By: Derek Hawkins//February 13, 2018//
7th Circuit Court of Appeals
Case Name: Ariel Investments, LLC v. Ariel Capital Advisors LLC
Case No.: 17-1516; 17-2645
Officials: FLAUM, EASTERBROOK, and BARRETT, Circuit Judges.
Focus: Jurisdiction – Trademark Infringement
Ariel Investments and Ariel Capital Advisors both manage money for affluent clients. Ariel Investments has been using its name since 1983 and Ariel Capital only since 2014. After a bench trial in this suit under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), the district court found that Ariel Capital is infringing Ariel Investments’ trademarks and ordered it to stop. 238 F. Supp. 3d 1009 (N.D. Ill. 2017).
Ariel Capital does not dispute any of the district judge’s findings of fact or conclusions of law. Instead it denies the court’s power to adjudicate the controversy. Ariel Investments, based in Illinois, does business nationwide and elected to file suit at home. Ariel Capital, based in Florida, would like to have a national presence but so far does not. It does not have a client in Illinois, does not have any property or staff in Illinois, does not advertise in Illinois, and never has had an employee or agent even visit Illinois—until it had to defend this suit.
Ariel Investments tells us that a defendant should be subject to personal jurisdiction in any state at which it “aimed its actions.” That contention is incompatible with Walden; it is exactly what the court of appeals in Walden had held, and not a single Justice accepted the position. More: even by Ariel Investments’ standard, Ariel Capital would prevail. The trial showed that Ariel Capital did not “aim at” either Illinois or Ariel Investments but rather ignored both. The founder of Ariel Capital testified, without contradiction, that he named the firm to honor his daughter, Ariel Marie Bray, rather than to injure Ariel Investments. State and federal laws often require entrepreneurs to consider the effects of their choices on third parties, but when they violate such requirements by closing their eyes to the effects of their decisions, they do not “aim at” any particular person or state.
We end with a few words about Ariel Investments’ contention that Calder v. Jones, 465 U.S. 783 (1984), supports personal jurisdiction in Illinois. An actress living in California sued a reporter and editor for defamation appearing in an article written and edited in Florida and published in a weekly newspaper based in Florida. Calder held that the actress could sue in California—though not just because that’s where she suffered injury. The newspaper’s California circulation was 600,000, and the reporter gathered information by phone calls to California. The story concerned events in California. As Walden observed, because publication to third parties is an element of libel, the defendants’ tort occurred in California. 134 S. Ct. at 1124. The defendants in Calder thus had the sort of state-specific connection with California that Ariel Capital lacks with Illinois. If trademark infringement happened, that wrong occurred in Florida, or perhaps some other state where people who wanted to do business with Ariel Investments ended up dealing with Ariel Capital because of the similar names. That state cannot be Illinois, where Ariel Capital lacks clients.
Reversed and Remanded