UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
August 14, 2008
NUTRISHARE, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
BIORX, L.L.C., AN OHIO LIMITED LIABILITY COMPANY, DEFENDANT.
MEMORANDUM AND ORDER RE: MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION; MOTION TO DISMISS FOR IMPROPER VENUE OR, ALTERNATIVELY, MOTION TO TRANSFER VENUE
Plaintiff Nutrishare, Inc. brought this action alleging trademark infringement and unfair competition stemming from defendant BioRx, L.L.C.'s use of its "NutriThrive" mark. Defendant now moves to dismiss plaintiff's Complaint for a lack of personal jurisdiction and improper venue or, alternatively, transfer the action to another venue.
I. Factual and Procedural Background
Plaintiff, a corporation duly organized and existing under the laws of the State of California with its principal place of business in Elk Grove, California, specializes in the nationwide business of providing products and services related to "total parenteral nutrition" (TPN)*fn1 directly to consumers in their homes. (Compl. ¶ 1.) Proceeding under its "Nutrishare" designation since 1991, plaintiff formally registered the "Nutrishare" mark in the category of retail pharmacy and mail order services on September 3, 2002. (Id. at ¶ 10.) Throughout plaintiff's commercial existence, the mark has been prominently displayed on its products, letter head, invoices, advertising, and publications--either in standard characters or in conjunction with a logo depicting "Nutrishare" in block letters preceded by the stylized image of a bag and IV catheter. (Id. at ¶ 12.)
Defendant, a limited liability company organized and existing under the laws of the State of Ohio with its principal place of business in Cincinnati, Ohio, is a national provider and distributor of specialty pharmaceuticals, medical supplies, and clinical support services. (Id. at ¶ 2; Rielly Decl. ¶ 3.) On November 18, 2007, defendant formally launched its own TPN-related products and services division, designated "NutriThrive." (Compl. ¶ 13.)
Based on defendant's use of the "NutriThrive" mark, plaintiff filed its Complaint on June 4, 2008 in the Eastern District of California, alleging the following claims: (1) Trademark Infringement--Lanham Act § 31(1), 15 U.S.C. § 1114(1); (2) Common Law Trademark Infringement; (3) Unfair Competition--Lanham Act § 43(a), 15 U.S.C. § 1125(a); and (4) Unfair Competition--California Business and Professions Code §§ 17200-17210. On July 16, 2008, defendant filed a motion to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for a lack of personal jurisdiction. Should the court determine personal jurisdiction in California to be proper, defendant moves to dismiss the Complaint for improper venue pursuant to Rule 12(b)(3) or, alternatively, transfer venue to the Southern District of California.
A. Motion to Dismiss for Lack of Personal Jurisdiction
A plaintiff has the burden of establishing that the court has personal jurisdiction over a defendant. Doe v Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). In assessing a plaintiff's showing, the court may consider evidence presented in affidavits as well as other evidence procured during discovery. But when the court acts on the motion without holding a plenary evidentiary hearing, as here, a plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss. Id.; see also Rano v. Sipa Press, Inc., 987 F.2d 580, 587 n.3 (9th Cir. 1993) (noting that where the district court "relies solely on affidavits and discovery materials, the plaintiff need only establish a prima facie case of jurisdiction"). When not directly controverted, a plaintiff's version of the facts must be taken as true and conflicts between the facts contained in the parties' affidavits should be resolved in favor of this plaintiff. Doe, 248 F.3d at 922. Once a defendant has contradicted allegations contained in the complaint, however, a plaintiff may not rest on the pleadings, but must present admissible evidence which, if true, would support the exercise of personal jurisdiction. Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003).
In union with a plaintiff's burden, a federal court may only exercise personal jurisdiction over a defendant when such jurisdiction comports with the law of the state in which the court sits and with the requirements of due process. Lee v City of Los Angeles, 250 F.3d 668, 692 (9th Cir. 2001). "California [law] permits the exercise of personal jurisdiction to the full extent permitted by due process." Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000); see also Cal Civ. Proc. Code § 410.10 ("A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.").
Due process requires a defendant to have certain minimum contacts with the forum state so that permitting the suit would not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); see also World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297 (1980) (holding that the defendant's "conduct and connection with the forum state" must be such that the defendant "should reasonably anticipate being haled into court there"). The nature and quality of the contacts with the forum state necessary to support personal jurisdiction depend upon whether the defendant consents to jurisdiction or, alternatively, whether the plaintiff asserts general or specific personal jurisdiction over the defendant. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998).
1. Consent to Personal Jurisdiction
Recognizing that "there are a 'variety of legal arrangements' by which a litigant may give 'express or implied consent' to the personal jurisdiction" of a state, Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985) (citation omitted), plaintiff argues that defendant consented to jurisdiction in California as a matter of law when it registered as a non-resident pharmacy with the California State Board of Pharmacy and appointed an agent for service of process. The Ninth Circuit has not definitively stated whether a foreign company's registration to do business in a state and appointment of an agent for service of process are acts that equal consent to personal jurisdiction in that state. Other courts have decided the issue both ways. Compare Ratliff v. Cooper Labs., Inc., 444 F.2d 745, 748 (4th Cir. 1971) (holding that "the application to do business and the appointment of an agent for service . . . is of no special weight in the [jurisdictional] context") with Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1199 (8th Cir. 1990) ("The whole purpose of requiring designation of an agent for service is to make a nonresident suable in the local courts.").
