Edgenet, Inc. v. GS1 U.S. Inc.
| Decision Date | 27 June 2011 |
| Docket Number | Case No. 09-CV-65 |
| Parties | EDGENET, INC., Plaintiff, v. GS1 U.S., INC., 1SYNC, INC., AMERICAN HARDWARE MANUFACTURERS ASSOCIATION, and GS1 AISBL, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
On April 22, 2011, defendant GS1 AISBL ("GS1 Global") filed a Motion to Dismiss for Lack of Jurisdiction (Docket #87) pursuant to Federal Rule of Civil Procedure 12(b)(2). The motion follows the court's recent decision dismissing a number of plaintiff Edgenet, Inc.'s ("Edgenet") claims in its Second Amended Complaint. Because the court dismissed, inter alia, Edgenet's conspiracy claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), GS1 Global is no longer subject to the nationwide service of process authorized under RICO. As such, GS1 Global has renewed its earlier motion to dismiss for lack of personal jurisdiction that it made prior to the inclusion of Edgenet's RICO claim. GS1 Global has incorporated its earlier briefing, as has Edgenet, in addition to further briefing with regard to this motion. Because the court concludes that it lacks personal jurisdiction over GS1 Global, it will grant the motion to dismiss.
BACKGROUND
The plaintiff bears the burden of establishing personal jurisdiction and need only make a prima facie showing, thus the court must "take as true all well-pleaded facts alleged in the complaint and resolve any factual disputes in the affidavits in favor of the plaintiff." Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). GS1 Global is an international non-profit organized under the laws of Belgium and with its principal office in Brussels, Belgium. (Second Am. Compl. ¶ 8) (Docket #43); (Walsh Decl. ¶ 1) (Docket #16). It maintains an office, alleged by Edgenet to be its principal place of business, in Lawrenceville, New Jersey. (Second Am. Compl. ¶ 8). GS1 Global develops and controls certain standards and products, such as bar codes, used by suppliers and retailers to move products through the global supply chain. (Second Am. Compl. ¶ 9). GS1 Global has no office or registered agent for service of process in Wisconsin. (Walsh Decl.¶¶ 3-4). In this action, Edgenet has alleged that GS1 Global improperly obtained Edgenet's trade secrets and copyrighted work and then improperly disseminated those materials, as well as improperly made use of those materials.
GS1 Global has direct control over the website http://www.gs1 .org. (Walsh Decl. ¶ 10); (Rudolph Decl. ¶¶ 29-30) (Docket #20); (Second Am. Compl. ¶ 179). That website contains an "on-line Community Room," GS1 Global's Global Data Dictionary, and provides a means of accessing the Global Standards ManagementProcess. (Walsh Decl. ¶ 10); (Rudolph Decl. ¶ 33-34, 36); (Shaw Decl. Ex. H) (Docket #89).
The Community Room is available to any user that registers an account with GS1 Global and provides a place to participate in the Global Standards Management Process, facilitating communication between users as well as with GS1 Global. (Rudolph Decl. ¶¶ 36, 38-39); (Walsh Decl. ¶ 10). The Community Room provides a location to view and comment on Global Data Synchronization Network ("GDSN") rules, amended rules, and proposed rules. (Rudolph Decl. ¶ 39). In 2008, Edgenet alleges that portions of its trade secrets and copyrighted works were posted in the Community Room in formats that could be viewed and downloaded by any registered user. (Second Am. Compl. ¶¶ 77, 93).
The Global Standards Management Process ("GSMP") is used by GS1 Global to develop standard methods and rules for describing the product information exchanged through the GDSN. (Rudolph Decl. ¶ 32). The GSMP is conducted according to rules published in the GSMP Manual, published by GS1 Global and also made available for download on its website. (Rudolph Decl. ¶ 33). GS1 Global supervises the GSMP and is responsible for ratifying changes to both the GDSN Rules as well as the GSMP rules. (Rudolph Decl. ¶ 33).
The Global Data Dictionary is used to "store, reuse and share precise core component and business definitions and their equivalent representations in targeted standards." (Shaw Decl. Ex. H). The Global Data Dictionary is made available to all GDSN users by virtue of its availability through the website. (See Shaw Decl. Ex. H).
GS1 Global develops and administers XML1 standards for electronic business messages and the standards are part of the GDSN Rules. (Rudolph Decl. ¶ 47). Edgenet uses these XML standards in Wisconsin to encode data from Wisconsin GDSN users who belong to Edgenet's data pool.2 (Rudolph Decl. ¶ 48). This encoding is required before the data is transmitted to the Global Registry or other data pools, including other data pools in Wisconsin. (Rudolph Decl. ¶ 48). The Global Registry is explained below.
