Miller Yacht Sales v. Smith

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
9-20-2004
Miller Yacht Sales v. Smith
Precedential or Non-Precedential: Precedential
Docket No. 02-3304
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PRECEDENTIAL ___________
THE UNITED STATES COURT OF Chryssa Yaccarino, Esq. (Argued)
APPEALS FOR THE THIRD CIRCUIT Villani & DeLuca
___________ 703 Richmond Avenue
Point Pleasant Beach, NJ 08742
No. 02-3304 Counsel for Appellant
___________
Ivan Bogachoff, Esq. (Argued)
MILLER YACHT SALES, INC., Bogachoff & Associates
4500 New Hampshire Avenue, NW
Appellant Suite B
Washington, DC 20011
v. Counsel for Appellees
___________
STEVEN SM ITH, individually;
MARINER YACHT SALES, INC.; OPINION OF THE COURT
IVAN BOGACHOFF, individually; ___________
ISLAND YACHT BROKERS;
ABC CORPORATIONS 1-10,
NYGAARD, Circuit Judge.
names being fictitious;
JOHN DOES, (1-10), The District Court dismissed Miller
names being fictitious Yacht Sales’ suit for trade-dress
infringement, statutory and common law
___________ unf air c om p e tition, a nd tor tio us
interference with prospective economic
APPEAL FROM THE UNITED advantage, because it concluded that it
STATES DISTRICT COURT FOR THE lacked personal ju risdictio n over
DISTRICT OF NEW JERSEY Appellees. Because we conclude that
Appellees have sufficient contacts with
(D.C. No. 02-cv-00402) New Jersey, we will reverse.
District Judge: The Honorable Anne E.
I.
Thompson
___________ To defeat Appellee’s motion to dismiss
for lack of personal jurisdiction, Miller
ARGUED OCTOBER 28, 2003 Yacht was required to present a prima
facie case that jurisdiction existed. Mellon
BEFORE: SCIRICA, Chief Judge, Bank (East) PSFS Nat’l Ass’n v. Farino,
NYGAARD, and AMBRO, 960 F.2d 1217, 1223 (3d Cir. 1992).
Circuit Judges. Miller Yacht is a New Jersey corporation
with its principal offices in South Toms
(Filed September 20, 2004) River, New Jersey. Miller Yacht designs,
manufactures, markets and sells boats.
Specific to this action, Miller Yacht has
designed, manufactured, marketed and 1.
(...continued)
sold 34' and 38' Marine Trader Double
engage in transactions on behalf of
Cabin and Sedan Yachts.
Steven Smith and himself, individually,
Appellees also sell and market boats, for the purpose of entering into a
but are not New Jersey residents or business agreement wherein Bogachoff
corporations. Beginning in 1998, Miller would become a broker dealer, along
Yacht and Appellees began negotiating a with his partner, of Marine Trader
deal that was intended to allow the yachts.” Appellant’s App. at 13
Appellees to become exclusive marketing (emphasis added). This allegation is
representatives and dealers for some of supported by Donald Miller’s affidavit in
Miller Yacht’s boats, including the Marine which he states that Smith and
T r a d e r Y a c hts. 1 D u r i n g t h e se Bogachoff acted together during relevant
negotiations and that on a particular
occasion in February, 2000 “[Miller]
1.
Appellees stress their argument that personally saw Defendants Smith and
they were each acting in their individual Bogachoff working in a [boat show]
corporate or personal capacities and that booth soliciting New Jersey Customers.
their contacts with New Jersey should be There, [Miller] was introduced to
analyzed separately. While they are Defendant Bogachoff as the partner of
correct that, in general, a court must Defendant Smith.” Appellant’s App. at
analyze questions of personal jurisdiction 48.
on a defendant-specific and claim- Miller Yacht has alleged that
specific basis, Calder v. Jones, Bogachoff and Smith were partners and
Appellees’ reliance on this general rule that they were each also representing one
ignores substantial portions of Miller of the appellee companies and has
Yacht’s allegations and the evidence supported these allegations with a sworn
submitted to support those allegations. affidavit. We view these allegations and
465 U.S. 783, 790 (1984). Miller Yacht their supporting evidence in a light most
alleges that Steven Smith and Ivan favorable to Miller Yacht and, therefore,
Bogachoff were acting as partners while infer a partnership between Bogachoff
they negotiated with Miller Yacht. In its and Smith. See Pinker v. Roche
complaint, Miller Yacht alleges, Holdings LTD, 292 F.3d 361, 368 (3d
“Defendant Ivan Bogachoff . . . was a Cir. 2002) (holding that in ruling on a
partner with Steven Smith and at all Rule 12(b)(2) motion we must accept all
relevant times hereto and, upon of the plaintiff’s allegations as true and
information and belief, had express, construct disputed facts in favor of the
implied, and/or apparent authority to plaintiff.) We disagree with Appellees
(continued...) (continued...)
2
negotiations, Appellees made phone calls failed to reach an agreement. Miller Yacht
from their offices outside New Jersey to alleges that Appellees misappropriated the
Miller Yacht’s offices in New Jersey. photographs and floor plans contained in
Additionally, Ap pellees transm itted Miller Yacht’s sales brochure, as well as
facsimiles into New Jersey, including other intellectual property owned by Miller
proposed licensing agreements for the Yacht, and used it to produce and market
trade names relevant to the negotiations. boats that are identical to the Marine
Appellees also traveled to Miller Yacht’s Trader Yachts. It further alleges that
offices in New Jersey. During one of these Appellees engag ed M iller Yacht’s
trips, Donald Miller, the president of business contacts in China to manufacture
Miller Yacht, provided Steven Smith with the boats, and thereby interfered with
a copy of M iller Yacht’s sales brochure. Miller Yacht’s business relationship with
That brochure included photographs and those contacts.
floor plans of the Marine Trader Yachts.
Based on these allegations, M iller
Miller Yacht also alleges that it arranged
Yacht sued Appellees for trade-dress
and paid for Smith to travel to China to
infringement, statutory and common law
observe the manufacturing process for the
unf air c om p e tition, a nd tor tio us
Marine Trader Yachts and meet Miller
interference with prospective economic
Yacht’s business contacts relevant to those
advantage. Appellees moved to dismiss
yachts. Miller Yacht claims that Appellees
Miller Yacht’s complaint based on lack of
sent facsimile transmissions to Donald
personal jurisdiction and improper venue.
