United States District Court, D. Connecticut
RULING ON DEFENDANTS' MOTION TO DISMISS
Bond Arterton, U.S.D.J.
Confectionery Arts International, LLC ("CAI") filed
this action against Defendants CKP Products LLC
("CKP") and Central Investment LLC ("CI")
on December 9, 2016 alleging trademark infringement in
violation of Section 32 of the Lanham Act, 15 U.S.C. §
1114(a) (Count One), unfair competition, false designation of
origin and false or misleading representation of fact in
violation of Section 43(a) of the Lanham Act, 15 U.S.C.
§ 1125(a) (Count Two), unfair competition and
misappropriation in violation of Connecticut common law
(Count Three) and unfair competition and trade practices
under the Connecticut Unfair Trade Practices Act, Conn. Gen.
Stat. § 42-110a (Count Four). Defendants now move to
dismiss the Amended Complaint pursuant to Fed.R.Civ.P.
12(b)(2) for lack of personal jurisdiction over both CKP and
CI and Fed.R.Civ.P. 12(b)(3) because this Court is not an
appropriate venue for Plaintiffs lawsuit under 28 U.S.C.
§ 1391. (Def.'s Mem. Supp. Mot. to Dismiss
("Def.'s Mot. to Dismiss") [Doc. # 28] at 1.)
For the reasons that follow, Defendants' Motion is
granted insofar as it seeks dismissal of CI, but denied in
all other respects.
Facts Alleged and Jurisdictional Facts
a registered Connecticut limited liability company, is a
private label manufacturer and wholesaler specializing in the
manufacture of a broad spectrum of food products for the
retail, food service and industrial markets, which includes
the cake and confectionery decorating industry in the state
of Connecticut. (Czerczak Aff. [Doc. # 32] ¶ 2.)
Plaintiff has been using the trademark DISCO DUST* for a
product line of decorative food glitter since 1999. (Am.
Compl. ¶ 29; Czerczak Aff. ¶ 4; Ex. A (Trademark
Registration) to Def.'s Mot. to Dismiss [Doc. #33-1].) On
January 24, 2012, Plaintiff officially registered its DISCO
DUST® with the United States Patent and Trademark Office,
obtaining Reg. No. 4, 089, 733. (Am. Compl. ¶ 30; Ex. A
to Def.'s Mot. to Dismiss.)
CI is a
privately-held, Cincinnati-based limited liability company
that manages a portfolio of investments, including directing
private equity investments, for the business of its members.
(See Ex. 1 (Martin Decl.) to Def.'s Mot. to
Dismiss [Doc. # 29] ¶ 3.) CI maintains an office in
Cincinnati, Ohio and has no offices, corporate assets, or
employees in Connecticut. (Id. ¶ 5). CKP is a
manufacturer and wholesale distributor in the candy making,
cake decorating, and commercial baking industries.
(Id. ¶ 8). CKP maintains an office, production,
and distribution facility in Fort Wayne, Indiana.
(Id. ¶ 9). CKP has no offices, corporate
assets, or employees in Connecticut. (Id. ¶
wholesale distributor, CKP does not directly deal with any
end customer and sells to resellers that, prior to purchasing
any CKP products, must demonstrate that they are businesses.
(Id. ¶ ¶ 33-35). Typically, the businesses
that purchase products from CKP resell them to individual
customers or use the products as part of a larger bakery
process. (Id. ¶ 37). However, CKP does not
control the advertising or sales activity of any of its
reseller customers. (Id. ¶¶ 37, 41). CKP
does not track the resale of its products by any resellers,
including those on e-commerce sites like Amazon and eBay.
(Id. ¶ 37).
maintains a website that allows a user to locate a potential
retail reseller of its product. (Martin Decl. ¶ 38).
However, this search function does not identify whether a
given retailer carries any particular item, let alone the
disco dust product at issue in this lawsuit. (Id.).
CKP does not track any sales from those retail resellers and
does not have its own storefronts. (Id. ¶ 37).
Once a customer registers with CKP, orders can be placed in
one of three ways. First, the customer can fax an order
request to CKP's office in Indiana. (Id. ¶
36a). Second, the customer can call the Indiana office and
speak to a sales representative directly. (Id.
¶ 36b). Finally, the customer can place an order through
CKP's website. (Id. ¶ 36c). CKP manages its
website in Indiana and, to the extent that orders are
received through its website, CKP processes those orders at
the Indiana office. (Id. ¶ 30).
2005, Defendant CKP was acquired by Defendant CI, an Ohio
limited liability company. (Am. Compl. ¶
At that point, while maintaining its facility in Indiana,
Defendant CKP also became an Ohio limited liability company
(Id. ¶ 4). CKP and CI are separate and distinct
limited liability companies. (Martin Decl. ¶ 14). While
CI owns equity in CKP, CKP has its own, separate employees
that manage CKP's business. (Id. ¶ 15).
Although CKP's General Manager reports to management at
CI periodically, CI is not involved, in anyway, with the
day-to-day manufacturing and sale processes of CKP.
