FORMULA ONE LICENSING BV et al v. F1 NEW JERSEY, LLC et al
Filing
50
OPINION filed. Signed by Chief Judge Jerome B. Simandle on 12/22/2015. (drw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
FORMULA ONE LICENSING BV and
FORMULA ONE WORLD CHAMPIONSHIP
LIMITED
Plaintiffs,
HONORABLE JEROME B. SIMANDLE
Civil Action
No. 14-5812 (JBS/AMD)
v.
F1 NEW JERSEY, LLC, et al.,
OPINION
Defendants.
APPEARANCES:
Federick Lee Whitmer, Esq.
KILPATRICK TOWNSEND & STOCKTON LLP
1114 Avenue of the Americas, 21st Floor
New York, NY 10036
Attorney for Plaintiffs
Trent S. Dickey, Esq.
SILLS CUMMIS & GROSS PC
The Legal Center
One Riverfront Plaza
Newark, NJ 07102
Attorney for Defendants
SIMANDLE, Chief Judge:
I.
INTRODUCTION
This is a trademark infringement action filed by Formula
One Licensing BV and Formula One World Championship Limited
(collectively, “Formula One”) against various related corporate
and partnership entities along with their owner, Richard J.
Valentine. Broadly, Formula One alleges that Defendants conduct
kart racing and other businesses under various “F1” names (F1
New Jersey, F1 Boston, F1 Outdoors, F1 Long Island, and F1
Hospitality and related domain names), and in so doing, have
infringed upon Plaintiffs’ rights to the “F1” and “FORMULA 1”
word and design marks which are key components of the F1 brand.
The issue presently before the Court, however, is a narrow
one. In response to Defendants’ challenge to this Court’s
personal jurisdiction, Plaintiffs have moved for discovery to
determine the nature and scope of the contacts that the moving
Defendants – specifically, Kart Management Group, LLP, Karting
America LLC, RJV Enterprises LLC, New England Kart Raceway,
Inc., and Richard J. Valentine – have with New Jersey.
Defendants argue that Plaintiffs have not alleged with
reasonable particularity the possible existence of minimum
contacts with New Jersey and have not met their burden for
jurisdictional discovery. For the reasons that follow, the Court
will grant in part and deny in part Plaintiffs’ motion.
Discovery will be permitted to determine whether the Court has
specific jurisdiction over Karting America LLC, RJV Enterprises
LLC, and New England Kart Raceway, Inc., and will also be
permitted to determine the names of John Doe Companies I-III.
Jurisdictional discovery will be denied with respect to Kart
Management Group, LLP and Richard J. Valentine.
2
II.
BACKGROUND
A. Factual and Procedural Background1
The Formula One Plaintiffs own and license the “F1” and
“FORMULA 1” word marks and the “F1” design mark depicted below
(“the F1 Marks”), which are used in connection with the annual
FIA Formula One World Championship (“F1 Championship”) motor
sport race:
2
(Am. Compl. [Docket Item 18] ¶¶ 1, 9-10.) Plaintiffs allege that
Richard J. Valentine, along with a number of interrelated
business entities allegedly owned and managed by Valentine, have
wrongfully exploited these marks for their own commercial
purpose by conducting and advertising kart racing and other
businesses under “F1 ____” names such as F1 Boston, F1 Outdoors,
F1 Hospitality, and F1 Karting New Jersey, with the following
1
The facts are taken from Plaintiff’s Amended Complaint [Docket
Item 18]. Because the Court is called on to determine solely
whether jurisdictional discovery should be granted, the Court
omits a detailed summary of the various infringement allegations
in Plaintiffs’ Complaint and will focus on the facts pertinent
to deciding the jurisdictional questions before it.
2 Images used throughout this opinion are from Plaintiffs’ motion
for jurisdictional discovery. [Docket Item 32].
3
design marks which Plaintiffs contend are confusingly similar to
Formula One’s:
Plaintiffs bring this action under the Lanham Trademark
Act, 15 U.S.C. § 1114(1), complaining that Valentine and his
companies have co-opted the F1 Marks to brand motorsport
facilities in New Jersey, Massachusetts, and New York, and
merchandise sold at those facilities; along with race cars,
aircraft, airplane hangars, other vehicles and uniforms, and
services ranging from hospitality services to private aircraft
chartering. (Id. ¶ 11-12.) In addition to trademark infringement
(Count One), Plaintiffs assert claims for unfair competition,
dilution of trademark, and cybersquatting under 15 U.S.C. §
1125(A), (C), and (D) (Counts Two, Three, and Four), as well as
state law claims for infringement, unfair competition, and
deceptive trade practices (Counts Six, Seven, and Eight).3
A number of parties entered into settlement agreements,4
leaving only Valentine, Kart Management Group, LLP (“Kart
Management”), Karting America LLC (“Karting America”), RJV
3
Count Five does not appear in Plaintiffs’ Amended Complaint.
These defendants include NJ Motorsports, LLC; F1 Air Group,
LLC; F1 Air LLC; F1 Air Group Two; F1 Air Logistics, LLC; F1
Long Island, LLC; F1 Long Island Real Estate, LLC; and Moto 1
Long Island, LLC. (Pearson Decl. in Supp. of Mot. for Jurisd.
Disc. ¶ 36.)
4
4
Enterprises LLC (“RJV”), New England Kart Raceway, Inc. (“NE
Kart Raceway”), and unnamed John Doe Companies I, II, and III as
Defendants in the case.
