James Malinchak International, Inc. v. Suzanne Evans et al

Filing 11

ORDER Granting Defendants' 7 Motion to Dismiss for Lack of Jurisdiction. Plaintiff's 1 Complaint is Dismissed without prejudice. Signed by Judge James C. Mahan on 9/30/2016. (Copies have been distributed pursuant to the NEF - SLD)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 *** 7 8 JAMES MALINCHAK INTERNATIONAL, INC., ORDER Plaintiff(s), 9 v. 10 11 Case No. 2:16-CV-89 JCM (CWH) SUZANNE EVANS COACHING, LLC, and SUZANNE EVANS, 12 Defendant(s). 13 14 Presently before the court is defendants Suzanne Evans Coaching, LLC’s (the “LLC”) and 15 Suzanne Evans’s (“Evans” and collectively, as “defendants”) motion to dismiss for lack of 16 jurisdiction. (ECF No. 7). Plaintiff James Malinchak International, Inc. filed a response (ECF No. 17 9), to which defendants replied (ECF No. 10). 18 I. Facts 19 This is a trademark infringement action involving the trademark “Big Money Speaker” (the 20 “trademark”), United States Patent and Trademark Office (“USPTO”) registration number 21 3899731. (ECF No. 1). 22 Plaintiff claims to be the owner of the trademark and alleges that defendants infringed on 23 its registered trademark through their website. (ECF No. 1). Plaintiff further alleges that 24 defendants’ website provides direct links to purchase tickets for speaking engagements in Las 25 Vegas, Nevada. (ECF No. 1). Moreover, plaintiff asserts that defendants used the trademark in 26 published videos, web pages, and seminars. (ECF No. 1). 27 Plaintiff’s complaint alleges four causes of action: (1) mark infringement under the 28 Lanham Act, 15 U.S.C. § 1114(1)(a); (2) false designation of origin under the Lanham Act, 15 James C. Mahan U.S. District Judge 1 U.S.C. § 1125(a); (3) mark dilution under the Lanham Act, 15 U.S.C. § 1125(c); and (4) 2 misappropriation of licensable commercial property under Nevada law. (ECF No. 1). In the instant motion, defendants move to dismiss for lack of jurisdiction and improper 3 4 venue. (ECF No. 7). The court will address each in turn. 5 II. Legal Standards 6 A. Lack of Personal Jurisdiction 7 Federal Rule of Civil Procedure 12(b)(2) allows a defendant to move to dismiss for lack of 8 personal jurisdiction. To avoid dismissal under Rule 12(b)(2), a plaintiff bears the burden of 9 demonstrating that its allegations would establish a prima facie case for personal jurisdiction. See 10 Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). Allegations in plaintiff’s complaint 11 must be taken as true and factual disputes should be construed in the plaintiff’s favor. Rio Props, 12 Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). 13 When no federal statute governs personal jurisdiction, the district court applies the law of 14 the forum state. Boschetto, 539 F.3d at 1015; see also Panavision Int’l L.P. v. Toeppen, 141 F.3d 15 1316, 1320 (9th Cir. 1998). Where a state has a “long-arm” statute providing its courts jurisdiction 16 to the fullest extent permitted by the due process clause, as Nevada does, a court need only address 17 federal due process standards. See Arbella Mut. Ins. Co. v. Eighth Judicial Dist. Court, 134 P.3d 18 710, 712 (Nev. 2006) (citing Nev. Rev. Stat. § 14.065); see also Boschetto, 539 F.3d at 1015. 19 An assertion of personal jurisdiction must comport with due process. See Wash. Shoe Co. 20 v. A-Z Sporting Goods Inc., 704 F.3d 668, 672 (9th Cir. 2012). To satisfy due process, a court 21 may exercise personal jurisdiction over a defendant only where the defendant has certain minimum 22 contacts with the forum state “such that the maintenance of the suit does not offend traditional 23 notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 24 (1945). 25 Two categories of personal jurisdiction exist: (1) general jurisdiction; and (2) specific 26 jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413–15 (1984); 27 see also LSI Indus., Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1375 (Fed. Cir. 2000). 