Yoon v. Lee

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

___________________________________

)

HYEWOONG YOON, )

)

Plaintiff, )

) Consolidated Civil Actions

v. ) No. 19-10278-PBS

) No. 19-10280-PBS

SEYEON LEE, JUHYUNG LEE, and ) No. 19-10281-PBS

KOREAN BROADCASTING SYSTEM, )

)

Defendants. )

______________________________ )

MEMORANDUM AND ORDER

December 20, 2019

Saris, C.J.

INTRODUCTION

This dispute arises out of a television broadcast aired in

South Korea and posted on the internet about Hyewoong Yoon and

his father, who is the Chief Executive Officer of an

international Korean restaurant company. Yoon alleges that

Korean Broadcasting System (“KBS”), and its employees, Seyeon

Lee and Juhyung Lee, unlawfully wiretapped him in Massachusetts

and aired the recordings on various internet sites watched in

the United States. He asserts claims for violation of the

Massachusetts Wiretapping Statute (Count I), defamation (Count

II), and commercial disparagement, injurious falsehood, and

trade libel (Count III).

Yoon originally filed three separate lawsuits against KBS,

Seyeon Lee, and Juhyung Lee. The Court consolidated all three

cases into this action on June 3, 2019. Prior to the

consolidation, Defendants individually filed motions to dismiss

all three claims for lack of subject matter jurisdiction. All

three motions sought to dismiss the claims based on the Foreign

Sovereign Immunities Act and the doctrine of forum non

conveniens. Juhyung Lee also moved to dismiss the claims on the

basis that the Court lacks personal jurisdiction over him.

After hearing, the Court ALLOWS IN PART and DENIES IN PART

Defendants’ motions to dismiss.

FACTUAL BACKGROUND

The following factual background is drawn from the

complaint and evidence presented by the parties. In deciding a

motion to dismiss for lack of subject matter jurisdiction

pursuant to Fed. R. Civ. P. 12(b)(1), the Court may consider

evidence outside of the complaint. See Valentin v. Hosp. Bella

Vista, 254 F.3d 358, 363-64 (1st Cir. 2001).

I. The Parties

Yoon is a 22-year-old South Korean citizen, living

temporarily in Massachusetts on an E-2 Visa.1 Yoon’s father,

1 The Employee E-2 visa is granted to employees of a

corporation of the same nationality of the principal foreign

employer, who meet the definition of “employee” under relevant

HongGeun Yoon (“Yoon Sr.”), is the Chief Executive Officer of

BB.Q Chicken (“BB.Q”). BB.Q has approximately 300 restaurants in

over 50 countries, including one location in Allston,

Massachusetts.

KBS is the public broadcasting network of the Republic of

Korea (“South Korea”). The South Korean government founded KBS,

as its sole capital investor, pursuant to Article 43 of the

Broadcasting Act. The Broadcasting Act established KBS to

provide “a culture of fair and objective broadcasting in Korea,”

and to deliver effective broadcasting both at home and abroad.

Dkt. No. 6 at 2. Though KBS functions much like a private media

company, the South Korean government retains significant

influence over its operations. KBS annually submits its

operating budget and provides financial statements to the

National Assembly (South Korea’s legislative body).

Additionally, the Broadcasting Act provides that the South

Korean president shall appoint KBS’s president. The president of

South Korea also retains the final appointment power of KBS’s

Board of Directors, after the Korean Communications Commission

nominates prospective appointees. Though KBS does receive

government subsidies, it also generates revenue from the

law, and are either engaged in executorial or managerial duties,

or have special qualifications.

traditional sources relied on by private media companies. KBS

accepts regular commercial advertisers, albeit subject to the

government’s pre-approval. KBS charges its advertisers fees that

vary according to the visibility of the desired timeslot. KBS’s

Board of Directors determines the licensing fees, though these

fees are ultimately subject to approval by the South Korean

National Assembly.

KBS takes steps to limit potential political influence. For

example, KBS prohibits its Board of Directors from being

actively affiliated with political parties and, during the

appointment process, anyone who has been active within the past

three-years is subject to disqualification. While the company

submits operational plans and financial accounting to the

government, KBS formulates those plans independently.

