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ABG Prime Group, LLC v. Innovative Salon Products

United States District Court, E.D. Michigan, Southern Division

July 2, 2018

ABG PRIME GROUP, LLC, Plaintiff,
v.
INNOVATIVE SALON PRODUCTS, d/b/a LOMA, et al., Defendants.

          R. Steven Whalen, Magistrate Judge.

          OPINION AND ORDER GRANTING FLORIDA DEFENDANTS' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION [34, 35, 39]

          LAURIE J. MICHELSON, U.S. DISTRICT JUDGE.

         ABG Prime Group sells beauty products on Amazon. This includes LOMA hair-care essentials. But ABG is not an authorized retailer of LOMA products. So once LOMA discovered its products on ABG's Amazon.com store, LOMA filed a series of complaints with Amazon. Twice the complaints led Amazon to partially or totally suspend ABG's selling privileges. In turn, ABG sued LOMA, seeking a declaratory judgment that it did not infringe LOMA's trademark rights. Soon after, LOMA counter-sued, alleging trademark infringement and false designation of origin.

         Initially, this case was entirely focused on LOMA's and ABG's trademark dispute. But after LOMA counter-sued, ABG amended its complaint to add new claims and new parties. The new parties, Demosthenes Prodromitis, All Alliance, and Total Image International, all reside in Florida (Florida Defendants). ABG says the Florida Defendants and LOMA are enmeshed in a vast, antitrust conspiracy designed to kick ABG off Amazon.

         In response, the Florida Defendants move to dismiss the amended complaint for-among other things-a lack of personal jurisdiction. As will be explained, the Court agrees.

         I.

         Gary and Adam Greenberg along with Bryan Acrich incorporated ABG Prime, a Michigan LLC, to sell products on Amazon. (PageID.148.) Amazon's platform permits third-parties-like ABG Prime -to open the digital equivalent of a brick-and-mortar shop. (PageID.149.) ABG's third-party store at Amazon.com relies on Amazon's market share and fulfilment capabilities to generate an average of $10, 000 in daily revenue. (PageID.149-150.) Among the products on its virtual shelves, ABG stocks LOMA hair-care essentials. (PageID.153.) ABG lawfully purchases LOMA shampoos, conditioners, and other hair-care products from a distributor only to turn around and resell the identical, unopened, and authentic product through its Amazon store. (Page.ID.153.)

         In March 2017, LOMA complained to Amazon about ABG's store. According to LOMA's complaint, ABG's sale of LOMA products infringed on LOMA's trademark rights. (PageID.153.) Upon receiving the complaint, Amazon temporarily shuttered ABG's store, just as LOMA intended. (PageID.153, 156.) But Amazon policy requires a complainant complete a “test buy”- a controlled purchase of the allegedly infringing product to determine its authenticity-prior to claiming trademark infringement. (PageID.154.) LOMA had not completed a test buy prior to filing its complaint, so LOMA withdrew the complaint and Amazon permitted ABG to reopen. (PageID.154.)

         Once reopened, ABG continued to sell LOMA products. And in the months after LOMA withdrew its first complaint, LOMA completed one test buy and then another. (PageID.154-155.) And after both test buys, LOMA confirmed the products' authenticity to ABG's lawyer. Id. LOMA again complained to Amazon, but this time making a more general claim that ABG was stealing LOMA's intellectual property. (PageID.155.) Again Amazon closed ABG's store, but also permanently barred ABG from selling LOMA products. Id.

         Sometime after its second suspension, ABG came to learn that All Alliance Products was the only other third-party storefront selling authentic LOMA goods on Amazon. (PageID.151.) ABG came to suspect that this competitor conspired with LOMA to stop it from selling LOMA goods. (Page.ID.151.) All Alliance is owned by a Florida LLC registered to a Florida citizen named Theo Prodromitis, the associate of yet a third Floridian, Demosthenes Prodromitis. (PageID.151- 152.) ABG found out about the Floridians after Amazon forwarded LOMA's first complaint to ABG. The complaint appeared to be written by Cimos Angelis, LOMA's lawyer. (PageID.153.) But somehow ABG discovered that Demosthenes Prodromitis actually wrote it. (PageID.153.) ABG also learned that Angelis and Prodromitis have a friendship stretching back to high school. (PageID.152.)

         Based on all of the above, ABG thinks LOMA and Demosthenes Prodromitis have conspired to expel ABG from Amazon. (PageID.152, 165.) According to ABG, LOMA gives All Alliance the exclusive right to sell LOMA products on Amazon. (PageID.152, 164.) In return, All Alliance polices the digital marketplace for unauthorized third-party retailers like ABG. (PageID.164.) All Alliance reports offenders to Angelis, and either Angelis or Prodromitis-as-Angelis complain to Amazon. (PageID.165.) Complaining to Amazon results in the third-party store temporarily losing its selling privileges. (PageID.166.) And the suspension of selling privileges eliminates competitors, specifically ABG. (PageID.165.)

         Additionally, ABG alleges LOMA's complaints were fraudulent. ABG points to the early 2017 complaint Prodromitis-as-Angelis sent to Amazon. (PageID.165.) That first complaint said ABG's sales infringed on LOMA's trademark rights. (PageID.166.) But LOMA's test buys confirmed ABG sold authentic LOMA products. (PageID.156.) So in ABG's view LOMA had no factual basis to accuse it of infringing, knew that the accusation would or could result in ABG's suspension, and yet made the accusation anyway. (PageID.156-57, 165.)

         Accordingly, ABG's amended complaint added as defendants Demosthenes Prodromitis, All Alliance, and Total Image International LLC, all Florida residents. And the complaint alleges the Florida Defendants participated in a fraud and a conspiracy to violate antitrust laws.

         In response, the Florida defendants move to dismiss the amended complaint for-among other things-want of personal ...


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