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51146224.2
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CORPORATE DISCLOSURE STATEMENT Case No. 2:11-cv-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
The Honorable James L. Robart
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
AMAZON.COM, INC., a Delaware corporation, Plaintiff, v. NATIONAL ASSOCIATION OF COLLEGE STORES, INC., an Ohio corporation, Defendant.
No. 2:11-cv-00754 DEFENDANT’S CORPORATE DISCLOSURE STATEMENT
Case 2:11-cv-00754-JLR Document 13 Filed 05/27/11 Page 1 of 3
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CORPORATE DISCLOSURE STATEMENT - 1 Case No. 2:11-cv-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
CORPORATE DISCLOSURE STATEMENT
Pursuant to Fed. R. Civ. P. 7.1(a), Defendant National Association of College Stores, Inc.
(“NACS”) submits this Corporate Disclosure Statement. NACS is a not-for-profit corporation
organized under the laws of Ohio. NACS has no corporate parent, and there are no publicly-held
companies that own 10% or more of the stock of NACS.
DATED this 27th day of May, 2011. ARENT FOX LLP /s/ Ralph A. Taylor, Jr. Ralph A. Taylor, Jr., Admitted Pro Hac Vice Matthew Wright, Admitted Pro Hac Vice Attorneys for Defendant National Association of College Stores, Inc. 1050 Connecticut Avenue, N.W. Washington, DC 20036 Telephone: (202) 857-6000 Facsimile: (202) 857-6395 Email: [email protected]
FOSTER PEPPER PLLC /s/ Charles P. RullmanTim J. Filer, WSBA No. 16285 Charles P. Rullman, WSBA No. 42733 Attorneys for Defendant National Association of College Stores, Inc. 1111 Third Avenue, Suite 3400 Seattle, Washington 98101-3299 Telephone: (206) 447-4400 Facsimile: (206) 447-9700 Email: [email protected]
OF COUNSEL ARENT FOX LLP Marc L. Fleischaker Brian D. Schneider Counsel for Defendant National Association of College Stores, Inc. 1050 Connecticut Avenue, N.W. Washington, DC 20036 Telephone: (202) 857-6000 Facsimile: (202) 857-6395
.
Case 2:11-cv-00754-JLR Document 13 Filed 05/27/11 Page 2 of 3
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CORPORATE DISCLOSURE STATEMENT - 2 Case No. 2:11-cv-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
DECLARATION OF SERVICE
I, Colleen Hickman, state that I am a citizen of the United States of America and a
resident of the State of Washington, I am over the age of twenty one years, I am not a party to
this action, and I am competent to be a witness herein. I electronically filed the document titled
DEFENDANT’S CORPORATE DISCLOSURE STATEMENT with the Clerk of the Court
using the CM/ECF System, who will electronically send notification of such filing to the
following parties who have appeared in this action as of today’s date:
Tim J Filer [email protected], [email protected]
Thomas Jirgal [email protected], [email protected]
Vanessa Soriano Power [email protected], [email protected], [email protected]
Charles P Rullman , III [email protected], [email protected]
Regan Smith [email protected], [email protected]
Ralph A. Taylor , Jr [email protected]
Matthew M. Wright [email protected]
There are no other parties who have appeared in this action as of today’s date that need to
be served manually.
I DECLARE under penalty of perjury under the laws of the State of Washington that the
foregoing is true and correct.
DATED this 27th day of May, 2011.
Colleen Hickman
Case 2:11-cv-00754-JLR Document 13 Filed 05/27/11 Page 3 of 3
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DEFENDANT’S MOTION TO DISMISS Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
The Honorable James L. Robart
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON AT SEATTLE
AMAZON.COM, INC., a Delaware corporation, Plaintiff, v. NATIONAL ASSOCIATION OF COLLEGE STORES, INC., an Ohio corporation, Defendant.
No. 2:11-cv-00754 DEFENDANT’S MOTION TO DISMISS COMPLAINT FOR DECLARATORY RELIEF PURSUANT TO FED. R. CIV. P. 12(b)(1) and 12(b)(2)
NOTE ON MOTION CALENDAR: Friday, June 24, 2011 Oral Argument Requested
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 1 of 27
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DEFENDANT’S MOTION TO DISMISS - i Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
TABLE OF CONTENTS
Page INTRODUCTION .............................................................................................................. 1
FACTUAL BACKGROUND............................................................................................. 2
The Parties. ............................................................................................................. 2
Recent Dealings Between NACS and Amazon. ..................................................... 3
LEGAL STANDARDS FOR DISMISSAL ....................................................................... 5
Standard for Dismissal Under Fed. R. Civ. P. 12(b)(1).......................................... 5
Standard for Dismissal Under Fed. R. Civ. P. 12(b)(2).......................................... 6
ARGUMENT...................................................................................................................... 6
I. Amazon’s Suit for Declaratory Judgment Should Be Dismissed for Lack of Subject Matter Jurisdiction Because There Is No Case or Controversy............. 7
A. Amazon Does Not Have Standing to Bring Suit Against NACS Because It Cannot Identify any Concrete, Imminent Injury That Is Fairly Traceable to NACS. ......................................................................... 8
B. Amazon’s Fear of FTC Enforcement Is Remote, Speculative, and Not Ripe for Adjudication. ....................................................................... 11
II. In Addition or Alternatively, Amazon’s Suit for Declaratory Judgment Should Be Dismissed Because This Court Lacks Personal Jurisdiction over NACS............................................................................................................ 13
A. There Is No Basis to Exercise General Jurisdiction over NACS.............. 14
B. There Is Also No Basis to Exercise Specific Jurisdiction over NACS........................................................................................................ 15
C. The Court Should Grant NACS an Award of Its Attorneys’ Fees Under Wash. Rev. Code § 4.28.185(5)..................................................... 17
III. This Lawsuit, if Permitted, Would Undermine Self-Regulation in Advertising Disputes and Clog the Courts with Similar Preemptive Suits. ......... 17
CONCLUSION................................................................................................................. 19
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 2 of 27
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DEFENDANT’S MOTION TO DISMISS - ii Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
TABLE OF AUTHORITIES
Page(s) CASES
Abbott Labs. v. Gardner, 387 U.S. 136 (1967).................................................................................................................12
Americopters, LLC v. Fed. Aviation Admin., 441 F.3d 726 (9th Cir. 2006) .....................................................................................................5
AMF, Inc. v. Brunswick Corp., 621 F. Supp. 456 (E.D.N.Y. 1985) ..........................................................................................18
Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082 (9th Cir. 2000) .......................................................................................6, 13, 14
Bennett v. Spear, 520 U.S. 154 (1997)...............................................................................................................8, 9
Chan v. Society Expeditions, Inc., 39 F.3d 1398 (9th Cir. 1994) ..............................................................................................14, 17
Doe v. Unocal Corp., 248 F.3d 915 (9th Cir. 2001) ...................................................................................................16
Donatelli v. Nat'l Hockey League, 893 F.2d 459 (1st Cir. 1990)....................................................................................................15
Easter v. Am. W. Fin., 381 F.3d 948 (9th Cir. 2004) ...................................................................................................14
Ex Parte Young, 209 U.S. 123 (1908).................................................................................................................12
F.X. Maltz, Ltd. v. Morgenthau, 556 F.2d 123 (2d Cir. 1977).......................................................................................................7
Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (1979).....................................................................................................................8
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984).................................................................................................................13
International Shoe Co. v. Washington, 326 U.S. 310 (1945)...................................................................................................................6
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 3 of 27
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DEFENDANT’S MOTION TO DISMISS - iii Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Jason v. UNITE HERE, C05-820 JLR, 2005 WL 3278004 (W.D. Wash. Dec. 2, 2005).....................................6, 14, 15
Lee v. Oregon, 107 F.3d 1382 (9th Cir. 1997) ...................................................................................................8
