Flentye v. Kathrein, __ F. Supp.2d __, 2007 WL 1175576 (N.D. Ill. Apr. 18, 2007) (Filip, J.).
Judge Filip denied defendants’ motions to dismiss, except as to plaintiffs’ claim for punitive damages for intentional infliction of emotional distress, because Illinois law does not allow punitives for IIED. Plaintiffs (collectively "Flentye") promoted apartment rental services , including some properties owned by Flentye, using their family name, Flentye. Defendants competed with Flentye promoting similar apartments, some of which were owned by defendant Kathrein LLC. Flentye brought suit against defendants alleging violations of the Anti-Cybersquatting Consumer Protection Act ("ACPA"), Lanham Act unfair competition and related state law claims. Flentye alleges that defendants lost a dispute before the UDRP and were forced to return certain domain names to Flentye, including timflentye.com, flentye.com and flentyeproperties.com. Flentye alleged that defendants then registered new domain name timflentye-not.com and used it to direct traffic to defendants’ competing websites. Flentye also alleged that defendants improperly used the term "Flentye" in its meta tags (key words embedded into a site’s source code to director search engines to the site) to direct users seeking information regarding Flentye to defendants sites.
Defendants first argued that Flentye failed to plead its veil-piercing claims and that, therefore, corporate defendant Kathrein LLC should be dismissed because there were not sufficient allegations against it without a veil-piercing theory. But the Court held that notice pleading was sufficient for a veil-piercing argument and that Flentye met the notice standard. It was sufficient that Flentye pled that individual defendant Kathrein created defendant Kathrein LLC "for the sole purpose of holding title to local real estate through which [Kathrein] operates Lee Street Management" and that in the caption Kathrein LLC was identified as "d/b/a Lee Street Management." The Court noted that while these allegations might not be sufficient to prove that the veil was pierced, they were sufficient for Fed. R. Civ. P. 8(a) notice pleading. The Court also noted that a claim of corporate veil-piercing did not require Fed. R. Civ. P. 9(b) heightened pleading.
Similarly, Kathrein LLC argued that the ACPA claim should be dismissed against it because Flentye made no specific allegations regarding Kathrein LLC’s use of the domain name at issue or its intent to profit from the domain allegedly including Flentye’s mark. But the Court held that the allegations that Kathrein LLC acted as the alter ego of Kathrein and that Kathrein and Kathrein LLC registered the domain names at issue as a group were sufficient to state a claim.
Defendants argued that Flentye’s Lanham Act claim should be dismissed because of numerous "bold disclaimers" on defendants’ websites that the site was run by Kathrein. But because screen shots of the site were not included in or referenced by the complaint, the Court refused to consider them on a Rule 12(b)(6) motion to dismiss.