Fat Cat Mustard LLC v. Fat Cat Gourmet Foods, LLC

Filing 17

ORDER granting 10 Motion to Dismiss by Judge Benjamin H Settle.(TG)

1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 6 7 8 FAT CAT MUSTARD, LLC, a Washington limited liability company, 9 Plaintiff, 10 v. 11 FAT CAT GOURMET FOODS, LLC, a 12 Florida limited liability company, 13 CASE NO. C12-5663 BHS ORDER GRANTING DEFENDANT’S MOTION TO DISMISS Defendant. 14 15 This matter comes before the Court on Defendant Fat Cat Gourmet Food, LLC’s 16 (“Gourmet”) motion to dismiss (Dkt. 10). The Court has considered the pleadings filed 17 in support of and in opposition to the motion and the remainder of the file and hereby 18 grants the motion for the reasons stated herein. I. PROCEDURAL HISTORY 19 20 On July 25, 2012, Plaintiff Fat Cat Mustard, LLC (“Mustard”) filed a complaint 21 against Gourmet for declaratory judgment of trademark noninfringement, cancellation of 22 federal trademark registration, trademark infringement and unfair competition. Dkt. 1. ORDER - 1 1 Mustard alleges that Gourmet is subject to the personal jurisdiction of this Court because, 2 based “on information and belief,” Gourmet has transacted “business in this district” and 3 had “sent multiple letters into this judicial district to [Mustard] alleging trademark 4 infringement.” Id. ¶ 4. 5 On September 21, 2012, Gourmet filed a motion to dismiss for lack of personal 6 jurisdiction. Dkt. 10. On October 12, 2012, Mustard responded (Dkt. 13) and filed an 7 amended complaint (Dkt. 12). Gourmet did not reply, but did file a proposed order on 8 October 22, 2012. Dkt. 16. 9 In the amended complaint, Mustard withdrew the qualifier “on information and 10 belief” and alleges as follows: 11 12 13 14 [Gourmet] has done business in this district or a substantial part of the events giving rise to Fat Cat Mustard’s claims occurred in or were aimed at this judicial district. [Gourmet] is subject to the personal jurisdiction of this Court as [Gourmet] has done business in Washington, has committed a tort in the state of Washington and alleges that it owns property in the state of Washington. In addition, [Gourmet] sent multiple letters into this judicial district to Fat Cat Mustard alleging trademark infringement. 15 Dkt. 12 ¶ 4. 16 II. FACTUAL BACKGROUND 17 Mustard alleges that it began using its mark FAT CAT MUSTARD toward the end 18 of 2010. Id. ¶ 6. On April 24, 2012, Gourmet obtained a federal trademark for the mark 19 FAT CAT GOURMET FOODS ITS PURR-FECTLY GOOD + DESIGN. Id. ¶ 12. The 20 trademark claims June 3, 2011, as the date of first use. Id. 21 22 ORDER - 2 1 On June 14, 2012, Gourmet’s attorney sent Mustard a cease and desist letter 2 alleging that Mustard’s mark infringed Gourmet’s mark. Dkt. 14, Declaration of Carly 3 McLeod, ¶ 12 & Exh. A. On July 6, 2012, Gourmet’s attorney sent Mustard another 4 letter threatening litigation in Florida if Mustard did not concede to ceasing and desisting. 5 Id., Exh. B. The party’s attorneys discussed the issue and this action followed, 6 apparently preempting Gourmet’s filing in Florida. 7 In support of its motion, Gourmet submitted the declaration of Deborah L. 8 Moskowitz, Gourmet’s managing member. Dkt. 10, Exh. A, Declaration of Deborah L. 9 Moskowitz (“Moskowitz Decl.”), ¶ 5. With regard to Gourmet’s transactions in 10 Washington, Ms. Moskowitz declares as follows: 11 12 13 14 We have searched our records and can find only one purchase of one bottle of one of our sauces that was requested by a Florida customer to be shipped to Washington State. This occurred because a member of my family (mother) has a friend who lives half the year in Washington and half the year here in Florida. She bought the sauce because of a conversation with my mother and had it sent to Washington so she didn’t have to travel with it. 15 Id. ¶ 8. III. DISCUSSION 16 Under Federal Rule of Civil Procedure 12(b)(2), a defendant may bring a motion 17 to dismiss for lack of personal jurisdiction. The plaintiff then bears the burden of proving 18 such jurisdiction. Butcher’s Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 538 19 (9th Cir. 1986). When the district court rules on the motion based on affidavits and 20 discovery materials without an evidentiary hearing, the plaintiff need only make a prima 21 facie showing of personal jurisdiction. See Ochoa v. J.B. Martin & Sons Farms, Inc., 287 22 ORDER - 3 1 F.3d 1182, 1187 (9th Cir. 2002). “In determining whether [Plaintiff] [has] met this prima 2 facie burden, uncontroverted allegations in [his] complaint must be taken as true, and 3 ‘conflicts between the facts contained in the parties’ affidavits must be resolved in [his] 4 favor . . . .’” Id. (quoting Am. Tel. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 5 586, 588 (9th Cir. 1996) (brackets in original)). “Additionally, any evidentiary materials 6 submitted on the motion ‘are construed in the light most favorable to the plaintiff and all 7 doubts are resolved in [his] favor.’” Id. (quoting Metro. Life Ins. Co. v. Neaves, 912 F.2d 8 1062, 1064 n. 1 (9th Cir. 1990) (citation and internal quotation marks omitted; brackets in 9 original)). 