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Villalobos v. Castaneda

United States District Court, Seventh Circuit

September 27, 2013

RAMON VILLALOBOS and ALBERTO VALENCIA, Plaintiffs,
v.
JESUS TIRADO CASTAÑEDA, EDEN MUÑOZ, ARMANDO RAMOS, MARTIN LOPEZ, MARTIN AUGUSTO GUIDO, and UMG RECORDINGS, INC. Defendants.

OPINION AND ORDER

JOAN HUMPHREY LEFKOW, District Judge.

Ramon Villalobos and Alberto Valencia[1] (together, "plaintiffs") filed a six-count complaint alleging federal claims for trademark infringement and unfair competition in violation of Sections 32(a) and 43(a) of the Lanham Act, 15 U.S.C. §§ 1051 et seq ., and Illinois state law causes of action for unfair competition, violation of the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/2 et seq ., and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/2 et seq ., against Jesus Tirado Castañeda, Eden Muñoz, Armando Ramos, Martin Lopez, Martin Augusto Guido ("the individual defendants"), and UMG Recordings, Inc. ("UMG").[2] Presently before the court are Ramos's motion[3] to dismiss for improper service of process pursuant to Federal Rule of Civil Procedure 12(b)(5), the individual defendants' motions to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), and defendants' motion to transfer venue to the United States District Court for the Central District of California pursuant to 28 U.S.C. § 1404 [Dkt. 18]. For the reasons that follow, the motion to dismiss for improper service of process is granted without prejudice, the motion to dismiss for lack of personal jurisdiction is denied, and the motion to transfer the case to the Central District of California is granted.

BACKGROUND[4]

I. Calibre Norteño

Villalobos is the founder and Valencia was the manager of Calibre Norteño, a musical group formed in 1999 that performed throughout the United States (specifically including the Northern District of Illinois) and in Mexico. Villalobos and Valencia reside in the Northern District of Illinois. Valencia had been the manager of Calibre Norteño since 2005 and promoter since 2010. Specifically, "calibre" is a Spanish words that means "caliber." "Norteño" is a genre of Mexican music that is popular both in the United States and Mexico. The English translation of "Calibre Norteño" is "Northern Caliber."

In 2000, Calibre Norteño made its first public performance in Illinois. In 2001, Calibre Norteño began touring nationally and, between 2001 and 2009, it performed in California, Texas, Colorado, Idaho, Nebraska, Georgia, and Florida. In 2002, 2003, and 2006, Calibre Norteño toured in Mexico. In 2007, Villalobos registered the Calibre Norteño logo as a design mark for live performances by a musical band, which issued as Registration Number 3, 344, 730. He did not register any other trademarks in connection with Calibre Norteño aside from the logo. Calibre Norteño released eight albums and its most recent album, SI REGRESAS, was released in 2012. Since its inception, Calibre Norteño has garnered a significant following among fans of Latin and Mexican-American music throughout the United States.

II. Calibre 50

Muñoz, Ramos, Lopez, and Guido are members of a band called Calibre 50. All of these individual defendants ("the band members") reside in Mexico. Castañeda formed Calibre 50 and serves as its manager. In this role, Castañeda controls Calibre 50's business activities, which include scheduling performances and promoting the band. The band members are not involved in scheduling or promoting live performances. In addition to Calibre Norteño and Calibre 50, there are numerous other Spanish-language music artists who incorporate the word "Calibre" into their band name.[5] For example, Calibre Pesado is a Mexican regional band based in Kansas. On April 20, 2010, Castañeda filed U.S. Trademark Application Serial No. 85/018, 463 for the mark Calibre 50 with respect to "audio and video recordings featuring music and artistic performances" including "entertainment, namely, live performances by a musical band." (Dkt. 56-1, PageID 255.)[6]

