The Honorable Denny Chin, who was at the time of argument a United States District… v. Am. Buddha UNITED STATES COURT OF APPEALS 1 FOR THE SECOND CIRCUIT 2 August Term,…

* The Honorable Denny Chin, who was at the time of argument
a United States District Judge for the Southern District of New
York sitting by designation, is now a member of this Court.
09-1739-cv
Penguin Grp. (USA) Inc. v. Am. Buddha
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
August Term, 2010 3
(Argued: January 7, 2010 Question Certified: June 15, 2010 4
5
Certified Question Answered: March 24, 2011 6
Decided: May 12, 2011) 7
Docket No. 09-1739-cv 8
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PENGUIN GROUP (USA) INC., 10
Plaintiff-Appellant, 11
- v - 12
AMERICAN BUDDHA, 13
Defendant-Appellee. 14
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Before: SACK, KATZMANN, and CHIN, * Circuit Judges. 16
Appeal by the plaintiff from an order of the United 17
States District Court for the Southern District of New York 18
(Gerard E. Lynch, Judge) dismissing this action for lack of 19
personal jurisdiction over the defendant. In answer to a 20
question we certified to the New York Court of Appeals, see 21
Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 42 (2d Cir. 22
2010), that court has concluded that "[i]n copyright infringement 23
cases involving the uploading of a copyrighted printed literary 24

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2
work onto the Internet, . . . the situs of injury for purposes of 1
determining long-arm jurisdiction under [the relevant section of 2
New York's long-arm-jurisdiction statute is] . . . the location 3
of the copyright holder," Penguin Grp. (USA) Inc. v. Am. Buddha, 4
16 N.Y.3d 295, 301-02, --- N.E.2d ---, ---, --- N.Y.S.2d ---, --- 5
(2011). In light of this response by the Court of Appeals, the 6
judgment of the district court is now: 7
Vacated and Remanded. 8
RICHARD DANNAY, Cowan, Liebowitz & 9
Latman, P.C. (Thomas Kjellberg, of 10
counsel), New York, N.Y., for Plaintiff- 11
Appellant. 12
CHARLES CARREON, Online Media Law, PLLC, 13
Tucson, Ariz., for Defendant-Appellee. 14
PER CURIAM : 15
This appeal, which returns to us after the New York 16
Court of Appeals responded to a question we certified to that 17
Court, concerns the limits of New York's "long-arm" jurisdiction 18
over out-of-state defendants in copyright infringement actions. 19
We assume the readers' familiarity with the facts and procedural 20
history as set forth in our previous opinion in this case. See 21
Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 32-34 (2d 22
Cir. 2010) ("Am. Buddha II"). We rehearse them here only insofar 23
as we think necessary to explain our final resolution of this 24
appeal. 25
The defendant American Buddha is an Oregon not-for- 26
profit corporation with its principal place of business in 27
Arizona that maintains a website known as the Ralph Nader 28

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2 The Ralph Nader Library is not affiliated with well known
consumer advocate Ralph Nader. See Penguin Grp. (USA) Inc. v.
Am. Buddha, 609 F.3d 30, 33 (2d Cir. 2010).
3 Penguin alleges that American Buddha has posted the
following four books in their entirety on www.naderlibrary.com,
thereby infringing Penguin's copyrights in the printed works:
Upton Sinclair, Oil!; Sinclair Lewis, It Can't Happen Here;
Apuleius, The Golden Ass (E.J. Kenney trans.); and Lucretius, On
the Nature of the Universe (R.E. Latham trans.). Penguin Grp.
(USA) Inc. v. Am. Buddha, No. 09-cv-528, 2009 WL 1069158, at *1,
2009 U.S. Dist. LEXIS 34032, at *2 (S.D.N.Y. Apr. 21, 2009).
4 Subject matter jurisdiction was premised on the federal
courts' "original and exclusive" jurisdiction over actions
alleging copyright infringement pursuant to 17 U.S.C. § 501.
Compl. ¶ 4; see 28 U.S.C. § 1338(a).
3
Library. 2 The website "provides access to classical literature 1
and other works . . . , including [four] works published in print 2
format by Plaintiff-Appellant Penguin Group (USA) Inc. 3
[("Penguin")]." 3 Am. Buddha II, 609 F.3d at 33 (internal 4
quotation marks omitted). Having learned of the existence of 5
American Buddha's website and its contents, Penguin filed suit 6
against American Buddha in the United States District Court for 7
the Southern District of New York, alleging that American 8
Buddha's posting of the four Penguin books on the Internet 9
violated Penguin's copyrights in works that it had published. 4
10
American Buddha moved to dismiss the complaint pursuant to Rule 11
12(b)(2) of the Federal Rules of Civil Procedure, "contending 12
that it has done nothing that would make it amenable to suit in 13
New York." Penguin Grp. (USA) Inc. v. Am. Buddha, No. 09-cv-528, 14
2009 WL 1069158, at *1, 2009 U.S. Dist. LEXIS 34032, at *1 15
(S.D.N.Y. Apr. 21, 2009) ("Am. Buddha I"). The district court 16

