241 F. Supp. 3d 708
E.D. Va.2017Background
- Thousand Oaks Barrel Co. (VA) sells mini bourbon barrels and registered copyrights/trademark applications for several product marks and designs.
- Deep South Barrels (TX) operates an interactive e-commerce website and made multiple shipments to Virginia customers; former Thousand Oaks employee Bentley co‑founded Deep South.
- Wood Harbour (TX) and owner Mark Carboni sold Thousand Oaks’ products in Texas under an oral distribution agreement but later sold Deep South products; no Virginia sales alleged.
- Thousand Oaks filed an amended complaint asserting federal copyright and Lanham Act claims and multiple Virginia state claims against Deep South, its founders/owners, and Wood Harbour/Carboni.
- Defendants moved to dismiss for lack of personal jurisdiction, misjoinder, and failure to state claims; court considered jurisdiction first and limited merits review where necessary.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Deep South based on e‑commerce sales | Deep South’s interactive website, orders from Virginia residents, and shipments establish purposeful availment | Small percentage of VA sales and no targeted advertising; contacts are fortuitous | Jurisdiction exists: interactive site + repeated sales to VA satisfy ALS Scan/Zippo sliding scale; exercise is reasonable |
| Personal jurisdiction over individual officers (Bentley, Emmonses) | Officers are liable because they run Deep South and used company channels to reach VA | Officers lack personal contacts with VA; cannot be haled in solely by corporate status | Dismissed without prejudice for lack of personal jurisdiction; limited jurisdictional discovery may be permitted |
| Personal jurisdiction over Wood Harbour/Carboni (and breach of contract claim) | Oral distributor agreement and ongoing orders create sufficient contacts; Carboni initiated relationship | Sales occurred in Texas; no VA contacts, performance, or substantial connection to VA | All claims vs. Wood Harbour/Carboni dismissed without prejudice for lack of personal jurisdiction (including breach of contract) |
| Merits: statute of limitations and substantive defenses to state claims vs. Deep South | §1125 claim timely as continuing infringement; VUTSA and misappropriation viable | VUTSA claim time‑barred; Virginia does not recognize common-law misappropriation | Surviving claims: federal copyright infringement, §1125(a)(1)(A) false designation of origin, and VA unfair competition; VUTSA dismissed with prejudice as time‑barred; common‑law misappropriation dismissed with prejudice; VCPA claim withdrawn |
Key Cases Cited
- ALS Scan, Inc. v. Digital Servs. Consultants, Inc., 293 F.3d 707 (4th Cir.) (interactive website contacts test and three‑part ALS Scan formulation)
- Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) (sliding‑scale analysis for passive vs. active websites)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (U.S.) (minimum contacts / due process standard)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S.) (contractual contacts and substantial connection analysis)
- ePlus Tech., Inc. v. Aboud, 313 F.3d 166 (4th Cir.) (corporate officer contacts not automatically imputed; officer must have sufficient personal contacts)
- Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553 (4th Cir.) (reasonableness factors and specific jurisdiction analysis)
- CareFirst of Md., Inc. v. CareFirst Pregnancy Ctrs., Inc., 334 F.3d 390 (4th Cir.) (prima facie burden for jurisdictional showing)