Price v. Schlee & Stillman, LLC

Filing 25

MEMORANDUM Opinion and Order: For the reasons set forth herein, defendant's motion to dismiss 17 is granted, and this action is dismissed without prejudice to plaintiff refiling in an appropriate forum. Civil case terminated. Signed by the Honorable Thomas M. Durkin on 5/26/2017:Mailed notice(srn, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BONNIE PRICE,
PLAINTIFF,
v.
SCHLEE & STILLMAN, LLC,
DEFENDANT.

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No. 16 C 8020
Judge Thomas M. Durkin

MEMORANDUM OPINION AND ORDER
Bonnie Price, a Kentucky resident, brings this Fair Debt Collection Practices
Act (“FDCPA”) suit against the Maryland-based debt collection firm of Schlee &
Stillman LLC. The defendant moves to dismiss pursuant to Rule 12(b)(2) for lack of
personal jurisdiction. In the alternative, the defendant seeks dismissal or transfer
pursuant to Rule 12(b)(3), arguing that venue in this district is improper. For the
reasons set forth below, the motion is granted in part and denied as moot in part.
The case is dismissed without prejudice to being refiled in the proper district.
Background
The facts relevant to this motion are as follows. Plaintiff, a senior citizen,
resides in Kentucky. R. 1 (Compl.) ¶ 3. The defendant is a Maryland limited liability
company and debt collector. Id. ¶ 4. Its headquarters are in Maryland, and it has
satellite offices in Massachusetts and Michigan. See R. 20 (Response), Ex. A. The
defendant has no offices in Illinois, but it does collect debts here, and is registered

as a foreign corporation with the Illinois Secretary of State. 1 R. 1 ¶ 5, Ex. A.
Further to its business in Illinois, the defendant has a registered agent in
Springfield, the state’s capital, which sits in the federal jurisdiction of the Central
District of Illinois. Id.
In the fall of 2015, Plaintiff received two letters from the defendant
attempting to collect a debt she allegedly owed to Citizen’s Bank. R. 1 ¶ 6, Ex. B.
Plaintiff sought assistance responding to the letters from the Legal Advocates for
Seniors and People with Disabilities (LASPD), a Chicago-based not-for-profit legal
aid provider. Id. On November 19, 2015, an attorney from LASPD informed the
defendant by letter (via facsimile) that Plaintiff was represented by counsel, that
she refused to pay any unsecured debts on account of her financial circumstances,
and that the defendant should cease all communications with Plaintiff. Id. ¶ 7,
Ex. C. Several months later, however, the defendant sent another collection letter to
Plaintiff’s home in Kentucky from its office in Massachusetts. Id. ¶ 8, Ex. D. This
letter, which Plaintiff alleges caused her confusion and distress, is the basis of her
two-count lawsuit. Id. ¶ 11.
Standard
When a defendant moves to dismiss a complaint for lack of personal
jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the
burden of demonstrating that jurisdiction exists. See Tile Unlimited, Inc. v. Blanke

The defendant has also registered as a foreign corporation in New
Hampshire, Virginia, Connecticut, Texas, Florida, New Jersey and Washington. See
R. 20, Ex. A.

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Corp., 47 F. Supp. 3d 750, 755 (N.D. Ill. 2014) (citing Purdue Res. Found. v. Sanofi–
Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003)). While ultimately a plaintiff
must carry that burden by a preponderance of the evidence, at this stage, she is
only required to make a prima facie showing. See Strabala v. Zhang, 318 F.R.D. 81,
108 (N.D. Ill. 2016) (citing Durukan Am., LLC v. Rain Trading, Inc., 787 F.3d 1161,
1163-64 (7th Cir. 2015); Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012)). To do
so, the plaintiff must allege facts supporting the reasonable inference that an out-ofstate defendant has “certain minimum contacts with [the forum] such that the
maintenance of the suit does not offend traditional notions of fair play and
substantial justice.” Int’l Shoe Co. v. State of Washington, Office of Unemployment
Comp. & Placement, 326 U.S. 310, 319 (1945). Courts have interpreted this
standard to mean that “‘[t]he defendant’s conduct and connection with the forum
State [must be] such that [it] should reasonably anticipate being haled into court
there.’” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (quoting World–
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). As with a Rule
12(b)(6) motion, the Court must “accept as true all well-pleaded factual allegations
and draw all reasonable inferences in favor of the plaintiff” when evaluating
personal jurisdiction. St. John’s United Church of Christ v. City of Chicago, 502
F.3d 616, 625 (7th Cir. 2007).
Discussion
There are two types of personal jurisdiction–general and specific. See
Strabala, 318 F.R.D. at 108 (citing authority). General personal jurisdiction exists

