LISA PUPO LENIHAN, Magistrate Judge.
Currently before the Court for disposition are the Motion to Dismiss Pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) (
According to the Complaint, Prominent is a global leader in all aspects of water treatment solutions, and has used its PROMINENT marks for over 50 years to brand its acclaimed and market leading products. (Compl., ¶2,
Plaintiff Prominent GmbH is a limited liability company organized and existing under the laws of the Federal Republic of Germany, with an office and principal place of business in Heidelberg, Germany. (Id. at ¶14.) At all material times, Prominent GmbH is and was engaged in the business of developing, manufacturing, distributing, marketing, maintaining, and providing high quality water treatment and water disinfection solutions, as well as dosage pumps, metering pumps and related technology including, but not limited to, dry feeders. (Id.)
Plaintiff Prominent Systems spol. s r. o. is a limited liability company organized and existing under the laws of the Czech Republic, with an office and principal place of business in Blovice, Czech Republic. (Id. at ¶ 15.) Prominent Systems spol. s r. o. is a wholly owned subsidiary of Prominent GmbH and is engaged in the business of producing water treatment systems and components thereof. (Id.)
Plaintiff Prominent Fluid Controls, Inc., is a Pennsylvania corporation with its headquarters in Pittsburgh, Pennsylvania. (Id. at ¶ 16.) At all material times, Prominent Fluid Controls is and was a wholly owned subsidiary of Prominent GmbH and is Prominent's exclusive distributor in the United States. (Id.) Prominent Fluid Controls is engaged in the same business activities as those stated for Prominent GmbH, and operates under the name Prominent, which is protected by federal and state trademark registrations. (Id.)
Defendant Prominent Systems, Inc. is a California corporation with a principal place of business located in the City of Industry, California. (Id. at ¶ 17; Decl. of Ky Tran ("Tran Decl.") at ¶2,
Plaintiffs allege that Prominent Systems targets a variety of industries including companies in the food and beverage, pharmaceutical, and public sectors. (Compl., ¶ 17 & Ex. 7 thereto,
Defendant Prominent Supplies, Inc. is a California corporation with its principal place of business located in San Gabriel, California,
Defendant Ky Tran resides in the State of California and serves as the President of Prominent Systems. (Compl. at ¶ 19.) In such capacity, Defendant Tran directs some, but not all, of the business and commercial activities of Defendant Prominent Systems, as he is not the sole officer of the corporation. (Id.; Supp. Tran Decl. at ¶ 12.) It appears, however, that he does not direct any of the business and commercial activities of Prominent Supplies as that business is the exclusive concern of the president and sole shareholder of Prominent Supplies, I. Nyoman Scorpio. (Supp. Tran Decl. at ¶¶ 2 & 6; Scorpio Decl. at ¶1.)
According to Defendant Tran, Prominent Systems and Prominent Supplies do not share common officers or directors, do not own each other's stock, do not consolidate tax returns or financial records, and do not exercise any control over each other, but are independent, separately existing entities with divergent business purposes. (Supp. Tran Decl. at ¶¶ 3-5, 9-10.) Prominent Supplies does not utilize any employee of Prominent Systems; Mr. Scorpio, as a non-officer employee of Prominent Systems, provides general marketing of goods and services for Prominent Systems, largely in the Southern California area. (Supp. Tran Decl. at ¶ 3; Scorpio Decl. at ¶1.) Prominent Supplies does not display any signage at the City of Industry, California headquarters of Prominent Systems. (Supp. Tran Decl. at ¶11.)
Defendant Tran declares that neither he nor Prominent Systems has ever: (1) attended any trade show in Pennsylvania (Supp. Tran Decl. at ¶ 19); (2) Defendant Tran further declares that (1) the heavy machinery owned and/or operated by Prominent Systems, which is the subject of this lawsuit, is primarily located in California, Washington, and Texas, and none is located in Pennsylvania (id. at ¶¶ 21-22); (2) neither he, in his individual capacity, nor Prominent Supplies has ever advertised in Water Quality Products magazine, but Prominent Systems does advertise in that publication (id. at ¶ 26); (3) he personally has no business relationships, operations, or endeavors in Pennsylvania and has not ever been within the borders of Pennsylvania (Tran. Decl. at ¶¶ 3-4); (4) he has no employees residing or domiciled in Pennsylvania, and no offices or comparable facilities, telephone listings, or mailing address in Pennsylvania (id. at ¶ 9); (5) he has no bank accounts or other tangible personal or real property in Pennsylvania (id. at ¶11); and (6) he has never transacted business in, or set foot within the borders of, Pennsylvania (id. at ¶14).
With regard to Prominent Systems, Defendant Tran states that: (1) it is not incorporated in Pennsylvania (id. at ¶6); (2) none of its employees, officers or directors reside or are domiciled in Pennsylvania (id. at ¶¶ 7-8); (3) it has no branch office or comparable facilities, telephone listings, or mailing address in Pennsylvania (id. at ¶8); (4) it has no bank accounts or other tangible personal or real property in Pennsylvania (5) none of its employees work in Pennsylvania (id. at ¶13); and (6) none of its board of directors or shareholders meetings have been held in Pennsylvania, and none of its officers or directors has attended business conferences or similar functions within Pennsylvania (Id. at ¶ 12).
