The Blueberry Hill v. Shalom International

Filing 20

MEMORANDUM DECISION AND ORDER-the Court concludes that it does not have jurisdiction in this matter. The Courtgrants 6 Motion to Dismiss and the case is dismissed. Signed by Judge David Sam on 11/15/17. (jmr)

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
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The Blueberry Hill LLC,

)

Plaintiff,
vs.

Case No. 2:17-cv-00385-DS

)
)

MEMORANDUM DECISION
AND ORDER

)
Shalom International Corp.,
)
Defendant.
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I. INTRODUCTION
Plaintiff The Blueberry Hill LLC, (“Blueberry Hill”) is a Utah limited liability company
that sells infant wear, including whimsical deer and fox outfits. Blueberry Hill contends that
in December 2016, Shalom International Corp. (“Shalom”) solicited its products online and
shortly thereafter Blueberry Hill discovered that Shalom was producing “knock-off” products
which Blueberry Hill purchased at a retail store in Sandy, Utah. Blueberry Hill alleges in
its Complaint that Shalom, a New Jersey corporation, sells infant ware that infringes on its
copyright and trade dress rights, and violates Utah law regarding unfair competition and
deceptive trade practices.
Shalom moves to dismiss the case for lack of personal jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2) and (3) and/or 28 U.S.C. § 1406(a), or in the
alternative to transfer the case to the District of New Jersey.

II. DISCUSSION
A. Waiver1
Blueberry Hill asserts that “Shalom waived its ability to challenge jurisdiction and
venue through a Rule 12(b) motion when it filed its answer almost a month before filing its
Motion.” Mem. Opp’n at 4. The Court disagrees.
Federal Rules of Civil Procedure 12(b)(2), (3) and 12(h)(1) provide that “... a party
may assert the following defenses by motion: ... (2) lack of personal jurisdiction; (3)
improper venue” which are waived “by failing to either: (i) make it by motion under this rule;
or (ii) include it in a responsive pleading ....” Shalom preserved those defenses by
asserting them in its Answer. See Stjernholm v. Peterson, 83 F.3d 347, 349, (10th Cir.),
cert. denied, 519 U.S. 930 (1996) (“A party waives the right to challenge venue if he fails
to raise that defense either in his responsive pleading or in a motion to dismiss under Fed.
R. Civ. P. 12(b)(3). Fed. R. Civ. P. 12(h)(1).”); OSG Inc. v. Schlittler, No. 2:11-cv-871-TC,
2012 WL 1493944, at *2 (D. Utah April 27, 2012). (granting a Rule 12(b)(2) motion even
though it was filed after the answer, because “[b]y raising its personal jurisdiction defense
for the first time in its Answer, [defendant] preserved the defense”); Fabara v. GoFit, LLC,
308 F.R.D. 380, at 393-94 (D.N.M. 2015) (citations omitted) (although “a defendant may
implicitly waive the defense by waiting a significant period after filing the answer to submit
a rule 12(b)(2) motion .... courts have held that waiting two to seven months after filing the
answer to submit a rule 12(b)(2) motion is insufficient to constitute waiver”).

Blueberry Hill also objects to the Declaration of Ezra Sutton filed by Shalom in
support of its motion. However, Shalom has submitted a Revised Sutton Declaration which
appears to render the objection moot.
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B. Personal Jurisdiction
1. Standard of Review
Plaintiff bears the burden of establishing personal jurisdiction over a defendant.
Shrader v. Biddinger, 633 F. 3d 1235, 1239 (10th Cir. 2011). When responding to a Rule
12(b)(2) motion filed prior to an evidentiary hearing as is the case here, a plaintiff need only
make a prima facie showing of personal jurisdiction by demonstrating with affidavits or
other written materials facts which support jurisdiction. Dudnikov v. Chalk & Vermilion
Fine Arts, Inc., 514 F. 3d 1063, 1070 (10th Cir. 2008). Allegations in the complaint are
taken as true if they are plausible, nonconclusory, non speculative and to the extent they
are not controverted by submitted affidavits. Id. at 1070. When a defendant submits
evidence to support a challenge to personal jurisdiction, the plaintiff has a duty to come
forward with evidence supporting the jurisdictional allegations of the complaint. Pytlik v.
Professional Resources, Ltd., 887 F. 2d 1371, 1376 (10th Cir. 1989). Factual disputes in
the affidavits are resolved in plaintiff’s favor, and “the plaintiff’s prima facie showing is
sufficient notwithstanding the contrary presentation by the moving party.” Wennz v.
Memery Crystal, 55 F. 3d 1503, 1505 (10th Cir. 1995) (internal quotation marks and
citation omitted).
2. Analysis
Determination of whether a federal court has personal jurisdiction over a nonresident defendant involves two questions. “First we ask whether any applicable statute
authorizes the service of process on defendants. Second, we examine whether the

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exercise of such statutory jurisdiction comports with constitutional due process demands.”
Dudnikov, 514 F.3d at 1070.
Blueberry Hill claims federal question jurisdiction under both the Copyright Act, 17
U.S.C. § 501, and the Lanham Act’s trademark law, 15 U.S.C. § 1125(a). Neither the
Copyright Act , nor the Lanham Act provide for nationwide service of process. See Capitol
Federal Sav. Bank v. Eastern Bank Corp., 493 F. Supp 2d 1150, 1158 (D. Kan. 2007)
(Lanham Act); Dudnikov, 1063 F. 3d at 1070 (Copyright Act). The Court therefore looks
to Utah law. Fed. R. Civ. P. 4(k)(1)(A).
Utah’s long-arm statute supports personal jurisdiction to the extent constitutionally
permitted. Utah Code Ann. § 78B-3-201. Because Utah’s long-arm statute and due
process are coextensive in this case, the first question effectively collapses into the second
question.

