IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

EUGENE DIVISION 

NORTH SISTER PUBLISHING, 

INC., an Oregon corporation; 

WORK THE SYSTEM ACADEMY, LLC, 

an Oregon limited liability 

company; and WORK THE SYSTEM 

CONSULTANTS, INC., an Oregon 

corporation, 

Plaintiffs, 

v. 

RICHARD SCHEFREN, an 

individual doing business as 

STRATEGIC PROFITS MANAGEMENT 

COMPANY; and SCHEFREN 

PUBLISHING, LLC, a Florida 

limited liability company 

doing business as STRATEGIC 

PROFITS, 

Defendants. 

COFFIN, Magistrate Judge: 

Case No. 6:14-cv-01395-TC 

FINDINGS AND RECOMMENDATION 

Plaintiffs filed an action for copyright infringement, 17 

U.S.C. § 101, et seq. Plaintiff filed suit shortly after the 

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Case 6:14-cv-01395-TC Document 22 Filed 04/06/15 Page 1 of 16
dismissal of a similar action involving the same parties in the 

United States District Court for the Southern District of Florida. 

The court there found that it lacked personal jurisdiction, and the 

dismissal was appealed to the Eleventh Circuit Court of Appeals. 

On March 23, 2015, the Eleventh Circuit dismissed the appeal for 

failure to prosecute. 

Defendants now move to dismiss the present action for lack of 

personal jurisdiction; and in the alternative, to dismiss or stay 

the action pursuant to the first-to-file rule. 1 Oral arguments on 

the motions were heard December 2 2, 2 014. For the following 

reasons, these motions should be denied. 

BACKGROUND 

Plaintiffs North Sister Publishing, Inc., ("NSP"), Work the 

System Consultants, Inc., and Work the System Academy, LLC 

(hereinafter the "NSP Parties") are incorporated and organized in 

the state of Oregon. In 2008, Sam Carpenter, the president and 

sole shareholder of NSP, wrote a book entitled Work the System: The 

Simple Mechanics of Making More and Working Less (hereinafter the 

"Book") . NSP owns the rights, title, and interest in the Book. 

Work the System Consultants ("Consultants") is a consulting 

business that offers services based on the principles in the Book, 

while Work the System Academy, LLC, ("Academy"), sells educational 

products related to the Book online; both license the Book from 

NSP. 

1 Defendants also move for the court to take judicial notice of 

the Florida case. This motion is granted. 

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Defendants Richard Schefren, an individual doing business as 

Strategic Profits Management Company, and Schefren Publishing, LLC, 

(hereinafter the "Schefren Parties") doing business as Strategic 

Profits, are based in Florida and operate a website that offers 

coaching and other resources directed toward online entrepreneurs 

"who want to grow their business strategically and ultimately get 

'free' of the daily grind." Compl. 5 (citing defendants' website: 

www. strategicprofits. com). For a fee, monthly subscribers have 

access to various materials from defendants' website, including 

"Special Reports." Id. at 4. 

The NSF Parties allege that the Schefren Parties offered and 

continue to offer a "Special Reportn entitled Systemize Your 

Success on the Schefren Parties' website. The NSF Parties claim 

the "Special Report n copied large portions of the Book. After 

initial discovery of the alleged infringement in November 2011, Mr. 

Carpenter contacted Mr. Schefren by phone in March 2012, demanding 

that the Schefren Parties cease and desist from infringing the 

Book. Id. According to Mr. Carpenter, Mr. Schefren said that "he 

could not deny the infringing activities, but that he did not 

maliciously intend the infringement.n Carpenter Aff. 3. 

Between March 2012 and May 2014, the parties attempted to 

reach a settlement of this infringement claim, an effort that 

ultimately failed. On May 19, 2014, Schefren filed suit against 

NSF and Mr. Carpenter in Florida district court, seeking, among 

other things, a declaration of non-infringement of the Carpenter 

copyright. The Academy was subsequently named as a defendant in 

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Schefren' s Amended Complaint. On July 22, 2014, the Florida 

district court dismissed the action against NSP and Carpenter, 

finding that the court did not have personal jurisdiction over 

them. On August 19, 2014, the Florida district court issued an 

omnibus order that: 1) dismissed the Florida action against Academy 

for lack of personal jurisdiction and 2) denied Schefren's motion 

to alter the judgment. Schefren timely appealed the dismissal on 

August 19, 2014; on March 23, 2015, the Eleventh Circuit affirmed 

the dismissal. 

