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(888) Justice, Inc. v. Just Enterprises

August 22, 2007

(888) JUSTICE, INC., PLAINTIFF,
v.
JUST ENTERPRISES, INC., MARTIN & ASSOCIATES, L.L.C., DEREK P. MARTIN, COBB & COLE, P.A. AND HEATHER BOND VARGAS, DEFENDANTS.



The opinion of the court was delivered by: George B. Daniels, District Judge

MEMORANDUM DECISION & ORDER

Plaintiff (888) JUSTICE, Inc. filed this action stating claims of unfair competition, tortious interference, and libel.*fn1 Defendant Just Enterprises, Inc., ("Just Enterprises") along with Derek Martin and Martin & Associates, L.L.C. (the "Martin defendants") moved to dismiss the action for improper venue, to dismiss the action against the Martin defendants for the lack of personal jurisdiction, or in the alternative, to transfer the case to the Western District of Missouri, pursuant to 28 U.S.C. § 1404(a). The Martin defendants also moved for sanctions pursuant to Fed. R. Civ. P. 11 and 28 U.S.C. § 1927 against plaintiff's president and counsel, Jon L. Norinsberg. For the reasons set forth below, the case is dismiss for lack of personal jurisdiction and venue. The motion for sanctions is denied.

FACTUAL BACKGROUND

Plaintiff (888) Justice, Inc., a New York corporation, operates a legal service referral business that licenses listings in its cooperative advertising program to lawyers nationwide. The cooperative program features (888)-JUSTICE as its telephone number and in its website domain name. Plaintiff owns federal trademark registrations for the service marks (212) JUSTICE(r), (718) JUSTICE(r), "DON'T GET MAD...GET JUSTICE(r)," and THE JUSTICE HOTLINE(r), but does not have a registration for (888) JUSTICE.

Defendant Just Enterprises, Inc., a Missouri corporation, markets its own attorney referral business with the telephone number 1-800-JUSTICE. Just Enterprises also owns the 1-800-JUSTICE(r), a registered service trademark. This mark was registered after the registration of Plaintiff's (212) JUSTICE(r) service mark.*fn2 (See Compl. ¶ 19). In October of 2001, Mr. Norinsberg, the president of Plaintiff, contacted Tina Dobrauc, the secretary of defendant Just Enterprises, and asked about acquiring the use of the 1-800-JUSTICE(r) mark. (See Declaration of Derek P. Martin in Support of Moving Defendants' Motion for Sanctions ("Martin Decl.") ¶ 11 and Letter from Norinsberg to Dobrauc, attached as Exh. B to Martin Decl.). Mr. Norinsberg was rebuffed in his inquiry. (Martin Decl. ¶ 12).

In May 2005, Just Enterprises contacted Plaintiff and asserted that Plaintiff's (212) JUSTICE and (888) JUSTICE telephone numbers both infringed upon its 1-800-JUSTICE(r) service mark. (Compl. ¶ 20). On June 20, 2005, Plaintiff filed a petition to cancel the U.S. Trademark registration for the 1-800-JUSTICE(r). (Compl. ¶ 21). Just Enterprises responded in kind with a petition to cancel Plaintiff's U.S. Trademark registration for the (212) JUSTICE(r) mark on July 31, 2005. (Compl. ¶ 22).

On March 15, 2006, Just Enterprises filed suit against Plaintiff in the U.S. District Court for the Western District of Missouri asserting claims of service trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1051 et seq. (See Just Enterprises, Inc. v. (888) Justice Inc., No. 3:06CV5023-CV-S-JCE (W.D.Mo. Mar. 15, 2006) (the "Missouri Action"); Martin Decl. ¶ 14; See also Compl. in the Missouri Action attached as Exh. C to Martin Decl.). In that action, Just Enterprises contends that the (888) JUSTICE telephone number is confusingly similar to the 1-800-JUSTICE(r) service mark. Plaintiff, as defendant in that case, moved to dismiss the action for lack of personal jurisdiction and improper venue or to stay the action pending the petitions to cancel the trademark registration before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office ("TTAB"). After granting jurisdictional discovery, the district court denied the motion to dismiss or to stay the case, and found venue to be proper in the Western District of Missouri. Plaintiff then counterclaimed in the Missouri Action to cancel the 1-800-JUSTICE registration. The TTAB has stayed the consolidated trademark cancellation proceedings Plaintiff and Just Enterprises have filed against each other, pending the resolution of the Missouri Action.

