MOSSACK FONSECA & CO., S.A. et al Document 25

Filed October 17, 2019

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Page 1 UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

MOSSACK FONSECA & CO., S.A.; BUFETE MF &
CO.; JURGEN MOSSACK; and RAMON FONSECA, | Civil No. 3:19cv1618 (JBA)
Plaintiffs,
October 17, 2019
NETELIX, INC.,
Defendant.


RULING GRANTING TRANSFER OF ACTION TO
CENTRAL DISTRICT OF CALIFORNIA
In 2016, an anonymous whistleblower obtained millions of internal documents from the
Mossack Fonseca business group and released them to the press. These documents contained
information regarding Mossack Fonseca’s provision of offshore financial services to clients
around the globe, and they became known as the “Panama Papers.” The Panama Papers data-
dump provides the basis for The Laundromat, a Netflix original film set to debut on the
production company’s streaming platform on October 18, 2019.
Mossack Fonseca and its principals (“Plaintiffs”) allege that The Laundromat’s depiction
of their work in the offshore financial services industry libels principals Jiirgen Mossack and
Ramén Fonseca, invades Mossack and Fonseca’s privacy by portraying them in a false light, and
dilutes and falsely advertises the firm’s trademarked logo in violation of the Lanham Act, 15
ULS.C. § 1125,
The threshold issue of Court’s authority to hear Plaintiffs’ claims is presented in Netflix’s
Motion to Dismiss [Doc. # 9] for lack of personal jurisdiction, on the grounds that Plaintiffs lack
sufficient ties to Connecticut to avail themselves of this forum. In the alternative, Netflix requests
Page 2 that the case be transferred to the District Court for the Central District of California, pursuant
to 28 U.S.C. 1404(a).
The Court agrees that it lacks jurisdiction, and so transfers the case for the reasons that
follow.
I. Background
Plaintiffs Jiirgen Mossack and Ramon Fonseca are licensed attorneys who reside in the
Republic of Panama. (First Amended Compl. [Doc. # 22] ¢ 1.) Plaintiffs “were primarily in the
business of forming and maintaining offshore companies,” “commonly referred to as ‘tax
havens.” (Id. ¢§ 6-7.) To that end, Mossack and Fonseca owned and operated the law firm Bufete
ME & Co. and the corporation Mossack Fonseca & Co., S.A. (Id.§§ 2-3.) These business entities,
which are also named as plaintiffs to this lawsuit, were organized under Panamanian law and
headquartered in Panama City. (Id.)
Defendant Netflix, Inc., is a multimedia company that is headquartered in the State of
California and incorporated in the State of Delaware. (Id. ¢¢ 4-5.) Netflix is also registered with
the Connecticut Secretary of State as a foreign corporation’ authorized to conduct business. (Id. §.) Netflix is the distributor of the 2019 film The Laundromat, which portrays Plaintiffs as lead
characters. (Id. §4 60-62.) Netflix also operates a streaming service that has millions of
subscribers worldwide. (Id. ¢ 121.)
In 2016, an anonymous whistleblower provided 11.5 million Mossack Fonseca
documents - the “Panama Papers” - to a German journalist. (Id. ¢ 28.) The International

