Auburn Mfg., Inc. v. Steiner Industries, Civil No. 07-19-PS.

Citation493 F.Supp.2d 123
Decision Date28 June 2007
Docket NumberCivil No. 07-19-PS.
PartiesAUBURN MANUFACTURING, INC., Plaintiff, v. STEINER INDUSTRIES, W.W. Grainger, Inc., and Lab Safety Supply, Inc., Defendants.
CourtUnited States District Courts. 1st Circuit. United States District Court (Maine)

Peter J. Brann, Brann & Isaacson, Lewiston, ME, for Plaintiff.

Jeffrey P. Dunning, Richard D. Harris, Greenberg Traurig, LLP, Chicago, IL, Gregory Paul Hansel, Preti, Flaherty, Beliveau, Pachios & Haley, LLP, Portland, ME, for Defendants.

SINGAL, Chief Judge.

Auburn Manufacturing, Inc. ("Auburn") brought this action against Defendants Steiner Industries ("Steiner"), W.W. Grainger, Inc. ("Grainger") and Lab Safety Supply Inc. ("Lab Safety") asserting that certain representations made regarding Steiner's products are untrue and alleging claims for: false designation of origin (Count I); false advertising (Count II); common law trademark infringement (Count III); Illinois Unfair and Deceptive Trade Practices (Count IV); Wisconsin Unfair and Deceptive Trade Practices (Count V); and unjust enrichment (Count VI). Now before the Court is Defendants' Motion to Dismiss pursuant to Fed. R.Civ.P. 12(b)(2) on the basis that this Court lacks personal jurisdiction over Steiner and Lab Safety,1 and under Fed. R.Civ.P. 12(b)(3) on the basis that venue is improper in this district. (Docket # 15.) Alternatively, if the Court determines that it has personal jurisdiction over Steiner and Lab Safety, and that venue would be proper in this district, Defendants move under 28 U.S.C. § 1404(a) to transfer this action to the Northern District of Illinois, so that it may be consolidated with a declaratory judgment action pending in that district. (Id.)

I. JURISDICTIONAL FACTS

Auburn is a Maine corporation with its only place of business in Maine. (Leonard Dec. ¶ 2.) Auburn manufactures and sells welding blankets and other heat-resistant products. (Id. ¶ 3.) After passing rigorous safety tests, seventeen of Auburn's welding blankets and other heat resistant products have been certified "FM Approved." (Id. ¶ 5.) Periodically, those products undergo audits, which are necessary to maintain the "FM Approved" designation. (Id.) Steiner is a manufacturer and supplier of protective clothing, gloves and welding safety supplies, which competes with Auburn. Steiner is an Illinois corporation, with its principal place of business located in Chicago, Illinois. (Kramer Dec. ¶ 1.) Products cannot be ordered directly from Steiner. Steiner sells its products through distributors such as Grainger and Lab Safety, and through other distributors. (Id. ¶ 3.) Steiner maintains a web site, which provides information about its products and its distributors from whom Steiner products can be obtained. All of Steiner's products are shipped from Steiner's warehouse located at its Illinois headquarters. (Id.) Between the period January 1, 2006 and February 28, 2007, Steiner obtained less than one percent (1.0%) of its total gross revenues from the sale of products shipped to distributors in Maine. (Id. ¶ 13.)

Lab Safety is a Wisconsin corporation, with its principal place of business located in Janesville, Wisconsin.2 (Nelson Dec. ¶ 1.) Lab Safety is a distributor of safety products and industrial supplies, which it sells through its print catalogs and its Internet web site. (Nelson Dec. ¶ 3.) Among the products sold by Lab Safety through its catalogs and web site are the welding blanket products manufactured by Steiner. (Id.) Lab Safety has distribution centers located in Wisconsin and Connecticut, from which it ships its products throughout the United States and abroad. (Nelson Dec. ¶ 4.) Lab Safety mails its print catalogs to Maine customers and businesses. (Leonard Dec. ¶ 16.) Approximately 0.55% of Lab Safety's gross revenues during the period between January 1, 2006 and February 28, 2007, were derived from the sale of products shipped into Maine. (Nelson Dec. ¶ 16.)

Grainger is an Illinois corporation with its principal place of business located in Lake Forest, Illinois. (Walker Dec. ¶ 1.) Grainger is a broad line supplier of facilities maintenance products, which it sells through its network of over 400 United States branches, as well as through its catalogs and its Internet web site. (Id. ¶ 3.) Among the products sold by Grainger through its catalogs and web site are the welding blanket products manufactured by Steiner. (Id.) Grainger is licensed to do business in Maine and maintains a sales office in Portland, Maine. (Id. ¶ 8.)