This jurisdictional conflict, however, is not entirely applicable to the instant action. Each case that plaintiff relies upon to establish jurisdictional consent--and even the cases that directly controvert its argument--deal with a foreign corporation that had registered to do business within a particular state and had appointed an agent for service in that specific context. Notably, defendant has never registered with the California Secretary of State, as it would be required to do if it were "doing business in" California as contemplated by those cases. See Cal. Corp. Code § 17451(a) ("Before transacting intrastate business in this state, a foreign limited liability company shall register with the Secretary of State."). Rather, defendant has only registered with the California State Board of Pharmacy as it must to do in the event that it, like other nonresident pharmacies subject to California's Pharmacy Law, Cal. Bus. & Prof. Code §§ 4000-4480, chose to ship any controlled substances to consumers in California from outside the state. In doing so, defendant was also required to designate a agent for service of process by section 4112 of the California Business and Professions Code. Cal. Bus. & Prof. Code § 4111(c)(1).*fn2
Moreover, plaintiff's argument that voluntary compliance with any such state statute requiring registration and appointment of an agent for service therein amounts to substantial contact for jurisdictional purposes does not comport with due process. By registering with an agency of the state, a foreign company "only potentially subjects itself to jurisdiction; it does not subject itself to potential jurisdiction." Leonard v. USA Petroleum Corp., 829 F. Supp. 882, 888 (S.D. Tex. 1993); see also id. at 888-89 ("The designation of an agent simply gives the company more efficient notice than [other methods of] service. . . . In complying with the [forum state's] registration statute, [defendant] consented to personal jurisdiction in [the forum state] only if the jurisdiction were constitutional.") (emphasis added). "Registration to do business and appointment of an agent for service of process, especially when done to fulfill state law requirements, . . . do not constitute a general business presence or consent to suit in [the forum state's] courts on every matter." Id. at 889; see also Siemer v. Learjet Acquisition Corp., 966 F.2d 179, 183 (5th Cir. 1992) ("Not only does the mere act of registering an agent not create [defendant's] general business presence in [the forum state], it also does not act as consent to be hauled into [the forum state's] courts on any dispute with any party anywhere concerning any matter.").
Consequently, because due process is the cornerstone of personal jurisdiction, this court is not permitted to haul a nonresident company like defendant across state lines on the fiction that it somehow consented to jurisdiction in California.
See Leonard, 829 F. Supp. at 889 ("The idea that a foreign corporation consents to jurisdiction in [the forum state] by completing a state-required form, without having Contact with [forum state], is entirely fictional. Due process is central to consent; it is not waived lightly. A waiver through consent must be willful, thoughtful, and fair. 'Extorted actual consent' and 'equally unwilling implied consent' are not the stuff of due process.") (citation omitted); see also Ratliff v. Cooper Labs., Inc., 444 F.2d 745, 748 (4th Cir. S.C. 1971) ("The principles of due process require a firmer foundation than mere compliance with state domestication statutes.").
2. General Jurisdiction
Under general jurisdiction, a defendant whose contacts with a state are "substantial" or "continuous and systematic" can be brought into court in that state in any action, even if the action is unrelated to those contacts. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984). "This is an exacting standard, as it should be, because a finding of general jurisdiction permits a defendant to be haled into court in the forum state to answer for any of its activities anywhere in the world." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004); see also Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000) ("The standard for establishing general jurisdiction is 'fairly high,' and requires that the defendant's contacts be of the sort that approximate physical presence.") (internal citations omitted).
Here, the court cannot exercise general jurisdiction over defendant because its contacts do not qualify as either substantial or continuous and systematic. It is uncontested that defendant's principal place of business is in Ohio, owns no property in California, owes no taxes in California, and maintains no employees or bank accounts in California. (Hill Decl. ¶¶ 9, 10; Pfister Decl. ¶ 13; Def.'s Reply Mem. in Supp. of Mot. to Dismiss 2:8-10.) Although it has the burden of establishing general jurisdiction, plaintiff has asserted little to this effect, save conclusory assertions that defendant maintains relationships with business partners and nursing agencies in the state. Defendant categorically denies these assertions, and has presented substantial evidence to the contrary. (Hill Decl. ¶ 5; Pfister Decl. ¶ 13); see also Schwarzenegger, 374 F.3d at 800 (finding that "plaintiff cannot 'simply rest on the bare allegations of its complaint'" because only "uncontroverted allegations in the complaint must be taken as true.") (citations omitted).
Given the paucity of plaintiff's contentions concerning substantial activity between defendant and California, it is apparent that defendant's activities in the forum state "were more occasional than continuous, and more infrequent than systematic." Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1331 (9th Cir. 1984). Even assuming that plaintiff could provide evidence that defendant maintained such scarce contacts, it is evident that plaintiff's allegations would still fall well short of demonstrating the "'continuous and systematic' contacts that the Supreme Court and [the Ninth Circuit] have held to constitute sufficient presence' to warrant general jurisdiction."
