PPS, Inc. v. Jewelry Sales Representatives, Inc.
| Decision Date | 11 March 1975 |
| Docket Number | No. 74 Civil 3789.,74 Civil 3789. |
| Citation | 392 F. Supp. 375 |
| Parties | PPS, INC., Plaintiff, v. JEWELRY SALES REPRESENTATIVES, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
COPYRIGHT MATERIAL OMITTED
Alfred W. Vibber, Arthur Klein, Klein & Levine, New York City, for plaintiff; Arnold B. Christen, Fisher, Christen & Sabol, Washington, D. C., of counsel.
Ernest F. Marmorek, New York City, for defendants.
Plaintiff PPS, Inc. ("PPS") claims copyright, trademark, and "dress of goods" rights in a line of "I Like You" products manufactured and sold by its licensee, Rosecraft, Inc. The line of products includes costume jewelry in the shape of an apple and bearing the mark "I Like You," and other products containing the apple and "I Like You" design. PPS alleges that the defendants in their various capacities have engaged and intend to engage in the manufacture and sale of a line of costume jewelry copied from its "I Like You" line, and seeks injunctive relief and monetary damages for copyright and trademark infringement, and for unfair competition.
Plaintiff PPS moves for a preliminary injunction, and defendant Nu-Style Company, Inc. ("Nu-Style") moves to dismiss the complaint for lack of personal jurisdiction and improper venue, or to transfer the action under 28 U.S.C., section 1404(a), to the District of Massachusetts.
Only Nu-Style urges lack of jurisdiction and improper venue. The other defendants, Jewelry Sales Representatives, Inc. ("Jewelry Sales"), Aberbach, and Puccini Jewelry Co. ("Puccini"), concede jurisdiction and venue.
Plaintiff claims to have effected service on Nu-Style by serving Aberbach and Jewelry Sales as its "managing or general agents"1 in this district, and also by personal service in Massachusetts upon Nu-Style's president.2
The question of Nu-Style's amenability to jurisdiction, service of process, and venue in this district turns largely upon the relationship between Nu-Style and Jewelry Sales. Jewelry Sales, of which Aberbach is its president, director, and controlling shareholder, is a New York corporation and conducts its business in this district. It is the exclusive distributor or sales representative for costume jewelry manufactured by Nu-Style.3 Jewelry Sales does not buy the jewelry and resell it; rather, it solicits customers, shows them the items, takes the orders, and sends the orders to Nu-Style, which manufactures the items, ships them to the customers, and bills the customers directly. Jewelry Sales does not make any binding commitments to sell; Nu-Style decides whether to accept the orders forwarded by Jewelry Sales and whether to extend credit. Nu-Style also controls the prices: while Jewelry Sales occasionally gives a customer a small discount to induce it to buy, Nu-Style has the right to refuse the order or notify the customer of the acceptable price. In addition to taking orders for Nu-Style, Jewelry Sales provides showroom space for Nu-Style's products. For all these services, Jewelry Sales is paid a commission of 7½%. Defendant Aberbach sums up the relationship of Jewelry Sales to Nu-Style as follows: "We Jewelry Sales are strictly sales representatives, nothing more and nothing less, subject to anything they may tell us to do."
The responsibilities assumed by Jewelry Sales in its position as exclusive sales representative for Nu-Style are sufficient, in this court's view, to warrant the assumption that notice to Jewelry Sales would be effective notice to Nu-Style, and to justify the conclusion that Jewelry Sales is a "managing or general agent" within the meaning of Rule 4(d)(3) of the Federal Rules of Civil Procedure.4 If, then, Nu-Style is amenable to jurisdiction, service upon Jewelry Sales is sufficient to subject it to the court's jurisdiction. In addition, if, as the court hereafter concludes,5 Nu-Style is amenable to the "long-arm" jurisdiction of the New York courts, personal service of its president in Massachusetts is sufficient to enable this court to acquire jurisdiction over Nu-Style.6
In determining Nu-Style's amenability to jurisdiction, the court is faced at the outset with the question whether amenability to personal jurisdiction on the copyright claim is to be tested by state or federal law. While the Second Circuit has specifically left open the question whether state of federal jurisdictional principles are applicable in federal question litigation,7 several courts, relying on language of the Supreme Court in Angel v. Bullington,8 have resolved the question in favor of federal law.9 Federal law appears to be more appropriate, particularly with respect to a copyright claim, over which the subject matter jurisdiction of the federal courts is exclusive.
