Tangle, Inc. v. Buffalo Games, LLC

Background

Tangle, Inc. sued Buffalo Games, LLC for trademark infringement, false designation of origin, copyright infringement, and unfair competition. Tangle alleged that Buffalo Games sold a "Twist & Tangle" toy as part of a "Chuckle & Roar Sensory Fidget Box 10-pack" through Target stores in California and Target’s website.

Tangle amended its complaint after the court previously dismissed the case for lack of personal jurisdiction and allowed Tangle to conduct jurisdiction-related discovery. The amended complaint added allegations that Buffalo Games shipped products from China through the Port of Long Beach, California, and that the products were then distributed to Target stores and other locations. Tangle also alleged that Buffalo Games controlled Target’s pricing and directed Target to remove the products from its shelves and website.

Personal Jurisdiction

Personal jurisdiction is a court’s power to exercise authority over a defendant. Because Buffalo Games challenged jurisdiction based on written materials rather than an evidentiary hearing, Tangle needed to make a preliminary showing of facts supporting jurisdiction. The court considered the pleadings, declarations, invoices, and other evidence.

Tangle did not argue that California had general jurisdiction over Buffalo Games. The record showed that Buffalo Games had no physical locations, facilities, or personnel in California, was not licensed to conduct business there, owned no property or assets there, and did not owe or pay California income taxes.

The court therefore analyzed specific jurisdiction, which depends on whether the defendant’s conduct connected to the lawsuit created a substantial connection with California. For the claims sounding in tort, the court applied the purposeful-direction test. Under that test, Tangle had to show that Buffalo Games committed an intentional act, expressly aimed at California, that caused harm Buffalo Games knew was likely to be suffered there.

The court found that Tangle adequately alleged an intentional act because selling an allegedly infringing product can satisfy that requirement. But the court found that Tangle failed to show that Buffalo Games expressly aimed its conduct at California.

First, the evidence did not show that Buffalo Games shipped the products to California in a way that established purposeful direction toward California. The invoices stated that the products were shipped "FOB" to Ningbo, China, meaning that Target assumed ownership and the risk of loss there. Testimony also showed that Target took title to the products in China and decided how to ship them to the United States. The court concluded that Tangle had not identified evidence contradicting that record.

Second, Buffalo Games’s nationwide distribution relationship with Target did not establish the required connection to California. The court found that the allegations showed, at most, that Target—not Buffalo Games—directed products to California consumers. California’s large share of Target’s market was not enough to establish jurisdiction over Buffalo Games.

Third, the court rejected Tangle’s agency theory. An agency relationship generally requires one party to act on another’s behalf and under that party’s control. The court found that Tangle had not shown that Buffalo Games directed Target to sell the products in California, controlled Target’s distribution or transportation activities, or showed that Target was acting for Buffalo Games’s benefit rather than its own. The court therefore found no agency relationship sufficient to support specific jurisdiction.

Because Tangle failed to satisfy the express-aiming requirement, the court did not address whether exercising jurisdiction would otherwise have been reasonable or whether Buffalo Games could foresee harm in California.

Disposition

The court held that it lacked personal jurisdiction over Buffalo Games. Under 28 U.S.C. § 1406(a), it transferred the case to the Western District of New York because both parties agreed that court had personal jurisdiction over Buffalo Games and Buffalo Games’s principal place of business was within that district.

The court granted Buffalo Games’s motion to dismiss for lack of personal jurisdiction and to transfer the case. It also granted the administrative motions to seal because they sought to protect confidential business information.