JT's Frames, Inc. v. Casares et al

Filing 75

MEMORANDUM OPINION AND ORDER Signed by the Honorable Robert M. Dow, Jr. on 2/13/2018. Plaintiff's motion to take limited jurisdictional discovery 67 is granted and the Marketech Defendants motion to dismiss 46 is denied without prejudice to renewal following jurisdictional discovery. This case is set for status hearing on March 6, 2018 at 9:00 a.m. The parties are directed to file a proposed schedule for jurisdictional discovery no later than March 1, 2018.Mailed notice(cdh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JT’S FRAMES, INC.,
Plaintiff,
v.
JESSE CASARES, et al.,
Defendants.

)
)
)
)
)
)
)
)
)

Case No. 16-cv-2504
Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER
Plaintiff JT’s Frames, Inc. (“Plaintiff”) brings this proposed class action against
Defendants Jesse Casares, Joe Casares, Patricia Bezabaleta a/k/a Patricia Zabeleta, David A.
Ozuna, John Medina, Marketech d/b/a Interfax.net, Avigdor Tessler, Jay M. Kamenetsky, and
Does 1-10 for alleged violations of the Telephone Consumer Protection Act of 1991 (“TCPA”),
as amended by the Junk Fax Prevention Act of 2005 (“JFPA”).1 In this opinion, the Court will
refer to Defendants Marketech Corp. (“Marketech”), Avigdor Tessler (“Tessler”) and Jay M.
Kamenetsky (“Kamenetsky”) collectively as “the Marketech Defendants.” Currently before the
Court is the Marketech Defendants’ motion to dismiss Plaintiff’s Second Amended Complaint
(“SAC”) for lack of subject matter jurisdiction, lack of personal jurisdiction, and failure to state a
claim [46], as well as Plaintiff’s motion to take limited jurisdictional discovery [67]. For the
reasons explained below, Plaintiff’s motion to take limited jurisdictional discovery [67] is
granted and the Marketech Defendants’ motion to dismiss [46] is denied without prejudice to
renewal following limited jurisdictional discovery. This case is set for status hearing on March

1

7915 Westglen LLC and Orie Rechtman were also named as defendants in Plaintiff’s Second Amended
Complaint, but were voluntarily dismissed on June 19, 2017. See [72].

6, 2018. The parties are directed to file a proposed schedule for jurisdictional discovery no later
than March 1, 2018.
I.

Background
Plaintiff is an Illinois corporation. Plaintiff alleges on information and belief that

Marketech is a Texas corporation; that Tessler is Marketech’s President and CEO and a resident
of Texas; and that Kamenetsky is Marketech’s Vice President of Sales and also a resident of
Texas. Plaintiff alleges generally that the Court “has personal jurisdiction over Defendants,”
including the Marketech Defendants, “because Defendants transact business within this judicial
district, have made contacts within this judicial district, and have committed tortious acts within
this judicial district.” [38] at 3.
In particular, Plaintiff alleges that between September 20 and October 6, 2015, a fax
advertisement (the “Fax”) “was transmitted to Plaintiff’s fax number by Defendants utilizing a
telephone facsimile machine, computer, or other device.” [38] at 5; see also [38-1] (copy of the
Fax). The Fax is an advertisement of a Texas travel agency (the “Travel Agency”) owned and
operated by Defendants Jesse Casares, Joe Casares, and Zabeleta (collectively, the “Travel
Agency Defendants”) promoting an “END OF SUMMER Super Sale” for a variety of vacation
destinations. “The Fax transmitted successfully and a copy of it was printed from Plaintiff’s fax
machine, using Plaintiff’s paper and ink toner.” [38] at 5.
Plaintiff alleges on information and belief that Marketech is a fax broadcaster and
“physically transmitted the Fax to Plaintiff.” [38] at 6. Plaintiff also alleges on information and
belief that Marketech “selected Plaintiff’s fax number from a database of recipient fax numbers
that [it] maintain[s] and use[s]” and that it “actively solicit[s] third party advertisers to compile
the[] database.”

Id.

