“California’s 4 long-arm statute . . . is coextensive with federal due process requirements, so the jurisdictional 5 analyses under state law and federal due process are the same.”
How later courts described this case
- “California’s 4 long-arm statute . . . is coextensive with federal due process requirements, so the jurisdictional 5 analyses under state law and federal due process are the same.”
- finding it 8 “plainly unconstitutional” “to attribute [an insurer’s] contacts to [defendant] by considering the 9 ‘defending parties’ together and aggregating their forum contacts in determining whether it had 10 jurisdiction.”
- “A district court acts within its discretion to 6 deny leave to amend when amendment would be futile, when it would cause undue prejudice to 7 the defendant, or when it is sought in bad faith.”
- “The question of personal jurisdiction, which goes to the court’s power to exercise 3 control over the parties, is typically decided in advance of venue, which is primarily a matter of 4 choosing a convenient forum.”
Written by the judges who cited it.
The opinion
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 KEVIN BARRY FINE ART Case No. 18-cv-03358-HSG
ASSOCIATES,
8 ORDER GRANTING MARRIOTT’S
Plaintiff, AND DESIGN FORCE’S MOTIONS TO
9 DISMISS
v.
10 Re: Dkt. Nos. 260, 267
KEN GANGBAR STUDIO, INC.,
11
Defendant.
12
13 On June 8, 2018, Plaintiff Kevin Barry Fine Art Associates (“KBFAA”) brought this suit
14 against Defendant Ken Gangbar Studio Inc. (“KGSI”) for a declaratory judgment of non-
15 infringement. See Dkt. No. 1 (“Compl.”).1 On August 7, 2018, KGSI submitted an answer and
16 counterclaim against not only KBFAA but also its owner Kevin A. Barry, John Johnson, Richard
17 McCormack, and Richard McCormack Design d/b/a Studio McCormack, asserting copyright
18 infringement, as well as conspiracy to commit and substantive violations of the Racketeer
19 Influence and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961–1968. See Dkt. No. 18.
20 KGSI filed first amended counterclaims on January 24, 2020, listing an additional eleven
21 counterclaim defendants. Dkt. Nos. 130, 133. On May 5, 2020, KGSI then filed a motion for
22 leave to file second amended counterclaims, to include four additional counterclaim defendants
23 (KBFAA of Nevada, Inc., Allison Barry, Marriott International Inc. (“Marriott”), and Design
24 Force Corporation (“Design Force”)), and identify additional artwork that was allegedly infringed.
25 Dkt. No. 218. The Court granted the motion and KGSI filed its second amended counterclaims.
26
27
1 Plaintiff also sought “costs of suit . . . including attorneys’ fees,” as well as “such other and
1 See Dkt. Nos. 240 (“SACC”), 244.
2 Now pending before the Court are Marriott’s and Design Force’s motions to dismiss for
3 lack of personal jurisdiction and improper venue, for which briefing is complete. See Dkt. No.
4 260 (“MMot.”), 267 (“DMot.”), 272 (“MOpp.”), 275 (“DOpp.”), 276 (“MReply”), and 279
5 (“DReply”). For the reasons detailed below, the Court GRANTS both Marriott’s and Design
6 Force’s motions to dismiss for lack of personal jurisdiction.
7 I. BACKGROUND
8 A. KGSI’s Allegations
9 KGSI alleges that “Kevin Barry, Allison Barry, their companies, and others have run their
10 art brokerage though a pattern of criminal copyright infringement,” by “target[ing] desired
11 artworks, mak[ing] counterfeit copies, and sell[ing] them, often en masse, to hotel chains,
12 restaurants, resorts, and others.” SACC at 2. “Among the many artworks thus targeted have been
13 the organic and emotionally-resonant wall sculptures of international commercial artist Ken
14 Gangbar,” and KGSI “owns the copyrights to these works.” Id. Specific to Marriott and Design
15 Force, the SACC makes the following allegations:
16 Commissioning Counterclaim defendants (1) Host Hotels and CHC
Bayview, (2) Grill Concepts, (3) Design Force, (4) Marriott
17 International, (5) Irvine, (6) Remington, (7) Union Bank, and (8) VSE
infringed one or more of the Copyrighted Works by doing at least the
18 following: selecting, commissioning, purchasing, and installing for
public display the infringing artworks found, respectively, at (1) the
19 Bayview Marriott in Newport Beach, California; (2) the Ritz Prime
Seafood restaurant in Newport Beach, California; (3) the Franklin
20 Marriott in Franklin, Tennessee; (4) the JW Marriott at the Mall of
America near Minneapolis, Minnesota; (5) the Villas at Playa Vista –
21 Sausalito apartments in Playa Vista, California; (6) the Crowne Plaza
Annapolis hotel in Annapolis, Maryland; (7) a Union Bank branch in
22 Tempe, Arizona; (8) the Westin Nanea Ocean Villas Resort on Maui
in Hawaii, and, in the case of the artist’s rendering of Swish described
23 above, on a webpage marketing the resort; and (9) the Westin
Chattanooga hotel in Chattanooga, Tennessee.