Lewis v. Continental Bank Corp., 494 U.S. 472 (1990)...................................................................................................................1
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)...............................................................................................................5, 8
Marks v. Garman, C07-5682FDB/JKA, 2009 WL 151259 (W.D. Wash. Jan. 20, 2009) .......................................5
Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270 (1941)...................................................................................................................7
MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007)...........................................................................................................7, 12
O.B. Williams Company v. S.A. Bendheim West, Inc., C08-1155JLR, 2010 WL 3430404 (W.D. Wash. Aug. 30, 2010) ...........................................17
Olitt v. Vacco, 97 Civ. 9139, 1998 WL 901727 (S.D.N.Y. Dec. 28, 1998)...........................................9, 10, 12
Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267 (9th Cir. 1995) .....................................................................................................15
Pacific Legal Found. v. State Energy Resources, 659 F.2d 903 (9th Cir. 1981) .....................................................................................................5
Peterson v. Kennedy, 771 F.2d 1244 (9th Cir. 1985) .................................................................................................17
Pub. Serv. Comm’n v. Wycoff, 344 U.S. 237 (1952).................................................................................................................17
Russian Standard Vodka (USA), Inc. v. Allied Domecq Spirits & Wine USA, Inc., et al., 523 F.Supp.2d 376 (S.D.N.Y. 2007)........................................................................................12
Sacks v. Office of Foreign Assets Control, 466 F.3d 764 (9th Cir. 2006) .....................................................................................................8
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 4 of 27
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DEFENDANT’S MOTION TO DISMISS - iv Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) ...............................................................................................6, 16
Scott Fetzer Co. v. Weeks, 786 P.2d 265 (Wash. 1990)......................................................................................................17
St. Clair v. City of Chico, 880 F.2d 199 (9th Cir. 1989) .....................................................................................................5
Steffel v. Thompson, 415 U.S. 452 (1974)...........................................................................................................12, 13
Texas v. United States, 523 U.S. 296 (1998)...........................................................................................................11, 12
United Pub. Workers v. Mitchell, 330 U.S. 75 (1947)...............................................................................................................8, 12
United States v. SCRAP, 412 U.S. 669 (1973).................................................................................................................10
W. Birkenfeld Trust v. Bailey, 827 F. Supp. 651 (E.D. Wash. 1993) .........................................................................................5
Warth v. Seldin, 422 U.S. 490 (1975)...................................................................................................................8
White v. Lee, 227 F.3d 1214 (9th Cir. 2000) ...................................................................................................5
Whitmore v. Arkansas, 495 U.S. 149 (1990).............................................................................................................9, 10
Wilton v. Seven Falls Co., 515 U.S. 277 (1995).................................................................................................................18
Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199 (9th Cir. 2006) ..................................................................................................16
Ziegler v. Indian River Cnty., 64 F.3d 470 (9th Cir. 1995) .....................................................................................................16
STATUTES
15 U.S.C. § 45..................................................................................................................................4
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DEFENDANT’S MOTION TO DISMISS - v Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
28 U.S.C. § 1391......................................................................................................................16, 17
28 U.S.C. § 2201(a) .......................................................................................................................17
Lanham Act (15 U.S.C. §1501, et seq.) ........................................................................................4,9
Wash. Rev. Code § 4.28.185....................................................................................................17, 19
OTHER AUTHORITIES
10B Charles Alan Wright et al., Federal Practice and Procedure § 2759 (3d ed. 1998) ...............18
Fed. R. Civ. P. 12(b) .............................................................................................................. passim
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 6 of 27
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DEFENDANT’S MOTION TO DISMISS - 1 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
INTRODUCTION
The case or controversy requirement of Article III of the Constitution reflects the role of
federal courts in our system of limited government. In accordance with the Constitution’s
division of governmental authority, the federal courts give no opinions except in legal cases
brought under specific laws and involving the actual litigation of concrete interests between
adverse parties.1 By bringing this action, Amazon.com, Inc. (“Amazon”) invites this Court to
disregard more than 200 years of Constitutional precedent and provide an advisory opinion as to
the veracity of advertising statements that are not the subject of any prior, actual or threatened
litigation. The suit wholly lacks proper purpose or merit.
On March 25, The National Association of College Stores, Inc. (“NACS”) initiated a
proceeding before the National Advertising Division of the Better Business Bureau (“NAD”) to
determine the truthfulness of, and substantiation for, several advertising claims published on
Amazon’s Web site. Amazon could have participated in the advertising review process before
the NAD. Alternatively, it could have refused to participate and faced no legal consequence --
the NAD is a voluntary, self-regulatory, and non-adjudicative body with no enforcement
authority. Instead, Amazon exploited the rules of the NAD (which requires termination of
reviews that are the subject of litigation) and manufactured this declaratory judgment action
against NACS, a non-profit, non-resident that has not threatened Amazon with any suit in any
court.
Ironically, the relief that Amazon seeks here is the same relief the NAD might have
provided. Amazon instead brought this suit to prevent the NAD’s review of its claims and to
discourage the use of the NAD’s voluntary self-enforcement of truth in advertising. 1 “Under Article III of the Constitution, federal courts may adjudicate only actual, ongoing cases or controversies. To invoke the jurisdiction of a federal court, a litigant must have suffered, or be threatened with, an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision. Article III denies federal courts the power to decide questions that cannot affect the rights of litigants in the case before them and confines them to resolving ‘real and substantial controvers[ies] admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.’” Lewis v. Continental Bank Corp., 494 U.S. 472, 477-478 (1990) (internal citations omitted).
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 7 of 27
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DEFENDANT’S MOTION TO DISMISS - 2 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Amazon does not present a valid or justiciable case or controversy and seeks only an
impermissible advisory opinion. Furthermore, even if Amazon’s claims were justiciable, this
Court lacks personal jurisdiction over NACS. Accordingly, the Court should summarily dismiss
the suit with prejudice, and award NACS its attorneys’ fees as costs.
FACTUAL BACKGROUND
The Parties
NACS is a not-for-profit trade association representing the campus retailing industry.
See Declaration of Edward L. Schlichenmayer (“Schlichenmayer Decl.”) ¶ 4. NACS is
headquartered in Oberlin, Ohio, with branch offices in Washington, DC, and Albany, New York.
Id. ¶ 6. NACS members include more than 3,000 stores serving colleges, universities, and K-12
schools in the United States, Canada, and around the world; more than 1,000 companies
supplying goods and services to college stores; and higher education professionals,
organizations, associations, and others interested in the industry’s vitality. Id. ¶ 4. NACS
members operate independently of NACS. Id. ¶ 5. NACS does not control the actions of its
members or their employees. Id.
