Vanity.com, Inc. v. Vanity Shop of Grand Forks, Inc., No. 3:2012cv02912 - Document 32 (N.D. Cal. 2012)
Court Description: ORDER DENYING MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND GRANTING TRANSFER OF VENUE TO THE DISTRICT OF ARIZONA 7 (Illston, Susan) (Filed on 10/4/2012)
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Vanity.com, Inc. v. Vanity Shop of Grand Forks, Inc. Doc. 32 1 2 3 IN THE UNITED STATES DISTRICT COURT 4 FOR THE NORTHERN DISTRICT OF CALIFORNIA 5 6 VANITY.COM, INC., No. C 12-02912 SI 7 Plaintiff, 8 9 United States District Court For the Northern District of California 10 11 v. VANITY SHOP OF GRAND FORKS, INC., Defendant. ORDER DENYING MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND GRANTING TRANSFER OF VENUE TO THE DISTRICT OF ARIZONA / 12 13 On September 21, 2012, the Court heard argument on the motion by defendant Vanity Shop of 14 Grand Forks, Inc. to dismiss plaintiff Vanity.com, Inc.’s first amended complaint for lack of personal 15 jurisdiction, or in the alternative, to transfer venue to the District of Arizona. Having considered the 16 arguments of counsel and the pleadings and papers on file, and for good cause shown, the Court 17 DENIES the motion to dismiss for lack of personal jurisdiction and GRANTS the motion to transfer 18 venue to the District of Arizona. 19 20 BACKGROUND 21 On June 5, 2012, plaintiff Vanity.com, Inc. (“Vanity.com”) filed this suit against defendant 22 Vanity Shop of Grand Forks, Inc. (“Vanity Shop”) seeking declaratory judgment on the following 23 issues: (1) that plaintiff did not infringe defendant’s trademark; (2) that plaintiff did not engage in unfair 24 competition; (3) that plaintiff did not violate the Anti-cybersquatting Consumer Protection Act; and (4) 25 that plaintiff is the rightful holder of the “vanity.com” domain name. See First Amended Complaint 26 (“FAC”). Plaintiff also claims reverse domain name hijacking per 15 U.S.C. § 1114(2)(D)(v), common 27 law unfair competition, and unfair competition per Cal. Bus. & Prof. Code § 17200. Id. Dockets.Justia.com 1 In 1995, plaintiff Vanity.com registered the domain name “vanity.com” with GoDaddy.com, 2 LLC (“GoDaddy.com”), Rodenbaugh Decl.1 Ex. A. Plaintiff Vanity.com also owns a federal trademark 3 registration for the vanity.com trademark, which it uses in connection with “on-line journals, namely 4 blogs featuring cosmetic procedures and surgery related content,” FAC ¶ 6, but apparently does not offer 5 goods or services for sale on the site. Tease Decl. Ex. A. Vanity Shop is a privately owned specialty 6 retailer of women’s and girls’ apparel, with retail stores and a website from which it advertises and sells 7 apparel. Motschenbacher Decl. ¶ 2-3, 11. It registered “vanityshops.com” and “evanity.com” with 8 GoDaddy.com in 1998 and 2004, respectively. Rodenbaugh Decl. Ex. A. GoDaddy.com is a registrar with the Internet Corporation for Assigned Names and Numbers 10 United States District Court For the Northern District of California 9 (“ICANN”). Tease Decl. Ex. B. All ICANN registrants must comply with the Uniform Domain Name 11 Dispute Resolution Policy (“UDRP”), a private contract that outlines domain name dispute procedures. 12 Rodenbaugh Decl. Ex. G. On May 10, 2012, Vanity Shop, the defendant here, filed a complaint with 13 the National Arbitration Forum (“NAF”) in accordance with UDRP paragraph 4(a), alleging misuse of 14 the domain name by Vanity.com. Id. at Ex. F.2 On June 5, 2012, before the NAF issued its decision, 15 Vanity.com filed the instant complaint in this district, seeking inter alia, declaratory judgment on similar 16 misuse claims. Compl. ¶ 31-48. On June 20, 2012, the NAF granted judgment for Vanity Shop and 17 ordered the transfer of the vanity.com domain name to defendant. Tease Decl. Ex. B. 18 On July 3, 2012 Vanity.com filed another suit, this one in the District of Arizona, seeking 19 declaratory relief, common law unfair competition, unfair competition under Cal. Bus. & Prof. Code 20 § 17200, and injunctive relief under 15 U.S.C. § 1114(2)(D)(v). See Vanity.com, Inc. v. Vanity Shop 21 of Grand Forks, Inc., Case no. 2:12-cv-01446-JAT, (D. Ariz., July 3, 2012), Pl.’s Compl., ECF No. 1.3 22 23 24 25 26 27 1 Defendant raises various evidentiary objections to Michael Rodenbaugh’s declaration. Dkt. 25. The Court need not and does not rely on any of the disputed material in order to resolve the instant motion. Therefore, the Court makes no ruling on defendant’s objections. 2 The FAC ¶ 19, 36 states that defendant filed the NAF complaint on May 15, 2012. However, the NAF decision dates the filing of the complaint as May 10, 2012. Rodenbaugh Decl. Ex. F. 3 Pursuant to Federal Rule of Evidence 201 and defendant’s requests (Dkts. 10, 24), the Court hereby takes judicial notice of the proceeding filed in Arizona (“Arizona action”). 