Wine Group LLC v. Levitation Management LLC et al

Filing 14

ORDER denying 9 Motion to Dismiss for Lack of Jurisdiction signed by Judge William B. Shubb on 10/5/11. (Matson, R)

Download PDF
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 NO. CIV. 2:11-1704 WBS JFM THE WINE GROUP LLC, a Delaware limited liability company, 13 MEMORANDUM AND ORDER RE: MOTION TO DISMISS OR TO TRANSFER Plaintiff, 14 v. 15 16 17 18 LEVITATION MANAGEMENT, LLC, a Nevada limited liability company; and TIPTON SPIRITS, LLC, d/b/a Desirée Vodka Company, LLC, an Indiana limited liability company, 19 Defendants. / 20 ----oo0oo---- 21 22 Plaintiff The Wine Group LLC (“TWG”) brought this 23 trademark infringement action against defendants Levitation 24 Management, LLC (“Levitation”),1 and Tipton Spirits, LLC, d/b/a 25 Desirée Vodka Company, LLC (“Tipton”). Defendants move to 26 27 28 1 According to defendants, the name of this company is Levitation Marketing, LLC, not Levitation Management, LLC, as captioned in the Complaint. 1 1 dismiss for lack of personal jurisdiction pursuant to Federal 2 Rule of Civil Procedure 12(b)(2) or, alternatively, to transfer 3 to the Southern District of Indiana for improper venue pursuant 4 to 28 U.S.C. § 1406(a). 5 I. Factual and Procedural Background 6 Plaintiff, a Delaware limited liability company with 7 its principal place of business in Tracy, California, produces, 8 imports, and markets wine, vodka, and other alcoholic beverages. 9 (Compl. ¶¶ 3, 7.) 10 Its products are advertised, distributed, and sold throughout the United States. (Id. ¶ 7.) In 2007, plaintiff launched a brand of wine called 11 12 “Cupcake.” (Id. ¶ 8.) Plaintiff has registered “Cupcake” as a 13 trademark. (Id. ¶ 15.) In 2010, plaintiff created a sub-brand 14 of Cupcake wine called “Red Velvet.” (Id. ¶ 12.) 15 After allegedly great nationwide success with the 16 Cupcake wine, plaintiff decided to create a Cupcake brand of 17 vodka in 2010 and launched the Cupcake vodka in April of 2011. 18 (Id. ¶ 16.) 19 for spirits. 20 Plaintiff has registered “Cupcake” as a trademark (Id. ¶ 18.) According to plaintiff, California is the largest 21 market for vodka in the United States and plaintiff sells more 22 Cupcake wine, Cupcake Red Velvet wine, and Cupcake vodka in 23 California than any other state. (Lizar Decl. ¶¶ 3-7.) In early 2010, defendants created a “Desirée” brand of 24 25 vodka. (Compl. ¶ 19.) Levitation is a Nevada limited liability 26 company, (id.), with its principal place of business in Brazil, 27 Indiana. 28 agency that owns the DESIRÉE trademark, the other trademarks at (Knight Decl. I ¶ 5.) “It is a marketing consulting 2 1 issue [], and the domain name desireevodka.com.” 2 Tipton, an Indiana limited liability company, “is responsible for 3 the sales and marketing of the [Desirée vodka.]” 4 Tipton’s principal place of business is in Brazil, Indiana. 5 (Knight Decl. I ¶ 8.) 6 (Compl. ¶ 4.) (Id. ¶ 5.) Plaintiff takes issue with two of defendants’ sub- 7 brands of Desirée vodka: “On one vodka, Defendants use the 8 trademark CUPCAKE and a large depiction of a cupcake, and on the 9 other Defendants use the trademark RED VELVET and a large 10 depiction of a slice of a layer cake.” 11 (Compl. ¶ 20.) In February of 2011, before defendants had launched 12 their vodka, plaintiff informed defendants by letter of its 13 trademark registration and pending application and asked 14 defendants to change their labels. 15 plaintiff is located in California. 16 series of communications in which defendants disputed that their 17 use of “Cupcake” or “Red Velvet” was improper. 18 defendants launched their vodka and did not change their labels. 19 (See Reidl Decl. ¶¶ 2-7; Compl. ¶¶ 23-27.) 20 Defendants were informed that The parties exchanged a In April of 2011, The Complaint alleges the “[a]cts giving rise to the 21 claims asserted herein have been expressly aimed at, have 22 occurred in, and will continue to occur in California and this 23 District,” 24 are the place of injury. 25 (Compl. ¶ 2), and that California and this district (Id. ¶ 3.) Plaintiff has not alleged that defendants sell their 26 vodka in California. According to defendants, they currently 27 sell their vodka in seven states. 28 Defendants’ vodka cannot be purchased through their website. 3 (Knight Decl. I ¶ 15.) 1 (Id. ¶ 28, Ex. 1.) 2 Plaintiff alleges that defendants “are in the process 3 of rolling out CUPCAKE and RED VELVET vodka and seeking 4 distributors on a national basis, including in California. 5 Defendants’ DESIRÉE vodka competes directly with TWG’s CUPCAKE 6 vodka.” 7 The (Compl. ¶ 21.) Defendants admit to engaging in one unsuccessful 8 discussion with a California-based distributor, which resides in 9 this district, that touched on defendants’ vodka. 10 Decl. I ¶¶ 21-22.) 11 products will be “Coming soon” to every state. 12 (See Knight Defendants’ website states that their (Id. Ex. 1.) In support of their allegation that defendants market 13 and promote their vodka in California, (see Compl. ¶ 21), 14 plaintiff relies heavily on defendants’ Internet activity. 