(Id. ¶ 16).
has had a business relationship with Defendant CKP, also a
wholesaler in the cake and baked goods decorating industry,
and its predecessor company, Country Kitchen, since
Plaintiffs first year of operation, 1999. (Czerczak Aff.
¶ 7; Am. Compl. ¶¶ 25, 34.) Defendant CKP,
from both its Indiana address and its Georgia address,
regularly purchased products from Plaintiff, including Tylose
powder and gum paste. (Czerczak Aff. ¶¶ 7, 8.)
Defendant CKP regularly resold these products to retailers,
using Plaintiffs original labeling, indicating Plaintiff as
the source. (Czerczak Aff. ¶¶ 8, 9.)
Defendant CKP regularly paid for its purchases from Plaintiff
with a CKP company check, labeled with Defendant CI's
Ohio business address. (Czerczak Aff. ¶
2015, Defendant CKP received a trademark cease and desist
letter from a German corporation, SE Tylose GmbH & Co. KG
about Tylose Powder. (Martin Decl. ¶ 20.) At
that point, Plaintiff was contacted by Patrick Kenney, whose
email signature identified himself as the "Purchasing
Manager" for CI. (Czerczak Aff. ¶¶
15, 17-21; Ex. B (Email Exchange) to PL's Opp'n [Doc.
# 33-2]; Martin Aff. ¶¶ 20-27.).
September 2016 Plaintiff discovered that Defendant CKP was
selling its own brand of decorative glitter under the name
Disco Dust. (Am. Compl., ¶¶ 38-45;
Czerczak Aff., ¶ 23; Ex. C (Photo of Disco Dust
Product) to PL's Opp'n [Doc. # 33-3].) On September
14, 2016, Plaintiff sent a letter to the General Manager of
Defendant CKP at its Indiana address informing it of its
infringement of Plaintiffs DISCO DUST9 trademark with a copy
of the federal registration certificate. (Am. Compl., ¶
47.) Having received no response, Plaintiff sent a second
letter on October 19, 2016. (Id. ¶ 48.)
October 25, 2016, Defendant CKP announced on its website,
www.ckproducts.com, that "Disco Dust* has a new name!
Disco Glitter is the same product - now with a new
name!" and noting that "Disco Dust9 is a registered
trademark of Confectionary Arts, Inc. [sic]."
(Id. ¶ 51; Ex. D to PL's Opp'n [Doc. #
33-4].) Defendant CKP labeled its decorative glitter product
with "Disco Glitter/ (comparable to Disco Dust*)/ For
Decorative arts & crafts/Disco Dust® is a registered
trademark/ of Confectionary Arts, Inc./
www.CKproducts.com." (Ex. E to PL's Opp'n [Doc.
#33-5].) In November of 2016, Patrick Kenney of CI contacted
Plaintiff by telephone with notification that Defendant
CPK's Disco Dust product name had been changed to Disco
Glitter. (Czerczak Aff. ¶¶ 28, 29; Am. Compl.,
¶¶ 53-54.) In response to Plaintiffs assertion that
Disco Glitter was still "too similar to Disco Dust,
" Mr. Kenny responded that "[w]e respectfully
disagree that the name is too similar to Disco Dust."
(Am. Compl. ¶ 55.)
2016, decorative disco dust product sales in Connecticut by
CKP- including any sale of DISCO GLITTER - amounted to only
0.6% of the total disco dust product sales nationwide.
(Martin Decl. ¶ 43). As of March 31, 2017,
CKPS's DISCO GLITTER disco dust product line sales in
Connecticut accounted for 1% of total product's sales to
CKP's direct customers. (Id. ¶ 44). Over
the past three years and first three months of 2017,
CKP's total revenue from sales of all products into
Connecticut is less than 2.5% of total revenue nationwide.
(Id. ¶ 45).
a Rule 12(b)(2) motion to dismiss for lack of personal
jurisdiction, the plaintiff bears the burden of showing that
the court has jurisdiction over the defendant.'"
Quinn v. Fishkin, 117 F.Supp.3d 134, 138 (D. Conn.
2015) (quoting Metro. Life Ins. Co. v. Robertson-Ceco
Corp., 84F.3d 560, 566-67 (2d Cir. 1996)). In order to
survive such a motion, the "plaintiff must make a prima
facie showing that jurisdiction exists." Licci ex
rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161,
167 (2d Cir. 2013) (internal quotation marks omitted).
"In evaluating whether the requisite showing has been
made, [courts] construe the pleadings and any supporting
materials in the light most favorable to the
determine personal jurisdiction over a non-domiciliary in a
case involving a federal question, the Court must engage in a
two-step analysis." Chloe v. Queen Bee of Beverly
Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010). First, the
Court applies "the forum state's long-arm
statute." Id. "If the long-arm statute
permits personal jurisdiction, the second step is to analyze
whether personal jurisdiction comports with the Due Process
Clause of the United States Constitution." Id.
Connecticut Long-Arm Statute
long-arm statute applicable to non-resident individuals,
Section 52-59(b), has also been held to apply to non-resident
LLCs. See Austen v. Catterton Partners V, LP, 729
F.Supp.2d 548, 559 (D. Conn. 2010); see also Matthews v.
