Opinion
Civil Action 2:23-cv-00368
10-17-2023
DR. DOUG KNEUVEN, Plaintiff, v. LYSTEN, LLC and KEITH HILL, Defendants.
William S. Stickman District Judge
REPORT AND RECOMMENDATION ON DEFENDANT'S MOTIONS TO DISMISS
LISA PUPO LENIHAN UNITED STATES MAGISTRATE JUDGE
I. RECOMMENDATION
For the reasons set forth below, it is respectfully recommended that Defendant's Motions to Dismiss, ECF No. 24 and 25, be DENIED but that absent voluntary dismissal within twenty (20) days from the date of the Court's Order on this Report and Recommendation, the case be transferred sua sponte to our sister Court in the Eastern District of Pennsylvania, in which venue properly lies. See 28 U.S.C. § 1406(a).
II. PROCEDURAL HISTORY
Plaintiff, Dr. Doug Knueven, is a veterinarian who resides in Beaver Falls, Pennsylvania, i.e., in the Western District of Pennsylvania. Defendant Lysten, LLC, a Delaware limited liability corporation trading and doing business as Answers Pet Food, is a raw/natural pet food and products business with a registered address in Fleetwood, Pennsylvania, i.e., in the Eastern District of Pennsylvania. Said address is also the home/residence address of Defendant Keith Hill, the “managing member” of Lysten.
Plaintiff's initial Complaint was filed on March 6, 2023 and amended (in response to Defendants' first Motion to Dismiss) on May 16, 2023. ECF Nos. 1 and 11. The Amended Complaint collectively refers to Lysten and Hill as “Defendant”. It alleges that Plaintiff is “a nationally known veterinarian with an exemplary reputation” who “provides marketing resources” to companies and brands. Defendant retained Plaintiff as a freelance consultant, compensating him $500 per month for provision of a monthly blog article for use on Defendant's business website, which was accompanied by Plaintiff's image/likeness and professional information. Plaintiff further alleges that, by communications with Hill, Plaintiff terminated his services with Defendant in May, 2021 and directed Hill to remove Plaintiff's image, podcast, blog articles and other information from the Lysten/Answer Pet Food website. And it attests that although Hill represented that he would comply, he did not.
The Court notes that publicly available information indicates that in Spring, 2021 Answer Pet Food, a commercially successful business, became involved in internal disputes corollary to other legal proceedings between Defendant Keith Hill and his former spouse.
On the basis of Defendant's failure to comply, Plaintiff - who attests that his images were “intentionally stolen” by Defendant - brings a smorgasbord of claims for violations of various rights. The Amended Complaint includes: §43 of the Lanham Act, 15 U.S.C. §1125(a)(1)(A): False Association and (a)(1)(B): False Advertising; Common Law Privacy Rights; Common Law and Statutory Rights of Publicity, Unauthorized Use of Name or Likeness: 42 Pa. Const. Stat. §8316; Pennsylvania's Unfair Trade Practices Act and Consumer Protection Law (“UTPCPL”), 73 P.S. §201-1-2019.2; Commercial Defamation; Negligence and Respondeat Superior; Conversion; Unjust Enrichment; and Quantum Meruit.
Defendant's Motion to Dismiss seeks (a) dismissal of Plaintiff's claims under the UTPCPL and dismissal of Hill or (b) dismissal for lack of venue. ECF No. 28. Because the Court concurs that no Defendant resides in its jurisdiction, and the substantial events and omissions giving rise to the action occurred in the Eastern District of Pennsylvania, in the interest of efficiency it recommends (absent Plaintiff's voluntary dismissal) sue sponte transfer thereto in accordance with its discretion under 28 U.S.C. § 1406(a). It is thus unnecessary for the Court to further parse the plausible maintainability of specific counts against either named Defendant.
