Pablo Star Ltd. v. The Welsh Government et al
Filing
125
OPINION AND ORDER: re: 105 MOTION to Dismiss . filed by The Welsh Government. For the foregoing reasons, the Welsh Governments motion to dismiss is DENIED. The Welsh Government is directed to file an answer to the Second Amended Complaint within 21 days of the date of this Opinion. The Clerk of Court is directed to close the motion at Docket Number 105. SO ORDERED. (Signed by Judge J. Paul Oetken on 3/29/2019) (js)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PABLO STAR LTD., et al.,
Plaintiffs,
15-CV-1167 (JPO)
-vOPINION AND ORDER
THE WELSH GOVERNMENT, et al.,
Defendants.
J. PAUL OETKEN, District Judge:
Plaintiffs Pablo Star Ltd. and Pablo Star Media Ltd., two related companies organized
and registered under the laws of Ireland and the United Kingdom, own the copyrights to two
photographs depicting the poet Dylan Thomas. Plaintiffs have sued Defendants the Welsh
Government, Tribune Content Agency, LLC (“TCA”), and certain John Does for having
allegedly infringed their copyrights in these two photographs in violation of the Copyright Act,
17 U.S.C. §§ 101 et seq. (Dkt. No. 99 (“SAC”).) Before the Court now is the Welsh
Government’s motion to dismiss Plaintiffs’ claims asserted against it in the operative Second
Amended Complaint. (Dkt. No. 105.) For the reasons that follow, the motion is denied.
I.
Background
Familiarity with the background of this dispute is presumed based on this Court’s prior
opinions addressing the Welsh Government’s earlier-filed motion to dismiss, see Pablo Star Ltd.
v. Welsh Gov’t, 170 F. Supp. 3d 597 (S.D.N.Y. 2016), Plaintiffs’ motion for reconsideration of
the Court’s opinion granting in part and denying in part that motion to dismiss, see Pablo Star
Ltd. v. Welsh Gov’t, No. 15 Civ. 1167, 2016 WL 2745849 (S.D.N.Y. May 11, 2016), and
Plaintiffs’ motion for leave to file a Second Amended Complaint against the Welsh Government,
see Pablo Star Ltd. v. Welsh Gov’t, No. 15 Civ. 1167, 2018 WL 2041715 (S.D.N.Y. May 1,
1
2018). The Court details below only those aspects of this case’s facts and procedural history
most relevant to the instant motion.
On February 18, 2015, Plaintiffs commenced this action against the Welsh Government
and various media companies for infringement of Plaintiffs’ copyrights in two photographs
depicting the poet Dylan Thomas. (Dkt. No. 1.) The nub of Plaintiffs’ claims against the Welsh
Government is that it has “published, displayed, distributed, and otherwise used unauthorized
copies of Plaintiff[s’] copyrighted photographs to in [sic] advertisements, publications, and other
promotional materials directed at and specifically targeted towards New York residents,” all with
the purpose of increasing tourism to Wales. (Dkt. No. 1 ¶¶ 11–13; see also Dkt. No. 26 ¶¶ 29–30
(similar allegations in Plaintiffs’ First Amended Complaint).)
By an Opinion and Order dated March 16, 2016, this Court granted the Welsh
Government’s motion to dismiss all claims asserted against it in Plaintiffs’ First Amended
Complaint on the grounds of improper service and improper venue. (Dkt. No. 53.) With respect
to venue, the Court held in relevant part that Plaintiffs had not alleged facts sufficient to justify
venue in this district because they had
not alleged that any of the specific conduct at issue occurred in this district, let
alone a “substantial part” of it. Neither Plaintiffs nor the Welsh Government
reside in the United States. The only concrete infringing materials that Plaintiffs
can identify are materials that were available online. But the fact that an
infringing material is accessible via the internet in a jurisdiction is hardly
sufficient to conclude that this infringement occurred in this district for the
purposes of venue. Indeed, all of the Welsh Government’s relevant conduct—
including the creation and maintenance of the websites at issue—appears to have
occurred abroad. On this basis, the Court cannot conclude that a substantial part
of the events giving rise to this claim occurred in New York.
(Dkt. No. 53 at 16 (internal citations and footnotes omitted).) Plaintiffs then moved for
reconsideration of that decision (Dkt. No. 58), and the Court denied that motion on May 11, 2016
(Dkt. No. 65).
2
Plaintiffs subsequently moved for leave to replead their allegations against the Welsh
Government (Dkt. No. 73), attaching to their motion a proposed new pleading that is now the
operative Second Amended Complaint (compare Dkt. No. 75-1, with Dkt. No. 99). Defendant
TCA filed an opposition to Plaintiffs’ motion for leave to replead, asserting in substance that
granting Plaintiffs leave to replead would be futile because this district remained an improper
venue for Plaintiffs’ claims against the Welsh Government. (Dkt. No. 78.) The Court disagreed.
By an Opinion and Order dated May 1, 2018, the Court granted Plaintiffs leave to file the Second
Amended Complaint, holding that Plaintiffs’ new “allegations, taken as true, plausibly
establish[ed] that the Welsh Government undertook significant actions in this district that [were]
material to its allegedly unauthorized copying of Plaintiffs’ photographs.” (Dkt. No. 96 at 5.)