Miller as part of the planning activities for
The District Court, without holding an
Smith’s trip to China.
evidentiary hearing, granted Appellees’
Eventually, the negotiations between motions to dismiss for lack of personal
the parties reached a standstill and they jurisdiction. This appeal followed.
II.
1.
(...continued) The District Court had subject matter
that these allegations and affidavits fall jurisdiction over this action under 28
short of alleging a relationship between U.S.C. §§ 1331, 1332 and 1367. We have
the parties from which we must attribute appellate jurisdiction over the District
the contact of any one individual Court’s final order under 28 U.S.C. § 1291Appellee to all of the Appellees. and review the District Court’s decision de
Carteret Sav. Bank, F.A. v. Shushan, 954 novo. Pinker, 292 F.3d at 368.
F.2d 141, 145 n.6 (3d Cir. 1992)
A federal court sitting in New Jersey
(observing that “[a] partnership and each
has jurisdiction over parties to the extent
partner is held liable for the act of every
provided under New Jersey state law. See
other partner, executed in the usual way
Fed. R. Civ. P. 4(e); see also Carteret, 954
of carrying on the business of the
F.2d at 144. New Jersey’s long-arm
partnership”).
3
statute provides for jurisdiction co- forum, and the litigation.” Id. at 368.
e xtensive with the due proc e ss Specific jurisdiction over a defendant
requirements of the United States exists w hen tha t defe ndan t has
Constitution. N.J. Court Rule 4:4-4(c); see “purposefully directed his activities at
Charles Gendler & Co. v. Telecom Equip. residents of the forum and the litigation
Corp., 508 A.2d 1127, 1131 (N.J. 1986). results from alleged injuries that arise out
Thus, parties who have constitutionally of or relate to those activities.” Burger
sufficient “minimum contacts” with New King Corp. v. Rudzewicz, 471 U.S. 462,
Jersey are subject to suit there. See 472 (1985) (internal quotations and
Carteret, 954 F.2d at 149. citation omitted). A single contact that
creates a substantial connection with the
Miller Yacht claims that the District
forum can be sufficient to support the
Court had specific jurisdiction over
exercise of personal jurisdiction over a
Appellees based on their contacts with
defendant. Id. at 475 n.18.
New Jersey.2 Miller Yacht concedes that
Appellees do not have the “consistent and If these “purposeful availment” and
systematic” contacts with New Jersey that “relationship” requirements are met, a
would subject them to general jurisdiction court may exercise personal jurisdiction
in that forum. See Pinker, 292 F.3d at 368 over a defendant so long as the exercise of
n.1. that jurisdiction “comport[s] with fair play
and substantial justice.” Id. at 476
In analyzing Miller Yacht’s specific
(internal quotations and citations omitted).
jurisdiction argument, we must “examine
To defeat jurisdiction based on this
the relationship among the [Appellees], the
fairness inquiry, a defendant must “present
a compelling case that the presence of
some other considerations would render
2.
Miller Yacht also alleges Appellees jurisdiction unreasonable.” Id. at 477.
were subject to personal jurisdiction The Supreme Court has indicated that
under the “effects test.” See Calder, 465 lower courts addressing the fairness
U.S. at 789. Under that test, a party is question may consider “the burden on the
subject to personal jurisdiction in a state defendant, the forum State’s interest in
when his or her tortious actions were adjudicating the dispute, the plaintiff’s
intentionally directed at that state and interest in obtaining the most efficient
those actions caused harm in that state. resolution of controversies, and the shared
Because we find that Appellees have interest of the several States in furthering
sufficient contacts with New Jersey fundamental substantive social policies.”
under the more traditional personal Id. (internal quotations omitted).
jurisdiction analysis, we need not reach
To survive a motion to dismiss for lack
the question of whether the appellees
of personal jurisdiction, a plaintiff bears
would also be subject to jurisdiction
the burden of establishing the court’s
under the effects test.
4
jurisdiction over the moving defendants. that they eventually misappropriated and
Pinker, 292 F.3d at 368. However, when used to injure Miller Yacht.
the court does not hold an evidentiary
Second, Miller Yacht alleges Appellees
hearing on the motion to dismiss, the
placed the misappropriated photos and
plaintiff need only establish a prima facie
floor plans in advertisements in boating
case of personal jurisdiction and the
magazines circulated in New Jersey and in
plaintiff is entitled to have its allegations
at least one brochure that was sent directly
taken as true and all factual disputes drawn
to a potential customer in New Jersey.
in its favor. Id.; see also Carteret, 954
Intentionally and directly transmitting the
F.2d at 142 n.1.
misappropriated property that Appellees
The District Court did not hold an initially obtained in New Jersey back into
evidentiary hearing but did determine, New Jersey is a very strong contact
based on the parties’ submissions and between them and the State. It is also a
arguments, that Miller Yacht failed to second essential element of Miller Yacht’s
satisfy its burden because the contacts it infringement and unfair competition
presented did not show that Appellees claims.3
purposefully availed themselves of New
Miller Yacht also alleges that, at least
Jersey’s laws. We disagree based on three
before Appellees misappropriated its
important contacts and the context of those
intellectual property, Appellees were
contacts.
III.
3.
A. There is no question that this contact is
sufficient to subject Island Yacht Brokers
Trade-dress Infringement and Unfair
and Mariner Yacht Sales to jurisdiction
Competition Claims
in New Jersey. We attribute this contact
First, Miller Yacht alleges that to Appellees because Miller Yacht
Appellees made trips to New Jersey as part specifically alleged that Steven Smith
of their negotiations. Miller Yacht claims was the individual responsible for Island
that during one of these trips Smith came Yacht Brokers’ “‘[advertising and
to New Jersey and received Miller Yacht’s brochure producing] efforts and
sales brochure. The receipt of this sales activities’” Appellants’ App. at 41
brochure was Appellees’ first step toward (quoting affidavit of Steven Smith)
the misappropriation of Miller Yacht’s (brackets in original). As described in
trade-dress, photos and floor plans. This footnote 1, Miller Yacht has also alleged
misappropriation is not only related, but is that Smith and Bogachoff were acting as
essential, to Miller Yacht’s unfair partners during all relevant periods. We
competition and trade-dress infringement accept these allegations as true and,
claims. Thus, Appellees came to New therefore, attribute this contact to all
Jersey allegedly to receive the property Appellees.
