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finding plaintiff had failed to establish California corporation's residence in Central District, despite agent for service of process located there
Summary of this case from PHH Mortg. Corp. v. Barrett, Daffin, Frappier, Treder & Weiss, LLPOpinion
CV 14-1864 RSWL (JEMx)
06-13-2014
PRESIDIO HOME CARE, LLC, a California limited liability company, Plaintiff, v. B-EAST, LLC, a California limited liability company; and DOES 1-10, Defendants.
ORDER re: DEFENDANT B-EAST, LLC'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, TRANSFER FOR IMPROPER VENUE [7]
Currently before the Court is Defendant B-East, LLC's ("Defendant") Motion to Dismiss or, in the Alternative, Transfer for Improper Venue [7]. Plaintiff Presidio Home Care, LLC ("Plaintiff") filed its Opposition May 6, 2014 [14]. Defendant filed its Reply on May 15, 2014 [15]. Having reviewed all papers and arguments submitted pertaining to this Motion, THE COURT NOW RULES AS FOLLOWS:
The Court GRANTS Defendant's Motion.
I. BACKGROUND
Plaintiff is a California LLC doing business in Pasadena, California. Compl. ¶ 9. Defendant is also a California LLC. Id. at ¶ 10.
Defendant's principal place of business is at issue in this Motion.
Plaintiff offers personal support services to senior persons under the PRESIDIO HOME CARE Mark. Id. at ¶ 14. Plaintiff has done so since October 28, 2009. Id. Plaintiff is the owner of federal trademark registration 3,869,841, registered November 2, 2010. Id. at ¶ 15. The mark covers: (1) in-home support services to senior persons; (2) personal care assistance of activities of daily living for mentally and physically challenged people; and (3) social and companionship services for the elderly, the handicapped, and the home-bound. Id.
Plaintiff offers its services on its website www.presidiohomecare.com. Id. at ¶ 16. Plaintiff advertises its services on its website and through print and online media. Id.
Plaintiff alleges that Defendant, without Plaintiff's consent, has adopted and used the fictitious business names PRESIDIO HEALTH CARE CENTER and PRESIDIO HEALTHCARE CENTER and the domain name www.presidiohealthcare.com in connection with offering competing services to many of the same consumers served by Plaintiff. Id. at ¶¶ 19-21.
Plaintiff further alleges that its reputation has been damaged because of negative online reviews regarding Defendant's business. Id. at ¶ 27. Defendant has received several California Department of Public Health citations in addition to at least 126 publicly documented complaints. Id. at ¶ 28. These complaints are related to accidents, quality of care and treatment, quality of physical environment, deaths, misappropriation of property, medications not provided according to physician instructions, problems with infection control, issues with abuse, administration and personnel problems, and fraudulent and false billing practices. Id. Plaintiff, in contrast, has had no citations or complaints brought against it. Id. at ¶ 29.
Consequently, Plaintiff filed a Complaint on March 12, 2014 bringing claims for trademark infringement, dilution, cybersquatting, and unfair competition against Defendant. Id. at ¶¶ 12-94.
II. LEGAL STANDARD
A. Motion to Dismiss Pursuant to Rule 12(b)(3)
Federal Rule of Civil Procedure 12(b)(3) allows a party to file a motion to dismiss on the basis of improper venue. Fed. R. Civ. Proc. 12(b)(3). Plaintiff bears the burden of establishing proper venue. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979) (citing Hayashi v. Sunshine Garden Prods., Inc., 285 F. Supp. 632, 633 (W.D. Wash. 1967)). The plaintiff is required to establish that venue is proper as to each defendant and as to each claim. Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109, 1126 (C.D. Cal. 2009) (quoting Kelly v. Echols, No. Civ. F05118 AWI SMS, 205 WL 2105309, at *11 (E.D. Cal. Aug. 30, 2005)). However, "where venue exists for the principal cause of action, courts have agreed to adjudicate closely related claims even if they lacked an independent source of venue." Id. at 1127.
In considering a motion to dismiss for improper venue, a court is not required to accept the pleadings as true and may consider facts outside the pleadings. Doe 1 v. AOL, LLC, 552 F.3d 1077, 1081 (9th Cir. 2009) (citing Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 323 (9th Cir. 1996)). However, "the trial court must draw all reasonable inferences in favor of the non-moving party and resolve all factual conflicts in favor of the non-moving party." Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133, 1138 (9th Cir. 2003).
"If the court finds that the case has been filed 'in the wrong division or district,' it must '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.'" Allstar Mktg. Grp., 666 F. Supp. 2d at 1126 (quoting 28 U.S.C. § 1406(a)).
