John Wiley & Sons, Inc. v. Supap Kirtsaeng et al

Filing 13

FIRST OPPOSITION BRIEF re: 5 Order to Show Cause,,. Document filed by Supap Kirtsaeng.(Israel, Sam)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------------X
JOHN WILEY & SONS, INC.,
08 CV 7834
Plaintiff
Lynch, G, USDJ
-againstSUPAP KIRTSAENG D/B/A BLUECHRISTINE99
and JOHN DOE NOS. 1-5,
Defendants
___________________________________________X

DEFENDANTS’ MEMORANDUM OF LAW
IN OPPOSITION TO MOTION FOR PRELIMINARY
INJUNCTION AND ORDER OF ATTACHMENT

Dated: New York, New York
May 6, 2009
Respectfully submitted:
Sam P. Israel, P.C.
Sam P. Israel (SPI0270)
Attorney for Defendant
Supap Kirtsaeng
Twenty Third Floor
New York, NY 10006
Tel: [phone]
Fax: [phone]

TABLE OF CONTENTS
I. PRELIMINARY STATEMENT …………………………………………..1
II. FACTS APPLICABLE TO THE MOTION ………………………………3
III.ARGUMENT………………………………………………………………5
POINT 1. THE PLAINTIFF IS NOT ENTITLED TO AN ORDER OF
ATTACHMENT………………………………………………………………5
A. The Standard: Attachment Is Discretionary and It Is the
Plaintiff’s Burden to Prove That Drastic Action Is Required ……………….5
B. The Plaintiff Has Not Submitted Evidence Supporting
Their Contention That The Defendants Are Acting With
Intent To Defraud…………………………………………………………….6
POINT 2.THE PLAINTIFF IS NOT ENTITLED TO
A PRELIMINARY INJUNCTION…………………………………………..10
A.The Plaintiff Has Not Shown a Risk of Irreparable Injury………………...10
B. The Plaintiff Has Not Demonstrated a Likelihood
of Success On the Merits……………………………………………………...11
IV. CONCLUSION……………………………………………………………12

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------------X
JOHN WILEY & SONS, INC.,
08 CV 7834
Plaintiff
Lynch, G, USDJ
-againstSUPAP KIRTSAENG D/B/A BLUECHRISTINE99
and JOHN DOE NOS. 1-5,
Defendants
___________________________________________X
DEFENDANT’S MEMORANDUM OF LAW
IN OPPOSITION TO MOTION FOR PRELIMINARY
INJUNCTION AND ORDER OF ATTACHMENT
Defendant Supap Kirtsaeng (“Kirtsaeng” or “Defendant”), by his counsel, Sam P.
Israel, P.C., submits this memorandum of law, together with his declaration (the “Kirtsaeng
Decl.”) and the declaration of counsel (the “Israel Decl.”) in opposition to the motion (the
“Motion”) of Plaintiff John Wiley & Sons, Inc., (“Plaintiff” or “Wiley”) seeking a
preliminary injunction and an order of attachment pursuant to Rule 64 of the Federal Rules
of Civil Procedure (“Fed. R. Civ. P.”) and sections 6201 and 6212 of New York Civil
Practice Law and Rules (the "C.P.L.R.") as follows:
I.
PRELIMINARY STATEMENT
There is no question that attachment is a very “drastic” remedy, one which Courts
are authorized to deny even where the statutory prerequisites are met. Yet, in support of its
Motion, the Plaintiff does not even attempt to demonstrate that it has met the demanding
requirements of CPLR §6201 (as applicable through Fed. R. Civ. P. 64). A motion for an
attachment turns on the issue of whether the relief is necessary to obtain jurisdiction over a

