Simply alleging economic losses suffered in the state where its business was located was insufficient for a producer to bring intellectual-property claims resulting from unlicensed foreign distribution of the spoof-horror flicks Poultrygeist: Night of the Chicken Dead and Citizen Toxie: The Toxic Avenger IV.
The Second Circuit ruled in Troma Entertainment, Inc. v. Centennial Pictures Inc., ___ F.3d___, No. 12-1883, 2013 WL 4766854 (2d Cir. Sept. 6, 2013) that there was no personal jurisdiction over defendants Lance Robbins and King Brett Lauter because Troma failed to establish a non-speculative and direct New York-based injury as required by New York’s long-arm statute.
Troma argued that personal jurisdiction may be exercised in the Eastern District of New York over Robbins and Lauter pursuant to section 302(a)(3)(ii) of New York’s long-arm statute. This provision confers personal jurisdiction over an individual who “commits a tortious act without the state cause injury to person or property within the state . . . if he . . . expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.” N.Y.C.P.L.R. § 302(a)(3)(ii).
Although Troma alleged that it lost money in New York where it is based, its complaint did not make any allegations suggesting that the defendants’ tortious conduct harmed the Poultrygeist and Citizen Toxieproducer in a particular locality. Therefore, the Second Circuit held that the district court correctly ruled that it did not have the power to exercise jurisdiction over Robbins and Lauter.