In this case, the view of federal law taken by most courts that have applied a federal standard would permit jurisdiction over Nu-Style. Nu-Style's contacts with the State of New York10 are sufficient to satisfy the due process standards of International Shoe Co. v. Washington11 and its progeny, and valid service was made upon Jewelry Sales as managing agent under Rule 4(d) (3).
It is not necessary, however, to rely solely on any such federal standard of amenability to jurisdiction, since Nu-Style is also subject to personal jurisdiction under New York's "long-arm" statute, C.P.L.R., section 302, which provides in pertinent part:
Whether Nu-Style is amenable to jurisdiction under this provision depends upon whether Aberbach and Jewelry Sales are "agents" whose activities are attributable to Nu-Style for jurisdictional purposes. A formal agency relationship is not necessary to impute to a non-resident defendant for jurisdictional purposes the activities of another.12 In determining whether a local sales representative like Jewelry Sales is for jurisdictional purposes an "agent" whose activities are attributable to the manufacturer, rather than an independent entity whose activities are not so attributable, a significant factor is the degree of control that the manufacturer retains to accept or reject orders secured by the local representative, to set the terms of the sale, and to establish the conditions of payment.13 The court is of the view that Nu-Style maintained sufficient control over sales activities in which Jewelry Sales was involved,14 that the activities of Jewelry Sales within the State of New York are properly attributable to Nu-Style, and that Nu-Style is properly held to have transacted business in New York "through an agent."15 Since the various causes of action in this case arose out of that transaction of business, Nu-Style is subject to personal jurisdiction under section 302(a)(1).
Since the court has concluded that the activities of Jewelry Sales within the State of New York are attributable to Nu-Style for jurisdictional purposes, Nu-Style is also subject to personal jurisdiction under section 302(a)(2) by virtue of the commission of tortious acts within the state.16 In addition, Nu-Style is subject to long-arm jurisdiction under section 302(a)(3)(i). Its manufacture of the allegedly infringing articles in Massachusetts and its shipping them into the state for distribution constitute the commission of a "tortious act without the state causing injury to person or property within the state," and Nu-Style regularly solicits business and engages in other persistent conduct in New York through Jewelry Sales.
The venue provision relating to copyright actions, 28 U.S.C., section 1400(a), provides that such actions "may be instituted in the district in which the defendant or his agent resides or may be found." Since Nu-Style's agent, Jewelry Sales, maintains its office in Manhattan, there can be no question that it is found in this district. Venue is therefore proper as to Nu-Style.17
As an alternative to its motion to dismiss, Nu-Style moves to have this case transferred to the District of Massachusetts pursuant to 28 U.S.C., section 1404(a), which permits a transfer of a civil action "to any other district . . . where it might have been brought." It is not at all clear that this action could have been brought in the District of Massachusetts, since it does not appear that jurisdiction and venue exist in Massachusetts as to Jewelry Sales, Aberbach, and Puccini. But apart from this, there is no sufficient showing to warrant relief under section 1404(a) for the convenience of parties and witnesses. The motion to transfer is denied.18
Copyright Claims: Turning to the merits of plaintiff's request for preliminary relief, the court first considers the claims of copyright infringement. Plaintiff has three certificates of registration from the Copyright Office: one for a published book entitled "I Like You & Design" — the design consisting of the apple and the words "I Like You"; a second...
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