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.").
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").
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 ...