Aerogroup International, Inc. v. Marlboro Footworks, Ltd.Aerogroup International, Inc. v. Marlboro Footworks, Ltd.
OPINION
On April 17, 1996, plaintiff Aerogroup International, Inc. (“Aerogroup”), filed this action alleging violations of several provisions of the Lanham Act,
I. BACKGROUND
Aerogrowp
Aerogroup is a New Jersey corporation with its principal place of business in New Jersey, and it is authorized to do business in New York. Aerogroup is in the business of purchasing and distributing shoes to customers throughout the United States (including New York) and internationally. One of the brands of shoes distributed by Aerogroup is “Aerosoles,” which plaintiff describes as a lightweight, flexible women’s shoe. Aero-soles are manufactured in various factories throughout Europe and Sri Lanka. Aero-group claims intellectual property rights in connection with the Aerosoles shoe.
For the past three years, sales of Aero-soles at retail have averaged in excess of $140,000,000.00 a year, and plaintiff has incurred expenses averaging in excess of $1,500,000.00 a year in advertising Aerosoles shoes. Plaintiff, through its exclusive Canadian distributor, is also a large seller and distributor of Aerosoles shoes in Canada.
Plaintiff also causes the manufacture of “unbranded” or “private label” shoes, which plaintiff refers to as “first cost footwear,” at a factory located in the People’s Republic of China (the “Chinese factory”). According to plaintiff, the first cost footwear is
similar to, but of a lesser quality of design, manufacture and materials than, the Aero-soles Footwear, is of a lower cost and sales price, and is produced and distributed by plaintiff to serve a different, lower priced market than the Aerosoles Footwear.
The Chinese factory is owned or controlled by Oriental Wide Limited (“Oriental Wide”), a Hong Kong corporation. Since 1987, plaintiff has utilized the Chinese factory to manu
Marlboro
Defendant Marlboro Footworks Ltd. (“Marlboro”) is a Massachusetts corporation with its principal place of business in Massachusetts. Acting as a buying agent, Marlboro is in the business of importing, selling, and distributing shoes from the Far East to the United States and Canada. The other corporate defendants are businesses for whom Marlboro has ordered shoes. According to plaintiff, since 1993 Marlboro and other defendants and nonparties conspired and have acted to inflinge the plaintiffs intellectual property rights in Aerosoles shoes by manufacturing inferior copies of them at the same Chinese factory which manufactures plaintiffs private label shoes, and selling them to consumers in the United States and Canada.
Town Shoes
Town Shoes, a shoe retailer, owns 16 stores which use the name Town Shoes, and 20 stores which use the name The Shoe Company. All the stores are in Canada. Town Shoes does not have an office in the United States, does not sell shoes in the United States, does not advertise in U.S. publications, does not have employees in the United States, and does not ship goods into the United States. Town Shoes representatives have attended shoe shows in the United States, including shows in Las Vegas, Chicago, and four times a year in New York. Town Shoes purchases shoes from American distributors.
In September or October of 1995, Town Shoes ordered 2,749 pairs of “Active Air” women’s shoes from N.I.R., an American wholesaler which is an Illinois corporation. Because of the size of the order, N.I.R. transferred it to Marlboro. The shoes were shipped directly from Asia to Canada, and Town Shoes paid the factories directly. When actually delivered, the shoes were named “Airsupply” rather than “Active Air.” In March 1996, Town Shoes called Marlboro and N.I.R. to request additional shoes, but the only shoes available were 600 pairs of Airsupply shoes from N.I.R.’s inventory. Those shoes were delivered by truck to Town Shoes from the United States. 4 Plaintiff contends that the two orders of Airsupply shoes infringe plaintiffs intellectual property rights in its Aerosoles shoes.
