nafc vs. narconon: motion to dismiss by nn int

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 NARCONON INTERNATIONAL

JOHN H. TUCKER, OBA 9110 [email protected] COLIN H. TUCKER, OBA 16325 [email protected] KERRY R. LEWIS, OBA 16519 [email protected] DENELDA L. RICHARDSON, OBA 20103 [email protected] RHODES HIERONYMUS JONES TUCKER & GABLE P.O. Box 21100 Tulsa, Oklahoma 74121-1100 Phone: (918) 582-1173; Fax: (918) 592-3390

ATTORNEYS FOR DEFENDANT, Narconon International

6:14-cv-00187-RAW Document 295 Filed in ED/OK on 08/01/14 of 36

mailto:[email protected]




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TABLE OF CONTENTS

TABLE OF AUTHORITIES .................................................................................................................. iv INTRODUCTION ...................................................................................................................................... 1 BACKGROUND ......................................................................................................................................... 1 LEGAL STANDARDS ............................................................................................................................... 3

A. FEDERAL RULE OF CIVIL PROCEDURE 12(B)(2) ........................................................ 3 B. FEDERAL RULE OF CIVIL PROCEDURE 12(B)(6) ........................................................ 5

ARGUMENTS AND AUTHORITIES ................................................................................................... 6 I. THE COURT LACKS PERSONAL JURISDICTION OVER INTERNATIONAL (WHETHER PREMISED AS GENERAL OR SPECIFIC JURISDICTION) .......................................... 6

A. REQUIREMENTS FOR ASSERTING GENERAL JURISDICTION OVER INTERNATIONAL ..................................................................................................... 6 B. REQUIREMENTS FOR ASSERTING SPECIFIC JURISDICTION OVER INTERNATIONAL ..................................................................................................... 9 C. INTERNATIONAL LACKS THE MINIMUM CONTACTS TO SUPPORT GENERAL OR SPECIFIC JURISDICTION OVER INTERNATIONAL ............................................................................................................. 10 D. PLAINTIFFS’ “WEBSITE” ALLEGATIONS DO NOT ESTABLISH PERSONAL JURISDICTION OVER INTERNATIONAL ..................................................... 13 E. PLAINTIFFS’ “CONSPIRACY” ALLEGATIONS DO NOT SUPPORT PERSONAL JURISDICTION OVER INTERNATIONAL ..................................................... 17

II. EXERCISE OF JURISDICTION OVER INTERNATIONAL WOULD VIOLATE DUE PROCESS .............................................................................................................. 21

A. THE BURDEN ON THE DEFENDANT OF LITIGATING IN THE FORUM ............................................................................................................................. 21


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B. THE FORUM STATE’S INTEREST IN ADJUDICATING THE DISPUTE .......................................................................................................................... 21 C. PLAINTIFFS’ INTEREST IN CONVENIENT AND EFFECTIVE RELIEF ......................................................................................................... 22 D. THE INTERSTATE JUDICIAL SYSTEM’S INTEREST IN OBTAINING EFFICIENT RESOLUTION ...................................................................... 22 E. STATE INTEREST IN FURTHERING FUNDAMENTAL SUBSTANTIVE SOCIAL POLICIES ................................................................................... 23

III. ALTERNATIVELY, INTERNATIONAL ADOPTS THE ARGUMENTS MADE BY CERTAIN DEFENDANTS IN THEIR MOTION TO DISMISS BASED ON PLAINTIFFS’ FAILURE TO STATE A CLAIM [Dkt. 287] .......................................................... 24 CONCLUSION ......................................................................................................................................... 25


iv

TABLE OF AUTHORITIES CASES: Agape Flights, Inc. v. Covington Aircraft Engines, Inc.,

771 F.Supp. 2d 1278 (E.D. Okla. 2011) ........................................................................... 14 Am. Educ. Corp. v. Chase,

2006 U.S. Dist. LEXIS 47788 (W.D. Okla. July 13, 2006) ............................................. 7 Am. Land Program, Inc. v. Bonaventura Uitgevers Maatschappij, N.V.

710 F.2d 1449 (10th Cir. 1983) .......................................................................... 17, 18, 20 Ashcroft v. Iqbal,

556 U.S. 662 (2009) ..................................................................................................... 5, 6, 18 AST Sports Science, Inc. v. CLF Dist. Ltd.,

514 F.3d 1054 (10th Cir. 2008) ............................................................................................ 9 Baldridge v. McPike, Inc.,

466 F.2d 65 (10th Cir. 1972) ....................................................................................... 17, 20 Bancroft & Masters, Inc. v. Augusta Nat’l, Inc.,

223 F.3d 1082 (9th Cir. 2000) ........................................................................................... 16 Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed. 2d (2007) ....................................................................................... 5, 6, 18, 19, 20

Burger King Corp. v. Rudzewicz,

471 U.S. 462 (1985) ............................................................................................................ 7, 9 Calder v. Jones,

464 U.S. 783 (1984) .............................................................................................................. 14 Capitol Federal Savings Bank v. Eastern Bank Corp.,

493 F.Supp. 2d 1150 (D. Kan. 2007) ................................................................................ 15 Casanova v. Ulibarri,

595 F.3d 1120 (10th Cir. 2010) ............................................................................................ 5


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Clark v. Tabin, 400 F.Supp. 2d 1290 (N.D. Okla. 2005) .......................................................... 17, 19, 20

Custom Cupboards, Inc. v. Cemp SRL,

2010 U.S. Dist. LEXIS 44822 (D. Kan. May 7, 2010) ........................................... 14, 15 Daimler AG v. Bauman,

134 S. Ct. 746 (2014) ........................................................................................... 7, 8, 10, 13 Dennis Garberg & Assocs. v. Pack-Tech Int’l Corp.,

115 F.3d 767 (10th Cir. 1997) .............................................................................................. 9 Doe v. Nat’l Med. Servs.,

974 F.2d 143 (10th Cir. 1992) ............................................................................................. 8 Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008) ................................................................... 4, 7, 9, 10, 14 Fed. Deposit Ins. Corp. v. Oaklawn Apts.,

959 F.2d 170 (10th Cir. 1992) .............................................................................................. 9 Fireman’s Fund Ins. Co. v. Thyssen Mining Construction of Canada, Ltd.,

703 F.3d 488 (10th Cir. 2012) .............................................................................................. 8 Forest Guardians v. Forsgreen,

478 F.3d 1149 (10th Cir. 2007) ............................................................................................ 6 Good v. Fuji Fire & Marine Ins. Co.,

271 Fed. Appx. 756 (10th Cir. 2008) ............................................................................... 10 Goodyear Dunlop Tires Operations v. Brown,

131 S.Ct. 2846 (2011) ....................................................................................................... 8, 10 Grimes v. Cirrus Indus.,

712 F.Supp. 2d 1256 (W.D. Okla. 2010) ............................................................................ 9 Helicopteros Nacionales de Columbia, S.A. v. Hall,

466 U.S. 408 (1984) ................................................................................................................. 8 Intercon, Inc. v. Bell Atl. Internet Solutions, Inc.,

