1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 ThermoLife International LLC, No. CV-18-04248-PHX-JJT
10 Plaintiff, ORDER
11 v.
12 NetNutri.com LLC,
13 Defendant. 14 15 At issue is Defendant NetNutri.com, LLC’s Motion to Dismiss (Doc. 19, Mot.), to 16 which Plaintiff ThermoLife International, LLC filed a Response (Doc. 20, Resp.), and 17 Defendant filed a Reply (Doc. 23, Reply). The Court has reviewed the parties’ briefs and 18 finds these matters appropriate for decision without oral argument. See LRCiv 7.2(f). 19 Plaintiff is an Arizona company that licenses and sells its patented creatine nitrate 20 for use in dietary supplements. (Doc. 1, Compl. ¶¶ 8, 20.) Defendant is a New Jersey based 21 online retailer of dietary supplements that sells over 7,000 different products on its website. 22 (Compl. ¶ 27.) In its Complaint, Plaintiff raises claims of false designation of origin and 23 false statements under the Lanham Act, 15 U.S.C. 1125 § 43(a); common law unfair 24 competition; and civil conspiracy. (Compl. ¶¶ 219-41.) Defendant has now moved to 25 dismiss for lack of personal jurisdiction. (Mot. at 4.) 26 I. LEGAL STANDARD 27 For a federal court to adjudicate a matter, it must have jurisdiction over the parties. 28 Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701 (1982). The party 1 bringing the action has the burden of establishing that personal jurisdiction exists. 2 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citing McNutt v. 3 Gen. Motors Acceptance Corp., 298 U.S. 178, 182-83 (1936)); Data Disc, Inc. v. Sys. Tech. 4 Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). When a defendant moves, prior to trial, 5 to dismiss a complaint for lack of personal jurisdiction, the plaintiff must “‘come forward 6 with facts, by affidavit or otherwise, supporting personal jurisdiction.’” Scott v. Breeland, 7 792 F.2d 925, 927 (9th Cir. 1986) (quoting Amba Mktg. Sys., Inc. v. Jobar Int’l, Inc., 551 8 F.2d 784, 787 (9th Cir. 1977)). 9 Because there is no statutory method for resolving the question of personal 10 jurisdiction, “the mode of determination is left to the trial court.” Data Disc, 557 F.2d at 11 1285 (citing Gibbs v. Buck, 307 U.S. 66, 71-72 (1939)). Where, as here, a court resolves 12 the question of personal jurisdiction upon motions and supporting documents, the plaintiff 13 “must make only a prima facie showing of jurisdictional facts through the submitted 14 materials in order to avoid a defendant’s motion to dismiss.” Id. In determining whether 15 the plaintiff has met that burden, the “uncontroverted allegations in [the plaintiff’s] 16 complaint must be taken as true, and conflicts between the facts contained in the parties’ 17 affidavits must be resolved in [the plaintiff’s] favor.” Rio Props., Inc., 284 F.3d at 1019 18 (citation omitted). 19 To establish personal jurisdiction over a nonresident defendant, a plaintiff must 20 show that the forum state’s long-arm statute confers jurisdiction over the defendant and 21 that the exercise of jurisdiction comports with constitutional principles of due process. Id.; 22 Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 269 (9th Cir. 1995). Arizona’s 23 long-arm statute allows the exercise of personal jurisdiction to the same extent as the 24 United States Constitution. See Ariz. R. Civ. Proc. 4.2(a); Cybersell v. Cybersell, 130 F.3d 25 414, 416 (9th Cir. 1997); A. Uberti & C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995) 26 (stating that under Rule 4.2(a), “Arizona will exert personal jurisdiction over a nonresident 27 litigant to the maximum extent allowed by the federal constitution”). Thus, a court in 28 1 Arizona may exercise personal jurisdiction over a nonresident defendant so long as doing 2 so accords with constitutional principles of due process. Cybersell, 130 F.3d at 416. 