Talarico v. Marathon Shoe Company, Civil No. 00-239-P-C (D. Me. 4/12/2001), Civil No. 00-239-P-C.

• Decision Date: 12 April 2001
• Docket Number: Civil No. 00-239-P-C.
• Parties: LOUIS C. TALARICO, II, Plaintiff, v. MARATHON SHOE COMPANY, Defendant.
• Court: U.S. District Court — District of Maine

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LOUIS C. TALARICO, II, Plaintiff, v. MARATHON SHOE COMPANY, Defendant.

Civil No. 00-239-P-C.

United States District Court, D. Maine.

April 12, 2001.

JAMES G. GOGGIN, VERRILL & DANA, for plaintiff LOUIS C TALARICO, II.

SIDNEY ST. F. THAXTER, CURTIS, THAXTER, STEVENS, BRODER, & MICOLEAU, SHAWNELL WILLIAMS, ESQ., KEGLER, BROWN, HILL & RITTER, for defendant MARATHON SHOE COMPANY.

RECOMMENDED DECISION ON DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE OR, ALTERNATIVELY, TO TRANSFER VENUE

DAVID M. COHEN, Magistrate Judge.

Defendant Marathon Shoe Company ("Marathon") moves to dismiss the instant patent-infringement action pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(3) for lack of personal jurisdiction and improper venue or, alternatively, to transfer venue pursuant to 28 U.S.C. § 1404(a) or 1406(a). Defendant Marathon Shoe Company's Motion To Dismiss or for Transfer of Venue ("Motion") (Docket No. 2) at 1. Following the filing of the instant Motion, I permitted plaintiff Louis C. Talarico, II to conduct certain limited discovery on jurisdictional issues. See Plaintiff Louis C. Talarico's Amended Motion for Leave To Depose Defendant on Jurisdictional Issues (Docket No. 11); Order on Amended Motion for Leave To Depose, etc. (Docket No. 13). With the benefit of the ensuing supplemental briefs and discovery materials, I recommend for the reasons that follow that the Motion be denied.¹

I. Applicable Legal Standards

A motion to dismiss for lack of personal jurisdiction raises the question whether a defendant has "purposefully established minimum contacts in the forum State." Hancock v. Delta Air Lines, Inc., 793 F. Supp. 366, 367 (D.Me. 1992) (citation and internal quotation marks omitted). The plaintiff bears the burden of establishing jurisdiction; however, where (as here) the court rules on a Rule 12(b)(2) motion without holding an evidentiary hearing, a prima facie showing suffices. Archibald v. Archibald, 826 F. Supp. 26, 28 (D.Me. 1993). Such a showing requires more than mere reference to unsupported allegations in the plaintiff's pleadings. Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992). However, for purposes of considering a Rule 12(b)(2) motion the court will accept properly supported proffers of evidence as true. Id.²

The filing of a Rule 12(b)(3) motion likewise places the burden on the plaintiff to demonstrate the propriety of venue. 5A C. Wright & A. Miller, Federal Practice and Procedure § 1352 at 264-65 (2d ed. 1990). As in the case of a Rule 12(b)(2) motion, the court accepts a plaintiff's properly supported proffers of evidence as true. M.K.C. Equip. Co. v. M.A.I.L. Code, Inc., 843 F. Supp. 679, 682-83 (D.Kan. 1994). Per 28 U.S.C. § 1406(a), "The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought."

Per 28 U.S.C. § 1404(a), "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." A transfer pursuant to section 1404(a) lies within the discretion of the court. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). The factors to be considered in the exercise of this discretion include the convenience of the parties and witnesses, the order in which jurisdiction was obtained by the district court, the availability of documents, and the possibilities of consolidation. Cianbro Corp. v. Curran-Lavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987). The fact that a prompt trial may be available in one of the districts at issue but not in the other is relevant to the statutory criteria. Ashmore v. Northeast Petroleum Div. of Cargill, Inc., 925 F. Supp. 36, 39 (D.Me. 1996). The defendant bears "a substantial burden" of demonstrating the need for a change of forum. Demont & Assoc. v. Berry, 77 F. Supp.2d 171, 173 (D.Me. 1999). The evidence submitted by the defendant "must weigh heavily in favor of transfer" when this district is the plaintiff's "home forum." Id.

II. Factual Background

The following facts, with conflicts resolved in favor of the plaintiff's properly supported proffers of evidence, are material to consideration of the pending motion.

Talarico, the exclusive owner of U.S. Patent No. 4,578,882 (the "Patent"), is an individual with a place of residence in DeLeon Springs, Florida. Complaint for Patent Infringement ("Complaint") (Docket No. 1) ¶ 1. The Patent, which was granted on April 1, 1986, describes and claims a forefoot-compensating technology for footwear involving the placement of materials of different thicknesses in the forefoot area of a footwear sole to provide varus (slightly inverted) forefoot compensation. Id. ¶ 4.