According to Town Shoes, the Airsupply shoes at issue in this ease were advertised for sale only once — in a flyer which was placed in The Toronto Star and other local newspapers in Canada. Town Shoes chose the postal codes to which the insert would be delivered, and all of them were in Canada. Moreover, the inserts were only placed in newspapers for home delivery, not those sent to newsstands. Therefore, all of the advertising relating to the shoes at issue in this ease took place exclusively in Canada.
Aerogroup alleges that the Airsupply shoes were first shown to Town Shoes at the Las Vegas shoe show in August 1995 and that Town Shoes’ president met with Marlboro representatives again in December 1995 at the New York shoe show. Aerogroup contends that Town Shoes chose the “Airsup-ply” name for the shoes. This allegation is based on the fact that Steven Goldberg, whose company works as a consultant for Marlboro, testified in his deposition that usually the customers choose the box and sock liner labels. Town Shoes denies that it chose the design of the Airsupply boxes or sock liner labels. For the purposes of this motion, the Court will assume that Town Shoes participated in the selection of an infringing trade dress.
Aerogroup alleges that the radio stations on which Town Shoes advertises can be heard in Buffalo, New York, and that some of the Canadian newspapers in which Town Shoes advertises have a circulation in the United States. Aerogroup submitted an affi
Gredico
Gredico is a Canadian corporation with its principal place of business in Ontario, Canada. Gredico is in the business of importing, buying at wholesale, and selling and distributing shoes at wholesale and retail throughout Canada. In its Complaint, Aerogroup alleges that Gredico is Marlboro’s representative, agent, or distributor in Canada. Marlboro sells to or procures for Gredico lightweight, flexible women’s shoes bearing the label “Easy Step.” The plaintiff contends that these shoes infringe its rights in Aerosoles. On or about December 22, 1995, Gredico requested that the Easy Step logo contain “a single swoosh.” The Aerosoles’ logo contains a “swoosh” that resembles a flat and wide inverted “S” which curves back and forth three times. On or about March 25, 1996, an employee of plaintiffs New York law firm telephoned Gredico and inquired where and how to obtain Easy Step shoes in the United States. The Gredico representative advised the caller to telephone Marlboro.
Plaintiff also alleges that in its advertising, Gredico pastes Easy Step labels into Aero-soles shoes and displays the shoes with the slogan: “The comfortable shoe you know at a comfortable price.” Plaintiff alleges that this refers to plaintiffs Aerosoles and evidences Gredieo’s desire to trade on the reputation of the Aerosoles shoe. The only example of this type of advertising cited by Aerogroup is an advertisement which appeared in the December 1995 issue of a Canadian trade magazine, the Canadian Footwear Journal (the “Journal ”). It is undisputed that the Journal has subscribers in the United States and New York.
Finally, Aerogroup submits an affidavit from a former employee of Gredico who worked there for eight years until early 1995, which asserts that Gredico “solicits sales in New York,” attends shoe shows hosted by the Fashion Footwear Association of New York (“FFANY”), and “exhibits its footwear fine to retail buyers and other customers, sometimes on its own, and sometimes in conjunction with its suppliers, either at the shoe show location itself or at a nearby hotel suite.” In December 1995, for example, Gredico attended the FFANY shoe show in New York City and exhibited its shoes to buyers and other customers in a New York City hotel suite. Gredico also attended the August 1995 and February 1996 shoe shows in Las Vegas, to exhibit its shoes either at the shows or a hotel suite.
In an affidavit, Gredico’s president states that Gredico is not Marlboro’s agent, does not have offices in the United States, does not sell to U.S. companies or advertise in U.S. publications, and does not ship goods into the United States. In January 1996, Gredico contacted Marlboro in Massachusetts and ordered 5,133 pairs of shoes which were to be manufactured in the Far East and shipped directly to Canada. At the time this motion was submitted, Gredico reported that it had only received 1,449 of the shoes, and had sold none of them.
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This single order is
II. STANDARD
In a diversity case or a case arising under a federal law which does not provide for service of process on a party outside the state, the issue of personal jurisdiction must be determined according to the law of the forum state.
