REPORT and RECOMMENDATION

CYNTHIA REED EDDY, Magistrate Judge.

I. RECOMMENDATION

It is respectfully recommended that defendants' motion to dismiss for improper venue (ECF No. 7) be GRANTED and that the case be dismissed without prejudice.

II. REPORT

A. BACKGROUND

Nutrition Distribution LLC ("plaintiff") initiated this action by filing a complaint against The Muscle Store, Inc. ("Muscle Store") and its owners—Lisa A. Holland and Vincent Holland ("Hollands")—(collectively "defendants") for alleged false advertising of certain products (the "products") in violation of section 43(a)(1)(B) the Lanham Act. (ECF No. 1 ¶ 6). Plaintiff alleges that defendants sell various dietary supplements through an online retail website, and that when defendants market these products as performance enhancers with physical benefits they mislead the consumer and make false statements concerning purported health risks. Plaintiff is an Arizona limited liability company. (Id. at ¶ 10). Muscle Store is a Florida corporation with its principal place of business in Bethlehem, Pennsylvania. (Id. at ¶ 11). The Hollands are residents of Nazareth, Pennsylvania. (Id. at ¶¶ 12, 13).

We take judicial notice of the public records in prior litigation involving the parties. Initially plaintiff sued defendants in the United States District Court for the Southern District of California on June 19, 2017. (ECF No. 8-1 at 5-16). That court issued an order to show cause why the action should not be transferred to the United States District Court for the District of Arizona for the convenience of the parties and witnesses, and in the interest of justice. (Id. at 18-19). Neither party filed a response,1 and the court later ordered the case be transferred to the United States District Court for the District of Arizona. (Id. at 19).

Defendants then requested plaintiff transfer the case to the Eastern District of Pennsylvania, where they actually reside, but plaintiff refused. On July 21, 2017, defendants filed a motion to dismiss the Arizona action on the grounds that the proper venue for this action is the Eastern District of Pennsylvania. On October 26, 2017, the Arizona district court, after summarizing repeated efforts on the part of defendants to explain its lack of contacts with Arizona to plaintiff via correspondence, found that it lacked jurisdiction over defendants and dismissed the case without prejudice, in lieu of transfer. (Id. at 37-40). The Arizona Court explained that dismissal in lieu of transfer was appropriate because plaintiff understood that venue was improper but refused to stipulate to transfer the case to the appropriate district in Pennsylvania as requested by defendants. (Id.) The Arizona court stated:

(Id. at 40).

Thereafter, plaintiff filed the present complaint in this Court on November 14, 2017. (ECF No. 1). Defendants notified plaintiff that it had filed in the wrong judicial district, but—once again—plaintiff refused to stipulate to transfer the case. (ECF Nos. 8 at 3, 8-3). Consequently, defendants filed a Rule 12(b)(3) motion seeking dismissal or transfer to the Eastern District of Pennsylvania (the "Eastern District"). (ECF No. 7). Defendants' motion has been fully briefed, (ECF Nos. 8; 17), and plaintiff has been given an opportunity to respond. (ECF No. 16). Accordingly, the matter is ripe for consideration.

B. LEGAL STANDARDS

Under Rule 12(b)(3) of the Federal Rules of Civil Procedure, a defendant may move for dismissal or transfer if venue is improper. Fed. R. Civ. P. 12(b)(3). In ruling on a Rule 12(b)(3) motion, "[a]ll well-pleaded allegations in the complaint bearing on the venue question generally are taken as true, unless contradicted by the defendant's affidavits." Bockman v. First Am. Mktg. Corp., 459 Fed. App'x 157, 158 n.1 (3d Cir. 2012) (quoting 5B Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE § 1352, at 324 (3d ed. 2004). "The `defendant[s] . . . bear the burden of showing improper venue.'" Id. at 160 (quoting Myers v. Am. Dental Ass'n, 695 F.2d 716, 724-25 (3d Cir. 1982). "In federal court, venue questions are governed either by 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406." Jumara v. State Farm Ins. Co., 55 F.3d 873, 878 (3d Cir. 1995). Section 1406 "applies where the original venue is improper and provides for either transfer or dismissal of the case." Id. Section 1404(a) "provides for the transfer of a case where both the original and the requested venue are proper." Id.

