Parlant Technology v. Board of Education of the City School District of the City of New York, The et al

Filing 39

MEMORANDUM DECISION taking under advisement 10 Motion to Dismiss for Lack of Jurisdiction ; taking under advisement 10 Motion to Change Venue ; granting 22 Motion to Compel. Signed by Magistrate Judge Brooke C. Wells on 04/08/2013. (asp)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
PARLANT TECHNOLOGY, a Utah
Corporation,
Plaintiff,
v.
THE BOARD OF EDUCATION OF THE
CITY SCHOOL DISTRICT OF THE CITY
OF NEW YORK, a New York Corporation,
Defendant.

MEMORANDUM DECISION AND ORDER
TAKING UNDER ADVISEMENT
DEFENDANT’S MOTION TO DISMISS
FOR LACK OF JURISDICTION AND
IMPROPER VENUE or in the
ALTERNATIVE MOTION TO CHANGE
VENUE
AND
GRANTING MOTION TO COMPEL
LIMITED DISCOVERY
Case No. 2:12-cv-417-BCW
Magistrate Judge Brooke Wells

The parties have consented to having United States Magistrate Judge Brooke C. Wells
conduct all proceedings in this case, including the entry of final judgment, with appeal to the
United States Court of Appeals for the Tenth Circuit.1 Currently before the Court are the
following motions: (1) Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction and
Improper Venue, or, in the Alternative Motion to Change Venue to the Southern District of New
York2; and (2) Plaintiff’s Alternative Motion to Compel Limited Discovery.3
The Court held oral argument on these motions on February 1, 2013.4 The Plaintiff,
Parlant Technology, Inc. (“Parlant”) was represented by Mark Bettilyon and S. Brandon Owen of
the law firm Ray, Quinney & Nebeker. The Defendant, the Board of Education of the City
1

See docket no. 25; 28 U.S.C. § 636(c) and Rule 73 F. R. Civ. P; DUCivR 72-2(g).

2

Docket no. 10.

3

Docket no. 22.

4

Docket no. 38.

School District of the City of New York (“NYCDOE”) was represented by pro hac vice counsel
Gerald E. Singleton of the Office of Corporation Counsel, New York City Law Department and
by local counsel Jeffrey J. Hunt of the law firm Parr Brown Gee & Loveless. At the conclusion
of oral argument, the Court took the motions under advisement.5 After consideration of the
parties’ arguments, briefs and relevant legal authority, the Court issues the following
Memorandum Decision and Order.
BACKGROUND
The facts of this case center around a trademark named “ParentLink.” Parlant, a Utahbased company and the owner of the ParentLink trademark, provides products and services to
schools and school districts. Specifically, Parlant’s primary products provide parent notification
and school-to-home communication services, including tools for communication between
schools and parents regarding grades, attendance, registration and other student data. In 2002,
Parlant received a trademark protection for ParentLink from the United States Patent and
Trademark office. Parlant uses the ParentLink trademark in connection with its products and
services.
In 2006, Parlant contacted the NYCDOE regarding its ParentLink services. The
NYCDOE is the largest system of public schools in the United States, serving approximately 1.1
million students in over 1,700 schools.6 According to Parlant’s business records7, between 2006
and 2009, employees and agents of Parlant had numerous telephone discussions, in-person
meetings and exchanged letters and emails with information about ParentLink with employees

5

Docket no. 38.

6

Docket no. 23.

7

Many of the communications with the NYCDOE are documented in Parlant’s internal database, which according
to Parlant was “maintained over the years and which Parlant uses to track selling efforts with customers and various
potential customers...” See docket no. 19.

2

and agents of the NYCDOE. As a result of these communications and meetings, the NYCDOE
agreed to do a pilot project using ParentLink and entered Parlant as a vendor in its vendor
database. Ultimately, however, the NYCDOE decided not to move forward with a business
relationship with Parlant and instead in 2009 developed its own student notification system
which it titled “ARIS Parentlink.”
After unsuccessfully attempting to get the NYCDOE to cease its use of the “Parentlink”
trademark, Parlant filed this action, alleging claims for trademark infringement and false
designation of origin under the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a); common law
trademark infringement; and unfair competition under Utah and common law.8 Thereafter, the
NYCDOE filed a Motion to Dismiss for lack of personal jurisdiction and improper venue or in
the alternative to transfer venue to the Southern District of New York.9 The NYCDOE alleges
that it does not have any contacts with Utah that are sufficient in order to sustain an exercise of
personal jurisdiction that is consistent with due process. Specifically, the NYCDOE does not
have any offices, schools, facilities, students, teachers, administrative staff or other employees in
the State of Utah nor does it lease or control any property in Utah. The NYCDOE does maintain
a website and has produced other interactive tools such as email and text message alerts relating
to its ARIS Parentlink system that may be accessed in Utah. However, the NYCDOE argues that
its maintenance of this passive, informational, non-commercial website created and housed in
New York is not a proper basis for jurisdiction in this Court. Furthermore, NYCDOE contends
that the court lacks specific jurisdiction over it because the it has not purposefully availed itself
to the benefits and protections of the State of Utah.