Among “Plaintiffs’ factual allegations [relevant to that conclusion] include[d] the following:
The Welsh Government has a permanent presence in New York and maintains
offices in New York City. The Welsh Government created infringing
“promotional materials” such as “advertisements, brochures, pamphlets, [and]
New York City walking tour maps,” which included unauthorized copies of
Plaintiffs’ photographs. In addition, the Welsh Government created display
panels for an exhibition called “Welsh in America,” which made unauthorized use
of Plaintiffs’ photographs. Prior to creating these materials, the Welsh
Government drafted a report detailing its strategies to promote tourism to Wales,
and identified the United States as one of its key target markets.
Moreover, Plaintiffs allege, on information and belief, that “the Welsh
Government distributed and loaned out copies” of the infringing promotional
materials from its offices in New York City, and loaned out and “publicly
displayed the infringing panels of the Welsh in America exhibition in New York
City.”
(Dkt. No. 96 at 4–5 (citing SAC ¶¶ 16, 18, 22–23; 27–29; 32–34; Dkt. Nos. 75-2, 75-3)
(footnotes omitted).) In response to TAC’s contention that the Court had previously rejected
similar arguments when denying Plaintiffs’ motion for reconsideration, the Court explained that
“unlike at the motion-for-reconsideration stage, the Court . . . [was required to] draw all
3
inferences in favor of Plaintiffs” in connection with their motion to replead, and concluded that
“any deficiencies addressed in the Court’s opinion on reconsideration ha[d] been remedied by
the plausible information-and-belief allegations of the” Second Amended Complaint. (Dkt. No.
96 at 6 n.5.) Finally, the Court also declined to address TAC’s one-sentence suggestion that the
Welsh Government might be immune from suit on the basis of sovereign immunity, explaining
that the “Welsh Government will be free to raise any immunity defense on its own behalf in
response to the SAC.” (Dkt. No. 96 at 7 n.6.)
Plaintiffs filed the operative Second Amended Complaint on May 8, 2018. (Dkt. No. 99.)
The Welsh Government has now filed a motion to dismiss Plaintiffs’ newly repleaded claims
against it pursuant to Federal Rule of Civil Procedure 12(b)(1), asserting that it is immune from
suit on the basis of sovereign immunity. (Dkt. Nos. 105, 106 at 1.)
II.
Legal Standard
The Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1602 et seq., “is the sole
source for subject matter jurisdiction over any action against a foreign state,” Kensington Int’l
Ltd. v. Itoua, 505 F.3d 147, 154 (2d Cir. 2007) (quoting Cabiri v. Gov’t of the Republic of
Ghana, 165 F.3d 193, 196 (2d Cir. 1999)). The FSIA provides that “a foreign state or an
‘agency or instrumentality of a foreign state[]’ is immune from federal court jurisdiction unless a
specific exception to the FSIA applies.” Anglo-Iberia Underwriting Mgmt. Co. v. P.T.
Jamsostek, 600 F.3d 171, 175 (2d Cir. 2010) (quoting 28 U.S.C. § 1603(b)).
“When [a] defendant claims immunity under the FSIA,” that defendant must first
“present[] a prima facie case that it is a foreign sovereign.” Figueroa v. Ministry of Foreign
Affairs of Swed., 222 F. Supp. 3d 304, 307 (S.D.N.Y. 2016) (second quoting Cargill Int’l S.A. v.
M/T Pavel Dybenko, 991 F.2d 1012, 1016 (2d Cir. 1993)). “Once the defendant presents a prima
facie case that it is a foreign state [within the meaning of the FSIA], ‘the plaintiff [then] has the
4
burden of going forward with evidence showing that, under exceptions to the FSIA, immunity
should not be granted.’” Kensington, 505 F.3d at 153 (quoting Cabiri, 165 F.3d at 196). Once a
Plaintiff has satisfied this burden, “the defendant must show that the alleged exception does not
apply by a preponderance of the evidence.” Anglo-Iberia, 600 F.3d at 175 (emphasis added)
(internal quotation marks omitted). “The ultimate burden of persuasion remains with the alleged
foreign sovereign.” Kensington, 505 F.3d at 153 (quoting Cabiri, 165 F.3d at 196).
“Determining whether [a plaintiff’s] burden is met involves a review of the allegations in
the complaint, the undisputed facts, if any, placed before the court by the parties, and—if the
plaintiff comes forward with sufficient evidence to carry its burden of production on this issue—
resolution of disputed issues of facts.” Anglo-Iberia, 600 F.3d at 175 (quoting In re Terrorist
Attacks on Sept. 11, 2001, 538 F.3d 71, 80 (2d Cir. 2008)). Accordingly, when considering a
motion to dismiss for lack of subject matter jurisdiction on the basis of sovereign immunity, “the
Court generally must accept the material factual allegations in the complaint as true, but does not
draw all reasonable inferences in the plaintiff’s favor. [And] where jurisdictional facts are
disputed, the Court has the power and the obligation to consider matters outside the pleadings,
such as affidavits, documents, and testimony, to determine whether jurisdiction exists.”
