Miller Yacht Sales, Inc. v. Smith

Opinions of the United

2004 Decisions States Court of Appeals

for the Third Circuit

9-20-2004

Miller Yacht Sales v. Smith

Precedential or Non-Precedential: Precedential

Docket No. 02-3304

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PRECEDENTIAL ___________

THE UNITED STATES COURT OF Chryssa Yaccarino, Esq. (Argued)

APPEALS FOR THE THIRD CIRCUIT Villani & DeLuca

___________ 703 Richmond Avenue

Point Pleasant Beach, NJ 08742

No. 02-3304 Counsel for Appellant

___________

Ivan Bogachoff, Esq. (Argued)

MILLER YACHT SALES, INC., Bogachoff & Associates

4500 New Hampshire Avenue, NW

Appellant Suite B

Washington, DC 20011

v. Counsel for Appellees

___________

STEVEN SM ITH, individually;

MARINER YACHT SALES, INC.; OPINION OF THE COURT

IVAN BOGACHOFF, individually; ___________

ISLAND YACHT BROKERS;

ABC CORPORATIONS 1-10,

NYGAARD, Circuit Judge.

names being fictitious;

JOHN DOES, (1-10), The District Court dismissed Miller

names being fictitious Yacht Sales’ suit for trade-dress

infringement, statutory and common law

___________ unf air c om p e tition, a nd tor tio us

interference with prospective economic

APPEAL FROM THE UNITED advantage, because it concluded that it

STATES DISTRICT COURT FOR THE lacked personal ju risdictio n over

DISTRICT OF NEW JERSEY Appellees. Because we conclude that

Appellees have sufficient contacts with

(D.C. No. 02-cv-00402) New Jersey, we will reverse.

District Judge: The Honorable Anne E.

I.

Thompson

___________ To defeat Appellee’s motion to dismiss

for lack of personal jurisdiction, Miller

ARGUED OCTOBER 28, 2003 Yacht was required to present a prima

facie case that jurisdiction existed. Mellon

BEFORE: SCIRICA, Chief Judge, Bank (East) PSFS Nat’l Ass’n v. Farino,

NYGAARD, and AMBRO, 960 F.2d 1217, 1223 (3d Cir. 1992).

Circuit Judges. Miller Yacht is a New Jersey corporation

with its principal offices in South Toms

(Filed September 20, 2004) River, New Jersey. Miller Yacht designs,

manufactures, markets and sells boats.

Specific to this action, Miller Yacht has

designed, manufactured, marketed and 1.

(...continued)

sold 34' and 38' Marine Trader Double

engage in transactions on behalf of

Cabin and Sedan Yachts.

Steven Smith and himself, individually,

Appellees also sell and market boats, for the purpose of entering into a

but are not New Jersey residents or business agreement wherein Bogachoff

corporations. Beginning in 1998, Miller would become a broker dealer, along

Yacht and Appellees began negotiating a with his partner, of Marine Trader

deal that was intended to allow the yachts.” Appellant’s App. at 13

Appellees to become exclusive marketing (emphasis added). This allegation is

representatives and dealers for some of supported by Donald Miller’s affidavit in

Miller Yacht’s boats, including the Marine which he states that Smith and

T r a d e r Y a c hts. 1 D u r i n g t h e se Bogachoff acted together during relevant

negotiations and that on a particular

occasion in February, 2000 “[Miller]

1.

Appellees stress their argument that personally saw Defendants Smith and

they were each acting in their individual Bogachoff working in a [boat show]

corporate or personal capacities and that booth soliciting New Jersey Customers.

their contacts with New Jersey should be There, [Miller] was introduced to

analyzed separately. While they are Defendant Bogachoff as the partner of

correct that, in general, a court must Defendant Smith.” Appellant’s App. at

analyze questions of personal jurisdiction 48.

on a defendant-specific and claim- Miller Yacht has alleged that

specific basis, Calder v. Jones, Bogachoff and Smith were partners and

Appellees’ reliance on this general rule that they were each also representing one

ignores substantial portions of Miller of the appellee companies and has

Yacht’s allegations and the evidence supported these allegations with a sworn

submitted to support those allegations. affidavit. We view these allegations and

465 U.S. 783, 790 (1984). Miller Yacht their supporting evidence in a light most

alleges that Steven Smith and Ivan favorable to Miller Yacht and, therefore,

Bogachoff were acting as partners while infer a partnership between Bogachoff

they negotiated with Miller Yacht. In its and Smith. See Pinker v. Roche

complaint, Miller Yacht alleges, Holdings LTD, 292 F.3d 361, 368 (3d

“Defendant Ivan Bogachoff . . . was a Cir. 2002) (holding that in ruling on a

partner with Steven Smith and at all Rule 12(b)(2) motion we must accept all

relevant times hereto and, upon of the plaintiff’s allegations as true and

information and belief, had express, construct disputed facts in favor of the

implied, and/or apparent authority to plaintiff.) We disagree with Appellees

(continued...) (continued...)

2

negotiations, Appellees made phone calls failed to reach an agreement. Miller Yacht

from their offices outside New Jersey to alleges that Appellees misappropriated the

Miller Yacht’s offices in New Jersey. photographs and floor plans contained in

Additionally, Ap pellees transm itted Miller Yacht’s sales brochure, as well as

facsimiles into New Jersey, including other intellectual property owned by Miller

proposed licensing agreements for the Yacht, and used it to produce and market

trade names relevant to the negotiations. boats that are identical to the Marine

Appellees also traveled to Miller Yacht’s Trader Yachts. It further alleges that

offices in New Jersey. During one of these Appellees engag ed M iller Yacht’s

trips, Donald Miller, the president of business contacts in China to manufacture

Miller Yacht, provided Steven Smith with the boats, and thereby interfered with

a copy of M iller Yacht’s sales brochure. Miller Yacht’s business relationship with

That brochure included photographs and those contacts.

floor plans of the Marine Trader Yachts.

