Nifty Quarter, Inc. v. Freshly Folded Laundry LLC

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8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

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11 NIFTY QUARTER, INC. dba FRESHLY Case No.: 3:22-cv-01080-RBM-BLM

FOLDED,

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ORDER GRANTING MOTION TO

Plaintiff,

13 DISMISS FOR LACK OF

v. PERSONAL JURISDICTION

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FRESH FOLDED LAUNDRY LLC, et

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al.,

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Defendants. [Doc. 8]

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19 Defendants Fresh Folded Laundry, LLC (“FFL”) and Bradley McGuire (collectively

20 “Defendants”) have filed a Motion to Dismiss for Lack of Personal Jurisdiction or in the

21 Alternative, for Improper Venue. (Doc. 8.) Defendants argue this case should be dismissed

22 for lack of personal jurisdiction because Defendants have no connection to California and

23 have not directed any acts at California. (Doc. 8-1 at 2.1) California-based Plaintiff Nifty

24 Quarter, Inc. (“Plaintiff”) has filed an Opposition arguing Defendants’ use of its

25 trademarks, after settlement discussions and notice of consumer confusion, subject

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1 Defendants to jurisdiction in California. Defendants have filed a Reply. (Doc. 11.) For

2 the reasons set forth below the Court GRANTS the Motion to Dismiss based on lack of

3 personal jurisdiction.

4 I. BACKGROUND

5 A. First Amended Complaint and Plaintiff’s Exhibits

6 The First Amended Complaint (“FAC”) asserts claims for trademark infringement,

7 false designation of origin, cybersquatting, unfair competition, trademark dilution, and

8 declaratory judgment. (Doc. 4.3) All of Plaintiff’s claims are based on Defendants’ use of

9 Plaintiff’s trademarks for “Freshly Folded” (“Marks”) or confusingly similar names. (FAC

10 ⁋⁋ 48, 53, 59, 66, 72, 76.) Plaintiff and Defendants are engaged in substantially similar

11 services, i.e. laundry services. (FAC ⁋⁋ 17–18, 21, 26.)

12 Plaintiff alleges it has a federally registered trademark for “Freshly Folded” that it

13 has used in southern California since October 2017 in advertising and marketing, including

14 for promotion of its business through its website, on social media, and through other

15 channels. (FAC ⁋⁋ 10–13.) The FAC asserts the Marks are distinctive, that Plaintiff has

16 invested substantial time and resources marketing its services under the Marks, and its

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20 2 Plaintiff filed its Opposition twice. (Docs. 9–10.) The first filing was on November 1,

2023 (Doc. 9) and the second filing was on November 3, 2023 (Doc. 10). There is no

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explanation why it was filed twice, however, it appears the only differences are the way

22 the exhibits are separately docketed in first filing, the inclusion of a mailing label with the

second filing, and that the attachments to the first filing are in color. The Court has

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reviewed both filings but cites the second filing (Doc. 10) throughout this Order.

24 3 Plaintiff filed five exhibits in support of its Opposition: (1) Emails from McGuire and

Defendants’ counsel (Doc. 10 at 27–29 (Exhibit A)); (2) Emails from McGuire regarding

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a settlement proposal (Doc. 10 at 30–32 (Exhibit B)); (3) McGuire email regarding “Fresh

26 Folded Laundry” and cease-and-desist email from Plaintiff’s counsel (Doc. 10 at 33–36

(Exhibit C)); (4) Nonfinal Office Action (Doc. 10 at 37–61 (Exhibit E)); and (5) Cease-

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and-desist letter sent by Plaintiff’s counsel to Defendants (Doc. 10 at 62–68). The Court

28 has considered these exhibits and summarizes them here in conjunction with the relevant

1 investment in its services have resulted in its Marks signifying high quality laundry

2 services. (Id. ⁋⁋ 14–16, 19–20.)

3 Plaintiff alleges Defendants have used Plaintiff’s Marks in Defendants’ business

4 name and in advertising and marketing materials, initially using “Freshly Folded Laundry”

5 and then switching to “Fresh Folded Laundry” after being contacted by Plaintiff regarding

6 infringement. (FAC ⁋⁋ 24–30, 37.) The FAC also alleges that Defendants’ use has

7 included the domain names “www.freshlyfoldedlaundry.com” and

8 “www.freshfoldedlaundry.com.” (Id. ⁋⁋ 22–23.)

