1. NATIONAL ASSOCIATION OF FORENSIC ) COUNSELORS, INC., a Nevada Non-Profit ) Corporation; et al., ) ) Plaintiffs, ) ) v. ) Case No. 6:14-cv-00187-RAW ) 1. NARCONON INTERNATIONAL, a ) California Non-Profit Corporation; et al., ) ) Defendants. )
MOTION TO DISMISS OF DEFENDANT RELIGIOUS TECHNOLOGY CENTER, INC. FOR LACK OF PERSONAL JURISDICTION OR, ALTERNATIVELY, FOR FAILURE TO STATE A CLAIM, AND BRIEF IN SUPPORT
David L. Bryant, OBA No. 1262 David E. Keglovits, OBA No. 14259 Amelia A. Fogleman, OBA No. 16221 GABLEGOTWALS 1100 ONEOK Plaza 100 West Fifth Street Tulsa, Oklahoma 74103-4217 (918) 595-4800 ATTORNEYS FOR DEFENDANT RELIGIOUS TECHNOLOGY CENTER
6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 1 of 25
{1270626;} i TABLE OF CONTENTS INTRODUCTION ..................................................................................................................... 1 ARGUMENT AND AUTHORITIES ....................................................................................... 3 I. THE COURT LACKS PERSONAL JURISDICTION OVER RTC ............... 3 A. Law of General or Specific Personal Jurisdiction ................................. 3 B. RTC Lacks the Minimum Contacts to Support General or Specific Jurisdiction Over RTC ............................................................. 6 1. RTC has no contacts with Oklahoma ............................................. 6 2. The allegation that RTC controls Narconon is baseless ................. 6 3. Plaintiffs website allegations cannot establish personal jurisdiction over RTC.................................................................... 7 4. Plaintiffs conspiracy allegations do not support personal jurisdiction over RTC.................................................................... 8 C. The Exercise of Jurisdiction Over RTC Would Violate Due Process .................................................................................................. 11 1. Burden on the defendant of litigating in the forum ...................... 11 2. Forum states interest in adjudicating the dispute ........................ 12 3. Plaintiffs interest in convenient and effective relief .................... 12 4. Interstate judicial systems interest in obtaining efficient resolution .................................................................................... 13 5. State interest in furthering fundamental substantive social policies ....................................................................................... 13 II. ALTERNATIVELY, PLAINTIFFS CLAIMS AGAINST RTC SHOULD BE DISMISSED FOR FAILURE TO STATE A CLAIM............. 14 CONCLUSION ....................................................................................................................... 18
6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 2 of 25
{1270626;} ii
INDEX OF AUTHORITIES Cases: Am. Educ. Corp. v. Chase, 2006 WL 2044932 47788 (W.D. Okla. July 13, 2006) ..................................................... 3 Am. Land Program, Inc. v. Bonaventura Uitgevers Maatschappij, N.V., 710 F.2d 1449 (10th Cir. 1983) ........................................................................................ 9 Annie Oakley Eaters., Inc. v. Sunset Tan Corporate & Consulting, LLC, 703 F. Supp. 2d 881 (N.D. Ind. 2010) ............................................................................ 11 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ................................................................................................ 16, 17 Bridges v. Lane, 351 Fed. Appx. 284 (10th Cir. 2009) ............................................................................. 16 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) .................................................................................................... 4, 5 Busch v. Viacom Intl, Inc., 477 F. Supp. 2d 764 (N.D. Tex. 2007) ........................................................................... 11 Clark v. Tabin, 400 F. Supp. 2d 1290 (N.D. Okla. 2005) ...................................................................... 8, 9 Daimler AG v. Bauman, 134 S. Ct. 746 (2014) ............................................................................................... 4, 5, 7 Doe v. Natl Med. Servs., 974 F.2d 143 (10th Cir. 1992) .......................................................................................... 4 Dudnikov v. Chalk & Vermillion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008) ................................................................................ 3, 4, 5 Firemans Fund Ins. Co. v. Thyssen Mining Construction of Canada, Ltd., 703 F.3d 488 (10th Cir. 2012) .......................................................................................... 5 Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408 (1984) ........................................................................................................ 4 Intl Shoe Co. v. Wash., 326 U.S. 310 (1945) ................................................................................................ 3, 4, 5 Kerber v. Qwest Group Life Ins. Plan, 647 F.3d 950 (10th Cir. 2011) ........................................................................................ 15 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 3 of 25
{1270626;} iii
Mandelbaum v. Fiserv, Inc., 787 F. Supp. 2d 1226 (D. Colo. 2011) ........................................................................... 15 OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086 (10th Cir. 1998) .......................................................................... 11, 13, 14 Outdoor Channel, Inc. v. Performance One Media, LLC, 826 F. Supp. 2d (N.D. Okla. 2011) ................................................................................ 10 Peay v. Bellsouth Med. Assn Plan, 205 F.3d 1206 (10th Cir. 2000) ........................................................................................ 3 Peterson v. Grisham, 2008 WL 4363653 (E.D. Okla. Sept. 17, 2008) .............................................................. 17 Rambo v. American S. Ins. Co., 839 F.2d 1415 (10th Cir. 1988) ........................................................................................ 4 Robbins v. Okla., 519 F.3d 1242 (10th Cir. 2008) ...................................................................................... 16 Shrader v. Biddinger, 633 F.3d 1235 (10th Cir. 2011) .................................................................................... 7, 8 Sleepy Lagoon, Ltd. v. Tower Grp., Inc., 809 F. Supp. 2d 1300 (N.D. Okla. 2011) ........................................................................ 12 Soma Medical Intl v. Standard Chartered Bank, 196 F.3d 1292 (10th Cir. 1999) ........................................................................................ 7 Woods v. Prestwick House, Inc., 2011 OK 9 ..................................................................................................................... 13 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1979) ...................................................................................................... 11
