AirWair International Ltd. v. Fewstone Pty Ltd d/b/a City Beach

Background

AirWair International Ltd. alleged that Fewstone Pty Ltd., doing business as City Beach, infringed AirWair’s intellectual-property rights by marketing, distributing, offering for sale, and selling shoes that copied Dr. Martens’ trade dress. AirWair is a wholly owned subsidiary of Dr. Martens AirWair Group Ltd., a United Kingdom company. City Beach is an Australian company.

City Beach’s website accepted international orders, including orders priced in U.S. dollars and shipped to the United States. The website’s international sales system was operated through Borderfree, an Australian company. Borderfree received orders, bought the products from City Beach in Australia, took title to them domestically, and resold them to customers outside Australia. Between January 2017 and October 2019, Borderfree sold 17 accused products outside Australia, including seven to customers in the United States. Six of those sales were to AirWair’s counsel in California.

City Beach moved to dismiss the action for lack of personal jurisdiction. Although the motion cited the rule concerning failure to state a claim, the court treated it as a motion under Rule 12(b)(2), which addresses personal jurisdiction. AirWair conceded that the court lacked general personal jurisdiction over City Beach but argued that the court had specific personal jurisdiction in California. AirWair also argued alternatively for nationwide jurisdiction under Federal Rule of Civil Procedure 4(k)(2).

California Personal Jurisdiction

Specific personal jurisdiction requires a sufficient connection between the defendant, the forum, and the claims. Under the Ninth Circuit’s three-part test, the plaintiff must show that the defendant purposefully directed activities toward or purposefully conducted activities in the forum and that the claims arose from or related to those activities. If those requirements are met, the defendant must show that exercising jurisdiction would nevertheless be unreasonable.

The court held that AirWair had not shown purposeful direction toward California. AirWair did not allege that City Beach acted inside California, so it had to satisfy the effects test. That test requires an intentional act expressly aimed at California that caused harm the defendant knew was likely to occur there.

AirWair argued that City Beach used Borderfree as an instrument to sell products in the United States. The court rejected that theory because AirWair had not alleged that City Beach controlled Borderfree or had the right to substantially control Borderfree’s activities. The court also stated that, even if the seven United States sales through Borderfree could be attributed to City Beach, AirWair had not shown that those activities were expressly aimed at California. Because AirWair failed to establish purposeful direction, the court did not decide whether the claims arose from those activities.

The court further held that exercising jurisdiction would be unreasonable even if City Beach had purposefully directed its activities at California. Six of the seven fairness factors favored City Beach: the limited connection with California, the burden of defending there, California’s limited interest in a dispute between two foreign corporations, the location of likely witnesses and evidence, the convenience of enforcing an Australian judgment, and the availability of Australia as an alternative forum. The court found that only the factor concerning possible conflict with Australia’s sovereignty favored AirWair, and that AirWair had not shown that Australian courts were unavailable to provide trademark protection.

Nationwide Personal Jurisdiction

The court also rejected AirWair’s request for nationwide personal jurisdiction under Rule 4(k)(2). That rule requires a federal claim, a defendant not subject to jurisdiction in any state court of general jurisdiction, and an exercise of jurisdiction consistent with due process. The court said the due-process analysis was otherwise the same, except that the relevant forum was the entire United States.

The court found that AirWair’s allegations did not show contacts with the United States comparable to those in cases involving much greater nationwide activity. The undisputed record showed that only one accused product had been shipped to a state outside California. The court therefore held that it could not exercise nationwide jurisdiction over City Beach and found no facts supporting limited jurisdictional discovery.

Disposition

The court GRANTED City Beach’s motion to dismiss for lack of personal jurisdiction without leave to amend. The conclusion refers to granting “defendants’ motions,” although the case caption identifies Fewstone Pty Ltd. as the defendant. The order was entered by Judge Susan Illston.