Five months after the Missouri Action began, Plaintiff filed suit in this district on August 23, 2006. The original complaint named only defendant Just Enterprises and presented unfair competition claims under the Lanham Act and state law. The complaint cited a cease and desist letter ("C & D" Letter") sent from Derek Martin in Missouri to a law firm in Alabama that had licensed Plaintiff's referral service. The letter, sent on behalf of Just Enterprises, warned the Alabama licensee that (888) Justice was an infringement upon the 1-800-JUSTICE mark and demanded the licensee cease and desist use of the mark. (See Cease and Desist Letter attached as Exh. A to Compl.). Plaintiff contends that the representations in the letter were false and deceptive.

On November 15, 2006, in its first amended complaint, plaintiff added the Martin defendants, and cited three additional cease and desist letters sent from Missouri to Plaintiff's licensees in Georgia, Michigan, and Florida. (Compl. ¶ 23-42; Exh. E to Martin Decl.). These letters informed the licensees of the Missouri Action, warned that their use of (888) JUSTICE was an infringement of the 1-800 JUSTICE mark, and demanded that they cease and desist using (888) JUSTICE or themselves face legal action. (See C & D Letters attached as Exh. E to Martin Decl.). Subsequently, all three licensees terminated their contract with Plaintiff. The first amended complaint accused Just Enterprises and the Martin defendants of making false and misleading statements in bad faith through the C & D Letters, which Plaintiff claims deceived its licensees about the existence of a trademark infringement. Plaintiff's claims against the defendants in this action including violation of the Lanham Act's fair competition provision, tortious interference with contract, tortious interference with business relationships and libel, are all based on the C & D Letters and their effect on the licensees.

On November 30, 2006, Plaintiff filed a second amended complaint which repeated its previous claims and also named additional defendants, Heather Bond Vargas, a Florida attorney, and her law firm Cobb & Cole, P.A. in Florida, (collectively, "the Florida defendants"). Plaintiff accused the Florida defendants of tortious interference.*fn3 The Florida defendants moved to dismiss the case against them for the lack of personal jurisdiction. They declared they have no office or business presence, own no property, have no employees or agents, and make no advertisements or solicitations in New York. They flatly denied Plaintiff's assertions that "they have maintained a persistent course of conduct or derive substantial revenue from services rendered in New York." (Vargas Decl. ¶¶ 2-15). Plaintiff did not file any opposition to the motion and agreed to voluntarily dismiss the Florida defendants with prejudice pursuant to Fed. R. Civ. P. 41.

The remaining defendants, all based in Missouri, now move to dismiss the action for improper venue, to dismiss the case against the Martin defendants for the lack of personal jurisdiction, or to transfer the action to the Western District of Missouri.

PERSONAL JURISDICTION

The Martin defendants aver that as the intellectual property attorneys for Just Enterprises, Inc., they are not subject to general or specific jurisdiction within the State of New York because they have never worked with any New York licensees, "engaged in the practice of law in New York", "provided any services in New York", or "registered to do business in New York." (Declaration of Derek P. Martin dated Mar. 30, 2007, ¶ 2). On the Martin defendants' motion to dismiss for lack of personal jurisdiction, plaintiff bears the burden of establishing that personal jurisdiction exists. Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). "Until an evidentiary hearing, the plaintiff need only make a prima facie showing that jurisdiction exists". Hoffritz for Cutlery, Inc. And Edwin Jay, Inc. v. Amajac, Ltd. and Jack E. Ayers, 763 F.2d 55, 57 (2d Cir 1985) (citing, Beacon Enterprises v. Menzies, 715 F.2d 757, 768 (2d Cir. 1983). In a federal question case involving a defendant outside the forum state, federal courts apply the personal jurisdiction rules of the forum state. PDK Labs v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1993).

In the State of New York, a non-domiciliary defendant is subject to general jurisdiction if the defendant is engaged in "continuous and systematic course of doing business in the forum state". Hoffritz, 763 F.2d at 59 (2d Cir. 1985) (citing Landoil Resources v. Alexander & Alexander Services, 918 F.2d 1039, 1043 (N.Y. 1990)). Doing business requires a showing ...


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