VISION MOTOR CARS, INC. v. VALOR MOTOR COMPANY et al
Filing
27
MEMORANDUM OPINION AND ORDER signed by JUDGE CATHERINE C. EAGLES on 11/06/2013 as set out herein, that Defendants' Motions to Dismiss for Lack of Jurisdiction, (Docs. 10 , 14 ), are GRANTED.(Taylor, Abby)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
VISION MOTOR CARS, INC.,
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Plaintiff,
v.
VALOR MOTOR COMPANY, et al.,
Defendants.
1:13-CV-317
MEMORANDUM OPINION AND ORDER
Catherine C. Eagles, District Judge.
This matter is before the Court on motions to dismiss filed by defendant Gene Gabus,
(Doc. 10), and defendants Valor Motor Company, Noble Automotive Group, and Robert Smith.
(Doc. 14.) The plaintiff asserts several claims arising under the trademark laws of the United
States based on allegations that the defendants used or are responsible for the use by others of the
plaintiff‟s trademark “Vision Motor Cars.” 1 The plaintiff also asserts state law claims arising
out of the same factual allegations. The defendants contend the Court lacks personal jurisdiction.
For reasons stated below, the Court finds it does not have personal jurisdiction over any of the
defendants, and the action will be dismissed.
BACKGROUND
When a court‟s exercise of personal jurisdiction is challenged pursuant to a Rule 12(b)(2)
motion, the plaintiff must prove the existence of a ground for jurisdiction by a preponderance of
the evidence. See Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989); Mylan Labs., Inc. v.
1
To distinguish between the plaintiff, Vision Motor Cars, and an entity associated with the
defendants, Vision Motor Company, the Court will refer to the plaintiff as “Vision Motor Cars”
or “the plaintiff,” and the entity associated with defendants as “the Vision Company.”
Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993). When a court examines personal jurisdiction “on the
basis only of motion papers, supporting legal memoranda and the relevant allegations of a
complaint, the burden on the plaintiff is simply to make a prima facie showing” of personal
jurisdiction. Combs, 886 F.2d at 676. The Court must “construe all relevant pleading allegations
in the light most favorable to the plaintiff, assume credibility, and draw the most favorable
inferences for the existence of jurisdiction.” Id.
Although the standard may be lenient, the Court need not “credit conclusory allegations
or draw farfetched inferences.” Masselli & Lane, PC v. Miller & Schuh, PA, 215 F.3d 1320
(table), 2000 WL 691100, at *1 (4th Cir. 2000) (quoting Ticketmaster-N.Y., Inc. v. Alioto, 26
F.3d 201, 203 (1st Cir. 1994)). Blanket conclusory allegations as to multiple defendants are
insufficient. Cf. Sterne v. Thompson, No. 1:05-CV-477JCC, 2005 WL 2563179, at *2 (E.D. Va.
Oct. 7, 2005) (addressing Rule 12(b)(6) motion). A parent-subsidiary relationship does not by
itself support jurisdiction. Saudi v. Northrop Grumman Corp., 427 F.3d 271, 276 (4th Cir.
2005). More must be shown, such as an agency relationship or another reason to pierce the
corporate veil. See Mylan Labs., 2 F.3d at 61. Plaintiffs must base their claim for personal
jurisdiction “on specific facts set forth in the record.” Magic Toyota, Inc. v. Se. Toyota Distribs.,
Inc., 784 F. Supp. 306, 310 (D.S.C. 1992).
The allegations of the complaint are taken as true only if they are not controverted by
evidence from the defendant. See Wolf v. Richmond Cnty. Hosp. Auth., 745 F.2d 904, 908 (4th
Cir. 1984). Once a defendant presents evidence indicating that the requisite minimum contacts
do not exist, the plaintiff must come forward with affidavits or other evidence in support of its
position. See Clark v. Remark, 993 F.2d 228 (table), 1993 WL 134616, at *2 (4th Cir. 1993);
Vogel v. Wolters Kluwer Health, Inc., 630 F. Supp. 2d 585, 594 (M.D.N.C. 2008); see also IMO
2
Indus., Inc. v. SEIM S.R.L., No. 3:05–CV–420–MU, 2006 WL 3780422, at *1 (W.D.N.C. Dec.
