Lindora, LLC v. Isagenix Int'l, LLC

• Decision Date: 01 August 2016
• Docket Number: Case No. 15-cv-2754-BAS-RBB
• Citation: 198 F.Supp.3d 1127
• Court: U.S. District Court — Southern District of California
• Parties: LINDORA, LLC, a Delaware limited liability company, Plaintiff, v. ISAGENIX INTERNATIONAL, LLC, an Arizona limited liability company, and Ella Novokolsky, Defendants.

198 F.Supp.3d 1127

LINDORA, LLC, a Delaware limited liability company, Plaintiff,

v.ISAGENIX INTERNATIONAL, LLC, an Arizona limited liability company, and Ella Novokolsky, Defendants.

Case No. 15-cv-2754-BAS-RBB

United States District Court, S.D. California.

Signed August 1, 2016

Yuri Mikulka, Manatt, Phelps & Phillips, LLP, Costa Mesa, CA, for Plaintiff.

Brian G. Arnold, Snell & Wilmer LLP, Los Angeles, CA, Steven J. Cologne, Higgs Fletcher and Mack, San Diego, CA, for Defendants.

OPINION AND ORDER

Hon. Cynthia Bashant, United States District Judge

This action arises from Defendant Isagenix International, LLC's ("Isagenix") and Defendant Ella Novokolsky's ("Novokolsky") alleged use of Plaintiff Lindora, LLC's ("Lindora") "Lean for Life" marks. Before the Court is Isagenix's motion to dismiss for lack of personal jurisdiction and improper venue or, alternatively, to sever the claims against Isagenix and transfer those claims to the District of Arizona. (ECF No. 13.) Lindora opposes. (ECF No. 18.)

The Court finds the motion suitable for disposition on the papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). For the reasons explained below, the Court DENIES Isagenix's motion.

I. BACKGROUND

Plaintiff Lindora is a Delaware limited liability company with its principal place of business in Costa Mesa, California. (First Am. Compl. ("FAC") ¶ 1.) Lindora develops, markets, and sells weight management goods and services, including meal replacement shakes, protein bars, and diet planning services. (Id. ¶¶ 18, 19.) Since at least 1989, Lindora has used the marks "Lean for Life!" and "Lean for Life" (collectively, the "Lindora Marks") to promote and sell its products. (Id. ¶ 14.) Lindora registered the "Lean for Life!" mark with the U.S. Patent and Trademark Office ("USPTO") on December 20, 1994, and registered the "Lean for Life" mark with the USPTO on April 17, 2007. (Id. ¶¶ 18, 19.) Lindora asserts that the marks are a vital part of the company's goodwill and reputation, signaling to consumers that the products they are purchasing come from an industry leader known for high-quality goods and services. (Id. ¶ 16.)

Defendant Isagenix is an Arizona limited liability company with its principal place of business in Gilbert, Arizona. (Id. ¶ 2.) Founded in 2002, Isagenix is a multi-billion dollar network marketing company that develops, markets, and sells a variety of weight management products, including protein shakes and dietary supplements. (ECF No. 13 ("Mot.") 4:24–5:2; ECF No. 18 ("Opp'n") Exh. B.) As a network marketing company, Isagenix relies on a network of more than 500,000 "Independent Associates," located in various states and countries, to act as sales representatives and distributors for its products. (Mot. 4:24–5:2; FAC ¶¶ 9, 21.) Isagenix Associates earn commissions and bonuses through retail sales and by referring new customers. (Opp'n, Exh. C.) These Associates must abide by a set of policies and procedures that govern how they market and sell Isagenix products. (Id. )

Although Isagenix has no offices, salaried employees, or real property in California, California is a key market for Isagenix products. The company has more Associates in California than in any other state, and sells more products to purchasers in California than in any other state. (FAC ¶ 9; ECF No. 8-1 ("Suppl. Adams Decl.") ¶ 9.) Isagenix holds a variety of training workshops, promotional events, and annual conferences in San Diego, California, and in California more generally, at which the company trains Associates, recruits new Associates, and promotes new products. (FAC ¶ 10; Suppl. Adams Decl. ¶¶ 3, 4.) An estimated 12,000 Isagenix Associates reportedly attended the company's 2015 annual conference in San Diego, California. (Opp'n 5:9–15.)

Isagenix operates the website www.isagenix.com, from which it promotes Isagenix products and touts the income opportunities associated with becoming an Isagenix Associate. (FAC ¶¶ 5, 10.) Defendant Novokolsky is one such Associate who resides in San Diego County, California. (FAC ¶ 3.) Isagenix allows Associates such as Novokolsky to use www.isagenix.com as a platform for their own "back office" webpages, through which Associates can promote, sell, and order Isagenix products. (FAC ¶ 11; Mot. 5:16–21.) Novokolsky operates the back office webpage www.lean-for-life.isagenix.com as part of her sales and distribution efforts. (FAC ¶ 11.) In addition, Isagenix allegedly operates its own back office webpage at backoffice.isagenix.com from which consumers can directly place orders for Isagenix products. (ECF No. 18-1 ("Mikulka Decl.") ¶ 9.)

