United States Court of Appeals
For the First Circuit
No. 01-1043
CAMBRIDGE LITERARY PROPERTIES, Ltd.,
Plaintiff, Appellant,
v.
W. GOEBEL PORZELLANFABRIK G.m.b.H & Co. Kg.,
GOEBEL VERWALTUNGS - und BETEILIGUNGSGESELLSCHAFT m.b.H.,
the General Partner of GOEBEL PORZELLANFABRIK G.m.b.H. & Co. Kg.,
and its former General Partners, WILHELM GOEBEL and ULRICH
STOCKE, and GOEBEL ART G.m.b.H., d/b/a GOEBEL OF NORTH AMERICA,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nancy Gertner, U.S. District Judge]
Before
Boudin, Chief Judge,
Bownes, Senior Circuit Judge,
and Lipez, Circuit Judge.
Henry Hermann for appellant.
David P. Shouvlin with whom Porter, Wright, Morris & Arthur
LLP, Joseph D. Steinfield, Kirsten Nelson Callahan and Hill &
Barlow were on brief for appellees.
July 9, 2002
BOUDIN, Chief Judge. Cambridge Literary Properties Ltd.
("Cambridge") brought this suit against W. Goebel Porzellanfabrik
G.m.b.H & Co. Kg. ("Goebel"), a German limited partnership, and
others associated with it.1 The complaint sought a share in the
profits gained by defendants from the use of images taken from the
Hummel Book in which Cambridge claims a copyright interest. The
district court granted defendants' Rule 12(b) motion and dismissed
the case for lack of personal jurisdiction. We describe the
underlying events in the light most favorable to Cambridge as the
non-moving party. Ticketmaster-New York, Inc. v. Alioto, 26 F.3d
201, 203 (1st Cir. 1994).
The Hummel Book contains images of children drawn by a
German nun, Sister Berta Maria Innocentia Hummel, accompanied by
the verse of an Austrian poet, Margarete Seemann. Emil Fink
Verlag, a German citizen, first published the book in German in
1934 under contract with Hummel and Seemann. Fink registered the
book as a foreign publication under U.S. copyright law in 1936 and
later introduced an English language version of the book into the
United States.
Cambridge claims that for purposes of U.S. copyright law
the Hummel Book is a work of joint authorship by Hummel, Seemann,
and Fink (who apparently contributed some illustrations). See 17
1
The other defendants are Goebel Art G.m.b.H., a German
corporation; Goebel Verwaltungs-und Beteilgungsgesellschaft m.b.H.,
a German closely held corporation and Goebel's current general
partner; and Wilhelm Goebel and Ulrich Stocke, residents of Germany
and former general partners in Goebel. The three institutional
defendants have their principal place of business in Roedental,
Germany.
-2-
U.S.C. § 101 (2000); see generally 1 Goldstein, Copyright § 4.2 (2d
ed. Supp. 2000). Thus, Cambridge says, the original authors each
held an ownership interest as a tenant in common in the original
U.S. copyright. In 1962, Fink renewed the U.S. copyright. Under
the then applicable Copyright Act of 1909, Pub. L. No. 60-349, 35
Stat. 1075 (repealed 1976), the renewal interests belonged to the
original owners, or to their heirs, regardless of any intervening
assignments under the original copyright. Miller Music Corp. v.
Charles N. Daniels, Inc., 362 U.S. 373, 374-75 (1960).
Cambridge claims an ownership interest in the renewal
copyright by purchase from the heirs of Seemann, who died in
Austria in 1949. Cambridge says Goebel and Goebel Art have at
various times owned the other interests in the renewal copyright.
Goebel, according to Cambridge, purchased Fink's interest in 1971,
before assigning it to a Swiss Company, ARS AG, allegedly half
owned and controlled by Goebel Art, in 1991. Goebel Art allegedly
acquired the other share, tracing back to Sister Hummel, from
Goebel's former U.S. distributor, Schmid Brothers, Inc., in 1994.
