48th Restaurant Associates LLC v. Avra Hospitality LLC

Background

48th Restaurant Associates LLC operates upscale restaurants and bars using the federally registered AVRA trademark. Two of its restaurants are in New York City, and one is in Beverly Hills, California. Avra Hospitality LLC is organized under Minnesota law and has its principal place of business in Rochester, Minnesota. Andrew Chafoulias and Miki Radovanovic are part-owners and officers of Avra Hospitality; Chafoulias is its chief executive officer, and Radovanovic is its chief operating officer. Both work in Rochester.

Avra Hospitality provides hotel management services for hotels in Minnesota and for the Inn at Harbor Hill Marina near New London, Connecticut. The complaint alleged that Avra Hospitality began using the AVRA HOSPITALITY mark and the standalone term AVRA for hotel management services. The website for the Connecticut inn stated that it was “Managed by Avra Hospitality” and allowed users to make online reservations under the AVRA HOSPITALITY mark.

48th Restaurant Associates alleged trademark infringement, federal unfair competition, New York common-law unfair competition, and a violation of New York General Business Law § 360-L. The defendants moved under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) to dismiss for lack of personal jurisdiction and improper venue.

Personal Jurisdiction

Personal jurisdiction is a court’s authority to exercise power over a defendant. The court focused on whether New York’s long-arm statute, particularly sections 302(a)(1) and 302(a)(3), allowed the claims to proceed against the defendants in New York.

Under section 302(a)(1), a defendant may be subject to jurisdiction for transacting business in New York when the claim arises from that transaction. The court held that the plaintiff had not alleged even one purposeful transaction in New York. The allegations that New Yorkers could access the defendants’ websites and that the Connecticut inn regularly attracted New York visitors did not establish a purposeful transaction within New York. The court also rejected the plaintiff’s request to infer that New York residents had booked reservations through the website.

Under section 302(a)(3)(ii), the plaintiff needed to allege, among other things, that the defendants should reasonably have expected their conduct to have consequences in New York. The court found that the complaint did not allege that the defendants marketed to New Yorkers or made a discernible effort to serve the New York market. The Connecticut inn’s attracting visitors from New York was not enough.

The court separately concluded that constitutional due-process principles also barred personal jurisdiction. Those principles require sufficient contacts between the defendant and the forum state itself, not merely contacts with people who live there. The court found no allegations that the defendants advertised, marketed, or otherwise purposefully directed their conduct at New York as a market.

Venue

Venue concerns the proper federal district in which a case may be litigated. The plaintiff relied on 28 U.S.C. § 1391(b)(2), which permits venue in a district where a substantial part of the events or omissions giving rise to the claim occurred.

The court held that the mere existence of a website displaying an allegedly infringing mark and accessible to New Yorkers did not show that a substantial part of the relevant events occurred in the Southern District of New York. The plaintiff did not allege that the defendants took action in New York or directed actions toward New York. The court also noted that the defendants conceded they were subject to personal jurisdiction in Minnesota and that the plaintiff did not contest that the suit could be brought there.

Jurisdictional Discovery and Disposition

The plaintiff requested discovery focused on jurisdiction. The court denied that request because venue was lacking, and the plaintiff had not requested venue-related discovery or offered specific facts or evidence supporting venue in the district.

The court granted the defendants’ motion to dismiss for lack of personal jurisdiction and venue. It also denied the plaintiff’s request for jurisdictional discovery. The opinion does not state that the motion or any dismissal was with or without prejudice.