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Powerhouse Equipment & Engineering Co., Inc. v. Power Mechanical, Inc.

United States District Court, D. New Jersey

July 25, 2019

POWERHOUSE EQUIPMENT & ENGINEERING CO., INC., Plaintiff,
v.
POWER MECHANICAL, INC. and POWERHOUSE VALVE SERVICES, LLC, Defendants.

          WILLIAM P. RUBLEY EDWARD A. CORMA SUBRANNI ZAUBER, LLC On behalf of Plaintiff

          DAVID J. SHANNON MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN WOODLAND FALLS CORPORATE PARK CHERRY HILL, N.J. 08002 On behalf of Defendants

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         In this matter that concerns claims of trademark infringement, pending before the Court is Defendants' motion to dismiss the matter for lack of personal jurisdiction. For the reasons expressed below, Defendants' motion will be granted, and the matter shall be transferred to the U.S. District Court for the Eastern District of Virginia.

         BACKGROUND

         Plaintiff Powerhouse Equipment & Engineering Co, Inc., a New Jersey-based company, claims that Defendants, Power Mechanical, Inc. (“Power Mechanical”) and Powerhouse Valve Services LLC (“PVS”), both based in Virginia, have infringed on Plaintiff's mark “Powerhouse.” Plaintiff claims that beginning in 1982, Plaintiff used “Powerhouse” as a trademark, which has a distinctive flame logo, lettering, and color scheme. Plaintiff claims that in October 2016, Defendant Power Mechanical formed PVS, which Plaintiff claims markets valve repair services, plant shutdown services, valve inventory management, and sales of valves and parts. Plaintiff claims that soon thereafter, PVS, and its parent company Power Mechanical, started using the trademark “Powerhouse Valve” which has a similar flame logo design, lettering, and color scheme used by Plaintiff in its “Powerhouse” mark.

         On September 6, 2018, this Court denied Plaintiff's motion for a preliminary injunction. (Docket No. 19.) The Court also dismissed without prejudice Defendants' motion to dismiss for lack of personal jurisdiction. (Id.) The Court directed the parties to undertake limited discovery relevant to personal jurisdiction over Defendants.[1] (Id.) The parties have completed jurisdictional discovery, and Defendants have again moved to dismiss Plaintiff's claims against them for lack of personal jurisdiction. In the alternative to dismissal, Defendants seek to have the case transferred to the Eastern District of Virginia. Plaintiff has opposed Defendants' motion, except that Plaintiff argues that if the Court finds that personal jurisdiction is lacking, the Court should transfer, and not dismiss, its case.

         DISCUSSION

         A. Subject matter jurisdiction

         This is an action for trademark infringement, unfair competition, and dilution of trademark arising under the Lanham Act, 15 U.S.C. §§ 1051 et seq. Subject matter jurisdiction is based on 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331 and 1338(b).

         B. Standard for Motion to Dismiss for Lack of Personal Jurisdiction

         Federal Rule of Civil Procedure 12(b)(2) provides for dismissal of an action when the Court does not have personal jurisdiction over a defendant. “Once challenged, the plaintiff bears the burden of establishing personal jurisdiction.” O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (citing Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001)). In deciding a motion to dismiss for lack of personal jurisdiction, the Court must “accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff.” Carteret Sav. Bank v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir.), cert. denied, 506 U.S. 817 (1992) (citations omitted).

         A defendant is subject to the jurisdiction of a United States district court if the defendant “is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located[.]” Fed.R.Civ.P. 4(k)(1)(A). “A federal court sitting in New Jersey has jurisdiction over parties to the extent provided under New Jersey state law.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004)(citations omitted). The New Jersey long-arm statute “permits the exercise of personal jurisdiction to the fullest limits of due process.” IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998) (citing DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 284 (3d Cir. 1981)).

         Under the Due Process clause, the exercise of personal jurisdiction over a non-resident defendant is appropriate when the defendant has “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). A defendant establishes minimum contacts by “‘purposefully avail[ing] itself of the privilege of conducting activities within the forum State, '” thereby invoking “‘the benefits and protections of [the forum State's] laws.'” Asahi Metal Indus. Co., Ltd. v. Sup. Ct. of California, 480 U.S. 102, 109 (1987) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). This “purposeful availment” requirement assures that the defendant could reasonably anticipate being haled into court in the forum and is not haled into a forum as a result of “random, ” “fortuitous” or “attenuated” contacts with the forum state. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980); see also Burger King Corp., 471 U.S. at 472, 475 (internal citations omitted).

         In deciding whether a defendant's contacts with a forum are sufficient to confer personal jurisdiction over that party, the Court must consider whether such contacts are related to or arise out of the cause of action at issue in the case. The Court may exercise specific personal jurisdiction over a defendant where the cause of action is related to or arises out of activities by the defendant that took place within the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984). If the cause of action has no relationship to a defendant's contacts with a forum state, the Court may nonetheless exercise general personal jurisdiction if the defendant has conducted “continuous and systematic” business activities in the forum state. Id. at 416.

         Once the Court determines that the defendant has minimum contacts with the forum state, it must also consider whether the assertion of personal jurisdiction over the defendant “comport[s] with ‘fair play and substantial justice'” to satisfy the due process test. Burger King Corp., 471 U.S. at 476 (quoting Int'l Shoe, 326 U.S. at 320). In this regard, it must be reasonable to require the defendant to litigate the suit in the forum state, and a court may consider the following factors to determine reasonableness: the burden on the defendant, the forum state's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining an efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies. Id. at 477 (citing World Wide Volkswagen, 444 U.S. at 292).

         In the case of an intentional tort, the “effects test” is applied.[2] The Calder “effects test” requires the plaintiff to show the following:

(1) The defendant committed an intentional tort;
(2) The 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;
(3) The 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.

IMO Industries, Inc. v. Kiekert AG, 155 F.3d 254, 265-66 (3d Cir. 1998) (discussing Calder v. Jones, 465 U.S. 783 (1984))). “[I]n order to make out the third prong of this test, the plaintiff must show that the defendant knew that the plaintiff would suffer the brunt of the harm caused by the tortious conduct in the forum, and point to specific activity indicating that the defendant expressly aimed its tortious conduct at the forum.” Id.

         C. ...


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