Wempe v. Sunrise Medical Hhg, Inc.

• Decision Date: 26 August 1999
• Docket Number: No. 99-4041-SAC.,99-4041-SAC.
• Citation: 61 F.Supp.2d 1165
• Parties: Patrick WEMPE, an individual, Plaintiff, v. SUNRISE MEDICAL HHG, INC., a California corporation; Mechanical Application Designs, Inc., a Texas corporation; and Dalva Alexander, an individual, Defendants.
• Court: U.S. District Court — District of Kansas

61 F.Supp.2d 1165

Patrick WEMPE, an individual, Plaintiff, v. SUNRISE MEDICAL HHG, INC., a California corporation; Mechanical Application Designs, Inc., a Texas corporation; and Dalva Alexander, an individual, Defendants.

No. 99-4041-SAC.

United States District Court, D. Kansas.

August 26, 1999.

Ron C. Campbell, Fleeson, Gooing, Coulson & Kitch, L.L.C., Wichita, KS, William E. Corum, Blackwell Sanders Peper Martin LLP, Overland Park, KS, Philip J Giacinti, Jr, Procopio, Cory, Hagreaves & Savitch LLP, San Diego, CA, David B. Raymond, Blackwell Sanders Peper Martin LLP, Overland Park, KS, for defendant.

Gary E. Laughlin, Sloan, Listrom, Eisenbarth, Sloan & Glassman, Topeka, KS, for plaintiff.

MEMORANDUM AND ORDER

CROW, Senior District Judge.

The case comes before the court on a motion to dismiss for improper venue or, in the alternative, to transfer for improper venue, 28 U.S.C. § 1406(a), or, in the alternative, to transfer for convenience of the parties and witnesses, 28 U.S.C. § 1404(a), filed by the defendant Sunrise Medical HHG, Inc. ("Sunrise") (D.Kan.6), and a motion to dismiss for lack of personal jurisdiction or for failure to state claim filed by the defendants Mechanical Application Design, Inc. ("MAD") and Dalva Alexander ("Alexander") (D.Kan.16). The plaintiff Patrick Wempe ("Wempe") opposes both filed motions.

Wempe brings this action asserting claims under both federal law (Lanham Act and Patent Act) and state law (Uniform Trade Secrets Act of Kansas and state common law) against the defendants Sunrise, MAD, and Alexander. Common to his different claims are the following allegations. Wempe invented and built a Sliding Tilt Mechanism for use with a power wheelchair frame. Wempe went to Texas and displayed his invention in confidence to the defendants MAD and Alexander. Instead of entering into a licensing agreement with Wempe, the defendants MAD and Alexander misappropriated his invention, filed patent applications on it without identifying Wempe as the inventor, and manufactured and sold a wheelchair seating system that incorporated Wempe's invention. The defendant Sunrise subsequently acquired all operating assets of MAD, including the rights to this seating system and the pending patent applications on it. The defendant Sunrise is now manufacturing and selling the seating system which incorporates the proprietary Sliding Tilt Mechanism design of Wempe.

As set forth in his complaint, the plaintiff alleges that the defendant Sunrise is a California corporation with its principal place of business in Longmont, Colorado. The defendant MAD is a Texas corporation with its principal place of business at Katy, Texas, and the defendant Alexander is an individual residing in Katy, Texas. The plaintiff further alleges in his complaint that venue in the District of Kansas is proper "pursuant to 28 U.S.C. §§ 1391 and 1400(a)." The plaintiff alleges the following six causes of action: (1) false designation of origin in violation of the Lanham Act, 15 U.S.C. § 1125(a); (2) correction of inventorship pursuant to federal patent law, 35 U.S.C. § 116; (3) misappropriation of trade secrets in violation of the Uniform Trade Secrets Act of Kansas, K.S.A. 60-3320, et seq.; (4) common-law breach of contract; (5) common-law unfair competition; and (6) common-law fraud. The court will follow the logical progression of deciding the personal jurisdiction challenges first, the venue issues second, and the other issues last. See Leroy v. Great Western United Corp., 443 U.S. 173, 180, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979).

Issue I: Whether sufficient minimum contacts with Kansas exist so as to exercise personal jurisdiction over the defendant Alexander?

