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June 29, 1999


The opinion of the court was delivered by: Urbina, District Judge.

Denying Without Prejudice Motion to Dismiss Sunmatch's Amended
  Counterclaims Against Jewett-Cameron and MSI-Pro; Granting
  Sunmatch Discovery on Alter-Ego Issue; Granting Material Supply
  International's Motion for First-Use and Expert Discovery


These matters come before the court upon a motion to dismiss the counterclaims asserted by defendant Sunmatch Industrial Company, Limited ("Sunmatch") against MSI-Pro Company, Incorporated ("MSI-Pro") and Jewett-Cameron Lumber Corporation ("Jewett"). Sunmatch has not alleged that MSI-Pro or Jewett wronged Sunmatch or had any contacts with the District of Columbia ("District"). Rather, Sunmatch seeks to impute the jurisdictional contacts of the plaintiff, Material Supply International, Inc. ("MSI") to MSI-Pro and Jewett on the ground that they were MSI's successor and alter-ego, respectively. Because MSI-Pro and Jewett deny that these entities were the alter egos of MSI, they contend that MSI's jurisdictional contacts should not be imputed to them. Accordingly, MSI-Pro and Jewett ask the court to dismiss the counterclaims for lack of personal jurisdiction and for failure to state a claim.

After reviewing Sunmatch's amended counterclaims, the submissions of the parties and the relevant law, the court concludes that the motion to dismiss will be denied without prejudice. For the reasons which follow, Sunmatch shall be afforded discovery bearing on its contention that MSI-Pro and Jewett are the alter egos of MSI. Following discovery, MSI-Pro and Jewett shall file dispositive motions in accordance with the timetable set forth in the attached order.


  A. The Contract and Trademark Disputes between MSI and

Defendant Sunmatch is a company based in Taipei, Taiwan, that manufactures pneumatic tools under the trademark "Suntech."*fn1 The plaintiff, MSI, is an Oregon corporation with its principal place of business in Portland which entered into an exclusive licensing agreement with Sunmatch to sell Suntech tools in the United States. The agreement, effective from December 1985 through November 1990, stated that Sunmatch would supply MSI with "Suntech" tools for sale in all of North America and Hawaii. Am. Counterclaim ¶ 93. After marketing and selling Sunmatch's Suntech tools in the U.S. for several years, MSI filed for and obtained registration of the Suntech trademark in October 1991, without Sunmatch's consent or knowledge. Id. ¶ 94. Upon discovering this, Sunmatch filed a petition with the Trademark Trial and Appeals Board ("TTAB") to cancel MSI's registration. In March 1994, the TTAB granted summary judgment to Sunmatch and issued Cancellation No. 20,482.

By amended complaint filed in June 1994, MSI sought review of the TTAB's decision and asserted additional causes of action against Sunmatch.*fn2 Sunmatch answered and asserted counterclaims against MSI in September 1994.

  B. First Trial on Contract and Trademark Claims between MSI
    and Sunmatch

The claims between MSI and Sunmatch were tried in February 1996. The court affirmed the TTAB and concluded that Sunmatch was the owner of the Suntech trademark, primarily because it found that Sunmatch was the first to use that name. The court therefore dismissed MSI's claims for trademark infringement, common-law unfair competition, injunctive relief and fraud on the Patent and Trademark Office ("PTO"), pursuant to Fed. R.Civ.P. 50(a).

The court presented its conclusion that Sunmatch was the owner of the trademark to the jury and instructed it to deliberate on the remainder of the claims. The jury upheld MSI's claim against Sunmatch for breach of fiduciary duty, for which it awarded MSI $50,000 in compensatory and $100,000 in punitive damages, but it rejected MSI's claims for fraud and breach of contract. The jury upheld Sunmatch's counterclaims for trademark infringement, fraud on the PTO and breach of contract, for which it awarded Sunmatch $908,500. The jury rejected Sunmatch's counterclaims for unfair competition under federal and state law.

This court entered judgment pursuant to these verdicts in March 1996. After considering post-judgment motions, the court issued an opinion and order in May 1997.

C. Appeal from First MSI-Sunmatch Trial

  D. The Joinder of Counterclaim Defendants MSI-Pro and

On April 1, 1996, approximately one month after the conclusion of the first trial, plaintiff MSI's parent company, Jewett, incorporated MSI-Pro, Inc., an Oregon corporation importing, distributing and retailing industrial tools. Mot. to Dis., Ex. 1; Mot. to Join MSI-Pro and Jewett filed Sept. 8, 1997 ("Mot. to Join"). On August 9, 1996, MSI merged its operations into MSI-Pro and became an inactive corporation. Mot. to Join, Ex. 2. Sunmatch alleges that MSI transferred all its assets to MSI-Pro, but none of its submissions say so in so many words.

In September 1997, Sunmatch filed a motion to join MSI-Pro and Jewett as counterclaim defendants pursuant to Fed. R.Civ.P. 25(c). This court granted the motion in December 1998.

E. Sunmatch's Counterclaims against MSI-Pro and Jewett

On January 4, 1999, Sunmatch filed an amended counterclaim against MSI-Pro and Jewett. Sunmatch alleged that MSI-Pro and Jewett are jointly and severally liable for MSI's wrongful acts. On February 19, 1999, MSI-Pro and Jewett filed a joint motion to dismiss Sunmatch's counterclaims. They contend that because they are not MSI's alter-egos, the court lacks personal jurisdiction and must dismiss the counterclaims against them.

Although "[f]indings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12," Fed.R.Civ.P. 52(a); Summers v. DOJ, 140 F.3d 1077, 1079-80 (D.C.Cir. ...

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