As to Defendant Prominent Supplies, Mr. Scorpio declares that: (1) it is not incorporated or qualified to do business in Pennsylvania, and has no subsidiaries incorporated or qualified to do business in Pennsylvania (Scorpio Decl. at ¶4); (2) none of its employees, officers or directors reside or are domiciled in Pennsylvania (id. at ¶¶ 5-6); (3) it has not contracted with persons residing in Pennsylvania to act on its behalf with respect to marketing, distributing or servicing any of its goods or products (id. at ¶ 6); (4) it has no branch office or comparable facilities, telephone listings, or mailing address in Pennsylvania (id. at ¶ 7); (5) it has never transacted business in Pennsylvania (id. at ¶ 14); (6) it has no bank accounts or other tangible personal or real property in Pennsylvania (id. at ¶ 8); (7) it does not direct any of its advertising specifically towards Pennsylvania residents, nor does it advertise in any publications that are directed primarily towards Pennsylvania residents (id. at ¶ 9); (8) none of its board of directors or shareholders meetings have been held in Pennsylvania, and none of its officers or directors has attended business conferences or similar functions within Pennsylvania (id. at ¶ 10); (9) its acts or omissions for which Plaintiffs seek to hold it liable in this action all occurred outside Pennsylvania (id. at ¶11). Mr. Scorpio, who serves as president of Prominent Supplies, declares that he personally has no business relationships, operations, or endeavors in Pennsylvania and has never stepped foot in Pennsylvania. (Scorpio Decl. at ¶¶ 12-13.)
Defendants' California business operations, officers, counsel, witnesses, and evidence (heavy equipment) are all located within 100 miles of the Central District of California. (Tran Decl. at ¶¶ 23, 27-30, 32-33; Supp. Tran Decl. at ¶¶ 24-25; Scorpio Decl. at ¶¶ 21, 23, 27-30, 32-33.)
After failed attempts to resolve the trademark dispute with Defendants out of court, Plaintiffs instituted this action on October 21, 2016. In response, Defendants filed a motion to dismiss pursuant to Rules 12(b)(2) and (b)(3) (ECF No. 21), as well as a motion to transfer the case to the Central District of California (ECF No. 23), and supporting briefs (ECF Nos. 22 & 24). Plaintiffs filed a timely brief in opposition to the motions (ECF No. 29), to which Defendants filed a reply brief (ECF No. 30). As the motions to dismiss and/or transfer have been fully briefed, they are now ripe for disposition.
In responding to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden of proving, by a preponderance of the evidence, facts sufficient to establish personal jurisdiction over the defendants, by producing affidavits or other competent evidence. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002); Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996)); see also Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984). Where, as here, an evidentiary hearing is not held on the 12(b)(2) motion, the plaintiff need only demonstrate a prima facie case of personal jurisdiction. Metcalfe, 566 F.3d at 330 (citing O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007)); D'Jamoos v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009) (citing Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004)). A plaintiff "presents a prima facie case for the exercise of personal jurisdiction by `establishing with reasonable particularity sufficient contacts between the defendant and the forum state.'" Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992) (quoting Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987)) (other citation omitted).
In deciding a Rule 12(b)(2) motion, although the court must accept the plaintiff's allegations as true and resolves all doubts in its favor, D'Jamoos, 566 F.3d at 102 (citing Miller Yacht Sales, supra), plaintiff may not rest solely on the pleadings to satisfy its burden of proof, see Pinker, 292 F.3d at 368; Carteret Sav. Bank, 954 F.2d at 146. Rather, the plaintiff must present evidence that demonstrates a prima facie case for the exercise of personal jurisdiction. See Mellon Bank (East) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). If the plaintiff succeeds, the burden then shifts to the defendant to demonstrate that an exercise of personal jurisdiction by the forum state would violate due process, i.e., the exercise of personal jurisdiction over defendant would offend traditional notions of fair play and substantial justice. Miller Yacht Sales, 384 F.3d at 97 (citing Burger King, 471 U.S. at 476).
In this circuit, the party challenging venue has the burden of proving that venue in the selected judicial district is improper. Myers v. Am. Dental Ass'n, 695 F.2d 716, 724 (3d Cir. 1982) (citation & footnote omitted); see also Manning v. Flannery, Civ. A. No. 09-3190, 2010 WL 55295, at *4 & n. 4 (E.D.Pa. Jan. 6, 2010) (citing Myers, supra) (other citations & footnote omitted). In deciding a motion to dismiss and/or transfer for improper venue under Rule 12(b)(3), the Court must generally accept as true the allegations in the pleadings. Heft v. AAI Corp., 355 F.Supp.2d 757, 762 (M.D.Pa. 2005) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002); Myers, 695 F.2d at 724) (footnote omitted). In addition, "[t]he parties may submit affidavits in support of their positions, and may stipulate as to certain facts, but the plaintiff is entitled to rely on the allegations of the complaint absent evidentiary challenge." Heft, 355 F.Supp. 2d at 762 (citing Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 & n. 1 (3d Cir.1992); Myers, 695 F.2d at 724). In either event, the Court is required to view the facts in the light most favorable to the Plaintiff. Id. (citing Carteret and Myers, supra).
The district court is vested with broad discretion in determining whether transfer of venue is appropriate. Plum Tree, Inc. v. Stockment, 488 F.2d 754, 756 (3d Cir. 1973) (citations omitted); Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995).
