Opinion
CASE NO. 8:11-CV-79-T-17TGW.
September 27, 2011
ORDER
This cause is before the Court on:
Dkt. 11 Motion to Dismiss or Transfer Venue, or in the Alternative, a Motion for More Definite Statement Dkt. 12 Affidavit Dkt. 13 Affidavit Dkt. 15 Opposition Memorandum Plaintiffs' Complaint includes: 15 U.S.C. Sec. 1114 15 U.S.C. Sec. 1125 et seq. 15 U.S.C. Sec. 1114 15 U.S.C. Sec. 1125 15 U.S.C. Sec. 1125 Count I Defamation Count II Trade Libel or Injurious Falsehood Count III Tortious Interference with Contract Count IV Tortious Interference with Prospective Business Relationships Count V Invasion of Privacy Count VI Federal Trademark Infringement Under (1) Count VII Federal Unfair Competition Under (a) Count VIII Contributory Federal Trademark Infringement Under 15 U.S.C. Sec. 1114(1) Count IX Vicarious Federal Trademark Infringement Under (a) Count X Contributory Federal Unfair Competition Under (a) Count XI Vicarious Federal Unfair Competition Under (a) Count XII Common Law Trademark Infringement Count XIII Common Law Unfair Competition Count XIV Civil Conspiracy Plaintiffs seek preliminary and permanent injunctive relief, the award of compensatory damages, the award of punitive damages, and the award of attorney's fees and court costs.The basis of jurisdiction is diversity, and federal question. The state law claims are based on the same facts asserted in federal claims.
I. Motion to Dismiss
Defendant Nowak moves to dismiss the Complaint for failure to state a claim, lack of standing, lack of personal jurisdiction, and improper venue; in the alternative, Defendant Nowak moves for a more definite statement.
A. Failure to State a Claim
Defendant Nowak moves to dismiss for failure to state a claim. Defendant Nowak argues that the Complaint is a "shotgun" complaint; each successive count incorporates all allegations of the preceding counts. In the alternative, Defendant Nowak moves for a more definite statement.
Plaintiffs argue that the Complaint is not a "shotgun" pleading. Plaintiffs argue that the trademark infringement and unfair competition claims rest on identical facts in application to nearly identical law, and that the remaining claims all stem from the same core of operative facts: Defendant posted false information on his website in an effort to destroy the reputation of the individual plaintiffs and the corporate plaintiff. Plaintiffs argue that Defendant is not faced with the task of determining the factual and legal basis of the claims.
A "shotgun" pleading is one which incorporates every antecedent allegation by reference. Wagner v. First Horizon Pharmaceutical Corp., 464 F.3d 1273 (11th Cir. 2006); Byrne v. Nezhat, 261 F.3d 1075 (11th Cir. 2001).
After consideration, the Court grants the Motion for More Definite Statement. The Court denies the Motion to Dismiss as to this issue. Plaintiffs shall file an amended complaint which complies with the Federal Rules of Civil Procedure within fourteen days.
B. Standing
Defendant Nowak argues that Plaintiff Advantage Trim Lumber of Florida, Inc. is a different company than Advantage Trim Lumber Company, Inc., a New York corporation, which owns the federal registered trademarks "Advantage Trim Lumber" and "IPEDepot." Defendant Nowak argues that none of the Plaintiffs own the referenced trademarks, and therefore lack standing to assert claims of infringement of those marks or claims related to unfair competition related to Defendant Nowak's alleged use of those marks.
Defendant Nowak moves to dismiss Counts VI, VII, VIII, IX, X, XI, XII and XIII for lack of standing. Defendant Nowak argues that the remaining claims are state law claims, and those claims also should be dismissed for lack of standing, as the alleged injury is to the New York corporation and not the Florida Plaintiff. Defendant Nowak also argues that if the real party in interest is the New York corporation, then there is no diversity jurisdiction.
Plaintiffs respond that the ownership of a mark is not dispositive to actions brought under 15 U.S.C. Sec. 1125(a). Plaintiffs argue that the term "registrant" includes the legal representatives of the registrant. 15 U.S.C. Sec. 1127. Plaintiffs argue they are the legal representatives of Advantage Trim Lumber Company, Inc. and therefore have standing.
