Confectionary Arts Int'l, LLC v. CK Prods. LLC, Civil No. 3:16cv2015 (JBA)
| Decision Date | 01 March 2018 |
| Docket Number | Civil No. 3:16cv2015 (JBA) |
| Court | U.S. District Court — District of Connecticut |
| Parties | CONFECTIONARY ARTS INTERNATIONAL, LLC, Plaintiff, v. CK PRODUCTS LLC and CENTRAL INVESTMENT LLC, Defendant. |
Plaintiff, Confectionery Arts International, LLC ("CAI") filed this action against Defendants CKP Products LLC ("CKP") and Central Investment LLC ("CI") on December 9, 2016 alleging trademark infringement in violation of Section 32 of the Lanham Act, 15 U.S.C. § 1114(a) (Count One), unfair competition, false designation of origin and false or misleading representation of fact in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (Count Two), unfair competition and misappropriation in violation of Connecticut common law (Count Three) and unfair competition and trade practices under the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a (Count Four). Defendants now move to dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction over both CKP and CI and Fed. R. Civ. P. 12(b)(3) because this Court is not an appropriate venue for Plaintiff's lawsuit under 28 U.S.C. § 1391.1 (Def.'s Mem. Supp. Mot. to Dismiss ("Def.'s Mot. to Dismiss") [Doc. # 28] at 1.) For the reasons that follow, Defendants' Motion is granted insofar as it seeks dismissal of CI, but denied in all other respects.
Plaintiff, a registered Connecticut limited liability company, is a private label manufacturer and wholesaler specializing in the manufacture of a broad spectrum of food products for the retail, food service and industrial markets, which includes the cake and confectionery decorating industry in the state of Connecticut. (Czerczak Aff. [Doc. # 32] ¶ 2.) Plaintiff has been using the trademark DISCO DUST® for a product line of decorative food glitter since 1999. On January 24, 2012, Plaintiff officially registered its DISCO DUST® with the United States Patent and Trademark Office, obtaining Reg. No. 4,089,733.
CI is a privately-held, Cincinnati-based limited liability company that manages a portfolio of investments, including directing private equity investments, for the business of its members. (See Ex. 1 (Martin Decl.) to Def.'s Mot. to Dismiss [Doc. # 29] ¶ 3.) CI maintains an office in Cincinnati, Ohio and has no offices, corporate assets, or employees in Connecticut. (Id. ¶ 5). CKP is a manufacturer and wholesale distributor in the candy making, cake decorating, and commercial baking industries. (Id. ¶ 8). CKP maintains an office, production, and distribution facility in Fort Wayne, Indiana. (Id. ¶ 9). CKP has no offices, corporate assets, or employees in Connecticut. (Id. ¶ 11).
As a wholesale distributor, CKP does not directly deal with any end customer and sells to resellers that, prior to purchasing any CKP products, must demonstrate that they are businesses. (Id. ¶¶ 33-35). Typically, the businesses that purchase products from CKP resell them to individual customers or use the products as part of a larger bakery process. (Id. ¶ 37). However, CKP does not control the advertising or sales activity of any of its reseller customers. (Id. ¶¶ 37, 41). CKPdoes not track the resale of its products by any resellers, including those on e-commerce sites like Amazon and eBay. (Id. ¶ 37).
CKP maintains a website that allows a user to locate a potential retail reseller of its product. (Martin Decl. ¶ 38). However, this search function does not identify whether a given retailer carries any particular item, let alone the disco dust product at issue in this lawsuit. (Id.). CKP does not track any sales from those retail resellers and does not have its own storefronts. (Id. ¶ 37). Once a customer registers with CKP, orders can be placed in one of three ways. First, the customer can fax an order request to CKP's office in Indiana. (Id. ¶ 36a). Second, the customer can call the Indiana office and speak to a sales representative directly. (Id. ¶ 36b). Finally, the customer can place an order through CKP's website. (Id. ¶ 36c). CKP manages its website in Indiana and, to the extent that orders are received through its website, CKP processes those orders at the Indiana office. (Id. ¶ 30).
In 2005, Defendant CKP was acquired by Defendant CI, an Ohio limited liability company. (Am. Compl. ¶ 19.)2 At that point, while maintaining its facility in Indiana, Defendant CKP also became an Ohio limited liability company (Id. ¶ 4). CKP and CI are separate and distinct limited liability companies. (Martin Decl. ¶ 14). While CI owns equity in CKP, CKP has its own, separate employees that manage CKP's business. (Id. ¶ 15). Although CKP's General Manager reports to management at CI periodically, CI is not involved, in any way, with the day-to-day manufacturing and sale processes of CKP. (Id. ¶ 16).
