439 F.Supp.3d 992
M.D. Tenn.2020Background
- Plaintiffs (Top Tobacco, RT, Republic) own and license TOP and JOB rolling-paper trademarks and run an anti-counterfeiting program.
- U.S. Customs seized 240 boxes of alleged counterfeit JOB rolling papers shipped from Shanghai addressed to Wassem Abdelshahed (residing in Brentwood, TN).
- Abdelshahed is organizer/owner of Smoke Dreams LLC, a Kentucky company operating a retail smoke shop in Oak Grove, KY; Republic never sold the marks to him.
- Plaintiffs’ investigator later purchased rolling papers at the Smoke Dreams store in March–April 2019; tests confirmed they were counterfeit.
- Procedural posture: Smoke Dreams moved to dismiss under Rule 12(b)(2) for lack of personal jurisdiction; Abdelshahed moved under Rule 12(b)(6) to dismiss several claims. Court granted Smoke Dreams’ jurisdictional motion and denied Abdelshahed’s 12(b)(6) motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Smoke Dreams (12(b)(2)) | Smoke Dreams targeted TN customers via website, proximity to TN border, sales to a TN resident, and Abdelshahed’s Tennessee residence/activities | Smoke Dreams is a KY LLC with principal place in KY, passive website, no sales/advertising/shipping into TN, and no evidence of purposeful availment | Court: No general or specific jurisdiction; dismissed Smoke Dreams for lack of personal jurisdiction |
| Lanham Act counterfeiting (Count I) — sufficiency (12(b)(6)) | Complaint pleads use in commerce, intentional counterfeit use, likelihood of confusion, and ongoing scheme beyond the seized shipment | Abdelshahed argued plaintiffs pleaded only the seized shipment and not use in commerce by him | Court: Complaint plausibly alleges counterfeiting and intent; claim survives |
| Lanham Act infringement (Count II) — duplicative of counterfeiting | Counts are distinct; counterfeiting is a subset, not redundant | Abdelshahed argued duplication | Court: Infringement and counterfeiting have different elements; both allowed to proceed |
| Timeliness / laches for §1125(a) false designation (Count III) | Plaintiffs filed promptly after confirming ongoing sales in early 2019; earlier activity (Jan 2018 seizure) did not give full knowledge | Abdelshahed argued laches/presumptive bar because plaintiffs knew of seizure in Jan 2018 and filed in Apr 2019 | Court: Delay not presumptively prejudicial; plaintiff rebutted presumption and alleged prompt filing after confirming ongoing sales; claim not dismissed |
| TCPA unfair competition (Count V) — statute of limitations/timeliness | Claim accrues at discovery; plaintiffs discovered ongoing sales when investigator purchased counterfeit samples in Mar–Apr 2019 and filed within one-year window | Abdelshahed argued prior knowledge of the seizure made claim untimely | Court: TCPA claim timely because actionable conduct continued and plaintiffs filed promptly after discovery |
| Personal liability of Abdelshahed for corporate acts; unjust enrichment (Counts VI–VIII) | Plaintiffs allege Abdelshahed personally imported, directed, and benefited from counterfeit scheme; alleges direct financial/reputational benefit | Abdelshahed argued claims concern Smoke Dreams’ conduct and lack specific individual acts or benefits | Court: Allegations sufficiently plead Abdelshahed’s personal participation and benefit; claims survive |
Key Cases Cited
- Daimler AG v. Bauman, 571 U.S. 117 (general-jurisdiction standard; corporation "at home")
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (limits on general jurisdiction)
- Bristol-Myers Squibb Co. v. Super. Ct. of Cal. S.F. Cty., 137 S. Ct. 1773 (plaintiff must show proper jurisdictional basis)
- AlixPartners, LLP v. Brewington, 836 F.3d 543 (6th Cir.) (three-part specific jurisdiction test)
- Bridgeport Music, Inc. v. Still N The Water Publ’g, 327 F.3d 472 (6th Cir.) (advertising and purposeful availment analysis)
- Bird v. Parsons, 289 F.3d 865 (6th Cir.) (internet interactivity and purposeful availment)
- Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883 (6th Cir.) (web presence plus physical sales contacts)
- Kehoe Component Sales, Inc. v. Best Lighting Prods., Inc., 796 F.3d 576 (6th Cir.) (laches framework for Lanham Act claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading plausibility standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard for plausibility)