BBK Tobacco & Foods LLP v. Central Coast Agriculture Incorporated, No. 2:2019cv05216 - Document 19 (D. Ariz. 2020)
Court Description: ORDER denying Defendant's request for oral argument (part of Doc. 14 ). IT IS FURTHER ORDERED denying Defendant's Motion to Dismiss Complaint or, in the alternative, Transfer Venue (Doc. 14 ). See the attached order for additional information. Signed by Judge Michael T. Liburdi on 7/10/2020. (RMW)
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 BBK Tobacco & Foods LLP, an Arizona limited liability partnership, d/b/a HBI International, 9 10 No. CV-19-05216-PHX-MTL ORDER Plaintiff, 11 12 v. 13 Central Coast Agriculture Incorporated, 14 Defendant. 15 16 This matter is before the Court on Defendant Center Coast Agriculture 17 Incorporated’s (“CCA”) Motion to Dismiss Complaint for Lack of Personal Jurisdiction 18 and Improper Venue or, in the alternative, Transfer Venue. (Doc. 14.) For the reasons set 19 forth below, Defendant’s Motion is denied.1 20 I. BACKGROUND AND PROCEDURAL HISTORY 21 Plaintiff, BBK Tobacco & Foods LLP, d/b/a HBI International (“BBK”), is an 22 Arizona limited liability partnership with its principal place of business in Arizona. (Doc. 23 1 at 2.) BBK manufactures, distributes, and sells smoking-related products bearing its 24 trademarked “RAW” branding. (Doc. 16 at 3.) These products include cigarette rolling 25 papers, filters, electronic vaporizers, and other branded merchandise like lanyards and 26 ashtrays. (Id. at 4.) BBK maintains multiple internet domains, titled with the RAW 27 1 28 Defendant requested oral argument. (Doc. 14 at 1.) After reviewing the pleadings, however, the Court has determined that oral argument would not have aided the Court’s decisional process. See LRCiv 7.2(f). 1 designation,2 through which it has sold products within the United States since 2 approximately 2009. (Id.) 3 Defendant CCA is a Delaware corporation with its principal place of business in 4 Buellton, California. (Doc. 14-1 at 3.) Although CCA primarily manufactures and sells 5 cannabis products exclusively in California, it also sells promotional merchandise 6 nationwide. (Doc. 14 at 6, 8.) CCA utilizes the designation “Raw Garden” on both its 7 cannabis and promotional products. 8 http://rawgarden.farm (the “informational website”) – from which it disseminates 9 information about its cannabis products. (Id.) The informational website provides users 10 with a link, labeled “Merch,” which, if clicked on, transports users to a different website – 11 http://rawgarden.co (the “merchandise website”). (Id.) The merchandise website allows 12 individuals to purchase promotional products bearing the “Raw Garden” branding. (Doc. 13 16 at 5.) These products include lanyards, electric vaporizer batteries, shirts, hats, stickers 14 and buttons. (Id.) (Doc. 14 at 8.) CCA maintains a website – 15 On September 18, 2019, BBK filed a complaint alleging trademark infringement, 16 cybersquatting, and false designation of origin under the Lanham Act, 15 U.S.C. §§ 1114, 17 1125(a); as well as claims of trademark infringement and unfair competition under Arizona 18 common law. (Doc. 1.) In response, CCA filed its Motion to Dismiss Complaint for Lack 19 of Personal Jurisdiction and Improper Venue or, in the alternative, Transfer Venue. (Doc. 20 14.) 21 II. LEGAL STANDARDS 22 Pursuant to Federal Rule of Civil Procedure 12(b)(2), a defendant may move, “prior 23 to trial, to dismiss the complaint for lack of personal jurisdiction.” Data Disc, Inc. v. Sys. 24 Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). In a motion to dismiss for lack 25 of personal jurisdiction, the plaintiff bears the burden of showing that an exercise of 26 jurisdiction is proper. Ziegler v. Indian River Cty., 64 F.3d 470, 473 (9th Cir. 1995). 27 BBK’s online presence includes the following RAW domain www.rawthentic.com, www.rawvapor.com, www.rawsmoke.com, www.rawfoundation.com. (Doc. 16 at 4.) 2 28 -2- names: and 1 However, “in the absence of an evidentiary hearing,” a plaintiff “need only make a prima 2 facie showing of jurisdictional facts.” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 3 1990) (internal citation omitted). When examining whether there is a prima facie showing 4 of jurisdictional facts, any “uncontroverted allegations in [the complaint] must be taken as 5 true, and conflicts between the facts contained in the parties’ affidavits must be resolved in 6 [plaintiff’s] favor.” Am. Tel. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 7 588 (9th Cir. 1996) (internal quotation marks and citations omitted); see also Sher, 911 8 F.2d at 1361 (treating plaintiff’s allegations as true). 