Olivia Garden, Inc., v. Stance Beauty Labs, LLC, et al
Filing
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ORDER by Judge Haywood S. Gilliam, Jr. GRANTING DEFENDANT STANCE BEAUTY LABS, LLC'S 35 MOTION TO DISMISS.Case Management Statement due by 8/7/2018 and Case Management Conference set for 8/14/2018 02:00 PM in Oakland, Courtroom 2, 4th Floor. (ndrS, COURT STAFF) (Filed on 7/12/2018)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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OLIVIA GARDEN, INC.,
Plaintiff,
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v.
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STANCE BEAUTY LABS, LLC, et al.,
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United States District Court
Northern District of California
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Case No. 17-cv-05778-HSG
ORDER GRANTING DEFENDANT
STANCE BEAUTY LABS, LLC'S
MOTION TO DISMISS
Defendants.
Re: Dkt. No. 35
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Pending before the Court is Defendant Stance Beauty Labs, LLC’s (“Stance”) motion to
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dismiss Plaintiff Olivia Garden, Inc.’s (“Olivia Garden”) second amended complaint. See Dkt.
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No. 35 (“Mot.”); see also Dkt. No. 29 (“SAC”). Stance filed the motion on February 14, 2018.
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On February 28, 2018, Plaintiff filed an opposition. Dkt. No. 37 (“Opp.”). Stance replied on
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March 7, 2018. Dkt. No. 47 (“Reply”). After carefully considering the parties’ arguments, the
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Court GRANTS the motion.1
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I.
BACKGROUND
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On October 6, 2017, Olivia Garden brought this action against Stance and Burlington
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Stores, Inc., asserting claims for infringement of U.S. Design Patent No. D739,660 and U.S.
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Design Patent No. D762,069; trade dress infringement under 15 U.S.C. § 1125(a), and unfair
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competition. See Dkt. No. 1 at 9-13. On January 12, 2018, Olivia Garden voluntarily dismissed
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with prejudice all claims against Burlington Stores, Inc. Dkt. No. 23. Olivia Garden then filed the
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SAC on January 31, 2018, naming as Defendants Stance and Burlington Coat Factory of Texas,
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Inc. (“Burlington Texas”), and asserting the same claims as raised in the initial complaint. See
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The Court finds that this matter is appropriate for disposition without oral argument. See Civil
L.R. 7-1.
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SAC at 9-13. Now moving to dismiss the SAC, Stance argues that venue is improper in this
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district under 28 U.S.C. Section 1406(a) and Federal Rule of Civil Procedure 12(b)(3).
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II.
DISCUSSION
28 U.S.C. Section 1400(b) governs venue in patent cases. That statute provides that “[a]ny
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civil action for patent infringement may be brought in the judicial district where the defendant
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resides, or where the defendant has committed acts of infringement and has a regular and
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established place of business.” 28 U.S.C. § 1400(b). Recently, the Supreme Court clarified that
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“a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent
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venue statute.” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514, 1517
(2017). In reaching that holding, the Court rejected that Section 1400(b) incorporates the general
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United States District Court
Northern District of California
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venue statute’s definition of corporate residence. See id. (citing Fourco Glass Co. v. Transmirra
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Products Corp., 353 U.S. 222, 226 (1957)); 28 U.S.C. § 1391. Following that reasoning, the
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Federal Circuit in In re Cray Inc. interpreted the phrase a “regular and established place of
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business” to require a showing that “(1) there must be a physical place in the district; (2) it must be
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a regular and established place of business; and (3) it must be the place of the defendant.” See 871
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F.3d 1355, 1360-61 (Fed. Cir. 2017) (“Courts should be mindful of this history in applying the
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statute and be careful not to conflate showings that may be sufficient for other purposes, e.g.,
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personal jurisdiction or the general venue statute, with the necessary showing to establish proper
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venue in patent cases.”).
