Opinion
Case No. 03-1036-KI.
May 14, 2004
Robert A. Shlachter, Timothy S. DeJong, Stoll Stoll Berne Lokting Shlachter P.C., Portland, Oregon, Attorneys for Plaintiff.
William O. Geny, Julianne R. Davis, Chernoff Vilhauer McClung Stenzel LLP, Portland, Oregon, Attorneys for Plaintiff.
L. Grant Foster, Brett L. Foster, Holland Hart LLP, Salt Lake City, Utah, Attorneys for Defendants Browning, Browning Arms Co. and U.S. Repeating Arms Co., Inc.
Jeffrey S. Love, Ramon A. Klitzke, II, Klarquist Sparkman, LLP, Portland, Oregon, Attorneys for Defendants Browning, Browning Arms Co. and U.S. Repeating Arms Co., Inc.
Robert E. Barton, Robert E. Sabido, Cosgrave Vergeer Kester LLP, Portland, Oregon, Attorneys for Defendant Olin Corporation-Winchester Division.
Stephen D. Gay, Husch Eppenberger, LLC, Peoria, Illionois, Attorneys for Defendant Olin Corporation-Winchester Division.
OPINION
Plaintiff John Jamison brings this action for patent infringement, misappropriation of trade secrets, violation of the Lanham Act, breach of contract, breach of implied covenant of good faith and fair dealing, and tortious breach of duty of good faith and fair dealing arising out of plaintiff's alleged invention, development and patenting of rifles and cartridges. Before the court are defendant Browning Arms Co.'s Motion to Dismiss for Lack of Personal Jurisdiction (#39), defendants Browning and U.S. Repeating Arms Co.'s Motion to Sever and Transfer (#41), and defendant Olin Corporation-Winchester Division's Motion to Dismiss Fifth and Sixth Claims of Complaint (#35). For the following reasons, the Browning defendants' motions are denied and Olin Corporation-Winchester Division's motion is granted in part and denied in part.
FACTS
I. The Parties
Plaintiff John Jamison is an individual residing in Eugene, Oregon.
Defendant Olin Corporation-Winchester Division ("Winchester") is a Virginia corporation with its principal place of business in East Alton, Illinois. Winchester manufactures cartridges for firearms. Winchester has manufactured the cartridges that are accused of infringement in this lawsuit. Winchester and defendant U.S. Repeating Arms Co., Inc. ("USRAC") have entered into an agreement, wherein USARC has certain rights in connection with the manufacture and sale of guns under the Winchester trademark. Winchester sells the allegedly infringing cartridges directly or through a distribution network.
Defendant USRAC is a Delaware corporation with its principal place of business in New Haven, Connecticut. In most circumstances, USARC manufactures firearms under the Winchester trademark and sells them to Browning, who in turn sells them to distributors and dealers.
Defendant Browning is a Utah corporation with its principal place of business in Salt Lake City, Utah. Browning markets and sells sporting goods, including firearms. Some of the products accused of infringement are manufactured by USARC, sold to Browning, and then sold by Browning to distributors and dealers. Browning has advertised and sold goods to distributors based in Oregon. Browning has sold the specific firearms accused of infringement to distributors and dealers in Oregon. It has sales representatives specifically designated to cover the state of Oregon. In 2002, Browning's Oregon sales were 1.06 % of its total sales.
Defendant Browning Arms Co. ("Browning Arms") is a Utah corporation with its principal place of business in Morgan, Utah. It is a wholly owned subsidiary of Browning. Browning Arms is the research and development operation of the related Browning entities. It also handles importing and exporting. Browning Arms is the exclusive importer of Browning's products.
Browning Arms, in association with Browning, USRAC, and Winchester, performed the research and development that culminated in the allegedly infringing products. Browning Arms' design of the products was based on expectations and marketing criteria supplied by Browning and USRAC. Based on the criteria, Browning Arms created a "design package" for use by the Browning companies' oversees manufacturers. Browning Arms also set the specifications for the manufacturing process.
The allegedly infringing products sold under the Browning name are manufactured overseas and imported into the United States. Browning Arms imports all of the products on behalf of Browning and ships them to Browning's facilities in St. Louis, Missouri. On arrival, Browning Arms sells them to Browning. The products are then shipped from the warehouse facilities in St. Louis to fill orders.
The Browning and Browning Arms offices are located in different sections of the same facility, with a keyed security system that separates Browning employees from Browning Arms employees. The two companies maintain separate payrolls, bank accounts and financial statements.
