Appendix – Unpublished Cases

Case: 1:20-cv-00512 Document #: 46-1 Filed: 04/27/20 Page 1 of 29 PageID #:245
Abbott Laboratories v. Selfcare, Inc., Not Reported in F.Supp.2d (1999)

1999 WL 162805

 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1

KeyCite Yellow Flag - Negative Treatment

Distinguished by Laboratories v. Teva Pharmaceuticals USA, Inc., N.D.Ill.,

November 12, 2008

1999 WL 162805

Only the Westlaw citation is currently available.

United States District Court,

N.D. Illinois, Eastern Division.

ABBOTT LABORATORIES, Plaintiff,

v.

SELFCARE, INC., Princeton Biomeditech

Corporation, and PBM–Selfcare, L.L.C., Defendants.

No. 98 C 7102.

|

March 15, 1999.

MEMORANDUM OPINION

GRADY, District J.

*1 Before the court is defendant's motion to dismiss or

transfer. For the reasons explained below, the motion to

transfer is granted.

BACKGROUND

All of the parties to this case engage in the business of home

pregnancy tests that employ immunoassay technology. This

technology allows consumers to detect the presence of a

pregnancy hormone in a woman's urine. Apparently, each side

believes that the other's product has infringed its patents.

On April 17, 1998, Abbott Laboratories (“Abbott”) filed

a complaint in the United States District Court for the

District of Massachusetts (the “Massachusetts district court”)

against two of the defendants in the instant case, Selfcare,

Inc. (“Selfcare”) and Princeton Biomeditech Corporation

(“PBM”). 1 The Massachusetts lawsuit involves United

States Patent No. 5,654,162 (the “ '162 patent”) and United

States Patent No. 5,073,484 (the “ '484 patent”). Abbott

alleged that defendants had infringed those patents by

manufacturing and marketing a variety of home pregnancy

tests that use immunoassay technology.

On August 5, 1998, the Massachusetts district court denied

Abbott's motion for a preliminary injunction. In doing so,

it relied upon pleadings, affidavits, and memoranda of law,

and heard oral argument. Abbott Lab. v. Selfcare, Inc., 17

F.Supp.2d 43, 45 (D.Mass.1998). On October 23, 1998,

defendants filed a motion for leave to amend their answer and

counterclaim to assert that Abbott had infringed two patents

owned by PBM–Selfcare, United States Patent No. 5,559,041

(the “ '041 patent”) and United States Patent No. 5,728,587

(the “ '587 patent”). The motion also sought leave to add

PBM–Selfcare as a co-counterplaintiff. That motion is still

pending before the Massachusetts district court.

On November 5, 1998, a day before it filed a response to that

motion, Abbott Laboratories filed this declaratory judgment

action. It seeks a declaration that the '041 patent and the '587

patent, the subjects of defendants' proposed counterclaim in

the Massachusetts lawsuit, are invalid.

On December 7, 1998, defendants moved to dismiss or

transfer this action. We indicated at a subsequent status

hearing that we would be unlikely to dismiss the case, and

directed the parties to file memoranda on the issue of transfer,

with a particular focus on the likelihood of duplication of

effort or inconsistent rulings.

DISCUSSION

“For the convenience of parties and witnesses, in the

interest of justice, a district court may transfer any civil

action to any other district or division where it might

have been brought.” 28 U.S.C. § 1404(a). In other words,

transfer is appropriate where: “(1) venue is proper in both

the transferor and transferee court; (2) transfer is for the

convenience of the parties and witnesses; and (3) transfer is

in the interest of justice.” Law Bulletin Publ'g, Co. v. LRP

Publications, Inc., 992 F.Supp. 1014, 1017 (N.D.Ill.1998)

(citing Vandeveld v. Christoph, 877 F.Supp. 1160, 1167

(N.D.Ill.1995). Because the parties agree that venue is proper

in both Massachusetts and Illinois, we need only address the

second and third elements. Because the interests of justice

“may be determinative in a particular case, even if the

convenience of the parties and witnesses might call for a

different result,” we begin our discussion there. See Coffey v.

Van Dorn Iron Works, 796 F.2d 217, 220 (7th Cir.1986).

A. Interests of Justice

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Abbott Laboratories v. Selfcare, Inc., Not Reported in F.Supp.2d (1999)

1999 WL 162805

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*2 When a case is transferred to a district in which a

related case is pending, the expectation is that the two

cases will be consolidated pursuant to Rule 42(a) of the

Federal Rules of Civil Procedure, if practicable. Waller v.

Burlington N. R.R. Co., 650 F.Supp. 988, 991 (N.D.Ill.1987).

Consolidation not only conserves scarce judicial resources,

but also reduces the resources ultimately expended by the

litigants. Keppen v. Burlington N. R.R. Co., 749 F.Supp.

181, 183–84 (N.D.Ill.1990). By preventing duplicative efforts

on the part of both the courts and the parties, transfer and

subsequent consolidation serve the interests of justice within

the meaning of the venue transfer statute. As the Supreme

Court has acknowledged, “[t]o permit a situation in which two

cases involving precisely the same issues are simultaneously

pending in different District Courts leads to the wastefulness

of time, energy and money that § 1404(a) was designed

to prevent.” Continental Grain Co. v. Barge FBL–585, 364

U.S. 19, 26 (1960). Transfer of venue also curbs the risk of

inconsistent judgments. Countryman v. Stein Roe & Farnham,

681 F.Supp. 479, 484 (N.D.Ill.1987). These concerns have led

this district to adopt “a strong policy in favor of transferring a

case to the district where a related action is pending.” Keppen,

749 F.Supp. at 184.

The existence of the pending related action in Massachusetts

persuades us to transfer this case. Abbott argues that the

actions differ because the Massachusetts lawsuit involves

its patents while this action involves Selfcare's patents. 2

The two actions, even though directed to different patents,

involve the same parties and substantially similar technology.

They also involve similar complex factual and legal questions

that will require the expenditure of considerable time and

effort. Requiring two courts to devote limited resources

educating themselves about the same underlying technology

would undermine values of judicial economy. By holding

a preliminary injunction hearing, the Massachusetts district

court has already familiarized itself with this technology.

There is no reason we should duplicate those efforts. Abbott

also argues that additional discovery in these intertwined

actions would “bog the parties down,” but fails to persuade

us that this would occur. Appropriate case management will

avoid any such problem.

In addition, we do not wish to risk conflicting rulings. Abbott

argues that the Massachusetts district court has not indicated

that it intends to hold a Markman hearing, but that fact

does not assuage our concerns. First, that court's present

disinclination to hold a hearing does not mean that such a

hearing will never take place. Second, we can imagine many

identical issues that might arise in each court, quite apart from

Markman issues. For example, the discovery process might

produce unseemly confusion or conflict between the courts. 3

B. Convenience

*3 Normally, the moving party must show that the transferee

court is more convenient. Heller Fin., Inc. v. Midwhey Powder

Co., Inc., 883 F.2d 1286, 1293 (7th Cir.1989); Chemical

Waste Management, Inc. v. Sims, 870 F.Supp. 870, 876

(N.D.Ill.1994). In determining whether the moving party has

met its burden, the court should consider: (1) plaintiff's forum

choice; (2) the situs of material events; (3) ease of access to

evidence; (4) convenience of witnesses; and (5) convenience

of the parties. College Craft Cos., Ltd. v. Perry, 889 F.Supp.

1052, 1054 (N.D.Ill.1995); Chemical Waste, 870 F.Supp. at

876.

Here, however, there is no indication that the relative

conveniences favor one forum over the other. The two actions

will likely involve many of the same witnesses and much

common documentary evidence. Discovery will occur at the

appropriate locations under the Rules, regardless of where the

cases are pending.

The interests of justice render the plaintiff's choice of

forum, and the corresponding “first-to-file” doctrine, largely

irrelevant. Abbott correctly points out that the doctrine

applies to declaratory judgment actions in patent cases.

Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 938

(Fed.Cir.1993). Nonetheless, where the interests of justice,

especially “considerations of judicial and litigant economy,”

demand it, the trial court has discretion to dismiss a firstfiled action. Serco Servs. Co., L.P. v. Kelley Co., Inc., 51 F.3d

1037, 1039 (Fed.Cir.1995) (citation omitted). By extension,

considerations of judicial economy warrant transfer, a far less

drastic remedy than dismissal. 4

CONCLUSION

For the foregoing reasons, we grant defendant's motion

to transfer, which renders moot the defendant's alternative

motion to dismiss. Pursuant to 28 U.S.C. § 1404(a), this case

will be transferred to the United States District Court for the

District of Massachusetts.

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Abbott Laboratories v. Selfcare, Inc., Not Reported in F.Supp.2d (1999)

1999 WL 162805

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All Citations

Not Reported in F.Supp.2d, 1999 WL 162805

Footnotes

1 PBM–Selfcare, L.L.C., a subsidiary of the two named defendants and the third defendant in this case, was not named

in that action.

2 Abbott further argues that the immunoassay technology is extremely common, and this scientific process has been the

subject of many federal cases. Contrary to Abbott's implication, however, our holding today is not precedent for the

transfer of all cases involving this technology, regardless of the identity of the parties and the existence of a relationship

between the patents, to the Massachusetts district court. Nor would our ruling today require all unrelated cases between

these particular parties to go before the Massachusetts district court. It addresses only the facts of this case, which involve

the same parties' claims regarding substantially similar patent issues.

3 The parties' submissions on this motion illustrate this example. They appear to differ strongly over whether a discovery cutoff for March 31, 1999, exists in the Massachusetts action. Because any dispute over discovery in that lawsuit is properly

before the Massachusetts district court, we take no position on it here. We only note that, were we to do so, we might

well risk coming into conflict with a subsequent order by the Massachusetts district court on precisely the same issue.

4 Because the interests of justice are determinative of this case, we need not resolve the parties' dispute over which party

filed first. The dispute seems to depend largely on whether the Massachusetts district court grants defendant's motion for

leave to file a counterclaim in that action. For the purposes of this motion only, we assume that Abbott's instant declaratory

judgment action was the first to be filed.

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Case: 1:20-cv-00512 Document #: 46-1 Filed: 04/27/20 Page 4 of 29 PageID #:248
Aland v. Kempthorne, Not Reported in F.Supp.2d (2007)

2007 WL 4365340

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2007 WL 4365340

Only the Westlaw citation is currently available.

United States District Court,

N.D. Illinois,

Eastern Division.

Robert H. ALAND, Plaintiff,

v.

Dirk KEMPTHORNE, et al., Defendants.

No. 07-CV-4358.

|

Dec. 11, 2007.

Attorneys and Law Firms

Robert H. Aland, Winnetka, IL, pro se.

Coby H. Howell, U.S. Attorney's Office, Portland, OR, Kurt

N. Lindland, United States Attorney's Office, Chicago, IL, for

Defendants.

MEMORANDUM OPINION AND ORDER

JAMES B. ZAGEL, District Judge.

I. Introduction

*1 This matter is before the Court on Motion to Transfer

Venue pursuant to 28 U.S.C. § 1404(a), filed by H. Dale

Hall, U.S. Fish and Wildlife Service Director, and Dirk

Kempthorne, Secretary of the Interior (collectively “Federal

Defendants”) on September 4, 2007. Defendants seek to

transfer the case to the District of Idaho for the sake of

judicial economy, convenience, and so the present case may

be coordinated with a related case pending in the United

States District Court for the District of Idaho. Plaintiff filed

an objection to the Motion to Transfer and Defendants filed

a reply in support of their Motion. I allowed Plaintiff to file

a short sur-reply, which I have read and considered. For the

following reasons, Defendants' motion is granted and the case

shall be transferred to the District of Idaho.

II. Background

This cause of action arises out of a challenge to the U.S.

Fish and Wildlife Service's (“FWS”) grizzly bear Final

Rule (“Final Rule”). 72 Fed.Reg. 14866 et seq. (Mar. 29,

2007) (to be codified at 50 C.F.R. pt. 17). The Final Rule,

effective April 30, 2007, designated grizzly bears in the

Greater Yellowstone Area (“GYA”) and surrounding area as

a distinct population segment (“DPS”) pursuant to 16 U.S.C.

§ 1532(16) and thereby removed that DPS from the list of

threatened and endangered species under the Endangered

Species Act of 1973 (“ESA”), as set forth in 50 C.F.R. § 17.11.

On August 2, 2007, Plaintiff filed this suit for declaratory and

preliminary and permanent injunctive relief under the citizen

suit provision of the ESA, 16 U.S.C. § 1540(g)(1), and the

Administrative Procedure Act (“APA”), 5 U.S.C §§ 551-706,

seeking to declare invalid and enjoin the implementation of

the Final Rule.

Plaintiff, who resides in Illinois, regularly enjoys visits to the

GYA, including areas known to be inhabited by grizzly bears.

