Factory Direct Wholesale, LLC v. Giantex, Inc. et al
Filing
19
OPINION AND ORDER denying Defendants Giantex, Inc., GoPlus Corp., and Wei Wu's Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue, or Alternatively, to Transfer Venue 10 . Signed by Judge William S. Duffey, Jr on 1/5/18. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
FACTORY DIRECT
WHOLESALE, LLC,
Plaintiff,
v.
1:17-cv-341-WSD
GIANTEX, INC., GOPLUS CORP.,
and WEI WU,
Defendants.
OPINION AND ORDER
This matter is before the Court on Defendants Giantex, Inc. (“Giantex”),
GoPlus Corp. (“GoPlus”), and Wei Wu’s (collectively, “Defendants”) Motion to
Dismiss for Lack of Personal Jurisdiction and Improper Venue, or Alternatively, to
Transfer Venue Pursuant to 28 U.S.C. § 1404(a) [10].
I.
BACKGROUND
Plaintiff Factory Direct Wholesale, LLC (“Factory Direct”) is a limited
liability company organized under the laws of the State of Georgia. Defendant
GoPlus is a California corporation that allegedly owns or controls Defendant
Giantex, also a California corporation. Defendant Wei Wu is an individual and
citizen of California. Mr. Wu is the Chief Executive Officer (“CEO”) of GoPlus
and allegedly has ownership interests in GoPlus and Giantex. (Compl. ¶ 5).
Factory Direct is a Georgia-based company with rights it asserts to certain
trademarks and trade names protected by state and federal law. Factory Direct
alleges that since 2005 it has been operating online marketplaces for various
products including home, office, pet, and health products using the following trade
names and trademarks: “Factory Direct Wholesale,” “FDW,” “BestPet,”
“BestOffice,” and “BestMassage.” (Compl. ¶ 11). Factory Direct has a federal
trademark registration issued by the U.S. Patent and Trademark Office for
“BestPet” (Registration No. 3934022). ([1.2]). BestPet refers to pet crates and
crate covers, pet furniture, and play yards for pets. (Compl. ¶ 14). Factory Direct
also alleges trademark registration for “BestOffice” and “BestMassage.” ([1.3],
[1.4]).
Factory Direct alleges that Defendants are unlawfully infringing its trade
names and trademarks in sales of certain products by Defendants on eBay.com and
Amazon.com. (Compl. ¶ 20). As an example of this claimed infringement,
Factory Direct attached to the Complaint an “Order Details” invoice for a pet
stroller (the “Stroller”) sold by Defendant Giantex under the BestPet name on
Amazon.com to a consumer in Duluth, Georgia. (Compl. Ex. 1 (the “Accused
2
Sale”)). The invoice shows that on or about January 19, 2015, Eastern
Enterprises, LLC in Duluth, Georgia ordered the Stroller from Giantex through
Amazon.com. (Compl. Ex. 1). Giantex is listed as the seller on the invoice. Id.
GoPlus shipped the Stroller to Eastern Enterprises at its Duluth, Georgia address.
(Declaration of Wei Wu [10.7] (“Wu Decl.”) ¶¶ 5-6).1 Factory Direct concedes
that Eastern Enterprises is its affiliate and that the Stroller was ordered by Eastern
Enterprises to document that Defendants were engaging in infringing sales.
On January 30, 2017, Factory Direct filed its Complaint for Damages and
Injunctive Relief [1] (the “Complaint” or “Compl.”). Factory Direct asserts claims
for infringement of a federally protected registered trademark under 15 U.S.C.§
1114 (Count I); unfair competition under 15 U.S.C. § 1125 (Count II); common
law trademark infringement (Count III); and violation of the Georgia Uniform
Deceptive Trade Practices Act, O.C.G.A. § 10-1-370 et seq. (Count IV). Factory
Direct seeks an injunction preventing Defendants from infringing on its trademarks
and trade names and a judgment for damages and unlawful profits generated by
Defendants unauthorized use of Factory Direct’s trademarks and trade names.
1
The invoice shows that Eastern Enterprises requested to return the Stroller.
(Compl. Ex. 1).