In their reply brief, Defendants concede that this Court likely possesses specific personal jurisdiction over Prominent Systems.
At the outset, the Court notes that Plaintiffs have not delineated the contacts of Prominent Supplies and Ky Tran that were purposefully directed to the forum, but rather, rely on the alleged contacts of Prominent Systems or the Defendants collectively, which they claim show purposeful availment. This infirmity is fatal to establishing the Court's specific personal jurisdiction over Prominent Supplies and Ky Tran.
In order for personal jurisdiction to exist over Defendants in the Western District of Pennsylvania, each Defendant must have certain "minimum contacts" with the forum state "such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'"
Personal jurisdiction can exist in one of two forms: specific jurisdiction or general jurisdiction. Specific jurisdiction applies where the cause of action is related to or arises from the defendant's contacts with the forum, Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 451 (3d Cir. 2003) (quoting Pinker, 292 F.3d at 368), while general jurisdiction applies where the defendant's contacts with the forum are "continuous and systematic" but are not related to the plaintiff's cause of action, Pennzoil Prods. v. Colelli & Assocs., Inc., 149 F.3d 197, 200 (3d Cir. 1998) (citation omitted). In the instant matter, Plaintiffs submit that personal jurisdiction exists over Defendants based solely upon specific jurisdiction.
Specific personal jurisdiction requires the Court to conduct a three-part test. D'Jamoos v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009). Initially, the court must determine whether the defendant has "`purposefully directed'" its activities toward the forum state. Id. (quoting Burger King Corp., 471 U.S. 462 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984) (whether "minimum contacts" exist requires the court to examine "the relationship among the defendant, the forum, and the litigation."))). "Second, the litigation must `arise out of or relate to' at least one of those activities." Id. (quoting Helicopteros Nacionales de Columbia, S.A., 466 U.S. 408, 414 (1984); O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir. 2007)). Finally, if the plaintiff has established the first two elements, only then does the court proceed to the third part of the inquiry-whether the defendant's contacts with the forum state are such that maintenance of the action "`does not offend traditional notions of fair play and substantial justice.'"
D'Jamoos, 566 F.3d at 102-03. The inquiry under D'Jamoos must be applied to each claim and to each defendant independently. Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007) (citing Remick v. Manfredy, 238 F.3d 248, 255-56 (3d Cir. 2001)). Plaintiffs bear the burden of proof on the first two elements, and only if Plaintiffs meet this burden does the burden shift to Defendants to prove the third element. Burger King, 471 U.S. at 476-78.
The court of appeals has applied the D'Jamoos test to defendants who are not being sued for intentional torts. See O'Connor, 496 F.3d at 317 & n. 2. Where the plaintiff has brought suit against a defendant based on an intentional tort, the court of appeals has applied the Calder effects test. Id. at 317 n. 2. Here, Plaintiffs argue that specific jurisdiction exists against Prominent Supplies and Ky Tran under both tests.
Under the first prong of the D'Jamoos test, Plaintiffs must show that Prominent Supplies and Ky Tran purposefully directed their activities at the forum. Thus, the Court will examine the alleged contacts of each Defendant as supported by Plaintiffs' and Defendants' affidavits and exhibits.
The contacts of Prominent Supplies identified by Plaintiffs, which are alleged to be purposefully directed to Pennsylvania, consist merely of (1) Prominent Supplies' allegedly interactive website,
Plaintiffs submit that Prominent Supplies' website, while not interactive, is sufficiently commercial to show contacts with Pennsylvania, such that it falls in the middle of the sliding scale set forth in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D.Pa.1997).
In Metcalfe v. Renaissance Marine, Inc., the court of appeals relied on its holding in Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 454 (3d Cir. 2003), in which it had articulated the controlling principle in determining whether websites are sufficiently interactive/commercial to show contacts directed to the forum:
566 F.3d 324, 340 (3d Cir. 2009). When the Court examines Prominent Supplies' website and the exhibits depicting the website, it is clear that it lacks the necessary level of interactivity and commercial activity to establish sufficient minimum contacts for personal jurisdiction purposes.
In the Court's view, Prominent Supplies' website is passive rather than interactive, as it does little more than make contact information available to those who are interested in purchasing or finding out more about its cleaning products. The one-page website states that its cleaning products are available for public purchase either at its store in California, or by calling a telephone number in California. (Pls.' Ex. 10 to Compl.,
Plaintiffs attempt to get around this infirmity by arguing that Defendants employ metatags and search engine optimization techniques to specifically target Pennsylvania consumers searching for PROMINENT on Google or other search engines to lure them to Defendants' websites (citing Liedtke Decl., ¶¶ 20-26, Ex. B to Pls.' Br. in Opp'n (citing Ex. B-3 attached thereto)). However, Liedtke's declaration and supporting documentation do not show that the use of metatags and search engine optimization techniques specifically targeted Pennsylvania consumers. Rather, Liedtke states that metatags are designed to induce internet search engines to display a website more prominently than others. This statement only supports the conclusion that any consumers (nationally or globally) who enter a search inquiry containing the word "PROMINENT" will likely see Defendants' websites listed more prominently in their search results. Exhibit 3 to Liedtke's declaration does not support the conclusion that the use of metatags targets consumers in Pennsylvania.
