TGI Systems Corporation v. Giessler et al

Filing 43

MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 3/8/2016: For the reasons stated in the accompanying decision, the Court denies defendants' motion to dismiss [dkt. no. 23]. Defendants are directed to answer the comp laint by no later than March 29, 2016. Both sides are to make Rule 26(a)(1) disclosures by the same date. A status hearing is set for April 4, 2016 at 8:45 a.m., in chambers (Room 2188). Prior to that date, counsel are to discuss and attempt to agree upon a discovery and pretrial schedule to propose to the Court. (mk)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

TGI SYSTEMS CORPORATION,
Plaintiff,
vs.
JENS GIESSLER and NEUMANN &
MULLER GmbH & Co.KG,
Defendant.

)
)
)
)
)
)
)
)
)
)

Case No. 15 C 4341

MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
TGI Systems Corporation has sued Jens Giessler and Neumann & Muller (N&M)
for fraud and, in the alternative, breach of contract. TGI's claim arises from defendants'
allegedly knowing misrepresentations aimed at increasing the price on an agreement
between TGI and defendants.
TGI was a party to a contractual agreement to provide LED displays at the 2009
Confederations Cup and the 2010 World Cup. TGI subcontracted with defendants to
procure and deliver the LED systems. For reasons that are disputed, defendants
charged TGI more than the bargained-for price and allegedly interfered with TGI's
efforts to locate other providers. TGI, which was bound by its own obligations under the
separate World Cup contract, says it begrudgingly obliged and paid defendants their
increased asking price. Defendants' sudden increase in price and the communications
surrounding that event form the basis of TGI's claims in this lawsuit.
Defendants have moved to dismiss for lack of personal jurisdiction, lack of proper

venue, and based on the doctrine of forum non conveniens. For the reasons stated
below, the Court denies defendants' motion in its entirety.
Background
TGI is a graphic design company with offices in Illinois, California, and Germany.
During the events relevant to this case, TGI had offices only in Illinois. In or about 2007,
TGI entered into a contract with the Federation Internationale de Football Association
(FIFA) to provide signage for FIFA's 2009 Confederations Cup and 2010 World Cup in
South Africa. Under this contract, TGI was to provide static and rotational signs. The
contract provided that if FIFA decided to switch to LED signage, TGI would have the
opportunity to provide it. In or about 2008, FIFA decided to use LED signage and
informed TGI that it intended to use AIM Marketing to provide it. TGI objected,
contending that FIFA's decision to outsource the LED signage was a breach of the 2007
contract.
After TGI's protest, FIFA and TGI entered into a new agreement under which TGI
would provide the signage for both tournaments only if it used AIM Marketing and its
sister company AIM International, A.G., as a subcontractor to supply the LED systems.
AIM had minimal staff, so it contracted with N&M to provide support for much of the
services it supplied to TGI. AIM and N&M had been business partners before the 2009
Confederations Cup, having worked together to supply LED signage to soccer teams in
Germany. AIM and N&M allegedly planned to work together and share profits
generated from the systems after the 2009 and 2010 competitions.
For the Confederations Cup, TGI acted primarily as a coordinator for the
shipments; FIFA paid all transportation expenses for the systems' shipments. N&M was

2

identified as a consignor for the systems during the Confederations Cup. The payment
scheme remained somewhat similar for the World Cup, except that FIFA would pay the
first $1,100,000 in transportation expenses, and AIM would pay for expenses over and
above $1,100,000. TGI remained responsible for coordinating transportation of the
systems. Ten systems were to be shipped to South Africa, with three used systems
coming from Germany and seven new systems coming from China.
In February 2010, AIM took the position that TGI was required to act as
consignor for the AIM-owned and controlled LED systems that were being shipped from
Germany and China. TGI refused, claiming that acting as consignor would subject it to
a German tax that it did not want to pay. N&M then offered to provide services for TGI,
including locating consignors and preparing the systems for shipment. TGI rejected
N&M's offer, and it began searching for alternative consignors.
TGI was able to locate another consignor for the three LED systems that were
coming from Germany. According to TGI, however, N&M blocked its efforts to find an
alternative consignor for the seven systems coming from China. Even when TGI found
prospective consignors, N&M allegedly refused to release the systems or the
information necessary for the consignors to arrange for their shipment.
As the deadline for TGI to have the LED systems in South Africa for the World
Cup approached, TGI says, it was left with no choice but to reconsider N&M's offer.
TGI's president contacted N&M's senior manager and partial owner Jens Giessler to
inquire about the company's previous offer (made on May 13, 2010) and to get an
understanding of the purpose of certain charges contained in the offer. Giessler
responded with an e-mail, stating that N&M would charge 2,000 Euros ($2,514) per day

