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Inverom Corporation, An Illinois Corporation v. Digitek S.P.A.

March 29, 2011

INVEROM CORPORATION, AN ILLINOIS CORPORATION, PLAINTIFF,
v.
DIGITEK S.P.A., AN ITALIAN CORPORATION, AND MTA S.P.A., AN ITALIAN CORPORATION DEFENDANTS.



The opinion of the court was delivered by: Honorable Joan B. Gottschall

MEMORANDUM OPINION AND ORDER

Defendants Digitek S.p.A. ("Digitek") and MTA, S.p.A. ("MTA") (together, "defendants'") have moved to dismiss plaintiff Inverom Corporation's ("Inverom's") amended complaint for lack of subject matter jurisdiction and for failure to join a necessary party. For the reasons set forth below, the motion is denied.

I. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(7) enables a defendant to seek dismissal of a complaint for failure to join a necessary party. Fed. R. Civ. P. 12(b)(7). "Dismissal, however, is not the preferred outcome under the Rules." Askew v. Sheriff of Cook Cnty., Ill., 568 F.3d 632, 634 (7th Cir. 2009). "Courts are 'reluctant to dismiss for failure to join where doing so deprives the plaintiff of his choice of federal forum.'" Id. (quoting Davis Cos. v. Emerald Casino, Inc., 268 F.3d 477, 481 (7th Cir. 2001)).

Federal Rule of Civil Procedure 12(b)(1) enables a defendant to seek dismissal of a complaint for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). "If subject matter jurisdiction is not evident on the face of the complaint, the motion to dismiss pursuant to Rule 12(b)(1) would be analyzed as any other motion to dismiss, by assuming for the purposes of the motion that the allegations in the complaint are true." United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942, 946 (7th Cir. 2003); See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009) (calling a motion to dismiss for lack of subject matter jurisdiction in which the court need only look to the complaint a "facial challenge"). However, "if the complaint is formally sufficient but the contention is that there is in fact no subject matter jurisdiction, the movant may use affidavits and other material to support the motion." United Phosphorus, Ltd., 322 F.3d at 946; Apex Digital, Inc., 572 F.3d at 444 (calling a motion to dismiss for lack of subject matter jurisdiction where the court has to look beyond the complaint "factual challenge"). "The burden of proof on a 12(b)(1) issue is on the party asserting jurisdiction." United Phosphorus, Ltd., 322 F.3d at 946 (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884 (3d Cir. 1977)). In addition, once the movant proffers affidavits and other material that call a court's jurisdiction into question, "'[t]he presumption of correctness that [a court] accord[s] to a complaint's allegations falls away,'" Apex Digital, Inc., 572 F.3d at 444 (quotation omitted), and "the court is free to weigh the evidence to determine whether jurisdiction has been established." United Phosphorus, Ltd., 322 F.3d at 946 (citing Capitol Leasing Co. v. FDIC, 999 F.2d 188 (7th Cir. 1993); Filetech S.A. v. France Telecom S.A., 157 F.3d 922 (2d Cir. 1998); Carpet Group Int'l v. Oriental Rug Importers Ass'n, 227 F.3d 62 (3d Cir. 2000)).

In this case, for reasons explained more fully below, the complaint on its face adequately alleges a justiciable case or controversy; defendants, besides attaching some documents to its motion (the admissibility of which have not been established and the effect of which on this controversy is unclear), have not offered any affidavits or admissible evidence to support their argument of lack of subject matter jurisdiction. While the burden of proof on this question is on the plaintiff, id., defendants have come forward with nothing which undermines the allegations of the complaint. Accordingly, at this point in the litigation, the court cannot treat this as a factual challenge to subject matter jurisdiction; instead, the court must assume the allegations of the complaint are true.

II. BACKGROUND

A. Allegations Relating to the Relationship of the Parties

Inverom alleges that it is a sales representative and consulting company that in 2007 was retained by an Italian company called Selcom Elettronica S.p.A. ("Selcom") (its Delaware subsidiary is Selcom Group) to perform services on behalf of Selcom's affiliate, Digitek. Specifically, Inverom was engaged to sell Digitek's electronic display equipment to manufacturers in cutting-edge automotive and heavy machinery applications. Selcom agreed to compensate Inverom with an annual fee, a discretionary bonus, certain expenses and, if the parties had not formed a joint venture or extended the Selcom-Inverom Agreement before it expired, a 2% commission based on manufacturing contracts won by Digitek as a result of Inverom's sales efforts. The 2% commissions were to come due as sales were made by Digitek over the life of its manufacturing contracts. Inverom worked diligently and successfully to secure contracts for Digitek.

Inverom alleges that on or about October 13, 2008, Selcom Group sent Inverom a letter attempting to terminate the Selcom-Inverom Agreement, but requested that Inverom continue to provide Selcom Group with consulting services. On October 14, 2008, Selcom Group sent a letter to Inverom informing Inverom of the sale of Digitek to MTA and requesting that, as of the date of the letter, Inverom no longer provide Selcom Group with consulting services with reference to Digitek. "Selcom Group asserted in the [October 14, 2008] Letter that it would have no obligation to pay Inverom any commissions under the Selcom-Inverom Agreement for any contract procured by Inverom in favor of Digitek onward from October 14, 2008." (Am. Compl. ¶ 53.)

At or around this time, MTA, Digitek and Inverom commenced discussions about a new structure and compensation arrangement for Inverom's consulting services. Digitek and MTA encouraged Inverom to continue its work, which efforts resulted in long-term manufacturing contracts for Digitek.

On or around October 16, 2008, Inverom, MTA and Digitek discussed a new agreement for Inverom's services. Inverom's proposal envisioned commission payments to Inverom of 2% of monthly sales of products for companies introduced to Digitek by Inverom for the life of the contracts. On or about October 17, "one or more Digitek and/or MTA representatives contacted Inverom to request that Inverom continue providing consulting services to Digitek that it had previously provided to Selcom Group -- with regard to Digitek -- under the Selcom-Inverom agreement." (Am. Compl. ¶ 58.) Digitek and MTA requested that Inverom continue to work toward agreements with Fisker Automotive, Inc. ("Fisker Automotive") and Tesla Motors, Inc. ("Tesla Motors").

Roman Kuropas, Inverom's president, told Digitek/MTA that Inverom needed a six-month agreement. On or about October 22, 2008, MTA sent Inverom an agency agreement. (Am. Compl. Ex. G.) The proposed MTA agreement was to continue indefinitely until either party, by written notice, terminated the relationship, and the commission on most sales was to be 3%. Negotiations continued and Inverom's efforts on behalf of Digitek continued. Inverom ultimately agreed to at least some of MTA's terms. MTA reduced the terms it was offering.

On or about November 25, 2008, MTA declined in writing to engage in a relationship with Inverom. The declination ...


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