205 F.3d 1244 (10th Cir. 2000) ............................................................................................ 5


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Int’l Shoe Co. v. Washington,

326 U.S. 310 (1945) .............................................................................................. 5, 6, 7, 8, 9 Kohler Co. v. Kohler Int’l, Ltd.,

196 F.Supp. 2d 690 (N.D. Ill. 2002) .................................................................................. 17 Melea, Ltd. v. Jawer SA,

511 F.3d 1060 (10th Cir. 2007) ............................................................................. 4, 17, 18 Near v. Crivello,

673 F.Supp. 2d 1265 (D. Kan. 2009) ......................................................................... 18, 19 OMI Holdings, Inc. v. Royal Ins. Co. of Canada,

149 F.3d 1086 (10th Cir. 1998) ................................................................ 5, 9, 21, 22, 23 Papasan v. Allain,

478 U.S. 265 (1986)................................................................................................................... 6 Peay v. Bellsouth Med Ass’n Plan,

205 F.3d 1206 (10th Cir. 2000) ............................................................................................ 7 Peterson v. Grisham,

2008 U.S. Dist. LEXIS 70206 (E.D. Okla. Sept. 17, 2008), aff’d., 594 F.3d 723 (10th Cir. 2010) ............................................................................... 20

Quarles v. Fuqua Indus., Inc.,

504 F.2d 1358 (10th Cir. 1974) ......................................................................................... 10

Rambo v. American S. Ins. Co., 839 F.2d 1415 (10th Cir. 1988) ...................................................................................... 7, 9

Ridge at Red Hawk, LLC v. Schneider,

493 F.3d 1174 (10th Cir. 2007) ....................................................................................... 5, 6 Robbins v. Okla.,

519 F.3d 1242 (10th Cir. 2008) ............................................................................................ 6 RTC v. Heiserman,

898 P.2d 1049 (Colo. 1995) ............................................................................................... 18


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Shrader v. Biddinger, 633 F.3d 1235 (10th Cir. 2011) ....................................................... 4, 13, 14, 15, 16, 17

Silver v. Brown,

382 F. App’x 723 (10th Cir. 2010) .............................................................................. 16, 17

Sleepy Lagoon, Ltd. v. Tower Grp., Inc., 809 F.Supp.2d 1300 (N.D. Okla. 2011) ........................................................................... 22

Smalls v. Stermer,

2011 WL 1234781 (D.Kan. 2011), Aff’d. 457 Fed. App’x 715 (10th Cir. Jan. 10, 2012) ...................................................... 4

Smith v. Basin Park Hosp., Inc.,

178 F.Supp. 2d 1225 (N.D. Okla. 2001) .......................................................................... 14 Smith v. United States,

561 F.3d 1090 (10th Cir. 2009) ........................................................................................... 5 Soma Med. Int’l. v. Standard Chartered Bank,

196 F.3d 1292 (10th Cir. 1999) .......................................................................... 13, 14, 15 Sunward Elecs., Inc. v. McDonald,

362 F.3d 17 (2d Cir. 2004) ..................................................................................................... 7 Taylor v. Phelan,

912 F.2d 429 (10th Cir. 1990) ...................................................................................... 4, 10 TH Agric. & Nutrition, LLC v. Ace European Group Ltd.,

488 F.3d 1282 (10th Cir. 2007) ............................................................................................ 4 Theunissen v. Matthews d/b/a Matthews Lumber Transfer,

935 F.2d 1454 (6th Cir. 1991) ........................................................................................... 10 Ticketmaster-New York, Inc. v. Alioto,

26 F.3d 201 (1st Cir. 1994) .................................................................................................... 9 Toytrackerz, LLC v. Am. Plastic Equip., Inc.,

615 F.Supp. 29 1242 (D. Kan. 2009) ............................................................................... 20 U.S. v. Botefuhr,

309 F.3d 1263 (10th Cir. 2002) ....................................................................................... 4, 5


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Watkins v. Kajima Int’l,

2009 U.S. Dist. LEXIS 85787, 2009 WL 3053856 (M.D. Tenn. Sept. 18, 2009) ......................................................... 19

Woods v. Prestwick House, Inc.,

247 P.3d 1183 (Okl. 2011) .................................................................................................. 23 World-Wide Volkswagon Corp. v. Woodson,

444 U.S. 286 (1979) .............................................................................................................. 21 Zippo Mfg. Co. v. Zippo Dot Com, Inc.,

952 F.Supp. 1119 (W.D. Pa. 1997) .................................................................... 13, 14, 15 STATUTES AND OTHER AUTHORITIES: U.S. Const., amend. XIV ......................................................................................................................... 7 15 U.S.C. §1114(1) ............................................................................................................................... 24 15 U.S.C. §1125(a) ............................................................................................................................... 24 15 U.S.C. §1125(a)(1)(A) ..................................................................................................................... 3 FED. R. CIV. P. 4(k)(1)(A) ................................................................................................................. 4, 7, FED. R. CIV. P. 12(b)(2) ................................................................................................................ 1, 3, 25 FED. R. CIV. P. 12(b)(6) ....................................................................................................... 1, 5, 24, 25 12 O.S. §1449 ................................................................................................................................... 3, 23 12 O.S. §2004(F) ..................................................................................................................................... 7 Internal Revenue Code, §501(C)(3) .............................................................................................. 11


Defendant, Narconon International (“International”), moves the Court to dismiss

International from this action, pursuant to FED. R. CIV. P. 12(b)(2), for lack of personal

jurisdiction. Alternatively, International, specially appearing, moves to dismiss Plaintiffs’

claims against it, pursuant to FED. R. CIV. P. 12(b)(6), for failure to state a claim against

International.

INTRODUCTION

This lawsuit is brought by two Nevada corporations with their principal place of

business in Fort Wayne, Indiana. Neither of these corporations is registered with the

Oklahoma Secretary of State to conduct business in the State of Oklahoma. These Plaintiffs

represent that they offer certifications for substance abuse counseling, but neither of them

offer certifications recognized by the State of Oklahoma. Plaintiffs filed suit against

predominantly non-Oklahoma defendants -- including this Defendant, Narconon

International -- alleging trademark misuse in states other than Oklahoma. The clearest

connection Plaintiffs' lawsuit has to Oklahoma is the fact that Oklahoma is where Plaintiffs'

lawyers reside.

BACKGROUND

Plaintiffs are two Nevada entities with principal places of business in Indiana.

[Complaint, Dkt. 3, ¶¶ 1-2.] NAFC and CCFC bring this action against 82 Defendants,

including International, a California not-for-profit corporation with its principal place of

business in California.

Plaintiff, National Association of Forensic Counselors (“NAFC”), and its subsidiary,

American Academy of Certified Forensic Counselors, Inc. (“CCFC”), claim they provide

“nationally accredited certifications for professionals working with criminal offenders in

the fields of criminal justice, corrections, addictions and mental health.” [Id. ¶ 88 (alleging


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six “Certifications” as “relevant to the claims alleged”).] Plaintiffs make no allegations that

any of the alleged “Certifications” are registered with the U.S. Patent and Trademark Office

(“USPTO”) as trademarks or certification marks.

