616 F.3d 158 (2nd Cir. 2010), 09-3361-cv, Chloe v. Queen Bee of Beverly Hills, LLC

Docket Nº:09-3361-cv.
Citation:616 F.3d 158
Opinion Judge:HALL, Circuit Judge:
Party Name:CHLO
Attorney:Milton Springut (Tal S. Benschar, on the brief), Kalow & Springut, L.L.P., New York, NY, for Plaintiffs-Appellants Chlo
Judge Panel:Before RAGGI and HALL, Circuit Judges, and CARMAN, Judge.[*]
Case Date:August 05, 2010
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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616 F.3d 158 (2nd Cir. 2010)

CHLOÉ, a Division of Richemont North America, Inc., Chloé, S.A., Plaintiffs-Appellants,

ABC, Plaintiff,

v.

QUEEN BEE OF BEVERLY HILLS, LLC, Rebecca Rushing, also known as Rebecca Grelier, Mohamad Alexander Zarafshan, also known as Alexander Zar, Jennifer Suns, Sun-Eye Productions, Inc. Def, 2-20 John Does, Defendants,

Simone Ubaldelli, Defendant-Appellee.

No. 09-3361-cv.

United States Court of Appeals, Second Circuit

August 5, 2010

Argued: March 23, 2010.

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[Copyrighted Material Omitted]

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Milton Springut (Tal S. Benschar, on the brief), Kalow & Springut, L.L.P., New York, NY, for Plaintiffs-Appellants Chloé, et al.

Michael Konopka, Esq., New York, NY, for Defendant-Appellee Simone Ubaldelli.

David H. Bernstein, Christopher J. Hamilton, Debevoise & Plimpton LLP, New York, NY; Steven B. Pokotilow, Stroock & Stroock & Lavan LLP, New York, NY; John W. Crittenden, Cooley Godward Kronish LLP, San Francisco, CA, for Amicus Curiae International Trademark Association.

Before RAGGI and HALL, Circuit Judges, and CARMAN, Judge.[*]

HALL, Circuit Judge:

Plaintiffs-Appellants Chloé and Chloé, S.A. (together, " Chloé" ) brought suit in United States District Court for the Southern District of New York (Holwell, J. ) against, inter alios, Defendant-Appellee Simone Ubaldelli (" Ubaldelli" ) (collectively, " Defendants" ).1 The amended complaint alleged violations of sections 32(1) and 43(a) of the Trademark Act of 1946, 15 U.S.C. § 1051, et seq., and New York General Business Law § 349 (McKinney 2004), as well as common law trademark infringement and unfair competition. Chloé moved for summary judgment on liability and Ubaldelli cross-moved to dismiss for lack of personal jurisdiction. The district court granted Ubaldelli's motion and denied Chloé's motion as moot. On appeal, Chloé argues that jurisdiction over Ubaldelli

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comports with New York's long-arm statute, N.Y. C.P.L.R. § 302(a) (McKinney 2001), and with due process. We agree and hold that Ubaldelli's single act of shipping an item into New York combined with the substantial business activity of Queen Bee, the entity with which Ubaldelli was affiliated, involving New York, give rise to personal jurisdiction over Ubaldelli. Accordingly, we vacate the judgment of the district court and remand the case for further proceedings.

I. BACKGROUND

A. Facts

Chloé, which refers both to the Plaintiff-Appellant that is a division of Delaware corporation Richemont North America, Inc. (" Chloé NA" ), and has its principal place of business in New York and to the Plaintiff-Appellant that is a French corporation (" Chloé SA" ) and has its principal place of business in Paris, is a fashion company that sells women's clothing and accessories. Chloé SA is the owner of a trademark registration for the word mark CHLOÉ for handbags. Chloé NA is the exclusive U.S. licensee of the CHLOÉ trademark for all Chloé branded goods. In 2005, Chloé was selling leather handbags for approximately $1,600 in Chloé's boutiques and as the suggested retail price for its wholesale accounts. Defendants sold counterfeit copies of this handbag on their website (www. queenbeebeverlyhills. com) for $1,200, plus shipping. Defendant Queen Bee of Beverly Hills, LLC (" Queen Bee" ), is an Alabama LLC. Defendants Rebecca Rushing (" Rushing" ) and Ubaldelli were the principals and operators of Queen Bee. The company maintained showrooms in and shipped goods from Beverly Hills, California, and Huntsville, Alabama. Defendants maintained two websites with nearly identical URLs, and both sites directed users to the same content.

