etrailer Corporation v. Automatic Equipment MFG. Co
Filing
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OPINION MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Defendants motion to dismiss for lack of personal jurisdiction, [Doc. No. 8] is GRANTED.IT IS FURTHER ORDERED that Plaintiffs complaint against Defendant is dismissed for lack of personal jurisdiction. 8 Signed by District Judge Henry Edward Autrey on 3/29/18. (CLA)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ETRAILER CORPORATION,
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Plaintiff,
v.
AUTOMATIC EQUIPMENT MFG, CO.
d/b/a BLUE OX
Defendant.
Case No. 4:17CV1309 HEA
OPINION, MEMORANDUM AND ORDER
Introduction
This matter is before the Court on Defendant’s Motion to Dismiss, [Doc. No.
8]. Plaintiffs oppose the Motion. Defendants have filed a Reply to the Opposition.
For the reasons set forth below, the Motion is granted.
Facts and Background
Plaintiff’s Complaint alleges the following:
Plaintiff is an online vendor of motor vehicle accessories such as trailer
hitches, trailer parts, roof racks, bicycle racks, cargo carriers, and towing
accessories manufactured by Blue Ox, among others.
etrailer is the sole legal owner of a multitude of works ("Works") in the form
of photographs and videos which it displays on its website for customers using its
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website to view. The Works of the etrailer Portfolio are original, creative works in
which etrailer owns protectable copyright interests. etrailer invested significant
time and money building the etrailer Portfolio. In creating the Works, etrailer took
steps to ensure that its name, logos and marks (collectively "etrailer Marks") were
prominently featured in the Works.
etrailer has obtained multiple active and valid copyright registrations with
the United States Copyright Office, which registrations cover many of the Works
of the etrailer Portfolio and many other photographic and videographic Works are
the subject of pending copyright applications. etrailer federally secured its rights
to the Works in the etrailer Portfolio with Copyright Registrations in the United
States Copyright Office. etrailer has been at all times relevant hereto and is the sole
owner of all rights, title and interest in and to the Copyright Registrations.
etrailer has displayed its copyrighted Works on its website
http://www.etrailer.com to enable sales of its products depicted in those Works.
Blue Ox is the registered owner of the Website www.BlueOx.com (the
Website”) and is responsible for its content. Blue Ox uses the Website to sell the
same or similar merchandise as etrailer and Blue Ox profits from this sales activity.
Without license, permission or authorization from etrailer, Blue Ox infringed
etrailer's copyrights by copying, modifying, displaying on its Website and in
catalogs and disseminating to etrailer's competitors many of etrailer's Works (the
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"Infringements"). As noted, Blue Ox has infringed many of etrailer photographs
and etrailer is correlating each infringed photograph to a registration number.
Blue Ox was aware of circumstances or facts from which the fact of
infringement of etrailer's copyrights was apparent. To wit, etrailer believes that the
number of unauthorized copies is at least in the hundreds. In addition, various
photographs that were illegally misappropriated by Blue Ox depict an etrailer
marking or logo on products or individuals shown in the particular Work. As part
of its scheme to utilize etrailer's protected Works and defraud customers, Blue Ox
removed or obscured etrailer's marks or indicia that appeared in certain of those
photographs and videos.
Plaintiff claims that Defendant engaged in willful direct copyright
infringement in violation of the federal Copyright Act, 17 U.S.C. § 501, by
copying and displaying thousands of Plaintiff’s photos on Defendant’s website and
on eBay, to sell the products depicted in the photos (Count I); removed etrailer
Marks from some of the products depicted in the photos, which is likely to cause
confusion, mistake, and deception as to the affiliation, connection, or association of
the products with etrailer in violation of § 43(a) of the Lanham Act, 15 U.S.C. §
1125(a) (Count II); and have engaged in unfair competition/false designation of
origin in violation of state and common law (Count III).
