Consumer Direct Inc. v. McLaughlin

138 F.R.D. 519, 20 U.S.P.Q. 2d (BNA) 1949, 1991 U.S. Dist. LEXIS 12684, 1991 WL 180347
CourtDistrict Court, N.D. Ohio
DecidedAugust 19, 1991
DocketNo. 5:91CV0740
StatusPublished
Cited by2 cases

This text of 138 F.R.D. 519 (Consumer Direct Inc. v. McLaughlin) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Consumer Direct Inc. v. McLaughlin, 138 F.R.D. 519, 20 U.S.P.Q. 2d (BNA) 1949, 1991 U.S. Dist. LEXIS 12684, 1991 WL 180347 (N.D. Ohio 1991).

Opinion

MEMORANDUM OF OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND DENYING DEFENDANT'S MOTIONS TO DISMISS FOR FAILURE TO STATE A CLAIM AND IMPROPER VENUE

KRENZLER, District Judge.

This case is before this Court on defendant Gary G. McLaughlin’s three motions to dismiss pursuant to Fed.R.Civ.P. 12(b). These motions assert that (1) this Court lacks personal jurisdiction over defendant, (2) the Northern District of Ohio is not the proper venue for this action, and (3) the plaintiff fails to state a claim for a declaratory judgment.

The complaint in this case alleges that plaintiff is an Ohio corporation which manufactures and sells an exercise device known as a “Tummysizer.” Defendant, a California resident, holds a United States Letters Patent for an “Abdominal Exerciser.” The complaint asserts that, in a letter to plaintiff dated April 1, 1991, defendant’s counsel took the position that defendant’s patent was valid and was infringed by plaintiff’s product, although plaintiff alleg[521]*521edly advised defendant of specific prior art which invalidated the patent or precluded its applicability to the “Tummysizer.” Plaintiff seeks a declaratory judgment that defendant’s patent is invalid and is not infringed by plaintiff’s product, as well as an injunction barring defendant from initiating or threatening infringement litigation against plaintiff or its employees, agents, dealers, customers, or users.

Defendant responded to the complaint with the three motions to dismiss that are now before this Court. In his motion to dismiss for lack of personal jurisdiction, defendant contends that this Court lacks personal jurisdiction over him because he did not transact any business in the State of Ohio and did not purposely direct any activity toward Ohio. In his motion to dismiss for failure to state a claim,1 defendant asserts that there is no actual controversy between the parties as required by 28 U.S.C. § 2201, because defendant did not create any reasonable apprehension on the part of the plaintiff that he would bring suit for infringement. Finally, in his third motion, defendant contends that Ohio is not the appropriate venue for this action, since he does not reside in Ohio and this action did not arise in Ohio.2

This Court finds that it does not have personal jurisdiction over the defendant. The April 1, 1991 letter from defendant to plaintiff does not constitute “transacting business” within the State of Ohio, and does not create the minimum contacts necessary to give this Court personal jurisdiction over the defendant. Because this Court lacks personal jurisdiction over defendant, the Court will dismiss this case, without prejudice. In light of the dismissal for lack of personal jurisdiction, defendant’s other two motions are moot and are therefore overruled.

I.

In addition to the factual allegations of the complaint noted above, defendant has submitted additional evidence in support of his motions to dismiss which plaintiff also relies upon in its brief in opposition thereto. This evidence shows that plaintiff wrote a letter to defendant in September, 1990, advising defendant that it was planning to test market an exercise device “that may be considered similar to the description in [defendant’s] ... patent.” In the letter, plaintiff contended that defendant’s patent was invalid. Nevertheless, plaintiff offered defendant $1,000 for an assignment of the patent to avoid the expense of filing a request for reexamination.

The parties apparently then entered into negotiations for a license to use the patent. In a letter dated December 6, 1990, plaintiff rejected an offer by defendant, and stated that it was “instructing Mr. Sand [plaintiff’s attorney] to institute a reexamination of [defendant’s] patent.”

Some four months later, on April 1, 1991, defendant’s counsel wrote to plaintiff. The letter states that the parties were to have had a conference telephone call to discuss the prior art which allegedly invalidated the defendant’s patent, but that the telephone call did not take place. The letter then proceeded to state the defendant’s position with respect to his patent rights. The April 1 letter took the position that the defendant’s patent “is valid and infringed by [plaintiff’s] product,” pointing out that because plaintiff was aware of the infringement, plaintiff could be liable for treble [522]*522damages. The letter also denied that plaintiff’s evidence demonstrated that the patent was invalid. Nevertheless, the letter indicated that defendant was interested in negotiating a settlement. Plaintiff instituted this action within a month after the April 1 letter was sent to it.

II.

Defendant argues that this Court does not have personal jurisdiction over him, because he is a resident of the State of California, has not transacted any business in the State of Ohio, and has no contacts with the State of Ohio. He also complains that plaintiff fails to state a claim and that Ohio is not the proper venue for this action. “The question of personal jurisdiction ... goes to the court’s power to exercise control over the parties,” and therefore should be addressed before issues like lack of venue and failure to state a claim. Leroy v. Great Western United Corp., 443 U.S. 173, 180, 99 S.Ct. 2710, 2714, 61 L.Ed.2d 464 (1979). Therefore, the Court will address the issue of personal jurisdiction first.

For this Court to exercise personal jurisdiction over defendant, defendant must be amenable to service of process and must have sufficient contacts with the State of Ohio to satisfy due process. Omni Capital Internat’l, Ltd. v. Rudolph Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct. 404, 409, 98 L.Ed.2d 415 (1987). Accordingly, the Court will examine each of these requirements.

The complaint3 in this case indicates that defendant resides in California, not in Ohio, so the Court must look to the Ohio statutes and rules of court regarding extraterritorial service. Fed.R.Civ.P. 4(e). Plaintiff argues that defendant is amenable to service of process under Ohio Rev.Code Ann. § 2307.382 and Rule 4.3 of the Ohio Rules of Civil Procedure, because defendant transacted business in the State of Ohio when his attorney sent the April 1, 1991 letter to plaintiff. Ohio Revised Code § 2307.382(A)(1) provides, in pertinent part:

(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person’s:
(1) Transacting any business in this state____

Ohio Civil Rule 4.3 similarly authorizes service to be made outside of the state of Ohio on a non-resident defendant who “has caused an event to occur out of which the claim which is the subject of the complaint arose, from the [defendant’s]: (1) Transacting any business in this state; ____”

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Bluebook (online)
138 F.R.D. 519, 20 U.S.P.Q. 2d (BNA) 1949, 1991 U.S. Dist. LEXIS 12684, 1991 WL 180347, Counsel Stack Legal Research, https://law.counselstack.com/opinion/consumer-direct-inc-v-mclaughlin-ohnd-1991.