John Crane Inc. v. Simon Greenstone Panatier Bartlett, A Professional Corporation et al
Filing
48
MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 3/23/2017:Mailed notice(kef, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOHN CRANE INC.,
)
)
Plaintiff,
)
)
v.
)
)
SIMON GREENSTONE PANATIER
)
BARTLETT, APC; JEFFREY B. SIMON; )
DAVID C. GREENSTONE,
)
)
)
Defendants.
)
Case No. 16-CV-05918
Hon. Amy St. Eve
MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
On June 6, 2016, Plaintiff John Crane Inc. (“JCI”) brought the present six-count
Complaint against Defendants Simon Greenstone Panatier Bartlett, P.C., Jeffrey B. Simon, and
David C. Greenstone, collectively, “Defendants,” alleging violations of the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., and common law claims for
conspiracy and fraud. Before the Court is Defendant’s motion to dismiss brought pursuant to
Federal Rule of Civil Procedure 12(b)(2) and 12(b)(3). Defendants contemporaneously filed a
motion to dismiss for lack of subject matter jurisdiction and failure to state a claim, however, as
a matter of economy, the Court first addresses Defendants’ motion to dismiss for personal
jurisdiction and venue. For the following reasons, the Court grants Defendants’ motion.
BACKGROUND
I.
The Parties
Plaintiff John Crane Inc. (“JCI”) is a Delaware corporation with its principal place of
business in Morton Grove, Illinois that manufacturers and distributes industrial sealing products.
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(R. 1, Compl. ¶ 11.) Defendant Simon Greenstone Panatier Bartlett, PC (“the Firm”) is a law
firm, organized under the laws of Texas, with its principal place of business in Dallas, Texas.
(Id. ¶ 12.) The Firm’s partners and shareholders are residents of Texas and California. (Id. ¶
12.) Defendants Simon and Greenstone are shareholders and name partners in the Firm. (Id. ¶¶
13-14.)
Simon and Greenstone (“the Lawyer Defendants”) founded the Firm in January 2006.
(Id. ¶ 24.) The Firm has offices in California and Texas and primarily represents injured persons
in asbestos and mesothelioma personal-injury cases. (Id. ¶¶ 24-25.) Plaintiff alleges that Simon
is lead counsel in the Firm’s mesothelioma cases and has final decision-making authority over all
Firm litigation, while Greenstone heads the Firm’s asbestos bankruptcy practice and serves as the
Firm’s managing partner. (Id. ¶¶ 27-29.) Asbestos clients either hire the Firm directly or other
lawyers, such as Early, Lucarelli, Sweeny & Meisenkothen (“the Early Firm”), refer clients to
the Firm. (Id. ¶ 30.) Plaintiff alleges that asbestos and mesothelioma cases can be very lucrative
for the Firm, often generating multimillion-dollar verdicts. (Id. ¶¶ 32-34.)
II.
Asbestos Bankruptcy Trusts
Plaintiff alleges that the leading cause of mesothelioma among American workers is
exposure to thermal insulation containing amphibole asbestos fibers. (Id. ¶ 35.) Most companies
responsible for producing this “more potent” amphibole-containing insulation have filed for
bankruptcy protection due to liability for asbestos personal-injury claims. (Id. ¶ 36.) Bankruptcy
courts have created trusts through which persons exposed to the companies’ asbestos-containing
products can make claims for compensation. (Id. ¶ 37.) Unlike tort claims, the parties typically
resolve these bankruptcy-trust claims outside the judicial system through procedures established
by the advisory committees that oversee the trusts. (Id. ¶ 38.) Plaintiff alleges that the trusts’
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claim procedures typically require a claimant to certify that he or she was exposed to the
bankrupt company’s asbestos-containing products and trusts only pay claims when a claimant
provides credible proof of exposure to a company’s products. (Id. ¶¶ 39-40.) Asbestos litigation
thus exists on a “two-track system” in which lawyers seek money from non-bankrupt companies
through tort litigation and seek additional recovery from bankrupt companies through trust
claims. (Id. ¶ 41.)
Plaintiff alleges that the Firm utilized a fee-sharing agreement with referring lawyers,
whereby referring lawyers would often retain their clients’ bankruptcy trust claims, the Firm
would pursue the tort claims, and then the Firm and the referring lawyers would split the money
recovered from both claims. (Id. ¶ 42.) Plaintiff contends that the Firm and the referring lawyers
exploited the two track system by making claims with the trusts, but withholding in tort litigation
the asbestos exposures on which the trust claims were based. (Id. ¶ 45.) The trusts’ claim
procedures made this scheme possible because they included confidentiality provisions
preventing disclosure of trust claim information to third parties, sole-benefit provisions requiring
that only the trusts use evidence submitted to the trust, and deferral and withdrawal provisions
allowing claimants to defer their trust claims until the resolution of other litigation or withdraw
their trust claims. (Id. ¶ 46.) Plaintiff alleges the Firm or their referring lawyers often filed
proofs of claim in bankruptcy cases asserting that their clients had personal injury claims against
the bankrupt companies arising from their exposure to the companies’ asbestos-containing
products. (Id. ¶ 48.)
III.
The Alleged Scheme
Asbestos cases rely heavily on “exposure evidence” indicating that the plaintiff was
exposed to an asbestos-containing product and that product caused plaintiff’s asbestos-related
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disease. (Id. ¶ 49.) Plaintiff alleges that Defendants have total control over exposure evidence
because their clients’ testimony is often the only evidence of exposure. (Id. ¶ 51.) Exposure
evidence is important because without evidence of exposure to a company’s product, a plaintiff
cannot recover damages, and unless a plaintiff can show exposure to a non-bankrupt company’s
product, recovery is limited to the bankruptcy trusts. (Id. ¶ 53.) Additionally, evidence of
exposure to a bankrupt company’s product can provide a defendant in tort litigation with a basis
to argue that another company’s product partially or fully caused the plaintiff’s disease,
particularly if the other company’s product is more potent. (Id.) As a result, alternative
exposure evidence, especially when it comes directly from the plaintiff’s testimony, makes it
substantially more likely that a tort-defendant will be found not liable or that the plaintiff’s
recovery will be limited. (Id. ¶¶ 54-57.) Plaintiff alleges this created an incentive for the Firm to
falsify their clients’ exposure histories. (Id. ¶ 62.)
In addition, Plaintiff alleges that the Lawyer Defendants have admitted that they had a
duty to disclose in tort litigation alternative exposures related to bankrupt companies. (Id. ¶¶ 63,
68.) Plaintiff alleges that the Firm coordinates with referring lawyers in drafting responses in
tort litigation to ensure that its clients’ positions are consistent with clients’ trust claims. (Id. ¶¶
66-67.) The Firm typically shared discovery created during tort litigation with the referring
firms, such as the Early firm, and the Firm’s lawyers sometimes conducted the investigation of a
client’s claims for both litigation and trust claims. (Id. ¶¶ 70-71.)