Defendant asserts that Hill is only alleged to have acted in his role as Lysten's “managing member” rather than in any capacity plausibly giving rise to individual liability. ECF No. 28 at 4 (noting that Plaintiff makes “no allegations against Hill individually, except for this language in paragraph 16 of Plaintiff's Amended Complaint: ‘Keith Hill personally agreed to Plaintiff's aforesaid demands ....'”). See also id. at 4-5 (citing and discussing 15 Pa. C.S. 8834, regarding limited liability corporations).
As noted by the Clerk of this Court, Defendant's identical Motion to Dismiss was filed by its counsel at both ECF No. 24 and 25, apparently in a mistaken belief that it was necessary to separately file said Motion for each named Defendant. This Report addresses them as the single motion they are.
III. STANDARD OF REVIEW
A. General Standard for Dismissal Under Rule 12(b)(6)
The United States Court of Appeals for the Third Circuit summarized the standard to be applied in deciding motions to dismiss filed pursuant to Rule 12(b)(6) thusly:
Under the “notice pleading” standard embodied in Rule 8 of the Federal Rules of Civil Procedure, a plaintiff must come forward with “a short and plain statement of the claim showing that the pleader is entitled to relief.” As explicated in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), a claimant must state a “plausible” claim for relief, and “[a] claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Although “[f]actual allegations must be enough to raise a right to relief above the speculative level,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), a plaintiff “need only put forth allegations that raise a reasonable expectation that discovery will reveal evidence of the necessary element.” Fowler, 578 F.3d at 213 (quotation marks and citations omitted); see also Covington v. Int'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 117-18 (3d Cir. 2013); Thompson v. Real Estate Mortg. Network, 748 F.3d 142, 147 (3d Cir. 2014).
B. General Standards for Dismissal or Transfer Under Rule 12(b)(3)
In this Circuit, the party challenging venue has the burden of showing that venue in the selected judicial district is improper. Myers v. Am. Dental Ass'n, 695 F.2d 716, 724 (3d Cir. 1982); see also Manning v. Flannery, 2010 WL 55295, at *4 & n. 4 (E.D. Pa. Jan. 6, 2010). In deciding a motion to dismiss and/or transfer for improper venue under Rule 12(b)(3), the Court must generally accept as true the allegations in the pleadings. Heft v. AAI Corp., 355 F.Supp.2d 757, 762 (M.D. Pa. 2005) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002). While “[t]he parties may submit affidavits in support of their positions, and may stipulate as to certain facts”, the Court views the facts in the light most favorable to the Plaintiff. Id.
It is well established that the District Court is vested with broad discretion in determining whether transfer of venue is appropriate. Plum Tree, Inc. v. Stockment, 488 F.2d 754, 756 (3d Cir. 1973); Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995). See also generally, Charles Alan Wright and Arthur Miller, et al., 14D FED. PRAC. & PROC. JURIS. §3827 (4th ed. 2013). In particular, a decision as to transfer under § 1406(a) is in the sound discretion of the district court, Lafferty v. Gito St. Riel, 495 F.3d 72, 75 n. 3 (3d Cir.2007), and does not require the same “balancing test” consideration of factors as, e.g., a transfer under § 1404(a) for forum non conveniens. See e.g., Rojas v. Trans States Airlines, Inc., 204 F.R.D. 265, 269 (D.N.J. 2001). The transferring court in a § 1406(a) analysis “must simply determine a venue in which the action originally could have been brought that serves the interest of justice.” LoPiccolo v. Am. Univ., 2011 WL 1196900, at *3 (E.D. Pa. Mar. 31, 2011).
IV. ANALYSIS
A. Venue Does Not Lie in the Western District of Pennsylvania
As noted, the case sub judice is premised largely on Defendant's misappropriation of Plaintiff's alleged images, quotes and “advertising ideas” to “promote the Defendant's pet food line by and through various marketing and promotional mediums, including [its] website, Twitter, Facebook and Instagram.” ECF No. 11 at 6. Defendant has moved to dismiss this action on grounds that venue in the Western District of Pennsylvania is improper under the general venue statute, 28 U.S.C. §1391(b). ECF No. 28 at 8-12. If so, the Court has the power to transfer the case under 28 U.S.C. §1406(a), provided the action is otherwise transferable. Plaintiff maintains, with little elaboration, that venue is proper in this District based on § 1391(b)(2), because a substantial part of the events or omissions giving rise to his federal and state claims occurred in the Western District of Pennsylvania.
