failing to find personal jurisdiction even when evidence showed a number of contacts between Texas residents and the interactive website at issueSummary of this case from First Fitness International, Inc. v. Thomas
February 7, 2003
Before the court is the motion of the defendant DAMMADD, Inc., d!b/a DAMMADD, d/b/a Dads and Mad Moms Against Drug Dealers ("DAMMADD"), to dismiss the complaint of the plaintiff Mothers Against Drunk Driving ("MADD") for lack of personal jurisdiction and improper venue pursuant to Fed.R.Civ.P. 12(b)(2), 12(b)(3), and 28 U.S.C. § 1406(a) or, in the alternative, to transfer this case to the United States District Court for the Northern District of New York pursuant to 28 U.S.C. § 1404. For the reasons set forth below, DAMMADD's motion to dismiss for lack of personal jurisdiction is granted; its motion to dismiss for improper venue, as well as the alternative motion to transfer, are denied as moot.
MADD filed an amended complaint after this motion to dismiss was filed. See Plaintiff's First Amended Complaint ("Amended Complaint"); Docket Sheet. The only significant change, however, was the inclusion of 28 U.S.C. § 1391(b)(1) as an additional basis for venue. See Amended Complaint ¶ 5. Because MADD's amended complaint does not allege additional facts sufficient to support personal jurisdiction over DAMMADD, the filing of the amended complaint does not moot DAMMADD's motion to dismiss.
I. BACKGROUNDThis case involves a trademark dispute between MADD and DAMMADD. MADD is a non-profit District of Columbia corporation headquartered in Irving, Texas. See Plaintiff's Original Complaint ("Complaint") ¶ 1; Plaintiff's Response to Defendant's Motion to Dismiss or Transfer ("Plaintiff's Response") at 1. Since its establishment in 1980, MADD's mission has been to educate the public on the dangers of driving under the influence of alcohol, to prevent drug and alcohol abuse among youth, and to provide assistance to the victims of impaired driving. Plaintiff's Response at 1. DAMMADD is a non-profit New York corporation with its principal place of business in Tioga Center, New York. See Defendant's Brief in Support of Defendant's Motion to Dismiss or, in the Alternative, to Transfer to the United States District Court for the Northern District of New York ("Defendant's Motion") at 1. DAMMADD was formed by Steven Steiner ("Steiner") and his wife in 2001 to assist in the arrest and conviction of individuals engaged in the sale of illegal drugs and to educate the public on the dangers of substance abuse. Defendant's Motion at 1; Plaintiff's Response at 1-2. Steiner and his wife are the only employees of DAMMADD, and both are residents and domiciliaries of New York. Defendant's Motion at 1; Declaration of Steven Steiner in Support of Defendant's Motion to Dismiss ("Steiner Affidavit") ¶ 14, located in Appendix in Support of Defendant's Motion to Dismiss or, in the Alternative, to Transfer to the United States District Court for the Northern District of New York ("Defendant's Appendix"), as Exhibit 1. The five members of DAMMADD's board of directors are also New York residents. Steiner Affidavit ¶ 6. Steiner is the president of DAMMADD. Defendant's Motion at 1.
In pursuit of its anti-substance abuse mission, DAMMADD operates an Internet website and a toll-free telephone number. See Defendant's Motion at 1; Deposition of Steven Steiner ("Steiner Deposition") at 13, 21, located in Appendix to Plaintiff's Response to Defendant's Motion to Dismiss ("Plaintiffs Appendix"), as Exhibit B. Aside from general information on the organization, the DAMMADD website has a number of important features, including a mechanism allowing visitors to submit anonymous tips regarding illegal drug activity. Defendant's Motion at 1; Steiner Deposition at 25. Upon receipt of an anonymous tip, DAMMADD sends an e-mail notification of the tip to the appropriate law enforcement agency — provided, however, that DAMMADD has a contact person within that agency to receive e-mail correspondence. See Steiner Deposition at 25-26, 29-30, 32-33. DAMMADD has had such a contact person within the Texas Department of Public Safety (the "DPS") in Austin, Texas. Steiner Deposition at 49; Plaintiff's Response at 3-4. DAMMADD also supplies its law enforcement contacts with a password that allows the contact to log-on to the DAMMADD website and update the status of an anonymously reported tip. Steiner Deposition at 29-31, 48-50. In the event that a tip actually leads to the arrest and successful conviction of a drug dealer, DAMMADD offers to pay a cash reward to the tipster. Steiner Deposition at 31-32; Plaintiffs Response at 2. of the estimated 786 tips received by DAMMADD, approximately 20 originated from Texas sources. Defendant's Motion at 1. However, to date, the DPS has not acted on any tip provided by DAMMADD, and DAMMADD has ceased all communication with the DPS. See Steiner Affidavit ¶ 10; Steiner Deposition at 72.