Plaintiff alleges that the Firm generally delayed filing trust claims until after the
resolution of the tort litigation, especially if the Firm handled the trust claims as well as the tort
litigation. (Id. ¶ 74.) Plaintiff further alleges that Defendants investigated their clients’ exposure
histories early in the litigation process, but delayed filing trust claims so the tort defendants
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would not know about the trust claims, often filing trust claims weeks after the tort litigation
concluded. (Id. ¶¶ 76-79.) According to Plaintiff, Defendants intended the process of delaying
the filing of trust claims to create the false appearance that the plaintiffs had only been exposed
to asbestos-containing products made by non-bankrupt companies, even though Defendants
knew the plaintiffs had been exposed to more potent products associated with bankrupt
companies. (Id. ¶¶ 80-81.)
Furthermore, Plaintiff alleges that Defendants’ practice of delaying the filing of trust
claims until the resolution of the tort litigation resulted in Defendants deliberately hiding the
existence of alternative exposure in litigation. (Id. ¶ 82.) Plaintiff alleges Defendants
“systematically provided false” responses in discovery in tort litigation, typically falsely denying
the plaintiffs’ exposure to any asbestos-containing products other than the products at issue in the
tort litigation. (Id. ¶¶ 84-85.) Defendants also caused their clients to not testify concerning
alternative exposures or identify exposures only to products of non-bankrupt companies in their
depositions. (Id. ¶¶ 88-89.) According to Plaintiff, it could not have known of the falsity of the
Firm’s clients’ exposure histories because only the Firm was aware of the clients’ true exposure
histories. (Id. ¶ 91.) Plaintiff only discovered the false exposure histories prepared by
Defendants when discovery in a related bankruptcy proceeding was unsealed in May 2015. (Id.
¶ 93.)
Plaintiff alleges that Defendants’ ultimate goal was to use fabricated exposure histories to
fraudulently obtain money verdicts and settlements in tort litigation. (Id. ¶ 95.) Defendants
created the false appearance that their clients had no alternative exposure history and ensured
that there was no direct evidence of alternative exposure, allowing them to argue that any
diseases were caused by the non-bankrupt company involved in tort litigation. (Id. ¶¶ 96-97.)
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Plaintiff alleges that Defendants not only fabricated exposure histories, but then filed motions in
limine attempting to exclude evidence of alternative exposure as unsubstantiated, even though
they were aware that their clients had been exposed to alternative asbestos-containing products.
(Id. ¶¶ 97-99.) Through these motions in limine, Defendants deprived Plaintiff of the
opportunity to present legitimate evidence of alternative exposure. (Id. ¶ 101.) Plaintiff alleges
that through this scheme, Defendants increased their likelihood of success at trial and the
likelihood that they would receive a more substantial judgment or settlement by intentionally
misleading opposing counsel, judges, and juries. (Id. ¶¶ 103-06.) In contrast, in cases where
Plaintiff was able to bring evidence of alternative exposure, Plaintiff often won defense verdicts
or was found to have a relatively low percentage of fault, resulting in lower payments to
Defendants’ clients. (Id. ¶ 107.)
IV.
Alleged Specific Examples of Racketeering Conduct
A. The Kelemen Case
Plaintiff alleges that on January 24, 2008, Defendants filed an asbestos-mesothelioma
complaint against Plaintiff and several other non-bankrupt companies in Los Angeles County
Superior Court. (Id. ¶¶ 111-12.) Simon took the deposition of one of the other non-bankrupt
company’s employees. (Id. ¶ 114.) Plaintiff alleges that the Firm, or someone acting at the
direction of the Firm, took a deposition of Plaintiff’s employee in Chicago. (Id. ¶ 115.)
Defendants won a jury verdict in October 2009 for $30 million with Plaintiff found to be 70% at
fault, and Plaintiff settled the case in December 2011. (Id. ¶¶ 116-17.) In January 2012,
Defendants negotiated with Plaintiff’s lawyers, located in Illinois, regarding the settlement terms,
and ultimately, Plaintiff paid the settlement amount to Defendants using interstate wires. (Id. ¶¶
118-19.) Plaintiff contends that, in litigation, Defendants represented that no bankruptcy trust
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claims had been filed and that their clients had no alternative exposure, however, Defendants’
clients had filed 12 bankruptcy trust claims, four of which they filed before the jury rendered a
verdict in the tort litigation. (Id. ¶¶ 120-21.) Defendants also provided false information in
discovery transmitted through interstate wires, including interrogatory responses that stated that
their client had never worked with another company’s asbestos product and work histories that
showed exposure only to non-bankrupt companies’ products. (Id. ¶¶ 124-26.) Defendants
knowingly filed these false discovery responses and purposefully did not supplement those
responses, even though their clients were pursuing bankruptcy trust claims that directly
contradicted the assertions in their responses. (Id. ¶¶ 127-28, 141.)
Plaintiff claims that Defendants directed their client to testify at his May 2008 deposition
exclusively about products associated with non-bankrupt companies and to state that he had not
worked with certain products, despite the fact that Defendants, or those acting under their
supervision, were pursuing bankruptcy trust claims based on proof of their client’s exposure to
those products. (Id. ¶¶ 136-38.) Before trial, Defendants moved to exclude alternative
exposures and made false representations at trial that their client had not been exposed to
products from non-bankrupt companies even though their client had already filed four
bankruptcy trust claims. (Id. ¶¶ 147-50.) Plaintiff alleges that these misrepresentations caused
Plaintiff to alter its defense strategy, increase its defense costs, and ultimately suffer an adverse
verdict. (Id. ¶¶ 152.) Plaintiff alleges that Defendants continued to misrepresent their client’s
exposure history in post-trial filings and appellate litigation, all while their client continued to
file new bankruptcy trust claims. (Id. ¶¶ 153-55.)
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B. The Geist Case
On March 3, 2010, Defendants filed an asbestos-mesothelioma complaint against
Plaintiff and several other companies, only one of which was bankrupt, in Los Angeles County
Superior Court. (Id. ¶¶ 159-60.) The Lawyer Defendants, or those acting under their
supervision, took the deposition of Plaintiff’s employee in Chicago. (Id. ¶ 162.) In October
2010, the court entered a verdict in favor of Geist, and Defendants settled the case on appeal.
(Id. ¶ 163.) Plaintiff alleges that Defendants’ discovery responses did not disclose alternative
exposure, even though Geist had filed bankruptcy trust claims asserting exposure to other
products containing “more potent asbestos.” (Id. ¶¶ 164-65.) As in the Kelemen case,
Defendants filed false interrogatory responses indicating that their client had no alternative
exposure history all while pursuing bankruptcy claims based on alternative exposures. (Id. ¶¶
166-70.) Geist similarly denied alternative exposure in his deposition, where Firm lawyers
represented him. (Id. ¶¶ 170-72.) Firm lawyers handled both Geist’s bankruptcy claims and the
tort litigation in which he denied alternative exposure. (Id. ¶¶ 174-76.) Plaintiff alleges that
Defendants knowingly, or with reckless disregard for the truth, concealed the existence of their
client’s alternative exposure history from Plaintiff and the court, causing Plaintiff to expend
unnecessary sums at trial and to suffer an adverse verdict. (Id. ¶¶ 178-86.)
