Toddy Gear, Inc. v. Cleer Gear, LLC
Filing
32
MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 11/22/2013: Defendant's Motion to Dismiss the Complaint, or, in the Alternative, to Transfer Venue to the Northern District of California 9 is denied. Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TODDY GEAR, INC.,
Plaintiff,
Case No. 13 C 1926
v.
Hon. Harry D. Leinenweber
CLEER GEAR, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Before
Complaint,
the
or,
Court
in
the
is
Defendant’s
Alternative,
Northern District of California.
to
Motion
to
Transfer
Dismiss
Venue
to
the
the
For the reasons stated herein,
the Motion is denied.
I.
BACKGROUND
Plaintiff Toddy Gear (“Plaintiff”) manufactures a product
known as the Toddy Smart Cloth, a microfiber designed for scratchfree cleaning of sensitive surfaces, such as phone or tablet
screens.
The Toddy is coated with an antimicrobial substance that
helps users clean, buff, and polish their screens.
The coating
helps prevent the buildup of mold or mildew on the cloth but does
not kill germs.
Plaintiff is an Illinois corporation with its
principal place of business in Chicago, Illinois.
Defendant Cleer Gear (“Defendant”) is alleged to have created
a knock-off product, called the Schatzii, that copied the Toddy’s
size, dimensions, color, and other characteristics.
Compl. ¶ 11.
Defendant sells the Schatzii to consumers over the internet and
distributes the Schatzii through various retailers.
Consumers in
Illinois purchase the product online and through retail stores,
including Macy’s and Target.
Plaintiff alleges that Defendant
promoted its product by stating falsely that it is antibacterial
and kills germs. For example, the Schatzii’s packaging states that
the product was “expertly created to keep your favorite gear
sparkling and germ free.”
that
Defendant
website.
lifted
Compl. ¶ 12.
text,
word
for
Plaintiff also alleges
word,
from
Plaintiff’s
Apparently, Defendant’s copying was so sloppy that links
imbedded in the website text went unchanged; consequently, users
who
clicked
on
links
on
Defendant’s
website
were
redirected
inadvertently to Plaintiff’s website.
Plaintiff alleges that Defendant’s marketing of the Schatzii
violates the Lanham Act and the Uniform Deceptive Trade Practices
Act.
Plaintiff also brings one count for tortious interference.
Defendant has moved to dismiss under Rule 12(b)(2) for lack of
personal jurisdiction and 12(b)(3) for improper venue.
In the
alternative, Defendant moves to transfer venue pursuant to 28
U.S.C. § 1404(a).
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II.
A.
ANALYSIS
Personal Jurisdiction
Because the Lanham Act does not authorize nationwide service
of process, see, Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 22
(2d Cir. 2004), a federal court sitting in Illinois may exercise
jurisdiction over a defendant only if authorized to do so by both
Illinois law and the United States Constitution.
Ivanov,
642
F.3d
555,
558
(7th
Cir.
2011);
BE2 LLC v.
FED.
R.
CIV.
P. 4(k)(1)(A). Illinois’s long-arm statute permits the exercise of
jurisdiction
to
the
full
extent
permitted
by
the
Constitution, so the state and federal inquiries merge.
federal
735 Ill.
Comp. Stat. 5/2-209(c); uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d
421, 425 (7th Cir. 2010).
Plaintiff has not argued that Defendant is subject to general
jurisdiction in Illinois, so the only question is whether Defendant
is subject to specific jurisdiction. A Court has specific personal
jurisdiction where (1) the defendant has “purposefully directed his
activities” at the forum state or “purposefully availed himself of
the privilege of conducting business in [that] state,” (2) the
alleged
injury
arises
out
of
the
defendant’s
forum-related
activities, and (3) the exercise of jurisdiction comports with
traditional notions of fair play and substantial justice.
v. Clifton, 682 F.3d 665, 673 (7th Cir. 2012).
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Felland
1.
Plaintiff
argues
Purposeful Direction
that
the
Court
has
jurisdiction
over
Defendant because Defendant aimed its tortious business activities
at Illinois. Before a Court may exercise jurisdiction over an outof-state defendant in this context, the Court must be satisfied
that the Defendant’s conduct was (1) intentional, (2) expressly
aimed at the forum state, and (3) undertaken with the knowledge
that the plaintiff would be injured in the forum state.
Tamburo v.
Dworkin, 601 F.3d 693, 703 (7th Cir. 2010); see also, Calder v.
Jones, 465 U.S. 783, 789 (1984) (Court had jurisdiction over out of
state defendants where plaintiff’s injuries were suffered in the
forum state and resulted from defendants’ allegedly intentional and
tortious actions).
In Tamburo, the plaintiff was an Illinois resident who created
an online database that pulled information from other websites.
601 F.3d at 698.
Defendants operated those other websites, and,
upon realizing that the plaintiff had obtained and repackaged their
information, posted accusations against the plaintiff and urged
readers to boycott his product.
