Bensusan Restaurant v. King
96 Civ. 3992 (SHS)
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
937 F. Supp. 295
September 9, 1996, Decided
OPINION:
SIDNEY H. STEIN, District Judge.
Plaintiff Bensusan Restaurant Corp. ("Bensusan") brought
this action against defendant Richard King,
individually and doing business as The Blue Note, alleging
that King is infringing on Bensusan's rights in its
trademark "The Blue Note." King has moved to dismiss the
complaint for lack of personal jurisdiction pursuant
to Fed.R.Civ.P. 12(b)(2). The issue raised by that motion
is whether the existence of a "site" on the World
Wide Web of the Internet, without anything more, is sufficient
to vest this Court with personal jurisdiction
over defendant pursuant to New York's long-arm statute
and the Due Process Clause of the United States
Constitution. For the reasons that follow, the motion
to dismiss the complaint [**2] is granted.
I. BACKGROUND
Bensusan, a New York corporation, is the creator of a jazz
club in New York City known as "The Blue Note." It
also operates other jazz clubs around the world. Bensusan
owns all rights, title and interest in and to the
federally registered mark "The Blue Note." (Complaint,
PP 1, 5.) King is an individual who lives in Columbia,
Missouri and he owns and operates a "small club" in that
city which is also called "The Blue Note." (Complaint,
PP 2, 6.)
In April of 1996, King posted a "site" on the World Wide
Web of the Internet to promote his club. n1 This Web
site, which is located on a computer server in Missouri,
allegedly contains "a fanciful logo which is substantially
similar to the logo utilized by [Bensusan]." (Complaint,
P 11.) The Web site is a general access site, which
means that it requires no authentication or access code
for entry, and is accessible to anyone around the
world who has access to the Internet. (Meltzer Aff., P
2.) It contains general information about the club in
Missouri as well as a calendar of events and ticketing
information. (Id., PP 2-3; Exhs. A & B.) The ticketing
information includes the names and addresses of
[**3] ticket outlets in Columbia and a telephone number for
charge-by-phone ticket orders, which are available for
pick-up on the night of the show at the Blue Note box
office in Columbia. (Id., Exh. B.)
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n1 In MTV Networks v. Curry, 867 F. Supp. 202 (S.D.N.Y.
1994), Judge McKenna of this court described the
Internet as follows:
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The Internet is the world's
largest computer network (a network consisting of two or more
computers linked together
to share electronic mail and files). The Internet is actually a network
of
thousands of independent
networks, containing several million "host" computers that provide
information services. An
estimated 25 million individuals have some form of Internet access, and
this audience is doubling
each year. The Internet is a cooperative venture, owned by no one, but
regulated by several volunteer
agencies.
Id. at 203 n.1 (citations omitted). A "site" is an Internet
address which permits users to exchange digital
information with a particular host, see id. [**4]
at 203 n.2, and the World Wide Web refers to the collection
of sites available on the Internet, see Shea v. Reno,
930 F. Supp. 916, 929 (1996). See also Malarkey-Taylor
Assocs., Inc. v. Cellular Telecommunications Indus. Ass'n,
929 F. Supp. 473, 476 n.1 (D.D.C. 1996) (citing
American Civil Liberties Union v. Reno, 929 F. Supp. 824
(E.D. Pa. 1996)); Religious Technology Ctr. v. Netcom
On-Line Communication Servs., Inc., 923 F. Supp. 1231,
1238 n.1 (1995).
At the time this action was brought, the first page of
the Web site contained the following disclaimer: "The
Blue Note's Cyberspot should not be contused with one
of the world's finest jazz club[s] [the] Blue [*298]
Note, located in the heart of New York's Greenwich Village.
If you should find yourself in the big apple give
them a visit." (Complaint, P 9.) Furthermore, the reference
to Bensusan's club in the disclaimer contained a
"hyperlink" n2 which permits Internet users to connect
directly to Bensusan's Web site by "clicking" on the link.
(Id. at P 10.) After Bensusan objected to the Web site,
King dropped the sentence "If you should find yourself
in the big apple give them a visit" from the disclaimer
and removed [**5] the hyperlink. (King Aff., P 14.)