Illustrations in the Hummel Book allegedly served as
models for a continuing series of porcelain figurines, called
Hummels. These figurines have proved popular with collectors in
America. Goebel, or one or more related predecessor partnerships,
have apparently been manufacturing the figurines since 1935.
Individual Hummel figurines sell for several hundred dollars apiece
and the direct revenues from American sales are alleged to be in
the millions.
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Cambridge asserts that the figurines comprise derivative
works and their sale in the United States is governed by the
renewal copyright in the Hummel Book. Each co-owner of the renewal
copyright, says Cambridge, is free to exercise rights under the
copyright but owes a share of the profits to each other co-owner.
See 1 Goldstein, supra, § 4.2.2. On this basis, Cambridge claims
a share of the profits garnered by Goebel from U.S. sales of the
figurines and certain indirect profits reaped by Goebel Art;
allegedly, Goebel Art markets the figurines and operates a
lucrative club for Hummel collectors in the United States using
images derived from the book.
In February 2000, Cambridge brought the present suit in
federal district court in Massachusetts, seeking an accounting and
imposition of a constructive trust to recover its alleged share of
the profits. The defendants responded by filing a motion to
dismiss under Rule 12(b)(2) for lack of personal jurisdiction.2
Cambridge's main response was that the district court had specific
jurisdiction under the Massachusetts long-arm statute, which
provides (most pertinently) that
[a] court [in Massachusetts] may exercise
personal jurisdiction over a person, who acts
directly or by an agent, as to a cause of
action in law or equity arising from the
person's (a) transacting any business in this
commonwealth . . . .
Mass. Gen. Laws chap. 223A, § 3 (2000).
2
In the alternative, the defendants sought transfer to the
District of New Jersey on grounds of forum non conveniens. The
district court did not reach this alternative request and neither
do we.
-4-
After the filing of memoranda, documents, and affidavits,
the district court dismissed for lack of personal jurisdiction.
The district court assumed, at least for purposes of argument, that
Goebel had "transacted business" in Massachusetts by shipping all
of its U.S.-bound Hummel figurines from its factory in Germany
F.O.B. to its independent distributor, Schmid Brothers, in
Massachusetts, at least from 1988 to 1994. At their peak, these
shipments totaled over $20 million annually. (After 1994, Goebel
shipped the Hummels to a New Jersey company that was a wholly owned
subsidiary of Goebel Art.)
However, the district court held that Cambridge had not
satisfied the further requirement of showing that its claims "arose
from" these shipments. The court said that accounting and
constructive trust are merely remedies and Cambridge's claim to a
share of profits depended on its establishing a series of
propositions (e.g., that Seemann was a joint author and that
Cambridge held a valid ownership interest through her heirs).
These in turn depended, said the court, on events in Europe dating
back many years and had no connection with sales or distribution in
Massachusetts. The district court then dismissed as to all
defendants. Cambridge now appeals.
The issues on appeal are largely legal ones subject to de
novo review. Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st
Cir. 1992). Because the court did not hold an evidentiary hearing,
we must look to the pleadings and supplemental filings to determine
whether Cambridge has alleged facts sufficient to support the
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exercise of jurisdiction under both the long-arm statute and the
Constitution. Lyle Richards Int'l, Ltd. v. Ashworth, Inc., 132
F.3d 111, 112 n.1 (1st Cir. 1997).
To begin with what is undisputed, Cambridge does not rely
on any special federal statute providing for nationwide or
otherwise expanded service. See Janmark, Inc. v. Reidy, 132 F.3d
1200, 1201 (7th Cir. 1997). Indeed, it is unlikely that any
federal cause of action is asserted, even though federal law is the
source of the Hummel Book copyright itself. In all events, the
district court properly considered whether a Massachusetts state
court could exercise personal jurisdiction over the defendants.
See id.; Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995).
However, the jurisdictional inquiry is largely a federal
constitutional one. Massachusetts courts construe section 3(a)'s
"transacting business" requisite as extending jurisdiction as far
as permitted by the due process clause of the Fourteenth Amendment.
