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Ewa-Marie Rundquist v. Vapiano Se

July 20, 2011

EWA-MARIE RUNDQUIST,
PLAINTIFF,
v.
VAPIANO SE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Beryl A. Howell

MEMORANDUM OPINION

In this case, an international photographer claims that Vapiano restaurants are illegally exploiting her copyrighted works to achieve their chic look. Plaintiff Ewa-Marie Rundquist alleges that Vapiano restaurants in the United States and around the world are unlawfully displaying her copyrighted photographs as a central part of their d©cor. The plaintiff initiated this case against three corporations she believes to be responsible for this infringement: Vapiano SE, a European company based in Germany, and Vapiano International, LLC and Vapiano Franchise USA, LLC, both of which are incorporated in the United States.*fn1 Defendant Vapiano SE moves to dismiss all claims against it on grounds that the Court lacks personal jurisdiction and, in the alternative, moves to dismiss all claims relating to infringement occurring in Vapiano restaurants outside the United States for lack of subject matter jurisdiction and on grounds of forum non conveniens. The Court concludes that the plaintiff is entitled to a sixty-day period of jurisdictional discovery to ascertain the facts about what Vapiano SE characterizes as the plaintiff's "guesswork" about the company's contacts with this forum. Vapiano SE's motion to dismiss for lack of personal jurisdiction is therefore denied without prejudice. With regard to allegations concerning infringement occurring outside the United States, the Court grants in part and denies in part Vapiano SE's motion to dismiss for lack of subject matter jurisdiction, holding that the Court does not have subject matter jurisdiction over Count I or Count II of the Amended Complaint to the extent that the counts assert Vapiano SE's direct, contributory, or vicarious liability under the Copyright Act for infringement taking place wholly outside the United States, but allowing plaintiff's other claims under the Copyright Act and foreign copyright laws to proceed. Finally, the Court denies Vapiano SE's motion to dismiss claims regarding foreign acts of infringement for forum non conveniens.

I.BACKGROUND

Plaintiff Ewa-Marie Rundquist, a Swedish citizen, is a "highly experienced fashion, lifestyle, and advertising photographer" based in Stockholm, Sweden. Am. Compl. ¶¶ 2, 4, 12. According to the Amended Complaint, her work has appeared in numerous well-known magazines, such as Vogue, Elle, and Glamour, and has been featured in advertising campaigns for a number of international brands. Id. ¶ 12.

In addition to her fashion and advertising work, the plaintiff's pictures have also appeared in several cookbooks, including a cookbook entitled La Pizza: The True Story from Naples (hereinafter "La Pizza"). Id. ¶ 13. La Pizza contains a number of the plaintiff's "original and unique" photographs of Italian street scenes and Italians eating and cooking pizza (hereinafter the "Protected Photographs"). Id. ¶¶ 14-15. Plaintiff states that she owns these photographs and that they "constitute copyrightable subject matter," which is protected under the Copyright Act and by provisions of the Berne Convention for the Protection of Literary and Artistic Works (hereinafter "Berne Convention"), to which the United States is a signatory.*fn2 Id. ¶¶ 3, 15, 17. Every copy of La Pizza contains a notice that the plaintiff is the copyright owner of certain photographs appearing in the book and provides the page numbers on which the plaintiff's Protected Photographs appear. Id. ¶ 16.

Plaintiff alleges that her Protected Photographs are being used without permission as a "central d©cor element" in an upscale Italian restaurant chain named Vapiano, which has restaurants located in the United States and around the world. Id. ¶¶ 1, 24-25. Specifically, the plaintiff alleges that large mural-sized black and white reproductions of her Protected Photographs appear in all Vapiano restaurants, which have the same d©cor and a consistent look. Id. ¶¶ 23, 25. Plaintiff also alleges that her Protected Photographs appear on Vapiano websites. Id. ¶ 28. In addition to using her photographs without authorization, in no instance is the plaintiff referenced as the photographer or owner of the Protected Photographs. Id. ¶ 26.