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party or whether there is an urgent need to preserve a defendant’s assets in order to prevent
their intentional dissipation.
Here, the Court has already exercised personal jurisdiction over the Defendant. With
respect to the Defendant’s assets: the issue is not simply a matter of whether there will be
available assets to pay a judgment; as has been repeatedly recognized—and discussed more
fully below-- the inquiry is whether there is evidence of an intent to thwart a later collection
effort by the Plaintiff— assuming it was to obtain a judgment.1
In connection with the preliminary injunction prong of the Motion, Wiley focuses on
the ostensible merits of its copyright infringement claim. While its arguments may have
force at trial or even in the context of a summary judgment motion, standing alone they are
inadequate to achieve the equitable relief sought in the Motion.
In this context, it is also necessary to focus on the measure of the potential recovery
the Plaintiff stands to achieve. The Plaintiff seeks monetary damages on the basis of profits
that are negligible by any objective measure. While the Plaintiff makes use of sales figures
derived from the Defendant’s sales of an array of text books, only a fraction of them were
Wiley books. And the Defendant’s profits amount to an even smaller fraction of that
number. Plus, any recovery would need to be set off by amounts the Plaintiff itself received
on these sales, for the Plaintiff collected royalties on every foreign Wiley book sold by the
Defendant. (Wiley, in fact, profited from the same conduct it sues upon.)2

Critically, with respect to this Motion, there is no evidence whatsoever that the Defendant
has ever sought to secrete assets, fraudulently convey them or to otherwise do anything to
suggest that he might frustrate a judgment favorable to the Plaintiffs. The record does not
warrant this Court’s exercise of discretionary power to freeze the Defendant’s assets.
1

See Original Appalachian Artworks, Inc. v. Granada Electronics, Inc., 1986 U.S. Dist.
LEXIS 29114 (S.D.N.Y. Feb. 20, 1986) (Israel Decl. Exh 1)(“…OAA collects a royalty
from Jesmar for every foreign doll that allegedly infringes OAA's American copyrights.
2

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Wiley itself has made it impossible for the Defendant to ascertain the amount it
made off the Defendant’s sales by reason its refusal to supply the data. According to the
Plaintiff, the information is not relevant to the case, see Israel Decl. Exh. 2 (the Plaintiff’s
interrogatory responses) at Interrogatory Response No. 4, p. 3; yet Wiley likely made far
more money on the Defendant’s sales than the Defendant did. The Plaintiff’s insistence that
the data is irrelevant translates a concession that the gravity of its damages are as well. 3
Moreover, that the Defendant sold eight Wiley titles in the United States should
come as no surprise to the Plaintiff (as is it suggests in the Motion); this was admitted in
Kirtsaeng’s interrogatory responses. See Kirtsaeng Decl. at 12; Israel Decl., Exh.7 thereto.

II.
FACTS APPLICABLE TO THE MOTION
The Defendant is a doctoral candidate in the area of differential geometry at the
University of Southern California. He moved to the United States from Thailand
approximately in 1997 to pursue a Bachelor of Science degree in mathematics at Cornell
University; four years later he was awarded his degree. Kirtsaeng was able to obtain his

Thus, depending on the royalties OAA receives from Coleco and Jesmar for each doll they
produce, OAA may not suffer any direct monetary harm from Granada's alleged
infringement, let alone an irreparable one. If Jesmar pays OAA a larger royalty per doll than
Coleco, OAA may even benefit financially from Granada's alleged infringement, even
assuming that every Jesmar doll sold means that one less Coleco doll is sold, which is not at
all apparent on the present record.”).
Wiley also made profits on books that the Defendant brought overseas and did not sell in
time. Wiley, as well as other publishers update their editions frequently; this requires
additional purchases by reason of the forced obsolescence of certain volumes. They do so
without notice, meaning that the Defendant was often left with books that were updated and
un-saleable. Ultimately-- in many instances the Defendant sustained net losses while Wiley
made profits. Kirtsaeng Decl. at ¶ 15.

