21 September 2000
Source: Hardcopy from EFF.
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COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
SUPERIOR COURT OF THE STATE
Real Party in Interest.
Sixth Appellate District
PETITION FOR WRIT OF MANDATE TO COMPEL TRIAL
COURT TO QUASH SERVICE OF PROCESS, MEMORANDUM
OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
(APPENDIX OF EXHIBITS UNDER SEPARATE COVER)
ALLONN E. LEVY (Bar No. 187251)
HUBER + SAMUELSON APC
210 North Fourth Street, Suite 400
San Jose, CA 95112
Telephone: (408) 295-7034
Facsimile: (408) 295-5799
Attorneys for Petitioner
TABLE OF CONTENTS
TABLE OF AUTHORITIES
II. PETITION FOR WRIT OF MANDATE
IV. MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PETITION FOR WRIT OF MANDATE
A. Introduction1. Question Presented:
2. Short Answer:
B. Nature Of Action1. Situs and Identification of Parties
2. Summary Of Facts Re Jurisdiction
C. Summary Of Argument
D. Because California lacks personal jurisdiction over petitioner Pavlovich, this court should intervene and issue the requested relief1. Standard of Review
2. The court lacks personal jurisdiction over defendant PAVLOVICHa. General Jurisdiction Is Absent In This Case
b. Specific Jurisdiction Is Similarly Absent in This Case(1) PAVLOVICH has had no purposeful contact with California and has not purposefully availed himself of the benefits of the forum state
(2) The Claim does not arise from PAVLOVICH's forum-related activities
(3) Exercise of jurisdiction would not be reasonable in this case
TABLE OF AUTHORITIES
Bancroft & Masters v. Auguata Nat'l Inc., (9th Cir. 2000) __f.3d__
Burger King v. Rudzewicz (1985), 471 U.S. 462
Calder v. Jones, (1984) 465 U.S. 783
Cybersell, Inc. v. Cybersell, Inc (9th Cir. 1997) 130 F.3d 414
Gordy v. Daily News, (9th Cir. 1996) 95 F.3d 829
Hanson v. Denckla, (1958), 357 U.S. 235
Helicopteros Nacionales de Columbia v. Hall (19 84), 466 U. S. 408
International Shoe Co. v. Washington (1945) 326 U.S. 310
Panavision Intern., L.P. v. Toepen (9th Cir. 1998) 141 F.3d 1316
Pennoyer v. Neff, (1877) 95 U.S. 714
Perkins v. Benguet Mining Consolidated Mining Co., (1952) 342 U.S. 437
Reno v. American Civil Liberties Union, (1997) 521 U.S. 844
World-Wide Volkswagen Corp. v. Woodson,
(1980), 444 U.S. 286
Brown v. Watson (1989), 207 Cal.App.3d 1306
Cornelison v. Chaney(1976), 16 Cal.3d 143
Edmonds v. Superior Court (1994), 24 Cal.App.4th 221
Felix v. Bomoro Kommanditaesellschaft (1987), 196 Cal.App.3d 106
Fisher Governor Co. v. Superior Court (1959), 53 Cal.2d 222
Floveyor Int. Ltd v. Superior Court (1997), 59 Cal.App.4th 789
Goehring v. Superior Court (1998), 62 Cal.App.4th 894
Jewish Defense Organization, Inc. v. Superior Court (1999), 72 Cal.App.4th 1045
KLM v. Superior Court, (1951), 107 Cal.App.2d 495
Sammons Enterprises, Inc. v. Superior Court (1988), 205 Cal.App.3d 1427
Secrest Machine Corp. v. Superior Court (1983), 33 Cal.3d 664
Sibley v. Superior Court (1976), 16 Cal.3d 442
Universal Cijy Studios, Inc. et al. v. Hughes Case No. 300CV721 RNC, (D.Ct)
DVD Copy Control Association, Inc. v. Andrew Bunner Superior Court Case No. CV-786804, Appellate Court Case No. H021153
Universal City Studios et al. v. Reimerdes, et al. Case No. 00Civ.0277
Civ. Code §3426 et seq
Evidence code §350
Evidence code §412
Evidence code §702
Evidence code §800
Evidence code §1520-1523
This petition arises from an order of Respondent Santa Clara County Superior
Court denying Petitioner's Motion to Quash Service of Process. Petitioner,
Matthew Pavlovich, was a student at Purdue University in the State of Indiana
at the time he was sued, has had no contacts with the State of California
sufficient to warrant the exercise of personal jurisdiction by the State,
and is currently being denied his constitutionally protected right of due
process. If this court does not intervene, the lower court's order will have
created, de facto, nearly limitless California jurisdiction over individuals
involved in the rapidly expanding world of the Internet.
PETITION FOR WRIT OF MANDATE
By this verified petition, Petitioner alleges:
1. Related Appeal. Defendant and Appellant Andrew Bunner has filed an appeal in this Court. The appeal seeks review of the lower Court's decision to grant a preliminary injunction against Mr. Bunner and others in this action (DVD Copy Control Association, Inc. v. Andrew Bunner, Superior Court Case No. CV-786804, Appellate Court Case no. H021153).
2. Petitioner, MATTHEW PAVLOVICH (hereafter "PAVLOVICH") is a defendant in the action hereinafter described and is a party beneficially interested herein.
3. Respondent is the Superior Court of Santa Clara County (hereafter "Respondent"); (Superior Court Case No. CV786804).
4. Real party in interest, DVD Copy Control Association Inc. (Hereafter "Real Party" or "DVD CCA") is the plaintiff in the action hereinafter described and is a party beneficially interested in this proceeding.
5. On December 27, 1999, Real Party in Interest, DVD CCA filed in Respondent Court against this Petitioner, as defendant, a complaint numbered CV786804 alleging a single cause of action -- misappropriation of trade secrets (Civ.Code §3426 et seq.). The trade secret misappropriation cause of action is based on the allegation that Petitioner republished information that is alleged to have been misappropriated by a third party and repeatedly republished throughout the Internet. Petitioner is one of some 521 named and Doe defendants who have been sued for allegedly republishing this information on the Internet. Numerous other publishers of the same information have not been sued. Plaintiff and real party in interest is a not-for-profit trade association whose sole purpose is to license the information known as the Content Scrambling System or "CSS". Real party in interest alleges that portions of its CSS Technology were misappropriated by a third party and partially incorporated into a new technology called DeCSS. Real party in interest alleges that after the third party creator of DeCSS posted DeCSS on the Internet, Petitioner and other defendants discovered the information posted on the Internet, and themselves further republished the information on various Internet web sites. A true and correct copy of DVD CCA's complaint is included as "Exhibit A" of the separately bound appendix of exhibits1 filed concurrently herewith, and explicitly made a part hereof.
1 References to the separately bound Appendix of Exhibits, filed concurrently herewith, will be denoted as "APP."
6. Petitioner made no general appearance in Respondent Court. Rather, on June 6, 2000, Petitioner appeared specially in Respondent Court (pursuant to the provisions of §418.10 of the Code of Civil Procedure) by filing a motion to quash service of summons on the grounds that the Respondent Court lacked jurisdiction of the person of the defendant. A true and correct copy of Petitioner's Proof of Service, Notice of Motion, Points and Authorities in Support of Motion, Declaration of Allonn E. Levy in support of Motion, and Declaration of Matthew Pavlovich in Support of Motion to Quash Service of Process is included as "Exhibit B" of the separately bound appendix of exhibits filed concurrently herewith, and explicitly made a part hereof by reference.
7. Following a stipulated jurisdictional deposition and document production, on August 18, 2000, Real Party in Interest filed its opposition papers to Petitioner's motion. A true and correct copy of Real Party in Interest's opposing papers, which include Points and Authorities in Opposition to Motion to Quash Service and the Declaration of Jonathan S. Shapiro in Opposition to Motion to Quash Service, is included as "Exhibit C" of the separately bound appendix of exhibits filed concurrently herewith, and explicitly made a part hereof by reference.
8. On August 22, 2000, Petitioner herein filed his reply papers in response to DVD CCA's opposition. A true and correct copy of Petitioner's Reply Brief in Support of Motion, Reply declaration of Allonn E. Levy in Support of Motion, and Objections to Evidence Submitted by Plaintiff is included as "Exhibit D"of the separately bound appendix of exhibits filed concurrently herewith, and explicitly made a part hereof by reference.
9. A hearing was held by Respondent Court on August 29, 2000 at approximately 9:00 a.m. in Department 2 of the Santa Clara County Superior Court. An order denying Petitioner's motion to quash service of summons for lack of jurisdiction was served by mail on all parties on August 30, 2000. A true and correct copy of the court's order is included as "Exhibit E" of the separately bound appendix of exhibits filed concurrently herewith, and explicitly made a part hereof by reference.
10. A transcript of the proceedings at the hearing of the motion was ordered and a true and correct copy of said transcript is attached hereto as "Exhibit F" of the separately bound appendix of exhibits filed concurrently herewith, and explicitly made a part hereof by reference.
11. Respondent Court has no jurisdiction over the Petitioner in the above described action within the meaning of §418.10 of the Code of Civil Procedure because Petitioner has had almost no contact with the State of California, did not purposefully avail himself of the privileges or protections of California, did not expressly aim any action toward California, did not foresee any effect of an action in California, continues to reside outside the State of California and has not otherwise submitted to the jurisdiction of this court.
12. At the time this action was filed, Petitioner was a full time student at Purdue University in Indiana. Petitioner does not own the web site alleged to have republished DeCSS, did not create the DeCSS code, and did not purposefully or expressly direct activity related to the republication towards California. Petitioner is a former student, Eagle Scout, and IEEE member. Petitioner owns no property in California, does no business in California, does not reside in California, and has no traditional contacts with California. Petitioner has limited financial capabilities and would be severely prejudiced if forced to defend himself in California.
13. This petition for writ of mandate is explicitly authorized by statute as outlined in C.C.P.§418.10(c).
14. Petitioner will suffer irreparable injury and severe prejudice if Respondent Court is not compelled to vacate its order denying Petitioner's motion to quash, and further compelled to enter a new and different order quashing service of process for lack of jurisdiction. Specifically, Petitioner will be forced to defend himself in an action far from his home, to produce witnesses located in distant lands outside of California, to produce documents from outside of California, to find resources to support a foreign defense, all without being afforded the protections of due process, fair play, and substantial justice.
15. Petitioner has no plain, speedy, and adequate remedy in the ordinary course of law to compel Respondent Court to quash the service of summons in that this is the only proceeding authorized by statute to obtain the relief sought.
16. Petitioner's papers and actions, are intended to serve only as a special
appearance pursuant to section 418.10 of the California Code of Civil Procedure.
Petitioner neither consents nor submits to the jurisdiction of this Court,
instead, contesting jurisdiction by way of this petition.
