Williams Business Services, Inc. v. Waterside Chiropractic, Inc. et al, No. 3:2014cv05873 - Document 57 (W.D. Wash. 2016)
Court Description: ORDER granting in part and denying in part 44 Motion to Dismiss by Judge Benjamin H. Settle.(TG)
Download PDF
<![CDATA[
Williams Business Services, Inc. v. Waterside Chiropractic, Inc. et al Doc. 57 1 2 3 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 4 5 6 WILLIAMS BUSINESS SERIVCES, INC., 7 Plaintiff, 8 v. 9 WATERSIDE CHIROPRACTIC, INC., et 10 al., CASE NO. C14-5873 BHS ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS Defendants. 11 12 13 This matter comes before the Court on Defendants Waterside Chiropractic, Inc. 14 (“Waterside”), Dr. Michael J. Smith, and Dr. Sylvia M. Smith’s (collectively “Waterside 15 Defendants”) motion to dismiss for lack of personal jurisdiction (Dkt. 44). The Court has 16 considered the pleadings filed in support of and in opposition to the motion and the 17 remainder of the file and hereby grants in part and denies in part the motion for the 18 reasons stated herein. I. PROCEDURAL HISTORY 19 20 On October 31, 2014, Plaintiff Williams Business Services, Inc. (“Williams”) filed 21 a complaint against Defendants alleging numerous federal and state claims. Dkt. 1 22 (“Comp.”). ORDER - 1 Dockets.Justia.com 1 On February 11, 2016, the Waterside Defendants filed a motion to dismiss for lack 2 of personal jurisdiction. Dkt. 44. On February 29, 2016, Williams responded. Dkt. 52. 3 On March 4, 2016, the Waterside Defendants replied. Dkt. 56. 4 5 II. FACTUAL BACKGROUND Williams is a Washington corporation that designs, develops, and hosts websites. 6 Comp., ¶¶ 6, 14; Dkt. 53, Declaration of Douglas Williams (“Williams Dec.”), ¶ 8. 7 Waterside is a Florida corporation that provides chiropractic health care services across 8 six locations in Florida. Dkt. 45, Fourth Declaration of Dr. Michael Smith, ¶ 2. Dr. M. 9 Smith and Dr. S. Smith own and operate Waterside. Id., ¶ 1. 10 In 2013, Waterside’s agent, Penny Zencker, contacted Williams to inquire about 11 improving Waterside’s website. Williams Dec., ¶¶ 2–3. In September 2013, Dr. Sylvia 12 Smith contacted Williams in Washington to obtain a cost estimate and proposal for a new 13 Waterside website. Williams Dec., ¶ 6. Williams drafted and emailed a work proposal, 14 which in basic terms offered to redesign the website for $10,000. Comp., Exh 1. 15 Waterside reviewed the work proposal, negotiated and signed an amended proposal, and 16 faxed Williams the signed signature page of the proposal along with a copy of the initial 17 $5,000 payment. Comp., ¶¶ 18–21. 18 On March 27, 2014, Williams completed and published Waterside’s website. Id., 19 ¶ 30. On March 31, 2014, Williams sent an invoice to Waterside for the remaining 20 $5,000 payment and additional hosting fees. Id., ¶¶ 31–32. Williams contends that, 21 instead of paying the invoice, the Waterside Defendants continued to request changes and 22 alterations to the website. Id., ¶ 33. ORDER - 2 1 On June 1, 2014, Waterside paid Williams $2,500 instead of the full invoiced 2 amount of $5,000 plus hosting fees. Id., ¶ 46. In July 2014, Williams offered Waterside 3 an unlimited license to use the website in an effort to resolve the payment dispute 4 between the parties. Id., ¶55. Without receiving a response to its offer, Williams turned 5 over all the website materials it had to Waterside and stopped controlling the website. Id. 6 On September 8, 2014, Dr. Sylvia Smith rejected the unlimited license offer and 7 threatened to sue Williams if it did not perform additional work. Id., ¶¶ 57–58. 8 On September 24, 2014, Williams filed an application with the United States 9 Copyright Office to copyright the Waterside website. Comp., Exh. 4. On September 29, 10 2014, Williams’s counsel in Washington sent a letter notifying Waterside that Williams 11 owned the copyrights to the website and that Waterside only held a license to use the 12 website. Id., Exh. 7. October 9, 2014, Williams’s counsel sent a cease-and-desist letter 13 notifying Waterside that Williams terminated Waterside’s website license and 14 Waterside’s continued use would willfully infringe its copyright. Id., Exh. 9. It is 15 undisputed that Waterside did not respond to the letter, Williams successfully removed 16 the website from the original hosting company, Waterside engaged a new hosting 17 company to publish the same website, and Williams successfully removed the website 18 from the new hosting company. This lawsuit followed. 19 III. DISCUSSION 20 A. Standard 21 The plaintiff bears the burden of showing that the Court has personal jurisdiction 22 over all defendants. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th ORDER - 3 1 Cir. 2004). In the absence of an evidentiary hearing, the plaintiff need only make a prima 2 facie showing of personal jurisdiction. Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th 3 Cir. 2008). Uncontroverted allegations in the complaint must be taken as true, and 4 “[c]onflicts between the parties over statements contained in affidavits must be resolved 5 in the plaintiff’s favor.” Id. (quoting Schwarzenegger, 374 F.3d at 800). 6 Where, as here, there is no applicable federal statute governing personal 7 jurisdiction, the court applies the law of the state in which the court sits. See Fed. R. Civ. 8 P. 4(k)(1)(A); Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). 