15 Defendants maintain a website, www.desireevodka.com, at which 16 visitors are invited to contact defendants to receive additional 17 information. 18 “metatags” for “Cupcake Vodka” and “Red Velvet Vodka.” 19 Decl. ¶ 8; Knight Decl. II ¶ 14.) 20 metatags “ensure that references to Defendants’ vodka will appear 21 whenever a consumer searches for TWG’s wine or vodka.” 22 26.) 23 search engine Google for “cupcake vodka” only yielded results 24 related to plaintiff on the first two pages; the third page 25 contained results related to defendants. 26 Ex. A.) 27 defendants on the website of Facebook, a California company, and 28 provides a link to their Facebook page. (Knight Decl. I Ex. 1.) The website includes (Lizar Plaintiff alleges that the (Compl. ¶ However, according to defendants, a recent search on the (Knight Decl. II ¶ 14, Defendants’ website invites visitors to “follow” 4 (Knight Decl. I Ex. 1.) 1 Defendants have created a Facebook page that allows 2 defendants to post information about their products. 3 Decl. I ¶ 29.) 4 messages to defendants and defendants to respond to users 5 messages. 6 Facebook page to solicit applications for “Brand Ambassadors” it 7 hires to promote defendants’ products. The page also permits website users to post (Knight Decl. I, Ex. 2.) Defendants also use the (Id.) The parties dispute how Facebook functions and how 8 9 (Knight defendants have used it. According to plaintiff, “each [Facebook 10 “friend”] will receive all updates posted by the other person on 11 their respective homes pages.” 12 Plaintiff claims that the owner of a Facebook page must first 13 “accept” a “friend request” and can “delete” a “friend.” 14 14, 16-17.) 15 determine where another “friend” resides.2 16 (Lizar Decl. ¶ 14.) (Id. ¶¶ Plaintiff contends that only a “friend” can (Id. ¶ 15.) Plaintiff’s counsel, a resident of this district, 17 “friended” defendants and has since “automatically receive[d] all 18 communications posted to the Facebook page by Defendants,” 19 including an entry referring to “Cupcake Vodka” and “Red Velvet 20 Vodka.” 21 entries on defendants’ page by “friends” of defendants who 22 indicate that they live in California. 23 in Bakersfield, California, simply said that defendants’ vodka (Reidl Decl. ¶¶ 12-13.) Plaintiff’s counsel notes two One entry from a “friend” 24 25 26 27 28 2 According to defendants, defendants’ Facebook page only allows a Facebook user to “like” or “follow” or become a “fan” of defendants. In other words, defendants do not “accept” “friend requests.” Defendants can only restrict Facebook “fans” by age and country, and defendants can only view information on a user’s profile that the user has made “public,” which may or may not include where the user lives. (See Knight Decl. II ¶¶ 15-16.) 5 1 was not available in California, to which defendants did not 2 respond. 3 available in California, to which defendants responded that a 4 distributor had not been appointed “yet” and asked for 5 suggestions. Another entry asked defendants when the vodka would be (See Reidl Decl. ¶¶ 18-19; Knight Decl. I Ex. 2.) 6 According to defendants, as of August 2, 2011, five of 7 the Facebook users who “like” defendants indicate that they live 8 in California. 9 search on Facebook’s search bar for “cupcake vodka” does not Defendants have approximately 254 “fans.” A 10 result in any mention of defendants or their vodka. 11 search only results in a page for plaintiff’s Cupcake vodka. 12 (See Knight Decl. II ¶¶ 18-19, Ex. B.) 13 Such a Facebook allows advertising, including advertising 14 based on geography. (Id. ¶ 17.) According to defendants, they 15 have not purchased targeted advertising on Facebook “for any 16 country or state, let alone California or the cities that reside 17 in the Eastern District of California.” 18 time ha[ve] [defendants] engaged in paid advertising . . . 19 anywhere outside of the markets where the Desirée vodka products 20 are sold.” (Id.) Further, “at no (Id. ¶ 20.) On June 24, 2011, plaintiff filed this action against 21 22 defendants, asserting claims for trademark infringement under the 23 Lanham Act, 15 U.S.C. §§ 1051-1127, and restitution based on 24 unjust enrichment. 25 II. 26 Discussion The plaintiff has the burden of establishing that the 27 court has personal jurisdiction over a defendant. 28 Corp., 248 F.3d 915, 922 (9th Cir. 2001). 6 Doe v. Unocal Where the court does 1 not hold an evidentiary hearing and the motion is based on 2 written materials, as here, plaintiff need only establish a prima 3 facie showing of jurisdiction. 4 Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). 5 has contradicted allegations contained in the complaint, 6 plaintiff may not rest on the pleadings, but must present 7 admissible evidence which, if true, would support the exercise of 8 personal jurisdiction. 9 Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003). Schwarzenegger v. Fred Martin Once a defendant Harris Rutsky & Co. Ins. Servs., Inc. v. 10 Uncontroverted allegations in the Complaint must be taken as true 11 and conflicts between statements contained in affidavits must be 12 resolved in the plaintiff’s favor. 13 800. 