COACHSOURCE, LLC v. COACHFORCE

Filing 14

MEMORANDUM Opinion. Signed by Judge Esther Salas on 3/27/2019. (byl)

Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

COACHSOURCE, LLC,
Plaintiff,
v.
COACHFORCE,
Defendant.

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Civil Action No. 17-5126 (ES) (SCM)
MEMORANDUM OPINION

SALAS, DISTRICT JUDGE
This matter comes before the Court on Plaintiff CoachSource, LLC’s (“Plaintiff”)
unopposed motion for default judgment against Defendant Coachforce (“Defendant”). (D.E. No.
11). The Court has considered Plaintiff’s submissions and decides this matter without oral
argument. See Fed. R. Civ. P. 78(b). As explained below, the Court DENIES Plaintiff’s motion
because Plaintiff has not made a prima facie showing of personal jurisdiction over Defendant.
Background. Plaintiff is a limited liability company organized and operated under New
Jersey law, with its principal place of business in Franklin Lakes, New Jersey. (D.E. No. 1 ¶ 5).
Plaintiff provides leadership coaching to a variety of businesses worldwide. (Id. at ¶ 8). In
connection with its services, Plaintiff owns three registered United States trademarks under the
CoachSource brand. (Id. ¶ 10). Plaintiff alleges that Defendant, an entity incorporated in Ottawa,
Canada, provides coaching services through an internet website using a confusingly similar
mark: Coachforce. (Id. ¶¶ 19-21; D.E. No. 11-2 at 2). Plaintiff alleges that Defendant’s online
business activities infringe its trademark rights and violate various laws related to unfair
competition. (See D.E. No. 1 ¶¶ 35-59).

On August 16, 2017, Plaintiff personally served Defendant’s director, Akhilesh
Siripurapu, in Ottawa, Canada. (D.E. No. 7). Defendant failed to answer or otherwise appear
before the Court. Pursuant to Federal Rule of Civil Procedure 55(a), Plaintiff requested, and the
Clerk entered, Defendant’s default. (See D.E. No. 8). Plaintiff then filed the instant motion for
default judgment. (D.E. No. 11).
Legal Standard. Before granting default judgment, a district court must address any
jurisdictional defect. Allaham v. Naddaf, 635 F. App’x 32, 36 (3d Cir. 2015) (“[W]hen a default
judgment is requested, a court is required to make a threshold determination regarding any
jurisdictional defects.”) (citing Bolden v. Se. Pa. Transp. Auth., 953 F.2d 807, 812 (3d Cir.
1991)). “If a [district] court lacks personal jurisdiction over a defendant, the court does not have
jurisdiction to render a default judgment, and any such judgment will [be] deemed void.” Id.
(citing Budget Blinds, Inc. v. White, 536 F.3d 244, 258 (3d Cir. 2008)).
Where there is no evidentiary hearing, a plaintiff need only establish a prima facie case of
personal jurisdiction. Id. at 36-37. In determining whether a plaintiff has made a prima facie
showing, a district court is “required to accept the allegations in the complaint as true and to
construe any disputed facts in [the plaintiff’s] favor.” Fatouros v. Lambrakis, 627 F. App’x 84,
87 (3d Cir. 2015) (citing Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir.
2009)).
Personal jurisdiction requires the defendant to “ha[ve] 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, thus invoking the benefits and
protections of its laws.’” IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998)
(quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).
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A district court may “exercise