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4
agreed, ruling, as we later characterized it, that the "situs of 1
the injury" was "where the book[s in which Penguin holds the 2
copyrights were] electronically copied -- presumably in Arizona 3
or Oregon, where American Buddha and its computer servers were 4
located -- and not New York, where Penguin was headquartered." 5
Am. Buddha II, 609 F.3d at 32; see also Am. Buddha I, 2009 WL 6
1069158, at *4, 2009 U.S. Dist. LEXIS 34032, at *13. This appeal 7
followed. 8
Concluding that resolution of the issues raised on 9
appeal "require[d] analysis of state law and policy 10
considerations that this Court is ill-suited to make," Am. Buddha 11
II, 609 F.3d at 32, we certified a question to the New York Court 12
of Appeals, which that Court has now answered. 13
The district court's dismissal of Penguin's complaint 14
rested on its interpretation of New York's long-arm statute, N.Y. 15
C.P.L.R. 302(a)(3)(ii). It provides, in pertinent part: 16
[A] court may exercise personal jurisdiction 17
over any non-domiciliary . . . who . . . 18
commits a tortious act without the state 19
causing injury to person or property within 20
the state, . . . if he . . . expects or 21
should reasonably expect the act to have 22
consequences in the state and derives 23
substantial revenue from interstate or 24
international commerce . . . . 25
N.Y. C.P.L.R. 302(a)(3)(ii). To establish jurisdiction under 26
this provision, a plaintiff must demonstrate that: 27
(1) the defendant's tortious act was 28
committed outside New York, (2) the cause of 29
action arose from that act, (3) the tortious 30
act caused an injury to a person or property 31
in New York, (4) the defendant expected or 32

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5
should reasonably have expected that his or 1
her action would have consequences in New 2
York, and (5) the defendant derives 3
substantial revenue from interstate or 4
international commerce. 5
Am. Buddha II, 609 F.3d at 35 (citing LaMarca v. Pak-Mor Mfg. 6
Co., 95 N.Y.2d 210, 214, 735 N.E.2d 883, 886, 713 N.Y.S.2d 304, 7
307 (2000)). 8
In this case, the applicability vel non of the long-arm 9
statute turns on the third requirement: the situs of Penguin's 10
injury. For the district court to find that the long-arm statute 11
conferred jurisdiction on courts in New York, Penguin was 12
required to show that it suffered injury "within the state." 13
After examining two competing lines of New York cases, the 14
district court reasoned that "[b]ecause Penguin pleaded 15
infringement only by American Buddha, and not by any individual 16
who downloaded material from American Buddha's site, . . . 17
business was lost through the copying of the copyrighted works by 18
American Buddha and not through their placement on the Internet." 19
Id. at 37 (characterizing the district court's analysis in Am. 20
Buddha I). The district court therefore concluded that Penguin's 21
business was lost -- and its injury suffered -- "where the books 22
were uploaded -- Oregon or Arizona -- not where they were 23
downloaded and used, which could have been anywhere that the 24
Internet is available, including New York." Id. (same). 25
On appeal to this Court, we decided that resolution of 26
the appeal "require[d] a determination of how the New York State 27
Legislature intended to weigh the breadth of protection to New 28

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5 The district court does not have statutory authority to
ask the New York Court of Appeals for its views on unsettled and
important issues of New York law. We do. See N.Y. Comp. Codes
R. & Regs. tit. 22, § 500.27(a).
6
Yorkers whose copyrights have allegedly been infringed against 1
the burden on non-resident alleged infringers whose connection to 2
New York may be remote and who may reasonably have failed to 3
foresee that their actions would have consequences in New York." 4
Id. at 32; see also id. at 37-41 (reviewing the legislative 5
history of the relevant long-arm provisions and New York cases 6
interpreting them). 7
We therefore certified the following question to the 8
New York Court of Appeals: 5 "In copyright infringement cases, is 9
the situs of injury for purposes of determining long-arm 10
jurisdiction under N.Y. C.P.L.R. § 302(a)(3)(ii) the location of 11
the infringing action or the residence or location of the 12
principal place of business of the copyright holder?" Id. at 32. 13
On March 24, 2011, the Court of Appeals answered a 14
"narrow[ed] and reformulate[d]" version of our question. Penguin 15
Grp. (USA) Inc. v. Am. Buddha, 16 N.Y.3d 295, 301, --- N.E.2d --- 16
, ---, --- N.Y.S.2d ---, --- (2011) ("Am. Buddha III"). The 17
Court rephrased our question as follows: "In copyright 18
infringement cases involving the uploading of a copyrighted 19
printed literary work onto the Internet, is the situs of injury 20
for purposes of determining long-arm jurisdiction under N.Y. 21
C.P.L.R. § 302(a)(3)(ii) the location of the infringing action or 22
the residence or location of the principal place of business of 23

