J & J Martindale Ventures, LLC v. East End Brewing Company, Inc.
ORDER DISMISSING CASE, The Court GRANTS Defendants Motion to Dismiss and DENIES AS MOOT Defendants Motion to Transfer. This case is DISMISSED WITHOUT PREJUDICE. Signed by Judge David A. Ezra. (wg)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
J & J MARTINDALE VENTURES,
EAST END BREWING COMPANY,
ORDER GRANTING MOTION TO DISMISS FOR LACK OF PERSONAL
JURISDICTION; DENYING AS MOOT MOTION TO TRANSFER
Before the Court is Defendant East End Brewing Company, Inc.’s
(“East End”) Motion to Dismiss for Lack of Personal Jurisdiction and Alternative
Motion to Transfer to the Eastern District of Pennsylvania (Dkt. # 11). Pursuant to
Local Rule 7(h), the Court finds this matter suitable for disposition without a
hearing. After carefully considering the memoranda in support of and in
opposition to the Motion, the Court GRANTS Defendant’s Motion to Dismiss and
DENIES AS MOOT Defendant’s Motion to Transfer (Dkt. # 11).
Plaintiff J&J Martindale Ventures, LLC (“J&J”) is a limited liability
company whose principal place of business is San Antonio, Texas. (“Compl.,”
Dkt. # 1 ¶ 1.) East End is a Pennsylvania corporation whose principal place of
business is Pittsburgh, Pennsylvania. (Id. ¶ 2.)
According to J&J, it was created on July 31, 2012, to provide bar and
restaurant services under the name BIG HOPS. (Compl. ¶ 6.) J&J opened its first
BIG HOPS location in San Antonio, Texas on March 18, 2013, and currently
operates BIG HOPS at three different locations in San Antonio, Texas. (Id. ¶¶ 6–
8.) J&J sells various bar-related paraphernalia, including beer glasses and
growlers, bearing the BIG HOPS label, and also sells wearable merchandise such
as shirts and caps bearing the label. (Id. ¶ 10.) On October 18, 2013, J&J filed
Trademark Application No. 86/095,951 with the United States Patent and
Trademark Office (“USPTO”) to register the mark BIG HOPS for “restaurant and
bar services.” (Compl. ¶ 14.) On June 3, 2014, the USPTO issued Registration
No. 4,543,126 to J&J for BIG HOPS. (Dkt. # 1, Ex. A.)
East End is a microbrewery in Pittsburgh, Pennsylvania, and was
created on February 9, 2004. (Compl. ¶ 17–18.) East End operates a brewpub and
taproom at one location in Pittsburgh, and a growler shop and taproom in a second
Pittsburgh location. (Dkt. # 11 at 3.) East End does not operate any other business
locations. Sometime after February 9, 2004, East End began brewing and selling a
beer called BIG HOP in Pennsylvania. (Id.; Compl. ¶ 17–18.) 1 According to J&J,
East End filed Trademark Application No. 86/604,350 with the USPTO on April
21, 2015 to register the mark BIG HOP for “beers, ales and stout.” (Id. ¶ 19.) The
USPTO rejected the application, based upon J&J’s existing Registration No.
4,543,126. (Id. ¶ 20.)
Following the USPTO’s rejection, counsel for East End sent an e-mail
to Rob Martindale, an individual associated with J&J, seeking to create a
coexistence agreement for the trademarked BIG HOPS name, and the name BIG
HOP. (Dkt. # 1, Ex. B.) After learning that Mr. Martindale was represented by
counsel, counsel for East End sent a second e-mail to counsel for J&J, again
offering to prepare a coexistence agreement for BIG HOPS and BIG HOP. (Dkt.
# 1, Ex. C.) In relevant part, the e-mail stated as follows:
Your client’s trademark registration for BIG HOPS, based on use
since 2013, and covering restaurant and bar services, was cited against
my client’s recent U.S. trademark application. As our client has used
BIG HOP in commerce prior to your client, its registration is
vulnerable to cancellation should our client bring a petition to cancel
it based on its prior rights.
However, rather than challenging your client’s registration based on
our client’s prior rights in BIG HOP, our client would prefer to settle
this matter amicably. . . .
