Tangle, Inc. v. Buffalo Games, LLC

• Docket Number: 22-cv-07024-JSC
• Decision Date: 01 September 2023
• Parties: TANGLE, INC., Plaintiff, v. BUFFALO GAMES, LLC, Defendant.
• Court: U.S. District Court — Northern District of California

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TANGLE, INC., Plaintiff, v. BUFFALO GAMES, LLC, Defendant.

No. 22-cv-07024-JSC

United States District Court, N.D. California

September 1, 2023

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND TO TRANSFER TO WESTERN DISTRICT OF NEW YORK REDACTED

JACQUELINE SCOTT CORLEY United States District Judge.

Tangle Inc. (“Plaintiff”) sues Buffalo Games, LLC (“Defendant”) for (1) trademark infringement under 15 U.S.C. § 1114; (2) false designation of origin under 15 U.S.C. § 1125(a); (3) copyright infringement under 17 U.S.C. § 501(a); and (4) unfair competition under California Business & Professions Code § 17200. (Dkt. No. 43.)^[1] Plaintiff filed an amended complaint (“FAC”) after jurisdictional discovery to address the Court's previous dismissal for lack of personal jurisdiction. (Id.) Defendant moves to dismiss Plaintiff's FAC for lack of personal jurisdiction. (Dkt. No. 47-1.) After carefully considering the parties' submissions, and having the benefit of oral argument on August 31, 2023, the Court GRANTS the motion to dismiss for lack of personal jurisdiction and TRANSFERS the case to the Western District of New York.

BACKGROUND

A. Amended Complaint Allegations

Plaintiff is a California toy manufacturer and distributor headquartered in the Northern District of California. (Dkt. No. 43 ¶ 6.) Plaintiff owns a trademark for its “TANGLE” products covered by United States Trademark Registration No. 1,779,055, which has been substantially and continuously promoted since 1993. (Dkt. No. 43 at ¶ 1.) Plaintiff also owns all exclusive rights in various copyrights for TANGLE products. (Id.) Defendant is a New York limited liability corporation that produces games and puzzles with its principal place of business in Buffalo, New York. (Dkt. No. 43 at ¶ 11.)

As in the original complaint, Plaintiff alleges Defendant sells its “Chuckle & Roar Sensory Fidget Box 10-pack,”-which includes a “Twist & Tangle” toy (the “Infringing Toy”)-at Target's brick-and-mortar locations in California. (Dkt. No. 43 at ¶¶ 21, 29.) Plaintiff asserts Defendant also offers the Infringing Toy to California consumers online through www.target.com. (Id. at ¶ 12.) Plaintiff states the Infringing Toy appears identical to its TANGLE toys but is constructed with “substandard, stiff material, . . . making [it] much less flexible.” (Id. at ¶ 2.) Plaintiff sent a cease-and-desist letter, demanding Defendant stop sales of the Infringing Toy, recall all such products, and cancel any outstanding orders. (Dkt. No. 20-1 at 59-60.) Plaintiff submits screenshots indicating-at time of filing-the Infringing Toy was available online at www.target.com and in several brick-and-mortar Target retailers throughout this district. (Dkt. No. 4 at 7.)

Plaintiff's FAC adds allegations related to Defendant's shipment of product to Long Beach, California, alleging:

Defendant advertises, markets, and sells the Infringing Products at Target retail stores in California, throughout the United States of America (the “United States”), and online at www.target.com under Defendant's “Chuckle & Roar” brand name. In addition to the foregoing, Defendant has engaged Target to import Defendant's Infringing Products into the United States from the People's Republic of China through primarily the Port of Long Beach, a foreign trade zone having significant benefits for international businesses bringing goods into the United States. The Port of Long Beach is located in Long Beach, California. Although Defendant directs some shipments of its Infringing Products to Defendant in New York, for years, Defendant has engaged only Target to import the majority of its Infringing Products, and sometimes all of its then manufactured Infringing Products, into the United States through the Port of Long Beach. Further, Defendant uses the Port of Long Beach in Southern California as the hub from which all of its Infringing Products are then sold in any one of Target's about 273 stores the State of California, sent to distribution centers in California for distribution throughout the state or other states, or sent to other Target distribution centers throughout the United States.

