Rainy Day Books v. Rainy Day Books & Café

• Decision Date: 05 February 2002
• Docket Number: No. 01-2083-DJW.,01-2083-DJW.
• Citation: 186 F.Supp.2d 1158
• Parties: RAINY DAY BOOKS, INC., Plaintiff, v. RAINY DAY BOOKS & CAFÉ, L.L.C., Defendant.
• Court: U.S. District Court — District of Kansas

Page 1158

186 F.Supp.2d 1158

RAINY DAY BOOKS, INC., Plaintiff, v. RAINY DAY BOOKS & CAFÉ, L.L.C., Defendant.

No. 01-2083-DJW.

United States District Court, D. Kansas.

February 5, 2002.

Geoffrey B. Jennings, Gresham, OR, for plaintiff.

Jeffrey J. Simon, Kyle L. Elliott, Blackwell Sanders Peper Martin LLP, Kansas City, MO, Michael G. Rust, Groswold & Lee, P.A., Waston, MD, for defendant.

MEMORANDUM AND ORDER

WAXSE, United States Magistrate Judge.

Plaintiff filed this action seeking damages and injunctive relief for alleged service mark infringement under the Lanham Act, 15 U.S.C. § 1051, et seq. Plaintiff also alleges state statutory and common law claims for trademark infringement and unfair competition. This matter is presently before the Court on Defendant's Motion to Dismiss Plaintiff's Petition (doc. 3). For the reasons set forth below, Defendant's Motion to Dismiss Plaintiff's Petition is denied.

I. Background

Plaintiff is a Kansas corporation with its principal office and place of business located in Fairway, Kansas. Plaintiff is the managing company for its retail bookstore operating under the name Rainy Day Books. In 1977 and 1992, Plaintiff registered "Rainy Day Books" as its service mark with United States Patent and Trademark Office. In 1992, it also registered the service mark "Rainy Day." Defendant is a Maryland corporation operating a retail bookstore located in Easton, Maryland, under the name Rainy Day Books & Café. Defendant's bookstore has been in operation since September 2000.

Plaintiff alleges that in December 2000 it began receiving inquiries through its website about the "Rainy Day Books" store located in Easton, Maryland. Plaintiff's customers were inquiring whether it had a store in Maryland and whether gift certificates purchased at its bookstore could be redeemed in the Maryland bookstore. Upon investigation, Plaintiff discovered that Defendant had established an Internet website, www.eastonrainydaybookstore.com, which incorporated multiple uses of its service marks. Counsel for Plaintiff contacted Defendant and requested that it stop using the service marks "Rainy Day Books" and "Rainy Day" in conjunction with its operations. Defendant responded that the bookstore had only been in business a few months and that a trademark search had been performed prior to its commencement of operations. Defendant later indicated that it would change its name to Easton's Rainy Day Books to eliminate confusion but refused Plaintiff's requests to cease use of "Rainy Day" or "Rainy Day Books."

II. Legal Standard for Motions to Dismiss for Lack of Personal Jurisdiction

The standard that governs a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction is well established: plaintiff bears the burden of establishing personal jurisdiction over a defendant. Rambo v. American Southern Ins. Co., 839 F.2d 1415, 1417 (10th Cir.1988). When the court rules on a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1090 (10th Cir.1998). A plaintiff may make this prima facie showing by demonstrating, by affidavit or other written materials, facts, that, if true, would support the exercise of personal jurisdiction over defendant. Id.

In considering whether plaintiff has made a prima facie showing of personal jurisdiction over defendant, the allegations in the complaint must be taken as true to the extent they are uncontroverted by defendant's affidavits. Behagen v. Amateur Basketball Ass'n. of U.S.A., 744 F.2d 731, 733 (10th Cir.1984). When conflicting affidavits are presented, factual disputes are resolved in plaintiff's favor and plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party. Id. In order to defeat plaintiff's prima facie showing of jurisdiction, a defendant must present a compelling case demonstrating "that the presence of some other considerations would render jurisdiction unreasonable." OMI Holdings, 149 F.3d at 1090 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

III. Personal Jurisdiction

Before a federal court can exercise personal jurisdiction over a defendant in a federal question case, the court must determine (1) whether the applicable statute potentially confers jurisdiction by authorizing service of process on the defendant, and (2) whether the exercise of jurisdiction comports with due process. Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir.2000) (citing Omni Capital Int'l Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987)). In federal question litigation, the statute upon which the action is based provides the rules for service of process on nonresident defendants. Berthold Types Ltd. v. European Mikrograf Corp., 102 F.Supp.2d 928, 930 (N.D.Ill.2000).

