Natural Wellness Centers of America, Inc. v. Golden Health Products, Inc. et al

Filing 40

ORDER by Judge Claudia Wilken DENYING ( 19 , 20 MOTION TO DISMISS AND 10 REQUEST TO TRANSFER. (ndr, COURT STAFF) (Filed on 1/22/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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NATURAL WELLNESS CENTERS OF
AMERICA, INC.,

v.

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GOLDEN HEALTH PRODUCTS, INC., et
al.,

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Defendants.
________________________________/

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United States District Court
For the Northern District of California

ORDER DENYING
MOTION TO DISMISS
(Docket Nos. 19 &
20) AND REQUEST TO
TRANSFER (Docket
No. 10)

Plaintiff,

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No. C 12-05586 CW

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Defendants Golden Health Products, Inc. and Mary Faith Hunt

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move to dismiss for lack of personal jurisdiction or to transfer

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to the Central District of Illinois.

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Centers of America, Inc. opposes the motion and requests in the

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alternative that the case be transferred to the Central District

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of California.

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and oral argument, the Court denies Defendants’ motion to dismiss

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or transfer and denies Plaintiff’s alternative request to

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transfer.

Having considered all of the parties’ submissions

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Plaintiff Natural Wellness

BACKGROUND
Plaintiff is a nutritional supplements company based in

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Laguna Hills, California.

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In 2002, it launched its “PRO-BIOTICS PLUS” dietary supplement and

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began marketing and selling the supplement under that mark through

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websites and other retail channels.

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obtained a certificate of registration, Registration No.

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2,767,607, from the U.S. Patent and Trademark Office (PTO) for the

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mark in September 2003.

Declaration of John R. Taylor ¶¶ 3-6.

Id.

Id. ¶ 6.

The company

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Defendant GHP is a nutritional supplements company based in

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Quincy, Illinois, that markets and sells its supplements over the

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internet.

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shareholder, director, and employee is Defendant Hunt, who

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operates the business out of her residence.

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selling certain supplements under the mark “Flora Probiotic Plus”

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in 2008.

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registration for the mark, Registration No. 3,918,597, after the

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PTO “found no conflicting marks that would bar registration.”

United States District Court
For the Northern District of California

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Declaration of Mary F. Hunt ¶¶ 2, 5.

Id. ¶ 8.

Its sole

Id. ¶ 4.

GHP began

In February 2011, it obtained a certificate of

Id.

¶¶ 12-14, Ex. A, PTO Records, at 2.

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In November 2010, Plaintiff learned that Defendants were

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selling nutritional supplements under the “Flora Probiotic Plus”

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mark.

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infringing its “PRO-BIOTICS PLUS” mark, Plaintiff sent a cease-

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and-desist letter to one of Defendants’ online retailers later

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that month.

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one of its distributors and informed Defendants about Plaintiff’s

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concerns.

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Taylor Decl. ¶ 14.

Id.

Believing that Defendants were

The retailer responded that the mark belonged to

Id., Ex. 6.

On October 31, 2012, Plaintiff filed this action against

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Defendants alleging that they are infringing Plaintiff’s “PRO-

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BIOTICS PLUS” mark.

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2012, Plaintiff requested that this case be transferred to the

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Central District of California in order to preempt Defendants’

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forthcoming request for a transfer to the Central District of

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Illinois.

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dismiss Plaintiff’s complaint or, in the alternative, to transfer

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the action to the Central District of Illinois.

Docket No. 1, Compl. ¶ 1.

On November 27,

Three days later, on November 30, Defendants moved to

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LEGAL STANDARD
I.

Personal Jurisdiction

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Under Federal Rule of Civil Procedure 12(b)(2), a defendant

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may move to dismiss an action for lack of personal jurisdiction.

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The plaintiff then bears the burden of demonstrating that the

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court has jurisdiction.

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374 F.3d 797, 800 (9th Cir. 2004).

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plaintiff “need only demonstrate facts that if true would support

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jurisdiction over the defendant.”

Schwarzenegger v. Fred Martin Motor Co.,
To satisfy this burden, the

Ballard v. Savage, 65 F.3d

United States District Court
For the Northern District of California

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1495, 1498 (9th Cir. 1995).

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complaint must be taken as true.

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Lambert, 94 F.3d 586, 588 (9th Cir. 1996).

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not assume the truth of such allegations if they are contradicted

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by affidavit.