Omni Capital Int’l v. Rudolf Wolff & Co.,
Aerogroup and Town Shoes have conducted discovery on the issue of personal jurisdiction. Accordingly, with respect to Town Shoes’ motion, Aerogroup bears the burden of averring sufficient facts to confer jurisdiction over Town Shoes. Aerogroup has had ample opportunity to engage in jurisdiction-related discovery with Gredico, but has not availed itself of this opportunity. Moreover, Aerogroup had full discovery of Marlboro and the action between Aerogroup and Marlboro — which is the principle action in this matter — has already been fully tried on the merits. I therefore find that Aerogroup is required to make a prima facie showing for jurisdiction over Gredico as well as Town Shoes. 8
Aerogroup asserts jurisdiction over Town Shoes and Gredico under two theories. First, under New York’s long-arm statute, Civil Practice Law & Rules (“CPLR”) § 302(a)(2), Aerogroup argues that both Town Shoes and Gredico have committed a tort in New York. Second, Aerogroup argues that Town Shoes and Gredico are subject to national service of process personal jurisdiction under
III. DISCUSSION
A. New York’s Long-Arm Statute
CPLR § 302(a)(2) provides, in relevant part, that
a court may exercise personal jurisdiction over any non-domiciliary ... who in person or through an agent ... commits a tortious act within the state....
(Emphasis supplied). Plaintiff correctly argues that for CPLR § 302(a)(2) purposes, a Lanham Act violation sufficient to confer personal jurisdiction need only amount to an attempt to “pass off’ a good as that of the plaintiffs — no actual sale is required.
See Hubbell,
Town Shoes
The only possible tortious acts in New York involving Town Shoes are (1) the fact that some of the radio stations, newspapers, and magazines in which Town Shoes advertises reach into New York; and (2) Town Shoes’ attendance at shoe shows in New York.
It is undisputed that Town Shoes is a Canadian retañer with no stores in the United States. Aerogroup nowhere alleges that Town Shoes has sold or attempted to sell to consumers in New York any aüegedly infringing Airsupply shoes. Whfie it may be true that some of the Canadian newspapers, magazines, and radio stations which Town Shoes customarily uses to advertise are distributed or can be heard in New York, Aero-group has not alleged that the flyer used to advertise the shoes at issue in this litigation ever made it to the United States. As described above, the allegedly infringing Airs-upply shoes were advertised only once through fliers which were placed in The Toronto Star and other local Canadian newspapers. Town Shoes chose the postal codes to which the inserts would be delivered, each of these postal codes was in Canada near one of Town Shoes’ stores, and there is no allegation that any of the inserts were delivered in the United States. Finally, there is no allegation that Town Shoes solicits sales at any of the New York shoe shows it attends. It is undisputed that Town Shoes attends the shoe shows as a buyer rather than a seller. Accordingly, I find that I do not have personal jurisdiction over Town Shoes under CPLR § 302(a)(2).
Gredico
As with Town Shoes, Gredico engaged in only two possible tortious acts involving New York. They are (1) the circulation in New York of the Easy Step advertisement in the December 1995 edition of the Journal, a Canadian publication; and (2) Gredico’s attendance at shoe shows in New York. The Court, however, rejects these proposed bases to assert personal jurisdiction over Gredico.
Plaintiff nowhere alleges that Gredico has either sold or attempted to seü the aUegedly infringing Easy Step shoes in New York. Aerogroup does no more than speculate in its brief that Gredico “presumably” sold Easy Step shoes at the FFANY shoe show in New York in December of 1995. Given the limited nature of Gredico’s participation in the infringing conduct alleged in this suit, it cannot be said that this speculation is sufficiently connected to any evidence to be considered.
