American Univ. Sys., Inc. v. American Univ.
| Decision Date | 13 March 2012 |
| Docket Number | Civil Action No. 3:11-CV-282-L |
| Parties | AMERICAN UNIVERSITY SYSTEM, INC., Plaintiff, v. AMERICAN UNIVERSITY, and AMERICAN PUBLIC UNIVERSITY SYSTEM, INC., Defendants. |
| Court | U.S. District Court — District of Columbia |
Before the court is Defendants' Motion to Dismiss Plaintiff's Complaint or, in the Alternative, to Transfer Venue to the United States District Court for the District of Columbia, filed July 5, 2011. After carefully reviewing the motion, response, reply, appendices, supplemental briefs, record, and applicable law, the court determines that it lacks personal jurisdiction over Defendants and that venue is improper in the Northern District of Texas. The court, rather than dismiss for lack of personal jurisdiction or improper venue, hereby transfers this action to the District Court for the District of Columbia, pursuant to 28 U.S.C. §§ 88, 1406(a), and 1631.
This is a declaratory judgment action brought by Plaintiff American University System, Inc., ("Plaintiff" or "AUS"), a Washington, D.C. corporation that conducts its day-to-day activities out of Dallas, Texas, against Defendants American University ("AU"), a corporation organized under the laws of the District of Columbia with its principal place of business in Washington, D.C., and American Public University System, Inc., a West Virginia corporation with its principal place ofbusiness in Charles Town, West Virginia. See Plf. Resp. App., Exh. II at 84, ¶ 4; Def. App. at 1, ¶ 3 & 6, ¶ 3. All three parties are engaged in business in the education industry. Plaintiff AUS facilitates the provision of online educational opportunities by its member universities, including the University of Texas at Arlington, Texas A&M Commerce, and Lamar University, to employees of its member businesses, some of which are located in Texas. See Plf. Resp. Exh. II at 85, ¶¶ 6-7. Defendant AU operates a private, liberal arts college in Washington, D.C. See Def. App. at 1, ¶ 3 & 3-5. Defendant APUS offers distance learning instruction at the undergraduate and graduate levels in a variety of academic subjects through two constituent online universities — the American Military University and the American Public University. Id. at 6, ¶ 4.
APUS obtained registrations from the United States Patent and Trademark Office for the marks "American Public University System," and "American Public University of the American Public University System" for educational services. Id. at 7, ¶ 15; see also Plf. Resp. App., Exh. I-A at 5, 6. APUS assigned the marks to AU, which then granted back to APUS an exclusive license to use the marks. Def. App. at 8, ¶ 15. After APUS observed Plaintiff in the summer of 2010 at marketing fairs in Dover, Delaware, and Norman, Oklahoma, counsel for APUS sent Plaintiff a letter demanding that Plaintiff "cease and desist" using the name "American University System" on grounds that such use constituted trademark infringement. Id. at 9, ¶ 2. Over the next several months, the parties engaged in unsuccessful efforts to avoid litigation. Id. at 9-11, ¶¶ 3-10. In late January 2011, APUS's counsel sent Plaintiff a written ultimatum demanding that it cease using the contested mark by February 14, 2011. Id. at 10, ¶ 9. In response, Plaintiff filed this lawsuit on February 14, 2011, seeking a judicial declaration that it has not infringed, and does not infringe, any alleged trademarks owned by Defendants and that the marks at issue are invalidand unenforceable for a variety of reasons, including abandonment. See Plf. Compl. [Doc. #1] at 5.
Defendants filed this motion to dismiss on grounds that (a) Plaintiff engaged in improper forum shopping when it filed the declaratory judgment action in anticipation of being sued by Defendants in another forum, (b) this courts lacks personal jurisdiction over AU and APUS, and (c) venue is improper in the Northern District of Texas. In the alternative, Defendants argued that the court should transfer venue to the District of Columbia pursuant to 28 U.S.C. § 1404(a). Plaintiff opposed Defendants' motion and sought leave to conduct jurisdictional discovery, which the magistrate judge granted. The parties filed supplemental briefs and appendices addressing the issue of personal jurisdiction. The motion is now ripe for determination.