Based on these allegations, M iller

Miller Yacht also alleges that it arranged

Yacht sued Appellees for trade-dress

and paid for Smith to travel to China to

infringement, statutory and common law

observe the manufacturing process for the

unf air c om p e tition, a nd tor tio us

Marine Trader Yachts and meet Miller

interference with prospective economic

Yacht’s business contacts relevant to those

advantage. Appellees moved to dismiss

yachts. Miller Yacht claims that Appellees

Miller Yacht’s complaint based on lack of

sent facsimile transmissions to Donald

personal jurisdiction and improper venue.

Miller as part of the planning activities for

The District Court, without holding an

Smith’s trip to China.

evidentiary hearing, granted Appellees’

Eventually, the negotiations between motions to dismiss for lack of personal

the parties reached a standstill and they jurisdiction. This appeal followed.

II.

1.

(...continued) The District Court had subject matter

that these allegations and affidavits fall jurisdiction over this action under 28

short of alleging a relationship between U.S.C. §§ 1331, 1332 and 1367. We have

the parties from which we must attribute appellate jurisdiction over the District

the contact of any one individual Court’s final order under 28 U.S.C. § 1291

Appellee to all of the Appellees. and review the District Court’s decision de

Carteret Sav. Bank, F.A. v. Shushan, 954 novo. Pinker, 292 F.3d at 368.

F.2d 141, 145 n.6 (3d Cir. 1992)

A federal court sitting in New Jersey

(observing that “[a] partnership and each

has jurisdiction over parties to the extent

partner is held liable for the act of every

provided under New Jersey state law. See

other partner, executed in the usual way

Fed. R. Civ. P. 4(e); see also Carteret, 954

of carrying on the business of the

F.2d at 144. New Jersey’s long-arm

partnership”).

3

statute provides for jurisdiction co- forum, and the litigation.” Id. at 368.

e xtensive with the due proc e ss Specific jurisdiction over a defendant

requirements of the United States exists w hen tha t defe ndan t has

Constitution. N.J. Court Rule 4:4-4(c); see “purposefully directed his activities at

Charles Gendler & Co. v. Telecom Equip. residents of the forum and the litigation

Corp., 508 A.2d 1127, 1131 (N.J. 1986). results from alleged injuries that arise out

Thus, parties who have constitutionally of or relate to those activities.” Burger

sufficient “minimum contacts” with New King Corp. v. Rudzewicz, 471 U.S. 462,

Jersey are subject to suit there. See 472 (1985) (internal quotations and

Carteret, 954 F.2d at 149. citation omitted). A single contact that

creates a substantial connection with the

Miller Yacht claims that the District

forum can be sufficient to support the

Court had specific jurisdiction over

exercise of personal jurisdiction over a

Appellees based on their contacts with

defendant. Id. at 475 n.18.

New Jersey.2 Miller Yacht concedes that

Appellees do not have the “consistent and If these “purposeful availment” and

systematic” contacts with New Jersey that “relationship” requirements are met, a

would subject them to general jurisdiction court may exercise personal jurisdiction

in that forum. See Pinker, 292 F.3d at 368 over a defendant so long as the exercise of

n.1. that jurisdiction “comport[s] with fair play

and substantial justice.” Id. at 476

In analyzing Miller Yacht’s specific

(internal quotations and citations omitted).

jurisdiction argument, we must “examine

To defeat jurisdiction based on this

the relationship among the [Appellees], the

fairness inquiry, a defendant must “present

a compelling case that the presence of

some other considerations would render

2.

Miller Yacht also alleges Appellees jurisdiction unreasonable.” Id. at 477.

were subject to personal jurisdiction The Supreme Court has indicated that

under the “effects test.” See Calder, 465 lower courts addressing the fairness

U.S. at 789. Under that test, a party is question may consider “the burden on the

subject to personal jurisdiction in a state defendant, the forum State’s interest in

when his or her tortious actions were adjudicating the dispute, the plaintiff’s

intentionally directed at that state and interest in obtaining the most efficient

those actions caused harm in that state. resolution of controversies, and the shared

Because we find that Appellees have interest of the several States in furthering

sufficient contacts with New Jersey fundamental substantive social policies.”

under the more traditional personal Id. (internal quotations omitted).

jurisdiction analysis, we need not reach

To survive a motion to dismiss for lack

the question of whether the appellees

of personal jurisdiction, a plaintiff bears

would also be subject to jurisdiction

the burden of establishing the court’s

under the effects test.

4

jurisdiction over the moving defendants. that they eventually misappropriated and

Pinker, 292 F.3d at 368. However, when used to injure Miller Yacht.

the court does not hold an evidentiary

Second, Miller Yacht alleges Appellees

hearing on the motion to dismiss, the

placed the misappropriated photos and

plaintiff need only establish a prima facie

floor plans in advertisements in boating

case of personal jurisdiction and the

magazines circulated in New Jersey and in

plaintiff is entitled to have its allegations

at least one brochure that was sent directly

taken as true and all factual disputes drawn

to a potential customer in New Jersey.

in its favor. Id.; see also Carteret, 954

Intentionally and directly transmitting the

F.2d at 142 n.1.

misappropriated property that Appellees

The District Court did not hold an initially obtained in New Jersey back into

evidentiary hearing but did determine, New Jersey is a very strong contact

based on the parties’ submissions and between them and the State. It is also a

arguments, that Miller Yacht failed to second essential element of Miller Yacht’s

satisfy its burden because the contacts it infringement and unfair competition

presented did not show that Appellees claims.3

purposefully availed themselves of New

Miller Yacht also alleges that, at least

Jersey’s laws. We disagree based on three

before Appellees misappropriated its

important contacts and the context of those

intellectual property, Appellees were

contacts.

III.

3.

A. There is no question that this contact is

sufficient to subject Island Yacht Brokers

Trade-dress Infringement and Unfair

and Mariner Yacht Sales to jurisdiction

Competition Claims

in New Jersey. We attribute this contact

First, Miller Yacht alleges that to Appellees because Miller Yacht

Appellees made trips to New Jersey as part specifically alleged that Steven Smith

of their negotiations. Miller Yacht claims was the individual responsible for Island

that during one of these trips Smith came Yacht Brokers’ “‘[advertising and

to New Jersey and received Miller Yacht’s brochure producing] efforts and

sales brochure. The receipt of this sales activities’” Appellants’ App. at 41

brochure was Appellees’ first step toward (quoting affidavit of Steven Smith)

the misappropriation of Miller Yacht’s (brackets in original). As described in

trade-dress, photos and floor plans. This footnote 1, Miller Yacht has also alleged

misappropriation is not only related, but is that Smith and Bogachoff were acting as

essential, to Miller Yacht’s unfair partners during all relevant periods. We

competition and trade-dress infringement accept these allegations as true and,

claims. Thus, Appellees came to New therefore, attribute this contact to all

Jersey allegedly to receive the property Appellees.

