376 F. Supp. 3d 654
D.S.C.2019Background
- Plaintiff: South Carolina corporation selling low-priced role-play toys under the mark MAXX ACTION; filed a federal trademark application and sells through mass-market retailers.
- Defendant: Texas limited partnership selling higher-priced radio-controlled vehicles under various registered marks containing "MAXX."
- Defendant sent a December 2017 cease-and-desist letter to Plaintiff and to multiple retailers selling Plaintiff's products, alleging trademark infringement and demanding cessation.
- Plaintiff filed an amended complaint in South Carolina federal court seeking declaratory judgments (no infringement; no likelihood of confusion) and damages for tortious interference based on the cease-and-desist communications.
- Defendant moved to dismiss for lack of personal jurisdiction and insufficient service; parties agreed service issues were resolved, leaving jurisdiction as the contested issue.
- District court evaluated both general and specific jurisdiction under South Carolina law and U.S. Constitution and denied the motion to dismiss for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| General jurisdiction | Defendant sells in SC via retailers and online; therefore essentially at home here | Defendant is a Texas LP with principal place in Texas; sales in SC do not make it "at home" | No general jurisdiction — contacts not continuous/systematic enough under Daimler |
| Specific jurisdiction — purposeful availment | Defendant purposefully directed conduct at SC by sending cease-and-desist to Plaintiff and retailers, harming Plaintiff in SC | A cease-and-desist letter alone cannot establish jurisdiction; no sufficient affiliation between SC and dispute | Specific jurisdiction exists — letters plus extrajudicial enforcement directed at SC satisfy Calder/Dudnikov tests |
| Whether extrajudicial communications to third parties matter | Such communications that intend third-party action against plaintiff's business support jurisdiction | Communications to third parties do not automatically create jurisdiction; mere mailings insufficient | Communications to retailers and e.g., third parties combined with business contacts support jurisdiction (fact-specific inquiry) |
| Fair play and substantial justice | Exercise of jurisdiction in SC is reasonable given defendant's targeted conduct and foreseeable harm | Forum assertion would be unfair and burdensome to defendant | Court finds defendant failed to show compelling reasons to make jurisdiction unreasonable; jurisdiction reasonable |
Key Cases Cited
- In re Celotex Corp., 124 F.3d 619 (4th Cir.) (standard for plaintiff to make prima facie showing of jurisdiction on affidavits/pleadings)
- Combs v. Bakker, 886 F.2d 673 (4th Cir.) (procedural guidance when jurisdictional facts are disputed)
- Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390 (4th Cir.) (court must view disputed facts and inferences in plaintiff's favor)
- Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56 (4th Cir.) (same standard for jurisdictional inference drawing)
- VDI Techs. v. Price, 781 F. Supp. 85 (D.N.H.) (permissible to consider affidavits and other materials without converting to summary judgment)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (U.S. Supreme Court) (distinguishing general and specific jurisdiction)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (U.S. Supreme Court) (minimum contacts due process test)
- Daimler AG v. Bauman, 571 U.S. 117 (U.S. Supreme Court) (limits on general jurisdiction; "at home" standard)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (U.S. Supreme Court) (sales alone insufficient for general jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. Supreme Court) (purposeful availment and reasonableness factors)
- Calder v. Jones, 465 U.S. 783 (U.S. Supreme Court) (express-aiming test for torts directed at forum)
- Walden v. Fiore, 571 U.S. 277 (U.S. Supreme Court) (contacts must be with the forum, not just forum residents)
- Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063 (10th Cir.) (cease-and-desist plus third-party notice and consequences can support specific jurisdiction)
- Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082 (9th Cir.) (extrajudicial enforcement communications can support jurisdiction)
- Campbell Pet Co. v. Miale, 542 F.3d 879 (Fed. Cir.) (specific jurisdiction found where cease-and-desist letters combined with ongoing forum business)