United States District Court, D. Colorado
ORDER DENYING DEFENDANT'S MOTION TO DISMISS
PURSUANT TO FEDERAL RULES OF CIVIL PROCEDURE 12(B)(2) AND
12(B)(3) OR, ALTERNATIVELY, TO TRANSFER VENUE
CHRISTINE M. ARGUELLO JUDGE
This
matter is before the Court on Defendant Online King,
LLC's Motion to Dismiss Pursuant to Federal Rules of
Civil Procedure 12(b)(2) and 12(b)(3) or, alternatively, to
Transfer Venue. (Doc. # 18.) The Motion is fully briefed.
(Doc. ## 19, 27.) For the following reasons, Defendant's
Motion is denied.
I.
BACKGROUND
Plaintiff
is a Colorado limited liability company with its principle
place of business in Boulder, Colorado. (Doc. # 1 at ¶
1.) Plaintiff “develops, manufactures, markets, and
sells grips/stands, mounts, and other mobile-device
accessories under the POPSOCKETS brand.” (Id.
at ¶ 7.) Plaintiff permits only Authorized Distributors,
Authorized Retailers, and Authorized Resellers to sell
PopSockets products. (Id. at ¶ 8.) To promote
and protect its brand, Plaintiff “registered numerous
trademarks with the United States patent and Trademark
Office[.]” (Id. at ¶ 9.)
Defendant
is a New York limited liability company that has its
principle place of business in Brooklyn, New York.
(Id. at ¶ 2; Doc. # 18 at 2.) Defendant
operates a storefront on www.amazon.com
(“Amazon”) called “Online King.”
(Doc. ## 1 at ¶ 2, 18 at 2.) Despite Plaintiff's
allegation that Defendant is not an Authorized Distributor,
Retailer, or Reseller of PopSocket products, Defendant
allegedly sells products bearing Plaintiff's trademarks
through Amazon. (Doc. # 1 at ¶¶ 5, 54, 105-114.)
Defendant sold some of these products to Colorado customers.
(Id. at ¶¶ 5, 114, 245, 268.)
Plaintiff
alleges that Defendant interferes with PopSocket quality
control procedures when Defendant sells its products without
Plaintiff's authorization because Authorized Sellers must
“abide by the quality-control requirements” and
are subject to Plaintiff's auditing policies and
procedures. (Id. at ¶¶ 55-103, 106-114.)
Defendant purportedly does not “abide by
PopSocket's quality control and customer-service
requirements[.]” (Id. at ¶¶
131-141.) Consumers who purchased products bearing
Plaintiff's trademarks from Defendant have submitted
numerous negative reviews on Amazon. (Id. at
¶¶ 33-54, 115-130.) Prior to filing suit, Plaintiff
sent Defendant two cease and desist letters providing notice
that Defendant's conduct infringed upon Plaintiff's
trademark rights and harmed Plaintiff in Colorado.
(Id. at ¶¶ 5, 160-61, 163.) Plaintiff
alleges that following Defendant's receipt of these
letters, Defendant's Amazon “storefront continued
to advertise and sell products bearing the PopSockets
Trademarks.” (Id. at ¶ 161.)
On May
5, 2019, Plaintiff filed its Complaint alleging that
Defendant's unauthorized sale of Plaintiff's
trademarked products violates the Lanham Act and Colorado law
in addition to supporting common law claims. (Id. at
¶¶ 184-251.) On July 15, 2019, pursuant to Federal
Rules of Civil Procedure 12(b)(2) and 12(b)(3), Defendant
moved to dismiss Plaintiff's complaint for lack of
personal jurisdiction and improper venue, and alternatively,
if dismissal is unwarranted, moved to transfer the instant
action pursuant to 28 U.S.C. § 1404. (Doc. # 18.)
Plaintiff responds that this Court has personal jurisdiction
over Defendant, that venue is proper under 28 U.S.C. §
1391(b)(2), and that as a result, transfer for inconvenience
is unwarranted. (Doc. # 19 at 4, 12.) Defendant replies that
Plaintiff cannot meet its burden to establish minimum
contacts in Colorado and that, without transfer, Defendant
will suffer undue burden as to travel and discovery-related
obligations. (Doc. # 27 at 2-4, 7.) For the reasons set forth
below, the Court denies Defendant's Motion.
II.
LEGAL STANDARDS
A.
RULE 12(B)(2)
Rule
12(b)(2) provides that a party may move to dismiss a
complaint for “lack of personal jurisdiction.”