9 Washington’s long-arm statute extends jurisdiction over a defendant to the fullest extent 10 permitted by the Due Process Clause of the Fourteenth Amendment. See Wash. Rev. 11 Code § 4.28.185; Shute v. Carnival Cruise Lines, 113 Wn.2d 763, 771 (1989). The 12 relevant question, therefore, is whether the requirements of due process are satisfied by 13 the exercise of personal jurisdiction over the Waterside Defendants. 14 B. Due Process 15 Due process requires that to exercise jurisdiction over a non-resident defendant, 16 the defendant “have ‘certain minimum contacts’ with [the forum state] such that the 17 maintenance of the suit does not offend traditional notions of fair play and substantial 18 justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). In this case, Williams 19 asserts that the Court has specific jurisdiction over the Waterside Defendants. Dkt. 52 at 20 4. The Ninth Circuit has established a three-part test to determine whether a court has 21 specific personal jurisdiction over a defendant: 22 ORDER - 4 1 2 3 4 5 (1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 6 Schwarzenegger, 374 F.3d at 802. “The plaintiff bears the burden of satisfying the first 7 two prongs of the test.” Id. If the plaintiff does so, “the burden then shifts to the 8 defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be 9 reasonable.” Id. 10 For the purposeful action prong, Williams’s position is less than clear. Williams 11 asserts that the Waterside Defendants “purposefully directed” their activities at the forum 12 and that this satisfies “both the ‘purposeful availment’ and ‘purposeful direction’ prongs 13 of the jurisdictional test.” Dkt. 52 at 11–12. Williams, however, fails to recognize that 14 these are two different tests with different elements and that the separate tests require 15 different types of evidence. For example, “[a] showing that a defendant purposefully 16 availed himself of the privilege of doing business in a forum state typically consists of 17 evidence of the defendant’s actions in the forum, such as executing or performing a 18 contract there.” Schwarzenegger, 374 F.3d at 802. On the other hand, 19 20 [a] showing that a defendant purposefully directed his conduct toward a forum state . . . usually consists of evidence of the defendant’s actions outside the forum state that are directed at the forum, such as the distribution in the forum state of goods originating elsewhere. 21 22 ORDER - 5 1 Id. at 803. Williams fails to address these separate tests and fails to correlate evidence or 2 allegations satisfying each element of each test. With this failure in mind, the Court will 3 turn to each test. 4 1. 5 To be subject to specific jurisdiction, a defendant must have “purposefully Availed 6 avail[ed] itself of the privilege of conducting activities within the forum State, thus 7 invoking the benefits and protections of its laws.” Burger King Corp. v. Rudzewicz, 471 8 U.S. 462, 475 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). 9 “Purposeful availment” requires that the defendant “have performed some type of 10 affirmative conduct which allows or promotes the transaction of business within the 11 forum state.” Sinatra v. National Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988). In breach of contract cases, the mere existence of a contract with a party in the 12 13 forum state does not constitute sufficient minimum contacts for jurisdiction. Burger 14 King, 471 U.S. at 478. Instead, the Court must look to prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing to determine if the defendant’s contacts are substantial and not merely random, fortuitous, or attenuated. 15 16 17 Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir. 1990) (quoting Burger King, 471 U.S. at 18 479). 19 In this case, Williams has failed to show any substantial contacts by the Waterside 20 Defendants beyond the existence of the contract. While it is true that the Waterside 21 Defendants and its agent reached out to Williams in Washington, this contact as well as 22 ORDER - 6 1 the formation of the contract is insufficient to established sufficient minimum contacts. 2 Boschetto, 539 F.3d at 1017 (“[A] contract alone does not automatically establish 3 minimum contacts in the plaintiff’s home forum.”). Moreover, Williams’s performance 4 of his obligations under the contract in Washington is also insufficient because such 5 actions are not contacts by any defendant. Picot v. Weston, 780 F.3d 1206, 1213 (9th Cir. 6 2015) (“the fact that a contract envisions one party discharging his obligations in the 7 forum state cannot, standing alone, justify the exercise of jurisdiction over another party 8 to the contract.”). With regard to Williams’s ongoing obligations, they consist of 9 additional work by Williams and hosting fees by companies that were not Washington 10 businesses. These are not actions by defendants that promote business within 11 Washington. Therefore, the Court concludes that Williams has failed to show that the 12 Waterside Defendants purposely availed themselves of the privilege of conducting 13 activities within Washington. 