DAMMADD's website can be found at http://www.DAMMADD.org. and its toll-free phone number is 1-866-DAMMADD.
The DAMMADD website further allows visitors to make financial contributions to the organization by check or credit card and offers certain drug kits and DAMMADD posters for sale. Steiner Deposition at 50-56; Plaintiffs Response at 4. Financial contributions may be in the form of a straight-forward cash donation or as memorial donation. Steiner Deposition at 50-56; Plaintiff's Response at 4. DAMMADD has received approximately five donations, including one memorial donation, from Texas sources and sold two drug kits to Texas buyers via its website. Defendant's Reply at 2; Plaintiff's Response at 4. Donations from Texas sources total approximately $1,107.
While DAMMADD initially denied the sale of products through its Internet web site, see Defendant's Motion at 1, DAMMADD later retracted that statement and admitted to the sale of the drug kits and posters as "an add-on to its charitable activities" on the website. See Reply in Support of Defendant's Motion to Dismiss or, in the Alternative, to Transfer to the Northern District of New York ("Defendant's Reply") at 2. DAMMADD blames the erroneous statement on an oversight due to "paltry sales" of these items. Id. at n. 1.
A memorial donation allows a donor to establish a webpage on DAMMADD's website that is dedicated to the life of a loved one who died from a drug overdose or as the result of a drug-related incident. Steiner Deposition at 60-62.
DAMMADD initially stated that it received donations from Texas sources totalling not more than $1,250. Defendant's Motion at 2. This total apparently reflected a corporate donation in the amount of $1,000 from Executive Lodging and a private donation in the amount of $250 from Ms. Sherry Moody-Voren. See Steiner Affidavit ¶ 11. Steiner, however, later clarified that Ms. Moody-Voren had in fact only donated $50 to DAMMADD and that DAMMADD had also received three previously undisclosed donations — one in the amount of $29 and two for approximately $14 each. See Steiner Deposition at 16, 57-59, 62-63.
Individuals may also submit anonymous tips and make financial donations through DAMMADD's toll-free telephone number. See Steiner Deposition at 21, 51; Plaintiff's Response at 4. However, other than one phone call inquiring about the eligibility for cash rewards, the only evidence of a Texas resident or entity actually using the DAMMADD toll-free telephone number for these activities, reveals that, at most, one of the five Texas donors may have submitted his/her donation by telephone. See Steiner Deposition at 51. Further, no member of the DAMMADD organization has traveled to Texas in order to promote DAMMADD's mission, products, or services. See Defendant's Motion at 2; Steiner Affidavit ¶ 8. Nor is there any evidence that DAMMADD owns any property within the state of Texas.
A Texas caller apparently provided a tip to local law enforcement that subsequently led to a drug-related arrest. See Defendant's Reply at 3 n. 2. Because the caller sent the tip directly to the local law authorities — rather than to DAMMADD — DAMMADD did not pay a reward on the claim. Id.
On August 12, 2002, MADD filed this suit against DAMMADD alleging claims of trademark infringement, trademark dilution, and unfair competition in violation of federal and state law. See Complaint; Docket Sheet. On October 3, 2002, DAMMADD responded by filing the instant motion to dismiss for lack of personal jurisdiction and improper venue or, in the alternative, to transfer this case to the United States District Court for the Northern District of New York. See Docket Sheet.
II. ANALYSIS A. The Factual Standard: A Prima Facie Case
When a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the district court's jurisdiction over the nonresident. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.), cert. denied, 513 U.S. 930 (1994); Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). 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, 20 F.3d at 648; Thompson v. Chrysler Motors Corporation, 755 F.2d 1162, 1165 (5th Cir. 1985).
