Motus, LLC v. CarData Consultants, Inc.

• Citation: 23 F.4th 115
• Decision Date: 18 January 2022
• Docket Number: No. 21-1226,21-1226
• Parties: MOTUS, LLC, a Delaware Limited Liability Company, Plaintiff, Appellant, v. CARDATA CONSULTANTS, INC., a Canada Corporation, Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

23 F.4th 115

MOTUS, LLC, a Delaware Limited Liability Company, Plaintiff, Appellant,

v.CARDATA CONSULTANTS, INC., a Canada Corporation, Defendant, Appellee.

No. 21-1226

United States Court of Appeals, First Circuit.

January 18, 2022

Jeffrey K. Riffer, with whom Julie Z. Kimball, Elkins Kalt Weintraub Reuben Gartside LLP, Geoffrey M. Raux, Andrew C. Yost, and Foley & Lardner LLP were on brief, for appellant.

Leah R. Bruno, with whom Philip A. O'Connell, Jr., Tony K. Lu, and Dentons US LLP were on brief, for appellee.

Before Lynch and Selya, Circuit Judges, and McConnell,^* District Judge.

SELYA, Circuit Judge.

Once challenged, in personam jurisdiction cannot be assumed into existence but, rather, must be demonstrated by the party who asserts it. This appeal illustrates the frailty of a litigation strategy that disregards this baseline rule.

In the underlying suit, plaintiff-appellant Motus, LLC (Motus) contends that defendant-appellee CarData Consultants, Inc. (CarData) committed trademark infringement and related wrongs by using a particular phrase in the meta title of its website.¹ After Motus sued CarData in the United States District Court for the District of Massachusetts, CarData moved to dismiss for want of in personam jurisdiction.² The district court dismissed Motus's suit without prejudice and denied its request for jurisdictional discovery. Motus appeals. After careful consideration, we affirm.

I

We start with the rudimentary facts. In view of the nascent stage at which this action was dismissed, "we — like the district court — take the facts from the pleadings and whatever supplemental filings (such as affidavits) are contained in the record, giving credence to the plaintiff's version of genuinely contested facts" and accounting for "undisputed facts put forth by the defendant."

Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016). In that process, we eschew any reliance on "unsupported allegations." Plixer Int'l, Inc. v. Scrutinizer GmbH, 905 F.3d 1, 6 (1st Cir. 2018).

Motus and CarData are both firms that, among other things, provide tools for managing businesses' reimbursement of employee expenses (such as employees' use of personal automobiles for business travel). Motus is a Delaware limited liability company that has its principal place of business in Boston, Massachusetts. CarData is a Toronto-based Canadian corporation. At the heart of the parties' dispute is a claimed trademark embodying the phrase "corporate reimbursement services" (the Phrase), in which Motus allegedly had developed proprietary rights.

As of the fall of 2019, the meta title of CarData's website (https://www.cardataconsultants.com/) read "Corporate Reimbursement Services, Vehicle Reimbursement Program | CarData." On November 5, 2019, Motus wrote to CarData asking that it remove the Phrase from the meta title. Within three days, CarData complied. Motus nonetheless filed suit against CarData, invoking the Lanham Act, 15 U.S.C. §§ 1051 - 1129, and seeking damages for trademark infringement, trademark dilution, and unfair competition. Its complaint also contained a number of supplemental state-law causes of action and prayers for additional remedies. The centerpiece of the action was Motus's allegation that it had developed "strong rights" in the use of the Phrase and that CarData had improperly coopted the Phrase.

As relevant here, CarData moved to dismiss for lack of in personam jurisdiction. See Fed. R. Civ. P. 12(b)(2). CarData argued that Motus had failed to plead a prima facie case for personal jurisdiction because "[w]hile [Motus] allege[d] that CarData maintains a [w]ebsite, it says nothing about how or why this Court would have jurisdiction over [CarData] as a result of the operation of that site and the only conduct of CarData identified in the Complaint relates to CarData's use of descriptive words in connection with that [w]ebsite." In support, CarData filed an affidavit and other exhibits.