14 Schwarzenegger, 374 F.3d at “Where there is no applicable federal statute governing 15 personal jurisdiction, the district court applies the law of the 16 state in which it sits. 17 statute is coextensive with federal due process requirements.” 18 Love v. Associated Newspapers, Ltd., 611 F.3d 601, 608-09 (9th 19 Cir. 2010) (citing Yahoo! v. La Ligue Contre Le Racisme, 433 F.3d 20 1199, 1205 (9th Cir. 2006) (en banc)); Cal. Code Civ. Proc. § 21 410.10). 22 nonresident defendant, that defendant must have at least ‘minimum 23 contacts’ with the relevant forum such that the exercise of 24 jurisdiction ‘does not offend traditional notions of fair play 25 and substantial justice.’” 26 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). 27 Plaintiff relies only on specific jurisdiction. 28 California’s long-arm jurisdictional “For a court to exercise personal jurisdiction over a Schwarzenegger, 374 F.3d at 801 The Ninth Circuit uses a three-prong test to determine 7 1 2 3 4 whether specific jurisdiction exists: (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; 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 of its laws; 5 6 (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and 7 (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 8 9 10 Id. at 802 (quoting Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)) (internal quotation marks omitted). “The plaintiff bears the burden of satisfying the first 11 12 two prongs of the test. 13 of these prongs, personal jurisdiction is not established in the 14 forum state.” 15 prongs, “the burden then shifts to the defendant to ‘present a 16 compelling case’ that the exercise of jurisdiction would not be 17 reasonable.” 18 U.S. 462, 476-78 (1985)). 19 20 A. Id. If the plaintiff fails to satisfy either Once the plaintiff satisfies the first two Id. (quoting Burger King Corp. v. Rudzewicz, 471 Purposeful Direction “The first prong is satisfied by either purposeful 21 availment or purposeful direction . . . . ‘A purposeful availment 22 analysis is most often used in suits sounding in contract. 23 purposeful direction analysis, on the other hand, is most often 24 used in suits sounding in tort.’” 25 Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010) (quoting 26 Schwarzenegger, 374 F.3d at 802). 27 28 A Brayton Purcell LLP v. “Trademark . . . claims are akin to tort claims, and therefore, are analyzed under the purposeful direction test.” 8 1 One True Vine, LLC v. Liquid Brands LLC, No. C 10–04102, 2011 WL 2 2148933, at *4 (N.D. Cal. May 31, 2011). 3 Inc. v. Bobosky, No. CV 10-603, 2010 WL 4365795, at *4 (D. Or. 4 Oct. 8, 2010) (“In trademark infringement cases, however, Ninth 5 Circuit courts have used both purposeful direction and purposeful 6 availment frameworks simultaneously . . . .”), adopted by Civil 7 No. 10-603, 2010 WL 4364609 (D. Or. Oct. 28, 2010). 8 Plaintiff relies on purposeful direction. 9 But cf. Adidas Am., The Ninth Circuit analyzes purposeful direction using the “Calder effects” 10 test, originated in Calder v. Jones, 465 U.S. 783 (1984). 11 Brayton Purcell, 606 F.3d at 1128. 12 “[t]he defendant allegedly must have (1) committed an intentional 13 act, (2) expressly aimed at the forum state, (3) causing harm 14 that the defendant knows is likely to be suffered in the forum 15 state.” 16 quotation marks omitted). 17 See Under the effects test, Id. (quoting Yahoo!, 433 F.3d at 1206) (internal Because the first and third factors are easiest to 18 address, the court will discuss those factors first before 19 determining whether defendants expressly aimed at the forum. 20 1. Intentional Act “‘Intentional act’ has a specialized meaning in the 21 22 context of the Calder effects test.” Schwarzenegger, 374 F.3d at 23 806. 24 act in the real world” and need not have intended “to accomplish 25 a result or consequence of that act.” 26 case performed such intentional acts when they designed and 27 launched their website, registered metatags with Google, created 28 their Facebook page, and used that page to interact with their A defendant need only have performed “an actual, physical 9 Id. Defendants in this 1 “fans.” 2 copyrighted material on passive website was an intentional act); 3 Nutrishare, Inc. v. BioRX, L.L.C., No. 08-1252, 2008 WL 3842946, 4 at *7 (E.D. Cal. Aug. 14, 2008) (using a protected trademark in 5 online advertisements was an intentional act). 6 requirement of the Calder test is met. 7 8 9 2. See, e.g., Purcell, 606 F.3d at 1128 (posting The first Defendants Knew Harm Was Likely in California Under the third prong of the Calder test, a plaintiff must show that a defendant has caused harm it “knew was likely to 10 be suffered in the forum state.” Brayton Purcell, 606 F.3d at 11 1131 (citing Yahoo! 433 F.3d at 1206). 12 satisfied when defendant's intentional act has ‘foreseeable 13 effects’ in the forum.” “This element is Id. (citing Bancroft, 223 F.3d at 1087). 14 The Ninth Circuit “has repeatedly held that a 15 corporation incurs economic loss, for jurisdictional purposes, in 16 the forum of its principle place of business.” 