United States District Court, E.D. Virginia, Alexandria Division
Ellis, III United Stales District Judge
matter came before the Court on defendants' joint motion
to dismiss plaintiffs amended complaint for (i) lack of
personal jurisdiction under Rule 12(b)(2), Fed. R. Civ. P.,
(ii) failure to state a claim under Rule 12(b)(6), Fed. R.
Civ. P., and (iii) misjoinder under Rule 20, Fed.R.Civ.P.
(Doc. 41). The matter was fully briefed, argued on January
13, 2017, and taken under advisement. Accordingly,
defendants' motion is now ripe for disposition.
facts pertinent to defendants' motion to dismiss are
derived from the amended complaint, exhibits attached to the
amended complaint, and the affidavits defendants submitted to
challenge the existence of personal
Thousand Oaks is a Virginia limited liability company with
its principal place of business in Manassas, Virginia.
Defendant Deep South Barrels LLC is a Texas limited liability
company located in Pearland, Texas. Defendant Jonathan Emmons
is a former owner of Deep South Barrels and was Deep South
Barrels' former Managing Partner and Vice President
("VP") of Business Solutions. Defendant Elissa
Emmons is a former owner of Deep South Barrels and was Deep
South Barrels' former Managing Partner and VP of Business
Operations. Defendant Randall Bentley is the current owner of
Deep South Barrels. Bentley, together with Jonathan and
Elissa Emmons, founded Deep South Barrels in June 2010.
Defendant Wood Harbour is a sole proprietorship organized
under Texas law and located in Texas. Defendant Mark Carboni
is the founder and owner of Wood Harbour.
Weisberg founded plaintiffs predecessor-in-interest in 1999,
and in 2003 plaintiff began manufacturing and selling
miniaturized bourbon barrels that allow individuals to age
and flavor their own liquor. Plaintiff has also created a
"barrel mug" product, which is essentially a wooden
beer mug that looks like a small barrel. In 2003, plaintiff
created an e-commerce website to advertise and sell its
products. Plaintiff also began setting up vendor booths in
outdoor festivals to sell its products, and plaintiff became
a wholesale supplier of its barrels to retail outlets. In
2008, plaintiff purchased a laser engraving machine so that
plaintiff could create personalized barrels for customers by
burning graphics or customers' names on the end of the
barrel. Plaintiff created a catalog of images customers could
choose to engrave on the barrels they purchased from
plaintiff. Plaintiff alleges that its barrel products have
been a significant commercial success, as plaintiff has sold
hundreds of thousands of barrels through its website and
various retail outlets.
has submitted for copyright registration (i) the graphic
designs for the barrels, (ii) the website pages, (iii) the
product catalogs, and (iv) various product labels. Plaintiff
also alleges that it has acquired common law trademark rights
in the marks for four of its products: (1) the "Bootleg
Kit" mark, which identifies a product launched in 2006
that allows customers to flavor their spirits in a miniature
barrel, (2) the "Cigar Infusion Barrel" mark, which
plaintiff began using in 2007 to identify a product line of
oak barrels designed to store and flavor cigars, (3) the
"Wedding Barrel" mark, which plaintiff began using
in 2011 to identify a miniature oak barrel designed to hold
wedding cards and other wedding gifts, and (4) the "Top
Shelf Taste at a Bottom Barrel Price" mark, which
plaintiff began using in 2006 as a tagline for its Bootleg
Kit product. Plaintiff has also submitted the Bootleg Kit,
Cigar Infusion Barrel, and Wedding Barrel marks for
registration with the United States Patent and Trademark
Office ("PTO"), and the trademark applications are
currently pending with the PTO.
alleges that Deep South Barrels copied plaintiffs engraving
designs, trademarks, and product lines and thereby unlawfully
traded off plaintiff s goodwill and reputation. In
particular, plaintiff alleges that Deep South Barrels has
used the phrases "Bootleg Box, " "Bootleg Kit,
" "Cigar Infusion Barrel, " "Wedding
Barrel, " and "Top Shelf Liquor at Bottom Shelf
Prices" to identify Deep South Barrels products that are
similar to plaintiffs products. Plaintiff alleges that Deep
South Barrels has sold infringing Deep South Barrels products
throughout the United States, including Virginia, through
Deep South Barrels' interactive e-commerce website, and
that Virginia residents have purchased Deep South
Barrels' products from its website. Finally, plaintiff
alleges that Bentley, a former employee of plaintiff, had
access to plaintiffs confidential business information
database, and that Bentley misappropriated that information
for the purpose of establishing and operating Deep South
respect to plaintiffs claims against defendants Wood Harbour
and Mark Carboni, plaintiff also alleges that Carboni and
Wood Harbour have infringed on plaintiffs copyrights and
trademarks. Plaintiff further alleges that Wood Harbour and
plaintiff reached an oral agreement in 2008 to allow Wood
Harbour to sell plaintiffs products at Wood Harbour's
retail stores and festival sites in Texas, but as part of
that oral agreement Wood Harbour could not sell any products
from plaintiffs competitors. Plaintiff alleges that Wood
Harbour breached that agreement in 2011 by selling Deep South
initial complaint in this case, filed in August 2016,
consisted of 294 pages, 1134 numbered paragraphs, and
hundreds of pages of exhibits. Because that complaint was
inappropriately prolix, it was dismissed sua sponte
without prejudice for failure to comply with Rule 8, Fed. R.