Tatro v. Manor Care, Inc., 625 N.E.2d 549, 553 (Mass. 1994); see
also "Automatic" Sprinkler Corp. of Am. v. Seneca Foods Corp., 280
N.E.2d 423, 424 (Mass. 1972). We have on occasion held
jurisdiction to be barred on due process grounds where the literal
terms of the statute might seem to permit it. Bond Leather Co.,
Inc. v. Q.T. Show Mfg. Co., Inc., 764 F.2d 928, 932-35 (1st Cir.
1985). So, in the ordinary case, we can proceed directly to the
constitutional due process test. See Sawtelle, 70 F.3d at 1388.
The due process cases impose three requirements on the
exercise of specific personal jurisdiction over out-of-state
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defendants. United Elec., Radio and Mach. Workers of Am. v. 163
Pleasant St. Corp., 960 F.2d 1080, 1089 (1st Cir. 1992). (By
contrast, if a defendant has continuous and systematic contacts
with the state, courts in the state may exercise general
jurisdiction over any cause of action against the defendant. Id.
at 1088.) To begin, the defendant must have purposeful "minimum
contacts" with the state. Further, the exercise of jurisdiction
must be "reasonable" under the circumstances. The third
requirement, on which this case turns is that the plaintiff's
claims be related to the defendant's contacts. 960 F.2d at 1089.
Section 3(a) expresses this relatedness requirement by
addressing itself only to claims "arising from" the transaction of
business in Massachusetts. However, "relatedness" may be a broader
concept, and we assume Massachusetts courts would again construe
the statute as extending to its constitutional limit. Tatro, 625
N.E.2d at 553-54. In sum, under section 3(a) and the Constitution,
specific jurisdiction requires a nexus between the claim and
defendant's in-state activities; thus the district court quite
properly focused at the outset on the relationship between Goebel's
Massachusetts contacts and Cambridge's claims.
As previously noted, Goebel's direct sales to
Massachusetts were substantial for a period ending in 1994.3 The
3
In addition, a portion of Goebel's shipments to the U.S.
(between $250,000 and $1 million annually) were sold by Schmid or
Goebel Art's New Jersey subsidiary to retailers in Massachusetts.
However, sales by an independent distributor (Schmid) or separately
incorporated subsidiary normally do not count as "contacts" of the
manufacturer or parent corporation. Boit, 967 F.2d at 682-83;
United Elec. Workers, 960 F.2d at 1091.
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shipment of large quantities of goods into a state, even F.O.B. can
satisfy the minimum contacts prong of the due process inquiry. See
Vencedor Mfg. Co., Inc. v. Gougler Indus., Inc., 557 F.2d 886, 890-
91 (1st Cir. 1977); Buckeye Assocs., Ltd. v. Fila Sports, Inc., 616
F. Supp. 1484, 1490 n.7 (D. Mass. 1985); Mark v. Obear & Sons,
Inc., 313 F. Supp. 373, 376-77 (D. Mass. 1970). But the district
court ultimately concluded that there was an insufficient "causal
nexus between plaintiff's claims and Goebel's Massachusetts
contacts." To test that conclusion, we must ask, what are those
claims and what conduct do they subsume?
The current federal copyright statute, although
recognizing jointly owned copyrights and inheritance of rights, is
silent as to the law governing joint ownership and inheritance; it
is similarly silent as to what law provides remedies in disputes
between co-owners. See H.R. Rep. No. 94-1476, at 121, reprinted in
1976 U.S.C.C.A.N. 5659, 5736 ("There is no need for a specific
statutory provision concerning the rights and duties of the
coowners of a work; court-made law on this point is left
undisturbed."). Unsurprisingly, courts often look at state law.
See, e.g., DeSylva v. Ballentine, 351 U.S. 570, 580-81 (1956);
Goodman v. Lee, 78 F.3d 1007, 1012 & n.16 (5th Cir. 1996).
