Domaine Carneros, Ltd v. Lea Trading LLC

Background

Domaine Carneros, Ltd. produces and sells sparkling wine under the federally registered “LE RÊVE” trademark. It alleged that Lea Trading LLC’s distribution of sparkling wine under the mark “VIE DE RÊVE” infringed that trademark and violated related federal and state laws. The complaint asserted federal trademark infringement, federal unfair competition and false designation of origin, California unfair competition, common-law trademark infringement, and common-law unfair competition. The opinion also states that BeviBirra Inc., another defendant, had defaulted.

Lea Trading moved to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) and for improper venue under Rule 12(b)(3). In the alternative, it sought transfer to the Southern District of Florida. Domaine Carneros opposed dismissal and transfer and requested discovery about personal jurisdiction if the court found the existing record insufficient.

Personal Jurisdiction Analysis

The court explained that a plaintiff bears the burden of showing that personal jurisdiction over a nonresident defendant is proper. Domaine Carneros did not argue that Lea Trading was subject to general personal jurisdiction in California. Instead, it relied on specific personal jurisdiction, which can apply when a defendant’s forum-related conduct is connected to the plaintiff’s claims.

Because trademark infringement and related unfair competition claims are treated as tort-like claims for this purpose, the court applied the “purposeful direction” analysis. Under that analysis, the plaintiff had to show that Lea Trading committed an intentional act, expressly aimed that act at California, and caused harm that Lea Trading knew was likely to occur in California.

The court found that Domaine Carneros had shown an intentional act through evidence that one bottle of VIE DE RÊVE wine was bought through Lea Trading’s website and shipped to Napa, California. The court also found that the trademark opposition and cease-and-desist letters supported the conclusion that Lea Trading knew Domaine Carneros claimed harm in California.

The court concluded, however, that Domaine Carneros had not shown that Lea Trading expressly aimed its conduct at California. The record showed only one sale of one bottle into California. The court could not determine whether Lea Trading regularly sold the wine into California through its website or whether the sale was an isolated event. The court also could not determine whether a placement of the wine in gift bags at a Grammy-related event in California was attributable to Lea Trading through the public-relations firm involved.

Ruling

The court held that Domaine Carneros had not carried its burden on the first part of the specific-personal-jurisdiction test. It therefore GRANTED WITH LEAVE TO AMEND Lea Trading’s motion to dismiss for lack of personal jurisdiction. The court did not address the remaining parts of the personal-jurisdiction test, improper venue, or the requested transfer.

The court also GRANTED Domaine Carneros’s request for jurisdictional discovery because additional factual development was necessary before a final determination of personal jurisdiction. The parties must meet and confer about the scope of that discovery, after which Domaine Carneros must submit a proposed discovery plan addressing its subject matter and timing. Domaine Carneros does not need to file an amended pleading until 14 days after jurisdictional discovery is completed.