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Miller Yacht Sales v. Smith Precedential or Non-Precedential: Precedential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 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004

Recommended Citation "Miller Yacht Sales v. Smith" (2004). 2004 Decisions. Paper 277. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/277

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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...)

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”).

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.

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.

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

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.

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

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...)

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).

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.

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.

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

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

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.

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

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.

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

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.”).