Wash. Shoe Co. v. A–Z Sporting Goods Inc.

• Decision Date: 17 December 2012
• Docket Number: 11–35206.,Nos. 11–35166,s. 11–35166
• Parties: WASHINGTON SHOE COMPANY, a Washington corporation, Plaintiff–Appellant/Cross–Appellee, v. A–Z SPORTING GOODS INC., an Arkansas corporation, DBA A–2–Z Wholesale.com, Defendant–Appellee/Cross–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

704 F.3d 668

WASHINGTON SHOE COMPANY, a Washington corporation, Plaintiff–Appellant/Cross–Appellee,

v.A–Z SPORTING GOODS INC., an Arkansas corporation, DBA A–2–Z Wholesale.com, Defendant–Appellee/Cross–Appellant.

Nos. 11–35166, 11–35206.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted May 11, 2012.

Filed Dec. 17, 2012.

John W. Widell, Santa Fe, New Mexico; Timothy B. McCormack, Seattle, WA, for Appellant–Cross–Appellee.

Roger M. Townsend, Breskin, Johnson & Townsend PLLC, Seattle, WA, for Appellee–Cross–Appellant.

Appeal from the United States District Court for the Western District of Washington, Robert S. Lasnik, District Judge, Presiding. D.C. No. 2:09–cv–01042–RSL.

Before: MICHAEL DALY HAWKINS, JAY S. BYBEE, and CARLOS T. BEA, Circuit Judges.

OPINION

BYBEE, Circuit Judge:

In this copyright infringement action, we address whether an Arkansas retailer is subject to personal jurisdiction in Washington when its only relevant contact with the state is a claim that it willfully violated a copyright held by a Washington corporation. The district court for the Western District of Washington dismissed Washington Shoe Company's (“Washington Shoe”) action against A–Z Sporting Goods, Inc. (“A–Z”) for lack of personal jurisdiction. We reverse.

I. FACTS AND PROCEDURAL HISTORY

Plaintiff-appellant Washington Shoe is a Washington corporation that has done business in the state of Washington for over 100 years. Washington Shoe, as its name suggests, manufactures a variety of foot apparel for men, women, and children. Defendant-appellee A–Z is an Arkansas corporation that operates a single retail store in Alma, Arkansas, where it sells goods related to hunting, fishing, and outdoor activities. According to A–Z, it does not sell products over the Internet and does not have an interactive website that allows customers to order its products, although a different A–Z entity, with some common management, does sell some products over eBay.

Between 2007 and 2009, A–Z purchased a number of items from Washington Shoe. Washington Shoe salesman Jesse James regularly visited the A–Z store in Arkansas to determine what additional orders A–Z needed. James provided A–Z with brochures and catalogs containing Washington Shoe products and copyright notifications.

During one of his visits to A–Z, James noticed that “Ditsy Dots” and “Spider” boots—two of Washington Shoe's popular children's rain boots—were on display. James knew that A–Z had never purchased these particular styles from him. James purchased a pair of the suspicious boots and sent them to Washington Shoe, who confirmed that they were infringing copies. A–Z admits that the boots in dispute were purchased from China and not from Washington Shoe, but claims that the boots had no name on them or other indication that they were subject to copyright.

On April 17, 2009, Washington Shoe's counsel in Seattle sent A–Z a cease-and-desist letter notifying A–Z that its boot designs were copyrighted and that A–Z's “infringing boots are clearly illegal knock-offs.” He demanded that all sales of the infringing boots stop and asked for an accounting of past sales. On May 6, 2009, counsel sent a follow-up letter, again warning A–Z that it was violating Washington Shoe's copyright and might be liable for actual and statutory damages. He requested written assurance that A–Z had ceased importing or selling the infringing rain boots. After receiving these letters, A–Z removed the offending boots from its store, but sold its remaining inventory to a thrift store, whose representative traveled to Arkansas to purchase the boots.