5
directly engaged in the marketing of boats Although these negotiations are only
in New Jersey. They attended trade shows indirectly related to Miller Yacht’s trade-
in New Jersey and adjoining states and dress infringement and unfair competition
advertised in regional boating magazines claims, they are directly related to its
that were distributed in New Jersey. These tortious interference claim and are the
pre-misappropriation contacts and the third contact upon which we rely. Miller
continued advertisements in New Jersey Yacht specifically alleges that Appellees
provide a nexus between Appellees and sent facsimile transmissions into New
New Jersey, and logically explain why at Jersey in order to arrange for Smith to
least one New Jersey resident would travel to China to visit the Chinese
request Appellees’ sales brochure. While companies that manufactured the Marine
we do not base our holding on these pre- Trader Yachts for Miller Yacht. Miller
misappropriation contacts (they are not Yacht further alleges that, subsequent to
among the three contacts on which we this trip, Appellees unlawfully engaged
rely), they are relevant to show that the these Chinese companies to produce
request for sales material that Appellees “strikingly similar yachts . . . according to
received from a New Jersey resident was the interior and exterior plans and
not a random or fortuitous occurrence specifications owned by [Miller Yacht],
upon which jurisdiction may not properly using the molds used to construct said
lie. See World-Wide Volkswagen Corp. v. yachts.” Appellant’s App. at 28. Miller
Woodson, 444 U.S. 286, 295-99 (1980) Yacht alleges that Appellees’ engagement
(holding that one fortuitous act connecting of these companies to produce the
a defendant with a state with which it has “strikingly similar” yachts interfered with
no other ties is not sufficient to support the Miller Yacht’s prospective economic
exercise of personal jurisdiction over that advantage flowing from its own
defendant in that state). relationship with these companies.
The contacts alleged by Miller Yacht We conclude that Appellees’ contacts
are sufficient to satisfy the “purposeful with New Jersey in setting up their trip to
availment” and “relatedness” requirements China, coupled with the contacts we found
of due process with respect to Miller sufficient to support the exercise of
Yacht’s trade-dress infringement and personal jurisdiction over Appellees on
unfair competition claims. Miller Yacht’s other claims, are sufficient
to support the exercise of jurisdiction on
B.
the tortious interference with prospective
Tortious Interference Claim economic advantage claim as well.
Miller Yacht also alleges that We disagree with the argument that
Appellees had substantial and repeated these contacts do not support jurisdiction
contact with New Jersey during the over this claim. First, we do not agree that
negotiations between the parties. we must apply an immediate or proximate
6
cause standard to determine whether a contacts to establish jurisdiction with
claim arises out of a defendant’s contacts regard to the plaintiff’s claims. Id.with a forum state and we do not read
Vetrotex involved contract claims and
Pinker, Vetrotex Certainteed Corp. v.
“there are different considerations in
Consolidated Fiber Glass Products Co.,
analyzing jurisdiction over contract claims
75 F.3d 147 (3d Cir. 1996), or Remick v.
and over certain tort claims.” Remick, 238
Manfredy, 238 F.3d 248, 255-56 (3d Cir.
F.3d at 255-56. Further, in contract claims
2001), as standing for such a proposition.
w e analyze the totality of th e
In Pinker, we had to determine whether a
circumstances surrounding a contract to
foreign issuer and sponsor of American
determine whether the exercise of
Depositary Receipts (“ADRs”) was subject
jurisdiction over the defendant is proper.
to personal jurisdiction in this country on
Id. at 256. We do not consider this
claims that it misrepresented material facts
totality of the circumstances test to be the
relevant to those ADRs.4 We concluded
equivalent of a requirement that the
t h a t because the foreign issuer
defendants’ contacts with the forum be the
“sponsor[ed] an ADR facility [in America,
proximate cause of the plaintiff’s claims.
it] purposely availed itself of the privilege
of conducting activities in the American Remick also does not support a
securities market, and thereby established proximate cause standard. Remick was a
the requisite minimum contacts with the breach of contract case, but involved
United States.” Pinker, 292 F.3d at 371 various tort claims as well. Id. at 256.
(internal quotation omitted). Importantly, With respect to those tort claims, we
we did not apply a proximate cause test to applied the effects test to determine if the
determine personal jurisdiction. Instead, defendant was subject to jurisdiction in
based solely on th e def enda nt’s Pennsylvania. Id. at 258. Similarly, in
sponsorship of the ADR facility at issue, IMO Industries, Inc. v. Kiekert AG, we
an action that was certainly not the applied the effects test to analyze whether
proximate cause of the fraudulent the defendant was subject to jurisdiction in
misrepresentation, we found that the New Jersey on the plaintiff’s intentional
defendant had the requisite minimum tort claims. 155 F.3d 254, 265-66 (3d Cir.
1998). The focus on the effects test in
both these cases convinces us that their
requirement that the tortious actions of the
4. defendant have a forum-directed purpose
In Pinker, the Court was confronted
is not applicable in the more traditional
with a statute that authorized nationwide
specific jurisdiction analysis. As pointed
service of process and, therefore, needed
out in Note 2 supra, the effects test
to determine if the defendant had
expressly requires that “the defendant
sufficient contacts with the United States
expressly aimed its tortious conduct at the
to support jurisdiction. Pinker, 292 F.2d
forum, and thereby made the forum the
at 369.