3

to provide detailed responses to TGI's questions. Giessler also suggested that TGI pay
100,000 Euros ($125,743) by May 17 to allow N&M to begin working. TGI made the
initial payment of $126,450 to N&M because it had no other meaningful options to fulfill
its obligations under the FIFA contract. N&M demanded that TGI make another
payment of a little under 100,000 Euros ($113,252.47) three days later, which TGI paid.
The parties exchanged communications over the course of the next two weeks,
all via e-mail. TGI attempted to arrange for one of N&M's associates to act as the
consignor free of charge, as had been offered previously, but N&M rebuffed this
proposal. Finally, on May 26, 2010, Giessler offered to retain a Chinese company as
consignor if TGI paid $500,000 to N&M. TGI says that because just nine days remained
before the deadline for the LED systems to arrive in South Africa, it had no choice but to
oblige. But before accepting, TGI sent an e-mail to Giessler objecting to the $500,000
price. TGI also had its counsel send a letter to FIFA demanding that FIFA or AIM pay
the fee. FIFA refused, and it demanded that TGI pay the fee or face full liability for any
failure of the LED systems to arrive in South Africa in time for the World Cup. This
liability, TGI says, could have ranged from $10,000,000 to $100,000,000. Given the
time crunch and N&M's continuous blocking of TGI's efforts to find an outside consignor,
TGI alleges it had no choice but to pay N&M its asking price.
Several times over the course of the next few months, TGI unsuccessfully sought
to learn the identity of N&M's chosen consigner. Each time TGI's representative asked
Giessler for the consignors' identity, he refused to provide the information. Giessler
claimed that he could not disclose the information without AIM's permission. In or about
July 2010, TGI learned that AIM had been the consignor.

4

According to TGI, substantially all of the statements made by Giessler and TGI in
connection to the fees for a consignor were knowingly false and intended to place TGI
in a position where it had no meaningful choice but to pay the monies demanded by
N&M. TGI alleges that if it had known the truth, it would not have paid N&M's asking
price and instead would have placed more pressure on FIFA to cover the consignor
costs. TGI filed this lawsuit in July 2015.
Discussion
Defendants have moved to dismiss for lack of personal jurisdiction, improper
venue, and under the doctrine of forum non conveniens. Defendants argue that their
dealings with TGI provide insufficient contacts with Illinois to permit TGI to sue them
here. Defendants also argue that the TGI/AIM agreement requiring disputes under that
agreement to be resolved by arbitration should apply and the present dispute between
TGI and defendants under principles of agency and estoppel. Finally, defendants
contend that the case should be dismissed under the doctrine of forum non conveniens
because there is an adequate alternative judicial forum in which to adjudicate the
dispute. The Court addresses each argument in turn.
1.

Personal jurisdiction
The plaintiff has the burden of establishing personal jurisdiction. Tamburo v.

Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). "[W]here, as here, the issue is raised on a
motion to dismiss and decided on the basis of written materials rather than an
evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional
facts." Id. The Court takes as true all well-pleaded facts alleged in the complaint and
resolves any factual disputes in favor of the plaintiff. Id.

5

In the absence of a federal statute authorizing nationwide service of process,
personal jurisdiction is governed by the law of the forum state. Id. The court's exercise
of jurisdiction over the defendant must be authorized by the terms of the forum-state's
personal jurisdiction statute and also must comport with the requirements of the
Fourteenth Amendment's Due Process Clause. See, e.g., Felland v. Clifton, 682 F.3d
665. 672 (7th Cir. 2012). Because Illinois' long-arm statute permits the exercise of
jurisdiction to the full extent of the Fourteenth Amendment's Due Process Clause, the
two inquiries merge. Tamburo, 601 F.3d at 701. As such, the Court must determine
whether defendants have sufficient minimum contacts with Illinois such that the
maintenance of the suit does not offend traditional notions of fair play and substantial
justice. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
a.

