Janmark, Inc. v. Reidy

• Decision Date: 24 December 1997
• Docket Number: No. 97-1426,97-1426
• Citation: 132 F.3d 1200
• Parties: 1998 Copr.L.Dec. P 27,717, 45 U.S.P.Q.2d 1382 JANMARK, INC., Plaintiff-Appellant, v. James T. REIDY and Dreamkeeper, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1200

132 F.3d 1200

1998 Copr.L.Dec. P 27,717, 45 U.S.P.Q.2d 1382

JANMARK, INC., Plaintiff-Appellant, v. James T. REIDY and Dreamkeeper, Inc., Defendants-Appellees.

No. 97-1426.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 31, 1997.

Decided Dec. 24, 1997.

Mark E. Wiemelt (argued), Chicago, IL, for Plaintiff-Appellant.

John M. Riccione, Dawn C. Wrona (argued), Deborah G. Cole, Aronberg, Goldgehn, Davis & Garmisa, Chicago, IL, Michael J. Emling, Phillip H. Haymond, Long Beach, CA, for Defendants-Appellees.

Before FLAUM, EASTERBROOK, and KANNE, Circuit Judges.

EASTERBROOK, Circuit Judge.

Janmark seeks a declaratory judgment that it has not infringed the defendants' copyright in the design of a "mini shopping cart", plus an injunction against unfair competition based on a false claim of copyright infringement. The suit came to an early end when the district court concluded that it lacks personal jurisdiction over the defendants. Omni Capital International, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987), in conjunction with Fed.R.Civ.P. 4(k)(1)(A), requires a district judge to determine whether the state in which the district court is located is authorized to exercise personal jurisdiction--even though ascertaining a state's power in a federal-question case such as this, see 28 U.S.C. § 1338(b), seems almost a wager of law, given the power of the United States of America to hale its citizens into its courts. See Diamond Mortgage Corp. v. Sugar, 913 F.2d 1233, 1244 (7th Cir.1990); Lisak v. Mercantile Bancorp, Inc., 834 F.2d 668, 671 (7th Cir.1987). But this is what Rule 4(k)(1)(A) requires, see United Rope Distributors, Inc. v. Seatriumph Marine Corp., 930 F.2d 532 (7th Cir.1991), unless a federal statute authorizes nationwide service, see Rule 4(k)(1)(D), which the Copyright Act does not. The addition of Rule 4(k)(2) in 1993 highlights this limitation by authorizing worldwide service of process when the defendant otherwise "is not subject to the jurisdiction of the courts of general jurisdiction of any state" (emphasis added). James Reidy and Dreamkeeper, the defendants, are subject to the jurisdiction of California, their home state. So the current litigation may proceed only if Reidy and Dreamkeeper also are subject to the jurisdiction of the State of Illinois.

Janmark and Dreamkeeper both sell mini shopping carts throughout the United States--Janmark from its base in Illinois, and Dreamkeeper from its facilities in California. Reidy, who runs Dreamkeeper, contends that he has a copyright in its cart as a "sculpture"; Janmark believes that its competing cart was created independently and doubts that either cart is copyrightable subject matter, for there can be no copyright in a utilitarian item. Compare Hart v. Dan Chase Taxidermy Supply Co., 86 F.3d 320 (2d Cir.1996), with Carol Barnhart Inc. v. Economy Cover Corp., 773 F.2d 411 (2d Cir.1985). Dreamkeeper has tried to use its copyright claim to orchestrate an agreement among all mini-shopping-cart sellers. A skeptic might deem this an attempt to organize a cartel, backed up by efforts to ruin the business of anyone who does not cooperate. Janmark has resisted Dreamkeeper's overtures, and according to Janmark Dreamkeeper has responded by threatening Janmark's customers with suits for contributory infringement. One such threat, which induced a customer in New Jersey to cease buying shopping carts from Janmark, is the basis of Janmark's contention that Dreamkeeper has committed a tort "within" Illinois and therefore is amenable to process under its long-arm statute, 735 ILCS 5/2-209(a)(2).

From one perspective this is a silly position. How can Reidy's phone call from California to New Jersey be a tort "within" Illinois? The New Jersey (ex-) buyer may have contacts with Illinois, but Reidy and Dreamkeeper do not. Janmark observed that the reduction in sales makes it poorer, but the district court pointed to a number of cases holding that bad financial consequences for a firm in Illinois do not amount to a tort in Illinois. Green v. Advance Ross Electronics Corp., 86 Ill.2d 431, 56 Ill.Dec. 657, 427 N.E.2d 1203 (1981); Talbert & Mallon, P.C. v. Stokes Towing Co., 213 Ill.App.3d 992, 157 Ill.Dec. 750, 572 N.E.2d 1214 (5th Dist.1991). This would be easy enough to see if Janmark had sent a shipment of shopping carts to New Jersey, where Reidy had pushed them into the Atlantic Ocean. Ruining the carts would diminish Janmark's bank accounts in Illinois, but this would not relocate the tort from New Jersey to Illinois. Yet it is equally clear that if Reidy had intercepted a shipment of carts in New Jersey, placed a bomb in the crate and sent it back to Illinois, where the bomb exploded, the tort would occur "within" Illinois even though all of Reidy's acts were carried out in New Jersey. There is no tort without injury, Rozenfeld v. Medical Protective Co., 73 F.3d 154, 156 (7th Cir.1996) (Illinois law), and the state in which the injury (and therefore the tort) occurs may require the wrongdoer to answer for its deeds even if events...