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United Airlines, Inc. v. Zaman

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

April 30, 2015

United Airlines, Inc., Plaintiff,
v.
Aktarer Zaman, individually and d/b/a Skiplagged.com, Defendant

          For United Airlines, Inc., a Delaware corporation, Plaintiff: Frank T. Blechschmidt, Matthew J Caccamo, John Sheldon Letchinger, Baker & Hostetler LLP, Chicago, IL.

         For Aktarer Zaman, individually, doing business as skipplagged.com, Defendant: Fitzgerald Timothy Bramwell, The Law Offices of Fitzgerald Bramwill, Chicago, IL; Irwin B. Schwartz, PRO HAC VICE, Bla Schwartz, Westwood, MA; Nicholas R. Cassie, PRO HAC VICE, Bla Schwartz, Pc, Westwood, MA.

         MEMORANDUM OPINION AND ORDER

         John Robert Blakey, United States District Judge.

         In order to exercise personal jurisdiction over a defendant, this Court must determine whether the defendant has a " substantial connection" with Illinois, that is, whether the defendant's contacts connect him to Illinois in a " meaningful way." See Walden v. Fiore, __ U.S. __, 134 S.Ct. 1115, 1121, 1125, 188 L.Ed.2d 12 (2014). Based on controlling case law, such contacts must satisfy at least three requirements: (1) the contacts are created by the defendant himself; (2) the contacts are targeted at the forum state (as opposed to merely persons who reside there); and (3) the contacts bear on the substantive legal dispute. In this case, the record only shows a limited course of dealing between the parties and the Defendant's Illinois contacts were with a third-party. Such contacts, even where relevant, are not meaningful enough to warrant exercising personal jurisdiction over the Defendant.

         As explained below, this a trademark infringement action brought by Plaintiff United Airlines against Defendant Aktarer Zaman, who operates the website Skiplagged.com. Skiplagged.com aggregates flight information from airlines and booking websites, and links to those websites so that users can purchase tickets. Unlike other booking websites, Skiplagged.com also enables consumers to engage in a practice known as " hidden city" ticketing. That is where a passenger purchases a ticket on a flight where their destination is a layover stop. Rather than buying a direct ticket from Chicago to Denver, for example, it may be cheaper to buy a ticket from Chicago to San Jose with a layover in Denver and then skip the second leg of the flight (from Denver to San Jose). Based on Defendant's operation of Skiplagged.com, Plaintiff brings three claims: (1) violation of the Lanham Act; (2) tortious interference with contract; and (3) misappropriation.

         Defendant, a New York resident, has moved to dismiss [24] for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).

         This Court grants the motion.

         I. Legal Standard

         A motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) tests whether a federal court has personal jurisdiction over a defendant. When deciding a Rule 12(b)(2) motion without an evidentiary hearing, as here, Plaintiff must make a prima facie case of personal jurisdiction. uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 423-24 (7th Cir. 2010); GCIU-Employer Retirement Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009).

         Plaintiff bears the burden of establishing that personal jurisdiction exists. Advanced Tactical Ordnance Systems, LLC v. Real Action Paintball, Inc., 751 F.3d 796, 799 (7th Cir. 2014); uBID, 623 F.3d at 423-24; Goldfarb, 565 F.3d at 1023. To determine whether Plaintiff has met its burden, this Court may consider affidavits from both parties. Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). When Defendant challenges by declaration a fact alleged in the Complaint, Plaintiff has an obligation to go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction. Purdue Research Foundation v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir. 2003). Courts must also resolve all factual disputes in Plaintiff's favor. Northern Grain Marketing, LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014); Goldfarb, 565 F.3d at 1020 n.1. Unrefuted facts in Defendant's affidavits, however, will be taken as true. Goldfarb, 565 F.3d at 1020 n.1. While in this context affidavits trump the pleadings, in the end, all facts disputed in the affidavits will be resolved in Plaintiff's favor. Purdue Research Foundation, 338 F.3d at 782.

         II. Facts [1]

         Defendant, a New York resident, is the founder and CEO of Skiplagged.com. Complaint ¶ 11; Zaman Affidavit ¶ 2. Skiplagged.com aggregates flight information from airlines and booking websites, such as United.com and Orbitz.com, and links to those websites so that users can purchase tickets. Complaint ¶ ¶ 3, 30, 33, 39, 45. The website, in particular, enables consumers to engage in " hidden city" ticketing, Complaint ¶ ¶ 3, 30, which is where a passenger purchases a ticket on a flight where their destination is a layover stop, Complaint ¶ ¶ 3-4; Zaman Affidavit ¶ 3.