Id.
The Court found that the
plaintiff had alleged properly that the defendants had interfered
with his business intentionally.
Id. at 704.
The Court explained
that, even though the defendants’ conduct occurred outside the
forum state, the defendants “specifically aimed their tortious
conduct at [the plaintiff] and his business in Illinois with the
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knowledge that he lived, worked, and would suffer the brunt of the
injury
there.”
Id.
at
706.
The
Court
concluded
that
the
Defendants “purposefully directed their activities at Illinois.”
Id. at 708.
Here, Plaintiff alleges that Defendant “made efforts to copy
[Plaintiff’s product] in every way.”
product
is
product],
alleged
including
to
be
the
“an
size,
exact
Compl. ¶ 13.
replica
dimensions,
of
Defendant’s
[Plaintiff’s
color
and
other
characteristics.” Id. at 11. Defendant’s product reaches Illinois
customers through direct internet sales and through retailers in
Illinois. With these allegations, Plaintiff has pled properly that
Defendant’s conduct was calculated to take Plaintiff’s business,
the effects of which would be felt in Illinois.
These allegations
satisfy the “purposeful direction” requirement. See also, Dudnikov
v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1078 (10th
Cir. 2008) (explaining that “actions that are performed for the
very purpose of having their consequences felt in the forum state
are more than
sufficient
to
support a
finding
of purposeful
direction under Calder”).
2.
Relation to Forum
The Court may exercise jurisdiction only if the alleged injury
arises out of the defendant’s forum-related activities.
Felland,
682 F.3d at 673. In Tamburo, the Court concluded that, because the
defendants “expressly aimed their allegedly tortious conduct at
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[the plaintiff] . . . for the purpose of causing him injury [in
Illinois],” the Plaintiff’s claims “arise directly out of the
individual defendants’ contacts with Illinois.”
Tamburo, 601 F.3d
at 709.
That reasoning applies here. Plaintiff alleges that Defendant
copied
Plaintiff’s
product
and
advertised
violation of federal and state law.
its
knock-off
in
The alleged false statements
were calculated to influence purchasing decisions by consumers, the
effects of which were felt in Illinois because the product was
purchased in Illinois.
These allegations are sufficient to show
that Defendant’s conduct was aimed at Plaintiff in Illinois, and
thus that Plaintiff’s injury arises out of Defendant’s forumrelated activities.
3.
Fair Play and Substantial Justice
The Court must consider whether exercising jurisdiction over
Defendant
would
offend
substantial justice.
310, 316 (1945).
defendant,
traditional
notions
of
fair
play
and
See, Int’l Shoe Co. v. Washington, 326 U.S.
Relevant factors include the burden on the
Illinois’s
interest
in
adjudicating
the
dispute,
Plaintiff’s interest in obtaining convenient and effective relief,
the interstate judicial system’s interest in obtaining the most
efficient resolution of controversies, and the shared interest of
the several States in furthering fundamental substantive social
policies.
Tamburo, 601 F.3d at 709.
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Illinois has a strong interest in providing a forum for its
residents
and
local
businesses
to
seek
redress
for
injuries
suffered within the state and inflicted by out-of-state actors.
Id. Plaintiff is an Illinois company, and Illinois has an interest
in preventing allegedly infringing products – such as Defendant’s
– from crossing its state lines. Eazypower Corp. v. ICC Innovative
Concepts Corp., No. 98-CV-3189, 1999 WL 66576, *4 (N.D. Ill. 1999).
Even though Defendant’s sales in Illinois are minimal, Defendant
still makes some sales to Illinois customers.
See, Dental Arts
Laboratory, Inc. v. Studio 360 The Dental Lab, LLC, No. 10-CV-4535,
2010 WL 4877708, *8 (N.D. Ill. 2010) (exercising jurisdiction over
a company that made sales into Illinois and was engaged in dispute
with Illinois company was fair). Applying these factors, the Court
is satisfied that its exercise of jurisdiction over Defendant
comports with traditional notions of fair play and substantial
justice.
The Court has personal jurisdiction over Defendant, so
the Motion to Dismiss for lack of jurisdiction is denied.
B.
Improper Venue
The Lanham Act has no special venue provision, so venue is
governed by 28 U.S.C. § 1391, the general federal venue statute.
Under the statute, venue is proper in a judicial district in which
any defendant resides.
28 U.S.C. § 1391(b).
For venue purposes,
a corporate defendant resides in a district where it is subject to
personal jurisdiction.
28 U.S.C. § 1391(c).
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Because Defendant is
subject to personal jurisdiction in Illinois for this action,
Defendant is also deemed to reside in Illinois.
This district is
a proper venue, so the Motion to Dismiss for lack of venue is
denied.
C.
Transfer of Venue
Even if venue is proper, Defendant asks this Court to transfer
the case to the Northern District of California. Transfer of venue
under § 1404(a) is appropriate if three conditions are met:
(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 interests of justice.
