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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION BUYERS DIRECT

INC., Plaintiff, v. BIG LOTS STORES, INC., Defendant. ) ) ) ) ) ) ) ) ) )

Case No. 5:13-cv-818 Plaintiff Demands Trial by Jury

COMPLAINT Plaintiff Buyers Direct Inc. (BDI) brings this action against Big Lots Stores, Inc. (Big Lots or Defendant) for infringing BDIs design patent and misappropriating snoozies! trade dress, causing consumer confusion, and engaging in unfair competition. Because Defendant sold or offered for sale products infringing BDIs patent, copied its trade dress, confused consumers and engaged in unfair competition (and continues to do so), BDI seeks damages, an accounting, the imposition of a constructive trust upon Defendants illegal profits and injunctive relief. THE PARTIES 1. BDI is a North Carolina corporation with its principal place of business in Wilson, North Carolina. 2. Big Lots is an Ohio corporation with its principal place of business and principal office at 300 Phillipi Road, Columbus, Ohio 43228-5311, and may be served with process through its registered agent, Corporation Service Company, 327 Hillsborough St., Raleigh, NC 27603.

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JURISDICTION AND VENUE 3. This is an action for design patent infringement under 35 U.S.C. 271, trade dress infringement and unfair competition under 43(a) of the Trademark Act of 1946, as amended (the Lanham Act), and unfair competition under North Carolina statutory and common law. 4. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. 1331 and 1338, and 15 U.S.C. 1121. Because the state law claims are so related to BDIs claims under federal law that they form part of the same case or controversy and derive from a common nucleus of operational facts, this Court has supplemental jurisdiction over BDIs claims based on state law pursuant to 28 U.S.C. 1367(a). 5. This Court has personal jurisdiction over Big Lots because it (a) has sold infringing products and committed unfair competition in the state of North Carolina, within the Eastern District of North Carolina; (b) has purposefully directed its activities toward the state of North Carolina; and (c) has established systematic and continuous contacts with the state of North Carolina, including maintaining retail stores in the Eastern District of North Carolina. 6. Venue is proper in this District pursuant to 28 U.S.C. 1391 and 1400 because Big Lots has sold and offered to sell infringing products in this District, and Big Lots has a sufficient connection with the Eastern District of North Carolina to make venue proper in this District, all as alleged in this Complaint. BACKGROUND 7. BDI is a supplier of retail products, including the patented foot-covering known as snoozies! in the United States and in particular, North Carolina. BDI has achieved

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market success for snoozies! because of the distinctive and unique design of the snoozies! product. 8. Since the fall of 2008, snoozies! have been offered for sale in many retail outlets and specialty retailers throughout North Carolina and in a number of different states. 9. BDI has promoted and advertised snoozies! products in various trade publications and at trade shows that publicize and promote the sale of such retail soft goods. 10. On August 18, 2009, United States Design Patent No. D598,183 (the 183 Patent), directed to the ornamental appearance of a slipper, was duly and legally issued by the United States Patent and Trademark Office. A copy of the 183 Patent is attached as Exhibit A. 11. On December 22, 2009, Marshall P. Bank, the sole inventor of the 183 Patent, assigned all rights in the 183 Patent to BDI. Since that date, BDI has been, and still is, the owner of the 183 Patent. 12. BDI is the exclusive authorized manufacturer and distributor of products embodying the design of the 183 Patent in the retail market in the United States. BDIS CONTACT WITH BIG LOTS AND BIG LOTS INFRINGEMENT 13. In June of 2013, Big Lots contacted BDI and inquired about selling snoozies! in Big Lots stores. BDI declined to enter into any contract with Big Lots or otherwise authorize the sale of snoozies! in Big Lots stores. 14. Between June of 2013 and October of 2013, BDI did not have any additional communication with Big Lots.