2 1 On August 2, 2012, Vanity Shop filed a motion under Fed. R. Civ. P. 12(b)(2), seeking dismissal 2 for lack of personal jurisdiction, or alternatively transfer of venue under 28 U.S.C. § 1404(a) to the 3 District of Arizona. Notice of Def.’s Mot. to Dismiss ¶ 1-3. Vanity Shop argues that the Court lacks 4 personal jurisdiction because Vanity Shop does not have, and never has had, any stores, physical 5 facilities, employees, or bank accounts located in California, nor is it registered to do business there. Id.; 6 Motschenbacher Decl. ¶ 4-9. Vanity Shop also argues alternatively that the case should be transferred 7 to the District of Arizona because the parties consented to venue there, for convenience, and because 8 of the pending Arizona action. Mot. to Dismiss at 3-4, 11-12. 9 LEGAL STANDARD United States District Court For the Northern District of California 10 11 1. Personal Jurisdiction 12 Personal jurisdiction over a non-resident defendant may exist if the defendant has either a 13 continuous and systematic presence in the state (general jurisdiction), or minimum contacts with the 14 forum state such that the exercise of jurisdiction “does not offend traditional notions of fair play and 15 substantial justice” (specific jurisdiction). Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) 16 (citation omitted). Where there is no federal statute applicable to determine personal jurisdiction, a 17 district court should apply the law of the state where the court sits. See Schwarzenegger v. Fred Martin 18 Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). California law requires only that the exercise of personal 19 jurisdiction comply with federal due process requirements. See id. at 800-01. 20 “A defendant whose contacts with a state are ‘substantial’ or ‘continuous and systematic’ can 21 be haled into court in that state in any action, even if the action is unrelated to those contacts.” Bancroft 22 & Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082, 1087 (9th Cir. 2000) (citing Helicopteros 23 Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984)). “This is known as general 24 jurisdiction. The standard for establishing general jurisdiction is fairly high and requires that the 25 defendant’s contacts be of the sort that approximate physical presence.” Id. (citations omitted). “Factors 26 to be taken into consideration are whether the defendant makes sales, solicits or engages in business in 27 the state, serves the state’s markets, designates an agent for service of process, holds a license, or is incorporated there.” Id. 3 In order for a court to exert specific jurisdiction in accordance with due process, a nonresident 2 defendant must have “‘minimum contacts’ with the forum state such that the assertion of jurisdiction 3 ‘does not offend traditional notions of fair play and substantial justice.’” Pebble Beach Co. v. Caddy, 4 453 F.3d 1151, 1155 (9th Cir. 2006) (quoting Int’l Shoe, 326 U.S. at 315). The Ninth Circuit employs 5 a three-part test to determine whether the defendant has such minimum contacts with a forum state. 6 First, the “nonresident defendant must do some act or consummate some transaction with the forum or 7 perform some act by which he purposefully avails himself of the privilege of conducting activities in 8 the forum,” thereby invoking the benefits and protections of the forum state. Cybersell, Inc. v. 9 Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997) (quoting Ballard v. Savage, 65 F.3d 1495, 1498 (9th 10 United States District Court For the Northern District of California 1 Cir. 1998)). Second, the claim must “arise[] out of or result[] from the defendant’s forum-related 11 activities,” and third, the exercise of personal jurisdiction over the defendant must be reasonable. 12 Pebble Beach Co., 453 F.3d at 1155. The plaintiff bears the burden of proving the first two conditions. 13 Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008). If the plaintiff carries this burden, “the 14 defendant must come forward with a ‘compelling case’ that the exercise of jurisdiction would not be 15 reasonable.” Id. (citing Schwarzenegger, 374 F.3d at 802). 16 If a district court acts on the defendant’s motion to dismiss without holding an evidentiary 17 hearing, the plaintiff “need only demonstrate facts that if true would support jurisdiction over the 18 defendant.” Id. at 1129 (citation omitted). Unless directly contravened, the plaintiff’s version of the 19 facts is taken as true, and conflicts between the facts contained in the parties’ affidavits must be resolved 20 in the plaintiff’s favor for purposes of deciding whether a prima facie case for personal jurisdiction 21 exists. Id. (citation omitted); see also Bancroft, 223 F.3d at 1087. 