Floyd's 99 Holdings, LLC v. Jude's Barbershop, Inc.

• Decision Date: 28 September 2012
• Docket Number: Civil Action No. 11–cv–02688–CMA–BNB.
• Citation: 898 F.Supp.2d 1202
• Parties: FLOYD'S 99 HOLDINGS, LLC, Plaintiff, v. JUDE'S BARBERSHOP, INC., et al., Defendants.
• Court: U.S. District Court — District of Colorado

898 F.Supp.2d 1202

FLOYD'S 99 HOLDINGS, LLC, Plaintiff,

v.JUDE'S BARBERSHOP, INC., et al., Defendants.

Civil Action No. 11–cv–02688–CMA–BNB.

United States District Court, D. Colorado.

Sept. 28, 2012.

Brittany A. Carver, Jeffrey J. Cowman, Ballard Spahr, LLP, Denver, CO, for Plaintiff.

James A. Jablonski, Law Office of James A. Jablonski, Denver, CO, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE

CHRISTINE M. ARGUELLO, District Judge.

In this trademark infringement dispute, Plaintiff Floyd's 99 Holdings, LLC (“Plaintiff” or “Floyd's”) brings claims under the Lanham Act, 15 U.S.C. § 1125, and the Trademark Act of 1946, 15 U.S.C. § 1114, as well as common law claims of unfair competition and trademark infringement. (Doc. # 1 at 6–7.) The matter currently before the Court is Defendants' Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue. (Doc. # 24.)

I. BACKGROUND

A. INTRODUCTION

Floyd's is a limited liability company and owner and franchisor of barbershops, with its principal place of business in Colorado. (Doc. # 1, ¶¶ 1, 5.) It utilizes federally registered trademarks, including a trademark of its unique interior design—also known as its “trade dress” ¹ (“Trade Dress”). (Doc. # 28, ¶¶ 1, 3, 5; Doc. # 1–1.) Plaintiff's trademark for its Trade Dress was filed on October 28, 2005, and the United States Patent and Trademark Office issued the registration of the Trade Dress on July 15, 2008. (Doc. # 28, ¶ 5; Doc. # 1–1 at 2.) Sometime in 2005, Defendant Thomas Martin traveled to Colorado and entered one of Plaintiff's barbershops.² (Doc. # 28, ¶¶ 6–7.) Martin was photographed sitting in a barbershop chair, and the photograph (“the Photograph”) also captured some aspects of Plaintiff's Trade Dress. ( Id.; Doc. # 1–2.) Thereafter, Martin returned to Michigan where, over time, Defendants opened at least 23 “Jude's Barbershops.” (Doc. # 28, ¶ 8.) Additionally, Defendants used the Photograph in one of their advertisements.³ (Doc. # 1–2.)

On September 29, 2005, Plaintiff sent a written demand that Defendants cease and desist their allegedly wrongful use of Plaintiff's Trade Dress and informed Defendants of Plaintiff's intent to expand nationwide. (Id., ¶ 13.) On August 3, 2006, Plaintiff notified Defendants of its intent to enter the Michigan market specifically, and on October 2, 2011, Plaintiff entered into a franchise agreement, under which a franchisor would be able to eventually operate a Floyd's barbershop in Michigan. ( Id., ¶¶ 14–15.)

B. ADDITIONAL JURISDICTIONAL FACTS

Defendant Martin is a resident of the state of Michigan, and the Defendant limited liability companies and corporations are registered or incorporated in, and have their principal place of business in, Michigan. (Doc. # 1, ¶¶ 6–19.) Defendants have never provided any services, sold any products, nor conducted any business in the state of Colorado.⁴ (Doc. # 24 at 6; Doc. # 24–1, ¶¶ 6–9.) However, Plaintiff alleges that two somewhat related contacts with the state of Colorado suffice to confer personal jurisdiction over Defendants in this case: (1) the Defendants' injury and damage to Plaintiff in Colorado, resulting from Defendants' purported infringement of Plaintiff's Trade Dress in the interior design of Defendants' barbershops; and (2) Martin's taking, and subsequent use, of the Photograph of Plaintiff's Trade Dress. (Doc. # 28 at 10.)

II. ANALYSIS

A. STANDARD OF REVIEW: RULE 12(b)(2) MOTION TO DISMISS

Plaintiff bears the burden of establishing the Court's personal jurisdiction over Defendants. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir.2008) (citation omitted). Because this case is in the preliminary stages of litigation, that burden is less stringent that it otherwise would be. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir.1995). Where, as here, a district court considers a pre-trial motion to dismiss for lack of personal jurisdiction, the plaintiff need only make a prima facie showing of personal jurisdiction. AST Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1056–57 (10th Cir.2008). The plaintiff may make such a showing by demonstrating, via affidavits or other written materials, facts that if true would support jurisdiction over the defendant. Id.

