Verizon Trademark Servs., LLC v. Producers, Inc., Case No. 8:10–cv–665–T–33EAJ.

• Decision Date: 25 August 2011
• Docket Number: Case No. 8:10–cv–665–T–33EAJ.
• Citation: 810 F.Supp.2d 1321
• Parties: VERIZON TRADEMARK SERVICES, LLC and Verizon Licencing Company, Inc., Plaintiffs, v. The PRODUCERS, INC.; Intercosmos Media Group, Inc. d/b/a DirectNIC.com; Directnic, Ltd.; Domain Contender, LLC; Sigmund J. Solares; Michael H. Gardner; Noah S. Lieske; and Does 1–10, Defendants.
• Court: U.S. District Court — Middle District of Florida

810 F.Supp.2d 1321

VERIZON TRADEMARK SERVICES, LLC and Verizon Licencing Company, Inc., Plaintiffs,

v.The PRODUCERS, INC.; Intercosmos Media Group, Inc. d/b/a DirectNIC.com; Directnic, Ltd.; Domain Contender, LLC; Sigmund J. Solares; Michael H. Gardner; Noah S. Lieske; and Does 1–10, Defendants.

Case No. 8:10–cv–665–T–33EAJ.

United States District Court, M.D. Florida,Tampa Division.

Aug. 25, 2011.

David J. Steele, Irvine, CA, Howard A. Kroll, Pasadena, CA, John Nicholas Muratides, Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Tampa, FL, Mimi L. Sall, Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Ft. Lauderdale, FL, for Plaintiffs.

Heather Nicole Jarrell, William J. Schifino, Jr., Joseph T. King, Williams, Schifino, Mangione & Steady, P.A., Jeffrey Carter Andersen, Bush Ross, P.A., Tampa, FL, for Defendants.

ORDER

VIRGINIA M. HERNANDEZ COVINGTON, District Judge.

This matter comes before the Court pursuant to Intercosmos Media Group, Inc., directNIC, LLC, and Domain Contender, LLC's Motion to Dismiss the Amended Complaint for Lack of Personal Jurisdiction (Doc. # 82), filed on October 28, 2010. Verizon Trademark Services, LLC and Verizon Licencing Company, Inc. (collectively, “Verizon”) filed a Response in Opposition to the Motion on November 12, 2010. (Doc. # 97). Intercosmos Media Group, Inc., directNIC, LLC, and Domain Contender, LLC (hereafter, “the IMG Defendants”) filed a Reply Memorandum on February 3, 2011. (Doc. # 128). For the reasons that follow, the Court grants the Motion to Dismiss.

I. Background

Verizon initiated this action against the IMG Defendants, among other defendants, on March 19, 2010, and filed an amended complaint (245 pages in length including exhibits), on October 7, 2010. (Doc. # 68). Verizon, a Delaware entity with its principal place of business in Arlington, Virginia, alleges that the IMG Defendants violated the Lanham Act, 15 U.S.C. § 1125(d), by cybersquatting. Essentially, Verizon contends that the IMG Defendants have violated Verizon's trademark and service mark rights by the registration of, trafficking in, and use of Verizon-related Internet second-level domain names without Verizon's authorization. (Doc. # 68).

The IMG Defendants each have their principal place of business in Louisiana and seek to be dismissed from this action on the basis of lack of personal jurisdiction.

II. Legal Standard

A court must dismiss an action against a defendant over which it has no personal jurisdiction. Smith v. Trans–Siberian Orchestra, 689 F.Supp.2d 1310, 1312 (M.D.Fla.2010) (citing Posner v. Essex Ins. Co., Ltd., 178 F.3d 1209, 1214 n. 6 (11th Cir.1999)). Whether the court has personal jurisdiction over a defendant is governed by a two-part analysis. Cable/Home Commc'n Corp. v. Network Prod., Inc., 902 F.2d 829, 855 (11th Cir.1990).

First, the court must determine whether the plaintiff has alleged facts sufficient to subject the defendant to Florida's long-arm statute. Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir.2000). “When a federal court uses a state long-arm statute, because the extent of the statute is governed by state law, the federal court is required to construe it as would the state's supreme court.” Lockard v. Equifax, Inc., 163 F.3d 1259, 1265 (11th Cir.1998).

Second, once the court has determined that the long-arm statute is satisfied, the court must determine whether the exercise of jurisdiction over the defendant comports with the Constitution's requirements of due process and traditional notions of fair play and substantial justice. Sculptchair, Inc. v. Century Arts, 94 F.3d 623, 626 (11th Cir.1996) (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). In assessing personal jurisdiction, each defendant's contacts with the forum state must be weighed individually. Calder v. Jones, 465 U.S. 783, 790, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984).

III. AnalysisA. Florida Long–Arm Statute

The burden-shifting scheme outlined in Walt Disney Co. v. Nelson, 677 So.2d 400 (Fla. 5th DCA 1996) applies in this case:

The burden of demonstrating the applicability of § 48.193 may initially be met by pleading facts within a jurisdictional basis contained in the statute. If the plaintiff has pled a prima facie case for jurisdiction, a simple motion to dismiss for lack of jurisdiction must fail, as a motion to dismiss without more, challenges only the facial sufficiency of the jurisdictional pleading. If, however, the defendant supplements the motion with an affidavit contesting jurisdiction, then the burden returns to the plaintiff who must, by affidavit or other sworn statement, prove a sufficient jurisdictional basis.