9 III. DISCUSSION 10 As a general matter, if a relevant federal statute does not provide for personal 11 jurisdiction, a “district court applies the law of the state in which the court sits.” Mavrix 12 Photo, Inc. v. Brand Technologies, Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (citing Fed. 13 R. Civ. P. 4(k)(1)(A)). Here, Arizona’s long-arm statute is coextensive with the 14 requirements of federal due process. Ariz. R. Civ. P. 4.2(a);3 see also A. Uberti and C. v. 15 Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995) (discussing the intention behind Arizona’s 16 long-arm statute). Consequently, the analyses of personal jurisdiction under Arizona law 17 and federal due process are the same. See Schwarzenegger v. Fred Martin Motor Co., 374 18 F.3d 797, 800-01 (9th Cir. 2004). For an exercise of personal jurisdiction to comport with 19 federal due process, the non-resident defendant must have certain “minimum contacts” 20 with the forum state such that an exercise of jurisdiction “does not offend traditional 21 notions of fair play and substantial justice.” Schwarzenegger, 374 F.3d at 801 (quoting 22 Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Personal jurisdiction may be 23 general (based on a forum connection unrelated to the underlying suit) or specific (based 24 on an affiliation between the forum and the underlying controversy). See, e.g., Picot v. 25 Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (citing Boschetto v. Hansing, 539 F.3d 1011, 26 1016 (9th Cir. 2008)). BBK relies on specific jurisdiction only. 27 Specifically, Arizona’s long-arm statute states that a court “may exercise personal jurisdiction over a person, whether found within or outside Arizona, to the maximum extent permitted by the Arizona Constitution and the United States Constitution.” 3 28 -3- 1 A. Specific Jurisdiction 2 The Ninth Circuit employs a three-prong test to assess whether a defendant has 3 sufficient minimum contacts with the forum state to be subject to specific personal 4 jurisdiction: 5 (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 forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable. 6 7 8 9 10 11 12 13 Picot, 780 F.3d at 1211 (citing Schwarzenegger, 374 F.3d at 802) (internal citations 14 omitted). The burden initially falls on the plaintiff to show the first two prongs but 15 subsequently shifts to the defendant to show the third. CollegeSource, Inc. v. AcademyOne, 16 Inc., 653 F.3d 1066, 1076 (9th Cir. 2011). 17 1. Purposeful Direction 18 The first required element of specific jurisdiction, “purposeful direction,”4 is 19 measured using the “effects” test put forth by the Supreme Court in Calder v. Jones, 465 20 U.S. 783 (1984). See Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064, 1069 (9th 21 Cir. 2017). The effects test requires the defendant to “have (1) committed an intentional 22 Although “purposeful availment” is often used as shorthand to mean both purposeful availment and purposeful direction, it is important to understand them as distinct concepts requiring distinct tests. Schwarzenegger, 374 F.3d at 802. The precise analysis depends on the type of claim brought – “for claims sounding in tort, [the Court] appl[ies] a purposeful direction test and look[s] to evidence that the defendant has directed his actions at the forum state, even if those actions took place elsewhere.” Picot, 780 F.3d at 1212. Because the claims brought by BBK in its complaint (Doc. 1) are tort-like, the Court applies the purposeful direction test. See e.g., Mavrix Photo, 647 F.3d at 1228 (holding copyright infringement to be a “tort-like cause of action,” and subsequently applying purposeful direction test); Best W. Int’l Inc. v. I-70 Hotel Corp., 11-CV-1281-PHX-FJM, 2012 WL 2952363, at *2 (D. Ariz. July 19, 2012) (utilizing purposeful direction test in a trademark infringement dispute). 4 23 24 25 26 27 28 -4- 1 act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is 2 likely to be suffered in the forum state.” Id. (internal quotation marks and citations 3 omitted). “The proper question is not where the plaintiff experiences a particular injury or 4 effect but whether the defendant’s conduct connects him to the forum in a meaningful 5 way.” Walden v. Fiore, 571 U.S. 277, 290 (2014). 6 7 8 For the reasons stated below, the Court finds that the purposeful direction element of the Ninth Circuit’s specific jurisdiction test is satisfied. a. Intentional Act 9 The intentional act requirement connotes an “intent to perform an actual, physical 10 act in the real world, rather than an intent to accomplish a result or consequence of that 11 act.” Schwarzenegger, 374 F.3d at 806. BBK made a prima facie showing that CCA 12 committed an intentional act. 13 promotional merchandise. See Axiom Foods, Inc., 874 F.3d at 1069 (holding that the 14 addition of an allegedly infringing logo to a newspaper was “unquestionably an intentional 15 act”). And CCA intentionally shipped at least three allegedly infringing products to 16 Arizona. Either of these acts satisfies the intentional act portion of the effects test. 17 CCA printed the allegedly infringing mark on its b. Express Aiming 18 The Court next considers whether CCA’s conduct was expressly aimed at Arizona. 19 An “express aiming” analysis centers on whether “the defendant’s allegedly tortious action 20 was expressly aimed at the forum state.” Picot, 780 F.3d at 1214 (citing Brayton Purcell 21 LLP v. Recordon & Recordon, 606 F.3d 1124, 1129 (9th Cir. 2010)) (internal quotation 22 marks omitted). The precise form of analysis depends largely upon the “specific type of 23 tort or other wrongful conduct at issue.” Schwarzenegger, 374 F.3d at 807. Here, BBK 24 alleges that CCA’s operation of the merchandise website, and the sales it made through the 25 website, were expressly aimed at Arizona. (Doc. 16 at 7.) The Court agrees. 