Specific jurisdiction analysis

The parties appear to agree that the Court does not have general jurisdiction
over the defendants. Rather, TGI argues that the Court has specific jurisdiction over the
defendants. "Specific jurisdiction is appropriate where (1) the defendant has
purposefully directed his activities at the forum state or purposefully availed himself of
the privilege of conducting business in that state and 2) the alleged injury arises out of
the defendant's forum-related activities." Tamburo, 601 F.3d at 702 (citing Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)).
The jurisdictional issue in this case primarily turns on whether the defendants
purposefully directed their activities at Illinois. In a case involving an alleged intentional
tort, constitutionally sufficient contacts can be imputed to a defendant if he is accused of
actions that are "expressly aimed" at the forum state. Mobile Anesthesiologists Chi.

6

LLC v. Anesthesia Assoc. of Houston Metroplex, P.A., 623 F.3d 440, 444 (7th Cir. 2010)
(citing Calder v. Jones, 465 U.S. 783, 789-90 (1984)). In particular, specific jurisdiction
exists if plaintiff's injury arose from defendants' intentional conduct that was expressly
aimed at the forum state and was conducted with knowledge that "the effects would be
felt—that is, that the plaintiff would be injured—in the forum state." Tamburo, 601 F.3d
at 703.
Defendants argue that the Court lacks specific jurisdiction over them because
they do not have sufficient contacts in Illinois, they did not purposefully direct their
conduct at Illinois, and the exercise of jurisdiction would offend traditional notions of fair
play and substantial justice. Defendants note that they do not have business offices or
agents in Illinois. They also contend that N&M has never solicited business with TGI or
sales in the Illinois market. Defendants also point a variety of other things they did not
do—travel to Illinois, do business with other companies in Illinois, etc.—to establish that
they did not purposefully direct their business at this state.
For its part, TGI argues that defendants' decision to engage in a business
relationship with an Illinois company and send a series of e-mails to carry out a scheme
to defraud that company is sufficient to establish specific jurisdiction. TGI argues that
defendants knew it was headquartered in Illinois, pointing to correspondence N&M sent
to TGI with its Illinois address printed at the top. TGI is a Chicago-based company with
nearly all of its employees here. Although TGI now has other locations as well, it
argues that there could have been no confusion at the relevant time regarding its
location because it had not yet expanded beyond Illinois. Therefore, according to TGI,
defendants knew they were sending e-mails to be read in Illinois by an Illinois company

7

and to perpetrate a scheme whose adverse effects would have been felt in Illinois by
TGI, an Illinois-based entity.
Tamburo specifically addressed contact via the Internet, holding that "tortious
acts aimed at a target in a forum state and undertaken for the express purpose of
causing injury there are sufficient to satisfy Calder's 'expressly-aimed' requirement." Id.
at 707. As indicated earlier, the Court takes as true for purposes of the motion to
dismiss TGI's factual allegations, in particular its allegations that defendants made a
series of fraudulent statements to TGI via e-mail for the purpose of inducing it to pay
them nearly $750,000. These allegations are sufficient to support specific jurisdiction,
irrespective of whether defendants had physical meetings in Illinois or locations or
agents in this state.
Defendant's argument that their communications with TGI were only responses
to TGI's inquiries does not defeat jurisdiction either. Here, as in Felland, the plaintiff
initiated contact with the defendants in an effort to move the pre-arranged agreement
along. See Felland, 682 F.3d at 671. But in the present circumstances, who initiated
contacts is not controlling. Both here and in Felland, it was the defendants' allegedly
false communications in response to TGI's inquiries that perpetrated the alleged
fraudulent scheme. Via these communications, defendants allegedly misrepresented
and concealed material facts in an effort to extract more money from TGI. If one takes
the allegations in the complaint as true, the defendants knew that the effect of its
alleged scheme would be felt in Illinois, which was TGI's sole business location at the
time. Given these circumstances, defendants purposefully directed their activities at
Illinois such that they reasonably could have expected to be haled into court in this

8

state.
b.

