Link Snacks Inc. v. Jack & Friends LLC

• Decision Date: 23 May 2023
• Docket Number: 22-cv-290-wmc
• Parties: LINK SNACKS, INC., d/b/a Jack Link's, Plaintiff, v. JACK & FRIENDS LLC, Defendant.
• Court: U.S. District Court — Eastern District of New York

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LINK SNACKS, INC., d/b/a Jack Link's, Plaintiff, v. JACK & FRIENDS LLC, Defendant.

No. 22-cv-290-wmc

United States District Court, E.D. New York

May 23, 2023

OPINION AND ORDER

WILLIAMM.CONLEY, DISTRICT JUDGE

Plaintiff Link Snacks, Inc., d/b/a “Jack Link's” filed a trademark infringement and deceptive trade practices lawsuit against defendant Jack & Friends, LLC. Jack &amp Friends subsequently moved to dismiss for lack of personal jurisdiction or, in the alternative, to transfer the case to the Eastern District of New York. (Dkt. #8). Because this court lacks personal jurisdiction over Jack & Friends and the locus of the dispute is where competing sales are alleging occurring in New England, the court will transfer this case to the Eastern District of New York.

JURISDICTIONAL FACTS^[1]

Jack & Friends is a vegan jerky company organized in Delaware and headquartered in New York. Because neither Jack Link's nor its subsidiary sold vegan products, Jack &amp Friends approached a subsidiary of plaintiff Jack Link's, a worldwide meat and some nonmeat jerky producer, headquartered in Wisconsin in January 2022 to discuss a potential contract for the manufacture and sale of a vegan version of its product. However, Jack Link's not only rejected the business proposal to make a jackfruit-based snack, but upon receiving the pitch, became concerned about customer confusion between the companies' products and names. As a result, counsel for Jack Link's notified Jack & Friends it should consider rebranding its goods, a suggestion that Jack & Friends in turn rejected.

At that point, Jack Link's attempted to discover Jack & Friends' market reach in Wisconsin. Specifically, in May 2022, it ordered Jack & Friends' teriyaki jerky product online to be shipped to an address in Fort Atkinson, Wisconsin. After determining the vegan company's merchandise could be delivered to Wisconsin, Jack Link's filed this lawsuit. In response, Jack & Friends moved to dismiss for lack of personal jurisdiction, or in the alternative, to transfer venue to the Eastern District of New York.

All of Jack & Friends products are developed and produced in Eastern New York, and all four of Jack & Friends' retail locations are in New York and Massachusetts. Moreover, although its website ships nationwide, including to Wisconsin, the bulk of its sales are in the New England area. Finally, Jack & Friends has never specifically targeted the Wisconsin market, and has only shipped products to sixteen Wisconsin-based customers, including Jack Link's. Thus, in total, less than 0.9% of Jack & Friends' overall sales have occurred in the Badger State, amounting to $465.52 of its overall $53,000 worth of product sales.

OPINION

Defendant Jack & Friends moves to dismiss the complaint for a lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2), or alternatively, to transfer venue under 28 U.S.C. § 1404(a). The court addresses these alternate motions below.

A. Personal Jurisdiction

A federal court can exercise personal jurisdiction over a nonresident defendant when the person or corporation would be amenable to suit under the laws of the state in which the federal court sits, subject to the constitutional due process restraints of the minimum contacts test. KM Enterprises Inc. v. Global Traffic Technologies, Inc., 725 F.3d 718, 723 (7th Cir. 2013). Here, plaintiff does not contend that this Wisconsin-based court could exercise general jurisdiction over defendant, so the court discusses only the parties' arguments for and against its exercise of specific jurisdiction.

This court may exercise specific jurisdiction under Wisconsin's long-arm statute, Wis.Stat. § 801.05, over a defendant for “any act or omission outside of the state that results in an injury” within Wisconsin, “provided in addition that at the time of the injury, either”:

(a) Solicitation or service activities were carried on within the state by or on behalf of the defendant; or

(b) Products, materials or other things processed, serviced or manufactured by the defendant were used or consumed within this state in the ordinary course of trade.

