The defendant in this diversity action for an accounting has
moved to dismiss on the ground that this court has no
jurisdiction. For the reasons set forth below, this court is
of the opinion that this motion should be granted.
Service on the defendant in this action was made in
Philadelphia pursuant to Rule 4(e), which incorporates the
Illinois "long-arm" statute, S.H.A. ch. 110, § 17.*fn1 The
defendant contends that it does not fall within the reach of
that statute, since it did not "transact any business within"
Illinois. The plaintiff, on the other hand, argues that facts
exist which show that the defendant is subject to this
"long-arm" type of process.
Certain facts in this case are undisputed, however. The
contract out of which this cause of action arose was
negotiated and signed in either Philadelphia or New York. At
the time of the negotiations, the plaintiff had its principal
place of business in Philadelphia. The defendant was then
based in New York City.*fn2 None of the preliminary
negotiations were held in Illinois. The defendant is not
licensed or qualified (formally) to do business in Illinois.
No employees of the defendant live or work in Illinois. The
defendant maintains no offices, telephones, telephone
listings, or mailing addresses in Illinois. What then does the
plaintiff rely on to sustain jurisdiction under the
"transaction of business" clause?
The visit of the Sales Manager after the contract was signed
or the sending of the termination letter do not appear to this
court to be sufficient to constitute a "transaction of
business." Jurisdiction under this part of Section 17 exists
if certain "minimum contacts" with Illinois are present which
do not offend "traditional notions of fair play and
substantial justice." International Shoe Co. v. State of
Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95
(1945), as quoted in Nelson v. Miller, 11 Ill.2d 378, 384,
143 N.E.2d 673 (1957). The defendant in this case has not
solicited in Illinois the contracts in dispute, nor did he
promise to send an employee to Illinois to train a purchaser
as the defendant did in Berlemann v. Superior Distributing
Co., 17 Ill. App.2d 522, 151 N.E.2d 116 (1958); nor did this
defendant negotiate by mail with the plaintiff in Chicago or
visit Chicago to inspect the machinery to be purchased
before signing any contract, as the defendant did in Kropp
Forge Co. v. Jawitz, 37 Ill. App.2d 475, 186 N.E.2d 76 (1962).
The defendant here was not like the defendant in Ziegler v.
Houghton-Mifflin Co., 80 Ill. App.2d 210, 224 N.E.2d 12 (1967),
where that defendant knowingly made sales to or agreements with
Illinois residents, even though that defendant and its agents
were never physically present in Illinois. Finally, the present
defendant's situation is quite unlike that of the defendants in
Lurie v. Rupe et al., 51 Ill. App.2d 164, 201 N.E.2d 158
(1964), who maintained a transfer agent, registrar, mailing
agent, and dividend disbursing agent in Illinois for many
years. These factual situations present in the Illinois cases
which sustained jurisdiction seem to exclude both the
plaintiff's first and second grounds. A look at the Illinois
cases which have denied jurisdiction shows that Illinois has
not gone so far as to exercise its "long-arm" powers over such
a person as the present defendant. E.g., Grobark v. Addo
Machine Co., 18 Ill. App.2d 10, 151 N.E.2d 425 (1958), affirmed
16 Ill.2d 426, 158 N.E.2d 73 (1959); Orton v. Woods Oil & Gas
Co., 249 F.2d 198 (7th Cir. 1957); Continental Nut Co. v.
Robert L. Berner Co., 345 F.2d 395 (7th Cir. 1965). In the
closest case to defendant's situation, the Illinois courts
denied jurisdiction over a defendant, where the contract was
executed in another state, the defendant's officer visited
Illinois only once for preliminary negotiations, and an
employee of defendant lived in Illinois (but was unconnected
with the transaction). E. Film Corporation v. United Feature
Syndicate, Inc., 172 F. Supp. 277 (N.D.Ill. 1958).
It seems clear that the Illinois courts have not applied
Section 17 to a person in the present defendant's posture. The
extremely limited contact that defendant has had with the
State of Illinois, added to the fact that this action for an
accounting has more relation with the states of Pennsylvania
and New York than with Illinois, lead this court to the
conclusion that "traditional ...