Figueroa, 222 F. Supp. 3d at 307 (internal citations omitted). Finally, because “foreign
sovereign immunity’s basic objective [is] to free a foreign sovereign from suit, . . . court[s]
should normally resolve those factual disputes and reach a decision about immunity as near to
the outset of the case as is reasonably possible.” Bolivarian Republic of Venez. v. Helmerich &
Payne Int’l Drilling Co., 137 S. Ct. 1312, 1317 (2017).
5
III.
Discussion
A.
Sovereign Immunity
The Welsh Government moves to dismiss Plaintiffs’ claims against it pursuant to Rule
12(b)(1) on the basis of sovereign immunity. (Dkt. Nos. 105, 106 at 1.) In support of its motion,
the Welsh Government submits various exhibits and affidavits. (See, e.g., Dkt. Nos. 106-2–1064, 107–09.) Plaintiffs, in contrast, do not present to the Court any new evidence in opposing the
instant motion. 1 (See generally Dkt. No. 119.) Still, as the Court recently explained in granting
Plaintiffs leave to replead, Plaintiffs’ factual allegations in the Second Amended Complaint,
including some of the same allegations that the Court held to be sufficient to establish venue in
this district, are also supported in part by a number of exhibits attached to Plaintiffs’ pleading.
(See Dkt. No. 96 at 4 (citing Dkt. Nos. 75-2, 75-3); see also Dkt. Nos. 99-1–99-14 (exhibits to
Plaintiffs’ Second Amended Complaint).) To the extent that any of Plaintiffs’ factual allegations
in the Second Amended Complaint are both supported by evidence attached to the Second
Amended Complaint and unrebutted by the Welsh Government’s evidence, they are properly
considered in connection with Plaintiffs’ burden of production. See Anglo-Iberia, 600 F.3d at
175. The Court turns now to consider that evidence.
1
Plaintiffs contend that “[i]n an FSIA case,” courts will grant a motion to dismiss for
lack of subjection matter jurisdiction only where a pleading is “wholly insubstantial or
frivolous,” and that in doing so courts “must accept as true all of the factual allegations set out in
plaintiffs’ complaint, draw inferences from those allegations in the light most favorable to
plaintiffs, and construe the complaint liberally.” (Dkt. No. 119 at 4 (citations and internal
quotation marks omitted).) Plaintiffs are incorrect. The legal standard governing the instant
motion to dismiss is that outlined by the Court above. See supra Section II. In fact, the Supreme
Court just two terms ago expressly addressed and rejected the propriety of a legal standard akin
to that articulated by Plaintiffs here. See Bolivarian Republic of Venez., 137 S. Ct. at 1324
(“Simply making a nonfrivolous argument [that an FSIA exception applies] is not sufficient. . . .
If a decision about the matter requires resolution of factual disputes, the court will have to
resolve those disputes.”).
6
As an initial matter, the Welsh Government has made a prima facie showing that it is a
political subdivision of a foreign state within the meaning of the FSIA. (See Dkt. No. 121 at 2
(citing Gov’t of Wales Act § A1 (“[T]he Welsh Government . . . [is] a permanent part of the
United Kingdom’s constitutional arrangements.”)) 2.) Accordingly, “the burden [now] falls on
[Plaintiffs] to establish by a preponderance of the evidence that an exception under the FSIA
permits jurisdiction over [the Welsh Government].” Swarna v. Al-Awadi, 622 F.3d 123, 143 (2d
Cir. 2010). Plaintiffs contend that three of the general exceptions to foreign sovereign immunity
that are outlined in § 1605(a)(2) of the FSIA permit them to sue the Welsh Government for the
alleged acts of copyright infringement at issue in this suit: (1) the commercial activity exception
(Dkt. No. 119 at 5–11); (2) the noncommercial tort exception (Dkt. No. 119 at 11–17); and (3)
the expropriation exception (Dkt. No. 119 at 17–18). The Court addresses only the commercial
activity exception, concluding both that Plaintiffs have met their burden of production with
respect to the that exception to sovereign immunity, and that the Welsh Government has failed to
demonstrate by a preponderance of the evidence that this exception does not apply here.
Among the FSIA’s “[g]eneral exceptions to the jurisdictional immunity of a foreign
state” is what is commonly referred to as the “commercial activity” exception. 28 U.S.C.
§ 1605(a)(2). This exception provides that:
A foreign state shall not be immune from the jurisdiction of courts of the United
States or of the States in any case . . . in which the action is based [i] upon a
commercial activity carried on in the United States by the foreign state; or [ii]
upon an act performed in the United States in connection with a commercial
activity of the foreign state elsewhere; or [iii] upon an act outside the territory of
the United States in connection with a commercial activity of the foreign state
elsewhere and that act causes a direct effect in the United States.
2
Available at http://www.legislation.gov.uk/ukpga/2006/32/section/A1.
