Jordan Outdoor Enterprises, Ltd. v. That 70's Store LLC et al, No. 4:2010cv00016 - Document 35 (M.D. Ga. 2011)
Court Description: ORDER granting 15 Motion to Set Aside Default. Ordered by Judge Clay D. Land on 09/26/2011 (ajp)
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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA COLUMBUS DIVISION JORDAN LTD., OUTDOOR ENTERPRISES, * * Plaintiff, * vs. CASE NO. 4:10-CV-16 (CDL) * THAT 70 S STORE, LLC and RICK W. MORGAN, * Defendants. * O R D E R Plaintiff Jordan Outdoor Enterprises, LTD. (“JOEL” or “Plaintiff”) sued Defendants That 70 s Store, LLC (“That 70 s Store”) and “Defendants”) Rick for W. Morgan trademark (“Morgan”) infringement, (collectively trademark unfair competition, and deceptive trade practices. dilution, Defendants never filed a proper answer to Plaintiff s Complaint, and a default judgment was entered against Defendants. ECF No. 14. Default J., Defendants subsequently filed the presently pending Motion to Set Aside Entry of Default Judgment (ECF No. 15), pursuant to Federal Rule of Civil Procedure 60(b)(4) for lack of personal jurisdiction. finds that Plaintiff For the following reasons, the Court has Georgia s long-arm statute. not satisfied the requirements of Therefore, Defendants motion is granted, and this action is dismissed for lack of personal jurisdiction. MOTION TO SET ASIDE DEFAULT JUDGMENT STANDARD The Court may relieve a party from a final judgment if the judgment is void. Fed. R. Civ. P. 60(b)(4). A judgment entered without personal jurisdiction over the defendant is void. Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 924 (11th Cir. 2007). Where the defendant challenges the exercise of personal jurisdiction after entry of a default judgment, “the plaintiff bears the ultimate burden jurisdiction is present.” of establishing that personal Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1217 (11th Cir. 2009). BACKGROUND The Court jurisdictional Defendants permitted discovery contacts the to with parties to ascertain the state engage the of in full limited nature Georgia. Text of Only Order, Mar. 1, 2011; see also Scheduling Order, Mar. 16, 2011, ECF No. 28. After completing that discovery, the parties supplemented their previously filed motion and motion responses. See Pl. s Supplemental Mem. Regarding Personal Jurisdiction Under Georgia s Long-Arm Statute, ECF No. 32 [hereinafter Pl. s Supplemental Regarding Statute, Mem.]; Personal ECF No. Defs. Reply Jurisdiction 33 to Under [hereinafter 2 Pl. s Supplemental Georgia s Defs. Reply Mem. Long-Arm to Pl. s Supplemental Mem.]. The present record establishes the following. JOEL owns numerous copyrights and trademarks for “REALTREE” brand camouflage patterns and goods bearing the REALTREE name and incorporating the camouflage patterns. JOEL is a Georgia corporation with its principal place of business in Columbus, Georgia. That 70's Store is incorporated in Arkansas and has its principal place of business in Conway, Arkansas. Mem. Br. in Supp. of Defs. Mot. to Set Aside Entry of Default J. Ex. A, Morgan Aff. Arkansas. ¶ 2, ECF Id. ¶ 1. No. 16-1. Morgan is a resident of That 70's Store is not licensed to do business in Georgia and does not have an agent for service of process in Georgia. subsidiaries, offices, Id. ¶ 3. employees, records or assets in Georgia. That real 70 s or Store personal has no property, Id. Defendants promote and sell articles of clothing bearing a marijuana BUD,” leaf camouflage “REALBUD,” “REAL pattern using CAMO,” BUD and the and marks “REALBUD (collectively “REALBUD marks” or “REALBUD products”). “REAL CAMO” Morgan Aff. ¶ 4; Pl s Mem. in Opp n to Defs. Mot. to Set Aside Entry of Default J. [hereinafter Pl. s Mem.] Ex. C, That 70's Store Website Home 2-3, ECF No. 18-4; Pl. s Mem. Ex. A, RealBudCamo Products 3-7, ECF No. 18-2. Defendants own and operate two websites REALBUD that display the 3 marks. Defendants www.that70sstore.com website displays images of REALBUD products and represents Store. No. the products are for sale at That 70's Pl s Mem. Ex. C, That 70's Store Website Home 1-2, ECF 18-4. “friends that The website jealous” by encourages “[w]ear[ing] customers the REALBUD!!!! Everybody needs a hat!!!!” best to make shirt Id. at 1. their in town. The website explains that “REALBUD CAMO is not just for you hunters out there but for everyone s daily