PSI Marine, Inc. v. Seahorse Docking LLC

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PSI MARINE, INC., Plaintiff, v. SEAHORSE DOCKING LLC, Defendant.

No. 1:22-cv-10611

United States District Court, E.D. Michigan, Northern Division

August 1, 2022

Judith E. Levy, District Judge

REPORT AND RECOMMENDATION

Patricia T. Morris, United States Magistrate Judge

I. RECOMMENDATION

For the following reasons, I RECOMMEND that the Court DENY Defendant's motion to dismiss (ECF No. 9).

II. REPORT

A. Factual Background

This is a civil action for trademark infringement brought under 15 U.S.C. § 1121 (October 30, 1998). On March 22, 2022, Plaintiff PSI Marine, Inc. (“PSI Marine”), a Michigan corporation located in Saginaw, Michigan filed suit alleging trademark infringement by Defendant Seahorse Docking LLC (“Seahorse”), located in Manchester, Connecticut.

PSI Marine states as follows:

This Court has personal jurisdiction over Seahorse because, inter alia Seahorse has conducted and continues to conduct business in this judicial district and, upon information and belief, has engaged in activities related to PSI Marine's claims of federal trademark infringement that establish minimum contacts with the state of Michigan, including having committed acts of trademark infringement in this judicial district. Seahorse also operates a fully interactive website at seahorsedocking.com through which products associated with the offending mark and associated with the false advertising can be purchased.

PSI Marine makes the following factual allegations. PSI Marine sells mooring products to be used for docks and watercraft under the trademark TIDESLIDE. (ECF No. 1, PageID.3, ¶ 6). PSI Marine's principal, Mark Baluha is the exclusive licensee of TIDESLIDE. (Id.). Baluha registered the TIDESLIDE mark on November 4, 2003, consistent with the requirements of the Lanham Act, 15 U.S.C. § 1065 2018). (Id., ¶ 9). PSI Marine has invested “considerable” time and funds in promoting TIDESLIDE products and has made “considerable sales of products” under the mark. (Id. ¶ ¶ 10-11). PSI Marine operates a website under URL www.tideslide.com; maintains a presence on Facebook and Instagram; and attends trade shows using the TIDESLIDE mark and promoting TIDESLIDE products. (Id. at PageID.3-4, ¶¶ 10-12). As a result, PSI Marine has “acquired value, name and brand recognition, and goodwill” in the use of the TIDESLIDE mark. (Id. at PageID.4, ¶ 14.

PSI Marine alleges further that Defendant Seahorse “owns and operates a fully interactive website, www.seahorsedocking.com that “advertises and offers certain products for sale to the general public within the United States, including this District” allowing the general public to search products that are offered for sale on the website and purchase and arrange for shipment of the products through a shopping cart feature. (Id., ¶¶ 15-16). Among the Seahorse's online offerings are “SEA SLIDE” products using the SEA SLIDE mark in connection with their promotion of “Mooring Products for Docks and Watercraft.” (Id. at PageID.4-5, ¶ 17). Seahorse's website also offers the “Tide Right” mark in connection with the Mooring Products for Docks and Watercraft. (Id., ¶ 18). PSI Marine states that “Seahorse has mimicked and adopted the look and feel of [PSI Marine's] social media, booth displays and various literature, such as consumer price lists. (Id., ¶ 19).

Count I of PSI Marine's complaint states that that Seahorse has willfully and deliberately infringed its trademark registration of TIDESLIDE with the name SEA SLIDE. (Id. at PageID.6-7, ¶¶ 21-29). Count II states that Seahorse used and continues to use interstate commerce to advertise, promote, distribute, and offer for sale SEA SLIDE products and that the SEA SIDE name is used “on identical or at least related goods to those sole by PSI Marine” under the TIDESLIDE mark. (Id. at PageID.8-9, ¶¶31-39). Count III states that Seahorse falsely advertises on its website that its Tide Right product contains a “‘patented self-adjusting fender and clear.'” (Id. at PageID.9, ¶ 41) quoting (Id. at PageID.25-26, ¶¶ 41-48). Count IV states that Seahorse willfully and deliberately states falsely that if “offers the only adjustable Self-Leveling Docking System” while in fact, PSI Marine offers a self-leveling docking systems.” (Id. at PageID.11, ¶¶ 50-54). PSI Marine also alleges violations of the Michigan Consumer Protection Act (“MCPA”), M.C.L. § 445.903; unfair competition; and unjust enrichment. (Id. at PageID.11-13, ¶¶ 55-60, 6165, 66-70).