Fiduciary shield issue

Giessler argues that even if personal jurisdiction exists for N&M, it does not exist
for him under the fiduciary shield doctrine. The fiduciary shield doctrine is a limitation
on Illinois' long-arm statute that prevents courts from exercising jurisdiction over a nonresident when that person's only contact with Illinois is by virtue of his acts as a fiduciary
of a corporation. See, e.g., Plastic Film Corp. v. Unipac, Inc., 128 F. Supp. 2d 1143,
1146 (N.D. Ill. 2001). But the fiduciary shield doctrine does not apply when the
defendant is an owner or shareholder in a corporation or has a direct financial stake in
the action at issue or the company's health. Id. at 1147; see Kohler Co. v. Kohler Int'l,
Ltd., 196 F. Supp. 2d 690, 699 (N.D. Ill. 2002) (listing a variety of interests and positions
that would preclude a defendant from successful invoking the fiduciary shield). TGI has
alleged that Giessler is a part-owner of N&M, an allegation that the Court must as true
at this stage of the case. The Court also notes that in their reply brief, defendants make
no effort to rebut TGI's arguments against the application of the fiduciary shield doctrine,
indicating that they have conceded the point. One way or another, the Court concludes
that the fiduciary shield doctrine does not preclude the exercise of personal jurisdiction
over Giessler.
2.

Improper venue / arbitration
Defendants argue that a binding arbitration agreement covers TGI's claims

against them, making this Court an improper forum for adjudication of the case. The
parties in this case did not enter into an agreement to arbitrate their disputes. Rather,
defendants cite the arbitration agreement in the TGI/AIM contract, to which N&M and

9

Giessler were not parties. Generally, non-signatories cannot enforce arbitration
agreements. Affymax, Inc. v. Johnson & Johnson, 420 F. Supp. 2d 876, 881 (N.D. Ill.
2006) (Kennelly, J.) (recognizing that ". . . a party cannot ordinarily compel arbitration
unless it is a party to a contract with an arbitration clause . . ." before listing the limited
exceptions to that rule).
Defendants argue, correctly, that the "Seventh Circuit has recognized multiple
grounds on which an arbitration agreement may apply to claims involving a nonsignatory." Defs.' Mot. at 18. They cite the doctrines of equitable estoppel and agency
in seeking to enforce the AIM/TGI arbitration provision in this case.
a.

Equitable estoppel

The doctrine of equitable estoppel "allows a non-signatory to compel arbitration
when a signatory's claims are grounded in or intertwined with the terms of the written
agreement." Affymax, Inc., 420 F. Supp. 2d at 881. In Affymax, this Court concluded
that equitable estoppel applies in this context in two circumstances: 1) when the
signatory relies on the terms of the written agreement in asserting its claims against the
non-signatory, and 2) when the signatory raises allegations of substantially
interdependent and concerted misconduct by both the non-signatory and one or more of
the signatories to the contract. Id. at 882. Here, the signatory, TGI, does not rely on the
terms of its contract with AIM in asserting its claims against N&M and Giessler. Though
the relationships at issue in this case would not have arisen without the existence of the
AIM contract, the conduct challenged in this case is independent of that contract. And
although TGI has alleged that the AIM had a business relationship with the defendants
and stood to benefit from their dealings with TGI after the World Cup, TGI does not

10

allege that the events at issue here involved interdependent or concerted misconduct
along with AIM. In short, although TGI ended up dealing with defendants as a result of
its contract with AIM, that does not mean that its claims rely on or intertwined with that
contract. Rather, as TGI accurately notes, its claims against the defendants stem from
alleged false statements concerning issues that were not covered by the AIM contract,
concerning finding a consignor and legal requirements for shipping from China. In sum,
the doctrine of equitable estoppel does not apply, and defendants cannot enforce the
AIM/TGI arbitration agreement via that doctrine.
b.

Agency

Defendants also argue that they should be able to enforce the arbitration
agreement because they were AIM's agents. An agent can obtain the benefit of an
arbitration agreement between its principal and a third party. Janiga v. Questar Capital
Corp., 615 F.3d 735, 743 (7th Cir. 2010). The issues—aside from whether the claims
are covered by the language of the TGI/AIM agreement—are whether defendants were
AIM's agents and whether the claims they assert are within the scope of their agency.
Id.
To establish that they were agents of AIM's, defendants point to two statements
that TGI made in its complaint: "AIM and N&M were business partners," and "N&M had
agreed that N&M would be AIM's agent in leasing and providing associated services for
the LED systems after they were used in the Confederations Cup and World Cup." First
Am. Compl. ¶¶ 11, 12. These statements, according to the defendants, establish that
defendants were acting as AIM's agents. The Court disagrees. The assertion that AIM
and N&M were "business partners" does not mean that N&M was, legally speaking,

