Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Troya International, Ltd. STI v. Bird-X, Inc.

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

December 7, 2017

TROYA INTERNATIONAL, LTD. STI and HIKMET HEPBAYTAS, Plaintiffs,
v.
BIRD-X, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          Harry D. Leinenweber, United States District Court Judge

         Before the Court is Defendant's Combined Motion to Dismiss Plaintiffs' Amended Complaint under Rule 12(b)(6) and Limited Motion for Summary Judgment [ECF No. 49]. The parties briefed these Motions concurrently, and so the Court issues the following single Opinion granting in part and denying in part Defendant's Combined Motion.

         I. BACKGROUND

To see me does not necessarily mean to see my face.
To understand my thoughts is to have seen me.” Mustafa Kemal Atatürk.
At the sight of blackbirds Flying in a green light, Even the bawds of euphony Would cry out sharply.”

         Wallace Stevens, Thirteen Ways of Looking at a Blackbird, X.

         A. The Parties' Commercial Relationship

         This dispute took flight after dealings broke down between Plaintiff Troya International, Ltd. Sti. (“Troya”) - a Turkish company owned by Plaintiff Hikmet Hepbaytas (“Hikmet”) and his wife - and Defendant Bird-X, Inc. (“Bird-X”), an Illinois-based manufacturer of pest control products. As relevant, Bird-X develops and sells products designed to steer birds clear of airports, transit facilities, wind farms, power stations, and the like. Hikmet and his wife purchased Troya for the purpose of marketing and distributing Bird-X's bird control products in Turkey and Cyprus. The following factual background is drawn from the allegations in Plaintiffs' First Amended Complaint as well as the undisputed facts introduced on Bird-X's Limited Motion for Summary Judgment.

         On August 10, 2001, Hikmet and Stephen Boyle (“Boyle”), an agent in Bird-X's export department, allegedly entered into an oral agreement whereby Bird-X granted Troya the exclusive right to market, sell, and otherwise distribute its products in Turkey and Cyprus for twenty years. (See, ECF No. 40 (“FAC”) ¶¶ 18-20, 61.) The parties never reduced this agreement to writing, nor do any of their subsequent writings refer to this putative accord.

         On October 28, 2002, Hikmet expressed to Boyle an interest in Troya's testing certain Bird-X products. (ECF No. 60 at Ex. A (“Pls.' Resp. to Def.'s SOF”) ¶ 3.) After some back and forth, Boyle sent Hikmet a signed statement on December 27, 2002, on behalf of Bird-X, “authoriz[ing] Troya International Ltd. Sti. as the dealer of Bird-X, Inc. in Turkey, The Cyprus and Turki [sic] Republic, to distribute our products in these regions on a non-exclusive basis.” (FAC at Ex. A.) Boyle represented that Bird-X would “refer appropriate leads from your area” in the following manner:

When a customer from Turkey or the surrounding area contacts us, we can advise them to contact you directly. We will offer protection to you for your customers. We will not contact any of your customers directly without your consent. In order to achieve this, we will need you to provide us with a list of customers and prospects that you are working with so that we can re-direct them to you should they try to contact us directly.

(Ibid.) Plaintiffs proceeded under this business relationship with Bird-X, with Hikmet even turning over Troya's customer list - one of its “most valuable trade secrets” replete with “confidential” information that was otherwise “kept secret.” (FAC ¶ 37.) In January 2003, Troya made its first purchase from Bird-X: three units totaling $950.00 (Pls.' Resp. to Def.'s SOF ¶ 5.) Around that time, Hikmet also wrote to Bird-X indicating that Troya wanted an “exclusive distributorship.” (Id. ¶ 6.) In response, Bird-X stated that Troya's securing such rights would depend on the extent of its future sales. (Ibid.)