Id. at 402 (internal citations omitted); see also Future Tech. Today, Inc., 218 F.3d at 1249. When the plaintiff's complaint and supporting evidence conflict with the defendant's affidavits, the Court must construe all reasonable inferences in favor of the plaintiff. Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990); Meier ex rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir.2002).

In the amended complaint, Verizon alleges that personal jurisdiction over Intercosmos Media Group, Inc. (also known as “IMG”) and directNIC, LLC (also known as “DNLLC”) exists because IMG and DNLLC “conducted systematic and continuous business with Florida acting as part of a consolidated group of companies that operate the registrar business that uses the domain name directNIC.com. This consolidated group of companies has an office located in Tampa, Florida.” (Doc. # 68 at ¶¶ 8, and 11).

As for Domain Contender, LLC (also known as “DC”) Verizon alleges in the amended complaint, “This Court has personal jurisdiction over Domain Contender, because it has conducted systematic and continuous business with Florida.” ( Id. at ¶ 17).¹

The IMG Defendants have challenged Verizon's jurisdictional allegations by filing the affidavits of its Vice President. Thus, the burden has been shifted back to Verizon to prove a sufficient jurisdictional basis.

1. The IMG Defendants' Evidence

David Vinterella, the present Vice President of the IMG Defendants, filed two detailed affidavits that shed light on important corporate nuances in this case. (Doc. 84, 129). At the outset it should be noted that Domain Contender, LLC is a wholly owned subsidiary of directNIC, LLC, and directNIC, LLC is a wholly owned subsidiary of Intercosmos Media Group, Inc. (Doc. # 84 at ¶¶ 10–11). As to each of these three Defendants, Vinterella states:

The Defendants have not, and do not, operate, conduct, engage in, or carry one business within Florida. The Defendants have never owned, used, possessed, or held a mortgage or other lien on any real property within the State of Florida. The Defendants do not now, and never have, maintained any office or place of business in Florida. The Defendants not do now, and never have, purchased or sold goods in Florida, engaged in or solicited business in Florida or advertised in Florida. The Defendants have never maintained a lawsuit in Florida, do not pay taxes, and are not required to pay taxes in Florida, and have never availed themselves of the benefits or protections of the laws of the State of Florida.

(Doc. # 84 at ¶¶ 19–24). In addition, the IMG Defendants do not have licenses to conduct business in Florida and “have no office, agency, affiliates, employees, or agents in Florida.” Id. at ¶¶ 36–37. Furthermore, the IMG Defendants “remain active companies solely in Louisiana ... [they] have not, and they still do not, conduct business within the State of Florida.” Id. at ¶ 43. Vinterella also specifies, “The Plaintiffs' assertion that the Defendants operated with the other corporate Defendants in the operation of a domain registration business purportedly in Tampa, Florida is false. IMG, DNLLC, and DC have always conducted business independently from their New Orleans, Louisiana office.” Id. at ¶ 35.

Vinterella also provides pertinent affidavit statements with respect to the separate entities as follows.

a. Intercosmos Media Group, Inc.

Vinterella states that IMG was incorporated in Delaware in 1999, and IMG has its principal place of business in New Orleans, Louisiana. Id. at ¶ 5. IMG has maintained a license to do business in Louisiana since 2000, when it began offering domain name registration services as a reseller of Internet second level domain names. Id. at ¶¶ 6, 14. IMG uses the trade name directNIC. Id. at ¶ 14. IMG's computer servers are located in New Orleans, Louisiana. Id. at ¶ 18. Vinterella also indicates:

IMG contracted with the Internet Corporation for Assigned Names and Numbers (“ICANN”) in its own name in 2001 to serve as a registrar of Internet domain names. IMG contracted with its current customers under its registered name for all transactions throughout its 8 years of providing domain name registration service. IMG regularly filed all applicable annual reports and paid all relevant taxes and fees to remain in good standing with the States of Delaware and Louisiana. All other corporate formalities of IMG, including but not limited to keeping of corporate minutes, [and] the passing of board resolutions, were observed from IMG's principal place of business in New Orleans, Louisiana. IMG maintained separate corporate records from the other company Defendants in this case. IMG maintained separate bank accounts from each of the other Defendants named in this litigation.

(Doc. # 129 at ¶¶ 9–14). The Producers, Inc. held IMG's stock for one year, until January 2007, when 100% of IMG's stock was transferred to individual shareholders. (Doc. # 84 at ¶ 30). However, Vinterella also specifies that “IMG always operated independent of TPI [The Producers, Inc.] IMG was never an ‘alter ego’ of [The Producers, Inc.].” (Doc. # 84 at ¶ 34). Vinterella further submits that “[t]hroughout the time of IMG providing a domain name registration service, an aggregate total of...