Jet Wine & Spirits, Inc. v. Bacardi & Co., Ltd.

• Decision Date: 18 July 2002
• Docket Number: No. 01-2481.,01-2481.
• Citation: 298 F.3d 1
• Parties: JET WINE & SPIRITS, INC., Plaintiff, Appellant, v. BACARDI & COMPANY LTD., Defendant, Appellee, Bacardi Ltd., Bacardi U.S.A., Inc., Defendants.
• Court: U.S. Court of Appeals — First Circuit

Page 1

298 F.3d 1

JET WINE & SPIRITS, INC., Plaintiff, Appellant, v. BACARDI & COMPANY LTD., Defendant, Appellee, Bacardi Ltd., Bacardi U.S.A., Inc., Defendants.

No. 01-2481.

United States Court of Appeals, First Circuit.

Heard April 3, 2002.

Decided July 18, 2002.

COPYRIGHT MATERIAL OMITTED

Evan T. Lawson with whom J. Mark Dickison and Lawson & Weitzen, LLP were on brief for appellant.

Gerald J. Caruso with whom Carlene A. Pennell, Nur-ul-Haq, and Rubin and Rudman, LLP were on brief for appellee.

Before BOUDIN, Chief Judge, LYNCH and LIPEZ Circuit Judges.

LYNCH, Circuit Judge.

This case raises the issue of the exercise of personal jurisdiction by a federal district court over an international corporation that has been allocated certain responsibilities within a complex corporate family. Jet Wine & Spirits, a broker of alcoholic beverages in New Hampshire, appeals the dismissal, for lack of personal jurisdiction, of its action based on state contract and tort law against Bacardi & Company (BACO), an owner of various trademarks and intellectual property related to internationally sold alcoholic beverages.

BACO owns several brands of Dewar's Scotch and Bombay Gin, which it acquired from Diageo, which had a relationship with Jet Wine. Jet Wine had previously distributed Dewar's in several New England states, including New Hampshire, and Bombay in Maine. As distributor, Jet Wine had been party to a contract with subsidiaries of the companies that merged to form Diageo. After BACO's acquisition of the brands, a corporate cousin of BACO terminated Jet Wine as distributor. Jet Wine then sued a number of members of the Bacardi corporate family on several theories. In this appeal, only its claims against BACO are at issue. Jet Wine says that BACO assumed Diageo's contractual obligations to Jet Wine and then reached into New Hampshire (among other states) to violate the contract terms and disrupt Jet Wine's various protected interests. BACO says it has nothing to do with New Hampshire, and, for that matter, nothing to do with Jet Wine's contract. We conclude that whatever the ultimate merits of Jet Wine's substantive claims, there is enough of a prima facie showing to support the exercise of personal jurisdiction, and reverse.

I.

We first describe the facts as we take them for the purpose of this appeal. As we discuss in more detail in Part III, the facts of the case are at present merely Jet Wine's allegations so far as evidence supports them after preliminary jurisdictional discovery, supplemented by BACO's uncontested allegations.

Jet Wine is a New Hampshire corporation that does business in New Hampshire and is owned by the Martignetti Corporation, itself a Massachusetts corporation. New Hampshire directly controls all sales of alcohol in the state through its State Liquor Commission, and Jet Wine is licensed to sell to the Commission. In 1996 and 1997, Jet Wine signed several contracts with Schieffelin & Somerset Co. by which it became Schieffelin's exclusive distributor in New Hampshire, Vermont, and Maine for various alcoholic beverages, including the White Label and Ancestor brands of Dewar's Scotch. The arrangements were to last until the end of 1999, and after that could be terminated by either party on thirty days' notice. Each contained a clause stating that "[t]he parties hereby consent and submit to the personal jurisdiction of the United States District Courts within the State of New York." Jet Wine also alleges an agreement with Carillon Importers, by which it became Carillon's representative in Maine for Bombay Gin for an indefinite period.

BACO is a Liechtenstein corporation with its primary place of business in the Bahamas. It is wholly owned by Bacardi International Limited (BIL). BIL is in turn almost wholly owned (99.88%) by Bacardi Limited (BL), a Bermuda corporation with its primary place of business in Bermuda. BL also wholly owns Bacardi U.S.A. (BUSA),¹ a Delaware corporation with its primary place of business in Florida. BL serves as a holding company for the various other Bacardi corporations. BACO owns various trademarks and other intellectual property related to the sale of alcoholic beverages. BUSA imports alcoholic beverages into, and distributes them in, the United States. There is some overlap of officers and directors among the corporations: BACO's President is among BL's directors, the Chairman of BIL's Board of Directors is a Senior Vice President of BL, one of BACO's Vice Presidents is also a Vice President of BL, and the Chairman of BUSA's Board was among BL's alternate directors when the complaint was filed.

