First Service Networks Incorporated v. First Service Maintenance Group Incorporated

Filing 25

ORDER granting 24 Motion for Leave to File Sur-Reply. Plaintiff may have until 6/29/12 to conduct discovery on personal jurisdiction. Defendant shall supplement its motion to dismiss on or before 7/6/2012; plaintiff shall file a response on or before 7/18/2012; no reply will be permitted. Supplements shall not exceed 10 pages in length. Signed by Judge David G Campbell on 4/24/2012.(NVO)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 First Service Networks, Inc., Plaintiff, 10 11 ORDER vs. 12 No. CV11-1897-PHX-DGC First Service Maintenance Group, Inc., Defendant. 13 Plaintiff filed suit against Defendant alleging trademark infringement, unfair 14 15 competition, unjust enrichment, and anticybersquatting. Doc. 1. Defendant filed a 16 motion to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(2) 17 and 12(b)(3), or, in the alternative, to transfer the suit to the Southern District of New 18 York. Doc. 15. The motion is fully briefed.1 Docs. 22, 23. For the reasons that follow, 19 the Court will grant Plaintiff’s request for limited discovery.2 20 I. Background. 21 Plaintiff provides maintenance and repair services to property owners and began 22 using the mark FIRST SERVICE NETWORKS in April 2001. Doc. 1 at 2-3. Plaintiff 23 provides services to U.S. and international customers who have business locations in all 24 50 states. Id. at 3. Plaintiff owns U.S. trademark registrations for FIRST SERVICE 25 1 26 27 Plaintiff’s request for oral argument is denied because the issues are fully briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 78(b); Partidge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). 2 28 Plaintiff’s motion to file a sur-reply (Doc. 24) is granted. The Court has considered it in deciding this motion. 1 NETWORKS and FIRST SERVICE NETWORK & DESIGN. Id. 2 Defendant is also a maintenance and repair provider and began offering services 3 sometime around January 2009. Id. Defendant’s website and marketing material use the 4 words “First Service,” “1st Service,” “1st Service Maintenance,” and “First Services 5 Maintenance Inc.” 6 Plaintiff’s mark and has obtained profitability they otherwise would not have. Id. 7 II. Id. Plaintiff alleges that Defendant trades on the goodwill of Analysis. 8 Defendant argues that Arizona does not have personal jurisdiction over it. A 9 federal court has personal jurisdiction over a non-resident defendant when (1) the 10 applicable state rule or statute permits service of process on the defendant, and (2) the 11 assertion of personal jurisdiction comports with due process. 12 Expeditions, Inc., 39 F.3d 1398, 1404-05 (9th Cir. 1994). Arizona’s long-arm statute 13 permits personal jurisdiction to the extent permitted by due process. See Ariz. R. Civ. P. 14 4.2(a). A plaintiff bears the burden of establishing personal jurisdiction. See, e.g., 15 Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995). Indeed, a plaintiff is 16 obligated to come forward with facts, by affidavit or otherwise, supporting personal 17 jurisdiction over the defendant. Cummings v. W. Trial Lawyers Assoc., 133 F. Supp.2d 18 1144, 1151 (D. Ariz. 2001). Chan v. Society 19 A. General Jurisdiction. 20 The Court may assert general jurisdiction over a defendant if its activities in the 21 forum state are substantial or continuous and systematic, even if the plaintiff’s claims are 22 unrelated to those activities. Haisten v. Grass Valley Med. Reimbursement Fund, Ltd., 23 784 F.2d 1392, 1396 (9th Cir. 1986)); see Goodyear Dunlop Tires Operations, S.A. v. 24 Brown, 131 S. Ct. 2846, 2851 (2011). Other than allegations about Defendant’s website, 25 Plaintiff does not argue or otherwise provide the Court with any evidence that establishes 26 general jurisdiction over Defendant. There is no evidence that Defendant engages in 27 business transactions with any residents or businesses in Arizona. Defendant’s website 28 merely provides details about Defendant and its services, where it can provide the -2- 1 services, and contact information. Merely maintaining a website that Arizona residents 2 may access is not enough to satisfy general jurisdiction requirements. Hillman Group, 3 Inc. v. Hy-Ko Products Co., No. CV 07-2446-PHX-JAT, 2008 WL 3583253 at *3 (D. 4 Ariz. Aug. 13, 2008); see also Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 5 1124 (W. D. Pa. 1997) (distinguishing between “passive” websites that merely provide 6 information and “active” websites though which commercial activity occurs). 7 B. Specific Jurisdiction. 8 The Ninth Circuit employs a three-prong test to determine whether a party has 9 sufficient minimum contacts for specific jurisdiction to exist: “(1) [t]he non-resident 10 defendant must purposefully direct his activities or consummate some transaction with 11 the forum or resident thereof; or perform some act by which he purposefully avails 12 himself of the privilege of conducting activities in the forum, thereby invoking the 13 benefits and protections of its laws; (2) the claim must be one which arises out of or 14 relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction 15 must comport with fair play and substantial justice, i.e. it must be reasonable.” 