SARAH S. VANCE, District Judge.
Defendant House of Auth, LLC ("HOA") moves the Court to dismiss plaintiff 721 Bourbon, Inc.'s trademark infringement, trademark dilution, unfair competition, and unfair trade practices claims against it for lack of personal jurisdiction. For the following reasons, the Court GRANTS the motion.
This is a trademark and unfair competition case. Plaintiff 721 Bourbon is a Louisiana company that owns and operates several "Tropical Isle" bars in New Orleans.
HOA is a Delaware Limited Liability Company with its principal place of business in Stamford, Connecticut.
721 Bourbon filed suit against HOA in this Court on January 23, 2015. Its complaint pleads several claims in connection with HOA's use of its GURRNAID mark, including federal trademark infringement, trademark dilution, and unfair competition under the Lanham Act, as well as trademark infringement and dilution under Louisiana law.
On May 1, 2015, HOA filed a motion to dismiss for lack of personal jurisdiction.
After HOA filed its motion to dismiss, the parties agreed to a period of jurisdictional discovery. Initially, HOA's motion was scheduled for submission on June 17, 2015, but HOA agreed to reset the submission date to August 5, 2015, giving 721 Bourbon an additional seven weeks to develop facts to support its case for personal jurisdiction.
Personal jurisdiction "is an essential element of the jurisdiction of a district court, without which it is powerless to proceed to an adjudication." Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999). When a nonresident defendant moves the court to dismiss for lack of personal jurisdiction under Rule 12(b)(2), the plaintiff bears the burden to show that personal jurisdiction exists. Revell v. Lidov, 317 F.3d 467, 469 (5th Cir.2002). When a court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, as in this case, the nonmoving party need only make a prima facie showing; "[p]roof by a preponderance of the evidence is not required." Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir.2008). The allegations of the complaint, except as controverted by opposing affidavits, must be taken as true, and all conflicts in the facts must be resolved in favor of plaintiffs. Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir.1985). In making its determination, the Court may consider "affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery." Revell, 317 F.3d at 469 (quoting Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir.1985)).
A court has personal jurisdiction over a nonresident defendant if (1) the forum state's long-arm statute confers personal jurisdiction over that defendant, and
There are two ways to establish minimum contacts: specific jurisdiction and general jurisdiction. Wilson v. Belin, 20 F.3d 644, 647 (5th Cir.1994). General jurisdiction will attach, even if the act or transaction sued upon is unrelated to the defendant's contacts with the forum state, if the defendant has engaged in "continuous and systematic" activities in the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Wilson, 20 F.3d at 647. Contacts between a defendant and the forum state must be "extensive" to satisfy the "continuous and systematic" test. Submersible Sys., Inc. v. Perforadora Cent., S.A. de C.V., 249 F.3d 413, 419 (5th Cir.2001); see also Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S.Ct. 2846, 2853-54, 180 L.Ed.2d 796 (2011) ("For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation it is an equivalent place, one in which the corporation is fairly regarded as at home.").
Specific jurisdiction exists when a nonresident defendant "has `purposefully directed its activities at the forum state and the litigation results from alleged injuries that arise out of or relate to those activities.'" Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 868 (5th Cir.2001) (quoting Alpine View Co. v. Atlas Copco A.B., 205 F.3d 208, 215 (5th Cir.2000)); see also Helicopteros Nacionales, 466 U.S. at 414 n. 8, 104 S.Ct. 1868. Minimum contacts may be established by actions, or even just a single act, by the nonresident defendant whereby it "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). "The non-resident's `purposeful availment' must be such that the defendant `should reasonably anticipate being haled into court' in the forum state." Ruston Gas Turbines Inc. v. Donaldson Co., 9 F.3d 415, 419 (5th Cir.1993) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). Importantly, "[t]he unilateral activity of [a plaintiff] who claim[s] some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State." Pervasive Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214, 222 (5th Cir.2012) (quoting Hanson, 357 U.S. at 253, 78 S.Ct. 1228).
