United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
D. LEINENWEBER, JUDGE UNITED STATES DISTRICT COURT
Sam Cohen (“Cohen”), is a resident of New Jersey
and as such is a citizen of New Jersey. Defendant Amazon
Consulting Experts (“ACE”), is a New Jersey
limited liability company with offices in New Jersey and as
such is also a citizen of New Jersey. The Plaintiff,
Georgakis Consulting Inc., is an Illinois Corporation with
its principal place of business in Illinois. According to the
Complaint, Cohen and ACE are in the business of offering
consultation to clients who are desirous of selling goods on
Amazon.com (“Amazon”). The Plaintiff is
a client of ACE and engages in the sale of goods on Amazon.
The Defendants maintain a website whereby they seek clients
for their consulting business. The Defendants also offer
their clients the opportunity to purchase various types of
goods to be sold on Amazon.
to the Complaint, in 2015 the Plaintiff purchased an annual
consulting and coaching membership from ACE for $5, 000. This
membership was renewed in 2016 for an additional $5, 000.
Plaintiff claims that the purchase of such membership created
a fiduciary relationship between Plaintiff and Defendants.
Pursuant to the membership, Defendants recommended that
Plaintiff purchase various types of goods from ACE for resale
on Amazon. Most, if not all, of the goods sold by Defendants
to their customers are labeled, packaged and sent by
Defendants to Amazon distribution centers. Thus, Plaintiff
did not take delivery of or inspect the goods purchased from
Defendants. According to the Complaint, Defendants sell
identical merchandise on the internet at reduced prices, thus
undercutting Plaintiff's ability to compete. Defendant
also shipped goods that were defective, counterfeit,
non-conforming and/or unsuitable for sale on Amazon. Thus, as
a result, Plaintiff suffered damages.
on the forgoing, Plaintiff filed a three-count Complaint
against Defendants alleging: (1) violation of the Consumer
Fraud and Deceptive Practices Act (Count I); (2) breach of
Fiduciary Duty (Count II); and (3) breach of Contract (Count
III). Defendants have moved to dismiss for lack of personal
jurisdiction over both Defendants; lack of proper venue;
dismissing Cohen for failure to plead a basis for piercing
the corporate veil; failure to plead a plausible claim for
violation of fiduciary duty; and failure to plead a plausible
claim for violation of the Illinois Consumer Fraud and
Deceptive Practices Act. As an alternative, Defendants have
moved to transfer the case to the District of New Jersey for
support of the Motion to Dismiss for Lack of Personal
Jurisdiction the Defendants filed a declaration from the
Defendant Sam Cohen. According to the declaration, ACE is in
the business of providing e-commerce consulting services to
new and existing third-party sellers on the Amazon digital
marketplace. These services are limited to on-line
merchandising, bookkeeping, shipping, pricing, and
warehousing with Amazon. ACE also offers its clients purchase
opportunities from manufacturers and national retailers from
time to time. ACE does not solicit any member to make any
purchase but leaves the responsibility to make purchase
decisions and to conduct market evaluations to the client.
ACE does not provide any fiduciary services. It does not
hold, invest or manage assets on behalf of its members.
ACE's website is a uniform, nationwide site and not
expressly aimed at Illinois. The Plaintiff is an Amazon
third-party seller. In 2015, Plaintiff purchased a membership
in Ace which it renewed in 2016. All of Cohen's
interactions with Plaintiff were in his role as a corporate
officer of ACE and not as an individual. None of the
officers, directors or employees of ACE resides in Illinois.
No. corporate activities occur in Illinois. All of the goods
purchased by Plaintiff as identified in the Complaint were
shipped by ACE to an Amazon distribution center outside of
Illinois and not to Illinois. The goods were reshipped to
locations at Plaintiff's direction. Consulting services
were initiated by Plaintiff with ACE in New Jersey through
the ACE website, Facebook, or by email.
response to the jurisdiction motion, Plaintiff filed the
responses of Defendants to Plaintiff's Request to Admit,
Plaintiff's Request to Produce, and Defendants'
Answers to Plaintiff's Interrogatories on the issue of
jurisdiction. Plaintiff did not file any declarations of its
officers or employees and thus did not countermand any part
of Cohen's declaration. In these discovery responses,
Defendants admitted that ACE, and not Cohen, had consulting
contracts with 11 specific clients including Plaintiff who
were Illinois residents. Illinois residents can sign up for
membership with ACE (but not Cohen) by communicating with the
ACE website. Cohen admitted to having a brief social visit
with Plaintiff in connection with a speech Cohen made at the
“eCom” Chicago 2015 Conference which occurred
after Plaintiff had purchased its membership. Neither ACE nor
Cohen has ever shipped any goods to Illinois residents. There
were two communications between ACE and Illinois residents
via the “contact portion of the ACE website.”
position of the Defendants is that neither of them has
submitted to Illinois jurisdiction either general or
specific. There are two types of personal jurisdiction:
general (sometimes known as all-purpose jurisdiction and
specific (sometimes called case-linked) jurisdiction.
