Shijin Vapor LLC v. Bolt USA, LLC ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 SHIJIN VAPOR, LLC, Case No. 20-cv-05238-PJH 8 Plaintiff, 9 v. ORDER DENYING MOTION TO DISMISS AND MOTION TO 10 BOLT USA, LLC, et al., TRANSFER 11 Defendants. Re: Dkt. No. 12 12 13 Before the court is defendant Bolt USA, LLC’s motion to dismiss and motion to 14 transfer venue. The matter is fully briefed and suitable for decision without oral 15 argument. Having read the parties’ papers and carefully considered their arguments and 16 the relevant legal authority, and good cause appearing, the court rules as follows. 17 BACKGROUND 18 This declaratory judgment suit arises out of an alleged trademark infringement. 19 Plaintiff Shijin Vapor, LLC (“plaintiff”) is the manufacturer of e-liquids for use in electronic 20 cigarettes, vaporizers, and similar products. Complaint, ¶ 7. Some of plaintiff’s products 21 were marked with the name “Bolt” and were sold through a third-party, VaporDNA.1 Id., 22 ¶ 29. 23 On or about April 30, 2020, defendant Bolt USA, LLC (“defendant”) applied for 24 multiple trademarks on the word “Bolt” and on a stylized “Bolt” logo. Complaint, ¶¶ 11-24. 25 On or about May 12, 2020, defendant sent a cease and desist letter to VaporDNA, 26 27 1 identifying plaintiff’s products as allegedly infringing defendant’s trademarks. Complaint, 2 Ex. 2. Defendant’s letter directed VaporDNA to confirm that it would stop using the 3 marks and provide a detailed financial accounting of all allegedly infringing products. Id. 4 Defendant’s letter further stated that it would “take any and all available legal action, 5 including filing a civil suit” and that it would “take action without further notice or demand” 6 if the letter’s requests were not met. Id. 7 On June 10, 2020, defendant sent another cease and desist letter, to plaintiff. 8 Complaint, Ex. 7. Plaintiff alleges that defendant’s letter contains false assertions of fact, 9 and further alleges that defendant made material false statements to the United States 10 Patent and Trademark Office in order to secure its “Bolt”-related trademarks. Complaint, 11 ¶¶ 38, 39. 12 Plaintiff further alleges that defendant’s letter to VaporDNA “falsely claimed 13 ownership” of the “Bolt”-related trademarks, and as a result of the letter, “VaporDNA 14 terminated its business relationship with plaintiff with regard to plaintiff’s Bolt marked 15 products.” Id., ¶¶ 27, 29. 16 On July 30, 2020, plaintiff filed this suit, seeking a declaratory judgment stating 17 that plaintiff had used the “Bolt” mark prior to defendant’s first use, and is thus legally 18 entitled to use the mark.2 Complaint at 19. Plaintiff also asserts three other causes of 19 action arising out of the trademark dispute and its effect on plaintiff’s contract with 20 VaporDNA: intentional interference with contractual relations, intentional interference 21 with prospective economic relations, and violation of Cal. Bus. & Prof. Code § 17200. 22 Complaint, ¶¶ 45-68. 23 Defendant now moves to dismiss or transfer the complaint for improper venue 24 under Rule 12(b)(3) and 28 U.S.C. § 1406, or in the alternative, to transfer for 25 convenience under 28 U.S.C. § 1404(a). 26 27 1 DISCUSSION 2 A. Legal Standard 3 1. Rule 12(b)(3) and 28 U.S.C. § 1406 4 “The district court of a district in which is filed a case laying venue in the wrong 5 division or district shall dismiss, or if it be in the interest of justice, transfer such case to 6 any district or division in which it could have been brought.” 28 U.S.C. § 1406(a). If a 7 defendant files a motion under Federal Rule of Civil Procedure 12(b)(3) to dismiss for 8 improper venue, it is the plaintiff’s burden to establish that venue is properly in the district 9 where the suit was filed. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 10 496 (9th Cir. 1979). In considering a motion to dismiss under Rule 12(b)(3), a court need 11 not accept the pleadings as true and may consider facts outside the pleadings. See 12 Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). 13 Where venue is improper, a court has discretion to dismiss the case pursuant to 14 Rule 12(b)(3) or transfer the case in the interests of justice to an appropriate jurisdiction 15 under 28 U.S.C. § 1406(a). See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992) 16 (per curiam). “The decision to dismiss for improper venue, or alternatively to transfer 17 venue to a proper court, is a matter within the sound discretion of the district court.” 