III. ANALYSIS
A. Timeliness of the Motion
Plaintiff argues that Defendant's Motion should be denied because Defendant has not complied with Central District Local Rule 6-1 (Opp'n 1:26-2:1), which provides that "notice of motion shall be filed with the Clerk not later than twenty-eight (28) days before the date set for hearing" (C.D. Cal. L.R. 6-1). Defendant's counsel states that he was under the mistaken impression that only twenty-one days' notice was required. Jassoy Decl. ¶ 4. Furthermore, Defendant's counsel declare that they attempted to remedy the deficiency when Plaintiff pointed it out. Id. at ¶¶ 2-3. Consequently, Defendant requests that the Court overrule Plaintiff's objection because Plaintiff did not suffer any prejudice as a result of the mistake. Id. at ¶ 5.
The Court rejects Plaintiff's argument and finds that Plaintiff has not suffered any prejudice as a result of Defendant's failure to provide sufficient notice. Plaintiff was deprived of just two days time to respond to Defendant's Motion - and was able to supply a thorough response. As a result, the Court proceeds to the merits of Defendant's Motion. B. Whether Venue is Proper in the Central District of California
"Venue over trademark claims is governed by the general venue statute, 28 U.S.C. § 1391." Allstar Mtkg. Grp., 666 F. Supp. 2d at 1128 (citing Golden Scorpio Corp. v. Steel Horse Bar & Grill, 5 96 F. Supp. 2d 1282, 1286 n.3 (D. Ariz. 2009)).
28 U.S.C. § 1391(b), in turn, sets forth three bases for venue, providing that:
A civil action may be brought in-
(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.
Defendant argues that venue is improper in the Central District of California because its principal place of business is unequivocally not in the Central District of California but rather in the Southern District of California (Reply 2:14-3:8) and that a substantial part of the events or omissions at issue in this suit did not occur in the Central District of California as Plaintiff argues (Reply 3:9-4:17).
The Central District of California comprises the counties of Riverside, San Bernardino, Los Angeles, San Luis Obispo, Santa Barbara, Ventura, and Orange. 28 U.S.C. § 84(c). The Southern District of California comprises the counties of Imperial and San Diego. 28 U.S.C. § 84(d).
1. Does Defendant "Reside" in the Central District of California?
"[A]n entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction." 28 U.S.C. § 1391(c)(2). For purposes of venue in states with multiple judicial districts, defendant corporations subject to personal jurisdiction at the time the action is commenced are "deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate state." 28 U.S.C. § 1391(d).
Plaintiff contends that venue is proper under 28 U.S.C. § 1391(b)(1) because Defendant's mailing address and agent for service of process are located in Los Angeles County. Opp'n 3:3-8 (citing Barnes Decl. Ex. 3; Ellrod Decl. Ex. 6). Defendant contends that its mailing address is actually located in San Diego County and that the mailing address cited by Plaintiff is for the agent who coordinated the filing of the Fictitious Business Name Statement. Reply 2:14-23.
More specifically, Plaintiff cites to a Fictitious Business Name Statement filed with the County of San Diego listing a return mailing address located in the Central District of California. Barnes Decl. Ex. 3. Plaintiff cites a Business Entity Detail from the California Secretary of State website for Defendant, which lists a "Steven Stroll," whose address is within the Central District of California, as its agent for service of process. Ellrod Decl. Ex. 6.
"A defendant whose contacts with a state are 'substantial' or 'continuous and systematic' can be haled into court in that state in any action, even if the action is unrelated to those contacts." Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984)). "This is known as general jurisdiction." Id. "The standard for general jurisdiction 'is an exacting standard, as it should be, because a finding of general jurisdiction permits a defendant to be haled into court in the forum state to answer for any of its activities anywhere in the world.'" Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1224 (9th Cir. 2011) (quoting Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 801 (9th Cir. 2004)).
As an initial matter, the Court finds that Plaintiff fails to show that Defendant resides in the Central District of California. The evidence to which Plaintiff cites as evidence that Defendant's mailing address is in Los Angeles County only shows that Defendant's filing agent for the Fictitious Business Name Statement, "Rockport Healthcare Svs. c/o D. Lane," has a mailing address located in Los Angeles County. Barnes Decl. Ex. 3. In fact, that document appears to confirm Defendant's statement that its physical location is in San Diego County as it specifies that Defendant is located in San Diego County. Id.
