Mold-A-Rama Inc. v. Collector-Concierge-International

451 F.Supp.3d 881

MOLD-A-RAMA INC., Plaintiff,

v.COLLECTOR-CONCIERGE-INTERNATIONAL, Defendant.

No. 18-cv-08261

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

Signed March 31, 2020

Nicole M. Murray, Christian G. Stahl, Michael Harrington Fleck, Quarles & Brady LLP, Chicago, IL, for Plaintiff.

Dennis F. Esford, Windy City Trial Group, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Andrea R. Wood, United States District Judge Plaintiff Mold-A-Rama Inc. ("Mold-A-Rama") owns and operates about 60 MOLD-A-RAMA vending machines throughout the Midwest. MOLD-A-RAMA vending machines use technology from the 1950s and 1960s to create plastic souvenir figurines for customers who insert money into the machine.¹ Mold-A-Rama alleges that Defendant Collector-Concierge-International ("CCI") uses Mold-A-Rama's MOLD-A-RAMA trademark to offer for sale MOLD-A-RAMA vending machines that have been materially altered by replacing their original components with modern, non-MOLD-A-RAMA parts. Therefore, Mold-A-Rama has brought the present action under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), and Illinois state law, claiming that CCI's use of the MOLD-A-RAMA trademark in connection with the marketing, promotion, and sale of the altered vending machines violates Mold-A-Rama's trademark rights and constitutes unfair competition. (Compl., Dkt. No. 1.) CCI now moves to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. (Dkt. No. 37.) For the reasons that follow, CCI's motion is granted.

BACKGROUND

The following facts are drawn from the allegations of Mold-A-Rama's complaint and the affidavits submitted by the parties in connection with the instant motion. For purposes of the motion, any well-pleaded facts alleged in the complaint are taken as true and any factual disputes in the affidavits are resolved in Mold-A-Rama's favor as the plaintiff. Tamburo v. Dworkin , 601 F.3d 693, 700 (7th Cir. 2010).

Mold-A-Rama is an Illinois corporation with its principal place of business in Brookfield, Illinois. (Compl. ¶ 1.) The company is the biggest operator of MOLD-A-RAMA vending machines in the Midwest and owns the MOLD-A-RAMA trademark for use in connection with vending machines that create plastic figurines. (Id. ¶¶ 20, 23.) CCI is a sole proprietorship operated by Rick Sky, a Canadian citizen and resident. (Sky Aff. ¶¶ 1–3, Dkt No. 38-1.) It promotes, markets, and sells memorabilia on behalf of private collectors. (Compl. ¶ 31.) Among the collectibles offered for sale by CCI are vending machines bearing the MOLD-A-RAMA mark. (Id. ¶ 32.) CCI sells those machines on behalf of Bruce Weiner.² (Id. ¶ 31.) Unlike authentic MOLD-A-RAMA vending machines, however, Weiner's machines contain new, modernized parts in place of the original components. (Id. ¶ 30.) As a result, Mold-A-Rama claims that Weiner's machines cannot be considered MOLD-A-RAMA vending machines. (Id. )

To promote and sell Weiner's machines, CCI commissioned the production of a video called "The Story of the Mold A Rama Machine—Special Chicagoland Edition!" ("Video"). (Id. ¶ 38.) The Video is publicly available on the internet.³ (Id. ) Both Sky and Weiner appear in the video to promote Weiner's machines. (Id. ¶ 41.) Also appearing in the Video is Mike Hasanov, an Illinois resident and owner of the Illinois corporation Vintage Coin-Op Restorations. (Id. ¶¶ 36– 37, 41.) The Video gives phone numbers for both Sky and Hasanov for those who wish "to contact Collector-Concierge-International, for any collector's services [sic] needs including the purchase of a Mold-A-Rama." (Id. ¶ 45.)

On October 23, 2018, Hasanov uploaded pictures of Weiner's machines on the Facebook page for his Vintage Coin-Op Restorations business. (Id. ¶ 48.) The post states that the "original but fully restored" machines are for sale and invites potential customers to "Come and Visit us at the Chicagoland Coin Op Show! And see them for yourself and go home with a memory." (Id. ¶¶ 48–49.) Three of Weiner's machines were in fact displayed by CCI at the Chicagoland Coin Op Show held from November 16 through November 18, 2018 in Grayslake, Illinois. (Id. ¶¶ 50, 54.) Sky and Hasanov represented CCI at the Chicagoland Coin Op Show. (Id. ¶ 55.) The three machines displayed at the show bore the MOLD-A-RAMA trademark and were represented as part of a "Mold A Rama" Collection on a poster displayed next to the machines. (Id. ¶ 56.)