Plaintiffs allege individuals must meet eligibility requirements to become certified

by Plaintiffs, and, that certified individuals must pay periodic fees to Plaintiffs to remain

certified. NAFC allows certified individuals to use a logo which contains NAFC’s name, as

well as the initials and words that comprise NAFC's accreditations, as set out in ¶ 108 of

Plaintiffs’ Complaint (the “NFAC Logo”). [Id. at ¶¶ 106-108.] Plaintiffs also allege

ownership of one federally registered trademark: NATIONAL ASSOCIATION OF FORENSIC

COUNSELORS, Registration No. 3585933 (the “NAFC Mark”). [Id. at ¶ 109.] Plaintiffs claim

trademark rights in the unregistered NAFC Logo and the NAFC Mark, and appear to allege

rights in the unregistered “Certifications,” presumably as certification marks.

Plaintiffs allege four of the 82 Defendants used the NAFC Mark and NAFC Logo

without authorization of Plaintiffs, such as by displaying them on documents, websites, and

other marketing materials to promote themselves. [Id. at ¶¶ 130, 252 (Narconon Georgia);

¶¶ 131, 133, 135 (Narconon Vista Bay, California); ¶ 202 (Richard Hawk, Georgia); ¶ 225

(Steve Bruno, California).] The Complaint makes no allegations that International ever

used the NAFC Mark or the NAFC Logo.

Of the six allegedly “relevant” unregistered “Certifications,” Plaintiffs primarily

allege infringement of the designation “Certified Chemical Dependency Counselor.” There

is no allegation any Defendant used, let alone infringed, three of the alleged Certifications –

Certified Criminal Justice Addictions Specialist, Certified Co-Occurring Disorder Specialist,


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and Certified Forensic Addictions Specialist.1 Plaintiffs allege only two of the 82 Defendants

used “Baccalaureate Addictions Counselor” without authorization, [Id. ¶¶ at 134, 145]; and

only seven of 82 Defendants allegedly used “Master Addictions Counselor” without

authorization (but not International). [Id. at ¶¶ 134, 148, 162, 164, 169, 218, 220.] The

allegations against International are based on others’ use of the “Certifications” on

International’s website. The Complaint makes no allegation Plaintiffs had exclusive use of

any of the alleged Certifications, or that any of the Certifications have acquired

distinctiveness or secondary meaning.

Plaintiffs allege five causes of action against all Defendants:

1. “Federal Trademark Infringement” under Section 32(1) of the Lanham Act, 15 U.S.C. §1114(1) (Registered marks) [id., at ¶¶ 260-270];

2. “Common Law Trademark Infringement” [Id. at ¶¶ 271-277];

3. “Federal Infringement” pursuant to 15 U.S.C. § 1125(a)(1)(A) [Id. at ¶¶ 278-283];

4. “Violation of Right of Publicity” under 12 O.S. § 1449 [Id. at ¶¶ 284-291]; and

5. “Civil Conspiracy” [Id. at ¶¶ 292-296].

As to these causes of action, Plaintiffs purport to join all 82 separate Defendants (some

corporate entities, some individuals, and all but 13 outside of Oklahoma) for their alleged

roles in an alleged conspiracy to misuse Plaintiffs’ NAFC Mark, NAFC Logo, and

Certifications, primarily on various websites.

LEGAL STANDARDS

A. FEDERAL RULE OF CIVIL PROCEDURE 12(B)(2).

On a Rule 12(b)(2) motion, the burden is with the plaintiff to establish personal

1 The Complaint alleges one Defendant (Thomas Garcia) used a different “Certification,” “Certified Forensic Addictions Examiner,” but Plaintiffs admit they abandoned that “Certification” over two years ago. [Dkt. 3, ¶¶ 90(c), 197.]


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jurisdiction, and the weight of this burden varies with the stage of proceeding. Dudnikov v.

Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th Cir.2008); Smalls v. Stermer,

2011 WL 1234781, at *2 (D. Kan. 2011), aff'd, 457 Fed. App’x 715 (10th Cir. Jan. 10, 2012).

At this stage, “the plaintiff must only make a prima facie showing of personal jurisdiction ...

‘by demonstrating, via affidavit or other written materials, facts that if true would support

jurisdiction over’ each of the moving defendants." Melea, Ltd. v. Jawer SA, 511 F.3d 1060,

1065 (10th Cir. 2007) (quoting TH Agric. & Nutrition, LLC v. Ace European Group Ltd., 488

F.3d 1282, 1286 (10th Cir. 2007)).

The court takes as true "all well-pled (that is, plausible, non-conclusory, and

nonspeculative) facts alleged in plaintiff's complaint.” Shrader v. Biddinger, 633 F.3d 1235,

1239 (10th Cir. 2011) (internal quotation marks and citation omitted). Only the well-pled

facts of the complaint, affidavits, or other writings, as distinguished from conclusory

allegations, can establish jurisdiction. Dudnikov, 514 F.3d at 1070. The court should accept

as true only those factual allegations that are “plausible, non-conclusory, and non-

speculative,” see Id., 514 F.3d at 1070, and then only “to the extent they are uncontroverted

by the defendant's affidavits.” Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir. 1990). The

court, however, does not accept as true those allegations in the complaint contradicted by

the defendant's affidavits, but it must “resolve any factual disputes in the plaintiff's favor.”

Melea, 511 F.3d at 1065.

Two requirements are necessary for a federal district court to assert personal

jurisdiction over a non-resident defendant. First, the defendant must be “one ‘who could

be subjected to the jurisdiction of a court of general jurisdiction in the state in which the

district court is located.’” U.S. v. Botefuhr, 309 F.3d 1263, 1271 (10th Cir. 2002) (quoting

FED. R. CIV. P. 4(k)(1)(A)). Second, “the exercise of personal jurisdiction must not offend the


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due process clause of the Fourteenth Amendment.” Id. (internal quotations omitted).

Where, as in Oklahoma, the state long arm statute supports personal jurisdiction to the full

extent constitutionally permitted, due process principles govern the inquiry. Intercon, Inc.

v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000).

Under the Due Process clause, a defendant must have sufficient “minimum contacts”

with the forum state that subjecting him to its jurisdiction will not “offend traditional

conceptions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310,

316 (1945) (internal quotation marks omitted). The “minimum contacts” standard may be

met by showing either general or specific jurisdiction over the defendant. OMI Holdings,

Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998).

B. FEDERAL RULE OF CIVIL PROCEDURE 12(B)(6).

Under Rule 12(b)(6) a court may dismiss a complaint for “failure to state a claim

upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). In deciding a motion under Rule

12(b)(6), the court must “accept as true all well-pleaded factual allegations ... and view

these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d

1120, 1124 (10th Cir. 2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir.