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For relief, Plaintiff seeks a finding that Defendant has infringed Plaintiff’s
rights to the photos; an order directing Defendant to provide proof of destruction of
unlawful copies of the photos or to allow Plaintiff to effect the same; an award of
monetary damages (statutory damages of $150,000 per infringement or actual
damages and disgorgement of profits to be proven at trial, attorney’s fees, and
costs); and permanent injunctive relief; entry of a judgment that Blue Ox has
competed unfairly with etrailer in violation of etrailer’s rights under 15 U.S.C. §
1125(a) and the common law of Missouri; entry of a judgment that Blue Ox’s
activities have violated Missouri law; entry of an order directing Blue Ox to
compensate etrailer for any and all advertising or other expenses necessary to
dispel the public confusion caused by Blue Ox’s unlawful acts; entry of a judgment
against Blue Ox for monetary damages in an amount to be proven at trial,
including but not limited to, all amounts necessary to compensate etrailer for Blue
Ox’s wrongful use of the etrailer Marks, for Blue Ox's profits and for reasonable
attorneys’ fees and costs; entry of a judgment against Blue Ox for legal fees upon a
finding that this case is exceptional under 15 U.S.C. § 1117, and for increased
damages upon a finding of willfulness in Blue Ox’s unlawful acts alleged herein
with respect to the etrailer Marks, said award to equal at least treble etrailer’s
actual damages under 15 U.S.C. § 1117.
Discussion
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Defendant initially moves to dismiss for lack of personal jurisdiction.
Alternatively, Defendant argues that Plaintiff’s complaint fails to state a claim.
Personal Jurisdiction
To survive a motion to dismiss for lack of personal jurisdiction, the plaintiff
bears the burden of making a prima facie showing that personal jurisdiction exists.
Fastpath, Inc. v. Arbela Tech. Corp., 760 F.3d 816, 820 (8th Cir. 2014). A
plaintiff's prima facie showing “must be tested, not by pleadings alone, but by
affidavits and exhibits supporting or opposing the motion.” K–V Pharm. Co. v. J.
Uriach & CIA, S.A., 648 F.3d 588, 592 (8th Cir. 2011) (internal quotation marks
and citation omitted). Although a court must view evidence in a light most
favorable to the plaintiff and resolve factual conflicts in the plaintiff's favor, the
party seeking to establish the court's personal jurisdiction carries the burden of
proof and that burden does not shift to the party challenging jurisdiction.
Viasystems, Inc. v. EBM–Papst St. Georgen GmbH & Co., 646 F.3d 589, 592 (8th.
Cir. 2011); Epps v. Stewart, 327 F.3d 642, 647 (8th. Cir. 2003).
Defendant argues that this Court lacks personal jurisdiction over it because it
does not have sufficient minimum contacts with the State of Missouri to be
subjected to court here.
Personal jurisdiction over a defendant represents the power of a court to
enter “a valid judgment imposing a personal obligation or duty in favor of the
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plaintiff.” Viasystems, 646 F.3d at 592 (quoting Kulko v. Superior Court of Cal.,
436 U.S. 84, 91 (1978)). “Personal jurisdiction can be specific or general.” Id. at
593. “Specific jurisdiction refers to jurisdiction over causes of action arising from
or related to a defendant's actions within the forum state....” Dairy Farmers of Am.,
Inc. v. Bassett & Walker Intern., Inc., 702 F.3d 472, 474–75 (8th Cir. 2012)
(quoting Miller v. Nippon Carbon Co., Ltd., 528 F.3d 1087, 1091 (8th Cir. 2008)).
Due process requires “‘minimum contacts between a defendant and the
forum state’ so that ‘jurisdiction over a defendant with such contacts may not
offend traditional notions of fair play and substantial justice.’” Id. (quoting
Downing v. Goldman Phipps, PLLC, 764 F.3d 906, 912 (8th Cir. 2014) (internal
quotation omitted)). “The fundamental inquiry is whether the defendant has
‘purposefully availed’ itself of the ‘benefits and protections’ of the forum state,
Burger King Corp. v. Rudzewicz, 471 U. S. 462, 482 (1985), to such a degree that
it ‘should reasonably anticipate being haled into court there.’” Viasystems, 646
F.3d at 594 (quoting World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
297 (1980)).
