Cole-Tuve, Inc. v. American Machine Tools Corp.

• Decision Date: 26 October 2004
• Docket Number: No. CIV. RDB 04-349.,CIV. RDB 04-349.
• Citation: 342 F.Supp.2d 362
• Parties: COLE-TUVE, INC., Plaintiff, v. AMERICAN MACHINE TOOLS CORP., Defendant.
• Court: U.S. District Court — District of Maryland

342 F.Supp.2d 362

COLE-TUVE, INC., Plaintiff, v. AMERICAN MACHINE TOOLS CORP., Defendant.

No. CIV. RDB 04-349.

United States District Court, D. Maryland, Northern Division.

October 26, 2004.

COPYRIGHT MATERIAL OMITTED

Donald J. Walsh, Scaldara and Potler LLP, Baltimore, MD, Donald C. Casey, Law Office of Donald C. Casey, Alexandria, VA, for Plaintiff.

MEMORANDUM OPINION

BENNETT, District Judge.

Plaintiff, Cole-Tuve Inc., filed a Complaint against Defendant American Machine Tools Corp., (hereafter, "AMT") for violations of the Lanham Act, common law trademark infringement, and an intentional tort.¹ In response, AMT has made a special appearance to contest jurisdiction and venue and has requested that this Court (1) dismiss Cole-Tuve's Complaint for lack of personal jurisdiction in accordance with Federal Rule of Civil Procedure 12(b)(2), or in the alternative, (2) transfer the case to United States District Court for the Northern District of Illinois, (3) dismiss this action for improper venue pursuant to Rule 12(b)(3), or in the alternative (4) transfer this case to the United States District Court for the Northern District of Illinois, as provided for by 28 U.S.C. § 1404. No hearing is necessary. See Local Rule 105.6 (D.Md.2002). For the reasons that follow, AMT's motion will be DENIED.

I. Background

Plaintiff Cole-Tuve, is a Maryland corporation that sells and rents machine tools with its principal place of business in White Marsh, Maryland. Cole-Tuve operates a website registered as coletuve.com. Defendant AMT is an Illinois corporation that sells and rents similar machine tools, and has its principal place of business in Chicago. Like Cole-Tuv, AMT runs a website, which is registered as machinetooldistributor.com. Both websites advertise the machine tools that the two companies sell, and the websites provide company contact and ordering information.²

Recently, AMT registered a second website name, cole-tuve.com. Any internet user who attempts to view cole-tuve.com is presented with an "error" page explaining that there are no files to view at this address. The error page also suggests that the user visit the main site of that name's registered owner, machinetooldistributor.com. (Pl.Compl.Ex. D.) As a result, a computer user who types cole-tuve.com, rather than coletuve.com will be directed to AMT, not Cole-Tuve. Cole-Tuve filed the instant action contending that this misdirection was intentional, and that the acts have harmed its business.

AMT has moved to dismiss or transfer the action based on lack of personal jurisdiction and improper venue. AMT, apparently ignoring Cole-Tuve's intentional tort allegations, maintains that "the sole allegation upon which the four counts in the complaint are based involve the allegation that American Machine infringed on Cole-Tuve's trademark." (Def. Mot. to Dismiss at 1-2.) As a result, the majority of AMT's submission is devoted to disputing the presence or absence of the contacts necessary to sustain an exercise of general jurisdiction. AMT devotes approximately one page to a preemptive rebuttal of specific jurisdiction arguments, noting "The sole argument that Cole-Tuve, a Maryland corporation, may have been injured or damaged as a result of American Machine's actions, does not create the necessary factual predicate for specific jurisdiction to apply based on the ESAB case." (Def. Mot. to Dismiss at 6 (citing ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617 (4th Cir.1997))). As a result, AMT maintains that questions of specific jurisdiction are not applicable in this case.

With respect to venue, AMT argues that all copyright actions must be brought in the district where the defendant is physically located, relying, for support, on its own reading of 28 U.S.C. § 1400(a). In the alternative, AMT maintains that the case must be dismissed or transferred based on the doctrine of forum non conveniens.

Cole-Tuve, in its reply, notes that its intentional tort allegations allow for an exercise of specific jurisdiction, that AMT's reading of the venue law is incorrect, and that the standard for a transfer under forum non conveniens has not been met.

