Court Opinion

ID: 4653940
Source: CourtListenerOpinion
Date Created: 2021-01-22 21:00:33.567029+00
Date Added: 2024-06-11T07:57:13.580253
License: Public Domain

NOT FOR PUBLICATION                            FILED
                    UNITED STATES COURT OF APPEALS                         JAN 22 2021
                           FOR THE NINTH CIRCUIT                      MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS

SPY OPTIC, INC.,
                                              No. 20-55438
         Plaintiff-Appellant,
                                              D.C. No. 3:19-cv-01770-WQH-BLM
v.
                                              MEMORANDUM*
AREATREND, LLC; DOES, 1-10,
inclusive,

        Defendants-Appellees.

                     Appeal from the United States District Court
                      for the Southern District of California
                    William Q. Hayes, District Judge, Presiding

                    Argued and Submitted December 11, 2020
                             Pasadena, California

Before: BEA, THAPAR,** and COLLINS, Circuit Judges.

      Spy Optic is a Southern California brand best known for its sunglasses and

sports goggles. Its products are far from cheap (the sunglasses range from $65 to

*
  This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.
**
   Honorable Amul R. Thapar, United States Circuit Judge for the Sixth Circuit,
sitting by designation.
$200). But with premium prices comes a premium product: Spy Optic prides itself

on using only the highest quality materials and promotes its logo as a universal

symbol of “positivity and good vibes.”

      Because Spy Optic is a luxury brand, counterfeiters and unauthorized sellers

present a serious problem. To cope with the problem, Spy Optic allows only a

limited number of dealers to sell its products, and it routinely scours the internet for

counterfeit products. But despite these efforts, the unauthorized use of Spy Optic’s

trademarks remains a challenge.

      Enter AreaTrend. AreaTrend is an online store based in Ohio that sells

discounted name-brand goods. AreaTrend isn’t an authorized Spy Optic dealer. But

that hasn’t stopped it from selling Spy Optic–branded sunglasses for almost two

years. When Spy Optic found out, it sent AreaTrend a cease-and-desist letter.

AreaTrend ignored the letter, so Spy Optic sued.

      Spy Optic filed its lawsuit in the Southern District of California. AreaTrend

moved to dismiss for lack of personal jurisdiction. AreaTrend said it has almost no

connection to California: It has no offices or employees in California; it does not

advertise or market products in California; and less than 5% of its total sales across

all product lines are to Californians.     The district court agreed that it lacked

jurisdiction and granted the motion to dismiss. On appeal, Spy Optic argues that the

district court erred by holding that it had no specific jurisdiction over AreaTrend.

                                         -2-
                                          I.

      Federal due process principles determine whether a court may assert specific

jurisdiction over a non-consenting defendant. See Daimler AG v. Bauman, 571 U.S.

117, 125 (2014) (“California’s long-arm statute allows the exercise of personal

jurisdiction to the full extent permissible under the U.S. Constitution.”). Due process

requires that a non-resident defendant have certain “minimum contacts” with the

forum state “such that the maintenance of the suit does not offend traditional notions

of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310,

316 (1945) (cleaned up). The plaintiff bears the burden of proving that there are

minimum contacts. Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064, 1068

(9th Cir. 2017). In the context of trademark claims, a plaintiff generally must show

(1) that the defendant purposefully directed activities at the forum, and (2) that its

claim “arises out of or relates to the defendant’s forum-related activities.” Id.

(citation omitted); see also Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1321

(9th Cir. 1998) (purposeful direction test generally applies in trademark cases, which

are “akin to a tort case”).

      The first requirement is often called the “purposeful direction” test. It has

three prongs: “The defendant must 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.” Axiom Foods, 874 F.3d at 1069 (cleaned

                                         -3-
up). The test is all or nothing; if a plaintiff cannot establish even one of the three

prongs, specific jurisdiction cannot attach. See Picot v. Weston, 780 F.3d 1206,

1214–15, 1215 n.4 (9th Cir. 2015).

