United States District Court, S.D. New York
March 10, 2004.
MATTEL, INC., Plaintiff, -against- PROCOUNT BUSINESS SERVICES, 877NETMALL, INC., and GARY A. GIDDINGS, Defendants
The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendant Gary A. Giddings ("Giddings") has moved to dismiss or
transfer the action by plaintiff Mattel, Inc. ("Mattel"). Mattel, in
turn, has moved for summary judgment on its claims against defendants
Procount Business Services, 877 NetMall, Inc. ("877NetMall") and Giddings
(collectively, "Defendants") under the Anticybersquatting Consumer
Protection Act of 1999, 15 U.S.C. § 1125(d). For the reasons set forth
below, Giddings' motion is denied in part and granted in part, and
Defendants' motion is denied. Defendants Procount Business Services and
877NetMall are ordered to seek counsel, and this action will be
transferred to the Southern District of Texas.
Mattel commenced this action against Defendants on September 16, 2003.
The instant motions were marked fully submitted on November 19, 2003.
Mattel is a corporation organized and existing under the laws of the
State of Delaware with its principal place of business in El Segundo,
Procount Business Services is a sole proprietorship owned by Giddings.
It is in the business of selling toys and has its place of business in
877NetMall is a corporation organized and existing under the laws of
the State of Texas with its principal place of business in Houston,
Texas. 877NetMall is owned by Giddings.*fn1
Giddings is an individual residing in Houston, Texas.
The facts are set forth based upon the parties' pleadings and
Mattel is the world's largest manufacturer of toys, games, and
playthings. In 1959, Mattel co-founder, Ruth Handler, created the Barbie
doll. Mattel has caused certain trademarks to be registered in the United
States Patent and Trademark Office on the Principal Register.
MetalToys.com is an Internet only specialty toy store.*fn2
It features vintage toy reproductions primarily constructed of metal, but
in June 2002, the product line was expanded to include all types of
toys, including 10 licensed "Barbie Classic" items. On June 20, 2002,
Giddings purchased the virtual domain,*fn3 BarbieToy.com, and pointed it
to www.metaltoys.com/Barbie.htm. In May 2003, Giddings added 13 Mattel
licensed "Barbie Retro" items, purchased the virtual domain,
BarbieRetro.com, and pointed it to
http://www.metaltoys.com/BarbieRetro.htm. Procount Business Services owns
the domain name, MetalToys.com and the virtual domains, BarbieToy.com and
BarbieRetro.com. Mattel makes money when its licensed products are sold
From the MetalToys.com site, Mattel's investigator, Michael Falson
("Falson"), purchased a Barbie Tea Set and a Barbie Magic Paper Doll,
which Defendants shipped into the Southern District of New York.
Mattel seeks a transfer of the domain names, an injunction, statutory
damages, and attorneys' fees.
I. Defendants Procount Business Services and 877NetMall Need to Seek
Defendants Procount Business Services and 877NetMall must seek counsel
to represent them in this action. "[I]t is well established that neither
corporations nor partnerships may appear in federal courts except by duly
licensed attorneys." Kruman v. Christie's Int'l PLC, No. 00 Civ. 6322,
2003 WL 21277116, at *1 (S.D.N.Y. June 2, 2003); see also Rowland v.
California Men's Colony, 506 U.S. 194, 201-02 (1993) (explaining that "
[i]t has been the law for the better part of two centuries . . . that a
corporation may appear in the federal courts only through licensed
counsel," and 28 U.S.C. § 1654 "does not allow corporations,
partnerships, or associations to appear in federal court otherwise than
through a licensed attorney"); Jacobs v. Patent Enforcement Fund. NC,
230 F.3d 565, 568 (2d Cir. 2000); United States Fire Ins. Co. v. Jesco.
Const. Corp., No. 03 Civ. 2906, 2003 WL 21689654, at *1 (S.D.N.Y. Jul.
II. Giddings' Motion to Dismiss Is Denied
Giddings' motion to dismiss is denied as personal jurisdiction is
proper in this district. Under New York's long-arm statute, N.Y. C.P.L.R.
("CPLR") § 302(a)(1), personal jurisdiction can be exercised "over
any non-domiciliary . . . who in person or through an agent . . .
transacts any business within the state or contracts anywhere to supply
goods or services in the state." As
recognized in Nat'l Football League v. Miller, 54 U.S.P.Q.2d 1574, 1575
(S.D.N.Y. 2000), personal jurisdiction is proper over a defendant who has
used a website to make sales to customers located in the State of New
York. The Court explained:
It is now established that one does not subject
himself to the jurisdiction of the courts in another
state simply because he maintains a website which
residents of that state visit. Bensusan Restaurant
Corp. v. King, 126 F.3d 25 (2d Cir. 1997). However,
one who uses a website to make sales to customers in a
distant state can thereby become subject to the
jurisdiction of that state's courts. See, e.g., Bochan
v. La Fontaine, 68 F. Supp.2d 692, 701 (E.D. Va.
