Camasta v. Omaha Steaks Int'l, Inc.
| Decision Date | 21 August 2013 |
| Parties | PATRICK EDWARD CAMASTA, individually and as the representative of a class of similarly situated persons, Plaintiffs, v. OMAHA STEAKS INTERNATIONAL, INC., d/b/a/ OMAHA STEAKS, and OS SALESCO, INC., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Honorable Joan H. Lefkow
Plaintiff Patrick Camasta,1 individually and as a representative of a class of similarly situated persons, filed suit against defendants Omaha Steaks International Inc. ("OSI, Inc.") and OS SalesCo, Inc. ("OS Sales") alleging that defendants violated the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 Ill. Comp. Stat. 505/1 et seq., and the Illinois Uniform Deceptive Trade Practices Act ("UDTPA"), 815 Ill. Comp. Stat. 510/1 et seq.2 Before the court is defendant OSI Inc.'s motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and defendants' motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons stated below, OSI, Inc.'s motion [#6] is denied without prejudice and defendants' motion [#9] is granted in part and denied in part.
Camasta is an Illinois consumer who, on July 28, 2012, purchased Omaha Steaks filet mignons at defendants' retail store #134 in Vernon Hills, Illinois. Compl. ¶ 12. Camasta alleges that he saw advertisements of "sale prices" and was induced to buy the steaks because he believed them to be temporarily on sale. Id. ¶¶ 13-14. Camasta's receipt indicates that he received a discount of 35% off the regular retail price. Id. ¶ 13 & Ex. A. Camasta's receipt also states that "[i]f you are not absolutely thrilled with your purchase from Omaha Steaks Stores for any reason at all, we'll cheerfully replace your purchase or refund your money, whichever you prefer." Id. Ex. A.
Camasta alleges that the purchase price of the filet mignons was not actually reduced but is instead representative of defendants' pattern and practice of advertising the normal retail price as a temporary price reduction. Id. ¶ 16. Camasta alleges that he would not have bought the steaks "[b]ut for the advertised and promoted sales price." Id. ¶ 15. He further alleges that had he not been misled that the sale price was actually the normal retail price, he "could have purchased [the steaks] for less than the amount paid, or could have gone to another retail store for a true 'sale' price of a comparable item." Id. ¶ 32, 44. Camasta claims that defendants' advertisement of the normal retail price as a temporary price reduction is a misleading and fraudulent sales technique, citing to various other similar examples of alleged Omaha Steaks advertisements. Id. ¶¶ 18, 20. He also contends that the sales technique is pursued "through carefully coordinated print, television, direct mail and in store displays" and perpetrated on hundreds or thousands of Illinois consumers. Id. ¶¶ 19, 22.
OSI, Inc. is a Nebraska corporation with its principal place of business in Omaha, Nebraska. Declaration of David Hershiser ("Hershiser Decl.") ¶ 2. OSI, Inc. owns the "OmahaSteaks" trademark. Dkt. 17-1. OSI, Inc. is not licensed to do business in Illinois and does not maintain offices or have a registered agent located in Illinois. Hershiser Decl. ¶¶ 7, 13.
OS Sales is a Delaware corporation with its principal place of business in Omaha, Nebraska. Id. ¶ 2. OSI, Inc. and OS Sales are separate corporations affiliated through common ownership. Id. OS Sales maintains its own respective business operations, including separate accounts payable and receivables, separate tax filings, and separate leases and contracts. Id. ¶ 5. OS Sales does not communicate or confer with OSI, Inc. regarding OS Sales's pricing scheme, advertising or marketing campaigns. Id. ¶ 6.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) challenges whether the court has jurisdiction over a party. The party asserting jurisdiction has the burden of proof in establishing that the court should have jurisdiction over the challenging party. See Tamburo v. Dworkin, 601 F.3d 693, 701 (7th Cir. 2010). The court may review affidavits submitted by the parties when considering dismissing a case for lack of personal jurisdiction. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003).