Plaintiffs also advance the argument that Defendants' use of their PROMINENT trademark on Defendants' websites targeted Pennsylvania consumers. Plaintiffs fail to provide any explanation as to how this establishes that Prominent Supplies was targeting Pennsylvania consumers, and the Court fails to see how merely displaying Plaintiffs' trademark on Defendants' websites would purposefully target consumers in Pennsylvania. Such a relationship is tenuous at best; due process requires more.
In addition, the president of Prominent Supplies, I. Nyoman Scorpio, stated in his declaration that Prominent Supplies has never transacted business in Pennsylvania, nor has it ever contracted with persons residing in Pennsylvania to transact business on its behalf. Scorpio Decl. ¶¶ 6, 14.
Thus, Plaintiffs have failed to produce any evidence that Prominent Supplies' website targets Pennsylvania customers. If Prominent Supplies' website can be regarded as targeted at all, it is targeted at anyone anywhere in the world who is interested in purchasing its cleaning products. If that targeting is sufficient, Prominent Supplies' website has subjected it to personal jurisdiction anywhere in the world that a potential customer resides, a result that is inconsistent with the court of appeals' holding in Toys "R" Us.
To the extent that Plaintiffs attempt to rely on Defendants' participation in the 2016 Annual Conference & Exhibition of the American Water Works Association, based on the attendee list showing that more than 300 of the attendees were from Pennsylvania (Ex. B-5 attached to Liedkte Decl.,
Perhaps realizing the insufficiency of these contacts, Plaintiffs attempt to circumvent the minimum contacts requirement by arguing that Prominent Supplies is the alter ego of Prominent Systems. As such, Plaintiffs contend that the acts of Prominent Systems are also attributable to Prominent Supplies for purposes of establishing the latter's personal jurisdiction. This argument also fails, as the undisputed evidence here does not support a finding that Prominent Supplies is the alter ego of Prominent Systems.
A plaintiff may rely upon an alter ego theory to prove personal jurisdiction over one corporation, based its relationship with another, related entity—typically a parent company and its subsidiary—that is subject to personal jurisdiction in the particular forum. In re Chocolate Confectionary Antitrust Litig., 674 F.Supp.2d 580, 598-99 (W.D.Pa. 2009)(citing Simeone ex rel. Estate of Albert Francis Simeone, Jr. v. Bombardier-Rotax GmbH, 360 F.Supp.2d 665, 675 (E.D.Pa. 2005)) (footnote omitted). In determining whether personal jurisdiction may be constitutionally exercised under this theory, the courts have noted that "[t]he degree of control exercised by the parent [is] greater than normally associated with common ownership and directorship." In re Enter. Rent-A-Car Wage & Hour Employment Practices Litig. v. Enter. Rent-A-Car Co., 735 F.Supp.2d 277, 318 (W.D. Pa. 2010) (citation & internal quotation marks omitted); Chocolate Confectionary, 674 F. Supp. 2d at 598 (citations omitted). In particular, the courts have considered the following ten factors in determining whether more intrusive control is present:
Chocolate Confectionary, 674 F. Supp. 2d at 598 (quoting In re Chocolate Confectionary Antitrust Litig., 602 F.Supp.2d 538, 569-70) (M.D.Pa. 2009)) (other citations omitted). The court further opined that "[n]o one aspect of the relationship between two corporations unilaterally disposes of the analysis, and . . . any evidence bearing on the corporations' functional interrelationship" may be considered. Id. However, the sine qua non of an alter ego relationship is daily, operational control. Id. at 600 (citing Poe v. Babcock Int'l plc, 662 F.Supp. 4, 6 (M.D.Pa. 1985)).
Plaintiffs predicate their alter ego argument upon five factors.
Second, Plaintiffs submit that the two companies share common employees, based on (1) the declaration of Mr. Scorpio (¶28) and Mr. Tran (¶¶ 13, 28), in which they state, respectively, that Prominent Supplies and Prominent Systems are "a small company with only 22 employees, 18 of whom are located in the Central District of California[;]" and (2) acceptance of service of process by the same "employee" on behalf of both companies. While Plaintiffs accurately convey the statements of Messrs. Tran and Scorpio, subsequently, Defendants submitted a supplemental declaration of Ky Tran (
Next, Plaintiffs contend that the two companies share a common business purpose because the project management services mentioned in Mr. Scorpio's declaration compliment the activities of Prominent Systems. This appears to be pure speculation on Plaintiffs' part, as they have not pointed to any basis in the record to support this conclusion. Rather, Prominent Supplies' website indicates that its business involves the sale of cleaning supplies and janitorial products (
Fourth, Plaintiffs submit that Defendants make common use of business equipment and office supplies, because they utilize the same telephone number and same principal place of business. Again, Plaintiffs are asking the Court to make an inference here that is not reasonable based on the evidence produced by Defendants. The California Secretary of State records show different business addresses for Prominent Systems and Prominent Supplies. See Exs. 5 & 10 attached to Compl.; Ex. 11 attached to Defs.' Reply Br. (
Finally, Plaintiffs submit that Defendants use the same branding/logo, because the only visible logo/advertising on Defendants' building is the Prominent Systems' logo (Compl., ¶ 40), and the logos of the two companies are one in the same upon visual comparison. This argument is predicated partially on the assumption that the two companies share Prominent Systems' principal place of business, located at 13095 E. Temple Avenue, City of Industry, California. But other than showing that Prominent Supplies lists that address (for privacy purposes) on their website for obtaining more information about purchasing its products, the record does not contain any evidence that Prominent Systems is controlling the daily business operations of Prominent Supplies from the 13095 E. Temple Avenue address. Moreover, Mr. Tran states that Prominent Supplies does not display any signage at Prominent Systems' principal place of business. (Supp. Tran Decl. ¶ 11.) As to the branding/logo, a visual inspection of the logos reveals that the same figurative element appears in both, but the names appearing with the figurative element are different (PROMINENT Systems, Inc. v. PROMINENT Supplies, Inc.), and they are not displayed in the same location in reference to the figurative element—PROMINENT Systems, Inc. appears to the right of the figurative element, while PROMINENT Supplies, Inc. appears underneath the figurative element. Compare Compl. ¶ 40 with Ex. 10 to Compl. At best, the branding/logos show that the two companies are related, but not that they are one in the same.
