Opinion
Civil Action No. 3:99-CV-2842-G.
March 7, 2000.
MEMORANDUM ORDER
Before the court is the motion of the defendant VCC, Inc. a/k/a V.C.C., Inc. ("VCC") to dismiss the plaintiff's claims against it for lack of personal jurisdiction, for improper venue, for failure to state a cognizable claim, or, in the alternative, to transfer venue. For the reasons discussed below, the motion to dismiss for lack of personal jurisdiction is granted, while the other motions are denied as moot.
I. BACKGROUND
This is an action for false designation of origin. First Amended Complaint ("Complaint") ¶ 1. Plaintiff Vratsinas Construction Company ("Vratsinas") is an Arkansas corporation with its principal place of business in Little Rock, Arkansas. Id. ¶ 2. VCC is an Arkansas corporation with its office in Rogers, Arkansas. Id. ¶ 3. VCC does not engage in business in Texas, nor does it have any employees, agents or corporate offices in Texas. See Memorandum in Support of Motion to Dismiss Under Rules 12(b)(2), 12(b)(3), and 12(b)(6) and, Alternatively, Motion to Transfer Venue and For a More Definite Statement Under Rules 9(b), 9(f) and 12(e) ("Memorandum") ¶ 5. VCC has not entered into any contracts which are performable in whole or in part within Texas. Id.
Vratsinas is the owner of the Arkansas Service Marks "VCC, A HARD HAT TO FOLLOW," and "VCC, VRATSINAS CONSTRUCTION COMPANY." Complaint ¶¶ 6, 7; also Certificates of Trademark Registration, attached as Exhibits A and B to Complaint. In this suit, Vratsinas seeks relief against VCC on the grounds that VCC is selling and advertising services using Vratsinas's marks. Id. ¶ 14. Vratsinas is charging VCC with, inter alia, common law trademark infringement and unfair competition. Id. ¶¶ 25-31. VCC now moves the court to dismiss this case, among other things, for lack of personal jurisdiction. See generally Motion to Dismiss Under Rules 12(b)(2), 12(b)(3), and 12(b)(6) and, Alternatively, Motion to Transfer Venue and for a More Definite Statement Under Rules 9(b), 9(f) and 12(e) ("Motion to Dismiss").
II. ANALYSIS A. Factual Standard: Prima Facie Case
When a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the trial court's jurisdiction over the nonresident. Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985); see also Ham v. La Cienega Music Company, 4 F.3d 413, 415 (5th Cir. 1993); D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg Inc., 754 F.2d 542, 545 (5th Cir. 1985) (citations omitted); DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1270 (5th Cir. 1983) (citation omitted). If the district court chooses to decide the matter without an evidentiary hearing, the plaintiff may meet its burden by presenting a prima facie case for personal jurisdiction. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.) (citing Thompson v. Chrysler Motors Corporation, 755 F.2d 1162, 1165 (5th Cir. 1985)), cert. denied, 513 U.S. 930 (1994).
The court will take the allegations of the complaint as true, except where they are "controverted by opposing affidavits," and the court will resolve all conflicts in the facts in favor of the plaintiff. Thompson, 755 F.2d at 1165 (citing DeMelo, 711 F.2d at 1270-71). In making its determination, the court may consider "affidavits, interrogatories, depositions, oral testimony, or any combination of... recognized [discovery] methods." Id. (citing Washington v. Norton Manufacturing, Inc., 588 F.2d 441, 443 (5th Cir.) [ cert. denied, 442 U.S. 942 (1979)] ); Stuart, 772 F.2d at 1192.
B. Legal Standard
In diversity cases, a defendant is amenable to the personal jurisdiction of a federal court to the same extent permitted a state court in the state where the federal court sits. DeMelo, 711 F.2d at 1264 (citations omitted). Two preconditions must be satisfied to allow personal jurisdiction over a nonresident defendant: (1) the nonresident must be amenable to service of process under the forum state's long-arm statute; and (2) if the state jurisdictional test is met, the assertion of jurisdiction must be consistent with the Fourteenth Amendment due process clause. Jones v. Petty-Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1067 (5th Cir.) (citing DeMelo, 711 F.2d at 1265), cert. denied, 506 U.S. 867 (1992). Because the Texas long-arm statute confers jurisdiction to the limits of the federal constitution, U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977), cert. denied, 434 U.S. 1063 (1978); see also Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990), "a nonresident's amenability to personal jurisdiction under the Texas long-arm statute collapses into a federal-style inquiry as to whether jurisdiction comports with federal constitutional guarantees." Bullion v. Gillespie, 895 F.2d 213, 216 (5th Cir. 1990) (citations omitted); see also Aviles v. Kunkle, 978 F.2d 201, 204 (5th Cir. 1992) (citations omitted).
