C.S.B. Commodities, Inc. v. Urban Trend (Hk) Ltd.

• Citation: 626 F.Supp.2d 837
• Decision Date: 07 January 2009
• Docket Number: Case No. 08 cv 1548.
• Parties: C.S.B. COMMODITIES, INC., a New York Corporation, Plaintiff, v. URBAN TREND (HK) LTD., a foreign Corporation, and Robert Kushner, individually, Defendants.
• Court: U.S. District Court — Northern District of Illinois

626 F.Supp.2d 837

C.S.B. COMMODITIES, INC., a New York Corporation, Plaintiff, v. URBAN TREND (HK) LTD., a foreign Corporation, and Robert Kushner, individually, Defendants.

Case No. 08 cv 1548.

United States District Court, N.D. Illinois, Eastern Division.

January 7, 2009.

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Lisa A. Ferrari, Roger S. Thompson, Cohen, Pontani, Lieberman & Pavane, LLP, New York, NY, Steven H. Sklar, Leydig, Voit & Mayer, Ltd., Chicago, IL, for Plaintiff.

Jeffrey G. Mote, James J. Lukas, Greenberg Traurig, LLP., Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

Plaintiff C.S.B. Commodities, Inc. ("CSB") filed a three count first amended complaint against Urban Trend (HK) Ltd. ("Urban Trend") and Robert Kushner ("Kushner") (collectively "Defendants") alleging: I—Federal Unfair Competition under 15 U.S.C. § 1125(a); II—Unfair Competition under Illinois common law; and III—Unfair Competition under 815 ILCS § 510. This matter is now before the Court on Defendants' renewed motion to dismiss Plaintiff's complaint for lack of personal jurisdiction [30] pursuant to Federal Rules of Civil Procedure 12(b)(2) and Defendant Kushner's renewed motion to dismiss for failure to state a claim [27] pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, the Court grants the motion to dismiss for lack of personal jurisdiction as to Defendant Urban Trend, denies the motion to dismiss for lack of personal jurisdiction as to Defendant Kushner [30] and denies Defendant Kushner's motion to dismiss for failure to state a claim [27].

I. Background

CSB is a New York Corporation having a principal place of business in New York. Pl. Amend. Compl. at ¶ 1. Urban Trend is a Hong Kong corporation, having a principal place of business in Hong Kong. Id. at ¶ 2. Kushner is a resident of Hong Kong. Id. at ¶ 3.

CSB is in the business of selling housewares and household goods. Pl. Amend. Compl. at ¶ 8. In August of 2005, CSB began selling a new product, specifically a knife holder that incorporates the configuration of a stylized figure which Plaintiff terms a "Human Figure Design." Id. at ¶ 9. This knife holder featuring the Human Figure Design is sold under the trademark "The Ex" in the United States and under the trademark "Voodoo" elsewhere throughout the world. Id. Although the "Ex/Voodoo" is manufactured in a range of colors, it is most popular and well-known in red. Id. From its initial introduction, the "Ex/Voodoo" was popular in the marketplace and garnered a great deal of press coverage and attention through word-of-mouth. Id. at ¶ 12. CSB has promoted the "Ex/Voodoo" knife holder and the Human Figure Design in advertisements and through other marketing channels. Id. As a result, CSB asserts that the Human Figure Design has acquired secondary meaning. Id. CSB owns the trademark rights associated with the Human Figure Design. Id. at ¶ 11.

Urban Trend is in the business of selling novelty items. Pl. Amend. Compl. at ¶ 14. Kushner has responsibility for selecting the products that Urban Trend manufactures and/or markets. Id. at ¶ 15. Kushner also stands to benefit personally from the decisions to manufacture and/or market any particular product. Id. After CSB began advertising and selling the "Ex/Voodoo," Urban Trend, without authorization from CSB, began marketing, selling, and using in interstate commerce a knife holder called the "Throwzini". Id. at ¶ 16. The "Throwzini" has been shown in advertisements in the same red color that is utilized by CSB in its most popular version of the "Ex/Voodoo" knife holder. Id. CSB alleges that the "Throwzini": (i) utilizes a design that is confusingly similar to the Human Figure Design; and (ii) misappropriates the distinctive trade dress and product configuration of the "Ex/Voodoo" knife holder. Id.

CSB alleges that Defendants knew of the "Ex/Voodoo" knife holder, the Human Figure Design, and the popularity of the "Ex/Voodoo" at the time that they began to develop the "Throwzini" knife holder. Pl. Amend. Compl. at ¶ 17. CSB further alleges that the selection and shape of the "Throwzini" knife holder was made with the knowledge that the chosen shape was confusingly similar to the "Ex/Voodoo" knife holder and the Human Figure Design. Id. at ¶ 18. The choice also was made to select the shape of the "Throwzini" in the most popular color of the "Ex/Voodoo" with the intention of trading on the good will and product recognition that CSB has developed in the "Ex/Voodoo" knife holder and the Human Figure Design. Id. at ¶ 19.