On November 20, 2009, the plaintiff filed a Complaint in this Court against Vapiano SE; Vapiano International, LLC (hereinafter "Vapiano International"); and Vapiano Franchise USA, LLC (hereinafter "Vapiano USA"). The plaintiff alleges that defendant Vapiano SE, a European public corporation based in Germany, is a franchisor that has established sixty Vapiano restaurants in over sixteen countries around the world, and has more than a hundred new restaurants in development. Id.

¶¶ 5, 18.Vapiano SE is alleged to direct and control the appearance and other operational aspects of all Vapiano restaurants. Id. ¶ 18.Additionally, plaintiff claims that Vapiano SE has ownership interests in many, if not all, Vapiano restaurants. Id.

The plaintiff also asserts claims against defendants Vapiano International and Vapiano USA, both of which are Delaware limited liability companies with their principle place of business in McLean, Virginia. Id. ¶¶ 6, 7. These companies are alleged to be Vapiano SE's affiliates that are controlled by Vapiano SE and act as Vapiano SE's agents with respect to Vapiano restaurants in the United States. Id. ¶ 19.

The plaintiff states that the defendants operate six Vapiano restaurants in the United States, including two in the District of Columbia, and are planning to open eighteen more restaurants in other U.S. cities. Id. ¶¶ 19-20.The defendants also market, own, operate, license or franchise thirty-five Vapianorestaurants in at least fifteen foreign countries. Id. ¶ 21. In all of these restaurants, the plaintiff alleges that the defendants "collectively require and direct . . . prominent[] display [of] Plaintiff's Protected Photographs as a central part of those restaurants' d©cor." Id. ¶ 26.

Prior to initiating this case, the plaintiff claims that on numerous occasions she informed the defendants that she objected to the unauthorized and unlawful use of her photographs. Id. ¶ 29. On November 7, 2008 and January 27, 2009, plaintiff, through counsel, advised the defendants that their display of plaintiff's Protected Photographs infringed plaintiff's copyrights and demanded that they immediately cease the reproduction and display of the photographs. Id. ¶ 31. The defendants allegedly refused, and continue to display her Protected Photographs in their restaurants. Id. ¶ 32.

The plaintiff now asserts the following three causes of action against the defendants for their allegedly infringing copying and display of the Protected Photographs in Vapiano restaurants in the U.S. and abroad and on their websites: (1) direct copyright infringement in violation of the Copyright Act, 17 U.S.C. § 501 et seq., Am. Compl.¶¶ 35-45; (2) contributory and vicarious copyright infringement in violation of the Copyright Act, id. ¶¶ 46-52; and (3) copyright infringement in violation of the copyright laws of fifteen foreign countries (hereinafter "Foreign Copyright Laws"), id. ¶¶ 53-59.*fn3 For these alleged unlawful acts, the plaintiff seeks a permanent injunction to enjoin use of her Protected Photographs in Vapianorestaurants and on the defendants' websites, and a monetary judgment, including actual damages and an accounting of the gains and income derived by the defendants from their use of the plaintiff's protected works. Am. Compl.,Prayer for Relief, ¶¶ 1-4.

After filing her Complaint on November 20, 2009, the plaintiff amended her pleading on April 22, 2010.*fn4 Am. Compl., ECF No. 11. Defendants Vapiano International and Vapiano USA answered the Amended Complaint on May 5, 2010. ECF Nos. 12-13.*fn5 On September 3, 2010, defendant Vapiano SE moved to dismiss the allegations against it for lack of personal jurisdiction, and also moved to dismiss all claims relating to acts of infringement occurring outside the United States for lack of subject matter jurisdiction and for forum non conveniens. Vapiano SE Mot. Dismiss, ECF No. 17. These motions, which are not joined by defendants Vapiano International or Vapiano USA, are currently pending before the Court.*fn6

As explained below, Vapiano SE's motion to dismiss for lack of personal jurisdiction is denied because the plaintiff has requested, and is entitled to, a period of discovery regarding Vapiano SE's ties to the District of Columbia prior to the adjudication of this motion. Vapiano SE has also moved to dismiss Counts I and II of the plaintiff's Amended Complaint to the extent that these counts allege infringement in foreign nations, and Count III for lack of subject matter jurisdiction. The Court denies in part and grants in part this motion, dismissing only the allegations contained in Counts I and II of the Amended Complaint that assert Vapiano SE's direct, contributory and vicarious liability under the Copyright Act for the alleged display of Protected Photographs in foreign Vapiano restaurants. The Court maintains jurisdiction to hear such claims against Vapiano International and Vapiano USA. The Court also maintains jurisdiction to hear plaintiff's claims in Count III of the Amended Complaint, which allege that all of the defendants violated the copyright laws of foreign countries. The Court further denies Vapiano SE's motion to dismiss claims concerning foreign infringement on grounds of forum non conveniens.