Although they are separate legal entities, the Browning defendants share several common officers and directors. Some sales information is shared between the entities, although Browning Arms' representative testifies that most Browning Arms employees have no need to inquire into specific sales location information. Sales forecasts are discussed at joint meetings involving Browning and Browning Arms.
Browning Arms employees are occasionally involved in troubleshooting various problems with the production and manufacture of the allegedly infringing products. For example, if Browning receives customer complaints, they are occasionally channeled to Browning Arms for resolution.
Browning Arms' telephone records for February 2002-May 2003 reveal approximately 15,000 telephone calls to and from Oregon. However, Browning Arms and Browning share the same main telephone number, so the number of calls attributable to Browning Arms is unclear. Browning Arms submits that 95% of the calls were made by Browning, not Browning Arms employees.
Defendant Browning Manufacturing is a Utah corporation with its principal place of business in Morgan, Utah. Browning Manufacturing manufactured archery bows for sale under the Browning trademark, but has sold all of its assets to Precision Shooting Equipment. Browning Manufacturing is in the process of being dissolved.
Defendant G.I. Joe's, Inc. ("G.I. Joe's") is an Oregon corporation with its principal place of business in Wilsonville, Oregon. G.I. Joe's is a retailer of the allegedly infringing products.
II. Alleged Facts Giving Rise to Plaintiff's Claims
Plaintiff claims to have invented, developed and patented several revolutionary types of hunting rifles and cartridge concepts. Plaintiff alleges that in 1997, under the protection of confidentiality agreements, he presented some cartridge concepts to defendant Winchester and non-party Ruger, and the three commenced a joint project. Plaintiff alleges that he reached a royalty agreement with Ruger, but that Winchester would not agree to pay royalties to plaintiff. Plaintiff alleges that the project continued, however, and negotiations were ongoing about the royalties. Plaintiff also alleges that the parties reached an agreement that Winchester would not go forward with the sale of the joint project cartridges without a license agreement executed by Jamison. The negotiations regarding the license/royalties terminated in December 1999. Several months later, defendants announced a new cartridge they had developed, which plaintiff alleges was derived from his invention. Plaintiff brings this action against Winchester and the Browning entities, which develop, manufacture, distribute and sell the allegedly infringing cartridges and related firearms, and G.I. Joe's, a retailer.
DISCUSSION
Plaintiff brings patent infringement claims against all defendants. Plaintiff's claims relate to two patents: 1) the '174 patent covering firearms, and 2) the '138 patent covering cartridges. Plaintiff asserts misappropriation of trade secrets and Lanham Act claims against all defendants except G.I. Joe's. Finally, plaintiff asserts three contract-related claims against only Winchester.
I. Browning Defendants' Motion to Dismiss for Lack of Personal Jurisdiction
Browning Arms and Browning Manufacturing filed this motion to dismiss for lack of personal jurisdiction. Plaintiff has since voluntarily dismissed Browning Manufacturing, thus, the motion is moot as to Browning Manufacturing and must only be decided as to Browning Arms.
Personal jurisdiction in patent cases is decided under Federal Circuit law rather than the law of the regional circuit in which the case arose. Akro Corp. v. Luker, 45 F.3d 1541, 1543 (Fed. Cir. 1995). The plaintiff bears the burden of establishing that the defendant had the requisite contacts with the forum. Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001). When the district court does not hold an evidentiary hearing regarding personal jurisdiction, and the matter is submitted to the court based solely on affidavits and written materials, plaintiff must make only a prima facie showing. Deprenyl Animal Health, Inc. v. University of Toronto Innovations Foundation, 297 F.3d 1343, 1347 (Fed. Cir. 2002).
"Determining whether personal jurisdiction exists over an out-of-state defendant involves two inquiries: whether a forum state's long-arm statute permits service of process, and whether the assertion of personal jurisdiction would violate due process." Inamed, 249 F.3d at 1359-60. Oregon extends jurisdiction to the outer limits permitted by the state or federal constitutions. ORCP 4L. Thus, the two inquiries collapse into whether jurisdiction comports with due process. See Inamed, 249 F.3d at 1360.
