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UMG Recordings, Inc. v. Kurbanov

United States District Court, E.D. Virginia, Alexandria Division

January 22, 2019

UMG RECORDINGS, INC., et al., Plaintiffs,
TOFIG KURBANOV, et al., Defendants.



         THIS MATTER comes before the Court on Defendant Tofig Kurbanov's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b) (2), or, alternatively, to transfer the case to the Central District of California.

         Plaintiffs are twelve record companies that produce, distribute, and license the majority of commercial sound recordings in the United States. All of them are Delaware companies, with eight having their principal place of business in New York, three in California, and one in Florida.

         Defendant is a Russian national living and working in the Russian Federation. Defendant owns and operates two websites, (FLVTO) and (2conv) (collectively the "Websites"). The Websites are devoted to "stream ripping" which is a process by which users may "rip" a file from a streaming platform and convert it to a downloadable file format, such as an mp3. Terrica Carrington, "Stream-Ripping" A Growing Threat to the Music Industry, Copyright Alliance (Nov. 10, 2016), A large portion of the files ripped using the Websites come from YouTube videos and are frequently music videos, however, the Websites are able to stream rip from a wide variety of sources. Neither Plaintiffs nor YouTube authorize or condone the ripping of files from YouTube videos. The Websites are visited very frequently by users around the world. The Websites are available in twenty-three different languages and are most used in Brazil, Italy, and Mexico. FLVTO received over 263 million visits between October 2017 and September 2018 making it the 322nd most visited website in the world. 2conv also receives millions of visits each month. A significant portion of this traffic comes from the United States and Virginia more specifically. Approximately 26.3 million of FLVTO's visitors last year, or 9.92%, come from the United States. Nearly 500, 000 of FLVTO's visitors came from Virginia. 2conv had similar percentages of its users from the United States and Virginia respectively.

         The Websites are free to users and users do not have to register to use the Websites' capabilities. Users do have to agree to certain terms of use, but Defendant does not track or maintain a relationship with individual users beyond this agreement.

         Defendant earns revenue from the Websites only through advertisements posted on then. Some of the advertisements placed on the Websites have geo-targeting capabilities, which means that the advertisements can be targeted to users based on their location. A similar function is available for interest-based targeting of advertisements on the Websites. Defendant sells the advertising placements to an advertising broker who then resells them to actual advertisers. Defendant deals directly with a broker in the Ukraine and does not deal with anyone in the United States or Virginia with regard to the sale or placement of advertisements. Defendant does not advertise the Websites in any way in the United States or elsewhere.

         Defendant has the Websites' domain names registered with, a United States based domain-name registrar. Defendant also has top-level domains for the Websites administered by VeriSign, Inc. (2conv) and Neustar, Inc. (FLVTO) both of which are headquartered in Northern Virginia. As of July 2018, the Websites were, and have since been, hosted by Hetzner Online Gmbh, a German based organization without servers in the United States. For nearly three years prior to July 2018, the Websites were hosted by Amazon Web Services which has servers physically located in Ashburn, Virginia.

         Defendant operates the Websites entirely from Russia. Defendant has not directly done business in the United States or Virginia, nor does he have an agent in either forum. Defendant has no bank account in the United States, nor has he paid taxes here.

         Plaintiffs allege that the Websites are a vehicle for music piracy and copyright infringement. Plaintiffs filed this lawsuit as an action for copyright infringement under the Copyright Act of the United States, 17 U.S.C. §§ 101 et seq., on August 3, 2018. Defendant moves to dismiss the Complaint for lack of personal jurisdiction, or, alternatively, to have the case transferred to the Central District of California.

         A motion to dismiss tests the sufficiency of the complaint. See Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). On a Rule 12(b)(2) motion, a defendant must affirmatively challenge personal jurisdiction and the plaintiff bears the burden of demonstrating the existence of personal jurisdiction at every stage following the defendant's challenge. Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016). A plaintiff must establish personal jurisdiction by a preponderance of the evidence but need only make a prima facie showing. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). This prima facie standard is "tolerant." See id., at 676-77. Further, a court "must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff's favor." Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993) (citing Combs, 886 F.2d at 676). A court may look beyond the complaint to affidavits and exhibits in order to assure itself of jurisdiction. Grayson, 816 F.3d at 269.

         The Defendant challenges this Court's personal jurisdiction over him. Plaintiffs state that there is personal jurisdiction over Defendant under either Federal Rule of Civil Procedure 4(k) (1) or 4(k) (2) .

         The Court must evaluate whether it has personal jurisdiction over Defendant by looking at whether he is "subject to the jurisdiction of a court of general jurisdiction in the state" where the Court is located, i.e. in Virginia. Fed.R.Civ.P. 4(k)(1)(A). This is done by considering the two prongs of whether Virginia's long-arm statute provides jurisdiction and whether the jurisdiction comports with due process. CFA Inst, v. Inst, of Chartered Fin. Analysts of India, 551 F.3d 285, 293 (4th Cir. 2009). Numerous state and federal courts have construed Virginia's long-arm statute to extend personal jurisdiction over nonresident defendants to the full extent permitted by the Due Process Clause of the Fourteenth Amendment. Va. Code Ann. § 8.01-328.1; CFA Inst., 551 F.3d at 293; English & Smith v. Metzger, 901 F.2d 36, 38 (4th Cir. 1990); Peninsula Cruise, Inc. v. New River Yacht Sales, Inc., 512 S.E.2d 560, 562 (Va. 1999). Where the long-arm statute's authorization is coterminous with the full limits of due process, the two inquiries merge and the court may consider solely whether due process is satisfied. Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009); CFA Inst., 551 F.3d at 293. A court conducts the same due process analysis under Rule 4(k)(2), only the analysis is applied to all fifty states, as opposed to the single forum state. See Base Metal Trading v. Ojsc Novokuznetsky Aluminum Factory, 283 F.3d 208, 215 (4th Cir. 2002) .

         Personal jurisdiction was historically limited by the physical presence of a defendant in the territorial jurisdiction of the court. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Pennoyer v. Neff, 95 U.S. 714, 733 (1877). Over time the Supreme Court recognized, however, that due process only requires that a defendant have certain "minimum contacts" within the territory such that a suit would not offend "traditional notions of fair play and substantial justice." Int'1 Shoe Co., 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). While there has been some relaxation in the standards of personal jurisdiction, the Supreme Court has noted that it would be "a mistake to assume that this trend heralds the eventual demise of all restrictions on . . . personal jurisdiction." Hanson v. Denckla, 357 U.S. 235, 250-51 (1958).

         Personal jurisdiction comes in two flavors: (1) general jurisdiction and (2) specific jurisdiction. General jurisdiction may be established if the defendant's activities in the territory meet the demanding standard of "continuous and systematic." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984); ALS Scan, Inc. v. Digital Service Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002). General jurisdiction may be used to maintain a suit against a defendant even when it does not arise out of the defendant's activities in the forum state. ALS Scan, 293 F.3d at 712. In contrast specific jurisdiction allows for a suit to be maintained only when the defendant's contacts with the forum are also the basis for the suit. Id. To determine if specific jurisdiction exists, a court must consider (1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the forum state; (2) whether the plaintiffs' claims arise out of ...

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