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SUNSTAR, INC. v. ALBERTO-CULVER COMPANY

July 31, 2003

SUNSTAR, INC., PLAINTIFF,
v.
ALBERTO-CULVER COMPANY, INC. AND BANK ONE CORPORATION F/K/A FIRST NATIONAL BANK OF CHICAGO, DEFENDANTS; ALBERTO-CULVER COMPANY, A DELAWARE CORPORATION, PLAINTIFF, V. SUNSTAR, INC., A JAPANESE CORPORATION, SUNSTAR GROUP COMPANY (F/K/A ALBERTO-SUNSTAR CO., LTD.), A JAPANESE CORPORATION, KANEDA, KASAN, KABUSHIKI KAISHA, A JAPANESE CORPORATION, AND BANK ONE, NATIONAL ASSOCIATION, AS TRUSTEE UNDER TRUST AGREEMENT NO. 22-81196, DATED FEBRUARY 27, 1980, A NATIONAL BANKING ASSOCIATION, DEFENDANTS



The opinion of the court was delivered by: Ronald Guzman, District Judge

MEMORANDUM OPINION AND ORDER

This matter is before the Court on Sunstar, Inc. and Kaneda, Kosan, Kabushiki Kaisha's Motion for Reassignment Based on Relatedness pursuant to Local Rule 40.4 between Alberto-Culver Co. v. Sunstar, No. 03 C 0123 ("Alberto II") and two previously consolidated cases [ Page 2]

pending before this Court — Sunstar v. Alberto-Culver Co., No. 01 C 0736 (the "Sunstar Action") and Alberto-Culver Co. v. Sunstar, No. 01 C 5825 ("Alberto I") (collectively, the "Consolidated Cases"). For the following reasons, the Court denies Movants' motion without prejudice.

BACKGROUND

In February 1980, Sunstar, Inc. ("Sunstar"), Alberto-Culver Company ("Alberto"), and Bank One, National Association f/k/a First National Bank of Chicago ("Bank One") entered into various agreements regarding the sale of Japanese VO5 trademarks (the "1980 Agreements"). Specifically, Alberto sold and assigned certain Japanese VO5 trademark registrations (the "Licensed Trademarks") to Sunstar, to be held in trust by Bank One as Trustee for Sunstar's benefit for 99 years. Concurrently, the Trustee granted Sunstar a 99-year exclusive Japanese trademark license for the Licensed Trademarks in Japan. After the 99-year term of the license was over, Sunstar would assume full legal title to the Licensed Trademarks. (Sunstar's Mot. for Reassignment Based on Relatedness, Ex. E, at 3.)

In 1999, a dispute developed between Sunstar and Alberto regarding whether a particular mark that Sunstar was using in Japan (the "1999 Mark") was or was not within the scope of Sunstar's license rights under the 1980 Agreements. That dispute gave rise to the Sunstar Action and Alberto I, which cases currently are pending before this Court and were consolidated in August 2001. (Id)

The Sunstar Action was filed in February 2001. In that action, Sunstar asserted various tort and contract claims against Alberto and Bank One arising from Bank One's suspension of Sunstar's license rights under the 1980 Agreements. The alleged ground for Bank One's suspension of Sunstar's license rights was Sunstar's use of the 1999 Mark in violation of the [ Page 3]

1980 Agreements. In response to Sunstar's complaint, Alberto filed affirmative defenses and counterclaims, and it initiated Alberto I. (Id. at 5.)

In Alberto I, which was attached to the Sunstar Action as a related case in July 2001, Alberto complained that Sunstar's use of the 1999 Mark was a supposed breach of the 1980 Agreements. It sought an injunction preventing Sunstar from using the 1999 Mark or the Licensed Trademarks and requested termination of the License Agreement. The Consolidated Cases proceeded through discovery. Then, following the close of discovery, Alberto moved to amend the Alberto I complaint. Therein, Alberto sought to add counts alleging Sunstar's failure to keep the Licensed Trademarks in continuous use in violation of Japanese trademark-use requirements and alleging Sunstar's submission of false use certificates in violation of the 1980 Agreements. Id. at 9. The court denied leave to amend, specifically stating that discovery had closed and "the date for amendment of the pleadings ha[d] far passed." (Order denying PL's Mot. for Leave to Amend Its Compl., Affirmative Defenses, and Countercls. (Oct. 29, 2002) (the "Oct. 29, 2002 Order").)

Alberto II is presently pending before another judge of this Court. In Alberto II, Alberto raised issues virtually identical to those contained in its proposed amendment to the Alberto I complaint, which the court denied leave to amend on October 29, 2002.

By the instant motion, Movants' seek to reassign Alberto II based on relatedness with the Consolidated Cases.

DISCUSSION

To reassign a case under LR 40.4, Movants must satisfy the requirements of LR 40.4(a) and LR 40.4(b). First, LR 40.4(a) provides that "[t]wo or more civil cases may be related if one or more of the following conditions are met: (1) the cases involve the same property; (2) the [ Page 4]

cases involve some of the same issues of fact or law; (3) the cases grow out of the same transaction or occurrence; or (4) in class action suits, one or more of the classes ...


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