United States District Court, W.D. New York
June 15, 2005.
IVOCLAR VIVADENT, INC., Plaintiff,
ULTIDENT, INC., Defendant.
The opinion of the court was delivered by: JOHN T. ELFVIN, Senior District Judge
MEMORANDUM and ORDER*fn1
Plaintiff Ivoclar Vivadent, Inc. commenced this trademark
infringement action on December 13, 2004 against defendant
Ultident, Inc. Plaintiff alleges that defendant has infringed and
continues to infringe on plaintiff's trademarks in violation of
federal and state law by wrongfully and illegally importing,
advertising, selling and distributing some of plaintiff's dental
products ("Products"). On February 14, 2005 defendant filed a
Motion to Dismiss for lack of jurisdiction pursuant to Rule
12(b)(2) of the Federal Rules of Civil Procedure ("FRCvP").
Plaintiff, in opposition to defendant's Motion to Dismiss, claims
that defendant is subject to the Court's jurisdiction and
alternatively requests jurisdictional discovery if the
undersigned does not find a prima facie showing of personal
jurisdiction. For the reasons set forth below, defendant's Motion
will be granted and plaintiff's request for jurisdictional
discovery will be denied.
Plaintiff alleges the following in its Complaint. Plaintiff
markets, distributes and sells the Products nationally and
internationally, has valid trademarks with regard to the Products and has a reputation for excellent product quality,
customer service and reliability. Plaintiff claims that defendant
unlawfully gained possession of the Products and distributed and
sold the Products in the United States without the requisite
safety information and procedures and profited from such
acts.*fn2 As such, plaintiff claims that its customers are
likely to be misled, confused or deceived as to the source of the
Products, threatening the distinctive quality of plaintiff's
trademarks and the integrity of plaintiff's business reputation.
With regard to the jurisdiction issue, plaintiff claims that
defendant a Canadian corporation with offices in Quebec and no
offices in New York transacted business within, contracted to
supply goods and services in, committed a tortious act within and
without, caused damages to plaintiff within and regularly engaged
in or solicited business in and derived substantial revenue from
goods used or services rendered in New York State. Plaintiff
claims that defendant sold and shipped the Products to Henry
Schein Arcona, Inc., a Canadian corporation located in
Niagara-on-the-Lake, Ontario, near the border between Ontario,
Canada and New York State. In so doing, defendant has allegedly
injured and threatens to injure plaintiff, who is licensed to do
business and maintains offices in New York. Plaintiff does not
allege any other connection between defendant and New York. Defendant submitted the affidavit of Gilles Cohen defendant's
president to dispute plaintiff's claims. Cohen states that
defendant has never sold or shipped any of the Products to Henry
Schein Arcona, does not sell and has never sold the Products in
the United States, does not advertise the Products for sale in
the United States and does not have a website where customers can
look up or order the Products. (Cohen Aff. at 2.)
"The amenability of a foreign corporation to suit in a federal
court in a diversity action is determined in accordance with the
law of the state where the court sits, with `federal law'
entering the picture only for the purpose of deciding whether a
state's assertion of jurisdiction contravenes a constitutional
guarantee." Metro. Life Ins. Co. v. Robertson-Ceco Corp.,
84 F.3d 560, 567 (2d Cir. 1996) (internal quotations omitted). This
Court, therefore, will apply Sections 301 and 302 of New York's
Civil Practice Law and Rules ("CPLR") to the allegations in this
action to determine if this Court has personal jurisdiction over
defendant and then, if necessary, will determine whether the
exercise of such jurisdiction comports with due process.*fn3
See ibid. While plaintiff bears the ultimate burden of
establishing jurisdiction over defendant by a preponderance of
the evidence if such is raised at trial, in cases like this where
jurisdiction is challenged prior to discovery, plaintiff may
overcome the challenge simply by making a good faith pleading to
that effect. See Jazini v. Nissan Motor Co., Ltd.,
148 F.3d 181, 184 (2d Cir. 1998). In making this prima facie
jurisdictional determination, the Court is to consider the
pleadings and affidavits in the light most favorable to plaintiff. See Ball v. Metallurgie
Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990).
