Executive Park Partners LLC v. Benicci Inc.

Background

Executive Park Partners LLC sued Benicci Inc. after Benicci submitted a report to Walmart accusing sellers, including Executive Park, of listing counterfeit versions of Benicci’s Safe Tree Swing Hanging Kit. Walmart removed Executive Park’s listing, and Executive Park alleged that the products were authentic and in authentic packaging.

Executive Park’s Second Amended Complaint asserted four claims: (1) a declaration that its resale did not infringe Benicci’s BENICCI trademark; (2) common-law defamation; (3) common-law tortious interference with prospective business relations; and (4) common-law unfair competition. Benicci moved to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, Rule 12(b)(2) for lack of personal jurisdiction, and Rule 12(b)(6) for failure to state a claim.

Subject-Matter Jurisdiction

The court held that Executive Park adequately alleged a definite intent and apparent ability to continue using the BENICCI mark, because it alleged that it had inventory and intended to sell the products if the court declared that the sales were non-infringing. But the court declined to exercise jurisdiction over the declaratory-judgment claim.

The court reasoned that Executive Park’s requested declaration would principally require a factual determination about whether the products were counterfeit, rather than resolve a legal issue appropriate for declaratory relief. The court also found that the declaration would not settle the broader commercial dispute, including Walmart’s removal of the listing and Executive Park’s related state-law claims. The court therefore declined to exercise jurisdiction over the declaratory-judgment claim and the related state-law claims.

Executive Park alternatively relied on diversity jurisdiction. The court held that Executive Park had not shown by a preponderance of the evidence that the amount in controversy exceeded $75,000. The court also held that Executive Park had not established the citizenship of its members, which was necessary to determine whether complete diversity existed. The court concluded that Executive Park had not established subject-matter jurisdiction under either federal-question or diversity jurisdiction.

Personal Jurisdiction

The court separately held that New York’s long-arm statute did not provide personal jurisdiction over Benicci. Executive Park argued that jurisdiction existed because it sourced Benicci products through a New York intermediary and Benicci’s websites delivered products to New York.

The court found no articulable connection between Benicci’s sales in New York and Executive Park’s claims. The claims arose from Benicci’s alleged complaints to Walmart about Executive Park’s listings, not from Benicci’s New York sales. The court held that Executive Park had not made the required preliminary showing that personal jurisdiction existed and granted Benicci’s motion to dismiss under Rule 12(b)(2).

Rule 12(b)(6) and Attorney’s Fees

Because the court found that it lacked subject-matter and personal jurisdiction, it did not address Benicci’s Rule 12(b)(6) arguments. The court stated that it could not proceed to decide whether Executive Park had adequately stated its claims without jurisdiction over the case and the parties.

Benicci also sought attorney’s fees under New York’s anti-strategic-lawsuit-against-public-participation statute. The court agreed with Executive Park that the statute’s standard conflicted with federal procedural standards and held that the fee provision was inapplicable in federal court. The court denied Benicci’s request for costs and attorney’s fees.

Disposition

The court granted Benicci’s motion to dismiss for lack of subject-matter jurisdiction and lack of personal jurisdiction. It directed the Clerk of Court to terminate the pending motion and close the case.