United States District Court, D. New Mexico
VOLKER STROBEL, HEIKE STROBEL, and HANS BAUR, in their individual capacities and on behalf of UNC Holdings LLC, Plaintiffs,
UWE RUSCH and DR. MABEL RUSCH, Defendants.
MEMORANDUM OPINION AND ORDER
C. BRACK SENIOR U.S. DISTRICT JUDGE
matter is before the Court on the Motion to Dismiss of
Defendants Uwe Rusch and Mabel Rusch Pursuant to Fed.R.Civ.P.
12(b)(2) and Fed.R.Civ.P. 12(b)(3), filed on August 13, 2018.
(Doc. 7.) Having considered the motion, briefs, attached
documents, and relevant law, the Court finds that the motion
should be denied.
2012, Defendant Uwe Rusch (Mr. Rusch) was the sole owner and
member of a Florida limited liability company called UNC-FL.
In furtherance of this business, Mr. Rusch's wife,
Defendant Dr. Mabel Rusch (Dr. Rusch), registered a trademark
in her name. In 2013, Plaintiffs entered into an agreement
with Defendants to become part owners of UNC-FL, and
Plaintiff Volker Strobel (Mr. Strobel) took an active role in
advancing the Florida business. Soon thereafter, the parties
became concerned about Florida's regulatory framework and
decided to dissolve UNC-FL and re-establish the business in
New Mexico under the name UNC-NM. Mr. Strobel and Mr. Rusch
were managers of UNC-NM. In 2015, Mr. Strobel announced to
the parties that the business was struggling and in need of
capital. Thereafter, Defendants took actions that violated
the parties' agreement. Plaintiffs now bring suit for a
variety of tort and contract claims. Defendants argue that
neither jurisdiction nor venue is proper in New Mexico.
are residents of Florida. (Doc. 1 (Compl.) at 1 &
¶¶ 5-6.) In 2012 Mr. Rusch formed UNC-FL, a limited
liability company created to produce and sell cordials (a
type of after-dinner drink). (Id. ¶ 11.) Years
before, Defendants had organized a business in Germany and
registered the trademark CORDIALS V.I.P. DRINKS (the
“V.I.P. Mark” or the “trademark”).
(Id. ¶¶ 12-13.) After forming UNC-FL,
Defendants transferred registration of the trademark from the
German company to Dr. Rusch in her own name. (Id.
Strobel and Plaintiff Heike Strobel (Mrs. Strobel) are
residents of New Mexico. (Id. at 1 &
¶¶ 1-2.) The Strobels met Defendants while
vacationing in Florida in 2012. (Id. ¶ 14.)
Defendants told the Strobels “about the business of
UNC-FL and invited them to invest in UNC-FL's business .
. . .” (Id.; see also Doc. 18-1
¶ 6.) At that time, “Mr. Rusch was the sole record
owner and member of UNC-FL . . . .” (Compl. ¶ 11;
see also Doc. 18-6 at 1.) After the Strobels
returned to New Mexico, Mr. Rusch began to email and call Mr.
Strobel to encourage him to invest in the business. (Doc.
18-1 ¶ 7.) Mr. Rusch visited New Mexico in “April
2012 to discuss several business opportunities, one of which
involved the cordials business . . . .” (Id.
¶ 8.) In June 2012, both Mr. and Dr. Rusch visited New
Mexico to speak with Mr. and Mrs. Strobel about investing in
the cordials business. (Id. ¶¶ 10-11.)
During this visit, Dr. Rusch stated that she would transfer
registration of the V.I.P. Mark from her name to UNC-FL.
(Id. ¶ 11.) Dr. Rusch's consent to transfer
registration of the trademark is memorialized in the
parties' Partnership Agreement. (See Doc. 18-6
at 2 (“Mrs. Mabel Rusch hereby undertakes to convey to
the Holding all rights to the CORDIALS trademark and all
rights to the design and logos of CORDIALS products . . . .
The transfer of ownership of these rights will be initiated
after the signing of this agreement.” The transfer is
“part of the package of CORDIALS rights that Mr. and
Mrs. Rusch are contributing to the Holding.”).) She
also told Plaintiffs that Mr. Rusch “had authority to
speak for her with respect to her ownership of the trademark
and participation in the business.” (Doc. 18-1 ¶
Rusch, Mr. Strobel, and Plaintiff Hans Baur (Mr. Baur) met in
Arizona in early 2013 to discuss the terms of Plaintiffs'
investment in UNC-FL. (Id. ¶ 12.) Thereafter,
Mr. and Dr. Rusch, Mr. and Mrs. Strobel, Mr. Baur, and
another individual who is not a party to this lawsuit,
entered into an agreement to invest in UNC-FL. (Id.;
Compl. ¶ 15.) Over the next year, Mr. Strobel often
traveled to Florida to help Mr. Rusch develop the business.