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F.2d 1280, 1284 (9th Cir. 1977).

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admissible evidence, conflicts in the evidence must be resolved in

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the plaintiff’s favor.

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Uncontroverted allegations in the
AT & T v. Compagnie Bruxelles
However, the court may

Data Disc, Inc. v. Systems Tech. Assocs., Inc., 557
If the plaintiff also submits

AT & T, 94 F.3d at 588.

There are two independent limitations on a court’s power to

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exercise personal jurisdiction over a non-resident defendant: the

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applicable state personal jurisdiction rule and constitutional

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principles of due process.

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(9th Cir. 1990).

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co-extensive with federal due process requirements, jurisdictional

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inquiries under state law and federal due process standards merge

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into one analysis.

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(9th Cir. 1993).

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jurisdiction over a non-resident defendant will violate due

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process unless the defendant has established such “minimum

Sher v. Johnson, 911 F.2d 1357, 1361

Because California’s jurisdictional statute is

Rano v. Sipa Press, Inc., 987 F.2d 580, 587

Under that analysis, the exercise of

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contacts” with the forum state that the exercise of jurisdiction

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“does not offend traditional notions of fair play and substantial

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justice.”

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Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

The court’s exercise of personal jurisdiction may be either

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general or specific.

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defendant maintains significant contacts with the forum state,

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even if the cause of action is unrelated to those contacts.

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Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,

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414 (1984).

General jurisdiction exists when the

Specific jurisdiction, in contrast, exists when the

United States District Court
For the Northern District of California

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cause of action arises out of the defendant’s contacts with the

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forum state, even if those contacts are isolated and sporadic.

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Data Disc, 557 F.2d at 1287 (9th Cir. 1977).

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II.

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Transfer of Venue
A district court may grant a discretionary change of venue

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pursuant to 28 U.S.C. § 1404(a), which provides: “For the

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convenience of parties and witnesses, in the interest of justice,

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a district court may transfer any civil action to any other

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district or division where it might have been brought.”

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statute identifies three basic factors for district courts to

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consider in determining whether a case should be transferred:

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(1) convenience of the parties; (2) convenience of the witnesses;

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and (3) the interests of justice.

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identified numerous additional factors a court may consider in

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determining whether a change of venue should be granted:

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The

The Ninth Circuit has

(1) the location where the relevant agreements were
negotiated and executed, (2) the state that is most
familiar with the governing law, (3) the plaintiff’s
choice of forum, (4) the respective parties’ contacts
with the forum, (5) the contacts relating to the
plaintiff’s cause of action in the chosen forum, (6) the
differences in the costs of litigation in the two
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forums, (7) the availability of compulsory process to
compel attendance of unwilling non-party witnesses, and
(8) the ease of access to sources of proof.

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Jones v. GNC Franchising Inc., 211 F.3d 495, 498–99 (9th Cir.
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2000).
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The burden is on the movant to show that the convenience of
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parties and witnesses and the interests of justice require
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transfer to another district.

Commodity Futures Trading Comm’n v.

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Savage, 611 F.2d 270, 279 (9th Cir. 1979).

The Supreme Court has

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ruled that the § 1404(a) analysis should be an “individualized,
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case-by-case consideration of convenience and fairness.”

Van

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United States District Court
For the Northern District of California

Dusen v. Barrack, 376 U.S. 612, 622 (1964).
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DISCUSSION
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I.

Personal Jurisdiction

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Defendants contend that their contacts with California are
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too tenuous to support personal jurisdiction in this forum.

Hunt

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highlights the fact that she resides and operates GHP in Illinois,
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where the company is incorporated.

Hunt Decl. ¶¶ 19-20.

She has

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never registered GHP as a foreign corporation in California or
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designated an agent for service of process there.

Id.

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Furthermore, neither she nor GHP owns or leases any property in
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California.

Id. ¶¶ 16-17.

Hunt asserts that she has never

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travelled to California for business, used the California court
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system (outside of this case), or operated any facilities -23
whether for GHP or any other company -- in California.

Id. ¶¶ 18,

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27-28.
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Defendants’ sole contact with California residents is through
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GHP’s websites, which are “equally accessible to all residents of
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the United States and to persons worldwide.”
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Id. ¶¶ 25-26.

GHP

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accepts orders through these sites and ships its products to

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customers around the country, including in California.