In resolving this motion, the Court accepts as true all well-pled facts—i.e., facts that are neither conclusory nor speculative—alleged in Plaintiff's complaint. Dudnikov, 514 F.3d at 1070. Additionally, Plaintiff has “the duty to support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleading.” Pytlik v. Prof'l Res., Ltd., 887 F.2d 1371, 1376 (10th Cir.1989). The parties have each submitted supporting affidavits. If the parties' affidavitsconflict, the conflicts “must be resolved in the plaintiff's favor, and the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party.” Wenz, 55 F.3d at 1505 (internal quotation marks and citation omitted).

B. WHETHER THE COURT HAS JURISDICTION OVER DEFENDANTS1. Legal Standard: Threshold “Minimum Contacts” Analysis

Colorado's long-arm statute confers jurisdiction, in relevant part, over “any cause of action arising from ... [t]he commission of a tortious act within this state.” Colo.Rev.Stat. § 13–1–124(1)(b). Additionally, “tortious conduct in a foreign state which causes injury in Colorado may be deemed to be an act committed in Colorado so as to satisfy the long-arm statute.” D & D Fuller CATV Const., Inc. v. Pace, 780 P.2d 520, 524 (Colo.1989). To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show (1) that jurisdiction is legitimate under the laws of the forum state, and (2) that the exercise of jurisdiction does not offend the Due Process Clause. Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir.1999) (citation omitted). In Colorado, this two-pronged inquiry essentially collapses into one inquiry, because “Colorado's long arm statute is coextensive with constitutional limitations imposed by the due process clause.” Grynberg v. Ivanhoe Energy, Inc., 666 F.Supp.2d 1218, 1229 (D.Colo.2009) (internal quotation marks and citation omitted). Thus, “ ‘if jurisdiction is consistent with the due process clause, Colorado's long arm statute authorizes jurisdiction over a nonresident defendant.’ ” Id. (quoting Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir.2004)); see also Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1193 (Colo.2005) (same). Therefore, the Court asks whether the exercise of personal jurisdiction over Defendants comports with due process.

This is a two-step inquiry. First, the Court examines “whether the non-resident defendant has ‘minimum contacts' with the forum state.” Melea, Ltd. v. Jawer SA, 511 F.3d 1060, 1065 (10th Cir.2007) (quoting TH Agriculture & Nutrition, LLC v. Ace European Grp. Ltd., 488 F.3d 1282, 1287 (10th Cir.2007)). Second, the Court considers “whether the court's exercise of jurisdiction over the defendant offends ‘traditional notions of fair play and substantial justice,’ that is, whether the exercise of jurisdiction is ‘reasonable’ under the circumstances.” Id.⁵

To have sufficient minimum contacts for “specific” personal jurisdiction,⁶ the out-of-state defendant must have (i) purposefully directed activities at forum residents, and (ii) the litigation must result from alleged injuries that arise out of those forum-related activities. Dudnikov, 514 F.3d at 1071 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)); see also Found. for Knowledge in Dev. v. Interactive Design, 234 P.3d 673, 678 (Colo.2010). The touchstone of the minimum contacts analysis is “whether ‘the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.’ ” Olsen v. Mapes, 139 Fed.Appx. 54, 57 (10th Cir.2005) (unpublished) (quoting World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). The aim of the “ ‘purposeful direction’ doctrine has been said by the Supreme Court to [be to] ensure that an out-of-state defendant is not bound to appear to account for merely ‘random, fortuitous, or attenuated contacts' with the forum state.” Dudnikov, 514 F.3d at 1071 ( quotingBurger King, 471 U.S. at 475, 105 S.Ct. 2174). Additionally, “the question of whether a non-resident defendant has the requisite minimum contacts with the forum state to establish in personam jurisdiction must be decided on the particular facts of each case.” Benton v. Cameco Corp., 375 F.3d 1070, 1076 (10th Cir.2004).

In Calder v. Jones, 465 U.S. 783, 789–90, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), the Supreme Court articulated what is now known as the “Calder effects test.” The Court held that, where a defendant intentionally engages in tortious actions outside the forum state, and her actions are expressly directed at causing a harmful effect within that state, a sufficient nexus exists between the defendant and the state so as to satisfy due process and constitute “purposeful direction” under the “minimum contacts” analysis. Id.; see also D & D Fuller, 780 P.2d at 524 (describing and applying the Calder test). The Tenth Circuit has refined the Calder test to three elements, explaining that a defendant has “purposefully directed” its activities at Colorado or its residents when the defendant has (1) taken intentional tortious action, (2) that was expressly aimed at Colorado, (3) with the knowledge that the brunt of the injury from the action would be felt in Colorado. Dudnikov, 514 F.3d at 1071;see also Impact Prods., 341 F.Supp.2d at 1190 (same). Further, the Tenth Circuit has taken a relatively “restrictive” approach when...