v. K-Va-T Food Stores, Inc.

• Citation: 975 F.Supp.2d 993
• Decision Date: 27 September 2013
• Docket Number: Case No. 4:12CV01505AGF.
• Parties: N.C.C. MOTORSPORTS, INC., Plaintiff, v. K–VA–T FOOD STORES, INC., Defendant.
• Court: U.S. District Court — Eastern District of Missouri

975 F.Supp.2d 993

N.C.C. MOTORSPORTS, INC., Plaintiff,

v.K–VA–T FOOD STORES, INC., Defendant.

Case No. 4:12CV01505AGF.

United States District Court,

E.D. Missouri,

Eastern Division.

Sept. 27, 2013.

Joel R. Samuels, Rudolph A. Telscher, Jr., Harness and Dickey, St. Louis, MO, for Plaintiff.

Benjamin J. Hodges, Paul A. Maddock, Senniger Powers, St. Louis, MO, for Defendant.

MEMORANDUM AND ORDER

AUDREY G. FLEISSIG, District Judge.

This is an action for copyright infringement brought pursuant to the Copyright Act, 17 U.S.C. § 502 et seq. Now before the Court is Defendant K–VA–T Food Stores, Inc.'s motion to dismiss Plaintiff N.C.C. Motorsports, Inc.'s complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and 28 U.S.C. § 1391(c). For the reasons set forth below, the motion will be granted.

I. BACKGROUND

For purposes of this motion, the complaint and attachments thereto establish the following:

Plaintiff, a Missouri corporation, owns a copyright on a design for a shopping cart vehicle (the “Registered Design”). Robert H. Unnerstall, Sr. obtained a Certificate of Registration VA 291–601 for the Registered Design on July 16, 1986, and assigned the copyright in the Registered Design to Plaintiff on July 22, 2012.

On October 1, 1993, Plaintiff leased a shopping cart vehicle (the “Big Cart”) based upon the Registered Design to Defendant, a Virginia corporation headquartered in Abingdon, Virginia, that operates a chain of grocery stores in Kentucky, Tennessee, and Virginia. Defendant used the Big Cart to advertise at promotional events such as auto races.

The parties' lease contained a choice of law provision, stating “[t]his lease shall be construed and interpreted under the laws of the State of Missouri.” Doc. No. 1–4 at 2. In addition, Paragraph 16 of the lease stated: “[Defendant] specifically acknowledges that [Plaintiff] has a copyright covering ‘Big Cart’ and [Defendant] specifically agrees not to infringe on [Plaintiff's] copyright.” Id. at 6. Paragraph 11 of the lease further provided that “[Defendant] shall not use or operate or permit the use or operation of ‘Big Cart’ in the [Plaintiff's] market area.” Id. at 5. Under the lease Defendant made monthly payments to Plaintiff, and Plaintiff deposited the payments in a Missouri bank. Plaintiff contends that the lease was executed in Missouri, but Defendant asserts it signed and executed the lease in Virginia.

On November 16, 2010, Defendant hired a third party to design and build a Food City Shopping Cart (the “FCS Cart”) in Abingdon, Virginia. The FCS Cart was completed on February 21, 2011, and on March 28, 2011, Defendant unilaterally terminated its lease on the Big Cart. Defendant used the FCS Cart as it had used the Big Cart for promotional purposes at auto races, as shown in photo galleries on its websites, http:// www. foodcityracing. com and http:// www. foodcity. com/ community/ racing. These sites are accessible to Missouri citizens through use of the Internet. In addition, the record indicates that the sites are informational and promotional but not interactive. It is undisputed that Defendant generally makes no sales through these sites and has not sold to Missouri residents by way of these sites. Nor is there any indication that the sites link to either another of Defendant's sites or to a third party site for purposes of making sales. Defendant does not operate or own stores in Missouri, nor has it displayed the Big Cart or the FCS Cart in Missouri.

Following the termination of the lease, Plaintiff brought suit against Defendant in this Court alleging infringement of Plaintiff's assigned copyright in the Big Cart. Defendant challenges this Court's exercise of personal jurisdiction.

II. ARGUMENTS OF THE PARTIES

Plaintiff alleges a single count of copyright infringement with respect to its Registered Design for the Big Cart. Specifically, Plaintiff alleges that Defendant's FCS Cart infringes the Big Cart copyright, that Defendant's access to the Big Cart under the lease gave rise to the alleged infringement, and that Defendant's infringing conduct harmed Plaintiff in Missouri. Plaintiff further alleges that the lease is a contract made in Missouri involving payments to a Missouri corporation deposited in a Missouri bank, and that it explicitly required that Defendant not infringe Plaintiff's copyright. Finally, Plaintiff alleges that the choice of law provision in the lease mandating the application of Missouri law permits this Court to exercise personal jurisdiction over Defendant.

