WM. Wrigley Jr. Company v. Terphogz, LLC et al
Filing
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OPINION AND ORDER. Signed by the Honorable Sara L. Ellis on 11/17/2021:Mailed notice(rj, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WM. WRIGLEY JR. COMPANY
Plaintiff,
v.
TERPHOGZ, LLC, and JOHN DOES 1-5,
Defendants.
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No. 21 C 2357
Judge Sara L. Ellis
OPINION AND ORDER
Plaintiff Wm. Wrigley Jr. Company (“Wrigley”), headquartered in Chicago, Illinois,
owns the SKITTLES brand of fruit-flavored candy. Defendant Terphogz, LLC (“Terphogz”)
began selling cannabis, drug paraphernalia, and promotional merchandise under the mark
ZKITTLEZ. After learning of Terphogz’s sale of ZKITTLEZ goods, including in Illinois,
Wrigley filed this lawsuit against Terphogz and John Does 1-5 (the “Doe Defendants”), third
parties who have bought ZKITTLEZ goods and resold them to end users in Illinois. Wrigley
brings trademark infringement, false designation of origin, unfair competition, trademark
dilution, cybersquatting, and related claims under the federal Lanham Act, 15 U.S.C. §§ 1114
and 1125, the Illinois Uniform Deceptive Trade Practices Act, 815 Ill Comp. Stat. 510/1 et seq.,
Illinois common law, and the Illinois Anti-Dilution Act, 765 Ill. Comp. Stat. 1036/65. Terphogz
filed a motion to dismiss for lack of personal jurisdiction and improper venue pursuant to Federal
Rules of Civil Procedure 12(b)(2) and (3) or, in the alternative, to transfer venue pursuant to 28
U.S.C. § 1406(a) or 1404(a). Because the Court finds both that it has personal jurisdiction over
Terphogz and the Northern District of Illinois is the proper venue for Wrigley’s claims, the Court
denies Terphogz’s motion to dismiss. The Court further denies Terphogz’s alternative request to
transfer venue because Terphogz has not shown that the convenience of the parties and witnesses
as well as the interest of justice requires transferring this case to the Northern District of
California.
BACKGROUND 1
Wrigley, a candy manufacturer based in Chicago, Illinois, owns the SKITTLES candy
brand. Nearly a generation ago, Wrigley launched an advertising campaign for SKITTLES
featuring the slogan TASTE THE RAINBOW. Both packaging and advertising for the candy
feature Wrigley’s SKITTLES mark, TASTE THE RAINBOW slogan, and S logo, as shown
below.
Doc. 12 ¶ 1. Terphogz, a limited liability company located in Mendocino, California, sells
cannabis, drug paraphernalia, and promotional merchandise under the name ZKITTLEZ. An
illustration of its goods and advertising are depicted below:
In addressing Terphogz’s motion to dismiss, the Court is not limited to the pleadings. See Purdue
Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Therefore, the Court
draws the facts from the first amended complaint and the additional documents submitted by the parties.
The Court resolves all factual conflicts and draws all reasonable inferences in Wrigley’s favor. Id. at
782–83.
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Id. ¶ 2. The Doe Defendants are businesses located in Illinois who purchase Terphogz’s
ZKITTLEZ goods and advertise and resell them to end users in Illinois.
Terphogz operated an interactive website at zkittlez.com where it advertised, distributed,
and sold cannabis, cannabis- and cannabidiol-related goods, drug paraphernalia, clothing, and
merchandise nationwide, including to Illinois residents, under the marks ZKITTLEZ,
TAZTETHEZTRAINBRO, ZKITTLEZ HEMP, ZKITTLEZ HEMP & Cloud Design, and a Z
logo (collectively, the “ZKITTLEZ Marks”). Its website enabled a customer to calculate
shipping charges using their zip code, with Illinois zip codes as a valid option. Terphogz also
operates a Facebook account under the name “Zkittlez-Hemp108831180811606” and Instagram
accounts under the names “_zkittlez_” and “_zkittlez hemp_” and “terphogz,” which advertise
ZKITTLEZ goods to Illinois residents.