Even assuming, however, that Gredico had offered the Easy Step shoes for sale to Canadian retailers attending the New York shoe show, this would not constitute a “passing off’ in New York. The plaintiff contends that Marlboro and Gredico solicited sales from retaüers and wholesalers by representing that Marlboro’s shoes are remarkably successful “knock-offs” of Aerosoles. The passing off occurred, under the plaintiffs theory of the case, not when the shoes were sold to retailers, but instead when the “knock-offs” were offered for sale to consumers. Aerogroup does not dispute that Gredi-co only offered its shoes for sale to Canadian customers, and therefore, that it was Canadian consumers and not New York consumers
In addition, I find that plaintiff cannot satisfy its burden by means of the advertisement in the
Journal.
The advertisement is a promotion of the product and not the kind of solicitation directed at prospective New York consumers that in other cases has been held sufficient to confer personal jurisdiction.
See Taurus Int'l,
B. Fed.R.Civ.P. j(k)(2)
Plaintiff next contends that
If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any State.
In essence,
1. Whether Defendants Are Subject to the Personal Jurisdiction of “Any State”
Having found that Town Shoes and Gredi-co are not subject to long-arm jurisdiction in New York, Massachusetts is the only other state with which Town Shoes or Gredico might have sufficient contacts to justify exercising personal jurisdiction over them. In order for either defendant to be subject to personal jurisdiction in Massachusetts, I must find that they have sufficient contacts with Massachusetts (1) to be subject to the Massachusetts long-arm statute; and (2) to satisfy the due process requirements of the Constitution.
Nowak v. Tak How Investments, Ltd.,
a. The Massachusetts Long-Arm Statute
The Massachusetts long-arm statute confers personal jurisdiction, “over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person’s ... transacting any business in” Massachusetts. Mass.Gen.Laws Ann. ch. 223A, § 3(a) (1985).
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There are two elements to this provision: (1) the defendant must “transact business” in Massachusetts; and (2) the cause of action must “arise from”
i. “Transacting Business” Element
The “transacting business” element has been construed broadly; although an isolated and minor transaction with a Massachusetts resident may be insufficient, “generally [a defendant’s] purposeful and successful solicitation of business from residents of [Massachusetts] ... will suffice.”
Tatro v. Manor Care, Inc.,
It is undisputed that Town Shoes and Gredico each ordered the allegedly infringing shoes through Marlboro in Massachusetts. In addition, each paid Marlboro a commission for its services. This is sufficient to constitute “transacting business” within the meaning of the Massachusetts long-arm statute. 11
ii. “Arising From” Element
The Supreme Judicial Court of Massachusetts has recently made clear that the “arising from” element of Section 3(a) is also to be read broadly and is to be analyzed under a “but for” test.
Tatro,
Here, “but for” Town Shoes and Gredico’s acquisition of the allegedly infringing shoes from Marlboro, the shoes would not have been sold in Canada, and Aerogroup would not have suffered its alleged injury. Accordingly, both are subject to the Massachusetts long-arm statute, and the only remaining inquiry is the due process test.
The First Circuit has a three-pronged analysis for determining whether an exercise of specific personal jurisdiction comports with the requirements of due process.
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First, the cause of action at issue must ‘“arise out of, or relate to, the defendant’s forum-state activities.’ ”
Nowak,
i. Relatedness
Turning to the requirement of relatedness, the First Circuit would not appear to require that the “passing off,” which creates the injury from the tortious conduct alleged by plaintiff here, occur within Massachusetts. In Nowak the First Circuit concluded that, in a tort action arising out of a business or contractual relationship, strict adherence to a requirement that the injury must be proximately caused by the conduct connected to the forum was “unnecessarily restrictive.” Id. at 715. While proximate cause is an essential element of a tort action and defines the scope of a defendant’s liability, when deciding whether a party is subject to the Court’s jurisdiction there is no need to be as rigid. Id. In Nowak, the Court found personal jurisdiction over a Hong Kong hotel that had solicited business from Massachusetts residents. A Massachusetts resident had drowned in the hotel’s pool. The Court noted that
When a foreign corporation directly targets residents in an ongoing effort to further a business relationship, and achieves its purpose, it may not necessarily be unreasonable to subject that corporation to forum jurisdiction when the efforts lead to a tortious result____ If the resident is harmed while engaged in activities integral to the relationship the corporation sought to establish, we think the nexus between the contacts and the cause of action is sufficiently strong to survive the due process inquiry at least at the relatedness stage.