The burden rests with the plaintiff to prove personal jurisdiction over the defendant Alexander. Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir.1990), cert. denied, 498 U.S. 1068, 111 S.Ct. 786, 112 L.Ed.2d 849 (1991). Discretion resides with the district court to choose the appropriate procedure for deciding a motion to dismiss for lack of personal jurisdiction. A court may decide these jurisdictional issues by reference to affidavits, after a pretrial evidentiary hearing, or at trial if the issues are intertwined with the merits of the suit. Federal Deposit Ins. Corp. v. Oaklawn Apartments, 959 F.2d 170, 174 (10th Cir.1992). When opposing a motion to dismiss supported by affidavits and other written materials, the plaintiff need only make a prima facie showing and may rely on the "well pled facts" of the complaint. Id. at 174. Well-pled facts, as opposed to conclusory allegations, are accepted as true if uncontroverted by the defendant's affidavits. Wenz v. Memery Crystal, 55 F.3d 1503, 1508-09 (10th Cir.1995). Factual disputes created by conflicting affidavits are resolved in the plaintiff's favor, Oaklawn Apartments, 959 F.2d at 174, "and the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party," Behagen v. Amateur Basketball Ass'n of U.S.A., 744 F.2d 731, 733 (10th Cir.1984) (citation omitted), cert. denied, 471 U.S. 1010, 105 S.Ct. 1879, 85 L.Ed.2d 171 (1985). To overcome a prima facie showing, the "defendant must present a compelling case demonstrating `that the presence of some other considerations would render jurisdiction unreasonable.'" OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir.1998) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). If the factual disputes require an evidentiary hearing or must await a trial on the merits, the plaintiff must then prove the critical jurisdictional facts by a preponderance of the evidence. Oaklawn Apartments, 959 F.2d at 174.

"`Because the Kansas long-arm statute is construed liberally so as to allow jurisdiction to the full extent permitted by the due process clause, we proceed directly to the constitutional issue.'" OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d at 1090 (quoting Federated Rural Electric Ins. Corp. v. Kootenai Electric Coop., 17 F.3d 1302, 1305 (10th Cir.1994)) (internal citation omitted) (citing Volt Delta Resources, Inc. v. Devine, 241 Kan. 775, 777, 740 P.2d 1089 (1987)). Because this case also arises under federal question jurisdiction, the court examines due process under the Fifth Amendment's filter which is the same as the Fourteenth Amendment analysis. Packerware Corp. v. B & R Plastics, Inc., 15 F.Supp.2d 1074, 1077 (D.Kan.1998).

Under the Fourteenth Amendment, a "court may exercise personal jurisdiction over a nonresident defendant only so long as there exist `minimum contacts' between the defendant and the forum state." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). In OMI Holdings, the Tenth Circuit summarized the two-fold inquiry involved with an assertion of specific jurisdiction:

First, we must determine whether the defendant has such minimum contacts with the forum state "that he should reasonably anticipate being haled into court there." World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559. Within this inquiry we must determine whether the defendant purposefully directed its activities at residents of the forum, Burger King, 471 U.S. at 472, 105 S.Ct. 2174 and whether the plaintiff's claim arises out of or results from "actions by the defendant himself that create a substantial connection with the forum state." Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 109, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (internal quotations omitted) (emphasis in the original). Second, if the defendant's actions create sufficient minimum contacts, we must then consider whether the exercise of personal jurisdiction over the defendant offends "traditional notions of fair play and substantial justice." Id. at 113, 107 S.Ct. 1026. This latter inquiry requires a determination of whether a district court's exercise of personal jurisdiction over a defendant with minimum contacts is "reasonable" in light of the circumstances surrounding the case. See id.

149 F.3d at 1091. These two components of the due process inquiry "`are related' having `both originated' in the idea that a court cannot subject a person to its authority where the maintenance of the suit would offend `traditional notions of fair play and substantial justice.'" OMI Holdings, 149 F.3d at 1091 (quoting Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir.) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)), cert. denied, 519 U.S. 1006, 117 S.Ct. 508, 136 L.Ed.2d 398 (1996)). There is an "interplay" between them, "such that, `depending on the strength of the defendant's contacts with the forum state, the reasonableness component of the constitutional test may have a greater or lesser effect on the outcome of the due process inquiry.'" Id. The factors may bolster the reasonableness of exercising jurisdiction where there has been "a lesser showing of minimum contacts," and the factors "may be so weak" as to render the exercise of jurisdiction a violation of due process. Id.

Relying on J.E.M. Corp. v. McClellan, 462 F.Supp. 1246 (D.Kan.1978), Wempe argues that Alexander's fraudulent statements during telephone conversations with Wempe in Kansas satisfies due process requirements. In J.E.M. Corp., the defendant's contact with the forum was limited to a single telephone call initiated by the plaintiff concerning a matter with which the defendant was familiar. Judge Theis there held that "[t]he intentional tortious act here causing injury to a resident in this forum in and of itself satisfies the criteria of International Shoe on a claim for damages arising from that act." 462 F.Supp. at 1255. Neither party devotes much effort to researching the current Tenth Circuit law on this issue or to applying the law to the facts here.

The plaintiff Wempe avers that ...