

8
9
10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

7

11
12

SAA at § 8 (emphasis added).

13

As this Court held in Righthaven, LLC v. Hoehn, these “carve outs deprive Righthaven of

14

any of the rights normally associated with ownership of an exclusive right necessary to bring suit

15

for copyright infringement and leave Righthaven no rights except to pursue infringement actions,

16

a right which itself is subject to Stephens Media’s veto.” Case No. 2:11-cv-00050-PMP-RJJ,

17

Doc. 28 at p. 8 (D. Nev. June 20, 2011). Finding that “the SAA prevents Righthaven from

18

obtaining any of the exclusive rights necessary to maintain standing in a copyright infringement

19

action,” the Court dismissed Righthaven for lack of standing in Democratic Underground. __ F.

20

Supp. 2d ___, 2011 WL 2378186, at *6 (copy attached hereto as Exhibit D).

21

For all of the above reasons, Newman respectfully requests this Court to adopt the

22

analysis and conclusion from both Hoehn and Democratic Underground, to find Righthaven lacks

23

standing, and to dismiss the Amended Complaint for lack of subject matter jurisdiction.

24

2.

25

The Copyright Act does Not Apply Extraterritorially; Here the Alleged
Infringement Occurred in England

26

Even if the Court ultimately finds that Righthaven has sufficient standing, the Court still

27

lacks subject matter jurisdiction over this particular dispute because United States copyright laws

28

do not apply extraterritorially, and the alleged infringement in this case occurred in Great Britain.
15141\1\1568931.1

13

“Because the copyright laws do not apply extraterritorially, each of the rights conferred under the

3

five section 106 categories must be read as extending ‘no farther than the [United States’]

4

borders.’” Subafilms, 24 F.3d at 1094. For the Copyright Act to apply, “at least one alleged

5

infringement must be completed entirely within the United States.” Los Angeles News Serv. v.

6

Reuters Television Int’l, Ltd., 149 F.3d 987, 990-91 (9th Cir. 1988) (citations omitted). The

7

Ninth Circuit has ruled, “[r]ecognizing the importance of avoiding international conflicts of law

8

in the area of intellectual property [] we have applied a more robust version of this presumption to

9

the Copyright Act, holding that the Act presumptively does not apply to conduct that occurs

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

See Subafilms, Ltd. v. MGM-Pathe Comm’s Co., 24 F.3d 1088, 1095-99 (9th Cir. 1994).

2

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

1

abroad even when that conduct produces harmful effects within the United States.” Omega S.A.

11

v. Costco Wholesale Corp., 541 F.3d 982, 988 (9th Cir. 2008).

12

“In cases involving the posting of infringing material on an internet website [] courts have

13

held that the tort occurs where the website is created and/or maintained, usually where the server

14

supporting the website is located, not where the internet website can be seen, because that would

15

be literally anywhere the internet can be accessed.” Cable News Network, L.P. v. Go Sms.com,

16

Inc., No. 00-Civ-4812 (LMN), 2000 WL 1678039, at * 3 (S.D.N.Y. Nov. 6, 2000) (unpublished)

17

(copy attached as Exhibit H).

18

In the present case, the alleged infringement took place in England, where the website

19

facepunch.com is controlled. See Newman Decl. at ¶ 7. As soon as Newman learned of the

20

alleged infringement, while acting in his corporate capacity with Facepunch Studios Ltd., he

21

disabled the thread to the post – and he did so from the Company’s offices in England. Id. at ¶

22

12. None of the servers supporting the website are located in Nevada. Id. at ¶ 17. Given the

23

robust presumption against the extraterritorial effect of the Copyright Act, this Court has no

24

jurisdiction over the subject matter of this dispute. E.g., Omega, 541 F.3d at 988.

25

B.

26

The Amended Complaint does not change the conclusion that the Court lacks personal

27

The Court Lacks Personal Jurisdiction over Garry Newman

jurisdiction over Newman.

The Amended Complaint adds a count of vicarious copyright

28
15141\1\1568931.1

14

infringement11 against Newman, and adds facts in support of that claim. Regardless of the new

2

claim and newly asserted facts, the Amended Complaint still fails to assert that Newman’s acts of

3

infringement occurred in or were specifically targeted to Nevada. Rather, Newman is shielded

4

from claims of direct copyright infringement by virtue of the fact that Facepunch Studios Ltd.

