The opinion of the court was delivered by: Will, District Judge.
This matter is before us on defendant's motion to dismiss the
complaint for lack of personal jurisdiction and improper venue or
to transfer the suit to the Southern District of Ohio in the
interest of convenience to the parties and witnesses, see
28 U.S.C. § 1404(a). For the reasons which follow, we deny the
motion to dismiss or transfer.
Our summary of the facts is based in part on affidavits
submitted by the parties, the conflicts in which have been
resolved in favor of the plaintiff. See O'Hare International Bank
v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971); Océ-Industries,
Inc. v. Coleman, 487 F. Supp. 548, 549 (N.D.Ill. 1980).
In 1969, Charles E. Scott (Scott), president and principal
owner of defendant, met with the president of NTN Bearing
Corporation of America (NTN) at NTN's Illinois offices, in an
effort to reach an agreement under which Charles E. Scott, Inc.
(Scott, Inc.) would be made a sales representative for NTN. Such
a contract was executed, taking effect on January 1, 1970. During
1970 and continually through 1974, Scott made various visits to
NTN's Illinois offices. The parties have not stipulated the
number of such visits but NTN estimates the number at
approximately six per year, for a total of some thirty visits.
Late in 1974, NTN decided to attempt to standardize its
contracts with its sales representatives. The terms of the
standard form contract developed by NTN differed in certain
respects from the earlier contract between NTN and Scott, Inc. A
copy of the standard form contract was sent by NTN to Scott,
Inc., along with a cover letter requesting Scott, Inc.'s
acceptance of the new contract, which would supersede the earlier
contract with NTN. Scott, Inc. accepted the new contract and
returned it, signed, to NTN. The new contract was effective as of
January 1, 1975. From 1975 through 1979, following execution of
the new contract, Scott continued to visit the NTN offices in
Illinois. NTN has estimated that Scott made at least two or three
such visits each year.
This is a diversity suit. Accordingly, we have jurisdiction
only if an Illinois state court could exercise jurisdiction.
Fed.R.Civ.P. 4(e), Chicago Silver Exchange v. United Refinery,
Inc., 394 F. Supp. 1332, 1334 (N.D.Ill. 1975). Exercise of
jurisdiction by Illinois state courts is dependent upon not only
the Illinois long-arm statute, but also the constitutional due
process requirement that the defendant have at least minimum
contacts with Illinois such that the exercise of jurisdiction
would not offend traditional notions of fair play and substantial
justice. International Shoe Co. v. State of Washington,
326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
We turn first to the Illinois long-arm statute, under which
Illinois courts may assert jurisdiction over out of state
defendants in causes of action arising from certain enumerated
acts, performed by the defendant, including the "transaction of
any business within this State." Ill.Rev.Stat. ch. 110, §
We find that Scott, Inc. did transact business in Illinois
within the meaning of the Illinois long-arm statute. Scott
personally made many visits to plaintiff's offices in Illinois.
Defendant has not asserted that these visits were social calls.
Defendant does not claim that it was brought from Ohio to
Illinois by force or trickery, nor does it suggest that by chance
and accident its principal made regular appearances at
plaintiff's offices in Illinois. Indeed, defendant does not
dispute that Scott's visits to NTN's offices were business calls
and that the business between the parties was governed by the
contract. That contract provides, in paragraph 2, in part, that
Scott, Inc. "will diligently promote the sale of NTN products in
the designated territory." Paragraph 3 of the contract provides
that Scott, Inc.'s commissions shall be based in part upon NTN's
"appraisal of [Scott, Inc.'s] participation" in the sales.
Defendant came to Illinois to enable it, under the contract,
effectively to promote plaintiff's products, consequently
increasing its own commissions.
Under the Illinois long-arm statute, as applied by Illinois state
courts, plaintiff's claim "arose from" defendant's actions in Illinois.
The Illinois long-arm statute was enacted in 1956, after International
Shoe, with the conscious purpose to assert jurisdiction over
nonresidents to the maximum extent permitted by the due process clause.