7
Id. As the text of the statute makes plain, all three prongs of the exception require a plaintiff to
show some form of (1) a “commercial activity” carried on by or of the foreign state (2) a nexus
between that activity and the basis of the plaintiff’s claims, and (3) a geographic connection with
the United States.
The FSIA provides that a “commercial activity” may be “either a regular course of
commercial conduct or a particular commercial transaction or act,” and instructs courts that the
“commercial character of an activity shall be determined by reference to the nature of the course
of conduct or particular transaction or act, rather than by reference to its purpose.” Id. § 1603(d).
In addition, the FSIA defines “commercial activity carried on in the United States by a foreign
state” as a “commercial activity carried on by such state and having substantial contact with the
United States.” Id. § 1603(e). Describing these tautological definitions as somewhat “obtuse,”
the Supreme Court has provided lower courts with some necessary clarification regarding the
meaning of “commercial activity.” See Saudi Arabia v. Nelson, 507 U.S. 349, 358–59 (1993).
Recognizing that the FSIA codified the preexisting “so-called ‘restrictive’ theory of foreign
sovereign immunity,” id. at 359 (quoting Republic of Argentina v. Weltover, Inc., 504 U.S. 607,
612 (1992)), the Supreme Court explained that “a state engages in commercial activity under the
restrictive theory where it exercises only those powers that can also be exercised by private
citizens, as distinct from those powers peculiar to sovereigns,” id. at 360 (internal quotation
marks omitted). In other words, “a foreign state engages in commercial activity for purposes of
the restrictive theory only where it acts ‘in the manner of a private player within’ the market.”
Id. (quoting Weltover, 504 U.S. at 614). Under the “commercial activity” inquiry, it matters “not
whether the foreign government is acting with a profit motive or instead with the aim of fulfilling
uniquely sovereign objectives.” Weltover, 504 U.S. at 614. Instead, courts ask whether “the
8
particular actions that the foreign state performs (whatever the motive behind them) are the type
of actions by which a private party engages in ‘trade and traffic or commerce.’” Nelson, 507
U.S. at 360–61 (quoting Weltover, 504 U.S. at 614).
Section 1605(a)(2) further provides that in order to be eligible for the commercial activity
exception to the FSIA’s general grant of sovereign immunity, a plaintiff’s claim must also be
“based upon” the relevant “commercial activity,” or, under the second and third prongs of the
exception, based upon an act performed in connection with that commercial activity. 28 U.S.C.
§ 1605(a)(2) (emphasis added). The Supreme Court has explained that determining whether a
plaintiff’s claim is “based upon” a commercial activity requires courts to “look[] to the ‘basis’ or
‘foundation’ for a claim,” or to “the ‘gravamen of the complaint.’” OBB Personenverkehr AG v.
Sachs, 136 S. Ct. 390, 395 (2015) (quoting Nelson, 507 U.S. at 357). Doing so “first requires a
court to ‘identify[] the particular conduct on which the [plaintiff’s] action is “based.”’” Id.
(alterations in original) (quoting Nelson, 507 U.S. at 356). Courts then must consider the
“‘degree of closeness’ [that] exist[s] between the commercial activity and the gravamen of the
plaintiff’s complaint.” Kensington, 505 F.3d at 156 (quoting Garb v. Republic of Poland, 440
F.3d 579, 586 (2d Cir. 2006)). For a claim to be “based upon” a commercial activity, there must
be a “a significant nexus . . . between the commercial activity in this country upon which the
exception is based and a plaintiff’s cause of action.” Id. at 155 (quoting Reiss v. Société Centrale
Du Groupe Des Assurances Nationales, 235 F.3d 738, 747 (2d Cir. 2000)) (omission in original).
This requisite “degree of closeness . . . is considerably greater than common law causation
requirements.” Id. at 156 (internal quotation marks omitted).
Here, the Court begins, as it must, “by identifying the particular conduct on which
[Plaintiffs’] action is ‘based’ for purposes of the [FSIA].” Nelson, 507 U.S. at 356. The Court
9
not long ago conducted a similar inquiry into “the essence of Plaintiffs’ claims for copyright
infringement,” doing so in the context of considering the propriety of venue for Plaintiffs’ claims
in this district. (Dkt. No. 96 at 3.) The Court at that time described the “essence” of Plaintiffs’
claims in the Second Amended Complaint as consisting of “the Welsh Government’s
unauthorized use of the two photographs as part of its campaign to promote tourism to Wales,”
and more specifically, “the Welsh [G]overnment’s alleged unauthorized copying” of Plaintiffs’
photographs in violation of 17 U.S.C. § 106. (Dkt. No. 96 at 3–4.) The Court sees no reason
why these alleged acts do not also constitute the “‘basis’ or ‘foundation’ for [Plaintiffs’] claim,”
or “the ‘gravamen of [their] complaint,’” for purposes of the FSIA. OBB, 136 S. Ct. at 395
(quoting Nelson, 507 U.S. at 357). Accordingly, the Court determines that the acts that
Plaintiffs’ copyright claims are “based upon” in this case are the Welsh Government’s alleged
unauthorized copying and distribution of Plaintiffs’ copyrighted photographs.
