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Brighton Collectibles, Inc., A Delaware v. Winston Brands

January 30, 2013

BRIGHTON COLLECTIBLES, INC., A DELAWARE CORPORATION,
PLAINTIFF,
v.
WINSTON BRANDS, INC., AN ILLINOIS CORPORATION; COLLECTIONS ETC., INC., AN ILLINOIS CORPORATION; LTD COMMODITIES, [DKT. NOS. 36, 50.] LLC, A DELAWARE CORPORATION; AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hon. Gonzalo P. Curiel United States District Judge

ORDER DENYING DEFENDANT DEFENDANT URBAN TREND (HK)'S MOTION TO DISMISS TO DISMISS AND DENYING URBAN TREND, LLC'S MOTION

Before the Court is Defendant Urban Trend, LLC's motion to dismiss the first amended complaint for lack of subject matter jurisdiction. (Dkt. No. 36.) Plaintiff filed an opposition on November 30, 2012. (Dkt. No. 46.) Defendant Urban Trend, LLC filed a reply on December 14, 2012. (Dkt. No. 51.) Also before the Court is Defendant Urban Trend (HK)'s motion to dismiss first amended complaint for insufficient service. (Dkt. No. 50.) Plaintiff filed an opposition on December 21, 2012. (Dkt. No. 52.) Defendant filed a reply on January 4, 2013. (Dkt. No. 53.) After a review of the briefs and the applicable law, the Court DENIES Urban Trend, LLC's motion to dismiss and DENIES Urban Trend (HK)'s motion to dismiss.

Background

Plaintiff filed this action on September 19, 2011 alleging copyright infringement. (Dkt. No. 1.) Subsequently, on August 8, 2012, Plaintiff filed a first amended complaint for copyright infringement adding Defendants Urban Trend, LLC and Urban Trend (H.K.), Ltd. (Dkt. No. 32.) Plaintiff served Urban Trend (H.K.), located in Hong Kong, by service on Urban Trend, LLC's registered agent Craig Barbarosh. (Dkt. No. 50-2, Mote Decl. ¶ 2.)

Plaintiff Brighton Collectibles, Inc. ("Brighton") manufacturers and sells women's fashion accessories, including handbags. (FAC ¶ 17.) Brighton registered copyrights on several of its designs, including the "Heart Conch" jewelry design registered with the Copyright Office effective December 31, 1997 and the "Charmaine Heart" jewelry design registered with the Copyright Office effective July 13, 2011. (Id. ¶¶ 19, 21.) On September 12, 2012, Urban Trend, LLC filed a motion to dismiss the first amended complaint based on Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. No. 36.) Plaintiff filed an opposition on November 30, 2012. (Dkt. No. 46.) Defendant filed a reply on December 14, 2012. (Dkt. No. 51.)

On December 10, 2012, Defendant Urban Trend (HK) filed a motion to dismiss first amended complaint for insufficient service pursuant to Federal Rule of Civil Procedure12(b)(5). (Dkt. No. 50.) Alternatively, Urban Trend (HK) requests that the Court order Plaintiff to serve through means authorized by the Hague Convention. Plaintiff filed an opposition on December 21, 2012. (Dkt. No. 52.) Urban Trend (UK) filed a reply on January 4, 2013. (Dkt. No. 53.) Discussion I. Urban Trend, LLC's Motion to Dismiss First Amended Complaint for Lack of Subject Matter Jurisdiction and for Failure to State a Claim

A. Federal Rule of Civil Procedure 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) allows a dismissal for "lack of subject matter jurisdiction." Fed. R. Civ. P. 12(b)(1). A plaintiff has the burden to establish that subject matter jurisdiction is proper. Kokkonen v. Guardian Life Ins., Co., 511 U.S. 375, 377 (1994).

Under Rule 12(b)(1), a jurisdictional attack may either be "facial" or "factual." White v. Lee, 227 F.3d 1213, 1242 (9th Cir. 2000). When a defendant challenges jurisdiction "facially," all material allegations in the complaint are assumed true, and the question for the court is whether the lack of federal jurisdiction appears from the face of the pleading itself. Thornhill Publ'g Co. v. Gen.l Tel. Elecs., 594 F.2d 730, 733 (9th Cir. 1979); Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977). In a factual attack, the "defendant disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a factual attack, the "court may look beyond the complaint to matters of public record without having to convert the motion into one for summary judgment." White, 227 F.3d at 1242. The court "need not presume the truthfulness of the plaintiff's allegations." Id. Once the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Safe Air for Everyone, 373 F.3d at 1039 (quotation omitted).

A district court is not "permitted to resolve disputed factual issues bearing upon subject matter jurisdiction in the context of a Rule 12(b)(1) motion "when 'the jurisdictional issue and the substantive issues are so intermeshed that the question of jurisdiction is dependent on decision of the merits.'" Kingman Reef Atoll Invs., L.L.C. v. United States, 541 F.3d 1189, 1197 (9th Cir. 2008) (citation omitted). In one case, plaintiff filed a patent infringement claim against defendant. Quantum Corp. v. Sony Corp., 16 U.S.P.Q.2d 1447, 1450 (N.D. Cal. 1990). The defendants moved to dismiss for lack of subject matter jurisdiction over the subject matter and argued there was no infringing conduct. Id. The Court held that since the issue of jurisdiction and the merits of the case were intertwined, the resolution of factual issues as to the infringing conduct was not appropriate on a motion for dismiss. Id. "[A] judge may consider evidence presented with respect to a jurisdictional issue and rule on that issue, resolving factual disputes if necessary, only if the jurisdictional issue is separable from the merits of the case. Id. (citing Berardinelli v. Castle & Cooke, Inc., 587 F.2d 37 (9th Cir. 1978)).

To establish a prima facie case of copyright infringement, plaintiff must show "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Range Rd. Music, Inc. v. E. Coast Foods, Inc., 668 F.3d 1148, 1153 (9th Cir. 2012).

Here, Defendant Urban Trend, LLC filed a motion to dismiss the first amended complaint for lack of subject matter jurisdiction arguing that it has never made, sold or distributed any of the products accused of infringement. Stated another way, Defendant contends that it has not engaged in "copying of constituent elements of the work that are original." See Range Rd. Music, Inc., 668 F.3d at 1153. In opposition, Plaintiff argues that the denial of liability is intertwined with the merits of the case and therefore, the motion should be denied.

The Court concludes that the jurisdictional issue and the merits of the case are intertwined in this motion. Defendant's affidavit*fn1 stating that it has never made, sold or distributed any of the products at issue goes to the merits of determining whether it copied Plaintiff's work. Therefore, resolution of factual issues to determine subject matter jurisdiction at this stage of the proceedings is not proper. The Court also notes that District Judge Bencivengo in the order granting Plaintiff's motion for leave to file a first amended complaint to add Urban Trend, LLC stated that it is "not persuaded that plaintiff's motion was brought in bad faith, or that consideration of evidence to defeat plaintiff's new ...


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