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DATABASE AMERICA, INC. v. BELLSOUTH ADVERTISING &

June 15, 1993

DATABASE AMERICA, INC. and ED BURNETTE CONSULTANTS, INC., Plaintiffs,
v.
BELLSOUTH ADVERTISING & PUBLISHING CORP., Defendant.



The opinion of the court was delivered by: LECHNER

 LECHNER, District Judge

 Currently before the court is the motion of plaintiffs Database America, Inc. ("Database") and Ed Burnette Consultants, Inc. ("Burnette") (collectively, the "Plaintiffs") for reconsideration, pursuant to Rule 12I of the General Rules of the District Court For the District of New Jersey ("Local Rule 12I"), of the Letter-Opinion and Order, filed 28 April 1993 (the "28 April 1993 Decision"), transferring this case to the United States District Court for the Northern District of Georgia pursuant to 28 U.S.C. § 1406(a). *fn1"

 For the reasons that follow, the motion for reconsideration is denied.

 Facts

 A. Background

 The facts of this case are set forth at length in the 28 April 1993 Decision. See 28 April 1993 Decision at 2-21. What follows below are those facts relevant to the motion for reconsideration.

 Database and Burnette are related New Jersey corporations *fn2" with their principal and only places of business located in Montvale, New Jersey. Complaint (the "Complaint") filed 26 August 1992; 28 April 1993 Decision at 2. Since 1974, Burnette has been engaged in the business of preparing and selling lists of various data. Complaint, P 5; 28 April 1993 Decision at 2-3. These lists, which are prepared in Montvale with the aid of a computer database, contain factual information on businesses in the United States, such as names, addresses, telephone numbers and advertising data. 28 April 1993 Decision at 3. Plaintiffs concede that some of this factual information has been taken from yellow pages in directories published by BAPCO and by other unrelated companies. Id.; Complaint, P 5. Neither Database nor Burnette actually publish or has published its own yellow page directories. 28 April 1993 Decision at 3.

 BAPCO is a Georgia corporation with its principal place of business in Atlanta, Georgia. *fn3" Id.; Complaint, P 2. BAPCO has no office, telephone or bank account in New Jersey. 28 April 1993 Decision at 3. It does not maintain any sales, manufacturing or other type of office or employees in New Jersey. Id. BAPCO further alleges:

 
BAPCO does not hold itself out to the public as doing business in New Jersey and has not qualified with the Secretary of State's office in New Jersey to do business within the state. BAPCO does not have a designated agent for the receipt of service of process in New Jersey and does not pay taxes in the state. BAPCO does not send any goods into New Jersey, nor does BAPCO perform any services within the state, including the sale of advertising for any of its yellow pages directories. Finally, BAPCO does not solicit sales of advertisements for its yellow pages directories outside the southeastern United States.

 Id. at 3-4.

 Since 1984, BAPCO has been in the business of "creating, compiling, publishing and distributing classified telephone directories (Yellow Pages) in nine southeastern states." *fn4" Id. at 4. Those states are Georgia, Florida, Tennessee, North Carolina, South Carolina, Alabama, Louisiana, Mississippi and Kentucky. Id. BAPCO does not create, publish or distribute any yellow pages directories for use by telephone subscribers in New Jersey. *fn5" Id. at 4.

  Annually, BAPCO publishes more than five hundred different telephone directories, including yellow pages. *fn6" Id. at 4. BAPCO asserts that, since 1984, it has protected its yellow pages directories from unauthorized use by copyrighting the directories. Id. at 5. BAPCO also sells advertising space and business listings in the yellow pages directories which it publishes. Id.