Fed.R.Civ.P. 12(b)(2). Although a plaintiff bears the burden
of establishing personal jurisdiction, a plaintiff need only
make a prima facie showing that personal
jurisdiction is proper. Dudnikov v. Chalk & Vermilion
Fine Arts, 514 F.3d 1063, 1070 (10th Cir. 2008); AST
Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054,
1056- 57 (10th Cir. 2008). Courts accept as true all
well-pleaded “plausible, non-conclusory, and
non-speculative” factual allegations in a complaint.
Dudnikov, 514 F.3d at 1070 (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544 (2007)). The prima
facie showing may be made by submitting affidavits or
other written materials with facts that would support
jurisdiction over the defendant. OMI Holdings, Inc. v.
Royal Ins. of Canada, 149 F.3d 1086, 1091 (10th Cir.
1998). Conflicting facts in the parties' affidavits
“must be resolved in the plaintiff's favor, and the
plaintiff's prima facie showing is sufficient
notwithstanding the contrary presentation by the moving
party.” Wenz v. Memery Crystal, 55 F.3d 1503,
1505 (10th Cir. 1995) (internal quotation marks and citations
omitted).
B.
RULE 12(B)(3)
Rule
12(b)(3) provides that a defendant may move to dismiss a
complaint because of “improper venue.”
Fed.R.Civ.P. 12(b)(3). Once venue is challenged, it is the
plaintiff's burden to show that venue is proper in the
forum district. See Gwynn v. TransCor Am., Inc., 26
F.Supp.2d 1256, 1261 (D. Colo. 1998). “At the motion to
dismiss stage, a plaintiff must present only a prima
facie showing of venue.” Scott v. Buckner
Co., 388 F.Supp.3d 1320, 1324 (D. Colo. 2019).
“[I]n reviewing a defendant's Rule 12(b)(3) motion
to dismiss for improper venue, the Court may examine facts
outside of the complaint and must draw all reasonable
inferences and resolve all factual conflicts in favor of the
plaintiff.” Id. (internal quotations omitted).
Courts must “accept the well-pleaded allegations of the
complaint as true to the extent that they are uncontested by
the defendant's affidavits.” Id. (quoting
Karl W. Schmidt & Assocs., Inc. v. Action Envtl.
Sols., LLC, No. 14-cv-00907-RBJ, 2014 WL
6617095, at *2 (D. Colo. Nov. 21, 2014)). “If the
parties present conflicting affidavits, all factual disputes
are resolved in the plaintiff's favor, and the
plaintiff's prima facie showing is sufficient
notwithstanding the contrary presentation by the moving
party.” Scott, 388 F.Supp.3d at 1324
(quotation marks and citations omitted).
III.
ANALYSIS
A.
WHETHER THE COURT MAY EXERCISE PERSONAL JURISDICTION
Whether
personal jurisdiction exists depends on a two-step inquiry:
(1) a court determines “whether any applicable statute
authorizes the service of process” on a defendant; and
(2) a court examines “whether the exercise of such
statutory jurisdiction comports with constitutional due
process demands.” Dudnikov, 514 F.3d at
1070.
Because
the Lanham Act does not provide for nationwide service of
process, the Court must review the Colorado long-arm statute.
CrossFit, Inc. v. Jenkins, 69 F.Supp.3d 1088, 1094
(D. Colo. 2014); Dudnikov, 514 F.3d at 1070;
Fed.R.Civ.P. 4(k)(1)(A). Colorado's long-arm statute, in
turn, confers the maximum jurisdiction permissible consistent
with the Due Process Clause. Archangel Diamond Corp. v.
Lukoil, 123 P.3d 1187, 1193 (Colo. 2005); Grynberg
v. Ivanhoe Energy, 666 F.Supp.2d 1218, 1229 (D. Colo.
2009); Colo. Rev. Stat. § 13-1-124.
The
United States Supreme Court has held that, to exercise
jurisdiction in harmony with due process, a defendant must
have “minimum contacts” with the forum state,
such that having to defend a lawsuit there would not
“offend traditional notions of fair play and
substantial justice.” Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). Jurisdiction over
corporations may either be general or specific. Rambo v.
Am. S. Ins. Co., 839 F.2d 1415, 1418 (10th Cir. 1988).
Jurisdiction over a defendant in a suit arising out of or
related to the defendant's contacts with the forum state
is “specific jurisdiction.”[1] Id. The
bulk of the parties' briefing focuses on specific
personal jurisdiction. Thus, the Court first addresses
specific jurisdiction because if such jurisdiction exists,
analysis of general jurisdiction is unnecessary.
1.
Whether Defendant Has Minimum ...