6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 4 of 25
{1270626;} iv
Statutes and Other Authorities: 15 U.S.C. 1125 ....................................................................................................................... 14 Fed. R. Civ. P. 4(k)(1)(A)............................................................................................................ 4 Fed. R. Civ. P. 12(b)(2) ............................................................................................................... 1 Fed. R. Civ. P. 12(b)(6) ......................................................................................................... 1, 14 12 O.S. 1449 .................................................................................................................... 13, 14 12 O.S. 2004(F) ........................................................................................................................ 4
6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 5 of 25
{1270626;} 1 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF OKLAHOMA
1. NATIONAL ASSOCIATION OF FORENSIC ) COUNSELORS, INC., a Nevada Non-Profit ) Corporation; et al., ) ) Plaintiffs, ) ) v. ) Case No. 6:14-cv-00187-RAW ) 1. NARCONON INTERNATIONAL, a ) California Non-Profit Corporation; et al., ) ) Defendants. )
MOTION TO DISMISS OF DEFENDANT RELIGIOUS TECHNOLOGY CENTER, INC. FOR LACK OF PERSONAL JURISDICTION OR, ALTERNATIVELY, FOR FAILURE TO STATE A CLAIM, AND BRIEF IN SUPPORT Defendant Religious Technology Center (RTC) moves the Court to dismiss RTC from this action, pursuant to Fed. R. Civ. P. 12(b)(2), for lack of personal jurisdiction. Alternatively, RTC, specially appearing, moves to dismiss Plaintiffs claims against RTC, pursuant to Fed. R. Civ. P. 12(b)(6), for failure to state a claim against RTC. 1
INTRODUCTION Plaintiffs are two Nevada entities with a principal place of business in Indiana. They have sued RTC, a California non-profit religious corporation with a principal place of business in California. There is no personal jurisdiction over RTC. Specifically, Plaintiffs National Association of Forensic Counselors (NAFC) and its subsidiary American Academy of Certified Forensic Counselors, Inc. (CCFC), are Nevada
1 RTC has not opted into the optional unified responsive pleadings schedule proposed by Plaintiffs and Defendant Narconon of Oklahoma, Inc. in their Joint Application (Doc. 237) filed June 24, 2014. Accordingly, the normal briefing schedule established by the Courts local rules will apply to this Motion. 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 6 of 25
{1270626;} 2
entities based in Indiana. (Compl. 1-2). Plaintiffs claim to provide nationally accredited certifications for professionals working with criminal offenders in the fields of criminal justice, corrections, addictions and mental health. (Id. 88). NAFC and CCFC bring this action against 82 Defendants, including RTC. NAFC and CCFC allege five substantive counts against all Defendants, without differentiation or distinction between or among Defendants, purportedly seeking redress for alleged infringements of Plaintiffs trademark rights in their logo, accreditations and accreditation initials, by organizations and individuals involved in various Narconon treatment facilities and programs. RTC is a California non-profit religious corporation established in 1982 to own and maintain trademarks associated only with the religious services and products of the Scientology religion founded by L. Ron Hubbard. RTC does not own or license the mark Narconon or any other trademark or the L. Ron Hubbards technologies used in the secular and educational fields. Nor does RTC own, control, employ, participate in management or operation, or receive any funds from Narconon of Oklahoma, or from any of the secular social betterment organizations which license or use Mr. Hubbards technologies for secular, charitable, or educational purposes, including the Association for Better Living and Educational International (ABLE), Narconon International, Friends of Narconon International, or any of the organizations or individuals the Complaint refers to as the Narconon Network (Compl. 111), the Narconon Treatment Centers (Id. 112), or the Narconon Referral Entities (Id. 113). RTC does not belong in this lawsuit. First, the Court lacks personal jurisdiction over RTC. RTC has no contacts with Oklahoma related to this controversy or even generally. This undeniable truth is demonstrated by the facts presented in the Affidavit of Warren McShane, RTCs President, attached hereto as Exhibit 1 (McShane Aff.). The Complaint accurately 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 7 of 25
{1270626;} 3