The Court observes that Defendants' declarations further show that (1) the two companies do not own each other's shares of stock (Supp. Tran Decl. ¶ 4) or consolidate tax returns or financial records (id. at ¶ 5); and (2) Mr. Tran has never directed the business or commercial activities of Prominent Supplies (id. at ¶ 13).
Considering the totality of the evidence, the few commonalities noted above do not yield the degree of daily, operational control necessary, above and beyond that normally associated with common ownership and directorship, to allow this Court to conclude that Prominent Supplies is the alter ego of Prominent Systems. Accordingly, Plaintiffs may not attribute Prominent Systems' contacts with Pennsylvania to Prominent Supplies, for purposes of establishing this Court's personal jurisdiction over Prominent Supplies.
In response to Defendants' passing remark in their opening brief—that Ky Tran was "ostensibly protected by the corporate privilege"—Plaintiffs argue that under Third Circuit precedent, Tran would not be protected by the corporate shield doctrine. According to Plaintiffs, under the law of this Circuit, a "corporate officer who actually and substantially participates in the corporation's act of trademark infringement is personally liable under section 43(a), even though he acted as an agent of the corporation rather than on his own behalf." Elec. Lab. Supply Co. v. Cullen, 977 F.2d 798, 807 (3d Cir. 1992)(citing Donsco, Inc. v. Casper Corp., 587 F.2d 602, 606 (3d Cir. 1978)). However, Plaintiffs' reliance on this jurisprudence is misplaced, as the corporate shield doctrine speaks to the individual liability of a corporate officer, not personal jurisdiction.
Rather, this Court has previously set forth the guiding jurisprudence regarding whether personal jurisdiction can be exercised over a corporate officer for acts performed in such capacity in Farkas v. Rich Coast Corp., No. 2:13-cv-926, 2014 WL 550594, at *18 (W.D.Pa. Feb. 11, 2014), as follows:
When the three factors identified in Rittenhouse & Lee are applied here, the Court concludes that Ky Tran's position as the president of Prominent Systems does not provide a basis for exercising personal jurisdiction over him.
Plaintiffs rely on "information and belief" and conjecture to argue that Mr. Tran directs all business and commercial activities of Prominent Systems and Prominent Supplies. For example, Plaintiffs contend that "[o]n information and belief, Mr. Tran has authorized, directed, helped orchestrate, or participated in the infringement of [its] PROMINENT marks, knowing that the infringement would cause harm on their true owner, Prominent, which he knew and knows is located in Pennsylvania." (Pls.' Br. in Opp'n at 8 (citing Compl., ¶ 19.) Plaintiffs cannot rely on allegations in their Complaint to defeat a motion to dismiss for lack of personal jurisdiction, where Defendants have submitted declarations and other evidence in support of their motion. Metcalfe, 566 F.3d at 330. Moreover, in his declaration, Mr. Tran states that (1) prior to this lawsuit, he had no knowledge that one or more of the Plaintiffs had its national headquarters in Pennsylvania (Supp. Tran Decl. ¶ 28); (2) he has never directed the business and commercial activities of Prominent Supplies (id. at ¶ 13); (3) he directs some but not all of the business and commercial activities of Prominent Systems, as he is not the sole officer of that corporation (id. at ¶ 12); (4) he has never engaged in any bidding activity in Pennsylvania in his personal capacity (id. at ¶ 16); (5) he has never attended a trade show in Pennsylvania (id. at ¶ 19); and (6) he has absolutely no knowledge that any consumer in Pennsylvania has ever made a purchase from Prominent Systems in error, believing that such a purchase was being made from Plaintiffs (id. at ¶23).
Plaintiffs also rely on Mr. Tran's statement that Prominent Systems employs only 22 people to conjecture that "[i]t is inconceivable that Mr. Tran as the president of an organization of this size would not have actually and substantially participate[d] in all of the corporation's acts, including the willful and deliberate infringement of [its] valuable PROMINENT marks. At the very least the president of such an organization would have directed and authorized the trademark infringing activities." Pls.' Br. in Opp'n at 8. Plaintiffs' suppositions, which are not supported by any evidence, fall short of their prima facie burden in opposing dismissal for lack of personal jurisdiction.
