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FRIARS NATIONAL ASSOCIATION v. 9900 SANTA MONICA

May 2, 2005.

FRIARS NATIONAL ASSOCIATION, Plaintiff,
v.
9900 SANTA MONICA, INC. d/b/a THE FRIARS OF BEVERLY HILLS and DARREN SCHAEFFER, Respondent.



The opinion of the court was delivered by: P. KEVIN CASTEL, District Judge

MEMORANDUM AND ORDER

The Complaint in this action was filed on June 16, 2004. Plaintiff Friars National Association ("Friars National") alleges that defendants 9900 Santa Monica, Inc. ("9900SM"), doing business as The Friars of Beverly Hills ("Beverly Hills Friars"), and its chief executive officer and president Darren Schaeffer are liable for trademark infringement under sections 32(1) and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114(a), 1125(a), trademark dilution, 15 U.S.C. §§ 1125(c), violation of New York General Business Law § 368-d, and common law unfair competition claims. (Complaint ¶¶ 20-53)

Shortly after this action was filed, defendants expressed an intention to move pursuant to Rule 12(b)(2), Fed.R.Civ.P., to dismiss the Complaint for lack of personal jurisdiction, or, in the alternative, to transfer this action to the Central District of California pursuant to 28 U.S.C. § 1631 or 1404(a). At a pretrial conference held on September 2, 2004, I granted the parties leave to conduct discovery during a 45-day period, limited to the factual basis for personal jurisdiction over the defendants. Following the close of that period, defendants filed their motion to dismiss for lack of personal jurisdiction. For the reasons explained below, I grant the defendants' motion.

  1. Background

  Friars National is a New York membership corporation, with its principal place of business at 57 E. 55th St., New York, NY. (Complaint ¶ 2) It was formed in 1904, and designates itself with the mark "Friars Club." (Complaint ¶ 7) George M. Cohan, Milton Berle, Ed Sullivan, and Frank Sinatra all have served as its chairmen, or "Abbots." (Complaint ¶ 8) Friars National hosts events related to the entertainment industry, and perhaps is best known for its gala "roasts." (Complaint ¶¶ 7, 9) The Complaint describes the roasts as "ritualistic dinners" in which a celebrity is "`honored' with loving ridicule by his or her high-profile peers." (Complaint ¶ 9) For example, Friars National points out, in October 2004, a roast held for real estate developer and television personality Donald Trump received national press coverage. (Brickell Aff. Ex. B) Trump was lampooned by speakers including Regis Phillbin, Artie Lange and Al Sharpton. (Brickell Aff. Ex. B)

  Friars National contends that it owns federal registration for the "Friars Club" mark for fundraising, health club purposes, and other services. (Complaint ¶ 11) It alleges that defendants Schaeffer and 9900SM infringed on its registered mark by hosting celebrity roasts and soliciting customers. (Complaint ¶¶ 14-18, 23, 32) The plaintiff alleges that the defendants' actions will result in consumer confusion. (Complaint ¶¶ 25, 34)

  Defendant 9900SM is a California corporation with its principal place of business in Beverly Hills, California. (Complaint ¶ 3) 9900SM acquired the assets of the Beverly Hills Friars pursuant to an Asset Purchase Agreement apparently executed in February 2004. (SM 0001-0030, attached at Brickell Aff. Ex. E) 9900SM does not appear to be organized as a "membership corporation." The Beverly Hills Friars operates a restaurant and sometimes invites club members to holiday brunches.*fn1 (Brickell Aff. Ex. H) It also hosts comedy-themed events, including a charity benefit called "Rock Comedy" that featured appearances by comics Tommy Davidson and Bobby Lee, and a taping for a prime-time television program, "Last Comic Standing." (Brickell Aff. Exs. H, I) These events take place at defendants' facilities in Beverly Hills, California. (Brickell Aff. Exs. H, I) According to the Complaint, Schaeffer "is a conscious, dominant and active force behind the wrongful acts" of 9900SM. (Complaint ¶ 4) The Complaint alleges that Schaeffer oversaw infringing activities for his own individual gain and benefit. (Complaint ¶ 4)

  The plaintiff asserts that venue in this District is proper because "a substantial portion of the Defendants' unlawful activities" were committed or had an impact in New York. (Complaint ¶ 6) In their motion papers, defendants contend that 9900SM has no systematic or continuous presence in New York. It asserts that it has never conducted business in the state of New York, never maintained a bank account or facilities in New York, never retained New York agents, never advertised or solicited business in New York, and that defendant Darren Schaeffer has not been in the state of New York at any time during the past five years. (Schaeffer Aff. ¶¶ 3, 5-6)