JVIeanwhile, the NSP Parties filed a complaint against the 

Schefren Parties for copyright infringement in the District of 

Oregon on August 29, 2014. Defendants now move to dismiss or stay 

this action pursuant to the first-file rule and, or in the 

alternative, lack of personal jurisdiction. 

DISCUSSION 

A. First-to-File Rule 

Defendants allege that this court should apply the first-tofile rule and dismiss the Oregon action. The first-to-file rule is 

a generally recognized doctrine of federal comity which permits a 

district court to decline jurisdiction over an action "when a 

complaint involving the same parties and issues has already been 

filed in another district." Church of Scientology of Cal. v. U.S. 

Dept. of the Army, 611 F.2d 738, 749 (9th Cir. 1979); Pacesetter 

Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982). 

The first-to-file rule is not a "rigid or inflexible rule to be 

mechanically applied, but rather is to be applied with a view to 

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the dictates of sound judicial administration." 

F.2d at 94-95. 

Pacesetter, 67 8 

Notably, the Eleventh Circuit dismissed the appeal of the 

Florida case for lack of prosecution and no case remains pending. 

Regardless, the principles behind the first-to-file rule - federal 

judicial economy and avoiding the embarrassment of conflicting 

judgments -are not at issue here. See Church of Scientology, 611 

F. 2d at 7 50. There has been no decision on the merits of the 

copyright infringement dispute between the parties, and the appeal 

in the Eleventh Circuit was an appeal only on the issue of 

jurisdiction. For this reason, I recommend denying the motion to 

dismiss or stay this action pursuant to the first-to-file rule. 

B. Jurisdiction 

Defendants also move for dismissal of the current action for 

lack of personal jurisdiction. Defendants argue that they are 

not subject to personal jurisdiction in Oregon because they have 

not "expressly aimed" their conduct at or "specifically targeted" 

the Oregon-based plaintiffs. Defs.' Mem. 12-13. 

Plaintiffs respond that personal jurisdiction is proper 

because defendants' infringement of their copyright occurred 

through the use of an interactive website that marketed and sold 

products - including the allegedly infringing material - to Oregon 

customers, thus establishing sufficient minimum contacts with the 

forum. For the reasons discussed below, I find that this court 

does have personal jurisdiction over defendants. I therefore 

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recommend denying defendants' motion to dismiss for lack of 

personal jurisdiction. 

In opposing a defendant's motion to dismiss for lack of 

personal jurisdiction under Federal Rule. of Civil Procedure 

12 (b) ( 2) , the plaintiff bears the burden of establishing that 

jurisdiction is proper. Mavrix Photo, Inc. v. Brand Technologies, 

Inc., 647 F. 3d 1218, 1223 (9th Cir. 2011). Where, as here, the 

defendant's motion is based on written materials rather than an 

evidentiary hearing, the plaintiff need only make a prima facie 

showing of jurisdictional facts to withstand the motion to dismiss. 

Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 

(9th Cir. 2010) . The court resolves factual disputes in the 

plaintiff's favor. Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 

(9th Cir. 2006). 

To establish personal jurisdiction over defendants in the 

District of Oregon, plaintiffs must show that defendants have had 

sufficient minimum contacts with the forum. Due process requires 

that a defendant, if not present in the state, "have certain 

minimum contacts with it such that the maintenance of the suit does 

not offend traditional hotions of fair play. and substantial 

justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 315 (1945) 

(internal quotation marks omitted) . Minimum contacts can be 

demonstrated through facts supporting either general or specific 

jurisdiction over the defendant. See Helicopteros Nacionales de 

Columbia , S . A . v . H a 11 , 4 6 6 U . S . 4 0 8 , 4 14 ( 19 8 4 ) . I find specific 

jurisdiction applies here. 

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Th~ inquiry into the "minimum contacts" necessary to create 

specific jurisdiction focuses "on the relationship among the 

defendant, the forum, and the litigation." Keeton v. Hustler 

Magazine, Inc., 465 U.S. 770, 775 (1984). In this circuit, the 

court employs the following three-part test to analyze whether a 

party has sufficient minimum contacts to be susceptible to personal 

jurisdiction: whether (1) the defendant has performed some act or 

consummated some transaction within the forum or otherwise 

purposefully availed himself of the privileges of conducting 

activities in the forum, (2) the claim arises out of or results 

from the defendant's forum-related activities, and (3) the exercise 

of jurisdiction is reasonable. Pebble Beach Co., 453 F.3d at 1155 

(citing Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 

1082, 1086 (9th Cir. 2000)). The plaintiff has the burden of 

proving the first two prongs. CollegeSource, Inc. v. AcademyOne, 

Inc., 653 F.3d 1066, 1076 (9th Cir. 2011). If the plaintiff does 

so, the burden then shifts to the defendant to "set forth a 

'compelling case' that the exercise of jurisdiction would not be 

reasonable." Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 

462, 477 (1985)). 