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n2 A "hyperlink" is "highlighted text or images that, when
selected by the user, permit him to view another,
related Web document." Shea, 930 F. Supp. at 929. With
these links "a user can move seamlessly between
documents, regardless of their location; when a user viewing
the document located on one server selects a
link to a document located elsewhere, the browser will
automatically contact the second server and display
the document." Id.
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Bensusan brought this action asserting claims for trademark
infringement, trademark dilution and unfair
competition. King has now moved to dismiss the action
for lack of personal jurisdiction pursuant to Fed. R. Civ.
P. 12(b)(2).
II. DISCUSSION
At this stage of the litigation -- prior to an evidentiary
hearing or discovery -- Bensusan may defeat a motion
to dismiss the complaint for lack of personal jurisdiction
by making merely a prima facie showing of jurisdiction.
See A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76,
79-80 [**6] (2d Cir. 1993); Hoffritz for Cutlery,
Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985);
Rothschild v. Paramount Distillers, Inc., 923 F. Supp. 433,
435 (S.D.N.Y. 1996); PI, Inc. v. Quality Prods., Inc.,
907 F. Supp. 752, 758 (S.D.N.Y. 1995); Dave Guardala
Mouthpieces, Inc. v. Sugal Mouthpieces, Inc., 779 F. Supp.
335, 336-37 (S.D.N.Y. 1991).
In that regard, Bensusan is entitled to have its complaint
and affidavits interpreted, and any doubts resolved,
in the light most favorable to it. See Landoil Resources
Corp. v. Alexander & Alexander Servs., Inc., 918 F.2d
1039, 1043 (2d Cir. 1991); Hoffritz for Cutlery, 763 F.2d
at 57; Linzer v. EMI Blackwood Music, Inc., 904 F.
Supp. 207, 211 (S.D.N.Y. 1995); Editorial Musical Latino
Americana, S.A. v. Mar Int'l Records, Inc., 829 F.
Supp. 62, 64 (S.D.N.Y. 1993). This burden is satisfied
even when the moving party makes contrary allegations
that place in dispute the factual basis of plaintiff's
prima facie case. See A.I. Trade Finance, 989 F.2d at
79-80; Marine Midland Bank, N.A. v. Miller, 664 F.2d 899,
904 (2d Cir. 1981); Lancaster v. Zufle, 165 F.R.D.
38, 40 (S.D.N.Y. 1996); [**7] National Cathode
Corp. v. Mexus Co., 855 F. Supp. 644, 646 (S.D.N.Y. 1994).
Furthermore, where, as in this case, discovery has not
commenced on this issue or any other, plaintiff is
entitled to rely on mere factual allegations to make its
prima facie showing of jurisdiction. See Ball v.
Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197
(2d Cir.), cert. denied, 498 U.S. 854, 111 S. Ct. 150,
112 L. Ed. 2d 116 (1990); Rothschild, 923 F. Supp. at
436; Executive Telecard, Ltd. v. Engelman, 1996 U.S.
Dist. LEXIS 5159, No. 95 Civ. 9505, 1996 WL 191967, at
*2 (S.D.N.Y. Apr. 19, 1996); Pilates, Inc. v. Pilates
Inst., Inc., 891 F. Supp. 175, 177 (S.D.N.Y. 1995); Palmieri
v. Estefan, 793 F. Supp. 1182, 1186 (S.D.N.Y.
1992); Kinetic Instruments, Inc. v. Lares, 802 F. Supp.
976, 981 (S.D.N.Y. 1992). Matters outside the
pleadings, however, may also be considered in resolving
a motion to dismiss for lack of personal jurisdiction
pursuant to Fed.R.Civ.P. 12(b)(2) without converting it
into one for summary judgment. See Visual Sciences,
Inc. v. Integrated Communications, Inc., 660 F.2d 56,
58 (2d Cir. 1981); Rothschild, 923 F. Supp. at 436; John
Hancock Property and Casualty Ins. [**8] Co.
v. Universale Reinsurance Co., Ltd., 1992 U.S. Dist. LEXIS
1113, No. 91 Civ. 3644, 1992 WL 26765, at *6 (S.D.N.Y.
Feb. 5, 1992).
