Bonita Fabrics, Inc. v. Kirat S. Anand, an Individual, dba Kas New York
Filing
12
OPINION re: 3 MOTION to Dismiss filed by Kirat S. Anand, an Individual, dba Kas New York. Upon the facts and conclusions set forth above, the Defendant's motion to dismiss is denied without prejudice to renewal following jurisdictional discovery. (Signed by Judge Robert W. Sweet on 4/19/2013) (cd)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
x
12 Misc. 408
BONITA FABRICS, INC.,
OPINION
Plaintiff,
against
KIRAT ANAND, AN INDIVIDUAL, DBA
KAS NEW YORK,
Defendant.
----------
X
A P PEA RAN C E S:
aintiff
Donald Pearce,
260 Madison Avenue, 17th Floor
New York, NY 10016
By: Donald Pearce, Esq.
Defendant
SABHARWAL & FINKEL, LLC
350 Fifth Avenue, 59th Floor
New York, NY 10118
By: Adam Finkel, Esq.
Rohit Sabharwal, Esq.
,
..
..... v_......._·__
-~~-···'"
"
Swee t , D. J . ,
Defendant Kirat S. Anand ("Anand" or the "Defendant")
has moved pursuant to Rule 12 of the Federal Rules of Civil
Procedure to dismiss the miscellaneous proceeding brought by
Plaintiff Bonita Fabrics, Inc.
("Bonita" or the "Plaintiff"),
and to quash subpoenas issued in connection with the proceeding.
Plaintiff requests that the motions be denied or, in the
alternative, that jurisdictional discovery be granted.
Upon the conclusions set forth below, the motion is
denied without prejudice and jurisdictional discovery is
granted.
I. Background and Prior Proceedings
The instant miscellaneous matter arises from an action
by the Plaintiff in the United States District Court for the
Central District of California (the "California Court") , Case
No. 11 Civ. 7594 (the "California Action").
Bonita is a California corporation with its principal
place of business in Los Angeles, California.
1
Bonita is a
fabric wholesaler and employs several full time designers
California.
Bonita applied for and received a copyright
registration for Design No. 50653
(
"Design") on April 5,
2007 and assigned Registration Number VA 1-634 587.
From 2007
to 2009, Bonita sold to Forever 21, one of the largest chains of
junior's retail stores worldwide, approximately 100,000 yards at
a wholesale price in excess of $600,000.
In May 2011, Bonita learned that certain garments
bearing allegedly unauthorized reproductions of the Design (the
"Accused Garments") were being sold on four separate websites,
including www.swirl.com by Daily Candy Commerce, LLC ("Daily
Candy"), www.shopstyle.com, www.edressme.com and
www.rue
.com.
Bonita has alleged that Anand, doing business as KAS
NEW YORK, sold the Accused Garments on above-mentioned websites
and in dozens of stores in California, including boutiques such
as Fred Segal and Scoop, and larger department stores located
throughout California including Neiman Marcus and
Bloomingdale's.
Bonita has contended that Anand had, and may
still have, a sales representative in Los Angeles and exhib
2
and sold goods at the California trade show "Designers and
Agents."
It is also alleged that Anand frequently travels to
California for business and/or pleasure.
Bonita has also noted
that KAS NEW YORK's website states:
Who is KAS? KAS was created by the brand's namesake
and founder, Kirat S. Anand.
Born and raised in New
York with no formal training, Kirat knew that he
wanted to make an imprint on the fashion world .
Realizing a void in the luxury/ contemporary woman's
ready-to-wear market, he launched KAS NEW YORK in
2007.
(See Def. Memo. at 3).
In addition, Anand's user submitted
profile on Linkedln.com lists that he is the "Designer and Owner
at KAS NEW YORK."
According to Bonita, in November 2011, it
discovered that KAS NEW YORK was not a legal entity and that no
person or entity had filed a fictious name statement for KAS NEW
YORK.
In his
fidavit, Anand has contended that he, as an
individual, does not do business as KAS NEW YORK.
Instead,
according to Anand, a separate and distinct business
corporation, Dani II, Inc.
("Dani II"), a garment wholesaler,
owns various labels including KAS NEW YORK.
6).
(Anand Aff.
~~
3
Anand has admitted that he is the current President of, and
a shareholder in Dani II.
(Anand Aff.
3
~
6).
Dani II is a
corporation formed under the laws of the State of New York with
s principal place of business at 101 32 Dupont Streetl
Plainview NY 11803.
(Anand Aff.
~
2).
In addition l Anand has
so stated that his website does not state that he is doing
business as KAS NEW YORK.
(Anand Aff.
~
4).
Anand has
contended that "Plaintiff has not provided a scintilla of
evidence to support that KAS NEW YORK is owned by Kirat Anand or
is an assumed name belonging to Kirat Anand") and thus he is a
wrongfully named defendant in the instant action and the
California Action.
On May 271 2011 1 Bonita sent a cease and desist letter
to KAS NEW YORK demanding that KAS cease its infringement and
provide documentary evidence
customers and profits.
its supply source
Ex. 1).
