Good Clean Love, Inc. v. Epoch NE Corp.

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GOOD CLEAN LOVE, INC.; VAGINAL BIOME SCIENCE, INC., Plaintiffs, v. EPOCH NE CORPORATION; LAWRENCE LUO, Defendants.

Civ. No. 6:21-cv-01294-AA

United States District Court, D. Oregon, Eugene Division

March 30, 2023

OPINION & ORDER

Ann Aiken United States District Judge

This case comes before the Court on Defendants' Motion to Dismiss for Lack of Jurisdiction and Failure to State a Claim, ECF No. 10, and Plaintiffs' Alternative Motion for Leave to Conduct Jurisdictional Discovery, ECF No. 24. The Court concludes that this matter is appropriate for resolution without a hearing. For the reasons set forth below, Defendants' motion is GRANTED in part and DENIED in part. Plaintiffs' Motion is DENIED as MOOT.

LEGAL STANDARDS

I. Motion to Dismiss for Lack of Jurisdiction

Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move for dismissal on the grounds that the court lacks personal jurisdiction. Plaintiff has the burden of showing personal jurisdiction. Boschetto v Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008).

If the district court decides the motion without an evidentiary hearing, which is the case here, then the plaintiff need only make a prima facie showing of the jurisdictional facts. Absent an evidentiary hearing this court only inquires into whether the plaintiff's pleadings and affidavits make a prima facie showing of personal jurisdiction. Uncontroverted allegations in the plaintiff's complaint must be taken as true. Conflicts between the parties over statements contained in affidavits must be resolved in the plaintiff's favor.

Boschetto, 539 F.3d at 1015 (internal quotation marks and citations omitted, alterations normalized).

“In diversity cases, the court looks to the law of the state in which it sits to determine whether it has personal jurisdiction over the non-resident defendant.” IPSL, LLC v. College of Mt. St. Vincent, 383 F.Supp.3d 1128, 1135 (D. Or. 2019); see also Boschetto, 539 F.3d at 1015 (“When no federal statute governs personal jurisdiction, the district court applies the law of the forum state.”).

Oregon Rule of Civil Procedure 4 governs personal jurisdiction issues in Oregon. Because Oregon's long-arm statute confers jurisdiction to the extent permitted by due process, Gray & Co. v. Firstenberg Mach. Co., Inc., 913 F.2d 758, 760 (9th Cir. 1990), the court may proceed directly to the federal due process analysis. See Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003) (when state long-arm statute reaches as far as the Due Process Clause, the court need only analyze whether the exercise of jurisdiction complies with due process).

To comport with due process, “the nonresident generally must 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.” Walden v. Fiore, 571 U.S. 277, 283 (2014) (internal quotation marks and citation omitted). The forum state may exercise either general or specific jurisdiction over a non-resident defendant. Boschetto, 539 F.3d at 1016.

II. Motion to Dismiss for Failure to State a Claim

To survive a motion to dismiss under the federal pleading standards, a pleading must contain a short and plain statement of the claim and allege “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While a pleading does not require “detailed factual allegations,” it needs more than “a formulaic recitation of the elements of a cause of action.” Iqbal, 556 U.S. at 677-78. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard . . . asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678. Legal conclusions without any supporting factual allegations do not need to be accepted as true. Id.

BACKGROUND

Plaintiffs Good Clean Love, Inc. (“Good Clean Love”) and Vaginal Biome Science, Inc. are Oregon corporations with their principal places of business in Eugene, Oregon. Compl. ¶¶ 7-8. ECF No. 1.

Defendant Epoch NE Corporation is a Washington corporation licensed and doing business in the State of Washington. Compl. ¶ 9. Defendant Lawrence Luo is a resident of the State of Washington and “is a registered Governor of defendant Epoch.” Id. at ¶ 10.