Doubtless a Massachusetts court--if it proceeded to the
merits of our case--would find, either in its own law or elsewhere,
some cause of action to redress any wrongful withholding of profits
by one joint copyright owner from another. Probably in every
state, and one may suppose in Germany and Austria as well, legal
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vehicles exist for sorting out rights of co-owners of intangible
property interests and to redress wrongful withholding of profits
by one from another. Nor would a Massachusetts court, in its
choice of law decisions, necessarily apply the law only of one
jurisdiction; probably the choice would depend on the precise issue
in dispute.4
For present purposes, it does not greatly matter just how
one denominates the cause of action to recover profits wrongfully
withheld, nor whether it arises under Massachusetts law. "Claim"
or "cause of action" usually refers to an abstract legal theory for
recovery; but in deciding whether specific jurisdiction exists, the
legal theory advanced is important primarily to tell us what
alleged conduct matters to the case at hand. The basis for
specific jurisdiction is that a defendant's Massachusetts contacts
not only exist but are sufficiently related to the events that make
up the case.
Here, the conduct pertinent to the case is likely to be
pretty much the same whether an "accounting" is regarded as a cause
of action (as Cambridge contends) or merely (as defendants urge) a
remedy for some other claim such as breach of contract, unjust
enrichment, or the like. Whatever the label, Cambridge must show
that it has part ownership in the U.S. renewal copyright, that
4
It is possible to imagine a Massachusetts court looking to
federal copyright law and German contract law as to whether Hummel,
Seemann, and Fink are co-owners; Austrian inheritance law if the
Seemann rights are disputed; federal copyright law as to whether
the figurines are derivative works; and to the law of any of
several jurisdictions as to rights and defenses among co-owners and
available remedies.
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profits were derived from the use of the copyright in the U.S., and
that Cambridge's share was wrongfully withheld by the defendant in
question. There may be other issues (e.g., ones pertinent to
defenses) but the showing just described has to be the gist of
Cambridge's claim.
Can one then say that such a claim is sufficiently
related to the defendants' Massachusetts contacts? Ordinarily,
jurisdiction is determined separately as to each defendant. Calder
v. Jones, 465 U.S. 783, 790 (1984). Focusing for now on Goebel as
the lead defendant, one aspect of the pertinent conduct (and
perhaps one aspect only)--namely, the derivation of profits from
use of the copyright--is directly linked to Goebel's contacts with
Massachusetts, namely, its shipment of figurines into the state.
The generation of profits is certainly a "but for" cause
of Cambridge's claim and, according to the Massachusetts courts,
this is all that section 3(a)'s "arising from" provision requires.
Tatro, 625 N.E.2d at 553. However, "but for" events can be very
remote and, on some facts, the due process clause arguably requires
more than a literal "but for" link between the Massachusetts
contact and the asserted cause of action. Suppose Goebel had been
founded in Massachusetts but then reorganized as a German
partnership in 1930. Formation in Massachusetts would arguably be
a "but for" cause of its subsequent operations, but it would hardly
be an adequate nexus.
Nonetheless, assuming (as we do) that due process demands
something like a "proximate cause" nexus, Nowak v. Tak How Invs.,
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Ltd., 94 F.3d 708, 715-16 (1st Cir. 1996), the shipment of
figurines into Massachusetts does play a close and significant role
in Cambridge's claims since it is the source of most of the profits
in dispute. The case law supports personal jurisdiction in
analogous cases. For example, in Keds Corp. v. Renee International
Trading Corp., 888 F.2d 215 (1st Cir. 1989), we held that an out of
state manufacturer that sold 6,000 pairs of shoes in Massachusetts
was subject to personal jurisdiction in Massachusetts as to a
related trademark infringement action.5
The district court stressed that other issues,
implicating conduct wholly outside the United States--particularly,
events in Germany and Austria relating to Cambridge's asserted
ownership interest--were antecedent to any concern about sales in
Massachusetts. Certainly without a copyright interest, Cambridge
could not recover; but it is hard to see why this matters to
jurisdiction. The shared concern of the statute and the due
process precedents is whether the claim in some significant degree
arises from defendant's contacts with Massachusetts. That events
elsewhere also bear upon the claim, and may indeed be the main (or
only) subjects of actual dispute at trial, does not negate the
existence of minimum Massachusetts contacts related to the claim.