‘personal jurisdiction over non-resident defendants to the extent permissible under the law of the
state where the district court sits.’” Ackourey v. Sonellas Custom Tailors, 573 F. App’x 208, 211
(3d Cir. 2014) (quoting Pennzoil Prods. Co. v. Colelli & Assocs., Inc., 149 F.3d 197, 200 (3d Cir.
1998)). New Jersey’s long-arm statute permits jurisdiction over a non-resident defendant to the
Constitutional due process limits. Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 145 (3d Cir.
1992).
Personal jurisdiction can be established through specific or general jurisdiction. BristolMyers Squibb Co. v. Superior Court of Ca., S.F. Cty., 137 S. Ct. 1773, 1779-80 (2017). A
district court may exercise general jurisdiction when a defendant’s contacts with the forum state
“are so ‘continuous and systematic’ as to render [it] essentially at home.” BNSF Ry. Co. v.
Tyrrell, 137 S. Ct. 1549, 1558 (2017) (quoting Daimler AG v. Bauman, 571 U.S. 117, 127
(2014)). The paradigm forums for exercising general jurisdiction over a corporation are its place
of incorporation and its principal place of business. Daimler, 571 U.S. at 137 (citation omitted).
“A [district] court with general jurisdiction may hear any claim against that defendant, even if all
the incidents underlying the claim occurred in a different State.” Bristol-Myers Squibb, 137 S.
Ct. at 1780 (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919
(2011)).
By contrast, specific jurisdiction arises from “an affiliation between the forum and the
underlying controversy,” and a district court exercising specific jurisdiction “is confined to
adjudication of issues deriving from, or connected with, the very controversy that establishes
jurisdiction.” Id. (quoting Goodyear, 564 U.S. at 919). A three-part test governs a district
court’s inquiry into the existence of specific jurisdiction. O’Connor v. Sandy Lane Hotel, 496
F.3d 312, 317 (3d Cir. 2007). For specific jurisdiction to exist, a district court must determine
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that (i) the defendant “purposefully directed its activities at the forum,” (ii) the litigation “arises
out of or relates to at least one of those activities,” and (iii) the exercise of jurisdiction would
“otherwise comport with fair play and substantial justice.” Id. (cleaned up); see also Estate of
Thompson v. Phillips, 741 F. App’x 94, 98 (applying this three-part test post-Bristol-Myers
Squibb).
To determine whether personal jurisdiction is present based on operating an Internet
website, the Third Circuit has endorsed the standard in Zippo Manufacturing Co. v. Zippo Dot
Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997). See Toys “R” Us, Inc. v. Step Two, S. A., 318
F.3d 446, 452 (3d Cir. 2003) (“The opinion in Zippo Mfg. Co. v. Zippo Dot Com, Inc. . . . has
become a seminal authority regarding personal jurisdiction based upon the operation of an
Internet web site.”). Under the Zippo sliding scale test, “the likelihood that personal jurisdiction
can be constitutionally exercised is directly proportionate to the nature and quality of commercial
activity that an entity conducts over the Internet.” Zippo, 952 F. Supp. at 1124. At one end of
the spectrum are situations where a defendant clearly conducts business with forum residents
through its website—for example, by “enter[ing] into contracts with residents of a foreign
jurisdiction that involve the knowing and repeated transmission of computer files over the
Internet.” Id. In these situations, personal jurisdiction exists. Id. At the other end of the
spectrum are situations where defendant operates a “passive” website that simply contains
information accessible by users in foreign jurisdictions. Id. In the latter situation, personal
jurisdiction does not exist. Id.
Between these two poles are situations where defendant operates an “interactive” website
that enables users to exchange information. Id. Here, “the exercise of jurisdiction is determined
by examining the level of interactivity and commercial nature of the exchange of information
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that occurs on the Web site.” Id. The exercise of personal jurisdiction may be proper where that
interactivity and commercial nature reflect the defendant’s “specifically intended interaction with
residents of the forum state.” See Toys “R” Us, 318 F.3d at 452. (citing Zippo, 952 F. Supp. At
1124). Thus, a high level of interactivity on a commercial website—by itself—does not confer
specific jurisdiction. Id. at 454 (“[T]he mere operation of a commercially interactive website
should not subject the operator to jurisdiction anywhere in the world.”). “Rather, there must be
evidence that the defendant ‘purposefully availed’ itself of conducting activity in the forum state,
by directly targeting its web site to the state, knowingly interacting with residents of the forum
state via its web site, or through sufficient other related contacts.” Id.; see, e.g., Kloth v. S.
Christian Univ., 320 F. App’x 113, 114-17 (3d Cir. 2008) (finding no prima facie case of
personal jurisdiction based on an interactive, commercial website where the plaintiff did not
demonstrate the defendant’s intention to engage in business with citizens of the forum state);
Mon Aimee Chocolat, Inc. v. Tushiya, LLC, No. 14-1568, 2015 WL 2232270, at *4-6 (W.D. Pa.
May 12, 2015) (finding no personal jurisdiction based on an interactive, commercial website
where there was no evidence that the website generated any claim-related sales or shipments to
consumers in the forum state or evidence that the website specifically targeted the forum state);
Zippo, 952 F. Supp. at 1125-26 (finding personal jurisdiction where the defendant had sold
passwords to roughly 3000 subscribers in the forum state, had entered into seven contracts
related to serving customers in the forum state, and thus “ha[d] done more than create an
interactive Web site”).
Analysis. Plaintiff argues that “Defendant is subject to personal jurisdiction in New
Jersey through maintenance and operation of its interactive website and social media accounts.”
(D.E. No. 11-2 at 3).

Plaintiff argues that “Defendant has ‘purposefully availed itself of
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conducting activity in [New Jersey]’ by encouraging and allowing New Jersey residents to
interact with Defendant through its website.” (Id. at 3-4). Plaintiff also argues applying the
Zippo test leads one to the conclusion that Defendant’s website confers personal jurisdiction in
New Jersey. (Id. at 4).
Accepting Plaintiff’s factual allegations as true and viewing those facts in a light most
favorable to Plaintiff, the Court finds that Plaintiff has not made a prima facie case of personal
jurisdiction. See Fatouros, 627 F. App’x at 87. The current record does not reflect general
jurisdiction over Defendant. 1 Plaintiff does not contend that Defendant is incorporated in New
Jersey. (See D.E. No. 11-2 at 2 (alleging that Defendant was founded and incorporated in
Canada)). Nor does Plaintiff contend that Defendant has its principal place of business in New
Jersey. (See generally id.; see also generally D.E. No. 1). Indeed, Plaintiff served Defendant in
Canada through personal service on its Director, Akhilesh Siripurapu. (Id. at 3; D.E. No. 7).
The screenshots of Defendant’s website filed by Plaintiff and the cease-and-desist letter sent by
Plaintiff’s Managing Partner and CFO to Defendant contain no contact information for the Court
to infer that Defendant has any connection to the United States, much less a principal place of
business in New Jersey. (See D.E. No. 1-1, Exs. E & F). Thus, New Jersey is not one of the
paradigm forums for exercising general jurisdiction over Defendant. See Daimler, 571 U.S. at
137. And Plaintiff does not otherwise contend that Defendant’s contacts with New Jersey “are
so ‘continuous and systematic’ as to render [it] essentially at home.” See BNSF Ry. Co., 137 S.
Ct. at 1558; (D.E. No. 11-2). Consequently, Plaintiff has not made a prima facie case of general
jurisdiction.