The sites advertised " trunk shows" across the country, offered to sell handbags purportedly manufactured by various name-brand designers-including Chloé-and offered to ship bags anywhere in the continental United States and to select locations worldwide. Specifically, the website permitted a customer viewing the handbags to " Click here ... to purchase this item." It then provided both a telephone number customers could call to make credit card payments and an interface through which customers could pay for their orders online through PayPal.

Chloé first became aware of Queen Bee in mid-December 2005 when it obtained records and testimony in a separate action against an internet vendor located in Naperville, Illinois, which was selling counterfeit goods and identified Queen Bee as its supplier. Ubaldelli had primary responsibility for obtaining the handbags sold by Queen Bee. Ubaldelli's main source of the handbags was a man named " Guido" who met with Ubaldelli in Queen Bee's Beverly Hills showroom. Ubaldelli placed orders with Guido, and the items were delivered to his Beverly Hills office from which Ubaldelli would then ship the merchandise to Rushing in Alabama or to customers as directed by Rushing. Ubaldelli wrote out and signed checks to pay Guido.

In December 2005, an administrative assistant at Chloé's law firm, Kalow & Springut LLP, accessed the Queen Bee website and placed an order online for the bag to be sent to her New York address. At the direction of an attorney, the assistant ordered a " Chloé" handbag for $1,200, plus $40 shipping. The bag was shipped to her in the Bronx via FedEx. The shipping label bore Ubaldelli's Beverly Hills address. The handbag was later determined to be counterfeit.

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Defendants engaged in substantial sales of counterfeit CHLOÉ brand products. For example, Defendants sold at least thirty counterfeit Chloé bags to the Naperville, Illinois company. Documents also show that Defendants sold at least thirty-eight other Chloé bags to other customers around the country and made at least fifty-two sales of non-Chloé merchandise into the State of New York.2

In November 2006, plaintiffs filed an amended complaint against Ubaldelli and five other named defendants. The complaint alleged violations of sections 32(1) and 43(a) of the Trademark Act of 1946, 15 U.S.C. § 1051, et seq., and New York state law. A year later, Ubaldelli moved to dismiss the case against him on the basis that the court lacked personal jurisdiction over him. Shortly thereafter, Chloé moved for partial summary judgment on its trademark infringement claims. The district court granted Ubaldelli's Rule 12(b)(1) motion and denied Chloé's motion as moot. Chloé v. Queen Bee of Beverly Hills, LLC, 571 F.Supp.2d 518 (S.D.N.Y.2008) (hereinafter " Chloé I " ). Plaintiffs moved the court to certify Ubaldelli's dismissal as final under Fed.R.Civ.P. 54(b), see Chloé v. Queen Bee of Beverly Hills, LLC, 630 F.Supp.2d 350 (S.D.N.Y.2009) (hereinafter " Chloé II " ). Final judgment was entered on July 8, 2009. This appeal followed.

B. Standard of Review

" We review de novo a district court's decision to dismiss a complaint for lack of personal jurisdiction." Porina v. Marward Shipping Co., 521 F.3d 122, 126 (2d Cir.2008). " [P]laintiffs need only make a prima facie showing of personal jurisdiction over the defendant[,][and] ... we construe the pleadings and affidavits in the light most favorable to plaintiffs, resolving all doubts in their favor." Id. In the instant case, the parties have conducted extensive discovery regarding the defendant's contacts with the forum state, but no evidentiary hearing has been held. Accordingly, " plaintiff[s'] prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by [the ultimate trier of fact], would suffice to establish jurisdiction over the defendant." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir.1996) (internal quotation marks omitted and second alteration in original).

C. Relevant Law

To determine personal jurisdiction over a non-domiciliary in a case involving a federal question, the Court must engage in a two-step analysis. See Best Van Lines, Inc. v. Walker, 490 F.3d 239, 243-44 (2d Cir.2007). First, we apply the forum state's long-arm statute. See id. at 244; Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 22 (2d Cir.2004). 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

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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) (McKinney). Section 302(a) also confers jurisdiction over individual corporate officers who supervise and control an infringing activity. See Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 527 N.Y.S.2d 195, 522 N.E.2d 40, 44 (1988); accord Retail Software Servs. Inc. v. Lashlee, 854 F.2d 18, 22 (2d Cir.1988) (referencing New York law).

If the long-arm statute permits personal jurisdiction, the second step is to analyze whether personal jurisdiction comports with the Due Process Clause of the United States Constitution. This analysis has two related components: the " minimum contacts" inquiry and the " reasonableness" inquiry. With respect to minimum contacts, we must determine whether the defendant has sufficient contacts with the forum state to justify the court's exercise of personal jurisdiction. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90...

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