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Emory Group, LLC v. South By Sea, LLC

United States District Court, D. South Carolina, Greenville Division

February 29, 2016

EMORY GROUP, LLC, Plaintiff,
v.
SOUTH BY SEA, LLC, d/b/a/ Shirts for Greeks, and BRANDON METCALF Defendants.

MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS’ MOTION TO DISMISS

MARY GEIGER LEWIS UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

This case was filed as a copyright infringement action. In the Amended Complaint, Plaintiff Emory Group, LLC (Plaintiff), brings two claims against Defendant South by Sea, LLC (Defendant SBS) and its owner, Defendant Brandon Metcalf (Defendant Metcalf) (collectively, Defendants): (1) infringement of fifty of Plaintiff’s copyrighted designs, and (2) Federal Unfair Competition. The Court has jurisdiction over the matter under 28 U.S.C. § 1331.

Pending before the Court is Defendants’ Motion to Dismiss for Want of Personal Jurisdiction. Having carefully considered the motion, the response, the replies, the record, and the relevant law, it is the judgment of this Court that Defendants’ Motion to Dismiss for Want of Personal Jurisdiction will be denied.

II. FACTUAL AND PROCEDURAL HISTORY

There are very few facts that are either established or pertinent to the Court’s deciding upon Defendants’ Motion to Dismiss. Suffice it to say that the parties are competitors in the area of collegiate apparel and, as set forth herein, Plaintiff alleges that Defendants have infringed on some of its copyrighted designs.

After Plaintiff filed its Amended Complaint, it filed a Motion for a Preliminary Injunction. Soon thereafter, Defendants filed this Motion to Dismiss, Plaintiff filed its Response, Defendants filed their reply, and Plaintiff filed its sur reply. Consequently, Defendants’ Motion to Dismiss is now ripe for review.

III. STANDARD OF REVIEW

Because this court must exercise personal jurisdiction in the manner provided by state law, the court must first determine if South Carolina law would authorize jurisdiction over the defendants. If South Carolina law would permit jurisdiction, then the Court is required to decide whether exercise of jurisdiction is consistent with the Due Process Clause of the Fourteenth Amendment. ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 622 (4th Cir. 1997). South Carolina’s long-arm statute, SC Code Ann. § 36-2-803, has been interpreted to reach the outer bounds permitted by the Due Process Clause. Id. Therefore, the district court’s inquiry is whether the activities of the defendants were such that the court’s exercise of jurisdiction over them would comport with due process. See Stover v. O’Connell Assocs., Inc., 84 F.3d 132, 135-36 (4th Cir. 1996). When deciding if personal jurisdiction exists, the Court views the facts in the light most favorable to the plaintiff. Carefirst of MD, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003).

A district court’s exercise of jurisdiction over a nonresident defendant comports with due process when the defendant has “minimum contacts with the forum, such that to require the defendant to defend its interests in that state does not offend traditional notions of fair play and substantial justice.” Id. at 397 (citation omitted) (internal quotation marks omitted). The district court’s inquiry regarding whether personal jurisdiction exists varies “depending on whether the defendant’s contacts with the forum state also provide the basis for the suit.” Id. In such a case, the court considers whether it has “specific” jurisdiction over the defendant by considering the following: “(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state; (2) whether the plaintiff[’s] claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.’” Id. (citation omitted). In certain circumstances, South Carolina’s long-arm statute will permit personal jurisdiction over individual defendants based on actions of an individual nonresident employee, officer, or director of a corporation. See Columbia Briargate Co. v. First Nat’l Bank, 713 F.2d 1052 (4th Cir. 1983).

In the Internet context, the Fourth Circuit has held that a district court sitting in diversity and seeking to determine whether it has specific jurisdiction over a defendant “may, consistent with due process, exercise judicial power over a person outside of the State when that person (1) directs electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity creates, in a person within the State, a potential cause of action cognizable in the State’s courts.” ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 714 (4th Cir. 2002).

One “who simply places information on the Internet does not subject himself to jurisdiction in each State into which the electronic signal is transmitted and received. Such passive Internet activity does not generally include directing electronic activity into the State with the manifested intent of engaging business or other interactions in the State thus creating in a person within the State a potential cause of action cognizable in courts located in the State.” Id. “[S]pecific jurisdiction in the Internet context may be based only on an out-of-state person’s Internet activity directed at [South Carolina] and causing injury that gives rise to a potential claim cognizable in [South Carolina].” Id.

Lacking “specific jurisdiction, ” the court may consider whether it has “general jurisdiction” over the nonresident. General jurisdiction exists when the defendants’ contacts with the state are not the basis for the suit, but defendants’ contacts with the state afford jurisdiction because they are “general [and] more persistent.” Carefirst, 334 F.3d at 397. To establish general jurisdiction, “the defendant’s ...


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