Land-O-Nod Co. v. BASSETT FURNITURE INDUSTRIES, Civ. 4-82-536.
| Decision Date | 22 October 1982 |
| Docket Number | No. Civ. 4-82-536.,Civ. 4-82-536. |
| Citation | 551 F. Supp. 63 |
| Parties | The LAND-O-NOD COMPANY, Plaintiff, v. BASSETT FURNITURE INDUSTRIES, INC. and The E.B. Malone Corporation, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Allen I. Saeks, Minneapolis, Minn., for plaintiff.
Douglas J. Williams, Minneapolis, Minn., David B. Lytle, Washington, D.C., for defendants.
This matter comes before the Court on the motion of defendant E.B. Malone Company to dismiss plaintiff's complaint, which alleges trademark infringement on the part of both defendants. Jurisdiction vests in this Court under 28 U.S.C. § 1332 and 28 U.S.C. § 1338. Defendant Malone's motion to dismiss is based on three grounds:
Plaintiff initially instituted this action solely against defendant Bassett Furniture Industries, Inc. (hereinafter Bassett). Bassett brought a motion for summary judgment claiming that, because it did not manufacture, market, etc. any mattresses or box springs, or any labels for such articles, it was not properly a defendant in the action. Plaintiff, in response to Bassett's contention that all mattresses, etc. bearing the Bassett name were actually produced by The E.B. Malone Company, (hereinafter Malone), amended its complaint to include Malone as a defendant. Malone has responded with a motion to dismiss on the grounds set forth above.
The Land-O-Nod Company, plaintiff herein, is a Minnesota corporation engaged in the manufacture, sale and distribution of mattresses, box springs and related products. In 1964, Land-O-Nod began using the trademark "Chiropractic" to distinguish its products from those of its competitors. In August 1965, registration for this trademark was duly issued to Land-O-Nod by the United States Patent and Trademark Office. In October 1975, plaintiff's right to use "Chiropractic" as its trademark became incontestable as a result of plaintiff having filed an Affidavit of Continuous Use pursuant to 15 U.S.C. § 1065(3).
Defendant Bassett Furniture is a Virginia corporation. Defendant Malone is a Florida corporation and is a wholly-owned subsidiary of Bassett. Bassett, through Malone, is in the business of manufacturing, marketing and selling mattresses and related products under the Bassett name. Malone produces all mattresses and related bedding products bearing the Bassett name.
Plaintiff claims that in or around November 1981, defendants Bassett and Malone began infringing plaintiff's "Chiropractic" trademark by utilizing a reproduction of said trademark to designate their own product, with such use being alleged by plaintiff to cause confusion on the part of consumers. The word "Chiropractic" has been and is being used by defendants in advertisements of their product, as well as on the identification labels which are affixed to the products themselves.
Defendant Malone's products are distributed nationally. They are sold, for example, under the Bassett name, through the Levitz Furniture chain which has stores throughout the United States, with two stores in Minnesota. Although defendant Malone is not licensed to do business in Minnesota, does not maintain any facilities or bank accounts in this state, and has no employees headquartered here, Malone has been selling bedding products in Minnesota since at least 1972 and Malone sales representatives do call on retailers in Minnesota regarding sales of these mattresses and other bedding products. Malone's reported annual sales in Minnesota in 1981 were in the amount of $151,871.00. For the first six months of 1982, the sales were $42,637.00. Malone claims that it has not sold the actual allegedly infringing product in Minnesota, and that it has not advertised that product in Minnesota. However, the February 1982 issue of "bedding Magazine," a national trade journal which comes into Minnesota, carried an article about the allegedly infringing product. The information for the article was supplied by the Bassett Sales Manager at a trade show in Dallas in January, 1982. At that show, defendant Bassett displayed the allegedly infringing products which had been constructed by defendant Malone. This show was a national marketing trade display aimed at drawing bedding representatives from around the country in order to promote bedding products. Defendant Bassett obviously participated to promote its own products. The Bassett representative contracted, at that trade show, with a dealer from Windom, Minnesota, to supply that dealer with 2 units of the allegedly infringing product. The Minnesota dealer was also supplied with advertising material for that same product.
