Advisors Excel, LLC v. Senior Advisory Grp. LLC

• Decision Date: 10 August 2011
• Docket Number: Case No. 11-4015-JAR
• Parties: ADVISORS EXCEL, LLC, Plaintiff, v. SENIOR ADVISORY GROUP, LLC, Defendant.
• Court: U.S. District Court — District of Kansas

ADVISORS EXCEL, LLC, Plaintiff, v. SENIOR ADVISORY GROUP, LLC, Defendant.

Case No. 11-4015-JAR

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

Dated: August 10, 2011

MEMORANDUM AND ORDER

Plaintiff Advisors Excel, LLC ("Advisors Excel") brings this action against Senior Advisory Group, LLC, ("Senior Advisory Group") alleging claims for trademark infringement in violation of 15 U.S.C. § 1114, unfair competition and dilution in violation of the Lanham Act, 15 U.S.C. § 1125, violation of several states' deceptive trade practices acts, as well as a common law claim for unfair competition and for tortious interference with contract.

Pending before the Court is defendant Senior Advisory Group's Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 9). The motion is fully briefed and the Court is prepared to rule. For the reasons stated in detail below, defendant's motion to dismiss is denied.

I. Rule 12(b)(2) Standards

Plaintiff has the burden of establishing personal jurisdiction over defendant.¹ In the absence of an evidentiary hearing, plaintiff must make only a prima facie showing of jurisdictionto defeat a motion to dismiss.² "The plaintiff may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant."³ Allegations in a complaint are accepted as true if they are plausible, non-conclusory, and non-speculative, to the extent that they are not controverted by submitted affidavits.⁴ When a defendant has produced evidence to support a challenge to personal jurisdiction, a plaintiff has a duty to come forward with competent proof in support of the jurisdictional allegations of the complaint.⁵ The court resolves all factual disputes in favor of the plaintiff.⁶ Conflicting affidavits are also resolved in the plaintiff's favor, and "the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party."⁷ "In order to defeat a plaintiff's prima facie showing of jurisdiction, a defendant must present a compelling case demonstrating 'that the presence of some other considerations would render jurisdiction unreasonable.'"⁸

II. Factual Background

Drawing all reasonable inferences in favor of plaintiff, the following facts are taken from the Complaint and attached exhibits. The Court does not consider any general or conclusoryallegations unsupported by affidavit or other evidence.

Plaintiff Advisors Excel is a Kansas limited liability company with its principal place of business in Topeka, Kansas. Plaintiff is an independent field marketing organization that serves professional advisors in the insurance and annuity markets. Plaintiff owns several federally-registered trademarks, including the "AE Mark" at issue in this case. The AE Mark consists of the stylized wording "ADVISORS EXCEL" to the right of a square design that contains a triangular design. Plaintiff has invested substantial amounts of time, effort, and money to promote goods featuring the AE Mark, as well as the AE Mark itself.

Defendant is an Arizona corporation with its principal place of business in Scottsdale, Arizona. Defendant is a wholesaler of annuity and life insurance products serving approximately 568 independent financial advisors throughout the United States, including three advisors in Kansas. Defendant maintains a website that provides access to educational and training material for all users with Internet access. The website contains hyperlinks which provide access to other websites. Defendant's website allows interested users to provide their contact information to receive educational and training material. Defendant has also posted various "YouTube" videos on www.youtube.com—the subject of the pending action. The "You Tube" videos were meant to be educational tools for defendant's advisors. The large majority of the actual views of the "You Tube" videos are from hyperlinks from defendant's website and/or email links.

Plaintiff alleges that defendant Senior Advisory Group used the AE Mark in its promotional materials, including on its website and YouTube channel. Plaintiff also alleges that defendant's use of the AE Mark has led to confusion with plaintiff's products and services, wrongfully treads on plaintiff's goodwill, and has caused grave injury to plaintiff's trade name,trademark rights, and reputation in the advisor market. On October 8, 2010, plaintiff sent a demand letter to defendant, accusing defendant of using plaintiff's trademarks and demanding that defendant immediately cease and desist the use of those trademarks. Defendant responded with a letter on October 13, 2010, stating that there were not any references to the AE Mark in its marketing materials, nor would there be any in the future. Plaintiff alleges that, despite these assurances, defendant continued to infringe plaintiff's trademark.

