556 F.2d 406 (9th Cir. 1977), 74-2109, Wells Fargo & Co. v. Wells Fargo Exp. Co.
|Citation:||556 F.2d 406|
|Party Name:||194 U.S.P.Q. 10 WELLS FARGO & COMPANY, a corporation, and Baker Industries, Inc., a corporation, Plaintiffs-Appellants, v. WELLS FARGO EXPRESS COMPANY, a corporation, and Wells Fargo Express Company, AG, a Liechtenstein Corporation, Defendants-Appellees.|
|Case Date:||April 22, 1977|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
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Richard E. Backus, argued, Flehr, Hohbach, Test, Albritton & Herbert, San Francisco, Cal., for plaintiffs-appellants.
Wiener, Goldwater, Galatz & Raggio, Las Vegas, Nev., Albert L. Jacobs, Jr., Jacobs & Jacobs, New York City, for defendants-appellees.
Appeal from the United States District Court for the District of Nevada.
Before WRIGHT and CHOY, Circuit Judges, and EAST, [*] District Judge.
CHOY, Circuit Judge:
A show-down over rights to the storied name "Wells Fargo" is the subject of this trademark infringement and unfair competition action. Two American corporations challenge the use of the name, in the United States and abroad, by two other corporations, one of which is foreign.
In a lengthy opinion appearing at 358 F.Supp. 1065 (D.Nev.1973), the district court held, among other things, that it lacked personal jurisdiction over the foreign defendant and that those portions of the suit concerning activities in foreign countries should be dismissed for want of subject matter jurisdiction and under the doctrine of forum non conveniens. Plaintiffs appeal. We vacate the judgment of the district court on these issues and remand.
Facts and Proceedings Below
Plaintiff Wells Fargo & Company, a California corporation, is engaged in various businesses in the United States and abroad, most notably as Wells Fargo Bank. In addition to world-wide banking and trust services, the company is also involved in toy manufacture, the restaurant trade, and the travel agency business. In each of these endeavors, it makes use of trade names, trademarks, and service marks which consist in whole or in part of the name "Wells Fargo," and which are registered in the United States under the Lanham Act, 15 U.S.C. §§ 1051-1127, and in various foreign countries. The other plaintiff, Baker Industries, Inc., is a Delaware corporation which owns and has registered the "Wells Fargo" trademark for use in its business of providing armored car and other protective services.
At the heart of plaintiffs' allegations 1 is the claim that a group headed by Herman Heymann, a German national who resides in Gibraltar, has deliberately and wrongfully attempted to appropriate the "Wells Fargo" name both in Europe as well as in the United States. Defendant Wells Fargo Express Company, A.G. ("A.G."), a Liechtenstein corporation, was incorporated in 1967 by Heymann to engage in the business of loaning money and is the foreign defendant dismissed by the district court below. In the course of its activities, A.G. had acquired various European and American subsidiaries. While none of the European subsidiaries has been named in the instant action, 2 an American subsidiary, Wells Fargo Express Company ("Express"), is a named defendant.
Express was originally incorporated in Nevada in 1961 for the purpose of providing traveler's checks under the name "Wells Fargo" by K. F. Wilkinson, Sr., a business associate of Heymann, but from that date until 1968 it lay dormant. In 1968, the only capital stock of Express was issued to A.G. for a consideration of $50,000. What business Express has done appears to be in the area of research and development, including the invention and marketing of electronic protective devices.
Express was the only defendant named when plaintiffs filed their original complaint on September 18, 1970, seeking damages as well as injunctive relief. Approximately three weeks later, its name was changed to Modern Research, Inc. On November 2, 1970, A.G. transferred all of its outstanding shares in Express to Albert L. Jacobs, Jr., Express' attorney in this case,
for a consideration of $100. 3 The Nevada district court found that it had both in personam jurisdiction over Express and subject matter jurisdiction over plaintiffs' trademark infringement and unfair competition claims against Express. See 358 F.Supp. at 1079-84. The propriety of those rulings is not now before us.