The applicable analysis for the first prong of the inquiry 

depends on the nature of the claim at issue. See Picot v. Weston, 

F.3d , 2015 WL 1259528, at *4 (9th Cir. Mar. 19, 2015). For 

claims sounding in contract, the court generally applies a 

"purposeful availment" analysis to determine whether the defendant 

has "purposefully avail[ed] [himself] of the privilege of 

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conducting activities within the forum 

Schwarzenegger v. Fred Martin Motor Co., 

Cir. 2004) (internal quotations omitted)). 

State [.]" Id. 

374 F.3d 797, 

(citing 

802 (9th 

For claims sounding in 

tort, the court applies the "purposeful direction" analysis and 

determines whether the defendant has "directed his actions at the 

forum state, even if those actions took place elsewhere." 

Schwarzenegqer, 374 F.3d at 802-03 (internal citations omitted). 

Here, the underlying ~ction is copyright infringement, which is 

often characterized as a tort. Brayton Purcell LLP, 606 F.3d at 

1128. Therefore, the applicable analysis is whether the defendants 

purposefully directed their activities at Oregon residents. 

1. Purposeful Direction 

Plaintiffs allege that defendants purposefully directed their 

activities at Oregon residents by marketing their products and 

offering subscriptions to customers, including Oregon customers, 

through their "highly interactive" website. Pls.' Resp. 15. They 

also allege that because defendants have sold products through 

their website to at least one Oregon-based customer and that, in 

fact, 1. 5 percent of the products sold are sold to Oregon-based 

customers, defendants have purposefully directed their activities 

at the forum state. Id. at 16. Defendants argue, however, that 

the maintenance of a website is not enough to establish minimum 

contacts, and that the website does not run any third-party 

advertisements or advertisements specifically targeted at Oregon 

residents. Defendants maintain that plaintiffs cannot establish 

purposeful direction because defendants did not know plaintiffs 

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were Oregon-based at the time of the alleged infringement. Defs.' 

Mem. 12-13. 

This circuit evaluates purposeful direction using the threepart "Calder-effects" test. See Schwarzenegqer, 374 F.3d at 803. 

Under this test, "the defendant allegedly must have (1) committed 

an intentional act, ( 2) expressly aimed at the forum state, ( 3) 

causing harm that the defendant know is likely to be suffered in 

the forum state." Brayton Purcell LLP, 606 F.3d at 1128 (quoting 

Yahoo! Inc. v. La £igue Contre Le Racisme Et L'Antisemitisme, 433 

F. 3d 1199, 1206 (9th Cir. 2006) (en bane)). It is not required 

that defendants have any physical contacts with the forum. See 

Schwarzeneqqer, 374 F.3d at 803. 

Using the Calder effects test, I find that defendants 

purposefully directed their activities at Oregon. 

~. Intentional Act 

The "intentional act" element of the test is easily satisfied 

here. This circuit construes "intent" as "referring to an intent 

to perform an actual, physical act in the real world, rather than 

an intent to accomplish a result or consequence of that act." 

Brayton Purcell LLP, 606 F.3d at 1128-29 (quoting Schwarzenegqer, 

374 F.3d at 806). Plaintiffs allege that since 2012, defendants 

have offered and continue to offer material on its website that 

infringes plaintiffs' copyright. Copyright infringement is an 

intentional act; according to plaintiffs, defendants committed an 

intentional act when they created and posted the "Special Report" 

on their website. Defendants argue that they did not know 

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plaintiffs were located in Oregon before being contacted by Mr. 

Carpenter in 2012; however, this action was filed in 2014, when 

defendants had full knowledge of . the plaintiffs' residence in 

Oregon. Therefore, defendants' argument on this point fails and 

plaintiffs have made a prima facie showing that defendants' alleged 

copyright infringement was an intentional act. 

ii. Express Aiming 

The second part of the Calder-effects test requires that the 

defendant's conduct be expressly aimed at the forum. See Pebble 

Beach Co., 453 F.3d at 1158. It has been established that 

maintenance of a "passive website" that is merely accessible to the 

forum cannot alone satisfy the express aiming prong of the test. 

