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Dag Jewish Directories, Inc. v. Hebrew English Yellow Pages

April 13, 2009

DAG JEWISH DIRECTORIES, INC., PLAINTIFF,
v.
HEBREW ENGLISH YELLOW PAGES, INC.; YAAQOV AZARIA, A/K/A JACK AZARIA, A/K/A JACK GOLDBERG, DEFENDANTS.



The opinion of the court was delivered by: Katharine S. Hayden, U.S.D.J.

OPINION

I. INTRODUCTION

In this trademark dispute concerning a Georgia business directory, defendants have moved pursuant to Rules 4(e) and 12(b)(2) of the Federal Rules of Civil Procedure to dismiss the amended complaint*fn1 [D.E. # 21] for lack of personal jurisdiction. Alternatively, defendants request that the Court transfer this matter pursuant to 28 U.S.C. §§ 1406(a) or 1404(a). For the reasons below, the Court agrees with defendants that it lacks personal jurisdiction over them. It concludes, however, that the most judicious remedy is to grant defendants‟ alternative request to transfer the case to the United States District Court for the Northern District of Georgia, Atlanta Division.

II. FACTUAL BACKGROUND & PROCEDURAL HISTORY

As the parties are well-versed in the facts giving rise to this litigation, the Court need spend only a few moments discussing them here. Plaintiff DAG Jewish Directories, Inc. ("DAG") is a corporation formed under the laws of the State of New York, and has its principal place of business there, although it has a New Jersey office. Compl. ¶ 3. Defendant Hebrew English Yellow Pages, Inc. ("HEYP") is a Georgia corporation with its principal place of business located in the metropolitan Atlanta area. Compl. ¶ 4. Pursuant to a consent order entered in parallel litigation in Georgia state court (the "Georgia consent order"), HEYP has changed its corporate name to Atlanta Jewish English Business Guide, Inc. For continuity, however, the Court will continue to refer to defendant by the corporate name under which it was sued. Defendant Yaaqov Azaria ("Azaria") is the president of HEYP and is a resident of Georgia. Compl. ¶ 5.

DAG is the publisher of a semi-annual telephone directory ("DAG directory") serving the Jewish communities located in New York, New Jersey, Florida, and California. Compl. ¶ 6. DAG first published its directory in 1990, and earns revenue by selling advertising space within its pages. Id. Each edition of the DAG directory has been copyrighted, and is associated with various trademarks, most of which have been federally registered. Compl. ¶¶ 7-8. DAG alleges that one of the marks associated with its directory-"Hebrew English Yellow Pages"-is awaiting registration under a pending federal trademark application, and that it is protected by the common law in any event. Compl. ¶¶ 8-11.

On January 2, 1995, Azaria signed an employment agreement with Dapey-Assaf, Ltd. ("Dapey-Assaf"), a predecessor-in-interest to DAG. (Dapey-Assaf was formed in 1989, and merged into DAG Media, Inc. in 2000. DAG Media, Inc., in turn, merged with the present DAG entity in 2006.). Compl. ¶ 14; Certification of Assaf Ran ("Ran Cert.") ¶¶ 3-5. The employment agreement, which contained an express New Jersey forum selection clause, prohibited Azaria from, inter alia, misusing any confidential information obtained through that employment, including intellectual property regarding the company‟s distribution method, business plans, employee training, and pricing. Compl. ¶¶ 14-17.*fn2 Azaria‟s employment terminated at DapeyAssaf in 1996. Ran Cert. ¶ 58. The complaint does not allege that Azaria was required to (or did) maintain any contacts with New Jersey during his employment with Dapey-Assaf. For his part, Azaria declares that: (1) his employment with Dapey-Assaf took place exclusively in New York; (2) he has never conducted any business activity in New Jersey; and (3) his last visit to this state occurred in 1999, was of a personal nature, and during that time he engaged in no business activity of any kind. Affidavit of Yaaqov Azaria ("Azaria Aff.") ¶ 5. DAG does not dispute these declarations.

Azaria founded HEYP in 2008 in order to publish and distribute a directory in Georgia (the "HEYP directory") modeled after the DAG directory, which HEYP intended to name "Hebrew English Yellow Pages." Compl. ¶ 12-13. DAG filed suit in this Court on January 6, 2009 [D.E. # 1] seeking damages and emergent injunctive relief as a result of HEYP‟s plan to distribute its directory. Compl. ¶¶ 15, 17. The complaint asserted various causes of action under the federal Lanham Act, New Jersey statutory law, and the common law. Compl. ¶¶ 27-79. Specifically, DAG alleged that Azaria and his employees unlawfully utilized DAG‟s protected marks in seeking potential advertisement customers for the HEYP directory, and that the HEYP directory itself infringed DAG‟s marks by suggesting an affiliation with the DAG directory. Compl. ¶ 15. DAG further alleged that Azaria‟s use of a business model and customer procurement method that was identical or substantially similar to DAG‟s constituted unlawful misappropriation of proprietary business information, in violation of his 1995 employment agreement with Dapey-Assaf. Compl. ¶¶ 15-19. Finally, DAG averred that HEYP had breached its obligations under the Georgia consent order by continuing to misappropriate the marks that it had previously agreed not to use. Compl. ¶¶ 20-26.

HEYP asserts, and DAG concedes, that HEYP does no business in New Jersey, nor does it maintain offices, agents, or representatives within its borders.*fn3 The HEYP directory now at issue has and will only be distributed within the State of Georgia. Moreover, all of Azaria‟s and HEYP‟s actions taken in furtherance of publishing and distributing the HEYP directory occurred in the State of Georgia. The amended complaint does not allege that any of defendants‟ actions were either taken in or are directly connected to the State of New Jersey.

On January 6, 2009, the Court declined to issue the temporary restraints which DAG requested in its complaint [D.E. # 4].*fn4 Instead, it granted DAG limited discovery [D.E. # 4] and set a February 10, 2009 hearing date on DAG‟s motion to preliminarily enjoin the then-impending distribution of the HEYP directory. The Court subsequently denied DAG‟s renewed application (filed on January 8, 2009) for a temporary restraining order [D.E. # 6]. After oral argument on February 10, 2009, the Court orally denied DAG‟s motion for a preliminary injunction [D.E. # 30], and granted leave to HEYP to file the instant motion to dismiss or transfer this case [D.E. # 34]. On March 13, 2009, DAG again requested the Court to issue temporary restraints based on a disputed mark appearing on the cover of the HEYP directory [D.E. # 38], which the Court denied given the looming jurisdictional issue [D.E. # 41].

III. DISCUSSION

A. Legal Standards

1. Personal Jurisdiction

A district court "may assert personal jurisdiction over a nonresident of the state in which [it] sits to the extent authorized by the law of that state." Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 436 (3d Cir. 1987). The New Jersey long-arm statute extends to the outermost limits permitted by the Fourteenth Amendment‟s Due Process Clause. Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 145 (3d Cir. 1992). Thus, district courts in this state may exercise personal jurisdiction over nonresident defendants if they have established "certain minimum contacts with [New Jersey] such that the maintenance of the suit ...


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