Knowing that personal jurisdiction over a defendant is
measured by the law of the jurisdiction in which the
federal court sits, see Rothschild, 923 F. Supp. at 436
(citing Pilates, 891 F. Supp. at 179), Editorial Musical
Latino Americana, 829 F. Supp. at 64, Bensusan relies
on subdivisions (a)(2) and (a)(3)(ii) of N.Y. C.P.L.R. §
302, New York's long-arm statute, to support its position
that personal jurisdiction exists over King in this
action. Each provision will be addressed in turn.
[*299] A. C.P.L.R. § 302(a)(2)
C.P.L.R. § 302(a)(2) permits a court to exercise personal
jurisdiction over any nondomiciliary who "commits a
tortious act within the state" as long as the cause of
action asserted arises from the tortious act. See Pilates,
891 F. Supp. at 180; Exovir, Inc. v. Mandel, 1995 U.S.
Dist. LEXIS 9677, No. 94 Civ. 3546, 1995 WL 413256,
at *6 (S.D.N.Y. July 12, 1995); Dave Guardala Mouthpieces,
779 F. Supp. at 337; Business Trends Analysts v.
Freedonia Group, Inc., 650 F. Supp. 1452, 1456 (S.D.N.Y.
1987).
In Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633,
639 [**9] (2d Cir.), cert. denied, 352 U.S. 871, 77 S.
Ct. 96, 1 L. Ed. 2d 76 (1956), the United States Court
of Appeals for the Second Circuit held that trademark
infringement occurs "where the passing off occurs, i.e.,
where the deceived customer buys the defendant's
product in the belief that he is buying the plaintiff's."
Under this standard, courts have found that an offering
for sale of even one copy of an infringing product in
New York, even if no sale results, is sufficient to vest a
court with jurisdiction over the alleged infringer. See
Editorial Musical Latino Americana, 829 F. Supp. at
64-65; German Educational Television Network, Ltd. v.
Oregon Public Broadcasting Co., 569 F. Supp. 1529
(S.D.N.Y. 1983); Hertz Sys., Inc. v. Hervis Corp., 549
F. Supp. 796, 797-98 (S.D.N.Y. 1982); Honda Assocs.,
Inc. v. Nozawa Trading Inc., 374 F. Supp. 886 (S.D.N.Y.
1974). Accordingly, the issue that arises in this
action is whether the creation of a Web site, which exists
either in Missouri or in cyberspace -- i.e., anywhere
the Internet exists -- with a telephone number to order
the allegedly infringing product, is an offer to sell the
product in New York.
Even after [**10] construing all allegations
in the light most favorable to Bensusan, its allegations are
insufficient to support a finding of long-arm jurisdiction
over plaintiff. A New York resident with Internet access
and either knowledge of King's Web site location or a
"search engine" capable of finding it could gain access to
the Web site and view information concerning the Blue
Note in Missouri.
It takes several affirmative steps by the New York resident,
however, to obtain access to the Web site and
utilize the information there. First, the New York resident
has to access the Web site using his or her computer
hardware and software. See Shea, 930 F. Supp. at 930.
Then, if the user wished to attend a show in
defendant's club, he or she would have to telephone the
box office in Missouri and reserve tickets. Finally,
that user would need to pick up the tickets in Missouri
because King does not mail or otherwise transmit
tickets to the user. Even assuming that the user was confused
about the relationship of the Missouri club to
the one in New York, such an act of infringement would
have occurred in Missouri, not New York. The mere
fact that a person can gain information on the allegedly
infringing [**11] product is not the equivalent of a
person advertising, promoting, selling or otherwise making
an effort to target its product in New York. See
Hertz, 549 F. Supp. at 797. Here, there is simply no allegation
or proof that any infringing goods were shipped
into New York or that any other infringing activity was
directed at New York or caused by King to occur here.
Cf. People v. Concert Connection, Ltd., 211 A.D.2d 310,
314, 629 N.Y.S.2d 254, 257 (2d Dep't 1995), appeal
dismissed, 86 N.Y.2d 837, 634 N.Y.S.2d 445, 658 N.E.2d
223 (1995) (Table).
Accordingly, C.P.L.R. § 302(a)(2) does not authorize this Court to exercise jurisdiction over King.