3 Due process requires that a nonresident defendant have sufficient minimum contacts 4 with the forum state so that “maintenance of the suit does not offend ‘traditional notions of 5 fair play and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) 6 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); see also Data Disc, 557 F.2d at 7 1287. Courts recognize two bases for personal jurisdiction within the confines of due 8 process: “(1) ‘general jurisdiction’ which arises when a defendant’s contacts with the 9 forum state are so pervasive as to justify the exercise of jurisdiction over the defendant in 10 all matters; and (2) ‘specific jurisdiction’ which arises out of the defendant’s contacts with 11 the forum state giving rise to the subject litigation.” Birder v. Jockey’s Guild, Inc., 444 F. 12 Supp. 2d 1005, 1008 (C.D. Cal. 2006). 13 II. ANALYSIS 14 A. General Jurisdiction 15 Defendant first argues that it is not subject to general personal jurisdiction in 16 Arizona. (Mot. at 4–6.) Defendant contends that Plaintiff has not alleged “any . . . 17 connections between [Defendant] and Arizona” to meet general jurisdiction standards and 18 that it “has no such connections to the State.” (Mot. at 5.) It asserts that the only potential 19 connections are its “interactive website” and sales within the state, which accounted for 20 “less than 2 percent of [its] total revenue” between 2014 and 2018. (Mot. at 5–6.) 21 Conversely, Plaintiff argues that because Defendant is “one of the most popular 22 online retailers of Dietary Supplements” and has “developed a devoted customer base,” 23 general jurisdiction is appropriate. (Resp. at 7–8.) It argues that Defendant has “significant 24 sales in Arizona” and that Defendant’s argument regarding Arizona’s two percent sales share 25 lacks merit because “if you divide total sales by 50 states, it results in 2%.” (Resp. at 8.) 26 General jurisdiction exists where a defendant’s activities within a state are “so 27 substantial” or “continuous and systematic” that they essentially “render the corporation at 28 home in that State.” Daimler AG v. Bauman, 571 U.S. 117, 138, 159 n.19 (2014). However, 1 the inquiry is not based “solely on the magnitude of the defendant’s in-state contacts.” Id. 2 at 159 n.20. Instead, general jurisdiction “calls for an appraisal of a corporation’s activities 3 in their entirety.” Id. Ultimately, “a corporation that operates in many places can scarcely 4 be deemed at home in all of them.” Id. 5 Defendant’s activities in Arizona are insufficient to be considered at home in the 6 state. The fact that two percent of Defendant’s revenue is from online sales to customers 7 who happen to be in Arizona is not sufficient to demonstrate substantial, continuous, 8 systematic contacts with Arizona. Accordingly, the Court does not have general personal 9 jurisdiction over Defendant. See In re Bard IVC Filters Prods. Liab. Litig., No.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 ThermoLife International LLC, No. CV-18-04248-PHX-JJT
10 Plaintiff, ORDER
11 v.
12 NetNutri.com LLC,
13 Defendant. 14 15 At issue is Defendant NetNutri.com, LLC’s Motion to Dismiss (Doc. 19, Mot.), to 16 which Plaintiff ThermoLife International, LLC filed a Response (Doc. 20, Resp.), and 17 Defendant filed a Reply (Doc. 23, Reply). The Court has reviewed the parties’ briefs and 18 finds these matters appropriate for decision without oral argument. See LRCiv 7.2(f). 19 Plaintiff is an Arizona company that licenses and sells its patented creatine nitrate 20 for use in dietary supplements. (Doc. 1, Compl. ¶¶ 8, 20.) Defendant is a New Jersey based 21 online retailer of dietary supplements that sells over 7,000 different products on its website. 22 (Compl. ¶ 27.) In its Complaint, Plaintiff raises claims of false designation of origin and 23 false statements under the Lanham Act, 15 U.S.C. 1125 § 43(a); common law unfair 24 competition; and civil conspiracy. (Compl. ¶¶ 219-41.) Defendant has now moved to 25 dismiss for lack of personal jurisdiction. (Mot. at 4.) 26 I. LEGAL STANDARD 27 For a federal court to adjudicate a matter, it must have jurisdiction over the parties. 28 Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701 (1982). The party 1 bringing the action has the burden of establishing that personal jurisdiction exists. 