Emissive Energy Corp.. v. Spa–simrad Inc.

• Decision Date: 13 April 2011
• Docket Number: Civil No. 09–567 S.
• Parties: EMISSIVE ENERGY CORPORATION, Plaintiff,v.SPA–SIMRAD, INC., Defendant.
• Court: U.S. District Court — District of Rhode Island

788 F.Supp.2d 40

EMISSIVE ENERGY CORPORATION, Plaintiff,

v.SPA–SIMRAD, INC., Defendant.

Civil No. 09–567 S.

United States District Court, D. Rhode Island.

April 13, 2011.

Christine K. Bush, Craig M. Scott, Anastasia A. Dubrovsky, Scott & Bush Ltd., Providence, RI, for Plaintiff.

Harris K. Weiner, Salter McGowan Sylvia & Leonard, Inc., Providence, RI, for Defendant.

MEMORANDUM AND ORDER

WILLIAM E. SMITH, District Judge.

Before the Court is Plaintiff Emissive Energy Corporation's (“Emissive”) objection to Magistrate Judge David L. Martin's September 24, 2010 Report and Recommendation (“R & R”), recommending that Defendant SPA–Simrad, Inc.'s (“SPA”) 12(b)(2) motion to dismiss for lack of personal jurisdiction be granted.

In considering an objection to an R & R, the Court conducts “a de novo determination of those portions of the [R & R] to which objection is made” and “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1) (2009); see Jasty v. Wright Med. Tech., Inc., 528 F.3d 28, 33 (1st Cir.2008). The Court adopts the R & R pursuant to 28 U.S.C. § 636(b)(1), except as modified below.

The relevant facts, procedural background, and analysis are fully set forth in the R & R. The Court limits its discussion to and presents only those facts pertinent to Plaintiff's objections.

I. Applicable Standard

Emissive objects to the preponderance of the evidence standard employed by Magistrate Judge Martin in the R & R, asserting that Federal Circuit law ¹ requires a plaintiff to make only a prima facie showing of personal jurisdiction where a district court does not hold an evidentiary hearing on a 12(b)(2) motion to dismiss. SPA counters that the prima facie standard is required only in the absence of discovery, which occurred here, not in the absence of an evidentiary hearing.

On March 8, 2010, Magistrate Judge Martin issued a Notice and Order (“Notice and Order”) ordering jurisdictional discovery and notifying the parties that he would apply the preponderance of the evidence standard (instead of the less onerous prima facie standard) in determining whether this Court should exercise personal jurisdiction over SPA. Mistakenly relying on First Circuit law, Magistrate Judge Martin opted for the heightened standard after the parties presented conflicting jurisdictional evidence regarding Defendant's business activities in Rhode Island.²

SPA is correct that, absent discovery, a “plaintiff[ ] need only make a prima facie showing of jurisdiction.” Nuance Commc'ns, Inc. v. Abbyy Software House, 626 F.3d 1222, 1231 (Fed.Cir.2010). However, the Federal Circuit has also enunciated that where jurisdictional facts are in dispute, a district court must hold an evidentiary hearing in order to impose the heightened preponderance standard. See Campbell Pet Co. v. Miale 542 F.3d 879, 888 (Fed.Cir.2008) (“Where, as here, the district court did not hold an evidentiary hearing, a plaintiff need only make a prima facie showing of jurisdiction to survive the motion to dismiss.”) (citations and quotation marks omitted); Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed.Cir.2003) (“[W]here the district court's disposition as to the personal jurisdictional question is based on affidavits and other written materials in the absence of an evidentiary hearing, a plaintiff need only to make a prima facie showing that defendants are subject to personal jurisdiction.”).

Nevertheless, Magistrate Judge Martin's Notice and Order made clear and gave ample notice to the parties that he would employ the preponderance standard in deciding the motion to dismiss. Emissive, however, “did not seek reconsideration of this determination, nor did it take an appeal from the Notice and Order.” (R & R at 13.) The R & R thus properly deemed the issue waived. See Fed.R.Civ.P. 72(a) (“A party may serve and file objections to [a magistrate judge's nondispositive order] within 14 days after being served with a copy.”); Cf. Espeaignnette v. Gene Tierney Co., 43 F.3d 1, 9 (1st Cir.1994) (“Normally ... failure to argue the correct applicable standard would effect a waiver of the issue.”); Pieczenik v. Dyax Corp., 265 F.3d 1329, 1334 (Fed.Cir.2001) (applying the preponderance standard after the parties informed the court that an evidentiary hearing was unnecessary).³

II. Personal Jurisdiction

Plaintiff also objects to Magistrate Judge Martin's determination that the Court lacks personal jurisdiction over Defendant. The R & R ably sets forth the analytical backdrop of the Supreme Court's personal jurisdiction jurisprudence; however, a brief recitation will help inform the present analysis.