Defendant has never directly solicited to potential advisors in Kansas; the three advisors it serves in Kansas, who were referred to defendant by outside parties, account for only 0.52 percent of defendant's total independent advisors and only 0.30 percent of defendant's total revenue. Of these three advisors in Kansas, two are actually registered with Independent Financial Group, LLC, a broker dealer doing business out of San Diego, California. The remaining active advisor in Kansas is registered with Brokers International Financial Services, LLC, a broker dealer doing business out of Panora, Iowa. Defendant never directly solicited business from these three independent advisors; rather, these three advisors contacted defendant based on referrals.

Defendant has never had, and does not currently have, shareholders, employees, or property in or from Kansas. Defendant has never had, and does not currently have, bank accounts in Kansas. Defendant has never had, and does not currently have, a phone or fax number in Kansas. Defendant has never solicited, and does not currently solicit, business from Kansas residents. Defendant has traveled to Kansas on only one occasion. On February 2, 2006, Defendant representatives attended a reception in Kansas City, Kansas for a new product launch hosted by Aviva Life and Annuity Company ("Aviva").IV. Discussion

The jurisdictional facts alleged in the Complaint are as follows: "Defendant transacts business in Kansas and, therefore, is subject to the jurisdiction of this Court. The effects of defendant's tortious conduct have also occurred primarily in Kansas."⁹ Defendant argues that the Court lacks personal jurisdiction because defendant does not have substantial contacts with the state of Kansas and does not direct advertising or Internet activities toward Kansas, based on its attached affidavits. Defendant asks the Court to either dismiss the case, or alternatively to transfer the case to the United States District Court for the District of Arizona.

"In a federal question case where a defendant resides outside the forum state, a federal court applies the forum state's personal jurisdiction rules."¹⁰ To establish personal jurisdiction over a defendant, plaintiff must show that jurisdiction is proper under the laws of the forum state, Kansas, and that the exercise of jurisdiction would not offend due process.¹¹ The Kansas long-arm statute is construed liberally so as to allow jurisdiction to the full extent permitted by due process, therefore the Court proceeds directly to the constitutional analysis.¹²

For the court's exercise of jurisdiction to comport with due process, defendant must have "minimum contacts" with the State of Kansas, "such that having to defend a lawsuit there wouldnot 'offend traditional notions of fair play and substantial justice.'"¹³ "Minimum contacts" can be established in one of two ways, either generally or specifically for lawsuits based on the forum-related activities:

General jurisdiction is based on an out-of-state defendant's "continuous and systematic" contacts with the forum state, and does not require that the claim be related to those contacts. Specific jurisdiction, on the other hand, is premised on something of a quid pro quo: in exchange for "benefitting" from some purposive conduct directed at the forum state, a party is deemed to consent to the exercise of jurisdiction for claims related to those contacts.¹⁴

Plaintiff argues this Court has both general and specific jurisdiction over defendant; thus the Court addresses each in turn.

A. Minimum Contacts

1. General Jurisdiction

General jurisdiction exists over a nonresident defendant whose contacts with the state are "continuous and systematic."¹⁵ "In order for general jurisdiction to lie, a foreign corporation must have a substantial amount of contacts with the forum state."¹⁶ In determining whether a defendant corporation has substantial contacts with the forum state, the court considers four factors:

(1) whether the corporation solicits business in the state through local office or agents; (2) whether the corporation sends agents into the state on a regular basis to solicit business; (3) the extent towhich the corporation holds itself out as doing business in the forum state, through advertisements, listings or bank accounts; and (4) the volume of business conducted in the state by the corporation.¹⁷

Defendant first argues that it does not solicit business in Kansas through a local office or agent, and supports this assertion with an affidavit stating that its only office is located in Arizona.¹⁸ Similarly, defendant argues that it does not send agents into Kansas on a regular basis to solicit business. Defendant also supports this assertion with an affidavit stating its representatives have only traveled to Kansas one time.¹⁹ Plaintiff has not contradicted or produced affidavits that directly address these points, therefore the first two factors weigh in favor of defendant.

Regarding the third Trierweiler factor, defendant argues that it does not hold itself out as doing...