9 Plaintiff alleges Defendants’ names are confusingly similar to Plaintiff’s Marks and

10 are likely to continue causing consumers to think Defendants’ laundry services are

11 associated with Plaintiff. (Id. ⁋⁋ 28–29, 44.) The FAC alleges this confusion is evident

12 from individuals in West Virgina and surrounding areas contacting Plaintiff via emails and

13 calls regarding Defendants’ services and attempting to use Defendants’ coupons and

14 promotions with Plaintiff. (Id. ⁋⁋ 41–42.) Plaintiff asserts the confusion, particularly via

15 digital mediums, has resulted in a decrease in customer registrations through Plaintiff’s

16 website. (Id. ⁋ 42.)

17 The FAC also alleges the parties engaged in communications regarding Defendants’

18 use of Plaintiff’s Marks, including Plaintiff alerting Defendants to the alleged infringement

19 and cease-and-desist communications. (Id. ⁋⁋ 30–40.) More specifically, Plaintiff alleges

20 counsel for Plaintiff contacted Defendant McGuire August 24, 2021 regarding

21 unauthorized use of Plaintiff’s Marks, and that on September 10, 2021 Defendants’ initial

22 counsel acknowledged during a phone call that the use of the Marks was not authorized

23 and constituted infringement. (Id. ⁋⁋ 30–31; Ex. A [Doc. 10 at 28]4.) The FAC goes on to

24 allege that McGuire then fired his counsel and began communicating with Plaintiff himself

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4 The listing of Plaintiff’s exhibits incorrectly identifies the first email as being dated

28 August 24, 2022 (Doc. 10 at 26), however, consistent with the allegations of the FAC, the

1 and proposed to resolve the issues through a settlement in which Defendants would stop

2 using “Freshly Folded Laundry.” (FAC ⁋⁋ 32, 34.) During these communications,

3 McGuire acknowledged there could be some confusion and proposed to stop using

4 “Freshly Folded Laundry” in digital spaces and proposed that Defendants would acquire a

5 new business and domain name. (Id. ⁋⁋ 33–34; Ex. B [Doc. 10 at 31].)

6 During further communications between Plaintiff’s counsel, McGuire, and

7 Defendants’ new counsel, Defendants indicated they were switching the name to “Fresh

8 Folded Laundry” and that McGuire had filed a trademark application for the new name.

9 (FAC ⁋⁋ 35–39; Ex. C [Doc. 10 at 34–36].) On June 1, 2022, Plaintiff’s counsel sent a

10 cease-and-desist letter to Defendants objecting to Defendants’ infringement, and providing

11 Defendants with evidence of instances of customer confusion. (FAC ⁋ 40; Ex. E [Doc. 10

12 at 62–68].) Defendants had not responded to the letter as of the filing of the FAC. (FAC

13 ⁋ 43.)

14 Defendants’ trademark application for “Fresh Folded Laundry” (FAC ⁋ 24) was

15 refused by the United States Patent and Trademark Office (“USPTO”) in a Nonfinal Office

16 Action letter (Ex. D [Doc. 10 at 37–61].) The refusal is based in part on the likelihood of

17 confusion with Plaintiff’s “Freshly Folded” trademark. (Id. at 39 (“Registration of the

18 applied-for mark is refused because of the likelihood of confusion with the mark in U.S.

19 Registration No. … 6134986 (FRESHLY FOLDED).”).)

20 The FAC’s jurisdictional section asserts this Court has personal jurisdiction

21 “because Defendants willfully and intentionally infringed on Plaintiff’s trademarks,

22 expressly targeting Plaintiff’s business in El Cajon, California, for Defendants’ benefit.”

23 (FAC ⁋ 8.) Plaintiff alleges Defendants are aware their infringement is causing customer

24 confusion and harm to Plaintiff in the Southern District of California based in part on

25 Plaintiff notifying Defendant of instances of customer confusion. (Id.) Plaintiff offers and

26 sells its laundry services in San Diego County. (Id. ⁋ 17.) The FAC alleges Defendants

27 have advertised and promoted their laundry services in West Virgina, Pennsylvania,

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1 Maryland, and Washington D.C. through channels similar to Plaintiff, including digital

2 marketing and social media platforms. (Id. ⁋⁋ 25–27.)

3 B. Declaration of Bradley McGuire

4 Bradley McGuire is a named defendant along with FFL. (FAC ⁋ 5.) His declaration,

5 submitted in support of Defendants’ Motion to Dismiss, indicates he is the Managing

6 Member of Defendant FFL. (Decl. of Bradley McGuire (“McGuire Decl.”) ⁋ 1.)

7 McGuire is a resident of West Virginia, has been for the past 14 years, and has never

8 lived in California. (Id. ⁋⁋ 5–6; FAC ⁋ 5.) He has never owned or run a business in

9 California and does not regularly visit California for business. (McGuire Decl. ⁋⁋ 6–7.)

10 Consistent with the allegations of the FAC, FFL is a West Virginia limited liability

11 company with its principal place of business in Charles Town West Virginia. (McGuire

12 Decl. ⁋⁋ 8–9; FAC ⁋ 4.) FFL is not registered to do business in California and provides its

13 laundry services exclusively out of West Virginia. (McGuire Decl. ⁋ 10.)

