Opinion
Civil Action No. 1:19-cv-1534
2020-02-10
SAFETY EQUIPMENT INSTITUTE, Plaintiff, v. SIGNATURE LACROSSE, LLC, and Daniel Soviero, Defendants.
James Kevin Fee, Morgan Lewis & Bockius LLP, Washington, DC, for Plaintiff. James C. Rubinger, Plave Koch PLC, Reston, VA, for Defendant.
James Kevin Fee, Morgan Lewis & Bockius LLP, Washington, DC, for Plaintiff.
James C. Rubinger, Plave Koch PLC, Reston, VA, for Defendant.
ORDER
T.S. Ellis, III, United States District Judge
At issue in this trademark infringement, unfair competition, false advertising, and breach of contract action is defendants' Motion to Dismiss or Alternatively, to Transfer Venue. Plaintiff Safety Equipment Institute ("SEI") sued defendant Signature Lacrosse, LLC and its founder and Chief Executive Officer, defendant Daniel Soviero. Plaintiff's claims arise from defendants' alleged unauthorized use of plaintiff's trademark in the sale of lacrosse balls. Defendants moved to dismiss for improper venue pursuant to Rule 12(b)(3), Fed. R. Civ. P., and, alternatively, sought transfer pursuant to 28 U.S.C. § 1404(a) to the Middle District of Florida, the District in which both defendants reside.
The matter has been fully briefed and argued and is now ripe for disposition. For the reasons that follow and for the reasons stated from the Bench, defendant's motion must be denied.
I.
Defendants' Rule 12 motion to dismiss on the ground of improper venue and to transfer under § 1404(a) did not mention or raise any defense concerning lack of specific personal jurisdiction over defendant Daniel Soviero. Indeed, not until defendants filed a reply brief with respect to their motion did defendant raise a Rule 12(b)(2) defense of lack of personal jurisdiction on defendant Daniel Soviero's behalf. Instead, defendants' Rule 12 motion was made pursuant only to Rule 12(b)(3). Consistent with Rule 12(h)'s plain language and well-established authority, defendant Soviero waived his Rule 12(b)(2) defense of lack of personal jurisdiction by failing to raise the defense in his Rule 12 motion to dismiss. Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee , 456 U.S. 694, 704, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) (noting that a defense of lack of personal jurisdiction is waived "if not timely raised in the answer or a responsive pleading"); Fed. R. Civ. P. 12(h)(1)(A) ("A party waives any defense listed in Rule 12(b)(2)–(5) by: ... omitting it from a motion in the circumstances described in Rule 12(g)(2)...."); Fed. R. Civ. P. 12(g)(2) ("Except as provided in Rule 12(h)(2) or (3), a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.").
Seeking to avoid this result, defendants contended for the first time at oral argument that their initial motion served to preserve defendant Soviero's objection to lack of personal jurisdiction. In support of this contention, defendants relied on the Second Circuit's decision in Mattel, Inc. v. BarbieClub.com. 310 F.3d 293 (2d Cir. 2002), to assert that "to preserve the defense of lack of personal jurisdiction, a defendant need only state the defense in its first responsive filing and need not articulate the defense with any rigorous degree of specificity." Id. at 307 ; see also Guthrie v. Flanagan , 3:07-cv-479, 2007 WL 4224722 at *3 (E.D. Va. Nov. 27, 2007) (citing Mattel, Inc. , 310 F.3d at 307 ). Defendant Soviero's argument in opposition to waiver is foreclosed by the plain language of Rule 12(h), and his citation of authority is inapposite and does not alter this result.
Defendants' citations to authority do not address whether an argument for dismissal on the ground of improper venue preserves an objection to personal jurisdiction. In Mattel, Inc. , the Second Circuit applied Rule 12(h)'s standard in dicta to address whether defendants waived an objection to in rem jurisdiction. Id. at 306–07. The Second Circuit made clear that no waiver occurred where one defendant stated the objection at a preliminary conference and restated the objection in a brief filed in accordance with the district court's briefing schedule. Id. Similarly, no waiver occurred where another defendant's answer did not admit plaintiff's allegations regarding jurisdiction and "specifically referred the issue of in rem jurisdiction to the district court." Id. Whereas defendants' initial motion pursuant to Rule 12(b)(3) and § 1404(a) here did not state the defense of lack of personal jurisdiction at all, the Mattel, Inc. defendants clearly objected to in rem jurisdiction in their initial defensive actions. See id.
Nor is Guthrie v. Flanagan , 3:07-cv-479, 2007 WL 4224722 (E.D. Va. Nov. 27, 2007), to the contrary. There, plaintiffs' argument that defendant "constructively waived objection to jurisdiction" by filing a late answer was rejected where the late answer contained a personal jurisdiction objection and defendant subsequently filed a motion to dismiss objecting to personal jurisdiction. Id. at *3. In contrast to defendants here, the defendant in Guthrie "made no appearance in court that might constitute waiver" before he filed an answer and a motion to dismiss, "both of which asserted his objection to personal jurisdiction" Id.
