NEW JERSEY TURNPIKE AUTHORITY v. JERSEY BOARDWALK FRANCHISING CO., INC. et al

Filing 22

OPINION. Signed by Judge William J. Martini on 3/26/15. (gh, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

Docket No.: 14-4589

NEW JERSEY TURNPIKE
AUTHORITY,
Plaintiff,

OPINION

v.
JERSEY BOARDWALK FRANCHISING
CO., INC., JERSEY BOARDWALK
PIZZA CORP., and BOARDWALK
PIZZA, INC.,
Defendants.

WILLIAM J. MARTINI, U.S.D.J.:
This is an action for service mark infringement, service mark dilution, unfair
competition, and other relief arising under the trademark and service mark laws of
the United States, specifically 15 U.S.C. § 1051 et seq. (“Lanham Act’) and the
common law of the State of New Jersey. (Complaint at ¶ 1). In short, Plaintiff New
Jersey Turnpike Authority alleges that the Defendants, who operate as a small
Florida pizza company, have appropriated the Garden State Parkway logo.
Defendants Jersey Boardwalk Franchising Co., Inc., Jersey Boardwalk Pizza
Corp., and Boardwalk Pizza, Inc. (“Defendants”) filed this motion to dismiss the
Complaint for lack of standing pursuant to Federal Rule of Civil Procedure 12(b)(1),
lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2),
and failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For
the reasons set forth below, the Court lacks personal jurisdiction over the Defendants
and therefore will grant the Rule 12(b)(2) motion to dismiss.

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I.

BACKGROUND

Plaintiff is a quasi-government organization located in Woodbridge, New
Jersey. (Complaint at ¶ 2). Plaintiff is the owner of the Garden State Parkway logo.
The logo has been in existence since 1956. The logo has been registered as a United
States Service Mark in International Class 37 for highway management and
maintenance services and Class 39 for travel information services. (Complaint at ¶
19).

Jersey Boardwalk Pizza, Inc. (“Boardwalk Pizza”), a Florida corporation,
formerly known as Boardwalk Pizza, Inc., owns and operates a pizza restaurant in
Tavernier, Florida (the “Original Restaurant”). (Declaration of Paul DiMatteo
(“DiMatteo Decl.”) at ¶ 3). The Original Restaurant offers dine-in, take-out, and
delivery services to its patrons exclusively within the state of Florida. (DiMatteo
Decl. at ¶ 4). The owners are originally from the New Jersey towns of Belmar and
Brick.
Defendants use two allegedly infringing trademarks:

The Original Restaurant began using the “Boardwalk Pizza” logo when it
opened in 2005. (DiMatteo Decl. at ¶ 23). In November 2011, it obtained federal
registration with the U.S. Patent and Trademark Office (“USPTO”). (DiMatteo
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Decl. at ¶ 24). In April 2014, the USPTO issued a determination regarding the
“Jersey Boardwalk Pizza” logo that stated: “the trademark examining attorney has
searched the USPTO’s database of registered and pending marks and has found no
conflicting marks that would bar registration under Trademark Act Section 2(d).
TMEP §704.02; see 15 U.S.C. §I 052(d).” (DiMatteo Decl. at ¶ 30).
Jersey Boardwalk Franchising, Inc. (“JBF”), also a Florida corporation with
its principal (and only) place of business in Homestead, Florida, is the franchisor of
the Jersey Boardwalk Co.® franchise system. (DiMatteo Decl. at ¶ 9). JBF
launched a franchise program offering qualified applicants the right to open and
operate pizza restaurants modeled after the Original Restaurant under the mark
Jersey Boardwalk Co.®. (DiMatteo Decl. at ¶ 10). JBF offered franchises to
prospective franchisees from January 2013 through April 2014. (DiMatteo Decl. at
¶ 11). JBF never offered or sold any franchise opportunities in the state of New
Jersey. (DiMatteo Decl. at ¶ 12). JBF is not presently offering franchises anywhere
in the United States (or elsewhere), and has not offered franchise opportunities to
anyone since April 30, 2014. (DiMatteo Decl. at ¶ 13).
The Defendants operate a website, jerseyboardwalkpizza.com.
(See
Declaration of Ronald Israel). The website advertises Defendants as producing
“Authentic Italian Food From Jersey.” According to this website, the Defendants
only have one location other than the Original Restaurant, which is located in Florida
City, Florida. Although the website has a link stating “Franchise Opportunities –
Click Here,” the link routes to GoDaddy.com, where it states that the domain name
“jerseyboardwalkfranchising.com” has expired.
Defendants’ website has merchandise available. Before initiation of this
lawsuit, no one had ever purchased any merchandise from the website. (DeMatteo
Decl. at ¶ 20). Since the initiation of this lawsuit, Defendants have only sold $577
worth of merchandise, $200 of which was attributable to orders placed by New
Jersey residents. (DeMatteo Decl. at ¶ 19).
In 2011, following the aftermath of Super Storm Sandy, Boardwalk Pizza sent
a truck filled with charitable donations of food and supplies contributed by members
of the Florida community to people in New Jersey. (DeMatteo Decl. at ¶ 5).

