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Buckley v. Universal Sewing Supply, Inc.

United States District Court, M.D. Pennsylvania

October 17, 2019




         Before the court is the motion to dismiss for lack of personal jurisdiction and improper venue, or, alternatively, to transfer based on 28 U.S.C. § 1404(a) (Doc. 9), filed by Defendant Universal Sewing Supply, Inc. (“Defendant” or “Universal”). Having considered the motion, Plaintiff's response (Doc. 11), and Defendant's reply (Doc. 13), the court will deny the motion without prejudice, granting Plaintiff leave to conduct limited jurisdictional discovery.

         I. Background

         This is a copyright infringement dispute. For the purposes of this memorandum, the court shall construe all facts in favor of Plaintiff and view the documentary evidence and declaration[1] submitted in the light most favorable to her.

         Plaintiff Karen Kay Buckley (“Plaintiff”) is a quilt designer who designed multiple different types of quilting scissors. In December of 2016, Plaintiff began negotiating, by email and phone, a distributor deal with Universal, whereby it would purchase and re-sell Plaintiff's scissors under certain limitations, including a restriction on selling scissors through websites such as Amazon. On March 30, 2017, Defendant issued a purchase order requesting 7, 920 pairs of scissors for a price of $64, 407.60. In response, Plaintiff accepted the purchase order and shipped the requested products from Pennsylvania to Missouri on April 11, 2017. On August 24, 2017, Universal issued an additional purchase order that Plaintiff again filled by shipping the scissors from Pennsylvania. Universal paid for these purchases by mailing checks to Plaintiff at her Pennsylvania address.

         At some point in 2017, Plaintiff began receiving complaints from other distributors of a competitor selling her scissors on Amazon for cheaper prices. Plaintiff came to believe Universal was the party doing so. Thus, in response to Defendant's next purchase order, Plaintiff informed Defendant she would no longer sell to them due to their breaching of the agreement by selling through Amazon. Defendant never responded.

         According to the complaint, Defendant then began selling a set of copycat scissors with virtually identical packaging and design, encroaching on Plaintiff's intellectual property rights. On May 9, 2019, Plaintiff thus brought suit against Defendant for copyright infringement and Lanham Act violations, alleging trade dress infringement and unfair competition. (See generally, Doc. 1.)

         On July 9, 2019, Defendant moved to dismiss the case for lack of personal jurisdiction and improper venue; or, alternatively, to transfer the case to the Eastern District of Missouri. (See generally, Docs. 9-10.) On July 23, 2019, Plaintiff filed a response. (Docs. 11-12.) And on August 5, 2019, Defendant filed a reply with eight new exhibits. (Doc. 13.) This motion is thus ripe for review.

         II. Standard of review

         In reviewing a 12(b)(2) motion to dismiss for lack of jurisdiction, the court must take as true the facts alleged by the plaintiff. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009) (citing O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007)). At that point, “the plaintiffs need only establish a prima facie case of personal jurisdiction.” Id. (internal quotations and brackets omitted). “The plaintiff meets this burden and presents a prima facie case for the exercise of personal jurisdiction by establishing with reasonable particularity sufficient contacts between the defendant and the forum state.” Mellon Bank (East) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992).