14 Mr. McGuire indicates that neither he nor FFL engage in any of the following in

15 California: banking; own property, land, or a business; maintain offices or warehouse

16 facilities; conduct any company meetings or other business physically in California. (Id.

17 ⁋⁋ 13–17.) He also indicates that neither Defendant has any employees, managers, or sales

18 representatives in California or provide laundry services in California to any California

19 customers. (Id. ⁋⁋ 16, 19.) They also do not market FFL’s services in California or take

20 any actions targeting a California market. (Id. ⁋⁋ 18–19.)

21 FFL was originally Laundry Solutions LLC, amended its name to Freshly Folded

22 Laundry LLC on April 1, 2021, and then changed it to Fresh Folded Laundry LLC on

23 January 24, 2022. (Id. ⁋ 8.) FFL promotes its services on the website

24 https://freshfoldedlaundry.com. (Id. ⁋ 8, Ex. 2 [Doc. 8-2 at 7–13] (Screen shots of

25 freshfoldedlaundry.com).) The website targets customers in the Eastern Panhandle of West

26 Virginia. (Id. ⁋⁋ 11–12, Ex. 2 [Doc. 8-2 at 8] (“[L]aundry facility servicing the Eastern

27 Panhandle of West Virginia”.)

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1 II. PERSONAL JURISDICTION

2 Defendants move to dismiss this case under Federal Rule of Civil Procedure 12(b)(2)

3 for lack of personal jurisdiction. (Doc. 8-1 at 1–17; Doc. 11 at 3–10.) However, “[t]he

4 plaintiff bears the burden of demonstrating that personal jurisdiction is proper.” Glob.

5 Commodities Trading Grp., Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101, 1106

6 (9th Cir. 2020) (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th

7 Cir. 2004)); Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002)

8 (“Although the defendant is the moving party on a motion to dismiss, the plaintiff bears

9 the burden of establishing that jurisdiction exists.”). When, as here, “the motion [to

10 dismiss] is based on written materials rather than an evidentiary hearing, ‘the plaintiff need

11 only make a prima facie showing of jurisdictional facts.’” Glob. Commodities Trading

12 Grp., Inc., 972 F.3d at 1106 (quoting Schwarzenegger, 374 F.3d at 800).

13 When evaluating personal jurisdiction, courts “take as true all uncontroverted

14 allegations in the complaint and resolve all genuine disputes in plaintiff’s favor.” LNS

15 Enters. LLC v. Continental Motors, Inc., 22 F.4th 852, 858 (9th Cir. 2022) (quoting Glob.

16 Commodities Trading Grp., Inc., 972 F.3d at 1106). Courts “cannot ‘assume the truth of

17 allegations in a pleading [if] contradicted by an affidavit,’” but “[i]f both sides submit

18 affidavits, then ‘conflicts between the parties’ statements contained in the affidavits must

19 be resolved in the plaintiff’s favor.’” Id.

20 “Federal courts ordinarily follow state law in determining the bounds of their

21 jurisdiction over persons.” Daimler AG v. Bauman, 571 U.S. 117, 125 (2014). “Because

22 ‘California’s long-arm statute allows the exercise of personal jurisdiction to the full extent

23 permissible under the U.S. Constitution,’ our inquiry centers on whether exercising

24 jurisdiction comports with due process.” Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir.

25 2015) (quoting Daimler AG, 571 U.S. at 125). “Federal due process permits a court to

26 exercise personal jurisdiction over a nonresident defendant if that defendant has ‘at least

27 minimum contacts with the relevant forum such that the exercise of jurisdiction does not

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1 offend traditional notions of fair play and substantial justice.’” Glob. Commodities Trading

2 Grp., Inc., 972 F.3d at 1106 (quoting Schwarzenegger, 374 F.3d at 801).

3 There are two types of personal jurisdiction, general and specific, however, the Court

4 considers only specific jurisdiction here because Plaintiff does not assert the Court has

5 general jurisdiction.5 (Doc. 10 at 10–11.)