20, 2006) (holding that a plaintiff “may not rest on mere allegations where the defendant has
countered those allegations with evidence that the requisite minimum contacts do not exist”).
Where both sides present evidence about personal jurisdiction, factual conflicts must be resolved
in favor of the party asserting jurisdiction for the limited purpose of determining whether a prima
facie showing has been made. See Mylan Labs., 2 F.3d at 62; Barclays Leasing v. Nat’l Bus.
Sys., Inc., 750 F. Supp. 184, 186 (W.D.N.C. 1990); see also Combs, 886 F.2d at 676.
FACTS
The complaint, with few exceptions, groups the defendants together and is not specific
about the activities or actions of any particular defendant. The only allegation in the complaint
concerning the activities of any defendant or of the defendants as a group in or directed towards
North Carolina reads, in its entirety: “Defendants caused tortuous [sic] injury in the [Middle
District of North Carolina] by acts or omissions outside the district, while regularly doing or
soliciting business in the State of North Carolina, pursuant to N.C. GEN. STAT. § 1-75.4.”
(Doc. 1 at ¶ 3.)
The defendants have come forward with specific and detailed evidence concerning the
nature and extent of their contacts with North Carolina. (See generally Doc. 11-1; Doc. 15-1;
Doc. 20-1; Docs. 26-1 to 26-3.) The plaintiff has responded with affidavits concerning website
content and with copies of news articles and website pages, which the Court will consider.
(Docs. 18-1 to 18-7, 24-1 to 24-7.) The Court views the evidence in the light most favorable to
the plaintiff, but notes that these materials do not contradict the defendants‟ evidence in any
substantial or material way. See Combs, 886 F.2d at 676.
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1.
The Vision Company
The Vision Company was incorporated in Delaware in 2012. (Doc. 15-1 at ¶ 2.) It was a
business originally organized to market compressed natural gas (“CNG”) vehicles. (Doc. 15-1 at
¶ 18.) In January 2012, it “reserved its name in South Carolina,” established a domain
registration for www.visionmotorcompany.com, and designed a webpage at that site. (Doc. 15-1
at ¶¶ 19-20.) The website contained contact information for defendant Smith and defendant
Gabus. (Doc. 24-1 at 3.) It stated that the Vision Company “will soon offer” CNG vehicles for
sale, (Doc. 24-1 at 2), and included “links to view videos of cars and safety videos, a dealership
inquiry form, and links to allow the viewer to view current natural gas prices.” (Doc. 24 at ¶ 3.)
On its website, the Vision Company was identified as a “division” and “Wholly Owned
Subsidiary” of defendant Noble. (Doc. 18-1 at 3-4.) The website listed Gabus Automotive
Distributors, Inc., as the “Central, East & West Coast Distributor.” (Id. at 3.) This statement
was followed by a list of 39 states that included North Carolina. (Id. at 3.) Another entity was
listed as the distributor for the northeast. (Id.)
The Vision Company ceased operations in August 2012 and never sold any vehicles.
(Doc. 15-1 at ¶¶ 21-22.) It is not a defendant in this case. It has no offices, real property, bank
accounts, telephone numbers, or employees in North Carolina, nor does it have an agent for
service of process in North Carolina. (Id. at ¶¶ 6-12.) It did not and does not advertise in any
print, television, or radio outlets in or directed to North Carolina and it has not exhibited any
products at any trade shows in North Carolina. (Id. at ¶¶ 13-14.)
2.