3

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undergraduate degree only by reason of an academic scholarship granted him by Thailand.
Yet, in financing the Defendant’s undergraduate education, Thailand required his
commitment to return to his country at a later date to provide governmental services.
Kirtsaeng Decl. at ¶ 4.
The Defendant has received only negligible funding in connection with his graduate
training and was hard-pressed to earn funds to meet his tuition requirements when some of
his friends from Thailand informed him of how they were able to pay for their advanced
educations by selling books online. They sold legitimate copyright- bearing text books
originally acquired from overseas publishers. Unlike his friends, however, Kirtsaeng did not
personally bring books from overseas into this country; they were shipped to California via
UPS express and ocean freight as directed by friends and family (who I would later
reimburse from sales I would make on eBay). Kirtsaeng Decl. at ¶6.
All of the books sold by the Defendant had notices stating that the books are
copyrighted in the Untied States, See Kirtsaeng Decl., Exhibit 1, meaning that they are
"lawfully made” under U.S. Copyright law and therefore susceptible to legal resale.
Kirtsaeng Decl. at ¶8.
With regard to the attachment issue, the Defendant has not sought to secrete assets.
Admittedly, he has withdrawn funds to repay family and friends in anticipation of his
graduation from USC. He also has no intention of continuing to sell books since he no
longer need funds to pay for his education or to repay people for their loans. In short,
notwithstanding the veil of mystery the Plaintiff seeks to impress upon these events, the
Defendant had no further need to maintain funds in his PayPal account. The Defendant
engaged in no clandestine activities; he just shut down his business in anticipation of
graduation and moving back home. Kirtsaeng Decl. at ¶ 11.
4

The numbers cited by Wiley are vastly misleading in that they are mostly comprised
of proceeds form the sales of books published by others and also make no allowance for the
Defendant’s costs and expenses. Moreover, Wiley itself made profits on the Defendant’s
sales including sales made by its affiliate John Wiley & Sons (Asia) Pte Ltd. When one
takes into account the money Wiley made on the sales, the Plaintiff may have ultimately
turned more of a profit on the Defendant’s activities than the Defendant did. Kirtsaeng
Decl. at ¶¶14-15.
III.
ARGUMENT
POINT 1
THE PLAINTIFF IS NOT ENTITLED TO AN ORDER OF ATTACHMENT
A. The Standard:
Attachment Is Discretionary and It Is the
Plaintiff’s Burden to Prove That Drastic Action Is Required
In general “the granting of prejudgment attachments is discretionary, ‘and even
when the statutory requisites are met, the order may be denied.'" Lehman Bros. Fin. S.A. v.
Shenkman, 2001 U.S. Dist. LEXIS 13446, 5-6 (S.D.N.Y. Aug. 31, 2001) (Israel Decl. Exh.
3; emphasis added) citing Elliott Assocs., L.P. v. Republic of Peru, 948 F. Supp. 1203, 1211
(S.D.N.Y.1996), quoting, in turn, Filmtrucks, Inc. v. Earls, 635 F. Supp. 1158, 1162
(S.D.N.Y.1986).
“Because attachment is a harsh remedy, the statute must be strictly construed in
favor of those against whom it may be applied.” Encore Credit Corp. v. Lamattina, 2006
U.S. Dist. LEXIS 2935 (Jan. 18, 2006 E.D.N.Y.) (Israel Decl. Exh. 4), citing Michaels Elec.
Supply Corp. v. Trott Elec. Inc., 231 A.D.2d 695, 647 N.Y.S.2d 839 (2d Dep’t. 1996); P.T.
Wanderer Assoc., Inc. v. Talcott Communications, Corp., 111 A.D.2d 55, 489 N.Y.S.2d 179

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(1st Dep’t. 1985).“Attachment has been recognized to entail ‘harsh consequences’ and
courts have been advised to grant it ‘only upon a showing that drastic action is required for
security purposes.’" Lehman Bros. Fin. S.A. v. Shenkman, 2001 U.S. Dist. LEXIS 13446,
5-6 (S.D.N.Y. Aug. 31, 2001) (Israel Decl. Exh.3)(Emphasis added) quoting Incontrade,
Inc. v. Oilborn Int'l., S.A., 407 F. Supp. 1359, 1361 (S.D.N.Y. 1976).
Further, “it also bears emphasis… the burden remains on plaintiff to show that it is
necessary; defendants are not obligated to prove that it is not.” Id. See also General Re Fin.
Prods. Corp. v. Southern Cal. Edison Co., 2001 U.S. Dist. LEXIS 1117, 2-3 (S.D.N.Y. Feb.
8, 2001)(“plaintiff must present evidence that defendant is deliberately trying to remove
assets from the state with the purpose of frustrating plaintiff's future judgment.”)(Israel
Decl. Exh. 5).

