Opinion
Case No. 2:03-CV-783 TS.
June 23, 2004
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
BACKGROUND
This matter is before the Court on Defendants' Motion to Dismiss, filed January 9, 2004. Plaintiff filed a Response on January 16, 2004; Defendants then filed a Reply on February 9, 2004. Plaintiff's original Complaint, filed September 22, 2003, arises from the issuance of a patent to W. Robert Cook by the United States Patent and Trademark Office for a bitless horse bridle, which Plaintiff alleges is identical to one for which he previously submitted a patent application.
Plaintiff includes as defendants the United States Patent and Trademark Office and its examiners Peter M. Poon, Joan M. Olszewski, Robert P. Swiatek, Nicholas D. Lucchesi, Cheryl Gibson-Baylor and Son T. Nguyen. The Court will refer to these Defendants collectively as "the governmental Defendants." Claims are made against each of the patent officers for allegedly failing to exercise due diligence by not considering Plaintiff's earlier patent application for a bitless bridle before issuing Patent No. 6,591,589 to Cook for a similar bitless bridle. Plaintiff claims the United States Patent and Trademark Office failed to adequately train its patent petition examiners who issued the patent to Cook.
Additionally, Plaintiff includes as defendants Bitless Bridle, Inc., its officers W. Robert Cook and Paul Yeagle, Jr., as well as the law firm Nixon Peabody, LLP and its partner Timothy L. Brackett. The Court will refer to these private defendants collectively as "Defendants." Plaintiff claims Cook, Yeagle, Nixon Peabody, LLP and Brackett colluded to present fraudulent information on Cook's patent application. Plaintiff further claims that subsequent marketing of the patented bitless bridle by Bitless Bridle, Inc. constitutes an infringement of Plaintiff's intellectual property rights; Plaintiff maintains the same claim against Cook and Yeagle as officers of Bitless Bridle, Inc.
Defendant Yeagle's name is misspelled in the Complaint as "Yeager." In the Memorandum in Support of Their Motion to Dismiss, Defendants corrected the spelling to Yeagle; the Court will refer to him using the corrected spelling — Yeagle.
Finally, Plaintiff claims fraud generally against all Defendants and the governmental Defendants, alleging that all parties violated the law and acted fraudulently in securing Cook's patent. Plaintiff seeks damages from each and every party as well as an injunction to prevent further sale of the bitless bridle marketed by Bitless Bridle, Inc.
The governmental Defendants have not filed an Answer to Plaintiff's Complaint. It is not clear to the Court whether they have been properly served. The instant Motion to Dismiss was filed by the private, non-governmental Defendants. The Court emphasizes that the governmental Defendants have not joined in Defendants' Motion to Dismiss and the following analysis does not apply to them.
Defendants' Motion to Dismiss argues, inter alia, lack of personal jurisdiction over Defendants. Having reviewed the pleadings and the file, and being otherwise fully informed, the Court will GRANT Defendants' Motion to Dismiss and dismiss this case against Bitless Bridle, Inc., Cook, Yeagle, Nixon Peabody, LLP and Brackett, as set forth below.
Additionally, Defendants argue that venue is not proper and that Plaintiff's allegations of fraud and patent infringement are not pled with particularity, fail to state a claim upon which relief may be granted, and are barred by res judicata under the Agreement and Stipulation of Dismissal previously litigated in California. However, given the Court's finding herein, these arguments will not be addressed.
In support of their argument to dismiss for lack of personal jurisdiction, Defendants collectively affirm they are not licensed to do business in the state, do not have offices, employees, agents or bank accounts in the state, do not own or otherwise control real estate or assets within the state, have no telephone or fax listings in the state, do not pay taxes in Utah and are not residents of the state. Defendant Bitless Bridle, Inc. concedes it has sold one bridle in Utah, generating revenue of less than $100.
Plaintiff argues this Court has personal jurisdiction over Defendants, relying principally upon the actions of Bitless Bridle, Inc., which has placed articles and advertisements in "national and international horse-related magazines and publications," and maintains a website accessible to the public, including Utah residents. Plaintiff argues these actions constitute interstate commerce and show that Bitless Bridle, Inc. intends to do business in Utah.
DISCUSSION
Plaintiff is proceeding in this matter pro se. "Any party proceeding on its own behalf without an attorney will be expected to be familiar with and to proceed in accordance with the rules of practice and procedure of this court and with the appropriate federal rules and statutes that govern the action in which such party is involved." DUCivR 83-1.1(g).