Valor
Beginning in approximately June 2012, visitors to www.visionmotorcompany.com were
redirected to the internet home page of defendant Valor. (Doc. 1 at ¶ 25.) Valor was
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incorporated in Delaware on September 20, 2012, and has its only place of business in South
Carolina. (Doc. 15-1 at ¶¶ 23, 30; see Doc. 1 at ¶ 6.) Valor does not and did not own the Vision
Company. (Doc. 15-1 at ¶ 24.) Valor has no offices, real property, bank accounts, telephone
numbers, or employees in North Carolina, nor does it have an agent for service of process in
North Carolina. (Id. at ¶ 31.) It does not advertise in any print, television or radio outlets in or
directed to North Carolina, has not exhibited any products at any trade shows in North Carolina,
and does not regularly do or solicit business in North Carolina. (Id. at ¶¶ 32-34.) Valor
registered the domain name “www.valormotorcompany.com” and transferred content to that
website from the “www.visionmotorcompany.com” website, changing all references from
“Vision” to “Valor.” (Id. at ¶¶ 25-26.) It advertises CNG cars on this website. (Doc. 18-5 at 34.) Valor has never engaged in any transactions with Plaintiff. (Doc. 15-1 at ¶ 35.) Valor has
not sold any vehicles for or on behalf of Vision Motor Company in North Carolina or any other
state. (Id. at ¶ 28.) Valor has not received any inquiries though its web site from anyone in
North Carolina. (Doc. 26-1 at ¶ 9.)
3.
Noble
Noble was identified on the Vision Company‟s website as the owner of the Vision
Company. (Doc 18-1 at 4.) It applied for a trademark on the word “Vision” for compressed
natural gas vehicles, which was denied on April 4, 2012, because of potential confusion with two
other marks, including plaintiff‟s mark. (Doc. 24-7 at 1-2.)
Noble is a corporation organized under Georgia law with its principal office in South
Carolina. (Doc. 15-1 at ¶¶ 36-38; see Doc. 1 at ¶ 7.) It is not registered to do business in North
Carolina and has no offices, real property, bank accounts, telephone numbers, or employees in
North Carolina. (Doc. 15-1 at ¶¶ 37, 39.) It does not design, manufacture, or advertise its
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products in North Carolina and does not solicit business in North Carolina. (Id. at ¶¶ 40-41.) It
does not sell or ship any products to North Carolina customers and does not have an agent for
service of process in North Carolina. (Id. at ¶¶ 42-43.) It does not advertise in any print,
television, or radio outlets in or directed to North Carolina, and it has not exhibited any products
at any trade shows in North Carolina. (Id. at ¶¶ 45-46.) Noble never engaged in any transactions
with the plaintiff. (Id. at ¶ 50.)
4.
Robert Smith
Mr. Smith is an officer of both Valor and Noble and was an officer of the Vision
Company. (Id. at ¶¶ 2-4.) He is a citizen and resident of South Carolina. (Id. at ¶ 5.) He does
not regularly do or solicit business in North Carolina, does not have any office or phone numbers
in North Carolina, does not own any real property in North Carolina or have any bank accounts
in North Carolina, does not have any employees or an agent for service of process in North
Carolina, does not advertise in any print, television, or radio outlets in or directed to North
Carolina, and has not exhibited any products at any trade shows in North Carolina. (Id. at ¶¶ 614.) He has never travelled to North Carolina in connection with the business of the Vision
Company, Valor, or Noble and has not sold any vehicles on behalf of the Vision Company,
Valor, or Noble in North Carolina or any other state. (Id. at ¶¶ 15-16.) On the website of the
Vision Company, someone named Bob Smith was referenced as a contact for the Vision
Company. (Doc. 18-1 at 3-4.)
5.
Gene Gabus
Mr. Gabus is a citizen and resident of Iowa. (Doc. 11-1 at ¶ 2.) Mr. Gabus was identified
by name on the Vision Company‟s website as connected with Gabus Automotive Distributors,
Inc., which was identified on the website as the Vision Company‟s North Carolina distributor.
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(Doc. 18-1 at 3.) Mr. Gabus is an officer and director of Gabus Automotive Distributors. (Doc.