5

directly engaged in the marketing of boats Although these negotiations are only

in New Jersey. They attended trade shows indirectly related to Miller Yacht’s trade-

in New Jersey and adjoining states and dress infringement and unfair competition

advertised in regional boating magazines claims, they are directly related to its

that were distributed in New Jersey. These tortious interference claim and are the

pre-misappropriation contacts and the third contact upon which we rely. Miller

continued advertisements in New Jersey Yacht specifically alleges that Appellees

provide a nexus between Appellees and sent facsimile transmissions into New

New Jersey, and logically explain why at Jersey in order to arrange for Smith to

least one New Jersey resident would travel to China to visit the Chinese

request Appellees’ sales brochure. While companies that manufactured the Marine

we do not base our holding on these pre- Trader Yachts for Miller Yacht. Miller

misappropriation contacts (they are not Yacht further alleges that, subsequent to

among the three contacts on which we this trip, Appellees unlawfully engaged

rely), they are relevant to show that the these Chinese companies to produce

request for sales material that Appellees “strikingly similar yachts . . . according to

received from a New Jersey resident was the interior and exterior plans and

not a random or fortuitous occurrence specifications owned by [Miller Yacht],

upon which jurisdiction may not properly using the molds used to construct said

lie. See World-Wide Volkswagen Corp. v. yachts.” Appellant’s App. at 28. Miller

Woodson, 444 U.S. 286, 295-99 (1980) Yacht alleges that Appellees’ engagement

(holding that one fortuitous act connecting of these companies to produce the

a defendant with a state with which it has “strikingly similar” yachts interfered with

no other ties is not sufficient to support the Miller Yacht’s prospective economic

exercise of personal jurisdiction over that advantage flowing from its own

defendant in that state). relationship with these companies.

The contacts alleged by Miller Yacht We conclude that Appellees’ contacts

are sufficient to satisfy the “purposeful with New Jersey in setting up their trip to

availment” and “relatedness” requirements China, coupled with the contacts we found

of due process with respect to Miller sufficient to support the exercise of

Yacht’s trade-dress infringement and personal jurisdiction over Appellees on

unfair competition claims. Miller Yacht’s other claims, are sufficient

to support the exercise of jurisdiction on

B.

the tortious interference with prospective

Tortious Interference Claim economic advantage claim as well.

Miller Yacht also alleges that We disagree with the argument that

Appellees had substantial and repeated these contacts do not support jurisdiction

contact with New Jersey during the over this claim. First, we do not agree that

negotiations between the parties. we must apply an immediate or proximate

6

cause standard to determine whether a contacts to establish jurisdiction with

claim arises out of a defendant’s contacts regard to the plaintiff’s claims. Id.

with a forum state and we do not read

Vetrotex involved contract claims and

Pinker, Vetrotex Certainteed Corp. v.

“there are different considerations in

Consolidated Fiber Glass Products Co.,

analyzing jurisdiction over contract claims

75 F.3d 147 (3d Cir. 1996), or Remick v.

and over certain tort claims.” Remick, 238

Manfredy, 238 F.3d 248, 255-56 (3d Cir.

F.3d at 255-56. Further, in contract claims

2001), as standing for such a proposition.

w e analyze the totality of th e

In Pinker, we had to determine whether a

circumstances surrounding a contract to

foreign issuer and sponsor of American

determine whether the exercise of

Depositary Receipts (“ADRs”) was subject

jurisdiction over the defendant is proper.

to personal jurisdiction in this country on

Id. at 256. We do not consider this

claims that it misrepresented material facts

totality of the circumstances test to be the

relevant to those ADRs.4 We concluded

equivalent of a requirement that the

t h a t because the foreign issuer

defendants’ contacts with the forum be the

“sponsor[ed] an ADR facility [in America,

proximate cause of the plaintiff’s claims.

it] purposely availed itself of the privilege

of conducting activities in the American Remick also does not support a

securities market, and thereby established proximate cause standard. Remick was a

the requisite minimum contacts with the breach of contract case, but involved

United States.” Pinker, 292 F.3d at 371 various tort claims as well. Id. at 256.

(internal quotation omitted). Importantly, With respect to those tort claims, we

we did not apply a proximate cause test to applied the effects test to determine if the

determine personal jurisdiction. Instead, defendant was subject to jurisdiction in

based solely on th e def enda nt’s Pennsylvania. Id. at 258. Similarly, in

sponsorship of the ADR facility at issue, IMO Industries, Inc. v. Kiekert AG, we

an action that was certainly not the applied the effects test to analyze whether

proximate cause of the fraudulent the defendant was subject to jurisdiction in

misrepresentation, we found that the New Jersey on the plaintiff’s intentional

defendant had the requisite minimum tort claims. 155 F.3d 254, 265-66 (3d Cir.

1998). The focus on the effects test in

both these cases convinces us that their

requirement that the tortious actions of the

4. defendant have a forum-directed purpose

In Pinker, the Court was confronted

is not applicable in the more traditional

with a statute that authorized nationwide

specific jurisdiction analysis. As pointed

service of process and, therefore, needed

out in Note 2 supra, the effects test

to determine if the defendant had

expressly requires that “the defendant

sufficient contacts with the United States

expressly aimed its tortious conduct at the

to support jurisdiction. Pinker, 292 F.2d

forum, and thereby made the forum the

at 369.

