Scott v. Domus Constr. & Design

ORDER DENYING DEFENDANT'S MOTION TO DISMISS THE COMPLAINT AND/OR TRANSFER VENUE PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(B)(3) AND 28 U.S.C. § 1406 [ECF NOS. 5, 7, 8, 9]

HON. ROGER T. BENITEZ, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

Plaintiff SEAN SCOTT, an individual (“Plaintiff”) brings this copyright infringement action against Defendant DOMUS CONSTRUCTION AND DESIGN, INC., d/b/a STATEWIDE, a California corporation (“Defendant”). ECF No. 1. Before the Court is Defendant's Motion to Dismiss the Complaint and/or Transfer Venue Pursuant to Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406 (the “Motion”). ECF No. 5. The Motion was submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1) and Rule 78(b) of the Federal Rules of Civil Procedure. ECF No. 9. After considering the papers submitted, supporting documentation, and applicable law, the Court DENIES Defendant's Motion.

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II. BACKGROUND

A. Statement of Facts^[1]

Plaintiff alleges that on November 1, 2010, he first published his original inventory template, entitled “The Red Guide to Recovery-Personal Property Memory Jogger” (the “Memory Jogger”). ECF No. 1 at 2, ^[2] ¶ 1. The Memory Jogger consists of a pre-populated spreadsheet created by Plaintiff, based upon his decades of experience in the construction and restoration industry, and serves to assist people whose homes have been damaged or destroyed by natural disasters. Id.

On February 24, 2011, the copyright for the Memory Jogger was registered with the United States Copyright Office. ECF No. 1 at 2, ¶ 1; see also ECF No. 1-3 at 1 (showing Copyright Registration No. TX7-371-629 for the original Memory Jogger). On January 20, 2012, Plaintiff published the second version of the Memory Jogger, entitled “The Personal Property Memory Jogger & Home Inventory Tool.” Id. On March 7, 2012, he registered the copyright for this second version of the Memory Jogger. Id.; see also ECF No. 1-3 at 1 (showing Copyright Registration No. TX7-515-022 for the second version of the Memory Jogger).

Shortly after Plaintiff published the Memory Jogger, he created a website https://www.TheRedGuidetoRecovery.com, dedicated to the sale and marketing of his disaster recovery manual, “The Red Guide to Recovery - Resource Handbook for Disaster Survivors” (the “Red Guide”), and associated products. ECF No. 1 at 2, ¶ 2; see also ECF No. 8 at 6:9-14. Initially, Plaintiff offered the Memory Jogger for free on his website for about one year as a promotional tool to draw customers. ECF No. 1 at 2, ¶ 2. Afterwards, he only offered the Memory Jogger for free with the purchase of the Red Guide or for homeowners who lost their homes due to certain wildfires. Id. at 2-3, ¶ 3.

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After the initial promotional period, Plaintiff began selling the Memory Jogger for $99.95 on his website. ECF No. 1 at 3, ¶ 3. In approximately 2017, Plaintiff reduced the price to $49.95, as sales were lower than expected. Id. However, for the next two years, sales continued to remain low. Id. Around March 2020, in an attempt to determine why he was not selling the Memory Jogger, Plaintiff conducted a Google search using the Memory Jogger's title. Id. During this investigation, Plaintiff learned that Defendant, a general contractor also specializing in the restoration and repair of residential and commercial properties damaged due to fire, was giving away the Memory Jogger for free on its website, https://www.gostatewide.com, using the exact same title, “The Personal Property Memory Jogger & Home Inventory Tool, ” while claiming Plaintiff's work as its own. Id. (citing Exhibit “A” to Complaint); see also ECF No. 8 at 7:1-9. Any visitor to Defendant's website who entered an e-mail address would receive the Memory Jogger. ECF No. 1 at 3, ¶ 3. Defendant also encouraged visitors to “share” the webpage offering the Memory Jogger with their friends, providing a link which would allow them to generate a post on their own Facebook pages. Id. As of March 4, 2020, the link to Defendant's webpage had been shared on Facebook on at least 265 occasions. Id. at 3-4, ¶ 3. Plaintiff's investigation also led him to Defendant's Facebook page, where he discovered that Defendant was holding seminars for wildfire victims and providing the Memory Jogger for “free” to promote their events and as an inducement to generate sales. ECF No. 1 at 4, ¶ 4. Once Facebook users attempted to register for one of Defendant's seminars through the website https://www.eventbrite.com, the event details directed them to Defendant's webpage to download the Memory Jogger for free. Id. (citing Exhibit “B” to Complaint). According to the available information, Defendant held at least three separate events on December 18, 2018, January 12, 2019, and February 23, 2019, for which it offered the Memory Jogger for free in order to promote the events. Id.