8

See Compl., Docket no. 1.

9

Docket no. 10.

3

Parlant, in response to the NYCDOE’s Motion to Dismiss argues that this Court has
specific jurisdiction over the NYCDOE because the NYCDOE had extensive contacts and
communications with the State of Utah by communicating with Parlant employees about
Parentlink and by entering Parlant into its vendor system. Further, Parlant argues that the
NYCDOE purposely directed its activities toward Parlant and the State of Utah by creating a
system using the Parentlink mark which is registered to a company in Utah. Further, according
to Parlant, the NYCDOE’s knowledge of the Parentlink trademark and then use of that trademark
evidences the NYCDOE’s intention that that “burnt of the injury” be felt in Utah.
Additional facts asserted by Parlant for jurisdiction in Utah are NYCDOE’s hiring of a
Utah consultant, the ability of text messages to be sent to Utahns relating to the ARIS Parentlink
service, the ability of a web user to sign up for email updates from the NYCDOE in Utah, the
solicitation of donations from Utahns on the NYCDOE’s public website and the NYCDOE’s
encouragement of web users from Utah to submit messages to its Chancellor.
Lastly, through its Alternative Motion to Compel Limited Discovery, Parlant seeks
additional information as to whether personal jurisdiction over the NYCDOE is proper in Utah.
Specifically, Parlant seeks leave to obtain discovery concerning NYCDOE’s contacts with the
State of Utah, including access to its website made from Utah or other states, contracts and other
business relationships it has with entities and people in Utah. Also, Parlant seeks discovery
concerning those individuals from the NYCDOE with whom Parlant met in New York City,
documents concerning why NYCDOE did not do business with Parlant and a 30(b)(6)
deposition. According to Parlant, this discovery will confirm that the NYCDOE has sufficient
minimum contacts for specific jurisdiction in Utah and perhaps reveal that the NYCDOE has
enough contacts with Utah for general jurisdiction. For its part, the NYCDOE contends that the

4

discovery requested by Parlant is irrelevant to both the jurisdictional inquiry and Parlant’s
trademark claims and amounts to an improper “fishing” expedition.
ANALYSIS
In order “to obtain personal jurisdiction over a nonresident defendant…a plaintiff must
show that jurisdiction is legitimate under the laws of the forum state and that the exercise of
jurisdiction does not offend the due process clause of the Fourteenth Amendment.”10 In the
preliminary stages of litigation, the plaintiff’s burden is only to establish a prima facie case that
jurisdiction exists and all factual disputes are resolved in favor of the plaintiffs with regard to
jurisdiction.11
Furthermore, there are two ways a State may assert jurisdiction over a non-resident
defendant. First, the forum state’s courts may exercise “general jurisdiction” over a defendant
“if the defendant has ‘continuous and systematic general business contacts’ with the forum
state.12 Second, if general jurisdiction is not found, then the court may exercise “specific
jurisdiction” over a defendant only if that defendant has ‘purposely directed’ its activities at the
state’s residents, and the plaintiff’s claim arises out of or results from actions by the defendant
himself that create a substantial connection with the forum state.”13
In Utah, “the evaluation of specific jurisdiction…mandates a three-part inquiry: ‘(1) the
defendant's acts or contacts must implicate Utah under the Utah long-arm statute: (2) a ‘nexus'

10

Gynberg v. Ivanhoe Energy, Inc., No. 10-361, 2012 WL 2855777 at *3(10th Cir. July 12, 2012) (quoting Far w.
Capital, Inc. v. Towne, 46 F.3d 1071, 1074 (10th Cir. 1995); Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir.
2011)).
11

Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1067 (10th Cir. 2008); Electronic Realty Assocs.
v. Vaughan Real Estate, Inc., 897 F.Supp. 521, 522 (D. Kan. 1995). Marine Life Sics., Inc. v. Unique Sea Farms,
Ltd., No. 2:09-cv-914, 2010 WL 1064462 at *1 (D. Utah Mar. 19, 2010).
12

OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998); Helicopteros Nacionales
de Columbia, S.A. v. Hall, 466 U.S. 408, 414-416 (1984).
13

Burger King v. Rudzewicz, 471 U.S. 462, 472-473 (1985).

5

must exist between the plaintiff's claims and the defendant's acts or contacts; and (3) application
of the Utah long-arm statute must satisfy the requirements of federal due process.’”14 The Utah
legislature has declared that the long arm-statute be interpreted broadly so as “to assert
jurisdiction over nonresident defendants to the fullest extent permitted by the due process clause
of the Fourteenth Amendment to the U.S. Constitution.”15 Thus, under the Fourteenth
Amendment, defendants must have “minimum contacts with the forum state, such that having to
defend a lawsuit there would not offend traditional notions of fair play and substantial justice.”16
The minimum contacts necessary for specific jurisdiction are established “if the
defendant has ‘purposefully directed’ his activities at residents of the forum and the litigation
results from alleged injuries that ‘arise out of or relate to’ those activities.”17 Further, “[t]he
pertinent inquiry in personal jurisdiction analysis is whether defendant, by its own actions, has
purposefully availed itself of the privilege of conducting business in this jurisdiction so that it
should reasonabl[y] anticipate being haled into this forum.”18
In the 10th Circuit, in a torts context, one way to determine whether a defendant’s
conduct was purposefully directed at the forum state is through the “effects test.”19 Under the
“effects test” purposeful direction will be established if three elements are satisfied: the

14

Nat’l Petroleum Mkt’g, Inc. v. Phoenix Fuel Co., 902 F.Supp. 1459, 1465 (D. Utah 1995).