17 Inc. v. AcademyOne, Inc., No. 09-56528, --- F. Supp. 2d ---, 18 ----, 2011 WL 3437040, at *10 (9th Cir. 2011) (citing Dole Food 19 Co., Inc. v. Watts, 303 F.3d 1104, 1113-14 (9th Cir. 2002); 20 Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1482, 1322 n.2 (9th 21 Cir. 1998); Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 22 1487 (9th Cir. 1993)). 23 case is the damage to the trademark owner’s reputation, see Au- 24 Tomotive Gold Inc. v. Volkswagen of Am., Inc., 603 F.3d 1133, 25 1137 (9th Cir. 2010), and economic loss caused by intentional 26 infringement of a plaintiff’s trademark is foreseeable, see 27 Brayton Purcell, 606 F.3d at 1131 (economic loss caused by 28 intentional copyright infringement is foreseeable). CollegeSource, The injury in a trademark infringement 10 1 Plaintiff’s principal place of business is in 2 California and it holds trademark rights to the terms “Cupcake” 3 and “Red Velvet” as applied to wine and spirits. 4 made aware of these facts when they received plaintiff’s February 5 2011 letter and, therefore, could know it was likely that they 6 would cause plaintiff harm in the forum. 7 Defendants were In response to plaintiff’s allegation that defendants 8 have intentionally interfered with plaintiff’s trademark, 9 damaging its brand and causing consumer confusion, defendants 10 respond that because they have not sold any products in the forum 11 and are unaware of any sales of their products in the forum, they 12 could not know that plaintiff would suffer harm in the forum. 13 They further claim that for that same reason, a lack of in-forum 14 sales, plaintiff cannot have actually suffered any harm in the 15 forum, foreseeable or not.3 16 defendant’s out of forum actions may cause a plaintiff likely, 17 foreseeable injury in forum. 18 Schwarzenegger, 374 F.3d at 803). 19 satisfied. 20 3. Yahoo, 433 F.3d at 1206 (citing The third Calder factor is Express Aiming The express aiming requirement is met when “the 21 22 The cases, though, make clear that a defendant is alleged to have engaged in wrongful conduct targeted 23 24 25 26 27 28 3 Defendants report that a search on Google for the term “cupcake vodka” yields only results related to plaintiff for the first two pages. (Knight Decl. II ¶ 14.) Because the court’s ruling does not rely solely on harm caused by defendants’ use of metatags, the court will not address the question of whether defendants’ submission would shift the burden to plaintiff to submit evidence supporting the challenged allegations, but does point out that defendants did not submit evidence of the results of a similar search for the trademarked term “Red Velvet.” 11 1 at a plaintiff whom the defendant knows to be a resident of the 2 forum state.” Dole Food, 303 F.3d at 1111. The invention of the Internet has posed a challenge to 3 4 traditional jurisdictional analysis and courts have “struggled 5 with the question whether tortious conduct on a nationally 6 accessible website is expressly aimed at any, or all, of the 7 forums in which the website can be viewed.” 8 Brand Technologies, 647 F.3d 1218, 1229 (9th Cir. 2011) (citing 9 cases). Mavrix Photo Inc. v. It is well established that posting information on a 10 passive website alone is insufficient to confer jurisdiction in 11 all states in which that website is be accessed. 12 (citing Brayton Purcell, 606 F.3d at 1129). 13 Id. at 1229 “[O]perating even a passive website in conjunction with 14 ‘something more’--conduct directly targeting the forum--is 15 sufficient” to establish jurisdiction. 16 Int’l Interlink, 284 F.3d 1007, 1020 (9th Cir. 2002). 17 that facilitate and encourage interactions may form the basis for 18 jurisdiction, and this is especially likely to be the case if the 19 interactions are commercial in nature. 20 Cybersell, Inc., 130 F.3d 414, 419 (9th Cir. 1997) (citing Zippo 21 Manuf. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. 22 Pa. 1997)). 23 Rio Props, Inc. v. Rio Websites Cybersell, Inc. v. When evaluating whether a non-resident’s online 24 activity satisfies the expressly aimed prong of the effects test, 25 courts have considered “the interactivity of the defendant’s 26 website, e.g., Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1153-54, 27 1158 (9th Cir. 2006); Cybersell, 130 F.3d at 417-20[,] the 28 geographic scope of the defendant’s commercial ambitions, e.g., 12 1 Pebble Beach, 453 F.3d at 1156-58; Rio Props, 284 F.3d at 1020- 2 21[,] and whether the defendant ‘individually targeted’ a 3 plaintiff known to be a forum resident, e.g., Brayton Purcell, 4 606 F.3d at 1129; Pebble Beach, 453 F.3d at 1156-57; Panavision, 5 141 F.3d at 1321-22.” 6 aggregate effect of a defendant’s contacts with the forum that 7 courts consider, not individual acts taken in isolation, to 8 determine if jurisdiction exists. 9 (jurisdiction may be appropriate where there is “a series of Mavrix Photo, 647 F.3d at 1229. It is the See Love, 611 F.3d at 606-07. 10 ongoing efforts by the defendant to avail itself of the benefits 11 of the [forum] market,” but not where defendant has only single, 12 isolated contacts with the forum state unconnected to the 13 tortious act) (quoting Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 14 1191, 1193 (9th Cir. 1988))); Panavision, 141 F.3d at 1321-22. 