The Federal Circuit applies a three-part test to make the due process determination: (1) whether the defendant has purposefully directed its activities at residents of the forum, (2) whether the claim arises out of or relates to the defendant's activities with the forum, and (3) whether assertion of personal jurisdiction is reasonable and fair. Genetic Implant Systems, Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997). The first two factors correspond with the "minimum contacts" factor of the analysis from the seminal case on personal jurisdiction, International Shoe Co. v. Washington, 326 U.S. 310 (1945).Inamed, 249 F.3d at 1360. The third factor corresponds with the "fair play and substantial justice" prong of the International Shoe test. Id.
A. Browning Arms' Contacts
Browning Arms is a Utah corporation with its principal place of business in Morgan, Utah. It is undisputed that Browning Arms has no officers or directors based in Oregon, nor does it have any business offices, employees, plants, assets, suppliers or distributers in Oregon. Browning Arms does not own or rent property in Oregon, nor maintain any bank accounts or pay taxes in Oregon.
Plaintiff's arguments regarding personal jurisdiction focus primarily on Browning Arms' connections with the other Browning defendants and Browning Arms' alleged participation with the other Browning defendants in the stream of commerce connected to this forum. In support of his stream of commerce theory, plaintiff relies on Beverly Hills Fan, Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994), which examined the stream of commerce theory in the context of patent litigation. That case involved a patent infringement action brought in Virginia against a China-based manufacturer and a New Jersey-based importer and distributor, neither of which had a physical presence in the state of Virginia. The products were sold by a different entity in Virginia. The Federal Circuit found personal jurisdiction over the China and New Jersey companies, noting that "it can be presumed that the distribution channel formed by defendants and [the Virginia retailer] was intentionally established, and that defendants knew, or reasonably could have foreseen, that a termination point of the channel was Virginia." Id. at 1564.
Browning Arms argues Beverly Hills Fan is distinguishable because in this case plaintiff has failed to establish that Browning Arms knew or had any reason to know where any of the products would end up. Browning Arms contends that after it imports the firearms, it has no knowledge or control over what happens to the products once they are sold and transferred to Browning. Additionally, Browning arms submits that in Beverly Hills Fan, unlike in this case, the importer of the goods identified itself in the manual that accompanied the products as the source of and the warranter of the products.
Browning Arms relies on Red Wing Shoe Company, Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998). InRed Wing Shoe, the plaintiff brought a declaratory judgment action for noninfringement against Hockerson-Halberstadt, Inc. ("HHI") in the District of Minnesota. HHI was a Louisiana corporation with its principal place of business in New Mexico. HHI's exclusive business was enforcing the rights associated with two footwear patents. When HHI challenged personal jurisdiction in Minnesota, Red Wing Shoe produced evidence that all of HHI's licensees sold footwear in Minnesota. Red Wing argued that HHI had a "`34-licensee distribution channel,' whereby HHI has `deliberately created a system under which HHI reaps the benefits of foreseeable sales of patented products in Minnesota.'" Id. at 1359. The court ruled that it lacked personal jurisdiction over HHI, noting that "doing business with a company that does business in Minnesota is not the same as doing business in Minnesota." Id. at 1361.
I find that this case is more like the Beverly Hills Fan case than the Red Wing Shoe case. First, the defendant in Red Wing Shoe introduced no products into the stream of commerce. HHI did not play a role in the manufacturing, distribution, or sale of any products that reached their termination point in Minnesota. Although the HHI's licensees sold footwear in Minnesota, HHI was not a part of that distribution channel. In contrast, and more similar to the defendant inBeverly Hills Fan, Browning Arms is a part of a distribution channel that designs and imports firearms that end up in Oregon. Browning Arms is a wholly owned subsidiary of Browning and the two entities share common officers and directors. As noted above, Browning's sales of all products in Oregon totaled more than $2.12 million, which is 1.06 % of the total national sales. Browning also sold 118 allegedly infringing rifles in Oregon between April 2003 and July 2003 alone. There appears to be a close collaboration between all of the Browning defendants, which supports a finding that Browning Arms had reason to know of Browning's distribution channel to Oregon.
Browning Arms argues that Browning's contacts with Oregon should not be attributed to Browning Arms. In general, "[s]o long as a parent corporation and subsidiary maintain separate and distinct corporate entities, the presence of one in a forum state may not be attributed to the other" for jurisdictional purposes.Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir. 1983). Browning Arms contends that plaintiff has failed to show any unusual control, co-mingling of assets, or other factors that one might consider in a corporate veil-piercing analysis. Browning Arms notes that the entities share the same facility, but there is a keyed security door that separates the Browning employees from the Browning Arms employees, that Browning Arms pays its own employees from its own payroll, maintains separate bank accounts and financial records, has separate executive meetings from Browning, and while conceding that some of the directors overlap, Browning Arms notes that each board has additional nonoverlapping directors.