apparel!” Id. at 2. Defendants www.realbudcamo.com website offers REALBUD products for sale and allows customers to purchase website s shopping cart feature. REALBUD products using the Pl. s Mem. Ex. A, RealBudCamo - Products 3-7, ECF No. 18-2; Pl. s Mem. Ex. B, Shopping Cart, ECF No. 18-3. Available clothing includes bandanas, caps, logo tees, and t-shirts. It is Id. undisputed that neither the www.that70sstore.com website nor the www.realbudcamo.com website generated any sales of REALBUD products Supplemental Mem. 5. in Georgia. Morgan Aff. ¶¶ 6-7; Pl. s Plaintiff, however, did submit evidence that Georgia residents accessed Defendants www.realbudcamo.com website. See Pl. s Supplemental Mem. Ex. B, Internet Traffic Report for www.realbudcamo.com, ECF No. 32-3; Pl. s Supplemental 4 Mem. Ex. C, Geographic Location Report of Internet Traffic, ECF No. 32-4.1 DISCUSSION For Defendants to be subject to personal jurisdiction here, “the exercise of jurisdiction must (1) be appropriate under the [Georgia] long-arm statute and (2) not violate the Due Process Clause of the Constitution.” Fourteenth Diamond Amendment Crystal to Brands, the Inc. United v. Food States Movers Int’l, Inc., 593 F.3d 1249, 1257-58 (11th Cir. 2010) (internal quotation marks omitted). Court decisions to Notwithstanding some Georgia Appeals the contrary, the Eleventh Circuit has clearly held that “the Georgia long-arm statute does not grant courts in Georgia personal jurisdiction that is coextensive with procedural due process,” but instead “imposes independent obligations that a plaintiff must establish for the exercise of personal jurisdiction that procedural due process.” are distinct Id. at 1259. 1 from the demands of “[C]ourts must apply the Defendants submitted the affidavit of a network engineer to contest the reliability of Plaintiff s evidence, claiming that the evidence does not conclusively establish that twelve Georgia residents actually accessed the www.realbudcamo.com website. See Defs. Reply to Pl. s Supplemental Mem. Ex. A, Dunn Aff., ECF No. 33-1. Further, Defendants argue that the Court should strike Plaintiff s counsel s affidavit and attached exhibits as a violation of Georgia Rule of Professional Conduct 3.7. Even if the Court accepts Plaintiff s evidence as true for the purposes of this Order, the Court concludes that Defendants conduct in Georgia does not satisfy the requirements of the Georgia long-arm statute. Accordingly, the Court finds it unnecessary to rule on Defendants motion to strike. 5 specific limitations and requirements of O.C.G.A. § 9-10-91 literally and must engage in a statutory examination that is independent of, and distinct from, the constitutional analysis to ensure that both, separate prongs inquiry are satisfied.” Id. at 1263. the in Court begins (and this case of the jurisdictional Following this direction, ends) its analysis by examining whether Defendants conduct meets the requirements of the Georgia long-arm statute. I. Georgia’s Long-Arm Statute Plaintiff relies upon three separate and independent bases for jurisdiction under the Georgia long-arm statute: (1) Defendants transaction of business in Georgia; (2) Defendants commission of a tort in Georgia; and (3) Defendants commission of a tortious injury in Georgia caused by an act or omission outside of Georgia. The Georgia long-arm statute, O.C.G.A. § 9- 10-91, provides in relevant part that: A court of this state may exercise personal jurisdiction over any nonresident or his or her executor or administrator, as to a cause of action arising from any of the acts, omissions, ownership, use, or possession enumerated in this Code section, in the same manner as if he were a resident of this state, if in person or through an agent, he or she: (1) Transacts any business within this state; (2) Commits a tortious act or omission within this state . . . ; [or] (3) Commits a tortious injury in this state caused by an act or omission outside this state if the tortfeasor regularly does or solicits business, or engages 6 in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state[.] O.C.G.A. § 9-10-91(1)-(3). A. Transacts Any Business in Georgia To meet the “transacts any business” prong of the Georgia long-arm statute, a nonresident defendant must “„purposefully do[] some act or consummate[] some transaction ” in Georgia. Diamond Crystal Brands, Inc., 593 F.3d