The Court “use[s] the phrase ‘foreign corporation’ to mean an organization
incorporated under the laws of a state other than the forum state.” Brown v. Lockheed Martin
Corp., 814 F.3d 619, 626 (2d Cir. 2016) (citing Conn. Gen. Stat. § 33-602(15)).
Page 3 Consortium of Investigative Journalists (“ICIJ”), assisted in reviewing these documents and
produced stories “detailfing] the connections between Government officials and offshore
holdings, as well as others involved in illegal activities, utilizing entities alleged[ly]” created by
Plaintiffs. (Id. ¢¢ 30-33.)
Following this initial coverage of the Panama Papers, a member of the ICIJ team, Jake
Bernstein, published a book on the documents titled Secrecy World. (Id. ¢§ 46-47.) In either 2017
or 2018, Bernstein sold the film rights to his book to Netflix. (Jd. § 61.) The Panama Papers film
was produced under the name The Laundromat and advertised as being “based on some real
shit.” (Id. at 1.) The film stars Gary Oldman as Jiirgen Mossack and Antonio Banderas as Ramon
Fonseca, and “portrays the Plaintiffs as ruthless, uncaring and unethical lawyers involved in
money laundering, tax evasion and/or other criminal activities that benefit wealthy people and/or
dangerous criminals.” (Id. §§ 79-82.)
Netflix premiered The Laundromat at the Venice Film Festival on September 1, 2019 and
screened it at the Toronto Film Festival on September 9, 2019. (Ex. 2 to Def.’s Opposition to Pls.’
Motion for Temporary Restraining Order, Davin Declaration [Doc. # 20-2] ¢ 2.) The film was
released in select theaters in New York and California on September 27, 2019. (Id.) Netflix
intends to add The Laundromat to its streaming platform for consumption by its subscribers on
October 18, 2019. (Id. at € 3.)
On October 15, 2019, Plaintiffs filed a five-count complaint in the District Court for the
District of Connecticut, alleging libel among other harms. (See Compl. [Doc. #1] at 1.) That same
day, Plaintiffs applied for a temporary restraining order to prevent Netflix from streaming The
Laundromat without a disclaimer that “Plaintiffs have never been convicted of money
laundering, tax evasion or any financial crime” and to prohibit Netflix from including the
Page 4 Mossack Fonseca & Co., S.A. logo in its movie. (Pls. Application for Ex Parte Temporary
Restraining Order [Doc. # 2] at 1.)
On October 16, 2019, Netflix filed an appearance and motion to dismiss, contending that
it was not subject to the Court’s personal jurisdiction over it in Connecticut. (Mem. in Support of
Mot. to Dismiss [Doc. # 9-1] at 1). Netflix asked the Court to dismiss Plaintiffs’ Complaint, or, in
the alternative, transfer the case to a proper venue. (Id. at 1.) The Court then ordered an
expedited briefing schedule in light of The Laundromat’s imminent release [Doc. # 17].
II. Discussion
Defendant moves for dismissal “because Plaintiffs do not meet the requirements of the
Connecticut long-arm statute, Conn. Gen. Stat. § 33-929(f), necessary for the Court to exercise
personal jurisdiction over Netflix” and because the exercise of personal jurisdiction would not
“comport with Constitutional due process requirements.” (Def.’s Mem. in Support of Mot. to
Dismiss, at 1.) Defendant also argues that dismissal is appropriate because Connecticut is an
improper venue for this action. (Id. at 7.) In the alternative, Defendant seeks a transfer to the
District Court for the Central District of California, “because the locus of operative facts
concerning The Laundromat is in Los Angeles.” (Id.) Plaintiffs oppose the motion, contending
that Netflix has consented to the Court’s jurisdiction by registering as a foreign corporation with
the State of Connecticut. (Pls.’s Opp. to Mot. to Dismiss [Doc. # 23] at 2.) Notwithstanding their
position on personal jurisdiction, Plaintiffs have offered their consent to a venue transfer as an
alternative to dismissal if jurisdiction is found lacking in Connecticut. (Id. at 16.)
A court must grant a motion to dismiss if it lacks personal jurisdiction over a defendant.
Fed. R. Civ. P. 12(b)(2). In a motion to dismiss for lack of personal jurisdiction under Rule
(b)(2), a plaintiff bears the burden of “mak[ing] a prima facie showing that jurisdiction exists.”
Page 5 SPV Osus Ltd. v. UBS AG, 882 F.3d 333, 342 (2d Cir. 2018). “Prior to discovery, a plaintiff may
defeat a motion to dismiss based on legally sufficient allegations of jurisdiction.” Metro. Life Ins.
Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). All allegations “are to be construed
in the light most favorable to the plaintiff.” Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d, 84 (2d Cir. 2013) (internal quotation marks omitted).
To determine whether personal jurisdiction over a foreign defendant exists, a court “first
look[s] to the long-arm statute of the forum state.” In re Roman Catholic Diocese of Albany, New
York, Inc. 745 F.3d 30, 37 (2d Cir. 2014) (internal citation and quotation marks omitted).
Accordingly, the Court applies Connecticut’s long-arm statute, which provides:
Every foreign corporation shall be subject to suit in this state, by a resident of this
state or by a person having a usual place of business in this state, whether or not
such foreign corporation is transacting or has transacted business in this state and
whether or not it is engaged exclusively in interstate or foreign commerce, on any
cause of action arising as follows: (1) Out of any contract made in this state or to
be performed in this state; (2) out of any business solicited in this state . . 5; (3) out
of the production, manufacture or distribution of goods by such corporation with
the reasonable expectation that such goods are to be used or consumed in this
state... or (4) out of tortious conduct in this state, whether arising out of
repeated activity or single acts, and whether arising out of misfeasance or
nonfeasance.
Conn. Gen. Stat. § 33-929(f) (emphases added). Construing this statute, state courts have
concluded that this “explicit language . . . empowers only ‘a resident of this state’ or a ‘person
having a usual place of business in this state’ to sue a foreign corporation in a Connecticut court.”
Matthews v. SBA, Inc., 149 Conn. App. 513, 555 (2014).
To satisfy the residency or “usual place of business” requirement of Conn. Gen. Stat. § 33-(f), a plaintiff must do more than show it had a “brief and transient presence in Connecticut.”
Nedgam Prods., LLC v. Bizparentz Found., No. 3:09-CV-500 CFD, 2010 WL 3257909, at *6 (D.
Page 6 Conn. Apr. 29, 2010). That is because evidence that a plaintiff had only limited interactions with
the state “would allow virtually any corporation present in the state on a temporary or
provisional basis to claim that [its] ‘usual place of business’ is in this state.” Id. Typically, courts
“have found that a plaintiffs maintenance of a physical site in the state - an address, office, or
retail store — where business is conducted is sufficient” to meet the terms of the Connecticut
long-arm statute. Anderson Trucking Serv., Inc. v. Eagle Underwriting Grp., Inc., No. 3:17-CV- (CSH), 2018 WL 4039326, at *11 (D. Conn. Aug. 23, 2018).
Plaintiffs have not made the necessary showing here. To begin, none of the parties in this
action are residents of Connecticut. All four of the named Plaintiffs reside in Panama. Plaintiffs
make no allegations in their original or amended complaint that they have ever resided in
Connecticut, maintained an office in Connecticut, conducted business in Connecticut, or even
set foot in Connecticut. As such, Plaintiffs have not “satisfied their burden of alleging facts
sufficient for the court to find that they have a usual place of business” or reside in Connecticut.
Matthews, 149 Conn. App. at 560.
Despite acknowledging their own non-resident status, Plaintiffs nonetheless ask that the
Court ignore Connecticut’s long-arm statute and treat Defendant’s registration with the State as a
foreign corporation as demonstrating consent to jurisdiction. (Pls.’s Opp. to Mot. to Dismiss at.) To support their position, Plaintiffs cite Talenti v. Morgan & Bro. Manhattan Storage Co., 113
Conn. App. 845 (2009), for the proposition that when a company files as a foreign corporation
with the Connecticut Business Registry and “authoriz{es] a public official to accept service of
process, [the company] has consented to the exercise of jurisdiction over it by the courts of this
state.” Id. at 854-55.
Page 7 Plaintiffs’ reliance on Talenti is misplaced, as the Second Circuit “hazard[ed] that the
Appellate Court erred” in its interpretation of Connecticut law and concluded that Talenti’s
“commentary is largely dicta; it does not reflect a detailed legislative analysis; it is not the decision
of the state’s highest court; and it does not seriously address any of the due process or other
constitutional concerns that finding such a broad ‘consent’ implicit in registration and
appointment might raise.” Id. at 814 F.3d at 636, 637 n.19. The Second Circuit observed that the
Connecticut business registration statute, Conn. Gen. Stat. § 33-926, lacks any “express language
alerting the potential registrant that by complying with the statute and appointing an agent it
would be agreeing to submit to the general jurisdiction of the state courts.” Id. at 636. It further
explained that Talenti’s interpretation of the Connecticut long-arm statute would render “the
restrictions imposed by § 33-929(f) on the class of plaintiffs entitled to avail themselves of the
long-arm statute . . . meaningless, since for registered corporations the agent’s mere availability
to receive process would suffice.” Id. at 636. Thus, the Second Circuit “construe[d] Connecticut’s
registration statute and appointment of agent provisions not to require registrant corporations
that have appointed agents for service of process to submit to the general jurisdiction of
Connecticut courts.” Id. at 641.
Applying the Second Circuit’s binding construction of the Connecticut long-arm statute
in Brown, the Court concludes that Defendant’s foreign corporation registration with the State of
Connecticut is insufficient to establish personal jurisdiction? Plaintiffs’ other arguments are also

