Scotch Whisky Ass'n v. Majestic Distilling Co.

• Citation: 681 F. Supp. 1297
• Decision Date: 03 March 1988
• Docket Number: No. 87 C 9437.,87 C 9437.
• Court: U.S. District Court — Northern District of Illinois
• Parties: SCOTCH WHISKY ASSOCIATION, and Major General Andrew Linton Watson, C.B., Colonel of the Regiment, as Chairman of the Regimental Trustees of the Regimental Trust Fund of the Black Watch, the Royal Highland Regiment, Plaintiffs, v. MAJESTIC DISTILLING COMPANY, INC., d/b/a Monumental Distilling Company, and Valley Liquors, Inc., Defendants.

681 F. Supp. 1297

SCOTCH WHISKY ASSOCIATION, and Major General Andrew Linton Watson, C.B., Colonel of the Regiment, as Chairman of the Regimental Trustees of the Regimental Trust Fund of the Black Watch, the Royal Highland Regiment, Plaintiffs, v. MAJESTIC DISTILLING COMPANY, INC., d/b/a Monumental Distilling Company, and Valley Liquors, Inc., Defendants.

No. 87 C 9437.

United States District Court, N.D. Illinois, E.D.

March 3, 1988.

Beverly W. Pattishall, Charles R. Mandly, Jr., John T. Brown, Pattishall, McAuliffe & Hofstetter, Chicago, Ill., for plaintiffs.

Geoffrey G. Gilbert, Thomas R. Leavens, McBride, Baker & Coles, Chicago, Ill., Mercer L. Stockell, William G. Pecau, Catherine H. Stockell, Pennie & Edmonds, of counsel, New York City, for defendants.

MEMORANDUM OPINION AND ORDER

NORDBERG, District Judge.

This trademark and unfair competition action is before the Court on defendant Majestic Distilling's motion to dismiss for lack of venue, or, in the alternative, transfer for lack of venue to the District of Maryland. Majestic Distilling and plaintiffs have fully briefed their positions and each has moved for an award of attorney's fees. For the reasons set forth, the Court grants Majestic Distilling's motion to transfer for lack of venue to the District of Maryland and denies each motion for an award of attorney's fees.

I. Background

There are two plaintiffs to this lawsuit, they are both from Scotland, and at least one of them is very interested in protecting the good reputation of Scotch Whisky.¹ That plaintiff is the Scotch Whisky Association, "organized and existing under the laws of the United Kingdom, and ... located at 20 Atholl Crescent, Edinburgh, Scotland." Complaint ¶ 1. The Scotch Whisky Association is an association of whisky distillers and merchants in Scotland and the United Kingdom, "organized ... for the purpose of promoting the ... trade in ... whisky produced in Scotland...." Complaint ¶ 6. The other plaintiff is an individual who is suing in his capacity as "Major General Andrew Linton Watson, C.B., Colonel of the Regiment, as Chairman of the Regimental Trustees of the Regimental Trust Fund ("Regimental Trust") of The Black Watch, The Royal Highland Regiment ... created and existing under the laws of the United Kingdom ... and located at Regimental Headquarters, Balhousie Castle, Perth, Scotland." Complaint ¶ 2. The Regimental Trust (and Major General Andrew Linton Watson as Chairman) is empowered to act on behalf of The Black Watch, The Royal Highland Regiment. The Black Watch, The Royal Highland Regiment is part of an actual army; it is a "regiment of the Scottish Division of the Royal Army of The United Kingdom." Complaint ¶ 9.² The complaint alleges that "since long prior to the acts of defendants complained of herein, The Black Watch, The Royal Highland Regiment adopted and used a certain devise ... as its Regimental Badge." Complaint ¶ 10.³

There are two defendants to this lawsuit, they are both from the United States, and they both sell domestic whisky, gin, and vodka. One defendant is Majestic Distilling, a Maryland corporation with its principal (and only) place of business in Baltimore, Maryland. Cohen Aff. ¶ 2. Majestic Distilling is a relatively small manufacturer of alcoholic beverages, and all of its manufacturing, warehouse, and sales facilities are located in Maryland. Cohen Aff. ¶ 4. It sells its products to distributors throughout the United States, and allegedly uses the BLACK WATCH name and the Regimental Badge on the bottles of its domestic whisky, gin, and vodka. It has one salesperson, located in Maryland, who takes orders over the telephone from distributors and fills orders F.O.B. Maryland. Cohen Aff. ¶ 8. During the past calendar year, since January 1, 1987, Majestic Distilling sold over sixty percent of its BLACK WATCH products to distributors in Maryland. Cohen Aff. ¶ 10.⁴ The only distributor in the Northern District of Illinois, the other defendant in this action, is Valley Liquors. Valley Liquors is an Illinois corporation with its principal place of business in the Northern District of Illinois. Over the past calendar year, Majestic Distilling sold approximately one percent of its BLACK WATCH products to Valley Liquors, and less than ten percent of its BLACK WATCH products to distributors throughout the State of Illinois. Cohen Aff. ¶¶ 10, 11. The Illinois Liquor Control Commission has issued Majestic Distilling a Non-Resident Dealer's license to ship its BLACK WATCH products to Illinois.

