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Lisa McConnell, Inc. v. Idearc

January 22, 2010

LISA MCCONNELL, INC., PLAINTIFF,
v.
IDEARC, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER: (1) GRANTING DEFENDANTS' MOTION TO DISMISS (Doc. No. 23); and (2) DENYING DEFENDANTS' MOTION TO STRIKE (Doc. No. 35). SUPPLEMENTAL BRIEFING

Presently before the Court is Defendants Verizon Communications, Inc. and Verizon Yellow Pages' motion to dismiss Plaintiff's Complaint. (Doc. No. 23.) Plaintiff filed an opposition and a supplemental brief, and defendants filed a reply and a motion to strike the supplemental brief. (Doc. No. 35.) After the Court granted Plaintiff's request at oral argument for jurisdictional discovery, Plaintiff filed a supplemental opposition on the issue of personal jurisdiction and defendants filed a reply.

For the reasons stated herein, the Court GRANTS Defendants' motion to dismiss for lack of personal jurisdiction. Because Defendants have had the opportunity to respond to the issues raised in Plaintiff's supplemental brief, the Court DENIES the motion to strike.

FACTUAL BACKGROUND

This case concerns Defendants' alleged unlawful use of graphic art created by Plaintiff Image One ("Plaintiff"). The following facts are taken from Plaintiff's Complaint unless otherwise noted.

Plaintiff, a California corporation with its principal place of business in San Diego, California, produces "high-end three-dimensional graphic art" which customers purchase for use in yellow pages advertising. Plaintiff has secured copyright protection in approximately 451 art templates and individual advertisements.

Defendant Verizon Communications, Inc. ("VCI") is a Delaware corporation with its principal place of business in New York. (Decl. of Jane A. Schapker in Supp. of Def.'s Mot. to Dismiss ¶ 2 ("Schapker Decl.")) On November 17, 2006, VCI spun off the subsidiaries that formally comprised its yellow pages operations (the "Verizon Subsidiaries"). The subsidiaries were spun off as independent publicly-owned companies and became Defendants Idearc, Inc., Idearc Media Corp., Idearc Media Sales West, Inc., and Idearc Media Services - West, Inc. (collectively, "Idearc"). Idearc has continued the same business of publishing yellow pages directories, with a licensing agreement to use the Verizon trademark on its directories.*fn1

Upon reviewing a small sampling of the Verizon Subsidiaries' and Idearc's paper telephone directories and yellow pages websites for the years 2006, 2007, and 2008, Plaintiff found at least 12 advertisements that allegedly infringe on Plaintiff's copyrighted works (0.69 infringements per paper directory). Extrapolating from that to the approximately 3,600 directories and websites published by Defendants during those years, Plaintiff estimates there are at least 2,400 infringements.

Previously, Plaintiff had filed a separate copyright infringement suit against the Verizon Subsidiaries, which resulted in confidential settlement agreements. (Compl. ¶ 14.) The subsidiaries took a temporary license from Plaintiff, allowing time to remove the infringing images. Plaintiff alleges the license expired more than four years ago, and Defendants have continued to infringe or have resumed infringing.

PROCEDURAL HISTORY

On January 13, 2009, Plaintiff filed the Complaint against Idearc, VCI, and Verizon Yellow Pages Company. The Complaint sets forth six causes of action: (1) copyright infringement, 17 U.S.C. § 101, et. seq.; (2) vicarious copyright infringement; (3) contributory copyright infringement; (4) false designation of origin in violation of Lanham Act § 43(a); (5) unfair competition in violation of California Business and Professions Code § 17200; and (6) civil conspiracy.

On April 8, 2009, Idearc filed a notification of bankruptcy, resulting in an automatic stay. (Doc. No. 12.)

On September 8, 2009, VCI and Verizon Yellow Pages Company filed the instant motion to dismiss the Complaint for: (1) untimely service of process under Rule 4(m) of the Federal Rules of Civil Procedure, (2) lack of personal jurisdiction under Rule 12(b)(2), and (3) failure to state a claim under Rule 12(b)(6). Plaintiff filed an opposition along with a Supplemental Brief, and Defendants filed a reply and a Motion to Strike the Supplemental Brief.

At oral argument on October 26, 2009, the Court granted Plaintiff's oral request for jurisdictional discovery and scheduled further briefing on the issue of personal jurisdiction. Plaintiff subsequently filed a supplemental opposition, and Defendants filed a reply.*fn2

DISCUSSION

I. Verizon Yellow Pages Company

As an initial matter, the Court grants Defendants' motion to dismiss as to Verizon Yellow Pages Company. According to the Delaware Secretary of State's Certificate of Ownership and Merger, the corporation was merged into Verizon Information Services Inc. in 2003 and ceased to exist. (Def.'s Mot. to Dismiss, Exhibit 1; Decl. of Theresa Murray in Supp. of Def.'s Mot. to Dismiss.) Plaintiff admits it is no longer an active corporation. (Compl. ¶ 4.) Additionally, the allegations in the Complaint reach only as far back as 2006, well after the 2003 merger.

II. Dismissal for Lack of Personal Jurisdiction under Rule 12(b)(2)

A. Legal Standard

Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court may decide the issue of personal jurisdiction on the basis of affidavits and documentary evidence submitted by the parties or hold an evidentiary hearing*fn3 regarding the matter. See Data Disc, Inc. v. Sys. Tech. Ass'n., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). Under either procedure, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate. Bauman v. DaimlerChrysler Corp., 579 F.3d 1088 (9th Cir. 2009). If the motion is based on affidavits and documentary evidence, the plaintiff need only make a prima facie showing of facts establishing personal jurisdiction, "i.e. facts that, if true would support the court's exercise of jurisdiction over the defendant." Amini Innovation Corp. v. JS Imports, Inc., 497 F. Supp. 2d 1093, 1100 (C.D. Cal. 2007). Uncontroverted allegations in the complaint are ...


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