alleges that RTC is not an Oklahoma resident. (Compl. 19). The Complaint barely attempts to plead any factual basis for personal jurisdiction over RTC, and to the nominal extent it does, Mr. McShanes Affidavit shows that Plaintiffs allegations are incorrect. The Complaint alleges nothing more than conclusory allegations most notably that RTC participated with other Defendants in a conspiracy to infringe Plaintiffs trademarks and related rights which are also refuted by Mr. McShanes Affidavit and in any event could not support a constitutional exercise of personal jurisdiction over RTC. Second, even if RTC were subject to personal jurisdiction in Oklahoma, which it is not, Plaintiffs Complaint should be dismissed against RTC because it fails to state a claim for relief against RTC. ARGUMENT AND AUTHORITIES I. THE COURT LACKS PERSONAL JURISDICTION OVER RTC. A. Law of General or Specific Personal Jurisdiction A court cannot grant any form of relief against a defendant unless the defendant is amenable to the courts personal jurisdiction. See Intl Shoe Co. v. Wash., 326 U.S. 310, 316 (1945). Plaintiffs bear the burden of establishing personal jurisdiction over each defendant. See Dudnikov v. Chalk & Vermillion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th Cir. 2008). Before a federal court can assert personal jurisdiction over a defendant in a federal question case, the court must determine (1) whether the applicable statute potentially confers jurisdiction by authorizing service of process on the defendant and (2) whether the exercise of jurisdiction comports with due process. Peay v. Bellsouth Med. Assn Plan, 205 F.3d 1206, 1209 (10th Cir. 2000) (quotations and citations omitted). The Lanham Act, under which Plaintiffs assert a claim, does not provide for nationwide service of process. See, e.g., Am. Educ. Corp. v. Chase, 2006 WL 2044932 47788, at *2 n.4 (W.D. Okla. July 13, 2006) (citing Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 22 (2d 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 8 of 25
{1270626;} 4
Cir. 2004)). Therefore, Fed. R. Civ. P. 4(k)(1)(A) requires the Court to apply the law of the forum state (Oklahoma). See Daimler AG v. Bauman, 134 S. Ct. 746, 753 (2014); Dudnikov, 514 F.3d at 1070. Oklahoma permits personal jurisdiction to be exercised on any basis consistent with the Constitution of this state and the Constitution of the United States. 12 O.S. 2004(F). Accordingly, this Court may exercise personal jurisdiction over RTC only if the due process requirements of the U.S. Constitution are met. The Supreme Court has held that to exercise jurisdiction in harmony with due process, defendants must have minimum contacts with the forum state, such that having to defend a lawsuit there would not offend traditional notions of fair play and substantial justice. Dudnikov, 514 F.3d at 1070 (quoting Intl Shoe, 326 U.S. at 316). In assessing a defendants contacts with the forum state, the Court may consider two types of personal jurisdiction: general and specific. See Rambo v. American S. Ins. Co., 839 F.2d 1415, 1418 (10th Cir. 1988). Jurisdiction over a defendant in a suit arising out of or related to the defendants contacts with the forum state is specific jurisdiction. In contrast, where the suit does not arise from or relate to the defendants contacts with the forum and jurisdiction is based on the defendants presence or accumulated contacts with the forum, the court exercises general jurisdiction. Id.; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.15 (1985). Consistent with constitutional due process, a court may exercise general personal jurisdiction over a defendant who has continuous or systematic contacts with the forum state. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 nn.8 & 9 (1984). But, as Daimler warns, a corporations continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity. Daimler, 134 S. Ct. at 757 (quoting Intl Shoe, 326 U.S. at 318). The contacts must be such that the defendant could reasonably anticipate being haled into court in that forum. See Doe v. Natl 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 9 of 25
{1270626;} 5
Med. Servs., 974 F.2d 143, 146 (10th Cir. 1992). The paradigm forum where a corporate defendant is subject to general personal jurisdiction is its place of incorporation and/or its principal place of business. Daimler, 134 S. Ct. at 759. In determining whether a corporation is subject to general personal jurisdiction in another forum, the question is not whether a foreign corporations in-forum contacts can be said to be in some sense continuous and systematic, it is whether the corporations affiliations with the State are so continuous and systematic as to render it essentially at home in the forum State. Id. at 762 (emphasis added); see Firemans Fund Ins. Co. v. Thyssen Mining Construction of Canada, Ltd., 703 F.3d 488, 493 (10th Cir. 2012) (quoting Goodyear Dunlop Tires Operations v. Brown, 131 S. Ct. 2846, 2851 (2011)) (same). Indeed, the Daimler Court rejected the notion that a corporation could be subject to general personal jurisdiction in numerous venues merely because it performs substantial activities or engages in substantial business in each of those venues: [T]he general jurisdiction inquiry does not focu[s] solely on the magnitude of the defendants in-state contacts. General jurisdiction instead calls for an appraisal of a corporations activities in their entirety, nationwide and worldwide. A corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, at home would be synonymous with doing business tests framed before specific jurisdiction evolved in the United States. Id. at 762, n. 20 (quoting id. at 767 (Sotomayor, J., concurring in the judgment)). A court may exercise specific personal jurisdiction over a defendant if the defendant has purposefully directed its activities at residents of the forum state and the plaintiffs injuries arise out of defendants forum-related activities. Dudnikov, 514 F.3d at 1071 (quoting Burger King Corp., 471 U.S. at 472). Any assertion of specific jurisdiction must always be consonant with traditional notions of fair play and substantial justice. Dudnikov, 514 F.3d at 1071 (citing Intl Shoe, 326 U.S. at 316). 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 10 of 25
{1270626;} 6
B. RTC Lacks the Minimum Contacts to Support General or Specific Jurisdiction Over RTC. 1. RTC has no contacts with Oklahoma. The Complaint fails to allege any facts showing that RTC has contacts with Oklahoma so continuous and systematic as to render it at home here, as necessary to support general personal jurisdiction over RTC. Nor could Plaintiffs possibly demonstrate that RTC has such contacts with Oklahoma. As shown by the McShane Affidavit: RTC is a California nonprofit religious corporation located in Los Angeles, California. (McShane Aff. 3.) RTC has no footprint in Oklahoma. It has no property in Oklahoma, no office or place of business, no mailing address or telephone listing, no bank accounts, no staff, and no registered agent. (Id. 5.) RTC does not conduct any business in Oklahoma. It has not contracted with any Oklahoma residents (including any of the Defendants in this case), has not recruited any Oklahoma residents for any staff position with RTC in Oklahoma or elsewhere, and has not committed any acts in Oklahoma. (Id. 6.)
