AMERICAN GIRL, LLC v. ZEMBRKA

Background

American Girl, LLC, the creator of American Girl-branded products, brought a trademark-infringement action against Zembrka, doing business as WWW.ZEMBRKA.COM and WWW.DAIBH-IDH.COM, and against those websites. American Girl alleged that the defendants’ websites copied aspects of American Girl’s website and sold products advertised under the American Girl trademark that were nearly indistinguishable from American Girl’s products.

The defendants moved to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). The court previously granted that motion. It found that American Girl had not shown that the defendants transacted business in New York or that their alleged infringement caused injury in New York. The court also noted that American Girl’s counsel had ordered two products for delivery to New York, but the products were never delivered and the purchase price was refunded.

Motion for Reconsideration

American Girl moved for reconsideration under Local Civil Rule 6.3, relying on PayPal records obtained after the earlier opinion. According to American Girl, the records showed that 38 New York customers had purchased the allegedly counterfeit products through the defendants’ websites, although those customers never received the products and were refunded. The records also showed hundreds of completed sales of non-infringing products to New York customers.

A reconsideration motion is an extraordinary remedy. The court explained that it may be granted based on an intervening change in controlling law, newly available evidence, a clear error, or the need to prevent manifest injustice. Evidence qualifies as new only if it was truly newly discovered or could not have been obtained through reasonable diligence.

The court did not decide whether the PayPal records qualified as new evidence. It stated that the distinction between newly available evidence and evidence obtained belatedly did not matter because the reconsideration motion failed on the personal-jurisdiction issue.

Personal Jurisdiction Based on New York Transactions

New York’s long-arm statute permits jurisdiction over a foreign entity that transacts business in New York when the claim arises from that business activity. The court held that the attempted purchases by New York customers did not qualify because the customers were refunded and the allegedly infringing products were never delivered. Those transactions were therefore not completed sales or contracts to supply goods in New York.

The court also rejected American Girl’s reliance on the completed sales of unrelated, non-infringing products. American Girl admitted that those transactions were unrelated to the allegedly counterfeit products and did not give rise to its claims. The court distinguished a prior Second Circuit case in which an allegedly counterfeit product had actually been shipped into New York and other New York business activity provided context. Here, American Girl had not identified a single shipment of an allegedly infringing product into New York.

Personal Jurisdiction Based on Alleged Tortious Conduct

New York’s long-arm statute also permits jurisdiction for certain tortious acts committed outside New York that cause injury in New York, when other statutory requirements are met. The court had previously found that American Girl had not shown injury in New York. Even assuming the new records showed such injury, the court held that American Girl still failed to show that the defendants expected or should reasonably have expected their alleged conduct to have consequences in New York.

The court applied an objective test requiring more than the possibility that a product might reach New York. It required evidence of a purposeful affiliation with New York, such as a discernible effort to serve the New York market. The websites’ use of U.S. dollars and English, and their lack of a disclaimer about shipment to the United States or New York, did not satisfy that test. Instead, the court found that the defendants’ policy of not shipping products to the United States and refunding the 38 New York customers demonstrated an intent to avoid the New York market.

Disposition

The court denied American Girl’s motion for reconsideration and directed the Clerk of Court to close the motion at docket entry 37. This opinion classified the reconsideration ruling as a procedural order because the court acted on the request to revisit its earlier jurisdictional dismissal rather than deciding the underlying trademark-infringement claims.