1
Plaintiff does not specify its theory of personal jurisdiction—i.e., general or specific. (See D.E. 11-2 at 34). Although Plaintiff appears to argue only a specific jurisdiction theory (see id.), in an abundance of caution the
Court addresses the lack of a prima facie case of general jurisdiction over Defendant.

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Plaintiff likewise has not made a prima facie case of specific jurisdiction. In fact,
Plaintiff’s argument for specific jurisdiction misconstrues the relevant standard articulated in
case law. Plaintiff alleges, “Defendant’s sole business is the operation of a website to connect
clients with coaches allowing the two to interact through Defendant[’s] online portals.” (Id. at
4). Plaintiff then argues, “Here, Defendant’s website, and its business is purely interactive. See
https://coachforce.com/about-us. Thus, Defendant’s website confers personal jurisdiction under
Zippo due to its interactive nature.”

(Id.).

But the Third Circuit has flatly rejected this

characterization of Zippo:
The precise question raised by this case is whether the operation of
a commercially interactive web site accessible in the forum state is
sufficient to support specific personal jurisdiction, or whether there
must be additional evidence that the defendant has “purposefully
availed” itself of the privilege of engaging in activity in that state.
Prior decisions indicate that such evidence is necessary, and that it
should reflect intentional interaction with the forum state. If a
defendant web site operator intentionally targets the site to the
forum state, and/or knowingly conducts business with forum state
residents via the site, then the “purposeful availment” requirement
is satisfied. Below, we first review cases from this and other
circuits that articulate this requirement.
Toys “R” Us, 318 F.3d at 451-52; see also Kloth, 320 F. App’x at 116 (“[The plaintiff] claims
that [the defendant’s] Web site satisfies the test in Zippo because it is ‘interactive.’ . . . However,
to demonstrate a prima facie case for the exercise of personal jurisdiction, [the plaintiff] must
show more than mere interactivity; she must also show that . . . [the defendant] intended to
engage in business with student citizens of Delaware—the forum state.”). As the Third Circuit
explained, “the mere operation of a commercially interactive web site should not subject the
operator to jurisdiction anywhere in the world.” Toys “R” Us, 318 F.3d at 454. A defendant
must have intentionally interacted with the forum state to satisfy the purposeful availment
requirement of specific jurisdiction.

See id. at 451-52.
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A plaintiff must demonstrate this

purposeful availment through evidence of Defendant “directly targeting its web site to the state,
knowingly interacting with residents of the forum state via its website, or through sufficient other
related contacts.” Id. at 454.
And here, Plaintiff has not done so. There is not a single alleged fact in the Complaint or
motion for default judgment that the Court could reasonably construe as evidence that Defendant
targeted its website to residents in New Jersey or engaged in business with residents of New
Jersey. See Kloth, 320 F. App’x at 116; (see generally D.E. Nos. 1 & 11). Based on the current
record, Plaintiff has only shown that Defendant’s website is “available to potential customers
nationwide.” See Mon Aimee Chocolate, 2015 WL 2232270, at *5. This showing falls well
below the Constitutional requirements for this Court to exercise jurisdiction. See Kloth, 320 F.
App’x at 116; Toys “R” Us, 318 F.3d at 454.
In sum, Plaintiff needed to show that Defendant targeted its website to New Jersey
residents, knowingly interacted with New Jersey residents, or had other sufficient related
contacts with New Jersey. See Toys “R” Us, 318 F.3d at 454. Because Plaintiff has failed to
make this necessary showing, Plaintiff has not made a prima facie case of personal jurisdiction
over Defendant, and the Court cannot consider the requested relief.
Conclusion. For the reasons above, Plaintiff’s motion is DENIED. To the extent that
Plaintiff can cure the deficiencies identified in this Memorandum Opinion, Plaintiff may file
another motion for default judgment. If Plaintiff chooses to do so, the Court will schedule an
evidentiary hearing where Plaintiff will be required to “prov[e] that the [C]ourt has personal
jurisdiction over [Defendant] by a preponderance of the evidence.” See Allaham v. Naddaf, 635
F. App’x at 37.

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An appropriate Order accompanies this Memorandum Opinion.
s/Esther Salas
Esther Salas, U.S.D.J.

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