Plaintiff further alleges on information and belief that Marketech

2

“determined the number and frequency of transmissions for the Fax,” “created and w[as]
responsible for the opt-out notice on the Fax,” and “handled the opt-out requests for the Fax.”
Id. Plaintiff alleges that “[t]he phone number provided on the Fax for removal of fax numbers”
is Marketech’s number. Id. Plaintiff also alleges on information and belief that Tessler and
Kamenetsky “had direct and personal participation in creating the opt-out notice for the Fax,
handling the opt-out requests for the Fax, in the decision of sending the Fax, maintaining and
using the database of recipient fax numbers to which the Fax was sent, and in determining the
number and frequency of transmissions for the Fax.” Id.
Based on these allegations, Plaintiff alleges a single claim against all Defendants for
violation of the JFPA, 47 U.S.C. § 227. Plaintiff alleges that the Fax was unsolicited and that
each Defendant had a high degree of involvement in sending the Fax. Plaintiff also alleges that
the Fax did not have the opt-out notice that is required to maintain an affirmative defense under
the JFPA.
II.

Analysis
The Marketech Defendants move to dismiss Plaintiff’s SAC pursuant to Rule 12(b)(1) for

lack of subject matter jurisdiction, Rule 12(b)(2) for lack of personal jurisdiction, and Rule
12(b)(6) for failure to state a claim. The threshold jurisdictional issues must be addressed first.
See Leibovitch v. Islamic Republic of Iran, 188 F. Supp. 3d 734, 744 (N.D. Ill. 2016). Because
“subject-matter jurisdiction generally should be considered before personal jurisdiction,” the
Court will begin its analysis with the Marketech Defendants’ Rule 12(b)(1) argument. Central
States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 939 n.2
(7th Cir. 2000); see also El-Khader v. Perryman, 264 F. Supp. 2d 645, 648 (N.D. Ill. 2003).

3

A.

Subject Matter Jurisdiction

Defendants challenge Plaintiff’s standing to bring a JFPA claim. A motion to dismiss for
lack of standing is a challenge to the court’s subject matter jurisdiction under Rule 12(b)(1). See
Scanlan v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012); Jimenez v. Illinois, 2012 WL 174772,
at *2 (N.D. Ill. Jan. 18, 2012); Smith v. GC Services Limited Partnership, 2017 WL 2629476, at
*1 (S.D. Ind. June 19, 2017). In considering a motion under Rule 12(b)(1), the Court “accept[s]
as true all well-pleaded factual allegations and draw[s] reasonable inferences in favor of the
plaintiff[].” Bultasa Buddhist Temple of Chicago v. Nielsen, 878 F.3d 570, 573 (7th Cir. 2017).
The Marketech Defendants argue that, pursuant to Stoops v. Wells Fargo Bank, N.A., 197
F. Supp. 3d 782, 805 (W.D. Pa. 2016), Plaintiff lacks standing to bring this suit because it is a
“professional plaintiff” that has been the lead plaintiff in at least four prior TCPA cases. [47] at
14. The Marketech Defendants surmise that “Plaintiff is a junk fax litigation business that
happens to sell frames on the side, rather than a frame business that has been unfortunately
injured.” Id.
Stoops does not compel dismissal of Plaintiff’s case for lack of subject matter
jurisdiction. Most obviously, it is an out-of-circuit district court case that has no precedential
value here. Further, it was decided at summary judgment based on undisputed facts in the
record, not on a motion to dismiss based on the Marketech Defendants’ assumption that Plaintiff
must be a professional plaintiff given its participation in other TCPA lawsuits. The district court
in Stoops held that a Plaintiff who admittedly purchased cell phones and cell phone minutes for
the sole purpose of receiving calls to enable her to file TCPA lawsuits did not suffer an economic
“injury in fact” because “a plaintiff ‘cannot manufacture standing by choosing to make
expenditures based on hypothetical future harm that is not certainly impending.’” Stoops, 197 F.

4

Supp. 2d at 801 (quoting Clapper v. Amnesty Int’l USA, 568 U.S. 398, 402 (2013)). In this case,
the Marketech Defendants do not allege, nor provide any evidence that, Plaintiff purchased its
fax machine and fax machine supplies simply to receive junk faxes and file JFPA claims. To the
contrary, Plaintiff alleges that it received an unsolicited Fax from the Marketech Defendants,
which used Plaintiff’s fax paper and toner, caused wear and tear on its fax machine, and tied up
its fax line. For these reasons, dismissal for lack of subject matter jurisdiction would not be
warranted even if Stoops were binding on this Court.
B.

Personal Jurisdiction
1.

