United States District Court, N.D. Texas, Dallas Division
HERITAGE CAPITAL CORPORATION, et al. Plaintiffs,
CHRISTIE'S, INC., et al., Defendants.
MEMORANDUM OPINION AND ORDER
A. FITZWATER, UNITED STATES DISTRICT JUDGE
action asserting claims related to an alleged
misappropriation of copyrighted material from www.HA.com
(“HA.com”), defendants Christie's, Inc. and
Collectrium, Inc. (“Collectrium”) (collectively,
“Christie's, ” unless otherwise indicated)
move to dismiss and compel arbitration. Plaintiffs Heritage
Capital Corporation, Heritage Auctioneers & Galleries,
Inc., Heritage Numismatic Auctioneers, Inc., Heritage
Auctions, Inc., Heritage Vintage Sports Auctions, Inc.,
Currency Auctions of America, Inc., and Heritage
Collectibles, Inc. (collectively, “Heritage”)
oppose the motion and move for a preliminary injunction.
Concluding that all of Heritage's claims are arbitrable
under the HA.com Website Use Agreement, the court grants
Christie's' motion to dismiss and compel arbitration,
denies Heritage's motion for a preliminary injunction as
moot, as dismisses this action with prejudice by judgment
operates HA.com, which hosts sales and auctions of
collectibles. Images of the items and detailed descriptions
accompany each sale or auction listing, each of which is
copyrighted. Heritage maintains previously sold listings on
the website, and, as of the filing of its complaint, HA.com
hosted more than 8 million original images related to its
listings. Those who visit and use HA.com for any reason
assent to the Website Use Agreement, which prescribes rules
and regulations for use and contains an arbitration clause
that governs potential disputes.
alleges that Christie's downloaded some or all of
HA.com's listings using an advanced computer code.
Heritage traced this activity to Christie's, and it
discovered that some of the listings downloaded from HA.com
appeared on the Collectrium website.Heritage estimates that
approximately 2.7 million of the approximately 11 million
listings on the Collectrium website came from HA.com.
does not deny that Collectrium posted Heritage listing images
and descriptions on its website. Instead, Christie's
contends that its use does not violate Heritage's
copyright for various reasons, including fair use.
filed the instant lawsuit alleging seven federal and state
claims: copyright infringement, under 17 U.S.C. §§
106 and 501; violation of the Computer Fraud and Abuse Act,
18 U.S.C. § 1030, et seq.; violations of the
Digital Millennium Copyright Act, 17 U.S.C. § 1201,
et seq.; harmful access by computer, under Tex. Civ.
Prac. & Rem. Code Ann. §§ 143.001 and 143.002;
trespass; unfair competition; civil conspiracy; and breach of
moves to dismiss and compel arbitration based on the
arbitration clause in the HA.com Website Use Agreement.
Heritage opposes the motion and moves for a preliminary
injunction enjoining Christie's, inter alia,
from posting the allegedly infringing
court first considers the motion of Christie's to dismiss
and compel arbitration of all of Heritage's claims.
2 of the Federal Arbitration Act (“FAA”) provides
that written agreements to arbitrate controversies arising
out of an existing contract “shall be valid,
irrevocable, and enforceable, save upon such grounds as exist
at law or in equity for the revocation of any
contract.” 9 U.S.C. § 2. The FAA “leaves no
place for the exercise of discretion by a district court, but
instead mandates that district courts shall direct
the parties to proceed to arbitration on issues as to which
an arbitration agreement has been signed.” Dean
Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985)
(citing 9 U.S.C. §§ 3-4) (emphasis in original).
When considering a motion to compel arbitration, the court
engages in a two-step process. First, the court determines
“whether the parties agreed to arbitrate the
dispute.” Webb v. Investacorp, Inc., 89 F.3d
252, 258 (5th Cir. 1996) (per curiam) (citation omitted).
“This determination involves two considerations: (1)
whether there is a valid agreement to arbitrate between the
parties; and (2) whether the dispute in question falls within
the scope of that arbitration agreement.” Id.
(citations omitted). Second, the court decides
“‘whether legal constraints external to the
parties' agreement foreclosed the arbitration of those
claims.'” Id. (quoting Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S.
614, 628 (1985)). “If there is a valid agreement to
arbitrate, and there are no legal constraints that foreclose
arbitration, the court must order the parties to arbitrate
their dispute.” Celaya v. Am. Pinnacle Mgmt.
Servs., LLC, 2013 WL 4603165, at *2 (N.D. Tex. Aug. 29,
2013) (Fitzwater, C.J.). Because of the strong presumption in
favor of arbitration, the party opposing a motion to compel
arbitration bears the burden of proving that the agreement is
invalid or that the claims are outside the scope of the
agreement. Carter v. Countrywide Credit Indus.,
Inc., 362 F.3d 294, 297 (5th Cir. 2004).
court first considers whether there is a valid agreement
between the parties to arbitrate.
Website Use Agreement contains the following provision:
Choice of Law and Venue for Dispute Resolution
By Your use of the website you agree that any claim, dispute,
or controversy in connection with Heritage and its affiliates
a. if presented by a consumer, be exclusively heard by, and
the parties consent to, exclusive in personam jurisdiction in
the State District Courts of Dallas County, Texas. THE
PARTIES EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY. Any
appeals shall be ...