Cornelius v. Ryan Deluca D/b/a Bodybldg.Com
| Decision Date | 26 April 2010 |
| Docket Number | Case No. CV-10-27-S-BLW. |
| Parties | Derek W. CORNELIUS and SI03, Inc., a Delaware Corporation, Plaintiffs,v.Ryan DeLUCA d/b/a Bodybuilding.com; Bryna Matthews DeLuca d/b/a Bodybuilding.com; Bodybuilding.com, LLC; Molecular Nutrition, LLC; M.A.N. Sports, Inc.; Designer Supplements, Inc.; Gaspari Nutrition, Inc.; Thermolife International, LLC; Scientifically Advanced Nutrition; Unique Nutrition, Inc.; Engineered Sports Technology, LLC; Palo Alto Labs; SNS Nutrition; Bodywell Nutrition, LLC; ISS Research; Ergopharm, Inc.; Betancourt Nutrition, Inc.; And Nimbus Nutrition, LLC, Defendants. |
| Court | U.S. District Court — District of Idaho |
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Jonathan E. Fortman, Law Office of Jonathan E. Fortman, Matthew A. Rosenberg, St. Louis, MO, Terri Rae Pickens, Pickens Law, P.A., Boise, ID, for Plaintiffs.
M. Kelly Tillery, Christopher D. Olszyk, Jr., Pepper Hamilton, LLP, Philadelphia, PA, Thomas G. Walker, Cosho Humphrey LLP, Debora K. Kristensen, William C. Cole, Givens Pursley, Richard L. Stubbs, Aubrey D. Lyon, Carey Perkins LLP, Boise, ID, Joseph R. Swift, Brown and James, P.C., St. Louis, MO, for Defendants.
The Court has before it Defendants' Motions to Dismiss based on insufficient service of process, lack of personal jurisdiction, expiration of the statute of limitations Rule 12(b)(6), and immunity. The Court heard oral argument on the motion on March 16, 2010, and now issues the following decision.
Derek W. Cornelius and SI03, Inc. (collectively “SI03”) filed suit in Missouri state court on October 20, 2008, alleging (1) violations of the Lanham Act, 15 U.S.C. § 1125(a), (2) tortious interference with a business expectancy or prospective business relationship, (3) injurious falsehood, (4) defamation, (5) libel, and (6) civil conspiracy. SI03 named more than fifteen defendants in the suit. SI03 asserts that the defendants were responsible for postings on the website www. bodybuilding. com which criticized Cornelius, SI03, and SI03's products. The statements at issue in this case were all posted on the Forum Message Board, on which any user can post comments.
In December, 2008, defendants Ryan DeLuca, Bryna Matthews DeLuca, and Bodybuilding.com (collectively “Bodybuilding.com”) removed the case to the United States District Court for the Eastern District of Missouri. SI03 filed a Second Amended Complaint on August 19, 2009, and several defendants moved to dismiss. Rather than dismiss the suit for lack of personal jurisdiction, the district court transferred the case to this Court pursuant to 28 U.S.C. § 1406(a).
After the transfer, Defendants Bodybuilding.com (Docket No. 128), SNS Nutrition (“SNS”) (Docket No. 137), Scientifically Advanced Nutrition (“SAN”) (Docket No. 165), ISS Research, LLC (“ISS”) (Docket No. 168), and Molecular Nutrition, LLC (“Molecular”) (Docket No. 169) filed Motions to Dismiss. SI03 voluntarily dismissed Count Six, alleging civil conspiracy, as to all defendants on November 12, 2009. The Defendants challenge the remaining counts.
SNS and Molecular assert that they have not been served with a summons and complaint since the transfer of this case to the District of Idaho.
When a complaint is filed in a district court that is not the proper venue for the claims, the case may be transferred to another district court in which the complaint could have been filed originally, if it suits the interests of justice. 28 U.S.C. § 1406(a). Transfer “to remove a procedural obstacle such as lack of personal jurisdiction is favored over dismissing an action because transfer facilitates the adjudication of a dispute on its merits.” Wilson v. St. Mary's Hosp., 822 F.Supp. 1450, 1451 (D.Minn.1993). Even if a court does not have personal jurisdiction over the defendants, it can transfer the action to a district which may. Id. (citing Goldlawr, Inc. v. Heiman, 369 U.S. 463, 465-66, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962)). Transfer of a case “does not confer personal jurisdiction upon the court receiving the case.” Id.