(Dkt. No. 43 ¶ 12.) The FAC also alleges “Defendant directed Target to remove units of the Infringing Product from Target's shelves and website in September 2022. Target complied with this instruction, even though there remained unsold inventory of the Infringing Product in Target's warehouses.” (Id. ¶ 15.) “Furthermore, at all times material hereto, Defendant had the right and authority to control Target's pricing of the Infringing Products as they were sold in Targets' stores.” (Id. ¶ 16.)

B. Procedural History

After Plaintiff brought the initial action, Defendant moved to dismiss for lack of personal jurisdiction or, alternatively, to transfer the case to the Western District of New York. (Dkt. No. 18.) This Court denied the request to transfer and granted the motion to dismiss for lack of personal jurisdiction with leave to amend. (Dkt. No. 30.) The Court granted jurisdictional discovery. (Id.) Now, Plaintiff has filed the FAC and Defendant brings a renewed motion to dismiss for lack of personal jurisdiction. (Dkt. Nos. 43, 47.)

DISCUSSION

A. Legal Standard

Plaintiff “bears the burden” of establishing personal jurisdiction exists. In re Boon Global Ltd., 923 F.3d 643, 650 (9th Cir. 2019). “Where, as here, the defendant's motion is based on written materials rather than an evidentiary hearing, ‘the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.'” Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (quoting CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011)). The Court may consider declarations and other evidence outside the pleadings to determine whether it has personal jurisdiction. See Boon Global, 923 F.3d at 650. “[U]ncontroverted allegations in plaintiff's complaint must be taken as true,” but courts “may not assume the truth of allegations in a pleading which are controverted by affidavit.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (cleaned up). Any “factual disputes” must be “resolve[d] . . . in the plaintiff's favor.” Id.

When there is no applicable federal statute governing personal jurisdiction, as is the case here, the law of the forum state determines personal jurisdiction. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). California's long arm statute is co-extensive with federal due process requirements, and therefore the jurisdictional analyses under California law and federal due process are the same. See Cal. Civ. Proc. Code § 410.10; Mavrix, 647 F.3d at 1223.

Courts recognize two forms of personal jurisdiction, general and specific. Bristol-Myers Squibb Co. v. Super. Court of Cal., S.F. Cty., 582 U.S. 255, 262 (2017) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 918 (2011)). General jurisdiction over a nonresident corporation “is appropriate only when the corporation's contacts with the forum state are so constant and pervasive as to render it essentially at home in the state.” Martinez v. Aero Caribbean, 764 F.3d 1062, 1066 (9th Cir. 2006) (cleaned up); see Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1169 (9th Cir. 2006) (“[T]he standard for general jurisdiction is high” and “a defendant must not only step through the door, it must also [sit] down and [make] itself at home.”) (quotations and citations omitted). By contrast, specific jurisdiction requires a nonresident defendant's “suit-related conduct [to] create a substantial connection with the forum State.” Walden v. Fiore, 571 U.S. 277, 284 (2014). “When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State.” Bristol-Myers, 582 U.S. at 264; see Goodyear, 564 U.S. at 931 n.6 (“[E]ven regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over claims unrelated to those sales.”).

Plaintiff does not contend general jurisdiction exists; indeed, the record is undisputed Defendant has no physical locations, facilities, or personnel in California. (Dkt. No. 47-1 at 7.) Defendant is not licensed to conduct business in California, owns no property or assets in California, and neither owes nor pays income taxes in California. (Id.) None of Defendant's officers, directors, or shareholders is domiciled in California, nor is any California citizens. (Id.)

The Court thus must analyze whether Plaintiff has made a prima face showing of specific jurisdiction.

B. Specific Jurisdiction

The Ninth Circuit applies a three-part test to determine if the exercise of specific personal jurisdiction over a nonresident is appropriate: (1) the defendant must purposefully direct its activities toward the forum or purposefully avail itself of the privileges of conducting activities in the forum; (2) the plaintiff's claim must arise out of or relate to those activities; and (3) the assertion of personal jurisdiction must be reasonable. Schwarzenegger, 374 F.3d at 802. It is Plaintiff's burden to plead allegations that satisfy the first two prongs, whereupon the burden shifts to the defendant to show why the exercise of specific personal jurisdiction would not be reasonable under prong three. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)).

1. Purposeful Direction

The first element requires Plaintiff establish Defendant “either purposefully availed itself of the privilege of conducting activities in California, or purposefully directed its activities toward California.” Id. “A purposeful availment analysis is most often used...