  "On a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction, plaintiff bears the burden of showing that the court has jurisdiction over the defendant." In re Magnetic Audiotape Antitrust Litigation, 334 F.3d 204, 206 (2d Cir. 2003) (per curiam). In support of its argument that this Court possesses personal jurisdiction over defendants, the plaintiff cites a list of names produced during jurisdictional discovery. (SM0059, attached at Brickell Aff. Ex. G) The names appear in an e-mail with the subject heading "NY Friar Information.xis." The list contains first names, with last names redacted, along with membership numbers and dates of recent activity. According to the deposition testimony of Marc Glantz, who is identified elsewhere as the controller of 9900SM, the list identifies persons affiliated with the Beverly Hills Friars who maintained mailing addresses in New York. (Glantz Dep. at 17-21) The list was created in response to a document request in this litigation. (Glantz Dep. at 21) Glantz testified that three of the 28 individuals listed were members of the Beverly Hills Friars, while acknowledging that all 28 on the list received monthly correspondence from the Beverly Hills Friars. (Glantz Dep. at 17-19; see also Schaeffer Aff. ¶ 8) Of the 25 who were not formal members, Glantz testified that they were "people who had addresses in our or [sic] member software with addresses in New York state for billing purposes." (Glantz Dep. at 17) Mailings received by these individuals included invitations to holiday brunches, and an invitation to a taping for "Last Comic Standing," a television program broadcast by NBC. (Attached at Brickell Aff. Exs. H, I) All of these events were located in California. As far as the record on this motion shows, the Beverly Hills Friars only renders services — meals and comedy shows — in California. It ships no products of any kind into New York.

  To determine whether, at the time of service of process, there was a basis for personal jurisdiction, the Court first looks to the forum state's law. Whitaker v. American Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001). Pursuant to CPLR 301, a New York court may exercise jurisdiction over persons and corporations present and doing business in New York. Plaintiff does not argue that jurisdiction exists under section 301, and looks instead to New York's long-arm statute, CPLR 302. CPLR 302(a) provides in relevant part:
As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nondomiciliary, 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. . . .
(McKinney's 2001). Plaintiff contends that this Court has personal jurisdiction over the defendants pursuant to both CPLR 302(a)(1) and (2).

  2. Plaintiff Has Not Established Personal Jurisdiction Under CPLR 302(a)(1)

  To maintain personal jurisdiction over a nondomiciliary defendant under CPLR 302(a)(1), the defendant must transact business in New York, and the claim against the defendant must arise out of that business activity. Agency Rent A Car Systems, Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir. 1996). As set forth by the Court of Appeals in McGowan v. Smith, 52 N.Y.2d 268, 272, 437 N.Y.S.2d 643, 645, 419 N.E.2d 321, 323 (1981), a suit against a nondomiciliary arises under CPLR 302(a)(1) if there exists an "articulable nexus" between the transacted business and the cause of action upon which suit is brought. "[O]ne transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted." Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 522 N.E.2d 40, 43, 527 N.Y.S.2d 195, 198-99 (1988). Section 302(a)(1) establishes personal jurisdiction over nonresidents who have "purposefully availed [themselves] of the privilege of conducting activities within New York and thereby invoked the benefits and protections of its laws. . . ." Parke-Bernet Galleries v. Franklyn, 26 N.Y.2d 13, 18, 308 N.Y.S.2d 337, 341, 256 N.E.2d 506, 508-09 (1970) (quotation marks omitted).

  In addition to satisfying CPLR 302(a)(1), the exercise of jurisdiction must satisfy due process. Due process "requires that a defendant have enough minimum contacts with the forum state so that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" PDK Labs., Inc. v. Friedlander, 103 F.3d 1105, 1110 (2d Cir. 1997) (quoting International Shoe v. Washington, 326 U.S. 310, 316 (1945)). Due process is satisfied if the defendants purposely and sufficiently availed themselves of the privileges of conducting business in New York, so that it would be reasonable to anticipate being subject to suit in New York. Id. at 1110-11.

  Because a motion to dismiss pursuant to Rule 12(b)(2) based on lack of personal jurisdiction is "inherently a matter requiring the resolution of fact issues outside of the pleadings . . . all pertinent documentation submitted by the parties may be considered in deciding the motion." St. Paul Fire & Marine Ins. Co. v. Eliahu Ins. Co., 1997 WL 357989, at *1 (S.D.N.Y. June 26, 1997) (quotation marks omitted), aff'd 152 F.3d 920 (2d Cir. 1998) (table). No party has argued that an evidentiary hearing is needed to resolve this motion. Where "the parties have conducted extensive discovery regarding the defendants' contacts with the forum state, but no evidentiary hearing has been held — the plaintiff's prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by [the ultimate trier ...


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