WHEREFORE, Petitioner prays:
1 . That this court issue an alternative writ of mandate directing Respondent Court to make and enter its order quashing the service of summons on this Petitioner or to show cause before this court in a specified time and place why it has not done so;
2. That, on the hearing of this petition and the return to it, if any, this court issue a preemptory writ of mandate directing Respondent Court to so order;
3. For costs of suit herein incurred: and
4. For such other and further relief as the court may deem proper.
DATED: September 11, 2000
HUBER + SAMUELSON APC
ALLONN E. LEVY
Attorneys for Petitioner
I, Allonn E. Levy, am the attorney for Petitioner in the above-entitled proceeding. I have read the foregoing petition for writ of mandate and know the contents thereof. The same is true of my own knowledge.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Date: 9/11 , 2000
Allonn E. Levy
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT
OF PETITION FOR WRIT OF MANDATE
Petitioner MATTHEW PAVLOVICH submits this memorandum in support of his pending petition for writ of mandamus compelling the lower court to quash service of process. If Real Party in Interest's theory of jurisdiction is permitted to stand, the lower Court's order will mark an end to 150 years of traditional jurisdictional analysis and will create California jurisdiction over virtually every Internet user in the world.
1. Question Presented:
Whether Real Party in Interest, DVD CCA satisfied its burden of providing competent evidence to prove sufficient minimum contacts between Petitioner and the state of California to justify the lower Court's exercise of personal jurisdiction over Petitioner, within the confines of Due Process and traditional notions of fair play and substantial justice. And, assuming such contacts exists, whether the exercise of jurisdiction is reasonable.
2. Short Answer:
No. DVD CCA provided insufficient competent evidence to support the lower Court's finding of jurisdiction under California's "effects" test or any other jurisdictional analysis, and any exercise of jurisdiction is unreasonable.
B. Nature Of Action
This is a First Amendment case wherein the plaintiff, DVD CCA, seeks to enjoin Petitioner PAVLOVICH and some 500 other defendants from, republishing a piece of computer code identified as DeCSS. When implemented by a user, DeCSS enables consumers to play lawfully purchased DVDs without the use of a software DVD player licensed by real party DVD CCA. DVD CCA operates solely as the licensor of the Content Scrambling System or "CSS" technology
Plaintiff claims that it is entitled to restrain the defendants right to republish this speech2 by alleging the code itself includes misappropriated trade secrets. DVD CCA speculates that a Norwegian individual named Jon Johansen authored DeCSS by reverse engineering CSS after clicking a software agreement3 prohibiting such reverse-engineering. DVD CCA further alleges that Mr. Johansen then posted the DeCSS code on the Internet, world wide. DVD CCA further alleges that Petitioner herein, and others, subsequently found DeCSS on the Internet and republished it (see Plaintiffs complaint attached as exhibit "A" filed concurrently herewith and hereinafter referred to as "Exhibit A," at APP4. pp.2-21; Complaint at p.13:17-27; p.17:24-28). DVD CCA brought this action to enjoin Petitioner and the remaining 500 defendants from continuing5 to republish the information (Exhibit A at APP.p.20; Complaint at p. 19).
2 The parties have not disputed the fact that the computer code DeCSS is speech for purposes of First Amendment analysis.
3 DVD CCA has provided no evidence that Mr. Johansen entered this agreement, or that he violated such an agreement. Instead, DVD CCA simply avers that such agreements are usually agreed to.
4 "APP" stands for the Appendix to Exhibits filed concurrently herewith. For the Court's convenience, all references to exhibits will include both the APP page number, followed by the original document reference. For example APP pp.2-21; Complaint pp.1-20.
5 As indicated below, Petitioner did not own or operate the LiVid web site that allegedly republished the DeCSS code. The LiVid web site that allegedly contained DeCSS was voluntarily taken down (see Exhibit B, APP.p.67; Declaration of PAVLOVICH at 2:13-27).
1. Situs and Identification of Parties
Real Party in Interest, Plaintiff DVD CCA is a Delaware corporation with offices located in Morgan Hill, California, and is the licensing entity for the technology known as CSS (Exhibit A, at APP.p.4; Complaint at p.3:12-17).
Petitioner, Defendant PAVLOVICH is an out-of-state resident served by U.S. mail while a student in Indiana and currently residing in Texas (See Petitioner's moving papers attached as "exhibit B" to the Appendix of exhibits, hereinafter "exhibit B" at App.pp.66-68; Declaration of PAVLOVICH at pp. 1-3).
2. Summary Of Facts Re Jurisdiction
Petitioner's involvement in this case is limited to his role as an alleged republisher of the DeCSS code while enrolled as a full-time student at the University in Indiana (see Exhibit B, at APP.p.66-68; Declaration of PAVLOVICH 2:1-5; 2:8-27). Plaintiff has alleged that Petitioner PAVLOVICH is responsible for the posting of DeCSS on the "www.livid.on.openprojects. net" web site (see Exhibit A at APP.p.6; Complaint at p.5:13-16), but offered no proof to rebut Petitioner's evidence that he does not own or operate any such site6.
6 See Exhibit B, at APP.p.67; Declaration of PAVLOVICH at 2:17-27.
In reality, PAVLOVICH did not own or operate any site that published DeCSS, however he did concede for purposes of the motion to quash that he had input7 on such a web site (See Exhibit B, at APP.p.67; Declaration of PAVLOVICH at 2:17-27). Since Petitioner had nothing to do with the creation of DeCSS, any liability on the part of PAVLOVICH would stem solely from his discovery of a piece of code (DeCSS) on the Internet, and having input on a web site that allegedly republished that code. Again, Real Party in Interest has offered no proof to refute these facts.
7 The open project which allegedly posted DeCSS was a loose association of people, whom PAVLOVICH does not personally know (exhibit A at pp. 17-18), nor does he know where those individuals are domiciled (exhibit A at pp. 19:19-21), nor who hosts the LiVid list (exhibit A at 21-22). The goal of the LiVid group was to create better support for video playback (exhibit A at 23:10-15), not to harm any party in California.
The LiVid group which allegedly published the DeCSS code was a loose association of volunteers who were involved in Linux open-source projects involving various forms of video playback8. PAVLOVICH testified that the LiVid project was run by volunteers, with no formal organization, and that PAVLOVICH did nothing on the project for long periods of time (Exhibit D at APP.p. 180; Deposition of PAVLOVICH at 52:2-11). DeCSS was not utilized in the LiVid project (Exhibit D at APP.p.182; Deposition of PAVLOVICH at 57:9-13), and PAVLOVICH played no part in the development of DeCSS (Exhibit D at APP.p.181; Deposition of PAVLOVICH at 56:23-25). DVD CCA has provided no evidence to show that either LiVid or PAVLOVICH intentionally directed activities towards the forum state9.
8 (See Petitioner's Reply Papers attached as Exhibit "D" the separately bound Appendix of Exhibits, hereinafter "Exhibit D" at APP.pp 174-175; Deposition of PAVLOVICH at pp.22-23)
9 Real Party did provide two unauthenticated documents that it alleges are attributable to Petitioner (see DVD CCA's opposition papers attached as Exhibit "C" to the separately bound Appendix of Exhibits, hereinafter "Exhibit C," at APP.p. 111-114; Declaration of Shapiro at exhibit C). Petitioner filed objections to this evidence pursuant to Evidence code §§350, 412, 702, 800 and 1520-1523, which are incorporated herein by reference (See Exhibit D at App.pp.157-158; Objections to Evidence at pp. 1-2). Without waiving said objections, Petitioner contends that far from showing any intentional act, the e-mails show Petitioner's disagreement with DVD CCA's contentions (Exhibit C at APP.p. 114; Declaration of Shapiro at exhibit Q. The documents also show that at some point prior to the surfacing of DeCSS on the web (on October 25, 1999 according to DVD CCA; see Exhibit A at App.p. 14; Complaint at 13:17-22), Petitioner quoted someone else's incorrect hearsay statement that "Reverse engineering is illegal" in most places (Exhibit C, at App.p. 112; Declaration of Shapiro at exhibit C). Additionally, the October 1, 1999 e-mail regarding reverse-engineering clearly states it relates to software "drivers" and not to any part of CSS or DeCSS.
Petitioner PAVLOVICH has no connection with California. PAVLOVICH does not reside in California and does not have any regular clients or work in California (Exhibit B, at APP.pp67-68; Declaration of PAVLOVICH at pp.2-3). Furthermore, PAVLOVICH has never: solicited business in California; designated a registered agent for service of process in California; maintained a place of business in California; maintained a telephone listing in California; maintained a bank account in California; or even visited California for any business purpose (Exhibit B, at APP.p.68; Declaration of PAVLOVICH at 3:2-7). The web site DVD CCA is assumed to attribute to PAVLOVICH in their complaint was a "passive" web-site that did not involve the interactive exchange of information with users, did not solicit or engage in business activities, and did not solicit contact with California residents (Exhibit B, at APP.pp.67; Declaration of PAVLOVICH at 2:18-27). Further, Petitioner did not know of DVD CCA's existence, much less its situs in California, prior to the filing of this lawsuit and has never done business with DVD CCA (Exhibit B, at APP.p.68; Declaration of PAVLOVICH at 3:7-9). Petitioner neither directed nor expressly aimed any activity or contact towards California, much less any activity or contact specifically related to the trade secret cause of action that is the subject of this suit (Exhibit B, at APP.pp.66-68; Declaration of PAVLOVICH at pp. 1-3; Exhibit D, at App.pp.168-169,178, 179, 180, 185; Deposition of PAVLOVICH at pp. 11-12, 44:4-12, 48:22-25, 52:2-11, 91:22-25)10.
10 Again, Real Party in Interest provided no competent evidence to challenge any of these facts.
C. Summary Of Argument
Petitioner PAVLOVICH asks this Court to intervene on his behalf, to quash service of process on the grounds that a California Court lacks power to exercise personal jurisdiction over him. Petitioner is not a California resident and is not domiciled in California, has no contacts, no ties, no relationship with California, was not served within California, and has not consented to or appeared in the California action (Pennoyer v. Neff (1877) 95 U.S. 714, 733). Additionally, Petitioner engaged in no "express aiming" of acts towards a California resident involving this lawsuit by DVD CCA (Calder v. Jones(1984) 465 U.S. 783). Therefore, there is no constitutionally sufficient basis for any California Court to assert personal jurisdiction over Petitioner. Accordingly, this Court issue the appropriate writ, quash service of process, and set aside any existing default or default judgment as void11 (C.C.P. §473 (d); C.C.P. §418.10(d)).
11 On or about March 14, 2000, Plaintiff filed a request for entry of Default. As of this writing, the Court's file indicates that despite the fact that plaintiff has served a notice of request of entry of default, no such default was entered by the lower Court. In the event that default or default judgment is entered prior to the hearing on this motion, defendant requests that the default or default judgment be set aside as void for lack of personal jurisdiction.