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Here, there is no dispute that Stance is incorporated in Connecticut. See Mot. at 3; Opp. at
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2. Olivia Garden also acknowledges that it lacks facts to show venue under the second prong of
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Section 1400(b). See Mot. at 3-4; Opp. at 2-3 (admitting that “Plaintiff presently lacks sufficient
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information to address” the question of whether “Stance ‘has committed acts of infringement and
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has a regular and established place of business’ in this district.’”). Rather, Plaintiff claims that the
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Court should exercise pendant venue over its claims against Stance. See Opp. at 2. Plaintiff
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argues that judicial economy considerations favor the Court’s exercise of pendent venue, as
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granting Stance’s motion would effectively bifurcate this matter into two separate actions. See id.
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Plaintiff alternatively requests that the Court defer a ruling on Stance’s motion, and allow it time
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to serve limited “venue discovery” to assess whether Stance maintains a regular and established
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place of business in this district. Id.
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Plaintiff’s arguments are unavailing. Plaintiff fails to present any authority, binding or
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otherwise, suggesting that courts after TC Heartland exercise pendent venue over third parties in
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patent infringement actions. The sole post-TC Heartland decision cited by the parties, Jenny Yoo
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Collection v. Waters Design Inc., supports that applying pendent venue would be improper under
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the circumstances. See Mot. at 4 (citing 2017 WL 4997838 (S.D.N.Y. Oct. 20, 2017)). In Jenny
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Yoo, the district court declined to exercise pendent venue over the plaintiff’s patent infringement
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claims, despite that venue in that district was undisputed for the plaintiff’s trade dress
infringement and unfair competition claims. See 2017 WL 4997838 at *5-7. In granting the
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United States District Court
Northern District of California
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defendant’s motion to dismiss for improper venue, the court agreed with others finding that TC
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Heartland’s narrow reading of Section 1400(b) affected a “‘sea change’ in patent venue law.” Id.
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at *5 (citing OptoLum, Inc. v. Cree, Inc., No. CV-16-3828-PHX-DLR, 2017 WL 3130642, at *2–3
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& n.1 (D. Ariz. July 24, 2017) (collecting cases)).
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At least two courts in this circuit have adopted similar reasoning in declining to exercise
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pendent venue over patent infringement claims. Citing Jenny Yoo with approval, the district court
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in California Expanded Metal Prod. Co. v. Klein observed that most courts have “typically applied
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one of two approaches, focusing either on the specificity of the respective venue statutes at issue
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or, alternatively, on the ‘primary claim’ at issue.” No. CV1800242DDPMRWX, 2018 WL
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2041955, at *2 (C.D. Cal. Apr. 30, 2018) (citing 2017 WL 4997838 at *7); accord Wet Sounds,
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Inc. V. Powerbass USA, Inc., No. CV H–17–3258, 2018 WL 1811354 (S.D. Tex. Apr. 17, 2018)
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(finding that the plaintiff’s “primary claims” were for patent infringement, and thus that pendent
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venue was not justified). The California Expanded Metal court accordingly opined that “[i]n the
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wake of TC Heartland’s prescription that Section 1400(b) ‘is the sole and exclusive provision
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controlling venue in patent infringement actions and is not to be supplemented by § 1391(c),’ the
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specificity-focused approach weighs against the application of pendent venue to cases involving
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patent claims.” Id. (citing 137 S. Ct. at 1519). The Court subsequently rejected the plaintiff’s
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request to exercise pendent venue over the claims before it.