Id. (" [W] e reject any contention that a passive website 

constitutes express [] aiming.") ) ; see also Holland Am. Line Inc. v. 

Wartsila N.Am., Inc., 485 F.3d 450, 460 (9th Cir. 2007) ("We 

consistently have held that a mere web presence is insufficient to 

establish personal jurisdiction.") However, operating a passive 

website "in conjunction with 'something more' conduct directly 

targeting the forum is sufficient to confer personal 

jurisdiction." Rio Properties, Inc. v. Rio Int'l Interlink, 284 

F.3d 1007, 1019-20 (9th Cir. 2002). 

Courts have found that . websites through which companies 

conduct commercial transactions are "highly interactive;" for 

example, in Tech Heads Inc. v. Desktop Serv. Ctr., Inc., the 

district court concluded that a Virginia computer services company 

website was "highly interactive" because the company conducted most 

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of its business, advertising, and sales over the site. Tech Heads 

Inc. v. Desktop Serv. Ctr., Inc., 105 F. Supp. 2d 1142, 1150 (D. 

Or. 2000). The court found that, because of the ~highly 

interactive" nature of the website, it was enough that the company 

had performed at least one internet transaction with an Oregon 

resident to determine that it had purposefully availed itself of 

the forum state. Id. (citing CompuServe v. Patterson, 8 9 F. 3d 

1257, 1265 (6th Cir. 1999)). 

Here, plaintiffs have established that defendants' website is 

~highly interactive," as defendants sell and market their products 

through their website. Pls.' Resp. 15. Additionally, defendants 

have sold products through their website to at least one Oregonbased customer, and membership is available through the website to 

customers, including customers in Oregon. Id. at 15-16. 

Defendants do not dispute these specific allegations; therefore, 

they are accepted as uncontroverted. I find that due to the nature 

of the defendants' website on which the allegedly infringing 

material appears, as well as the fact that defendants have sold 

products to an Oregon-based customer, defendants' conduct was 

expressly aimed at the forum. 

Additionally, I find that the nature of the copyright 

infringement claim itself indicates that defendants were expressly 

aiming their actions - the alleged infringement of plaintiffs' 

copyright - at Oregon because plaintiffs are located in Oregon. 

See, ~' Dole Food Co. V. Watts, 303 F.3d 1104, 1111-12 (9th Cir. 

2 0 02) (defendant employees who allegedly conspired to defraud 

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plaintiff corporation were found to be ~expressly" aiming their 

activities at the forum state of California because they knew 

plaintiff's principal place of business was ln California, 

plaintiff's decisionmakers were located in California, and they 

communicated directly with those California decisionmakers); 

Brainerd v. Governors of the Univ. Of Alberta, 873 F.2d 1257, 1259-

60 (9th Cir. 1989) (finding specific jurisdiction in Arizona over 

Canadian defendants who had made allegedly defamatory statements in 

response to telephone calls directed to them) . 

iii. Foreseeable Harm 

The final element of the effects test requires that 

defendants' conduct caused harm that they knew was likely to be 

suffered in the forum. Brayton Purcell LLP, 606 F.3d at 1131; see 

also Yahoo!, 433 F.3d. at 1206. This element is satisfied when a 

defendant's intentional act has "foreseeable effects" in the forum. 

Brayton Purcell LLP, 606 F.3d at 1131(citing Bancroft, 223 F.3d at 

1087) . 

In this case, it was foreseeable that plaintiffs would be 

harmed by the infringement of their copyright. It was also 

foreseeable that this harm would occur in Oregon, the forum where 

plaintiffs reside and are located. As stated previously, 

defendants knew as of April 2012 that plaintiffs are located in 

Oregon, and plaintiffs specifically allege that defendants 

continued to commit their infringing acts. Therefore, defendants' 

intentional acts had and continue to have foreseeable effects in 

the forum, satisfying the third element. 

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I find that plaintiffs have satisfied the purposeful direction 

prong of the jurisdictional inquiry. 

2. Claims Arising Out of or Relating to Forum Activities 

The second requirement for finding specific personal 

jurisdiction is that the plaintiff's claim must arise out of or 

related to the defendant's forum related activities. Helicopteros, 

466 U.S. at 414. The "Special Report," which plaintiffs allege 

infringes their copyright, is featured on defendants' "highly 

interactive website" and is available to customers in Oregon. 

