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Welspun USA, Inc. v. Eke Tekstil Konfeksiyon Turizm Sanayi Ve Ticaret A.S.

United States District Court, D. Massachusetts

July 18, 2017

WELSPUN USA, INC., et al., Plaintiffs,
v.
EKE TEKSTIL KONFEKSIYON TURIZM SANAYI VE TICARET A.S., Defendant.

          ORDER ON MOTION TO DISMISS (DOC. 19)

          Leo T. Sorokin United States District Judge

         Defendant Eke Tekstil Konfeksiyon Turizm Sanayi Ve Ticaret A.S., a Turkish corporation, has moved to dismiss this case for lack of personal jurisdiction.[1] Doc. 19; Doc. 20 at 2. For the reasons that follow, the Court ALLOWS the Motion.

         I. BACKGROUND

         On February 22, 2017, Plaintiffs Welspun USA, Inc. (“Welspun USA”), Welspun Global Brands Limited (“WGBL”), and Welspun India Limited (“WIL”) (collectively, “Welspun”) filed this action against Defendant for “willful” trademark infringement and engagement in unfair competition. Doc. 1. Welspun, a “manufacturer and supplier of home textiles, . . . has continuously used the trademark HYGROCOTTON in connection with bed sheets and towels.” Id. at 3. WIL owns a U.S. registered trademark for HYGROCOTTON, “which issued on August 9, 2005 and has a priority date of November 13, 2003.” Id. According to Plaintiffs, “[s]ubsequent to the November 13, 2003 filing date . . ., Defendant or its predecessor in interest began using the mark HYDROCOTTON for products identical or closely related to those sold under Welspun's HYGROCOTTON brand in the United States.” Id. at 4. Plaintiffs claim Defendant's mark infringes upon their mark and is deceptive, in violation of the Lanham Act, 15 U.S.C. §§ 1114(1), 1125(a); Massachusetts common law; and Mass. Gen. Laws ch. 93A (“Chapter 93A”). Id. at 6-8.

         II. RELEVANT JURISDICTIONAL FACTS[2]

         Defendant is incorporated and resides in Turkey. Doc. 20-1 at 1. It is affiliated with non-defendant Eke USA, Inc. (“Eke USA”), “a New Jersey corporation authorized to do business in New York.” Id. Defendant “has not leased or owned properties in Massachusetts; maintained offices in Massachusetts; kept a telephone listing or files in Massachusetts; had employees or agents based in Massachusetts; advertised in Massachusetts; registered to do business in Massachusetts; had a bank account in Massachusetts; or been required to file Massachusetts state taxes.” Id. at 2. Defendant “has no investors in Massachusetts, and does not maintain an agent for service of process in Massachusetts.” Id. Defendant maintains a website that “does not target Massachusetts customers” and that does not allow customers “the ability to purchase goods.” Id. Rather, “[t]he website simply provides general information - including a catalogue, an overview of the company, and contact information.” Id. Defendant “does all of its manufacturing in Turkey” and, since 2014, another Turkish company, Veritas, has “ship[ped] HYDROCOTTON-branded products to third parties in the United States.” Id. Defendant “has displayed HYDROCOTTON-branded products at a showroom in Manhattan.” Id. Neither Defendant nor Eke USA sells or ships Hydrocotton-branded products into Massachusetts. Id. Neither Defendant nor Veritas has ever shipped Hydrocotton-branded products to Massachusetts. Id. Since 2014, Veritas has shipped Hydrocotton-branded products manufactured by Defendant to “only a handful of states, including New York.” Id. at 2-3. Prior to 2014, Defendant shipped Hydrocotton-branded products to the United States, but never shipped to Massachusetts. Id. According to the Executive Director of Eke USA, Defendant “has taken no affirmative steps to ensure that its goods are marketed, sold, and/or distributed in Massachusetts.” Id. at 3.

         Defendant's Hydrocotton towels are sold at various stores in Massachusetts, including Nordstrom Rack, Nordstrom, Pottery Barn, and Bloomingdales. Doc. 24-2 at 1-9. The towels are also featured on various retailers' websites, which “offer[] Hydrocotton products for purchase and shipment into Massachusetts.” Id. at 10. In addition, Defendant “has two websites (1) (http://www.eke.com.tr/) containing HYDROCOTTON product information and a contact page providing website visitors with contact information, and (2) an interactive internet store (http://ekehome.com) that appears to sell HYDROCOTTON-branded products to consumers in Turkey as the site appears in Turkish and contains a number of interactive features, social media links, and contact information.” Doc. 24 at 11 (citation omitted). These websites are of course accessible to anyone with internet access, including “consumers in Massachusetts.”[3] Id. Defendant's website also displays a map of the entire world with many countries highlighted, including the United States, and this page states that Defendant “exports” its products to the highlighted regions. Doc. 24-18 at 16.