The Court now asks whether Plaintiffs have demonstrated that the Welsh Government’s
alleged acts of copying and distribution qualify as “commercial activit[ies]” within the meaning
of the FSIA. The Court concludes that they do. The exhibits attached to Plaintiffs’ Second
Amended Complaint demonstrate that the types of conduct the Welsh Government is alleged to
have engaged in are “the type[s] of actions by which a private party engages in ‘trade and traffic
or commerce.’” Weltover, 504 U.S. at 614 (quoting Black’s Law Dictionary 270 (6th ed. 1990)).
The copies of Plaintiffs’ photo that are reproduced in Plaintiffs’ exhibits are generally
part of the Welsh Government’s issuance of promotional materials for Welsh-themed activities
and travel. (See, e.g., Dkt. No. 99-1 (“Dylan Thomas Walking Tour of Greenwich Village, New
York” map published by the Welsh Government, which uses one of Plaintiffs’ photographs);
Dkt. No. 99-2 (“Discovering the Welsh in America” article published by the Welsh Government,
10
which uses one of Plaintiffs’ photographs); Dkt. No. 99-6–99-9 (copies of articles published by
various United States media outlets promoting tourism to Wales and using the same infringing
photographs included as part of the Welsh Government’s publications) 3.) The Welsh
Government’s use of these photos is an eminently familiar manifestation of the manner in which
any number of private travel agents or guides have been alleged to have used another’s
copyrighted materials to supplement their own products or services. See, e.g., Beasley v. John
Wiley & Sons, Inc., 56 F. Supp. 3d 937 (N.D. Ill. 2014) (copyright infringement suit premised on
private publisher’s unauthorized copying and use of plaintiff’s copyrighted pictures of Chicago
in a travel book); Burch v. Nyarko, No. 06 Civ. 7022, 2007 WL 2191615 (S.D.N.Y. July 31,
2007) (Gorenstein, Mag. J.) (copyright infringement suit premised on private publisher’s
unauthorized copying and use of plaintiff’s copyrighted pictures of Ghana on a travel website);
Feder v. Videotrip Corp., 697 F. Supp. 1165 (D. Colo. 1988) (copyright infringement suit
premised on private publisher’s unauthorized copying and use of plaintiff’s copyrighted travel
guides in a travel video). Here too, Plaintiffs’ exhibits confirm that the Welsh Government
3
Plaintiffs allege on information and belief that the Welsh Government provided these
United States news outlets with the infringing copies of Plaintiffs’ photo as part of their efforts to
encourage tourism to Wales. (See, e.g., SAC ¶¶ 47–48.) The contents of these articles
corroborate Plaintiffs’ allegations: The articles not only favorably depict and encourage travel to
Wales, but also link directly to the website for Visit Wales (see, e.g., 99-7 at 6–7), which
according to a Welsh Government official is “an administrative division of the Welsh
Government charged with carrying out the Government’s policy to promote tourism to Wales”
(Dkt. No. 107 ¶ 5). Plaintiffs also attach to their Second Amended Complaint a “Framework
Action Plan” from the Welsh Government in which it resolved to “[r]e-launch websites for US
and German markets providing [them with] tailored content.” (Dkt. No. 99-14 at 6.) A Welsh
official has confirmed that the Government of Wales does license images for purposes of tourism
promotion (Dkt. No. 107 ¶ 8), and the Welsh Government offers no evidence to rebut Plaintiffs’
allegations that the Welsh Government did in fact provide United States news outlets with
infringing copies of Plaintiffs’ photos. The Court concludes that Plaintiffs have produced
evidence sufficient to corroborate their allegations that the United States news articles appended
to the Second Amended Complaint were published in coordination with the Welsh Government.
11
distributed copies of Plaintiffs’ photos in a form largely indistinguishable from the form in which
private parties also distributed copies of Plaintiffs’ photo. (Compare Dkt. No. 99-2 with Dkt.
Nos. 99-6–99-9.) This evidence confirms that Plaintiffs’ suit against the Welsh Government
arises from the latter’s exercise of “powers that can also be exercised by private citizens, as
distinct from those powers peculiar to sovereigns,” Nelson, 507 U.S. at 360 (internal quotation
marks omitted), and that Plaintiffs’ suit is therefore “based upon . . . commercial activit[ies]”
within the meaning of 28 U.S.C. § 1605(a)(2).
In moving to dismiss Plaintiffs’ Second Amended Complaint, the Welsh Government
points to unrebutted evidence showing that “the Welsh Government did not use the photographs
for profit[,] but [instead used them] to carry out its public mission to encourage economic
development, culture, and tourism in Wales,” evidence the Welsh Government contends
demonstrates that any alleged copying was done in connection with a uniquely sovereign
objective (i.e., promoting tourism) insufficient to constitute “commercial activity.” (See Dkt.
No. 106 at 12–14.) But the Welsh Government’s evidence of the purposes behind its copying
and distributing of Plaintiffs’ photos, however persuasive, is tangential to the Court’s inquiry.