To determine the sufficiency of a nonresident’s contact with the forum state,
the court considers: “(1) the nature and quality of the contacts with the forum state;
(2) the quantity of the contacts; (3) the relationship of the cause of action to the
contacts; (4) the interest of [the forum state] in providing a forum for its residents;
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and (5) the convenience or inconvenience to the parties.” Dairy Farmers, 702 F.3d
at 477 (quoting K–V Pharm., 648 F.3d at 592.
In addition to the five factors, the Court must consider whether Defendant's
alleged intentional acts were performed “for the very purpose of having their
consequences felt in the forum state.” Dakota Indus. Inc., v. Dakota Soportswear,
Inc., 946 F.2d 1384, 1390–91 (8th Cir. 1991). This is known as the “effects test,”
which was first employed by the Supreme Court in Calder v. Jones, 465 U.S. 783
(1984). The Calder effects test requires Plaintiff to make three prima facie
showings in order for Defendant's alleged copyright infringement and Lanham Act
violation to serve as a source of personal jurisdiction. Plaintiff must show that
Defendant's acts (1) were intentional, (2) were uniquely or expressly aimed at
Missouri, and (3) caused harm, the brunt of which was suffered—and which
Defendant knew was likely to be suffered—in Missouri. Johnson v. Arden, 614
F.3d 785, 796 (8th Cir. 2010) (internal quotation omitted). Rather than superseding
the Land–O–Nod five-part test for personal jurisdiction, the Calder effects test
merely “requires the consideration of additional factors when an intentional tort is
alleged.” Dakota Indus., 946 F.2d at 1391; see also Johnson, 614 F.3d at 796–97.
Nature and Quality of the Contacts with Missouri
Defendant’s principal place of business is in Pender, Nebraska. It never
maintained a regular or established place of business in Missouri, nor is it
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registered to do business in Missouri. It does not maintain an agent for service of
process in Missouri. Blue Ox does not manufacture any of its products in Missouri.
It has no employees in Missouri. “Telephone calls, written communications, and
even wire-transfers to and from a forum state do not create sufficient contacts to
comport with due process[.]” Eagle Tech., 783 F.3d at 1137. This factor favors
Defendant.
Quantity of Sales
The Complaint alleges that Defendant sold a substantial amount of product
to other customers in Missouri. . Defendant’s sales to Missouri were
approximately 5.2% of total domestic sales in 2015 and 5.7% of total domestic
sales in 2016. Sales through etrailer were approximately 4.9% of Defendant’s total
sales in 2015 and approximately 5.2% of its total sales in 2016. The quantity of
sales in Missouri is minimal in relation to its total sales. This factor favors
Defendant.
Relationship between the Contacts and the Cause of Action
The third factor focuses on Defendants' contacts with Missouri as it relates
to the particular cause or causes of action asserted. Bell Paper Box, Inc. v. U.S.
Kids, Inc., 22 F.3d 816, 819 (8th Cir.1994). “The third factor distinguishes between
specific and general [personal] jurisdiction.” Myers, 689 F.3d at 911. This is so,
because “[s]pecific personal jurisdiction, unlike general jurisdiction, requires a
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relationship between the forum, the cause of action, and the defendant.” Id. at 912.
The Calder effects test may be utilized in analyzing the third factor.
