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Galley v. Kreutzig

United States District Court, D. Maine

May 15, 2015

JOHN GALLEY, Plaintiff,
v.
KIRK KREUTZIG, Defendant.

ORDER ON DEFENDANT'S MOTION TO DISMISS AND PLAINTIFF'S MOTION TO STRIKE

JON D. LEVY, District Judge.

This case concerns a business dispute between plaintiff John Galley, a Maine resident, and defendant Kirk Kreutzig, an Illinois resident. Galley brought suit in Maine state court for breach of contract, among other causes of action. ECF No. 1-2. Kreutzig entered a limited appearance, moving to dismiss Galley's complaint for lack of personal jurisdiction, ECF No. 4 at 2, and then removed the case to this court, ECF No. 1. After careful consideration, I conclude that the exercise of personal jurisdiction over Kreutzig is proper. I also deny Kreutzig's request for a transfer of venue, [1] and deny Galley's motion to strike portions of Kreutzig's reply brief.

I. FACTUAL AND PROCEDURAL BACKGROUND

For purposes of Kreutzig's motion to dismiss, Galley has the burden of producing prima facie evidence that demonstrates the court's personal jurisdiction over Kreutzig. Daynard v. Ness, Motley, Loadhold, Richardson & Poole, P.A., 290 F.3d 42, 50 (1st Cir. 2002). I accept Galley's properly documented evidentiary proffers as true, whether or not the evidence is disputed. Id. at 51. I also accept Kreutzig's evidence where it does not contradict Galley's. Id. Through this lens, the parties' affidavits show the following facts:

Galley and Kreutzig have been friends since meeting as teenagers in Hinsdale, Illinois, roughly 50 years ago. ECF No. 4 at 40. Kreutzig still resides in Illinois, while Galley moved to Maine around 15 years ago. Id. at 39-40. Galley is a retired attorney, while Kreutzig operates Orion4Sight, an Illinois corporation that manufactures sunglasses. Id. at 40.

In September of 2013, Kreutzig and his wife visited Galley in Maine. ECF No. 10-1 at 5. Kreutzig brought along Orion4Sight marketing materials, and the two "engaged in extensive discussions" about the business. Id. At some point, the two agreed that Galley would undertake efforts to make Orion4Sight sunglasses available for purchase on Amazon.com. Id. at 6. In the spring of 2014, the parties also agreed that Galley would launch a Kickstarter campaign for Orion4Sight sunglasses. Id. at 3. Galley claims that under this arrangement, he was to incur all of the expenses of selling sunglasses through Kickstarter, and was to receive all of the profits. Id.

Galley enrolled in several online sales and marketing classes in furtherance of the Amazon and Kickstarter projects. Id. at 5-6. Kreutzig partially reimbursed Galley for these courses by mailing checks to him in Maine. Id. Kreutzig also sent marketing materials and sunglass samples to Galley for Galley's use at a trade show in the summer of 2014. Id. In the winter of 2014, Kreutzig contacted a friend of Galley's, Linda Hanson, about product testing the sunglasses in her job as a ski instructor at Sugarloaf. Id. at 5. Kreutzig mailed Hanson several pairs of sunglasses to test. Id.

Ultimately, Galley raised more than $300, 000 dollars through Kickstarter. ECF No. 1-2 at 6. The Kickstarter campaign included sales of Orion4Sight sunglasses to forty-seven people in Maine. ECF No. 10-1 at 6-7. Kreutzig shipped these orders from Illinois in November of 2014. Id. at 6. Galley also obtained "vendor status" on Amazon, which enabled him to sell Orion4Sight sunglasses through Amazon's website. ECF No. 1-2 at 6.

The parties' relationship soured for reasons not relevant here. Galley claims that he and Kreutzig entered into a binding partnership agreement. Id. at 9. Kreutzig claims that the relationship is nothing more than a sales representation agreement with Galley working as a commissioned sales representative. ECF No. 4 at 42. Galley filed his complaint in the Knox County Superior Court in Maine on December 5, alleging breach of contract, fraud, and other counts. ECF No. 1-2 at 15. On January 16, 2015, Kreutzig filed suit against Galley in federal court in the Northern District of Illinois, alleging breach of fiduciary duty, tortious interference with contractual rights, and unjust enrichment. ECF No. 10-4 at 13-17.

II. DISCUSSION

A. Motion to Dismiss for Lack of Personal Jurisdiction

In a diversity case, the forum state's long-arm statute governs whether a district court may properly exercise jurisdiction over a nonresident defendant. See, e.g., Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). Maine's long-arm statute is coextensive with the constitutional requirement of due process. 14 M.R.S.A. ยง 704-A(1) (2014). Accordingly, the question presented is whether the exercise of personal jurisdiction over Kreutzig comports with the Due Process Clause of the United States Constitution. See Henderson v. Laser Spine Inst., 815 F.Supp.2d 353, 367 (D. Me. 2011).

The Due Process Clause permits the exercise of jurisdiction over an out-of-state defendant only if the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (quotation omitted). For the exercise of jurisdiction in a specific case[2] to meet this standard, three criteria must be present: relatedness, purposeful availment, and reasonableness. Bluetarp Fin., Inc. v. Matrix Const. Co., ...


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