Knoll, Inc. v. Modway, Inc., No. 5:2019cv02238 - Document 69 (C.D. Cal. 2020)
Court Description: ORDER GRANTING IN PART DEFENDANTS' MOTION TO TRANSFER VENUE UNDER 28 U.S.C. § 1404(a), AND VACATING AS MOOT DEFENDANTS' MOTION TO DISMISS UNDER RULE 12(b)(6) 32 34 by Judge Dean D. Pregerson. Defendants' motion to transf er to the District Court of New Jersey is granted. The court does not reach issue of personal jurisdiction in this forum or issues related to Defendants' motion to dismiss. The court orders this action transferred to the District of New Jersey. The court further vacates Defendants' Motion under Rule 12(b)(6), Dtk. 34 . Case transferred to the District of New Jersey. Original file, certified copy of transfer order and docket sheet sent. ( MD JS-6. Case Terminated. ) (lom)
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Knoll, Inc. v. Modway, Inc. Doc. 69 1 O JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 KNOLL, INC., a Delaware corporation, 12 Plaintiff, 13 14 15 16 17 v. MODWAY, INC., a New York Corporation, LEXMOD, INC., a Florida Corporation, AND MENACHEM T. GREISMAN, an Individual, 18 19 20 21 22 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 5:19 cv 2238 DDP (SPx) ORDER GRANTING IN PART DEFENDANTS’ MOTION TO TRANSFER VENUE UNDER 28 U.S.C. § 1404(a), AND VACATING AS MOOT DEFENDANTS’ MOTION TO DISMISS UNDER RULE 12(b)(6) [Dkts. 32, 34] 23 24 Presently before the court are Defendants Modway, Inc., LexMod, Inc., and 25 Menachem T. Greisman’s Motion to Transfer Venue under 28 U.S.C. § 1404(a), 26 LexMod/Greisman’s Motion to Dismiss for Lack of Personal Jurisdiction, (Dkt. 32), and 27 Defendants’ Motion to Dismiss under Rule 12(b)(6). (Dkts. 32, 34.) Having considered 28 the submissions of the parties and heard oral argument, the court grants Defendants’ Dockets.Justia.com 1 2 3 4 5 Motion to Transfer in part, vacates as moot Defendants’ Motion to Dismiss under Rule 12(b)(6), and adopts the following order. I. BACKGROUND Plaintiff Knoll, Inc. (“Knoll” or “Plaintiff”) is a Delaware corporation with its principal place of business in Pennsylvania. (Dkt. 31, Second Amend. Compl. (“SAC”) ¶ 6 4.) Defendant Modway, Inc. (“Modway”) is a New York corporation with its principal 7 place of business in New Jersey. (Id. ¶ 5.) Defendant LexMod, Inc. (“LexMod”) is a 8 Florida corporation with its principal place of business in New Jersey. (Id. ¶ 6.) 9 Defendant Menachem T. Greisman (“Greisman”) is a resident and citizen of New York, 10 and “is the President of LexMod and CEO of Modway, and is listed as each entity’s 11 principal executive on the Florida and New York Secretary of State websites, 12 respectively.” (Id.) 13 Plaintiff alleges that it is “a global leader in the design and manufacture of 14 commercial and residential furniture, accessories, and coverings.” (Id. ¶ 8.) Plaintiff 15 owns the rights, title, and interests to various furniture designs, including the “Pedestal 16 Trade Dress,” “Executive Chair Trade Dress,” “Knoll Lounge Trade Dress,” “Bertoia 17 Trade Dress,” and the “Cyclone Trade Dress.” (Id. ¶¶ 13, 25, 32, 40, 49.) Plaintiff alleges 18 that it has “extensively advertised products” with the above trade dresses, and as a 19 result, “(a) the public has come to recognize and identify products bearing the [trade 20 dresses] as emanating from Knoll, (b) the public recognizes that products bearing the 21 [trade dresses] constitute high quality products that conform to the specifications created 22 by Knoll, and (c) the [trade dresses] ha[ve] established strong secondary meaning and 23 extensive goodwill.” (Id. ¶¶ 21, 26, 33, 41, 50.) 