United States District Court, D. Massachusetts
ORDER ON MOTION TO DISMISS AND MOTION TO
Sorokin, United States District Judge
March 31, 2017, CR Associates L.P. (“CR”) sued
defendants Selfstorage.com, LLC, (“Selfstorage”);
Argus Self Storage Sales Network, Inc.,
(“Argus”); and Sparefoot, Inc
(“Sparefoot”), claiming that these entities
violated federal and Massachusetts trademark and unfair
competition laws by the improper use of CR's trademark
name on defendants' websites. Doc. No. 1. Specifically,
CR alleges the defendant websites have used CR's mark
“Cross Road Storage” (a) to boost defendants'
Google search results and (b) on defendants' own
websites, to say CR's self-storage facility is
“unavailable” while directing viewers to other
self-storage facilities under contract with defendants.
Id. at ¶¶ 12-23. At issue in the complaint
are two websites, Selfstorage.com and Sparefoot.com, both of
which are operated by Sparefoot, see id.; Doc. No.
31 at 2; Selfstorage owns the domain name Selfstorage.com,
the use of which it licensed to Sparefoot. Doc. No. 31 at 1.
Defendant Selfstorage moves to dismiss for lack of personal
jurisdiction. Doc. No. 29. Defendant Sparefoot moves to
transfer pursuant to a forum selection clause in a contract
allegedly executed on February 2, 2017. Doc. No. 32. CR
opposes both motions, Doc. Nos. 29, 32, and has filed an
emergency motion to amend its complaint, Doc. No. 70.
EMERGENCY MOTION TO AMEND
Emergency Motion to Amend (Doc. No. 70) is DENIED for several
reasons. First, as to Selfstorage it is futile, the Court
lacks personal jurisdiction over Selfstorage, infra
at 3-5, and nothing in the proposed Amended Complaint changes
the jurisdictional analysis. Second, purportedly, the motion
to amend eliminates claims arising from conduct after the
execution of the February 2, 2017 contract and thus avoids,
according to CR, the forum selection clause. Doc. No. 70 at
4-5. Whatever the merits of such a position, neither the
language of the proposed Amended Complaint nor CR's
conduct support the conclusion that CR disavows its claims
arising from conduct that transpired after February 2, 2017.
See Doc. No. 70-3. The Proposed Amended Complaint
contains no such disclaimer and does contain general language
suggesting the claims are based upon post February
2, 2017 conduct. E.g. id. at ¶¶ 27, 32,
37, 42, 48 (“Defendants' actions have damaged
and continue to damage Plaintiff's rights,
reputation, and good will.”) (emphasis added);
id. at 15 (requesting “appropriate preliminary
and permanent injunctive relief.”). Furthermore, CR
moved for partial summary judgment on liability from its
Mass. Gen. Laws. Chapter 93A claim based upon events between
December 25, 2016 and March 25, 2017. Doc. No. 81 at page 5;
see also Doc. No. 82 at 4. In CR's statement of
facts, Doc. No 82, it stated that its expert
“calculations are based on analysis of a three-month
period in which it is undisputed that Sparefoot was using the
CrossRoad Storage name without authorization on its
websites.” Id. at 4 n.1. This period includes
dates after the February 2, 2017 contract. Thus, CR,
continues to rely on post February 2, 2017 events as the
basis for its claims. Accordingly, its Motion to Amend (Doc.
No. 70) is DENIED.
SELFSTORAGE'S MOTION TO DISMISS
Court applies the prima facie standard for determining
personal jurisdiction in this case. Foster-Miller, Inc.
v. Babcock & Wilcox Canada, 46 F.3d 138, 143 (1st
Cir. 1995). “To make a prima facie showing . . . the
plaintiff ordinarily cannot rest upon the pleadings, but is
obliged to adduce evidence of specific facts. . . [T]he court
[then] . . . must accept the plaintiff's (properly
documented) evidentiary proffers as true for the purpose of
determining the adequacy of the prima facie jurisdictional
showing.” Id. at 145. The facts here are
undisputed. Defendant Selfstorage has no activities,
operations or customers in Massachusetts. It is organized and
based outside of Massachusetts. Doc. No. at ¶¶ 5,
7. There is no general jurisdiction over Selfstorage, and CR
does not contend otherwise. See Doc. No 46. CR
asserts only specific jurisdiction. See id.
Selfstorage's connection to this case is narrow: it owns
the domain name “selfstorage.com” and it has
entered into an exclusive license arrangement with defendant
Sparefoot permitting Sparefoot to operate a site using the
domain name. Doc. No. 1 at ¶ 8. A copy of the agreement
is before the Court. Doc. No. 46-2. Under that agreement,
Sparefoot, Inc, not Selfstorage, “shall . . . design,
develop, operate, and manage” the selfstorage.com
website. Id. at 5. Sparefoot, not Selfstorage, bears
responsibility for server hosting, website development and
maintenance, customer service and support, and marketing and
promotion. Id. at 5-6. In other words, the content,
operation and management of the website belongs entirely to
foregoing facts would ordinarily end the jurisdictional
inquiry because they establish both that (1) CR's claims
arise out of conduct that is not Selfstorage's and (2)
the conduct to which CR points to as purposeful availment by
Selfstorage-the content or operation of the website-is not
Selfstorage's conduct. See Doc. No. 46 at 6-7.