The Fifth Circuit has synthesized the test for specific jurisdiction into a three-step inquiry. The court must determine
Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir.2006) (quoting Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir.2002)). "If the plaintiff successfully satisfies the first two prongs, the burden shifts to the defendant to defeat jurisdiction by showing that its exercise would be unfair or unreasonable." Id.
HOA contends that the Court lacks jurisdiction over it because 721 Bourbon has failed to allege sufficient minimum contacts between it and Louisiana. 721 Bourbon counters that HOA has contacts with Louisiana sufficient to confer specific jurisdiction.
721 Bourbon argues that HOA has established "traditional business contacts" with Louisiana sufficient to confer specific jurisdiction. In support, 721 Bourbon relies chiefly on: (1) HOA's sale of allegedly infringing merchandise, through its website, to 721 Bourbon's Louisiana-based investigator; (2) HOA's exchange of emails and phone calls with 721 Bourbon's investigator concerning the order; (3) HOA's shipment of merchandise to the investigator's Louisiana address; and (4) HOA's issuance of a partial refund to the investigator for expedited shipping services that were not provided. HOA submits that it has no offices or employees in Louisiana; that it does not own or rent any property within the state; and that its only sale to a Louisiana resident was to 721 Bourbon's private investigator. Other than this single transaction, HOA has never sold any merchandise in Louisiana — through its website or otherwise. HOA supports these contentions with the sworn declaration
A court, in determining whether it can exercise personal jurisdiction over a nonresident defendant based on the defendant's online presence, "look[s] to the `nature and quality of commercial activity that an entity conducts over the Internet.'" Mink, 190 F.3d at 336 (quoting Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124 (W.D.Pa.1997)). To structure this inquiry, courts frequently draw on the test set forth in Zippo, which "categorized Internet use into a spectrum of three areas" as follows:
Id. (alteration in original) (citations omitted). Importantly, while the Zippo sliding scale remains a "factor in the jurisdiction analysis," the Fifth Circuit has indicated that "internet-based jurisdictional claims must continue to be evaluated on a case-by-case basis, focusing on the nature and quality of online and offline contacts to demonstrate the requisite purposeful conduct that establishes personal jurisdiction." Pervasive Software, Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214, 227 n. 7 (5th Cir.2012).
In applying the Zippo test, district courts within the Fifth Circuit have often exercised personal jurisdiction over defendants whose websites enabled online purchases. See Tempur-Pedic Int'l v. Go Satellite, Inc., 758 F.Supp.2d 366, 373 (N.D.Tex.2010) (defendant's website "allow[ed] placement of online orders and enabl[ed] communication between Texas-based customers and [defendant's] sales staff via live chat and e-mail"); AdvanceMe, Inc. v. Rapidpay, LLC, 450 F.Supp.2d 669, 673 (E.D.Tex.2006) (defendant's website allowed potential customers to "fill out an online form and apply for [defendant's] services through its website"); Am. Eyewear, Inc. v. Peeper's Sunglasses & Accessories, Inc., 106 F.Supp.2d 895, 901 (N.D.Tex.2000) (website allowed customers to "submit product order forms that contain credit card and shipping information" and to "receive personalized service directly from the web site by using the site's e-mail option").
Importantly, however, courts have also noted that personal jurisdiction
Moreover, as the Supreme Court has made clear, the relationship required for specific personal jurisdiction "must arise out of contacts that the `defendant himself' creates with the forum State." Id. (quoting Burger King, 471 U.S. at 475, 105 S.Ct. 2174). Thus, the focus of the jurisdictional inquiry is on the defendant's own conduct, not the unilateral activity of a plaintiff. See Asahi Metal Indus. Co. v. Superior Court of California, Solano Cnty., 480 U.S. 102, 109, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (noting that the Supreme Court has "rejected the assertion that a consumer's unilateral act of bringing the defendant's product into the forum State was a sufficient constitutional basis for personal jurisdiction over the defendant").