28 ... James C. Mahan U.S. District Judge -2- 1 B. Improper Venue 2 Under Federal Rule of Civil Procedure 12(b)(3), a defendant may rely on improper venue 3 as a valid defense to a plaintiff’s claim. To withstand dismissal under Rule 12(b)(3), plaintiff bears 4 the burden to establish that venue is properly in this district. Nat’l Fitness Co. v. Procore Labs., 5 LLC, 2:10-cv-2168-JCM (RJJ), 2011 WL 2463296, at *1 (D. Nev. June 20, 2011) (citing Piedmont 6 Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979)). In a civil action, venue 7 is proper in the following districts: 8 (1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; 9 (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 10 11 (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. 12 13 28 U.S.C. § 1391(b). 14 Further, “[t]he district court of a district in which is filed a case laying venue in the wrong 15 division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district 16 or division in which it could have been brought.” 28 U.S.C. § 1406(a). Similarly,“[f]or the 17 convenience of parties and witnesses, in the interest of justice, a district court may transfer any 18 civil action to any other district or division where it might have been brought.” 28 U.S.C. § 19 1404(a). Nonetheless, the district court has discretion in determining whether to dismiss or transfer 20 an action. King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992). 21 III. Discussion 22 Plaintiff asserts that jurisdiction and venue are proper because defendants infringed on its 23 trademark through their website, which provides direct links to purchase tickets to speaking 24 engagements in Las Vegas, Nevada. (ECF No. 9 at 2). 25 A. Personal Jurisdiction 26 Defendants assert that no general jurisdiction exists, arguing plaintiff failed to allege any 27 facts that demonstrate continuous and systematic contact with the forum state, here Nevada. (ECF 28 James C. Mahan U.S. District Judge No. 7 at 6). In response, plaintiff claims that it lacks an adequate basis to respond to defendants’ -3- 1 assertion, reiterating that regardless, defendants are subject to specific jurisdiction in Nevada. 2 (ECF No. 9 at 10). 3 General jurisdiction arises where the defendant has continuous and systematic ties with the 4 forum, even if those ties are unrelated to the litigation. See Tuazon v. R.J. Reynolds Tobacco Co., 5 433 F.3d 1163, 1171 (9th Cir. 2006) (citing Helicopteros Nacionales de Columbia, S.A., 466 U.S. 6 at 414–16). “[T]he plaintiff must demonstrate the defendant has sufficient contacts to constitute 7 the kind of continuous and systematic general business contacts that approximate physical 8 presence.” In re W. States Wholesale Nat. Gas Litig., 605 F. Supp. 2d 1118, 1131 (D. Nev. 2009) 9 (internal quotation marks and citations omitted). In other words, defendant’s affiliations with the 10 forum state must be so “continuous and systematic” as to render it essentially “at home” in that 11 forum. See Daimler AG v. Bauman, --- U.S. ----, 134 S. Ct. 746, 760 (2014). 12 Here, defendants are not “at home” in Nevada. Defendant Evans is a resident of South 13 Carolina and the LLC is a South Carolina limited liability company with its principal place of 14 business in South Carolina. (ECF No. 7 at 5). Therefore, there is no general jurisdiction over 15 defendants in Nevada. 16 Specific jurisdiction arises where sufficient contacts with the forum state exist such that 17 the assertion of personal jurisdiction “does not offend ‘traditional notions of fair play and 18 substantial justice.’” Int’l Shoe Co., 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 19 463 (1940)). The Ninth Circuit has established a three-prong test for analyzing an assertion of 20 specific personal jurisdiction: 21 22 23 24 25 26 (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; (2) the claim must be one which arises out of or relates to the defendant’s forumrelated activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). “The plaintiff bears 27 the burden of satisfying the first two prongs of the test. If the plaintiff fails to satisfy either of 28 James C. Mahan U.S. District Judge these prongs, personal