LuxSoma LLC v. Leg Res., Inc.

289 F. Supp. 3d 514
CourtDistrict Court, S.D. Illinois
DecidedJanuary 25, 2018
Docket15 Civ. 4838 (KPF)
StatusPublished
Cited by6 cases

This text of 289 F. Supp. 3d 514 (LuxSoma LLC v. Leg Res., Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LuxSoma LLC v. Leg Res., Inc., 289 F. Supp. 3d 514 (S.D. Ill. 2018).

Opinion

KATHERINE POLK FAILLA, District Judge:

Plaintiff LuxSoma LLC ("LuxSoma") brought this action in June 2015 alleging that Defendant ORI Industria S.p.A. ("ORI") had breached an implied contract that, in LuxSoma's estimation, granted it exclusive rights to distribute ORI merchandise in the United States. LuxSoma further alleged that this breach was induced by Defendants Leg Resource, Inc. ("Leg") and its President, Wayne Lederman ("Lederman" and, together with Leg, the "Leg Defendants"), who signed an Exclusive *517Distributorship Agreement with ORI in June 2012. LuxSoma asserted claims for breach of contract; interference with prospective economic advantage; false advertising in violation of the Lanham Act, 15 U.S.C. § 1125 ; and unfair competition. Only the Leg Defendants were served; they now move for summary judgment and, in the alternative, to preclude the testimony of LuxSoma's expert, James Dooley.

The Leg Defendants advance three principal arguments in favor of summary judgment: (i) there was no contract between ORI and LuxSoma; (ii) even if such a contract existed, the Leg Defendants lacked knowledge of it; and (iii) neither Leg nor Lederman made any actionable misstatements. The Court agrees. On this record, no reasonable juror could find that the Leg Defendants knew that LuxSoma had any business relationship with ORI, let alone an exclusive distributorship, and no reasonable juror could find that Leg or Lederman made any material misstatements in discussing Leg's business relationship with ORI.

BACKGROUND1

A. Factual Background

1. LuxSoma Solicits a Business Relationship with ORI

Violetta Lozovyy and her husband, Joseph Lozovyy, established LuxSoma in 2011 with a clear vision: to sell ORI legwear to American consumers. (Def. 56.1 ¶¶ 7, 18). In May 2011, Mrs. Lozovyy, LuxSoma's Vice President of Sales, informed ORI that she wished to sell ORI merchandise in the United States. (Id. at ¶¶ 5, 8). ORI invited her to visit the company in Italy, but warned her that "we have very strict conditions with whom we do business. If you can satisfy those conditions, we can discuss further." (Id. at ¶ 9). Additionally, ORI indicated that LuxSoma would have to purchase €20,000 of merchandise in order to "start any negotiation or conversation." (Id. at ¶ 10).

Mrs. Lozovyy visited ORI in early June 2011. (Def. 56.1 ¶ 11). She met with Leonardo Costantini, who had been hired as ORI's Export Sales Manager the prior month. (Id. at ¶¶ 22, 23). Costantini-as he *518takes pains to stress-was "not a manager" but "a simple employee." (Id. at ¶ 26). Mrs. Lozovyy and Costantini met for "three or four hours," and Giovana Mira, ORI's co-owner, briefly joined them. (Costantini Dep. 35:2-12).

The Italy trip bore fruit: On June 20, 2011, LuxSoma signed a Non-Exclusive and Temporary Trademark License Contract with ORI. (Def. 56.1 ¶ 30). The contract permitted LuxSoma "to promote and market ORI products ... in the territory of the U.S.A." (Id. at ¶ 32). It granted LuxSoma a "non-exclusive" trademark license, set to automatically expire on October 31, 2011. (Id. at ¶¶ 34, 35). This trademark license-the only written contract between ORI and LuxSoma-was never renewed. (Def. 56.1 ¶ 36).

