585 F.Supp.3d 1284
W.D. Wash.2022Background
- Plaintiffs are Kona coffee growers who sued multiple distributors/retailers for selling ordinary commodity coffee labeled as “Kona,” harming real Kona producers.
- Kevin Kihnke, president and sole owner of L&K Coffee Co., was added as a defendant after plaintiffs’ review of L&K’s Rule 30(b)(6) deposition suggested he authorized the conduct.
- Evidence alleged by plaintiffs: Kihnke is L&K’s buyer and sole decisionmaker, employees were instructed to mix token Kona beans into large vats and label the product “Kona,” and Kihnke’s signature appears on Kona-labeled packaging.
- L&K operated an interactive website and sold/shipped nearly $15,000 of its Kona Blend products to Washington residents and wholesaled to Washington retailers (Costco, Amazon, Walmart, etc.).
- Kihnke moved to dismiss for lack of personal jurisdiction and improper venue; he also argued any jurisdiction should be limited to Washington-related sales only.
- The Court denied the motion, finding specific jurisdiction and proper venue in the Western District of Washington and rejecting a limitation on nationwide damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction (specific) | Kihnke personally directed wrongdoing; his acts (via L&K) were aimed at Washington and caused harm there. | L&K contacts should not be imputed; Kihnke had no role in recipe/labeling for the Washington sales and contacts are insufficient. | Court found a prima facie showing that Kihnke was the ‘‘guiding spirit’’ of L&K’s conduct; specific jurisdiction exists. |
| Imputation of corporate contacts to officer | Corporate acts can be imputed where officer is central participant or personally liable for torts he authorized. | Fiduciary-shield bars imputation absent personal wrongdoing or alter-ego; plaintiffs offered insufficient evidence. | Court held evidence (control, buyer role, employee testimony, signature) supports imputing L&K’s forum contacts to Kihnke. |
| Venue under 28 U.S.C. §1391(b) | Venue proper where substantial part of events occurred — Washington consumers likely to be confused; modest sales suffice. | Sales in Washington were too small to be a "substantial part"; other districts (Michigan, Florida) are available. | Venue is proper under §1391(b)(2): sales and wholesale distribution into Washington make this a district where consumer confusion likely. |
| Scope of damages (nationwide damages) | Plaintiffs seek nationwide relief tied to harm caused by distribution into Washington. | Post-Bristol-Myers, nationwide damages should be limited unless defendant is subject to general jurisdiction. | Court relied on Keeton and Bristol-Myers distinctions: specific jurisdiction based on in-state circulation can support nationwide damages; limitation denied. |
Key Cases Cited
- Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218 (9th Cir. 2011) (standards for prima facie showing of specific jurisdiction and three-prong test)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts and due process foundation for jurisdiction)
- Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (U.S. 2017) (limits on asserting jurisdiction over nonforum plaintiffs for mass torts; context for class/unnamed-member issues)
- Calder v. Jones, 465 U.S. 783 (U.S. 1984) (effects test for purposeful direction in intentional-tort cases)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (reasonableness and fairness factors in jurisdiction analysis)
- Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (U.S. 1984) (specific jurisdiction based on in-state circulation can support damages suffered outside the forum)
- Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058 (9th Cir. 2016) (imputing corporate acts to an individual who is the guiding spirit)
- Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007 (9th Cir. 2002) (seven-factor reasonableness test for exercising jurisdiction)
- Comm. for Idaho’s High Desert, Inc. v. Yost, 92 F.3d 814 (9th Cir. 1996) (corporate officer personal liability for torts authorized or directed)
- Davis v. Metro Prods., Inc., 885 F.2d 515 (9th Cir. 1989) (fiduciary-shield doctrine and limits on imputing corporate contacts)