C. The Lange Case
On August 22, 2008, Defendants filed an asbestos-mesothelioma complaint against
Plaintiff and several other non-bankrupt companies in Los Angeles County Superior Court. (Id.
¶¶ 187-88.) Defendants dismissed Plaintiff from the case in January 2010 in exchange for
waiver of costs, but only after Plaintiff had expended substantial defense costs. (Id. ¶ 191.)
Plaintiff alleges that Defendants provided false information in discovery transmitted through
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interstate wires, including interrogatory responses that misrepresented their client’s exposure
history and directly contradicted their client’s bankruptcy claim filings. (Id. ¶¶ 192-95.)
Additionally, in Lange’s deposition, he claimed that he could not remember being exposed to a
certain brand of boiler, despite the fact that Lawyer Defendants later filed bankruptcy trust
claims based on exposure to that particular brand of boiler. (Id. ¶¶ 197-98.) After the
termination of the tort litigation, Defendants filed several bankruptcy claims that relied on
exposure histories that contradicted Defendants’ representations in the tort litigation. (Id. ¶¶
199-202.)
D. The White Case
On May 17, 2006, Defendants filed an asbestos-mesothelioma complaint against Plaintiff
and several other non-bankrupt companies in state court in Texas. (Id. ¶¶ 203-04.) The Lawyer
Defendants were lead counsel and Simon took his client’s deposition personally as well as the
deposition of Plaintiff’s employee in Chicago. (Id. ¶¶ 206-07.) Defendants dismissed Plaintiff
from the case in April 2007 in exchange for waiver of costs, but only after Plaintiff had expended
substantial defense costs. (Id. ¶ 208.) Plaintiff alleges that Defendants provided false
information in discovery transmitted through interstate wires, including interrogatory responses
that misrepresented their client’s exposure history and responses that failed to include exposures
for which White later brought bankruptcy claims. (Id. ¶¶ 210-14.) Shortly after Defendants
dismissed the case, they or the Early firm filed bankruptcy trust claims for White, and these
claims included exposure histories that Defendants had failed to disclose in the tort litigation.
(Id. ¶¶ 221-25.)
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E. The Hill Case
On July 20, 2012, Defendants filed an asbestos-mesothelioma complaint against Plaintiff
and several other non-bankrupt companies in state court in Los Angeles. (Id. ¶¶ 227-28.) The
case was later removed to federal court in October 2012. (Id. ¶ 229.) Defendants represented
Hill at his deposition in January 2013, where he denied being exposed to products other than
Plaintiff’s, although weeks later, in February 2013, he signed an affidavit in relation to a
bankruptcy claim indicating that he had been exposed to other asbestos-containing products. (Id.
¶¶ 231-34.) Plaintiff alleges that Defendants procured this affidavit and concealed it from
Plaintiff and the court in the federal tort litigation for over a year, until they finally produced the
affidavit and five others in January 2014. (Id. ¶¶ 235-39.) Plaintiff won a defense verdict at trial
in November 2014, which Plaintiff alleges confirms that when Defendants provided truthful
information to Plaintiff in litigation, Plaintiff achieved materially better results than in cases
where Defendants provided false information. (Id. ¶¶ 240-42.) Plaintiff also contends that
Defendants concealed their client’s exposure history from their own expert, which could have
resulted in an inaccurate expert report had they not been forced to update their expert when they
produced the affidavit relating to the bankruptcy claims. (Id. ¶¶ 243-47.)
F. The Heckelsberg Case
On June 21, 2010, Defendants filed an asbestos-mesothelioma complaint against Plaintiff
in state court in Philadelphia. (Id. ¶¶ 250, 52.) Defendants served the complaint on Plaintiff’s
registered agent in Pennsylvania, and the agent transmitted the complaint through interstate wires
to Plaintiff in Illinois. (Id. ¶ 251.) The Heckelsberg trial was bifurcated into liability and
damages phases, and the liability phase was tried to a court while the damages phase was tried to
a jury. (Id. ¶ 254.) At trial, Defendants played two video depositions of Plaintiff’s employees,
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both of which were taken in Chicago. (Id. ¶ 256.) In July 2011, the jury found for Defendant’s
client in the amount of $1.24 million, and Plaintiff paid its share of these damages in August
2011 via a check transported from Plaintiff’s office in Illinois to Defendants’ offices via
interstate mail. Plaintiff alleges that Defendants provided false information in discovery
transmitted through interstate wires, including interrogatory responses that misrepresented their
client’s exposure history and responses that failed to include exposures for which their client
later brought bankruptcy claims. (Id. ¶¶ 261-65.)
G. The Leroy Eisler Case
On March 9, 2010, Defendants filed an asbestos-mesothelioma complaint against
Plaintiff and other non-bankrupt companies in Los Angeles County Superior Court. (Id. ¶¶ 268,
270.) On April 8, 2010, Eisler reached a settlement agreement with Garlock, another company
that produced asbestos-containing products, in which Eisler repeated allegations that he had been
exposed to asbestos from Garlock’s products. (Id. ¶ 272.) On the same day, Firm attorneys
prepared or signed their client’s discovery responses in Plaintiff’s tort litigation, and the work
history sheet provided to Plaintiff falsely omitted any mention of exposure to Garlock products.
(Id. ¶¶ 273-76.) In his July 2010 deposition, where he was represented by Firm attorneys, Eisler
denied that he was exposed to Garlock products despite the Lawyer Defendants having already
executed a settlement with Garlock based on his exposure to their products. (Id. ¶¶ 279-80.)
Defendants ultimately dismissed Plaintiff from Eisler’s tort case in exchange for waiver costs.
(Id. ¶ 281.) After the conclusion of the tort case, Defendants filed several bankruptcy trust
claims on Eisler’s behalf that included proof of asbestos exposure that Defendants failed to
provide in discovery in the tort litigation. (Id. ¶¶ 282-85.)
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V.
Conclusion
In sum, Plaintiff alleges that Defendants’ material omissions and false representations
regarding their clients’ alternative exposures to asbestos caused Plaintiff to be unable to present
meritorious arguments or defenses and resulted in financial damage to Plaintiff. (Id. ¶¶ 288-91.)
Plaintiff alleges that Defendants knew or recklessly disregarded the falsity of their
representations and omissions and intended to deceive and defraud Plaintiff. (Id. ¶¶ 292-94.)