D. BECAUSE CALIFORNIA LACKS PERSONAL JURISDICTION OVER PETITIONER PAVLOVICH, THIS COURT SHOULD INTERVENE AND ISSUE THE REQUESTED RELIEF
1. Standard of Review
In assessing Petitioners request for relief, This Court must carefully scrutinize the extensive record in the lower Court, to ensure there is no due process violation. Review of the lower Court's order is governed by the following principles:
(1) where a defendant properly moves to quash out of state service of process for lack of jurisdiction, the burden of proof is upon the plaintiff to establish the facts of jurisdiction by a preponderance of the evidence; (2) evidence of those facts or their absence may be in the form of declarations . . . ; (3) where there is a conflict in the declarations, resolution of the conflict by the trial court will not be'disturbed on appeal if the determination of that court is supported by substantial evidence. Substantial evidence is not deemed synonymous with any evidence but rather of ponderable legal significance, . . . reasonable in nature, credible, and of solid value (citations).
Sammons Enterprises Inc. v. Superior Court (1988) 205 Cal.App.3d 1427, 1430.
Where there is no conflict in the evidence, the question of personal jurisdiction is one of law; in such a case, the lower court's determination is not binding on the reviewing court.
Jewish Defense Organization, Inc. v. Superior Court (1999) 72 Cal.App.4th 1045, 1055.
Here, the lower Court made no findings of fact12. Therefore, this Court is entitled to review the matter de novo.
12 See Court's order of August 29, 2000, attached as exhibit "E" to the separately bound Appendix of Exhibit, hereinafter referred to as "Exhibit E" at App.p.225; Order at 1:22-23.
California courts are empowered to exercise personal jurisdiction only to the extent that such an exercise is consistent with the State or Federal Constitution (CCP §410.10). A court may exercise personal jurisdiction over a non-resident defendant only when the defendant has such minimum contacts with the forum state that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice" (Felix v. Bomoro Kommanditgesellschaft (1987) 196 Cal.App.3d 106, 111 [citing International Shoe Co. v. Washington (1945) 326 U.S. 310, 316]; Helicopteros Nacionales de Columbia v. Hall (1984) 466 U.S. 408, 414). Such, minimum contacts are measured on a case-by-case basis and the ultimate test is whether "California has a sufficient relationship with the [particular] defendant and litigation [as] to make it reasonable ("fair play")..." to require the defendant to defend the litigation in California (Weil & Brown, Cal. Prac. Guide: Civ. Pro. Before Trial, (The Rutter Group 1999) §3:202 at 3-41.2)13. Additionally, any default or default judgment entered without jurisdiction over the defendant is necessarily void14.
13 The Due Process clause requires "that the defendant's conduct and connection with the forum State are such that he [or she] should reasonably anticipate being hauled into court there" (World-Wide Volkswagen Corp. v. Woodson, (1980) 444 U.S. 286, 297).
14 Where a defendant attacks jurisdiction post default, the proper mechanism is to file a motion to concurrently vacate default or default judgment and quashing service of process (Floveyor Int. Ltd v. Superior Court (1997) 59 Cal.App.4th 789, 792). It is then the plaintiffs burden both to prove proper service of process and to prove the existence of personal jurisdiction over the defendant (Id at 792-793).
2. The court lacks personal jurisdiction over defendant PAVLOVICH
The personal jurisdiction analysis is broken down into two questions:  does "general" jurisdiction exist; and  absent "general" jurisdiction, does "specific" jurisdiction exist (see Brown v. Watson (1989) 207 Cal.App.3d 1306, 1312). In other words:
If a defendant has sufficient extensive 'contacts' with the forum state, it may be subject to suit there on all claims wherever they arise [i.e., general jurisdiction].... [In] other cases, the jurisdictional sufficiency of the defendant's contacts depends on an assessment of the 'relationship among the defendants, the forum, and the litigation [i.e., specific jurisdiction]'.
Sammons Enterprises, Inc. v. Superior Court (1988) 205 Cal.App.3d 1427, 1432.
In this case, there is insufficient evidence to support a finding of either "general" or "specific" jurisdiction.
a. General Jurisdiction Is Absent In This Case
General jurisdiction depends upon substantial, continuous, and systematic contacts between the defendant and the forum state (Perkins v. Benguet Mining Consolidated Mining Co., (1952) 342 U.S. 437, 447-44815). In this case, Petitioner's contact with California is anything but substantial, continuous, or systematic -- it is essentially non-existent16.
15 In accord, KLM v. Superior Court, (1951) 107 Cal.App.2d 495, 500; Sammons Enterprises, Inc. v. Superior Court, supra, 1434; Secrest Machine Corp. v. Superior Court (1983) 33 Cal.3d 664, 669).
16 Real Party, DVD CCA properly conceded the lack of general jurisdiction by not arguing the issue in its opposition papers (exhibit C at APP.pp.71-87; Opposition at ppl-13) or in oral argument below (See transcript of August 29, 2000 proceedings attached as Exhibit "I"' to the separately bound Appendix of Exhibits, hereinafter referred to as "Exhibit F," at APP.pp.228-247; Transcript at pp. 1-20).
Petitioner is a Texas resident, formerly a resident of Indiana. PAVLOVICH does not have any regular business, clients or employees in California, has never solicited business in California, has never designated a registered agent for service of process in California and has never maintained a place of business in California or even a telephone listing in California. He has never owned property or maintained a bank account in California and has never even been to California for business purposes. (See generally Exhibit B at APP.pp. 66-68; Declaration of PAVLOVICH at pp. 1-3).
In short, Petitioner has not engaged in any activities in California, much less any activities that may be described as substantial, continuous, or systematic. Hence, there is no basis for California to exercise general jurisdiction over Defendant PAVLOVICH. Since California has no real relationship with this Defendant, it is not reasonable to require PAVLOVICH to defend any pending litigation in California.
b. Specific Jurisdiction Is Similarly Absent In This Case
Specific jurisdiction depends upon a showing that the non-resident defendant purposefully established contacts with the forum state, that the plaintiffs cause of action arises out of the defendant's forum-related contacts, and the forum's exercise of personal jurisdiction comports with "fair play and substantial justice" (Burger King v. Rudzewicz (1985) 471 U.S. 462, 472, 476-78; Cornelison v. Chaney, (1976) 16 Cal.3d 143, 148). In other words:
Where a non-resident defendant's activities in the forum are not so pervasive as to justify the exercise of general jurisdiction over him, then jurisdiction depends upon the quality and nature of his activity in the forum in relation to the particular cause of action.... Thus, as the relationship of the defendant with the state seeking to exercise jurisdiction over him grows more tenuous, the scope of jurisdiction also retracts and fairness is assured by limiting the circumstances under which the plaintiff can compel him to appear and defend.
Brown v. Watson (1989) 207 Cal.App.3d 1306, 1312-1313, emphasis added.
Thus, specific jurisdiction is determined under a three-part test: (1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable.
(Jewish Defense Organization Inc. v. Superior Court (1999) 72 Cal.App.4th 1045, 1054, citing Panavision Intern., L.P. v. Toeppen 141 F.3d 1316, 1320 (9th Cir. 1998)).
Here, petitioner has not directed any activity at California from which the cause of action can be said to have arisen. Further, any relationship between Petitioner and the forum state (California) is so tenuous that, in fairness, jurisdiction cannot exist.
(1) PAVLOVICH has had no purposeful contact with California and has not purposefully availed himself of the benefits of the forum state
This case does not involve purposeful contact between Defendant and California, as the term is used in jurisdictional analysis. A "purposeful" contact is one in which a particular defendant has deliberately directed his/her activities at the residents of the forum state or has deliberately availed himself/herself of the benefits and protections of the laws of the forum state (Hanson v. Denckla, (1958) 357 U.S. 235, 253-254; See Also Sibley v. Superior Court, (1976) 16 Cal.3d 442, 447448). Stated in the converse, personal jurisdiction does not extend to a non-resident defendant by virtue of "random, fortuitous or attendant..." contacts over which the defendant had no control (Burger King v. Rudzewicz, (1985) 471 U.S. 462, 475-76, 485). Furthermore, unilateral activity on the part of the plaintiff or others17 over whom the non-resident defendant has no control does not translate into a purposeful contact on the part of the defendant (Helicopteros Nacionales v. Hall, (1984) 466 U.S. 408, 416-417).
17 Thus, any activities on the part of the third parties who created DeCSS, the movie industry, the computer industry, DVD CCA (or anyone other than PAVLOVICH himself), cannot be used to support a finding of jurisdiction over Petitioner (Helicopteros Nac., supra).
In this. case, Petitioner was a full-time student in Indiana during the time period outlined in the complaint, and never transacted business with anyone in California18. Furthermore, PAVLOVICH did not exercise any control over anyone in California and never solicited contacts with California residents through the web site identified in the complaint (Exhibit B, at APP.p.67-68; Declaration of Pavlovich at pp.2-3). Assuming, arguendo, that any California resident contacted the subject web site, such contact would have been simply fortuitous. The web site merely contained information available to any Internet user and did not target or in anyway solicit California residents (Exhibit B, at APP.pp.67; Declaration of Pavlovich at 2:17-27). Additionally, PAVLOVICH cannot have targeted his action at either DVD CCA or California since he was not aware of the existence of DVD CCA (much less their place of business) prior to the filing of this lawsuit19. Accordingly, to the extent that Defendant PAVLOVICH may be involved in the events which are the subject of this lawsuit, his involvement cannot be described as a purposeful contact with California.
18 See generally, Exhibit B, at APP.pp66-68; Declaration of Pavlovich at pp. 1-3).
19 As stated previously; see also Exhibit B, at APP.p.68; Declaration of Pavlovich at 3:7-9.
(a) The Web site in question was merely passive and cannot satisfy the effects tests
Court's have established guidelines in cyberspace cases where the plaintiff attempts to utilize the "effects test" (Calder v. Jones 465 U.S. 783 (1984)) to satisfy the "purposeful availment" requirement of specific jurisdiction:
[T]he likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet. This sliding scale is consistent with well developed personal jurisdiction principles. At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. [Citation.] At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. a passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction. [Citation]
(Jewish Defense Organization v. Superior Court, supra, at 106020)
20 Additionally, if a Web site is interactive (rather than passive), the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site [Citation] (Jewish Defense Organization, supra, at 1060).
Here, any "effects" in California would necessarily have come from the repu lication of the DeCSS information through the Internet web site. A review of the evidence shows that PAVLOVICH has at most21 offered information on a passive web site. Assuming, arguendo, that the information reached California residents such contacts would be simply fortuitus and insufficient to establish specific jurisdiction (Id; and see also Cybersell, Inc. v. Cybersell, Inc (9th Cir. 1997) 130 F.3d 414).
21 For purposes of this motion and Petition only, PAVLOVICH concedes that he had influence over the information contained in a LiVid web site. However, PAVLOVICH is not the "owner" or "opeiator" of such a site.
In Jewish Defense Organization Inc. v. Superior Court, supra, California's Second District Court of Appeals reversed the trial court's denial of a defendant's motion to vacate default judgment and quash service where publication of information through a web site allegedly caused harmful effects in California. In the J.D.O. case, the Defendant actually owned or operated the subject site, had made allegedly defamatory statements (the subject of the lawsuit) on his Web site, used the U.S. mail to contact a California resident, previously resided in California, was aware of the plaintiffs situs in California, and contracted with a California Internet service provider (ISP) to host the Web site in question. Yet, the Appellate Court properly concluded that these contacts were insufficient to support an exercise of jurisdiction.