Civ. P. See Thousand Oaks Barrel Co., LLC v.
Deep South Barrels LLC, No. 1:16-cv-1035 (E.D. Va. Aug.
30, 2016) (Order). Plaintiff was given leave to file an
amended complaint, which it did. Plaintiffs amended complaint
is 107 pages, which is still too long, but plaintiff was not
required to file another complaint.
brings eight claims against defendants Deep South Barrels,
Jonathon Emmons, Elissa Emmons, and Bentley in its amended
complaint: (1) federal copyright infringement under 17 U.S.C.
§ 501 against Deep South Barrels, (2) contributory and
vicarious copyright infringement under 17 U.S.C. § 501
against Jonathan Emmons, Elissa Emmons, and Bentley, (3)
federal trademark infringement under 15 U.S.C. §
1125(a)(1)(A) against Deep South Barrels, (4) contributory
and vicarious trademark infringement under 15 U.S.C. §
1125(a)(1)(A) against Jonathan Emmons, Elissa Emmons, and
Bentley, (5) common law trademark infringement under Virginia
law against Deep South Barrels, (6) unfair competition under
Virginia law against Deep South Barrels, (7) a violation of
the Virginia Uniform Trade Secrets Act ("VUTSA")
against Deep South Barrels, and (8) common law
misappropriation under Virginia law against Deep South
Barrels. Plaintiff seeks damages and injunctive relief
against Deep South Barrels, Jonathan Emmons, Elissa Emmons,
brings seven claims against defendants Wood Harbour and Mark
Carboni, which are numbered from 9-15 in accordance with
plaintiffs amended complaint: (9) federal copyright
infringement under 17 U.S.C. § 501 against Wood Harbour,
(10) contributory and vicarious copyright infringement under
17 U.S.C. § 501 against Carboni, (11) federal trademark
infringement under 15 U.S.C. § 1125(a) against Wood
Harbour, (12) contributory and vicarious trademark
infringement under 15 U.S.C. § 1125(a) against Carboni,
(13) common law trademark infringement under Virginia law
against Wood Harbour, (14) unfair competition under Virginia
law against Wood Harbour, and (15) breach of contract against
Wood Harbour. Plaintiff also seeks damages and injunctive
relief against Wood Harbour and Carboni.
have filed a joint motion to dismiss all of plaintiff s
claims for lack of personal jurisdiction under Rule 12(b)(2),
Fed.R.Civ.P. Additionally, defendants also move to dismiss
Wood Harbour and Carboni for misjoinder under Rule 20, Fed.
R. Civ. P., and move to dismiss most of plaintiff s claims
against all defendants for failure to state plausible claims
for relief under Rule 12(b)(6), Fed. R. Civ. P.
defendants' motion to dismiss for lack of personal
jurisdiction, if granted, eliminates the need to address any
other issues, the first question is whether personal
jurisdiction exists over any defendants. Under Rule 12(b)(2),
Fed. R. Civ. P., "a defendant must affirmatively raise a
personal jurisdiction challenge, but the plaintiff bears the
burden of demonstrating personal jurisdiction at every stage
following such a challenge." Grayson v.
Anderson, 816 F.3d 262, 267 (4th Cir. 2016).
Specifically, plaintiff must ultimately prove the existence
of personal jurisdiction by a preponderance of the evidence,
but when "a district court decides a pretrial personal
jurisdiction motion without conducting an evidentiary
hearing, the plaintiff need only make a prima facie showing
of personal jurisdiction." Carefirst of Md, Inc. v.
Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th
can exercise personal jurisdiction over a defendant only if
"(1) such jurisdiction is authorized by the long-arm
statute of the state in which the district court sits; and
(2) application of the relevant long-arm statute is
consistent with the Due Process Clause." Id.
Put differently, the long-arm statute must reach
defendant's conduct, and that reach must not exceed the
statute's constitutional grasp. Rannoch, Inc. v.
