Plixer Int'l, Inc. v. Scrutinizer GMBH, Civil No. 2:16–CV–578–DBH
Decision Date | 18 October 2017 |
Docket Number | Civil No. 2:16–CV–578–DBH |
Citation | 293 F.Supp.3d 232 |
Parties | PLIXER INTERNATIONAL, INC., Plaintiff v. SCRUTINIZER GMBH, Defendant |
Court | U.S. District Court — District of Maine |
James G. Goggin, Verrill Dana LLP, Portland, ME, for Plaintiff.
Edward J. Sackman, Bernstein, Shur, Manchester, NH, John A. Woodcock, III, Bernstein Shur Sawyer & Nelson, Portland, ME, for Defendant.
ORDER ON MOTION TO DISMISS FOR LACK OF JURISDICTION
The issue here is whether a federal court in Maine has jurisdiction over a German company. The German company, named Scrutinizer GmbH, has no physical presence in the United States, but it offers cloud-based services from an interactive website that attracts customers from around the world, including the United States (and two customers from Maine). A Maine firm, Plixer International, Inc. owns the U.S. registered mark "Scrutinizer." Plixer has filed this lawsuit claiming that the German defendant is infringing its registered mark by operating an interactive website using the name "Scrutinizer," providing services similar to the plaintiff's, generating income from customers in the United States, confusing the public, and diluting and infringing the mark. Am. Compl. ¶¶ 14–18; Pl. Opp'n at 1, (ECF No. 14). The German defendant has moved to dismiss. I previously dismissed by agreement any general jurisdiction claim. Order on Pending Motions at 1 (ECF No. 20). I also permitted limited discovery on the plaintiff's specific jurisdiction claim with reference to what is sometimes called the federal long-arm statute, Fed. R. Civ. P. 4(k)(2) ; see United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618 (1st Cir. 2001). Id. at 1–2. After that discovery and further briefing, I now DENY the defendant's motion to dismiss the complaint, concluding that upon a prima facie record, the federal long-arm statute provides specific jurisdiction. It is a close call, however, and worthy of appellate review since the First Circuit has not addressed the issue of personal jurisdiction based solely upon an interactive website that offers cloud-based services, and the Supreme Court has never addressed 4(k)(2). See Sinochem Intern. Co. Ltd. v. Malaysia Intern Shipping Corp., 549 U.S. 422, 427, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) ( ).
Under the First Circuit's "prima facie review" standard for determining personal jurisdiction, I accept the specific facts that the plaintiff alleges so far as evidence supports them after preliminary discovery. I also accept the facts the defendant offers to the extent that they are uncontradicted. See Cossaboon v. Maine Med. Ctr., 600 F.3d 25, 31 (1st Cir. 2010).
In its original legal memorandum resisting the defendant's motion to dismiss, the plaintiff offered the following facts to demonstrate that the German defendant purposefully availed itself of the Maine or United States market beyond the undisputed existence of the interactive website.
Pl. Opp'n. at 5–6. These assertions are supported by the evidence for purposes of this motion, with the clarification that the evidentiary support for # 5 is that in providing its services, the defendant uses other data-tracking companies that use or may use servers located in the United States. See Exs. to Decl. of James G. Goggin, Esq. (ECF No. 15).
As a result of the permitted limited discovery, the plaintiff now adds the following:
Pl. Suppl. Mem. at 1–2 (ECF No. 26).
The defendant offers the following facts, and they are uncontested:
These facts in the parties' legal memoranda tell me little about what it is that the defendant actually does. But I am able to glean the following from the record about how the defendant's service and website operate:
These too are uncontested facts.
That is the factual record I use for the prima facie jurisdictional analysis.
The plaintiff seeks to support specific jurisdiction over the German defendant under Fed. R. Civ. P. 4(k)(2), the so-called federal long-arm statute. Nationwide personal jurisdiction in federal court can be obtained through service of process if (1) the claim "arises under federal law," (2) the defendant is "not subject to jurisdiction in any state's courts of general jurisdiction; and ... [3] exercising jurisdiction is consistent with the United States Constitution and laws." Id. The defendant does not contest the first and second factors (arising under federal law; no jurisdiction in any state court). Def. Suppl. Mem. at 1 (ECF No. 27). Only the third factor, constitutionality, is in play.
Because federal law controls, the Fifth Amendment rather than the Fourteenth Amendment due process clause applies. That creates a conceptual difference because the Fifth Amendment, unlike the Fourteenth, does not involve the factor of relationships among states in our federal system. The fountainhead of current personal jurisdiction analysis, International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), dealt with state power to assert personal jurisdiction and generated its analysis for "our federal system of government." Id. at 317, 66 S.Ct. 154. And World–Wide Volkswagen stated:
The concept of minimum contacts ... can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.
World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291–92, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). World–Wide Volkswagen quoted approvingly from Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) : Accord Bristol–Myers Squibb Co. v. Superior Court of California, San Francisco Cty., ––– U.S. ––––, 137 S.Ct. 1773, 1780, 198 L.Ed.2d 395 (2017) ( ). When the issue is United States jurisdiction over a person or entity outside the country as here—thus not involving the relations among states in the U.S. federal system—the cases agree that the same minimum contacts requirement applies nevertheless. E.g., Synthes (U.S.A.) v. G.M. Dos Reis Jr. Ind. Com de Equip. Medico, 563 F.3d 1285, 1295–96 (Fed. Cir. 2009) ( ); United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618–21 (1st Cir. 2002) (same); Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1159 (9th Cir. 2006) ( ).3
Using the conventional jargon, the First Circuit has said that the legal elements for the constitutional analysis are: relatedness; purposeful availment; and reasonableness, United States v. Swiss Am. Bank, Ltd., 191 F.3d 30, 36 (1st Cir. 1999), and that "a...
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