Plaintiffs further argue that Defendant's affidavit shows that Defendant knew Plaintiffs purchased a home in Florida in 2006, and that they had business offices "near their home" in Florida. Plaintiffs argue that Defendant specifically targeted Plaintiffs, with the knowledge that Plaintiffs lived in Florida and the business had an office in Florida.
Plaintiffs rely on Dial Corp. v. Encina Corp., 643 F.Supp. 951, 953 (S.D. Fla. 1986) (quoting FRA S.p.A v. Surg-O-Flex of America, Inc., 415 F.Supp. 421 (1976)) and Pandora Jewelers 1995, Inc. v. Pandora Jewelry, LLC, 2010 WL 5393625, *3 (S.D.Fla. 12/21/2010).
Plaintiffs have filed an affidavit attesting that Plaintiffs are legal representatives of Advantage Trim Lumber Company, Inc.
After considering the allegations of the Complaint and the supporting affidavits, the Court denies the Motion to Dismiss for lack of standing.
B. Subject Matter Jurisdiction
Defendant argues that Plaintiffs have not alleged the statutory minimum amount of damages, $75,000, as to the state law claims. Defendant argues that even if the Court were to dismiss only the trademark related claims, the remainder of the Complaint must be dismissed for lack of jurisdiction, due to the failure of any federal question jurisdiction and lack of diversity of the parties, and failure to allege the statutory minimum amount.
Plaintiffs rely on the allegation in paragraph 7 (Dkt. 1, p. 2).
The Court denies the Motion to Dismiss as to this issue.
C. Personal Jurisdiction
Defendant Nowak argues that Defendant Nowak does not have sufficient minimum contacts with the State of Florida such that the exercise of personal jurisdiction would comport with due process. Defendant Nowak argues that his website is passive, allowing viewers to view information on the site; viewers cannot buy goods or services and they cannot post comments. To the extent that Defendant Nowak's website calls for a boycott of Advantage Trim and Lumber, and identifies the business' websites, Plaintiff Nowak contends that the business has showrooms open to the public only in New York and North Carolina, and not in Florida. Defendant Nowak argues that his website does not target Florida viewers and the events underlying the claims took place in New York.
Defendant Nowak further argues that the exercise of personal jurisdiction over Defendant Nowak would offend traditional notions of fair play and substantial justice, considering: 1) the burden on the defendant; 2) the forum state's interest in adjudicating the dispute; 3) the plaintiff's interest in obtaining convenient and effective relief; 4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and 5) the shared interest of the several states in furthering fundamental substantive social policies.
Plaintiffs rely on Ch. 48.193(1), Florida Statutes, wherein a non-resident of Florida commits a tortious act within the State of Florida. Plaintiffs have included state law tort claims for defamation, trade libel or injurious falsehood, tortious interference with contract, tortious interference with prospective business relationships, and invasion of privacy, as well as statutory tort claims of trademark infringement and unfair competition.
Plaintiffs argue that allegedly defamatory material about a Florida resident placed on the Web and accessible in Florida constitutes an electronic communication into Florida when the material is accessed in Florida. Internet Solutions Corp. v. Marshall, 39 So.3d 1201, 1214 (Fla. 2010).
Plaintiffs argue that the "fair warning" requirement of due process requirement is satisfied if the defendant purposefully directed his activities at residents of the forum, and the litigation results from the alleged injuries that arise out of or related to the activities. Plaintiffs argue that intentional torts are such acts. Licciardello v. Lovelady, 544 F.3d 1280, 1284 (11th Cir. 2008). Plaintiffs argue that the intentional torts, coupled with Defendant's knowledge of Plaintiff's residence in Florida and knowledge of Plaintiffs had a business office in Florida, establish Defendant's substantial connection with Florida under the Calder v. Jones "effects" test.
Plaintiffs further argue that the balance of the fairness factors is in favor of the exercise of jurisdiction. Plaintiffs argue they have a strong interest in obtaining convenient and effective relief in Florida, where they and their employees live, where the bulk of Defendant's harm was directed, and where their corporation is based. Plaintiffs argue that their income is based on their online reputation, as they sell products to clients all over the Internet and throughout the United States.
