Diece-Lisa Indus. v. Disney Store USA, L.L.C.
| Decision Date | 23 March 2020 |
| Docket Number | Case No. 2:12-cv-00400-RWS-RSP |
| Parties | DIECE-LISA INDUSTRIES, INC., Plaintiff, v. DISNEY STORE USA, L.L.C., DISNEY SHOPPING, INCORPORATED, BUENA VISTA HOME ENTERTAINMENT, INCORPORATED, WALT DISNEY STUDIOS MOTION PICTURES, BUENA VISTA THEATRICAL GROUP, LIMITED, DISNEY INTERACTIVE STUDIOS, INCORPORATED, DISNEY LICENSED PUBLISHING-DISNEY BOOK GROUP, L.L.C., WALT DISNEY RECORDS, DISNEY DESTINATIONS, L.L.C., WALT DISNEY PARKS, RESORTS U.S., INCORPORATED, MAGICAL CRUISE COMPANY, LIMITED, and MAGIC KINGDOM, INCORPORATED, Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
Before the Court is an Opposed Motion to Transfer to the Central District of California, Western Division ("Motion to Transfer"), which was filed by Buena Vista Home Entertainment, Inc., Buena Vista Theatrical Group, Ltd., Disney Consumer Products, Inc., Disney Destinations, LLC, Disney Enterprises Inc, Disney Interactive Studios, Inc., Disney Licensed Publishing-Disney Book Group, LLC, Disney Shopping, Inc., Disney Store USA, LLC, Magic Kingdom, Inc., Magical Cruise Co., Ltd., Walt Disney Parks & Resorts U.S., Inc., Walt Disney Records, Walt Disney Studios Motion Pictures. Dkt. No. 165.1 After due consideration, the Court will transfer this case to the Central District of California, Western Division pursuant to § 1404(a).
"For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). To determine whether venue transfer is appropriate under § 1404(a), the Fifth Circuit has adopted several private and public interest factors. In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) ("Volkswagen II"). The private interest factors include (1) the availability of compulsory process to secure the attendance of witnesses; (2) the cost of attendance for willing witnesses; (3) the relative ease of access to sources of proof; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. Id. The public interest factors include (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems with conflict of law. Id.
A plaintiff's choice of venue is not an express factor in the analysis. Seven Networks, LLC v. Google LLC, 2:17-CV-00442-JRG, 2018 WL 4026760, at *2 (citing Volkswagen II, 545 F.3d at 315). However, a moving defendant must demonstrate that the proposed venue is clearly more convenient that the original venue. Id. (citing Volkswagen II, 545 F.3d at 315). By applying thisheightened standard, the plaintiff's choice of forum is given the appropriate deference. Id. (citing Volkswagen II, 545 F.3d at 315).
As an initial matter, the Court notes that this case could have been filed in the Central District of California ("C.D. Cal.").2 The Court also notes that Plaintiff fails to engage on the vast majority of the convenience factors within its Response. See generally Dkt. No. 171. Instead, Plaintiff argues that "although the private and public interest factors apply to most transfer cases, they are not necessarily exhaustive or exclusive, and no single factor is dispositive." Id. at 4 (internal citations and marks omitted). While it is true that relevant facts should be considered even if they do not neatly fit into a given transfer factor, Defendants' arguments on these factors are largely unrebutted. Because of this and because of the strength of Defendants' arguments, the Court concludes that C.D. Cal is a clearly more convenient forum and that transfer is appropriate. The Court will proceed through each of the factors below.
Here, the "other practical problems that make trial of a case easy, expeditious, and inexpensive" factor weighs strongly in favor of transfer, and Plaintiff has not shown otherwise. This Court appears to lack personal jurisdiction over at least Magic Kingdom, Inc. ("MKI"), Magical Cruise Co., Ltd. ("MCC"), and Walt Disney Parks & Resorts U.S., Inc. ("WDPR"). All of the defendants could be addressed at once in C.D. Cal., while this Court could only resolve issues fora subset of those defendants in this district. Transfer is appropriate in this case for several reasons: (1) to maximize the efficiency of the proceedings by resolving issues in one forum rather than engaging in multi-district litigation; (2) to minimize the risk of conflicting rulings; and (3) to eliminate any issues with the statute of limitations that would be created by dismissing this case without prejudice. Transfer is also appropriate because Plaintiff has previously argued that all of these Defendants should be addressed in one proceeding.