Defendants moved to dismiss for lack of personal
jurisdiction, or in the alternative, to transfer venue to the
District of Massachusetts, because Valentine is a resident of
Massachusetts and the Defendant entities have their principle
places of business in that state.5 Plaintiffs sought an extension
of time to respond together with a motion for jurisdictional
discovery. Briefing on Defendants’ motion to dismiss is
currently stayed pending a decision on Plaintiffs’ motion, which
is fully briefed.6
5
Defendants initially moved to dismiss or to transfer venue
[Docket Item 11] in response to Plaintiffs’ original Complaint.
After Plaintiffs filed an Amended Complaint, Defendants moved to
dismiss a second time. [Docket Item 22.] Because Defendants’
second motion to dismiss is directed towards Plaintiffs’ Amended
Complaint, it supersedes their first motion to dismiss. The
Court will therefore deny Defendants’ first motion to dismiss as
moot in the accompanying Order. However, because both Plaintiffs
and Defendants have relied upon Valentine’s Certification filed
with Defendant’s first motion to dismiss, the Court will
consider those citations.
6 The parties stipulated that Plaintiffs’ motion should be
decided first and briefing on the motion to dismiss should be
stayed pending a decision on whether Plaintiffs are entitled to
jurisdictional discovery. [Docket Item 36.] The Court
subsequently entered an order staying Defendants’ motion to
dismiss [Docket Item 37].
5
B. Plaintiff’s Motion for Jurisdictional Discovery
Plaintiffs seek jurisdictional discovery over the remaining
Defendants in this case to determine their connections to New
Jersey. As will be discussed below, all four are connected to
Defendant Valentine. Plaintiffs also seek discovery over “which
entities in Defendant Valentine’s web should be named as
defendants in order for Formula One to obtain redress for the
widespread infringement of its valuable trademark rights.” (Mot.
for Jurisd. Disc. at 14.)
The Court must decide whether Plaintiffs have shown the
possible existence of requisite contacts between each of these
Defendants and New Jersey to entitle them to jurisdictional
discovery. From the documents submitted by both parties, the
Court notes that the main alleged site of infringing activity in
New Jersey appears to be New Jersey Motorsports Park, a
motorsports and entertainment park in Millville, New Jersey. The
park included a kart-racing facility called the “F1 New Jersey”
with the following logo:
6
“F1 New Jersey, LLC” was named as an original defendant but they
have since settled with Plaintiffs, and the name of the
racetrack has since been changed.7
Plaintiffs have submitted a wide variety of information to
demonstrate Defendants’ New Jersey contacts, but many of their
factual allegations focus on each Defendant’s involvement with,
promotion of, or connection to New Jersey Motorsports Park and
F1 New Jersey.
In their motion and related submissions, Plaintiffs assert
the following contacts for each of the Defendants:8
1. Richard J. Valentine d/b/a “MBA Group”
The Court notes at the outset that Defendants did not
contest this Court’s jurisdiction over Valentine in their motion
to dismiss. (Mot. to Dismiss [Docket Item 22] at 9 n.9; Mot. for
Jurisd. Disc. at 14.) Plaintiffs, however, seek discovery to
7
The “F1 New Jersey” has since been renamed the Tempest Raceway
Complex. (Pearson Decl. ¶ 34.)
8 The Court acknowledges Defendants’ objections [Docket Item 46]
to the filing of a reply brief containing new allegations,
without leave of Court, in violation of Loc. Civ. R. 37.1(b)(3).
Nevertheless, to promote efficient adjudication of this suit and
limit the waste of judicial resources, the Court is inclined to
decide this motion on the fullest record before it. Accordingly,
the Court will grant Plaintiffs’ request for a reply [Docket
Item 47] nunc pro tunc and consider the arguments and
allegations contained therein. Plaintiffs are admonished to
review the Local Rules and adhere to them in future filings
before this Court.
7
find additional businesses in “Valentine’s web” that could be
named as defendants.
Valentine is a professional race car driver and
entrepreneur and is a resident of Massachusetts with his primary
business office in that state. He used to own a Massachusettsbased company called The MBA Group, LLC that focused on
investing in startup companies; that company was dissolved in
2012. Valentine has owned and continues to own a variety of
companies which provide services and goods in different areas,
and uses the name “MBA Group” from time to time as an informal
trade name to refer to his various business enterprises. Unlike
The MBA Group, LLC, the informal trade name “MBA Group” is not a
legal entity. (Valentine Cert. in Supp. of Mot. to Dismiss
(“Valentine Cert.”) [Docket Item 22-2] ¶¶ 5-7.) The “MBA Group”
website and Valentine’s personal website together list the four
entity Defendants that are the subject of this motion among
their “Companies and Partners” or “Current Business Ventures.”
(Pearson Decl. in Supp. of Mot. for Jurisd. Disc. [Docket Item
33] ¶¶ 8-9 & Exs. A & B.)
Valentine and three partners built and opened New Jersey
Motorsports Park in Millville, New Jersey. The park is promoted
on the website . (Valentine Cert. ¶ 29; Pearson
Decl. ¶ 11.)
8
Valentine asserts that he is the co-manager of an
unidentified entity that holds a minority interest in New Jersey
Motorsport Park LLC, which manages the park. He asserts that his
co-investors run the business and his involvement “is only with
major decisions.” (Valentine Cert. ¶ 11; Pearson Decl. ¶¶ 9-11.)9
2. Karting America LLC (“Karting America”), d/b/a “F1
Boston”
Karting America is a limited liability company organized
under the laws of Massachusetts and operates under the name “F1
Boston” with the following logo:
(Valentine Cert. ¶ 13; Am. Compl. ¶ 14.) Valentine holds a 13.5%
membership interest in Karting America, and, as noted below,
Defendant Kart Management, whose sole partner is Valentine,
holds a majority ownership. (Valentine Cert. ¶¶ 15, 31.)