         The relevant background began December 29, 2013, when Defendant entered into an Affiliate Agreement with Orbitz, LLC (a former co-plaintiff in this action). Complaint ¶ ¶ 6, 15, 22. Defendant, among other things, agreed not to link to Orbitz.com for illegitimate reservations and bookings or to disguise the origin of information transmitted through Orbitz.com. Complaint ¶ 23. Under the " Miscellaneous" provision of the Affiliate Agreement, Defendant consented to jurisdiction of the state and federal courts located in Cook County, Illinois for " any dispute involving this Agreement." Complaint ¶ 15; Affiliate Agreement, attached as Exhibit A to Complaint. In the same provision, Defendant also agreed that the Affiliate Agreement would be governed by Illinois law. Complaint ¶ 15. The Agreement was terminated on September 3, 2014. Complaint ¶ 22.

         In August 2014, Plaintiff, a Delaware corporation with its principal place of business in Illinois, learned that Defendant had been promoting hidden city ticketing since at least early 2014. Complaint ¶ ¶ 3-6, 8, 30, 39; Radcliffe Declaration ¶ 1. Plaintiff also learned that Skiplagged.com redirected consumers to United.com to make hidden city and other bookings on United flights. Radcliffe Declaration ¶ 30. Plaintiff later discovered that Defendant also redirected consumers to other booking websites in the same way. Complaint ¶ ¶ 30, 39.

         On September 5, 2014, Plaintiff, through its Managing Counsel, Mike Henning, sent a cease and desist letter to Defendant. Complaint ¶ 53. Mr. Henning demanded that Defendant refrain from offering hidden city ticketing of United flights because it was prohibited by Section 6(J) of Plaintiff's Contract of Carriage with its customers. Complaint ¶ 53; Radcliffe Declaration ¶ 4. The cover email to the letter and the subsequent email chain, but not the letter itself, is part of the record. See generally Email Chain [34-2]. Mr. Henning's email signature block identifies his office address as Houston, Texas. Email Chain [34-2] at 6.

         The same day, Defendant responded to Mr. Henning, outlining his disagreements with the letter and also proposing a partnership between the parties:

... Skiplagged has been partnering directly with airlines and has several partners already. Skiplagged is allowing airlines to make the best of the inevitable: more informed consumers. United is not yet a partner and we believe it would be wise to change that. As such, we will greatly appreciate it if you connect us with the appropriate people.

Email Chain [34-2] at 3-6; see also Complaint ¶ ¶ 48, 54.

         Three days later, on September 8, Mr. Henning left Defendant a voicemail to discuss the cease and desist letter; and, in an email, asked Defendant to return his call. Email Chain [34-2] at 3. The call took place on September 9 among Mr. Henning, Defendant and Tye Radcliffe, Plaintiff's Illinois-based Director of Marketing Distribution Strategy. Complaint ¶ 55; Radcliffe Declaration ¶ 4. It appears from the email correspondence that Mr. Henning initiated the call. Email Chain [34-2] at 2. The record does not show why Mr. Radcliffe participated in the call. During the call, Defendant, without being prompted by Mr. Henning or Mr. Radcliffe, proposed that Plaintiff become one of its partners. Radcliffe Declaration ¶ 4. Mr. Radcliffe declined the offer. Radcliffe Declaration ¶ 4. Also during the call, Defendant agreed to remove all United references, logos and flight and fare information from Skiplagged.com. Complaint ¶ 55; Radcliffe Declaration ¶ 4.

         Defendant broke his promise. On September 13, 2014, Plaintiff discovered that Defendant was still promoting hidden city flights on United under a " censored" airline name and logo. Complaint ¶ 56; Radcliffe Declaration ¶ 5. The censored logo included an explanatory icon that read: " Sorry for the inconvenience, but United Airlines says we can't show you this information." Complaint ¶ 56.

         On September 15, 2014, Defendant again promised to remove United content from Skiplagged.com. Complaint ¶ 57; Email Chain [34-2] at 2. That promise too was broken. Defendant continued to present United flight offerings on Skiplagged.com with similar messages referring to Plaintiff. Complaint ¶ 58; Radcliffe Declaration ¶ 6. This lawsuit ensued on November 17, 2014.

         III. Analysis

         A. Personal Jurisdiction

         When subject matter jurisdiction rests on a federal question (the Lanham Act, here) and supplemental jurisdiction, and no special federal rule for personal jurisdiction applies, as here; this Court may exercise personal jurisdiction over Defendant only if it is (1) proper under the forum state's personal jurisdiction statute and (2) comports with the requirements of the Due Process Clause. Advanced Tactical, 751 F.3d at 800 (setting forth the personal jurisdiction standard for Lanham Act and state law claims); see also uBID, 623 F.3d at 425; Northern Grain, 743 F.3d at 491-92; Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010).

         The Illinois long-arm statute permits this Court to exercise personal jurisdiction " on any ... basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States." 735 ILCS 5/2-209(c); seeNorthern Grain, 743 F.3d at 491-92. Because the Seventh Circuit has found no " operative difference" between the two constitutional limits, this Court will limit its analysis to whether exercising jurisdiction over Defendant ...


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