Moseley v. FILLMORE COMPANY, LTD et al

Filing 53

ORDER granting 41 Motion to Dismiss pursuant to Rule 12(b)(2) and DENIED as moot as to the motions to dismiss pursuant to Rule 12(b)(3) & (5) and this action against these Defendants is hereby DISMISSED WITHOUT PREJUDICE.; denying without prejudice as moot 14 Motion to Dismiss. This action is hereby DISMISSED WITHOUT PREJUDICE pursuant to Federal Rule of Civil Procedure 19(b). Signed by District Judge Martin Reidinger on 07/16/2010. (thh)

M o s e l e y v. Fillmore Company, Ltd et al

D o c . 53

IN THE DISTRICT COURT OF THE UNITED STATES F O R THE WESTERN DISTRICT OF NORTH CAROLINA ASHEVILLE DIVISION C IV IL CASE NO. 1:09cv221

L O R E TTA MOSELEY, P l a i n t if f , vs . F IL L M O R E COMPANY, LTD., Y U S A NORIYUKI, and ED R O M AN ENTERPRISES, INC., D e fe n d a n ts . )

) ) ) ) ) ) ) ) ) ) )

ORDER

TH IS MATTER is before the Court on the following: 1. D e fe n d a n t, Ed Roman Enterprises, Inc.'s Notice of Motion and Motion to Dismiss Plaintiff's Complaint pursuant to Fed.R.Civ.P. 12(b)(2), (3) a n d (5), or in the alternative, to Transfer this Action to the District of N e va d a , pursuant to 28 U.S.C. §1404(a) [Doc. 14]; and 2. D e fe n d a n ts , Fillmore Company, Ltd. and Yusa Noriyuki's Notice of M o tio n and Motion to Dismiss Plaintiff's Complaint pursuant to F e d .R .C iv.P . 12(b)(2), (3) and (5) [Doc. 28; Doc. 41]. P u rs u a n t to 28 U.S.C. § 636(b) and the standing Orders of Designation

Dockets.Justia.com

o f this Court, United States Magistrate Judge Dennis L. Howell was d e s ig n a te d to consider these motions and to submit recommendations for th e ir disposition. On June 1, 2010, the Magistrate Judge filed his

M e m o ra n d u m and Recommendation in which he recommended that the m o tio n s of Defendants Fillmore Company, Ltd. (Fillmore) and Yusa Noriyuki (N o riyu k i) be granted and that this action be dismissed without prejudice as to those defendants for lack of personal jurisdiction. [Doc. 45]. In view of that re c o m m e n d a tio n , the Magistrate Judge recommended that all other claims in th e action be dismissed without prejudice pursuant to Federal Rule of Civil P r o c e d u r e 19(b) because the joinder of Fillmore and Noriyuki as necessary p a rtie s is not feasible. [Id.]. Finally, he recommended that Defendant Ed R o m a n Enterprises, Inc.'s (Roman) motion to dismiss be denied without p re ju d ic e as moot in view of the other recommended rulings. [Id.]. PROCEDURAL HISTORY & FACTUAL BACKGROUND O n June 15, 2009, the Plaintiff initiated this action against the D e fe n d a n ts based on federal question jurisdiction alleging Lanham Act vio la tio n s and supplemental state law claims. [Doc. 1]. In the Complaint, the P la in tiff alleged that Defendant Fillmore is a Japanese corporation with its p rin c ip a l place of business in Tokyo and that Noriyuki, its president, is a c itiz e n of Japan. [Id., at 2]. It is alleged that Roman is a Nevada corporation
2

with its principal place of business in Las Vegas, Nevada. [Id., at 2]. J u r is d ic tio n is based on the general allegation that the Defendants conduct b u s in e s s in North Carolina. [Id.]. Plaintiff claims that Noriyuki falsely or fraudulently obtained federal tra d e m a rk registrations for guitars, guitar components and amplifiers. [Id.]. N o riyu k i allegedly transferred those registrations to Defendant Fillmore which m a n u fa c tu re s and sells the guitars and related products bearing the allegedly fa ls e marks. [Id.]. Defendant Roman is Fillmore's sole distributor of the goods in the United States. [Id., at 5-7]. The goods are alleged to infringe the P la in tiff's marks. [Id.]. There are no allegations in the Complaint that either F illm o re or Noriyuki have any connection to the United States, and in p a rtic u la r, to North Carolina, except by virtue of a business relationship with R o m a n . [Id., at 2-7]. There are no specific allegations that Roman sells the g o o d s in North Carolina, only a general claim that the goods are marketed a n d sold in the United States, primarily through a website, www.edroman.com. [Id .]. On December 2, 2009, Defendant Roman moved to dismiss the action fo r lack of personal jurisdiction. [Doc. 14]. In response, the Plaintiff moved for le a ve to conduct limited discovery on the issue of Roman's contacts with N o rth Carolina. [Doc. 18]. The Magistrate Judge granted that motion and
3