Karting America has no physical presence in New Jersey. It
operates F1 Boston, a go-kart racetrack and conference center in
9
In addition, Valentine is an investor in two limited liability
companies (F1 Air Group, LLC and F1 Air Logistics, LLC) with
some ties to New Jersey that allegedly conducted infringing
activities. One is registered to do business in New Jersey and
owned a jet which was parked in New Jersey for periods of time.
The second LLC has as its investor a New Jersey-based money
management firm. (Valentine Cert. to First Mot. to Dismiss
[Docket Item 11-1] ¶¶ 23, 25; Pearson Decl. ¶ 15 & Ex. E.) Both
LLCs were named as defendants in the Amended Complaint but have
since been dismissed. [See Docket Item 28.]
9
Braintree, Massachusetts. Nearly all of F1 Boston’s customers
are from Massachusetts. The company does not offer goods or
services for sale in New Jersey, nor does it advertise in New
Jersey. (Id. ¶¶ 16-17, 19.)
Karting America owns the website , which
promotes its F1 Boston racetrack and conference center. Although
parties may submit information regarding reservations, customers
cannot book an event or make a reservation using the website.
The website sells gift cards to the F1 Boston facility, but
customers cannot otherwise purchase goods or services through
the website. (Valentine Cert. ¶¶ 22-25 & Ex. A; Pearson Decl. ¶
24 & Ex. I.)
Plaintiffs offer the following facts to demonstrate that
Karting America’s contacts with New Jersey:
Karting America sold a few go-karts and karting parts to NJ
Motorsports in 2012, which constituted less than 0.25% of
Karting America’s total annual revenue. (Valentine Cert. ¶
18.)
The “Sponsors and Partners” page of F1 Boston’s website
contains links to other sites, including to New Jersey
Motorsports Park. (Pearson Ex. I.)
Out-of-state visitors, including people from New Jersey,
have patronized the F1 Boston racetrack. (Pearson Decl. ¶
27 & Ex. L.)
F1 Boston’s Facebook page promoted New Jersey Motorsports
Park in a post from December 2013. (Pearson Ex. K.)
Karting America is the domain name registrant for
, which was previously used to promote New
10
Jersey Motorsports Park but now no longer directs to any
content. (Valentine Cert. ¶¶ 21, 29; Pearson Decl. ¶ 20 &
Ex. F.)
According to a press release from November 2004, F1 Boston
had planned to open a kart-racing track at the Xanadu
Entertainment Complex at the Meadowlands New Jersey. There
is no indication that this track was completed. (Pearson
Decl. ¶ 21 & Ex. G.)
In another press release from February 2008, New Jersey
Motorsport Park announced a “partnership with RJ Valentine
and his F1 Boston group to create F1 New Jersey,” the kartracing facility that is part of New Jersey Motorsport Park.
(Pearson Decl. ¶ 22 & Ex. H.)
Valentine drove a race car with the F1 Boston logo on it at
New Jersey Motorsports Park. (Pearson Reply Decl. ¶ 3 & Ex.
A.)
3. Kart Management Group, LLP (“Kart Management”)
Kart Management is a Massachusetts company headquartered in
Braintree, Massachusetts. It has no physical presence in New
Jersey, nor does it conduct any business in New Jersey. It does
not offer goods or services for sale in the state. (Valentine
Cert. ¶¶ 31-33, 37.) Valentine is identified as the company’s
sole partner in the Massachusetts business entity database.
(Pearson Decl. ¶ 29 & Ex. M.)
Kart Management owns a majority interest in Karting America
d/b/a F1 Boston (Valentine Cert. ¶ 15), and F1 Boston’s website
notes Kart Management Group is responsible for “all aspects of
the management of F1 Boston,” “including operations, sales,
11
advertising, marketing, and financial controls.” (Pearson Reply
Decl. ¶ 6 & Ex. B.)
4. RJV Enterprises LLC (“RJV), d/b/a “F1 Hospitality”
RJV Enterprises is a Massachusetts-based limited liability
company with the primary business of selling go-karts and gokart parts imported from Italy and Germany. Valentine is the
majority owner and manager of RJV. (Valentine Cert. ¶¶ 34, 36;
Pearson Decl. ¶ 31 & Ex. M.) Less than 5% of its go-kart and
equipment sales are to karting facilities in New Jersey.
(Valentine Cert. ¶¶ 37-40.)
Defendants allege that RJV has no physical presence in New
Jersey and does not advertise in New Jersey. Plaintiffs attach
an April 2010 article from what appears to be a kart-racing news
website reporting that RJV’s businesses include New Jersey
Motorsport Park, F1 Boston, and F1 Outdoors, and a business
called RIMO USA, which imports and distributes race karts.
RIMO’s website, in turn, contains links to several “F1”
businesses, including F1 Outdoors and the racetrack at New
Jersey Motorsports Park. (Pearson Reply Cert. ¶¶ 7-8 & Exs. C &
D.)
One of RJV’s three divisions operates under the name “F1
Hospitality” with the following logo:
12
F1 Hospitality leases a hospitality trailer for use at
sporting and entertainment events, and Plaintiffs allege it has
been booked for events at New Jersey Motorsport Park and other
venues in New Jersey. (Pearson Decl. ¶ 30; Valentine Cert. ¶
35.) F1 Hospitality also had a website on which it advertised
its services, which was registered to Valentine’s now-dissolved
company. (Valentine Cert. ¶ 6; Pearson Decl. ¶¶ 30-31 & Ex. F.)
