Car-Freshner Corp. v. Meta Platforms, Inc.
| Docket Number | 5:22-CV-1305 (MAD/ML) |
| Decision Date | 07 November 2023 |
| Parties | CAR-FRESHNER CORPORATION and JULIUS SAMANN LTD, Plaintiffs, v. META PLATFORMS, INC., Defendant. |
| Court | U.S. District Court — Northern District of New York |
BOND SHOENECK & KING, PLLC LIZA R. MAGLEY, ESQ. LOUIS ORBACH ESQ. Attorneys for Plaintiffs
KILPATRICK TOWNSEND & STOCKTON, LLP H. FORREST FLEMMING III, ESQ. R. CHARLES HENN, JR., ESQ. WILLIAM H. BREWSTER ESQ. Attorneys for Defendant
Plaintiffs Car-Freshner Corporation ("CFC") and Julius Samann Ltd. ("JSL") (collectively, "Plaintiffs") initiated this action on December 6, 2022, by filing a complaint. See Dkt. No. 1. Plaintiffs' claims arise from alleged trademark infringement.
On January 27, 2023, Defendant Meta Platforms, Inc. ("Meta"), filed a letter motion seeking to file a motion to dismiss or, in the alternative, a motion to transfer. See Dkt. No. 10. Following a telephone conference, the Court permitted Plaintiffs to file an amended complaint and for Meta to subsequently file a motion to dismiss if it deemed one necessary. See Text Minute Entry 02/13/23. Plaintiffs filed their amended complaint on February 27, 2023. See Dkt. No. 13. Meta filed its motion to dismiss on March 13, 2023. See Dkt. No. 17. Plaintiffs responded, and Meta replied. See Dkt. Nos. 21, 22. For the following reasons, Meta's motion to dismiss is granted in part and denied in part.
JSL owns three trademarks (the "Marks") for Little Trees air fresheners. See Dkt. No. 13 at ¶¶ 2, 16, 18, 31. CFC is the exclusive licensee of JSL's trademarks. See id. at ¶ 30. CFC manufactures the air fresheners in Watertown, New York and DeWitt, Iowa. See id. at ¶ 1. Plaintiffs' three trademark designs include the Tree Design Mark (the tree shape), the "Little Tree" Mark, and the "Vanillaroma" Mark. See id. at ¶¶ 16, 18, 20, 31. Plaintiffs' air fresheners are sold across the United States and Plaintiffs have created additional merchandise using the Marks including t-shirts and stickers. See id. at ¶¶ 27, 35-36, 39. Meta owns and operates the social media websites Facebook and Instagram. See id. at ¶ 3. One part of Facebook is Facebook Marketplace which allows businesses and individuals to sell real and personal property to consumers. See id. at ¶ 4. Products are also advertised and sold through Instagram. See id. at ¶ 3.
Plaintiffs discovered that third parties were selling and advertising air fresheners, stickers, and t-shirts which used Plaintiffs' trademarks on Facebook Marketplace and Instagram. See Dkt. No. 13 at ¶¶ 80-86, 107-10. Plaintiffs contend that "[o]n November 9, 2022, a set of these Infringing Air Fresheners was sold to a customer on Facebook Marketplace for delivery to an address in Jefferson County, New York." Id. at ¶ 87. Plaintiffs assert that Meta collected New York sales tax from the purchase. See id. at ¶ 98. On November 10, 2022, the customer received an e-mail from commerce-no-reply@support.Facebook.com with tracking information for the order, which included the New York address. See id. at ¶ 99. "The email was signed 'The Facebook Marketplace Team.'" Id. at ¶ 103.
On October 18 and November 9, 2022, two Trademark Report Forms were submitted to Facebook "on Plaintiffs' behalf" which identified the allegedly infringing products and Plaintiffs' Marks. See Dkt. No. 13 at ¶¶ 113, 116. Plaintiffs contend that Facebook refused to remove the product listing from Facebook Marketplace. See id. at ¶¶ 114, 117. On October 18, 2022, two Trademark Report Forms were submitted to Instagram "on Plaintiffs' behalf," but Instagram did not remove "the post promoting the Infringing T-shirts" or stickers. Id. at ¶¶ 118, 123. Plaintiffs then submitted evidence of their trademark registration numbers to Instagram. See id. at ¶¶ 120, 122, 125, 127. As of the date Plaintiffs filed their original complaint, December 6, 2022, the allegedly infringing products had not been removed from Facebook or Instagram. See id. at ¶ 128; see also Dkt. No. 1. Plaintiffs allege that Meta's refusal to remove the products from Facebook and Instagram infringed on Plaintiffs' trademarks. See Dkt. No. 13 at ¶ 133.