B. The Plaintiff Has Not Submitted Evidence Supporting
Its Contention That The Defendant Is Acting With The Intent To Defraud

Fed. R. Civ. P. 64 provides for the "seizure of person or property for the purpose of
securing satisfaction ultimately to be entered in the action . . . under the circumstances and
in the manner provided by the law of the state in which the district court is held. . . ." Fed.
R. Civ. P. 64.
Under New York law, attachment is available if:
(1) the defendant is a nondomiciliary residing without
the state, or is a foreign corporation not qualified to do
business in the state; or (2) the defendant resides or is
domiciled in the state and cannot be personally served despite
diligent efforts to do so; or (3) the defendant, with intent to
defraud his creditors or frustrate the enforcement of a
judgment that might be rendered in plaintiff's favor, has
assigned, disposed of, encumbered or secreted property, or
removed it from the state or is about to do any of these acts; or
(4) the action is brought by the victim or the representative of
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the victim of a crime . . . . or (5) the cause of action is based
on a judgment, decree or order of a court of the United States
or of any other court which is entitled to full faith and credit . .
N.Y.C.P.L.R. § 6201.
“However, as CPLR 6212(a) makes clear, the court cannot issue an order of
attachment solely because the requirements of CPLR 6201 have been met.” General Textile
Printing & Processing Corp. v. Expromtorg Int'l Corp., 862 F. Supp. 1070, 1073-1074
(S.D.N.Y. 1994).This Court has interpreted New York’s CPLR 6201 as advancing two
possible bases for an attachment: 1) to obtain jurisdiction over a non-resident defendant or
2) to secure a judgment where a defendant has evinced the intent to secret assets. Ames v.
Clifford, 863 F. Supp. 175 (S.D.N.Y. 1994)(attachment “serves two independent purposes:
obtaining jurisdiction over and securing judgments against non-domiciliaries residing
without the State of New York. …When a defendant is a resident of the State of New York
and, therefore, subject to the jurisdiction of the court, attachment is only permitted upon a
showing that defendant is attempting to dispose of his assets in order to frustrate the ability
of plaintiff to collect any judgment that might ultimately be obtained.”).
Here, the Court has already exercised personal jurisdiction over the Defendant and
“[w]hen jurisdiction already exists, attachment should issue only upon a showing that
drastic action is required for security purposes."4 Reading & Bates Corp. v. National Iranian
Oil Co., 478 F. Supp. 724, 726 (S.D.N.Y. 1979); see also First National Bank of Downsville
v. Highland Hardwoods, Inc., 98 A.D.2d 924, 926, 471 N.Y.S.2d 360, 362 (3rd Dep't 1983).
This, in turn requires a showing of intent to thwart the prospective recovery. And,
again, in this regard, "’it is incumbent upon [the plaintiff] to demonstrate that the defendant

4

For its part, the Plaintiff itself claims that “Kirtsaeng is subject to, and has not challenged,
the personal jurisdiction of this Court.” Pl. Memo. at 2.
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is acting with intent to defraud. Fraud is not lightly inferred, and the moving papers must
contain evidentiary facts -- as opposed to conclusions -- proving the fraud.’" Colon v. Cole
Bros. Circus, Inc., 2007 U.S. Dist. LEXIS 76473, 7-8 (Oct. 12, 2007 E.D.N.Y.) (Israel Decl.
Exh.6), quoting Brastex Corp. v. Allen Int'l, Inc., 702 F.2d 326, 331-32 (2d Cir. 1983)
(affirming district court's denial of attachment where plaintiffs' sole evidence of fraudulent
intent was defendant's violation of agreement with plaintiff and "shaky financial condition")
(citation and quotation marks omitted) and citing Arias-Zeballos v. Tan, 06-CV-1268, 2007
U.S. Dist. LEXIS 5069, at *11-*12 (S.D.N.Y. Jan. 24, 2002) ("[I]t is incumbent upon a
plaintiff to show, by affidavit or other competent evidence, the fraudulent intent of a
defendant in disposing of, encumbering, removing or secreting his or her property to . . .
frustrate the enforcement of a judgment that might be obtained in the future. Absent such a
showing, the mere possibility that a defendant may remove assets from New York is too
remote to justify prejudgment attachment."); see also General Textile Printing & Processing
Corp. v. Expromtorg Int'l Corp., 862 F. Supp. 1070, 1074 (S.D.N.Y. 1994)(“the papers
submitted by plaintiff and the arguments presented to this Court fail to show that defendant
possesses any intent to defraud. See Philatelic Foundation, 1986 WL 5629 * 3-4. ‘To
determine whether attachment for security purposes is justified, it is necessary to examine
subsection (3) of § 6201. Under CPLR § 6201(3), “'it is incumbent upon [plaintiff] to
demonstrate that the defendant is acting with intent to defraud'"); see also Computer
Strategies v. Commodore Business Machines, 105 A.D.2d 167, 172, 483 N.Y.S.2d 716, 721
(2d Dep't 1984) (mere removal or assignment or other disposition of property not grounds
for attachment absent an actual showing of fraudulent intent) reh'g denied, 110 A.D.2d 743,
488 N.Y.S.2d 616 (2d Dep't 1985).

