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IMAGES OF THE WORLD v. CONTINENTAL AMERICAN INDUSTRIES

August 30, 2005.

IMAGES OF THE WORLD, INC., Plaintiff,
v.
CONTINENTAL AMERICAN INDUSTRIES, INC. and CONWEST RESOURCES, INC., d/b/a FALCON STUDIOS, JOCKS STUDIOS, MUSTANG STUDIOS and THE FALCON INTERNATIONAL COLLECTION, Defendants.



The opinion of the court was delivered by: DAVID COAR, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Images of the World, Inc. ("Plaintiff" or "Images"), is an Illinois corporation with its principal place of business in Chicago, Illinois. (Pl. Compl. ¶ 1). Defendants Continental American Industries, Inc. ("Continental") and ConWest Resources, Inc. ("ConWest" or "Defendant") (collectively "Defendants"), d/b/a Falcon Studios, Jocks Studios, Mustang Studios, and the Falcon International Collection, are both California corporations with their principal place of business in California. (Pl. Comp. ¶ 2). Defendants move to dismiss for lack of personal jurisdiction. Alternatively, should this Court find personal jurisdiction, Defendants move to dismiss for improper venue, or to transfer this action to the Northern District of California for forum non conveniens. For the reasons set forth below, Defendants' motion to dismiss for lack of personal jurisdiction, or alternatively, transfer this action, pursuant to 28 U.S.C. § 1404(a), to the Northern District of California, is DENIED in its entirety.

FACTUAL BACKGROUND

  Plaintiff is a producer, manufacturer, and retailer of adult films. (See, Steven Toushin ("Toushin") Declaration, ¶ 4). In 1987, Toushin, the president and sole shareholder of Images, purchased the copyrights to the films "Dangerous," "Getting It," "A Few Good Men," and "Games" (hereinafter referred to as "the four films") (Toushin Declaration, ¶ 5). In 1989, Toushin assigned all his individual rights to the four films to Images. (Id. at ¶ 6).

  For over fifteen years, Defendants have been in the business of producing adult entertainment that is distributed through outside distributors, mail order and the Internet. (Def. Ex. 1; Terry Mahaffey ("Mahaffey") Declaration, ¶ 5).*fn1 In addition, Defendants also distribute videos produced or manufactured by other production companies. (Id. at ¶ 6). Defendants, through mail order and via the Internet, have openly offered the four films for sale. (Id. at ¶ 26).

  In 1991, Images discovered that Continental was selling the four films. (Pl. Compl., ¶ 6). Images contacted Continental regarding the unauthorized sales, and Continental conceded that the copyrights to the four films were owned by Images. (Toushin Declaration, ¶ 10). Continental agreed to cease and desist its infringing activity, surrender to Images the masters of the four films, destroy all the copies of the copyrighted works, and pay Images $4000 (the approximate income earned by Continental by selling the four films). Id. Images refrained from filing suit against Continental as a result of Continental's agreement to cease and desist the infringing activity. (Pl. Compl., ¶ 29). In 2001, Plaintiff discovered that Defendants' website was offering the four films for sale. (Pl. Compl., ¶ 9). Since the matter had been addressed in 1991, Plaintiff was under the impression that Defendants had discontinued the duplication and sale of the four films. (Toushin Declaration, ¶ 14). Plaintiff purchased the four films through the website to determine whether they were the same films to which Images owns the copyright. (Pl. Compl., ¶ 10). Upon arrival, Plaintiff learned that they were the four films, and furthermore, that Defendants had attached a notice to the copies claiming copyrights in each of the films. (Pl. Compl., ¶ 11).

  Plaintiff contends that it is the owner of the copyrights for each of the four films in question. (Pl. Compl. ¶ 5). Plaintiff's suit contains three counts. Count I alleges copyright infringement, in violation of 17 U.S.C. § 101, et seq. Count II is a claim against Defendants for false designation of origin and unfair competition (15 U.S.C. § 1125(a)). Count III is a claim of common law fraud against Continental.

  DISCUSSION

  Defendants move to dismiss for lack of personal jurisdiction. Defendants contend that they lack the continuous and systematic contacts with Illinois that would confer general jurisdiction. Moreover, Defendants maintain that this Court does not have specific jurisdiction over Defendants. Should this Court assert personal jurisdiction, Defendants move to dismiss for improper venue, or alternatively, transfer this action to the Northern District of California for forum non conveniens. The Court will address each ground for dismissal in turn. I. Motion To Dismiss For Lack of Personal Jurisdiction

  Defendants contend that Images' Complaint must be dismissed pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction. To survive a motion to dismiss for lack of personal jurisdiction, Plaintiff has the burden of making a prima facie case for personal jurisdiction. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997) (internal citations omitted). When reviewing a motion to dismiss, all jurisdictional allegations are taken to be true. Euromarket Designs, Inc. v. Crate & Barrel Ltd., 96 F. Supp. 2d 824, 833 (N.D. Ill. May 21, 2001) (citing Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987)). If there are any conflicts between the parties' affidavits, they will be resolved in favor of the plaintiff. Id.

  A. General Jurisdiction

  General jurisdiction is appropriate when the defendant has engaged in continuous and systematic activities in the forum state. RAR, 107 F.3d at 1277. Neither party alleges that Defendants' activities in Illinois are continuous and systematic. Images concedes that if personal jurisdiction exists in this case, it must be specific.

  B. Specific Jurisdiction

  Specific jurisdiction is proper when the cause of action arises out of or is related to the defendant's contacts with the forum. RAR, 107 F.3d at 1277. In order to make a prima facie case for specific jurisdiction, a plaintiff must show that: (1) the defendant is amenable to service of process; and (2) bringing the defendant into court is consistent with due process. LFG, L.L.C. v. Zapata Corp., 78 F. Supp.2d 731, 734. The Court will discuss each of the two factors necessary for specific jurisdiction in turn. 1. Amenability to Service

  Fed.R.Civ.P. 4(k) provides:
service is sufficient to establish personal jurisdiction over the defendant either, first, when such service is provided for by a United States statute, or second, when the defendant could be subjected to the jurisdiction of a court in the forum state through that state's long arm statute
See Euromarket Designs, Inc. v. Crate & Barrel Ltd., 96 F.Supp.2d 824, 834 (N.D. Ill. 2000). "The Illinois long-arm statute provides that a defendant is subject to the jurisdiction of its courts as to any of several specified causes of action." Id.; see also 735 ILCS 5/2-209 (a). The statute also allows Illinois courts to exercise personal jurisdiction to the fullest constitutional limit. 735 ILCS 5/2-209(c). Therefore, the requirements of the Illinois long-arm statute may be satisfied by inquiring as to whether subjecting the Defendants to the personal jurisdiction of Illinois comports with federal due process standards.

  2. Due Process

  In order for Illinois to assert personal jurisdiction over a foreign defendant, the defendant must have sufficient contacts with Illinois that would provide a fair warning that those contacts may subject the defendant to jurisdiction in Illinois. Burger King v. Rudzewicz, 471 U.S. 462, 472-73 (1985). The types of contacts that constitute fair warning are those that are purposefully directed to the forum state to establish minimum contacts with that state. Id. at 473. Moreover, "[i]f a defendant has purposefully established minimum contacts with the forum State, the nature of the contacts are considered to determine whether assertion of jurisdiction would comport with fair play and substantial justice." ...


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