2 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citing McNutt v. 3 Gen. Motors Acceptance Corp., 298 U.S. 178, 182-83 (1936)); Data Disc, Inc. v. Sys. Tech. 4 Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). When a defendant moves, prior to trial, 5 to dismiss a complaint for lack of personal jurisdiction, the plaintiff must “‘come forward 6 with facts, by affidavit or otherwise, supporting personal jurisdiction.’” Scott v. Breeland, 7 792 F.2d 925, 927 (9th Cir. 1986) (quoting Amba Mktg. Sys., Inc. v. Jobar Int’l, Inc., 551 8 F.2d 784, 787 (9th Cir. 1977)). 9 Because there is no statutory method for resolving the question of personal 10 jurisdiction, “the mode of determination is left to the trial court.” Data Disc, 557 F.2d at 11 1285 (citing Gibbs v. Buck, 307 U.S. 66, 71-72 (1939)). Where, as here, a court resolves 12 the question of personal jurisdiction upon motions and supporting documents, the plaintiff 13 “must make only a prima facie showing of jurisdictional facts through the submitted 14 materials in order to avoid a defendant’s motion to dismiss.” Id. In determining whether 15 the plaintiff has met that burden, the “uncontroverted allegations in [the plaintiff’s] 16 complaint must be taken as true, and conflicts between the facts contained in the parties’ 17 affidavits must be resolved in [the plaintiff’s] favor.” Rio Props., Inc., 284 F.3d at 1019 18 (citation omitted). 19 To establish personal jurisdiction over a nonresident defendant, a plaintiff must 20 show that the forum state’s long-arm statute confers jurisdiction over the defendant and 21 that the exercise of jurisdiction comports with constitutional principles of due process. Id.; 22 Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 269 (9th Cir. 1995). Arizona’s 23 long-arm statute allows the exercise of personal jurisdiction to the same extent as the 24 United States Constitution. See Ariz. R. Civ. Proc. 4.2(a); Cybersell v. Cybersell, 130 F.3d 25 414, 416 (9th Cir. 1997); A. Uberti & C. v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995) 26 (stating that under Rule 4.2(a), “Arizona will exert personal jurisdiction over a nonresident 27 litigant to the maximum extent allowed by the federal constitution”). Thus, a court in 28 1 Arizona may exercise personal jurisdiction over a nonresident defendant so long as doing 2 so accords with constitutional principles of due process. Cybersell, 130 F.3d at 416. 3 Due process requires that a nonresident defendant have sufficient minimum contacts 4 with the forum state so that “maintenance of the suit does not offend ‘traditional notions of 5 fair play and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) 6 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)); see also Data Disc, 557 F.2d at 7 1287. Courts recognize two bases for personal jurisdiction within the confines of due 8 process: “(1) ‘general jurisdiction’ which arises when a defendant’s contacts with the 9 forum state are so pervasive as to justify the exercise of jurisdiction over the defendant in 10 all matters; and (2) ‘specific jurisdiction’ which arises out of the defendant’s contacts with 11 the forum state giving rise to the subject litigation.” Birder v. Jockey’s Guild, Inc., 444 F. 12 Supp. 2d 1005, 1008 (C.D. Cal. 2006). 13 II. ANALYSIS 14 A. General Jurisdiction 15 Defendant first argues that it is not subject to general personal jurisdiction in 16 Arizona. (Mot. at 4–6.) Defendant contends that Plaintiff has not alleged “any . . . 17 connections between [Defendant] and Arizona” to meet general jurisdiction standards and 18 that it “has no such connections to the State.” (Mot. at 5.) It asserts that the only potential 19 connections are its “interactive website” and sales within the state, which accounted for 20 “less than 2 percent of [its] total revenue” between 2014 and 2018. (Mot. at 5–6.) 21 Conversely, Plaintiff argues that because Defendant is “one of the most popular 22 online retailers of Dietary Supplements” and has “developed a devoted customer base,” 23 general jurisdiction is appropriate. (Resp. at 7–8.) It argues that Defendant has “significant 24 sales in Arizona” and that Defendant’s argument regarding Arizona’s two percent sales share 25 lacks merit because “if you divide total sales by 50 states, it results in 2%.” (Resp. at 8.) 