United States District Court, N.D. Illinois, Eastern Division
OPINION AND ORDER
L. ELLIS United States District Judge.
Defendants used its work to construct a tradeshow exhibit,
Plaintiff MG Design Associates, Corp. (“MG”)
brings suit against Defendants CoStar Realty Information,
Inc. (“CoStar”), Apartments, LLC d/b/a
Apartments.com (“Apartments”), and Northwind
Enterprises, Inc. d/b/a Atlantic Exhibits
(“Atlantic”), alleging copyright infringement in
violation of the Copyright Act of 1976 (the “Copyright
Act”), 17 U.S.C. § 101 et seq.,
fraudulent misrepresentation, breach of contract, and
tortious interference with both contract and prospective
economic advantage. Defendants move to dismiss MG's
claims for lack of personal jurisdiction and for failure to
state a claim. The Court finds that Defendants possess
sufficient contacts with Illinois to authorize personal
jurisdiction, but that MG fails to properly allege a
copyright claim. With the dismissal of the federal claims,
the Court declines to address MG's state law claims until
it alleges a basis for the Court's subject matter
jurisdiction. The Court therefore denies in part and grants
in part Defendants' motions [11, 23], dismissing MG's
lawsuit without prejudice.
Atlantic both design and construct trade show exhibits. In
2014, CoStar, a real estate information company acquired
Apartments, which runs the website Apartments.com. Before the
events at issue here, MG had a 15-year business relationship
with Apartments. In April 2015, Apartments' Tradeshow
Manager, Sharon Patenaude,  contacted MG to design a trade
show exhibit for an upcoming conference in Las Vegas, Nevada.
Patenaude communicated with MG's Executive Vice President
and then traveled to MG's office in Pleasant Prairie,
Wisconsin to discuss design plans. MG produced an initial set
of design renderings, proposing a layout and appearance for
an Apartments-branded exhibit. After receiving feedback, MG
submitted a second set of design renderings (the
“Renderings”) and waited for a response. But two
days later, MG learned that it would not handle any future
work for CoStar and Apartments and that it would not
construct an exhibit for the Las Vegas conference. MG sent an
invoice for the Renderings to CoStar, and CoStar paid MG $16,
500 for the work. MG would have charged significantly more,
approximately $340, 000, had it also constructed an exhibit
based on the Renderings.
CoStar paid the invoice for the Renderings, CoStar hired
Atlantic to construct an exhibit at the Las Vegas conference
(the “Las Vegas Exhibit”), using the Renderings
“as the basis” for the construction. Doc. 1
¶ 46. Atlantic then advertised on its website that it
designed the Las Vegas Exhibit. The Renderings bore a legend
on each page stating “[a]ll designs and ideas . . . are
the creative property of [MG], ” the paid invoice
stated that the Renderings “remain the property of
[MG], ” and both the invoice and the Renderings stated
that the Renderings “may not be reproduced in any
manner without the express approval of [MG].” Doc. 1
¶¶ 38, 45; Doc. 1-2. MG never received a request
from anyone to use the Renderings or to construct exhibits
based on the Renderings. MG has not performed any work for
CoStar or Apartments following this dispute.
an Illinois corporation with its principal place of business
in Pleasant Prairie, Wisconsin. Doc. 1 ¶ 10. CoStar is a
Delaware corporation with its corporate headquarters in
Washington, D.C. Doc. 1 ¶ 11; Doc. 12-1 (Campbell
Declaration) ¶ 2. CoStar has an office in Chicago,
Illinois and is registered to do business in Illinois. Doc. 1
¶ 11. Apartments is a Delaware limited liability
company, and CoStar is Apartments' sole member. Doc. 12-1
¶¶ 3-4. Although MG alleges that Apartments'
primary office is in Chicago, Doc. 1 ¶ 12,
Apartments' corporate executives, including its Chief
Executive Officer, Executive Vice President of Operations,
Executive Vice President of Accounting and Finance, and
General Counsel and Secretary have “directed,
controlled, and coordinated its business from Washington,
D.C, ” Doc. 12-1 ¶ 7. Apartments' only other
corporate officer, its President, resided in Illinois until
January 2016. Doc. 12-1 ¶ 9. Between April 2014 and the
summer of 2015, Apartments maintained its departments for
product design and development, multi-family field sales,
finance, and customer service in Chicago. Id. ¶
11. Apartments then moved the “majority of [its]
departments, ” including its finance, marketing, and
customer service departments, to Atlanta, Georgia between the
summer of 2015 and January 2016. Id. ¶ 12. It
is unclear whether any departments remain in Chicago. See
Id. Atlantic is a Virginia corporation with its
principal place of business in Chantilly, Virginia, Doc. 24-1
(Beach Declaration) ¶ 2, and competes with MG in their
design field and for clients, id. ¶ 9.
motion to dismiss under Rule 12(b)(2) challenges whether the
Court has jurisdiction over a party. The party asserting
jurisdiction has the burden of proof. See
Tamburo v. Dworkin, 601 F.3d 693, 701 (7th Cir.
2010). The Court may consider affidavits and other competent
evidence submitted by the parties. Purdue Research Found.
v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003). If the Court rules on the motion without a hearing,
the plaintiff need only establish a prima facie case
of personal jurisdiction. GCIU-Emp'r Ret. Fund v.
Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). 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 Reinsurance 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)).
“[O]nce the defendant has submitted affidavits or other
evidence in opposition to the exercise of jurisdiction,
” however, “the plaintiff must go beyond the
pleadings and submit affirmative evidence supporting the
exercise of jurisdiction.” Purdue, 338 F.3d at
783. Any dispute concerning relevant facts is resolved in the
plaintiff's favor. Id. at 782-83.
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167
L.Ed.2d 929 (2007). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556
U.S. at 678.
Apartments, and Atlantic each argue that the Court does not
have personal jurisdiction over them. Because Defendants
raise a jurisdictional issue with respect to MG's claims,
the Court addresses it first. Bunker Ramo Corp. v. United
Bus. Forms, Inc., 713 F.2d 1272, 1279 (7th Cir. 1983).
MG brings claims under the Copyright Act and state law. The
Copyright Act does not authorize nationwide service of
process, and so the Court may exercise jurisdiction over
Defendants only if authorized both by the United States
Constitution and Illinois law. Monster Energy Co. v.
Wensheng, 136 F.Supp.3d 897, 902 (N.D. Ill. 2015);
see also United Airlines, Inc. v. Zaman, 152
F.Supp.3d 1041, 1046-47 (N.D. Ill. 2015) (“When subject
matter jurisdiction rests on a federal question . . . 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
“permits its courts to exercise personal jurisdiction
on any basis permitted by the constitutions of both Illinois
and the United States.” be2 LLC v. Ivanov, 642
F.3d 555, 558 (7th Cir. 2011); 735 Ill. Comp. Stat. 5/2-209.
To the extent the federal constitutional and Illinois
statutory inquiries diverge, “the Illinois
constitutional standard is likely more restrictive than its
federal counterpart, ” but both essentially focus on
whether exercising jurisdiction over a defendant is fair and
reasonable and thus a single inquiry suffices. KM Enters,
Inc. v. Global Traffic Techs., Inc., 725 F.3d 718, 732
(7th Cir. 2013); C.H. Johnson Consulting, Inc. v.
Roosevelt Rds. Naval Station Lands & Facilities
Redevelopment Auth., No. 1:12-cv-08759, 2013 WL 5926062,
at *2 (N.D. Ill. Nov. 5, 2013). The Court, therefore, asks
one constitutional question: do Defendants have
“certain minimum contacts with [Illinois] such that the
maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice[?]'”
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316,
66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Millikin v.
Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278
(1940)). Minimum contacts exist where “the
defendant's conduct and connection with the forum State
are such that he should reasonably anticipate being haled
into court there.” World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d
jurisdiction comes in two forms: general and specific.
uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425
(7th Cir. 2010). General jurisdiction arises when the
defendant has “continuous and systematic”
contacts with the forum state. Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct.
1868, 80 L.Ed.2d 404 (1984). A defendant is subject to
general jurisdiction only where its contacts with the forum
state are so substantial that it can be considered
“constructively present” or “at home”
in the state. Goodyear Dunlop Tires Ops., S.A. v.
Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d
796 (2011); Purdue, 338 F.3d at 787; see also
Tamburo, 601 F.3d at 701 (“The threshold for
general jurisdiction is high; the contacts must be
sufficiently extensive and pervasive to approximate physical
presence.”). Alternatively, the Court has specific
jurisdiction “when the defendant purposefully directs
its activities at the forum state and the alleged injury
arises out of those activities.” Mobile
Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of
Houston Metroplex, P.A., 623 F.3d 440, 444 (7th Cir.
2010). “The inquiry whether a forum State may assert
specific jurisdiction over a nonresident defendant focuses on
the relationship among the defendant, the forum, and the
litigation” and “the defendant's suit-related
conduct must create a substantial connection with the forum
state.” Walden v. Fiore, ___ U.S. ___, 134
S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014). MG elects to
demonstrate that the Court has specific jurisdiction over
(1) the defendant must have purposefully availed himself of
the privilege of conducting business in the forum state or
purposefully directed his activities at the state, (2) the
alleged injury must have arisen from the defendant's
forum-related activities, and (3) the exercise of
jurisdiction must comport with traditional notions of fair
play and substantial justice.
Felland, 682 F.3d at 674 (citations omitted).
“Whether a defendant has purposefully directed
activities at a forum ‘depends in large part on the
type of claim at issue'” and “whether the
conduct underlying the claims was purposely directed at the
forum state.” Monster Energy Co., 136
F.Supp.3d at 903 (quoting Felland, 682 F.3d at 674).
There is no “‘pendent' or
‘supplemental' theory of specific personal
jurisdiction, ” and “personal jurisdiction over
the defendant must be established as to each claim
asserted.” In re Testosterone ReplacementTherapy Prod. Liab. Litig. Coordinated Pretrial
Proceedings, 164 F.Supp.3d 1040, 1048-49 (N.D. Ill.
2016) (rejecting plaintiffs' attempts to establish
personal jurisdiction over defendants by invoking
similarities between defendants' conduct against other
plaintiffs that established specific jurisdiction and
defendants' conduct against other plaintiffs that was
related to conduct that created personal jurisdiction);