Plaintiff also cites to a printout from the California Secretary of State website showing that Defendant's agent for the service of process is located in Los Angeles County. Ellrod Decl. ¶ 3 Ex. 6. While the designation of an agent for service of process is certainly relevant to a finding of general jurisdiction (Bancroft & Masters, 223 F.3d at 1086 (citing Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d 1474, 1478 (9th Cir. 1986)), it is by no means dispositive (see Flame S.A. v. Pasha Fin., Inc., No. CV 10-5245-GW (MANx), 2010 WL 2902774, at *3 (C.D. Cal. July 26, 2 010); Gray Line Tours v. Reynolds Elec. & Eng'g Co., 193 Cal. App. 3d 190, 193-95 (1987) (holding that designation of an agent for service of process and qualification to do business in California alone did not constitute grounds for general jurisdiction); see also DVI, Inc. v. Superior Court, 104 Cal. App. 4th 1080, 1095 (2002) (holding that personal jurisdiction did not exist even though the defendant company registered to do business in California, had a California agent for service of process, and had two officers residing in California)).
Plaintiff does not offer any argument regarding whether the Court has specific jurisdiction over Defendant. As Plaintiff bears the burden of establishing proper venue (Piedmont Label, 598 F.2d at 496) and has failed to argue whether the Court has specific jurisdiction over Defendant, the Court finds that it does not have specific jurisdiction for venue purposes over Defendant.
Beyond these documents, Plaintiff does nothing more to show that Defendant "resides" in the Central District of California for purposes of venue. Accordingly, the Court finds that Plaintiff has not met its burden in showing that venue is proper under 28 U.S.C. § 1391(b)(1).
2. Did a Substantial Portion of the Acts or Omissions Occur in the Central District of California?
"In a trademark suit brought under the Lanham Act, a 'substantial part' of the events giving rise to the claims occur in any district where consumers are likely to be confused by the accused goods, 'whether that occurs solely in one district or in many.'" Golden Scorpio, 596 F. Supp. 2d at 1286 (quoting Cottman Transmission Sys. v. Martino, 36 F.3d 291, 295 (3d Cir. 1994); citing Woodke v. Dahm, 70 F.3d 983, 985 (8th Cir. 1995); Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633, 639 (2d Cir. 1956)). For purposes of analyzing venue, "only a 'modest' amount of sales of infringing product is sufficient to support venue in a particular district." Allstar Mktg. Grp., 666 F. Supp. 2d at 1130 (citing Sutter Home Winery, Inc. v. Madrona Vineyards, L.P., No. C 05-0587 MHP, 2005 WL 701599, at *4 n.2 (N.D. Cal. Mar. 23, 2005)).
Plaintiff argues that venue is proper in the Central District of California because it has alleged that Defendant has, subsequent to Plaintiff's continuous use of the "Presidio Home Care" trademark, used infringing marks in connection with the sale and offering for sale of competing services in Los Angeles County. Opp'n 3:9-24. Plaintiff further offers an affidavit describing Plaintiff receiving telephone calls from consumers inquiring about Defendant, two instances of actual consumer confusion, screenshots of Defendant's website, and a list of websites upon which Defendant allegedly advertises its services. Barnes Decl. ¶¶ 9, 13-15, Exs. 4-5.
Defendant objects to Mr. Barnes' statement that Plaintiff has received telephone calls from consumers inquiring about Defendant. Dkt. # 16 at 6. Mr. Barnes declares that he is Plaintiff's Chief Financial Officer. Barnes Decl. ¶ 1. As a result, it is likely that Mr. Barnes has personal knowledge of the existence and the content of these telephone calls. However, to the extent that Mr. Barnes speaks to the similarity between the two marks and to the reasons why the consumers were confused, the Court SUSTAINS Defendant's objection because the similarity between the marks is a legal conclusion and because Plaintiff has not demonstrated that Mr. Barnes has personal knowledge of why the consumers were confused.
Defendant also objects to Mr. Barnes' statements that (1) Plaintiff did not receive an employment verification request because it was first sent to Defendant and (2) Plaintiff's client found multiple online negative reviews about Defendant and that Plaintiff was forced to spend time and effort explaining that it was not affiliated with Defendant. Dkt. # 16 at 67. Mr. Barnes' statements clearly do not constitute hearsay as no out of court statement is offered for the truth of the matter asserted. Fed. R. Evid. 801 and 802. Mr. Barnes has personal knowledge of these events as Plaintiff's CFO. As such, Plaintiff has laid a sufficient foundation for the statements. Finally, the statements are not conclusory, vague, or overly broad. Thus, the Court OVERRULES Defendant's objections.