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Applicable to the case at Bar, in Ames v Clifford, 863 F Supp 175 (1994, SD NY),
the Court held that even where defendant was liquidating her real property assets,
transferring much of her art collection to France, and expressing interest in purchasing
residence in Paris, attachment under CPLR § 6201(1) was not warranted. There, as here, the
defendant had provided reasonable explanations for all purported "transfers" of assets, and
there, as here, the plaintiff produced nothing other than guesses as to a defendant’s
“uncertain financial condition.”
Wiley presents no affidavit by a witness with personal knowledge of a “fraudulent
intent…. in disposing of, encumbering, removing or secreting his or her property to . . .
frustrate the enforcement of a judgment that might be obtained in the future.” AriasZeballos v. Tan, 06-CV-1268, 2007 U.S. Dist. LEXIS 5069, at *11-*12 (S.D.N.Y. Jan. 24,
2002); see also Encore Credit Corp. v. Lamattina, 2006 U.S. Dist. LEXIS 2935 (Jan. 18,
2006 E.D.N.Y.); Reading & Bates Corp. v. Nat'l Iranian Oil Co., 478 F. Supp. 724, 727
(S.D.N.Y. 1979).
Accordingly, the Plaintiff has not even begun to meet its burden and relief should be
denied under New York’s attachment statute. See, e.g., Colon v. Cole Bros. Circus, Inc.,
2007 U.S. Dist. LEXIS 76473, 4-5 (Oct. 12, 2007 E.D.N.Y.) (Israel Decl. Exh. 6); General
Re Fin. Prods. Corp. v. Southern Cal. Edison Co., 2001 U.S. Dist. LEXIS 1117, 2-3 (Feb. 8,
2001 S.D.N.Y.)(it is the plaintiff’s burden to submit evidence that the defendant is
deliberately trying to remove assets from the state).
The record does warrant the Court’s exercise of its discretionary power to freeze the
Defendant’s remaining assets under either subsections of N.Y.C.P.L.R §6201.

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POINT 2
THE PLAINTIFF IS NOT ENTITLED TO A PRELIMINARY INJUNCTION
Within the Second Circuit, a preliminary injunction may be granted only upon a
showing of "(a)) irreparable harm and (b) either (1) likelihood of success on the merits or
(2) sufficiently serious questions going to the merits to make them a fair ground for
litigation and a balance of hardships tipping decidedly toward the party requesting the
preliminary relief.'" Hasbro Bradley, Inc. v. Sparkle Toys, Inc., 780 F.2d 189,192 (2d Cir.
1985), quoting Jackson Dairy. Inc. v. H.P. Hood & Sons. Inc., 596 F.2d 70, 72 (2d Cir.
1979). It is incumbent upon the movant to prove each element. E.g., Bell & Howell:
Mamiya Co. v. Masel Supply Co., 719 F.2d 42, 45 (2d Cir. 1983).