Schwarzenegger, 374 F.3d at 801; see, e.g., Helicopteros Nacionales de Colombia, S.A., 466 U.S. at 416 (no jurisdiction over foreign corporation that sent officer to forum for one negotiating session, accepted checks drawn on a forum bank, purchased equipment from the forum, and sent personnel to the forum to be trained); Cubbage v. Merchent, 744 F.2d 665, 667-68 (9th Cir. 1984) (no jurisdiction over doctors despite significant numbers of patients in forum, use of forum's state medical insurance system and telephone directory listing that reached forum); Gates Learjet Corp., 743 F.2d at 1330-31 (no jurisdiction over defendants despite several visits and purchases in forum, solicitation of contract in forum that included choice of law provision favoring forum, and extensive communication with forum); Congoleum Corp. v. DLW Aktiengesellschaft, 729 F.2d 1240, 1243 (9th Cir. 1984) (developing sales force in forum state insufficient); Cornelison v. Chaney, 16 Cal. 3d 143, 149 (1976) (holding that--despite the defendant's activity in California consisting of some twenty trips a year into the state over the past seven years to deliver and obtain goods, an independent contractor relationship with a local broker, and a Public Utilities Commission license--"these contacts are not sufficient to justify the exercise of jurisdiction over defendant without regard to whether plaintiff's cause of action is relevant to California activity").
3. Specific Jurisdiction
Having concluded both that defendant did not consent to personal jurisdiction and that the court does not have general jurisdiction over defendant, the court next examines plaintiff's allegations through the analytical lens of specific jurisdiction. The following three-part test dictates whether specific jurisdiction can be exercised over defendant:
(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.
Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987) (emphasis added). The plaintiff bears the burden of satisfying the first two prongs of the test. Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to "present a compelling case" that the exercise of jurisdiction would not be reasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985).
a. Purposefully Avail/Direct
This prong of the specific jurisdiction test has been further subdivided into two distinct questions: whether BioRx either (1) "purposefully availed" itself of the privilege of conducting activities in the forum, or (2) "purposefully directed" its activities toward the forum. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) ("We often use the phrase 'purposeful availment,' in shorthand fashion, to include both purposeful availment and purposeful direction, but availment and direction are, in fact, two distinct concepts. A purposeful availment analysis is most often used in suits sounding in contract. A purposeful direction analysis, on the other hand, is most often used in suits sounding in tort.") (internal citations omitted).
i. Purposeful Availment Generally
A showing that a defendant purposefully availed itself of the privilege of doing business in a forum state typically consists of evidence of the defendant's contacts or actions in the forum. By making such contacts or taking such actions, a defendant "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). In return for these "benefits and protections," a defendant must "submit to the burdens of litigation in that forum." Burger King, 471 U.S. at 476; see also Cote v. Wadel, 796 F.2d 981, 984 (7th Cir. 1986) ("[P]ersonal jurisdiction over nonresidents of a state is a quid for a quo that consists of the state's extending protection or other services to the nonresident.").
With respect to this inquiry, plaintiff merely reiterates the above-addressed argument that defendant purposefully availed itself of the benefits and privileges of California when it registered with the California State Board of Pharmacy and therein appointed an agent for service of process. Because the court has acknowledged that due process does not permit it to haul defendant across state lines simply based upon its compliance with a state statute, the traditional justification for finding purposeful availment thus does not apply. See supra, Section II.A. To the extent that defendant's conduct might justify the exercise of personal jurisdiction in California, therefore, such conduct must have been purposefully directed at California.
ii. Purposeful Direction
In contrast to purposeful availment, a showing that a defendant purposefully directed his conduct toward a forum state usually consists of evidence of the defendant's actions outside the forum state that are directed at the forum, such as the distribution in the forum state of goods originating elsewhere. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774-75 (1984); see also World-Wide Volkswagen, 444 U.S. at 297-98 (noting that a "forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State"); Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 899 (9th Cir. 2002) (finding purposeful direction where the defendant distributed its pop music albums from Europe in the forum state). Significantly, due process permits the exercise of personal jurisdiction over a defendant who "purposefully directs" his activities at residents of a forum, even in the "absence of physical contacts" with the forum. Burger King, 471 U.S. at 476 (citation omitted).
Purposeful direction is evaluated under the three-part "effects" test traceable to the United States Supreme Court's decision in Calder v. Jones, 465 U.S. 783 (1984). Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 803 (9th Cir. Cal. 2004). Under Calder, "the 'effects' test requires that the defendant allegedly have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state." Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002). However, courts in this circuit are warned not to focus too narrowly on the test's third prong--the effects prong--holding that "something more" is needed in addition to a mere foreseeable effect. Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1156 (9th Cir. 2006). In other words, courts must recognize that the "effects" test cannot stand for the broad proposition that a foreign act with foreseeable effects in the forum state will always give rise to specific jurisdiction, but rather must demonstrate "something more"--i.e., "what the Supreme Court described as 'express aiming' at the forum state." Id. (citation omitted). Thus, the pertinent inquiry here is whether defendant's conduct was expressly aimed at California.
Obligated only to present a prima facie case, see Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. Cal. 1977) ("Any greater burden . . . would permit a defendant to obtain a dismissal simply by controverting the facts established by a plaintiff."), plaintiff sufficiently alleges that defendant acted intentionally in selecting the "NutriThrive" mark to promote its TPN-related product line with full knowledge of plaintiff and its "Nutrishare" mark. See Dole Foods Co., 303 F.3d at 1111 ("Because [the plaintiff] has sufficiently alleged that [the defendants] acted intentionally, we skip to the 'express aiming' requirement.").