II.VAPIANO SE'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

Defendant Vapiano SE argues that it should be dismissed from this case because it does not Columbia of the Protected Photographs. The plaintiff vigorously disputes that activities by Vapiano SE do not support personal jurisdiction. As explained below, the Court denies Vapiano SE's motion to dismiss, without prejudice, to allow the plaintiff a period of discovery regarding defendant Vapiano SE's ties to the District.

A.Standard of Review

To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of "establishing a factual basis for the [Court's] exercise of personal jurisdiction over the defendant." Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990) (citing Reuber v. United States, 750 F.2d 1039, 1052 (D.C. Cir. 1984), overruled on other grounds by Kauffman v. Anglo-American School of Sofia, 28 F.3d 1223 (D.C. Cir. 1994)). To meet this burden, the plaintiff need only make a prima facie showing that the Court has personal jurisdiction. See Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005); Walton v. Bureau of Prisons, 533 F. Supp. 2d 107, 112 (D.D.C. 2008). "The plaintiff, however, cannot rest on bare allegations or conclusory statements and must allege specific facts connecting each defendant with the forum." GTE New Media Servs., Inc. v. Ameritech Corp., 21 F. Supp. 2d. 27, 36 (D.D.C. 1998); see also Second Amendment Found. v. U.S. Conf. of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001); Moore v. Motz, 437 F. Supp. 2d 88, 91 (D.D.C. 2006).

Unlike a motion to dismiss under Rule 12(b)(6), the court "may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction." Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005). The court "may receive and weigh affidavits and any other relevant matter to assist it in determining the jurisdictional facts." United States v. Philip Morris Inc., 116 F. Supp. 2d 116, 120 n.4 (D.D.C. 2000) (internal quotation marks and citation omitted); see also Capital Bank Int'l, Ltd. v. Citigroup, Inc., 276 F. Supp. 2d 72, 74 (D.D.C. 2003). However, all "factual discrepancies appearing in the record must be resolved in favor of the plaintiff." Crane, 894 F.2d at 456 (citing Reuber, 750 F.2d at 1052); see also IMark Mktg. Servs., LLC v. Geoplast S.p.A., 753 F. Supp. 2d 141, 147-48 (D.D.C. 2010). Indeed, the plaintiff's factual assertions in the Complaint are "presumed to be true unless directly contradicted by affidavit." DSMC, Inc. v. Convera Corp.,273 F. Supp. 2d 14, 20 (D.D.C. 2002).

B.Discussion

Personal jurisdiction is "an essential element of the jurisdiction of a district court, without which the court is powerless to proceed to an adjudication." Jankovic v. Int'l Crisis Grp., 494 F.3d 1080, 1086 (D.C. Cir. 2007) (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999)). For the Court to exercise personal jurisdiction over Vapiano SE, this defendant must maintain contacts with the District of Columbia sufficient to support either general jurisdiction or specific jurisdiction under the District of Columbia's long-arm statute, D.C. CODE § 13-423 (2001). See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984).

1.The Court Does Not Have General Jurisdiction Over Defendant Vapiano SE

The Court may maintain general personal jurisdiction over a foreign corporation, pursuant to D.C. CODE § 13-334(a),*fn7 if the corporation is "doing business" in the District of Columbia. FC Inv. Group LC v. IFX Markets, Ltd., 529 F.3d 1087, 1091 (D.C. Cir. 2008). If general personal jurisdiction exists, the defendant must appear and answer for any claims, even ones unrelated to its ties to the jurisdiction. "[T]he reach of 'doing business' jurisdiction under [D.C. CODE] § 13-334(a) is coextensive with the reach of constitutional due process," which allows general jurisdiction over a foreign corporation only if "the defendant's business contacts with the forum are 'continuous andsystematic.'" Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 510 (D.C. Cir. 2002) (citing Helicopteros, 466 U.S. at 415, and Hughes v. A.H. Robins Co., Inc., 490 A.2d 1140, 1148 (D.C. 1985)); see also Roz Trading, Ltd. v. Zeromax Grp., Inc., 517 F. Supp. 2d 377, 383 (D.D.C. 2007).