Between 1998 and the present, Plaintiff has visited the GYA

on almost a monthly basis, staying for six to ten days or more

at a time. Over the past few years, Plaintiff has been active

in seeking to protect and preserve the habitat for the grizzly

bears through financial and physical endeavors. Plaintiff

submitted initial written comments in February 2006 to FWS

in opposition to the proposed de-listing of the grizzly bears,

and he supplemented those initial comments throughout 2006

and 2007. Following the issuance of the Final Rule, which

removed the DPS of grizzly bears in the GYA from the

list of threatened and endangered species under the ESA,

Plaintiff filed this lawsuit complaining: (1) FWS erroneously

concluded that grizzly bears have recovered in the GYA; (2)

FWS's designation of the grizzly bears as a DPS violated

the ESA and FWS policy; (3) FWS failed adequately to

consider the present or threatened destruction, modification or

curtailment of grizzly bears' habitat or range in the GYA; (4)

FWS failed adequately to consider overutilization of grizzly

bears in the GYA; (5) FWS failed adequately to consider

disease or predation that threatens grizzly bears in the GYA

with extinction; (6) FWS failed adequately to consider the

inadequacy of existing regulatory mechanisms that threaten

grizzly bears in the GYA with extinction; (7) FWS failed

adequately to analyze other natural or manmade factors that

threaten grizzly bears' continued existence in the GYA; (8)

FWS might have erroneously and unlawfully used factors

other than the best available scientific and commercial data

to delist grizzly bears in the GYA; (9) peer review in the

de-listing rulemaking was fundamentally flawed; (10) FWS

erroneously and unlawfully failed to adhere to mandatory

procedural requirements for de-listing grizzly bears in the

GYA; (11) the public comment period was fundamentally

flawed; and (12) grizzly bears in the GYA will suffer

irreparable harm if they are allowed to be hunted beginning

in Fall 2007.

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*2 On June 4, 2007, a number of environmental groups

also filed a complaint for declaratory and injunctive relief

challenging the Final Rule in the District of Idaho. See

Complaint for Declaratory and Injunctive Relief, Western

Watersheds Project v. Servheen, No. 07-cv-243 (Jun. 4,

2007). In Western Watersheds, the defendants include the

two Federal Defendants named here, as well as Christopher

Servheen, FWS's Grizzly Bear Recovery Coordinator, and

the FWS itself (collectively “Idaho Defendants”). The Idaho

Defendants filed their Answer on August 9, 2007. A number

of parties are currently seeking either intervenor or amicus

status in the District of Idaho litigation. 1 The Plaintiffs in

Western Watersheds similarly challenge the FWS' designation

of the GYA grizzly bears as a DPS and the Final Rule

removing that DPS from the federal list of endangered and

threatened wildlife. Both the Plaintiff here and the Plaintiffs

in Western Watersheds seek a declaration that the FWS' Final

Rule violates the ESA and/or the APA. Plaintiff(s) in both

cases also seek to enjoin the FWS from designating the grizzly

bears in the GYA as a DPS and from removing that DPS from

the protected ESA list.

Federal Defendants filed their motion to transfer this case

to the District of Idaho over concern that litigation on the

merits of the Final Rule in two different forums could result in

inconsistent orders. They also argue that litigation of the same

Final Rule in two forums needlessly wastes judicial resources.

And, they request transfer to the District of Idaho because

Western Watersheds was filed there first.

III. Standard

For the convenience of parties and witnesses, in the interest

of justice, a district court may transfer any civil action to any

other district or division where it might have been brought.

28 U.S.C. § 1404(a). Section 1404(a) places discretion with

this court to adjudicate motions for transfer according to

“individualized, case-by-case consideration of convenience

and fairness.” Coffey v. Van Dorn Iron Works, 796 F.2d

217, 219 (7th Cir.1986) (quoting Van Dusen v. Barrack, 376

U.S. 612, 622, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964)). The

relevant factors the district court should consider are: the

preference given to plaintiff's choice of forum; convenience of

the parties, counsel, and witnesses; the location of the record;

and the interest of justice. 15 Charles A. Wright, Arthur

R. Miller & E. Cooper, Federal Practice and Procedure §

3848-54 (2d. ed.1986). The language of § 1404(a) does not

indicate the relative weight to be accorded to each factor.

Coffey, 796 F.2d at 220 n. 3.

IV. Discussion

A. Proper Venue

The threshold consideration in a Section 1404(a) motion is

that there must be an “other district ... where [the action] might

have been brought.” See Van Dusen, 376 U.S. at 616. Venue

is proper in any judicial district in which: (1) a defendant

in the action resides; (2) a substantial part of the events or

omissions giving rise to the claim occurred, or a substantial

part of the property that is the subject of the action is situated;

or (3) the plaintiff resides if no real property is involved in the

action. 28 U.S.C. § 1391(e) (governing venue in civil actions

against federal officers and agencies). Neither party disputes

that venue is proper in Illinois pursuant to § 1391(e)(3).

However, venue may be proper in more than one district

because, under § 1391(e)(2), “there may be several districts

that qualify as a situs of such ‘substantial’ activities.” David

D. Siegel, Commentary on 1988 and 1990 Revision of Section

1391, 28 U.S.C.A. § 1391 (1993) at 9.

*3 Federal Defendants argue that a substantial part of the

events giving rise to the claims occurred in the District of

Idaho because the geographic location of the GYA grizzly

bear DPS includes eastern Idaho. 2 Also, the FWS held one of

four open houses during the proposal period of the Final Rule

in Idaho in order to collect and consider comments before

issuing the final order. 70 Fed.Reg. at 69854.

3

 Plaintiff

argues that these events do not fall within the ambit of what

was intended by § 1391(e)(2) and suggests instead that the

language “substantial part of the events or omissions” more

readily certifies Washington, D.C. as a proper venue because

that is where the head offices of Defendants' agencies are

located and where Defendant Hall approved and signed the

Final Rule. 4

Because a “substantial part of the events giving rise” to

Plaintiff claims occurred in Idaho, venue is proper in that

district. 28 U.S.C. § 1391(e)(2); see Nw. Forest Res. Council

v. Babbitt, 1994 WL 908586, at *2 (D.D.C. Apr.13, 1994)

(finding venue proper under § 1391(e) in Western District

of Washington where population of marbled murrelets were

located and where FWS maintained field offices that assisted

in promulgating the challenged rule). The gravamen of

Plaintiff's complaint is a concern for the continued viability

of the DPS of grizzly bears located in the GYA. The area

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covered by the DPS boundaries encompasses eastern Idaho,

southern Montana, and the northwest corner of Wyoming. A

substantial portion of the DPS is located in the District of

Idaho. Also, during the process of designating the boundaries

of the DPS and eventually publishing the Final Rule, the FWS

considered comments by those in and around the District of

Idaho. The FWS based its findings on significant quantities

of information gathered in and around the GYA because the

material facts in this case are derived from that location. The

nexus to Idaho is clear, and therefore I find that the District of

Idaho qualifies as a proper venue under § 1391(e)(2).

B. Convenience

The convenience component of § 1404(a) invites me to

consider the following five factors: (1) the plaintiff's choice

of forum; (2) conveniences for the parties; (3) conveniences

for witnesses; (4) location of material events; and (5) location

and ease of access to sources of proof. Willis v. Hilton

Hotels Corp., 2007 WL 611262, at *3 (N.D.Ill. Feb.22, 2007).

Plaintiff's choice of forum is the Northern District of Illinois

because he lives in a north suburb of Chicago and beginning

in January 2008, he will teach a weekly class at a law

school located in Chicago. However, while a “large measure

of deference is due to the plaintiff's freedom to select his

own forum[,] ... this factor has minimal value where none

of the conduct complained of occurred in the forum selected

by the plaintiff.” Chicago, Rock Island & Pac. RR. Co. v.

Igoe, 220 F.2d 299, 304 (7th Cir.1955) (internal quotations

omitted); see also Ruppert v. Principal Life Ins. Co., 2007

WL 2025233, at *5 (S.D.Ill., July 9, 2007) (quoting the same

rule); Heston v. Equifax Credit Info. Serv. LLC, No. 03 C 2476,

2003 WL 22243986, at *1 (N.D.Ill. Sept.26, 2003) (reasoning

that plaintiff's failure to allege facts connecting her claims

to the district where the plaintiff chose to sue “weighs in

favor of transfer”). Just like in Chicago, Rock Island, this

case involves “no controverted question which depends on

any event occurring in the Northern District of Illinois. Both

parties must rely upon evidence of events entirely removed

from [this] District.” Chicago, Rock Island, 220 F.2d at 304.

Therefore, because there is no material connection between

this District and the transactions underlying this case, I afford

little deference to Plaintiff's choice of forum in the Northern

District of Illinois.

*4 The convenience of parties and witnesses does not

militate strongly in favor of either the Northern District of

Illinois or the District of Idaho. The Federal Defendants

reside in the vicinity of Washington, D.C., and to the extent

that they will also be litigating the Western Watersheds case

in Idaho, that district is more convenient. I observe that

Plaintiff's residence and teaching position in this District

poses some inconvenience for him to travel to the District

of Idaho, though since he tries this case pro se, his travel

expenses are less. Further, the parties agree that this case

will largely be decided on an administrative record and APA

review record principles, meaning that neither of the parties

will have to make extensive travels to Idaho. The electronic

filing system allows parties to proceed with briefing without

actually traveling to the courthouse. Also, the parties agree

that a trial in this case is unlikely and the probability of calling

witnesses is low, so the convenience of witnesses is not a

salient issue either. 5

The location of material events in this case and location

of sources of proof indicate that Idaho is a slightly more

convenient forum. Plaintiff contends that the “material

events” giving rise to his cause of action were Federal

Defendants' decision to delist the GYA grizzly bears and the

signing of the Final Rule, which took place in Washington,

D.C. While this is true, it does not affect the convenience

equation for this court at all. Defendants contend that the

location of the DPS of grizzly bears, which includes eastern

Idaho, tips the scales of convenience in favor of Idaho, which

it does. The administrative record and culminating Final

Rule were based on research and data collected in the GYA,

and the Plaintiff has already suggested that he may seek

permission to conduct limited discovery to supplement that

record. Presumably at least part of the information sought,

given the nature of Plaintiff's complaint, will be related to

events that occurred in the GYA and conditions that affect

the DPS at the center of this case. Also, to the extent that

the FWS' administrative record with regard to the Final

Rule is already being compiled and sent to the District of

Idaho for the Western Watersheds case, that district is more

convenient for the sources of proof in this case (although

not by much because to the extent that record is stored

electronically, copies of CDs or PDFs are easily made and

distributed). Overall, because there is no material connection

to this District and because the material facts are located in

and around the GYA, the convenience analysis tips in favor

of the District of Idaho.

C. Interests of Justice

Lastly, and most significantly, § 1404(a) requires that I

consider the interests of justice in this motion to transfer

venue. The interests of justice is a “somewhat amorphous

term” consisting of several variables including: (1) the

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speed of the proceeding; (2) the court's familiarity with

applicable law; (3) the conservation of judicial resources;

and (4) the relation of the community to the occurrence

and the desirability of resolving the controversy in its

locale. Hawksbill Sea Turtle v. FEMA, 939 F.Supp. 1, 4

(D.D.C.1996); Heller Financial, Inc. v. Midwhey Powder

Co., Inc., 883 F.2d 1286, 1293 (7th Cir.1989); Willis, at *3

(citing IFC Credit Corp. v. Eastcom, Inc., 2005 WL 43159, *2

(N.D.Ill. Jan.7, 2005)); see also 15 Charles A. Wright, Arthur

R. Miller & E. Cooper, supra, § 3854. “Amorphous though

it may be, the interest of justice may be decisive in ruling on

a transfer motion even though the convenience of the parties

and witnesses point in a different direction.” Hawksbill, 939

F.Supp. at 4. The interests of justice includes both the interest

of the parties as well as the interests of society in general.

Chicago, Rock Island, 220 F.2d at 304 (citing United States

v. National City Lines, Inc., D.C., 7 F.R.D. 393, 397, 402

(S.D.Cal.1947)).

*5 The most salient considerations under this prong given

the circumstances presented here are the conservation of

judicial resources and the relation of the community and

desirability of resolving the controversy in its locale. 6§

1404(a) was designed to prevent the “situation in which two

cases involving precisely the same issues are simultaneously

pending in different District Courts.” Continental Grain Co.

v. FBL-585, 364 U.S. 19, 26, 80 S.Ct. 1470, 4 L.Ed.2d 1540

(1960). While the Western Watersheds case currently pending

in the District of Idaho does not present precisely the same

issues raised in this case, both cases essentially involve a

challenge under the ESA and APA to the FWS' Final Rule

regarding the DPS of grizzly bears in the GYA. See Nw. Forest

Res. Council, 1994 WL 908586, at *3 (granting transfer of

venue where two cases in different districts arose out of the

same rule-making process and calling factual background and

legal issues “similar and largely intertwined”). Not all of the

claims in both cases are identical, but the amount of overlap

is significant and the chance of conflicting orders is real.

Western Watersheds was filed before this case, and several

parties have already moved to intervene.

Finally, the local significance of the interests of the states

which are a home to the DPS of grizzly bears cannot be

ignored. The management of the grizzly bears is of critical

importance to those states because those states will inherit the

primary management responsibility of the grizzly bears if the

Final Rule remains in effect. Those states have already spent

a considerable amount of time and resources developing their

state management plans, and thus this dispute more closely

involves the interests of any of those states over those of

Illinois. Therefore, the controversy over the FWS' rulemaking

that labeled the population of grizzly bears in the GYA a DPS

is more appropriately litigated in a court in Idaho, Wyoming,

or Montana, where that DPS is found. In Nw. Forest Res.

