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Payton v. Kale Realty, LLC

United States District Court, N.D. Illinois, Eastern Division

August 26, 2014

RUSTY PAYTON, Plaintiff,
v.
KALE REALTY, LLC, and VOICESHOT LLC, Defendants.

OPINION AND ORDER

JOAN H. LEFKOW, District Judge.

Rusty Payton filed this suit individually and on behalf of a putative class against Kale Realty, LLC ("Kale") and Voiceshot LLC ("Voiceshot"), alleging violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, et seq. Before the court is Voiceshot's motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) (dkt. 37). For the following reasons, the motion is denied.

BACKGROUND[1]

On November 7, 2013, Payton, an Illinois citizen, filed suit against Kale Realty, LLC ("Kale"), an Illinois limited liability company with its principal place of business in Chicago. (Dkt. 1.) Payton alleged that Kale sent him unsolicited advertisements by text message in violation of the TCPA.

Payton amended his complaint on April 25, 2014 to add Voiceshot as a defendant. (Dkt. 19 ("Am. Compl.") ¶ 1.) The amended complaint alleges that Kale used Voiceshot's services to send unsolicited advertisements to prospective customers' cellular phones, including Payton's. ( Id. ¶¶ 13-14, 16-19, 22.) Voiceshot is a Delaware limited liability company with its principal place of business in Michigan. (Dkt. 37, Ex. 1 at 1.) It provides web-based cloud telecommunications services. ( Id. ) Voiceshot's website allows users to send mass text messages or other communications for a fee. Voiceshot's servers are located in California and Texas. ( Id. )

Voiceshot answered the amended complaint on June 2, 2014. (Dkt. 29 ("Ans.").) On June 19, 2014, Voiceshot filed a motion to dismiss for lack of personal jurisdiction. (Dkt. 37.) Voiceshot claims that it lacks sufficient contacts with Illinois for the court to assert either general or specific personal jurisdiction over it. ( Id. at 5.) Payton first responds that Voiceshot waived this defense by failing to include this argument in its answer. (Dkt. 54 at 5.) In the alternative, Payton argues that he has asserted a prima facie case of personal jurisdiction over Voiceshot in the amended complaint.

ANALYSIS

I. Waiver

Rule 12(b) provides that every defense "to a claim for relief in any pleading must be asserted in the responsive pleading." Fed.R.Civ.P. 12(b). A defendant asserting lack of personal jurisdiction must assert this defense in its first responsive pleading or it waives the defense. Fed.R.Civ.P. 12(h)(1); see also Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 705, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) ("[T]he failure to enter a timely objection to personal jurisdiction constitutes, under Rule 12(h)(1), a waiver of the objection."). A defendant waives a personal jurisdiction defense when it gives the plaintiff "a reasonable expectation that it will defend the suit on the merits or [] cause[s] the court to go to some effort that would be wasted if personal jurisdiction is later found lacking." Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010).

Voiceshot argues that it preserved its personal jurisdiction defense by denying the amended complaint's jurisdictional allegations in its answer. Its argument is supported by ISA Chicago Wholesale, Inc. v. Swisher Int'l, Inc., No. 08 C 3461, 2009 WL 971432, at *2 (N.D. Ill. Apr 7, 2009). In ISA, the plaintiff alleged in its complaint that venue[2] was proper because "a substantial part of the events or omissions giving rise to the claim occurred in the Northern District of Illinois" and, in its answer, the defendant "denie[d] that venue [wa]s proper in this District." Answer, ISA Chicago Wholesale, Inc. v. Swisher Int'l, Inc., No. 08 C 3461 (N.D. Ill. Mar. 25, 2009), ECF No. 34 ¶ 3. Four months later, the defendant moved to dismiss based on improper venue. Although the plaintiff protested that this venue objection was too late, the court found that the defendant had preserved its objection "simply by denying the complaint's factual allegations concerning venue." ISA, 2009 WL 971432, at *2. The court also noted that the defendant "did not undertake any action in this court that would have led [the plaintiff] to believe that it consented to venue residing here." Id. at *3.

Payton's amended complaint asserts that Voiceshot is a Delaware limited liability company that is "involved in the transmission of wireless spam in Illinois, including Chicago." (Am. Compl. ¶ 5.) In the answer, Voiceshot admits it is a Delaware limited liability company but denies the remainder of the allegations in that paragraph. (Ans. ¶ 5.) Payton's amended complaint also asserts that venue in this district is proper because Voiceshot and Kale "transact business in this district and are deemed to reside here." (Am. Compl. ¶ 7.) Voiceshot's answer "admits that it is a Web-based telecommunications service" and that its services are available to internet users, including those in Illinois, but it "denies the remainder of the allegations contained in [this paragraph] as the term transact business' is not defined with sufficient specificity to allow Defendant to respond." (Ans. ¶ 7.) While this answer does not specifically object to jurisdiction, Voiceshot objected to all facts that would give rise to the court's personal jurisdiction over it. Moreover, by moving to dismiss for lack of personal jurisdiction just 17 days after answering the complaint, Voiceshot did not "creat[e] the impression that [it] had abandoned" its jurisdictional defense and intended to proceed on the merits. Rice v. Nova Biomedical Corp., 38 F.3d 909, 914 (7th Cir. 1994). Thus, Voiceshot did not waive its ability to assert this defense.[3]

II. Personal Jurisdiction

Rule 12(b)(2) permits dismissal of a claim based on lack of personal jurisdiction over the defendant. See Fed.R.Civ.P. 12(b)(2). The party asserting personal jurisdiction bears the burden of proof. See Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). When the court rules on the motion without a hearing, the plaintiff need only establish a "prima facie case of personal jurisdiction." Id. (quoting Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)). The court will "read the complaint liberally, in its entirety, and with every inference drawn in favor" of the plaintiff. Cent. States, Se. & Sw. Areas Pension Fund v. Phencorp Reins. Co., 440 F.3d 870, 878 (7th Cir. 2006) (quoting Textor v. Bd. of Regents of N. Ill. Univ., 711 F.2d 1387, 1393 (7th Cir. 1993)).

In analyzing personal jurisdiction in the context of the TCPA, courts look to whether jurisdiction is proper under the Illinois long-arm statute. See, e.g., Paldo Sign & Display Co. v. United Vending & Mktg., Inc., No. 13 C 1896, 2014 WL 960847, at *2 (N.D. Ill. Mar. 11, 2014); see also Fed.R.Civ.P. 4(k)(1)(A). Illinois allows for personal jurisdiction to the extent authorized by the Fourteenth Amendment's due process clause, which merges the federal constitutional and state statutory inquiries. See N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491-92 (7th Cir. 2014); Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010); see also 735 Ill. Comp. Stat. 5/2-209(c). Under the Illinois long-arm statute, personal jurisdiction may be general or specific. uBid, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425 (7th Cir. 2010). Payton's response brief does not argue for general ...


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