American Dairy Queen Corporation v. W.B. Mason Co., Inc.

Background

American Dairy Queen Corporation sued W.B. Mason Co., Inc. over W.B. Mason’s sale of spring and distilled water under the BLIZZARD brand. Dairy Queen alleged trademark infringement, false designation of origin, trademark dilution, common-law unfair competition, and violation of Minnesota’s deceptive-trade-practices statute. Dairy Queen also opposed W.B. Mason’s federal trademark applications for “BLIZZARD SPRING WATER” and “WHO BUT W.B. MASON’S BLIZZARD SPRING WATER.”

W.B. Mason moved under Federal Rule of Civil Procedure 12(b)(2) to dismiss for lack of personal jurisdiction, under Rule 12(b)(3) to dismiss for improper venue, or alternatively to transfer the case to the District of Massachusetts under 28 U.S.C. § 1404(a). W.B. Mason argued that its bottled-water sales had no connection to Minnesota, that it had not sold BLIZZARD water there, and that its registration to do business in Minnesota did not by itself establish consent to general personal jurisdiction. W.B. Mason had also filed a separate declaratory-judgment action in Massachusetts three days after Dairy Queen filed this case.

Personal Jurisdiction

Personal jurisdiction is a court’s authority to exercise legal power over a defendant. The court explained that personal jurisdiction may be specific, based on a defendant’s connections to the dispute, or general, allowing claims unrelated to those connections. The court did not rely on specific jurisdiction because W.B. Mason argued that its BLIZZARD water had no connection to Minnesota.

Instead, the court applied the Eighth Circuit’s decision in Knowlton v. Allied Van Lines. Under Knowlton, a corporation’s registration to do business in Minnesota and designation of an agent to receive service of process constitutes consent to general personal jurisdiction there. Dairy Queen had sufficiently alleged that W.B. Mason maintained its Minnesota registration and a registered agent for service of process. The court therefore found that W.B. Mason had consented to general personal jurisdiction in Minnesota.

W.B. Mason argued that later Supreme Court decisions, Goodyear Dunlop Tires Operations, S.A. v. Brown and Daimler AG v. Bauman, required a narrower interpretation of Minnesota’s registration statute. Those decisions generally limited general jurisdiction over corporations to places where they are essentially “at home,” ordinarily their place of incorporation or principal place of business. The court acknowledged that persuasive arguments existed that Knowlton might not fit comfortably with those decisions, but held that Knowlton remained controlling because the Supreme Court had not addressed the limits of a defendant’s ability to consent to general jurisdiction in those cases. The court stated that only the Supreme Court or the Eighth Circuit could change that rule.

Venue

Venue concerns the proper federal district for a lawsuit. The court held that venue was proper in Minnesota because a defendant is considered to reside in any district where it is subject to personal jurisdiction when the case begins. Since W.B. Mason was subject to personal jurisdiction in Minnesota through its registration and registered agent, the court rejected the venue challenge.

Transfer

Under 28 U.S.C. § 1404(a), a court may transfer a civil case for the convenience of the parties and witnesses and in the interest of justice. The court explained that the party seeking transfer generally bears the burden of showing that transfer is warranted, and that courts give substantial weight to the plaintiff’s choice of forum.

Dairy Queen filed first in Minnesota, and W.B. Mason later filed the related Massachusetts action. Although the first-filed rule does not automatically control the transfer analysis, W.B. Mason did not show a compelling circumstance supporting transfer. It did not adequately argue that Dairy Queen filed in bad faith, raced to court after learning W.B. Mason would file, or sought a declaratory judgment. It also did not adequately show that Massachusetts would be more convenient for the parties or witnesses or better serve the interests of justice.

Disposition

The court ordered that W.B. Mason’s “Motion to Dismiss for Lack of Personal Jurisdiction and Venue, or in the Alternative for Transfer” was DENIED. The opinion did not decide the merits of Dairy Queen’s trademark and unfair-competition claims.