A. The Plaintiff Has Not Shown a Risk of Irreparable Injury
The Plaintiff relies upon a presumption of irreparable injury in the copyright context
and complains about lost sales opportunities. See Pl. Memo. at 11. The Court addressed
these arguments in a very similar context in Original Appalachian Artworks, Inc. v. Granada
Electronics, Inc., 1986 U.S. Dist. LEXIS 29114 (S.D.N.Y. Feb. 20, 1986) (Israel Decl. Exh.
1). There, the Plaintiff brought suit against a defendant who was selling foreign dolls in the
Untied States and the Court addressed Wiley’s very arguments as follows:
I am aware that irreparable harm may ordinarily be presumed
in a copyright infringement action. Hasbro Bradley, slip op. at
673; Wainwright Sec., Inc. v. Wall St. Transcript Corp., 558
F.2d 91, 94 (2d Cir. 1977), cert. denied, 434 U.S. 1014
(1978); Robert Stigwood Group Ltd. v. Speber, 457 F.2d 50,
55 (2d Cir. 1972). This is not, however, the ordinary case.
This case is peculiar in that OAA collects a royalty from
Jesmar for every foreign doll that allegedly infringes OAA's
American copyrights. Thus, depending on the royalties
OAA receives from Coleco and Jesmar for each doll they
produce, OAA may not suffer any direct monetary harm

10

from Granada's alleged infringement, let alone an
irreparable one. If Jesmar pays OAA a larger royalty per doll
than Coleco, OAA may even benefit financially from
Granada's alleged infringement, even assuming that every
Jesmar doll sold means that one less Coleco doll is sold,
which is not at all apparent on the present record.
Id. (emphasis added.)
The Plaintiff has itself undercut its position in this regard by refusing to identify the
amounts it achieved on the Defendant’s sales in its interrogatory responses. See Israel Decl.
Exh. 2 at Interrogatory Response No. 4, p. 3. In short, the Plaintiff is not poised to maintain
a position as to the gravity of its damages or the quantum of its alleged losses since it has
elected to withheld the very information from the Defendant that would have permitted such
an assessment.
B. The Plaintiff Has Not Demonstrated a Likelihood of Success On the Merits.
The Supreme Court has made it crystal clear that that the so- called first sale
doctrine, see 17 U.S.C. § 109, provides that, "once a copyright owner places a copyrighted
item in the stream of commerce by selling it, he has exhausted his exclusive statutory right
to control its distribution." Quality King Distributors, Inc. v. L'Anza Research Int'l, Inc., 523
U.S. 135, 152 (1998). "[T]he copyright holder, notwithstanding the exclusive distribution
right conferred by Section 106(3) of the Copyright Act, is deemed by its 'first sale' of a copy
of the copyrighted work to have consented to [the] subsequent sale of the copy." Universal
City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 317 n. 137 (S.D.N.Y. 2000).
Significantly, the doctrine applies only to copies that are "lawfully made under this
title." Id. at 152. Yet, here, the volumes sold by the Defendant were lawfully made under
Section 106(3) of the Copyright Act since each of the books bears a copyright notice
indicating exactly that. See Kirtsaeng Decl., Exhibit 1. In fact, the Plaintiff insists that “the

11

fact that Wiley authorized the printing of the textbooks in a foreign country is irrelevant” to
whether they were lawfully made, Pl. Memo. at 14, thereby conceding the applicability of
the defense.5
Moreover, there is an issue as to whether Wiley is even the correct party to prosecute
at least a portion of the copyright claim against the Defendant. As can be seen in Exhibit 1
to the Kirtsaeng Decl., the inside flap of one of the books reveals that its copyright is owned
by John Wiley & Sons (Asia) Pte Ltd. which entity is not a party to this action and whose
identity—in relation to the Plaintiff has not been established.
IV.
CONCLUSION
For the foregoing reasons, the Defendant respectfully submits that the Motion should
be denied in its entirety and the Court should grant such other and further relief that it
deems just and proper.

Respectfully submitted:
Sam P. Israel, P.C.
Dated: New York, New York
May 6, 2009

By:S/______________________
Sam P. Israel (SPI0270)
Attorney for Defendant Supap
Kirtsaeng
Twenty Third Floor
New York, NY 10006
Tel: [phone]
Fax: [phone]

This case also presents an issue as to whether the transshipment of the allegedly infringing
goods triggers the claim or whether the sale in the US of foreign copyrighted goods,
independent of how they arrived here is sufficient to trigger a claim. In the cited cases the
defendants physically brought the goods into the United States; Kirtsaeng did not.
5

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