[Docket numbers 4, 26, 28, 29, 30, 31, 32, 58, 61.]
ORDER ON MOTIONS TO DISMISS OR FOR A MORE DEFINITE STATEMENT
Plaintiff filed his original complaint on April 20, 2010, identifying 21 causes of action including claims under the Copyright Act, Lanham Act, and RICO, as well as various California statutes and theories. The caption named sixteen different Defendants.
Defendant Robert Padilla then on May 17 moved to dismiss or, alternatively, for a more definite statement. (Docket no. 4.) Defendant Charles Dzama joined in this motion. (Docket no. 21.) This was followed by a motion to dismiss for lack of jurisdiction, or alternatively for a more definite statement, filed by Defendants Larry Chalmers and Premier Financial Solutions, LLC. (Docket no. 26.) Defendant Gus Gonzalez then moved to dismiss for lack of jurisdiction and for improper venue. (Docket no. 28.) Defendant Marilyn Miller filed a motion seeking the same relief, (Docket no. 29), as did Defendant Miriam Feldman (Docket no. 30), and Stan Friedman. (Docket no. 31.) Advanced Planning Services, Inc. ("APS"), Independent Career Agency, Inc. ("ICA"), Michael Rodman, Jeff Roediger, and Lori Roediger then moved to dismiss the complaint on the basis of alleged agreements concerning arbitration, jurisdiction, and venue. (Docket no. 32.) Defendants APS, Feldman, Friedman, Gonzalez, ICA, Miller, Rodman, and the Roedigers then filed a notice of joinder in Padilla's motion. (Docket no. 33.) Beth and Larry Chalmers and the Chalmers Insurance Agency (newly named as a Defendant in the FAC) then joined Padilla's motion. (Docket no.56.)*fn1
Then on July 16, 2010, with the Court's leave, Lizalde filed a first amended complaint ("FAC"). The FAC also contains 21 separate claims, including three under federal law, a RICO conspiracy claim, a copyright infringement claim, and a Lanham Act claim. The remainder are either state law claims or are more properly characterized as remedies (i.e., injunctive relief, rescission, accounting, and declaratory relief). In view of the herculean effort that had gone into briefing, however, the Court gave Defendants the option of having their motions construed as motions to dismiss the FAC. The Defendants requested this.
After that, Lizalde moved for a temporary restraining order (Docket no. 61), dismissed claims against Defendant Ozuna, Micah Keel, and the Keel Financial Group, and notified the Court of the declaration of bankruptcy by Larry and Beth Chalmers. The Court stayed this case as to the Chalmers and denied as unripe Beth Chalmers' motion to dismiss.
The following represents a summary of allegations in the 72-page FAC. Lizalde is president of VEBS, Inc., a company that provides financial counseling to federal employees. Lizalde and VEBS developed a retirement counseling program incorporating copyrighted materials. They allege most of the Defendants were trained on how to present the program and given access to the copyrighted materials; and were required to keep trade secrets confidential and use the copyrighted materials only as authorized. Plaintiffs allege
Defendants violated their agreements and infringed VEBS' copyrights and trademarks, in the process committing various state torts such as fraud, unfair competition, and misappropriation.
Before proceeding to other challenges, the Court first addresses the question of jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998) (refusing to endorse federal courts' practice of reaching merits without first confirming jurisdiction). Both personal and subject matter jurisdiction are threshold matters, and the Court may decide either first. Sinochem Int'l Co. Ltd. v. Malaysia Intern. Shipping Corp., 549 U.S. 422, 433 (2007). Venue questions are also threshold matters, and the Court may decide them before resolving jurisdictional issues. Id. at 431. Plaintiffs bear the burden of demonstrating proper venue and personal jurisdiction over each Defendant. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800, 802 (9th Cir. 2004) (requiring plaintiff to show defendant directed activities toward the forum, and that the claim arises from forum-related activities); Koresko v. Realnetworks, Inc., 291 F. Supp. 2d 1157, 1160 (E.D.Cal. 2003) (venue).
Because personal jurisdiction and venue are intertwined here, the Court first reviews both jurisdictional and venue arguments raised in each of the motions.
A. Gonzalez Motion (Docket no. 28)
Gonzalez appeared specially, challenging both venue and personal jurisdiction, but addresses them both together. In fact, the question boils down to venue, because if venue is proper, Gonzalez is also amenable to personal jurisdiction as he himself points out. See Columbia Pictures Television v. Krypton Broadcasting of Birmingham, Inc., 106 F.3d 284, 289 (9th Cir. 1997), rev'd on other grounds by Feltner v. Columbia Pictures Television, Inc. 523 U.S. 340 (1998) (under 28 U.S.C. § 1400(a), venue in copyright infringement actions is proper "in any judicial district in which the defendant would be amenable to personal jurisdiction if the district were a separate state").
