Alpha Tau Omega Fraternity v. Pure Country, Inc.

• Decision Date: 24 January 2002
• Docket Number: CAUSE NO. IP 01-1054-C-B/S.
• Citation: Alpha Tau Omega Fraternity v. Pure Country, Inc., 185 F.Supp.2d 951 (S.D. Ind. 2002)
• Parties: ALPHA TAU OMEGA FRATERNITY, An Unincorporated Association, Alpha Tau Omega, Inc., A Maryland Corporation, Delta Delta Delta Sorority, and Unincorporated Association, Delta Delta Delta, An Illinois Not-For-Profit Corporation, Delta Tau Delta Fraternity, An Unincorporated Association, Delta Tau Delta Corporation, A New York Corporation, Kappa Sigma Fraternity, An Unincorporated Association, Sigma Nu Fraternity, An Unincorporated Association, Sigma Nu Fraternity, Inc., An Indiana Corporation, Sigma Phi Epsilon Fraternity, An Unincorporated Association, And Sigma Phi Epsilon, A Virginia Corporation, Plaintiffs, v. PURE COUNTRY, INC., Margaret W. Clark, Jay Clark, IV, and Hays Clark., Defendants.
• Court: U.S. District Court — Southern District of Indiana

185 F.Supp.2d 951

ALPHA TAU OMEGA FRATERNITY, An Unincorporated Association, Alpha Tau Omega, Inc., A Maryland Corporation, Delta Delta Delta Sorority, and Unincorporated Association, Delta Delta Delta, An Illinois Not-For-Profit Corporation, Delta Tau Delta Fraternity, An Unincorporated Association, Delta Tau Delta Corporation, A New York Corporation, Kappa Sigma Fraternity, An Unincorporated Association, Sigma Nu Fraternity, An Unincorporated Association, Sigma Nu Fraternity, Inc., An Indiana Corporation, Sigma Phi Epsilon Fraternity, An Unincorporated Association, And Sigma Phi Epsilon, A Virginia Corporation, Plaintiffs, v. PURE COUNTRY, INC., Margaret W. Clark, Jay Clark, IV, and Hays Clark., Defendants.

CAUSE NO. IP 01-1054-C-B/S.

United States District Court, S.D. Indiana, Indianapolis Division.

January 24, 2002.

COPYRIGHT MATERIAL OMITTED

T. Caice Lee, Stites & Harbison, Jeffersonville, IN, Jack A Wheat, Stites & Harbison, Louisville, KY, for plaintiffs.

Christian P. Jones, Barnes & Thornburg, Indianapolis, IN, for defendants.

ENTRY ON DEFENDANTS' MOTION TO STAY DETERMINATION OF PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND DEFENDANTS' MOTION TO DISMISS OR, ALTERNATIVELY, MOTION TO TRANSFER VENUE

BARKER, District Judge.

I. Introduction

The plaintiffs, a sorority and several fraternal organizations (known collectively here as "the Greek Organizations" or "the Greeks") have filed a complaint against the defendants alleging that the defendants have violated the Lanham Act, 15 U.S.C. §§ 1051 et seq. and Indiana common law. They allege, more specifically, that the defendants have infringed their protected trademarks, diluted their protected trademarks, and engaged in unfair competition in violation of the federal statute. And they allege that defendant Pure Country has breached an enforceable agreement with the plaintiffs and engaged in unfair competition in violation of Indiana law. The plaintiffs have filed a motion for preliminary injunction asking us to stop the defendants from engaging in their allegedly unlawful conduct.

In response, the defendants have filed two motions: one asks us to dismiss the plaintiffs' complaint because this court lacks personal jurisdiction over three of the individually-named defendants and because venue is improper in this court, or, in the alternative, to transfer the case to the Western District of Missouri; the second motion asks us to stay our determination of plaintiffs' motion for preliminary injunction pending our resolution of defendants' motion to dismiss or, alternatively, to transfer.

The parties' submissions on the key issues of personal jurisdiction and venue are surprisingly perfunctory, generating more heat than light. Still, since defendants' motion to dismiss or transfer is based in relevant part on personal jurisdiction, we GRANT defendants' motion to stay determination of plaintiffs' preliminary injunction motion in order to resolve defendants' motion to dismiss or, alternatively, to transfer, which we do here.

After dodging the parties' pot-shots at one another and moving to their (sparse) presentations on the merits, we GRANT defendants' motion to dismiss the individually-named defendants for lack of personal jurisdiction. We DENY defendants' motion to dismiss the case for improper venue and we DENY defendants' motion to transfer the case to the Western District of Missouri. Finally, we ORDER the parties — now consisting of all plaintiffs and Pure Country as the lone defendant — to appear for a hearing on plaintiffs' motion for preliminary injunction on March 13, 2002.

We further note that in entering this order, we are relying on the affidavit statements of Pure Country's President, Margaret Clark, Pure Country's Vice President, Jay Clark IV, and Pure Country's Secretary and Treasurer, Hays Clark, that: "Pure Country does not sell any Greek merchandise associated with the plaintiffs in this action, nor will it do so again while this suit and the related suit pending in Kansas City are pending." Margaret Clark Aff., ¶ 10; Jay Clark, IV, Aff., ¶ 10; Hays Clark Aff., ¶ 10.

