THE URBAN INSTITUTE v. FINCON SERVICES

• Decision Date: 01 February 2010
• Docket Number: Civil Action No. 09-00572 (HHK).
• Parties: THE URBAN INSTITUTE, Plaintiff, v. FINCON SERVICES, et al., Defendants.
• Court: U.S. District Court — District of Columbia

681 F. Supp.2d 41

THE URBAN INSTITUTE, Plaintiff, v. FINCON SERVICES, et al., Defendants.

Civil Action No. 09-00572 (HHK).

United States District Court, District of Columbia.

February 1, 2010.

Bruce Alexander McDonald, Schnader, Harrison, Segal & Lewis, L.L.P., Washington, DC, for Plaintiff.

Michael H. Selter, Manelli Denison & Selter, PLLC, Washington, DC, for Defendants.

MEMORANDUM OPINION

HENRY H. KENNEDY, JR., District Judge.

The Urban Institute ("Institute") brings this action against FINCON Services, Shahid Yusaf, and Global Investment Advisors d/b/a FINCON Service Inc. (collectively "defendants"). The case arises out of FINCON's accusation, made in a suit brought in Pakistan, that the Institute infringed on FINCON's copyright in creating its Financial Management Information System ("FMIS") software. The Institute seeks a declaration that it owns all right, title, and interest in the FMIS copyright and brings claims of violation of the Federal Trademark Act, 15 U.S.C. § 1125(a) ("Lanham Act"), tortious interference with contractual relations, abuse of process, trade libel, and unfair competition. Before the Court is defendants' motion to dismiss # 5, in which defendants primarily argue that this Court does not have personal jurisdiction over them. Upon consideration of the motion, the opposition thereto, and the record of this case, the Court concludes that the motion shall be granted.

I. BACKGROUND

FINCON Services ("FINCON") is a corporation that does business in several countries, including the United States, Canada, and Pakistan. FINCON's office in the United States is located in California. Shahid Yusaf is the President of FINCON. According to defendants, Global Investment Advisors, Inc. ("GIA") is a "capital markets advisory firm" with its headquarters in California, and its President is Roger Nye. Defs.' Mot. to Dismiss at 5-6. The Institute's complaint alleges that "the acts and omissions forming the basis of this Complaint have . . . been committed, authorized, directed, and/or approved by each of the Defendants, acting as agents, alter egos and proxies of one another." Compl. ¶ 18.¹

The Institute is a nonprofit research organization headquartered in Washington, D.C. In 2006, the U.S. Agency for International Development ("USAID") awarded a contract to the Institute for a project called "Districts That Work" ("DTW project"). This project involved "the development of skills and tools for effective governance in thirty selected districts in Pakistan." Id. ¶ 30. In order to complete the DTW project, it was necessary to develop "management information software" that is "used to facilitate the collection, processing, storage, and dissemination of data." Id. ¶ 22.

According to the complaint, the Institute engaged in discussion with defendants about the possibility of contracting with them for the creation of management information software for the DTW project. On May 5, 2008, however, the Institute instead hired an individual, Ghulam Mustafa Kahn, to develop software for the DTW project as an independent consultant. Kahn, an expert in management information systems, had previously worked for FINCON and was again employed by FINCON just before agreeing to assist the Institute with the DTW project.

Kahn and two assistants, working in Pakistan, created software for the Institute referred to by the parties as the Financial Management Information System ("FMIS"). The Institute registered FMIS with the U.S. Copyright Office as United States Copyright Registration No. TX6-907-252.²

In February 2009, FINCON sent a letter to the Institute maintaining that Khan copied features of its software in creating FMIS, demanding that the Institute stop using FMIS, and seeking five million dollars in damages for "contravention of the Intellectual Property Rights" of defendants. Id. ¶ 50. Later that month, FINCON filed a copyright infringement lawsuit against the Institute and Kahn in the District Court of Islamabad, Pakistan. The Institute asserts that FMIS "contains new and original features developed independently and exclusively by Kahn" and his two assistants. Id. ¶ 41. The Institute contends that FINCON's allegations are "fabricated, frivolous and, on information and belief, leveled against the Institute for the ulterior purpose of coercing the Institute and USAID into contractual relationships with Defendants, damaging the reputation of the Institute and USAID, and harming the image of USAID in the United States and Pakistan." Id. ¶ 53.

