Examination Board of Professional Home Inspectors v. Gromicko, et al

Filing 53

MEMORANDUM Opinion and Order Signed by the Honorable Ronald A. Guzman on 4/11/2018: Defendants' motion to dismiss this action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) 17 is granted. All other pending motions are denied as moot. This action is dismissed without prejudice for lack of personal jurisdiction. Civil case terminated. [For further details see Memorandum Opinion and Order]. Mailed notice(is, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
EXAMINATION BOARD OF
PROFESSIONAL HOME INSPECTORS,
Plaintiff,
v.
INTERNATIONAL ASSOCIATION OF
CERTIFIED HOME INSPECTORS and
NICKIFOR GROMICKO,
Defendants.

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No. 17 C 6640
Judge Ronald A. Guzmán

MEMORANDUM OPINION AND ORDER
Defendants filed three motions to dismiss, asserting (1) lack of personal jurisdiction,
pursuant to Federal Rule of Civil Procedure 12(b)(2); (2) improper venue, or, in the alternative,
seeking to transfer this case to the District of Colorado, pursuant to Federal Rule of Civil Procedure
12(b)(3) and/or 28 U.S.C. § 1404; and (3) failure to state a claim, pursuant to Federal Rule of Civil
Procedure 12(b)(6). For the reasons explained below, the Court grants defendants’ motion to
dismiss for lack of personal jurisdiction.
BACKGROUND
Plaintiff, Examination Board of Professional Home Inspectors (“EBPHI”), brought this
action against the International Association of Certified Home Inspectors (“InterNACHI”) and
InterNACHI’s founder and a member of its board of directors, Nickifor (Nick) Gromicko, alleging
state-law claims of tortious interference with contract; tortious interference with business
expectancy; defamation; and false-light invasion of privacy.

EBPHI and InterNACHI are

competitors in offering licensing examinations for real-estate inspectors. EBPHI alleges that, in a

forum on InterNACHI’s website, defendants made false and defamatory statements that EBPHI’s
examination was a “scam” and “not . . . psychometrically valid,” resulting in EBPHI losing business
and suffering financial injury. (ECF No. 1, Compl.)
Subject-matter jurisdiction is based on diversity of citizenship. EBPHI is a nonprofit
corporation incorporated in Illinois with a principal place of business in Florida. InterNACHI is a
nonprofit corporation incorporated in Colorado with a principal place of business in Colorado.
Gromicko is a citizen of Colorado.
InterNACHI and Gromicko assert that this Court lacks personal jurisdiction over them. In
response to that motion, plaintiff sought, and the Court allowed, discovery related to personal
jurisdiction. Defendants also assert improper and/or inconvenient venue and that plaintiff fails to
state a claim. The Court limits its analysis to the personal-jurisdiction issue because it is dispositive.
DISCUSSION
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). When a court
relies solely on written materials to rule on a motion under Rule 12(b)(2), the plaintiff’s burden is
to establish a prima facie case of personal jurisdiction. Kipp v. Ski Enter. Corp. of Wis., 783 F.3d
695, 697 (7th Cir. 2015). “[O]nce 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.”

Purdue Research Found. v.

Sanofi-Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir. 2003). “[U]nder the prima facie standard, the
plaintiff is entitled to have any conflicts in the affidavits (or supporting materials) resolved in its
favor.” Id.