Jon Orantes, Terphogz’s managing member, represents that Terphogz itself does not
engage in cannabis sales; rather, it licenses its intellectual property rights to other companies
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engaged in the legal cannabis industry in California and Oregon. According to Orantes,
Terphogz does not engage in business in Illinois, has never run any targeted advertising aimed at
Illinois, and has not entered into any contracts or other business relations with companies or
individuals located in Illinois. Additionally, Terphogz’s three members have never traveled to
Illinois for business purposes. Finally, Orantes states that Terphogz has not authorized the sale
of cannabis products in Illinois bearing the ZKITTLEZ mark. Instead, according to Orantes,
Green R Fieldz Corp., run by a single member of Terphogz, operated the website at
www.zkittlez.com that sold ZKITTLEZ merchandise from 2015 to May 2021, at which time the
website was shut down. The website was accessible nationwide and items on the website were
available for shipment to all fifty states. In reviewing the records of sales of merchandise from
the website, the gross proceeds amounted to $31,648.82. However, according to Orantes, these
profits never made it to Terphogz, but rather the single member running Green R Fieldz kept
them. Since 2017, Green R Fieldz sold only twelve items of merchandise, in eight transactions
amounting to $634.98, through www.zkittlez.com to individuals with addresses in Illinois.
LEGAL STANDARD
A motion to dismiss under Rule 12(b)(2) challenges the Court’s jurisdiction over a party.
Fed. R. Civ. P. 12(b)(2). When a defendant raises a Rule 12(b)(2) challenge, “the plaintiff bears
the burden of demonstrating the existence of jurisdiction.” Curry v. Revolution Lab’ys, LLC, 949
F.3d 385, 392 (7th Cir. 2020) (citation omitted). If the Court rules on the Rule 12(b)(2) motion
without an evidentiary hearing, the plaintiff need only establish a prima facie case of personal
jurisdiction. Id. at 392–93; N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014).
In resolving a Rule 12(b)(2) motion, the Court “accept[s] as true all well-pleaded facts alleged in
the complaint,” Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012), and “reads the complaint
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liberally with every inference drawn in favor of [the] plaintiff,” GCIU-Emp. Ret. Fund v.
Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009). However, if the defendant submits
“evidence opposing the district court’s exercise of personal jurisdiction, the plaintiff[ ] must
similarly submit affirmative evidence supporting the court’s exercise of jurisdiction.” Matlin v.
Spin Master Corp., 921 F.3d 701, 705 (7th Cir. 2019). The Court “accept[s] as true any facts
contained in the defendant’s affidavits that remain unrefuted by the plaintiff,” GCIU-Emp. Ret.
Fund, 565 F.3d at 1020 n.1, but resolves “any factual disputes in the [parties’] affidavits in favor
of the plaintiff,” Felland, 682 F.3d at 672.
A motion to dismiss under Rule 12(b)(3) challenges the plaintiff’s choice of venue as
improper. Fed. R. Civ. P. 12(b)(3). “Once a defendant challenges the plaintiff’s choice of
venue, the plaintiff bears the burden of establishing” proper venue. Nicks v. Koch Meat Co., 260
F. Supp. 3d 942, 951 (N.D. Ill. 2017). To resolve a Rule 12(b)(3) motion, the Court accepts the
truth of all allegations in the complaint, unless the defendant’s affidavits contradict the
allegations. Deb v. SIRVA, Inc., 832 F.3d 800, 809 (7th Cir. 2016). The Court may consider
evidence the parties submit outside the pleadings; in doing so, the Court resolves all factual
conflicts and draws all reasonable inferences in the plaintiff’s favor. Id. at 809–10; Faulkenberg
v. CB Tax Franchise Sys., LP, 637 F.3d 801, 809–10 (7th Cir. 2011); Nicks, 260 F. Supp. 3d at
952. If venue is improper, the Court must dismiss the case or, if it is “in the interest of justice,”
transfer the case to any district or division where the case could have been brought. Nicks, 260
F. Supp. 3d at 952; 28 U.S.C. § 1406(a).
ANALYSIS
Terphogz moves to dismiss Wrigley’s claims against it for three reasons: first, that the
Court lacks personal jurisdiction over it under Rule 12(b)(2); second, that venue is improper
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under Rule 12(b)(3); and finally, in the alternative, that the Court should transfer this case
pursuant to 28 U.S.C. § 1406(a) or 1404(a) to the Northern District of California. The Court will
address each argument in turn.