The Complaint pleads that Defendant's infringing activity severely diminished the Memory Jogger's marketability and deprived Plaintiff of sales profits as well as his own use of the Memory Jogger as a promotional tool for the Red Guide and other products

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offered on his website. ECF No. 1 at 4-5, ¶ 5. Meanwhile, Plaintiff alleges that Defendant gained profit from clients and construction projects obtained through its use and claim of ownership of Plaintiff's work as a “free” marketing tool on its own website and in connection with its seminars. Id. Plaintiff alleges that he is a California resident who is domiciled in San Diego County, California, while Defendant is a California corporation with a principal office in Sacramento, California. ECF No. 1 at 5, ¶¶ 7-8; ECF No. 5 at 2:2-5.

B. Procedural History

On April 12, 2021, Plaintiff filed this lawsuit alleging two counts of copyright infringement. ECF No. 1.

On April 26, 2021, Plaintiff served Defendant with the Complaint, ECF No. 4, meaning Defendant's responsive pleading was due by May 17, 2021. Fed.R.Civ.P. 12(a).

On July 13, 2021, Defendant filed the instant Motion. ECF No. 5. On August 2, 2021, Plaintiff opposed. ECF No. 7. On August 9, 2021, Defendant replied. ECF No. 8.

III. LEGAL STANDARD

“‘[V]enue' refers to the geographic specification of the proper court … for the litigation of a civil action that is within the subject-matter jurisdiction of the district courts in general.” 28 U.S.C. § 1390(a). In copyright cases, venue is proper “in the district in which the defendant or his agent resides or may be found.” See 28 U.S.C. § 1400(a). However, as to the residency of corporate entities, they are deemed to reside “in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question.” 28 U.S.C. § 1391(2) (emphasis added). Further, in states with more than one judicial district, like California, the corporate defendant is “deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts.” 28 U.S.C. § 1391(d) (emphasis added).

A defendant may raise the defense of improper venue by moving to dismiss under

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Federal Rule of Civil Procedure 12(b)(3) (“Rule 12(b)(3)”). A defendant may also challenge venue pursuant to 28 U.S.C. § 1406(a), which provides that “[t]he district court of a district in which … a case laying venue in the wrong division or district [is filed] shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” Once a defendant challenges venue, the plaintiff bears the burden of showing venue is proper. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). “Unlike a Rule 12(b)(6) motion, a motion under Rule 12(b)(3) does not require that the pleadings be accepted as true.” Color Switch LLC v. Fortafy Games DMCC, 377 F.Supp.3d 1075, 1082 (E.D. Cal. 2019), aff'd, 818 Fed.Appx. 694 (9th Cir. 2020). “The court is permitted to consider facts outside of the pleading.” Id. When venue where the plaintiff originally filed suit was improper, 28 U.S.C. § 1406 allows a district court to either (1) transfer the case to another federal district court or (2) dismiss the case. If the court determines it lacks personal jurisdiction, 28 U.S.C. § 1631 likewise allows the court to either dismiss the case, or in the interests of justice, transfer it “to any other such court . . . in which the action . . . could have been brought at the time it was filed.” See also Fitbit, Inc. v. Koninklijke Philips N.V., 336 F.R.D. 574, 586-87 (N.D. Cal. 2020) (“Where personal jurisdiction is lacking, courts within this district have variously transferred actions under 28 U.S.C. § 1406(a) or 28 U.S.C. § 1631.”).

IV. DISCUSSION

Defendant moves to dismiss Plaintiff's claims for improper venue pursuant to Rule 12(b)(3) and 28 U.S.C. § 1406. As stated, in copyright cases, venue is proper “in the district in which the defendant or his agent resides or may be found.” 28 U.S.C. § 1400(a). Plaintiff admits that Defendant has its principal office in Sacramento, California, ECF No. 1 at 5, ¶¶ 7-8, which would suggest venue should be in the Eastern District of California (the “Eastern District”). However, “[t]he Ninth Circuit interprets this statutory provision to allow venue ‘in any judicial district in which the defendant would be amenable to personal jurisdiction if the district were a separate state.'” Brayton Purcell LLP v. Recordon &...