24
The infringing artwork placed and publicly displayed at the JW
25 Marriott at the Mall of America near Minneapolis was selected for
placement there by Design Force, which was hired, and paid $200,000
26 or more, to perform interior design services, including selection of
hotel artwork, and further including, in particular, Design Force’s
27 selection of the infringing work purchased by the hotel and displayed,
of the infringing artwork for placement at the hotel. A senior interior
1 design manager at Marriott International specifically recommended
that Design Force use KBFAA to purchase an artwork substantially
2 similar to KGSI works for display at the hotel[.]
3 As yet another example, Design Force and Marriott International
vicariously infringed KGSI’s copyrights. Each had the right and the
4 ability to supervise and control the selection of artwork to be
purchased and placed in at least the JW Marriott at the Mall of
5 America, if not other venues. They selected an infringing copy of Mr.
Gangbar’s work for placement there. And each financially benefitted
6 from its selection rights and duties. Design Force was paid hundreds
of thousands of dollars for selecting artworks for the hotel, including
7 the infringing work. Marriott International was paid by the hotel’s
owners to manage the hotel, including, on information and belief,
8 assisting with the selection and approval of artwork placed in it, and
including ensuring that artwork selected for the hotel met JW
9 Marriott’s brand standards. In performing these paid services, a senior
interior design manager at Marriott International specifically guided
10 Design Force to KBFAA and to a disk artwork substantially similar
to KGSIs’.
11
Id. at ¶¶ 45, 46, 70. KGSI also alleges that “[t]he Court has personal jurisdiction over each
12
counterclaim defendant because each of them either resides in California, committed the acts
13
described here in California, or committed the acts described here purposefully in concert with
14
counterclaim defendants who live here and who have here committed the acts complained of in
15
these counterclaims.” Id. at ¶ 2.
16
B. Evidence in Support of Motions to Dismiss
17
i. Marriott
18
Michael L. Martinez, Senior Vice President and Associate General Counsel for Dispute
19
Resolution at Marriott International, Inc., submitted a declaration in support of Marriott’s motion.
20
See Dkt. No. 260-1. Martinez explained that “Marriott is a Delaware corporation with its
21
headquarters located in Bethesda, Maryland.” Id. at ¶ 3. Martinez noted that “Marriott operates,
22
franchises or licenses approximately seven thousand four hundred twenty properties worldwide in
23
its portfolio of brands,” where “[a]pproximately five hundred of the properties . . . are located in
24
California.” Id. at ¶¶ 5–6. Specifically, Martinez explained that it owns only ten properties, and
25
none of those are located in California. Id. Additionally, while “thirty percent of Marriott’s
26
worldwide portfolio of properties are managed by Marriott,” “[t]he remaining seventy percent . . .
27
are franchised or licensed by Marriott but owned and managed by other persons or entities.” Id. at
1 ¶ 5.
2 ii. Design Force
3 Bruce G. Davine, Chairman of the Board of Directors of Design Force, submitted a
4 declaration in support of Design Force’s motion. See Dkt. No. 267-1. Davine explained that
5 “Design Force is a Colorado corporation with its headquarters and principal place of business and
6 agent all located in Denver, Colorado.” Id. at ¶ 2. The interior design company “has been
7 engaged to design approximately three hundred fifty to five hundred projects,” including
8 “approximately thirty five to fifty projects for which the property was located in California.” Id. at
9 ¶¶ 3–4. As relevant to this case, Davine explained that Design Force was hired by a Minnesota-
10 based contractor to provide interior design services for the JW Marriott MN. Id. at ¶ 5. After
11 Marriott International, Inc. rejected Design Force’s initial art source proposals, Davine noted that
12 Marriot’s design team suggested KBFAA based on their recent work on a “Marriott property in
13 Tennessee.” Id. at ¶ 6.
14 II. LEGAL STANDARD
15 “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears
16 the burden of demonstrating that the court has jurisdiction over the defendant.” Pebble Beach Co.
17 v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). Although the court “may not assume the truth of
18 allegations in a pleading which are contradicted by affidavit,” CollegeSource, Inc. v.