22 23 2. Transfer of Venue 24 “For the convenience of parties and witnesses, in the interest of justice, a district court may 25 transfer any civil matter to any other district or division where it might have been brought.” 28 U.S.C. 26 § 1404(a). The purpose of § 1404(a) is to “prevent the waste of time, energy, and money and to protect 27 litigants, witnesses and the public against unnecessary inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (internal citations and quotation omitted). A motion for transfer lies 4 1 within the broad discretion of the district court, and must be determined on an individualized basis. See 2 Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). 3 Courts evaluate the following factors to determine which venue is more convenient to the parties 4 and the witnesses: (1) plaintiff’s choice of forum, (2) convenience of the parties, (3) convenience of the 5 witnesses, (4) ease of access to the evidence, (5) familiarity of each forum with the applicable law, (6) 6 feasibility of consolidation with other claims, (7) any local interest in the controversy, and (8) the 7 relative court congestion and time of trial in each forum. See Williams v. Bowman, 157 F. Supp. 2d 8 1103, 1106 (N.D. Cal. 2001); see also Jones v. GNC Franchising Inc., 211 F.3d 495, 498–99 (9th 9 Cir.2000). The Court has broad discretion to address these factors based on the particular facts of each United States District Court For the Northern District of California 10 case. E. & J. Gallo Winery v. F. & P. S.p.A., 899 F. Supp. 465, 466 (E.D. Cal. 1994). 11 DISCUSSION 12 13 1. PERSONAL JURISDICTION 14 Although Vanity.com asserts that the Court can exercise general jurisdiction because of Vanity 15 Shop’s general business presence, the Court need not address general jurisdiction, which has an 16 “exacting standard,” because the Court finds that Vanity Shop’s sales and advertising directed at 17 California give rise to specific jurisdiction. Schwarzenegger, 374 F.3d at 801. 18 Vanity Shop’s contacts with customers in California satisfies the “purposefully avails” standard 19 articulated by the Ninth Circuit. Cybersell, 130 F.3d at 418. Vanity Shop admits that “total sales to 20 customers in California have been approximately 0.02% of [our] total sales.” Motschenbacher Decl. 21 ¶ 11. Vanity Shop also admits that it “does not direct its online advertising at California any more than 22 any other state.” Id. Thus, Vanity Shop’s sales and advertising constitute 1) intentional acts 2) 23 expressly aimed at California through its online interactive website that allegedly 3) harmed Vanity.com 24 in the form of economic loss from having its domain name misused in California. While these sales may 25 be small, it cannot be said that they are not purposefully directed at California. 26 Vanity Shop argues that merely selling to California customers via its website is insufficient to 27 confer personal jurisdiction. The Court disagrees. Vanity Shop’s website is not merely a passive website, it is interactive, allowing shoppers to purchase items online. Motschenbacher Decl. ¶ 11; see 5 Brayton Purcell LLP, 606 F.3d at 1129. Websites with online advertising are interactive so long as they 2 have “something more,” such as conducting commercial activity over the internet with forum residents, 3 encouraging residents of the forum state to access the website, or earning income from residents in the 4 forum state. Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 419 (9th Cir. 1997). In short, interactive 5 websites require a “sliding scale analysis,” Boschetto, 539 F.3d at 1018, where “the likelihood that 6 personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality 7 of commercial activity that an entity conducts over the Internet.” Cybersell, Inc., 130 F.3d at 419. Here, 8 Vanity Shop set out to engage with California customers through its website, where it sells goods and 9 services, advertises, and presumably ships those goods to California customers and provides customer 10 United States District Court For the Northern District of California 1 support and other services necessary to completing online transactions. Motschenbacher Decl. ¶ 9-11. 11 Given the nature and quality of these contacts, Vanity Shop has purposely availed itself of personal 12 jurisdiction in California. 13 The Court also finds that Vanity.com’s claims arise out of defendant’s forum-related activities 14 because Vanity Shop’s dealings with California customers enable it to profit from its alleged domain 15 name misuse. Lastly, because Vanity Shop has purposefully injected itself in the stream of commerce 16 in California, exercise of specific jurisdiction comports with fair play and substantial justice. 17 CollegeSource, Inc., 653 F.3d at 1079. 