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Factory Direct Wholesale, LLC v. Giantex, Inc.

United States District Court, N.D. Georgia, Atlanta Division

February 5, 2018

FACTORY DIRECT WHOLESALE, LLC, Plaintiff,
v.
GIANTEX, INC., GOPLUS CORP., and WEI WU, Defendants.

          OPINION AND ORDER

          WILLIAM S. DUFEY, JR. UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendants Giantex, Inc. (“Giantex”), GoPlus Corp. (“GoPlus”), and Wei Wu's (collectively, “Defendants”) Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue, or Alternatively, to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) [10].

         I. BACKGROUND

         Plaintiff Factory Direct Wholesale, LLC (“Factory Direct”) is a limited liability company organized under the laws of the State of Georgia. Defendant GoPlus is a California corporation that allegedly owns or controls Defendant Giantex, also a California corporation. Defendant Wei Wu is an individual and citizen of California. Mr. Wu is the Chief Executive Officer (“CEO”) of GoPlus and allegedly has ownership interests in GoPlus and Giantex. (Compl. ¶ 5).

         Factory Direct is a Georgia-based company with rights it asserts to certain trademarks and trade names protected by state and federal law. Factory Direct alleges that since 2005 it has been operating online marketplaces for various products including home, office, pet, and health products using the following trade names and trademarks: “Factory Direct Wholesale, ” “FDW, ” “BestPet, ” “BestOffice, ” and “BestMassage.” (Compl. ¶ 11). Factory Direct has a federal trademark registration issued by the U.S. Patent and Trademark Office for “BestPet” (Registration No. 3934022). ([1.2]). BestPet refers to pet crates and crate covers, pet furniture, and play yards for pets. (Compl. ¶ 14). Factory Direct also alleges trademark registration for “BestOffice” and “BestMassage.” ([1.3], [1.4]).

         Factory Direct alleges that Defendants are unlawfully infringing its trade names and trademarks in sales of certain products by Defendants on eBay.com and Amazon.com. (Compl. ¶ 20). As an example of this claimed infringement, Factory Direct attached to the Complaint an “Order Details” invoice for a pet stroller (the “Stroller”) sold by Defendant Giantex under the BestPet name on Amazon.com to a consumer in Duluth, Georgia. (Compl. Ex. 1 (the “Accused Sale”)). The invoice shows that on or about January 19, 2015, Eastern Enterprises, LLC in Duluth, Georgia ordered the Stroller from Giantex through Amazon.com. (Compl. Ex. 1). Giantex is listed as the seller on the invoice. Id. GoPlus shipped the Stroller to Eastern Enterprises at its Duluth, Georgia address. (Declaration of Wei Wu [10.7] (“Wu Decl.”) ¶¶ 5-6).[1] Factory Direct concedes that Eastern Enterprises is its affiliate and that the Stroller was ordered by Eastern Enterprises to document that Defendants were engaging in infringing sales.

         On January 30, 2017, Factory Direct filed its Complaint for Damages and Injunctive Relief [1] (the “Complaint” or “Compl.”). Factory Direct asserts claims for infringement of a federally protected registered trademark under 15 U.S.C.§ 1114 (Count I); unfair competition under 15 U.S.C. § 1125 (Count II); common law trademark infringement (Count III); and violation of the Georgia Uniform Deceptive Trade Practices Act, O.C.G.A. § 10-1-370 et seq. (Count IV). Factory Direct seeks an injunction preventing Defendants from infringing on its trademarks and trade names and a judgment for damages and unlawful profits generated by Defendants unauthorized use of Factory Direct's trademarks and trade names.

         Factory Direct alleges that this Court has specific jurisdiction over each of the Defendants because they each regularly transact, solicit, or conduct business in Georgia, including deriving substantial revenue from internet sales of goods sold to and used by consumers in Georgia and this judicial district. (Compl. ¶ 9).[2]Factory Direct alleges only the Accused Sale as evidence of Defendants' contacts with Georgia.

         On March13, 2017, Defendants filed their Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue, or alternatively, Motion to Transfer Venue [10].

         Defendants submitted affidavits and other evidence of the nature and extent of their contacts with the State of Georgia. The evidence submitted shows that Defendant Wu is not a resident of Georgia. He maintains residences in Ningbo, China, and San Bernardino County, California. He does not maintain a bank or financial account in Georgia. (Wu Decl. ¶ 9). Mr. Wu does not own any real or personal property or lease any real or personal property in Georgia. He does not have an agent or representative in Georgia, and he has not conducted any business in Georgia.

