Crazy Debbie's Fireworks LLC v. Dynomite Fireworks, LLC
| Decision Date | 13 December 2018 |
| Docket Number | Case No. 2:18-cv-02323-HLT-KGS |
| Parties | CRAZY DEBBIE'S FIREWORKS LLC d/b/a RED RHINO FIREWORKS, Plaintiff, v. DYNOMITE FIREWORKS, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
Plaintiff Crazy Debbie's Fireworks LLC d/b/a Red Rhino Fireworks asserts claims against Defendants Dynomite Fireworks, LLC and Dynomite Wholesale, LLC for unfair competition and false designation of origin under federal law and for state-law trademark infringement and unfair competition based on Defendants' alleged appropriation of Plaintiff's mark in promoting and selling their product. Doc. 1. Defendants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction or, in the alternative, to transfer venue. Doc. 8. The Court concludes that it lacks personal jurisdiction over Defendant Dynomite Fireworks, LLC,1 but, rather than dismissing this action, the Court transfers the case to the United States District Court for the Western District of Missouri pursuant to 28 U.S.C. § 1631.
Consistent with the standard for Rule 12(b)(2) motions, the following background accepts as true Plaintiff's well-pleaded factual allegations (unless controverted by affidavit) and resolves all factual disputes in the affidavits in Plaintiff's favor.
Plaintiff is a wholesale fireworks distributor with its principal place of business in Joplin, Missouri. Doc. 1 ¶¶ 2, 9. Among its products, Plaintiff markets and sells fireworks bearing a mark entitled "ASSASSIN." Id. at ¶ 10. Plaintiff uses this mark on its website and in its catalogs to advertise and promote its ASSASSIN-branded fireworks. Id. at ¶¶ 10-12.
Defendant Dynomite Fireworks, LLC ("Dynomite Retail")—a retail-seller of fireworks—is a Missouri limited liability company whose sole member resides in Missouri.2 Doc. 8-2 ¶¶ 2-4. Dynomite Retail also sells fireworks with a mark entitled "ASSASSIN." Doc. 1 ¶ 14. Dynomite Retail operates a storefront location in Seymour, Missouri, along with seasonal fireworks stands in Missouri and Arkansas. Doc. 8-2 ¶ 4. All of Dynomite Retail's third-party vendors are located in Missouri. Id. at ¶ 18. Dynomite Retail does not have any offices or physical locations in Kansas, it does not have any employees or sales representatives in Kansas, and its employees do not travel to Kansas to solicit business. Id. at ¶¶ 6-7, 14. Dynomite Retail does not direct its advertising to residents of, or businesses in, Kansas and has never sold any fireworks in Kansas. Id. at ¶¶ 12, 16.
Defendant Dynomite Wholesale, LLC ("Dynomite Wholesale") is a wholesale-seller of fireworks, which, like Dynomite Retail, is a Missouri limited liability company with a Missouri resident as its sole member. Id. at ¶¶ 2, 20-21. Dynomite Wholesale is the owner of USPTO Registration No. 4936828 for the trademark "ASSASSIN" for fireworks, and, like Dynomite Retail, markets and sells ASSASSIN-branded fireworks. Id. at ¶ 23; Doc. 1 ¶ 14. Dynomite Wholesale's only physical location is in Seymour, Missouri. Doc. 8-2 ¶ 22. All of Dynomite Wholesale's third-party vendors are located in Missouri. Id. at ¶ 41. Dynomite Wholesale does nothave any offices or physical locations in Kansas, it does not have any employees or sales representatives in Kansas, and its employees do not travel to Kansas to solicit business. Id. at ¶¶ 25-26, 31. Dynomite Wholesale advertises its products nationwide and offers a print catalog that can be requested by customers or prospective customers. Id. at ¶¶ 33-34. Dynomite Wholesale's catalog has been requested by and mailed to eight customers with a Kansas address. Id. at ¶ 36. Since 2012, Dynomite Wholesale has received a total of $4,565.00 for the sale of ASSASSIN-branded fireworks to customers with a Kansas address. Id. at ¶ 39. Kansas customers have accounted for less than one percent of Dynomite Wholesale's sales of its fireworks (regardless of branding) since 2012. Id. at ¶ 40.
Dynomite Retail and Dynomite Wholesale also jointly operate a website where customers can purchase their products—including ASSASSIN-branded fireworks—at retail or wholesale. Doc. 11 at 2; Doc. 11-1 ¶ 3; Doc. 11-2.
