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Water Pik, Inc. v. H2ofloss

United States District Court, D. Colorado

April 9, 2018

WATER PIK, INC., a Delaware corporation, Plaintiff,
v.
H2OFLOSS, f/k/a Shenzhen Baofengtong Electrical Manufacturing Co., Ltd., a Singapore entity, SHENZHEN BAOFENGTONG ELECTRICAL MANUFACTURING CO., LTD., a/k/a Shenzhen Baofengtong Electrical Appliances Manufacturing Co., Ltd., a Chinese company, H2OFLOSS LIMITED, a British Virgin Islands company, and HOMECARE HOUSEHOLD SUPPLIES CO., LTD., a British Virgin Islands company, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR LIMITED DISCOVERY AND DENYING WITHOUT PREJUDICE DEFENDANT'S MOTION TO DISMISS

          CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendant H2OFloss's Motion to Dismiss for Want of Personal Jurisdiction (Doc. # 43) and Plaintiff Water Pik, Inc.'s Motion for Limited Jurisdictional Discovery (Doc. # 54). For the following reasons, the Court grants in part and denies in part Plaintiff's request for limited discovery, and the Court denies without prejudice Defendant's Motion to Dismiss.

         I. BACKGROUND

         Plaintiff brings this patent infringement action against four foreign entities: H2OFloss; Shenzhen Baofengtong Electrical Manufacturing Co., Ltd.; H2OFloss Limited; and Homecare Household Supplies Company. (collectively Defendants). Plaintiff specifically alleges that Defendants are infringing on Plaintiff's patents by “import[ing], offer[ing] for sale, and [selling] . . . the H2OFloss HF-7 model oral irrigator series (HF-7), H2OFloss HF-8 model oral irrigator series (HF-8), and H2OFloss orthodontic tips sole and used with at least the HF-8 (HF-8 Tips) (collectively, the Accused Products). (Doc. # 22 at ¶ 2.)

         On January 8, 2018, H2OFloss filed a Motion to Dismiss for Want of Personal Jurisdiction, arguing that Plaintiff has insufficiently pled or demonstrated that H2OFloss has minimum contacts with Colorado and/or that an agency theory of jurisdiction applies. (Doc. # 43.) H2OFloss adds that it is distinct and separate from the trademark h2ofloss and the other Defendant entities, who are “the real parties in interest (i.e. the manufacturer and the seller).” (Id. at 6.) Plaintiff responds that it has sufficiently pled that H2OFloss has minimum contacts with Colorado and that, moreover, the contacts of the other Defendants can be imputed to H2OFloss through an agency theory of jurisdiction. (Doc. # 50.) Plaintiff also requests limited jurisdictional discovery to supplement the factual record in the event that “the Court is unable to resolve the factual disputes in [Plaintiff's] favor.” (Doc. # 54 at 4.)

         II. LAW

         A. PERSONAL JURISDICTION

         To exercise jurisdiction over H2OFloss, a nonresident defendant, the Court must ensure that jurisdiction complies with Colorado's long-arm statute and constitutional due process. Grynberg v. Ivanhoe Energy, Inc., No. 08-cv-02528, 666 F.Supp.2d 1218, 2009 WL 3217394, *6 (D. Colo. September 30, 2009). In Colorado, this two-pronged inquiry collapses into one, because “‘Colorado's long arm statute is coextensive with constitutional limitations imposed by the due process clause. Therefore, if jurisdiction is consistent with the due process clause, Colorado's long arm statute authorizes jurisdiction over a nonresident defendant.'” Id. at *6 (quoting Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004)).

         To ensure that the Court's jurisdiction comports with due process, the Court first examines “whether the non-resident defendant has ‘minimum contacts' with the forum state such that he should reasonably anticipate being [brought] into court there.” Melea, Ltd. v. Jawer SA, 511 F.3d 1060, 1065 (10th Cir. 2007) (quoting TH Agriculture & Nutrition, LLC v. Ace European Group Ltd., 488 F.3d 1282, 1287 (10th Cir. 2007)).

         This “minimum contacts” inquiry naturally involves examining whether the nonresident defendant has “purposefully directed” its activities at Colorado. See TH Agriculture & Nutrition, LLC, 488 F.3d at 1287, 1291. Under certain circumstances, “a nonresident defendant may be subject to personal jurisdiction in Colorado based on the imputed contacts of the [nonresident] defendant's agent.” Goettman v. N. Fork Valley Rest., 176 P.3d 60, 67 (Colo. 2007). In other words, where applicable, a court can impute a subsidiary corporation's contacts to the parent corporation. Vacation Travel Int'l, Inc. v. Sunchase Beachfront Condo. Owners Ass'n, Inc., No. CIVA 06CV02195 LTBCB, 2007 WL 757580, at *5 (D. Colo. Mar. 8, 2007) (stating that “[w]hile under some circumstances a subsidiary corporation's contacts may be imputed to a parent for the purposes of jurisdiction, the reverse is not true.); see also Kim v. Czerny, No. 16-CV-1362 MCA/LF, 2017 WL 3084466, at *8 (D.N.M. July 17, 2017) (same); Weisler v. Cmty. Health Sys., Inc., No. CIV. 12-0079 MV/CG, 2012 WL 4498919, at *11 (D.N.M. Sept. 27, 2012) (same).

         B. JURISDICTIONAL DISCOVERY

         “When a defendant moves to dismiss for lack of jurisdiction, either party should be allowed discovery on the factual issues raised by that motion.” Budde v. Ling-Temco- Vought, Inc., 511 F.2d 1033, 1035 (10th Cir. 1975). The Court has broad discretion to shape jurisdictional discovery. Grynberg v. Ivanhoe Energy, Inc., 490 Fed.Appx. 86, 103 (10th Cir. 2012); Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino & Resort, 629 F.3d 1173, 1188-89 (10th Cir. 2010) (“As with the court's handling of discovery in other stages of litigation, in the context of a [motion to dismiss for lack of jurisdiction], ‘[w]e give the district court much room to shape discovery.'”) (second alteration in original).

         “[A] refusal to grant discovery constitutes an abuse of discretion if the denial results in prejudice to a litigant. Prejudice is present where ‘pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.'” Sizova v. Nat'l Inst. of Standards & Tech., 282 F.3d 1320, 1326 (10th Cir.2002) (ellipsis omitted). “[T]he burden of demonstrating a legal entitlement to jurisdictional discovery-and the related prejudice flowing from the discovery's denial- [is] on the party seeking the discovery. . . .” Breakthrough Mgmt. Grp., Inc., 629 F.3d at 1189 n. 11; Grynberg, 490 Fed.Appx. at 103. “To obtain jurisdictional discovery, a plaintiff must present a sufficient factual predicate for the establishment of personal jurisdiction.” Gordon Howard Assocs., Inc. v. Lunareye, Inc., No. 13-CV-01829-CMA-MJW, 2013 WL 5637678, at *4 (D. Colo. Oct. 15, 2013) (internal quotation omitted).

         III. ...


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