The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendant Nucoil Industries, Inc. ("Nucoil USA") has moved to
dismiss the complaint filed against it by plaintiffs Wafios
Machinery Corporation and Wafios AG (collectively, "Wafios")
pursuant to Fed.R.Civ.P. 12(b)(2) and (3). Defendant Nucoil
Industries Co. Ltd. ("Nucoil Taiwan" has moved separately to
dismiss the claims against it pursuant to Rule 12(b)(2), (3) and
(5). For the reasons stated below, both motions are denied with
leave to renew following limited jurisdictional discovery.
Wafios filed the complaint in this action on December 11, 2003,
alleging patent infringement by both Nucoil USA and Nucoil
Taiwan. An answer was filed by Nucoil USA on March 31, 2004, and
an amended answer including counterclaims was filed on April 5,
2004. Nucoil USA's motion was filed on April 1, 2004. Following
the exchange of briefs, oral argument was heard on the motion on
April 21, 2004, at which time the motion was deemed fully
submitted.
Nucoil Taiwan's motion was filed on April 22, 2004. Following the
exchange of briefs, oral argument was heard on the motion on May 19,
2004, at which time the motion was deemed fully submitted. Discussion
Both Nucoil USA and Nucoil Taiwan argue that personal
jurisdiction is lacking and that venue is improper, and the
complaint should accordingly be dismissed. Nucoil Taiwan also
argues that service of process on it in Taiwan was improper.
Nucoil USA Has Not Waived Its Jurisdictional Defenses
Wafios argues that Nucoil USA's counterclaims for defamation,
tortious interference with prospective economic advantage and
violation of the Connecticut Unfair Trade Practices Act, Conn.
Gen. Stat. § 42-110b ("CUTPA") are permissive, and therefore that
Nucoil USA has waived the defenses of lack of personal
jurisdiction and improper venue.*fn1
Although Nucoil USA has not contested the issue, the premise of
Wafios's argument is incorrect. Although the Second Circuit has
not ruled on the question of whether the assertion of a
counterclaim, whether permissive or compulsory, waives the
defense of personal jurisdiction, and has observed that "federal
law on this issue appears to be in disarray," Cargill, Inc. v.
Sabine Trading & Shipping Co., 756 F.2d 224, 229 (2d Cir. 1985);
see also PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1111
n. 4 (2d Cir. 1997); Matter of Arbitration between InterCarbon Bermuda,
Ltd. and Caltex Trading and Transport Corp., 146 F.R.D. 64,
69-70 (S.D.N.Y. 1993) (collecting caselaw demonstrating opposing
views on the issue), a finding of waiver would "exalt form over
substance in a way that the adoption of the Federal Rules of
Civil Procedure rendered obsolete." Local Union No. 38, Sheet
Metal Workers' Int'l Ass'n, AFL-CIO v. A & M Heating, Air
Conditioning, Ventilation & Sheet Metal, Inc., 314 F. Supp.2d 332,
352 (S.D.N.Y. 2004).
The rationale for finding that a permissive counterclaim waives
the defenses of lack of personal jurisdiction is that the
defendant has affirmatively sought the aid of the court. See
Beaunit Mills, Inc. v. Industrias Renidas F. Matarazzo,
23 F.R.D. 654, 656-57 (S.D.N.Y. 1959). However, when both
jurisdictional defenses and counterclaims are included in a
single responsive pleading, it is appropriate to treat the
counterclaim "as conditional: its assertion being hypothecated
upon an adverse ruling on Defendant's jurisdictional defenses."
Queen Noor, Inc. v. McGinn, 578 F.Supp. 218, 220 (S.D.Tex.1984)
(citing Lomanco, Inc. v. Missouri Pacific Railroad Company,
566 F.Supp. 846 (E.D.Ark.1983) and In Re Arthur Treacher's Franchisee
Litigation, 92 F.R.D. 398 (E.D.Pa.1981)). Such an approach best serves
both the language of Rule 12(b) and the policy behind it, as articulated
by the Third Circuit over thirty years ago:
Rule 12(b) provides a defendant with the option of raising
jurisdictional defenses by motion or by answer. If we were to take the position that a defendant, by
raising his jurisdictional defenses in the same
pleading in which he asserted a counterclaim, waived
his jurisdictional defenses, we would in effect be
engrafting a judicial exception to Rule 12(b). We
would be requiring a defendant to raise his
jurisdictional defenses by motion when he intends to
file a counterclaim in his responsive pleading. This
requirement would be contrary to the option provided
to the defendant in Rule 12(b).