Defendant Malone argues that this Court has no personal jurisdiction here because the defendant's relationship between the forum and the litigation is only minimal. See Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977). Malone further claims that it has not been properly served with process in this action because the fact that the alleged tort was not committed in whole or in part in Minnesota renders service under Minn.Stat. § 303.13, subd. 1(3) ineffective. Lastly, Malone claims that venue in the District of Minnesota is improper under 28 U.S.C. § 1391(b) because Malone is not "doing business" in Minnesota within the meaning of that statute and because plaintiff's cause of action does not arise here.
In view of defendant Malone's contentions, as set forth above, there are three issues to be decided here: (1) Does the Court have personal jurisdiction over defendant Malone; (2) Was service of process on defendant proper; (3) Is venue proper under 28 U.S.C. § 1391.
First, the question of personal jurisdiction will be addressed in conjunction with the question of service. Plaintiff effected service of process upon Malone, a Florida corporation, pursuant to Minn.Stat. § 303.13, subd. 1(3), by substitute service upon the Minnesota Secretary of State on June 11, 1982. Additionally, personal service was effected upon defendant Malone in Florida by the Sheriff of Polk County, Florida, pursuant to Minn.Stat. § 543.19 on June 14, 1982. Minn.Stat. § 303.13, subd. 1(3), which provides for service of process on a foreign corporation, states, in pertinent part:
If a foreign corporation makes a contract with a resident of Minnesota to be performed in whole or in part by either party in Minnesota, or if such foreign corporation commits a tort in whole or in part in Minnesota against a resident of Minnesota, such acts shall be deemed to be doing business in Minnesota by the foreign corporation and shall be deemed equivalent to the appointment by the foreign corporation of the secretary of state of Minnesota and his successors to be its true and lawful attorney upon whom may be served all lawful process in any actions or proceedings against the foreign corporation arising from or growing out of such contract or tort. (Emphasis supplied.)
In serving process under this statutory provision, plaintiff was relying on the fact that a contract was made between defendant Bassett and a Minnesota resident, a Windom, Minnesota, bedding dealer at a bedding trade show in Dallas. Because the bedding units which were the subject of the contract were to have been delivered in Minnesota to that dealer, a Minnesota resident, the contract would have been completed in Minnesota. Defendant claims that the contract was never actually performed, that is, that the bedding units were never actually delivered pursuant to the terms set forth in the contract. According to the affidavit of the Windom dealer, which was submitted by plaintiff as an exhibit, the dealer received no explanation as to why said order has not been forthcoming. Inasmuch as the language of the statute says "to be performed in whole or in part by either party in Minnesota," it is irrelevant that the contract has not yet been fully executed. The significant factor is that, by the express terms of the contract, both parties must have understood that it was to have been completed upon the delivery of the mattresses, etc., and the tender of payment for such (the contract having been C.O.D.), with both acts having been intended to take place in Minnesota. Under 15 U.S.C. § 1114, liability for trademark infringement will be assessed against any person who, without the consent of the registrant, shall:
(1)(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive. (Emphasis supplied)
Here, where an article which dealt with details of the alleged infringing product was published in a national trade journal sold in Minnesota and where marketing materials were sent into the state with a Minnesota resident for use in his business, plaintiff has a compelling argument for claiming that the infringement took place, at least in part, in Minnesota.
As indicated above, plaintiff Land-O-Nod relied on the Minnesota long-arm statute for service of process. An examination of the bounds which Minnesota has placed around the reach of its long-arm statutes is appropriate at this time. The posture of the Minnesota Supreme Court has been clearly set forth in a number of opinions on this issue. For example, in Beck v. Spindler, 256 Minn. 543, 549-56, 99 N.W.2d 670, 675-79 (1959), a contract case, the Court said that it seemed only fair to permit one who has suffered a wrong at the hands of a resident of a foreign state to sue in his own state. There the Court noted a...
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Land-O-Nod Co. v. Bassett Furniture Industries, Inc.
...Malone's contacts with Minnesota were sufficient to satisfy constitutional due process concerns. Land-O-Nod Co. v. Bassett Furniture Industries, Inc., et al., 551 F.Supp. 63, 73 (D.Minn.1982). Subsequently the district court preliminarily enjoined both Bassett and Malone from using Land-O-N......