Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-01974/USCOURTS-caed-2_04-cv-01974-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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* These motions were determined to be suitable for decision

without oral argument. L.R. 78-230(h).

 

1 Since the motion for dismissal for lack of personal

jurisdiction will be granted, decision on the other motions filed on

November 12 and 19, 2004, is unnecessary.

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

NATIONAL BROOM COMPANY OF ) NO. CV S-04-1974 GEB PAN 

CALIFORNIA, INC. DBA JLR GEAR, )

)

Plaintiff, )

) ORDER*

v. ) 

)

SOLAR WIDE INDUSTRIAL, LTD., )

HUGHES SANONER, MICHAEL J. )

DOHERTY, PRINCESS INTERNATIONAL, )

INC., and JOSEPH FRIEDMAN, )

)

Defendants. )

)

Defendants Michael Doherty, Princess International, Inc.

(“Princess”) and Joseph Friedman (“Friedman”) move, inter alia, to be

dismissed as parties in this action, arguing this Court lacks personal

jurisdiction over them.1 JLR Gear opposes the motions.

/////

/////

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2 “Where, as here, a plaintiff raises [more than one claim],

the court must have in personam jurisdiction over the defendant with

respect to each claim. However, if the court determines that there

has been a sufficient showing of personal jurisdiction to reach trial

with regard to one claim . . . it may or may not be appropriate to

assume jurisdiction over the other claim under principals analogous to

the doctrine of pendent jurisdiction.” Data Disc, Inc. v. Systems

Technology Associates, Inc., 557 F.2d 1280, 1289, n.8 (9th Cir.

1977)(citation omitted).

2

BACKGROUND

JLR Gear is a California corporation with its principal

place of business in San Joaquin County, California. (Compl. ¶ 1.) 

Doherty is an attorney admitted to practice in New Jersey and New

York, and before the United States Patent Office. (Doherty Decl. ¶

2.) Princess is a New York corporation with its principal place of

business in New York, and Friedman is Princess’s President and a New

York citizen. (Compl. ¶¶ 5, 17, 18.)

JLR Gear asserts claims against Doherty for intentional

misrepresentation, negligent misrepresentation, conspiracy to

interfere with livelihood, and negligence in the provision of legal

advice, arising out of the allegation that Doherty, Solar Wide, and

Sanoner fraudulently induced JLR Gear’s Vice President, Jacob Rothman,

to assign his patent rights to Solar Wide.2 (Compl. ¶¶ 46-54, 90-

105.) Specifically, JLR Gear alleges that Doherty made “oral

assertions . . . that the [patent assignment] was merely a formality

that would expedite the prosecution and registration of the patent,

and that JLR Gear would continue to have the exclusive right to sell

Smart Mugs for delivery into North America” (Compl. ¶ 49), and that

Doherty failed to “use[] proper skill and care in drafting the Patent

Assignment and advising plaintiff regarding the effect of the Patent

Assignment.” (Compl. ¶ 102).

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3

JLR Gear’s claims against Friedman and Princess for inducing

breach of contract and conspiracy to interfere with livelihood (Compl.

¶¶ 80-83, 90-97) arise out of an alleged agreement between JLR Gear

and Defendant Solar Wide, whereby JLR Gear has the exclusive right to

sell to North American retailers the electronic drinking mug for which

Solar Wide obtained a patent on March 8, 2005. JLR Gear alleges that

Princess and Friedman, “knowing of the contract between [JLR Gear] and

Solar Wide, encouraged and persuaded Solar Wide that it would be to

its advantage to breach its contract with [JLR Gear] and enter into a

contract with [Princess and Friedman].” (Compl. ¶ 82.)

JLR Gear’s claims against Princess for violation of § 43(a)

of the Lanham Act, common law unfair competition, and common law

trademark infringement (Compl. ¶¶ 106-135) arise out of JLR Gear’s

allegation that Princess is selling electronic drinking mugs that

violate JLR Gear’s trademark ownership of the name “Smart Mug” and the

“steaming coffee mug” design. (Compl. ¶¶ 107, 116, 122, 131, 133.) 

DISCUSSION

JLR Gear bears the burden of establishing personal

jurisdiction over each movant. Ziegler v. Indian River County, 64

F.3d 470, 473 (9th Cir. 1995). "Personal jurisdiction . . . is an

essential element of the jurisdiction of a district . . . court,

without which the court is powerless to proceed to an adjudication." 

Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (internal

quotation marks and citation omitted.) “Where a defendant challenges

personal jurisdiction in a motion to dismiss, the plaintiff ‘must make

only a prima facie showing of jurisdictional facts . . .in order to

avoid defendant’s motion to dismiss.’” Lung v. Yachts Intern., LTD.,

980 F. Supp. 1362, 1366 (D. Hawai’i 1997) (citing and quoting Data

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3 Since it is unclear whether JLR Gear is asserting general

and/or specific jurisdiction over JLR Gear, JLR Gear’s arguments will

be considered under both doctrines.

4

Disc, Inc. v. Systems Tech. Assoc., 557 F.2d 1280, 1285 (9th Cir.

1977)). Personal jurisdiction for diversity cases is based upon the

"long arm" statute of the state in which the court sits. Terracom v.

Valley Nat. Bank, 49 F.3d 555, 559 (9th Cir. 1995). California's

long-arm statute provides jurisdiction "on any basis not inconsistent

with the Constitution of this state or of the United States." Cal.

Code Civ. Proc. § 410.10. “Due process requires that nonresident

defendants have certain minimum contacts with the forum state, so that

exercise of personal jurisdiction does not offend traditional notions

of fair play and substantial justice." Doe v. American Nat. Red

Cross, 112 F.3d 1048, 1051 (9th Cir. 1997) (citing Int’l Shoe Co. v.

Washington, 326 U.S. 310, 316 (1945)). “A court’s exercise of

personal jurisdiction over a nonresident defendant may be either

general or specific. ‘If a defendant's activities in the state are

"substantial" or "continuous and systematic," general jurisdiction may

be asserted even if the cause of action is unrelated to those

activities.’” Id. at 1050. The propriety of an assertion of specific

jurisdiction “depend[s] on the quality and nature of the defendant’s

contacts with the forum state in relation to the cause of action.” 

Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987). 

Personal Jurisdiction over Doherty

A. General Jurisdiction3

Doherty argues his contacts with California are fleeting and

sporadic. Specifically, he asserts that he is a New Jersey lawyer who

is an associate with a New Jersey law firm which does not solicit or

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advertise for business in California. Doherty declares he can “recall

working on only two matters involving California companies or

California offices of large corporations. The work was related to

filing patent applications, and in no related to analysis and

application of California law.” (Doherty Decl. at ¶ 9.) JLR Gear

counters that Doherty does practice law in California by representing

California residents on federal patent law. 

JLR Gear next argues that Doherty actively solicited

business in California by sending Jacob Rothman an engagement

correspondence in California. JLR Gear also contends that Doherty and

his law firm solicit clients from California by maintenance of a web

site accessible by residents of California. Further, JLR Gear asserts

through argument and the declaration of its Vice-President, Jacob

Rothman, that Rothman spoke to Doherty on the phone and was confident

that Doherty had been hired to prosecute the patent application for

the Smart Mug in the names of both Mr. Sanoner and Rothman.

JLR Gear appears to contend that Doherty’s representation of

California residents with respect to federal patent law is sufficient

support for JLR Gear’s contention that general jurisdiction may be

exercised over Doherty. However, “‘[t]he mere existence of an

attorney-client relationship, unaccompanied by other sufficient

contacts with the forum, does not confer personal jurisdiction over

the non-resident in the forum state; more is required.’” Pyle v.

Hatley, 239 F. Supp. 2d 970, 980 (C.D. Cal. 2002) (quoting Sawtelle v.

Farrell, 70 F.3d 1381, 1392 (1st Cir. 1995)). Doherty counters,

declaring that since he has become a licensed attorney in New Jersey,

and admitted to practice before the United States Patent Office, he

has worked almost exclusively in New Jersey. (Doherty Decl. at ¶ 3.) 

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He declares he did not solicit or advertise for business in

California. He further declares that he never received a signed

Retainer Agreement from Rothman, nor a retainer fee. (Id. at ¶ 13.) 

Further, Doherty’s Declaration indicates that all of his

correspondence with Rothman and communication with him on the

telephone occurred when Doherty was located in New Jersey. JLR Gear

has not alleged that Doherty’s representation of California residents

involved more than just patents which are prosecuted outside

California, and Doherty’s Declaration indicates that his only

connection to JLR Gear’s claims arises out of Doherty’s patent

practice. See Austad Co. v. Pennie & Edmonds, 823 F.2d 223, 226-27

(8th Cir. 1987) (holding that a law firm whose “only ‘substantial

connection’ with South Dakota was its representation of a South Dakota

corporation in connection with litigation taking place wholly outside

South Dakota” did not “purposefully avail[] itself of the benefits and

protections of the laws of South Dakota.”). JLR Gear argues that

Doherty actively solicited patent business in California when he sent

Rothman correspondence concerning a patent application. However,

sending this correspondence to a California resident does not

constitute "continuous and systematic" or "substantial" contacts with

California. 

