Sweetgreen, Inc. v. Sweet Leaf, Inc.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SWEETGREEN, INC.,
Plaintiff,
v. Civil Action No. 11-cv-00859 (JDB)
SWEET LEAF, INC., et al.,
Defendants.
MEMORANDUM OPINION
Plaintiff Sweetgreen, Inc., brings this action against defendant Sweet Leaf, Inc., and its
owners Shifteh Matini, Arash Matini, and Arita Matini for trademark infringement and unfair
competition. Plaintiff asserts six claims against defendants: (1) trademark infringement under 15
U.S.C. § 1114; (2) unfair competition, false designation of origin, and false and misleading
representation under 15 U.S.C. § 1125(a); (3) trade dress infringement under 15 U.S.C.
§ 1125(a); (4) unfair competition under 28 D.C. Code § 3904(a), (b), (s); (5) trademark
infringement and unfair competition under District of Columbia common law; and (6) a claim for
an accounting of damages under 15 U.S.C. § 1117. Now before the Court is defendants’ motion
to dismiss the suit for lack of personal jurisdiction and improper venue, or in the alternative, to
transfer the case to the United States District Court for the Eastern District of Virginia. Upon
consideration of the parties’ memoranda, the applicable law, and the entire record herein, and for
the reasons stated below, the Court will grant defendants’ motion and transfer this action to the
United States District Court for the Eastern District of Virginia.
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I. Background
Plaintiff, a Delaware corporation doing business in Washington, D.C., operates a
restaurant chain specializing in salads, wraps, and frozen yogurt. Compl. ¶¶ 1, 12 [Docket Entry
1]. In connection with this business, plaintiff owns and uses several federally registered
trademarks, including the “SWEETGREEN” mark and a two-toned leaf design. Compl.
¶¶ 12–25. Plaintiff also owns the domain . Compl. ¶ 29. Plaintiff opened its
first store in August 2007, and presently operates four stores in Washington, D.C., one store in
Maryland, two stores in Virginia, and two stores in the Philadelphia, Pennsylvania area. Pl.’s
Opp’n to Defs.’ Mot. to Dismiss or Transfer at 1–2 [Docket Entry 14] (“Pl.’s Opp’n”).
Defendants, a Virginia corporation doing business in Virginia and its owners, operate a
restaurant in McLean, Virginia, which features salads, sandwiches, and yogurt.1 Compl. ¶ 2.
Defendants operate the domain and use their website to advertise their
goods and services. Compl. ¶ 37. Defendants began operating their business on June 1, 2009.
Defs.’ Mot. to Dismiss or Transfer at 2 [Docket Entry 13-1] (“Defs.’MTD”).
At some point, plaintiff became aware of defendants’ use of a similar mark and two-
toned leaf design in connection with defendants’ competing restaurant business. Compl.
¶¶ 30–31. Plaintiff asserts that defendants’ marks are confusingly similar to those on which
plaintiff holds superior rights, and that defendants’ intention is to misappropriate plaintiff’s
goodwill. Compl. ¶¶ 30–36, 43. Plaintiff filed this action after its attempts to reach an agreement
with defendants regarding the use of the marks were unsuccessful. Compl. ¶ 39.
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At the time this litigation commenced, defendants were in the process of opening a
second store in Vienna, Virginia. The new location has since opened.
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Defendants have now filed a motion to dismiss or transfer the case, arguing that this
Court lacks personal jurisdiction over them and that venue in the District of Columbia is
improper. Plaintiff opposes the motion, arguing that this Court has jurisdiction under the District
of Columbia’s long-arm statute. See D.C. Code § 13-423.
II. Analysis
Under Federal Rule of Civil Procedure 12(b)(2), a plaintiff bears the burden of
establishing a court’s personal jurisdiction over a defendant. Where, as here, there has been no
jurisdictional discovery, a plaintiff need only make a prima facie showing of the pertinent
jurisdictional facts in order to meet that burden. See Mwani v. bin Laden, 417 F.3d 1, 7 (D.C.
