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Inc. v. Aussie Rules Marine Services, Ltd.

United States District Court, W.D. Washington, Seattle

May 24, 2018





         Before the court is Aussie Rules Marine Services (“ARMS”), Greg Norman, and ABG-Shark, LLC's (“Shark”) (collectively, “Defendants”) motion to transfer this action to the Southern District of Florida, or in the alternative, to dismiss Plaintiff Organo Gold International, Inc.'s (“Organo”) complaint for lack of personal jurisdiction. (Mot. (Dkt. # 8).) The court has considered the motion, all of the parties' submissions in support of and in opposition to the motion, the relevant portions of the record, and the applicable law. Being fully advised, [1] the court GRANTS Defendants' motion to transfer venue pursuant to 28 U.S.C. § 1404(a).


         Organo, a Nevada corporation, sells “ganoderma-infused beverages, dietary supplements[, ] and other nutraceuticals.” (Compl. (Dkt. # 1) ¶¶ 1, 8.) Organo has global business operations in “the United States, Canada, Mexico, and over 40 other countries.” (Id. ¶ 1.) Organo's headquarters are located in Richmond, British Columbia, Canada, but the company also maintains an office in Ferndale, Washington to manage its United States operations. (Resp. at 1.) In Ferndale, Organo maintains “an office and warehouse, and employs 10 people who commute to and from” the Canadian corporate headquarters regularly. (Id. at 2.)

         Organo representatives met representatives from ARMS, a Cayman Islands corporation controlled by Mr. Norman-a retired professional golfer and a resident of Florida (Compl. ¶¶ 2-3, 10)-for the first time during the 2013 Master's Tournament (Mot. at 3). In July 2013, after the initial meeting, Organo, ARMS, and Mr. Norman entered into two contracts (collectively, “the Agreements”). (Id.; Compl. ¶¶ 11-12.) First, the parties entered into the “License Agreement, ” by which the parties “agreed to develop a specific line of premier coffee products utilizing [Mr.] Norman's name and likeness (the ‘Norman Identity') and to promote the product line and Organo's business.” (Compl. ¶ 11.) Second, the parties entered into the “Promotion and Services Agreement, ” by which Mr. Norman “agreed to make personal appearances and perform certain professional management consulting services” related to the new product line (“Branded Products”). (Id. ¶ 12.) Under the Agreements, Organo agreed to pay Mr. Norman and ARMS approximately $5 million over five years. (Id. ¶ 13.) The Agreements explicitly state that the parties “hereby expressly consent” to the jurisdiction of Florida courts. (Mot., Ex. A (“Agreements”) at ¶ 19.8.)[2]

         Specifically, under the License Agreement, Defendants granted Organo “the right and license to use the Norman Identity during the Contract Period and throughout the Contract Territory.” (Id. ¶ 2.2.) In return for the right to use Mr. Norman's brand image, Organo agreed to make “guaranteed payments, ” pay “monthly royalties, ” and provide “free product.” (Resp. at 3; id. ¶ 3.2.) Defendants also retained a certain amount of quality control over the Branded Products and “the Licensing Agreement provided that Organo would organize no fewer than two tastings for each Branded Product to allow for [Mr.] Norman's directional input.” (Agreements ¶ 10.4; see also Resp. at 3.)

         Organo negotiated the Agreements with ARMS and Mr. Norman via email and telephone from the company's Canadian headquarters. (Filon Decl. (Dkt. # 10) ¶ 8; Perrett Decl. (Dkt # 16) ¶ 13.) Once the parties reached a consensus, Organo emailed the contracts to ARMS and Mr. Norman, who signed the Agreements in Florida. (Filon Decl. ¶ 6.) During this time, Mr. Norman and ARMS never visited Organo's Ferndale office or warehouse. (Id.) Similarly, Organo representatives did not travel to Florida. (Perret Decl. ¶ 13.)

         After executing the License Agreement, Mr. Norman received a “high-ranking Organo Distributorship, which he directed to put in the name of his business advisor, David Chessler.” (Resp. at 4-5.) Mr. Chessler signed an “Independent Distributor Agreement” (“IDA”), “which permitted the Defendants to sell the products themselves . . . and thereby receive both royalties and commissions from the sale of products by persons under their charge.” (Id. at 5; see Perret Decl. ¶¶ 8, 18.) Mr. Chessler entered “approximately 20 purchase orders, generating approximately $31, 000[.00] in commissions.” (Id. ¶ 18.) The orders were processed and shipped from Organo's Ferndale warehouse. (Id.)

         On January 24, 2018, Organo filed this suit against Defendants asserting breach of contract. (See generally Compl.) Organo contends that ARMS and Mr. Norman breached the Agreements by:

(1) Not using commercially reasonable efforts to obtain and maintain trademark registrations for the Branded Products using the Norman identity; (2) failing to make Mr. Norman available for the required number of personal appearances; (3) failing to discuss and arrange for availability; (4) failing to take reasonable efforts to promote the Branded Products; (5) failing to establish a business plan; and (6) failing to provide professional management consulting services for Organo's business.

(Resp. at 6; see also Compl. ¶¶ 15-17.) Organo also asserts that Mr. Norman “sold or otherwise transferred all of the underlying rights to the subject matter of the License Agreement (the right to exploit the Norman Identity itself)” to Shark without Organo's express consent. (Compl. ¶ 22.) The court now considers Defendants' motion to transfer or dismiss for lack of personal jurisdiction.[3] (See Mot.)

         III. ANALYSIS

         “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). The threshold question is whether the plaintiff could have originally brought the action in the forum proposed for transfer. See Hoffman v. Blaski, 363 U.S. 335, 344 (1960). To resolve the threshold question, the moving party must make three showings: (1) that the transferee court possesses subject matter jurisdiction over the action, (2) that venue would have been proper in the transferee court, and (3) that all the parties would be subject to personal jurisdiction in the transferee court. Id.

         Here, there is no dispute that Organo could have originally brought this suit in the Southern District of Florida. (See Mot. at 4; Resp. at 4.) The Southern District of Florida possesses subject matter jurisdiction over this action based on 28 U.S.C. § 1332 because there is complete diversity between Organo and each Defendant, and the amount in controversy exceeds $75, 000.00. (See Compl. ¶¶ 1-5); see also 28 U.S.C. § 1332(a). Furthermore, Organo does not dispute the fact that it consented to personal jurisdiction in Florida. (Resp. at 4; Agreements ¶ 19.8.) Lastly, venue is proper in the Southern District of Florida because the actions underlying the asserted claims occurred there and the parties are also subject to personal jurisdiction in Florida. See 28 U.S.C. §§ 1391(b)(2), (b)(3).

         Once the court resolves the threshold question, district courts have discretion to transfer venue on a case-by-case basis. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). In determining whether to transfer an action, the district court weighs a number of “case-specific factors.” Id. These factors generally concern the relative impact of the venue on the private parties participating in the litigation; the parties' access to evidence; the availability of compulsory process; “and all other practical problems that make trial of a case easy, expeditious and inexpensive.” Gulf ...

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