1. Long Arm Statute
The Florida long-arm statute permits the exercise of jurisdiction over a non-resident defendant who commits a tort outside of the state which causes injury within the state. Posner v. Essex Insurance Co., 178 F.3d 1209, 1216 (11th Cir. 1999). To commit a tortious act within the State of Florida, a defendant's physical presence is not required. Committing a tortious act in Florida can occur through telephonic, electronic or written communications into Florida, provided the cause of action arises from the communications. Wendt v. Horowitz, 822 So.2d 1252 (Fla. 2002).
In the context of a motion to dismiss for lack of personal jurisdiction in which no evidentiary hearing is held, the plaintiff bears the burden of establishing a prima facie case of jurisdiction over the movant, non-resident defendant. A prima facie case is established if the plaintiff presents sufficient evidence to defeat a motion for a directed verdict. The district court must construe the allegations in the complaint as true, to the extent they are uncontroverted by defendant's affidavits or deposition testimony. Where the evidence presented by the parties' affidavits and deposition testimony conflicts, the court must construe all reasonable inferences in favor of the non-movant plaintiff. See Madara v. Hall, 916 F.2d 1210 (11th Cir. 1990) (citing Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988).
The Complaint alleges intentional torts directed at Plaintiffs. Allegedly defamatory material about Florida residents placed on the Web and accessible Florida constitutes an "electronic communication into Florida" when the material is access in Florida. Internet Solutions Corp. v. Marshall, 39 So.3d 1201, 1206 (Fla. 2010).
The Court finds that Plaintiffs' Complaint meets the requirements of Florida's long arm statute.
2. Due Process a. Minimum Contacts
Defendant argues that Defendant does not have sufficient minimum contacts with the State of Florida such that the exercise of personal jurisdiction over him would satisfy the requirements of the Due Process clause. Defendant argues that his website is passive and non-commercial in nature. Viewers cannot buy goods or services, or post comments. The website has a "donate" button, but it is not connected to the support of any particular endeavor or postings.
Plaintiffs argue that Plaintiffs allege in their Complaint that Defendant committed trademark infringement and defamation via Defendant's website, which has been accessed in Florida. Plaintiffs rely on Licciardello v. Lovelady, 544 F.3d 1280, 1287 (11th Cir. 2008) (effects test met when intentional tort expressly aimed at specific individual in the forum whose effects were suffered in the forum).
The Court must determine whether a defendant has purposefully established significant contact with Florida that he could reasonably have anticipated that he might be sued there.
The Complaint alleges that Defendant committed the intentional torts of trademark infringement and defamation via Defendant's website, which has been accessed in Florida. Plaintiffs argue that the additional intentional torts alleged in the Complaint were deliberately directed to Florida. Plaintiffs argue that Defendant linked to Plaintiffs' website, which sets out the existence of Advantage Trim Lumber of Florida, and business offices in Florida. Plaintiffs and Defendant have filed supporting affidavits. Defendant admits that Defendant knew Plaintiffs lived in Florida and that they had business office in Florida. Defendant has visited the business offices in Florida.
After consideration, the Court finds that Defendant has minimum contacts with Florida.
b. Fair Play and Substantial Justice
Relevant factors to be considered include: 1) the burden on defendant; 2) the forum state's interest; 3) plaintiff's interest in convenient and effective relief; 4) the judicial system's interest in the efficient resolution of controversies; and the state's shared interest in furthering fundamental social policies.
Defendant argues that the exercise of personal jurisdiction over Defendant is very high, considering his limited financial means, that Defendant's witnesses are in New York, and that the underlying events concern real estate in New York and took place in New York.
Plaintiffs argue that they have a strong interest in obtaining convenient and effective relief in Florida, where Plaintiffs live, where Plaintiffs' employees live, where the bulk of Defendant's harm was directed, and where their corporation is based. Plaintiffs argue that their income is dependent on their online reputation, as they sell products to clients all over the Internet and throughout the United States, who will only order if the good reputation of the company with whom they are dealing is undisputed.