26 While a defendant’s operation of an informational or passive website is insufficient 27 to establish the express aiming prong of the effects test, see e.g., Panavision Int’l, L.P. v. 28 Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998); Cybersell, Inc. v. Cybersell, Inc, 130 F.3d -5- 1 414, 418 (9th Cir. 1997), “operating even a passive website in conjunction with ‘something 2 more’–conduct directly targeting the forum–is sufficient to confer personal jurisdiction.” 3 Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1020 (9th Cir. 2002) (citing 4 Panavision, 141 F.3d at 1322). When examining whether a nonresident defendant has done 5 “something more,” a court looks to “the interactivity of the defendant’s website, the 6 geographic scope of the defendant’s commercial ambitions, and whether the defendant 7 individually targeted a plaintiff known to be a forum resident.” Mavrix Photo, 647 F.3d at 8 1229 (internal quotation marks and citations omitted). 9 i. Website Interactivity 10 BBK argues that CCA’s merchandise website is “interactive” and therefore meets 11 the requirement of “something more,” or express aiming at Arizona. (Doc. 16 at 8.) CCA 12 contends that its website is “generally accessible.” (Doc. 14 at 12.) However, CCA 13 provides no authority stating that a generally accessible website cannot also be interactive. 14 Cf. (Doc. 14 at 13) (citing Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1157 (9th Cir. 2006) 15 and Bellagio, LLC v. Bellagio Car Wash & Exp. Lube, 116 F. Supp. 3d 1166, 1173 (D. 16 Nev. 2015) which involved passive websites or websites that did not target forum 17 residents). 18 The Court agrees with BBK that CCA does not have merely a passive website. 19 CCA’s merchandise website allows users to purchase products bearing the allegedly 20 infringing designation – collecting their information in the process. (Doc. 14 at 8.) Further, 21 the merchandise website allows users to have their orders shipped specifically to Arizona 22 by providing a drop-down menu which auto-populates the state query with the Arizona 23 state abbreviation. (Doc. 16 at 8.) The website also encourages users to contact CCA if 24 they wish to ship internationally. 25 merchandise website squarely in the interactive category. See BBK Tobacco & Foods LLP 26 v. Juicy eJuice, 13-CV-00070-PHX-GMS, 2014 WL 1686842, at *7 (D. Ariz. Apr. 29, 27 2014) (websites that “collect customer information… and sell allegedly infringing 28 products” are interactive); see also Cybersell, 130 F.3d at 418 (describing interactive (Id.) In conjunction, these attributes place the -6- 1 2 websites as those that allow “users [to] exchange information with the host computer”). ii. Commercial Ambitions 3 Also relevant to the “something more” inquiry is the allegation that CCA has filed 4 five U.S. federal trademark registration applications for use of its “Raw Garden” 5 designation on both its cannabis and non-cannabis products (Doc. 16 at 11), reflecting an 6 intention to enlarge the geographic scope of its commercial activities. While CCA is 7 correct that commercial ambitions alone would not support an exercise of jurisdiction, 8 “commercial ambitions” properly constitute part of the analysis into whether “something 9 more” is present. See Mavrix Photo, 647 F.3d at 1229. 10 iii. Individual Targeting 11 BBK has also shown that CCA individually targeted it. Axiom Foods, 874 F.3d at 12 1070 (while individual targeting “will not, on its own, support an exercise of specific 13 jurisdiction,” it remains “relevant to the minimum contacts inquiry”). A defendant 14 individually targets a plaintiff when the defendant is alleged to engage in “wrongful 15 conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum 16 state.” Id. at 1069 (internal quotation marks and citation omitted). Here, CCA utilized the 17 allegedly infringing “Raw Garden” designation on products it sold to consumers it knew 18 resided in Arizona. (Doc. 16 at 12.) CCA is alleged to have willfully infringed on BBK’s 19 trademark with knowledge of the trademark’s existence and the forum of the trademark’s 20 holder. (Id.) As in the analogous property right realm of copyright infringement, willful 21 infringement combined with this knowledge constitutes individual targeting. See Axiom 22 Foods, 874 F.3d at 1069. 23 iv. Sales to Arizona Residents 24 Alongside its operation of the merchandise website, CCA made three sales of 25 allegedly infringing products to Arizona residents. (Doc. 14 at 13.) CCA argues that the 26 Court should discount one of the sales because it was executed by an agent of BBK. (Doc. 27 18 at 6.) The Court agrees, as “it is the defendant who must create contacts with the forum 28 state, not the plaintiff or plaintiff’s contact with the defendant.” Bellagio, 116 F.Supp.3d -7- 1 at 1172 (citing Walden, 571 U.S. at 291). In any event, the Court’s findings are unchanged 2 by the discounting of BBK’s purchase. See Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 3 1987) (discussing that even one contact may be enough to establish specific jurisdiction); 4 see also Juicy eJuice, 2014 WL 1686842, at *7 (finding personal jurisdiction despite there 5 being only a single sale to an Arizona consumer in a trademark dispute between BBK and 6 a Florida company making sales of allegedly infringing materials via the internet). 