Gonzalez argues he is an Idaho resident and never conducted business in, or tried to conduct business in this District. There is no real argument he is subject to general jurisdiction. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.15 (1985) (distinguishing specific and general personal jurisdiction). For his part, Lizalde alleges various contacts, including allegedly infringing conduct that occurred within this district, and, notably, a agreement consenting to personal jurisdiction in California and venue in this District. Gonzalez admits he attended a one-day training course in this district, and Lizalde now alleges obtained materials at that training which Gonzalez later infringed.
These contacts are not alleged in the FAC. While the FAC is not required to include allegations showing proper venue, see 15 Wright, Miller & Cooper, Federal Practice and Procedure, Jurisdiction and Related Matters § 3826, Plaintiffs at the same time can't show venue is proper on the basis of claims they haven't brought or haven't sufficiently identified. The FAC broadly says many of the acts giving rise to claims occurred in this district, but it doesn't say which Plaintiffs did anything in this District. The FAC alleges some Defendants reside in this district, which would make venue and personal jurisdiction proper at least as to them. And while it generally alleges the existence of a conspiracy, the very generalized allegations aren't sufficient to show what Gonzalez did, or that Gonzalez aimed his activities toward this District. In short, the FAC's generalized allegations aren't sufficient to show that venue is proper or that the Court can exercise personal jurisdiction over Gonzalez.
Unlike subject matter jurisdiction, both venue and personal jurisdiction can be waived. Leroy v. Greta Western United Corp., 443 U.S. 173, 180 (1979). Plaintiffs support their argument with a copy of Gonzalez's confidentiality agreement. (Lizalde Decl. (Docket no.44), Ex. B.) The agreement deals with confidentiality, nondisclosure, and ownership of intellectual property, which forms the basis for many of the FAC's claims. Section 8.5 of that agreement provides "Exclusive jurisdiction over and venue of any suit arising out of or relating to this Agreement will be in the state and federal courts of the County of San Diego, California." If Plaintiffs can show this agreement is applicable, venue would be proper as to claims against Gonzalez, and the Court could also exercise personal jurisdiction over him.
Gonzalez argues the agreement is inapplicable here, because none of the Plaintiffs was a party to them. Specifically, he points out the parties are himself, ICA, and "VEBS, a California company" - not VEBS, Inc., the Plaintiff here. Gonzalez also argues the agreement was signed before VEBS, Inc. even came into being. The issue of VEBS, Inc.'s succession to the agreement was not briefed.
The agreement, if applicable, would be sufficient to show Gonzalez consented to both venue in this District and personal jurisdiction in California. Some of the infringement allegedly occurred in this District, and the harm resulting from Gonzalez's alleged wrongdoing would be felt here, where VEBS has its headquarters. The forum selection clause would therefore be enforceable. See Burger King, 471 U.S. at 479--80 (enforcing forum selection clause, where defendant had few actual contacts with forum state, other than entering into business agreement and business relationship with defendant); see also id. at 472--73 and n.14 (discussing due process and "fair warning" requirements). If Plaintiffs can show VEBS, Inc. is a successor to this agreement, however, Gonzalez will have waived venue and personal jurisdiction objections.
2. Copyright and Trademark Infringement
VEBS, Inc. the copyright holder, has its headquarters in this District. Plaintiffs have alleged these Defendants attended training seminars in this District, where they obtained copyright-protected materials. They allege these Defendants later willfully infringed the copyrights (see FAC, ¶¶ 64--69), as well as VEBS' trademark. Regardless of where the infringing acts were committed, acts infringing VEBS' copyright or protected marks are enough to create specific personal jurisdiction and make venue proper in this District. Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128--29 (2010). Gonzalez, Miller, Feldman, and Friedman admit they attended the training seminars. If the FAC has alleged one or more intentional acts they took to infringe its rights, both jurisdiction and venue would be established, because Defendants knew VEBS was located in this District and therefore would be deemed to have aimed their conduct here. See id.(discussing "intentional act" and "aiming" requirements).
The Court has analyzed the Lanham Act claim in section III.A and the copyright claim in section III.C below, however, and finds they are not adequately pleaded. For these reasons, the Court finds Plaintiffs have not shown that venue is proper or the Court can exercise personal jurisdiction over Gonzalez. It may be that Plaintiffs can amend the FAC again to show this, however, so claims against Gonzalez will be dismissed without prejudice.
B. Miller Motion (Docket No. 29)
Defendant Marilyn Miller, a Washington resident, brings a similar motion. She admits she attended two three-day training sessions in this District in 2009 and 2010. Lizalde, in opposition, argues as he did with Gonzalez, that during those visits she obtained copyright-protected materials and later infringed the copyright. He also points to the confidentiality agreement as consenting to venue and jurisdiction.
As with Gonzalez, the FAC makes only very generalized allegations about what Miller did. The analysis of this motion is therefore the same. Claims against Miller will be dismissed without prejudice and with leave to amend, ...