Atmos Nation LLC v. Alibaba Grp. Holding Ltd., Case No. 0:15-cv-62104-KMM

• Decision Date: 15 March 2016
• Docket Number: Case No. 0:15-cv-62104-KMM
• Parties: ATMOS NATION LLC, a Nevada Limited Liability Company, Plaintiff, v. ALIBABA GROUP HOLDING LTD., et al, Defendants.
• Court: U.S. District Court — Southern District of Florida

ATMOS NATION LLC, a Nevada Limited Liability Company, Plaintiff,
v.
ALIBABA GROUP HOLDING LTD., et al,¹ Defendants.

Case No. 0:15-cv-62104-KMM

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

March 15, 2016

ORDER GRANTING DEFENDANT ALIBABA.COM, INC.'S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT PURSUANT TO RULE 12(B)(2)

This cause is before the Court on Defendant Alibaba.com, Inc.'s Motion to Dismiss the Second Amended Complaint Pursuant to Rule 12(b)(2) [D.E. 44]. For the reasons explained below, the motion is granted.

I. BACKGROUND

This is an action for trademark infringement brought by Plaintiff Atmos Nation LLC ("Atmos"), the owner of a brand of portable vaporizers, against several Alibaba entities, including Defendant Alibaba.com, Inc., and various independent third-party merchants. In its

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Second Amended Complaint ("SAC") [D.E. 21], Atmos asserts claims for trademark infringement, trademark counterfeiting, contributory trademark infringement and counterfeiting, and false representation under the Lanham Act, 15 U.S.C. § 1051 et seq.; unfair competition under the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq.; and unjust enrichment. See SAC ¶¶ 274-316. As relief, Atmos seeks preliminary and permanent injunctive relief, monetary damages, and other appropriate redress. See id. at 4.

The SAC alleges that Atmos designs, markets, and sells portable vaporizers under its Atmos brand. See id. ¶ 81. The gist of Atmos' action concerns the alleged sale of counterfeit vaporizers bearing the Atmos brand by independent third-party merchants (the "Merchant Defendants") on the Alibaba platforms, Alibaba.com, AliExpress.com, and Taobao.com (collectively, the "Alibaba Platforms"). See id. ¶¶ 75-76, 81, 93, 95. Atmos alleges that some of these sales were made to a purchaser in Florida. Id. ¶¶ 178-82, 188-93, 199-202, 208-12, 218-21, 227-31, 237-41, 247-51, 257-61.

Atmos identifies the specific Alibaba entities it claims are responsible for operating the Alibaba Platforms. According to the SAC, Defendant Alibaba.com Hong Kong Limited "operates the websites www.alibaba.com and www.aliexpress.com," and Defendant Taobao China Holding Ltd. "is the operating entity for the overseas business of Taobao Marketplace and Tmall platforms." Id. ¶¶ 16, 25. The pleading then sweeps in several other Alibaba entities—including Alibaba.com, Inc.—by alleging that they are collectively responsible for allowing the Merchant Defendants to list and sell counterfeit Atmos vaporizers on the Alibaba Platforms. See id. ¶¶ 75-76, 81, 93, 95.

Alibaba.com, Inc. does not operate or exercise any control over the content of the Alibaba Platforms. See Decl. of Michael Lee, dated Dec. 10, 2015 ("Lee Decl.") ¶ 9. [D.E. 44-

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1].² Nor does it manufacture, sell, or deliver any of the products displayed on the Alibaba Platforms, or own, control, or take possession of them. See id. ¶ 10. Rather, Alibaba.com, Inc. is a business-to-business e-commerce company that focuses on technology maintenance, marketing, and administrative services. See id. ¶ 8; SAC ¶ 21. It provides marketing services to promote the brand awareness of the Alibaba Platforms through trade show exhibitions, event marketing, online display advertising, search engine marketing, affiliate marketing, social media marketing, cross promotional business partnerships, and public relations. See Lee Decl. ¶ 11.

Alibaba.com, Inc. has no presence in Florida. It is incorporated in Delaware and has its only office in San Mateo, California. See SAC ¶ 56; Lee Decl. ¶ 2. It does not have any offices or employees in Florida. See Lee Decl. ¶ 4. It does not have any contracts to supply goods or services to companies or individuals in Florida. See Lee Decl. ¶ 5. It does not direct any marketing services to Florida and, since 2012, has not sent any employees to Florida.³ See id. ¶ 6, 12.

II. DISCUSSION

Alibaba.com, Inc. moves to dismiss this action under Rule 12(b)(2) for lack of personal jurisdiction. Atmos argues that this Court has personal jurisdiction over the Alibaba entities, including Alibaba.com, Inc., on the grounds that there is both general and specific personal jurisdiction under Florida's long arm statute.⁴ See SAC ¶¶ 46, 48(a). Atmos, however, fails to

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show how or why this Court has jurisdiction over Alibaba.com, Inc., relying instead on general assertions about the cumulative conduct of the "ALIBABA Defendants." See, e.g., SAC ¶¶ 46, 48. As shown more fully below, because Alibaba.com, Inc. neither operates nor controls any of the Alibaba Platforms, nor has any presence in Florida, the Court lacks personal jurisdiction over it. For those reasons, Alibaba.com, Inc.'s Motion to Dismiss is granted.

