United States District Court, N.D. Illinois, Eastern Division
OPINION AND ORDER
L. ELLIS United States District Judge.
MG Design Associates, Corp. (“MG”) thought that
it was going to design and build a tradeshow exhibit for
Defendants CoStar Realty Information, Inc.
(“CoStar”) and Apartments, LLC d/b/a
Apartments.com (“Apartments”) (collectively the
“CoStar Defendants”), but, after MG designed the
exhibit, the CoStar Defendants took MG's designs and
asked Defendant Northwind Enterprises, Inc. d/b/a Atlantic
Exhibits (“Atlantic”) to build the exhibit
instead. After the Court previously dismissed MG's suit
without prejudice, finding that Defendants possessed
sufficient contacts with Illinois to authorize personal
jurisdiction but also finding that MG failed to properly
allege a copyright claim and declining to review MG's
pendent state law claims , MG filed its First Amended
Complaint, alleging breaches of contract, fraudulent
misrepresentation, and tortious interference with both
contract and prospective economic advantage. Defendants now
move the Court to revisit its prior decision regarding
personal jurisdiction and to dismiss the First Amended
Complaint for failure to state a claim. The Court grants in
part and denies in part the CoStar Defendants' motion
, dismissing Count II for lack of personal jurisdiction
but denying the motion to dismiss MG's other claims
against them because MG adequately alleges a claim for breach
of contract and fraudulent misrepresentation. Because the
Court has personal jurisdiction over Atlantic and because MG
plausibly alleges that it had a contract and a business
relationship with the CoStar Defendants, about which Atlantic
knew, the Court denies Atlantic's motion . All
Defendants must answer the First Amended Complaint by August
Illinois corporation with its principal place of business in
Pleasant Prairie, Wisconsin, designs and constructs tradeshow
exhibits. From 2000 to 2014, it did this type of work for
exhibits relating to “Apartments.com, ” a real
estate website that was owned by Classified Ventures, LLC
2014, CoStar, a real estate information company, bought the
Apartments.com-related assets and liabilities from Classified
Ventures. CoStar is a Delaware corporation with its corporate
headquarters in Washington, D.C., Doc. 12-1, Ex. A ¶ 2,
operates an office in Chicago, Illinois, and is registered to
do business in Illinois.
formed Apartments to run the Apartments.com website.
Apartments is a Delaware limited liability company, and
CoStar is Apartments' sole member. Id.
¶¶ 3-4. Although MG alleges that Apartments'
primary office is in Chicago, 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, ” id. ¶ 7.
Apartments' only other corporate officer, its president,
resided in Illinois until January 2016. Id. ¶
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
(explaining that majority of departments moved, but not
stating that all departments moved).
April 2015, Sharon Patenaude, who had formerly worked for
Classified Ventures and who was now an employee of CoStar
after the Apartments.com purchase, contacted MG to design and
build an exhibit for an upcoming conference in Las Vegas,
Nevada. Between April 22 and 25, 2015, Patenaude was in San
Antonio, Texas for a work project. Doc. 35-1 ¶ 4. During
that time, Mark Klionsky, a CoStar employee in Washington,
D.C. asked Patenaude to commission an exhibit for display in
Las Vegas. Id. ¶ 5. Klionsky communicated a
design idea to Patenaude. Id.
then called MG's Pleasant Prairie, Wisconsin headquarters
to speak with Betty Kasper of MG. Patenaude wanted MG to
design an Apartments.com-branded exhibit, making it
“clear that Costar and Apartments would engage [MG] for
all phases of work.” Doc. 39 ¶ 34. MG agreed to
work on the Apartments.com exhibit at the traditional rates
and costs. The parties, however, did not document their
agreement in writing. The parties dispute from where
Patenaude's call originated: MG presents evidence from
Patenaude that she called MG “from her office in
Chicago, Illinois” on or before April 28, 2015. Doc.
31-1 ¶ 7. The CoStar Defendants also present evidence
from Patenaude that she called MG “[w]hile still in
Texas” between April 22 and 25, 2015, Doc. 35-1 ¶
7, and had reached out to MG by April 24, Doc. 35-2 ¶ 6
& Ex. 3 (noting that Patenaude had “put [MG] on
drove to MG's Pleasant Prairie office on April 27, 2015.
Doc. 35-1 ¶ 7. While in the design phase for the
exhibit, Patenaude was MG's primary contact. She worked
out of Chicago, but because Pleasant Prairie was so close
(“about one hour away”), she “preferred to
discuss [the exhibit] in person at the Pleasant Prairie
office, ” and “[t]he key discussions about the
design . . . occurred at that office.” Id.
¶ 11. In Wisconsin, Patenaude “discussed the draft
design” for about an hour. Id. ¶ 7. She
raised Klionsky's display ideas, and she also suggested
other themes and design necessities. Id. ¶ 8.
On May 4, Patenaude visited MG's Pleasant Prairie office
again, where she viewed MG's initial design renderings
and asked for changes. Id. ¶ 10; Doc. 35-2
¶¶ 7-8 & Ex. 4.