7
focal point of the tortious activity.” Id. at personal jurisdictio n analysis and
265. This requirement is reasonable indicating the fact-sensitive nature of that
within the effects test because it insures analysis).
that the defendant, who may not have any
This is the approach we take here, and
actual contact with the forum state, have
conclude that Appellees’ contacts with
sufficiently directed his tortious conduct at
New Jersey are sufficient to subject them
the state to render him subject to personal
to jurisdiction on Miller Yacht’s tortious
jurisdiction there. See id. at 265. Unlike
interference claim. First, Miller Yacht
this express requirement in the effects test,
a l l eg e s t h a t A p p e ll e e s se n t
the traditional specific jurisdiction analysis
communications into New Jersey in order
simply requires that the plaintiff’s claims
to set up their trip to China. We have been
“arise out of or relate to” the defendant’s
clear that such communications may be
forum contacts. Burger King, 471 U.S. at
factored into the minimum contacts
472 (internal quotations omitted). We do
analysis. Grand Entm’t Group, Ltd. v.
not agree with the argument that this
Star Media Sales, Inc., 988 F.2d 476, 482-
traditional requirement is the equivalent of
83 (3d Cir. 1993). Second, we cannot
t h e m o r e demanding relate dne ss
ignore the fact that Miller Yacht alleges
requirement of the effects test.
Appellees’ tortious interference resulted
We recognize that our conclusion that from their en gagin g the C hinese
a defendant’s contacts with a forum need companies to build the very boats that
not have been the proximate cause of the Miller Yacht alleges Appellees are using
plaintiff’s injuries in a tort case begs the misappropriated photos and floor plans to
question of what level of relationship is advertise. As described above, those
necessary under the “arise out of or relate photos and floor plans were obtained in
to” requirement. We need not address this New Jersey and were sent back into New
question that has plagued federal Courts of Jersey, after having been misappropriated,
Appeals and has resulted in divergent as part of Appellees’ sales efforts. It is
rules. We have not laid down a specific only in selling the boats that Miller Yacht
rule because we have approached each or Appellees could expect to get any kind
case individually and taken a “realistic of economic advantage from the building
approach” to analyzing a defendant’s agreement with the Chinese companies.
contacts with a forum. Mellon Bank (East) Thus, these sales efforts, and their New
PSFS, Nat’l Ass’n v. Farino, 960 F.2d Jersey-related activities, are vital parts of
1217, 1223 (3d Cir. 1992)(internal Miller Yacht’s tortious interference claims.
quotation omitted); see also Pennzoil The sum of these contacts is sufficient to
Prods. Co. v. Colelli & Assocs. Inc., 149 subject Appellees to personal jurisdiction
F .3d 197 , 203 (3d C ir. 1998 ) in New Jersey on M iller Yacht’s tortious
(acknowledging the dif ficu lty o f interference claim.
formulating bright-line rules in the
8
III. (1984). Because there are no allegations
that appellees’ contacts with the forum are
We easily conclude that jurisdiction
so “continuous and systematic” as to give
over Appellees is consistent with
rise to general jurisdiction, our inquiry is
traditional notions of fair play and
limited to specific jurisdiction. Specific
substantial justice. There is no compelling
jurisdiction permits the exercise of
evidence of record why it would be unfair
personal jurisdiction over non-resident
or unjust for Appellees to litigate this
defendant only if the plaintiff’s claims
dispute in New Jersey. Without such
“arise out of or relate to” the defendant’s
compelling evidence, they cannot avoid
forum contacts. Burger King Corp. v.
t h e Distr ict Court’s ap p r o p r ia te
Rudzewicz, 471 U.S. 462, 472 (1985).
jurisdiction.
Consequently, the specific jurisdiction
For these reasons, we will reverse the determination is both claim-specific, see
District Court’s order dismissing Miller Remick v. Manfredy, 238 F.3d 248, 255-56
Yacht’s complaint and remand the case to (3d Cir. 2001) (analyzing specific
the District Court. jurisdiction over tort and contract claims
separately); Gehling v. St. George’s Sch. of
Med., Ltd., 773 F.2d 539, 543-44 (3d Cir.
1985) (finding personal jurisdiction over
f r a u d u l en t m i s r e p re s e n t a ti o n a nd
SCIRICA, Chief Judge, concurring in part,
emotional distress claims, but not
dissenting in part.
negligence and breach of contract claims),
I write separately because I would find and defendant-specific, see Rusk v.
specific jurisdiction only as to Miller Savchuk, 444 U.S. 320, 332 (1980) (“The
Yacht’s unfair competition and trade dress requirements of International Shoe . . .
infringement claims against appellees must be met as to each defendant.”).5
Island Yacht and Mariner Yacht.
Nevertheless, because appellant’s claims
sound in tort, I would remand for the 5.
Due process requires that non-resident
District Court to consider appellees’ forum
defendants have “minimum contacts”
contacts under the “effects test.” See IMO
with the forum such that the exercise of
Indus., Inc. v. Kiekert AG, 155 F.3d 254,
personal jurisdiction does not offend
265-66 (3d Cir. 1998).
“traditional notions of fair play and
I. substantial justice.” International Shoe
Co. v. Washington, 326 U.S. 310, 316
Personal jurisdiction over a non-
(1945) (citing Milliken v. Meyer, 311
resident defendant may be asserted under
U.S. 457, 463 (1940)). The defendant’s
general or specific theories of jurisdiction.
contacts with the forum state must have a
See Helicopteros Nacionales de Colombia,
basis in some act by which the defendant
S.A. v. Hall, 466 U.S. 408, 414 & n.9
(continued...)
9
II. There is no averment in the complaint
or in the supporting affidavits that
While acknowledging the claim- and
appellees—two non-resident persons and
defendant-specific nature of the specific
t w o out-of-state corpora tions—ar e
jurisdiction inquiry, the majority concludes
collectively organized as a partnership. As
the allegations in the complaint require us
I read the complaint, the allegation that
to attribute the forum contacts of “any one
Smith and Bogachoff “act[ed] as partners”
individual Appellee to all of the
Appellees.” The majority reaches this
conclusion by inferring the existence of a
6.
“partnership” based upon Miller Yacht’s (...continued)
allegations that Smith and Bogachoff A Rule 12(b)(2) motion . . .