Furthermore, the policy behind Rule 12(b) militates
against our finding a waiver where a defendant files
a counterclaim in the same pleading in which he
asserts jurisdictional defenses. The purpose behind
Rule 12(b) is to avoid the delay occasioned by
successive motions and pleadings and to reverse the
prior practice of asserting jurisdictional defenses
by `special appearance.'
Neifeld v. Steinberg,
438 F.2d 423, 428-29 (3d Cir. 1971)
(citing 5 C. Wright and A. Miller, Federal Practice and
Procedure: Civil § 1362, at 647-48 (1969)). Since the Neifeld
decision, at least three other Circuits have also held that the
filing of a counter-claim, whether permissive or compulsory, does
not operate as a waiver of an objection either to personal
jurisdiction or to venue, "whether the objection is raised by
motion or answer, provided that the objection is not otherwise
waived in the course of the litigation." Bayou Steel Corp. v.
M/V Amstelvoorn,
809 F.2d 1147, 1149 (5th Cir. 1987); see
also Chase v. Pan-Pacific Broadcasting, Inc., 750 F.2d 131,
132 (D.C. Cir. 1984) (Ginsburg, J.); Gates Learjet Corp. v.
Jensen,
743 F.2d 1325, 1330 n. 1 (9th Cir. 1984); and
generally Wright & Miller, supra, § 1397 (1990) (stating view
that the "trend in more recent cases is to hold that no
Rule 12(b) defense is waived by the assertion of a counterclaim,
whether permissive or compulsory"). Accordingly, Nucoil USA has
not waived its right to assert its jurisdictional defenses, and it is not
necessary to decide whether its counterclaims are permissive or
compulsory.
Personal Jurisdiction Over Nucoil USA
Nucoil USA argues that Wafios' complaint should be dismissed
for lack of personal jurisdiction pursuant to Rule 12(b)(2),
arguing that Wafios has not shown that Nucoil USA has sufficient
contacts to the forum to subject it to jurisdiction. Wafios
conversely argues that specific jurisdiction may be exercised
over Nucoil USA because of its internet website through which
potential customers may request sales literature.
Plaintiffs bear the burden of establishing that the court has
jurisdiction over a defendant when served with Rule 12(b)(2)
motion to dismiss. DiStefano v. Carozzi North American Inc.,
286 F.3d 81, 84 (2d Cir. 2001); Robinson v. Overseas Military
Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). Because an
evidentiary hearing has not been held, the plaintiffs need only
make a prima facie showing of jurisdiction through the
complaint's allegations and affidavits in order to defeat the
motion to dismiss. CutCo Indus., Inc. v. Naughton, 806 F.2d 361,
363 (2d Cir. 1986); Network Interprises, Inc. v. APBA Offshore Prods.,
Inc., 01 Civ. 11765, 2002 WL 31050846, at *8 (S.D.N.Y. Sept. 12,
2002). The facts must be construed in the light most favorable to
plaintiffs. Cooper, Robertson & Partners L.L.P. v. Vail,
143 F. Supp.2d 367, 370 (S.D.N.Y. 2001) (citing Hoffritz for Cutlery
Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985)). In
assessing whether personal jurisdiction is authorized, the court
must look first to the long-arm statute of the forum state.
Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997).
If the exercise of jurisdiction is appropriate under that
statute, the court must decide whether such exercise comports
with the requisites of due process. Id. In patent infringement
cases, "when analyzing personal jurisdiction for the purposes of
compliance with federal due process, Federal Circuit law, rather
than regional circuit law, applies." 3D Systems, Inc. v.
Aarotech Laboratories, Inc., 160 F.3d 1373, 1377 (Fed. Cir.
1998).
New York's long-arm statute allows for personal jurisdiction
over a non-domiciliary when that person or his or her agent:
(2) commits a tortious act within the state . . .; or
(3) commits a tortious act without the state causing
injury to person or property within the state . . .,
if he [or she] (i) regularly does or solicits
business, or engages in any other persistent course
of conduct, or derives substantial revenue from goods
used or consumed or services rendered, in the state,
or (ii) expects or should reasonably expect the act
to have consequences in the state and derives
substantial revenue from interstate or international
commerce . . .
N.Y.C.P.L.R. § 302(a)(2)-(3) (McKinney 2001). The tortious act
alleged by Wafios is the violation of 35 U.S.C. ...