BIC Corp. v. Chi. Import, Inc.

540 F.Supp.3d 786

BIC CORPORATION and BIC USA, Inc., Plaintiffs,

v.CHICAGO IMPORT, INC., et al., Defendants

Chicago Import, Inc., Cross-Plaintiff,

v.Choice Trading International, LLC, et al., Cross-Defendants

Chicago Import, Inc., Third-Party Plaintiff,

v.CTIL, LLC, Third-Party Defendant.

18-cv-7378

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

Signed May 19, 2021

Jason Michael Kuzniar, Joseph J. Stafford, Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, Chicago, IL, Adam Bialek, Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, New York, NY, Kara Thorvaldsen, Pro Hac Vice, Wilson Elser, Boston, MA, for Plaintiffs.

Christopher William Niro, Kristina Dawn Diesner, William Luciano Niro, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, for Cross-Defendants Choice Trading LLC, Choice Trading International, LLC.

Mark Daniel Roth, Roth Fioretti LLC, Chicago, IL, for Cross-Defendant Chicago Import Inc.

Christopher William Niro, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, for Cross-Defendant Gurpreet Taneja.

Christopher William Niro, Kristina Dawn Diesner, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, for Third-Party Defendant.

Mark Daniel Roth, Roth Fioretti LLC, Christopher William Niro, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, for Defendants/Cross-Plaintiff/Third-Party Plaintiff Chicago Import Inc., Ashokkumar Punjabi.

Christopher William Niro, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, for Defendants John Doe Companies 1-10, John or Jane Does 1-10.

Christopher William Niro, Kristina Dawn Diesner, William Luciano Niro, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, for Defendants Choice Trading International, LLC, Choice Trading LLC.

Christopher William Niro, Kristina Dawn Diesner, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, for Defendant Gurpreet Taneja.

MEMORANDUM OPINION AND ORDER

John Robert Blakey, United States District Judge

In 2018, BIC Corporation and BIC USA, Inc. (hereinafter BIC) sued Chicago Import, Inc., Guru Taneja, Choice Trading International, and Choice Trading for trademark infringement. BIC alleged that the Defendants illegally imported and sold BIC-branded lighters in the United States (known as "gray market lighters"), which BIC claimed were intended solely for overseas distribution and did not contain federally mandated enhanced child-resistant technology. BIC ultimately settled with the various Defendants, and this Court entered stipulated permanent injunction orders closing out BIC's complaint. Chicago Import, however, still maintains a cross-claim against Guru, Choice Trading International, and Choice Trading, and has brought a third-party claim against another related entity, CTIL, which Chicago Import alleges is related to the cross-claim Defendants. The cross-claim and third-party complaint alleges that Chicago Import purchased the offending lighters from Guru and the companies, and seeks redress from them under various state-law theories, including indemnification from being forced to defend against BIC's complaint. The various cross-claim Defendants and third-party Defendant now move to dismiss the operative second amended cross-claim and third-party complaint. [242]; [244]; [248]; [249]; [250]. For the reasons explained below, this Court denies their motions.

I. Background

A. The Parties

Cross-Plaintiff/Third-Party Plaintiff Chicago Import is an Illinois corporation that maintains its principal place of business in Chicago, Illinois. [238] at ¶ 1.

Cross-claim Defendant Gurpreet Singh Taneja (hereinafter Guru) is a New Jersey citizen. Id. at ¶ 2. At the start of this litigation, Cross-claim Defendant Choice Trading International was a New Jersey limited liability company of which Guru was the sole member. Id. at ¶ 3. Guru voluntarily dissolved Choice Trading International during the pendency of this case. Id. Cross-claim Defendant Choice Trading is a New Jersey limited liability company with its principal place of business in Guttenberg, New Jersey. Id. at ¶ 4. Guru and his wife are Choice Trading's only members, and the couple lives in Fort Lee, New Jersey. Id.

Third-party Defendant CTIL is a New Jersey limited liability company with its principal place of business in Guttenberg, New Jersey. Id. at ¶ 5. Guru is the sole member of CTIL. Id.

B. The Underlying Complaint and Procedural History

In 2018, BIC sued Chicago Import, Guru, Choice Trading, and Choice Trading International, among others. [1]. As alleged in its fourth amended complaint, BIC manufactures disposable lighters; in the United States, they sell only non-refillable pocket lighters with enhanced child-resistant technology as required by federal law. [167] at ¶ 46. BIC owns and uses various trademarks and source-identifying product configurations to indicate the origin of its lighters. Id. at ¶ 38.