Plaintiff alleges that this scheme was “nationwide in scope.” (Id. ¶ 301.) In addition, Plaintiff
alleges that although the Firm has offices in Texas and California, they practice throughout the
country, including in Illinois, and the exemplar cases are from Texas, California, and
Pennsylvania. (Id.) According to Plaintiff, Defendants relied on interstate mail and wires to
serve court documents, send pleadings and discovery response, file motions with the court, and
communicate settlement demands with Plaintiff and its counsel, both located in Chicago. (Id. ¶¶
302-03.) Defendants also caused Plaintiff to make payments to Defendants’ clients via interstate
mail and wires. (Id. ¶ 306.) Plaintiff alleges that the fraudulent scheme was Defendants’ regular
course of business and that Defendants utilized the scheme in all cases that they brought against
Plaintiff, including cases filed against Plaintiff in the Northern District of Illinois. (Id. ¶ 309.)
LEGAL STANDARD
I.
Rule 12(b)(2)
A motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) tests
whether a federal court has personal jurisdiction over a defendant. See Fed. R. Civ. P. 12(b)(2);
Central States v. Phencorp. Reins. Co., 440 F.3d 870, 875 (7th Cir. 2006). In analyzing a Rule
12(b)(2) motion, courts may consider matters outside of the pleadings. See Purdue Research
Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Once the defendant
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“moves to dismiss to dismiss the complaint . . . for lack of personal jurisdiction, the plaintiff
bears the burden of demonstrating the existence of jurisdiction.” Id. Without the benefit of an
evidentiary hearing, the plaintiff “bears only the burden of making a prima facie case for
personal jurisdiction.” uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423-24 (7th Cir. 2010).
Under such circumstances, courts take “the plaintiff’s asserted facts as true and resolve any
factual disputes in its favor.” Id. Where the plaintiff fails to refute facts contained in the
defendant’s affidavit, however, courts accept those facts in the affidavit as true. GCIU-Employer
Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009).
II.
Rule12(b)(3)
In deciding a motion to dismiss for improper venue under Federal Rule of Civil
Procedure 12(b)(3), all allegations are taken as true, unless contradicted by the defendant’s
affidavits and the court may consider facts outside the pleadings. See Faulkenberg v. CB Tax
Franchise Sys., LP, 637 F.3d 801, 806 (7th Cir. 2011). Courts must resolve any conflicts in the
affidavits regarding relevant facts in the plaintiff’s favor. See Purdue Research Found. v. Sanofi–
Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The Seventh Circuit has cautioned that
“once the defendant has submitted affidavits or other evidence in opposition to the exercise of
jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative evidence
supporting the exercise of jurisdiction.” Id. at 783; see also Faulkenberg, 637 F.3d at 806
(noting that the same standards apply to improper venue as do a Rule 12(b)(2) dismissal). When
a defendant challenges venue, the plaintiff bears the burden of establishing proper venue. Nat’l
Tech. Inc. v. Repcentric Solutions, No. 13 C 1819, 2013 WL 3755052, at *5 (N.D. Ill. June 16,
2013) (citing Int’l Travelers Cheque Co. v. BankAmerica Corp., 660 F.2d 215, 222 (7th Cir.
1981)). If venue is improper, the court may either dismiss the suit or transfer it to a district in
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which the plaintiff could have filed it initially. See 28 U.S.C. § 1406(a). Venue can be proper in
more than one district. See Armstrong v. LaSalle Bank Nat’l Ass’n, 552 F.3d 613, 617 (7th Cir.
2009).
ANALYSIS
I.
Personal Jurisdiction
A. Applicable Legal Principles
“The plaintiff bears the burden of establishing personal jurisdiction when the defendant
challenges it.” N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014). Where, as
here, the federal statute in question does not provide “a special federal rule for personal
jurisdiction,” the law of the forum state provides the governing rule.1 Advanced Tactical
Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th Cir. 2014); see also N.
Grain Mktg., 743 F.3d at 491; Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). A “court’s
exercise of jurisdiction over the defendant must be authorized by the terms of the forum state’s
long arm statute and also must comport with the requirements of the Fourteenth Amendment’s
Due Process Clause.” Felland, 682 F.3d at 672 (citing Tamburo v. Dworkin, 601 F.3d 693, 700
(7th Cir. 2010)); see also N. Grain Mktg., 743 F.3d at 491-92.
1
RICO, the federal statute at issue in this case, does include a nationwide-service-of-process provision,
but it applies only if one defendant “resides, is found, has an agent or transacts his affairs” in the district
in which the suit is brought and the “ends of just require” that the other defendants be brought before the
same court. 18 U.S.C. § 1965(a)-(b). Plaintiff, citing no case law, mentions the RICO jurisdiction
provision in one sentence in a footnote, and accordingly, Plaintiff has waived the argument that
jurisdiction is proper under the RICO statute. See Harmon v. Gordon, 712 F.3d 1044, 1053 (7th Cir.
2013); United States v. Holm, 326 F.3d 872, 877 (7th Cir. 2003) (“It is not the obligation of this court to
research and construct the legal arguments open to parties,” and “perfunctory and undeveloped
arguments” are waived.); Sadighi v. Daghighfekr, 36 F. Supp. 2d 267, 273 (D.S.C. 1999) (Under §
1965(b), “nationwide service of process is not automatic; instead, a plaintiff has to demonstrate that the
ends of justice require the assertion of such process.”).
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“Illinois law permits its courts to exercise jurisdiction over a person ‘as to any cause of
action arising from . . . (1) [t]he transaction of any business within Illinois[.]’” N. Grain Mktg.,
743 F.3d at 491 (quoting 735 ILCS 5/2-209(a)(1)). The Illinois long-arm statute also contains a
catch-all provision, permitting a court to exercise personal jurisdiction “on any other basis now
or hereafter permitted by the Illinois Constitution and the Constitution of the United States.” 735
ILCS 5/2-209(c). “Thus, the [Illinois] statutory question merges with the constitutional one.” N.
Grain Mktg., 743 F.3d at 492. Because the Seventh Circuit has recognized that “there is no
operative difference between these two constitutional limits,” the key question is “whether the
exercise of personal jurisdiction would violate federal due process.” Mobile Anesthesiologists
Chicago, LLC v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir.
2010) (citations omitted); see also Russell v. SNFA, 2013 IL 113909, ¶¶ 32-33, 987 N.E. 2d 778,
785-86 (Ill. 2013) (“there have been no decisions . . . identifying any substantive difference
between Illinois due process and federal due process on the issue of a court’s exercising personal
jurisdiction over a nonresident defendant”).
The due process clause permits the exercise of personal jurisdiction over a nonresident
defendant as long as the defendant purposefully has established “minimum contacts” with the
forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). The “minimum
contacts” standard may be satisfied by personal jurisdiction that is either general or specific. See
Advanced Tactical Ordinance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th
Cir. 2014). The Court addresses each type of personal jurisdiction in turn.