Id. at 715-16. By relaxing the requirement of proximate cause, the First Circuit introduced flexibility into an analysis of this prong of the jurisdictional inquiry. The danger from such a relaxation, however, is that a defendant will not have fair warning of when its conduct will subject it to a state’s jurisdiction. Id. at 715. Thus, application of the relaxed proximate cause standard articulated by the First Circuit requires a careful analysis of the facts of the case, and will, if the relatedness requirement is just barely met, justify closer scrutiny when judging whether the exercise of jurisdiction is reasonable. Id. at 715-16.
Here, Town Shoes and Gredico placed their orders of shoes through Marlboro in Massachusetts. The shoes were manufactured abroad, were not shipped through Massachusetts, and were offered for sale in Canada. In contrast to Nowak, there is no allegation that either company solicited Massachusetts residents or injured them through the alleged tortious conduct. Nor is the plaintiff a Massachusetts resident. On these facts, I conclude that the First Circuit would not find the conduct which occurred in Massachusetts sufficiently related to the claims in this lawsuit to support jurisdiction.
In analyzing whether a defendant has purposefully availed itself of the forum, the focus of the Court’s analysis is on the issues of voluntariness and foreseeability. The First Circuit has held that this element of due process “ensures that jurisdiction is not premised on ‘random, isolated, or fortuitous’ contacts with the forum state, but rather guarantees that the exercise of jurisdiction is ‘fair, just, or reasonable.’ ”
Nowak,
Both Town Shoes and Gredico voluntarily and deliberately entered into a business relationship with a Massachusetts entity. It was foreseeable that such a business relationship could generate litigation and might subject these defendants to a lawsuit in Massachusetts, for instance, for a failure to pay commissions owed to Marlboro. It was not reasonably foreseeable to either defendant, however, that they would be sued in Massachusetts for trademark violations for shoes ordered through Marlboro, but which were sold in Canada. Accordingly, I do not find in the context of this lawsuit that either defendant purposefully availed itself of Massachusetts as a forum.
iii. Reasonableness
Even if Town Shoes and Gredico have sufficient contacts with Massachusetts to warrant a finding of minimum contacts, I find that exercising jurisdiction over them fails the reasonableness prong of the due process inquiry. As the Court stated in
Nowak,
“[p]ersonal jurisdiction may only be exercised if it comports with traditional notions of ‘fair play and substantial justice.’ ”
Nowak,
(1) the defendant’s burden of appearing, (2) the forum state’s interest in adjudicating the dispute, (3) the plaintiffs interest in obtaining convenient and effective relief, (4) the judicial system’s interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.
Nowak,
The First Circuit notes that it will be burdensome any time a party is required to litigate in a foreign forum. Id. at 718. Thus, there must be a special or unusual showing of inconvenience. Id. There is no question that forcing Town Shoes or Gredico to litigate in Massachusetts as opposed to Canada would be burdensome. This burden is magnified by the cost of defending this complex litigation when neither defendant ordered a significant number of the allegedly infringing shoes. Thus, I find that this factor weighs against exercising jurisdiction.
In
Nowak
the First Circuit stated that “[although a forum state has a significant interest in obtaining jurisdiction over a defendant who causes tortious injury within its borders, that interest is diminished where the injury occurred outside the forum state.”
Nowak,
Turning to Aerogroup’s interest, it may bé more convenient for Aerogroup, an American company, to litigate in Massachusetts than in Canada. On the other hand, Aerogroup did not choose Massachusetts as a forum, and litigating in Massachusetts would not be substantially more inconvenient than litigating in Canada, once Aerogroup loses its first choice of forum, New York. In any event, because Canada may be more inconvenient than Massachusetts, this factor weighs somewhat in favor of Aerogroup.