Rannoch Corp., 52 F.Supp. 2d. 681, 684 (E.D. Va. 1999).
long-arm statute provides for the exercise of personal
jurisdiction where a defendant "transact[s] any
business" in Virginia. Va. Code § 8.01-328.1(A).
When personal jurisdiction "is based solely upon [the
long-arm statute], only a cause of action arising from acts
enumerated in [this statute] may be asserted" against
the defendant. Id. § 8.01-328.1(C). The Fourth
Circuit has explained that Virginia's long-arm statute
"extends the jurisdiction of its courts as far as
federal due process permits." ePlus Tech., Inc. v.
Aboud, 313 F.3d 166, 176 (4th Cir. 2002). Accordingly,
the "statutory inquiry necessarily merges with the
constitutional inquiry, and the two inquiries essentially
become one." Id. (internal quotation marks
omitted); see also Consulting Eng'rs Corp. v.
Geometric Ltd., 561 F.3d 273, 276-77 (4th Cir. 2009).
Process Clause requires a nonresident defendant to have
"certain minimum contacts with [the forum state] such
that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice."
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (internal quotation marks omitted). Plaintiff can
satisfy the "minimum contacts" requirement by
showing that specific jurisdiction exists over defendants,
which requires plaintiff to show that the
"defendant's qualifying contacts with the forum
state also constitute the basis for the suit."
Universal Leather, 773 F.3d at 559. Whether a
nonresident defendant's contacts with the forum state
sufficiently qualify for specific jurisdiction depends on the
"extent to which the defendant purposefully availed
itself of the privilege of conducting activities in the forum
state, " whether plaintiffs claims arise out of
defendant's forum activities, and "whether the
exercise of personal jurisdiction is constitutionally
reasonable." Id. (internal quotation marks
contend that they lack the requisite contacts with Virginia
to permit specific jurisdiction. In particular, defendants
argue (i) that Deep South Barrels' sales of its products
into Virginia via its e-commerce website are insufficient to
establish specific jurisdiction, (ii) that personal
jurisdiction is improper over defendants Bentley, Jonathan
Emmons, and Elissa Emmons based solely on their status as
corporate officers of Deep South Barrels, and (iii) that Wood
Harbour and Carboni do not have sufficient contacts with
first issue is whether personal jurisdiction exists over Deep
South Barrels based on its e-commerce sales in Virginia. Deep
South Barrels is a non-resident LLC headquartered in Texas.
Plaintiff alleges in its amended complaint that Deep South
(i) sells barrels throughout the United States, including
(ii) has an interactive e-commerce website which allows
customers to select products, order them, and have them
shipped to the customer, and
(iii) maintains an ongoing relationship with customers by
requiring them to register with the website.
addition to those allegations, Deep South Barrels'
affidavit establishes that Deep South Barrels has no offices
in Virginia, owns no property in the state, does not employ
anyone in Virginia, and has never attended or marketed its
products at any festivals in Virginia. As a result, Deep
South Barrels' sole contacts with Virginia are its sales
to Virginia customers via Deep South Barrels' website:
Deep South Barrels has had 251 customers in Virginia since
the company's founding in 2010, and since 2013 its
Virginia customers account for 1.21% of its total number of
customers. Deep South Barrels has also made 99 shipments to
Virginia, which is 1.17% of the company's total number of
argue that these e-commerce contacts are insufficient to
confer specific jurisdiction over Deep South Barrels, given
the small percentage of Internet sales to Virginia residents
and the lack of any ads or marketing targeted at Virginia.
Defendants further argue that these facts suggest that Deep
South Barrels' contacts with Virginia resulted from
happenstance. Defendants' arguments are unpersuasive.
ALS Scan, Inc. v. Digital Service Consultants, Inc.,293 F.3d 707, 713 (4th Cir. 2002), the Fourth Circuit
established a test for determining whether specific
jurisdiction exists over a nonresident defendant based on the
defendant's Internet contacts with the forum. There, the
Fourth Circuit adopted the "sliding scale" model
established in Zippo Manufacturing Co. v. Zippo Dot Com,
Inc., which looks to the nature and quality of
defendant's Internet activity to determine whether
personal jurisdiction exists. At one end of the scale or
continuum "are situations where a defendant clearly does
business over the Internet. If the defendant enters into
contracts with residents of a foreign jurisdiction that
involve the knowing and repeated transmission of computer
files over the Internet, personal jurisdiction is
proper." Id. (quoting Zippo, 952
F.Supp. at 1124). At the other end of the scale or continuum
are passive websites that simply put information on the
Internet that forum users can access, and thus are typically
not a basis for exercising personal jurisdiction.
Id. The Fourth Circuit has adopted and adapted that
sliding scale approach, and as a result a state can exercise
personal jurisdiction over a nonresident defendant when ...