NACS is not licensed or registered to do business in the State of Washington.
See Schlichenmayer Decl. ¶ 7. NACS has no offices, property, bank accounts, telephone
numbers or listings, post office boxes, or employees in Washington. Id. To the best of its
knowledge, NACS has neither brought suit nor been sued in the state or federal courts of
Washington. Id.
According to the factual allegations of its Complaint, Amazon is a Delaware corporation
with its principal place of business in Seattle, Washington. Amazon is one of the largest online
retailers in the United States and sells, among other things, new and used college textbooks
through its Web site. See Complaint at ¶ 9. Amazon does not allege that NACS is a competitor,
although the Complaint alleges at ¶¶ 19-20 that Amazon competes with NACS’s members in the
sale of college textbooks.
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DEFENDANT’S MOTION TO DISMISS - 3 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Recent Dealings Between NACS and Amazon
In recent months, Amazon has published advertisements on its Web site and near college
campuses that make comparative claims about the prices of new and used textbooks and
textbook buyback services offered by Amazon. These advertisements raised concerns on the part
of NACS that Amazon’s claims were not adequately substantiated and potentially misled
consumers. On February 2, 2011, NACS’s counsel wrote to Amazon to voice its concerns about
the accuracy of Amazon’s advertising and to request explanations of several of Amazon’s
pricing claims. See Feb. 2, 2011 letter from M. Fleischaker to L. M. Williams, attached as Ex. 1
to the Schlichenmayer Decl. This letter does not allege that Amazon violated any provision of
the Lanham Act (or any other law), nor does it threaten to pursue any legal action in state or
federal court. Rather, the letter states that “[a] lack of documentation could justify initiation of a
proceeding before the National Advertising Division [of the Better Business Bureau].” Id. at 2.
Amazon’s legal department replied by letter two weeks later, indicating that its
advertising claims were substantiated to Amazon’s own satisfaction. Amazon declined to share
any explanation or substantiating information with NACS. See Feb. 18, 2011 letter from J.
Unruch to M. Fleischaker, attached as Ex. 2 to the Schlichenmayer Decl.
On March 25, 2011, NACS initiated a proceeding before the NAD with respect to several
of the advertising claims published on Amazon’s Web site. The NAD is the premier arbiter of
advertising disputes in the United States. Created in 1971 by the Council of Better Business
Bureaus and the advertising industry’s leading trade associations, the NAD’s mission is to
“review national advertising for truthfulness and accuracy and foster public confidence in the
credibility of advertising.” See http://www.nadreview.org. Through its voluntary, self-regulatory
advertisement review process, it aims to provide the most effective, efficient and least expensive
forum in the United States for settling advertising disputes.2
2 A 1999 Federal Trade Commission (“FTC”) report on self-regulation in the alcohol industry noted that the NAD is an “especially effective model of self regulation . . . that has handled over 3,500 cases since 1971,” and that “in
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DEFENDANT’S MOTION TO DISMISS - 4 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
The NAD’s procedure is straightforward: The challenger and the advertiser each make
one or two written submissions, the NAD holds a meeting with each party, and the NAD issues
its decision, typically all within two to four months. Compliance with NAD recommendations is
voluntary; if, however, a party does not participate in the proceeding or does not agree to modify
its advertising in response to an NAD recommendation, the NAD rules provide that it may refer
the matter to the FTC or another appropriate governmental authority. See NAD Procedures at
Section 2.1(F) and 4.1. (A complete copy of the NAD’s procedures is attached as Ex. 3 to the
Schlichenmayer Decl.)3 The extent to which the FTC or other authorities investigate or take
further action with respect to any matter in fact referred by the NAD is solely within their
enforcement discretion.4 NACS has no ability to “enforce” a favorable determination from the
NAD even if it received one. Similarly, the NAD has no power to enforce its determination and
no power to require the FTC or any other authority to investigate or take any enforcement action
against Amazon. In short, the NAD provides the parties (and the larger industry) with an
unbiased but non-binding, non-adjudicative advisory opinion.
Amazon refused to participate in the NAD’s self-regulatory dispute resolution process.
Instead, Amazon brought the instant suit against NACS, seeking a broad declaration from the
Court that none of its advertising claims violate any provision of the Lanham Act (15 U.S.C.
§1501, et seq.). The same day this suit was filed, the NAD issued a brief statement
administratively closing the case because, under NAD Rules Sec. 2.2(B)(i)(b), it cannot accept
cases that are the subject of pending litigation. See Schlichenmayer Decl. at Ex. 4.
virtually all cases advertising found to be misleading has been discontinued or modified voluntarily.” http://www.ftc.gov/reports/alcohol/alcoholreport.htm (last accessed May 17, 2011). 3 When an advertiser disagrees with the NAD's findings, the decision can be appealed to the National Advertising Review Board (“NARB”) for additional review. See Schlichenmayer Decl. Ex. 3 at Section 3. If the advertiser does not respond or otherwise does not comply with the NARB’s recommendations, NAD may refer the file to an appropriate government agency for further investigation. See id. at Section 4.1(B). 4 Section 5 of the Federal Trade Commission Act prohibits an advertiser from making misleading or deceptive claims about its product. See 15 U.S.C. § 45; see also Federal Trade Commission, FTC Policy Statement on Deception, http://www.ftc.gov/bcp/policystmt/addecept.htm (last visited May 17, 2011).
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 10 of 27
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DEFENDANT’S MOTION TO DISMISS - 5 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
LEGAL STANDARDS FOR DISMISSAL
Standard for Dismissal Under Fed. R. Civ. P. 12(b)(1)
“Fed. R. Civ. P 12(b)(1) authorizes the dismissal of a case for lack of subject matter
jurisdiction when the district court lacks the statutory and constitutional power to adjudicate the
case.” See Marks v. Garman, No. C07-5682FDB/JKA, 2009 WL 151259, *2 (W.D. Wash. Jan.
20, 2009), quoting Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010
(5th Cir. 1998). Article III of the Constitution limits the exercise of judicial power of the United
States to actual cases or controversies. Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). The
Article III case or controversy provision requires that the plaintiff have standing to bring a claim
and that the controversy be ripe for adjudication to “prevent courts from becoming enmeshed in
abstract questions which have not concretely affected the parties.” Pacific Legal Found. v. State
Energy Resources, 659 F.2d 903, 915 (9th Cir. 1981). The party invoking the court’s authority
has the burden of demonstrating that he or she has standing to bring the action and that the matter
is ripe for adjudication. W. Birkenfeld Trust v. Bailey, 827 F.Supp. 651, 663 (E.D. Wash. 1993).
Attacks on subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) can be either facial,
confining the inquiry to allegations in the complaint, or factual, permitting the court to look
beyond the complaint. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “[T]he district court
is not confined by the facts contained in the four corners of the complaint—it may consider facts
and need not assume the truthfulness of the complaint.” Americopters, LLC v. Fed. Aviation
Admin., 441 F.3d 726, 732 n. 4 (9th Cir. 2006). The court “need not presume the truthfulness of
the plaintiffs’ allegations” and may consider affidavits furnished by both parties. White, 227
F.3d at 1242. If the moving party files a factual motion by presenting affidavits or other
evidence properly brought before the court, the party opposing the motion must furnish affidavits
or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction. St.
Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989).
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DEFENDANT’S MOTION TO DISMISS - 6 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Standard for Dismissal Under Fed. R. Civ. P. 12(b)(2)
A court must dismiss a complaint when it lacks personal jurisdiction over a defendant
who does not possess sufficient contacts with the forum. Fed. R. Civ P. 12(b)(2); Intern. Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945). The plaintiff has the burden to show by
affirmative proof that jurisdiction exists. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d
797, 800 (9th Cir. 2004).
Personal jurisdiction may be either general or specific. General jurisdiction involves an
“exacting standard” of proof, by which the plaintiff must show “continuous and systematic
general business contacts that approximate physical presence in the forum state” by the
defendant. Schwarzenegger, 374 F.3d at 801 (internal citations and quotations omitted).
“Factors to be taken into consideration are whether the defendant makes sales, solicits or engages
in business in the state, serves the state’s markets, designates an agent for service of process,
holds a license, or is incorporated there.” Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223
F.3d 1082, 1086 (9th Cir. 2000). Simply engaging in commerce in the state is insufficient. Id.
The Ninth Circuit rarely finds general personal jurisdiction over a non-resident defendant, “even
where the defendant’s contacts were quite extensive.” Jason v. UNITE HERE, C05-820 JLR,
2005 WL 3278004, at *4 (W.D. Wash. Dec. 2, 2005) (Robart, J.) (quoting Amoco Egypt Oil Co.
v. Leonis Navigation Co., 1 F.3d 848, 851 n.3 (9th Cir. 1993)).
Specific jurisdiction is much narrower. It permits the exercise of jurisdiction over a
defendant only when the cause of action arises from the defendant’s contacts with the forum.
Schwarzenegger, 374 F.3d at 801-2.
ARGUMENT
Amazon’s Complaint is not justiciable because there is no case or controversy between
adverse litigants; the plaintiff lacks standing to bring the action, and the matter is not ripe for
adjudication in the first instance. Moreover, Amazon has failed to demonstrate that this Court
has personal jurisdiction over non-resident defendant NACS. Thus, the Complaint must be
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DEFENDANT’S MOTION TO DISMISS - 7 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
dismissed pursuant to both Fed. R. Civ. P. 12(b)(1) and 12(b)(2). But even if the Court
determines that it has jurisdiction to decide this dispute, equitable and prudential considerations
weigh against the Court exercising its discretion to accept this suit for declaratory judgment.
I. Amazon’s Suit for Declaratory Judgment Should Be Dismissed for Lack of Subject Matter Jurisdiction Because There is No Case or Controversy.
Article III of the Constitution limits the jurisdiction of the federal courts to actual cases
and controversies, as distinguished from “advisory opinions.” F.X. Maltz, Ltd. v. Morgenthau,
556 F.2d 123, 125 (2d Cir. 1977). In the context of the Declaratory Judgment Act, the Supreme
Court has held that the question a court must ask is “whether the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties having adverse legal
interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941) (emphasis added). The Supreme
Court recently reaffirmed that an “actual controversy” for purposes of the Declaratory Judgment
Act exists only where a dispute is:
[D]efinite and concrete, touching the legal relations of parties having adverse legal interests; and [is]. . . real and substantial and admi[ts] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.
MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764, 771 (2007) (quotations omitted).
The Court’s evaluation of whether a justiciable case or controversy exists here turns upon
its analysis of two closely related (and often overlapping) constitutional doctrines: standing and
ripeness. Article III’s “case or controversy” provision creates an “irreducible constitutional
minimum” of standing for all federal court plaintiffs, who must demonstrate each of the
following:
(1) that the plaintiff have suffered an “injury in fact,” an invasion of a judicially cognizable interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) that there be a causal connection between the injury and the conduct complained of -- the injury must be fairly traceable to the challenged action of the defendant, and not the
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DEFENDANT’S MOTION TO DISMISS - 8 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
result of the independent action of some third party not before the court; and (3) that it be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
Bennett v. Spear, 520 U.S. 154, 167 (1997); Lujan, 504 U.S. at 560-61.5 For a suit to be ripe
within the meaning of Article III, it must present “‘concrete legal issues, presented in actual
cases, not abstractions.’” United Pub. Workers v. Mitchell, 330 U.S. 75, 89 (1947) (quoting Elec.
Bond & Share Co. v. Sec. & Exch. Comm’n, 303 U.S. 419, 443 (1938)). Whereas “standing is
primarily concerned with who is a proper party to litigate a particular matter, ripeness addressees
when that litigation may occur.” Lee v. Oregon, 107 F.3d 1382, 1387 (9th Cir. 1997) (emphasis
in original); see also Sacks v. Office of Foreign Assets Control, 466 F.3d 764, 773 (9th Cir. 2006)
(“[T]he constitutional component of the ripeness inquiry . . . in many cases . . . coincides
squarely with standing's injury in fact prong.”)
Together, the standing and ripeness tests determine whether the case or controversy
requirement is met. If Amazon cannot demonstrate the existence of both standing and ripeness,
the Court must dismiss the case for lack of a justiciable case or controversy.
A. Amazon Does Not Have Standing to Bring Suit Against NACS Because It Cannot Identify any Concrete, Imminent Injury That Is Fairly Traceable to NACS.
The question of standing is ultimately a threshold determination concerning “whether the
litigant is entitled to have the court decide the merits of the dispute or of particular issues.”
Warth v. Seldin, 422 U.S. 490, 498 (1975). Amazon lacks standing to sue NACS because it has
not satisfied the first two factors of analysis: (1) Amazon has not suffered any actual or imminent
harm (“injury-in-fact”) that is (2) fairly traceable to action by NACS and not by the independent
action of some third party (“causation”). Lujan, 504 U.S. at 560. Any suggestion that NACS
poses an actual or imminent risk of injury to Amazon is belied by the facts alleged (and the
notable omission of certain allegations) in Amazon’s Complaint. For example, Amazon does not 5 See also Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 99-100 (1979) (“A plaintiff must always have suffered a distinct and palpable injury to himself that is likely to be redressed if the requested relief is granted.”) (internal quotation omitted).
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DEFENDANT’S MOTION TO DISMISS - 9 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
allege that NACS threatened a Lanham Act Section 43(a) suit or any other cause of action. In its
February 2, 2011 letter to Amazon, NACS merely requested that Amazon review its textbook
pricing and advertising policies and provide NACS with an explanation of, and substantiation
for, advertising claims that made certain price comparisons. See Schlichenmayer Decl. at Ex. 1.
Amazon declined to provide a substantive reply to NACS’s request for substantiation, and as a
result NACS filed its NAD challenge on March 25, 2011.
The filing of the NAD proceeding, which is specifically designed to resolve advertising
disputes without resort to the courts, cannot give rise to a justiciable claim or controversy.
