Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

GROSS v. BARE ESCENTUALS

United States District Court, S.D. New York


April 6, 2005.

DENNIS F. GROSS, M.D. d/b/a M.D. SKINCARE, Plaintiff,
v.
BARE ESCENTUALS, INC., and BIOCEUTIX, INC., Defendant.

The opinion of the court was delivered by: ROBERT CARTER, Senior District Judge

OPINION

INTRODUCTION

Plaintiff Dennis F. Gross M.D. d/b/a M.D. Skincare has a single business location in New York (Gross Decla. ¶¶ 3, 8). M.D. Skincare is in the business of formulating, selling and marketing a wide variety of skin care products. (Gross Decla., ¶¶ 1-2). Defendant Bioceutix, formerly known as MDF Acquisition Corporation, is a Deleware corporation with its principal place of business in California. (Blodgett Aff. ¶ 21). Bioceutix operates an Internet website which provides information about it's products and through which its products may be purchased. Bioceutix also markets its products through limited solicitation of spas and salons and at Bare Escentuals retail stores. (Blodgett Aff. ¶ 22). Co-Defendant Bare Escentuals, formerly known as Dolphin Acquisition Corporation, is a California corporation with its principal place of business in California. Bare Escentuals is in the business of selling its goods at its own retail stores, to an Illinois wholesaler, and on the QVC cable network. (Blodgett Aff. ¶¶ 6-10). Jurisdiction is properly based on the diversity of the parties.

  In March 2003, Bioceutix learned that Plaintiff, a competitor in the skin care business, was using two marks, M.D. SKINCARE AND M.D. SKIN CARE (the alleged "Infringing Designations"), for products identical to those offered by Bioceutix under the M.D. Family of Marks. On March 17, 2003, Bioceutix sent a "cease and desist" letter to M.D. Skincare alleging infringement of its M.D. Family of Marks in violation of federal law and the laws of the State of California. Defendant demanded that plaintiff cease using the designation "M.D." in connection with the sale of skin care products. On April 8, 2003, plaintiff responded by denying infringement and declined to cease use of the "M.D." designation in connection with skin care products. Plaintiff also alluded to an "accommodation" that had been reached with Bioceutix's predecessor with regard to the M.D. FORMULATIONS mark. On April 24, 2003, counsel for Bioceutix again contacted Plaintiff's counsel and requested evidence of the "accommodation" and renewed its demand that all use of the "M.D." designation as part of plaintiff's trade name, for its line of cosmetics or in any other manner associated with its business be terminated. On May 1, 2003, without responding to Bioceutix's April 24, 2003 letter, Plaintiff filed this action seeking a declaration of unenforceability and non-infringement of the trademark M.D. FORMULATIONS owned by Bare Escentuals, Inc. and Bioceutix Inc. On July 1, 2003, Bioceutix initiated an action for, inter alia, trademark infringement against Plaintiff in the Northern District of California. That action has since been dismissed applying the first-to-file rule.

  The defendants in this case submitted multiple motions for the court to consider. Defendants filed a motion to dismiss for a lack of personal jurisdiction, a motion to dismiss Bare Escentuals for misjoinder, a motion to dismiss or transfer for improper venue, and a motion to stay declaratory relief action. The latter two motions have been rendered moot by the dismissal of the Northern District of California action. The court will therefore address the remaining motions in turn starting with the Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction.

  MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

  In order to survive a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff must make a prima facie showing "through affidavits or other evidence that the defendant's conduct was sufficient for the court to exercise personal jurisdiction." Hardy v. Ford Motor Car, 20 F. Supp.2d 339, 341 (D. Conn. 1998) (quoting Ensign-Bickford v. ICI Explosive USA, Inc., 817 F. Supp. 1018, 1025 (D. Conn. 1993)). The court must construe all facts in the light most favorable to the plaintiff, and resolve all doubts in plaintiff's favor. CutCo Indus. Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986); Fort Knox Music, Inc. v. Baptiste, 139 F. Supp.2d 505, 508 (S.D.N.Y. 2001). Allegations made in a plaintiff's complaint are to be "taken as true" but only "to the extent they are uncontroverted" by the defendant's affidavits. Electronic Realty Assoc., L.P. v. Paramount Pictures Corp., 935 F. Supp. 1172, 1175 (D. Kan. 1996). Personal jurisdiction in a diversity case is determined by the law of the state in which the district court sits. Arrowsmith v. United Press Int'l, 320 F.2d 219, 222-225 (2d Cir. 1963). The inquiry into whether a New York federal court has personal jurisdiction is two-fold. "First, the acts of the non-domiciliary defendant must be within the scope of New York's long-arm statutes. Second, personal jurisdiction must comport with the Due Process Clause of the Fifth and Fourteenth Amendments." 5-Star Management, Inc. v. Rogers, 940 F. Supp. 512, 516 (E.D.N.Y. 1996). Because the "jurisdictional reach" provided by New York's long-arm statues is "narrower than the maximum permissible under the Due Process clause[,]" this court need only consider the second step in the event the first step is satisfied.