5

owns and controls the website where the infringement is alleged to have been published. And he

6

has insufficient contacts with Nevada to warrant either general or specific personal jurisdiction

7

for either the direct copyright infringement claim or the vicarious copyright infringement claim.

8

1.

9

A British Limited Company Owns the Website, Shielding Newman from
Liability under British Law

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

1

“Under English law, a corporation is a separate legal entity from its directors, officers,

11

members, shareholders, or other controlling parties. This principle was definitively established in

12

the case of Salomon v. A. Salomon & Co., Ltd., [1897] A.C. 22 (H.L.).” In re: Tyson, 433 B.R.

13

68 (S.D.N.Y. 2010). Salomon12 is a “landmark” opinion “that continues to be widely cited.” Id.

14

at 79. Under English law, the company is not an alias for its owners; rather, it is a distinct legal

15

entity. See id. at 80, n. 18 (citing Lord Herschell).

16

English law permits the corporate veil to be pierced “only in extremely limited

17

circumstances.” Id. at 80. Indeed, “veil piercing is quite rare under English law.” Id. at 86. In

18

Tyson, the federal district court reversed the bankruptcy court on the finding that English law

19

permitted corporate veil piercing to hold British defendants liable for the corporation’s

20

obligations. The Tyson Court explained that U.S. courts have previously noted that “[u]nlike

21

American law, English case law does not provide an enumerated set of factors that a court can

22

evaluate in deciding whether to lift the corporate veil.” Id. at 81 (citations and quotations

23

omitted).

24

conclusions, all describing the difficulty of piercing the corporate veil in Britain:

25

11

The Tyson Court thereafter surveyed English law and reached the following

27

Vicarious copyright infringement requires a showing of three elements: (1) direct infringement
by a third party; (2) the right and ability to supervise the infringing activity; and (3) direct
financial benefit. appropriate. See 6 William F. Patry, Patry on Copyright § 21:66 (2011) (copy
attached hereto as Exhibit I).

28

12

26

A copy of the Salomon decision attached hereto as Exhibit J.

15141\1\1568931.1

15

1

First, given Salomon, the fact that a person engages in the
“carrying on of a business” using a duly incorporated, yet
seemingly artificial, entity is not sufficient to justify piercing that
entity’s veil. . . . Second, courts may “pierce the corporate veil
only where special circumstances exist indicating that [it] is a mere
façade concealing the true facts.” . . . Third, . . . the plaintiff’s
ability to recover from the defendant on a veil-piercing theory
turns on whether the defendant had already incurred some liability
to the plaintiff at the time he interposed the corporate structure. . . .
Fourth, where the plaintiff may recover in fraud or “deceit” against
a defendant directly, that path is preferably to indirect liability via
veil-piercing. . . . Finally, . . . English courts have observed that
parties may avoid the harsh effects of the Salomon principle by the
exercise of due diligence, for instance, by contracting around a
potential problem [on the front end].

2
3
4
5
6

8
9
10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

7

Id. at 86-90.

11

In the present case, Newman is shielded against personal liability, and the Court lacks

12

personal jurisdiction over him. He does not own the website facepunch.com; rather, the website

13

is owned by Facepunch Studios Ltd., a British Limited Company. See Newman Decl. ¶ 4. The

14

Amended Complaint alleges no facts justifying piercing of the corporate veil, and Righthaven has

15

not even made such a request. Accordingly, the Amended Complaint should be dismissed against

16

Newman.

17

2.

18

In addition to the above argument that English corporate law shields Newman from

19

individual liability for the infringement alleged in the Amended Complaint, American legal

20

principles demonstrate that this Court has neither general nor specific personal jurisdiction over

21

Newman.

22

Newman, the Amended Complaint neglects to include explicit allegations of personal jurisdiction

23

(either general or specific), even though it notes that Newman is a resident of Great Britain. See

24

Doc. 21 at ¶ 4.

No Personal Jurisdiction Exists over Newman

Telegraphing Righthaven’s awareness that personal jurisdiction is lacking over

a.