18 Klamath Tribes v. United States Bureau of Reclamation, 2018 WL 3570865 at *3 (N.D. 19 Cal. July 25, 2018) (citing King, 963 F.2d at 1304). 20 2. 28 U.S.C. § 1404 21 In addition, “[f]or the convenience of parties and witnesses, in the interest of 22 justice, a district court may transfer any civil action to any other district or division where it 23 might have been brought . . . .” 28 U.S.C. § 1404(a). The party moving for transfer for 24 the convenience of parties and witnesses bears the burden of demonstrating transfer is 25 appropriate. Commodity Futures Trading Comm’n v. Savage, 611 F.2d 270, 279 (9th Cir. 26 1979). In considering a § 1404(a) motion to transfer, the court must look at each of the 27 enumerated factors—whether the action could have been brought in the proposed 1 the interests of justice. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985). 2 If the action could have been brought in the transferee venue, the court then must 3 determine if the defendant has made a “strong showing of inconvenience to warrant 4 upsetting the plaintiff‘s choice of forum” by considering private factors relating to “the 5 convenience of the parties and witnesses” and public factors relating to “the interest of 6 justice,” including “the administrative difficulties flowing from court congestion and [the] 7 local interest in having localized controversies decided at home.” Decker Coal Co. v. 8 Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986) (internal quotation marks 9 omitted). 10 Courts in this district commonly examine the following factors to determine 11 convenience and fairness under § 1404(a): (1) the plaintiff’s choice of forum, (2) the 12 convenience of the parties, (3) the convenience of the witnesses, (4) the ease of access 13 to the evidence, (5) the familiarity of each forum with the applicable law, (6) the feasibility 14 of consolidation with other claims, (7) any local interest in the controversy, and (8) the 15 relative court congestion and time to trial in each forum. Williams v. Bowman, 157 F. 16 Supp. 2d 1103, 1106 (N.D. Cal. 2001) (citation omitted); see Jones v. GNC Franchising, 17 Inc., 211 F.3d 495, 498–99 (9th Cir. 2000). Courts may examine all these factors, but 18 “[n]o single factor is dispositive.” Ctr. for Biological Diversity v. Kempthorne, 2008 WL 19 4543043, at *2 (N.D. Cal. Oct. 10, 2008) (citing Stewart Org., Inc. v. Ricoh Corp., 487 20 U.S. 22, 29 (1988)). The weighing of the factors for and against transfer is within a trial 21 court’s discretion. Ventress v. Japan Airlines, 486 F.3d 1111, 1118 (9th Cir. 2007) 22 (citation omitted). 23 B. Analysis 24 Defendant makes two venue-related arguments. First, it contends that venue is 25 not proper in the Northern District of California under 28 U.S.C. § 1391(b) and, therefore, 26 the court should dismiss the complaint or, in the alternative, transfer the case to the 27 district court for the Central District of California. Dkt. 12 at 7. Second, defendant argues 1 Central District of California pursuant to 28 U.S.C. § 1404(a). Id. 2 1. Whether Venue is Proper in the Northern District of California 3 Venue in a civil action is proper in: 4 (1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is 5 located; (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a 6 substantial part of property that is the subject of the action is situated: or (3) if there is no district in which an action may 7 otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal 8 jurisdiction with respect to such action. 9 28 U.S.C. § 1391(b). 3 10 Defendant’s motion argues that venue is not proper under any subsection of 11 section 1391(b). In its opposition brief, plaintiff argues only that “venue is proper in this 12 court because a substantial part of the events giving rise to plaintiff’s claims against 13 defendant occurred in the Northern District,” which invokes the language of section 14 1391(b)(2). 15 While plaintiff’s opposition brief does present arguments about defendant’s 16 contacts with the Northern District, it does not meaningfully address the “residence” 17 requirement of section 1391(b)(1). Indeed, plaintiff’s opposition brief does not mention 18 section 1391(d), which provides the test for determining the residence of a corporation in 19 a state with multiple judicial districts, such as California. See 28 U.S.C. § 1391(d). 