15 16 i. Interactivity In Nutrishare, this court found that a website with a 17 discussion board allowing visitors to post messages and chat 18 online with employees of the defendant, a referral section 19 allowing visitors to sign up to become customers, and a “Contact 20 Us” e-mail page allowing visitors to request further information 21 was not interactive enough, on its own, to show express aiming. 22 Nutrishare, Inc., 2008 WL 3842946, at *8. 23 Defendants’ own website is a passive website that 24 allows one-way communication with site users. Holland Am. Line 25 Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 460 (9th Cir. 2007). 26 Website visitors can access advertising material that defendants 27 post, but defendants do not make any sales and there are no 28 interactive features. There is a “Contact Us” link consumers can 13 1 click on to send an email to defendants, but such features do not 2 make a website “interactive.” 3 419 (website that invited visitors to email defendant was 4 “essentially passive”); Pebble Beach, 453 F.3d at 1154-55 5 (characterizing website with link allowing users to contact 6 defendant as “passive”). 7 online presence, their online activities would be unlikely to 8 form an adequate basis for jurisdiction in California. 9 Defendants also maintain a Facebook page for See Cybersell, 130 F.3d at 416, If defendants’ website was their only 10 advertising purposes that has several interactive features. 11 Visitors can use the page to post comments and questions on a 12 message board and can sign up to be “fans” of the product. 13 Defendants use the page to respond to questions posted by their 14 “fans,” send messages to their fans’ Facebook accounts, and 15 solicit applicants for “Brand Ambassador” positions. 16 defendants’ Facebook page shares some features with the page in 17 Nutrishare, it is both less interactive and less commercial and 18 would therefore be inadequate, standing alone, to show express 19 aiming. 20 relevant to a jurisdictional inquiry, however, the interactive 21 and commercial nature of defendants’ online activities support 22 jurisdiction. 23 24 While Considered as a part of the totality of circumstances ii. Scope of Commercial Ambition Courts have found express aiming where defendants used 25 the Internet and other widely accessible methods of communication 26 to seek commercial benefit in a forum’s market. 27 Purcell, 606 F.3d at 1130 (express aiming at forum where nothing 28 on law firm’s website indicated that its practice area was did 14 Compare Brayton 1 not include the forum) and Mavrix, 647 F.3d at 1231 (“where . . . 2 a website with national viewership and scope appeals to, and 3 profits from, an audience in a particular state, the site’s 4 operators can be said to have ‘expressly aimed’ at that state”) 5 with Schwarzenegger, 374 F.3d at 807 (no express aiming where 6 print advertisement was never circulated in California and 7 defendant had no reason to believe that any Californians would 8 see it). 9 Plaintiff alleges that defendants’ goal is to sell its 10 vodka throughout the United States, including in the forum state. 11 Defendants’ website indicates that Desirée vodka is “Coming soon” 12 to all fifty states, and it has used its Facebook page to 13 communicate with consumers throughout the country, including 14 forum residents, and has engaged in an unsuccessful discussion 15 with a forum-based distributor. 16 insufficient on their own to confer jurisdiction. 17 at 609; One True Vine, 2011 WL 2148933, at *6. 18 provide evidence that defendants are “cultivat[ing]. . . 19 nationwide audiences for commercial gain,” Mavrix, 647 F.3d at 20 1230, and that California is a part of that desired audience. 21 Cf. Love, 611 F.3d at 609 (no jurisdiction where the defendant’s 22 allegedly harmful acts were directed entirely at markets in 23 Ireland and the United Kingdom); Schwarzenegger, 374 F.3d at 807 24 (no jurisdiction where defendant’s “express aim was local”). 25 Defendants have not made any California sales and, These facts, again, would be Love, 611 F.3d However, they do 26 because they do not hold any California licenses, cannot directly 27 make any California sales. 28 however, does not end the inquiry as jurisdiction can be The lack of sales in the forum, 15 1 established in the absence of sales to forum residents. See 2 Brayton Purcell, 606 F.3d at 1129-30 (jurisdiction existed even 3 though defendant law firm had not accepted any forum residents as 4 clients); CollegeSource, Inc., 2011 WL 3437040, at *2 5 (jurisdiction existed even though website had no paying customers 6 who were forum citizens). 7 intentions. 8 website indicates that they intend to enter California markets in 9 the future and to interest prospective California consumers in What is significant are defendants’ See Schwarzenegger, 374 F.3d at 807. Defendants’ 10 their product. 11 defendants have said or done indicates that their “express aim” 12 was directed at forums other than California. 