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International Mulch Company, Inc. v. Novel Ideas, Inc.

United States District Court, E.D. Missouri, Eastern Division

December 2, 2014

INTERNATIONAL MULCH COMPANY, INC., Plaintiff,
v.
NOVEL IDEAS, INC., JOHN S. WINK, and SOUTH BEND MODERN MOLDING, INC., Defendants.

MEMORANDUM AND ORDER

RONNIE L. WHITE, District Judge.

This matter is before the Court on Defendants' Motion to Dismiss or Transfer Venue (ECF No. 41).[1] The motion is fully briefed and ready for disposition. For the reasons set forth below, the Court will grant Defendants' motion.

Background

On March 11, 2014, Plaintiff IMC filed a four count Complaint for Declaratory Judgment against Defendant Novel Ideas, Inc. ("Novel"), seeking in Counts I and III a declaration of non-infringement of two landscape edging patents, U.S. Patent Nos. D649, 268 and D654, 191, held by Novel and John S. Wink. (Compl., ECF No. 1) IMC also sought a declaration that the patents at issue were invalid in Counts II and IV. ( Id. ) IMC filed an Amended Complaint on June 16, 2014, adding John S. Wink ("Wink"), the inventor of the patented landscaping products, and South Bend Modern Molding, Inc. ("Modern Molding"). (First Am. Compl., ECF No. 14). In addition, IMC alleged breach of contract (Count V) and tortious interference with business expectancy (Count VI). ( Id. ) On September 11, 2014, the Court granted IMC's Motion for Leave to File its Second Amended Complaint, wherein IMC provided additional facts. (Second Am. Compl., ECF No. 39)

In its Second Amended Complaint, IMC alleges that Defendants Novel and Wink are located in Tampa, Florida. ( Id. at ¶¶ 2-3) Defendant Modern Molding is an Indiana corporation located in Mishawaka, Indiana. ( Id. at ¶ 4) Plaintiff further asserts that jurisdiction in this Court is proper because Novel and Modern Molding do substantial business in this District, Novel contracted to sell its assets to IMC in this District, and Wink and Modern Molding tortuously interfered with IMC's contract and/or business expectancy in this District. ( Id. at ¶¶ 8-10) IMC also contends that venue is proper because one or more Defendants engage in significant business activity in this District. ( Id. at 11)

According to IMC's complaint, Wink invented flexible landscape edging and obtained two patents, the 268 Patent and the 191 Patent, and he assigned the title and interest in those patents to Novel. ( Id. at ¶¶ 12-13) Plaintiff IMC began selling a lawn edging to Lowe's, which Defendants Novel and Wink contend infringes on the patents. ( Id. at ¶¶ 14-15) IMC disputes that its product infringes, as IMC alleges the ornamental design of the edging differs from the design claimed by the 268 and 191 Patents. ( Id. at ¶¶ 16-17) Additionally, IMC maintains that it had been in negotiations to purchase Novel's assets for several months prior to infringement communications from Novel and Wink. ( Id. at ¶ 19) IMC alleges that it negotiated with Novel agreed in principle to terms which were summarized in drafts of a letter of intent. ( Id. at ¶¶ 20-25) However, Wink expressed to IMC that he and Novel would not honor the letter of intent. ( Id. at ¶¶ 28-29) IMC argues that the emails and letter of intent formed a valid contract, which Defendants Novel and Wink breached when they negotiated with Modern Molding. ( Id. at ¶¶ 51-52) In addition, IMC contends that Wink and Modern Molding intentionally interfered with and caused Novel to breach the contact by negotiating a separate contract to purchase Novel's assets. ( Id. at ¶ 61)

On September 29, 2014, Defendants Novel and Wink filed a Motion to Dismiss or Transfer Venue, claiming that the case should be dismissed for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2), and the case should be dismissed under Fed.R.Civ.P. 12(b)(3) for improper venue or transferred to the Middle District of Florida. (Mot. to Dismiss, ECF No. 41) Further, Defendants contend that Counts V and VI should be dismissed under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. ( Id. )

II. Legal Standards

"To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff has the burden of making a prima facie showing that personal jurisdiction exists." Riceland Foods, Inc. v. SCF Marine, Inc., No. 4:09CV830 CDP, 2009 WL 2928764, at *2 (E.D. Mo. Sept. 9, 2009) (citation omitted). The court views the evidence in the light most favorable to the plaintiff and determines factual conflicts in favor of the plaintiff. Id. (citation omitted). However, a plaintiff must produce some evidence, and conclusory allegations are insufficient to make a prima facie case. Id. (citation omitted). "The plaintiff's prima facie showing must be tested, not by the pleadings alone, but by the affidavits and exhibits presented with the motion[ ] and in opposition thereto." Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004) (citation and internal quotations omitted). The party seeking to establish personal jurisdiction carries the burden of proof, and this burden does not shift to the party challenging jurisdiction. Riceland Foods, 2009 WL 2928764, at *2 (citation omitted). "While the plaintiffs bear the ultimate burden of proof, jurisdiction need not be proved by a preponderance of the evidence until trial or until the court holds an evidentiary hearing." Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003) (citations omitted).

To determine whether personal jurisdiction exists, the forum state's long-arm statute must be satisfied, and the exercise of personal jurisdiction must be consistent with due process. Wells Dairy, Inc. v. Food Movers Int'l, Inc., 607 F.3d 515, 518 (8th Cir. 2010) (citation omitted). "In its most recent decision involving a question of personal jurisdiction, the Missouri Supreme Court held it was necessary to conduct two separate inquiries: one inquiry to establish if a defendant's conduct was covered by the long-arm statute, and a second inquiry to analyze whether the exercise of jurisdiction comports with due process requirements." Myers v. Casino Queen, Inc., 689 F.3d 904, 909 (8th Cir. 2012) (citing Bryant v. Smith Interior Design Grp., Inc., 310 S.W.3d 227, 231 (Mo. 2010).

Under Missouri's Long Arm Statute:

Any person or firm, whether or not a citizen or resident of this state, or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such person, firm, or corporation, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of such acts:
(1) The transaction of any business within ...

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