Steuben Foods, Inc. v. Oystar Grp.

• Decision Date: 14 May 2013
• Docket Number: 10-CV-780S
• Court: U.S. District Court — Western District of New York
• Parties: STEUBEN FOODS, INC., Plaintiff, v. OYSTAR GROUP, OYSTAR NORTH AMERICAN-EDISON, INC., OYSTAR HAMBA, OYSTAR USA INC., HAMBA FILLTEC GMBH & CO.KG, GTP COMPANIES, LTD., and KAN-PAK, LLC, Defendants.

STEUBEN FOODS, INC., Plaintiff,

v. OYSTAR GROUP, OYSTAR NORTH AMERICAN-EDISON, INC., OYSTAR HAMBA,OYSTAR USA INC., HAMBA FILLTEC GMBH & CO.KG, GTP COMPANIES, LTD., and KAN-PAK, LLC, Defendants.

10-CV-780S

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

Dated: May 14, 2013

DECISION AND ORDER

I. INTRODUCTION

Plaintiff commenced this action in September 2010 seeking damages and injunctive relief for Defendants' alleged violation of six patents held by Plaintiff regarding equipment and processes for the aseptic bottling and packaging of food and drink products. Defendant Kan-Pak, LLC ("Kan-Pak") moves this Court to dismiss the complaint as against it pursuant to sections 12(b)(2), (3) and (6) of the Federal Rules of Civil Procedure. For the reasons that follow, Kan-Pak's motion is denied in its entirety.

II. BACKGROUND

Plaintiff originally commenced this action against Defendant Oystar USA, Inc. in September 2010. (Compl., Docket No. 1.) Plaintiff filed amended complaints in August 2011, May 2012, and January 2013, adding as Defendants the Oystar Group, Oystar North America-Edison, Inc., Oystar Hamba, and Hamba Filltec GMBH & CO.KG to Defendant Oystar U.S.A. (collectively "the Oystar Defendants"), as well as Defendants GTP Companies, Ltd. ("GTP") and Kan-Pak LLC. (Am. Compl., Docket No. 23; Second Am.Compl., Docket No. 48; Third Am. Compl., Docket No. 63.) In the Third Amended Complaint, Plaintiff alleges that it is the exclusive owner of six valid and subsisting patents for processes and apparatuses related to aseptic bottling of aseptically sterilized foodstuffs. (Third Am. Compl. ¶¶ 75-93.) Four causes of action are asserted: (1) the Oystar Defendants and GTP have infringed and are continuing to directly infringe one or more of Plaintiff's patents, and are also liable for contributory infringement and inducing infringement; (2) Kan-Pak has infringed and is directly infringing one or more of Plaintiff's patents; (3) Plaintiff is entitled to injunctive relief to prevent the further infringement by the Oystar Defendants and GTP; and (4) Plaintiff is entitled to injunctive relief to prevent the further infringement of Kan-Pak.

The Oystar Defendants previously moved for dismissal of the complaint as against them for lack of personal jurisdiction and failure to state a claim in September 2011, (Docket No. 24), and GTP followed suit with a similar motion in December of that year. (Docket No. 37.) Both motions were denied in their entirety by order of this Court dated May 21, 2012. (Docket No. 47.) Presently before the Court is Defendant Kan-Pak's motion to dismiss or, alternatively, sever the claims asserted against it and transfer the matter to the District of Kansas. (Docket No. 71.)

III. DISCUSSION

A. Motion to Dismiss

Kan-Pak contends that the complaint must be dismissed as against it because: (1) the Court lacks personal jurisdiction over it; (2) Kansas is the only proper venue under both the general federal venue statute and the patent venue statute; and (3) Plaintiff failed toallege sufficient facts in the Third Amended Complaint to state a claim against Kan-Pak. The Court has considered these arguments and finds each to be without merit.

1. Personal Jurisdiction

Generally, "[w]hen deciding issues in a patent case, a district court applies the law of the circuit in which it sits to nonpatent issues and the law of the Federal Circuit to issues of substantive patent law." Paone v. Microsoft Corp., 881 F. Supp. 2d 386, 393-94 (E.D.N.Y. 2012); see Invitrogen Corp. v. Biocrest Mfg. L.P., 424 F.3d 1374, 1378-79 (Fed. Cir. 2005) (Federal Circuit law applies to "issues of substantive patent law and certain procedural issues pertaining to patent law"). With respect to personal jurisdiction:

A United States district court may exercise personal jurisdiction over a defendant if the defendant "is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located." Fed. R. Civ. P. 4(k)(1)(A). The district court's exercise of jurisdiction over an out-of-state defendant must be consistent with both the forum state's long-arm statute and the requirements of due process.

Radio Sys. Corp. v. Accession, Inc., 638 F.3d 785, 788-89 (Fed. Cir. 2011). The Federal Circuit will "defer to the interpretation of a state's long-arm statute given by that state's highest court, particularly whether or not the statute is intended to reach the limit of federal due process." Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1409 (Fed Cir. 2009). Federal Circuit law, rather than regional circuit law, however, applies to issues of compliance with federal due process. Id. at 1409-10; see generally JetBlue Airways Corp. v. Helferich Patent Licensing, LLC, - F. Supp. 2d -, 2013 WL 713929, *4 (E.D.N.Y. Feb. 28, 2013) (test for personal jurisdiction in Federal Circuit mirrors the test employed by the Second Circuit).