See, e.g., Amended Complaint (averring that “the causes of action raised herein arose and accrued in Beaver, Pennsylvania; and the majority of the relevant facts and transactions underlying the causes of action occurred predominantly in Beaver, Pennsylvania”)
Under the general venue statute, venue will lie over a civil action where one of the following circumstances is shown to exist:
A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought.28 U.S.C. § 1391(b). As neither named Defendant resides in this judicial district, §1391(b)(1) is inapplicable. In making a determination as to whether venue is proper under §1391(b)(2), “[t]he test . . . is not the defendant's ‘contacts' with a particular district, but rather the location of those ‘events or omissions giving rise to the claim'[.]” Cottman Transm'n Sys., Inc. v. Martino, 36 F.3d 291, 294 (3d Cir. 1994); Bockman v. First Am. Marketing Corp., 459 Fed.Appx. 157, 161 (3d Cir. 2012) (quoting Cottman, id.). The requirement of substantiality is intended to preserve the element of fairness, tangential connection with the dispute in litigation is not enough, and “[i]n assessing whether events or omissions giving rise to the claims are substantial, it is necessary to look at the nature of the dispute.” Cottman, 36 F.3d at 294-95.
Defendant notes that the “events and omissions giving rise to” this action were Lysten's alleged failure to remove Plaintiff's name, image, likeness and information from Lysten's website, merchandise and cartons, with an alleged affirmative intention to keep benefiting from such use (Complaints, ¶¶ 16-18, 20, 23, 25, 26-28, 30-35), all of which occurred in its principal place of business - Hill's residence in Berks County, in the Eastern District of Pennsylvania. ECF No. 28 at 910. And it correctly observes that the location where consequent harm is felt (e.g., Plaintiff's residence) - while relevant to a court's consideration of a defendant's minimum contacts and reasonable anticipation sufficient to the Court's exercise of personal jurisdiction - is not a sufficient basis for venue under § 1391(b). ECF No. 28 at 10-11 (citing Bockman, 459 Fed.Appx. at 161162); ECF No. 30 at 6 (“The only thing which Plaintiff factually asserts to have occurred in the Western District is the damage Plaintiff claims to have sustained, or be at risk of sustaining, as a result of [Plaintiff's] actions and omissions.”).
In other words, venue does not collapse into specific personal jurisdiction; a court may have one and lack the other.
Finally, Defendant notes (albeit belatedly, in its Reply in Support) the Court of Appeals' holding in Cottman - which also involved claims of trademark infringement - that the “focus of [its] venue inquiry in a Lanham Act trademark infringement case is the location where the unauthorized passing off takes place- whether that occurs solely within one district or many.” 36 F.3d at 295 (citing Tefal, S.A. v. Products Int'l Co., 529 F.2d 495, 49697 (3d Cir. 1976)). Thus, the Court must also consider whether “a substantial part” of Defendant's alleged misappropriation/trademark infringement/passing off giving rise to the claim occurred in the Western District of Pennsylvania.