10 There are two types of personal jurisdiction: general and specific. See Brand, 796 11 F.2d at 1073. To exercise general jurisdiction over a defendant, the Court must find the 12 defendant’s “continuous corporate operations within a state [are] so substantial and of 13 such a nature as to justify suit against it on causes of action arising from dealings entirely 14 distinct from those activities.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. 15 Ct. 2846, 2853 (2011) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 318 (1945)). 16 In this case, Gourmet argues that the Mustard has failed to make a prima facie 17 case of general jurisdiction. Dkt. 10 at 4–6. The Court agrees because the record is 18 devoid of allegations or evidentiary materials showing that Gourmet has conducted 19 substantial operations in Washington. Therefore, the Court finds that it is without general 20 personal jurisdiction over Gourmet. 21 In the absence of general personal jurisdiction, a forum may only exercise specific 22 personal jurisdiction over a defendant. See Yahoo! Inc. v. La Ligue Contre Le Racisme Et ORDER - 4 1 L’Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006). The Ninth Circuit employs a 2 three- part test to determine whether the exercise of specific jurisdiction satisfies the 3 requirements of due process: (1) the defendant must have purposely availed itself of the 4 privilege of conducting activities in the forum; (2) the plaintiff’s claim must arise out of 5 that activity; and (3) the exercise of jurisdiction must be reasonable. Shute v. Carnival 6 Cruise Lines, 897 F.2d 377, 381 (9th Cir. 1990). Under this three-prong test, the plaintiff 7 bears the burden of satisfying the first two prongs. Schwarzenegger, 374 F.3d at 802. If 8 the plaintiff meets this burden, the defendant then has the burden to present a compelling 9 case why the exercise of jurisdiction would be unreasonable. Id. (citing Burger King 10 Corp. v. Rudzewicz, 471 U.S. 462, 476 78 (1985)). 11 A. Purposeful Availment 12 The purposeful availment requirement ensures that a non-resident defendant will 13 not be haled into court based upon random, fortuitous, or attenuated contacts with the 14 forum state. See Burger King, 471 U.S. at 475. A non-resident defendant purposefully 15 avails itself of the forum if its contacts with the forum are attributable to (1) intentional 16 acts; (2) expressly aimed at the forum; (3) causing harm, the brunt of which is suffered— 17 and which the defendant knows is likely to be suffered—in the forum. See Calder v. 18 Jones, 465 U.S. 783, 788–89 (1984) (establishing an “effects doctrine” for intentional 19 action aimed at the forum); Core Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1485–86 20 (9th Cir. 1993). 21 In this case, Mustard asserts that the Court has specific jurisdiction based on 22 Gourmet’s and Gourmet’s distributors’ websites, the shipment of one jar of sauce to ORDER - 5 1 Washington, and Gourmet’s cease and desist letters. With regard to the websites, it 2 appears to be uncontested that individuals in Washington could access a website and 3 order Gourmet’s products. Mustard, however, has failed to even allege that any 4 individual in Washington has completed such a transaction. Therefore, Mustard is 5 required to show “something more.” See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 6 1155–1159 (9th Cir. 2006). Mustard offers the letters and the shipment as the 7 “something more.” 8 First, the cease and desist letters are not “something more.” Mustard has failed to 9 show that the letters caused any harm whatsoever. Moreover, Mustard fails to cite any 10 authority for its proposition that a federally granted property right, such as a trademark, 11 subjects the owner to personal jurisdiction in every forum in which the right may be 12 enforced. 13 Second, Mustard misconstrues Gourmet’s transaction. Ms. Moskowitz declares 14 that the purchaser was a “Florida customer” who requested that the bottle be shipped to 15 Washington “so she didn’t have to travel with it.” Moskowitz Decl., ¶ 8. This does not 16 show that Gourmet “engaged in commercial activity in Washington” as Mustard 17 contends. Dkt. 13 at 3. Therefore, based on the record before the Court, Mustard has 18 failed to show that Gourmet “purposely availed itself of the privilege of conducting 19 activities in” Washington. Shute, 897 F.2d at 381. 20 B. Gourmet’s Forum–Related Activities 21 The Ninth Circuit has adopted a “but for” test for determining whether a plaintiff’s 22 cause of action arises out of the defendant’s forum related activities. Doe v. America Nat. ORDER - 6 1 Red Cross, 112 F.3d 1048, 1051 (9th Cir. 1997). The “arising out of” requirement is met 2 if, but for the contacts between the defendant and the forum state, the cause of action 3 would not have arisen. See Terracom v. Valley Nat. Bank, 49 F.3d 555, 561 (9th Cir. 4 1995). 