Minibooster Hydraulics v. Scanwill Fluid Power

• Decision Date: 20 March 2004
• Docket Number: No. 02-CV-0892C(SC).,02-CV-0892C(SC).
• Citation: 315 F.Supp.2d 286
• Parties: MINIBOOSTER HYDRAULICS A/S, f/ka Iversen Hydraulics ApS, a Danish corporation, Plaintiff, v. SCANWILL FLUID POWER ApS, f/k/a Iversen Fluid Power ApS, a Danish corporation, et al., Defendants.
• Court: U.S. District Court — Western District of New York

315 F.Supp.2d 286

MINIBOOSTER HYDRAULICS A/S, f/ka Iversen Hydraulics ApS, a Danish corporation, Plaintiff, v. SCANWILL FLUID POWER ApS, f/k/a Iversen Fluid Power ApS, a Danish corporation, et al., Defendants.

No. 02-CV-0892C(SC).

United States District Court, W.D. New York.

March 20, 2004.

COPYRIGHT MATERIAL OMITTED

Holland & Knight LLP (Tamara F. Carmichael, Esq. and James v. Marks, Esq.,of Counsel), New York, New York, for Plaintiffs.

Hodgson Russ LLP (Daniel C. Oliverio, Esq., and Kathleen M. Sellers, of Counsel), Buffalo, New York, for Defendants Scanwill and Iversen.

Phillips, Lytle, Hitchcock, Blaine & Huber LLP (Jeremiah J. McCarthy, Esq., of Counsel), Buffalo, New York, for Defendants Sherex, Scherf and Johnson.

CURTIN, District Judge.

INTRODUCTION

On April 11, 2003, defendants Scanwill Fluid Power and Jesper Iversen filed a motion to dismiss pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure based on the doctrine of forum non conveniens. Item 6. Plaintiff Minibooster Hydraulics is a Danish corporation, as is defendant Scanwill Fluid Power, and defendant Jesper Iversen is a Danish resident. He is a principal of Scanwill (formerly Iversen Fluid Power), and was a former principal of Minibooster (formerly Iversen Hydraulics). Defendant Sherex is a New York corporation, and defendants Scherf and Johnson are principals in that business.¹

In their motion, defendants argue that this litigation is duplicative of a lawsuit that is pending in Denmark and has been initiated solely to harass the defendants. They seek an order dismissing the claims against them or, in the alternative, a stay pending the resolution of the Danish litigation. Finally, they seek a dismissal of the case as against Mr. Iversen for lack of personal jurisdiction.

Plaintiff filed an opposition to the motion on June 20, 2003. Items 15, 16. Defendants then filed a reply on July 25, 2003. Items 18, 19. On August 8, 2003, plaintiff filed a motion for leave to file a sur-reply. Items 21, 22. Oral argument was heard on October 1, 2003. Permission to file a sur-reply was granted on December 18, 2003, and the sur-reply was filed on January 6, 2004. Item 30. For the reasons that follow, the defendants' motion to dismiss is denied.

BACKGROUND and FACTS

Plaintiff commenced this action on December 11, 2002 (Item 1) alleging eight causes of action. Against all defendants, it asserts violations of the Lanham Act, 15 U.S.C. § 1125, for unfair competition and trade dress infringement (Counts I and II), claims of unfair competition under both the common law and New York law (Counts III and IV), unjust enrichment (Count V), and common law trademark infringement (Count VI). Plaintiff also seeks an accounting of profits derived from the allegedly wrongful use of plaintiff's trademark and intellectual property (Count VII), and alleges a breach of distributorship agreement as against defendant Sherex alone (Count VIII). Plaintiff seeks preliminary and permanent injunctive relief, treble damages, costs, and attorney fees.

Plaintiff is the manufacturer of hydraulic pressure boosters, and sells them worldwide through authorized distributorships. Plaintiff changed its name from Iversen Hydraulics to Minibooster Hydraulics in October 2000, but alleges that it continues to do business and be known as Iversen. Item 1, ¶ 2.

Between 1996 and 1999, Sherex was the exclusive distributor for plaintiff's products in the United States, Canada, and Mexico. The distributorship agreement provided that, upon its termination, Sherex was precluded from selling competitive products for a period of five years. Item 1, ¶¶ 191-20, Exh. 1. The New York defendants admit in their answer that Sherex is a New York corporation. Item 14, ¶ 1.

Between 1993 and 2000, defendant Jesper Iversen was a principal of Minibooster, then Iversen Hydraulics. On or about July 7, 2000, Minibooster and Iversen entered in an agreement whereby Iversen ceased to be a principal or have any ownership interest in the company. However, plaintiff alleges that in 2002, Iversen began to sell booster products under the Iversen name, with a trade dress similar to plaintiff's. Item 1, ¶ 25. Plaintiff alleges that the products were distributed through Sherex. Id. at ¶ 26. Plaintiff also alleges that defendants' manufacture and sale of identical products were intended to confuse consumers into thinking that Scanwill products were those of Minibooster.