Defendant presents an affidavit from Defendant's Director of Operations, Mr. Guy Reggev, apparently to show that Defendant does not target clients or otherwise do business in Los Angeles. Reggev Decl. ¶¶ 1, 7. Mr. Reggev states that Defendant does not provide home care services. Id. at ¶ 8. Defendant argues that Plaintiff fails to present any admissible evidence showing that Defendant does business in Los Angeles, targets customers in Los Angeles, or that Plaintiff lost goodwill or business as a result of Defendant's use of its mark. Reply 4:13-17.
Neither Party has presented particularly compelling evidence supporting their respective positions on venue. For Defendant, Mr. Reggev's affidavit states that Defendant's "residents are almost entirely from the San Diego area or are transferred here from San Diego hospitals." Reggev Decl. ¶ 8 (emphasis added). Almost, of course, is not the same thing as all - and Defendant's advertisements could still have confused consumers living in the Central District of California even if Defendant did not ultimately provide any services to those consumers.
Plaintiff, on the other hand, has presented some admissible evidence that confusion is occurring in the Central District of California. Barnes Decl. ¶¶ 14-15. However, two instances of customer confusion likely are not enough to show the modest level of sales necessary to support venue. Delta Sigma Theta Sorority Inc. v. Bivins, Civil Action No. 13-252 (BAH), 2014 WL 700019, at *7 (D.D.C. Feb. 19, 2014); see also Allstar Mktg. Grp., 666 F. Supp. 2d at 1129-30 (finding that nineteen percent of a company's total sales was "modest" and sufficient to support venue where the defendant failed to present evidence controverting the plaintiff's proof that infringing sales occurred in the district).
Furthermore, to the extent that Plaintiff points to Defendant's website as evidence that Defendant targeted consumers in the Central District of California (Barnes Decl. ¶ 9, Exs. 4-5), Defendant's website appears to be "passive" rather than "interactive," weighing against a finding of proper venue. See Golden Scorpio, 596 F. Supp. 2d at 1287-88 (finding that venue in Arizona was not properly supported where the plaintiff's sole basis was an allegation that defendant, an Oregon restaurant, posted an advertisement on Google Maps accessible in Arizona); Shari's Berries Int'l, Inc. v. Masonhing, No. 02:06-cv-0768-GEB-GGH, 2006 WL 2382263, at *2 (E.D. Cal. Aug. 17, 2006) (finding venue improper where the defendant operated a generally accessible website that merely provided a toll-free number and email address for potential customers to reach defendant).
In light of the above, the Court finds that Plaintiff has failed to meet its burden in showing that a substantial part of the acts or omissions occurred in the Central District of California. As such, venue is also not proper under 28 U.S.C. § 1391(b)(2).
Accordingly, the Court finds that Plaintiff has failed to establish that venue is proper in the Central District of California. For this reason, the Court GRANTS Defendant's Motion to Dismiss [7]. C. Should the Action be Dismissed or Transferred to the Southern District of California?
"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." 28 U.S.C. § 1406(a). "Generally a transfer will be in the interest of justice because the dismissal of any case that could have been brought somewhere else is time-consuming and justice defeating." CYBERsitter, LLC v. Google Inc., 905 F.3d 1080, 1084 (C.D. Cal. 2012) (citing Miller v. Hambrick, 905 F.2d 259, 262 (9th Cir. 1990)). In other words, if this Action could have been brought elsewhere, then transfer to that forum would be in the interests of justice.
It appears that Defendant "resides" for venue purposes in the Southern District of California as its residential facility and mailing address are both located in San Diego County (Reggev Decl. ¶¶ 4, 6), and it conducts a substantial portion of its business in San Diego County (Reggev Decl. ¶ 5). In short, Defendant's connection with San Diego County is beyond "substantial" or "continuous and systematic" - it is physically present in San Diego County. As such, the Southern District of California would have personal jurisdiction over Defendant if it were a separate state. See Bancroft & Masters, 223 F.3d at 1086 ("The standard for establishing general jurisdiction . . . requires that the defendant's contacts be of the sort that approximate physical presence"). As such, venue is appropriate in the Southern District of California. 28 U.S.C. § 1391(b)(1).
Accordingly, the Court finds that, in the interests of justice, this Action should be transferred to the Southern District of California.
IV. CONCLUSION
For the foregoing reasons, this Court GRANTS Defendant's Motion to Dismiss and TRANSFERS the Action to the Southern District of California [7]. The Clerk to close this case.
IT IS SO ORDERED.
DATED: June 13, 2014
/s/_________
HONORABLE RONALD S.W. LEW
Senior, U.S. District Court Judge