7 CCA also maintains that its sales to Arizona residents are de minimis and that they 8 fall “far short of satisfying the purposeful direction test.” (Doc. 14 at 7, 12.) In support of 9 its argument, CCA cites ThermoLife Int’l LLC v. NetNutri.com LLC, 18-CV-04248-PHX- 10 JJT, 2019 WL 3220547, at *1 (D. Ariz. July 17, 2019), where this District found no specific 11 jurisdiction when the only evidence of contacts were online sales to customers who 12 happened to be Arizona residents. (Doc. 14 at 12.) However, in ThermoLife, the plaintiff 13 did not supply the Court with “a single fact or allegation that would constitute ‘something 14 more.’” 2019 WL 3220547, at *3. As previously discussed, BBK has provided the Court 15 with multiple allegations that CCA has done “something more” entailing purposeful 16 direction. 17 CCA further argues that because sales of its promotional merchandise constitute 18 “less than 2 percent of CCA’s business,” it cannot be subject to jurisdiction. (Doc. 14 at 19 12.) The Court is unpersuaded that percentage of revenue is a factor indicative of 20 purposeful direction, and CCA cites no authority to that effect. Likewise, CCA incorrectly 21 relies on Southwest Specialty Foods, Inc. v. Crazy Uncle Jester’s Inferno World, LLC, 11- 22 CV-00048-PHX-SRB, 2011 WL 13234183, at *1-2 (D. Ariz. June 22, 2011), to argue that 23 it is not subject to jurisdiction in Arizona. In that case, the evidence of contacts with 24 Arizona was limited to sales of non-infringing products and distribution of defendant’s 25 products to a national retailer who happened to have three Arizona locations that did not 26 offer the product for sale in Arizona. Southwest Specialty Foods, 2011 WL 13234183, at 27 *5. 28 In sum, CCA’s operation of its interactive website, combined with its commercial -8- 1 ambitions and individual targeting of a forum-resident (i.e., “something more”), as well as 2 its purposeful sales to Arizona residents, coalesce to satisfy the express aiming requirement 3 of the effects test. 4 c. Harm 5 The third part of the Calder effects test is satisfied when the defendant’s “intentional 6 acts [have] foreseeable effects in the forum.” Brayton Purcell LLP v. Recordon & 7 Recordon, 606 F.3d 1124, 1131 (9th Cir. 2010) (internal quotation marks and citation 8 omitted). “In appropriate circumstances [,] a corporation can suffer economic harm both 9 where the bad acts occurred and where the corporation has its principal place of business.” 10 Mavrix Photo, 647 F.3d at 1231 (quoting Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 11 1113 (9th Cir. 2002)). Furthermore, in cases of trademark infringement, the brunt of the 12 harm will be felt at a plaintiff’s principal place of business. See e.g., Panavision, 141 F.3d 13 at 1321 (reasoning that Panavision would feel the brunt of the infringement harm in 14 California – its principal place of business); see also Precision Craft Log Structures, Inc. 15 v. Cabin Kit Co., 05-CV-199-S-EJL 2006 WL 538819, at *5 (D. Idaho Mar. 3, 2006) 16 (“When a corporations copyright is infringed, the corporation suffers harm in its principal 17 place of business.”) (citation omitted). 18 In the instant case, CCA knew that BBK was based in Arizona and that any harm 19 from its allegedly infringing activities would be felt in Arizona – BBK’s principal place of 20 business. See Juicy eJuice, 2014 WL 1686842, at *7. In fact, BBK alleges that CCA 21 previously contacted it to arrange a co-branding agreement, and that CCA knew both BBK 22 and the relevant consumers who purchased CCA’s promotional products were in Arizona. 23 (Doc. 18 at 8; Doc. 16 at 13; Doc. 14 at 12.) 24 CCA argues that it is not possible Arizona residents were confused by the allegedly 25 infringing products because CCA does not sell cannabis in Arizona. (Doc. 14 at 13.) But 26 this argument is misplaced because it goes to the merits of the BBK’s claims. The relevant 27 inquiry for this stage of the effects test relates to the economic loss inflicted on the plaintiff, 28 rather than consumer confusion. See Mavrix Photo, 647 F.3d at 1231. Moreover, CCA -9- 1 ignores the possibility of consumer confusion with non-cannabis products and unsoundly 2 suggests that BBK would solely be harmed by the purchase of CCA’s cannabis products 3 in California. The Court is not persuaded by CCA’s arguments. 4 The Court finds that CCA committed intentional acts expressly aimed at Arizona 5 which it knew would cause harm in the state. Accordingly, CCA’s contacts satisfy the 6 three-part effects test from Calder and, as a result, the purposeful direction element of the 7 Ninth Circuit’s specific jurisdiction test. 8 2. Claims arising out of forum-related activities 9 The second element of the Ninth Circuit’s specific jurisdiction test requires BBK’s 10 claims to arise out of CCA’s Arizona-related activities. When determining if the plaintiff 11 has met the second prong, the Ninth Circuit employs a “but for” test. See e.g., Rio Props., 12 284 F.3d at 1021; Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995). The plaintiff must 13 show that “but for [defendant’s] conduct, [the] injury would not have occurred.” 