In the instant case, the forum contacts are even less substantial than those in Jewish Defense Organization. PAVLOVICH has had no contacts with California and is only alleged to have offered information on a passive web site. Thus, this Court should follow the holding in Jewish Defense Organization, and quash service of process based on a lack of purposeful availment.
(2) The Claim does not arise from PAVLOVICH's forum-related activities
DVD CCA has also failed to provide competent evidence to satisfy the second prong of the specific jurisdiction test. Here, DVD CCA's cause of action does not relate to any local activities on the part of Petitioner PAVLOVICH. Personal jurisdiction is restricted to situations where a particular cause of action relates to or "arises out of' the defendant's forum-related activities (Jewish Defense Organization, supra, at 1054 and Perkins v. Benguet Consolidated Mining Co., (1952) 342 U.S. 437, 444-445).
In this case, plaintiff has alleged that defendant PAVLOVICH misappropriated DVD CCA's trade secrets by discovering the DeCSS information on-line (following its world-wide publication by others on the Internet) and then republishing the same previously published trade secrets anew22. There is no allegation that it was a specific publication to a California resident that caused DVD CCA's alleged harm, or that PAVLOVICH intended to harm DVD CCA in California23. Indeed, whether PAVLOVICH's alleged republication happened to reach this particular forum is irrelevant to DVD CCA's claim. Thus, it cannot be said that the plaintiffs claim arises from or relates to PAVLOVICH's contact with this forum.
22 Exhibit A, at APP.p. 15; Complaint at p. 14:13 -17.
23 As indicated previously, Petitioner was not even aware of DVD CCA's existence or of its presence in California at the time of the alleged republication.
Because the cause of action does not arise out of Petitioner's forum-related activities, DVD CCA has been unable to point to any such relevant forum contacts. Instead, Real Party in Interest has provided speculative evidence that PAVLOVICH believed the motion picture industry and the computer industry in general do business in California24. This despite the fact that DVD CCA itself is neither a computer producer nor a movie producer.
24 Notably, the record is devoid of any expert opinion, judicially noticed fact or other admissible piece of evidence demonstrating that these industries are actually based in California, or do a majority of business that is somehow tied to California or attributed to Califomia. These same industries certainly also have a massive presence in New York, Oregon, Washington, Texas, India, and Thailand.
(a) DVD CCA's reading of the "effects" test is contrary to established law and violative of Due Process
In the seminal case of Calder v. Jones 465 U.S. 783 (1984), and its well known "Calder effects test" the Supreme Court found that when an individual engages in "express aiming" and satisfies the "effects test," jurisdiction is available -- the High Court did not hold that where any effect, of any sort, is felt within a state jurisdiction will follow25.
25 See Edmunds v. Superior Court (1994) 24 Cal.App.4th 221, 230, holding that the mere causing of an effect "is not necessarily sufficient to afford a constitutional basis for jurisdiction."
In Calder, the defendant sold 600,000 magazines (more than in any other state) in California, frequently traveled to California, made phone calls to California to obtain the information that went into the article which was the subject of the lawsuit, called the California plaintiffs in California to solicit a comment about the subject article, knew the plaintiffs resided in California, and declined to print a retraction request sent by the California plaintiffs (Id, at 783-786). Thus, the Calder Court had no difficulty in finding that the defendant had purposefully and expressly aimed contacts at California and that the cause of action arose out of those California contacts. The Supreme Court in Calder noted:
petitioners are not charged with mere untargeted negligence. Rather, their intentional, and allegedly tortious, actions were expressly aimed at CaliforniaPetitioner[s] knew [their actions] would have a potentially devastating impact upon respondent [the plaintiff]. And they knew the brunt of that injury would be felt by respondent in the State in which she lives and works and in which the National Enquirer has its largest circulation.
Calder at 789-790.
Similarly in Panavision Inter'l, L.P. v. Toeppen,(9th Cir. 1998) 141 F.3d 1316, the Court found jurisdiction on the basis of the defendant's targeted extortion scheme aimed directly at plaintiff26 Panavision (Id at 1319). The scheme included direct contact with the California business, relating to the subject of the case, and an attempt at obtaining $13,000 in exchange for Panavision's trademarked domain names (Id at 1319).
26 DVD CCA's assertion that the effects test in Panavision was satisfied simply because the heart of the motion picture industry was in California is plainly wrong.
By stark contrast, here, PAVLOVICH was a student in Indiana when this suit was instituted, his newly formed business has nothing to do with this case (see Exhibit D, at APP.pp.168-169; Deposition of PAVLOVICH at pp. 11-12) and has no connection with anyone from California (see Exhibit D, at APP.pp.178,179; Deposition of PAVLOVICH at 44:4-12; 48:22-25). Additionally, PAVLOVICH had no knowledge of plaintiff DVD CCA's existence, much less its location, prior to the filing of the instant lawsuit (see Exhibit D, at APP.p.185; Deposition of PAVLOVICH at 91:22-25). Also, plaintiff has not contested the fact that PAVLOVICH has neither operated, nor had sole control over any "LiVid" web site 27 that may have contained DeCSS (see Exhibit B at APP.pp.66-67; Declaration of PAVLOVICH at 2:15-27). Also not in dispute is the fact that PAVLOVICH did not develop any part of DeCSS (see Exhibit D at APP.p.181; Testimony of PAVLOVICH at 56:23-24) and that DeCSS was not utilized in the LiVid project (Exhibit D at APP.p. 182; Deposition of PAVLOVICH at 57:9-13). It is similarly uncontroverted that "Neither the site, nor the information on the site, was specifically directed at citizens of California" (Exhibit B at APP.p.67; Declaration of PAVILOVICH at 2:23-26) and that no part of the posting came from any known California contact.
27 In fact, PAVLOVICH testified that the LIVID project was run by volunteers, with no formal organization, and that PAVLOVICH was not able to do anything on the project for long periods of time (exhibit a p.52:2-11).
In ascertaining the existence of specific jurisdiction, a Court may only properly consider forum-related activities that relate to the specific cause of action at hand (J.D.O., supra, at 1058, citing Gordy v. Daily News (9th Cir. 1996) 95 F.3d 829, 835, it may not consider contacts that relate to alleged harm by third parties not a party to the particular action.
In the case at bar, Plaintiff is a technology licencing entity (Exhibit C, at APP.p.77; Opposition brief 3:16-18). It is a small and fairly obscure28 organization charged with licensing CSS technology. It is not a movie producer, or a studio, and it is located in Morgan Hill California -- not Hollywood. Thus any general knowledge PAVLOVICH had about a movie industry's presence in California, or a Computer industry presence in California is of no consequence -- to hold otherwise would create California as a permanent legal forum for every single dispute tangentially related to either industry.
28 As indicated previously, PAVLOVICH had never heard of DVD CCA prior to the filing of the subject complaint.
For the "effects test" to be constitutional, both the purposeful directing of activity and the substantial connection to the lawsuit must exist (see Goehring v. Superior Court (1998) 62 Cal.AppAth 894, 908911; Bancroft & Masters Inc. v. Augusta National Inc. (9th Cir.2000) _ f.3d _, 2000 U.S. App. LEXIS 20917, 2000 C.D.O.S 6941, 2000 D.A.R. 9197). In Goehring, the Court denied jurisdiction because the individual's forum contacts were not "substantially" connected to the cause of action. In Bancroft, the Court found jurisdiction because the Defendant knew the identity and location of the Plaintiff when it undertook the intentional acts, aimed at that plaintiff, which gave rise to the lawsuit (see Bancroft generally), thus satisfying the "express aiming" requirement of Calder.
If the Court were to follow the logic put forth by plaintiffs, instead of the law as outlined in Calder, Panavision, Bancroft, and Goehring, the results would be absurd. Holding that mere knowledge of an industry presence in a particular forum provides jurisdiction for any dispute remotely touching on that industry's subject matter would offend Due Process and lead to an obliteration of traditional jurisdictional requirements.
Petitioner is merely a republisher of information found on the Internet. He never knew of the existence of the only adverse party in this case, much less intended his activity to affect a California party. It is well settled that personal jurisdiction does not extend to a non-resident defendant by virtue of "random, fortuitous or attendant..." contacts over which the defendant had no control29 (Burger King, supra, at 485). Similarly, just posting information on a web site without "express aiming" is "like placing a product into the stream of commerce, [its effects] may be felt nationwide or even worldwide -- but, without more, it is not an act purposefully directed toward the forum state30" Cybersell v. Cybersell (9th Cir. 1997) 130 F.3d 414, 418.
29 DVD CCA does not seek to restrain PAVLOVICH'S publication of DeCSS in California, but rather world-wide. There is no allegation that it was a specific publication to a California resident that caused DVD CCA's alleged harm. Indeed, whether PAVLOVICH's alleged republication happened to reach this particular forum is irrelevant to DVD CCA's claim -- their claim is based on the fact that the information was published anywhere. Thus, it cannot be said that the plaintiffs claim arises from or relates to PAVLOVICH's contact with this particular forum.
30 The Cybersell Court also rejected the plaintiffs argument that the Calder effects test should supply jurisdiction (Id at 420).
In short, PAVLOVICH did not interact with the plaintiff (as is the case in Calder, McGee, Panavision, Bancroft, and other "effects" cases), did not direct activities at California, and did not purposefully interact with Californians in conjunction with the instant case. As such, California has no jurisdiction over him.
(3) Exercise of jurisdiction would not be reasonable in this case
Finally, it is unreasonable, and thus constitutionally offensive, to impose personal jurisdiction in this case. In ascertaining reasonableness in applying personal jurisdiction, Courts balance a number of factors including:
The interest of the state in providing a forum for its residents or in regulating the business involved ... ; the relative availability of the evidence and the burden of defense and prosecution in one place rather than another... the ease of access to an alternative forum ... ; the avoidance of multiplicity of suits and conflicting adjudications ... ; and the extent to which the cause of action arose out of defendant's local activities....
Fisher Governor Co. v. Superior Court, (1959) 53 Cal.2d 222, 225-26.
To date, the defense is aware of only one California witness essential to the prosecution and defense of this action, Mr. John Hoy. By contrast, an array of witnesses that could provide information in this case are available from Norway, to Japan, to England, to New York and Connecticut. The fact that two similar cases are currently being prosecuted in Connecticut31 and New York32 makes it clear that this case could be tried in any number of other available forums. Also, since California has adopted the Uniform Trade Secrets Act, the plaintiff has the ability to prosecute the same claim in any number of other jurisdictions. Additionally, there are no overriding policy considerations that compel California to assert jurisdiction over PAVLOVICH, an individual Texas resident and former Indiana student.
31 Universal City Studios, Inc. et al. v. Hughes, case no. 300CV721 RNC, (D.Ct)
32 Universal City Studios et al. v. Reimerdes et al., case no. 00Civ.0277 (LAK), (S.D.N.Y.).
This case has nothing to do with any activities that Defendant performed in California. In point of fact, PAVLOVICH has performed no activities in California, did not solicit or engage in transactions with California, and certainly engaged in no activities with California that gave rise to the pending litigation.