5. New England Kart Raceway, Inc. (“NE Kart Raceway”),
d/b/a “F1 Outdoors”
NE Kart Raceway is incorporated under the laws of
Massachusetts with Valentine as its principal shareholder.
(Valentine Cert. ¶ 41; Pearson Decl. ¶ 33.) It does business
under the “F1 Outdoors” name and the following logo:
The company has no physical presence in New Jersey. It does
not advertise in New Jersey or offer goods or services for sale
in the state. (Valentine Cert. ¶¶ 43-46.)
NE Kart Raceway operates F1 Outdoors, a go-kart racetrack
in East Bridgewater, Massachusetts, which attracts primarily
Massachusetts residents but has also attracted out-of-state
13
visitors, including visitors from New Jersey. (Pearson Decl. ¶
35.) In 2013, a series of kart races called the RMAX Challenge
was held at five kart-racing sites in different states. The
kart-racing sites in the “circuit” included the one in New
Jersey and F1 Outdoors, and Plaintiffs assert that the race at
F1 Outdoors attracted participants and observers from New
Jersey. (Pearson Decl. ¶ 34 & Ex. O.)
Similar to F1 Boston’s website, the F1 Outdoors website is
used to promote and provide information about its racetrack, but
does not sell goods or services. Customers cannot book an event
or make a reservation through the website but can submit
information for booking. (Valentine Cert. ¶¶ 48-51; Pearson
Decl. ¶ 34; Pearson Ex. O.)
***
Plaintiffs also note that F1 Boston, F1 Outdoors, and New
Jersey Motorsports Park all identify each other as sponsors or
affiliates on their websites, or provide links to the other’s
site. F1 Boston’s website also identifies F1 Hospitality as a
sponsor and partner. (Pearson Decl. ¶¶ 24, 25, 32-34 & Exs. I,
J, & O.)
6. John Doe Companies I-III
In his certification in connection with Defendants’ motion
to dismiss, Valentine asserted that he “is the co-manager of a
14
New Jersey entity that has a minority interest in NJ
Motorsport.” (Valentine Cert. ¶ 11.) In an earlier certification
filed with the Court, Valentine stated that he owned interest in
two separate companies that have a combined 21% interest in New
Jersey Motorsports Park, LLC. (Valentine Cert. to First Mot. to
Dismiss [Docket Item 11-1] ¶¶ 12, 32.) Plaintiffs assert that
counsel for Defendants have refused to identify these entities,
which Plaintiffs have dubbed John Doe Companies I, II, and III,
by name. (Pearson Decl. ¶ 17.)
III. LEGAL STANDARD
Although the plaintiff bears the burden of demonstrating
sufficient contacts between the defendant and the forum state to
support the exercise of personal jurisdiction, Pinker v. Roche
Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002), courts are to
assist the plaintiff by allowing jurisdictional discovery unless
the plaintiff's claim is “clearly frivolous.” Mass. Sch. of Law
at Andover, Inc. v. Am. Bar Ass'n, 107 F.3d 1026, 1042 (3d Cir.
1997). Jurisdictional discovery should be sustained when the
plaintiff presents factual allegations that suggest with
“reasonable particularity” the possible existence of requisite
contacts between the defendant and the forum state. Toys “R” Us,
Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003); Mellon
15
Bank (East) PSFS, Natl Ass’n v. Farino, 960 F.2d 1217, 1223 (3d
Cir. 1992).
Thus, courts in this Circuit have permitted jurisdictional
discovery where the jurisdictional facts “remain in dispute,”
Flagship Interval Owner’s Ass’n, Inc. v. Phila. Furniture Mfg.
Co., No. 09-1173, 2010 WL 1135736, at *2, 7 (D.N.J. Mar. 22,
2010) (Simandle, J.); where the request for jurisdictional
discovery is “critical to the determination of whether [the
court can] exercise personal jurisdiction over the defendant,”
W. Afr. Trading & Shipping Co. v. London Int'l Grp., 968 F.
Supp. 996, 1001 (D.N.J. 1997); and where the plaintiff has
provided “at least some evidence” that a defendant “has had some
contact” with the forum, state. Cosa Marble, Inc. v. Classic
Tile, Inc., No. 07-587, 2008 WL 320465, at *3 (D.N.J. Jan. 28,
2008).
Ultimately, to meet its burden on a motion to dismiss under
Fed. R. Civ. P. 12(b)(2), the plaintiff must proffer evidence of
jurisdiction through sworn affidavits or other competent
documents. See Metcalfe v. Rennaissance Marine, Inc., 566 F.3d
324, 330 (3d Cir. 2009); IMO Indus., Inc. v. Kiekert AG, 155
F.3d 254, 257 (3d Cir. 1998); In re Nazi Era Cases Against Ger.
Defendants Litig., 320 F. Supp. 2d 204, 214-15 (D.N.J. 2004).
16
IV.
DISCUSSION
A. Personal Jurisdiction Generally
The personal jurisdiction inquiry traditionally requires an
examination of whether its exercise over a defendant is
permissible under both the state’s long-arm statute and the Due
Process Clause of the Constitution. But if the state’s personal
jurisdiction statute permits the exercise of jurisdiction to the
fullest limits of due process, as is the case here, the two
jurisdictional inquiries in this case collapse into one: whether
the exercise of jurisdiction comports with due process. Imo
Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998);
DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 284 (3d
Cir. 1981).