5
Accord, Gary Scott Int'l, Inc. v. Baroudi, 981 F. Supp. 714
(D. Mass. 1997) (California defendant subject to personal
jurisdiction in trademark action involving defendant's sale of
allegedly infringing humidors in Massachusetts); Knapp v. Utech
Prods., Inc., 2001 WL 716890 (Mass. Super. 2001) (sales of software
sufficient to create long-arm jurisdiction over defendant who
allegedly failed to pay royalties pursuant to contract made in New
York).
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Imagine a defective product made solely in Germany but shipped into
Massachusetts.
Such minimum related contacts merely supply the threshold
showing (apart from reasonableness to which we will return)
required for the court to assert jurisdiction. What issues will in
fact predominate at trial, where witnesses as to them reside, and
a host of other variables bear on whether the court should hear the
case or whether transfer or dismissal in favor of some other venue
is warranted. Iragorri v. Int'l Elevator, Inc., 203 F.3d 8, 12
(1st Cir. 2000). But as for related minimum contacts, the
shipments to Massachusetts are central to recovery here, and Goebel
itself does not deny that such shipments did occur.
Goebel suggests that we look only at its most recent
direct contacts with Massachusetts, which are much more limited,
but does not say why. Cambridge answers--correctly, we think, see
Gen. Motors Corp. v. Ignacio Lopez De Arriortua, 948 F. Supp. 656,
663 (E.D. Mich. 1996)--that for purposes of specific jurisdiction,
contacts should be judged when the cause of action arose,
regardless of a later lessening or withdrawal. Conceivably, Goebel
could have argued that the court lacks jurisdiction over it for any
claim relating to shipments made after 1994, when it stopped
shipping directly to Massachusetts, but even that argument has not
been made and so is abandoned.
Goebel Art is, if separately considered, in a different
position than Goebel vis-a-vis personal jurisdiction. According to
Cambridge, Goebel Art made use of copyrighted material from the
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Hummel Book in providing marketing services in Massachusetts (and
elsewhere) to promote the sale of Hummel figurines and in promoting
its M.I. Hummel Club, which provides fee-paying members--1,500 to
2,000 of whom reside in Massachusetts--with information on Hummel
products and the opportunity to buy Hummel merchandise online via
a Club website. Just how far these activities generated profits
that Goebel Art is arguably required to share is unclear, but
nothing responsive argued by defendants allows us to dismiss this
claim of jurisdiction out of hand. See Hasbro, Inc. v. Clue
Computing, Inc., 994 F. Supp. 34 (D. Mass. 1997).
There remains, for due process purposes, the further
question whether despite relevant minimum contacts by both Goebel
and Goebel Art, it is "reasonable" for the district court in
Massachusetts to exercise personal jurisdiction with respect to
these claims. United Elec. Workers, 960 F.2d at 1088. The Supreme
Court has identified a set of so-called "gestalt" factors to be
considered, including the burden on defendant in appearing, the
forum's interest in resolving the matter, plaintiff's interest in
a convenient forum, and two factors that might go under the heading
of "public interest." See World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 292 (1980).
The gestalt factors rarely seem to preclude jurisdiction
where relevant minimum contacts exist. Here, as is likely true in
many cases, the plaintiff has an interest in litigating
conveniently in its home state, which in turn has an interest in
affording its citizens a convenient forum. And while Germany would
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surely be more convenient for defendants, litigation in
Massachusetts cannot be impossibly burdensome for defendants who,
by their own admission to the district court, are prepared to
defend in New Jersey where Goebel Art's North American subsidiary
is based.