I. Plaintiffs' Products, Trademarks, and Trade Dress

Good Clean Love produces and distributes feminine hygiene products and organic personal lubricants, as well as oils and candles. Compl. ¶ 16. “Good Clean Love is a market leader in the organic intimate wellness space and is sold nationally and internationally in tens of thousands of stores,” as well as large online retailers such as Walmart.com, Amazon.com, and Target.com. Id. at ¶ 17. “Good Clean Love is unique in the feminine hygiene space for its delicately balanced lubricants and restorative gels, which rely on a proprietary chemical combination of proper pH balancing, synthetic lactic acids, and iso-osmolar ingredients, which mirrors natural vaginal lubrication and secretion.” Id. at ¶ 18. “Good Clean Love has researched and developed proprietary formulas for its products, including its Almost Naked® Lubricant,” which includes “racemic (essentially meaning equal) D- and L-lactic acid components, which together with proper pH balancing and iso-osmolality (chemical density), best mimic a healthy vaginal biome.” Id. at ¶ 30. Good Clean Love “has attracted substantial media attention” for its products. Id. at ¶¶ 18-20.

Good Clean Love conducts substantial marketing to advertise its brand and products and, in addition to its website, maintains social media accounts across multiple platforms which it uses to promote its products to tens of thousands of followers. Compl. ¶ 23. Good Clean Love has spent millions of dollars on marketing, including advertising, package design, and brand design. Id. at ¶ 24.

Good Clean Love uses packaging to “set [itself] apart in a crowded and competitive marketplace.” Compl. ¶ 25. “With some variations from product to product, Good Clean Love's packages, bottles, boxes, and tubes generally feature clean, bright green and/or bright blue coloring with simple block lettering and one word in cursive font,” which Plaintiffs identify as their Trade Dress. Id. at ¶ 25. “Previous iterations of Good Clean Love's Almost Naked® Personal Lubricant . . . feature any combination of bright green coloring with, simple white block lettering, a square with a notch cut from the bottom right corner framing the product's name, and/or silhouettes of birds in flight,” which Plaintiffs identify as their Almost Naked® Trade Dress. Id. at ¶ 26. Plaintiffs' Complaint includes images of the Trade Dress and the Almost Naked® Trade Dress.

Good Clean Love owns and has registered trademarks for “BiopHresh,” Registration No. 6024806, as a probiotic supplement for women's health, and for “Restore,” Registration No. 5517668, as a gel for use as a personal lubricant. Compl. ¶ 29.

Vaginal Biome Science owns the trademark for “Bio-Match,” Registration No. 5817530, as gel for use as personal lubricant. Id.

II. Lawrence Luo and the Distribution Agreement

In 2016, representatives of Good Clean Love met with Defendant Lawrence Luo at a trade show in Las Vegas, Nevada. Compl. ¶ 31. At the meeting, Luo represented “that he lived in China, had experience in the health and beauty industry, and was interested in assisting Good Clean Love's expansion into the Chinese market.” Id.

Good Clean Love sought to engage Luo to serve as Good Clean Love's distributor in the Chinese market. Compl. ¶ 32. On October 11, 2016, Luo agreed to serve as a distributor for Good Clean Love and on November 10, 2016, Epoch and Good Clean Love entered into a Distribution Agreement. Id. at ¶¶ 34; Compl. Ex. 2. Luo signed the Distribution Agreement on behalf of Epoch and his signature line lists his position as vice president. Compl. Ex. 2, at 17.

Plaintiffs allege “on information and belief” that Luo did not have the experience he represented to Good Clean Love during negotiations and that Luo agreed to serve as a distributor “for the purpose of obtaining Good Clean Love's confidential information, including product formulas and product samples, in order to unfairly compete and develop his own counterfeit brand of feminine hygiene products.” Compl. ¶ 33.

Between 2016 and 2019, Luo “struggled to establish Good Clean Love in the Chinese market” and “did not meet his target sales or obligations under the terms of the Agreement.” Compl. ¶ 42. Luo repeatedly complained to Good Clean Love that its products were arriving damaged and that Good Clean Love's products “were not getting good enough reviews for him to succeed.” Id. “Specifically, Luo reported that Good Clean Love's products were arriving to ‘grainy' or ‘sandy' in texture,” although no other distributors or customers reported similar issues. Id.

Pursuant to the Distribution Agreement, Good Clean Love sent Luo confidential and proprietary information, “including product formulas and ingredient lists, product certifications, market data, packing and design elements, and business development strategies developed by Good Clean Love over years of experience within the feminine hygiene and sexual wellness space.” Compl. ¶ 43. “Good Clean Love specifically provided Luo with details regarding its research and development of products that mimic healthy vaginal biomes, including through proper pH balancing racemic lactic acid blends, and iso-osmolar densities.” Id. ...