United States District Court, D. Minnesota
Benjamin L. Larson, Plaintiff,
v.
SoundSkins Global, Compustar Australia Pty Ltd, and Mobile Marine & Car Audio LLC, d/b/a Lakes Audio, Defendants.
ORDER ON MOTIONS TO DISMISS
Wilhelmina M. Wright United States District Judge
Two
motions are before the Court. Defendant Compustar Australia
Pty Ltd (Compustar) moves to dismiss on alternate grounds:
for insufficient service, Fed.R.Civ.P. 12(b)(5), or for lack
of personal jurisdiction, Fed.R.Civ.P. 12(b)(2). (Dkt. 16.)
Defendant Mobile Marine & Car Audio LLC d/b/a Lakes Audio
(Lakes Audio) moves to dismiss for failure to state a claim
on which relief can be granted, Fed.R.Civ.P. 12(b)(6). (Dkt.
26.) Compustar also seeks attorney fees and costs.
See 35 U.S.C. § 285. For the reasons addressed
below, the Court grants Compustar's motion to dismiss,
denies Lakes Audio's motion to dismiss, and denies
Compustar's request for attorney fees and costs.
BACKGROUND
Plaintiff
Benjamin L. Larson is the inventor and owner of United States
Patent 8, 739, 921 (the ‘921 patent), for a
“sealing, absorbing and decoupling ring kit” used
in vehicle speaker systems. Larson's complaint alleges
that three entities-Compustar, Lakes Audio, and Defendant
SoundSkins Global-are directly infringing the ‘921
patent by selling, offering for sale, distributing, and
advertising an infringing product in the United States.
Compustar
is an Australian company. Shortly after filing this lawsuit
in November 2018, Larson's counsel, Andrew M. Grove, sent
a letter to four individuals involved in this lawsuit,
including Ruth Khalsa, Compustar's United States-based
trademark attorney. The letter attached the complaint and
invited the parties to work towards settlement. An email
exchange between Khalsa and Grove followed. As the parties
worked towards settling the matter, Khalsa advised Grove that
she was not authorized to accept service of process on behalf
of Compustar. Larson subsequently attempted to personally
serve Khalsa on January 17, 2019.
As
communication between the parties deteriorated,
Minnesota-based attorney Alan M. Anderson became involved on
behalf of Compustar. On January 28, 2019, Anderson sent
Larson's counsel a letter that, among other things,
repeated that Khalsa was not authorized to accept service on
behalf of Compustar. The next day, Larson attempted to
personally serve Anderson. Anderson refused to accept
service, stating that he was not authorized to do so. The
process server eventually handed the summons and complaint to
Anderson, via his secretary, and Anderson tore them up.
Lakes
Audio is a retailer located in Baxter, Minnesota, that sells
vehicle speaker systems. Larson alleges that Lakes Audio
infringed on the ‘921 patent by selling the infringing
product.
ANALYSIS
I.
Compustar's Motion to Dismiss
Compustar
moves to dismiss for insufficient service of process.
Fed.R.Civ.P. 12(b)(5).[1] Proper service of process is a
prerequisite for a federal court's exercise of
jurisdiction over a defendant. Printed Media Servs., Inc.
v. Solna Web, Inc., 11 F.3d 838, 843 (8th Cir. 1993). On
a motion to dismiss for insufficient service of process, the
plaintiff must establish by prima facie evidence that service
was proper. Northrup King Co. v. Compania Productora
Semillas Algodoneras Selectas, S.A., 51 F.3d 1383, 1387
(8th Cir. 1995). As the Court must necessarily consider
materials outside the pleadings to determine whether the
plaintiff satisfies this burden, doing so does not convert
the motion to one for summary judgment. See Devin v.
Schwan's Home Servs., Inc., No. 04-cv-4555, 2005 WL
1323919, at *2 (D. Minn. May 20, 2005) (citing 5B Charles
Alan Wright et al., Federal Practice and Procedure §
1353 (3d ed. 2004)).
Compustar
argues that Larson failed to comply with the service
requirements of Rule 4, Fed. R. Civ. P., because Compustar
did not authorize its United States-based attorneys to accept
service of process on its behalf. When service is attempted
within a judicial district of the United States, a
corporation, partnership, or association, whether foreign or
domestic, must be served in the manner for serving an
individual that is described in Rule 4(e)(1) or “by
delivering a copy of the summons and of the complaint to . .
. [an] agent authorized by appointment or by law to receive
service of process.” Fed.R.Civ.P.
4(h)(1).[2]
An
attorney may be an agent authorized by appointment to accept
service of process on behalf of a client. See 4A
Charles Alan Wright et al., Federal Practice and Procedure
§ 1097 (3d ed. 2004) (hereinafter, “Wright &
Miller”) (analyzing appointment under Rule 4(e)(2)(C),
Fed. R. Civ. P.); Thelen v. City of Elba, No.
08-cv-1150, 2009 WL 212940, at *4 (D. Minn. Jan. 28, 2009)
(same); see also Wright & Miller § 1101
(identifying similarities between Rules 4(h)(1)(B) and
4(e)(2)(C), Fed. R. Civ. P.). However, the authority to
accept service of process on behalf of a client must exist
either by an express grant of such authority or be implied
from the established relationship between the defendant and
the attorney. Semler v. Klang, 603 F.Supp.2d 1211,
1226 (D. Minn. 2009) (quoting Wright & Miller §
1097). In either circumstance, a factual basis must exist to
conclude that a defendant has either expressly or impliedly
authorized its attorney to accept service of process. See
Id. (finding no basis to conclude that an attorney was
impliedly authorized to accept service of process on behalf
of a client). Such authorization will not be inferred simply
because an attorney is acting in a representative capacity on
a defendant's behalf. See id.; see also
Wright & Miller § 1097.
Larson
argues that, because counsel for Compustar attempted to
negotiate a settlement, Compustar impliedly authorized its
attorneys to accept service of process. The record shows that
Compustar's attorneys acted in a representative capacity
on Compustar's behalf by communicating with Larson and
attempting to resolve the dispute to avoid litigation. But
the record must supply a factual basis to conclude that the
attorneys were expressly or impliedly authorized by Compustar
to accept service of process in this matter. Here, the record
falls short. Both attorneys repeatedly told Larson's
counsel that they were not authorized to accept
service on Compustar's behalf. See Semler, 603
F.Supp.2d at 1226-27 (finding no basis to conclude that an
attorney was impliedly authorized to accept service of
process, particularly because the attorney
“specifically attest[ed] that he is not authorized to
accept service of process on behalf of” the defendant).
And in his sworn affidavit, Compustar's president and
sole shareholder Colin Gardener states that Compustar never
authorized either attorney or any other United States person
to accept service of process on Compustar's behalf.
Larson
argues that his attempts at service must have been proper
because Compustar “obvious[ly] . . . knows about the
case against it.” But this argument also misses the
mark. Without more, actual notice of a lawsuit is not
sufficient to establish proper service of ...