Far from being essentially at home in Oklahoma, RTC has no presence in or contact with Oklahoma at all. 2. The allegation that RTC controls Narconon is baseless. The Complaint alleges [u]pon information and belief that RTC and ABLE strictly control Narconon as an arm of the Defendant Church of Scientology International through licensing agreements and L. Ron Hubbards teachings. (Compl. 247). In reality, RTC has no such licensing agreements. (McShane Aff. 10-12.) Furthermore, RTC has no authority to control, and does not control or attempt to control, any operations or activities of ABLE, Narconon International, or any of Narconon Internationals licensees, including Narconon of Oklahoma. (Id. 15.) Similarly, RTC has no authority to control, and does not control or attempt to control, any use of the Narconon mark or any other secular trademarks by any of those organizations. (Id. 8, 15.) RTC has never possessed, exercised, or attempted to 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 11 of 25
{1270626;} 7
exercise, any control, over any of the day to day operations of Narconon of Oklahoma, including student intake and staffing personnel or any use of any of Plaintiffs logos, trademarks or certifications. (Id. 15.) The allegation of RTC control over Narconon based on information and belief thus provides no basis for general or specific personal jurisdiction over RTC. 3. Plaintiffs website allegations cannot establish personal jurisdiction over RTC. The Complaint alleges that [p]ersonal jurisdiction exists over all Defendants because they purposefully directed their continuous and systematic activities at the forum state through the maintenance and operation of active websites to engage individuals in the forum state, which constitutes the requisite minimum contacts. (Compl. 86 (emphasis added).) That vague and conclusory allegation does not support general or specific jurisdiction over RTC. Although RTC has a website, this fact would clearly be insufficient in itself to subject RTC to general personal jurisdiction in Oklahoma under the standards set forth in Daimler. 134 S. Ct. at 761-62; see also Soma Medical Intl v. Standard Chartered Bank, 196 F.3d 1292, 1296 (10th Cir. 1999) (citing Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1123-24 (W.D. Pa. 1997)). Indeed, even prior to Daimlers recent recognition of the limitations of general jurisdiction, the Tenth Circuit held that [a] web site will subject a defendant to general personal jurisdiction only when the defendant has actually and deliberately used its website to conduct commercial transactions on a sustained basis with a substantial number of residents of the forum. 2 Shrader v. Biddinger, 633 F.3d 1235, 1243 (10th Cir. 2011) (quoting Smith v. Basin Park Hosp., Inc., 178 F. Supp. 2d 1225, 1235 (N.D. Okla. 2001)) (emphasis added). Plaintiffs have not, and cannot, allege such
2 It is questionable even whether a defendants use of a website in this manner may subject it to general jurisdiction over the defendant in a post-Daimler world. But in light of the nature of RTCs website, the Court need not decide that issue here. 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 12 of 25
{1270626;} 8
conduct here. RTC is a religious tax-exempt church and has never used its website to conduct any commercial transactions with any residents of Oklahoma, nor to direct any RTC activity into Oklahoma with the intent of engaging in any commercial interaction with Oklahoma or any residents of Oklahoma. (McShane Aff. 17.) Similarly, Plaintiffs website allegations fail to show any basis for specific jurisdiction over RTC. The Complaint specifically identifies the websites that allegedly use the NAFC logo and certifications improperly and without authorization. (Compl. 250.) RTC neither owns nor controls any of those website domains. (McShane Aff. 17.) And importantly, Plaintiffs do not and could not allege that any of their trademarks, logos, or certifications have ever appeared on RTCs website or in any other RTC materials. (Compl. 116-235, McShane Aff. 17.) 4. Plaintiffs conspiracy allegations do not support personal jurisdiction over RTC. The Complaint also alleges that personal jurisdiction exists over all Defendants due to Defendants participation in a civil conspiracy with its [sic] co-Defendants located in this forum. (Compl. 86.) But to establish personal jurisdiction based on a conspiracy theory, a plaintiff must offer more than bare allegations that a conspiracy existed, and must allege facts that would support a prima facie showing of a conspiracy. Shrader, 633 F.3d at 1242 (quoting Melea, Ltd. v. Jawer SA, 511 F.3d 1060, 1069 (10th Cir. 2007) (internal quotation omitted)). Indeed, [f]or jurisdiction based on the conspiracy theory of jurisdiction to exist in Oklahoma, an overt act of the conspiracy must have taken place in Oklahoma. Clark v. Tabin, 400 F. Supp. 2d 1290, 1297 (N.D. Okla. 2005) (citing Kohler Co. v. Kohler Intl, Ltd., 196 F. Supp. 2d 690, 697 (N.D. Ill. 2002)). Moreover, [t]he overt act must not just be alleged, but must be shown by affidavit that it likely took place. Mere allegations of conspiracy are insufficient. Clark, 400 F. Supp. 2d at 1297 (citing Baldridge v. McPike, Inc., 466 F.2d 65, 68 (10th Cir. 1972)); see also 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 13 of 25
{1270626;} 9