(Dkt. # 1, Ex. 3.) East End’s counsel sent a third e-mail to J&J’s Counsel,
East End brews and sells approximately 35 varieties of beer. (Dkt. # 11 at 3.)
attaching sales reports to demonstrate that East End has sold BIG HOP products
since 2004. (Dkt. # 1, Ex. 4.) 2
J&J construed this correspondence as a bad-faith threat, and brought
suit against East End in the Western District of Texas, seeking declaratory
judgment that: (1) J&J is entitled to exclusive rights to the mark BIG HOPS,
excepting the area forming a one-hundred mile radius from Pittsburgh,
Pennsylvania (Compl. ¶¶ 33–36); (2) BIG HOPS does not violate the Lanham Act,
15 U.S.C. § 1051 et seq., or otherwise constitute unfair competition or trademark
infringement (id. ¶¶ 37–40); and (3) any offering by East End of “beers, ales and
stout” outside the one-hundred mile radius from Pittsburgh constitutes trademark
infringement (id. ¶¶ 41–45) and unfair competition (id. ¶¶ 46–50). J&J also seeks
all of Defendant’s profits for use of the BIG HOP mark outside of Pittsburgh and
East End argues that the e-mails are settlement negotiations and should be
excluded from consideration pursuant to Federal Rule of Evidence (“FRE”) 408.
FRE 408 prevents the admission of information shared during settlement
negotiations “to prove or disprove the validity or amount of a disputed claim or to
impeach by a prior inconsistent statement.” Fed. R. Evid. 408(a). The
correspondence between East End and J&J is akin to settlement negotiations. See
Lyondell Chem. Co. v. Occidental Chem. Corp., 608 F.3d 284, 295 (5th Cir. 2010)
(“Litigation need not have commenced for Rule 408 to apply.”) Nonetheless, the
Court will consider this correspondence, because it is not used here to prove or
disprove the validity of the trademark claim, and forms the only plausible basis for
a finding of personal jurisdiction.
the one-hundred mile radius from Pittsburgh pre-dating its June 3, 2014 issuance of
registration, as well as punitive damages, and attorneys’ fees and costs. (Id. at 10–
On January 25, 2016, East End timely filed the instant Motion to
Dismiss for Lack of Personal Jurisdiction and Alternative Motion to Transfer to the
Eastern District of Pennsylvania. (Dkt. # 11.) J&J filed a response on February 8,
2016 (Dkt. # 12), and East End filed a reply on February 18, 2016 (Dkt. # 14).
Where a nonresident defendant moves to dismiss a suit for lack of
personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), a court
must determine whether it has personal jurisdiction over the defendant by “first
determin[ing] whether the long arm statute of the forum state permits exercise of
jurisdiction[,] . . . then determin[ing] whether such exercise comports with due
process.” Ham v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir. 1993). “The
Texas long-arm statute extends to the limits of the Constitution,” and a Texas
court’s “inquiry is therefore limited to the reach of the Fourteenth Amendment’s
Due Process Clause.” Stroman Realty, Inc. v. Antt, 528 F.3d 382, 385 (5th Cir.
2008). “The Fourteenth Amendment allows a court to assert personal jurisdiction
over defendants who have meaningful ‘contacts, ties, or relations’ with the forum
state. Such contacts can give rise to general or specific jurisdiction.” Id. (quoting
Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). However, the
Fourteenth Amendment also “limit[s] the power of a State to assert in personam
jurisdiction over a nonresident defendant.” Helicopteros Nactionales de Colombia,
S.A. v. Hall, 466 U.S. 408, 413–414 (1984) (citing Pennoyer v. Neff, 95 U.S. 714
Where a defendant has “‘continuous and systematic general business
contacts’ with the forum state,” the forum may exercise general personal
jurisdiction over the defendant. Antt, 528 F.3d at 385 (quoting Helicopteros, 466
U.S. at 415 n. 9) (finding the Texas district court improperly exercised general
jurisdiction over officials from California and Florida who did not have an office in
Texas or sufficient contacts with Texas giving rise to general jurisdiction). Where
a Defendant’s contacts “are less pervasive, courts may exercise ‘specific
jurisdiction’ in ‘a suit arising out of or related to the defendant’s contact with the
forum.’” Antt, 528 F.3d at 385 (quoting Helicopteros, 466 U.S. at 415 n. 9).