6 A. Specific Jurisdiction

7 “There are three requirements for a court to exercise specific jurisdiction over a

8 nonresident defendant: (1) the defendant must either ‘purposefully direct his activities’

9 toward the forum or ‘purposefully avail himself of the privileges of conducting activities

10 in the forum’; (2) ‘the claim must be one which arises out of or relates to the defendant’s

11 forum-related activities’; and (3) ‘the exercise of jurisdiction must comport with fair play

12 and substantial justice, i.e. it must be reasonable.’” Axiom Foods, Inc. v. Acerchem Int’l,

13 Inc., 874 F.3d 1064, 1068 (9th Cir. 2017) (quoting Dole Food Co., Inc. v. Watts, 303 F.3d

14 1104, 1111 (9th Cir. 2002)).

15 “The plaintiff bears the burden of satisfying the first two prongs of the test.”

16 Schwarzenegger, 374 F.3d at 802 (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir.

17 1990)). “If the plaintiff fails to satisfy either of these prongs, personal jurisdiction is not

18 established in the forum state.” Id. If the plaintiff meets its burden on the first two prongs,

19 the burden “shifts to the defendant to ‘present a compelling case’ that the exercise of

20 jurisdiction would not be reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz, 471

21 U.S. 462, 476–78 (1985)).

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5 There are “two types of personal jurisdiction: ‘general’ (sometimes called ‘all purpose’)

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jurisdiction and ‘specific’ (sometimes called ‘case-linked’) jurisdiction.” Bristol-Myers

26 Squibb Co. v. Superior Court of Cal., 582 U.S. 255, 262 (2017) (quoting Goodyear Dunlop

Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). “A court has general

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jurisdiction over a defendant only when the defendant’s contacts with the forum state are

28 so ‘continuous and systematic as to render them essentially at home in the forum State.’”

1 Here, Plaintiff has not met its burden on the first prong of the specific jurisdiction

2 test.

3 1. Purposeful Direction

4 The Court agrees with the parties, (Doc. 8-1 at 8; Doc. 9 at 11), that the purposeful

5 direction test, rather than the purposeful availment test, applies here because the basis for

6 Plaintiff’s claims is trademark infringement. See Herbal Brands Inc. v. Photoplaza, Inc.,

7 72 F.4th 1085, 1091 (Applying purposeful direction test to trademark infringement

8 claims).6

9 The purposeful direction test, “often referred to as the ‘effects’ test, derives from

10 Calder v. Jones, 465 U.S. 783 (1984).” Axiom Foods, Inc., 874 F.3d at 1069 (citation

11 omitted). The “effects” test “focuses on the forum in which the defendant’s actions were

12 felt, whether or not the actions themselves occurred within the forum.” Mavrix Photo, Inc.

13 v. Brand Techs., Inc., 647 F.3d 1218, 1228 (9th Cir. 2011) (citing Yahoo! Inc. v. La Ligue

14 Contre Le Racisme, 433 F.3d 1199, 1206 (9th Cir. 2006)). “This analysis is driven by the

15 defendant’s contacts with the forum state—not the plaintiff’s or other parties’ forum

16 connections.” Davis v. Cranfield Aerospace, Ltd., 71 F.4th 1154, 1163 (9th Cir. 2023)

17 (citing Walden v. Fiore, 571 U.S. 277, 289 (2014) and Bristol-Myers Squibb Co., 582 U.S.

18 at 265) (emphasis added).

19 “Under the effects test, … a defendant purposefully directs its activities toward the

20 forum when the defendant has ‘(1) committed an intentional act, (2) expressly aimed at the

21 forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum

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24 6 The analysis of the first “prong of the specific jurisdiction test turns on the nature of the

underlying claims.” Ayla, LLC v. Alya Skin Pty. Ltd., 11 F.4th 972, 979 (9th Cir. 2021);

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see also Picot, 780 F.3d at 1212 (“The exact form of [the] jurisdictional inquiry depends

26 on the nature of the claim at issue.”). Courts “generally use the purposeful availment

analysis in suits sounding in contract and for unintentional tort claims” and the purposeful

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direction test applies to “intentional tortious or ‘tort-like’” claims. Herbal Brands Inc., 72

28 F.4th at 1090 (citations omitted); see also Ayla, 11 F.4th at 979 (“Trademark infringement

1 state.’” Ayla, LLC, 11 F.4th at 980 (quoting Axiom Foods, Inc., 874 F.3d at 1069). The

2 first requirement of the purposeful direction test, the intentional act requirement, is met.

3 However, the second requirement, express aiming, is not met.

4 a) Intentional Act

5 “‘Intentional act’ has a specialized meaning in the context of the Calder effects test.”

