The Honorable James L. Robart 2 7 UNITED STATES DISTRICT ... · Case No. 2:11-cv-00754 FOSTER PEPPER PLLC 1111 THIRD AVENUE, SUITE 3400 SEATTLE, WASHINGTON 98101‐3299 PHONE (206)

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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



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]

[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]

[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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CORPORATE DISCLOSURE STATEMENT - 2 Case No. 2:11-cv-00754



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


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DEFENDANT’S MOTION TO DISMISS Case No. 2:11-CV-00754



PHONE (206) 447‐4400 FAX (206) 447‐9700


UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON AT SEATTLE


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


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DEFENDANT’S MOTION TO DISMISS - i Case No. 2:11-CV-00754



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


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DEFENDANT’S MOTION TO DISMISS - ii Case No. 2:11-CV-00754



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


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DEFENDANT’S MOTION TO DISMISS - iii Case No. 2:11-CV-00754



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


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DEFENDANT’S MOTION TO DISMISS - iv Case No. 2:11-CV-00754



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



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


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DEFENDANT’S MOTION TO DISMISS - 1 Case No. 2:11-CV-00754



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).


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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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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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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).


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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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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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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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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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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


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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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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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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.


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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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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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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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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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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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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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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]


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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



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[PROPOSED] ORDER GRANTING MOTION TO DISMISS - 1 Case No. 2:11-cv-00754



PHONE (206) 447‐4400 FAX (206) 447‐9700


UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON

AT SEATTLE


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



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]

[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]

[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 14-1 Filed 05/27/11 Page 2 of 2





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Documents

The Honorable James L. Robart 2 7 UNITED STATES DISTRICT ... · Case No. 2:11-cv-00754 FOSTER PEPPER PLLC 1111 THIRD AVENUE, SUITE 3400 SEATTLE, WASHINGTON 98101‐3299 PHONE (206)