Am. Land Program, Inc. v. Bonaventura Uitgevers Maatschappij, N.V., 710 F.2d 1449, 1454 (10th Cir. 1983) (finding that the plaintiff failed to establish personal jurisdiction based on conspiracy because the defendants [] countered [plaintiffs allegations] by sworn affidavits that no conspiracy . . . existed, and the plaintiff failed to controvert defendants affidavits other than by conclusory allegations in its complaint and briefs). Here, Plaintiffs conspiracy allegations consist entirely of the following conclusory assertions, unsupported by any alleged facts: (1) RTC, Mr. Miscavige, ABLE and Church of Scientology participated in a scheme with the other Defendants to use the NAFC certifications to bolster the Narconon Network and its counselors in the public perception. (Compl. 249 (emphasis added).) (2) RTC and the other Defendants operate a common scheme . . . to promote the Narconon Network through the misuse of NAFC logos, trademarks, and certifications (Id. 253 (emphasis added).) (3) Defendants intentionally engaged in common plan to utilize NAFCs Certification, Mark and Logo to attract customers to Defendants drug treatment facilities. (Id. 293 (emphasis added).) (4) Defendants were aware of the common plan and the common purpose: to receive acclaim in the industry and consequently profit and to attract new members to the Church of Scientology, based on the use of the NAFC Certifications, Mark and Logo. (Id. 294 (emphasis added).) (5) Defendants acted in concert, agreed and cooperated to achieve such misuse and took affirmative steps to encourage the achievement of their plan. (Id. 295 (emphasis added).) None of these allegations states that RTC committed an overt act in Oklahoma in furtherance of the conspiracy. Clark, 400 F. Supp. 2d at 1297. And RTC has submitted a sworn affidavit[] that no conspiracy . . . existed, Am. Land Program, Inc., 710 F.2d at 1454, including that RTC never communicated to any other defendant about the use or potential use of Plaintiffs marks or logos. Thus, Plaintiffs allegations are precisely the type of naked conclusions that cannot support personal jurisdiction under a conspiracy theory. Repeated incantations of common 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 14 of 25
{1270626;} 10
plan, common scheme, or conspiracy, are no substitute for specific facts and fall far short of establishing a basis for specific personal jurisdiction over RTC in Oklahoma. See Schrader, supra. Finally, Plaintiffs allege that in order to promote Defendants Church of Scientology, RTC and the Narconon Treatment Centers, and ostensibly to further some sort of conspiracy to infringe the logos, marks, or certifications of NAFC or CCFC, RTCs Chairman made misstatements about NBAE (National Board of Addiction Examiners) certifications during an event held in Florida. (Compl. 248.) Specifically, in an apparent effort to suggest a connection between a Church event and Oklahoma, Plaintiffs allege that the Chairmans remarks were transmitted via satellite from a packed Ruth Eckerd Hall in Clearwater, Florida . . . . (Id. (emphasis added).) However, Plaintiffs do not identify the audience or destination for the satellite transmission and in no way link this transmission to Oklahoma. The referenced event was a religious convocation in celebration of the birth date of L. Ron Hubbard, Founder of the Scientology religion, and presided over by the ecclesiastical leader of the Scientology religion and RTCs Chairman of the Board, David Miscavige, as described in the McShane Affidavit. (McShane Aff. 18). The event was relayed by satellite only to the Church of Scientologys main church also in Clearwater, Florida, to accommodate an overflow of attendees. (Id.) Mr. Miscaviges remarks were not intended to be and were not broadcast into Oklahoma by any means. (Id). Plaintiffs allegations about the Florida event provide no support for general or specific jurisdiction over RTC here. Indeed, this would be so even if Chairman Miscaviges remarks had been broadcast into Oklahoma, which they were not. See, e.g., Outdoor Channel, Inc. v. Performance One Media, LLC, 826 F. Supp. 2d 1271, 1282 (N.D. Okla. 2011) (national 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 15 of 25
{1270626;} 11
broadcast of allegedly infringing programming did not constitute a relevant contact for purposes [of] the personal jurisdiction analysis); Annie Oakley Enters., Inc. v. Sunset Tan Corporate & Consulting, LLC, 703 F. Supp. 2d 881, 893 (N.D. Ind. 2010) (as a matter of law, the national broadcast of a television program does not give rise to personal jurisdiction in every state); Busch v. Viacom Intl, Inc., 477 F. Supp. 2d 764, 772 (N.D. Tex. 2007) ([I]n the context of a media or libel case, in order to support a finding of specific jurisdiction, Plaintiff must establish that [the forum] was the focal point of both the challenged broadcast and the harm suffered.). C. The Exercise of Jurisdiction Over RTC Would Violate Due Process. Even if Plaintiffs could make a prima facie showing of RTC minimum contacts with Oklahoma, an exercise of personal jurisdiction over RTC would be unreasonable, unfair, and in violation of due process. The Tenth Circuit has identified the following factors to be considered in determining the reasonableness of the assertion of personal jurisdiction: In determining whether exercise of jurisdiction is so unreasonable as to violate fair play and substantial justice, we consider: (1) the burden on the defendant, (2) the forum states interest in resolving the dispute, (3) the plaintiffs interest in receiving convenient and effective relief, (4) the interstate judicial systems interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering fundamental substantive social policies. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1095-96 (10th Cir. 1998). These factors demonstrate the unreasonableness of exercising personal jurisdiction over RTC in Oklahoma. 1. Burden on the defendant of litigating in the forum While not dispositive, the burden on the defendant of litigating the case in a foreign forum is of primary concern in determining the reasonableness of personal jurisdiction. World- Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 292 (1979). The burden on RTC in this case is significant. RTC is a California nonprofit corporation with its principal place of business in 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 16 of 25
{1270626;} 12
