Virginia Lawyers Weekly//February 28, 2020
Virginia Lawyers Weekly//February 28, 2020//
Where the New Jersey corporation’s contacts with Virginia were not related to the alleged violations of the Lanham Act and did not constitute a “significant and continuous” business relationship in Virginia, personal jurisdiction was found lacking. Moreover, because the evidentiary record was complete, the plaintiff’s request for jurisdictional discovery was denied, as was its request to amend.
ECPI University LLC operates private, for-profit educational institutes online and in several states. It owns the federal trademark “Medical Careers Institute.”
Medical Career Institute Inc., or MCI, is a New Jersey corporation offering professional health care training services. MCI uses the mark “Medical Career Institute” to advertise and promote its goods and services.
ECPI has sued MCI, alleging violations of the Lanham Act due to MCI’s mark. MCI has moved to dismiss for lack of personal jurisdiction or improper venue, or in the alternative, to transfer this action to the District of New Jersey.
To determine whether the court can exercise specific personal jurisdiction, it examines whether (1) the defendant “purposefully availed itself of the privilege of conducting activities” in Virginia, (2) the plaintiff’s claim arose out of the activities directed at Virginia and (3) the exercise of personal jurisdiction would be constitutionally reasonable.
Here, ECPI argues that the court has specific jurisdiction over MCI because MCI received a voluntary accreditation from the Accrediting Bureau of Health Education Schools, or ABHES, a Virginia corporation. ECPI makes various arguments about why MCI’s contacts with ABHES give rise to specific jurisdiction, including MCI’s payment of fees, ABHES’ on-site visits and the practical benefit the accreditation has on MCI. These arguments, however, conflate the specific jurisdiction analysis with the general jurisdiction analysis. ABHES’ accreditation bears no relationship to the alleged conduct, so it does not give rise to specific jurisdiction.
To the extent that ECPI argues MCI’s use of the infringing mark in its accreditation application with ABHES led to the consumer confusion, and thus, to specific jurisdiction, that argument also fails. ABHES has not purchased goods or services from ECPI, and MCI did not use the mark in connection with a sale, distribution, or advertisement of goods or services with ASHES. ECPI’s claims simply do not arise out of the accreditation MCI received from ABHES. Thus, the court lacks specific jurisdiction over MCI.
When a “suit does not arise out of the defendant’s activities in the forum state, the court must exercise general jurisdiction and the requisite minimum contacts between the defendant and the forum state are fairly extensive.” Courts exercise general jurisdiction “when [the defendant’s] affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State.”
ECPI argues that, at a minimum, the ABHES accreditation confers general jurisdiction over MCI. Essentially. ECPI contends that MCP’s relationship with ABHES establishes a “significant and continuous” business relationship in Virginia.
MCI, however, filed an affidavit clarifying its association and contacts with ABHES. MCI originally sought accreditation from ABHES because of a recommendation by a consultant, not because of ABHES’ operations in Virginia. MCI has never visited ASHES’ Virginia office. At most, MCI has annual contact with ABHES when it mails its annual report and sustaining fee. That does not amount to “fairly extensive” contacts necessary to give rise to general jurisdiction. Thus, MCI does not have a continuous or systematic affiliation with Virginia necessary for the court to exercise general jurisdiction over MCI.
The plaintiff requests leave to amend and to conduct jurisdictional discovery.
ECPI points to one connection between MCI and Virginia to establish jurisdiction: MCI’s accreditation with ABHES. ECPI, however, has failed to provide more than hypothetical or speculative allegations about the nature of that business relationship.
Instead, MCI has established that it has limited contact with ABHES that does not give rise to either general or specific jurisdiction and that it does not have any other contacts with Virginia. Even drawing all reasonable inferences in favor of ECPI, MCI has left no specific gaps in the record regarding the nature of its connections with Virginia. Accordingly, the court will deny ECPI’s request for jurisdictional discovery and will not allow ECPI to amend its complaint.
Defendant’s motion to dismiss granted.
ECPI University LLC v. Medical Career Institute Inc., Case No. 19-cv-323, Jan. 29, 2020. EDVA at Richmond (Gibney). VLW 020-3-053. 9 pp.