Talarico was born in Lewiston, Maine and resided there until 1995. Affidavit of Louis C. Talarico, II (Docket No. 7) ¶ 2. At the time he invented and patented his shoe method, Talarico was residing in Lewiston and maintained an office there. Id. Since approximately 1995, he has resided and maintained a place of business, Biomechanical Engineering and Shoe Research Laboratory, in New Gloucester, Maine. Id. ¶ 3. In February 2000 Talarico moved his personal residence to DeLeon Springs, Florida, with the intent of residing in Florida approximately seven months a year and in New Gloucester, Maine, approximately five months a year. Id. ¶ 4.

Talarico alleges that Marathon has been infringing the Patent by making, using, offering for sale and/or selling in this judicial district and elsewhere in the United States replacement shoe insoles, including but not limited to those sold under the trade name Flat Foot® Insoles, without his consent. Complaint ¶ 5.

Marathon is an Ohio corporation with a sole place of business in Kent, Ohio. Id. ¶ 2; Rule 30(b)(6) Deposition of Marathon by its designee, Michael L. Pryce, M.D. ("Pryce Dep."), filed with Plaintiff's Supplemental Memorandum in Opposition to Defendant's Motion To Dismiss ("Supplemental Opposition") (Docket No. 15), at 10-11. It has never had an office, employees, a mailing address, bank accounts or a telephone listing in Maine. Pryce Dep. at 62. No Marathon employee has ever been to Maine on business. Id. at 56. Marathon has never manufactured replacement shoe insoles in Maine, produced any television, radio or newspaper advertising in Maine, done a direct mailing of sales brochures into Maine or used a distributor based in Maine. Id. at 62-63. Marathon's eight present and former employees reside in northeast Ohio. Id. at 25-26, 60-62. Michael L. Pryce, M.D., its sole owner, is an orthopedic surgeon who has a full-time practice in northeast Ohio. Id. at 11, 60. It would be more convenient for Dr. Pryce and his wife to attend hearings and trials in northeast Ohio than in Maine. Id. at 60-61.

Beginning in 1997 Marathon entered into a series of agreements with SecondWind Productions, Inc. See Patent License Agreement effective March 12, 1999 ("1999 SecondWind Agreement"), attached as Exh. 6 to Pryce Dep.; Patent License Agreement effective October 17, 1997 ("1997 SecondWind Agreement"), attached as Exh. 6 to Pryce Dep. The 1999 SecondWind Agreement was in effect until September 30, 2000. Pryce Dep. at 32. That agreement licensed SecondWind to manufacture and sell Marathon's insoles to retailers, among others, exclusively in North America and non-exclusively in the rest of the world except Japan. 1999 SecondWind Agreement ¶¶ 1-2, 6. The 1997 agreement contained similar provisions, except that it conferred the right to exclusive worldwide distribution of the product. 1997 SecondWind Agreement ¶¶ 1-2, 6.

On March 16, 2001 Suzette M. Sass, a secretary at Verrill & Dana, LLP, visited SecondWind's web site at www.2ndwind.com. Affidavit of Suzette M. Sass ("Sass Aff. II") (Docket No. 19) ¶¶ 1-2. Among "e-tailers" and retailers listed on this web site as carrying SecondWind's products were The Sports Authority and Sportshoe Center. Id. ¶ 2 & Exh. A thereto.³ Using hyperlinks in the SecondWind web site, Sass navigated to both The Sports Authority and Sportshoe Center web sites. Id. ¶ 2. The Sports Authority web site, www.thesportsauthority.com, listed one The Sports Authority store in Maine. Id. & Exh. C thereto. The Sportshoe Center web site, www.sportshoecenter.com, listed seven Sportshoe Center stores in Maine. Id. ¶ 2 & Exh. D thereto.

On October 20, 2000 Robyn S. Mills, a paralegal for attorney James G. Goggin, purchased two packages of Marathon replacement insoles from the Sportshoe Center at 448 Payne Road in Scarborough, Maine. Affidavit of James G. Goggin ("Goggin Aff.") (Docket No. 5) ¶ 2. On December 5, 2000 Sass called each Sportshoe Center store located in Maine; all seven carried SecondWind Flat Foot Insole. Affidavit of Suzette M. Sass ("Sass Aff. I") (Docket No. 6) ¶ 2. On December 15, 2000 Sass spoke with an employee of the Scarborough location (who also worked in the Windham location) who told her that the Sportshoe Center had carried these insoles since July 2000. Id. ¶ 3. On the back of the insoles purchased from Sportshoe Center is the name of the defendant, Marathon Shoe Company. Id. ¶ 4.

Marathon has never directed anyone at SecondWind to attempt to make sales of its product in Maine. Pryce Dep. at 66. Nor has Marathon ever called anyone in Maine to discuss anything having to do with the sale of its products. Id. Marathon does not know specifically where its insoles are sold. Id. at 29. Dr. Pryce testified, "All I do is license the product to them and they go through their distribution channels, and if it's nationwide, that's fine. But I don't know where they sell." Id. at 29. He further stated:

I have to tell you that my main business in my life is a surgeon. I developed a product. I licensed it to somebody to sell. I would presume he...