United States District Court, W.D. Virginia, Charlottesville Division
GLEN E. CONRAD SENIOR UNITED STATES DISTRICT JUDGE.
Rest, Inc. ("Savvy Rest") filed this action against
Sleeping Organic, LLC ("Sleeping Organic"),
asserting claims of trademark infringement, unfair
competition, and false advertising under the Lanham Act, and
related claims of trademark infringement and unfair
competition under Virginia law. Sleeping Organic has moved to
dismiss the case for lack of personal jurisdiction and
improper venue or, in the alternative, to transfer the case
to the District of South Carolina. The motion has been fully
briefed and is ripe for review. For the reasons set forth below,
the defendant's motion will be denied.
Rest is a Virginia corporation based in Charlottesville,
Virginia. Compl. ¶ 1, Dkt. No. 1. The company has been
selling organic mattresses in Virginia for more than a
decade. Id. ¶ 8. Savvy Rest maintains retail
locations in Charlottesville and Vienna, Virginia; Rockville,
Maryland; and Berkley, California. Id. ¶ 9.
Plaintiff also sells and distributes mattresses through
independent dealers across the country. Id.
¶10- Savvy Rest's mattresses have been certified to
meet the requirements of the Global Organic Textile Standard
("GOTS"), which has been endorsed by the United
States Department of Agriculture. Id. ¶¶
14-15. Consequently, Savvy Rest's mattresses may be
labeled or sold as organic in the United States. Id.
2009, the plaintiff obtained a certificate of registration
from the United States Patent and Trademark Office for the
"SAVVY REST" mark. Id., ¶¶ 18-19. The
mark covers "retail store and on-line retail store
services featuring sleep products, namely, mattresses, spring
mattresses, box springs, crib mattresses, adjustable beds,
mattress pads, mattress foundations and pillows." Id.,
¶ 18 (internal quotation marks omitted). Savvy Rest uses
the mark "as its trade name/service mark and a
trademark/brand for its mattresses." Id., ¶ 23.
Rest has been competing with defendant Sleeping Organic for
more than 10 years. John Smith Dec. ¶ 16, Dkt. No. 10-2.
Sleeping Organic is a limited liability company organized in
South Carolina, which is owned and operated by Chris Mullins
and Brandon Maxey. Id. ¶ 2; Mullins Aff. ¶
3, Dkt. No. 9-1. Sleeping Organic's principal place of
business is in Mount Pleasant, South Carolina, where the
defendant operates its only brick-and-mortar retail location.
Mullins Aff. ¶¶ 2, 4. Sleeping Organic also
maintains an online retail store at
www.sleepingorganic.com, through which customers can
order mattresses and other bedding products. Compl. ¶
24; see also Mullins Aff. ¶ 4 (acknowledging
that Sleeping Organic sells mattresses "online through
orders placed by customers on a website located at the URL
instant action, Savvy Rest claims that Sleeping Organic's
website falsely advertises that the defendant's bedding
products are "chemical free" and
"organic." Compl. ¶¶ 27, 28, 30. Savvy
Rest likewise alleges, on information and belief, that
Sleeping Organic's mattresses are "not GOTS
certified" and that the defendant's website
nonetheless "display[s] the GOTS certification trademark
prominently superimposed over [its] mattress offerings
providing the impression that [an] advertised mattress is a
GOTS certified mattress." Id., Savvy Rest alleges that
such advertising "is intended to deceive consumers into
thinking that the mattress itself is certified organic
[pursuant] to the GOTS .,. certification standards and that
the entire mattress is completely free from chemicals."
Id. ¶ 32. Savvy Rest further alleges that the
false or misleading statements regarding the nature,
characteristics, qualities, and accreditation of the
defendant's mattresses are part of "an effort to
divert business and sales away from plaintiff."
Rest also claims that Sleeping Organic has used the SAVVY
REST mark in online advertising through Google AdWords in an
effort to divert sales from the plaintiff. Id.