26 General jurisdiction exists where a defendant’s activities within a state are “so 27 substantial” or “continuous and systematic” that they essentially “render the corporation at 28 home in that State.” Daimler AG v. Bauman, 571 U.S. 117, 138, 159 n.19 (2014). However, 1 the inquiry is not based “solely on the magnitude of the defendant’s in-state contacts.” Id. 2 at 159 n.20. Instead, general jurisdiction “calls for an appraisal of a corporation’s activities 3 in their entirety.” Id. Ultimately, “a corporation that operates in many places can scarcely 4 be deemed at home in all of them.” Id. 5 Defendant’s activities in Arizona are insufficient to be considered at home in the 6 state. The fact that two percent of Defendant’s revenue is from online sales to customers 7 who happen to be in Arizona is not sufficient to demonstrate substantial, continuous, 8 systematic contacts with Arizona. Accordingly, the Court does not have general personal 9 jurisdiction over Defendant. See In re Bard IVC Filters Prods. Liab. Litig., No. CV-16- 10 02442-PHX-DGC, 2016 WL 6393595 at *3–4 (D. Ariz. Oct. 28, 2016) (finding that the 11 plaintiffs’ argument “plainly is insufficient for general jurisdiction” where the plaintiffs 12 claim general jurisdiction over the defendants “because [the defendants] purposefully 13 directed their marketing activities at [the forum state] and derived substantial revenues 14 from the State”). 15 B. Specific Jurisdiction 16 Defendant next asserts that it is not subject to specific jurisdiction in Arizona. (Mot. 17 at 6.) It argues that “Plaintiff cannot meet the [express aiming] or [foreseeable harm] 18 elements” of the specific jurisdiction test and that Plaintiff did not “demonstrate that its 19 claims arise out of or relate to [Defendant’s] forum-related activities.” (Mot. at 8.) In 20 response, Plaintiff contends that “only the ‘express aiming’ prong is at issue” and that 21 Defendant has “expressly aimed its conduct at Arizona” by “run[ning] its website as a 22 virtual store that sells its . . . products to customers in Arizona.” (Resp. at 4–6.) Plaintiff 23 also states that its claims do, in fact, arise from Defendant’s forum-related activities 24 because Plaintiff is located in Arizona and has felt the effects of Defendant’s conduct in 25 Arizona. (Resp. at 7.) 26 Whether a court may exercise specific jurisdiction in a given case turns on the extent 27 of the defendant’s contact with the forum and the degree to which the plaintiff’s suit is 28 related to the defendant’s contacts. Yahoo! Inc. v. La Ligue Contre Le Racisme et 1 L’Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006). The Ninth Circuit uses the following 2 approach to determine whether a court may exercise specific jurisdiction over a nonresident 3 defendant: (1) the nonresident defendant must do some act in or consummate some 4 transaction with the forum, or perform some act by which it purposefully avails itself of 5 the privilege of conducting activities in the forum, thereby invoking the benefits and 6 protections of its laws; (2) the claim must be one which arises out of or results from the 7 defendant’s forum-related activities; and (3) the exercise of jurisdiction must be 8 reasonable. Data Disc, 557 F.2d at 1287. 9 The plaintiff bears the burden of establishing the first two requirements of the test. 10 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). If the 11 plaintiff establishes the first two requirements, the burden shifts to the defendant to 12 establish that the third requirement is not met. Mavrix Photo, Inc. v. Brand Techs., Inc., 13 647 F.3d 1218, 1228 (9th Cir. 2011) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 14 476-78 (1985)). All three requirements must be met for the exercise of jurisdiction to 15 comport with constitutional principles of due process. Omeluk, 52 F.3d at 270. 16 To meet the first element—that the defendant purposefully directed activities at the 17 forum state—the plaintiff must show the defendant “either (1) ‘purposefully availed’ 18 himself of the privilege of conducting activities in the forum, or (2) ‘purposefully directed’ 19 his activities towards the forum.