2009)). However, a plaintiff may not rely on mere labels or conclusions, “and a formulaic

recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed. 2d (2007).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009). “[T]he mere metaphysical possibility that some plaintiff could prove

some set of facts in support of the pleaded claims is insufficient; the complaint must give

the court reason to believe that this plaintiff has a reasonable likelihood of mustering


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factual support for these claims.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174,

1177 (10th Cir. 2007) “The burden is on the plaintiff to frame ‘a complaint with enough

factual matter (taken as true) to suggest’ that he or she is entitled to relief.” Robbins v. Okla.,

519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Twombly, 550 U.S. at 556). The ultimate

duty of the court is to “determine whether the complaint sufficiently alleges facts

supporting all the elements necessary to establish an entitlement to relief under the legal

theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).

“Threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. The complaint must provide

“more than labels and conclusions” or merely “a formulaic recitation of the elements of a

cause of action,” so that “courts ‘are not bound to accept as true a legal conclusion couched

as a factual allegation.’” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265,

286 (1986)). “Determining whether a complaint states a plausible claim for relief will ... be

a context-specific task that requires the reviewing court to draw on its judicial experience

and common sense.” Iqbal, 556 U.S. at 679. “[W]here the well-pleaded facts do not permit

the court to infer more than the mere possibility of misconduct,” the complaint has made

an allegation, “but it has not shown that the pleader is entitled to relief.” Id. (quotation

marks and citation omitted).

ARGUMENTS AND AUTHORITIES

I. THE COURT LACKS PERSONAL JURISDICTION OVER INTERNATIONAL (WHETHER PREMISED AS

GENERAL OR SPECIFIC JURISDICTION).

A. REQUIREMENTS FOR ASSERTING GENERAL JURISDICTION OVER INTERNATIONAL. A court cannot grant any form of relief against a defendant unless the defendant is

amenable to the court’s personal jurisdiction. See Int’l Shoe Co. v. Wash., 326 U.S. at 316.


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Plaintiffs must establish personal jurisdiction over each defendant. Dudnikov, 514 F.3d at

1069; Peay v. Bellsouth Med. Ass’n Plan, 205 F.3d 1206, 1209 (10th Cir. 2000).

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 U.S. Dist. LEXIS

47788, n.4 (W.D. Okla. July 13, 2006) (citing Sunward Elecs., Inc. v. McDonald, 362 F.3d 17,

22 (2d 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

International 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 Int’l Shoe, 326 U.S. at 316). In assessing a

defendant’s contacts with the forum state, the Court may consider two types of personal

jurisdiction: general and specific. As summarized by the Tenth Circuit:

Jurisdiction over a defendant in a suit arising out of or related to the defendant’s contacts with the forum state is “specific jurisdiction.” In contrast, where the suit does not arise from or relate to the defendant’s contacts with the forum and jurisdiction is based on the defendant’s presence or accumulated contacts with the forum, the court exercises “general jurisdiction.”

Rambo v. American S. Ins. Co., 839 F.2d 1415, 1418 (10th Cir. 1988); 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


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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 corporation’s ‘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 Int’l 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. Nat’l 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 corporation’s in-forum contacts can be said to

be in some sense ‘continuous and systematic,’ it is whether the corporation’s 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 Fireman’s 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 defendant’s in-state contacts.” General jurisdiction instead calls for an appraisal of a corporation’s 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.

134 S.Ct. at 762, n. 20 (quoting at 767 (Sotomayor, J., concurring in the judgment)).


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B. REQUIREMENTS FOR ASSERTING SPECIFIC JURISDICTION OVER INTERNATIONAL.

A court may exercise specific personal jurisdiction over a defendant if the defendant

“‘purposefully directed’ its activities at residents of the forum state” and the plaintiff’s

injuries “‘arise out of’ defendant’s 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 Int’l Shoe, 326 U.S. at 316).

Although distinct, minimum contacts and purposeful availment interplay so that

"depending on the strength of the defendant's contacts with the forum state, the

reasonableness component of the constitutional test may have a greater or lesser effect on

the outcome of the due process inquiry." Rambo, 839 F.2d at 1419 n. 6. The weaker a

plaintiff's showing on the minimum contacts prong, the less a defendant need show in

terms of unreasonableness to defeat specific jurisdiction. OMI Holdings, 149 F.3d at 1092

(citing Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 210 (1st Cir. 1994)).

The Court may decide whether personal jurisdiction exists upon review of the briefs

and evidentiary materials, or following an evidentiary hearing. Fed. Deposit Ins. Corp. v.

Oaklawn Apts., 959 F.2d 170, 174 (10th Cir. 1992). If the Court holds a hearing, Plaintiffs

must prove personal jurisdiction by a preponderance of the evidence. Dennis Garberg &

Assocs. v. Pack-Tech Int'l Corp., 115 F.3d 767, 773 (10th Cir. 1997). If the Court does not

hold a hearing, Plaintiffs must make “a prima facie showing of personal jurisdiction by

demonstrating, via affidavit or other written materials, facts that, if true, would support

jurisdiction over the defendant.” Grimes v. Cirrus Indus., 712 F. Supp. 2d 1256 (W.D. Okla.

2010) (citing AST Sports Science, Inc. v. CLF Dist. Ltd., 514 F.3d 1054, 1057 (10th Cir. 2008)).

The Court should accept as true only factual allegations that are “plausible, non-


10

conclusory, and non-speculative,” Dudnikov, 514 F.3d at 1070, and then only “to the extent

they are uncontroverted by the defendant's affidavits.” Taylor, 912 F.2d at 431 (quotations

omitted). In other words, “in the face of a properly supported motion for dismissal, the

plaintiff may not stand on his pleadings but must, by affidavit or otherwise, set forth

specific facts showing that the court has jurisdiction.” Theunissen v. Matthews d/b/a

Matthews Lumber Transfer, 935 F.2d 1454, 1458 (6th Cir. 1991).

C. INTERNATIONAL LACKS THE MINIMUM CONTACTS TO SUPPORT GENERAL OR SPECIFIC

JURISDICTION OVER INTERNATIONAL.

Plaintiffs fail to allege facts showing International has contacts with Oklahoma so

continuous and systematic as to render International “at home” in Oklahoma. The Court

may assert general jurisdiction over International to “hear any and all claims against [it]”

only when its affiliations with Oklahoma are “so constant and pervasive as to render [it]

essentially at home in the forum State.” Daimler, 134 S. Ct. at 760; see also Goodyear, 131

S.Ct. at 2851.

Plaintiffs’ allegations that International “resides within the district” are incorrect.

[Dkt. 3, ¶¶ 3 and 86.] International is a California corporation with its principal place of

business in California. One of the counseling centers that International licenses, out of the

more than one hundred such centers, is within the boundaries of Oklahoma. Even if the

single licensee was a subsidiary of International (it is not), jurisdiction over a subsidiary is

insufficient to establish jurisdiction over the parent. “For purposes of personal jurisdiction,

‘a holding or parent company has a separate corporate existence and is treated separately

from the subsidiary in the absence of circumstances justifying disregard of the corporate

entity.’” Good v. Fuji Fire & Marine Ins. Co., 271 Fed. App’x 756 (10th Cir. 2008) (quoting

Quarles v. Fuqua Indus., Inc., 504 F.2d 1358, 1362 (10th Cir. 1974)). International, in


11

contrast, is not Narconon Arrowhead’s holding company or parent.