Counsel, the Court transferred a challenge under the ESA

of the listing of the marbled murrelet from the District of

Columbia to the Western District of Washington, where much

of that bird's habitat is found. Nw. Forest Res. Counsel, 1994

WL 908586, at *4. An important consideration with regard to

the interests of justice was the fact that “marbled murrelets do

not inhabit land or water in-or anywhere near-the District of

Columbia.” Id. The same reasoning applies here and supports

a transfer of venue to the District of Idaho.

V. Conclusion

Venue for this action is proper in both the Northern District

of Illinois and the District of Idaho. Although Plaintiff

brought this action in the Northern District of Illinois, in

light of all of the circumstances, the interests of justice and

convenience of the parties sufficiently outweighs Plaintiff's

right to choose the forum. Transfer of this action to the District

of Idaho is appropriate. Accordingly, it is hereby ordered

that Defendants' motion is granted, pursuant to 28 U.S.C. §

1404(a). This action shall be transferred to the District of

Idaho forthwith.

All Citations

Not Reported in F.Supp.2d, 2007 WL 4365340

Footnotes

1 Federal Defendants point to at least five other parties who have moved to participate in the litigation. The Safari Club

International moved to intervene as a party defendant on June 12, 2007. U.S. Sportsman's Alliance Foundation moved to

file an amicus brief in support of Idaho Defendants' position on July 18, 2007. The State of Wyoming moved to intervene

as a party defendant on August 2, 2007. According to the Federal Defendants, the State of Montana will also be filing

a motion to intervene on its behalf, if it hasn't already done so. Additionally, the National Wildlife Federation moved to

intervene on September 27, 2007, and that motion was denied by the Idaho court on October 31, 2007.

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Aland v. Kempthorne, Not Reported in F.Supp.2d (2007)

2007 WL 4365340

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2 Federal Defendants also make two additional arguments in the venue portion of their reply motion: (1) Plaintiff's twelfth

claim for relief seeks to invalidate the Final Rule, which in turn would require actions taken by the State of Idaho to enact

new laws to protect the bears from hunting, and (2) courts recognize the importance of transferring ESA cases to a district

in which the species is located. These arguments are viable, but they are more properly considered in the “interests of

justice” prong of the venue analysis. I will consider them accordingly.

3 The open house in Idaho was held in Idaho Falls on January 12, 2006. Other open houses were held in Bozeman, Montana

and Jackson, Wyoming. An open house and a public hearing was held in Jackson, Wyoming. 70 Fed.Reg. at 69854.

4 I do not address whether or not Washington, D.C. is a proper venue for this case because neither party has requested

me to do so.

5 Both parties spend some time addressing the issue of convenience with respect to Defendants' attorneys. However,

“the convenience of an attorney is not a factor in considering a motion to transfer venue,” and thus I will not consider it.

Flexicorps, Inc. v. Benjamin & Williams Debt Collectors, Inc., No., 2007 WL 1560212, at *5 n. 3 (N.D.Ill. May 29, 2007)

(internal quotation omitted).

6 The speed of disposition and the court's familiarity with the applicable law are negligible factors in this case.

End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.

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Allman v. McGann, Not Reported in F.Supp.2d (2003)

2003 WL 1811531

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KeyCite Yellow Flag - Negative Treatment

Distinguished by Barker v. Atlantic Pacific Lines, N.D.Ill., August 14, 2013

2003 WL 1811531

Only the Westlaw citation is currently available.

United States District Court,

N.D. Illinois, Eastern Division.

James ALLMAN, Plaintiff,

v.

Kevin D. MCGANN, Michael Cipicchio,

and Scott D. Sullivan, Defendants.

No. 02 C 7442.

|

April 4, 2003.

OPINION AND ORDER

NORGLE, J.

*1 Before the court is Defendant, Michael Cipicchio's

(“Cipicchio”) motion to dismiss Plaintiff, James Allman's

(“Allman”) complaint for lack of personal jurisdiction

brought pursuant to Federal Rule of Civil Procedure 12(b)(2).

For the following reasons, Cipicchio's motion is granted.

I. BACKGROUND 1

Allman is seeking to recover commissions allegedly owed

for work performed as an employee of a subsidiary of MCI

WorldCom Network Services, Inc. (“WorldCom”). Allman, a

citizen of the State of Illinois, began working for a subsidiary

of WorldCom in March of 1991. Allman was employed as

a major account executive and was compensated for his

services by was of salary, commissions and bonuses, as

set forth in MCI's Major Account Executive Compensation

Plan (“the Comp Plan”). Allman resigned his employment

with WorldCom effective November 2, 2001. Allman alleges

that at the time of his resignation, his commissions report

indicated that he was owed $700,339.49, in addition to

unreported commissions for October and November of 2001,

an amount which WorldCom has not paid.

Initially, in order to seek redress for his grievance, Allman

filed suit against WorldCom. This case was filed in the

United States District Court for the Northern District of

Illinois, Eastern Division, and was assigned to the Honorable

Matthew F. Kennelly. See Allman v. WorldCom. Inc., docket

number 01 C 9741. In that case, WorldCom filed a motion

to dismiss and compel arbitration. WorldCom's motion to

dismiss and compel arbitration was rendered moot as a result

of Allman's motion to voluntarily dismiss the case pursuant

to Federal Rule of Civil Procedure 41(a). Thereafter, Allman

proceeded to arbitrate his claim; however, as a result of

WorldCom's petition for bankruptcy pursuant to Chapter 11

of the Bankruptcy Code, the arbitration proceedings were

stayed. Impatient with the progress of his arbitration as a

result of the bankruptcy stay, Allman filed the present case

against various individual officers of WorldCom, including

Kevin D. McGann, Michael Cipicchio, and Scott D. Sullivan

(collectively “the Defendants”). 2

This court initially dismissed the present case for failure to

properly plead subject matter jurisdiction. Thereafter, Allman

filed an amended complaint, properly pleading subject matter

jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). In Count I of

the amended complaint, Allman contends that the Defendants'

failure to pay his final commission resulted in a violation of

the Illinois Wage Payment and Collection Act, 820 Ill. Comp.

Stat. 115/1 et seq. (“IWPCA”). Count II of the amended

complaint seeks attorney fees under the IWPCA. Lastly, in

Count III of the amended complaint, Allman contends that

the Defendants tortiously interfered with his employment

contract rights.

Returning to the facts underlying Allman's claims for

relief, in regard to commissions, WorldCom maintained

a commissions bank account for Allman in WorldCom's

Commissions Accounting department. WorldCom regularly

provided Allman with commissions reports detailing the

amounts held in Allman's commissions account. Under the

Comp Plan, Allman would receive a maximum of $25,000 per

month from commissions, with any amount of commission

in excess of $25,000 to be held in Allman's commissions

bank account. In the event that Allman's commissions for a

given month were less than $25,000, funds would be taken

out of Allman's commissions account and applied to assure a

monthly commission of $25,000. Furthermore, in the event of

termination, Allman would continue to receive a maximum of

$25,000 per month from commissions until his commissions

account was exhausted.

*2 Cipicchio, a citizen of the State of Mississippi,

was, and is, employed by MCI as Vice President of

Corporate Processing Services. Cipicchio performs his

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duties on behalf of WorldCom from an office located in

Mississippi. In that position Cipicchio has responsibility

for administering WorldCom's compensation plans and

commission accounting. Prior to Allman's resignation,

Cipicchio caused an audit to be performed on the accounts

of approximately 50 major account executives, including

Allman. Allman alleges that the Defendants directed

WorldCom to “intentionally and purposefully” freeze many

of the commission bank accounts that had been the

subject of the internal audit, including Allman's account.

Allman contends that the Defendants knew of WorldCom's

obligation to pay Allman under the Comp Plan and that the

Defendants purposefully prevented the payment of Allman's

final compensation, resulting in a violation of the IWPCA

and tortious interference with Allman's employment contract

rights.

Cipicchio has responded to Allman's amended complaint by

filing a motion to dismiss for lack of personal jurisdiction,

which the court now addresses.

II. STANDARD OF DECISION

Once a defendant has challenged a court's exercise of personal

jurisdiction, through a motion to dismiss for lack of personal

jurisdiction, the plaintiff has the burden of demonstrating that

the court's exercise of personal jurisdiction over a defendant

is proper. See RAR. Inc. v. Turner Diesel, Ltd., 107 F.3d 1272,

1276 (7th Cir.1995). “In deciding a motion to dismiss for lack

of personal jurisdiction, the court may receive and consider

affidavits from both parties.” Glass v. Kemper Corp., 930

F.Supp. 332, 337 (N.D.Ill.1996) (citing Turnock v. Cope, 816

F.2d 332, 333 (7th Cir.1987)). “The court resolves factual

disputes in the pleadings and affidavits in favor of the

plaintiff, but takes as true facts contained in the defendant's

affidavit that remain unrefuted by the plaintiff.” Id. (citing

Nelson v. Park Industries, Inc., 717 F.2d 1120, 1123 (7th

Cir.1983)).

III. DISCUSSION

“A federal district court exercising diversity jurisdiction

has personal jurisdiction, of course, ‘only if a court of

the state in which it sits would have such jurisdiction.” ’

RAR. Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th

Cir.1997) (citing Klump v. Duffus, 71 F.3d 1368, 1371 (7th

Cir.1995). This federal district court, sitting in diversity, will

have personal jurisdiction over a nonresident defendant only

where: 1) Illinois statutory law properly grants jurisdiction;

2) the exercise of personal jurisdiction would not violate

Illinois constitutional law due process requirements; and 3)

the exercise of personal jurisdiction would not violate the

United States constitutional law due process requirements.

See Central States, Southeast and Southwest Areas Pension

Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th

Cir.2000).

*3 In this case, the three inquiries may be collapsed into

one, with an analysis of whether the exercise of personal

jurisdiction would violate the United States constitutional

law due process requirements as the pivotal inquiry. See

Klump, 71 F.3d at 1371 (indicating “if the contacts between

the defendant and Illinois are sufficient to satisfy the

requirements of due process, then the requirements of both the

Illinois long-arm statute and the United States Constitution

have been met, and no other inquiry is necessary”); see

also Rollins v. Ellwood, 565 N.E.2d 1302, 1315 (Ill.1990)

(indicating “Illinois' long-arm statute ... may well restrict the

power that the courts of this State have to bring nonresidents

before them to a greater extent than do the Federal due process

clause and the ‘minimum contacts' standard developed over

the years by the [United States] Supreme Court”); see also

RAR, 107 F.2d at 1276 (indicating that “Illinois courts have

given little guidance as to how state due process protection

differs from federal protection in the context of personal

jurisdiction”).

As elucidated by International Shoe Co. v. Washington, 326

U.S. 310 (1945) and its progeny, to satisfy the requirements

of federal due process, a non-resident defendant must have

established sufficient “minimum contacts” with the forum

state such that the exercise of jurisdiction does not offend

traditional notions of fair play and substantial justice. See

generally RAR, 107 F.2d at 1277. To establish that such

“minimum contacts” have been established, “[i]t is essential

in each case that there be some act by which the defendant

purposefully avails itself of the privilege of conducting

activities within the forum State, thus invoking the benefits

and protections of its laws.” Hanson v. Denckla, 357 U .S.

235, 253 (1958). In determining whether sufficient “minimum

contacts” exist, courts consider whether a defendant could

“reasonably anticipate being haled into court” in Illinois. See

World–Wide Volkswagen Corp. v. Woodsen, 444 U.S. 286,

297 (1980). This requirement is satisfied when the defendant

intentionally directs his activities at forum state residents and

the litigation arises from injuries allegedly caused by those

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activities. See Burger King Corp. v. Rudzewicz, 471 U.S. 462,

474 (1985).

A. Allman's IWPCA Claim for Relief

One of Allman's arguments for subjecting Cipicchio to

the personal jurisdiction of a court in Illinois is premised

on the Illinois Wage Payment and Collection Act, which

provides, inter alia: “Any officers of a corporation or agents

of an employer who knowingly permit such employer to

violate the provisions of this Act shall be deemed to be

the employers of the employees of the corporation.” 820

Ill. Comp. Stat. 115/13 (2003). Allman argues that because

Cipicchio knowingly permitted WorldCom to withhold

Allman's final compensation, Cipicchio is deemed to be

Allman's employer under the IWPCA, and therefore subject

to personal jurisdiction in Illinois because WorldCom would

be subject to personal jurisdiction in Illinois. However, the

court cannot accept Allman's personal jurisdiction syllogism

in light of existing federal due process jurisprudence.

*4 The present case is virtually indistinguishable from other

cases decided in this district dealing with the IWPCA and the

issue of personal jurisdiction over non-resident officers and

directors of corporations. In McMurray v. Improvenet, Inc.,

No. 00 C 7137, 2001 WL 561376 *1 (N.D.Ill. May 22, 2001)

an Illinois employee filed suit against his former employer

and the president of that corporation, both non-residents

of Illinois, alleging violations of the IWPCA and tortious

interference with contract. The president of the corporation

filed a motion to dismiss for lack of personal jurisdiction,

which the court granted. Id. at *2. The president of the

corporation had visited Illinois approximately four times on

behalf of the corporation, once meeting with the plaintiff.

