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Rvdirect.Com, and Rv Direct Group, Inc v. Worldwide Rv D/B/A Rv Factory Direct

December 21, 2010

RVDIRECT.COM, AND RV DIRECT GROUP, INC., PLAINTIFFS,
v.
WORLDWIDE RV D/B/A RV FACTORY DIRECT DEFENDANT.



MEMORANDUM-DECISION AND ORDER

Presently before the Court is a Motion to dismiss or transfer venue (Dkt. No. 11) filed on behalf of Defendant Worldwide RV. For the reasons that follow, Defendant's Motion is granted.

I. BACKGROUND

On June 16, 2010, Plaintiffs RVDirect.com, Inc. and RV Direct Group, Inc. (collectively "Plaintiffs") initiated this action against Defendant Worldwide RV ("Defendant") alleging violations of the Lanham Act and New York General Business Law. Compl. (Dkt. No. 1). On August 6, 2010, Defendant filed the instant Motion to dismiss for lack of personal jurisdiction or, alternatively, to transfer venue. Dkt. No 11.

Plaintiffs are New York corporations with principal places of business in Albany County, New York. Compl. ¶ 1. They are engaged in the marketing and sale of recreational vehicles, including promotion and sales made using their RVDIRECT.COM trademark and conducted via their RVDIRECT.COM website. Id. ¶¶ 8-17. Defendant is an Arizona business with a principal place of business in Mesa, Arizona. Id. ¶ 2.

The essence of Plaintiffs' action is that Defendant, which markets the same recreational vehicles as Plaintiffs, "created an internet domain name 'RVFACTORYDIRECT.COM' and began marketing its products using that name." Id. ¶¶ 18-19. Plaintiffs allege that Defendant has thereby diluted its trademark, purposefully created confusion in the marketplace, and capitalized off of Plaintiffs' recognized brand, quality, and reputation. See generally id.

Plaintiffs' Complaint offers few factual averments regarding this Court's jurisdiction over Defendant, but asserts that jurisdiction is proper, as Defendant "is doing business in the State of New York as that term is defined in New York Civil Practice Law and Rules § 301, § 302 and § 303." Id. ¶ 3. The Complaint alleges that Defendant created a confusingly similar internet domain name, which it uses "in connection with the marketing of their recreation vehicle products which are the same as those marketed by the Plaintiffs." Id. ¶¶ 18-19. It adds that the parties "have competed and still do compete with respect to the sales of these recreational vehicles." Id. ¶ 22. It alleges that Defendant's use of the website places its goods and services in interstate commerce, and that "Defendants do business under its RVFACTORYDIRECT.COM acronym in the same area where Plaintiffs' goods and website are disseminated, including the State of New York." Id. ¶¶ 26, 49.

Defendant's Motion and supporting Memorandum of law (Dkt. No. 11-3) assert the Court's lack of personal jurisdiction over Defendant. Plaintiffs contend that the Court may properly exercise jurisdiction over Defendant because the latter's website: "is national in scope and invites internet traffic from all 50 states, including New York;" advertises Defendant "as a company which has completed thousands of internet sales from buyers from all over the world;" allows for internet sales and delivery transactions; targets the New York market, "contains testimonials, including one from a New York resident, . . . indicat[ing] that she had purchased at least two motor homes from Defendant and had communicated via email and regular mail with Defendant." Resp. at 3. Plaintiff notes that Defendant admits to at least four other sales to New York residents. Id. Defendant denies that any of these sales occurred via its website. Reply (Dkt. No. 16-2) at 2-3.

II. STANDARD OF REVIEW

Where a party moves to dismiss an action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). Prior to discovery, a plaintiff may survive a 12(b)(2) motion to dismiss by pleading in good faith, see FED. R. CIV. P. 11, legally sufficient allegations of jurisdiction. Id.(citing Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)). That is, where a court relies only upon the pleadings and supporting affidavits, a plaintiff need only make a prima facie showing of personal jurisdiction over a defendant. Cutco Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986) (citing Marine Midland Bank N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)); Grand River Enters. Six Nations, Ltd. v. Prvor, 425 F.3d 158, 165 (2d Cir. 2005).