3
Factory Direct alleges that this Court has specific jurisdiction over each of
the Defendants because they each regularly transact, solicit, or conduct business in
Georgia, including deriving substantial revenue from internet sales of goods sold to
and used by consumers in Georgia and this judicial district. (Compl. ¶ 9).2
Factory Direct alleges only the Accused Sale as evidence of Defendants’ contacts
with Georgia.
On March13, 2017, Defendants filed their Motion to Dismiss for Lack of
Personal Jurisdiction and Improper Venue, or alternatively, Motion to Transfer
Venue [10].
Defendants submitted affidavits and other evidence of the nature and extent
of their contacts with the State of Georgia. The evidence submitted shows that
Defendant Wu is not a resident of Georgia. He maintains residences in Ningbo,
China, and San Bernardino County, California. He does not maintain a bank or
financial account in Georgia. (Wu Decl. ¶ 9). Mr. Wu does not own any real or
personal property or lease any real or personal property in Georgia. He does not
have an agent or representative in Georgia, and he has not conducted any business
in Georgia.
2
Plaintiff originally claimed to have both general and specific jurisdiction
over Defendants, but in their Response to the Motion, Plaintiff states that it is only
asserting specific jurisdiction. (See Pl’s Resp. [13] at 9 n.2).
4
Giantex and GoPlus do not have offices, bank or financial accounts,
telephone numbers, employees, agents, representatives, or real or personal
property, owned or leased, in Georgia; and their documents and records are
maintained at their places of business in California. (See Declaration of Tommy
Xu [10.2] (“Xu Decl.”) ¶¶ 2-3; Wu Decl. ¶¶ 2-3). Giantex and GoPlus are not
registered to do business in Georgia. (Xu Decl., ¶¶ 2-3; Wu Decl., ¶¶ 2-3).
Giantex and GoPlus do not provide services, advertise, solicit, or conduct business
activity directed to or in Georgia except “that Giantex Inc. sometimes sells
products to Georgia based on Internet orders placed by buyers through third party
Internet website [sic] that is accessible from anywhere in the United States, such as
Amazon.com.” (Xu Decl. ¶ 3). Similarly, “GoPlus ships products to Georgia
occasionally for Internet orders placed by buyers through third party Internet
website [sic] that is accessible from anywhere in the United States, such as
Amazon.com.” (Wu Decl. ¶ 3).
II.
DISCUSSION
A.
Personal Jurisdiction Principles
A plaintiff bears the burden of establishing personal jurisdiction over the
defendants against which it files an action. Consolidated Dev. Corp. v.
5
Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir. 2000); Diamond Crystal Brands, Inc.
v. Food Movers Intern., Inc., 593 F.3d 1249, 1257 (11th Cir. 2010).
A federal court undertakes a two-step inquiry in determining whether
personal jurisdiction exists: “the exercise of jurisdiction must (1) be appropriate
under the state long-arm statute and (2) not violate the Due Process Clause of the
Fourteenth Amendment to the United States Constitution.” United Techs. Corp. v.
Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). Georgia’s long-arm statute provides
limited circumstances in which a court may exercise personal jurisdiction over a
nonresident defendant “in the same manner as if he or she were a resident of this
state, if in person or through an agent, he or she . . . [t]ransacts any business within
this state.” O.C.G.A §§ 9-10-91(1).3
“The Due Process Clause requires that the defendant’s conduct and
connection with the forum State be such that he should reasonably anticipate being
haled into court there.” Diamond Crystal, 593 F.3d at 1267 (internal quotation
marks omitted) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474
(1985)). “The heart of this protection is fair warning” to the defendant. Id.; see
Licciardello v. Lovelady, 544 F.3d 1280, 1284 (11th Cir. 2008) (“The Constitution
3
Section 9-10-91 includes other bases for personal jurisdiction that are not
relevant here.