Wis. Stat. § 801.05(4)(a)-(b). Here, Jack Link's contends that its injury occurred in Wisconsin, where it is headquartered, and that Jack & Friends carried out solicitation and service activities in Wisconsin by selling and shipping vegan jerky products to customers who consumed the products in Wisconsin. Jack & Friends does not develop any argument regarding the applicable language in Wisconsin's long-arm statute specifically, but instead focuses on constitutional due process limits to its application. Thus, the court will presume without deciding that Jack & Friends' activities within the state would satisfy § 801.05(4)(a) or (b).

With respect to the limits of due process, Wisconsin's long-arm statute is to be generously interpreted in “favor of the exercise of personal jurisdiction.” Solomon v. John Cabot Univ., No. 17-CV-621-jdp, 2018 WL 2452775, at *2 (W.D. Wis. May 31, 2018) (citing Rasmussen v. Gen. Motors Corp., 2011 WI 52, ¶ 16-17, 335 Wis.2d 1, 13, 803 N.W.2d 623, 629). Thus, so long as jurisdiction over both plaintiff and defendant satisfies constitutional due process under the minimum contacts test, each party is presumed to fall within Wisconsin's long-arm statute. Menard, Inc. v. Textron Aviation, Inc., No. 18-cv-844-wmc, 2019 WL 11637219, at *5 (W.D. Wis. Oct. 24, 2019) (citing Felland v. Clifton, 682 F.3d 665, 678 (7th Cir. 2012)).

The Seventh Circuit has condensed the due process requirements for specific jurisdiction to a three-part test: (1) the defendant must have sufficient minimum contacts with the forum; (2) the alleged injury must have arisen from the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with traditional notions of fair play and substantial justice. Lexington Ins. Co. v. Zurich Ins. (Taiwan) Ltd., 286 F.Supp.3d 982, 987 (W.D. Wis. 2017), aff'd sub nom. Lexington Ins. Co. v. Hotai Ins. Co., Ltd., 938 F.3d 874 (7th Cir. 2019) (citing Felland, 682 F.3d at 673). Here, personal jurisdiction is improper based on the first and third factors.

With respect to minimum contacts, Jack Link's argues that despite Jack & Friends not having a physical presence in the state, its online commercial activity is sufficient to establish the required minimum contacts for purposes of personal jurisdiction. However, to establish sufficient minimum contacts when there is no physical presence in the forum, a defendant must purposefully exploit a market, rather than simply offer sales on a website accessible to markets generally. Compare Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796, 802-03 (7th Cir. 2014) (no personal jurisdiction based on interactive website and small number of sales), with uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 427 (7th Cir. 2010) (“[Defendant] has thoroughly, deliberately, and successfully exploited the Illinois market.. ..This is a company that.has conducted extensive national advertising and made significant national sales.”)

For example, in Advanced Tactical, plaintiff was headquartered in Indiana and sued a California-based competitor, Real Action Paintball, in the Northern District of Indiana for trademark infringement and unfair competition relating to “pepperball projectiles” that both companies sold. Id. Plaintiff Advanced Tactical argued that the Indiana court could exercise personal jurisdiction because Real Action's website allowed its products to be sold in Indiana, and it had fulfilled several sales to Indiana customers before the suit was filed, though not necessarily of the allegedly infringing products. Id. at 801.

The Seventh Circuit disagreed, holding that even if Advanced Tactical had “link[ed] the few sales [in Indiana] to Real Action's litigation-specific activity[,] . it is unlikely that those few sales alone, without some evidence linking them to the allegedly tortious activity, would make jurisdiction proper.” Id. “To hold otherwise would mean that a plaintiff could bring suit in literally any state where the defendant shipped at least one item[,]” which would create “de facto universal jurisdiction” and “run[] counter to the approach the Court has followed since International Shoe.” Id. The Seventh Circuit further explained that “simply operating an interactive...