Inasmuch as no discovery has been conducted herein, the truth of
plaintiff's allegations will be assumed for purposes of the
jurisdiction issue pursuant to FRCvP 12(b)(2) and doubts will be
resolved in plaintiff's favor, notwithstanding a controverting
presentation by defendant. Hoffritz for Cutlery, Inc. v.
Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985). However, "vague
and generalized allegations * * * are insufficient to make a
prima facie showing of jurisdiction over an out-of-state
defendant." Hennigan v. Taser Int'l, Inc., 2001 U.S. Dist.
LEXIS 1857, at *7 (S.D.N.Y. Feb. 23, 2001). Plaintiff's
unsupported allegations will be deemed refuted if plaintiff does
not counter defendant's presentation of "direct, highly specific,
testimonial evidence regarding a fact essential to jurisdiction."
See Allojet PLC v. Vantage Assocs., 2005 U.S. Dist. LEXIS
4006, at *12 (S.D.N.Y. Mar. 15, 2005) (internal quotations and
New York's general jurisdiction provision, CPLR § 301, provides
that a New York "court may exercise such jurisdiction over
persons, property, or status as might have been exercised
heretofore." The statute's scope encompasses all jurisdictional
bases recognized in common law prior to its enactment. Penny v.
United Fruit Co., 869 F. Supp. 122, 125 (E.D.N.Y. 1994). New
York has historically permitted the exercise of jurisdiction over
a foreign corporation if it "does business in New York, not
occasionally or casually, but regularly, continuously and
systematically thereby demonstrating a sufficiently fair measure
of permanence to warrant a finding of the corporation's
constructive presence here." Graphic Controls Corp. v. Utah
Med. Prods., Inc., 1997 U.S. Dist. LEXIS 7448, at *6 (W.D.N.Y. May 22, 1997). The test requires an analysis of the
specific facts of each individual case to determine whether a
foreign corporation's contacts and connections with New York
demonstrate continuous, permanent and substantial activity.
Landoil Res. Corp. v. Alexander & Alexander Servs.,
918 F.2d 1039, 1043 (2d Cir. 1991). In assessing jurisdiction under this
standard, New York courts have generally focused on the following
indicia of jurisdiction: (1) the existence of an office in New
York, (2) the solicitation of business in New York, (3) the
presence of bank accounts or other property in New York and/or
(4) the presence of employees or agents in New York. Ibid.
Solicitation will only justify imposing jurisdiction over a
foreign corporation when it "is substantial and continuous, and
defendant engages in other activities of substance in the state".
Plaintiff fails to make a prima facie showing that defendant
is subject to jurisdiction under CPLR § 301. Defendant is a
Canadian corporation with no offices, bank accounts, property,
employees or agents in New York. Plaintiff alleges that defendant
transacted business with Henry Schein Arcona, a corporation
located close to the New York border, but does not allege that
any part of this transaction actually occurred in New York. The
close proximity of Henry Schein Arcona to the New York border,
however, does not place the transaction within New York for the
purposes of determining jurisdiction. See, e.g., Jamerson v.
Buffalo Gen. Hosp., 1995 U.S. Dist. LEXIS 21310, at *12 (W.D.
Pa. Mar. 13, 1995) (holding that, only the extent to which the
defendant crosses the border into the forum state is relevant,
not how close the defendant comes to it). Plaintiff, moreover,
merely makes "vague and generalized" allegations, which are
insufficient to meet its minimal burden. See Hennigan, at *7. Therefore, this Court finds that
CPLR § 301 does not confer jurisdiction over defendant.
A corporate defendant not found to be constructively present
for purposes of the general jurisdiction provision may
nevertheless be sued in New York pursuant to New York's long-arm
statute, codified at CPLR § 302. Plaintiff's necessary showing
under CPLR § 302 is "considerably less" than that required under
CPLR § 301. Hoffritz, at 58. CPLR § 302 provides for
jurisdiction in certain circumstances over non-domiciliaries and
states, in pertinent part:
"(a) * * * 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 * * * who in person or through an
1. transacts any business within the state or
contracts anywhere to supply goods or services in the
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 * * *
(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
CPLR § 302 thus requires a "strong nexus between the plaintiff's
cause of action and the defendant's in state [sic] conduct."