The plaintiff bears the burden of proof to demonstrate personal
jurisdiction. Nuovo Pignone, PsA v. Storman Asia M/V, 310 F.3d 374, 378 (5th
Cir. 2002); Elly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 854 (5th Cir.
2000). Courts in the Fifth Circuit evaluate whether exercise of both general and
specific personal jurisdiction is consistent with the Due Process Clause by applying
a three-part test, considering:
(1) [W]hether the defendant has minimum contacts with the forum
state, i.e., whether it purposely directed its activities toward the forum
state or purposely availed itself of the privileges of conducting
activities there; (2) whether the plaintiff’s cause of action arises out of
or results from the defendant’s forum-related contacts; and
(3) whether the exercise of personal jurisdiction is fair and reasonable.
Nuovo Pignone, 310 F.3d at 378 (citing Burger King Corp. v. Rudzewicz, 471 U.S.
462, 474 (1985)). Where a defendant’s contacts with the forum state are
insufficient to satisfy the requirements of the Due Process Clause of the Fourteenth
Amendment, the court must dismiss the case for lack of personal jurisdiction. Id.
East End asserts that this Court cannot exercise personal jurisdiction,
because it does not have sufficient minimum contacts with Texas to justify the
exercise of jurisdiction. (Dkt. # 11.) East End does not own or maintain offices,
facilities, or real or personal property in Texas. (“Smith Decl.,” Dkt. # 11, Ex. 1,
¶¶ 8, 16, 17.) East End does not maintain a telephone in Texas, pay taxes or file
documents with any agencies in Texas, have any contracts in Texas, conduct any
business in Texas, distribute printed advertisements in Texas, or otherwise market
its products in Texas. (Id. ¶¶ 19–21.) East End maintains a website through which
it sells merchandise, and has sold a total of four pieces of merchandise to Texas
residents; none of the merchandise has borne the BIG HOP logo. (Id. ¶¶ 23–25.)
East End is only licensed to sell beer in the Commonwealth of Pennsylvania, and
does not have a permit or license to sell its beers in Texas. (Id. ¶¶ 10–15.)
Plaintiff does not dispute any of these facts. (Dkt. # 12.)
I. Whether East End is subject to general personal jurisdiction
For the Court to find it has general personal jurisdiction over a
defendant, the plaintiff must make a showing that the defendant has “‘continuous
and systematic general business contacts’ with the forum state.” Antt, 528 F.3d at
385 (quoting Helicopteros, 466 U.S. at 415, n. 9.). J&J does not offer any fact or
argument that the Court has general personal jurisdiction over East End, and
accordingly fails to make a prima facie case for general jurisdiction. (See Dkt.
# 12.) Accordingly, the Court finds there are insufficient contacts between Texas
and East End to satisfy the requirements of the Due Process Clause of the
Fourteenth Amendment, and cannot constitutionally exercise general jurisdiction
over East End.
II. Whether East End is subject to specific personal jurisdiction
“Specific jurisdiction exists where the ‘litigation results from the
alleged injuries that arise out of or relate to’ the defendant’s activities in the forum
state.” Nuovo Pignone, 310 F.3d at 379, n. 3 (quoting Burger King, 471 U.S. at
472). The Court should determine whether Defendant is subject to personal
jurisdiction by evaluating whether it has such minimum contacts with the forum
state that it “could reasonably anticipate being haled into federal court.” Antt, 528
F.3d at 386 (citing World Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 297
(1980)). These minimum contacts must be such that they do “not offend
‘traditional notions of fair play and substantial justice.’” Ham, 4 F.3d at 415
(quoting Asahi Metal Indus. v. Superior Court, 480 U.S. 102, 105 (1987)). The
Court will apply the Fifth Circuit’s three-part test to determine whether it is
entitled to exercise personal jurisdiction over East End.