As has often been repeated, the Due Process Clause of the
Constitution permits the exercise of personal jurisdiction when
there are “minimum contacts” between a non-resident defendant
and the forum state such that “maintenance of the suit does not
offend traditional notions of fair play and substantial
justice.” J. McIntyre Machinery, Ltd. V. Nicastro, 131 S. Ct.
2780, 2787 (2011) (quoting Int’l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)). A court may exercise either general
jurisdiction or specific jurisdiction over a defendant as long
as it is consistent with that principle. General jurisdiction
17
may be asserted over a foreign corporation even when the cause
of action has no relation to those contacts if the defendant’s
contacts with the forum are so “continuous and systematic” as to
render them essentially “at home” in the forum state. Daimler AG
v. Bauman, 134 S. Ct. 746, 754 (2014); Goodyear Dunlop Tires
Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011);
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,
414 (1984). If an out-of-state defendant’s contacts with the
forum are insufficiently substantial to establish general
jurisdiction, a court may still assert specific jurisdiction if
the suit “aris[es] out of or relate[s] to the defendant’s
contacts with the forum.” Helicopteros, 466 U.S. at 414, n.8.
The inquiry here becomes whether the defendant has “purposefully
directed” his activities at residents in the forum state, Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985), or whether
there was “some act by which the defendant purposefully
avail[ed] itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and
protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253
(1958).
18
B. Limited Discovery will be Granted to Determine the Nature
and Scope of NE Kart Raceway, RJV, and Karting America’s
Connections with New Jersey, and to Identify the John Doe
Companies
Because the Federal Rules and this Circuit permit liberal
discovery of jurisdictional facts which are relevant and not
privileged, see Mass. Sch. of Law at Andover, Inc. v. Am. Bar
Ass’n, 107 F.3d 1026, 1041 (3d Cir. 1997), the Court begins with
a presumption in favor of allowing discovery to establish
personal jurisdiction.
1. Karting America
Plaintiffs have proffered at least some evidence that
Karting America d/b/a F1 Boston, though based out of
Massachusetts, has some connections to New Jersey, but it falls
well below the requisite threshold for establishing general
jurisdiction. Plaintiffs note that Karting America sold some gokarts and karting parts to New Jersey in 2012, although
Defendants certified that those sales constituted less than
0.25% of its total annual revenue. Plaintiffs have also provided
evidence that F1 Boston attracts at least some visitors from New
Jersey, and may, through its website, sell goods to New Jersey
residents in the form of gift cards for use at the F1 Boston
racetrack. Additionally, at one point 10 years ago, F1 Boston
had planned to open a kart-racing track in New Jersey. On the
other hand, Defendants have averred through a sworn
19
certification that Karting America otherwise does not transact
business in New Jersey, does not offer goods or services for
sale in New Jersey, and has no employees, officers, or records
in the state. These facts are not disputed by Plaintiffs, nor
have they suggested that Karting America has a physical presence
in the state. Given the high threshold of business activity that
is now required under the recent Supreme Court case Daimler AG
v. Bauman, 134 S. Ct. 746 (2014),10 the alleged contacts are
plainly insufficient to find general jurisdiction over Karting
America. 134 S. Ct. at 751 (general jurisdiction is proper over
a foreign corporation “only when the corporation’s affiliations
with the State in which suit is brought are so constant and
pervasive ‘as to render [it] essentially at home in the forum
10
In Daimler, the plaintiffs attempted to attribute the
California activities of one of Daimler’s subsidiaries,
Mercedez-Benz USA (“MBUSA”) to Daimler. MBUSA was incorporated
in Delaware and had its principal place of business in New
Jersey but had several corporate facilities in California and
distributed cars to California. In addition, MBUSA was the
largest supplier of luxury vehicles to the California market,
and annual sales of Daimler vehicles in California amounted to
2.4% of Daimler’s global sales, or about $4.6 billion. Id. at
752. Nonetheless, the Supreme Court held that even these
contacts, assuming they could be attributed to Daimler, would be
insufficient to subject Daimler to general jurisdiction in
California, explaining that it was not enough that a corporation
engage in “substantial, continuous, and systematic” business in
a state, because that would allow corporations to be subject to
suit in every state in which they did substantial business. Id.
at 761. The Court went on to note that in all but the most
“exceptional case,” a corporation is “at home” in only two
places: its place of incorporation and its principal place of
business. Id. at 760-61 & n.19.
20
State.’” (quoting Goodyear Dunlop Tires Operations, S.A. v.
Brown, 131 S. Ct. 2846, 2851 (2011))).11
Nonetheless, the Court will permit limited discovery
because some of Plaintiffs’ allegations suggest that specific
jurisdiction may exist. First, the 2008 press release submitted
by Plaintiffs appears to suggest that a company known as the “F1
Boston Group” partnered with Valentine in the creation of the F1
New Jersey kart-racing facility at New Jersey Motorsports Park.
In his certification, Valentine also noted that he built New
Jersey Motorsports Park along with three partners, but did not
identify the names of his partners. The name “F1 Boston Group”
is similar to “F1 Boston,” and discovery may reveal that the two
entities are one and the same, or that “F1 Boston Group” is a
d/b/a of Karting America. If that turns out to be the case, then
11
Plaintiffs have not alleged, nor is there any shred of
evidence, that any of the entity Defendants are registered to do
business in New Jersey, which may subject them to jurisdiction
in the state. See, e.g., Bane v. Netlink, Inc., 925 F.2d 637,
640 (3d Cir. 1991) (Pennsylvania statute establishing
jurisdiction over any foreign corporation that registers to do
business in the state “carries with it consent to be sued in
Pennsylvania courts”); Otsuka Pharmaceuticals Co., Ltd. v.
