Gazmey-Santiago et al v. Suarez et al

Filing 56

OPINION AND ORDER re 30 MOTION to dismiss as to All Plaintiffs filed by Carlos Suarez, 36 MOTION for Leave to File Document Jurisdictional Discovery, 51 MOTION to Strike Defendant Carlos Suarez's Motion to St rike Plaintiffs' Amended Expert Witness Report, 46 Supplemental Motion to Memorandum in Opposition to Motion to Dismiss, 49 Supplemental Motion , 53 MOTION to Strike , 54 MOTION to Clarify of Filing in D ocket (52). Defendant's motion to dismiss the complaint for lack of personal jurisdiction, ECF No. 30, is GRANTED. Furthermore, ECF Nos. 36 and 51 are DENIED, and ECF Nos. 46, 49, 53, and 54 are NOTED. The complaint is hereby DISMISSED WITHOUT PREJUDICE. The Clerk of Court is to enter judgment accordingly. Signed by U.S. District Judge Aida M. Delgado-Colon on 9/28/2018.(wm)

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

EMMANUEL GAZMEY-SANTIAGO, et
al.,
Plaintiffs,
v.

Civil No. 17-1650 (ADC)

CARLOS SUAREZ, et al.,
Defendants.

OPINION AND ORDER
On May 25, 2017, plaintiffs Emmanuel Gazmey-Santiago (“Anuel”) and Anuel’s father,
José Gazmey, d/b/a Gazmey Music Publishing (“Gazmey”) (collectively, “plaintiffs”), filed an
amended complaint against Carlos Suárez (“Suárez” or “defendant”) and unknown defendants,
alleging copyright infringement, breach of contract, and misappropriation of image and
likeness. 1 ECF No. 4. Plaintiffs seek compensatory, injunctive, and declaratory relief, and invoke
the Court’s original jurisdiction over a civil action arising under federal trademark and
copyright laws, 28 U.S.C. § 1338, as well as the Court’s diversity jurisdiction, 28 U.S.C. § 1332.
ECF No. 4 at 2.
On January 26, 2018, Suárez moved to dismiss the complaint for lack of personal
jurisdiction and failure to state a claim, under Federal Rules of Civil Procedure 12(b)(2) and (6).

On December 14, 2017, the Court granted plaintiff’s motion to voluntarily dismiss the claims against Maybach
Music Latino, Maybach Music Group, and William Leonard Roberts, II (“Rick Ross”), ECF Nos. 23 and 24.
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ECF No. 30. Alternatively, Suárez asks the Court to transfer venue to the Middle District of
Florida, under 28 U.S.C. § 1404. Id. Plaintiffs opposed the motion to dismiss. ECF No. 33. With
leave from the Court, Suárez replied to plaintiffs’ opposition, ECF No. 44, to which plaintiffs
filed a surreply, ECF No. 48. The Court now GRANTS defendant’s motion to dismiss the
complaint for lack of personal jurisdiction, ECF No. 30, and DISMISSES THE COMPLAINT
WITHOUT PREJUDICE.
I.

Applicable Law
Federal Rule of Civil Procedure 12(b)(2) allows a defendant to raise by motion a defense

of lack of personal jurisdiction. Under federal law, personal jurisdiction can exist through two
different avenues: specific jurisdiction and general jurisdiction. Donatelli v. National Hockey
League, 893 F.2d 459, 462 (1st Cir. 1990). Specific jurisdiction is the “jurisdiction which a state
may assert when a suit arises directly out of forum-based activities,” while general personal
jurisdiction “may be asserted in connection with suits not directly founded on forum-based
conduct.” Id. (citations omitted).
Suárez argues that the Court lacks general and specific jurisdiction over him, ECF No. 30
at 13, and plaintiffs only argue that the Court has specific jurisdiction over Suárez, see ECF No.
33 at 4, 13. Because the burden of proving personal jurisdiction rests on plaintiffs, the Court will
only analyze if it has specific jurisdiction over Suárez. Bluetarp Financial, Inc. v. Matrix Const. Co.,
Inc., 709 F.3d 72, 79 (1st Cir. 2013) (citing Cossaboon v. Maine Med. Ctr., 600 F.3d 25, 31 (1st Cir.
2010)).

