Mor-Dall Enterprises, Inc. v. Dark Horse Distillery, LLC

Filing 71

OPINION ; signed by Judge Robert Holmes Bell (Judge Robert Holmes Bell, kcb)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

MOR-DALL ENTERPRISES, INC.,
Plaintiff,
File No. 1:13-cv-915
v.
HON. ROBERT HOLMES BELL
DARK HORSE DISTILLERY, LLC, and
KRISTINA HENNESSY,
Defendants.
/
OPINION
This is an action for trademark infringement and unfair competition brought by
Plaintiff Mor-Dall Enterprises, d/b/a Dark Horse Brewing, alleging one count of trademark
infringement and two counts of opposition to trademark registration under the Lanham Act,
15 U.S.C. § 1051, et seq., one count of common law unfair competition and trademark
infringement, and one count under the Michigan Consumer Protection Act, Mich. Comp.
Laws § 445.903, against defendants Dark Horse Distillery and Kristina Hennessy. Defendant
Kristina Hennessy moves to dismiss under Fed. R. Civ. P. 12(b)(2) for lack of personal
jurisdiction. (ECF No. 54.) Plaintiff has filed a response (ECF No. 58), to which Defendant
Hennessy has filed a reply (ECF No. 64.)

I.
Defendant Kristina Hennessy is a full-time animal immunologist in Kansas, as well
as the sole member of co-Defendant Dark Horse Distillery. (Def.’s Br. at 1, ECF No. 55.)
Hennessy approached the four Garcia siblings, this children of her longtime friend, in early
2010 with the idea to open a craft distillery. (Id. at 1–2.) In July 2010, Hennessy and the
Garcias decided to name the distillery Dark Horse, a name originating from Hennessy’s work
with horses and the Garcias’ and Hennessy’s humble background. (Id. at 2.)
At approximately the same time in July 2010, Hennessy conferred with legal counsel
in regards to a trademark for Dark Horse. (Hennessy Dep. at 13.) Hennessy knew from about
that time that Plaintiff Dark Horse Brewing Company was a brewing company, but she did
not see this as problematic because she understood that beer is different from liquor and
spirits. (Id.) In March 2012, Hennessy reviewed a marketing report prepared for Dark Horse
Distillery that suggested some overlap in consumers among the liquor and brewery industries.
(Pl.’s Br. at 4, ECF No. 58) In March 2013, Dark Horse Brewing Company filed a Notice of
Opposition in the Trademark Trial and Appeal Board (“TTAB”). (Id. at 3; Hennessy Dep.
at 16, 20.)
Since Dark Horse Distillery’s inception, Hennessy has had authority for expenditures
and significant decisions. (Hennessy Dep. at 22, 29, 56, 61, 40.) She does not manage day-today operations. (Def.’s Br. at 2.) She visits the distillery weekly to sign forms and speak with
employees. (Id.) The Garcia siblings run the day-to-day operations, including advertisements

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and distribution. (Id.) Hennessy has never negotiated or entered into contracts in Michigan,
nor traveled to Michigan to advertise Dark Horse, nor physically conducted any other
business activities in Michigan related to Dark Horse. (Id. at 3.)
II.
Plaintiff alleges two grounds for exercising personal jurisdiction over Hennessy. First,
Plaintiff alleges that Hennessy operates Dark Horse Distillery’s interactive website that
solicits Michigan residents to order and purchase its products. Second, Plaintiff alleges that
Hennessy has purposefully directed an injury toward Michigan by infringing Plaintiff’s
trademarks. (Pl.’s Br. at 7.) Defendant Hennessy argues that she has not purposefully availed
herself of the privilege of acting in or causing injury in Michigan, nor is it reasonable to
exercise jurisdiction over her based on convenience and efficiency. (Def.’s Br. at 6, 11.)
Where, as here, the Court decides a Rule 12(b)(2) motion to dismiss for lack of
personal jurisdiction without conducting an evidentiary hearing, the plaintiff bears the burden
of making a prima facie showing that the court has personal jurisdiction over the defendant.
Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002); see also Am.
Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988) (describing the burden on the
plaintiff in such a case as “relatively slight”). To meet this burden, the plaintiff must
establish “with reasonable particularity” sufficient contacts between the defendant and the
forum state to support jurisdiction. Neogen, 282 F.3d at 887; see also See, Inc. v. Imago
Eyewear Pty., Ltd., 167 F. App’x 518, 520–21 (6th Cir. 2006) (“[I]n the face of a properly