Id. at *3. In addition, the president of the corporation had

communicated with the plaintiff via telephone on numerous

occasions. Id. The court stated that the single meeting with

the plaintiff was “too tenuous to justify asserting personal

jurisdiction over [the president of the corporation].” Id. In

addition, the numerous telephone contacts would not support

the exercise of personal jurisdiction because the substance of

those communications revealed nothing about the plaintiff's

specific claims for relief. Id. In sum, the court indicated:

“We cannot say that, through these limited contacts, [the

president of the corporation] could reasonably anticipate

being required to defend himself here.” Id. Additionally, the

court indicated that assuming that minimum contacts could be

established, “we would lack jurisdiction over [the president

of the corporation] because he is protected by the ‘fiduciary

shield’ doctrine.” Id.

In Krok v. Burns & Wilcox. Ltd., No. 98 C 5902, 1999 WL

262125 *1 (N.D. Ill. April 16, 1999) an Illinois employee

filed suit against his former employer and four officers and

directors of that corporation, all non-residents of Illinois,

alleging violations of the IWPCA, tortious interference

with contract, and unjust enrichment. The four non-resident

officers and directors of the corporation included: H.

Kaufman, former owner of the corporation; A. Kaufman,

Executive Vice President, Director, and current owner of the

corporation; Price, Senior Vice President of the corporation;

and Horton, Executive Vice President and Director of the

corporation. Id. The four non-resident officers and directors

of the corporation filed motions to dismiss for lack of personal

jurisdiction. Id. at *2. Two of the defendants, H. Kaufman

and A. Kaufman, had only visited Illinois a few times a

year to transact unrelated business, and the court dismissed

them from the complaint. Id. at *3. The two remaining

defendants, Price and Horton, visited Illinois for the purpose

of meeting with the plaintiff, and subsequently terminated his

employment at that meeting. Id. at *4. The court indicated that

by traveling to Illinois to terminate the plaintiff's employment,

Price and Horton performed an act which caused an injury in

Illinois, thus subjecting them to the personal jurisdiction of

the court to answer the plaintiff's claim of tortious interference

with contract. Id. As to the plaintiff's claim of violations of

IWPCA, the court indicated: “[The IWPCA count] arises out

of a wage payment dispute, not a wrongful termination action.

Thus, under 5/2–209(a)(1), this court should not exercise

personal jurisdiction if [the IWPCA count] were standing

alone.” Id. However, the court subjected Price and Horton

to personal jurisdiction in Illinois on the rationale that since

they were subject to personal jurisdiction as to the tortious

interference with contract claim, their “burden does not

substantially increase by this court asserting jurisdiction over

them as to [the IWPCA count].” Id. The court also rejected

the arguments of Price and Horton that the fiduciary shield

doctrine should prevent the court from exercising personal

jurisdiction over them, based on the finding that Price and

Horton were acting to serve their personal interests. Id.

*5 In the present case, as compared with McMurray and

Krok, there are even fewer contacts between Cipicchio,

Allman and Illinois. It is undisputed that Cipicchio has never

lived in Illinois, never owned property in Illinois, never paid

taxes in Illinois, and never been involved in any litigation

in Illinois. Cipicchio's only contacts with Illinois occurred

in June of 2000 when he attended a conference in Illinois,

and Cipicchio did not have any contact with Allman at

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that time. In fact, Cipicchio has never had any contact with

Allman, whether by way of telephone, mail, or electronic

communication. The actions of Cipicchio cannot be said to

indicate that he “purposefully availed” himself to Illinois.

Viewed along a “minimum contacts” spectrum, the contact

between Cipicchio and Illinois is virtually non-existent and

completely unrelated to Allman's claims for relief. This court

cannot say that Cipicchio could have reasonably anticipated

being haled into court in Illinois, as a result of performing his

duties for WorldCom outside of Illinois.

In short, Allman's syllogism based on the text of the IWPCA

proves too much, and ignores the lessons of International

Shoe and its progeny. Therefore, the court finds that Allman

has failed to meet his burden of demonstrating that the court's

exercise of personal jurisdiction over Cipicchio is proper as

to Counts I and II of the amended complaint.

B. Allman's Tortious Interference with Contract Claim for

Relief

Allman's alternative argument for subjecting Cipicchio to the

personal jurisdiction of a court in Illinois is premised on the

contention that Cipicchio's conduct qualifies as a tortious act,

thereby subjecting Cipicchio to Illinois' long-arm statute, 735

Ill. Comp. Stat. 5/2–209(a)(2) (2003).

As indicated above, since the three inquiries may be collapsed

into one, with an analysis of whether the exercise of personal

jurisdiction would violate the United States constitutional law

due process requirements as the pivotal inquiry, the court will

analyze whether the contacts of Cipicchio with Illinois satisfy

the requirements of federal due process. See Klump, 71 F.3d

at 1371.

At bottom, Allman's alternative argument for personal

jurisdiction reduces itself to an argument that personal

jurisdiction is proper because Allman was injured in Illinois

as a result of a decision made outside of Illinois that involved

Cipicchio. To support this argument, Allman relies on the

well-known case of Gray v. American Radiator and Standard

Sanitary Corp., for the proposition that “the place of a wrong

is where the last event takes place which is necessary to

render the actor liable.” 176 N.E.2d 761, 763 (Ill.1961).

However, this argument misses later development in personal

jurisdiction in the Illinois courts. The Illinois Supreme Court

has explicitly rejected the contention that the Illinois long-arm

statute applies to non-resident defendants whose only contact

with Illinois is allegedly causing economic harm within the

state. See R.W. Sawant & Co. v. Allied Programs Corp., 489

N.E.2d 1360, 1364 (Ill.1986) (indicating “an economic loss

which is felt in Illinois is not sufficient to confer jurisdiction

in our courts when the acts occurred outside of Illinois”); see

also Green v. Advance Ross Electronics Corp., 408 N.E.2d

1007, 1010 (Ill.App.1980) (“While there may ultimately have

been an indirect economic impact in Illinois, we do not

believe that this type of tortious consequence, without more,

constitutes sufficient contact with this state.”).

*6 Furthermore, whether Illinois statutory law properly

grants jurisdiction is only one part of the inquiry, which at

bottom must meet the requirements of federal due process.

As indicated above, the actions of Cipicchio cannot be

said to indicate that he “purposefully availed” himself to

Illinois. When viewed along a “minimum contacts” spectrum,

the contact between Cipicchio and Illinois is virtually nonexistent and completely unrelated to Allman's claims for

relief. This court cannot say that Cipicchio could have

reasonably anticipated being haled into court in Illinois as

a result of performing his duties for WorldCom outside of

Illinois.

Therefore, the court finds that Allman has failed to meet his

burden of demonstrating that the court's exercise of personal

jurisdiction over Cipicchio is proper as to Count III of the

amended complaint.

C. Fiduciary Shield Doctrine

Even accepting Allman's syllogism and alternative argument,

and assuming arguendo, that Allman's claims for relief were

sufficiently related to Cipicchio's contacts with Illinois, this

court would decline to exercise personal jurisdiction over

Cipicchio based on the fiduciary shield doctrine.

“The fiduciary shield doctrine is a judicially created principle

that precludes the exercise of personal jurisdiction over nonresident corporate agents or employees who are acting in the

forum state in their role as corporate agents or employees.”

Sonja Larsen, Validity, Construction, and Application of

“Fiduciary Shield” Doctrine–Modern Cases, 79 A.L.R.5th

587 (2000). The fiduciary shield doctrine is premised on

the rationale that it is unfair to force non-resident corporate

agents or employees to defend suits brought in a forum

where their only relevant contacts are acts performed not for

personal benefit but for the benefit of their employer. Id.

The Illinois Supreme Court recognized the fiduciary shield

doctrine in Rollins v. Ellwood, 565 N.E.2d 1302, 1317–18

(Ill.1990). In explaining the fiduciary shield doctrine, and its

legal underpinnings, the Illinois Supreme Court indicated:

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Thus, we find it to be unfair

and unreasonable, under Illinois' due

process clause and the tenets of our

concept of the jurisdictional power of

the Illinois courts, to assert personal

jurisdiction over an individual who

seeks the protection and benefits of

Illinois law, not to serve his personal

interests, but to serve those of his

employer or principal.

Id. at 1318. As interpreted by the federal courts in

the Northern District of Illinois, “[t]here are three basic

limitations on the fiduciary shield doctrine: where the

defendant was motivated in part or solely by personal interest,

as opposed to the interests of the corporation; where ‘the

defendant is the alter ego of the entity for which he is a

fiduciary;’ and, possibly, where the defendant was a director

or officer who had discretion regarding whether the contacts

occurred.” Robinson v. Sabis Education Systems, Inc., No. 98

C 4251, 1999 WL 412642 (N.D.Ill. May 28, 1999) (citations

omitted).

*7 Allman has proffered nothing to refute Cipicchio's

affidavit, which indicated that Cipicchio did not benefit

or serve his personal interests by causing an audit to be

performed on Allman's commissions account and freezing

Allman's commission bank account. Allman's allegations

against Cipicchio, and the Defendants generally, are devoid

of specific facts. Allman simply indicated that Cipicchio

“knowingly” violated the IWPCA, and “purposefully” and

“maliciously” interfered with Allman's employment contract

rights. As was aptly stated by the district court in McMurray:

“The adverbs ‘willfully’ and ‘maliciously’ are too general

to describe a personal interest.” 2001 WL 561376 at *4.

Further, as a vice president in a national corporation, it cannot

be argued that Cipicchio is the alter ego of WorldCom. In

addition, Allman does not allege that Cipicchio had discretion

whether the contacts occurred. In fact, Cipicchio had no

relevant contacts with Illinois. Also, Cipicchio's actions were

authorized by the Comp Plan, which Allman entered into

with WorldCom, and cannot be said to be anything other than

Cipicchio performing his duties as an employee of WorldCom

in Mississippi.

Furthermore, judicial acceptance of Allman's personal

jurisdiction arguments would result in a myriad of officers and

directors of corporations being forced to defend themselves

in litigation from Seattle to Key West, and every point

in between where their corporations transact business,

irrespective of their individual contacts with each forum state.

Despite the technological advances made that enable the

business world to span many borders, such a result would

not be consistent with current conceptions of due process

guaranteed by the Fourteenth Amendment.

IV. CONCLUSION

For the foregoing reasons, Defendant, Michael Cipicchio's

motion to dismiss Plaintiff, James Allman's complaint for lack

of personal jurisdiction brought pursuant to Federal Rule of

Civil Procedure 12(b)(2) is granted.

IT IS SO ORDERED.

All Citations

Not Reported in F.Supp.2d, 2003 WL 1811531

Footnotes

1 The court takes the facts from Allman's amended complaint and the parties' briefs and supporting affidavits on the present

motion to dismiss for lack of personal jurisdiction. Disputed facts are noted in the text.

2 At a status hearing on April 1, 2003, counsel for Allman advised the court that Defendant, Scott D. Sullivan was served

with a summons and a complaint on March 17, 2003. Counsel for Allman also advised the court that Defendant, Kevin

D. McGann had not been served.

The court is deciding the matter before it, as to Defendant, Michael Cipicchio, solely on jurisdictional grounds. As such,

the court is not addressing the appropriateness of the complaint in light of the bankruptcy court's stay of Allman's

arbitration proceedings or in light of Local Rule 40.4, dealing with reassignment of related cases. In light of this opinion,

Allman should be diligent in pursuing this matter as to the remaining Defendants. See Fed.R.Civ.P. 11; see also Berwick

Grain Co., Inc. v. Illinois Dept. of Agriculture, 217 F.3d 502, 504 (7th Cir.2000) (per curiam ) (discussing Rule 11 and

collecting cases).

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Allman v. McGann, Not Reported in F.Supp.2d (2003)

2003 WL 1811531

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End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.

Case: 1:20-cv-00512 Document #: 46-1 Filed: 04/27/20 Page 15 of 29 PageID #:259
Bray v. Lathem Time Co., Slip Copy (2020)

2020 WL 1492742

 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1

2020 WL 1492742

Only the Westlaw citation is currently available.

United States District Court, C.D. Illinois,

Springfield Division.

Bret BRAY, individually and on behalf

of all others similarly situated, Plaintiff,

v.

LATHEM TIME CO., Defendant.

Case No. 19-3157

|

Signed 03/26/2020

|

Filed 03/27/2020

Attorneys and Law Firms

Ryan F. Stephan, Haley R. Jenkins, Stephan Zouras LLP,

Chicago, IL, Brandon Michael Wise, Peiffer Wolf Carr &

Kane APLC, St. Louis, MO, for Plaintiff.

Jacob Daniel Radecki, Christopher Graham Dean, McDonald

Hopkins LLC, Chicago, IL, for Defendant.

OPINION

RICHARD MILLS, United States District Judge:

*1 This is an action for alleged violations of the Illinois

Biometric Information Privacy Act, 740 ILCS 14/1 et seq.

(“BIPA”).

Defendant moves to dismiss for failure to state a claim and

to join necessary parties and to dismiss for lack of personal

jurisdiction.