Motus opposed the motion, arguing that CarData had "purposefully availed itself of the privilege of conducting activities within the U.S. and Massachusetts by, among other reasons (a) maintaining numerous offices in the United States and (b) marketing itself to and interacting with U.S. and Massachusetts customers through its website." To buttress its argument, Motus pointed to language and functionalities on CarData's website:

• "CarData's website claims that ‘CarData is North America's reliable source for "best in class" vehicle reimbursement solutions.’ " (emphasis supplied by Motus)

• "CarData's website claims that ‘[w]ith offices in Denver, New York[,] and Toronto, CarData clients range across industries, from Fortune 500 corporations to regional businesses.’ "

• CarData's website claims that "its online application allows customers to ‘[e]nter information into CarData Online, and it instantly calculates reimbursement specific to each driver's fixed and variable costs.’ " (alteration by Motus)

• CarData's website — specifically the " ‘Our Solutions’ and ‘Contact Us’ " pages on the website — "invite[s] users to ‘Get a Free Consultation’ or ‘Request a Demo.’ " The message box "asks users to submit information to CarData, including the user's name, email address, company name, number of drivers, and phone number, and states that a CarData representative will contact the user ‘shortly to schedule a free consultation.’ "

In addition, Motus proffered exhibits describing the aforementioned features of CarData's website and noted that "[n]o part of the website prohibits or discourages the participation of Massachusetts users." And in a single sentence and accompanying footnote, it asked the court — if it was disposed to grant the motion to dismiss for want of in personam jurisdiction — to allow it to conduct jurisdictional discovery.

CarData rejoined that the website content and functionalities did not show contacts with Massachusetts sufficient to permit the exercise of personal jurisdiction there. It also resisted Motus's contingent request for jurisdictional discovery.

The district court granted CarData's motion to dismiss. In a thoughtful rescript, it "conclude[d] that the purposeful availment requirement [wa]s not met because there [wa]s not ‘something more’ connecting CarData to the forum state beyond its website which is available to anyone with internet access, in any state." Motus, LLC v. CarData Consultants, Inc., 520 F. Supp. 3d 87, 92 (D. Mass. 2021). What is more, the court denied Motus's contingent request for jurisdictional discovery, noting that Motus had not acted diligently to "present facts to the court which show why jurisdiction would be found if discovery were permitted." Id. at 94 (quoting United States v. Swiss Am. Bank, Ltd. (Swiss Am. II ), 274 F.3d 610, 626 (1st Cir. 2001) ). This timely appeal followed.

II

It is common ground that a plaintiff, confronted with a motion to dismiss for want of in personam jurisdiction, must carry the burden of showing that personal jurisdiction is both statutorily authorized and consistent with the constitutional requirements of due process. See, e.g., Chen v. U.S. Sports Acad., Inc., 956 F.3d 45, 54 (1st Cir. 2020) ; United States v. Swiss Am. Bank, Ltd. (Swiss Am. I ), 191 F.3d 30, 36 (1st Cir. 1999). There are several barometers that may be used to determine whether a plaintiff has carried that burden, and the choice of which barometer is appropriate is informed by considerations such as the relative development of the record and the extent to which the jurisdictional issue is intertwined with the merits. See Chen, 956 F.3d at 51 ; Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145-46 (1st Cir. 1995).

Where, as here, a motion to dismiss for want of in personam jurisdiction is made at the inception of the case and the issue of jurisdiction is not intertwined with the merits, the prima facie approach controls. See Foster-Miller, 46 F.3d at 145-46 ; Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 676 (1st Cir. 1992). That approach "ask[s] only whether the plaintiff has proffered facts that, if credited, would support all facts ‘essential to personal jurisdiction.’ " Chen, 956 F.3d at 51 (quoting Foster-Miller, 46 F.3d at 146 ). When — as in this case — "a district court dismisses a case for lack of personal jurisdiction based on the prima facie record, rather than after an evidentiary hearing or factual findings, our review is de novo." Baskin-Robbins, 825 F.3d at 34 (quoting C.W. Downer & Co. v. Bioriginal Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014) ).

Subject-matter jurisdiction in this case is premised chiefly on the existence of a federal question. See 28 U.S.C. § 1331 ; see also 15 U.S.C. § 1121. In the mine-run of federal question cases, Federal Rule of Civil Procedure 4(k)(1) erects the framework for establishing personal jurisdiction by service of process. Under this framework, personal jurisdiction may derive either from a state long-arm statute that sets the boundaries of a state court's jurisdictional reach or from a federal statute permitting nationwide personal jurisdiction by service of process. See Fed. R. Civ. P. 4(k)(1)(A) ; (C). Here, the forum state is Massachusetts and there is no federal statute specially authorizing nationwide personal jurisdiction. Consequently, we must look to the compendium of Massachusetts statutes. See Swiss Am. I, 191 F.3d at 37.

Massachusetts has a long-arm statute. See Mass. Gen. Laws ch. 223A, § 3. To establish the existence of in personam jurisdiction, a plaintiff who seeks to hale a defendant into court in a particular forum not only must comply with the forum's long-arm statute but also must show that exercising such jurisdiction will comport with the requirements of due process. See Chen, 956 F.3d at 54.

Of course, objections to personal jurisdiction may be waived. See Copia Commc'ns, LLC v. AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016). If a defendant limits its jurisdictional objection...