18-4 at 2.) He is not an officer, director, manager, or employee of the Vision Company, Valor,
or Noble.2 (Doc. 11-1 at ¶ 14.) Gabus Automotive Distributors entered into various agreements
with Noble, but neither Mr. Gabus nor Gabus Automotive Distributors ever sold any cars for
Noble. (Doc. 22 at ¶¶ 3-5.) Mr. Gabus did not recruit or train any dealers in North Carolina for
Noble. (Id. at ¶ 5.) One news story indicates he has some business relationship with Noble and
Mr. Smith as a distributor for Noble cars. (Doc. 18-2 at 1-3.) Another news story indicates he
was a distributor for an entity called EnVision Motor Company in 33 states, including North
Carolina. (Doc. 18-3 at 2.)
Mr. Gabus does not regularly do or solicit business in North Carolina, does not have any
office or phone numbers in North Carolina, does not own any real property in North Carolina or
have any bank accounts in North Carolina, does not have any employees or an agent for service
of process in North Carolina, does not advertise in any print, television, or radio outlets in or
directed to North Carolina, and has not exhibited any products at any trade shows in North
Carolina. (Doc. 11-1 at ¶¶ 3-13.) He has never travelled to North Carolina in connection with
the business of the Vision Company, Valor, or Noble and has not sold any vehicles on behalf of
the Vision Company, Valor, or Noble in North Carolina or any other state. (Id. at ¶¶ 17-18.) He
has never engaged in any transactions with plaintiff. (Id. at ¶ 26.) Neither he nor Gabus
Automotive Distributors has ever sold any cars for Noble in North Carolina or anywhere else.
(Doc. 22 at ¶¶ 3, 5.)
2
The plaintiff alleges that Mr. Gabus is an officer or manager of Noble, (Doc. 1 at ¶ 9), but
has not come forward with any evidence to that effect.
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An entity denominated as “Vision Motor Company” with a Des Moines, Iowa, address
had a web page at www.visionmotorcompanyofdesmoines.com on August 22, 2013, which
contained material about CNG vehicles. (Doc. 18-6 at 1-3.) The street address on the web page
was the same as for Gabus Automotive Distributors. (See Doc. 18-4 at 2; Doc. 18-6 at 1.)
Gabus Automotive Distributors established the website in April 2012, before the Vision
Company abandoned the “Vision” mark and adopted “Valor.” (Doc. 22 at ¶ 6.) The website
sought to promote the sale of CNG vehicles, but those vehicles were not present in the United
States. (Id.) No inquiries, solicitations, or orders ever came through the site. (Id.)
ANALYSIS
The allegations of the complaint do not provide a basis for personal jurisdiction of any
defendant. The allegations are conclusory and make few specific factual assertions as to any
particular defendant‟s contacts with North Carolina. These conclusory allegations need not be
considered. See Masselli & Lane, 2000 WL 691100, at *1. The Court will therefore make its
decision based on the detailed evidence submitted by the defendants and the evidence the
plaintiff has offered in response.
A district court has personal jurisdiction over a non-resident defendant when two
conditions are satisfied: “First, the exercise of jurisdiction must be authorized by the long-arm
statute of the forum state, and, second, the exercise of personal jurisdiction must also comport
with Fourteenth Amendment due process requirements.” Christian Sci. Bd. of Dirs. v. Nolan,
259 F.3d 209, 215 (4th Cir. 2001); see Miller v. Kite, 313 N.C. 474, 476, 329 S.E.2d 663, 665
(1985); Fran’s Pecans, Inc. v. Greene, 134 N.C. App. 110, 112, 516 S.E.2d 647, 649 (1999).
The Court will examine each condition.
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1. North Carolina‟s Long-Arm Statute
The plaintiff appears to rely on Section 1-75.4(4)(a) of North Carolina‟s long-arm statute
to satisfy the first condition required for asserting personal jurisdiction over non-resident
defendants. This section provides:
A court of this State . . . has jurisdiction over a person . . . under any of the
following circumstances:
....
(4) Local Injury; Foreign Act. – In any action . . . claiming injury to
person or property within this State arising out of an act or omission
outside this State by the defendant, provided in addition that at or about
the time of the injury . . . :
a. Solicitation or services activities were carried on within this
State by or on behalf of the defendant.