The plaintiff alleges in her Amended Complaint that the Court has personal jurisdiction over all the defendants, not just Vapiano SE, "because Defendants are doing business in this District through their ownership, licensing, franchising, operation, marketing and/or control of Vapiano restaurants in this District." Am. Compl. ¶ 10. The Amended Complaint further asserts that "Vapiano SE does business in this District individually and through its agents Vapiano International and Vapiano [USA], which it controls." Id. Vapiano SE "is also subject to jurisdiction because it solicits franchise business in this District through various mediums including the Vapiano Websites." Id.

Defendant Vapiano SE correctly notes, however, that pursuant to District of Columbia law, general jurisdiction over a foreign corporation requires personal service under D.C. CODE § 13- 334(a). Vapiano SE Reply Mem., ECF No. 22, at 4-5. In this case, the plaintiff served Vapiano SE under the Hague Service Convention, rather than via personal service. See Pl.'s Mot. Leave File First Am. Compl., ECF No. 10, at 2; Vapiano SE's Unopposed Mot. Extend Time to Answer, ECF No 14, at 1. "Regardless of whether defendants were 'doing business in the District,' plaintiff may not invoke Section 13--334(a) as the basis for personal jurisdiction against a foreign corporation unless the corporation has been served within the District of Columbia." Rossmann v. Chase Home Fin., LLC, No. 10-cv-0977, 2011 WL 1088014, at *2 (D.D.C. Mar. 25, 2011). Accordingly, jurisdiction may only be exercised under the local long-arm statute, D.C. CODE § 13-423(a). See Gorman, 293 F.3d at 514 ("Where the basis for obtaining jurisdiction over a foreign corporation is § 13--334(a), . . . a plaintiff who serves the corporation by mail outside the District is 'foreclosed from benefitting from [the statute's] jurisdictional protection.'" (quoting Everett v. Nissan Motor Corp., 628 A.2d 106, 108 (D.C. 1993)); Kroger v. Legalbill.com LLC, No. 04-cv-2189, 2005 U.S. Dist. LEXIS 42885 at *14-15 (D.D.C. Apr. 7, 2005).

Even if Vapiano SE were personally served in compliance with D.C. CODE § 13-334(a), the record does not establish that Vapiano SE is doing business in the District of Columbia. In support of its motion to dismiss, defendant Vapiano SE provides two declarations from its chief executive officer, Mirko Silz, who states that Vapiano SE has never had any "assets or operations in the District of Columbia or anywhere else in the United States" nor does it have any "ownership interest in any business entity formed in the District of Columbia or anywhere else in the United States." Def. Vapiano SE's Mot. Dismiss, ECF No. 19, Mirko Silz Decl. (hereinafter "Silz Decl. I"),¶ 2; see also Def. Vapiano SE's Reply, ECF No. 22, Mirko Silz Decl. Further Supp. Mot. Dismiss (hereinafter "Silz Decl. II"), ¶¶ 2-3. Vapiano SE acknowledges that it maintains a licensor-licensee relationship with Vapiano International, which covers "intellectual property relating to the restaurant business and the goodwill associated with that intellectual property," but asserts that this license was set for a flat fee "irrespective of whether any restaurant is operated, and the fee was paid prior to the opening of any restaurant in the District of Columbia." Silz Decl. I, ¶¶ 4, 8. The declaration further states that Vapiano SE has "no legal relationship" with Vapiano USA, which is a sub-licensee of Vapiano International. Id. ¶ 6. Additionally, with regard to Vapiano SE's alleged solicitation of franchises in D.C. through its website, Mr. Silz declares that "Vapiano SE does not solicit franchisees for the United States since it has granted an exclusive license to Vapiano International LLC." Id. ¶ 12.

