Opinion ID: 4530282
Heading Depth: 2
Heading Rank: 2

Heading: The Adequacy of Saleh’s Allegations

Text: Applying these standards, we conclude that the complaint before us does not establish that a justiciable case or controversy exists. 11 As a preliminary matter, the parties dispute which allegations we may properly consider. Several of the allegations in the FAC relate to activities that appear to have taken place after the filing of the original complaint. The district court concluded that these allegations were not relevant to the question of jurisdiction because “post-complaint facts cannot create jurisdiction where none existed at the time of [the original] filing.” Saleh, 2019 WL 3711770, at . Sulka Trading similarly argues on appeal that these allegations cannot be relied upon to establish jurisdiction because “the jurisdiction of the court depends upon the state of things at the time of the action brought.” Appellees’ Br. 19 (quoting Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 570 (2004)). Saleh, in turn, points out that “when a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts look to the amended complaint to determine jurisdiction.” Appellant’s Reply Br. 11 (quoting Rockwell Int’l Corp. v. United States, 549 U.S. 457, 473–74 (2007)). Although we have discussed the question in dicta, see Travelers Ins. Co. v. 633 Third Assocs., 973 F.2d 82, 87–88 (2d Cir. 1992), we have never squarely addressed whether events occurring after the filing of a complaint may cure a jurisdictional defect that existed at the time of initial filing. That question has 12 divided our sister circuits. 7 We need not answer it here, however, because even the expanded allegations in the FAC are insufficient to confer jurisdiction. We therefore assume, solely for the purpose of deciding this appeal, that these allegations are relevant to the existence of subject-matter jurisdiction. As previously noted, to permit the exercise of federal jurisdiction over this declaratory judgment action, Saleh was required to plead that he “has engaged in a course of conduct evidencing a definite intent and apparent ability to commence use of the marks on the product.” Starter, 84 F.3d at 595–96. The parties agree that, to satisfy this test, Saleh must allege that he is prepared to sell products bearing the SULKA mark in the United States. Virtually all of the conduct alleged in the FAC, however, relates to Saleh’s business activities in 7 Compare Scahill v. District of Columbia, 909 F.3d 1177, 1184 (D.C. Cir. 2018); United States ex rel. Gadbois v. PharMerica Corp., 809 F.3d 1, 6 n.2 (1st Cir. 2015); Northstar Fin. Advisors Inc. v. Schwab Invs., 779 F.3d 1036, 1044 (9th Cir. 2015); Feldman v. Law Enf’t Assocs. Corp., 752 F.3d 339, 347 (4th Cir. 2014); Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1337 (Fed. Cir. 2008); and Wilson v. Westinghouse Elec. Corp., 838 F.2d 286, 290 (8th Cir. 1988) (holding that postcomplaint facts alleged in a supplemental pleading may cure jurisdictional defects), with Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586, 593 (5th Cir. 2015); S. Utah Wilderness All. v. Palma, 707 F.3d 1143, 1153 (10th Cir. 2013); and Innovative Therapies, Inc. v. Kinetic Concepts, Inc., 599 F.3d 1377, 1383–84 (Fed. Cir. 2010); Park v. Forest Serv. of U.S., 205 F.3d 1034, 1037 (8th Cir. 2000) (holding that jurisdiction cannot be based on events subsequent to the filing of the original complaint). 13 India and Thailand. App’x 200–01. Saleh alleges that he “could” expand his business to cover the United States, App’x 201, but does not allege that he has taken any steps whatsoever to do so. It is not enough for Saleh to aver that he has the intent and ability to enter the U.S. market; he must point to specific conduct on his part that evidences such intent and ability. He has not done so. To be sure, a party’s business activities abroad might be relevant to a determination that the party is ready and able to expand into the United States. The district court’s assertion that “foreign activity alone does not tend to create jurisdiction in the United States,” Saleh, 2019 WL 3711770, at , should not be understood to mean that allegations of foreign activity are never enough to confer jurisdiction. Our cases impose no such bright-line test for jurisdiction under the Declaratory Judgment Act. We eschew prescribing acts that must be alleged to satisfy the case or controversy requirement and prefer to examine each case on its merits. Here, Saleh’s proposed plans are too nebulous and ephemeral to support the conclusion that he has “engaged in a course of conduct evidencing a definite intent and apparent ability,” Starter, 84 F.3d at 596 (emphasis added), to sell his products in the United States. Saleh alleges that he might use his existing 14 shipper, or he might