Finally, Plaintiffs contend that Mr. Tran is the "string puller behind all four regional Prominent Systems entities including Prominent Systems' `Central and Eastern Division'[.]" Id. at 8-9 (citing Liedtke Decl. ¶¶ 3-4). However, Mr. Liedtke's declaration actually states that Defendants operate through a "Western Division," a "Central and Eastern Division" as well as their headquarters, as confirmed by documentation from the various states where the divisions are located (see Exs. 5 & 6 attached to Complaint), Moreover, Mr. Liedtke's statement that Ky Tran is the "key individual behind all of these entities and holds the key officer and director positions for all of these entities" (Liedtke Decl. ¶ 6), is much ado about nothing. These divisions are not separate companies, but divisions of the same company—Prominent Systems. Indeed, the corporate name on the registrations is Prominent Systems, Inc. The evidence of record belies the over importance Plaintiffs seek to attach to the individual state registrations listing Mr. Tran as the agent/officer of Prominent Systems.
Clearly, Plaintiffs have failed to provide any evidence of the nature and extent of Mr. Tran's personal participation in the alleged tortious conduct, or of the nature and quality of his forum contacts (and Mr. Tran's declarations belie any such contact). As to Mr. Tran's role in the corporate structure, there is evidence that he directs some of Prominent Systems' business and commercial operations, but this evidence falls short of the mark in establishing that he personally participated in the alleged tortious activity. As such, the Court concludes that when it considers Mr. Tran's corporate contacts, they are insufficient to constitutionally exercise personal jurisdiction over him for acts performed in such capacity.
Moreover, given the lack of evidence to show any contacts with Pennsylvania by Mr. Tran in an individual capacity, Plaintiffs have failed to show sufficient minimum contacts with Pennsylvania to establish personal jurisdiction over him in this District.
Turning to the second prong of D'Jamoos, the Court concludes that because the activities identified by Plaintiffs do not constitute purposefully directed contacts with Pennsylvania, it is of no moment then whether the litigation arose out of or relates to one of the activities relied on by Plaintiffs to establish specific personal jurisdiction.
Likewise, having failed to establish the first prong of the D'Jamoos test, Plaintiffs have not caused the burden to shift to Defendants to prove the third prong of D'Jamoos—that their contacts with Pennsylvania are such that maintenance of the action "offend[s] traditional notions of fair play and substantial justice."
Alternatively, Plaintiffs argue that specific personal jurisdiction exists over Defendants under the Calder effects test,
The U.S. Court of Appeals for the Third Circuit has determined that a plaintiff may establish personal jurisdiction under Calder if he or she demonstrates:
Marten, 499 F.3d at 297 (quoting IMO Indus., 155 F.3d at 265-66) (internal quotation marks omitted). The Marten court further explained:
Id. In applying the Calder effects test, the court of appeals has instructed that a district need not consider the first two elements unless the "expressly aimed" element is first met. Id. (citing IMO Indus., 155 F.3d at 266). To demonstrate that the defendant "expressly aimed" his or her tortious conduct at the forum, the plaintiff must show that
As explained above in applying the D'Jamoos test, Plaintiffs have failed to establish with reasonable particularity sufficient contacts between Prominent Supplies and Pennsylvania, as well as between Ky Tran and Pennsylvania. Nor have Plaintiffs pointed to any evidence in the record which shows that Prominent Supplies or Ky Tran expressly aimed their allegedly tortious conduct at Pennsylvania. Plaintiffs have not identified any Pennsylvania customers who bought Defendants' products thinking that they were buying Plaintiffs' products. The fact that Plaintiffs' United States headquarters is located in this District is insufficient by itself to meet the "expressly aimed" criteria of Calder. Marten, 499 F.3d at 298. Therefore, Plaintiffs have failed to meet their burden of establishing sufficient minimum contacts under the Calder effects test.
Plaintiffs further argue that this Court should exercise personal jurisdiction over Prominent Supplies and Ky Tran based on the tort out/harm in test under Pennsylvania law. The Pennsylvania long-arm statute extends jurisdiction to any person who "causes harm or tortious injury in the Commonwealth by an act or omission outside the Commonwealth." 42 PA. CONS. STAT. ANN. §5322(a)(4). This provision is commonly referred to as the "tort out/harm in" provision.
In this case, Plaintiffs contend that they suffered injury in Pennsylvania, although Defendants' alleged tortious conduct occurred outside of Pennsylvania. The record does not appear to support Plaintiffs' contention as to Prominent Supplies and Ky Tran, as it is devoid of any evidence showing that Plaintiffs suffered any harm as a result of the actions of Prominent Supplies or Ky Tran. Moreover, this Court found above that the actions of Prominent Systems could not be attributed to either of these Defendants in order to establish personal jurisdiction.
Nonetheless, even assuming that personal jurisdiction could somehow be maintained over Prominent Supplies and Ky Tran under Pennsylvania's long-arm statute, that does not end the inquiry because the court "cannot presume that jurisdiction is proper simply because the requirements of a long—arm statute have been met. . . . [The court] must still determine whether the strictures of constitutional due process (i.e., minimum contacts and notions of `fair play and substantial justice') would be observed by asserting jurisdiction." Pennzoil Prods. Co. v. Colelli & Assocs., Inc., 149 F.3d 197, 202 (3d Cir. 1996) (footnote omitted). Therefore, Plaintiffs must also show that Defendants have sufficient minimum contacts with Pennsylvania, and if they meet this burden, then Defendants must show that the exercise of such personal jurisdiction would offend the notions of fair play and substantial justice.