20 Similarly, plaintiff’s opposition brief does not address whether venue is proper 21 under section 1391(b)(3). Because, as mentioned above, plaintiff bears the burden of 22 showing that venue is proper in this district, the court finds that plaintiff has not shown 23 that venue is proper under section 1391(b)(1) or section 1391(b)(3), and will thus 24 3 In its complaint, plaintiff also states that venue is proper under 28 U.S.C. §§ 1391(c) 25 and 1400(a). However, plaintiff’s opposition brief argues only that venue is proper under section 1391(b). Because plaintiff bears the burden of establishing that venue is proper, 26 the court will not consider any bases for venue that were not addressed in plaintiff’s opposition brief. The court further notes that section 1391(c) does not provide a basis for 27 venue, and that the language of section 1400(a) applies only to copyright and patent 1 consider only whether venue is proper under section 1391(b)(2). 2 Defendant argues that venue is not proper under section 1391(b)(2) because “a 3 substantial part of the events or omissions giving rise to the claim” did not occur in the 4 Northern District of California. Dkt. 12 at 15. Specifically, defendant argues that “there 5 are no events alleged in the complaint that occurred in the Northern District.” Id. 6 Plaintiff responds by arguing that “the development of all its products at issue . . . 7 including specifically the features that defendant has wrongly accused of infringing 8 trademarks” was performed in this district. Dkt. 17 at 13; Dkt. 17-1, ¶ 10. Plaintiff further 9 argues that its products are sold and distributed in this district. Dkt. 17-1, ¶ 11. 10 “In a trademark infringement action, a substantial part of the events occur[s] both 11 where the labels are affixed and where confusion of purchasers is likely to occur.” Kaia 12 Foods, Inc. v. Bellafiore, 70 F.Supp.3d 1178, 1184 (N.D. Cal. 2014) (citing Sutter Home 13 Winery, Inc. v. Madrona Vineyards, L.P., 2005 WL 701599, at *4 n. 2 (N.D. Cal. March 14 23, 2005)). 15 Another court, facing the same issues raised by defendant’s motion, observed that 16 “[t]here is a surprising dearth of authority directly addressing transactional venue under 17 § 1391(b)(2) in the context of an action for declaratory judgment of non-infringement of a 18 trademark.” Jeffers Handbell Supply, Inc. v. Schulmerich Bells, LLC, 2017 WL 3582235, 19 at *8 (D.S.C. Aug. 18, 2017). The Jeffers court noted that the transactional venue 20 analysis typically focuses on the activities of the defendant, not of the plaintiff; however, 21 the court disagreed that such a focus was required by the statute. Id. at *7; see also In re 22 Enron Corp., 317 B.R. 701, 708 (Bankr. S.D. Tex. 2004) (holding that the venue statute 23 “does not specify that a court must look only to the defendant’s activities”). In particular, 24 the Jeffers court determined that an action “in which a plaintiff seeks a declaratory 25 judgment that it did not infringe a trademark” would be an instance where plaintiff’s 26 activities were relevant to the transactional venue analysis, because “plaintiff is asserting 27 that it is entitled to judgment on a claim at least in part because of actions that it did not 1 The Jeffers court ultimately concluded that “[i]n a trademark infringement action, 2 venue is appropriate not only in ‘the location where there are sales or advertising of 3 goods or services bearing the accused mark,’ but also in ‘the location where [alleged 4 infringer] placed the accused mark on the goods or prepared advertising bearing the 5 accused mark,’ which ‘will usually also be the same place as where the [alleged infringer] 6 resides’” Id. at *8 (quoting 6 J. Thomas McCarthy, McCarthy on Trademarks and Unfair 7 Competition § 32.64 (4th ed.)); see also Nursery Decals and More, Inc. v. Neat Print, Inc., 8 2020 WL 1819885 at *11 (N.D. Tex. Apr. 10, 2020) (finding venue proper in district where 9 declaratory judgment plaintiff sold its allegedly-infringing products); Sauer Brands v. Duke 10 Sandwich Productions, Inc., 2020 WL 90663 at *2 (W.D.N.C. Jan. 7, 2020) (“although 11 venue in other fora may be appropriate as well, venue generally will lie where the events 12 or omissions that would give rise to a potential claim for trademark infringement occur”) 13 (internal quotation omitted). 