In applying these principles, district courts within the Fifth Circuit have concluded that it is improper to rely on a transaction — for jurisdictional purposes — that was initiated by the plaintiff. In QR Spex, Inc. v. Motorola, Inc., for example, the defendant sold products that allegedly infringed the plaintiff's patent. 507 F.Supp.2d 650, 661 (E.D.Tex.2007). The plaintiff hired an investigator, who purchased two such products by "reaching out to non-Texas retailers" and arranging a shipment to the forum state. Id. The Court refused to consider these purchases "because they constitute [plaintiff's] unilateral acts; albeit acts that successfully circumvented the measures [defendant] undertook to avoid availing itself to this forum." Id. Similarly, in Tempur-Pedic, a trademark case, the defendant operated a website that sold products online, making at least three sales to residents of the forum state. 758 F.Supp.2d at 375. The defendant argued that jurisdiction was improper because one of these sales was to
Here, HOA's website is more than just an online billboard, passively relaying information; it allows visitors to purchase HOA's allegedly infringing products online. But while its online presence makes sales to Louisiana residents possible, HOA's actual contact with Louisiana has been de minimis. The undisputed evidence reveals that HOA has made only one sale to a Louisiana resident. Moreover, this single sale was made not to a disinterested third party but to an investigator acting on behalf of 721 Bourbon. As QR Spex, Tempur-Pedic, and Monistere make clear, a plaintiff cannot rely on such unilateral activity to manufacture jurisdiction in its chosen forum.
The remaining contacts with Louisiana cited by 721 Bourbon are similarly unavailing because they too were initiated by 721 Bourbon's own investigator. For instance, 721 Bourbon cites an email message that HOA' customer service representative sent to its private investigator. But this email was not a marketing outreach effort intended to create new inroads into the Louisiana market; its purpose was merely to confirm the order that the investigator had already placed.
721 Bourbon's second argument is that this Court has personal jurisdiction over HOA because HOA "engaged in tortious conduct outside of the forum state that was intended to and d[id] in fact cause injury within the forum state."
In Calder, an actress living in California brought a libel suit in California state court against a reporter and an editor for the National Enquirer, a publication based in Florida but whose largest market was California. 465 U.S. at 784-85, 104 S.Ct. 1482. The Supreme Court noted that the allegedly libelous article drew on California sources; that the article centered on the California activities of a California resident; and that the defendants knew that "the brunt of the harm, in terms both of respondent's emotional distress and the injury to her professional reputation, was suffered in California." Id. at 787-90, 104 S.Ct. 1482. Because California was the "focal point both of the story and of the harm suffered," the Court held that California's exercise of jurisdiction over defendants was consistent with due process. Id. at 789, 104 S.Ct. 1482.
Recently, the Supreme Court clarified the application of Calder in Walden v. Fiore, ___ U.S. ___, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014). There, a Georgia police
The Court reconciled its holding with its prior decision in Calder by stating: "The crux of Calder was that the reputation-based `effects' of the alleged libel connected the defendants to California, not just to the plaintiff." Id. at 1123-24. The Court also noted that the strength of the relationship in Calder was largely a function of the nature of the libel tort. Id. at 1124. Because libel requires publication to third persons, "the reputational injury caused by the defendants' story would not have occurred but for the fact that the defendants wrote an article for publication in California that was read by a large number of California citizens." Id. The Court concluded that under Calder, "the proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant' conduct connects him to the forum in a meaningful way." Id. at 1125.
Here, HOA's use of allegedly infringing product designations does not meaningfully connect it to Louisiana. Unlike in Calder, where the defendants' article was published to numerous readers in California, HOA has not marketed or sold any merchandise in Louisiana or completed any transactions with Louisiana residents — excepting, of course, its single sale to 721 Bourbon's own investigator, which the Court has found insufficient to confer jurisdiction. HOA's only connection to Louisiana is that plaintiff 721 Bourbon happens to be based there. Specific personal jurisdiction cannot rest on such "random, fortuitous, or tentative" connections. Burger King, 471 U.S. at 475, 105 S.Ct. 2174; see also Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 870 (5th Cir.2001) ("We refuse to ignore the limits of specific jurisdiction to allow Appellants to sue Appellee in the district court ... when the `potential' injury claimed by Appellants resulted from interference with financing agreements that have nothing to do with Texas except for the mere fortuity that Appellants reside there.").