         “When a defendant provides affidavits to support a Rule 12(b)(2) motion, the plaintiff may not simply rest on the allegations of the complaint.” 4A Charles Alan Wright & Arthur R. Miller, Procedural Aspects of Personal Jurisdiction, Fed. Prac. & Proc. § 1067.6 (4th ed. 2019) (“Wright & Miller”). Instead, the plaintiff must carry its burden by presenting admissible evidence. Estate of Thompson v. Phillips, 741 Fed.Appx. 94, 96 (3d Cir. 2018). The court may evaluate the motion on the papers and documentary evidence alone, in which case the plaintiff “need only establish a prima facie case of personal jurisdiction and they are entitled to have . . . all factual disputes drawn in their favor.” Id. (internal quotations and brackets omitted); Metcalfe, 566 F.3d at 331 (reversing district court for failing to construe disputed facts in the plaintiff's favor). The plaintiff carries this “prima facie” burden if its evidence makes its personal jurisdiction theory “seem[] to be true on first examination, even though it may later be proved to be untrue.” Black's Law Dictionary 1441 (11th ed. 2019). But the plaintiff ultimately bears the burden of proving “by a preponderance of the evidence, facts sufficient to establish personal jurisdiction.” Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). Thus, “[i]f the existence of jurisdiction turns on disputed factual questions the court may resolve the challenge on the basis of a separate evidentiary hearing, or may defer ruling pending receipt at trial of evidence relevant to the jurisdictional question.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989); accord Metcalfe, 566 F.3d at 336 (explaining the personal jurisdiction process similarly). The choice of how the court resolves a factual dispute is ultimately a “discretionary” one. Wright & Miller, supra, at § 1067.6.

         Courts in the Third Circuit “ordinarily allow” limited jurisdictional discovery, as long as the plaintiff's personal jurisdiction claim “is not clearly frivolous.” Metcalfe, 566 F.3d at 336; accord Shuker v. Smith & Nephew, PLC, 885 F.3d 760, 781 n.20 (3d Cir. 2018) (jurisdictional discovery must be limited). “Furthermore, we have found jurisdictional discovery particularly appropriate where the defendant is a corporation.” Metcalfe, 566 F.3d at 336. Having laid out the process for evaluating a motion to dismiss under Rule 12(b)(2), the court now turns to the substance of personal jurisdiction.[2]

         “A District Court typically exercises personal jurisdiction according to the law of the state where it sits, in this case Pennsylvania.” Cruickshank-Wallace v. CNA Fin. Corp., 769 Fed.Appx. 77, 79 (3d Cir. 2019) (citing Fed.R.Civ.P. 4(k)(1)(A)). Pennsylvania's long-arm statute establishes a scope of personal jurisdiction coextensive with constitutional boundaries. See Id. at 79 (citing 42 Pa. Cons. Stat. Ann. § 5322(b)). The court will thus confine its analysis to the constitutional requirements. The due process clause of the United States Constitution permits the exercise of two types of personal jurisdiction: specific and general. O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007). “For a corporation, general jurisdiction is the state(s) where the corporation's ‘affiliations with the State are so continuous and systematic as to render it essentially at home in the forum State.'” Gress v. Freedom Mortg. Corp., 386 F.Supp.3d 455, 463 (M.D. Pa. 2019) (quoting Daimler AG v. Bauman, 571 U.S. 117, 139 (2014)) (internal brackets omitted). “[A] court with general jurisdiction may hear any claim against that defendant.” Bristol-Myers Squibb Co. v. Superior Ct. of Ca., S.F. Cty., 137 S.Ct. 1773, 1780 (2017) (emphasis in original).

         The Third Circuit has laid out a three-part test for determining whether the court has specific jurisdiction: “First, the defendant must have purposefully directed its activities at the forum. Second, the litigation must arise out of or relate to at least one of those activities. And third, if the prior two requirements are met, a court may consider whether the exercise of jurisdiction otherwise comports with fair play and substantial justice.” O'Connor, 496 F.3d at 317 (internal citations, quotations, and brackets omitted). While a majority opinion of the United States Supreme Court has never resolved whether the stream-of-commerce theory of personal jurisdiction is valid, the Third Circuit has rejected it. See Shuker, 885 F.3d at 780 (citing J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 877-85 (2011); Asahi Metal Indus. Co. v. Superior Ct., 480 U.S. 102, 108-13 (1987)). Thus, in the Third Circuit, a vendor indirectly “inject[ing] its goods into the forum state” or engaging in “efforts to exploit a national market that necessarily include Pennsylvania are insufficient” to satisfy personal jurisdiction. Id. (internal quotations omitted). Instead, “what is necessary is a deliberate targeting of the forum, ” such as an effort “to sell products . . . in Pennsylvania specifically.” Id. (internal quotations omitted). Physical entry into the forum, ...

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