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Richard Hoffman and M&R Printing Equipment Inc v. Robert W. Barnes

March 26, 2012

RICHARD HOFFMAN AND M&R PRINTING EQUIPMENT INC., PLAINTIFFS,
v.
ROBERT W. BARNES,
DEFENDANT.



The opinion of the court was delivered by: Judge Sharon Johnson Coleman

MEMORANDUM OPINION AND ORDER

Plaintiffs, Richard Hoffman and his company M&R Printing Equipment Inc., filed a three Count complaint against defendant Robert Barnes, alleging defamation per se, violation of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/2, and false advertising in violation of Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a)(1)(B), based on numerous posts on two printing industry related Internet discussion forums. Barnes moves to dismiss pursuant to Rule 12(b)(2) for lack of personal jurisdiction and for failure to state a claim pursuant to Rule 12(b)(6). For the reasons stated below the motion is granted.

Background

Both Richard Hoffman and Robert Barnes work in the screen printing industry. Hoffman is the President and CEO of M&R Printing Equipment, Inc. M&R manufactures and sells screen printing equipment. Hoffman resides in Lake County, Illinois, and M&R is a Delaware corporation with its principal place of business in Glen Ellyn, Illinois. Barnes promotes and sells screen printing equipment manufactured by M&R's competitors. Barnes resides in North Carolina. Although Barnes admits to posting comments on www.digitsmith.com and www.screenprintersopen.com, he disputes having posted under all the screen names alleged in the complaint.

Discussion

Rule 12(b)(2) mandates dismissal of an action against a party over whom the court lacks jurisdiction. Fed. R. Civ. P. 12(b)(2). The plaintiff bears the burden of establishing a prima facie case of personal jurisdiction. See, e.g., Cent. States, Southeast & Southwest Areas Pension Fund v. Phencorp Reinsurance Co., 440 F.3d 870, 875 (7th Cir. 2006). The court may look to affidavits and exhibits submitted by the parties to assess whether it may exercise personal jurisdiction over the defendant, resolving conflicts in the supporting material in favor of the plaintiff. Purdue Research Foundation v. Sanofi-Synthelab, S.A., 338 F. 3d 773, 782 (7th Cir. 2003). When determining whether the plaintiff has met the burden of establishing jurisdiction, allegations in the complaint are taken as true unless controverted by the defendant's affidavits or exhibits. Id.

Hoffman is seeking relief, at least in part, under the Lanham Act. A federal court has personal jurisdiction over the defendant if either federal law or the law of Illinois authorizes service of process to Barnes. Mobile Anesthesiologists Chicago, LLC, v. Anesthesia Associates of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010). The Lanham Act does not authorize nationwide service of process, therefore this Court may exercise personal jurisdiction over Barnes only if authorized under Illinois law. Be2LLC and be2 Holding, A.G. v. Ivanov, 642 F.3d 555, 558 (7th Cir. 2011). The Illinois long-arm statute provides for personal jurisdiction on any basis permitted by both the Illinois constitution and the United States Constitution. 735 ILCS 5/2-209(c). Although the state and federal standards for due process are not identical, there is no operative difference between the limits imposed under the Illinois constitution and the federal constitution for exercising personal jurisdiction. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2003).

The Due Process Clause of the Fourteenth Amendment of the U.S. Constitution permits a court to exercise jurisdiction over a non-resident defendant only if the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L.Ed. 95, 66 S.Ct. 154 (1954)(quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L.Ed. 278, 61 S.Ct. 339 (1940)). There are two types of personal jurisdiction: general and specific. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Here, Barnes does not have the kind of "continuous and systematic" contacts with Illinois that would allow this Court to exercise general personal jurisdiction over him. See Id. at 416. Thus, this Court will examine whether Barnes purposefully directed his activities at Illinois and the alleged injury arises out of those activities sufficient to exercise specific personal jurisdiction over Barnes. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

For allegations of intentional torts, the Supreme Court has held that constitutionally sufficient contacts can be imputed to a defendant if the alleged actions are "expressly aimed" at the forum state. See Calder v. Jones, 465 U.S. 783, 789090, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). In Calder, the Supreme Court describes three requirements for personal jurisdiction: (1) intentional conduct; (2) expressly aimed at the forum state; (3) with the defendant's knowledge that the effects would be felt (i.e., that the plaintiff would be injured) in the forum state. Tamburo v. Dworkin, 601 F.3d 693, 704-708 (7th Cir. 2010)(citing Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1072 (10th Cir. 2008)). Since Calder courts have struggled to define the contours of what it means for conduct to be "expressly aimed" at the forum state. Courts in this district have noted the seeming inconsistency and difficulty in applying the "expressly aimed" prong of Calder. See, e.g., Mobile Anesthesiologists Chicago, LLC, 623 F.3d at 444-47; Tamburo, 601 F.3d at 704-708; Macey & Aleman v. Simmons, 2012 U.S.Dist. LEXIS 19828 *7-13 (N.D.Ill. Feb. 15, 2012)(C.J. Holderman).