N.C. Gen. Stat. § 1-75.4(4)(a). This provision requires the plaintiff to demonstrate: “1) an
action claiming injury to a North Carolina person or property; 2) that the alleged injury arose
from activities by the defendant outside of North Carolina; and 3) that the defendant was
engaging in solicitation or services within North Carolina at or about the time of the injury.”
Fran’s Pecans, 134 N.C. App. at 113, 516 S.E.2d at 649-50 (internal quotation marks omitted).
This provision should be “liberally construed in favor of establishing the existence of personal
jurisdiction.” Id. at 114, 516 S.E.2d at 650.
The defendants contend the plaintiff‟s action is not authorized by the long-arm statute
because they were not engaging in solicitation or services in North Carolina at or about the time
of the plaintiff‟s injury. (Doc. 20 at 1; Doc. 26 at 1-2.) Indeed, the defendants contend they have
not done any business or had any contacts with North Carolina related to this action. (Doc. 20 at
1; Doc. 26 at 1-2.)
Unlike cases where the solicitation or services prong was satisfied, the plaintiff offers no
evidence of any sales, visits, or phone calls related to the action by the defendants to North
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Carolina. See, e.g., Fran’s Pecans, 134 N.C. App. at 113-14, 516 S.E.2d at 650 (holding
solicitation or services prong satisfied because defendant admitted to numerous mail order sales
to North Carolina); Carson v. Brodin, 160 N.C. App. 366, 371, 585 S.E.2d 491, 495-96 (2003)
(holding solicitation or services prong satisfied by visits and phone calls to North Carolina);
Haizlip v. MFI of S.C., Inc., 159 N.C. App. 466, 583 S.E.2d 427 (table), 2003 WL 21791639, at
*5 (2003) (holding solicitation or services prong satisfied because defendant made several calls
and sent representative to North Carolina). The plaintiff‟s only evidence related to North
Carolina consists of a few websites and articles that mention North Carolina, along with dozens
of other states, as a possible location for future car sales by the defendants and one blog entry
from Valor‟s website that notes North Carolina and Oklahoma offer tax credits related to natural
gas vehicles. (Doc. 18-1 at 3; Doc. 18-3 at 2; Doc. 18-5 at 3.) There is no evidence of any actual
business solicitation or services rendered by the defendants in North Carolina.
Absent any evidence that any defendant was engaged in solicitation or services activities
at any point in North Carolina, the plaintiff‟s action is not authorized by North Carolina‟s longarm statute. Therefore, the Court lacks personal jurisdiction over the defendants and the action
will be dismissed.
2. Due Process
In the alternative, the Court finds that asserting personal jurisdiction over the defendants
would not comport with due process. Before finding personal jurisdiction over the defendants,
the Court must determine “whether [each] defendant has such „minimal contacts‟ with the forum
state that „maintenance of the suit does not offend traditional notions of fair play and substantial
justice.‟” Christian Sci. Bd. of Dirs., 259 F.3d at 215 (quoting Int’l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)). “The question . . . is whether a defendant‟s contacts with the forum state
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are so substantial that they amount to a surrogate for [physical] presence and thus render the
exercise of sovereignty just . . . .” ESAB Grp., Inc., v. Centricut, Inc., 126 F.3d 617, 623 (4th
Cir. 1997).
Opinions since International Shoe “have differentiated between general or all-purpose
jurisdiction, and specific or case-linked jurisdiction.” Goodyear Dunlop Tires Operations, S.A.
v. Brown, ___ U.S. ___, ___, 131 S. Ct. 2846, 2851 (2011). General jurisdiction exists when a
foreign corporation‟s “affiliations with the State are so „continuous and systematic‟ as to render
them essentially at home in the forum State.” Id. (quoting Int’l Shoe, 326 U.S. at 317).
“[S]pecific jurisdiction is confined to adjudication of „issues deriving from, or connected with,
the very controversy that establishes jurisdiction.‟” Id. (quoting Arthur T. von Mehren & Donald
T. Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1136
(1966)).