TruServ Corp. v.
Neff, 6 F.Supp.2d 790, 793 (N.D. Ill. 1998).
As discussed above, venue is proper in this District.
Venue
is also proper in the Northern District of California because
Defendant’s principal place of business is in California.
See, 28
U.S.C. § 1391(b),(c).
As to convenience, the defendant has the burden of showing
that the transferee forum is “clearly more convenient.”
Heller
Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293 (7th
Cir.
1989).
To
determine
whether
transfer
will
serve
the
convenience of the parties and witnesses and promote the interests
of justice, courts consider both private and public interests.
TruServ, 6 F.Supp.2d at 793.
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1.
Private Interest
Private interest factors include (1) the plaintiff’s choice of
forum, (2) the situs of material events, (3) the relative ease of
access to sources of proof in each forum including the courts’
power to compel the appearance of unwilling witnesses and the costs
of obtaining the attendance of witnesses, and (4) convenience to
the parties, including their residences and their abilities to bear
the expense of trial in a particular forum.
Id.
Plaintiff has chosen to bring suit in Illinois.
That choice
is given substantial weight, particularly because Plaintiff has
chosen its home forum.
Midas Int’l Corp. v. Chesley, No. 11 C
8933, 2012 WL 1357708, at *3 (N.D. Ill. April 19, 2012).
Defendant
asserts
that
all
of
the
allegedly
tortious
activities – testing, packing, labeling, shipping, marketing, and
the like – took place in the Northern District of California.
The
“material events” inquiry focuses on the location of the actions
creating the injury, not the location of the injury itself.
Event
News Network, Inc. v. Thill, No. 05 C 2972, 2005 WL 2978711, at *4
(N.D. Ill. Nov. 2, 2005).
Thus, this factor weighs in favor of
transfer to California.
It is likely that the relevant documentary evidence is located
in California.
But regardless of which court hears the case, the
evidence will need to be collected, copied, and sent to Plaintiff’s
counsel in Illinois. And the documentary evidence involved in this
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case should be readily transferable, so transporting it does not
pose a huge burden upon either party.
See, First Nat’l Bank v. El
Camino Resources, Ltd., 447 F.Supp.2d 902, 912 (N.D. Ill. 2006).
This factor is neutral.
Defendant asserts that California would be more convenient for
witnesses.
It
points
to
several
witnesses,
not
Defendant’s
employees, who live in California and would present relevant
testimony.
At the same time, these witnesses do not necessarily
need to answer interrogatories from or give depositions in the same
district where the Court sits.
These days, it is increasingly
practical to conduct discovery electronically and remotely.
There
may be some inconvenience when trial comes around, but Defendant
has not presented evidence that the burden would be particularly
substantial, or, for the witnesses who cannot or will not travel,
that their deposition testimony could not be used in lieu of inperson testimony at trial.
Overall, this factor favors transfer,
but only slightly so.
Defendant, based in California, complains that litigating in
Illinois is inconvenient.
Plaintiff, an Illinois corporation,
prefers its home state over California.
This factor is neutral.
Overall, the private interest factors balance evenly on both
sides.
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2.
Public Interest
Public interest factors include (1) the relation of the
community to the issue of the litigation and the desirability of
resolving
controversies
in
their
locale,
(2)
the
court’s
familiarity with applicable law, and (3) the congestion of the
respective court dockets and the prospects for earlier trial.
TruServ, 6 F.Supp.2d at 793.
As discussed above, the injury occurred in Illinois, and
Illinois courts have an interest in adjudicating controversies
involving injuries to Illinois citizens.
This Court and the
Northern District of California are equally familiar with the
federal law on which Plaintiffs rely.
State law will play a role,
but the parties have not briefed whether that will be Illinois law.
Finally, this District and the Northern District of California have
similarly busy dockets.
The public interest factors are neutral.
The private interest factors are evenly balanced, as are the public
interest factors.
“[W]hen the inconvenience of the alternative
venues is comparable there is no basis for a change of venue; the
tie is awarded to the plaintiff.” In re Nat’l Presto Indus., Inc.,
347 F.3d 662, 665 (7th Cir. 2003).
Certainly, Defendant has not
met its burden of showing that the proposed alternate forum is
“clearly more convenient.”
denied.
Corp.,
Thus, the Motion to Transfer Venue is
See also, Eazypower Corp. v. ICC Innovative Concepts
No.
98-CV-3189,
1999
WL
66576,
- 11 -
*5
(N.D.
Ill.
1999)
(explaining that transfer should be denied where the transfer would
simply
shift
the
inconvenience
from
the
defendant
to
the
plaintiff).
III.
CONCLUSION
For the reasons stated herein, Defendant’s Motion to Dismiss,
or, in the Alternative, to Transfer Venue [ECF No. 9] is denied.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Date:11/22/2013
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