In
Nowak,
the First Circuit observed that the efficient administration of justice, when analyzed in this context, is usually “a wash.”
Nowak,
The final factor “addresses the interests of the affected governments in substantive social policies.”
Id.
at 719. In the international context, this factor requires a consideration of the foreign nation’s interest in furthering the substantive policies implicated by this litigation, as well as the interest of the United States.
See Asahi Metal Industry Co. v. Superior Court,
Canada unquestionably has a strong interest in enforcing its own intellectual property laws with respect to sales which take place exclusively in Canada. As for the'interests of the United States, the Court has uncontested jurisdiction over the primary alleged infringer — an American corporation — which is the source of the shoes sold by Town Shoes and Gredico. Aerogroup can be accorded full relief from this American defendant without any unnecessary burden on two Canadian corporations with very minimal contacts to the United States. In sum, the strong nexus between Canada’s interest in its intellectual property law and the fact that the sales complained of here occurred exclusively in Canada, supports the proposition that Town Shoes and Gredico should not be subject to this Court’s jurisdiction.
In sum, I find that it would be unreasonable for Massachusetts to exercise jurisdiction over either Town Shoes or Gredico. Here, where Town Shoes and Gredico are Canadian corporations with no offices, employees, or sales in Massachusetts, it would simply be contrary to substantial justice for a court in Massachusetts to exercise personal jurisdiction where none of its residents have been injured through the tortious activity. Accordingly, there are no States which could exercise personal jurisdiction over Town Shoes or Gredico.
2. Whether, Under Rule Jp(k)(2), Town Shoes’ and Gredico’s National Contacts Are Sufficient to Satisfy Due Process
Because I find that no one State may exercise personal jurisdiction over either Town Shoes or Gredico, I must now turn to
a. Minimum Contacts
In applying
The minimum contacts analysis is governed by the Supreme Court case,
International Shoe Co. v. Washington,
Specific jurisdiction exists when “a State exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant’s contacts with the forum”; a court’s general jurisdiction, on the other hand, is based on the defendant’s general business contacts with the forum state and permits a court to exercise its power in a ease where the subject matter of the suit is unrelated to those contacts.
Metropolitan Life Ins.,
To find general jurisdiction, the defendant must have “continuous and systematic general business contacts” with the forum State.
Helicopteros,
Town Shoes purchased the Airsupply shoes at issue in this ease through N.I.R. and Marlboro — both U.S. companies — and paid both of them commissions. Although the shoes were manufactured abroad, the second shipment of shoes was sent from the United States to Town Shoes in Canada. Town Shoes met with representatives of Marlboro regarding the allegedly infringing shoes at a shoe show in New York.
Reasoning from the fact that New York’s long-arm statute requires any “passing off’ to occur within the state, Town Shoes argues that this Court should not find personal jurisdiction under
b. Reasonableness
The second part of the due process personal jurisdiction test is determining the reasonableness of the exercise of jurisdiction. In undertaking this reasonableness analysis, the Supreme Court has identified the following factors:
(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiffs interest in obtaining convenient and effective relief; (4) the interstate judicial system’s interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies.
Metropolitan Life Ins.,
i. The Burden on the Defendants
Litigating a case in New York would be a considerable burden for both Town Shoes and Gredico, given the fact that they are Canadian corporations with very few contacts with the United States. As already observed, this burden is magnified by the fact that the number of allegedly infringing shoes purchased is so small that the expense from any litigation will be disproportionate to the economic impact on their business. “On the other hand, the conveniences of modern communication and transportation ease what would have been a serious burden only a few decades ago.”
Metropolitan Life Ins.,
ii. The Interests of the Forum
The dispute between Town Shoes, Gredico, and Aerogroup implicates the interests of the United States insofar as the Lanham Act is applicable to the Canadian defendants’ actions. In this case, however, the Lanham Act is only marginally implicated by Town Shoes’ and Gredieo’s Canadian sales, if at all. It is doubtful under these circumstances that a U.S. Court would apply the Lanham Act to Town Shoes’ and Gredico’s allegedly infringing actions in Canada.