The plaintiff contends that the Court has jurisdiction over each defendant because each
defendant “acted intentionally to cause harm to Plaintiff‟s (a North Carolina resident) legally
protected interest, knowing that the conduct would cause harm at the Plaintiff‟s domicile to his
property interest there.” (Doc. 16 at 1 (regarding defendant Gabus); Doc. 23 at 1 (regarding
defendants Valor, Noble, and Smith).) While not completely clear, it appears the plaintiff is
arguing that the Court has specific jurisdiction over each defendant. Out of an abundance of
caution, the Court will address both general and specific jurisdiction.
A. General Jurisdiction
“To establish general jurisdiction over the defendant, the defendant‟s activities in the
State must have been continuous and systematic, a more demanding standard than is necessary
for establishing specific jurisdiction.” ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d
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707, 712 (4th Cir. 2002) (internal quotation marks omitted). “[A]ttenuated connections” that do
not rise to the level of “continuous and systematic general business contacts” are insufficient.
Goodyear Dunlop Tires, ___ U.S. at ___, 131 S. Ct. at 2857. Nor are a small number of sales to
customers within the forum state adequate to impart personal jurisdiction. See ESAB Grp., 126
F.3d at 624 (holding no general jurisdiction available for a defendant with twenty-six customers
in forum state which make up less than .01% of its nationwide sales volume); Baker v. Patterson
Med. Supply, Inc., No. 4:11cv37, 2011 WL 7153948, at *7 & n.8 (E.D. Va. Nov. 17, 2011)
(Stillman, M.J., report and recommendation adopted) (holding that distribution of unknown
number of catalogues in forum state and maintenance of a website do not give rise to the exercise
of jurisdiction).
No defendant has an office, employees, or agents in North Carolina. No defendant owns
property in the state or has a business relationship with the plaintiff. No defendant has made any
sale in North Carolina. There are not even attenuated contacts with the state by any defendant,
much less continuous and systematic contacts. Therefore, the Court does not have general
jurisdiction over the defendants.
B. Specific Jurisdiction
Specific jurisdiction exists when the “suit aris[es] out of or [is] related to the defendant‟s
contacts with the forum.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414
n.8 (1984). To determine the existence of specific jurisdiction, a court considers: “(1) the extent
to which the defendant purposefully availed itself of the privilege of conducting activities in the
State; (2) whether the plaintiffs‟ claims arise out of those activities directed at the State; and (3)
whether the exercise of personal jurisdiction would be constitutionally reasonable.” ALS Scan,
293 F.3d at 712 (internal alterations and quotation marks omitted); see also Goodyear Dunlop
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Tires, ___ U.S. at ___, 131 S. Ct. at 2854. “If, and only if, [a court] find[s] that the plaintiff has
satisfied this first prong of the test for specific jurisdiction need [the court] move on to a
consideration of prongs two and three.” Consulting Eng’rs Corp. v. Geometric Ltd., 561 F.3d
273, 278 (4th Cir. 2009).
While the analysis is not a mechanical one, the Fourth Circuit has summarized the factors
the courts have considered in deciding whether a defendant “purposefully availed” itself of the
privilege of doing business in a state. Id. Those factors include:
whether the defendant maintains offices or agents in the forum state;
whether the defendant owns property in the forum state;
whether the defendant reached into the forum state to solicit or initiate
business;
whether the defendant deliberately engaged in significant or long-term
business activities in the forum state;
whether the parties contractually agreed that the law of the forum state would
govern disputes;
whether the defendant made in-person contact with the resident of the forum
in the forum state regarding the business relationship;
the nature, quality and extent of the parties‟ communications about the
business being transacted; and
whether the performance of contractual duties was to occur within the forum.
Id. at 278 (internal citations omitted).
The only factor that the plaintiff points to in support of its claim of jurisdiction is that
each defendant either reached into North Carolina to solicit or initiate business via an internet
site, or is responsible for some other defendant‟s conduct reaching into the state. (See Doc. 16 at
8-10; Doc. 23 at 11-12.) The plaintiff has offered no evidence or made any argument that any of
the other factors weigh in its favor, and the defendants‟ uncontradicted evidence establishes that
none of the defendants maintain offices or agents in North Carolina, own property in the forum
state, or deliberately engaged in significant or long-term business activities in the forum state.