11

under the control of AIM or acting for its benefit—the key elements—with regard to the
conduct underlying the claims asserted here. See, e.g., Meyer v. Holley, 537 U.S. 280,
286 (2003) ("[T]he relevant principal/agency relationship demands not only control (or
the right to direct or control) but also the manifestation of consent by one person to
another that the other shall act on his behalf, and consent by the other to so act.")
(internal quotation marks omitted).
Additionally, the assertion that defendants would be AIM's agents after the
relevant contractual period ended, even if true, would not entitle defendants to benefit
from provisions in AIM's then-expired agreements. The anticipated future relationship
between AIM and defendants does not reflect the status of their relationship at the time
of the conduct at issue in this case.
In sum, defendants have failed to establish that they AIM's agents at the relevant
time, or that the claims TGI asserts involve conduct within the scope of their purported
agency. They are not entitled to enforce the AIM/TGI arbitration agreement with regard
to TGI's claims in this case.
c.

Effect of Swiss law

The discussion above establishes that defendants cannot enforce against TGI in
this case its arbitration agreement with AIM. In addition to the points already
addressed, TGI contends that the AIM/TGI agreement reflects that the parties did not
intend its enforcement by third parties. Specifically, in that agreement, AIM and TGI
agreed that Swiss law would govern any and all arbitration proceedings. TGI submitted
an unsworn memo to the Court stating that, under Swiss law, a non-signatory to a
contract cannot compel an arbitration agreement therein. The Court cannot consider

12

the memo, which is nothing but an unsworn document of unknown provenance.
That said, TGI's contention about non-signatories' inability to enforce arbitration
agreements under Swiss law appears to be correct. Though the Seventh Circuit has
not addressed it, at least one circuit has ruled that Swiss law precludes non-signatories
from enforcing arbitration agreements, with limited exceptions that are not relevant here.
In a 2005 case, the Second Circuit ordered post-argument supplemental briefing to
determine whether non-signatories could enforce arbitration agreements under Swiss
law. The court eventually cited the highest court in Switzerland in holding that "under
Swiss law, defendants, as non-signatories to the agreements, may not invoke the
arbitration clauses contained in those agreements. Motorola Credit Corp. v. Uzan, 388
F.3d 39, 51 (2d Cir. 2004) (citing Swiss Federal Tribunal, decision of May 19, 2003,
4C.40/2003, No. 4.1). And although it did not depend on Swiss law for its holding, the
Third Circuit similarly noted that Swiss law requires parties to be signatories to an
arbitration agreement in order to enforce it. See General Elec. Co. v. Deutz AG, 270
F.3d 144, 155 (3d Cir. 2001) (noting that an ICC panel applying Swiss law held that a
signatory to some parts of a contract, but not the arbitration agreement therein, was not
entitled to arbitration under that agreement). In short, Swiss law—the agreed-upon law
governing the arbitration provision in the TGI/AIM agreement—does not appear to
permit third-party enforcement.
For these reasons, the Court declines to dismiss the case on the ground that
TGI's claims are subject to arbitration.
3.

Forum non conveniens
Defendants submit that, if for no other reason, the case should be dismissed

13

under the doctrine of forum non conveniens. Forum non conveniens is a discretionary
doctrine that allows courts to dismiss actions involving foreign defendants if 1) there is
an available and adequate alternative forum and 2) the balance of public and private
interests weigh in favor of dismissal. See, e.g., Clerides v. Boeing Co., 534 F.3d 623,
628 (7th Cir. 2008). Dismissal is appropriate if the plaintiff's chosen forum would
disproportionately impose oppressiveness and vexation upon a defendant in exchange
for the plaintiff's convenience. Id. Defendants argue that being forced to litigate this
case in Illinois would unnecessarily inconvenience them and various witnesses.
Further, they argue that there are compelling reasons to dismiss the case so that it may
be litigated elsewhere, specifically in Germany or Switzerland. "A defendant invoking
forum non conveniens ordinarily bears a heavy burden in opposing the plaintiff's chosen
forum," particularly where, as in this case, it is the plaintiff's home forum. Sinochem Int'l
Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430 (2007).
a.

