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More Cupcakes, LLC v. Lovemore LLC

September 24, 2009

MORE CUPCAKES, LLC, PLAINTIFF,
v.
LOVEMORE LLC, ANGELA B. CROSSMAN, AND ANDREA R. CROSSMAN, DEFENDANTS.



The opinion of the court was delivered by: Charles P. Kocoras, District Judge

MEMORANDUM OPINION

Defendants Lovemore LLC, Angela B. Crossman, and Andrea R. Crossman ("Defendants") have filed three motions that are now before the Court. Defendants filed a motion to dismiss claims against Defendants for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), a motion to dismiss the claims against Angela B. Crossman and Andrea R. Crossman ("the Crossman Defendants") for failure to state a claim upon which relief may be granted under Fed. R. Civ. P. 12(b)(6), and a motion to transfer under 28 U.S.C. § 1404(a). For the reasons stated below, we deny both of Defendants' motions to dismiss and grant their motion to transfer.

BACKGROUND

Plaintiff More Cupcakes, LLC ("More Cupcakes") is a limited liability company doing business in Illinois. More Cupcakes has an active bakery and makes over-the- counter and catering sales of its products within this District. Defendant Lovemore, LLC ("Lovemore T-Shirts") is a domestic limited liability company of New York State doing the majority of its business within New York. The Crossman Defendants, sisters Angela B. and Andrea R. Crossman, are the founders, owners, and operators of Lovemore T-Shirts and personally direct Lovemore T-Shirts' business activities. Lovemore T-Shirts offers apparel with variations of the words "love more" upon it to locations throughout the United States, including Illinois, via its website at www.chooselovemore.com.

On May 15, 2008, More Cupcakes filed an application with the United States Patent and Trademark Office ("USPTO") to register a trademark for the words "love MORE" for use on t-shirts. Four days later, the Crossman Defendants filed a similar application to register "love more" for use on t-shirts. On September 4, 2008, the USPTO suspended the Crossman Defendants' application until it could decide on More Cupcakes' earlier application. The Crossman Defendants filed for an extension of time with the USPTO to oppose More Cupcakes' application in November 2008. While pursuing a resolution through the USPTO, the Crossman Defendants, More Cupcakes, and their respective counsel sought to resolve the case privately but were unsuccessful. After settlement discussions ended, the Crossman Defendants abandoned their opposition to More Cupcakes' trademark through the USPTO. More Cupcakes received its registration for its trademark for the words "love MORE" on t-shirts on June 2, 2009.

Lovemore T-Shirts has continued to operate its website offering apparel with its "Lovemore" logo throughout this dispute. Lovemore T-Shirts, at the direction of the Crossman sisters, has also sold two separate orders of their t-shirts bearing the allegedly infringing "Lovemore" mark to customers in Illinois. Lovemore T-Shirts most recently sold and shipped their products to an Illinois resident two days after More Cupcakes registered its trademark with the USPTO. On June 9, More Cupcakes brought an action for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. § 1 et seq. and analogous portions of Illinois law. Defendants' move to dismiss for lack of personal jurisdiction, to dismiss claims against the Crossman Defendants for failure to state a claim, and to transfer the case to the Eastern District of New York. We will now discuss each motion separately.

LEGAL STANDARDS

I. Motion To Dismiss For Lack of Personal Jurisdiction

Plaintiff has the burden of demonstrating the grounds for exercising personal jurisdiction over the defendant. GCIU-Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). "When the district court rules on a defendant's motion to dismiss based on the submission of written materials, without the benefit of an evidentiary hearing . . . the plaintiff need only make out a prima facie case of personal jurisdiction." Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The plaintiff's burden is not heavy - in deciding whether the plaintiff has satisfied the prima facie standard, "the plaintiff is entitled to the resolution in its favor of all disputes concerning relevant facts presented in the record." RAR, Inc. v. Turner Diesel, 107 F.3d 1272, 1275 (7th Cir. 1997).

For a district court's exercise of personal jurisdiction over a defendant to be proper in a federal question suit, the defendant must have "sufficient contacts with the United States as a whole" (i.e., either residency in, or doing business in any U.S. state) and must also be amenable to process. See United States v. Martinez de Ortiz, 910 F.2d 376, 381 (7th Cir. 1990) . Because Defendants are residents of New York and are engaged in business in New York, the "sufficient contacts with the United States as a whole" standard is easily met. To determine whether a defendant is amenable to process we look to Fed. R. Civ. P. 4(k)(1). Rule 4(k)(1) states that any defendant "who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located" is amenable to process. Fed. R. Civ. P. 4(k)(1)(A). So we must look to Illinois law to see if the Defendants are amenable to process and can be subjected to the personal jurisdiction of this court.

The Illinois long-arm statute, 735 ILCS 5/2-209(c), grants its courts the power to exercise jurisdiction on any basis permitted by the due process clause of the Illinois and United States Constitutions. See Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 714 (7th Cir. 2002). Though the Illinois and federal due process requirements for personal jurisdiction "hypothetically may diverge in some cases . . . no case has yet emerged where due process was satisfied under the federal constitution but not under the Illinois constitution." Citadel Group, Ltd. v. Wash. Reg'l. Med. Ctr., 536 F.3d 757, 761 (7th Cir. 2008). Because the parties have not asserted that the due process analysis would differ for federal and Illinois constitutional purposes, we will employ the federal analysis. Under this framework the amenability to process and due process inquiries collapse into each other - if Defendants can be subjected to personal jurisdiction in Illinois under the due process clause they are amenable to process and are subject to the personal jurisdiction of this Court.

Both parties agree that the Defendants are not subject to general personal jurisdiction, so our discussion will focus on whether Plaintiff has demonstrated that Defendants are subject to specific personal jurisdiction in Illinois courts. Specific jurisdiction "refers to jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the forum." RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997). Even the single act of a defendant can support an exercise of personal jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 n.18 (1985). Before a court may exercise personal jurisdiction over a defendant under the due process clause of the Fourteenth Amendment, a plaintiff must first demonstrate (1) that the defendant purposefully availed itself of the privileges of doing business within the forum state; (2) that the claim asserted by the plaintiff arises out of or results from the defendant's forum-related activities; and (3) that the exercise of personal jurisdiction over defendant would comport with traditional notions of fair play and substantial justice. Jennings v. AC Hydraulic A/S, 383 F.3d 546, 549 (7th Cir. 2004) (citations omitted); Euromarket Designs, Inc. v. Crate & Barrel, Ltd., 96 F. Supp. 2d 824, 834 (N.D. Ill. 2000). The parties do not address the "fair play and substantial justice" prong of the test, so we will confine our analysis to the first two requirements.

II. Motion To Dismiss for Failure To State A Claim For Which Relief May Be Granted Federal Rule of Civil

Procedure 12(b)(6) evaluates the legal sufficiency of a plaintiff's complaint. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In ruling on a motion to dismiss, a court must draw all reasonable inferences in favor of the plaintiff, construe all allegations of a complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). To be cognizable, the factual allegations contained within a complaint must raise a claim for relief "above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). However, a pleading need only convey enough information to allow the defendant to understand the gravamen of the complaint. Payton v. Rush-Presbyterian-St. Lukes Med. Ctr., 184 F.3d 623, 627 (7th Cir. 1999). A claim should not be dismissed unless it is ...


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