In support of its motion to dismiss for lack of personal jurisdiction Defendant asserts that the lease is irrelevant because Plaintiff's claim is for copyright infringement rather than breach of the unilaterally terminated lease. Defendant also notes that the lease contained a choice of law provision mandating application of Missouri law, but did not contain a forum selection clause requiring suit in Missouri. Further, because the lease prohibited Defendant from using the Big Cart in Missouri, Defendant asserts that its only contacts with Missouri were its payments to Plaintiff under the lease. Defendant also asserts that because the allegedly infringing actions occurred outside Missouri, it lacks sufficient minimum contacts to be haled into a Missouri court. Additionally, Defendant also argues that Plaintiff cannot support its contention that the harm flowing from the alleged infringement occurred in Missouri or that Defendant specifically targeted its actions toward Missouri.¹

In response, Plaintiff asserts that the harm due to the copyright infringement is felt by the copyright holder in its home state, and therefore, that Defendant's infringement of its copyright on the Registered Design gave rise to harm in Missouri. Plaintiff also contends that the lease is relevant to the jurisdictional question because it is a Missouri contract made with a Missouri corporation and the lease payments were deposited in a Missouri bank. Although the lease has expired, Plaintiff notes that the allegedly infringing FCS Cart was built while the lease was in effect. With respect to other minimum contacts, Plaintiff asserts that Defendant's display of the FCS Cart at auto races in places other than Missouri and Defendant's website displaying images of the FCS Cart are promotional activities directed at a nationwide audience, including Missourians.

III. APPLICABLE LAW

To defeat a motion to dismiss for lack of personal jurisdiction, “the nonmoving party need[ ] only make a prima facie showing of jurisdiction.” Miller v. Nippon Carbon Co., Ltd., 528 F.3d 1087, 1090 (8th Cir.2008). This requires “a plaintiff [to] state sufficient facts in the complaint to support a reasonable inference that the defendant can be subjected to jurisdiction within the state.” Dairy Farmers of Am. v. Bassett & Walker Int'l, Inc., 702 F.3d 472, 474 (8th Cir.2012) (internal quotation omitted). The plaintiff has the burden of proving facts supporting personal jurisdiction. Viasystems, Inc. v. EBM–Papst St. Georgen GmbH & Co. KG, 646 F.3d 589, 592 (8th Cir.2011). But where, as here, the court “does not hold a hearing and instead relies on pleadings and affidavits, ... the court must look at the facts in the light most favorable to the [plaintiff], and resolve all factual conflicts in favor of that party.” Pangaea, Inc. v. Flying Burrito, LLC, 647 F.3d 741, 745 (8th Cir.2011) (internal quotation omitted).

In this case federal subject matter jurisdiction is predicated upon a federal statute. In such a case a federal district court cannot exercise personal jurisdiction over a defendant unless the statute at issue explicitly grants such jurisdiction or a state court in the forum state would have jurisdiction over that defendant. See Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104–05, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987); Janmark, Inc. v. Reidy, 132 F.3d 1200, 1201 (7th Cir.1997); Fed.R.Civ.P. 4(k)(1)(A). Ascertaining a state's power in a federal-question case seems incongruent but this is what Rule 4(k)(1)(A) requires unless a federal statute authorizes nationwide service which the Copyright Act does not. SeeRule 4(k)(1)(D); Janmark, 132 F.3d at 1201–02.

Because it is undisputed that the Copyright Act does not confer personal jurisdiction over Defendant, the personal jurisdiction analysis here requires two inquiries: whether the exercise of jurisdiction is proper under Missouri's long-arm statute, and whether it comports with the Due Process Clause of the Fifth Amendment.²See Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387–88 (8th Cir.1991). The Eighth Circuit recommends that courts undertake separate analyses of each area, which the undersigned shall do. Dairy Farmers, 702 F.3d at 475 (citing Bryant v. Smith Interior Design Grp., Inc., 310 S.W.3d 227, 231–32 (Mo.2010)).

A. The Missouri Long-arm Statute

The Missouri long-arm statute provides in relevant part:

Any person or firm, whether or not a citizen or resident of this state, or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such person, firm, or corporation, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of such acts: ...

(2) The making of any contract within this state;

(3) The commission of a tortious act within this state....

Mo.Rev.Stat. § 506.500(2, 3).

The Missouri long-arm statute operates “ ‘within the specific categories enumerated in the statutes to the full extent permitted by the Due Process Clause.’ ” Dairy Farmers, 702 F.3d at 475 (quoting State ex rel. Metal Serv. Ctr. of Ga., Inc. v. Gaertner, 677 S.W.2d 325, 327 (Mo.1984)). “Missouri courts have interpreted [the tort arm] of the long-arm statute to include extraterritorial acts of negligence producing actionable consequences in...