      AreaTrend concedes that it committed an intentional act by selling Spy Optic–

branded products. So we start with the second prong: whether AreaTrend’s acts

were “expressly aimed” at California. Spy Optic must show that California was a

“focal point both of [AreaTrend’s actions] and of the harm suffered.” Axiom Foods,

874 F.3d at 1071 (quoting Walden v. Fiore, 571 U.S. 277, 287 (2014)).

      Spy Optic argues that it met its burden for two reasons. First, Spy Optic

contends that AreaTrend targeted California when it sold Spy Optic–branded

products online. But that is not the standard: Operating a universally accessible

website alone cannot satisfy the express aiming prong. See Mavrix Photo, Inc. v.

Brand Techs., Inc., 647 F.3d 1218, 1231 (9th Cir. 2011) (“Not all material placed on

the Internet is, solely by virtue of its universal accessibility, expressly aimed at every

state in which it is accessed.”). Instead, a plaintiff must also show that the website

“directly target[ed] the forum.” AMA Multimedia, LLC v. Wanat, 970 F.3d 1201,

1210 (9th Cir. 2020) (citation omitted). A defendant directly targets a forum when

its website “appeals to, and profits from, an audience in [that] state.” Mavrix Photo,

647 F.3d at 1231.

                                          -4-
      The evidence and allegations here show the opposite. AreaTrend is not

registered to do business in California; it does not advertise or market its products in

California; and it does not maintain a mailing list, membership club, or other

ongoing relationship with California customers.          Indeed, the only connection

between AreaTrend’s website and infringing activities in California is that 0.0018%

of AreaTrend’s sales are Spy Optic products to California. That’s not enough to

show that AreaTrend had a “[California]-specific focus.” Wanat, 970 F.3d at 1210.

So we cannot find that AreaTrend targeted California. See Matus v. Premium

Nutraceuticals, LLC, 715 F. App’x 662, 663 (9th Cir. 2018) (“If [a defendant] can

be haled into California merely on the basis of its universally accessible website then

. . . every online advertiser worldwide can be haled into California.”).1

      Second, Spy Optic contends that AreaTrend knowingly caused harm in

California.   Spy Optic claims that AreaTrend knew Spy Optic was based in

California. Thus, when it sold Spy Optic–branded products without authorization,

AreaTrend knowingly harmed a California company. But a defendant’s knowledge

that the plaintiff resides in the forum state, “will not, on its own, support the exercise

1
  For similar reasons, Spy Optic has failed to “point to any conduct by [AreaTrend]
in California related to the [infringement] that would be readily susceptible to a
purposeful availment analysis” under our cases. Schwarzenegger v. Fred Martin
Motor Co., 374 F.3d 797, 803 (9th Cir. 2004).
                                          -5-
of specific jurisdiction.” Axiom Foods, 874 F.3d at 1069–70; see also Walden, 571

U.S. at 289.

      Because AreaTrend did not commit acts expressly aimed at California, the

district court correctly found that it lacked specific jurisdiction. See Picot, 780 F.3d

at 1213 n.2.

                                          II.

      We have one additional issue to resolve. Spy Optic argues that the district

court should have allowed jurisdictional discovery. We review a district court’s

rulings concerning discovery for an abuse of discretion. Laub v. U.S. Dep’t of

Interior, 342 F.3d 1080, 1084 (9th Cir. 2003) (regarding jurisdictional discovery).

      We have no reason to think the evidence Spy Optic seeks would change the

analysis. See Getz v. Boeing Co., 654 F.3d 852, 867–68 (9th Cir. 2011). For

example, Spy Optic concedes that “there is no evidence that AreaTrend specifically

targets California customers in its advertising.”        Yet it seeks discovery of

AreaTrend’s “internal correspondence discussing targeting California customers.”

Without more, Spy Optic’s request appears to be a fishing expedition in search of a

jurisdictional hook. See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1160 (9th Cir.

2006) (“Where a plaintiff’s claim of personal jurisdiction appears to be both

attenuated and based on bare allegations in the face of specific denials made by the

defendants, the Court need not permit even limited discovery.” (cleaned up)).

                                         -6-
Because Spy Optic’s request is not based on more than a “hunch that it might yield

jurisdictionally relevant facts,” discovery isn’t required. See Boschetto v. Hansing,

539 F.3d 1011, 1020 (9th Cir. 2008).

                                        III.

      We affirm the district court’s order granting the motion to dismiss and deny

AreaTrend’s motions to strike portions of Spy Optic’s briefs as moot.

                                        -7-