Bancroft & Masters, Inc. v. Augusta Nat., Inc., C97-4412 TEH.

• Decision Date: 24 December 1998
• Docket Number: No. C97-4412 TEH.,C97-4412 TEH.
• Court: U.S. District Court — Northern District of California
• Parties: BANCROFT & MASTERS, INC., Plaintiffs, v. AUGUSTA NATIONAL, INC., Defendants.

45 F.Supp.2d 777

BANCROFT & MASTERS, INC., Plaintiffs, v. AUGUSTA NATIONAL, INC., Defendants.

No. C97-4412 TEH.

United States District Court, N.D. California.

December 24, 1998.

Douglas A. Chaikin, Peninsula IP Group, A Professional Law Corporation, Morgan Hill, for Bancroft & Masters, Inc., a California corporation, plaintiff.

Carla B. Oakley, Brobeck Phleger & Harrison LLP, San Francisco, CA, Larry C. Jones, George M. Taulbee, Leigh A. Morrissey, Alston & Bird LLP, Charlotte, NC, Ronald P. Flynn, Morrison & Foerster LLP, San Francisco, CA, for Augusta National Inc, a Georgia corporation, defendant.

ORDER

THELTON E. HENDERSON, District Judge.

This matter comes before the Court on defendants' Motion to Dismiss, or in the Alternative, to Transfer, for Lack of Personal Jurisdiction. Having carefully considered the parties' papers and the record herein, the motion is granted for the reasons set forth below.¹

BACKGROUND

This action stems from a dispute over the Internet domain name "MASTERS.COM." Plaintiff, Bancroft and Masters, a small California company providing computer and networking support services, has owned and used this domain name since February 8, 1995. Complaint ¶¶ 1, 7. Defendant, Augusta National, Inc. ("ANI"), operates the Augusta National Golf Club in Georgia which sponsors the annual MASTERS golf tournament. On December 4, 1997, ANI sent a letter to Network Solutions, Inc., which administers domain names, challenging plaintiff's use of the MASTERS.COM domain name, and requesting that it be transferred to ANI. ANI also sent plaintiff a letter detailing ANI's right to the MASTERS registered mark,² and demanding that plaintiff cease its use of the MASTERS.COM domain name to prevent further dilution and infringement of ANI's MASTERS mark. Plaintiff responded by filing this action which seeks a declaratory judgment of "non-dilution and non-infringement," and cancellation of defendant's federally registered trademark due to misuse. Presently before the Court is ANI's motion to dismiss this action for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2), or in the alternative, to transfer the action to Atlanta, Georgia.

DISCUSSION

California law "allows courts to exercise personal jurisdiction over defendants to the extent permitted by the Due Process Clause of the United States Constitution." (Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1484-85 (9th Cir.1993)); Cornelison v. Chaney, 16 Cal.3d 143, 147, 127 Cal.Rptr. 352, 545 P.2d 264 (1976); Cal.Code Civ.Proc. § 410.10. Thus, this Court need only analyze whether the exercise of jurisdiction comports with constitutional constraints. Those constraints permit a state to exercise personal jurisdiction only over those defendants who have "certain minimum contacts with [the state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Core-Vent, 11 F.3d at 1484. A defendant's activities involving the forum state should be such that the defendant "should reasonably anticipate being haled into court there." World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Omeluk v. Langsten Slip & Batbyggeri AS, 52 F.3d 267, 270 (9th Cir.1995).

Personal jurisdiction can be either "general" or "specific." "If the defendant's activities within a state are `substantial' or `continuous and systematic,'" general jurisdiction may be asserted even if the cause of action is unrelated to those activities. Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1287 (9th Cir.1977); Shute v. Carnival Cruise Lines, 897 F.2d 377, 381 (9th Cir.1990), rev'd on other grounds, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991). If a defendant's activities are not "sufficiently pervasive to justify the exercise of general jurisdiction, a court may nevertheless assert jurisdiction for a cause of action arising out of the defendant's activities within the forum.." Shute, 897 F.2d at 381. In either case, the plaintiff bears the burden of demonstrating that the court may properly exercise personal jurisdiction over the defendant. Fields v. Sedgwick Assoc. Risks, Ltd., 796 F.2d 299, 301 (9th Cir.1986). Where, as here, the issue is presented prior to trial and the parties rely on written submissions, the plaintiff need only "present[] a prima facie showing of jurisdictional facts." Omeluk, 52 F.3d at 268; Fields, 796 F.2d at 301.

