Cityzenith Holdings, Inc. v. Liddell

CourtDistrict Court, N.D. Illinois
DecidedAugust 15, 2023
Docket1:22-cv-05101
StatusUnknown

This text of Cityzenith Holdings, Inc. v. Liddell (Cityzenith Holdings, Inc. v. Liddell) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cityzenith Holdings, Inc. v. Liddell, (N.D. Ill. 2023).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

CITYZENITH HOLDINGS, INC., and ) MICHAEL JANSEN, ) ) Plaintiffs, ) ) No. 22 C 5101 v. ) ) Judge Sara L. Ellis SHANE LIDDELL, ) ) Defendant. )

OPINION AND ORDER Plaintiffs Cityzenith Holdings, Inc. (“Cityzenith”) and Michael Jansen, Cityzenith’s CEO, filed this suit against Defendant Shane Liddell for defamation per se and false light invasion of privacy. Plaintiffs aver that Liddell undertook an “internet smear campaign designed to destroy the good names and reputations of Cityzenith and its CEO Jansen” by posting “doctored texts and messages” and “false and defamatory information” that cast doubt on Plaintiffs’ legitimacy and capabilities. Doc. 8 ¶¶ 19–21. Plaintiffs ask the Court to grant them preliminary and permanent injunctive relief preventing Liddell from further defaming them, require Liddell to remove any defamatory posts about them from the internet, and award compensatory and punitive damages as well as court costs to them. Liddell argues that the Court lacks personal jurisdiction over him and moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(2). Because the Court does not have personal jurisdiction over Liddell, the Court grants Liddell’s motion to dismiss.1

1 At the last status hearing on July 14, 2023, the Court allowed Plaintiffs’ counsel to withdraw and instructed Michael Jansen that he must have counsel appear on behalf of Cityzenith by August 1, 2023. Doc. 50. The Court further warned Jansen that if he did not have counsel appear on behalf of Cityzenith, the Court would dismiss the case because Cityzenith, being a corporation, cannot proceed pro se. As of August 15, 2023, no one has filed an appearance on behalf of Cityzenith. Thus, the Court dismisses BACKGROUND2 Cityzenith is a corporation incorporated in Delaware with its headquarters in Chicago, Illinois. Cityzenith holds itself out as a digital twin platform provider geared toward enabling zero-emissions buildings. Jansen, Cityzenith’s founder and CEO, is an Illinois citizen who

resides in Cook County, Illinois. Although Cityzenith rented and occupied physical office space in four different Chicago locations from 2014 until 2020, it stopped renting physical office space due to the COVID-19 pandemic and now lists its address as The UPS Store at 2506 Clark Street in Chicago, Illinois, where the company receives its mail. Cityzenith presents itself on social media pages and the internet as an Illinois-based company. The majority of its employees are Illinois-based, as are its service providers. Liddell, who holds dual citizenship in the United Kingdom and South Africa, works as a crowdfunding consultant. He operates a business called Smart Crowdfunding LLC, which he formed while residing in Florida on a K-3 visa as the spouse of a U.S. citizen. Smart Crowdfunding, a Florida LLC, operated out of Liddell’s Florida home and employed only

Liddell and his wife. It had a Florida phone number and a website. After Liddell returned to the U.K. on September 15, 2021, he started a new company there, although he also continues to use the Smart Crowdfunding website and Florida telephone number. Liddell represents that Smart Crowdfunding no longer has a physical presence in the U.S. And his only physical presence in Illinois involved changing planes at O’Hare on one occasion.

Cityzenith’s claims on the additional ground of failure to follow this Court’s orders. This basis for dismissal does not affect Jansen’s claims as he may proceed without counsel.

2 In addressing personal jurisdiction, the Court is not limited to the pleadings. See Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Therefore, the Court draws the facts from the amended complaint and the additional documents submitted by the parties. The Court resolves all factual conflicts and draws all reasonable inferences in Plaintiffs’ favor. Id. at 782–83. According to Plaintiffs, Jansen had never communicated with Liddell until he received an email from Smart Crowdfunding’s administrative assistant on August 24, 2022 at 8:44 a.m.,3 introducing Smart Crowdfunding and indicating the business’ “interest[ ] in offering [its] services to [Jansen’s] company.” Doc. 34 at 4. The email featured a clickable link to book a

consulting call with Smart Crowdfunding’s “lead consultant,” Liddell. Id. Liddell disputes Plaintiffs’ account, contending that Jansen has doctored the above email to make it appear that Smart Crowdfunding made the initial contact. Instead, Liddell avers that Jansen made the first contact through Smart Crowdfunding’s website, which includes a portal through which an individual can send a message to Liddell. According to Liddell, Jansen submitted a message through the portal, which generated an email to Smart Crowdfunding’s general email address at 8:42 a.m., with the comment “We are looking for partners for potential regulation D capital raise. Excessively raise more than $7 million via crowdfunding already.” Doc. 38 at 15. In response to this message, Smart Crowdfunding’s administrative assistant sent an email to Jansen at 9:44 a.m., which thanked Jansen for his “contact and interest in [Smart

Crowdfunding’s] services” and indicated that Jansen could “book a suitable time for a call with [its] lead consultant,” Liddell, by clicking on the included link. Id. at 16. Jansen represents that he never received this message. Putting aside the parties’ dispute over who made the first contact, Jansen proceeded to schedule a telephone conference with Liddell for August 26, 2022 at 9 a.m. Chicago time. Liddell agreed to call Jansen, but ultimately, they never connected. The parties did not form a business relationship and instead developed the acrimonious relationship that led to this lawsuit.

3 None of the emails the parties have included in their submissions indicate the time zone, although Liddell specifies with respect to the emails he submits that they reflect U.K. time. Presumably, Jansen’s submitted emails reflect Chicago time. While the two parties initially exchanged messages in private, on September 4, 2022, Liddell began posting “false and defamatory information about Jansen and Cityzenith” on LinkedIn and Twitter that “damag[ed] . . . Plaintiffs’ good names and reputations.” Doc. 8 ¶ 21. Virtually anyone with an internet connection can access LinkedIn and Twitter. Two Illinois-based

Cityzenith investors attest that they saw Liddell’s posts about Plaintiffs because Liddell had tagged Cityzenith in them. The posts created concerns about their investments and Cityzenith as a whole. However, both individuals maintained their significant investments in Cityzenith even after seeing the posts. LEGAL STANDARD A motion to dismiss under Rule 12(b)(2) challenges the Court’s jurisdiction over a party. Fed. R. Civ. P. 12(b)(2). When a defendant raises a Rule 12(b)(2) challenge, “the plaintiff bears the burden of demonstrating the existence of jurisdiction.” Curry v. Revolution Lab’ys, LLC, 949 F.3d 385, 392 (7th Cir. 2020) (citation omitted). If the Court rules on the Rule 12(b)(2) motion without an evidentiary hearing, the plaintiff need only establish a prima facie case of personal

jurisdiction. Id. at 392–93; N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014). In resolving a Rule 12(b)(2) motion, the Court “accept[s] as true all well-pleaded facts alleged in the complaint,” Felland v.

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Cityzenith Holdings, Inc. v. Liddell, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cityzenith-holdings-inc-v-liddell-ilnd-2023.