Domino's Pizza Pmc v. Caribbean Rhino, Inc.

• Decision Date: 13 September 2006
• Docket Number: Civil No. 05-40305.
• Citation: 453 F.Supp.2d 998
• Parties: DOMINO'S PIZZA PMC, Plaintiff, v. CARIBBEAN RHINO, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

453 F.Supp.2d 998

DOMINO'S PIZZA PMC, Plaintiff, v. CARIBBEAN RHINO, INC., et al., Defendants.

Civil No. 05-40305.

United States District Court, E.D. Michigan, Southern Division.

September 13, 2006.

Frank A. Angileri, Elizabeth F. Janda, Thomas W. Cunningham, Brooks & Kushman, Southfield, MI, for Plaintiff.

John A. Stevens, Matheson, Parr, Troy, MI, for Defendants.

ORDER

GADOLA, District Judge.

Plaintiff Domino's Pizza PMC, Inc. filed a complaint on September 30, 2005, for trademark infringement, alleging that Defendants Jeffrey Martineau, Caribbean Rhino, Inc., and Buy for Charity, LLC, used Plaintiffs trademarks to sell unauthorized "pizza cards" over the internet. Now before this Court is a motion filed on December 13, 2005 by Defendants Caribbean Rhino, Jeffrey Martineau, and Buy for Charity seeking dismissal for lack of personal jurisdiction, pursuant to Federal Rules of Civil Procedure 12(b)(2); dismissal for improper venue, pursuant to 28 U.S.C. § 1406; and, in the alternative, a transfer of venue to the Western District of Texas, Austin Division, pursuant to 28 U.S.C. § 1404. Plaintiff filed a response to Defendants' motion on March 2, 2006, and Defendants filed a reply on March 10, 2006. For the reasons stated below, this Court will deny Defendants motion.

I. FACTUAL BACKGROUND

Plaintiff Domino's Pizza PMC ("Domino's") is a Michigan corporation, located in Ann Arbor, Michigan, with its principal place of business in Michigan. Defendant Jeffrey Martineau ("Martineau") is an Alabama resident. Defendant Caribbean Rhino, a company started by Martineau, is an Alabama corporation and Defendant Buy for Charity, LLC ("Buy for Charity"), is a Texas limited liability company with its principal place of business in Austin, Texas. Defendant Martineau initially started the business related to the sale of allegedly infringing discount pizza cards, later incorporating as Caribbean Rhino, Inc. Martineau later sold the business assets of Caribbean Rhino to Defendant Buy for Charity who allegedly continued to use the name and trademark of Domino's Pizza, PMC. Plaintiff's complaint alleges trademark infringement and unfair competition pursuant to 15 U.S.C. § 1051 et seq., and specifically, 15 U.S.C. §§ 1114, 1117 and 1125(a) of the Lanham Act. The Court note's that subject matter jurisdiction is proper based upon the claims pursuant to 15 U.S.C. § 1121, 28 U.S.C. § 1331, and 28 U.S.C. § 1338(a).

Defendant Martineau initially began his business by soliciting pizza franchisees by telephone and internet websites to participate in his pizza card program. Defendant used websites that allegedly displayed the Domino's name and logo to give the impression that the program was sponsored by the Domino's corporation. Defendant then negotiated and contracted with individual Domino's franchisees, including Michigan franchisees, to redeem the pizza cards at their individual stores. Not only did Defendant use the websites to solicit franchisees willing to participate in the program, he also used the websites to advertise and sell the pizza cards to various groups seeking to conduct fund-raising activities. These cards also prominently displayed the "Domino's Pizza" name and logo. The essence of the pizza card program was that the cards were offered for sale for three dollars each. The purchasers were then instructed to sell the cards to individuals in their community for ten dollars each, creating a seven-dollar percard profit for the fund-raising group. These pizza cards entitled the bearer to redeem the cards at participating locations for the discount that had been previously negotiated with Martineau, frequently offering a buy-one-get-one-free pizza deal.

Initially Martineau began the business on his own, contacting and negotiating with the franchisees to set up a network of participating locations. As the operation grew however, Defendant incorporated as Caribbean Rhino, Inc., an Alabama corporation. After continued growth, in April of 2005, "Defendant Buy for Charity purchased the business assets of Caribbean Rhino. The sale of the pizza card business included the www.KrazyKard.com website used to market and sell the cards, the individual contracts negotiated with the franchisees, and the databases associated with the card sales. Buy for Charity continued to operate the pizza card scheme, marketing and selling the allegedly infringing cards on its website, www. buyforcharity.com, and others. In addition to selling the allegedly infringing cards, these websites allegedly displayed the Domino's name and trademark.