Because PAVLOVICH is domiciled in Texas and employed in Texas at a new fledgling company (see Exhibit B at APP.p.67; Declaration of PAVILOVICH 2:10-12; 2:1-7), and has no contact with, or reason to come to, California (see Exhibit B at APP.pp.67-68; Declaration of PAVILOVICH pp.2-3), it would necessarily be a substantial burden on PAVLOVICH to defend this action in California, to transport witnesses and evidence to California, to hire California trial counsel, to pay for temporary housing in California during the trial and to arrange for housing and transport for necessary witnesses (see Exhibit B at APP.p.68; Declaration of PAVLOVICH 3:10-17).
With the above factors in mind, it is evident that the balance weighs heavily
against jurisdiction in California. Therefore, and in the interests of fair
play and substantial justice, California should not impose jurisdiction on
Individual interaction and discourse on the Internet is, by all accounts in its infancy -- creating new law that transforms the Internet into a liability minefield, with world-wide California jurisdiction, would severely chill the development and growth of this medium. The high Court has noted that the Internet is one of the greatest democratic tools of the 21st century (Reno v. American Civil Liberties Union, (1997) 521 U.S. 844, 851). It is a "unique and wholly new medium of worldwide human communication" which disseminates "content as diverse as human thought" (Id at 883, 884). It would be an unreasonable and fundamentally unconstitutional decision, that would tolerate the finding of jurisdiction based on the tenuous connection of a particular publication on the Internet and the general reputation of a particular forum state33.
33 DVD CCA has argued, without proffering evidence, that because California has a reputation for creating movies and high technology, it has jurisdiction over Petitioner whose conduct allegedly touches on both.
For all of the above reasons, and for those outlined in Petitioner's exhibits, California cannot be permitted to exercise personal jurisdiction over Petitioner PAVLOVICH without depriving Petitioner of his constitutionally protected right to due process of law. It is therefore respectfully requested that this court intervene, grant the relief requested in the petition, and compel the lower court to quash service for lack of jurisdiction.
DATED: September 11, 2000
HUBER + SAMUELSON APC
ALLONN E. LEVY
Attorneys for Defendant
[Proof of Service omitted here.]
Superior Court of Santa Clara County
191 North First Street
San Jose, CA 95113
Christopher J. Cox, Esq
Jared B. Bobrow, Esq.
Weil, Gotshal & Manges, LLP
2882 Sand Hill Road (Respondent Court)
Menlo Park, CA 94025
(Counsel for Real Party in Interest, DVD CCA, Inc.)
Robin D. Gross
Electronic Frontier Foundation
1550 Bryant Street, Suite 725
San Francisco, CA 94103
(Counsel for Defendant, Andrew Bunner)
[Exhibits A-D omitted here.]
[Exhibit E, 1 p.]
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
|DVD Copy Control Association, Inc.,
Andrew Thomas McLaughlin, et al.,
|Case No. CV 786804
ORDER RE: DEFENDANT PAVLOVICH'S
Defendant Matthew Pavlovich's Motion to Quash Service of Summons came on for hearing before the Honorable William J. Elfving on August 29, 2000, at 9:00 a.m. in Department 2. The matter having been submitted, the Court orders as follows:
Defendant's Motion to Quash is DENIED. (See Calder v. Jones (1984) 465 U.S. 783), 104 S.Ct. 1492; Panavision Intern., L.P. v. Toeppen (9th Cir. 1998) 141 F.3d 1316.)
William J. Elfving
Judge of the Superior Court
[Proof of Service omitted here.]
[Exhibit F, 20 pp.]
1 2 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 3 IN AND FOR THE COUNTY OF SANTA CLARA 4 BEFORE THE HONORABLE WILLIAM J. ELFVING, JUDGE 5 DEPARTMENT NO. 2 6 --- 000--- 7 COPY 8 DVD COPY CONTROL, ] ] 9 PLAINTIFF,] NO. CV786804 ] 10 vs. ] ] 11 MCLAUGHLIN, ET AL., ] HEARING ON MOTION ] 12 DEFENDANT.] --------------------------------] 13 14 15 16 17 REPORTER'S TRANSCRIPT OF PROCEEDINGS 18 HELD ON AUGUST 29,2000 19 20 21 22 A P P E A R A N C E S: 23 FOR PLAINTIFF: ROBERT SUGARMAN, ESQ. 24 CHRISTOPHER COX, ESQ. 25 FOR DEFENDANT: ALLONN E. LEVY, ESQ. 26 ROBIN GROSS, ESQ. 27 OFFICIAL COURT REPORTER: PEYTON SCHULER, C.S.R. CERTIFICATE NO. 40000228 28
2 1 2 SAN JOSE, CALIFORNIA AUGUST 29, 2000 3 4 PROCEEDINGS: 5 6 THE COURT: NUMBER 13, DVD COPY CONTROL 7 VERSUS MCLAUGHLIN. 8 MR. COX: GOOD MORNING, YOUR HONOR. 9 CHRISTOPHER COX FOR PLAINTIFF, DVD CCA. 10 MR. SUGARMAN: GOOD MORNING, YOUR HONOR. 11 ROBERT SUGARMAN FOR PLAINTIFF. 12 MR. LEVY: ALLONN LEVY SPECIALLY APPEARING 13 FOR MR. PAVOLICH. ALSO GENERALLY APPEARING FOR 14 MR. BUNNER, BUT MISS GROSS IS HERE, TOO. 15 MS. GROSS: ROBIN GROSS FROM THE FRONTIER 16 FOUNDATION FOR DEFENDANT BUNNER. 17 THE COURT: GOOD MORNING TO EVERYONE. 18 WE HAVE ON CALENDAR A MOTION TO QUASH 19 SERVICE OF PROCESS BY DEFENDANT MATTHEW PAVOLICH. I 20 HAVE READ YOUR PAPERS. I'M PLANNING TO TAKE IT 21 UNDER SUBMISSION, BUT IS THERE ANYTHING ELSE THE 22 MOVING PARTY WOULD LIKE TO ADD? 23 MR. LEVY: BRIEFLY,YOUR HONOR. 24 AS THE COURT IS AWARE,THE STATE'S LONG 25 ARM STATUTE IS BOUNDED AND CONFINED BY DUE PROCESS 26 CONSIDERATIONS IN THE CONSTITUTION. 27 WHERE A COURT DOES NOT HAVE GENERAL 28 JURISDICTION, IT HAS TO LOOK AT SPECIFIC
3 1 JURISDICTION. SPECIFIC JURISDICTION IS SPECIFIC 2 BECAUSE IT IS TIED TO THE SPECIFIC CAUSE OF ACTION 3 THAT THE PLAINTIFF, A PLAINTIFF BRINGS. 4 AS WE NOTE IN OUR PAPERS, A CLOSE READ OF 5 THE CALDER EFFECTS TEST WHICH FALLS UNDER THE 6 SPECIFIC JURISDICTION AS WELL AS OTHER CASES THAT 7 SURROUNDS CALDER DEMONSTRATES THAT WHAT ONE NEEDS TO 8 HAVE IN ORDER TO SATISFY THE EFFECTS TEST IS 9 PURPOSEFUL DIRECTED CONDUCT AT THE PLAINTIFF. 10 IN ADDITION, ONCE -- I SHOULD SAY AFTER 11 OUR FILING OF THE REPLY, THE NINTH CIRCUIT COURT OF 12 APPEALS CAME OUT WITH A DECISION OF BANCROFT AND 13 MASTERS, INC. VERSUS AUGUSTA NATIONAL INCORPORATED. 14 DUE TO SOME TECHNICAL PROBLEMS, I DO NOT HAVE A 15 LEXUS COPY OF THIS, BUT I WILL PROVIDE THE COURT 16 WITH A COPY OF THE OPINION. THE SLIP OPINION IS -- 17 THE DOCKET NUMBER IS 99-15099. 18 I WILL HAND THE COURT A COPY AT THE END OF 19 MY ARGUMENT AND PROVIDE OPPOSING COUNSEL WITH A COPY 20 FOR THEIR CONVENIENCE NOW. 21 I DRAW THE COURT'S ATTENTION TO WORDING IN 22 THE OPINION THAT ESSENTIALLY MIRRORS OUR 23 INTERPRETATION OF THE CALDER EFFECTS TEST. I AGAIN 24 APOLOGIZE, I DO NOT HAVE A DIRECT CITATION IN THE 25 COPY THAT I WILL PROVIDE THE COURT. IT'S NOTATION 26 NUMBER 8. 27 THE COURT INDICATES, QUOTE, WE NOW 28 CONCLUDE THAT SOMETHING MORE -- THAT'S REFERRING TO
4 1 THE CALDER EFFECTS TEST -- IS WHAT THE SUPREME COURT 2 DESCRIBES AS, QUOTE, EXPRESS AIMING, END QUOTE, AT 3 THE FORUM STATE, WITH A CITATION TO CALDER. 4 EXPRESS AIMING IS A CONCEPT THAT IN A 5 JURISDICTIONAL CONTEXT HARDLY DEFINES ITSELF. FROM 6 THE AVAILABLE CASES,WE DEDUCE THAT THE REQUIREMENT 7 IS SATISFIED WHEN THE DEFENDANT IS ALLEGED TO HAVE 8 ENGAGED IN WRONGFUL CONDUCT TARGETED AT A PLAINTIFF 9 WHOM THE DEFENDANT KNOWS TO BE A RESIDENT OF THE 10 FORUM STATE. 11 THAT IS SUBSTANTIALLY WHAT THE DEFENSE HAS 12 ARGUED IN ITS MOVING PAPERS SIMPLY BY READING THE 13 CASE LAW REGARDING THE EFFECTS TEST, BUT IT HAS NOW 14 BEEN HELD AS LAW IN THE NINTH CIRCUIT. 15 THE IMPORTANT,THE MOST IMPORTANT PIECE OF 16 EVIDENCE THAT WE HAVE REGARDING THAT ISSUE IS THE 17 FACT THAT MR. PAVOLICH WAS NOT AWARE OF THE 18 EXISTENCE OF DVD CCA, MUCH LESS ITS LOCATION IN 19 CALIFORNIA. 20 NOW, THERE ARE A SLEW OF FACTUAL ISSUES 21 THAT ARE NOT IN DISPUTE IN THIS CASE. BECAUSE I 22 KNOW THAT THE COURT IS SHORT ON TIME, I WON'T REVIEW 23 ALL OF THEM, BUT I WILL TOUCH ON A FEW OF THEM. 24 FIRST AND FOREMOST, THE FACT THAT 25 MR. PAVOLICH IS NOT THE OWNER OR OPERATOR OF THE 26 LIVID WEB SITE IN QUESTION. THERE IS A CITATION IN 27 PLAINTIFF'S OPPOSITION PAPERS THAT CITES TO, I 28 BELIEVE, PAGES 15 AND 16 OF THE DEPOSITION OF
5 1 MR. PAVOLICH. 2 HOWEVER, A CLOSE READING OF THAT CITATION 3 ITSELF AT PAGE 15, LINES 10 THROUGH 16 SHOWS THAT, 4 IN FACT, THE PLAINTIFF HAS INADVERTENTLY MISREAD 5 THAT PORTION OF THE TRANSCRIPT. MR. PAVOLICH IS, IN 6 FACT, CORRECTING THE QUESTIONER AND STATES THAT THE 7 COMPLAINT IS IN ERROR ON THAT POINT AND THAT HE'S 8 NOT THE OWNER OPERATOR. ADDITIONALLY, THERE IS 9 SUBSTANTIAL OTHER EVIDENCE CITED IN THE PAPERS AND I 10 WON'T REVIEW THAT OR TAKE UP THE COURT'S TIME WITH 11 IT. 12 THE LIVID SITE ITSELF DID NOT SOLICIT 13 CONTACTS WITH CALIFORNIA. THERE'S NO EVIDENCE IN 14 THE RECORD THAT ANYONE FROM CALIFORNIA CONTACTED IT, 15 CERTAINLY NOT THAT IT WAS PURPOSEFULLY DIRECTED AT 16 THE CALIFORNIA PLAINTIFF. 17 MR. PAVOLICH -- THERE'S NO EVIDENCE THAT 18 ANY ACTION THAT WAS DONE BY MR. PAVOLICH HIMSELF 19 MUCH LESS ONE THAT WAS SPECIFICALLY DIRECTED AT 20 CALIFORNIA, HAD AN EFFECT ON THIS PLAINTIFF. THERE 21 ARE ALLEGATIONS, THERE'S ARGUMENT BUT THERE ARE NO 22 FACTS TO SUPPORT THAT. 23 WHAT WE HAVE HERE, YOUR HONOR, IS A 24 TWENTY-TWO YEAR OLD FORMER INDIANA STUDENT, AN EAGLE 25 SCOUT TRIPLE I-E MEMBER AND A VERY INTELLIGENT 26 PROGRAMMER. WE DO NOT HAVE HOOLIGAN, WE DO NOT HAVE 27 SOMEONE WHO HAS PUT HIMSELF OUT AND ATTEMPTED TO 28 HARM PEOPLE IN CALIFORNIA OR ELSEWHERE.
