Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distributors Pty. Ltd.

• Decision Date: 23 March 1981
• Docket Number: No. 79-1392,79-1392
• Citation: 207 U.S. App. D.C. 375,209 USPQ 633,647 F.2d 200
• Parties: , 209 U.S.P.Q. 633 STABILISIERUNGSFONDS FUR WEIN et al., Appellants, v. KAISER STUHL WINE DISTRIBUTORS PTY. LTD., et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 200

647 F.2d 200

207 U.S.App.D.C. 375, 209 U.S.P.Q. 633

STABILISIERUNGSFONDS FUR WEIN et al., Appellants, v. KAISER STUHL WINE DISTRIBUTORS PTY. LTD., et al.

No. 79-1392.

United States Court of Appeals,

District of Columbia Circuit.

Argued Feb. 4, 1981.

On Motion to Strike Filed March 2, 1981.

Decided March 23, 1981.

Milo G. Coerper and James L. Dooley, Washington, D. C., for appellants.

Thomas E. Dorn, Chicago, Ill., with whom John F. Smith, Arlington, Va., was on brief, for appellees.

Jerry D. Voight, Washington, D. C., and Samuel C. Miller, III, Alexandria, Va., were on brief for amicus curiae, Patent, Trademark and Copyright Section of the Bar Ass'n of the District of Columbia, urging reversal of the District Court decision on Rule 19.

Before PECK ^*, Senior Circuit Judge, United States Court of Appeals for the Sixth Circuit, WILKEY and GINSBURG, Circuit Judges.

ORDER

PER CURIAM.

On July 9, 1980, appellants moved to strike portions of appellees' brief. A motions panel referred the matter to the panel assigned to hear and decide the appeal. On January 30, 1981, prior to oral argument, the court ordered:

Appellants' motion to strike appellees' discussion of D.C.Code § 13-423(b) is denied. The request is frivolous. Appellants seek jurisdiction over appellees under D.C.Code § 13-423, the District of Columbia's "long-arm" statute. Subsection (b) is an integral part of that statute, one that this court cannot ignore while considering appellants' arguments.

The requests to strike appellees' references to facts outside the record and to the Fed.R.Civ.P. 12(b)(6) motion, unresolved by the district court, are also denied. While appellants' motion is not frivolous in these respects, motions to strike, as a general rule, are disfavored ¹. The points raised in the motion might have been presented, concisely, in the reply brief. There was no need for appellants to burden this court with a motion to strike. We note at this time, however, that since the district court did not pass upon the motion to dismiss for failure to state a claim upon which relief can be granted, the court will not hear oral argument on that issue.

Before PECK, ^* Senior Circuit Judge for the United States Court of Appeals for the Sixth Circuit, WILKEY and GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

In this trademark infringement case, two German plaintiffs seek district court adjudication of their claims against an Australian wine producer, its Australian subsidiary, a New York importer, and a District of Columbia liquor store. The claims relate to sales of the Australian defendants' wine in the United States generally and in this District specifically. The district court held that it lacked personal jurisdiction over the Australian defendants. It then declared those defendants "indispensable parties." On that basis, it held that the action could not proceed solely against the New York and District of Columbia defendants. Accordingly, the district court dismissed the entire case. We reverse and direct reinstatement of the action as to all defendants. We hold that the District of Columbia long-arm statute authorizes adjudication of the claims against the Australian wine companies, and that the district court improperly dismissed the claims against the New York importer and District of Columbia retailer.

I. Facts

Zentralkellerei Badischer Winzergenossenschaften (ZBW) is a German cooperative association that produces and sells "Kaiserstuhl-Tuniberg" wines. Stabilisierungsfonds Fur Wein (SFW) is a German organization that maintains the quality and promotes the sale of German wines. ZBW and SFW assert that the names "Kaiserstuhl" and "Kaiserstuhl-Tuniberg" are common law certification marks ¹ designating wines from a particular region of Germany.

Barossa Co-operative Winery (Barossa) is an Australian corporation that produces wines labelled "Kaiser-Stuhl" and markets the wine in the United States. Barossa exports Kaiser-Stuhl wines to the United States through its wholly owned Australian subsidiary, Kaiser Stuhl Wine Distributors (Kaiser). Kaiser ships the wines to two exclusive United States importers, Victoire Imports Co. in San Francisco and Peartree Imports Co. in New York. Victoire distributes the wine in the western United States and Peartree, in the eastern part of the country. One of the east coast retailers that has purchased Australian Kaiser-Stuhl wine from Peartree is A & A Liquors, a District of Columbia liquor store that also sells German Kaiserstuhl-Tuniberg wine.

