Page 1
Ninth Circuit:
District Court in California Has Jurisdiction Based on Texan’s Past Residency Here
Judge VanDyke Pens
By a MetNews Staff Writer
|
|
|
Above is Impossible X’s trademark. |
The Ninth U.S. Circuit Court of Appeals, in a 2-1 decision, held yesterday—over a stern dissent by Judge Lawrence VanDyke—that the District Court for the Northern District of California has jurisdiction in an action against a one-man Austin, Texas company because that company operated largely out of San Diego from 2014-16.
Impossible Foods, which makes and markets plant-based meat substitutes such as the “Impossible burger” brought an action seeking a declaration that its use of the word “IMPOSSIBLE,” in all capital letters, on which it has a federally registered trademark, does not infringe on Impossible X’s federal registered “IMPOSSIBLE” trademarks. Impossible Foods is a Delaware corporation headquartered in California’s Redwood City.
Impossible X, run by Joel Runyon, sells goods and consulting services online. Its products include nutritional aids, apparel, books, and a sleeping aid.
District Court’s Decision
District Court Judge Beth Labson Freeman of the Northern District of California on Nov. 16, 2021, dismissed Impossible Foods’s action, without prejudice to being filed elsewhere, for lack of personal jurisdiction. Designating Impossible X “IX,” she said:
“Impossible has not met its burden to show that IX purposefully availed itself of this forum and that IX’s relevant forum-related contacts arise out of Impossible’s claims in this lawsuit. This Court thus lacks personal jurisdiction over IX.”
Reversal came in an opinion by Ninth Circuit Judge Daniel Aaron Bress, joined in by Tenth Circuit Judge Carlos F. Lucero, sitting by designation.
Bress’s Opinion
Bress wrote:
“We hold that Impossible X’s brand-building activities in California since 2014 are sufficiently related to the instant trademark dispute to confer personal jurisdiction. Impossible X purposefully directed its activities toward California and availed itself of the privileges of conducting activities there by building its brand and working to establish trademark rights there.”
He continued:
“Impossible Foods’ declaratory judgment action ‘arises out of or relates to’ impossible X’s conduct in California because its trademark building activities form the basis of the contested trademark rights—rights which Impossible X broadly asserted in the [Trademark Trial and Appeal Board] opposition that triggered this action. Finally, there is nothing unreasonable about requiring Impossible X to defend a lawsuit based on its trademark building activities in the state that was its ‘headquarters’ and Runyon’s ‘home base,’ and that continued to be a business destination for Runyon and Impossible X.”
VanDyke’s Dissent
In his dissent, VanDyke maintained that Impossible X, in proceedings before the Trademark Trial and Appeal Board, waived the contention that its brand-building activities in California satisfied the requirement for jurisdiction and relied on its enforcement activities in California. Aside from the matter of waiver, said in his dissent:
“The majority doesn’t rely exclusively on Impossible X’s past brand-building activities in California, though. It repeatedly references that Impossible X and its owner used to be ‘based in California.’ Indeed, the reason Impossible X had ‘brand-building’ activities in California during that time is because, as the majority observes, that is where owner ‘Runyon—and by extension. Impossible X’—was spending much of his time.
“But the majority’s reliance on the existence of past general jurisdiction over Impossible X in California as a reason to find specific jurisdiction in this case is without precedent. It is also potentially the most radical reimagining and expansion of specific jurisdiction in decades. Many corporations change their state of incorporation or principal place of business sometime during their lifecycle. For instance. Mark Zuckerburg first launched Facebook from his Harvard dorm in Massachusetts and first incorporated it in Florida before decamping for the company’s current headquarters in California. Under the majority’s use of past general jurisdiction to bolster current specific jurisdiction. Massachusetts and Florida could now effectively exercise a form of specific jurisdiction over any of the social media giant’s global operations. The majority seems at least faintly aware that its theory has no objective limiting principle, and it does not meaningfully try to offer one….”
VanDyke charged that the majority “has created a novel jurisdictional rule that is either breathtaking in scope (if you rely on the majority’s rationale) or hopelessly ambiguous (if you take seriously the majority’s multiple disclaimers).”
Majority’s Rejoinder
Bress responded:
“[I]t is hardly novel to say that a company that operated from California for years availed itself of that state’s privileges and directed its activities there. The dissent’s hyperbolic assertion that we have engaged in ‘potentially the most radical reimagining and expansion of specific jurisdiction in decades’ is obviously false.”
He disputed VanDyke’s detection of a waiver.
The case is Impossible Foods v. Impossible X, 21-16977.
Copyright 2023, Metropolitan News Company