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NS412 LLC v. Finch

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

September 11, 2019

NS412, LLC and NATURALLY SLIM, INC.
v.
CHANTEL RAY FINCH a/k/a CHANTEL RAY

          MEMORANDUM OPINION AND ORDER

          KAREN GREN SCHOLER, UNITED STATES DISTRICT JUDGE

         This Order addresses Defendant Chantel Ray Finch's ("Defendant") Motion to Dismiss or, in the Alternative, Transfer Venue [ECF No. 7], For the reasons stated below, the Court denies the Motion.

         I. BACKGROUND

         Plaintiffs NS412 LLC and Naturally Slim, Inc. ("Plaintiffs"), along with their affiliates, provide a behavioral-based nutritional intervention program under the mark NATURALLY SLIM® ("NS Program"). Compl. ¶ 1. The NS Program is a technology-based, modeled behavior program that is designed and administered by experienced professionals, Id., ¶ 15. The NS Program includes video lessons and digital materials that are available to users online via a secure login. Id. ¶ 16.

         Plaintiffs own 79 copyright registrations and have 117 pending applications for copyright registrations for the NS Program materials. Id. ¶ 18. They also own 14 federal trademark registrations used in connection with the NS Program. Id. Plaintiffs and their affiliates require users of the program to agree, both upon registration and prior to viewing each video, that their access to the NS Program is for personal use only and that they will not share the contents with nonusers, Id. ¶ 17. A person who desires to participate in the NS Program must create an account. Resp. to Mot. to Dismiss ("Resp.") ¶ 5. When a person registers for the NS Program, he or she is presented with certain "Legal and Release Forms." Id., ¶ 6. That person must agree to each item by clicking a box. Id. After clicking all of the boxes and entering an electronic signature, he or she can access a list of program materials, Id. ¶ 8. However, before the person can watch a video, he or she is presented with a two-paragraph "Acknowledgement" and must click "Agree" yet again. Id.

         In August 2018, Plaintiffs received an email from a user of the NS Program. Compl. ¶ 2. That person alerted Plaintiffs to a book titled Waist Away the Chantel Ray Way ("Book") and said the Book was "in many ways very much identical" to the NS Program. Id. (emphasis omitted). Soon after, Plaintiffs learned that Defendant, the author and self-publisher of the Book, was a registered user of the NS Program. Id. ¶ 3. Defendant became a user of the NS Program on or about September 27, 2017. Id. ¶ 19. According to Plaintiffs, Defendant "contractually agreed to the restrictions placed on each [u]ser pertaining to access to and use of the NS Program." Id. ¶ 20. Plaintiffs purchased the Book and "realized that it was substantially similar to the NS Program and even used certain of Naturally Slim, Inc.'s federally registered trademarks." Id. ¶ 4.

         Based on the foregoing allegations, Plaintiffs bring causes of action for breach of contract, fraud in the inducement, copyright infringement, and unfair competition. Defendant moves to dismiss the Complaint, arguing that this Court does not have personal jurisdiction over her. In the alternative, Defendant requests that the Court either dismiss the Complaint for improper venue or transfer the action to the Eastern District of Virginia.

         II. ANALYSIS

         A. Personal Jurisdiction

         i. Validity of Forum Selection Clause

         Defendant argues that the Court lacks personal jurisdiction over her. The plaintiff bears the burden of making a prima facie showing that a court has personal jurisdiction over a defendant. Monkton Ins. Servs., ltd. v. Ritter, 768 F.3d 429, 431 (5th Cir. 2014). In considering a motion to dismiss pursuant to Rule 12(b)(2), the court must accept the plaintiffs "uncontroverted allegations, and resolve in its favor all conflicts." Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000). The court may consider "affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery." Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985) (citation omitted).

         Plaintiffs contend that Defendant is bound by a forum selection clause contained in the NS Program's Terms and Conditions and that the clause "is dispositive of [Defendant's] challenges to personal jurisdiction and venue." Resp. \;see also CDx Holdings, Inc. v. Goldenson, Civ. A. No. 3:12-CV-394-N-BH, 2012 WL 13018985, at *6 (N.D. Tex. Oct. 26, 2012) ("Personal jurisdiction is subject to waiver. A common method of waiver is a contractual forum selection clause." (citation omitted)). Because the forum selection clause, if applicable and enforceable, would foreclose Defendant from challenging personal jurisdiction, [1] the Court will analyze the validity of the clause first. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 589 (1991) ("Because we find the forum selection clause to be dispositive of th[e] question, we need not consider petitioner's constitutional argument as to personal jurisdiction," (citation omitted)).

         Contained within the NS Program's Terms and Conditions is the following forum selection clause:

This Agreement shall be construed in accordance with the laws of the State of Texas, without regard to any conflict of law provisions. Any dispute arising under this Agreement shall be resolved exclusively by the state ...

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