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Sure-Fire, LLC, A California Company v. Casual Home Worldwide

June 26, 2012

SURE-FIRE, LLC, A CALIFORNIA COMPANY,
PLAINTIFF,
v.
CASUAL HOME WORLDWIDE, INC., A NEW YORK CORPORATION D/B/A
AS MOOT FENIXGEAR.COM; AND FENIXLIGHT LIMITED, A COMPANY LOCATED IN THE PEOPLE'S JURISDICTIONAL DISCOVERY REPUBLIC OF CHINA,
DEFENDANTS.



The opinion of the court was delivered by: Irma E. GONZALEZUnited States District Judge

ORDER (1) GRANTING IN PART AND DEFENDANTS' MOTION TO DISMISS [Doc. No. 14] (2) DENYING PLAINTIFF'S MOTION FOR [Doc. No. 16] DENYING IN PART

Presently before the Court is Defendants Casual Home Worldwide, Inc. ("Casual Home") and Fenixlight, Ltd. ("Fenixlight") (collectively "Defendants")'s motion to dismiss Plaintiff Sure-fire, LLC ("Sure-fire")'s complaint for lack of personal jurisdiction. [Doc. No. 14.] Fenixlight also moves to dismiss Sure-fire's complaint for improper service, or, in the alternative, to quash service. [Id.] For the reasons below, the Court GRANTS IN PART and DENIES IN PART Defendants' motion to dismiss.

BACKGROUND

This is a patent infringement action. On January 17, 2012, Sure-fire, a California company with its principal place of business in Fountain Valley, California, filed the present action against Defendants alleging infringement of U.S. Patent No. RE40,125 (the "'125 patent") and U.S. Patent No. 7,722,209 (the "'209 patent") (collectively "the patents-in-suit"). [Doc. No. 1, Compl.] Specifically, Sure-fire alleges that certain flashlights imported and sold by the Defendants, including the PD20 and TK10 models, infringe the patents-in-suit. [Id. ¶¶ 14-15, 17, 22.]

Casual Home is a New York Corporation with its principal place of business in Amityville, New York. [Doc. No. 14-3, Declaration of Ming Chiang ("Chiang Decl.") ¶ 3.] Casual Home is not incorporated in California, is not qualified to do business in California, and has no subsidiaries incorporated or qualified to do business in California. [Id. ¶ 4.] None of Casual Home's officers, members, directors, employees, or agents reside or are domiciled in California. [Id. ¶¶ 5-6.] Casual Home does not have any offices or comparable facilities, telephone numbers, or bank accounts in California, does not own any real or personal property in California, and does not enter into contracts in California. [Id. ¶¶ 7-9, 12-13.] Casual Home asserts that it does not direct any of its advertising specifically toward California residents or advertise in any publications that are targeted or directed primarily toward California residents. [Id. ¶ 15.]

Casual Home operates the website Fenixgear.com as an online retailer of lighting products. [Doc. No. 14-3, Chiang Decl. ¶ 3.] Casual Home's annual sales of the accused products, the PD20 and TK10 flashlights, in California are: 201 units ($8,003.15) in 2010; 94 units ($3,777) in 2011; and 13 units ($458.85) for the first four months of 2012. [Doc. No. 19-1, Reply Declaration of Ming Chiang ("Chiang Reply Decl.") ¶ 5.] These amounts represent 0.39877% in 2010, 0.1646% in 2011, and 0.0461% in the first four months of 2012 of Casual Homes's overall annual sales of all its products. [Id. ¶ 6.]

Fenixlight is a Chinese limited liability company with its principal place of business in Shenzhen, China. [Doc. No. 14-2, Declaration of Karrass Su ("Su Decl.") ¶ 3.] Fenixlight does not directly ship the accused products to California. [Id. ¶ 20.] Rather, it ships the products by air to resellers that are located in other states. [Id.]

By the present motion, Defendants move to dismiss Plaintiff's complaint for lack of personal jurisdiction. [Doc. No. 14.] In addition, Fenixlight moves to dismiss Plaintiff Sure-fire's complaint for improper service, or, in the alternative, to quash service. [Id.]

DISCUSSION

I. Fenixlight's Motion to Dismiss for Improper Service, or in the Alternative, Motion to Quash Fenixlight moves to dismiss Sure-fire's complaint for improper service, or in the alternative, to quash service. [Doc. No. 14.] In response, Sure-fire argues that it properly served Fenixlight pursuant to Federal Rule of Civil Procedure 4(h)(1)(B). [Doc. No. 15 at 11-12.]

A. Legal Standards on Insufficient Service of Process

A federal court lacks personal jurisdiction over a defendant if service of process is insufficient. Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). Under Federal Rule of Civil Procedure 12(b)(5), a defendant may move to dismiss the plaintiff's complaint for "insufficient service of process." "Once service is challenged, plaintiff[] bear[s] the burden of establishing that service was valid under Rule 4." Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004). A signed return of service creates a presumption of valid service which can only be rebutted by strong and convincing evidence. S.E.C. v. Internet Solutions for Business, Inc., 509 F.3d 1161, 1166 (9th Cir. 2007); Tejada v. Sugar Foods Corp., 2010 U.S. Dist. LEXIS 116544, at *9 (C.D. Cal. Oct. 18, 2010) "Upon deciding that process has not been properly served on the defendant, a district court has broad discretion to either dismiss the complaint or quash service of process." Schagene v. Grumman, 2012 U.S. Dist. LEXIS 7693, at *4 (S.D. Cal. Jan. 24, 2012) (citing Umbenhauer v. Woog, 969 F.2d 25, 31 (3d Cir. 1992)). "However, if it appears that effective service can be made and there has been no prejudice to the defendant, a court will quash service rather than dismiss the action." Id.

B. Analysis

Sure-fire argues that it properly served Fenixlight, Ltd. pursuant to Federal Rule of Civil Procedure 4(h)(1)(B). [Doc. No. 15 at 11-12.] Under Rule 4(h)(1)(B), valid service of process on a corporation, partnership, or association requires "delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment by law to receive service of process." FED. R. CIV. P. 4(h)(1). On March 6, ...


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