Further, where, as here, the district court relies solely on the pleadings andsupporting affidavits, the burden on a plaintiff facing a motion to dismiss is to establish only a prima facie showing of personal jurisdiction. Touchcom, Inc., 574 F.3d at 1410; see Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). In determining whether that burden has been met, all allegations in the complaint are accepted as true and all factual conflicts are resolved in the plaintiff's favor. Touchcom, Inc., 574 F.3d at 1410; Robinson, 21 F.3d at 507.

There are two types of personal jurisdiction that may be applied: "general or all-purpose jurisdiction, and specific or case-linked jurisdiction." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851, 180 L. Ed. 2d 796 (2011); AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358, 1360 (Fed. Cir. 2012). A court may assert general jurisdiction over a foreign corporation to hear any claim against it where the corporation's affiliations with the state are "so continuous and systematic as to render them essentially at home in the forum [s]tate." Goodyear Dunlop Tires Operations, 131 S. Ct. 2846, 2851(internal quotation marks omitted). Specific jurisdiction exists where there is a link between the forum and the underlying controversy. Id. Here, Plaintiff contends that Kan-Pak consented to the general jurisdiction of New York courts under N.Y. CPLR § 301 by registering to do business in this state. (Pl's Mem of Law in Opp'n at 8-10, Docket No. 76; Decl. of Joseph L. Stanganelli, Esq. ¶ 2 Ex A (certification of Kan-Pak's 2008 New York State Registration, active as of March 7, 2013), Docket Nos. 76-2, 76-3; Third Am. Compl. ¶ 70.)

Under New York law, a foreign corporation must, as part of the application for authority to do business in the state, designate the New York Secretary of State "as its agent upon whom process against it may be served" and provide an address to which acopy of any process shall be mailed. N.Y. Business Corporation Law § 1304(6); Rockefeller Univ. v. Ligand Pharmaceuticals Inc., 581 F. Supp. 2d 461, 465 (S.D.N.Y. 2008); see N.Y. Business Corporation Law § 304 (a), (b) (no foreign corporation may be authorized absent the designation of the secretary of state as its agent). After this, the "actions in which [the Secretary of State] is to represent the corporation are not limited." Rockefeller Univ., 581 F. Supp. 2d at 466 (quoting Bagdon v. Phil. & Reading Coal & Iron Co., 217 N.Y. 432, 436-37, 11 N.E. 1075 (N.Y. 1916) (Cardozo, J.)). Kan-Pak admits that it is registered to do business in New York, but argues that this "legal fiction[]" alone is insufficient to establish personal jurisdiction. (Kan-Pak Reply Mem of Law at 2-5, Docket No. 77.)

Contrary to Kan-Pak's argument, "[i]t is well-settled¹ under New York law that registration under [N.Y. Business Corporation Law] § 1304 subjects foreign companies to personal jurisdiction in New York." STX Panocean (UK) Co., Ltd. v. Glory Wealth Shipping Pte Ltd., 560 F.3d 127, 131 (2d Cir. 2009); Hunter v. Deutsche Lufthansa AG, 863 F. Supp. 2d 190, 201 (E.D.N.Y. 2012); Rockefeller Univ., 581 F. Supp. 2d at 465-66; Doubet LLC v. Trustees of Columbia Univ. in City of N. Y., 99 A.D.3d 433, 434-35, 952 N.Y.S.2d 16, 18 (N.Y.A.D. 1st Dep't 2012); Augsbury Corp. v. Petrokey Corp., 97 A.D.2d 173, 175-76, 470 N.Y.S.2d 787, 789 (N.Y.A.D. 3d Dep't 1983).

Pursuant to N.Y. Civil Practice Law and Rules § 301, "[a] court may exercise

... jurisdiction over persons, property, or status as might have been exercised heretofore." N.Y. C.P.L.R. § 301. For more than sixty years, New York courts have determined that general jurisdiction may be asserted over a corporation solely on the basis that it has registered to do business in the forum.

Cannon v. Newmar Corp., 210 F. Supp. 2d 461, 463 n. 2 (S.D.N.Y. 2002); see Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 175, 60 S. Ct. 153, 84 L. Ed. 167 (1939) (citing Bagdon, 217 N.Y. at 436-37) (statute requiring designation is constitutional, and constitutes consent to general jurisdiction). Thus, "[t]he privilege of doing business in New York is accompanied by an automatic basis for personal jurisdiction." Augsbury Corp., 97 A.D.2d at 176. Further, because the designation of the Secretary of State is required by § 1304(6), the fact that Kan-Pak has not designated an optional additional registered agent pursuant to § 1304(7) is of no moment. Rockefeller Univ., 581 F. Supp. 2d at 465 (noting that the application "permits, but does not require" the designation of a registered agent); (see Kan-Pak's Reply Mem of Law at 4.)

Kan-Pak argues that the Second Circuit's decision in STX Panocean is inapplicable here because it addresses whether a defendant may be "found" in New York for the purposes of Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. (Kan-Pak's Reply Mem of Law at 4-5.) There, the Second Circuit determined that an order of attachment under Rule B was properly vacated because the...