PopSockets LLC v. Online King LLC

          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 ...