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¶¶ 29-30.

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reside in California and that sales to these customers have

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generated roughly $191,000 in total revenue since April 2008.

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¶ 30.

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supports both general and specific jurisdiction in California.

Id.

Hunt estimates that fourteen percent of GHP’s customers

Id.

Plaintiff contends that this online commercial activity

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A.

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A defendant implicitly consents to personal jurisdiction in a

General Jurisdiction

United States District Court
For the Northern District of California

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foreign state by undertaking “continuous and systematic”

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activities within that state.

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Compagnie des Bauxites de Guinee, 456 U.S. 694, 703-04 (1982).

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Here, Plaintiff argues that Defendants consented to this Court’s

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jurisdiction by marketing and selling their products to California

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residents through their websites.

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Insurance Corp. of Ireland, Ltd. v.

The Ninth Circuit rejected this argument in CollegeSource,

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Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1075-76 (9th Cir. 2011).1

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There, the court held that the mere maintenance of an interactive

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website is insufficient to support general jurisdiction over a

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foreign defendant, even if residents of the forum state visit the

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website and make purchases through it.

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reasoned, “If the maintenance of an interactive website were

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sufficient to support general jurisdiction in every forum in which

Id. at 1075-76.

The court

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Plaintiff recently made the same argument in another case in this
district. The court, relying on CollegeSource, rejected the argument.
Natural Wellness Ctrs., Inc. v. J.R. Andorin, Inc., 2012 WL 216578, at
*4 (N.D. Cal.) (“The maintenance of an interactive business website that
can be accessed by California residents is not sufficient to support
general jurisdiction.”).

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users interacted with the website, ‘the eventual demise of all

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restrictions on the personal jurisdiction of state courts’ would

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be the inevitable result.”

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Id. (citations omitted).

Although CollegeSource recognized that a defendant could be

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subject to general jurisdiction in a foreign court if its website

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generated “substantial and continuous commerce with the forum,”

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id. at 1075, Defendants’ online activities do not meet this

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standard.

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California sales revenue over the past four and a half years -- an

Their website has generated less than $191,000 in

United States District Court
For the Northern District of California

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average of roughly $3400 per month.

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than fifteen percent of Defendants’ total product sales.

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more, these sales have not prompted Defendants to travel to

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California, send sales agents there, or tailor their marketing

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towards the state in any way.

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Circuit decisions make clear that Defendants’ activities are

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insufficient to support general jurisdiction.

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Hustler Magazine, Inc., 465 U.S. 770, 772, 779 & n.11 (1984)

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(finding no general jurisdiction despite defendant’s circulation

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of 10,000–15,000 magazine sales in the forum state every month);

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Congoleum Corp. v. DLW Aktiengesellschaft, 729 F.2d 1240, 1242

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(9th Cir. 1984) (refusing to find general jurisdiction even when

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defendants’ forum-state activities included soliciting orders,

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promoting products to potential customers through the mail,

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maintaining a showroom display, and attending trade shows and

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sales meetings).

These sales constitute less
What’s

Past Supreme Court and Ninth

Cf. Keeton v.

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B.

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Courts in this circuit use a three-prong test to determine

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Specific Jurisdiction

whether they may assert specific jurisdiction in a particular
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case: (1) the foreign defendant must purposefully direct its

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activities or consummate some transaction with the forum or a

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resident thereof, or perform some act by which it purposefully

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avails itself of the privilege of conducting business in the

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forum, thereby invoking the benefits and protections of its laws;

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(2) the claim must be one which arises out of or results from the

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defendant’s forum-related activities; and (3) the exercise of

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jurisdiction must be reasonable.

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1421 (9th Cir. 1987).

Lake v. Lake, 817 F.2d 1416,

Each of these conditions must be satisfied

United States District Court
For the Northern District of California

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to assert jurisdiction.

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Cruz, 649 F.2d 1266, 1270 (9th Cir. 1981).

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1.

Insurance Co. of N. Am. v. Marina Salina

Purposeful Direction or Availment

The Ninth Circuit relies on a “sliding scale analysis” to

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determine whether a defendant’s online activities constitute

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“purposeful direction or availment.”

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F.3d 1011, 1018 (9th Cir. 2008).

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examines “the ‘level of interactivity and commercial nature of the

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exchange of information that occurs on the [defendant’s] Web site’

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to determine if sufficient contacts exist to warrant the exercise

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of jurisdiction.”

