Tomra of North America v. Environmental Products

• Decision Date: 31 March 1998
• Docket Number: No. 3:97CV1377(GLG).,3:97CV1377(GLG).
• Citation: 4 F.Supp.2d 90
• Parties: TOMRA OF NORTH AMERICA, INC., Plaintiff, v. ENVIRONMENTAL PRODUCTS CORP., Defendant/Counterclaimant, v. TOMRA SYSTEMS ASA and Tomra of North America, Inc., Counterclaimed Defendants.
• Court: U.S. District Court — District of Connecticut

Page 90

4 F.Supp.2d 90

TOMRA OF NORTH AMERICA, INC., Plaintiff, v. ENVIRONMENTAL PRODUCTS CORP., Defendant/Counterclaimant, v. TOMRA SYSTEMS ASA and Tomra of North America, Inc., Counterclaimed Defendants.

No. 3:97CV1377(GLG).

United States District Court, D. Connecticut.

March 31, 1998.

J. Daniel Sagarin, Elias A. Alexiades, Hurwitz & Sagarin, Milford, CT, Walter F. Garigliano, Monticello, NY, for Plaintiff.

Everett E. Newton, Francis J. Brady, Murtha, Cullina, Richter & Pinney, Hartford, CT, Robert D. Litowitz, Lisa F. Peller, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, DC, Grant H. Miller, Jr., Law Offices of Grant H. Miller, Jr., West Hartford, CT, Timothy J. Duggan, Duggan, Caccavaro & Ciapciak, Norwood, MA, for Defendant.

Memorandum Decision

GOETTEL, District Judge.

This is a trade dress infringement action brought under the Lanham Act, 15 U.S.C. § 1051 et seq., by Tomra of North America, Inc. ("TNA"), against Environmental Products Corporation ("Envipco"). TNA charges Envipco with misappropriation of its trade dress for its reverse vending machines.¹ Envipco and TNA are major competitors in the sale of reverse vending machines throughout the United States.

Envipco answered the complaint and counterclaimed against TNA and its Norwegian parent corporation, Tomra Systems ASA ("Tomra"), seeking a declaratory judgment that the "Tomra trade dress" does not qualify for trade dress protection. In response, counterclaimed-defendant Tomra filed a Fed. R.Civ.P. 12(b)(2) motion to dismiss, asserting lack of personal jurisdiction. For the reasons discussed below, we deny Tomra's motion to dismiss without prejudice to its being renewed at a later date.

Discussion

Envipco's Prima Facie Burden

Lack of personal jurisdiction is properly raised by a motion to dismiss. In re Perrier Bottled Water Litigation, 754 F.Supp. 264, 268 (D.Conn.1990). When a defendant challenges personal jurisdiction by a motion to dismiss, the burden is on the plaintiff, in this case Envipco, to prove personal jurisdiction. Metropolitan Life Insur. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir.), cert. denied, ___ U.S. ___, 117 S.Ct. 508, 136 L.Ed.2d 398 (1996). Because the parties have not yet engaged in jurisdictional discovery and because an evidentiary hearing has not been held, Envipco is required only to make a prima facie showing of personal jurisdiction. See A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79 (2d Cir.1993); Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 196 (2d Cir.), cert. denied, 498 U.S. 854, 111 S.Ct. 150, 112 L.Ed.2d 116 (1990); CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir.1986); Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985). At this preliminary stage in the litigation, Envipco's prima facie burden may be met by good faith allegations in the pleadings. Metropolitan Life, 84 F.3d at 566; Ball, 902 F.2d at 197.

Tomra argues that Envipco has not met this burden in that it nowhere alleges that Tomra transacted business in Connecticut² or that it is otherwise subject to jurisdiction under Connecticut's long-arm statute.

For purposes of ruling on Tomra's motion to dismiss, we accept as true the allegations in Envipco's counterclaim, and must resolve all factual disputes in Envipco's favor. Cut-Co Indus., 806 F.2d at 365; see also 5A Wright & Miller, Federal Practice & Procedure § 1351 (1997 Supp.); 2 Moore's Federal Practice 3d § 12.31[5] (1997).

The Jurisdictional Allegations

In its counterclaim, Envipco alleges that Tomra, a Norwegian corporation with its principal place of business in Norway, is the owner of the trade dress at issue. It asserts that TNA, a domestic corporation "related" to Tomra, has its principal place of business in Connecticut and holds itself out as licensed to use the intellectual property rights of Tomra throughout the United States. No other jurisdictional facts are alleged.