BIC alleged that in May and August 2017, and September 2018, Choice Trading and Choice Trading International (the Choice Defendants), entities directed and controlled by Guru, unlawfully sold and shipped BIC-branded lighters that were neither manufactured nor intended for distribution in the United States (gray market lighters) to Chicago Import. Id. at ¶¶ 1, 61. According to BIC, Chicago Import then sold the gray market lighters to a variety of wholesalers, distributors, and retailers in Illinois and other states. Id. at ¶ 62. These actions, BIC alleged, violated the Lanham Act and other federal laws. Id. at ¶ 75. In July and September 2020, BIC settled its claims against Guru, the Choice Defendants, and Chicago Import, and this Court subsequently dismissed Plaintiffs’ claims with prejudice upon entering stipulated permanent injunction orders. [219]; [220]; [221].

In January 2019, before BIC's complaint had settled, Chicago Import filed a cross-claim against Guru and the Choice Defendants. [35]. With leave of Court, Chicago Import amended its cross-claim in July 2019, [116], and the cross-claim Defendants moved to dismiss this amended cross-claim, [120]; [122]; [124]. Then, again with leave of Court, in December 2020, Chicago Import filed a second amended cross-claim against the cross-claim Defendants and a third-party complaint against CTIL, LLC. [238]. This Court, accordingly, denied the cross-claim Defendants’ original motions to dismiss. [237].

C. The Second Amended Cross-Claim and Third-Party Complaint

In its second amended cross-claim and third-party complaint, Chicago Import brings claims for: (1) indemnification under the Uniform Commercial Code (UCC) against the Choice Defendants (Count I); (2) breach of implied warranty under the UCC against the Choice Defendants (Count II); (3) breach of warranty of fitness for a particular purpose under the UCC against the Choice Defendants (Count III); (4) "alter ego/piercing the corporate veil" against Guru, Choice Trading, and CTIL (Count IV); (5) successor liability against CTIL (Count V); (6) unjust enrichment against the Choice Defendants and CTIL (Count VI); and (7) "Liability of Guru ..., Choice Trading ..., and CTIL for the Dissolution of Choice Trading International" (Count VII). [238].

The various cross-claim Defendants and third-party Defendant now move to dismiss the claims against them. Guru moves to dismiss the counts against him pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6). [242]; [248]. The Choice Defendants move to dismiss the counts against them under Rules 12(b)(1) and 12(b)(6). [244]; [249]. And CTIL moves to dismiss the counts against it pursuant to Rules 12(b)(2) and 12(b)(6). [250]. Chicago Import opposes each motion.

II. Legal Standards

Rule 12(b)(1) allows a defendant to raise a defense that the Court lacks subject matter jurisdiction. Bazile v. Fin. Sys. of Green Bay, Inc. , 983 F.3d 274, 279 (7th Cir. 2020). Under Rule 12(b)(1), this Court must construe Plaintiff's complaint in the light most favorable to Plaintiff, accept as true all well-pleaded facts, and draw reasonable inferences in its favor. Silha v. ACT, Inc. , 807 F.3d 169, 173 (7th Cir. 2015) ; Long v. Shorebank Dev. Corp. , 182 F.3d 548, 554 (7th Cir. 1999). Courts evaluating Rule 12(b)(1) motions may look beyond the complaint to consider whatever evidence has been submitted on the issue to determine whether subject matter jurisdiction exists. Silha , 807 F.3d at 173 (noting that a court "may look beyond the pleadings and view any evidence submitted" when reviewing a challenge that there is in fact no subject matter jurisdiction, even if the pleadings are formally sufficient).

A motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) tests whether this Court has the "power to bring a person into its adjudicative process." N. Grain Mktg., LLC v. Greving , 743 F.3d 487, 491 (7th Cir. 2014) (quotation omitted). The plaintiff need not allege facts concerning personal jurisdiction in his or her complaint, but "once the defendant moves to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating the existence of jurisdiction." Curry v. Revolution Labs., LLC , 949 F.3d 385, 392 (7th Cir. 2020) (quoting Purdue Research Found. v. Sanofi-Synthelabo, S.A. , 338 F.3d 773, 782 (7th Cir. 2003) ). When a court rules on a Rule 12(b)(2) motion based upon written submissions without holding an evidentiary hearing, the plaintiff need only establish a prima facie case of personal jurisdiction. Id. at 392–93 ; GCIU-Employer Ret. Fund v. Goldfarb Corp. , 565 F.3d 1018, 1023 (7th Cir. 2009).

Under Rule 12(b)(6), this Court must construe the complaint in the light most favorable to Plaintiff, accept as true all well-pleaded facts, and draw reasonable inferences in its favor. Taha v. Int'l Bhd. of Teamsters, Local 781 , 947 F.3d 464, 469 (7th Cir. 2020). The Court need not, however, accept as true statements of law or conclusory factual allegations. Divane v. Nw. Univ. , 953 F.3d 980, 987 (7th Cir. 2020). Rule 12(b)(6) limits this Court's consideration to...