The court will take the allegations of the complaint as true, except where they are controverted by opposing affidavits, and all conflicts in the facts are resolved in favor of the plaintiff. Wilson, 20 F.3d at 648. In making its determination, the court may consider affidavits, interrogatories, depositions, oral testimony, or any combination of recognized discovery methods. Thompson, 755 F.2d at 1165; Stuart, 772 F.2d at 1192.
B. The Legal Standard
A federal district court — whether sitting in diversity or faced with a federal question — may exercise personal jurisdiction over a nonresident defendant if (1) the long-arm statute of the forum state permits the exercise of personal jurisdiction over the defendant; and (2) the exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. Ruston Gas Turbines, Inc. v. Donaldson Company, Inc., 9 F.3d 415, 418 (5th Cir. 1993) (diversity); Ham v. La Cienega Music Company, 4 F.3d 413, 415 (5th Cir. 1993) (federal question); see also Mink v. AAAA Development LLC, 190 F.3d 333, 335 (5th Cir. 1999); Aviles v. Kunkle, 978 F.2d 201, 203-04 (5th Cir. 1992); Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784, 786 (5th Cir. 1990); Pedelahore v. Astropark, Inc., 745 F.2d 346, 347 (5th Cir. 1984). Applying state law, this court must first determine whether Texas, the forum state, could assert long-arm jurisdiction. Id. Because the Texas long-arm statute confers jurisdiction to the limits of the federal constitution, Hall v. Helicopteros Nacionales de Columbia, S.A., 638 S.W.2d 870, 872 (Tex. 1982), rev'd on other grounds, 466 U.S. 408 (1984), the court need only concern itself with the federal due process inquiry. Bullion v. Gillespie, 895 F.2d 213, 215-16 (5th Cir. 1990); see also TEX. CIV. PRAC. REM. CODE ANN. § 17.041 et seq. (Vernon 1997) (Texas long-arm statute).
C. Due Process Requirements
Due process requires the satisfaction of two elements to exercise personal jurisdiction over a non-resident defendant: (1) the nonresident must have some minimum contact with the forum which results from an affirmative act on his 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, 474-7 7 (1985); C H Transportation Company, Inc. v. Jensen 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 a "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).
1. Minimum Contacts
To establish minimum contacts, a nonresident defendant must do some act by which he "purposefully avails himself 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 state 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 jurisdiction and general jurisdiction. 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, 9 F.3d at 418-419; Stuart, 772 F.2d at 1190 n. 3. "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 Columbia, 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 (quoting 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 v. Petty-Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1068 n. 9 (5th Cir.), cert. denied, 506 U.S. 867 (1992); 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) (emphasis added), see also D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 547 (5th Cir. 1985).
a. Specific Jurisdiction
In the case at bar, MADD argues that DAMMADD has sufficient minimum contacts with Texas for this court to exercise personal jurisdiction over DAMMADD Plaintiff's Response at 11. According to MADD, "[t]he prominent and conspicuous use of the DAMMADD mark on defendant's www.dammadd.org website as well as the use of the website to solicit and collect donations and sell products are the basis of MADD's trademark-infringement and unfair-competition claims" and, therefore, provide a sufficient basis for specific jurisdiction. Id. MADD further alleges that in personam jurisdiction is proper because DAMMADD's contacts with the forum, via the DAMMADD website, "are significant enough that DAMMADD should reasonably have anticipated being sued in Texas." Id. at 12. The court is unconvinced.
This Circuit has adopted the approach of Zippo Manufacturing Company v. Zippo Dot Coin, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997), in determining whether a defendant's operation of an Internet website provides the requisite minimum contacts for personal jurisdiction. See Revell v. Lidov, 2002 WL 31890992 at *2 (5th Cir. Dec. 31, 2002); Mink, 190 F.3d at 336. The Zippo decision established a sliding-scale test to evaluate the "nature and quality of commercial activity that an entity conducts over the Internet." Zippo, 952 F. Supp. at 1124. District courts in Texas have employed the Zippo analysis in specific jurisdiction cases. See Carrot Bunch Co., Inc. v. Computer Friends, Inc., 218 F. Supp.2d 820, 824-26 (N.D. Tex. 2002); American Eyewear, Inc. v. Peeper's Sunglasses and Accessories, Inc., 106 F. Supp.2d 895, 900 n. 10 (N.D. Tex. 2000); People Solutions, Inc. v. People Solutions, Inc., 2000 WL 1030619 at *3 (N.D. Tex. July 25, 2000).