B. General Jurisdiction
In their Motion to Dismiss, Defendants explicitly argued that the Court does not have
general jurisdiction over Defendants. (R. 25, Defs.’ Mot. to Dismiss, 7-8.) Plaintiff failed to
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respond to Defendants’ general jurisdiction argument and instead, in a footnote, asked the Court
for permission to conduct jurisdictional discovery if the Court ruled against Plaintiff on the
question of specific jurisdiction.2 As a result, Plaintiff has not only failed to meet its burden
regarding general jurisdiction, it has also waived any argument that this Court has general
jurisdiction over Defendants. Holm, 326 F.3d at 877 (“It is not the obligation of this court to
research and construct the legal arguments open to parties,” and “perfunctory and undeveloped
arguments” are waived.); Rose v. United States, 929 F. Supp. 305, 309 (N.D. Ill. 1996) (stating
that “the paucity of argument on this issue in her response brief essentially waives the claim”)
(citing Bakalis v. Golembeski, 35 F.3d 318, 326 n. 8 (7th Cir. 1994)); see also Foppa v.
Specialized Bicycle Components, Inc., No. 1:14-CV-1407-CAP, 2015 WL 11256937, at *2 (N.D.
Ga. Mar. 11, 2015) (dismissing for lack of personal jurisdiction because plaintiff’s response
“fail[ed] to mention . . . any evidence supporting jurisdiction”); Kruska v. Perverted Justice
Found. Inc., No. CV 08-0054-PHX-SMM, 2008 WL 5101919, at *1 (D. Ariz. Nov. 28, 2008)
(plaintiff did not establish personal jurisdiction because she “fail[ed] to address [d]efendant’s
jurisdictional arguments”).
Even if Plaintiff had not failed to make a general jurisdiction argument, the Court still
could not exercise general jurisdiction over Defendants. “To establish the minimum contacts
necessary to establish general personal jurisdiction, plaintiffs bear a high[ ] burden.” Avocent
Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1330 (Fed. Cir. 2008). “General jurisdiction
exists when a foreign corporation’s continuous corporate operations within a state [are] so
substantial and of such a nature as to justify suit against it on causes of action arising from
dealings entirely distinct from those activities.” Daimler, 134 S. Ct. at 749 (citations and
2
As discussed below, Plaintiff is not entitled to jurisdictional discovery.
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quotations omitted). The Supreme Court has identified two “paradigm all-purpose forums for
general jurisdiction” for a corporation: the state of the corporation’s principal place of business
or the state of its incorporation. Id. at 760. Absent these circumstances, a “court may assert
general jurisdiction over foreign . . . corporations to hear any and all claims against them when
their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at
home in the forum State.” Id. at 754 (citations and quotations omitted). The inquiry “is not
whether a foreign corporation’s in-forum contacts can be said to be in some sense ‘continuous
and systematic,’ it is whether that corporation’s affiliations with the State are so ‘continuous and
systematic’ as to render [it] essentially at home in the forum State.” Id. at 761. In fact, the
Supreme Court has made clear, that to “approve the exercise of general jurisdiction in every
State in which a corporation engages in a substantial, continuous, and systematic course of
business . . . is unacceptably grasping.” Id. at 757 (citations and quotations omitted). General
jurisdiction thus “calls for an appraisal of a corporation’s activities in their entirety, nationwide
and worldwide.” Id. at 762 n. 20. “A corporation that operates in many places can scarcely be
deemed at home in all of them.” Id.
Here, as noted above, Plaintiff does not ask the Court to find that it has general
jurisdiction over Defendants. Indeed, Plaintiff’s allegations do not meet the high burden
required for this Court to exercise general jurisdiction. (R. 34, Pl.’s Opp’n to Defs.’ Mot. to
Dismiss, 19 n. 3.) Based on the record, Illinois is not Defendants’ “paradigm all-purpose forum”
because the Defendant Firm has a principal place of business in Texas and is incorporated in
Texas. Daimler, 134 S. Ct. at 760. Further, Defendants’ contacts with Illinois are not “so
continuous and systematic as to render [it] essentially at home” in Illinois. Id. at 761. Plaintiff
does not dispute that Defendants do not maintain offices in Illinois, none of its lawyers reside or
17
are licensed to practice in Illinois, it maintains no records in Illinois, and that the Firm owns no
property in Illinois. While Defendants do occasionally engage in litigation in Illinois or litigate
against corporations based in Illinois, these contacts are not sufficient to confer general
jurisdiction on Defendants in Illinois, especially since, as Defendants note, the Firm has only
filed 4% of its total cases in Illinois. (R. 39, Defs.’ Reply in Supp. of Mot. to Dismiss, 4); see
also Meyer v. Hanft Fride, No. 11 C 4126, 2012 WL 1050296, at *2 (N.D. Ill. Mar. 28, 2012)
(finding that New Jersey law firm was not subject to general jurisdiction in Illinois because firm
did not have Illinois offices or residents and firm’s litigation activity in Illinois was only a small
part of its practice). Simply put, just because Defendants occasionally do business in Illinois,
does not mean they are “at home” in Illinois. Accordingly, Defendants are not subject to general
jurisdiction in Illinois.
C. Specific Jurisdiction
“Unlike general personal jurisdiction, a court’s exercise of specific jurisdiction requires
that the defendant’s contacts with the forum state relate to the challenged conduct.” Felland, 682
F.3d at 673. Three requirements exist to establish specific jurisdiction: “(1) the defendant must
have purposely availed himself of the privilege of conducting business in the forum state or
purposefully directed his activities at the state; (2) the alleged injury must have arisen from the
defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with
traditional notions of fair play and substantial justice.” Felland, 682 F.3d at 673 (citations
omitted). The Supreme Court has cautioned, that not just any contacts with the forum state will
suffice: “[f]or a State to exercise jurisdiction consistent with due process, the defendant’s suitrelated conduct must create a substantial connection with the forum State.” Walden, 134 S. Ct.
at 1121 (emphasis added). Moreover, contacts with the forum that are “random”, “fortuitous,” or
18
“attenuated,” or that result from the “unilateral activity of another party or third person” are not
sufficient to establish personal jurisdiction. Burger King, 471 U.S. at 475. Lastly, the
relationship between the defendant and the forum “must arise out of contacts that the defendant
himself creates with the forum. . .” Walden, 134 S. Ct. at 1122 (citations and quotations
omitted).
With this background, the Court turns to the parties’ arguments. Defendants argue that
this Court does not have personal jurisdiction over them because Plaintiff’s claims against
Defendants relate entirely to Defendants’ alleged conduct in cases litigated outside of Illinois,
namely in California, Texas, and Pennsylvania. Defendants argue that the Seventh Circuit has
resolved that an Illinois court cannot exercise personal jurisdiction over a defendant law firm in
relation to out-of-state litigation, even if the law firm interacts with parties in the forum state in
the course of that litigation, because contacts with a forum state that are incidental to litigation in
another state are insufficient to create personal jurisdiction. See Wallace v. Heron, 778 F.2d 391,
393-95 (7th Cir. 1985).