Following Calder, cases decided throughout this Circuit uniformly have held
that in order for a defendant's tortious conduct to confer personal jurisdiction, there
must be a prima facie showing that the defendant's intentional acts were
“performed for the very purpose of having their consequences felt in the forum
state.” Dakota Indus., 946 F.2d at 1391 (internal citation omitted). See, e.g.,
Johnson, 614 F.3d at 796 (no personal jurisdiction where defendant's allegedly
defamatory comments were not expressly aimed at forum, and no other evidence of
minimum contacts existed); Gen. Elec. Capital Corp. v. Grossman, 991 F.2d 1376,
1387 (8th Cir.1993) (no personal jurisdiction where “focal point” of tortious injury
occurred in outside forum, even though the court agreed that effects of harm
ultimately were felt in forum); Hicklin Eng'g, Inc. v. Aidco, Inc., 959 F.2d 738, 739
(8th Cir.1992) (no personal jurisdiction where defendant had knowledge that
plaintiff would be affected by intentional tort, but otherwise had no other
connection with forum); N.C.C. Motorsports, 975 F.Supp.2d 993 (no personal
jurisdiction where non-resident defendant entered into a lease with Missouri
plaintiff to use plaintiff's copyrighted shopping cart vehicle for promotional
purposes, knowingly hired third party to build an infringing shopping cart, and
then terminated lease when shopping cart was ready); Express Scripts, Inc. v. Care
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Continuum Alliance, Inc., 2011 U.S. Dist. LEXIS 61157, 2011 WL 2199967, *4
(E.D.Mo. June 7, 2011) (no personal jurisdiction where defendant did not
knowingly target trademark infringement at forum, and defendant had no other
contacts with forum).
Even a close examination of Calder reveals that the Supreme Court's finding
of personal jurisdiction in that case depended on something more than the
defendants' knowledge that the plaintiff would feel the brunt of the injury in her
state of residence. 465 U .S. at 784–87. Other contacts between the defendants and
the forum state were found in Calder, including the fact that the defendants made
frequent trips to the forum for business, made direct phone calls to residents of the
forum in furtherance of the tort, and published the defamatory article about the
plaintiff in the forum, a state where the defendants' publication had its highest
circulation. Id. All of these facts combined evidenced the Calder defendants'
purposeful availment of the forum and justified the court's exertion of personal
jurisdiction over them.
Johnson is particularly instructive to the facts of this case. Plaintiffs invoke
the argument that the effect of Defendants' alleged copyright infringement was felt
in Missouri by virtue of the fact that two of the Plaintiffs are the holder of the
copyright and Missouri citizens. However, the Johnson court applied Calder to
such an argument and rejected it. 614 F.3d at 797–98. The court explained that
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“even if the effect of [the alleged tort] was felt in Missouri, [the Eighth Circuit]
use[s] the Calder test merely as an additional factor to consider when evaluating a
defendant's relevant contacts with the forum state.” Id. at 796–97. Following this
logic, the Johnson court “construed the Calder effects test narrowly, and h[e]ld
that, absent additional contacts, mere effects in the forum state are insufficient to
confer personal jurisdiction.” Id. at 797.
Here, Plaintiff alleges in its complaint that Defendant targeted Plaintiff, not
that it targeted Missouri. Defendant’s argument that the complaint does not
indicate that Defendant engaged in specific marketing or promotional activities
specific to Missouri after targeting Plaintiff is well taken. Indeed, the complaint
focuses on Defendants actions vis a vis Plaintiff alone, not Missouri.
Based on the application of the Calder effects test, the third Land—O—Nod
factor weighs in favor of Defendants.
Interest of the Forum
While Missouri does indeed have an interest in providing a forum for its
resident copyright and trademark holders, this fact cannot outweigh the due
process considerations necessary to hale an out of state defendant into this Court.
See N.C.C. Motorsports v K-VA-T Food Stores, Inc., 975 F.Supp.2d 993, 1005
(E.D. Mo 2013).
Convenience of the Parties
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While Missouri would be more convenient for Plaintiff, trial in this
jurisdiction would be equally inconvenient for Defendant. This factor is therefore
neutral.
Conclusion
Plaintiff has not carried its burden of establishing a prima facie case that
federal courts in Missouri may properly assert personal jurisdiction over Defendant
As a result, the exercise of personal jurisdiction over it is not consistent with the
requirements of the Due Process Clause.
Accordingly,
IT IS HEREBY ORDERED that Defendant’s motion to dismiss for lack of
personal jurisdiction, [Doc. No. 8] is GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s complaint against Defendant
is dismissed for lack of personal jurisdiction.
Dated this 29th day of March, 2018.
________________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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