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“Personal jurisdiction implicates the power of a court over a defendant. In a federal court,
both its source and its outer limits are defined exclusively by the Constitution.” Foster-Miller,
Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 143–44 (1st Cir. 1995) (citing Insurance Corp. of Ireland
v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, (1982)). “A federal court may assert specific
jurisdiction over a defendant only if doing so comports with both the forum’s long-arm statute
and the Due Process Clause of the United States Constitution.” Carreras v. PMG Collins, LLC, 660
F.3d 549, 552 (1st Cir. 2011) (citing Barrett v. Lombardi, 239 F.3d 23, 26 (1st Cir. 2001)). In this case,
“the two modes of analysis merge into one because the reach of Puerto Rico’s long-arm statute
is coextensive with the reach of the Due Process Clause.” 2 Id. (citing Negrón–Torres v. Verizon
Commc'ns, Inc., 478 F.3d 19, 24 (1st Cir. 2007)). “The due process clause imposes several
requirements on the exercise of personal jurisdiction over out-of-state defendants.” Harlow v.
Children's Hosp., 432 F.3d 50, 57 (1st Cir. 2005). For specific jurisdiction, “the defendant must
have sufficient ‘minimum contacts’ with the state [and] plaintiff’s claim must be related to the
defendant’s contacts.” Id. “It is axiomatic that a court asserting jurisdiction over a nonresident
defendant must find that the defendant maintains sufficient contacts with the forum state such
that the maintenance of the suit does not offend traditional notions of fair play and substantial
justice.” Negrón-Torres, 478 F.3d at 24 (internal quotations omitted). The defendant’s contacts

“Puerto Rico’s long-arm statute allows Puerto Rico courts to exercise jurisdiction over a non-resident defendant if
the action arises because that person: (1) ‘[t]ransacted business in Puerto Rico personally or through an agent’; or
(2) ‘participated in tortuous acts within Puerto Rico personally or through his agent.’” Negrón-Torres v. Verizon
Commc'ns, Inc., 478 F.3d at 24 (quoting P.R. Laws Ann. tit. 32, App. III, R. 4.7(a)(1)).
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must also be “purposeful,” and “the exercise of jurisdiction must be reasonable under the
circumstances.” Harlow, 432 F.3d at 57.
When a court adjudicates a motion to dismiss for lack of personal jurisdiction without
holding an evidentiary hearing, the court applies the “prima facie” standard:
To satisfy the prima facie standard in a specific jurisdiction case, a plaintiff
may not rest on mere allegations but, rather, must submit competent evidence
showing sufficient dispute-related contacts between the defendant and the forum.
The court, in turn, must view this evidence, together with any evidence proffered
by the defendant, in the light most favorable to the plaintiff and draw all
reasonable inferences therefrom in the plaintiff's favor. A court need not, however,
credit bald allegations or unsupported conclusions.
Carreras, 660 F.3d at 552 (internal citations omitted). See also Bluetarp Fin., Inc., 709 F.3d at
79; Phillips v. Prairie Eye Center, 530 F.3d 22, 26 (1st Cir. 2008).
II.

Alleged Facts
It is alleged in the complete that Anuel is a rap, trap, and reggaeton recording artist from

Puerto Rico that signed a contract with Suárez to market and economically exploit Anuel’s
recordings and his image. 3 ECF No. 4 at 5. The complaint alleges that the contract gives Anuel
the right to 50% of all the profits generated Id. Gazmey contacted Suárez to obtain a copy of the
contract, which the fairness and terms of are now being challenged, but Suárez did not provide
copies of the same before the filing of the complaint. Id. at 6. Suárez admitted to Anuel that the
contract had expired two years prior, and asked Anuel to sign an extension, which Anuel has
refused to sign. Suárez also approached Gazmey to sign a contract extension in name of his son,

The parties dispute the existence of the contract, its terms, and its validity. The Court will address these issues in
turn.
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Anuel. Suárez has been exercising ownership rights over Anuel’s copyrights, image and likeness
despite the expiration of the contract, and has reaped economic benefits without payment to
plaintiffs. Id. at 7. Suárez controls Anuel’s channel in YouTube and other internet platforms
without authorization from Anuel, and has been selling merchandise in Puerto Rico through the
Internet without a contract. Id. at 8. Accordingly, plaintiff asserts that Suárez’s acts in Puerto
Rico have been substantial, continuous, and systematic. It is also asserted that most of Anuel’s
followers are in Puerto Rico, as are the vast majority of downloads and streamings of Anuel’s
music and videos.
III.

