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Accessory Corp. v. Spotless Plastics Pty. Ltd.

September 6, 2007

THE ACCESSORY CORPORATION, PLAINTIFF,
v.
SPOTLESS PLASTICS PTY. LTD. AND SPOTLESS ENTERPRISES, INC., DEFENDANTS.



The opinion of the court was delivered by: Naomi Reice Buchwald United States District Judge

MEMORANDUM AND ORDER

Plaintiff The Accessory Corporation ("Plaintiff"), a New York company and the assignee of United States Patent No. 6,474,517, which relates to a clamp used for garment hangers (the "Clamp Patent"), brings this patent infringement action against defendants Spotless Plastics Pty. Ltd., an Australian corporation organized under the laws of Victoria, Australia ("Spotless Australia"), and Spotless Enterprises, Inc., a corporation organized under the laws of the State of New York ("Spotless New York"). Plaintiff alleges that defendants infringed the Clamp Patent when they sold garment hangers to customers in the United States, including in New York. Defendant Spotless Australia now moves to be dismissed from the action for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2) ("Rule 12(b)(2)"), and for "insufficiency of service of process" pursuant to Federal Rule of Civil Procedure 12(b)(4), which we construe as a motion under Federal Rule of Civil Procedure 12(b)(5) ("Rule 12(b)(5)").*fn1

Plaintiff requests jurisdictional discovery into the corporate relationship between Spotless Australia and Spotless New York, should the Court find jurisdiction to be lacking, and cross-moves for an extension of time to re-serve Spotless Australia under Federal Rule of Civil Procedure 4(m), should the Court find its prior service of Spotless Australia to have been insufficient. For the reasons set forth below, we grant Spotless Australia's motions, deny both plaintiff's request for discovery and its cross motion, and, accordingly, dismiss Spotless Australia from this case.

BACKGROUND

Plaintiff originally filed its complaint before Judge Richard C. Casey in the Southern District of New York on February 16, 2005, naming only Spotless Australia as a defendant (the "SDNY Action"). Plaintiff then attempted to effect service on Spotless Australia on April 13, 2005 by serving the New York Secretary of State.*fn2 Shortly thereafter, on April 21, 2005, Spotless New York initiated an action against plaintiff in the Eastern District of New York, seeking a declaratory judgment regarding, inter alia, the validity of the Clamp Patent (the "EDNY Action").

Approximately one week later, on April 29, 2005, plaintiff amended its complaint in the SDNY Action to add Spotless New York as a defendant.*fn3 On the same day, plaintiff filed a third-party complaint against Spotless Australia in the EDNY Action and filed a motion to dismiss the EDNY Action or, in the alternative, to transfer that action to the Southern District of New York. As the EDNY Action proceeded, Spotless New York moved to dismiss plaintiff's complaint in the SDNY Action on the grounds that litigation involving the proper parties was first filed in the EDNY Action and that plaintiff's claims in the SDNY Action were compulsory counterclaims in the EDNY Action. In the alternative, Spotless New York sought either to stay the SDNY Action or to transfer that case to the Eastern District of New York. On July 15, 2005, in the EDNY Action, Spotless Australia filed the present motions to dismiss.

On February 16, 2006, Judge Arthur D. Spatt transferred the EDNY Action to the Southern District of New York. See Spotless New York Inc. v. The Accessory Corp., 415 F.Supp.2d 203 (E.D.N.Y. 2006). The EDNY Action, once transferred, was assigned to Judge Casey's docket as related to the SDNY Action. In a Memorandum and Order dated March 21, 2007, Judge Casey denied Spotless New York's motion to dismiss the SDNY Action or, in the alternative, to have it transferred to the Eastern District, and also denied plaintiff's cross-motion to stay the EDNY Action. See Accessory Corp. v. Spotless Australia Pty. Ltd., No. 05 Civ. 2185 (RCC), 06 Civ. 1583 (RCC), 2007 WL 895418 (S.D.N.Y. Mar. 21, 2007). Shortly thereafter, Judge Casey, who had served as a federal judge for nearly ten years, passed away. Following his passing, both the SDNY Action and the EDNY Action were transferred to my docket. Still pending in those cases were Spotless Australia's motions to dismiss for lack of personal jurisdiction and for insufficient service of process. I now consider those motions.

DISCUSSION

A. Personal Jurisdiction

1. Legal Standard

On a motion to dismiss pursuant to Rule 12(b)(2), the plaintiff bears the burden of showing that jurisdiction exists over the defendant. See Distefano v. Carozzi North America, Inc., 286 F.3d 81, 84 (2d Cir. 2001) (citing Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999)). Prior to discovery, the plaintiff must only make a prima facie showing of jurisdiction to defeat a motion to dismiss. See Bank Brussels Lambert, 171 F.3d at 784; see also Pilates, Inc. v. Pilates Institute, Inc., 891 F. Supp. 175, 178 n.2 (S.D.N.Y. 1995) ("Because [a] Rule 12(b)(2) motion is inherently a matter requiring the resolution of factual issues outside of the pleadings . . . all pertinent documentation submitted by the parties may be considered in deciding the motion.") (quoting John Hancock Prop. and Cas. Ins. Co. v. Universal Reinsurance Co., Ltd., No. 91 Civ. 3644 (CES), 1992 WL 26765, at *6 (S.D.N.Y. Feb. 5, 1992)) (quotations omitted). When considering a Rule 12(b)(2) motion, the court must construe all allegations in the light most favorable to the plaintiff and must resolve all doubts in plaintiff's favor "notwithstanding a controverting presentation by the moving party." A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993) (citing Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985)). However, where a defendant "rebuts [the] plaintiff['s] unsupported allegations with direct, highly specific, testimonial evidence regarding a fact [or facts] essential to jurisdiction . . . and [where] plaintiff[] do[es] not counter that evidence . . . the allegation[s] may be deemed refuted." Schenker v. Assicurazioni Genereali S.p.A., Consol., No. 98 Civ. 9186 (MBM), 2002 WL 1560788, at *3 (S.D.N.Y. July 15, 2002) (citations omitted); see also Berwick v. New World Network Intern., Ltd., No. 06 Civ. 2641 (JGK), 2007 WL 949767, at *1 (S.D.N.Y. Mar. 28, 2007); GCG Int'l, Inc. v. Eberhardt, 05 Civ. 2422, 2005 WL 2647942, at *2 (S.D.N.Y. Oct. 17, 2005).

To determine whether this Court may properly exercise jurisdiction over Spotless Australia, we must examine whether personal jurisdiction is appropriate under New York law.*fn4 See Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997) (citing PDK Labs, Inc., 103 F.3d at 1108). Plaintiff asserts that personal jurisdiction over Spotless Australia exists under section 301, the "general jurisdiction" provision, of the New York long-arm statute ("Section 301").*fn5

Under Section 301, a foreign corporation is subject to personal jurisdiction in all suits in New York courts, if it has engaged in such a continuous and systematic course of doing business in the state that a finding of its "presence" in this jurisdiction is warranted.*fn6 Landoil Resource Corp. v. Alexander & Alexander Servs., Inc., 918 F.2d 1039, 1043 (2d Cir. 1990) (citations omitted). In applying Section 301, courts have recognized that a corporation's "presence" cannot be fleeting or temporary. Rather, the court must be able to say from the facts that the corporation is present in the State "not occasionally or casually, but with a fair measure of permanence and continuity." Id. (quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267 (1917)). In assessing a defendant's presence in the state, the New York courts have generally focused on four ...


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