25

General Personal Jurisdiction

26

General jurisdiction exists when a Defendant’s contacts with the forum state are

27

“substantial” and “continuous and systematic.” Bancroft & Masters, Inc. v. Augusta Nat. Inc.,

28

223 F.3d 1082, 1086 (9th Cir. 2000). The burden on Plaintiff in establishing general jurisdiction
15141\1\1568931.1

16

1

is “fairly high,” and requires that the defendant’s contacts be of the sort that approximate physical

2

presence.

3

defendant is incorporated in the forum, whether he solicits business there, holds a license, or

4

designates an agent for service of process. See id.

Id.

Factors considered in determining general jurisdiction include whether the

Here, on the Amended Complaint that Righthaven has filed, general jurisdiction is not a

6

credible basis for establishing personal jurisdiction over Newman. The Amended Complaint

7

doesn’t contain a single allegation of “substantial,” or “continuous and systematic” contacts

8

between Newman and Nevada.

9

personal jurisdiction is lacking, in that he testifies he has never conducted or solicited business in

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

5

Newman’s Declaration bolsters the conclusion that general

Nevada, and that he never even traveled to Nevada.

11

b.

Specific Personal Jurisdiction

12

Where there is no general jurisdiction, a Court may exercise specific jurisdiction over a

13

foreign defendant if his or her substantial contacts with the forum give rise to the cause of action

14

before the Court. See id. at 1086. The Ninth Circuit applies a three-part test for determining

15

whether the exercise of specific jurisdiction is consistent with the principles of due process:

16

20

(1) The non-resident defendant must do some act or consummate
some transaction with the forum or perform some act by which he
purposefully avails himself of the privilege of conducting activities
in the forum, thereby invoking the benefits and protections of its
laws.
(2) The claim must be one which arises out of or results from the
defendant’s forum-related activities.
(3) Exercise of jurisdiction must be reasonable.

21

Doe 248 F.3d at 923 (citations omitted). Of these three elements, the first prong, purposeful

22

availment, “is the most critical.” Cybersell, 130 F.3d at 416.

17
18
19

23

Before a defendant may be sued in a forum, the defendant must “purposefully avail” itself

24

of the “privilege of conducting activities within the forum state, thus invoking the benefits and

25

protections of its laws.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (citations

26

and quotations omitted). This “ensures that a defendant will not be haled into a jurisdiction solely

27

as a result of random, fortuitous or attenuated contacts, or of the unilateral activity of another

28

party or a third person.” Id.
15141\1\1568931.1

17

1

Purposeful availment requires “affirmative conduct,” that is, a deliberate effort by the

2

defendant to direct its activities toward and to make contact with, the forum. See Unocal, 248

3

F.3d at 924. In the present case, Righthaven cannot demonstrate that Newman has purposely

4

availed himself of the benefits of the laws of Nevada. He has taken no affirmative conduct to

5

direct his activities into the forum. He does not even own or operate the website. Newman Decl.

6

at ¶ 4. Given this fact, no further analysis is needed on the issue of personal jurisdiction.
If the Court disagrees and wishes to further analyze personal jurisdiction, it will have to

8

pierce the corporate veil to find Newman liable for activities of the Company, which owns and

9

operates the Website. In conducting such analysis, the Court should examine the seminal case of

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

7

whether the operation of a website from outside the forum can constitute “purposeful availment”

11

is Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) (discussed in

12

Cybersell, 130 F.3d at 418). There, the court concluded that purposeful availment should be

13

evaluated based on a “sliding scale” of interactivity: the more interactive the website and the

14

more the defendant directs the activities of the website toward the forum state, the more likely it

15

is that the defendant has purposefully availed itself of doing business in the relevant forum. Id. at

16

1124.

17

In the present case, the Website appears to be on the low end of interactivity. The

18

Amended Complaint indicates that third parties may post content to the site, but not that items are

19

for sale on the site. The website merely provides a forum for independent third parties to post

20

topics and issues of interest to them, but neither Newman nor the Company exercises control or

21

direction over these third parties. Newman Decl. at ¶ 10.

