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Sturm, Ruger & Co., Inc. v. Armscor Precision International, Inc.

United States District Court, D. New Hampshire

July 28, 2015

Sturm, Ruger & Co., Inc., Plaintiff
v.
Armscor Precision International, Inc., Rock Island Armory Exports, Inc., and Arms Corporation of the Philippines, Defendants Opinion No. 2015 DNH 148

ORDER

STEVEN J. McAULIFFE, District Judge.

Sturm, Ruger & Co., Inc. ("Ruger") brought suit against Armscor Precision International, Inc. ("API"), Rock Island Armory Exports, Inc. ("RIA") (collectively "domestic defendants"), and Arms Corporation of the Philippines ("ACP" or "Philippines defendant"), (collectively "defendants") for alleged trade dress infringement and dilution, and for allegedly violating New Hampshire's Consumer Protection Act ("CPA"), N.H. Rev. Stat. Ann. 358-A:2. Ruger asserts that by manufacturing, marketing, and selling a copycat of one of its firearms, the 10/22 (alleged to be one of the most popular.22 caliber semi-automatics on the market for over 50 years), defendants misappropriated and diluted plaintiff's trade dress and confused Ruger's customers, causing them to purchase defendants' rifles. Defendants move to dismiss the entire action for lack of personal jurisdiction or, in the alternative, to transfer venue to the District of Nevada. Defendants also move to dismiss plaintiff's CPA claim. Plaintiff objects. As explained below, plaintiff has made a sufficient prima facie showing of personal jurisdiction over defendants, and defendants have not shown that venue is improper in this district, or that transfer is nonetheless appropriate. Consequently, defendants' motion to dismiss and motion to transfer venue are denied.

The Legal Standard

Pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, when considering a motion to dismiss for lack of personal jurisdiction, the court takes the facts pled in the complaint as true, and construes them "in the light most congenial to the plaintiff's jurisdictional claim." Negrón-Torres v. Verizon Commc'ns, Inc., 478 F.3d 19, 23 (1st Cir. 2007); see Fed. R. Civ P. 12(b)(2), (6). In a case such as this, where the court rules based on the "prima facie record, " the pleadings, affidavits, and other written materials, in the absence of an evidentiary hearing, the plaintiff need only make a "prima facie" showing that the defendants are subject to personal jurisdiction. See C.W. Downer & Co. v. Bioriginal Food & Science Corp., 771 F.3d 59, 65 (1st Cir. 2014); Dagesse v. Plant Hotel N.V., 113 F.Supp.2d 211, 214-15 (D.N.H. 2000); Presby Patent Trust v. Infiltrator Sys., Inc., No. 14-cv-542, 2015 WL 3506517, at *2 (D.N.H. June 3, 2015). In making a prima facie showing of jurisdiction, a plaintiff need not, and indeed may not, rely only on the allegations in the complaint. See Dagesse, 113 F.Supp.2d at 215; Presby Patent Trust, No. 14-cv-542, 2015 WL 3506517, at *2. "Rather, he or she must adduce evidence of specific facts that support jurisdiction." Dagesse, 113 F.Supp.2d at 215. To proffer these facts, a plaintiff may rely on "documents attached to an opposition, even if they contain hearsay, so long as that evidence bears circumstantial indicia of reliability.'" Presby Patent Trust, No. 14-cv-542, 2015 WL 3506517, at *8 n.2. The court then takes the facts as pleaded and the "evidentiary proffers as true and construe them in the light most favorable to the plaintiff's claim...." C.W. Downer & Co., 771 F.3d at 65.

The court also considers uncontradicted facts put forth by the defendant, but does not "credit conclusory allegations or draw farfetched inferences." Negrón-Torres, 478 F.3d at 23. (citations and quotation marks omitted) (emphasis added).

Background

The relevant facts, construed in the light most favorable to Ruger, are as follows. Ruger is a Delaware corporation, with corporate headquarters in Southport, Connecticut. The facility at which it manufactures the 10/22 rifle is located in Newport, New Hampshire. Ruger manufactures all its 10/22 rifles at the New Hampshire plant, where it also keeps its plans, drawings, and equipment related to the 10/22. Pertinent Bureau of Alcohol, Tobacco, and Firearms regulations require each rifle to be marked with its manufacturing origin. Ruger conspicuously marks each 10/22 rifle barrel with the following embossment, "RUGER, NEWPORT, NH USA." Ruger has been manufacturing the 10/22 in Newport since 1964.

Domestic defendants, API and RIA are Nevada corporations with principal places of business in Nevada. Defendant Arms Corporation of the Philippines is incorporated in the Philippines, with a principle place of business in Manila. Arms Corporation of the Philippines is the parent company of API and RIA, its United States subsidiaries. Defendants are not registered to do business in New Hampshire; do not hold any licenses to do business in New Hampshire; do not have a registered agent in New Hampshire; do not maintain a mailing address, real property, offices, facilities, employees, or bank accounts in New Hampshire; have never paid New Hampshire taxes; and do not manufacture or source products in New Hampshire.