SBA, Inc., 149 Conn.App. 513, 544- 52, 555-61 (2014).
Plaintiff argues the Court has personal jurisdiction over
Defendants under the long-arm statute under subsections (1)
and (3) of Section 52-59b of the Connecticut General
Statutes, which provide that:
[A] court may exercise personal jurisdiction over any
nonresident individual, . . . who in person or through an
agent: (1) Transacts any business within the state ... [or]
(3) commits a tortious act outside the state causing injury
to person or property within the state ... if such person or
agent (A) regularly does or solicits business, or engages in
any other persistent course of conduct, or derives
substantial revenue from goods used or consumed or services
rendered, in the state, or (B) expects or should reasonably
expect the act to have consequences in the state and derives
substantial revenue from interstate or international
Conn. Gen. Stat. § 52-59b.
Transacting Business Within the State Under §
§ 52-59b (a)(1), a court possesses personal jurisdiction
over a nonresident individual with respect to a cause of
action arising from any business transacted in this state by
that individual." Ryan v. Cerullo, 282 Conn.
109, 118 (2007). The Connecticut Supreme Court has
interpreted the phrase "transacts any business within
the state" to include "a single purposeful business
transaction." Zartolas v. Nisenfeld, 440 A.2d
179, 181 (Conn. 1981); see also; Avant Capital Partners,
LLC v. Strathmore Dev. Co. Michigan, LLC, No.
3:12-CV-1194 (VLB), 2013 WL 5435083, at *3 (D. Conn. Sept.
30, 2013). In determining whether a business transaction
qualifies as purposeful, courts do not apply a rigid formula
but rather balance "public policy, common sense, and the
chronology and geography of the relevant factors."
Harris v. Wells, 832 F.Supp. 31, 34 (D. Conn. 1993)
(quoting Zartolas, 440 A.2d at 182). Courts are
instructed to examine the "nature and quality, rather
than the amount of Connecticut contacts to determine whether
there was purposeful activity." Avant Capital
Partners, LLC, 2013 WL 5435083, at *3.
argue that Plaintiff cannot establish the Court's
personal jurisdiction over CKP for "transacting
business" in Connecticut because less than 0.6% of its
decorative glitter disco dust product sales and only 2.5% of
its overall sales of all products over the past three and a
quarter years occurred in Connecticut. (Def.'s Mot. to
Dismiss at 12.) However, Defendants completely ignore
Zartolas's "single purposeful business
transaction" standard, and at oral argument counsel
conceded that under this standard the long arm statute
reaches CKP's conduct. Thus, because Plaintiff has
established personal jurisdiction over CKP under the long-arm
statute, the Court will determine (infra) whether
personal jurisdiction over CKP also comports with the Due
Process Clause of the Constitution. See Chloe, 616
F.3d at 163.
argue Plaintiff cannot show, under a veil-piercing theory,
that CI "controls" CKP such that CKP is a mere
"instrument" of CI. Plaintiff asserts that it need
not engage in a veil-piercing analysis to determine whether
CI meets the "single purposeful business
transaction" standard of Zartolas because as
part of Defendant CI's management and operation of
Defendant CKP's business, Defendant CI, through its agent
Patrick Kenney, transacted business within the state
constituting at least a "single purposeful
transaction." (PL's Opp'n at 10 citing (Czerczak
Aff. ¶¶ 15, 17-21; Am. Compl. ¶¶ 18, 19,
20, 24, 40; Martin Decl. ¶¶ 20-28; Ex.
relies on the incident involving Patrick Kenney, Purchasing
Manager for Defendant CI, in which he contacted Plaintiff
about a trademark cease and desist letter that CKP had
received from SE Tylose GmbH & Co. KG regarding
Plaintiffs Tylose Powder product, and his subsequent
negotiation with Plaintiff via telephone and email regarding
the return to Plaintiffs facility in New Britain, Connecticut
of 8, 293 bottles of Tylose Powder product that Defendant CKP
had purchased. (Czerczak Aff. ¶¶ 15-18; Martin
Decl. ¶¶ 20-23.) CKP thereafter elected to cease
purchasing the Tylose Powder from CAI and CAI issued a credit
memo for the returned product, which could only be used to
purchase other products from CAI. (Czerczak Aff. ¶¶
17-19; Martin Decl. ¶ 27.) Defendant CKP compensated
Defendant CI for the work Mr. Kenney did for CKP. (Martin
Decl. ¶¶ 23, 26, 28).
assuming, without deciding, that this may constitute a
"single purposeful transaction, " it is entirely
unrelated to the instant cause of action and therefore cannot
give rise to jurisdiction over the claims relating to the
disco dust products. See Ryan, 282 Conn, at 118
("a court possesses personal jurisdiction over a
nonresident individual with respect to a cause of action
arising from any business transacted in this state by
that individual (emphasis added)); Fischer v. Ulysses
Partners, LLC, No. FSTCV156024901, 2016 WL 921677, at
*6 (Conn. Super. Ct. Feb. 11, 2016) (examining
"whether the [plaintiffs] cause of action arose
from the defendants' ...