A number of Connecticut trial courts have followed Brown. See Peeples v. State Farm
Mut. Auto. Insur. Co., No. FSTCV186036595S, 2019 WL 4201550, at *7 (Conn. Super. Ct. Aug. 8,); Prout v. Mukul Luxury Boutique Hotel & Spa, No. CV156029341S, 2017 WL 1240047, at
*3 (Conn. Super. Ct. Feb. 28, 2017); Navedo v. State Farm Mut. Auto. Ins. Co., No.
HHDCV156061609S, 2016 WL 1552874, at *3 (Conn. Super. Ct. Mar. 24, 2016). The Court notes
Page 8 unavailing.’ Because Plaintiffs have failed to allege any facts establishing that they reside or
maintain a usual place of business in Connecticut, the Court concludes that it lacks personal
jurisdiction over Defendant. As the Court has determined that personal jurisdiction is wanting
here, it need not address Defendant’s arguments regarding constitutional due process or
improper venue.
Although the Court lacks jurisdiction over Plaintiffs’ action, it nonetheless “may transfer
the case if a transfer would be ‘in the interest of justice.” Nedgam, 2010 WL 3257909, at *7
(quoting Corke v. Sameiet M.S. Song of Nor., 572 F.2d 77, 80 (2d Cir. 1978)); see also SongByrd,
Inc. v. Estate of Grossman, 206 F.3d 172, 179 (2d Cir. 2000) (“[W]hether or not venue was proper,
lack of personal jurisdiction could be cured by transfer to a district in which personal jurisdiction
could be exercised, with the transfer authority derived from either [U.S.C. §] 1406(a) or [S$](a).”). Pursuant to 28 U.S.C. § 1404(a), “a district court may transfer any civil action to any
other district or division where it might have been brought or to any district or division to which

