United States District Court, S.D. Indiana, Evansville Division
ENTRY ON MOTION FOR LEAVE TO FILE AMENDED COMPLAINT
RICHARD L. YOUNG, Chief District Judge.
Plaintiff, Best Chairs Incorporated, moves for leave to file an Amended Complaint to add additional parties and claims for civil conspiracy and contributory infringement. For the reasons set forth below, the motion is GRANTED.
Best Chairs owns and uses a family of trademarks that incorporate the name "BEST." These include BEST CHAIRS, INC. & Design, BEST HOME FURNISHINGS, THE POWER OF BEST, AND BEST-MAX ("BEST Trademarks"). On May 7, 2014, Best Chairs filed a Verified Complaint against the Defendant, Factory Direct Wholesale, LLC, alleging claims for trademark infringement, counterfeiting, false advertising, false designation of origin, and unfair competition under federal, state, and common law. Expedited discovery targeted to Best Chair's Motion for Preliminary Injunction and Factory Direct's Motion to Dismiss for lack of personal jurisdiction is not complete; in fact, the Magistrate Judge recently granted in part and denied in part the Plaintiff's Motion to Compel. ( See Filing No. 54).
A. New Parties
The limited discovery Best Chairs has received so far reflects that Hanping Liu is the owner and Chief Executive Officer of Factory Direct and related entities, Eastern Enterprises, LLC and Pay Less Here, LLC. Each company is located at the same address and each company appears to have the same employees. According to Best Chairs, Factory Direct allows its related entities and third parties, like Rowland Direct Wholesale, to sell, promote, and advertise chairs and other furniture products using the BESTCHAIR, BEST CHAIR and BESTOFFICE name on various online retail websites, such as Amazon.com and eBay.com. ( See, e.g., Filing No. 42-7, Amazon.com screen shot of an allegedly infringing product; Filing No. 52-1, Better Business Bureau Complaint; Filing No. 52-2, Deposition of Hanping Liu ("Liu Dep.") at 28, 41, 113; Filing No. 52-10, September 29, 2014 Declaration of Hanping Liu ¶¶ 1-2, 13; Filing No. 52-7, Deposition of Martin Weaver at 27). Factory Direct then fills and ships the items to consumers. (Liu Dep. at 28, 69). Best Chairs therefore seeks to add Liu, Eastern Enterprises, Pay Less Here, and Rowland Direct to the Complaint as defendants.
Best Chairs also learned that, since the filing of the Complaint, numerous usernames and online store names have been found on Amazon.com's marketplace that use, sell, promote, and advertise chairs and other furniture products using the "BESTCHAIR" name, including "CoreStone Wholesale" and "Shopperchoice2013." Best Chairs has been unable to determine who is behind these stores' names and usernames. Consequently, Best Chairs seeks to add these entities, and to add John Doe, Jane Doe, and Unknown others, as defendants.
B. New Claims
Finally, Best Chairs alleges that the Defendants conspired to commit trademark infringement and that that the Defendants contributed to the infringement of the BEST trademarks by using, selling promoting, and/or advertising the BEST CHAIR, BEST CHAIR, and BESTOFFICE lines of office chairs and other office furniture through various online retailers. ( See Filing No. 43, Proposed Amended Complaint, Counts VI and VII).
The allegations relating to jurisdiction will be discussed infra.
Rule 15(a) of the Federal Rules of Civil Procedure provides that leave to amend a pleading "shall be freely given when justice so requires." Although leave to amend should be granted liberally, a district court may deny leave for several reasons, including undue delay, bad faith or dilatory motive, undue prejudice to the opposing party, or if the amendment would be futile. Dubicz v. Commonwealth Edison Co., 377 F.3d 787, 792 (7th Cir. 2004) (citations omitted). "An amendment is futile if it reasserts a claim previously determined, merely restates the facts from the original complaint using different language, fails to state a valid theory of liability, or could not withstand a motion to dismiss." Kasak v. Village of Bedford Park, 552 F.Supp.2d 787, 790 (N.D. Ill. 2008) (citing Bower v. Jones, 978 F.2d 1004, 1008 (7th Cir. 1992)).
Factory Direct's primary argument is that the court lacks personal jurisdiction over the Defendants. Based on that proposition, Factory Direct argues that granting Best Chair leave to file an Amended Complaint will not only be futile, but also prejudicial because, with the addition of new parties and new claims, additional jurisdictional discovery will likely be necessary, serving to prolong Factory Direct's involvement in this litigation. In support of this argument, Factory Direct cites the court to the declaration of Hanping Liu, owner and Chief Executive Officer of Factory Direct and related entities Eastern Enterprises, LLC and Pay Less Here, LLC. In his declaration dated October 5, 2014, Liu states that, ...