First Circuit Vacates Dismissal of Temu Suit Against IP Lawyer

The U.S. Court of Appeals for the First Circuit on Nov. 4 vacated a federal judge’s dismissal of a lawsuit by Whaleco Inc., which does business as Temu, against intellectual-property lawyer Jeffrey Gluck and related defendants, holding that the District of Massachusetts had to resolve personal-jurisdiction challenges before ruling on the merits.

Circuit Judge O. Rogeriee Thompson wrote the published opinion in Nos. 25-1893 and 25-1894, joined by Judges Lara Montecalvo and William Aframe. The panel remanded the case to U.S. District Judge Richard G. Stearns in Boston.

What Temu alleged

Temu’s complaint alleged that Gluck and his firm induced settlements with clients Cookies SF LLC and Alec Monopoly Art LLC / Alec Monopoly, LLC by signing representations that he had no clients intending to sue Temu and no present intent to advertise for more clients, while reserving a right to represent future clients. Temu alleged that soon afterward Gluck advertised for new clients to sue the platform and threatened new litigation. The complaint asserted misrepresentation, fraud, contract and related counts seeking rescission or damages. The allegations are unproven; Gluck has denied wrongdoing in the district court filings summarized by the appeals court.

Why the panel vacated

Gluck and Cookies SF moved to dismiss for lack of personal jurisdiction as well as for failure to state a claim. Stearns dismissed the complaint under Rule 12(b)(6) and expressly declined to decide the jurisdiction motions, then awarded attorney fees to some defendants and denied Gluck’s Rule 11 sanctions bid.

The First Circuit said a federal court generally may not rule on the merits without first determining personal jurisdiction over the parties, citing Supreme Court guidance in Sinochem and related cases. The panel vacated the orders and judgment and directed the district court to rule first on the personal-jurisdiction motions. If jurisdiction exists, the judge must reassess the merits, fee awards and sanctions. If not, Gluck and Cookies SF must be dismissed without prejudice, with further steps as to Alec Monopoly.

Developing: The district court has not yet issued a new ruling on personal jurisdiction after the remand.

Sources: U.S. Court of Appeals for the First Circuit, Law360