A. Whether East End has established minimum contacts with Texas
A party has sufficient minimum contacts justifying the exercise of
specific personal jurisdiction if it takes “some act whereby [it] ‘purposely avails
itself of the privilege of conducting activities within the forum state, thus invoking
the benefits and protections of its laws.’” Nuovo Pignone, 310 F.3d at 379
(quoting Burger King, 471 U.S. at 474) (finding an agreement to supply a vessel
equipped to deliver a multi-million dollar shipment of goods in Louisiana
established a sufficient “minimum contact” with Louisiana to justify the exercise
of specific personal jurisdiction over causes of action arising out of that
agreement). A party need only engage in a “single substantial act” to justify “the
exercise of specific jurisdiction in an action arising from or related to such acts.”
Ham, 4 F.3d at 415–16. However, this act must be “[p]urposeful forum-directed
activity.” Id. at 415.
J&J argues that East End has sufficient minimum contacts with Texas
to justify specific personal jurisdiction based upon the Fifth Circuit’s unpublished
opinion in SGS-Thomson Micro-Electronics, Inc. v. Ferris, 55 F.3d 632 (5th Cir.
1995). The plaintiff in Ferris sued the defendant, a California resident, in the
Northern District of Texas after receiving a letter from defendant requesting the
payment of money in exchange for use of his copyrighted ideas. Id. at *1. The
defendant’s letter cited court holdings and explicitly threatened litigation if the
plaintiff did not pay him $19,000.00. Id. The court found that the letter, though
only a single action, was “[p]urposeful forum-directed activity,” and a “substantial
act,” permitting “the exercise of specific jurisdiction in an action arising from or
related to” the letter. Id. (quoting Ham, 4 F.3d at 415). However, the Fifth Circuit
found that sufficient minimum contacts arose not from copyright issues raised by
the letter, but from the letter’s allegedly tortious harassment of a forum resident.
Ferris, 55 F.3d at *3 (finding that defendant’s letter explicitly threatened litigation
if plaintiff did not pay a sum of money, and such contact gave the court jurisdiction
over plaintiff’s tortious harassment claim). Ferris is distinguishable from the facts
of the instant case. J&J does not allege a cause of action for any sort of unlawful
conduct arising out of East End’s letters, but rather seeks declaratory judgment that
East End has infringed upon its trademark. In so doing, J&J argues that East End’s
e-mails are sufficient minimum contacts to justify the exercise of personal
jurisdiction in a trademark infringement action.
The Fifth Circuit has found merely sending a letter “is insufficient to
establish personal jurisdiction” where the letter does not put “a party on notice that
it might be sued.” Antt, 528 F.3d at 386–87 (finding that sending a cease-anddesist order and subsequently corresponding with plaintiff’s attorneys did not
create sufficient contacts to support exercise of specific jurisdiction, where
Defendant “did not avail itself of any of Texas’s protections” by sending the order
or engaging in subsequent correspondence). In Ham, for example, the defendant, a
California resident, sent a letter to plaintiff, claiming plaintiff’s song infringed
upon his own copyrighted song. 4 F.3d at 415. The parties exchanged conflicting
expert musicology reports, and the plaintiff filed suit for declaratory judgment.
The Court, however, dismissed the case, finding that the resolution of the
declaratory judgment action “depends solely upon whether [the song] infringed
copyrights owned by [defendant],” and that sending a letter, even where the letter
“forms the basis for [plaintiff’s] allegations about the existence of a live
controversy, in no way relates to the merits of the copyright question and thus does
not support personal jurisdiction in Texas.” Ham, 4 F.3d at 416.
Likewise, in Sablatura v. Kokopelli, Inc., the plaintiff sued defendant,
whose principal place of business was New Hampshire, for declaratory judgment
in the Southern District of Texas after receiving a cease-and-desist letter alleging
trademark infringement. No. H–10–472, 2010 WL 4394250, at *1 (S.D. Tex. Oct.
29, 2010). The court found that mere receipt of such a letter was an insufficient
contact to permit the Court to exercise personal jurisdiction over the trademark
The reasoning of Sablatura and Ham is persuasive here. J&J does not
plead “tort causes of action . . . based upon the content of [East End’s] letter.”
