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LDGP, LLC v. Cynosure Inc

United States District Court, N.D. Illinois

January 16, 2018

LDGP, LLC, et al., Plaintiffs,
v.
Cynosure, Inc., Defendant.

          ORDER

          FREDERICK J. KAPALA District Judge

         Defendant's partial motion to dismiss [158] is granted.

         STATEMENT

         Plaintiff, LDGP, LLC, d/b/a Hartsough Dermatology (“LDGP”), initially brought suit against defendant, Cynosure, Inc. (“Cynosure”), advancing claims having to do with the sale of tattoo removal machines by defendant to plaintiff. Numerous other plaintiffs were added in the first amended complaint. LDGP was omitted from the second amended complaint, operative here, and thus terminated from the case, while more plaintiffs were added. The operative complaint contains the following Counts: (I) Negligent Misrepresentation, (II) Fraudulent/Intentional Misrepresentation, (III) Fraud by Omission, (IV) Breach of Contract- Breach of Express Warranties Under the Uniform Commercial Code, (V) Violation of the Illinois Consumer Fraud Act, (VI) Violation of the Delaware Consumer Fraud Act, (VII) Violation of the California False Advertising Law, (VIII) Violation of the California Unfair Competition Law, (IX) Deceit under California Civil Code § 1710, (X) Deceit under Pennsylvania Unfair Trade Practices and Consumer Protection Law. Before the court is defendant's partial motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. For the following reasons, the court dismisses Count I; the claims brought exclusively by nonresident plaintiffs, comprising Counts VI, VII, VIII, IX, and X; and all remaining claims with respect to nonresident plaintiffs.

         I. BACKGROUND

         Plaintiffs purchased tattoo removal machines from defendant and subsequently alleged that defendant had made misrepresentations in advertising the machines. Plaintiffs allege that through written advertisements, flyers, brochures, product inserts, press releases, websites, and public statements, defendants attracted purchasers, including plaintiffs, all while knowing that defendant's representations were false.

         The first amended complaint identified the plaintiffs as LDGP; Ritacca Cosmetic Surgery and Med Spa, Ltd. (“Ritacca”); Black Alsatians, LLC d/b/a Pigment Demographics and Laser Removal (“PDLR”); and Burke Dermatology, P.A. (“Burke”). The second amended complaint, operative here, omitted plaintiff LDGP, who was consequently terminated from the case, but added four new plaintiffs, namely Banucci Institute, LLC (“Banucci”); Synergy Medical Specialists, P.C. (“Synergy”); Dermatology Laser Center & Medispa, LLC (“DLCM”); and The Facial Surgery Center (“FSC”). In sum, named plaintiffs currently include three who were listed in both the first amended complaint and the second amended complaint (Ritacca, PDLR, and Burke), and four who were added in the second amended complaint (Banucci, Synergy, DLCM, and FSC).[1] Plaintiffs allege that Ritacca is located and licensed in Illinois. All of the other plaintiffs, however, are alleged to be located or licensed in jurisdictions other than Illinois, and there are no allegations that any of them have any presence in or connection with Illinois of any kind. Defendant is incorporated in Delaware, maintains its principle place of business in Massachussetts, and does business in Illinois.

         II. ANALYSIS

         A. Personal Jurisdiction

         Federal courts are courts of limited jurisdiction, and only possess the power authorized by the Constitution and statute. Gunn v. Minton, 568 U.S. 251, 256 (2013). “A federal court sitting in diversity must rely on the law of personal jurisdiction that governs the courts of general jurisdiction in the state where the court is sitting.” Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002); see also Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010) (“[W]here no federal statute authorizes nationwide service of process, personal jurisdiction is governed by the law of the forum state.” (footnote omitted) (citing Fed R. Civ. P. 4(k)(1)(A))). The Illinois long-arm statute “permits its courts to exercise personal jurisdiction up to the limits of the Due Process Clause of the Fourteenth Amendment.” Kipp v. Ski Enter. Corp. of Wis., 783 F.3d 695, 697 (7th Cir. 2015); see also 735 ILCS 5/2-209(c) (“A court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States.”). “Because Illinois permits personal jurisdiction if it would be authorized by either the Illinois Constitution or the United States Constitution, the state statutory and federal constitution requirements merge.” uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425 (7th Cir. 2010).

         The Due Process Clause authorizes two forms of personal jurisdiction: general all-purpose jurisdiction, and specific or case-linked jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). “The threshold for general jurisdiction is high; the contacts must be sufficiently extensive and pervasive to approximate physical presence.” Tamburo, 601 F.3d at 701. Courts have not limited the reach of general jurisdiction to a defendant's domicile, but rather, “[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Abelesz v. OTP Bank, 692 F.3d 638, 654 (7th Cir. 2012) (emphasis omitted) (quoting Goodyear, 564 U.S. at 919). With respect to a corporation, the paradigm bases for general jurisdiction are its place of incorporation and principal place of business. See Daimler AG v. Bauman, 134 S.Ct. 746, 760 (2014). These bases allow plaintiffs at least one clear forum in which a corporate defendant may be considered subject to general personal jurisdiction. Id. Mere continuous activity in a forum state, however, is not sufficient to establish general jurisdiction. Id. at 757.

         “Specific jurisdiction is very different. In order for a state court to exercise specific jurisdiction, the suit must arise out of or relate to the defendant's contacts with the forum.” Bristol-Myers Squibb Co. v. Super. Ct. of Cal., 582 U.S., 137 S.Ct. 1773, 1780 (2017). “[T]here must be an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation.” Id. Because of this, “specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” Id. Additionally, a state may not assert specific jurisdiction over a nonresident's claim where the connection to the state is based on the defendant's conduct in relation to a resident plaintiff, and not the nonresident plaintiff. See id. at 1781 (explaining that the “mere fact that other [resident] plaintiffs” were prescribed and took defendant's drugs in the state and sustained the same injuries as nonresident plaintiffs did not provide the required “connection between the forum and the specific claims at issue” for the Court to exercise jurisdiction over the nonresidents' claims against defendant); see also McDonnell v. Nature's Way Prods., LLC, 2017 WL 4864910 at *4 (N.D. Ill. Oct. 26, 2017). [2]

         B. Nonresident Plaintiffs

         Defendant does not contest the court's jurisdiction with respect to the claims brought by plaintiff Ritacca, the only plaintiff with alleged connections to Illinois. It does, however, contest the court's jurisdiction with respect to the claims brought by the other plaintiffs, arguing that the court's power to exercise jurisdiction over claims brought by resident plaintiffs does not extend to the claims of nonresident plaintiffs. As an example, it focuses on the allegation that Banucci is licensed in Puerto Rico and the absence of allegations that the events from which Banucci's claims arose took place in, or had any connection with, Illinois, and extends this ...


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