Pangaea Inc. v. the Flying Burrito Llc

Decision Date01 August 2011
Docket NumberNo. 09–3672.,09–3672.
Citation647 F.3d 741,99 U.S.P.Q.2d 1615
PartiesPANGAEA, INC., Plaintiff/Appellant,v.The FLYING BURRITO LLC; Robert Moore, Defendant/Appellees.
CourtU.S. Court of Appeals — Eighth Circuit

OPINION TEXT STARTS HERE

Mark Murphey Henry, argued, Adam L. Hopkins, on the brief, Fayetteville, AR, for appellant.

Glenn Johnson, argued, Wendy K. Marsh, on the brief, Des Moines, IA, for appellee.Before LOKEN and COLLOTON, Circuit Judges, and NELSON,* District Judge.NELSON, District Judge.

The issue in this diversity action is whether a federal court in Arkansas has personal jurisdiction over an Iowa citizen and an Iowa limited liability company where the contact with Arkansas was a single meeting by the parties in Arkansas. Appellant Pangaea, Inc. (Plaintiff), the owner of the federal trademark “The Flying Burrito Company,” appeals the district court's 1 dismissal of its trademark infringement action for lack of personal jurisdiction.2 Plaintiff argues that the district court had jurisdiction over The Flying Burrito L.L.C. (Flying Burrito) and Robert Moore (Defendants) because Moore and another business representative had traveled from Iowa, where their restaurant was located, to Arkansas on one occasion, in 2004, for the express purpose of obtaining permission from Plaintiff to use its trademark. Although acknowledging this only contact, Plaintiff also asserts that the district court erred in denying Plaintiff's request to conduct jurisdictional discovery. The district court dismissed the action for lack of personal jurisdiction, concluding that the contact with Arkansas was insufficient to permit the exercise of personal jurisdiction consistent with the Due Process Clause. We affirm.

Plaintiff, an Arkansas corporation, operates a restaurant named “The Flying Burrito Company in Fayetteville, Arkansas. Its federal service mark of the same name was registered on January 11, 2005, with “first use” and “in commerce” dates of May 31, 2003. Defendant, Flying Burrito LLC, a limited liability company organized under Iowa law, operated a restaurant in Ames, Iowa under the name “The Flying Burrito.” The Iowa restaurant opened in August 2004 and Defendant Robert Moore managed the restaurant from that date until August 2007. Moore is a citizen of Iowa.

Shortly after the Iowa restaurant opened, Matthew Goodman, the owner of the Iowa restaurant, became aware of Plaintiff's then-pending federal trademark application, which had been filed on January 7, 2004. Sometime in 2004 (either in the first three months of 2004, according to Plaintiff, or shortly after October 19, 2004, according to Defendants), Goodman and Moore traveled to Arkansas to meet with Plaintiff's owners seeking permission to use their trademark. Although it is clear that they did not obtain any such agreement, the parties dispute whether Plaintiff's owners expressly told Defendants that they could not use their mark. In any event, Defendants continued to use “The Flying Burrito” name.

On November 18, 2008, after demanding that Defendants cease use of “The Flying Burrito” name, Plaintiff commenced this diversity action for trademark infringement in the Western District of Arkansas. The district court granted Defendants' motion to dismiss for lack of personal jurisdiction. See Fed.R.Civ.P. 12(b)(2). We review that ruling de novo. Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir.1996).

When jurisdiction is challenged on a pretrial motion to dismiss, the “nonmoving party need only make a prima facie showing of jurisdiction.” Dakota Indus., Inc., v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir.1991). Where, as here, “the district court does not hold a hearing and instead relies on pleadings and affidavits, ... the court must look at the facts in the light most favorable to the nonmoving party, and resolve all factual conflicts in favor of that party.” Id. (internal citations omitted). Because we conclude that Defendants have insufficient contacts with Arkansas to subject them to personal jurisdiction there consistent with due process, we affirm.

In a diversity suit, a federal court may exercise jurisdiction over a nonresident defendant only if the requirements of the forum state's long-arm statute are met and the exercise of jurisdiction comports with due process. See Burlington, 97 F.3d at 1102. Arkansas's long-arm statute provides for jurisdiction over persons and claims to the maximum extent permitted by constitutional due process. Id.; Ark.Code Ann. § 16–4–101.