6
prohibits the exercise of personal jurisdiction over a nonresident defendant unless
his contact with the state is such that he has ‘fair warning’ that he may be subject
to suit there.”). “Therefore, states may exercise jurisdiction over only those who
have established certain minimum contacts with the forum such that the
maintenance of the suit does not offend traditional notions of fair play and
substantial justice.” Diamond Crystal, 593 F.3d at 1267 (quoting Helicopteros
Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414 (1984)). “The presence
of minimum contacts raises a presumption that the court may constitutionally
exercise jurisdiction” and, to rebut that presumption, the defendant “must present a
compelling case that the presence of some other considerations would render
jurisdiction unreasonable.” Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d
1210, 1221 n.29 (11th Cir. 2009) (internal quotation marks omitted) (quoting
Burger King, 471 U.S. at 477).
When a defendant files a motion to dismiss for lack of personal jurisdiction
and an evidentiary hearing is not held, “the plaintiff bears the burden of
establishing a prima facie case of jurisdiction over the movant, non-resident
defendant.” Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988). “A prima
facie case is established if the plaintiff presents enough evidence to withstand a
motion for directed verdict.” Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.
7
1990). A party presents enough evidence to withstand a motion for directed
verdict by putting forth substantial evidence “of such quality and weight that
reasonable and fair-minded persons in the exercise of impartial judgment might
reach different conclusions.’” Walker v. NationsBank of Florida, 53 F.3d 1548,
1554 (11th Cir. 1995).
In deciding a motion to dismiss “[t]he district court must accept the facts
alleged in the complaint as true, to the extent they are uncontroverted by the
defendant’s affidavits.” Madara, 916 F.2d at 1514. If a defendant “challenges
jurisdiction by submitting affidavit evidence in support of its position, the burden
traditionally shifts back to the plaintiff to produce evidence supporting
jurisdiction.” Diamond Crystal, 593 F.3d at 1257. “Where the plaintiff’s
complaint and supporting evidence conflict with the defendant’s affidavits, the
court must construe all reasonable inferences in favor of the plaintiff.” Id.
B.
Personal Jurisdiction Under Georgia’s Long-Arm Statute
Factory Direct claims the Court has personal jurisdiction over Defendants
under Section 1 of Georgia’s long arm statute. It alleges that Defendants
“regularly transact, solicit and/or conduct business in Georgia, including deriving
substantial revenue from goods sold to and used by consumers in Georgia through
websites such as eBay.com, Amazon.com, and/or Rakuten.com.” (Compl. ¶ 9).
8
Defendants argue that the business Defendants transact in Georgia is insufficient to
assert jurisdiction under the Georgia long arm statute.
Georgia’s long-arm statute allows for the exercise of personal jurisdiction
over a nonresident corporate defendant who transacts “any business” within
Georgia. O.C.G.A § 9–10–91. The Georgia Supreme Court requires that Section
9–10–91 be construed literally. Innovative Clinical & Consulting Serv., LLC v.
First Nat’l Bank of Ames, Iowa, 620 S.E.2d 352 (Ga. 2005). A corporate
defendant need not physically enter or establish a presence in Georgia for the state
to exercise jurisdiction over it. Diamond Crystal, 593 F.3d at 1264. Transacting
“any business” by mail, telephone, or the internet will suffice. Id. “Jurisdiction
under subsection (1) of the long-arm statute . . . still ‘expressly depends on the
actual transaction of business—the doing of some act or consummation of some
transaction—by the defendant in the state.’” Jordan Outdoor Enterprises, Ltd. v.
That 70’s Store, LLC, 819 F. Supp. 2d 1338, 1342 (M.D. Ga. 2011) (quoting
Diamond Crystal, 593 F.3d at 1264).
Defendants accepted the order for the Accused Sale through Amazon.com
and fulfilled it by shipping the Stroller to a customer in Georgia. Defendants
further concede that Giantex “sometimes sells products to Georgia based on
Internet orders placed by buyers through third party Internet website[s],” (Xu Decl.
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¶ 3), and that GoPlus “ships products to Georgia occasionally for Internet orders
placed by buyers through third party Internet website[s],” (Wu Decl. ¶ 3). The
Court finds that this admission, along with the sale and shipment of the Stroller to
Eastern Enterprises in Georgia, is sufficient to satisfy Section 9–10–91.
C.