If the court rules on a motion without a hearing, the plaintiff need only establish a "prima facie case of personal jurisdiction." Id. at 782 (quoting Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)). The court will "read the complaint liberally, in its entirety, and with every inference drawn in favor of" the plaintiff. Central States, Se. & Sw. Areas Pension Fund v. Phencorp Reinsurance Co., 440 F.3d 870, 878 (7th Cir. 2006) (quoting Textor v. Bd. of Regents of N. Ill. Univ., 711 F.2d 1387, 1393 (7th Cir. 1993)). Any dispute concerning relevant facts is resolved in favor of the plaintiff. Purdue, 338 F.3d at 782 (citing Nelson v. Park Indus.,717 F.2d 1120, 1123 (7th Cir. 1983)). "[O]nce the defendant has submitted affidavits or other evidence in opposition to the exercise of jurisdiction," however, "the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction." Id. at 783; see generally 4 Charles Alan Wright et al., Federal Practice and Procedure Civil § 1067.6 (3d ed.).
In diversity cases, a federal court has personal jurisdiction over a foreign defendant "'only if a court of the state in which [the district court] sits would have such jurisdiction.'" Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir. 1995) (quoting Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir. 1990)). Illinois's long-arm statute allows its courts to exercise personal jurisdiction to the full extent allowed by the United States Constitution. Id. (citing 735 Ill. Comp. Stat. 5/2-209(c)). In order to satisfy the Due Process Clause, the defendant must have "certain minimum contacts with [the forum 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, 66 S. Ct. 154, 90 L. Ed. 95 (1945) (quoting Millikin v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 85 L. Ed. 278 (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, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1984).
Personal jurisdiction comes in two forms: general and specific. Courts have general jurisdiction when the defendant has "continuous and systematic" contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). "The threshold for general jurisdiction is high; the contacts must be sufficiently extensive and pervasive to approximate physical presence," Tamburo, 601 F.3d at701, so "the defendant could reasonably foresee being haled into court there on any matter." Int'l Med. Grp., Inc. v. Am. Arbitration Ass'n, Inc., 312 F.3d 833, 847 (7th Cir. 2002). For this reason, a defendant is subject to general jurisdiction only where its contacts with the forum state are so substantial that it can be considered "constructively present" or "at home" in the state. Goodyear Dunlop Tires Ops., S.A. v. Brown, --- U.S. ----, 131 S. Ct. 2846, 2851, 180 L. Ed. 2d 796 (2011); Purdue, 338 F.3d at 787. Alternatively, the court has specific jurisdiction "if the defendant has 'purposefully directed' his activities at residents of the forum, and the litigation results from alleged injuries that 'arise out of or relate to' those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) (citations omitted). In either case, "each defendant's contacts with the forum State must be assessed individually." Calder v. Jones, 465 U.S. 783, 790, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984).
According to the declaration submitted by David Hershiser, Vice President and Chief Financial Officer of OSI, Inc. and OS Sales, OSI, Inc. does not do business in Illinois, does not have offices in Illinois, does not solicit business in Illinois, and does not have control over any advertising or marketing carried out by OS Sales, a corporate affiliate, in the state of Illinois. Hershiser Decl. ¶¶ 3-7, 12. Camasta argues in response, however, that OSI, Inc. is subject to jurisdiction here because it has opened six stores in Illinois through its retail division, OS Sales, uses its trademark to advertise its products, and maintains an interactive website to sell its products to Illinois consumers. Alternatively, Camasta requests jurisdictional discovery to determine whether OSI, Inc. financially benefits from its products being sold in Illinois or the use of its trademark in Illinois.
Camasta argues that jurisdiction over OSI, Inc. exists because OSI, Inc. does business in Illinois through its corporate affiliate, OS Sales. "[C]orporate ownership alone is not sufficient for personal jurisdiction." Cent. States, Se., 230 F.3d at 943. In order for this court to have jurisdiction over OSI, Inc. based on its affiliation with OS Sales, Camasta must rely on an exception to the general rule that the contacts of one corporation are not imputed to a corporate affiliate for jurisdictional purposes, such as where a parent company exerts actual control over a subsidiary or there are grounds for piercing the corporate veil.3 Id. at 940, 943-44; see also Abelesz v. OTP Bank, 692 F.3d 638, 658-59 (7th Cir. 2012) ("Imputation, however, requires an unusually high degree of control or that the subsidiary's corporate existence is simply a formality." (...
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