22
23

In the Ninth Circuit, purposeful availment in tort cases often is analyzed under the effects
test from Calder v. Jones, 465 U.S. 783 (1984):

24

As we have previously recognized, Calder stands for the
proposition that purposeful availment is satisfied even by a
defendant “whose only ‘contact’ with the forum state is the
‘purposeful direction’ of a foreign act having effect in the forum
state.” Based on these interpretations of Calder, the “effects” test
requires that the defendant allegedly have (1) committed an
intentional act, (2) expressly aimed at the forum state, (3) causing
harm that the defendant knows is likely to be suffered in the forum
state.

25
26
27
28
15141\1\1568931.1

18

1

Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002) (citations omitted).
“Express aiming” requires “something more.” See Bancroft & Masters, 223 F.3d at 1087.

3

It requires the defendant to “individually target [] a known forum resident.” Id. The presence of

4

“individualized targeting” is what is required to satisfy the effects test. See id. at 1088. As the

5

Ninth Circuit noted in Bancroft & Masters, the Plaintiff could not satisfy that factor in Cybersell

6

where “there was no showing that the defendants even knew of the existence of the plaintiffs, let

7

alone targeted them individually.” Id. at 1088 (citing Cybersell, 130 F.3d at 420).

8

The Calder “effects test” does not apply with the same force to corporate plaintiffs as it

9

does to individual plaintiffs, since a corporation “does not suffer harm in a particular geographic

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

2

location in the same sense that an individual does.” Cybersell, 130 F.3d at 420 (concluding that

11

defendant’s web page was not aimed intentionally at the forum state knowing that harm was

12

likely to be caused in the forum to the plaintiff).

13

Here the three elements under Calder weigh against the exercise of personal jurisdiction.

14

First, the law does not presume that copyright infringement is intentional; to the contrary, the

15

Copyright Act allows for both enhanced damages for willful infringement, and reductions of

16

statutory damages for innocent infringement. See 17 U.S.C. § 504(c)(2). Here third parties post

17

material without direction or control from Newman, the Company or its other officers or

18

directors. Newman Decl. at ¶ 10. Rebutting the argument that the infringement was intentional,

19

Newman disabled the post as soon as he was alerted to allegations of infringement. Id. at ¶ 12.

20

Righthaven never sent a cease & desist letter, id. at ¶ 11; had it done so, Newman would have

21

removed the thread to the post even sooner. Id. These facts show the opposite of intentional

22

infringement.

23

Second, it is unreasonable to conclude that Newman’s actions were expressly aimed at

24

Righthaven, let alone any other residents of Nevada. As a corporation, Righthaven is not entitled

25

to the same entitlements under Calder because it is presumed that a corporation “does not suffer

26

harm in a particular geographic location in the same sense that an individual does.”

27

Cybersell, 130 F.3d at 420. Righthaven’s primary argument, impliedly, is that Newman, through

28

his connections with facepunch.com, has specifically intended interaction with residents of every
15141\1\1568931.1

19

See

1

state in that facepunch.com can receive customers from anywhere in the country. However,

2

simply maintaining a website available to residents in the forum state is not purposeful availment.

3

See Cybersell 130 F.3d at 418 (discussing Bensusan Restaurant Corp. v. King, 937 F. Supp. 295,

4

301(S.D.N.Y. 1996), aff’d, 126 F.3d 25 (2d Cir. 1997)). Newman had never heard of Righthaven

5

or The Las Vegas Review-Journal prior to receiving notice of the instant Amended Complaint.

6

Newman Decl. at ¶ 15.
Third, and contrary to Righthaven’s conclusory allegations in paragraphs 13 and 14 of the

8

Amended Complaint,13 Newman did not cause harm knowing it is likely to be suffered in Nevada.

9

In a factually similar case, the Third Circuit found personal jurisdiction over the defendants was

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

7

lacking where no evidence existed that they had “expressly aimed their allegedly tortious activity

11

at Pennsylvania knowing that harm was likely to be caused there.” See Remick v. Manfredy, 238

12

F.3d 248, 259 (3rd Cir. 2001). “Given that the website was . . . accessible worldwide, there is no

13

basis to conclude that the defendants expressly aimed their tortious activity at Pennsylvania

14

knowing that harm was likely to be caused there.” Id. at 259. Any resulting harm to the plaintiff

15

was found to be “merely incidental.” Id.