 On 20 July 1992, BAPCO sent a letter (the "Cease-and-Desist Letter") to Database. Id. at 19; see also Complaint, Ex. A (copy of Cease-and-Desist Letter). According to BAPCO, the Cease-and-Desist Letter was prompted when, in early 1992, BAPCO received a Database Quarterly Report stating that Database "had just completed compiling the [Database] Yellow Pages File from over 4,200 yellow pages directories." 28 April 1993 Decision at 19. The Cease-and-Desist Letter asserted that Database was violating copyright law by using BAPCO's yellow pages to compile its lists and insisted that Database "immediately cease and desist from this type of activity." Id. at 20. The Cease-and-Desist Letter also asserted that BAPCO's decision was supported by the Eleventh Circuit's ruling in Bellsouth Advertising and Publishing Corp. v. Donnelley Information Publishing, Inc., 933 F.2d 952 (11th Cir. 1991). *fn7" Id. According to Plaintiffs, prior to the Cease and Desist Letter, BAPCO never asserted Plaintiff's activities were an infringement of any copyrights. Complaint, P 9.

 On 26 August 1992, rather than respond to the Cease-and-Desist Letter, Plaintiffs filed the Complaint, seeking a declaratory judgment under the Copyright Act, 17 U.S.C. §§ 101 et seq., that, inter alia, (1) Plaintiffs have not infringed on any copyright or other right of BAPCO "by reason of Plaintiffs' preparation and sale of lists containing information taken from the yellow pages in the directories published by BAPCO" and (2) Plaintiffs' presentation and sale of their lists constitute a fair use of the information claimed by BAPCO to be copyrighted. Complaint at 5. Plaintiffs allege, inter alia, that BAPCO does not possess any valid copyright to the information which Plaintiffs extract from BAPCO's yellow pages and include in their lists. Id., PP 19-25.

 According to Plaintiffs, the lawsuit was brought

 
because the Cease and Desist Letter failed to state any willingness to negotiate with Database . . . and, instead, insisted that Database . . . "immediately cease and desist" from preparing its lists. . . .

 28 April 1993 Decision at 21. Moreover, Plaintiffs argue:

 
[The Cease-and-Desist Letter] presented our companies with an unreasonable risk in the absence of a quick and decisive decision as to our rights. The threat casts a shadow over all that these companies do until our rights are resolved. It impedes planning capabilities in the area of marketing, technological investment, expansion, personnel hiring and others. . . . It is imperative to the well-being, even survival of these companies that a quick decision be rendered in this case.

 Id.

 B. The 28 April 1993 Decision

 In the 28 April 1993 Decision, it was determined that, for the purposes of this case, personal jurisdiction could not be asserted over BAPCO in New Jersey. Id. at 23-42. Therefore, venue was determined to be improper under 28 U.S.C. § 1391(b)(1). See 28 April 1993 Decision at 42. Because personal jurisdiction was found to be lacking over BAPCO, the 28 April 1993 Decision did not consider the argument made by Plaintiffs that venue was appropriate under 28 U.S.C. § 1391(b)(2). See 28 April 1993 Decision at 42-44. The 28 April 1993 Decision states:

 
Plaintiffs argue venue is proper in New Jersey under 28 U.S.C. § 1391(b)(2) because this is the place where a substantial part of the events giving rise to the cause of action occurred. Opp. Brief at 25-26. Then, without citation to any authority, Plaintiffs argue that "if venue is proper under either Section 1391(b)(2) or Section 1391(b)(1), the court must deny [BAPCO's] motion to transfer under Section 1406(a)." Id. at 25 (emphasis in original). . . .
 
Even if venue were technically proper in this district under 28 U.S.C. § 1391(b)(2), this court lacks personal jurisdiction over BAPCO. *fn8" This being the case, a finding of proper venue under Section 1391(b)(2) is irrelevant. BAPCO can neither be compelled to defend this action in New Jersey nor is it subject to the jurisdiction of this court.
 
Accordingly, faced with the choice of dismissing this action for lack of personal jurisdiction or transferring the case to Georgia, "interests of justice" dictate that transfer is appropriate pursuant to 28 U.S.C. § 1406(a). *fn9" As the Supreme Court noted in Goldlawr, Section 1406(a) exists to "remove whatever obstacles may impede an expeditious [and] orderly adjudication of cases on their merits." 369 U.S. at 466; accord IUE AFL-CIO Pension Fund v. Locke Machine Co., 726 F. Supp. 561, 572 (D.N.J. 1989) (same). Thus, in the absence of personal jurisdiction over ...

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