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“[i]f the defendant has ‘continuous and systematic’ contacts with a state. . . even if
the action is unrelated to those contacts.” N. Grain Mktg., LLC v. Greving, 743 F.3d
487, 492 (7th Cir. 2014) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 416 (1984)). A corporation’s contacts with a state are ‘continuous and
systematic’ if it is incorporated or headquartered there or if its “affiliations with the
State . . . render it essentially at home.” Daimler AG v. Bauman, 134 S. Ct. 746, 761
(2014) (citations and internal punctuation omitted). The Seventh Circuit has
cautioned that general jurisdiction “should not lightly be found.” Kipp v. Ski Enter.
Corp. of Wisc., 783 F.3d 695, 698 (7th Cir. 2015). Specific jurisdiction is likewise
narrowly defined. “To support an exercise of specific personal jurisdiction, the
defendant’s contacts with the forum state must directly relate to the challenged
conduct or transaction.” Bauman, 134 S. Ct. at 761. In other words, “[s]pecific
personal 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.” Id. (citing Burger King, 471 U.S. at 472).
Here, neither jurisdictional test is satisfied. There is no general jurisdiction
because the defendant is not incorporated or headquartered in Illinois, and it does
not have any other operations within the state that are so substantial as to render
it essentially at home here. 2 See Kipp, 783 F.3d at 698. That the defendant is

All of the authority Plaintiff cites in support of her argument for general
jurisdiction pre-date the Daimler decision. See Lefler v. Razor Capital, LLC, 13 C
2242, R. 34 (N.D. Ill. June 3, 2013); Brennon v. Nationwide Credit, Inc., 11 C 4309,

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registered as a foreign corporation and has a designated registered agent in the
state is, without more, insufficient to put the defendant on notice that it could be
haled into court here. See Perez v. Air & Liquid Sys. Corp., 2016 WL 7049153, at *67 (S.D. Ill. Dec. 2, 2016) (collecting circuit authority for the proposition that
“registering to do business or maintaining a registered agent is not enough to confer
general jurisdiction over a foreign corporation”). Indeed, after a search of the federal
docketing system, the Court was unable to find a single case in the Northern
District of Illinois other than this one where the defendant has been named as a
party. 3 While it may be true that the defendant transacts some business in Illinois,

R. 22 (N.D. Ill. Oct. 5, 2011); Barksdale v. GC Services Ltd. P’ship, 09 C 7309, R. 24
(N.D. Ill. May 6, 2010); Garrigan v. Midland Credit Mgmt., Inc., 09 C 3110, R. 39
(N.D. Ill. Mar. 9, 2010). The Seventh Circuit has recognized that Daimler “raised
the bar for this type of jurisdiction,” explaining that since Daimler, “more than the
‘substantial, continuous, and systematic course of business’ that was once thought
to suffice” is required. Kipp, 783 F.3d at 698 (citing Daimler, 134 S.Ct. at 760-61).
Now, courts may “exercise general jurisdiction only when ‘the continuous corporate
operations within a state [are] so substantial and of such a nature as to justify suit
... on causes of action arising from dealings entirely distinct from those activities.’”
Id. (quoting Diamler, 134 S.Ct. at 761) (emphasis in original). Because the cases on
which Plaintiff relies do not apply this standard, and also because they are
distinguishable on their facts, they are not persuasive support for Plaintiff’s
argument that general jurisdiction exists. See Lefler, 13 C 2242, R. 34 (the
defendants had been named in nearly 20 earlier-filed lawsuits in this district for
their debt collection practices); Brennon, 11 C 4309, R. 22 (at the time the suit was
filed the defendant was attempting to collect debts from hundreds of thousands of
Illinois consumers, including consumers residing this district); Barksdale, 09 C
7309, R. 24 (the defendant had an office in this district); Garrigan, 09 C 3110, R. 39
(the defendant had been named in approximately 45 earlier-filed lawsuits in this
district).
In deciding whether a plaintiff has met the prima facie standard for
establishing personal jurisdiction, courts are not limited to the pleadings and may
consider affidavits and other outside materials. Purdue Research Found. v. SanofiSynthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003); see also White v. Keely, 814 F.3d
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it has no offices or employees here, and Plaintiff, whose debt the defendant is
attempting to collect in Kentucky, has not alleged any other systematic or
continuous affiliation with the state such that the exercise of jurisdiction would
comport with traditional notions of fair play and substantial justice. See Daimler,
134 S. Ct. at 761-62; see also Perez, 2016 WL 7049153, at *8 (“it is inconsistent with
principles of due process for a corporation to be subject to general jurisdiction in
every place it does business” (quoting Genuine Parts Co. v. Cepec, 137 A.3d 123, 137
(Del. 2016))). Accordingly, general jurisdiction over the defendant is lacking.
Nor has the plaintiff made a prima facie showing that there is specific
jurisdiction in this case. As the defendant correctly states, “[t]hat Plaintiff sought
the assistance of legal aid attorneys located in Chicago . . . is the only alleged
connection to the chosen forum.” R. 17 at 1. Plaintiff argues that this connection is
enough to establish specific jurisdiction because, “for the purposes of this lawsuit,
Ms. Price effectively moved–telling Defendant that she could only be contacted
through the Chicago Legal Clinic’s LASPD program.” R. 20 at 11. This fiction will
not suffice to permit the case to proceed in this district. As previously noted, specific
jurisdiction exists when the defendant has purposefully directed its activities
toward the forum state and the alleged injury arises from those activities. Bauman,
134 S. Ct. at 761. Thus, the operative facts for determining specific jurisdiction in
an FDCPA case like this one are the states to and from which the allegedly