14 15 2. Directed Williams has also asserted causes of action that sound in tort, including intentional 16 copyright infringement. In analyzing whether a court has specific personal jurisdiction 17 over a tort claim, the Court applies a three-part “effects” test derived from Calder v. 18 Jones, 465 U.S. 783 (1984). See Schwarzenegger, 374 F.3d at 803. Under this test, a 19 defendant purposefully directed his activities at the forum if he: “(1) committed an 20 intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant 21 knows is likely to be suffered in the forum state.” Id. (quoting Dole Food Co. v. Watts, 22 303 F.3d 1104, 1111 (9th Cir. 2002)). In applying this test, the Court must “look[ ] to the ORDER - 7 1 defendant’s contacts with the forum State itself, not the defendant’s contacts with persons 2 who reside there.” Walden, 134 S. Ct. at 1122. Thus, a “mere injury to a forum resident 3 is not a sufficient connection to the forum.” Id. at 1125. Rather, “an injury is 4 jurisdictionally relevant only insofar as it shows that the defendant has formed a contact 5 with the forum State.” Id. 6 In this case, the parties dispute the second element of the test, which is whether the 7 Waterside Defendants expressly aimed an intentional act at Washington. In Washington 8 Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 678–79 (9th Cir. 2012), the Ninth 9 Circuit concluded 10 11 12 that [defendant’s] alleged willful infringement of [plaintiff’s] copyright, and [defendant’s] knowledge of both the existence of the copyright and the forum of the copyright holder, is sufficient “individualized targeting” to establish the “something more” necessary to satisfy the express aiming requirement. 13 Subsequently, the Supreme Court issued its opinion in Walden, which some district 14 courts in this circuit have concluded either implicitly overruled Washington Shoe or, at 15 the least, put Washington Shoe’s continuing validity in question. See, e.g., Adobe Sys. 16 Inc. v. Cardinal Camera & Video Ctr., Inc., No. 15-CV-02991-JST, 2015 WL 5834135, 17 at *3–5 (N.D. Cal. Oct. 7, 2015) (“Washington Shoe cannot be reconciled with Walden 18 and . . . Walden effectively overrules Washington Shoe.”); Erickson v. Nebraska Mach. 19 Co., No. 15-CV-01147-JD, 2015 WL 4089849, at *3 (N.D. Cal. July 6, 2015) (“Walden 20 overrides Washington Shoe generally . . .”). Although the Ninth Circuit has not directly 21 addressed this issue, the court recently stated that it was “guided by the Supreme Court’s 22 recent decision in Walden,” which “reinforced the traditional understanding that our ORDER - 8 1 personal jurisdiction analysis must focus on the defendant’s contacts with the forum state, 2 not the defendant’s contacts with a resident of the forum.” Picot, 780 F.3d at 1214. 3 While it is unfortunate for the parties and the Court that there is not a clear answer 4 on this question, the language of Walden and Picot counsels against Williams’s 5 arguments in this case. Ignoring the Waterside Defendants’ contacts with Williams, there 6 is an absence of any evidence or allegation in the record regarding the Waterside 7 Defendants’ contacts with Washington. In fact, the parties expressly agreed that the 8 allegedly infringing website would target potential customers in Florida. Comp., Exh. 1 9 at 3 (“We are proposing a new website that is optimized to attract organic search traffic 10 from the northern Florida area and designed to get more new patients.”). As such, there 11 is no evidence of an intentional act expressly aimed at Washington that establishes 12 contact with Washington. Williams’s alleged injury is “not tethered to [Washington] in 13 any meaningful way” and “would follow [Williams] wherever [it] might choose to live or 14 travel.” Picot, 780 F.3d at 1215. Therefore, the Court concludes that Williams has failed 15 to show that personal jurisdiction exists over the Waterside Defendants. 16 C. Attorneys’ Fees 17 Having concluded that the Waterside Defendants are not subject to personal 18 jurisdiction in this state, the Court must consider whether they are entitled to their 19 reasonable attorney’s fees. 20 21 In the event the defendant is personally served outside the state on causes of action enumerated in this section, and prevails in the action, there may be taxed and allowed to the defendant as part of the costs of defending the action a reasonable amount to be fixed by the court as attorneys’ fees. 22 ORDER - 9 1 RCW 4.28.185(5). As the text reflects, however, an award is discretionary and not 2 mandatory. See Johnston v. Hines GS Props., Inc., 114 Wn. App. 1013, at *5 (2002). 3 In this case, the Court concludes that an award of fees in not appropriate. The 4 relevant legal issue is both complicated and not precisely settled. In such circumstances, 5 the Court is unable to fault Williams for contending that the Court had personal 6 jurisdiction over the Waterside Defendants in this forum. Therefore, the Court denies the 7 request for fees. 8 9 IV. ORDER It is hereby ORDERED that the Waterside Defendants’ motion to dismiss for lack 10 of personal jurisdiction (Dkt. 44) is GRANTED on the merits and DENIED as to the 11 request for fees. The Clerk shall close this case. 12 Dated this 6th day of May, 2016. A 13 14 BENJAMIN H. SETTLE United States District Judge 15 16 17 18 19 20 21 22 ORDER - 10
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