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“District courts exercising diversity jurisdiction apply the personal jurisdiction rules of the
state in which they are located.” Philos Techs., Inc. v. Philos & D, Inc., 802 F.3d 905, 912 (7th Cir.
2015). “Because Illinois permits personal jurisdiction if it would be authorized by either the Illinois
Constitution or the United States Constitution, the state statutory and federal constitutional
requirements merge.” uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425 (7th Cir. 2010) (citing,
inter alia, 735 ILCS 2-209(c)).
Personal jurisdiction can be general or specific, depending on the extent of the defendant’s
contacts with the forum state. Id. “General jurisdiction looks to the defendant’s ‘continuous and
systematic’ contacts with a state, whether or not the action is related to the contacts.” Brook v.
McCormley, 873 F.3d 549, 552 (7th Cir. 2017) (quoting Helicopteros Nacionales de Colombia, S.A.
v. Hall, 466 U.S. 408, 416 (1984)). Specific jurisdiction refers to jurisdiction over a defendant in
a suit arising out of or related to the defendant’s contacts with the forum, and those contacts must
be “directly related to the conduct pertaining to the claims asserted.” Id. Although plaintiff’s briefs
fail to meaningfully develop legal arguments,1 plaintiff appears to rely on both types of personal
jurisdiction. (ECF No. 46, Pl.’s Suppl. Resp. Defs.’ Mot. at 1-2 (“[T]his Court has personal

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In its initial response brief, plaintiff cited little substantive law on personal jurisdiction; it
devoted much of its argument to seeking leave to conduct jurisdictional discovery, which the Court
granted. The brief substantive argument plaintiff did present confused the standards for analyzing
general and specific jurisdiction. In its supplemental brief, plaintiff recites a laundry list of facts
about InterNACHI that it learned in discovery. It fails to discuss the legal import of those facts,
other than stating in conclusory fashion: “Based on all of the above, there is no question that
Defendants have specifically targeted Illinois and its citizens over many years,” so “there can be no
doubt that this Court has personal jurisdiction over the Defendants.” (Pl.’s Suppl. Resp. Defs.’ Mot.
at 5.) It is not the Court’s obligation to construct legal argument for a party, especially when it is
represented by counsel. 330 W. Hubbard Rest. Corp. v. United States, 203 F.3d 990, 997 (7th Cir.
2000) (“In order to develop a legal argument effectively, the facts at issue must be bolstered by
relevant legal authority.”).

