United States District Court, D. New Jersey
MCILWAIN, LLC, a/k/a Timothy J. McIlwain, Attorney at Law, Plaintiff,
Steve BERMAN, et al., Defendants.
B. KUGLER United States District Judge
Timothy McIlwain did not get the fees he asked for in a class
action settlement. He has now sued other class counsel-the
law firm of Hagens Berman Sobol Shapiro, LLP (“Hagens
Berman”) and several of its partners-in an effort to
pool together and then redistribute that same settlement. Now
before the Court are Hagens Berman's Motion to Set Aside
Default Judgment (mislabeled, as no judgment has been
entered) (ECF No. 21), Steve Berman's Motion to Dismiss
for Lack of Personal Jurisdiction (ECF No. 27), and Hagens
Berman's Motion to Dismiss for Lack of Personal
Jurisdiction. (ECF No. 30.)
McIlwain's claims involve actions that took place almost
entirely outside of New Jersey-indeed, thousands of miles
away in California-we find that the Court lacks personal
jurisdiction over Defendants. We also conclude that it is
appropriate to set aside the Clerk's entry of default.
Defendants' motions are therefore
the Court finds that McIlwain could have brought this case in
the Northern District of California and that it is in the
interests of justice to transfer it there pursuant to 28
U.S.C. § 1631.
attorneys' fees dispute is set forth in great detail in
an August 19, 2015 order by Judge Wilken of the Northern
District of California. See Keller v.
Nat'l Collegiate Athletic
Ass'n, 2015 WL 8916392 (N.D. Cal. Dec. 15, 2015). We
recount the facts necessary to render a judgment on whether
this Court may exercise personal jurisdiction over
Lawsuits Filed Against Electronic Arts
The Keller Litigation
5, 2009, Samuel Michael Keller, the former starting
quarterback for the Arizona State University and University
of Nebraska football teams, filed a class action in the U.S.
District Court for the Northern District of California,
alleging that the National Collegiate Athletic Association
(“NCAA”) had violated his right to publicity by
using his likeness in videogames produced by Electronic Arts
(“EA”). See Compl., Keller v.
Electronic Arts, Inc., Civ. No. 09-1967 (ECF No. 1).
Keller's counsel in the matter was the law firm of Hagens
Berman Sobol Shapiro, LLP. Defendants Steve W. Berman, Robert
B. Carey, and Leonard W. Aragon are all members of the firm.
February 8, 2010, Judge Wilken of the Northern District of
California denied EA Sport's “Anti-SLAPP”
motion, so-named because of California's Strategic
Lawsuits Against Public Participation statute, a law designed
to mitigate the speech-chilling effects of litigation.
See Keller v. Elecs. Arts, Inc., No. C 09-1967 CW,
2010 WL 530108, at *1 (N.D. Cal. Feb. 8, 2010). In so doing,
the Keller court rejected EA's argument that its
games were transformative works protected by the First
Amendment. Id. at *9. EA filed an interlocutory
appeal of the order.
The Hart Litigation
12, 2009, two months after Keller was filed, Ryan
Hart, a former quarterback on the Rutgers University football
team, and Troy Taylor, a former professional football player,
filed a similar class action against EA, this time in the
Superior Court of New Jersey. After the complaint was amended
(and Taylor left the case), Hart's new complaint brought
claims under New Jersey common law. It was then removed to
the U.S. District Court for the District of New Jersey
pursuant to the Class Action Fairness Act, 28 U.S.C.
§§ 1332(d), 1453, and 1711-1715. See Hart v.
Electronic Arts, Inc., Civ. No. 3:09-5990. Hart's
counsel was the law firm of McKenna McIlwain, LLP, now
defunct. The firms' members were Keith A. McKenna and
Timothy J. McIlwain, the latter of whom is the Plaintiff in
this matter. At summary judgment, the Hart court
found that EA was entitled to assert a First Amendment
defense to the right to publicity claims. See Hart v.
Elec. Arts, Inc., 808 F.Supp.2d 757, 760 (D.N.J. 2011).
on July 21, 2009, another group of plaintiffs sued EA as a
putative class action, alleging a set of antitrust violations
in a suit before the Northern District of California. See
O 'Bannon v. NCAA, Civ. No. 09-3329. The O
'Bannon plaintiffs appear to have been the primary
drivers of discovery in the cases before the Northern
District of California, and for purposes of this decision it
is sufficient to note that they were to receive a significant
share of the eventual settlement.
Keller and Hart Appealed
was heard first on appeal, represented by McKenna McIlwain
and the law firm of Altshuler Berzon LLP. On January 25,
2012, Keith McKenna filed a notice of substitution of
attorney, substituting the McKenna Law Firm, LLC for McKenna
McIlwain. One day before Hart's opening brief was due,
McIlwain filed yet another notice of substitution of
attorney, substituting himself, Timothy McIlwain, for McKenna
McIlwain. The McKenna Law Firm withdrew.
21, 2013, the Third Circuit reversed the district court's
grant of summary judgment, finding that the transformative
use test used by the Keller court was the
“proper analytical framework to apply.” Hart
v. Electronic Arts, Inc. ¸717 F.3d 141, 165 (3d
Cir. 2013). Hart's briefing before the Third Circuit
explicitly relied on the disposition in Keller,
noting that he argued the “precise conclusion”
reached by that court. The Third Circuit also noted in its
opinion that “Keller is simply our own case
incarnated in California.” Id. at 163 n.28.
weeks later, on July 31, 2013, the Ninth Circuit affirmed the
Keller district court's order denying EA's
Anti-SLAPP motion. See In re: NCAA Student-Athlete Name
& Likeness Licensing Litigation, 724 F.3d 1268 (9th
Cir. 2013). The Ninth Circuit relied on the reasoning in
Hart, along with other precedent. Id. at
Negotiations and Settlement
of 2013, Mr. McIlwain, on behalf of his firm, met with Hagens
Berman at one of its offices in San Francisco, California,
where they discussed a plan for the Hart and
Keller cases, including whether to consolidate the
actions and how to divide fees between the firms. (Compl. at
4.) McIlwain has presented several emails between him and
Robert Carey, a partner of Hagens Berman, that discussed the
possibility of them cooperating and setting up a fee-sharing
arrangement for the Keller and Hart. For
example, Carey told Plaintiff via an email that Hagens Berman
would prefer for McIlwain to work with them, but “[i]f
you are simply set on having a fight to control the class, we
are comfortable intervening in your case and seeking lead
counsel appointment on your case.” (Id.) In
subsequent emails, Carey and McIlwain discussed the
possibility of working together, with Carey saying he was
“not trying to freeze you out or deny you your rightful
credit and role.” (Id.)
August 25, 2013, Hagens Berman filed a putative class action
lawsuit in the District of New Jersey that presented the same
theory of liability as the Hart case already pending
in that district. See Alston v. Electronic Arts,
Inc., Civ. No. 13-5157. Defendant Steve Berman submitted
a pro hac vice application to the New Jersey
district court, and he has previously appeared pro hac
vice in other matters in the ...