Meta contends that CFC uses Facebook and Instagram to promote and advertise its products and has been using Facebook since 2015 and Instagram since 2019. See Dkt. No. 17-1 at 13. Meta states that users must agree to its Terms of Service and Use when it creates an account. See id. The current Facebook Terms provide as follows:
You and Meta each agree that any claim, cause of action, or dispute between us that arises out of or relates to these Terms or your access or use of the Meta Products shall be resolved exclusively in the U.S. District Court for the Northern District of California or a state court located in San Mateo County.
Id. at 14. The current Instagram Terms state as follows:
Id.[1] Meta confirms that "automated emails may be sent by Facebook Marketplace." Id. at 13. Additionally, if a customer uses "shipping and checkout," "the seller pays 5% (with a forty cent minimum as a selling fee (regardless of who buys the product, where it is shipped, etc.) and Facebook Marketplace collects the applicable sales tax." Id. at 13, n.3. However, Meta argues that this Court does not have personal jurisdiction over Meta because it has not purposefully availed itself of New York's jurisdiction, and, even if it has, the case should be transferred to the Northern District of California or dismissed for failure to state claim. See id. at 10-33.
Meta moves to dismiss Plaintiffs' amended complaint under Rule 12(b)(2) of the Federal Rules of Civil Procedure. See Dkt. No. 17-1 at 15-20. "'A plaintiff bears the burden of demonstrating personal jurisdiction over a person or entity against whom it seeks to bring suit.'" Troma Entm't, Inc. v. Centennial Pictures Inc., 729 F.3d 215, 217 (2d Cir. 2013) (quoting Penguin Grp. (USA) Inc. v. American Buddha, 609 F.3d 30, 34 (2d Cir. 2010)). When deciding a Rule 12(b)(2) motion, the Court may consider materials outside the pleadings "without converting [the] motion to dismiss for lack of personal jurisdiction into a motion for summary judgment." Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 86 (2d Cir. 2013). "Where, as here, a district court in adjudicating a motion pursuant to Federal Rule of Civil Procedure 12(b)(2) 'relies on the pleadings and affidavits, and chooses not to conduct a full-blown evidentiary hearing, plaintiffs need only make a prima facie showing of personal jurisdiction.'" Southern New England Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 138 (2d Cir. 2010) (quotation omitted); see also Eades v. Kennedy, PC Law Offices, 799 F.3d 161, 167-68 (2d Cir. 2015). "This prima facie showing 'must include an averment of facts that, if credited by the ultimate trier of fact, would suffice to establish jurisdiction over the defendant.'" In re Terrorist Attacks on September 11, 2001, 714 F.3d 659, 673 (2d Cir. 2013) (quoting Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010)).
"In evaluating whether the requisite showing has been made, [courts] construe the pleadings and any supporting materials in the light most favorable to the plaintiffs." Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 167 (2d Cir. 2013) (citing Chloe, 616 F.3d at 163). "A prima facie showing of jurisdiction 'does not mean that plaintiff must show only some evidence of jurisdiction; it means that plaintiff must plead facts which, if true, are sufficient in themselves to establish jurisdiction.'" Tamam v. Fransabank Sal, 677 F.Supp.2d 720, 725 (S.D.N.Y. 2010) (citation omitted). Pleadings that assert only "conclusory non-fact-specific jurisdictional allegations" or state a "legal conclusion couched as a factual allegation" do not meet this burden. Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir. 1998) (citation omitted). Finally, although a court is to assume the truth of all well-pled factual allegations that support a finding of personal jurisdiction, it should "not draw 'argumentative inferences' in the plaintiff's favor." Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994) (quoting Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992)).
Meta also moves to transfer the case to the Northern District of California. See Dkt. No. 17-1 at 20-23. Under 28 U.S.C. § 1404(a), "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought, or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). "Section 1404(a) reflects an increased desire to have federal civil suits tried in the federal system at the place called for in the particular case by considerations of convenience and justice."...
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