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Gonzales v. Palo Alto Labs

October 6, 2010

MICHAEL GONZALES, PLAINTIFF,
v.
PALO ALTO LABS, INC., DEFENDANT.



The opinion of the court was delivered by: Maria-Elena James Chief United States Magistrate Judge

ORDER TRANSFERRING CASE TO CENTRAL DISTRICT OF CALIFORNIA

I. INTRODUCTION

Pending before the Court is Plaintiff Michael Gonzales' ("Plaintiff") Motion for Default Judgment, filed August 5, 2010. (Dkt. #8.) Defendant Palo Alto Labs, Inc. ("Defendant") has not filed an opposition or otherwise appeared in this matter. After consideration of Plaintiff's papers, relevant legal authority, and good cause appearing, the undersigned hereby ORDERS that this case be transferred to the Central District of California as the proper venue.

II. BACKGROUND

In his Complaint, Plaintiff states that he "is a California citizen." (Compl. ¶ 7, Dkt. #1.) When the Court requested that Plaintiff clarify his residency for purposes of venue, he subsequently stated he "is a resident of Los Angeles County, California, which is located in the Central District of California." (Suppl. Mem. re: Appl. for Default J. ("Suppl. Mem.") 2:7-9, Dkt. #15.) He brings this action on behalf of the public pursuant to 35 U.S.C. § 292, which provides for civil penalties against anyone that uses the word "patent" in connection with any unpatented article for the purpose of deceiving the public. 35 U.S.C. § 292(a). Plaintiff relies on § 292(b), which provides that "[a]ny person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States."

Defendant has its principal place of business at 265 SW Port St. Lucie Blvd., Suite 252, Port St. Lucie, FL 34984. (Suppl. Mem. 2:10-13.) As a corporation or other business entity, Defendant is neither a minor nor an incompetent person. (Ferrell Decl. ¶ 4, Dkt. #5-1.) Defendant is owned by Nutramedics Inc., a Florida profit corporation (formerly Logan Systems Inc.), which has its principal address at 1027 N. Florida Mango Road, Suite 2, West Palm Beach, FL 33409. Id. at 2:13-15. In his proposed Findings of Fact and Conclusions of Law submitted to the Court, Plaintiff has asked that default judgment also be entered against Nutramedics Inc. on an alter ego basis.

Defendant is a corporation that manufactures, advertises, distributes, and sells dietary supplements, including "Paravol." (Compl. ¶ 8, Dkt. #1.) Defendant advertises Paravol as a sexual wonder drug for men, claiming that "Paravol is engineered specifically for men looking to heighten the intensity and duration of their orgasm. You will be amazed how Paravol dramatically increases the pleasure of every sexual experience." (Ferrell Decl. ¶ 15, Dkt. #5-1.)

Plaintiff alleges that Defendant falsely advertises that Paravol is patented, and that it is unique among male enhancement supplements because of its patent. Id. at ¶ 17. Specifically, Plaintiff states that in recent editions of Popular Science and other magazines, Defendant advertised: "Paravol's results are due to its patented approach. Its unique ingredients target the sources of male sexuality. Quite frankly, Paravol doesn't have any competition. That's because no other product on the market is designed to increase the intensity and duration of the male orgasm." Id. Plaintiff alleges that, in reality, Paravol is not patented, and that Defendant's false claims have driven enormous sales of Paravol, believed to exceed over one million units in recent years. Id. at ¶ 19.

On June 3, 2010, Plaintiff filed the present complaint, alleging that Defendant engaged in a false marking scheme to deceive the public and to stifle legitimate competition, and to gain a competitive advantage in the market. (Compl. ¶¶ 20-21.) The Complaint alleges a single cause of action for False Patent Marking and seeks the following: (1) a determination that Defendant has violated 35 U.S.C. § 292 by falsely advertising and marking Paravol as "patented" for the purpose of deceiving the public; (2) an order fining Defendant for false marking; (3) an order permanently enjoining Defendant and its affiliates from committing new acts of false patent marking and to cease all existing acts of false patent marking; and (4) an award of attorneys' fees and costs incurred in bringing this action. (Id. at 9:8-20.)

As Defendant has failed to respond to Plaintiff's Complaint or otherwise appear in this matter, the Clerk of Court entered Defendant's default on July 27, 2010. (Dkt. #6.) On August 5, 2010, Plaintiff filed the present Motion for Default Judgment, with a noticed hearing date of September 23, 2010. (Dkt. #8.) Defendant has not responded to Plaintiff's motion.

On September 16, 2010, the Court vacated the September 23 hearing and requested that Plaintiff provide further briefing. Specifically, after reviewing Plaintiff's submissions in support of his motion, the undersigned was concerned that the preliminary issues of personal jurisdiction and venue had not been properly addressed by Plaintiff. In his Complaint, Plaintiff states that he is a citizen of California, but did not state in which district he resides. Further, he states that Defendant is a corporation of "unknown origin." And, in his Proposed Findings of Fact and Conclusions of Law, (Dkt. #12), Plaintiff states only that jurisdiction is proper because Defendant "conducts business in this District through its advertising of Paravol in Popular Science and other nationwide advertising methods." Based on this information, it was not clear that jurisdiction existed, and the undersigned requested that Plaintiff answer the following questions:

1) In what district does Plaintiff reside?

2) Is Plaintiff able to provide any further information regarding Defendant's location, such as principal place of business and/or state of incorporation?

3) How can this Court exercise jurisdiction over Defendant when no evidence supporting jurisdiction has been presented other than advertisements in national magazines?

(Dkt. #13, 2:24-3:1.)

In response, Plaintiff provided the information stated above regarding Plaintiff's residence (Los Angeles) and Defendant's principal place of business (Florida). (Suppl. Mem. at 2:7-18, Dkt. #5.) As a basis for personal jurisdiction, Plaintiff stated that Defendant markets Paravol in both the Northern and Central Districts of California. Id. at 2:19-3:7. Given this response, it appeared that this case should be transferred to the Central District of California; accordingly, the undersigned ordered Plaintiff to show cause why this case should not be transferred. (Dkt. #17, 2:24-3:3.) The undersigned warned Plaintiff that he should be mindful that, given his failure to state where he resides in his complaint, the fact that his case had been pending in this district for more than three months would have little bearing on the Court's decision to transfer.

On October 5, 2010, Plaintiff filed his response to the order to show cause. (Borg Decl., Dkt. #18.) Plaintiff does not deny that the Central District is the proper venue for this case, but requests that it remain in this district based on the procedural posture of the case. Id. at ΒΆ 3. Specifically, Plaintiff states that "the only remaining matter to be handled is Plaintiff's Application for Default Judgment, so a transfer to the Central District of California would only cause significant delay in Plaintiff's obtaining relief in this matter and could significantly increase his costs in that connection." Id. On this basis, Plaintiff submits that transferring this action to the Central District of California would not promote the interests of justice. Id. Although the undersigned warned Plaintiff that the length of time the case has been pending in this district would have little bearing on the Court's decision to transfer, he provides no other basis for his request. The responsive ...


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