A.G. was not named as a defendant until plaintiffs filed their amended complaint of December 22, 1971, seeking the same relief. Service was made on A.G. in Liechtenstein pursuant to Fed.R.Civ.P. 4(e) & 4(i)(1)(D), and the Nevada "long-arm" statute, Nev.Rev.Stat. § 14.065. A.G. received the summons as shown by the return of service required by Rules 4(g) & 4(i)(2). Through a letter from its Belgian counsel, however, A.G. notified the Nevada district court of its intention not to appear, maintaining that the court lacked jurisdiction over it and its activities. 4
In its opinion of April 10, 1973, the district court held that its previous order giving plaintiffs leave to add A.G. as a party had been improvidently granted. 358 F.Supp. at 1110. In addition to concluding that it was without personal jurisdiction over A.G., id. at 1078, 1108-10, the district court also held that it lacked subject matter jurisdiction under the federal question grant of the Lanham Act, 28 U.S.C. § 1338(a), over plaintiffs' claims concerning the foreign activities of A.G., and that even though diversity jurisdiction was available to plaintiffs, 28 U.S.C. § 1332, such a suit would be dismissed under the doctrine of forum non conveniens because of the difficulty of applying foreign law. 358 F.Supp. at 1074-78. Plaintiffs appeal these rulings.
I. IN PERSONAM JURISDICTION OVER A.G.
The district court held that Express, which was incorporated and doing business in Nevada, was clearly present in that state and was, therefore, subject to service of process under Fed.R.Civ.P. 4(f). 5 The court, however, denied personal jurisdiction over A.G., ruling only that under Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634 (1925), and Gravely Motor Plow & Cultivator Co. v. H. V. Carter Co., 193 F.2d 158, 160-61 (9th Cir. 1951), the mere ownership by a foreign corporation of a company which is doing business in the state does not mean that the foreign parent itself is "doing business" there so as to render itself liable to process. See 358 F.Supp. at 1108-10. In its discussion of personal jurisdiction over A.G., however, the district court seems to have focused only on one aspect of A.G.'s activities its ownership of Express and, in doing so, may have misconstrued both the law of in personam jurisdiction and the import of plaintiffs' admittedly confusing arguments.
In International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny, the Supreme Court has attempted to define the constitutional due process limits of in personam jurisdiction. In these cases, the Court has made it clear that two principal factors must be considered in determining whether a court may constitutionally exercise personal jurisdiction over a given corporate defendant: the significance of the defendant's contacts with the forum and the relationship of the
cause of action to those forum contacts. L. D. Reeder Contractors of Ariz. v. Higgins Indus., 265 F.2d 768, 774-75 (9th Cir. 1959); Blount v. Peerless Chemicals (P.R.), Inc., 316 F.2d 695, 697-98 (2d Cir.), cert. denied sub nom. Colbert v. Peerless Chemicals (P.R.), Inc., 375 U.S. 831, 84 S.Ct. 76, 11 L.Ed.2d 62 (1963).
International Shoe itself required that a non-resident defendant's "operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just, according to our traditional conception of fair play and substantial justice, to permit the state to enforce the obligations which (defendant) has incurred there," and that the form of "substitute service adopted there gives reasonable assurance that the notice (to defendant) will be actual." 326 U.S. at 320, 66 S.Ct. at 160. This "minimum contacts" test was elaborated upon in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), where a single contact with the forum state was held to be sufficient given the balance of the hardships to the plaintiff and defendant in litigating elsewhere. In Hanson v. Denckla, 357 U.S. 235, 254, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958), however, the Court cautioned that a court "does not acquire that jurisdiction by being the 'center of gravity' of the controversy, or the most convenient location for litigation." It held that
(t)he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposely avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.
Id. at 253, 78 S.Ct. at 1239.
In a parallel development, the Supreme Court decided Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952), holding that, where a corporation carries on "continuous and systematic corporate activities" within a state, due process neither prohibits nor compels a state to accept in personam jurisdiction over it even when the "cause of action (did) not aris(e) out of the corporation's activities in the forum state." Id. at 446, 72 S.Ct. at 418.
The rules which emerge from these cases may be summarized as follows: If the defendant corporation has sufficient deliberate "minimum contacts" with the forum state, a court may...
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