Larson v. SoundSkins Global

          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 ...