Seyeon Lee is a news reporter for KBS, working in the

Social Affairs Division 2, News and Sports Department. Juhyung

Lee is her supervisor and the manager of that department.

II. The KBS Broadcast

Yoon moved to the United States in 2007. For approximately

nine-years, he lived with a guardian, Hyunwook Joo (“Joo”), in

New Jersey, until he moved to Massachusetts in 2016. At some

point in 2018, KBS became aware of allegations that Yoon Sr. was

involved in an embezzlement scheme, wherein Yoon Sr. allegedly

misappropriated BB.Q funds to finance his son’s education and

living expenses. In an attempt to investigate this accusation,

KBS dispatched Seyeon Lee to the United States on October 25,

2018.

She first visited New Jersey, where she interviewed Yoon’s

former guardian. In the interview, Joo discussed his experience

caring for Yoon and relayed his familiarity with the alleged

embezzlement scheme. After this interview, Seyeon Lee traveled

to Boston, hoping to locate Yoon himself. While there, she

visited Harvard University, where Yoon was once enrolled in its

Extension School. In a recorded exchange with a school employee,

she inquired into whether the school would have provided Yoon

with a student visa. The school employee confirmed that Harvard

University does not provide visas to Extension School students.

Ultimately, KBS concluded that Yoon resides in the United States

on an E-2 Visa. KBS reported that it had obtained this document,

which listed Yoon as a “necessary” employee of BB.Q and referred

to him as a full-time director of BB.Q.

Seyeon Lee visited BB.Q’s Allston location on two

consecutive days. Yoon was absent on both occasions. While

there, Seyeon Lee recorded an interview with two employees,

neither of whom had met Yoon or observed him at the restaurant.

One of these employees did note, however, that he had previously

heard about Yoon.

Seyeon Lee then called Yoon. During their conversation,

Seyeon Lee confronted Yoon about his absence from work. She also

probed a discrepancy between his E-2 Visa, which listed him as

an employee in New Jersey, and his statements that he currently

lives in Boston. Unbeknownst to Yoon, Seyeon Lee secretly

recorded the entire phone call.

KBS later featured this recording, and the two other

recorded interviews, as part of the first video in a two-part

news special spotlighting the alleged embezzlement scheme. KBS

broadcasted both videos online through several different

websites, including its own site and YouTube. The first video,

the one at issue before this Court, garnered approximately one

million online views through various web outlets.

III. The Korean Litigation

On November 9, 2018, before KBS aired the first video, Yoon

and Yoon Sr. applied for a preliminary injunction in South Korea

to prevent the broadcast from airing. The Seoul Southern

District Court granted a conditional injunction, which allowed

KBS to broadcast its video provided the news special accurately

reflected both parties’ viewpoints. After the video aired on

November 20, 2018, the Yoons filed a lawsuit in South Korea

alleging that KBS had violated the conditional injunction

ruling. The Seoul Southern District Court dismissed that suit,

which the Yoons have contested in a pending appeal. On November

20, 2018, the Yoons also filed a defamation and libel suit in

South Korea against all three Defendants in connection with the

broadcast (the “South Korean Action”). As damages, they sought

KRW 3 billion (approximately $2.5 million) from the defendants.

In addition to their civil suit, the Yoons filed a separate

defamation action against the defendants under the Korean

Criminal Code. The criminal matter is currently under

investigation by Korean authorities. Relatedly, Yoon Sr. is the

subject of an ongoing South Korean criminal investigation for

allegedly misappropriating BB.Q’s funds.

DISCUSSION

I. The Foreign Sovereign Immunities Act

Defendants argue that this Court lacks subject matter

jurisdiction under the Foreign Sovereign Immunities Act (“FSIA”)

because KBS is the public broadcasting network of South Korea

and immune from suit in the United States.2

“[T]he FSIA provides the sole basis for obtaining

jurisdiction over a foreign state in federal court.” Argentine

Republic v. Amerada Hess Shipping Co., 488 U.S. 428, 439 (1989).