7

focal point of the tortious activity.” Id. at personal jurisdictio n analysis and

265. This requirement is reasonable indicating the fact-sensitive nature of that

within the effects test because it insures analysis).

that the defendant, who may not have any

This is the approach we take here, and

actual contact with the forum state, have

conclude that Appellees’ contacts with

sufficiently directed his tortious conduct at

New Jersey are sufficient to subject them

the state to render him subject to personal

to jurisdiction on Miller Yacht’s tortious

jurisdiction there. See id. at 265. Unlike

interference claim. First, Miller Yacht

this express requirement in the effects test,

a l l eg e s t h a t A p p e ll e e s se n t

the traditional specific jurisdiction analysis

communications into New Jersey in order

simply requires that the plaintiff’s claims

to set up their trip to China. We have been

“arise out of or relate to” the defendant’s

clear that such communications may be

forum contacts. Burger King, 471 U.S. at

factored into the minimum contacts

472 (internal quotations omitted). We do

analysis. Grand Entm’t Group, Ltd. v.

not agree with the argument that this

Star Media Sales, Inc., 988 F.2d 476, 482-

traditional requirement is the equivalent of

83 (3d Cir. 1993). Second, we cannot

t h e m o r e demanding relate dne ss

ignore the fact that Miller Yacht alleges

requirement of the effects test.

Appellees’ tortious interference resulted

We recognize that our conclusion that from their en gagin g the C hinese

a defendant’s contacts with a forum need companies to build the very boats that

not have been the proximate cause of the Miller Yacht alleges Appellees are using

plaintiff’s injuries in a tort case begs the misappropriated photos and floor plans to

question of what level of relationship is advertise. As described above, those

necessary under the “arise out of or relate photos and floor plans were obtained in

to” requirement. We need not address this New Jersey and were sent back into New

question that has plagued federal Courts of Jersey, after having been misappropriated,

Appeals and has resulted in divergent as part of Appellees’ sales efforts. It is

rules. We have not laid down a specific only in selling the boats that Miller Yacht

rule because we have approached each or Appellees could expect to get any kind

case individually and taken a “realistic of economic advantage from the building

approach” to analyzing a defendant’s agreement with the Chinese companies.

contacts with a forum. Mellon Bank (East) Thus, these sales efforts, and their New

PSFS, Nat’l Ass’n v. Farino, 960 F.2d Jersey-related activities, are vital parts of

1217, 1223 (3d Cir. 1992)(internal Miller Yacht’s tortious interference claims.

quotation omitted); see also Pennzoil The sum of these contacts is sufficient to

Prods. Co. v. Colelli & Assocs. Inc., 149 subject Appellees to personal jurisdiction

F .3d 197 , 203 (3d C ir. 1998 ) in New Jersey on M iller Yacht’s tortious

(acknowledging the dif ficu lty o f interference claim.

formulating bright-line rules in the

8

III. (1984). Because there are no allegations

that appellees’ contacts with the forum are

We easily conclude that jurisdiction

so “continuous and systematic” as to give

over Appellees is consistent with

rise to general jurisdiction, our inquiry is

traditional notions of fair play and

limited to specific jurisdiction. Specific

substantial justice. There is no compelling

jurisdiction permits the exercise of

evidence of record why it would be unfair

personal jurisdiction over non-resident

or unjust for Appellees to litigate this

defendant only if the plaintiff’s claims

dispute in New Jersey. Without such

“arise out of or relate to” the defendant’s

compelling evidence, they cannot avoid

forum contacts. Burger King Corp. v.

t h e Distr ict Court’s ap p r o p r ia te

Rudzewicz, 471 U.S. 462, 472 (1985).

jurisdiction.

Consequently, the specific jurisdiction

For these reasons, we will reverse the determination is both claim-specific, see

District Court’s order dismissing Miller Remick v. Manfredy, 238 F.3d 248, 255-56

Yacht’s complaint and remand the case to (3d Cir. 2001) (analyzing specific

the District Court. jurisdiction over tort and contract claims

separately); Gehling v. St. George’s Sch. of

Med., Ltd., 773 F.2d 539, 543-44 (3d Cir.

1985) (finding personal jurisdiction over

f r a u d u l en t m i s r e p re s e n t a ti o n a nd

SCIRICA, Chief Judge, concurring in part,

emotional distress claims, but not

dissenting in part.

negligence and breach of contract claims),

I write separately because I would find and defendant-specific, see Rusk v.

specific jurisdiction only as to Miller Savchuk, 444 U.S. 320, 332 (1980) (“The

Yacht’s unfair competition and trade dress requirements of International Shoe . . .

infringement claims against appellees must be met as to each defendant.”).5

Island Yacht and Mariner Yacht.

Nevertheless, because appellant’s claims

sound in tort, I would remand for the 5.

Due process requires that non-resident

District Court to consider appellees’ forum

defendants have “minimum contacts”

contacts under the “effects test.” See IMO

with the forum such that the exercise of

Indus., Inc. v. Kiekert AG, 155 F.3d 254,

personal jurisdiction does not offend

265-66 (3d Cir. 1998).

“traditional notions of fair play and

I. substantial justice.” International Shoe

Co. v. Washington, 326 U.S. 310, 316

Personal jurisdiction over a non-

(1945) (citing Milliken v. Meyer, 311

resident defendant may be asserted under

U.S. 457, 463 (1940)). The defendant’s

general or specific theories of jurisdiction.

contacts with the forum state must have a

See Helicopteros Nacionales de Colombia,

basis in some act by which the defendant

S.A. v. Hall, 466 U.S. 408, 414 & n.9

(continued...)

9

II. There is no averment in the complaint

or in the supporting affidavits that

While acknowledging the claim- and

appellees—two non-resident persons and

defendant-specific nature of the specific

t w o out-of-state corpora tions—ar e

jurisdiction inquiry, the majority concludes

collectively organized as a partnership. As

the allegations in the complaint require us

I read the complaint, the allegation that

to attribute the forum contacts of “any one

Smith and Bogachoff “act[ed] as partners”

individual Appellee to all of the

Appellees.” The majority reaches this

conclusion by inferring the existence of a

6.

“partnership” based upon Miller Yacht’s (...continued)

allegations that Smith and Bogachoff A Rule 12(b)(2) motion . . .