16

Like the defendants in Remick, Newman did not “expressly aim” any tortious activities

17

into Nevada. Setting aside the fact that he does not own or operate the website in his individual

18

capacity, it is accessible worldwide and its readership is not focused on or limited to any

19

particular geographic region. Newman Decl. at ¶ 16. Newman disagrees with Righthaven’s

20

conclusory allegation that reproduction of the Work on facepunch.com was of specific interest to

21

Nevada residents. Id. To the contrary, his experience has been that interest in facepunch.com is

22

based on visitors’ identity as a gamer, regardless of their residency. Id.

23

Righthaven has alleged nothing to indicate that Newman has taken any specific, deliberate

24

steps to establish a substantial connection with Nevada. There is no indication in the Amended

25

Complaint that Newman has conducted business in Nevada, had any employees or agents in

26

13

27
28

Paragraph 13 of the Amended Complaint alleges: “At all times relevant to this lawsuit, Mr.
Newman knew that the Infringement was and is of specific interest to Nevada residents.”
Paragraph 14 of the Amended Complaint alleges: “Mr. Newman’s display of the Infringement
was and is purposefully directed at Nevada residents.” (Doc. 1).
15141\1\1568931.1

20

contacts with Nevada are “random” or “attenuated,” both of which are insufficient to establish

3

purposeful availment and personal jurisdiction.

4

Righthaven cannot establish that Newman purposefully availed himself of the privilege of

5

conducting activities in Nevada, thus invoking the benefits and protections of its laws. See eg.,

6

id.

7

If the Court disagrees and finds purposeful availment by Newman, then the exercise of

8

jurisdiction over Newman would be unreasonable. For jurisdiction to be reasonable, it must

9

comport with fair play and substantial justice. See id. at 476. The burden of demonstrating

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

Nevada, or had legitimate Nevada customers. Indeed, the record establishes that Newman’s only

2

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

1

unreasonableness rests with the defendant, and the defendant must show a “compelling case.” Id.

11

at 476 – 77. Seven factors should be weighed in evaluating the reasonableness of exercising

12

personal jurisdiction in a given case:

See Burger King, 471 U.S. at 475.

Thus,

13
(1) the extent of the defendant’s purposeful interjection into the
forum state, (2) the burden on the defendant in defending in the
forum, (3) the extent of the conflict with the sovereignty of the
defendant’s state, (4) the forum state’s interest in adjudicating the
dispute, (5) the most efficient judicial resolution of the
controversy; (6) the importance of the forum to the plaintiff’s
interest and convenient and effective relief; and (7) the existence of
an alternative forum.

14
15
16
17
18

Bancroft & Masters, 223 F.3d at 1088 (citing Burger King, 471 U.S. at 476-77).

19

Analyzing the above factors, the extent of Newman’s purposeful interjection into the

20

forum state’s affairs was minimal. The Amended Complaint alleges only a single incidence.

21

“The smaller the element of purposeful interjection, the less the jurisdiction to be anticipated and

22

the less reasonable is its exercise.” Core-Vent Corp. v. Nobel Invest. AB, 11 F.3d 1482, 1488

23

(9th Cir. 1993) (citations omitted). Accordingly, this factor weighs against personal jurisdiction.

24

The second factor of reasonableness, the burden on defendants, weighs strongly against

25

jurisdiction. “The unique burdens placed upon one who must defend oneself in a foreign legal

26

system should have significant weight in assessing the reasonableness of stretching the long arm

27

of personal jurisdiction over national borders.” Asahi Metal Industry Co. v. Superior Court, 480

28

U.S. 102, 114 (1987). The use of an agent in the United States might alleviate a foreign
15141\1\1568931.1

21

1

defendant’s burden, see Core-Vent, 11 F.3d at 1488, but Newman does not have such an agent.

2

Newman Decl. at ¶ 14. Further, he has testified under oath that he has never travelled to Nevada.

3

Id. at ¶ 3. Newman has also testified that defending this action in Nevada would be unduly

4

burdensome and expensive for him. Id. at ¶ 18. Thus, this factor weighs strongly against

5

personal jurisdiction over Newman.

jurisdictional barrier than litigation against a citizen from a sister state because important

8

sovereignty concerns exist.” Sinatra v. National Enquirer, 854 F.2d 1191, 1199 (9th Cir. 1988).