¶¶ 33-35, 40. In January of 2017, Savvy Rest
contacted Sleeping Organic regarding its use of the SAVVY
REST mark in online advertising. A representative of Sleeping
Organic indicated that "the advertising would be
changed" and "that this activity would not happen
again." Id. ¶ 42. However, in March of
2018, Sleeping Organic "set into motion new and revised
efforts to use Plaintiffs trademark in advertising,"
including by "using the mark SAVVY REST in one or
multiple Google AdWords paid advertisement(s) and .,. in the
title of [Sleeping Organic's] sponsored advertisement(s)
on Google." Id. ¶ 45.
Rest filed the instant action against Sleeping Organic on
April 13, 2018. Savvy Rest's original complaint contains
the following claims: trademark infringement under the Lanham
Act (Count I); unfair competition under the Lanham Act (Count
II); false advertising in violation of the Lanham Act (Count
III); and trademark infringement and unfair competition under
Virginia law (Count IV).
7, 2018, Sleeping Organic moved to dismiss the case for lack
of personal jurisdiction and improper venue or, in the
alternative, to transfer the case to the District of South
Carolina. Sleeping Organic submitted an affidavit from Chris
Mullins in support of the motion. According to the affidavit,
Sleeping Organic does not operate any retail locations in
Virginia or own or rent any property in Virginia. Mullins
Aff. ¶ 5. Nor does the defendant have any employees in
Virginia. Id. The affidavit also indicates that the
defendant's advertising through Google AdWords included
"no parameters .,. set to intentionally direct
advertising to consumers in Virginia over any other
consumers," and that the defendant "does no other
type of advertising, such as printed ads in periodicals or
newspapers, directed specifically at residents of the
Commonwealth of Virginia." Id. ¶ 7, 9. The
affidavit further alleges, based on "data collected by
Google," that "Sleeping Organic did not sell any
products to consumers in Virginia through the Google AdWord
ad illustrated in [the complaint]." Id. ¶
Rest submitted a number of exhibits in response to the
pending motion, including a printout from the defendant's
website, which describes Sleeping Organic as "a
direct-to-consumer online retailer with thousands of happy
customers across the United States." Smith Decl. Ex. D;
Dkt. No. 10-2. Savvy Rest also submitted exhibits indicating
that Sleeping Organic has sold products to customers in
August 2, 2018, the court held a hearing on the
defendant's motion via conference call. Following the
hearing, the court took the motion under advisement and
permitted the plaintiff to engage in limited jurisdictional
response to requests for admission propounded by the
plaintiff, Sleeping Organic admitted that it accepts orders
for mattresses from Virginia residents, that it ships
mattresses to Virginia residents after the orders are placed,
and that such orders are made using the defendant's
online webstore. Resp. to Req. for Admis., Dkt. No. 23-1.
Sleeping Organic also admitted that it has sold more than 50
mattresses to Virginia residents through its online web store
in the past five years and that its gross sales to Virginia
residents have totaled in excess of $100, 000. Id.
Sleeping Organic objected to, and did not answer, over 20
additional requests for admission.
response to interrogatories, Sleeping Organic indicated that
its gross sales to Virginia residents have totaled more than
$219, 000.00 since 2012. Resp. to Interrog., Dkt. No. 23-1. A
significant portion of the defendant's sales to Virginia
customers have occurred in the past two years. Id.
Between January 1, 2017 and September 4, 2018, Sleeping
Organic sold 39 mattresses to customers in Virginia.
the completion of the limited jurisdictional discovery, the
parties filed supplemental briefs on the outstanding issues.
The matter is now ripe for review.
Organic has moved to dismiss the case for lack of personal
jurisdiction and improper venue under Rule 12(b)(2) and (3)
of the Federal Rules of Civil Procedure. In the alternative,
Sleeping Organic has requested that the court transfer the
case to the District of South Carolina, pursuant to 28 U.S.C.
§ 1404(a). The court will address each argument in turn.