In the Federal Circuit, “[d]etermining whether personal jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state's long-arm statute permits service of process, and whether the assertion of personal jurisdiction would violate due process.” Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1329 (Fed.Cir.2008) (quoting Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed.Cir.2001)). Because Rhode Island's long arm statute authorizes assertion of personal jurisdiction to the fullest extent permitted by the United States Constitution, Women & Infants Hosp. of R.I. v. Cmty. Health Network of Conn., Inc., 394 F.Supp.2d 488, 491 (D.R.I.2005) (citing Donatelli v. Nat'l Hockey League, 893 F.2d 459, 461 (1st Cir.1990)), the question becomes whether asserting personal jurisdiction over Defendant is consistent with the Due Process Clause. Brian Jackson & Co. v. Eximias Pharm. Corp., 248 F.Supp.2d 31, 35 (D.R.I.2003). “[T]he ultimate inquiry turns on whether there are sufficient contacts between [defendant] and the State of Rhode Island.” Central Tools, Inc. v. Mitutoyo Corp., 381 F.Supp.2d 71, 74 (D.R.I.2005) (citing Viam Corp. v. Iowa Export–Import Trading Co., 84 F.3d 424, 427 (Fed.Cir.1996)).

Due process is satisfied where a court has general or specific jurisdiction over a defendant. See Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1017 (Fed.Cir.2009). The Federal Circuit has held “in the context of patent infringement litigation that an assertion of general jurisdiction requires that the defendant have continuous and systematic contacts with the forum state, and that such activity will confer general personal jurisdiction even when the cause of action has no relationship with those contacts.” Avocent, 552 F.3d at 1331–32 (internal citation and quotation marks omitted). Specific jurisdiction is satisfied where: “(1) the defendant purposefully directed its activities at residents of the forum, (2) the claim arises out of or relates to those activities, and (3) assertion of personal jurisdiction is reasonable and fair.” Id. at 1332 (quoting Breckenridge Pharm., Inc. v. Metabolite Labs., Inc., 444 F.3d 1356, 1363 (Fed.Cir.2006)).

A. General Jurisdiction

Emissive tenders the following as evidence of this Court's general jurisdiction over SPA: (1) SPA's website, which lists and describes (but does not sell online) company products, and which contains contact information for officials in all fifty states with the power to authorize grants for purchasing SPA products; (2) SPA's issuance of four price quotations between 2002 and 2003 to three Rhode Island police departments (for sales that were never consummated); and (3) SPA's president's deposition testimony in a related action that the company “sells products” and “provides training services” in “every state.” (P's Obj. to R & R, Ex. 1.) SPA later controverted this testimony by submitting an affidavit by its president explaining that he meant SPA products were available for purchase throughout the entire United States. See supra note 4.

Even construing SPA's president's testimony in Emissive's favor, these allegations do not suggest that SPA ever consummated a single sale or other business transaction in Rhode Island. Indeed, if such evidence existed, it would have emerged in the jurisdictional discovery conducted in this case. As such, Emissive's evidence of SPA's activities in this forum is a far cry from demonstrating the “continuous and systematic general business contacts” needed to support general jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (finding the defendant's CEO's business trip to forum, acceptance of checks drawn on forum bank, and purchases of equipment from forum manufacturer insufficient to establish general jurisdiction); see also Campbell Pet, 542 F.3d at 884 (finding the defendant's 12 in-forum sales within 8 years and its website that generated no in-forum sales insufficient to establish general jurisdiction).

B. Specific Jurisdiction

Emissive has maintained throughout these proceedings that SPA is subject to the Court's specific jurisdiction under the so-called “effects” test of Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). It therefore strongly objects to the R & R for reaching a contrary conclusion without consideration of that decision. In light of the potential applicability of Calder to the present matter, the Court will reexamine, from scratch, whether specific jurisdiction over SPA is warranted. The Court proceeds mindful, however, that “[t]he effects test does not supplant the minimum contacts analysis, but rather informs it.” Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 280 (4th Cir.2009).

To begin, the R & R correctly notes that in the ordinary patent infringement suit, specific jurisdiction typically depends on the sale of the infringing products or services in the forum. Avocent, 552 F.3d at 1332. The ordinary patent infringement suit is one where “the claim asserted by the patentee plaintiff is that some act of making, using, offering to sell, selling, or importing products or services by the defendant constitutes an infringement of...