9

The Court should presume that Great Britain has a sovereign interest in adjudicating the claim

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

Regarding the third factor, “litigation against an alien defendant creates a higher

7
BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

6

against a British individual resident. Doe v. Geller, 533 F. Supp. 2d 996, 1008 (N.D. Cal. 2008)

11

(citing Harris Rutsky and Co. Ins. Serv., Inc. v. Bell and Clements Ltd., 328 F.3d 1122, 1133 (9th

12

Cir. 2003)). Further, the website forum that is at the heart of this dispute is controlled from

13

England.

14

reasonableness of exercising jurisdiction over Newman.

15

Newman Decl. at ¶ 7.

Accordingly, this factor weighs strongly against the

The fourth factor, the forum state’s interest in adjudicating the dispute, weighs against the

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reasonableness of exercising jurisdiction over Newman.

Although Righthaven is the party

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plaintiff, the Agreement that it has with Stephen’s Media, LLC indicates that Stephen’s Media is

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the true owner of the underlying copyrights. Thus, Righthaven does not have standing. Further,

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Nevada “is not the worldwide regulator of free speech in the digital age.” Geller, 533 F. Supp. 2d

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at 1008. As discussed above, the Copyright Act was not intended by Congress to be applied

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extraterritorially. Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982, 987 (9th Cir. 2008).

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The District of Nevada “is not an international court of internet law.” Geller, 533 F. Supp. 2d at

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1009. Accordingly, this factor weighs against jurisdiction.

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The fifth factor, the most efficient judicial resolution of the controversy, weighs against

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jurisdiction. This factor requires the Court to evaluate where the witnesses and evidence are

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likely to be located. See Core-Vent, 11 F.3d at 1489. Given that the website is owned by a British

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company, whose sole offices are located in England, the witnesses and evidence are likely to be

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located in England.
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The sixth factor, the importance of the forum to the plaintiff’s interest in convenient and

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effective relief, weighs against jurisdiction in Nevada. Righthaven has not shown that the claim

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cannot be effectively remedied in England. See Geller, 533 F. Supp. 2d at 1010 (quoting Sinatra,

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854 F. 2d at 1200). Further, Righthaven fails to articulate any concerns that paint Nevada as

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“important” to its claim. Id.

jurisdiction over Newman. “The plaintiff bears the burden of proving the unavailability of an

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alternative forum.” Core-Vent, 11 F.3d at 1490. Righthaven has made no such showing that it

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would be precluded from suing in England. Righthaven’s preference of venues “is not the test.”

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

Finally, the seventh factor, the existence of an alternative forum, also weighs against

7
BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

6

Geller, 533 F. Supp. 2d at 1010 (quoting Roth v. Garcia Marquez, 942 F. 2d 617, 625 (9th Cir.

11

1991)).

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Just as in Geller, the balance of the above factors weighs against jurisdiction over

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Newman. There, the court found that it would be “unreasonable and unfair” to assert jurisdiction

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over British residents in a suit over an allegedly tortious facts sent to a third party in California.

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“Considering the international context, the heavy burden on the alien defendant, and the slight

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interests of the plaintiff in the forum State, the exercise and personal jurisdiction . . . in this

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instance would be unreasonable and unfair.” Asahi, 480 U.S. at 116.

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For all of the above reasons, the Court should find it unreasonable to exercise personal

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jurisdiction over Newman, even if it finds purposeful availment, which the facts dictate against.

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IV.

CONCLUSION

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For all of the above reasons, the Amended Complaint against Newman should be

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dismissed for lack of both subject matter jurisdiction and personal jurisdiction. Subject matter

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jurisdiction is lacking because Righthaven has no standing, as Stephens Media transferred to

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Righthaven only the right to sue for infringement, but none of the underlying copyrights

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enumerated in Section 106 of the Copyright Act. Further, the Copyright Act may not be applied

26

to infringement that occurs outside the borders of the United States, and here the infringement

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occurred in England. Similarly, personal jurisdiction is lacking over Newman because he does

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not own the Website; a British Limited Company does, providing Newman with a shield against
15141\1\1568931.1

23

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personal liability.

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justice” to force Newman to defend a lawsuit in Nevada. Newman is a resident of England who

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has never been in Nevada, nor conducted or solicited business there.

