Chloe v. Queen Bee of Beverly Hills

• Decision Date: 01 August 2008
• Docket Number: No. 06 Civ. 3140(RJH)(MHD).,06 Civ. 3140(RJH)(MHD).
• Citation: 571 F.Supp.2d 518
• Parties: CHLOÉ, a division of RICHEMONT NORTH AMERICA, INC. and Chloe, S.A., Plaintiffs, v. QUEEN BEE OF BEVERLY HILLS, LLC, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

571 F.Supp.2d 518

CHLOÉ, a division of RICHEMONT NORTH AMERICA, INC. and Chloe, S.A., Plaintiffs, v. QUEEN BEE OF BEVERLY HILLS, LLC, et al., Defendants.

No. 06 Civ. 3140(RJH)(MHD).

United States District Court, S.D. New York.

August 1, 2008.

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Milton Springut, Tal S. Benschar, Kalow & Springut, L.L.P., New York, NY, for Plaintiffs.

Peter A. Mahler, Farrell Fritz, P.C., Uniondale, NY, Aaron Eliezer Zerykier, Ganfer & Shore, LLP, Michael Frederic Konopka, New York, NY, for Defendants.

MEMORANDUM OPINION AND ORDER

RICHARD J. HOLWELL, District Judge.

This is an action for trademark infringement brought by plaintiffs Chloé and Chloé, S.A. (collectively, "Plaintiffs") against defendants Queen Bee of Beverly Hills, LLC, Sun-Eye Productions, Inc. ("Sun-Eye"), Rebecca Rushing, Simone Ubaldelli, Jennifer Suns, Mohammad Zarafshan a/k/a Alexander Zar, and John Does 2-20.¹ Plaintiffs design and market women's clothing and accessories, including handbags, which are sold under Chloé, S.A.'s registered CHLOÉ trademark (Benscher Decl. Ex. C, Nov. 5, 2007). Plaintiffs' action arises out of the defendants' alleged involvement in the sale and offer for sale of counterfeit Chloe handbags on the internet and out of offices in Huntsville, Alabama and/or Beverly Hills, California.

Currently pending before the Court are defendant Ubaldelli's motion to dismiss for lack of personal jurisdiction and Plaintiffs' motion for partial summary judgment against Ubaldelli.

FACTS

According to Plaintiffs, defendants Ubaldelli and Rushing were partners in a business enterprise named Queen Bee of Beverly Hills ("Queen Bee"), in which Ubaldelli and Rushing jointly made decisions regarding the items Queen Bee would buy and sell. (Pls.' Local Rule 56.1 Statement ¶ 6.) Queen Bee maintained a website, on which users could view and place orders for products. (Santana Decl. ¶ 2, Ex. 4.) Queen Bee is described on its website as a "leading wholesale and retail designer boutique, offering the latest trends in authentic European designer accessories." (Id. Ex. A.) Among other things, Queen Bee sold designer handbags. (See, e.g., id. Ex. A; Schlanger Decl. ¶¶ 4-6; Cochran Decl. ¶¶ 2-10.) Plaintiffs allege that the defendants engaged in "willful and intentional infringement," by offering, selling, advertising, and distributing counterfeit handbags bearing the Chloe trademark. (Am.Compl.¶¶ 17, 18.)

Rosa Santana is an employee of Kalow & Springut LLP, the law firm representing Plaintiffs in this action. (Santana Decl. ¶ 1.) At the direction of Plaintiffs' counsel Milton Springut, Ms. Santana accessed the QueenBeeBeverlyHills.com website, on which two items described as Chloé handbags were offered for sale. (Id. ¶ 2.) Santana then contacted the vendor and ordered a "Chloe Paddington Bag" to be delivered to her home in New York City.² (Id. ¶¶ 2, 3.) The bag was turned over to Mr. Springut the day after it arrived and has been in the firm's possession ever since, except when sent to Plaintiffs' expert to determine its authenticity and when sent to the Court in connection with Plaintiffs' motion for a preliminary injunction and seizure order in April 2006. (Id. ¶¶ 4, 5; Springut Decl. ¶ 12, Apr. 21, 2006; Benschar Decl. ¶ 2.)

Though the bag sent to Ms. Santana bears the Chloe name and was represented on the Queen Bee website as a Chloe product, Sophie Garric, the Production Manager for Chloe International, S.A., has examined the bag and determined that it is a counterfeit. (Garric Decl. ¶¶ 10-12.) Ubaldelli does not dispute that the bags purchased by Plaintiffs' agents are counterfeit and were not manufactured, produced, or in any manner authorized by Chloe or by its corporate affiliates or licensees. (See Chloe Local Rule 56.1 Statement ¶ 5; Ubaldelli Local Rule 56.1 Statement ¶ 5.)