         Finally, in an April 2017 Pottery Barn catalog sent to people in Massachusetts, two pages of the catalog promote the sale of Hydrocotton towels. Doc. 30-1 at 9. Thus, “[p]romotional materials containing the HYDROCOTTON mark are now being delivered directly to the doors of Massachusetts consumers.” Id. at 3.

         III. RELEVANT LAW

         “The plaintiff has the burden of establishing that jurisdiction over the defendant lies in the forum state.” Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016) (citation omitted). “Faced with a motion to dismiss for lack of personal jurisdiction, a district court may choose from among several methods for determining whether the plaintiff has met its burden, ” the “most common[]” being the prima facie method. Id. (citations, internal quotation marks, and alterations omitted); A Corp. v. All American Plumbing, 812 F.3d 54, 58 n.5 (1st Cir. 2016) (citation and internal quotation marks omitted). Under that method, the plaintiff must “proffer evidence which, taken at face value, suffices to show all facts essential to personal jurisdiction.” Baskin-Robbins, 825 F.3d at 34 (citations omitted). “It is not enough for [a plaintiff] to rely on unsupported allegations in its pleadings.” A Corp., 812 F.3d at 58 (citations and internal quotation marks omitted). “Rather, [the plaintiff] must put forward evidence of specific facts to demonstrate that jurisdiction exists.” Id. (citations and internal quotation marks omitted); see also Carreras v. PMG Collins, LLC, 660 F.3d 549, 552 (1st Cir. 2011) (“A court need not . . . credit bald allegations or unsupported conclusions.”). The Court “must accept [Plaintiffs'] properly documented evidentiary proffers as true and construe them in the light most favorable to [their] jurisdictional claim.” A Corp., 812 F.3d at 58 (citations omitted). The Court will “also consider facts offered by [Defendant], to the extent that they are not disputed.” Id. (citation omitted).

         To establish personal jurisdiction over Defendant, Plaintiffs “must meet the requirements of both the Massachusetts long-arm statute and the due process clause of the Fourteenth Amendment.” Id. (citation omitted).[4] “The Due Process Clause of the Fourteenth Amendment requires that a defendant have certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Baskin-Robbins, 825 F.3d at 35 (citations and internal quotation marks omitted). For the Court to have specific jurisdiction over a defendant, [5] (1) “the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities”; (2) “the defendant's instate contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable”; and (3) the exercise of jurisdiction must be “reasonable.” Copia Communications, 812 F.3d at 4 (citations and internal quotation marks omitted).

         “The inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant focuses on the relationship among the defendant, the forum, and the litigation.” Walden v. Fiore, 134 S.Ct. 1115, 1121 (2014) (citations and internal quotation marks omitted). “[T]he relationship must arise out of contacts that the defendant himself creates with the forum State.” Id. at 1122 (italics in original; citation and internal quotation marks omitted). The “unilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction.” Id. (citation and internal quotation marks omitted). “To be sure, a defendant's contacts with the forum State may be intertwined with his transactions or interactions with the plaintiff or other parties.” Id. at 1123. “But a defendant's relationship with a plaintiff or third party, standing alone, is an insufficient basis for jurisdiction.” Id. (citation omitted). “[I]t is the defendant, not the plaintiff or third parties, who must create contacts with the forum State.” Id. at 1126.

         In the context of intentional torts, a “forum State's exercise of jurisdiction over an out-of-state intentional tortfeasor must be based on intentional conduct by the defendant that creates the necessary contacts with the forum.” Id. (citation omitted). The focus is on “whether the defendant's actions connect him to the forum.” Id. at 1124 (italics in original). Thus, in Walden, the Court held that the federal court in Nevada could not “exercise personal jurisdiction over a defendant on the basis that he knew his allegedly tortious conduct in Georgia would” cause harm in Nevada, because the defendant “never traveled to, conducted activities within, contacted anyone in, or sent anything or anyone to Nevada.” Id. at 1119, 1124.

         In addition, the First Circuit has repeatedly rejected the “stream of commerce” theory of personal jurisdiction, i.e., the theory that “a commercial enterprise should be subject to personal jurisdiction wherever its conduct foreseeably causes injury, regardless of whether the defendant directed its conduct toward the forum state.” Sawtelle v. Farrell, 70 F.3d 1381, 1393 (1st Cir. 1995). Accordingly, in Boit v. Gar-Tec Prod., Inc., 967 F.2d 671 (1st Cir. 1992), the Court held that the federal court in Maine did not have personal jurisdiction over the manufacturer of an allegedly defective product, where (1) the manufacturer had only sold its product to a national retailer, which then sold the product through the mail to the plaintiff in Maine; and (2) there was no evidence that the manufacturer “designed the product for Maine, advertised in Maine, established channels for providing regular advice to customers in Maine, or marketed the product through a distributor who had agreed to serve as a sales agent in Maine.” Id. at 681-82 (citing Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 112 (1987) (plurality opinion)). Moreover, in Rodriguez v. Fullerton Tires Corp., 115 F.3d 81 (1st Cir. 1997), the Court stated that even if a ...


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