a llo we d limited discovery. [Doc. 24]. O n March 26, 2010, Defendants Fillmore and Noriyuki also moved to d is m is s for lack of personal jurisdiction. [Doc. 28]. In support of that motion, N o riyu k i filed an affidavit in which he stated that he is a citizen and resident o f Japan and does not do any business in North Carolina and that he is the p re s id e n t of Fillmore, a Japanese company which does not do any business in North Carolina. [Doc. 28-1]. Noriyuki further stated that he and Fillmore (1) d o not have any presence of any type in North Carolina; (2) do not direct any a d v e r tis in g toward North Carolina customers or citizens; (3) do not own p ro p e rty in North Carolina; and (4) have never been in North Carolina. [Id.]. It was established that although Roman operates a website, no purchase of a n y product may be accomplished via that site and a telephone call to the R o m a n offices in Nevada is required to place an order. [Doc. 42-1]. O n June 1, 2010, the Magistrate Judge filed his Memorandum and R e c o m m e n d a tio n . [Doc. 45]. Four days before the objections were due, P la in tiff's attorneys moved for leave to withdraw. [Doc. 46]. On June 22, 2 0 1 0 , the Court denied counsel's motion to withdraw without prejudice and re q u ire d counsel to either file objections to the Memorandum and R e c o m m e n d a tio n or a statement that the Plaintiff did not wish to file o b je c tio n s . [Doc. 48, at 6-7]. On July 12, 2010, counsel filed objections.
4

[D o c . 49]. Counsel renewed the motion for leave to withdraw on July 13, 2010 a n d that motion is considered separately. [Doc. 51]. S TAN D AR D OF REVIEW T h e Defendants have not filed any objections to the Magistrate Judge's re c o m m e n d a tio n s . The Plaintiff has captioned its pleading as objections, but, a s discussed infra, has conceded that the Magistrate Judge's Memorandum a n d Recommendation is accurate. A district court reviews specific objections to a Memorandum and R e c o m m e n d a tio n under a de novo standard. 28 U.S.C. §636(b). "Parties filin g objections must specifically identify those findings objected to. Frivolous, c o n c lu s ive or general objections need not be considered by the district court." B a ttle v. United States Parole Commission, 834 F.2d 419, 421 (5th Cir.1987), o v e rru le d on other grounds Douglass v. United Ervs. Auto. Ass'n, 79 F.3d 1 4 1 5 (5 th Cir. 1996). T o the extent that a party asserts claims in the objections which were n o t asserted in support of or in opposition to the motion, de novo review is not wa rra n te d . Price v. Dixon, 961 F.Supp. 894 (E.D.N.C. 1997)(claims cannot b e raised for the first time in objections to a memorandum and r e c o m m e n d a tio n ) ; W e lls v. Shriners Hospital, 109 F.3d 198, 200 (4th Cir. 1 9 9 7 )(b o ile rp la te objections will not avoid the consequences of failing to
5

o b je c t altogether). This Court therefore does not conduct a de novo review o f those portions of the Memorandum and Recommendation to which nons p e c ific objections have been filed. "When personal jurisdiction is properly challenged under Rule 12(b)(2), th e jurisdictional question is to be resolved by the judge, with the burden on th e plaintiff." Carefirst of Md., Inc. v. Carefirst Pregnancy Crisis Ctrs., Inc., 3 3 4 F.3d 390, 396 (4 th Cir. 2003). At this stage of the litigation, the Plaintiff m u s t establish a prima facie case for the exercise of personal jurisdiction by p o in tin g to relevant evidence and affidavits. New Wellington Financial Corp. v . Flagship Resort Development Corp., 416 F.3d 290, 294 (4 th Cir. 2005). "A fe d e ra l district court may only exercise personal jurisdiction over a foreign [re s id e n t] if such jurisdiction is authorized by the long-arm statute of the state in which it sits and application of the long-arm statute is consistent with the d u e process clause of the Fourteenth Amendment." Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4 th Cir. 2009). In addition, maintaining th e lawsuit in this forum must be consistent with the traditional notions of fair p la y embodied in the due process clause. Id., at 278. T h e Plaintiff sought to establish jurisdiction alternatively based on F e d e r a l Rule of Civil Procedure 4(k)(2). That Rule provides that where a c la im arises under federal law, serving a summons on a defendant will
6