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414, 418 (9th Cir. 1997) (citations omitted).

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merely maintains a “passive website” and does “nothing to

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encourage residents of the forum state to access [the] site” will

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not be subject to jurisdiction on that basis.

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Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1020 (9th Cir. 2000).

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Rather, the plaintiff must show “‘something more’ to indicate that

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the defendant purposefully (albeit electronically) directed his

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activity in a substantial way to the forum state.”

Boschetto v. Hansing, 539

Under that analysis, the court

Cybersell, Inc. v. Cybersell, Inc., 130 F.3d

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A defendant who

Rio Properties,

Cybersell, 130

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F.3d at 418; see also Pebble Beach Co. v. Caddy, 453 F.3d 1151,

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1156 (9th Cir. 2006) (requiring “something more” than a passive

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website to confer specific jurisdiction in a trademark

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infringement action).

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District courts in this circuit have generally found that

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online product sales to residents of the forum are sufficient to

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satisfy this “something more” requirement in trademark

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infringement cases.

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Grand Forks, Inc., 2012 WL 4755041, *4 (N.D. Cal.) (“Vanity Shop

See, e.g., Vanity.com, Inc. v. Vanity Shop of

United States District Court
For the Northern District of California

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argues that merely selling to California customers via its website

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is insufficient to confer personal jurisdiction.

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disagrees.”); Smith Enter., Inc. v. Capital City Firearms, 2008 WL

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2561882, at *5 (D. Ariz.) (finding purposeful direction where

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“Defendant maintained an interactive website and consummated over

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100 sales” with residents of the forum state); Salu, Inc. v.

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Original Skin Store, 2008 WL 3863434, at *5 (E.D. Cal.)

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(“[Defendant’s] sales to California customers . . . constituted

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approximately 14% of its total business.

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intentionally engaged in commercial transactions with California

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residents.”).2

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subject to personal jurisdiction in the forum even though online

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sales to residents of the forum made up a relatively small share

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of the defendant’s business.

The Court

As such, defendant

These courts all concluded that the defendant was

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One of the only cases to reach a different conclusion was the
case that Plaintiff brought in this district last year. See Natural
Wellness, 2012 WL 216578, at *7 (holding that the defendant’s “use of
interactive websites is not sufficient to subject [it] to personal
jurisdiction in California”). Nevertheless, the court in that case
found other grounds to support specific jurisdiction. Id.

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Here, Defendants concede that California residents make up

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fourteen percent of their customers and that California sales

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constitute sixteen percent of their revenue.

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enough to satisfy the purposeful direction prong.

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2012 WL 4755041, at *3 (finding specific jurisdiction where

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defendant’s online sales to forum state made up “approximately

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0.02% of [] total sales”); Smith Enter., 2008 WL 2561882, at *2

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(“2.75% of Defendant’s total revenues”); Salu, 2008 WL 3863434, at

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*5 (“14% of [defendant’s] total business”); Starlight Int’l, Ltd.

This is more than
Cf. Vanity.com,

United States District Court
For the Northern District of California

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v. Lifeguard Health, LLC, 2008 WL 2899903, at *2 (N.D. Cal.)

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(“0.24% of sales”).

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2.

Arising from Defendants’ Forum-Related Activities

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To determine whether the plaintiff’s claims arise from the

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defendant’s forum-related activities -- the second prong of the

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specific jurisdiction test -- courts use a traditional “but for”

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causation analysis.

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Inc., 223 F.3d 1082, 1088 (9th Cir. 2000).

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recognized that, in trademark infringement actions, if the

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defendant’s infringing conduct harms the plaintiff in the forum

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state, this element is satisfied.

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see also Vanity.com, 2012 WL 4755041, at *4 (“[Plaintiff]’s claims

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arise out of defendant’s forum-related activities because

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[defendant]’s dealings with California customers enable it to

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profit from its alleged [trademark infringement].”).

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Bancroft & Masters, Inc. v. Augusta Nat’l,
The Ninth Circuit has

Panavision, 141 F.3d at 1322;

Here, Plaintiff alleges that Defendants’ alleged infringement

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led to sales in California that ultimately harmed Plaintiff’s

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business there.

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specific jurisdiction.

This allegation satisfies the second element of

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3.