Neither the NAD nor NACS can take any action to compel Amazon to modify or withdraw its
advertising claims through the NAD’s process of voluntary self-regulation. The NAD cannot
assess any penalties, nor can it award any damages. At most, the NAD may refer the matter to
the FTC for further review if it reaches a decision adverse to the advertiser and the advertiser
fails to voluntarily comply with the NAD’s corrective recommendation(s). See Complaint at
¶33; see also Schlichenmayer Decl. Ex. 3 at Secs. 2.1(F) and 4.1.
The extent to which the FTC or other law enforcement agencies investigate or take
further action with respect to Amazon’s advertising claims is commended solely to their
independent enforcement discretion. The mere possibility of future enforcement by the FTC
does not present a concrete, imminent injury or threat of injury that is fairly traceable to NACS
that might give rise to an actual case or controversy as between Amazon and NACS. Rather, the
threat of any FTC action is the kind of speculative and independent action of a third party that
defeats standing. See Bennett, 520 U.S. at 167; see also Olitt v. Vacco, 97 Civ. 9139, 1998 WL
901727, *3 (S.D.N.Y. Dec. 28, 1998); Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)
(“Allegations of possible future injury do not satisfy the requirements of Art[icle] III. A
threatened injury must be ‘certainly impending’ to constitute injury in fact.”).
In Olitt, the plaintiff filed suit against the New York Attorney General seeking, among
other things, a declaratory judgment that despite plaintiff’s disbarment as an attorney, he was still
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 15 of 27
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DEFENDANT’S MOTION TO DISMISS - 10 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
entitled to represent parties to securities arbitrations. 1998 WL 901727 at *3. Plaintiff alleged
that two complaints had been filed against him for the unauthorized practice of law, but admitted
that no action had been taken against him and no criminal or quasi criminal proceedings were
pending against him. Id. at *1 and *3. The court dismissed the declaratory judgment claim for
lack of subject matter jurisdiction, holding that the possibility “[t]hat plaintiff may do or say
something in the future to prompt an official action by the state presents a contingent, not an
actual, controversy and is an insufficient basis for this court’s jurisdiction.” Id. at *3.6
To have standing to sue, Amazon must identify some injury to legal rights or legally
protected interests that is attributable to NACS, and it must show that the alleged injury has
occurred, is imminent, or is certainly impending:
[A] litigant first must clearly demonstrate that he has suffered an injury in fact. That injury, we have emphasized repeatedly, must be concrete in both a qualitative and temporal sense. The complainant must allege an injury to himself that is distinct and palpable, as opposed to merely abstract, and the alleged harm must be actual or imminent, not conjectural or hypothetical . . . A federal court is powerless to create its own jurisdiction by embellishing otherwise deficient allegations of standing.
See Whitmore, 495 U.S. at 155-56. The allegations of injury or actual controversy that Amazon
pleads are too attenuated and not sufficiently imminent to establish standing to assert a
6 The Supreme Court in Whitmore analyzed United States v. SCRAP, 412 U.S. 669 (1973), which it said “surely went to the very outer limit of the law” as one of the most attenuated injuries conferring Article III standing. 495 U.S. at 158. In SCRAP, an environmental group challenged the Interstate Commerce Commission’s (“ICC’s”) approval of a surcharge on railroad freight rates, claiming that the ICC’s action on the Washington metropolitan area would increase the use of non-recyclable commodities, which in turn would cause an adverse environmental impact and cause the group’s members to suffer “economic, recreational and aesthetic harm.” 412 U.S. at 678. More specifically, the environmental group alleged specific and perceptible harms -- depletion of natural resources and increased littering -- that would befall its members imminently if the ICC orders were not reversed. That bald statement, even if incorrect, was held sufficient to withstand a motion to dismiss, because the SCRAP plaintiff may have been able to show at trial that the string of occurrences alleged would happen immediately. Id. at 689.
Even under the analysis of the standing question in SCRAP, Amazon’s asserted injury is not enough to establish jurisdiction. Amazon does not make -- and could not responsibly make -- a similar claim of immediate harm. To paraphrase Whitmore, “[i]t is just not possible for [Amazon] to prove in advance that [the NAD’s possible adverse opinion and referral of certain advertising claims to the FTC for review and investigation] will lead to any particular result in its case. Thus, unlike the injury alleged in SCRAP, there is no amount of evidence that potentially could establish that [Amazon’s] asserted future injury is ‘real and immediate.’” See Whitmore, 495 U.S. at 159.
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DEFENDANT’S MOTION TO DISMISS - 11 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
justiciable case or controversy against NACS. Id. By initiating a proceeding before the NAD,
NACS sought only a determination by the NAD whether Amazon’s pricing and refund claims
were fairly and adequately substantiated. If the NAD found a lack of adequate substantiation,
NACS hoped that Amazon would voluntarily comply with the NAD’s corrective suggestions.
But NACS could not compel Amazon’s participation in that proceeding, nor could NACS or the
NAD compel Amazon to take any action of any kind that might constitute a cognizable “injury in
fact.” If Amazon wanted to avoid the NAD review altogether, it could have merely chosen not
to participate. There is no reason to bring this suit for declaratory judgment against NACS.
Amazon continues to sell textbooks on its Web site and to assert the same claims regarding
which NACS expressed skepticism.
Because Amazon fails to articulate any injury to it--much less an injury attributable to
NACS—that might confer standing to maintain this suit, the Court must dismiss the suit.
B. Amazon’s Fear of FTC Enforcement Is Remote, Speculative, and Not Ripe for Adjudication.
“A claim is not ripe for adjudication if it rests upon contingent future events that may not
occur as anticipated, or indeed may not occur at all.” Texas v. United States, 523 U.S. 296, 300
(1998) (internal quotation omitted). That is so because, if the contingent events do not occur, a
plaintiff will not have suffered an injury that is concrete and particularized enough to establish
the first element of standing.7 In this way, ripeness and standing are intertwined.
7 In Texas v. United States, the Court applied the ripeness doctrine to a suit filed by the state of Texas seeking a declaration that § 5 of the Voting Rights Act of 1965 did not apply to a Texas law which sought to hold local school boards accountable for student achievement in the public schools. 523 U.S. at 298. The Texas statute set forth a comprehensive scheme by which the State Commissioner of Education was empowered to select from numerous possible sanctions when a local school district fell short of certain accreditation criteria—including the appointment of a manager or management team to oversee the district’s operations with authority to approve or disapprove actions taken by a school principal, the school board, or the district superintendent. Id. Pursuant to § 5 of the Voting Rights Act of 1965, Texas applied for litigation preclearance from the United States Attorney General, who, in response, determined that certain provisions within the scheme might, under certain circumstances, result in violations of § 5. Id. at 298-99. The Supreme Court rejected the state’s ensuing litigation, holding that the state’s claim was not ripe for adjudication because it rested on future events that were too contingent. Id. at 300. The Texas scheme set forth numerous preconditions before the sanctions at issue would be imposed, prompting the Court
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DEFENDANT’S MOTION TO DISMISS - 12 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
As discussed above, Amazon has not demonstrated that it is under imminent threat of
injury—from NACS or anyone else. The NAD proceeding that NACS initiated is voluntary and
non-adjudicative. Amazon’s claim presents only “abstractions” rather than the “concrete legal
issues” required under the ripeness doctrine and depends upon the contingent future prospect of
potential events, like future investigation and enforcement by the FTC. Id.; see also United Pub.
