Daste et al v. Elegalsupply.com LLC

Filing 22

ORDER AND REASONS denying 12 Motion to Dismiss. Signed by Judge Ivan L.R. Lemelle. (ijg, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

KEVIN DASTE, ET AL

CIVIL ACTION

VERSUS

NO. 12-1446

ELEGALSUPPLY.COM, LLC

SECTION B (1)

ORDER AND REASONS
Before the Court is Defendant’s Motion to Dismiss (Rec. Doc.
No. 12) pursuant to Fed. R. Civ. P. 12(b)(1), (2), (4), (6) and
(7). Plaintiffs Kevin Daste, et al. (“Plaintiffs”) filed opposition
(Rec. Doc. No. 15) thereto and Defendant Elegalsupply.com, LLC
(“Defendant”) replied (Rec. Doc. No. 20-1). Accordingly, and for
the reasons articulated below,
IT IS ORDERED that Defendant’s Motion to Dismiss be DENIED.1

PROCEDURAL AND FACTUAL HISTORY
On

February

22,

2007,

Plaintiff,

Daste,

purchased

and

registered the “legalsupply.com” (“Domain Name”) and subsequently
on September 26, 2007, Daste modified the Domain Name registration
information to reflect the domain management company Plaintiff
Azeras,

LLC

(“Azeras”).

Elegalsupply.com,

1

LLC

On

January

(“Elegalsupply”)

28,

2008,

filed

a

We are grateful for the work on this case by Edem
Tsiagbey, a Loyola Law School extern with our chambers.

Defendant
trademark

application for the mark “eLegalsupply.com” but that application
was rejected by the Primary Register. It secured a registration on
the

Supplemental

Register

on

August

5,

2008,

meaning

the

Defendant’s mark is inherently a descriptive mark. 15 U.S.C. §1091.
On April 10, 2012, Defendant filed an administrative complaint
against Azeras under the Uniform Domain Name Dispute Resolution
Policy (“UDRP”) to secure the transfer of the Domain Name to
Defendant.

The

UDRP

proceeding

was

assigned

to

the

National

Arbitration Forum (“NAF”). Fabulous.com (“Fabulous”), the domain’s
registrar (“Registrar”) was notified and pursuant to their policy,
Fabulous placed the domain in a “locked” status pending the
decision by NAF. On May 22, 2012, NAF issued its decision requiring
the transfer of the Domain Name to Defendant. On May 29, 2012,
Fabulous implemented the NAF ruling transferring ownership of the
Domain Name to Defendant.
On June 6, 2012, Plaintiffs filed the Complaint in this action
in the U.S. District Court for the Eastern District of Louisiana to
overturn the UDRP panel’s decision awarding the Domain Name to
Elegalsupply. (Rec. Doc. No. 1). On July 23, 2012, Defendant filed
the Motion to Dismiss. (Rec. Doc. No. 12). Plaintiffs opposed the
Motion on July 31, 2012. (Rec. Doc. No. 15). Defendant filed a
Reply Memorandum on August 9, 2012. (Rec. Doc. No. 20).

LAW AND ANALYSIS

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A. Subject Matter Jurisdiction
Federal Rule of Civil Procedure 12(b)(1) authorizes a court to
dismiss

a

plaintiff's

complaint

for

lack

of

subject

matter

jurisdiction. Fed. R. Civ. P. 12(b)(1). “A case is properly
dismissed for lack of subject matter jurisdiction when the court
lacks the statutory or constitutional power to adjudicate the
case.” Home Builders Ass'n of Mississippi, Inc. v. City of Madison,
Miss., 143 F.3d 1006, 1010 (5th Cir. 1998). Lack of subject-matter
jurisdiction may be found in three instances: (1) the complaint;
(2) the complaint supplemented by undisputed facts supplied in the
record; or (3) the complaint supplemented by undisputed facts and
the court's resolution of disputed facts. Barrera–Montenegro v.
United States, 74 F.2d 657, 659 (5th Cir. 1996). A party seeking to
invoke jurisdiction has the burden of proving its existence, and
thus, a plaintiff “constantly bears the burden of proof that
jurisdiction does in fact exist.” Ramming v. United States, 281
F.3d 158, 161 (5th Cir. 2001). Furthermore, “there is a presumption
against subject matter jurisdiction that must be rebutted by the
party bringing an action to federal court.” Coury v. Prot, 85 F.3d
244, 248 (5th Cir. 1996).
Federal question jurisdiction exists with respect to “all
civil actions arising under the Constitution, laws, or treaties of
the United States.” 28 U.S.C. § 1331 (2006). A party attacking a
district court's jurisdiction based on subject matter may do so
3

