Kindig It Design, Inc. v. Creative Controls, Inc.

• Citation: 157 F.Supp.3d 1167
• Decision Date: 20 January 2016
• Docket Number: Case No. 2:14-cv-00867-JNP-BCW
• Parties: Kindig It Design, Inc., a Utah Corporation, Plaintiff, v. Creative Controls, Inc., a Michigan Corporation, Speedway Motors, Inc., a Nebraska Corporation, Rutter's Rod Shop, Inc., a North Carolina Corporation, and Does 1-18, Defendants.
• Court: U.S. District Court — District of Utah

157 F.Supp.3d 1167

Kindig It Design, Inc., a Utah Corporation, Plaintiff,

v.Creative Controls, Inc., a Michigan Corporation, Speedway Motors, Inc., a Nebraska Corporation, Rutter's Rod Shop, Inc., a North Carolina Corporation, and Does 1-18, Defendants.

Case No. 2:14-cv-00867-JNP-BCW

United States District Court, D. Utah.

Signed January 20, 2016

Frank W. Compagni, Bretton Leon Crockett, Morriss O'Bryant Compagni PC, Salt Lake City, UT, for Plaintiff.

Michael M. Jacob, Thomas N. Young, Young & Basile Hanlon & MacFarlane PC, Troy, MI, Michael R. McCarthy, Sarah E. Jelsema, Parsons Behle & Latimer, Salt Lake City, UT, for Defendants.

MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT CREATIVE CONTROLS, INC.'S MOTION TO DISMISS AND/OR TRANSFER PLAINTIFF'S SUPPLEMENTAL AND SECOND AMENDED COMPLAINT UNDER RULES 12(b)(2), (3) AND (6)

Jill N. Parrish, United States District Court Judge

INTRODUCTION

Kindig-It Design, Inc. (“Kindig”) brings this action against defendants Creative Controls, Inc. (“Creative Controls”), Speedway Motors, Inc., and Rutter's Rod Shop, Inc., claiming, among other things, that Creative Controls has infringed on Kindig's copyrights and patents. Creative Controls moves to dismiss on the basis that the court lacks personal jurisdiction over it. Alternatively, Creative Controls moves to transfer the case to Michigan and to dismiss various causes of action under Rule 12(b)(6) for failing to state a claim. The court held a hearing on the motion on September 24, 2015. Due to inadequacies in the briefing, the court requested additional memoranda from both parties, which were filed on October 12, 2015.

Kindig has met its burden of showing that Creative Controls has sufficient contacts with Utah to allow the court to exercise personal jurisdiction over it on the non-patent claims. It has not, however, met its burden for the patent claims. And Kindig has only sufficiently stated a claim under Rule 12(b)(6) for some, but not all, of its claims. Accordingly, the court GRANTS IN PART AND DENIES IN PART Creative Controls' motion to dismiss. (Docket 31).

FACTUAL BACKGROUND

In support of its motion to dismiss for lack of personal jurisdiction, Creative Controls offers an affidavit by its president detailing its lack of contacts with Utah. Creative Controls is a Michigan corporation. It has never maintained a regular or established place of business in Utah. It is not registered to do business in Utah, and has no employees in Utah. Creative Controls does not own any property in Utah. It also does not have any bank accounts in Utah. Kindig offers no evidence to contradict these assertions.

In arguing that this court has jurisdiction, Kindig points to four distinct “contacts” that Creative Controls allegedly has to Utah. First, Creative Controls maintained a website on which customers, including any from Utah, could place orders. Second, Creative Controls donated a custom parking brake for use on a car that Kindig was customizing. Third, Creative Controls made a single sale of a door handle to a Utah customer for $585. Fourth, Creative Controls allegedly copied photographs and contents from Kindig's Utah-based website.

Creative Controls' first alleged contact with Utah is the website it maintains. This website advertises Creative Controls' products and, at one time, allowed customers to place orders and make purchases. But there has been no evidence presented that the website specifically targets Utah customers. In fact, Creative Controls' president swears that it “does not systematically or otherwise target persons or firms as potential customers in the state of Utah for the sale of any products.” Kindig offers no evidence to contradict this testimony.

Creative Controls' second alleged contact with Utah occurred approximately five years ago when Creative Controls donated to Kindig a custom parking brake for a car that Kindig was customizing. Creative Controls sent the brake to Kindig's place of business in Utah. In return, Kindig sent Creative Controls a disk containing photographs of the finished car. Accompanying the disk was a letter from Kindig indicating that Creative Controls could use the photographs for promotional purposes. The photographs on the disk are among the copyrighted photographs that Kindig alleges Creative Controls illegally copied.