“act[ed] as partners” in their negotiations is inherently a matter
with Miller Yacht, in which they which requires resolution
represented Island Yacht and Mariner of factual issues outside the
Yacht, respectively. Although we accept pleadings, i.e. whether in
all allegations in the complaint as true and personam jurisdiction
construe all disputed facts in favor of the actually lies. Once the
plaintiff on a motion to dismiss under Fed. defense has been raised,
R. Civ. Pro. 12(b)(2), I do not believe it is then the plaintiff must
reasonable to infer the appellees engaged sustain its burden of proof
in a “partnership.” 6 in establishing
jurisdictional facts through
sworn affidavits or other
5.
(...continued) competent evidence. . . .
“purposefully avails itself of the [A]t no point may a
privilege of conducting activities within plaintiff rely on the bare
the forum State, thus invoking the pleadings alone in order to
benefits and protections of its laws.” withstand a defendant’s
Hansen v. Denckla, 357 U.S. 235, 253 Rule 12(b)(2) motion to
(1958). The “minimum contacts” dismiss for lack of in
analysis assesses the “relationship among personam jurisdiction.
the defendant, the forum, and the Once the motion is made,
litigation.” Shaffer v. Heitner, 433 U.S. plaintiff must respond with
186, 204 (1977). actual proofs, not mere
allegations.
6.
In acknowledging the procedural Patterson v. FBI, 893 F.2d 595, 603-604
distinctions between a Rule 12(b)(6) (3d Cir. 1990) (citing Time Share
motion and a Rule 12(b)(2) motion, we Vacation Club v. Atlantic Resorts, Ltd.,
have explained: 735 F.2d 61, 67 n.9 (3d Cir. 1984))
(continued...) (internal citations omitted).
10
merely suggests some level of coordinated Aggregating appellees’ contacts
conduct. 7 Of course, this relationship obscures important differences in their
ultimately may prove relevant to the individual forum activities and the alleged
jurisdictional analysis. See Rusk, 444 U.S. conduct giving rise to the claims asserted.
at 332 (“[T]he parties’ relationships with For example, Smith’s contacts with New
each other may be significant in evaluating Jersey in arranging his trip to China did
their ties to the forum.”). But on the not involve Bogachoff or Mariner Yacht.
allegations and affidavits presented, I Moreover, as Miller Yacht’s affidavit
cannot infer the existence of a partnership states, the China trip itself “was in
that would provide the basis for attributing furtherance of negotiations that took place
the jurisdictional contacts of one appellee between . . . Smith, Island Yacht Brokers
to them all.8 and Miller Yacht” relating to Island Yacht
becoming an exclusive dealer of “Marine
Trader” and “Trade Wind” yachts in
7.
The allegations do support an inference Maryland. Appellant App. 41. These
that Smith and Bogachoff acted as agents negotiations did not involve Bogachoff or
for Island Yacht Brokers and Mariner Mariner Yacht. Similarly, the primary
Trader respectively, and their forum forum contact relied upon by the
contacts as agents may be attributed to majority—receipt of the Miller Yacht sales
the appellee corporations accordingly. brochure in New Jersey— is apparently
Grand Entm’t Group v. Star Media attributable only to Smith in his capacity as
Sales, Inc., 988 F.2d 476, 483 (3d Cir. agent for Island Yacht. Even assuming
1993) (“[A]ctivities of a party’s agent Bogachoff had implied authority to act as
may count toward the minimum contacts Smith’s agent during the broker-dealer
necessary to support jurisdiction.”).
8.
Some courts have imputed jurisdictional
8.
contacts to foreign defendants in the (...continued)
absence of a partnership or other legal 1392-93 (7th Cir. 1983) (applying
entity based upon the conspiracy theory conspiracy theory of jurisdiction to
of jurisdiction. See, e.g., Jungquist v. Illinois long-arm statute). That said,
Sheikh Sultan Bin Khalifa Al Nahyan, “[w]hether personal jurisdiction can be
115 F.3d 1020, 1031 (D.C. Cir. 1997) obtained under a state long-arm statute
(recognizing that the conspiracy theory on a conspiracy rationale at all is a
of personal jurisdiction requires plaintiff question of state law.” Stauffacher v.
to plead with particularity “the Bennett, 969 F.2d 455, 460 (7th Cir.
conspiracy as well as the overt acts 1992). While it is unclear whether New
within the forum taken in furtherance of Jersey even recognizes the conspiracy
the conspiracy”) (citation omitted); theory of jurisdiction, we need not
Textor v. Bd. of Regents, 711 F.2d 1387, address this issue because Miller Yacht
(continued...) has not alleged an actionable conspiracy.
11
negotiations with Miller Yacht, this agency defendant, the forum, and the litigation.”
relationship should not provide a basis for Shaffer, 433 U.S. at 204.
imputing forum contacts by Smith to
At one end of the spectrum, the Court
Bogachoff or Mariner Yacht.
of Appeals for the First Circuit has held
I recognize the Supreme Court has that with respect to a tort claim, a non-
r e j e ct e d o v e r l y “ m e c h a n i c a l o r resident defendant’s forum contacts must
quantitative” tests of jurisdiction. Int’l provide the “cause in fact” and “legal
Shoe, 326 U.S. at 319. But even a realistic cause” for the plaintiff’s injury. Mass.
approach to specific jurisdiction must Sch. of Law, Inc. v. Am. Bar Assoc., 142
comport with due process, and due process F.3d 26, 35 (1st Cir. 1998); see also
requires that we consider the forum Marine v. Hyatt Corp., 793 F.2d 427, 430
contacts of each defendant independently (1st Cir. 1986) (holding that forum-related
according to the specific claims asserted. contacts must form a “material element of
proof” in order for the cause of action to
III.
