Cockburn v. SWS Indus., Inc.
| Decision Date | 07 June 2011 |
| Docket Number | Case No. C10-1566RSL |
| Parties | SUSAN TIERNEY COCKBURN, Plaintiff, v. SWS INDUSTRIES, INC., et al., Defendants. |
| Court | U.S. District Court — Western District of Washington |
This matter comes before the Court on a motion to dismiss filed by defendants SWS Industries, Inc. d/b/a McGill, Inc. ("SWS"), A.C. Moore Arts & Crafts, Inc. ("Moore"), Notions Marketing Corp. ("Notions"), and Tomsten, Inc., d/b/a Archiver's ("Archiver's"), who comprise four of the eight defendants in this case. A fifth defendant, CreateForLess, LLC filed an "adoption" of the other defendants' motion to dismiss. All five defendants allege that the Court should dismiss the complaint against them for lack of personal jurisdiction. They also seek dismissal of plaintiffs Lanham Act and state law claims pursuant to Federal Rule of Civil Procedure 12(b)(6).
At plaintiff's request, the Court heard oral argument in this matter on June 6, 2011. For the reasons set forth below, the Court grants the motions to dismiss for lack of personaljurisdiction regarding all moving defendants except SWS, and dismisses some of plaintiff's claims against SWS.
Plaintiff, a professional author and artist who works in Redmond, Washington, creates floral art using paper and other media to create, among other things, three dimensional paper flowers for use in hobbies and crafts. According to her amended complaint, she has developed a unique line of paper punches to enhance her paper floral art and three dimensional paper flowers. She is the owner of the following copyright registrations for original works of authorship: TX 7-136-170 for "Paper Bouquet" registered in February 2010, and TX 6-555-425 for "The Paper Garden - Summer Blooms" registered in May 2006. Amended Complaint at ¶ 24.
In the Spring of 2009, a representative of SWS contacted plaintiff, complimented her work, and inquired about whether plaintiff would be interested in working with SWS to enhance its existing paper punches. Subsequently, SWS offered plaintiff a contract to purchase and manufacture her floral designs. Plaintiff alleges that after the parties failed to reach an agreement, SWS sold its own infringing works to internet and retail customers throughout the United States, including in Washington.
In July 2010, while plaintiff was attending a craft and hobby show in Illinois, she discovered that SWS was promoting a new paper punch line that allegedly included some of plaintiffs flower designs under the name McGill Paper Blossoms. Amended Complaint at ¶ 53. The program included her copyrighted Lily Petal Designs, Geranium Leaf Designs, and Pear Design, and her instructions (the "Infringing Works"). Id. Plaintiff contends that SWS's new line reflected the program plaintiff had discussed with SWS, and included the color scheme she had presented. Id.
SWS is an Illinois corporation with its principal place of business in Marengo, Illinois, approximately 65 miles northwest of Chicago. SWS manufacturers punches used in officeproducts, industrial supply/hardware, and crafts. Declaration of Wayne Schwartzman, (Dkt. #31-1) at ¶ 5. SWS does not own or operate any retail establishments. Instead, it sells its products to a variety of retail stores throughout the United States and accepts and processes orders through an interactive website. Id. at ¶ 6. During 2010, SWS sold $2,469 worth of its Paper Blossom product line to customers in Washington. Id. at ¶ 11. Sales by SWS in Washington in connection with the five punches that plaintiff claims infringe her copyrights have totaled $710.00: Star Lily ($281.00), Small Geranium Leaf ($41.00), Medium Geranium Leaf ($92.00), Garden Petals ($138.00) and Pear ($158.00).
Archiver's is a Minnesota corporation that operates retail stores, though none in Washington. It sells scrapbooking, paper-crafting, and card-making merchandise. Archiver's has no employees and no physical presence in Washington. In October 2010, Archiver's launched an interactive website to allow sales to customers. In 2010, its sales to Washington customers totaled $997.00. Declaration of Brian Olmstead, (Dkt. #31-3) at ¶ 5. Archiver's purchases products from SWS, including items from its Paper Blossoms line of products. Archiver's resells those products only in its retail stores, not via the internet, and it has never shipped those products to any Washington resident. Id. at ¶ 9.