6 Schwarzenegger, 374 F.3d at 806 (citing Dole Food Co., 303 F.3d at 1111). “[I]ntent in

7 the context of the ‘intentional act’ test [is] an intent to perform an actual, physical act in

8 the real world, rather than an intent to accomplish a result or consequence of that act.” Id.;

9 see also Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1142 (9th Cir. 2017) (“An intentional

10 act is one denoting an external manifestation of the actor’s will ... not including any of its

11 results, even the most direct, immediate, and intended.”). One court has described “[t]he

12 threshold of what constitutes an intentional act” as “relatively low.” AirWair Int’l Ltd. v.

13 Schultz, 73 F. Supp. 3d 1225, 1233 (N.D. Cal. 2014) (Summarizing acts meeting the

14 requirement: sales transactions outside the forum state, advertising a product outside the

15 forum state, and selling allegedly infringing products outside the forum state) (citing CE

16 Distribution, LLC v. New Sensor Corp., 380 F.3d 1107, 1111 (9th Cir. 2004),

17 Schwarzenegger, 374 F.3d at 806, and Washington Shoe Co. v. A-Z Sporting Goods Inc.,

18 704 F.3d 668, 674 (9th Cir. 2012)); see also CYBERsitter, LLC v. People’s Republic of

19 China, 805 F. Supp. 2d 958, 969 (C.D. Cal. 2011) (collecting cases) (Summarizing conduct

20 found to meet intentional act element including misappropriation and distribution of

21 software code, placing an advertisement in a newspaper, reproducing copyrighted material,

22 and operating a passive website).

23 Plaintiff relies on Defendants’ use of Plaintiff’s Marks or terms substantially similar

24 to Plaintiff’s Marks, particularly after Plaintiff objected to their use, including cease-and-

25 desist letters, and provided evidence of customer confusion to Defendants. (Doc. 10 at 12–

26 13.) Plaintiff also identifies Defendants’ application for a trademark with the similar name

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1 “Fresh Folded Laundry” and Defendants’ continued us of it after telling the Plaintiff they

2 would change the name to alleviate issues. (Id. at 12–14.)7

3 Plaintiff has alleged Defendants used the name Freshly Folded or substantially

4 similar names in Defendants’ business name and in Defendants’ domain name after being

5 notified of Plaintiff’s Marks. Like placing an advertisement, reproducing copyrighted

6 material, or operating a website, these are “actual physical act[s] in the real world”

7 committed by Defendants that meet the intentional act requirement. See Schwarzenegger,

8 374 F.3d at 806 (citations omitted); CYBERsitter, 805 F. Supp. 2d at 969.

9 b) Expressly Aimed

10 “The second prong of [the] test, ‘express aiming,’ asks whether the defendant’s

11 allegedly tortious action was ‘expressly aimed at the forum.’” Picot, 780 F.3d at 1214

12 (citation omitted). “In applying this test, [courts] must ‘look to the defendant’s contacts

13 with the forum State itself, not the defendant’s contacts with persons who reside there.’”

14 Id. (quoting Walden, 571 U.S. at 285). “Express aiming requires more than the defendant’s

15 awareness that the plaintiff it is alleged to have harmed resides in or has strong ties to the

16 forum, because ‘the plaintiff cannot be the only link between the defendant and the

17 forum.’” Ayla, LLC, 11 F.4th at 980 (quoting Walden, 571 U.S. at 285).

18 Plaintiff relies on three district court decisions in attempting to establish express

19 aiming. (Doc. 10 at 13–14 (citing Lindoro, LLC v. Isagenix Int’l, LLC, 198 F. Supp. 3d

20 1127, 1139–40 (S.D. Cal. 2016), Fighter’s Market, Inc. v. Champion Courage LLC, 207

21 F. Supp. 3d 1145, 1152 (S.D. Cal. 2016), and Adobe Systems Inc. v. Blue Source Group,

22 Inc., 125 F. Supp. 3d 945, 961 (N.D. Cal. 2015)).) Plaintiff relies on these cases for the

23 proposition that personal jurisdiction is proper in a plaintiff’s home forum when a

24 defendant intentionally infringes on a plaintiff’s intellectual property rights knowing the

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7 Defendants argue the “FAC does not allege that FFL or McGuire committed any

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intentional actions in California or directed any intentional actions into California.” (Doc.

28 8-1 at 9.) However, this argument goes to the second element—express aiming—and is

1 plaintiff is located in the forum state. Id. However, as explained in Axiom Foods, Inc., this

2 “individualized targeting” standard that relies on “a defendant ‘engaged in wrongful

3 conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum

4 state’” is no longer sufficient to establish express aiming. Axiom Foods, Inc., 874 F.3d at

5 1069–70 (“In light of the Court’s instruction in Walden, mere satisfaction of the test

6 outlined in Washington Shoe, without more, is insufficient to comply with due process.”).

