United States District Court, D. Nebraska
MEMORANDUM AND ORDER
LAURIE SMITH CAMP, Chief District Judge.
This matter is before the Court on the Motion to Dismiss Complaint or, in the alternative, to Transfer Venue (Filing No. 17), filed by Defendants Erickson Productions, Inc. ("Erickson Productions") and Jim Erickson ("Erickson") (collectively "Defendants"). For the reasons discussed, the Motion will be granted, and this case will be dismissed without prejudice.
For purposes of the pending Motion, the Court accepts as true all well-pled factual allegations in the Plaintiff's' Amended Complaint (Filing No. 7), although the Court need not accept Plaintiff's legal conclusions. The Court has considered additional evidence with respect to jurisdictional issues ( see Filing Nos. 19, 20, 23.) The following is a summary of the factual allegations.
Plaintiff, Nebraska Machinery Company ("NMC") is a Nebraska corporation with its principal place of business in Omaha, Nebraska. NMC is a dealer of heavy machinery, and sells or leases products manufactured by industry leaders such as Caterpillar for use in the construction, power generation, material, trucking, agriculture, and railroad industries.
Erickson is a resident of the state of California, and is the owner of Erickson Productions. (Filing No. 20 at ECF 3 ¶ 18.) Erickson Productions is a California corporation with its principal place of business in Petaluma, California. Erickson Productions is not registered to do business in the state of Nebraska. It does not have any offices in Nebraska, nor does it have any employees, officers, members, or agents who work or live in Nebraska. ( Id. at ECF 2 ¶¶ 8, 9.) Erickson Productions is the sole U.S. distributor and licensor of photographic images taken by Erickson. ( Id. at ECF 1 ¶ 4.)
In 2012, NMC began a redesign of its company website, www.nmc-corp.com. The NMC employee in charge of the redesign proposed the use of various digital images as background and website banners. The proposed images were drawn from NMC's own photographs, a machinery manufacturer's photograph collection, and from the Internet, including images found on Erickson's website (the "Photographs"). An NMC employee obtained the Erickson images by using the right-click function on images contained in the Erickson website, and copying and pasting the images into the draft redesign.
The NMC employee in charge of the redesign received internal approval for the draft redesign of the website, then sought Erickson Productions' permission to use the Photographs on NMC's redesigned website by completing and submitting an online form through the Erickson website, www.ericksonstock.com, which Erickson Productions made available to attract those seeking a nonexclusive license to use its images. In its request, NMC provided links to unpublished examples of NMC's proposed and internally approved use of the Photographs in the redesigned website, which had not been launched.
In response to NMC's inquiry, a representative of Erickson contacted the NMC employee by telephone to discuss NMC's intended use of the Erickson Images and related licensing. During the conversation, the Erickson representative confirmed that NMC was not operated or owned by Caterpillar, and the parties discussed a licensing fee of $400 for a nonexclusive license for the Erickson Images. The NMC employee agreed to the proposed amount and asked the Erickson representative to provide a license and written invoice for the cost of licensing the Erickson Images. The NMC employee provided his email for delivery of the requested materials; however, Erickson did not provide the license and invoice as discussed.
NMC launched its new website in December 2012, although NMC had not received the license from Defendants. When launched, the redesigned website included the Photographs which still displayed the Erickson watermark, as the images appear on Erickson's website. Generally, once a written license is signed, Erickson Productions provides a high resolution version of the image without the watermark. NMC believed it substantially completed the process for obtaining a written license, and was waiting for confirmation and delivery of the high resolution images before replacing the draft images with high resolution images. NMC also expected to be invoiced for the promised license from Erickson.
On or about January 21, 2014, counsel for Defendants contacted NMC claiming that NMC was using numerous photos created and owned by Erickson, and such use was without a proper license. Defendants' counsel advised NMC that this unlicensed use of Erickson's copyright photos infringed Erickson's copyrights and demanded that NMC cease and desist using the photos. Upon receipt of the letter, NMC removed the draft images from its website and began discussing the accusations with Erickson's attorney. Erickson threatened litigation against NMC for copyright infringement and demanded $900, 000 in damages for alleged copyright infringement of the Erickson Images.
Erickson now disputes that the parties discussed a $400 licensing fee, or that NMC was ever quoted a licensing fee. Given the large sum of damages that Defendants seek, and the threat of being sued in a foreign and/or inconvenient jurisdiction, NMC filed this action to seek a declaration of its legal rights. Specifically, NMC seeks a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202, that NMC did not infringe copyrights allegedly owned by Erickson in certain photographs at issue, and that damages for infringement, if any, are minimal.
Defendants dispute NMC's factual allegations. Defendants also assert that Erickson Productions is not registered to do business in Nebraska, nor does it have any employees, officers, members, or agents who live or work in Nebraska. (Filing No. 20 ¶¶ 7-12.) Erickson Productions asserts that it never licensed the Photographs to NMC, or to any customers in Nebraska. ( Id. ¶ 14-15.) Erickson Productions has no record of any communication or correspondence with NMC, or any of its employees or agents. ( ...