Notions is a Michigan corporation and a distribution center for crafting merchandise. Except for a single outlet store, it does not operate any retail stores. Declaration of John Van Dyke, (Dkt. #31-4) at ¶ 3. Instead, it sells its merchandise to retail stores that place their order with Notions via the internet. Id. In 2010, approximately 3% of Notions' overall sales were to retail customers in Washington. Id. at ¶ 6. Notions has been a customer of SWS's since 2001. Although it has purchased Paper Blossoms products, Notions has not sold any of those products in Washington or shipped them to customers in Washington. Id. at ¶ 10.
Moore is incorporated in Florida and operates retail stores, though none in Washington. Declaration of Cindy Woodhull, (Dkt. #31-2) at ¶ 3. Moore sells items to customers in Washington through its catalog and via the internet. Although it has purchased SWS PaperBlossoms products, it has not shipped any of those products to any Washington customer. Id. at 1 13.
CreateForLess, LLC is a limited liability company "organized under the laws" of Oregon. Declaration of Dennis DeYoung, (Dkt. # 39-1) at ¶ 3.1 The company has no employees or physical presence in Washington. Id. at ¶ 4. CreateForLess has not sold any of McGill's Paper Blossoms in Washington or shipped any of those products to Washington. Id. at ¶ 8. The company has sold other goods to Washington residents via its website. Id. at ¶ 5. The company's president states that before the company was served with the summons and complaint in this case, he had no "familiarity" with plaintiff's name and was unaware of plaintiffs dispute with SWS. Id. at ¶ 6. This order will refer to Moore, Notions, CreateForLess, LLC, and Archiver's collectively as the "retailer defendants."
None of the moving defendants is licensed to do business in Washington. None has employees or a physical presence in the state.
Plaintiff asserts claims for copyright infringement, violation of the Lanham Act, 15 U.S.C. § 1125(a), violation of Washington's Consumer Protection Act, and violation of Washington trade dress and trade name protection. In addition to damages, she seeks a constructive trust and an accounting.
Plaintiff has the burden of making a prima facie showing of personal jurisdiction. See, e.g., Bourassa v. Desrochers, 938 F.2d 1056, 1057 (9th Cir. 1991) (internal citation omitted). On a motion to dismiss for lack of personal jurisdiction, the Court must assume that the allegations in the complaint are true unless contravened. See, e.g., Dole Food Co., Inc. v. Watts, 303 F.3d1104, 1108 (9th Cir. 2002).
The exercise of jurisdiction must comport with the state's long arm statute, and with the constitutional requirement of due process. See Omeluk v. Langsten Slip & Batbyggeri, 52 F.3d 267, 269 (9th Cir. 1995) (internal citation omitted). "Because the Washington long arm statute reaches as far as the Due Process Clause, all we need to analyze is whether the exercise of jurisdiction would comply with due process." Id. (internal citations omitted). For a forum state to have personal jurisdiction over an out-of-state defendant, that defendant must "have certain minimum contacts with the forum state, such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). The due process requirements ensure that individuals have "fair warning that a particular activity may subject [them] to jurisdiction of a foreign sovereign." Shaffer v. Heitner, 433 U.S. 186, 218 (1977).
Where, as in this case, general jurisdiction is undisputedly lacking, a court may nevertheless exercise "limited" or "specific" personal jurisdiction depending upon "the nature and quality of the defendant's contacts in relation to the cause of action." Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1287 (9th Cir. 1977). The Ninth Circuit utilizes a three-part test to analyze specific jurisdiction:
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (quoting Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)).
The law regarding when commercial activity over the internet constitutes purposefulavailment is "still developing." Qwest Communications Intern'l, Inc. v. Sonny Corp.. 2006 U.S. Dist. LEXIS 29832 at *4 (W.D. Wash. 2006). In tort cases,2 courts "typically inquire whether a defendant purposefully directs his activities at the forum state, applying an 'effects' test that focuses on the forum in which the defendant's actions were felt, whether or not the actions themselves occurred within the forum." Yahoo! Inc. v. La Ligue Contre le Racisme et L'Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006) (internal citation and quotation omitted). The "purposeful availment" element imposes three requirements: "'the defendant allegedly [must] have (1) committed an intentional...
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