Personal Jurisdiction Under the Due Process Clause
The Court next considers whether exercising jurisdiction over Defendants
complies with constitutional due process. “Once a statutory basis for long-arm
jurisdiction is established, the remaining question is whether the exercise of
personal jurisdiction comports with due process.” United States v. Billion Int’l
Trading, Inc., No. 1:11-CV-2753-WSD, 2012 WL 1156356, at *3 (N.D. Ga. Apr.
5, 2012); see Diamond Crystal, 593 F.3d at 1267. “Due process contemplates two
types of jurisdiction over the person: general and specific jurisdiction.” Billion
Int’l Trading, 2012 WL 1156356, at *3; see Consol. Dev. Corp. v. Sherritt, Inc.,
216 F.3d 1286, 1291 (11th Cir. 2000).
To determine whether the exercise of specific jurisdiction satisfies due
process, the Eleventh Circuit applies a three-pronged test: “(1) whether the
plaintiff’s claims arise out of or relate to at least one of the defendant’s contacts
with the forum; (2) whether the nonresident defendant purposefully availed himself
of the privilege of conducting activities within the forum state, thus invoking the
10
benefit of the forum state’s laws; and (3) whether the exercise of personal
jurisdiction comports with traditional notions of fair play and substantial justice.”
Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1355 (11th Cir. 2013)
(internal citations and quotation marks omitted).
1.
Whether Factory Direct’s Claims Arise Out of or Are
Related to Its Contacts
To assert specific jurisdiction a defendant’s contact with the forum state
must relate to the issues being litigated. Oldfield v. Pueblo De Bahia Lora, SA,
558 F. 3d 1210, 1220 (11th Cir. 2009). The Eleventh Circuit has not developed a
specific relatedness test. Id. at 1222. Indeed, it has “heeded the Supreme Court’s
warning against using ‘mechanical or quantitative’ tests.” Id. (citing Int’l Shoe Co.
v. Washington, 326 U.S. 310, 319 (1945)).
Defendants argue that Factory Direct’s claims of trademark infringement
and unfair trade practices do not “arise from” the Accused Sale because Eastern
Enterprises—as Factory Direct’s affiliate—knew knew that Defendants were not
associated with Factory Direct and therefore the Accused Sale could not cause a
“likelihood of confusion” under a trademark infringement theory. This argument
is not persuasive.
Factory Direct adequately alleges that Defendants sold the Stroller—an
allegedly infringing product—to a customer in Georgia, shipped the Stroller to a
11
customer in Georgia, and later executed a refund with a customer in Georgia.
Those contacts with Georgia are directly related to Factory Direct’s claims
involving the sale of products that allegedly infringe on its trademarks and trade
names. The Court is satisfied that here, the first prong of the three-pronged due
process analysis is fulfilled because Factory Direct’s claims do arise out of or
relate to its Georgia contacts—the sale and shipment of its allegedly infringing
products. See Evans v. Andy & Evan Indus., Inc., No. 15-CV-61013-WPD, 2016
WL 8787062, at *4 (S.D. Fla. July 15, 2016) (finding first prong satisfied where
defendant maintained a Florida-accessible website).
2.
Whether Defendants Purposefully Availed Themselves of the
Privilege of Conducting Business in Georgia
The Court next considers whether Defendants’ Georgia contacts “involve
some act by which the defendant[s] purposefully availed [themselves] of the
privileges of doing business within the forum.” Louis Vuitton Malletier, S.A. v.
Mosseri, 736 F.3d 1339, 1357 (11th Cir. 2013).4 The Supreme Court has stated
4
“Traditional jurisdictional analyses are not upended simply because a case
involves technology that facilitates a party’s reach across state lines. . . . [T]he use
of an online market, as opposed to a brick and mortar store, does not create a
‘virtual moat’ around the defendant, preventing jurisdiction except where the
defendant is incorporated or has offices.” Dohler S.A. v. Guru, No. 16-23137CIV, 2017 WL 4621098, at *6 (S.D. Fla. Oct. 16, 2017) (citing Boschetto v.
Hansing, 539 F.3d 1011, 1019 (9th Cir. 2008)).
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that “minimum contacts” includes not just the placement of the product in the
stream of commerce, but “[a]dditional conduct of the defendant [that] may indicate
an intent or purpose to serve the market in the forum State.” Asahi Metal Industry
Co., Ltd. v. Superior Court, 480 U.S. 102, 112 (1987) (O’Connor, J., plurality
opinion). Purposefully availment may be found where a defendant conducts small
amount of sales made through a website accessible nationwide. See Rice v.