6 1 WE HAVE AN INDIVIDUAL WHO WAS A LEADER OF 2 A LOOSE ASSOCIATION OF VOLUNTEERS, VOLUNTEERS WHOM 3 HE DID NOT EVEN-PERSONALLY KNOW, DIDN'T KNOW WHERE 4 THEY WERE LOCATED, KNEW VERY LITTLE ABOUT THEM. 5 HE AND OTHERS WERE INTERESTED IN LINUX 6 TECHNOLOGY, AND HE WAS -- HE HAD SOME INPUT INTO A 7 LIVID WEB SITE THAT THE PLAINTIFFS ALLEGE SOMEONE 8 PUT INFORMATION THAT THEY WISHED TO RESTRAIN ON. 9 UNDER THE CYBERCELL CASE, UNDER THE ADDITIONAL CASES 10 CITED IN MOVING AND REPLY PAPERS, THAT IS 11 INSUFFICIENT TO NOW EXPECT MR. PAVOLICH TO HAVE TO 12 DEFEND HIMSELF IN THIS FORUM. 13 HE IS A TWENTY-TWO YEAR OLD KID. YES, HE 14 NOW IS EMPLOYED. HE CERTAINLY DOES NOT HAVE THE 15 RESOURCES OR THE ABILITY TO TRANSPORT HIMSELF, HIS 16 EVIDENCE, ALL OF THE WITNESSES AND EVERYTHING THAT'S 17 NECESSARY INTO CALIFORNIA IN ORDER TO DEFEND 18 HIMSELF, AND CAUSING HIM TO DO SO WOULD BE 19 FUNDAMENTALLY UNFAIR. 20 THE FACT THAT HE WAS A WITNESS IN NEW 21 YORK, I WOULD POINT OUT TO THE COURT, WAS LARGELY 22 DUE TO THE FACT THAT THE ELECTRONIC FRONTIER 23 FOUNDATION STEPPED IN AND ASSISTED HIM IN THAT 24 REGARD AND COVERED COSTS, AS THEY HAVE IN MANY 25 ISSUES ON THIS CASE. 26 THE FACT THAT HE HAS COUNSEL SPECIALLY 27 APPEARING FOR HIM TODAY IS LARGELY DUE TO BOTH THE 28 ASSISTANCE OF MY FIRM HUBER SAMUELSON, AND THE
7 1 ASSISTANCE OF OTHER INDIVIDUALS AND IS NOT -- SHOULD 2 NOT BE CONSTRUED AS HIM HAVING ENDLESS MEANS. HE 3 CERTAINLY DOES NOT. 4 AS COUNSEL TODAY, I'M SPECIALLY APPEARING 5 ON HIS BEHALF. I'M NOT MAKING A GENERAL 6 APPEARANCE. I SUSPECT THAT IF HE WERE -- IF 7 JURISDICTION WERE TO BE FOUND, HE MAY WE WILL NOT BE 8 REPRESENTED AS MOST OF THE OTHER FOREIGN DEFENDANTS 9 ARE NOT, AND THE COURT WOULD HAVE THE SAME SITUATION 10 THAT IT'S FINDING WITH THE OTHER DEFENDANTS WHICH IS 11 ESSENTIALLY YOU'RE DEALING WITH A DEFAULT 12 SITUATION. 13 I HAVE MUCH MORE THAN I CAN REVIEW. IF 14 THE COURT IS INTERESTED I CERTAINLY CAN PROVIDE MORE is INFORMATION, BUT I KNOW TIME IS OF THE ESSENCE. 16 SO IN SUM, I SIMPLY ASK AND MR. PAVOLICH 17 ASKS THAT THIS COURT DECLINE THE PLAINTIFF'S 18 INVITATION TO HYPEREXTEND THE LONG ARM STATUTE OF 19 THE STATE IN CONTRADICTION OF THE DUE PROCESS 20 CLAUSE, AND AVOID CREATING A LIABILITY MINE FIELD 21 FOR ANYONE WHO USES OR IS TANGENTIALLY RELATED TO 22 THE INTERNET. 23 THE COURT: THANK YOU, MR.LEVY. 24 COUNSEL FOR THE PLAINTIFF, ANYTHING ELSE 25 YOU'D LIKE TO ADD? 26 MR. SUGARMAN: YES, YOUR HONOR, BRIEFLY. 27 I WOULD START BY OBSERVING THAT THERE'S A 28 REAL IRONY AND INDEED INCONSISTENCY IN THE POSITION
8 1 OF THE DEFENDANTS ON THE MERITS OF THIS LAWSUIT AND 2 ON THE JURISDICTIONAL MOTION. 3 ON THE MERITS OF THE LAWSUIT, IT IS -- 4 THIS IS OPEN SOURCE. THIS IS THE WORLDWIDE WEB. 5 THE FIRST AMENDMENT PROTECTS PEOPLE ALL OVER THE 6 PLACE FROM DOING THINGS LIKE STEALING TRADE SECRETS, 7 BUT WHEN IT COMES TO THE JURISDICTIONAL ARGUMENT, 8 IT'S VERY, VERY MUCH THE TRADITIONAL NOTION THAT 9 JURISDICTIONAL CONSIDERATIONS HAVE ALWAYS TURNED 10 ON. I SUGGEST TO YOUR HONOR, THAT THERE'S A 11 FUNDAMENTAL INCONSISTENCY THERE. 12 I'D ALSO TAKE ISSUE WITH THE PORTRAYAL OF 13 MR. PAVOLICH BY COUNSEL. HE IS MUCH MORE THAN A 14 TWENTY-TWO YEAR OLD FORMER STUDENT, EAGLE SCOUT. HE 15 IS A LEADER IN THE OPEN SOURCE MOVEMENT. WE HAVE 16 ATTACHED TO OUR PAPERS EXCERPTS FROM HIS WEB SITE, 17 AND THE PLAINTIFFS HAVE -- DEFENDANTS HAVE FILED 18 OBJECTIONS TO THAT EVIDENCE. BUT, YOUR HONOR, IT 19 SEEMS TO ME THAT THOSE ARE TAKEN DIRECTLY FROM 20 MR. PAVOLICH'S WEB SITE. 21 MR. PAVOLICH HAS NOT DENIED THAT, AND WHAT 22 THEY SHOW, YOUR HONOR, IS THAT BOTH BEFORE AND AFTER 23 THE POSTING OF THE DECSS IN LATE OCTOBER, 24 MR. PAVOLICH WAS THERE. THE SECOND OF THEM, 25 NOVEMBER 10TH IS HEADED, MORE LEGAL TROUBLE, AND IT 26 TALKS ABOUT MOVING THE MAILING LIST TO A FRIENDLY 27 COUNTRY WHERE LAWYERS LIKE THESE HAVE LIMITFD AND 28 PERHAPS NO ABILITY TO HARASS MAILING LISTS.