The defendants‟ evidence further establishes without contradiction that no defendant had any
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contractual agreements with the North Carolina plaintiff, made any in-person contact with the
plaintiff, or had any communications with the plaintiff.
When specific jurisdiction is asserted based on electronic activity by a defendant,
a State may, consistent with due process, exercise judicial power over a person
outside of the State when that person (1) directs electronic activity into the State,
(2) with the manifested intent of engaging in business or other interactions within
the State, and (3) that activity creates, in a person within the State, a potential
cause of action cognizable in the State‟s courts.
ALS Scan, 293 F.3d at 714. It is not enough that the defendant placed information on the
internet; there must be a manifest intent to target the forum state. Id.; see also Panavision Int’l,
L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th Cir. 1998) (holding that “something more” than
posting and accessibility is needed to “indicate that the defendant[s] purposefully (albeit
electronically) directed [their] activity in a substantial way to the forum state”).
In Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 399 (4th Cir.
2003), the Fourth Circuit applied the ALS Scan framework in a trademark infringement case.
The Maryland plaintiff alleged that the Illinois defendant infringed its trademark rights in the
mark “CAREFIRST.” Id. at 393. The defendant challenged personal jurisdiction, and the
plaintiff relied upon allegations that the defendant “expressly aimed its trademark-infringing
conduct at the forum state” when it “set up a semi-interactive website that was accessible” from
the forum state. Id. at 398. The defendant had received donations from Maryland, but only one
such donation through its website. Id. at 394-95.
The court held that whether the defendant intended to target the forum state “can be
determined only from the character of the website at issue.” Id. at 400. The relevant factors are
the level of interactivity of the website, whether the website has a commercial nature, whether
there were any online exchanges between the defendant and forum state residents, and whether
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the overall content of the website is local or targeted to the forum state audience. Id. at 400-01.
The court acknowledged that the location of the plaintiff‟s injury was relevant, but held that it
“must ultimately be accompanied by the defendant‟s own sufficient minimum contacts with the
state.” Id. at 401 (quoting Young v. New Haven Advocate, 315 F.3d 256, 262 (4th Cir. 2002))
(internal alterations omitted). Because the defendant had only set up a “generally accessible,
semi-interactive Internet website, it did not thereby direct electronic activity into Maryland with
the manifest intent of engaging in business or other interactions within that state in particular,”
and thus there was no basis for personal jurisdiction. Id. This was so despite the fact that
Maryland has “a strong interest in adjudicating disputes involving the alleged infringement of
trademarks owned by resident corporations.” Id.; see also Young, 315 F.3d at 264 (holding that
articles from two Connecticut newspapers on Virginia prison that were posted online were aimed
at Connecticut and provided insufficient internet contacts for Virginia courts to assert personal
jurisdiction over defendants).
The plaintiff contends this Court can exercise specific jurisdiction over defendants
because they launched semi-interactive websites, these websites and other articles mention North
Carolina in the context of franchises and a tax credit, and these activities involved trademark
violations. (Doc. 16 at 9-10; Doc. 23 at 11-12.) Thus, the plaintiff contends, it has satisfied the
three prongs of ALS Scan and has established a prima facie case to support jurisdiction.
Virtually all of the allegations and evidence concern use of the mark by the Vision
Company on its website, yet the Vision Company is not a defendant. The plaintiff appears to
contend that the other defendants are responsible for the infringement by the Vision Company.
There are two problems with this contention.
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First, the Vision Company does not have sufficient contacts to be brought into court in
North Carolina, so its contacts are insufficient to provide a basis for jurisdiction over a person or
entity who might have derivative liability. See Saudi, 427 F.3d at 276-77; Mylan Labs., 2 F.3d at
61. The plaintiff has offered no evidence that the Vision Company had the “manifest intent” of
targeting people in North Carolina. The Vision Company website had some interactivity and
would allow a person interested in becoming a dealer in any state to make an inquiry. But it
would not allow any commercial transaction or sale to actually take place, and indeed it appears
that no inquiries were ever received from anyone in North Carolina. While the website did list
North Carolina as a place where the Vision Company might sell cars in the future, all forty-nine
other states were also listed, as were many foreign countries.