at 1260 (quoting Aero Toy Store, LLC v. Grieves, 279 Ga. App. 515, 517, 631 S.E.2d 734, 737 (2006)). In Innovative Clinical & Consulting Services, LLC v. First National Bank of Ames, Iowa, 279 Ga. 672, 620 S.E.2d 352 (2005), the Supreme Court of Georgia clarified the requirements of the transacts any business prong, noting that “nothing in subsection (1) requires the physical presence of the nonresident in Georgia or minimizes the import nonresident s intangible contacts with the State.” of a Innovative Clinical & Consulting Servs., LLC, 279 Ga. at 675, 620 S.E.2d at 355. “As a result, a nonresident s mail, telephone calls, and other „intangible acts, though occurring while the defendant is physically outside of Georgia, must be considered.” Crystal Brands, Inc., subsection “expressly (1) of depends 593 F.3d at 1264. the on the long-arm actual 7 Diamond Jurisdiction under statute, transaction however, of still business—the doing of some act or consummation of some transaction—by the defendant in the state.” Apparently conduct on the unable part Id. at 1260. to of point to any Defendants that consistent would course amount to of the traditional transaction of business in Georgia, Plaintiff relies upon the “due process personal jurisdiction test” expressed in Calder v. Jones, 465 U.S. 783 (1984) that Plaintiff contends has also been adopted by the Eleventh Circuit in Licciardello v. Lovelady, 544 F.3d 1280 (11th Cir. 2008). Plaintiff maintains that under that test personal jurisdiction is satisfied here because the Defendants committed an intentional tort aimed at Plaintiff in Georgia, and the effect of that tort was suffered by Plaintiff in Georgia. Plaintiff argues that Relying on Calder and Licciardello, Defendants intentional display of the REALBUD marks on Defendants websites, causing harm to JOEL in Georgia, constitutes an “act” sufficient to meet the transaction of business requirement of the 2 Georgia long-arm statute.2 Plaintiff contends that as a result of Defendants default the Court must accept the facts contained in the Complaint as true, and thus trademark infringement by Defendants and injury to Plaintiff are established in this action. Defendants claim, however, that Plaintiff failed to introduce any evidence to support a finding that Defendants actually committed trademark infringement or caused injury to Plaintiff. Assuming for the purposes of this Order that Defendants infringed Plaintiff s trademarks and caused Plaintiff injury, the Court concludes that Defendants conduct fails to meet the jurisdictional requirements of Georgia s long-arm statute. Therefore, the Court does not need to decide whether Plaintiff must introduce actual evidence of infringement or injury. 8 Pretermitting whether Calder and Licciardello would support a finding in the present case that the exercise of jurisdiction over Defendants would not offend notions of constitutional due process, the Court finds both cases inapplicable to the question of whether Defendants conduct amounts to the transaction of business as Conflating contemplated the of that F.3d at this that constitutional would is 1263. test the must “engage independent of, Diamond Furthermore, statute. into determination violate Court analysis.” long-arm effects business O.C.G.A. § 9-10-91(1) examination Georgia s Calder/Licciardello transaction directive by Eleventh and a under Circuit s statutory distinct Crystal allowing in the from, the Brands, Inc., 593 the tortious injury suffered by JOEL in Georgia to be considered the transaction of business under subsection (1) of the long-arm statute would “turn the „transacts any business within Georgia prong into the new stepping stone around subsection (3).” Id. at 1262. Therefore, the Court rejects Plaintiff s argument that an injury suffered by JOEL in Georgia due to an intentional tort satisfies the Georgia long-arm statute s transaction of business requirement. Plaintiff also argues that Defendants transacted business in Georgia by operating www.realbudcamo.com websites. the www.that70sstore.com and Both websites are accessible in 9 Georgia, the www.realbudcamo.com website offers REALBUD products for sale, accessed and the some evidence exists www.realbudcamo.com that Georgia website. It is residents undisputed, however, that no sales resulted from Georgia residents viewing the websites. The finding Court finds that