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So too in Nat’l Prod., Inc. v. Arkon Res., Inc., No. C15-1984JLR, 2018 WL 1457254, at
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*6-7 & n.6 (W.D. Wash. Mar. 23, 2018). In National Products, the district court declined to apply
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the pendent venue doctrine to the plaintiff’s patent infringement claims, despite that venue was
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undisputed for the plaintiff’s six other causes of action (which again included claims for trade
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dress infringement and unfair competition, as here). See 2018 WL 1457254 at *6-7. In reaching
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that conclusion, the court found that the specific requirements of Section 1400(b) precluded venue
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for the plaintiff’s patent claim “regardless of whether venue may be appropriate in this district for
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other claims.” Id. at *7. The court also rejected the plaintiff’s argument that judicial economy
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considerations merited the court’s retention of the patent infringement issues, noting that
efficiency rationales underlie a court’s decision whether to transfer an action, not whether venue is
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United States District Court
Northern District of California
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proper. See id. (citing 28 U.S.C. § 1404(a)).
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Though not binding on the Court, these decisions are persuasive and their reasoning
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applies here. Notably, Plaintiff acknowledges that the “‘primary’ claim serving as the basis for
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pendent venue” is its cause of action for patent infringement. Opp. at 4. Thus, a primary claims
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analysis supports declining the exercise of pendent venue in this case. Plaintiff, moreover, cites
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just one authority to support its assertion that a court can exercise pendent venue over additional
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defendants. See id.; Pacer Glob. Logistics, Inc. v. Nat'l Passenger R.R. Corp., 272 F. Supp. 2d
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784, 787 (E.D. Wis. 2003). But that case predates TC Heartland, was not a patent infringement
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action, and involved a markedly different claim: compensation for damages to cargo under the
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Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11707. See id. In view of TC
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Heartland, Plaintiff fails to meet its burden of showing that this district is a proper venue for its
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patent action against Stance.
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Plaintiff asserts that declining pendent venue over its claims against Stance would waste
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time and resources by bifurcating this matter into two separate suits on “opposite sides of the
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country.” See Opp. at 5. But, at this stage, Plaintiff’s argument is pure conjecture: Plaintiff does
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not claim, nor does it appear, that it has initiated this separate suit. Plaintiff has similarly failed to
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brief the issue of transfer, or request that the Court transfer this action to a district where venue
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would be proper. See Nat’l Prod., Inc., 2018 WL 1457254, at *7 (finding that the transfer statute,
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not the venue statute, is concerned with judicial economy considerations); see also Wet Sounds,
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Inc., 2018 WL 1811354, at *3 (“The problem is that venue must be proper as to each defendant,
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and it is not proper as to PowerBass. Under these circumstances, the court may not retain venue
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as to that defendant, even if judicial economy would support that.”).
Finally, Plaintiff fails to adequately justify its request for additional venue discovery.
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Plaintiff does not explain what new facts additional discovery would unearth. See Opp. at 7-8.
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Defendant has submitted a declaration from Samuel Lubliner, Stance’s President and Managing
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Member, stating that: (1) Stance is incorporated in Connecticut; (2) Stance has never maintained a
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place of business in California; (3) Stance does not own or lease any offices or retail locations in
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California; (4) none of Stance’s officers or employees reside in or have offices in California; (5)
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United States District Court
Northern District of California
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none of Stance’s books or records, and none of the officers and employees of Stance
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knowledgeable concerning those books and records, are located or reside in California; and (6)
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Stance has never attempted to become qualified or licensed to do business in California. Dkt. No.
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19-1 (“Lubliner Decl.”) ¶¶ 2-7. Plaintiff does not substantively dispute the content of Lubliner’s
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declaration. Accordingly, the Court finds in its discretion that additional venue discovery is not
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justified.
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III.
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CONCLUSION
For these reasons, Stance’s motion to dismiss is GRANTED without prejudice to
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Plaintiff’s ability to refile its claims against Stance in the proper venue. The Court VACATES the
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parties’ initial Case Management Conference (“CMC”) set for Thursday, July 19, 2018, and SETS
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the initial CMC for Tuesday, August 14, 2018 at 2:00 p.m. The parties must file a revised initial
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CMC statement with a proposed case schedule by August 7, 2018.
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IT IS SO ORDERED.
Dated: 7/12/2018
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge
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