Defendants deny any trademark infringement and claim in their defense that they entered into written or oral contracts with approximately 800 Domino's franchisees. Those contracts, they argue, explicitly authorized Defendants to sell the pizza cards. Defendants claim that each contract with the Domino's franchisees was negotiated, drafted, and entered into from Defendants' offices in Austin, TX. Defendants further assert that all business transactions including sales, marketing and website maintenance occurred in Austin, Texas. Defendant does not clearly set forth whether, and if so, how, Alabama resident Martineau and Alabama corporation Caribbean Rhino, conducted these operations in Austin, Texas.

All Defendants now move to dismiss this action for lack of personal jurisdiction and improper venue. In the alternative, Defendants move to transfer the case to Austin, Texas "for the convenience of the parties and in the interest of justice." 28 U.S.C. 1404(a).

II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

Defendants filed one motion and brief on behalf of all defendant parties. The motion and brief consistently intermingle arguments relating to dismissal for lack of personal jurisdiction and dismissal for lack of venue, without distinction. Additionally, although the arguments set forth in Defendants' motion initially appear to be asserting claims as to all defendants, the evidentiary support provided frequently relates to only Defendant Buy for Charity. While this Court need not take up arguments insufficiently developed or ambiguously asserted by counsel, in the interests of justice the Court will address the arguments in turn with respect to all defendants, first taking up the lack of personal jurisdiction claim, later turning to the lack of venue claim, and finally to the change of venue argument.

A. Legal Standard

To establish personal jurisdiction, Plaintiff "must show that (1) the Michigan long-arm statute supports the Court's exercise of personal jurisdiction and (2) the exercise of jurisdiction would not violate the Due Process Clause of the Fourteenth Amendment." Viches v. MLT, Inc., 127 F.Supp.2d 828, 830 (E.D.Mich.2000) (Gadola, J.). The standard for evaluating these requirements depends upon whether the Court conducts an evidentiary hearing on the jurisdictional issue. In this case, because the Court has not conducted an evidentiary hearing, the Plaintiff "need only make a prima facie showing of jurisdiction." Bird v. Parsons, 289 F.3d 865, 871 (6th Cir.2002) (citation and internal quotation omitted). Under this standard, the United States Court of Appeals for the Sixth Circuit has stated that the pleadings and affidavits should be considered in the light most favorable to the Plaintiff and has characterized Plaintiffs burden of establishing jurisdiction as "relatively slight." Welsh v. Gibbs, 631 F.2d 436, 438-39 (6th Cir.1980).

A. Analysis

1. The Michigan Long-Arm Statute Supports the Court's Exercise of Personal Jurisdiction

Using this "relatively slight" threshold standard, the Court will examine the first of the two requirements for establishing personal jurisdiction: whether the Michigan long-arm statute supports the Court's exercise of personal jurisdiction. See Viches, 127 F.Supp.2d at 830. The Michigan long-arm statute permits limited personal jurisdiction over an individual or corporation, enabling the court to render personal judgments against the individual or corporation, when the cause of action arises out of the "transaction of any business within the state." Mich. Comp. Laws §§ 600.705, 600.715. This Court has previously noted that the standard of the Michigan long-arm statute is "extraordinarily easy to meet." Viches, 127 F.Supp.2d at 830 (Gadola, J.). Indeed, the phrase, "any business within the state" has been very broadly interpreted. The Sixth Circuit has held that where the defendant does even the "slightest act of business in Michigan," the first statutory criterion for personal jurisdiction under the Michigan long-arm statute is satisfied. Lanier v. Am. Bd. of Endodontics, 843 F.2d 901, 906 (6th Cir.1988).

Martineau, as the former owner of Caribbean Rhino, has conducted significant business within the state of Michigan. Martineau has admitted to personally soliciting Domino's franchisees in Michigan, to registering the www.dominosfundraising. com and www.krazykard.com websites, and to controlling the websites's content. Pl. Resp., Ex. C. at nos. 3-14. These websites were used to sell allegedly infringing cards to Michigan residents that were intended to be redeemed at participating Michigan Domino's franchise locations. Considering Martineau's activities with respect to the interactive websites alone, the Court of Appeals for the Sixth Circuit has recognized that the operation of a website that allows residents of a state to purchase goods online, constitutes transacting business within the state for purposes of personal jurisdiction. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 890 (6th Cir.2002) (A defendant purposefully avails itself of the privilege of acting in a state through its website if the website is interactive to a degree that reveals specifically intended interaction with residents of the state.). As such, when Martineau created, controlled, and maintained the various interactive websites, used to solicit franchises to...