B. C.P.L.R. § 302(a)(3)(ii)
Bensusan also contends that personal jurisdiction is established
pursuant to C.P.L.R. § 302(a)(3)(ii), which
permits a court to exercise personal jurisdiction over
any non-domiciliary for tortious acts committed outside
the state that cause injury in the state if the non-domiciliary
"expects or should reasonably expect the act to
have consequences in the state and derives substantial
revenue from interstate or international commerce."
See American Eutectic Welding Alloys Sales Co. v. Dytron
Alloys [**12] Corp., 439 F.2d 428, 432-35 (2d Cir.
1971); In re Houbigant Inc., 914 F. Supp. 964, 979 (S.D.N.Y.
1995); Time Prods., Plc. v. J. Tiras Classic
Handbags, Inc., 1994 U.S. Dist. LEXIS 9483, No. 93 Civ.
7856, 1994 WL 363930, at *7 (S.D.N.Y. July 13,
[*300] 1994); Car-Freshner Corp. v. Broadway
Mfg. Co., 337 F. Supp. 618, 619 (S.D.N.Y. 1971); see also
Sybron Corp. v. Wetzel, 46 N.Y.2d 197, 204-05, 413 N.Y.S.2d
127, 130-31, 385 N.E.2d 1055 (1978).
As an initial matter, Bensusan does not allege that King
derives substantial revenue from interstate or
international commerce. Instead, it relies on arguments
that King participates in interstate commerce by hiring
and showcasing bands of national stature. Section 302(a)(3)(ii),
however, explicitly states that substantial
"revenue" is required from interstate commerce, not mere
participation in it. King has submitted an affidavit
stating that 99% of his patronage and revenue is derived
from local residents of Columbia, Missouri (primarily
students from the University of Missouri) and that most
of the few out-of-state customers have either an
existing or a prior connection to the area, such as graduates
of the University of Missouri. (King Decl. PP 4, 8.)
Moreover, [**13] Bensusan's allegations of
foreseeability, which are based solely on the fact that King knew
that Bensusan's club is located in New York, is insufficient
to satisfy the requirement that a defendant
"expects or should reasonably expect the act to have consequences
in the state." That prong of the statute
requires that a defendant make "a discernable effort .
. . to serve, directly or indirectly, a market in the forum
state." Darienzo v. Wise Shoe Stores, Inc., 74 A.D.2d
342, 346, 427 N.Y.S.2d 831, 834 (2d Dep't 1980).
Finally, Bensusan's conclusory allegation of a loss in
New York is nothing more that an allegation of an "indirect
financial loss resulting from the fact that the injured
person resides or is domiciled in New York," which is not
the allegation of a "significant economic injury" required
by section 302(a)(3). See ICC Primex Plastics Corp. v.
LA/ES Laminati Estrusi Termo-Plastici S.P.A., 775 F. Supp.
650, 656 (S.D.N.Y. 1991); Arbitron Co. v. E.W.
Scripps, Inc., 559 F. Supp. 400, 404 (S.D.N.Y. 1983);
Fantis Foods, Inc. v. Standard Importing Co., 49 N.Y.2d
317, 326-27, 425 N.Y.S.2d 783, 787, 402 N.E.2d 122 (1980);
Sybron, 46 N.Y.2d at 205, 413 N.Y.S.2d at 131.
[**14]
Accordingly, C.P.L.R. § 302(a)(3) does not authorize this Court to exercise jurisdiction over King.
Bensusan's primary argument in support of both statutory
bases for personal jurisdiction is that, because
defendant's Web site is accessible in New York, defendant
could have foreseen that the site was able to be
viewed in New York and taken steps to restrict access
to his site only to users in a certain geographic region,
presumably Missouri. Regardless of the technical feasibility
of such a procedure, see Shea, 930 F. Supp. at
929-30, 933-34, mere foreseeability of an in-state consequence
and a failure to avert that consequence is
not sufficient to establish personal jurisdiction. See
Fox v. Boucher, 794 F.2d 34, 37 (2d Cir. 1986); Taurus
Int'l Inc. v. Titan Wheel Int'l Inc., 892 F. Supp. 79,
82 (S.D.N.Y. 1995).
