551 F.2d 784 (9th Cir. 1977), 75-1989, Amba Marketing Systems, Inc. v. Jobar Intern., Inc.

Docket Nº:75-1989.
Citation:551 F.2d 784
Party Name:194 U.S.P.Q. 178 AMBA MARKETING SYSTEMS, INC., Plaintiff-Appellant, v. JOBAR INTERNATIONAL, INC., Defendant-Appellee.
Case Date:April 04, 1977
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 784

551 F.2d 784 (9th Cir. 1977)

194 U.S.P.Q. 178

AMBA MARKETING SYSTEMS, INC., Plaintiff-Appellant,

v.

JOBAR INTERNATIONAL, INC., Defendant-Appellee.

No. 75-1989.

United States Court of Appeals, Ninth Circuit

April 4, 1977

Page 785

William H. Drummond, argued, Drummond, Nelson & Ptak, Phoenix, Ariz., for plaintiff-appellant.

Warren L. Kern, argued, Harris, Kern, Wallen & Tinsley, Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the District of Arizona.

Before CHAMBERS and ANDERSON, Circuit Judges, and EAST, District Judge.

Page 786

CHAMBERS, Circuit Judge:

This is an appeal from the district court's dismissal of plaintiff Amba Marketing System, Inc.'s (Amba's) action on the ground of lack of personal jurisdiction over the defendant Jobar International, Inc. (Jobar). Subject matter jurisdiction in district court was pursuant to 28 U.S.C. Secs. 1332(a) (diversity of citizenship) and 1338 (patent infringement, trademark infringement and unfair competition). While recognizing that close questions of in personam jurisdiction are presented, we affirm the district court's dismissal.

Amba's complaint was in 4 counts unfair competition, trademark infringement, false designation of origin, and patent infringement. The facts giving rise to the complaint were as follows. Plaintiff Amba is a Delaware corporation with its principal place of business in Arizona. Amba is engaged in mail order sales of leather goods, primarily women's wallets and handbags. Defendant Jobar is a California corporation with its principal place of business in Santa Monica, California. Jobar's business essentially consists of importing different items of merchandise and selling them to various mail order sales companies, including some of Amba's competitors. Jobar has no facilities in Arizona, no personnel in Arizona representing it, and no direct mail order business with anyone in Arizona.

This action arose out of Jobar's allegedly having cheaper imitations of, among other things, Amba's "clutch bag" item produced in Taiwan, with Jobar then selling the imitations to California mail order houses which compete with Amba by distributing the merchandise in interstate commerce. Embossed in the interior of "credit card organizers" found within the clutch bags was a legend which purportedly identified the products' origin as being Amba's place of business in Arizona, and which matched almost identically the writing inscribed on Amba's own product. These imported imitations allegedly are distinctly inferior in appearance, workmanship and quality of material to the genuine product sold by Amba.

The first 3 counts of Amba's complaint (unfair competition, trademark infringement and false designation of origin) alleged that Jobar imports the cheaper foreign imitations "for sale to and subsequent distribution by (Amba's) substantial competitors in interstate commerce." The fourth count (patent infringement) varied somewhat by alleging that Jobar's customers, some of which compete with Amba, have in turn "sold and are selling (the infringing merchandise) to the public within the state of Arizona and elsewhere." Damage in the form of injury to Amba's good will and reputation, impairment of its profit expectancies and competitive position, and dilution in trademark value is claimed to have been suffered by Amba in Arizona and elsewhere in interstate commerce. This damage allegedly was reasonably foreseeable to Jobar. Amba prayed in part for a temporary restraining order, preliminary and permanent injunction, and damages.

The district court (Judge Copple) issued a TRO without notice to Jobar, issued an order to show cause and set a hearing thereon for March 27, 1975. A registered California process server was specially appointed to serve process and other papers on Jobar in California. Shortly thereafter, Jobar moved to dissolve the TRO and order to show cause, or in the alternative to dismiss the complaint for improper venue (as to the patent infringement count) and for lack of in personam jurisdiction. A hearing on these motions was held on March 26, 1975, the day before the scheduled hearing on Judge Copple's order to show cause. The district court (Judge Craig) dismissed the entire case without prejudice for lack of personal jurisdiction over Jobar, thus allowing Amba to file the action in a suitable jurisdiction. The TRO accordingly was dissolved and the order to show cause vacated. Subsequently, Amba filed a similar action in the Central District of California, which case has been stayed pending the outcome of this appeal.

The pivotal issue in this case is whether the district court correctly dismissed Amba's action for lack of personal

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jurisdiction. To resolve this issue, two inquiries must be addressed: whether an applicable rule or statute potentially confers personal jurisdiction over the defendant; and whether assertion of such jurisdiction accords with constitutional principles of due process. As to the first inquiry, under F.R.Civ.P. 4(d)(7), reference is made to the jurisdiction law of the state in which the district court sits. Cook v. Fox, 537 F.2d 370 (9th Cir. 1976). In Arizona, the long-arm rule, Ariz.R.Civ.P. 4(e)(2) (16 Ariz.Rev.Stat.Ann.) confers personal jurisdiction inter alia over a...

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