Workers , 330 U.S. at 89. Any concrete or imminent risk of injury to Amazon could only come
as a result of subsequent, discretionary FTC enforcement under the FTC Act (and only if
Amazon’s claims are ever referred to the FTC for review at some remote point in the future).
Amazon’s inchoate fear of possible FTC review and enforcement at some unspecified future
time does not make this matter ripe for adjudication by this Court, at this time, against this
defendant.8 Accord Olitt, 1998 WL 901727, *3.
The Supreme Court has on limited occasions permitted litigants to challenge official
action believed to be contrary to law through the Declaratory Judgment Act so as not to expose
themselves to the risk of enforcement. See, e.g., Ex Parte Young, 209 U.S. 123 (1908); Steffel v.
Thompson, 415 U.S. 452 (1974); Abbott Labs. v. Gardner, 387 U.S. 136 (1967), overruled on
other grounds by Califano v. Sanders, 430 U.S. 99, 107 (1977). But such pre-enforcement
review is justified only if the litigant is being “coerced” to alter its primary conduct by the threat
of enforcement. In Steffel, for example, the petitioner sought a declaratory judgment that his
to state that “[u]nder these circumstances, where ‘we have no idea whether or when such [a sanction will be imposed,]’ the issue is not fit for adjudication.” Id. (internal quotations omitted) 8 In Russian Standard Vodka (USA), Inc. v. Allied Domecq Spirits & Wine USA, Inc., et al., 523 F.Supp.2d 376, 383 (S.D.N.Y. 2007), the court held that the defendant’s cease and desist letter and initiation of a proceeding at the NAD gave rise to an actual controversy under MedImmune. Even if the court’s analysis of the issues was correct, that case is factually distinguishable on several grounds. First, the plaintiff’s complaint asserted seven causes of action against defendants, only one of which was for declaratory judgment. (The remaining causes of action asserted claims for false advertising, false designation of origin, deceptive trade practices, unfair competition, and unjust enrichment.) There was unquestionably a “case or controversy” between the parties. Second, the cease and desist letter sent by defendants expressly warned plaintiff that, “[m]aking false statements about a competitor’ product constitutes . . .unfair competition and false advertising under . . . the Federal Trademark Act . . . .” Defendants later published a press release stating that they were exploring their legal remedies against the plaintiff. Third, there was a substantial history of public accusations asserted between the plaintiff and defendants regarding each other’s products prior to the initiation of the NAD proceeding and the lawsuit. None of those facts are presented here.
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 18 of 27
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DEFENDANT’S MOTION TO DISMISS - 13 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
handbilling activity was protected speech. Petitioner had been twice warned to stop handbilling
on an exterior sidewalk of a shopping center and had been threatened by police with arrest for
violation of Georgia criminal trespass law if he failed to do so. The Supreme Court held that the
case presented an actual controversy under Article III of the Constitution and the Federal
Declaratory Judgment Act because the alleged threats of prosecution in the circumstances
alleged were not “imaginary or speculative” and it was unnecessary for petitioner to expose
himself to actual arrest or prosecution to make his constitutional challenge. Steffel, 415 U.S. at
459.
In comparison, Amazon’s complaint critically lacks any allegation that the FTC or any
other authority has threatened it with enforcement proceedings under Section 5 of the FTC Act
or is otherwise “coercing” Amazon to modify its advertising claims. Absent a real and imminent
threat of enforcement, there is no need for judicial intervention because Amazon has failed to
show how any protected interests are at stake. Because Amazon’s claimed injury is only
“imaginary or speculative,” its declaratory judgment claim is neither ripe nor justiciable and
should be dismissed. Otherwise, any party that faced unthreatened, but remotely possible,
litigation could file suit under the Declaratory Judgment Act.
II. In Addition or Alternatively, Amazon’s Suit for Declaratory Judgment Should Be Dismissed Because This Court Lacks Personal Jurisdiction over NACS.
A court can exercise its power over a non-resident defendant (absent the defendant's
consent) only if it has general or specific jurisdiction. Bancroft & Masters, 223 F.3d at 1086.
Even if this Court possessed subject matter jurisdiction to adjudicate this dispute (which it does
not), the Court lacks personal jurisdiction because NACS does not have sufficient contacts with
the State of Washington to satisfy constitutional due process considerations. See Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984). Amazon’s allegations do not –
and cannot – satisfy the tests for either “general” or “specific” personal jurisdiction.
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DEFENDANT’S MOTION TO DISMISS - 14 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Personal jurisdiction over a nonresident defendant is tested by a two-part analysis. First,
the exercise of jurisdiction must satisfy the requirements of the applicable state long-arm statute.
Second, the exercise of jurisdiction must comport with federal due process. Chan v. Society
Expeditions, Inc., 39 F.3d 1398, 1404-05 (9th Cir. 1994). Because the Washington State long-
arm statute is coextensive with the outer limits of due process, the Court need analyze only the
second part of the test. See Easter v. Am. W. Fin., 381 F.3d 948, 960 (9th Cir. 2004)
(“Washington's long-arm statute, section 4.28.185 of the Washington Revised Code, permits the
exercise of jurisdiction to the full extent of the due process clause of the United States
Constitution.”).
A. There Is No Basis to Exercise General Jurisdiction over NACS.
Where a defendant has “substantial” or “continuous and systematic” contacts with the
forum state, it is subject to general jurisdiction and can be haled into court on any action, even
one unrelated to its contacts. As noted above, a plaintiff asserting general jurisdiction must meet
an “exacting standard.” See UNITE HERE, 2005 WL 3278004, at *4-6, quoting
Schwarzenegger, 374 F.3d at 801. A defendant is not subject to general jurisdiction unless its
contacts are so “substantial or continuous and systematic” that they “approximate physical
presence” in the forum state. Id. (quoting Bancroft & Masters, 223 F.3d at 1086). The Ninth
Circuit “regularly [has] declined to find general jurisdiction even where the [defendant's]
contacts were quite extensive.” Id. (citing Amoco Egypt Oil Co., 1 F.3d at 851 n. 3).
Amazon’s Complaint alleges as a basis for arguing general jurisdiction that: (1) NACS
has several members located in Washington, Complaint ¶ 10; (2) NACS conducts nationwide
efforts to assist those members to compete with Amazon in Washington, id. ¶ 11; and (3) that
NACS collects dues from its Washington members, id. ¶ 12. But these allegations are
insufficient to show that this Court may extend jurisdiction over NACS. The indisputable facts
remain that NACS is a trade association based in Ohio. See Schlichenmayer Decl. ¶ 6. NACS
has no offices or employees in Washington, and is not licensed or registered to do business there.
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DEFENDANT’S MOTION TO DISMISS - 15 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Id. ¶ 7. As a settled legal principle, NACS’s receipt of dues from its local members cannot
establish jurisdiction. See UNITE HERE, C05-820 JLR, 2005 WL 3278004, *4-6. Instead, to
establish jurisdiction over a national organization like NACS, Plaintiff must show that NACS
controlled its local members or, at the very least, “substantially influenced [their]
decisionmaking . . . .” Donatelli v. Nat'l Hockey League, 893 F.2d 459, 469 (1st Cir. 1990) (no
personal jurisdiction over NHL based on local team’s contacts). Accord UNITE HERE, C05-820
JLR, 2005 WL 3278004, at *4-6 (no personal jurisdiction when national organization was not
involved in the operations of the local member).