Cir. 2005); see also Brunson v. Kalil & Co., Inc., 404 F. Supp. 2d 221, 226 (D.D.C. 2005).
“Moreover, to establish a prima facie case, plaintiffs are not limited to evidence that meets the
standards of admissibility required by the district court. Rather, they may rest their argument on
their pleadings, bolstered by such affidavits and other written materials as they can otherwise
obtain.” Mwani, 417 F.3d at 7. Nevertheless, a plaintiff must allege “specific facts upon which
personal jurisdiction may be based,” Blumenthal v. Drudge, 992 F. Supp. 44, 53 (D.D.C. 1998),
and cannot rely on conclusory allegations, see Elemary v. Philipp Holzmann A.G., 533 F. Supp.
2d 116, 121 (D.D.C. 2008).
The Court may exercise personal jurisdiction over a non-resident defendant either by (1)
finding general jurisdiction over the party, allowing the court to entertain a suit against a
defendant “without regard to the claim’s relationship vel non to the defendant's forum-linked
activity,” or (2) finding specific jurisdiction based on “acts of a defendant that touch and concern
the forum.” Steinberg v. Int'l Criminal Police Org., 672 F.2d 927, 928 (D.C. Cir. 1981); accord
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Kopff v. Battaglia, 425 F. Supp. 2d 76, 81 (D.D.C. 2006).
Here, plaintiff asserts that either general or specific jurisdiction over defendants is
appropriate in light of the totality of defendants’ contacts with the District of Columbia. First,
plaintiff contends that defendants maintain an interactive website targeted toward residents of the
District of Columbia and thereby offer their goods and services for sale to District of Columbia
residents. See Compl. ¶ 10. Next, plaintiff argues, defendants maintain several pages on
Facebook and Twitter that advertise their goods and services and can be viewed from
Washington, D.C. See Pl.’s Opp’n at 2–3. In addition, defendants’ business is listed on Yelp, a
third-party website that allows users to review local businesses. Id. at 6. The business was also
reviewed by the Washingtonian, a magazine catering to the Washington, D.C. region; defendants
posted a link to that article on their Facebook page. Id. at 3. Finally, plaintiff asserts that
defendants have contacted a real estate broker to consider the possibility of opening a store in
Washington. Id.
To establish general jurisdiction over a non-resident defendant corporation, a plaintiff
must show that the corporation is “doing business” in the District of Columbia. See D.C. Code
§ 13-334(a).2 A plaintiff must further show that the defendant has “continuous and systematic”
business contact with the forum state such that general jurisdiction over the defendant is
“reasonable and just.” See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415
(1984); see also Gorman, 293 F.3d at 510 (noting that the reach of general jurisdiction under
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While this statute is facially concerned with service of process, the D.C. Circuit has
held that the statute “gives rise to personal jurisdiction over a foreign corporation doing business
in the District.” Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 510 n.1 (D.C. Cir. 2002)
(citing AMAF Int'l Corp. v. Ralston Purina Co., 428 A.2d 849, 850 (D.C. 1981)).
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§ 13-334(a) is “co-extensive with the reach of constitutional due process”). Due process requires
that the defendants’ “conduct and connection with the forum State” is such that they should
“reasonably anticipate being haled into court there.” World-Wide Volkswagon Corp. v.
Woodson, 444 U.S. 286, 297 (1980).
These conditions are not met here. Defendants’ website, Twitter, and Facebook pages are
all informational in nature; no business is conducted on or through the websites. See Defs.’ MTD
at 5–6; see also Decl. of Arash Matini ¶¶ 9–10 [Docket Entry 13-5]. “Mere accessibility” of a
website in the forum is not a sufficient “foundation upon which to base personal jurisdiction.”
GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1346 (D.C. Cir. 2000).