Florida has a strong interest in affording its residents a forum to obtain relief from intentional misconduct of nonresidents causing injury in Florida.
The Court notes that litigating this case in Florida will burden Defendant financially, but, after balancing the burden to Defendant with the interest of Plaintiffs and the State of Florida, the Court concludes that the exercise of personal jurisdiction over Defendant will not offend fair play and substantial justice.
The Court denies Defendant's Motion to Dismiss for lack of personal jurisdiction.
D. Failure to State a Claim — Trademark and Unfair Competition Claims
Defendant argues that Plaintiffs do not allege that Defendant Nowak used Plaintiffs' alleged trademark to sell any goods and services or engage in other commercial activity, nor do they allege Defendant is engaging in any act that would tend to confuse consumers as to the origin of his website and the statements made upon it. Defendant argues that the referenced trademarks "Advantage Trim and Lumber" and "IPEDepot" appear on Defendant's website in the context of identifying Plaintiffs' business, or in calling for a boycott of its goods and services.
Plaintiffs argue that the same facts which support an action for trademark infringement support an action for unfair competition. Plaintiffs further argue that providing information over the Internet satisfies the commerce requirement of the Lanham Act.
Plaintiffs argue that the Complaint alleges that Defendant posted Plaintiffs' trademarks on his website "in the content, title tags, meta-tags, outside links and webpage URLs without Plaintiffs' authorization or permission, in an attempt to gain Plaintiffs' traffic and to lure Plaintiffs' customers, potential customers, and other third parties to Defendants' website." (Dkt. 1, par. 22).
Plaintiffs argue that "a company's use in meta tags of its competitor's trademarks may result in a likelihood of confusion."North American Medical Corp. v. Axiom Worldwide, 522 F.3d 1211, 1222 (11th Cir. 2008). Plaintiffs further argue that "Infringement may exist where `the substantial and distinctive mark is copied or imitated.'" David Sherman Corp. v, Heublein, Inc., 340 F.2d 377, 380 (8th Cir. 1965). Plaintiffs argue that Plaintiffs have sufficiently pleaded likelihood of confusion via "initial interest confusion."
The issues raised herein should be resolved later in a motion for summary judgment. After consideration, the Court denies the Motion to Dismiss.
E. Improper Venue
Defendant argues that venue is proper where he resides, in a district where a substantial part of the events or omissions giving rise to the claim occurred, or a judicial district in which any defendant may be found.
Plaintiffs argue that the intentional torts took place in Florida, and therefore venue is proper in Florida.
After consideration, the Court denies the Motion to Dismiss for improper venue.
F. Transfer
Defendant argues that transfer is appropriate under 28 U.S.C. Sec. 1404(a). Defendant argues that Defendant resides the Western District of New York, and venue is proper there. Defendant argues that his witnesses reside in the Western District of New York, some witnesses would not likely be willing to travel to Florida to testify, and the cost for travel and lodging for those witnesses would be prohibitive. Defendant argues that any customers lost due to his website would be in New York or North Carolina. Defendant argues that Plaintiffs continue to do business in New York, and it would be less inconvenient for Plaintiffs to travel to New York than for Defendant to travel to Florida, especially considering Defendant's limited financial means.
Plaintiffs do not dispute that this case could have been brought in New York. Plaintiffs argue that the balance of the relevant factors weighs against transfer. Plaintiffs argue that the witnesses for this matter are in Florida, and in the event a witness does not want to testify in Florida, the witness can be deposed in New York. Plaintiffs argue that Defendant has not offered any reason why his witnesses could not deposed in New York. Plaintiffs argue that, since Plaintiffs and their business are in Florida, the location of relevant documents proving their damages are also in Florida, and any documents required from Defendant can be electronically sent. Plaintiffs further argue that the financial resources of the parties is a disputed issue of fact, and transferring venue to New York would merely shift the financial burden from Defendant to Plaintiffs. Plaintiffs argue that, after weighing the relevant factors as a whole, this case should remain in Florida.