The “usual rule” is that a passing off that occurs in Canada will be governed by Canadian law, not U.S. law.
See Vanity Fair Mills,
iii.Aerogroup’s Interests
It is more convenient for Aerogroup, an American company, to litigate in the United States rather than Canada. Thus, this factor weighs in favor of Aerogroup.
iv.Efficient Administration of Justice
“In evaluating this factor, courts generally consider where witnesses and evidence are likely to be located.”
Metropolitan Life Ins.,
v.Policy Arguments
As already noted, Canada unquestionably has a strong interest in enforcing its own intellectual property laws with respect to sales which take place exclusively in Canada. As for the interests of the United States, the Court has uncontested jurisdiction over the primary alleged infringer — an American corporation — which is the source of the shoes sold by Town Shoes and Gredico. Aerogroup can be accorded full relief from this U.S. defendant without an unnecessary burden on Canadian corporations with very minimal contacts to the United States.
Where, as here, there is a weak showing of minimum contacts, there must be a stronger showing of reasonableness. I find that it would be unreasonable to exercise jurisdiction over Town Shoes and Gredico. The key consideration in determining whether exercising jurisdiction is consistent with the Constitution is whether maintenance of the suit would “offend ‘traditional notions of fair play and substantial justice.’ ”
Metropolitan Life Ins.,
The district court should be especially scrupulous to protect aliens who reside in a foreign country from forum selections so onerous that injustice could result.
IV. CONCLUSION
For the reasons set forth above, Town Shoes’ and Gredico’s motions to dismiss pursuant to
SO ORDERED.
Notes
. Plaintiff filed an amended Complaint on July 24, 1996. All references to the Complaint in this Opinion only will apply to the amended Complaint. Plaintiff has since withdrawn its RICO claim.
On October 21, 1996, after a trial on Aero-group's motion for an injunction against defendants Marlboro, Goldberg, and Koplan, this Court granted in part and denied in part Aero-group's motion. A permanent injunction reflecting this ruling was signed on November 15, 1996. The Court found that some of the shoes sold by Town Shoes infringed Aerogroup's intellectual property rights. None of the shoes sold by Gredico, however, were found to infringe Aer-ogroup’s rights.
.Both of these defendants contest the existence of subject matter jurisdiction on the claims against them, but have chosen to proceed first with a motion addressed to the lack of personal jurisdiction and have not yet briefed the issue of subject matter jurisdiction. Because of considerations of judicial economy, and because the issue of subject matter jurisdiction is not easily resolved, I will reach the issue of personal jurisdiction in order to "dispos[e] of [the case against these defendants] on a simpler ground."
Cantor Fitzgerald, L.P. v. Peaslee,
. In connection with another motion before this Court, Marlboro has submitted sales figures with respect to Town Shoes stating that Town Shoes purchased 2,166 pairs of shoes from Marlboro. This difference in figures does not change this Court’s analysis.
. All of the testimony regarding the circulation of magazines and newspapers and the transmission of radio signals in the United States is hearsay but it is not disputed by Town Shoes.
. Toronto Life Fashion has 552 U.S. subscribers, including 154 in New York; Flare has a U.S. circulation of 200 copies, and 159 are distributed in New York; Chatelaine has a U.S. circulation of 1,100 copies, with 583 in New York; The Toronto Star and The Toronto Sun newspapers also circulate in the United States.
.In connection with another motion before this Court, Marlboro has submitted more recent sales figures with respect to Gredico stating that Gred-ico purchased 17,889 pairs of Easy Step shoes from Marlboro as of November 14, 1996. As noted above, however, at trial the Court found that these shoes did not infringe Aerogroup’s intellectual property rights. In any event, substi
. While I find that it is appropriate to require Aerogroup to make a prima facie showing, the result reached here would be no different if Aero-group were only required to allege legally sufficient grounds for jurisdiction over Gredico.