facially or factually. Menchaca v. Chrysler Credit Corp., 613 F .2d
507, 511 (5th Cir. 1980) (cert. denied ). Defendants in the instant
case assert a facial attack, which merely requires the Court to
inquire whether Plaintiffs have sufficiently alleged a basis for
this Court to assert jurisdiction. See Patterson v. Weinberger, 644
F.2d 521, 523 (5th Cir. 1981). Furthermore, whether a cause of
action presents a federal question must be deduced from a wellpleaded complaint. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392
(1987). “[T]he plaintiff must ... prove, by a preponderance of the
evidence, that the court does have jurisdiction based on the
complaints and evidence.” Patterson, 644 F.2d at 523.
Federal question subject matter jurisdiction exists in this
case giving this Court original jurisdiction. Plaintiffs make
claims under trademark and cyber-squatting law under federal law
including: 28 U.S.C. § 1338(a), the Lanham Act, 15 U.S.C. § 1051,
et seq., and the ACPA, 15 U.S.C. § 1125(d) (Rec. Doc. No. 1).
Supplemental jurisdiction exists over the state law claims. 28
U.S.C. § 1367.
Moreover, as the United States Court of Appeals recognized,
decisions made by UDRP panels are non-binding. See Barcelona.com,
Inc. v Excelentisimo Ayuntamiento De Barcelona, 330 F3d 617, 626
(4th Cir 2003). “[A]ny decision made by a panel under the UDRP is
no more than an agreed-upon administration that is not given any
deference under the ACPA.” Id. To the contrary, because a UDRP

4

decision is susceptible to being grounded on principles foreign or
hostile to American law, the ACPA authorizes reversing a panel
decision if such a result is called for by application of the
Lanham Act. Id. Therefore, this Court has the subject matter
jurisdiction over the issues in this case.
B. Personal Jurisdiction
Federal Rule of Civil Procedure 12(b)(2) permits dismissal of
a suit for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). A
plaintiff

must

establish

the

court's

jurisdiction

over

the

defendant. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994). A
court must accept all factual allegations as true and resolve any
conflicts in favor of the plaintiff. Luv N' care, Ltd. v Insta-Mix,
Inc., 438 F3d 465, 469 (5th Cir. 2006).
Given that Louisiana's long-arm statute is co-extensive with
the limits of constitutional due process, this Court must decide
whether

this

Court's

exercise

of

personal

jurisdiction

over

Defendants would offend the Due Process Clause of the Fourteenth
Amendment. Seatrepid Louisiana, LLC v. Richard Phillips Marine,
Inc., 2009 U.S. Dist. LEXIS 46274, at *9 (E.D.La. May. 14, 2009).
Due process will not be offended if the nonresident defendant has
“certain

minimum

contacts

with

[the

forum]

such

that

the

maintenance of the suit does not offend traditional notions of fair
play

and

substantial

justice.”

International

Washington, 326 U.S. 310, 316 (1945).
5

Shoe

Co.

v.

There

are

two

types

of

personal

jurisdiction—general

or

specific—depending on the contacts that a defendant has with the
forum state. See, e.g., Luv N’ Care, 438 F.3d at 469. This Court
finds

personal

jurisdiction

in

this

case

under

specific

jurisdiction. The Fifth Circuit has established three standards to
apply when determining specific jurisdiction: (1) whether the
defendant has minimum contacts with the forum state; (2) whether
the cause of action arises out of or results from the defendant's
contacts in the forum state; and (3) whether the exercise of
personal jurisdiction is fair and reasonable. See, e.g., Seiferth,
472 F.3d at 271.
The United States Supreme Court has held that the minimum
contacts requirement can be satisfied by a single act in which the
defendant

“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.