1
sales l
By letter dated June 71
2011 1 Anand responded to the letter but did not provide any of
the requested information.
(Pl. Ex. 2).
Bonita sent a
subsequent letter on July 13 1 2011 1 which went unanswered.
(Pl.
Ex. 3).
Anand hired three separate attorneys who communicated
with Bonita/s counsel at various times over the course of the
next year.
According to Bonita l attorneys for Anand advi
Bonita/s counsel that KAS NEW YORK was not a legal entitYI but
4
that Dani II should be the defendant in any action alleging
infringement.
Bonita responded by asking for proof of the
proper entity to be named as well as documentary evidence of
sales, customers and profits.
counselors eventual
Bonita has contended that Anand's
advised that their client would not reveal
the names of his supplier, customers, or provide the back-up
sales documents.
On March 2, 2012, Bonita received an Order to Show
Cause issued by the California Court indicating that the
rst
Amended Complaint ("FAC") would be dismissed unless a default
judgment was requested.
By email dated March 2, 2012, Bonita
provided Anand's counsel with notice of the Order to Show Cause
and also advised that Bonita would file default papers in the
following week.
(Pl. Ex. 9).
Anand did not respond to the FAC
within the permitted time period.
A clerk's default was entered
by the California Court on March 16, 2012.
(Pl. Ex. 10).
By letter dated June 19, 2012, Anand sent a letter to
the Honorable Philip S. Gutierrez, who presided over the
California Action, requesting a continuance of the default
hearing.
(Pl. Ex. 11).
Rules 83-2.11.
The letter was rejected as per Local
(Pl. Ex. 11).
On June 20, 2012, Judge Gutierrez
granted Bonita's request for entry of default judgment, finding
5
that good cause
sted for the entry of default against the
defendant in the amount of $20 000
1
1
together with pre-judgment
interest as well as attorneys' fees in the amount of $7 080.50
1
costs of suit in the amount of $682.50.
1
The California Court
also issued a permanent injunction against Anand.
On December 20 1 2012 1 Bonita entered an amended
registration of foreign judgment against Anand in the amount of
$271763 in the Southern District of New York.
Anand
subsequently filed the instant motions to dismiss and quash on
March 25 1 2013 1 which was heard and marked fully submitted on
April 16, 2013.
II.
Discussion
Rule 12(b) (2) requires that a court dismiss a claim if
the court does not have personal jurisdiction over the
defendant.
See Fed. R. Civ. P. 12(b) (2).
personal jurisdiction ,
"To establish
[a plaintiff] must show that
[the
defendant] has minimum contacts with the forum state and was
properly served."
Line Ltd"
2010)
Salmassi e. Kfr. v. Euro-America
No. 08-4892/ 2010 WL 2194827/ at *4 (S.D.N.Y. June 11
(citations omitted).
Once a defendant has raised a
jurisdictional defense on a Rule 12(b) motion to dismiss/ the
6
plaintiff bears the burden of establishing that the court has
jurisdiction over a defendant.
DiStefano v. Carozzi North
America Inc., 286 F.3d 81, 84 (2d
~[J]urisdiction
. 2001).
must be shown affirmatively, and that
showing is not made by drawing from the pleadings inferences
favorable to the party asserting it."
Shipping Fin. Servs.
Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998)
omitted).
(citations
As such, a court may rely on evidence outside of the
pleadings, including declarations submitted in support of the
motion and the records attached to these declarations.
See
v. United States, 201 F.3d 110, 113 (2d Cir. 2000)
resolving a motion to dismiss .
a district court .
refer to evidence outside of the pleadings. ") .
~[W]here
(~In
. may
the
issue is addressed on affidavits, all allegations are construed
in the light most favorable to the plaintiff and doubts are
resolved in the plaintiff's favor[.]"
A.I. Trade Finance, Inc.
v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).
Under California Code of Civil Procedure
§
California courts may exercise personal jurisdiction
410.10,
~on
any
basis not inconsistent with the Constitution of this state or of
the United States."
the statute is to
Cal. C. Civ. P.
low the exercise
7
§
410.10.
The effect of
the broadest possible
jurisdiction consistent with the due process clause of the
United States Constitution.
See Rocke v. Canadian Auto. Sport
Club, 660 F.2d 395, 298 (9th Cir. 1981).
"Personal jurisdiction may be either general or
Inc. v. Seabest Foods
specific."
4th 444, 445, 58 Cal. Rptr. 2d 899
1
Inc., 14 Cal.
926 P.2d 1085 (1996).
"General jurisdiction exists when a defendant is domiciled in
the forum state or his activities there are substantial,
continuous, and systematic./I
F. Hoffman-La Roche, Ltd. v.
__~______ __
Co_u r~t, 130 Cal. App. 4th 782, 796 (2005).