Personal jurisdiction over Suárez
The First Circuit has established a three-part test to determine if personal jurisdiction

exists:
First, the court must ask whether the asserted causes of action arise from or
relate to the defendant’s contacts with the forum. Second, the court must consider
whether the defendant purposefully availed itself of the protections of the forum’s
laws by means of those contacts, such that the defendant could reasonably foresee
being haled into the forum’s courts. Third, the court must consider whether an
exercise of jurisdiction is consistent with principles of justice and fair play. Specific
jurisdiction lies only if all of these queries are susceptible to affirmative answers.
Carreras, 660 F.3d at 554 (citing Phillips Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d 284,
288 (1st Cir. 1999); Ticketmaster–N.Y., Inc. v. Alioto, 26 F.3d 201, 206 (1st Cir. 1994)).
Suárez’s motion to dismiss for lack of personal jurisdiction argues, in sum, that plaintiffs
have failed to allege and adduce sufficient facts to conclude that Suárez had the required
minimum contacts with Puerto Rico. ECF No. 30. The complaint specifically alleges that Suárez

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does not reside in Puerto Rico, does not transact business in Puerto Rico, does not own real
property in Puerto Rico, and does not have any bank accounts in Puerto Rico. Id. at 6.
Mindful that plaintiffs bear the burden of showing that the Court has personal
jurisdiction over Suárez, the Court now addresses the three prongs of the prima facie test for
personal jurisdiction. See Carreras, 660 F.3d at, 552.
Plaintiffs’ response in opposition to the motion to dismiss ignores the applicable prima
facie standard and fails to argue whether the asserted causes of actions meet the relatedness,
purposeful availment, or reasonableness prongs of the prima facie test. See ECF No. 33 at 9-14.
Instead, plaintiffs argue that the Court’s inquiry into whether personal jurisdiction exists rests
exclusively on the three-part effects test announced in Calder v. Jones, 465 U.S. 783 (1984). ECF
No. 33 at 5, 9. In Calder, a California resident brought a libel suit in California courts against a
magazine for an article written and edited in Florida. Six-hundred thousand copies of the
magazine were sold in California, “almost twice the level of the next highest State.” Calder, 465
U.S. at 783. The Supreme Court held that “California [was] the focal point of both the story and
of the harm suffered,” and that jurisdiction over the defendants was proper in California “based
on the ‘effects’ of their Florida conduct in California.” Id. at 788-89. The Court noted that, because
defendants’ “intentional, and allegedly tortious, actions were expressly aimed at California . . .
[defendants] must reasonably anticipate being haled into court there to answer for the truth of
the statements made in their article.” Id at 789 (quotation omitted).

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The First Circuit Court of Appeals has rejected reading Calder for the broad proposition
that any act with foreseeable effects in the forum gives rise to personal jurisdiction. United States
v. Swiss Am. Bank, Ltd., 274 F.3d 610, 25 (1st Cir. 2001). Calder’s effects test “was adopted for
determining purposeful availment in the context of defamation cases. Thus, the ‘effects’ test is a
gauge for purposeful availment and is to be applied only after the relatedness prong has already
been satisfied.” Id. (citations omitted).
Although plaintiffs have failed to explain how the three prongs of the prima facie test
apply to their complaint, the Court will consider their allegations, evidentiary proffers, and legal
analysis in the light most favorable to them.
Plaintiffs allege that “the parties agreed that the musical works would be distributed and
sold in the territory of Puerto Rico,” and ”Suárez has intentionally continued distribution for
sale of the musical products and monetization of [Anuel’s] likeness and persona in the Puerto
Rico forum.” ECF No. 33 at 9. They claim that the “sales of the Anuel’s products [sic], streaming
revenues through YouTube and monetization of his publishing rights in the forum are
enormous.” Id. at 9. Plaintiffs support the magnitude of Anuel’s YouTube audience by
submitting a screenshot of a YouTube page that indicates that Anuel has had 74,138,944 views.
ECF No. 33-6, Exhibit 6. However, this exhibit does not indicate the time period of the views,
and which correspond to Puerto Rico.
The amended complaint alleges that Anuel’s followers “are in Puerto Rico and the vast
majority of downloads and streamings take place in Puerto Rico.” ECF No. 4 at 7.

