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METROPOLITAN LIFE INSURANCE CO. v. O'MALLEY

September 9, 2005.

Metropolitan Life Insurance Co., Plaintiff,
v.
Michael K. O'Malley, et al., Defendants.



The opinion of the court was delivered by: CHARLES NORGLE, District Judge

OPINION AND ORDER

Plaintiff Metropolitan Life Insurance Company ("MetLife") brings this Complaint for unfair competition in violation of the Lanham Act, 15 U.S.C. ยง 1125(a), breach of contract, breach of fiduciary duty, tortious interference with contracts and business relations, conversion, civil conspiracy, and violations of the Illinois Trade Secrets Act. The contract signed by Defendant Michael K. O'Malley ("O'Malley"), includes an Arbitration Disclosure Statement. For that reason, the court, sua sponte, dismisses the Complaint for improper venue.

I. BACKGROUND

  A. Facts

  MetLife has operated an insurance agency in Downers Grove, Illinois for over twenty-five years, providing sophisticated financial planing and insurance services to its clients in the Chicagoland area. From 1998 through 2005, the Downers Grove agency was known as "O'Malley and Associates." In April 2005, MetLife changed the name of the Downers Grove agency to "Preferred Planning Group," yet continued to use the name and logo of O'Malley and Associates for business purposes. MetLife alleges that it spent a great deal of money in the development and distribution of marketing materials under the O'Malley and Associates logo. Some of these materials and logos are still in circulation in the tri-state area.

  O'Malley worked at MetLife from 1978 to 2005. In 1986, he was promoted to Managing Director, and in 1998, the Downers Grove agency became known as "O'Malley and Associates." Additionally in 1986, O'Malley signed an employment agreement that contained non-compete and non-solicitation provisions, as well as prohibitions against taking client files and revealing trade secrets.

  The individual defendants in this case are former employees of the Downers Grove agency who left MetLife between April 28 and July 1, 2005. Around July 1, MetLife alleges that the individual defendants formed a competing agency, which is affiliated with the corporate Defendants, and is also named "O'Malley and Associates." MetLife further alleges that Defendants formed this competing agency to confuse and deceive MetLife's clients and the general public as to who worked for which agency. Additionally, MetLife alleges that O'Malley, as the former managing director of the Downers Grove agency, induced former MetLife employees to leave MetLife and breach their employment agreements. These alleged breaches include the solicitation of MetLife clients by these former employees and the unlawful taking of client files.

  Furthermore, the Complaint alleges that sometime before April 2005, while O'Malley was still employed by MetLife, he began to negotiate with Guardian Life ("Guardian") to open a competing office in Downers Grove. Guardian offers financial products and services through its subsidiaries Park Avenue Securities LLC ("PAS") and Guardian Investor Services LLC ("GIS"). O'Malley's new agency allegedly offers the same securities as MetLife's Downers Grove office.

  B. Procedural History

  MetLife filed its ten-count Complaint on July 29, 2005, alleging violations of the Lanham Act, breach of contract and fiduciary duty, tortious interference with contract, tortious interference with business relations, conversion, and violation of the Illinois Trade Secrets Act. On August 3, 2005, Defendants filed a Motion to Dismiss pursuant to the Colorado River abstention doctrine, and MetLife responded on August 18. Because the court sua sponte dismisses the Complaint on improper venue grounds, Defendant's Colorado River motion is denied as moot.

  II. DISCUSSION

  A. Standard of Review

  1. Federal Court Jurisdiction

  The court "has an independent obligation to satisfy itself that federal subject matter jurisdiction exists before proceeding to the merits in any case." Am. Gen. Life & Accident Ins. Co., 337 F.3d 888, 892 (7th Cir. 2003). Federal courts are "always obliged to inquire sua sponte whenever a doubt arises as to the existence of federal jurisdiction." Tylka v. Gerber Prods. Co., 211 F.3d 445, 447-48 (7th Cir. 2000) (quotation and internal marks omitted). "The first thing a federal judge should do when a complaint is filed is check to see that federal jurisdiction is properly alleged." Wisconsin Knife Works v. National Metal Crafters, 781 F.2d 1280, 1282 (7th Cir. 1986). In Market Street Assocs. Ltd. Partnership v. Frey, the Seventh Circuit stated: "We remind the bench and bar of this circuit that it is their nondelegable duty to police the limits of federal jurisdiction with meticulous care. . . ." Market Street Assocs. Ltd Partnership, 941 F.2d 588, 590 (7th Cir. 1991); see also Hart v. Terminex Intern., 336 F.3d 541, 544 (7th Cir. 2003) (reiterating the admonition that litigants and courts must "meticulously ...


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