9 1 THE SOONER SOMEONE IN A COUNTRY WITH FIRST AMENDMENT 2 RIGHTS SUBMITS THE ENTIRE -- HOW CSS WORKS STUFF TO 3 A MAGAZINE, THE BETTER, SO THIS IS BACK IN 4 NOVEMBER. MR. PAVOLICH WAS RIGHT ON TOP OF THE 5 SITUATION. 6 AS MR. LEVY POINTS OUT, HE NOT ONLY WAS A 7 WITNESS IN THE NEW YORK CASE, BUT HE WAS RETAINED AS 8 AN EXPERT IN THE NEW YORK CASE. SEEMS TO ME THAT 9 THAT EQUATES THAT HE IS MUCH, MUCH MORE THAN SOMEONE 10 WHO SAT IN INDIANA AS A STUDENT, NOW SITS IN TEXAS 11 AS A STUDENT. HE'S UP TO HIS EYE BALLS, YOUR HONOR 12 SO TO SPEAK, IN THIS CASE. 13 SOMETHING MORE, GOING BACK FOR A SECOND TO 14 THE BANCROFT AND MASTERS CASE COUNSEL HAS BROUGHT TO 15 THE COURT'S ATTENTION. IN THAT CASE, THE NINTH 16 CIRCUIT REITERATED THE STANDARDS THAT HAVE BEEN -- 17 HAVE GUIDED THE COURTS. 18 THAT CASE HELD THAT THE REQUIREMENT WAS 19 SATISFIED WHEN THE DEFENDANT WAS ALLEGED TO HAVE 20 ENGAGED IN WRONGFUL CONDUCT TARGETED AT THE 21 PLAINTIFF. BUT IF YOU GO BACK TO PANAVISION, YOUR 22 HONOR, THE CASE ON WHICH WE PRINCIPALLY RELY, IN 23 PANAVISION, THE DEFENDANT WAS AWARE OF THE MOTION 24 PICTURE BUSINESS BEING HEADQUARTERED IN CALIFORNIA, 25 AND THE COURT REFERRED TO THAT AS WELL AS ANY 26 KNOWLEDGE. 27 INDEED, THERE WASN'T ANY CASE THAT THE 28 DEFENDANT IN THAT CASE HAD KNOWLEDGE THAT PANAVISION
10 1 WAS HEADQUARTERED IN CALIFORNIA. THE ONLY THING 2 THAT IS INDICATED THERE IS THAT IT WAS A DELAWARE 3 CORPORATION, BUT THE COURT DID GO OUT OF ITS WAY TO 4 SAY THAT THAT CONDUCT WAS TARGETED AT THE MOTION 5 PICTURE INDUSTRY AS WAS THE CONDUCT IN THIS CASE. 6 I'D ALSO POINT OUT THAT THE JEWISH DEFENSE 7 ORGANIZATION CASE ON WHICH THE DEFENDANT RELIES IS 8 REALLY INAPPOSITE. BECAUSE IN THAT CASE, THE COURT 9 WENT OFF ON THE FACT THAT THE PLAINTIFF WASN'T EVEN 10 A CALIFORNIA RESIDENT AND COULD NOT ESTABLISH THAT 11 THE ALLEGED DEFAMATION HAD ANY EFFECT IN 12 CALIFORNIA. 13 HERE, WE HAVE ESTABLISHED SIGNIFICANTLY 14 THAT THE EFFECT IS DIRECTLY AT THE MOTION PICTURE 15 INDUSTRY IN CALIFORNIA, THE SOFTWARE INDUSTRY IN 16 CALIFORNIA, THE COMPUTER INDUSTRY IN CALIFORNIA, 17 MUCH OF WHICH IS NOT ONLY IN CALIFORNIA, BUT RIGHT 18 HERE IN THIS COUNTY. 19 AS YOU MAY WELL KNOW, YOUR HONOR, ON 20 AUGUST 17TH, JUDGE KAPLAN DECIDED THE NEW YORK 21 CASE. ONE OF THE ARGUMENTS THAT THE DEFENDANT HERE 22 MAKES IS THAT THERE'S NO EFFECT IN CALIFORNIA 23 BECAUSE THERE'S BEEN NO DEMONSTRATION THAT ANY 24 PIRACY INFRINGEMENT HAS TAKEN PLACE IN CALIFORNIA. 25 THAT ARGUMENT WAS MADE TO JUDGE KAPLAN IN THE 26 SOUTHERN DISTRICT CASE AND HE REJECTED IT. 27 HE REFERRED TO AT LEAST ONE WEB SITE WHICH 28 CONTAINED A LIST OF SIX HUNDRED FIFTY MOTION
11 1 PICTURES, SAID TO HAVE BEEN DECRYPTED AND COMPRESSED 2 WITH DIVEX, THAT PURPORTEDLY ARE AVAILABLE FOR SALE, 3 TRADE OR FREE DOWNLOAD. 4 HE CONCLUDED-- AND I QUOTE FROM THE CITE 5 TO THE -- THE WEST LAW CITE TO THAT OPINION IS 2000 6 WEST LAW, 116068, AT PAGE 9 OF THAT OPINION, JUDGE 7 KAPLAN SAYS, QUOTE, WHILE NOT EVERYONE WITH INTERNET 8 ACCESS NOW WILL FIND IT CONVENIENT TO SEND OR 9 RECEIVE DIVEX COPIES OF PIRATED MOTION PICTURES OVER 10 THE INTERNET, THE AVAILABILITY OF HIGH SPEED NETWORK 11 CONNECTIONS AND MANY BUSINESSES AND INSTITUTIONS AND 12 THEIR GROWING AVAILABILITY IN HOMES MAKE INTERNET 13 AND OTHER NETWORK TRAFFICKING PIRATED COPIES A 14 GROWING THREAT. 15 YOUR HONOR,THAT IS THE ARGUMENT THAT 16 THERE'S NO PIRACY. 17 JUST A MINUTE ON THE BURDEN, YOUR HONOR. 18 THERE'S NOTHING IN MR. PAVOLICHIS DECLARATION THAT 19 SAYS ANYTHING OTHER THAN CONCLUSORILY, IT WILL BE A 20 BURDEN. THERE IS NOTHING IN THERE THAT SAYS HE 21 LACKS THE RESOURCES, THERE'S NOTHING SAYING HE CAN'T 22 GET COUNSEL. 23 THE ELECTRONIC FREEDOM FOUNDATION IS HERE 24 IN THIS COURTROOM. THEY WERE IN THE COURTROOM IN 25 NEW YORK. AND ONE WOULD SUSPECT THAT MR. PAVOLICH 26 WILL HAVE COUNSEL. HE DOESN'T SAY HE WON'T. 27 I SUGGEST TO YOUR HONOR, THAT THERE IS 28 REALLY NO BASIS FOR HIM TO ARGUE THAT HE WILL BE
12 1 ANY MORE SUBSTANTIALLY BURDENED IN COMING TO THIS 2 COURT. ONCE HIS DEPOSITION WAS TAKEN, IT WAS TAKEN 3 IN TEXAS. IF HIS DEPOSITION HAS TO BE TAKEN AGAIN, 4 IT CAN BE TAKEN IN TEXAS. THE ONLY THING HE MAY 5 HAVE TO DO IF -- WHEN THIS CASE IS TRIED IS APPEAR 6 IF HE DESIRES TO DO SO AND IN LIGHT OF HIS 7 APPEARANCE IN NEW YORK, IT WOULD BE LIKELY THAT HE 8 WILL DO SO WHETHER HE'S A DEFENDANT OR NOT. 9 THE OTHER FACTOR IN THE SEVEN FACTOR TEST 10 THAT I WILL MENTION IS THE SIGNIFICANT INTEREST IN 11 THIS STATE IN ADJUDICATING THIS CASE BASED ON THE 12 SIGNIFICANT INTERESTS THAT ARE BEING ANNEXED. 13 I WILL CLOSE, YOUR HONOR, WITH ONE -- 14 JUDGE KAPLAN'S FINAL COMMENTS IN HIS OPINION. I 15 SUBMIT IT'S QUITE RELEVANT TO WHETHER IT'S EQUITABLE 16 THAT MR. PAVOLICH BE REQUIRED TO ANSWER HERE. 17 JUDGE KAPLAN SAID, QUOTE, IN SHORT, THIS 18 COURT, LIKE OTHERS THAT HAVE FACED THIS ISSUE, IS 19 NOT PERSUADED THAT MODERN TECHNOLOGY HAS WITHERED 20 THE STRONG RIGHT ARM OF EQUITY. INDEED, THE 21 LIKELIHOOD IS THAT THIS DECISION WILL SERVE NOTICE 22 ON OTHERS THAT THE, QUOTE, STRONG RIGHT ARM OF 23 EQUITY, CLOSE QUOTE, MAY BE BROUGHT TO BEAR AGAINST 24 THEM ABSENT A CHANGE IN THEIR CONDUCT AND THUS 25 CONTRIBUTE TO A CLIMATE OF RESPECT TO INTELLECTUAL 26 PROPERTIES. READY ACCESS TO UNTOLD QUANTITIES OF 27 INFORMATION HAS BLURRED IN SOME MINDS THE FACT THAT 28 TAKING WHAT IS NOT YOURS AND NOT FREELY OFFERED TO
13 1 YOU IS STEALING. 2 THE DEFENDANTS, YOUR HONOR, IF THE 3 DEFENDANTS WISH TO AVAIL THEMSELVES OF MODERN 4 TECHNOLOGY TO TAKE WHAT WE CLAIM IS NOT THEIRS, THEY 5 SHOULD BE REQUIRED TO ANSWER IN THIS COURT IN THIS 6 STATE WHERE THAT TAKING HAS HAD THE GREATEST EFFECT. 7 THE COURT: THANK YOU, MR. SUGARMAN. 8 MR. LEVY OR MISS GROSS, ANYTHING ELSE YOU 9 WISH TO ADD? 10 MR. LEVY: YOUR HONOR, I HAVE SOME 11 COMMENTS BRIEFLY, BUT I THINK MISS GROSS HAS 12 SOMETHING. 13 MS. GROSS: JUST LIKE TO STATE MR. BUNNER 14 DOES NOT OBJECT TO MR. PAVOLICHIS MOTION TO QUASH 15 FOR LACK OF JURISDICTION. IN FACT, WE SUPPORT 16 MR. PAVOLICHIS MOTION. 17 WE FEEL IT'S FUNDAMENTALLY UNFAIR TO 18 REQUIRE COUNSEL-LESS INDIVIDUALS ALL OVER THE WORLD 19 TO BE FORCED TO SHOW UP AND DEFEND THEMSELVES IN THE 20 CALIFORNIA COURT. 21 ALSO I'D LIKE TO, IF I COULD, ENTER INTO 22 EVIDENCE WHAT IS MARKED AS EXHIBIT A HERE.IT WAS 23 GIVEN TO US MARKED CONFIDENTIAL. WHAT THIS IS IS A 24 LIST OF DVD CCA LICENSEES WE OBTAINED THROUGH 25 DISCOVERY. WE'RE JUST WANTING TO ENTER THIS IN 26 BECAUSE IN SOME OF THE PLEADINGS, WE HAVE SEEN THERE 27 ARE FOUR HUNDRED LICENSEES, AND BASED ON OUR READING 28 OF THIS MATERIAL, THERE IS JUST OVER THREE HUNDRED AND
14 1 EIGHTY-FIVE PERCENT OF WHICH ARE OUTSIDE OF 2 CALIFORNIA. SO WE WERE WANTING TO ADMIT THIS INTO 3 EVIDENCE. 4 THE COURT: LET ME ASK PLAINTIFF'S 5 COUNSEL, DO YOU HAVE ANY OBJECTION IF THE COURT 6 CONSIDERS THIS EXHIBIT? 7 MR. SUGARMAN: YOUR HONOR, I'M AT A LOSS 8 TO UNDERSTAND WHAT RELEVANCE THIS DOCUMENT HAS TO 9 THIS MOTION. THEREFORE, UNLESS I CAN UNDERSTAND 10 THAT, I DO OBJECT TO IT. 11 THE COURT: ANYTHING ELSE BEFORE I RULE ON 12 THAT REQUEST FOR ADMITTING THAT DOCUMENT? 13 MR. LEVY: I WOULD SIMPLY ADD THAT I THINK 14 IT IS RELEVANT TO THE EXTENT THAT THE PLAINTIFFS ARE 15 ARGUING THAT THERE'S AN EFFECT ON THE LICENSEES. 16 MR. PAVOLICH'S POSITION IS THAT ANY EFFECT TO THE 17 LICENSEES IS NOT AN APPROPRIATE STANDARD UPON WHICH 18 TO BASE JURISDICTION. 19 THAT ON THE OFF CHANCE THE COURT 20 DISAGREES, THIS INFORMATION WOULD BE HELPFUL TO SHOW 21 THE COURT, AS MISS GROSS INDICATED, THAT SOMEWHERE 22 AROUND EIGHTY-FIVE PERCENT OF THE LICENSEES ARE NOT 23 BASED IN CALIFORNIA THEREFORE THEY COULD NOT HAVE 24 EFFECT IN CALIFORNIA. 25 I SHOULD ALSO POINT OUT MISS GROSS HAS 26 REDACTED THE TELEPHONE NUMBER AND STREET ADDRESS ON 27 THE INFORMATION JUST IN CASE THERE'S ANY PRIVACY 28 ISSUE.
