9th Circuit Says Court Lacks Jurisdiction in AMA Copyright Case

SAN FRANCISCO, Calif. – In an unusual 2-1 ruling which featured opinions written by all three judges – along with a separate concurrence with the majority opinion authored by a member of that majority – a panel from the U.S. Court of Appeals for the Ninth Circuit affirmed Monday the district court’s dismissal of copyright claims brought against a Polish website operation by AMA Multimedia, the company behind PornPros and numerous other adult brands.

Applying the federal rule of civil procedure known as the “federal long-arm statute,” the majority held that “the exercise of personal jurisdiction would not comport with due process because defendant lacked the requisite minimum contacts with the United States.”

While the panel concluded that the defendant Marin Wanat, a Polish citizen who operates a site called “ePorner,” “committed intentional acts by establishing and maintaining ePorner, registering two domains, and entering into an agreement with an American domain name server,” the panel also found that Wanat “did not expressly aim his suit-related conduct at the United States.”

The judicial panel also found that the district court “did not abuse its discretion by limiting the scope of plaintiff’s jurisdictional discovery on the basis of privacy concerns.”

The panel noted that it “declined to consider, for the first time on appeal a European Commission decision, known as the ‘Privacy Shield Decision,’ which established that Member States, including Poland, could transfer personal data to certain organizations in the United States.”

The judges also declined to consider the European Parliament’s enactment of the General Data Protection Regulation, which “repealed and replaced Poland’s Personal Data Protection Act after this appeal was filed.”

Where the majority disagreed, giving rise to four opinions being filed by three judges, was the question of whether its ruling on jurisdiction should signal the end of the case. Judge Ryan Nelson, who wrote the majority opinion and the separate concurrence, wrote that “the district court was not precluded from exercising its discretion on remand to consider intervening law in any supplemental request for jurisdictional discovery or amendment of the complaint.”

Judge Sandra Ikuta, on the other hand, wrote that because “the district court lacked personal jurisdiction over defendants, it had authority only to remove the case from its docket.”

The dissenting judge, Ronald Gould, disagreed on a fundamental level over the question of whether Wanat’s conduct in operating ePorner subjected him to the jurisdiction of a U.S. court.

In his dissent, Gould noted that prior to the lawsuit ePorner “attracted nearly 20% of its user base and, as a result, substantial advertising profits from the United States market; utilized domain name servers (DNS) of a United States company that specifically brands itself as increasing internet speeds in the United States; and employed Terms of Service that invoked the protections of United States law.”

“If we take the undisputed facts alleged by Plaintiff-Appellant AMA Multimedia as true and resolve any factual disputes in its favor—as we must—Wanat has targeted his economic activity toward the United States and may properly be haled (sic) into court here,” Gould wrote. “The majority, in reaching the contrary conclusion, unduly restricts the authority of United States courts to hold alleged, foreign tortfeasors to account and incorrectly curtails our established precedents.”

In the majority opinion, Nelson examined the question of whether the long-arm statute applied in the case under the test established by case law in the Ninth Circuit and came to a decidedly different conclusion than Gould.

“Where allegedly tortious conduct takes place outside the forum and has effects inside the forum, our circuit has examined purposeful direction using an ‘effects test’ based on Calder v. Jones,” Nelson wrote. “Under this test, ‘the defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.’”

Nelson wrote that the court did conclude “that Wanat committed an intentional act.”

“The district court found, and Wanat acknowledges, that he is one of the partners of MW Media, which owns ePorner,” Nelson wrote. “From Poland, Wanat registered two proxy domains—epornergay.com and eprncdn.com—via GoDaddy’s Polish website (a company whose primary place of business is in Arizona). He also purchased secondary DNS services from Tiggee (based in Virginia). Both proxy domains direct traffic to ePorner. Each of Wanat’s actions were intentional acts which satisfy this first prong.”

A more difficult question, Nelson explained in the decision, is whether Wanat’s conduct satisfied the second prong of the test, which requires that the conduct be “expressly aimed at the forum state.”

In arguing that the court does have jurisdiction over Wanat, AMA pointed to geotargeted ads on ePorner, which (among other things) assure the site’s visitors from Germany see ads in German, while visitors in the United States see ads in English.

“AMA alleges, and Wanat’s expert agreed, that ePorner uses geo-located advertisements, which tailor advertisements based on the perceived location of the viewer. This tailoring does not establish that Wanat expressly aimed ePorner at the United States,” Nelson wrote (italics maintained from the original). “ePorner’s geo-located advertisements, provided by a third-party advertising company, unlike Brand’s, are always directed at the forum: a viewer in the United States will see advertisements tailored to the United States while a viewer in Germany will see advertisements tailored to Germany.”

Nelson added that Wanat “does not personally control the advertisements shown on the site, as ePorner contracts with third parties (not located in the United States) which tailor the advertisements themselves or sell the space to other parties who do.”

Nelson further held that Wanat’s “other contacts with the United States also fail to establish express aiming.”

Noting that AMA argued that ePorner’s TOS suggest that the site “(and presumably Wanat) entered into contracts with many U.S. residents because anyone who joined the site assented to the TOS, thereby forming a contract,” Nelson held that the mere existence of the TOS and its terms are not enough to establish conduct expressly directed at the U.S. market, as well.

“Whether or not the TOS constitutes a contract, it does not evince Wanat’s or ePorner’s effort to target the U.S. market,” Nelson wrote. “Any dispute with U.S. residents arising out of the performance of the TOS could create specific jurisdiction in the United States for violation of those terms. But AMA does not allege violations of the TOS. The TOS therefore does not establish any targeting of the U.S. market; it at most suggests Wanat knew ePorner might have U.S. traffic.”

To read the judicial panel’s full decision and related concurrences and dissents, click here.