N. Sails Grp. v. Bds. & More GmbH
| Decision Date | 20 August 2021 |
| Docket Number | SC 20338 |
| Court | Connecticut Supreme Court |
| Parties | NORTH SAILS GROUP, LLC v. BOARDS AND MORE GMBH ET AL. |
NORTH SAILS GROUP, LLC
v.
BOARDS AND MORE GMBH ET AL.
No. SC 20338
Supreme Court of Connecticut
August 20, 2021 [**]
Argued November 15, 2019
Procedural History
Action to recover damages for, inter alia, breach of contract, and for other relief, brought to the Superior Court in the judicial district of New Haven and transferred to the Complex Litigation Docket; thereafter, the case was transferred to the judicial district of Hartford, Complex Litigation Docket, where the court, Moukawsher, J., granted the defendants' motion to dismiss and rendered judgment thereon, from which the plaintiff appealed. Affirmed.
Jeffrey R. Babbin, with whom were Ariela C. Anhalt, Adam S. Lurie, pro hac vice, and, on the brief, Kate Z. Machan, pro hac vice, for the appellant (plaintiff).
Christopher J. Gaspar, pro hac vice, withwhom were John W. Cerreta and, on the brief, Bryan J. Orticelli, for the appellees (defendants).
Jeffrey J. White and Denis J. O'Malley filed a brief for the Connecticut Business and Industry Association as amicus curiae.
Robinson, C. J., and Palmer, McDonald, D'Auria, Mullins, Kahn and Ecker, Js. [*]
OPINION
D'AURIA, J.
This appeal requires us to consider whether, consistent with due process, a court of this state may properly exercise personal jurisdiction over the foreign national defendant in this breach of contract action when the resident plaintiff has alleged that its long-term, contractual relationship with the defendant created sufficient minimum contacts with Connecticut. The plaintiff, North Sails Group, LLC, appeals from the judgment of dismissal for lack of personal jurisdiction over the defendants, Boards and More GmbH (B&M) and Emeram Capital Partners GmbH (Emeram).[1] The plaintiff claims that the trial court improperly concluded that exercising personal jurisdiction over the defendants would violate their right to due process. Although we recognize that this is a close case, we conclude that the plaintiff has failed to demonstrate that the defendants had sufficient minimum contacts with Connecticut, and, thus, we affirm the judgment of the trial court.
"A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Dorry v. Garden, 313 Conn. 516, 521, 98 A.3d 55 (2014). "Because a jurisdictional challenge presents a question of law, our review is plenary." Samelko v. Kingstone Ins. Co., 329 Conn. 249, 257, 184 A.3d 741 (2018). When, as in the present case, "the defendant challenging the court's personal jurisdiction is a foreign corporation or a nonresident individual, it is the plaintiff's burden to prove the court's jurisdiction." Cogswell v. American Transit Ins. Co., 282 Conn. 505, 515, 923 A.2d 638 (2007). In deciding a jurisdictional question raised by a motion to dismiss, a court must "take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) Dorry v. Garden, supra, 521. In most instances, the motion must be decided on the complaint alone. However, when "the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motion to dismiss . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint. . . . Rather, those allegations are tempered by the light shed on them by the [supplementary undisputed facts]. . . . If affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking, and the plaintiff fails to undermine this conclusion with counter affidavits . . . or other evidence, the trial court may dismiss the action without further proceedings. . . . If, however, the defendant submits either no proof to rebut the plaintiff's jurisdictional allegations
. . . or only evidence that fails to call those allegations into question . . . the plaintiff need not supply counter-affidavits or other evidence to support the complaint . . . but may rest on the jurisdictional allegations therein." (Internal quotation marks omitted.) Angersola v. Radiologic Associates of Middletown, P.C., 330 Conn. 251, 274-75, 193 A.3d 520 (2018).
In the present case, there are no disputed facts relevant to our minimum contacts analysis. Rather, the court's task is to determine whether the plaintiff has advanced sufficient allegations and evidence to establish minimum contacts. If it has not, the plaintiff simply has not met its burden.