JLR Gear also argues that web site evidence supports its

contention that jurisdiction can be exercised over Doherty. JLR Gear

supports this argument with the following excerpt from Doherty’s law

firm’s web site, and alleges the evidence is indicative of the firm’s

marketing to potential patent clients in all states:

We prosecute patents for our clients to

build patent portfolios with business

value. We also study the validity and

scope of patents owned by others, and

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advise our clients about their right to

use new products and methods. [¶] Our

firm’s activities in this area extend

throughout the world. We place emphasis

on comprehensive coordination of

worldwide patent filings in order to

ensure that our clients obtain the

broadest patent protection at the lowest

possible price. Our work in the area of

multicontinent licensing ventures has

been highly rewarding to our national

and international clients alike.

(Response to Mot. to Dismiss at 6-7 (emphasis omitted).)

Doherty counters that the existence of this web site, which

is accessible by residents of California, is not, by itself, a

sufficient basis for exercising personal jurisdiction over him. Since

JLR Gear does not allege that this web site is an “interactive web

site,” its mere existence does not support JLR Gear’s position. See

Cybersell Inc. v. Cybersell, Inc., 130 F.3d 414, 418-19 (9th Cir.

1997) (where the Ninth Circuit held that simply placing a passive web

site in cyberspace alone is insufficient to subject the advertiser to

personal jurisdiction).

JLR Gear argues that Doherty’s representation of Jacob

Rothman is sufficient to confer personal jurisdiction over Doherty in

California. Doherty counters that even assuming arguendo that JLR

Gear could establish that an attorney/client relationship existed

between Doherty and Jacob Rothman, Doherty’s contacts with California

are still insufficient for personal jurisdiction purposes. 

Jacob Rothman was referred to Doherty’s law firm by

Defendant Sanoner, a Hong Kong resident, who was an existing client of

Doherty’s firm. JLR Gear does not dispute Doherty’s declaration that

he and Jacob Rothman had less than five telephone conversations. 

(Response to Doherty Mot. to Dismiss at 4.) Further, Doherty sent

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only eight pieces of correspondence to Jacob Rothman, four of which

were quadruplicate requests for Jacob Rothman to execute a coinventor’s declaration and/or patent assignment. (Doherty Decl.

¶¶ 12, 15; Exhibits A-H to Doherty Decl.) Finally, although JLR Gear

alleges that it paid Solar Wide for fifty percent of Doherty’s fees,

Doherty did not send any bills to Jacob Rothman or JLR Gear and

Doherty did not receive payment from Jacob Rothman or JLR Gear; he

only received payment from Solar Wide. (Doherty Decl. ¶ 18.)

In conclusion, the foregoing discussion revels that JLR Gear

has not made a prima facie showing that general jurisdiction can be

exercised over Doherty. See Austad Co. v. Pennie & Edmonds, 823 F.2d

223, 226 (8th Cir. 1987)

B. Specific Jurisdiction

Doherty also indicates that the allegations in the complaint

are insufficient to justify exercising specific jurisdiction over him. 

The Ninth Circuit applies the following three-part test to determine

whether there is specific jurisdiction:

(1) The nonresident defendant must do

some act or consummate some transaction

with the forum or perform some act by

which he purposefully avails himself of

the privilege of conducting activities

in the forum, thereby invoking the

benefits and protections of its laws[;]

(2) [t]he claim must be one which arises

out of or results from the defendant's

forum-related activities [; and] (3)

[e]xercise of jurisdiction must be

reasonable. 

Doe v. American Nat. Red Cross, 112 F.3d 1048, 1050-51 (9th Cir.

1997)(citation omitted). 

[P]urposeful availment is satisfied even

by a defendant whose only contact with

the forum state is the purposeful

direction of a foreign act having effect

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in the forum state. . . . [T]he effects

test requires that the defendant

allegedly have (1) committed an

intentional act, (2) expressly aimed at

the forum state, (3) causing harm that

the defendant knows is likely to be

suffered in the forum state.

Dole Foods Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002)(internal

quotation marks and citations omitted).

JLR Gear argues that Doherty purposefully availed himself of

the privileges of conducting business in California since his law firm

has a web site accessible by California residents. However, JLR Gear

has not alleged that Doherty’s law firm’s web site had more than a

passive nature. Cybersell, 130 F.3d at 420.

JLR Gear next argues that the purposeful availment prong is

satisfied since Doherty practices federal patent law “so it is not at

all coincidental that the client is located in a different forum from

[Doherty’s] primary office.” (Response to Mot. to Dismiss at 8-9.) 