The Zippo sliding-scale analysis categorizes Internet use into a three point spectrum. At one end of the spectrum, a defendant "merely establishes a passive website that does nothing more than advertise on the Internet." Mink, 190 F.3d at 336. Personal jurisdiction based on a "passive website" is inappropriate. See Mink, 190 F.3d at 336; Carrot Bunch, 218 F. Supp.2d at 825. At the other end of the spectrum, "a defendant clearly does business over the Internet by entering into contracts with residents of other states which `involve the knowing and repeated transmission of computer files over the Internet . . .'" Mink, 190 F.3d at 336 (quoting Zippo, 952 F. Supp. at 1124). In this situation, personal jurisdiction over the non-resident defendant is proper. See Mink, 190 F.3d at 336; Carrot Bunch, 218 F. Supp.2d at 825. Between these two extremes are cases where a defendant's website allows a visitor to exchange information with a host computer. Mink, 190 F.3d at 336. "In this middle ground, `the exercise of jurisdiction is determined by the level of interactivity and commercial nature of the exchange of information that occurs on the [w]ebsite." Mink, 190 F.3d at 336 (quoting Zippo, 952 F. Supp. at 1124) (emphasis added); American Eyewear, 106 F. Supp.2d at 901. The critical inquiry, however, as with any personal jurisdiction case, is whether the contacts suggest that the nonresident defendant purposefully directed its activities toward the forum state or purposefully availed itself of the privilege of conducting activities within the forum state. See Origin Instruments Corporation v. Adaptive Computer Systems, Inc., 1999 WL 76794 at *2 (N.D. Tex. 1999); see also Hanson, 357 U.S. at 253; World-Wide Volkswagen, 444 U.S. at 298-99.
Applying these principles, the court concludes that DAMMADD's Internet website falls within the middle range of the Zippo spectrum. DAMMADD's website clearly allows a visitor to interact and exchange information with a host computer by submitting anonymous drug activity tips, making donations, and allowing visitors to purchase products. Moreover, MADD's claims appear to arise out of the visible nature of the "DAMMADD" mark throughout the website and, presumably, the mark's presence in the "www.dammadd.org" domain name. The question remaining, then, is whether the level of interactivity and the commercial nature of DAMMADD's website are sufficient to warrant an exercise of specific jurisdiction. See Mink, 190 F.3d at 336; Zippo, 952 F. Supp. at 1124. The court answers that question in the negative.
A "domain name" is a registered Internet address that serves as the primary identifier of a website. See Zippo, 952 F. Supp. at 1120 n. 1; see also E. J. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 272 (5th Cir. 2002); Lockheed Martin Corp. v. Network Solutions, Inc., 141 F. Supp.2d 648, 650-51 (N.D. Tex. 2001).
