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Stanley Filter Co., LLC v. Wingmaster Sales, LLC

United States District Court, N.D. Oklahoma

November 7, 2017

STANLEY FILTER CO., LLC, Plaintiff,
v.
WINGMASTER SALES, LLC, Defendant.

          OPINION AND ORDER

          CLAIRE V. EAGAN, UNITED STATES DISTRICT JUDGE

         Before the Court is defendant Wingmaster Sales, LLC's motion to dismiss (Dkt. # 24) plaintiff Stanley Filter Co., LLC's, complaint (Dkt. # 2) under Rule 12(b)(2) of the Federal Rules of Civil Procedure, arguing that this Court lacks personal jurisdiction over defendant, or, in the alternative, under Rule 12(b)(3), on the ground that venue is improper.

         I. Background

         Plaintiff is a limited liability company organized and existing under the laws of Oklahoma, which maintains its principal place of business in Tulsa, Oklahoma. Dkt. # 2, at 1. Defendant is a limited liability company organized and existing under the laws of New Mexico, which maintains its principal place of business in Hobbs, New Mexico. Dkt. # 25-1, at 2. Plaintiff sells “downhole sand filters and oilfield services” and owns several trademarks it utilizes in its business Dkt. # 2, at 3-5. For the last twenty or twenty-five years, pursuant to a distributor sales agency agreement (the agreement), defendant distributed plaintiff's filtration products exclusively in the New Mexico and north Texas markets. Dkt. # 24-2, at 2.[1] During this time, defendant routinely purchased plaintiff's products. Dkt. # 26-1, at 1. Plaintiff took defendant's orders in its home office and shipped them from its warehouse, both of which were (and still are) in Tulsa, Oklahoma. Id. at 1-2. In addition, defendant's representatives met with plaintiff's representatives in Tulsa at least “two or three times, ” including when one of defendant's representatives attended a two-day seminar that plaintiff hosted Dkt. # 24-1, at 2.

         According to plaintiff, defendant “terminated the agreement” in 2016. Dkt. # 26-1, at 2. In its reply, defendant does not admit to terminating the agreement, but acknowledges that the parties' “business relationship” has been “terminated.” Dkt. # 28, at 5. In responding to the Court's order to produce a copy of the agreement, however, affiant Richard Schlabach (sole member of defendant) states that the “agreement . . . was never terminated.” Dkt. # 36-1, at 2.

         On April 6, 2017, plaintiff filed this lawsuit, alleging that defendant is promoting, advertising, distributing, selling, or offering for sale, counterfeit goods that infringe on plaintiff's trademarks. Dkt. # 2, at 6. In its complaint, plaintiff brings claims for trademark counterfeiting and infringement pursuant to the Lanham Act, 15 U.S.C. § 1051 et seq., false designation of origin and unfair competition pursuant to the Lanham Act, common law unfair competition, common law trademark infringement, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Id. at 8-15. Defendant was served on April 24, 2017 via personal service. Dkt. # 7; Dkt. # 8. On June 16, 2017, plaintiff filed a motion for entry of default, which the Court Clerk granted. Dkt. # 10; Dkt. # 12. On August 24, 2017, defendant moved to set aside the Court Clerk's entry of default, and the Court granted defendant's motion. Dkt. # 19; Dkt. # 22. Defendant now moves (Dkt. # 24) to dismiss plaintiff's complaint.

         II. Defendant's Motion to Dismiss

         Defendant moves to dismiss plaintiff's complaint under Rule 12(b)(2) of the Federal Rules of Civil Procedure, arguing that this Court lacks personal jurisdiction over defendant, or, in the alternative, under Rule 12(b)(3), on the ground that venue is improper. Dkt. # 24.

         A. Personal Jurisdiction

         Plaintiff bears the burden of establishing that the Court has personal jurisdiction over the defendant. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). “When a district court rules on a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, . . . the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion.” Id. (citations omitted). “The plaintiff may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.” Id. at 1091. “In order to defeat a plaintiff's prima facie showing of jurisdiction, a defendant must present a compelling case demonstrating ‘that the presence of some other considerations would render jurisdiction unreasonable.'” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). The allegations of the complaint must be accepted as true to the extent that a defendant's affidavit does not controvert them. Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir. 1990). If the parties provide conflicting affidavits, all factual disputes must be resolved in plaintiff's favor and a prima facie showing of personal jurisdiction is sufficient to overcome defendant's objection. Id.

         For a court to exercise personal jurisdiction over a nonresident defendant, plaintiff must demonstrate the existence of every fact required to satisfy both the forum's long-arm statute and the Due Process Clause of the United States Constitution. See O kla. Stat. tit. 12, § 2004(F). “Because Oklahoma's long-arm statute permits the exercise of jurisdiction that is consistent with the United States Constitution, the personal jurisdiction inquiry under Oklahoma law collapses into the single due process inquiry.” Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (citing Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1416 (10th Cir. 1988)); see also Hough v. Leonard, 867 P.2d 438, 442 (Okla. 1993).

         “The Due Process Clause permits the exercise of personal jurisdiction over a nonresident defendant ‘so long as there exist minimum contacts between the defendant and the forum State.'” Intercon, 205 F.3d at 1247 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)). The existence of such minimum contacts must be shown to support the exercise of either general jurisdiction or specific jurisdiction. A court “may, consistent with due process, assert specific jurisdiction over a nonresident defendant ‘if the defendant has purposefully directed his activities at the residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities.'” Id. at 1247 (quoting Burger King, 471 U.S. at 472). “When a plaintiff's cause of action does not arise directly from a defendant's forum related activities, the court may nonetheless maintain general personal jurisdiction over the defendant based on the defendant's business contacts with the forum state.” Id. at 1247 (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-16, n.9 (1984)).

         In the Tenth Circuit, specific jurisdiction requires a two-step analysis. First, courts “must consider whether ‘the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.'” Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004) (quoting World-Wide Volkswagen, 444 U.S. at 297). If such minimum contacts exist, then courts must “consider whether the exercise of personal jurisdiction over the defendant offends ‘traditional notions of fair play and substantial justice.'” Benton, 375 F.3d at 1075 (quoting OMI Holdings, 149 F.3d at 1091).

         i. ...


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