24 Plaintiff brings this action against Modway, LexMod, and Greisman (collectively, 25 “Defendants”) claiming (1) trade dress and trademark infringement under 15 U.S.C. § 26 1125(a), (2) false designation of origin and federal unfair competition under 15 U.S.C. § 27 1125(a), and (3) unfair competition under California Business & Professions Code § 28 2 1 2 3 4 5 17200, et seq. (Id. ¶ 1.) Plaintiff alleges that “Defendants have developed, manufactured, imported, advertised, and/or sold products . . . that use trade dress that is not only confusingly similar to [its trade dresses], but [are] a slavish copy of Knoll’s proprietary design.” (Id. ¶¶ 58, 67, 76, 85, 94.) Plaintiff asserts that the court has personal jurisdiction over Defendants because 6 Defendants operate “a west coast office and warehouse in Fontana, California,” “have 7 been selling and offering for sale infringing products in this judicial district, including 8 but not limited to selling infringing products directly to consumers and/or retailers in 9 this district and placing infringing products directly into the stream of commerce from 10 Defendants’ distribution warehouse in Fontana, California . . . .” (Id. ¶ 2.) Plaintiff alleges 11 on information and belief that “LexMod sells infringing products through its website 12 www.lexmod.com (‘LexMod Website’),” “that LexMod sells products into California and 13 to California residents through the LexMod Website and that LexMod fulfills at least 14 some of the orders . . . through Modway’s distribution warehouse in Fontana . . . .” (Id.) 15 Plaintiff also alleges on information and belief that “Greisman is the driving force and 16 guiding spirit behind Modway’s and LexMod’s sale of infringing products into 17 California,” and that “Greisman has and continues to routinely travel to California, 18 including to oversee the development and operation of Defendants’ warehouse in 19 Fontana, California.” (Id.) Plaintiff asserts that venue is proper in the Central District of California because 20 21 “Modway has an established place of business within this judicial district and each of the 22 Defendants has committed acts of infringement in this judicial district by selling and/or 23 offering to sell infringing products in this judicial district, and distributing infringing 24 products directly from Defendants’ distribution warehouse in Fontana, California.” (Id. 25 ¶ 2.) 26 27 28 Defendants presently move for transfer of venue under 28 U.S.C. § 1404(a) to the Southern District of New York or the District of New Jersey, and alternatively, if the 3 1 2 3 4 5 6 action remains in this district, for dismissal of Defendants LexMod and Greisman for lack of personal jurisdiction. (See Dkt. 32, (“Transfer Mot.”), at 1.) Defendants also move for dismissal under Rule 12(b)(6). (Dkt. 34, (“MTD”).) For the reasons discussed below, the court grants Defendants’ Motion to Transfer in part and does not reach the personal jurisdiction issue or Defendants’ motion to dismiss under Rule 12(b)(6). II. LEGAL STANDARD 7 8 jurisdiction and/or motions to dismiss.” Cohen v. Versatile Studios, Inc., No. 9 CV134121GAFMANX, 2013 WL 12130019, at *3 (C.D. Cal. Nov. 15, 2013) (citing Sinochem 10 Int’l Co. v. Malay. Int’l Shipping Corp., 549 U.S. 422, 435 36 (2007)). “For the convenience of 11 parties and witnesses, in the interest of justice, a district court may transfer any civil 12 action to any other district or division where it might have been brought.” 28 U.S.C. § 13 1404(a). “[D]istrict courts may hear motions on the issue of venue prior to issues of 14 As a threshold matter, a court determines first if venue in the requested district 15 would have been proper. See Saleh v. Titan Corp., 361 F. Supp. 2d 1152, 1155 (S.D. Cal. 16 2005). If so, the court must then balance the convenience of the parties, the convenience 17 of the witnesses, and the interests of justice. E. & J. Gallo Winery v. F. & P. S.p.A., 899 F. 18 Supp. 465, 466 (E.D. Cal. 1994). In the Ninth Circuit, relevant factors in assessing the 19 interests of justice include, but are not limited to: (1) the plaintiff’s choice of forum, (2) the 20 respective parties’ contacts with the forum, (3) the contacts relating to the plaintiff’s cause 21 of action in the chosen forum, (4) the differences in the costs of litigation in the two 22 forums, (5) the availability of compulsory process to compel attendance of unwilling 23 non party witnesses, (6) the ease of access to sources of proof, and (7) the state that is 24 most familiar with the governing law. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 99 25 (9th Cir. 2000). 26 27 28 “A district court has discretion to adjudicate motions for transfer according to an individualized, case by case consideration of convenience and fairness.” Id. at 498 4 1 2 3 4 5 (internal citations and quotations omitted). “The purpose of § 1404(a) is to prevent the waste of time, energy, and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense.” Metz v. U.S. Life Ins. Co. in City of New York, 674 F. Supp. 2d 1141, 1145 (C.D. Cal. 2009) (internal quotations and citations omitted). The moving party bears the burden of showing the balance of inconveniences 6 to it. E. & J. Gallo Winery, 899 F. Supp. at 466. 7 III. DISCUSSION 8 9 10 1. Whether this Action might have been brought in the Southern District of New York or the District of New Jersey The parties dispute whether this action could have been brought in New York or 11 New Jersey. Defendants contend that the first prong under the Section 1404(a) analysis is 12 satisfied because Defendant LexMod would consent to jurisdiction in New York and 13 alternatively, Defendant Greisman would consent to jurisdiction in New Jersey. 14 (Transfer Mot. at 7:20 21 (citing Creative Compounds, LLC v. S.A.N. Nutrition Corp., 2012 15 WL 13012706, *2 (C.D. Cal. Mar. 30, 2012); Dkt. 45, Reply at 2, n.1.) 16 Defendants’ consent to personal jurisdiction is insufficient to satisfy the first prong 17 of the Section 1404(a) analysis. “The phrase ‘where it might have been brought’ refers 18 solely to districts where [plaintiff] could have originally filed suit.” In re Bozic, 888 F.3d 19 1048, 1053 (9th Cir. 2018) (citing Hoffman v. Blaski, 363 U.S. 335, 344 (1960)). “[T]he power 20 of a District Court under § 1404(a) to transfer an action to another district is made to 21 depend not upon the wish or waiver of the defendant but, rather, upon whether the 22 transferee district was one in which the action ‘might have been brought’ by the 23 plaintiff.” Hoffman, 363 U.S. at 343 44. The proper inquiry, therefore, is whether the 24 Southern District of New York or the District of New Jersey have personal jurisdiction 25 over the defendants, subject matter jurisdiction over the claims, and whether venue 26 would be proper. See Cohen v. Versatile Studios, Inc., No. CV134121GAFMANX, 2013 WL 27 12130019, at *2 (C.D. Cal. Nov. 15, 2013) (“An action ‘might have been brought’ in a 28 5 1 2 3 4 5 jurisdiction that has personal jurisdiction over the defendants and subject matter jurisdiction over the claims and where venue is proper.”). There appears to be no dispute that both, the Southern District Court of New York and the District Court of New Jersey, have subject matter jurisdiction and that venue would be proper. The court is unable to determine whether the Southern District of New 6 York would have personal jurisdiction over LexMod. LexMod is a Florida corporation 7 with its principal place of business in New Jersey. (SAC ¶ 6.) LexMod is an “on line 8 furniture retailer [who] sells furniture nationwide through its own website as well as on 9 on line marketplaces like Amazon and Google Shopping.” (Dkt. 32 4, Greisman Decl. ¶ 10 7.) LexMod’s “online platforms are accessible to customers everywhere . . . .” (Id.) 11 However, the parties present insufficient evidence regarding LexMod’s contacts in the 12 Southern District of New York, and, as discussed above, LexMod’s consent to personal 13 jurisdiction is insufficient to satisfy the first prong of a Section 1404(a) analysis. 14 Defendants have not demonstrated that transfer to the Southern District of New York is 15 proper. 16 The District Court of New Jersey has personal jurisdiction over every Defendant. 17 Modway and LexMod have their principal place of business in New Jersey. Greisman is 18 the Chief Executive Officer of Modway and the manager of LexMod. (Greisman Decl. ¶¶ 19 2 3.) Greisman has an office in New Jersey where he works for Modway and LexMod. 