14 The court finds the reasoning of Jeffers to be persuasive and applies it here. 15 Thus, venue is appropriate where plaintiff sold or advertised goods bearing the accused 16 mark, and where plaintiff placed the accused mark on the goods or prepared advertising 17 bearing the mark. Because there is no dispute that plaintiff performed those activities in 18 the Northern District of California, the court concludes that venue is appropriate in this 19 district under section 1391(b)(2). 20 The court also notes that venue under section 1391(b)(2) may be proper in 21 multiple districts. Doe v. Epic Games, Inc., 435 F.Supp.3d 1024, 1039 (N.D. Cal. 2020); 22 see also Tech. Credit Corp. v. N.J. Christian Acad., Inc., 307 F. Supp. 3d 993, 1002 (N.D. 23 Cal. 2018) (venue may be proper in multiple districts if a “substantial part” of the 24 underlying events took place in each of those districts) (citation omitted). 25 Finally, the court also must have venue over plaintiff’s other claims. “Once a court 26 has determined that venue is proper as to one claim,” however, “it may exercise pendent 27 venue to adjudicate closely related claims.” United Tactical Sys. LLC v. Real Action 1 (USA) Ltd. v. U.S. Postal Serv., 302 F.3d 985, 997–98 (9th Cir. 2002), rev’d on other 2 grounds, 540 U.S. 736 (2004). 3 The gravamen of this case is the trademark dispute between plaintiff and 4 defendant. The causes of action relating to plaintiff’s business relationship with 5 VaporDNA all derive from the trademark infringement dispute, because if defendant 6 prevails on the trademark infringement claim (i.e., if defendant is adjudged to be the 7 owner of a valid “Bolt” trademark), then its activities with respect to VaporDNA could not 8 have been tortious. In other words, all of the complaint’s causes of action will rise or fall 9 based on the outcome of the trademark dispute. Accordingly, the claims are “closely 10 related,” and because venue is proper for the declaratory relief cause of action regarding 11 trademark infringement, venue is also proper for the complaint’s other causes of action. 12 For the foregoing reasons, the court concludes that venue is proper under section 13 1391(b)(2). Defendant’s motion to dismiss or transfer under Rule 12(b)(3) and 28 U.S.C. 14 § 1406 is DENIED. 15 2. Whether the Court Should Transfer Venue under § 1404 16 In the alternative, defendant contends that the court should transfer this case to 17 the Central District of California for the convenience of the parties and witnesses 18 pursuant to 28 U.S.C. § 1404(a). Dkt. 12 at 17. 19 a. Whether the Action Could Have Been Initiated in the Central 20 District of California 21 “In determining whether an action might have been brought in a district, the court 22 looks to whether the action initially could have been commenced in that district.” Hatch v. 23 Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985). Defendant argues that this action 24 could have been brought in the Central District of California because both it and 25 VaporDNA are located in the Central District. Dkt. 12 at 18. Plaintiff does not contest 26 this argument and the court agrees that this case could have been brought in the Central 27 District of California. 1 b. Whether Transfer Would Advance the Interests of Justice 2 i. Plaintiff’s Choice of Forum 3 Defendant contends that, while there is ordinarily a presumption in favor of the 4 plaintiff’s choice of forum, that presumption is reduced where the chosen forum lacks 5 significant contact with the activities alleged in the complaint. Dkt. 12 at 18. However, as 6 discussed with regard to the section 1391(b)(2) analysis, a substantial part of the events 7 giving rise to this suit – specifically, the alleged trademark infringement – took place in 8 this district, which distinguishes this case from McCormack v. Safeway Stores, Inc., 9 where the court found that the “center of gravity” in a Title VII employment case was in 10 Arizona, rather than California, because plaintiff was employed by defendant in Arizona 11 and all relevant events took place in Arizona. McCormack, 2012 WL 5948965 (N.D. Cal. 12 Nov. 28, 2012). 13 Defendant also argues that plaintiff’s choice of forum is entitled to less weight 14 because it is “anticipatory.” See Dkt. 12 at 19 (citing Z-Line Designs, Inc. v. Bell’O 15 Intern., LLC, 218 F.R.D. 663, 665 (N.D. Cal. 2003). However, in Z-Line, the court held 16 plaintiff’s suit was anticipatory only after concluding that the plaintiff had made a 17 “misleading communication” to defendant and “created a reasonable expectation that [it] 18 would explore settlement rather than litigation.” 