California. It has no offices, assets, or employees in Oklahoma. Accordingly, this factor weighs in favor of RTC. 2. Forum states interest in adjudicating the dispute Plaintiffs are not Oklahoma residents. They are Nevada corporations with their principal places of business in Fort Wayne, Indiana. They have brought claims against 82 Defendants 13 living in Oklahoma and the others residing in at least 14 states, Canada, and the United Kingdom. Those claims are based on conduct that was not centered in Oklahoma but rather allegedly occurred in the various places where the Defendants reside. Thus, Oklahoma has no greater interest in adjudicating the dispute than any of these other jurisdictions. Compare Sleepy Lagoon, Ltd. v. Tower Grp., Inc., 809 F. Supp. 2d 1300, 1310 (N.D. Okla. 2011) (holding that forum state has an interest in exercising personal jurisdiction over a defendant where one or more of the plaintiffs is a resident of the forum state). 3. Plaintiffs interest in convenient and effective relief This element hinges on whether Plaintiffs may obtain convenient and effective relief in another forum. This factor may weigh heavily in cases where a plaintiffs chances of recovery will be greatly diminished by forcing it to litigate in another forum because of that forums laws or because the burden may be so overwhelming as to practically foreclose pursuit of the lawsuit. Id. at 1097. No such danger exists here. As noted above, Plaintiffs are Nevada corporations based in Indiana. There is no reason to believe that Oklahoma is a more convenient forum than the courts in or closer to their home states. Nor do they suggest that there is a peculiarity of Oklahoma law that greatly enhances their chances of recovery here. Thus, this factor does not support this Courts assertion of jurisdiction over RTC. 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 17 of 25
{1270626;} 13
4. Interstate judicial systems interest in obtaining efficient resolution This factor examines whether the forum state is the most efficient place to litigate the dispute. OMI Holdings, 149 F.3d at 1097. Key parts of this inquiry are where the wrong underlying the lawsuit occurred and what states substantive law governs the case. Id. As noted above, this case involves plaintiffs who are Nevada entities with a principal place of business in Indiana and 82 Defendants, with only 13 residents of Oklahoma and the others from numerous states and two foreign countries. Oklahoma is far from the epicenter of this dispute it is merely one of many places in which the alleged wrongful conduct has occurred. The majority of the claims asserted are either based on federal statutes or common law. And the single Oklahoma statutory claim involves a right-of-publicity statute, 12 O.S. 1449, of the type that is hardly unique to Oklahoma and which does not apply as a matter of law. See Woods v. Prestwick House, Inc., 2011 OK 9, 1 (noting that section 1449 protects individuals from unauthorized use of the persons name, voice, signature, photograph or likeness, indicating that the statute may only be invoked by individuals rather than corporate entities such as Plaintiffs (emphasis added)). Thus, Oklahoma is in no way the most efficient place in which to litigate this dispute. 5. State interest in furthering fundamental substantive social policies The final factor to be considered is the interests of the several states, in addition to the forum state, in advancing fundamental substantive social policies. OMI Holdings, 149 F.3d at 1098. The analysis of this factor focuses on whether the exercise of jurisdiction by the forum state affects the substantive social policy interests of other states. This factor does not appear to apply in this case. In conclusion, the Tenth Circuit has noted that: personal jurisdiction analysis requires that [the court] draw a line in the sand. At some point, the facts supporting jurisdiction in a given forum are so lacking that the notions of fundamental fairness inherent in the Due Process 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 18 of 25
{1270626;} 14
Clause preclude a district court from exercising jurisdiction over a defendant. Id. Even if the Complaints paltry allegations against RTC were true, or were assumed to be true, RTCs contact with Oklahoma would be so slight that forcing RTC to litigate this action in Oklahoma would be unreasonable and inconsistent with the notions of fair play and substantial justice which form the bedrock of the due process inquiry. Id. II. ALTERNATIVELY, PLAINTIFFS CLAIMS AGAINST RTC SHOULD BE DISMISSED FOR FAILURE TO STATE A CLAIM. Alternatively, RTC specially appears and moves for dismissal pursuant to Rule 12(b)(6). The Complaint falls woefully short of stating a claim against RTC, in particular because it fails to sufficiently allege that RTC engaged in any of the conduct at issue in this action. Plaintiffs first four causes of action hinge on their contention that Defendants have used NAFCs trademarks, logo and certifications, without authorization, to promote their services to the public. (See Compl. 260-91.) Based on this allegation, Plaintiffs assert the following four claims: First Claim: Federal trademark infringement (Id. 260-70 (contending that Defendants uses of NAFCs Mark, Logo and Certification on Defendants websites and in Defendants publications are unauthorized and constitute infringement of Plaintiffs alleged federal trademark)); Second Claim: Common law trademark infringement (id. 271-77 (citing Defendants unauthorized uses of NAFCs Certifications and Logo to promote their facilities and staff)); Third Claim: Federal infringement pursuant to 15 U.S.C. 1125 (id. 278- 83 (Defendants marketing, promotion, and offering of services while using the NAFC Certifications, Marks and Logo constitute false designations of origin and false descriptions or representations that Defendants [sic] services are certified by NAFC and/or ACCFC when in fact they are not.)); and Fourth Claim: Violation of right of publicity pursuant to 12 O.S. 1449 (id. 284-91 (Defendants knowingly used NAFCs name and likeness for the purposes of advertising, soliciting, and selling Defendants services to the public.)). 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 19 of 25