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15. In October, 2013, BDI learned that Big Lots was using, selling, and offering for sale in interstate commerce a retail slipper product called Slipper Grips. Slipper Grips are slippers that infringe BDIs patent and trade dress rights. 16. At that time, BDI notified Big Lots of its infringement of the 183 Patent and BDIs trade dress. 17. Notwithstanding its knowledge of the 183 Patent and the infringement, Big Lots continues to use, sell, or offer for sale Slipper Grips, thereby intentionally infringing the 183 Patent and BDIs trade dress. 18. The purpose of this action, inter alia, is to cause Big Lots to cease and desist in offering Slipper Grips for sale and distribution and to enjoin Big Lots from continuing to offer the infringing product for sale at any Big Lots store. COUNT 1 (INFRINGEMENT OF U.S. PATENT NO. D598,183) 19. BDI repeats and reincorporates by reference the allegations set forth in paragraphs 1 through 18, inclusive. 20. Defendant is and has been infringing the 183 Patent by using, selling, and/or offering to sell a product called Slipper Grips. 21. As a direct result of Defendants infringement of the 183 Patent, BDI has suffered irreparable injury and monetary damages. If Defendants infringement is not permanently enjoined, BDI will continue to suffer irreparable injury and monetary damages. 22. Upon information and belief, Defendants infringement of the 183 Patent is intentional, willful, and wanton under 35 U.S.C. 284, and makes this an exceptional case under 35 U.S.C. 285.

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COUNT II (TRADE DRESS INFRINGMENT) 23. BDI repeats and reincorporates by reference the allegations set forth in paragraphs 1 through 22, inclusive. 24. BDIs snoozies! have a distinctive, immediately recognizable and non-functional overall look and feel that constitutes protectable trade dress that distinguishes BDIs footcoverings from those of competitors. The foot-coverings, which are presented outside of packaging, are made of a soft, malleable material on both the top and bottom portions of the foot-covering, the soft, malleable top portion is formed into a wide, rounded covering over the top of the foot that extends over the toes, and a protrusion of fleece material extends out from and floats above the foot entry of the foot-covering. An annotated image of BDIs snoozies! highlighting the above-described features is shown below.
Protrusion of fleece material extends out from and floats above the foot entry Soft, malleable material on both the top and bottom portions of the footcovering

Soft malleable top portion formed into a wide, rounded covering over the top of the foot that extends over the toes

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25. BDI invested significant time, money and effort in developing snoozies! foot-coverings, resulting in significant commercial success and public recognition of its distinctive design, appearance and trade dress. 26. As a result of BDIs advertising and promotion of snoozies! foot-coverings by itself and others, the trade and purchasing public have come to associate the distinctive trade dress of snoozies! with a single producer or source. Accordingly, the snoozies! trade dress has acquired secondary meaning in the marketplace as to the origin of the product. 27. The distinctive trade dress of snoozies! is non-functional and ornamental.

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28. Defendant has sold or offered for sale, and continues to sell or offer for sale Slipper Grips, which copy and are confusingly similar in appearance to the trade dress of snoozies!, and therefore are likely to deceive and confuse the purchasing public as to the source or origin of Slipper Grips in violation of 15 U.S.C. 1125(a). 29. Defendant has engaged in wrongful conduct with the willful purpose of misleading, deceiving or confusing customers and the public as to the origin and authority of the Slipper Grips, thereby trading on BDIs goodwill, reputation and creative designs. 30. Defendants conduct constitutes willful infringement of BDIs protectable trade dress, making this an exceptional case within the meaning of 15 U.S.C. 1117. 31. Defendants infringing activity has caused BDI irreparable injury and monetary damages. 32. If Defendants infringements are not permanently enjoined, BDI will continue to suffer irreparable injury and monetary damages. 33. BDI has no adequate remedy at law for Defendants wrongful conduct because (a) BDIs unique snoozies! design patent and trade dress have no readily determined market value; (b) Defendants sale and offers for sale of the imitation slipper design constitutes such harm that BDI cannot be made whole by any monetary award alone; and (c) Defendants wrongful conduct is continuing, notwithstanding its knowledge of the established trade dress. COUNT III UNFAIR AND DECEPTIVE TRADE PRACTICES UNDER NORTH CAROLINA LAW N.C. GEN STAT 75-1.1 34. BDI repeats and reincorporates by reference the allegations set forth in paragraphs 1 through 33, inclusive.