jurisdiction is not established in the forum state.” Id. (citations omitted). -4- 1 (1) Purposeful Availment & Purposeful Direction 2 This first prong of the specific jurisdiction test refers to both purposeful direction and 3 purposeful availment. Mavrix Photo, Inc. v. Brand Technologies, Inc., 647 F.3d 1218, 1228 (9th 4 Cir. 2011). In trademark infringement cases involving allegations of tortious conduct, as here, the 5 Ninth Circuit focuses on “purposeful direction,” applying the “Calder-effects” test. Id. (“Because 6 [plaintiff] has alleged copyright infringement, a tort-like cause of action, purposeful direction ‘is 7 the proper analytical framework.’” (quoting Yahoo! Inc. v. La Ligue Contre Le Racisme Et 8 L’Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006))); see also Calder v. Jones, 465 U.S. 783, 9 788–89 (1984) (establishing an “effects doctrine” for intentional action aimed at the forum). 10 Under the “Calder-effects” test, “the defendant allegedly must have (1) committed an 11 intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows 12 is likely to be suffered in the forum state.” Brayton Purcell LLP v. Recordon & Recordon, 606 13 F.3d 1124, 1128 (9th Cir. 2010) (quoting Yahoo! Inc., 433 F.3d at 1206). 14 In other words, defendants must not only cause harm to a person who they know will feel 15 a “judicially sufficient amount of harm” in the forum state, but the intentional activity must also 16 be directed to the forum state itself. See Yahoo! Inc., 433 F.3d at 1207. Activity is not “aimed at” 17 a forum state merely because it is expected that its effects will be felt there, otherwise the third 18 element of the Calder-effects test would swallow the second. See Poor Boy Prods. v. Fogerty, 19 No. 3:14-CV-00633-RCJ, 2015 WL 5057221, at *3 (D. Nev. Aug. 26, 2015). Thus, the second 20 and third elements are distinct and conjunctive. 21 Here, the parties do not dispute that the intentional act element is satisfied. The court 22 agrees as it is well-established that the creation and operation of a website constitutes an intentional 23 act in this context. See, e.g., Brayton Purcell LLP, 606 F.3d at 1128. 24 Instead, defendants argue that plaintiff failed to show that they targeted Nevada through 25 their advertising, sales, or website. (ECF No. 7 at 8). Specifically, defendants contend that their 26 business is not located in Nevada or directed to any Nevada geographic area. (ECF No. 7 at 8). 27 28 James C. Mahan U.S. District Judge -5- 1 In response, plaintiff asserts that defendants targeted their conduct toward known residents 2 of Nevada by advertising in the national marketplace and because defendants’ website provided a 3 link to purchase tickets for a speaking engagement in Las Vegas. (ECF No. 9 at 2, 5). 4 Courts have struggled with the question of whether tortious conduct on a nationally 5 accessible website constitutes conduct that is expressly aimed at the forums in which the website 6 can be viewed. See, e.g., Mavrix Photo, Inc., 647 F.3d at 1229; Brayton Purcell LLP, 606 F.3d at 7 1129–31; Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1156–58 (9th Cir. 2006); Rio Props., Inc., 8 284 F.3d at 1019–21. While maintaining a passive website alone is insufficient, “operating even 9 a passive website in conjunction with ‘something more’—conduct directly targeting the forum— 10 is sufficient.” Rio Props., Inc., 284 F.3d at 1020. 11 In determining whether a nonresident defendant has done “something more,” courts 12 considered several factors, such as: “the interactivity of defendant’s website; the geographic scope 13 of the defendant’s commercial ambitions; and whether the defendant ‘individually targeted’ a 14 plaintiff known to be a forum resident.” Mavrix Photo, Inc., 647 F.3d at 1229 (citations omitted). 15 Here, plaintiff has sufficiently alleged a prima facie case that defendants’ conduct targeted 16 the forum state. Plaintiff alleged that defendants, in addition to maintaining their website, sold 17 tickets for a speaking engagement set to take place in Las Vegas, Nevada. (ECF No. 9 at 6). 