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To make a prima facie showing of this caliber, the plaintiff ordinarily cannot
rest upon the pleadings, but is obliged to adduce evidence of specific facts. Withal,
the district court acts not as a factfinder, but as a data collector. That is to say, the
court, in a manner reminiscent of its role when a motion for summary judgment is
on the table, see Fed. R. Civ. P. 56(c), must accept the plaintiff’s (properly
documented) evidentiary proffers as true for the purpose of determining the
adequacy of the prima facie jurisdictional showing.
Foster-Miller, Inc., 46 F.3d at 145 (citations omitted).
In support, plaintiffs cite Exhibit 1 of the amended complaint, ECF No. 4-1. Exhibit 1 is a
screenshot of a YouTube page listing the top artists in San Juan, Puerto Rico. “Anuel AA” is
listed as the fourth artist, with 10,910,152 total views. The top artist, Romeo Santos, has
23,888,426 total views. Plaintiffs allege that the vast majority of views of Anuel’s channel are
from Puerto Rico. This screenshot, however, simply shows how many YouTube views Anuel
had in San Juan or Puerto Rico. The significance of this number is not self evident without any
showing of what Anuel’s YouTube views were in comparison to all of the other jurisdictions in
the country. Without this context, the Exhibit has little probative value. Thus, plaintiffs’
allegations that Anuel’s followers “are in Puerto Rico and the vast majority of downloads and
streamings take place in Puerto Rico[]” is a conclusory allegation. To make a prima facie
showing of this caliber, the plaintiff ordinarily cannot rest upon the pleadings, but is obliged to
adduce evidence of specific facts. See id.
Exhibit 2 to the amended complaint includes a graph titled “Reports/Sales by billing
Country” and a table that states that the billing region is Puerto Rico. ECF No. 4-2. However,
the amended complaint does not explain what merchandise was sold, when it was sold, if

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merchandise was sold in other states or countries, or what percentage of the total sales
corresponds to the sales that occurred in Puerto Rico. Although this may well be a sizeable
YouTube audience, it does not support the allegation that the revenues from Anuel’s YouTube
presence in Puerto Rico are significant.
Plaintiffs also allege that “[m]ost of the income derived from [the YouTube views] comes
from local advertising,” and that Anuel has had over 525,298 total views in Puerto Rico. Id.;
Exhibit 9, ECF No. 33-9. However, Exhibit 9 lists views from San Juan, Puerto Rico, which
occupies the nineteenth position of cities with most views, a number comparable to those listed
for Houston, Texas; Managua, Nicaragua; and Boston, Massachusetts, in the same exhibit. ECF
No. 33-9.
These facts compare unfavorably to the facts of Calder. In Calder, the magazine sold twice
as many copies in California than in the second largest market, and the article in question was
directed towards a citizen of California. The statistics proffered by plaintiffs thus fail to meet the
Calder test. As the record does not support their allegation that Puerto Rico represents a
significantly larger share of the market for Anuel’s products.
The complaint also alleges that Suárez controlled Anuel’s pages in Apple Music, iTunes,
Spotify, Google Play, Pandora, or Deezer pages, as well as the merchandise sold through a
website. ECF No. 4 at 8, 10. It does not allege—and the proffered facts fail to support—that
Suárez had any control over where these third-party websites made the content available, or
who would be able to purchase advertisements for individuals that consumed Anuel’s products.

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This situation is more similar to placing a product in the stream of commerce, which is
insufficient to justify personal jurisdiction:
The “substantial connection,” between the defendant and the forum State
necessary for a finding of minimum contacts must come about by an action of the
defendant purposefully directed toward the forum State. The placement of a product
into the stream of commerce, without more, is not an act of the defendant
purposefully directed toward the forum State. Additional conduct of the
defendant may indicate an intent or purpose to serve the market in the forum
State, for example, designing the product for the market in the forum State,
advertising in the forum State, establishing channels for providing regular advice
to customers in the forum State, or marketing the product through a distributor
who has agreed to serve as the sales agent in the forum State. But a defendant's
awareness that the stream of commerce may or will sweep the product into the
forum State does not convert the mere act of placing the product into the stream
into an act purposefully directed toward the forum State.
Asahi Metal Indus. Co. v. Superior Court of California, Solano Cty., 480 U.S. 102, 112, (1987) (citations
omitted). See also Phillips, 530 F.3d at 28 (“defendant's awareness of the location of the plaintiff
is not, on its own, enough to create personal jurisdiction over a defendant.”) (collecting cases)).
Plaintiffs also argue that the payments that Suárez made to Gazmey for the YouTube
views are, in and of themselves, sufficient to create personal jurisdiction over Suárez. ECF No.
33 at 9. While “the location where payments are due under a contract is a meaningful datam for
jurisdictional purposes,” “that fact alone does not possess decretory significance,” particularly
when the receipt of payment is “merely an in-forum effect of an extra-forum breach,” it is
“inadequate to support” a finding in favor of personal jurisdiction. Phillips Exeter Acad. v. Howard
Phillips Fund, 196 F.3d 284, 291 (1st Cir. 1999). See American Exp. Intern., Inc. v. Méndez-Capellán,
889 F.2d 1175, 1178–79 (1st Cir. 1989) (noting that “the mere deposit of funds in a bank account