. At the time this motion was briefed, plaintiff argued that RICO's provision for nationwide service of process,
. I do not address whether Town Shoes or Gredico would be subject to personal jurisdiction under the Massachusetts version of New York CPLR § 302(a)(2), the "tort” section, for the same reasons that I declined to exercise jurisdiction based on the New York statute. The Massachusetts statute, Section 3(c), allows jurisdiction where an entity has "caus[ed] tortious injury by an act or omission in [Massachusetts]." In analyzing an analogous provision of the Massachu- ' setts long-arm statute in the context of a Lanham Act violation, the First Circuit stated that "[t]he ‘tort’ of infringement is thus the use of a registered mark in connection with the sale of goods, without the consent of the owner, that is likely to cause confusion.”
The Keds Corp. v. Renee Int'l Trading Corp.,
.Aerogroup suggests that all of the actions of Marlboro of which plaintiff complains are attributable to Town Shoes and Gredico for purposes of personal jurisdiction because Marlboro was acting as agent for Town Shoes and Gredico. Massachusetts’s long-arm statute by its terms permits a court to look to the in-state activities of an agent in determining whether to find personal jurisdiction over a principal in an action by a third party.
See
Mass.Gen.Laws ch. 223A, § 3 (permitting courts to assert personal jurisdiction over a non-domiciliaiy "who acts directly or through an agent”).
See also American Home Assurance Co. v. Sport Maska, Inc.,
Even if the plaintiff could establish that Marlboro is an agent of Town Shoes and Gredico for purposes of obtaining personal jurisdiction over them, it would only be appropriate to consider those activities of Marlboro that have a nexus to Town Shoes and Gredico. It is simple agency law that the principal is only liable for the actions of its agent when those actions are within the scope of the agency relationship and for the benefit of the principal. All of Marlboro's actions with respect to all of the shoes sold in this case—such as those shoes sold by other defendants in the United States—are not attributable to Town Shoes and Gredico because these actions were not undertaken within the scope of the agency relationship between Marlboro and Town Shoes and Gredico, and they were not for the benefit of Town Shoes and Gredico.
. I note that Massachusetts believes that it is reading its long-arm statute more broadly than New York reads its analogous provision. In
Tatro
the Supreme Judicial Court explicitly declined to follow the interpretation of the New York long-arm statute given by the Second Circuit in
Gelfand v. Tanner Motor Tours, Ltd.,
. In arguing that under the Massachusetts long-arm statute this cause of action does not arise from the transacting of business in Massachusetts, Aerogroup cites
Crocker v. Hilton Int’l Barbados, Ltd.,
. Under the analysis I must pursue in interpreting
. In undertaking this due process analysis it is appropriate to rely on Second Circuit case law rather than First Circuit law because I am no longer anticipating whether a Massachusetts court would exercise personal jurisdiction over Town Shoes or Gredico.
. The limits on personal jurisdiction based on national contacts are contained in the Due Process Clause of the Fifth Amendment, which governs the federal government.
See
. In
Eskofot,
the Court adopted the three factors taken from the Second Circuit's decision in
Leasco Data Processing Equip. Corp. v. Maxwell,
. New York requires a showing that there is a substantial relationship between the business activity in New York and the tortious conduct alleged in order to find jurisdiction under Section 302(a)(1), the "transacting business” prong of New York’s long-arm statute.
Cantor Fitzgerald,
. Town Shoes cites
Helicopteros Nacionales de Colombia v. Hall,
. I note that at this time I need not actually decide whether the Lanham Act's extraterritorial reach encompasses Town Shoes and Gredico. The issue has not been briefed by Town Shoes or Gredico, although in separate motions defendants Bata and Marlboro have briefed it. I address this issue here only to ascertain the relative weight of the United States’ interest in this litigation.