Traxxas, L.P. v. Skullduggery, Inc.

CourtDistrict Court, E.D. Texas
DecidedMarch 4, 2020
Docket2:19-cv-00213
StatusUnknown

This text of Traxxas, L.P. v. Skullduggery, Inc. (Traxxas, L.P. v. Skullduggery, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Traxxas, L.P. v. Skullduggery, Inc., (E.D. Tex. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

TRAXXAS, L.P., § § Plaintiff, § § v. § CIVIL ACTION NO. 2:19-CV-00213-JRG § SKULLDUGGERY, INC., § § FILED UNDER SEAL Defendant. § §

MEMORANDUM OPINION AND ORDER Before the Court is Defendant Skullduggery, Inc.’s (“Skullduggery”) Motion to Dismiss for Lack of Personal Jurisdiction or in the Alternative Motion to Dismiss on Basis of Forum Non Conveniens and Memorandum of Law in Support (the “Motion”). (Dkt. No. 15.) Having considered the Motion and subsequent briefing, the Court is of the opinion that the Motion should be and hereby is DENIED. I. BACKGROUND This action commenced on June 6, 2019 when Plaintiff Traxxas, L.P. (“Traxxas”) filed suit against Skullduggery for trademark infringement. (Dkt. No. 1.) Traxxas is a Texas limited partnership with its principal place of business in McKinney, Texas. (Id. ¶ 2.) Traxxas is in the business of producing and selling radio-controlled model vehicles and related accessories (“RC Cars”). (Id. ¶¶ 9–13.) Traxxas uses the registered trademark “TRAXXAS” to identify, advertise, and promote its RC Cars. (Id.) Additionally, Traxxas markets and sells its RC Cars under the trademarks “TRX,” “PROTRAX,” “LATRAX,” “T-MAXX,” “MAXX,” “E-MAXX,” “MINI MAXX,” “X-MAXX,” and “XMAXX” (together with TRAXXAS, the “Traxxas Marks”). (Dkt. No. 30 ¶¶ 14–48.) Traxxas asserts that Skullduggery infringes on the Traxxas Marks by selling RC Cars under the name “MAX TRAXXX” (the “Accused Products”). (Id. ¶ 51.) Skullduggery is a California corporation with its principal place of business in Anaheim, California. (Dkt. No. 1 ¶ 3.) Skullduggery makes more than a dozen different types of toys and

crafts. (Dkt. No. 15 at 7.) Most of these products are produced in China. However, some of the products are produced in California. (Id.) Skullduggery does not make any products in Texas, does not own or lease any property in Texas, and does not employ anyone residing in Texas. (Id.) Skullduggery sells its products through distribution agreements with national retailers, direct sales to independent specialty retailers, sales through third-party online platforms, and direct orders from Skullduggery’s website. (Dkt. No. 15-1 ¶¶ 6–8; Dkt. No. 35-4 at 88:1-14.) Skullduggery does ship its products to third-party distribution centers in Texas. (Dkt. No. 35-4 at 69:10–25.) On November 11, 2019, Skullduggery filed the Motion contending that this Court lacks personal jurisdiction over it. (Dkt. No. 15.) Alternatively, Skullduggery moved for dismissal based on the doctrine of forum non conveniens because this matter is “more appropriately venued in the

Central District of California.” (Id.) Following expedited discovery regarding the issue of personal jurisdiction, Traxxas responded in opposition to the Motion arguing that personal jurisdiction is proper under a stream of commerce theory and that dismissal pursuant to the doctrine of forum non conveniens would be procedurally improper. (Dkt. No. 35.) Accordingly, the two issues raised by the Motion are whether Skullduggery’s sales activities within Texas subject Skullduggery to this Court’s personal jurisdiction and whether dismissal pursuant to forum non conveniens is an appropriate basis for dismissal when Skullduggery argues for the convenience of another federal forum. II. LEGAL STANDARD A. Rule 12(b)(2)

Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss a claim if the court does not have personal jurisdiction over the defendant. Fed. R. Civ. P. 12(b)(2). It is the plaintiff’s burden to establish that personal jurisdiction exists, but the plaintiff only needs to present facts to make out a prima facie case supporting such jurisdiction. Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000). “The Court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.” Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). Additionally,

conflicts between the facts contained in the parties’ affidavits must be resolved in favor of the plaintiff for the purpose of determining whether a prima facie case for personal jurisdiction exists. Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990). There are two steps to determine whether a federal court may exercise personal jurisdiction over a nonresident defendant: (1) the forum state’s long-arm statute must confer personal jurisdiction over that defendant; and (2) the exercise of personal jurisdiction must comport with the Due Process Clause of the Fourteenth Amendment. McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009). “As the Texas long-arm statute extends as far as constitutional due process allows,” the Court only needs to consider the second step of the inquiry. Id.; Moncrief Oil Int’l Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007); see also Johnston v. Multidata Sys. Int’l Corp., 523

F.3d 602, 609 (5th Cir. 2008) (“Because the Texas long-arm statute extends to the limits of federal due process, the two-step inquiry collapses into one federal due process analysis.”). The due process analysis focuses on the number and nature of a defendant’s contacts with the forum to determine if the defendant has sufficient “minimum contacts” 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, 326 (1945). These contacts may give rise to specific or general jurisdiction. Daimler AG v. Bauman, et al., 571 U.S. 117, 138 (2014). General jurisdiction applies to a defendant in “instances in which the continuous corporate

operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 917 (2011) (quoting Int’l Shoe, 326 U.S. at 318); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, n.4, 104 S. Ct. 1868 (1984). Thus, general jurisdiction applies in “only a limited set of affiliations with a forum [that] will render a defendant amenable to all-purpose jurisdiction there.” Daimler, 571 U.S. at 137. The Fifth Circuit has also stated that it is “incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation or principal place of business” of a defendant. Monkton Ins. Services, Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir. 2014). Specific jurisdiction is a claim-specific inquiry—meaning that the factual basis for the

plaintiff’s claim must arise out of or relate to the defendant’s substantial contacts with the forum. Asashi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 109 (1987).

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Traxxas, L.P. v. Skullduggery, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/traxxas-lp-v-skullduggery-inc-txed-2020.