A. General Principles Governing Personal Jurisdiction

Because federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons, Daimler AG v. Bauman, 134 S. Ct. 746, 753 (2014), a federal court sitting in Florida must conduct a two-step inquiry to determine whether it has personal jurisdiction over a non-resident defendant. The court must determine "(1) whether personal jurisdiction exists over the nonresident defendant . . . under Florida's long-arm statute, and (2) if so, whether that exercise of jurisdiction would violate the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution." Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1350 (11th Cir. 2013).

Under Florida's long-arm statute, Fla. Stat. § 48.193, a non-resident defendant can be subject to personal jurisdiction in two ways. First, a Florida court can exercise general personal jurisdiction—that is, jurisdiction over any claims against a defendant, whether or not they involve the defendant's activities in Florida—if the defendant engages in "substantial and not isolated activity" in Florida. Schulman v. Inst. for Shipboard Educ., 624 F. App'x 1002, 1005 (11th Cir. 2015). Second, a Florida court can exercise specific personal jurisdiction—that is,

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jurisdiction over suits that arise out of or relate to a defendant's contacts with Florida--if the claim asserted against the defendant arises from the defendant's contacts with Florida, and those contacts fall within one of nine statutorily enumerated categories set forth in section 48.193(1)(a). Id.

If the requirements of the long-arm statute are satisfied, then the court must determine whether the defendant has established sufficient "minimum contacts" with the State of Florida, such that the exercise of jurisdiction over the defendant would not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945).

The plaintiff bears the initial burden of pleading sufficient material facts to make out a prima facie case of jurisdiction. See Future Tech. Today, Inc., v. OSF Healthcare Systems, 218 F.3d 1247, 1249 (11th Cir. 2000). If the plaintiff does so, the burden shifts to the defendant to contradict the plaintiff's allegations by affidavits or other competent evidence. See Posner v. Essex Ins. Co., 178 F.3d 1209, 1214-15 (11th Cir. 1999). To the extent the defendant's proffered evidence does not contradict the plaintiff's jurisdictional allegations, the allegations must be accepted as true. See id. at 1215 (citation omitted). But to the extent the defendant does contradict the plaintiff's allegations, the burden shifts back to the plaintiff, this time requiring the plaintiff to prove—not merely allege—jurisdiction by affidavits, testimony, or other documents. See id. at 1214-15.

B. The Court Does Not Have General Jurisdiction Over Alibaba.com, Inc.

Alibaba.com, Inc. does not fall within the general jurisdiction of this Court. The reach of Florida's general jurisdiction provision, Fla. Stat. § 48.193(2), extends to the limits on personal jurisdiction imposed by the Due Process Clause of the Fourteenth Amendment. Fraser v. Smith,

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594 F.3d 842, 846 (11th Cir. 2010). "A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations," without offending due process, only "when their affiliations with the State are so 'continuous and systematic' as to render them essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011) (quoting Int'l Shoe Co., 326 U.S. at 317). Only in an "exceptional" case will "a corporation's operations in a forum other than its formal place of incorporation or principal place of business" be "so substantial and of such a nature as to render the corporation at home in that State." Daimler, 134 S. Ct. at 761 n.19. Accordingly, "[a] foreign corporation cannot be subject to general jurisdiction in a forum unless the corporation's activities in the forum closely approximate the activities that ordinarily characterize a corporation's place of incorporation or principal place of business." Carmouche v. Tamborlee Mgmt., Inc., 789 F.3d 1201, 1205 (11th Cir. 2015).

Alibaba.com, Inc. is hardly at home in Florida. As noted above, and as Atmos acknowledges, Alibaba.com, Inc. is incorporated in Delaware and has its only office in San Mateo, California. See SAC ¶¶ 21, 56. Alibaba.com, Inc. does not have any employees in Florida; does not direct its marketing services to Florida or tailor its marketing services for individuals or businesses in Florida; does not have any contracts to supply goods or services to any companies or individuals in Florida; and, since 2012, has not sent any employees to Florida. See Lee Decl. ¶¶ 3-5, 12. Accordingly, the Court lacks general jurisdiction over Alibaba.com, Inc. See, e.g., Hard Candy, LLC v. Hard Candy Fitness, LLC, Case No. 13-23705-CIV, 2015 WL 3377906, at *18 (S.D. Fla. May 13, 2015) (finding no general jurisdiction under the Florida long-arm statute where the defendants were not incorporated in Florida, were not residents of

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