Plaintiffs do not assert that Queen Bee sold or delivered any other counterfeit handbags to New York residents. In fact, Plaintiffs note that Queen Bee's sales records indicate that 117 items were sent to consumers in New York and that all bore brand names other than Chloe. (Springut Decl. ¶¶ 2-4, Ex. A, Jan. 7, 2008.) The only Queen Bee sales of Chloe handbags that Plaintiffs specifically identify are (1) the sale to Ms. Santana in New York, (2) a sale to a private investigator hired by Plaintiffs and located in Lawrenceville, Georgia (Cochran Decl. ¶¶ 1-11), and (3) "at least thirty" sales to Lynda Higgins, a retailer located in Naperville, Illinois (see, e.g., Springut Decl. ¶¶ 1-11, Exs. B, D, E, Apr. 21, 2006; Springut Decl. ¶ 5, Jan. 7, 2008). Plaintiffs also assert that Queen Bee's records show sales of "at least an additional 38 units," but do not specify where or to whom these sales were made. (Springut Decl. ¶ 5, Jan. 7, 2008.)

DISCUSSION

I. Legal Standard

A motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) challenges the sufficiency of the plaintiff's factual allegations supporting jurisdiction, which are assumed to be true for the purposes of the motion. Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.1990). To survive a Rule 12(b)(2) motion made after discovery has ended, the plaintiff must "persuade the court only that its factual allegations constitute a prima facie showing of jurisdiction." Id. "A plaintiff can make this showing through his `own affidavits and supporting materials,' containing `an averment of facts that, if credited ... would suffice to establish jurisdiction over the defendant.'" Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir.2001) (quoting Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981) and Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir.1996)). "Ultimately, if a jurisdictional challenge is raised at trial, [a plaintiff] bear[s] the burden of establishing jurisdiction over a defendant by a preponderance of the evidence." Citigroup Inc. v. City Holding Co., 97 F.Supp.2d 549, 564 (S.D.N.Y.2000).

"The breadth of a federal court's personal jurisdiction is determined by the law of the state in which the district court is located." Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir.2006). "Accordingly, resolution of a motion to dismiss for lack of personal jurisdiction made in the Southern District of New York requires a two-step analysis." Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir.2002). "First, the court must determine if New York law would confer upon its courts the jurisdiction to reach the defendant ... under the New York long-arm statute, CPLR. § 302." Id. If personal jurisdiction is permitted under the long-arm statute, the court must then proceed to consider whether the exercise of jurisdiction would be consistent with the Due Process Clause of the Fourteenth Amendment. Id.

"The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful `contacts, ties, or relations.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Therefore, a defendant must have "certain minimum contacts" with the forum state in order to be subject to jurisdiction in the courts of that state. Int'l Shoe, 326 U.S. at 326, 66 S.Ct. 154 (internal quotation marks omitted). In determining whether "minimum contacts" exist, "[t]he crucial question is whether the defendant has `purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws such that [the defendant] should reasonably anticipate being haled into court there.'" Best Van Lines, Inc. v. Walker, 490 F.3d 239, 242-43 (2d Cir.2007) (quoting Burger King, 471 U.S. at 474, 475, 105 S.Ct. 2174). "Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with `fair play and substantial justice.'" Burger King, 471 U.S. at 476-77, 105 S.Ct. 2174 (quoting Int'l Shoe, 326 U.S. at 320, 66 S.Ct. 154).

A court may exercise "specific jurisdiction" over a defendant for a cause of action "arising out of or related to the defendant's contacts with the forum." Metro. Life Ins., 84 F.3d at 567-68 (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-16 & nn. 8-9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). "General jurisdiction," which may apply when a defendant has "continuous and systematic" contacts with the forum, Helicopteros, 466 U.S. at 414-15, 104 S.Ct. 1868, "permits a court to exercise its power in a case where the subject matter of the suit is unrelated to those contacts." Metro. Life Ins., 84 F.3d at 567-68. Plaintiffs assert only specific jurisdiction over Ubaldelli.

II. Analysis

Plaintiffs seek to base specific personal jurisdiction over Ubaldelli on two alleged contacts with the State of New York: (1) Queen Bee's sale of one counterfeit Chloe bag to Ms. Santana in New York, and (2) the "offer for sale" of counterfeit Chloe bags on the Queen Bee website, which is accessible to New York residents.³ Assuming arguendo that the contacts of Queen Bee can be attributed to Ubaldelli for jurisdictional purposes,⁴ the Court considers each of these alleged contacts in turn.

A. Ms. Santana's Purchase

Ubaldelli claims that Queen Bee's sale of a counterfeit Chloe handbag to Ms. Santana is insufficient to support jurisdiction because it is a "manufactured contact"—a purchase made not by an "actual consumer[ ]," but by a representative of Plaintiffs. (Ubaldelli Br. 4.)

It is apparently not uncommon in trademark, copyright, and patent infringement cases for plaintiffs to attempt to base personal jurisdiction over defendants...