Plaintiff contends that at least three grounds exist whereby defendant's conduct satisfies the "expressly aimed" requirement, which is met when the defendant is alleged to have engaged in conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state. Id. Specifically, plaintiff asserts that defendant maintains an interactive website that reaches out to California residents, actively solicits new California customers, and has ongoing commercial relationships with California customers.
Whether defendant's maintenance of its website constitutes purposeful direction necessitates application of the "sliding scale" approach approved by the Ninth Circuit in Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997). See id. at 419 (adopting the test originated by the district court in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997)). Under the sliding scale approach, "the likelihood [that] personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet." Zippo Mfg. Co., 952 F. Supp. at 1124.
At one end of this sliding scale, the defendant conducts online business transactions over the Internet with residents of the forum. Id. "In such situations, jurisdiction is almost always proper" because the defendant has asserted itself "into the forum and made actual contact, often commercial, with a forum resident." Callaway Golf Corp. v. Royal Canadian Golf Ass'n, 125 F. Supp. 2d 1194, 1202 (C.D. Cal. 2000) (citation omitted). At the other end of the scale are "passive" websites, through which the defendant simply posts information to those who access the site, such as advertisements and informational pieces about the website's host. Id.; see id. ("A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction.") (citation omitted). In the middle of the sliding scale are "interactive" websites that, for example, allow the user to exchange information with the defendant host site. Zippo Mfg. Co., 952 F. Supp. at 1124. With respect to "interactive" websites, courts must examine "the level of interactivity and commercial nature of the exchange of information that occurs on the Web site" to determine if the defendant has purposefully availed itself of the forum to make the exercise of jurisdiction comport with traditional notions of fair play and substantial justice. Cybersell, 130 F.3d at 420 (citing Zippo Mfg. Co., 952 F. Supp. at 1124).
Here, defendant's website falls somewhere in the middle, with certain features implicating both the passive and business transaction ends of the sliding scale continuum. Specifically, the website serves predominantly as a large-scale, static advertisement for defendant's products and/or services, and defendant does not conduct instant online transactions by allowing prospective browsers to purchase "NutriThrive" supplies and/or services directly over the Internet. The website does, however, present prospective browsers with a series of interactive functions that elevate it beyond the scope of an archetype "passive" website, including a "discussion board" in which any user can post messages or chat on-line with one of one of defendant's "consumer advocates"-- i.e., employees who are also consumers of "NutriThrive" products and/or services (Okamoto Decl., Ex. B.); a "Referral" section where any browser can sign up to become a "NutriThrive consumer" or refer a patient to become a "NutriThrive consumer" (Id.); and a "Contact Us" email interface page that gives prospective browsers the ability to request further information online regarding defendant's supplies and/or services. (Id. at Ex. A.) Thus, while defendant's website does not possess many of the characteristics of websites that are undeniably sufficient to demonstrate purposeful direction at the forum state, it nonetheless could qualify as an interactive website because "even a cursory glance at the [website] clearly illustrates that the site mainly serves to advertise and promote sales of the [defendant's] service." WebZero, LLC v. ClicVU, Inc., No. 08-0504, 2008 WL 1734702, at *6 (C.D. Cal. Apr. 4, 2008); see also id. ("Despite the absence of [explicit means of business transactions], the Court finds that the site is fundamentally a commercial website because it purports to offer and provide services to visitors."); cf. Rubbercraft Corp. of Cal. v. Rubbercraft, Inc., No. 97-4070, 1997 WL 835442, at *3 (C.D. Cal. Dec. 17, 1997) (finding purposeful availment/direction based partially on the fact that defendant's used national advertising, maintained an 800 number, and operated a web-page that advertised defendant's product and gathered customer information).
Although the website demonstrates a significant level of interactivity, defendant's stand-alone maintenance of it does not conclusively constitute purposeful direction. See Cybersell, 130 F.3d at 419-20 (declining to exercise personal jurisdiction over a defendant whose website allowed users to list their addresses with the site, indicate an interest in the defendant's services, and view advertisements and other information posted on the site). However, plaintiff has sufficiently alleged additional conduct directly targeting California--thus satisfying the requirement of "something more." See Rio Props. v. Rio Int'l Interlink, 284 F.3d 1007, 1020 (9th Cir. 2002) ("While [defendant's] assertion [that it operates only a passive website] may be true, operating even a passive website in conjunction with 'something more'--conduct directly targeting the forum--is sufficient to confer personal jurisdiction."). Specifically, defendant's website explicitly targets California consumers with an announcement in the "NEWS AND EVENTS" section--prominently displayed as the centerpiece of defendant's "NutriThrive" homepage--that it will be attending the 2008 Oley Conference held in San Diego, California between June 26 and June 29, 2008.*fn3
(Okamoto Decl. Ex. B.) Because the majority of the Oley Conference attendees are local home infusion customers that benefit from TPN-related products and services, this California-based conference serves as a crucial marketing exhibition for national home infusion companies such as the parties to this lawsuit. (Okamoto Decl. ¶ 7.) Thus, it is fair to say that "[t]he website's content suggests that [defendant] was looking to attract [customers] in California" insofar as it "targeted specific markets including California." In-N-Out Burgers v. Basso, No. 05-1231, 2005 WL 5337562, at *2 (C.D. Cal. June 27, 2005); see id. ("[B]ecause the defendant deliberately directed its advertising and solicitation efforts toward California residents, the purposeful availment prong is satisfied."); Ind. Plumbing Supply, Inc. v. Standard of Lynn, Inc., 880 F. Supp. 743, 747 n.2 (C.D. Cal. 1995) (finding that, given the California-based features apparent in its national advertisement, "the defendant could reasonably anticipate that it would receive some interest from California customers").
