Modulus Financial Engineering Incorporated v. Modulus Data USA Incorporated

District Court, D. Arizona·Decided May 15, 2020·No. 2:19-cv-04685·Unknown

Opinion

WO

Modulus Financial Engineering Incorporated, No. CV-19-04685-PHX-SMB

Plaintiff, ORDER

v.

Modulus Data USA Incorporated, et al.,

Defendants.

Pending before the Court is Defendants’ Motion to Dismiss Plaintiff’s Complaint for Lack of Personal Jurisdiction, (Doc. 16, “Mot.”). Plaintiff Modulus Financial Engineering Inc. (“Modulus”) responded, (Doc. 21, “Resp.”), and Defendants Modulus Data USA, Inc. and Modulus Data, Inc. replied, (Doc. 23, “Reply”). The Court has considered the pleadings, exhibits, and applicable law and will grant Defendants’ Motion.1 I. BACKGROUND Modulus is an Arizona software design and development services corporation that provides its services across the world.2 (Doc. 1, “Compl.” ¶¶ 2, 8.) Its complaint alleges various federal, state, and common law claims of trademark infringement, unfair competition, and cancellation of trademarks against Defendants Modulus Data USA and

1 No party requested oral argument and the Court finds the Motion suitable for resolution without hearing. LRCiv 7.2(f). 2 While not directly relevant for jurisdictional purposes, Modulus owns the trademark “Modulus” in connection with “[s]oftware design and development” and “[c]omputer software development tools; [c]omputer software for statistical analysis, database engines, finance, stock trading, stock market data and artificial intelligence.” (Compl. ¶ 9.) The June 16, 2015 registration certificate shows Modulus has continuously used the mark since March 22, 2002. (Id. ¶¶ 8, 10.) Modulus Data. (See generally id. ¶¶ 1, 76-118.) Modulus Data USA is a New York corporation with its principal place of business in Massachusetts and Modulus Data is a Canadian entity. (Id. ¶¶ 3-4; Doc. 16-1 at 2, 5.) Defendants, formerly operating as Log10 Solutions, provide various tools and services concerning software and database integration and allegedly began infringing on Plaintiff’s trademarks sometime in September 2015. (Compl. ¶¶ 19-25.) The complaint alleges virtually no conduct by either Defendant involving Arizona.3 Neither Defendant has ever: (1) held an office or place of business in Arizona; (2) specifically targeted or advertised to Arizona residents; (3) employed an authorized representative in Arizona; (4) had Arizona clients; (5) earned revenue from Arizona; or (6) sold goods or services in Arizona using the allegedly infringing trademarks. (Doc. 16-1 at 2-3, 5-6.) With these allegations in mind, Defendants move to dismiss for lack of personal jurisdiction. Before trial, a defendant can move to dismiss the complaint against him for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Data Disc, Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977); Fed. R. Civ. P. 12(b)(2). Plaintiff bears the burden of establishing personal jurisdiction. Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1141 (9th Cir. 2017); see also Ziegler v. Indian River Cty., 64 F.3d 470, 473 (9th Cir. 1995). When the motion is based on written materials rather than an evidentiary hearing, as is the case here, “plaintiff need only make a prima facie showing of jurisdictional facts.” Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990) (citing Data Disk, 557 F.2d at 1285). In determining whether plaintiff has met this burden, the complaint’s uncontroverted allegations must be taken as true, and “conflicts between the facts contained in the parties’ affidavits must be resolved in [plaintiff’s] favor for purposes 3 The closest paragraph alleges that “a substantial part of the events or omissions giving rise to the claim occurred in this district and/or a substantial part of property that is subject of the action is situated in this district.” (Compl. ¶ 7.) Nothing else comes close. (See id. ¶¶ 18-118.) In fact, it appears that the impetus for this lawsuit stems from a Chicago conference. (See id. ¶ 72-75.) of deciding whether a prima facie case for personal jurisdiction exists.” AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (internal quotation marks and citation omitted). “When no federal statute governs personal jurisdiction, the district court applies the law of the forum state.” Freestream Aircraft (Bermuda) Ltd. v. Aero Law Grp., 905 F.3d 597, 602 (9th Cir. 2018) (citation omitted). Arizona law exercises personal jurisdiction to the “maximum extent permitted by the Arizona Constitution and the United States Constitution.” Ariz. R. Civ. P. 4.2(a); see also A. Uberti and C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995) (analyzing personal jurisdiction in Arizona under federal law). Therefore, analyzing personal jurisdiction under Arizona law and federal due process is the same. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800–01 (9th Cir. 2004). In the personal jurisdiction context, “[d]ue process requires that a defendant be haled into court in a forum State based on his own affiliation with the State, not based on the ‘random, fortuitous, or attenuated’ contacts he makes by interacting with other persons affiliated with the State.” Walden v. Fiore, 571 U.S. 277, 286 (2014) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). “Although a nonresident's physical presence within the territorial jurisdiction of the court is not required, the nonresident generally must have certain minimum contacts . . . such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Walden, 571 U.S. at 283 (citation and internal quotations omitted). “Depending on the strength of those contacts, there are two forms that personal jurisdiction may take: general and specific.” Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (citation omitted); see also Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir. 1997). General jurisdiction exists when the defendant has “continuous and systematic” contacts with the forum state, whereas specific jurisdiction exists when the controversy arises from or is related to the defendant’s contacts with the forum state. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984). Modulus only asserts the Court has specific jurisdiction over Defendants. “The inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant focuses on the relationship among the defendant, the forum, and the litigation.” Walden, 571 U.S. at 283–84 (internal quotation marks and citation omitted). Courts “employ a three-part test to assess whether a defendant has sufficient contacts with the forum state to be subject to specific personal jurisdiction: (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair

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Modulus Financial Engineering Incorporated v. Modulus Data USA Incorporated, (D. Ariz. 2020).

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