“It establishes a presumption of foreign sovereign immunity from

2 In the initial complaints, Plaintiff asserted subject matter

jurisdiction based on diversity, but the Court does not have

jurisdiction under 28 U.S.C. § 1332 because all parties are

foreign citizens. The Court, however, does have jurisdiction

under 28 U.S.C. § 1330(a).

the jurisdiction of the courts of the United States unless one

of its enumerated exceptions to immunity applies.” Universal

Trading & Inv. Co. v. Bureau for Representing Ukr. Interests in

Int’l and Foreign Courts, 727 F.3d 10, 16 (1st Cir. 2013). This

immunity extends to foreign officers and agents when the foreign

instrumentality is a required party or when the action against

the agent in his official capacity should be treated as an

action against the foreign state itself as the real party in the

law. See Samantar v. Yousuf, 560 U.S. 305, 324-325 (2010).

Although numerous circuits have addressed the burdens of the

proof and production when a defendant raises and FSIA defense,

the First Circuit has not yet done so. Still, it has suggested

that a burden-shifting framework may be appropriate. See

Universal Trading & Inv. Co., 898 F. Supp. 2d 301, 309 (D. Mass.

2012), aff’d, 727 F.3d 10 (1st Cir. 2013) (assuming, without

deciding, that a burden-shifting framework applies.). Thus, the

Court will use the burden-shifting framework set out in Virtual

Countries, Inc. v. Republic of South Africa, 300 F. 3d 230, 242

(2d Cir. 2002).

Yoon does not dispute that KBS has presented a prima facie

case that it is an instrumentality of the Republic of Korea as

defined by 28 U.S.C. § 1603(b) and that the two individual

defendants are agents of KBS. He argues instead that he has met

his burden of producing evidence that KBS’s activities qualify

under the “commercial activity” exception pursuant to

§ 1605(a)(2).3 Under the commercial activity exception, a foreign

state is not immune from the jurisdiction of the United States

courts when its actions are:

Based [1] upon a commercial activity carried on in

the United States; or [2] upon an act performed in

the United States in connection with a commercial

activity of the foreign state elsewhere; or [3] upon

an act outside the territory of the United States

[and] in connection with a commercial activity . . .

[that] causes a direct effect in the United States.

28 U.S.C. § 1605(a)(2).

Yoon’s wiretapping claim satisfies the second clause of the

commercial activity exception. All of the elements necessary for

Yoon to recover under his wiretapping claim are “based upon”

acts that occurred in the United States. See OBB Personenverkehr

v. Sachs, 136 S. Ct. 390, 396 (2015) (construing the “based upon

language to require a plaintiff to establish “those elements of

a claim that, if proven, would entitle a plaintiff to relief

under his theory of the case[]”). Equally apparent is that

Seyeon Lee conducted the secret recording “in connection” with

KBS’s commercial activity of producing the video. See Anglo-

Iberia Underwriting Mgmt. v. P.T. Jamsostek, 600 F.3d 171, 178

(2d 2010) (discussing the substantive connection required to

3 He also argues that the “tortious activities exception”

under § 1605(a)(2) applies. The Court does not reach this

argument because it concludes that the commercial activities

exception provides jurisdiction.

satisfy the “in connection” with language). KBS featured the

recording as a central component of its investigatory news

special, forming a direct causal link between the act performed

in the United States and its commercial activity, the news

broadcast. See 28 U.S.C. § 1603(d)(providing that commercial

activity “shall be determined by reference to the nature of the

course of conduct or particular transaction or act, rather than

by reference to its purpose[]”); see also Bryks v. Can. Broad.

Corp., 906 F. Supp. 204, 207-8 (S.D.N.Y. 1995)(state-sponsored

foreign news agency’s broadcast was a commercial activity

because these types of broadcasts are ”customarily carried on

for profit” by private individuals and corporations, despite the

corporation not earning profits and relying almost exclusively

on state subsidies for funding); L.A. News Serv. v. Conus

Commc’ns Co., 969 F. Supp. 579, 585, 586 (C.D. Cal.

1997)(determining that television broadcasting is still a

commercial activity regardless of whether a state-sponsored

media agency accepted advertising or earned profits because

“many private parties do ‘trade and traffic’ in the television

news business”). Yoon therefore has satisfied his burden of

producing evidence that the second clause of the FSIA’s

commercial activity exception applies to his wiretapping claim.

KBS has not introduced any evidence to the contrary.