  Two components of the long arm are applicable here N.Y.C.P.L.R. § 301's requirement that a defendant be `doing business' in the state and N.Y.C.P.L.R. § 302(a)(1)'s requirement that a defendant `transact business' in the state. Fort Knox Music Inc. v. Baptiste, 139 F. Supp.2d 505, 506 (S.D.N.Y. 2001).

  Since however, the plaintiff has not responded to the defendant's contention that jurisdiction is not conferred based on N.Y.C.P.L.R. § 302(a)(1) — `transacting business' prong thereby resting their objection to the motion solely on the "doing business" component of the long arm statute, the court will limit its analysis to that portion of the statute.

  DOING BUSINESS

  Personal jurisdiction may be established under N.Y.C.P.L.R. § 301 when a defendant is "engaged in such a continuous course of `doing business' [in New York] as to warrant a finding of its `presence' in [New York]." Landoil Res. Corp. v. Alexander & Alexander Serv., Inc., 918 F.2d 1039, 1043 (2d Cir. 1990) (quoting McGowan v. Smith, 52 N.Y.2d 305, 310 (1982)). The test for "doing business" is "a simple pragmatic one." Bryant v. Finnish Nat'l Airline, 15 N.Y.S.2d 625 (1965). This pragmatic test "focuses upon factors including: existence of an office in New York; the solicitation of business in the state; the presence of bank accounts and other property in the state; and the presence of employees of the foreign defendant in the state." Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985) (citations omitted). Jurisdictional determinations are "necessarily fact sensitive because each case is dependent upon its own particular circumstances." See Stark Carpet Corp v. M-Geough Robinson, Inc., 481 F.Supp 499, 504 (S.D.N.Y. 1980) (citing Manchester Modes, Inc. v. Lilli Ann Corp., 306 F. Supp. 622, 624 (S.D.N.Y. 1969)). The Court must therefore analyze a defendant's connections to the forum state "not for the sake of contact-counting, but rather for whether such contacts show a continuous, permanent and substantial activity in New York." Weinstein, Korn & Miller, New York Civil Practice, para. 301.16, at 3-32.

  Plaintiff argues that jurisdiction is proper under Section 301 because defendants sell their products to spas within the judicial district to consumers (Maldonado Decla., Exs. 1-4). Plaintiffs also site the upcoming opening of a retail store in New York City as the basis for establishing personal jurisdiction (Maldonado Decla., Ex. 3). Another supporting factor offered by the plaintiff is the defendants' continuous and systematic solicitation of business in New York through trade publications, the Internet and through an employee who visits New York to drum up business. Finally, plaintiffs claim that the defendants "continuously and systematically ship goods into New York and that defendants cannot escape jurisdiction by hiding behind a third party wholesaler, who ships the goods into New York on their behalf.

  The above-mentioned factors are attributed to the defendants, without distinction between Bare Escentuals and Bioceutix. The court will determine if these factors are sufficient to constitute "doing business" as contemplated in N.Y.C.P.L.R. § 301 with regard to each defendant individually.

  1. Defendant Bare Escentuals.

  Bare Escentuals, formerly known as Dolphin Acquisition Corporation, is a California corporation with its principal place of business in California. Bare Escentuals, like Bioceutix, is wholly owned by MD Beauty although both are wholly separate corporate entities.

  Bare Escentuals has no offices, property, employees or agents in the State of New York. Further, Bare Escentuals has undertaken no advertising targeting the State of New York. (Blodgett Aff. at ¶ 6).

  The plaintiff claims that this court has personal jurisdiction over Bare Escentuals because their products are sold by spas within the judicial district. (Opp. At pp. 12-14). In actuality, Bare Escentuals sells its products through its retail stores, none of which are located in New York. (Blodgett Aff. at ¶¶ 6 & 8 and Exhibit A thereto). Plaintiff has provided no evidence that Bare Escentuals' products are sold by spas in New York. Instead, plaintiff has provided a list of spas in the Southern District of New York that carry M.D. Formulations, a product line owned by Bioceutix, not Bare Escentuals. (Exhibits 1-4 to the Maldonado Decl.; Blodgett Aff. at ¶¶ 14 & 18).

  The plaintiff also suggests that personal jurisdiction is conferred over Bare Escentuals because it is hoping to open a retail store in New York City. (Opp. at 13; Exhibit 6 to the Maldonado Decl.). Whether or not Bare Escentuals opens a retail store in New York in the future is irrelevant for purposes of personal jurisdiction. "To obtain jurisdiction under CPLR 301, defendant must be `doing business' at the time the action is brought[.]" The Williams Systems, Ltd. v. Total Freight Systems, Inc., 27 F. Supp.2d 386, 388 (E.D.N.Y. 1998). See also Puerto Rico Maritime Shipping Auth. v. Almogy, 510 F. Supp. 873, 878 (S.D.N.Y. 1981).