II. Background.

The Greek Organizations have chapters on many of the nation's campuses. Pure Country is a vendor of goods (blankets, clothing, and other products) that bear the Greek letters and insignias of the Greek Organizations. The individually-named defendants (referred to collectively as the Clarks) are the officers of Pure Country. According to affidavits filed by each in support of defendants' motion to dismiss or transfer, Margaret Clark is the president of Pure Country, Jay Clark, IV is its vice president, and Hays Clark is its secretary-treasurer.

The Greek Organizations seek an injunction to prevent Pure Country and the Clarks from selling goods that bear their Greek letters, logos, or insignias without first obtaining a license. Pure Country operated for many years without a license and without the threat of a lawsuit. But a few years ago, the Greeks determined that they had a financial interest in their names and insignias and began asserting their right to license any use of their names and logos. They have licensed their names and logos through their agent, Affinity Marketing. The Complaint alleges that the names are protected by trademarks and plaintiffs provide supporting documentation to that effect.

In 1998, Pure Country entered into a licensing agreement with the plaintiffs. Pure Country asserts that it subsequently learned that some of the Greeks did not have valid trademarks and decided that they did not have the right to demand licenses. Accordingly, at the expiration of its license agreement, it began to operate without benefit of licenses.

This case is paralleled by another one. On March 23, 2001, Pure Country filed a lawsuit against Sigma Chi in the district court for the Western District of Missouri. Pure Country's Kansas City lawsuit seeks to enforce a 1969 consent decree of that court in which Sigma Chi agreed not to sue any vendor or manufacturer of goods containing its insignias for infringement of trademark or unfair competition. In its Kansas City lawsuit, Pure County also seeks a declaration that it does not need a license to produce and sell goods bearing Sigma Chi's letters or logos. Sigma Chi is not a party to the Indiana lawsuit, but, like the plaintiffs here, it is represented by Affinity Marketing, and Pure Country entered into a license agreement with Sigma Chi that is substantially identical to the license agreements that Pure Country had entered with the plaintiffs here.

On July 3, 2001, the plaintiffs filed their complaint in this district.¹ On August 30, 2001, they filed their motion for preliminary injunction. Meanwhile, Pure Country has asked the Missouri court for leave to amend its complaint to name the plaintiffs here as defendants there. It appears from Defendants' Exhibit B that, as originally filed (and as matters currently stand), the sole plaintiff in the Missouri case is Pure Country, Inc. d/b/a Pure Country Weavers and the sole defendants in that case are Sigma Chi Fraternity and Sigma Chi Corporation. As we have noted, Sigma Chi is not a plaintiff here.

Pure Country and the individual defendants ask us to dismiss the lawsuit here or transfer it to the Western District of Missouri. They allege two bases for their motion to dismiss: this court lacks personal jurisdiction over the Clarks; and venue in this court is improper. In the alternative, they ask us to transfer the case to Kansas City on the grounds that the Kansas City case was "first filed" and/or because attorney Jack Wheat of Louisville, Kentucky is counsel for defendant Sigma Chi in the Kansas City lawsuit as well as counsel for the plaintiffs in this matter and Mr. Wheat seeks to use the Indiana forum because it is closer to home.

III. Discussion.

A. Personal Jurisdiction.

Defendants have asked us to stay consideration of plaintiffs' motion for preliminary injunction because we do not have personal jurisdiction over the individual defendants and because venue is improper in this court. We grant their motion to stay consideration because, if they are correct that this court lacks personal jurisdiction over the Clarks, we cannot enter an injunction against them. U.S. v. First Nat. City Bank, 379 U.S. 378, 390, 85 S.Ct. 528, 534-535, 13 L.Ed.2d 365 (1965) ("traditional notions of equity" require likelihood of personal jurisdiction before an injunction may issue); General Electric Co. v. Deutz Ag, 270 F.3d 144, 149 (3rd Cir. 2001) ("If [personal] jurisdiction does not exist, then the District Court necessarily lacked the power to issue the injunction."); In re Rationis Enterprises, Inc. of Panama, 261 F.3d 264, 270 (2nd Cir.2001) (same). Accordingly, we first determine whether we have personal jurisdiction over the Clarks, since defendants present neither argument nor evidence for the proposition that we do not have personal jurisdiction over the corporate defendant, Pure Country.

In federal question cases such as this one, the law governing personal jurisdiction parallels the rules governing service of process. If the federal statute at issue does not prescribe nationwide service of process, then personal jurisdiction exists in the district in which the court has power to enforce process. Thus "a federal court normally looks either to a federal statute or to the long-arm statute of the State in which it sits to determine whether a defendant is amenable to service." Swaim v. Moltan Co., 73 F.3d 711, 719-720 (7th Cir.1996), quoting Omni Capital International, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 105, 108 S.Ct. 404, 410, 98 L.Ed.2d 415 (1987). As to this case, the Lanham Act does not prescribe nationwide service of process. Euromarket Designs, Inc. v. Crate & Barrel Limited, 96 F.Supp.2d 824, 834 (N.D.Ill.2000). It follows that we have personal jurisdiction over the Clarks only if they would be amenable to process under Indiana law....