13 Unlike the defendants in Schwarzenegger, nothing Id. “Not all material placed on the Internet is, solely by 14 virtue of its universal accessibility, expressly aimed at every 15 state in which it is accessed,” Mavrix, 647 F.3d at 1231, but in 16 this case defendants’ business plan is to target all fifty 17 states, including California. 18 online with “every reason to believe prospective [customers] in 19 [the forum] would see the website--indeed, attracting new 20 business was the point.” 21 Plaintiff’s allegations are enough to suggest that defendants 22 online activities are intended to attract California consumers 23 for commercial gain, a fact which supports a finding that 24 jurisdiction exists. 25 26 Defendants placed their website Brayton Purcell, 606 F.3d at 1130. iii. Individual Targeting The third factor upon which courts have relied to show 27 express aiming is individualized targeting of a forum resident. 28 In the Ninth Circuit, “the ‘expressly aimed’ prong of the 16 1 purposeful direction test is met where a plaintiff alleges that 2 the defendant individually targeted him by misusing his 3 intellectual property on the defendant’s website for the purpose 4 of competing with the plaintiff in the forum.” 5 609 n.4. 6 with forum residents “enable or contribute to the promotion 7 activities that [give] rise to the law suit.” 8 9 Love, 611 F.3d at The plaintiff must show that the defendant’s contacts Id. at 609. Plaintiff seems to believe it sufficient to claim that defendants knew that it was located in California and therefore 10 individually targeted it in the forum when it made use of its 11 trademarked material. 12 be satisfied by reciting the same facts used to show that 13 defendant caused harm it knew plaintiff was likely to suffer in 14 the forum state. 15 2011 WL 2148933, at *4 (“[T]he infringement of a plaintiff’s 16 intellectual property rights with knowledge that plaintiff’s 17 operations are based in the forum and that the harm will be felt 18 there, is insufficient to establish personal jurisdiction without 19 a further showing that the defendant otherwise expressly aimed 20 its activities at the forum.”). 21 However, the expressly aimed prong cannot Pebble Beach, 647 F.3d at 1158; One True Vine, In CollegeSource, one website offering college referral 22 services copied material from a competitor’s website and posted 23 it on its own site. 24 made phone calls and sent emails and letters to the plaintiff 25 seeking to purchase the copied material. 26 3437040, at *1-*2. 27 were a part of the defendant’s efforts to obtain and make 28 commercial use of the plaintiff’s copyrighted material and showed Prior to posting the material, the defendant CollegeSource, 2011 WL The court found that these communications 17 1 that in posting the infringing materials defendant had 2 intentionally aimed at the plaintiff in the forum. 3 Id. at *9. Defendants, unlike those in CollegeSource, did not have 4 any contacts with the forum state that enabled or contributed to 5 their promotional activities. 6 intentionally misused plaintiff’s trademarks in order to exploit 7 its brand and undermine it in California markets. 8 allegations might be sufficient to create a jurisdictional basis 9 on an individual targeting theory, defendants contested this Plaintiff alleges that defendants While such 10 allegation by filing the affidavit of Jerry Knight, in which he 11 claims that defendants’ product line was developed without 12 reference to plaintiff’s and is not part of a scheme to exploit 13 plaintiff’s trademarks. 14 defendant has contradicted allegations in the complaint, the 15 burden is on the plaintiff to present admissible evidence which 16 would support the challenged allegations, Harris Rutsky, 328 F.3d 17 at 1129, and plaintiff has not met that burden. 18 Purcell, 606 F.3d at 1129 (defendant’s “conclusory denial” 19 inadequate to rebut plaintiff’s allegation of intentional 20 copyright violations). 21 distributor did not bear fruit, and so cannot form the basis for 22 jurisdiction. 23 forum residents did not contribute to the promotion activities 24 that gave rise to the law suit and so could not form a basis for 25 jurisdiction). 26 (Knight Decl. II ¶¶ 7-12) Once a Cf. Brayton Defendants discussions with a California See Love, 611 F.3d at 609 (failed discussions with When each factor is examined in isolation, defendants’ 27 individual actions are insufficient to show express aiming. 28 viewed in the aggregate, however, defendants’ national marketing 18 When 1 strategy is revealed as, in part, an effort by defendants “to 2 avail itself of the benefits of the [forum] market.” 3 F.3d at 609 (quoting Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 4 1191, 1193 (9th Cir. 1988)). 5 defendants employ several websites that they use to interact with 6 customers and potential customers in order to get people excited 7 about their product, whether it is available on store shelves in 8 their state or not. 9 material to which a forum resident informed them it held Love, 611 As a part of this strategy, In these online activities, defendants use 10 trademark rights. 11 defendants’ online activities are commercial activities aimed in 12 part at potential customers in the forum. 