II.

LEGAL STANDARD – PERSONAL JURISDICTION
Federal Rule of Civil Procedure 12(b)(2) provides for the dismissal of a
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complaint for lack of personal jurisdiction. “[T]o exercise personal jurisdiction over
a defendant, a federal court sitting in diversity must undertake a two-step inquiry.”
IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 258-59 (3d Cir. 1998). First, the court
applies the relevant long-arm statute of the forum state to determine if it permits the
exercise of jurisdiction. Id. at 259. Second, the court applies the principles of the
Due Process Clause of the Constitution. Id. In New Jersey, this inquiry is collapsed
into a single step because the New Jersey long-arm statute permits the exercise of
personal jurisdiction to the fullest limits of due process. See N.J. Court. R. 4:4-4(c);
DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 284 (3d Cir. 1981). Personal
jurisdiction under the Due Process Clause requires a plaintiff to show that the
defendant has purposefully directed its activities toward the residents of the forum
state, or otherwise “purposefully avail[ed] itself of the privilege of conducting
activities within the forum State.” Hanson v. Denckla, 357 U.S. 235, 253 (1958).
“The due process limit to the exercise of personal jurisdiction is defined by a
two-prong test. First, the defendant must have made constitutionally sufficient
‘minimum contacts’ with the forum.” Vetrotex Certainteed Corp. v. Consol. Fiber
Glass Products Co., 75 F.3d 147, 150 (3d Cir. 1996) (citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474 (1985)). “Second, if ‘minimum contacts’ are shown,
jurisdiction may be exercised where the court determines, in its discretion, that to do
so would comport with ‘traditional notions of fair play and substantial justice.’” Id.
at 150-51 (citing International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
“Minimum contacts” over a non-resident defendant can be established in one
of two ways: general jurisdiction or specific jurisdiction. Metcalfe v. Renaissance
Marine, Inc., 566 F.3d 324, 334 (3d Cir. 2009). General jurisdiction exists where
the non-resident defendant has general contacts with the forum state that are
“continuous and systematic.” Arlington Indus., Inc. v. Elec. Custom Distributors,
Inc., 817 F. Supp. 2d 473, 477 (M.D. Pa. 2011) (citing Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 414-166 (1984)). General jurisdiction allows
a court to hear any and all claims against a party, even where the cause of action is
unrelated to the forum. Id. at 477. Contacts with a forum are “continuous and
systematic” where the Defendant is “essentially at home in the forum state.”
Daimler AG v. Bauman, 134 S. Ct. 746, 761 (U.S. 2014).
“When general jurisdiction is lacking, the lens of judicial inquiry narrows to
focus on specific jurisdiction.” Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46
F.3d 138, 144 (1st Cir. 1995). Specific jurisdiction is established when a nonresident defendant has “purposefully directed” his activities at a resident of the
forum, and the injury arises from or is related to those activities. Gen. Elec. Co. v.
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Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001) (citing Burger King, 471 U.S. at 472).
Analysis for specific jurisdiction is a three-part inquiry. O’Connor v. Sandy Lane
Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir. 2007). First, the defendant must have
“‘purposefully directed’ his activities” at the forum. Id. (citing Burger King, 471
U.S. at 472). The existence of the first element will vary with the “quality and nature
of the defendant’s activity,” but there must be “some act by 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.” Hanson v. Denckla,
357 U.S. 235, 253 (1958). Second, the plaintiff’s claim must “arise out of or relate
to” at least one of those specific activities. O’Connor v. Sandy Lane Hotel Co., Ltd.,
496 F.3d at 317 (citing Helicopteros, 466 U.S. at 414). Third, if the prior two
requirements are met, courts may consider additional factors to ensure that the
assertion of jurisdiction otherwise “comport[s] with ‘fair play and substantial
justice.’” Id. (citing Burger King, 471 U.S. at 476). Specific jurisdiction comports
with fair play and substantial justice where a defendant “purposefully avails itself of
the privilege of conducting activities within the forum State, thus invoking the
benefits and protections of its laws.” See J. McIntyre Mach., Ltd. v. Nicastro, 131 S.
Ct. 2780, 2787-88 (U.S. 2011).
Plaintiff also argues that Defendants’ minimal contacts should be considered
under the Calder effects test. Calder v. Jones, 465 U.S. 783 (1984). The Calder test
determines whether specific jurisdiction exists in certain contexts, even where the
traditional test for minimal contacts would fail. See Miller Yacht Sales, Inc. v. Smith,
384 F.3d 93, 108 (3d Cir. 2004). The Calder test has three prongs: (1) the defendant
must have committed an intentional tort; (2) the plaintiff must have felt the brunt of
the harm caused by that tort in the forum; and (3) the defendant must have expressly
aimed his tortious conduct at the forum, such that the forum can be said to be the
focal point of the tortious activity. IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254,
265-66 (3d Cir. 1998).
III.