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35. BDI is based in North Carolina and is therefore entitled to the protections afforded under the laws of the State of North Carolina. 36. BDI invested significant money and effort in advertising and promoting snoozies! footcoverings and as a result, snoozies! are associated with BDI by the trade and purchasing public. 37. The acts and conduct of Defendant as alleged above constitute unfair methods of competition and unfair or deceptive acts or practices in or affecting North Carolina commerce, as defined by N.C. Gen. Stat. 75-1.1. 38. As a direct and proximate result of Defendants conduct, BDI has suffered and will continue to suffer substantial pecuniary damages, including but not limited to losses and damages in an amount to be determined at trial. Defendants conduct justifies an award of treble damages pursuant to N.C. Gen. Stat. 75-16. 39. Because much of the damage suffered by BDI as a result of Defendants conduct is and will be irreparable, for which BDI has no adequate remedy at law, BDI is further entitled to preliminary and permanent injunctive relief. 40. Defendant has willfully engaged in the acts and practices alleged in this Complaint. For these reasons, BDI is further entitled to recover attorneys fees from Defendant under N.C. Gen. Stat. 75-16.1(1). COUNT IV NORTH CAROLINA COMMON LAW UNFAIR COMPETITION 41. BDI realleges and incorporates by reference, each and every allegation set forth in Paragraphs 1 through 40, inclusive.

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42. The acts and conduct of Defendant set forth above constitutes unfair competition in North Carolina at common law. 43. BDI, as a result of such conduct, has suffered and will continue to suffer losses and damages in an amount to be determined at trial. 44. As much of the damage covered by Defendants conduct is and will be irreparable, for which BDI has no adequate remedy at law, BDI is further entitled to preliminary and permanent injunctive relief. COUNT V FOR IMPOSITION OF A CONSTRUCTIVE TRUST UPON THE ILLEGAL PROFITS OF DEFENDANT 45. BDI realleges, and incorporates by this reference, each and every allegation set forth in paragraphs 1 through 44, inclusive. 46. Defendants conduct constitutes deceptive and wrongful conduct in the nature of passing off the infringing materials as genuine BDI snoozies! foot-coverings. 47. By virtue of its wrongful conduct, Defendant has illegally received money and profits that rightfully belong to BDI. 48. Upon information and belief, Defendant holds the illegally received money and profits in the form of bank accounts, real property, or personal property that can be located and traced. 49. Defendant holds the money and profits it has illegally received as constructive trustee for the benefit of BDI. COUNT VI ACCOUNTING AGAINST DEFENDANT 50. BDI realleges, and incorporates by this reference, each and every allegation set forth in paragraphs 1 through 49, inclusive. 9

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51. BDI is entitled, pursuant to 35 U.S.C. 284, to recover any and all profits of Defendant that are attributable to its acts of infringement. 52. BDI is entitled, pursuant to 35 U.S.C. 284, to actual damages sustained by virtue of Defendants acts of infringement. 53. The specific amount of money due from Defendant to BDI is unknown to BDI and cannot be ascertained without a detailed accounting by Defendant of the precise number of units of infringing material offered for distribution and distributed by Defendant. PRAYER FOR RELIEF WHEREFORE, BDI prays that this Court enter a judgment as follows: 1. That the Court enter an order declaring that Defendant hold in trust, as constructive trustee for the benefit of BDI, its illegal profits obtained from its distribution of infringing slippers, and requiring Defendant to provide BDI a full and complete accounting of all amounts due and owing to BDI as a result of Defendants illegal activities. 2. That the Court order Defendant to pay BDIs general, special, actual, and statutory damages as follows: a. BDIs damages and Defendants profits pursuant to 17 U.S.C. 504(b), or in the alternative, enhanced statutory damages pursuant to 17 U.S.C. 504(c)(2), for Defendants willful infringement; b. BDIs damages and Defendants profits pursuant to 15 U.S.C. 1117(a), trebled pursuant to 15 U.S.C. 1117(b) for Defendants willful violation of BDIs trade dress or, in the alternative, statutory damages pursuant to 15 U.S.C. 1117(c) for each infringing product; and