19 AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011) (internal quotation marks omitted), the
20 court must resolve conflicts between the facts contained in the parties’ affidavits in plaintiff’s
21 favor. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). When
22 the court does not conduct an evidentiary hearing, the plaintiff need only make a prima facie
23 showing of facts supporting personal jurisdiction to avoid dismissal. See Myers v. Bennett Law
24 Offices, 238 F.3d 1068, 1071 (9th Cir. 2001).
25 Due process limits a court’s power to “render a valid personal judgment against a
26 nonresident defendant.” See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291
27 (1980). Where a state authorizes “jurisdiction on any basis not inconsistent with the Constitution
1 courts must determine whether the exercise of jurisdiction over a defendant “comports with the
2 limits imposed by federal due process.” Daimler AG v. Bauman, 571 U.S. 117, 126 (2014); see
3 also Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (“California’s
4 long-arm statute . . . is coextensive with federal due process requirements, so the jurisdictional
5 analyses under state law and federal due process are the same.”). To comport with due process, a
6 court may “exercise personal jurisdiction over an out-of-state defendant if the defendant has
7 ‘certain minimum contacts with [the State] such that the maintenance of the suit does not offend
8 traditional notions of fair play and substantial justice.’” Goodyear Dunlop Tires Operations, S.A.
9 v. Brown, 564 U.S. 915, 924 (2011) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
10 (1945)) (internal quotation marks omitted); see also Walden v. Fiore, 571 U.S. 277, 286 (2014)
11 (“Due process requires that a defendant be haled into court in a forum State based on his own
12 affiliation with the State, not based on the random, fortuitous, or attenuated contacts he makes by
13 interacting with other persons affiliated with the State.”) (internal quotations omitted).
14 A plaintiff may invoke either general or specific personal jurisdiction. Ranza v. Nike, Inc.,
15 793 F.3d 1059, 1068 (9th Cir. 2015). “[G]eneral jurisdiction requires affiliations so continuous
16 and systematic as to render the foreign corporation essentially at home in the forum State, i.e.,
17 comparable to a domestic enterprise in that State.” Daimler, 571 U.S. at 133 n.11 (internal
18 quotations, citations, and alterations omitted). To establish specific personal jurisdiction:
19 (1) The non-resident defendant must purposefully direct his activities
or consummate some transaction with the forum or resident thereof;
20 or perform some act by which he purposefully avails himself of the
privilege of conducting activities in the forum, thereby invoking the
21 benefits and protections of its laws;
(2) the claim must be one which arises out of or relates to the
22 defendant’s forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play and
23 substantial justice, i.e. it must be reasonable.
24 Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (quoting Schwarzenegger, 374 F.3d at 802).
25 The plaintiff bears the burden of satisfying the first two prongs of the test. Schwarzenegger, 374
26 F.3d at 802.
27 III. MARRIOTT’S MOTION TO DISMISS
1 decides the issue of personal jurisdiction first. See Leroy v. Great W. United Corp., 443 U.S. 173,
2 180 (1979) (“The question of personal jurisdiction, which goes to the court’s power to exercise
3 control over the parties, is typically decided in advance of venue, which is primarily a matter of
4 choosing a convenient forum.”). Marriott argues KGSI fails to establish sufficient contacts such
5 that the exercise of general or specific jurisdiction is appropriate. MMot. at 6–17. The Court
6 analyzes each issue in turn.
7 A. General Jurisdiction
8 It is not clear whether KGSI argues that the Court has general jurisdiction over Marriott.
9 Nonetheless, the Court finds that it does not. Martinez explains that Marriott is incorporated in
10 Delaware and headquartered in Maryland. See Dkt. No. 260-1 at ¶ 3. Of the 7,420 properties in
11 its portfolio of brands, Marriott owns only ten, none of which are located in California. Id. at ¶¶
12 5–6. Additionally, although Martinez notes that five hundred portfolio properties are located in
13 California, he also says that only “thirty percent of Marriott’s worldwide portfolio of properties
14 are managed by Marriott” and “[t]he remaining seventy percent . . . are franchised or licensed by
15 Marriott but owned and managed by other persons or entities.” Id. at ¶ 5. Based on this
16 information, the Court cannot say that Marriott’s affiliations are so “continuous and systematic” as
17 to render it “at home” in California. See Daimler, 571 U.S. at 139. Nor does Tsui-Ming Chen’s
18 declaration noting that Marriott is or has been a party in eighty actions within the Northern District
19 of California change this outcome. See Dkt. No. 272-1.2 There is no information provided about
20 the role that Marriott has had in any of the litigation, the approximate dates of those cases, or
21 whether the cases concern incidents that specifically occurred within California. The Court does
22 not have general jurisdiction over Marriott.
