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Daisley v. Blizzard Music Limited U.S.

United States District Court, C.D. California

February 22, 2017

ROBERT DAISLEY, Plaintiff,
v.
BLIZZARD MUSIC LIMITED U.S. and JOHN MICHAEL OSBOURNE, Defendant.

          ORDER

         Before the court is defendant John Michael Osbourne's (“Osbourne”) motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), Osbourne and co-defendant Blizzard Music Limited (US)'s (“Blizzard US”) motion to transfer pursuant to 28 U.S.C. § 1404(a), defendants' motion to dismiss or stay the action due to binding arbitration agreement, and defendants' motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) and Rule 9(b) (ECF No. 8). Plaintiff Robert Daisley (“Daisley”) has opposed (ECF No. 14), and defendants have replied (ECF No. 16).

         In his complaint, filed in state court on August 8, 2016 and removed to this court on August 31, 2016, Daisley asserts that he co-authored a number of songs with defendant Osbourne and others in late 1979, 1980, and 1981. In 1980 and 1981, Daisley entered into songwriter agreements that assigned his copyright interest in the songs to Blizzard UK. Blizzard UK is an entity incorporated in the UK and owned primarily by Osbourne. Under the terms of the agreements, Blizzard UK acted as the publisher and administrator for Daisley's share of the songs and was responsible for collecting and distributing royalties to Daisley. Blizzard UK was to pay 90 percent of all royalties received on Daisley's behalf to Daisley, retaining a ten percent fee for itself.

         Daisley understood that administration of the copyrights within the United States was done by Blizzard US, an entity created and controlled by Osbourne. However, Daisley asserts that he did not learn until 2014 that Blizzard U.S. was retaining fifteen percent of the royalties it received before remitting the royalties to Blizzard UK for distribution to Daisley. Daisley asserts that Osbourne, Blizzard US, and Blizzard UK concealed this fact so that Daisley would not know of the additional deductions. Daisley asserts that the songwriting agreements do not allow Blizzard U.S. or Blizzard UK to take an additional fifteen percent deduction. Daisley accordingly commenced this action against Osbourne and Blizzard U.S. for fraud and an accounting.

         Daisley resides in Australia. Osbourne resides in Los Angeles, California, and England. Blizzard U.S. is incorporated in Nevada and has a post office box and bank account in Nevada, but its books and records are physically located in California and its administration of licenses is conducted primarily in California.

         The court first addresses the defendants' motion to transfer venue pursuant to 28 U.S.C. § 1404(a).

         The court may transfer venue to any district “where it might have been brought” for “the convenience of parties and witnesses, in the interest of justice.” 28 U.S.C. § 1404(a). The moving party bears the burden of showing that an adequate alternative forum exists. Jones v. GNC Franchising, Inc., 211 F.3d 495, 499 n.22 (9th Cir. 2000). “Transfer is appropriate when the moving party shows: (1) venue is proper in the transferor district court; (2) the transferee district court has personal jurisdiction over the defendants and subject matter jurisdiction over the claims; and (3) transfer will serve the convenience of the parties and witnesses, and will promote the interests of justice.” Pfeiffer v. Himax Techs., Inc., 530 F.Supp.2d 1121, 1123 (C.D. Cal. 2008).

         A. Proper Venue

         While Blizzard U.S. is incorporated in Nevada, the record reflects that its business is conducted almost exclusively in California. Osbourne also resides in California. The Central District of California is a district where both defendants reside and is therefore a proper venue for this action. See 28 U.S.C. § 1391(b)(1).

         B. Personal and Subject Matter Jurisdiction

         Defendant Osbourne resides in California. The federal district court in California therefore has personal jurisdiction over Osbourne.

         Blizzard U.S. is incorporated in Nevada, has a bank account in Nevada, and has a P.O. Box in Nevada. However, Blizzard U.S. has no offices in Nevada, all of its books and records are located in California, and the business of Blizzard U.S. is conducted primarily out of California. There is no evidence that Blizzard U.S. conducts any substantial business in Nevada. Specifically, Blizzard U.S. is a music publisher, and the review, negotiation, and granting of license requests are done by Sharon Osbourne, on defendant Osbourne's behalf, principally from her office in Los Angeles, California. (ECF No. 22 (Sharon Osbourne Decl. ¶¶4-5)). As Blizzard US's business is conducted primarily from Los Angeles, California, which is also the location of its books and records, the record supports a conclusion that Blizzard US's principal place of business is in California. Thus, the federal district court in California would have personal jurisdiction over Blizzard US. The defendants have conceded that California courts have jurisdiction over Blizzard US.

         Finally, the parties do not dispute that the federal district court in California would have jurisdiction over Daisley's claims.

         C. Convenience of the Parties and Witnesses and Interests of Justice

         The court must weigh several factors in determining whether transfer is appropriate: (1) the location where the relevant agreements were negotiated and executed; (2) the state that is most familiar with the governing law; (3) the plaintiff's choice of forum; (4) the respective parties' contacts with the forum; (5) the contacts relating to plaintiff's cause of action in the chosen forum; (6) the differences in the cost of litigation in the two forums; (7) the ...


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