Defendants argued that plaintiff's failure to allege events or omissions in the Eastern District of Virginia required dismissal for improper venue, not dismissal for lack of personal jurisdiction as to any defendant. Defendants' Motion at 4. To be sure, the concepts of venue and personal jurisdiction are "closely intertwined." Convergence Techs. (USA), LLC v. Microloops Corp. , 711 F. Supp. 2d 626, 633 n. 9 (E.D. Va. 2010) (citing 14D Wright et. al., Federal Practice and Procedure § 3827, at 569). But a defendant may not rely on an objection to improper venue under Rule 12(b)(3) to advance and thereby preserve an objection to personal jurisdiction under Rule 12(b)(2). To permit a venue objection to preserve a personal jurisdiction objection would ignore the clear consequences of Rules 12(g)(2) and 12(h)(1)(A), which provide that a defense listed in Rule 12(b)(2)–(5) is waived if that defense was omitted from a previously-filed Rule 12 motion despite that defense's availability at the time of the Rule 12 motion's filing.
Defendants only referred to personal jurisdiction in their § 1404(a) transfer argument to show that this suit might have been brought in the Middle District of Florida where both defendants reside and are subject to general personal jurisdiction. Defendants' Motion at 7–8. This reference to personal jurisdiction for the purposes of § 1404(a) fails to preserve a personal jurisdiction objection under Rule 12(b)(2) because the existence of general personal jurisdiction in the Middle District of Florida does not preclude the exercise of specific personal jurisdiction in the Eastern District of Virginia. See Daimler AG v. Bauman , 571 U.S. 117, 127, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (distinguishing between general personal jurisdiction and specific personal jurisdiction).
Notably, the tiling of a motion to transfer under § 1404(a) does not foreclose a defendant from contesting personal jurisdiction in a future Rule 12 motion or an answer. See Convergence Techs. (USA). LLC , 711 F. Supp. 2d at 632-33 (holding that defendants' motion for severance and transfer did not waive objection to personal jurisdiction). But, as noted, defendants' initial motion was based on both Rule 12(b)(3) and § 1404(a), and the motion tailed to preserve defendant Soviero's objection to personal jurisdiction.
In sum, defendant Soviero waived his objection to lack of personal jurisdiction by failing to state that objection in the first responsive filing, defendants' Motion to Dismiss or Alternatively, to Transfer Venue.
II.
Venue is proper in any "judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." 28 U.S.C. § 1391(b)(2). The Fourth Circuit has made clear that " ‘the entire sequence of events underlying the claim’ " must be reviewed to determine "whether events or omissions arc sufficiently substantial to support venue." Mitrano v. Hawes , 377 F.3d 402, 405 (4th Cir. 2004) (quoting Uffner v. La Reunion Francaise, S.A. , 244 F.3d 38, 42 (1st Cir. 2001) ). And, when no evidentiary hearing is held, "[a] plaintiff is obliged ... to make only a prima facie showing of proper venue" to defeat a Rule 12(b)(3) motion. Aggarao v. MOL Ship Mgmt. Co., Ltd. , 675 F.3d 355, 366 (4th Cir. 2012) (citation omitted).
Plaintiffs correctly argue that venue is proper for each of the Complaint's claims because "a substantial part of the events or omissions" underlying its claims occurred in this District. § 1391(b)(2). In a trademark infringement action, venue is proper in the district "where the deceived customer buys the defendant's product in the belief that he is buying the plaintiff's." See, e.g. , Adidas America, Inc. v. Cougar Sport, Inc. , 169 F. Supp. 3d 1079, 1095 (D. Or. 2016) (holding that sale of five allegedly infringing items to customers in Oregon made venue proper in Oregon). Here, defendants admit to selling products in Virginia, and plaintiff contends that these products infringed plaintiff's trademark. Accordingly, plaintiff has made a prima facie venue showing for trademark infringement, and this allegedly infringing activity also forms the basis for plaintiff's false advertising, unfair competition, and breach of contract claims. Defendants' motion to dismiss for improper venue must therefore be denied.
III.
The general transfer statute, 28 U.S.C. § 1404(a), allows transfer to a transferee district only if the case "might have been brought" in that district. Neither party disputes that personal jurisdiction and venue would be proper in the Middle District of Florida. Thus, the only dispute is whether transfer is appropriate.
A district court may transfer a civil action to any other appropriate district court "for the convenience of the parties and witnesses, [and] in the interest of justice...." 28 U.S.C. § 1404(a). Here, it is undisputed that plaintiff's home forum is the Eastern District of Virginia, and thus plaintiff's forum choice is entitled to substantial weight. See Piper Aircraft Co. v. Reyno , 454 U.S. 235, 255, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981) ("[T]here is ordinarily a strong presumption in favor of the plaintiff's choice of forum ...."). Defendants argue that litigating in the Eastern District of Virginia would burden defendants because their witnesses and evidence are located in the Middle District of Florida. This argument for transfer fails; the purpose and function of § 1404(a) is not to "shift the balance of inconvenience" from defendant to plaintiff. See Smithfield Packing Co., Inc. v. V. Suarez & Co., Inc. , 857 F. Supp. 2d 581, 589 (E.D. Va. 2012) ; Board of Trustees, Sheet Metal Workers Nat. Fund v. Baylor Heating & Air Conditioning, Inc. , 702 F. Supp. 1253, 1259 (E.D. Va. 1988). Where, as here, plaintiff's choice to sue in its home forum must be given substantial weight, a motion to transfer must be denied when the transfer's primary effect would be to shift the balance of inconvenience between the parties. Because none of the § 1404(a) factors outweigh plaintiff's choice to litigate in its home forum, defendants' motion to transfer must be denied.
Accordingly, for these reasons and the reasons stated from the Bench,
It is hereby ORDERED that defendants' Motion to Dismiss or, Alternatively, to Transfer Venue (Dkt. 18) is DENIED.