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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.”). In
evaluating the plaintiff’s response to the motion to dismiss, the Court construes the facts in
the light most favorable to the plaintiff and disregards contradictory evidence proffered by
the defendant. Neogen, 282 F.3d at 887.
A defendant may be subject to general jurisdiction and/or limited jurisdiction.
“Limited jurisdiction extends only to claims arising from the defendant’s activities that were
either within Michigan or had an in-state effect,” whereas “[g]eneral jurisdiction . . . enables
a court in Michigan to exercise jurisdiction over a [defendant] regardless of whether the
claim at issue is related to its activities in the state or has an in-state effect.” Neogen Corp.,
282 F.3d at 888 (citing Third Nat’l Bank in Nashville v. WEDGE Group, Inc., 882 F.2d 1087,
1089 (6th Cir.1989)). In Michigan, the exercise of limited jurisdiction requires a two-step
process: “(1) first, the court must determine whether any of Michigan’s relevant long-arm
statutes authorize the exercise of jurisdiction over Defendants; and, if so, (2) the court must
determine whether exercise of that jurisdiction comports with constitutional due process.”
Air Prods. & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 550 (6th Cir. 2007). The
reach of Michigan’s long-arm statute has been construed as co-extensive with the limits of
constitutional due process. Mich. Coalition of Radioactive Material Users, Inc. v.
Griepentrog, 954 F.2d 1174, 1176 (6th Cir.1992); Green v. Wilson, 565 N.W.2d 813, 816–17
(1997).

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Due process concerns are governed by the standard articulated in International Shoe
and expounded by its progeny: ensuring a defendant has “certain minimum contacts with [the
forum state] such that maintenance of the suit does not offend ‘traditional notions of fair play
and substantial justice.’” Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (quoting Milliken
v. Meyer, 311 U.S. 457, 463 (1940)).
In addition to the “minimum contacts” analysis required by International Shoe, the
question of due process in the context of establishing specific personal jurisdiction turns on
whether “the defendant’s conduct and connection with the forum State are such that [the
defendant] should reasonably anticipate being haled into court there.” World–Wide
Volkswagen v. Woodson, 444 U.S. 286, 297 (1980). The Sixth Circuit has formulated a threeprong test to evaluate whether exercising specific personal jurisdiction satisfies due process:
First, the defendant must purposefully avail himself of the privilege of acting
in the forum state or causing a consequence in the forum state. Second, the
cause of action must arise from the defendant’s activities there. Finally, the
acts of the defendant or consequences caused by the defendant must have a
substantial enough connection with the forum state to make the exercise of
jurisdiction over the defendant reasonable.
S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968).
Jurisdiction over a corporate officer is appropriate where she was “actively and
personally involved in the conduct giving rise to the claim.” Balance Dynamics Corp. v.
Schmitt Indus., Inc., 204 F.3d 683, 698 (6th Cir. 2000). Jurisdiction over the officer is not
predicated upon jurisdiction over the corporation, but rather on whether the officer herself
“purposefully availed herself of the forum and the reasonably foreseeable consequences of
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that availment.” Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985); Int’l
Shoe, 326 U.S. at 316 (1945)).
A. Purposeful Availment
Plaintiff presents two theories of purposeful availment. First, Plaintiff argues that
Defendant authorizes the interactive components of the Distillery’s website, directed at
Michigan residents. (Pl.’s Br. at 9.) Second, Plaintiff argues that the injury felt by
Defendant’s trademark infringement is felt in Michigan. (Id. at 11.)
This Court has already ruled that Defendant Dark Horse Distillery purposefully
availed itself of the privilege of acting in Michigan through its operation of its website in
conjunction with its distributor’s website. (ECF No. 15.) Jurisdiction over the Distillery on
the basis of the website cannot be extended to Hennessy unless she was actively or personally
involved in the website. See Balance Dynamics, 204 F.3d at 698. According to Hennessy,
two of the Garcia siblings wanted to place a link on the Distillery’s website to their
distributor Drink Up New York. (Hennessy Dep. at 40.) The siblings consulted with
Hennessy, who approved the decision. (Id.) Her understanding was that if someone navigated
to Dark Horse Distillery’s website to purchase products, they would be redirected to the
distributor Drink Up New York’s website to see if the product was available for sale in their
area. (Id.) Hennessy has never personally spoken to the distributor. (Id. at 41.) Prior to her
deposition, she did not know that a Michigan resident ever purchased the Distillery’s
products over its website. (id.)