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th 20 Cir. 2006) (quoting Schwarzenegger, 374 F.3d at 802). The purposeful direction analysis 21 is most commonly applied in cases alleging tortious conduct. Mavrix Photo, Inc., 647 F.3d 22 at 1228. Because a Lanham Act claim is a tort-like cause of action, purposeful direction is 23 the proper analytical framework. Id. 24 To determine whether the defendant’s actions constitute purposeful direction, courts 25 apply the “effects” test that was developed in Calder v. Jones, 465 U.S. 783, 789-90 (1984). 26 The effects test requires that “the defendant allegedly must have (1) committed an 27 intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant 28 knows is likely to be suffered in the forum state.” Yahoo!, 433 F.3d at 1206. 1 The Ninth Circuit has held that “maintenance of a passive website alone cannot 2 satisfy the express aiming prong.” Mavrix Photo, 647 F.3d at 1229. However, “operating 3 [] a passive website in conjunction with ‘something more’—conduct directly targeting the 4 forum—is sufficient.” Id. In response to Defendant’s motion to dismiss, Plaintiff has the 5 burden to demonstrate that personal jurisdiction exists by proffering facts, by affidavit or 6 otherwise, to the Court. Scott, 792 F.2d at 927. Plaintiff has not provided any new facts in 7 its Response but instead relies on its allegation in the Complaint that Defendant sells and 8 ships products to Arizona through an interactive website. (Resp. at 4 (citing Compl. ¶ 9).) 9 In its brief, Plaintiff analyzes Mavrix Photo but does not identify a single fact or allegation 10 that would constitute “something more” than Defendant’s online sales to customers who 11 happen to be in Arizona. Although Defendant has sold some of its products to residents of 12 Arizona, “the ‘minimum contacts analysis looks to the entity’s contacts with the forum 13 State itself, not with the entity’s contacts with persons who reside there.” In re Boon Global 14 Limited, 923 F.3d 643, 652–53 (9th Cir. 2019). 15 To the extent Plaintiff argues Defendant has sufficient contacts with Arizona 16 because Plaintiff is located in Arizona and was allegedly injured by Defendant’s alleged 17 false statements, that contact is insufficient to confer personal jurisdiction over Defendant. 18 Walden v. Fiore, 134 S. Ct. 1115, 1125 (2014) (stating a plaintiff must show more than a 19 defendant’s ties to the plaintiff and injury to the plaintiff to satisfy the Calder effects test). 20 Plaintiff has produced no fact and the Complaint contains no factual allegation that 21 Defendant purposefully directed its activities at Arizona. 22 Thus, Plaintiff has failed to meet its burden to demonstrate that the Court has 23 personal jurisdiction over Defendant, and the Court must dismiss this action. See In re W. 24 States Wholesale Natural Gas Antitrust Litig., 715 F.3d 716, 742 (9th Cir. 2013) (“If any 25 of the three requirements is not satisfied, jurisdiction in the forum would deprive the 26 defendant of due process of law”). 27 28 1 Because Plaintiff has failed to demonstrate that the Court has personal jurisdiction over Defendant, the Court need not address the other bases for dismissal in Defendant’s Motion. 4) Tl. CONCLUSION 5 Plaintiff ThermoLife International, LLC has not met its burden to show that 6|| Defendant NetNutri.com, LLC either has substantial, continuous, systematic activities in Arizona or that it purposefully directed its activities at Arizona under the Calder effects 8 || test, and the Court must therefore dismiss this action for lack of personal jurisdiction. 9 IT IS THEREFORE ORDERED granting Defendant’s Motion to Dismiss for |} Lack of Personal Jurisdiction (Doc. 19). 11 IT IS FURTHER ORDERED directing the Clerk of the Court to enter judgment || accordingly and close this case. 13 Dated this 17th day of July, 2019. ON iY. 15 holre— United StatesDistrict Judge 16 17 18 19 20 21 22 23 24 25 26 27 28
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