Bristol-Meyers Squibb Co. v. Superior Court of
California, 137 S.Ct. 1773 (2017). The Paradigm forum
for the exercise of general jurisdiction is an
individual's domicile and for a corporation the place
that can fairly be regarded as home, i.e., where the
corporation maintains its place of business. On the other
hand, for specific jurisdiction, the suit must arise out of
or relate to a defendant's contacts with the forum,
i.e., an activity that takes place in the forum
state and is therefore subject to state regulation.
Id. at 1779. When there is no such connection,
specific jurisdiction is lacking regardless of the extent of
the defendant's unconnected activities in the state.
Id., citing Goodyear Dunlop Tires v. Brown,
131 S.Ct. 2846 (2011). The jurisdiction requirements must be
met for each defendant over whom a state court seeks to
exercise jurisdiction. Rush v. Savchuk, 100 S.Ct.
Plaintiff here does not specifically state whether it claims
general or specific jurisdiction, the residence and domicile
of the Defendants is clearly New Jersey which would be the
only place where general jurisdiction could be exercised.
Plaintiff instead suggests that jurisdiction is proper under
the Illinois long-arm statute as it has pled causes of action
for fraud, breach of fiduciary duty, and breach of contract
in this state. However, RAR, Inc. v. Turner Diesel,
Ltd., 107 F.3d 1272 (7th Cir. 1997), shows that this is
not necessarily the case for these types of claims. The
RAR court noted that only the dealings between the
parties in regard to the disputed contract are relevant for
specific jurisdiction analysis. The specific contract in
question in RAR involved the plaintiff agreeing to
buy four diesel engines in Scotland, contracting with Turner
to locate the engines in Scotland, to dismantle and purchase
various parts from the engines, and to pack the engines for
transport to Detroit. Some of the parts were damaged during
shipment and plaintiff sued Turner in Illinois for breach of
contract due to improper packing. The Seventh Circuit held
that there was no specific jurisdiction because Turner's
prior contacts with Illinois had nothing to do with the
contract dispute in question. Turner's contractual
obligation was to obtain parts in Scotland and to ship them
to Detroit. Even though the parts would eventually end up in
Illinois was deemed to be insufficient to establish specific
the specific complaints that led to Plaintiff's suit were
shipping alleged non-conforming goods from a source outside
of Illinois to an Amazon distribution center for shipment to
Plaintiff's customers and the undercutting
Plaintiff's pricing. These specific complaints are set
forth in paragraphs 14 through 18 in the Plaintiff's
Complaint. According to Cohen's uncontradicted
Declaration, ACE made these items available for purchase by
Plaintiff to which Plaintiff availed itself. The products
were not sent to Plaintiff in Illinois or anywhere other than
to the Amazon Distribution Centers from where, presumably,
the products were then reshipped by Amazon to Plaintiff's
customers. Thus the gravamen of Plaintiff's Complaint is
not related to the client consulting agreement but instead to
the making of products available to Plaintiff for purchase
and to then be sold by Plaintiff on Amazon.
also argues that Defendants by actively soliciting clients in
Illinois (11 clients in 2015 and currently 5 clients in
Illinois) indicates that they are submitting to jurisdiction
“based on contractual relationships establishing
transaction of business in Illinois.” However this is
directly contrary to the Supreme Court's statement in
Bristol-Myers that “a defendant'
relationship with a third party, standing alone, is an
insufficient basis for jurisdiction.”
Bristol-Myers, p. 1779 citing Waldon v.
Fiore, 134 S.Ct. 1115, 1123 (2014).
Court finds therefore that this court lacks personal
jurisdiction over the Defendants, either general or specific.
The Motion to Dismiss based on Federal Rule of Civil
Procedure 12(b)(2) is granted.