20 (Id. ¶ 9.) Moreover, Plaintiff’s claims against Greisman stem from Greisman’s alleged 21 role as the “driving force and guiding spirit behind Modway’s and LexMod’s sale of 22 infringing products,” (SAC ¶ 2) and “personally direct[ing] the infringing acts alleged 23 herein, including by personally selecting which of Plaintiff’s unique furniture designs to 24 pirate and sell . . . .” (Id.) Plaintiff similarly argues in its submission that “the acts of the 25 corporate defendants are imputed to Greisman” because, amongst other things, the 26 “evidence suggests that Greisman is the alter ego of at least LexMod, if not Modway as 27 well.” (Dkt. 37, Opp. at 19 21.) 28 6 The court concludes that the District of New Jersey has personal jurisdiction over 1 2 3 every defendant. Accordingly, this action could have been brought in the District of New Jersey. 2. Plaintiff’s Choice of Forum 4 Substantial weight is generally accorded to plaintiff’s choice of forum, and a court 5 6 should not order a transfer unless the “convenience” and “justice” factors weigh heavily 7 in favor of venue elsewhere. Sec. Investor Prot. Corp. v. Vigman, 764 F.2d 1309, 1317 (9th 8 Cir. 1985); see also Decker Coal, 805 F.2d at 842 (“The defendant must make a strong 9 showing of inconvenience to warrant upsetting the plaintiff’s choice of forum”). 10 However, “[t]he plaintiff’s choice is given less weight where the plaintiff is a nonresident 11 or the chosen forum lacks any significant contact with the activities giving rise to the 12 litigation.” Catch Curve, Inc. v. Venali, Inc., No. CV 05 04820 DDP AJWX, 2006 WL 13 4568799, at *2 (C.D. Cal. Feb. 27, 2006). Plaintiff’s choice of forum is entitled to minimal weight here. Plaintiff and 14 15 Defendants have some market presence in Los Angeles. The parties have presented 16 evidence of the respective parties’ contacts and sales related to their businesses. 17 However, the court is unable to determine the significance of this evidence. The parties 18 appear to market, sell, and distribute their respective products nationwide and have not 19 presented evidence of the Los Angeles market as compared to other forums, including 20 New Jersey. Nonetheless, the court gives some deference to Plaintiff’s choice of forum 21 because some of the conduct complained of—the sale of infringing products—occurred 22 in this forum. The court gives less than “substantial deference” to Plaintiff’s choice of 23 forum, however, because Plaintiff is pursuing this action outside of its home forum. See 24 Monolithic Power Sys., Inc. v. Silergy Corp., No. CV138122MWFVBKX, 2014 WL 12586380, 25 at *1 (C.D. Cal. Apr. 14, 2014) (“[A] plaintiff’s choice to bring suit outside of its ‘home 26 forum’ is entitled to reduced deference.”). 27 /// 28 7 3. Convenience of the Parties 1 2 3 4 5 LexMod and Modway have their principal place of business in New Jersey and Greisman has an office in New Jersey where he conducts business for both entities. (SAC ¶¶ 5, 6.) Plaintiff does not appear to dispute that New Jersey would be a more convenient forum for all parties. (See Opp. at 7 8.) Instead, in opposition to this motion, 6 Plaintiff argues that litigating in this forum would not be more inconvenient for 7 Defendants than conducting business in this forum because Defendants have a 8 warehouse in Fontana, California. The argument is unpersuasive. The proper inquiry in 9 a Section 1404(a) analysis is the convenience of the parties to litigate the action—not 10 whether the inconvenience to conduct business is equal to the inconvenience to litigate, 11 as Plaintiff contends. Moreover, the fact that Defendant Modway has a Fontana 12 warehouse is not significant—there is no evidence that Modways’ principals or any party 13 witnesses are located at the Fontana warehouse. The Fontana warehouse is also 14 irrelevant to determine the convenience of LexMod and Greisman. 