Future Motion, Inc. v. JW Batteries LLC

Background

Future Motion, Inc. markets and sells ONEWHEEL self-balancing motorized skateboards. The skateboards use processors and software to control functions and safety features, including communications between a battery-management processor and the skateboard’s main controller. According to Future Motion’s complaint, the controller prevents the motor from operating unless it receives information showing that the battery is safe, and it can take steps such as causing “pushback” when the skateboard approaches an unsafe condition.

Future Motion alleged that JW Batteries LLC sold the JWFFM Chip, a processor chip intended to bypass those safety and technological measures. Future Motion also alleged that JW sold JWXR stickers incorporating Future Motion’s stylized XR trademark and creating a false impression of affiliation, sponsorship, or approval. Future Motion asserted claims under the Copyright Act, the Computer Fraud and Abuse Act, and the Lanham Act.

JW moved to dismiss for lack of personal jurisdiction and improper venue. The court allowed supplemental jurisdictional briefing after Future Motion had an opportunity to conduct jurisdictional discovery.

Jurisdictional Evidence

The evidence showed that JW is a Texas corporation with its only physical location in Texas and no location in California. JW sold its products through its website and had no contractual relationship with anyone in California for sales or distribution. JW had shipped products to customers in 45 states, plus the District of Columbia, and to 10 jurisdictions outside the United States.

During the relevant periods, JW sold 570 relevant products, including chips and batteries, to California customers, averaging about 36 sales per month. Those sales represented about 17% of JW’s relevant-product sales and less than 19% of total sales by revenue. JW also sold 15 of 79 tracked stickers to people in California. JW identified two instances in which California customers sent products to JW for chip installation.

Future Motion showed that JW communicated with prospective and existing California customers, including for technical support. But the communications indicated that the customers contacted JW, rather than JW soliciting them, and there was no evidence that JW targeted California in its communications, website, or social-media activity.

Legal Standard

A motion to dismiss for lack of personal jurisdiction is brought under Federal Rule of Civil Procedure 12(b)(2). Personal jurisdiction is the court’s authority over a defendant. When there is no evidentiary hearing, the plaintiff must make a preliminary showing of facts supporting jurisdiction, and factual disputes are resolved in the plaintiff’s favor at this stage.

Because no federal statute supplied a different jurisdictional rule, the court applied California’s long-arm statute and federal due-process principles. The court considered specific jurisdiction, which can exist when a defendant purposefully conducts activities in the forum, the claim arises from or relates to those activities, and exercising jurisdiction would be reasonable.

For tort claims, the Ninth Circuit generally examines whether the defendant committed an intentional act expressly aimed at the forum state and caused harm the defendant knew was likely to be suffered there. The court emphasized that the analysis must focus on the defendant’s own contacts with California, not merely the defendant’s knowledge that the plaintiff had connections to California or suffered harm there.

Court’s Analysis

The court rejected Future Motion’s argument that JW’s alleged individualized targeting of Future Motion, including through the sticker and the chip’s name, was enough by itself. Under the Supreme Court’s decision in Walden v. Fiore and the Ninth Circuit’s decision in Axiom Foods, individualized targeting without additional California-directed conduct did not establish the required minimum contacts.

The court also found that JW’s communications with California customers did not establish express aiming at California. The communications did not show that JW solicited those customers or targeted California customers generally.

For sales, the court accepted for purposes of the motion Future Motion’s position that sales of chips, stickers, and related batteries should all be counted. Even so, the court found that approximately 36 relevant-product sales per month and about 17% of relevant-product sales to California did not establish jurisdiction. The evidence did not show that JW appealed specifically to a California audience or that California sales were disproportionately large compared with the national market.

The court distinguished cases involving much larger or specifically targeted forum-state markets. It concluded that, absent a large and regular volume of sales into California, there needed to be some evidence that JW targeted California in a way distinguishing it from other states. Because the sales volume was relatively low, the California share was not clearly disproportionate, and there was no evidence of specific targeting, the court held that California lacked specific jurisdiction over JW.

Disposition

The court granted JW’s motion to dismiss for lack of personal jurisdiction. Because it dismissed on that ground, it did not address JW’s additional argument that venue in the Northern District of California was improper. The court ordered the clerk to enter final judgment and close the case.