Defendants meet that sufficient to the statute. Defendants this evidence transacted requirements operated does business of websites support a in Georgia Georgia the long-arm that everywhere and not specifically in Georgia. target Georgia residents. not are accessible The websites do not The websites failed to generate any business for Defendants in Georgia. Defendants did not sell any products to Georgia residents through the internet or otherwise. Defendants did not ship any products to Georgia. fails to Georgia. reveal any “intangible” conduct Defendants in Defendants have not corresponded via email, mail, or telephone with Georgia residents. that by The record merely everywhere business—the operating else, doing a website constitutes of some The Court cannot conclude accessible “the act or actual in Georgia, and transaction of consummation transaction—by the [Defendants] in the state.” of some Diamond Crystal Brands, Inc., 593 F.3d at 1260 (emphasis added); see also Aero Toy Store, LLC v. Grieves, 279 Ga. App. 515, 523, 631 S.E.2d 734, 740 (2006) (finding that the defendant transacted business 10 in Georgia based on defendant s operation of an “interactive website through which it has reached out to, and done business with, persons in Georgia,” and offering as a contrasting example, Barton Southern Co. v. Manhole Barrier Systems, 318 F. Supp. 2d (N.D. Ga. 2004), “where there was nothing on the [defendant s] website showing an intent to reach out to persons living in Georgia and no evidence that any Georgia residents had done business with the defendant either through the Internet or otherwise.”).3 Based on the foregoing, the Court finds that Plaintiff has failed to demonstrate that Defendants transacted business in Georgia sufficient to meet the requirements of Georgia s longarm statute. B. Tortious Act in Georgia Plaintiff also argues that Defendants committed a tort in Georgia by causing the REALBUD marks to be displayed in Georgia on the websites. may exercise Therefore, Plaintiff maintains that this Court personal jurisdiction 3 over Defendants under the The Court recognizes that in Barton Southern Co. the federal district court evaluated the defendant s contacts in the context of the due process inquiry and not under the Georgia long-arm statute. Moreover, the Court is mindful of the Eleventh Circuit s finding that the Georgia Court of Appeals in Aero Toy Store, LLC improperly collapsed the minimum contacts due process analysis into the transacts any business test. Diamond Crystal Brands, Inc., 593 F.3d at 1260 n.11. The Court, however, still finds the reasoning from the Aero Toy Store, LLC decision instructive for its finding that, in contrast to Barton Southern, Co., the defendant in Aero Toy Store, LLC had done business with persons in Georgia. 11 “commits a tortious act” in Georgia provision of the long-arm statute. Plaintiff again relies on Licciardello, arguing that the Eleventh Circuit construed language from Florida s long-arm statute identical to subsection (2) of Georgia s long-arm statute and concluded that a tort occurred in Florida. Eleventh Circuit in Licciardello, however, recognized The that Florida s “long-arm statute permits jurisdiction over the nonresident defendant who commits a tort outside of the state that causes injury inside the state.” 1283. Licciardello, 544 F.3d at In contrast, the Georgia Supreme Court has expressly rejected a line of Georgia cases that “expanded subsection (2) to encompass nonresidents in those situations where the cause of action arising from injury in Georgia resulted from a tortious act or omission occurring outside this State.” Innovative Clinical & Consulting Servs., LLC, 279 Ga. at 673, 620 S.E.2d at 354. According to the Georgia Supreme Court, “under subsection (2) a Georgia court may exercise personal jurisdiction over a nonresident who commits a tortious act or omission within this State. . . and under subsection (3) a Georgia court may exercise personal jurisdiction over a nonresident who commits a tortious injury in Georgia caused by an act or omission outside Georgia only if” the tort-feasor s conduct in Georgia meets the other requirements set S.E.2d at 354. forth in subsection (3). Id. at 674, 620 Thus, the Georgia courts interpret subsection 12 (2) of the Georgia long-arm statute differently than the Florida courts interpret statute. a similar