Service of process is a prerequisite to the exercise of personal jurisdiction. Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987) superseded by rule, Fed.R.Civ.P. 4(k)(2). “[S]ervice of summons is the procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served.” Miss. Publ'g Corp. v. Murphree, 326 U.S. 438, 444-45, 66 S.Ct. 242, 90 L.Ed. 185 (1946). Actual notice, without substantial compliance with Federal Rule of Civil Procedure 4, is insufficient to subject defendants to personal jurisdiction. Jackson v. Hayakawa, 682 F.2d 1344, 1347 (9th Cir.1982).
Defendants assert that SI03's claims against them should be dismissed due to SI03's failure to serve a complaint and summons issued by this Court. SI03 counters that re-service is not required, as Defendants clearly had notice of the action. See Bentz v. Recile, 778 F.2d 1026, 1028 n. 5 (5th Cir.1985).
Service is required following a transfer pursuant to § 1406(a) when a decision on the merits has not been reached. See Wilson, 822 F.Supp. at 1452 (); Michelson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 709 F.Supp. 1279, 1289 (S.D.N.Y.1989) (); see also McCurdy v. Am. Bd. of Plastic Surgery, 157 F.3d 191, 195-96 (3d Cir.1998).
The 1993 amendments to Rule 4 discourage “hyper-technical” compliance with the requirements of service, but only as to how service can be effectuated, not as to the requirement that a party be served. Fed.R.Civ.P. 4 notes to 1993 Amend; see also McCurdy, 157 F.3d at 195-96. SI03 also asserts that Defendants waived their objection to the lack of service by appearing at and participating in a scheduling conference. See Datskow v. Teledyne, Inc., Cont'l Prods. Div., 899 F.2d 1298, 1303 (2d Cir.1990). SNS's Motion to Dismiss asserting the problem with service was filed prior to the scheduling conference, and the issue of service was discussed at the conference. Defendants have not waived their objection.
The Court will follow the “better practice” of requiring re-service following transfer. Bentz, 778 F.2d at 1028 n. 5. Without service of process, the Court cannot obtain personal jurisdiction over Defendants. SI03's complaint was filed in the District of Idaho on January 22, 2010.1 Thus, SI03 has until May 24, 2010 to serve a complaint and summons issued by this Court on Defendants. Fed.R.Civ.P. 4(m) (). As there is adequate time remaining for SI03 to effectuate service, the Court will proceed with Defendants' remaining claims as though service was complete.
Defendants SNS, ISS, and Molecular all contest the Court's exercise of personal jurisdiction over them.
In a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), SI03 bears the burden of proving that jurisdiction is appropriate. 2Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir.2008) cert. denied, --- U.S. ----, 129 S.Ct. 1318, 173 L.Ed.2d 585 (2009). Where, as here, the motion is based on written materials rather than an evidentiary hearing, SI03 need only establish a prima facie showing of jurisdictional facts to withstand the motion to dismiss. Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995). The Court must take SI03's uncontroverted allegations in the complaint as true. Dole Food Co. v. Watts, 303 F.3d 1104, 1108 (9th Cir.2002).
Where there is no applicable federal statute governing personal jurisdiction, the law of the state in which the district court sits applies. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir.2004). Because Idaho's long-arm statute, codified in Idaho Code § 5-514, allows a broader application of personal jurisdiction than the Due Process Clause, the Court need look only to the Due Process Clause to determine personal jurisdiction.3
The exercise of personal jurisdiction over a defendant comports with federal due process only if the defendant “has certain minimum contacts with the relevant forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1205 (9th Cir.2006) (en banc) (internal quotation marks omitted). Sufficient minimum contacts gives rise to general jurisdiction or specific jurisdiction. Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir.2001). General jurisdiction applies if the defendants' activities in the forum “are substantial, continuous and systematic,” while specific jurisdiction applies if the defendants' “less substantial contacts with the forum give rise to the cause of action before the court.” Id.
General jurisdiction exists when a defendant's contacts with the forum state approximate physical presence. Schwarzenegger, 374 F.3d at 801. Although Defendants have sold their products to citizens of Idaho, and have shipped their products to a warehouse in Idaho, this is insufficient to meet the high standard for general jurisdiction. See Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir.1986).
The Ninth Circuit analyzes specific jurisdiction using a three-prong test:
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