As discussed above, Plaintiffs have not shown that any alleged tortious acts by Prominent Supplies or Ky Tran in California were deliberately directed towards Pennsylvania and Prominent Fluid Controls, a Pennsylvania corporation. Nor have Plaintiffs identified one Pennsylvania customer that was confused by Prominent Supplies' alleged use of Plaintiffs' trademark. "Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this `fair warning' requirement is satisfied if the defendant has `purposefully directed' his activities at residents of the forum, and the litigation results from alleged injuries that `arise out of or relate to' those activities[.]" Burger King, 471 U.S. at 472 (internal citations omitted). As Plaintiffs have failed to establish that Prominent Supplies and Ky Tran had sufficient minimum contacts with Pennsylvania, personal jurisdiction does not exist over these Defendants under the tort out/harm in provision.
In summary, Plaintiffs have failed to show, under any theory, that Prominent Supplies and Ky Tran purposefully directed their activities toward Pennsylvania. Accordingly, the Court finds that it lacks personal jurisdiction over Prominent Supplies and Ky Tran. Therefore, the Court will grant Defendants' motion to dismiss under Rule 12(b)(2) as to Defendants Prominent Supplies and Ky Tran and dismiss the claims against them without prejudice.
Defendants have also moved to dismiss this action on the basis that venue in the Western District of Pennsylvania is improper under the general venue statute, 28 U.S.C. §1391(b). Defendants' motion to dismiss for improper venue appears to be based on the residence of "all defendants," i.e., either parts (1) or (3) of §1391(b), as Defendants submit that "Plaintiffs cannot rely on the residence of one defendant to bring suit against multiple defendants in this district, where one but not all of them reside." Defs.' Br. at 14.
The remainder of Defendants' argument centers on identifying a proper venue for this action. Defendants submit venue is proper in the Central District of California under all three categories of Section 1391(b), and inform the Court that Prominent Supplies and Ky Tran wish to avail themselves of their personal venue rights in seeking to have this action transferred to the Central District of California.
In response, Plaintiffs argue that other than stating the requirements for venue under Section 1391, Defendants' brief "is utterly devoid of any analysis or application of the controlling statute whatsoever as applied to Plaintiffs' choice of venue." Pls.' Br. in Opp'n at 27. Plaintiffs maintain that venue is proper in this District as to all Defendants based on § 1391(b)(2)—as a substantial part of the events or omissions giving rise to their federal and state trademark infringement claims occurred in the Western District of Pennsylvania. Defendants have not addressed this argument in their reply brief. Thus, Plaintiffs contend that Defendants have failed to meet their burden of proving improper venue.
The Court agrees that venue is proper in this District as to the remaining Defendant, Prominent Systems. However, as this Court lacks personal jurisdiction over Defendants Prominent Supplies and Ky Tran, Defendants' motion to dismiss under Rule 12(b)(3) will be denied as moot as to these Defendants.
Under the general venue statute, venue will lie over a civil action where one of the following circumstances is shown to exist:
28 U.S.C. § 1391(b). In making a determination as to whether venue is proper under §1391(b)(2), "[t]he test . . . is not the defendant's `contacts' with a particular district, but rather the location of those `events or omissions giving rise to the claim'[.]" Cottman Transm'n Sys., Inc. v. Martino, 36 F.3d 291, 294 (3d Cir. 1994); Bockman v. First Am. Marketing Corp., 459 F. App'x 157, 161 (3d Cir. 2012) (quoting Cottman, id.). "The requirement of `[s]ubstantiality is intended to preserve the element of fairness so that a defendant is not haled into a remote district having no real relationship to the dispute.'" Bockman, 459 F. App'x at 161 (quoting Cottman, 36 F.3d at 294). "Events or omissions that might only have some tangential connection with the dispute in litigation are not enough." Cottman, 36 F.3d at 294. The court of appeals in Cottman further explained that "[i]n assessing whether events or omissions giving rise to the claims are substantial, it is necessary to look at the nature of the dispute." 36 F.3d at 295.
Like the instant matter, Cottman involved claims of trademark infringement. The court of appeals held that the "focus of [its] venue inquiry in a Lanham Act trademark infringement case is the location where the unauthorized passing off takes place— whether that occurs solely within one district or many." Id. (citing Tefal, S.A. v. Products Int'l Co., 529 F.2d 495, 49697 (3d Cir.1976)) (other citation omitted). Thus, the Court will briefly examine whether the events or omissions allegedly giving rise to Prominent Systems' alleged unauthorized trademark infringement/passing off in Pennsylvania are likely substantial.
To this end, Plaintiffs submit that they have alleged a likelihood of confusion, including initial interest confusion, and that Prominent Systems uses the PennBid System to procure contracts with government agencies as well as private organizations in Pennsylvania (Compl., ¶¶ 11, 17); and that Prominent Systems' interactive website reaches this District, as does their targeted advertising through Water Quality Products magazine. Pls.' Br. in Opp'n at 28. Plaintiffs also contend that the harm from Prominent Systems' alleged tortious conduct was felt here based on the fact that their U.S. operation is headquartered in the Western District of Pennsylvania. Giving Plaintiffs the benefit of all favorable inferences, as it must, the Court finds that the Complaint and other documents allege sufficient facts from which it can reasonably be inferred that Plaintiffs may be able to show after discovery that a substantial part of the events or actions giving rise to their trademark infringement claims occurred in this District.