The plaintiff has failed to comply with the procedural requirements of D.C. CODE § 13-334. Additionally, while the plaintiff is afforded every favorable factual inference, the record currently before the Court does not support the plaintiff's claim that Vapiano SE is conducting "continuous and systematic" business in the District of Columbia. See Gorman, 293 F.3d at 510; see also D.C. CODE § 13-334. The plaintiff effectively concedes that general jurisdiction is not proper in her opposition to Vapiano SE's motion by arguing only that the Court should exercise jurisdiction pursuant to the District of Columbia's long-arm statute. Consequently, if personal jurisdiction over Vapiano SE exists, it must be based on defendant Vapiano SE's specific contacts with the District of Columbia.

2.The Record Does Not Currently Support Specific Jurisdiction Over Defendant Vapiano SE

To establish specific personal jurisdiction, the Court must assess whether jurisdiction is applicable under the District of Columbia's long-arm statute, D.C. CODE § 13-423, and must also determine whether jurisdiction satisfies the requirements of due process. See United States ex rel. Richard F. Miller, v. Bill Harbert Int'l Constr., Inc., 608 F.3d 871, 887 (D.C. Cir. 2010); GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000). The plaintiff asserts that jurisdiction is proper under D.C. CODE § 13--423(a)(1), which provides for the exercise of personal jurisdiction over a defendant "who acts directly or by an agent, as to a claim for relief arising from the person's . . . transacting any business in the District of Columbia."*fn8 This subsection of the long-arm statute is applicable when three requirements are satisfied: (1) the defendant must have transacted business in the District; (2) the plaintiff's claims must have arisen from the business transacted in the District; and (3) the defendant must have minimum contacts with the District such that exercise of personal jurisdiction would not offend "traditional notions of fair play and substantial justice." Cellutech, Inc. v. Centennial Cellular Corp., 871 F. Supp. 46, 48 (D.D.C. 1994) (quoting Dooley v. United Techs. Corp., 786 F. Supp. 65, 71 (D.D.C. 1992)). Section (a)(1)'s "transacting any business" clause is interpreted to be coextensive with the Constitution's due process requirements, and thus the statutory and constitutional concerns merge into a single inquiry. Mwani,417 F.3d at 9 n.8 (quoting Hummel v. Koehler, 458 A.2d 1187, 1190 (D.C.1983)); GTE New Media Servs. v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000). In the present case, the Court need not address the second and third requirements, namely, whether plaintiff's claims arise from Vapiano SE's contacts with the District and whether this defendant has sufficient contacts with the forum, because the current record does not establish that Vapiano SE transacts business in the District of Columbia.

The plaintiff proffers a number of arguments in support of her contention that the Court may exercise personal jurisdiction over Vapiano SE because it "transacts business" in the District of Columbia. These arguments are unpersuasive. The Court addresses each seriatim.

a.The Record Does Not Support Plaintiff's Claim That Vapiano SE Owns Or Controls Vapiano Restaurants In The District of Columbia

The plaintiff contends that Vapiano SE "owns, controls, or operates" two Vapiano restaurants in the District of Columbia. Pl.'s Opp'n Vapiano SE's Mot. Dismiss, ECF No. 21, (hereinafter "Pl.'s Opp'n Mem."), at 16; Am. Compl. ¶¶ 18, 19. The defendant's two declarations state that Vapiano SE "operates no restaurants in the U.S.A." and that, aside from the flat-fee license with Vapiano International, it "has no control over [defendants Vapiano International or Vapiano USA] or any of their restaurants in the U.S.A." Silz Decl. II, ¶¶ 2-3. Moreover, Vapiano SE avers that it earns "no income . . . based on the operation of any restaurant in [D.C.]" and has imposed "no requirement for the use of any photographs in Vapiano restaurants." Silz Decl. I,¶¶ 9-10.

Nevertheless, the plaintiff argues that the Court should deem Vapiano SE to be transacting business in D.C. because (1) "numerous Vapiano press releases maintained by Vapiano SE on its website . . . plainly state that the Washington, D.C. Vapiano restaurants are 'corporately owned'" and these press releases create a factual discrepancy which must be resolved in her favor; and (2) even if the Court accepts the defendant's representations, Vapiano SE's ...


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