In December 2006 and January 2007, Auburn sent letters to Steiner and Grainger, alleging that they had engaged in false advertising, trademark infringement and unfair trade practices, based on Grainger's purported use of the "FM approved" certification mark and the "Made in USA" designation in connection with welding blanket products manufactured by Steiner and advertised in Grainger's catalog and on Grainger's web site. (Exs. D and E attached to Defendants' Motion to Dismiss.) In February 2007, Steiner and Grainger filed an action against Auburn in Illinois, seeking a declaratory judgment that their accused activities did not comprise false advertising, trademark infringement or a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. (Ex. F attached to Defendants' Motion to Dismiss.) On the very same day Steiner and Grainger filed their complaint in the Illinois action, Auburn sent a letter to Lab Safety, alleging that Lab Safety had engaged in acts of unfair competition and/or false advertising, based on Lab Safety's purported use of the "Made in USA" designation in association with welding blanket products manufactured by Steiner. (Ex. G attached to Defendants' Motion to Dismiss.) One week later, Auburn filed this action. (Docket # 1.) Steiner and Grainger subsequently filed an amended complaint in the Illinois action, adding Lab Safety as a party plaintiff and addressing the additional related allegations. (Ex. I attached to Defendants' Motion to Dismiss.)

II. PERSONAL JURISDICTION
A. Legal Standards Applicable to Motions to Dismiss for Lack of Personal Jurisdiction Under Fed.R.Civ.P. 12(b)(2)

The standard which governs a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) is well established. Auburn bears the burden of establishing personal jurisdiction over Defendants. See Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n., 142 F.3d 26, 34 (1st Cir.1998); Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir.1995). "[P]laintiffs may not rely on unsupported allegations in their pleadings," Boit v. Gar-Tec Products, 967 F.2d 671, 675 (1st Cir.1992), but are "obliged to adduce evidence of specific facts," Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145 (1st Cir.1995). Before trial, however, when a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, plaintiff need only make a prima facie showing. Id. If the parties present conflicting affidavits, all factual disputes are resolved in plaintiffs favor, and plaintiff's prima facie showing is sufficient notwithstanding' the contrary presentation by the moving party. See Mass. Sch. of Law, 142 F.3d at 34; Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1 st Cir.1994). The Court shall credit to "facts put forward by the defendants, to the extent that they are uncontradicted." Mass. Sch. of Law, 142 F.3d at 34.

The Court applies a two-part test to analyze Rule 12(b)(2) motions to dismiss for lack of personal jurisdiction over a nonresident defendant. First, defendant's conduct must fall within a provision of the Maine long-arm statute. See 14 M.R.S.A. § 704-A. Maine courts construe the long-arm statute liberally to assert personal jurisdiction over nonresident defendants to the full extent permitted by the limitations of due process. Murphy v. Keenan, 667 A.2d 591, 593 (Me.1995) Second, defendants must have sufficient minimum contacts with Maine to satisfy the constitutional guarantee of due process. U.S. v. Swiss American Bank, Ltd., 274 F.3d 610, 618 (1st Cir.2001); see also World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (court may exercise personal jurisdiction over nonresident defendant only so long as "minimum contacts" exist between defendant and forum state). The parties seem to agree that the Court's analysis of jurisdiction under the Maine long-arm statute collapses into an analysis of due process, and they present their arguments within this context.

Where, as here, a district court's subject matter jurisdiction is based upon a federal question, the constitutional limits of the court's personal jurisdiction are fixed by the Due Process Clause of the Fifth Amendment. Swiss Am. Bank, 274 F.3d at 618 (quoting United Elec. Workers v. 163 Pleasant Street Corp., 960 F.2d 1080, 1085 (1st Cir.1992)). "A district court may exercise authority over a defendant by virtue of either general or specific jurisdiction." Swiss Am. Bank, 274 F.3d at 618 (quoting Mass. Sch. of Law, 142 F.3d at 34). "Specific jurisdiction exists when there is a demonstrable nexus between a plaintiffs claims and a defendant's forum-based activities." Id. General jurisdiction, on the other hand, exists when the litigation is not directly founded on the defendant's forum-based contacts, but the defendant nevertheless has engaged in continuous and systematic activity, unrelated to the suit, in the forum state. Id. For either type of jurisdiction, in addition to the existence of sufficient "minimum contacts," the defendant's contacts with the state must be purposeful and the exercise of jurisdiction must be reasonable under the circumstances. Harlow v. Children's Hospital, 432 F.3d 50, 57 (1st Cir. 2005).

B. Specific Jurisdiction Analysis

Auburn contends that Steiner and Lab Safety are subject to specific personal jurisdiction in Maine. Auburn asserts claims against Lab Safety for false designation of origin (Count...

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