C. DISCUSSION

Defendants contest the propriety of venue in this district and seek to either have the case dismissed, or transferred to the Eastern District under 28 U.S.C § 1406(a). (ECF No. 7). Alternatively, they argue that even if venue is proper, the Court should nevertheless transfer the case to the Eastern District under 28 U.S.C. § 1404(a). (Id.). In order to decide whether dismissal or transfer is appropriate the Court must first determine if venue is proper in this district.

The propriety of venue is generally governed by 28 U.S.C. § 1391. Specifically, § 1391(b) provides that a civil action may be brought in

28 U.S.C. § 1391(b). In the complaint, plaintiff alleges that venue is proper under 28 U.S.C. § 1391(b)(2) because a substantial part of the events or omissions which give rise to the claim occurred in this district. (ECF No. 1 ¶ 9). Alternatively, plaintiff avers, venue is proper under 28 U.S.C. § 1391(b)(3). (Id.). For the reasons that follow, the Court disagrees.

1. Venue is not proper in this district under § 1391(b)(2)

Section 1391(b)(2) provides that venue is proper in "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred. . . ." 28 U.S.C. § 1391(b)(2). This provision "favors the defendant in a venue dispute by requiring that the events or omissions supporting a claim be `substantial[,]' . . . so that a defendant is not haled into a remote district having no real relationship to the dispute." Cottman Transmission Sys., Inc.v. Martino, 36 F.3d 291, 294 (3d Cir. 1994). When evaluating "whether events or omissions giving rise to the [plaintiff's] claims are substantial, it is necessary to look at the nature of the dispute." Id. at 295. And "[t]he test for determining venue" under § 1391(b)(2) "is not the defendant's `contacts' with a particular district, but rather the location of those `events or omissions giving rise to the claim.'" Id. at 294.

Based on the foregoing principles, the starting point of the Court's analysis is the nature of the dispute which, in this case, is based on alleged violations of section 43(a)(1)(B) of the Lanham Act. (ECF No. 1 ¶¶ 5, 38). That section "provides civil liability for any person who `uses in commerce' any false or misleading description or representation of fact which in commercial advertising misrepresents the nature, characteristics, or qualities of any person's services or commercial activities." Highmark, Inc. v. UPMC Health Plan, Inc., 276 F.3d 160, 165 (3d Cir. 2001) (quoting 15 U.S.C. § 1125(a)(1)(B)). Plaintiff avers that defendants falsely advertise the alleged products in violation of the Lanham Act. (ECF No. 1 ¶¶ 6, 38). In the complaint, however, plaintiff fails to cite to any substantial events or omissions—related to the action complained of, i.e., false advertising—that occurred in this district. Defendants, on the other hand, have submitted affidavits which reflect that they: (1) do not ship any significant products to this district; (2) do not own any stores in this district; and (3) do not market to consumers in this district. (ECF No. 8-2). This evidence demonstrates that the events or omissions giving rise to plaintiff's claim did not occur in this district.

Instead of rebutting defendants' evidence, plaintiff relies on defendants' interactive website to argue that their "conduct occurred nationwide, much less this district." (ECF No. 16 p. 5). This argument, however, is untenable for two reasons. First, it is well established in this circuit that the mere operation of an interactive website is not even sufficient to confer jurisdiction over a defendant, let alone establish the propriety of venue. Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 451-455 (3d Cir. 2003) (operation of interactive internet website was not sufficient to support specific personal jurisdiction in trademark infringement case without "something more" showing intentional interaction with forum state).

Second, as evidenced by one of defendants' affidavits, only a single resident of this district has purchased the alleged products through the website. (ECF No. 17-1 ¶ 2). Therefore, even after accounting for defendants' website, the record demonstrates that, at best, "[e]vents or omissions that might only have some tangential connection with the dispute in litigation" occurred in this district. Cottman, 36 F.3d at 294. In sum, defendants have satisfied their burden of showing improper venue by offering evidence that the alleged false advertising did not occur in this district, and plaintiff has failed to rebut that evidence. Accordingly, venue is not proper in this district under § 1391(b)(2).

