Vortex, Inc. v. The Partnerships and Unincorporated Associations Identified on Schedule A

CourtDistrict Court, N.D. Illinois
DecidedNovember 8, 2023
Docket1:22-cv-04189
StatusUnknown

This text of Vortex, Inc. v. The Partnerships and Unincorporated Associations Identified on Schedule A (Vortex, Inc. v. The Partnerships and Unincorporated Associations Identified on Schedule A) 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
Vortex, Inc. v. The Partnerships and Unincorporated Associations Identified on Schedule A, (N.D. Ill. 2023).

Opinion

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION Vortex, Inc.,

Plaintiff,

No. 22 CV 4189 v.

Judge Lindsay C. Jenkins The Partnerships and Unincorporated Associations Identified on Schedule A,

Defendants.

MEMORANDUM OPINION AND ORDER Before the Court is Plaintiff Vortex, Inc.’s motion for writ of execution [Dkt. 52], which asks the Court to compel nonparties Alipay Merchant Services Pte Ltd. (“Alipay MS”) and Alipay US to turn over funds held in Alipay MS accounts. The first issue this motion raises is whether Vortex has made a prima facie showing that Alipay MS or Alipay US is subject to this Court’s personal jurisdiction. [See Dkt. 77, 79.] Because Vortex has not made that showing, its motion is denied. I. Background Vortex brought this suit against alleged trademark and copyright infringers; it secured a preliminary injunction freezing Defendants’ assets and later a default judgment awarding Vortex $200,000 in damages from each Defendant. [Dkt. 39, 40, 47, 51.] The Court’s Amended Judgment ordered third parties holding Defendants’ assets to turn over those funds to Vortex. [Dkt. 51 ¶ 8.] Alipay MS, a Singaporean company, refused, arguing that Vortex should collect its judgment in a proceeding in Singapore. [Dkt. 60 at 1–2.] Because Alipay MS would not voluntarily release the frozen funds to Vortex, Vortex filed a motion for writ of execution, which it served on Alipay MS and Alipay US, a Delaware corporation headquartered in California. [Dkt. 52; Dkt. 60 at 2.] The Alipay Entities1 opposed the motion on several grounds, including that the Court lacks personal jurisdiction over them. Here, the Court takes

up the issue of whether Vortex has met its initial burden of making a prima facie showing that personal jurisdiction is proper. [Dkt. 79.] See Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). II. Legal Standards A plaintiff need not “alleg[e] personal jurisdiction in the 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 Lab’ys, LLC, 949 F.3d 385, 392 (7th Cir. 2020) (quoting Purdue Rsch. Found. v. Sanofi Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003)). The Alipay Entities are not parties, but all agree that the same principles that govern Rule 12(b)(2) motions apply here, where Vortex asks the Court to enforce its order against third parties. [Dkt. 78 at 2–3, 5–7.] When evaluating a personal jurisdiction challenge, “the court must decide

whether any material facts are in dispute. If so, it must hold an evidentiary hearing to resolve them, at which point the party asserting personal jurisdiction must prove what it alleged. Until such a hearing takes place, the party asserting personal jurisdiction need only make out a prima facie case of personal jurisdiction.” Hyatt, 302 F.3d at 713 (citations omitted). Neither party requests an evidentiary hearing at

1 The Court uses the same naming conventions it did previously. [See Dkt. 77 at 1 n.3.] this stage, so Vortex need only establish a prima facie case that the Court has jurisdiction over Alipay MS and Alipay US. To determine if Vortex has met its burden, the Court takes Vortex’s allegations as true unless refuted with affirmative

evidence, such as affidavits, which Vortex must then dispute with evidence of its own. Purdue, 338 F.3d at 782–83. The Court then resolves evidentiary disputes in Vortex’s favor. Curry, 949 F.3d at 393. III. Analysis Personal jurisdiction comes in two varieties, general and specific, Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024–25 (2021), but only specific jurisdiction is at issue here. [See Dkt. 60 at 6–7 (arguing that general jurisdiction is

absent); Dkt. 71 (not disputing the point).] The Court can exercise specific jurisdiction over Alipay MS or Alipay US if: (1) [the entity] has purposefully directed [its] activities at the forum state or purposefully availed [itself] of the privilege of conducting business in the state; (2) the alleged injury arises out of or relates to [its] forum-related activities; and (3) [the] exercise of personal jurisdiction ... comport[s] with traditional notions of fair play and substantial justice. Rogers v. City of Hobart, 996 F.3d 812, 819 (7th Cir. 2020) (citation omitted).2 A. Jurisdiction over “Alipay” Vortex argues, and the Alipay Entities do not dispute, that “Alipay” consists of several affiliated companies. [Dkt. 71 at 3; see, e.g., Dkt. 71-2 at 56 (“Alipay Services are provided by Alipay Singapore E-Commerce Private Limited and its affiliates

2 The forum state’s long-arm statute must also authorize jurisdiction, but Illinois’s statute appears to extend to the constitutional limit, so the Court need only assess whether exercising personal jurisdiction comports with due process. See Rogers, 996 F.3d at 818. (collectively, ‘Alipay’) ….”).]3 Two such entities have been served with Vortex’s motion, Alipay MS and Alipay US, but Vortex largely treats “Alipay” as a collective, encompassing Alipay MS, Alipay US, and other affiliates over which Vortex has not

asked the Court to exercise personal jurisdiction. [See, e.g., Dkt. 71 at 1 & n.1.] Vortex suggests that the Court should look to “Alipay’s” aggregate contacts to determine whether personal jurisdiction is proper. [Dkt. 52-1 at 8–9; Dkt. 71 at 6–7.] But Seventh Circuit precedent is clear that the Court must normally assess distinct entities’ jurisdictional contacts independently, even if those entities are affiliates. Cent. States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d

934, 944 (7th Cir. 2000) (“[W]here corporate formalities are substantially observed and the parent does not dominate the subsidiary, a parent and a subsidiary are two separate entities and the acts of one cannot be attributed to the other.”); accord Purdue, 338 F.3d at 784, 788 n.17. A subsidiary’s contacts are not imputed to the parent unless the parent exercises so much control over the subsidiary that the subsidiary is, in effect, an alter ego of the parent. Cent. States, 230 F.3d at 943–45.4 Vortex fails to establish that the Court should depart from the ordinary rule

here. It argues that, “[a]t a minimum, the[ ] commonly owned and managed Alipay entities operate jointly to facilitate the transfer of funds resulting from the sales of infringing products to Illinois consumers” [Dkt. 52-1 at 10], and that “‘Alipay’ consists

3 Citations to page numbers of exhibits refer to electronic pagination. 4 The Seventh Circuit has not explicitly addressed whether non-corporate business entities’ jurisdictional contacts must be assessed separately, but the Court concludes that the same principle applies to other types of entities. See Howell v. Bumble, Inc., 2023 WL 6126492, at *14 n.10 (N.D. Ill. Sept. 19, 2023) (analyzing this issue). of commonly-owned and managed entities that jointly operate to facilitate payment processing” [Dkt. 71 at 2]. “Fundamentally,” Vortex says, “Alipay may not hide behind its web of corporate entities to avoid personal jurisdiction” [Dkt. 52-1 at 12], but the

cases it relies on concern imputing to a corporation the acts of its agents, not treating affiliated companies as one for jurisdictional purposes [see Dkt. 71 at 12].

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