Tenan v. Strategiq Commerce, LLC et al
Filing
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MEMORANDUM Opinion and Order Signed by the Honorable John W. Darrah on November 12, 2015. Mailed notice (ph, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LORI TENAN
Plaintiff,
v.
STRATEGIQ COMMERCE, LLC,
Defendant.
)
)
)
) Case No. 15-cv-5170
)
) Judge John W. Darrah
)
)
)
MEMORANDUM OPINION AND ORDER
Plaintiff Lori Tenan filed suit against Defendant StrategIQ Commerce, LLC, on
June 11, 2015, alleging breach of contract and violation of the Illinois Sales Representative Act.
820 ILCS 120/0.01 et seq. Defendant moves to stay these proceedings or, in the alternative, to
dismiss this action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(2). Plaintiff opposes Defendant’s Motion. For the reasons provided below, Defendant’s
Motion [10] is denied.
BACKGROUND
The following is taken from the Complaint and the parties’ submissions. Plaintiff is a
resident of the State of California. (Dkt. 1 ¶ 1.) StrategIQ is an Illinois corporation organized
under the laws of the State of Illinois with its principal offices in Cook County, Illinois. (Dkt. 1
¶ 2.) Plaintiff began working for StrategIQ in the fall of 2008. In November 2012, Plaintiff and
StrategIQ entered into an employment agreement. This employment agreement allowed Plaintiff
to opt out of employment and become an independent contractor instead. (Dkt. 1 ¶¶ 8 - 10; Dkt
11.) On May 18, 2013, Plaintiff exercised that right by providing written notice that she was
exercising her option to terminate her employment and become an independent contractor. (Dkt.
1 ¶ 11.) StrategIQ then terminated Plaintiff’s agreement. (Dkt. 1 ¶ 12.)
On August 7, 2013, while still employed by StrategIQ, Plaintiff filed suit in the Circuit
Court of Cook County, Chancery Division (“Circuit Court”), alleging breach of her employment
contract for StrategIQ’s alleged failure to recognize her independent contractor status. (Dkt. 11.)
StrategIQ moved to dismiss that complaint on September 9, 2013. (Dkt. 11.) Plaintiff then filed
a motion to voluntarily dismiss her case and filed suit in Los Angeles County Superior Court.
(Dkt. 15.) StrategIQ terminated Plaintiff on November 15, 2014. Plaintiff’s suit in California
was subsequently dismissed when the California court ruled that the forum selection clause in
her employment contract was enforceable. (Dkt. 11.) Plaintiff filed a Complaint in this Court on
June 11, 2015. (Dkt. 1.) StrategIQ now moves to stay this litigation pursuant to the Colorado
River Abstention Doctrine or, in the alternative, to dismiss this action for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). Colorado River Water
Conservation District v. United States, 424 U.S. 800 (1976).
LEGAL STANDARD
Under the rule established in Colorado River, a federal court may stay or dismiss a suit in
federal court when a concurrent state court case is underway if it would promote “wise judicial
administration” and only under exceptional circumstances. Colorado River, 424 U.S. at
817 –18; Freed v. J.P. Morgan Chase Bank, N.A., 756 F.3d 1013, 1018 (7th Cir. 2014). To
determine whether a stay is appropriate, the court must determine: (1) whether the state and
federal court actions are parallel; and (2) if the proceedings are parallel, whether abstention is
proper. Id. The court must weigh ten non-exclusion factors to determine whether abstention is
proper. “The factors are: (1) whether the state has assumed jurisdiction over property; (2) the
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inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; (4) the
order in which jurisdiction was obtained by the concurrent forums; (5) the source of governing
law, state or federal; (6) the adequacy of state court action to protect the federal plaintiff’s rights;
(7) the relative progress of state and federal proceedings; (8) the presence or absence of
concurrent jurisdiction; (9) the availability of removal; and (10) the vexatious or contrived nature
of the federal claim.” Freed v. J.P. Morgan Chase Bank, N.A., 756 F.3d 1013, 1018 (7th Cir.
2014); Tyrer v. City of South Beloit, Ill., 456 F.3d 744, 754 (7th Cir. 2006). If the court finds that
the actions are not parallel, the Colorado River doctrine does not apply. Id.
