March 23rd, 2018
The United States District Court for the Central District of California recently held that personal jurisdiction for a declaratory judgment action does not exist when, in addition to sending a cease-and-desist letter, the defendant sends a takedown request that is directed to a non-party. Jobar Int’l Inc. v. Juka Innovations Corp., No. LA CV17-07441 JAK (MRWx), slip op. at 11 (C.D. Cal. Feb. 23, 2018).
In Int’l Shoe Co. v. Wash., the Supreme Court held that personal jurisdiction exists when a defendant has certain “minimum contacts” with a forum such that maintenance of a lawsuit in the forum does not offend “traditional notions of fair play and substantial justice.” 326 U.S. 310, 316 (1945). Based on this framework, the Federal Circuit’s personal jurisdiction analysis looks at the following: “(1) whether the defendant ‘purposefully directed’ its activities at residents of the forum; (2) whether the claim ‘arises out of or relates to’ the defendant’s activities with the forum; and (3) whether the assertion of personal jurisdiction is ‘reasonable and fair.’” Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001) (quoting Akro Corp. v. Luker, 45 F.3d 1541, 1545 (Fed. Cir. 1995)). The first two prongs of this analysis relate to the “minimum contacts” requirement, while the third prong relates to the “traditional notions of fair play and substantial justice” requirement. Id.
The Federal Circuit has held that while sending a cease-and-desist letter is often sufficient to satisfy the “minimum contacts” requirement, it alone is not enough to justify personal jurisdiction in a declaratory judgment action under the principles of fair play and substantial justice. Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360-61 (Fed. Cir. 1998). However, sending a cease-and-desist letter and engaging in “other activities” directed at the forum state can establish personal jurisdiction in a declaratory judgement action. Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1019 (Fed. Cir. 2009).
In Jobar Int’l, defendant Juka, a New York corporation, sent a cease-and-desist letter to plaintiff Jobar, a California corporation, asserting that Jobar had infringed Juka’s intellectual property rights by selling allegedly infringing products. Jobar Int’l, slip op. at 2. In addition, Juka allegedly sent takedown requests to both eBay and Amazon. Id., slip op. at 3. Upon receiving the takedown requests, both eBay and Amazon notified a non-party seller of Jobar’s allegedly infringing products, Ms. Wendy Kromer, that the products were removed from their respective online marketplaces. Id., slip op. at 3. After receiving the cease-and-desist letter, Jobar filed a declaratory judgment action in the Central District of California. Id., slip op. at 2. Juka moved to dismiss the declaratory judgment action for lack of personal jurisdiction. Id., slip op. at 1.
Utilizing the three prong analysis originally from Inamed Corp. discussed above, the court in Jobar Int’l held that, consistent with Federal Circuit precedent, sending the cease-and-desist letter was sufficient to satisfy the first and second prongs of such test, but that it would not be proper to find personal jurisdiction without “other activities.” Id., slip op. at 8-10. Accordingly, the court looked to the takedown requests sent by Juka to eBay and Amazon, which were directed to Ms. Kromer, a non-party. Id., slip op. at 10-11. The court held these takedown requests were not sufficient to support the finding of personal jurisdiction under the “fair and reasonable” analysis given that the requests were not “purposefully directed” to California or to harming Joba. Id., slip op. at 11. Accordingly, the court granted Juka’s motion to dismiss for lack of personal jurisdiction. Id., slip op. at 11-12.
Notably, in support of its holding, the court distinguished Jobar’s actions from the facts in two other cases, namely Campbell Pet Co. v. Miale, 542 F.3d 879 (Fed. Cir. 2008) and Dudnikov v. Chalk & Vermillion Fine Arts, 514 F.3d 1063 (10th Cir. 2008). Id., slip op. at 10-12. In Campbell Pet Co., the Federal Circuit held that establishing personal jurisdiction over defendant Miale was proper because Miale acted within the forum state in a manner intended to directly interfere with plaintiff Campbell’s business. 542 F.3d at 887. For example, defendant Miale, while in the forum state, requested an exhibit manager remove plaintiff Campbell’s exhibit at a convention, alleging patent infringement. Id. Similarly, in Dudnikov the United States Court of Appeals for the Tenth Circuit held that establishing personal jurisdiction over defendant Chalk was proper because Chalk’s actions resulted in a third party taking action directly against plaintiff Dudnikov’s business interests in the forum state. 514 F.3d at 1082. More specifically, defendant Chalk sent eBay a takedown request asserting that plaintiff Dudnikov, a resident of the forum state, was auctioning an infringing product in eBay’s online marketplace. Id.
In distinguishing Juka’s actions from the facts of Campbell Pet Co. and Dudnikov, the court noted that the takedown requests Juka sent were directed (through eBay and Amazon) to Ms. Kromer, a non-party to the case. Jobar Int’l, slip op. at 11. The court also noted that there was no evidence about the precise relationship between Ms. Kromer and Jobar, or the scope of Ms. Kromer’s conduct that preceded the takedown requests. Id., slip op. at 11-12.
Takeaway: A defendant’s cease-and-desist letter coupled with a takedown request that does not have a direct effect on plaintiff’s business in a forum may not be sufficient “other activities” necessary to establish personal jurisdiction over the defendant in a declaratory judgment action in such forum.