Tonka Corp. v. TMS Entertainment, Inc., Civ. No. 4-84-1015.

• Decision Date: 20 May 1985
• Docket Number: Civ. No. 4-84-1015.
• Citation: 638 F. Supp. 386
• Parties: TONKA CORPORATION, Plaintiff, v. TMS ENTERTAINMENT, INC., Defendant.
• Court: U.S. District Court — District of Minnesota

638 F. Supp. 386

TONKA CORPORATION, Plaintiff, v. TMS ENTERTAINMENT, INC., Defendant.

Civ. No. 4-84-1015.

United States District Court, D. Minnesota, Fourth Division.

May 20, 1985.

D. Randall King, Michael L. Mau, Merchant, Gould, Smith, Edell, Welter & Schmidt, St. Paul, Mn., for plaintiff.

Gary J. Gordon, Julie A. Williams, Cragg, Bailly, Gordon & McCollum, Ltd., Minneapolis, Mn., for defendant.

MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on defendants motion to dismiss for lack of personal jurisdiction and improper venue; or in the alternative to transfer this case to the United States District Court for the Central District of California. The Court will transfer this case to the Central District of California.

FACTS

Plaintiff Tonka Corporation is a Minnesota corporation which has Spring Park, Minnesota as its principal place of business. Plaintiff manufactures children's toys, and is famous for its Tonka trucks. Plaintiff's most recent creations are robot characters that convert to vehicles. Plaintiff manufactures and markets these toys under the trademark "GOBOTS" and "GOBOTS MIGHTY ROBOTS MIGHTY VEHICLES" (hereafter GOBOTS). Plaintiff introduced its GOBOTS in September of 1983 and began selling the GOBOTS in December of 1983. Since introducing GOBOTS, plaintiff states that it has spent millions of dollars advertising the GOBOTS trademark, including the production and syndication of a television show based on the robot characters. GOBOTS have been a phenomenal success.

Defendant TMS Entertainment, Inc. is a California corporation with its principal place of business in Los Angeles, California. Defendant's business consists of the production and selling of children's television shows. The television show in controversy is defendant's program "MIGHTY ORBOTS." Defendant has also filed for 14 separate trademark applications in the United States Patent and Trademark Office for MIGHTY ORBOTS trademarks on a variety of products.

Plaintiff asserts that defendant's activities involving MIGHTY ORBOTS constitute false designation of origin, trademark infringement, unfair competition, and deceptive trade practices with respect to plaintiff's GOBOTS.

Prior to September, 1984, defendant began negotiating with the American Broadcasting Company (ABC) regarding the licensing of defendant's television show MIGHTY ORBOTS. The negotiations between defendant and ABC took place in Los Angeles and New York. Defendant and ABC did eventually reach an agreement and subsequently ABC made the program MIGHTY ORBOTS available to its local affiliates nationwide. The local ABC affiliate in the Twin Cities area, KSTP Channel 5, began airing MIGHTY ORBOTS on Saturday morning, September 8, 1984. As of February 15, 1985, KSTP had aired MIGHTY ORBOTS for 23 consecutive Saturday mornings.¹ The average viewing audience for each broadcast of MIGHTY ORBOTS during this period, according to plaintiff, has been 30,333 households. (Plaintiff bases its calculation on Arbitron ratings of viewership.) Plaintiff reasons that each household viewing MIGHTY ORBOTS constitutes one separate trademark infringement in Minnesota. Thus, plaintiff concludes that defendant has infringed plaintiff's trademark on 697,659 separate occasions from September 8, 1984 until February 15, 1985. Plaintiff also states that each broadcast of MIGHTY ORBOTS is accompanied by advertising and television listings for the program.

Aside from the broadcasting of its program MIGHTY ORBOTS, defendant has no other contacts with the State of Minnesota. According to the affidavit of defendant's executive vice president, defendant has no offices, employees, or bank accounts in Minnesota. Further, defendant does not advertise or solicit business in Minnesota. Finally, no part of the creation or production of MIGHTY ORBOTS took place in Minnesota, and neither did any of the negotiations between defendant and ABC take place in Minnesota. After plaintiff commenced this lawsuit, officers of defendant did make one trip to Minnesota for settlement negotiations. Aside from settlement negotiations and the airing of MIGHTY ORBOTS on Minnesota televisions, defendant has no contacts with Minnesota.