In response, Plaintiff argues Defendants “expressly aimed” their activities at Illinois by
directing communications that they knew contained misrepresentations to Plaintiff in Illinois and
caused injury to Plaintiff in Illinois. Plaintiff asserts that Wallace is distinguishable because in
that case, the attorney defendant had contacts with the forum state in relation to a single lawsuit
and his allegedly tortious conduct in that state was limited, whereas here, Plaintiff alleges
Defendants engaged in broader and more consistent misconduct in Illinois related to a series of
lawsuits. Finally, Plaintiff argues that personal jurisdiction on Defendants here is fundamentally
fair because Defendants are a national law firm that frequently litigates cases and represents
clients in Illinois.
19
Given the parties’ focus on the “purposeful direction” prong, the Court turns to this issue
first. Where, as here, the plaintiff alleges an intentional tort, the purposeful-direction inquiry
“focuses on whether the conduct underlying the claims was purposely directed at the forum
state.” Tamburo v. Dworkin, 601 F.3d 693, 702 (7th Cir. 2010). In Calder v. Jones, 465 U.S.
783 (1984), the Supreme Court laid out three requirements for determining whether conduct was
purposefully directed at the forum state: “(1) intentional conduct (or ‘intentional and allegedly
tortious’ conduct); (2) expressly aimed at the forum state; (3) with the defendant’s knowledge
that the effects would be felt—that is, the plaintiff would be injured—in the forum state.”
Felland, 682 F.3d at 674–75 (quoting Tamburo, 601 F.3d at 703) (discussing Calder factors). “If
the plaintiff makes these three showings, he has established that the defendant ‘purposefully
directed’ his activity at the forum state.” Id. at 675. “The cases that have found express aiming
have all relied on evidence beyond the plaintiff’s mere residence in the forum state.” Mobile
Anesthesiologists, 623 F.3d at 447. In other words, the Seventh Circuit has found personal
jurisdiction only where there is both a “forum-state injury” and “something more” reflecting
“tortious conduct specifically directed at the forum.” Tamburo, 601 F.3d 706; compare Coté v.
Wadel, 796 F.2d 981, 984 (7th Cir. 1986) (“The only significant connection between the suit and
Wisconsin is that the plaintiff lives there; and you cannot get jurisdiction over a nonresident just
by showing that you are a resident and would prefer to sue in your own state’s courts.”)
Here, Plaintiff has met the first and third requirements for the purposeful direction test.
As alleged in the complaint, Defendants intentionally directed false discovery responses and
other communications to Plaintiff and its counsel in Illinois, which suffices to establish
“intentional and allegedly tortious conduct.” Likewise, Defendants certainly knew the alleged
harm would be felt in Illinois because Defendants were aware that Plaintiff resides in Illinois.
20
The main point of dispute thus concerns the second requirement—whether Defendants’ conduct
was “expressly aimed” at Illinois.
Plaintiff argues that Defendants have created sufficient minimum contacts with Illinois
by directing false communications to Plaintiff in Illinois and accepting payments from Plaintiff
in Illinois as part of their allegedly fraudulent scheme. In support of this argument, Plaintiff cites
to cases in which courts have exercised personal jurisdiction over out-of-state defendants who
allegedly engaged in fraudulent RICO schemes that involved directing false mailings or
communications at plaintiffs in Illinois. Plaintiff cites Master Tech Prod., Inc. v. Smith, 181 F.
Supp. 2d 910 (N.D. Ill. 2002), in which an Illinois company sued a Texas company for
fraudulently extracting confidential information under the guise of negotiations to acquire the
Illinois company. The court found that it could exercise personal jurisdiction over the Texas
company because the company’s employees placed telephone calls to the Illinois company in
furtherance of the fraudulent scheme. Id. at 912. Plaintiff also cites to FMC Corp. v. Varonos,
892 F.2d 1308 (7th Cir. 1990), in which an Illinois company brought a RICO suit against a
Greek citizen alleging that the citizen faxed fraudulent invoices and requests for monies to the
Illinois company. The court held that personal jurisdiction was appropriate because the
defendant sent fraudulent communications to Illinois to “effectuate her scheme to defraud” the
Illinois company and thus “should have foreseen that she could be required to answer for her
actions in Illinois. Id. at 1313.
The Court, however, finds the Seventh Circuit precedent in Wallace more compelling
than the cases cited by Plaintiff. In Wallace, the plaintiff, an Indiana resident, sued the
defendants, three California attorneys, in Indiana for malicious prosecution based on a prior
lawsuit the defendants litigated against the plaintiff in California. Wallace v. Herron, 778 F.2d
21
391, 392 (7th Cir. 1985). The plaintiff argued that an Indiana district court could properly
exercise personal jurisdiction because the defendant lawyers “served interrogatories, requested
production of documents, and caused the plaintiff to respond to five complaints in Indiana where
the plaintiff reside[d].” Id. at 394. The Seventh Circuit held that the defendants lacked the
necessary minimum contacts with Indiana because all the allegedly malicious litigation actions
the defendants directed at Indiana were done “on behalf of their clients in a California court
pursuant to a California lawsuit.” Id. The court explained that “it would be unreasonable to
require the defendants to appear in Indiana to defend this suit on the basis of such attenuated
contacts.” Id. The court distinguished the case from Calder, explaining that in Calder,
California was the focal point of the entire dispute because the suit grew out of an article the
defendant wrote about a California resident, based on California sources, with a reputational
harm felt in California. Id. at 395. In contrast, the court reasoned that in the case before it, the
only “arguable contacts with Indiana were the legal papers” served in Indiana on behalf of
California clients in relation to a California lawsuit. Id.
Other courts, in several jurisdictions, have similarly refused to exercise specific
jurisdiction over attorneys for their forum state contacts related to out-of-state litigation, even
when the attorneys were representing clients residing in the forum state. In Coté, 796 F.2d at
983–84, for example, the plaintiff, a Wisconsin resident, hired the defendant, a Michigan lawyer,
to represent her in a lawsuit in Michigan state court and the lawyer failed to prosecute her suit.
Id. The Seventh Circuit held that personal jurisdiction did not exist in Wisconsin, even though
the lawyer directed calls and letters to his client in Wisconsin, because the actions at issue in her
suit—the defendant’s failure to prosecute her initial lawsuit—all occurred in Michigan. The
court explained that the “only significant connection between the suit and Wisconsin is that the
22
plaintiff lives there” and the “letters and phone calls that passed between” the defendant and the
plaintiff were “not enough to close the gap.” Id.
Similarly, in Wartsila NSD N. Am., Inc. v. Hill Int’l, Inc., 269 F. Supp. 2d 547, 554–55
(D.N.J. 2003), a manufacturer brought an action against a consulting firm, and the firm filed a
complaint against the manufacturer’s attorney in relation to the attorney’s representation of the
manufacturer in a North Carolina arbitration between the manufacturer and the consulting firm.