In October 1978, ZBW and SFW initiated this suit to halt the distribution of Australian wines bearing the Kaiser-Stuhl label. They sued Barossa, Kaiser, Peartree, and A & A Liquors in the United States District Court for the District of Columbia. Count I of the complaint alleged that defendants' distribution of Kaiser-Stuhl wine violated § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1976), infringed SFW's common law rights in the marks Kaiserstuhl and Kaiserstuhl-Tuniberg, and constituted unfair competition. Count II alleged that defendant Kaiser had wrongfully obtained registration of the Kaiser-Stuhl mark on the United States Supplemental Register, see 15 U.S.C. § 1091 (1976), by representing that the name Kaiser-Stuhl distinguished its wine from other wines. The plaintiff requested, inter alia, an injunction against further infringement and an order striking the name Kaiser-Stuhl from the Supplemental Register.

The Australian defendants, Barossa and Kaiser, moved to dismiss, pursuant to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction. The United States defendants, Peartree and A & A, moved to dismiss, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted. The district court agreed that it lacked jurisdiction over the Australian defendants and granted their 12(b)(2) motion. The court did not reach the Peartree and A & A 12(b)(6) motion. Instead, it held sua sponte, without benefit of briefs or argument, that the Australians were indispensable parties. It therefore dismissed the entire suit under Fed.R.Civ.P. 19(b). ² Plaintiffs appealed both determinations and the Patent, Trademark and Copyright Section of the Bar Association of the District of Columbia submitted an amicus curiae brief urging reversal of the Rule 19(b) determination. We address, first, the issue of adjudicatory authority over the Australian defendants and, second, the Rule 19(b) disposition. ³

II. Adjudicatory Authority Over the Australian Defendants

A motion to dismiss for lack of jurisdiction over the person requires inquiry at two levels. In United States jurisprudence, the outer boundaries of a court's authority to proceed against a particular person or entity is set for federal tribunals by the due process clause of the Fifth Amendment and for the state courts by the due process clause of the Fourteenth Amendment. ⁴ If due process limits are not exceeded, "judicial jurisdiction" may be said to exist. However, exercise of judicial jurisdiction is further conditioned on rules of "competence." These rules indicate the extent to which the political unit involved (nation or state) has chosen to assert adjudicatory authority. Rules of competence, found in statutes or court rules, may be coextensive with due process, or they may require connections between the defendant or the episode in suit and the forum beyond those due process commands. See Restatement (Second) of Conflict of Laws, Ch. 3, Introductory Note at 100-02 (1969) (defining and distinguishing the terms "judicial jurisdiction" and "competence"); cf. id. §§ 104, 105.

In this case, judicial jurisdiction in the constitutional sense concededly exists with respect to all defendants and no question is raised concerning the court's competence with respect to defendants Peartree and A & A Liquors. Defendants Kaiser and Barossa claim in support of the Rule 12(b)(2) dismissal that no rule of competence authorizes the district court to exercise judicial jurisdiction over them. However, counsel for the Australian defendants acknowledged at oral argument that requiring those companies to defend this action in the District of Columbia does not offend due process. Kaiser ships Barossa's wine to Peartree, a New York importer with exclusive authority to distribute the wine throughout the eastern part of the United States. The Australian defendants thus have arranged for introduction of their wine into the United States stream of commerce with the expectation (or at least the intention and hope) that their products will be shelved and sold at numerous local outlets in diverse parts of the country. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 567-568, 62 L.Ed.2d 490 (1980); Oswalt v. Scripto, Inc., 616 F.2d 191, 199-200 (5th Cir. 1980). As defendants recognize, therefore, the links between the claims in suit and the Australian defendants' arrangements to develop and serve a market in the United States make the district court here a fair and reasonable forum, within due process constraints, for the action plaintiffs have brought. ⁵

Turning to the contested issue, does an applicable rule of competence authorize the district court to hale the Australian defendants into this action? We believe the District of Columbia long-arm statute, particularly D.C.Code § 13-423(a)(1) (1973), provides such authorization. That provision authorizes the "exercise (of) personal jurisdiction over a person as to a claim for relief arising from the person's transacting any business in the District of Columbia."

We explain first why federal courts, in cases such as this one, refer to local statutes or rules governing competence. In some areas, Congress has delineated the reach of the federal courts the length of the court's arm with respect to nonresident defendants by providing for nationwide service of process...