14 Panavision, 141 F.3d at 1322. Thus, this requirement is satisfied if BBK would not have 15 been injured “but-for” CCA’s conduct in Arizona. Rio Props., 284 F.3d at 1021. 16 Once again, CCA makes much of the likelihood of consumer confusion, a 17 discussion to be had at a later stage. (Doc. 18 at 7.) In its Reply (Doc. 18), CCA does not 18 argue against a “but-for” finding. Instead, it argues that the only location where harm is 19 possible is California. (Id.) At this stage, the Court need only inquire into whether the but- 20 for test is met. As previously mentioned, the allegedly infringing products had the effect 21 of harming BBK in Arizona – its principal place of business. See Panavision, 141 F.3d at 22 1322 (reasoning that registration of infringing trademarks has the effect of injuring a 23 business entity in its home state). Here, but for CCA’s activities directed at Arizona, BBK 24 would not have suffered the alleged injury. Therefore, the Court finds that BBK’s claims 25 arise out of CCA’s forum-related activities. 26 3. Reasonableness 27 The third and final element of the Ninth Circuit’s test, the reasonableness prong, 28 shifts the burden to the defendant to “set forth a compelling case that the exercise of - 10 - 1 jurisdiction would not be reasonable.” Picot, 780 F.3d at 1211 (internal quotation marks 2 omitted); see also Ballard, 65 F.3d at 1500 (only a “compelling case that the presence of 3 some other considerations would render jurisdiction unreasonable” is enough to meet this 4 burden) (internal quotation marks and emphasis omitted). An “otherwise valid exercise of 5 specific jurisdiction is [presumed] reasonable.” Ballard, 65 F.3d at 1500 (citing Sher v. 6 Johnson, 911 F.2d 1357, 1364 (9th Cir. 1990)). When considering whether an exercise of 7 jurisdiction is reasonable, the Court considers the following seven factors: (1) the extent of 8 the defendants’ purposeful interjection into the forum state’s affairs; (2) the burden on the 9 defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the 10 defendants’ state; (4) the forum state’s interest in adjudicating the dispute; (5) the most 11 efficient judicial resolution of the controversy; (6) the importance of the forum to the 12 plaintiff’s interest in convenient and effective relief; and (7) the existence of an alternative 13 forum. CE Distrib., LLC v. New Sensor Corp., 380 F.3d 1107, 1112 (9th Cir. 2004) (citing 14 Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1132 (9th Cir. 15 2003)). 16 The first factor weighs heavily in favor of a finding of reasonableness. As 17 previously examined, CCA purposefully directed its activities at Arizona, thus 18 purposefully interjecting itself into Arizona’s affairs. The second factor sets a high bar as 19 “the inconvenience [must be] so great as to constitute a deprivation of due process.” 20 Panavision, 141 F.3d at 1323 (quoting Caruth v. Int’l Psychoanalytical Ass’n, 59 F.3d 126, 21 128-29 (9th Cir. 1995)). Here, CCA’s inconvenience does not meet this high bar. In the 22 era of COVID-19, both the judiciary and advocates alike have learned and adapted to ever- 23 changing circumstances to ensure that due process and justice withstand. Claiming that 24 travel to a neighboring state is so inconvenient as to constitute a deprivation of due process 25 is, in the Court’s estimation, an untenable position. Thus, the second factor weighs in favor 26 of reasonableness. The third factor is neutral as there are no issues relating to conflict of 27 sovereignty. An analysis of Lanham Act and Arizona common-law claims would be 28 similar in Arizona and California (CCA’s proposed venue and principal place of business), - 11 - 1 although this district is more familiar with Arizona common law. The fourth factor favors 2 a finding of reasonableness. Arizona has a compelling interest in protecting the intellectual 3 property rights of its residents. See e.g., Cave Man Kitchens, Inc. v. Caveman Foods, LLC, 4 18-CV-01274 RAJ, 2019 WL 3891327, at *7 (W.D. Wash. Aug. 19, 2019) (reasoning that 5 Washington has a “legitimate interest in protecting the intellectual property rights of its 6 residents”); see also Gordy v. Daily News, L.P., 95 F.3d 829, 836 (9th Cir. 1996) 7 (discussing California’s interest in providing redress to residents who allege tortious 8 injury). Arizona has a strong interest in ensuring that BBK, an Arizona resident, has its 9 claims effectively and efficiently adjudicated. The fifth factor is neutral, and it is “no 10 longer weighed heavily given the modern advances in communication and transportation.” 11 Panavision, 141 F.3d at 1323. The sixth factor is also weighed less heavily. Id. at 1324. 12 However, it weighs slightly in favor of reasonableness. BBK must be assumed to have 13 chosen this District because it thought that it would receive convenient and effective relief 14 here. The seventh factor favors CCA. The Central District of California is an available 15 alternative forum. Although it may be inconvenient for BBK to litigate in California, it 16 nonetheless serves as an alternative forum. See e.g., id. (holding that this factor weighed 17 against a plaintiff when there was an alternative forum). In balancing these factors, the 18 Court finds that CCA has not shown that an exercise of jurisdiction would be unreasonable. 