15

SII MegaDiamond, Inc., v. American Superabrasives Corp., 969 P.2d 430, 433 (Utah 1998)(the Utah Supreme
Court “frequently make[s] a due process analysis first because any set of circumstances that satisfies due process
will satisfy the long arm statute.”)(internal citation omitted).
16

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

17

OMI Holdings, Inc., at 1091 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)); see also Rainy
Day Books v. Rainy Day Book & Café, LLC, 186 F.Supp.2d 1158, 1162 (D. Kan. 2002)(“[i]n order to exercise
specific jurisdiction, there must be ‘some act by which the defendant purposefully availed itself of the privilege of
conducting business in the forum state, thus invoking the benefits and protections of its laws.”)(citing Hanson v.
Denckla, 357 U.S. 235, 253 (1958)).
18

Rainy Day Books, at 1165.

19

Calder v. Jones, 465 U.S. 783 (1984).

6

defendant (1) commits an intentional action; (2) that is expressly aimed at the forum state; (3)
with knowledge that the brunt of the injury would be felt in the forum state.20
Here, Parlant has suggested some bases for specific personal jurisdiction in its briefing
and has suggested through its Alternative Motion for Discovery that additional information may
help determine whether the court may exercise general jurisdiction. Parlant has also suggests
that the “effects” test has been satisfied by the NYCDOE’s apparent intentional use of the
ParentLink trademark with knowledge that that such a mark is owned by a Utah company. On
the other hand, the NYCDOE has presented at least some evidence that may negate jurisdiction
in this Court. However, out of an abundance of caution, the Court is not completely satisfied
that it has all of the information needed to make a reasoned decision with regard to jurisdiction at
this time. Thus, the Court will permit some very limited discovery on the personal jurisdiction
before it issues a ruling on the Motion to Dismiss.21 Plaintiff’s discovery, however, must be
narrowly tailored and reasonable in light of the issues to be addressed. In particular, Parlant is
to be mindful of the burden it places on the NYCDOE in requesting discovery and should
attempt to be as economical as possible in its discovery requests. However, issues that should be
explored through this limited discovery are: other relevant contacts with the State of Utah that
NYCDOE may have (including contracts and other business relationships it has with entities and
people in Utah) and a focus on the elements of the “effects test.”22

20

See Dudnikov at 1072.

21

Because the Court is allowing additional discovery into the “minimum contacts” prong of specific jurisdiction, the
Court will not address at this time whether jurisdiction over the NYCDOE offends “traditional notions of fair play
and substantial justice.” In addition, the Court will not discuss the NYCDOE’s Motion to Transfer Venue at this
time.
22

Dudnikov, at 1070;

7

CONCLUSION & ORDER
For the foregoing reasons, the Court HEREBY:
(1) GRANTS the Plaintiff’s Alternative Motion to Compel Limited Discovery.23
(2) TAKES UNDER ADVISEMENT Defendant’s Motion to Dismiss for Lack of
Jurisdiction and Venue, or in the Alternative Transfer Venue until such time that
limited jurisdictional discovery and additional briefs are submitted to the Court.24
Accordingly, IT IS HEREBY ORDERED that further discovery regarding personal
jurisdiction will be permitted. However, such discovery is strictly limited to issues pertaining
to personal jurisdiction over Defendant and as further illustrated above. Defendant shall not
be deemed to have waived any defenses by engaging in such discovery or by cooperating with
this discovery. To that end, the Defendant is expected to be fully cooperative in the
jurisdictional discovery efforts.
All jurisdictional discovery is to be completed within forty-five (45) days from the
issuance of this Order. During that time, Plaintiff may propound no more than 15
interrogatories and 15 requests for production of documents, and it may conduct no more than
three (3) depositions. However, the Court will allow for only one (1) Rule 30(b)(6) deposition.
Upon completion of the limited jurisdictional discovery, the Court will allow each party to
submit a brief addressing the fruits of this discovery and to better inform the Court on the Motion
to Dismiss/Motion to Transfer Proceedings still pending before the Court. These supplemental
briefs are due within fourteen (14) days from the completion of limited jurisdictional
discovery and are limited to ten (10) pages.
23

Docket no. 22.

24

Docket no. 10.

8

IT IS SO ORDERED.

DATED this 8th day of April, 2013.

Brooke C. Wells
United States Magistrate Judge

9