(Doc. 18-1 ¶ 13.)
parties soon became concerned that Florida's
“regulatory climate was not favorable for the
development and operation of” UNC-FL; therefore, they
decided to dissolve the business in Florida and reestablish
it in New Mexico. (Id.; Compl. ¶ 18.) In 2014,
Mr. Rusch formally terminated UNC-FL, and Mr. Strobel formed
UNC-NM-a continuation of the cordials business- in New
Mexico. (Doc. 18-1 ¶ 14.) Both Mr. Strobel and Mr. Rusch
were managers of UNC-NM, and Mr. Rusch continued to
communicate with Mr. Strobel via phone and email to manage
the business. (Id. ¶¶ 14, 16.) The
business utilized a certified public accountant (CPA) located
in New Mexico, who “had been preparing tax returns for
UNC-FL . . . since 2013, both before and after the”
company relocated to New Mexico. (Id. ¶ 16.)
one year later, Mr. Strobel told the other parties that
UNC-NM needed new capital or the business would fail. (Compl.
¶ 20.) Defendants then ceased communicating with
Plaintiffs about the business. (Id.) Plaintiffs
learned that Dr. Rusch had transferred registration of the
trademark to UNC-NM, but had later transferred it back to her
own name without informing Plaintiffs. (See
Doc. 18-1 ¶ 15; see also Doc. 18-1, Ex. 11.)
Plaintiffs also discovered that, since learning that UNC-NM
was failing, Defendants “have sought investment or
business opportunities from others, based on the
representation that [Dr. Rusch] owned the V.I.P. Mark and
they owned the beverage business associated with the V.I.P.
Mark.” (Compl. ¶ 21.) Plaintiffs assert that
Defendants' actions have infringed upon UNC-NM's
rights in the trademark and caused damage to Plaintiffs.
(Id.) Plaintiffs filed suit against Defendants in
this Court in July 2018. (See Compl.) Defendants now
move to dismiss for lack of personal jurisdiction and venue.
(See Doc. 7.)
to dismiss brought under Federal Rule of Civil Procedure
12(b)(2) test a plaintiff's theory of personal
jurisdiction as well as the facts supporting personal
jurisdiction. . . . When a defendant challenges the
court's jurisdiction, the plaintiff bears the burden of
demonstrating that jurisdiction exists.” Davis v.
USA Nutra Labs, No. CV 15-01107 MV/SCY, 2016 WL 9774945,
at *3 (D.N.M. Dec. 21, 2016) (citing McNutt v. Gen.
Motors Acceptance Corp., 298 U.S. 178, 189 (1936);
Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th
Cir. 1995)). “Plaintiff's burden is light in the
early stages of litigation before discovery.”
Arnold v. Grand Celebration Cruises, LLC, No. CV
17-685 JAP/KK, 2017 WL 3534996, at *3 (D.N.M. Aug. 16, 2017)
(citing Wenz, 55 F.3d at 1505).
there is no evidentiary hearing and the jurisdictional
question is decided on the parties' affidavits and
written materials, Plaintiff need only make a prima facie
showing of personal jurisdiction.” Id. (citing
Wenz, 55 F.3d at 1505). “The plaintiff may
make the required prima facie showing by coming forward with
facts, via affidavit or other written materials, that would
support jurisdiction over the defendant if true.”
Davis, 2016 WL 9774945, at *3 (citing OMI
Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d
1086, 1091 (10th Cir. 1998)). “The Court accepts as
true all well-pleaded facts (that are plausible,
non-conclusory, and non-speculative) alleged by Plaintiff
unless Defendant controverts those facts by affidavit.”
Arnold, 2017 WL 3534996, at *3 (citing Shrader
v. Biddinger, 633 F.3d 1235, 1248 (10th Cir. 2011)).
“The Court resolves factual disputes in the
parties' affidavits in Plaintiff's favor.”
Id. (citing Dudnikov v. Chalk &
Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070
(10th Cir. 2008)).
Plaintiffs have met their burden to show that the Court may
exercise personal jurisdiction over Defendants.
Fourteenth Amendment's Due Process Clause requires that a
defendant be subject to a court's personal jurisdiction
before a judgment can be rendered against it.”
Davis, 2016 WL 9774945, at *3 (citing World-Wide
Volkswagen v. Woodson, 444 U.S. 286, 301 (1980)).
