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Nelson Motivation, Inc. v. Walton Motivation, Inc.

United States District Court, C.D. California

July 29, 2016



          HONORABLE RONALD S.W. LEW Senior U.S. District Judge.

         Currently before the Court is Defendant David Olson’s (“Olson”) Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction [14] (“Motion”). Having reviewed all papers submitted pertaining to this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the Court DENIES the Motion.

         I. BACKGROUND

         Plaintiff Nelson Motivation, Inc. (“NMI”) is a California corporation located in San Diego, California. Compl. ¶ 2, ECF No. 1. NMI is in the business of providing management training and consulting. Id. at ¶ 16.

         Plaintiff Dr. Bob Nelson (“Nelson”) is an individual residing in San Diego.[1] Id. at ¶ 3. Nelson is the president of NMI. Id. at ¶ 16. Nelson is also a leading expert on employee motivation, performance, engagement, recognition, and rewards. Id. at ¶ 12. Nelson assigned to NMI his copyright rights in the works entitled “1501 Ways to Reward Employees” and “1001 Ways to Reward Employees” (collectively, “the Works”), which are the subject of U.S. Copyright Registration Nos. TX 7-547-752, TX 6-196-443, and TX 3-789-192. Id. at ¶ 15.

         Defendant Walton is a Pennsylvania corporation. Id. at ¶ 4. Defendant Olson is an individual residing in Allentown, Pennsylvania and is an officer of Walton. Id. at ¶ 5.

         On or about April 20, 2010, NMI entered into a license agreement (the “License Agreement”) with Walton, granting Walton the right to use Plaintiffs’ intellectual property, including Plaintiffs’ trademarks, copyrights in the Works, and Nelson’s likeness.[2] Id. at ¶ 17.

         In April 2015, the License Agreement terminated. Id. at ¶¶ 20-21. Defendants, however, allegedly continued to use Plaintiffs’ name, likeness, and the Works in advertising their software service, RecognitionPRO. Id. at ¶ 21.

         Plaintiffs demanded that Defendants cease all use of Plaintiffs’ name, likeness, and the Works, but Defendants allegedly failed to comply. Id. at ¶ 23.

         On March 17, 2016, Plaintiffs filed a Complaint [1] against Defendants alleging seven claims: (1) federal copyright infringement; (2) breach of contract; (3) misappropriation of name and likeness under California law; (4) violation of the right of publicity under California law; (5) declaratory relief; (6) California unfair competition; and (7) common law unfair competition. Plaintiffs allege in their Complaint that Olson had full knowledge of the infringement and misappropriation of Nelson’s likeness, and individually directed the infringing acts and omissions. Id. at ¶ 24. Plaintiffs further allege that Olson provided for the forfeiture of Nelson’s shares to gain a personal profit. Id.

         Olson filed the instant Motion [14] on May 20, 2016. Plaintiffs’ Opposition [15] and Olson’s Reply [16] were timely filed, and the Motion was taken under submission on June 24, 2016.


         A. Legal Standard

         1. Federal Rule of Civil Procedure 12(b)(2)

         An action may be dismissed for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). On a Rule 12(b)(2) motion, the plaintiff bears the burden to demonstrate that the court may properly exercise jurisdiction over the defendant. Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006); Barantsevich v. VTB Bank, 954 F.Supp.2d 972, 981 (C.D. Cal. 2013). Absent formal discovery or an evidentiary hearing, the plaintiff need only make a prima facie showing that jurisdiction is proper to survive dismissal. Pebble Beach, 453 F.3d at 1154.

         To satisfy this burden, the plaintiff can rely on the allegations in the complaint to the extent they are not controverted by the moving party. Barantsevich, 954 F.Supp.2d at 982; Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001) (“Where not directly controverted, plaintiff’s version of the facts is taken as true for purposes of a 12(b)(2) motion to dismiss.”). If defendants adduce evidence controverting the allegations, however, the plaintiff must “come forward with facts, by affidavit or otherwise, supporting personal jurisdiction.” Barantsevich, 954 F.Supp.2d at 982 (quoting Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986)). Conflicts between the parties over statements contained in affidavits or declarations must be resolved in plaintiff’s favor. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004); Love v. Associated Newpapers, Ltd., 611 F.3d 601, 608 (9th Cir. 2010). “At the same time, however, the plaintiff must submit admissible evidence in support of its prima facie case.” Am. Inst. of Intradermal Cosmetics, Inc. v. Soc’y of Permanent Cosmetic Prof’ls, No. CV 12-06887 GAF (JCGx), 2013 WL 1685558, at *4 (C.D. Cal. Apr. 16, 2013).

         B. Discussion

         “[P]ersonal jurisdiction over a defendant is proper if it is permitted by a long-arm statute and if the exercise of that jurisdiction does not violate federal due process.” Pebble Beach, 453 F.3d at 1154-55. California authorizes jurisdiction to the full extent permitted by the Constitution. See Cal. Code Civ. Proc. § 410. Therefore, the only question this Court must ask is whether the exercise of jurisdiction over Olson would be consistent with due process. Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003).

         Due process requires that a defendant must have such “minimum contacts” with the forum state that “maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The minimum contacts requirement means that the defendant must have purposefully availed himself of the privilege of conducting activities within the forum, thereby invoking the benefits and protections of the forum’s laws. See Asahi Metal Indus. Co. v. Sup. Ct. of Cal., 480 U.S. 102, 109 (1987).

         There are two recognized bases for exercising jurisdiction over a non-resident defendant: (1) “general jurisdiction, ” which arises where defendant’s activities in the forum are sufficiently “substantial” or “continuous and systematic” to justify the exercise of jurisdiction over him in all matters; and (2) “specific jurisdiction, ” which arises when a defendant’s contacts with the forum give rise to the claim in question. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984); Doe v. Am. Nat’l Red Cross, 112 F.3d 1048, 1050-51 (9th Cir. 1997).

         1. Jurisdiction Over an Employee

         Olson argues that he is merely an officer of Walton, and Walton’s contacts with California cannot be imputed to him to establish personal jurisdiction. Reply 5:19-20. Olson argues that he, as an individual, does not have sufficient contacts with California to establish personal jurisdiction. Id. at 6:7-11.

         The Supreme Court has explained that employees’ “contacts with California are not to be judged according to their employer’s activities there. On the other hand, their status as employees does not somehow insulate them from jurisdiction. Each defendant’s contacts with the forum State must be assessed individually.” Calder v. Jones, 465 U.S. 783, 790 (1984); see also Rush v. Savchuk, 444 U.S. 320, 332 (1980).

         As discussed below, Plaintiffs have alleged sufficient facts to demonstrate that this Court has specific personal jurisdiction over Olson. Olson’s status as an officer ...

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