“act[ed] as partners” in their negotiations is inherently a matter

with Miller Yacht, in which they which requires resolution

represented Island Yacht and Mariner of factual issues outside the

Yacht, respectively. Although we accept pleadings, i.e. whether in

all allegations in the complaint as true and personam jurisdiction

construe all disputed facts in favor of the actually lies. Once the

plaintiff on a motion to dismiss under Fed. defense has been raised,

R. Civ. Pro. 12(b)(2), I do not believe it is then the plaintiff must

reasonable to infer the appellees engaged sustain its burden of proof

in a “partnership.” 6 in establishing

jurisdictional facts through

sworn affidavits or other

5.

(...continued) competent evidence. . . .

“purposefully avails itself of the [A]t no point may a

privilege of conducting activities within plaintiff rely on the bare

the forum State, thus invoking the pleadings alone in order to

benefits and protections of its laws.” withstand a defendant’s

Hansen v. Denckla, 357 U.S. 235, 253 Rule 12(b)(2) motion to

(1958). The “minimum contacts” dismiss for lack of in

analysis assesses the “relationship among personam jurisdiction.

the defendant, the forum, and the Once the motion is made,

litigation.” Shaffer v. Heitner, 433 U.S. plaintiff must respond with

186, 204 (1977). actual proofs, not mere

allegations.

6.

In acknowledging the procedural Patterson v. FBI, 893 F.2d 595, 603-604

distinctions between a Rule 12(b)(6) (3d Cir. 1990) (citing Time Share

motion and a Rule 12(b)(2) motion, we Vacation Club v. Atlantic Resorts, Ltd.,

have explained: 735 F.2d 61, 67 n.9 (3d Cir. 1984))

(continued...) (internal citations omitted).

10

merely suggests some level of coordinated Aggregating appellees’ contacts

conduct. 7 Of course, this relationship obscures important differences in their

ultimately may prove relevant to the individual forum activities and the alleged

jurisdictional analysis. See Rusk, 444 U.S. conduct giving rise to the claims asserted.

at 332 (“[T]he parties’ relationships with For example, Smith’s contacts with New

each other may be significant in evaluating Jersey in arranging his trip to China did

their ties to the forum.”). But on the not involve Bogachoff or Mariner Yacht.

allegations and affidavits presented, I Moreover, as Miller Yacht’s affidavit

cannot infer the existence of a partnership states, the China trip itself “was in

that would provide the basis for attributing furtherance of negotiations that took place

the jurisdictional contacts of one appellee between . . . Smith, Island Yacht Brokers

to them all.8 and Miller Yacht” relating to Island Yacht

becoming an exclusive dealer of “Marine

Trader” and “Trade Wind” yachts in

7.

The allegations do support an inference Maryland. Appellant App. 41. These

that Smith and Bogachoff acted as agents negotiations did not involve Bogachoff or

for Island Yacht Brokers and Mariner Mariner Yacht. Similarly, the primary

Trader respectively, and their forum forum contact relied upon by the

contacts as agents may be attributed to majority—receipt of the Miller Yacht sales

the appellee corporations accordingly. brochure in New Jersey— is apparently

Grand Entm’t Group v. Star Media attributable only to Smith in his capacity as

Sales, Inc., 988 F.2d 476, 483 (3d Cir. agent for Island Yacht. Even assuming

1993) (“[A]ctivities of a party’s agent Bogachoff had implied authority to act as

may count toward the minimum contacts Smith’s agent during the broker-dealer

necessary to support jurisdiction.”).

8.

Some courts have imputed jurisdictional

8.

contacts to foreign defendants in the (...continued)

absence of a partnership or other legal 1392-93 (7th Cir. 1983) (applying

entity based upon the conspiracy theory conspiracy theory of jurisdiction to

of jurisdiction. See, e.g., Jungquist v. Illinois long-arm statute). That said,

Sheikh Sultan Bin Khalifa Al Nahyan, “[w]hether personal jurisdiction can be

115 F.3d 1020, 1031 (D.C. Cir. 1997) obtained under a state long-arm statute

(recognizing that the conspiracy theory on a conspiracy rationale at all is a

of personal jurisdiction requires plaintiff question of state law.” Stauffacher v.

to plead with particularity “the Bennett, 969 F.2d 455, 460 (7th Cir.

conspiracy as well as the overt acts 1992). While it is unclear whether New

within the forum taken in furtherance of Jersey even recognizes the conspiracy

the conspiracy”) (citation omitted); theory of jurisdiction, we need not

Textor v. Bd. of Regents, 711 F.2d 1387, address this issue because Miller Yacht

(continued...) has not alleged an actionable conspiracy.

11

negotiations with Miller Yacht, this agency defendant, the forum, and the litigation.”

relationship should not provide a basis for Shaffer, 433 U.S. at 204.

imputing forum contacts by Smith to

At one end of the spectrum, the Court

Bogachoff or Mariner Yacht.

of Appeals for the First Circuit has held

I recognize the Supreme Court has that with respect to a tort claim, a non-

r e j e ct e d o v e r l y “ m e c h a n i c a l o r resident defendant’s forum contacts must

quantitative” tests of jurisdiction. Int’l provide the “cause in fact” and “legal

Shoe, 326 U.S. at 319. But even a realistic cause” for the plaintiff’s injury. Mass.

approach to specific jurisdiction must Sch. of Law, Inc. v. Am. Bar Assoc., 142

comport with due process, and due process F.3d 26, 35 (1st Cir. 1998); see also

requires that we consider the forum Marine v. Hyatt Corp., 793 F.2d 427, 430

contacts of each defendant independently (1st Cir. 1986) (holding that forum-related

according to the specific claims asserted. contacts must form a “material element of

proof” in order for the cause of action to

III.