In order to satisfy the due process clause, a defendant must have “minimum contacts [with the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). The defendant's “contacts” with the forum state generally must not arise due to mere fortuity, but must arise because the defendant has “purposefully availed” itself of the privilege of conducting activities in the state. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); Digi–Tel Holdings, Inc. v. Proteq Telecomm., Ltd., 89 F.3d 519, 522 (8th Cir.1996).

[T]hose who live or operate primarily outside a State have a due process right not to be subjected to judgment in its courts as a general matter.” J. McIntyre Mach., Ltd. v. Nicastro, ––– U.S. ––––, 131 S.Ct. 2780, 2787, 180 L.Ed.2d 765 (2011) (plurality opinion). However, when a defendant “purposefully avails itself of the privilege of conducting activities within” a state, Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), a state's exercise of jurisdiction over that defendant is proper ‘in a suit arising out of or related to the defendant's contacts with the forum.’ J. McIntyre, 131 S.Ct. at 2787–88 (plurality opinion) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). “The question is whether a defendant has followed a course of conduct directed at the society or economy existing within the jurisdiction of a given sovereign, so that the sovereign has the power to subject the defendant to judgment concerning that conduct.” Id. at 2789 (plurality opinion).

“The minimum contacts necessary for due process may be the basis for either ‘general’ or ‘specific’ jurisdiction.” Johnson v. Arden, 614 F.3d 785, 794 (8th Cir.2010).3 Specific jurisdiction may be conferred over causes of action arising from or related to a defendant's actions within the forum state. Burlington, 97 F.3d at 1103; Lakin v. Prudential Securities, Inc., 348 F.3d 704, 707 (8th Cir.2003) (concluding that cause of action in that case was “entirely unrelated to [defendant's] activities in [the forum]). Specific jurisdiction, like general jurisdiction, may be justified when a defendant, through its contacts with the forum, purposefully avails itself of the privilege of conducting business in the forum, ‘in a suit arising out of or related to the defendant's contacts with the forum.’ J. McIntyre, 131 S.Ct. at 2787–88 (plurality opinion) (quoting Helicopteros, 466 U.S. at 414 n. 8, 104 S.Ct. 1868); see also Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1073 (8th Cir.2004).

This case involves only a question of specific jurisdiction, as Plaintiff apparently concedes that Defendants' single contact with the Arkansas forum during the 2004 business trip to Fayetteville was neither continuous nor systematic. Under these facts, such contact is insufficient to support the exercise of general jurisdiction. We therefore turn to the question of specific jurisdiction. Specific jurisdiction may be established where the claim “arises out of” or “relates to” a defendant's contacts with the forum. See J. McIntyre, 131 S.Ct. at 2787–88 (plurality opinion). Thus, we must consider whether the suit arises out of or is related to the Defendants' contacts with the forum and whether Defendants engaged in activities in the forum that “reveal an intent to invoke or benefit from the protection of its laws.” See id. at 2791 (plurality opinion).4

Defendants reside in Iowa and their sole relevant contact with Arkansas was the 2004 meeting in Fayetteville. “Infringing upon a trademark, as a tort, may be grounds for personal jurisdiction under [a state's] long-arm statute.” Johnson v. Arden, 614 F.3d 785, 797 (8th Cir.2010).

Here, the trademark infringement claim is with respect to a restaurant business. While Plaintiff sells “goods” in the form of food, this physical product (unlike, for example, a brand-name shoe) is presumably neither itself marked nor distributed in the forum state. Insofar as the usual test for “passing off” infringing goods could apply in this context, the injury would occur either ‘where the deceived customer buys the defendant's product in the belief that he is buying the plaintiff's' or “where the plaintiff suffers the economic impact.” Dakota Indus., 946 F.2d at 1387 (noting two theories as to where trademark claim arises, but not choosing between them).

The district court here ruled that Plaintiff's trademark infringement claims did not arise from or relate to the single meeting between the parties in Arkansas. Rather, the alleged infringement began before this meeting, when Defendants established the Ames, Iowa restaurant, and continued thereafter, “seemingly unaffected by the meeting.” (App. at 115–16.) The court further explained that it saw “no connection between the parties' meeting in Arkansas and the cause of action” because the “claimed injuries arose out of Defendants' operation of their restaurant in Ames Iowa.” ( Id. at 116.) “The infringement took place in and around Defendants' Iowa restaurant and was directed at Iowa residents.” ( Id.) Thus the alleged infringement of the service mark...

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