The consulting firm alleged that the attorney acted “recklessly and negligently” by allowing his
New Jersey client’s witness to submit documents to and testify in front of the arbitration panel
without verifying the reliability of the documents or testimony. Id. Before the arbitration
hearing, the attorney exchanged letters with the New Jersey witness in which the attorney
described the key issues and asked the witness to provide videos and photographs. Id. The court
found that the attorney’s “contacts with New Jersey did not provide a basis for exercising
specific personal jurisdiction over him” because while the letters to New Jersey dealt generally
with the arbitration, they were only tangential to the specific tortious conduct alleged by the
consulting firm, all of which occurred at the arbitration in North Carolina. Id. See also Mayes v.
Leipziger, 674 F.2d 178, 184–85 (2d Cir. 1982) (no purposeful activity to justify jurisdiction in
New York over California law firm solicited by New York client for representation in California
when contacts consisted of communications to New York by mail and telephone); Sher v.
Johnson, 911 F.2d 1357, 1362, 366 (9th Cir. 1990) ( “[o]ut-of-state legal representation does not
establish purposeful availment of the privilege of conducting activities in the forum state, where
the law firm is solicited in its home state and takes no affirmative action to promote business
within the forum state.”).
23
The Court finds Wallace,3 as well as the other cases discussed above, more persuasive
than the cases cited by Plaintiff because Wallace, unlike the cases cited by Plaintiff, directly
addresses whether Illinois contacts related to litigation in other states for clients in other states
can create personal jurisdiction in Illinois. Plaintiff, unable to cite any cases in this circuit that
found litigation-related contacts sufficient to justify the exercise of personal jurisdiction,4
attempts to distinguish Wallace, arguing that it is different than this case because the defendant’s
conduct was more limited and related to only one case, whereas here, there were multiple
underlying lawsuits. Plaintiff also notes that in Wallace “the bulk of the alleged wrongful
prosecution took place in another state.”
Like in Wallace, however, Plaintiff here has sued an out-of-state law firm for an
intentional tort—there, malicious prosecution, here, a RICO fraud scheme—that centered on outof-state litigation. Although the defendants in both Wallace and this case directed litigation
related documents that furthered the alleged intentional torts at plaintiffs in the forum state, the
focal point of the intentional tort remained in the state where the underlying litigation was based.
Thus, like in Wallace, here, the only suit-related contacts with Illinois were “legal papers served”
in Illinois, but, to use Plaintiff’s words, “the bulk of the alleged” tort occurred in the California,
Texas, and Pennsylvania courts where Defendants were litigating their asbestos claims against
Plaintiff. It is in those states, not Illinois, that Defendants took depositions of their clients, tried
cases against Plaintiff, and won verdicts against it. Unlike FMC Corp. and Master Tech, where
3
The Court’s reliance on Wallace is bolstered by the Seventh Circuit’s recent endorsement of Wallace’s
more narrow interpretation of Calder’s purposely directed test. Mobile Anesthesiologists Chicago, LLC
v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 445 (7th Cir. 2010) (“We view Wallace
as a correct statement of the standard set down by the Supreme Court.”)
4
Plaintiff cites to one Fifth Circuit case, Wein Air Alaska, Inc. v. Brandt, 195 F. 3d 208 (5th Cir. 1999),
for the proposition that a court may exercise personal jurisdiction based on an attorney defendants’
litigation-related contacts. (R. 34, Pl.’s Opp’n to Defs.’ Mot. to Dismiss at 15.)
24
the defendants expressly aimed fraudulent communications that were at the heart of a fraudulent
scheme, here, like in Wallace, any discovery responses Defendants filed in Illinois were done
“on behalf of their clients in a [out-of-state] court pursuant to a [out-of-state] lawsuit.” Id. at
394. Those discovery responses were incidental to the claims and lawsuits that were centered
entirely in other states, and “they are not indicative of any desire to do business in [Illinois] and
do not suffice to show purposeful availment or minimum contacts.” Exponential Biotherapies,
Inc. v. Houthoff Buruma N.V., 638 F. Supp. 2d 1, 9 (D.D.C. 2009) (dismissing case for lack of
jurisdiction in client’s home forum over Dutch law firm accused of breach of fiduciary duty in
suit related to legal work performed in Netherlands).
Ultimately, as in Wallace, the intentional tort alleged here was not focused in Illinois, it
was focused in out-of-state courts in California, Texas, and Pennsylvania. “Forum-state injury”
is not enough. Tamburo, 601 F.3d 706. “Bad financial consequences to a firm in Illinois . . . are
not the same as a tortious injury occurring to the firm in Illinois.” Macey & Aleman v. Simmons,
No. 10-C-6646, 2012 WL 527526, at *4 (N.D. Ill. Feb. 15, 2012). Here, while Plaintiff suffered
financial consequences in Illinois, the tortious injury Plaintiff alleges occurred in the states where
Defendants were litigating asbestos claims against Plaintiff, not in Illinois. For purposes of
specific jurisdiction, Defendants’ contacts with Illinois in other litigation are irrelevant, only
Defendants’ contacts related to this suit matter. Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014)
(“defendant’s suit-related conduct must create a substantial connection with the forum [s]tate”).
As the analogous case law demonstrates, contacts that are incidental to litigation at the heart of a
plaintiff’s claim—whether it is calls and letters as in Wartsila, arbitration preparation as in Coté,
or discovery responses as in Wallace and here—are not sufficient to show that a defendant
attorney “expressly aimed” his conduct at that state or purposefully availed himself of the
25
privilege of doing activities there. Here, like in Wallace, Defendants’ alleged “tortious conduct
[was] specifically directed” not at Illinois, but at the states were they filed lawsuits and litigated
those suits to harm Plaintiff.
Plaintiff has thus failed to establish that Defendants expressly aimed their conduct at
Illinois, so it has failed to establish that the Court has personal jurisdiction over Defendants.5
Defendants’ motion to dismiss is accordingly granted.
D. Jurisdictional Discovery
Plaintiff also requests in one sentence in a footnote that, if the Court finds that it does not
have specific jurisdiction over Defendants, it should grant jurisdictional discovery to discern the
full scope of Defendants’ personal jurisdiction contacts with Illinois. (R. 34, Pl.’s Opp’n to
Defs.’ Mot. to Dismiss, 19 n. 3.) Plaintiff cites no case law and provides no factual support for
its request for jurisdictional discovery. Cursory arguments raised in footnotes are deemed
waived. See Harmon, 712 F.3d at 1053; Long v. Teachers’ Ret. Sys. of Ill., 585 F.3d 344, 349
(7th Cir. 2009); Price v. City of Chicago, No. 16-CV-8268, 2017 WL 36444, at *8 (N.D. Ill. Jan.
4, 2017). Accordingly, Plaintiff has waived the argument that jurisdictional discovery is
warranted.
