Prokos v. Haute Media LLC

Background

Andrew Prokos sued Haute Living, Inc., alleging that the company reproduced photographs he created and registered with the United States Copyright Office. The photographs showed a Harlem brownstone and the Solomon Guggenheim Museum in Manhattan. The amended complaint asserted copyright infringement and a claim under the Digital Millennium Copyright Act.

Haute Living, a Florida corporation operating online and print publications, moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. In the alternative, it moved under 28 U.S.C. § 1404(a) to transfer the case to the Southern District of Florida.

Personal Jurisdiction

Because the parties had conducted jurisdictional discovery but had not held an evidentiary hearing, the court applied a prima facie standard. Under that standard, Prokos had to provide allegations and supporting materials that, if credited, would establish jurisdiction. The court viewed the evidence in the light most favorable to Prokos and resolved doubts in his favor.

Prokos conceded that New York did not have general jurisdiction over Haute Living. The court therefore considered specific jurisdiction, which applies when the lawsuit arises from or relates to the defendant’s contacts with the forum.

The court applied New York Civil Practice Law and Rules § 302(a)(3)(ii), which requires a plaintiff to show that: (1) the defendant committed a tortious act outside New York; (2) the claim arose from that act; (3) the act caused injury to a person or property in New York; (4) the defendant reasonably should have expected consequences in New York; and (5) the defendant derived substantial revenue from interstate or international commerce.

The court found the first two requirements satisfied. Prokos alleged that Haute Living published the photographs without permission, and the claims arose from that alleged publication. Haute Living argued that it had not uploaded the images, but the court found that its submissions did not address the acts of Haute Living itself or where the alleged infringement occurred. Given Haute Living’s repeated assertion that it operated from Florida, the court treated the alleged conduct as occurring outside New York for purposes of the motion.

The court also found injury in New York. Prokos alleged that his principal place of business was in New York and submitted a website contact page listing only a New York business address. The court concluded that, under New York law, the location of a copyright-infringement injury for a New York copyright owner is the owner’s principal place of business. Prokos therefore did not need to show that he lost sales in New York.

The court found that consequences in New York were reasonably foreseeable. The photographs depicted New York buildings, at least one photograph appeared in an article about New York real estate, and Haute Living had an advertising agreement with New York-based Naftali Group. The court found that this agreement connected the alleged infringement to New York. It also noted that seven New York real estate professionals had contracts with Haute Living’s affiliate, Haute Residence.

Finally, the court found that Haute Living derived substantial revenue from interstate or international commerce. The evidence indicated that Haute Living received revenue from customers and business in states other than Florida and from Switzerland. The court concluded that all requirements of § 302(a)(3)(ii) were satisfied.

The court then considered due process. It found that Haute Living had purposefully established contacts with New York through its claimed New York office, New York-based employee, advertising agreement with Naftali Group, and activities involving New York real estate. The court found a clear connection between those contacts and the alleged infringement. Haute Living also did not present a compelling argument that exercising jurisdiction would be unreasonable. The court therefore denied Haute Living’s motion to dismiss for lack of personal jurisdiction.

Transfer of Venue

The court next considered Haute Living’s alternative request to transfer the case to the Southern District of Florida. The court evaluated the convenience of witnesses, convenience of the parties, access to documents and other evidence, location of the operative facts, ability to compel witnesses, the parties’ relative means, the districts’ familiarity with federal copyright law, Prokos’s choice of forum, and judicial economy.

The court found that relevant witnesses and documents were located in both Florida and New York. Because Haute Living had not identified non-party witnesses who would refuse to attend a New York trial, the ability to compel witnesses was neutral. The convenience of the parties was also neutral, while the parties’ relative means favored Prokos.

The location of the operative facts favored transfer because Haute Living argued that its relevant conduct occurred in Miami. Both districts were familiar with federal copyright claims, so that factor was not significant. Judicial economy somewhat favored keeping the case in New York because the court had already become familiar with the facts while deciding the motion. Prokos’s choice of forum also favored keeping the case in New York. The remaining factors were neutral.

The court concluded that Haute Living had not shown by clear and convincing evidence that the balance of factors favored transfer. It denied the transfer request. In the conclusion, the court stated that Haute Living’s motion to dismiss or transfer was denied and directed the clerk to terminate the motion. The order also set a telephone status conference and directed the parties to address Prokos’s pending request to file a second amended complaint and submit a proposed case-management plan.