19 The Court finds no reason to dispense with the presumption of reasonableness entitled to 20 this claim of jurisdiction. 21 BBK has made a prima facie showing of jurisdictional facts to demonstrate that 22 CCA purposefully directed some of its activity at Arizona, that BBK’s claims arise out of 23 that activity, and that an exercise would not be unreasonable. Accordingly, the Ninth 24 Circuit’s three-prong test for specific personal jurisdiction is met, and the exercise of 25 jurisdiction comports with federal due process and Arizona’s long-arm statute. 26 27 28 - 12 - 1 B. Improper Venue 2 Venue is proper in “a judicial district in which a substantial part of the events or 3 omissions giving rise to the claim occurred.”5 28 U.S.C. § 1391(b)(2). In a Lanham Act 4 trademark suit, a “substantial part of the events giving rise to the claims occur in any district 5 where consumers are likely to be confused by the accused goods.” Golden Scorpio Corp. 6 v. Steel Horse Bar & Grill, 596 F. Supp. 2d 1282, 1286 (D. Ariz. 2009) (emphasis added) 7 (citations omitted). More precisely, in suits “involving trademark infringement and unfair 8 competition, the wrong takes place not where the deceptive labels are affixed to the goods 9 or where the goods are wrapped in the misleading packages, but where the passing off 10 occurs, i.e., where the deceived customer buys the defendant’s product in the belief that he 11 is buying the plaintiff’s.” Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633, 639 (2d Cir. 12 1956); see also John Stagliano, Inc. v. Direct Distributions, Inc., 12-CV-5565 PSG, 2012 13 WL 12892939, at *6 (C.D. Cal. Nov. 28, 2012) (“Consumers are likely to be confused in 14 any district in which the alleged passing off of the trademarked goods occurred.”). As a 15 result, “the place where the alleged passing off occurred… provides an obvious correct 16 venue.” Woodke v. Dahm, 70 F.3d 983, 985 (8th Cir. 1995). 17 In the instant matter, BBK alleges, and CCA does not dispute, that CCA made sales 18 of the allegedly infringing products to Arizona consumers. (Doc. 16 at 9.) These products 19 were shipped to Arizona – where the consumers received them. (Id.) Therefore, the 20 “passing off” occurred in Arizona. Consequently, Arizona is a district in which consumers 21 are likely to be confused, and in turn, a district in which a “substantial part of the events 22 giving rise to the claims” occurred. 23 CCA argues that its sales are de minimis and fall below a sales threshold found in 24 proper venue analyses. (Doc. 14 at 17.) For venue to be proper, plaintiffs must “show some 25 sales of the allegedly infringing product in the district, though the amount of sales may be 26 modest.” Stagliano, 2012 WL 12892939, at *6 (citing Allstar Marketing Group, LLC v. 27 5 28 Because the Lanham Act has no special venue provision, the general venue provision applies. See Allstar Marketing Group, LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109, 1128 (C.D. Cal. 2009). - 13 - 1 Your Store Online, LLC, 666 F. Supp. 2d 1109, 1130 (C.D. Cal. 2009)). In Stagliano, the 2 Court found venue proper by relying on the plaintiff’s general allegations in the complaint 3 despite finding that the plaintiff had not alleged “the specific number of sales made in [the 4 district].” Id. at *7. Unlike the plaintiff in Stagliano, BBK has provided specific and 5 measurable claims of sales in the forum. The Court is also unpersuaded by CCA’s other 6 cited authorities.6 (Doc. 18 at 10.) Finally, CCA argues that there is a higher likelihood of 7 consumer confusion in California. (Doc. 18 at 11.) However, venue is proper wherever 8 consumers are likely to be to be confused, “whether that occurs solely in one district or in 9 many.” Golden Scorpio, 596 F. Supp. 2d at 1286 (internal quotation marks and citation 10 omitted). CCA provides no reason why the possibility of confusion on the part of 11 California consumers precludes Arizona as an appropriate venue. 12 BBK has set forth a prima facie case that CCA made sales of allegedly infringing 13 products to Arizona consumers. In doing so, BBK showed that there is a likelihood of 14 consumer confusion in Arizona. Accordingly, a substantial part of the events giving rise 15 to BBK’s claims occurred in the District of Arizona. The Court finds that BBK has carried 16 its burden in showing that venue is appropriate under 28 U.S.C. § 1391(b)(2). 