Welsh v. Servicemaster Corp., 930 F. Supp. 908, 910 (S.D.N.Y.
1996) (citation omitted). Although plaintiff asserts that
jurisdiction exists under CPLR §§ 302(a)(1), (a)(2) and (a)(3) in its Complaint, its
argument in its Memorandum in Opposition to Defendant's Motion to
Dismiss focuses only on CPLR § 302(a)(3)(ii). As such, this Court
will primarily focus on CPLR § 302(a)(3)(ii).
Long-arm specific jurisdiction of non-domiciliaries who
transact business within New York is governed by CPLR §
302(a)(1). Plaintiff does not allege or provide evidence that
defendant transacted business in New York plaintiff only
alleges a business transaction near the New York border. CPLR §
302(a)(1), therefore, does not allow this Court to exercise its
jurisdiction over defendant.
CPLR § 302(a)(2) confers jurisdiction over a non-domiciliary
who commits a tort while physically present in New York. See
Bensusan Rest. Corp. v. King, 126 F.3d 25, 28 (2d Cir. 1997).
Again, because plaintiff fails to show that any part of this
transaction took place in New York, jurisdiction does not exist
under CPLR § 302(a)(2).
Long-arm specific jurisdiction based upon tortious acts
committed out-of-state by a non-domiciliary is governed by CPLR §
302(a)(3). See id. at 27. Subsection (i) requires a showing
that defendant either regularly does or solicits business in New
York or derives revenue from services rendered in New York.
Jurisdiction pursuant to CPLR § 302(a)(3)(i) is more difficult to
establish than jurisdiction pursuant to CPLR § 302(a)(2).
Roberts-Gordon v. Superior Radiant Prods.,
85 F. Supp. 2d 202, 215 (W.D.N.Y. 2002). Thus, it follows that plaintiff's
failure to establish jurisdiction under the lesser standard of
CPLR § 302(a)(2) for failure to show that defendant transacted
business in or derived revenue from activities in New York precludes a finding of jurisdiction
under CPLR § 302(a)(3)(i).
To establish personal jurisdiction under subsection (ii) of
CPLR § 302(a)(3), plaintiff must sufficiently allege that (1)
defendant performed a "tortious act" outside of New York, (2) the
alleged tortious act caused injury within New York, (3) defendant
expected or reasonably should have expected that its action would
have consequences in New York and (4) defendant derives
"substantial revenue from interstate or international commerce."
CPLR § 302(a)(3); see also Starmedia Network, Inc. v. Star
Media, Inc., 2001 U.S. Dist. LEXIS 4870, at *5 (S.D.N.Y. Apr.
24, 2001). Plaintiff has met the first two prongs of CPLR §
302(a)(3) plaintiff has alleged trademark infringement as the
tortious conduct and the injury from the alleged act has occurred
in New York.
For a prima facie showing of jurisdiction under CPLR §
302(a)(3), the plaintiff must allege anticipated in-state
economic injury from an out-of-state tort, but is not required to
show that it suffered any actual economic injury. Sybron Corp.
v. Wetzel, 385 N.E.2d 1055, 1058 (N.Y. 1978). The Lanham Act
imposes liability on any person who "use[s] in commerce a
reproduction, counterfeit, copy, or colorable imitation of a
registered mark in connection with the sale, offering for sale,
distribution, or advertising of any goods or services."
15 U.S.C. § 1114(1)(a). "Trademark infringement can be a `tort' for [the]
purpose of determining long-arm jurisdiction." PDK Labs, Inc.
v. Proactive Labs, Inc., 325 F. Supp. 2d 176, 180 (E.D.N.Y.
2004) (citation and internal quotations omitted). For purposes of
determining jurisdiction under CPLR § 302(a)(3), the alleged
injury stemming from infringement on a trademark "in the form of damage to
goodwill, lost sales, or lost customers" occurs where the
trademark owner resides and conducts business because this is
where the "`first effects' of trademark infringement or dilution
are typically felt." Savage Universal Corp. v. Grazier
Constr., Inc., 2004 U.S. Dist. LEXIS 16088, at *30 (S.D.N.Y.