7 As explained below, Plaintiff’s arguments rely on the individualized targeting test that is

8 no longer sufficient to establish personal jurisdiction.8

9 Plaintiff relies on Lindora to argue “[t]he express aiming requirement is satisfied,

10 and specific jurisdiction exists, when the defendant is alleged to have engaged in wrongful

11 conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum

12 state”, and that Defendants’ knowledge of confusion through a cease-and-desist letter “is

13 sufficient to turn what might otherwise be ‘general economic activity’ into the

14 ‘individualized targeting’ of Plaintiff.” (Doc. 10 at 13 (citing Lindora, LLC, 198 F. Supp.

15 3d at 1139–40).) Cease-and-desist letters and other communications like those alleged here

16 can be significant under the individualized targeting test because they inform the defendant

17 where the plaintiff resides and that the plaintiff alleges defendant’s conduct is impacting

18 the plaintiff. See Lindora, 198 F. Supp. 3d at 1140 (Finding that once the defendant

19 received the letter it knew the plaintiff owned the marks at issue and was in California and

20 “[t]his knowledge [was] sufficient to turn what might otherwise have been general

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8 To the extent these cases find express aiming on additional bases, they are distinguishable

24 from this case because there are no allegations here that Defendants have engaged in any

similar conduct directed at California. See Lindora, LLC, 198 F. Supp. 3d at 1139–40

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(Identifying the following as strong evidence of targeting a California market: trainings,

26 workshops, and annual conferences held in California; network of sales associates residing

in California; and selling more products in California than any other state); Adobe Sys. Inc.,

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125 F. Supp. 3d at 961 (Decision recognizes defendants sold infringing products in the

28 forum state, but still relies on Washington Shoe test to find express aiming) (citations

1 economic activity into ‘individualized targeting.’”). However, Lindora pre-dates Axiom

2 and the portion of Lindora that found a cease-and-desist letter provided an additional basis

3 for express aiming was applying the “individualized targeting” standard Axiom found

4 insufficient. Lindora, 198 F. Supp. 3d at 1140. As noted above (see supra n.8), there were

5 also additional reasons in Lindora for finding express aiming. Lindora, LLC, 198 F. Supp.

6 3d at 1139–40. As discussed below, there are no additional reasons to support express

7 aiming here. Defendants have no connection to California except allegations of “conduct

8 affect[ing] [a] plaintiff[] with connections to the forum State [which] does not suffice to

9 authorize jurisdiction.” Walden, 571 U.S. at 291.

10 Plaintiff cites Fighter’s Market to argue that “[w]hen a tort is intentional, the court

11 has found jurisdiction in the plaintiff’s home forum because the acts are performed for the

12 purpose of having their consequences felt in the forum state.” (Doc. 10 at 13 (citing

13 Fighter’s Market, 207 F. Supp. 3d at 1152–53).) However, the same court that issued the

14 Fighter’s Market decision later rejected application of it. Medimpact Healthcare Sys., Inc.

15 v. IQVIA Holdings, Inc., Case No. 19cv1865-GPC (LL), 2020 WL 1433327, at *10 (S.D.

16 Cal. Mar. 24, 2020) (citing Fighter’s Market, Inc., 207 F. Supp. 3d at 1154). “[I]n Fighter’s

17 Market, the court relied heavily on the now ‘outdated’ ‘individualized targeting’ theory of

18 Washington Shoe and held that the Plaintiff satisfied the ‘expressly aimed’ requirement

19 based on a prima facie showing that ‘Defendant intentionally infringed Plaintiff’s

20 trademarks, knowing that the Plaintiff is a resident of California and the impact of

21 infringement would be felt in California.’” Id. (citing Fighter’s Market, Inc., 207 F. Supp.

22 3d at 1154); see also Caracal Enters. LLC v. Suranyi, Case No. 16-cv-05073-RS, 2017

23 WL 446313, at *3 n.3 (N.D. Cal. Feb. 2, 2017) (Explaining that Washington Shoe and

24 Fighter’s Market “have been cast into doubt by Walden … and Picot … which post-date

25 Washington Shoe and require more than simply the plaintiff’s residence in the forum

26 state.”).

27 Similarly, citing Adobe Systems, Plaintiff asserts “courts have held that specific

28 jurisdiction exists where a plaintiff files suit in its home state against an out-of-state

1 defendant and alleges that defendant intentionally infringed on its intellectual property

2 rights knowing the plaintiff was located in the forum state.” (Doc. at 13 (citing Adobe Sys.

