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Old Gringo, LLC, A California Limited v. International Imports

November 30, 2011

OLD GRINGO, LLC, A CALIFORNIA LIMITED
LIABILITY COMPANY,
PLAINTIFF,
v.
INTERNATIONAL IMPORTS, INC., A TEXAS CORPORATION; GUILLERMO A. MASSO, AN INDIVIDUAL; ALEX MASSO, AN INDIVIDUAL; DOES 1 TO 10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER: (1) GRANTING MOTION TO DISMISS [Doc. No. 4]; and (2) TRANSFERRING CASE TO SOUTHERN DISTRICT OF TEXAS.

This is an action for trade dress infringement and related claims based on Defendant International Imports, Inc.'s alleged sale of boots that infringe upon Plaintiff Old Gringo, LLC's three styles of boots. Currently before the Court is International Imports's motion to dismiss for lack of personal jurisdiction and improper venue, or in the alternative to transfer the case to the Southern District of Texas. Having consider the parties' arguments, and for the reasons set forth below, the Court GRANTS the motion and ORDERS that this case be transferred to the Southern District of Texas because personal jurisdiction is lacking and venue is improper in this district.

BACKGROUND

Old Gringo is in the business of manufacturing, licensing, designing, marketing, distributing, promoting, and selling high-end boots and leather goods. Old Gringo distributes the boots from San Diego, California, among other locations. Its boots are advertised and sold on many high-visited web sites and are sold in specialty boutiques and shoes stores, but not in mass market stores or department stores. According to Old Gringo, three of its most popular designs and best sellers are boots titled: "Grace," "Milagros," and "'Taka Stud."

Old Gringo alleges that in August 2011, it attended a trade show in Las Vegas, Nevada, where it became aware that International Imports was producing, marketing, and selling boots nearly identical in nature to the three designs referenced above.

International Imports is a Texas company that sells a variety of boots, including three product lines that are alleged to infringe Old Gringo's trade dress. International Imports operates exclusively from its main office in Edinburg, Texas, which is in the Southern District of Texas, and has no offices, employees, or sales force in California. It does, however, occasionally fill shoe orders from purchasers in California, but such orders represented less than 1% of its 2011 revenues and none were orders for boots. Beyond that, International Imports is not registered to do business in California, holds no business license or any other license in California, and has no registered agent for service of process in California. It owns no real or personal property in California and maintains no bank accounts in California. It has no website and does not promote its products online or advertise in California. It has never paid taxes in California.

Old Gringo commenced this action on August 23, 2011, alleging unfair competition in violation of the Lanham Act, the California Business and Professional Code, and the California common law. [Doc. No. 1.] In response, International Imports filed the present motion, seeking to dismiss the action under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and Rule 12(b)(3) for improper venue. [Doc. No. 4.] In the alternative, International Imports seeks to have this case transferred to the Southern District of Texas under 28 U.S.C. §§ 1404(a) or 1406(a). Old Gringo filed a late opposition, and International Imports filed a reply. The Court finds the motion suitable for disposition without oral argument. See Civ. L.R. 7.1(d)(1).

DISCUSSION

I. Personal jurisdiction

International Imports moves to dismiss the case for want of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). Where, as here, there is no applicable federal statute governing personal jurisdiction, the Court applies the law of the state in which it sits. See Fed. R. Civ. P. 4(k)(1)(A); Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). Because California's long-arm statute, Cal. Civ. Proc. Code § 410.10, is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). For a court to exercise personal jurisdiction over a nonresident defendant consistent with federal due process, that defendant must have "certain minimum contacts" with the relevant forum "such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citation omitted).

In opposing International Imports's motion to dismiss for lack of personal jurisdiction, Old Gringo bears the burden of establishing that jurisdiction is proper. See Mavrix Photo, 647 F.3d at 1223. Where, as here, the motion is based on written materials rather than an evidentiary hearing, Old Gringo "need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Id. Old Gringo cannot "'simply rest on the bare allegations of its complaint,'" but "uncontroverted allegations in the complaint must be taken as true." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (citation omitted).

A. General jurisdiction

Old Gringo first asserts that California has general personal jurisdiction over International Imports. "A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so 'continuous and systematic' as to render them essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011). For general jurisdiction to exist, the defendant must engage in "continuous and systematic general business contacts," Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984), that "approximate physical presence" in the forum state. Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). "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, 374 F.3d at 801. As such, something more than a showing of "occasional" sales to forum residents is necessary to establish general jurisdiction over a nonresident defendant. See Helicopteros, 466 U.S. at 418 ("[M]ere purchases, even if occurring at regular intervals, are not enough to warrant a State's assertion of in personam jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions."); Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986) (concluding that occasional sales to California residents were insufficient to create general jurisdiction); Congoleum Corp. v. DLW Aktiengesellschaft, 729 F.2d 1240, 1242 (9th Cir. 1984) (noting that even presence of a substantial sales force within the forum is not sufficient for the forum to assert general jurisdiction over a nonresident defendant as to an unrelated cause of action).

In this case, International Imports's contacts with California are not so extensive that it is subject to general jurisdiction. The only contacts that Old Gringo can point to are International Imports's occasional sales to purchasers in California. (See Pl. Mem. of P.&A. ISO of Opp. to Def. Motion to Dismiss, at 4 [Doc. No. 6].) However, those sales amounted to less than 1% of International Imports's 2011 revenues. (Masso Decl. ¶ 12 [Doc. NO. 4-2.].) And none of those sales were for boots. (Id.) Besides those sales, International Imports has no offices or employees in California, is not registered to do business in California, has no registered agent for service of process in California, has no sales force in California, maintains no bank accounts in California, and has not paid taxes in California. (Id. ¶¶ 6-10.) Viewed in this light, International Imports's occasional sales to purchasers in California fall well short of the "continuous and systematic" contacts that the Supreme Court and the Ninth Circuit have held to constitute sufficient "presence" to warrant the exercise of general personal jurisdiction. See, e.g., Helicopteros, 466 U.S. at 416 (no general jurisdiction over a foreign corporation that, over seven years, purchased approximately 80% of its helicopter fleet from the forum ...


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