Yoon’s defamation and libel claims present a closer

question.4 He contends that the first clause of the commercial

activity exception applies, emphasizing that KBS both recorded

and later broadcast the interviews in the United States.

Defendants counter that Yoon has failed to meet his burden of

demonstrating that the “entire tort” occurred within the United

States. Jerez v. Republic of Cuba, 775 F.3d 419, 424 (D.C. Cir.

2014) (noting that “[t]he law is clear that the entire tort—

including not only the injury but also the act precipitating

that injury—must occur in the United States” (internal

quotations omitted)). But Yoon has established that KBS, through

Juhyung Lee and Seyeon Lee, made the recordings in United States

and later broadcast them here. Atlantica Holdings v. Sovereign

Wealth Fund Samruk-Kazyna JSC, 813 F.3d 98, 114 n.9 (2d Cir.

2016) (stating that where harm is done to the reputation of a

person, the place of wrong is where the defamatory statement is

communicated). Specifically, Yoon alleges that KBS broadcast the

video containing the recordings on its website and YouTube. He

also has submitted evidence that KBS has an annual United

States’ viewership of two and a half million people, KBS’s

4 Defendants had argued that claims for defamation and trade

libel were barred by 28 U.S. C. § 1605(a)(5)(B), but the First

Circuit has referred to this exception as the “noncommercial

tort exception.” Merlini v. Canada, 926 F.3d 21, 25 (1st Cir.

2019).

second largest foreign audience, and the video itself has

received over one million views on the internet. Therefore,

there is sufficient evidence for the Court to infer that by

placing the video on its website and YouTube, KBS broadcasted

the video in the United States. KBS has not rebutted this

evidence, and has not met its burden of establishing, by a

preponderance of the evidence, that it is immune from suit. See

Virtual Countries, Inc., 300 F.3d at 241 (noting that the

“ultimate burden of persuasion . . . remains with the alleged

foreign sovereign”).

Accordingly, the Court has jurisdiction over Yoon’s claims

pursuant to the FSIA’s commercial activity exception.

II. Forum Non Conveniens

Defendants argue that even if the FSIA does not bar Yoon’s

claims, the Court still must dismiss them pursuant to the

doctrine of forum non conveniens.

Forum non conveniens permits dismissal of a case, even if

the Court has jurisdiction, when “an alternative forum is

available in another nation which is fair to the parties and

substantially more convenient for them or the courts.” Mercier

v. Sheraton Int’l, Inc., 981 F.2d 1345, 1349 (1st Cir. 1992).

“When a defendant moves for dismissal on forum non conveniens

grounds, it bears the burden of showing both that an adequate

alternative forum exists and that considerations of convenience

and judicial efficiency strongly favor litigating the claim in

the alternative forum.” Iragorri v. Int’l Elevator, Inc., 203

F.3d 8, 12 (1st Cir. 2000). Provided an adequate alternative

forum is available, the Court must also analyze the private and

public interest factors. Dismissal is only proper if weighing

the private and public interest factors “strongly favor[s]”

resolving the claims in the alternative forum. Id.; see also

Adelson v. Hananel, 510 F.3d 43, 54 (1st Cir. 2007) (declining

to dismiss where the balance of factors was “in equipoise”).

While a plaintiff receives “some degree of deference for his

original choice of forum,” a foreign plaintiff’s decision

receives less deference than an American plaintiff’s choice

because “the assumption that the chosen forum is appropriate [is

in such cases] ‘less reasonable.’” Sinochem Int’l Co. v.

Malaysia Int’l Shipping Corp., 549 U.S. 422, 430 (2007) (quoting

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981)).

a. Defamation and Trade Libel Claims (Counts II and III)

The South Korean Action is proof that there is an

alternative forum for Yoon’s claims. South Korea has no

statutory cap on damages for civil defamation suits. Yoon has

sought over $2.5 million in the South Korean civil action which,

when compared to remedies that other courts have deemed

adequate, appears more than sufficient. See Loya v. Starwood

Hotels & Resorts Worldwide, Inc., 583 F.3d 656, 664, 666 (9th

Cir. 2009) (holding that Mexico provided an adequate forum even

though it capped wrongful death damages at $12,000 to $13,000);

Gonzalez v. Chrysler Corp., 301 F.3d 377, 380-82 (5th Cir. 2002)

(finding Mexico to be an adequate forum even though it limited

recovery for the loss of a child’s life at $2,500). Accordingly,

South Korea provides an adequate alternative forum for Yoon’s

defamation and libel claims.