Collectively, the three contacts alleged between DAMMADD and Texas through the DAMMADD website — the anonymous tip reporting mechanism, the ability to make on-line financial donations, and the sale of drug kits and DAMMADD posters — represent nothing more than attenuated contacts with Texas that fail to meet the minimum threshold for specific jurisdiction. See Mink, 190 F.3d at 336-37; Zippo, 952 F. Supp. at 1124. First, only 20 of the estimated 786 anonymous tips received by DAMMADD — i.e., less than three percent — actually originated from Texas sources and the DPS has not pursued any of these reported tips. See Defendant's Motion at 1; Steiner Affidavit ¶ 10. Moreover, there is no evidence that DAMMADD has ever paid a reward to a Texas tip provider. Second, while at most five Texas donors may have submitted financial contributions to DAMMADD via the website, these donations total only $1,107 of the approximately $70,000 in contributions — i.e., less than two percent — received by DAMMADD in 2002. See Defendant's Motion at 2; Steiner Affidavit ¶ 11. Beyond their numerical and monetary insignificance, these voluntary donations reflect a lack of regular commercial activity required to exercise in personam jurisdiction based on Internet contacts. See Mink, 190 F.3d at 337; see also American Eyewear, 106 F. Supp.2d at 901; Thompson v. Handa-Lopez, Inc., 998 F. Supp. 738, 744 (W.D. Tex. 1998); Zippo, 952 F. Supp. at 1125-26. Finally, while DAMMADD's website does offer a few products for sale, it is not a "virtual store" with a barrage of wares marketed daily to web-surfing consumers. Cf. Carrot Bunch, 218 F. Supp.2d at 826 (exercising jurisdiction where nonresident defendants' website extensively marketed printer inkjet cartridges, inkjet refill kits, and other computer equipment to Texas consumers); American Eyewear, 106 F. Supp.2d at 898, 903 (exercising jurisdiction where Texas consumers purchased numerous products almost daily through the nonresident defendant's highly commercial website); Stomp, Inc. v. NeatO LLC, 61 F. Supp.2d 1074, 1078 n. 7 (CD. Cal. 1999) (exercising jurisdiction where a substantial portion of nonresident defendant's website functioned as a "virtual store" allowing "[c]onsumers [to] view descriptions, prices and pictures of various products" prior to purchase). Rather, DAMMADD dedicates a relatively minute portion of its website to the sale of certain drug kits and posters, and only two Texas consumers have actually chosen to purchase a product via the DAMMADD website. See Defendant's Reply at 2; Plaintiff's Response at 17.
These web-based contacts simply fail to paint the picture of a significantly commercial website that is visited regularly by Texas residents. Moreover, with the exception of one possible telephone donation, there is scant evidence to consider in the specific jurisdiction analysis of additional contacts between DAMMADD and Texas. Cf. Mieczkowski v. Masco Corporation, 997 F. Supp. 782, 785, 787-88 (E.D. Tex. 1998) (finding personal jurisdiction where, beyond limited Internet contacts, nonresident defendant shipped over $5.7 million dollars worth of products to Texas over period of six years, consummating over 250 transactions with Texas residents, bought products from Texas supplier, and did semiannual direct mailing to Texas residents); Telephone Audio Productions, Inc. v. Smith, 1998 WL 159932 at *3 (N.D. Tex. Mar. 26, 1998) (finding personal jurisdiction where nonresident defendant, in addition to limited interactive website, attended trade show in Texas where allegedly infringing mark was displayed, received a number of orders from Texas distributors, and advertised in magazine, some of whose readers may have been in Texas). Indeed DAMMADD does not appear to have any property or employees in Texas, nor has any DAMMADD employee has ever traveled to Texas in order to promote the organization's mission, products, or services. See Steiner Affidavit ¶¶ 6, 8-9. Consequently, the totality of the contacts alleged between DAMMADD and Texas do not demonstrate that DAMMADD has purposefully directed its activities toward Texas, that it has purposefully availed itself of the benefits and protections of Texas law, or that it could reasonably foresee being haled into court in Texas.
It is arguable, given the uncertainty surrounding Internet jurisdiction cases falling in the middle of the Zippo spectrum, that jurists of reason could disagree about this result. But even if it is assumed arguendo that DAMMADD's contacts with Texas are sufficient to cross the constitutional threshold required by due process, the exercise of jurisdiction over DAMADD in this case would violate traditional notions of fair play and substantial justice, for the reasons discussed below.
b. General Jurisdiction
Because the claims in this case do not concern conduct that is unrelated to DAMMADD's contacts with Texas, and because MADD does not allege any systematic and continuous contact between DAMMADD and Texas, the court will not address the question of general jurisdiction.
2. Fair Play and Substantial Justice
The due process inquiry 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)). In determining whether the exercise of jurisdiction violates traditional notions of fair play and substantial justice, the court evaluates the following factors: (1) the burden on the defendant by having to litigate in the forum; (2) the forum state's interests in the lawsuit; (3) the plaintiff's interests in convenient and effective relief; (4) the judicial system's interest in efficient resolution of controversies; and (5) the shared interest of states in furthering fundamental social policies. Wien Air Alaska v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999) (citing Ruston Gas, 9 F.3d at 421); World-Wide Volkswagen, 444 U.S. at 292. It is DAMMADD's burden to show that, in light of these factors, conducting litigation in this court would be "so gravely difficult and inconvenient" that it would be at a "severe disadvantage" in comparison to the plaintiff. Burger King, 471 U.S. at 478 (citations omitted). DAMMADD has met that burden.