GS1 GDSN, Inc. ("GS1 GDSN"), not a party here, is effectively a wholly-owned subsidiary of GS1 Global. (Second Am. Compl. ¶ 20); (Rudolph Decl. ¶ 14& Ex. 7); (see also GS1 Global Reply Br. 6) (Docket #26) (admitting, at least for purposes of motion, that GS1 Global is the sole member of GDSN, Inc., making it equivalent to a wholly-owned subsidiary). GS1 Global supervises the Global Registry and provides instruction to GS1 GDSN. (Rudolph Decl. ¶ 17). GS1 Global's CEO and President is also a member of GS1 GDSN's board, and the president of GS1 GDSN reports to GS1 Global's CEO and President. (Rudolph Decl. ¶ 17). Additionally, GS1 GDSN's policies must be approved by GS1 Global. (Rudolph Decl. ¶ 18). Recently, GS1 GDSN did not earn enough revenue to cover expenses and thus had to secure a loan from GS1 Global. (Rudolph Decl. ¶ 19). In order to bring in revenue, GDSN users pay fees to data pool providers, such as Edgenet, who then pay subscription fees to GS1 GDSN. (Rudolph Decl.¶¶ 23-24).
GS1 Global develops and administers the GDSN, an internet-based network of interconnected data pools used to transmit product data. (Second Am. Compl. ¶j 18). However, GS1 GDSN runs the day-to-day operations with regard to the GDSN. (See Second Am. Compl. ¶¶ 18-20); (See also Rudolph Decl. ¶ 17). This includes forming participation agreements with users, permitting their use of the GDSN. (Rudolph Decl. ¶ 27). The GDSN contains a structure and rules for describing product attributes, a taxonomy used to classify and disseminate GDSN data, and data pools operated as clearinghouses for GDSN data. (Second Am. Compl. ¶¶ 18-19). There are approximately 183 Wisconsin companies that use the GDSN. (Rudolph Decl. ¶ 26 & Ex. 10). The GDSN is governed by a set ofstandards and rules ("GDSN Rules"), developed and administered by GS1 Global. (Rudolph Decl. ¶¶ 33-34). GDSN Rules must be approved by GS1 Global before going into effect. (Rudolph Decl. ¶ 34). The GDSN Rules are published on GS1 Global's website and may also be downloaded there. (Rudolph Decl. ¶ 29 & Ex. 12). GDSN users are required to be familiar with the GDSN Rules and comply with them as a condition of use. (Rudolph Decl. ¶ 27 & Ex. 11).
Additionally, GS1 GDSN also operates the Global Registry, part of the GDSN system. (Rudolph Decl. ¶¶ 17, 40). The Global Registry acts as a central information directory, detailing subscription information, guaranteeing the uniqueness of registered items and parties, and ensuring all data pools in the GDSN comply with rules. (Rudolph Decl. Ex. 19). GS1 Global provides information about the Global Registry on its website. (Rudolph Decl. ¶ 40). GDSN users, including those in Wisconsin, register their products on the Global Registry. (Rudolph Decl. ¶¶ 40-45).
GS1 U.S., Inc. ("GS1 U.S.") is a member organization of GS1 Global. (Second Am. Compl. ¶ 10). GS1 Global shares office space with GS1 U.S. in New Jersey. (Second Am. Compl. ¶¶ 9-10). From 2004 to 2009, GS1 Global's current CEO and President served as CEO for both GS1 Global and GS1 U.S. (Second Am. Compl. ¶ 12). Companies that wish to obtain GS1 Global-controlled bar codes or that wish to exchange product data through the GDSN must obtain a "company prefix" made available only through these member organizations. (Second Am.Compl. ¶ 21). GS1 Global's website specifically directs individuals to these member organizations. (Shaw Decl. Ex. C). GS1 U.S. is the sole source for U.S. companies, including those in Wisconsin, to obtain a company prefix. (Second Am. Compl. ¶ 21).
ANALYSIS
Edgenet has not established that this court has either general or specific jurisdiction over GS1 Global and it will, therefore, grant the motion to dismiss. Personal jurisdiction over a non-resident defendant exists so long as the law of the state in which the district court is located authorizes such jurisdiction. Fed. R. Civ. P. 4(k)(1); Janmark, Inc. v. Reidy, 132 F.3d 1200, 1201 (7th Cir. 1997).3 Subjection to personal jurisdiction in Wisconsin requires satisfaction of the state's long-arm statute, Wis. Stat. § 801.05, as well as a finding that the exercise of jurisdiction comports with constitutional due process. Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis. 2d 396, 629 N.W.2d 662. Upon a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing a prima facie case for such jurisdiction. Steel Warehouse of Wis., Inc. v. Leach, 154 F.3d 712, 714 (7th Cir. 1998). Upon demonstration of a prima facie case, the burden shifts to the defendant to show that the exercise would violate due process. Id.
Under the Constitution, due process requires certain minimum contacts with the forum state in order to exercise personal jurisdiction. Cent. States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 942-43 (7th Cir. 2000) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76 (1985)). Sufficient minimum contacts depend on whether the exercise is one of...
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