Those facts of the Complaint that are well-pleaded, and the facts set out by

International, taken together, show that Plaintiffs cannot establish sufficient contacts by

International with Oklahoma necessary to support either general or specific personal

jurisdiction over International:

International is a non-profit corporation organized under the laws of California, recognized as tax exempt under section 501(c)(3) of the Internal Revenue Code. [See Clark Carr Declaration, ¶ 9, attached as Ex. 1.]

International's office and principal place of business are in California. [See Ex. 1, ¶

10.] International’s service agent is located in California. International does not have a

service agent in Oklahoma. [See Ex. 1, ¶ 11.] International licenses drug and alcohol rehabilitation centers throughout the United

States and the world, including centers in Italy, Spain, Sweden, Denmark, Russia, Colombia, Australia, Taiwan, Nepal, Mexico, and South Africa to use the NARCONON trademark in connection with delivery of drug and alcohol rehabilitation and drug education services. International licenses a total of 42 licensee rehabilitation centers, 12 of which are in the United States. [See Ex. 1, ¶ 12.]

International is not a parent corporation to any of the licensee entities. International

owns no capital stock in any corporation because it is a non-profit corporation that owns no stock. International has no ownership of Narconon Arrowhead or any other licensees of International's trademarks. [See Ex. 1, ¶ 13.]

International licenses ABLE's trademarks to Narconon of Oklahoma, Inc. dba

Narconon Arrowhead, an Oklahoma corporation with its principal place of business in Oklahoma. Narconon Arrowhead is the only Oklahoma entity that holds a trademarks license from International. [See Ex. 1, ¶ 14.]

International is not authorized to do business in Oklahoma. While it previously was

authorized to do business in Oklahoma, it voluntarily withdrew from Oklahoma in 2010. International does not direct business to or solicit business from residents of Oklahoma nor does it advertise specifically in Oklahoma. [See Ex. 1, ¶¶ 15, 16.]

International does not own or lease any real property in Oklahoma. [See Ex. 1, ¶ 16.] International does not have a bank account, other financial account or safe deposit

box in Oklahoma. It has not paid taxes in Oklahoma and has no telephone or fax


12

listings in Oklahoma. [See Ex. 1, ¶ 17.] International does not provide rehabilitation services. International has never

applied for or held any sort of a license or credential to provide rehabilitation services in Oklahoma. [See Ex. 1, ¶ 18.]

International has the right under its trademarks license to disseminate certain

standards, specifications, and guidelines for the proper use and display of the NARCONON trademark. International further has the right to monitor licensees' operations with respect to their use of the marks. [See Ex. 1, ¶¶ 19, 20.]

International's License Agreement with Narconon Arrowhead specifically states that

International and Arrowhead are not agents of one another and have no authority to act on behalf of the other. [See Ex. 1, ¶ 21.]

International and Narconon Arrowhead maintain their own finances; each hires its

own employees; and each runs its own daily operations. International only receives money from Narconon Arrowhead pursuant to the contractual terms of the trademarks license agreement. [See Ex. 1, ¶ 22.]

International does not control or have the right to control the day to day treatment

of Narconon Arrowhead students. International does not supervise the staff of Narconon Arrowhead and does not control its daily affairs. [See Ex. 1, ¶ 23.]

International occasionally travels to Oklahoma in its oversight of the license held by

Narconon Arrowhead. International’s sporadic visits to Oklahoma have nothing to do with the use, publication or advertisement of Plaintiffs' marks, logos and certifications. [See Ex. 1, ¶ 24.]

International has not and does not use its website to conduct any commercial

transactions with residents of Oklahoma. [See Ex. 1, ¶ 25.] The websites cited in Plaintiffs’ Complaint generally offer assistance by drug

rehabilitation counselors or information on rehabilitation programs. The counselors and other entities related to the rehabilitation services are separate legal entities from International. International does not offer any type of treatment itself. [See Ex. 1, ¶ 26.]

International has not used the NAFC Logo or the NAFC Mark or "Certifications" since

March 2013. [See Ex. 1, ¶ 27.] International never communicated to any other defendant about the use or

potential use of Plaintiffs’ marks, logos or certifications (until after the filing of the lawsuit). [See Ex. 1, ¶ 28.]

International is a licensing organization that licenses drug treatment centers around the


13

world so that they may use the counseling and other materials owned and trademarked by

ABLE. Its activities in Oklahoma are not continuous and systematic and do not support

general jurisdiction in Oklahoma. International's licensing of trademarks to Narconon

Arrowhead does not render International subject to specific personal jurisdiction in

Oklahoma. Nothing about Narconon Arrowhead’s trademark license is at issue in the

Complaint. Plaintiffs' assertions that International’s activities in Oklahoma render it

subject to jurisdiction in this District are unsupported by the record.

D. PLAINTIFFS’ “WEBSITE” ALLEGATIONS DO NOT ESTABLISH PERSONAL JURISDICTION

OVER INTERNATIONAL.

When communications on the internet form a significant part of the asserted basis

for jurisdiction, special issues can arise. The Complaint alleges “[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.” [Dkt. 3, ¶ 86 (emphasis added).]

Although International has a website, this fact is insufficient in itself to subject

International to general personal jurisdiction in Oklahoma under the standards set forth in

Daimler. See, 134 S. Ct. at 761-62; see also Soma Med. Int’l 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)).

Even prior to Daimler’s 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


14

residents of the forum.” Shrader, 633 F.3d at 1243 (quoting Smith v. Basin Park Hosp., Inc.,

178 F.Supp. 2d 1225, 1235 (N.D. Okla. 2001)). The focus is on the numerosity of

commercial transactions with a large enough number of forum residents over a long

enough period of time. It is not a matter of whether a website exists on the internet and

that can be viewed by residents in the forum. "In this internet age, the existence of an

interactive website which allows for the exchange of information and for sales transactions

over a virtually unlimited geographical area cannot, by itself, equate with the existence of

general personal jurisdiction." Agape Flights, Inc. v. Covington Aircraft Engines, Inc., 771

F.Supp. 2d 1278, 1287-1288 (E.D. Okla. 2011) (referencing with approval Soma, Zippo and

Baskin Park Hosp. and granting motion to dismiss).

“[C]ourts [should] look to indications that a defendant deliberately directed its

message at an audience in the forum state and intended harm to the plaintiff occurring

primarily or particularly in the forum state.” Shrader, 633 F.3d at 1241. The Tenth Circuit

takes a restrictive view of the concept of “purposeful direction” toward the forum state, and

requires that “the forum state must be the focal point of the tort.” Id. at 1244 (quoting

Dudnikov, 514 F.3d at 1074 n. 9 and citing Calder v. Jones, 464 U.S. 783 (1984)). Plaintiffs

have not, and cannot, allege such conduct here.

Interactivity must be a significant part of a website to allow it to serve as the basis

for personal jurisdiction. A website was deemed not interactive where it was alleged

"Kansas customers can generate product codes, search products, email [defendant's]

management, file online requests for information, sign a guestbook, download manuals and

technical specifications, and search for authorized distributors and repair facilities."