While we of course liberally construe pro se pleadings, an appellant's pro se status does not excuse the obligation of any litigant to comply with the fundamental requirements of the Federal Rules of Civil and Appellate Procedure. See Nielsen v. Price, 17 F.3d 1276, 1277 (10th Cir. 1994) (citing several cases for principle that pro se parties must comply with same procedural rules that govern all other litigants).Ogden v. San Juan County, 32 F.3d 452, 455 (10th Cir. 1994).
"To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment." Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1074 (10th Cir. 1995). "The plaintiff bears the burden of establishing personal jurisdiction over the defendant."Behagen v. Amateur Basketball Ass'n of the United States, 744 F.2d 731, 733 (10th Cir. 1984), cert. denied, 471 U.S. 1010 (1985) (partial citations omitted). As with the present case, "when a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing." Id. "We resolve all factual disputes in favor of the plaintiff . . ." Far West Capital, 46 F.3d at 1075. A pertinent caveat, however, is that "only the well pled facts of plaintiff's complaint, as distinguished from mere conclusory allegations, must be accepted as true." Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995); see also Carver v. H.R. Plus, 992 F. Supp. 1293, 1294 (D.Utah 1998).
Plaintiff contends personal jurisdiction is proper, but does not distinguish between general and specific personal jurisdiction. Because this Court may exercise jurisdiction over nonresident defendants through either general or specific jurisdiction, it will address both.
I. General Personal Jurisdiction
"General personal jurisdiction permits a court to exercise power over a defendant without regard to the subject of the claim asserted. For such jurisdiction to exist, the defendant must be conducting substantial and continuous local activity in the forum state." Arguello v. Woodworking Mach. Co., 838 P.2d 1120, 1122 (Utah 1992) (emphasis added); Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir. 1999). The Utah Court of Appeals has listed twelve factors relevant to the determination of whether business activity is substantial and continuous, sufficient to warrant general personal jurisdiction. Those factors are: "whether defendant is (1) engaged in business in this state; (2) licensed to do business in this state; (3) owning, leasing, or controlling property (real or personal) or assets in this state; (4) maintaining employees, offices, agents, or bank accounts in this state; (5) present in that shareholders reside in this state; (6) maintaining phone or fax listings within this state; (7) advertising or soliciting business in this state; (8) traveling to this state by way of salespersons, etc.; (9) paying taxes in this state; (10) visiting potential customers in this state; (11) recruiting employees in the state; (12) generating a substantial percentage of its national sales through revenue generated from in-state customers." Buddensick v. Stateline Hotel, Inc., 972 P.2d 928, 930-31 (Utah Ct.App. 1998), cert denied, 982 P.2d 88 (Utah 1999), cert denied, 528 U.S. 928 (1999).
Nixon Peabody, LLP, Brackett, Cook and Yeagle
It is undisputed that none of the Defendants are present in the State of Utah or licensed to do business in the state. Nixon Peabody, LLP is a New York law firm and is not licensed to do business in Utah. Brackett, Cook and Yeagle have never been and are not currently Utah residents, nor have they conducted business personally in this state. Furthermore, Cook has "never set foot in the state." Additionally, these Defendants affirm that they do not own, lease or otherwise control property in Utah, do not have phone or fax listings, bank accounts, employees, officers, agents or shareholders in Utah, do not pay taxes in Utah, and do not actively advertise, recruit employees or solicit business in the state. Nixon Peabody, LLP, Brackett, Cook and Yeagle are not residents of Utah and have not engaged in any of the enumerated factors that might constitute substantial and continuous business activity in the state. Accordingly, this court does not have general personal jurisdiction over them.
Bitless Bridle, Inc.
Bitless Bridle, Inc. is a Pennsylvania corporation with its principal place of business in that state. It is likewise not licensed to do business in Utah. Like the other Defendants, Bitless Bridle, Inc. does not own, lease, or control property in Utah, does not have employees, offices, agents, bank accounts or shareholders in the state, does not maintain phone or fax listings within the state, does not pay taxes in Utah and does not recruit employees in the state.
Unlike the other Defendants, Bitless Bridle, Inc. concedes that it sold a bridle, worth less than $100, in the State of Utah. Bitless Bridle, Inc. also maintains an Internet website accessible to Utah residents and advertises in national and international horse-related publications which may or may not circulate in Utah. The Court holds that these actions are not sufficient to constitute substantial and continuous activity in the State of Utah.
The Court in Soma Med. Int'l held that filing several UCC financing statements and filing five civil cases to foreclose and recover monies was not substantial and continuous activity which would subject the defendant to general personal jurisdiction.Soma Med. Int'l, 196 F.3d at 1296. Similarly, this Court finds that the sale of a single bridle in Utah does not rise to the level of substantial and continuous activity where it generated less than $100 dollars in revenue and is the only instance of business conducted in the state.