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6 The Court of Appeals emphasized that it was not "necessary
[for it] to address whether a New York copyright holder sustains
an in-state injury pursuant to CPLR 302(a)(3)(ii) in a copyright
infringement case that does not allege digital piracy and,
therefore, express[ed] no opinion on that question." Am. Buddha
III, 16 N.Y.3d at 307 n.5, --- N.E.2d at --- n.5, --- N.Y.S.2d at
--- n.5.
7
the copyright holder?" Id. at 301-02, --- N.E.2d at ---, --- 1
N.Y.S.2d at --- (emphasis added). 6 The Court concluded that "a 2
New York copyright owner alleging infringement sustains an in- 3
state injury pursuant to CPLR 302(a)(3)(ii) when its printed 4
literary work is uploaded without permission onto the Internet 5
for public access." Id. at 304, --- N.E.2d at ---, --- N.Y.S.2d 6
at ---. 7
The New York Court of Appeals observed that "the 8
Internet itself plays an important role in the jurisdictional 9
analysis in the specific context of this case." Id. at 304, --- 10
N.E.2d at ---, --- N.Y.S.2d at ---. "[T]he alleged injury in 11
this case involves online infringement that is dispersed 12
throughout the country and perhaps the world." Id. at 305, --- 13
N.E.2d at ---, --- N.Y.S.2d at ---. The Court therefore 14
concluded that "it is illogical to extend" the traditional tort 15
approach that "equate[s] a plaintiff's injury with the place 16
where its business is lost or threatened" to the context of 17
"online copyright infringement cases where the place of uploading 18
is inconsequential and it is difficult, if not impossible, to 19
correlate lost sales to a particular geographic area." Id. at 20
305, --- N.E.2d at ---, --- N.Y.S.2d at ---. 21

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8
The Court also identified the right of a copyright 1
holder "'to exclude others from using his property'" as a 2
"critical factor that tips the balance in favor of identifying 3
New York as the situs of injury." Id. at 305, --- N.E.2d at ---, 4
--- N.Y.S.2d at --- (quoting eBay Inc. v. MercExchange, L.L.C., 5
547 U.S. 388, 392 (2006)). In light of this right and the 6
"undisputed" fact that "American Buddha's Web sites are 7
accessible by any New Yorker with an Internet connection," the 8
Court viewed the "absence of any evidence of the actual 9
downloading of Penguin's four works by users in New York" as "not 10
fatal to a finding that the alleged injury occurred in New York." 11
Id. at 306, --- N.E.2d at ---, --- N.Y.S.2d at ---. 12
The Court of Appeals rejected American Buddha's 13
assertion that its decision would "open a Pandora's box allowing 14
any nondomiciliary accused of digital copyright infringement to 15
be haled into a New York court when the plaintiff is a New York 16
copyright owner of a printed literary work." Id. at 307, --- 17
N.E.2d at ---, --- N.Y.S.2d at ---. The Court was satisfied that 18
the long-arm statute's "built-in safeguards against such 19
exposure," together with the requirements of the United States 20
Constitution's Due Process Clause, would guard against such 21
abuse. Id. at 307, --- N.E.2d at ---, --- N.Y.S.2d at ---. 22
When this appeal was last before us, we indicated that 23
"were we eventually to agree with Penguin, contrary to the 24
district court's decision, that the situs of injury was indeed 25
New York, the proper course would be to remand to the district 26

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9
court to consider the remaining four factors for personal 1
jurisdiction under the long-arm statute." Am. Buddha II, 609 2
F.3d at 41. The Court of Appeals' decision now compels us to 3
"agree with Penguin" and to conclude, for the purposes of the 4
personal jurisdiction analysis pursuant to New York's long-arm 5
statute, that the situs of Penguin's alleged injury was New York. 6
As we observed in American Buddha II, the district 7
court's opinion and order dismissing Penguin's complaint 8
addressed only the situs-of-injury issue. See id.; Am. Buddha I, 9
2009 WL 1069158, at *4, 2009 U.S. Dist. LEXIS 34032, at *13 ("As 10
this issue is dispositive, it is not necessary to explore whether 11
plaintiff has met its burden on the other elements necessary to 12
establish jurisdiction under Rule 302(a)(3)(ii), or whether the 13
exercise of jurisdiction would comport with due process."). We 14
therefore vacate the judgment of the district court and remand 15
this case to that court for its consideration in the first 16
instance of whether Penguin has established the four remaining 17
jurisdictional requisites, and the extent to which the assertion 18
of personal jurisdiction over American Buddha would be consistent 19
with the requirements of Due Process. 20
For the foregoing reasons, the judgment dismissing the 21
plaintiff's complaint is vacated and the case is remanded to the 22
district court for further proceedings consistent with this 23
opinion and with the Court of Appeals' response to our certified 24
question. 25

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