18 Moreover, plaintiff alleged that defendants’ website solicited album sales from visitors within the 19 forum state. Further, defendants provide that the LLC’s “current average is one event in Las Vegas 20 every 5 years.” (ECF No. 10 at 5 n.8). Therefore, plaintiff has sufficiently alleged that defendants 21 engaged in “something more” than the operation of a passive website. See Rio Props., Inc., 284 22 F.3d at 1020. 23 As to the third element of the “Calder-effects” test, “[o]ur precedents recognize that in 24 appropriate circumstances a corporation can suffer economic harm both where the bad acts 25 occurred and where the corporation has its principal place of business.” Mavrix Photo, Inc., 647 26 F.3d at 1231 (quoting Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1113 (9th Cir. 2002)). 27 “[J]urisdictionally sufficient harm may be suffered in multiple forums.” Id. (quoting Dole Food 28 Co., Inc., 303 F.3d at 1113). James C. Mahan U.S. District Judge -6- 1 Here, plaintiff has sufficiently alleged the third prong as its primary place of business is 2 located in Nevada. (ECF No. 9 at 7). Plaintiff alleged that defendants infringed on its trademark. 3 (ECF No. 1). The economic loss caused by the intentional infringement of a plaintiff’s copyright 4 is foreseeable. See, e.g., Mavrix Photo, Inc., 647 F.3d at 1231; Brayton Purcell LLP, 606 F.3d at 5 1129–31. 6 Accordingly, plaintiff has adequately set forth a prima facie case of purposeful direction 7 by defendants. Nonetheless, plaintiff must make a prima facie case of relatedness to satisfy its 8 burden and survive a motion to dismiss for lack of personal jurisdiction. 9 (2) Relatedness 10 The second prong of specific jurisdiction requires plaintiff to show that its claim arises out 11 of defendants’ Nevada-related activities. This prong is satisfied if plaintiff would not have been 12 injured “but-for” defendants’ conduct in Nevada. See Rio Props., Inc., 284 F.3d at 1021. 13 In Rio Properties, Inc., the Ninth Circuit found that but-for defendant’s activities in 14 Nevada—i.e., maintaining and promoting a gambling website injuring plaintiff in its principal 15 place of business and the capital of the gambling industry and specifically competing with plaintiff 16 by targeting Nevada consumers in radio and print media—plaintiff’s injury would not have 17 occurred. 284 F.3d at 1021. 18 Here, plaintiff has not sufficiently alleged that but-for defendants’ Nevada-related conduct 19 it would not have been injured. (ECF Nos. 1, 9). Plaintiff does not allege that defendants 20 advertised in radio or print media in Nevada. Nor does plaintiff assert that it would not have been 21 harmed “but-for” defendants selling tickets on their website to the Las Vegas engagement and 22 holding their engagement in Las Vegas. Further, plaintiff does not attempt to argue that Nevada 23 is the capital of the motivational speaking industry. Therefore, plaintiff has not sufficiently alleged 24 the second prong of the specific jurisdiction test. 25 In light of the foregoing, the court finds that plaintiff has failed to meet its burden of 26 satisfying the second prong of the specific jurisdiction test. Thus, personal jurisdiction is not 27 established in the forum state. See Schwarzenegger, 374 F.3d at 802. Accordingly, defendants’ 28 motion to dismiss for lack of jurisdiction will be granted. James C. Mahan U.S. District Judge -7- Further, because defendants’ motion will be granted for lack of jurisdiction, the court finds 1 2 no need to address the improper venue argument. 3 IV. Conclusion 4 Accordingly, 5 IT IS HEREBY ORDERED, ADJUDGED, and DECREED that defendants’ motion to 6 7 8 9 10 11 dismiss for lack of jurisdiction (ECF No. 7) be, and the same hereby is, GRANTED. IT IS FURTHER ORDERED that plaintiff’s complaint (ECF No. 1) be, and the same hereby is, DISMISSED WITHOUT PREJUDICE. DATED September 30, 2016. __________________________________________ UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 James C. Mahan U.S. District Judge -8-

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