BACO does no business directly in New Hampshire, except possibly through its web site, as described below. The parties dispute whether BACO does business there through an agent, as discussed in Part III of this opinion. BACO owns an internet domain name, bacardi.com, that corresponds to a site on the World Wide Web at http://www.bacardi.com. It also owns clubbacardi.com, for which no Web site presently exists. From November 1998 to September 1999, http://www.bacardi.com sold some Bacardi promotional items (clothing and keychains, not alcohol), including two sales to New Hampshire addresses for a total of $30.75. This money went to National Corporate Services Unlimited, an unrelated company that buys merchandise from BUSA and sells it over the Web site. BACO also owns dewars.com, dewarsscotch.com, and bombaysapphire.com, each of which corresponds to a Web site. Jet Wine has shown no sales from those Web sites in New Hampshire. BACO owns one trademark, "Havana Club," that is registered in New Hampshire.

Schieffelin, Jet Wine's former source for Dewar's, was a subsidiary of Guinness. Carrillon, Jet Wine's former source for Bombay, was a subsidiary of Grand Metropolitan. In 1997, Guinness and Grand Metropolitan began negotiating a merger that eventually produced Diageo. The merger encountered opposition from the Federal Trade Commission, which demanded that Diageo sell some of its operations to preserve competition that the merger would otherwise eliminate. Among those operations were Dewar's and Bombay. On March 27, 1998, BL's CEO, acting for BACO and for William Lawson Distillers (another subsidiary of BL), signed two Asset Purchase Agreements with Diageo for assets related to the Dewar's and Bombay brands. BACO agreed "[o]n the terms and subject to the conditions set forth [in the Agreements] ... to assume and discharge or perform when due all Assumed Liabilities." "Assumed Liabilities" as defined in the Dewar's Agreement include

all liabilities and obligations that arise out of or relate to the Transferred Assets (including under any Contract) [or] the Dewar's Business ... to the extent attributable to occurrences and circumstances arising on or following the Closing, including any obligations to deliver finished case goods following the Closing under purchase orders of, or commitments to, Persons other than Affiliates of Seller.

"Contract" is defined by reference to a schedule attached to the Agreement, which does not mention Jet Wine or New Hampshire, and in addition to include "comparable agreements ... with respect to any markets other than the Major Markets ... that are solely related to Dewar's." The United States is among the "Major Markets," and Jet Wine's agreement with Schieffelin was not solely related to Dewar's. Another schedule, listing distributors for Dewar's, does mention Jet Wine as the relevant New Hampshire Distributor. The "Dewar's Business" is defined in the preamble to the Dewar's Agreement, to which the body of the Agreement refers, as "the marketing, sales and distribution of Scotch whisky under trade names or trademarks that include one or more of the terms `Dewar's,' `Ancestor,' `Ne Plus Ultra,' and `White Label.'" The Bombay Agreement contains identical language regarding assumption of liabilities, except that it refers instead to the "Bombay Business," which it defines as "the marketing, sales and distribution of gin under trade names or trademarks that include one or more of the terms `Bombay' and `Sapphire.'"²

On June 15, BACO gave BIL a worldwide exclusive license to use the Dewar's and Bombay Brands. BIL then appointed BUSA as the United States distributor of those brands. On the same day, BUSA sent letters to Jet Wine that terminated Jet Wine as the broker for Dewar's in New Hampshire, Vermont and Maine. On June 16, it provided a letter for BUSA's legal department addressed "To Whom It May Concern." The June 16 letter said that BUSA was the "exclusive brand agent and distributor" and "Primary American Source of supply" for the Dewar's and Bombay brands in the United States. It also authorized BUSA "to take all legal steps necessary to effectuate the sale of our products in the United States of America, including but not limited to, making any and all filings for the registration and sale of our products which may be required under State or Federal laws and regulations." The letter was signed by Linda Beidler-D'Aguilar, BACO's Assistant Vice President, Legal and Trademark.³ No evidence in the record indicates directly who, if anyone, received this letter other than BUSA.

II.

As a result of the June 15 terminations, Jet Wine filed this lawsuit on December 4, 1998, in the District of New Hampshire, naming BL, BACO, and BUSA as defendants. It alleged in its complaint four claims: (1) breach of contract against BACO alone, (2) intentional interference with contractual relations against all three defendants, (3) intentional interference with advantageous business relations against all three defendants, and (4) violation of New Hampshire's consumer protection statute against all three defendants. On March 4, 1999, BL and BACO moved to dismiss for lack of personal jurisdiction; BUSA did not.

After limited jurisdictional discovery, the district court granted the motions to dismiss in an unpublished order. The court applied the...