Abalu v. Society of Human Resource Management

Background

Oshoke Abalu brought the case without a lawyer against the Society of Human Resource Management (SHRM) and Jennifer McCollum. Abalu alleged that McCollum persuaded her to collaborate with Linkage Inc., SHRM’s predecessor, by making promises about meaningful collaboration, compensation, marketing, and the use of Abalu’s intellectual property. Abalu alleged that Linkage and later SHRM failed to perform their contractual obligations, used her materials and methods without adequate compensation or approval, and continued using her trademark, name, image, and likeness after she terminated the agreement.

The amended complaint asserted claims for federal trademark infringement, federal unfair competition and false designation of affiliation, breach of contract against SHRM, fraudulent inducement or promissory fraud against McCollum, and violation of New York Civil Rights Law § 51 against SHRM. It also alleged that SHRM was liable as Linkage’s successor.

McCollum’s Motion to Dismiss

McCollum moved to dismiss the fraud claim under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legal claim. The court applied New York law, under which fraud generally requires a material false statement of fact, knowledge that the statement was false, an intent to cause reliance, reasonable reliance, and resulting damages. Fraud allegations must also be stated with particularity under Rule 9(b), meaning the complaint must identify the allegedly false statements, who made them, when and where they were made, and why they were fraudulent.

The court concluded that McCollum’s statements were not actionable misrepresentations. Statements that she loved Abalu’s ideas, was impressed by her work, hoped the collaboration would succeed, or thought the parties might combine their work and share revenue were expressions of opinion, hope, or expectation. The court also determined that the Vision Document described a future vision rather than binding promises, and that McCollum had not promised a specific amount of revenue or a specific ownership structure.

The court further explained that allegations that SHRM failed to honor specific contractual promises about revenue and intellectual-property protections belonged in Abalu’s contract claim against SHRM. They did not establish that McCollum personally committed fraud. The court therefore granted McCollum’s motion to dismiss and dismissed the claim against her.

Venue and SHRM’s Motion

SHRM argued that venue—the federal district where the case may properly be litigated—was improper in the Southern District of New York. The court agreed. Abalu alleged that she suffered harm in New York and that SHRM conducted business, held events, and maintained members there, but the court found those allegations too general to show that a substantial part of the events giving rise to her claims occurred in the Southern District.

The court noted that Abalu resides in Brooklyn, which is in the Eastern District of New York. It also found that merely making allegedly infringing websites and videos available to people in New York did not establish venue in the Southern District. Abalu had not alleged specific sales, targeted advertising, presentations, clients, or other commercial activity involving her intellectual property in that district. References to activity in “New York” also did not clearly identify the Southern District rather than another federal district in the state.

Although SHRM asked the court to dismiss the case for improper venue, the court transferred the case to the Eastern District of New York under 28 U.S.C. § 1406(a). The court found that transfer, rather than dismissal, was in the interest of justice because there was no indication Abalu filed in bad faith, she resides in the Eastern District, and SHRM had represented that the case could be brought there.

The court denied SHRM’s motion to dismiss. Because it transferred the case, it deferred deciding SHRM’s separate argument that the amended complaint failed to state a claim, leaving that issue for the Eastern District of New York.

Disposition

Judge Liman granted McCollum’s motion to dismiss, denied SHRM’s motion to dismiss, and transferred the case to the United States District Court for the Eastern District of New York because venue was improper in the Southern District of New York. The opinion does not state that the claims against SHRM were dismissed or decide their merits.