Getagadget, LLC v. Jet Creations Inc.

Western District of Texas, txwd-6:2019-cv-00330

RESPONSE to Motion, filed by Getagadget, LLC, re [7] MOTION to Dismiss for Lack of Jurisdiction filed by Defendant Jet Creations Inc.

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United States District Court Western District of Texas Waco Division Getagadget, LLC Plaintiff v. Civil Action No. 6:19-cv-330-ADA Jet Creations Inc. Jury Trial Defendant Response to Motion to Dismiss under FRCP 12(b) Plaintiff Getagadget, LLC asks the Court to deny Defendant's Motion to Dismiss. Introduction 1. Plaintiff is Getagadget, LLC. 2. Defendant is Jet Creations Inc. 3. Defendant filed a Motion to Dismiss and asked the Court to dismiss the case for: lack of personal jurisdiction (under Fed. R. Civ. P. 12(b)(2)), improper venue (under Fed. R. Civ. P. 12(b)(3)), and failure to state a claim upon which relief can be granted (under Fed. R. Civ. P. 12(b)(6)). 4. Plaintiff files this response asking the Court to deny Defendant's Motion. Argument A. Lack of personal jurisdiction (under FRCP 12(b)(2)) 5. This case involves the sales of infringing products that are sold on the internet and delivered to an address in the State of Texas and this Judicial District. See Plaintiff's Complaint (Docket # 1), ¶ 21-22. 6. Counsel for Plaintiff purchased one of Defendant's products, the Big Bite T-Rex! Prehistoric Float (FUN-TYR6) (Complaint, Exhibit E) through Amazon (www.amazon.com) and received it shipped to an address in the State of Texas and in this Judicial District. Booth Declaration, ¶ 3, Exhibit A (product), Exhibit B (sales receipt), and Exhibit C (Amazon web page describing the product). Amazon has retail stores in Texas and in this Judicial District. Id. 7. Counsel for Plaintiff purchased one of Defendant's products, the Big Bite T-Rex! Prehistoric Float (FUN-TYR6) through Walmart at http://www.walmart.com/ and it was shipped to and delivered to a Walmart store located in this Judicial District for in-store pickup. Booth Declaration, ¶ 4, Exhibit D (Complaint, Exhibit H). Walmart has numerous retail stores in Texas and in this Judicial District. Id. 8. The standard for assessing personal jurisdiction in internet cases in the Fifth Circuit is Mink v AAAA Development LLC where that court adopted the "sliding scale" approach found in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997), to evaluate the effects of a defendant's Internet activities. See Mink v AAAA Development LLC, 190 F.3d 333, 336 (5th Cir.1999) (citing Zippo Mfg. Co. 952 F. Supp. 1119 (W.D.Pa.1997)). Even though Mink was a case about the issue of the general jurisdiction of a court, some Texas district courts have interpreted Mink's adoption of Zippo to apply to both general jurisdiction and specific jurisdiction cases. See e.g., Carrot Bunch Co., Inc. v. Computer Friends, Inc., 218 F.Supp.2d 820, 825 (N.D. Tex. 2002); American Eyewear, Inc. v. Peeper's Sunglasses and Accessories, Inc., 106 F.Supp.2d 895, n. 10 (N.D. Tex. 2000). Thus, the Court should apply the Zippo analysis in making its determination that Defendant's internet activities satisfy the minimum contacts jurisdictional requirement. 9. The total amount of sales to Texas residents is not the critical determination, rather, the critical determination is the "nature and quality of the commercial activity that an entity conducts over the internet." Zippo, 952 F. Supp. at 1124; see also Mink, 190 F.3d at 336. Some courts, including Texas courts, have found a minimal level of sales activity sufficient to establish personal jurisdiction. See American Eyewear, 106 F. Supp. 2d at 901 (personal jurisdiction established where Internet sales to Texas residents constitute fewer than ½% of Defendant's total sales); Stomp v Neato, LLC, 61 F. Supp. 2d 1074,1076 (S.D. Cal. 1999) (personal jurisdiction found where evidence showed two sales made over the Internet to consumers in the forum state). 10. Sales through retailers have been found sufficient to establish personal jurisdiction. See Luv N care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 472 (5th Cir. 2006) (personal jurisdiction is proper when an out state defendant uses retailers to sell product in the forum state); Lifeguard Licensing Corp. v. Ann Arbor T-Shirt Company, LLC, Case 1:15- cv-08459 (S.D. New York 2016) (Memorandum and Order) (Internet sales through Amazon Marketplace support personal jurisdiction of the Defendant). 11. The Court's assumption of jurisdiction over Defendant will not offend traditional notions of fair play and substantial justice and will be consistent with the constitutional requirements of due process. Xilinx, Inc. v. Papst Licensing GmbH & Co. KG, 848 F.3d 1346, 1355-56 (Fed. Cir. 2017); Baskin-Robbins Franchising, 825 F.3d at 35; uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 432-33 (7th Cir. 2010); Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 814 (5th Cir. 2006). With the Defendant's nationwide direct sales and numerous retailers nationwide, the Defendant knew or should have known that its actions purposefully availed of deriving financial benefit from the privilege of conducting business in Texas, thereby invoking the benefits and protections of Texas law. Therefore, the Court's exercise of personal jurisdiction in this case is proper. 