Georgakis Consulting, Inc. v. Cohen et al
Filing
28
MEMORANDUM Opinion and Order. Signed by the Honorable Harry D. Leinenweber on 1/24/2018. Mailed notice. (kp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
GEORGAKIS CONSULTING, INC.,
Plaintiff,
Case No. 17 C 3919
v.
Judge Harry D. Leinenweber
SAM E. COHEN, and AMAZON
CONSULTING EXPERTS, LLC.,
Defendants.
MEMORANDUM OPINION AND ORDER
I.
BACKGROUND
Defendant, Sam Cohen (“Cohen”), is a resident of New Jersey
and
as
such
is
a
citizen
of
New
Jersey.
Defendant
Amazon
Consulting Experts (“ACE”), is a New Jersey limited liability
company with offices in New Jersey and as such is also a citizen
of New Jersey.
The Plaintiff, Georgakis Consulting Inc., is an
Illinois Corporation with its principal place of business in
Illinois.
According to the Complaint, Cohen and ACE are in the
business of offering consultation to clients who are desirous of
selling
goods
on
Amazon.com
(“Amazon”).
The
Plaintiff
is
a
client of ACE and engages in the sale of goods on Amazon.
The
Defendants
for
their
maintain
consulting
a
website
business.
whereby
The
they
seek
clients
Defendants
also
offer
their
clients the opportunity to purchase various types of goods to be
sold on Amazon.
According to the Complaint, in 2015 the Plaintiff purchased
an
annual
consulting
and
coaching
membership
from
ACE
for
$5,000.
This membership was renewed in 2016 for an additional
$5,000.
Plaintiff claims that the purchase of such membership
created
a
fiduciary
Defendants.
between
Plaintiff
and
Pursuant to the membership, Defendants recommended
that Plaintiff
resale
relationship
on
purchase
Amazon.
various
Most,
if
types
not
of
all,
goods
of
from
the
goods
ACE
for
sold
by
Defendants to their customers are labeled, packaged and sent by
Defendants to Amazon distribution centers.
not
take
delivery
Defendants.
of
or
According
inspect
to
the
the
Thus, Plaintiff did
goods
Complaint,
purchased
from
Defendants
sell
identical merchandise on the internet at reduced prices, thus
undercutting
Plaintiff’s
ability
to
compete.
Defendant
also
shipped goods that were defective, counterfeit, non-conforming
and/or
unsuitable
for
sale
on
Amazon.
Thus,
as
a
result,
Plaintiff suffered damages.
Based
on
the
forgoing,
Plaintiff
Complaint against Defendants alleging:
filed
a
three-count
(1) violation of the
Consumer Fraud and Deceptive Practices Act (Count I); (2) breach
of
Fiduciary
Duty
(Count
II);
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and
(3)
breach
of
Contract
(Count III).
personal
venue;
Defendants
jurisdiction
dismissing
have
over
Cohen
moved
both
for
to
dismiss
Defendants;
failure
to
for
lack
plead
a
lack
of
of
proper
basis
for
piercing the corporate veil; failure to plead a plausible claim
for
violation
of
fiduciary
duty;
and
failure
to
plead
a
plausible claim for violation of the Illinois Consumer Fraud and
Deceptive Practices Act.
As an alternative, Defendants have
moved to transfer the case to the District of New Jersey for
venue purposes.
II.
DISCUSSION
In support of the Motion to Dismiss for Lack of Personal
Jurisdiction
the
Defendants
Defendant Sam Cohen.
filed
a
declaration
from
the
According to the declaration, ACE is in
the business of providing e-commerce consulting services to new
and
existing
marketplace.
third-party
These
sellers
services
on
are
the
Amazon
limited
to
digital
on-line
merchandising, bookkeeping, shipping, pricing, and warehousing
with Amazon.
ACE also offers its clients purchase opportunities
from manufacturers and national retailers from time to time.
ACE does not solicit any member to make any purchase but leaves
the responsibility to make purchase decisions and to conduct
market evaluations to the client.
fiduciary services.
ACE does not provide any
It does not hold, invest or manage assets
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on
behalf
of
nationwide
its
site
members.
and
not
ACE’s
expressly
website
aimed
at
Plaintiff is an Amazon third-party seller.
is
a
uniform,
Illinois.
In 2015, Plaintiff
purchased a membership in Ace which it renewed in 2016.
Cohen’s
interactions
with
Plaintiff
The
were
in
his
All of
role
corporate officer of ACE and not as an individual.
as
None of the
officers, directors or employees of ACE resides in Illinois.
corporate
activities
purchased
by
shipped
by
Illinois
occur
Plaintiff
ACE
and
to
not
an
to
in
as
Illinois.
identified
Amazon
All
in
the
distribution
Illinois.
The
locations at Plaintiff’s direction.
of
the
were
No
goods
Complaint
center
goods
a
were
outside
of
reshipped
to
Consulting services were
initiated by Plaintiff with ACE in New Jersey through the ACE
website, Facebook, or by email.
In response to the jurisdiction motion, Plaintiff filed the
responses
of
Defendants
to
to
Plaintiff’s
Request
Plaintiff’s
Interrogatories
Plaintiff’s
Produce,
and
on
the
Request
Defendants’
issue
Plaintiff
did
not
file
any
declarations
employees
and
thus
did
not
countermand
declaration.
that
ACE,
specific
of
of
any
to
Admit,
Answers
to
jurisdiction.
its
officers
part
of
or
Cohen’s
In these discovery responses, Defendants admitted
and
not
clients
Cohen,
had
including
consulting
Plaintiff
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contracts
who
were
with
11
Illinois
residents.
