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Two's Co. Inc. v. Hudson

United States District Court, S.D. New York

March 6, 2014

TWO'S COMPANY, INC., Plaintiff,
v.
JANE HUDSON, AND JOHN DOES 1-5, Defendants.

OPINION AND ORDER

NELSON S. ROMN, District Judge.

Two's Company, Inc. ("Plaintiff") brings this action against Defendant alleging trademark infringement and Lanham Act claims. Before the Court is Defendant Jane Hudson's ("Defendant") motion to dismiss this case under Federal Rules of Civil Procedure 12(b)(2) for lack of personal jurisdiction and for a transfer of this matter to the District of South Carolina. For the following reasons, Defendant's motion is DENIED.

I. Background

Plaintiff is a New York company that is located in Elmsford, New York and is engaged in the business of developing, manufacturing, and selling giftware and home goods products. Roberta Gottlieb Declaration ("Gotlieb Dec.") ¶¶ 2-5. Defendant is the owner and founder of Two's Company Needlepoint, located in Fort Mill, South Carolina, where Defendant is also a resident of Fort Mill, South Carolina. Hudson Decl. ("Hudson Dec.") ¶¶ 1-2. Defendant has used the name "Two's Company" since 1977 and the name "Two's Company Needlepoint" since the launch of her website in 2002. Id at ¶ 2. Defendant has four employees at her store in South Carolina, none of whom have ever worked or lived in New York. Id at ¶ 10.

In 1992, Plaintiff obtained a trademark, TWO'S COMPANY INC., Trademark Registration Number 1768609. Compl. ¶9(a). The 609 trademark is for goods including hand embroidered and needlepoint pillows and jewelry boxes not made of metal, hand embroidered and needle pointed fabric household boxes for holding tissues and storing hats, and hand embroidered and needlepointed stuffed animal toy animals. Id & Compl. Ex. 2. In 2001, Plaintiff obtained a second Trademark Registration number for jewelry. Id at ¶ 9(b), Ex. 3. Plaintiff also claims that it is the owner of common law rights to the TWO'S COMPANY trademark for many more goods not specifically listed in the trademark registrations. Compl. ¶¶ 8-11. Plaintiff has at least 6 employees willing to testify regarding the trademark and products produced by Two's Company. Gottlieb Dec. ¶¶ 6, 8-12. Plaintiff states that all of these employees work at the company's headquarters in Elmsford, New York and live in close proximity to the headquarters. Id.

Defendant established the website for her company in 2002 under the domain name "twoscompanyneedlepoint.com." Hudson Decl. ¶ 3. The website contains a description of the company, pictures and prices for the products sold, and a purchase order form. Hudson Decl. ¶ 3-4. Visitors to the website who are interested in purchasing merchandise must complete the purchase order online and provide contact information. Id at ¶ 4. Ms. Hudson or another employee will then contact the customer by telephone to complete the transaction. Id . The customer provides credit card information over the phone. Id. Additionally, the defendant likes to discuss requests with the customers directly because many of the items Defendant sells are made to order. Id.

Defendant asserts that neither she nor her business: (1) owns any facilities or property in New York; (2) leases any offices or other rental facility in New York; (3) have any affiliated companies or subsidiaries in New York; (4) has any bank accounts or telephone listings in New York; or (5) is registered or licensed to do business in New York. Id at ¶¶ 11-15. From 2010 through 2012, Defendant made eighteen sales into the State of New York: eight in 2012, five in 2011, and five in 2010. Id at ¶ 6. The total amount of the sales was $1721.45, which comprised approximately 0.4% of Defendant's sales for that period. Id.

Plaintiff commenced this lawsuit on May 17, 2013, making claims for trademark infringement, unfair competition, and false designation of origin under 15 U.S.C. 1125(a) and common law infringement and unfair competition. Compl. ¶¶ 22-32. In its Complaint, Plaintiff states that the court has personal jurisdiction over Defendant because of her "acts and omissions which have taken place in the State of New York, ... [she] continuously and systematically conduct[ed], transact[ed], and solicit[ed] business in this district, and/or... the events giving rise to this Complaint occurred in this state and or had the effects in the State of New York." Compl. ¶ 7.

II. Discussion

The burden is on Plaintiff to show the existence of jurisdiction over Defendant in the face of the present motion to dismiss for lack of personal jurisdiction. Whitaker v. Am. Telecasting Inc., 261 F.3d 196, 208 (2d Cir. 2001). "Where... a district court in adjudicating a motion pursuant to Federal Rule of Civil Procedure 12(b)(2) relies on the pleadings and affidavits, and chooses not to conduct a full-blown evidentiary hearing, plaintiffs need only make a prima facie showing of personal jurisdiction.'" Southern New England Telephone Co. v. Global NAPs Inc., 624 F.3d 123, 138 (2d Cir. 2010) (quoting Porina v. Marward Shipping Co., 521 F.3d 122, 126 (2d Cir. 2008)). A prima facie showing may be made through the plaintiff's "own affidavits and supporting materials, containing an averment of facts that, if credited, would suffice to establish jurisdiction over the defendant." Whitaker, 261 F.3d at 208 (internal quotation marks, citation, and alterations omitted). The showing that a plaintiff must make changes with the procedural posture of the case. Marine Midland Bank NA v. Miller, 664 F.2d 899, 904 (2d Cir. 1981). Where, as here, no discovery has taken place, "a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith, legally sufficient allegations of jurisdiction." Dorchester Financial Securities, Inc. v. Banco BRJ, S.A., 722 F.3d 81, 84 (2d Cir. 2013). At this point, the pleadings and any other materials considered by the Court are construed in the light most favorable to Plaintiff and any ambiguities are resolved in Plaintiff's favor. [cite].

To determine whether personal jurisdiction exists over Defendant, the Court must look first to New York's long-arm statute. See Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010); see also Marvel Characters v. Kirby, 726 F.3d 119, 129 ("Because this is a federal question case where a defendant resides outside the forum state, ... [and the relevant] federal statute does not specifically provide for national service of process, '... we apply the forum state's personal jurisdiction rules.'" (quoting PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997)). New York's long arm statute provides:

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 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...; or 3. commits a tortious act without the state causing injury to person or property within the state... if he (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 commerce....

N.Y. C.P.L.R. § 302(a). "If, but only if, " Best Van Lines, 490 F.3d at 242, the court finds that the New York long-arm statute confers jurisdiction, the court then turns to whether the exercise of jurisdiction comports with the due process requirements of the ...


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