PSI Marine requests that Seahorse be preliminarily and permanently enjoined from the following: promoting or selling products infringing on the TIDESLIDE mark; claiming that its products are patented; and claiming that it offers the only adjustable self-leveling docketing system. (Id. at PageID.15-16). PSI Marine also requests monetary damages, costs, and pre-judgment and post-judgment interest. (Id. at PageID.16).

Appended to Defendant's motion as Exhibit A is the Declaration of Carmen Martocchio, the owner of Seahorse Docking LLC. The Declaration states that Seahorse is a limited liability company under the laws of the State of Connecticut and has its principal place of business in Connecticut. (ECF No. 9-1, PageID.74). Seahorse neither owns, operates, nor maintains any facilities, offices, telephone listings, or mailing addresses in the State of Michigan. (Id. at PageID.74-75). Seahorse does not have any employees who live or work in Michigan, and is not licensed or registered to do business in Michigan. (Id. at PageID.75). It has not appointed a registered agent for service of process in Michigan, and has not paid taxes in the State of Michigan. (Id.). The Declaration states that Seahorse “does not have substantial, ongoing business contacts within the State of Michigan.” (Id.).

The Declaration states that Seahorse has not sold its SEA SLIDE or Tide Right products in Michigan. And it “has not specifically directed any advertisements for the SEA SLIDE or TIDE RIDE products to customers or distributors located in the State of Michigan.” (Id. at PageID.76). As reflected in Appendix 1 to the Declaration, as of April 26, 2022, Seahorse has sold a total of two items to customers in Michigan, neither of which was for SEA SLIDE or TIDE RIGHT products. (Id. at PageID.77). The Declaration states that the majority of Seahorse's sales have been made to customers outside the State of Michigan. (Id.).

In response, Plaintiff PSI Marine has submitted the declaration of Mark Baluha, its owner, who states that his company is domiciled in Michigan. (ECF No. 13, PageID.100).

He states that PSI Marine is the exclusive licensee of the registered trademark TIDESLIDE. (Id.). He states that Defendant's website “offers to sell goods under the infringing SEA SLIDE and TIDE RIGHT. (Id. at PageID.101).

Exhibit A to Baluha's declaration is a portion of Seahorse's website describing its SEA SLIDE product, including pricing information. It also has ordering information (“Add to cart)” and indicates that payment may be made with GPay and Shop Pay, with a link to “more payment options.” (ECF No. 13-2, PageID.105-106). It also has links to Seahorse's terms of service and refund policy. (Id. at PageID.107).

Exhibit B to Baluha's declaration is a portion of its website describing its TIDE RIGHT product, including pricing and ordering information. It states, “The standard beam length is 10 feet. If you need a larger size, please select that option.” It has an ordering link (“Add to cart”) and indicates that the product can be purchased through G Pay or Shop Pay, with another link to “more payment options.” It has an interactive link (“Ask a question”) for potential consumers to obtain more information. (ECF No. 13-3, PageID.109-110). It also has links to Seahorse's terms of service and refund policy. (Id. at PageID.112).

Exhibit C to Baluha's declaration is a portion of Seahorse's website that advertises a “Memorial Day sale,” offering a $100 discount on any purchase of $1000 or more that will be “automatically applied at checkout.” (ECF No.13-4, PageID.113). It states in oversize boldface type, “CONTACT US, ” and lists a contact telephone number. (Id.). It also indicates that Seahorse may be contacted by email, and contains a section for the potential customer's name, email address, and message. (Id.). It has a link to Seahorse's terms of service and refund policy. (Id. at PageID.115).

B. Legal standards

Defendant moves for dismissal of PSI Marine's complaint under Federal Rule of Civil Procedure 12(b)(2), for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2) allows defendants to move for dismissal for lack of personal jurisdiction. When faced with a “properly supported 12(b)(2) motion,” district courts must choose between one of three procedural alternatives. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir, 1991). Specifically, the Court may (1) “rule” on the parties' “written submissions alone,” (2) “permit discovery in aid of the motion,” or (3) “conduct an evidentiary hearing on the merits of the motion.” Serras v. First Tenn. Bank Nat. Ass'n., 875 F.2d 1212, 1214 (6th Cir. 1989). This decision is well within the district court's discretion. Theunissen, 935 F.2d at 1458; see also MAG IAS Holdings, Inc. v. Schmuckle, 854 F.3d 894, 899 (6th Cir. 2017).

The plaintiff carries the burden of establishing personal jurisdiction. Malone v. Stanley Black & Decker Inc., 965 F.3d 499, 502 (6th Cir. 2020). The extent of the plaintiff's burden, however, depends on the court's method for resolving the motion. Id. at 505 (citing Serras, 875 F.2d at 1214). Where the Court decides to resolve the motion on “written submissions alone,” the plaintiff need only make a prima facie showing of personal jurisdiction, and a plaintiff can make...