Richards v. Tsunami Softgoods, Inc., No. 02-101-PC.

• Decision Date: 17 January 2003
• Docket Number: No. 02-101-PC.
• Citation: 239 F.Supp.2d 80
• Parties: Sarah Lynn RICHARDS, Plaintiff, v. TSUNAMI SOFTGOODS, INC., Gemini Fashions of Canada, Ltd., and Catalog Ventures Inc., Defendants.
• Court: U.S. District Court — District of Maine

239 F.Supp.2d 80

Sarah Lynn RICHARDS, Plaintiff, v. TSUNAMI SOFTGOODS, INC., Gemini Fashions of Canada, Ltd., and Catalog Ventures Inc., Defendants.

No. CIV.02-101-PC.

United States District Court, D. Maine.

January 17, 2003.

Daniel J. Mitchell, Esq., Bernstein, Shur, Sawyer, & Nelson, Portland, ME, for plaintiff.

Christian T. Chandler, Esq., Curtis, Thaxter, Stevens, Broder, & Micoleau, Portland, ME, for defendants.

MEMORANDUM OF DECISION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

GENE CARTER, Senior District Judge.

Now before the Court is a Motion to Dismiss by Defendants Tsunami Softgoods, Inc. ("Tsunami") and Gemini Fashions of Canada, Ltd. ("Gemini") (Docket Item No. 4) in an action by Plaintiff Sarah Richards for copyright infringement under the Federal Copyright Act of 1976, as amended, 17 U.S.C. § 101 et seq. In then-Motion to Dismiss, Defendants invoke Fed. R.Civ.P. 12(b)(2) and contend that they lack sufficient contacts with the state of Maine to allow this Court to establish personal jurisdiction over them. On November 18, 2002, this Court ordered the parties to brief the personal jurisdiction issue under the recently developed test set forth in United States v. Swiss Am. Bank Ltd., 191 F.3d 30 (1st Cir.1999) (Swiss II), which assesses the amenability of foreign defendants in federal question cases to the jurisdiction of the federal courts in the United States, using the recently enacted Rule 4(k) of the Federal Rules of Civil Procedure. See Order (Docket Item No. 15). The Court understands the arguments under Rule 4(k) to be in the alternative to those already set forth in the original Motion to Dismiss and responses thereto. This issue has now been fully briefed, and after careful review and consideration of the pleadings filed with this Court to date, the Court will grant Defendants' Motion to Dismiss without prejudice.

I. Legal Standard

On a motion to dismiss for lack of personal jurisdiction, it is the plaintiffs burden to make a prima facie showing of personal jurisdiction by demonstrating the existence of "every fact required to satisfy both the forum's long-arm statute and the [D]ue [P]rocess [C]lause of the Constitution" when the court's decision will be made on the basis of the pleadings. Boit v. Gar-Tec Products, Inc., 967 F.2d 671, 675 (1st Cir.1992). (internal citation omitted). See also United Elec., Radio and Mack Workers of America (UE) v. 163 Pleasant Street Corp., 987 F.2d 39, 43 (1st Cir.1993) (Pleasant Street II). The plaintiff must cite to specific evidence in the record, and the court must accept the proffered facts as true and view them in the light most favorable to plaintiff. Pleasant Street II, 987 F.2d at 44 (citing Boit, 967 F.2d at 675). In ruling on a motion to dismiss for lack of personal jurisdiction the court must also consider any uncontested facts put forward by the defendant. Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 51 (1st Cir.2002).

The personal jurisdictional reach of a court sitting in a federal question case differs from that of a court sitting in diversity. See 18 U.S.C. § 1332. In a federal question case, "the constitutional limits of the court's personal jurisdiction are fixed ... not by the Fourteenth Amendment but by the Due Process Clause of the Fifth Amendment." United States v. Swiss Am. Bank, Ltd. 274 F.3d 610, 618 (1st Cir.2001) (Swiss PV) (quoting United Elec. Radio and Mack Workers of America (UE) v. 163 Pleasant St. Corp., 960 F.2d 1080,1085 (1st Cir.1992) (Pleasant Street I)). Under the Fifth Amendment, the federal court's power to assert personal jurisdiction is geographically expanded due to the absence of the federalism concerns that are normally present in a diversity case. Pleasant Street I, 960 F.2d at 1085. This means that "a plaintiff need only show that the defendant has adequate contacts with the United States as a whole, rather than with a particular state." Swiss TV, 274 F.3d at 618. That being said, however, the plaintiff must still ground its service of process in a federal statute or civil rule. See id. See also Lorelei Corp. v. County of Guadalupe, 940 F.2d 717, 719 (1st Cir. 1991) ("Although there is no direct constitutional check on the district court's exercise of personal jurisdiction over a United States resident in a federal question case, there is a statutory limitation.").