“arise from or relate to” the forum

Even if the alleged forum-related contacts). At the other end of the

contacts could be attributed to all appellees spectrum, the Courts of Appeals for the

en masse, M iller Yacht’s claims do not Fifth and Ninth Circuits formulate a more

necessarily “arise out of or relate to” those expansive interpretation of “arise out of or

contacts. See Burger King, 471 U.S. at relate to,” under which a non-resident

472. The courts of appeals have adopted defendant’s forum contacts are sufficient if

divergent interpretations of “arise out of or they provide a “but for” cause for

relate to” as that phrase relates to the plaintiff’s injury. See Prejean v.

specific jurisdiction analysis. See United Sonatrach, Inc., 652 F.2d 1260, 1270 n.21

Elec. Radio & Mach. Workers of Am. v. (5th Cir. 1981) (noting that “contractual

163 Pleasant St. Corp., 960 F.2d 1080, contacts” may provide “but for” causation

1089 (1st Cir. 1992) (describing for a claim sounding in tort); Doe v. Am.

uncertainty among the circuits); see Nat’l Red Cross, 112 F.3d 1048, 1051 n.7

generally Mark M. Maloney, Specific (9th Cir. 1997) (“[T]he ‘but for’ test is still

Personal Jurisdiction and the “Arise from employed in determining whether a

or Relate to” Requirement...What Does It plaintiff’s injuries arose out of a

Mean?, 50 Wash. & Lee L. Rev. 1265 defendant’s forum-related activities.”).

(Summer 1993). The distinctions between Under this standard, a plaintiff’s claim

these interpretations are not without “arises out of or relates to” a foreign

constitutional significance, as the “arise defendant’s contacts with the forum if the

out of or relate to” requirement establishes defendant’s forum activities provide a link

a due process limitation on the degree of in the causal chain which ultimately leads

permissible attenuation between “the to plaintiff’s injury.

12

Still other courts have navigated a effectively blends the concepts of general

course between these positions. For and specific jurisdiction:

example, in Chew v. Dietrich, 143 F.3d 24

We cannot simply aggregate all of

(2d Cir. 1998), the Court of Appeals for

a defendant’s contacts with a

Second Circuit has suggested a sliding

state—no matter how dissimilar in

scale approach to evaluating the

terms of geography, time, or

“relatedness” of specific jurisdiction

substance—as evidence of the

contacts, which more closely resembles the

constitutionally required minimum

“but for” standard in its potentially

contacts . . . [W]hen conducting

expansive scope:

business with a forum in one

[T]he relatedness test is but a part context, potential defendants

of a general inquiry which is should not have to wonder whether

designed to determine whether the some aggregation of other past and

exercise of personal jurisdiction in future forum contacts will render

a particular case does or does not them liable to suit there. Unless

offend “traditional notions of fair their contacts are continuous and

play and substantial justice.” . . . systematic enough to rise to the

Where the defendant has had only level of general jurisdiction,

limited contacts with the state it individuals and corporations must

may be appropriate to say that he be able to conduct interstate

will be subject to suit in that state business confident that transactions

only if the plaintiff’s injury was in one context will not come back

proximately caused by those to haunt them unexpectedly in

contacts. Where the defendant’s another.

contacts with the jurisdiction that

RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d

relate to the cause of action are

1272, 1277 (7th Cir. 1997) (citations

more substantial, however, it is not

omitted). The Supreme Court has yet to

unreasonable to say that the

definitively resolve the appropriate scope

defendant is subject to personal

of the “arise out of or relate to”

jurisdiction even though the acts

requirement. See Carnival Cruise Lines,

within the state are not the

Inc. v. Shute, 499 U.S. 585, 589 (1991)

proximate cause of the plaintiff’s

(declining to reach the scope of the

injury.

relatedness requirement despite having

143 F.3d at 29 (citations omitted). certified it for review).

By contrast, the Court of Appeals for Although we have not expressly

the Seventh Circuit has rejected this sort of articulated our view on the “arise out of or

“hybrid” jurisdictional analysis which relate to” requirement, our cases implicitly

apply an immediate or proximate cause

13

standard. In analyzing jurisdictional action,” are relevant to the minimum

contacts on a claim-by-claim basis, we contacts analysis. Vetrotex involved a

have been careful to note that forum breach of contract dispute over payments

contacts supporting a contract claim are due under a 1992 supply agreement

not necessarily relevant to establishing between Vetrotex and Consolidated Fiber

jurisdiction over a tort claim. For Glass. The district court dismissed the

example, in Remick, we noted “there are complaint for lack of specific jurisdiction.

different considerations in analyzing We affirmed noting various contracts

jurisdiction over contract claims and over between Vetrotex and Consolidated Fiber

certain tort claims.” 238 F.3d at 255-56. Glass over the previous ten years were not

In that case, we separately analyzed the sufficiently related to the claims based

forum contacts supporting jurisdiction upon the contested supply agreement to

over plaintiff’s breach of contract, tortious give rise to jurisdiction. The claim-by-

interference with contract, claim partitioning of jurisdictional contacts

m isappropriation of im age, c ivil evid ent in Rem ick and Vetro tex

conspiracy and defamation claims. In demonstrates that forum contacts which

finding specific jurisdiction over the merely provide a general context for the

breach of contract claim, we noted the parties’ relationship are insufficiently

contract had been solicited, negotiated, related to a claim to support specific

consummated and performed in the forum. jurisdiction.

At the same time however, we found

Moreover, our holding in Pinker v.

insufficient contacts to support jurisdiction

Roche Holdings, Ltd., 292 F.3d 361 (3d

o v e r plaintiff ’s def ama tio n a n d

Cir. 2002), supports application of the

misappropriation claims notwithstanding

proximate cause standard. In Pinker,

an express contractual relationship

investors filed a securities fraud class

between plaintiff and defendant clearly

action alleging foreign defendant Roche

situated in the forum. In finding specific

made material misrepresentations and

jurisdiction over plaintiff’s intentional

misleading statements in press releases and

interference with contract claim, we

reports filed with the Securities and

reasoned that although the claim sounded

Exchange Commission which caused

in tort, it was “necessarily related to the

plaintiffs to pay artificially high prices for

contract” that was the subject of the

Roche ADRs. The district court dismissed

alleged tortious interference. Id. at 260.

the complaint for lack of personal

Likewise, in Vetrotex CertainTeed jurisdiction and we affirmed. The majority

Corp. v. Consolidated Fiber Glass Prods. holds we based our dismissal “solely on

Co., 75 F.3d 147, 153 (3d Cir. 1995), we the defendant’s sponsorship of the ADR

concluded that only “dealings between the facility at issue, an action that certainly

parties in regard to the disputed contract, was not the proximate cause of the

not dealings unrelated to the cause of fraudulent misrepresentation.” But the

14

misrepresentation claim was not predicated Miller Yacht’s unfair competition and

on sponsorship of the ADRs per se, but trade dress infringement claims relate to

rather on the allegedly fraudulent misuse of its intellectual property, not to

information Roche filed with securities the mere acquisition or possession of that

regulators in connection with that property. 9 For example, the Lanham Act,

sponsorship. In finding Roche established 15 U.S.C. § 1125(a), on which Miller

minimum contacts by purposefully Yacht’s infringement of trade dress (Count

directing its activities towards the forum, I) and federal unfair competition claims

the court noted that “a foreign corporation (Count II) are based, prohibits the “use[] in

that has created an American market for its commerce” of any false descriptions or

securities can fairly expect that that market designations of origin which are likely to

will rely on reports and media releases cause confusion regarding the origin of

issued by the corporation.” Id. at 372. goods or services of another. Id.

