Clockwork IP, LLC v. Clearview Plumbing & Heating Ltd., 4:14–CV–1618 JAR.

• Decision Date: 31 August 2015
• Docket Number: No. 4:14–CV–1618 JAR.,4:14–CV–1618 JAR.
• Citation: 127 F.Supp.3d 1020
• Parties: CLOCKWORK IP, LLC, Airtime, LLC, and Aquila Investment Group, LLC, Plaintiffs, v. CLEARVIEW PLUMBING & HEATING LTD. and Giraffe Corporation, Defendants.
• Court: U.S. District Court — Eastern District of Missouri

127 F.Supp.3d 1020

CLOCKWORK IP, LLC, Airtime, LLC, and Aquila Investment Group, LLC, Plaintiffs,

v.CLEARVIEW PLUMBING & HEATING LTD. and Giraffe Corporation, Defendants.

No. 4:14–CV–1618 JAR.

United States District Court, E.D. Missouri, Eastern Division.

Signed Aug. 31, 2015.

George R. Spatz, McGuire Woods, LLP, Chicago, IL, William N. Federspiel, McGuire Woods, LLP, Richmond, VA, Michael A. Clithero, Lathrop and Gage, LLP, Clayton, MO, for Plaintiffs.

Adam D. Hirtz, Jamie Nicole Mahler, Lowenbaum Partnership, L.L.C., St. Louis, MO, for Defendants.

MEMORANDUM AND ORDER

JOHN A. ROSS, District Judge.

This matter is before the Court on Defendants' Motion to Dismiss for Lack of Personal Jurisdiction. (Doc. No. 21) The motion is fully briefed and ready for disposition.

Background

This action arises out of an intellectual property dispute. Plaintiffs Clockwork IP, LLC ("Clockwork"), AirTime, LLC ("AirTime"), and Aquila Investment Group, LLC ("Aquila") (collectively "Plaintiffs") bring this action against two Canadian companies, Defendants Clearview Plumbing & Heating LTD ("Clearview") and Giraffe Corporation ("Giraffe"), for trademark infringement under 15 U.S.C. § 1114 (Count I), unfair competition under 15 U.S.C. § 1125(a) (Count II), conversion (Count III), fraudulent inducement (Count IV), and tortious interference with a business expectancy (Count V).

Clockwork is a Delaware limited liability company with its principal place of business in Sarasota, Florida. (Complaint ("Compl."), Doc. No. 1 at ¶ 3) Clockwork is the intellectual property holding subsidiary of Clockwork, Inc., d/b/a Clockwork Home Services, under three principle brand names: Benjamin Franklin the Punctual Plumber®, One Hour Heating & Air Conditioning® and Mr. Sparky®. (Id. at ¶¶ 1, 19) Clockwork Home provides plumbing, heating and air conditioning, and electrical services in North America. (Id. at ¶ 1) Aquila is an Illinois limited liability company d/b/a Success Group International ("SGI"), with its principal place of business in Sarasota, Florida. (Id. at ¶ 5) SGI offers business services to contractors who do not want to become franchisees. Instead, these contractors become SGI Affinity Group members and receive the same business process tools and technical training as franchisees without relinquishing their name and brand identity. (Doc. No. 22 at ¶ 6) AirTime is a Missouri limited liability company with its principal place of business in Sarasota, Florida. At all relevant times, AirTime operated the SGI Affinity Group.¹ (Id. at ¶¶ 4, 6) Clearview is primarily engaged in the business of plumbing, air conditioning and heating services in Canada. (Id. at ¶ 7); Giraffe is an intellectual property holding company owned and controlled by Clearview. (Id. at ¶ 8) Both Clearview and Giraffe are organized and existing under the laws of Canada. (Id. at ¶¶ 7, 8)

According to Plaintiffs, this dispute arises from Defendants' activities with SGI. (Doc. No. 26 at 2) Plaintiffs allege that Defendants' first identified interaction with AirTime and SGI occurred around 2000 when Clearview's principal, Kyle Lumsden, attended an event hosted by SGI in New Jersey where Clockwork Home announced its franchise branding for THE PUNCTUAL PLUMBER. (Compl. at ¶¶ 11, 33) Sometime thereafter, Clearview misappropriated and adopted THE PUNCTUAL PLUMBER marks for itself. (Id. at ¶ 34) Plaintiffs further allege that sometime in 2008, Clearview targeted their Tech Seal Program and misappropriated their TECH SEAL mark. (Id. at ¶¶ 38–40)

From March 2011 until May 2013, Clearview was a member of SGI's licensed Canadian affiliate, SGI Canada. As a member of SGI Canada, Clearview had the opportunity to license Clockwork trademarks for use in its business. (Id. at ¶¶ 12, 30)

In October 2011, Clearview was offered three licensing agreements for AirTime marks; the marks offered were WE FIX IT OR IT'S FREE; GREEN SCREENED; and the TECH SEAL mark. (Id. at ¶ 41) Clearview executed license agreements for the marks WE FIX IT OR IT'S FREE and GREEN SCREENED. Because Clearview was already using a "colorable imitation" of the TECH SEAL mark, it did not execute the agreement for the TECH SEAL mark. (Id. at ¶ 42) All actions arising out of or relating to these licensing agreements were required to be brought in either the Twenty–First Judicial Circuit Court of the State of Missouri or the United States District Court for the Eastern District of Missouri, Eastern Division.² (Id. at ¶ 12) Plaintiffs contend that Clearview's repeated misappropriation of Clockwork's intellectual property has hindered it from marketing and growing its Benjamin Franklin Plumbing business and diminished the value of its marks.