e s ta b lis h personal jurisdiction if the defendant is not subject to jurisdiction in a n y state court and exercising jurisdiction would be consistent with the United S ta te s Constitution and laws. Saudi v. Northrop Grumman Corp., 427 F.3d 2 7 1 , 275 (4 th Cir. 2005), certiorari denied 549 U.S. 820, 127 S.Ct. 115, 166 L .E d .2 d 34 (2006) (all three requirements must be met). S e c tio n 1406(a) of Title 28 provides that a district court in which a case is filed laying venue in the wrong district "shall dismiss, or if it be in the interest o f justice, transfer such case to any district ... in which it could have been b ro u g h t." (emphasis provided). Before the Magistrate Judge, the Plaintiff a rg u e d that transfer would not be appropriate. DISCUSSION T h e Magistrate Judge found that the Plaintiff did not carry her burden to s h o w a prima facie case of personal jurisdiction over Defendants Fillmore and N o riyu k i in North Carolina. [T]he Complaint as well as the evidentiary material submitted o u ts id e the initial pleadings reveals that [Fillmore and Noriyuki] h a ve had no contacts with North Carolina. Instead, it appears that p la in tiff is relying on the contacts that these defendants' d is trib u to r, [Roman], has had with the forum state, which has a ve rre d that it has sold no allegedly infringing guitars or other a lle g e d ly infringing goods to residents of North Carolina. [D o c . 45, at 10]. The Magistrate Judge also considered and rejected the P la in tiff's argument that the maintenance by Roman of a website constituted
7

s u ffic ie n t contacts for personal jurisdiction over Fillmore and Noriyuki. [Id., at 1 0 - 1 6 ]. The Plaintiff's alternative argument for personal jurisdiction pursuant to R u le 4(k)(2) was rejected because the Defendants conceded that personal ju ris d ic tio n over them existed in forum states other than North Carolina. [Doc. 4 2 , at 7]; Tetrev v. Pride Intern., Inc., 465 F.Supp.2d 555, 562 (D.S.C. 2006) (c o u rts in the Fourth Circuit have held that evidence that a defendant has c o n ta c ts with another state prevents a plaintiff from satisfying the second e le m e n t even without a concession). Because all three requirements of Rule 4 (k )(2 ) were not met, that rule did not provide a basis for jurisdiction. Base M e ta l Trading, Ltd. v. OJSC "Novokuznetsky Aluminum Factory," 283 F.3d 2 0 8 , 215 (4 th Cir. 2002), certiorari denied 537 U.S. 822, 123 S.Ct. 101, 154 L .E d .2 d 30 (2002). "In fact, [the Plaintiff] continue[d] to assert that personal ju ris d ic tio n over [Fillmore and Noriyuki] is proper in [North Carolina]," a p o s itio n inconsistent with the argument for applying Rule 4(k)(2). Id. The Magistrate Judge then noted that the Plaintiff's Complaint is based o n allegations that Noriyuki obtained false trademark registrations which are u s e d by Fillmore to manufacture products that infringe on the Plaintiff's marks. [D o c . 45, at 17]. The infringing products are marketed and sold by Roman. [Id .]. Thus, in order to find any liability on the part of Roman, the Plaintiff must
8

firs t obtain relief against Noriyuki and Fillmore. [Id.]. The Magistrate Judge th e re fo re concluded that they are necessary parties whose joinder in this la ws u it is not feasible. [Id., citing Fed.R.Civ.P. 19(b)]. He thus recommended d is m is s a l of the entire action without prejudice, a recommendation which does n o t leave the Plaintiff without the possibility of her day in court in the proper fo ru m . [Id.]. T h e Magistrate Judge recommended the denial of Roman's motion to d is m is s , and its alternative motion to transfer venue, as moot in light of the a b o ve recommended rulings. In addition, because these recommended

ru lin g s would dispose of all issues, the Magistrate Judge did not consider the m o tio n s pursuant to Rule 12(b)(3), (4) & (5). In her "objection," the Plaintiff states: R e c o r d s of [Roman] product sales in North Carolina were solely in the custody and control of [Roman]. The convenient d is a p p e a ra n c e of any and all [Roman] sales records pre-dating 2 0 0 8 , makes it practically impossible for Plaintiff to dispute the s e lf-s e rvin g allegations of Roman's affidavit. Therefore, although th e Plaintiff is disappointed in the Recommendation's willingness to assume lack of personal jurisdiction as a result of [Roman's] a lle g e d loss of all its sales data prior to 2008, Plaintiff cannot p ro d u c e evidence to refute the Recommendation and its findings a s to this Court's [lack of] jurisdiction over the Japanese D e fe n d a n ts [Fillmore and Noriyuki]. [D o c . 49, at 4]. The Court finds this is not a true objection but instead a c o n c e s s io n by the Plaintiff that the Rule 12(b)(2) motion of Fillmore and
9

N o riyu k i should be granted.