II. Standard of Review

Pursuant to Federal Rule of Civil Procedure 4(k)(1)(A), a federal court's jurisdiction extends as far as the jurisdiction of a court in the state in which the district court is located. See ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 622 (4th Cir.1997). Thus, this Court may assert personal jurisdiction over a non-resident defendant only if (1) Maryland's long-arm statute³ confers jurisdiction, and (2) the assertion of such jurisdiction is consistent with constitutional due process. See International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, 334 F.3d 390, 396 (4th Cir.2003).

The Maryland Court of Appeals has interpreted the Maryland long-arm statute to extend personal jurisdiction to the fullest extent permitted by the Due Process clause of the Fourteenth Amendment. See Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 61 (4th Cir.1993) (citing Curtis v. State, 284 Md. 132, 150, 395 A.2d 464, 474 n. 7 (1978); Md.Code Ann., Cts. & Jud. Proc. § 6-101(e) (1989 & Supp.1992)); Mohamed v. Michael, 279 Md. 653, 658-59, 370 A.2d 551, 553 (1977). The statutory analysis therefore merges into the constitutional analysis, and the only question becomes whether the exercise of jurisdiction would violate due process. Stover v. O'Connell Assocs., 84 F.3d 132, 135 (4th Cir.1996); Choice Hotels Int'l, Inc. v. Madison Three, Inc., 23 F.Supp.2d 617, 619 (D.Md.1998).

Due process is satisfied if the defendant has such "minimum contacts" with Maryland that "the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316, 66 S.Ct. 154. Courts have recognized two types of personal jurisdiction, general jurisdiction and specific jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). General jurisdiction arises where the defendant's contacts with the forum are "continuous, systematic, and fairly extensive." See id. at 318. The facts of this case do not indicate such extensive contacts with the forum and there is therefore no such "general jurisdiction" in this case.

However, where extensive contacts are lacking, the Court may exercise specific jurisdiction if (1) the defendant purposely directed its activities toward residents of Maryland or purposely availed itself of the privilege of conducting activities in the state; (2) the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) the forum's exercise of personal jurisdiction in the case is reasonable, that is, consistent with "traditional notions of fair play and substantial justice." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477-78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The defendant's activities must be purposefully directed at the forum state "in more than a random, fortuitous, or attenuated way." Id. However, its contacts with the forum need not be extensive, only seminal or related to the cause of action. See McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); ESAB Group, 126 F.3d at 625. Even a single contact may be sufficient to create jurisdiction when the cause of action arises out of that single contact, provided that principles of "fair play and substantial justice" are observed. Burger King, 471 U.S. at 477-78, 105 S.Ct. 2174.

Foreign defendants who intentionally harm residents of the forum state have been held to have intentionally interacted within the state. In Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), the Supreme Court created the so-called "effects-test," holding that jurisdiction was proper where foreign defendants researched, wrote and published an allegedly defamatory article intending to impact the plaintiff in the forum state. The U.S. Court of Appeals for the Fourth Circuit followed Calder closely in First American First, Inc. v. National Association of Bank Women, 802 F.2d 1511 (4th Cir.1986), holding that allegedly libelous letters, written in Illinois and distributed throughout the country, whose "primary and most devastating effects" were felt in Virginia, were sufficiently directed at Virginia to allow an exercise of specific jurisdiction there. Id. at 1517.

Since First American, however, the Fourth Circuit has seemed to require more than the Calder "effects-test" to hold exercises of jurisdiction over foreign tortfeasors constitutional. In ESAB Group Inc. v. Centricut, Inc., the court held that a New Hampshire resident's collusion with a Florida resident to appropriate the customer lists and trade secrets of a South Carolina corporation, was not so intentionally directed at South Carolina as to warrant an exercise of specific jurisdiction. 126 F.3d 617, 625 (4th Cir.1997). Allowing an exercise of jurisdiction in the state where the plaintiff was injured, when the defendant maintained no other contacts with the state, the court reasoned, would decide the jurisdictional inquiry on "a plaintiff's decision about where to establish residence" rather than whether defendant's activities were "expressly aimed" at the forum. Id. at 626. After all, noted the court, a plaintiff always feels the impact of the harm in his or her home state. Id.

In the case of ALS Scan, Inc. v. Digital Service Consultants, 293 F.3d 707 (4th Cir.2002), the Fourth Circuit addressed whether a "person electronically transmitting ... information via the internet to Maryland, causing injury there, subjects the person to the jurisdiction of a court in Maryland." Id. at 712. The court held that a state may exercise jurisdiction over a person outside of its borders where that person "(1) directs electronic...