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LLC v. Larsen

United States District Court, N.D. Indiana, Fort Wayne Division

April 9, 2018

WANT2SCRAP, LLC, Plaintiff,



         This matter is before the Court on Defendants' Motion to Dismiss for Lack of Personal Jurisdiction; Alternative Motion to Transfer Pursuant to 28 U.S.C. § 1404(a) [DE 17], filed by Defendants Mabel Larsen, Creative Scrap Designs, and Mai Larsen Designs on January 2, 2018.


         On October 24, 2017, Plaintiff Want2Scrap, LLC (“Want2Scrap”) filed a Complaint in this Court against Defendants Mabel Larsen, Creative Scrap Designs, and Mai Larsen Designs, seeking a declaratory judgment of non-infringement of copyright under the Copyright Act pursuant to 28 U.S.C. §§ 2201 and 2202. Want2Scrap also asserts claims of breach of contract, copyright infringement, tortious interference with business relations, unfair competition, inducing copyright infringement, and defamation. Want2Scrap attached to the Complaint as exhibits a Copyright License Agreement, a Nondisclosure Agreement, an August 22, 2017 cease-and-desist letter from counsel for Mabel Larsen to Want2Scrap, and a September 5, 2017 response letter from counsel for Want2Scrap to counsel for Larsen. (ECF 1, Exs. A-D).

         On January 2, 2018, Defendant Mabel Larsen filed the instant Motion to Dismiss, attaching in support her own affidavit with exhibits and an affidavit of Susan Brown. (ECF 17, Exs. A, B). Larsen represents that she is a sole proprietor using the trade names Creative Scrap Designs and Mai Larsen Designs. Thus, the Court treats Larsen as the sole defendant for purposes of this motion.

         Want2Scrap filed a response to the instant Motion to Dismiss or Transfer Venue on January 16, 2018, attaching as exhibits the affidavit of Michele Parrish with exhibits and an “Affidavit of Due Diligence” by Ben Davalia, Jr. (ECF 21, Exs. A, B).

         Larsen filed a reply in support of the instant motion on January 23, 2018.

         RULE 12(B)(2) LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(2) allows a defendant to move for dismissal for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). The plaintiff bears the burden of establishing the existence of personal jurisdiction when challenged by a defendant. Jennings v. AC Hydraulic A/S, 383 F.3d 546, 548 (7th Cir. 2004). When the Court rules on a defendant's motion to dismiss based on the written materials submitted without holding an evidentiary hearing, the plaintiff “need only make out a prima facie case of personal jurisdiction.” N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014) (internal quotation marks omitted) (quoting Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (quoting Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002))). The Court may consider the affidavits of both parties. Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). And, when a defendant challenges an allegation in the complaint by affidavit, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction. Purdue Research Found., 338 F.3d at 783. All factual disputes are resolved in the plaintiff's favor. N. Grain Mktg., 743 F.3d at 491.


         The following facts are taken from the Complaint, Mabel Larsen's Affidavit, and Michele Parrish's Affidavit and are construed in accordance with the Rule 12(b)(2) standard set out above.

         Plaintiff Want2Scrap LLC, which designs, manufactures, and imports product for the craft industry, is a limited liability company with its principal place of business in Churubusco, Indiana. (ECF 1, ¶ 2); (ECF 21-1, ¶ 2). Michele Parrish, the owner of Want2Scrap LLC, resides in Churubusco, Indiana. (ECF 21-1, ¶ 2). Defendant Mabel Larsen is a resident of New Braunfels, Texas. (ECF 1, ¶ 3).

         In 2013, Larsen was contacted by Allie Gower, who identified herself as the Social Media Coordinator for Want2Scrap. (ECF 17-1, ¶ 4). Gower asked Larsen to appear as a guest designer for a promotional video. Id. Later in 2013, Larsen met Parrish at a trade show in Salt Lake City, Utah. Id. Also in 2013, Larsen was contacted by Robert Prince, who asked Larsen to be part of Want2Scrap's design team. Id. Larsen attempted to create designs for Want2Scrap but was attacked on social media by another Want2Scrap designer, which caused Larsen to cease further contact with Parrish and Want2Scrap. Id.

         In 2014, Larsen purchased chipboard album materials online from Want2Scrap at wholesale for Larsen's resale. (ECF 17-1, ¶ 5). Larsen had no further contact with Want2Scrap until November 2016, when Larsen contacted Want2Scrap to ask for the donation of a gift certificate in connection with a holiday promotion put together by Larsen and fifteen other crafters on YouTube. Id. Want2Scrap contributed a gift certificate and received promotional credit in the presentation. Id.

         In 2016, Parrish and Larsen had a few phone conversations about the possibility of Larsen promoting Want2Scrap products on various social media platforms. (ECF 21-1, ¶ 3). In November 2016, Larsen contacted Parrish via Parrish's personal Facebook account regarding the opportunity to promote Want2Scrap products. Id.; (ECF 21-2, p. 1).

         In December 2016, Parrish and Larsen entered into an oral agreement that Parrish would pay Larsen $350.00 per month for the development of a social media presence and YouTube exposure for Want2Scrap. (ECF 17-1, ¶ 9); (ECF 21-1, ¶ 6). The same month, Larsen began promoting Want2Scrap on the Want2Scrap Facebook page, the Want2Scrap Twitter account, and the Want2Scrap Create & Share group on Facebook. (ECF 21-1, ¶ 4). With Parrish's approval, Larsen created the Want2Scrap Create & Share group and a new Want2Scrap YouTube channel. Id.

