United States District Court, W.D. North Carolina, Charlotte Division
J. Conrad, Jr. United States District Judge.
MATTER comes before the Court on Defendants'
Motion to Dismiss for Lack of Personal Jurisdiction, (Doc.
No. 9); Defendants' Brief in Support, (Doc. No. 9-1);
Plaintiff's Memorandum in Opposition, (Doc. No. 14);
Defendants' Reply, (Doc. No. 17); the Magistrate
Judge's Memorandum and Recommendation
(“M&R”), (Doc. No. 18); Plaintiff's
Objections, (Doc. No. 19); and Defendant's Reply, (Doc.
International, LLC, (“Plaintiff”) is a limited
liability company with its principal place of business in
Charlotte, North Carolina. (Doc. No. 1 at 2). Defendants
Firebird Restaurant Group, LLC (“FRG”) and
Firebird IP, LLC, (“FIP”) are limited liability
companies with their principal place of business in Dallas,
Texas. (Id.). According to the Complaint, Plaintiff
operates over 40 restaurants in various states across the
country. (Id. at 1). Plaintiff alleges that
Defendants also operate restaurants, but only in Texas and
Oklahoma. (Id.). In addition to physical locations,
Defendants also operate an online store that provides food
items shipped from their restaurants. (Id.). Because
the Court is reviewing a motion to dismiss for lack of
personal jurisdiction, it accepts the factual allegations of
Plaintiff's Complaint as true.
continues to expand across the nation, opening new
restaurants in different states and markets. To support its
mission, Plaintiff registered several trademarks including
FIREBIRDS, FIREBIRDS WOOD FIRE GRILL, FIREBIRDS FIREBAR,
FIREBIRDS for wine, FIREBIRDS , FIREBIRDS INNER CIRCLE, and
FB. (Id. at 4). In 2008, Plaintiff became aware
that FRG purchased El Fenix, another restaurant chain.
(Id. at 5). FRG was operating under a business trade
name at the time. Concerned that the use of the term
“firebird” within the FRG's name would result
in consumer confusion, Plaintiff sent a letter to FRG's
principal informing them of Plaintiff's rights to the
FIREBIRDS mark. (Id.).
2013, Defendant FIP filed an intent-to-use application with
the Trademark Office for “FIREBIRD RESTAURANT GROUP
” to use for “restaurant management services for
others.” (Id.) The trademark examining
attorney denied FIP's application, concluding that their
mark would result in consumer confusion when compared to
Plaintiff's registered marks. (Id. at 5-6). FIP
appealed the examining attorney's refusal of their
application and subsequently received approval from another
examining attorney on remand. (Id. at 6). Plaintiff
promptly responded by filing a Notice of Opposition with the
Trademark Trial and Appeal Board and, through discovery,
learned that Defendants were using the Firebird Restaurant
Group mark through their restaurant services on menus and
websites. (Id. at 6-7). Plaintiff cited instances of
actual confusion including four letters addressed to
Defendants' executives that were delivered to
Plaintiff's address and an email to Plaintiff from Adobe
Systems, Inc. requesting a meeting with Defendant.
(Id. at 7).
November 8, 2016, Plaintiff filed their complaint before this
Court against Defendants alleging trademark infringement
under the Lanham Act, 15 U.S.C. § 1051, et seq. as well
as state law claims for unfair and deceptive trade practices.
(Id. at 1). Defendants responded asserting that this
Court lacks personal jurisdiction because Defendants have not
sold products in North Carolina using the mark alleged by
Plaintiff, nor do they own property or maintain business or
bank accounts in North Carolina. (Doc. Nos. 9-1 at 5-7). In
response, Plaintiffs argue that personal jurisdiction is
proper in this District because Defendants maintain an
interactive website that sells food products and apparel to
“anywhere the website is accessible, including North
Carolina residents.” (Doc. No. 14 at 4). This website,
Plaintiff claims, “clearly identified the owner and
operator of the site as ‘Firebird, ' which it
defined on the site as FRG, El Fenix (identified as an
‘affiliated company' of FRG), and the ‘other
affiliated companies of [FRG]' (which would include
Firebird IP, LLC), collectively.” (Id. at 5).
Defendants respond, stating that El Fenix-a non-party
affiliated with FRG-maintained the website and holding
Defendants responsible would amount to an improper basis for
piercing the corporate veil. (Doc. No. 20 at 3). Furthermore,
Defendants argue that El Fenix's website “does not
focus on, or target residents of North Carolina.”
Magistrate Judge submitted an M&R recommending this Court
to grant Defendant's Motion to Dismiss and find no
evidence that Defendants “directed any activities
toward North Carolina other than for a period of time when a
subsidiary corporation offered food items through a website
displaying the name Firebird.” (Doc. No. 18 at 3). This
Court agrees with the M&R and thereby grants
Defendant's Motion to Dismiss for Lack of Personal
district court may assign dispositive pretrial matters,
including motions to dismiss, to a magistrate judge for
“proposed findings of fact and recommendations.”
28 U.S.C. § 636(b)(1)(A) and (B). The Federal Magistrate
Act provides that “a district court shall make a de
novo determination of those portions of the report or
specific proposed findings or recommendations to which
objection is made.” Id. at §
636(b)(1)(C); Fed.R.Civ.P. 72(b)(3); Camby v. Davis,
718 F.2d 198, 200 (4th Cir. 1983).
the court addresses the personal jurisdiction question by
reviewing only the parties' motion papers, affidavits
attached to the motion, supporting legal memoranda, and the
allegations in the complaint, a plaintiff need only make a
prima facie showing of personal jurisdiction to survive the
jurisdictional challenge.” Grayson v.
Anderson, 816 F.3d 262, 268 (4th Cir. 2016). In such
cases, the Court must construe all allegations and evidence
available relating to the issue of personal jurisdiction in
the light most favorable to the plaintiff. Id.
of the Federal Rule of Civil Procedure prescribes that state
law controls the extent to which a federal court may exercise
personal jurisdiction over a defendant. Fed.R.Civ.P.
4(k)(1)(A). Accordingly, North Carolina's Long Arm
Statute governs the reach of courts over out-of-state
defendants. N.C. Gen. Stat. Ann. § 1-75.4. However, the
Due Process Clause of the Fourteenth Amendment limits the
authority of a state in the application of its long-arm
statute. Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. 915, 923 (2011). Plaintiffs, therefore,
must navigate a two-step analysis, proving that exercising
personal jurisdiction over a defendant comports both with the
state long-arm statute as well as the requirements of due
process. English & Smith v. Metzger, 901 F.2d
36, 38 (4th Cir. 1990).
courts have held North Carolina's long-arm statute to
extend to the maximum boundaries allowed by the Due Process
Clause, the two-tiered analysis essentially folds into one:
“whether the defendant has such ‘minimal
contacts' with the forum state that ‘maintenance of
the suit does not offend traditional notions of fair play and
substantial justice.'” Christian Sci. Bd. of
Directors of First Church of Christ, Scientist v. Nolan,
259 F.3d 209, 215 (4th Cir. 2001) (quoting Int'l Shoe
Co. v. Washington, 326 U.S. 310, 316 (US 1945)). To
establish minimum contacts, a plaintiff has two options: they
may pursue either general or specific jurisdiction. ALS
Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d
707, 711-12 (4th Cir. 2002). Under specific jurisdiction, the
court exercises its power over a defendant when its contacts
within the state are the basis of the plaintiff's cause
of action. Id. In analyzing the contacts for
specific jurisdiction, courts “consider (1) the extent
to which the defendant ‘purposefully ...