"A prima facie showing of jurisdiction 'does not mean that plaintiff must show only some evidence that defendant is subject to jurisdiction; it means that plaintiff must plead facts which, if true, are sufficient in themselves to establish jurisdiction.'" Tamam v. Fransabank Sal, 677 F. Supp. 2d 720, 725 (S.D.N.Y. 2010) (citation omitted). Pleadings that assert only "conclusory non-fact-specific jurisdictional allegations" or state a "legal conclusion couched as a factual allegation" do not meet this burden. Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir. 1998) (quotation omitted).Finally, while a court is to assume the truth of all well-pleaded factual allegations that support a finding of personal jurisdiction, Ball, 902 F.2d at 197, it should "not draw 'argumentative inferences' in the plaintiff's favor." Robinson v. Overseas Military Sales Corp, 21 F.3d 502, 507 (2d Cir. 1994) (quoting Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992)).

III. DISCUSSION

This Court must engage in a two-part analysis to determine whether it may properly exercise in personam jurisdiction over Defendant: first, it must determine whether the laws of New York provide for jurisdiction; if they do, the Court must then decide whether an exercise of jurisdiction comports with federal due process requirements. Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). The Court finds that, contrary to Plaintiffs' Complaint, Compl. ¶ 3, jurisdiction over Defendant cannot be based upon New York Civil Practice Law and Rules ("N.Y. C.P.L.R.") §§ 301, 302, and 303. It therefore does not reach the second inquiry in the above analysis, whether such exercise would comport with constitutional due process.

A. N.Y. C.P.L.R. § 301

Section 301 of the N.Y. C.P.L.R. allows a court to "exercise such jurisdiction over persons, property, or status as might have been exercised heretofore." N.Y. C.P.L.R. § 301. The comments to that section make clear that this section provides for general in personam jurisdiction grounded on presence, consent, domicile, and doing business. Id., cmt. C301.1. Plaintiffs do not allege that Defendant is physically present in New York, consents to jurisdiction in the state, or is a New York corporation. "[A] corporation is 'doing business' and is therefore 'present' in New York and subject to personal jurisdiction with respect to any cause of action, related or unrelated to the New York contacts, if it does business in New York 'not occasionally or casually, but with a fair measure of permanence and continuity.'" Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985) (quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267 (1917)). To satisfy the "doing business" standard, "a plaintiff must show that a defendant engaged in 'continuous, permanent, and substantial activity in New York.'" Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 95 (2d Cir. 2000) (quoting Landoil Resources Corp. v. Alexander & Alexander Servs., Inc., 918 F.2d 1039, 1043 (2d Cir. 1990)).

A court should consider several factors "to determine whether a defendant can be reached under section 301, including whether a defendant has an office, solicits business, has bank accounts and other property, or employs workers in the state." Cortland Line Co. v. Vincent, No. 98-CV-259, 1999 WL 305369, at *2 (N.D.N.Y. May 7, 1999) (citing Hoffritz, 763 F.2d at 58). "Arguably the most important factor needed for a finding of jurisdiction under § 301 is the in-state presence of employees engaged in business activity." Id. at *2 (citing Pellegrino v. Stratton Corp., 679 F. Supp. 1164, 1171 (N.D.N.Y. 1986)). Section 301's "doing business" standard is "stringent, because a defendant who is found to be doing business in New York in a permanent and continuous manner may be sued in New York on causes of action wholly unrelated to acts done in New York." Overseas Media, Inc. v. Skvortsov, 407 F. Supp. 2d 563, 567-68 (S.D.N.Y. 2006) (internal quotation marks omitted).

Plaintiffs fail to satisfy the requirements of § 301. They do not allege that Defendant has a New York office, or bank accounts or other property within the state; nor do they allege that Defendant employs workers in New York. Plaintiffs do assert that Defendant's website is "national in scope, and invites internet traffic from all 50 states, including New York." Of course, "the fact that a foreign corporation has a website accessible to New York is insufficient to confer jurisdiction under CPLR § 301." Spencer Trask Ventures, Inc. v Archos, S.A., No. 01 CIV. 1169 2002 WL 417192 (S.D.N.Y. Mar. 18, 2002); see also In re Ski Train Fire in Kaprun, Austria, 230 F. Supp. 2d 376, ...


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