The Institute also alleges that defendants anonymously provided false information regarding the alleged copyright infringement to a Pakistani newspaper and that they "instigated a baseless criminal investigation against Khan for the purpose of punishing Khan" for working for the Institute. Id. ¶ 64.³

The Institute's complaint seeks a declaration that it is the "sole and exclusive owner of U.S. Copyright Registration No. TX 6-907-252" (Count I). Id. ¶ 70. It also brings claims of false representation and false designation of origin under the Lanham Act (Count II), tortious interference with contractual relations (Count III), abuse of process (Count IV), trade libel (Count V), and common law unfair competition (Count VI).

II. ANALYSIS

Defendants seek dismissal of this action because, they argue, the Court may not exercise personal jurisdiction over them.⁴ Rule 12(b)(2) of the Federal Rules of Civil Procedure provides that a court may dismiss a complaint on this ground.

A. Law of Personal Jurisdiction

The plaintiff bears the burden of making a prima facie showing that a court has personal jurisdiction over the defendant. Naegele v. Albers, 355 F.Supp.2d 129, 136 (D.D.C.2005) (citing Second Amendment Found v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C.Cir.2001)). To make such a showing, the plaintiff is not required to adduce evidence that meets the standards of admissibility reserved for summary judgment and trial; rather, she may rest her arguments on the pleadings, "bolstered by such affidavits and other written materials as she can otherwise obtain." Mwani v. bin Laden, 417 F.3d 1, 7 (D.C.Cir.2005).⁵ In determining whether personal jurisdiction exists, the court should resolve factual disputes in the plaintiff's favor, Helmer v. Doletskaya, 393 F.3d 201, 209 (D.C.Cir.2004) (citing Reuber v. United States, 750 F.2d 1039, 1052 (D.C.Cir.1984)), but a plaintiff's "conclusory statements . . . are not enough" to meet her burden. GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1349 (D.C.Cir.2000).

The jurisdictional reach of a federal court is the same as that of a state or local court of general jurisdiction in the forum where the federal court sits. See Fed. R.Civ.P. 4(k)(1)(A); Crane v. Carr, 814 F.2d 758, 762 (D.C.Cir.1987). Therefore, the Court may exercise general or specific personal jurisdiction over a defendant. Pursuant to D.C.Code § 13-334(a), the Court may exercise general personal jurisdiction over a defendant who is "doing business in the District." D.C.Code § 13-334(a).⁶ The Court may exercise specific personal jurisdiction over a non-resident if jurisdiction is in accordance with the District of Columbia's long-arm statute. D.C.Code § 13-423; United States v. Ferrara, 54 F.3d 825, 828 (D.C.Cir.1995). Relevant here is the provision of that statute permitting the Court to exercise jurisdiction over a person who "causes tortious injury in the District of Columbia by an act or omission outside the District of Columbia if she regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia." D.C.Code § 13-423(a)(4).

In addition, a plaintiff asserting that the Court has personal jurisdiction over the named defendants must make a prima facie showing that the Court's exercise of jurisdiction satisfies the constitutional requirements of due process. See U.S. CONST. amends. V. & XIV; Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Due process is satisfied where a plaintiff shows "minimum contacts" between the defendant and the forum, ensuring that "the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Int'l Shoe Co., 326 U.S. at 316, 66 S.Ct. 154. Under this standard, "the defendant's conduct and connection with the forum state must be such that she should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).

B. This Court May Not Exercise Personal Jurisdiction Over These Defendants

1. General jurisdiction

In its opposition to defendants' motion to dismiss, the Institute alleges for the first time that this Court has general jurisdiction over defendants under D.C.Code § 13-334.⁷ In support of the proposition that defendants were "doing business" in the District, the Institute points to FINCON's website, which lists the World Bank as a FINCON customer. The Institute apparently infers that because the World Bank is an important client to FINCON and because the World Bank has its headquarters in Washington, D.C., FINCON must do business in the District. In addition, the Institute asserts that "Fincon's Executive Director, Roger Nye, appeared at the offices of the Institute's representative on February 26, 2008, to solicit a business relationship with the Institute." Pl.'s Opp'n to Defs.' Mot. to Dismiss ("Pl.'s Opp'n") at 17 (citing Decl. of Charles Cadwell, Director of the Center on International Development and Governance at the Urban Institute ¶¶ 7-8 ("Cadwell Decl.")). Because Nye, the "principal officer" of GIA, "held himself out as the Executive Director of Fincon," the Institute argues that defendants collectively had a presence in the District. Id. (citing Cadwell Decl. ¶¶ 7-8). Based on these allegations, the Institute...