Rudzeqicz, 471 U.S. 462, 475 (1985).
Here, Defendant avails itself to Louisiana’s “protections” by
shipping goods into the state and marketing to its residents. See
Burger King Corp., 471 U.S. at 475. It is therefore reasonable that
Defendant “anticipate being haled into court” for its activities in
Louisiana. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
(1980). Where a defendant knowingly benefits from the availability
of a particular state's market for its products, it is only fitting

6

that the defendant be amenable to suit in that state.” Luv N’ Care,
438 F.3d at 469. Defendants actions which ultimately led to the
loss of the Domain Name and claim for unfair business practices
arose from Defendants contacts with Daste a Louisiana resident.
(Rec. Doc. No. 15, at 9). “[J]urisdiction is proper ... where
contacts proximately result from actions by the defendant himself
that create a ‘substantial connection’ with the forum State.”
Burger King, 471 U.S. at 475 (citing McGee v. International Life
Insurance Co., 355 U.S. 220, 223 (1957)).
Having established that the requisite minimum contacts between
the defendants and this state exist, “the burden of proof shifts to
the defendant[s] to show that the assertion of jurisdiction is
unfair

and

unreasonable.”

Central

Freight

Lines

Inc.

v.

APA

Transport Corp., 322 F.3d 376, 384 (5th Cir. 2003). The Fifth
Circuit has recognized that it is rarely the case that jurisdiction
is unfair after minimum contacts have been established. Wein Air
Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999). In
making a determination of whether the exercise of jurisdiction is
fair and reasonable, courts consider: “the burden on the defendant
having to litigate in this forum; the forum state's interests in
the lawsuit; the plaintiff's interest in convenient and effective
relief; the judicial system's interest in efficient resolution of
controversies;

and

the

state's

fundamental social policies.” Id.

7

shared

interest

in

furthering

The Defendant’s national and Louisiana presence as well as its
activities targeted at the Plaintiff, make the Court’s exercise of
personal jurisdiction fair and reasonable. Despite the Defendant
being a New Jersey resident, by doing business in various states
such as Louisiana and expecting the benefits and protections of
various states, it is certainly foreseeable that litigation would
occur in those states.
Furthermore, Louisiana has a strong interest in providing a
forum for its residents. Daste is a resident of Louisiana and
claims that Defendant's predominate tortious actions took place in
Louisiana,

the

State

has

a

legitimate

interest

in

providing

Respondent a forum in which to litigate his claims. Therefore,
exercising personal jurisdiction over Movant in Louisiana would not
offend notions of fair play and substantial justice.
C. Service of Process
Rule 12(b)(4) permits a court to dismiss a complaint when the
defendant alleges insufficient process under Rule 4 of the Federal
Rules of Civil Procedure. Fed.R.Civ.P. 12(b)(4). Rule 4(b) mandates
that the “summons shall be signed by the clerk, be under the seal
of the court, contain the name of the court and the names of the
parties, [and] be directed to the defendant....” The purpose of
Rule 4(b) is to guarantee that a defendant is informed that an
action has been commenced against him. 2 Moore's Federal Practice,
§ 4.02(3).