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c. BDIs damages and Defendants profits pursuant to North Carolina common law; 3. That the Court order Defendant to pay to BDI both the costs of this action and the reasonable attorneys fees incurred by it in prosecuting this action; and 4. That the Court grant to BDI such other and additional relief as is just and proper, including a permanent injunction pursuant to 35 U.S.C. 283 and 15 U.S.C. 1116. JURY DEMAND BDI demands a trial by jury on all issues. November 26, 2013 Respectfully submitted, /s/ Alex J. Hagan Alex J. Hagan, Esq. (NC State Bar No. 19037) ELLIS & WINTERS LLP Post Office Box 33550 Raleigh, NC 27636 Telephone: (919) 865-7000 Facsimile: (919) 865-7010 Email: alex.hagan@elliswinters.com Local Civil Rule 83.1 Counsel Andrew S. Chamberlin, Esq. (NC State Bar No. 17369) ELLIS & WINTERS LLP 333 N. Greene Street, Suite 200 Greensboro, NC 27401 Telephone: (336) 217-4193 Facsimile: (336) 217-4198 Email: andrew.chamberlin@elliswinters.com Local Civil Rule 83.1 Counsel Andrew M. Ollis (VA State Bar No. 39051) Tia D. Fenton (VA State Bar No. 70078) Special Notices of Appearance Forthcoming OBLON, SPIVAK, MCCLELLAND, MAIER & NEUSTADT, L.L.P 1940 Duke Street Alexandria, VA 22314 Telephone: (703) 413-3000 Facsimile: (703) 413-2220 Email: Aollis@oblon.com

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EXHIBIT A

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JS 44 (Rev. 12/12)

CIVIL COVER SHEET

The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS
BUYER'S DIRECT INC.
(b) County of Residence of First Listed Plaintiff
(EXCEPT IN U.S. PLAINTIFF CASES)

DEFENDANTS
BIG LOTS STORES, INC.
County of Residence of First Listed Defendant
NOTE: (IN U.S. PLAINTIFF CASES ONLY) IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number)


Alex J. Hagan, Ellis & Winters LLP, P.O. Box 33550, Raleigh, NC 27636

Attorneys (If Known)

II. BASIS OF JURISDICTION (Place an X in One Box Only)


1 U.S. Government Plaintiff U.S. Government Defendant 3 Federal Question (U.S. Government Not a Party) Diversity (Indicate Citizenship of Parties in Item III)

III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an X in One Box for Plaintiff


(For Diversity Cases Only) PTF Citizen of This State 1 Citizen of Another State Citizen or Subject of a Foreign Country 2 3 DEF 1 2 3 and One Box for Defendant) PTF DEF Incorporated or Principal Place 4 4 of Business In This State Incorporated and Principal Place of Business In Another State Foreign Nation 5 6 5 6