         Giantex and GoPlus do not have offices, bank or financial accounts, telephone numbers, employees, agents, representatives, or real or personal property, owned or leased, in Georgia; and their documents and records are maintained at their places of business in California. (See Declaration of Tommy Xu [10.2] (“Xu Decl.”) ¶¶ 2-3; Wu Decl. ¶¶ 2-3). Giantex and GoPlus are not registered to do business in Georgia. (Xu Decl., ¶¶ 2-3; Wu Decl., ¶¶ 2-3). Giantex and GoPlus do not provide services, advertise, solicit, or conduct business activity directed to or in Georgia except “that Giantex Inc. sometimes sells products to Georgia based on Internet orders placed by buyers through third party Internet website [sic] that is accessible from anywhere in the United States, such as Amazon.com.” (Xu Decl. ¶ 3). Similarly, “GoPlus ships products to Georgia occasionally for Internet orders placed by buyers through third party Internet website [sic] that is accessible from anywhere in the United States, such as Amazon.com.” (Wu Decl. ¶ 3).

         II. DISCUSSION

         A. Personal Jurisdiction Principles

         A plaintiff bears the burden of establishing personal jurisdiction over the defendants against which it files an action. Consolidated Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir. 2000); Diamond Crystal Brands, Inc. v. Food Movers Intern., Inc., 593 F.3d 1249, 1257 (11th Cir. 2010).

         A federal court undertakes a two-step inquiry in determining whether personal jurisdiction exists: “the exercise of jurisdiction must (1) be appropriate under the state long-arm statute and (2) not violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution.” United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). Georgia's long-arm statute provides limited circumstances in which a court may exercise personal jurisdiction over a nonresident defendant “in the same manner as if he or she were a resident of this state, if in person or through an agent, he or she . . . [t]ransacts any business within this state.” O.C.G.A §§ 9-10-91(1).[3]

         “The Due Process Clause requires that the defendant's conduct and connection with the forum State be such that he should reasonably anticipate being haled into court there.” Diamond Crystal, 593 F.3d at 1267 (internal quotation marks omitted) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)). “The heart of this protection is fair warning” to the defendant. Id.; see Licciardello v. Lovelady, 544 F.3d 1280, 1284 (11th Cir. 2008) (“The Constitution prohibits the exercise of personal jurisdiction over a nonresident defendant unless his contact with the state is such that he has ‘fair warning' that he may be subject to suit there.”). “Therefore, states may exercise jurisdiction over only those who have established certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Diamond Crystal, 593 F.3d at 1267 (quoting Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414 (1984)). “The presence of minimum contacts raises a presumption that the court may constitutionally exercise jurisdiction” and, to rebut that presumption, the defendant “must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1221 n.29 (11th Cir. 2009) (internal quotation marks omitted) (quoting Burger King, 471 U.S. at 477).

         When a defendant files a motion to dismiss for lack of personal jurisdiction and an evidentiary hearing is not held, “the plaintiff bears the burden of establishing a prima facie case of jurisdiction over the movant, non-resident defendant.” Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988). “A prima facie case is established if the plaintiff presents enough evidence to withstand a motion for directed verdict.” Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990). A party presents enough evidence to withstand a motion for directed verdict by putting forth substantial evidence “of such quality and weight that reasonable and fair-minded persons in the exercise of impartial judgment might reach different conclusions.'” Walker v. NationsBank of Florida, 53 F.3d 1548, 1554 (11th Cir. 1995).

         In deciding a motion to dismiss “[t]he district court must accept the facts alleged in the complaint as true, to the extent they are uncontroverted by the defendant's affidavits.” Madara, 916 F.2d at 1514. If a defendant “challenges jurisdiction by submitting affidavit evidence in support of its position, the burden traditionally shifts back to the plaintiff to produce evidence supporting jurisdiction.” Diamond Crystal, 593 F.3d at 1257. “Where the plaintiff's complaint and supporting evidence conflict with the defendant's affidavits, the court must construe all reasonable inferences in favor of the plaintiff.” Id.

         B. Personal Jurisdiction Under Georgia's ...


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