Lindora alleges that Isagenix has used the Lindora Marks, and confusingly similar marks, without permission, in marketing materials used to promote Isagenix products. The infringement is alleged to have taken several forms, including (1) Isagenix's use of the Lindora Marks in promotional materials on Isagenix's website, www.isagenix.com, (2) Isagenix's use of infringing marks during Isagenix training events, promotional tours, and annual conferences held in California, (3) Isagenix's use of the infringing marks in marketing materials that it provides to Isagenix Associates in California, and (4) Isagenix's approval of, or acquiescence to, the use of infringing materials on Associates' back office webpages, such as www.lean-for-life.isagenix.com. (FAC ¶¶ 9–11, 21–23, 36.) Lindora raises similar allegations against Novokolsky, alleging that she infringed the Lindora Marks on her back office webpage, and in related marketing materials. (Id. ¶¶ 5, 11, 36.) Finally, Lindora alleges that Isagenix willfully infringed the Lindora Marks by continuing to use the marks after Lindora sent a cease-and-desist letter to Isagenix on October 30, 2015. (Id. ¶ 28.)

Based on these allegations, Lindora brings claims against both Isagenix and Novokolsky for trademark infringement under the Lanham Act, 15 U.S.C. § 1114 ; false designation of origin and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a) ; trademark infringement under California common law; and unfair competition under California common law and California Business & Professions Code § 17200 et seq. (FAC 7–12.) Lindora also brings a claim for contributory trademark infringement against Isagenix only. (Id. 12–13.) Lindora alleges that Defendants' infringement has created a likelihood of customer confusion and has resulted in loss profits, damage to Lindora's goodwill and reputation, and diminution of the value of the Lindora Marks. (Id. ¶¶ 30, 33, 40.)

Isagenix now moves to dismiss the case for lack of personal jurisdiction and improper venue, or, alternatively, to sever the claims against Isagenix and transfer those claims to the District of Arizona.¹ Lindora opposes, and Isagenix has replied.²

II. LEGAL STANDARD

A federal court may only exercise personal jurisdiction where such jurisdiction satisfies both the forum state's long-arm statute and constitutional principles of due process. See Lee v. City of Los Angeles , 250 F.3d 668, 692 (9th Cir.2001) (citation omitted). Here, California's long-arm statute permits the exercise of jurisdiction to the fullest extent permitted by the U.S. Constitution. See Cal. Civ. Proc. Code § 410.10 ("[A] court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.") Thus, in this case, the jurisdictional analyses under state and federal law are the same, and the inquiry centers on whether the exercise of personal jurisdiction comports with federal due process. Picot v. Weston , 780 F.3d 1206, 1211 (9th Cir.2015) (citation omitted).

For a court to exercise personal jurisdiction over a defendant consistent with due process, that defendant must have sufficient "minimum contacts" with the forum state "such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ " Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer , 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940) ). In assessing minimum contacts, the Supreme Court has emphasized that "the defendant's conduct and connection with the forum State" must be such that the defendant "should reasonably anticipate being haled into court there." World–Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, 297, 100 S.Ct. 559 (1980), 62 L.Ed.2d 490. The personal jurisdiction requirement thus protects an individual's liberty interest "in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’ " Burger King Corp. v. Rudzewicz , 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Int'l Shoe Co. , 326 U.S. at 319, 66 S.Ct. 154 ). The nature and quality of contacts necessary to support personal jurisdiction depend upon whether the plaintiff asserts general or specific jurisdiction against the defendant. See Picot , 780 F.3d at 1211 ; Nutrishare , Inc. v. BioRX, L.L.C. , No. CIV. S–08–1252 WBS EFB, 2008 WL 3842946, at *2 (E.D.Cal. Aug. 14, 2008).

Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move to dismiss a complaint for lack of personal jurisdiction. In opposing a Rule 12(b)(2) motion, the plaintiff bears the burden of establishing that jurisdiction is proper. Boschetto v. Hansing , 539 F.3d 1011, 1015 (9th Cir.2008). Where, as here, the court considers the motion without holding an evidentiary hearing, "the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Mavrix Photo, Inc. v. Brand Tech., Inc. , 647 F.3d 1218, 1223 (9th Cir.2011) (quoting Brayton Purcell LLP v. Recordon & Recordon , 606 F.3d 1124, 1127 (9th Cir.2010) ). In other words, "the plaintiff need only demonstrate facts that if true would support jurisdiction over the defendant." Ballard v. Savage , 65 F.3d 1495, 1498 (9th Cir.1995).

In resolving ...