15 Plaintiff’s principal place of business is also on the East Coast in Pennsylvania. (Id. 16 ¶ 4.) Because Pennsylvania is closer to New Jersey than California, New Jersey is a more 17 convenient forum for Plaintiff. Because every party here is located on the East Coast, 18 New Jersey is significantly more convenient than Los Angeles. 19 20 21 The court concludes that the convenience of the parties weighs heavily in favor of transfer. 4. Convenience to the Witnesses 22 “Convenience of witnesses is often the most important factor in a § 1404(a) 23 transfer motion.” Costco Wholesale Corp. v. Liberty Mut. Ins. Co., 472 F. Supp. 2d 1183, 1193 24 (S.D. Cal. 2007). “In establishing inconvenience to witnesses, the moving party must 25 name the witnesses, state their location, and explain their testimony and its relevance.” 26 Id. (citing Carolina Cas. Co. v. Data Broad. Corp., 158 F. Supp. 2d 1044, 1049 (N.D. Cal. 27 2001); Williams v. Bowman, 157 F. Supp. 2d 1103, 1108 (N.D. Cal. 2001)). “The convenience 28 8 1 2 3 4 5 of non party witnesses is of primary importance.” Metz v. U.S. Life Ins. Co. in City of N.Y., 674 F. Supp. 2d 1141, 1147 (C.D. Cal. 2009). “[T]he court must consider not simply how many witnesses each side has and the location of each, but, rather, the court must consider the importance of the witnesses.” Saleh, 361 F. Supp. 2d at 1161. Defendants have identified potential third party witnesses in or near New York. 6 Specifically, Defendants contend that “Plaintiff has struggled to explain why its trade 7 dresses are nonfunctional” and argues that “historical collections of documents from the 8 deceased designers may contain critical evidence.” (Reply at 9:9 10.) These collections 9 and documents are located in museums and archives in New York City, Connecticut, 10 Washington, D.C., and Michigan. Plaintiff does not dispute that the museums and 11 archives Defendants have identified may contain relevant evidence that goes to the issue 12 of functionality. Instead, Plaintiff argues that there are similar museums in the Central 13 District that display the designs at issue. Plaintiff fails to explain, however, the relevance 14 of these displays as it pertains to the issue of functionality. 15 Defendants have also identified “New York based third parties like France & Son, 16 Manhattan Home Design, and Aeon Furniture sell products with designs just like 17 Knoll’s,” and argues that “these entities can provide evidence demonstrating a lack of 18 secondary meaning and/or Knoll’s failure to police its rights.” (Reply at 8:13 17; Transfer 19 Mot. at 11 12.) Plaintiff again does not dispute that these third parties may be relevant to 20 the dispute. Plaintiff instead argues that if Defendant is to be believed, that there are 21 many third party infringers throughout the country, then there are sure to be relevant 22 witnesses in Los Angeles. This bare statement is insufficient to demonstrate that the 23 third parties identified are unimportant or should otherwise be disregarded. 24 Furthermore, Plaintiff has not identified any witnesses located in Los Angeles that would 25 be relevant to any issue in this case. 26 27 28 9 Considering the third party witnesses identified by Defendants and the relevance 1 2 3 of those witnesses to this action, the court concludes that the convenience of witnesses weighs in favor of transfer. 5. Parties’ Contacts with the Forum, Contacts Relating to the Cause of Action in the Chosen Forum, & Local Interests in the Controversy 4 5 6 Modway and LexMod conduct business in this forum. Modway imports about a 7 third of its products through the Port of Long Beach. (Dkt. 32 3, Melamed Decl. ¶ 5.) 