Aug. 13, 2004). Plaintiff alleges that defendant's sale and
shipment of the Products infringes on plaintiff's trademarks,
threatens the distinctive quality of plaintiff's trademark,
confuses plaintiff's customers and threatens plaintiff's
reputation. These allegations amount to a tortious act resulting
in an injury in New York the place where plaintiff, the
trademark owner, resides and conducts business and meets the
first two requirements of CPLR § 302(a)(3).
Plaintiff cannot meet the third requirement of CPLR §
302(a)(3)(ii) that defendant expected or reasonably should have
expected its allegedly tortious actions to have consequences in
New York and, therefore, addressing the fourth requirement is
unnecessary. The test to determine whether this "foreseeability"
requirement is met "is an objective rather than subjective one"
and is intended to avoid conflicts with due process limits on the
exercise of jurisdiction. Kernan v. Kurz-Hastings, Inc.,
175 F.3d 236, 241 (2d Cir. 1999) (citation and quotations omitted).
The Second Circuit requires "a discernible effort [by the
defendant] to directly or indirectly serve the New York market",
and has held that "the simple likelihood or foreseeability that a
defendant's product will find its way into New York" does not
satisfy this requirement. Ibid. (citations and quotations
omitted). A transaction between two Canadian companies, one of which is
close to the New York border, does not amount to a "discernible
effort" to directly or indirectly serve the New York market. See
id. at 241. Without an allegation of a distribution chain
linking defendant to the New York market, it is objectively
unreasonable to find that defendant intended to serve the New
York market. See id. at 242 (holding that, to meet the
foreseeability requirement, the defendant must have purposefully
availed itself of "the benefits of the laws of New York such that
the defendant may reasonably anticipate being haled [sic] into
New York court") (citations and quotations omitted); Starmedia
Network, at *6 (finding that the plaintiff, to meet the
foreseeability requirement, must show an effort by the defendant
to serve the New York market). Further, plaintiff's allegations
that defendant sold and marketed products in New York are refuted
by defendant's affidavit, to which plaintiff does nothing but
cite the "extremely close proximity of New York to an infringing
sale". (Pl.'s Mem. Opp'n Def.'s Mot. Summ. J. at 8.) See
Allojet, at *12. Such a vague assertion is not sufficient to
make a prima facie showing of personal jurisdiction. This
Court, therefore, will not find that it has personal jurisdiction
over defendant and will grant defendant's Motion. Plaintiff's
request for additional jurisdictional discovery where, as here,
jurisdiction is not found, will be denied. Jurisdictional
discovery is appropriate where the plaintiff made a sufficient
start toward establishing jurisdiction and where it would not be
a "fishing expedition when little more exists than plaintiff's
bare assertions that jurisdiction is proper". Manhattan Life
Ins. Co. v. A.J. Stratton Syndicate, 731 F. Supp. 587, 593
(S.D.N.Y 1990). "Pre-motion discovery should be permitted where the facts necessary to establish personal jurisdiction * * * lie
exclusively within the defendant's knowledge." Wafios Mach.
Corp. v. Nucoil Indus. Co., 2004 U.S. Dist. LEXIS 13674, at
*14 (S.D.N.Y. July 23, 2004). However, jurisdictional discovery
is not permitted where, as here, the defendant submits an
affidavit that provides all necessary facts and answers all
questions regarding jurisdiction. Id. at *14-16 (granting
jurisdictional discovery over a defendant because the defendant's
affidavit left "further questions * * * which may be necessary to
establish either personal jurisdiction or venue", but not over
another foreign defendant who provided an affidavit categorically
denying contacts with New York). Cohen's affidavit categorically
denies that defendant has transacted business or has had any
other contacts with New York and answers all questions regarding
jurisdiction. Plaintiff's allegation of defendant's transaction
with Henry Schein Arcona a single transaction outside New
York's borders is not a sufficient start toward establishing
jurisdiction and does not even amount to a bare assertion that
jurisdiction is proper. Plaintiff's request for jurisdictional
discovery, thus, will be denied.
Accordingly, it is hereby ORDERED that defendant's Motion to
Dismiss for lack of personal jurisdiction is granted, that
plaintiff's request for additional discovery is denied and that
the Clerk of this Court shall close this case.