Defendant's alleged conduct constituting "something more" is also evinced by its concession that it maintains commercial relationships with two Southern California-based "NutriThrive" customers.*fn4 See id. at 747 (holding that the plaintiff demonstrated "something more" in order to base jurisdiction in California when, in addition to its generic national marketing campaign that was alleged to have infringed plaintiff's trademark, "Defendant has also made two California sales since the challenged advertisements began running."). Moreover, plaintiff has submitted a declaration from a Southern Californian resident who contacted defendant via the toll-free number listed on its website. (Bundy Decl. ¶ 3.) After simply inquiring whether defendant offered its services in California, defendant's head TPN pharmacist purportedly offered to send one of defendant's nurses to California to assist the declarant with her TPN setup.*fn5 (Id.) Subsequently, the declarant asserts that defendant sent her a "start-up" packet, including a binder containing "NutriThrive" promotional materials and a business card. (Id.); see W. Corp. v. Superior Court, 116 Cal. App. 4th 1167, 1176 (2004) (finding that marketer who "upsells" by offering additional products or services to customer who initially contacts marketer, knowing that customer is California resident, avails itself of California for business even though customer placed initial call).
Consequently, because plaintiff sufficiently alleges that defendant's operation of an interactive website--supplemented by its direct marketing toward California and ongoing relationships with California-based consumers--has caused plaintiff harm in the state of its "principal place of business," Excel Plas, Inc. v. Sigmax Co., Ltd., No. 07-0578, 2007 WL 2853932, at *6 (S.D. Cal. Sept. 27, 2007), defendant has purposefully availed/directed itself to jurisdiction in California. See Tech Heads, Inc. v. Desktop Serv. Ctr., 105 F. Supp. 2d 1142, 1151 (D. Or. 2000) (holding that defendant "intentionally availed itself of jurisdiction" by "posting a highly commercial, highly interactive Web site on the World Wide Web, engaging in Internet commerce with at least one [forum state] resident, advertising in a national newspaper"); Stomp, Inc. v. Neato L.L.C., 61 F. Supp. 2d 1074, 1078 (C.D. Cal. 1999) (finding that, by advertising its products for over the Internet, the defendant purposefully availed itself of the forum state, even though only two sales had been consummated with forum residents).
b. Claims Arising Out of/Related to Defendant's Forum-Related Activities
The second requirement for specific jurisdiction is that the claims asserted in the litigation arise out of a defendant's forum related activities. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998). To determine whether a plaintiff's claims arise out of forum-related activities, courts apply a "but for" test--i.e., but for the defendant's forum-related activities through which it purposefully avails itself of the forum, the plaintiff would not have suffered injury. Doe v. Unocal Corp., 248 F.3d 915, 925 (9th Cir. 2001).
Here, because the purported injuries that led plaintiff to assert its trademark and unfair competition claims against defendant arise directly from defendant's allegedly infringing conduct in California, plaintiff has similarly satisfied the second requirement for specific jurisdiction. See Rio Props. v. Rio Int'l Interlink, 284 F.3d 1007, 1021 (9th Cir. 2002) ("[T]his requirement was satisfied where [defendant's misappropriation] of [plaintiff's] trademark had the effect of injuring [plaintiff] in California, its home state."); Dole Food Co. v. Watts, 303 F.3d 1104, 1114 (9th Cir. 2002) ("It is obvious that [plaintiff's] claims against [defendants] arise directly out of their contacts with the forum [where] the contacts between [defendants] and the forum state are integral and essential parts of the alleged fraudulent scheme on which [plaintiff] bases its suit."); WebZero, L.L.C. v. ClicVU, Inc., No. 08-0504, 2008 WL 1734702, at *7 (C.D. Cal. Apr. 4, 2008) ("[I]t is plainly evident that [plaintiff's] patent infringement suit directly relates to ClivVU's allegedly infringing services . . . in California.").
c. Reasonableness of Exercising Jurisdiction
Because plaintiff has succeeded in satisfying both of the first two prongs in the specific jurisdiction analysis, defendant now has the burden of convincing the court that jurisdiction is nonetheless unreasonable. See Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995) ("To avoid jurisdiction, [the defendant] must 'present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.'" (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985))). The Ninth Circuit has articulated the following seven factors to determine whether the exercise of jurisdiction over a non-resident defendant comports with fair play and substantial justice, none of which is dispositive:
(1) the extent of the [defendant's] purposeful interjection into the forum state's affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the [defendant's] state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and (7) the existence of an alternative forum.
Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1487-88 (9th Cir. 1993).
i. Defendant's Purposeful Interjection
A district court must usually begin by considering the extent to which the defendant, by its alleged activities, purposefully interjected itself into the forum. Id. at 1488. As defendant acknowledges, however, because the Ninth Circuit has found that "[t]he factor of purposeful interjection is analogous to the purposeful direction analysis" discussed above, this factor does not weigh against jurisdiction where the court has already determined that defendant purposefully directed its activities at the forum state. Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1199 (9th Cir. 1988); see also Roth v. Garcia Marquez, 942 F.2d 617, 623 (9th Cir. 1991) (finding that "[i]n light of the first prong of purposeful availment, analysis of this first factor in the third prong would be redundant" and thus "there is no need to analyze this first factor separately"); Corp. Inv. Bus. Brokers v. Melcher, 824 F.2d 786, 790 (9th Cir. 1987) ("Ninth Circuit cases give the 'purposeful interjectment' factor no weight once it is shown that the defendant purposefully directed its activities to the forum state . . . .").
ii. Defendant's Burden of Litigating in California
The court must also consider the burden that litigating in the forum state places on the nonresident defendant. Callaway Golf Corp. v. Royal Canadian Golf Ass'n, 125 F. Supp. 2d 1194, 1205 (C.D. Cal. 2000). While acknowledging that defendant, whose principal place of business is in Ohio, would be inconvenienced by having to defend itself in California, "with the advances in transportation and telecommunications and the increasing interstate practice of law, any burden is substantially less than in days past."*fn6 Menken v. Emm, 503 F.3d 1050, 1060 (9th Cir. 2007); see also Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 128-29 (9th Cir. 1995) (noting that unless the "inconvenience is so great as to constitute a deprivation of due process, it will not overcome clear justifications for the exercise of jurisdiction.") (citation omitted). Thus, any weight gleaned from this factor in defendant's favor is negligible.
iii. Sovereignty Interests
Both parties agree that, to the extent the court must consider whether the exercise of jurisdiction in California would conflict with the sovereignty interests of defendant's alternative forum of Ohio, Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1323 (9th Cir. 1998), this factor is inapplicable "because there is no conflict between the sovereignity of Ohio and California." (Pl.'s Opp'n to Def.'s Mot. to Dismiss 23:12-13; Def.'s Reply in Supp. of Mot. to Dismiss 15:3-5.)
iv. State's Interest
Because "California maintains a strong interest in providing an effective means of redress for its residents [who are] tortiously injured," Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1489 (9th Cir. 1993) (internal citations omitted), this factor weighs in plaintiff's favor. See Dole Food Co. v. Watts, 303 F.3d 1104, 1116 (9th Cir. 2002) ("Since [plaintiff's] principal place of business is California, this factor favors plaintiff."); accord Panavision Int'l, L.P., 141 F.3d at 1323.
v. Efficiency of the Forum
The "efficiency of the forum" factor focuses on "where the witnesses and the evidence are likely to be located." Core-Vent Corp., 11 F.3d at 1489. The court recognizes that witnesses will presumably come from both California and Ohio, but the majority of witnesses, as well as evidence related to defendant's infringing conduct, appear to be located in California. Thus, this factor also weighs in favor of plaintiff.
vi. Convenience and Effectiveness of Relief for Plaintiff
"Although the importance of the forum to the plaintiff nominally remains part of this test, cases have cast doubt on its significance." Caruth v. Int'l Psychoanalytical Ass'n, 59 F.3d 126, 129 (9th Cir. 1995) (citing Core-Vent Corp., 11 F.3d at 1490). As the Ninth Circuit has previously stated, "[n]o doctorate in astrophysics is required to deduce that trying a case where one lives is almost always a plaintiff's preference." Roth v. Garcia Marquez, 942 F.2d 617, 624 (9th Cir. 1991); see also Dole Food Co., Inc., 303 F.3d at 1116 ("[I]n this circuit, the plaintiff's convenience is not of paramount importance."). Consequently, this factor does not significantly influence the court's analysis.
vii. Availability of an Alternative Forum
Plaintiff fails to demonstrate that an alternative forum, presumably Ohio, is either unavailable or unable to effectively adjudicate the instant dispute. Defendant has not, however, identified a "regulatory or policy interest[ that would be] served by the exercise of jurisdiction in [the alternative forum], making it unlikely that [the alternative forum] possesses a strong interest in providing a forum to resolve this suit." Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1201 (9th Cir. 1988). Moreover, "whether another reasonable forum exists becomes an issue only when the forum state is shown to be unreasonable." Id. (citation omitted).
In balancing the reasonableness factors, the court concludes that defendant has failed to present a compelling case that the exercise of jurisdiction in California would be unreasonable. See Caruth, 59 F.3d at 128 ("Since [defendant] purposefully availed itself of the forum state, we begin with a presumption of reasonableness which can only be overcome by a 'compelling case that the presence of some other considerations would render jurisdiction unreasonable.'") (citation omitted). Accordingly, because plaintiff's claims arise from defendant's purposefully directed, forum-related conduct, the court will deny defendant's motion to dismiss for lack of personal jurisdiction.
B. Motion to Dismiss for Improper Venue or, Alternatively, Motion to Transfer Venue
Defendant next argues that, even if susceptible to personal jurisdiction in California, plaintiff's assertion of venue in this district is nonetheless improper and the court should dismiss the action or, alternatively, transfer it to the Southern District of California pursuant to 28 U.S.C. § 1406(a). Under § 1406(a), if an action is filed in the wrong district, the court must, upon timely motion, dismiss the action or, if it be in the interest of justice, order transfer to any district where the "action could have been brought." 28 U.S.C. § 1406(a); see also Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1181 (9th Cir. 2004) ("A defendant over whom personal jurisdiction exists but for whom venue is improper may move for dismissal or transfer for improper venue under 28 U.S.C. § 1406(a)."). When venue is challenged under § 1406(a), the plaintiff bears the burden of establishing that venue is in the proper forum. See Airola v. King, 505 F. Supp. 30, 31 (D. Az. 1980); see also Hope v. Otis Elevator Co., 389 F. Supp. 2d 1235, 1243 (E.D. Cal. 2005) ("Plaintiff has the burden of proving that venue is proper in the district in which the suit was initiated.").