“arise from or relate to” the forum
Even if the alleged forum-related contacts). At the other end of the
contacts could be attributed to all appellees spectrum, the Courts of Appeals for the
en masse, M iller Yacht’s claims do not Fifth and Ninth Circuits formulate a more
necessarily “arise out of or relate to” those expansive interpretation of “arise out of or
contacts. See Burger King, 471 U.S. at relate to,” under which a non-resident
472. The courts of appeals have adopted defendant’s forum contacts are sufficient if
divergent interpretations of “arise out of or they provide a “but for” cause for
relate to” as that phrase relates to the plaintiff’s injury. See Prejean v.
specific jurisdiction analysis. See United Sonatrach, Inc., 652 F.2d 1260, 1270 n.21
Elec. Radio & Mach. Workers of Am. v. (5th Cir. 1981) (noting that “contractual
163 Pleasant St. Corp., 960 F.2d 1080, contacts” may provide “but for” causation
1089 (1st Cir. 1992) (describing for a claim sounding in tort); Doe v. Am.
uncertainty among the circuits); see Nat’l Red Cross, 112 F.3d 1048, 1051 n.7
generally Mark M. Maloney, Specific (9th Cir. 1997) (“[T]he ‘but for’ test is still
Personal Jurisdiction and the “Arise from employed in determining whether a
or Relate to” Requirement...What Does It plaintiff’s injuries arose out of a
Mean?, 50 Wash. & Lee L. Rev. 1265 defendant’s forum-related activities.”).
(Summer 1993). The distinctions between Under this standard, a plaintiff’s claim
these interpretations are not without “arises out of or relates to” a foreign
constitutional significance, as the “arise defendant’s contacts with the forum if the
out of or relate to” requirement establishes defendant’s forum activities provide a link
a due process limitation on the degree of in the causal chain which ultimately leads
permissible attenuation between “the to plaintiff’s injury.
12
Still other courts have navigated a effectively blends the concepts of general
course between these positions. For and specific jurisdiction:
example, in Chew v. Dietrich, 143 F.3d 24We cannot simply aggregate all of
(2d Cir. 1998), the Court of Appeals for
a defendant’s contacts with a
Second Circuit has suggested a sliding
state—no matter how dissimilar in
scale approach to evaluating the
terms of geography, time, or
“relatedness” of specific jurisdiction
substance—as evidence of the
contacts, which more closely resembles the
constitutionally required minimum
“but for” standard in its potentially
contacts . . . [W]hen conducting
expansive scope:
business with a forum in one
[T]he relatedness test is but a part context, potential defendants
of a general inquiry which is should not have to wonder whether
designed to determine whether the some aggregation of other past and
exercise of personal jurisdiction in future forum contacts will render
a particular case does or does not them liable to suit there. Unless
offend “traditional notions of fair their contacts are continuous and
play and substantial justice.” . . . systematic enough to rise to the
Where the defendant has had only level of general jurisdiction,
limited contacts with the state it individuals and corporations must
may be appropriate to say that he be able to conduct interstate
will be subject to suit in that state business confident that transactions
only if the plaintiff’s injury was in one context will not come back
proximately caused by those to haunt them unexpectedly in
contacts. Where the defendant’s another.
contacts with the jurisdiction that
RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d
relate to the cause of action are
1272, 1277 (7th Cir. 1997) (citations
more substantial, however, it is not
omitted). The Supreme Court has yet to
unreasonable to say that the
definitively resolve the appropriate scope
defendant is subject to personal
of the “arise out of or relate to”
jurisdiction even though the acts
requirement. See Carnival Cruise Lines,
within the state are not the
Inc. v. Shute, 499 U.S. 585, 589 (1991)
proximate cause of the plaintiff’s
(declining to reach the scope of the
injury.
relatedness requirement despite having
143 F.3d at 29 (citations omitted). certified it for review).
By contrast, the Court of Appeals for Although we have not expressly
the Seventh Circuit has rejected this sort of articulated our view on the “arise out of or
“hybrid” jurisdictional analysis which relate to” requirement, our cases implicitly
apply an immediate or proximate cause
13
standard. In analyzing jurisdictional action,” are relevant to the minimum
contacts on a claim-by-claim basis, we contacts analysis. Vetrotex involved a
have been careful to note that forum breach of contract dispute over payments
contacts supporting a contract claim are due under a 1992 supply agreement
not necessarily relevant to establishing between Vetrotex and Consolidated Fiber
jurisdiction over a tort claim. For Glass. The district court dismissed the
example, in Remick, we noted “there are complaint for lack of specific jurisdiction.
different considerations in analyzing We affirmed noting various contracts
jurisdiction over contract claims and over between Vetrotex and Consolidated Fiber
certain tort claims.” 238 F.3d at 255-56. Glass over the previous ten years were not
In that case, we separately analyzed the sufficiently related to the claims based
forum contacts supporting jurisdiction upon the contested supply agreement to
over plaintiff’s breach of contract, tortious give rise to jurisdiction. The claim-by-
interference with contract, claim partitioning of jurisdictional contacts
m isappropriation of im age, c ivil evid ent in Rem ick and Vetro tex
conspiracy and defamation claims. In demonstrates that forum contacts which
finding specific jurisdiction over the merely provide a general context for the
breach of contract claim, we noted the parties’ relationship are insufficiently
contract had been solicited, negotiated, related to a claim to support specific
consummated and performed in the forum. jurisdiction.
At the same time however, we found
Moreover, our holding in Pinker v.
insufficient contacts to support jurisdiction
Roche Holdings, Ltd., 292 F.3d 361 (3d
o v e r plaintiff ’s def ama tio n a n d
Cir. 2002), supports application of the
misappropriation claims notwithstanding
proximate cause standard. In Pinker,
an express contractual relationship
investors filed a securities fraud class
between plaintiff and defendant clearly
action alleging foreign defendant Roche
situated in the forum. In finding specific
made material misrepresentations and
jurisdiction over plaintiff’s intentional
misleading statements in press releases and
interference with contract claim, we
reports filed with the Securities and
reasoned that although the claim sounded
Exchange Commission which caused
in tort, it was “necessarily related to the
plaintiffs to pay artificially high prices for
contract” that was the subject of the
Roche ADRs. The district court dismissed
alleged tortious interference. Id. at 260.
