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McDonough v. Gorman

United States District Court, D. Delaware

August 16, 2017




         Plaintiff Joseph G. McDonough ("Plaintiff or "McDonough") brought this action against Deborah A. Gorman ("Gorman"), Be Positive Works, LLC ("LLC"), and B Foundation, Inc. ("Inc." and, collectively with Gorman and LLC, "Defendants"). Plaintiff alleges trademark infringement and unfair competition under the Lanham Act and Delaware statutory and common law.

         Pending before the Court is Defendants' motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) or, in the alternative, to transfer the case to the Southern District of New York pursuant to 28 U.S.C. § 1404(a). (D.I. 10) For the reasons stated below, the Court will GRANT Defendants' motion.

         I. Motion to Dismiss for Lack of Personal Jurisdiction

         A. Legal Standards

         Federal Rule of Civil Procedure 12(b)(2) directs the Court to dismiss a case when it lacks personal jurisdiction over the defendant. Determining the existence of personal jurisdiction involves a two-part analysis. First, the Court analyzes the long-arm statute of the state in which the Court is located. See IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998). Next, the Court determines whether exercising jurisdiction over the defendant in the state comports with the Due Process Clause of the Constitution. See Id. Due process is satisfied if the Court finds the existence of "minimum contacts" between the non-resident defendant and the forum state, "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations omitted).

         Once a jurisdictional defense has been raised, the plaintiff bears the burden of establishing, by a preponderance of the evidence and with reasonable particularity, the existence of sufficient minimum contacts between the defendant and the forum to support jurisdiction. See Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d434, 437 (3d Cir. 1987); Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 (3d Cir. 1984). To meet this burden, the plaintiff must produce "sworn affidavits or other competent evidence, " since a Rule 12(b)(2) motion "requires resolution of factual issues outside the pleadings." Time Share, 735 F.2d at 67 n.9.

         The Supreme Court has held that "where issues arise as to jurisdiction or venue, discovery is available to ascertain the facts bearing on such issues." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 n.13 (1978). The Third Circuit instructs that if "the plaintiffs claim is not clearly frivolous, the district court should ordinarily allow discovery on jurisdiction in order to aid the plaintiff in discharging . . . [its] burden." Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 336 (3d Cir. 2009). Jurisdictional discovery may be denied "where the party that bears the burden of establishing jurisdiction fails to establish a threshold prima facie showing of personal jurisdiction." S. Seafood Co. v. Holt Cargo Sys., Inc., 1997 WL 539763, at *8 (E.D. Pa. Aug. 11, 1997) (internal quotation marks omitted).

         B. Contentions

         McDonough contends that the Court can exercise jurisdiction over Defendants under subsections (c)(1) or (c)(3) of Delaware's long-arm statute, which provide the Court with personal jurisdiction over any nonresident who (among other things) "[t]ransacts any business or performs any character of work or service in the State, " or "[c]auses tortious injury in the State by an act or omission in this State, " respectively. 10 Del. C. § 3104(c)(1), (3). McDonough alleges that subsections (c)(1) and (c)(3) are applicable because Defendants sell and deliver products to Delaware consumers through their website. (D.I. 12 at 7) According to McDonough, "Delaware courts have held that a single direct sale of an infringing product to a Delaware customer satisfies subsection (c)(1) of the Delaware long-arm statute." (Id.) (citing Godo Kaisha IP Bridge I v. TCL Commc'n Tech. Holdings Ltd., 2016 WL 4413140, at *5 (D. Del. Aug. 17, 2016)) In his view, it follows that Defendants' two "intentional" shipments to Delaware customers satisfy the Delaware long-arm statute.

         As an alternative theory, McDonough asserts that the Court has jurisdiction under Delaware's long-arm statute through a theory of "dual jurisdiction." (Id. at 8) Dual jurisdiction may apply where Defendants have: "(1) an intent to serve the Delaware market;... (2)... this intent results in the introduction of the product into the market[;] and [(3)... the] plaintiffs cause of action arises from injuries caused by that product." Robert Bosch LLC v. Alberee Products, Inc., 70 F.Supp.3d 665, 675 (D. Del. 2014) (internal citations and quotation marks omitted). McDondugh argues that these requirements are satisfied because Defendants operate a website accessible in Delaware, received orders and payments from customers in Delaware, and shipped their products into Delaware; also, his causes of action arise from injuries caused by Defendants' products' introduction into Delaware. (D.I. 12 at 8)

         C. Discussion

         McDonough has failed to show that this Court may exercise personal jurisdiction over Defendants.

         All of Plaintiff s theories for finding jurisdiction rest on just two sales: (1) a 2013 order placed with Defendant Gorman's prior company; and (2) a 2016 order by Plaintiff s attorneys, placed two months before the filing of McDonough's complaint. (D.I. 14 at 1-2) ...

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