18 19 2. TRANSFER OF VENUE 20 District courts have discretion in granting transfer. Williams v. Bowman, 157 F. Supp. 2d 1103, 21 1106 (N.D. Cal. 2001). In this case, plaintiff apparently filed an unauthorized suit in this Court, 22 presumably to avail itself of the “first-to-file rule,” before filing the appropriate lawsuit in the District 23 of Arizona. As such, the Court finds that transfer to the District of Arizona is appropriate. 24 25 A. The parties consent to venue in Arizona. 26 According to the UDRP, the private contract that governs ICANN-registered domain name 27 disputes, either party can unilaterally file a complaint with an ICANN-approved administrative dispute resolution provider. Rodenbaugh Decl. Ex. H. The moving party chooses the proper venue, which is 6 1 either the location of the registrar or the respondent’s location, and is determined by the complainant 2 at the time it files the UDRP complaint. Id. Within 10 days of a decision in this UDRP-required dispute 3 proceeding, the respondent may pursue legal action in the venue chosen by the complainant. Id. Here, Vanity Shop lodged its complaint online with the NAF, which the NAF resolved remotely. 5 Tease Decl. ¶ 3, 5, Ex. B. Vanity Shop selected Arizona, GoDaddy.com’s location, as its chosen venue 6 when it filed the UDRP complaint, and thus, both parties have consented to venue in Arizona. Tease 7 Decl. ¶ 4, Ex. A. Moreover, Vanity.com filed a complaint seeking declaratory judgment in the Northern 8 District of California during the administrative proceeding, then subsequently filed a complaint with 9 identical claims in the District of Arizona following the NAF decision. See Case no. 2:12-cv-01446- 10 United States District Court For the Northern District of California 4 JAT (D. Ariz., July 3, 2012), ECF No. 1. However, Vanity.com does not challenge the validity of 11 underlying agreement, the UDRP, which allowed Vanity Shop to choose Arizona. Therefore, venue is 12 proper is Arizona because that is the location to which the parties agreed. 13 14 B. The “first to file” rule. 15 The “first-to-file rule,” also known as the federal comity doctrine, is a discretionary doctrine that 16 allows a federal court to decline judgment on an issue that is already properly before another district. 17 Church of Scientology of California v. U.S. Dept. of Army, 611 F.2d 738, 749 (9th Cir. 1979). The 18 purpose of the federal comity doctrine is twofold: 1) to further judicial efficiency by consolidating 19 identical claims in one forum, and 2) “to avoid the embarrassment of conflicting judgments.” Id. at 750. 20 Ordinarily, the first-to-file rule would counsel against transfer to Arizona because plaintiffs filed in this 21 Court first. However, a look into the course of this litigation and the Arizona action demonstrates that 22 plaintiffs are not entitled to benefit from such discretion. In particular, Vanity.com moved to stay the 23 Arizona action “until an identical, prior-filed action in the Northern District of California is resolved.” 24 Case no. 2:12-cv-01446-JAT (D. Ariz., Aug. 15, 2012), Pl.’s Mot. to Stay, 1:22-24, ECF No. 18. In 25 that motion for stay, Vanity.com states “[a]pplying the comity doctrine, also known as the “first to file” 26 rule, this Court should grant Plaintiff’s Motion for Stay.” Id. at 4:11-12. However, it was Vanity.com’s 27 choice to file a lawsuit in this Court before the NAF had a chance to issue a decision. Vanity.com cannot benefit from this Court’s discretion where it chose to file a lawsuit here first, instead of waiting 7 1 for a NAF decision, and challenging that decision in the contractually chosen forum. 2 C. 3 Several additional factors weigh in favor of transfer to the District of Arizona. First, venue in 4 Arizona is likely more convenient for the witnesses, in light of Vanity Shop’s license to conduct 5 business in Arizona and employee and agent for service of process there. Motschenbacher Decl. ¶ 9-11. 6 Vanity Shop asserts that a “substantial amount of evidence will already be in Arizona” as a result of the 7 UDRP proceedings. Mot. to Dismiss at 12. Also, GoDaddy.com, the registrar for the disputed domain 8 names, is located in Arizona. Rodenbaugh Decl. Ex. F. 9 United States District Court For the Northern District of California 10 Additional Factors. Given Vanity.com’s consent to Arizona, the similar pending Arizona action, and in light of these additional factors, the Court holds that venue in the District of Arizona is appropriate. 11 CONCLUSION 12 13 14 For the foregoing reasons the Court hereby DENIES defendant’s motion to dismiss for lack of personal jurisdiction, and GRANTS defendant’s motion to transfer venue. 15 16 IT IS SO ORDERED. 17 18 Dated: October 4, 2012 SUSAN ILLSTON United States District Judge 19 20 21 22 23 24 25 26 27 8
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