“To obtain personal jurisdiction over a nonresident
defendant in a diversity action, a plaintiff must show that
jurisdiction is legitimate under the laws of the forum state
and that the exercise of jurisdiction does not
offend the due process clause of the Fourteenth
Amendment.” Id. (quoting Far W. Capital,
Inc. v. Towne, 46 F.3d 1071, 1074 (10th Cir. 1995)
(internal citation omitted)).
New Mexico, a federal court has personal jurisdiction over a
nonresident defendant only to the extent that the state's
long-arm statute permits.” Id. (citing
Fid. & Cas. Co. v. Phila. Resins Corp., 766 F.2d
440, 442 (10th Cir. 1985), cert. denied, 474 U.S.
1082 (1986)). New Mexico's long-arm statute
“‘extends the jurisdictional reach of New Mexico
courts as far as constitutionally permissible,' such that
jurisdiction is authorized by the long-arm statute only if it
is permitted under the Due Process Clause.”
Id. (quoting Tercero v. Roman Catholic
Diocese, 48 P.3d 50, 54 (N.M. 2002) (internal citation
omitted); citing Trujillo v. Williams, 465 F.3d
1210, 1217 (10th Cir. 2006)). “To satisfy Due Process
requirements, the defendant must have (1) sufficient minimum
contacts with the forum state (2) such that the maintenance
of the suit does not offend ‘traditional notions of
fair play and substantial justice.'” McManemy
v. Roman Catholic Church of Diocese of Worcester, 2
F.Supp.3d 1188, 1198 (D.N.M. 2013) (quoting Int'l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(internal citations omitted)).
Defendants have sufficient minimum contacts with New
plaintiff satisfies the ‘minimum contacts' standard
by showing that the court may exercise either general or
specific jurisdiction over the defendant.” Id.
at 1199 (citing Helicopteros Nacionales de Colom., S.A.
v. Hall, 466 U.S. 408, 414 (1984)). “Plaintiffs
rely on specific jurisdiction as a basis for satisfying their
burden . . . .” (Doc. 18 at 12.) “In contrast to
general, all-purpose jurisdiction, specific jurisdiction is
confined to adjudication of issues deriving from, or
connected with, the very controversy that establishes
jurisdiction.” Goodyear Dunlop Tires Operations,
S.A. v. Brown, 564 U.S. 915, 919 (2011) (quotation marks
and citation omitted). “[T]o exercise specific
jurisdiction over a defendant, (1) the defendant must have
‘minimum contacts' with the forum state such that
he ‘should reasonably anticipate being haled into
court' there, and (2) jurisdiction must comport with
‘traditional notions of fair play and substantial
justice.'” Segovia v. Rodriguez, No.
2:17-cv-00609-BRB-GBW, 2017 WL 4480131, at *2 (D.N.M. Oct. 6,
2017) (quoting Monge v. RG Petro-Mach. (Grp.) Co.,
701 F.3d 598, 613 (10th Cir. 2012) (internal quotation
determine whether a defendant has minimum contacts with the
forum state in the tort context, courts consider
“whether the nonresident defendant ‘purposefully
directed' its activities at the forum state . . .
.” Dudnikov, 514 F.3d at 1071 (citations
omitted). “[I]n contract cases, meanwhile, [courts]
sometimes ask whether the defendant ‘purposefully
availed' itself of the privilege of conducting activities
or consummating a transaction in the forum state.”
Id. (citations omitted). Regardless of context,
“the shared aim of [the] ‘purposeful
direction' doctrine . . . [is] to ensure that an
out-of-state defendant is not bound to appear to account for
merely ‘random, fortuitous, or attenuated contacts'
with the forum state.” Id. (quoting Burger
King v. Rudzewicz, 471 U.S. 462, 475 (1985) (internal
quotations omitted) (alteration in original)). The Court must
also determine “whether the plaintiff's claim
arises out of or results from ‘actions by the defendant
himself that create a substantial connection with
the forum state.'” OMI, 149 F.3d at 1091
(quoting Asahi Metal Ind. Co. v. Super. Ct. of Cal.,
480 U.S. 102, 109 (1987) (internal quotations omitted)).
Plaintiffs bring claims sounding in tort and in contract.
(See Compl.) Under either standard-purposeful
direction or purposeful availment-the Court finds that
Defendants have minimum contacts with New Mexico sufficient
to exercise personal jurisdiction over them.
assert that Dr. Rusch purposefully directed her activities at
the state because she:
• traveled to New Mexico to meet with Plaintiffs
“specifically for the purpose of securing their
investment and participation in the cordials business”
(Doc. 18 at 13; Compl. ¶ 9);
• “participated in the organization and management
of UNC-NM” and “consciously availed [herself]
of the advantages of transacting business in ...