Best Chairs Inc. v. Factory Direct Wholesale, LLC

121 F. Supp. 3d 828, 2015 WL 4641698, 2015 U.S. Dist. LEXIS 101597
CourtDistrict Court, S.D. Indiana
DecidedAugust 4, 2015
DocketNo. 3:14-cv-00067-RLY-WGH
StatusPublished
Cited by4 cases

This text of 121 F. Supp. 3d 828 (Best Chairs Inc. v. Factory Direct Wholesale, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Best Chairs Inc. v. Factory Direct Wholesale, LLC, 121 F. Supp. 3d 828, 2015 WL 4641698, 2015 U.S. Dist. LEXIS 101597 (S.D. Ind. 2015).

Opinion

ENTRY ON DEFENDANTS’ MOTION TO DISMISS AMENDED COMPLAINT and DEFENDANTS’ MOTION FOR HEARING

RICHARD L. YOUNG, Chief Judge.

Plaintiff, Best Chairs Incorporated, brings á seven-count Amended Complaint against the defendants herein, Factory Direct Wholesale, LLC, Eastern Enterprises, LLC, Pay Less Here, LLC, Hanping Liu, in both his individual and corporate capacities, Rowland Direct Wholesale, John and Jane Doe and unknown others, for trademark infringement and other related claims under federal and Indiana law. Factory Direct and the Newly-Added Defendants — Eastern Enterprises, Pay Less Here, and Liu — separately now move to dismiss the Amended Complaint for lack of personal jurisdiction, for failure to state a claim upon which relief can be granted, and for failure to bring suit within the applicable statute of limitations. Factory Direct and the Newly-Added Defendants’ (collectively “Defendants”) also move for a hearing on the motions to dismiss. The court, having read and reviewed the parties’ supporting and opposing briefs, the designated evidence, and the applicable law, now finds Factory Direct’s Motion to Dismiss should be DENIED, the Newly-Added Defendants’ Motion to Dismiss should be DENIED, and the Defendants’ Motion for Hearing should likewise be DENIED.

I. Motion for Hearing

Defendants move for an evidentiary hearing on their Motions to Dismiss because, they argue, “there are factual disputes regarding personal jurisdiction” and a hearing “would properly subject Plaintiff to a ‘preponderance of the evidence’ burden of proof to establish personal jurisdiction, instead of allowing it to resort to only a prima facie burden.” (Filing No. 121, Defendants’ Motion for Hearing). This motion is problematic for two reasons. First, Defendants fail to identify what material facts are in dispute. Second, the court does not set matters for hearing merely to subject the plaintiff to a higher [833]*833burden of proof. Defendants’ Motion for a Hearing is therefore DENIED.

II. Factual Background

The court accepts the following facts as true for purposes of the present motions to dismiss.

A. The Parties

Best Chairs is a furniture company headquartered in Ferdinand, Indiana. For over 50 years, B'CI has been doing business throughout the United States using a family of trademarks that incorporate the name “BEST.” These include BEST CHAIRS, INC. & Design, BEST HOME FURNISHINGS, THE POWER OF BEST, and' BEST-MAX (“BEST Trademarks”). (Filing No. 65, Am. Compl. ¶ 23).

Hanping Liu is the owner and Chief Executive Officer of Factory Direct and related entities, Eastern Enterprises, LLC and Pay Less Here, LLC. (Filing. No. 119-2, 30(b)(6) Deposition of Hanping Liu (“30(b)(6) Dep.”) at 10, 32). Factory Direct sells “BestChair,” “Best Chair,” and “BestOffice” chairs and other furniture products on its own websites (wwwiactory directwholesal¿.com and allpetstroller.com) and on various third-party interactive retail websites such as Amazon.com, .eBay, com, NewEgg.com, Rakuten.com, and Globalindustrial.com. (Id. at 15, 21-22). On such third-party retail sites, Factory Direct often sells its furniture products under the usernames or store names of Factory Direct, Eastern Enterprises, Cavalier Wholesale,1 Valuemassage, Best4Less, and Discounted Massage Wholesaler. (Id. .at 18-22, 32-33; Filing No. 119-3, Factory Direct’s Response to Interrogatory No. 16; Filing No. 119-4, Response to Request for Admission No. 13). Factory Direct has an account with each of these websites that enables it to manually identify itself and to manually input and describe the “Best-Chair” products it intends to sell there. (See, e.g., 30(b)(6) Dep. at 23). In addition, Factory Direct lists information regarding its company, shipping and return policies, and other terms and conditions. On New-Egg.com,, Factory Direct has a virtual storefront which contains all 65 “Best-Chair”- products sold by Factory Direct under the username “Best4Less.” (Filing No. 94-15, The “BestChair” Store at New-Egg.com).