Because no federal statute authorizes nationwide service of process in this case, Defendant must still be shown to be amenable to service of process under Kansas' long-arm statute, K.S.A. 60-308(b). Heating and Cooling Master Marketers Network, Inc. v. Contractor Success Group, Inc., 935 F.Supp. 1167, 1170 (D.Kan.1996) (citing Omni Capital, 484 U.S. at 108, 108 S.Ct. 404); Fed.R.Civ.P. 4(k)(1). Under Kansas law, the long-arm statute permits personal jurisdiction over a party to the extent allowed by the Constitution of the United States. Volt Delta Resources, Inc. v. Devine, 241 Kan. 775, 778, 740 P.2d 1089, 1092 (1987). Because the Kansas long-arm statute is construed liberally to allow jurisdiction to the full extent permitted by due process, the court proceeds directly to the constitutional issue. OMI Holdings, 149 F.3d at 1090 (citing Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Co-op., 17 F.3d 1302, 1305 (10th Cir.1994)).

In federal question actions, personal jurisdiction flows from the Due Process Clause of the Fifth Amendment. Peay, 205 F.3d at 1210 (citing Omni Capital, 484 U.S. at 103-04, 108 S.Ct. 404). Nevertheless, the due process standards applied are the same as those in a Fourteenth Amendment analysis. Packerware Corp. v. B & R Plastics, Inc., 15 F.Supp.2d 1074, 1077 (D.Kan.1998). The Due Process Clause of the Fourteenth Amendment permits the exercise of personal jurisdiction over a nonresident defendant so long as there exist minimum contacts between the defendant and the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).

The "minimum contacts" standard may be met in two ways. A court may, consistent with due process, assert specific jurisdiction over a nonresident defendant if the defendant has "purposefully directed" its activities at residents of the forum and the litigation results from alleged injuries that "arise out of or relate to" those activities. Burger King, 471 U.S. at 472, 105 S.Ct. 2174. When a plaintiff's cause of action does not arise directly from a defendant's forum-related activities, the court may nonetheless maintain general personal jurisdiction over the defendant based on the defendant's business contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-6 & n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). However, "[b]ecause general jurisdiction is not related to the events giving rise to the suit, courts impose a more stringent minimum contacts test, requiring plaintiff to demonstrate the defendant's `continuous and systematic general business contacts.'" OMI Holdings, 149 F.3d at 1091.

Once it has been established that a defendant's actions created sufficient minimum contacts, the court still must consider whether the exercise of personal jurisdiction over defendant would offend traditional notions of "fair play and substantial justice." Burger King, 471 U.S. at 476, 105 S.Ct. 2174 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). This inquiry requires a determination of whether the district court's exercise of personal jurisdiction over defendant is reasonable in light of the circumstances surrounding the case. Id.

A. Specific Jurisdiction

Since the exercise of specific personal jurisdiction over Defendant requires a less stringent showing of minimum contacts than is required for the exercise of general personal jurisdiction, the Court first directs its inquiry as to whether Defendant has the required minimum contacts necessary for exercising specific personal jurisdiction. Specific jurisdiction may be exercised when the cause of action arises out of the defendant's contacts with the forum.

The Tenth Circuit utilizes a twofold inquiry to determine whether it is appropriate to exercise specific personal jurisdiction over a nonresident defendant. OMI Holdings, 149 F.3d at 1091. First, the court must determine whether the defendant has such minimum contacts with the forum state "that he should reasonably anticipate being haled into court there." Id. (citing World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559). Within this inquiry the court must determine whether the defendant purposefully directed its activities at residents of the forum, Burger King, 471 U.S. at 476, 105 S.Ct. 2174, and whether the plaintiff's claims arise out of or result from "actions by the defendant himself that create a substantial connection with the forum State." Asahi Metal Indus. Co., Ltd. v. Superior Court of California, 480 U.S. 102, 109, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (internal quotations omitted). In order to exercise specific jurisdiction, there must be "some act by which the defendant purposefully availed itself of the privilege of conducting business in the forum state, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235,...