218 F.R.D. at 666. Those facts are 19 distinguishable from the present case. 20 In this instance, the general rule applies; there is a “strong presumption” in favor of 21 plaintiff’s choice of forum, “which may be overcome only when the private and public 22 interest factors clearly point towards trial in the alternative forum.” Piper Aircraft Co. v. 23 Reyno, 454 U.S. 235, 255 (1981). This factor weighs against transfer. 24 ii. Convenience of the Parties and Witnesses 25 With respect to convenience of the witnesses, “[t]he relative convenience to the 26 witnesses is often recognized as the most important factor to be considered in ruling on a 27 motion under section 1404(a).” Saleh v. Titan Corp., 361 F. Supp. 2d 1152, 1160 (S.D. 1 a factor to be considered, the convenience of non-party witnesses is the more important 2 factor.’” Id. (alteration in original) (quoting Aquatic Amusement Assocs., Ltd. v. Walt 3 Disney World Co., 734 F. Supp. 54, 57 (N.D.N.Y. 1990)). “In determining whether this 4 factor weighs in favor of transfer, the court must consider not simply how many witnesses 5 each side has and location of each, but, rather, the court must consider the importance of 6 the witnesses.” Saleh at 1160–61 (citations omitted). In establishing inconvenience to 7 witnesses, the moving party must name the witnesses, state their location, and explain 8 their testimony and its relevance. Carolina Cas. Co. v. Data Broad. Corp., 158 F. Supp. 9 2d 1044, 1049 (N.D. Cal. 2001) (citation omitted). 10 Here, defendant argues that it is located in the Central District of California, and 11 that non-party witness VaporDNA’s employees are also located in the Central District of 12 California. Dkt. 18 at 14. However, while defendant refers generally to VaporDNA and 13 its employees, it does not list with any specificity the identity of any non-party witnesses 14 or the relevance of their anticipated testimony. 15 Moreover, as discussed above, it appears that the gravamen of this lawsuit is the 16 alleged trademark infringement by plaintiff. The testimony of non-party VaporDNA is not 17 relevant to the trademark dispute, and is instead relevant only to the tort causes of action 18 that are dependent upon the outcome of the trademark dispute. 19 Overall, while defendant does refer generally to non-party VaporDNA and its 20 employees as witnesses located in the Central District of California, defendant has not 21 adequately explained the non-party witnesses’ testimony and its relevance, so this factor 22 favors transfer only slightly. 23 iii. Other Factors 24 Next, as to ease of access to the evidence, defendant acknowledges that the 25 physical location of the evidence is a minor factor. Dkt. 12 at 21; see also Byler v. Deluxe 26 Corp., 222 F. Supp. 3d 885, 906–07 (S.D. Cal. 2016) (“Ease of access to evidence is 27 generally not a predominate concern in evaluating whether to transfer venue because 1 locations.”) (internal quotation omitted). Accordingly, this factor does not favor transfer. 2 Defendant states that the next two factors – familiarity of each forum with the 3 applicable law, and the feasibility of consolidation with other claims – do not weigh for or 4 against transfer. Dkt. 12 at 21. The court agrees. 5 Defendant argues that the Central District of California has a “strong interest” in 6 adjudicating this case because defendant’s principal place of business is in the district, 7 and because “plaintiff’s claims arise from events taking place in the Central District.” Dkt. 8 12 at 21. However, as discussed above in the context of the section 1391(b)(2) venue 9 analysis, a “substantial part of the events” giving rise to this suit occurred in the Northern 10 District. Accordingly, the court finds that this factor does not weigh for or against transfer. 11 With regard to court congestion, defendant states that “this factor does not weigh 12 for or against transfer,” and the court agrees. 13 In sum, defendant has not made a “strong showing of inconvenience to warrant 14 upsetting the plaintiff’s choice of forum.” PRG-Schultz USA, Inc. v. Gottschalks, Inc., 15 2005 WL 2649206, at *4 (N.D. Cal. Oct. 17, 2005) (quoting Decker Coal, 805 F.2d at 16 843). Defendant’s motion to transfer venue pursuant to 28 U.S.C. § 1404(a) is DENIED. 17 CONCLUSION 18 For the foregoing reasons, defendant’s motion to dismiss is DENIED and 19 defendant’s motion to transfer is DENIED. 20 IT IS SO ORDERED. 21 Dated: November 23, 2020 22 /s/ Phyllis J. Hamilton PHYLLIS J. HAMILTON 23 United States District Judge 24 25 26 27