Id.; see also Citigroup, Inc. v. City Holding Co., 97 F. Supp.2d 549,
565-66 (S.D.N.Y. 2000).
Here, Defendants shipped merchandise into the State of New York that
was ordered by Falsone from its website. Furthermore, Defendants e-mailed
Falsone a substitution to be made to his order, and Falsone had a live
chat via AOL instant messenger with Defendants' customer service
representative regarding the status of his order. This activity further
supports the assertion of jurisdiction over Defendants. See Mattel, Inc.
v. Adventure Apparel, No. 00 Civ. 4085, 2001 U.S. Dist. LEXIS 3179, at *9
(S.D.N.Y. Mar. 15, 2001) ("In addition, Adventure e-mailed a confirmation
to Falsone. . . . This additional interactive activity further supports
the exercise of personal jurisdiction over the defendant."). The fact
that this sale was to Mattel's
investigator is irrelevant. Id. at *10. Personal jurisdiction is proper
as Defendants solicited sales over the internet, accepted an order from a
resident of this state, and shipped goods into this state to fill that
III. Giddings' Motion to Transfer Is Granted
Defendants have additionally moved to transfer this action to the
Southern District of Texas.*fn4 28 U.S.C. § 1404(a) provides:
For the convenience of the parties and witnesses,
in the interest of justice, a district court may
transfer any civil action to any other district or
division where it might have been brought.
To transfer a motion, Defendants must demonstrate that: (A) "the action
could have been brought in the district to which transfer is proposed, "
and (B) "the transfer would serve the convenience of the parties and
witnesses and is in the interests of justice." Bionx Implants, Inc. v.
Biomet, Inc., No. 99 Civ. 740, 1999 WL 342306, at *2, *3 (S.D.N.Y. May
27, 1999); accord Orb
Factory Ltd, v. Design Science Toys, Ltd., 6 F. Supp.2d 203, 208
A. This Action Could Have Been Brought in the Southern District of
Mattel does not contest that its action could have been brought in the
Southern District of Texas.
B. A Transfer Would Serve the Interests of Convenience and Fairness
To determine whether a transfer would serve the interests of
convenience and fairness, courts consider the following factors: (1) the
place where the operative facts occurred (the locus of operative facts);
(2) the location of relevant documents and the relative ease of access to
sources of proof; (3) the convenience of the parties; (4) the relative
means of the parties, (5) the convenience of the witnesses; (6) the
availability of process to compel attendance; (7) the forum's familiarity
with the governing law; (8) the plaintiff's choice of forum; and (9) trial
efficiency and the interests of justice based on the totality of the
circumstances. Recoton Corp. v. Allsop, Inc., 999 F. Supp. 574, 577
(S.D.N.Y. 1998) (citations omitted); Brown v. Dow Corning Corp., No. 93
Civ. 5510, 1996 WL 257614, at *2 (S.D.N.Y. May 15, 1996).
This determination "lie[s] within the broad discretion of the district
court," and consideration is based "upon notions of convenience and
fairness on a case-by-case basis." Brown v. Dow Corning Corp., No. 93
Civ. 5510, 1996 WL 257614, at *2 (S.D.N.Y. May 15, 1996) (citing In re
Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992)). See also
Bionx, 1999 WL 342306, at *3 ("Section 1404(a) allows a district judge
considerable discretion in adjudicating a motion for transfer according
to an `individualized case-by-case consideration of convenience and
1. The Locus of Operative Facts
The location of operative facts is a "primary factor" in determining a
motion to transfer venue. ZPC 2000, Inc. v. The SCA Group, Inc.,
86 F. Supp.2d 274, 279 (S.D.N.Y. 2000). This is an action for trademark
infringement, dilution, and cybersquatting based on an infringing site on
the world wide web. Giddings created this site in Texas, and Falsone
viewed it in New York. Merchandise ordered from this site were shipped
from Texas to New York. The locus of operative facts, therefore, comes
out neutral in this case.
2. Access to Sources of Proof
Mattel's documents are located in New York. However, Defendants'
documents related to the creation and operation of the
site and to the registration of the domains are located in Houston,
Texas. This factor is thus also neutral.
3. The Convenience of the Parties
Mattel is a Delaware corporation with its principal place of business
in California. Headquarters contact information, listed in Mattel's
website, refer to El Segundo, California; Madison, Wisconsin; and East
Aurora, New York. Mattel is "the world's largest manufacturer of toys,
games and playthings" (Mattel's Mem. at 2) with offices in North America,
Central and South America, Europe, and Asia. Mattel also has an operating
office in New York, New York.