Alternative forums

Defendants argue that Germany and Switzerland are available and adequate
forums.1 They point to Germany because the parties met there, and many of the
defendants' witnesses (along with the defendants themselves) are located there. They
point to Switzerland because many of their proposed witnesses are located in
Switzerland, and some of the dealings underlying the case took place there.
An alternative forum is adequate if "the parties will not be deprived of all

1

TGI's agreement with N&M purportedly includes a forum selection provision specifying
German courts, but a German court held in a different context that the provision was
unenforceable. Defendants do not argue in connection with the present motion that the
forum selection clause carries the day here or is a factor to be considered in the forum
non conveniens analysis.
14

remedies or treated unfairly." Fischer v. Magyar Allamvasutak Zrt., 777 F.3d 847, 867
(7th Cir. 2015). If a forum's statute of limitation bars a plaintiff's claims, that forum
deprives the plaintiff of a remedy. In particular, "if a plaintiff's suit would be time-barred
in the alternative forum, his remedy there is inadequate—is no remedy at all, in a
practical sense . . . ." Chang v. Baxter Healthcare Corp., 599 F.3d 728, 736 (7th Cir.
2010). TGI contends that is the case here because the German and Swiss statutes of
limitation on its claims have expired. Despite having the burden of persuasion on the
forum non conveniens issue, defendants did not address this point in their opening brief;
they simply contended that both Germany and Switzerland are available forums. In
their reply, defendants attempt to reverse the burden of persuasion by arguing that
TGI's evidence does not provide a basis for determining that the two proposed forums
are unavailable due to the statute of limitations. Because it is defendants who have the
burden of persuasion on the issue of forum non conveniens, the way they have
addressed this point amounts to a concession, or a near-concession, that the statute of
limitations has in fact run in both countries.
Defendants attempt to avoid the point by assuring the Court that they will waive
this defense if the Court dismisses the case in favor of a foreign forum. But although
defendants note that an expired statute of limitations does not preclude dismissal on
forum non conveniens grounds if the defendant agrees to waive the defense, they do
not acknowledge the second requirement of this exception: the alternative forum must
be willing to enforce the waiver. Fischer, 777 F.3d at 862. Defendants have offered no
assurance that the forums would enforce their waiver of a limitations defense—in fact,
they have not even addressed the enforceability of such a waiver. The Court cannot

15

simply assume that the proposed alternative forums would enforce the defendants'
waiver. Under the circumstances, the Court cannot say that there is an adequate
alternative forum available.
Even were the defendants to waive the statute of limitations, and even had they
shown that the proposed alternative forums would accept such a waiver, there is at
least a question regarding whether an alternative forum is actually available. An
alternative forum is "available if all parties are amenable to process and within the
forum's jurisdiction." Fischer v. Magyar Allamvasutak Zrt., 777 F.3d 847, 867 (7th Cir.
2015). A court in Germany dismissed a prior suit by N&M against TGI (alleging
nonpayment) for lack of jurisdiction. See Defs.' Am. Mot. to Dismiss, Ex. 2B. Although
the court's decision dealt primarily with the enforceability of a forum selection clause
cited by N&M, it is less than clear that a German court would accept jurisdiction over a
suit by TGI. Defendants likewise have not shown that they both would be within the
jurisdiction of a Swiss court.
b.

Balance of interests

Given the absence of an available and adequate alternative forum, dismissal on
the basis of forum non conveniens would be inappropriate, and the Court need not
engage in the balancing of interests. But even were the Court to do so, the balance
would not tip in favor of dismissal. In conducting the forum non conveniens analysis,
courts balance both private and public interests. See Gulf Oil Corp. v. Gilbert, 330 U.S.
501, 508-09 (1947); Clerides v. Boeing Co., 534 F.3d 623, 628 (7th Cir. 2008). The
private interest factors include:
the relative ease of access to sources of proof; availability of compulsory
process for attendance of unwilling, and the cost of obtaining attendance
16