I. BACKGROUND

Defendant Lathem Time Corp. (“Lathem”) designs and

sells biometric-based timekeeping systems to employers to

track time worked by hourly employees. Plaintiff Bret Bray

alleges that his former employer, Hixson Lumber Sales of

Illinois, Inc. (“Hixson”), required him to use Lathem facialrecognition technology on a timekeeping device (a “Lathem

Device”) and that Lathem violated BIPA by collecting,

storing, using, and/or disclosing his biometric information

without giving the notices and obtaining the consents

required by the statute. Bray filed a proposed class action

complaint in the Circuit Court for the Fourth Judicial Circuit,

Montgomery County, Illinois, seeking to pursue those claims

for himself and on behalf of any individual working in

Illinois who supposedly had their facial geometries collected,

captured, received, obtained, maintained, stored or disclosed

by Lathem, regardless of where they worked.

On June 18, 2019, Lathem removed the action to this Court.

Bray alleges Lathem designs and sells biometric timekeeping

systems to employers throughout Illinois to track time worked

by hourly employees. Because employees clocking in or

out must use biometrics—like their facial geometry—this

technology eliminates the possibility of “buddy punching”

that could occur if a traditional punch card were used. It is not

possible to “borrow” facial geometry to clock in for a friend.

BIPA requires collectors of biometric data to inform the

subject in writing that biometric data is being collected or

stored and receive that person’s written consent. See 740 ILCS

14/15(b). If the collector discloses the data, it must generally

—absent some exceptions not present here—receive consent

for that as well. See 740 ILCS 14/15(d). Additionally, any

entity in possession of biometric data must create a publicly

accessible policy regarding the retention and destruction of

such data. See 740 ILCS 14/15(a).

Bray contends Lathem violated each of those provisions. As

an employee from whom Lathem collected facial geometry

while ignoring his rights under BIPA, therefore, Bray brings

this suit to enforce the statute on his own behalf and on behalf

of a class of Illinois citizens whose rights Lathem is alleged

to have violated in this way.

Lathem claims BIPA was not designed to apply to third-party

technology vendors like itself. Although BIPA may give Bray

a cause of action against his employer, Hixson—which he

is pursuing in a separate action in state court—it does not

give him a claim against Lathem. Lathem contends he is

attempting to assert a claim that does not exist. Bray alleges

that Lathem collected his data and held it without obtaining

his consent. Moreover, Lathem did not establish a retention

policy. Bray further contends that BIPA applies to all “private

entities” which would include Lathem. Thus, Bray asserts he

has alleged a viable claim.

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*2 Lathem further alleges that, even if Bray could state a

claim, the claim should still be dismissed for failure to join

numerous necessary parties: the employers of the putative

class members. Bray contends this portion of the motion is

premature, as there is not sufficient information to determine

the necessity of any additional parties under Federal Rule of

Civil Procedure 19.

Lathem further asserts it is a Georgia-based seller of

workplace timekeeping devices and software services with

de minimis connections to Illinois. Because of these limited

contacts with Illinois and because its suit-related contact is

a result of the actions of third parties like Hixson, Lathem

claims the action should be dismissed for lack of personal

jurisdiction. Bray contends Lathem’s business relationships

with Illinois citizens, from which his injuries arose, subject it

to jurisdiction in Illinois.

II. DISCUSSION

The Court will first consider Lathem’s motion to dismiss for

lack of personal jurisdiction because if there is no in personam

jurisdiction, the Court cannot address the other motion. See

be2 LLC v. Ivanov, 642 F.3d 555, 557 (7th Cir. 2011) (noting

that the entry of a judgment when the court lacks personal

jurisdiction over the defendant is void).

(A)

In considering a motion to dismiss under Rule 12(b)(2), the

Court accepts the Plaintiff’s allegations concerning personal

jurisdiction unless the allegations are refuted through

undisputed affidavits. See Swanson v. City of Hammond, 411

F. App’x 913, 915 (7th Cir. 2011).

Federal courts sitting in diversity may exercise personal

jurisdiction over a nonresident defendant only if the forumstate court would have such jurisdiction. See Hyatt Int’l

Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2012). “Because

Illinois permits personal jurisdiction if it would be authorized

by either the Illinois Constitution or the United States

Constitution, the state statutory and federal constitutional

requirements merge.” uBid, Inc. v. GoDaddy Group, Inc.,

623 F.3d 421, 425 (7th Cir. 2010). Under the Constitution,

the inquiry is whether it is “fair and reasonable” to require

the nonresident defendant to answer the plaintiff’s claim; the

entity must have contacts or ties with the state “such that

maintenance of the suit does not offend traditional notions

of fair play and substantial justice.” International Shoe Co.

v. Washington, 326 U.S. 310, 316 (1945) (internal quotation

marks omitted). A defendant must purposefully avail itself of

the privilege of conducting activities within a state, thereby

invoking the protection of its laws. See Burger King Co. v.

Rudzewicz, 471 U.S. 462, 474-75 (1985). The contacts must

create a “substantial connection” with the state and not be the

result of “random,” “fortuitous” or “attenuated” contacts. Id.

at 475.

The plaintiff cannot be the sole link between a defendant and

the forum. See Walden v. Fiore, 571 U.S. 277, 285 (2014).

While “a defendant’s contacts with the forum State may

be intertwined with his transactions or interactions with the

plaintiff or other parties,” its “relationship with a plaintiff

or third party, standing alone, is an insufficient basis for

jurisdiction.” Id. at 286.

(B)

The issue is whether Illinois has specific jurisdiction over

Lathem. In order for there to be specific jurisdiction, “the

defendant’s contacts with the forum state must show that

it purposefully availed itself of the privilege of conducting

business in the forum state or purposefully directed its

activities at the state.” Lexington Insurance Company v.

Hotai Insurance Co., Ltd., 938 F.3d 874, 878 (7th Cir. 2019)

(internal quotation marks omitted). Next, “the plaintiff’s

alleged injury must have arisen out of the defendant’s forumrelated activities.” Id. Additionally, “any exercise of personal

jurisdiction must comport with traditional notions of fair play

and substantial justice.” Id.

*3 The Seventh Circuit has cautioned that courts “should

be careful in resolving questions about personal jurisdiction

involving online contacts to ensure that a defendant is not

haled into court simply because the defendant owns or

operates [an interactive] website that is accessible in the

forum state.” Matlin v. Spin Master Corp., 921 F.3d 701, 706

(7th Cir. 2019) (citations omitted). The minimum-contacts

analysis “center on the relations among the defendant, the

forum, and the litigation.” Id. In order for there to be personal

jurisdiction, the defendants must have targeted the forum

state. See id. Lathem’s “suit related conduct must create a

substantial connection with the forum State” in order for there

to be personal jurisdiction. See Walden, 571 U.S. at 284.

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In support of its motion to dismiss for lack of personal

jurisdiction, Lathem has submitted the Declaration of Lance

Whipple, its Vice President, Sales & Marketing. When a

defendant submits evidence disputing a court’s exercise of

personal jurisdiction, the plaintiff must provide evidence

supporting the court’s exercise of jurisdiction. See Matlin, 921

F.3d at 705.

Lathem contends it does not have sufficient contacts with

Illinois to justify the exercise of specific jurisdiction.

Moreover, Lathem alleges its sales and interactive website are

irrelevant to the jurisdictional analysis.

According to Mr. Whipple’s Declaration, Lathem has no

offices or facilities in Illinois. It is not registered to do

business in Illinois and has no Illinois employees. Lathem has

no real estate, accounts, other personal property or physical

presence of any kind in Illinois. Lathem does not interact with

its customers’ employees, such as Bray or any putative class

members. Its relationship is solely with the employers.

Lathem alleges it does not target Illinois customers or their

employees in any way. Mr. Whipple states Lathem does

not advertise in Illinois, send sales or other representatives

here, maintain any sales or marketing programs for Illinois

customers, or geographically restrict the sales of its products

and services. Lathem’s suit-related “contact” is limited to

offering an optional web-service, PayClock Online, that is

available to customers in Illinois. “If the defendant merely

operates a website, even a “highly interactive” website, that

is accessible from, but does not target, the forum state, then

the defendant may not be haled into court in that state without

offending the Constitution.” be2 LLC, 642 F.3d at 559.

Lathem notes it did not itself create any contact with Illinois.

It is the result of decisions by employers to (1) use Lathem

Devices in the state, (2) enable the facial-recognition feature,

and (3) enroll in PayClock Online. The absence of any one

of these decisions by the employers would break the chain

of events that led to suit-related contact with Illinois. As

Mr. Whipple states, Lathem did not even sell the Lathem

Device to Bray’s employer, Hixson Illinois; instead it sold and

shipped them to Hixson Lumber Sales in Arkansas. Whipple

notes that customers can move and use the devices as they

see fit, including across state lines. Accordingly, Lathem had

nothing to do with how the devices got to Illinois. As Lathem

alleges, its contact with Bray is purely happenstance and

the result of the actions of third parties. Such “random,”

“fortuitous” or “attenuated” contacts—which is based solely

on the actions of another entity—cannot support specific

jurisdiction. See Burger King, 471 U.S. at 475.

Bray claims that Lathem could reasonably foresee that its

products and services would be purchased and used in Illinois.

Citing Illinois v. Hemi Group LLC, 622 F.3d 754 (7th Cir.

2010), Bray contends that Lathem’s business appears to

include an expansive and sophisticated online venture and,

when an entity holds itself out to conduct business nationwide

and is successful in reaching nationwide customers, personal

jurisdiction exists. See id. at 760. In Hemi Group, the Seventh

Circuit found significant that the online seller expressly stated

that it would do business with 49 states by saying it would ship

to any state in the country except New York. See id. at 758

(“Although listing all forty-nine states by name would have

made a stronger case for jurisdiction in this case, inasmuch

as it would have expressly stated that Hemi wanted to do

business with Illinois residents, the net result is the same.”).

Mr. Whipple states that Lathem imposes no such limitation

on its sales. Additionally, the issue in Hemi Group concerned

the defendant’s failure to pay sales tax, see 622 F.3d at 756, so

the sale itself was a suit-related contact. This lawsuit concerns

Lathem’s alleged collection, storage use and disclosure of

biometrics--not Lathem’s sales.

*4 Bray cites uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d

421 (7th Cir. 2010) for the proposition that the Seventh Circuit

found that personal jurisdiction existed based on Internetbased activities. The defendant in that case had aired many

national commercials, including six straight years of Super

Bowl ads. See id. at 427. Its advertising activities included

celebrity and sports sponsorships which successfully reached

Illinois customers. See id. Lathem has not targeted Illinois in

a remotely similar manner. Accordingly, uBid is inapposite.

Bray also relies on Mobile Anesthesiologists Chicago, LLC v.

Anesthesia Associates of Houston Metroplex, P.A., 623 F.3d

440 (7th Cir. 2010), wherein the Seventh Circuit states that

“[a] defendant’s deliberate and continuous exploitation of the

market in a forum state, accomplished through its website as

well as through other contacts with the state, can be sufficient

to establish specific personal jurisdiction.” Id. at 446. In this

case, however, there are no contacts with the state other than

the website and that alone is not enough. See id. (“A plaintiff

cannot satisfy the Calder standard simply by showing that

the defendant maintained a website accessible to residents of

the forum state and alleging that the defendant caused harm

through that website.”).

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Bray also relies on Norberg v. Shutterfly, Inc., 152 F. Supp.3d

1103 (N.D. Ill. 2015), wherein the plaintiff also asserts a

violation of BIPA. Judge Norgle noted that defendants in

Norberg operated multiple websites that provided digital

photo storage, sharing, and photo prints and novelty gifts,

such as photo mugs and mousepads, which was available

in all 50 states and internationally. See id. at 1105. The

photo sharing and printing services were offered directly

to Illinois citizens, while hard copy photographs and other

products were shipped directly to their customers. See id. The

alleged statutory violation stemmed out of the defendants’

contact with Illinois residents. See id. Accordingly, the

court denied the defendants’ motion to dismiss for lack of

personal jurisdiction. See id. This case is distinguishable

because Lathem’s only “contact” with Illinois occurs when its

customers—employers, not end users—reach out to purchase

its products and services. Bray’s and the putative class

members’ injury stems not from that contact but from the

employers’ subsequent use of Lathem Devices, which take

place wherever and in whatever manner the employers

choose. Accordingly, the injury here does not stem from

Lathem’s Illinois contacts and does not establish specific

jurisdiction.

The Court concludes Bray has failed to rebut Lathem’s

evidence demonstrating the lack of personal jurisdiction.

Lance Whipple’s Declaration noted that Lathem is

incorporated and headquartered in Georgia; does not have

any real estate, accounts, personal property, employees, or

physical presence in Illinois; does not target Illinois or

purposely directly sales into the state through advertising

and marketing or the use of sales or service representatives;

and did not even sell a Lathem Device to Bray’s employer

in Illinois. Because Bray has not refuted Mr. Whipple’s

statements, the Court accepts those statements as true. See

GCIU-Employer Retirement Fund v. Goldfarb Corp., 565

F.3d 1018, 1020 n.1 (7th Cir. 2009) (“[W]e accept as true

any facts contained in the defendant’s affidavits that remain

unrefuted by the plaintiff.”).

Based on the random and attenuated nature of Lathem’s

contacts with Illinois—and the lack of any suit-related

contact--the Court concludes that personal jurisdiction over

Lathem would not comport with traditional notions of fair

play and substantial justice. Accordingly, Lathem does not

have sufficient contacts with Illinois to warrant the exercise

of specific jurisdiction.