Legal Standard

A complaint need not allege personal jurisdiction, but once a defendant moves to dismiss
on that ground, the plaintiff bears the burden of establishing that jurisdiction is proper. Purdue
Res. Found v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). As a general matter,
the Court accepts as true the factual allegations relevant to jurisdiction made in the plaintiff’s
complaint, and draws all reasonable inferences in its favor. Central States, Se. & Sw. Area
Pension Fund v. Phencorp Reinsurance Co., Inc., 440 F.3d 870, 878 (7th Cir. 2006). However,
to the extent that a defendant submits declarations opposing jurisdiction or contradicting the
plaintiff’s allegations, the plaintiff must go beyond the pleadings and submit affirmative
evidence supporting the exercise of jurisdiction. Purdue, 338 F.3d at 783.
Where, as here, the defendant moves to dismiss a complaint for lack of personal
jurisdiction “based on the submission of written materials, without the benefit of an evidentiary
hearing, the plaintiff need only make out a prima facie case of personal jurisdiction.” GCIUEmployer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). The Court must
“resolve all factual disputes in the plaintiff’s favor.” Mohammed v. Uber Technologies, Inc., 237

5

F. Supp. 3d 719, 733 (N.D. Ill. 2017); see also Purdue Research Found., 338 F.3d at 782.
However, “factual assertions [that] amount only to vague generalizations or unsupported
allegations” are “not enough to support personal jurisdiction.” Richter v. INSTAR Enters. Int’l,
Inc., 594 F. Supp. 2d 1000, 1016 n.6 (N.D. Ill. 2009); see also In re Testosterone Replacement
Therapy Prod. Liab. Litig. Coordinated Pretrial Proceedings, 136 F. Supp. 3d 968, 972–73
(N.D. Ill. 2015).
Here, Plaintiff seeks leave to take limited discovery directed to personal jurisdiction.
While “[t]he Federal Rules of Civil Procedure allow liberal discovery into relevant matters,
including discovery directed to personal jurisdiction,” Gilman Opco LLC v. Lanman Oil Co.,
Inc., 2014 WL 1284499, at *6 (N.D. Ill. Mar. 24, 2014), “[a]t a minimum, the plaintiff must
establish a colorable or prima facie showing of personal jurisdiction before discovery should be
permitted.” Central States, 230 F.3d at 946. “Generally, courts grant jurisdictional discovery if
the plaintiff can show that the factual record is at least ambiguous or unclear on the jurisdiction
issue.” Ticketreserve, Inc. v. viagogo, Inc., 656 F. Supp. 2d 775, 782-83 (N.D. Ill. 2009). “The
standard is low, but a plaintiff’s request will be denied if it is based only upon unsupported
assertions of personal jurisdiction.” Id. (citing Central States, 230 F.3d at 946).
In sum, the Court must consider whether Plaintiff “has met its burden of demonstrating
the existence of general personal jurisdiction, or, alternatively, has established a prima facie case
for personal jurisdiction, such that it should [be] allowed to conduct discovery.” Purdue, 338
F.3d at 782.
2.

Analysis

Plaintiff brings this lawsuit for violation of the JFPA. Plaintiff does not contend that
there is any federal statute authorizing nationwide service of process in such cases. Thus, this

6

Court sitting in Illinois may exercise jurisdiction over the Marketech Defendants only if
authorized both by the United States Constitution and Illinois law. BE2 LLC v. Ivanov, 642 F.3d
555, 558 (7th Cir. 2011) (citing Fed. R. Civ. P. 4(k)(1)(A)); Tamburo v. Dworkin, 601 F.3d 693,
700 (7th Cir. 2010)). The Illinois long-arm statute “permits its courts to exercise personal
jurisdiction on any basis permitted by the constitutions of both Illinois and the United States.”
BE2 LLC, 642 F.3d at 558; see also 735 ILCS 5/2-209(c). Thus “the state statutory and federal
constitutional inquiries merge.” Tamburo, 601 F.3d at 700.
The federal test for personal jurisdiction under the Due Process Clause of the Fourteenth
Amendment authorizes a court to exercise jurisdiction over a non-resident defendant only if the
defendant has “certain minimum contacts with [the state] such that the maintenance of the suit
does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
In other words, “it 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).
The requirement that a defendant have “minimum contacts” with the forum ensures that a nonresident defendant will not be forced to litigate in a jurisdiction as a result of “random, fortuitous,
or attenuated contacts” with the forum or the unilateral activity of the plaintiff; the defendant
“should reasonably anticipate being haled into court” there. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 474-75 (1985).
“Personal jurisdiction can be either general or specific, depending on the extent of the
defendant’s contacts with the forum state.” uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425
(7th Cir. 2010). In their motion to dismiss, the Marketech Defendants argue that neither type of

7

personal jurisdiction exists and submit declarations disclaiming any involvement with the Fax
that Plaintiff received in alleged violation of the JFPA. In response, Plaintiff contends only that
the Court has specific personal jurisdiction over the Marketech Defendants, so it is unnecessary
to analyze whether general personal jurisdiction exists. Plaintiff also moves for leave to take
jurisdictional discovery.
To establish specific personal jurisdiction, Plaintiff must show that its claim against the
Marketech Defendants “arise[s] out of [the Marketech Defendants’] constitutionally sufficient
contacts with the state.” uBid, 623 F.3d at 425. Whether specific personal jurisdiction over a
defendant exists depends on “‘the relationship among the defendant, the forum, and the
litigation.’”

Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014) (quoting Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 775 (1984)). Specific personal jurisdiction exists only if “the
defendant’s suit-related conduct … create[s] a substantial connection with the forum State.” Id.
The “three essential requirements” for establishing specific personal jurisdiction are: “(1) the
defendant must have purposefully availed himself of the privilege of conducting business in the
forum state or purposefully directed his activities at the state; (2) the alleged injury must have
arisen from the defendant’s forum-related activities; and (3) the exercise of jurisdiction must
comport with traditional notions of fair play and substantial justice.” Felland v. Clifton, 682
F.3d 665, 673 (7th Cir. 2012) (citations omitted).
Plaintiff’s SAC, viewed alone, contains allegations that make out a prima facie case for
specific personal jurisdiction. The SAC alleges on information and belief that Marketech is a fax
broadcaster and transmitted the Fax to Plaintiff’s fax machine in Illinois. [38] at 6. It also
alleges on information and belief that Marketech selected Plaintiff’s fax number from its
database, determined the number and frequency of transmissions of the Fax, and created and was

8

responsible for the Fax’s opt-out notice. Id. It further alleges on information and belief that
Tessler and Kamenetsky participated in all of these activities. Id.
However, as they are allowed to do in a Rule 12(b)(2) motion, see Purdue, 338 F.3d at
783, the Marketech Defendants submit declarations from Tessler and Kamenetsky denying any
involvement with the Fax. In particular, Tesslor states in his declaration that Marketech does not
provide any fax broadcasting services, does not maintain any “database” of intended fax
recipients, and does not solicit any third party to create or maintain such a database. See [47-2]
at ¶¶ 7-8. Tesslor and Kamenetsky both state in their declarations that they had no prior
knowledge of business dealings or interactions with the Travel Agency Defendants and no
personal participation in the design, content, or transmission of the Fax or its opt-out notice. Id.
at ¶¶ 12-13; [47-3] at ¶¶ 9-10. According to their declarations, the Marketech Defendants did not
design, handle or contribute to any “opt-out” requests because they are not involved in fax
broadcasting and, to the best of Tesslor and Kamenetsky’s knowledge, are not associated with
the Travel Agency Defendants in any way. [47-2] at ¶¶ 7, 12, 13; [47-3] at ¶¶ 8-10. They
further declare that the “877” number identified on the Fax is not a Marketech telephone number
and that Marketech does not maintain any toll free numbers. [47-2] at ¶ 14; [47-3] at ¶ 11.
The Marketech Defendants also assert that Marketech does not do business as
“Interfax.net.” They explain that “Interfax.net” does not refer to a company, but rather to a
website, www.interfax.net, which is operated by Interfax Communications Ltd., a company
based in Ireland. As support, they attach a printout of the “GoDaddy” business registration for
the website “Interfax.net.” See [47-4] (Ex. E). However, Tessler acknowledges that a subsidiary
of Interfax Communications Ltd.—Interfax US—is a customer of Marketech. [47-2] at ¶ 10.

9

In response to the Marketech Defendants’ motion to dismiss, Plaintiff argues that it
should be allowed to take jurisdictional discovery to explore the truth of Tessler and
Kamenetsky’s declarations, which directly contradict the SAC’s allegations.

Plaintiff also

explains that following jurisdictional discovery (if it is allowed), Plaintiff plans to amend the
SAC to add Interfax US as a defendant. Plaintiff requests leave to serve jurisdictional written
discovery upon the Marketech Defendants and to depose Tessler and Kamenetsky regarding their
Declarations. As evidence that the factual record is, at least, ambiguous on the jurisdiction issue,
Plaintiff points to Tessler’s admission that Interfax US is a customer of Marketech and to
publicly available information showing that Interfax is a fax broadcaster that engages in bulk fax
broadcasting; that Marketech and Interfax US share the same business address; and that
Kamenetsky is the Vice President of Sales for both Marketech and Interfax. Plaintiff argues that
“the foregoing will support allegations that Defendants Marketech and InterFax, working
together as agents for each other and for the Travel Agency Defendants, created the fax list or
lists to which Exhibit A was sent, determined the number and frequency of transmissions for the
Fax, and created and were responsible for the opt-out notice,” as well as that “Defendants Tessler
and Kamenetsky had direct and personal participation in one of the following: creating the optout notice for the Fax, handling the opt-out requests for the Fax, the decision of where to send
the Fax, maintaining and using the database of recipient fax numbers to which the Fax was sent,
and in determining the number and frequency of transmissions for the Fax.” [67] at 7-8.
After considering the parties’ arguments and evidence, the Court concludes that, although
it is a close call, Plaintiff should be allowed limited jurisdictional discovery to explore the
Marketech Defendants’ involvement (if any) with the Fax that forms the basis of Plaintiff’s SAC.
The Marketech Defendants deny that Marketech had anything to do with the Fax, but do not