Reasonableness

If the court finds that the first two elements of specific

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jurisdiction are satisfied, the defendant may escape the court’s

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jurisdiction only by showing that other considerations would

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render jurisdiction unreasonable.

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303 F.3d 1104, 1114 (9th Cir. 2002) (citing Burger King Corp. v.

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Rudzewicz, 471 U.S. 462, 477 (1985)).

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courts consider several factors, including the potential burden on

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the defendant, possible conflicts of law, the forum state’s

Dole Foods Co., Inc. v. Watts,

To evaluate reasonableness,

United States District Court
For the Northern District of California

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interest in adjudicating the dispute, and various other factors to

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“illuminate the considerations of fairness and due process.”

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Hedrick v. Daiko Shoji Co., Ltd., 715 F.2d 1355, 1359 (9th Cir.

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1983).

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Defendants have not shown that this Court’s exercise of

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jurisdiction would be unreasonable here.

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have generally found it reasonable to exercise jurisdiction over a

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foreign defendant on claims arising from that defendant’s

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commercial activity in California.

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4755041, at *4 (“[B]ecause Vanity Shop has purposefully injected

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itself in the stream of commerce in California, exercise of

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specific jurisdiction comports with fair play and substantial

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justice.”); Starlight Int’l, 2008 WL 2899903, at *7 (“As

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[defendant] has not presented a compelling reason to ignore

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California’s legitimate interest in protecting against alleged

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violations of a trademark registered to a California company,

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through products sold to Californians, this factor must swing in

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[plaintiff]’s favor.”).

Courts in this district

See, e.g., Vanity.com, 2012 WL

Thus, Defendants’ sales to California

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customers support specific jurisdiction over Plaintiff’s trademark

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infringement claims.

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II.

Transfer of Venue

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A.

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Defendants have not established that the Central District of

Defendants’ Request for Transfer

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Illinois is a more convenient forum for litigating this dispute.

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Although Defendants note that two of their non-party witnesses

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would benefit from a transfer, they fail to explain adequately how

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these witnesses’ testimony is material to this dispute.

See

United States District Court
For the Northern District of California

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Cochran v. NYP Holdings, Inc., 58 F. Supp. 2d 1113, 1119 (C.D.

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Cal. 1998) (“[T]he moving party must demonstrate, through

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affidavits or declarations containing admissible evidence, who the

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key witnesses will be and what their testimony will generally

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include.” (emphasis added)).

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Plaintiff’s witnesses, who reside in Southern California, would be

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significantly inconvenienced if this case were transferred to an

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Illinois court.

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does not support a transfer here.

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Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986)

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(upholding denial of the transfer request where transfer would

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“merely shift rather than eliminate the inconvenience”).

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Moreover, they ignore the fact that

Accordingly, Defendants’ convenience argument
See Decker Coal Co. v.

Defendants’ argument that the interests of justice weigh in

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favor of transfer here because of judicial vacancies in this

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district is similarly unavailing.

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specifically rejected this argument in the past, reasoning that

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“[n]either constitutional nor statutory rights of parties are

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suspended when there are judicial vacancies in a district.”

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v. Ashcraft & Gerel, 223 F.3d 1, 11 (1st Cir. 2000) (“While
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The First Circuit has

Coady

1

expressions of concern that the President and Congress fill

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existing judicial vacancies are appropriate in other contexts, it

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has no place in determining the rights of litigants under 28

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U.S.C. § 1404(a), and is not ‘in the interest of justice.’”

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(citations omitted)).

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B.

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Plaintiff only requested a transfer in the hopes of

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forestalling a transfer to the Central District of Illinois.

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Because Defendants’ request to transfer to that district is

United States District Court
For the Northern District of California

10

Plaintiff’s Request for Transfer

denied, Plaintiff’s motion is denied as moot.

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CONCLUSION
For the reasons set forth above, the Court DENIES Defendants’

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motion to dismiss or transfer (Docket Nos. 19 & 20) and DENIES

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Plaintiff’s request to transfer (Docket No. 10).

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motion to strike Plaintiff’s supporting declarations (Docket No.

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32) is also DENIED because the Court does not rely on any of

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statements to which Defendants object.

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evidentiary objections should be raised in the parties’ briefs,

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pursuant to Civil Local Rule 7-3.

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Defendants’

In the future, all

IT IS SO ORDERED.

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Dated: 1/22/2013

CLAUDIA WILKEN
United States District Judge

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