ANALYSIS
Motion to Stay
StrategIQ’s Motion to Stay is based primarily on the Agreed Order of Voluntary
Dismissal Without Prejudice issued by the Circuit Court. While Plaintiff’s suit was ongoing,
StrategIQ filed an Emergency Motion for the return of its property and to prevent Plaintiff from
destroying potentially relevant evidence. (Dkt. 11.) On January 13, 2014, the Circuit Court
ordered the parties to negotiate the return of StrategIQ’s property. While the parties were
negotiating Plaintiff’s compliance, Plaintiff filed a motion to voluntarily dismiss her suit. After
Plaintiff complied with the January 13 Order, the Circuit Court entered an Agreed Order of
Voluntary Dismissal Without Prejudice (“Agreed Order”). The Agreed Order states:
2.
Notwithstanding this Order of Voluntary Dismissal, the parties recognize
that each party has ongoing discovery and preservation obligations that must be
satisfied in accordance with this Court’s prior Orders. Should a party fail to
comply with this Court’s prior Order regarding discovery and preservation, then
the parties consent to this Court presiding over those motions.
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(Dkt. 11 Exh. A-7.) StrategIQ argues that because the Circuit Court retained jurisdiction over
the parties’ preservation and discovery obligations, Plaintiff’s state lawsuit is ongoing and there
is a possibility that the parties will be litigating in two different forums. (Dkt. 10 ¶ 6.)
The Colorado River doctrine is inapplicable here. The Agreed Order plainly states that
that the Circuit Court has jurisdiction “[s]hould a party fail to comply with this Court’s prior
Order regarding discovery and preservation . . . .” Plaintiff’s Complaint alleges breach of
contract and a violation of the Illinois Sales Representative Act. The Agreed Order references
the discovery and preservation issues in relation to the January 13 Order. These are separate
issues. Should either party fail to comply with that Order and file a motion accordingly,
compliance with that Order is a separate matter from Plaintiff’s claims here. By StrategIQ’s own
admission, the Circuit Court took Plaintiff’s Motion for Voluntary Dismissal under advisement
until she complied with its January 13 Order. StrategIQ contends that they “remain concerned”
that Plaintiff failed to turn over several emails but does not provide any evidence to support that
contention. Even if StrategIQ chooses to file a motion regarding these emails, the Circuit
Court’s jurisdiction would be limited to enforcement of its prior Order, and not the merits of
Plaintiff’s dismissed claims. Further, StrategIQ cannot effectively ask this Court to invoke the
Colorado River doctrine by filing a complaint in state court concurrent with their Reply to
Plaintiff’s Response to their Motion here1.
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StrategIQ notes that they filed a complaint in state court, seeking damages and
injunctive relief arising from Plaintiff’s alleged breaches of her employment agreement, breach
of fiduciary duty, and tortious interference with prospective economic advantage. (Dkt. 19.)
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Motion to Dismiss Per Federal Rule of Civil Procedure 12(b)(2)
Defendant argues that Plaintiff’s Complaint must be dismissed because summons issued
unsigned and unsealed. A defendant may move to dismiss a claim for lack of personal
jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Federal Rule of Civil Procedure
4(a)(1) provides that “[a] summons must: . . . (F) be signed by the clerk; and (G) bear the court’s
seal. Fed. R. Civ. P. 4. However, the court may permit a summons to be amended. Fed. R. Civ.
P. 4(a)(2). Except in exigent circumstances, “courts freely allow amendments to service of
process so as not to deny a plaintiff his day in court for failing to observe mere technicalities.”
Richard v. Sun Elec. Corp., No. 89 C 20152, 1990 WL 39801, at *1 (N.D. Ill. Mar. 15, 1990).
While the summons was unsigned by a clerk of the court, it was issued to StrategIQ on
June 12, 2015, and it was returned executed. StrategIQ had notice of Plaintiff’s suit and
responded accordingly. Thus, StrategIQ’s motion to dismiss Plaintiff’s claim for lack of
personal jurisdiction is denied.
CONCLUSION
For the reasons set forth above, Defendant’s Motion [10] is denied.
Date: November 12, 2015
______________________________
JOHN W. DARRAH
United States District Court Judge
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