In determining the balance of convenience, the Court considers: 1) plaintiff's initial choice of forum; 2) convenience of the parties and witnesses; 3) relative ease of access to sources of proof; 4) availability of compulsory process for witnesses; 4) location of relevant documents; 6) financial ability to bear the cost of the change; and 7) all other practical problems that make trial of the case easy, expeditious and inexpensive. Aalberg v. Plan 4 College, Inc., 2009 WL 3698039 (M.D. Fla. 11/4/2009). Transfer is appropriate only when a defendant establishes that the balance weighs strongly in favor of transfer.
1) Plaintiffs' choice of forum
Plaintiffs have chosen the Middle District of Florida as their forum. Plaintiffs reside in this district and conduct business in this district. Although Defendant's acts took place in another forum, Defendant's alleged intentional torts had an impact on Plaintiffs in Florida.
This factor weighs against transfer.
2) Convenience of parties and witnesses
Defendant argues that Defendant's witnesses reside in New York. Defendant argues that Plaintiff has showrooms only in New York and North Carolina, and none in Florida. Defendant argues that any lost customers would necessarily be either in New York or North Carolina. Defendant argues that Plaintiffs resided in New York and continue to do business there. Defendant argues that it would be less inconvenient for Plaintiffs to travel to New York than from Defendant to travel to Florida.
Plaintiffs argue that Plaintiffs' witnesses are in Florida, and Defendant has not offered any reason that Defendant's witnesses cannot be deposed in New York. Plaintiffs further argue that there is no basis for Defendant's contention that any lost customers would be in New York or North Carolina.
The convenience of parties and witnesses is an important factor. Where a transfer would merely shift the burden of inconvenience, the Court will not disturb a plaintiff's choice of forum. This factor weighs against transfer.
3) Location of relevant documents; relative ease of access to sources of proof
Plaintiffs argue that since Plaintiffs and their business are located in Florida, the location of relevant documents proving their damages are in Florida, and any documents required from Defendant can be electronically sent.
This factor weighs against transfer.
4) Availability of compulsory process
Defendant argues that Defendant's witnesses are beyond the scope of compulsory process.
Any witness who is unwilling to testify in Florida can be deposed in New York. Defendant has not shown that its New York witnesses cannot effectively present their testimony by deposition, nor has Defendant identified the substance of the testimony. The Court finds that this factor does not weigh in favor of transfer.
5) Financial ability
Defendant argues that litigating this case in Florida will pose a financial hardship.
Plaintiffs argue that there is a factual dispute as to Defendant's financial ability. Plaintiffs argue that a transfer would merely shift the financial burden of transfer from one party to another.
Since the burden is on Defendant to establish that transfer is justified, this factor weighs against transfer.
6) Familiarity with governing law
Because this case is based on diversity, as well as federal question, Florida law applies to substantive issues as to the state law claims. As a practical matter, a district court located in Florida and routinely applying Florida law can more appropriately apply Florida law than a district court located in another state. This factor does not weigh in favor of transfer.
7) Trial efficiency and the interests of justice, based on the totality of the circumstances
Defendant has argued that none of the events underlying his website postings took place in Florida, except that the individual Plaintiffs reside in Florida. Defendant argued that the real party in interest is a New York company.
While it would be more convenient and less expensive for Defendant if this case were transferred to New York, Plaintiffs reside in Florida, do business in Florida, chose this forum, have witnesses in Florida, and access to relevant documents in Florida. The Court accords great weight to the convenience of witnesses, and while there would be some inconvenience for New York witnesses, technology has reduced the burdens of litigation. After consideration, the Court concludes that Plaintiffs' choice of forum is not clearly outweighed by the consideration of convenience, cost, judicial economy, and expeditious discovery and trial process to justify the transfer of this case to the Western District of New York under Section 1404.
After consideration, the Court denies the Motion to Transfer. Accordingly, it is ORDERED that the Motion for Dismiss for lack of personal jurisdiction is denied, the Motion to Dismiss for lack of standing is denied, the Motion to Dismiss for lack of subject matter jurisdiction is denied, the Motion to Dismiss for Failure to State a Claim is denied, the Motion to Dismiss for Improper Venue is denied, and the Motion to Transfer is denied. The Motion for More Definite Statement is granted, with leave to file an amended complaint within fourteen days.
DONE and ORDERED in Chambers, in Tampa, Florida.