Sablatura, 2010 WL 4394250, at *2. Rather, J&J argues that East End’s series of
three e-mails, through which it attempted to negotiate an agreement regarding the
scope of each party’s rights to use the marks BIG HOPS and BIG HOP, constitute
sufficient contacts to bring a trademark suit. While East End’s e-mails state its
preference to avoid challenging J&J’s trademark before the USPTO—an action
East End is legally entitled to take—the statements are insufficient to give rise to
specific personal jurisdiction in a declaratory judgment suit for trademark
infringement. Accordingly, J&J has not met its burden to demonstrate that East
End has made sufficient contacts with the Western District of Texas to satisfy the
requirements of the Due Process Clause of the Fourteenth Amendment.
B. Whether the cause of action arises out of forum-related contacts
As explained above, the cause of action does not arise directly from
East End’s forum-related contacts. See e.g., Ham, 4 F.3d at 415. East End’s beer
production and sales in Pennsylvania form the basis for the controversy between
the parties; the three e-mails East End sent to J&J may have alerted J&J to the
existence of the controversy, but were not themselves forum-related contacts by
which East End availed itself of the protections of Texas. East End states, and J&J
does not dispute, that East End has never sold BIG HOP beer outside of the state of
Pennsylvania, and has only made four website sales of East End merchandise to
Texas residents, none of which bore the BIG HOP logo. (Smith Decl. ¶¶ 10–15,
23–25; Dkt. # 12.) Accordingly, J&J’s action for declaratory judgment does not
arise out of East End’s contacts with Texas, and exercise of jurisdiction would not
satisfy the requirements of the Due Process Clause of the Fourteenth Amendment.
C. Whether exercise of personal jurisdiction is fair and reasonable
Where a plaintiff demonstrates sufficient “minimum contacts between
the defendant and the forum state, the burden of proof shifts to the defendant to
show that the assertion of jurisdiction is unfair and unreasonable.” Nuovo
Pignone, 310 F.3d at 382. When determining whether exercise of jurisdiction is
fair, the court should consider, among other things, “the burden on the nonresident
defendant.” Id. (citing Felch v. Transportes Lar-Mex SA de CV, 92 F.3d 320, 324
(5th Cir. 1996)). Scott Smith, the Vice-President of East End, provided a
declaration explaining that East End is a small, family-owned business which
would be harmed by the cost of litigating in Texas. (Smith Decl. ¶ 30.) According
to Smith, East End’s offices, business records, and witnesses are located outside of
the Western District of Texas. (Id. ¶¶ 31–35.) Accordingly, these factors weigh
against assertion of jurisdiction over East End.
J&J failed to meet its burden of proof to demonstrate that East End
had sufficient minimum contacts with the state of Texas such that it would
reasonably anticipate being haled to Court in the Western District of Texas;
likewise, J&J failed to demonstrate that the instant controversy arose out of East
End’s contacts with Texas. Sending e-mails to negotiate trademark rights, where
East End did not sell any items bearing the BIG HOP mark in the state of Texas,
and has not otherwise engaged in any activity in the state of Texas that would
interfere with the BIG HOPS trademark, is not sufficient activity to create the
necessary minimum contacts with Texas for this Court to exercise jurisdiction over
it. Further, J&J’s cause of action does not arise out of East End’s actual contacts
with the state of Texas. Accordingly, J&J failed to meet its burden to show that
the exercise of jurisdiction comports with the Due Process Clause of the
Fourteenth Amendment, and this Court has no personal jurisdiction over East End.
Because this Court does not have jurisdiction over the matter, it need not address
East End’s Alternate Motion to Transfer to the Eastern District of Pennsylvania
(Dkt. # 11).
For the reasons stated above, this Court does not have personal
jurisdiction over East End. The Motion to Dismiss is GRANTED, and the
Alternate Motion to Transfer is DENIED AS MOOT (Dkt. # 11). This case is
DISMISSED WITHOUT PREJUDICE.
IT IS SO ORDERED.
DATED: San Antonio, Texas, April 27, 2016.
David Alan Ezra
Senior United States Distict Judge
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