*5 Ergo, the motion of Defendant Lathem Time Corp

to dismiss for lack of personal jurisdiction [d/e 14] is

GRANTED.

The Clerk will terminate the Defendant’s motion to dismiss

for failure to state a claim [d/e 9].

The Clerk will enter Judgment and terminate this case.

All Citations

Slip Copy, 2020 WL 1492742

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Case: 1:20-cv-00512 Document #: 46-1 Filed: 04/27/20 Page 19 of 29 PageID #:263
Egan v. Huntington Copper, LLC, Not Reported in F.Supp.3d (2014)

2014 WL 585316

 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1

2014 WL 585316

Only the Westlaw citation is currently available.

United States District Court,

N.D. Illinois, Eastern Division.

Julia Egan, Plaintiff,

v.

Huntington Copper, LLC, Huntington Copper

Moody MacGuire, HCMM, Inc., Patrick

MacGuire, David Pineda, Robert Popkey,

Williams Shapcott, and John Morris, Defendants.

12 C 9034

|

Filed February 14, 2014

Attorneys and Law Firms

Matthew J. Blit, Levine & Blit, P.L.L.C., New York, NY,

Daniel R. Griffin, O'Connell Tivin Miller & Burns, LLC,

Chicago, IL, Lewis G. Spicer, Levine & Blit, PLLC Syracuse,

NY, for Plaintiff.

David Pineda, Coral Springs, FL, pro se.

Jennifer Anne Naber, Laner Muchin, Ltd., Chicago, IL, Gary

J. Wojtan, Wojtan, Vallone & Melin, P.C., Cheektowaga, NY,

Ryan D. Johnson, Johnson & Harris, LLC, Buffalo Grove, IL,

for Defendant.

MEMORANDUM OPINION AND ORDER

Gary Feinerman, United States District Judge

*1 Julia Egan brought this employment suit against several

defendants. One of the defendants, David Pineda, who is pro

se, filed a motion to dismiss for lack of personal jurisdiction

and for failure to state a claim under Federal Rules of Civil

Procedure 12(b)(2) and 12(b)(6). Doc. 19. The court deemed

the motion to be not only a motion to dismiss, but also a

motion to vacate a technical default against Pineda. Doc. 20

(Conlon, J.). After the case was reassigned to the undersigned

judge, the court granted the motion to the extent it sought

to vacate the technical default and entered and continued the

motion otherwise. Doc. 54.

The court now considers the portion of the motion that

seeks dismissal under Rule 12(b)(2) for lack of personal

jurisdiction. A federal court's “exercise of jurisdiction over

the defendant must be authorized by the terms of the forum

state's personal jurisdiction statute and also must comport

with the requirements of the Fourteenth Amendment's Due

Process Clause.” Felland v. Clifton, 682 F.3d 665, 672

(7th Cir. 2012). The Illinois long-arm statute permits a

court to exercise personal jurisdiction “on any ... basis now

or hereafter permitted by the Illinois Constitution and the

Constitution of the United States.” 735 ILCS 5/2–209(c).

Because “there is no operative difference between these two

constitutional limits,” a federal court sitting in Illinois and

evaluating a Rule 12(b)(2) motion asks “whether the exercise

of personal jurisdiction would violate federal due process.”

Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs.

of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010)

(citations omitted).

“Under the Supreme Court's well-established interpretation of

the Fourteenth Amendment's due process clause, a defendant

is subject to personal jurisdiction in a particular state only

if the defendant had certain minimum contacts with it such

that the maintenance of the suit does not offend traditional

notions of fair play and substantial justice.” Ibid. (internal

quotation marks omitted). The Supreme Court has “framed

the constitutional inquiry in terms of whether the defendant

purposefully avails itself of the benefits and protections

of conducting activities in the forum state.” Id. at 444

(internal quotation marks omitted). To be subject to personal

jurisdiction, “[t]he defendant's contacts must not be merely

random, fortuitous, or attenuated; rather, the ‘defendant's

conduct and connection with the forum state’ must be such

that it should ‘reasonably anticipate being haled into court

there.’ ” Citadel Grp. Ltd. v. Wash. Reg. Med. Ctr., 536

F.3d 757, 761 (7th Cir. 2008) (quoting Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 474–75 (1985)).

“Personal jurisdiction can be general or specific, depending

on the extent of the defendant's contacts.” Mobile

Anesthesiologists Chicago, 623 F.3d at 444. Egan pursues

only a theory of general jurisdiction against Pineda, Doc. 21

at 7–9, and therefore has forfeited any argument that specific

jurisdiction lies over him. See RAR, Inc. v. Turner Diesel,

Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997) (“RAR has never

alleged that Turner has such systematic contacts with Illinois.

RAR has thus waived any general jurisdiction argument, and

we may focus exclusively on specific jurisdiction.”) (citation

omitted). “A defendant is subject to general jurisdiction when

it has ‘continuous and systematic general business contacts'

with the forum state.” uBID, Inc. v. GoDaddy Grp., Inc.,

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623 F.3d 421, 425 (7th Cir. 2010) (quoting Helicopteros

Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415–

16 (1984)). “This is a demanding standard,” id. at 426, that

“requires that the defendant be ‘essentially at home’ in the

forum.” Abelesz v. OTP Bank, 692 F.3d 638, 651 (7th Cir.

2012) (quoting Goodyear Dunlop Tires Operations, S.A. v.

Brown, 131 S.Ct. 2846, 2851 (2011)).

*2 Although factual disputes are resolved in the plaintiff's

favor on a Rule 12(b)(2) motion, “once the defendant

has submitted affidavits or other evidence in opposition to

the exercise of jurisdiction, the plaintiff must go beyond

the pleadings and submit affirmative evidence supporting

the exercise of jurisdiction.” Purdue Research Found. v.

Sanofi–Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir. 2003)

(footnote omitted). Egan was employed by one or more of the

entity defendants—the parties dispute the identity of Egan's

employer(s), but there is no need to resolve the dispute for

purposes of this motion—in California. Doc. 1 at ¶ 22. The

complaint alleges that Pineda had an “ownership interest in

Huntington [the term Egan uses to describe her employer],

maintain[ed] day-to-day control over [Egan's] activities, and

maintain[ed] control over the essential functions of the

business.” Id. at ¶ 12. Egan's brief asserts that “Pineda

personally and through his agents acting upon his behalf and

at his direction, had continuous and systematic contact with

the State of Illinois during 2011, as they were making sales,

soliciting sales, and providing business consulting services to

business [sic] within Illinois out of the LLC's office located

in Deer Park, Illinois.” Doc. 21 at 8. To support this assertion,

Egan submits several exhibits: Huntington's registrations with

the North Carolina and Illinois Secretaries of State showing

that it was registered in North Carolina, that its principal place

of business was Ohio, and that it had an agent in Illinois,

Doc. 22–1 at 1–2; Doc. 22–4; and Better Business Bureau

printouts showing Huntington had an office in Illinois and that

complaints were filed against it by Illinois customers in 2011,

Doc. 22–2 at 1–2; Doc. 22–3 at 1–2.

Given these materials, as well as Pineda's admission that

Huntington was “authorized to do business in almost every

state” and did a “small fraction of [its] business” in Illinois,

Doc. 19 at 2–3, 10 (¶ 4), Egan has established that Huntington

had contacts in Illinois. But the question here concerns

Pineda's contacts with Illinois. On that subject, Pineda

submits an affidavit averring that he has lived in Florida

for the past ten years and in Pennsylvania before then, and

that during Pineda's eighteen-month tenure at Huntington,

he commuted from Florida to Huntington's headquarters in

Ohio, where his primary responsibility was the day-to-day

supervision of the Analysis Department. Doc. 19 at 9–10 (¶¶

2–3).

In an effort to counter Pineda's evidence and support her

submission that Pineda “resided in Illinois,” Doc. 21 at

8, Egan frivolously argues that records obtained from the

Cook County Recorder of Deeds show that “David Pineda”

owns “four residential properties in Chicago, Illinois; one

residential property in Oak Forest, Illinois; and one residential

property in Lynwood, Illinois at various times throughout

the last several decades, including the present.” Doc. 21 at

5. Those records fall far short of qualifying as “affirmative

evidence” that our David Pineda lived in Illinois. Purdue

Research Found., 338 F.3d at 783. The records show only that

properties in Illinois are owned by one person or some people

named “David Pineda.” Doc. 29 at 5. “David Pineda” is not an

uncommon name; a search of www.whitepages.com (visited

Feb. 14, 2014) shows that several David Pinedas reside in

Illinois and that several dozen live in the United States. Egan

provides no basis whatsoever to conclude or even suspect that

one of the David Pinedas (or the David Pineda) who owns

property in Illinois is our David Pineda.

Egan alternatively and implicitly suggests that the

Huntington's contacts in Illinois should be imputed to Pineda

for purposes of deciding whether general jurisdiction lies

over Pineda. Doc. 21 at 8–9. This suggestion is contrary to

settled precedent holding that a business's contacts cannot

be attributed to individual officers or directors for purposes

of determining whether personal jurisdiction lies over the

individuals. See Young v. Colgate–Palmolive Co., 790 F.2d

567, 569–70 (7th Cir. 1986) (“the individual board members

cannot be said to have transacted business within Illinois

merely because the corporation is qualified to do business

here”) (citing Mergenthaler Linotype Co. v. Leonard Storch

Enters., Inc., 383 N.E.2d 1379, 1385 (Ill.App.1978) (The

“plaintiff ... has apparently assumed that if jurisdiction

is found as to the [corporation] ... it must automatically

follow that jurisdiction exists as to the claim against [the

president]. But this is not so.... Any transaction of business

with Illinois residents was by the corporation and not by

the employee individually.”) (alterations in original)); W.

Va. Laborers Pension Trust Fund v. Caspersen, 829 N.E.2d

843, 849 (Ill.App.2005) (“As in Mergenthaler and Young,

personal jurisdiction must be established by the individual

employee's acts and not the acts of the corporation.”); Olinski

v. Duce, 508 N.E.2d 398, 400 (Ill.App.1987) (“A conclusion

that a foreign corporation is subject to Illinois jurisdiction

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Egan v. Huntington Copper, LLC, Not Reported in F.Supp.3d (2014)

2014 WL 585316

 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3

does not require the further conclusion that an employee,

shareholder, president, or member of the board of directors

of that corporation is also subject to Illinois jurisdiction.”);

Continental Cas. Co. v. Marsh, 2002 WL 31870531, at *6

(N.D.Ill.Dec. 23, 2002) (holding that a company's contacts in

Illinois “do[ ] not establish that [the defendant], as opposed

[the company], had any personal ties to Illinois”); Berg v.

Anderson, 1995 WL 476671, at *5 (N.D. Ill. Aug 8, 1995)

(“However, Anderson, who is sued individually, must be

distinguished from the corporation of which he is an officer

and a majority shareholder. None of the materials submitted

to the Court indicate that Anderson has sufficient systematic

and continuous contacts with the State of Illinois such that

he might reasonably anticipate being haled into court in

Illinois.”) (footnote omitted).

*3 Egan's invocation of the fiduciary shield doctrine, Doc.

21 at 9, fares no better. The doctrine prevents a court

assessing whether personal jurisdiction lies over an agent

from considering contacts that agent made in the State on

behalf of his or her employer. See ISI Int'l, Inc. v. Borden

Ladner Gervais LLP, 256 F.3d 548, 550 (7th Cir. 2001)

(“Illinois employs the fiduciary-shield doctrine, under which

a person who enters the state solely as fiduciary for another

may not be sued in Illinois.”) (citation omitted); Rollins

v. Ellwood, 565 N.E.2d 1302, 1318 (Ill.1990) (deeming it

“unfair and unreasonable ... to assert personal jurisdiction

over an individual who seeks the protection and benefits

of Illinois law, not to serve his personal interests, but to

serve those of his employer or principal”). Egan correctly

argues that doctrine generally does not apply to shareholders

and owners of companies because they act in their personal

interest while pursuing their company's business. See Elsner

v. Brown, 996 N.E.2d 84, 95–97 (Ill.App.2013); Fountain

Marketing Grp., Inc. v. Franklin Progressive Resources, Inc.,

1996 WL 406633, at *4 (N.D.Ill. Aug. 22, 1996) (“The

fiduciary shield defense does not apply if the employee in

question was also (or instead) acting to ‘serve his personal

interests.’ For example, an individual who is a high-ranking

company officer or shareholder has a direct financial stake

in the company's health and can be subjected to personal

jurisdiction for actions that result in both personal and

corporate benefit.”) (citing Rice v. Nova Biomedical Corp.,

38 F.3d 909, 912–13 (7th Cir. 1994)). But the doctrine plays

no role where, as here, the shareholder or owner (Pineda)

has no contacts with the forum (Illinois) in the first place.

See Flexicorps, Inc. v. Benjamin & Williams Debt Collectors,

Inc., 2007 WL 1560212, at *3 (N.D.Ill. May 29, 2007)

(“In order for the fiduciary shield doctrine to apply, the

individual first must have minimum contacts with the forum

state sufficient to establish personal jurisdiction.... Plaintiff

cannot use the fiduciary shield doctrine to expand this Court's

exercise of personal jurisdiction—the fiduciary shield is just

that, a shield, not a sword.”).