DISCUSSION

Defendants do not have constitutionally sufficient “minimum contacts” with
New Jersey. Other than the de minimus sale of branded merchandise items that,
arguably, were purchased due to the publicity surrounding this lawsuit, Defendants
have conducted no business with New Jersey residents. The “‘level of interactivity
and commercial nature’ of Defendants’ website is minimal.” Ackourey v. Sonellas
Custom Tailors, 573 F. App’x 208, 211 (3d Cir. 2014) (quoting Zippo Mfg. Co. v.
Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997)). The website’s
only interactive portion is the merchandise page, and merchandise is a de minimus
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portion of the Defendants’ business. See Richter v. INSTAR Enterprises Int’l, Inc.,
594 F. Supp. 2d 1000, 1007-09) (N.D. Ill. 2009) (noting that where a defendant’s
internet-based sales in a state represent both a small percentage of a defendant’s total
sales and a small volume of sales overall, defendants’ contact with the forum state
cannot be said to be substantial); Nelson v. Massachusetts Gen. Hosp., No. 04-CV5382 (CM), 2007 WL 2781241, at *22 (S.D.N.Y. Sept. 20, 2007) aff’d, 299 F. App’x
78 (2d Cir. 2008) (“This court is aware of no case where a finding of substantial
solicitation . . . was predicated on the operation of an interactive website that has
generated a small amount of activity and a de minim[u]s amount of revenue in the
forum state.”).
Plaintiff’s argument that sending a truck full of aid from Florida to victims of
Hurricane Sandy constituted a publicity stunt resulting in purposeful availment of
New Jersey is simply not persuasive. That contact with New Jersey is still too
attenuated to put the Defendants on notice that they would be subject to a trademark
infringement suit in New Jersey.
Even the Calder test is of no avail to Plaintiff. Although Plaintiff may have
felt the brunt of harm in New Jersey, it could not be said that New Jersey is the focal
point of the offending activity. Florida is the focus of the activity. The spread of
the allegedly infringing mark via merchandise sales on the internet is random and
fortuitous.
Plaintiff’s argument that the evocation of “Jersey” in its advertising
constitutes purposeful availment of the forum state is also not persuasive. While the
Defendants are evoking sentimentality with New Jersey natives in Florida for the
purposes of winning customers, this appeal to the idea of “Jersey” does not
demonstrate purposeful availment of the privileges of doing business in New Jersey.
See Hanson v. Denckla, 357 U.S. 235, 253 (1958). On the contrary, the Defendants’
use of the idea of “Jersey” or “Italian food from Jersey” bears an element of nostalgia
or even exoticism that is clearly directed to consumers outside of New Jersey.
IV.

CONCLUSION

For the reasons set forth above, the Defendants’ motion to dismiss for lack of
personal jurisdiction is granted. An appropriate order follows.
/s/ William J. Martini
_____________________________
WILLIAM J. MARTINI, U.S.D.J.
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Date: March 26, 2015

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