ACE
(but
Illinois residents can sign up for membership with
not
Cohen)
by
communicating
with
the
ACE
website.
Cohen admitted to having a brief social visit with Plaintiff in
connection with a speech Cohen made at the “eCom” Chicago 2015
Conference
which
membership.
occurred
Plaintiff
had
purchased
its
Neither ACE nor Cohen has ever shipped any goods to
Illinois residents.
and
after
Illinois
There were two communications between ACE
residents
via
the
“contact
portion
of
the
ACE
website.”
The position of the Defendants is that neither of them has
submitted to Illinois jurisdiction either general or specific.
There
are
two
types
of
personal
(sometimes
known
as
(sometimes
called
case-linked)
Squibb
(2017).
Co.
all-purpose
v.
Superior
Court
The
Paradigm
forum
jurisdiction:
jurisdiction
jurisdiction.
of
for
California,
the
general
and
specific
Bristol-Meyers
137
exercise
S.Ct.
of
1773
general
jurisdiction is an individual’s domicile and for a corporation
the place that can fairly be regarded as home, i.e., where the
corporation maintains its place of business.
On the other hand,
for specific jurisdiction, the suit must arise out of or relate
to a defendant’s contacts with the forum, i.e., an activity that
takes place in the forum state and is therefore subject to state
regulation. Id. at 1779.
When there is no such connection,
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specific jurisdiction is lacking regardless of the extent of the
defendant’s unconnected activities in the state.
Id., citing
Goodyear Dunlop Tires v. Brown, 131 S.Ct. 2846 (2011).
The
jurisdiction requirements must be met for each defendant over
whom a state court seeks to exercise jurisdiction.
Rush v.
Savchuk, 100 S.Ct. 571 (1980).
While Plaintiff here does not specifically state whether it
claims
general
or
specific
jurisdiction,
the
residence
and
domicile of the Defendants is clearly New Jersey which would be
the only place where general jurisdiction could be exercised.
Plaintiff instead suggests that jurisdiction is proper under the
Illinois long-arm statute as it has pled causes of action for
fraud, breach of fiduciary duty, and breach of contract in this
state.
However, RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272
(7th Cir. 1997), shows that this is not necessarily the case for
these
types
of
claims.
The
RAR
court
noted
that
only
the
dealings between the parties in regard to the disputed contract
are relevant for specific jurisdiction analysis.
The specific
contract in question in RAR involved the plaintiff agreeing to
buy four diesel engines in Scotland, contracting with Turner to
locate
the
engines
in
Scotland,
to
dismantle
and
purchase
various parts from the engines, and to pack the engines for
transport to Detroit.
Some of the parts were damaged during
- 6 -
shipment and plaintiff sued Turner in Illinois for breach of
contract due to improper packing.
there
was
contacts
no
with
specific
jurisdiction
Illinois
dispute in question.
The Seventh Circuit held that
had
nothing
because
to
do
Turner’s
with
the
prior
contract
Turner’s contractual obligation was to
obtain parts in Scotland and to ship them to Detroit.
Even
though the parts would eventually end up in Illinois was deemed
to be insufficient to establish specific jurisdiction.
Here the specific complaints that led to Plaintiff’s suit
were shipping alleged non-conforming goods from a source outside
of Illinois to an Amazon distribution center for shipment to
Plaintiff’s customers and the undercutting Plaintiff’s pricing.
These specific complaints are set forth in paragraphs 14 through
18
in
the
Plaintiff’s
Complaint.
According
to
Cohen’s
uncontradicted Declaration, ACE made these items available for
purchase by Plaintiff to which Plaintiff availed itself.
products
other
were
than
not
to
the
sent
to
Plaintiff
Amazon
presumably,
the
products
Plaintiff’s
customers.
in
Distribution
were
then
Thus
the
Illinois
or
Centers
from
reshipped
gravamen
by
of
The
anywhere
where,
Amazon
to
Plaintiff’s
Complaint is not related to the client consulting agreement but
instead to the making of products available to Plaintiff for
purchase and to then be sold by Plaintiff on Amazon.
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Plaintiff
also
argues
that
Defendants
by
actively
soliciting clients in Illinois (11 clients in 2015 and currently
5 clients in Illinois) indicates that they are submitting to
jurisdiction
“based
on
contractual
relationships
transaction of business in Illinois.”
establishing
However this is directly
contrary to the Supreme Court’s statement in Bristol-Myers that
“a defendant’ relationship with a . . . third party, standing
alone, is an insufficient basis for jurisdiction.”
Bristol-
Myers, p. 1779 citing Waldon v. Fiore, 134 S.Ct. 1115, 1123
(2014).
The Court finds therefore that this court lacks personal
jurisdiction over the Defendants, either general or specific.
The
Motion
to
Dismiss
based
on
Federal
Rule
of
Civil
Procedure 12(b)(2) is granted.
III.
For
the
reasons
CONCLUSION
stated
herein,
Defendants’
Motion
to
Dismiss for Lack of Jurisdiction is granted.
Since the case has no jurisdiction the remaining bases for
Defendants’ Motion to Dismiss are denied as moot.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated:
1/24/2018
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