Statutory authorization can come from a federal statute, or it may come from the forum state's personal jurisdiction rules, in which case the inquiry ends up being the same as that of a federal court sitting in diversity. See Pleasant Street I at 1086. Alternatively, authorization may come from Federal Rule of Civil Procedure 4(k)(2), in the case of a plaintiff seeking to assert personal jurisdiction over a foreign defendant. Swiss II, 191 F.3d at 36. In the instant case, authorization to exercise personal jurisdiction can come from only the latter two options—the Maine long-arm statute or Rule 4(k)(2)—because the federal copyright statute does not provide for national or worldwide service of process. See Fort Knox Music, Inc. v. Baptiste, 203 F.3d 193,196 (2d Cir.2000).

II. Facts

Plaintiff Sarah Richards creates original watercolor paintings and lithograph prints, which she markets and sells through her own art gallery as well as through more than 75 art dealers located in 29 states throughout the United States. Complaint (Docket Item No. 1) Ml 1, 6. Defendants are Tsunami Softgoods, Inc., a Utah corporation with a principal place of business in Park City, Utah, and Gemini Fashions of Canada, Ltd., a Canadian corporation with a principal place of business in Winnipeg, Manitoba, Canada. See Motion of Defendants Gemini Fashions of Canada, Ltd. and Tsunami Softgoods, Inc. to Dismiss for Lack of Personal Jurisdiction and Incorporated Memorandum of Law (Docket Item No. 4), Exhibit B, Affidavit of Todd Arenson H 2; Complaint 1110.

Tsunami does not sell or manufacture any goods; it is a design and development company for the outdoor fashion industry, and it licenses its designs to companies such as Gemini for manufacture and sale. Arenson Aff. ¶ 3. At the time of the alleged infringement, Tsunami employed a total of four people, none of whom were located in, or ever traveled to, Maine to solicit or secure business. Id. 11114-5. Tsunami does not advertise in any publication or journal targeted to Maine or maintain a telephone or other communication device within Maine, nor does it maintain a website on the worldwide web. Id. ¶ 5. All of Tsunami's work is performed in Park City, Utah. Id. ¶ 6.

Here, Gemini and Tsunami have a licensing agreement whereby all Tsunami brand products are licensed to Gemini; all design work for these products is done at the Tsunami office in Park City, Utah, and all manufacturing activities take place in Winnipeg, Manitoba, Canada, as well as in several Asian countries. Defendants' Motion to Dismiss, Exhibit A, Affidavit of Robert Forbes ¶¶ 7-8. Gemini does not maintain any facilities within the United States and does not have any employees in the United States. Id. ¶ 3-4. All Gemini sales are made through a combination of independent regional sales representatives located in various states throughout the United States and Gemini sales managers located in Winnipeg. "Sales administration" for Gemini in the United States is through an independent contractor, Apollo Concepts of Boise, Idaho. Forbes Aff. ¶ 3. Sales of Tsunami-branded products in the state of Maine are covered by the independent northeast regional sales representative located in Dorset, Vermont. Id. ¶ 3-4. According to Gemini, it does not control or direct the activities of these regional sales representatives, who make most of their sales contacts at national, international, or regional trade shows. Id. ¶ 5. Orders for Gemini are placed with these independent sales representatives. Id. ¶ 6. During the 2001-2002 booking season,¹ Gemini made a total of $54,350 in sales to accounts in Maine. Id. 1110. During the 1999-2000 and 2000-2001 booking seasons, sales to Maine amounted to approximately $25,927 for each year. Supplemental Affidavit of Robert W. Forbes (Docket Item No. 12) 113. Gemini does not advertise in any publication targeted to Maine or in any Maine publication. Forbes Aff. ¶ 5.

In 1998, Plaintiff painted an original work entitled "Drums on the Mesa," and registered the painting with the United States Copyright Office on November 9, 2001. Complaint 1116. Plaintiff alleges that Defendants Tsunami and Gemini have used this copyrighted work on several items of clothing and accessory products manufactured or sold by them and that they have used her work in their marketing literature. Id. 111120-27. Plaintiff first became aware of the alleged infringement in the fall of 2001, when she received a copy of a catalog that contained the alleged infringing products. Affidavit of Sarah Lynn Richards (Docket Item No. 10) Hit 2-3. Between October 2001 and April 2002, Plaintiff purchased various products from different catalogs that purported to bear her copyrighted work. These products were delivered to Plaintiff at her home in Bristol, Maine. Id. 1114-5. On January 2, 2002, Plaintiff informed Defendants in writing that their products copied her copyrighted work and infringed her copyrights, and she requested each of them to cease and desist their alleged infringing conduct. Complaint 132. Despite her requests, Plaintiff believes that Defendants still continue to manufacture, market, sell, and otherwise distribute their products with the use of her copyrighted work. Id. 133.

III. Discussion

In this case, personal jurisdiction can be established only under the Maine long-arm statute or under Federal Rule of Civil Procedure 4(k)(2). Because a party may invoke Rule 4(k)(2) only where no individual state may properly exercise personal jurisdiction over a defendant, the Court will first consider whether jurisdiction is...