Sports Authority Michigan, Inc. v. Justballs, Inc.

• Decision Date: 30 May 2000
• Docket Number: No. 99-CV-75910-DT.,99-CV-75910-DT.
• Citation: 97 F.Supp.2d 806
• Parties: The SPORTS AUTHORITY MICHIGAN, INC., Plaintiff, v. JUSTBALLS, INC., et. al., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

97 F.Supp.2d 806

The SPORTS AUTHORITY MICHIGAN, INC., Plaintiff, v. JUSTBALLS, INC., et. al., Defendants.

No. 99-CV-75910-DT.

United States District Court, E.D. Michigan, Southern Division.

May 30, 2000.

COPYRIGHT MATERIAL OMITTED

Kenneth J. McIntyre, Glenn E. Forbis, Kristin L. Murphy, Rader, Fishman & Grauer, PLLC, Bloomfield Hills, MI, for plaintiff.

Kenneth J. McIntyre, Dickinson Wright PLLC, Detroit, MI, of counsel William J. Lehane, Kelly A. Beaudin, Driker Biddle & Reath LLP, Philadelphia, PA, for defendants.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

WOODS, District Judge.

This matter having come before the Court on Defendant's motion to dismiss for lack of personal jurisdiction [Document No. 3];

The Court having reviewed the pleadings submitted herein, and being otherwise fully informed in the matter;

IT IS HEREBY ORDERED that Defendant's motion to dismiss for lack of personal jurisdiction pursuant to Fed. R.Civ.P. 12(b)(2) shall be, and hereby is, DENIED.

I. BACKGROUND

Plaintiff, The Sports Authority Michigan, Incorporated ("Sports Authority" or "Plaintiff"), brought this action against Defendant Justballs.com, Incorporated ("Justballs" or "Defendant"),¹ alleging: (1) infringement of its federally registered marks under 15 U.S.C. § 1114; (2) unfair competition under 15 U.S.C. § 1125(a); (3) dilution under 15 U.S.C. § 1125(c); (4) unjust enrichment under Michigan common law; (5) dilution under Michigan common law and (6) violation of the Michigan Consumer Protection Act, MICH.COMP.LAWS § 445.901.

Justballs is a Delaware corporation having its principal place of business in Kingston, New Jersey. Sports Authority represents, and Justballs does not deny, that it is a national retailer of sporting goods and equipment. It operates primarily via a web site on the internet. Sports Authority is a retail sporting goods retailer which distributes, promotes and sells "sporting goods and related items, including all types of balls, ball games and toys relating to sports, fitness and recreation." Complt. at ¶ 8. Sports Authority sells its goods at its retail stores and on the internet. Id. at ¶¶ 7-8. Sports Authority owns forty federally registered service marks featuring the word "Authority," and has thirteen pending applications. See Complt. at ¶ 12 & Ex. A.

II. STANDARD OF REVIEW

When a defendant challenges personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), the plaintiff bears the burden of establishing the existence of personal jurisdiction. See International Tech. Consultants, Inc. v. Euroglas S.A., 107 F.3d 386, 391 (6th Cir.1997). In the instant matter, because the Court did not conduct an evidentiary hearing on the matter of personal jurisdiction, Plaintiff must make only a prima facie showing, and the Court views the evidence in the light most favorable to Plaintiff. See Dean v. Motel 6 Operating L.P., 134 F.3d 1269, 1272 (6th Cir.1998); CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996). The Court notes that "in the face of a properly supported motion for dismissal, the plaintiff may not stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the court has jurisdiction." Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). The Court does not, however, consider facts proffered by the defendant that conflict with those offered by the plaintiff. See id. at 1459.

III. ANALYSIS

Plaintiff invokes the Court's subject matter jurisdiction under the Lanham Act, 15 U.S.C. § 1121. See Complt. at ¶ 6. Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), does not, however, provide for nationwide service of process on a defendant or otherwise address this Court's personal jurisdiction over Lanham Act defendants. Nor does any other applicable provision of the Lanham Act. Accordingly, the Court must analyze the personal jurisdiction issue presented by Defendant under Fed.R.Civ.P. 4(k), which provides:

(1) Service of summons or filing a waiver of service is effective to establish jurisdiction over the person of a defendant

(A) who could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located....