the complaint for lack of personal
Likewise, in Vetrotex CertainTeed jurisdiction and we affirmed. The majority
Corp. v. Consolidated Fiber Glass Prods. holds we based our dismissal “solely on
Co., 75 F.3d 147, 153 (3d Cir. 1995), we the defendant’s sponsorship of the ADR
concluded that only “dealings between the facility at issue, an action that certainly
parties in regard to the disputed contract, was not the proximate cause of the
not dealings unrelated to the cause of fraudulent misrepresentation.” But the
14
misrepresentation claim was not predicated Miller Yacht’s unfair competition and
on sponsorship of the ADRs per se, but trade dress infringement claims relate to
rather on the allegedly fraudulent misuse of its intellectual property, not to
information Roche filed with securities the mere acquisition or possession of that
regulators in connection with that property. 9 For example, the Lanham Act,
sponsorship. In finding Roche established 15 U.S.C. § 1125(a), on which Miller
minimum contacts by purposefully Yacht’s infringement of trade dress (Count
directing its activities towards the forum, I) and federal unfair competition claims
the court noted that “a foreign corporation (Count II) are based, prohibits the “use[] in
that has created an American market for its commerce” of any false descriptions or
securities can fairly expect that that market designations of origin which are likely to
will rely on reports and media releases cause confusion regarding the origin of
issued by the corporation.” Id. at 372. goods or services of another. Id.The forum contact in Pinker—reporting (emphasis added). Likewise, the New
incorrect or fraudulent information to Jersey Unfair Competition Act (Counts III
federal regulators— was the proximate and IV) prohibits a person from
c a u s e o f p l a in t i f fs ’ f r au d u l e n t appropriating “for his or their own use a
misrepresentation claim. name, brand, trade-mark, reputation or
goodwill of any maker in whose product
IV.
such merchant, firm or corporation deals.”
A. N.J. Stat. § 56: 4-1. A claim for unfair
competition under New Jersey common
The majority finds specific jurisdiction
law (Count V) is substantially similar.
over appellees based on “three important
American Tel & Tel. Co. v. Winback &
contacts, and the context of those
Conserve Program, Inc., 42 F.3d 1421,
contacts.” The first contact concerns
1433 (3d Cir. 1994).
Miller Yacht’s allegation that Smith and
Island Yacht came to New Jersey to Although receipt of the sales brochure
receive one of its sales brochures. by Smith and Island Yacht in New Jersey
Because receipt of the brochure represents may have provided the “first step” for
the “first step” to wa rds th e Miller Yacht’s unfair competition and
misappropriation of M iller Yacht’s trade dress infringement claims, this
photographs, floor plans and trade dress, contact at most might supply the “but for”
the majority concludes this contact
provides a sufficient jurisdictional basis
9.
for appellant’s common law and statutory There are no allegations that Smith
unfair competition and trade dress improperly acquired the brochure. It
infringement claims. I have a different appears Miller Yacht voluntarily
view. provided the brochure to Smith during
negotiations over the trademark licensing
and exclusive dealership agreements.
15
causation for these claims. The conduct Fiberfloat Corp., 897 F.2d 696, 700 n.10
which provides the immediate cause of (3d Cir. 1990) (noting that non-resident
injury relates to the subsequent improper defendant’s marketing strategy, including
use of the material contained in the advertising in national publications
brochure. Applying the proximate cause distributed in the forum, provided only
s t a n d a rd , M i l l e r Y a ch t ’ s u n fa ir tangential support for specific personal
competition and trade dress infringement jurisdiction); Gehling, 773 F.2d at 542
claims against Smith and Island Yacht do (holding that advertising in newspapers
not “arise out of or relate to” receipt of the which reach the forum are insufficient to
sales brochure. establish “minimum contacts”). Moreover,
there is no evidence in the record
B.
regarding the frequency with which Island
The majority observes that “plac[ing] Yacht advertised in these publications, the
the misappropriated photos and floor plans number of New Jersey residents reached,
in boating magazines circulated in New or whether Island Yacht had any
Jersey and in at least one brochure that was knowledge or control over the extent to
sent directly to a potential customer in which they targeted New Jersey
New Jersey” provides a “strong contact” in consumers. Nevertheless, the extent or
support of appellant’s unfair competition frequency of advertising in the forum may
and trade dress infringement claims. The be less significant where, as here, the
record reveals that these allegedly plaintiff’s unfair competition and trade
improper transmissions into the forum dress infringement claims arose directly
actually involve: (1) the use of allegedly out of the improper use of Miller Yacht’s
misappropriated photographs and floor photographs, plans and trade dress in
plans in Island Yacht advertisements commerce. Burger King, 471 U.S. at 476
which appear in trade publications n.18 (“So long as it creates a ‘substantial
distributed in New Jersey; and (2) the use connection’ with the forum, even a single
of allegedly misappropriated photographs act can support jurisdiction.”). I agree
by Mariner Yacht in a sales brochure with the majority that the allegations
distributed to a single New Jersey resident. relating to Island Yacht’s publication of
See JA 44, 47-48. These contacts should certain advertisements in trade journals
be evaluated separately to determine that reached New Jersey are sufficiently
whether they provide a sufficient basis for related to Miller Yacht’s unfair
exercising specific jurisdiction. competition and trade dress claims as to
provide specific jurisdiction over Island
Advertising in a trade publication that
Yacht with respect to those claims.
reaches the forum generally does not,
without more, provide a sufficient basis But there are no allegations or any
for exercising specific jurisdiction over a evidence in the record that appellee Smith
foreign defendant. See, e.g., Mesalic v. was involved in this advertising effort or
16
otherwise was engaged in conduct that provided appellees the opportunity to deal
would permit imputing Island Yacht’s with two Chinese companies with which
forum contacts to him. Nicholas v. Saul Miller Yacht apparently had preexisting
Stone & Co. LLC, 224 F.3d 179, 184 (3d business relationships to design and build
Cir. 2000) (“[J]urisdiction over . . . 34' and 38' double cabin and sedan yachts.
[individual] defendants does not exist The majority concludes these negotiations
simply because they are agents or provide a jurisdictional basis for Miller
employees of organizations w hich Yach t’s tortious interfe rence with
presumably are amenable to jurisdiction.”). prospective economic advantage claim.
