DeSantis v. Hafner Creations, Inc.

• Citation: 949 F.Supp. 419
• Decision Date: 30 December 1996
• Docket Number: Civil Action No. 96-804-A.
• Parties: Eugene DeSANTIS, Plaintiff, v. HAFNER CREATIONS, INC., Defendant.
• Court: U.S. District Court — Eastern District of Virginia

949 F.Supp. 419

Eugene DeSANTIS, Plaintiff, v. HAFNER CREATIONS, INC., Defendant.

Civil Action No. 96-804-A.

United States District Court, E.D. Virginia, Alexandria Division.

December 30, 1996.

COPYRIGHT MATERIAL OMITTED

Robert A. Vanderhye, Nixon & Vanderhye, P.C., Arlington, VA, for Plaintiff.

A. Hugo Blankingship, III, Law Offices of A. Hugo Blankingship, III, Alexandria, Virginia, for Defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

The question presented in this patent infringement suit is whether the Virginia "long-arm" statute, Virginia Code § 8.01-328.1 et seq., reaches an alleged patent infringer whose only contacts with Virginia were: (i) to advertise the allegedly infringing product in a nationally-distributed publication; (ii) to sell one of the allegedly infringing products, F.O.B. Florida, to an employee of plaintiff's Virginia law firm; and (iii) to sell two non-infringing, unrelated products to Virginia purchasers F.O.B. Florida.

I

Plaintiff, Eugene DeSantis, d/b/a Desantis Holster & Leather Goods (DeSantis), has invented and patented, and now manufactures and sells, a special type of carrying-bag for firearms. This bag, which resembles a conventional "waist or fanny pack,"¹ contains a holster that enables the wearer to conceal a hand gun in a readily accessible location. Persons authorized to carry concealed weapons, such as police officers and security guards, typically use these "quick draw" fanny packs in undercover or covert situations. The patent covering this invention issued to DeSantis on December 5, 1992 as United States Patent No. 5,170,919 (the '919 patent).

Defendant, Hafner Creations, Inc. ("Hafner"), a Florida corporation, manufactures a variety of padded gun bags and other shooting accessories. Hafner operates from a single office in Lake City, Florida and conducts the majority of its business by mail or telephone. Hafner processes all orders and payments in Florida and ships to its customers F.O.B. Florida. Like DeSantis, Hafner produces and sells a "quick draw" waist pack that completely conceals a hand gun in a readily accessible location. On two or three occasions, from September 1995 through October 1995, Hafner advertised the allegedly infringing product in "Shotgun News," a nationally-circulated publication with approximately 3,300 individual subscribers in Virginia. In Northern Virginia, Shotgun News is on sale at numerous Tower Records stores. The Shotgun News advertisement features a picture of Hafner's waist pack holster, lists Hafner's telephone and fax numbers, offers free catalogues,² notes that Hafner accepts "all major credit cards," and quotes prices for three sizes of the waist pack holster.

From time to time, Hafner has received telephone inquiries at its Florida office from Virginia residents and has sold various of its products to those desiring to purchase them. Within the past twelve months, Hafner has sold and delivered three products to customers in Virginia, only one of which involved the allegedly infringing waist pack holster. Significantly, the lone sale of the Hafner "quick draw" waist pack was initiated by Michael Crawford, a paralegal at the law firm representing DeSantis in this case. Specifically, Crawford telephoned Hafner on May 29, 1996 and ordered the small waist pack holster as advertised in Shotgun News. Several days later, Crawford received the product and an invoice for $52.95. The three sales to Virginia residents generated for Hafner a total revenue of $330.80.

Apart from these three sales, Hafner contends that it has had no other contact with Virginia or residents of Virginia. Specifically, Hafner claims that it does not now and never has: 1) maintained an agent, salesperson, or marketing representative in Virginia; 2) operated a corporate office in Virginia; 3) owned or leased any property in Virginia; 4) maintained a bank account in Virginia; 5) held a telephone listing in Virginia; 6) advertised in Virginia newspapers; 7) executed any contract in Virginia; or 8) contracted with any person to distribute Hafner products in Virginia.

In June 1996, DeSantis filed a complaint alleging Hafner's infringement of the '919 patent. Hafner responded by presenting a motion to dismiss for lack of personal jurisdiction, which after some dispute, was deemed timely filed.³ The matter was then argued orally, with the Court taking Hafner's motion under advisement and permitting the parties to file supplemental memoranda. Desantis v. Hafner Creations, Inc., 949 F.Supp. 419 (1996). The parties did so and the issue is now ripe for disposition.