PetEdge, Inc., 975 F. Supp. 2d 1364, 1371 (N.D. Ga. 2013); see also EnviroCare
Tech., LLC v. Simanovsky, No. 11-3458, 2012 WL 2001443, at * 4 (E.D.N.Y.
June 4, 2012) (finding that the sale and shipment of three products through
Amazon to the forum state is sufficient to satisfy due process’s “minimum
contacts” inquiry).
Defendants sold the allegedly infringing Stroller to Easter Enterprises in
Georgia. That Defendants sold the Stroller through “third-party website[s]” such
as Amazon.com is immaterial here where the evidence shows that Giantex used
Amazon.com to interact directly with customers in Georgia. There is no evidence
that Giantex was merely the manufacturer that supplied products that Amazon
warehoused and sold itself. The order report (Compl. Ex. 1) and the shipping slip
for the return and refund of the Stroller (Xu Decl. Ex. D) both list Giantex as the
seller. Defendant GoPlus admits to shipping the Stroller and other non-specified
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products into Georgia. By the sale and shipment of the Stroller to a customer in
Georgia, Defendants purposefully availed themselves of the privileges of doing
business in Georgia such that they should have reasonably anticipated being haled
into court in Georgia.5
Factory Direct argues that Defendants’ contacts with Georgia should instead
be analyzed using the sliding-scale approach discussed in Zippo Mfg. Co. v. Zippo
Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997). The analysis should,
5
Defendants criticize the use of the Accused Sale as Factory Direct’s effort to
improperly manufacture jurisdiction. Indeed, Factory Direct admits to having
conducted the Accused Sale in an effort to document alleged trademark
infringement, and courts have looked askance at efforts to manufacture jurisdiction
via online purchases made at the direction of a plaintiff or its counsel. See
Millennium Enterprises, Inc. v. Millennium Music, LP, 33 F. Supp. 2d 907, 911
(D. Or. 1999) (“the court finds that the sale to Ms. Lufkin was nothing more than
an attempt by plaintiff to manufacture a contact with this forum sufficient to
establish personal jurisdiction.”); Edberg v. Neogen Corp., 17 F. Supp. 2d 104, 112
(D. Conn. 1998) (“Only those contacts with the forum that were created by the
defendant, rather than those manufactured by the unilateral acts of the plaintiff,
should be considered for due process purposes.”).
While such efforts to assert jurisdiction are concerning, the Court is
persuaded by the nature of Defendants’ sale and shipment of the Stroller as well as
the evidence of additional sales and shipments of Defendants’ other products to
Georgia. The Vice President of Giantex, Tommy Xu, states that the company
“sometimes sells products to Georgia” via online retailers such as Amazon. (Xu
Decl. ¶ 3). Additionally, Mr. Wu admitted that “GoPlus ships products to Georgia
occasionally for Internet orders placed by buyers through third party Internet
website[s].” (Wu Decl. ¶ 3).
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according to Factory Direct, be based on the nature of Defendants’ online presence
and their sales through Amazon.com. This analysis also leads to the conclusion
that Defendants’ sale into Georgia would cause Defendants to reasonably
anticipate they would be haled into court in Georgia.
The Eleventh Circuit has not issued specific guidance on how to interpret
Internet contacts in evaluating whether a court may constitutionally exercise
personal jurisdiction over a defendant. See Rice, 975 F. Supp. 2d at 1370. A
number of district courts, including several in this district, have applied the Zippo
test to determine if specific personal jurisdiction can be constitutionally exercised
in cases involving internet activities. See Imageline, Inc. v. Fotolia LLC, 663
F.Supp.2d 1367 (N.D. Ga. 2009); Barton S. Co., Inc. v. Manhole Barrier Sys., Inc.,
318 F.Supp.2d 1174, 1177 (N. D. Ga. 2004). The Zippo sliding-scale test focuses
on the nature and function of a defendant’s website to evaluate whether the
defendant is subject to the court’s jurisdiction. At one end of the spectrum are
interactive websites which a defendant uses to transact business over the Internet.
