Astor Chocolate Corp. v. Elite Gold Ltd.

Background

Astor Chocolate Corp. sued Elite Gold Ltd., PT Mayora Indah TBK, Mayora Group, Mayora Co., Food Depot Corporation, Orange Grocer, and Food Industries. Astor alleged trademark infringement, unfair competition, deceptive business practices, false advertising, and injury to business reputation. The claims concern Elite Gold’s registered ASTOR mark, the Mayora Parties’ manufacture and sale of products using that mark, and the Food Depot Parties’ online sales of those products.

Astor alleged that products bearing the ASTOR mark were offered online and sold to New York purchasers. Astor’s counsel ordered products from Orange Grocer and Food Industries for delivery to New York, and the packages arrived there. The Food Depot Parties said they purchased the products from Takari International in California and had no agreements or relationship with Elite Gold or the Mayora Parties.

Elite Gold is an intellectual-property holding company incorporated in the British Virgin Islands. PT Mayora Indah is an Indonesian corporation. The opinion states that Mayora Group is a trade name for Mayora Indah rather than a separate legal entity, and that no legal entity named Mayora Co. exists. The Food Depot Parties are Oklahoma corporations that do business out of California.

Motions and jurisdictional standards

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. The Mayora Parties also moved under Rule 12(b)(5) for improper service of process. Personal jurisdiction is a court’s power to require a defendant to participate in a case. Astor relied primarily on New York’s long-arm statute and, for Elite Gold and the Mayora Parties, alternatively relied on Rule 4(k)(2), which can provide federal jurisdiction over certain defendants based on their contacts with the United States as a whole.

The court explained that it could consider pleadings, affidavits, and other materials without holding a full evidentiary hearing. At this stage, Astor needed to make a preliminary showing that jurisdiction might exist. The court also explained that jurisdictional discovery is appropriate when genuine factual disputes could affect jurisdiction.

Food Depot Parties

The court held that it could not properly exercise jurisdiction over the Food Depot Parties based only on the two New York shipments arranged by Astor’s counsel. The court stated that such plaintiff-instigated transactions generally cannot, by themselves, show that a defendant purposefully conducted activities in New York. The court also noted that Astor’s claims could not be said to arise from those particular transactions because Astor’s counsel would not have been confused about the source of the products.

The Food Depot Parties’ submissions did not address whether they had made other sales or deliveries of allegedly infringing products into New York. The court therefore found a genuine jurisdictional factual issue and authorized limited written and document discovery concerning their marketing, sales, and shipments of the products in or into New York.

Elite Gold

Elite Gold stated that it did not manufacture, sell, or distribute goods connected to the ASTOR mark; did not sell products through Amazon or other online platforms; and did not have direct business relationships with New York or with the Food Depot Parties. It stated that it owned the mark and licensed it to Mayora Indah.

The court found that Elite Gold’s declarations did not fully address Astor’s allegations. In particular, they left open questions about whether Elite Gold’s licensees knowingly sold products into New York or the United States, whether Elite Gold received a financial or business benefit from those sales, its relationship with the Mayora Parties and Takari, and the significance of statements Elite Gold made to the United States Patent and Trademark Office.

The court authorized limited written and document discovery concerning Elite Gold’s licenses, its relationships with the Mayora Parties and Takari, overlapping management or directors, and the basis for its statements to the Patent and Trademark Office. The court did not decide that these facts established personal jurisdiction.

Mayora Parties

The court found unresolved questions about whether service on Mayora Indah was proper. Astor’s service affidavits stated that service was made on Yuki Teng, while Mayora Indah asserted that Teng was not authorized to accept service and was not its employee. Astor presented materials suggesting that Teng might have been connected to Mayora Indah’s United States activities.

The court also found factual disputes about Mayora Indah’s United States contacts. Mayora Indah stated that it did not sell products in the United States or on Amazon and sold only to distributors outside the United States. Astor presented materials that, according to the opinion, appeared to indicate distribution in the United States, described ASTOR as a Mayora brand, and linked Teng and other individuals or entities to Mayora’s United States operations.

The court authorized discovery about Teng’s relationship with Mayora entities and other defendants, service on Mayora Indah, Mayora’s statements about United States distribution and its United States contact, its corporate and contractual relationships with the other defendants and Takari, and its contacts with California or other states. The court also allowed one limited deposition of the Mayora Parties under Rule 30(b)(6), a rule permitting an organization to designate a person to testify about specified topics. The court directed Astor to begin foreign service on Mayora Indah or seek a waiver while discovery proceeded.

Leave to amend

The court granted Astor leave to amend the complaint to add Takari International. It described Takari as a potentially important link because the submissions portrayed Takari as responsible for importing the allegedly infringing products and supplying the Food Depot Parties. The court denied leave to add other parties or to amend the complaint for purposes beyond properly alleging already pleaded claims against Takari.

Disposition

The court stayed the defendants’ motions to dismiss pending jurisdictional discovery. It granted Astor leave to conduct the specified limited discovery, granted leave to file an amended complaint adding Takari, and denied leave for other additions or broader amendments. It required Astor and the defendants to submit supplemental briefs after discovery. The court did not rule on personal jurisdiction, service of process, or the merits of Astor’s underlying claims.