A. General Jurisdiction

The Ninth Circuit has stated that "the level of contact with the forum state necessary to establish general jurisdiction is quite high." Shute, 897 F.2d at 380; see also Amoco Egypt Oil Co. v. Leonis Navigation Co. Inc., 1 F.3d 848, 850, n. 3 (9th Cir.1993) (noting that the Ninth Circuit has "regularly ... declined to find general jurisdiction even where the contacts were quite extensive"). In Shute, the plaintiff filed suit in Washington against Carnival Cruise Lines, a Panamanian corporation with its principal place of business in Miami, Florida. Shute, 897 F.2d at 377. The defendant was not registered to do business in Washington, maintained no office or bank accounts in the state, paid no taxes there, and had no exclusive agents in Washington. The Court held that these factors "militate[d] against the exercise of general jurisdiction," even though the defendant did have a variety of contacts with the state, including advertising in local Washington newspapers, providing brochures to travel agents in the state to be distributed to potential customers, holding training seminars for travel agents in the state to teach them how to solicit Carnival sales, and soliciting customers via commission-paid agents and advertisements. Id. at 381. See also Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1331 (9th Cir.1984) (declining to find general jurisdiction, and stating that "Significantly, the defendants did not establish a regular place of business in Arizona"); Cubbage v. Merchent, 744 F.2d 665, 667-68 (9th Cir.1984) (no general jurisdiction over a non-resident doctor despite his having a significant number of patients in the forum state, his use of the forum state's medical insurance system and telephone directory listings to reach the forum, and his solicitation of patients, via these directories and referrals, in the forum state); Congoleum Corp. v. DLW Aktiengesellschaft, 729 F.2d 1240, 1242-43 (9th Cir.1984).

Here, the indicia usually used to establish general jurisdiction are also lacking. ANI, a Georgia corporation with its principal place of business in Augusta, Georgia, maintains no employees, offices, real property, inventory or personal property in California. It operates the Augusta National Golf Club, the principal activities of which "concern the provision of a golf course located on the Club's premises [in Georgia] and the promotion, sponsorship and provision of the MASTERS golf tournament," which is held annually at the golf course. Armstrong Decl. at ¶ 30-4. It is not registered or licensed to do business in California, and it pays no taxes in California. It also maintains no bank accounts in California, has no formal relationship with any California golf courses, and is owed no debts by any California companies. Nor does it target the California market since it does not disseminate any print, television or radio advertising in California, and does not direct any advertising to California over the Internet. Armstrong Decl. ¶¶ 7-8. While ANI maintains an Internet web site which posts information regarding ANI and the tournament, it can not be used to make purchases. Id.

As plaintiff points out, ANI does have some contacts with California. Plaintiff emphasizes, for example, that ANI sells and ships roughly $16,507 worth of golf-related merchandise to California each year and has direct sales of tournament tickets to California residents in an amount averaging $26,257/year.³ However, these merchandise sales amount to a scant .3% of ANI's total sales, far below the amount of business the defendant in Shute conducted in the forum state, see Shute, 897 F.2d at 381 (where defendant derived 1.29% and 1.06% of business from forum state), and the ticket sales are not linked to any advertising directed at California. Nor is the national broadcast of the annual tournament sufficient to confer personal jurisdiction. See e.g. Zimmerman v. United States Football League, 637 F.Supp. 46, 48 (D.Minn.1986) (where claim is not related to broadcasts, such broadcasts do not establish sufficient contact to justify exercise of jurisdiction).

ANI also has agreements with California vendors; however, these agreements simply permit the limited use of ANI's logos on golf-related goods manufactured by vendors for sale exclusively in ANI's pro shop in Georgia. Armstrong Reply Decl. ¶ 3. Such purchases from California vendors are insufficient to justify general jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 418, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). ANI also has license agreements with California companies, however, these agreements only authorize the use of Augusta's logo or tournament film footage for "research, news stories, documentaries or other medial presentations", or the use of the MASTERS logo for shoe horns to be used at Augusta's Georgia club. Id. at ¶ 3.⁴ Plaintiff also points to phone calls made by ANI to California each month. However, "[m]aking telephone calls and sending telexes and letters [to the forum state] are not activities which support a finding of general jurisdiction." Gates, 743 F.2d at 1331. Nor do ANI's occasional business trips to California to attend conferences or educational seminars reflect the type of substantial or continuous and systematic contact needed to confer general jurisdiction.

In short, ANI's contacts with California, either individually...