I.
Personal Jurisdiction
The Lanham Act does not authorize nationwide service of process; thus, the Court may
only exercise jurisdiction over Terphogz if authorized both by the United States Constitution and
Illinois law. Monster Energy Co. v. Wensheng, 136 F. Supp. 3d 897, 902 (N.D. Ill. 2015);
United Airlines, Inc. v. Zaman, 152 F. Supp. 3d 1041, 1046–47 (N.D. Ill. 2015). Illinois
“permits its courts to exercise personal jurisdiction on any basis permitted by the constitutions of
both Illinois and the United States.” be2 LLC v. Ivanov, 642 F.3d 555, 558 (7th Cir. 2011); 735
Ill. Comp. Stat. 5/2–209. To the extent the federal constitutional and Illinois statutory inquiries
diverge, “the Illinois constitutional standard is likely more restrictive than its federal
counterpart,” but both essentially focus on whether exercising jurisdiction over a defendant is
fair and reasonable; therefore, a single inquiry suffices. KM Enters, Inc. v. Global Traffic Techs.,
Inc., 725 F.3d 718, 732 (7th Cir. 2013); C.H. Johnson Consulting, Inc. v. Roosevelt Rds. Naval
Station Lands & Facilities Redevelopment Auth., No. 1:12–cv–08759, 2013 WL 5926062, at *2
(N.D. Ill. Nov. 5, 2013). The Court asks, then, one constitutional question: does Terphogz have
“certain minimum contacts with [Illinois] 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)). Minimum contacts
exist where “the defendant’s conduct and connection with the forum State are such that he
should reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297 (1980).
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Personal jurisdiction comes in two forms: general and specific. uBID, Inc. v. GoDaddy
Grp., Inc., 623 F.3d 421, 425 (7th Cir. 2010). Wrigley does not contend that this Court has
general jurisdiction over Terphogz, so the Court limits its analysis accordingly. Specific
jurisdiction exists “when the defendant purposefully directs its activities at the forum state and
the alleged injury arises out of those activities.” Mobile Anesthesiologists Chicago, LLC v.
Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 444 (7th Cir. 2010). The Court
looks to the “defendant’s suit-related conduct” and its connection to the forum state; “a
defendant’s relationship with a plaintiff or third party, standing alone, is an insufficient basis for
jurisdiction.” Walden v. Fiore, 571 U.S. 277, 283, 286 (2014); Philos Techs., Inc. v. Philos & D,
Inc., 802 F.3d 905, 915–16 (7th Cir. 2015). The Court considers “whether the conduct
underlying the claims was purposely directed at the forum state,” looking at whether Terphogz
engaged in “(1) intentional conduct (or ‘intentional and allegedly tortious’ 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, 702–03 (7th Cir. 2010).
A.
Minimum Contacts
Wrigley argues that Terphogz has sufficient minimum contacts with Illinois based on the
sale of its purportedly infringing merchandise to Illinois customers. Terphogz contends that
these purchases do not show that Terphogz targeted its products to Illinois customers and instead
only reflect that a third party managed by one of its members operated an interactive website
accessible in Illinois, which does not suffice to create jurisdiction in this state. 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
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because the defendant owns or operates a website that is accessible in the forum state.” Illinois
v. Hemi Grp. LLC, 622 F.3d 754, 760 (7th Cir. 2010); see also be2 LLC, 642 F.3d at 558
(“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)). “In the context of cases like this one, that means [Wrigley]
must show that [Terphogz] is actually operating an interactive website that is accessible in
Illinois and that [Terphogz] has aimed such site at Illinois by standing ready, willing and able to
ship its [] goods to customers in Illinois in particular (or otherwise has some sufficient voluntary
contacts with the state).” Am. Bridal & Prom Indus. Ass’n v. P’ships & Unincorporated Ass’ns
Identified on Schedule A, 192 F. Supp. 3d 924, 934 (N.D. Ill. 2016).