Creative Controls' final alleged contact with Utah is a single sale made to a Utah customer. The customer, a Utah resident, placed an order on Creative Controls' website. The order was delivered to the customer's residence in Utah. However, the customer was a relative of a Kindig employee and Kindig admits that the order was made at its request in preparation for this litigation. At oral argument, the parties agreed that it would be improper to subject Creative Controls to personal jurisdiction on the basis of this contact.

DISCUSSION

Creative Controls argues that this court lacks personal jurisdiction over it. Whether a court may exercise personal jurisdiction over a defendant depends on the defendant's contacts with the forum state. Those contacts may give rise to either general or specific personal jurisdiction. A party is subject to general personal jurisdiction only when its “affiliations with the [forum] State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Daimler AG v. Bauman , –––U.S. ––––, 134 S.Ct. 746, 755, 187 L.Ed.2d 624 (2014)

(quoting Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) ). In this case, the parties agree that Creative Controls' limited contacts with Utah are insufficient to give rise to general personal jurisdiction. Accordingly, the court's analysis is confined to specific personal jurisdiction.

Specific personal jurisdiction exists only when the plaintiff's claims arise out of the defendant's contacts with the forum. Thus, the court must consider each of Kindig's claims separately to determine whether they arise from any of Creative Controls' contacts with Utah. And because several of Kindig's claims are factually unrelated, the specific contacts alleged by Kindig may relate to some of Kindig's claims, but not to others. The patent infringement claims, for example, are factually unrelated to the copyright infringement claims. This means that the court may have specific personal jurisdiction over Creative Controls for some of the Kindig's claims, but not for others.

When a court has specific personal jurisdiction over only some of a plaintiff's claims, the doctrine of pendent personal jurisdiction may allow the court to exercise personal jurisdiction over the remaining claims. Pendent personal jurisdiction “exists when a court possesses personal jurisdiction over a defendant for one claim, lacks an independent basis for personal jurisdiction over the defendant for another claim ... and then, because it possesses personal jurisdiction over the first claim, asserts personal jurisdiction over the second claim.” United States v. Botefuhr , 309 F.3d 1263, 1272 (10th Cir.2002)

. But this doctrine is only applicable when the claims are sufficiently related. Accordingly, the final step in the jurisdictional analysis is to consider whether the court may exercise pendent personal jurisdiction over Creative Controls for any claim over which it lacks specific personal jurisdiction.

I. The Court May Exercise Specific Personal Jurisdiction Over Creative Controls for Only Some of Kindig's Claims

To determine whether the court has personal jurisdiction over Creative Controls, the court must first determine whether to apply Tenth Circuit or Federal Circuit law. Both circuits agree that where, as in Utah, “the state long arm statute supports personal jurisdiction to the full extent constitutionally permitted, due process principles govern the inquiry.” Shrader v. Biddinger , 633 F.3d 1235, 1239 (10th Cir.2011)

; see

3D

Sys., Inc. v. Aarotech Labs. Inc. , 160 F.3d 1373, 1377 (Fed.Cir.1998) (explaining that the Federal Circuit defers “to the interpretation of a state's long-arm statute given by that state's highest court”); Starways, Inc. v. Curry , 980 P.2d 204, 206 (Utah 1999) (explaining that the Utah long arm statute extends to the fullest extent permitted by due process). Accordingly, the inquiry is whether Federal Circuit law or Tenth Circuit law governs the due process analysis.

On the patent-related claims, Federal Circuit law governs the due process analysis for personal jurisdiction purposes. 3D Sys. , 160 F.3d at 1377

(explaining that for patent-related claims “when analyzing personal jurisdiction for purposes of compliance with federal due process, Federal Circuit law, rather than regional circuit law, applies”). In contrast, on the non-patent-related claims, Tenth Circuit law controls. See

Silent Drive, Inc. v. Strong Indus., Inc. , 326 F.3d 1194, 1201 (Fed.Cir.2003) (discussing when Federal Circuit law or regional circuit law applies to personal jurisdiction analysis). The following general principles, however, apply in both circuits.

Under both Federal Circuit and Tenth Circuit law, the plaintiff bears the initial burden of establishing personal jurisdiction. See Shrader , 633 F.3d at 1239

(explaining the burden); Elecs. for Imaging, Inc. v. Coyle , 340 F.3d 1344, 1350 (Fed.Cir.2003) (explaining the burden). But where, as here, a motion to dismiss is made with no request for an evidentiary hearing, “the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion.” Emp'rs Mut. Cas. Co. v. Bartile Roofs, Inc. , 618 F.3d 1153, 1159 (10th Cir.2010) (quoting AST Sports Sci., Inc. v. CLF Distribution Ltd. , 514 F.3d 1054, 1056–57 (10th Cir.2008) ); Elecs. for Imaging , 340 F.3d at 1349 (describing an identical standard under Federal Circuit law). “The plaintiff may carry this burden ‘by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.’ ” Emp'rs Mut. Cas....