A website through which hundreds of New York residents have searched for, purchased, stored, and shared copyrighted music files has "transacted business" in New York for purposes of the state's long-arm statute, and is subject to jurisdiction there, the U.S. District Court for the Southern District of New York held Sept. 29. Capitol Records, Inc. v. MP3tunes, LLC [SD NY, 2008].

Web Music Service Sued. MP3tunes operated a web service that allowed users to listen to music files online, and enabled them to make copies of the music files to store in online "lockers." Customers could access their lockers from any computer and could, if they subscribed to MP3tunes's "premium service," download locker files to any computer any number of times. At least 400 New York users had engaged in at least 950 paying transactions.

"MP3tunes websites are interactive; they provide users with software, transfer music files to and from customers, and allow for the exchange of e-mails and postings," the court said. "These interactions occurred with New York users, and some of those users paid for the premium services. Moreover, some of these interactions—that is the transfers of music files—form the basis for plaintiff's claims. Therefore, MP3tunes transacts business in New York under §302(a)(1)," the court said.