The focus of this lawsuit, however, is on Majestic Distilling. Over the past 15 months, plaintiffs have been asking the United States Patent and Trademark Office ("USPTO") to prevent Majestic Distilling from using the Black Watch name and the Regimental Badge on its domestic whisky, gin, and vodka products. Majestic Distilling has a registered trademark in the United States Patent and Trademark Office ("USPTO") of the name BLACK WATCH for "whisky" and has filed an application with the USPTO for a registered trademark of the name BLACK WATCH for "whisky, gin, and vodka." Registration Number 801,466 and Application Serial Number 570,221. On August 20, 1986, plaintiffs filed a Petition for Cancellation of Majestic Distilling's trademark registration with the Trademark Trial and Appeal Board in Washington, D.C., and also filed a Notice of Opposition to Majestic Distilling's application for trademark registration. Cancellation Number 15,678 and Opposition Number 74,649. On September 2, 1987, the Trademark Trial and Appeal Board dismissed plaintiffs' cancellation proceeding. On September 3, 1987, the Trademark Trial and Appeal Board dismissed plaintiffs' opposition proceeding.

On October 30, 1987, plaintiffs filed a three-count complaint in the Northern District of Illinois against Majestic Distilling and Valley Liquors. In their complaint, plaintiffs allege, inter alia, that defendants are using the BLACK WATCH name and the Regimental Badge on alcoholic beverages not produced in Scotland, that such use is likely to deceive the public into believing "that such alcoholic beverages have been produced in Scotland and said ... belief is likely to affect adversely the reputation and sale of alcoholic beverages produced in Scotland." Complaint ¶ 16.⁵ In Count I, plaintiffs seek injunctive and monetary relief under the Lanham Trademark Act, 15 U.S.C. § 1125(a), the common law of unfair competition, and certain Illinois unfair competition provisions against both Majestic Distilling and Valley Liquors.⁶ In Count II, plaintiffs seek review of the Trademark Trial and Appeal Board's Order dismissing their cancellation proceeding against Majestic Distilling. In Count III, plaintiffs seek review of the Trademark Trial and Appeal Board's Order dismissing their opposition proceeding against Majestic Distilling.

Majestic Distilling has now moved to dismiss or transfer plaintiffs' lawsuit on the ground that venue is improper in the Northern District of Illinois. Both parties have submitted very thorough briefs on the motion.

II. Discussion

"Venue refers to locality, the place where a lawsuit should be brought." 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3801, at 3 (2d ed. 1986) (hereinafter Wright, Miller & Cooper). It is "primarily a matter of choosing a convenient forum," Leroy v. Great Western United Corp., 443 U.S. 173, 180, 99 S.Ct. 2710, 2715, 61 L.Ed.2d 464 (1979), and, in most instances, the purpose of the venue rules "is to protect the defendant against the risk that a plaintiff will select an unfair or inconvenient place of trial." Id. at 183-84, 99 S.Ct. at 2716 (emphasis in original). The venue rules in transitory actions, as opposed to local actions, are entirely controlled by statute. See Livingston v. Jefferson, 15 F.Cas. 660, 664 (No. 8411) (C.C.D.Va.1811) ("Actions are deemed transitory, where transactions on which they are founded, might have taken place anywhere; but are local where their cause is in its nature necessarily local."); Wright, Miller & Cooper, supra, § 3822 at 202-214 (& Supp.1987) (A local action usually involves a dispute over land, such as trespass, damage to real estate, and title; a transitory action is defined negatively as everything not local).

1. Applicable Venue Rules

Plaintiffs have brought a three-count complaint presenting separate causes of action, and venue must be proper as to each cause of action. Bredberg v. Long, 778 F.2d 1285, 1288 (8th Cir.1985) (rejecting a "pendent venue" approach); Wright, Miller & Cooper, supra, §§ 3808 at 80. The first count includes claims for relief based on trademark infringement, common law unfair competition, and certain Illinois unfair competition provisions. Because no specific statute governs venue for this particular cause of action, and because the cause of action is transitory, the first count is governed by the general venue statute, 28 U.S.C. § 1391(b). Section 1391(b) provides in pertinent part:

A civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought only in the judicial district where all defendants reside, or in which the claim arose....

Id. (emphasis added).

The second and third counts of the complaint are appeals from the Trademark Trial and Appeal Board's dismissal of plaintiffs' cancellation and opposition proceedings. These are transitory actions, but appeals from the Trademark Trial and Appeal Board decisions are governed by a specific venue statute, 15 U.S.C. § 1071(b)(4). Section 1071(b)(4) provides in pertinent part:

If there be adverse parties residing in a plurality of districts not embraced within the same state, or an adverse party residing in a foreign country, the United States District Court for the District of Columbia shall have jurisdiction....

Courts have construed this section to apply only where there are multiple defendants or a single defendant residing in a foreign country....