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Discoverorg Data LLC v. Quantum Market Research Inc.

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

October 31, 2019

DISCOVERORG DATA, LLC, Plaintiff,
v.
QUANTUM MARKET RESEARCH INC., Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS

          BENJAMIN H. SETTLE UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Defendant Quantum Market Research, Inc's (“Quantum”) motion to dismiss for lack of personal jurisdiction. Dkt. 8. The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby denies the motion for the reasons stated herein.

         I. PROCEDURAL AND FACTUAL HISTORY

         Plaintiff DiscoverOrg Data, LLC (“DiscoverOrg”) provides sales and marketing information for business to business sales. Dkt. 1. DiscoverOrg's claims stem from its allegation that Quantum “stole access to DiscoverOrg information (about 9, 300 records) and used them for its own sales and marketing, without paying DiscoverOrg any licensing fees.” Id. DiscoverOrg is a limited liability company with its principal place of business in Vancouver, Washington, and Quantum is a Delaware corporation with its principal place of business in Nebraska. Id. ¶¶ 1-2.

         Relevant to the instant motion, DiscoverOrg's Corporate Counsel James Henry (“Henry”) declares that starting in July 2017, “Quantum personnel were engaged in sales discussions with DiscoverOrg personnel.” Dkt. 11 at 4 (citing Dkt. 12, ¶ 4.). These conversations occurred by phone and email and continued through at least November 2017. Id. (citing Dkt. 12, ¶ 4-5). Henry further declares that DiscoverOrg sales personnel frequently disclose DiscoverOrg's Vancouver, Washington location on sales calls, and that DiscoverOrg emails sent to Quantum included phone numbers with Washington area codes. Id. (citing Dkt. 12, ¶¶ 6-7). From October 27, 2017 to November 4, 2017, Quantum used DiscoverOrg's database with permission through “a one-week trial with access of two user seats.” Id. at 4-5 (citing Dkt. 12, 8). Quantum did not purchase a license to access DiscoverOrg's database after the trial license expired. Id. at 5 (citing Dkt. 12, 9).

         Next, DiscoverOrg Compliance Analyst Jie Smith (“Smith”) declares that three IP addresses linked to Quantum accessed DiscoverOrg's database without authorization in November 2017. Id. (citing Dkt. 13, ¶¶ 5-6). Smith declares that Quantum ran searches, viewed proprietary information, downloaded over 9, 300 records, and used these records to sell its products. Id. (citing Dkt. 13, ¶¶ 6-7). Whenever Quantum accessed DiscoverOrg's login page, it “was presented with a link to DiscoverOrg's End User License Agreement.” Id. (citing Dkt. 13, ¶ 8). DiscoverOrg's Director of Customer Support Will Hinrichs declares that the only way Quantum could have accessed the allegedly stolen records was by using the login credentials of a DiscoverOrg licensee, and that “DiscoverOrg's website also contains multiple notifications that DiscoverOrg is based in Washington.” Id. (citing Dkt. 15, ¶¶ 9-10).

         On July 18, 2019, DiscoverOrg filed a complaint asserting claims for theft of trade secrets, misappropriation of trade secrets, misappropriation, copyright infringement, violation of the federal Computer Fraud and Abuse Act, trespass to chattels, unjust enrichment, intentional interference with contract, and negligence. Dkt. 1. On August 22, 2019, Quantum filed the instant motion to dismiss for lack of personal jurisdiction. Dkt. 8. On September 9, 2019, DisocverOrg responded. Dkt. 11. On September 13, 2019, Quantum replied. Dkt. 16. On September 16, 2019, DiscoverOrg filed notice of intent to surreply. Dkt. 17. On September 18, 2019 DiscoverOrg surreplied. Dkt. 18.

         II. DISCUSSION

         A. Standard on a Motion to Dismiss Under Fed.R.Civ.P. 12(b)(2)

         To determine whether it has jurisdiction over a defendant, a federal court applies the law of the state in which it sits, as long as that law is consistent with federal due process. Daimler AG v. Bauman, 571 U.S. 117, 126 (2014). Washington allows the maximum jurisdictional reach permitted by due process. Easter v. Am. W. Fin., 381 F.3d 948, 960 (9th Cir. 2004). Due process is satisfied when subjecting the entity to the court's power does not “offend ‘traditional notions of fair play and substantial justice.'” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). “[T]raditional notions of fair play and substantial justice” require that a defendant have minimum contacts with the forum state before it may be haled into a court in that forum. Int'l Shoe, 326 U.S. at 316 (1945). The extent of those contacts can result in either general or specific personal jurisdiction over the defendant. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).

         “Although the plaintiff cannot simply rest on the bare allegations of its complaint, uncontroverted allegations in the complaint must be taken as true.” Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotation marks and citations omitted). “Additionally, any evidentiary materials submitted on the motion are construed in the light most favorable to the plaintiffs and all doubts are resolved in their favor.” See Ochoa v. J.B. Martin & Sons Farms, Inc., 287 F.3d 1182, 1187 (9th Cir. 2002).

         Specific jurisdiction permits a district court to exercise jurisdiction over a nonresident defendant for conduct that “create[s] a substantial connection with the forum State.” Walden v. Fiore, 571 U.S. 277, 284 (2014). A defendant creates a substantial connection in a tort-based action when it purposefully directs its activities at the forum state, the lawsuit arises out of or relates to the defendant's forum-related activities, and the exercise of jurisdiction is reasonable. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (“Picot”). Purposeful direction constitutes (1) an intentional action, (2) expressly aimed at the forum state, which (3) cause harm “the brunt of which is suffered-and which the defendant knows is likely to be suffered-in the forum state.” Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1485-86 (9th Cir. 1993) (citing Calder v. Jones, 465 U.S. 783, 788-89 (1984)). In applying this test, the Court must “look[] to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there.” Walden v. Fiore, 571 U.S. 277, 285 (2014). “[A]n injury is jurisdictionally relevant only insofar as it shows that the defendant has formed a contact with the forum state.” Id. at 290. However, the Supreme Court also explained in a footnote that Walden “does not present the very different questions whether and how a defendant's virtual ‘presence' and conduct translates into ‘contacts' with a particular State.” Id. at 290 n.9. In applying Walden, the Ninth Circuit found in Picot that contact between non-forum residents outside the forum which interfered with the plaintiff's contract and ability to access out-of-forum funds was not meaningfully tethered to the forum and created an injury that would “follow [the plaintiff] wherever he might choose to live or travel.” Picot, 780 F.3d at 1215.

         If the plaintiff establishes the first two factors, the defendant “must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable' in order to defeat personal jurisdiction.” Harris Rutsky & Co. Ins. Servs. Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1132 (9th Cir. 2003) (quoting Burger King v. Rudzewicz, 471 U.S. 462, 477 (1985)). These considerations include the extent of the defendant's purposeful interjection into the forum, the burden on the defendant, conflict of sovereignty with the defendant's state, the forum state's interest, judicial efficiency, the importance of the forum to the plaintiff's interest in convenient and effective relief, and the possibility of alternate forums. Id. (citing Core-Vent, 11 F.3d at 1487-88).

         The parties agree that DiscoverOrg seeks to establish specific personal jurisdiction over Quantum and alleges ...


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