DISCUSSION

Personal Jurisdiction

Analyzing the issue of personal jurisdiction is generally a two step process. First, the Court must determine whether the facts satisfy the applicable state long arm statute. Second, the Court must determine whether the exercise of personal jurisdiction is consistent with the requirements of due process. E.g., Scullin Steel Company v. National Railway Utilization Corp., 676 F.2d 309, 312 (8th Cir. 1982).

Plaintiff asserts that it has satisfied two Minnesota long arm statutes: Minn.Stat. §§ 303.13 and 543.19. Under Minn.Stat. § 303.13, subd. 1(3), a foreign corporation is subject to service of process if it "commits a tort in whole or in part in Minnesota against a resident of Minnesota...." Similarly, Minn.Stat. § 543.19, subd. 1(c) states that personal jurisdiction exists over a foreign corporation if it "commits any act in Minnesota causing injury or property damage. ..." Both parties point out that the Minnesota long arm statutes intend to extend jurisdiction over foreign corporations to the maximum extent consistent with due process. E.g., Land-O-Nod Co. v. Bassett Furniture Industries, 708 F.2d 1338, 1340 (8th Cir.1983); Vikse v. Flaby, 316 N.W.2d 276, 281 (Minn.1982).

Both parties also agree that in trademark infringement cases, the alleged wrong takes place where the "passing off" occurs, i.e., where customer buys a product from one company in the mistaken belief that the product was that of another company. Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 639 (2d Cir.), cert. denied, 352 U.S. 871, 77 S.Ct. 96, 1 L.Ed.2d 76 (1956). Applying the concept to the case at bar, the parties are again in accord that the alleged passing off occurs wherever viewers watch the program MIGHTY ORBOTS. Thus, the passing off takes place throughout the country, including Minnesota. Plaintiff further states that the occurrences of trademark infringement taking place in Minnesota are torts. Citing 1 J. Gilson, Trademark Protection and Practice § 1.04 (1984); see also Honda Associates, Inc. v. Nozawa Trading, Inc., 374 F.Supp. 886, 888 (S.D.N.Y.1974). Plaintiff also alleges in its complaint that the broadcasts of defendant's program in Minnesota constitute unfair competition and deceptive trade practices, both torts. Plaintiff concludes that because defendant has committed tortious acts in Minnesota, the Minnesota long arm statute provides for jurisdiction over defendant.²

Although defendant does mention the Minnesota long arm statutes, defendant does not argue that plaintiff has failed to meet the requirements of those statutes. Instead, defendant argues that the Court requiring defendant to defend a lawsuit in Minnesota would violate due process. In order for a court to constitutionally exercise personal jurisdiction over a non-resident defendant, defendant must have sufficient contacts with the forum state so that "maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citation omitted). In Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958), the Supreme Court observed that there must be "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." In a recent major pronouncement on jurisdiction, the Supreme Court held that the defendant's connection with the forum state must be "such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). The party seeking to invoke the jurisdiction of a federal court bears the burden of establishing that jurisdiction exists once jurisdiction has been challenged. Scullin Steel Company, 676 F.2d at 311 (8th Cir.1982).

The United States Court of Appeals for the Eighth Circuit has delineated five factors for courts to consider in evaluating the issue of personal jurisdiction:

(1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties.

Land-O-Nod, 708 F.2d at 1340. Factors four and five are of secondary importance. Land-O-Nod, 708 F.2d at 1340. The major focus of the inquiry "is `the relationship among the defendant, the forum, and the litigation.'" Land-O-Nod, 708 F.2d at 1340, quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977).

Defendant argues that it does not have sufficient contacts with Minnesota to justify a court sitting in Minnesota to assert personal jurisdiction over it. Defendant points out that it does not have a license to do business in Minnesota, nor does it transact business here. Neither does defendant advertise in or solicit business from Minnesota. Defendant does not have any bank accounts in Minnesota. Except for an attempt to settle this case, defendant has never sent any of its employees to Minnesota. Defendant concludes that the only conceivable contact it has with Minnesota is the broadcasting of MIGHTY ORBOTS by local ABC affiliates.

Plaintiff attempts to dramatize the extent of defendant's contacts by calculating the number of Minnesota viewers who have seen MIGHTY ORBOTS, i.e., approximately 700,000 as of February 15, 1985. Plaintiff also claims that defendant has additional contacts with Minnesota because defendant has attempted to gain trademark rights in Minnesota. Plaintiff's claim is...