Even if Plaintiff had not waived that argument, Plaintiff’s allegations and briefing
demonstrate that jurisdictional discovery is not necessary here. The Seventh Circuit has held
that, “[a]t a minimum, the plaintiff must establish a colorable or prima facie showing of personal
jurisdiction before discovery should be permitted.” Central States, Southeast and Southwest
Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000). When
5
Because the Court finds that the first prong of the specific jurisdiction analysis is not met here, it does
not need to consider whether Plaintiff established the second prong or whether Defendants established the
third prong. Indag GmbH & Co. v. IMA S.P.A, 150 F. Supp. 3d 946, 967 n. 8 (N.D. Ill. 2015).
26
the lack of personal jurisdiction is clear, jurisdictional discovery would serve no purpose and
should not be permitted. Sanderson v. Spectrum Labs, Inc., 248 F.3d 1159 (Table), 2000 WL
1909678, *3 (7th Cir. 2000) (citations omitted).
With respect to specific jurisdiction,6 there is no basis in the record to suspect that
discovery would identify any other relevant contacts between Defendants and Illinois. Given
that it was a defendant in the underlying out-of-state lawsuits, Plaintiff presumably was aware of
all Defendants’ contacts with Illinois in relation to those lawsuits and has already alleged those
contacts in its Complaint. Accordingly, no discovery is needed with regard to specific
jurisdiction.
With respect to discovery regarding general jurisdiction, Plaintiff has not made even a
colorable showing that Defendants are subject to general jurisdiction in Illinois. Plaintiff has not
argued for general jurisdiction,7 and Plaintiff’s allegations and briefing demonstrate that general
jurisdiction does not exist. As the Supreme Court has made clear, to “approve the exercise of
general jurisdiction in every State in which a corporation engages in a substantial, continuous,
and systematic course of business . . . is unacceptably grasping.” Daimler, 134 S. Ct. at 757
(citations and quotations omitted). Here, the Defendant Firm has a principal place of business in
Texas and is incorporated in Texas, the firm owns no property in Illinois and retains no records
here, none of the Firm’s lawyers are licensed in Illinois, and the individual defendants do not
reside in Illinois. Plaintiff argues that the Defendant Firm has filed “44 cases in Illinois courts,”
but just because Defendants’ national practice occasionally causes it to litigate cases in Illinois
does not mean that Defendants’ contacts with Illinois are “so continuous and systematic as to
6
Although not entirely clear in its brief, Plaintiff’s request for discovery appears to focus on general
jurisdiction not specific jurisdiction. The Court nevertheless addresses specific jurisdiction.
7
Plaintiff admits that it has not “ask[ed] the Court to find that it has general jurisdiction over
Defendants.” (R. 34, Pl.’s Opp’n to Defs.’ Mot. to Dismiss at 19.)
27
render [it] essentially at home” in Illinois. Id. at 761, 762 (“A corporation that operates in many
places can scarcely be deemed at home in all of them.”); see also Meyer, 2012 WL 1050296, at
*2 (finding New Jersey firm was not subject to general jurisdiction in Illinois because firm did
not have Illinois offices or residents and firm’s litigation activity in Illinois was a small part of its
practice). Plaintiff has thus failed to make a prima facie case for general jurisdiction, and
jurisdictional discovery is inappropriate. Central States, 230 F.3d at 946; see also RGT
Holdings, Inc. on behalf of Ticket Reserve, Inc. v. Harmon, No. 16-CV-05457, 2017 WL 959020,
at *4 (N.D. Ill. Mar. 13, 2017) (“Without such a prima facie case, discovery would only harass
the defendants and force the Court to preside over discovery in a case over which it lacks
jurisdiction.”)
In addition, in Plaintiff’s one sentence request for discovery, it does not articulate what
discovery it seeks, why such discovery is necessary, or how such discovery could advance its
arguments. Plaintiff has failed to meet its burden regarding discovery. As such, the Court denies
Plaintiff’s request for jurisdictional discovery.
E. Venue
Even if the Court had concluded that Plaintiff satisfied its burden to make a prima facie
showing of personal jurisdiction, the Court would still dismiss this case for improper venue.
“The plaintiff bears the burden of demonstrating that the venue it has chosen is proper.”
Harris v. comScore, Inc., No. 11 C 5807, 2011 WL 4738357, *1 (N.D. Ill. Oct.7, 2011). Neither
party argues that the RICO venue provision, 18 U.S.C. § 1965(a), applies here, so the general
venue statute governs. Venue is proper “in a judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(b)(2). The test for a
determination of proper venue under Section 1391(b)(2) “is not whether a majority of the
28
activities pertaining to the case were performed in a particular district, but whether a substantial
portion of the activities giving rise to the claim occurred in a particular district.” See Jackson v.
N’Genuity Enters., Co., No. 14 C 2197, 2014 WL 4269448, at *6–7 (N.D. Ill. Aug. 28, 2014).
“The test for venue under § 1391 looks not to the defendant’s contacts with the forum, but the
location of the events giving rise to the cause of action. Master Tech Prod., Inc. v. Smith, 181 F.
Supp. 2d 910, 914 (N.D. Ill. 2002). Courts in this district generally hold that the locus of a
plaintiff’s economic harm is an insufficient basis for venue under § 1391(b)(2). Bartlett v.
Bartlett, No. 16 CV 6595, 2017 WL 106043, at *3 (N.D. Ill. Jan. 11, 2017).
Here, Plaintiff has not demonstrated that venue in this district is proper. Assuming
Plaintiff’s allegations as true, a substantial portion of the activities giving rise to Plaintiff’s claim
did not occur in this district. The only activities giving rise to the claim that occurred in this
district were Plaintiff’s receipt of discovery responses and communications with Defendants
about the litigation. All the other activities giving rise to Plaintiff’s claim—the drafting of
Defendants’ discovery responses, Defendants’ clients’ depositions, Defendants’ clients’ in-court
testimony, Defendants’ interactions with and counseling of their clients, Defendants’ filing of
lawsuits, trials resulting in verdicts against Plaintiff, Defendants’ in-court false assertions,
Defendants’ alleged collaboration with other law firms—occurred in other districts. Here, even
though there were some activities giving rise to this claim that occurred in this district, those
activities were “more tangential than substantial,” and are in insignificant when compared to the
consistent and substantial activities that occurred in other districts. Circle Grp. Internet, Inc. v.
Atlas, Pearlman, Trop & Borkson, P.A., No. 01 C 7338, 2002 WL 1559637, at *3 (N.D. Ill. July
16, 2002) (finding venue improper in this District because the meetings and telephone, fax, mail
and email communications between the Illinois plaintiff and the defendants were “more
29
tangential than substantial and are thus insufficient to establish venue here”). As such, venue in
this District is not proper.
CONCLUSION
For these reasons, the Court grants Defendants’ motion to dismiss for lack of personal
jurisdiction without prejudice to refile in a district that has personal jurisdiction over Defendants.
Dated: March 23, 2017
ENTERED
______________________________
AMY J. ST. EVE
United States District Court Judge
30
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