United States District Court, W.D. North Carolina, Charlotte Division
C. Mullen United States District Judge
MATTER is before the Court on Defendant's Motion
to Dismiss (Doc. No. 13). For the following reasons, this
Motion is denied.
Viper Publishing, LLC (“Viper”), is a Nevada
limited liability company with its principal place of
business in North Carolina. Viper is a digital entertainment
company. Defendant Howard Bailey, Jr. (“Bailey”),
is a musical recording artist and performer who is
professionally known as “Chingy.” The owner of
Viper is Leslie Charles King II (“King”). King is
a licensed attorney in North Carolina, and King previously
provided “management services” to Bailey pursuant
to an oral agreement (the “Management
to the Complaint, Viper and Bailey entered into a Purchase
Agreement on April 25, 2014. Under the Purchase Agreement,
Viper acquired (among other things) all of Bailey's
right, title, and interest to any digital performance
royalties for the transmission and reproduction of sound
recordings by Bailey. SoundExchange, a nonprofit collective
management organization that collects and distributes digital
performance royalties, managed royalties on behalf of Bailey.
Up until April 2017, Viper received all of Bailey's
SoundExchange royalties pursuant to the Purchase Agreement.
In April 2017, Bailey changed the bank account information
applicable to the SoundExchange recordings in order to route
royalty payments to himself, instead of to Viper.
sent a Demand Letter to counsel for Bailey on April 12, 2017,
and when Bailey refused to comply, Viper filed a Complaint on
June 9, 2017, alleging five counts of breach of contract and
seeking relief in the form of liquidated damages,
attorney's fees and costs, and a declaratory judgment.
Viper properly served its Complaint on Bailey on or before
August 21, 2017. When Bailey did not timely answer, Viper
moved for and received an entry of default, and then
subsequently moved for a default judgment. Bailey then made
an appearance through counsel and moved to set aside the
entry of default, which this Court granted.
moved to set aside the entry of default, Bailey
simultaneously filed this Motion to Dismiss for lack of
STANDARD OF REVIEW
personal jurisdiction is properly challenged under Rule
12(b)(2), the jurisdictional question is to be resolved by
the judge, with the burden on the plaintiff ultimately to
prove grounds for jurisdiction by a preponderance of the
evidence.” Carefirst of Md., Inc. v. Carefirst
Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir.
2003). “If jurisdiction turns on disputed facts, the
court may resolve the challenge after a separate evidentiary
hearing, or may defer ruling pending receipt at trial of
evidence relevant to the jurisdictional question.”
Co Star Realty Information, Inc. v. Meissner, 604
F.Supp.2d 757, 763 (D. Md. 2009) (citing Combs v.
Bakker, 886 F.2d 673, 676 (4th Cir. 1989)). If “a
district court decides a pretrial personal jurisdiction
motion without conducting an evidentiary hearing, the
plaintiff need only make a prima facie showing of personal
jurisdiction.” Carefirst, 334 F.3d at 396. In
determining if there is jurisdiction, “the court must
take all disputed facts and reasonable inferences in favor of
the plaintiff.” Id.
only basis for personal jurisdiction that Viper asserts in
this case is the forum selection clause of the Purchase
Agreement. In ¶ 6.2(a) of the Agreement, the parties
agreed to “irrevocably submit to the jurisdiction of
the North Carolina courts (state and federal) in any action
or proceeding involving a controversy arising out of this
Agreement and irrevocably waive any right to contest the
jurisdiction or power or decision of that court other than
appropriate appellate courts.”
selection clauses act as a waiver to personal jurisdiction
objections, Consulting Engineers Corp. v.
Geometric Ltd., 561 F.3d 273, 281 n.11 (4th Cir. 2009),
and forum selection clauses are prima facie valid, M/S
Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972).
The presumptive validity of forum selection clauses can only
be overcome “by a clear showing that they are
‘unreasonable' under the circumstances.”
Allen v. Lloyd's of London, 94 F.3d 923, 928
(4th Cir. 1996). There are four ways for forum selection
clauses to be unreasonable:
(1) their formation was induced by fraud or overreaching; (2)
the complaining party ‘will for all practical purposes
be deprived of his day in court' because of the grave
inconvenience or unfairness of the selected forum; (3) the
fundamental unfairness of the chosen law may deprive the
plaintiff of a remedy; or ...