Venue in federal Lanham Act cases is governed by the general venue statute, 28 U.S.C. § 1391(b), which states that venue is proper in a judicial district (1) in which any defendant resides, if all defendants reside in the same state; (2) in which a substantial part of the events or omissions giving rise to the claim occurred; or (3) in which any defendant may be found, if there is no other district in which the action may be brought.
Id. § 1391(b)(1)-(3). "[A] defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." Id. § 1391(c). However, "this does not mean that venue is proper in any district where defendant could be subjected to service." Johnson Creative Arts v. Wool Masters, 743 F.2d 947, 950 (1st Cir. 1984). Rather, in states like California that have more than one judicial district, "such corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State."
28 U.S.C. § 1391(c). "This effectively turns the venue question into a personal jurisdiction analysis, treating the Eastern District of California as a state." Honor Plastic Indus. v. Lollicup USA, Inc., No. 06-0707, 2006 WL 2792812, at *5 (E.D. Cal. Sept. 26, 2006).
Given § 1391(c)'s express instruction, plaintiff must satisfy its burden by demonstrating the existence of substantial contacts or purposeful avialment/direction by which defendant has subjected itself to personal jurisdiction in the Eastern District of California.*fn7 Plaintiff's "demonstration" of such contacts and/or conduct is limited to its conclusory assertions that personal jurisdiction exists in this district because (1) defendant has registered with the California State Board of Pharmacy in Sacramento and appointed an agent for service of process, and (2) a woman named "Jessi" from Redding, California purportedly posted an online message indicating that she had engaged in discussions with defendant about possible treatment.
First, as thoroughly addressed above, see supra, Section II.A.1, substantial due process concerns prevent the exercise of personal jurisdiction over defendant based solely on compliance with a state statute such as the one at issue here--particularly when registration and agent designation took place in Sacramento purely because Sacramento, as the State capital, is home to the California State Board of Pharmacy. See, e.g., Ratliff v. Cooper Labs., Inc., 444 F.2d 745, 748 (4th Cir. 1971) ("The principles of due process require a firmer foundation than mere compliance with state domestication statutes.").
Second, plaintiff has failed to present the court with a declaration from, or any actual relevant evidence ascertaining the identity or whereabouts of, "Jessi." Instead, plaintiff offers nothing more than a printout of an online bulletin board from a third-party website (www.parent-2-parent.com) on which several thousand users have posted messages, one of which is submitted under the username "Jessi" and indicates that this user has been in contact with defendant.*fn8 (Okamoto Decl. Ex. D); cf. Earth Prods., Inc. v. Meynard Designs, Inc., No. 05-1326, 2006 WL 2192124, at *2 (W.D. Wash. July 31, 2006) (finding that venue in the district was improper where the defendant's letter to a retailer in the district "constitutes the only evidence regarding [defendant's] use of the allegedly infringing trademark in [the district]"). Defendant categorically denies plaintiff's assertions that it has initiated contact and/or entered into commercial relationships with any prospective customers in this district, including "Jessi." (Rielly Decl. ¶ 13; Pfister Decl. ¶ 8.) Defendant further reasserts under the penalty of perjury that it only has had three California-based customers in its existence, all of whom are based in Southern California and only two of which use "NutriThrive" products. (Rielly Decl. ¶ 13); see also Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (finding that "plaintiff cannot 'simply rest on  bare allegations'") (citation omitted); Jaliwa v. Concerned Citizens of S. Cent. L.A., No. 06-2617, 2007 WL 2021818, at *4 (S.D. Cal. July 10, 2007) ("[Plaintiff's] bare assertion of belief that [defendant] resides in this district is insufficient to satisfy Plaintiff's burden of establishing that [defendant] resides in this district.").
Consequently, because it is "essentially uncontroverted that defendant's business contacts with the [Eastern] District have been extremely limited" (general jurisdiction) and "there have been minimal, if any, 'events or omissions' by defendant in the [Eastern] District giving rise to plaintiff's claims" (specific jurisdiction), the Eastern District--as a hypothetical separate state--could not exercise personal jurisdiction over defendant and thus plaintiff has failed to demonstrate that venue is proper in this district. Jamba Juice Co. v. Jamba Group, No. 01-4846, 2002 WL 1034040, at *2-3 (N.D. Cal. May 15, 2002); see also Kelly v. Qualitest Pharms., Inc., No. 06-0116, 2006 WL 2536627, at *11 (E.D. Cal. Aug. 31, 2006) (finding that, because "[t]he burden was on Plaintiff to show that venue was proper" and "the allegations indicate [only] attenuated conduct by Defendant," "Plaintiff has failed to meet her burden of showing that venue is proper in the Eastern District of California"); Injen Tech. Co. Ltd. v. Advanced Engine Mgmt., 270 F. Supp. 2d 1189, 1196 (S.D. Cal. 2003) (holding that because defendant did not sell infringing products in the Southern District of California, "the Court concludes that if the Southern District of California were a separate forum state, the defendant's contacts with the district would be insufficient to justify the Court's exercise of specific jurisdiction"); Jamba Juice Co., 2002 WL 1034040, at *3 (finding that plaintiff failed to demonstrate proper venue in the Northern District of California where the only evidence submitted to supplement plaintiff's bare allegations showed that "defendant had no clients in northern California in its client database[, d]efendant does not advertise in the yellow pages in the Northern District[, d]efendant does no direct advertising in northern California, nor does defendant send any advertising mailers, brochures or letters into northern California. . . . Defendant, in short, does not direct any business activities at the Northern District, nor profit from any business activities in this district").