{1270626;} 15
Although Plaintiffs assert these claims generally against all Defendants, their Complaint contains no allegation that RTC has ever used NAFCs Mark, Logo and Certifications in any way. As noted above, RTC is conspicuously absent from the list of Defendants with allegedly infringing websites and publications, which is set forth in paragraphs 116 through 242 and paragraph 250 of the Complaint. Moreover, the services promoted by the alleged use of NAFC certifications and logo were not the services of RTC, which is not even alleged to be the type of entity that might utilize the certifications and logo. In fact, the Complaint merely identifies RTC as an entity holding the rights to use L. Ron Hubbards name and writings . . . (Compl. 243), and not as a provider of drug treatment and rehabilitation services. Thus, there is simply no allegation that RTC itself has utilized the mark, logos or certifications of Plaintiffs to promote its own services. Because Plaintiffs do not allege that RTC itself used their mark, certifications or logos, the first four causes of action in their Complaint fail as a matter of law. See Kerber v. Qwest Group Life Ins. Plan, 647 F.3d 950, 959 (10th Cir. 2011) (to survive a motion to dismiss, the complaint must allege sufficient facts to make the claim plausible on its face) (citation omitted)); Mandelbaum v. Fiserv, Inc., 787 F. Supp. 2d 1226, 1234 (D. Colo. 2011) (In evaluating the plausibility of a given claim, the Court need not accept conclusory allegations without supporting factual averments. (quoting S. Disposal, Inc. v. Tex. Waste Mgmt., 161 F.3d 1259, 1262 (10th Cir. 1998)). Implicitly recognizing that they have alleged no wrongful conduct on the part of RTC, Plaintiffs attempt to impose vicarious liability against RTC, with respect to their first through fourth claims, under two theories: (1) that [u]pon information and belief, RTC . . . strictly control[s] [Defendant] Narconon . . . . (Compl. 247); and (2) that RTC participated in a scheme with the other Defendants to use the NAFC certifications to bolster the Narconon 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 20 of 25
{1270626;} 16
Network and its counselors in the public perception (id. 249). This alleged scheme also forms the basis for Plaintiffs fifth claim, for civil conspiracy. However, these theories are supported only by conclusory allegations that fail to state a claim for relief against RTC. First, Plaintiffs conclusory allegation based only on information and belief (Compl. 247) that RTC controls Narconon does not support a claim for relief against RTC. Plaintiffs make no attempt to connect this stray, unsupported allegation to any legal theory of vicarious liability (e.g., agency, alter ego, etc.). Nor do they provide any examples of, or allege any facts demonstrating, the alleged control. The Complaint thus fails to put RTC on notice of the nature of any such claim against it and the facts supporting that claim. Accordingly, Plaintiffs control allegation does not provide the basis for a claim against RTC. See Bridges v. Lane, 351 Fed. Appx. 284, 286 (10th Cir. 2009) (The burden is on the plaintiff to craft an adequate complaint that contains enough factual allegations to state facially plausible claims for relief and provide fair notice to defendants of the nature of the claims against them.); Robbins v. Okla., 519 F.3d 1242, 1249 (10th Cir. 2008) (noting that Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) requires enough allegations to give the defendants notice of the theory under which [plaintiffs] claim is made). Second, Plaintiffs have failed sufficiently to allege the existence of a conspiracy. In Twombly, the Supreme Court held that to state a claim for antitrust conspiracy, a complaint must provide enough factual matter (taken as true) to suggest than an agreement was made. 550 U.S. at 556 (emphasis added). The Court concluded [A]n allegation of parallel conduct and a bare assertion of conspiracy will not suffice [to render a conspiracy plausible]. Without more, parallel conduct does not suggest conspiracy, and a conclusory allegation of agreement at some unidentified point does not supply facts adequate to show illegality. 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 21 of 25
{1270626;} 17
This Court has applied the Twombly standard to a civil conspiracy claim like the one in this case. Peterson v. Grisham, 2008 WL 4363653 (E.D. Okla. Sept. 17, 2008). In Peterson, the Court held that the plaintiffs failed to state a claim for civil conspiracy where their complaint cited only the defendants parallel conduct in publishing the books at issue in that case and contained no allegation suggesting a preceding agreement by the defendants to write and publish these books. Id. at *9. As discussed above, Plaintiffs conspiracy allegations here are purely conclusory. Although they repeatedly and summarily refer to an alleged scheme to promote the Narconon network, they assert no facts showing that the alleged co-conspirators entered into an agreement to utilize Plaintiffs mark, logos and certifications. Moreover, although they arguably allege parallel conduct among some Defendants (which, under Twombly, is insufficient to state a conspiracy claim), they do not allege any parallel conduct by RTC. 3 Indeed, as shown above, they do not even allege that RTC engaged in the allegedly wrongful conduct. Plaintiffs conspiracy allegations against RTC constitute the type of bare assertions of conspiracy that the Supreme Court and this Court have squarely rejected as a basis for a legally cognizable conspiracy claim. Accordingly, Plaintiffs fifth claim for civil conspiracy as well as any attempt to use the conspiracy allegation as a basis for imposing liability on RTC relating to the first four causes of action involving conduct in which RTC is not alleged to have participated fail as a matter of law.