For the foregoing reasons, Pineda's Rule 12(b)(2) motion

to dismiss for lack of personal jurisdiction is granted. The

claims against Pineda are dismissed without prejudice. See

Sikhs for Justice v. Badal, 736 F.3d 743, 751 (7th Cir. 2013)

(“Ordinarily a dismissal for want of personal jurisdiction as

a result of improper service is without prejudice, leaving

the plaintiff free to refile the suit and seek to serve the

refiled complaint on the defendant.”). This disposition makes

it unnecessary to resolve Pineda's Rule 12(b)(6) motion to

dismiss for failure to state a claim, which is denied without

prejudice as moot.

All Citations

Not Reported in F.Supp.3d, 2014 WL 585316

End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.

Case: 1:20-cv-00512 Document #: 46-1 Filed: 04/27/20 Page 22 of 29 PageID #:266
Gullen v. Facebook.com, Inc., Not Reported in F.Supp.3d (2016)

2016 WL 245910

 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1

2016 WL 245910

Only the Westlaw citation is currently available.

United States District Court,

N.D. Illinois, Eastern Division.

Frederick William Gullen, on behalf of himself

and all others similarly situated, Plaintiff,

v.

Facebook.com, Inc., Defendant.

No. 15 C 7681

|

Signed 01/21/2016

MEMORANDUM OPINION AND ORDER

HON. JORGE L. ALONSO, United States District Judge

*1 Plaintiff sues defendant for its alleged violations of the

Illinois Biometric Information Privacy Act (“BIPA”), 740 Ill.

Comp. Stat. 14/1 et seq. Defendant has filed a motion to

dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2)

and (6) for lack of personal jurisdiction and failure to state a

claim. For the reasons set forth below, the Court grants in part

and strikes as moot in part the motion.

Facts

Facebook is a Delaware corporation with its principal place

of business in California. (Compl. ¶ 8.) Plaintiff is a citizen of

Illinois who does not use Facebook. (Id. ¶ 7.)

Plaintiff contends that Facebook obtained his biometric data

from a photo that was uploaded by a third party to Facebook.

It did so by using facial recognition technology, which “scans

every user-uploaded photo for faces, extracts...[the] biometric

identifiers of each face, and then uses that data to create

and store a template of each face.” (Id. ¶ 22.) Facebook's

“tag suggestion” feature, “which prompts a user to ‘tag’ a

preselected name to a particular face,” compares the face

templates of people in newly-uploaded photos with the face

templates already saved in Facebook's database. (Id. ¶ 24.)

“If no match is found, the user is prompted to 'tag' (i.e.,

identify by name) a person to that face, at which point the face

template and corresponding name identification are saved

in Facebook's face database. However, if a face template is

generated that matches a face template already in Facebook's

face database, then Facebook suggests that the user ‘tag’ to

that face the name already associated with [it].” (Id.)

When the photo of plaintiff was uploaded, “Facebook

automatically scanned and analyzed Plaintiff's face, extracted

his biometric identifiers..., and then used those biometric

identifiers to create a template of his face.” (Id. ¶ 30.)

Facebook then asked the person who uploaded the photo to

“tag” plaintiff's face, “at which point the [person] tagged the

name ‘Frederick W. Gullen’ to Plaintiff's face.” (Id. ¶ 31.)

Plaintiff, who never gave Facebook his permission to collect

or store any biometric information about him, alleges that

Facebook's actions violate BIPA. (Id. ¶ 33.) Defendant

contends that the Court lacks personal jurisdiction over it and

that, even if jurisdiction exists, the BIPA claim fails on its

merits.

Discussion

Personal Jurisdiction

Federal courts sitting in diversity may exercise personal

jurisdiction over a nonresident defendant only if the forumstate court would have such jurisdiction. Hyatt Int'l Corp.

v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). Illinois courts

can “exercise jurisdiction on any...basis now or hereafter

permitted by the Illinois Constitution and the Constitution of

the United States.” 735 Ill. Comp. Stat. 5/2-209(c). Because

the state and federal standards are not substantively different,

Hyatt, 302 F.3d at 715, the Court will address only the federal.

Plaintiff argues that the Court has specific personal

jurisdiction over Facebook. 1 That is true only if Facebook

has “ 'certain minimum contacts' with [Illinois] such that the

'maintenance of the suit does not offend 'traditional notions

of fair play and substantial justice.' ” Advanced Tactical

Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d

796, 801 (7th Cir. 2014) (quoting Int'l Shoe Co. v. Washington,

326 U.S. 310, 316 (1945)) (quotation omitted). For specific

jurisdiction:

*2 The relevant contacts are those that center on

the relations among the defendant, the forum, and the

litigation. Id. [Walden v. Fiore, ___ U.S. ___, 134 S. Ct.

1115, 1119 (2014)] (citing Keeton v. Hustler Mag., Inc., 465

U.S. 770, 775, 104 S. Ct. 1473, 79 L. Ed. 2d 790 (1984)).

Crucially, not just any contacts will do: “For a State

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to exercise jurisdiction consistent with due process, the

defendant's suit-related conduct must create a substantial

connection with the forum State.” Id. at 1121 (emphasis

added). The “mere fact that [defendant's] conduct affected

plaintiffs with connections to the forum State does not

suffice to authorize jurisdiction.” Id. at 1126. Furthermore,

the relation between the defendant and the forum “must

arise out of contacts that the ‘defendant himself’ creates

with the forum....” Id. at 1122 (quoting Burger King Corp.

v. Rudzewicz, 471 U.S. 462, 475, 105 S. Ct. 2174, 85 L.

Ed. 2d 528 (1985)). Contacts between the plaintiff or other

third parties and the forum do not satisfy this requirement.

Id.; see Walden, 134 S. Ct. at 1122.

Id.; see Walden, 134 S. Ct. at 1122 (“We have consistently

rejected attempts to satisfy the defendant-focused ‘minimum

contacts' inquiry by demonstrating contacts between the

plaintiff (or third parties) and the forum State.”) (citing

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.

408, 417 (1984)).

According to the complaint, Facebook's contacts with

Illinois are that it is registered to do business here, has a

sales and advertising office here, and “target[s] its facial

recognition technology to millions of users who are residents

of Illinois.” (Compl. ¶ 10.) The first two contacts have

no relationship to this suit, which arises from Facebook's

alleged collection of biometric data from a photo, not from

its sales, marketing, or other business activity in Illinois.

The third alleged contact, as the factual allegations of

plaintiff's complaint illustrate, is not true. Plaintiff alleges

that Facebook uses facial recognition technology on “every

user-uploaded photo,” not just on photos uploaded in or by

residents of Illinois. (Compl. ¶ 22.) Given this tacit admission

that Facebook's alleged collection of biometric information

is not targeted at Illinois residents, the third “contact”

becomes simply that Facebook operates an interactive website

available to Illinois residents.

The Court has not found a case analyzing specific jurisdiction

over a social media website. However, the Seventh Circuit has

rejected the notion that an online merchant's operation of an

interactive site is sufficient to confer specific jurisdiction on

it in every state from which the site can be accessed:

The interactivity of a website is...a poor proxy for adequate

in-state contacts. We have warned that “[c]ourts should be

careful in resolving questions about personal jurisdiction

involving online contacts to ensure that a defendant is not

haled into court simply because the defendant owns or

operates a website that is accessible in the forum state,

even if that site is ‘interactive.’ ” be2 LLC, 642 F.3d at

558 (citing Illinois v. Hemi Grp., LLC, 622 F.3d 754, 760

(7th Cir. 2010)). This makes sense; the operation of an

interactive website does not show that the defendant has

formed a contact with the forum state. And, without the

defendant's creating a sufficient connection (or “minimum

contacts”) with the forum state itself, personal jurisdiction

is not proper.

....Having an “interactive website” (which hardly rules

out anything in 2014) should not open a defendant up to

personal jurisdiction in every spot on the planet where that

interactive website is accessible.

Advance Tactical, 751 F.3d at 803; see be2 LLC v. Ivanov, 642

F.3d 555, 558-59 (7th Cir. 2011) (“Beyond simply operating

an interactive website that is accessible from the forum state,

a defendant must in some way target the forum state's market.

If the defendant merely operates a website, even a ‘highly

interactive’ website, that is accessible from, but does not

target, the forum state, then the defendant may not be haled

into court in that state without offending the Constitution.”)

(citations omitted). Because plaintiff does not allege that

Facebook targets its alleged biometric collection activities at

Illinois residents, the fact that its site is accessible to Illinois

residents does not confer specific jurisdiction over Facebook.

*3 The result is the same if, as plaintiff seems to urge,

this case is viewed as an intentional tort. The requirements

for specific jurisdiction in such a case are: (1) intentional

conduct...; (2) expressly aimed at the forum state; (3) with

the defendant's knowledge that the effects would be felt–

that is, the plaintiff would be injured–in the forum state.”

Tamburo v. Dworkin, 601 F.3d 693, 703 (7th Cir. 2010)

(citations omitted); see Walden, 134 S. Ct. at 1123 (“In [the]

context [of intentional torts], it is...insufficient to rely on a

defendant's random, fortuitous, or attenuated contacts or on

the unilateral activity of a plaintiff. A forum State's exercise

of jurisdiction over an out-of-state intentional tortfeasor must

be based on intentional conduct by the defendant that creates

the necessary contacts with the forum.”) (quotation omitted).

As noted above, plaintiff alleges that Facebook uses the tag

suggestions and facial recognition software on all uploaded

photos, not just those uploaded in or by residents of Illinois.

Moreover, plaintiff does not, and could not plausibly, allege

that Facebook knew an Illinois resident would upload a photo

of him and tag his name to it, thereby (allegedly) giving

Facebook access to plaintiff's biometric information. Thus,

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even if the Tamburo test applies here, plaintiff has not satisfied

it. 2

In short, plaintiff has not made a prima facie showing that the

Court has specific jurisdiction over Facebook. See Tamburo,

601 F.3d at 700 (when the issue of personal jurisdiction

is decided on the basis of written materials, plaintiff must

only make a prima facie case of personal jurisdiction) (citing

Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338

F.3d 773, 782 (7th Cir. 2003)). Therefore, the Court grants

Facebook's motion to dismiss for lack of personal jurisdiction.

Conclusion

For the reasons set forth above, the Court grants in part and

strikes as moot in part Facebook's Rule 12(b)(2) and (6)

motion to dismiss [18]. The Court grants the portion of the

motion seeking dismissal for lack of personal jurisdiction and

strikes as moot the portion seeking dismissal for failure to

state a claim. Plaintiff's motion to appoint interim co-lead

class counsel [33] is stricken as moot. Civil case terminated.

SO ORDERED.

All Citations

Not Reported in F.Supp.3d, 2016 WL 245910

Footnotes

1 Plaintiff does not argue that general jurisdiction exists.

2 The fact that plaintiff sustained the alleged injury in Illinois “is jurisdictionally relevant only insofar as it shows that the

defendant has formed a contact with the forum State. The proper question is not where the plaintiff experienced a

particular injury or effect but whether the defendant's conduct connects him to the forum in a meaningful way.” Walden,

134 S. Ct. at 1125.

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2010 WL 3452381

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2010 WL 3452381

Only the Westlaw citation is currently available.

United States District Court,

S.D. New York.

SCAROLA ELLIS LLP, Plaintiff,

v.

SKYWORKS VENUTRES, INC. and

Skyworks Interactive, Inc., Defendants.

No. 09 Civ. 10003(DLC).

|

Sept. 1, 2010.

Attorneys and Law Firms

Richard J.J. Scarola, Scarola Ellis LLP, New York, NY, for

Plaintiff.

Craig H. Kuglar, Krevolin & Horst, LLC, Atlanta, GA, for

Defendant.

OPINION & ORDER

DENISE COTE, District Judge.

*1 This action arises out of the efforts of plaintiff Scarola

Ellis LLP (“Scarola”), a New York law firm, to recoup certain

fees that it alleges a New Jersey-based client has not paid.

The defendants have moved to dismiss the action or, in the

alternative, to transfer the action pursuant to 28 U.S.C. §

1404(a) to New Jersey. For the following reasons, the motion

is granted in part.

BACKGROUND

Defendant Skyworks Ventures, Inc., f/k/a “Anedom

Company, Inc.” (“Ventures”) is a Delaware corporation with

its principal place of business in New Jersey. Defendant

Skyworks Interactive, Inc. (“Interactive” and together with

Ventures, the “defendants”), a wholly-owned subsidiary of

Ventures, is a New Jersey corporation with its principal place

of business in New Jersey. Ventures acquired Interactive's

predecessor-in-interest in December 2007. 1

Interactive sells applications (“apps”) for various platforms,

e.g., the Apple iPhone and Nintendo, who, in turn, sell these

apps to third parties. Interactive does not make any direct sales

to any entity or customer in New York. None of Interactive's

geographically-targeted advertising has ever been directed

at New York and Interactive is not registered to transact

business in New York. Neither Ventures nor Interactive has

any office in New York; owns, leases, or has any property,

real or personal, in New York; has any employee or any direct

customers in New York. None of Ventures' or Interactive's

revenues come directly from New York.