Second, the plaintiff has offered no evidence to support a principal/agency relationship
and no evidence to support any reason to pierce the Vision Company‟s corporate veil. In the
absence of such evidence, or even allegations, personal jurisdiction cannot be premised on
derivative liability. See Saudi, 427 F.3d at 276-77; Mylan Labs., 2 F.3d at 61-62; Harris v.
Deere and Co., 223 F.2d 161, 162-63 (4th Cir. 1955).
In the absence of derivative liability, specific jurisdiction can exist only if a defendant
committed some act in or directed towards the forum state that gives rise to the cause of action.
See ALS Scan, 293 F.3d at 714 (holding that specific jurisdiction may be based on a foreign
defendant‟s internet activity directed at the forum state and causing an injury that gives rise to a
potential claim in the forum state). In this case, that means that each defendant must have
infringed the trademark on the internet as part of activity directed at North Carolina or that the
defendant is somehow responsible for the acts of another defendant who infringed and caused
damage in North Carolina.
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As to the defendant Valor, there is some evidence that visitors to the
www.visionmotorcompany.com website began rolling over to the Valor website. Yet there is
still no evidence that Valor had the “manifest intent” of targeting people in North Carolina.
Valor‟s website does not show any particular focus on North Carolina, and there have been no
transactions or even inquiries with anyone from North Carolina through the website or as a result
of the website. Plaintiff points to a blog entry on Valor‟s website that mentions a North Carolina
tax credit for natural gas vehicles. However, this single sentence is one example in a broader
discussion of financial incentives for natural gas vehicles in the United States. This is far less
than the targeting seen in Young, where the news articles focused on the Virginia prison and one
article mentioned the allegedly defamed warden by name, and yet even there the Fourth Circuit
did not find sufficient intent to target the forum state. 315 F.3d at 263-64.
There is no evidence that Valor, through its website, manifested an intent to target North
Carolina. Because the plaintiff cannot satisfy ALS Scan, the Court finds that it does not have
personal jurisdiction over defendant Valor.
As to the other defendants, there are no allegations or evidence concerning any other
defendant‟s use of the allegedly infringing domain name or trademark at all, much less that any
particular defendant used the trademark with the manifest intent of targeting people in North
Carolina. To the contrary, the evidence reveals the defendants hope to one day create a domestic
market for natural gas vehicles, and North Carolina is merely one of fifty states in that plan. (See
Doc. 20-1 at ¶¶ 3-6; Doc. 26-1 at ¶ 10.) Defendants have not sold any natural gas vehicles or
established any dealerships or franchises, in North Carolina or elsewhere, for these sales. (Doc.
20-1 at ¶¶ 3-6; Doc. 26-1 at ¶ 10.) Indeed, all of the evidence indicates the vehicles sought by
the defendants are not yet available in the United States. (See Doc. 20-1 at ¶¶ 3-6; Doc. 26-1 at ¶
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10.) Such hopeful, eventual, or someday availment of the North Carolina market is not
purposeful availment under our law.
Because no defendant purposefully availed itself of the benefits and privileges of the
forum state and because the trademark cause of action does not arise out of any defendant‟s
activities directed at North Carolina, the Court does not have specific jurisdiction over any
defendant. Under the circumstances of this case, the exercise of personal jurisdiction over the
defendants would be constitutionally unreasonable, considering the burdens on and interests of
the parties. See Consulting Eng’rs Corp., 561 F.3d at 279. Therefore, the action will be
dismissed because the Court lacks personal jurisdiction over the defendants.
It is ORDERED that Defendants‟ Motions to Dismiss for Lack of Jurisdiction, (Docs.
10, 14), are GRANTED.
This the 6th day of November, 2013.
__________________________________
UNITED STATES DISTRICT JUDGE
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