         In April 2003, Hikmet complained to Bird-X that another Turkish company was selling Bird-X products; about a year later, he expressed concern that Bird-X had sold products directly to other distributors in Turkey and indirectly to a Troya customer, Ataturk Airport. (Pls.' Resp. to Def.'s SOF ¶ 10.) On July 15, 2004, Hikmet again requested that Troya be recognized as Bird-X's exclusive distributor in Turkey and Cyprus. From Bird-X's response, Hikmet understood that Troya would need sales volume of $7, 000-10, 000 per month for Bird-X to consider granting exclusivity rights. (Id. ¶ 11.) When Hikmet again requested exclusivity on October 5, 2004, Boyle reiterated that Troya would need greater sales volume and also noted that Bird-X generally required exclusive distributors to stock products - something Troya did not do. (Id. ¶ 12.) On February 9, 2006, Hikmet emailed Bird-X again to express concern at Bird-X's direct sales to Aygaz, a Turkish company. (Id. ¶ 13.)

         At Hikmet's request, Boyle signed and transmitted to Troya another written statement on November 2, 2007, authorizing Troya to distribute Bird-X's “products as our representative in Turkey and Cyprus” but omitting the “on a non-exclusive basis” language. (FAC at Ex. B; Pls.' Resp. to Def.'s SOF ¶ 15.) Like the first, this signed letter promised “protection to you for your customers” and “not [to] contact any of your customers directly without your consent.” (FAC at Ex. B.) The statement concluded by expressing excitement “to have Troya International as an official Bird-X agent in Turkey.” (Ibid.) Hikmet understood this signed statement to grant exclusivity rights to Troya at long last. (Id. ¶ 27.)

         Throughout 2008, Hikmet again realized “that other entities were selling Defendant's products in Turkey and Cyprus.” (FAC ¶ 42.) In response to an inquiry from Hikmet, Bird-X personnel indicated that these other entities must have purchased the products online but reassured Hikmet that Bird-X “would continue to forward leads only to him, and would try to monitor further internet sales.” (Id. ¶ 44; see also, Id. at Ex. C.) Similarly, in September 2009, Hikmet emailed Bird-X complaining that other Turkish companies were presenting and selling Bird-X products on their websites, which “constituted a great problem for us.” (Pls.' Resp. to Def.'s SOF ¶ 17.)

         Troya placed its last order for Bird-X products in August 2010. (Pls.' Resp. to Def.'s SOF ¶ 30.) On March 2, 2011, Tammy Stone (“Stone”), Bird-X's international sales manager, informed Hikmet that Bird-X had entered into a master distributorship agreement with an Istanbul-based company, MG Gida. According to Stone, that agreement granted MG Gida the exclusive rights to provide Bird-X products to all “existing distributors, dealers, retail customers and of course end users” in the region. (FAC at Ex. D.) Although Stone informed Hikmet that Troya could purchase Bird-X products from MG Gida at prices comparable to those it had directly paid Bird-X in the past, Plaintiffs claim that MG Gida's prices were actually 60 percent higher such that Troya was unable to sell Bird-X products for a profit. (Id. ¶¶ 47-49.) According to Plaintiffs, Bird-X gave Troya's customer list to MG Gida, which cost Troya “at least one major contract.” (FAC ¶ 52.) Because they “are no longer able to benefit from the market that they created for Bird-X's products, ” Plaintiffs now only distribute local Turkish-made products. (ECF No. 63 at Ex. 2 (“Def.'s Resp. to Pls.' SAUF”) ¶ 12.)

         B. Video Demonstration

         As part of their efforts to market Bird-X products, Plaintiffs created TV and internet advertisements, including numerous videos demonstrating the efficacy of certain Bird-X products, and Hikmet traveled considerably to introduce the products to market and have them tested. Specifically, in 2006, Hikmet created a video in which he narrates and demonstrates the efficacy of the “BirdXPeller Sonic Device.” Hikmet uploaded this video to Troya's website, and Bird-X eventually uploaded the video to its own website. On September 4, 2009, Hikmet notified Bird-X via email that he and Troya “are glad that you shared our successful controlling dangerous pigeon test” and pointed Bird-X to other Troya-created content that could potentially help Bird-X market its products. (Pls.' Resp. to Def.'s SOF ¶¶ 22-24.) Plaintiffs admit that Hikmet was aware of Bird-X's use of the video on its own website in 2009. (Id. ¶ 22.) Sometime later, Bird-X uploaded the video to vimeo.com, metacafe.com, and youtube.com. (FAC ¶ 35.) Bird-X has also furnished the video to some of its other distributors for them to use in marketing Bird-X products. (Id. ¶ 34.)