Here, Terphogz concedes that it sold and shipped ZKITTLEZ-branded products from its
website at zkittlez.com to customers located in Illinois for an amount of $634.98, which equates
to approximately 3% of the gross revenues from sales at zkittlez.com. But Terphogz argues that
the small amount of the sales in Illinois do not suffice to establish the required minimum contacts
for specific jurisdiction. In support of this argument, Terphogz points to three Seventh Circuit
cases and claims that it did not purposefully direct its activities at Illinois because these cases
required evidence of extensive sales from an interactive website to show the required targeting:
uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421; Illinois v. Hemi Group LLC, 622 F.3d 754;
and Curry v. Revolution Laboratories, LLC, 949 F.3d 385. In uBid, the defendant “earn[ed]
many millions of dollars annually from Illinois customers,” leading the court to conclude that
“[i]ts contacts cannot fairly be described as random, fortuitous, or attenuated.” 623 F.3d at 428–
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29. In Hemi, the defendant affirmatively chose to allow sales in Illinois by selling 300 packs of
cigarettes to one Illinois resident over two years. 622 F.3d at 756, 758. Finally, in Curry, the
defendants sold its allegedly infringing product to 767 Illinois residents in less than a one-year
period. 949 F.3d at 399.
The Court disagrees with Terphogz that the number of sales serves as the determinative
factor in a jurisdictional inquiry. Instead, in the cases on which Terphogz relies, the Seventh
Circuit also considered other factors that demonstrated that the defendant took steps to purposely
target the forum state. See Curry, 994 F.3d at 399 (sufficient minimum contacts where the
defendant only sold its products online, the website included Illinois as a ship-to option, the
defendant sent written confirmation to Illinois customers, and the defendant shipped its product
to 767 Illinois customers); uBid, 623 F.3d at 428–29 (sufficient minimum contacts based on
defendant’s sales to Illinois customers, national scale of operations, and advertising in Illinois);
Hemi, 622 F.3d at 758 (sufficient minimum contacts where the defendant operated a commercial
website through which you could purchase cigarettes for shipment to forty-nine states, but not
New York, and shipped cigarettes to an Illinois resident). Here, Terphogz did more than just sell
a minimal number of products to Illinois residents; it operated an interactive website that allowed
Illinois customers to calculate shipping charges and then shipped purchased products to Illinois
customers. These actions suffice to show that Terphogz purposefully availed itself of doing
business in Illinois. See Curry, 949 F.3d at 399 (“Revolution’s interactive website for the sale of
its product requires the customer to select a shipping address. Illinois is among the ‘ship-to’
options from which the customer must choose”); Ouyeinc Ltd. v. Alucy, No. 20 C 3490, 2021
WL 2633317, at *2 (N.D. Ill. June 25, 2021) (“that defendants sold and shipped five products to
addresses in Illinois” sufficed to confirm “that defendant affirmatively selected Illinois as a
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shipping target”); Tommy Hilfiger Licensing, LLC, et al. v. The P’ships & Unincorporated
Ass’ns Identified on Schedule “A”, No. 20 C 7477, Doc. 46 (N.D. Ill. March 24, 2021) (the
plaintiff showed that the defendant purposefully availed itself of doing business in Illinois where
it “offered evidence tending to show that [the defendant], though not physically located in
Illinois or even in the United States, operated an interactive website through which it
purposefully offered products for sale to consumers, including consumers located in Illinois, who
would then select an address where the products would be shipped, including Illinois as one of
the options”); Volkswagen AG v. iman365-usa, No. 18-CV-06611, 2020 WL 977969, at *3 (N.D.