2. Venue is not proper in this district under § 1391(b)(3)

Section 1391(b)(3) states that "if there is no district in which an action may otherwise be brought as provided in this section," venue is proper in "any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action." 28 U.S.C. § 1391(b)(3). The United States Supreme Court has explained that

Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 56-57 (2013;) (quoting 28 U.S.C. 1391(b)(3)). In the present case, however, this district is not a proper venue under § 1391(b)(3) because there is a district in which this action may be properly brought under § 1391(b)(1).

Section 1391(b)(1) provides that venue is proper in "a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located. 28 U.S.C. § 1391(b)(1). Under § 1391(c), a natural person is "deemed to reside in the judicial district in which that person is domiciled." 28 U.S.C. 1391(c)(1). The Hollands, who are the individual defendants in this case, live in Nazareth, Pennsylvania which is in the Eastern District of Pennsylvania. Therefore, for venue purposes, the Hollands are residents of Pennsylvania—and more specifically—the Eastern District of Pennsylvania.

To determine whether the Muscle Store—the corporate defendant in this case—is a resident of Pennsylvania, the Court turns to § 1391(d) which provides that:

28 U.S.C. § 1391(d). The Court, however, need not engage in a detailed analysis under § 1391(d) to ascertain the specific judicial district in which the Muscle Store resides. The focus of the Court's § 1391(d) inquiry is limited to whether the Muscle Store is subject to personal jurisdiction in Pennsylvania. If the answer to that question is yes, then the Muscle Store is a resident of Pennsylvania for venue purposes.

It is well established that "[t]he citizenship of a corporation is both its state of incorporation and the state of its principal place of business." GBForefront, L.P. v. Forefront Mgmt. Grp., LLC, 888 F.3d 29, 34 (3d Cir. 2018) (citing Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010) Here, the record reflects that, although it is incorporated in Florida, the Muscle Store is maintains its principal place of business in Bethlehem, Pennsylvania. The Muscle Store is, therefore, a citizen of both Florida—its state of incorporation, and Pennsylvania—the state of its principal place of business. As a citizen of Pennsylvania, the Muscle Store is subject to personal jurisdiction in Pennsylvania. Accordingly, for purposes of 1391(b)(1), the Muscle Store is a resident of Pennsylvania under § 1391(d).

Based on the foregoing, the Court concludes that all defendants are residents of Pennsylvania. Therefore, this action maybe brought in the Eastern District—where the Hollands reside—under § 1391(b)(1). Accordingly, this district is not a proper venue for this action under § 1391(b)(3).

3. Dismissal is warranted under 28 U.S.C § 1406(a)

Under 28 U.S.C. § 1406, "[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." 28 U.S.C. § 1406(a). Because venue in this district is not proper under "the three categories set out in § 1391(b) . . . the case must be dismissed or transferred under § 1406(a)." Atlantic Marine Const., 571 U.S. at 56. "Transfer in lieu of dismissal is generally appropriate to avoid penalizing plaintiffs by `time-consuming and justice-defeating technicalities.'" Bockman v. First Am. Mktg. Corp., 459 F. App'x 157, 162 n.11 (3d Cir. 2012) (quoting Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467 (1962)).

This district is the third improper venue where defendants have been forced to defend themselves. Exacerbating the situation is the fact that despite being notified by defendants of the proper venue, plaintiff has twice refused to stipulate to transfer. Based on this record, the Court concludes that defendants' motion to dismiss does not seek to penalize plaintiff based on mere technicalities and that transfer would not be in the interest of justice. Accordingly, the case must be dismissed under § 1406(a).

D. CONCLUSION

Based on the foregoing reasons, it is respectfully recommended that defendants' motion to dismiss for improper venue (ECF No. 7) be GRANTED and that this action be dismissed without prejudice. Fed. R. Civ. P. 41(b).

In accordance with the Magistrates Act, 28 U.S.C. § 636(b)(1), and Local Rule 72, the parties are allowed fourteen (14) days from the date of service to file written objections to this report and recommendation. Any party opposing the objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to timely file objections will waive the right to appeal. Brightwell v. Lehman, 637 F.3d 187, 193 n.7 (3d Cir. 2011).