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The availability of distribution of Dark Horse Distillery products in Michigan and the
surrounding region is precisely the heart of this claim. Hennessy approved the initial
relationship with the Drink Up New York distributor, and she has described her intent for the
Distillery to distribute nationally. (Id.) She cannot now claim that she did not foresee the
consequences of interactively selling and distributing her products in a broad region.
Considering all the evidence in the light most favorable to Plaintiff, the Court finds that
Plaintiff has established a prima facie case that Hennessy was actively and personally
involved in the website and distribution of her company’s product, and thus purposefully
availed herself of the privilege of this forum.
Plaintiff argues that in addition to Defendant’s website, Defendant Hennessy has
also purposefully availed herself of the privilege of acting in Michigan under the Calder
effects test. This Court agrees. The Calder effects test allows a plaintiff to “enhance” the
contacts a defendant has with a forum by demonstrating that the defendant intentionally
directed its tortious conduct toward plaintiffs in the forum. Carrier Corp. v. Outokumpu
Oyj, 673 F.3d 430, 451 (6th Cir. 2012); Air Prods. & Controls, Inc., 503 F.3d at 552–53;
Calder v. Jones, 465 U.S. 783, 788–89 (1984). Contacts with the forum, in the context of
purposeful availment, are “enhanced” when (1) the defendants acted intentionally, (2) the
defendants’ action was expressly aimed at the State of Michigan, and (3) the brunt of the
injuries were felt in Michigan. Thomas v. Barrett, No. 1:12-CV-74, 2012 WL 2952188, at

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*2 (W.D. Mich. July 19, 2012) (Bell, J.) (citing Audi AG & Volkswagon of Am., Inc. v.
D’Amato, 341 F. Supp. 2d 734, 746 (E.D. Mich 2004)).
Here, Plaintiff’s claims are for trademark infringement and unfair competition.
(Amd. Compl. at 8–13, ECF No. 46.) As the Sixth Circuit has long recognized,
“violations of federal trademark law are analogous to tort cases.” Bird v. Parsons, 289
F.3d 865, 876 (6th Cir. 2002) (citing Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316,
1321 (9th Cir.1998); Indianapolis Colts, Inc. v. Metro. Balt. Football Club, Ltd. P’ship,
34 F.3d 410, 411–12 (7th Cir.1994); Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946
F.2d 1384, 1388 (8th Cir.1991)). Further, “because a plaintiff whose trademark has been
violated potentially suffers economic harm as a result of the defendant’s actions, the
injury occurs both in places where the plaintiff does business and in the state where its
primary office is located.” Bird, 289 F.3d at 876 (citing Panavision, 141 F.3d at 1322;
Zippo, 952 F. Supp. at 1127).
(i) Intentional Acts
Plaintiff has presented evidence that Hennessy acted intentionally. Hennessy does
not dispute that she and the Garcias chose the brand name for her Distillery, and she
conferred with legal counsel on its use. She personally knew in 2010, unlike the Garcias,
that Plaintiff used a similar mark for its brewery. Moreover, she commissioned and
reviewed the 2012 marketing report. By 2013, she also learned of Plaintiff’s objection to
the Distillery’s use of the mark and its opposition to the mark’s registration in the United

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States Patent and Trademark Office. Despite this opposition, Hennessy personally
coordinated a six-figure advertising campaign at Kauffman Stadium in Kansas City.
Hennessy suggests that she did not choose the Dark Horse brand alone, and that it
was not her idea to market her company on The Knot or Drink Up New York. However,
Plaintiff need not show that Hennessy was solely responsible for the Distillery’s allegedly
infringing acts; Plaintiff need only make a prima facie showing that Hennessy was
actively and personally involved in the acts. The facts of Lown Companies, LLC v. Piggy
Paint, LLC, No. 1:11-cv-911, 2012 WL 3277188 (W.D. Mich. Aug. 9, 2012) (Bell, J.) are
distinguishable because the plaintiffs in that case alleged that the individual defendants
exercised direction, control, and overall participation, but failed to offer any
particularized showing of how their conduct related to the infringement. This Court ruled
that the plaintiff did not satisfy the active and personal involvement requirement. Id. at
*3. By contrast, here Plaintiffs have alleged specific tortious conduct that goes to the
heart of this infringement case: Hennessy personally chose the Dark Horse brand and
established it through extensive advertising that she authorized and coordinated
personally. The Court is convinced that using a trade name that one knows to be protected
by federal trademark law, that one knows to be in use by another entity in a similar
industry, that one has market research to demonstrate a potential conflict, and that one
nonetheless pursues can be nothing other than intentional. Plaintiff has made a prima
facie showing of Hennessy’s intentionality for the purposes of this jurisdictional analysis.