Ill. Feb. 28, 2020) (the defendant purposefully directed conduct to Illinois where it “operated a
commercial, interactive online store through which U.S. customers could purchase its products,”
engaged in ninety-five transactions with Illinois customers over eight months, and “[a]t least one
of these transactions involved shipping a counterfeit Audi product to Illinois”); Monster Energy
Co., 136 F. Supp. 3d at 907 (specific jurisdiction existed over out-of-state sellers of counterfeited
merchandise based on offering merchandise for sale over the internet in Illinois and the purchase
of the products by consumers in Illinois).
B.
Relatedness
In order for the Court to exercise specific jurisdiction over Terphogz, Wrigley’s claims
must arise out of Terphogz’s contacts with Illinois. Hemi, 622 F.3d at 759. Terphogz argues
that the minimal sales in Illinois are not sufficiently suit-related to support jurisdiction because
its allegedly infringing activities occurred in California, not Illinois, and Terphogz has never sent
corporate officers or employees into Illinois. But “[j]urisdiction . . . may not be avoided merely
because the defendant did not physically enter the forum State.” Burger King, 471 U.S. at 476.
And here, the claims brought by Wrigley arise out of the infringing products shipped to Illinois
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and other states; that Terphogz developed the ZKITTLEZ trademark and products in California
does not matter. Monster Energy Co., 136 F. Supp. 3d at 908 (“Defendants offered to sell
counterfeit Monster Energy Products on its AliExpress Internet store to individuals with Illinois
addresses. Such actions constitute tortious activity committed in Illinois, and defendants’ actions
surrounding those offers triggered MEC’s claims against it. Accordingly, MEC’s claims arise
directly out of the defendants’ contacts with Illinois.”); see uBID, 623 F.3d at 432 (“The claim
brought by uBID in Illinois arises directly out of GoDaddy’s registration of the infringing
domain names bought by customers it has solicited in Illinois and many other states. The claim
bears a sufficient relationship to GoDaddy’s business activities in Illinois to expect GoDaddy to
defend itself in Illinois without violating the due process clause.”). Thus, the relationship
between Terphogz’s contacts and Wrigley’s claims against it is sufficient to establish the
required relatedness.
C.
Fair Play and Substantial Justice
The final inquiry in the Court’s specific jurisdiction analysis is whether the exercise of
personal jurisdiction over Terphogz would offend traditional notions of fair play and substantial
justice. See Int’l Shoe, 326 U.S. at 316; Felland, 682 F.3d at 677. In this analysis, courts
evaluate “the burden on the defendant, the forum State’s interest in adjudicating the dispute, the
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.” Felland, 682 F.3d at 677
(citation omitted). “[W]here a defendant who purposefully has directed his activities at forum
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residents seeks to defeat jurisdiction, [it] must present a compelling case that the presence of
some other considerations would render jurisdiction unreasonable.” Id. (citation omitted).
Here, the factors weigh in favor of exercising jurisdiction over Terphogz. First, out-ofstate defendants always face a burden, and the burden on Terphogz is minimal, even when
considering the small size of the company. Second, the Court sees no unfairness in permitting
this suit to proceed against Terphogz in Illinois because Illinois has “a strong interest in
providing a forum for its residents, including [Wrigley], to seek redress for harms suffered within
the state by an out-of-state actor.” Curry, 949 F.3d 385 at 402; Felland, 682 F.3d at 677 (same);
uBID, Inc., 623 F.3d at 432 (noting “Illinois’s significant interest in providing a forum for its
residents to seek relief when they suffer harm in Illinois from a wrong that occurred at least in
part in Illinois”). And third, Wrigley has an interest in obtaining convenient and effective relief,
as its principal place of business, employees, and records are all located in Illinois. 2 The Court,
therefore, may exercise specific jurisdiction over Terphogz based on its contacts with Illinois.
II.