That is because courts considering whether a government’s conduct is a “commercial activity [as
defined by the FSIA] . . . ‘ask not whether the foreign government is acting with a profit motive
or instead with the aim of fulfilling uniquely sovereign objectives[,] but rather whether the
particular actions that the foreign state performs (whatever the motive behind them) are the type
of actions by which a private party engages in trade and traffic or commerce.’” Swarna, 622
F.3d at 147 (quoting Anglo-Iberia, 600 F.3d at 177). Because Plaintiffs’ evidence shows that the
Welsh Government’s acts of copying and distributing Plaintiffs’ photos were of the sort a private
12
person might also engage in, the Court need not (and indeed must not) inquire further into the
purposes behind that copying.
At least one other court in this district has rejected similar arguments made by foreign
entities seeking to evade copyright claims brought against them pursuant to the FSIA’s
commercial activity exception. In Leutwyler v. Office of Her Majesty Queen Rania Al-Abdullah,
184 F. Supp. 2d 277 (S.D.N.Y. 2001) (Lynch, J.), the court rejected an assertion of sovereign
immunity raised by copyright-infringement defendants who were officials of a Jordanian
governmental body, id. at 290. The Leutwyler defendants were accused of “furnishing photos
taken by [the plaintiff] for use in the Jordan Diary, a publication that ha[d] been sold in the
United States” in order to promote tourism to Jordan. Id. at 283, 291. Declining to consider the
Jordanian defendants’ alleged purposes of encouraging tourism in selling copies of the “diary,”
Judge Lynch explained that even if “the purpose of publishing the diary may have been
governmental (disseminating information about Jordan and encouraging tourism), the nature of
the activity (publishing and selling books) is clearly commercial.” Id. Accordingly, the court
concluded that the plaintiff “had sustained his burden of demonstrating that the [otherwiseimmune Jordanian defendants had] engaged in certain ‘commercial activity,’ as that term is
defined in § 1603(e), that could give rise to subject matter jurisdiction under the FSIA.” Id. For
the reasons explored above, this Court similarly concludes that the Welsh Government’s alleged
copying and distribution of Plaintiffs’ copyrighted photos in connection with its promotional
materials was a “commercial activity” as that term is used in the context of the FSIA—
irrespective of the purposes underlying the Welsh Government’s copying of those photos.
Finally, even with Plaintiffs having shown that their suit is “based upon a commercial
activity carried on . . . by the” Welsh Government, Plaintiffs still must show that this conduct
13
was “carried on in the United States” in order to overcome the Welsh Government’s assertion of
sovereign immunity. 4 28 U.S.C. § 1605(a)(2) (emphasis added). To do so, Plaintiffs are
required to produce evidence showing that the Welsh Government’s alleged commercial
activities had “substantial contact with the United States.” 28 U.S.C. § 1603(e).
In granting Plaintiffs leave to replead, the Court concluded that Plaintiffs’ allegations,
“taken as true, plausibly establish[ed] that the Welsh Government undertook significant actions
in this district that are material to its allegedly unauthorized copying of Plaintiffs’ photographs.”
(Dkt. No. 96 at 5.) But unlike at the motion-to-replead stage, the Court can no longer “draw all
reasonable inferences in [Plaintiffs’] favor” in connection with the instant Rule 12(b)(1) motion
to dismiss. Figueroa, 222 F. Supp. 3d at 307. Instead, because “jurisdictional facts are [now]
disputed, the Court has the power and the obligation to consider matters outside the pleadings,
such as affidavits, documents, and testimony, to determine whether jurisdiction exists.” Id.
Accordingly, the Court considers the extent to which the Second Amended Complaint’s attached
exhibits are sufficient to carry Plaintiffs’ evidentiary burden of showing that the Welsh
Government’s commercial activities were “carried on in the United States,” 28 U.S.C.
§ 1605(a)(2), particularly in light of the evidence now presented by the Welsh Government.
The Court concludes that Plaintiffs’ evidence is sufficient to carry their burden. Most
relevant to the Court’s conclusion in this regard are the exhibits attached to Plaintiffs’ Second
4
Alternatively, Plaintiffs could make a showing under the statute’s second and third
prongs that their suit is “based . . . upon an act performed in the United States in connection with
a commercial activity of the foreign state elsewhere,” or “upon an act outside the territory of the
United States in connection with a commercial activity of the foreign state elsewhere and that act
causes a direct effect in the United States.” 28 U.S.C. § 1605(a)(2). But as the Court concludes
that Plaintiffs have met their burden of showing that the commercial activities upon which their
action is based were “carried on in the United States by the” Welsh Government, id., the Court
need not address these alternative bases for rejecting the Welsh Government’s assertion of
sovereign immunity.
14
Amended Complaint in which the Welsh Government itself represents that at least some of the
infringing materials at issue in this suit were “developed by the Welsh Government in New
York” and were available to order “for distribution free-of-charge . . . from the Welsh
Government in New York.” (See Dkt. No. 99-2 at 2–3.) Buttressing this conclusion is Plaintiffs’
evidence showing that some of the Welsh Government’s infringing materials were also published
in the United States by United States news outlets in furtherance of the Welsh Government’s
attempts to promote tourism to Wales. (Dkt. Nos. 99-6–99-9.)