Plaintiff contends that Defendants' use of an Internet website and advertising in national and international publications constitutes pursuit of business in Utah. There is nothing in the evidence to suggest that Bitless Bridle, Inc.'s website and advertising resulted in substantial and continuous business in the State of Utah that would allow for general personal jurisdiction.
For the operation of a website to constitute substantial and continuous business activity, it must be clearly shown that the defendant conducts "`business over the Internet,' such as entering into contracts which require the `knowing and repeated transmission of computer files over the Internet.'" Patriot Systems, Inc., 21 F. Supp.2d at 1323-24 (quoting Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1123-24 (W.D. Pa. 1997)). This issue will be explored in greater detail under the Court's analysis of minimum contacts. Here, there is no evidence that Bitless Bridle, Inc.'s website is used by the company or by Utah residents to knowingly and repeatedly transmit computer files for business purposes. Further, there is no evidence that the single sale of a bridle in Utah was made using the Internet.
Bitless Bridle, Inc. does not directly advertise or solicit business in Utah. All advertisements and articles promoting the bitless bridle are placed in national and international horse-related publications. This activity occurred outside the state and cannot, therefore, be considered "local activity in the forum state." Soma Medical Int'l, 196 F.3d at 1295 (quoting Arguello, 838 P.2d at 1122).
Neither the single sale of a bridle, the maintenance of a website nor advertising in national and international horse-related publications rises to the level of substantial and continuous activity. Accordingly, the Court finds that Plaintiff has not carried his burden of making a prima facie showing that Bitless Bridle, Inc. maintained substantial and continuous local activity in Utah, such that this Court could exercise general personal jurisdiction.
II. Specific Personal Jurisdiction
Alternatively, Plaintiff's argument that personal jurisdiction is proper may be construed as a claim of specific personal jurisdiction arising under Utah's long-arm statute and Defendants' minimum contacts with the state. "[T]he evaluation of specific jurisdiction in Utah mandates a three-part inquiry: `(1) the defendant's acts or contacts must implicate Utah under the long-arm statute; (2) a `nexus' must exist between the plaintiff's claims and the defendant's acts or contacts; and (3) application of the Utah long-arm statute must satisfy the requirements of federal due process.'" Soma Med. Int'l, 196 F.3d at 1297 (quoting Nat'l Petroleum Mkt'g v. Phoenix Fuel Co., 902 F. Supp. 1459, 1465 (D.Utah 1995)) (partial citations omitted).
The Utah Supreme Court "frequently makes a due process analysis first because any set of circumstances that satisfies due process will also satisfy the long-arm statute." SII MegaDiamond, Inc. v. American Superabrasives Corp., 969 P.2d 430, 433 (Utah 1998). Accordingly, we analyze first whether specific personal jurisdiction over Defendants "comports with due process requirements of the Constitution." Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994).
A federal "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 (1980) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). "Minimum contacts" exist, sufficient to establish specific personal jurisdiction "if the defendant `purposefully avails itself of the privilege of conducting activities within the forum State.'" Far West Capital, Inc., 46 F.3d at 1074 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). If minimum contacts are established, the court must then determine "whether the exercise of personal jurisdiction over the defendants offends `traditional notions of fair play and substantial justice.'"Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 113 (1987) (quoted in OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998)).
A. Minimum Contacts Nixon Peabody, LLP, Brackett, Cook and Yeagle
Plaintiff has not alleged, and nothing in the evidence indicates, that Defendants Nixon Peabody, LLP, Brackett, Cook or Yeagle have any contacts with the State of Utah. Due to Defendants' lack of acts or contacts, including even minimum contacts, that might implicate Utah under the state's long-arm statute, this Court cannot exercise specific personal jurisdiction.Bitless Bridle, Inc.
Plaintiff argues that Defendant Bitless Bridle, Inc. intends to conduct business in Utah because they maintain an Internet website accessible by the public, including Utah residents. Whether or not Internet sites establish minimum contacts sufficient for personal jurisdiction is determined by the extent to which business is conducted over the Internet. Patriot Systems, Inc., 21 F. Supp.2d at 1324. As noted previously, clear conduct of "business over the internet," defined by "repeated and knowing" exchange of information via the Internet, is sufficient to constitute personal jurisdiction. Id. (quoting Zippo Mfg. Co., 952 F. Supp. at 1123-24). At the other end of the spectrum, passive Internet sites which merely provide information are not sufficient to establish personal jurisdiction. Id. Defendant's website offers a great deal of information about their product. It also allows the customer to purchase the product, either by calling a listed telephone number or by placing an order on the website. While offering more than a passive website, the Court finds that the capability of placing an order on the site does not rise to the level of business conduct "which require[s] the `knowing and repeated transmission of computer files over the Internet.'" Id.