Washington Shoe filed a complaint in the U.S. District Court for the Western District of Washington, alleging copyright infringement, trade dress infringement, and unfair competition. A–Z moved to dismiss for lack of personal jurisdiction or, in the alternative, on forum non conveniens grounds. After initial briefing, the district court allowed jurisdictional discovery to test A–Z's claim that it “has never sold any goods, of any kind, to any person, business or entity in the State of Washington.” The court initially denied A–Z's motion to dismiss, relying on our decision in Brayton Purcell LLP v. Recordon & Recordon (“Brayton Purcell I”), 575 F.3d 981 (9th Cir.2009). That decision was withdrawn and superceded by Brayton Purcell LLP v. Recordon & Recordon (“Brayton Purcell II”), 606 F.3d 1124 (9th Cir.2010), prompting the district court to issue an order to show cause, and eventually to grant A–Z's motion to dismiss. Because of the confusion generated by the different Brayton Purcell opinions, the district court denied A–Z's request for attorneys' fees under Washington Revised Code § 4.28.185(5). Washington Shoe appeals the dismissal, and A–Z cross-appeals the denial of attorneys' fees.

II. DISCUSSION

A. Standard of Review

A district court's determination of whether personal jurisdiction may be properly exercised is a question of law that we review de novo. See Brayton Purcell II, 606 F.3d at 1127. Although the burden is on the plaintiff to show that the court has jurisdiction over the defendant, in the absence of an evidentiary hearing, the plaintiff need only make a “prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir.2006) (internal quotation marks omitted). Additionally, the court resolves all disputed facts in favor of the plaintiff, in this case, Washington Shoe. See id.

Because there is no applicable federal statute governing personal jurisdiction in this case, we apply the law of the state of Washington. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir.2004); Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir.1998). Washington's long-arm statute extends jurisdiction over a defendant to the fullest extent permitted by the Due Process Clause of the Fourteenth Amendment. SeeWash. Rev. Code § 4.28.185; Shute v. Carnival Cruise Lines, 113 Wash.2d 763, 783 P.2d 78, 82 (1989). The relevant question, therefore, is whether the requirements of due process are satisfied by the exercise of personal jurisdiction over A–Z in Washington.

B. Due Process

Due process requires that to exercise jurisdiction over a non-resident defendant, the defendant “have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). We employ a three-part test to determine if a defendant has sufficient minimum contacts to be subject to specific personal jurisdiction ¹:

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

Brayton Purcell II, 606 F.3d at 1128 (quoting Schwarzenegger, 374 F.3d at 802) (internal quotation marks omitted). As Washington Shoe bears the burden of establishing the district court's jurisdiction over A–Z, it must satisfy the first two prongs. If it does so, then A–Z must come forward with a “ ‘compelling case’ that the exercise of jurisdiction would not be reasonable.” CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir.2011) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

Only the first prong is at issue in this case. The plaintiff may satisfy this prong by demonstrating that the defendant either purposefully availed itself of the privilege of conducting activities in the forum, or purposefully directed its activities at the forum. We have explained that although we have sometimes used these two terms in shorthand fashion as a single concept, they “are, in fact, two distinct concepts.” Schwarzenegger, 374 F.3d at 802. We have further explained that “[a] purposeful availment analysis is most often used in suits sounding in contract.” Id.; see also Burger King, 471 U.S. at 473, 475–76, 105 S.Ct. 2174;Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). By contrast, “[i]n tort cases, we typically inquire whether a defendant ‘purposefully direct[s] his activities' at the forumstate, applying an ‘effects' test that focuses on the forum in which the defendant's actions were felt, whether or not the actions themselves occurred within the forum.” Yahoo! Inc. v. La Ligue Contre Le Racisme, 433 F.3d 1199, 1206 (9th Cir.2006) (en banc).²

The “purposeful direction” or “effects” test is based on Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). It “requires that the defendant ... have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” Mavrix Photo, 647 F.3d at 1228 (internal quotation marks omitted). Thus, courts may exercise personal jurisdiction over a defendant who engages in an intentional act that causes harm in the forum state, even if that act takes place outside of the forum state. See Yahoo! Inc., 433 F.3d at 1206;Panavision, 141 F.3d at 1320 (“It is not required that a defendant be physically present or have physical contacts with the forum, so long as his efforts are ‘purposefully directed’ toward forum residents.”).

We are going to consider each of these elements in turn. Our discussion, however, is limited to Washington Shoe's willful infringement claim, because that is its strongest basis for the exercise of jurisdiction in Washington. If Washington has...