The forum contact in Pinker—reporting (emphasis added). Likewise, the New

incorrect or fraudulent information to Jersey Unfair Competition Act (Counts III

federal regulators— was the proximate and IV) prohibits a person from

c a u s e o f p l a in t i f fs ’ f r au d u l e n t appropriating “for his or their own use a

misrepresentation claim. name, brand, trade-mark, reputation or

goodwill of any maker in whose product

IV.

such merchant, firm or corporation deals.”

A. N.J. Stat. § 56: 4-1. A claim for unfair

competition under New Jersey common

The majority finds specific jurisdiction

law (Count V) is substantially similar.

over appellees based on “three important

American Tel & Tel. Co. v. Winback &

contacts, and the context of those

Conserve Program, Inc., 42 F.3d 1421,

contacts.” The first contact concerns

1433 (3d Cir. 1994).

Miller Yacht’s allegation that Smith and

Island Yacht came to New Jersey to Although receipt of the sales brochure

receive one of its sales brochures. by Smith and Island Yacht in New Jersey

Because receipt of the brochure represents may have provided the “first step” for

the “first step” to wa rds th e Miller Yacht’s unfair competition and

misappropriation of M iller Yacht’s trade dress infringement claims, this

photographs, floor plans and trade dress, contact at most might supply the “but for”

the majority concludes this contact

provides a sufficient jurisdictional basis

9.

for appellant’s common law and statutory There are no allegations that Smith

unfair competition and trade dress improperly acquired the brochure. It

infringement claims. I have a different appears Miller Yacht voluntarily

view. provided the brochure to Smith during

negotiations over the trademark licensing

and exclusive dealership agreements.

15

causation for these claims. The conduct Fiberfloat Corp., 897 F.2d 696, 700 n.10

which provides the immediate cause of (3d Cir. 1990) (noting that non-resident

injury relates to the subsequent improper defendant’s marketing strategy, including

use of the material contained in the advertising in national publications

brochure. Applying the proximate cause distributed in the forum, provided only

s t a n d a rd , M i l l e r Y a ch t ’ s u n fa ir tangential support for specific personal

competition and trade dress infringement jurisdiction); Gehling, 773 F.2d at 542

claims against Smith and Island Yacht do (holding that advertising in newspapers

not “arise out of or relate to” receipt of the which reach the forum are insufficient to

sales brochure. establish “minimum contacts”). Moreover,

there is no evidence in the record

B.

regarding the frequency with which Island

The majority observes that “plac[ing] Yacht advertised in these publications, the

the misappropriated photos and floor plans number of New Jersey residents reached,

in boating magazines circulated in New or whether Island Yacht had any

Jersey and in at least one brochure that was knowledge or control over the extent to

sent directly to a potential customer in which they targeted New Jersey

New Jersey” provides a “strong contact” in consumers. Nevertheless, the extent or

support of appellant’s unfair competition frequency of advertising in the forum may

and trade dress infringement claims. The be less significant where, as here, the

record reveals that these allegedly plaintiff’s unfair competition and trade

improper transmissions into the forum dress infringement claims arose directly

actually involve: (1) the use of allegedly out of the improper use of Miller Yacht’s

misappropriated photographs and floor photographs, plans and trade dress in

plans in Island Yacht advertisements commerce. Burger King, 471 U.S. at 476

which appear in trade publications n.18 (“So long as it creates a ‘substantial

distributed in New Jersey; and (2) the use connection’ with the forum, even a single

of allegedly misappropriated photographs act can support jurisdiction.”). I agree

by Mariner Yacht in a sales brochure with the majority that the allegations

distributed to a single New Jersey resident. relating to Island Yacht’s publication of

See JA 44, 47-48. These contacts should certain advertisements in trade journals

be evaluated separately to determine that reached New Jersey are sufficiently

whether they provide a sufficient basis for related to Miller Yacht’s unfair

exercising specific jurisdiction. competition and trade dress claims as to

provide specific jurisdiction over Island

Advertising in a trade publication that

Yacht with respect to those claims.

reaches the forum generally does not,

without more, provide a sufficient basis But there are no allegations or any

for exercising specific jurisdiction over a evidence in the record that appellee Smith

foreign defendant. See, e.g., Mesalic v. was involved in this advertising effort or

16

otherwise was engaged in conduct that provided appellees the opportunity to deal

would permit imputing Island Yacht’s with two Chinese companies with which

forum contacts to him. Nicholas v. Saul Miller Yacht apparently had preexisting

Stone & Co. LLC, 224 F.3d 179, 184 (3d business relationships to design and build

Cir. 2000) (“[J]urisdiction over . . . 34' and 38' double cabin and sedan yachts.

[individual] defendants does not exist The majority concludes these negotiations

simply because they are agents or provide a jurisdictional basis for Miller

employees of organizations w hich Yach t’s tortious interfe rence with

presumably are amenable to jurisdiction.”). prospective economic advantage claim.