DAMMADD is a small non-profit organization run by Steiner and his wife in upstate New York. Defendant's Motion at 1; Steiner Affidavit ¶ 1. DAMMADD's entire operating budget for 2002 totaled less than $70,000. Steiner Affidavit ¶ 11. Further, all of DAMMADD's employees and officers reside in New York and DAMMADD's only offices are located in New York. Defendant's Motion at 13; Steiner Affidavit ¶¶ 6-7, 12. All documents pertaining to DAMMADD's organization and formation are likewise located in New York. Steiner Affidavit ¶ 13. Thus, all persons with knowledge of the organization's formation and documents related thereto would, in all likelihood, have to be transported from New York to Texas if litigation were to occur in this forum. According to DAMMADD, the added expense of bringing these necessary documents and personnel to Texas would effectively put DAMMADD out of business. Defendant's Motion at 13; Steiner Affidavit ¶ 14. MADD has offered no evidence to the contrary. Consequently, the first factor weighs strongly in favor of DAMMADD.
The state of Texas has a clear interest in protecting corporations headquartered within Texas from unlawful trademark infringement. New York also, however, has a significant interest in remedying violations of trademark law by New York corporations. Consequently, the second factor weighs neither in favor of Texas nor New York.
MADD undoubtedly has an interest in convenient and effective relief — assuming that it can establish a right to relief. This interest must, nevertheless, be put in proper perspective. MADD is a large organization with a number of chapters across the country, including several in New York. Defendant's Motion at 16. Moreover, MADD's financial strength is consistent with its size. In fact, last year alone MADD received over $50 million dollars in contributions. Defendant's Reply at 1. Therefore, because MADD has a sufficient presence in New York and the financial capabilities to bring suit there, resolving this dispute in that forum will not significantly inconvenience or preclude any potential relief available to MADD. Thus, although the court gives due regard to MADD's choice of forum, the third factor ultimately weighs in favor of DAMMADD.
Finally, litigation of this dispute in New York would violate neither the judicial system's interest in efficient resolution of controversies nor the shared interest of states in furthering fundamental social policies. Quite the contrary. Litigation in New York would presumably allow MADD's claims to be heard and defended against on the merits, rather than result in a possible default or other disposition due merely to DAMMADD's limited financial resources. Not only is this course the most efficient resolution of the instant case, but it likewise furthers fundamental social policies by allowing an appropriate court to evaluate the merits of this dispute and to reinforce the proper boundaries of trademark jurisprudence. The fourth and fifth factors, therefore, weigh in favor of DAMMADD.
While the interests of the plaintiff and the forum may justify even large burdens on the defendant, the burden faced by DAMMADD in having to defend itself in this forum greatly outweigh those interests to such a degree that requiring litigation here would be unreasonable. See Wien, 195 F.3d at 215; Asahi Metal Industry Company, Ltd. v. Superior Court of California, Solano County, 480 U.S. 102, 113-14 (1987). Therefore, after examining "the relationship among the defendant, the forum, and the litigation," Gundle Lining Construction Corporation v. Adams County Asphalt, Inc., 85 F.3d 201, 205 (5th Cir. 1996) (citing Shaffer, 433 U.S. at 204), the court concludes that maintaining the suit against DAMMADD in this forum "would offend the traditional notions of fair play and substantial justice." Asahi, 480 U.S. at 113 (quoting International Shoe, 326 U.S. at 316) (internal quotation marks omitted).
In deciding whether a nonresident corporation should be required to defend itself in a suit in Texas arising out of contacts claimed between the nonresident and Texas, "`each case must be decided on its own facts.'" Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1028 (5th Cir. 1983) (citation omitted), cert. denied, 466 U.S. 962 (1984). Based on the facts currently before the court, an exercise of jurisdiction over DAMMADD would be inconsistent with the requirements of due process. Accordingly, DAMMADD's motion to dismiss for lack of personal jurisdiction is GRANTED, and MADD's claims against DAMMADD are DISMISSED without prejudice to their being litigated in an appropriate forum which has personal jurisdiction over DAMMADD. In light of this ruling, DAMMADD's motion to dismiss for improper venue, as well as its alternative motion to transfer, are DENIED as moot.