Consistent with these principles, we consider the following facts as alleged in the complaint and those facts contained in the affidavits and exhibits submitted in support of the defendants' motion to dismiss and the plaintiff's opposition thereto, none of which creates a dispute regarding a relevant jurisdictional fact. The plaintiff is a limited liability company registered in Delaware, with its principal place of business in Milford, Connecticut. B&M is a limited liability company chartered under the laws of Austria, with its principal place of business in Molln, Austria. Emeram is a private equity investment limited liability company, with its principal place of business in Munich, Germany. Neither B&M nor Emeram has ever appointed or maintained an agent for service of process in Connecticut. Neither of the defendants maintains any offices, employees, or real or personal property, including computers, in Connecticut; nor do they transact any business in Connecticut. B&M's only sales in the United States are to Boards & More, Inc. (B&M USA), an American company incorporated and located in the state of Washington. B&M and B&M USA are sister entities, both wholly owned subsidiaries of Boards and More Beteiligungs GmbH, which, in turn, is a wholly owned subsidiary of Boards and More Holding GmbH, a German limited liability company that is the top level operational business within the Boards and More group of companies.[2]
On October 1, 1990, the plaintiff entered into a trademark licensing agreement with B&M's predecessor, North Sails Windsurfing GmbH (NSW). NSW subsequently assigned all of its interests in the licensing agreement to B&M.[3] On October 1, 2000, the plaintiff and B&M terminated the October 1, 1990 agreement and substituted for it the trademark and licensing agreement that gave rise to the present action (licensing agreement). Pursuant to the licensing agreement, the plaintiff granted B&M a worldwide license to use certain trademarks the plaintiff owned, as well as the trade name, "North Surf," which the plaintiff also owned (collectively, North Marks), in the manufacture and distribution of certain B&M windsurfing, kitesurfing and associated products (licensed products).[4] In exchange, B&M
agreed "to use its best good faith effort to maximize the production, marketing and sale" of the licensed products. B&M also agreed to pay quarterly license fees to a bank account the plaintiff designated-JP Morgan Chase Bank, in Milwaukee, Wisconsin. The licensing agreement provided that it would be governed by and construed in accordance with the laws of the state of Wisconsin, excluding its choice of law rules. The agreement provided that it would continue from year to year until terminated or canceled as a result of one of a number of occurrences listed in § 8 of the agreement. Emeram is not a party to the agreement.[5]
The plaintiff alleges that, as of the date on which the complaint was filed, B&M, at the direction of Emeram and in violation of the licensing agreement, launched its own trademark (B&M trademark) and replaced the North Marks with the B&M trademark for use with the licensed products to be released in the autumn of 2018. The plaintiff claims that the defendants' actions caused it harm because, due to the licensing agreement, B&M had established a global distribution network for the licensed products, while, at the same time, the plaintiff had refrained from manufacturing, producing and distributing any products that would compete with the licensed products. The plaintiff further alleges that, because of insufficient lead time provided by B&M, the plaintiff lacked sufficient time to partner with a competing company to manufacture and to distribute similar North Marks products.
The plaintiff brought this action alleging breach of contract as to both defendants. The trial court subsequently granted the defendants' motion to dismiss for lack of personal jurisdiction, concluding that, although Connecticut's long arm statute, General Statutes § 52-59b, "likely" would support the exercise of jurisdiction, principles of due process would not. Stating that "[t]he current constitutional standard on specific jurisdiction is just a year old," the court concluded that the case was governed by the decision of the United States Supreme Court in Bristol-Myers Squibb Co. v. Superior Court, ___ U.S. ___, 137 S.Ct. 1773, 198 L.Ed.2d 395 (2017).[6]Applying Bristol-Myers Squibb Co., the court concluded that, because the actions that allegedly constituted a breach of contract had occurred in Europe, not in Connecticut, the defendants lacked sufficient minimum contacts with Connecticut, and the exercise of personal jurisdiction over them would offend principles of due process. The plaintiff appealed from the trial court's judgment to the Appellate Court, and the appeal was transferred to this court. See General Statutes § 51-199 (c); Practice Book § 65-1.
I
"When a defendant challenges personal jurisdiction in a motion to dismiss, the court must undertake a two part inquiry to determine the propriety of its exercising
such jurisdiction over the defendant. The trial court must first decide whether the applicable state [long...
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