23 B. Specific Jurisdiction
24 A plaintiff can satisfy the minimum contacts prong by showing either that Marriott
25 purposefully availed itself of the privilege of conducting activities in California or purposefully
26 directed its activities towards California. See Schwarzenegger, 374 F.3d at 802. “A purposeful
27
1 availment analysis is most often used in suits sounding in contract,” while “[a] purposeful
2 direction analysis, on the other hand, is most often used in suits sounding in tort.” Id. A copyright
3 infringement action sounds in tort. Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064,
4 1069 (9th Cir. 2017). Accordingly, the Court will use the purposeful direction analysis. To
5 establish purposeful direction, KGSI must show that Marriott “(1) committed an intentional act,
6 (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be
7 suffered in the forum state.” Id.
8 KSGI argues that specific jurisdiction exists because Marriott directed its activities at
9 California by referring interior designers to KBFAA to procure allegedly infringing art for
10 Marriott’s various properties. MOpp. at 3–6. Additionally, KGSI argues that the SACC includes
11 allegations that Marriott took the same actions at other Marriott-branded hotels, including the
12 Bayview Marriott in Newport Beach, California. Id. at 2. The Court does not find either of these
13 arguments persuasive.
14 KGSI attempts to show purposeful direction by alleging that Marriott targeted California
15 by recommending KBFAA to the interior designer selected to decorate the JW Marriott at the Mall
16 of America near Minneapolis. See SACC at ¶¶ 45, 46, 70. Significantly, the Ninth Circuit has
17 given recent guidance on how to analyze purposeful direction, and specifically the express aiming
18 prong, in a copyright infringement action. See Axiom, 874 F.3d at 1069–71. In Axiom, the Ninth
19 Circuit recognized that it had previously held “a defendant’s ‘alleged willful infringement of [a
20 plaintiff’s] copyright, and its knowledge of both the existence of the copyright and the forum of
21 the copyright holder,’ established ‘individualized targeting’” sufficient to satisfy the express
22 aiming prong. Id. (quoting Washington Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 678–
23 79 (9th Cir. 2012)). However, the Axiom court found that after Walden v. Fiore, 571 U.S. 277,
24 289 (2014), the “individualized targeting” test was no longer sufficient. Id. Instead, a court “must
25 look to the defendant’s ‘own contacts’ with the forum, not to the defendant’s knowledge of
26 [another party’s] connections to a forum.” Id. (quoting Walden, 571 U.S. at 289). In Walden, the
27 Supreme Court rejected plaintiffs’ argument that its “contacts with the defendant and forum
1 not create sufficient contacts with Nevada [(the forum state at issue)] simply because he allegedly
2 directed his conduct at plaintiffs whom he knew had Nevada connections.” Id.
3 Walden and Axiom are dispositive here. Even assuming that KGSI properly alleged that
4 Marriott knew the works infringed KGSI’s copyright, its allegations that Marriott contracted with
5 KBFAA cannot alone establish purposeful direction. “Such reasoning improperly attributes a [co-
6 defendant’s] forum connections to the defendant and makes those connections ‘decisive’ in the
7 jurisdictional analysis.” Id.; see also Rush v. Savchuk, 444 U.S. 320, 332 (1980) (finding it
8 “plainly unconstitutional” “to attribute [an insurer’s] contacts to [defendant] by considering the
9 ‘defending parties’ together and aggregating their forum contacts in determining whether it had
10 jurisdiction.”). KGSI points only to KBFAA’s California contacts, but it makes little sense to say
11 that Marriott’s actions were expressly aimed at California, given that the alleged infringing
12 artwork was selected for and later displayed at the JW Marriott hotel in Minnesota.
13 Confusingly, KGSI argues that its allegations are broader than the Minnesota hotel and that
14 its allegations against Marriott include “at least five [] hotels under Marriott-owned brands,”
15 including the Bayview Marriott in Newport Beach, California. MOpp. at 1. However, the SACC
16 does not include these allegations. Instead, paragraph 45 lists eight commissioning counterclaim
17 defendants, and nine “respective[]” venues where the allegedly infringing artwork is displayed.