All of the sales generated through “BestChair” online sales are funneled to Factory Direct for shipment to consumers. (30(b)(6) Dep. at 18, 20, 34). In addition, all of these entities, stores names, and usernames operate out of the same building — 2855 North Berkeley Lake Road, Duluth, Georgia — and each company employs the same 15 employees, including the same five customer service employees to respond to customer issues for BestChair products for all of Liu’s respective companies.. (Id. at 11,13,14, 57),

B. Sales of “BestChair” Products/Consumer Confusion

In 2012, Best Chairs was notified of a “BestChair” office chair listed on Amazon’s website sold by Cavalier Wholesale. (Filing No. 94-1, Declaration of Patrick Miller (“Miller Dee.”) ¶ 16). Best Chairs ordered a chair, which was delivered with no marking of “BestChair” on the packaging mate[834]*834rials when it was actually delivered. (Id.). The shipping label on the delivered product identified the seller as “Cavalier Wholesale, 2351 Button Gwinnett Drive, Suite 800, Doraville, GA 30340.” (Id.). Since the only use of “BestChair” was on Amazon’s website, Best Chairs filed a trademark complaint with Amazon on April 18, 2012. (Id.; Filing No. 94-2, 2012 Amazon Complaint). Amazon discontinued use of the designation “BestChair,” and Best Chairs considered the matter resolved. (Miller Dec. ¶ 16). At that time, Best Chairs was unaware of a connection between Cavalier Wholesale and -Factory Direct. (Am.Compl. ¶ 28);

On January 6, 2014, Best ’ Chairs received notification from the Better Business Bureau located in Evansville, Indiana, regarding a complaint against Best Chairs/ Best Home Furnishings by a consumer claiming he purchased a defective office chair through internet retailer Rakuten.com from Best Chairs. (Am. Compl. ¶ 59; Filing No. 94^, Better Business Bureau complaint). Best Chairs’ investigation into the matter revealed the product had been sold through Rakuten’s website and the “Marketplace Seller” was identified on the website as “BestChair.” (Am. Compl. ¶¶ 39, 59). Upon further investigation, Best Chairs determined the product was being sold by Factory Direct and similarly marketed on Amazon.com and eDealinfo.com. (Id. ¶¶ 39, 40-42, 59).

On January 16, 2014, Best Chairs , requested that Factory Direct cease and desist use of the “BestChair” designation. (Id. ¶ 63). Factory Direct responded that it could not find any evidence of .Best Chairs’ use of the mark and would take no steps to prevent consumer confusion. (Id. ¶ 64). Factory Direct then filed an application with the United States Patent and Trademark Office on March 26, 2014, declaring its intent to use “BestChair” as its own trademark. (Id. ¶¶ 43, 68; see also id., Ex. C).

Following the cease and desist letter, the evidence reflects that three'more instances of consumer confusion occurred. For example, in February, 2014, an Amazon.com customer ordered two chairs from Cavalier Wholesale that were defective. Both the customer and Amazon.com contacted Best Chairs’ representatives communicating their erroneous beliefs that Best Chairs was the manufacturer of Factory Direct’s “BestChair”. products. (See. Filing No. 95-1, Amazon.com communications with Factory Direct customer, at BCI-004155-4157; see also id.

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121 F. Supp. 3d 828, 2015 WL 4641698, 2015 U.S. Dist. LEXIS 101597, Counsel Stack Legal Research, https://law.counselstack.com/opinion/best-chairs-inc-v-factory-direct-wholesale-llc-insd-2015.