that none have adopted Talenti’s interpretation of Connecticut’s long-arm statute since Brown's
issuance.
For example, Plaintiffs argue that their trademark claim under the Lanham Act confers
jurisdiction here, because their trademark is also protected under the Inter-American
Convention for Trade Mark and Commercial Protection of 1929. Plaintiffs first concede that
because the “Lanham Act, 15 U.S.C. § 1051, does not provide for national service of process...
Connecticut law would determine the jurisdictional parameters.” (Pls.’ Opp. to Mot. to Dismiss,
at 3.) But they reason that because the Inter-American Convention affords broader protection
than the Lanham Act, that treaty confers the “right to enjoin Defendants from infringing
anywhere in the United States and/or in the area of any Member State, and including a right to
seek such a remedy in any court in the United States that has the authority to grant such relief.”
(Pls.’ Opp. to Mot. to Dismiss, at 4.)
However, Plaintiffs cite no provision of the Inter-American Convention for this
expansive proposition.
Page 9 all parties have consented” when doing so is “in the interest of justice” and “[f]or the convenience
of parties and witnesses.”
Defendant has requested transfer to the District Court for the Central District of
California, on the grounds that “C.D. Cal. is where the content and marketing of the Film were
produced and where the Film’s screenwriter resides” (Def.’s Mem. in Support of Mot. to Dismiss,
at 10), and that “Netflix’s headquarters and main office are in California,” (Def.’s Reply to Pls.’s
Opp. [Doc. # 24] at 11). Thus, Defendant is clearly subject to California’s jurisdiction as Netflix
produced the film in the State, is headquartered in the State, and has “obviously consented” to
being sued by Plaintiffs there. (Id. at 11.) Plaintiffs have also conceded that “if this Court decides
not to continue hearing the matter, Plaintiffs would adopt the alternative relief requested by
Defendant, and request consideration of a Transfer to California in the interests of justice.” (Pls.’
Opp. to Mot. to Dismiss, at 16.)
Because this Court lacks jurisdiction over Plaintiffs’ action and because all parties have
consented to transfer to the District Court of the Central District of California, the Court
concludes that such a transfer should be made pursuant to 28 U.S.C. § 1404(a).
III. Conclusion
Accordingly, the Court GRANTS Defendant’s Motion [Doc. # 9]. This action is therefore
transferred to the United States District Court for the Central District of California pursuant to
U.S.C. § 1404. The clerk shall effect the transfer and close the file.
TLIS§0 ORDERED.
fé/ t
i ra . = 7 hee
fing/fond Arterton, U.S.D.J.
Dated at New Haven, Connecticut this 17th day of October 2019.
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