Custom Cupboards, Inc. v. Cemp SRL, 2010 U.S. Dist. LEXIS 44822 *8 (D. Kan. May 7, 2010).


15

Applying Zippo,2 the Custom Cupboards district court found the website not only was

primarily passive, but also "there is nothing on the website to suggest that defendant

specifically intended commercial interaction with Kansas residents over the website," a

factor consistent with Shrader's requirement of targeting in particular forum residents with

a website. Id. at *9.

Here, there is no allegation and no evidence that International “intended harm to the

plaintiff occurring primarily or particularly in the forum state” as a result of its lone

reference to CCDC accreditation of a California drug counselor. See Shrader, 633 F.3d at

1241. Plaintiffs were not authorized to issue CCDC certifications to California drug

counselors by operation of the California Code of Regulations. [See Request for Judicial

Notice, Exhibit 2.] Plaintiffs are citizens of Indiana. Plaintiffs do not allege they have

offices, personnel, or staff in the State of Oklahoma or that they primarily or particularly

receive income or lost income from the State of Oklahoma as a consequence of the alleged

"advertising" of three or four individuals as being CCDC on the International website. [See

Dkt. 3 at ¶¶ 137, 175, 190, 226.]

Plaintiffs’ allegations are akin to Soma, where the plaintiff alleged the defendant

“maintains an internet website offering information concerning [defendant’s] services and

soliciting business from all over the planet, which allows access from anywhere, including

[the forum state].” Soma, 196 F.3d at 1297. The Tenth Circuit held it “ha[s] no difficulty

concluding that it is the type of website which does not subject its creator [defendant] to

personal jurisdiction in [the forum state], under any standard promulgated by any court.”

Id.

2 The Custom Cupboards court states that Zippo is the “seminal case on this issue” and notes that Tenth Circuit courts cited this case in Capitol Federal Savings Bank v. Eastern Bank Corp., 493 F.Supp. 2d 1150, 1159-62 (D. Kan. 2007) and Soma, 196 F.3d at 1296.


16

Plaintiffs’ bare allegations related to International's website do not establish

personal jurisdiction. Contacts directed at the forum state “must be of a sort ‘that

approximate physical presence’ in the state—and ‘engaging in commerce with residents of

the forum state is not in and of itself the kind of activity that approximates physical

presence within the state’s borders.’” Shrader, 633 F.3d at 1243 (quoting Bancroft &

Masters, Inc. v. Augusta Nat’l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000)). Whether a website

selling products to residents of a state could create general jurisdiction depends on the

degree of activity, but“[t]he case law sets the bar quite high, ... denying general jurisdiction

absent substantial sales.” Shrader, 633 F.3d at 1243 (listing cases). In this case,

International is a corporation that works with treatment centers to license them to use

certain trademarked counseling materials. It does not use its website to conduct any

commercial transactions with any residents of Oklahoma, nor to direct any International

activity into Oklahoma with the intent of engaging in any commercial interaction with

Oklahoma or any residents of Oklahoma. [See Ex. 1, ¶¶ 16, 25.]

The Complaint's allegation that International’s website presence might engage

individuals in the forum state does not constitute well-pleaded facts showing

International’s website is intended to reach Oklahoma in order to commit a tort or other

unlawful act within Oklahoma. This distinction was made by the Tenth Circuit in Shrader,

in its discussion of the types of contacts that together are sufficient to establish jurisdiction.

The Shrader defendant created a web blog for the specific purpose of harming the plaintiff,

used the plaintiff's name in the internet address on the attack blog, and the defendant's

conduct "uniquely targeted" the plaintiff within the forum state and was directed at an

audience that "would have inherently included a substantial number of forum state

residents and businesses." Shrader, 633 F.3d at 1245 (citing Silver v. Brown, 382 F. App'x


17

723 (10th Cir. 2010)).

The Complaint fails to allege facts remotely as compelling as those in Shrader. The

websites cited in the Complaint generally only offer information about drug rehabilitation

counselors or information on rehabilitation programs. [See Ex. 1, ¶ 26.] The counselors

and other entities related to rehabilitation are separate legal entities from International;

International does not offer any type of treatment itself. Id. The allegations of the

Complaint do not show any degree of activity (commercial activity or otherwise) in

Oklahoma by International through websites. Plaintiffs fail to allege the kind of sustained

activity or transactions with a substantial number of Oklahoma residents by International

to support jurisdiction.

E. PLAINTIFFS’ “CONSPIRACY” ALLEGATIONS DO NOT SUPPORT PERSONAL JURISDICTION

OVER INTERNATIONAL.

The Complaint alleges “personal jurisdiction exists over all Defendants due to

Defendants’ participation in a civil conspiracy with its [sic] co-Defendants located in this

forum.” [Dkt. 3, ¶ 86.] 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, 511 F.3d at 1069 (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 Int’l, 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 Am.


18

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 [plaintiff’s 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”).

Due process also requires Plaintiffs to show jurisdiction over each defendant

individually. “[T]o hold that one co-conspirator's presence in the forum creates jurisdiction

over other co-conspirators threatens to confuse the standards applicable to personal

jurisdiction and those applicable to liability.” Melea, 511 F.3d at 1070. Even when a prima

facie case of conspiracy might exist, this does not translate to a finding of jurisdiction over a

defendant:

Assuming that Melea could make a prima facie showing of a conspiracy, Heiserman might warrant holding either Engel or Jawer liable for the other's acts under [the forum’s] law. However, it does not necessarily establish that jurisdiction over Engel automatically translates into jurisdiction over Jawer. Due process requires that Jawer itself have minimum contacts with [the forum].

Id. (distinguishing RTC v. Heiserman, 898 P.2d 1049 (Colo. 1995). Whether Plaintiffs can

establish personal jurisdiction over any other defendant is immaterial to the threshold

question of whether Plaintiffs can establish jurisdiction over International.

With regard to its analysis of personal jurisdiction, the Court should require from

Plaintiffs the same pleading standard set forth in Twombly with regard to the jurisdictional

allegations against each of the Defendants:

In addition, the Supreme Court recently confirmed that merely conclusory allegations are not entitled to the presumption of truth at the pleading stage and are not sufficient to state a claim for relief; rather, the plaintiff must plead facts in sufficient detail to establish a plausible right to relief. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50, 173 L. Ed. 2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-57, 127 S. Ct. 1955, 167 L.


19

Ed. 2d 929 (2007)). Applying these standards in the context of an antitrust claim, the Supreme Court held that a plaintiff may not merely allege the existence of a conspiracy, but must plead sufficient factual matter to suggest that an agreement was actually made. See Twombly, 550 U.S. at 556-57. There is no reason to believe that these same standards should not also govern a plaintiff's allegations in support of jurisdiction. See, e.g., Watkins v. Kajima Int'l, 2009 U.S. Dist. LEXIS 85787, 2009 WL 3053856, at *6 (M.D. Tenn. Sept. 18, 2009) (pleading deficient under Twombly did not provide minimum contacts necessary to support the assertion of personal jurisdiction).