Further, as explained above, the infringement is an intentional act 

"aimed" at Oregon plaintiffs. Therefore, plaintiffs' claim for 

copyright infringement is directly related to defendants' forum 

activities 

3. Exercise of Jurisdiction is Reasonable 

The third prong of the inquiry is whether the exercise of 

personal jurisdiction is reasonable. In determining reasonableness, 

the court must weigh the following factors: ( 1) the extent of 

defendants' purposeful injection into the forum; (2) defendants' 

burden from litigating in the forum; ( 3) extent of conflict with 

the sovereignty of the defendants' state; ( 4) the forum state's 

interest in adjudicating the dispute; ( 5) the most efficient 

judicial resolution of the controversy; (6) the importance of the 

forum to the plaintiffs' interest in convenient and effective 

relief; and (7) the existence of an alternative forum." Thea H. 

Davies & Co. v. Republic of the Marshall Islands, 174 F.3d 969, 975 

n.4 (9th ·cir. 1999); Terracom v. Valley Nat'l Bank, 49 F.3d 555, 

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561 (9th Cir. 1995) 

49 F.3d at 561. 

No single factor is dispositive. Terracom, 

However, once a plaintiff shows "purposeful availment," 

jurisdiction is presumptively reasonable and the burden shifts to 

a defendant to show a "compelling case" why jurisdiction is 

unreasonable. Roth v. Garcia Marquez, 942 F.2d 617, 625 (9th Cir. 

1991) . The defendants have not met this burden. 

Defendants argue that personal jurisdiction is unreasonable 

for the following reasons: all of the defendants are located in 

Florida and litigating in Oregon would be burdensome; much "if not 

all" of the alleged infringement occurred while the defendants were 

located in and doing business in Florida; that the Southern 

District of Florida has an interest in resolving the dispute 

involving its citizens; and that Oregon's exercise of jurisdiction 

would conflict with the interests of Florida. Defs.' Reply to 

Pls.' Resp. 7-8. However, there is no longer a pending case in 

Florida, and defendants' argument that litigating in Oregon would 

be burdensome does not override the substantial interest Oregon has 

in adjudicating a dispute involving its residents. All of the 

plaintiffs are Oregon residents, and the alleged infringement was 

directed at them in Oregon. Additionally, in this age of 

electronic discovery and videoconferencing, litigating in another 

forum is less burdensome than it may once have been. See Nat'l 

Shopmen Pension Fund v. Stamford Iron & Steel Works, 999 F. Supp. 

2d 229, 233 (D.D.C. 2013) (citation omitted) ("The availability of 

electronic discovery and the use of depositions and 

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Case 6:14-cv-01395-TC Document 22 Filed 04/06/15 Page 14 of 16
videoconferencing 

inconvenience to 

to secure 

defendants 

witness testimony 

[located outside the 

renders 

forum] 

the 

less 

onerous."). Furthermore, transferring the action to another forum 

would merely shift the balance of inconvenience from defendants to 

plaintiffs. See id. 

The defendants have not presented a compelling case for this 

court to decline the assertion of personal jurisdiction over them. 

Therefore, I recommend that defendants' motion to dismiss for lack 

of personal jurisdiction be denied. 

CONCLUSION 

For the reasons stated above, defendants' motions to dismiss 

or stay pursuant to the first-to-file rule, or, in the alternative, 

to dismiss for lack of personal jurisdiction, should be denied. 

This recommendation is not an order that is immediately 

appealable to the Ninth Circuit Court of Appeals. 

appeal pursuant to Rule 4 (a) (1), Federal Rules 

Any notice of 

of Appellate 

Procedure, should not be filed until entry of the district court's 

judgment or appealable order. The parties shall have fourteen (14) 

days from the date of service of a copy of this recommendation 

within which to file specific written objections with the court. 

Thereafter, the parties shall have fourteen (14) days within which 

to file a response to the objections. Failure to timely file 

objections to any factual determination of the Magistrate Judge 

will be considered as a waiver of a party's right to de novo 

consideration of the factual issues and will constitute a waiver of 

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a party's right to appellate review of the findings of fact in an 

order or judgment, entered pursuant to this recommendation. 

DATED this ~day of April, 2015. 

THOMAS M. 

United 

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Judge 

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