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BASSILI v. CHU

December 24, 2002

JOHN BASSILI, PH.D., AND DUECE INDUSTRIES, LTD., PLAINTIFFS,
V.
VICTOR CHU AND MAXLINE, DEFENDANTS.



The opinion of the court was delivered by: John T. Curtin, United States District Judge

Plaintiffs brought this action seeking injunctive relief and damages for commercial defamation pursuant to the Lanham Act, 15 U.S.C. § 1125, and other common law and statutory provisions, and have moved for preliminary injunctive relief (Item 8). Defendants move to dismiss for lack of personal jurisdiction, or in the alternative to dismiss or transfer the action based on improper venue (Item 14). For the following reasons, defendants' motion to transfer venue is granted.

BACKGROUND

Plaintiff John Bassili, Ph.D., is President and owner of Deuce Industries, Ltd., an Ontario corporation engaged in the business of importing and manufacturing tennis equipment, including racquet stringing machines marketed under the name "Silent Partner." The complaint alleges that Deuce Industries maintains a principal place of business at 221 Kenmore Avenue, Unit 106, Buffalo, New York (Item 1, ¶ 2), which is described by Mr. Bassili as a "principal place of distribution" for its stringing machine inventory (Item 8, Bassili Decl., ¶ 1). Defendant Victor Chu is a resident of Torrance, California, doing business as "Maxline," and is engaged in the business of manufacturing and selling tennis racquet stringing machines marketed under the name "Eagnas"

As alleged in the complaint, Maxline conducts its business entirely by mail order and Internet sales through its website at www.eagnas.com. The website has a section entitled "Racquet Stringing Machines Frequently Asked Questions (FAQ)." Plaintiffs claim that the FAQ section of defendants' website contains false, disparaging and defamatory statements about plaintiffs' Silent Partner "e.Stringer" model stringing machine, causing plaintiffs to lose revenues due to decreased purchase orders and inquiries. The complaint sets forth causes of action for intentional interference with prospective economic advantage, trade libel, and product disparagement, and seeks relief in the form of damages (including treble damages) and a "Lanham Act 43(a)" injunction.*fn1 Plaintiffs also seek preliminary injunctive relief ordering defendants to remove from their website the false statements regarding the e.Stringer, pending the outcome of this litigation.

Defendants move to dismiss the complaint for lack of personal jurisdiction, or in the alternative to dismiss or transfer the action to the United States District Court for the Central District of California based on improper venue. Argument of defendants' motion took place by telephone on November 22, 2002. The court directed further submissions on the factual and legal issues raised by the motion. These submissions were received by the court on December 18, 2002. For the following reasons, defendants' motion is granted to the extent it seek transfer of venue to the United States District Court for the Central District of California.

DISCUSSION

I. Personal Jurisdiction

Personal jurisdiction over a non-domiciliary defendant in a diversity or federal question case*fn2 is determined by reference to the law of the state in which the court sits. Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997). On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999). At the pleadings stage of a case, a plaintiff is required only to make a prima facie showing of jurisdiction. Ball v. Metallurgie Hoboken-Overpelt S.A., 902 F.2d 194, 197 (2d Cir.) (discussing plaintiff's varying obligation to establish personal jurisdiction depending on procedural posture of the litigation), cert. denied, 498 U.S. 854 (1990). In determining whether the plaintiff has met this burden, the court must assume that all of the plaintiff's factual allegations are true, and "doubts are resolved in the plaintiff's favor, notwithstanding a controverting presentation by the moving party." A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993) (citing Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985)).

When considering a motion to dismiss for lack of personal jurisdiction, the court must conduct a two-part inquiry. "First, it must determine whether the plaintiff has shown that the defendant is amenable to service of process under the forum state's laws; and second, it must assess whether the court's assertion of jurisdiction under these laws comports with the requirements of due process." Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996), quoted in Kernan, 175 F.3d at 240. Plaintiffs allege personal jurisdiction under N.Y.C.P.L.R. § 302, New York's "long-arm" statute, which provides as follows:

Personal jurisdiction by acts of non-domiciliaries

(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:
1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or
2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or
3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he
(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed ...

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