Venue
Terphogz also seeks to dismiss Wrigley’s first amended complaint based on improper
venue under Rule 12(b)(3). When a defendant challenges venue under Rule 12(b)(3), the
plaintiff has the burden to establish that venue is proper in this district. First Health Grp., Corp.
v. Sanderson Farms, Inc., No. 99 C 2926, 2000 WL 139474, *2 (N.D. Ill. Jan. 28, 2000).
Under 28 U.S.C. § 1391(b), a plaintiff may bring suit in “(1) a judicial district in which
any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the
Terphogz asserts that Wrigley should not be treated as an Illinois resident because, in actuality, Mars
Wrigley is headquartered in New Jersey and its parent company, Mars, Incorporated is headquartered in
Virginia. At this stage, however, the Court takes as true Wrigley’s allegations that its principal place of
business is Chicago, Illinois.
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claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this section,
any judicial district in which any defendant is subject to the court’s personal jurisdiction with
respect to such action.” 28 U.S.C. § 1391(b). Wrigley alleges that venue is proper in this district
pursuant to § 1391(b)(1), (b)(2), and (c)(2). However, the Court need only address § 1391(b)(2).
Under § 1391(b)(2), “the test is not whether a majority of the activities pertaining to the
case were performed in a particular district, but whether a substantial portion of the activities
giving rise to the claim occurred in a particular district.” Nicks, 260 F. Supp. 3d at 952. “For
events to be considered substantial under the statute, it is sufficient for the plaintiff to establish
that the events occurring in the forum district were part of the historical predicate for the instant
suit.” Jackson v. N’Genuity Enters., Co., No. 14 C 2197, 2014 WL 4269448, at *6 (N.D. Ill.
Aug. 28, 2014) (citation omitted). As discussed above, Wrigley alleges that Terphogz infringed
its trademarks by selling ZKITTLEZ-branded products both inside and outside of Illinois, with
the injury felt by Wrigley in Illinois. Although Terphogz argues that venue is improper here
because it sold only a small number of goods to Illinois customers, “allegations of infringement
and resulting injury in this District are enough to establish that a ‘substantial portion’ of the
events giving rise to [Wrigley’s] trademark . . . infringement claims—the crux of their lawsuit—
occurred in this District.” Brito v. Urbina, No. 18 C 2276, 2018 WL 3672743, at *4 (N.D. Ill.
Aug. 2, 2018); see Johnson v. Creighton Univ., 114 F. Supp. 3d 688, 697 (N.D. Ill. 2015)
(denying motion to dismiss for improper venue because the “facts before the court easily
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satisf[ied]” § 1391(b)(2)’s requirements given that the alleged tortious conduct and injury to the
plaintiff occurred in Illinois). Accordingly, the Court finds that venue is proper in this district.
III.
Transfer Pursuant to 28 U.S.C. § 1404(a)
Finally, Terphogz moves to transfer venue pursuant to § 1404(a). 3 Section 1404(a)
provides that the Court may transfer venue to another district “for the convenience of the parties
and witnesses, in the interest of justice.” 28 U.S.C. § 1404(a). In order to transfer the case under
§ 1404(a), Terphogz must demonstrate that “(1) venue is proper in this district; (2) venue is
proper in the transferee district; (3) the transferee district is more convenient for both the parties
and the witnesses; and (4) transfer would serve the interest of justice.” Gueorguiev v. Max Rave,
LLC, 526 F. Supp. 2d 853, 856 (N.D. Ill. 2007). Terphogz bears the burden of demonstrating
that transfer is “clearly more convenient.” Heller Fin. Inc. v. Midwhey Powder Co., 883 F.2d
1286, 1293 (7th Cir. 1989) (quoting Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219–20 (7th
Cir. 1986)). The transfer decision is committed to the Court’s sound discretion because the
“weighing of factors for and against transfer necessarily involves a large degree of subtlety and
latitude.” Coffey, 796 F.2d at 219. The Court has determined that venue is proper here, and
Wrigley does not contest the propriety of venue in the Northern District of California.
Therefore, the Court turns to whether transfer would serve the convenience of the parties and the
witnesses as well as the interest of justice.
A.