I agree with plaintiff that Browning Arms is an integral part of the stream of commerce, which appears to flow from product design by Browning Arms, to manufacture overseas, to importation by Browning Arms, to sale from Browning Arms to Browning, to sale by Browning to retailers and distributors, including those in Oregon, and finally to sale by retailers and distributers to customers, including customers in Oregon. The companies are intricately connected. Browning Arms is correct that plaintiff has failed to show something on the order of veil piercing, but this is not required. Plaintiff only needs to show that Browning Arms knew or should have known that the products it designed, imported and sold to Browning would be sold in Oregon.
Moreover, in addition to the stream of commerce theory, plaintiff presents limited evidence to support a traditional minimum contacts theory, arguing that Browning Arms has itself had distinct contacts with Oregon. Browning Arms is apparently involved in troubleshooting various issues or problems with the production and manufacture of the allegedly infringing products, including approving technical language included in the manuals that accompany the products and in receiving some customer complaints. Browning Arms' telephone records for February 2002 through May 2003 show that approximately 15,000 phone calls were made to and from Oregon. Finally, plaintiff relies on several faxes between Browning Arms and Oregon companies.
Browning Arms contends that the telephone calls cannot be attributed to it because it shares a main telephone line with Browning, and the vast majority of the calls to Oregon were made by Browning. While Browning Arms recognizes that the court may consider the fact that the two entities share one phone line, it argues that the court should reject plaintiff's contention that Browning Arms made 15,000 phone calls to the forum state. I agree with Browning Arms that plaintiff has failed to make a sufficient showing regarding the telephone calls to give this factor much weight.
With respect to the faxes, the parties submitted numerous supplemental letters to the court regarding the content of these communications and the timing. Browning Arms submits that the faxes on which plaintiff relies were sent to a Browning Arms employee either before the cartridge patent had issued or after the complaint was filed and therefore cannot support any contacts related to alleged infringement. I agree that plaintiff must establish personal jurisdiction at the time the complaint was filed, but I disagree with Browning Arms' statement of the law that contacts before patent issuance or post-complaint are per se irrelevant. See, e.g., Beverly Hills Fan, 21 F.3d at 1563 (holding that with alleged continuing infringement, post-complaint contacts are relevant). In any event, plaintiff's last letter to the court dated April 5, 2004, points out that some of the Oregon fax communications relate to reamers used to manufacture the allegedly infringing rifles. This relates to the rifle patent, which issued several months before the cartridge patent. Thus, at least some of the faxes show contacts with Oregon after the issuance of one of the patents but before the filing of this lawsuit.
If plaintiff's only evidence of contacts with the forum were these few telephone calls and faxes, plaintiff would have a difficult time establishing personal jurisdiction under a traditional minimum contacts analysis. However, this evidence, considered in combination with the evidence discussed above, supports a finding that Browning Arms knew or should have known that a termination point for products at issue in this lawsuit was Oregon and that Browning Arms had the requisite contacts with this forum.
B. Whether the Exercise of Personal Jurisdiction Over Browning Arms is Reasonable and Fair
If the plaintiff shows that the defendant has the requisite minimum contacts with the forum state, the defendant bears the burden of presenting a "compelling case" for the unreasonableness of personal jurisdiction. Electronics for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1351-52 (Fed. Cir. 2003). Courts should consider the following factors in determining whether the exercise of jurisdiction would be unreasonable: 1) the burden on the defendant, 2) the interests of the forum state, 3) the plaintiff's interest in obtaining relief, 4) the interstate judicial 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.
Browning Arms argues that an adequate alternative forum exists in Utah and that Utah is the center of the controversy. Browning Arms contends that the majority of the witnesses knowledgeable about the design, development, manufacture, and advertisement of the allegedly infringing products work and reside in Utah and the relevant documents are located in Utah. As such, Browning Arms contends that litigation in Oregon would be a tremendous burden.