In their motion to dismiss, defendants Iversen and Scanwill have submitted a declaration of Peter Prag, a Danish attorney who represents the defendants in a suit brought by Minibooster in the Danish commercial court. Item 7. He asserts that Minibooster has adequate remedies in the Danish court, and that this lawsuit is duplicative and brought solely for the purpose of causing the defendants further expense. In support of this argument, he recounts the threat of a U.S. lawsuit by plaintiff's attorney, Bo Jorgensen. Id., at ¶ 9. Mr. Prag also states that the termination agreement between plaintiff and Mr. Iversen is an agreement between Danish parties that should be determined according to Danish law.

Defendant Jesper Iversen also submitted a declaration, in which he stated that he is a citizen and resident of Denmark, and Scanwill is incorporated under the laws of Denmark. It has no offices, employees, or bank accounts in New York State. Item 9, ¶¶ 2-3. Scanwill has no distributorship agreement with Sherex, and made only one sale to Sherex, in 2002, with a value of approximately $10,000. Id., at ¶¶ 4-5.

In opposition to the motion, plaintiff submitted declarations of Christen Eperson, plaintiff's president, Bo Jorgenson and Nicolai Lindgreen, plaintiff's Danish attorneys, and the New York defendants, Andrew Johnson and Kevin Scherf. Mr. Espersen stated that Minibooster continues to do business under the Iversen name, and that the Iversen trademark is pending registration in the U.S. Patent and Trademark Office. Item 27, Exh. 2 ("Epersen"), ¶¶ 2, 4. Mr. Espersen states that, pursuant to the termination agreement between him and Mr. Iversen, plaintiff owns all intellectual property of the company. Id., at ¶ 5. In 2002, defendant Iversen began selling booster products in the United States, and has caused significant harm to plaintiff in the United States in violation of U.S. law. Id. at ¶ 11.

Mr. Lindgreen states that the Danish proceedings are distinctly different from this case. Specifically, he states that the Danish case involves breaches of Danish law in Denmark, including use of the Iversen name in Denmark, the non-compete agreement between Jesper Iversen and Minibooster, and violations of the Danish Marketing Practices Act. Item 27, Exh. 1 ("Lindgreen"), ¶¶ 3-4. The Danish case does not allege the violation of any U.S. law.

Mr. Jorgensen states that Mr. Prag "distorts what was actually said" during a meeting in August 2002. He merely told Prag that "if settlement could not be reached, Plaintiff would have no choice but to bring suit in the U.S. and Denmark based upon the separate law violations and that such litigation is expensive." Item 23, Ex. 1 ("Jorgensen"), at ¶ 4.

Finally, defendants Scherf and Johnson submitted declarations in opposition to the motion. They state that Jesper Iversen had business contacts with them in New York, including a distributorship agreement with Sherex, telephone and fax communications between Iversen and Sherex, and the receipt of promotional materials from defendants by Sherex for use in distributing defendants' products in New York and the United States. Item 23, Exh. 2 (Sherex).

In its sur-reply, plaintiff states that the Iversen trademark has not been refused by the U.S. Patent Office, but is undergoing the review process and will be registered if it is unopposed. Item 30, p. 2. Additionally, it states that Minibooster continues to use the Iversen name in the course of its business. Item 30, p. 3.

DISCUSSION

I. Forum non Conveniens

Under the doctrine of forum non conveniens, a district court may dismiss a case when an alternative forum has jurisdiction to hear the case and when trial in the chosen forum would be oppressive and vexatious to a defendant. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981); Scottish Air Int'l, Inc. v. British Caledonian Group, PLC, 81 F.3d 1224, 1232 (2d Cir.1996). An alternative forum is adequate if (1) the defendants are subject to service of process there and (2) the forum permits litigation of the subject matter of the dispute. Piper, 454 U.S. at 254 n. 22, 102 S.Ct. 252; Capital Currency Exchange, N.V. v. Nat'l Westminster Bank PLC, 155 F.3d 603, 609 (2d Cir.1998), cert. denied, 526 U.S. 1067, 119 S.Ct. 1459, 143 L.Ed.2d 545 (1999). If an adequate forum exists, the court must consider several public and private interest factors in deciding whether to give deference to the plaintiff's choice of forum. The public factors include court congestion in the chosen forum, the local interest in deciding local controversies at home, the interest in having the trial in a forum that is familiar with the governing law, the difficulties in applying foreign law, and the unfairness of burdening citizens in an unrelated forum with jury duty. Private factors include the ease of access to sources of proof and the ability and cost of procuring witnesses. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S.Ct. 839, 91 L.Ed. 1055 (1947); Scottish Air, 81 F.3d at 1232. There is generally a strong presumption in favor of plaintiff's chosen forum, although the presumption is weaker when the plaintiff or real parties in interest are foreign. Piper, 454 U.S. at 255, 102 S.Ct. 252; Capital Currency, 155 F.3d at 609. It is the burden of the moving party to establish that the alternative forum is "clearly more appropriate." Firma Melodiya v. ZYX Music GmbH, 882 F.Supp. 1306, 1317 (S.D.N.Y.1995). Dismissal will generally be inappropriate unless "the...