The Court concurs with the analysis of its sister Court for the District of New Jersey, in another recent trademark infringement case:
[T]he requirement that a substantial part of the events giving rise to the claim occur in the chosen forum, ‘limits venue to those districts in which a considerable portion of the events took place.' E.V. v. Robinson, 200 F.Supp.3d 108, 113 (D.D.C. 2016) (quoting Perlmutter v. Varone, 59 F.Supp.3d 107, 110 (D.D.C. 2014)). The plaintiff ‘must show that a considerable portion of the events took place in their chosen forum.' Perlmutter, 59 F.Supp.3d at 110. To determine whether a plaintiff has met the substantial part requirement, ‘courts should undertake a ‘commonsense appraisal' of the ‘events having operative significance in the case.' Id. at 111 (quoting Lamont v. Haig, 590 F.2d 1124, 1134 & n.62 (D.C. Cir. 1978)). To establish venue under [this section], a court must find that the activities in the chosen forum ‘played a substantial role in the circumstances leading up to the plaintiff's claim.' Crowe & Dunlevy, P.C. v. Stidham, 609 F.Supp.2d 1211, 1221 (N.D. Okla. 2009). To determine whether the events are substantial, courts look to the “nature of the dispute.” Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291, 295 (3d Cir. 1994).Adams, Nash & Haskell, Inc. v. United States, 2020 WL 1305620, at *2 (D.N.J. Mar. 19, 2020).
Plaintiff avers that he is a nationally-recognized veterinarian whose paid endorsements of and commercial affiliations with national pet product entities such as Defendant generate revenue through his presence in online social media (e.g., Defendant's website, Twitter, Facebook and Instagram accounts) and on merchandise distributed nationwide. See generally ECF Nos. 11 and 29. But apart from his blanket conclusory allegation that “the majority of the relevant facts and transactions ... occurred predominately” in his location of residence, Plaintiff fails to aver events/acts/omissions by Defendant in this District - as opposed to the Eastern District of Pennsylvania from which Defendant conducted its commercial business, including its online social media marketing and product preparation/distribution - which substantially gave rise to Plaintiff's claims. See Adams, supra at *3 (concluding that alleged trademark infringement “was much more wide-spread than New Jersey”, occurring nationwide, and “nature of the case” suggested that infringement in that District was not a substantial part of the events giving rise to Plaintiff's claims); id. at *2 (finding “Plaintiff's allegations in support of venue in New Jersey [to be] conclusory and unsubstantiated”); id. (transferring case under § 1406(a)to the District of Columbia, in which the office alleged to have infringed Plaintiff's trademark was headquartered); id. at *3 (citing other cases considered under passing off standard and transferred to District where defendant conducted its business). Cf. Cottman, 36 F.3d at 295 (concluding that “most, if not all, of the significant events occurred”, and that omissions that caused harm felt in Pennsylvania occurred, in Michigan where defendant's business was located).
See ECF No. 11; supra n. 4.
Plaintiff mistakenly asserts an analogy to this Court's prior partial denial of California defendants' request to dismiss or transfer Lanham Act litigation to California. ECF No. 29 at 10 (citing, as an “identical venue challenge”, Prominent GmbH et al v. Prominent Systems, Inc., et al, Civil Action No. 2:16-cv-01609, 2017 WL 1316362 (W.D. Pa. April 10, 2017)). As explained in this Court's lengthy Memorandum Opinion on Motions to Dismiss and/or Transfer in that action, two of the three Prominent defendants were dismissed under Rule 12(b)(2) for lack of personal jurisdiction, and the Court found that the remaining defendant, Prominent Systems, Inc. - as to which the Court denied dismissal for improper venue under Rule 12(b)(3) - had conceded both personal jurisdiction and venue. See id. at *19. (“Defendants do not appear to be contesting that venue is proper in this District vis-a-vis Prominent Systems, but rather, are arguing that the case be transferred in its entirety to the Central District of California-a more convenient forum. Therefore, the Court finds that venue is proper in this District as to Prominent Systems.”). The Court had also observed that the Prominent Systems defendant, although based in California, effected its alleged infringements/passings off in Pennsylvania not only through its interactive website and national print advertising but also through its targeted procurement of bid contracts with Pennsylvania government agencies and private organizations - such that Plaintiffs might plausibly maintain that a substantial part of the events or actions giving rise to their trademark infringement claims occurred in this District. The case is thus distinguishable.