Dudnikov, 514 F.3d at 1070.

Thus, the Court need only address the

constitutional issue of whether the exercise of personal jurisdiction over the defendants
comports with due process.
“The Supreme Court has held that, to exercise jurisdiction in harmony with due
process, 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.’” Id. at 1070 (citation omitted). The “minimum contacts” standard may be satisfied
by either general or specific jurisdiction.
Here Blueberry Hill claims that the Court has specific jurisdiction over Shalom.
Mem. Opp’n at 5. For a court to assert specific jurisdiction in a tort context, “the minimum
contacts standard requires, first, that the out-of-state defendant must have purposefully
directed its activities at residents of the forum state, and second, that the plaintiff’s injuries
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must arise out of’ defendant’s forum related activities.” Dudnikov, 514 F.3d at 1071
(internal quotation marks and citation omitted).
a. purposeful direction
The aim of “purposeful direction” is “to ensure that an out-of-state defendant is not
bound to appear to account for merely ‘random, fortuitous, or attenuated contacts’ with the
forum state.” Id. (citation omitted). A three part inquiry is used to determine whether a tort
defendant purposefully directed its activities at a forum state: the presence of (a) an
intentional act that was (b) aimed expressly at the forum state with (c) knowledge that the
brunt of the injury would be felt in the forum state. Calder v. Jones, 465 U.S. 783, 789-90
(1984); Dudnikov, 514 F. 3d at 1072.
In its Complaint Blueberry Hill alleges in conclusory fashion that “[t]his Court has
personal jurisdiction over Shalom because Shalom has purposely availed itself of the
privileges and benefits of the laws of the State of Utah, and has committed acts of
copyright infringement, as well as acts of trade dress infringement, deceptive business
practices, and unfair competition, within this judicial district.” Compl. ¶ 6. And it argues
that the “Court has specific jurisdiction over Shalom with respect to Blueberry Hill’s claims
because Shalom approached Blueberry Hill knowing that it was a Utah company, solicited
Blueberry Hill’s products in order to make knock-offs, inappropriately

copied its

copyrighted photography, and proceeded to sell the knock-off products in Utah.” Mem.
Opp’n at 5.

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(1) intentional act
For purposes of the present motion, the Court will assume that Shalom’s one time
purchase of products from Blueberry Hill’s website was an intentional act.
(2) expressly aimed at the forum state
As noted, the intentional act must be expressly aimed at the forum state. The
expressly aimed element has been interpreted by the Tenth Circuit to mean that “the forum
state itself must be the ‘focal point of the tort.’” Dudnikov, 514 F. 3d at 1974, n.9 (citation
omitted). Although Blueberry Hill conclusorily argues that Shalom specifically directed its
infringement efforts at it in Utah, Blueberry Hill has not shown that any of Shalom’s actions
after its one-time purchase of Blueberry Hill’s products on the internet were expressly
aimed at Utah. It is uncontroverted that the alleged copying of Blueberry Hill’s products
was done at Shalom’s New York and/or New Jersey offices, not in Utah, and that the
alleged infringing products were manufactured in China. Baranoff Decl. ¶ 6.2 With regard
to Shalom’s alleged copying of photographs from Blueberry Hill’s website, the Court agrees
with Shalom’s position that copyrighted works on a website, such as the photographs at
issue, do not have a situs for jurisdictional purposes. See Reply Mem. at 7-8; 5 Patry on
Copyright § 17:158 (2016) (copyrighted works appearing on a website do not have a situs
for purposes of jurisdiction).