contract with a different shipper; he might process payments through PayPal, or perhaps a different processor; he might contract with unnamed and unspecified “additional on-line portals” to sell his wares. App’x 201. These hypothetical possibilities, without tangible steps to effectuate those plans, are not enough to create a “definite and concrete” dispute between the parties. MedImmune, 549 U.S. at 127. Nor do the more detailed allegations in Saleh’s declaration, submitted in opposition to the motion to dismiss, fix this fundamental problem. Although Saleh claims to have “conduct[ed] market research,” “travel[ed] to meet potential suppliers,” and “identif[ied] leather goods manufacturers,” App’x 237–38, he does not specify whether those exploratory activities were directed at the United States or merely at India and Thailand. The only allegation that does relate to the U.S. market is Saleh’s “[a]pplication to register the SULKA mark in the United States.” App’x 200. While this allegation is certainly relevant to the matter of Saleh’s intent, it has little bearing on his ability to transition his business to the United States. And there were significant reasons for the district court to be skeptical that Saleh was, in fact, prepared to enter the U.S. market. For example, as of the date that the 15 First Amended Complaint was filed, Saleh was not in possession of any actual shirts bearing the SULKA mark. His website, which purported to offer such shirts for sale, simply digitally added the mark to images of the shirts. Only after Saleh filed his opposition to the motion to dismiss did he represent that he had finally received “samples” of the actual shirts from his supplier. App’x 239. That Saleh lacked any inventory for months after this lawsuit was filed undermines his assertion that he would be able to quickly transition his business to the United States. And the revelation that Saleh had not even received samples of the final product calls into question the allegation in the First Amended Complaint that he had already sold an unspecified number of “t-shirts bearing the SULKA label to a customer in India.” App’x 84. We are mindful, of course, that a declaratory judgment plaintiff need not “bet the farm, so to speak,” by actually infringing the mark in question prior to filing suit. MedImmune, 549 U.S. at 129. But Saleh’s conduct here falls short of the kind of preliminary activity that we and other courts have found sufficient to uphold declaratory judgment jurisdiction. For example, in Starter, we found an actual case or controversy existed where the plaintiff had not only “designed styles and prepared prototype shoes”—as Saleh appears to have done with his 16 shirts—but also “conducted a consumer survey; made strategic decisions regarding who should manufacture the shoes; hired an external licensing agent; and attempted to find a manufacturing partner.” 84 F.3d at 596. Saleh, in contrast, does not allege, for example, that he has conducted any market research relating to the United States, nor has he made any concrete plans about how his products will find their way to customers here. Similarly, in Gelmart Industries, Inc. v. Eveready Battery Co., 120 F. Supp. 3d 327 (S.D.N.Y. 2014), the district court found declaratory judgment jurisdiction appropriate where the plaintiff “ha[d] long-standing relationships with suppliers and manufacturers located in China, Indonesia, India, Bangladesh and the Philippines, with the ability to manufacture and supply product to the U.S. market-place within weeks” and “ha[d] pitched the product concept to major retailers and held multiple discussions, design and branding meetings based on retailer interest.” Id. at 332. Saleh does not allege that his brand-new company has undertaken similar levels of marketing or sales outreach. We emphasize that we do not mean to imply that any particular action or combination of actions is always necessary to find that a case or controversy exists. For example, because he intends to start an online store, Saleh may not 17 need to cultivate relationships with retail partners. Nor do we hold that Starter or any other case sets out the bare minimum that a plaintiff must do before a declaratory judgment action can be maintained, for each case must be judged on its own merits. See MedImmune, 549 U.S. at 127 (“Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”). We discuss these cases only to highlight the comparative paucity of Saleh’s allegations. Before a court may entertain an action for declaratory relief in the context of trademarks, the plaintiff must allege that he has taken some action showing that he has both the “definite intent and apparent ability to commence use of the marks on the product.” Starter, 84 F.3d at 596. The allegations in the FAC do not meet that burden. 8