of willing, witnesses; possibility of view of premises, if view would be
appropriate to the action; and all other practical problems that make trial of
a case easy, expeditious and inexpensive.
Clerides, 534 F.3d at 628. The public interest factors include:
the administrative difficulties stemming from court congestion; the local
interest in having localized disputes decided at home; the interest in
having the trial of a diversity case in a forum that is at home with the law
that must govern the action; the avoidance of unnecessary problems in
conflicts of laws or in the application of foreign law; and the unfairness of
burdening citizens in an unrelated forum with jury duty.
Id. Regarding the private interest factors, defendants cite the location of documents
and witnesses; on the public interest factors, they seem to contend that German law will
apply.
These days business records are typically made or at least maintained digitally,
and more importantly, they are nearly always produced digitally when litigation takes
place. Thus records that are in western Europe are barely less accessible to a litigant in
Illinois than they would be if they were in Illinois, and the converse is also true.2 In this
case, this is not a significant factor in the forum non conveniens analysis. See generally
Qurio Holdings, Inc. v. DISH Network Corp., No. 14 C 7504, 2015 WL 536002, at *3
(N.D. Ill. Feb. 9, 2015) (discussing the similar analysis under 28 U.S.C. §1404(a); citing
Bd. of Trs., Sheet Metal Workers' Nat'l Pension Fund v. Elite Erectors, Inc., 212 F.3d
1031, 1037 (7th Cir. 2000)).
With regard to the witnesses defendants cite, TGI legitimately disputes the
significance of a good number of them. There are, however, at least a handful of
2

In their reply, defendants make reference to Germany's "Data Protection Directive,"
which they say restricts international disclosure of certain types of data. But defendants
make no effort to explain how, if at all, the Directive or any other restrictions Germany
imposes on document production would affect discovery in this case, so they have
effectively forfeited the point.
17

significant witnesses whose testimony likely is important who are outside the United
States and therefore not subject to the Court's subpoena power. Some are parties
(Giessler) or affiliated with parties, and those witnesses are likely to attend a trial even if
the case remains here. Some are Chinese nationals; the appearance of those
witnesses is no more likely in Europe than in the U.S. But this leaves at least some
witnesses—though far fewer than defendants contend—whose appearance cannot be
compelled here and who would be more likely to be able to appear at trial were the case
tried in Europe. Those witnesses' depositions could be taken for trial purposes, but our
legal system has a preference for live testimony. See generally FTC v. Acquinity
Interactive, LLC, No. 2014 WL 37808, at *3 (N.D. Ill. Jan. 6, 2014) (Kennelly, J.). This
factor weighs in favor of dismissal. That said, given the ubiquity of video depositions,
the amount of weight properly given to this factor is less than in the "old" days when the
norm was presentation of the cold record of a transcribed deposition.
Defendants also contend that German law governs TGI's agreement with N&M.
That is anything but clear. Evidently an e-mail from N&M cited certain "terms and
conditions" that appeared on its website, and these include a provision for application of
German law. But TGI disputes that these terms and conditions were part of its
agreement with N&M. At this point in the case, defendants have failed to establish—
indeed they have not really tried to establish—that this provision is part of an
enforceable contract between TGI and N&M.
There is "a strong presumption in favor of the plaintiff's choice of forum, which
may be overcome only when the private and public interest factors clearly point towards
trial in the alternative forum." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981).

18

And "a plaintiff's choice of forum is entitled to greater deference when the plaintiff has
chosen the home forum." Id. at 266. That is the case here. Defendants seek to
minimize TGI's Illinois presence and emphasize its foreign dealings. On the record
before the Court, however, there is no question that TGI was and is an Illinois-based
entity whose business operations are run from here and virtually all of whose
employees work here, even if it has significant overseas dealings. There is no
legitimate basis to discount its election to sue in its home forum.
The factors that defendants cite, specifically the location of non-party witnesses
as discussed earlier, tilt somewhat toward dismissal in favor of a foreign forum. But that
is insufficient to outweigh the significant deference properly given to TGI's choice to sue
in its home forum. TGI is an Illinois company suing for conduct directed at this state
that affected it here in Illinois. There is an appreciable public interest in providing a
forum in this state in which TGI can seek redress for the alleged wrongdoing by the
defendants.
For these reasons, defendants have failed to carry their "heavy burden" in
opposing TGI's choice of its home forum. Sinochem Int'l, 549 U.S. at 430. The Court
declines to dismiss this case under the doctrine of forum non conveniens.
Conclusion
For the foregoing reasons, the Court denies defendants' motion to dismiss [dkt.
no. 23]. Defendants are directed to answer the complaint by no later than March 29,
2016. Both sides are to make Rule 26(a)(1) disclosures by the same date. A status
hearing is set for April 4, 2016 at 8:45 a.m., in chambers (Room 2188). Prior to that
date, counsel are to discuss and attempt to agree upon a discovery and pretrial

19

schedule to propose to the Court.

________________________________
MATTHEW F. KENNELLY
United States District Judge
Date: March 8, 2016

20