The remaining defendants do not challenge personal jurisdiction and it is in the interest of judicial economy to have all of the parties in the same forum. I find the burden on Browning Arms to be minimal, as the other Browning defendants which are represented by the same counsel will have to appear to defend this action in this state in any event. Plaintiff, an Oregon resident, has a substantial interest in litigating this case in his home state. Plaintiff also notes that his patents were drafted in Oregon and nearly all of the development activity regarding his patents occurred in Oregon. Additionally, Oregon has an interest in providing a forum for its residents to litigate patent rights. I find that Browning Arms has failed to establish the unreasonableness of personal jurisdiction and therefore conclude that the court will exercise personal jurisdiction over Browning Arms.
II. Browning and USRAC's Motion to Sever and Transfer
Defendants Browning and USRAC move to sever certain claims from this case and transfer the remaining claims to the District of Utah. 28 U.S.C. § 1404(a) provides:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
The court must balance the preference given to the plaintiff's choice of forum with the burden of litigating in an inconvenient forum. Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). The defendant has the burden of making a strong showing of inconvenience before a transfer is allowed. Private factors considered by the court include:
relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.Id. (quotation omitted). Public factors include:
the administrative difficulties flowing from court congestion; the `local interest in having localized controversies decided at home'; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty.Id. (quotation omitted).
Defendants argue that the following factors support transfer of the case to Utah. Browning Arms has filed a declaratory judgment action in Utah against Jamison, which involves the same facts and issues as this case, and which Browning Arms contends it was "forced to file" in Utah because of the lack of personal jurisdiction over Browning Arms in Oregon. Defendants argue that this case (which was filed several months before the Utah action) should be transferred to Utah, where one court with personal jurisdiction over all defendants can resolve the patent issues, and so that there is no risk of wasting judicial resources and having inconsistent judgments. Defendants also submit that Utah has a greater interest than Oregon in the outcome of the litigation because much of the allegedly infringing conduct occurred in Utah. They stress that the sales of the allegedly infringing products were made to individuals and entities throughout the United States, with only a small percentage of sales occurring in Oregon. With respect to witnesses, the Browning defendants and USRAC together expect to call at least eight potential witnesses from Utah, including individuals who will give testimony regarding the design and development of the allegedly infringing firearms. Finally, Browning and USRAC represent that defendant Winchester fully supports the transfer of this case to Utah.
Plaintiff disputes that the District of Utah can exercise personal jurisdiction over defendant G.I. Joe's. Based on the parties' original briefing, it appeared that defendants conceded this. Indeed, the Browning defendants' motion relates to its contention that the court could sever the claims against G.I. Joe's and transfer the remaining claims to Utah. However, in the numerous post-hearing submissions to the court, defendants take the position that the District of Utah does have personal jurisdiction over G.I. Joe's and G.I. Joe's informs the court that it would consent to personal jurisdiction in Utah. I decline to decide this issue because I conclude that this action should remain in this district.
Having found that this court has personal jurisdiction over Browning Arms, the District of Oregon is an adequate forum for plaintiff to bring his claims against all of the defendants. Although I do not believe it to be dispositive, I note that this action was filed before the Utah declaratory judgment action. Additionally, the burden on plaintiff, an individual, to litigate this case in Utah is likely much greater than on the corporate defendants to litigate this case here. Plaintiff also points out that he has brought several contract-related claims that a Utah district court would have to resolve under Oregon law. Finally, plaintiff offers three witnesses in addition to himself that he would call who reside in Oregon. I conclude that this action should proceed in Oregon against all of the defendants.
III. Winchester's Motion to Dismiss Fifth and Sixth Claims for Relief
Winchester moves to dismiss the fifth and sixth claims of plaintiff's Complaint for failure to state a claim upon which relief can be granted. A motion to dismiss under Rule 12(b)(6) will only be granted if it "appears beyond doubt that the plaintiff can prove no set of facts in support of his complaint which would entitle him to relief." Gilligan v. Jamco Development Corp., 108 F.3d 246, 248 (9th Cir. 1997). Normally, the review is limited to the complaint, and all allegations of material fact are taken as true and viewed in the light most favorable to the non-moving party. Id. The court, however, may consider whether conclusory allegations follow from the description of facts alleged. Holden v. Hagopian, 978 F.2d 1115, 1121 (9th Cir. 1992). The court may also review a document extrinsic to the complaint if the authenticity of the document is not contested and the complaint necessarily relies upon it.Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir.) (permissible to consider employer's group insurance application in action alleging improper denial of benefits), cert. denied, 525 U.S. 1001 (1998). Moreover, the court is not required to accept as true conclusory allegations which are contradicted by documents referred to in the complaint. Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295-96 (9th Cir. 1998).