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in Puerto Rico is insufficient to confer in personam jurisdiction”). The fact that Suárez may made
payments to Gazmey in Puerto Rico is not, by itself, enough to find that the Court has personal
jurisdiction over Suárez.
Finally, plaintiffs argue that Suárez had sufficient minimum contacts in Puerto Rico
because Anuel and Suárez signed a contract in Puerto Rico. 4 ECF No. 33. But, plaintiffs’ response
to the motion to dismiss also asserts that Suárez falsified the contract that originated the dispute
between the parties. Id. at 2. They further allege that “Suárez came personally to Puerto Rico to
negotiate and entice Anuel into a contract,” and assert they reached an agreement in this forum,
“which was later formalized into a written agreement” outside the district. Id. at 10. Plaintiffs
support this argument with a sworn statement by Gazmey, in which he declares that Suárez and
Anuel informed him that they met in Puerto Rico to negotiate a contract, and Joxsan Omar
Torres Ayala witnessed the meeting. ECF No. 33-1. Defendant vigorously disputes this
proffered evidence. ECF No. 48.
The amended complaint does not allege that the contract was drafted or signed in Puerto
Rico. The Court finds that plaintiffs’ arguments regarding the contract negotiations are not
supported by an adequate evidentiary proffer. See Foster-Miller, Inc., 46 F.3d at 145. Gazmey’s
unsworn statement contains inadmissible hearsay evidence while asserting that the contract

Suárez also argues that he is not the true party to any contract with Anuel, as he is the President of High Society,
LLC, the Florida Corporation that he alleges signed with Anuel. ECF Nos. 33, 44. Plaintiffs have not moved to
amend the complaint to include High Society. Nonetheless, whether High Society is the true party to the contract is
immaterial for the Court’s analysis, as the Court lacks personal jurisdiction over Suárez even if he signed the
contract in his personal capacity.

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negotiation between Anuel and Suárez occurred in Puerto Rico. Anuel himself—who allegedly
has first-hand knowledge of the meeting—could have submitted an unsworn statement
regarding where and when the alleged meeting took place, the issues discussed, and the
agreements reached, among other facts that would support an allegation that the meeting took
place. Likewise, plaintiffs could have submitted a statement from Joxsan Omar Torres Ayala
about what he observed, or even when the meeting took place. Instead, the Court is left with the
conclusory allegation—in a response in opposition to a motion to dismiss—that the Suárez and
Anuel negotiated the contract in Puerto Rico, without any details that would allow the Court to
evaluate whether sufficient contacts exist in order to warrant personal jurisdiction over Suárez.
In sum, plaintiffs have failed to meet their burden of showing that the Court has personal
jurisdiction over Suárez, as they have failed to meet the relatedness and purposeful availment
prongs of the prima facie test. Plaintiffs have not submitted “competent evidence showing
sufficient dispute-related contacts between the defendant and the forum.” Carreras, 660 F.3d at
552 (internal citations omitted). None of Suárez’s alleged conduct occurred in Puerto Rico, and
defendant did not “purposely and voluntarily direct[] his activities toward the forum so that he
should expect, by virtue of the benefit he receives, to be subject to the court’s jurisdiction based
on these contacts.” Swiss Am. Bank, Ltd., 274 F.3d at 628. Suárez does not own, control, or operate
the websites that distributed the products in dispute. Instead, he placed them in the stream of
commerce, where third parties were the ones responsible for making the products available in
the Puerto Rico market. Plaintiffs have also not demonstrated that a significant portion of the

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income generated by Suárez comes from Puerto Rico. Finally, plaintiffs have failed to allege,
without conclusory allegations based on hearsay, that Anuel and Suárez negotiated or perfected
the contract in Puerto Rico.
IV.

Conclusion
In light of the above, defendant’s motion to dismiss the complaint for lack of personal

jurisdiction, ECF No. 30, is GRANTED. Furthermore, ECF Nos. 36 and 51 are DENIED, and
ECF Nos. 46, 49, 53, and 54 are NOTED. The complaint is hereby DISMISSED WITHOUT
PREJUDICE. The Clerk of Court is to enter judgment accordingly.
SO ORDERED.
At San Juan, Puerto Rico, on this 28th day of September, 2018.
S/AIDA M. DELGADO-COLÓN
United States District Judge