Sheldon Drobny v. Randall J. Lanham, et al
Filed Nonprecedential Disposition PER CURIAM. AFFIRMED. Frank H. Easterbrook, Circuit Judge; Ann Claire Williams, Circuit Judge and Diane S. Sykes, Circuit Judge. [6826031-1]  [16-3511]
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted February 13, 2017*
Decided March 15, 2017
FRANK H. EASTERBROOK, Circuit Judge
ANN CLAIRE WILLIAMS, Circuit Judge
DIANE S. SYKES, Circuit Judge
RANDALL J. LANHAM, et al.,
Appeal from the United States District
Court for the Northern District of Illinois,
No. 16 C 1912
Amy J. St. Eve,
O R D E R
In an Illinois federal court, Sheldon Drobny sued Randall Lanham and M.
Richard Cutler, both out‐of‐state attorneys, for their conduct during the second of two
corporate mergers. The attorneys moved to dismiss the suit for lack of personal
jurisdiction, and the district court granted the motion. It reasoned that Drobny did not
allege that his injuries arose from any of the attorneys’ forum‐related activities. On
* We have agreed to decide the case without oral argument because the briefs and
record adequately present the facts and legal arguments, and oral argument would not
significantly aid the court. FED. R. APP. P. 34(a)(2)(C).
appeal Drobny argues that the district court erred because, he says, his emails and
telephone calls from Illinois to the attorneys, mentioned in his complaint, establish
personal jurisdiction. We disagree and affirm the judgment because none of “the
defendant[s’] conduct connects [them] to the forum in a meaningful way.” Walden v.
Fiore, 134 S. Ct. 1115, 1125 (2014).
The first merger involved a public company in Illinois called Xformity
Technologies, Inc., which Drobny owned. Lanham, a California attorney, asked Drobny
about merging Xformity with Gold Star North American Mining, Inc., a private
Colorado corporation that Lanham represented. In exchange for cash from Gold Star,
Drobny agreed to the merger.
The second merger, which is the basis of this suit, occurred after Gold Star did
not deliver all the agreed‐upon cash. To rectify the shortfall, Gold Star promised
another merger. It agreed to merge with a different company, and the resulting
corporation, Clearwave Telecommunications, Inc., based in Colorado, would pay
Drobny the remaining money. According to Drobny, Lanham and Cutler, a Texas
attorney, drafted the agreements and conducted due diligence for this second merger.
Clearwave never delivered any money to Drobny.
Drobny sued Clearwave, Lanham, and Cutler in the Northern District of Illinois.
He alleged that the attorneys breached their fiduciary duties, committed malpractice,
and were grossly negligent in their work on the second merger because they should
have known that Clearwave had no assets and therefore could not pay him. He also
argued that the district court had personal jurisdiction over the lawyers because he had
communicated by email and telephone with Lanham and Cutler over 14 months. (He
attached to his complaint a log of email correspondence with the defendants.) The
attorneys moved to dismiss for lack of personal jurisdiction. See FED. R. CIV. P. 12(b)(2).
They declared that they never conducted business in Illinois after the first merger.
Drobny did not dispute this, and the district court granted the motion. It concluded that
it did not have general jurisdiction over the out‐of‐state attorneys because they were not
“at home” in Illinois, and it did not have specific jurisdiction because none of the
alleged torts during the second merger occurred in Illinois. The court also dismissed
Clearwave for lack of service, a decision that Drobny does not challenge.
On appeal Drobny argues that the district court erred in concluding that it lacked
specific personal jurisdiction over the attorneys. He contends that Lanham and Cutler
purposefully directed their conduct at Illinois through their telephone and email
communications with him. He explains that he corresponded with them to try “to
correct” their botched legal work on the second merger. Drobny also says that he is
suing the attorneys in his individual capacity and derivatively on behalf of Clearwave.
But he may not bring a derivative action pro se. See Rowland v. California Menʹs Colony,
506 U.S. 194, 201–02 (1993); United States v. Hagerman, 545 F.3d 579, 581 (7th Cir. 2008).
We thus focus only on his potential personal claims.
The district court correctly ruled that it lacked specific personal jurisdiction over
Lanham and Cutler. Specific personal jurisdiction requires that the lawyers either
purposefully availed themselves of benefits of Illinois law or that they directed their
activities at Illinois and Drobny’s claims arose from those activities. See Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 472, 475 (1985); World‐Wide Volkswagen Corp. v. Woodson, 444
U.S. 286, 297 (1980). Drobny did not allege facts to support specific personal jurisdiction.
First, he did not contend that the lawyers availed themselves of benefits of Illinois law.
Second, Drobny did not allege that in committing their purported torts during the
second merger, the defendants had any contact with Illinois. Drobny narrates contacts
that he initiated with the lawyers. Some concern the first merger; others occurred after
the events that give rise to this litigation. And none concerns any effort by the lawyers
to conduct business in Illinois concerning the second merger. Walden requires analysis
of contacts between the defendants and the forum, not contacts between the plaintiff
and the forum, or between the plaintiff and the defendants. Because the lawyers
“formed no jurisdictionally relevant contacts” with Illinois during the second merger,
Drobny has not identified a basis for specific personal jurisdiction over Lanham and
Cutler. Walden, 134 S. Ct. at 1124–25.
A final matter. Drobny challenges the district court’s denial of his motion to
recruit counsel because, based on his $16,000 in annual income, he argues that he is
“unable to afford legal counsel.” 28 U.S.C. § 1915(e)(1). The district court denied his
motion because it found that he was not indigent—his income was several thousand
dollars above the poverty line established by the Department of Health and Human
Services. We uphold the district court’s discretionary denial of Drobny’s motion for
recruited counsel on another ground. We have no reason to conclude that recruited
counsel would have affected this case’s outcome because an attorney could not change
Drobny’s own account of the defendants’ out‐of‐Illinois activities. See Tidwell v. Hicks,
791 F.3d 704, 709 (7th Cir. 2015).
The judgment of the district court is AFFIRMED.
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