7, 2015, MG produced an initial set of design renderings for
an Apartments.com exhibit. On May 8, 2015, CoStar employees
in Washington, D.C. requested a few changes. Doc. 35-1 ¶
12. On May 11, 2015, MG revised the design with a second set
of design renderings (creating, the “Design
Renderings”). MG emailed Patenaude the final copy of
the Design Renderings on May 11.
point during the week of May 11, Klionsky called Patenaude
and told her that CoStar was not going to work with MG
anymore, that another design firm would begin work on the
Apartments.com exhibit for the Las Vegas conference, and that
Patenaude was not going to work on the Las Vegas conference
anymore either. Id. ¶ 13. On May 13, 2015,
CoStar told MG that Patenaude was out and that CoStar was
“terminating its business relationship with [MG] and
that [MG] would not be performing any work for the production
phase” for the Las Vegas exhibit. Doc. 39 ¶¶
43-44. MG then sent an invoice for the design work to
Patenaude in Chicago, which stated that no one could copy or
use the Design Renderings without MG's approval.
Id. ¶ 47; Doc. 39-2; Doc. 31-1 ¶ 11.
CoStar paid MG $16, 500 for MG's work on the Design
Renderings. Atlantic then built a physical exhibit at the Las
Vegas conference (the “Las Vegas Exhibit”), using
the Design Renderings “as the basis” for the
construction. Doc. 39 ¶ 48.
advertised on its website that it designed the Las Vegas
Exhibit. The Design Renderings, however, bore a legend on
each page stating “[a]ll designs and ideas . . . are
the creative property of [MG], ” id. ¶
40, the paid invoice stated that the Design Renderings
“remain the property of [MG], ” id.
¶ 47, and both the invoice and the Design Renderings
stated that they “may not be reproduced in any manner
without the express approval of [MG], ” id.
¶¶ 40, 47; Doc. 39-1; Doc. 39-2. MG never received
a request from anyone to use the Design Renderings or to
construct exhibits based on the Design Renderings.
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. Central 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.
9(b) requires a party alleging fraud to “state with
particularity the circumstances constituting fraud.”
Fed.R.Civ.P. 9(b). This “ordinarily requires describing
the ‘who, what, when, where, and how' of the fraud,
although the exact level of particularity that is required
will necessarily differ based on the facts of the
case.” AnchorBank, 649 F.3d at 615 (citation
omitted). Rule 9(b) applies to “all averments of fraud,
not claims of fraud.” Borsellino v. Goldman Sachs
Grp., Inc., 477 F.3d 502, 507 (7th Cir. 2007). “A
claim that ‘sounds in fraud'- in other words, one
that is premised upon a course of fraudulent conduct-can
implicate Rule 9(b)'s heightened pleading
Revisiting Personal Jurisdiction
again challenge whether the Court can exercise personal
jurisdiction. The CoStar Defendants move the Court to
reconsider its prior order finding personal jurisdiction, and
Atlantic moves to dismiss due to lack of personal
jurisdiction. MG opposes both arguments. Thus the Court must
determine whether the issue of personal jurisdiction is
reviewable and, if it is, the proper standard for the
have held that if the plaintiff amends the complaint and adds
new allegations after a previous ruling on personal
jurisdiction in the plaintiff's favor, then the court can
review the issue of personal jurisdiction again. E.g.,
Hallmark Cards, Inc. v. Monitor Clipper Partners, LLC,
757 F.Supp.2d 904, 911-12 (W.D. Mo. 2010) (addressing
personal jurisdiction arguments in motion to dismiss amended
complaint, despite previously finding personal jurisdiction
over parties based on prior complaint, because ruling on
personal jurisdiction was interlocutory in nature and by
amending the complaint and adding new allegations, the
plaintiffs had further developed facts regarding personal
jurisdiction); see also Gregory v. Preferred Fin.
Sols., No. 5:11-CV-422 MTT, 2013 WL 5725991, at *9 (M.D.
Ga. Oct. 21, 2013) (acknowledging that if the defendants
desired to again challenge personal jurisdiction following
the plaintiff's planned amended complaint, they could do
so by renewing motion to dismiss the amended complaint).
ruling declining to dismiss for lack of personal jurisdiction
is, by its nature, interlocutory in nature.”
Hallmark Cards, Inc., 757 F.Supp.2d at 911 (citing
Dakota Indus. v. Dakota Sportswear, Inc., 946 F.2d
1384, 1387 (8th Cir. 1991)); Abelesz v. OTP Bank,
692 F.3d 638, 661 (7th Cir. 2012) (noting that an order
finding personal jurisdiction over a defendant is an
interlocutory decision absent final judgment). Courts can
revisit an interlocutory decision. See Fed.R.Civ.P.
54(b); see also Hammer & Steel, Inc. v. K & S
Engineers, Inc., No. 14-CV-10001, 2017 WL 569122, at *3
(N.D. Ill. Feb. 13, 2017) (addressing request for
reconsideration raised by the plaintiff in its response to a
motion rather than in a motion for reconsideration).
