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Springboards to Education Inc. v. Families In Schools

United States District Court, N.D. Texas, Dallas Division

November 15, 2017

SPRINGBOARDS TO EDUCATION, INC., Plaintiff,
v.
FAMILIES IN SCHOOLS, Defendant.

          MEMORANDUM OPINION AND ORDER

          SIDNEY A. FITZWATER, UNITED STATES DISTRICT JUDGE.

         In this suit for trademark infringement and related claims, defendant moves to dismiss for lack of personal jurisdiction, or, alternatively, to transfer the case to the Central District of California. This case presents a wrinkle in that the court has already determined in the default-judgment context that plaintiff has established that the court has personal jurisdiction based on defendant's operation of its website. But in the present, non-default-judgment context, and for the reasons that follow, the court holds that it lacks personal jurisdiction and grants defendant's alternative motion to transfer this case to the Central District of California, Western Division, pursuant to 28 U.S.C. § 1406(a).

         I

         This dispute stems from the use of the name “Million Word Challenge.” Plaintiff Springboards to Education, Inc. (“Springboards”) designs, markets, and sells reading and related educational products under the Springboard brand and its associated federally-registered trademarks, including the trademarks “Millionaire Reader, ” “Million Dollar Reader, ” “Millionaire's Reading Club, ” and “Read A Million Words.” Defendant Families In Schools (“FIS”) is a California nonprofit organization whose mission is to involve parents and communities in their children's education, targeting low-income communities and communities of color through programs such as, inter alia, the “Million Word Challenge, ” which it maintains is a public awareness campaign “developed in 2002 in response to a lack of access to bookstores and libraries in Los Angeles' low-income communities.” D. Br. 4. FIS contends that, although some of its workshops and programs are offered outside California, the Million Word Challenge was designed for implementation solely in the Los Angeles County schools, and that only a single participant-Andre Agassi College Preparatory Academy in Las Vegas, Nevada-has come from outside the state of California.

         In this lawsuit, Springboards sues FIS for trademark counterfeiting, under 15 U.S.C. § 1114; trademark infringement, under 15 U.S.C. § 1114; false designations of origin false descriptions, under 15 U.S.C. § 1125(a); trademark dilution, under 15 U.S.C. § 1125(e); violation of the Texas anti-dilution statute, Tex. Bus. & Com. Code Ann. § 16.103; common law trademark infringement; and common law unfair competition. Springboards alleges, inter alia, that “[t]his Court has personal jurisdiction over Defendant by way of the Texas long-arm statute because Defendant transacts a sufficient amount of business in Texas throughout the use of its interactive website and promotional materials.” Compl. ¶ 10.

         Springboards served FIS with process in October 2016. After FIS failed to answer or otherwise respond to Springboards' complaint, Springboards requested entry of a default and moved for a default judgment. In April 2017 the court held a hearing on Springboards' motion. FIS did not appear.[1] During the hearing, Springboards' counsel presented evidence on the issue of personal jurisdiction, [2] and the court held, in pertinent part:

plaintiff has proved specific in personam jurisdiction by a preponderance of the evidence based upon the witness's testimony that establishes the presence of the interactive website in Texas and that itself contains infringing material. . . . The Fifth Circuit when analyzing in personam jurisdiction based on a website uses a sliding scale that originated in the Zippo case . . . and the nature of this website is sufficient to establish specific jurisdiction, and that is supported by the evidence of the way the website works in relation to a person known to be in Texas and the content of the website which contains infringing material.

         Hrg. Tr. 38. Based on these findings and conclusions, the court entered a default judgment against FIS.

         Thereafter, FIS filed, inter alia, a motion to vacate default judgment. After conducting a hearing on the motion, the court entered an order stating that it would set aside the default judgment on the condition that FIS first pay to Springboards its reasonable attorney's fees and costs incurred in obtaining the default judgment and opposing FIS's post-judgment motions. The court also stated that, “[a]fter the default judgment is set aside, FIS will be permitted to file a timely responsive pleading. The responsive pleading may challenge the court's exercise of personal jurisdiction over FIS, and Springboards' response may assert that FIS has waived its challenge to the court's exercise of personal jurisdiction.” July 6, 2017 Am. Order at 2. The court later entered an order recognizing that FIS had satisfied the court-imposed condition for setting aside and vacating the default judgment.

         FIS now moves to dismiss this action under Fed.R.Civ.P. 12(b)(2) on the ground that the reach of the “Million Word Challenge” is intended to go no farther than Los Angeles County, California, and that Springboards cannot make a prima facie showing that FIS purposefully directed its activities at residents of Texas or that this lawsuit is the result of alleged injuries that arose out of, or are related to, the use of the “Million Word Challenge, ” as directed to the state of Texas. FIS moves in the alternative to transfer this lawsuit to the United States District Court for the Central District of California.

         II

         The court must first determine whether it can exercise personal jurisdiction over FIS.

         The Lanham Act does not authorize nationwide service of process. See, e.g., Tempur-Pedic Int'l, Inc. v. Go Satellite Inc., 758 F.Supp.2d 366, 371 (N.D. Tex. 2010) (Fitzwater, C.J.). Accordingly, absent a controlling federal statute regarding service of process, the determination whether a federal district court has in personam jurisdiction over a nonresident defendant is bipartite. See Ham v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir. 1993). The court first decides whether the long-arm statute of the state in which it sits confers personal jurisdiction over the defendant. If it does, the court next resolves whether the exercise of personal jurisdiction is consistent with due process under the United States Constitution. See Mink v. AAAA Dev. LLC, 190 F.3d 333, 335 (5th Cir. 1999).

         Because the Texas long-arm statute extends to the limits of due process, the court need only consider whether exercising jurisdiction over FIS would be consistent with the Due Process Clause of the Fourteenth Amendment. See id.; see also Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 214 (5th Cir. 2000).

The Due Process Clause of the Fourteenth Amendment permits the exercise of personal jurisdiction over a nonresident defendant when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing “minimum contacts” with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend “traditional notions of fair play and substantial justice.” To comport with due process, the defendant's conduct in connection with the forum state must be such that he “should reasonably anticipate being haled into court” in the forum state.

Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999) (footnotes omitted) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).[3]

         A defendant's contacts with the forum may support either specific or general jurisdiction over the defendant. Mink, 190 F.3d at 336. For the court to properly exercise specific personal jurisdiction, the defendant must have “purposefully directed” its activities at residents of the forum, and the litigation must result from alleged injuries that “arise out of or relate to” the defendant's activities directed at the forum. Archer & White, Inc. v. Tishler, 2003 ...


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