Zippo, 952 F. Supp. at 1124. On the other end are passive websites on which users
simply post about goods and services that are sold by the defendant to purchasers.
Id. The Court finds Fusionbrands, Inc. v. Suburban Bowery of Suffern, Inc., No.
1:12-CV-0229-JEC, 2013 WL 5423106 (N.D. Ga. Sept. 26, 2013) instructive. The
15
Fusionbrands court applied the Zippo test to determine if the plaintiff had personal
jurisdiction over the defendant. The Fusionbrands court specifically discussed the
defendant’s use of Amazon.com as a third-party website:
The fact that the sales were made through a storefront on
Amazon.com, rather than the defendant’s own website, makes little
difference. An Amazon.com storefront allows a business to add
products to their customized storefront, notifies the business when
orders are placed for those products so that the business can ship the
products to the customers, and then deposits the payments made into
the business’s bank account.
Id. at *6.
The evidence here shows that Defendants used Amazon.com to allow
Giantex to connect with buyers in Georgia. The Stroller order form lists the seller
as Giantex, and GoPlus admits to having shipped the product to Georgia. Whether
Giantex used its own website or a third-party, the evidence is that, as illustrated by
the Stroller sale, Giantex used Amazon.com to interact with, that is to sell to,
buyers in Georgia. The evidence also shows that, where necessary, Giantex used
Amazon.com to facilitate returns to Giantex from Georgia buyers who wished to
return items for a refund. The Court thus finds that in maintaining its Amazon.com
storefront, Defendants purposefully availed itself of the laws of Georgia.
3.
Fairness Factors
At this stage in the analysis, the Court must simply ensure that exercising
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personal jurisdiction over Defendants is reasonable and comports with “fair play
and substantial justice.” Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 631
(11th Cir. 1996). The Supreme Court has said that where a defendant has
purposefully directed his activities at forum residents and then seeks to defeat
jurisdiction, the defendant must present a “compelling case.” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 477 (1985). This analysis requires the following factors
to be considered: (1) the burden on the defendant, (2) the forum’s interest in
adjudicating the dispute, (3) plaintiff’s interest in obtaining a convenient forum and
effective relief, (4) the interstate judicial system’s interest in obtaining the most
efficient resolution of controversies, and (5) the shared interest of the sates in
furthering fundamental substantive social policies. Id. at 476–77 (citing World–
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980).
Defendant relies on the first and fourth prongs to argue that requiring
Defendants to litigate in this forum places a substantial burden on them and the
interstate justice system because Defendants and their documents, witnesses, and
employees are in California. These factors are not enough to establish that
jurisdiction over Defendants offends traditional notions of fair play and substantial
justice. See Diamond Crystal, 593 F.3d at 1274 (requiring California-based
defendant to litigate in Georgia); see also Wish Atlanta, LLC v. Contextlogic, Inc.,
17
No. 4:14-cv-00051 (CDL), 2014 WL 5091795, at *7 (M.D. Ga. Oct. 9, 2014) (“[I]t
is not uncommon to require an out-of-state corporation to defend itself in a forum
located across the country.”); Premium Nutraceuticals, LLC, 2016 WL 3841826, at
*4 (requiring Canadian corporation to litigate in Georgia did not offend fair play
and substantial justice); Rice, 975 F. Supp. 2d at 1372-7.
D.
Defendant’s Motion to Dismiss for Improper Venue
A civil action may be brought in:
(1) a judicial district in which any defendant resides, if all defendants
are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part of
property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought
as provided in this section, any judicial district in which any defendant
is subject to the court’s personal jurisdiction with respect to such
action.
28 U.S.C. § 1391(b). Federal Rule of Civil Procedure 12(b)(3) allows a defendant
to move to dismiss an action for improper venue. “The plaintiff has the burden of
showing that venue in the forum is proper.” Pinson v. Rumsfeld, 192 F. App’x
811, 817 (11th Cir. 2006) (citing Home Ins. Co. v. Thomas Indus., Inc., 896 F.2d
1352, 1355 (11th Cir. 1990)). When venue is improper, a court “shall dismiss, or
if it be in the interest of justice, transfer such case to any district . . . in which it
18
could have been brought.” 28 U.S.C. § 1406(a). Whether to dismiss or transfer is
within the discretion of the Court. See Pinson, 192 F. App’x at 817; Naartex
Consulting Corp. v. Watt, 722 F.2d 779, 789 (D.C. Cir. 1983).