Because of the interrelationship between the declaratory judgment action and the trade dress claims in the original complaint, we also consider the allegations concerning Tomra in TNA's complaint. TNA states that Tomra, as the parent of TNA, manufactures all of the reverse vending machines that TNA exclusively markets, sells, leases, and distributes throughout North America. TNA states that, for over twenty-five years, Tomra has engaged in the manufacture and sale of high quality reverse vending machines, and that these machines have been marketed and sold in interstate commerce in the United States since at least 1986. TNA asserts that Tomra is the largest manufacturer of reverse vending machines sold in the United States and around the world, and that TNA is the leader in sales of reverse vending machines to supermarkets in the United States.

Jurisdiction in a Federal Question Case

In this case, the court's jurisdiction is based upon the existence of a federal question under the Lanham Act.³ The Lanham Act does not provide for national service of process. See Hershey Pasta Group v. Vitelli-Elvea Co., 921 F.Supp. 1344, 1346 (M.D.Pa.1996). In a federal question case involving a foreign defendant, where the federal statute does not provide for national service of process, a federal court must apply the forum state's personal jurisdiction rules. PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir.1997). Thus, in this case, we look to the law of Connecticut, which applies a two-tiered approach to determining whether personal jurisdiction exists over a foreign corporation. First, the court must determine whether the appropriate state long-arm statute reaches the foreign corporation. Second, the court must determine whether such statutory reach offends the constitutional due process requirements of minimum contacts and reasonableness. See Apolinario v. Avco Corp., 561 F.Supp. 608, 610 (D.Conn.1982); Thomason v. Chemical Bank, 234 Conn. 281, 295, 661 A.2d 595 (1995). The question of whether personal jurisdiction may be imposed turns on the facts of each case. Eutectic Corp. v. Curtis Noll Corp., 342 F.Supp. 761, 762 (D.Conn. 1972).

Connecticut's Long-Arm Statute

Envipco relies on Connecticut's long-arm statute, Conn.Gen.Stat. § 33-411(c)(3), as the basis for this court's jurisdiction over Tomra. That section was repealed effective January 1, 1997, and a new section 33-929(f)(3), using identical language, was enacted.⁴ Section 33-929(f)(3) provides in relevant part that

(f) Every foreign corporation shall be subject to suit in this state, by a resident of this state or by a person⁵ having a usual place of business in this state, whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commence, on any cause of action arising as follows: ... (3) out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers.....

TNA alleges that Envipco is registered to do business in the state of Connecticut with its place of business in Naugatuck, Connecticut. Accordingly, because Envipco has a usual place of business in the state, subsection (f) provides an avenue for jurisdiction for claims brought by Envipco.

Section 33-929(f), unlike section 33-929(e),⁶ does not require that a party transact business within the state to be subject to suit nor does it require a causal connection between the plaintiff's cause of action and the defendant's presence in the state. Thomason v. Chemical Bank, 234 Conn. at 295-97, 661 A.2d 595; Lombard Bros., Inc. v. General Asset Management Co., 190 Conn. 245, 253-54, 460 A.2d 481 (1983). It requires only "a nexus between the cause of action alleged and the conduct of the defendant within the state." Whelen Engineering Co. v. Tomar Electronics, Inc., 672 F.Supp. 659, 661-62 (D.Conn.1987) (finding that a foreign manufacturer who distributed its products exclusively through a third-party retailer was subject to jurisdiction under Connecticut's long-arm statute in a trademark infringement case); Fuehrer v. Owens-Corning Fiberglas Corp., 673 F.Supp. 1150, 1155 (D.Conn.1986); Spahl v. Raymark Industries, No. CV 9550359, 1996 WL 798746 at *1 (Conn.Super. Sept.9, 1996). Furthermore, under section 33-929(f)(3), the fact that the foreign corporation's only contact with the state is through an independent contractor or distributor does not bar personal jurisdiction. See Whelen Engineering, supra; Natale v. Development Associates, Inc., No. CV-92-67349-S, 1993 WL 284676 at *4 (Conn.Super. July 23, 1993). Rather, the requirement of subpart (c) is that the foreign corporation produce, manufacture, or distribute goods with the reasonable expectation that they will be used or consumed in Connecticut. Under this section, consistent with the constitutional demands of due process, it is the totality of the party's conduct and its connection with Connecticut that must be considered on a case-by-case basis to determine whether that party should have reasonably anticipated being haled into court in Connecticut. Thomason v. Chemical Bank, 234 Conn. at 291-92, 661 A.2d 595; Frazer v. McGowan, 198 Conn. 243, 249, 502 A.2d 905 (1986).

From the pleadings alone, there are sufficient facts to support a prima facie case of personal jurisdiction against Tomra. The pleadings state that Tomra manufactured all of the reverse vending machines that were marketed throughout the United States by its subsidiary TNA; that Tomra is the largest manufacturer of such machines sold in the United States; and that its machines have been sold in interstate commerce in the United States for twelve years. TNA, its exclusive distributor in the United States,...