Arista Records v. Sakfield Holding

Citation: Arista Records, Inc. v. Sakfield Holding Co., 314 F.Supp.2d 27 (D.D.C. 2004).

Factual Background
Arista and several other well-known record companies alleged that Sakfield, a company located in Madrid, Spain, which is the owner and operator of the Spanish website Puretunes.com, allowed people in the District of Columbia to download copyrighted musical works without authorization.

Court’s Decision
The judge concluded that the court had specific jurisdiction over Sakfield because Arista produced a declaration by a D.C. resident who claimed he downloaded music files from Puretunes. “A single act by defendant in the jurisdiction can be sufficient to constitute ‘transacting business’ and thereby confer jurisdiction,” opined Judge Lamberth. Even though the transaction took place in cyberspace, this is not enough to ward off jurisdiction.

Arista also established that the court had general jurisdiction over Sakfield, which requires proof that the defendant is “doing business” in the District. Judge Lamberth found that Sakfield’s Puretunes website allowed customers to download music files 24 hours a day, which constitutes “purposeful, active, systematic, and continuous activity,” regardless of whether the residents subscribed to paid plans or not.

But, to determine if Sakfield was “doing business” in the District of Columbia, the judge needed to examine the frequency and volume of the firm’s transactions with District residents.” However, this information was not available because Sakfield destroyed the data stored on its servers, even though it knew litigation was imminent.

Although a computer expert was able to extrapolate some data that showed approximately 241 Puretunes users resided in the District and downloaded approximately 20,000 music files, Sakfield attacked the methodologies used to find this information. Judge Lamberth held that “[d]estruction of evidence raises the presumption that disclosure of the materials would be damaging.” Therefore, he found this evidence sufficient to establish that Sakfield had maintained continuous and systematic contacts with the District of Columbia.

Judge Lamberth also noted that Sakfield failed to give Arista information about credit card transactions for purchases made on the Puretunes website, as the court had previously ordered. Because of Sakfield’s failure to comply with the court order, Judge Lamberth inferred that the credit card records included transactions with D.C. residents, thus holding that Arista met its burden of establishing personal jurisdiction over Sakfield.