II

Hafner contends that its contacts with the Commonwealth of Virginia — the advertising of the allegedly infringing product in a national publication, the sale of one of the products to a Virginia agent of plaintiff, and the sale of two non-infringing, unconnected products to uninterested Virginians — are insufficient to comport either with Virginia's long-arm statute, Virginia Code § 8.01-328.1, or the Constitution's due process requirements.⁴ Desantis counters that Hafner's contacts with Virginia authorize personal jurisdiction.

It is well-established that a federal court may exercise personal jurisdiction over a non-resident defendant only if: (i) the applicable state long-arm statute confers jurisdiction; and (ii) the assertion of that jurisdiction is consistent with constitutional due process.⁵ Thus, personal jurisdiction analysis calls for a two step inquiry. The first step is to determine whether Virginia's long-arm statute reaches the non-resident defendant given the cause of action alleged and the nature of the defendant's Virginia contacts.⁶ The second step requires determining whether the exercise of personal jurisdiction in the circumstances is consistent with due process, that is, whether the long-arm statute's reach in the situation exceeds its constitutional grasp.⁷

Several subsidiary principles guide courts in this two step process. With respect to the first step, it is well-settled that the provisions of § 8.01-328.1 extend personal jurisdiction to the outermost boundaries of due process.⁸ But it is equally well-settled that Virginia's long-arm statute must be satisfied "even in those situations where it could plausibly be argued that a lesser standard would meet due process." Robinson v. Egnor, 699 F.Supp. 1207, 1211 (E.D.Va.1988) (quoting Willis v. Semmes, Bowen & Semmes, 441 F.Supp. 1235, 1243 (E.D.Va.1977)); see also, Blue Ridge Bank v. Veribanc, 755 F.2d 371, 371 (4th Cir.1985). In other words, it is possible that a non-resident defendant's contacts with Virginia could fulfill the dictates of due process, yet escape the literal grasp of Virginia's long-arm statute. Put another way, Virginia's long-arm statute provides a ceiling of procedural protections above the federal floor of constitutional due process.⁹

With respect to the second, constitutional step, "`[t]he constitutional touchstone' of the determination whether an exercise of personal jurisdiction comports with due process `remains whether the defendant purposefully established `minimum contacts' in the forum state,'" Asahi Metal Indus. v. Superior Court of Cal., 480 U.S. 102, 108-09, 107 S.Ct. 1026, 1030, 94 L.Ed.2d 92 (1987) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)), "such 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. at 158 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342-43, 85 L.Ed. 278 (1940)).¹⁰

This two step jurisdictional analysis, applied here, compels the conclusion that the requirements of the Virginia long-arm statute for personal jurisdiction are not met. Put another way, the statute's literal grasp simply does not reach Hafner in the circumstances at bar. Although DeSantis never directly specified which provision of Virginia's long-arm statute applies in this action, only three of the statute's subsections would seem to have any applicability here: § 8.01-328.1(A)(1), § 8.01.328.1(A)(3), and § 8.01-328.1(A)(4). An examination of these provisions discloses that none fits here.

Under § 8.01-328.1(A)(1), the exercise of personal jurisdiction is proper only if the asserted cause of action stems from a non-resident defendant's "[t]ransacting any business in this Commonwealth." Chedid v. Boardwalk Regency Corp., 756 F.Supp. 941, 943-44 (E.D.Va.1991). Although a single act by the non-resident defendant may qualify as "transacting business,"¹¹ the single act must be significant in order to confer jurisdiction.¹²

Given these governing principles, this record does not support a holding that Hafner has transacted business in Virginia. Over the past twelve months, Hafner sold and shipped, FOB Florida, only one allegedly infringing waist pack holster to a Virginia resident. And that Virginia resident was Michael Crawford, a paralegal for DeSantis' counsel, who engaged in the transaction solely to establish personal jurisdiction. Yet, this lone transaction cannot be the basis for personal jurisdiction over Hafner.¹³ To hold otherwise would grant plaintiffs the power to manufacture personal jurisdiction in a forum that presents hardship and inconvenience to defendants. Nothing in the language or purpose of the Virginia long-arm statute authorizes this species of forum shopping, which seems as inequitable as it is illegitimate.¹⁴ Moreover, to hold otherwise would impermissibly dilute the notion that a single act must be significant in order to confer jurisdiction.

Reported cases of manufactured personal jurisdiction are uncommon. The few that exist generally prohibit plaintiffs from manufacturing personal jurisdiction over defendants by initiating a business transaction. See, e.g., Martin v. First Interstate Bank of Cal., 914 F.Supp. 473, 477 (D.N.M.1995) (holding that defendant's issuance of letters of credit to...