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U.S. Energy Svcs., Inc. v. U.S. Energy Svgs. Corp.: US District Court : CIVIL PROCEDURE - no jurisdiction over trademark suit; Calder needs more than mere effects

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 07-4628(DSD/JJG)
U.S. Energy Services, Inc.,
a Minnesota corporation,
Plaintiff,
v. ORDER
U.S. Energy Savings Corp.,
a Delaware corporation,
Defendant.
Dennis C. Bremer, Esq., Carlson, Caspers, Vandenburgh &
Lindquist, 225 South Sixth Street, Suite 3200,
Minneapolis, MN 55402 and Hugh D. Jaeger, Esq., Hugh D.
Jaeger, PA, P.O. Box 672, Wayzata, MN 55391, counsel
for plaintiff.
Carrie L. Hund, Esq., Edward F. Fox, Esq., Bassford
Remele, PA, 33 South Sixth Street, Suite 3800,
Minneapolis, MN 55402 and Michael J. Berchou, Esq.,
Phillips Lytle, LLP, 3400 HSBC Center, Buffalo, NY
14203, counsel for defendant.
This matter is before the court upon defendants motion to
dismiss for lack of personal jurisdiction pursuant to Federal
Rule of Civil Procedure 12(b)(2). Based upon a review of the
file, record and proceedings herein, and for the following
reasons, the court grants defendants motion.
BACKGROUND
This matter stems from a trademark dispute between two
entities in the energy business. Defendant U.S. Energy Savings
Corp. (Savings) is a Delaware corporation with its principal
place of business in Ontario, Canada. Savings is a direct
2
subsidiary of Ontario Energy Commodities Inc. and an indirect
subsidiary of Ontario Energy Savings Corp. both Canadian
corporations. Savingss affiliates do business as U.S. Energy
Savings Corp. and U.S. Energy Savings, and supply consumers
and businesses in Indiana, Illinois, Texas and New York with
protected priced contracts for natural gas and electricity.
Plaintiff U.S. Energy Services, Inc. (Services) is a
Minnesota corporation that formed in 1993. Services is an energy
management company that works with commercial customers, schools
and the ethanol industry. Services has rights in its federally
registered service mark U.S. Energy Services and design.
Services has used the mark continuously since 1993. Savings
began using U.S. Energy Savings with design as a service mark
in 2004 and soon began using U.S. Energy Savings without design
as a service mark.
Since 2004, Services has received numerous communications in
Minnesota from consumers located in the states where Savings
conducts business who believed they were contacting Savings.
Services responded to e-mail correspondence some of which
contained consumer complaints against Savings by directing
those consumers to Savings. Services contends that these
consumer complaints have led to bad press and complaints directed
at its company and that Savings has knowingly forced Services to
suffer these harms in Minnesota. Services contacted Savings in
2005 and informed it that its name was causing confusion felt in
3
Minnesota. (Jaeger Aff. 2.) Savings made no response and has
continued to use the name U.S. Energy Savings.
Services filed this action on November 16, 2007, asserting
claims against Savings for trademark infringement and unfair
competition. On May 8, 2008, Savings moved to dismiss Servicess
action for lack of personal jurisdiction.
DISCUSSION
Savings argues that its contacts with Minnesota do not
support personal jurisdiction. As an initial matter, the court
determines that it need not direct additional discovery to
resolve the issue. Such discovery is unlikely to determine
whether personal jurisdiction is appropriate, and there are no
overriding equitable considerations weighing in favor of granting
jurisdictional discovery. Tuttle v. Lorillard Tobacco Co., 118
F. Supp. 2d 954, 960 (D. Minn. 2000); see Principle Fin.
Services, Inc. v. Big Fin. and Ins. Services, Inc. , 426 F. Supp.
2d 976, 982 (S.D. Iowa 2006). The court finds that existing
facts are sufficient for determining whether personal
jurisdiction is appropriate in this case.
To survive a motion to dismiss for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(2), the plaintiff need only make a prima facie showing of
personal jurisdiction over the defendant. Digi-Tel Holdings,
Inc. v. Proteq Telecomm. (PTE), Ltd. , 89 F.3d 519, 522 (8th Cir.
1996); see also Stevens v. Redwing , 146 F.3d 538, 543 (8th Cir.
4
1998). In the absence of an evidentiary hearing, a court must
look at the facts in the light most favorable to the nonmoving
party and resolve all factual conflicts in favor of that party.
Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384,
1387 (8th Cir. 1991) (citations omitted). A federal court may
assume jurisdiction over a nonresident defendant only to the
extent permitted by the longarm statute of the forum state and
by the Due Process Clause. Romak USA, Inc. v. Rich, 384 F.3d
979, 984 (8th Cir. 2004) (quotations omitted). Because the
Minnesota longarm statute confers jurisdiction to the fullest
extent permitted by the Due Process Clause, the court need only
consider due process requirements. Coen v. Coen, 509 F.3d 900,
905 (8th Cir. 2007) (citation omitted).
Due process requires that a defendant have sufficient
minimum contacts with the forum state such that maintaining the
suit does not offend traditional notions of fair play and
substantial justice. Romak, 384 F.3d at 984. Sufficient
contacts exist when [a] defendants conduct and connection with
the forum state are such that he should reasonably anticipate
being haled into court there. Coen, 509 F.3d at 905 (citation
and quotation omitted). A defendant should reasonably anticipate
being haled into court in a forum state within which it
purposefully avail[ed] itself of the privilege of conducting
activities, ... thus invoking the benefits and protections of its