Fed.R.Civ.P. 4(k)(1)(A). Accord, Janmark, Inc. v. Reidy, 132 F.3d 1200, 1201 (7th Cir.1997). Therefore, in the present action, the Court is limited in its exercise of personal jurisdiction by constitutional principles of Due Process and the specific requirements of Michigan's long-arm statute.

Personal jurisdiction can be invoked either via general jurisdiction, where the defendant has "continuous and systematic" contact with the forum state, see Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 445-47, 72 S.Ct. 413, 96 L.Ed. 485 (1952), or via limited jurisdiction, where the subject matter of the lawsuit is related to the defendant's contacts with the forum state. See Nationwide Mut. Ins. Co. v. Tryg Int'l Ins. Co., 91 F.3d 790, 793 (6th Cir.1996).

In Michigan, courts have general jurisdiction over a corporation when it incorporates under Michigan laws, consents to be sued in Michigan, or carries on a "continuous and systematic part of its general business within the state." MICH. COMP.LAWS § 600.711. Although Justballs maintains that it does not have the substantial contacts with Michigan required for general jurisdiction and Sports Authority would disagree with this point, both parties opt to focus solely on whether Sports Authority can establish grounds for asserting limited jurisdiction.

As Michigan courts have repeatedly stressed, "[f]or limited personal jurisdiction to attach, the cause of action must arise from the circumstances creating the jurisdictional relationship between the defendant and the foreign state." Rainsberger v. McFadden, 174 Mich.App. 660, 662, 436 N.W.2d 412 (Mich.Ct.App. 1989) (citation omitted). A corporation is subject to the limited jurisdiction of the courts of Michigan if any of five designated relationships exist between the corporation and the state. See MICH.COMP.LAWS § 600.715.

The Michigan Supreme Court has construed Michigan's long-arm statute to bestow the broadest possible grant of personal jurisdiction consistent with due process. See Sifers v. Horen, 385 Mich. 195, 198-99, 188 N.W.2d 623 (Mich.1971). The determination of whether jurisdiction attaches under the Michigan long-arm statute thus requires a two-step analysis:

First, whether the exercise of limited personal jurisdiction violates the Due Process Clause of the Fourteenth Amendment of the United States Constitution. If not, then whether the rules of statutory construction support such an exercise of jurisdiction over defendants.

Walter v. M. Walter & Co., Inc., 179 Mich. App. 409, 412, 446 N.W.2d 507 (Mich.Ct. App.1989) (citations omitted) (per curiam). Under Michigan's long-arm statute, the state's jurisdiction extends to the limits imposed by federal constitutional Due Process requirements, and thus, the two questions become one. See Michigan Coalition of Radioactive Material Users, Inc. v. Griepentrog, 954 F.2d 1174, 1176 (6th Cir. 1992) (citation omitted); Green v. Wilson, 455 Mich. 342, 349-50, 565 N.W.2d 813 (Mich.1997).

In order to comply with the Due Process Clause, the plaintiff must establish that significant minimum contacts exist sufficient to satisfy "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (citation omitted). Drawing on the teachings of International Shoe, the Sixth Circuit has set forth three criteria that must be met before a court will exercise personal jurisdiction:

First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable. Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 150 (6th Cir.1997) (quoting Southern Mach. Co. v. Mohasco Indus., 401 F.2d 374, 381 (6th Cir.1968)). Accord, Rainsberger, 174 Mich.App. at 663, 436 N.W.2d 412 (citations omitted). A showing of the first criterion — that the defendant purposefully availed itself of the privilege of transacting business in the forum state or causing a consequence in the forum state — is essential. See LAK, Inc. v. Deer Creek Enter., 885 F.2d 1293, 1300 (6th Cir.1989) (citations omitted).

The next part of the Due Process inquiry involves whether the plaintiff's cause of action arose from the defendant's activities in the forum state. See Jeffrey v. Rapid Am. Corp., 448 Mich. 178, 186, 529 N.W.2d 644 (Mich.1995). Finally, due process also requires that the exercise of personal jurisdiction be reasonable.² Reasonableness is a function of numerous factors, including:

... the burden on the defendant, the forum State's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quotations omitted).

1. Purposeful Availment

Under the first prong of the Due Process inquiry, the Court must determine whether Defendant purposefully availed itself of the privilege of conducting business or causing consequences in Michigan. The Supreme Court expressed that the "`purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts." Burger King, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1...