3 Although Plaintiffs allege (Compl. 248) that during a Church event in Florida (2002) (discussed above) RTCs Chairman made false claims concerning certifications of NBAE which is alleged to have been a short-lived sub-board under NAFC (id. 239) that was dissolved in 1999 (id. 240) and ceased to exist in any form in 2006 (id. 241) the Complaint does not allege any facts showing that those allegedly false claims were made in furtherance of the alleged conspiracy to misuse Plaintiffs trademarks, logo or certifications. Indeed, Plaintiffs allege that the conspiratorial misuse (by Defendants other than RTC) of Plaintiffs trademark rights occurred years after the 2002 Church event. (See id. 110-236). 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 22 of 25
{1270626;} 18
CONCLUSION For the foregoing reasons, Defendant RTC should be dismissed from this action for lack of personal jurisdiction. Alternatively, the Court should dismiss Plaintiffs claims against RTC for failure to state a claim upon which relief can be granted. Respectfully submitted,
/s/ David L. Bryant David L. Bryant, OBA No. 1262 David E. Keglovits, OBA No. 14259 Amelia A. Fogleman, OBA No. 16221 GABLEGOTWALS 1100 ONEOK Plaza 100 West Fifth Street Tulsa, Oklahoma 74103-4217 (918) 595-4800 ATTORNEYS FOR DEFENDANT RELIGIOUS TECHNOLOGY CENTER
6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 23 of 25
{1270626;} 19
CERTIFICATE OF SERVICE I hereby certify that on the 1st day of July, 2014, I electronically transmitted the attached document to the Clerk of Court using the ECF system for filing. Based on the records currently on file, the Clerk of Court will transmit a Notice of Electronic Filing to the following ECF registrants: David R. Keesling david@KLGattorneys.com Heidi L. Shadid heidi@KLGattorneys.com Sloane Ryan Lile sloane@KLGattorneys.com Keesling Law Group, PLLC 401 South Boston Avenue Mid-Continent Building, 4th Floor Tulsa, OK 74103 Attorneys for Plaintiffs National Association of Forensic Counselors, Inc.; American Academy of Certified Forensic Counselors, Inc. Donald M. Bingham don_bingham@riggsabney.com M. David Riggs driggs@riggsabney.com Wm. Gregory James gjames@riggsabney.com Riggs Abney Neal Turpen Orbison & Lewis 502 West Sixth Street Tulsa, OK 74119 Attorneys for Defendant Narconon of Oklahoma, Inc.; Derry Hallmark; Janet Watkins; Tom Widman; Vicki Smith; Michael Otto; Michael J. Gosselin; Kathy Gosselin; Michael George; Kent McGregor; Dena G. Goad; Michael St. Amand; Gary W. Smith
John H. Tucker jtuckercourts@rhodesokla.com Colin H. Tucker chtucker@rhodesokla.com Denelda L. Richardson drichardoncourts@rhodesokla.com Kerry R. Lewis klewis@rhodesokla.com Rhodes Hieronymus Jones Tucker & Gable P.O. Box 21100 Tulsa, OK 74121 Attorneys for Association for Better Living and Education International; Narconon International; Clark Carr
Richard P. Hix Richard.hix@mcafeetaft.com Alison A. Verret Alison.verret@mcafeetaft.com McAfee & Taft, P.C. 1717 South Boulder Avenue, Suite 900 Tulsa, OK 74119 Attorneys for David S. Lee 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 24 of 25
{1270626;} 20
Charles D. Neal, Jr. cdn@steidley-neal.com Steidley & Neal P.O. Box 1165 McAlester, OK 74502 Attorney for Defendants Friends of Narconon International; Best Drug Rehabilitation, Inc.; A Life Worth Living, Inc.; Golden Millennium Productions, Inc.; Joseph Guernaccini; Thomas Garcia; David S. Lee, III; Richard Hawk; Anthony Bylsma; Glen Petcavage; Narconon Freedom Center, Inc.; Jonathan Beazley; Narconon Spring Hill, Inc.; Royalmark Management, Inc.; International Academy of Detoxification Specialists; Premazon, Inc.; Jonathan Moretti; Luria K. Dion
Rachel D. Parrilli rdp@steidley-neal.com Stacie L. Hixon slh@steidley-neal.com Steidley & Neal 2448 East 81st Street, Suite 5300 Tulsa, OK 74137 Attorneys for Defendant Friends of Narconon International; Best Drug Rehabilitation, Inc.; A Life Worth Living, Inc.; Golden Millennium Productions, Inc.; Joseph Guernaccini; Thomas Garcia; David S. Lee, III; Richard Hawk; Anthony Bylsma; Glen Petcavage; Narconon Freedom Center, Inc.; Jonathan Beazley; Narconon Spring Hill, Inc.; Royalmark Management, Inc.; International Academy of Detoxification Specialists; Premazon, Inc.; Jonathan Moretti; Luria K. Dion
/s/David L. Bryant 6:14-cv-00187-RAW Document 247 Filed in ED/OK on 07/01/14 Page 25 of 25