Therefore, reconsideration of a ruling on personal
jurisdiction is appropriate. See Mueller ex rel. Mueller
v. Mueller, No. 02 C 488, 2002 WL 338874, at *2 (N.D.
Ill. Mar. 4, 2002) (reconsidering personal jurisdiction upon
further record after previously denying defendant's
12(b)(2) motion to dismiss).
has filed an amended complaint, which contains new claims and
new substantive allegations. An amended complaint
“completely supersedes all prior pleadings, and it is
well-settled that defendants are entitled to use the same
clean slate that plaintiffs are afforded when amendment is
permitted.” Vasich v. City of Chicago, No. 11
C 04843, 2013 WL 80372, at *10 (N.D. Ill. Jan. 7, 2013). MG
takes advantage of its clean slate, alleging new claims and
adding new factual allegations in the First Amended
Complaint. And MG provides additional argument in its
opposition to Defendants' pending motions, arguing that
the Court can exercise general jurisdiction even though MG
did not devote attention to that argument in response to
Defendants' motions to dismiss MG's original
Court finds no issue with Rule 12(g)(2), which
“requires litigants to consolidate certain dismissal
arguments in a single motion.” Ennenga v.
Starns, 677 F.3d 766, 773 (7th Cir. 2012). Under Rules
12(g) and 12(h), a party who files a Rule 12 motion may not
file another Rule 12(b)(2) motion that raises a defense or
objection that could have been raised before but was not.
Id.; see also Fed. R. Civ. P. 12(h)(1)
(explaining that motions under Rules 12(b)(2)-(5) are waived
if not filed initially with other motions required by Rule
12(g)(2)). But courts have interpreted these rules as bars to
“piecemeal litigation of defenses.” E.g.,
GlaxoSmithKline Biologicals, S.A. v. Hospira
Worldwide, Inc., No. 13-CV-04346, 2013 WL 5966918, at *2
(N.D. Ill. Nov. 7, 2013) (analyzing Ennenga). Here,
there is nothing piecemeal about the sequence of
Defendants' defenses, and it would not make sense to bar
a new 12(b)(2) motion. After the Court dismissed MG's
original complaint without prejudice (after first determining
that the Court had personal jurisdiction over Defendants
based on the dismissed claims), MG filed the First Amended
Complaint, raising new claims and pleading new facts that
will be reviewed for the first time under a personal
jurisdiction analysis. The Court sees no bar to review of
personal jurisdiction under the motion to dismiss standard.
the parties debate the proper method for addressing personal
jurisdiction as it relates to the First Amended Complaint-as
discussed, MG, CoStar, and Apartments want the Court to
review its prior order on personal jurisdiction for error
under the motion for reconsideration standard, and Atlantic
asks the Court to review personal jurisdiction under the
motion to dismiss standard. Some courts have chosen the
motion for reconsideration standard after the denial of a
Rule 12(b)(2) motion to dismiss the prior complaint, treating
the defendant's second attempt to challenge personal
jurisdiction as a motion for reconsideration because the
Federal Rules of Civil Procedure bar a successive Rule
12(b)(2) motion. See Allen ex rel. Allen v. Devine,
726 F.Supp.2d 240, 257-58 (E.D.N.Y. 2010) (finding that the
defendant's second motion to dismiss pursuant to 12(b)(2)
had to be filed as a motion for reconsideration because Rules
12(g)(2) and 12(h)(1) prohibited another Rule 12(b)(2)
motion, noting that the plaintiff did not amend claims
against the moving defendant); see also Mueller,
2002 WL 338874, at *2 (addressing the defendant's motion
to reconsider personal jurisdiction after previously denying
the defendant's motion to dismiss for lack of personal
jurisdiction). Other courts have chosen the motion to dismiss
standard, considering a defendant's second challenge to
personal jurisdiction following an amended complaint as a
Rule 12(b)(2) motion to dismiss. See, e.g.,
Hallmark Cards, Inc., 757 F.Supp.2d at 911
(acknowledging interlocutory review of prior finding of
personal jurisdiction over defendants but still treating
challenge to personal jurisdiction as a Rule 12(b)(2) motion
to dismiss rather than as a motion for reconsideration).
Court determines that personal jurisdiction should be
reviewed under the motion to dismiss standard. The Court does
not find that the Federal Rules of Civil Procedure bar a Rule
12(b)(2) motion in this situation: the First Amended
Complaint wiped clean the parties' procedural positions
and Defendants thus have an opportunity to raise new Rule
12(b)(2) arguments. The First Amended Complaint also changes
the grounds on which the Court previously ruled on personal
jurisdiction; MG adds new facts and claims to the amended
complaint, which the Court did not consider in its prior
analysis. The Court's truncated its analysis of personal
jurisdiction regarding the original complaint's state law
claims. Finally, practicality and judicial efficiency also
suggest that the Court should fully re-analyze personal
jurisdiction rather than just review its prior ruling for
error: while the CoStar Defendants ask for reconsideration,
Atlantic does not (and explicitly refused to partake in such
an analysis when suggested by MG). ...