Mylan, Inc., Civ. No. 14-4508, ___ F. Supp. 3d _____, 2015 WL
13-5764, at *12 (D.N.J. Mar. 23, 2015) (registration to do
business in New Jersey, even absent service upon a corporate
agent in New Jersey, suffices to confer personal jurisdiction
where the corporate defendant was also availing itself of the
privilege of doing business in New Jersey); Sadler v. Hallsmith
SYSCO Food Serv., 2009 WL 1096309 (D.N.J. Apr. 21, 2009)
(defendant consented to being sued in New Jersey by conceding
that it was registered to do business in New Jersey and had a
registered agent in the state for service of process).
21
Karting America, through its involvement in New Jersey
Motorsports Park and the F1 New Jersey racing facility, will
likely be subject to specific jurisdiction in New Jersey.
Second, Plaintiffs have submitted evidence of crosspromotion between the Defendant entities. The evidence of crosspromotion between each Defendant and New Jersey Motorsports Park
is particularly relevant. F1 Boston’s website identifies New
Jersey Motorsports Park as a sponsor and it promoted New Jersey
Motorsports Park in a single Facebook post. While this still
falls short of demonstrating that Defendant had “continuous and
systematic contacts” with New Jersey, it does suggest that F1
Boston exploited the “F1” brand and marks by encouraging
visitors who were familiar with F1 Boston to patronize the F1
New Jersey in Millville. Plaintiffs have, in other words,
provided facts implying that Defendant F1 Boston purposefully
directed some activity to New Jersey that supported the
infringing entity in the state, causing injury to Plaintiffs.
Additionally, the evidence of cross-promotion between the entity
Defendants and New Jersey Motorsports Park may point to the
existence of an underlying contract between the parties to
promote each other’s go-kart facilities. Such a contract would
indicate that F1 Boston “deliberate[ly] target[ed] [] the forum”
by promoting F1 Boston with New Jersey residents visiting New
Jersey Motorsports Park, and would support a finding of specific
22
jurisdiction. See D’Jamoos ex rel. Estate of Weingeroff v.
Pilatus Aircraft Ltd., 566 F.3d 94, 10103 (3d Cir. 2009)
(quoting O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312,
317 (3d Cir. 2007)).12
Accordingly, because Plaintiffs have provided some evidence
to suggest that specific jurisdiction may be established, the
Court will permit discovery to determine whether Karting America
has contacts with New Jersey specific to the cause of action in
this case. In particular, discovery should be related to (1) the
nature and scope of Karting America’s connection and involvement
with “F1 Boston Group” and with New Jersey Motorsport Park; (2)
the existence of any contracts or agreements between Karting
America d/b/a F1 Boston and New Jersey Motorsports Park to
advertise its services and products, and (3) the extent of
cross-promotion between the Defendants. If discovery within
these identified fields leads to the prompt identification of
other limited discovery reasonably needed for a fair
12
The fact that some New Jersey residents have visited F1 Boston
does not by itself support specific jurisdiction, since contacts
with a state's citizens that take place outside the state are
not purposeful contacts with the state itself. See O’Connor v.
Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir. 2007);
Gehling v. St. George’s Sch. of Med., Ltd., 773 F.2d 539, 542-43
(3d Cir. 1985) (fact that some students at a school are
residents of Pennsylvania does not automatically subject the
school to suit in Pennsylvania). It is F1 Boston’s purposeful
promotion of its go-kart facilities with New Jersey residents
that could render them subject to suit in New Jersey.
23
determination of specific jurisdiction, that too may be
permitted.
2. NE Kart Raceway
For many of the same reasons, the Court will also permit
limited discovery into NE Kart Raceway d/b/a “F1 Outdoors”
relevant to establishing specific jurisdiction. A broader
inquiry is not required because Plaintiffs have not shown with
“reasonable particularity” the possibility of finding enough
contacts to subject F1 Outdoors to general jurisdiction.
Like Karting America, NE Kart Raceway’s business is
operating a go-kart facility in Massachusetts. It does not sell
products or services directly in New Jersey, does not have
employees, officers, or business records in the state, and does
not solicit business in the state. It is likely that F1 Outdoors
has attracted at least some visitors from New Jersey over the
past few years through their participation in 2013 in the fivestate RMAX Challenge. Without more, these allegations do not
come close to showing general jurisdiction.
The Court cannot, however, rule out the possibility of
specific jurisdiction, because Plaintiffs have pointed to facts
which at least cast some doubt on Defendants’ statement that F1
Outdoors does not advertise or promote its business in New
Jersey. The fact that Defendant’s website advertised F1 Outdoors
24
as a race site in the RMAX Challenge (and noted the location of
other race sites) suggests that it may have promoted or
encouraged attendance at races at the other Challenge locations,
including at F1 New Jersey. F1 Outdoors’ website also provided a
link to the website of New Jersey Motorsports Park, and in turn,
the New Jersey Motorsports Park website linked to F1 Outdoors.
As noted above, such cross-promotion could suggest an underlying
agreement between the parties to promote each other’s
businesses. Discovery may reveal that F1 Outdoors purposefully
directed business towards F1 New Jersey, or targeted
advertisements for F1 Outdoors at New Jersey residents, either
directly or through an agreement with New Jersey Motorsports
Park.
Because Plaintiffs have shown that discovery would not be
frivolous, the Court will permit limited discovery for purposes
of determining whether the Court may exercise specific
jurisdiction over NE Kart Raceway. In particular, discovery will
be permitted to examine (1) the existence of any contracts or
agreements between NE Kart Raceway d/b/a F1 Outdoors and New
Jersey Motorsports Park to advertise its services and products,
and (2) the extent of cross-promotion between the parties.