A. Motion to Dismiss Fifth Claim
Claim five is a claim against Winchester for tortious breach of the duty of good faith and fair dealing. First, Winchester argues that the claim was brought beyond the statute of limitations under Oregon law. Oregon law provides a two-year statute of limitations for "injury to the person or rights of another." O.R.S. 12.110(1). This provision has been routinely applied to tort claims. See e.g., Bradbury v. Teachers Stds. Practices Comm'n, 328 Or. 391, 398, 977 P.2d 1153, 1157 (Or. 1999) (applying the two-year statute of limitation set forth in O.R.S. 12.110 to claim for tortious breach of duty of confidentiality). Under this provision, Winchester argues that plaintiff's claim is time-barred because he knew of the facts allegedly giving rise to this claim when Winchester announced that it was planning to sell its .300 WSM cartridges. Winchester argues that plaintiff knew this on November 20, 2000, when he reminded Winchester of its contractual obligations to plaintiff. Plaintiff filed this action in July, 2003, more than two years after this date.
Plaintiff argues that the relevant date for purposes of the statute of limitations is the date on which plaintiff suffered the alleged harm — when Winchester began manufacturing and selling the cartridges, which began less than two years before the filing of this suit. Oregon applies the "discovery rule" to determine when a cause of action accrues. See Gaston v. Parsons, 318 Or. 247, 252, 864 P.2d 1319, 1322 (Or. 1994). "A cause of action accrues when the party owning it has a right to sue on it." Duyck v. Tualatin Valley Irr. Dist., 304 Or. 151, 161, 742 P.2d 1176, 1181 (Or. 1987). Although plaintiff may have been aware of Winchester's intent, I conclude that his claim did not accrue, and the statute of limitations did not begin to run, until Winchester began to sell the cartridges and plaintiff allegedly suffered damages. The Complaint alleges that Winchester sold and introduced new cartridges within the two years prior to plaintiff filing of this lawsuit, and it is therefore timely.
Defendant's second basis for dismissal of this claim is its argument that plaintiff has not alleged and cannot prove that a special relationship existed between the parties sufficient to support a claim for tortious breach of the duty of good faith and fair dealing. The theory of tortious breach of the duty of good faith and fair dealing is recognized in limited circumstances, typically only when there is evidence of a fiduciary relationship between the parties. See, e.g., Norwood v. Atlantic Richfield Co., 814 F. Supp. 1459, 1467-68 (D. Or. 1991) (holding that under Oregon law, no "special relationship" is present in a franchisee-franchisor relationship in the absence of "exceptional" circumstances, "that is, a relationship where the franchisor has a duty independent of the contract to act for the franchisee's benefit").
Plaintiff argues that this is a fact-specific inquiry and he has made a prima facie showing that the parties had a special relationship based on trust. I suspect plaintiff will have a difficult time proving that there was a fiduciary relationship even if plaintiff can establish that his contract with Winchester was not the typical arms-length business dealing. However, construing the facts in his favor, he has made allegations sufficient to withstand a motion to dismiss this claim. The motion is denied with respect to the fifth claim.
B. Motion to Dismiss Sixth Claim
Claim six alleges that Winchester has falsely designated the origin of its .300 WSM cartridges and related firearms, which Jamison claims is likely to cause confusion, in violation of the Lanham Act. Winchester argues that the Lanham Act does not require the attribution to which plaintiff claims to be entitled. In his response, plaintiff concedes that he cannot maintain a claim under section 43(a)(1)(A) of the Lanham Act. However, plaintiff believes he can maintain a claim for false advertising under section 43(a)(1)(B). The motion to dismiss the sixth claim for relief is granted. Plaintiff has leave to amend this claim to clarify the proper statutory provision that he believes provides the basis for his claim and to make sufficiently detailed allegations regarding the nature of the alleged falsehoods.
CONCLUSION
For the foregoing reasons, Browning Arms Co.'s Motion to Dismiss for Lack of Personal Jurisdiction (#39) and Browning and U.S. Repeating Arms Co.'s Motion to Sever and Transfer (#41) are denied, and Olin Corporation-Winchester Division's Motion to Dismiss Fifth and Sixth Claims of Complaint (#35) is granted in part and denied in part. Plaintiff's Motion for Leave to Submit Transcript of Ruling in Utah Action (#106) is denied as moot.