The Prominent plaintiff primarily averred that the Prominent Systems defendant - through use of the name Prominent Systems and other assertedly infringing/ confusing presentation - was misrepresenting itself/its products as the Prominent plaintiff's. Cf. id. at *18 n. 19 (noting that plaintiffs did not plausibly allege or show that any - let alone a substantial part - of the acts or conduct by the dismissed defendants assertedly giving rise to trademark infringement or other claims occurred in this District, and thus venue was improper as to them under section 1391(b)(2)). Cf. also Adams, supra at 4 (distinguishing Cottman “deciding between venue in only two states” and cases in which “alleged infringement occurred in districts in many states”).
As it concludes that venue properly lies in the Eastern District of Pennsylvania, the Court has set aside its initial impression of the maintainability of Plaintiff's many claims on motion to dismiss or under subsequently applicable standards, such as summary judgment.
B. Transfer to the Eastern District of Pennsylvania is Appropriate
Where venue is improper, a court may transfer a case “in the interest of justice” to a district in which the case could have been brought. 28 U.S.C. § 1406(a). Under § 1406(a), a court can sua sponte transfer or dismiss the case if it determines that venue is improper. See Decker v. Dyson, 165 Fed.Appx. 951, 954 n.3 (3d Cir. 2006). The decision whether transfer or dismissal serves the interest of justice is within the discretion of the district court. See Adams, supra at 4. And in considering whether the interests of justice warrant transfer rather than dismissal, the courts have considered several factors, such as whether: (1) dismissal would result in a procedural bar to filing a new law suit (i.e., statute of limitations issue); (2) transfer would be more economical or efficient; (3) the parties were represented by experienced litigators; and (4) the defendant has mislead plaintiff on the facts relevant to venue.
Although neither party here asserts a potential procedural bar or any misleading conduct as to this Court's jurisdiction or venue, the Court nonetheless concludes that transfer is more appropriate than involuntary dismissal for reasons of economic and judicial/litigation efficiency. The Court's recommendation is further informed by (a) the parties' relative unfamiliarity with the forms of litigation and lack of legal sophistication; (b) filing/other procedural missteps suggesting some lack of familiarity on counsels' part as well; and (c) the nuanced law of personal jurisdiction and venue. Compare e.g., TJF Assocs., LLC v. Kenneth J. Rotman & Allianex, LLC, 2005 WL 1458753, at *8 (E.D. Pa. June 17, 2005) (finding dismissal appropriate “when there is no threat of a procedural bar to plaintiff's cause of action, when the parties are commercially sophisticated and familiar with the forms of litigation, and when there was nothing obscure about the location of the proper forum for the case”) (citing Cont'l Ins. Co. v. M/V Orsula, 354 F.3d 603, 608 (7th Cir.2003)). Finally, as the Adams Court observed, transfer generally serves the interests of justice and is thus favored over dismissal. 2020 WL 1305620, at *4 (citing J.F. Lomma, 2011 WL 463051, at *5; Markey v. Fastuca, 2006 WL 469948, at *3 (D.N.J. Feb. 27, 2006)).
See n.3, supra. See also, e.g., ECF No. 29 at 1 n. 1 (Plaintiff's recitation regarding docket history and filing of his Brief in Opposition to pending Motions “in an abundance of caution”); see generally Clerk's Quality Control Messages to docket.
V. CONCLUSION
It is therefore respectfully recommended that Defendant's Motions to Dismiss, ECF No. 24 and 25, be DENIED. It is also respectfully recommended that Plaintiff be given twenty (20) days from the date of the Court's Order on this Report and Recommendation to voluntarily dismiss this action, and that absent voluntary dismissal the case be transferred sua sponte to the United States District Court for the Eastern District of Pennsylvania, in which venue properly lies, in accordance with 28 U.S.C. § 1406(a).
In accordance with the Federal Magistrate Judge's Act, 28 U.S.C. §636(b)(1)(B) and (C), and Rule 72.D.2 of the Local Rules of Court, the parties are allowed fourteen (14) days from the date of service of this Report and Recommendation to file written objections thereto. Any party opposing such objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to file timely objections will constitute a waiver of any appellate rights.