Doherty asserts that JLR Gear appears to be arguing that since his

practice is based on federal patent law, he is subject to jurisdiction

in all fifty states. Finally, JLR Gear argues that the purposeful

availment prong is satisfied because Doherty represented Jacob Rothman

in the patent application process giving rise to this litigation. 

But JLR Gear does not allege a sufficient nexus between any

intentional act committed by Doherty and the alleged harm JLR Gear

suffered in California. Even if an attorney-client relationship

existed between Doherty and Rothman, JLR Gear has not shown that

Doherty had sufficient contacts with California to make him subject to

suit in California. The contacts on which JLR Gear relies do not

manifest that Doherty purposefully availed himself of the privilege of

conducting business in California. Since JLR Gear failed to satisfy

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the first prong of the three-part test for specific jurisdiction, the

balance of the test need not be analyzed. Hence, JLR Gear has not met

its prima facie burden of showing that specific jurisdiction can be

exercised over Doherty.

Therefore, JLR Gear’s claims against Doherty are dismissed

without prejudice for lack of personal jurisdiction.

Personal Jurisdiction over Princess and/or Friedman

JLR Gear argues that Princess and Friedman purposefully

availed themselves of the privilege of doing business in California by

maintaining a web site directed at customers in every state of the

United States in which Smart Mugs are offered for sale, making sales

within California, and contracting with JLR Gear in California on

several occasions for the purchase of Smart Mugs for resale. (JLR

Gear’s Response to Defs.’ Mem. of P. & A. at 5.) Even assuming,

arguendo, that Princess and/or Friedman have purposefully conducted

business in California, before personal jurisdiction can be exercised

over these Defendants, JLR Gear must make a prima facie showing that

its claims against them arise out of their forum-related activities. 

The “‘but for’ test [is used] for determining whether a plaintiff’s

injury arises out of a defendant’s forum-related activities.” Doe v.

American Nat. Red Cross, 112 F.3d at 1051. JLR Gear has not

sufficiently alleged that its claims against Friedman and Princess

arise out of contacts either of these Defendants had in California, or

that anything occurred in California which gives rise to these claims. 

JLR Gear also alleges against Princess trademark

infringement claims under common law and the Lanham Act, and a variety

of claims under California law arising out of Princess’s sale of what

JLR Gear characterizes as a Smart Mug product. However, it is not

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alleged that Princess sold this product in California. JLR Gear’s

reliance on Princess’s web site to establish such sales is unavailing,

since JLR Gear has not alleged that such sales occurred in California. 

 JLR Gear does appear to allege that Princess’s customers

might be re-selling this product in California. (See JLR Gear’s

Response to Princess and Friedman’s Motion to Dismiss at 4 (“Without

some discovery it will be impossible to determine how many of the

infringing items are re-sold by Princess International’s customers to

consumers in California”)). Friedman declares that “Princess sells

gifts and electronic gadgets . . . . [I]t sells to mail order

companies, retailers, specialty shops, and other companies. . . . 

[O]ver 99% of the companies with whom Princess regularly does business

are located outside of California.” (Friedman Decl. ¶ 4.) See Amba

Marketing Systems, Inc. v. Jobar International, Inc., 551 F.2d 784,

787 (9th Cir. 1977) (denying specific jurisdiction even though

plaintiff alleged infringing products were sold in Arizona or to

Arizona customers by either defendant or the California mail order

houses to which defendant sold since plaintiff did not come forward

with facts to controvert defendant’s evidentiary showing). Thus, the

issue is whether JLR Gear’s allegations are sufficient to establish a

prima facie showing that Princess engaged in some activity

purposefully aimed toward California and that JLR Gear’s claims are

directly from that activity. JLR Gear has not linked Princess’s

contacts with California with its claims against Princess in the

instant litigation. Although JLR Gear seeks to have inferred that

whatever contact Princess has had with California suffices to

establish jurisdiction with respect to its claims against Princess,

factual disputes exist on whether that contact is sufficient to

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sustain JLR Gear’s burden of proof on this question. “Instead of

‘resolving’ the factual disputes, [this] matter may be determined by

reference to the burden of proof which [is] placed upon [JLR Gear].” 

Data Disc, Inc., 557 F.2d at 1285. Since JLR Gear did not show that

its claims against Princess and/or Friedman arise out of their forumrelated activities, if any, the claims against Princess and Friedman

are dismissed without prejudice for lack of personal jurisdiction.

CONCLUSION

In conclusion, the motions of Doherty, Friedman, and

Princess to be dismissed as parties for lack of personal jurisdiction

are granted.

IT IS SO ORDERED.

Dated: May 9, 2005

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

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