13 allegations as a whole tend to show express aiming, and therefore 14 are sufficient to meet the effects test, the court will address 15 the remaining prongs of the Ninth Circuit specific jurisdiction 16 test. 17 18 B. Although they do not make sales online, Because plaintiff’s Arising Out Of A court cannot establish personal jurisdiction over a 19 defendant unless a plaintiff can show that its claims “arise[] 20 out of the defendant’s forum related activities.” 21 141 F.3d at 1322. 22 determines that a plaintiff would not have suffered injury “but 23 for” the conduct directed by the defendant towards the plaintiff 24 in the forum state. 25 Panavision, This requirement is met if the court Id. Plaintiff alleges that defendants’ use of its 26 trademarks was intended to damage the value of those trademarks 27 and to build a national brand by exploiting the goodwill that 28 plaintiff has created. Although defendants did not specifically 19 1 target their online advertisements at a particular state, they 2 also did not pursue a regional or state-specific strategy. 3 Instead they targeted all fifty states, including California. 4 Plaintiff claims that defendants’ online activities have caused 5 customer confusion and damaged their brand’s value. 6 purposes of this motion, the court must take allegations that the 7 defendant has not contradicted as true. 8 at 1129. For the Harris Rutsky, 328 F.3d According to plaintiff’s allegations, but for the 9 10 online advertising campaign defendants carried out, it would not 11 have suffered the complained of injuries. 12 has met its burden to allege facts sufficient to show that its 13 claims arise out of defendants’ forum related activity, and has 14 satisfied all three factors necessary to establish a prima facie 15 case for specific jurisdiction. 16 17 C. Accordingly, plaintiff Reasonableness Once a plaintiff has established a prima facie case 18 that specific jurisdiction is constitutional, the burden shifts 19 to the defendant to demonstrate why jurisdiction would be 20 unreasonable in light of traditional considerations of fair play 21 and substantial justice. 22 Burger King, 471 U.S. at 477). 23 must present a “compelling case that the presence of some other 24 considerations would render jurisdiction unreasonable.” 25 Garcia, 942 F.2d 617, 625 (quoting Shute v. Carnival Cruise 26 Lines, 897 F.2d 377, 386 (9th Cir. 1990)) (emphasis in original). 27 The Ninth Circuit considers seven factors in determining whether 28 jurisdiction would be reasonable: “(1) the extent of the Dole Food, 303 F.3d at 1114 (citing To meet this burden, a defendant 20 Roth v. 1 defendant’s purposeful injection into the forum state’s affairs; 2 (2) the burden on the defendant of defending in the forum; (3) 3 the extent of conflict with the sovereignty of the defendant’s 4 state; (4) the forum state’s interest in adjudicating the 5 dispute; (5) the most efficient judicial resolution of the 6 controversy; (6) the importance of the forum to the plaintiff’s 7 interest in convenient and effective relief; and (7) the 8 existence of an alternative forum.” 9 Psychoanalytical Ass’n, 59 F.3d 126, 128 (9th Cir. 1995). Caruth v. Int’l 10 Defendants raise arguments related to only factors (2), (4), and 11 (5). Defendants are headquartered in Indiana so it is likely 12 13 they will be burdened by having to litigate these claims in a 14 California court. 15 to litigate this case in California than it would be to litigate 16 it in their home state, it will be only marginally more 17 difficult. 18 telecommunications and the increasing interstate practice of law, 19 any burden [of litigating in a forum other than one’s residence] 20 is substantially less than in days past.” 21 3437040, at *12 (citing Menken, 503 F.3d at 1060); see also CE 22 Distrib., LLC v. New Sensor Corp., 380 F.3d 1107, 1112 (9th Cir. 23 2004) (burden on New York resident of litigating in Arizona 24 weighed only “slightly” in defendant’s favor). 25 While it may be more difficult for defendants “With the advances in transportation and CollegeSource, 2011 WL It is not clear that a California forum would be 26 unreasonably inefficient. Documents and witnesses pertinent to 27 establishing the facts in dispute may be located in Indiana, but 28 one of the two full-time employees employed by defendants lives 21 1 in Illinois, (Knight Decl. II ¶ 12), and plaintiff has indicated 2 that it believes it will need to call several California 3 residents in order to put on its case, (Reidl Decl. ¶ 9). 4 Defendants have not shown that considerations of efficiency 5 dictate that the litigation be removed from California, 6 especially since “this factor is ‘no longer weighed heavily given 7 the modern advances in communication and transportation.’” 8 Harris Rutsky, 328 F.3d at 1133 (quoting Panavision Int’l, 141 9 F.3d at 1323). Contrary to defendants’ claims, California does have an 10 11 interest in adjudicating this suit. 12 has been injured by defendants’ tortious conduct, and California 13 has an interest in protecting its citizens, of which plaintiff is 14 one, from injury. 15 in providing an effective means for redress for its residents 16 [who are] tortiously injured” (quoting Sinatra, 854 F.2d at 17 1200)). 