On June 4, 2007, Ventures signed a retainer agreement with

Scarola to assist with its capital raising efforts. Interactive,

which did not even exist at the time, was not a party

to the retainer agreement. Between June 2007 and July

2009, Scarola invoiced Ventures approximately $1.2 million

for legal services. All invoices from Scarola were sent to

Ventures and referenced Ventures as the client. Interactive

never executed an engagement letter with Scarola, or paid any

monies to Scarola. Ventures ceased paying its bills in a timely

way sometime in early 2009. Ventures claims that it has paid

Scarola approximately $921,896 in legal fees.

On September 30, 2009, Scarola filed a complaint against

Ventures and Interactive in the Southern District of New York.

See Scarola Ellis LLP v. Skyworks Ventures Inc., No. 09 Civ.

8309(DLC) (S.D.N.Y. filed Sept. 30, 2009). The case was

assigned to this Court. After the defendants were granted

two extensions of time to respond to the complaint—once

at the behest of the defendants, the other by stipulation of

the parties-Scarola dismissed its claims without prejudice

on December 1, three days before defendants were due to

respond and, apparently, file counterclaims against Scarola.

Six days later, on December 7, Scarola re-filed the identical

complaint against the defendants. See Scarola Ellis LLP v.

Skyworks Ventures Inc., No. 09 Civ. 10003(DLC) (S.D.N.Y.

filed Dec. 7, 2009). Scarola admits that it “determined to refile the action—this case-so as to be sure no preemptive action

was filed against it in a different jurisdiction.” On December

14, this case was accepted as related to No. 09 Civ. 8309.

From December 7, 2009 to March 31, 2010 (114 days after

filing), Scarola took no steps to serve the complaint on either

Ventures or Interactive.

*2 By letter dated March 31, Scarola advised this Court that

“an involuntary bankruptcy petition has been filed against

the defendants in this case” in the District of New Jersey

on March 31. Scarola was not initially a petitioning creditor

against Interactive, but later joined the petition against

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Interactive on May 3. Scarola requested that the Rule 16

pretrial conference in this action, scheduled for April 2,

be adjourned. Scarola's request was granted and the parties

were directed to submit a status letter by September 15.

Scarola now admits that its March 31 letter was incorrect

and misleading. Scarola was aware at the time that the

involuntary bankruptcy petition had been filed only against

Interactive, not Ventures. Scarola has “apologize[d]” to the

Court and admitted that it “should have written a clarification

or correction to this Court.”

On May 11 (155 days after the complaint was filed), Scarola

filed an involuntary bankruptcy petition against Ventures in

the District of New Jersey. On May 14, Ventures, but not

Interactive, filed a lawsuit against Scarola in New Jersey state

court (the “New Jersey action”). In the New Jersey action,

Ventures alleges, inter alia, that Scarola over billed Ventures

for its services and breached its fiduciary duties to Ventures

by, among other things, using Ventures' proprietary investor

lists to solicit business for itself. On May 21, Scarola filed a

notice of removal of the New Jersey action to United States

District Court for the District of New Jersey, where the case

is currently pending.

On June 7, the bankruptcy court overseeing the involuntary

bankruptcy petitions against Interactive and Ventures,

dismissed the petition against Interactive. Scarola never

advised this Court of the dismissal. On June 14, Scarola

purportedly served the summons and complaint against

Interactive on Sharon Fordham (“Fordham”), a director of

both Ventures and Interactive, at her office. According to

Fordham, the process server “handed [her] papers without

identifying them and told [her] to give them to Tom

Fordham.” Thomas Fordham is Sharon's husband and is also a

director of both Ventures and Interactive. Fordham “sign[ed]

a sheet acknowledging receipt.”

On June 28, the bankruptcy court dismissed the involuntary

bankruptcy petition filed by Scarola against Ventures. Scarola

did not advise this Court of the dismissal. On July 1, Scarola

purportedly served the summons and complaint on Ventures.

On July 15, the bankruptcy court found that Scarola had filed

the petition against Ventures “in bad faith in a two-party

dispute as a litigation tactic to force a settlement” and held

that punitive damages would be awarded after hearing further

evidence. See In re Skyworks Ventures, Inc., 431 B.R. 573, 574

(Bankr.D.N.J.2010). Specifically, the bankruptcy court found

that Scarola's petition

was an attempt to force Ventures to

settle the disputed claim of Scarola

Ellis by impeding the dismissal of the

Interactive case and throwing Ventures

into bankruptcy. This was a litigation

tactic that Scarola Ellis hoped would

shortcut the suit in the District Court

where they anticipated a defense and

counterclaim would be filed if they

served the summons and complaint.

*3 Id. at 579. A hearing on punitive damages is scheduled

in the bankruptcy court for September 8.

On July 6, the defendants filed the instant motion to dismiss

or transfer the action pursuant to the District of New Jersey.

The motion became fully submitted on July 30.

DISCUSSION

1. Ventures

The complaint must be dismissed against Ventures pursuant

to Rule 4(m), Fed.R.Civ.P. Rule 4 provides in pertinent part:

If a defendant is not served within 120

days after the complaint is filed, the

court—on motion or on its own after

notice to the plaintiff-must dismiss

the action without prejudice against

that defendant or order that service be

made within a specified time. But if

the plaintiff shows good cause for the

failure, the court must extend the time

for service for an appropriate period.

Fed.R.Civ.P. 4(m); Zapata v. City of New York, 502 F.3d 192,

195 (2d Cir.2007).

Scarola concedes that it did not serve Ventures within 120

days of filing the complaint. The complaint was filed on

December 7, 2009. While the action was automatically stayed

against Interactive pursuant to the involuntary bankruptcy

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petition filed in the District of New Jersey on March 31, 2010,

this stay did not apply to Ventures. The service clock therefore

continued to run until Scarola filed an involuntary bankruptcy

petition against Ventures on May 11, 2010—155 days after

the complaint was filed. The stay as to Ventures was lifted

on June 28 and Scarola purportedly served Ventures on July

1. Thus, Ventures was not served until 158 days after the

complaint was filed.

Scarola has not shown “good cause” for this failure. The

bankruptcy court found that Scarola deliberately did not serve

Ventures in this lawsuit as a tactical maneuver in an attempt

to force a settlement and avoid having counterclaims filed

against it. In any event, Scarola neither made any effort to

effect service on Ventures nor requested an extension of time

to serve. Although “district courts have the discretion to

grant extensions of the service period even where there is no

good cause shown,” Zapata, 502 F.3d at 196, the exercise of

such discretion is wholly unwarranted here. Accordingly, the

complaint is dismissed without prejudice against Ventures.

2. Interactive

Interactive argues that this action should be dismissed for

lack of personal jurisdiction, or, in the alternative, transferred

to the District of New Jersey pursuant to 28 U.S.C. §

1404(a). Scarola contends that there are sufficient facts

supporting personal jurisdiction over Interactive. If the Court

finds otherwise, Scarola requests additional discovery and

a hearing on the issue of personal jurisdiction. Scarola also

opposes transfer of this action to New Jersey on the grounds

that this was the “first-filed action.”

Even if personal jurisdiction exists as to Interactive, this

action should be transferred to the District of New Jersey

where the New Jersey action is pending. The relevant

law is well established. Section 1404 provides: “For the

convenience of parties and witnesses, in the interest of justice,

a district court may transfer any civil action to any other

district or division where it might have been brought.” 28

U.S.C. § 1404(a). District courts have “broad discretion in

making determinations of convenience under Section 1404(a)

and notions of convenience and fairness are considered on

a case-by-case basis.” D.H. Blair & Co., Inc. v. Gottdiener,

462 F.3d 95, 106 (2d Cir.2006). The movant bears the burden

of establishing, by “clear and convincing evidence,” that a

transfer of venue is warranted. N.Y. Marine & Gen. Ins. Co.

v. Lafarge N. Am., Inc., 599 F.3d 102, 114 (2d Cir.2010).

*4 If the transferee court would also have jurisdiction over

the case, the court must determine whether, considering the

“convenience of parties and witnesses” and the “interest

of justice,” a transfer is appropriate. In making that

determination, a court considers:

(1) the plaintiff's choice of forum, (2)

the convenience of witnesses, (3) the

location of relevant documents and

relative ease of access to sources of

proof, (4) the convenience of parties,

(5) the locus of operative facts, (6) the

availability of process to compel the

attendance of unwilling witnesses, and

(7) the relative means of the parties.

Id. at 112. A court may also consider “the forum's familiarity

with the governing law” and “trial efficiency and the interest

of justice, based on the totality of the circumstances.” Berman

v. Informix Corp., 30 F.Supp.2d 653, 657 (S.D.N.Y.1998).

If there are duplicative actions, a court must also consider

whether the first-filed rule applies. “The first-filed rule states

that, in determining the proper venue, where there are two

competing lawsuits, the first suit should have priority.” N.Y.

Marine, 599 F.3d at 112 (citation omitted); see also D.H.

Blair, 462 F.3d at 106. “This rule embodies considerations

of judicial administration and conservation of resources by

avoiding duplicative litigation and honoring the plaintiff's

choice of forum.” Emp'rs Ins. of Wausau v. Fox Ent't Grp.,

Inc., 522 F.3d 271, 275 (2d Cir.2008) (citation omitted).

There are two recognized exceptions to the first-filed rule:

“(1) where the ‘balance of convenience’ favors the secondfiled action, and (2) where ‘special circumstances' warrant

giving priority to the second suit.” Id. (citation omitted); see

also N.Y. Marine, 599 F.3d at 112. “Special circumstances

include manipulative or deceptive behavior on the part of the

first-filing plaintiff.” N.Y. Marine, 599 F.3d at 112. Thus, “the

first-filed rule is only a presumption that may be rebutted by

proof of the desirability of proceeding in the forum of the

second-filed action.” Id. at 113 (citation omitted).

Here, even if this action were filed first 2, special

circumstances exist to justify an exception to the first-filed

rule. First, there is evidence that this was an anticipatory

lawsuit. Scarola concedes that after it received “defendants'

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threat that they would imminently file their own action

presumably in New Jersey or some other inconvenient

jurisdiction, [Scarola] determined to re-file the action—this

case-so as to be sure no preemptive action was filed against it

in a different jurisdiction.” Additional evidence of Scarola's

manipulative behavior is its abandonment of its September

30, 2009 lawsuit as the defendants' time to answer neared,

and the fact that after filing this action, it neglected to serve

Ventures until well after 120 days had lapsed. Scarola also

did not serve Interactive until the very last possible day

under Rule 4(m). The bankruptcy court has found that Scarola

purposefully failed to prosecute this action and pursued its

involuntary bankruptcy petition against Ventures in bad faith

in an attempt to force defendants into a settlement and to

abandon their counterclaims against Scarola. Scarola has

offered no other plausible explanation for its behavior.

*5 Moreover, the balance of convenience and judicial

economy favor transfer. Interactive contends that personal

jurisdiction is lacking in this forum, but the parties do not

dispute that the District of New Jersey would have jurisdiction

over this matter. Although a plaintiff's choice of forum is

ordinarily accorded significant deference, such deference

is inappropriate where, as here, the plaintiff has failed to

diligently prosecute the action in its chosen forum. Transfer

will also promote trial efficiency because it will permit

consolidation of this action with the New Jersey action, both

of which arise out of the same transactions. Scarola itself

acknowledges that the two actions are “substantially similar .”

This factor therefore weighs heavily in favor of transfer.

The other § 1404(a) factors are either neutral or favor transfer.

All of Interactive's employees, witnesses and documents

are located in New Jersey. In addition, given that many

of Interactive's employees may no longer work for the

company, but are more likely to be in New Jersey than New

York, transfer will allow those employees to be subject to

compulsory process in New Jersey. The relative means of the

parties also favors transfer. Scarola, a New York law firm, is

obviously more capable of litigating outside its home district

than Interactive, a struggling start-up company with little or

no connections to New York. In any event, consolidating the

litigation between Scarola, Interactive, and Ventures in New

Jersey will allow all parties to conserve resources.

While Scarola's attorneys and billing records are located

in New York, Scarola has not shown that it would be

burdensome to litigate this action in New Jersey. Indeed,

it will already have to travel and transport its documents

to New Jersey as part of the New Jersey action. Scarola

claims that most of its work for Ventures and Interactive was

performed in New York, but it does not dispute that it chose

to service a New Jersey client or that some its meetings with

Ventures occurred in New Jersey. Thus the locus of operative

facts is a neutral factor. Lastly, both fora are equally familiar

with the governing law, and therefore this factor is neutral.

Accordingly, transfer of this action to the District of New

Jersey is clearly warranted.

CONCLUSION

Defendants' July 6, 2010 motion to dismiss the complaint or,

in the alternative, transfer this action, is granted in part. The

complaint is dismissed against Ventures without prejudice.

The Clerk of Court shall transfer the remainder of the action

against Interactive to the District of New Jersey.

SO ORDERED:

All Citations

Not Reported in F.Supp.2d, 2010 WL 3452381

Footnotes

1 Ventures' principal place of business was in New York until it relocated to New Jersey after it purchased Interactive in

December 2007.

2 Interactive argues that the New Jersey action qualifies as the “first-filed” action because Scarola was served with the

complaint in that action before Interactive was served in this case, and therefore the New Jersey court was the first to

obtain jurisdiction over the parties. This argument need not be addressed because even if this action were filed first,

transfer is nonetheless appropriate under the circumstances of this case.

End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works.

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