Near v. Crivello, 673 F. Supp. 2d 1265 (D. Kan. 2009). Plaintiffs’ general allegation of civil

conspiracy is not a basis for subjecting International to personal jurisdiction in Oklahoma.

As Clark explained:

In this case, Plaintiff alleges as a "fourth cause of action" a civil conspiracy. Plaintiff makes only general allegations, and none of the allegations include the commission of an overt act in Oklahoma in furtherance of the conspiracy.

Id., 400 F.Supp. 2d at 1296. Plaintiffs’ conspiracy allegations consist entirely of the

following conclusory assertions, unsupported by any alleged facts:

1. Additionally, personal jurisdiction exists over all Defendants due to Defendants’ participation in a civil conspiracy with its co-Defendants located in this forum. [Dkt. 3, ¶ 86.]

2. International 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 NAFC’s 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 the allegations states commission of “an overt act in Oklahoma in furtherance of


20

the conspiracy,” but that is what is required to rely on conspiracy as the basis for assertion

of jurisdiction. Clark, 400 F. Supp. 2d at 1297. "The overt act must not be just alleged, but

must be shown by affidavit that it likely took place." Id.

When an allegation of conspiracy is controverted by affidavits that deny the

allegations, dismissal is the correct result:

As the mere allegation of conspiracy was controverted by the affidavits presented by the alleged co-conspirators in support of their denial of the conspiracy, the trial court correctly found that it had personal jurisdiction only of Niles & Moser, and dismissed the action as to the other appellees.

Baldridge, 466 F.2d at 68; see also Toytrackerz, LLC v. Am. Plastic Equip., Inc., 615 F. Supp. 29

1242 (D. Kan. 2009). International has submitted a “sworn affidavit[] that no conspiracy ...

existed,” Am. Land Program, 710 F.2d at 1454, including that International never

communicated to any other defendant about the use or potential use of Plaintiffs’ marks or

logos. [See Ex. 1, ¶ 28.] The allegations of the Complaint are precisely the type of naked

conclusions that cannot support personal jurisdiction under a conspiracy theory. Repeated

incantations of “common plan,” “common scheme,” or “conspiracy,” are no substitute for

specific facts. Instead, the pleading of civil conspiracy is that certain Defendants infringed

Plaintiffs' marks, and the alleged multiple infringements are evidence of an agreement to

conspire. As a matter of law, however, "[a]llegations 'must be placed in a context that raises

a suggestion of preceding agreement, not merely parallel conduct that could just as well be

independent action.'" Peterson v. Grisham, 2008 U.S. Dist LEXIS 70206 *28 (E.D. Okla. Sept.

17, 2008) (quoting Twombly, 127 S.Ct. at 1966), aff'd., 594 F.3d 723 (10th Cir. 2010).

The Complaint offers only conclusory allegations related to an alleged conspiracy.

There are no well-pleaded facts that could support a finding of conspiracy involving

International. International directly controverts the conclusory allegations by affidavit. A


21

finding of personal jurisdiction over International based on mere pleading of civil

conspiracy would be improper.

II. EXERCISE OF JURISDICTION OVER INTERNATIONAL WOULD VIOLATE DUE PROCESS.

Even if Plaintiffs could make a prima facie showing of International’s minimum

contacts with Oklahoma, exercise of personal jurisdiction over International would be

unreasonable, unfair, and in violation of due process. The Tenth Circuit identified factors to

be considered in determining the reasonableness of exercise 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 state’s interest in resolving the dispute, (3) the plaintiff’s interest in receiving convenient and effective relief, (4) the interstate judicial system’s 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, 149 F.3d at 1095-96. Applied to International, these factors demonstrate

that exercise of jurisdiction over International in Oklahoma would be unreasonable and

unfair.

A. THE 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

International in this case is significant. International is a California corporation with its

principal place of business in California. It has no offices, assets, or employees in

Oklahoma. Accordingly, this factor weighs in favor of International.

B. THE FORUM STATE’S 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 brought claims against 82


22

Defendants – 13 residing in Oklahoma and the others residing in at least 14 states, Canada,

and the United Kingdom. Those claims are based on conduct not centered in Oklahoma, but

alleged to have 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) (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).

C. 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 plaintiff’s chances of

recovery will be greatly diminished by forcing it to litigate in another forum because of that

forum’s laws or because the burden may be so overwhelming as to practically foreclose

pursuit of the lawsuit.” OMI Holdings, 149 F.3d at 1097. No such danger exists here. As

noted above, Plaintiffs are Nevada corporations based in Indiana. There is no reason to

believe Oklahoma is a more convenient forum than the courts in or closer to their home

states. Nor do they suggest that a peculiarity of Oklahoma law greatly enhances their

chances of recovery here. This factor does not support this Court’s assertion of jurisdiction

over International.

D. THE INTERSTATE JUDICIAL SYSTEM’S INTEREST IN OBTAINING EFFICIENT RESOLUTION. This factor examines whether the forum state is the most efficient place to litigate

the dispute. Id., at 1097. Key parts of this inquiry are location of the wrong underlying the

lawsuit and what state’s substantive law governs. Id.

This case involves Nevada-incorporated Plaintiffs with their principal place of

business in Indiana. Of the 82 Defendants, only 13 are residents of Oklahoma. Oklahoma is


23

not the epicenter of this dispute – it is one of many places in which the alleged wrongful

conduct has occurred. The majority of the claims asserted are based on federal statutes or

common law. The single Oklahoma statutory claim involves a right-of-publicity statute, 12

O.S. § 1449 -- a statute hardly unique to Oklahoma and one that defies relief to Plaintiffs in

Oklahoma as a matter of law. See, Woods v. Prestwick House, Inc., 247 P.3d 1183, 1187 (Okl.

2011) (section 1449 protects “individuals from unauthorized use of the person’s name,

voice, signature, photograph or likeness,” indicating the statute only may be invoked by

individuals, not corporate entities such as Plaintiffs (emphasis added)). Thus, Oklahoma is

not the “most efficient” place in which to litigate this dispute.

E. STATE INTEREST IN FURTHERING FUNDAMENTAL SUBSTANTIVE SOCIAL POLICIES.

The final factor 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. This

factor asks whether exercise of jurisdiction by the forum state affects the substantive social

policy interests of other states. This factor does not appear to apply here.

Summarizing the role of due process in the determination of whether jurisdiction

should be exercised over a party, the Tenth Circuit stated:

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 Clause preclude a district court from exercising jurisdiction over a defendant.

Id. Even taking the Complaint’s conclusory allegations against International as true,

International’s contact with Oklahoma would be so slight that compelling International to

defend this suit in Oklahoma would be unreasonable and inconsistent with notions of “‘fair

play and substantial justice’ which form the bedrock of the due process inquiry.” Id.


24

III. ALTERNATIVELY, INTERNATIONAL ADOPTS THE ARGUMENTS MADE BY CERTAIN DEFENDANTS

IN THEIR MOTION TO DISMISS BASED ON PLAINTIFFS’ FAILURE TO STATE A CLAIM. [DKT. #287.]