Defendants’ contact with a real estate broker involved only one phone inquiry in which the
defendants reached the broker’s voicemail. See Decl. of John Asadoorian ¶ 3 [Docket Entry 14-
7]. Plaintiff has not alleged that defendants had any serious discussion with the broker about the
possibility of branching out into D.C., or that they actually did so. Taken together, then,
defendants’ actions do not constitute the kind of “continuous and systematic” business contact
necessary to establish that defendants are “doing business” in the District of Columbia in such a
manner that they would expect to be “haled into court” in the District for their actions.
To establish specific jurisdiction over a non-resident defendant, a plaintiff must plead
facts that both (1) bring the case within the scope of the District of Columbia’s long-arm statute
and (2) satisfy the constitutional requirements of due process. See GTE New Media Servs., Inc.,
199 F.3d at 1347. The relevant portion of the District’s long-arm statute states:
(a) A District of Columbia court may exercise personal jurisdiction over a person,
who acts directly or by an agent, as to a claim for relief arising from the person's
--
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(1) transacting any business in the District of Columbia; [or]
...
(4) causing tortious injury in the District of Columbia by an act or
omission outside the District of Columbia if he regularly does or solicits
business, engages in any other persistent course of conduct, or derives
substantial revenue from goods used or consumed, or services rendered, in
the District of Columbia;
D.C. Code § 13-423(a)(1), (4). A claim for relief under either of these provisions must “aris[e]
from” the same acts conferring jurisdiction over the defendant. D.C. Code § 13-423(b).
This Circuit has interpreted § 13-423(a)(1)’s “transacting any business” language to
confer jurisdiction to the full extent permitted by the Due Process Clause of the United States
Constitution when a claim arises out of business transacted in the District of Columbia. See
United States v. Ferrara, 54 F.3d 825, 828 (D.C. Cir. 1995) (citing Hummel v. Koehler, 458 A.2d
1187, 1190 (D.C. 1983)). Hence, the only question for this Court is whether defendants
purposefully established “minimum contacts with [the District of Columbia] such that the
maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’”
Helmer v. Doletskaya, 393 F.3d 201 (D.C. Cir. 2004) (citing Int'l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)) (alteration in original). As discussed previously, defendants conduct no
business in the District, and their goods and services are not available through their passive
website. Defendants’ limited consideration of real estate in the District does not rise to the level
of transacting any business within D.C. borders. Therefore, defendants do not “transact[ ] any
business in the District of Columbia” within the meaning of § 13-423(a)(1).
Plaintiff argues that this Court has jurisdiction under § 13-423(a)(4), which grants
jurisdiction for acts or omissions outside the District. To establish jurisdiction under this clause,
a plaintiff must show (1) that it suffered a tortious injury in the District of Columbia; (2) that the
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injury was caused by the defendant’s act or omission outside of the District of Columbia; and (3)
that the defendant “regularly does or solicits business, engages in any other persistent course of
conduct, or derives substantial revenue from goods used or consumed, or services rendered, in
the District of Columbia.” D.C. Code § 13-423(a)(4); see also GTE New Media Servs., Inc., 199
F.3d at 1347. Because there is no evidence that defendants regularly do or solicit business or
engage in any other persistent course of conduct in the District, the Court does not have
jurisdiction under § 13-423(a)(4).
To repeat, defendants’ passive websites alone do not provide a basis for jurisdiction.
Their Facebook pages and Twitter accounts, while interactive, are more like a broad national
advertising campaign than a website engaging in e-commerce. See Miller Yacht Sales, Inc. v.
Smith, 384 F.3d 93, 106 (3d Cir. 2004) (finding that a national advertising campaign by itself is
not sufficient for exercising personal jurisdiction); Federated Rural Elec. Ins. Corp. v. Kootenai
Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994) (same). The existence of the Yelp page does
nothing to support a finding of personal jurisdiction, as the information contained on the page is
monitored by Yelp employees and the reviews are posted by customers, not the business owner.
Plaintiff points to several self-identified Washington, D.C., residents who have reviewed the
restaurant on Yelp. See Pl.’s Opp’n at 6. The fact that individual D.C. residents have visited the
defendants’ business does not show that defendants “solicited” D.C. residents as a group.