8

In the instant case, the Plaintiffs concede that the summons
were defective. (Rec. Doc. No. 15, at 18). However, since the
complaint was filed on June 6, 2012, the Plaintiffs are afforded
120 days pursuant to FRCP 4(m), to perfect service.
D. Failure to state a claim
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits
a complaint to be dismissed for failure to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). When reviewing a
motion to dismiss, courts must accept all well-pleaded facts as
true and view them in the light most favorable to the non-moving
party. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). However,
“[f]actual allegations must be enough to raise a right to relief
above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (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)(quoting Twombly, 550 U.S. at 570). The
Supreme Court in Iqbal explained that Twombly promulgated a “twopronged

approach”

to

determine

whether

a

complaint

states

a

plausible claim for relief. Iqbal, 556 U.S. at 663. First, courts
must identify those pleadings that, “because they are no more than
conclusions, are not entitled to the assumption of truth.” Id.
Legal conclusions “must be supported by factual allegations.” Id.
at 664.
9

Upon identifying the well-pleaded factual allegations, courts
then

“assume

their

veracity

and

then

determine

whether

they

plausibly give rise to an entitlement to relief.” Id. at 679. “A
claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Id. at 678.
This is a “context-specific task that requires the reviewing court
to draw on its judicial experience and common sense.” Id. The
plaintiffs

must

“nudge[]

their

claims

across

the

line

from

conceivable to plausible.” Twombly, 550 U.S. at 570.
In
acquired

their
the

complaint
Domain

Plaintiffs

Name,

never

allege
sought

that
to

they

legally

interfere

with

Defendant’s business but were deprived of their possession of the
Domain Name after a NAF hearing. (Rec. Doc. No. 1). Among other
relief sought, Plaintiffs seek declaratory relief that they are the
rightful owners and no trademark infringement occurred. Plaintiffs
have therefore met the plausibility standard.
E. Failure to join a required party
Federal Rule of Civil Procedure 12(b)(7) authorizes a motion
to dismiss for failure to join a required party in accordance with
Rule 19. Fed.R.Civ.P. 12(b)(7). The movant bears the initial burden
of demonstrating that an absent person or entity is a required
party, but if an initial appraisal of the facts demonstrates the
absent person or entity is required, the burden is shifted to the
10

opponent of joinder. Hood v. Memphis, 570 F.3d 625, 628 (5th Cir.
2009)(quoting Pulitzer–Polster v. Pulitzer, 784 F.2d 1305, 1309
(5th Cir. 1986)). Rule 19 provides a two-step analysis for deciding
whether to dismiss an action for failure to join an absent party.
First, Rule 19(a) provides a framework for deciding whether a given
person should be joined. Second, if joinder is called for, Rule
19(b) guides the court in deciding whether the suit should be
dismissed if that person cannot be joined. Under Rule 19(a), a
party who is subject to service and whose joinder will not deprive
the court of jurisdiction shall be joined where certain criteria
are satisfied. See Fed.R.Civ.P. 19(a)(1)-(2).
The first type of required party under Rule 19(a)(1) is one
whose absence prevents the court from according complete relief
among the existing parties. Fed.R.Civ.P. 19(a)(1)(A).

The second

type of required party under Rule 19(a)(1) is one who “claims an
interest relating to the subject of the action and is so situated
that disposing of the action in the person's absence may (i) as a
practical matter impair, or impede the person's ability to protect
the

interest;

substantial

or

risk

(ii)
of

leave

incurring

an

existing

double,

party

multiple,

subject
or

to

a

otherwise

inconsistent obligations because of the interest.” Fed.R.Civ.P.
19(a)(1)(B).
As Plaintiffs correctly point out, joinder of the Registrar,
which is located in Australia, is unnecessary. (Rec. Doc. No. 15 at

11

19). The Registrar is not a required party as it has already
transferred the Domain Name to the Defendant. Id. The Registrar’s
absence from the suit does not prevent the court from according
complete relief among the existing parties.
Additionally, since the Registrar has transferred the Domain
Name to the Defendant, disposing of the action in its absence does
not impede Defendant’s ability to protect to protect an interest or
subject it to inconsistent obligations. Therefore, joinder of the
Registrar is not needed. Since the Court has concluded that the
Registrar does not constitute a required party under Rule 19(a), it
need not address Rule 19(b).
Accordingly, and for the reasons articulated above, IT IS
ORDERED that Defendant’s Motion to Dismiss (Rec. Doc. No. 12) be
DENIED.
New Orleans, Louisiana, this 19th day of November, 2012.

_______________________________
UNITED STATES DISTRICT JUDGE

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