The most persuasive evidence submitted by the Welsh Government in support of its
attempts to rebut this conclusion is the affidavit of Rob Holt, the Deputy Director of Tourism
Development and Major Events of the Department of Economy, Skills and Natural Resources for
the Welsh Government. 5 (Dkt. No. 107 ¶ 2.) Holt confirms that the Welsh Government does
maintain an office in New York. (Dkt. No. 107 ¶ 3.) But Holt represents that the Welsh
Government’s activities in furtherance of its promotion of tourism and culture are conducted
entirely from Wales (Dkt. No. 107 ¶ 6), and that the computer servers that host the webpages
appended to Plaintiffs’ Second Amended Complaint are also located in Wales (Dkt. No. 107 ¶ 7;
see also Dkt. No. 99-4). Holt further represents that the Welsh Government never offered copies
5
The other evidence the Welsh Government submits in disputing the applicability of the
commercial activity exception is irrelevant to the Court’s disposition of this question. The
Welsh Government’s remaining evidence relates either to the locus of Plaintiffs’ alleged injury
(see, e.g., Dkt. No. 106-4), or to the purposes underlying the Welsh Government’s promotion of
tourism (see, e.g., Dkt. Nos. 106-2–106-3, 107 at 4–31). The former category of evidence would
be relevant to only the tortious act exception to the FSIA’s general grant of sovereign immunity,
see 18 U.S.C. § 1605(a)(5), and, for reasons already explored, the latter category of evidence
does not shed any light on the commercial character of the Welsh Government’s activities,
because such a character “shall be determined by reference to the nature of the course of conduct
or particular transaction or act, rather than by reference to its purpose,” id. § 1603(d). Given that
all that is left for the Court to determine is the question of whether this “action is based upon
commercial activity carried on in the United States by a foreign state,” id. § 1605(a)(2)
(emphasis added), the Court need consider these categories of evidence no further.
15
of Plaintiffs’ photos for sale or distributed them for profit, and that the Welsh Government
expressly forbade its licensees from using Plaintiffs’ photographs for “promotion of non-tourism
related, non-inward investment related or commercial products.” (Dkt. No. 107 ¶¶ 8–9; see also
Dkt. No. 107 at 32.)
Many of Holt’s representations are immaterial to the Court’s inquiry at this stage: It does
not matter whether Wales distributed copies of the photograph for sale or for profit, or only for
purposes of promoting tourism. Instead, it matters only where the relevant copies of Plaintiffs’
photos were made and distributed. In that respect, Holt’s affidavit is conspicuous for what it
fails to say. This is particularly true with respect to Holt’s failure to call into questions Plaintiffs’
allegations regarding some of the particular activities the “Welsh Government has engaged in
and undertaken . . . in this District,” which is of course located in the United States. (See Dkt.
No. 99 ¶¶ 22–25.) As already discussed, Plaintiffs support these allegations with documentary
evidence in the form of a walking tour mapped onto New York City streets (Dkt. No. 99-1), a
map that would presumably be useful only if distributed in a manner that had “substantial contact
with the United States,” 28 U.S.C. 1603(e). These allegations are further supported by an exhibit
consisting of a webpage published by the Welsh Government that includes copies of Plaintiffs’
photos alongside an offer of sale of tickets to “the Official Dylan Thomas Walking Tour of New
York,” a tour the Welsh Government then describes as “a collaboration of the Welsh
Government in New York and the family of Dylan Thomas.” (Dkt. No. 99-2 (emphasis added).)
In addition, that website explains that copies of the infringing materials are available to order
“for distribution free-of-charge . . . from the Welsh Government in New York.” (Id. (emphasis
added).) Finally, that same website also confirms that the “Dylan Thomas Walking Tour of
Greenwich Village” that is attached to Plaintiffs’ Second Amended Complaint (Dkt. No. 99-1)
16
“was [also] developed by the Welsh Assembly Government in New York” (Dkt. No. 99-2 at 2
(emphasis added)).
Holt’s affidavit fails to rebut what the exhibits to Plaintiffs’ Second Amended Complaint
persuasively demonstrate: that “the Welsh Government in New York” played an active role in the
development and distribution of the promotional materials which included copies of Plaintiffs’
photographs. (Id.) Moreover, Plaintiffs’ other exhibits also corroborate Plaintiffs’ allegation
that “the Welsh Government contracted with private businesses located in New York City to
publish, print, display, and distribute the Infringing Promotional Materials, including the
infringing walk tour maps and infringing Welsh in America display panels.” (Dkt. No. 99 ¶ 25;
see also, e.g., Dkt. Nos. 99-6–99-9 (evidence of Welsh Government’s coordination with other
United States news outlets).) Taken together, all of this evidence persuasively demonstrates that
the Welsh Government’s “commercial activity . . . [had] substantial contact with the United
States.” 28 U.S.C. § 1603(e).