15 1 MR. SUGARMAN: YOUR HONOR, THE ONLY THING 2 ELSE I'D ADD IS TO THE EXTENT THIS WOULD BE OFFERED, 3 IT OUGHT TO HAVE BEEN OFFERED IN THE REPLY PAPERS 4 AND NOT TODAY. 5 THE COURT: I'M GOING TO DENY THE REQUEST 6 TO CONSIDER THAT. I THINK THE FUNDAMENTAL FAIRNESS 7 ISSUE TO OPPOSING COUNSEL IS THAT THEY BE GIVEN AN 8 OPPORTUNITY TO SEE THAT IN THE WRITTEN PAPERS FILED 9 ON A TIMELY BASIS. I'M NOT SURE IT'S RELEVANT 10 EITHER. 11 I THINK I CAN CONSIDER ALL THE ISSUES 12 RELATED TO THIS MOVING PARTY WITHOUT TAKING THAT 13 ADDITIONAL EVIDENCE AT THE ELEVENTH HOUR. 14 ANY OTHER COMMENTS BEFORE I TAKE IT UNDER 15 SUBMISSION? 16 MR. LEVY: BRIEFLY, YOUR HONOR -- AND I DO 17 APOLOGIZE FOR NOT BRINGING IT TO THE COURT'S 18 ATTENTION AHEAD OF TIME, I DID NOT REVIEW IT IN 19 TIME. I CONCUR WITH THE COURT THAT JURISDICTION 20 OUGHT NOT BE BASED ON THAT ANALYSIS IN ANY CASE. 21 I'D LIKE TO TOUCH ON MR. SUGARMAN IS 22 COMMENTS REGARDING APACHE, TO DISCUSS A LITTLE BIT 23 ABOUT APACHE. THE WEB SITE OPERATES ON AN OPEN 24 SOURCE PROGRAM APACHE. IT'S ONE OF THE VERY MANY 25 WEB SITES THAT DOES THAT. INDEED, A RECENT POLL 26 INDICATES THAT THE LINUX BASED WEB OPERATIONS MIRROR 27 THAT OF MICROSOFT. THAT IS SUBSTANTIAL; IT'S ALMOST 28 THIRTY PERCENT.
16 1 THE IDEAS TOUCHED ON IN THE OPPOSITION AND 2 ALSO DISCUSSED A LITTLE BIT HERE THAT OPEN SOURCE IS 3 SOME TYPE OF ILLEGITIMATE THEFT OR IDEA OF STEALING 4 COPYRIGHTS OR NOT PROVIDING CONTRIBUTION IS SIMPLY 5 FALSE. IF THAT WERE THE CASE, COMPANIES LIKE IBM, 6 RED HAT, CORRELL, LINUX, SUN MICRO, S G I, ANY 7 NUMBER OF COMPANIES THAT ARE VERY ACTIVELY INVOLVED 8 IN OPEN SOURCE AND INDEED MOVING TOWARDS OPEN SOURCE 9 WOULD NOT BE DOING WHAT THEY'RE DOING. 10 SECONDLY, THE IDEA THAT MOST OF THIS CASE 11 INVOLVES US SOMEHOW, US TO MEAN BOTH MR. BUNNER AND 12 PAVOLICH, TO SUGGEST THAT THE FIRST AMENDMENT 13 SOMEHOW PROTECTS THEFT, THAT'S NEVER BEEN OUR 14 POSITION. I DON'T BELIEVE THAT YOU WOULD FIND 15 ELECTRONIC FRONTIER FOUNDATION OR MY FIRM HERE IF 16 THAT WERE OUR STATED POSITION. 17 BUT I WANT TO DECLINE THE PLAINTIFF'S 18 INVITATION TO GO DOWN THAT ROAD. WE'RE NOT HERE TO 19 DISCUSS THE MERITS. WE CAN'T DISCUSS THE MERITS. 20 THE ONLY THING WE CAN LOOK AT ARE CONTACTS BY 21 MR. PAVOLICH IN THE FORUM STATE. 22 REGARDING MR. PAVOLICHIS CONTACTS WITH NEW 23 YORK, AGAIN, THOSE ARE A DIFFERENT -- THAT'S A 24 DIFFERENT FORUM. THIS ISN'T CALIFORNIA WE'RE 25 TALKING ABOUT. 26 AS A FACTUAL ISSUE, MR. PAVOLICH WAS NOT A 27 RETAINED EXPERT. HE WAS NEVER PAID ANYTHING ASIDE 28 FROM HIS FARE TO NEW YORK. I'M INFORMED BY MISS
17 1 GROSS HE SPENT THE NIGHT ON THE COUCH, SO HE 2 CERTAINLY DOES NOT HAVE THE MEANS TO TRAVEL AROUND 3 THE COUNTRY. 4 IN TERMS OF EVIDENCE, I DRAW THE COURT'S 5 ATTENTION TO THE DECLARATION OF MR. PAVOLICH, 6 CERTAINLY AS EVIDENCE REGARDING BURDEN THAT'S 7 PROPERLY BEFORE THIS COURT. 8 REGARDING PANAVISION, WE'RE VERY 9 COMFORTABLE WITH THE PANAVISION CASE AND INDEED RELY 10 ON IT OURSELVES. THE REASON IS IN PANAVISION THERE 11 WERE THREE VERY DISTINCT DIFFERENCES FROM THIS 12 CASE. 13 FIRST, THERE, THE PLAINTIFF WAS THE MOTION 14 PICTURE STUDIO, HERE THE PLAINTIFF IS NOT. 15 THEREFORE, ANY KNOWLEDGE ABOUT THE EXISTENCE OF THE 16 MOTION PICTURE INDUSTRY BEING IN CALIFORNIA IS 17 CERTAINLY MORE RELATED TO PANAVISION THAN IT IS 18 HERE. 19 BUT IT'S FAR MORE IMPORTANT THAN THAT. IN 20 PANAVISION, THE PLAINTIFFS SENT A LETTER TO -- THE 21 DEFENDANT SENT A LETTER TO THE PLAINTIFF. THAT 22 LETTER WAS DIRECTLY RELATED TO THE CASE, AND INDEED 23 IT ATTEMPTED TO EXTORT, I BELIEVE, THIRTEEN THOUSAND 24 DOLLARS. THAT, YOUR HONOR, IS A DIRECT CONTACT AND 25 IT'S A VALID EXERCISE OF JURISDICTION BASED ON THAT 26 CONTACT. THAT IS EVIDENCE WE DON'T HAVE HERE. 27 IN TERMS OF J. D. 0., I THINK IT'S SPEAKS 28 FOR ITSELF. SIMPLY DRAW THE COURT'S ATTENTION TO
18 1 IT. I THINK READING THE CASE WILL SHOW HOW IT IS 2 LINKED. 3 REGARDING JUDGE KAPLAN'S RULINGS. 4 CERTAINLY, I DISAGREE WITH THE HONORABLE JUDGE, AS 5 LAWYERS ARE ENTITLED TO DO. BUT HIS HOLDING IN THAT 6 CASE RELATES TO A COMPLETELY DIFFERENT STATUTE. 7 IT'S THE DIGITAL MILLENNIUM COPYRIGHTS ACT. 8 I WILL MOVE ON, NOTING THAT THE COURT IN 9 ITS FINDINGS FOUND THAT WHAT WAS LOCATED ON THAT 10 SITE WAS MOVE ADVICE RELATED TO DIVEX, WHICH IS A 11 SEPARATE PROGRAM. IT IS NOT DECSS. 12 THE BURDEN THAT I'D LIKE TO TALK ABOUT IS 13 THE BURDEN THAT'S ON THE PLAINTIFF TODAY. WE COULD 14 MAKE THIS MOTION, UNLIKE MOST MOTIONS, WITHOUT 15 PROVIDING ANY EVIDENCE. BUT INSTEAD, MR. PAVOLICH 16 HAS PROVIDED EXTENSIVE EVIDENCE, INDEED MORE 17 EVIDENCE THAN THE DEFENSE HAS PROVIDED. 18 AT THE END OF THE DAY, IT'S THEIR BURDEN 19 TO PROVE THAT THESE CONTACTS EXIST AND THEY HAVE 20 FALLEN WOEFULLY SHORT ON THAT BURDEN. 21 THANK YOU. 22 THE COURT: THANK YOU. 23 MR. SUGARMAN: ONE MORE COMMENT BASED ON 24 THE LAST REMARK ABOUT JUDGE KAPLAN'S DECISION WHICH 25 WAS BASED ON THE DIVEX TECHNOLOGY. DIVEX IS A 26 COMPRESSION TECHNOLOGY. YOU DON'T GET THE DIVEX 27 UNLESS YOU HAVE DECSS TO HACK INTO THE ENCRYPTION. 28 THE COURT: THANK YOU, COUNSEL.
19 19 1 I WILL TAKE THE MATTER UNDER SUBMISSION. 2 MR. LEVY: YOUR HONOR, IF I MAY ON THE 3 DIVEX POINT BRIEFLY, OBVIOUSLY THERE'S A FACTUAL 4 DISPUTE ON THAT. DIVEX IS A SEPARATE PROGRAM. IT 5 WAS AROUND PRIOR TO DECSS. IT'S NOT RELATED TO IT. 6 THANK YOU. I WILL PROVIDE THE COURT WITH 7 THE BANCROFT CASE. 8 THE COURT: ALL RIGHT. 9 MR. SUGARMAN: THANK YOU, YOUR HONOR. 10 MR. LEVY: THANK YOU, YOUR HONOR. 11 ---OoO--- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
20 1 2 3 STATE OF CALIFORNIA 4 SS. 5 COUNTY OF SANTA CLARA 6 7 8 I, PEYTON SCHULER, DO HEREBY CERTIFY THAT 9 THE FOREGOING IS A FULL, TRUE AND CORRECT TRANSCRIPT 10 OF THE PROCEEDINGS HAD IN THE WITHIN-ENTITLED ACTION 11 HELD ON AUGUST 29, 2000. 12 THAT, I REPORTED THE SAME IN STENOTYPE 13 BEING THE QUALIFIED AND ACTING OFFICIAL COURT 14 REPORTER OF THE SUPERIOR COURT OF THE STATE OF 15 CALIFORNIA, IN AND FOR THE COUNTY OF SANTA CLARA, 16 APPOINTED TO SAID COURT, AND THEREAFTER HAD THE SAME 17 TRANSCRIBED INTO TYPEWRITING AS HEREIN APPEARS. 18 DATED THIS 30TH DAY OF AUGUST, 2000. 19 20 21 PEYTON SCHULER, C.S.R. 22 CERTIFICATE NO. 4034 23 24 25 26 27 28
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