Blueberry Hill’s conclusory allegation that “[t]his Court has personal jurisdiction
over Shalom because Shalom has purposely availed itself of the privileges and benefits
of the laws of the State of Utah, and has committed acts of copyright infringement, as well
as acts of trade dress infringement, deceptive business practices, and unfair competition,
within this judicial district”, Compl. ¶ 6, is insufficient to controvert Shalom’s evidence.
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Moreover, merely showing that a defendant committed an intentional tort against a
known resident of the forum state is insufficient to satisfy the “expressly aimed” prong of
the test because “‘the plaintiff cannot be the only link between the defendant and the
forum.’ The purposeful-direction analysis in other words, ‘looks to the defendant’s contacts
with the forum State itself, not the defendant’s contacts with persons who reside there.’”
Tomelleri v. MEDL Mobile, Inc., No. 2:14-cv-02133-JAR (2015 WL 1957801, at *6 (D. Kan.
April 29, 2015) (quoting Walden v. Flore, 134 S. Ct. 1115, 1122-26 (2014)), aff’d, 657 F.
Appx. 793 (10th Cir. 2016). See also Shrader v. Biddinger, 633 F.3d at 1245 (a “plaintiff’s
residence in the forum state, and hence suffering harm there, does not alone establish
personal jurisdiction over a defendant who has not purposefully directed his activities at the
state”); Envirotech Pumpsystems, Inc. v. Sterling Fluid Systems (Schweiz) AG, 2000 WL
35459756, No. 2:99-cv-814-K (D. Utah Nov. 16, 2000) (“this court has consistently rejected
financial injury to a plaintiff resulting from conduct occurring outside of Utah as a basis for
exercising specific jurisdiction over a defendant. Patriot Sys. Inc. [ v. C-Cubed Corp.],21
F. Supp 2d [1318] at 1321 [(D. Utah 1998)] (finding no personal jurisdiction ... where there
was no allegation of culpable conduct occurring in Utah”.); Allison v. Wise, 621 F. Supp.
2d 1114, 1121 (D. Colo. 2007) (“[T]he ... Complaint evidences nothing more than that the
economic impact of [defendant’s] alleged copyright infringement is felt by plaintiff here in
Colorado. Such a circumstance is based on the mere fortuity that plaintiff happens to
reside here, and is patently insufficient to permit the assumption of personal jurisdiction
over [defendant] in this forum.”).

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(3) brunt of injury felt in forum state
A plaintiff must also show that the defendant acted with knowledge that the brunt
of the injury would be felt in the forum state. Dudnikov, 514 F. 3d at 1072. Without
supporting evidence, Blueberry Hill argues that Shalom sold its accused products “through
nationwide distributors, knowing that its products would be sold in Utah.” Mem. Opp’n at
7.
Shalom has presented evidence refuting that assertion. See Baranoff Decl. ¶ 13
(“Shalom did not itself knowingly sell any Accused Products in Utah. Instead, Shalom only
shipped the Accused Products to its retail distributors, Buy Buy Baby, Inc. and The
Marmaxx Group (including T.J. Maxx and Marshalls). ... Shalom does not know or decide
where its retail distributors ship or sell Shalom’s products.”); Supp. Baranoff Decl. ¶ 4.
(“Shalom’s retail customers, including The Marmaxx Group and Buy Buy Baby, Inc. are
located outside of Utah, and these retail customers make the decisions if any Shalom
products are shipped into any retail stores in Utah”).3
Based on the foregoing reasons, the Court concludes that Blueberry Hill has not met
its burden of showing

that Shalom expressly aimed tortuous activity at Utah with

knowledge that the brunt of the injury would be felt in Utah. Thus there has been no
showing of “purposeful direction” for purposes of personal jurisdiction.

Even under Plaintiff’s “stream of commerce” theory, there must be a finding that
Shalom purposefully directed its activities at Utah. See Etagz, Inc. v. Cheri Magazine, No.
2:10-cv-1266-DAK, 2012 WL 5844915, at *3 (D. Utah Nov. 19, 2012) (citing Asahi Metal
Indus. Co., Ltd v. Superior Court of Cal., Solano County, 480 U.S. 102, 112 (1987) (“mere
awareness that the goods may enter the forum state does not constitute purposeful
direction” and “even under a general stream of commerce argument, there must be a
finding that the defendant purposefully directed its activities at the forum state”).
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b. injuries must arise out of defendant’s forum related activities
Blueberry Hill must also show that its alleged injuries arise out of Shalom’s contacts
with Utah.

Dudnikov, 514 F.3d at 1078. That it has failed to do. Shalom’s alleged

contacts with Utah are (1) soliciting goods, (2) copying photos from Blueberry Hill’s
website, and (3) selling allegedly infringing goods in Utah. However, purchasing Blueberry
Hill’s products online is not copyright infringement.4 As previously noted, copyrighted
website photos do not have a jurisdictional situs.

It is uncontroverted that the alleged

copying of Blueberry Hill’s products was done at Shalom’s New York and/or New Jersey
offices and that the alleged infringing products were manufactured in China. And the
uncontradicted evidence is that Shalom itself did not knowingly sell the accused products
directly into Utah. Consequently, there has been no showing that Blueberry Hill’s injuries
arise out of Shalom’s forum related activities.
III. CONCLUSION
For the reasons stated, the Court concludes that it does not have jurisdiction in this

“To prove a copyright infringement under the federal Copyright Act, a plaintiff must
show:’(1) ownership of a valid copyright, and (2) copying of constituent elements of the
work that are original.’” Harolds Stores, Inc. v. Dillard Dept. Stores, Inc. 82 F.3d 1533, 1543
(10TH Cir.) (internal citation omitted), cert. denied, 519 U.S. 928 (1996).
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matter. Accordingly Shalom’s Motion to Dismiss (Doc. #6) is granted, and the case is
dismissed.
IT IS SO ORDERED.
Dated this 15th day of November, 2017
BY THE COURT:

DAVID SAM
SENIOR JUDGE
UNITED STATES DISTRICT COURT

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