Convenience of the Parties and Witnesses
In evaluating the convenience of the parties and witnesses, the Court considers
(1) Wrigley’s choice of forum, (2) the situs of material events, (3) the relative ease of access to
proof, (4) the convenience of the parties in litigating in the respective forums, and (5) the
Because the Court finds venue appropriate in this district, it evaluates Terphogz’s transfer request under
§ 1404(a), not § 1406(a).
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convenience of the witnesses. Sojka v. DirectBuy, Inc., No. 12 C 9809, 2014 WL 1089072, at *2
(N.D. Ill. Mar. 18, 2014).
Courts typically give a plaintiff’s choice of forum substantial deference, particularly
when the chosen forum, as here, is the plaintiff’s home forum. Brandon Apparel Grp., Inc. v.
Quitman Mfg. Co., 42 F. Supp. 2d 821, 833 (N.D. Ill. 1999); see also In re Nat’l Presto Indus.,
Inc., 347 F.3d 662, 664 (7th Cir. 2003) (noting that “unless the balance is strongly in favor of the
defendant, the plaintiff’s choice of forum should rarely be disturbed” but “[r]arely . . . is not
never” (citation omitted) (internal quotation marks omitted)). As a result, this factor weighs
against transfer.
Terphogz next contends that the Northern District of California is the location of material
events because that is the location of its principal place of business and where it made all
decisions concerning use of the allegedly infringing marks. However, “events triggering
trademark infringement may occur both in the district where . . . [Terphogz] is located and where
[Wrigley] is located and confusion is likely to occur.” Ty, Inc. v. Collett, No. 99 C 692, 1999
WL 300290, at *4 (N.D. Ill. May 6, 1999). This factor is therefore neutral.
As for sources of proof, any documents are likely to be stored electronically. Electronic
documents are presumed to be easily transportable, so the access to proof factor does not weigh
heavily in favor of either district. See Rabbit Tanaka Corp. USA v. Paradies Shops, Inc., 598 F.
Supp. 2d 836, 840 (N.D. Ill. 2009) (“In this day and age, transferring documents from one
district to another is commonplace and, given the widespread use of digital imaging in big-case
litigation, no more costly than transferring them across town.”).
In evaluating the convenience of the parties, the Court considers the parties’ residences
and their ability to bear the expense of litigating in each forum. Brandon Apparel, 42 F.Supp.2d
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at 834. Granted, Terphogz is purportedly a “very small LLC,” operating only within the
California market and with a licensee in Oregon, but “absent evidence to suggest that defending
this suit in Illinois will work a financial hardship on [Terphogz], the fact that it is ‘smaller’ than
[Wrigley] has little value.” Cent. States, Se., Sw. Areas Pension Fund v. Kurtz Gravel Co., No.
98 C 2174, 1998 WL 684216, at *3 (N.D. Ill. Sept. 18, 1998); see Avesta Sheffield, Inc., 2000
WL 198462, at *7 (“Olympic argues that Avesta is a large, international company with revenues
in the multi-million dollar range and Olympic is very small in comparison. However, Olympic
offers no evidence to support its characterizations.”). Because the Court should not transfer a
case merely to shift the inconvenience from one party to another, Sage Prods., Inc. v. Devon
Indus., Inc., 148 F.R.D. 213, 216 (N.D. Ill. 1993), this factor remains neutral.
The Court thus turns to the convenience of witnesses, “often viewed as the most
important factor in the transfer balance.” Brandon Apparel, 42 F. Supp. 2d at 834 (quoting Rose
v. Franchetti, 713 F. Supp. 1203, 1214 (N.D. Ill. 1989)). The Court considers not just the
number of witnesses located in each forum but also the nature, quality, and importance of their
testimony. Id. The Court gives less weight to the convenience of party witnesses, whom the
Court presumes would appear voluntarily at trial in either district. See AL & PO Corp. v. Am.