         Hikmet registered the video in his name with the U.S. Copyright Office on August 6, 2015, as U.S. Copyright No. PAu 3-773-067 entitled “Bird Repellant Demonstration of Product Effectiveness.” (See, FAC ¶¶ 133-34; id. at Ex. E.) It was only upon filing this lawsuit that Hikmet requested that Bird-X remove the video from its website and otherwise cease using it in its marketing efforts. (Pls.' Resp. to Def.'s SOF ¶ 25.)

         C. The Turkish Lawsuits

         Between 2004 and 2011, Troya was named as a defendant in five separate lawsuits relating to its sale of “faulty” Bird-X products in Turkey. (Pls.' Resp. to Def.'s SOF ¶ 26.) Troya answered and sought to defend against the lawsuits, but judgments were ultimately entered against Troya in an amount exceeding $100, 000. (Id. ¶ 27; FAC ¶¶ 55-56.) At no time prior to filing the instant lawsuit did Troya notify Bird-X of the Turkish lawsuits or of any of the judgments entered against it. (Pls.' Resp. to Def.'s SOF ¶¶ 28-29.)

* * *

         Plaintiffs filed their original Complaint in this case on November 2, 2015, claiming that Bird-X fraudulently induced them to spend their own time and money to distribute and market its products throughout Turkey and Cyprus. On January 31, 2017, Plaintiffs amended to assert the following: common law fraud (Count I), breach of fiduciary duty (Count II), tortious interference with contract (Count III), contribution (Count IV), breach of contract (Count V), trade secret misappropriation (Count VI), violation of Hikmet's right of publicity (Count VII), copyright infringement (Count VIII), and two counts pled in the alternative: quantum meruit (Count IX) and unjust enrichment (Count X). After taking limited discovery on statute-of-limitations issues, Bird-X filed its Combined Motion to Dismiss and Motion for Limited Summary Judgment, arguing that certain of Plaintiffs' counts are time-barred or should be dismissed for various other pleading deficiencies.

         II. LEGAL STANDARDS

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint “must state a claim that is plausible on its face.” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2015) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering motions to dismiss under Rule 12(b)(6), a district court accepts as true all well-pleaded factual allegations and draws reasonable inferences therefrom in favor of the non-moving party. See, e.g., Jakupovic v. Curran, 850 F.3d 898, 902 (7th Cir. 2017). Documents attached to the Complaint are considered part of it. See, e.g., Moranski v. Gen. Motors Corp., 433 F.3d 537, 539 (7th Cir. 2005) (citing Fed.R.Civ.P. 10(c)).

         Rule 56 of the Federal Rules of Civil Procedure provides for the entry of summary judgment against a plaintiff who fails to make a sufficient showing of the existence of an element essential to its case and on which it will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). To obtain summary judgment on an affirmative defense, a defendant must establish the defense's essential elements. See, e.g., Wilson v. Epps, 776 F.3d 296, 299 (5th Cir. 2015). Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex, 477 U.S. at 322-23. A genuine issue of material fact exists when the evidence, viewed in the light most favorable to the non-movant, is such that a reasonable jury could return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         III. DISCUSSION

         Because the statute-of-limitations issues on which the Court granted limited discovery will dispose of claims, the Court will consider Bird-X's arguments concerning pleading inadequacies only once and after it determines that a particular claim is not time-barred.

         A. Count I: ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.