Nelson v. Miller, 11 Ill.2d 378, 389, 143 N.E.2d 673
(1957). The term "arose from" as used in the Illinois long-arm statute is
liberally construed by Illinois courts. In Volkswagen Insurance Co. v.
Whittington, 58 Ill.App.3d 621, 625, 16 Ill.Dec. 179, 374 N.E.2d 954
(1978), the court stated that a "foreign corporation's business within
Illinois must be related to the cause of action in question
before section 17(1)(a) will confer personal jurisdiction. If none of this
business gives rise, at least in part, to the cause of action in
question, then no such jurisdiction exists." [Emphasis added.] See also
Ballard v. Rawlins, 101 Ill.App.3d 601, 604, 56 Ill.Dec. 940,
428 N.E.2d 532 (1981); Chicago Film Enterprises v. Jablanow,
55 Ill. App.3d 739, 742, 13 Ill.Dec. 466, 371 N.E.2d 161 (1977).
Construing the phrase "arising from" as used in sections 17(1) and (3),
the court in Johnston v. United Presbyterian Church,
103 Ill. App.3d 869, 59 Ill.Dec. 518, 431 N.E.2d 1275 (1981) stated
that there must be a "sufficiently close relationship between the
defendant's business activities in the State and the litigation against
him." Id. at 872, 59 Ill.Dec. 518,
431 N.E.2d 1275 [Emphasis added.] Similarly, in Ballard v.
Rawlins, 101 Ill.App.3d 601, 56 Ill.Dec. 940, 428 N.E.2d 532
(1981), the court concluded that jurisdiction is proper only if
there exist "sufficient affiliating circumstances showing a
relationship between the defendant, the State of Illinois and
this lawsuit." Id. at 605, 56 Ill.Dec. 940, 428 N.E.2d 532
(Emphasis added.) Finally, in Huffman v. Inland Oil & Transport
Co., 98 Ill.App.3d 1010, 54 Ill.Dec. 306, 424 N.E.2d 1209 (1981),
the court stated that "[t]he purpose of the limiting phrase
`arising from' is to insure that there is a close relationship
between a cause of action against a non-resident corporation and
the business activities through which it submitted to Illinois
jurisdiction. . . . The minimum relationship required is that the
plaintiff's suit be one which lies in the wake of the commercial
activities by which the defendant submitted to the jurisdiction
of Illinois courts." Id. at 1015-16, 54 Ill.Dec. 306,
424 N.E.2d 1209 (citations omitted).
Defendant points out that plaintiff is suing for declaratory
relief. Defendant argues that, since it was in Ohio when it
demanded payment, and since such demand is a prerequisite to
plaintiff's suit, the action of necessity "arose from" acts
performed in Ohio, not in Illinois. Hence, according to
defendant, we lack jurisdiction under the Illinois long-arm
statute. Whatever the merits of defendant's "last event" test, it
is clear that Illinois courts do not regard it as controlling in
contract actions. As the court stated in Chicago Silver Exchange
v. United Refinery, Inc., 394 F. Supp. 1332 (N.D.Ill. 1975), the
Illinois long-arm statute "requires that the activities which are
relied on to sustain jurisdiction must give rise to the suit in
question, at least in part." Id. at 1335 (citation omitted).
Exercise of jurisdiction by Illinois courts under the Illinois
long-arm statute "depends upon the facts of each case." Illinois
National Bank v. Gulf States Energy Corp., 102 Ill.App.3d 1113,
1119, 57 Ill.Dec. 938, 429 N.E.2d 1301 (1981). The statute does
not require Illinois courts to weigh Illinois contacts against
out of state contacts. Rather, Illinois courts focus only upon
the defendant's activity in Illinois, finding jurisdiction where
such activities are sufficiently related to the suit filed even
though there may be more activities in other jurisdictions. See,
e.g., id. at 1120, 57 Ill.Dec. ...