With respect to the private interest factors, the ease of

access to proof will be far greater in South Korea. Critical to

resolving the defamation and libel claims is whether Yoon Sr. in

fact misappropriated BB.Q funds, which will depend primarily on

South Korea-based witnesses. Yoon objects that his former

guardian in the United States, Joo, also will be a key witness.

But he is only one witness. Based on the number of foreign

witnesses required to resolve these claims, and factoring in the

cost of providing translators for those witnesses, the Court

concludes the trial costs also would likely be greater in the

United States.

Likewise, the public interest factors warrant dismissal of

the defamation and trade libel claims. See Iragorri, 203 F.3d at

12. This forum has less interest in resolving a defamation

action between foreign citizens the substance of which involves

a foreign corporation’s alleged embezzlement scheme. Moreover,

the Court potentially would be faced with difficult questions

regarding the application of foreign law. Most troublesome is

the ongoing South Korean criminal investigation into Yoon Sr.

for his involvement in the alleged embezzlement, the outcome of

which may be determinative to the defamation and libel claims.

The Court would need to decide what weight to afford the outcome

of Yoon’s criminal defamation suit in South Korea. This would

present difficult questions regarding foreign law and test

principles of international comity. See Sinochem Int’l Co., 549

U.S. at 435.

Accordingly, although Yoon’s choice of forum is entitled to

some deference, Defendants have met their burden of

demonstrating with respect to the defamation and trade libel

claims that “considerations of convenience and judicial

efficiency strongly favor [resolving] the claim in the

alternative forum.”5 Iragorri, 203 F.3d at 12.

b. Wiretapping Claims

The analysis of Yoon’s wiretapping claims is different

because the alleged injury, an invasion of privacy,

fundamentally differs from the reputational damages alleged in

connection with the defamation and libel claims. See Mass. Gen.

Laws ch. 272 § 99Q (“Any aggrieved person whose oral or wire

5 Because the Court is dismissing the defamation and trade

libel claims under the doctrine of forum non conveniens, the

Court does not address the Defendants’ other arguments

concerning these claims.

communications were intercepted . . . or privacy were violated

by means of an interception . . . shall have a civil cause of

action” (emphasis added)). It is essential for the adequate

alternative forum analysis that the foreign court be capable of

addressing the type of claim asserted in the domestic suit. See

Interface Partners Int’l Ltd. v. Hananel, 575 F.3d 97, 103 (1st

Cir. 2009) (holding that an adequate alternative forum existed

because Israel’s courts address the sort of breach of contract

claim that the plaintiff asserted in the United States); accord

Associação Brasileira de Medicina de Grupo v. Stryker Corp., 891

F.3d 615, 620 (6th Cir. 2018) (considering in its adequate

alternative forum analysis whether the foreign court could

address the type of harm alleged). An alternative forum is

inadequate if it “does not permit litigation of the subject

matter of the dispute.” See Mercier, 981 F.2d at 1350 (quoting

Piper, 454 U.S. at 265 n.22). It is undisputed that South Korean

law does not recognize a civil cause of action for the non-

consensual recording by one party of a phone conversation.

Therefore, South Korea does not afford an adequate alternative

forum for Yoon’s wiretapping claims, and the Court declines to

dismiss that claim on the basis of forum non conveniens.

III. Personal Jurisdiction

Juhyung Lee also argues that the wiretapping claim against

him should be dismissed for lack of personal jurisdiction. Yoon

counters that Seyeon Lee’s contacts with Massachusetts can be

imputed to Juhyung Lee because she was his agent. It is

undisputed that Seyeon Lee’s secret recording of Yoon in

Massachusetts subjects her to the Court’s personal jurisdiction.

“For purposes of personal jurisdiction, the actions of an agent

may be attributed to the principal.” Daynard v. Ness, Motley,

Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 55 (1st Cir.