Should the Court find that its exercise of jurisdiction over Narconon International is

proper, International hereby moves for dismissal of Plaintiffs’ Complaint for failure to state

a claim pursuant to FED. R. CIV. P. 12(b)(6), as further set out in the Motion to Dismiss filed

by Defendants Michael George, Dena G. Goad, Kathy Gosselin, Michael J. Gosselin, Derry

Hallmark, Michael Otto, Pita Group, Inc., Gary W. Smith, Vicki Smith, Michael St. Amand,

Janet Watkins, Tom Widman. [Dkt. 287], and their accompanying brief in support. [Dkt.

288].

Specifically, Plaintiffs’ allegations that International infringed the federally

registered NAFC Mark under 15 U.S.C. §1114(1) (Count I), fail to state a claim because there

is no allegation that International ever used, let alone infringed, that registered mark. The

allegations of common law trademark infringement (Count II), and the parallel claim of

“federal trademark infringement” under section 43(a) of the Lanham Act, 15 U.S.C.

§1125(a) (Count III), of Plaintiffs’ unregistered NAFC Logo and its alleged unregistered

Certifications fail because: 1) there is no allegation that International used the NAFC Logo

or certain of the alleged certification marks; 2) the alleged unregistered Certification(s)

that International allegedly used, as well as the other Certifications, are unprotected

because they are descriptive as a matter of law, with no allegation that they have acquired

secondary meaning; and 3) unregistered certification marks are not protectable under the

common law or the Lanham Act.

Finally, to the extent Count III is construed to constitute a claim for false advertising,

it fails to allege the necessary proximate cause between the alleged false advertising and

alleged damage to Plaintiffs. As to these claims, International adopts the arguments and


25

authorities presented by certain Defendants in their Motion to Dismiss. [Dkt. 287.]

Further, although Plaintiffs refer to “false advertising” in their Complaint, they fail to

plead a statutory cause of action for “false advertising” under the Lanham Act. To the

extent their statutory pleading failure is excused, Plaintiffs fail to state a claim for false

advertising because they fail to allege the requisite proximate cause between any false

advertising by Defendants and any cognizable damage or injury to Plaintiffs. International

again adopts the arguments and authorities presented by certain Defendants in their

Motion to Dismiss. [Dkt. 287.]

CONCLUSION

Plaintiffs fail to establish general or personal jurisdiction of the State of Oklahoma

over Narconon International. Dismissal of this Oklahoma lawsuit is appropriate as to

International as a matter of law. Alternatively, Plaintiffs’ claims against International

should be dismissed for failure to state a claim.

WHEREFORE, premises considered, Narconon International moves the Court for

dismissal of all of Plaintiffs’ claims against it under FED. R. CIV. P. 12(b)(2) as this Court

lacks personal jurisdiction over International. Alternatively, the Court should dismiss

Plaintiffs’ causes of action for failure to state a claim under FED. R. CIV. P. 12(b)(6).

Respectfully Submitted, By: ___/s/ John H. Tucker______________________________ JOHN H. TUCKER, OBA 9110 [email protected] COLIN H. TUCKER, OBA 16325 [email protected] KERRY R. LEWIS, OBA 16519 [email protected] DENELDA L. RICHARDSON, OBA 20103 [email protected] RHODES HIERONYMUS JONES TUCKER & GABLE






26

P.O. Box 21100 Tulsa, Oklahoma 74121-1100 Phone: (918) 582-1173; Fax: (918) 592-3390 ATTORNEYS FOR DEFENDANT,

NARCONON INTERNATIONAL

CERTIFICATE OF SERVICE

I certify that on the 1st day of August, 2014, I electronically transmitted the attached document to the Clerk of Court using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: Attorneys for Plaintiffs:

David R. Keesling [email protected] Heidi L. Shadid [email protected] Sloane Ryan Lile [email protected] Keesling Law Group, PLLC 401 S. Boston Ave. Tulsa, OK 74103

Attorneys for Defendant, Religious Technology Center:

David L. Bryant [email protected] David E. Keglovits [email protected] Amelia A. Fogleman [email protected] Gable Gotwals 1100 ONEOK Plaza 100 W. Fifth Street Tulsa, OK 74103-4217

Attorneys for Defendants, Narconon of Oklahoma, Inc., Michael George, Derry Hallmark, Janet Watkins, Tom Widman, Vicki Smith, Michael Otto, Michael Gosselin Kathy Gosselin, Kent McGregor, Michael St. Amand, Pita Group, Gary Smith, and Dena Goad:

M. David Riggs [email protected] Donald M. Bingham [email protected] Wm. Gregory James [email protected] Riggs Abney Neal Turpen Orbison & Lewis










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502 W. 6th Street Tulsa, OK 74119

Attorneys for Defendants: Best Drug Rehabilitation, Joseph Guernaccini, Anthony Bylsma, Friends of Narconon International, Glen Petcavage, A Life Worth Living, Thomas Garcia, Golden Millennium Productions, Inc., David S. Lee, III Richard Hawk, Narconon South Texas, Inc., Narconon Eastern United States, Inc., Great Circle Studios, LLC, Luria Dion, James Woodworth, Jonathan Moretti, International Academy of Detoxification, Royalmark, Premazon, Narconon Spring Hill, Narconon Freedom Center, Inc., Michael DiPalma, Daphna Hernandez, Robert J. Hernandez, Mary Rieser, Carl Smith, Nicholas Thief, Narconon of Georgia, Inc., Rebecca Pool, and Jonathan Beazley:

Charles D. Neal, Jr. [email protected] Rachel D. Parrilli [email protected] Stacie L. Hixon [email protected] Steadley Neal CityPlex Towers, 53rd Floor 2448 E. 81st Street Tulsa, OK 74137

Attorneys for Defendant, David S. Lee:

Richard P. Hix [email protected] Alison A. Verret [email protected] McAfee & Taft, P.C. 1717 S. Boulder Ave., Suite 900 Tulsa, OK 74119

Attorney for Defendant, Church of Scientology:

John J. Carwile [email protected] Mary E. Kindelt [email protected] McDonald McCann Metcalf & Carwile First Place Tower 15 East Fifth Street, Suite 1400 Tulsa, OK 74103

Attorneys for Defendants, Narconon Freedom Center, Inc., and Nicholas Thiel:









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Robert D. Nelon [email protected] Nathaniel T. Haskins [email protected] Hall Estill Hardwick Gable Golden & Nelson Chase Tower 100 N. Broadway, Suite 2900

Oklahoma City, OK 73102-8865 Attorney for Defendants, Jonathan Beazley, Michael DiPalma, and Joseph Guernaccini: Todd Nelson [email protected] Fellers Snider Blankenship Bailey & Tippens The Kennedy Building 321 S. Boston, Suite 800 Tulsa, OK 74103-3318 Attorneys for Defendant Philip R. Kelly, II: Richard P. Hix [email protected] Alison A. Verret [email protected] McAfee & Taft 1717 S. Boulder Ave., Suite 900 Tulsa, OK 74119 __/s/ John H. Tucker__________________________







nafc vs. narconon: motion to dismiss by nn int

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