Because plaintiff has failed to meet its burden, the court, in the interests of justice, will exercise its discretion to transfer the action under 28 U.S.C. § 1406(a) to a venue that is appropriate. See Shell v. Shell Oil Co., 165 F. Supp. 2d 1096, 1103 (C.D. Cal. 2001) (noting that, under § 1406(a), "[i]f a plaintiff commences an action in a district in which venue is not proper," "[t]he court has some discretion in choosing between [dismissing or transferring], though generally it is preferred to transfer the case rather than dismissing it altogether"). "If the Court's decision is to transfer, rather than dismiss, the transfer shall be made pursuant to a proper determination of venue pursuant to 28 U.S.C. § 1391[(b)]." Da Cruz v. Princess Cruise Lines, Inc., No. 00-0867, 2000 WL 1585695, at *2 (N.D. Cal. Oct. 12, 2000).
Defendant has requested transfer under § 1406(a) to the Southern District of California, and the court agrees that this venue is proper under § 1391(b) because a "substantial part of the events or omissions giving rise to the claim occurred" in San Diego particularly and Southern California generally. 28 U.S.C. § 1391(b)(2). Specifically, the "passing off" of defendant's allegedly infringing trademark would have occurred in the context of defendant's sales of its "NutriThrive" products and/or services to its California customers, all of whom are located in Southern California. See Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633, 639 (2d Cir. 1956) ("[I]n cases of trade-mark infringement and unfair competition, the wrong takes place . . . where the passing off occurs, i.e., where the deceived customer buys the defendant's product in the belief that he is buying the plaintiff's [product]."); see also Woodke v. Dahm, 70 F.3d 983, 985 (8th Cir. 1995) ("The place where the alleged passing off occurred . . . provides an obviously correct venue.").
Additionally, defendant's advertisement announcing its upcoming presence at San Diego's Oley Conference--prominently featured on defendant's website as an opportunity for local attendees to meet and associate with "NutriThrive" representatives--also implicates the very events and circumstances giving rise to plaintiff's instant claims. Chiu v. Mann, No. 02-4590, 2003 WL 716247, at *3 (N.D. Cal. Feb. 24, 2003) ("Venue is also improper in the Northern District of California, because the events giving rise to plaintiff's claims occurred . . . within the Central District of California."). Finally, although plaintiff has submitted a declaration from Kathryn Bundy stating that defendant's solicited her and therein sent her a catalog of its services, it is nonetheless undisputed that Ms. Bundy also resides in Southern California. (Bundy Decl. ¶ 1.)
Accordingly, because the interests of justice favor the intrastate transfer of this action to a proper venue pursuant to § 1406(a) as opposed to plenary dismissal, the court will deny defendant's motion to dismiss but grant defendant's motion to transfer to the Southern District of California. See, e.g., Jaliwa v. Concerned Citizens of S. Cent. L.A., No. 06-2617, 2007 WL 2021818, at *4 (S.D. Cal. July 10, 2007) (transferring case from the Southern District of California pursuant to § 1406(a) based on plaintiff's failure to establish proper venue and because "[t]his action could have been, and should have been, brought in the Central District of California . . . where the events that are the subject of this Complaint took place"); Injen Tech. Co. Ltd. v. Advanced Engine Mgmt., 270 F. Supp. 2d 1189, 1195 (S.D. Cal. 2003) (transferring infringement case where "Defendant  does not 'reside' in the Southern District of California for purposes of 28 U.S.C. § 1391(c) and, therefore, venue in this district is improper[; v]enue, however, clearly is proper in the Central District of California"); Jamba Juice Co. v. Jamba Group, No. 01-4846, 2002 WL 1034040, at *3 (N.D. Cal. May 15, 2002) (transferring action from the Northern District of California pursuant to § 1406(a) after a finding of improper venue because "[v]enue is undoubtedly proper in the Central District of California"); Da Cruz v. Princess Cruise Lines, Inc., No. 00-0867, 2000 WL 1585695, at *5 (N.D. Cal. Oct. 12, 2000) (exercising discretion under § 1406(a) to transfer the case from Northern District of California, where venue was deemed improper, because "it appears to this Court that venue properly lies in the Central District of California, since defendant could be said to 'reside' there in accordance with the test for general personal jurisdiction described above").
IT IS THEREFORE ORDERED that:
(1) defendant's motion to dismiss plaintiff's Complaint for lack of personal jurisdiction be, and the same hereby is, DENIED; and
(2) defendant's motion to transfer based on improper venue be, and the same hereby is, GRANTED.
Pursuant to the provisions of 28 U.S.C. § 1406(a), this case is hereby ordered TRANSFERRED to the United States District Court for the Southern District of California for all further proceedings.