No other objections to any portion of the

M e m o ra n d u m and Recommendation are made. In further support of the Plaintiff's concession, she requests that the a c tio n be transferred to the District of Nevada rather than dismissed. Although neither the Plaintiff nor the Japanese Defendants moved fo r transfer of the action, [Roman] has moved the Court for tra n s fe r of the action in the [Roman] motions. Therefore, although P la in tiff initially opposed [Roman's] motion to transfer this action, s h e now respectfully requests this Court's reconsideration of [R o m a n 's ] request to transfer in the interests of justice and e c o n o m y of judicial resources. [Doc. 49, at 5]. The Court notes, however, that Plaintiff has not shown that Nevada wo u ld be an appropriate forum in which to assert personal jurisdiction over F illm o re and Noriyuki. Although the Magistrate Judge commented that

ju ris d ic tio n over those defendants "may well" exist in Nevada, he did not make s u c h a finding. [Doc. 45, at 17]. The Plaintiff has failed to show that personal ju ris d ic tio n over these defendants exists in Nevada and therefore transfer to th a t District is inappropriate. Saudi, 427 F.3d at 277 (transfer is only

a p p ro p ria te if the movant shows that personal jurisdiction exists in the a lte rn a tive forum); accord, In re Carefirst of Maryland, Inc., 305 F.3d 253, 2555 6 (4 th Cir. 2002). The "mere assertion of potential jurisdiction" is insufficient. S a u d i, 427 F.3d at 277.
10

B e fo re the Magistrate Judge the Plaintiff strongly opposed transfer of th e action to Nevada. [Doc. 25, at 12-15]. The Magistrate Judge re c o m m e n d e d that Roman's motion be denied in its entirety, including the a lte rn a tive motion to transfer. Roman has not filed any objections to the re c o m m e n d a tio n that its motion be denied. Nor has the Plaintiff filed an o b je c tio n to that recommendation; instead, the Plaintiff asks that the District C o u rt "reconsider" Roman's motion. Saudi, 427 F.3d at 277. (noting the p la in tiff never filed a motion to transfer and only raised the issue during a h e a rin g ). This does not rise to the level of an objection and the Court need n o t address an issue raised by the Plaintiff for the first time before this Court. S a n d vik Intellectual Property AB v. Kennametal, Inc., 2010 W L 1924504 (W .D .N .C . 2010), citing Price v. Dixon, 961 F.Supp. at 894. (claims cannot be r a is e d for the first time in objections to a memorandum and recommendation). "[B ]y precluding ... review of any issue not contained in objections, [the waiver ru le ] prevents a litigant from `sandbagging' the district judge by failing to object a n d then appealing." Wells v. Shriners Hosp., 109 F.3d 198, 200 (4 th Cir. 1 9 9 7 ), quoting Thomas v. Arn, 474 U.S. 140, 147, 106 S.Ct. 466, 88 L.Ed.2d 4 3 5 (1985). T h e Court therefore finds that the Plaintiff has not filed true objections b u t instead has conceded that the motion to dismiss of Fillmore and Noriyuki
11

fo r lack of personal jurisdiction should be granted. The Plaintiff also has not o b je c te d to the Magistrate Judge's recommendation that Roman's motion to d is m is s be denied. The suggestion contained within the purported objections th a t this Court "reconsider" Roman's motion to transfer is not a true objection. T h u s , this Court need "`only satisfy itself that there is no clear error on the face o f the record in order to accept the recommendation.'" Diamond v. Colonial L ife & Accident Ins. Co., 416 F.3d 310, 315 (4 th Cir. 2005), certiorari denied 5 4 6 U.S. 1091, 126 S.Ct. 1033, 163 L.Ed.2d 855 (2006). th e Court adopts the recommendation. ORDER IT IS, THEREFORE, ORDERED as follows: 1. D e fe n d a n ts , Fillmore Company, Ltd. and Yusa Noriyuki's Notice of M o tio n and Motion to Dismiss Plaintiff's Complaint pursuant to F e d .R .C iv.P . 12(b)(2), (3) and (5) [Doc. 28; Doc. 41] is hereby G R AN TE D as to the motion to dismiss pursuant to Rule 12(b)(2) and D E N IE D as moot as to the motions to dismiss pursuant to Rule 12(b)(3) & (5) and this action against these Defendants is hereby DISMISSED W ITH O U T PREJUDICE. 2. T h is action is hereby DISMISSED WITHOUT PREJUDICE pursuant to F e d e r a l Rule of Civil Procedure 19(b).
12

Having done so,

3.

D e fe n d a n t, Ed Roman Enterprises, Inc.'s Notice of Motion and Motion to Dismiss Plaintiff's Complaint pursuant to Fed.R.Civ.P. 12(b)(2), (3) a n d (5), or in the alternative, to Transfer this Action to the District of N e va d a , pursuant to 28 U.S.C. §1404(a) [Doc. 14] is hereby DENIED W ITH O U T PREJUDICE as moot.
Signed: July 16, 2010

13