C. Due Process Requirements
Due process requires the satisfaction of two elements to exercise personal jurisdiction over a nonresident defendant: (1) the nonresident must have some minimum contact with the forum which results from an affirmative act on its part such that the nonresident defendant could anticipate being haled into the courts of the forum state; and (2) it must be fair or reasonable to require the nonresident to defend the suit in the forum state. Burger King Corporation v. Rudzewicz, 471 U.S. 462, 471-77 (1985); C H Transportation Company, Inc. v. Jensen and Reynolds Construction Company, 719 F.2d 1267, 1269 (5th Cir. 1983) (citations omitted), cert. denied, 466 U.S. 945 (1984). The Due Process Clause ensures that persons have "fair warning that a particular activity may subject a person to the jurisdiction of a foreign sovereign." Shaffer v. Heitner, 433 U.S. 186, 218 (1977) (Stevens, J., concurring).
I. Minimum Contacts
To establish minimum contacts, a nonresident defendant must do some act by which it "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958) (citing International Shoe Company v. Washington, 326 U.S. 310, 319 (1945)). However, the unilateral activity of one asserting a relationship with the nonresident defendant does not satisfy this requirement. World-Wide Volkswagen Corporation v. Woodson, 444 U.S. 286, 298 (1980) (quoting Hanson, 357 U.S. at 253); Stuart, 772 F.2d at 1190. In determining whether the exercise of jurisdiction is appropriate, the Supreme Court has focused less on presence in the forum state as a means to establish jurisdiction and looked increasingly to whether a defendant's contacts with the forum make it reasonable to require the defendant to defend the particular suit in that forum. Shaffer, 433 U.S. at 203.
Two types of in personam jurisdiction may be exercised over a nonresident defendant: specific and general. Specific jurisdiction exists if the cause of action is related to, or arises out of, the defendant's contacts with the forum, and those contacts meet the due process standard. Ruston Gas Turbines, Inc. v. Donaldson Company, Inc., 9 F.3d 415, 418-19 (5th Cir. 1993); Stuart, 772 F.2d at 1190. "When a court exercises personal jurisdiction over a defendant based on contacts with the forum related to the particular controversy, the court is exercising `specific jurisdiction'" Holt Oil Gas Corporation v. Harvey, 801 F.2d 773, 777 (5th Cir. 1986) (citations omitted), cert. denied, 481 U.S. 1015 (1987). General jurisdiction, on the other hand, may be found when the claim is unrelated to the nonresident's contacts with the forum but where those contacts are "continuous and systematic." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984).
Under either a specific or general jurisdiction analysis, however, "the constitutional touchstone remains whether the defendant purposefully established `minimum contacts' in the forum [s]tate." Burger King, 471 U.S. at 474 (citing International Shoe, 326 U.S. at 316). The "purposeful availment" requirement of the minimum contacts inquiry "ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts . . . or of the `unilateral activity of another party or a third person.'" Id. at 475 (citations omitted). A plaintiff must establish a substantial connection between the nonresident defendant and the forum state. Jones, 954 F.2d at 1068 n. 9, Bearry v. Beech Aircraft Corporation, 818 F.2d 370, 374 (5th Cir. 1987) (citing Burger King, 471 U.S. at 475 n. 18); McGee v. International Life Insurance Company, 355 U.S. 220, 223 (1957)).
A court must consider all factors when making the purposeful availment inquiry — "no single factor, particularly the number of contacts, is determinative." Stuart, 772 F.2d at 1192. "[W]hether the minimum contacts are sufficient to justify subjection of the non-resident to suit in the forum is determined not on a mechanical and quantitative test, but rather under the particular facts upon the quality and nature of the activity with relation to the forum state." Mississippi Interstate Express, Inc. v. Transpo, Inc., 681 F.2d 1003, 1006 (5th Cir. 1982); see also D.J. Investments, 754 F.2d at 547.
a. Specific Jurisdiction
Vratsinas seems to be arguing that VCC is subject to personal jurisdiction in Texas because a publication known as The Dodge Reports placed VCC's name, telephone number and fax number in a space in its publication that should have been reserved for Vratsinas. See Plaintiff's Supplemental Response to Defendant's Motion to Dismiss Under Rules 12(b)(2), 12(b)(3), and 12(b)(6) and, Alternatively, Motion to Transfer Venue and For a More Definite Statement Under Rules 9(b), 9(f), and 12(c) ("Supplemental Response") ¶¶ 9, 10. This, in turn, allegedly led to actual confusion among some subcontractors in Abilene, Texas, where Vratsinas was undertaking a construction project. Id. ¶ 11, 12. Several of these subcontractors then mistakenly submitted bids for Vratsinas's Abilene construction project to VCC. Memorandum in Support of Plaintiff's Supplemental Response ("Supplemental Memorandum") at 3.