16 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). The 17 plaintiff bears the burden of satisfying the first two prongs of the test. Sher v. Johnson, 18 911 F.2d 1357, 1361 (9th Cir. 1990). If the plaintiff fails to satisfy either of these prongs, 19 personal jurisdiction is not established in the forum state. If the plaintiff succeeds in 20 satisfying the first two prongs, the burden shifts to the defendant to “present a compelling 21 case” that the exercise of jurisdiction would not be reasonable. Burger King Corp. v. 22 Rudzewicz, 471 U.S. 462, 476-78 (1985). Plaintiff has failed to satisfy the first prong. 23 The first prong is satisfied by either purposeful availment (most often used in suits 24 sounding in contract) or purposeful direction (most often used in suits sounding in tort). 25 Id. The underlying federal claims here are based on trademark infringement, which 26 sounds in tort.3 GN Trade, Inc. v. Siemens, No. Civ. S-11-0994 LKK/KJN, 2011 WL 27 3 28 Plaintiff’s proof of personal jurisdiction also fails under the purposeful availment standard. To satisfy this standard, Defendant “must do some act or consummate some -3- 1 4591080 at *2 (E.D. Cal. Sept. 30, 2011); Panavision Int’l, L.P. v. Toeppen, 141 F.3d 2 1316, 1321 (9th Cir. 1998) (stating trademark infringement and unfair competition case is 3 “akin” to a tort case). To satisfy purposeful direction, Plaintiff must establish that 4 (1) Defendant committed an intentional act, (2) expressly aimed at the forum state, 5 (3) causing harm that Defendant knows is likely to be suffered in the forum state. 6 Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010). 7 Plaintiff argues that this Court has personal jurisdiction because Defendant’s 8 website asserts that Defendant does business in the lower forty-eight states. But merely 9 maintaining a passive website does not constitute purposeful direction sufficient to 10 support specific jurisdiction.4 11 606 F.3d 1124, 1129 (9th Cir. 2010) (“It is beyond dispute in this circuit that maintenance 12 of a passive website alone cannot satisfy the express aiming prong.”) (citing Holland Am. 13 Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 460 (9th Cir. 2007); Pebble Beach Co. v. 14 Caddy, 453 F.3d 1151, 1158 (9th Cir. 2006)). But cf. Rio Props., Inc. v. Rio Int’l 15 Interlink, 284 F.3d 1007, 1020 (9th Cir. 2002) (“[O]perating even a passive website in 16 conjunction with ‘something more’ – conduct directly targeting the forum – is sufficient 17 to confer personal jurisdiction.”) (citation omitted). Brayton Purcell LLP v. Recordon & Recordon, 18 Plaintiff asserts that Defendant has a west coast office and is scheduled to be an 19 exhibitor at a Las Vegas conference. Doc. 22 at 5. Doing business on the west coast or 20 in Nevada does not, however, constitute purposeful direction at Arizona. 21 Plaintiff also “believes” that Defendant currently has contractors or subcontractors 22 transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections.” Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir. 1997). Plaintiff has not identified any act or transaction of Defendant that is connected with Arizona. Plaintiff relies solely on Defendant’s passive website and a belief that Defendant has contractors in Arizona. This is not sufficient to establish purposeful availment. 23 24 25 26 27 28 4 Plaintiff asserts that if Defendant does not in fact do business in Arizona, then it will be liable for false advertising as well as trademark infringement. Even if this were true, Defendant could be held liable only in a jurisdiction where it is subject to personal jurisdiction. False statements of purposeful direction do not necessarily constitute purposeful direction. -4- 1 providing services in Arizona. Defendant denies that it has conducted any activity in or 2 derives any revenue from Arizona, and the affidavit of Andrea Fish, Defendant’s 3 president and COO, states under penalty of perjury that Defendant has never contracted 4 to offer services in Arizona. Doc. 16 ¶ 23. Services provided by Defendant outside of 5 Arizona, of course, are not “aimed at” Arizona for purposes of specific jurisdiction. See 6 GN Trade, 2011 WL 4591080 at *4 (selling products in Colorado did not constitute 7 express aiming sufficient to support jurisdiction for a trademark action in California). 8 The Court concludes that Plaintiff has failed to show that Defendant purposefully 9 has directed its activities at Arizona. Given this failure of proof, the Court need not 10 address the other requirements of specific jurisdiction. 11 C. Leave for Jurisdictional Discovery. 12 Plaintiff asks the Court to grant 90 days of limited discovery to establish 13 jurisdictional facts. The Court will grant this request, but for a shorter period. Plaintiff 14 may have until June 29, 2012, to conduct discovery on personal jurisdiction. Plaintiff 15 may propound up to 10 requests for production of documents and 10 interrogatories (each 16 including subparts), and may take up to three depositions of no more than four hours 17 each. Defendant shall file a supplement to its motion to dismiss by July 6, 2012. 18 Plaintiff shall file a response by July 18, 2012. No reply will be permitted, and the 19 supplements will be limited to 10 pages each. The Court will enter a final ruling on the 20 motion to dismiss after considering the supplement and response. 21 IT IS ORDERED that Plaintiff’s motion to file a sur-reply (Doc. 24) is granted. 22 Dated this 24th day of April, 2012. 23 24 25 26 27 28 -5-

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