Defendants move to dismiss the complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). Defendants argue they have not transacted business in Missouri, made any contracts in Missouri, or committed any tortious acts in Missouri. Even if they had engaged in such activities, Defendants argue they lack sufficient minimum contacts with Missouri to satisfy due process. (Doc. No. 22 at 2) The principal of Clearview, Kyle Lumsden, and the principal of Giraffe, Melanie Lumsden, have filed declarations in support of these arguments. (Doc. Nos. 22–1, 21–2) In response, Plaintiffs argue that because Defendants directed their tortious conduct, in part, at a Missouri company, and otherwise have the requisite minimum contacts to support jurisdiction in Missouri and the United States, their motion should be denied. (Doc. No. 26 at 6–7)

Legal standard

To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing of personal jurisdiction by pleading facts sufficient to support a "reasonable inference that the defendant[ ] can be subjected to jurisdiction within the state." K–V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591–92 (8th Cir.2011) (internal quotation and citations omitted). If personal jurisdiction is challenged, the plaintiff has the burden of proving facts supporting such jurisdiction. Wells Dairy, Inc. v. Food Movers Int'l, Inc., 607 F.3d 515, 518 (8th Cir.2010). This "showing must be tested, not by the pleadings alone, but by the affidavits and exhibits presented with the motions and in opposition thereto." Id. (internal quotation marks omitted). Where, as here, the district court does not hold a hearing and instead relies on pleadings and affidavits, the Court must look at the facts in the light most favorable to the nonmoving party and resolve all factual conflicts in its favor. K–V Pharm. Co., 648 F.3d at 591–92.

Discussion

A federal court may assume jurisdiction over a nonresident defendant only to the extent permitted by the forum state's long-arm statute and the Due Process Clause of the Constitution. Dakota Industries, Inc. v. Ever Best Ltd., 28 F.3d 910, 915 (8th Cir.1994) (citing Morris v. Barkbuster, Inc., 923 F.2d 1277, 1280 (8th Cir.1991) ). The Eighth Circuit suggests these two questions should be analyzed separately. Dairy Farmers of Am., Inc. v. Bassett & Walker Intern., Inc., 702 F.3d 472, 475 (8th Cir.2012). Missouri's long-arm statute authorizes personal jurisdiction over defendants who, inter alia, transact business, make a contract, or commit a tortious act within the state. See Mo.Rev.Stat. § 506.500.1(1), (2), (3). "These individual categories are construed broadly, such that if a defendant commits one of the acts specified in the long-arm statute, the statute will be interpreted to provide for jurisdiction, within the specific categories enumerated in the statute, to the full extent permitted by the Due Process Clause." Viasystems, Inc. v. EBM–Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 593 n. 2 (8th Cir.2011). The Court will, therefore, focus on whether exercising personal jurisdiction over Defendants comports with federal due process standards. Dakota Indus., 28 F.3d at 915. See also Gray v. Hudson, 2015 WL 4488143, at *9 (E.D.Mo. July 23, 2015) ; Meredith, Inc. v. Marketing Resources Group of Oregon, Inc., 2005 WL 2334294, at *2 (E.D.Mo. Sept. 23, 2005). If it does, Defendants would be subject to the long-arm statute, and if it does not, Plaintiffs' claims should be dismissed for lack of personal jurisdiction. See Express Scripts, Inc. v. Care Continuum Alliance, Inc., 2011 WL 2199967, at *2 (E.D.Mo. June 7, 2011) ; Clune v. Alimak AB, 233 F.3d 538, 541 (8th Cir.2000).

Due process requires a defendant have certain minimum contacts with the forum state such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." See Myers v. Casino Queen, Inc., 689 F.3d 904, 911 (8th Cir.2012) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). The relevant contacts with the forum state must be more than "random, fortuitous or attenuated." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citations omitted). "The fundamental inquiry is whether the defendant has ‘purposefully availed’ itself of the ‘benefits and protections' of the forum state," Viasystems, Inc., 646 F.3d at 594 (quoting Burger King Corp., 471 U.S. at 482, 105 S.Ct. 2174 ), "to such a degree that it ‘should reasonably anticipate being haled into court there.’ " Id. (quoting World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) ).

The Eighth Circuit has established a five factor test to determine whether a defendant's contacts with the forum state are sufficient to establish personal jurisdiction over the defendant: "(1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts; (3) the relationship of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience or inconvenience to the parties." Dairy Farmers, 702 F.3d at 477 (quoting K–V Pharm., 648 F.3d at 592 ).

The...