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jurisdiction over Defendants because of their systematic contacts and specific targeting of the State
of Illinois and its citizens in their business dealings.”).
“General jurisdiction is ‘all-purpose’; it exists only ‘when the party’s affiliations with the
State in which suit is brought are so constant and pervasive as to render it essentially at home in the
forum State.’” Kipp, 783 F.3d at 697-98 (quoting Daimler AG v. Bauman, 571 U.S. 117, 134 S. Ct.
746, 751 (2014)) (brackets omitted). A corporation is “at home” in the state of its principal place
of business and the state of its incorporation. Id. at 698. These places are the equivalents of an
individual’s domicile. Daimler, 134 S. Ct. at 760. By these measures, defendants are “at home” in
Colorado. Any additional locations would have to meet the stringent criteria set forth in Daimler
and Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011). See Kipp, 783 F.3d
at 698. Even “continuous activity of some sorts within a state” does not necessarily satisfy
constitutional standards. Goodyear, 564 U.S. at 927-28.
Gromicko says that InterNACHI is a “trade association . . . [that] offers education, benefits,
and support to its members.” (ECF No. 21-1, Aff. of Nick Gromicko ¶ 4.) Over ninety percent of
InterNACHI’s revenue is derived from membership dues. (ECF No. 46-1, Dep. of Nick Gromicko
at 20.) Illinois members make up 2.86 percent of InterNACHI’s membership. (Aff. of Nick
Gromicko ¶ 7.) InterNACHI has no employees, business partners, offices, real or personal property,
or bank accounts in Illinois. (Id. ¶ 6.) It does not control the activities of its members in Illinois.
(Id. ¶ 8.) Gromicko resides in Colorado; he does not own any property or maintain any assets in
Illinois. (Id. ¶ 9.) He has not “set foot in Illinois in the last ten years.” (Id.)
Plaintiff cites the following contacts between InterNACHI and Illinois: InterNACHI’s
website contains some web pages that provide licensing information specific to Illinois and identify
six Illinois InterNACHI members who can assist with fulfilling inspection requirements;
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InterNACHI offers to Illinois residents free online education courses; InterNACHI offers to Illinois
resident members paid education courses, which consist of a hybrid of online instruction and
classroom instruction conducted in Colorado; an InterNACHI member offers and conducts a live
education course in Illinois, which is advertised on InterNACHI’s website; InterNACHI provides
instruction that is specific to Illinois standards of practice for inspectors; InterNACHI has a
“Chicago Chapter” of members; InterNACHI announced in a press release that it had “partnered”
with a Chicago-based realty company to develop and provide continuing-education courses for
Illinois home inspectors; and in 2016 InterNACHI offered to “assume administrative
responsibilities” for the Illinois-based American Society of Home Inspectors (“ASHI”). (Pl.’s
Suppl. Resp. Defs.’ Mot. at 2-5.) Defendants point out that InterNACHI has web pages tailored to
licensing requirements for every state; offers courses to residents of every state; InterNACHI did
not end up “partnering” with the Chicago-based realty company; and InterNACHI’s offer to ASHI
was not accepted. (ECF No. 37-1, Suppl. Aff. of Nick Gromicko ¶ 5a; Gromicko Dep. at 25-27, 4243, 78, 88-96, 120-121.)
The evidence is that a small fraction of InterNACHI’s members are in Illinois; one of its
members teaches a class in Illinois; InterNACHI does some business in Illinois by offering
educational courses to Illinois residents, as it does nationwide; and it has made attempts to do
business with a few Illinois-based entities. These facts fall far short of demonstrating that
InterNACHI has “continuous corporate operations” within Illinois that are “so substantial and of
such a nature as to justify suit on causes of action arising from dealings entirely distinct from those
activities.” See Daimler, 134 S. Ct. at 761 (ellipsis and emphasis omitted). Neither InterNACHI
nor Gromicko’s contacts with Illinois indicate that they have the type of “at home” presence in
Illinois that must exist in order to justify exercising general personal jurisdiction over them.
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The Court next considers specific jurisdiction. “Adjudicatory authority is ‘specific’ when
the suit ‘arises out of or relates to the defendant’s contacts with the forum.’” Goodyear, 564 U.S.
at 923-24 (quoting Helicopteros, 466 U.S. at 414 n.8) (brackets omitted). To establish specific
personal jurisdiction, it is the defendant’s “suit-related” conduct that must create the substantial
connection with the forum state. Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball,
Inc., 751 F.3d 796, 801 (7th Cir. 2014). This suit arises out of allegedly defamatory statements that
Gromicko posted on a forum on InterNACHI’s website in response to a Texas resident’s questions
about home-inspector courses and licensing. (Compl. ¶ 15.) Plaintiff does not explain, and the
Court does not perceive, how this allegedly tortious activity is connected with defendants’ contacts
with Illinois. Plaintiff suggests that specific jurisdiction exists because defendants knew that
plaintiff is located in Illinois and therefore knew that their statements would therefore create harm
in Illinois, (ECF No. 28, Pl.’s Consol. Resp. Defs.’ Mots. at 7), but the Supreme Court has explicitly
rejected the notion that mere injury to a forum resident is a sufficient connection to the forum. See
Walden v. Fiore, --- U.S. ----, 134 S. Ct. 1115, 1125 (2014) (“The proper question is not where the
plaintiff experienced a particular injury or effect but whether the defendant’s conduct connects him
to the forum in a meaningful way.”); see also Advanced Tactical, 751 F.3d at 802 (“[A]fter Walden
there can be no doubt that the plaintiff cannot be the only link between the defendant and the
forum.”) (internal quotation marks and citation omitted).
Plaintiff fails to meet its burden of proof with respect to establishing this Court’s exercise
of personal jurisdiction over defendants, so this action will be dismissed. The Court need not
address defendants’ motions to dismiss for improper venue and failure to state a claim.

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CONCLUSION
Defendants’ motion to dismiss this action for lack of personal jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2) [17] is granted. All other pending motions are denied as
moot. This action is dismissed without prejudice for lack of personal jurisdiction.
DATE: April 11, 2018

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Ronald A. Guzmán
United States District Judge

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