UMG, through its subsidiary, Universal Music Latin Entertainment ("UMLE"), a Delaware corporation with its principal place of business in Santa Monica, California, markets, promotes, and distributes Calibre 50's album nationwide. Castañeda met with UMLE in Santa Monica and Woodland Hills, California to discuss marketing and promotions for Calibre 50. On December 7, 2010, Calibre 50 released a music album titled, "RENOVAR O MORIR" ("Renew or Die"). Disa Records label ("Disa"), which is owned by UMG, released the album and promoted and sold it throughout the United States. On March 22, 2011, Calibre 50 released another album, "DE SINALOA PARA EL MUNDO" ("From Sinaloa to the World"), which was released by Disa and promoted and sold throughout the United States. On January 17, 2012, Calibre 50 released an album titled, "MUJER DE TODO, MUJER DE NADIE" ("Woman of All, Woman of No One"), which was released by Disa and promoted and sold throughout the United States. On February 28, 2012, Calibre 50 released an album titled, "EL BUEN EJEMPLO" ("The Good Example"), which was released by Disa and promoted and sold throughout the United States. Castañeda travels from his home in Mexico to attend meetings in Santa Monica or Woodland Hills relating to the marketing and promotion of Calibre 50.

III. Calibre 50's Performances in Illinois

In July 2012, Calibre 50 played three live music performances on consecutive nights in and around Chicago, Illinois. Calibre 50 promoted and advertised these shows in the Chicago area. On July 13, 2012, Valencia had his attorney send a cease and desist letter to an attorney representing defendants. The letter informed defendants' attorney that Valencia had owned the Calibre Norteño design mark for live performances by a musical band since 2007. The letter asserted that defendants were allegedly infringing that mark through the use of the term Calibre in their band name. The letter requested that defendants' attorney respond by July 20, 2012.

Valencia and Villalobos also submitted affidavits in response to defendants' motion to dismiss averring that they had seen written advertisements, television and radio advertisements, compact discs, Internet YouTube video postings, and posters promoting Calibre 50 in Illinois. They further stated that he had seen and heard television and radio advertisements for Calibre 50 and that Calibre 50 performed in Illinois in 2013 after this law suit was filed. They attached printouts from Yahoo that returned "hits" for the search term "Calibre 50." Among the hits returned by Yahoo included hyperlinks to YouTube postings of Calibre 50's performances and other pages advertising Calibre 50 performances in the Chicago area in 2013. Villalobos's declaration also stated that he is of limited financial resources and his sole source of income comes from his employment in Illinois. He further stated that Valencia had provided financial support for the present law suit (and that his estate may be unable to contribute future to litigation expenses for this case).

The band members submitted declarations stating that, prior to the filing of this law suit, none of them had heard of Calibre Norteño. They additionally stated that traveling to Chicago in connection with this matter would be burdensome. Castañeda also submitted a declaration stating that he was not aware of Calibre Norteño before he chose the Calibre 50 name. Castañeda learned of Calibre Norteño while he was in Monterrey, Mexico, sometime in 2010 after receiving a phone call from one of the plaintiffs. At that time, Castañeda was unaware that Calibre Norteño had any connection with Illinois. Castañeda believed that both bands had the right to use the word "Calibre" in their name as it was a commonly used word in the names of Mexican bands. Plaintiffs filed this law suit in October 2012 alleging that defendants' use of the Calibre 50 mark infringes their rights in the Calibre Norteño design mark and request damages and injunctive relief.

LEGAL STANDARD

Rule 4(m) requires defendants to be served within 120 days of the filing of a complaint. Fed.R.Civ.P. 4(m). "[V]alid service of process is necessary to assert personal jurisdiction over a defendant." Mid-Continent Wood Prods., Inc. v. Harris , 936 F.2d 297, 301 (7th Cir. 1991). If service is not timely effectuated, Rule 12(b)(5) provides that a defendant may seek dismissal of a complaint based on insufficient service. Fed.R.Civ.P. 12(b)(5). The plaintiff has the burden of demonstrating that the court has ...


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