17 C. Transfer of Venue 18 Alternatively, CCA’s motion asks for this case to be transferred to the Central 19 District of California. (Doc. 14 at 7.) Under 28 U.S.C. § 1404(a), “[f]or the convenience 20 of parties and witnesses, in the interest of justice, a district court may transfer any civil 21 6 22 23 24 25 26 27 28 In Delta Sigma Theta Sorority Inc. v. Bivins, 20 F. Supp. 3d 207, 212 (D.D.C. 2014), the plaintiff utilized two purchases to claim venue was proper. However, the plaintiff had orchestrated one of the those purchases and the second, non-party, purchase was cancelled – leaving the court to analyze only the singular plaintiff-orchestrated purchase. When analyzing venue, sales orchestrated by the plaintiff are discounted by the Court. See Allstar Mktg., 666 F. Supp. 2d at 1129. Unlike the present matter, Lee v. Haj, 15-CV-8608 DMG, 2016 WL 7486599 at *2 (C.D. Cal. Jan. 4, 2016) concerned only one sale into the proposed venue. Moreover, the sale in Lee was orchestrated by an employee of the plaintiff. Presidio Home Care, LLC v. B-East, LLC, 14-CV-1864 RSWL, 2014 WL 2711299, at *5 (C.D. Cal June 13, 2014) involved a passive website and a plaintiff who did not provide evidence of specific sales to consumers in the venue. Instead, the plaintiff there provided evidence of two incidents of consumer confusion. Id. It is important to note that Allstar requires a modest amount of sales, not confusion. Finally, because the plaintiff orchestrated the sales in Vera Bradley Designs, Inc. v. Denny, 1:18-CV-70-TLS, 2018 WL 3633986, at *4 (N.D. Ind. July 30, 2018) it too is inapposite. - 14 - 1 action to any other district or division where it might have been brought.” District courts 2 have “discretion to adjudicate motions for transfer according to an individualized, case-by- 3 case consideration of convenience and fairness.” Jones v. GNC Franchising, Inc., 211 F.3d 4 495, 498 (9th Cir. 2000) (citing Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988)) 5 (internal quotation marks omitted). When analyzing whether transfer is appropriate, the 6 Court performs a two-step analysis: first, it determines “whether the case could have been 7 brought in the forum to which the moving party seeks to transfer the case,” and second, 8 “whether the proposed transferee district is a more suitable choice of venue based upon the 9 convenience of the parties and witnesses and the interests of justice.” R. Prasad Indus. v. 10 Flat Irons Envtl. Sols. Corp., 12-CV-08261-PCT-JAT, 2017 WL 4409463, *2-3 (D. Ariz. 11 Oct. 4, 2017) (citations omitted). Here, it is undisputed that the case could have been 12 brought in the Central District of California. (Doc. 16 at 16.) Thus, the Court’s analysis 13 will center on the second step. 14 In determining whether the proposed transferee district is a more suitable choice of 15 venue, the Ninth Circuit enumerated the following eight factors to be considered by the 16 Court: (1) the location where the relevant agreements were negotiated and executed, (2) 17 the state that is most familiar with the governing law, (3) the plaintiff’s choice of forum, 18 (4) the respective parties’ contacts with the forum, (5) the contacts relating to the plaintiff’s 19 cause of action in the chosen forum, (6) the differences in the costs of litigation in the two 20 forums, (7) the availability of compulsory process to compel attendance of unwilling non- 21 party witnesses, and (8) the ease of access to sources of proof. Jones, 211 F.3d at 498-99. 22 The Court will analyze each in turn. 23 Both parties contend that the first factor is inapplicable here because the claims at 24 issue do not pertain to a specific agreement. (Doc. 16 at 17; Doc. 18 at 11.) The Court 25 agrees. 26 The second factor, the state most familiar with the governing law, weighs in favor 27 of denying transfer. In its complaint, BBK alleges Lanham Act violations as well as 28 Arizona common law claims. (Doc. 1.) Federal district courts are equally familiar with - 15 - 1 federal law claims, so the Lanham Act claims do not add weight to either conclusion. See 2 e.g., RV Savvy Prods., Inc. v. RV Masters, LLC, 6:19-CV-00184-MK, 2019 WL 5858192, 3 at *11 (D. Or. July 19, 2019) (finding that federal district courts are equally familiar with 4 the governing law when a plaintiff brings a federal claim). While the Court does not doubt 5 the Central District of California’s ability to adjudicate Arizona common law claims, there 6 is no question that the District of Arizona is the most familiar with such claims. See e.g., 7 Conte v. Ginsey Indus., 12-CV-0728-PHX-JAT, 2012 WL 3095019, at *3 (D. Ariz. July 8 30, 2012) (“A state’s familiarity with the governing law [,]rather than its ability to merely 9 access or research that law[,] does factor into the appropriateness of venue transfer.”) 10 (citing Jones, 211 F.3d at 498); Cave Man Kitchens Inc. v. Caveman Foods, LLC, 2:18- 11 CV-01274, 2019 WL 3891327, at *8 (W.D. Wash. August 19, 2019) (holding that a district 12 court in Washington was more familiar with claims based on Washington law). As such, 13 the second factor weighs against transfer. 14 The third factor, the plaintiff’s choice of forum, weighs against transferring the case. 15 This district has found that a plaintiff’s “choice of forum is to be given greater deference 16 where the plaintiff has chosen its home forum.” Conte, 2012 WL 3095019, at *2 (citing 17 Piper Aircraft Co. v. Reyno, 454 U.S. 235, 266 (1981)). BBK presumably chose this district 18 after considering which district best served its interests. BBK surely considered that this 19 district serves as its home. As plaintiff’s home state, BBK’s choice of forum is entitled to 20 some deference. 21 The fourth and fifth factors relate to the parties’ contacts with the forum. BBK has 22 extensive and continuous contacts with Arizona that make it “at-home” in this forum. 