  Plaintiff claims that Bare Escentuals solicits business in New York continuously and systematically through trade publications, the Internet and an employee who visits New York to "drum up" business. (Opp. at 14). In support of this claim, plaintiff has provided advertisements of M.D. Formulations products in a national trade publication (Gross Decl. at ¶ 6). However, the M.D. Formulations business and the M.D. Family of Marks is owned and marketed by Bioceutix, not Bare Escentuals. (Blodgett Aff. at ¶¶ 14 & 18-20). Bare Escentuals' website, at the time of the filing of this action, identified retail stores located in California, Colorado, Pennsylvania, Missouri and Texas — not New York. (Blodgett Aff. at ¶ 8 and Exhibit A thereto). An employee of Bioceutix, not Bare Escentuals, visited spas and salons in New York for the purpose of "drumming up" business.

  The only shipment of Bare Escentuals' products into New York resulted from appearances on the QVC home, shopping channel by Bare Escentuals' President and not from significant solicitation efforts conducted from within the State of New York. (Blodgett Aff. at ¶¶ 7 & 10). The mere shipment of products into New York is insufficient to confer personal jurisdiction. Instead, substantial solicitation in New York is required for the shipment of products to New York to confer personal jurisdiction. Beacon Enter., Inc. v. Menzies, 715 F.2d 757, 763 (2d Cir. 1983). As described above, Bare Escentuals does not conduct such solicitation directed toward New York. (Blodgett Aff. at ¶ 6).

  Finally, Bare Escentuals provides its products to an Illinois-based wholesaler who resells the products in the wholesaler's spas and salons without any input, direction or guidance from Bare Escentuals. (Blodgett Aff. at ¶ 9).

  None of the factors offered by the plaintiff show a continuous, permanent and substantial activity in New York by Bare Escentuals sufficient to confer jurisdiction.

  2. Defendant Bioceutix

  Bioceutix is a Deleware corporation with its principal place of business in California. (Blodgett Aff. at ¶ 21). Bioceutix is a wholly owned subsidiary of MD Beauty, Inc. and is a wholly separate corporate entity from Bare Escentuals. (Id. at ¶ 5). Bioceutix has no offices, telephone listings, retail stores, or bank accounts in the state of New York. (Id. at ¶ 21). Bioceutix does, however, operate an Internet website which provides information about its products and through which such products may be purchased. Additionally, an employee of Bioceutix visits spas and salons in New York to generate interest in Bioceutix's products and for solicitation purposes. (Id. at. ¶ 22).

  It should be noted that the "solicitation of business alone will not justify a finding of corporate presence in New York with respect to a foreign manufacturer or purveyor of services." Laufer v. Ostrow, N.Y.2d at 310; See Frummer v. Hilton Hotels Int'l, Inc., 19 N.Y.2d at 536; Miller v. Surf Properties, 4 N.Y.2d 475, 480. On the other hand, if the solicitation is substantial and continuous, and defendant engages in other activities of substance in the state, then personal jurisdiction may properly be found to exist. See Beacon Enterprises, Inc. v. Menzies, 715 F.2d 757, 763 (2d Cir. 1983); Aquascutum of London, Inc. v. S.S. American Champion, 426 F.2d 205, 211 (2d. Cir. 1970); Laufer, supra, 55 N.Y.2d at 309-11; D. Siegal, New York Practice, § 82, at 90-91.

  New York courts have held where a defendant has no office, telephone, bank account, or warehouse in New York nor owns any property there, that jurisdiction under Section 301 does not lie where the total amount of sales in New York each year constitutes 4% or $400,000, of total sales. New England Laminates Co. v. Murphy, 36 N.Y.S.2d 730, 733, 735 (Sup.Ct. 1974); see also Hennigan v. Taser International, Inc., 2001 U.S. Dist. LEXIS 1857, 00 Civ. 2981 (MBM), 2001 WL 185122, at *2 (S.D.N.Y. Feb. 26, 2001) (finding insufficient contacts under Section 301 where New York sales comprised 3%, or under $60,000, of total nationwide sales).

  Bioceutix's sales of goods to entities in New York via sales to spas and salons and through its Internet website constitute only 3-4 percent of its total product sales under the M.D. Family of Marks. (Blodgett Aff. at ¶ 25). Bioceutix's solicitation of business in New York is insufficient to constitute substantial solicitation and does not provide the basis for personal jurisdiction.

  CONCLUSION

  For the aforementioned reasons the defendant's motion to dismiss for lack of personal jurisdiction is hereby granted. The court need not reach a decision on the other motions submitted by defendants.

  IT IS SO ORDERED.

20050406

© 1992-2005 VersusLaw Inc.



Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.