Personal jurisdiction over MKI, WDPR, and MCC appears to be lacking for two primary reasons: (1) Plaintiff argues that the acts of some Disney entities should be imputed to other Disney entities, but Plaintiff has not sufficiently overcome the presumption of institutional independence; and (2) Plaintiff has not otherwise shown how MKI, WDPR, and MCC are subject to personal jurisdiction in this Court under a specific jurisdiction theory based on contacts that are attributable to those entities.
Within the Fifth Circuit's previous decision in this case, the Fifth Circuit provided guidance on the "presumption of institutional independence":
"Generally, the proper exercise of personal jurisdiction over a nonresident corporation may not be based solely upon the contacts with the forum state of another corporate entity with which the defendant may be affiliated." Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 346 (5th Cir. 2004). This "presumption of institutional independence . . . may be rebutted," however, "by 'clear evidence,' which requires a showing of 'something beyond' the mere existence of a corporate relationship between a resident and nonresident entity." Id. In determining whether the plaintiff "has overcome the presumption of corporate separateness" such that the corporations may be "fuse[d] . . . for jurisdictional purposes," the following factors, referred to as the Hargrave factors, guide our inquiry: "(1) the amount of stock owned by the parent of the subsidiary; (2) whether the entities have separate headquarters, directors, and officers; (3) whether corporate formalities are observed; (4) whether the entitiesmaintain separate accounting systems; and (5) whether the parent exercises complete control over the subsidiary's general policies or daily activities." Id; see also Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir. 1983). We have noted that "the maintenance of corporate formalities tips in favor of finding that the entities are not alter egos," even where other factors support an alter ego relationship. Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 588 (5th Cir. 2010); see also Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 773-74 (5th Cir. 1988) ().
Diece-Lisa Indus., Inc. v. Disney Enterprises, Inc., 943 F.3d 239, 251 (5th Cir. 2019).
The Fifth Circuit determined that Plaintiff had not overcome the presumption of institutional independence for the two "IP entities" in the case. Id. at 250-52.3 In doing so, the Fifth Circuit noted that Plaintiff "makes the conclusory assertion that 'the infringement by all the . . . Disney companies is . . . interconnected and tightly controlled' but includes no facts explaining how Disney's retail entities or parent corporation exert such control over the IP entities such that jurisdiction over one corporation in the Disney enterprise could confer jurisdiction over all related entities." Id. at 252. The court then stated that "[t]hese conclusory allegations are insufficient for Diece-Lisa to make out a prima facie case of personal jurisdiction based on the franchise theory." Id. The court then rejected the other personal jurisdiction arguments raised by Plaintiff and then ultimately concluded that "the district court properly declined to exercise personal jurisdiction over the IP entities." Id. at 253.
Plaintiff's theory against the new parties is very similar to the theory against the IP Entities. Plaintiff argues that Defendants form one large, conglomerated company and that the contacts of various entities should be imputed between each other. Dkt. No. 168 at 3-7. To support thisproposition, Plaintiff argues that (1) DEI has made judicial admissions to show that all Disney entities are part of one big company (id. at 4-6), (2) that Disney requires licensees to tightly control the appearance of licensed products (id. at 6-7), and (3) that Disney cross-markets itself as one entity (id. at 7). However, these arguments are not strong enough individually or collectively to overcome the presumption of institutional independence.
Plaintiff does not raise significant arguments on four of the five Hargrave factors, including (1) the amount of stock owned by the parent of the subsidiary; (2) whether the entities have separate headquarters, directors, and officers; (3) whether corporate formalities are observed; and (4) whether the entities maintain separate accounting systems. And while Plaintiff argues that Disney requires licensees to tightly control the appearance of licensed products, this does not show that the parent exercises complete control over the subsidiary's general policies...
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