laws. Id. (citation omitted). The Eighth Circuit considers
five factors to measure minimum contacts: (1) the nature and
5
quality of a defendants contacts with the forum state; (2) the
quantity of such contacts; (3) the relation of the cause of
action to the contacts; (4) the interest of the forum state in
providing a forum for its residents; and (5) the convenience of
the parties. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070,
1073-74 (8th Cir. 2004). The court gives significant weight to
the first three factors. See id. The third factor distinguishes
general jurisdiction from specific jurisdiction. See Coen, 509
F.3d at 905. Specific jurisdiction refers to jurisdiction over
causes of action arising from or related to a defendants actions
within the forum state, while general jurisdiction refers to the
power of a state to adjudicate any cause of action involving a
particular defendant, regardless of where the cause of action
arose. Id. (citation omitted).
Because Services does not contend that the basis for
personal jurisdiction is the continuous and systematic contacts
of general jurisdiction with the forum state, the court considers
only whether specific jurisdiction exists over defendant.
Johnson v. Woodcock, 444 F.3d 953, 956 (8th Cir. 2006). Specific
jurisdiction occurs when a defendant has purposefully directed
his activities at residents of the forum and the cause of action
arises[s] out of or relate[s] to a defendants activities
within that state. Burger King Corp. v. Rudzewicz, 471 U.S. 462,
472 (1985). Savings has no offices, personnel or bank accounts,
nor does it own or possess any real property in Minnesota.
Savings operates a website accessible to Minnesota residents, but
6
energy services are not available for order directly from that
site, and Savings has conducted no business in the state.
Rather, Savings and its affiliates supply only customers who have
accounts in New York, Texas, Illinois or Indiana. (Stiles Decl.
10.) Savings has not advertised to Minnesota consumers or
businesses and does not have employees or sales representatives
in the state. Further, Savings has not transacted any business
with Services. Services, however, argues that specific
jurisdiction is appropriate under Calder v. Jones, 465 U.S. 783
(1984), because Savings allegedly committed an intentional tort
knowingly causing an injury felt by Services in Minnesota.
Under Calder, when a plaintiff makes such allegations, a
court evaluates additional factors to determine whether the
defendant could reasonably anticipate being haled into court
in the forum state. Calder, 465 U.S. at 790 (quoting World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98 (1980)); Dakota
Indus., 946 F.2d at 1391 ( Calder requires the consideration of
additional factors when an intentional tort is alleged.).
Specifically, a court considers whether the alleged tortfeasor
expressly aimed its intentional tortious conduct at the forum
state and knew that the brunt of th[e] injury would be felt by
the plaintiff in the forum state. Calder, 465 U.S. at 789-90;
see also Steinbuch v. Cutler, 518 F.3d 580, 586 (8th Cir. 2008)
(alleged tortfeasor must know plaintiff would feel brunt of
injury in forum state); Dakota Indus., 946 F.2d at 1390-91. The
7
Calder test is construed narrowly, Minn. Pub. Radio v. Va.
Beach Educ. Broad. Found., 519 F. Supp. 2d 970, 980 (D. Minn.
2007) (citations omitted), and although it lends support to
jurisdictional claims, Calder does not provide an independent
basis for personal jurisdiction in the Eighth Circuit. See
Lindgren v. GDT, LLC, 312 F. Supp. 2d 1125, 1133 (S.D. Iowa
2004).
Services argues that Savingss allegedly tortious conduct
was expressly directed at Minnesota, where Services is
incorporated and conducts business. Under the Calder analysis, a
court may consider a companys headquarters as the location in
which it would feel the brunt of the injury. See Anheuser-Busch,
Inc. v. City Merch., 176 F. Supp. 2d 951, 959 (E.D. Mo. 2001).
Therefore, Services experienced the brunt of the injury in
Minnesota by receiving numerous communications from Savingss
customers.
Services, however, has not demonstrated that Savings
expressly aimed its tortious conduct at Minnesota. Although
Calder is sometimes characterized ... as the effects test,
more than mere effects supported the Supreme Courts holding in
Calder. Superior Edge, Inc. v. Maricopa County Cmty. Coll.
Dist., 509 F. Supp. 2d 786, 794 (D. Minn. 2007) (quoting Hicklin
Engg, Inc. v. Aidco, Inc., 959 F.2d 738 (8th Cir. 1992)). As
noted, Savings operates only in Indiana, Illinois, New York and
Texas, and does not advertise in Minnesota, have customers in
Minnesota, or conduct business in Minnesota. Services has only
8
received complaints from consumers located outside Minnesota, and
those complaints all relate to activities occurring outside
Minnesota. Additionally, none of the negative press occurred in
Minnesota publications or was directed to Minnesota consumers or
businesses. Therefore, Savingss passive knowledge that Services
would feel the injury arising from the alleged trademark
infringement is not sufficient to invoke Calder. See id.
Absent additional minimum contacts and evidence that Savings
expressly aimed its conduct at Minnesota, the Calder test does
not aid Servicess assertion of personal jurisdiction.
CONCLUSION
Accordingly, IT IS HEREBY ORDERED that defendants motion to
dismiss for lack of personal jurisdiction [Doc. No. 3] is
granted.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: August 19, 2008
s/David S. Doty
David S. Doty, Judge
United States District Court
 

 
 
 

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