Pursuant to the Declaratory Judgment Act, the court "may declare the rights and other legal relations of any interested party seeking such declaration . . . ." 28 U.S.C. § 2201(a) (emphasis added). This decision is within the discretion of the district court, and it must "address[ ] and balance[ ] the purposes of the Declaratory Judgment Act and the factors relevant to the abstention doctrine," before dismissing a declaratory judgment action pursuant to its discretion. Lawyers Title Ins. Corp. v. Stallion Funding, No. 3-10-CV-0511-L, 2010 WL 4275278, at *9 (N.D. Tex. Oct. 29, 2010) (quoting St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590 (5th Cir. 1994)). The Fifth Circuit has identified seven non-exclusive factors for a district court to consider in deciding whether to exercise such discretion, including:
(1) whether there is a pending state action in which all of the matters in controversy may be fully litigated; (2) whether the plaintiff filedsuit in anticipation of a lawsuit filed by the defendant; (3) whether the plaintiff engaged in forum shopping in bringing the suit; (4) whether possible inequities in allowing the declaratory plaintiff to gain precedence in time or to change forums exist; (5) whether the federal court is a convenient forum for the parties and witnesses; (6) whether retaining the lawsuit in federal court would serve the purposes of judicial economy; and (7) whether the federal court is being called on to construe a state judicial decree involving the same parties and entered by the court before whom the parallel state suit between the same parties is pending.
Sherwin-Williams Co. v. Holmes County, 343 F.3d 383, 388 (5th Cir. 2003) (citing Trejo, 39 F.3d at 590-91).
On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing a prima facie case for the court's jurisdiction over a nonresident defendant. See Ham v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir. 1993); Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). When the court rules on the motion without an evidentiary hearing, the plaintiff may establish personal jurisdiction by presenting a prima facie case that personal jurisdiction is proper, id.; proof by a preponderance of the evidence is not required. International Truck and Engine Corp. v. Quintana, 259 F. Supp. 2d 553, 556 (N.D.Tex. 2003) (citing WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989)). The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery. Stuart, 772 F.2d at 1192. Uncontroverted allegations in a plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in favor of the plaintiff. Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990). After a plaintiff makes his prima facie case, the burden then shifts to the defendant to present "acompelling case that the presence of some other consideration would render jurisdiction unreasonable." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).
A federal court has jurisdiction over a nonresident defendant if the state long-arm statute confers personal jurisdiction over that defendant, and if the exercise of jurisdiction is consistent with due process under the United States Constitution. Ruston Gas Turbines, Inc. v. Donaldson Co., Inc., 9 F.3d 415, 418 (5th Cir. 1993). Because the Texas long-arm statute extends to the limits of federal due process, Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990), the court must determine whether (1) the defendants have established "minimum contacts" with the forum state; and, (2) whether the exercise of personal jurisdiction over the defendants would offend "traditional notions of fair play and substantial justice." Ruston Gas, 9 F.3d at 418 (citing International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
The "minimum contacts" prong is satisfied when a defendant "purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." Burger King, 471 U.S. at 475. The nonresident defendant's availment must be such that the defendant "should reasonably anticipate being haled into court" in the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). This test "ensures that a defendant will not be haled into a jurisdiction solely as a result of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the 'unilateral activity of another party or a third person.'" Burger King, 471 U.S. at 475 (citations omitted). The "minimum contacts" prong of the inquiry may be subdivided into contacts that give rise to "specific" personal jurisdiction and those that give rise to "general" personal jurisdiction. Marathon Oil Co. v. A.G Ruhrgas, 182 F.3d 291, 295 (5th Cir. 1999). Specific jurisdiction is only appropriate when the nonresident defendant's contacts with theforum state arise from, or are directly related to, the cause of action. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984). The exercise of general personal jurisdiction is proper when the nonresident defendant's contacts with the forum state, even if unrelated to the cause of action, are continuous, systematic, and substantial. Id. at 414 n. 9.
In evaluating the second prong of the due process test, the court must examine...
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