CSB alleges that Kushner made the decision to manufacture and/or market the "Throwzini". Id. at ¶ 20. In so doing, he sought to trade on the goodwill established by CSB in the "Ex/Voodoo" knife holder. Id. at ¶ 21. Kushner also is alleged to have personally directed others at Urban Trend to manufacture or have manufactured the "Throwzini" knife holder and to market the "Throwzini" in this District and elsewhere. Id. at ¶ 22. Kushner has been personally present in this District to offer the "Throwzini" knife holder for sale. Id. at ¶ 23. Defendants have begun marketing and promoting the "Throwzini" in the United States and have promised customers to deliver the "Throwzini" knife holders shortly. Id. at ¶ 25. Finally, CSB alleges that Kushner stands to gain personally from sales of the "Throwzini." Id. at ¶ 24.

In CSB's response to Defendants' motion to dismiss for lack of personal jurisdiction, CSB stated that not only had Kushner been personally present in this District to offer the "Throwzini" for sale, but he had in fact been served with the summons and complaint for this case. In early March of 2008, CSB learned that Urban Trend was scheduled to appear at a trade show in Chicago and would offer for sale the "Throwzini" knife holder. Pl. Resp. at 2; Declaration of Robert Schmeizer at ¶ 9.¹ CSB went to the trade show and learned that Kushner and Urban Trend were present and were offering the "Throwzini" for sale. Pl. Resp. at 3; Schmeizer Decl. at ¶ 11. CSB filed the initial complaint in this matter and served Kushner on the trade show floor with the summons and complaint. Pl. Resp. at 3; Schmeizer Decl. at ¶ 12.

II. Motion to Dismiss for Lack of Personal Jurisdiction

Kushner's motion to dismiss for lack of personal jurisdiction must be considered first. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 93-102, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). If the court finds it lacks personal jurisdiction over Kushner, it will become unnecessary to consider his motion to dismiss for failure to state a claim upon which relief can be granted.

A. Legal Standard on Motion to Dismiss for Lack of Personal Jurisdiction

An action against a party over whom the Court lacks personal jurisdiction must be dismissed. Fed.R.Civ.P. 12(b)(2). A complaint need not include facts alleging personal jurisdiction. Steel Warehouse of Wisconsin, Inc. v. Leach, 154 F.3d 712, 715 (7th Cir.1998). If defendants move to dismiss for lack of personal jurisdiction, plaintiff has the burden of establishing a prima facie case where, as here, there are no facts in dispute and thus no need to convene an evidentiary hearing. See Id.; Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The Seventh Circuit has cautioned that "once the defendant has submitted affidavits or other evidence in opposition to the exercise of jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction." Purdue Research Found., 338 F.3d at 783. The Court resolves factual disputes in the pleadings and affidavits in favor of the party asserting jurisdiction, but takes as true those facts contained in defendant's affidavits that remain unrefuted by the plaintiff. Jamik, Inc. v. Days Inn of Mount Laurel, 74 F.Supp.2d 818, 821 (N.D.Ill.1999).

The allegations pertinent to personal jurisdiction are, as follows: (i) Defendants, prior to the filing of the Complaint, offered, in person, to sell the products described below in this district; (ii) Defendants own and operate a website accessible in this district; (iii) Defendants have offered for sale goods under the mark at issue in this district through the website and in person; (iv) Defendants have thereby committed the acts of infringement and unfair competition complained of in this district; (v) Kushner, president of and present on behalf of Urban Trend, was served with a copy of the complaint and summons while present within this district; (vi) Kushner was the individual at Urban Trend who made the decision to go forward with the manufacture and/or marketing of the Throwzini; and (vii) Kushner stands to gain personally from the sale of the Throwzini knife holder.

B. Discussion

In federal question cases, personal jurisdiction analysis has both a constitutional and statutory element. The court must determine that: (1) haling the defendant into court accords with the Due Process Clause of the Fifth Amendment; and (2) that defendant is amenable to service of process from the court. Lifeway Foods, Inc. v. Fresh Made, Inc., 940 F.Supp. 1316, 1318 (N.D.Ill.1996) (citing United States v. De Ortiz, 910 F.2d 376, 381-82 (7th Cir.1990); Omni Capital Int'l v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987)). Due process in federal question cases requires that each party have sufficient contacts with the United States as a whole rather than any particular state. See ISI Int'l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 551 (7th Cir.2001). "The due process clause protects persons from being haled into a court unless they have `minimum contacts' with the sovereign that established that court. The jurisdiction whose power federal courts exercise is the United States of America, not the State of Illinois." Id. Defendants...