But CR points to several more facts to support the assertion
of the jurisdiction. First, CR asserts that Selfstorage,
under the agreement, “actively participates in the
maintenance and upkeep of the site.” Id. at 3.
The agreement says otherwise. Doc. No. 46-2 at 5-6.
Selfstorage's only responsibility has to do with hosting
the domain name, paying the registration fees for the name,
and aiding in recovery if the name becomes unavailable.
Id. at 6. All of this is unrelated to Massachusetts,
CR's claims, or purposeful availment. See Hilsinger
Co. v. FBW Investments, 109 F.Supp.3d 409, 430 (D. Mass.
2015) (explaining that, as a general rule, personal
jurisdiction “does not exist over a licensor by virtue
of its status if it . . . has no dealings with the licensee
beyond the receipt of royalty income”) (quotations
omitted). Selfstorage's limited responsibilities do not
involve content control or use of the website
Selfstorage.com. Second, Selfstorage may sell or assign its
ownership interest in the domain name. Id. at 16.
But, that right has no relationship to the instant claims or
the forum Massachusetts. Finally, CR asserts Selfstorage
“has the legal obligation to indemnify Sparefoot for
any legal action taken cause [sic] by the use of
www.selfstorage.com and [Selfstorage] has the right to
control the defense or settle any claims.” Doc. No. 46
at 9 (citing Doc. 46-2 at 11-12). By its terms, this
provision only applies to events “arising prior to
[January 1, 2015] the Effective Date [of the
agreement].” Doc. No. 46-2 at 12. Even assuming this
provision implies that Selfstorage controlled the content of
Selfstorage.com prior to January 1, 2015, the provision is of
no assistance to CR. The only specific factual allegations
described in the complaint occurred in February 2017. Doc.
No. 1-5. CR amplified these facts by asserting that it first
become aware of the problems described in the Complaint in
December, 2016. Doc. No. 47 at 2.
Plaintiff concedes, “a license agreement that merely
entitles the licensor to royalties without reserving a right
to control the licensee's actions will not, by itself, be
sufficient to support personal jurisdiction.” Doc. No.
46 at 6-7 (quoting Automated Facilities Mgmt. Corp. v.
Smartware Grp., Inc., No. 12-CV-327-PB, 2013 WL 5723314,
at *4 (D.N.H. Oct. 21, 2013)). Under these circumstances, CR
has failed to meet its burden to establish that its claims
against Selfstorage arise out of Massachusetts or that
Selfstorage purposefully availed itself of the opportunity to
do business here.
foregoing reasons, the Motion to Dismiss for Lack of Personal
Jurisdiction (Doc. No. 20) is ALLOWED.
SPAREFOOT'S MOTION TO TRANSFER VENUE
moves to transfer this case to the United States District
Court for the Western District of Texas, Austin Division,
pursuant to 28 U.S.C. § 1404. Doc. No. 32. In support of
its motion, Sparefoot cites a forum selection clause in a
contract agreement between Sparefoot and CR that CR allegedly
executed on February 2, 2017. Id.
a client of Sparefoot involves four steps. Doc. Nos. 50-1 at
3; 56 at 2. First, a potential client requests a sign-up code
by calling a phone number and entering, online, the code.
Doc. No. 56 at 2. Though nothing specifically before the
Court identifies when such a call was made on behalf of CR,
it appears it was done as the process requires it. Second,
the potential client creates an online account by completing
certain company information as well as establishing both a
username and email address for login and contact purposes.
Id. at 2. Here, Kenneth Alves, Jr., did that on or
about January 22, 2017 by creating an account in the name of
Cross Road Self Storage using the following email address:
email@example.com. Doc. No. 34 a 3. Third,
Sparefoot requires new clients to agree to Sparefoot's
terms. Doc. No. 56 at 2. Specifically, Sparefoot requires
each new client to agree to certain payment rules, audit
a hyperlink that when clicked brings the user to a document
entitled “terms of service.”
Id. The user must click a box next to an
“I agree” statement for each of these agreements.
Id. at 3. The fourth step is submission of payment
preferences and facility information. Id. at 3.
Alves, Jr., completed the four steps, including agreeing to
all contract terms on February 2, 2017. Id. at 4.
client completes the four steps of the sign-up process, a
“walkthrough” between Sparefoot and the client is
scheduled. Doc. No. 35 at 2. The purpose of the walkthrough
is “to brief a new client regarding any actions that
the client must take to complete the onboarding of its
account with Sparefoot and to become an active Sparefoot
client.” Id. at 2. Despite a series of late
January through late February 2017 phone calls between Alves,
Jr., and a representative of Sparefoot, the walk through
never occurred. Id. at 2. And thus, CR never became
an active client of Sparefoot.
more facts bear mention. The specific “Facility
Unavailable” messages CR cites in the Complaint, Doc.
No. 1 at ¶ 19, according to the affidavits before the
Court occurred after Alves, Jr., signed the terms of
use on February 2, 2017. Doc. No. 34 at 3. Sparefoot also
alleges that the messages only arose because it was in the
middle of transitioning CR from non-client to client status,
see id., assertions CR disputes. Second, the
combined ToU/ToS provides that “The federal and state
courts of Travis ...