In any event, Defendants do not appear to be contesting that venue is proper in this District vis a vis Prominent Systems, but rather, are arguing that the case be transferred in its entirety to the Central District of California—a more convenient forum. Therefore, the Court finds that venue is proper in this District as to Prominent Systems.
For the reasons set forth above, the Court will deny Defendants' motion to dismiss for improper venue under Rule 12(b)(3) as to Defendant Prominent Systems, and will deny that motion as moot as Defendants Prominent Supplies and Ky Tran.
Defendants have also filed a motion to transfer this case to the Central District of California pursuant to 28 U.S.C. § 1404 for forum non conveniens and/or 28 U.S.C. § 1406(a) for lack of personal jurisdiction, and/or 28 U.S.C. § 1631 in the interests of justice, which Plaintiffs have opposed. While venue is proper in this District with regard to the claims against Prominent Systems, because personal jurisdiction is lacking and venue is improper as to Prominent Supplies or Ky Tran, Plaintiffs can only proceed against all three Defendants if this case is transferred to the Central District of California. Accordingly, the Court will evaluate Defendants' motion to transfer under 28 U.S.C. § 1406(a).
Section 1406(a) provides that "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." Courts have allowed a transfer under Section 1406(a), in the interest of justice, when suit is filed in a district in which venue is improper or personal jurisdiction is lacking, or both. Manley v. Engram, 755 F.2d 1463, 1467 (11
Similarly, 28 U.S.C. §1631, which was enacted as part of the Federal Courts Improvement Act of 1982, provides that whenever a "court finds that there is want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action . . . to any other such court in which the action could have been brought at the time it was filed." The Third Circuit has indicated that this statute, too, may be an appropriate authority for transfer where the Court lacks personal jurisdiction. See generally Chicosky v. Presbyterian Med. Ctr., 979 F.Supp. 316, 320 n. 3 (D.N.J. 1997) (discussing, at length, Third Circuit and other case authority for transfer absent personal jurisdiction under §§ 1404, 1406 or 1631); id. at 322, n. 5 (observing that "the weight of authority among courts in this circuit is that section 1631 does allow transfers where personal jurisdiction is lacking").
Where, as in the present case, venue is proper for some defendants but improper for others, the district court is vested with wide discretion in ruling on a motion to transfer under §1406(a). See Charles Alan Wright and Arthur Miller, et al., 14D FED. PRAC. & PROC. JURIS. §3827, at 559-60 (4
On March 27, 2017, the Court held a telephone conference with the parties to discuss the Court's options with regard to Defendants' motion to transfer, in light of its conclusion that personal jurisdiction does not exist over Prominent Supplies and Ky Tran based on the record before it. Counsel for Plaintiffs, Christian Liedtke, informed the Court that while it believed that personal jurisdiction existed over all three Defendants, if the Court was inclined to find jurisdiction lacking as to Prominent Supplies and Ky Tran, Plaintiffs preferred to proceed with their case against Prominent Systems in this District and that the case against Prominent Supplies and Ky Tran be dismissed without prejudice, rather than severed and transferred to California. Mr. Liedtke further represented that given the Court's intended ruling, it was likely that his client would not file a lawsuit in California against the dismissed Defendants at this time, but would wait until this case was concluded to make that decision. Mr. Liedtke further indicated that he did not wish to pursue jurisdictional discovery at this point. He also mentioned that he has over 20 years of experience in litigating trademark infringement cases.
At that same conference, counsel for Defendants, Alan Romero, indicated that his preference was that the entire case be transferred to the Central District of California. He believes that the claims should be tried together in one court because it was Defendants' position that there is one trademark, and a question of fact exists as to whether the term Prominent is generic or not.
After considering the parties arguments in their briefs and at the conference, the Court finds that the interests of justice do not mandate that the claims against Prominent Supplies and Ky Tran be severed and transferred, or that the entire case be transferred, to the Central District of California. Rather, the Court will dismiss the claims against Prominent Supplies and Ky Tran without prejudice, and retain the claims against Prominent Systems. It does not appear that either Plaintiffs or Defendants will be prejudiced by this ruling. Plaintiffs chose this District as their forum; Defendant Prominent Systems has conceded that personal jurisdiction exists over it in this District, and by doing so, purposefully availed itself of the privileges of conducting business in this District.
For these reasons, the Court finds that the interests of justice do not mandate severance and transfer of the claims against Prominent Supplies and Ky Tran, or transfer of the entire case. Accordingly, the Court will deny Defendants' motion to transfer.
For the reasons set forth above, the Court will grant in part and deny in part Defendants' motion to dismiss for lack of personal jurisdiction. Defendants' motion to dismiss under Rule 12(b)2) will be granted as to Defendants Prominent Supplies, Inc. and Ky Tran, and will be denied as to Defendant Prominent Systems, Inc. The claims against Defendants Prominent Supplies and Ky Tran will be dismissed without prejudice. In addition, the Court will deny Defendants' motion to dismiss under Rule 12(b)(3) for improper venue as to Defendant Prominent Systems, and will deny said motion as moot with regard to Defendants Prominent Supplies and Ky Tran. Finally, the Court will deny Defendants' motion to transfer.
An appropriate order will follow.
952 F. Supp. at 1124 (footnote omitted).