Likewise, for reasons stated, I would not
To establish a claim for tortious
impute this contact to appellees Bogachoff
interference with prospective economic
or Mariner Yacht.
advantage, a plaintiff must show (1)
The second contact involves the unlawful, intentional interference with the
mailing of a Mariner Yacht brochure prospect of, or reasonable expectation of,
allegedly containing M iller Yacht’s economic advantage, and (2) a reasonable
photographs to a single New Jersey probability that the plaintiff would have
resident. This contact is in some ways received the anticipated economic benefits
more significant for jurisdictional purposes had there been no interference. See
than advertising in a regional trade Harp er-Lawrence, Inc. v. U nited
publication because it specifically targets Merchants & Mfrs., Inc., 619 A.2d 623,
a resident of the forum. And, here again, 630 (N.J. Super. Ct. App. Div. 1993).
plaintiff’s unfair competition and trade While the pre-contractual negotiations may
dress infringement claims arise directly out have provided appellees with names and
of the allegedly improper use of Miller contact information, there are no
Yacht’s photographs, plans and trade dress allegations that appellees solicited
in the sales brochure. As such, I agree business from or negotiated a business
with the majority that this contact gives relationship with the Chinese boat
rise to specific jurisdiction over Mariner manufacturers while in New Jersey. If
Yacht on the unfair competition and trade anything, it would appear that these
dress infringement claims. However, activities took place in China or from
because there is no allegation that appellees’ principle places of business
Bogachoff or Smith were involved in outside the forum. While the effect or
sending the sales brochure into New injury r e su l t in g f rom a ppe lle e s’
Jersey, there is no basis for imputing this interactions with these Chinese firms
contact to them. ultimately may have been felt by Miller
Yacht in New Jersey, I find no forum
C.
contacts which provide a basis for specific
The majority observes that the pre- jurisdiction on the tortious interference
contractual negotiations in New Jersey claim.
17
D. geography, time , or substance—as
evidence of the constitutionally required
Finally, in addition to appellees’
minimum contacts.” RAR, 107 F.3d at
discrete forum contacts, the majority
1277. Rather, specific jurisdiction will lie
suggests that appellees’ unrelated pre-
over a foreign defendant when the claim
misappropriation conduct in New Jersey
asserted “arises out of or relates to” the
provides a “nexus” between appellees and
foreign defendant’s contacts with the
the forum. For example, the majority
forum. Burger King, 461 U.S. at 472.
notes that appellees attended trade shows
Emphasizing contacts unrelated to the
in New Jersey “and in adjoining states,”
asserted causes of action blurs the
and advertised in magazines distributed in
fundamental distinction between specific
New Jersey. But there are no allegations
and general jurisdiction.
that this conduct relates to the claims
asserted. While stating these contacts are V.
not “essential to this litigation” and are
In sum, I would find that only Island
only “indirectly related to Millar Yacht’s
Ya c ht a nd Mariner Yacht have
trade dress and unfair competition claims,”
constitutionally sufficient “minimum
the majority concludes the “sum of these
contacts” with New Jersey to support
contacts shows that Appellees purposefully
specific jurisdiction as to plaintiff’s unfair
availed themselves of New Jersey.”
competition and trade dress infringement
A forum contact that might otherwise claims. I would not find specific
prove jurisdictionally insufficient under a jurisdiction over any of the appellees with
specific jurisdiction analysis may appear respect to the tortious interference with
more convincing when swaddled in the prospective economic advantage claim. I
more extensive, yet unrelated, forum would not end the jurisdictional inquiry
contacts of a foreign defendant. And the here, however.
contacts upon which the majority
Where a non-resident defendant’s
relies—attendance at trade shows,
contacts with the forum alone are
negotiating in the forum—may well go
insufficient to establish specific personal
toward establishing New Jersey’s general
jurisdiction, “we must consider whether
jurisdiction over appellees. But the parties
the application of Calder v. Jones, can
agree that appellees’ forum contacts are
change the outcome.” IMO Indus., 155
not so “continuous and systematic” to give
F.3d at 259-60 (citation omitted). In
rise to general jurisdiction. As such, I
Calder v. Jones, 465 U.S. 783 (1984), the
would not consider appellees’ pre-
Supreme Court set forth an “effects test”
misappropriation and unrelated forum
for determining personal jurisdiction over
contact as part of the specific jurisdiction
non-resident defendants who commit
analysis. “We cannot simply aggregate all
intentional torts with effects inside the
of a defendant’s contacts with a state—no
forum. “[U]nder Calder an intentional tort
matter how dissimilar in terms of
18
directed at the plaintiff and having the District Court to consider whether the
sufficient impact upon it in the forum may effects of appellees’ non-forum conduct
suffice to enhance otherwise insufficient give rise to specific jurisdiction under the
contacts with the forum such that the Calder framework.
‘minimum contacts’ prong of the Due
Process test is satisfied.” IMO Indus., 155
F.3d at 260.10 Because Miller Yacht’s
claims sound in tort, 11 I would remand for
10.
In IMO Industries, we held that to
establish jurisdiction under the “effects
test,” plaintiff must show: (1) defendant
committed an intentional tort; (2)
plaintiff felt the brunt of the harm in the
forum such that the forum can be said to
be the focal point of the harm suffered by
the plaintiff as a result of that tort; and
(3) defendant expressly aimed his
tortious conduct at the forum such that
the forum can be said to be the focal
point of the tortious activity. Id. at 265-
66. We recognized that this
“conservative reading of Calder may
significantly limit the types of business
tort cases that will satisfy the
requirements of personal jurisdiction,”
11.
but added that Calder did not “carve out (...continued)
a special intentional torts exception to the from the common law tort of unfair
traditional specific jurisdiction analysis, competition, and its language parallels
so that a plaintiff could always sue in his the protections afforded by state common
or her home state.” Id. law and statutory torts.”) (citation
omitted). Tortious interference with
11.
We have described “unfair prospective economic advantage
competition,” and causes of action under similarly sounds in tort, and other circuits
the Lanham Act as intentional business have recognized copyright infringement
torts. See Granite State Ins. Co. v. as an intentional tort. See, e.g., Bucklew
Aamco Transmissions, Inc., 57 F.3d 316, v. Hawkins, Ash, Baptie & Co., LLP, 329
321 (3d Cir. 1995) (“[T]he Lanham Act F.3d 923, 931 (7th Cir. 2003)
is derived generally and purposefully (“Copyright infringement . . . is an
(continued...) intentional tort.”).
19