         In December 2016, Larsen also began submitting her own product designs to Want2Scrap. (ECF 21-1, ¶ 5). On January 24, 2017, Robert Prince, who was identified to Larsen as an administrative assistant to Parrish, emailed two documents to Larsen-a Copyright License Agreement and a Nondisclosure Agreement. (ECF 17-1, ¶ 7); (ECF 21-1, ¶ 5; 21-2, A-4). Prince's personal mailing address was in Missouri. (ECF 17-1, ¶ 7). Prince's January 24, 2017 email was from a “” email address, and his signature block in the email included the Want2Scrap LLC business name and mailing address in Churubusco, Indiana. (ECF 21-1, ¶ 5; 21-2, A-4). Prince insisted that the signed signature pages of the two documents be “returned to Want2Scrap.” (ECF 17-1, ¶ 7). Larsen emailed the documents back to Prince on January 31, 2017. (ECF 211, ¶ 5; 21-2, A-5). Larsen also sent the signed originals by mail, although the parties do not specify the mailing address. (ECF 17-1, ¶ 7); (ECF 21-1, ¶ 5; 21-2, A-5).

         The Copyright License Agreement provides that Want2Scrap was granted an exclusive, transferable license in artwork (“Works”) submitted by Larsen in the course of Want2Scrap's business. See (ECF 1, Ex. A). The Nondisclosure Agreement governs the protection of proprietary information disclosed by either Want2Scrap or Larsen. (ECF 1, Ex. B).

         The Copyright License Agreement provides that it “shall commence as of the Effective Date” and the “Effective Date” is defined as “the first date on which it has been duly executed by all of the signatories identified below.” (ECF 1, Ex. A, ¶¶ 3, 6). The signatories on the Copyright License Agreement are preprinted as “Mai Larsen” for “Mai Larsen Designs” and “Michele Parrish” for “Want2Scrap, LLC.” (ECF 1, Ex. A, p. 4).

         Both the Copyright License Agreement and the Nondisclosure Agreement were signed by Larsen on January 30, 2017. However, neither agreement was signed by Michele Parrish or anyone else on behalf of Want2Scrap. (ECF 1, Exs. A, B).

         The Copyright License Agreement does not contain a forum selection clause. (ECF 1, Ex. A). The Nondisclosure Agreement contains the following forum selection clause:

This Agreement, including all matters of construction, validity, and performance, shall be governed by and construed and enforced in accordance with the laws of the State of Indiana without regards to its conflict of law rules. The parties here to agree that the exclusive jurisdiction and venue for any action brought between the Parties under this agreement shall be the state and federal courts sitting in Indiana, and each of the parties hereby agrees and submits itself to the exclusive jurisdiction and venue of such courts for such purpose.

(ECF 1-4, ¶ 7) (emphasis added).

         Over a six-month period from December 8, 2016, to May 21, 2017, Larsen submitted approximately 156 Works to Want2Scrap, with 49 of the Works submitted prior to January 30, 2017. Regarding compensation for the designs, Parrish told Larsen that Parrish would pay Larsen $5.00 for every kit that she sold, in addition to the $350.00 per month for the social media presence. Id. This totaled $50.00 to $100.00 more per month for kits that Larsen designed. Id. Larsen declined the extra payments, but Parrish paid the extra money to Larsen anyway. Id.

         Parrish states that Larsen submitted all, or a substantial majority, of her designs by email to Parrish, who lives in Churubusco, Indiana. (ECF 21-1, ¶ 7). Parrish explained to Larsen that all designs must initially be approved by Parrish and that Larsen was to email all designs to both Parrish and Prince so that they were both “in the loop.” (ECF 21-1, ¶ 7). Larsen's designs were often rough sketches or ideas that required significant additional design, development, and layout work by Prince following Parrish's approval. (ECF 21-1, ¶ 7). Prince worked for Want2Scrap remotely from locations such as Missouri, communicating with Parrish by email, Facebook Messenger, and telephone. (ECF 21-1, ¶ 8). Larsen followed the submission process for all, or a substantial majority, of her submitted designs. Id. Larsen also frequently submitted designs to Parrish through Facebook Messenger, which meant those designs were submitted to Parrish twice. Id. (Ex. A-10, 1-22). Larsen would email unsolicited business ideas for Want2Scrap to Parrish. (ECF 21-1, ¶ 9); (Ex. A-11).

         Larsen states that none of Larsen's designs were submitted to Want2Scrap in Indiana but rather to Prince, who had a mailing address in Missouri, and that Parrish instructed Larsen to submit designs to Prince. (ECF 17-1, ¶ 7). The emails submitted as Exhibit A-9 to Parrish's Affidavit are “from” Larsen “to” both Parrish and Prince at each of their “” email addresses. (Ex. A-9). However, within the body of the emails, the text is addressed to Robert; none of the emails specifically addresses Parrish within the text. Id. In contrast, Exhibit A-10 includes Facebook Messenger messages from Larsen to Parrish that contain designs and that indicate Larsen will forward the designs to Prince. (ECF 21-2, A-10).

         In March 2017, Larsen determined that she was not being sufficiently compensated for her incurred expenses related to the social media development and notified Parrish that she could not afford to continue with the social media development. (ECF 17-1, ¶ 9). As a result, the ...

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