Likewise, for reasons stated, I would not

To establish a claim for tortious

impute this contact to appellees Bogachoff

interference with prospective economic

or Mariner Yacht.

advantage, a plaintiff must show (1)

The second contact involves the unlawful, intentional interference with the

mailing of a Mariner Yacht brochure prospect of, or reasonable expectation of,

allegedly containing M iller Yacht’s economic advantage, and (2) a reasonable

photographs to a single New Jersey probability that the plaintiff would have

resident. This contact is in some ways received the anticipated economic benefits

more significant for jurisdictional purposes had there been no interference. See

than advertising in a regional trade Harp er-Lawrence, Inc. v. U nited

publication because it specifically targets Merchants & Mfrs., Inc., 619 A.2d 623,

a resident of the forum. And, here again, 630 (N.J. Super. Ct. App. Div. 1993).

plaintiff’s unfair competition and trade While the pre-contractual negotiations may

dress infringement claims arise directly out have provided appellees with names and

of the allegedly improper use of Miller contact information, there are no

Yacht’s photographs, plans and trade dress allegations that appellees solicited

in the sales brochure. As such, I agree business from or negotiated a business

with the majority that this contact gives relationship with the Chinese boat

rise to specific jurisdiction over Mariner manufacturers while in New Jersey. If

Yacht on the unfair competition and trade anything, it would appear that these

dress infringement claims. However, activities took place in China or from

because there is no allegation that appellees’ principle places of business

Bogachoff or Smith were involved in outside the forum. While the effect or

sending the sales brochure into New injury r e su l t in g f rom a ppe lle e s’

Jersey, there is no basis for imputing this interactions with these Chinese firms

contact to them. ultimately may have been felt by Miller

Yacht in New Jersey, I find no forum

C.

contacts which provide a basis for specific

The majority observes that the pre- jurisdiction on the tortious interference

contractual negotiations in New Jersey claim.

17

D. geography, time , or substance—as

evidence of the constitutionally required

Finally, in addition to appellees’

minimum contacts.” RAR, 107 F.3d at

discrete forum contacts, the majority

1277. Rather, specific jurisdiction will lie

suggests that appellees’ unrelated pre-

over a foreign defendant when the claim

misappropriation conduct in New Jersey

asserted “arises out of or relates to” the

provides a “nexus” between appellees and

foreign defendant’s contacts with the

the forum. For example, the majority

forum. Burger King, 461 U.S. at 472.

notes that appellees attended trade shows

Emphasizing contacts unrelated to the

in New Jersey “and in adjoining states,”

asserted causes of action blurs the

and advertised in magazines distributed in

fundamental distinction between specific

New Jersey. But there are no allegations

and general jurisdiction.

that this conduct relates to the claims

asserted. While stating these contacts are V.

not “essential to this litigation” and are

In sum, I would find that only Island

only “indirectly related to Millar Yacht’s

Ya c ht a nd Mariner Yacht have

trade dress and unfair competition claims,”

constitutionally sufficient “minimum

the majority concludes the “sum of these

contacts” with New Jersey to support

contacts shows that Appellees purposefully

specific jurisdiction as to plaintiff’s unfair

availed themselves of New Jersey.”

competition and trade dress infringement

A forum contact that might otherwise claims. I would not find specific

prove jurisdictionally insufficient under a jurisdiction over any of the appellees with

specific jurisdiction analysis may appear respect to the tortious interference with

more convincing when swaddled in the prospective economic advantage claim. I

more extensive, yet unrelated, forum would not end the jurisdictional inquiry

contacts of a foreign defendant. And the here, however.

contacts upon which the majority

Where a non-resident defendant’s

relies—attendance at trade shows,

contacts with the forum alone are

negotiating in the forum—may well go

insufficient to establish specific personal

toward establishing New Jersey’s general

jurisdiction, “we must consider whether

jurisdiction over appellees. But the parties

the application of Calder v. Jones, can

agree that appellees’ forum contacts are

change the outcome.” IMO Indus., 155

not so “continuous and systematic” to give

F.3d at 259-60 (citation omitted). In

rise to general jurisdiction. As such, I

Calder v. Jones, 465 U.S. 783 (1984), the

would not consider appellees’ pre-

Supreme Court set forth an “effects test”

misappropriation and unrelated forum

for determining personal jurisdiction over

contact as part of the specific jurisdiction

non-resident defendants who commit

analysis. “We cannot simply aggregate all

intentional torts with effects inside the

of a defendant’s contacts with a state—no

forum. “[U]nder Calder an intentional tort

matter how dissimilar in terms of

18

directed at the plaintiff and having the District Court to consider whether the

sufficient impact upon it in the forum may effects of appellees’ non-forum conduct

suffice to enhance otherwise insufficient give rise to specific jurisdiction under the

contacts with the forum such that the Calder framework.

‘minimum contacts’ prong of the Due

Process test is satisfied.” IMO Indus., 155

F.3d at 260.10 Because Miller Yacht’s

claims sound in tort, 11 I would remand for

10.

In IMO Industries, we held that to

establish jurisdiction under the “effects

test,” plaintiff must show: (1) defendant

committed an intentional tort; (2)

plaintiff felt the brunt of the harm in the

forum such that the forum can be said to

be the focal point of the harm suffered by

the plaintiff as a result of that tort; and

(3) defendant expressly aimed his

tortious conduct at the forum such that

the forum can be said to be the focal

point of the tortious activity. Id. at 265-

66. We recognized that this

“conservative reading of Calder may

significantly limit the types of business

tort cases that will satisfy the

requirements of personal jurisdiction,”

11.

but added that Calder did not “carve out (...continued)

a special intentional torts exception to the from the common law tort of unfair

traditional specific jurisdiction analysis, competition, and its language parallels

so that a plaintiff could always sue in his the protections afforded by state common

or her home state.” Id. law and statutory torts.”) (citation

omitted). Tortious interference with

11.

We have described “unfair prospective economic advantage

competition,” and causes of action under similarly sounds in tort, and other circuits

the Lanham Act as intentional business have recognized copyright infringement

torts. See Granite State Ins. Co. v. as an intentional tort. See, e.g., Bucklew

Aamco Transmissions, Inc., 57 F.3d 316, v. Hawkins, Ash, Baptie & Co., LLP, 329

321 (3d Cir. 1995) (“[T]he Lanham Act F.3d 923, 931 (7th Cir. 2003)

is derived generally and purposefully (“Copyright infringement . . . is an

(continued...) intentional tort.”).

19