In the
absence of general jurisdiction, a court may exercise specific
jurisdiction over a nonresident defendant where "(1) the
defendant has purposefully availed himself or herself of forum
benefits;/I
(2) the "controversy is related to or 'arises out of'
[the] defendant's contacts with the forum"; and (3)
"the
assertion of personal jurisdiction would comport with 'fair play
and substantial justice.
lll
Vons, 14 Cal. 4th at 447.
The due process test for personal jurisdiction has two
related components: the "minimum contacts and
"reasonableness" inquiry.jllJetropolitan Life Ins. Co. v.
_R~o~b~e~r~t~s~o~n~~~~~~~,
84 F.3d 560 1 567 (2d Cir.1996).
To have
minimum contacts, the defendant must purposefully avail himself
8
to the privileges and immunities of the forum state.
Id.
Under
the minimum contacts test, an essential criterion in all cases
lS
whether the 'quality and nature' of the defendant!s activity
lS
such that it is 'reasonable' and 'fair' to require him to
conduct his defense in that State."
Kulko v. California
Superior Court, 436 U.S. 84, 92, 98 S. Ct. 1690, 56 L. Ed. 2d
132 (1978)
(quotation omitted) .
In addition, "[t]he mere fact that a corporation is
subject to local jurisdiction does not neces
ly mean its
nonresident officers, directors, agents and employees are suable
locally as well."
Col~
Studio, Inc. v. Badpuppy Enterprise, 75
F. Supp. 2d 1104, 1111 (C.D. Cal. 1999).
purposes, the acts of corporate
offici
"For jurisdictional
ficers and directors in their
capacities are the acts of the corporation exclusively
and are thus not materi
for purposes of establishing minimum
contacts as to the individuals."
Id.
"Implicit in this
principle is the consideration that corporations are separate
legal entities that cannot act on their own but must do so
through their appointed representatives."
Id.
Thus,
"acts
performed by these individuals, in their official capacities,
cannot reasonably be attributed to them as individual acts
creating personal j
sdiction."
Id.
9
Here, Plaintiff alleges that "Defendant's KAS products
are sold in dozens
stores in California, including Neiman
Marcus, Bloomingdales, Fred Segal and Scoop.
trade shows
in California.
California.
Defendant attends
Defendant had a sale representative
Defendant travels to California on personal
and/or business matters.
Defendant infringed a copyright owned
by a California based business."
(Pl. Opp. at 9).
Thus, each
of Anand's purported contacts with California is based on
Plaintiff's theory that Anand is acting as or controls KAS New
York.
Defendant has contended that "any goods sold that
contained the allegedly infringing print .
were sold by Dani
II, not by 'Kas New York' and certainly not by 'Kirat Anand.'
. Reply at 10).
Defendant also has admitted that Dani II
employed a sales representative and sold garments to various
brick and mortar as well as online stores in California.
(Id. ) .
Defendant has claimed that "every single purported contact to
California was by Dani II, not Kirat."
Id.
Plaintiff has submitted substantial evidence
supporting its allegations that KAS NEW YORK placed the Design
and Accused Garments in the stream of commerce with the purpose
of garnering business in California.
10
(Pl. Exs. 1, 16, 17).
However
I
a factual dispute exists as to the legal status of and
Anand/s role in KAS NEW YORK
of Dani II.
I
as well as the corporate structure
Prior to a determination of jurisdiction
as to what type
control
I
specif
l
questions
entity KAS NEW YORK exists as and under whose
details as to the nature of Anand/s
in
KAS NEW YORK and Dani I I I and whether other shareholders or
owners of Dani I I exist must be answered.
Given the lack of such answers in the factual record
l
the exercise of jurisdiction is unclear at this time.
District
courts have "wide latitude to determine the scope of
scovery
and to allow jurisdictional discovery and
l
I
II
if so to what extent.
Frontera Res. Azerbaijan Corp. v. State Oil Co. of the
Azerbaijan Republic I 582 F.3d 393
1
401 (2d Cir. 2009)
Jurisdictional discovery "should be granted where
inent
facts bearing on the question of jurisdiction are controverted
s is
. or where a more satisfactory showing of the
necessary."
635
1
Kilpatr!ck v. Texas & Pac. Ry. CO'
638 (S.D.N.Y. 1947)
72 F. Supp.
"May courts have considered such a
showing necessary when
between two corporations
I
with an unclear
ll
or entities.
ationship
Pension Committee of
univ. of Montreal Pension Plan v. Banc of America Securi
LLC
20
1
I
No. 05 Civ. 9016(SAS)
I
2006 WL 708470 1 at *6 (S.D.N.Y. Mar.
2006).
11
Accordingly, in light of Plaintiff's allegations and
evidentiary submissions thus far, Plaintiff should be permitted
to conduct jurisdictional discovery regarding Anand, KAS NEW
YORK and Dani II's contacts with California limited to the issue
of personal jurisdiction.
The discovery shall be completed
within 90 days.
III. Conclusion
Upon the facts and conclusions set forth above, the
Defendant's motion to dismiss is denied without prejudice to
renewal following jurisdictional discovery.
It is so ordered.
New York, NY
April/'i ' 2013
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?