10

rebut Plaintiff’s allegations that “Interfax.net” was responsible for broadcasting the fax. And the
Marketech Defendants’ evidentiary submissions do not preclude the possibility that Marketech
was doing business as—or acting as an agent for—Interfax.net, at least for some purposes, at the
time the Fax was sent. The Marketech Defendants claim—without any supporting declaration—
that Interfax.net is operated by Interfax Communications Ltd. But their only support is a printout
from the “GoDaddy” website showing that the “Registrant Organization” for the website
“Interfax.net” is “Interfax Communications Limited” in Ireland. [47-4] at 2. The fact that
Interfax Communications Ltd. purportedly registered the Interfax.net website does not indicate,
much less prove, who actually operates the website. Plaintiff’s evidence that Interfax US and
Marketech share the same address and that Kamenetsky has been the Vice President of Sales for
both entities since February 2008 raises questions about the Marketech Defendants’
representations that they have nothing to do with fax broadcasting. Indeed, Plaintiff attaches a
copy of a Marketech news release stating that it 2017 “Marketech will attend HIMSS annual
conference in Orlando, FL on behalf of InterFAX,” and “[s]everal key members will be on hand
to meet with customers and prospects to explain InterFAX’s unique highly secured Internet
faxing service[.]” [67-1] at 13. Further, Plaintiff submits a printout from the Texas Secretary of
State’s website showing that InterFax US was not incorporated until March 3, 2017—after
Plaintiff obtained leave to file the SAC naming Marketech d/b/a Interfax.net, Tessler, and
Kamenetsky as defendants—raising questions about Interfax US’s legal status prior to that date.
See [35] at 2.
For these reasons, the Court concludes that “the factual record is … ambiguous or unclear
on the jurisdiction issue,” Ticketreserve, 656 F. Supp. 2d at 782-83, and therefore will grant
Plaintiff’s motion to take limited discovery directed at personal jurisdiction. The Court denies

11

the Marketech Defendants’ motion to dismiss for lack of personal jurisdiction, without prejudice
to their ability to renew the motion following jurisdictional discovery.
C.

Failure to State a Claim

Because the threshold issue of personal jurisdiction remains unresolved, the Court “‘need
not and should not reach’” the Marketech Defendants’ Rule 12(b)(6) motion. Rawlins v. Select
Specialty Hospital of Northwest Indiana, Inc., 2014 WL 1647182, at *6 (N.D. Ill. 2014) (quoting
LaSalle Business Credit, L.L.C. v. GCR Eurodraw S.p.A., 2004 WL 1880004, at *12 (N.D. Ill.
Aug. 14, 2004). The Court notes, nonetheless, that the Marketech Defendants’ attempt to use
Tessler and Kamenetsky’s declarations to contradict the SAC’s allegations concerning the
Marketech Defendants’ role in transmitting the Fax is improper.

A Rule 12(b)(6) motion

challenges the legal sufficiency of the complaint, and therefore in ruling on such a motion to
Court must “‘accept as true all of the well-pleaded facts in the complaint and draw all reasonable
inferences in favor of the plaintiff.’” Calderon-Ramirez v. McCament, 877 F.3d 272, 275 (7th
Cir. 2017) (quoting Kubiak v. City of Chicago, 810 F.3d 476, 480-81 (7th Cir. 2016)).
VI.

Conclusion
For these reasons, Plaintiff’s motion to take limited jurisdictional discovery [67] is

granted and the Marketech Defendants’ motion to dismiss [46] is denied without prejudice to
renewal following jurisdictional discovery. This case is set for status hearing on March 6, 2018.
The parties are directed to file a proposed schedule for jurisdictional discovery no later than
March 1, 2018.

Dated: February 12, 2018
____________________________
Robert M. Dow, Jr.
United States District Judge
12