2002). “Whether or not an agent is initially authorized to act

on behalf of a principal, the agent’s actions may be attributed

to the principal . . . if the principal later ratifies the

agent’s conduct.” Daynard, 290 F.3d at 55. Ratification can be

demonstrated through “an agent’s conduct after the fact, by

‘acquiesc[ing] in the agent’s action, or fail[ing] promptly to

disavow the unauthorized conduct after disclosure of material

facts.’” Fergus v. Ross, 79 N.E.3d 421, 424 (Mass. 2017)

(quoting Licata v. GGNSC Malden Dexter LLC, 2 N.E.3d 840, 847

(Mass. 2014). In KBS’s answer to Plaintiff’s interrogatories, it

concedes that Juhyung Lee authorized Seyeon Lee’s trip to

Massachusetts and subsequently assisted with the production of

the broadcast that included the illicit recording. This is

sufficient for the Court to exercise personal jurisdiction over

Juhyung Lee on the basis of Seyeon Lee’s contacts with the

forum. See Daynard, 290 F.3d at 63.

IV. Abstention

Finally, Defendants contend that if any claims survive, the

Court nonetheless should dismiss or stay the case in deference

to the South Korean Action. Neither the First Circuit nor the

Supreme Court has addressed whether and under what circumstances

a federal court may abstain from exercising its jurisdiction in

deference to a related action pending in a foreign jurisdiction.

Rapid Pharm. AG v. Kachroo, 180 F. Supp. 3d 96, 100 (D. Mass.

2015) (discussing abstention doctrine in the context of

international parallel litigation). But this Court previously

addressed these questions in Goldhammer v. Dunkin’ Donuts, Inc.,

59 F. Supp. 2d 248 (D. Mass. 1999).

“Federal courts have the inherent power to stay an action

based on the pendency of a related proceeding in a foreign

jurisdiction,” and “the policies underpinning international

abstention . . . are rooted in concerns about international

comity.” Id. at 251-252. International comity is “more a matter

of grace than a matter of obligation,” and is a “doctrine that

counsels voluntary forbearance when a sovereign which has a

legitimate claim to jurisdiction concludes that a second

sovereign also has a legitimate claim to jurisdiction under

principles of international law.’” Id. (quoting United States v.

Nippon Paper Indus. Co., 109 F.3d 1, 8 (1st Cir. 1997)). The

Court considers six-factors: (1) the similarity of parties and

issues involved in the foreign litigation; (2) the promotion of

judicial efficiency; (3) the adequacy of relief available in the

alternative forum; (4) the issues of fairness to and convenience

of the parties, counsel, and witnesses; (5) the possibility of

prejudice to any of the parties; and (6) the temporal sequence

of the filing of the actions. Id. at 252-53.

Several factors support staying this action. The parties

and the issues are similar; it is inefficient and inconvenient

for the parties and witnesses to have parallel litigation in two

forums; the South Korean Action was filed first and is ongoing.

One factor –- adequacy of relief –- supports denying Defendants’

request for a stay. However, the outcome of the South Korean

Action nonetheless could affect the availability of relief in

this action. The Wiretapping Statute provides for actual

damages, liquidated damages, and/or punitive damages. See Mass.

Gen. Laws ch. 272 § 99Q. While the statute provides little

guidance for calculating actual damages, that endeavor likely

would require the Court to consider the injury Yoon suffered as

a result of the KBS broadcast. And those damages might overlap

the with any damages award in the South Korean Action. In other

words, a successful outcome in the South Korean Action could

result in a damages award that partially accounts for the

available damages under the Wiretapping Statute. The Court

therefore will stay the case pending the resolution of the South

Korean Action. See Tarazi v. Truehope, Inc., 958 F. Supp. 2d

428, 435 (S.D.N.Y. 2013) (staying an action because the ongoing

parallel litigation in Canada would be “instructive on the

ultimate resolution” of the stayed action).

ORDER

For the foregoing reasons, Defendants’ motions to dismiss

are ALLOWED IN PART and DENIED IN PART. Yoon’s defamation and

trade libel claims are dismissed but his wiretapping claims

survive. The case is stayed pending the outcome of the South

Korean Action.

SO ORDERED.

/s/ PATTI B. SARIS

Hon. Patti B. Saris

Chief United States District Judge