12. If the Court does not feel that the current record developed by the Plaintiff is adequate to support personal jurisdiction, Plaintiff requests that the Court allow limited discovery with Defendant and the other nationwide retailers listed above that have retail stores in Texas for sales in Texas and in this Judicial District in addition to limited discovery with regards to Defendant and any other related entities with which Defendant may ship or sell infringing products. B. Improper venue (under FRCP 12(b)(3)) 13. The Court should not dismiss this case; venue is proper in this district because a substantial part of Plaintiff's claim occurred in this Judicial District. See 28 U.S.C. 1391(b)(2); Uffner v. La Reunion Francaise, S.A., 244 F.3d 38, 42-43 (1st Cir. 2001); First of Mich. Corp. v. Bramlet, 141 F.3d 260, 263-64 (6th Cir. 1998). As will be discussed below and shown above, Plaintiff purchased multiple Defendant's product on the internet and had them shipped into locations in this Judicial District including a retail store. 14. When a suit is filed in an improper judicial district, a court can dismiss the suit or it can transfer the case, in the interest of justice, to a district where it could have been brought. See 28 U.S.C. §1406(a). However, this is not a case in which the Court should do so because venue is proper in this Judicial District as is shown below. 15. The residency of an entity for venue purposes is controlled by 28 U.S.C. §1391(c)(3) that provides: "For all venue purposes … (3) an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question and, if a plaintiff, only in the judicial district in which it maintains its principal place of business." 16. As shown above, Defendant is subject to the personal jurisdiction of this Court. In addition, Plaintiff's principal place of business is in this Judicial District. See Booth Declaration, ¶ 5. Therefore, the Defendant is deemed to be a resident of this Judicial District for this Case. 17. Defendant cites TC Heartland v. Kraft Food Grp. Brands LLC, 137 S.Ct. 1514 (2017) for the proposition that "a domestic corporation 'resides' only in its State of Incorporation" and thus this action should be dismissed for improper venue because Jet Creations Inc. is not incorporated, and thus does not reside, in Texas. Defendant's reliance on TC Heartland is wrong. TC Heartland is limited to the proper venue for a patent infringement lawsuit under the special patent venue statute 28 U.S.C. 1404(b). This case is, instead, for trademark infringement and unfair competition which falls under the general venue statute of 28 U.S.C. §1391 and specifically §1391(c)(3). C. Failure to state a claim upon which relief can be granted (under FRCP 12(b)(6)) 18. When considering a defendant's motion to dismiss, a court must construe the factual allegations in the complaint in the light most favorable to the to the plaintiff. Barker v. Riverside Cty. Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009); see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). If the complaint provides fair notice of the claim and the factual allegations are sufficient to show that the right to relief is plausible, a court should deny the defendant's motion. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Twombly, 550 U.S. at 555-56; Woods v. City of Greensboro, 855 F.3d 639, 652-53 and n.9 (4th Cir. 2017); Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). 19. In the complaint, Plaintiff alleged a claim for trademark infringement and unfair competition. The elements of the claim for trademark infringement are: 1) Plaintiff possesses a valid trademark; and (2) Defendant's use of Plaintiff's trademark creates a likelihood of confusion as to source, affiliation, or sponsorship. Nola Spice Designs, L. L.C. v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015); Nat'l Bus. Forms & Printing, Inc. v. Ford Motor Co., 671 F.3d 526, 532 (5th Cir. 2012); 15 U.S.C. § 1114(1). The complaint provides defendant with fair notice of the claim. See Brooks, 578 F.3d at 581. 20. In support of the claims for trademark and unfair competition infringement, Plaintiff made the following factual allegations for each element: Plaintiff possesses valid trademarks (Complaint, ¶15, Exhibits A, B, C); and Defendant's use of Plaintiff's trademarks creates a likelihood of confusion as to source, affiliation, or sponsorship (Complaint ¶30-35). These factual allegations show a right to relief that is plausible. That is, when the factual allegations are assumed to be true, they show a right to relief that is more than mere speculation. Cf., Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009); Fowler v. UPMC Shadyside, 578 F.3d 203, 211-12 (3d Cir. 2009); see Iqbal, 556 U.S. at 678-79; Twombly, 550 U.S. at 555-56; Brooks, 578 F.3d at 581. Conclusion 21. Defendant's sales activities establish minimum contacts with the State of Texas and this Judicial District. Furthermore, the Court's assumption of personal jurisdiction over Defendant will not offend traditional notions of fair play and substantial justice and will be consistent with due process of law. 22. Venue for this case is proper as the Defendant is deemed to reside in this Judicial District as this Court has personal jurisdiction over the Defendant. 23. The Complaint provides fair notice of the claim and the factual allegations are sufficient to show that the right to relief is plausible. 24. Plaintiff asks the Court for the above reasons to deny Defendant's Motion to Dismiss and to retain the case on the Court's docket. Date: August 7, 2019 Respectfully submitted, /s/ Matthew J. Booth Matthew J. Booth Dale Langley The Law Firm of H. Dale Langley Jr., P.C. Texas Bar No. 11918100 1803 West Avenue Austin TX 78701 Tel: +1 (512) 477-3830 Fax: +1 (512) 597-4775 dlangley@iptechlaw.com Matthew J. Booth Matthew J. Booth PC Texas Bar No. 02648300 5501A Balcones Drive, Suite 301 Austin Texas 78731 Tel: +1 (512) 474-8488 Fax: +1 (512) 596-2875 matthew.booth@boothlaw.com Legal Counsel for Plaintiff Getagadget, LLC Certificate of Service I certify that I filed this filing on August 7, 2019 electronically using the CM/ECF system that will send notification of this filing to all counsel of record. /s/ Matthew J. Booth Matthew J. Booth