18 Plaintiff alleges that it Id. (“California maintains a strong interest Defendants have not met the “heavy burden” they face 19 “in proving a ‘compelling case’ of unreasonableness to defeat 20 jurisdiction.” 21 true given that exercising jurisdiction in California would not 22 conflict with the sovereignty of the defendant’s state. 23 Plaintiff’s claims arise under federal law and analysis of those 24 federal claims would be the same in California or in Illinois, 25 therefore defendants would not be held subject to the laws of a 26 foreign jurisdiction. 27 28 Dole Food, 303 F.3d at 1117. This is especially Panavision, 141 F.3d at 1323. The court additionally notes that the Ninth Circuit has taken a “flexible approach” to personal jurisdiction. 22 Ochoa v. 1 J.B. Martin and Sons Farms, Inc., 287 F.3d 1182, 1189 n.2 (9th 2 Cir. 2002) (citing Brand v. Menlove Dodge, 796 F.2d 1070, 1074 3 (9th Cir. 1986). 4 jurisdiction “can be established with a lesser showing of minimum 5 contacts where considerations of reasonableness dictate.” 6 (citing Haisten v. Grass Velley Med. Reimbursement Fund, Ltd., 7 784 F.2d 1392, 1397 (9th Cir. 1986)). 8 jurisdiction admit of no simple solutions and . . . ultimately 9 due process issues of reasonableness and fairness must be decided Under this flexible approach, personal Id. “Questions of personal 10 on a case-by-case basis.” 11 Steel Bldgs. Corp., No. CV-08-854, 2009 WL 1476990, at *11 (May 12 26, 2009, E.D. Cal. 2009) (quoting Forsythe v. Overmyer, 576 F.2d 13 779, 783 (9th Cir. 1978)). 14 cases in which the defendant has not purposely directed its 15 activities at the forum state, but has created sufficient 16 contacts to allow the state to exercise personal jurisdiction if 17 such exercise is sufficiently reasonable.” 18 Co., Inc. v. DMH Ingredients, Inc., No. 07-2247, 2008 WL 1721903, 19 at *3 (E.D. Cal. 2008) (quoting Brand, 796 F.2d at 1074). 20 Davis Moreno Constr., Inc. v. Frontier “Under this analysis, there will be Golden Gate Beverage Where a defendant has created a website aimed at a 21 national audience with the express purpose of attracting a 22 national consumer base, it is not “random” or “fortuitous” for 23 residents in any one state to come into contact with the 24 defendants’ website. 25 website that deliberately creates and profits from its national 26 viewership and scope, over whom jurisdiction would be 27 appropriate, from a local or private internet post not intended 28 and not expected to be viewed throughout the country). Mavrix, 647 F.3d at 1231 (distinguishing a 23 1 Defendants may not have targeted California markets in their 2 advertising, but they also did not target their advertising at 3 specific states or make an effort to exclude California from 4 their advertising. 5 the ability to reach a national audience in an attempt to create 6 national demand for their product. 7 to hold them nationally accountable. 8 at 473-74 (“[W]here individuals ‘purposefully derive benefit’ 9 from their interstate activities, it may well be unfair to allow 10 them to escape having to account in other States for consequence 11 that arise predictably from such activities; the Due Process 12 Clause may not readily be wielded as a territorial shield . . . 13 .” (quoting Kulko v. California Superior Court, 436 U.S. 84, 96 14 (1978))). 15 Instead, they used technologies giving them It does not seem unreasonable See Burger King, 471 U.S. Defendants have asked that this proceeding be 16 transferred to the Southern District of Indiana. Under 28 U.S.C. 17 § 1391(b) and (c), in case predicated on federal claims, a 18 corporate defendant may be subject to jurisdiction in any venue 19 in which it is subject to personal jurisdiction. 20 1391(b)-(c). 21 jurisdiction over defendants, venue in this court is proper. 22 “For the convenience of parties or witness, in the 23 interest of justice, a district court may transfer any civil 24 action to any other district . . . .” 25 There is a strong presumption in favor of a plaintiff’s choice of 26 venue, and that choice will only be disturbed if a defendant can 27 make a “strong showing” that another venue is more convenient. 28 Gherebi v. Bush, 352 F.3d 1278, 1302 (9th Cir. 2003) (overruled 28 U.S.C. § As the court has determined that it has personal 24 28 U.S.C.A. § 1404(a). 1 on other grounds). In this case, shifting venue to Southern 2 Indiana would merely transfer the inconvenience of litigating in 3 another state from plaintiffs to defendants, and neither party 4 has shown that they would suffer disproportionate inconvenience. 5 As 28 U.S.C. 1304(a) “provides for transfer to a more convenient 6 forum, ‘not a more likely to prove equally convenient or 7 inconvenient,’” the court will not order transfer merely to shift 8 litigation inconveniences from one party to the other. 9 (quoting Van Dusen v. Barrack, 376 U.S. 612, 646 (1964). Id. 10 IT IS THEREFORE ORDERED that defendants’ motion to 11 dismiss for lack of personal jurisdiction or to transfer for 12 improper venue be, and the same hereby is, DENIED. 13 DATED: October 5, 2011 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?