Plaintiff has had a business relationship with Defendant CKP, also a wholesaler in the cake and baked goods decorating industry, and its predecessor company, Country Kitchen, since Plaintiff's first year of operation, 1999. (Czerczak Aff. ¶ 7; Am. Compl. ¶¶ 25, 34.) Defendant CKP, from both its Indiana address and its Georgia address, regularly purchased products from Plaintiff, including Tylose powder and gum paste. (Czerczak Aff. ¶¶ 7, 8.) Defendant CKP regularly resold these products to retailers, using Plaintiff's original labeling, indicating Plaintiff as the source. (Czerczak Aff. ¶¶ 8, 9.) Defendant CKP regularly paid for its purchases from Plaintiff with a CKP company check, labeled with Defendant CI's Ohio business address. (Czerczak Aff. ¶ 14.)3
In July 2015, Defendant CKP received a trademark cease and desist letter from a German corporation, SE Tylose GmbH & Co. KG about Tylose Powder. (Martin Decl. ¶ 20.) At that point, Plaintiff was contacted by Patrick Kenney, whose email signature identified himself as the "Purchasing Manager" for CI. (Czerczak Aff. ¶¶ 15, 17-21; Ex. B (Email Exchange) to Pl.'s Opp'n [Doc. # 33-2]; Martin Aff. ¶¶ 20-27.).
In September 2016 Plaintiff discovered that Defendant CKP was selling its own brand of decorative glitter under the name Disco Dust. (Am. Compl., ¶¶ 38-45; Czerczak Aff., ¶ 23; Ex. C (Photo of Disco Dust Product) to Pl.'s Opp'n [Doc. # 33-3].) On September 14, 2016, Plaintiff sent a letter to the General Manager of Defendant CKP at its Indiana address informing it of its infringement of Plaintiff's DISCO DUST® trademark with a copy of the federal registrationcertificate. (Am. Compl., ¶ 47.) Having received no response, Plaintiff sent a second letter on October 19, 2016. (Id. ¶ 48.)
On October 25, 2016, Defendant CKP announced on its website, www.ckproducts.com, that and noting that "Disco Dust® is a registered trademark of Confectionary Arts, Inc. [sic]." (Id. ¶ 51; Ex. D to Pl.'s Opp'n [Doc. # 33-4].) Defendant CKP labeled its decorative glitter product with "Disco Glitter/ (comparable to Disco Dust®)/ For Decorative arts & crafts/Disco Dust® is a registered trademark/ of Confectionary Arts, Inc./ www.CKproducts.com." (Ex. E to Pl.'s Opp'n [Doc. #33-5].) In November of 2016, Patrick Kenney of CI contacted Plaintiff by telephone with notification that Defendant CPK's Disco Dust product name had been changed to Disco Glitter. (Czerczak Aff. ¶¶ 28, 29; Am. Compl., ¶¶ 53-54.) In response to Plaintiff's assertion that Disco Glitter was still "too similar to Disco Dust," Mr. Kenny responded that "[w]e respectfully disagree that the name is too similar to Disco Dust." (Am. Compl. ¶ 55.)4
In 2016, decorative disco dust product sales in Connecticut by CKP- including any sale of DISCO GLITTER - amounted to only 0.6% of the total disco dust product sales nationwide. (Martin Decl. ¶ 43). As of March 31, 2017, CKPS's DISCO GLITTER disco dust product line sales in Connecticut accounted for 1% of total product's sales to CKP's direct customers. (Id. ¶ 44). Over the past three years and first three months of 2017, CKP's total revenue from sales of all products into Connecticut is less than 2.5% of total revenue nationwide. (Id. ¶ 45).
"'On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant.'" Quinn v. Fishkin, 117 F. Supp. 3d 134, 138 (D. Conn. 2015) (quoting Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566-67 (2d Cir. 1996)). In order to survive such a motion, the "plaintiff must make a prima facie showing that jurisdiction exists." Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 167 (2d Cir. 2013) (internal quotation marks omitted). "In evaluating whether the requisite showing has been made, [courts] construe the pleadings and any supporting materials in the light most favorable to the plaintiff[]." Id.
"To determine personal jurisdiction over a non-domiciliary in a case involving a federal question, the Court must engage in a two-step analysis." Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010). First, the Court applies "the forum state's long-arm statute." Id. "If the long-arm statute permits personal jurisdiction, the second step is to analyze whether personal jurisdiction comports with the Due Process Clause of the United States Constitution." Id. at 164.
Connecticut's long-arm statute applicable to non-resident individuals, Section 52-59(b), has also been held to apply to non-resident LLCs. See Austen v. Catterton Partners V, LP, 729 F. Supp. 2d 548, 559 (D. Conn. 2010); see also Matthews v. SBA, Inc., 149 Conn. App. 513, 544- 52, 555-61 (2014). Plaintiff argues the Court has personal jurisdiction...
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