Amazon has not made – and cannot make – any such allegations. NACS members
operate independently of NACS, and NACS lacks the ability to control its members. See
Schlichenmayer Decl. ¶ 5. That NACS has Washington-based members thus cannot constitute
sufficient contacts “such that it is fair to say that it is actually doing business ‘in’ the forum
state.” See UNITE HERE, C05-820 JLR, 2005 WL 3278004, at *4. As a matter of fact and law,
NACS simply does not maintain “continuous and systematic” contacts with Washington that
might give rise to general jurisdiction.
B. There Is Also No Basis to Exercise Specific Jurisdiction over NACS.
The Ninth Circuit has held that specific jurisdiction exists where: (1) the defendant has
done some act or consummated some transaction with the forum or performed some act by
which it purposefully availed itself of the privilege of conducting activities in the forum, thereby
invoking the benefits and protections of its laws, (2) the claim arises out of or results from the
defendant's forum-related activities, and (3) the exercise of jurisdiction would be reasonable.
Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995) (citing Data Disc.
Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1287 (9th Cir. 1977)). The “purposeful
availment” requirement ensures that a party has sufficient contacts with the forum state to put it
on notice that it could be haled into court there; “random, fortuitous, or attenuated contacts” are
not enough to satisfy the constitutional requirements of Due Process. See Ziegler v. Indian River
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DEFENDANT’S MOTION TO DISMISS - 16 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Cnty., 64 F.3d 470, 473 (9th Cir. 1995). If the plaintiff meets his burden on the first two parts of
the test, the burden shifts to the defendant to satisfy the third part by presenting a “compelling
case” that the exercise of jurisdiction is unreasonable. Schwarzenegger, 374 F.3d at 802 (9th Cir.
2002) (citation omitted).
Amazon has not established a prima facie case of specific jurisdiction because there is no
evidence that its claim arises from any act of NACS that bears any connection to the State of
Washington. To establish that a claim “arises out of forum-related activities,” a court must
determine “whether [a plaintiff’s] claims would have arisen but for [a defendant’s] contacts
with” the forum state. Doe v. Unocal Corp., 248 F.3d 915, 924 (9th Cir. 2001). The NAD
proceeding that purportedly gives rise to this demand for declaratory judgment was filed and
initiated in the State of New York, not Washington. Complaint ¶ 4. There is no other action
alleged in the Complaint that arises from any NACS contact with the State of Washington that
might give rise to this Court’s exercise of specific jurisdiction under the Washington long arm
statute.9 Thus, this Court’s exercise of specific personal jurisdiction over NACS would be
unreasonable and in violation of Due Process.
Because this Court does not have authority to exercise either general or specific
jurisdiction over NACS, Amazon’s Complaint must be dismissed pursuant to Fed. R. Civ. P.
12(b)(2).10
9 In Paragraph 30 of the Complaint, Amazon alleges that NACS’s February 2, 2011 letter “suggested that [NACS] may commence a legal challenge to Amazon’s ability to advertise that it offers textbooks at up to 30% off of list price.” The letter speaks for itself and does not threaten any lawsuit or allege any legal violation. Nevertheless, to the extent that Amazon might argue that this letter confers specific jurisdiction over NACS, the Ninth Circuit has definitively held that even a “cease and desist” letter (which NACS’s letter is not) is not in and of itself sufficient to establish personal jurisdiction over the sender of the letter. Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1208 (9th Cir. 2006). 10 The venue statute, 28 U.S.C. § 1391, provides that in a civil action where subject matter jurisdiction is founded not solely on diversity, the action may 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.” Id. Thus, venue is also improper for all of the reasons discussed above, and the Court may also dismiss the case under Fed. R. Civ. P. 12(b)(3).
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DEFENDANT’S MOTION TO DISMISS - 17 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
C. The Court Should Grant NACS an Award of Its Attorneys’ Fees Under Wash. Rev. Code § 4.28.185(5).
The Washington long-arm statute authorizes the award of attorneys’ fees to a prevailing
non-resident defendant haled into Washington under the long-arm statute to compensate the
defendant for the added expense caused by plaintiffs’ assertions of long-arm jurisdiction.11 See
Scott Fetzer Co. v. Weeks, 786 P.2d 265, 274 (Wash. 1990) (“In sum, we hold that RCW
4.28.185(5) authorizes an award of attorney fees when a foreign defendant, sued under the long-
arm statute, obtains a dismissal for want of personal jurisdiction.”). In Fetzer, the Supreme
Court of Washington held a defendant who successfully defeats a claim based on lack of
jurisdiction should be awarded its fees for the “burdens and inconveniences which would have
been avoided had the trial been conducted at the place of his domicile.” Id. at 268 (internal
quotations omitted). To the extent that the Court dismisses this lawsuit on the basis that there is
no personal jurisdiction, the Court should grant NACS its reasonable attorneys’ fees expended in
obtaining the dismissal. Id.; see also O.B. Williams Company v. S.A. Bendheim West, Inc., No.
C08-1155JLR, 2010 WL 3430404, *2-3 (W.D. Wash. Aug. 30, 2010) (fees awarded under
statute).
III. This Lawsuit, if Permitted, Would Undermine Self-Regulation in Advertising Disputes and Clog the Courts with Similar Preemptive Suits.
Even if the Court were to determine that it has subject matter and personal jurisdiction in
this case, the Court can and should dismiss it on discretionary or prudential grounds. The
entertainment of a declaratory judgment case is always discretionary. See 28 U.S.C. § 2201(a)
(court “may” grant declaratory relief); Pub. Serv. Comm’n v. Wycoff, 344 U.S. 237, 241 (1952)
(The Declaratory Judgment Act is “an enabling Act, which confers a discretion on the courts
rather than an absolute right upon the litigant”); 10B Charles Alan Wright et al., Federal Practice 11 By bringing this suit against NACS, Amazon necessarily invoked Washington’s long arm statute because a federal court’s analysis of jurisdiction over a non-resident defendant begins with a determination of whether the requirements of the applicable state long-arm statute are satisfied. Chan, 39 F.3d at 1404-05; Peterson v. Kennedy, 771 F.2d 1244, 1262 n. 12 (9th Cir. 1985) (“The district court’s determination of a party’s amenability to suit is made by reference to the law of the state in which it sits.”)
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DEFENDANT’S MOTION TO DISMISS - 18 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
and Procedure § 2759 (3d ed. 1998) (same). As the Supreme Court observed in Wilton v. Seven
Falls Co., 515 U.S. 277, 287 (1995), “[i]n the declaratory judgment context, the normal principle
that federal courts should adjudicate claims within their jurisdiction yields to considerations of
practicality and wise judicial administration.” If a court “know[s] at the commencement of
litigation that it will exercise its broad statutory discretion to decline declaratory relief” on
equitable grounds, it need not “go through the futile exercise of hearing [the] case on the merits
first” and should simply decline jurisdiction at the outset. Id.
