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New Sensations, Inc. v. Does 1-1,474

District court grants motion of defendants, users of peer-to-peer file sharing network, to dismiss and/or quash subpoena in copyright action, concluding that, based on publically available information, plaintiff, license owner of copyrighted adult film, did not have good-faith basis to believe that venue was proper and jurisdiction was attainable.

Plaintiff New Sensations, Inc., the owner of an exclusive license in the adult film Big Bang Theory: A XXX Parody, filed a copyright lawsuit against 1,474 unidentified defendants, alleging that defendants illegally reproduced and distributed the work using the internet peer-to-peer file sharing program BitTorrent. The court previously granted plaintiff leave to take limited expedited discovery to serve subpoenas on defendants’ Internet Service Providers (ISPs), seeking information to identify the defendants. Several defendants filed motions to dismiss and/or quash the subpoena, arguing that they have no connection with California.

In order to subject defendants to personal jurisdiction in the state of California, plaintiff must establish that the defendant purposefully availed itself of the privilege of conducting activities within the state. In considering defendants’ motion to dismiss and/or quash the subpoena, the court selected and investigated random IP addresses identified in plaintiff’s complaint. The results of the court’s investigation – presumptive geographic data indicating that the defendants resided outside of California – suggested that the court lacked personal jurisdiction over many of the defendants. The court reasoned that, even if one or more of the unidentified defendants allegedly downloaded the file at some point during the time period in question from a computer located in the district, no case law existed to support personal jurisdiction over all 1,474 defendants, based on this connection. Noting that the logical extension of this unprecedented holding would be that everybody who used BitTorrent would subject themselves to jurisdiction in every state, the court held that defendants did not purposefully avail themselves of the privilege of conducting activities in California.

The court also concluded that venue was improper. In the statutory venue provision for copyright, venue is proper in the district in which the defendant or his agent resides or may be found. The court found that plaintiff did not and likely could not allege that each of the 1,474 defendants – or their agents – were found in the Northern District of California. In a federal question case, venue is proper case in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, and nothing in the complaint suggested that plaintiff had a good-faith basis for alleging that a substantial part of the events or omissions giving rise to the claim related to all 1,474 defendants occurred in the court’s district.

Noting that good cause may exist for granting a motion for early discovery where the need for the discovery, in consideration of the administration of justice, outweighs the prejudice to the party required to respond, the court reasoned that, where plaintiff has made no effort to determine jurisdiction, “the administration of justice is not served by requiring out-of-state recipients of subpoenas to bring challenges to the subpoenas in far-flung jurisdictions.” In addition, from the perspective of judicial economy, the court found that it made more sense for plaintiff to bring suit against the defendants “in the court where they have a good faith belief that venue and personal jurisdiction are attainable and the case can actually be prosecuted,” and that plaintiff would suffer no prejudice by being required to do so.

The court ordered plaintiff to conduct a search to obtain geographic information about the IP Addresses listed in its Complaint to thereafter submit a declaration identifying the location for each IP address at issue. For all IP Addresses outside of the district, the court ordered plaintiff to either: (a) file a voluntary dismissal without prejudice as to those defendants; or (b) show good cause as to why it has a good faith belief that jurisdiction exists and venue is proper as to each individual defendant. As to the latter, the court cautioned that “general arguments” would not suffice, and that plaintiff needed to make a specific showing, as to each defendant, why plaintiff has a good faith belief that jurisdiction and venue are proper.