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demonstrate that Newman purposely availed himself of the benefits of the laws of Nevada, or that

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the effects of the alleged infringement were targeted into or felt specifically in Nevada.

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Accordingly, this Amended Complaint should be dismissed with prejudice.

Further, it would violate “traditional notions of fair play and substantial

Righthaven cannot

Righthaven’s motivation in filing suit against Newman is suspect. Even if Righthaven

8

were deemed the prevailing party, it would not be entitled to recover either statutory damages or

9

attorneys’ fees against Newman, since copyright registration for the Article was not obtained until

10
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

7

after the alleged infringement. Statutory damages and attorneys’ fees are available only where

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registration is obtained prior to infringement commencing.

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Apparel Corp., 528 F.3d 696, 700-01 (9th Cir. 2008). The Amended Complaint alleges that the

13

infringement commenced on September 25, 2010, but registration for the copyright was not

14

secured until October 6, 2010. Compare Doc. 21 at ¶ 20 with id. at ¶ 31. Even if Righthaven

15

could surmount the challenges of subject matter and personal jurisdiction, which it cannot, it

16

would be entitled to very little other possible relief. Thus, these facts indicate that Righthaven’s

17

true motivation is to target and extract settlements from specific defendants, like Newman, who

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will have difficulty defending against litigation (because of cost or distance or, in this case, both).

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Further, Righthaven cannot claim with a straight face that it has been harmed. Righthaven

20

acknowledges that the Website attributed The Las Vegas Review-Journal as the original source of

21

the Article for the entire time in which the Article appeared on the Website. See Doc. 21 at ¶ 17.

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As soon as he learned of the Amended Complaint, Newman disabled the thread to the post on the

23

Website, (Newman Decl. at ¶ 12), thus satisfying that portion of Righthaven’s prayer for relief

24

seeking that the reproduction be removed. See Am. Compl., at Prayer for Relief.

See Derek Andrew, Inc. v. Poof

25

Finally, as Judge Hunt found in dismissing Righthaven’s Amended Complaint against

26

Democratic Underground, Righthaven’s only right under the SAA is to “bring and profit from

27

copyright infringement actions.”

28

possesses none of the rights provided in Section 106 of the Copyright Act.
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Democratic Underground, 2011 WL 2378186, at *2.

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It

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For all the reasons stated above, Righthaven’s Amended Complaint against Newman must
be dismissed.
DATED this 1st day of August, 2011.

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BROWNSTEIN HYATT FARBER SCHRECK LLP

5
By: /s/ Anthony J. DiRaimondo
Kirk B. Lenhard, Nevada Bar No. 1437
Anthony J. DiRaimondo, Nevada Bar No. 10875
100 N. City Parkway, Suite 1600
Las Vegas, NV 89106
[e-mail]
[e-mail]
[phone]

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

7

BONE McALLESTER NORTON PLLC

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By: /s/ Stephen J. Zralek
Stephen J. Zralek, Admitted pro hac vice
511 Union Street, Suite 1600
Nashville, TN 37212
[e-mail]
[phone]

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Attorneys for Defendant
GARRY NEWMAN

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CERTIFICATE OF SERVICE

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Pursuant to Fed.R.Civ.P.5(b), and Section IV of District of Nevada Electronic Filing

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Procedures, I certify that I am an employee of BROWNSTEIN HYATT FARBER SCHRECK,

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LLP, and that on the 1st day of August, 2011, the foregoing DEFENDANT GARRY

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NEWMAN’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT FOR LACK

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OF SUBJECT MATTER JURISDICTION AND LACK OF PERSONAL JURISDICTION

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BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 SEVENTEENTH STREET, SUITE 2200
DENVER, CO 80202-4432

BROWNSTEIN HYATT FARBER SCHRECK, LLP, A LAW CORPORATION

7

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was served via electronic service to the address shown below:
Shawn A. Mangano, Esq.
SHAWN A. MANGANO, LTD.
9960 West Cheyenne Ave., Suite 170
Las Vegas, NV 89129-7701
[e-mail]
Attorney for Plaintiff
Righthaven, LLC

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/s/ Paula Kay
an employee of Brownstein Hyatt Farber Schreck, LLP

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15141\1\1568931.1

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