3 Inc., 125 F. Supp. 3d at 961).) Like the cases previously discussed, Adobe Systems also

4 relies on the individualized targeting standard from Washington Shoe that Axiom found

5 insufficient after Walden. See Adobe Sys. Inc., 125 F. Supp. 3d at 961 (“[T]he Ninth Circuit

6 has held that specific jurisdiction exists where a plaintiff files suit in its home state against

7 an out-of-state defendant and alleges that defendant intentionally infringed its intellectual

8 property rights knowing the plaintiff was located in the forum.”) (citing Washington Shoe,

9 704 F.3d at 675–76) (additional citations omitted); see also Tangle, Inc. v. Buffalo Games,

10 LLC, Case No. 22-cv-7024-JSC, 2023 WL 2774452, at *4 (N.D. Cal. Apr. 3, 2023) (“The

11 cases Plaintiff cites to [in] support [of] its individualized targeting theory all rely on

12 precedent since overruled by Walden.”) (citing Adobe Sys., Inc., 125 F. Supp. at 960–61

13 and Amini Innovation Corp. v. JS Imps., Inc., 497 F. Supp. 2d 1093, 1105 (C.D. Cal. 2007)).

14 Plaintiff cannot rely only on its residence in California and allegations Defendants

15 infringed its Marks knowing Plaintiff was a California resident. Defendants’ contacts with

16 California, not Plaintiff’s residence there, must determine specific jurisdiction. “After

17 Walden and Axiom Foods, this court cannot conclude [Defendant] expressly aimed its

18 conduct at California just because it knew plaintiffs resided there when it infringed their

19 trademark.” Pinnacle Emp. Servs. Inc. v. Pinnacle Holding Co., No. 2:22-cv-01367-KJM-

20 CKD, 2023 WL 2999970, at *3–4 (E.D. Cal. Apr. 17, 2023)) (collecting cases).

21 This is not to say that allegations of individualized targeting cannot be considered.

22 Axiom, 874 F.3d at 1070. It “may remain relevant”, but “mere satisfaction of the test

23 outlined in Washington Shoe, without more, is insufficient.” Id. Here, Defendants’

24 conduct does not connect them to California as required by Walden. Plaintiff and

25 Defendants each operate laundry services locally in their respective states. (FAC ⁋⁋ 4, 17.)

26 While Defendants’ services might conceivably reach beyond West Virginia given its close

27 proximity to neighboring states, not even Plaintiff alleges FFL is providing any services to

28 anyone in California, marketing to California, selling any products in California, visiting

1 California, or otherwise engaging in any contacts with California. (Id. ⁋⁋ 25–27

2 (Defendants advertise and promote their laundry services in West Virginia, Pennsylvania,

3 Maryland, and Washington D.C.).) The only connections between Defendants and

4 California are based entirely on Plaintiff’s residence here, including Defendants’

5 communications to Plaintiff in California. These minimal communications related to

6 Plaintiff’s allegations of infringement only connect Defendants to Plaintiff. They have

7 nothing to do with California. This is not sufficient. “[T]he defendant’s ‘own contacts’

8 with the forum, not the defendant’s knowledge of a plaintiff’s connection to a forum” must

9 drive the analysis. Axiom Foods, Inc., 874 F.3d at 1070 (quoting Walden, 571 U.S. at 290)

10 (emphasis added).

11 Similarly, Plaintiff’s allegations of injury it has suffered in California are also not

12 sufficient for express aiming. Assuming the truth of Plaintiff’s allegations, it is suffering

13 some level of harm from Defendants’ use of its Marks based on decreased website

14 registrations and confused customers. (FAC ⁋⁋ 41–42.) However, Defendants’ “actions

15 in [West Virginia] d[o] not create sufficient contacts with [California] simply because

16 [Defendants] allegedly directed [their] conduct at [a] plaintiff[] whom [they] knew had

17 [California] connections.” Walden, 571 U.S. at 289. “[A] ‘mere injury to a forum resident

18 is not a sufficient connection to the forum.’” See Picot, 780 F.3d at 1214; see also Morrill,

19 873 F.3d at 1143 (citing Walden, 571 U.S. at 284–85) (“[T]he ‘mere fact that a defendant’s

20 conduct affected [a] plaintiff[] with connections to the forum State does not suffice to

21 authorize jurisdiction.’”). Defendants are not aiming any conduct at California and their

22 only connection to the forum exists only because of Plaintiff’s residence there.

23 Plaintiff has not made a prima facie showing of express aiming by Defendants.

24 Because Plaintiff “has not established the second prong of the purposeful direction test,

25 [express aiming, the Court] need not address the third prong.” Picot, 780 F.3d at 1215 n.4.

