Opinion
01 Civ. 6203 (RWS)
January 4, 2002
MEMORANDUM OPINION
Defendant International Basic Source, Inc. ("Basic") has moved to dismiss plaintiff GTFM, Inc.'s ("GTFM") complaint (1) for lack of personal jurisdiction pursuant to Rule 12(b)(2), Fed.R.Civ.P.; (2) for improper venue pursuant to Rule 12(b)(3) Fed.R.Civ.P.; and (3) for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) Fed.R.Civ.P. Basic has also moved for sanctions pursuant to Rule 11, Fed.R.Civ.P., (1) for filing a lawsuit which names Brandon Kim ("Kim") personally without evidentiary support for jurisdiction; (2) alleges jurisdiction and venue upon information and belief without evidentiary support; and (3) for improperly using a lawsuit to intimidate competitors and inhibit competition. GTFM has crossmoved by letter application to compel Basic to comply with this Court's discovery order of November 14, 2001 permitting discovery for the limited purpose of determining jurisdiction and venue. Because this court has jurisdiction to allow discovery for the purpose of determining in personam jurisdiction and venue, GTFM's motion to compel such discovery is granted. For the related reasons, Basic's motions are denied at this time. Leave is granted to refile the motions to dismiss and for sanctions at a later date.
Parties and Prior Proceedings
This case began with a Complaint, dated July 9, 2001, alleging, inter alia, trademark counterfeiting, trademark infringement, false designation of origin, federal trademark dilution, common law trademark infringement, and other claims to enforce GTFM's rights to the "05" Trademark used by Basic in its sale of goods. GTFM has alleged on information and belief, that Basic is doing and/or transacting business in the State of New York and this judicial district.
On November 14, 2001, this Court ordered a one-month adjournment of the underlying motion to dismiss for the purpose of allowing discovery to proceed on the issue of jurisdiction and venue. Basic has apparently refused to comply with certain of the discovery requests made by GTFM including a deposition of Kim. The instant motions were marked submitted and oral argument was heard on December 12, 2001.
Jurisdictional Discovery is Proper
A trial court has jurisdiction to determine its own jurisdiction.United States v. United Mine Workers, 330 U.S. 258, 292 n. 57(1947). A court may allow discovery to aid in determining whether it has in personam or subject matter jurisdiction. Lakkas v. Liberian M/V Caledonia, 443 F.2d 10 (4th Cir. 1971); Fraley v. Chesapeake Ohio Ry., 397 F.2d 1 (3d Cir. 1968); Surpitsky v. Hughes-Keenan Corp., 362 F.2d 254 (1st Cir. 1966); Urguhart v. American-La France Foamite Corp., 79 U.S.App. D.C. 219, 144 F.2d 542, 544, cert. denied, 323 U.S. 783(1944);Alfadda v. Fenn, 1994 WL 714254 (S.D.N.Y. Dec. 22, 1994); Leasco Data Processing Equip. Corp. v. Maxwell, 319 F. Supp. 1256, 1263 (S.D.N.Y. 1970); see also Landoil Resources Corp. v. Alexander Alexander Serv. Inc., 918 F.2d 1039, 1041 (2d Cir. 1990) (district court denied motion to dismiss under Fed.R.Civ.P. 12(b)(2) (3) and permitted discovery on issue of personal jurisdiction then heard motion).
Here, GTFM has alleged facts pertaining to jurisdiction and venue on information and belief. Basic argues that GTFM has not met its burden of proving the existence of personal jurisdiction and venue. It is true that a plaintiff must prove issues of in personam jurisdiction and venue by a preponderance of the evidence. See Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 154 (2d Cir. 1999) (jurisdiction); Pocahontas Supreme Coal Co. v. National Mines Corp., 90 F.R.D. 67, 69 (S.D.N.Y. 1981) (venue). At this stage, however, those standards are beside the point. GTFM must ultimately prove facts sufficient to support personal jurisdiction and venue, but alleging such facts is sufficient to permit limited discovery.
Pre-motion discovery should be permitted where the facts necessary to establish personal jurisdiction and propriety of venue lie exclusively within the defendant's knowledge. See Wells Fargo Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 n. 4 (2d Cir. 1977); Gelfand v. Tanner Motors, Ltd., 339 F.2d 317, 323 (2d Cir. 1964). Here, there is an issue of whether Basic is doing and/or transacting business in the State of New York and this judicial district. Discovery will lead to a more accurate judgement than one made solely on the basis of affidavits in response to the motion. See Peterson v. Spartan Industries, Inc., 33 N.Y.2d 463, 354 N.Y.S.2d 905(1974).
For these reasons, GTFM's motion to permit discovery is granted. Limited and expedited discovery proceedings will include service of document requests and one deposition of defendant Kim to be completed no later than thirty (30) days from the entry of this order.
Basic's Motions are Denied With Leave to Refile
Because Basic's motion to dismiss on jurisdiction and venue grounds and for failure to state a claim under Rule 12(b)(6) cannot be resolved until after jurisdictional discovery has been conducted, it is denied at this time. Similarly, Basic's motion for sanctions under Rule 11 is premature since the issue will be moot if jurisdiction can be established.
Leave is granted to refile any and all of the motions pending closure of the limited discovery ordered above.
It is so ordered.