Giddings is an individual and sole proprietor of Procount Business
Services, located in Houston, Texas. 877NetMall is also located in
Thus, Mattel is a worldwide manufacturer with offices all over the
United States, and Defendants are a one-man outfit owned by Giddings,
located only in Houston, Texas. Changing venue from the Southern District
of New York to the Southern District of Texas does not merely shift the
inconvenience of litigating in a particular forum from one party to
another. Wechsler v. Mackie Int'l Trade, Inc., No. 99 Civ. 5725, 1999
U.S. Dist. LEXIS 19800, at *18 (S.D.N.Y. Dec. 21, 1999). Rather, an
assessment of the
parties' convenience points to the Southern District of Texas as the forum
4. The Relative Means of the Parties
As Mattel itself alleges, it is "the world's largest manufacturer of
toys, games and playthings" (Mattel's Mem. at 2), and "[a]nnual sales of
Barbie dolls worldwide currently exceed $1.6 billion (Mattel's Mem. at
3).*fn5 `Mattel's office consists of approximately 75,000 square feet,
and it employs approximately 170 people.
Giddings operates out of a 1,000 square foot office/ warehouse space
located in Houston, Texas. Procount Business Services has no physical
assets and does not produce any revenue; 877NetMall has no assets and
does not produce any revue; and MetalToys.com is a sole proprietorship
that has very little assets and produces revenues that resulted in profit
of less than $6,000 in 2002. Giddings does not own property or a car and
lives with a friend in Houston, Texas.
Giddings claims that he does not have the resources to defend this
action in New York. Mattel argues that the difference
in the parties' means is neutral in this case as it expects the trial to
only last one day and Giddings' "sole expense" is "his plane ticket to
New York. (Mattel's Mem. at 8.)
However, Mattel too flippantly dismisses the importance of this factor.
The trial may very well last several days; Giddings' expense will, at the
very least, include a stay in a hotel in New York; and having the action
in New York may also pose difficulties for motions argued by the parties
and discovery. This factor thus points to a transfer to the Southern
District of Texas.
5. The Convenience of the Witnesses
A party seeking to rely on the convenience of the witnesses factor must
identify the material witnesses and supply a general description of what
their testimony will cover. Weschler, 1999 U.S. Dist. LEXIS 19800, at
Mattel has stated that it intends to call its investigator, Fastone,
who resides in New York, New York, at trial. Fastone will testify as to
his investigation and the purchase of Barbie products through the
Internet. Giddings has not referred to any witnesses he intends to call.
This factor thus weighs against transfer.
6. The Availability of Process to Compel Attendance
As all of Defendants' witnesses are parties to this action, this factor
7. Forum's Familiarity with the Governing Law
This case raises questions of federal law. Therefore, either forum is
equally capable of hearing and deciding those questions. See, e.g.,
Dealtime.com Ltd, v. McNulty, 123 F. Supp.2d 750, 757 (S.D.N.Y. 2000).
This factor is, therefore, neutral.
8. The Plaintiff's Choice of Forum
A plaintiff's choice of forum is generally entitled to "substantial
consideration." In re Warrick, 70 F.3d 736, 741 (2d Cir. 1995). However,
the plaintiff's choice of forum is entitled to less weight when it has
not chosen the forum in which it resides. Robomatix Int'l, Inc. v.
Aluminum Co. of America, No. 92 Civ. 6281, 1993 U.S. Dist. LEXIS 7034, at
*4 (S.D.N.Y. May 20, 1993) ("The weight given to the plaintiff's choice
of forum is . . . diminished where the plaintiff brings suit outside his
home forum."); 800-Flowers, Inc. v. Intercontinental Flowers. Inc.,
860 F. Supp. 128, 135 (S.D.N.Y. 1994) (affording plaintiff's choice of
forum less weight and awarding transfer when plaintiff chose forum
that neither corresponded to locus of operative facts nor was defendant's
state of incorporation); Brown, 1996 WL 257614, at *3 (holding that a
plaintiff's choice of forum is accorded "little weight" "when a plaintiff
brings suit outside his home forum").
Here, Mattel is a Delaware corporation with its principal place of
business in California. The Southern District of New York is thus not its
9. Totality of the Circumstances; Trial Efficiency and the Interests
In the interests of justice and trial efficiency, this action should be
transferred to the Southern District of Texas. The locus of operative
facts is in both the Southern District of Texas and New York; Defendants'
documents related to the website in question are located in Houston
Texas; Mattel is a worldwide manufacturer with offices all over the
United States, and Defendants are a one-man outfit, located only in
Houston, Texas; maintaining the action in New York will pose a heavy
financial burden for Defendants; neither party is located in the Southern
District of New York, and the Defendants are located in Houston, Texas.
IV. Mattel's Motion for Summary Judgment is Denied as Premature
Mattel's Motion for summary judgment is denied as premature. Defendants
Procount Business Services and 877NetMall are not adequately represented
since they cannot appear pro se in this action. The interests of justice
support the transfer of this motion to the Southern District of Texas.
Moreover, discovery is not complete, and the parties disagree on the
facts. Giddings claims that his Barbie virtual domains simply point to
where licensed Barbie items are sold, "similar to the way a `brick and
mortar' toy store would have an isle sign." (Giddings' 9/23/03 Letter at
For the reasons set forth, Giddings' motion is denied in part and
granted in part, and Defendants' motion is denied. Defendants Procount
Business Services and 877NetMall are ordered to seek counsel, and this
action will be transferred to the Southern District of Texas.
It is so ordered.