5 In this case, even if one finds that Mustard met its previous burden, Mustard 6 completely fails to satisfy this prong of the analysis. With regard to the cease and desist 7 letters, no cause of action is based on the receipt of the letters. While the letters may 8 have contained information pertaining to the basis for Mustard’s causes of action, the act 9 of sending the letters to Washington is not the basis for any of Mustard’s asserted claims. 10 With regard to Gourmet’s shipment of one bottle of sauce to Washington, it is a 11 logical conclusion that Mustard was unaware of the shipment until it was provided with 12 Ms. Moskowitz’s declaration. A fair reading of Mustard’s causes of action shows that 13 the trademark aspects arise from Gourmet’s federally registered mark and Mustard’s 14 alleged common law rights. The act of obtaining a federal trademark did not occur in 15 Washington and the record is devoid of any evidence or allegation that an individual in 16 Washington was confused by either mark. As for the unfair competition aspects, it 17 appears to be uncontested that the parties do not compete in the same geographic area. In 18 any event, it is Mustard’s burden to persuade the Court that there is a prima facie case on 19 this element, and Mustard has failed to do so. Therefore, the Court finds that Mustard 20 has failed to meet its burden of linking Gourmet’s actions to Mustard’s alleged harms. 21 22 ORDER - 7 1 C. Reasonableness 2 Finally, under the third prong of the Ninth Circuit test, Plaintiff must demonstrate 3 that the exercise of jurisdiction is reasonable. 4 5 [T]here is a presumption of reasonableness upon a showing that the defendant purposefully directed his action at forum residents which the defendant bears the burden of overcoming by presenting a compelling case that jurisdiction would be unreasonable. 6 Columbia, 106 F.3d at 289 (quoting Haisten v. Grass Valley Medical Reimbursement, 7 784 F.2d 1392, 1397 (9th Cir. 1986) (citing Burger King, 471 U.S. at 477)). 8 The Ninth Circuit considers the following seven factors in determining whether 9 the exercise of specific jurisdiction over a defendant is reasonable: (1) the extent of the 10 defendant’s purposeful interjection into the forum state; (2) the burden on the defendant 11 of litigating in the forum; (3) the extent of conflict with the sovereignty of the 12 defendant’s state; (4) the forum state’s interest in adjudicating the dispute; (5) the most 13 efficient judicial resolution of the dispute; (6) the importance of the forum to the 14 plaintiff’s interest in convenient and effective relief; and (7) the existence of an 15 alternative forum. See Ziegler v. Indian River Country, 64 F.3d 470, 475 (9th Cir. 1995) 16 (citing Terracom, 49 F.3d at 561) (finding that all seven factors must be weighed, but 17 none are dispositive). 18 In this case, Gourmet has made a compelling case that the exercise of jurisdiction 19 would be unreasonable. Gourmet’s interjection into Washington is de minimus, if any 20 purposeful interjection exists at all. Being a Florida based corporation, Gourmet would 21 suffer a significant burden defending itself in Washington. The parties concede that there 22 ORDER - 8 1 is no conflict between Washington and Florida. Washington has no interest in 2 adjudicating the propriety of a non-resident company’s trademark when there is no 3 evidence that a sale was actually consummated in Washington or that there is a likelihood 4 of confusion by Washington consumer. Neither forum appears to be the most efficient 5 for judicial resolution because it does not appear that the parties compete in either Florida 6 or Washington. See Dkt. 13 at 12 (“Mustard has never done business in Florida”). While 7 Washington may be a more convenient forum for Mustard, it has failed to show that 8 Gourmet purposely interjects itself into Washington and causes harm. Finally, alternative 9 forums exist if either party chooses to bring the action where the defending party is 10 subject to personal jurisdiction. Therefore, the Court finds that Gourmet has shown that 11 it would be unreasonable for the Court to assert personal jurisdiction in this matter. 12 D. Jurisdictional Discovery 13 “[W]here a plaintiff’s claim of personal jurisdiction appears to be both attenuated 14 and based on bare allegations in the face of specific denials made by the defendants, the 15 Court need not permit even limited discovery . . . .” Pebble Beach, 453 F.3d at 1160 16 (citing Terracom, 49 F.3d at 562 (9th Cir. 1995)). 17 In this case, Mustard requests that the Court grant limited discovery as to 18 jurisdiction. The Court, however, finds that discovery is not warranted because 19 Mustard’s claim of jurisdiction is based on unsupported allegations in the face of 20 Gourmet’s specific denial that it ever consummated a single transaction in Washington. 21 Therefore, the Court grants Gourmet’s motion and dismisses Mustard’s complaint for 22 lack of jurisdiction. ORDER - 9 1 2 IV. ORDER Therefore, it is hereby ORDERED that Gourmet’s motion to dismiss (Dkt. 10) is 3 GRANTED. The Clerk is directed to close this case. 4 Dated this 2nd day of November, 2012. A 5 6 BENJAMIN H. SETTLE United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 ORDER - 10