requirement in their long-arm Sitting in Georgia, this Court must follow the Georgia courts on this issue. The Court finds that Defendants alleged tortious conduct occurred in Arkansas, where Defendants displaying the REALBUD products. created the websites See Huggins v. Boyd, 304 Ga. App. 563, 565, 697 S.E.2d 253, 255 (2010) (finding that although the offense at issue was deemed by statute to occur where the email communication was received, the conduct giving rise to the offense “occurred at the physical place where [the defendant] typed in and sent his emails,” and therefore the defendant s conduct failed to satisfy subsection (2) of the Georgia long-arm statute). Under the Georgia courts interpretation of the tortious act requirement, injury to JOEL in Georgia as a result of Defendants “tortious act conduct or in Arkansas within” omission cannot Georgia be for considered a purposes of subsection (2) of the Georgia long-arm statute. Plaintiff concluded that also argues that the defendant the court actually in committed Licciardello the tort of trademark infringement in Florida because the website displaying the infringing Licciardello, marks 544 F.3d was at accessible 1283 in (finding Florida. “the See alleged infringement clearly also occurred in Florida by virtue of the 13 website s accessibility in Florida”). Even if infringement occurred in Georgia as a result of Georgia residents viewing the infringing marks on Defendants websites, so that the infringement was “passed off” in Georgia, the conduct giving rise to the infringement occurred in Arkansas, where Defendants created the websites. See Huggins, 204 Ga. App. at 565, 697 S.E.2d at 255 (holding that although offense of stalking was deemed to occur communications, stalking typed the occurred in and subsection where conduct at sent (2) of the the the the victim giving physical emails rise to place the the email offense of where the defendant therefore and long-arm received did not statute). Thus, meet under the Georgia long-arm statute, Defendants tortious act did not occur in Georgia. C. Tortious Injury in Georgia Finally, Plaintiff argues that it has satisfied subsection (3) of the Georgia long-arm statute by demonstrating that Defendants committed a tortious injury in Georgia caused by an act or omission outside the state. Plaintiff, however, cannot satisfy the other prong of subsection (3), which requires that such a tort-feasor “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from rendered in this state.” goods used O.C.G.A. 14 or § consumed 9-10-91(3). or services Plaintiff argues that Defendants caused a tortious injury in Georgia and that Defendants regularly solicit business in Georgia by operating the websites that are accessible to Georgia residents. The Court rejects this argument. Georgia residents in any way. Defendants regularly solicit The websites do not target The Court cannot conclude that business in Georgia solely by operating a website that is accessible here and everywhere else. In Georgia, “[t]he rule that controls is our statute, which requires that an out-of-state defendant must do certain acts within the personal state of Georgia jurisdiction.” before Innovative he can be Clinical subjected & to Consulting Servs., LLC, 279 Ga. at 673, 620 S.E.2d at 353 (alteration in original) (internal quotation marks omitted). Defendants have not regularly solicited business in Georgia or satisfied the other additional long-arm statute. requirements of subsection (3) of Georgia s Therefore, personal jurisdiction cannot be exercised over Defendants under this provision of the statute. II. Constitutional Due Process Although the Court suggested in a previous Order that the exercise of personal jurisdiction over Defendants would not likely violate their constitutional right to due process, Order, Jan. 21, 2011, ECF No. 21, the Court does not need to decide this issue given its finding that Defendants conduct fails to 15 meet the independent requirements imposed by the Georgia longarm statute. CONCLUSION For the reasons set forth above, Defendants Motion to Set Aside Entry of Default Judgment (ECF No. 15) is granted, and this action is dismissed for lack of personal jurisdiction. IT IS SO ORDERED, this 26th day of September, 2011. S/Clay D. Land CLAY D. LAND UNITED STATES DISTRICT JUDGE 16
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