26 (citing Schwarzenegger, 374 F.3d at 807 n.1). “Failing to sufficiently plead any one of

27 these elements is fatal to Plaintiff’s attempt to show personal jurisdiction.” Rupert v. Bond,

28

1 68 F. Supp. 3d 1142, 1163 (N.D. Cal. 2014) (Addressing three-part Calder effects test)

2 (citation omitted).

3 As discussed above, the purposeful direction test is the first prong of the Ninth

4 Circuit’s specific jurisdiction test for torts or tort-like claims, and Plaintiff “bears the

5 burden of satisfying the first two prongs of the test.” Herbal Brands Inc., 72 F.4th at 1090;

6 Schwarzenegger, 374 F.3d at 802. Because Plaintiff has not established the first prong of

7 the specific jurisdiction test, the Court need not reach the remaining prongs.

8 Schwarzenegger, 374 F.3d at 802 (“If the plaintiff fails to satisfy either of these prongs,

9 personal jurisdiction is not established in the forum state.”).9 Plaintiff has not established

10 personal jurisdiction in California. Id.

11 B. Jurisdictional Discovery

12 Plaintiff requests that if the Court finds Plaintiff has failed to establish specific

13 jurisdiction, the Court hold the motion to dismiss pending and permit Plaintiff to conduct

14 jurisdictional discovery. (Doc. 10 at 23.) Plaintiff argues “it is possible” that Defendants

15 may have had calls, emails, or other interactions with Plaintiff’s customers that are

16 confused by Defendants’ infringement of their Marks. (Id. at 24.)

17 Jurisdictional discovery should be “granted where pertinent facts bearing on the

18 question of jurisdiction are controverted or where a more satisfactory showing of the facts

19

20

9 Defendants also sought dismissal of this case for improper venue under Rule 12(b)(3)

21

because Defendants are not located in the Southern District of California and events giving

22 rise to Plaintiff’s claims occurred in West Virginia. (Doc. 8-1 at 17–18 (citing 28 U.S.C.

§ 1391(1)–(2)).) Section 1391(1) provides venue is proper in a “judicial district in which

23

any defendant resides” and § 1391(2) provides venue is proper in a “judicial district in

24 which a substantial part of the events or omissions giving rise to the claim occurred.”

Having dismissed the case for lack of personal jurisdiction, the Court need not additionally

25

address dismissal for improper venue. The Court also notes that while Defendants very

26 briefly mention a convenience transfer to the Northern District of West Virginia, it was

only proposed as an alternative if the case was not dismissed and none of the analysis

27

required for a convenience transfer under 28 U.S.C. § 1404(a) was briefed by either party.

28 Plaintiff did not address it at all and Defendants’ simply stated in two total sentences that

1 necessary.” Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008). Jurisdictional

2 || discovery may be denied when the request for it is “based on little more than a hunch that

3 might yield jurisdictionally relevant facts.” Jd. (citing Butcher’s Union Local No. 498,

4 || United Food and Commercial Workers v. SDC Inv, Inc., 788 F.2d 535, 540 (9th Cir. 1986)).

5 First, the facts “bearing on the question of jurisdiction” are not controverted. Jd.

6 || Plaintiff does not dispute the factual information Defendants provided by declaration

7 ||regarding their lack of connection to California. Defendants largely do not dispute the

8 Plaintiff's factual allegations regarding Plaintiff's Marks or the parties’ pre-litigation

9 || activities and discussions.

10 Second, Plaintiffs suggestion that it is possible there are additional confused

11 customers is “based on little more than a hunch’, and it is unlikely that discovery will yield

12 || contacts sufficient to subject a West Virginia laundry services business operating only out

13 West Virginia to jurisdiction in California. /d. Not only is it speculative, but it also

14 ||seems highly unlikely given the minimal confused customers identified by Plaintiff and

15 || that they were in West Virginia. Additionally, this is not a case where Plaintiff is likely to

16 || discover Defendants engaged in significant sales in California, targeted California markets,

17 otherwise engaged in conduct connecting them to California. Defendants’ only

18 ||connection to California is Plaintiff's location here, and the nature of Defendants’

19 || business—local laundry services—makes it highly unlikely Plaintiff would discover the

20 necessary contacts between Defendants and California.

21 Ht. CONCLUSION

22 Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction is GRANTED and

23 || the case is DISMISSED with prejudice to refiling in this Court, but without prejudice to

24 || filing in a district where Defendants are subject to personal jurisdiction.

25 IT IS SO ORDERED.

26 || Dated: August 15, 2023 FR Bo ? L >

a7 HON. RUTH BERMUDEZ MONTENEGRO

28 UNITED STATES DISTRICT JUDGE

16