IV. NATURE OF SUIT (Place an X in One Box Only)


CONTRACT 110 Insurance 120 Marine 130 Miller Act 140 Negotiable Instrument 150 Recovery of Overpayment & Enforcement of Judgment 151 Medicare Act 152 Recovery of Defaulted Student Loans (Excludes Veterans) 153 Recovery of Overpayment of Veterans Benefits 160 Stockholders Suits 190 Other Contract 195 Contract Product Liability 196 Franchise REAL PROPERTY 210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property TORTS PERSONAL INJURY 310 Airplane 315 Airplane Product Liability 320 Assault, Libel & Slander 330 Federal Employers Liability 340 Marine 345 Marine Product Liability 350 Motor Vehicle 355 Motor Vehicle Product Liability 360 Other Personal Injury 362 Personal Injury Medical Malpractice CIVIL RIGHTS 440 Other Civil Rights 441 Voting 442 Employment 443 Housing/ Accommodations 445 Amer. w/Disabilities Employment 446 Amer. w/Disabilities Other 448 Education PERSONAL INJURY 365 Personal Injury Product Liability 367 Health Care/ Pharmaceutical Personal Injury Product Liability 368 Asbestos Personal Injury Product Liability PERSONAL PROPERTY 370 Other Fraud 371 Truth in Lending 380 Other Personal Property Damage 385 Property Damage Product Liability PRISONER PETITIONS Habeas Corpus: 463 Alien Detainee 510 Motions to Vacate Sentence 530 General 535 Death Penalty Other: 540 Mandamus & Other 550 Civil Rights 555 Prison Condition 560 Civil Detainee Conditions of Confinement FORFEITURE/PENALTY 625 Drug Related Seizure of Property 21 USC 881 690 Other BANKRUPTCY 422 Appeal 28 USC 158 423 Withdrawal 28 USC 157 PROPERTY RIGHTS 820 Copyrights 830 Patent 840 Trademark LABOR 710 Fair Labor Standards Act 720 Labor/Management Relations 740 Railway Labor Act 751 Family and Medical Leave Act 790 Other Labor Litigation 791 Employee Retirement Income Security Act SOCIAL SECURITY 861 HIA (1395ff) 862 Black Lung (923) 863 DIWC/DIWW (405(g)) 864 SSID Title XVI 865 RSI (405(g)) OTHER STATUTES 375 False Claims Act 400 State Reapportionment 410 Antitrust 430 Banks and Banking 450 Commerce 460 Deportation 470 Racketeer Influenced and Corrupt Organizations 480 Consumer Credit 490 Cable/Sat TV 850 Securities/Commodities/ Exchange 890 Other Statutory Actions 891 Agricultural Acts 893 Environmental Matters 895 Freedom of Information Act 896 Arbitration 899 Administrative Procedure Act/Review or Appeal of Agency Decision 950 Constitutionality of State Statutes

FEDERAL TAX SUITS 870 Taxes (U.S. Plaintiff or Defendant) 871 IRSThird Party 26 USC 7609

IMMIGRATION 462 Naturalization Application 465 Other Immigration Actions

V. ORIGIN (Place an X in One Box Only)


1 Original Proceeding 2 Removed from State Court 3 Remanded from Appellate Court 4 Reinstated or Reopened 5 Transferred from Another District
(specify)

6 Multidistrict Litigation

Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):

VI. CAUSE OF ACTION Brief description of cause:

35 U.S.C. 271

Action for design patent infringement, trade dress infringement and unfair competition.
DEMAND $ CHECK YES only if demanded in complaint: Yes No JURY DEMAND: DOCKET NUMBER

CHECK IF THIS IS A CLASS ACTION VII. REQUESTED IN UNDER RULE 23, F.R.Cv.P. COMPLAINT: VIII. RELATED CASE(S) (See instructions): IF ANY JUDGE
DATE

SIGNATURE OF ATTORNEY OF RECORD

11/26/2013
FOR OFFICE USE ONLY RECEIPT # AMOUNT

/s/ Alex J. Hagan, Rule 83.1 counsel


APPLYING IFP JUDGE MAG. Case 5:13-cv-00818-FL Document 1-2 Filed 11/26/13 Page 1 ofJUDGE 2

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JS 44 Reverse (Rev. 12/12)

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44


Authority For Civil Cover Sheet
The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows: I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)". Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X" in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below. United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box 1 or 2 should be marked. Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.) Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party. Nature of Suit. Place an "X" in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than one nature of suit, select the most definitive. Origin. Place an "X" in one of the six boxes. Original Proceedings. (1) Cases which originate in the United States district courts. Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441. When the petition for removal is granted, check this box. Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date. Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date. Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers. Multidistrict Litigation. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407. When this box is checked, do not check (5) above. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P. Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction. Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.

(b)

(c)

II.

III.

IV.

V.

VI.

VII.

VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases. Date and Attorney Signature. Date and sign the civil cover sheet.

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