Healthcare Cap., Inc., No. 14 C 1905, 2015 WL 738694, at *4 (N.D. Ill. Feb 19, 2015) (“[T]he
convenience of witnesses who are within a party’s control, such as a party’s employees, is far
less important than the convenience of non-party witnesses.”); Bullard v. Burlington N. Santa Fe
Ry. Co., No. 07 C 6883, 2008 WL 4104355, at *4 (N.D. Ill. Aug. 28, 2008) (“Courts are less
concerned about the burden that appearing at trial might impose on witnesses who are either
employees of parties or paid experts; it is presumed that such witnesses will appear
voluntarily.”). “In assessing this factor, courts focus on the nature and quality of the proposed
16
testimony and its relevance to the case.” Kjaer Weis v. Kimsaprincess Inc., 296 F. Supp. 3d 926,
932 (N.D. Ill. 2017). Moreover, “the presence of third party witnesses outside the subpoena
power of this court is a factor which weighs heavily in favor of transferring.” Id. at 933 (citation
omitted). Here, Terphogz argues that the witnesses Wrigley will likely want to depose, such as
former Terphogz employees or corporate officers, are in California. But Terphogz has not
identified any such witnesses or described the content of their testimony. Therefore, the Court
does not have sufficient information to allow it to conclude that litigating here would be
significantly more inconvenient for third-party witnesses, making this factor neutral as well. See
Brandon Apparel, 42 F. Supp. 2d at 834 (“[T]he court will not consider the convenience of
unidentified witnesses”).
B.
Interest of Justice
Finally, the Court must consider whether transfer is in the interest of justice. “The
‘interest of justice’ is a separate element of the transfer analysis that relates to the efficient
administration of the court system.” Research Automation, Inc. v. Schrader-Bridgeport Int’l,
Inc., 626 F.3d 973, 978 (7th Cir. 2010). Courts consider factors such as the likelihood of a
speedy trial, each court’s familiarity with the applicable law, the desirability of resolving
controversies in each locale, and the relationship of each community to the controversy. Id.;
Coffey, 796 F.2d at 220.
Terphogz concedes that factors related to docket congestion and the speed at which the
case will proceed to trial do not weigh heavily in one direction or the other. But Terphogz
argues that the desirability of resolving the controversy in each forum weighs in favor of transfer
because the core of this dispute involves the use of an allegedly infringing mark in the California
cannabis industry. Both states have interests in resolving this controversy, with one not being
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stronger than the other. Although Wrigley asserts several claims under Illinois law, that does not
necessarily mean this lawsuit should remain in this district because federal judges routinely
apply state laws other than their own, making this factor neutral. Fasoli v. Voltage Pictures,
LLC, No. 14 C 6206, 2014 WL 7365936, at *4 (N.D. Ill. Dec. 22, 2014); Nw. Corp. v. Gabriel
Mfg. Co., No. 95 C 2004, 1996 WL 73622, at *6 (N.D. Ill. Feb. 16, 1996) (“This action concerns
the alleged infringement of a trademark owned by a plaintiff domiciled and doing business in
[Illinois]. Plaintiff’s complaint alleges several violations of federal trademark law . . . with
which this Court is familiar and capable of adjudicating. Plaintiff also alleges violations of the
common law of unfair competition, the Illinois Uniform Deceptive Trade Practices Act, and the
Illinois Anti-Dilution Act. New York federal courts would not provide a better forum to litigate
these Illinois state law claims.”).
Ultimately Terphogz has failed to establish that the balance of private and public interests
strongly favors transferring this case to the Northern District of California. See In re Nat’l
Presto Indus., Inc., 347 F.3d at 664 (“[U]nless the balance is strongly in favor of the defendant,
the plaintiff’s choice of forum should rarely be disturbed.” (quoting Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 508 (1947))). Indeed, the purpose of § 1404(a) transfer is not to make incremental
improvement: the transferee venue must be “clearly more convenient.” Heller Fin. Inc., 883
F.2d at 1293. That is not the case here, and so the Court denies Terphogz’s motion to transfer.
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CONCLUSION
For the reasons set forth above, the Court denies Terphogz’s motion to dismiss [24].
Dated: November 17, 2021
______________________
SARA L. ELLIS
United States District Judge
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