721 Bourbon makes much of the fact that the USPTO previously denied two of HOA's applications for trademark registration, citing the likelihood of confusion with marks owned by 721 Bourbon. 721 Bourbon argues that because these Office Actions put HOA on notice of 721 Bourbon's mark, HOA's continued use of its mark is aimed directly at 721 Bourbon and intended to cause harm in this state.
721 Bourbon's reliance on Source Network, a case from the Northern District of Texas, is also unavailing. There, a Texas plaintiff filed a trademark infringement and unfair competition suit in Texas against a nonresident defendant, and the Texas court found that specific personal jurisdiction existed under Calder. 2015 WL 2341063, at *2. Importantly, the court emphasized the defendant had initiated contact with Texas by sending the plaintiff a cease and desist letter and by emailing several of the plaintiff's Texas-based customers about matters directly relevant to the plaintiff's lawsuit. Id., at *8 n. 8. Neither of those factors are present here. HOA did not send 721 Bourbon a cease-and-desist letter; nor has it initiated contact with either 721 Bourbon or any of its Louisiana-based customers. Thus, the reasoning of the court in Source Network does not apply to the very different facts at issue here.
For these reasons, the Court therefore that HOA does not have sufficient minimum contacts with Louisiana such that the exercise of specific personal jurisdiction over HOA would comport with due process.
721 Bourbon submits in the alternative that the Court should defer ruling on personal jurisdiction until trial, citing the "intertwined" nature of its jurisdictional case and the merits of its claims. 721 Bourbon argues that both the question of jurisdiction under Calder and the merits of its case turn on HOA's awareness of 721 Bourbon's trademarks and its intent to harm 721 Bourbon in Louisiana by infringing those marks. 721 Bourbon also takes issue with HOA's responses to jurisdictional discovery, arguing that HOA's "deficient" responses to its requests for production deprived 721 Bourbon of the ability to make a more complete showing of personal jurisdiction. For these reasons, 721 Bourbon argues that it should be permitted to conduct additional discovery and present its jurisdictional case alongside its case on the merits at trial.
The Court rejects 721 Bourbon's request. Initially, the Court notes that 721 Bourbon had an opportunity to conduct jurisdictional discovery. After filing its motion to dismiss, HOA agreed to reset the submission date for its motion from June 17, 2015 to August 5, 2015, thereby giving 721 Bourbon an additional seven weeks to develop facts to support its case for personal jurisdiction.
More importantly, the information that 721 Bourbon seeks is irrelevant to the existence of personal jurisdiction. It is well established that "discovery on matters of personal jurisdiction ... need not be permitted unless the motion to dismiss raises issues of fact." Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 855 (5th Cir.2000). And, "[w]hen the lack of personal jurisdiction is clear, discovery would serve no purpose and should not be permitted." Id. Here, HOA has produced evidence that it operates entirely outside of Louisiana and that it has made no transactions with Louisiana residents, other than a single sale, through its website, to 721 Bourbon's own investigator. 721 Bourbon has not identified any evidence that might rebut HOA's evidence of its lack of contacts or raise an issue of fact regarding personal jurisdiction. 721 Bourbon argues instead that it should be permitted to conduct more discovery on HOA's awareness of 721 Bourbon's registered trademarks and its "intent relating to the sale of [its] infringing products."
The Court finds that 721 Bourbon has failed to make a prima facie showing of personal jurisdiction. As such, additional discovery on personal jurisdiction is not warranted, and 721 Bourbon's case must be dismissed.
For the Court GRANTS defendant's motion to dismiss for lack of personal jurisdiction.