In this instance, equitable considerations weigh heavily against the Court’s entertainment
of Amazon’s request for declaratory judgment. Amazon’s Complaint appears to have been
brought solely to avoid the NAD’s review of its advertising claims by exploiting the NAD’s
jurisdictional rule that precludes review of disputes that are the subject of a pending court case.
See Schlichenmayer Decl. Ex. 3 at § 2.2(B)(i)(b) and Ex. 4. Rather than risk a defeat before the
NAD and a determination that its advertisements were either untruthful or inadequately
substantiated, Amazon raced to the courthouse and filed this preemptive lawsuit to hale NACS
into federal court merely because NACS dared to voice concerns about Amazon’s
advertisements. The practice of seeking a declaratory judgment anytime a voluntary proceeding
is brought before the NAD to challenge an advertiser’s claims does real violence to the NAD
review process (widely recognized as a highly effective, impartial, and experienced arbiter of
advertising disputes)12 and would clog the courts with meritless suits. The courts and the public
have an important interest in preserving the integrity of the self-regulatory process. The viability
of the NAD as an alternative dispute resolution forum would be substantially undermined if
challenged companies were permitted to simply avoid that process by filing a declaratory
judgment action.
12 The NAD review process is recognized by courts, industry and the FTC as expert in the assessment of the truth and accuracy of advertising claims. See, e.g., AMF, Inc. v. Brunswick Corp., 621 F. Supp. 456, 462 (E.D.N.Y. 1985) (praising the NAD’s review process to safeguard fairness in advertising).
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DEFENDANT’S MOTION TO DISMISS - 19 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
At a broader level, Amazon’s suit also chills the ability to informally and efficiently
question advertising claims or substantiation in support of such claims. It would abuse the
Declaratory Judgment Act if an advertiser could avoid inquiries about its claims altogether if it
was permitted simply to file suit for declaratory judgment and force those seeking information or
substantiation to defend such suits in federal court. Declining to exercise discretionary
jurisdiction under the Declaratory Judgment Act and dismissing this case on equitable or
prudential grounds would rightly discourage Amazon and other companies from engaging in
such gamesmanship, without in any way impairing advertisers’ rights.
CONCLUSION
NACS has been unfairly obliged to incur substantial and unnecessary expense to defend
against this baseless lawsuit. Amazon has manufactured a meritless claim against a blameless,
non-resident defendant in an effort to frustrate the NAD’s review of Amazon’s claims and to
punish NACS for initiating that inquiry.
For all of the reasons set forth above, the Court should dismiss Amazon’s Complaint
against NACS with prejudice and in its entirety. The Court should also award NACS its fees and
costs under R.C.W. § 4.28.185(5).
DATED this 27th day of May, 2011.
ARENT FOX LLP /s/ Ralph A. Taylor, Jr. Ralph A. Taylor, Jr., Admitted Pro Hac Vice Matthew Wright, Admitted Pro Hac Vice Attorneys for Defendant National Association of College Stores, Inc. 1050 Connecticut Avenue, N.W. Washington, DC 20036 Telephone: (202) 857-6000 Facsimile: (202) 857-6395 Email: [email protected] [email protected]
FOSTER PEPPER PLLC /s/ Charles P. Rullman
Tim J. Filer, WSBA No. 16285 Charles P. Rullman, WSBA No. 42733 Attorneys for Defendant National Association of College Stores, Inc. 1111 Third Avenue, Suite 3400 Seattle, Washington 98101-3299 Telephone: (206) 447-4400 Facsimile: (206) 447-9700 Email: [email protected] [email protected]
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 25 of 27
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DEFENDANT’S MOTION TO DISMISS - 20 Case No. 2:11-CV-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
OF COUNSEL ARENT FOX LLP Marc L. Fleischaker Brian D. Schneider Counsel for Defendant National Association of College Stores, Inc. 1050 Connecticut Avenue, N.W. Washington, DC 20036 Tel: (202) 857-6000 Facsimile: (202) 857-6395
Case 2:11-cv-00754-JLR Document 14 Filed 05/27/11 Page 26 of 27
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[PROPOSED] ORDER GRANTING MOTION TO DISMISS - 1 Case No. 2:11-cv-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
The Honorable James L. Robart
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
AMAZON.COM, INC., a Delaware corporation, Plaintiff, v. NATIONAL ASSOCIATION OF COLLEGE STORES, INC., an Ohio corporation, Defendant.
No. 2:11-cv-00754 [PROPOSED] ORDER GRANTING DEFENDANT’S MOTION TO DISMISS COMPLAINT FOR DECLARATORY RELIEF PURSUANT TO FED. R. CIV. P. 12(b)(1) and 12(b)(2)
THIS MATTER came before the Court on Defendant National Association of College
Stores, Inc.’s (“NACS’s”) Motion to Dismiss Complaint for Declaratory Relief Pursuant to Fed.
R. Civ. P. 12(b)(1) and 12(b)(2). The Court has considered the following submissions:
1. Defendant’s Motion to Dismiss Complaint for Declaratory Relief Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(2);
2. Declaration of Edward L. Schlichenmayer in Support of Defendant’s Motion to Dismiss Complaint for Declaratory Relief Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(2);
3. [Proposed] Order Granting Defendant’s Motion to Dismiss Complaint for Declaratory Relief Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(2);
4. Plaintiff’s Opposition, if any; and
5. Defendant’s Reply, if any.
Case 2:11-cv-00754-JLR Document 14-1 Filed 05/27/11 Page 1 of 2
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[PROPOSED] ORDER GRANTING MOTION TO DISMISS - 2 Case No. 2:11-cv-00754
FOSTER PEPPER PLLC1111 THIRD AVENUE, SUITE 3400
SEATTLE, WASHINGTON 98101‐3299
PHONE (206) 447‐4400 FAX (206) 447‐9700
Being fully advised, it is hereby ORDERED that Defendant’s Motion to Dismiss
Complaint for Declaratory Relief Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(2) is
GRANTED.
DATED this ____ day of ____________________, 2011.
_________________________________________ Honorable JAMES L. ROBART
United States District Judge
Submitted By:
ARENT FOX LLP /s/ Ralph A. Taylor, Jr. Ralph A. Taylor, Jr., Admitted Pro Hac Vice Matthew Wright, Admitted Pro Hac Vice Attorneys for Defendant National Association of College Stores, Inc. 1050 Connecticut Avenue, N.W. Washington, DC 20036 Telephone: (202) 857-6000 Facsimile: (202) 857-6395 Email: [email protected]
FOSTER PEPPER PLLC /s/ Charles P. RullmanTim J. Filer, WSBA No. 16285 Charles P. Rullman, WSBA No. 42733 Attorneys for Defendant National Association of College Stores, Inc. 1111 Third Avenue, Suite 3400 Seattle, Washington 98101-3299 Telephone: (206) 447-4400 Facsimile: (206) 447-9700 Email: [email protected]
OF COUNSEL ARENT FOX LLP Marc L. Fleischaker Brian D. Schneider Counsel for Defendant National Association of College Stores, Inc. 1050 Connecticut Avenue, N.W. Washington, DC 20036 Telephone: (202) 857-6000 Facsimile: (202) 857-6395
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