Additional discovery beyond the scope of these fields may be
permitted at the Court’s discretion if this discovery leads to
25
areas for reasonable follow-up if likely to be probative of
specific jurisdiction.
3. RJV Enterprises
The Court will also permit limited discovery into RJV
Enterprises d/b/a “F1 Hospitality” for purposes of establishing
specific jurisdiction.13 The F1 Hospitality division of RJV
provides a hospitality trailer bearing the allegedly infringing
“F1” logo, services, and equipment to customers at sporting or
entertainment events. Plaintiffs allege, upon information and
belief, that the trailer has been used for events in New Jersey,
including at the F1 New Jersey racetrack. Given that Valentine,
who holds interests in F1 Boston, F1 New Jersey, and F1
Outdoors, is also RJV’s majority owner and manager, Plaintiff’s
13
Defendants have asserted by sworn declaration that it has no
presence in New Jersey and does not advertise in the state, and
that RJV’s go-kart and equipment sales in New Jersey make up
less than 5% of its total sales. Plaintiffs have not alleged any
facts which would place these statements into dispute, nor do
they suggest that RJV has other contacts with New Jersey. Thus,
discovery will be limited in scope and will be relevant to the
question of whether specific jurisdiction may be established.
See Daimler, 134 S. Ct. at 760-62 (finding court lacked general
jurisdiction in the state even though defendant had multiple instate facilities, distributed products for sale in the state,
and sold over 10% of its U.S. products in the state); Goodyear,
131 S. Ct. at 2852 (finding court lacked general jurisdiction
where defendant’s products were distributed to forum state but
defendant had no office, employees, or bank accounts in the
state, was not registered to do business in the state, did not
solicit business or advertise in the state, and did not
themselves sell products in the state).
26
allegation that events at these “F1” venues use F1 Hospitality’s
services is certainly plausible.
Plaintiffs have been unable to allege more because
Defendants have provided virtually no information on F1
Hospitality or its services. With respect to F1 Hospitality,
Valentine’s certification asserts only that “One of RJV’s three
business divisions does business as ‘F1 Hospitality,’ and its
business is leasing out of Massachusetts a hospitality trailer
for customers to use at entertainment events, used by customers
anywhere they wish to entertain.” (Valentine Cert. ¶ 35.)
Defendants do not state how much of F1 Hospitality’s revenue may
be attributed to customers in New Jersey, whether F1 Hospitality
purposefully solicits business in the state, or whether RJV had
knowledge that its trailer with the allegedly infringing logo
was being used for these commercial purposes in New Jersey.
Valentine’s certification discusses only RJV and its contacts,
even though Plaintiffs’ claim of infringement is directed
towards use of the “F1 Hospitality” mark on trailers provided by
F1 Hospitality.
An inquiry into F1 Hospitality and its specific contacts
with New Jersey is critical to determining whether this Court
has specific jurisdiction over RJV. In order to meet Defendants’
jurisdictional challenge under Fed. R. Civ. P. 12(b)(2),
Plaintiffs must provide affidavits or other competent evidence
27
to establish the existence of jurisdiction. See, e.g., Time
Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 63
(3d Cir. 1984). Here, the facts which would establish personal
jurisdiction over RJV are in the exclusive control of
Defendants, and they have provided little information to
Plaintiffs.
In addition, Plaintiffs have produced a news article
reporting that New Jersey Motorsports Park is one of RJV’s
businesses, suggesting that RJV may have a financial stake in
the operation of New Jersey Motorsport Park and the F1 New
Jersey racetrack. Such a finding would almost certainly support
the exercise of specific jurisdiction over RJV.
“When the fish is identified, and the question is whether
it is in the pond, we know no reason to deny a plaintiff the
customary license.” Compagnie des Bauxites de Guinee v. L'Union,
723 F.2d 357, 362 (3d Cir. 1983) (quoting Surpitski v. Hughes–
Keenan Corp., 362 F.2d 254, 255–56 (1st Cir. 1966)).
Accordingly, the Court will grant jurisdictional discovery to
determine whether the Court may exercise specific jurisdiction
over RJV. Discovery should focus on (1) the nature and extent of
F1 Hospitality’s contracts and sales of “F1 Hospitality”-branded
products and services within New Jersey; (2) the existence of
any contracts or agreements between F1 Hospitality and New
Jersey Motorsports Park to advertise its services and products,
28
and the extent of cross-promotion between the parties; and (3)
the nature and extent of RJV’s connection and involvement with
New Jersey Motorsport Park. Additional discovery beyond the
scope of these fields may be permitted at the Court’s discretion
if this discovery leads to areas for reasonable follow-up if
likely to be probative of specific jurisdiction.
4. John Doe Companies I-III
Finally, the Court will grant jurisdictional discovery to
identify the names of the John Doe Defendants. Since Plaintiffs
assert that these defendants are entities that co-manage or have
an interest in New Jersey Motorsports Park, their connection to
New Jersey and the infringing acts in particular is plain.
Furthermore, Plaintiffs have asserted that they have requested
the names of these entities from Defendants, but Defendants have
so far refused to provide this information. Contrary to
Defendants’ contention, permitting Plaintiffs to merely learn
the names of these entities will not unduly burden the Court’s
and parties’ time and resources. Rather, what burdens the
Court’s time and the parties’ resources is the cat-and-mouse
game in which Defendants have not disclosed those names of
plainly relevant entities. The Court will therefore order
discovery to identify these entities.