8 Modway also leases a Fontana warehouse where it stores and distributes its products to 9 the Western United States. (Id. ¶ 6.) Modway further markets its products to more than 10 100 retailers in California. (Stewart Decl. ¶ 2.) LexMod appears to not have any offices 11 or employees in California. However, LexMod contracts with Modway to fulfill 12 purchase orders LexMod receives online. (Greisman Decl. ¶ 8.) Greisman declares that 13 he has only travelled to California two or three times, and only once to visit Modway’s 14 Fontana warehouse. In any event, it is clear that at a minimum, Modway, LexMod, and 15 Plaintiff conduct significant sales in California. Therefore, the parties’ contacts with the 16 forum weigh against transfer. 17 The parties’ contacts with this forum related to the cause of action are less 18 apparent, however. This trade dress infringement action involves issues of design, 19 knowledge, willfulness and intent. (See SAC.) Defendants’ contacts with this forum 20 related to these issues appear to be nonexistent. Modway’s product development team, 21 consisting of five to six individuals, are all based in New Jersey. (Dkt. 32 3, Melamed 22 Decl. ¶ 3.) Modway asserts that its product designing is done exclusively in New Jersey. 23 (Id.) “Other than warehousing logistics, the Modway employees in California perform 24 no other function for the company.” (Id. ¶¶ 6 7.) Significantly, Plaintiff alleges that 25 “Greisman is the driving force and guiding spirit behind all decisions at both Modway 26 and LexMod, including the decision to copy” the trade dresses at issue. (SAC ¶ 60.) 27 Plaintiff does not appear to dispute that Greisman performs his work for LexMod and 28 10 1 2 3 4 5 6 7 8 9 Modway exclusively in New York and New Jersey. As discussed above, New Jersey is the principal place of business for both corporate defendants. Therefore, the parties’ contacts in this forum related to the cause of action are nonexistent and are instead, primarily located in the District of New Jersey. The parties’ contacts related to the cause of action and the respective forums’ interest in this action weigh in favor of transfer to the District of New Jersey. 6. Ease of Access of Proof, Costs of Litigation, Availability of Compulsory Process “Although developments in electronic conveyance have reduced the cost of document transfer somewhat, costs of litigation can still be substantially lessened if the 10 venue is in the district in which most of the documentary evidence is stored.” Park v. 11 Dole Fresh Vegetables, Inc., 964 F. Supp. 2d 1088, 1095 (N.D. Cal. 2013). Modway’s and 12 LexMod’s electronic servers are located in New Jersey. (Greisman Decl., ¶ 26; Melamed 13 Decl., ¶ 14.) Greisman’s documents are located in New York where he resides and in his 14 New Jersey office where he conducts work for Modway and LexMod. Additionally, 15 Defendants suggest that some of the archival documents may not exist in electronic 16 format and are also located on the East Coast. As discussed above, Plaintiff is located in 17 Pennsylvania and has not disputed that its documentary evidence is also primarily on 18 the East Coast in Pennsylvania. 19 20 21 22 The ease of access to proof and costs of litigation weigh in favor of transfer. 7. State Most Familiar with Governing Law The court agrees with the parties that this factor is neutral. 8. Court Congestion 23 The parties have not presented sufficient information to assess the court 24 congestion in the District Court of New Jersey, therefore, this factor is neutral. 25 After carefully weighing the convenience of the parties, witnesses, and the 26 interests of justice factors, the court concludes that this action should be transferred to the 27 District of New Jersey. 28 11 1 2 3 4 5 IV. CONCLUSION Defendants’ motion to transfer to the District Court of New Jersey is granted. The court does not reach issue of personal jurisdiction in this forum or issues related to Defendants’ motion to dismiss. The court orders this action transferred to the District of New Jersey. The court 6 further vacates Defendants’ Motion under Rule 12(b)(6), Dtk. 34. 7 IT IS SO ORDERED. 8 Dated: November 17, 2020 9 ___________________________________ 10 11 UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEAN D. PREGERSON 12
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