In summary, the Court concludes that Plaintiffs have produced evidence that establishes
that their claims are “based upon a commercial activity carried on in the United States by [a]
foreign state,” 28 U.S.C. §1605(a)(2), and that the Welsh Government has not carried its burden
of “show[ing] that the alleged [commercial activity] exception does not apply [to its conduct] by
a preponderance of the evidence.” Anglo-Iberia, 600 F.3d at 175.
B.
The Welsh Government’s Remaining Contentions
1.
International Comity
The Welsh Government briefly suggests that the doctrine of international comity calls for
the dismissal of Plaintiffs’ claims. (See Dkt. No. 106 at 14.)
The Second Circuit has described the doctrine of comity as “‘amorphous’ and ‘fuzzy,’”
and it has counseled that “even where the doctrine clearly applies[,] it ‘is not an imperative
17
obligation of courts but rather is a discretionary rule of practice, convenience, and expediency.’”
Royal and Sun All. Ins. Co. of Can. v. Century Int’l Arms, Inc., 466 F.3d 88, 92 (2d Cir. 2006)
(quoting JP Morgan Chase Bank v. Altos Hornos De Mexico, S.A. DE C.V., 412 F.3d 418, 423
(2d Cir. 2005)). Among other things, the rule of “comity requires that the parties and issues in
both litigations [be] the same or sufficiently similar, such that the doctrine of res judicata can be
asserted.” Herbstein v. Bruetman, 743 F. Supp. 184, 189 (S.D.N.Y. 1990). “[S]ince comity is an
affirmative defense, [the party invoking comity] carrie[s] the burden of proving that comity [is]
appropriate.” Allstate Life Ins. Co. v. Linter Grp. Ltd., 994 F.2d 996, 999 (2d Cir. 1993).
In support of its suggestion that comity should dictate the outcome of the parties’ dispute
here, the Welsh Government submits to the Court a copy of a judgment issued by an Irish court
that dismissed some claims raised by Pablo Star Media Ltd. against the Welsh Government. (See
Dkt. No. 107 at 33.) But it is entirely unclear from that Irish judgment whether Pablo Star Ltd.
was also a party to that suit, or whether Plaintiffs’ claims failed because of a jurisdictional bar
sufficiently similar to that at issue here to warrant res judicata. (Id.; see also Dkt. No. 107 at 41
(suggesting the possibility of Plaintiffs obtaining jurisdiction for their claims against the Welsh
Government in another United Kingdom court).) The Welsh Government’s passing suggestion
that international comity warrants dismissal of Plaintiffs’ claims before this Court is insufficient
to carry its “burden of proving that comity [is] appropriate” in this case. Allstate Life Ins. Co.,
994 F.2d at 999.
2.
Pablo Star Media Ltd.’s Dissolution
The Welsh Government presents for the first time in its reply brief evidence
demonstrating that one of the Plaintiffs, namely Pablo Star Media Ltd., has been dissolved and
may lack standing to proceed in this matter. (Dkt. Nos. 121 at 1, 121-1 ¶ 4, 121-1 at 3–4.) The
Court notes that this evidence does nothing to rebut the standing of at least one Plaintiff to
18
proceed in this action. (See Dkt. No. 99 ¶¶ 9–10 (alleging that the action’s other Plaintiff, Pablo
Star Ltd., retains an independent right to pursue claims at issue in this suit).) Because “the
presence of one party with standing is sufficient to satisfy Article III’s case-or-controversy
requirement,” Rumsfeld v. Forum for Academic & Institutional Rights, Inc. 547 U.S. 47, 52 n.2
(2006), and because courts “ordinarily will not consider issues raised for the first time in a reply
brief,” McBride v. BIC Consumer Prod. Mfg. Co., 583 F.3d 92, 96 (2d Cir. 2009), the Court
declines to address the Welsh Government’s belated contention regarding Pablo Star Media
Ltd.’s dissolution. The Welsh Government is free to raise this issue again at a later stage of this
case.
3.
Plaintiffs’ Berne Convention Claims
Finally, the Welsh Government moves pursuant to Federal Rule of Civil Procedure
12(b)(6) to dismiss all of Plaintiffs’ claims brought under the Berne Convention. (Dkt. No. 106
at 1, 16–17.) However, Plaintiffs disclaim any attempt to state independent claims under the
Berne Convention, and explain that their allegations regarding the Berne Convention are relevant
only to their attempts to demonstrate a violation of international law sufficient to trigger the
expropriation exception to the FSIA, 28 U.S.C. § 1605(a)(3). (Dkt. No. 119 at 17–18; see also
SAC ¶ 102.) Because Plaintiffs have disclaimed any attempt to state a claim in this action under
the Berne Convention, the Welsh Government’s Rule 12(b)(6) motion to dismiss Plaintiffs’
claims brought under the Berne Convention is denied as moot.
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IV.
Conclusion
For the foregoing reasons, the Welsh Government’s motion to dismiss is DENIED. The
Welsh Government is directed to file an answer to the Second Amended Complaint within 21
days of the date of this Opinion.
The Clerk of Court is directed to close the motion at Docket Number 105.
SO ORDERED.
Dated: March 29, 2019
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge
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