Plaintiff also claims that the Bitless Bridle website contains links with other websites. While Defendant's website contains information from various sources, Plaintiff presented no evidence of actual links to other websites and Defendant's current website contains no such links.
Plaintiff next contends that Bitless Bridle, Inc. solicits business in Utah by placing articles and advertisements in national and international publications. As noted, mere advertising in national publications that may circulate in the forum state does not constitute the purposeful availment required to establish personal jurisdiction over the advertisers.Federated Rural Elec. Ins. Corp., 17 F.3d at 1305. Accordingly, Bitless Bridle, Inc.'s placement of articles and advertisements in national and international horse-related publications which may eventually circulate in Utah does not create minimum contacts sufficient to establish specific personal jurisdiction in the instant case.
Lastly, Bitless Bridle, Inc. admits that a single bridle has been sold in Utah, generating revenue of less than $100. Defendant makes no mention of the means by which the bridle was sold. Due to Defendant's absence from the state, the Court assumes, without deciding, that the purchase was made either by placing an order on the Bitless Bridle website, by phoning the order in using the number provided on that website, or by responding to an advertisement in a national publication. To rule that a single, unsubstantial sale completed through the Internet, telephone or mail is a purposeful attempt by the seller to direct business at a particular forum would expand personal jurisdiction well beyond its proper bounds. Bitless Bridle, Inc. has not established minimum contacts — through the single sale of a horse bridle to a Utah resident — necessary for the Court to exercise specific personal jurisdiction. Because pro se pleadings are liberally construed, the Court considers, in the alternative, whether minimum contacts, if established, would "offend traditional notions of fair play and substantial justice." Int'l Shoe Co., 326 U.S. at 316.
B. Federal Standards of Due Process
"Notions of fair play and substantial justice" are satisfied when minimum contacts with the forum state are "reasonable" under the circumstances. Intercon, Inc. v. Bell Atlantic Internet Solutions, Inc., 205 F.3d 1244, 1248 (10th Cir. 2000). Five factors are used in considering "whether the exercise of jurisdiction is reasonable: (1) the burden on the defendant, (2) the forum state's interest in resolving the dispute, (3) the plaintiff's interest in receiving convenient and effective relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering fundamental substantive social policies." Id. at 1249; see also OMI Holdings, Inc., 149 F.3d at 1095.
First, the burden on Defendant Bitless Bridle, Inc. would be substantial as they are a Pennsylvania corporation, located a great distance from Utah. Second, Utah does not have an interest in resolving the dispute. Plaintiff's grievances with Bitless Bridle, Inc. arose in California and were to have been resolved previously in that state through a settlement agreement. Plaintiff's further allegations that Bitless Bridle, Inc. has caused harm, through patent infringement, in Massachusetts, Maryland, Pennsylvania, California and Virginia only confirm the Court's opinion that those states, not Utah, have an interest in resolving the dispute. Third, resolution of the controversy in the state of Utah would be more convenient for the Plaintiff. However, Plaintiff has failed to show that Utah is the only forum where he could receive effective relief. Fourth, Utah is not the most efficient forum in which to bring the case. None of the allegedly fraudulent acts, for which Plaintiff claims a cause of action, occurred in Utah. Additionally, neither Defendant Bitless Bridle, Inc. nor witnesses are located within the state. The last factor is not applicable in this case. Weighing all of the above factors, the Court finds that exercise of specific personal jurisdiction, based on minimum contacts, would be unreasonable and violative of Defendant Bitless Bridle, Inc.'s federal due process rights.
Plaintiff has failed to make a prima facie case that Defendants Bitless Bridle, Inc., Cook, Yeagle, Nixon Peabody, LLP and Brackett have conducted substantial and continuous activity in the State of Utah or, in the alternative, that Defendants have established minimum contacts with Utah, providing for specific personal jurisdiction that would not offend "notions of fair play and substantial justice." Accordingly, this Court finds that Plaintiff has failed to establish personal jurisdiction over the Defendants. The Court finds in favor of Defendants, and will grant the Motion to Dismiss.
CONCLUSION
Based upon the above, it is hereby
ORDERED that Defendants' Motion to Dismiss is GRANTED; it is further
ORDERED that this case be DISMISSED against Defendants Bitless Bridle, Inc., Cook, Yeagle, Nixon Peabody, LLP and Brackett; it is further
ORDERED that a Status Conference be set for the remaining governmental Defendants — the United States Patent and Trademark Office and its examiners Peter M. Poon, Joan M. Olszewski, Robert P. Swiatek, Nicholas D. Lucchesi, Cheryl Gibson-Baylor and Son T. Nguyen — on July 29, 2004 at 2:30 p.m.