Vratsinas's arguments to the contrary notwithstanding, VCC's contacts with this forum fall well short of those required for this court to exercise personal jurisdiction over it in this suit. For a forum to properly assert specific personal jurisdiction over a nonresident defendant, the defendant must have "personally directed" its activities at the residents of the forum, and the litigation must result from alleged injuries that "arise out of or relate to" the defendant's activities directed at the forum. Aviles, 978 F.2d at 204 (quoting Burger King, 471 U.S. at 474). The publication of one report by a third party, The Dodge Reports, does not constitute an activity of VCC that was "directed" at Texas.
The facts of this case are similar to those of Wilson, 20 F.3d at 644. There, the Court of Appeals found that the defendants, who spoke to a Texas newspaper reporter from their home states of Indiana and Iowa, and whose comments were published in a Texas newspaper, had not had sufficient contact with Texas to subject them to the jurisdiction of the Texas court. Id. at 646, 649. Like Vratsinas, Wilson placed great weight on the premise that the tort in question (libel in Wilson, trademark infringement here) was deemed to have occurred in the jurisdiction in which he sued. Id. at 648; Supplemental Response ¶ 10. The Fifth Circuit noted that "[t]his principle alone, however, will not win the day for Wilson. That the tort is deemed to have occurred in whole or in part in Texas is simply not dispositive of whether jurisdiction is appropriate." Id.; also World-Wide Volkswagen, 444 U.S. at 288-89 (holding that, although the tort in issue occurred in Oklahoma, New York defendant was not subject to personal jurisdiction in Oklahoma in suit brought by nonresident plaintiff).
After considering the facts in Wilson, the Fifth Circuit concluded that the nonresident defendants there "took no planned action to inject themselves or their opinions into the Texas forum." Id. The same holds true here, as VCC has had even less contact with this forum than did the defendants in Wilson. VCC did not speak to a representative of The Dodge Reports. Reply to Plaintiff's Supplemental Response to Defendant's Motion to Dismiss Under Rules 12(b)(2), 12(b)(3), and 12(b)(6) and, Alternatively, Motion to Transfer Venue, and for a More Definite Statement Under Rules 9(b), 9(f) and 12(c) ("Reply") at 4. VCC did not initiate any activity which caused it to be listed in The Dodge Reports, nor did VCC seek to have The Dodge Reports published to Texas residents. Id. There are no allegations that VCC intended any of its activities to interfere with Vratsinas's business in Texas, See, e.g., Southmark Corporation v. Life Investors, Inc., 851 F.2d 763, 773(5th Cir. 1988) (upholding district court's determination that it did not have personal jurisdiction over Virginia corporation because nothing in the record indicated that the corporation aimed its allegedly tortious activities at Texas, or that Texas was even the focal point of its tortious conduct). There is simply nothing in the record that indicates that VCC has directed any of its activities at residents of this forum. If this court were to exercise personal jurisdiction over VCC on the basis of this single publication, then it fails to see how VCC would not be subject to the jurisdiction of any state that happened to have a copy of The Dodge Report somewhere in it. "[T]he assertion of specific personal jurisdiction over [VCC] would deprive [it] of the due process liberty interest not to be subjected to suit in a distant forum with which [it has] little connection." Wilson, 20 F.3d at 649. This court concludes that insufficient contacts exist between Texas, VCC and the instant controversy to support an exercise of specific jurisdiction.
b. General Jurisdiction
Because the claims in this case relate to VCC's contacts with Texas, and because Vratsinas has not alleged that VCC has had continuous and systematic contacts with Texas, the court will not address the question of general jurisdiction.
2. Fair Play and Substantial Justice
The second prong of the due process analysis limits the court's power to exercise personal jurisdiction over a nonresident if the exercise of jurisdiction under the circumstances would offend "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Since Vratsinas has not established that VCC has sufficient minimum contacts such that it can be subject to jurisdiction in this forum, the court "need not determine whether exercise of personal jurisdiction here would comport with notions of fair play and substantial justice." La Cienega, 4 F.3d at 416 n. 15.
III. CONCLUSION
For the reasons stated above, VCC's motion to dismiss for lack of jurisdiction is GRANTED. Its other motions for relief are DENIED as moot.
SO ORDERED.
March 7, 2000.
A. JOE FISH United States District Judge