Plaintiff filed this action on June 15, 2018, asserting claims against Defendants for unfair competition and false designation of origin under the Lanham Act, 15 U.S.C. §§ 1051, et seq., and claims for trademark infringement and unfair competition in violation of Kansas law. Doc. 1. Plaintiff alleges Defendants infringed upon its rights by using the ASSASSIN mark to promote and sell their fireworks. Id. at ¶ 14. Plaintiff claims Defendants' adoption of the mark to offer and sell ASSASSIN-branded fireworks is likely to cause confusion, mistake, or deception regarding the origin, sponsorship, or approval of Defendants' fireworks, causing consumers to incorrectly assume that Plaintiff is affiliated with Defendants. Id. at ¶¶ 29, 37.
Defendants move to dismiss this action pursuant to Rule 12(b)(2), arguing that the Court lacks personal jurisdiction. Doc. 9 at 6-17. In the alternative, Defendants request that the Court transfer venue to the United States District Court for the Western District of Missouri pursuant to 28 U.S.C. § 1404(a). Id. at 18-21. In its response, Plaintiff relies heavily on Defendants' website and Dynomite Wholesale's Kansas sales in arguing against dismissal. Doc. 11 at 8-12. Plaintiff does not, however, oppose transfer of venue. Id. at 12.
A plaintiff bears the burden of establishing personal jurisdiction. OMI Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998). However, in the preliminary stages of litigation this burden is "light" and where, as here, "there has been no evidentiary hearing, and the motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written material, the plaintiff need only make a prima facie showing that jurisdiction exists." Intercon, Inc. v. Bell Atl. Internet Sols., Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (quoting Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995)). Courts accept as true all well-pleaded, non-conclusory facts alleged by the plaintiff, unless those facts are controverted by affidavit. Id. All factual disputes in the parties' affidavits are to be resolved in the plaintiff's favor. Id.
Because the Lanham Act does not provide for nationwide service of process, the Court applies the law of the forum state. Capitol Fed. Sav. Bank v. E. Bank Corp., 493 F. Supp. 2d 1150, 1158 (D. Kan. 2007). The Kansas long-arm statute is construed to allow jurisdiction to the full extent permitted by due process. Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994) (citing Volt Delta Res., Inc. v. Devine, 740 P.2d 1089, 1092 (Kan. 1987)). To satisfy due process, the nonresident defendant must have certain minimum contactswith the forum such that the imposition of jurisdiction 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) (internal quotations omitted).
The "minimum contacts" standard may be met in one of two ways. First, a defendant who has "continuous and systematic" contacts with the forum state brings itself within the general jurisdiction of that state. OMI Holdings, 149 F.3d at 1091. Second, where the activities of a defendant in a forum state are isolated or do not otherwise rise to the level necessary for an exercise of general jurisdiction, a court may exercise specific jurisdiction over the defendant if the defendant has "purposefully directed" its acts at residents of the forum and the claims at issue "arise out of or relate to" those activities. Id. at 1090-91. In its response to Defendants' motion, Plaintiff concedes that the Court lacks general jurisdiction over Defendants.3 Therefore, the Court confines its analysis to specific jurisdiction.
The specific jurisdiction analysis is two-fold. Id. at 1091. First, the court must determine whether the nonresident defendant "has such minimum contacts with the forum state 'that he should reasonably anticipate being haled into court there.'" Id. (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). Within this inquiry, the court must evaluate whether the defendant purposefully directed its activities at the forum state and whether the plaintiff's claims arise out of actions by the defendant that create a substantial connection with the forum. Id. Second, if the court finds that the defendant has the sufficient minimum contacts, the court must consider whether an exercise of jurisdiction over the defendant is reasonable—i.e., whether it "offends traditional notions of fair play and substantial justice." Id. (internal quotations omitted).
The Court finds that Dynomite Retail lacks the minimum contacts necessary to support the exercise of personal jurisdiction by the Court. There is no evidence that Dynomite Retail has purposely directed its advertising and sales of ASSASSIN-branded fireworks at Kansas residents. Dynomite Retail has no employees or physical locations in Kansas, and its employees do not travel to Kansas to solicit business. Doc. 8-2 ¶¶ 6-7, 14. Dynomite Retail operates only a storefront location in Seymour, Missouri, along with seasonal fireworks stands in Missouri and Arkansas—in other words, its physical presence is entirely confined to Missouri and Arkansas. Id. at ¶ 4. Dynomite Retail does not direct advertising to residents of, or businesses in, Kansas and, indeed, has never sold any fireworks in Kansas. Id. at ¶¶ 12, 16. All sales of ASSASSIN-branded fireworks to Kansas customers were made by Dynomite Wholesale, rather than Dynomite Retail. Id. at ¶¶ 16, 39. And, to the extent Dynomite Retail has infringed upon Plaintiff's alleged trademark...
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