Venue is not proper in this district under Section 1391(b)(1) because not all
defendants reside in Georgia. As to the second prong, Defendants argue that the
events giving rise to Factory Direct’s trademark infringement claims have “no real
connection to Georgia.” As in its personal jurisdiction argument, Defendants focus
their argument only on the Accused Sale, arguing that because it was
“orchestrated” by Factory Direct, it should be disregarded in considering the
district in which a substantial part of the events giving rise to the claims occurred.
Again, Defendants fail to address their admission that they sold additional products
in Georgia. Accordingly, venue is proper in this district, and Defendants’ motion
to dismiss under Rule 12(b)(3) of the Federal Rules of Civil Procedure is denied.6
6
Even if venue in this district was not proper under Section 1391(b)(2), it is
proper under Section 1391(b)(3) because the Court has found that it may
constitutionally exercise personal jurisdiction over Defendants. See 28 U.S.C.
§ 1391(b)(3) (providing for venue in any judicial district where the defendant is
subject to the court’s personal jurisdiction).
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E.
Defendant’s Alternative Motion to Transfer Venue
Defendants request that if the Court denies its motion to dismiss for
improper venue, that it transfer this action the District of California pursuant to
28 U.S.C. § 1404(a), which provides that “[f]or the convenience of parties and
witnesses, in the interest of justice, a district court may transfer any civil action to
any other district or division where it might have been brought or to any district or
division to which all parties have consented.” The party seeking transfer of an
action bears the burden of establishing that the balance of Section 1404(a) interests
favors transfer. In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir. 1989). A district
court may consider several factors in evaluating a motion to transfer, among them:
(1) the convenience of the witnesses; (2) the location of relevant documents and
the relative ease of access to sources of proof; (3) the convenience of the parties;
(4) the locus of operative facts; (5) the availability of process to compel the
attendance of unwilling witnesses; (6) the relative means of the parties; (7) a
forum’s familiarity with the governing law; (8) the weight accorded a plaintiff’s
choice of forum; and (9) trial efficiency and the interests of justice, based on the
totality of the circumstances. Manuel v. Convergys Corp., 430 F.3d 1132, 1135
n.1 (11th Cir. 2005). The decision to transfer a case under Section 1404(a) rests
within the Court’s sound discretion. See Robinson v. Giarmarco & Bill, P.C.,
20
74 F.3d 253, 260 (11th Cir. 1996) (reviewing district court’s transfer of venue for
“clear abuse of discretion”).
Defendants have not made a sufficient showing to warrant a transfer of
venue. Defendants identify only two non-party witnesses in California, Tommy
Xu and Jerry Zhang. (Wu Decl. ¶ 7; Xu Decl. ¶ 8). Defendants mistakenly assert
that “[b]ecause there is only one sale of the Accused Product to Georgia” there
should be no non-party witnesses in Georgia. Such an argument is premature
given Defendants’ admission that it has made other sales to customers in Georgia.
Defendants’ liability for trademark infringement will be determined by the
challenged products that were marketed and sold and the infringing nature of those
products. Key witnesses for this determination may include the parties, expert
witnesses, and consumers located in Georgia and other states. This is especially
true considering that Plaintiff is a Georgia LLC based in Georgia, where it claims it
suffered injury.
Additionally there is little added cost of transporting documents under
modern electronic discovery. Defendants admit that the convenience and relative
means of the parties and the availability of process to compel the attendance of
unwilling witnesses are neutral in this analysis. Defendant’s motion to transfer is
denied.
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III.
CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that Defendants Giantex, Inc., GoPlus Corp.,
and Wei Wu’s Motion to Dismiss for Lack of Personal Jurisdiction and Improper
Venue, or Alternatively, to Transfer Venue [10] is DENIED.
SO ORDERED this 5th day of February, 2018.
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