23 (Doc. 1 at 2; Doc. 16 at 3, 17.) As explored above, CCA also maintains contacts with 24 Arizona because it has purposefully directed some of its activity at Arizona. CCA 25 consummated three sales with Arizona residents via its interactive website, and it 26 subsequently shipped its merchandise to the state. While CCA may not have as wide- 27 ranging and systematic contacts with the forum as BBK, it nonetheless has enough contacts 28 to satisfy personal jurisdiction requirements. RV Savvy Prods., 2019 WL 5858192, at *11 - 16 - 1 (holding that contacts satisfying personal jurisdiction requirements weigh in favor of 2 denying transfer). Thus, the fourth factor weighs against transfer. The fifth factor analyzes 3 the contacts relating to the plaintiff’s cause of action in the chosen forum. BBK is based 4 in Arizona and it alleges to have suffered harm in this district as a result of CCA’s actions. 5 BBK’s claims arise out of CCA’s conduct directed at the forum. These contacts directly 6 relate to the claims made by BBK. Consequently, this factor also favors denial of transfer. 7 The sixth factor examines the differences in the costs of litigation in the respective 8 forums. The Court properly looks to the location of witnesses and evidence. See Gomez 9 v. Wells Fargo Bank, NA, 09-CV-00181-PHX-GMS, 2009 WL 1936790, at *2-3. For a 10 district court to transfer, defendants need to “allege actual cost savings due to the forum 11 transfer and not merely the shifting of costs between parties.” RV Savvy Prods., 2019 WL 12 5858192, at *11 (citing Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 13 (9th Cir. 1983)). Neither party presents particularly strong evidence of cost savings. CCA 14 generally alleges that third-party witnesses are in California. (Doc. 14 at 20; Doc. 18 at 15 12, 13.) However, it fails to specifically identify the witnesses in California or how it 16 would utilize their testimony in a way that it could not do with Arizona witnesses. Cf. 17 Gomez, 2009 WL 1936790, at *3 (“Defendants identify many of these individuals by 18 name.”). Furthermore, CCA does not dispute the possibility of witnesses being present in 19 this district. BBK also fails to point to specific witnesses present in this district. Instead, 20 it argues that CCA’s defense in this district would not be overly burdensome. (Doc. 16 at 21 19.) Both parties’ arguments merely shift cost from one to another without successfully 22 convincing the Court that one forum is significantly more expensive than the other. As 23 such, this factor is neutral. 24 The seventh factor, the availability of compulsory processes to compel attendance 25 of unwilling third-party witnesses, is also neutral. This district is more than 100 miles from 26 the California border and this district’s subpoena power would not reach third-party 27 witnesses located in California. See Fed. R. Civ. P. 45(c). However, neither party has 28 particularly alleged that specific third-party witnesses would need to be compelled to - 17 - 1 appear. See e.g., Gomez, 2009 WL 1936790, at *4 (“While it is true that third-party 2 witnesses… would be beyond the subpoena power of courts in the other forum, none of 3 those witnesses have been identified with sufficient particularity to merit consideration.”). 4 Further, if the case were transferred, any unwilling third-party witnesses in Arizona would 5 also be beyond the Central District of California’s subpoena power. Thus, like the litigation 6 cost factor, a transfer would merely shift the burden from one party to the other. 7 The eighth factor, the ease of access to sources of proof, is not advanced by transfer. 8 CCA’s employee witnesses and documentary evidence are located in the Central District 9 of California. (Doc. 14 at 21.) However, it may be assumed that CCA’s employee 10 witnesses “will cooperate with [CCA’s] trial efforts.” Gomez, 2009 WL 1936790, at *4 11 (citing FUL Inc. v. Unified Sch. Dist. No. 204, 839 F. Supp. 1307, 1311 (N.D. Ill. 1993)). 12 BBK does not specify where its sources of proof are, but, in any event, even if there were 13 “more documentary evidence in California than in [Arizona]… modern technology tends 14 to make access to documentary proof easy from virtually any location.” 15 Kitchens, 2019 WL 3891327, at *8. Moreover, assuming BBK’s documentary evidence 16 and witnesses are primarily located in this district, transferring to California would once 17 again merely shift the costs onto BBK rather than decrease them overall. Caveman 18 The Court believes that the factors set out by the Ninth Circuit favor denial of 19 transfer. One of the factors is inapplicable, three are neutral, and four of them favor BBK. 20 Therefore, the Court finds that transfer to the Central District of California is not warranted. 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // - 18 - 1 IV. CONCLUSION 2 Accordingly, 3 IT IS ORDERED denying Defendant’s request for oral argument (part of Doc. 4 5 14). IT IS FURTHER ORDERED denying Defendant’s Motion to Dismiss Complaint 6 or, in the alternative, Transfer Venue (Doc. 14). 7 Dated this 10th day of July, 2020. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 19 -
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