Use this button to switch between dark and light mode.

Share your feedback on this Case Brief

Thank You For Submiting Feedback!

  • Law School Case Brief

Modulus Fin. Eng'g, Inc. v. Modulus Data USA, Inc. - No. CV-19-04685-PHX-SMB, 2020 U.S. Dist. LEXIS 85735 (D. Ariz. May 14, 2020)

Rule:

Purposeful direction is evaluated under the three-part "effects" framework outlined in Calder v. Jones, 465 U. S. 783, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984). Calder's second part "asks whether the defendant's allegedly tortious action was expressly aimed at the forum. Express aiming requires something more' than mere foreseeability that an out-of-state defendant's conduct impacted the forum in question.

Facts:

Modulus is an Arizona software design and development services corporation that provides its services across the world. Its complaint alleged various federal, state, and common law claims of trademark infringement, unfair competition, and cancellation of trademarks against Defendants Modulus Data USA and Modulus Data. Modulus Data USA is a New York corporation with its principal place of business in Massachusetts and Modulus Data is a Canadian entity. Defendants, formerly operating as Log10 Solutions, provide various tools and services concerning software and database integration and allegedly began infringing on Plaintiff's trademarks sometime in September 2015. The complaint alleged virtually no conduct by either Defendant involving Arizona. either Defendant has ever: (1) held an office or place of business in Arizona; (2) specifically targeted or advertised to Arizona residents; (3) employed an authorized representative in Arizona; (4) had Arizona clients; (5) earned revenue from Arizona; or (6) sold goods or services in Arizona using the allegedly infringing trademarks. With these allegations in mind, Defendants moved to dismiss for lack of personal jurisdiction.

Issue:

Does the court have personal jurisdiction over the defendants?

Answer:

No.

Conclusion:

Modulus's first argument that Defendants' knowledge of its location in Arizona when they committed the alleged tortious conduct shows they expressly targeted Arizona was unpersuasive.  In Walden, the Supreme Court held that an out-of-state tortfeasor's mere knowledge of a plaintiff's "strong forum connections," combined with the fact that harm was foreseeable to plaintiff in that forum, "improperly attribute[d] a plaintiff's forum connections to the defendant and makes those connections 'decisive' in the jurisdictional analysis." This is exactly what Modulus asks the Court to do here. Defendants' mere knowledge of Modulus in Arizona, by itself, does not meaningful connect them to this forum. Rather, this knowledge more readily shows Modulus is connected here, which is entirely irrelevant in considering Defendants' connections. If the opposite were true, and Modulus could somehow tether Defendants to Arizona in a meaningful way by the simple fact that it resides here, personal jurisdiction would indeed be a nullity. Accordingly, Defendants' connections with this forum by the sole fact that they knew Modulus is located here and would be harmed here insufficiently shows they expressly aimed their conduct at Arizona.

Modulus's second argument that Defendants expressly targeted Arizona through their online presence was similarly unpersuasive. It first argues Defendants expressly targeted Arizona because they directed online ads at Arizona consumers. The only support for this is counsel's affidavit, which states that "while browsing the internet from [his] office in Phoenix, Arizona, [he] was presented with a Google Ad for Defendants' offerings." However, this declaration does not show the ad was specifically directed at Arizona consumers, only that it showed up here. To be sure, the situation here is quite unlike the one in Marvix Photo, where the Ninth Circuit found the express aiming requirement met because "a substantial number of hits to [defendant's] website came from California residents" and it had a "specific focus on California—centered [on] celebrity and entertainment industries." There is nothing supporting a similar finding here besides an isolated ad appearing on counsel's web browser while he was in Arizona. One can easily imagine how absurd it would be if counsel walked across state lines to New Mexico, opened his laptop, and wrote a similar affidavit and the Court permitted suit there based on this happenstance. This is clearly incorrect, and the mere viewing of the ad in Arizona by Modulus's counsel cannot be attributed to Defendants. In other words, just because a defendant operates a website does not mean the "expressly aimed" requirement disappears. Instead, a defendant's virtual presence is merely a medium for which the court must consider in determining whether a defendant expressly aimed its conduct at the forum. The Court's conclusion today comports with this guidance. Although anyone, including Arizonans, can access Defendants' website, nothing on it indicates they used it to expressly aim their tortious conduct at Arizona. This is especially true considering Defendants "never had an office in Arizona, do not specifically target or advertise to residents of Arizona, have no clients in Arizona, have not earned any revenue from Arizona, and never sold any goods or services that utilize the name or mark Modulus in any manner in Arizona." Instead, Defendants' virtual contacts appear to be precisely what the Supreme Court coined as "random, fortuitous, or attenuated" contacts with Arizona that exist simply because they host a universally accessible website. This is not enough to show "express aiming" under Calder.

Access the full text case

Essential Class Preparation Skills

  • How to Answer Your Professor's Questions
  • How to Brief a Case
  • Don't Miss Important Points of Law with BARBRI Outlines (Login Required)

Essential Class Resources

  • CivPro
  • Contracts
  • Constitutional Law
  • Corporations /Business Organizations
  • Criminal Law
  • Criminal Procedure/Investigation
  • Evidence
  • Legal Ethics/Professional Responsibility
  • Property
  • Secured Transactions
  • Torts
  • Trusts & Estates