C. Due Process
Furthermore, even if jurisdiction were proper under New
York's long arm statute, asserting personal jurisdiction
over King in this forum would violate the Due Process
Clause of the United States Constitution. See, e.g.,
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76,
105 S. Ct. 2174, 2183-84, 85 L. Ed. 2d 528 (1985);
[**15] World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 292, 100 S. Ct. 559, 564, 62 L. Ed. 2d 490
(1980); see also Richard S. Zembek, Comment, Jurisdiction
and the Internet: Fundamental Fairness in the
Networked World of Cyperspace, 6 Alb. L.J. Sci. &
Tech. 339, 367-80 (1996). Due process requires "that the
non-resident defendant has purposefully established 'minimum
contact' with the forum state such that the
'maintenance of the suit does not offend "traditional
notions of fair play and substantial justice."'" Darby v.
Compagnie Nationale Air France, 769 F. Supp. 1255, 1262
(S.D.N.Y. 1991) (quoting International Shoe Co. v.
Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90
L. Ed. 95 (1945)).
The following factors are relevant to this determination:
"(1) whether the defendant purposefully availed
himself of the benefits of the forum state; (2) whether
the defendant's conduct and connection with the
forum state [*301] are such that he should
reasonably anticipate being haled into court there; and (3)
whether the defendant carries on a continuous and systematic
part of its general business within the forum
state." Independent Nat'l Distributors, Inc. v. Black
Rain Communications, [**16] Inc., 1995 U.S. Dist. LEXIS
14086, No. 94 Civ. 8464, 1995 WL 571449, at *5-6 (S.D.N.Y.
Sept. 28, 1995).
As set forth above, King has done nothing to purposefully
avail himself of the benefits of New York. King, like
numerous others, simply created a Web site and permitted
anyone who could find it to access it. Creating a
site, like placing a product into the stream of commerce,
may be felt nationwide -- or even worldwide -- but,
without more, it is not an act purposefully directed toward
the forum state. See Asahi Metal Indus. Co. v.
Superior Court, 480 U.S. 102, 112, 107 S. Ct. 1026, 1032,
94 L. Ed. 2d 92 (1992) (plurality opinion). There are
no allegations that King actively sought to encourage
New Yorkers to access his site, or that he conducted
any business -- let alone a continuous and systematic
part of its business -- in New York. There is in fact no
suggestion that King has any presence of any kind in New
York other than the Web site that can be accessed
worldwide. Bensusan's argument that King should have foreseen
that users could access the site in New York
and be contused as to the relationship of the two Blue
Note clubs is insufficient to satisfy due process. See
Fox, 794 F.2d at 37; [**17] Beckett v. Prudential
Ins. Co. of Am., 893 F. Supp. 234, 239 (S.D.N.Y. 1995).
Although CompuServe Inc. v. Patterson, 89 F.3d 1257 (6th
Cir. 1996), a recent decision of the United States
Court of Appeals for the Sixth Circuit, reached a different
result, it was based on vastly different facts. In that
case, the Sixth Circuit found personal jurisdiction proper
in Ohio over an Internet user from Texas who
subscribed to a network service based in Ohio. The user,
however, specifically targeted Ohio by subscribing to
the service and entering into a separate agreement with
the service to sell his software over the Internet.
Furthermore, he advertised his software through the service
and repeatedly sent his software to the service in
Ohio. Id. at 1264-65. This led that court to conclude
that the Internet user "reached out" from Texas to Ohio
and "originated and maintained" contacts with Ohio. Id.
at 1266. n3 This action, on the other hand, contains
no allegations that King in any way directed any contact
to, or had any contact with, New York or intended to
avail itself of any of New York's benefits.
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n3 In CompuServe, the Sixth Circuit explicitly wrote that
it was not addressing the issue of whether the
Internet user "would be subject to suit in any state where
his software was purchased or used . . ."
CompuServe,89 F.3d at 1268.
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Accordingly, the exercise of personal jurisdiction over
King in this case would violate the protections of the
Due Process Clause.
III. CONCLUSION
For the reasons set forth above, defendant's motion to
dismiss the complaint pursuant to Fed.R.Civ.P.
12(b)(2) for lack of personal jurisdiction is granted
and the complaint is dismissed.
Dated: New York, New York
September 9, 1996
SO ORDERED:
Sidney H. Stein, U.S.D.J.