After ORI granted LuxSoma a non-exclusive trademark license, Costantini sent LuxSoma promotional materials to help LuxSoma market ORI merchandise in the United States. One such document described LuxSoma as ORI's "exclusive distributor." It stated: "Thanks to LuxSoma, LLC, as a partner of ORI Industria S.p.A., and an exclusive distributor, ORI brand is now in the USA." (Dkt. # 101-36). That was the only document LuxSoma ever received that referred to it as ORI's exclusive distributor. (J. Lozovyy Dep. 130:4-9).

2. LuxSoma's Exchanges with ORI Regarding Exclusivity

As it happened, this reference to LuxSoma as an "exclusive distributor" appears to have been more aspirational than actual. Eventually, LuxSoma discussed with ORI the possibility of becoming its exclusive distributor in the United States. ORI responded that, to become ORI's sole distributor, LuxSoma would first have to prove itself by purchasing large quantities of merchandise. As Mrs. Lozovyy explained: "[ORI] said we don't provide anything in writing. Immediately once you establish yourself and deliver [€]500,000 ... we can re-discuss that possibility." (Def. 56.1 ¶ 11). She further stated: "[T]o have [exclusivity] set in stone in the writing for years to come, at some point they said you know, if you give me [€]500,000 ... on the table, we will consider [it]." (V. Lozovyy Dep. at 186:9-13). Mr. Lozovyy had a similar understanding: "When we asked Giovana [Mira] about the exclusive rights, we asked what would it take. She said 'Volume. Give us volume, we give you exclusive rights.' " (Def. 56.1 ¶ 15). He recalled that Mira then stated, "if you buy from us on[e] quarter of [a] million, €250,000 ... I will give you exclusive rights right now." (Def. 56.1 Reply ¶ 15).2

*519LuxSoma assumed that any exclusivity deal would be in writing. (V. Lozovyy Dep. 70:25-71:4). There was in fact no written deal. LuxSoma acknowledges that it never negotiated with ORI for exclusive rights to sell ORI merchandise (Def. 56.1 ¶ 18), nor did it have a plan to pursue any such discussions (id. at ¶ 12). ORI, for its part, never provided LuxSoma with a specific timeframe within which ORI might grant LuxSoma exclusivity. (V. Lozovyy Dep. 64:15-19).

3. LuxSoma's Efforts to Sell ORI Merchandise

In July 2011, LuxSoma made an initial purchase of €20,000 of ORI merchandise. (Pl. 56.1 ¶ 15). LuxSoma then sought to sell the merchandise. It opened kiosks in malls in Dallas, Texas. (Id. at ¶ 36). It hoped that, by selling to individual customers, it might "familiarize the public with the ... new brand." (V. Lozovyy Dep. 73:15-22). These efforts did not bear fruit: From August to November 2011, LuxSoma sold a mere 500 to 1,000 units of hosiery to individual consumers. (Def. 56.1 ¶ 43).

LuxSoma also tried to sell ORI merchandise to retail buyers. In August 2011, Mrs. Lozovyy contacted Neiman Marcus. (Def. 56.1 ¶44). She sent Neiman Marcus samples of ORI merchandise and repeatedly tried to convince Neiman Marcus to carry ORI products. (Id. at ¶ 46). However, Neiman Marcus never placed an order. (Id. at ¶ 47). Nor did Nordstrom (id. at ¶ 50), Dillard's (V. Lozovyy Dep. 114:21-23), or any other department store.

After selling just 500 to 1,000 units of hosiery at the kiosks and failing to secure any orders from department stores, LuxSoma next targeted online vendors. Over time, LuxSoma managed to sell a modest quantity of ORI merchandise online. It claims to have received purchase orders from HerRoom.com starting in late June 2012. (V. Lozovyy Dep. 121:5-20). From October 2012 until October 2015, LuxSoma sold merchandise to Zulily. (Def. 56.1 ¶ 53).

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289 F. Supp. 3d 514, Counsel Stack Legal Research, https://law.counselstack.com/opinion/luxsoma-llc-v-leg-res-inc-ilsd-2018.