However, dating back to at least November of 2013, defendants have been marketing, distributing, and selling a virtually identical copy of the Ruger 10/22 in New Hampshire, under the trade names Armscor Rock Island Armory M22, Rock Island Armory M22, and Rock Island Armory RIA22. As required by law, these rifles are embossed with "ACP PHILIPPINES" to identify the manufacturer and "APINTL-PAHRUMP NV" to identify the importer. Those stamps connect the domestic and Philippines defendants to the allegedly infringing rifles that are being marketed and sold in New Hampshire by at least one agent of defendants.[1] Regarding the allegations of trade dress infringement specifically, at least one trade publication, citing an Armscor staffer as its source, recognized that the M22/RIA22 "is an exact copy of the 10/22...."

Further, according to the president of Southern Ohio Gun Distributors ("SOG"), one of defendants' wholesale distributors, acting as an agent for defendants' marketing and sales in the United States and in New Hampshire in particular, [2] asked defendants' CEO, Tuason, "how can Armscor/RIA sell a rifle that is identical to the Ruger 10/22?" Tuason allegedly responded that Ruger's "patent ha[d] run out." SOG then distributed a sales flyer to all FFL holders, including 1, 170 in New Hampshire, one of which was Rody's Gun Shop, LLC, located half a mile from Ruger's manufacturing facility in Newport, NH. The flyer disclosed that the RIA22 is a "well made copy of a very popular 22LR 10 shot rifle (Ruger's patent expired). All mags and accessories that fit that model will fit this."

For their part, defendants do not deny that they solicit and sell the allegedly infringing rifles in New Hampshire via their wholesale-distributor agents. Rather, the vice president of defendants, Stephen Anderson, represents in a sworn affidavit only that defendants "did not directly solicit or sell any products in New Hampshire that relate to this current suit by Ruger." (emphasis added). In addition, defendants' domestic website identifies at least one retailer, in addition to Rody's, from whom their products can be purchased in New Hampshire - Merrimack Firearms in Merrimack, NH.

Based on the foregoing allegations, Ruger asserts claims of trade dress infringement (Count I) and trade dress dilution (Count II) under the Lanham Act, 15 U.S.C. §§ 1125(a), (c), and unfair and deceptive trade practices under New Hampshire Revised Statutes Annotated ("RSA") 358-A:2 (Count III).

Discussion

Defendants first move to dismiss the complaint for lack of personal jurisdiction. Ruger counters that by manufacturing, marketing, and selling a copycat of one of its best selling firearms, defendants have misappropriated and diluted plaintiff's trade dress and confused Rugers' customers, both in New Hampshire and around the world, causing them to purchase defendants' rifles. As a result, Ruger claims to have suffered foreseeable injury in New Hampshire, subjecting defendants to jurisdiction in this state. Alternatively, defendants move to transfer venue to the District of Nevada. Defendants also move to dismiss Plaintiff's CPA claim for failure to state a claim.

I. Motion to Dismiss for Lack of Personal Jurisdiction

A. Statutory and Constitutional Prerequisites

When a defendant challenges personal jurisdiction, the plaintiff bears the burden of demonstrating "the existence of every fact required to satisfy both the forum's long-arm statute and the Due Process Clause of the Constitution." See Negrón-Torres, 478 F.3d at 24 (quoting U.S. v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618 (1st Cir. 2001)); see also C.W. Downer & Co. v. Bioriginal Food & Science, 771 F.3d 59, 65 (1st Cir. 2014).

Where, as here, the state's long-arm statute is coextensive with the constitutional limits of due process, the two inquiries become one, focusing solely on whether jurisdiction comports with due process. See id. "Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Astro-Med, Inc. v. Nihon Kohden America, Inc., 591 F.3d 1, 9 (1st Cir. 2009) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). "The inquiry into minimum contacts' is necessarily fact-specific, involving an individualized assessment and factual analysis of the precise mix of contacts that characterize each case.'" Medicus Radiology, LLC v. Nortek Med. Staffing, Inc., No. 10-cv-300, 2011 WL 9373, at *2 (D.N.H. Jan. 3, 2011) (quoting Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir. 1994)).

B. General v. Specific Jurisdiction

Personal jurisdiction comes in two varieties: specific and general. See Negrón-Torres, 478 F.3d at 24. Key to both is the existence of "minimum contacts" between the nonresident defendant and the forum. Id . "General jurisdiction exists when the litigation is not directly founded on the defendant's forum-based contacts, but the defendant has nevertheless engaged in continuous and systematic activity, unrelated to the suit, in the forum state." United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1088 (1st Cir. 1992) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-416 & n.9 (1984)). Ruger does not contend that defendants engaged in "continuous and systematic activity" in New Hampshire, nor does it ask the court to exercise general jurisdiction over them. Accordingly, if the court may properly exercise personal jurisdiction over the defendants, it must be specific jurisdiction.

A court may exercise specific jurisdiction "where the cause of action arises directly out of, or relates to, the defendant's forum-based contacts." United Elec. Workers, 960 F.2d at 1088-89 (citation omitted). In an effort to assist trial courts in determining whether they may properly exercise specific jurisdiction, the court of appeals for this circuit has formulated a three-part test:

(1) whether the claim "directly arise[s] out of, or relates to, the defendant's forum state activities; (2) whether the defendant's instate contacts represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before ...

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