Here, the first prong and even the third prong of Calder are fairly easily satisfied. Hoffman alleges that Barnes posted comments on Internet forums to defame Hoffman and his company intending to diminish Hoffman's reputation and sales. The complaint further alleges that Barnes knew Hoffman would feel the brunt of his injury in Illinois since that is where Hoffman resides and where M&R Printing is located. Barnes posted a photograph of himself standing in front of the M&R Printing headquarters in Glen Ellyn, Illinois. The decisive issue here is whether Barnes "expressly aimed" his comments at the forum state. Resolution of this issue is much murkier.

Courts' application of Calder's "express aiming" requirement has ranged from very broad readings, requiring only conduct that is "targeted at a plaintiff whom the defendant knows to be a resident of the forum state," Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1087 (9th Cir. 2000), to more narrow readings that require the forum state to be the "focal point of the tort." Dudnikov, 514 F.3d at 1074 n.9. Although the Seventh Circuit has not firmly settled on one reading or another, a review of some of the Seventh Circuit's application of Calder shows that the relationship between the allegedly tortious conduct and the forum state itself is a crucial consideration. Recently, Wallace v. Herron, 778 F.2d 391 (7th Cir. 1985), and Janmark v. Reidy, 132 F.3d 1200 (7th Cir. 1997), have been cited as representative of the tension in this Circuit over the proper reading of Calder. See, e.g., Tamburo, 601 F.3d at 704-708.

In Wallace v. Herron, 778 F.2d 391 (7th Cir. 1985), the court affirmed a dismissal of a claim for malicious prosecution for lack of personal jurisdiction. In applying Calder, the court stated that the key is "that the effects of an alleged intentional tort are to be assessed as part of the analysis of the defendant's relevant contacts with the forum." Wallace, 778 F.2d at 395. The court reasoned that the Indiana court did not have personal jurisdiction over the defendant because, unlike in Calder where California (the forum) was the focal point of both the story and any harm suffered, in Wallace the defendant's only contact with the forum were the legal papers which were served on Wallace in Indiana filed on behalf of their California clients in a California court pursuant to a California lawsuit. The defendants in Wallace "took no action that created the necessary connection with Indiana for them to reasonably anticipate being haled into court there." Id.

Janmark v. Reidy involved a claim of unfair competition by an Illinois shopping cart manufacturer against a California shopping cart manufacturer. Janmark, 132 F.3d at 1201-02. In Janmark, a New Jersey customer stopped buying shopping carts from the Illinois manufacturer after the defendant California shopping cart manufacturer made a threatening telephone call. Id. at 1202. The court held that the California manufacturer was subject to Illinois jurisdiction even though the telephone call took place in California and New Jersey because "the tort was not complete (because no injury occurred) until Janmark's customer canceled the order; the injury and thus the tort occurred in Illinois." Id. Thus, Janmark took a much broader view of Calder than Wallace by emphasizing the situs of the injury rather than the relationship between the defendant's actions and the forum state itself.

Here, Hoffman relies on Tamburo v. Dworkin, 601 F.3d 693 (7th Cir. 2010), to support personal jurisdiction here. Applying Calder, the court concluded that specific personal jurisdiction existed over the Canadian and American individual defendants but not the Australian defendant on Tamburo's intentional tort claims. The court reasoned that "[t]hese defendants are alleged to have used their websites -- or in the case of the Canadian defendant, blast emails to the online dogpedigree community -- to defame and tortiously generate a consumer boycott against Tamburo, knowing that he lived and operated his software business in Illinois and would be injured there. Indeed, some of the messages specifically listed Tamburo's Illinois address and urged readers to harass him. This is enough for a prima facie case of personal jurisdiction under Calder's "express aiming" test for personal jurisdiction in intentional tort cases." Tamburo, 601 F.3d at 697. In Tamburo, the court specifically recognized the tension between the court's previous applications of Calder. Id. at 704-08.Significantly, though the court found that Seventh Circuit precedent had "read Calder to require a forum-state injury and 'something more' directed at that state before jurisdiction over a defendant may be considered proper." (Emphasis added.) Id. at 706.The court held that "[t]ortious acts aimed at a target in the forum state and ...


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