***
29
The Court will exert personal jurisdiction over the above
Defendants to the extent necessary to require them to provide
this limited specific-jurisdiction related discovery. The period
for jurisdictional discovery shall be 45 days. Within 7 days
thereafter, Plaintiffs may file a letter request to lift the
stay on Defendants’ motion to dismiss along with serving an
opposition to Defendants’ motion. Defendants’ reply will be due
7 days thereafter.
C. Jurisdictional Discovery will be Denied with respect to
Kart Management.
Plaintiffs have not shown with reasonable particularity
that Kart Management may be subject to jurisdiction in New
Jersey. Defendants have stated that Kart Management does not
have a presence in New Jersey, does not conduct business in New
Jersey, and does not offer goods or services for sale in the
state. Although Plaintiffs note that Kart Management owns a
majority interest in Karting America and is responsible for the
management of F1 Boston, that activity does not establish Kart
Management’s contacts with New Jersey.
Discovery will not be granted as a matter of course simply
because a plaintiff has named a particular party as a defendant.
The Court must be satisfied that there is some indication that
this particular defendant is amenable to suit in this forum.
Here, the record is devoid of any evidence that Kart Management
30
has even a single direct connection with the forum state.
Accordingly, the Court will deny jurisdictional discovery.14
D. Because Valentine Does Not Contest Jurisdiction,
Jurisdictional Discovery to Determine Valentine’s Other
Connections to New Jersey will be Denied
Plaintiffs seek to propound discovery on Valentine to find
out “which entities in Defendant Valentine’s web should be named
as defendants in order for Formula One to obtain redress for the
widespread infringement of its valuable trademark rights.” (Mot.
for Jurisd. Disc. at 14.) Plaintiffs make no attempt to identify
how many additional entities there might be or the scope of
their business, nor do they make a plausible suggestion that
these unknown businesses have some connection to New Jersey.
Indeed, the very purpose of Plaintiffs’ request, in their own
14
Plaintiffs note that Valentine is listed as Kart Management’s
sole partner. They have also pointed out that Valentine owns a
stake in each of the named entity Defendants. To the extent
Plaintiffs imply that jurisdiction may be found because
Valentine has a financial interest in the each of the entity
Defendants and he himself is subject to jurisdiction in this
state, that argument must be rejected. “[P]ersonal jurisdiction
over an LLC member should not be extended to the LLC based upon
the member's unrelated contacts.” King v. Hawgwild Air, LLC, No.
08–0153, 2008 WL 2620099, at *5 (N .D. Tex. June 27, 2008); see
also Omnicare Pharmacies of Pa. W., LLC. v. Latrobe Health LLC,
No. 12-761, 2013 WL 1102878, at *5 n.10 (W.D. Pa. Mar. 15,
2013); Mountain Funding, LLC v. Blackwater Crossing, LLC, No.
05-513, 2006 WL 1582403, at *3 (W.D.N.C. June 5, 2006) (“[T]he
practice of disregarding a limited liability company as an
entity and looking to the citizenship of its members is only
used to determine whether a court has diversity for subject
matter jurisdiction. . . . This principle has not been applied
to personal jurisdiction, which presents distinct due process
issues.”).
31
words, is to find additional potential defendants that they
themselves have not even identified or thought of. It is
therefore clear that speculation, and not any concrete factual
allegations suggesting the existence of jurisdiction, forms the
basis for their request.
The Court finds no reason to permit a thinly-veiled fishing
expedition into all of Valentine’s companies and business
interests. Plaintiffs have not demonstrated that they have met
the requirement for jurisdictional discovery, as they have not
shown with any “reasonable particularity” that Valentine owns
other companies, not yet known to Plaintiffs, that are
infringing on the Formula One Marks and that have sufficient
ties to New Jersey. More importantly, aside from John Doe
Companies I-III, whose identities are already subject to
discovery, Plaintiffs have not named any other defendants. The
Court cannot order jurisdictional discovery to uncover whether
parties who are not even named in this suit have New Jersey
contacts.
More importantly, as Plaintiffs themselves point out,
Valentine has not contested personal jurisdiction in this case.
Jurisdictional discovery is intended to clarify and resolve
disputes over a defendant’s requisite contacts with a state.
Here, there is no dispute: because Valentine waived his personal
jurisdiction defense, he is subject to suit in New Jersey.
32
Jurisdictional discovery on Valentine to discover other of his
companies would serve no purpose in establishing the Court’s
jurisdiction over him. In denying discovery, the Court does not
rule out that Valentine may be required to provide information
in connection with jurisdictional discovery over other entity
Defendants discussed above.
V.
CONCLUSION
Jurisdictional discovery will be permitted with respect to
Karting America, NE Kart Raceway, and RJV Enterprises to
determine whether the Court may establish specific jurisdiction
over these Defendants. Jurisdictional discovery will also be
permitted to determine the identities of the several unnamed
John Doe defendant entities that own interests in New Jersey
Motorsports Park, which Plaintiffs have captioned “John Doe
Companies I-III.” Jurisdictional discovery will be denied with
respect to Kart Management and Richard Valentine.
Plaintiffs’ Proposed Interrogatories and Requests for the
Production of Documents [Docket Item 32] shall be revised to
confine to the issues noted in this Opinion and the Court’s
accompanying Order. Defendants’ time to respond will be
expedited to 14 days. The period for jurisdictional discovery
shall be 45 days. Within 7 days thereafter, Plaintiffs may file
a letter request to lift the stay on Defendants’ motion to
33
dismiss along with an opposition to Defendants’ motion.
Defendants’ reply will be due 7 days thereafter.
December 22, 2015
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
34
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