883, 885 n. 2 (7th Cir. 2016) (noting that on a motion to dismiss, courts may
consider public court documents, among other materials, if they are within the
public record and subject to judicial notice under the Federal Rules).
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offending debt collection letter was sent. The letter in this case was sent to
Kentucky from Massachusetts. Plaintiff’s attorney’s office in Illinois is entirely
irrelevant to where the alleged statutory violation took place and where the alleged
injury was suffered. Other courts considering precisely analogous facts have
reached the same conclusion. See, e.g., Stewart v. Brachfeld Law Group, 2010 WL
4683530, at *1 (N.D. Ill. Nov. 16, 2010) (finding in an FDCPA case involving out-ofstate parties that where the only connection to this district was the location of
LASPD, “no part of the acts and transactions occurred here in any real-world
sense”); Randolph v. North Star Capital Acquisition, LLC, 2010 WL 5418923, at * 1
(N.D. Ill. Dec. 2010) (also on similar facts finding that the location of counsel was a
“venue irrelevant fact” and refusing to permit jurisdiction “created by such
artificiality”). Because the cause of action, in actuality, arises from activities
entirely outside the state of Illinois, specific jurisdiction in this district is also
lacking.
Finally, Plaintiff also seems to argue that because she and the defendant
engaged in settlement discussions for several months before this motion was filed,
the defendant waived its right to object to personal jurisdiction. See R. 20 at 6 (“[I]n
its motion to dismiss, Defendant oddly neglects to acknowledge the inconvenient
fact that it litigated this case–including entering into a settlement agreement–in
Illinois, for three months, before it decided to move to dismiss for lack of jurisdiction
and/or improper venue.”). She cites no authority for this argument, however, and
therefore waives it. See United States v. Hassebrock, 663 F.3d 906, 914 (7th Cir.

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2011) (explaining that “perfunctory and undeveloped arguments, and arguments
that are unsupported by pertinent authority, are waived”) (quoting United States v.
Berkowitz, 927 F.2d 1376, 1384 (7th Cir. 1991)). Even if the Court were to consider
the waiver argument, it is without merit and thus would not carry the day. “As long
as defendants comply with the rules by raising their defenses in their first
responsive pleading or consolidate their defenses in a pre-pleading motion under
Fed. R. Civ. P. 12(b), they do not waive their Rule 12(b) defenses.” Swanson v. City
of Hammond, 411 Fed. Appx. 913, 915-16 (7th Cir. 2011) (finding that
“[p]reliminary litigation actions . . . do not waive or forfeit personal-jurisdiction
defenses” provided the defendant does not “create the expectation that [it] will
defend the suit on the merits”); see also Mobile Anesthesiologists Chicago, LLC v.
Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010)
(finding no waiver after the defendant filed a motion to continue a preliminary
injunction hearing and requested expedited discovery to prepare for that hearing
when, thirteen days later, the defendant filed its motion to dismiss for lack of
personal jurisdiction).
Conclusion
Having found no personal jurisdiction, the question of whether venue is
proper in this district is moot. The Court therefore grants the motion to dismiss for
lack of personal jurisdiction, and dismisses the case without prejudice to Plaintiff
refiling in an appropriate forum.

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SO ORDERED.
ENTERED:

Honorable Thomas M. Durkin
United States District Judge
Dated: May 26, 2017

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