18 See SACC at ¶ 45. The Bayview Marriott in Newport Beach, California is linked directly to Host
19 Hotels and CHC Bayview, not Marriott International, Inc. Id. Additionally, in light of the
20 complex management and ownership structure explained by Mr. Martinez, KGSI cannot simply
21 rely on the Marriott name. Cf. Holland Am. Line Inc. v. Wartsila N. Am., Inc., 485 F.3d 450, 459
22 (9th Cir. 2007) (“It is well established that, as a general rule, where a parent and a subsidiary are
23 separate and distinct corporate entities, the presence of one . . . in a forum state may not be
24 attributed to the other[.]”). This is especially so given that KGSI failed to directly allege
25 Marriott’s alleged ownership or management of the property.
26 Over the two-year history of this case, KGSI has amended its counterclaims twice in order
27 to include additional parties, facts, and infringing artwork. Further, KGSI does not dispute any of
1 SACC only points to Marriott’s property in Minnesota as displaying the alleged infringing art, and
2 specifically identifies another corporation as the responsible party for the Bayview Marriott in
3 Newport Beach, California, KGSI cannot in good faith amend the SACC to allege that Marriott
4 was responsible for alleged infringement at the Bayview Hotel. See Chappel v. Laboratory Corp.
5 of America, 232 F.3d 719, 725–26 (9th Cir. 2000) (“A district court acts within its discretion to
6 deny leave to amend when amendment would be futile, when it would cause undue prejudice to
7 the defendant, or when it is sought in bad faith.”); see also Sprewell v. Golden State Warriors, 266
8 F.3d 979, 988–89 (9th Cir. 2001) (affirming district court’s dismissal of claims contradicted by
9 documents attached to plaintiff’s complaint). And because KBFAA’s California contacts cannot
10 provide the basis for personal jurisdiction over Marriott, the Court GRANTS Marriott’s motion to
11 dismiss WITHOUT LEAVE TO AMEND.
12 IV. DESIGN FORCE’S MOTION TO DISMISS
13 KGSI similarly asserts that specific jurisdiction exists over Design Force because Design
14 Force purposefully availed itself of the privilege of conducting activities in California by working
15 with KBFAA. DOpp. at 2–5.3 Additionally, by commissioning KBFAA to create and sell artwork
16 that was then installed and displayed in Minnesota, KGSI argues that Design Force directed its
17 activities at California. Id. As noted above, a purposeful direction analysis is appropriate for a
18 copyright infringement action. See Axiom, 874 F.3d at 1069.
19 KGSI fails to point to sufficient Design Force contacts in California. KGSI’s allegations
20 against Design Force are limited to actions taken in Minnesota, where Design Force was hired to
21 provide interior design services for a Marriott hotel. See SACC at ¶¶ 45, 46, 70. Again, KGSI
22 attempts to make up for Design Force’s lack of direct California contacts by shifting the focus
23 entirely to KBFAA’s contacts with the state. However, as explained above, this approach has
24 been patently rejected by the Supreme Court. See Walden, 571 U.S. at 289.
25 Additionally, KGSI’s attempt to distinguish Walden is unpersuasive. KGSI argues that the
26 case concluded that “something about the tortious conduct must connect to the forum beyond just
27
1 the incidental effect on a plaintiff who resides there,” and that here, commissioning KBFAA
2 || provides that connection with California. KGSI misunderstands the case. The Supreme Court
3 specifically explained that the purposeful direction analysis must focus on “the defendant’s
4 || contacts with the forum State itself, not the defendant’s contacts with persons who reside there.”
5 Walden, 571 U.S. at 285. KGSI’s argument directly conflicts with that clear direction.
6 As with Marriott, KGSI does not dispute any of the jurisdictional facts proffered by Design
7 || Force or request any jurisdictional discovery. Additionally, KGSI’s allegations make clear that
8 || Design Force’s only connection to this case is through its work on the JW Marriott in Minnesota.
9 || Because the “pleading could not possibly be cured by the allegation of other facts,” given that
10 Design Force’s work on that hotel is insufficient to show California contacts, the Court GRANTS
11 Design Force’s motion to dismiss WITHOUT LEAVE TO AMEND. See Lopez v. Smith, 203
F.3d 1122, 1127 (9th Cir. 2000).
13 || Vv. CONCLUSION
14 For the reasons noted above, the Court GRANTS Marriott’s and Design Force’s motions
3 15 || to dismiss for lack of personal jurisdiction WITHOUT LEAVE TO AMEND. This dismissal is
a 16 || without prejudice to KGSI’s ability to pursue its claims in any other district where personal
3 17 || jurisdiction lies. The Court DIRECTS the clerk to terminate both parties from this action.
18
19 IT IS SO ORDERED.
20 || Dated: 9/14/2020
21 Alaura Sbl_|)
HAYWOOD S. GILLIAM, JR.
22 United States District Judge
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