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(ii) Expressly aimed at Michigan
As discussed above, Hennessy was on notice by 2010 that Plaintiff is located in
Michigan, and that if she used a mark that infringes Plaintiff’s registered trademark, then
the effect of her conduct would be felt in Michigan. Moreover, Hennessy has expressly
indicated her intent to distribute her Distillery’s products in at least the forty-eight
contiguous states, including Michigan. (Hennessy Dep. at 42-43.) She has taken
affirmative acts to establish and expand distribution of her company’s products into
regions in which Plaintiff’s products are allegedly available. (Id.) Defendant responds that
Plaintiff has not demonstrated any evidence that she was aiming her conduct at Plaintiff
by trading off the goodwill of his brewery, rather than other entities using “dark” and
“horse”. (Def.’s Br. at 9.) Defendant is putting the cart before her horse. Whether Plaintiff
has made a sufficient evidentiary showing about trading off good will is a substantive
issue of liability. At this point, Plaintiff need only make a prima facie showing of facts
that Defendant Hennessy expressly aimed her conduct toward Michigan. The Court
concludes that this prong is satisfied on the basis of Hennessy’s involvement in the
Distillery’s product distribution and her intent to increase distribution into Michigan.
(iii) Brunt of Injuries felt in Michigan
A plaintiff whose trademark rights have been violated feels the injury in the state
in which its offices are located. Bird, 289 F.3d at 876. Because Plaintiff is located in
Michigan, the effects of Defendant’s allegedly tortious conduct is felt in Michigan.

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Because Plaintiff has met all three prongs of the Calder effects test, the Court concludes
that Defendant purposely availed herself of the privilege of acting in Michigan.
B. Activity in Forum
The second Southern Machine factor is whether the cause of action arises from the
defendant’s activities in the forum state. Southern Mach. Co., 401 F.2d at 381. “Physical
presence is not the touchstone of personal jurisdiction,” and personal jurisdiction may
exist even though Hennessy has not traveled to Michigan for business related to Dark
Horse Distillery. See Neal v. Janssen, 270 F.3d 328, 333 (6th Cir. 2001). As discussed
above, trademark infringement is essentially a tort, the effect of which is felt in the state
where Plaintiff is located. Therefore, to the extent that Defendant has allegedly violated
Plaintiff’s federal trademarks, the cause of action arises in Michigan, where Plaintiff is
located.
C. Reasonable Exercise
The final Southern Machine factor is whether, based on the quality and quantity of
contacts, exercise of personal jurisdiction over the defendant is reasonable. Southern
Mach. Co., 401 F.2d at 381. “An inference arises that the third factor is satisfied if the
first two requirements are met.” Bird, 289 F.3d at 875 (citing CompuServe Inc. v.
Patterson, 89 F.3d 1257, 1268 (6th Cir. 1996)). A defendant seeking to establish a lack of
fairness bears a heavy burden. Steelcase, Inc. v. Mar-Mol, Inc., 210 F. Supp. 2d 920, 935
(W.D. Mich. 2002) (Quist, J.) (citing Grand Entm’t Group, Ltd. v. Star Media Sales, Inc.,

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988 F.2d 476, 483 (3d Cir.1993)). The defendant must present a “compelling case” that
other considerations would render personal jurisdiction unreasonable. Id. (quoting Burger
King, 471 U.S. at 477). Here, Defendant Hennessy argues that the present suit is
burdensome for her because she has a busy, full-time job and her participation in the suit
does not affect the availability of relief against Defendant Dark Horse Distillery. (Def.’s
Br. at 10–11.) The Court does not find that her case is sufficiently compelling to
overcome the presumption of reasonableness. Therefore, because Plaintiff has established
a prima facie case under the three-factor Southern Machine test, the Court holds that
exercise of personal jurisdiction over Defendant comports with Due Process.

IV.
For the foregoing reasons, the Court concludes that exercise of personal jurisdiction
over Defendant comports with both the Due Process clause and with Michigan’s long-arm
statute. Defendant’s motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(2) will therefore be
denied.
The Court will issue an Order consistent with this Opinion.

Dated: February 3, 2015

/s/ Robert Holmes Bell
ROBERT HOLMES BELL
UNITED STATES DISTRICT JUDGE

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