DISCUSSION

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) "tests whether a federal court has personal jurisdiction over a defendant." United Airlines, Inc. v. Zaman , 152 F. Supp. 3d 1041, 1045 (N.D. Ill. 2015). When its existence is challenged, the plaintiff bears the burden of establishing personal jurisdiction. N. Grain Mktg., LLC v. Greving , 743 F.3d 487, 491 (7th Cir. 2014). And when a court rules on a Rule 12(b)(2) motion based on the parties' submission of written materials without holding an evidentiary hearing, "the plaintiff need only make out a prima facie case of personal jurisdiction." Id. (internal quotation marks omitted). As noted above, any well-pleaded facts alleged in the complaint are taken as true and any factual disputes in the affidavits are resolved in the plaintiff's favor. Tamburo , 601 F.3d at 700. Still, where the defendant "submits affidavits or other evidence in opposition, ‘the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction.’ " ABN AMRO, Inc. v. Capital Int'l Ltd. , 595 F. Supp. 2d 805, 818 (N.D. Ill. 2008) (quoting Purdue Research Found. v. Sanofi-Synthelabo, S.A. , 338 F.3d 773, 787 (7th Cir. 2003) ). If the plaintiff fails to refute a fact contained in the defendant's affidavit, that fact is accepted as true. Id.

I. Timeliness and Waiver

As an initial matter, Mold-A-Rama contends both that CCI's Rule 12(b)(2) motion is untimely and that CCI has waived its personal-jurisdiction defense. The Court turns first to the timeliness issue.

Under Rule 12(b), every defense to a claim for relief in any pleading must be raised in the responsive pleading if one is required. And under Rule 12(a), a litigant has 21 days after service of the summons and complaint to file its answer. However, certain defenses, including lack of personal jurisdiction, may be asserted by motion, provided that such a motion is filed before the responsive pleading if a responsive pleading is allowed. Fed. R. Civ. P. 12(b). The Seventh Circuit has explained that these provisions "do not on their face impose a 21-day rule on a motion presenting a defense of personal jurisdiction." Hedeen Int'l, LLC v. Zing Toys, Inc. , 811 F.3d 904, 906 (7th Cir. 2016). Rather, "[t]hey provide that a responsive pleading such as an answer must be filed within 21 days, but the defense can be asserted either in that responsive pleading or in a motion."⁴ Id. at 905–06. Thus, although Rule 12(b) forecloses the filing of such a motion after a responsive pleading is filed, it does not impose a 21-day restriction on the motion. Id. at 906.

Here, there is no dispute that CCI filed its answer asserting the defense of lack of personal jurisdiction prior to filing the present motion to dismiss. Moreover, CCI's answer does not merely set forth a boilerplate objection to personal jurisdiction but instead pleads detailed allegations in support of its personal-jurisdiction defense. (See CCI's Answer ¶¶ A–F, Dkt. No. 28.) Mold-A-Rama does not challenge the timeliness of that answer.⁵ The timeliness issue instead revolves around the fact that CCI asserted its personal-jurisdiction defense first in the answer and then filed its motion to dismiss. Yet Rule 12(b) states that a motion asserting any of the Rule 12(b) defenses "must be made before pleading if a responsive pleading is allowed." Fed. R. Civ. P. 12(b) (emphasis added). The Rule's plain language is seemingly unequivocal that a Rule 12(b)(2) motion cannot be brought after a defendant has filed its responsive pleading. Similarly, the Seventh Circuit has observed that " Rule 12(b) provides that the motion [to dismiss for lack of personal jurisdiction] cannot occur after...a responsive pleading is filed." Hedeen , 811 F.3d at 906.⁶ At the same time, Rule 12(h)(1) is equally clear that a defendant does not waive, and therefore necessarily preserves, its personal-jurisdiction defense by either raising it in a Rule 12(b)(2) motion or including it in a timely-filed responsive pleading. Thus, under a plain reading of Rule 12, CCI properly preserved its personal-jurisdiction defense by asserting it in a timely-filed answer. The question, then, is whether a subsequently filed Rule 12(b)(2) motion is the proper mechanism for raising the defense after an answer. The case law reveals no clear-cut answer.

One way of addressing the issue might be to construe a Rule 12(b)(2) motion filed after a responsive pleading asserting a personal-jurisdiction defense as a motion for summary judgment. However, some courts have held that "summary judgment is an inappropriate vehicle for raising a question concerning the court's personal jurisdiction." E.g. , Li Gear, Inc. v. Kerr Mach. Co. , No. 16 C 4657, 2017 WL 432931, at *2 (N.D. Ill. Feb. 1, 2017) (internal quotation marks omitted). That is because "a court that lacks personal or subject-matter jurisdiction does not have power to enter any kind of judgment—summary or otherwise." Id. (internal quotation marks omitted). Moreover, if the Court were to construe a personal-jurisdiction motion as one for summary judgment, then the defendant would have to meet Federal Rule of Civil Procedure 56's no-genuine-dispute-of-material-fact standard, whereas the Court may resolve conflicts in written submissions when evaluating personal jurisdiction under Rule 12(b)(2). See Forrest Fin. Corp. v. Chopra Int'l, Inc. , No. 97 C 5957, 1998 WL 703852, at *3–4 (N.D. Ill. Sept. 24, 1998).

A better route might be to treat CCI's Rule...