This conclusion makes it unnecessary to consider two
other theories advanced by Cambridge for jurisdiction as to both
Goebel and Goebel Art. One is that the two companies are so
integrated that they should be treated as one entity and their
contacts aggregated for purposes of determining personal
jurisdiction. So far as this is a veil-piercing argument, the
"presumption of corporate separateness" is difficult to overcome,
United Elec. Workers, 960 F.2d at 1091, and Cambridge's conclusory
allegations do not suffice. If some different argument for
attribution of contacts is contemplated, cf. Donatelli v. Nat'l
Hockey League, 893 F.2d 459, 465-66 (1st Cir. 1990), the argument
is undeveloped.
In the alternative, Cambridge asserts that general
jurisdiction can be established as to Goebel and Goebel Art.
Defendants claim that this argument was not preserved in the
district court, and it is a close question whether the issue has
even been preserved on appeal. Cambridge's opening brief makes
almost no effort to develop the facts necessary to show a
"continuous and systematic" presence in Massachusetts, United Elec.
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Workers, 960 F.2d at 1088;6 its brief legal discussion is
incomplete as well, see Mass. Sch. of Law v. Am. Bar Ass'n, 142
F.3d 26, 43 (1st Cir. 1998). In all events, it is hard to see why
general jurisdiction now matters, since the prima facie showing
thus far is enough for specific jurisdiction as to Goebel and
Goebel Art.
As to the other three defendants (see note 1, above), we
sustain outright the district court's dismissal. The three
comprise current or former general partners in Goebel, which is
itself a limited partnership. The two individuals say they have no
regular contacts with Massachusetts though each admits (without
providing detail) that he visited Massachusetts several years ago.
The corporate general partner is completely silent. Cambridge
makes no claim that any of the three had contacts with the state
relevant to the present case.
Instead, Cambridge relies on the bald proposition that
personal jurisdiction over a partnership automatically conveys
personal jurisdiction over each of the partners or at least the
general partners. For this view it offers no citations nor any
reasoned argument. Our own brief look into the law reveals that
there is a diversity of views among various courts and that
something may turn on the law where the partnership was formed.
Compare Sher v. Johnson, 911 F.2d 1357, 1365 (9th Cir. 1990), with
6
Cambridge points merely to a few additional contacts with the
forum that are apparently unrelated to its claim: it says Goebel
sold some (non-Hummel) crystal to a retailer in Massachusetts and
it alleges that Goebel Art employed a sales representative who
resided in the Commonwealth.
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Jackson Nat'l Life Ins. Co. v. Greycliff Partners, Ltd., 2 F. Supp.
2d 1164, 1167 (E.D. Wis. 1998). See generally Miller v. McMann, 89
F. Supp. 2d 564, 569 (D.N.J. 2000).7
Cambridge's legal position on this issue is not
sufficiently developed to be preserved. A party advancing a legal
claim must make a respectable effort to argue it, supplying
pertinent authorities or accounting for their lack. Mass. Sch. of
Law, 142 F.3d at 43. At least where the proposition is open to
doubt, it is not enough to assert it and hope the court will do the
research. We conclude that Cambridge's proposition is arguable but
not obvious and that no other colorable basis for jurisdiction has
been preserved as to the remaining three defendants.
Accordingly, we vacate the district court's dismissal as
to Goebel and Goebel Art but affirm its dismissal as to the other
three defendants. On remand, the district court remains free to
consider transfer or dismissal on other grounds that were urged but
not reached or which the court allows to be urged hereafter. Each
side shall bear its own costs on this appeal.
It is so ordered.
7
There is a "general rule . . . that jurisdiction over a
partner confers jurisdiction over the partnership," Donatelli, 893
F.2d at 466, but this rule relates to the partnership as an entity.
The question pertinent here is whether individual partners can be
sued in Massachusetts based on contacts of the partnership. See
Restatement (Second) of Confl. of Laws § 40 (1971).
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