Finally, defendants’ consideration of a possible business expansion into the District consisted of
one isolated phone call, hardly a “persistent course of conduct.”
Plaintiff’s strongest argument in favor of jurisdiction under § 13-423(a)(4) is that
defendants posted a link to a review in the Washingtonian on one of their Facebook pages. There
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is no evidence here that defendants solicited the review or contracted with a D.C. entity in order
to receive a review in the Washingtonian. See Decl. of Arash Matini ¶ 8. Hence, this situation is
distinguishable from cases under the long-arm statute where jurisdiction has been found to exist
based on newspaper advertising. See Shoppers Food Warehouse v. Moreno, 746 A.2d 320, 332
(D.C. 2000) (reasoning that personal jurisdiction was proper because Shoppers contracted with a
District business, the Washington Post, to place the advertisement); Heroes, Inc. v. Heroes
Foundation, 958 F. Supp. 1, 3 (D.D.C. 1996) (finding sufficient contacts with the District when
defendant’s business partner placed an advertisement in the Washington Post with the
knowledge and permission of the defendants, and the defendants received financial contributions
as a direct result of the ad). Although defendants did post the link on their Facebook page, they
merely used the positive review they received to further target their own audience. Posting a link
to the review on their Facebook page was just the business’s way of capitalizing on positive
publicity, and was not “purposely directed” toward the District of Columbia or its residents.
This Court recognizes that the “[m]etropolitan Washington, D.C. area functions, in many
respects, as a unified legal and commercial community.” Shoppers Food Warehouse, 746 A.2d at
332. This fact, however, does not dilute the requirement that a defendant business avail itself of
the benefits of doing business in the District of Columbia before it can be sued here. Taken
together, the actions of defendants are not enough to show that they solicited business or
engaged in any other persistent course of conduct within the District of Columbia as required by
§ 13-423.3
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Having decided that this Court has no personal jurisdiction over defendants, this Court
need not address whether venue is also improper.
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Defendants have requested that this case be transferred to the United States District Court
for the Eastern District of Virginia. See Defs.’ MTD at 8. The Court may transfer an action even
though it lacks personal jurisdiction over the defendants. See Narthex Consulting Corp. v. Watt,
722 F.2d 779, 789 (D.C. Cir. 1983); Hoffman v. Fairfax Cnty Redev. & Hous. Auth., 276 F.
Supp.2d 14, 16 n.1 (D.D.C. 2003). Transfer is appropriate under 28 U.S.C. § 1406(a) “when
procedural obstacles [such as lack of personal jurisdiction or improper venue] impede an
expeditious and orderly adjudication . . . on the merits.” Sinclair v. Kleindienst, 711 F.2d 291,
293-94 (D.C. Cir. 1983) (citing Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67 (1962)). The
decision to transfer an action on this basis is left to the discretion of the court. See
Novak-Canzeri v. Saud, 864 F. Supp. 203, 207 (D.D.C. 1994).
In a case filed in an improper jurisdiction, a court, in the interest of justice, may transfer
the action to any other district where it could have been brought. 28 U.S.C. § 1406(a). Venue for
this action is proper in:
(1) a judicial district where any defendant resides, if all defendants are residents
of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving
rise to the claim occurred . . . ; or
(3) if there is no district in which an action may otherwise be brought as provided
in this section, any judicial district in which any defendant is subject to the court's
personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b). The events giving rise to plaintiff’s claims occurred in the Eastern District
of Virginia, where defendants live and operate their business; it is there that the court may
exercise personal jurisdiction and where venue is proper. Assuming without deciding that
plaintiff states viable claims, in the interest of justice this Court will transfer this action to the
United States District Court for the Eastern District of Virginia.
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III. Conclusion
For the forgoing reasons, defendants’ motion will be granted and the case transferred to
the United States District Court for the Eastern District of Virginia. A separate Order
accompanies this Memorandum Opinion.
SO ORDERED.
/s/
John D. Bates
United States District Judge
Dated: March 23, 2012
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