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WELLES PRODUCTS CORP. v. PLAD EQUIPMENT CO.

April 12, 1983

WELLES PRODUCTS CORPORATION, A NEVADA CORPORATION, PLAINTIFF,
v.
PLAD EQUIPMENT CO., LTD., A CANADIAN CORPORATION; AND SOUTHERN INDUSTRIAL STEEL CO., A GEORGIA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Roszkowski, District Judge.

ORDER

Plaintiff, Welles Products Corp. ("Welles"), a Nevada corporation with its principal offices and factory in Illinois, filed this diversity action against Plad Equipment Co., Ltd. ("Plad"), a Canadian corporation with its principal place of business in Quebec.*fn1 The dispute arose over an alleged contract between Welles and Plad under which Welles was to supply various components for a sewage treatment facility in Saudi Arabia. Plad moved to dismiss for lack of in personam jurisdiction. In his Report and Recommendation, the Magistrate recommended denial of the motion. Plad has filed timely objections, and Welles has filed a response to those objections. The court adopts the Report and Recommendation with the following additional comments.

The pertinent facts, as presented by the complaint, motion, briefs and affidavits submitted by Plad and Welles, are for the most part undisputed. Both parties agree that Plad was under contract to supply parts for two sewage treatment plants in Saudi Arabia. With regard to Plad's purchase of components for these projects from Welles, the initial contact between the parties was a telephone call in February or March 1981 from Jean Claude Frigeau, a Plad employee, to Carl Jacobs of Welles. Plad argues that there were contacts between the parties prior to this call and that a contract was formed only after negotiations subsequent to the call. It is, however, undisputed that this call was the genesis of the contract in question.

When considering a challenge to its jurisdiction, a court may receive and weigh affidavits. The party asserting jurisdiction must make a prima facie showing that the applicable state long arm statute confers jurisdiction. O'Hare International Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971). Once this has been shown, the court's determination must be made by viewing as true the facts alleged by the party asserting jurisdiction. Id. For purposes of this motion, therefore, the court will accept the above facts as true.

In the instant case, the Illinois Long-Arm Statute establishes the guidelines for determining whether personal jurisdiction exists. That statute provides in part:

  (a) Any person, whether or not a citizen or
  resident of this State, who in person or through
  an agent does any of the acts hereinafter
  enumerated, thereby submits such person, . . . to
  the jurisdiction of the courts of this State as
  to any cause of action arising from the doing of
  any such acts:
  (1) The transaction of any business in this
  State. . . .

Ill.Rev.Stat.ch. 110, § 2-209(a)(1).*fn2 Personal jurisdiction is allowed in this diversity action only to the extent available to Illinois courts under this statute. Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 597 F.2d 596, 598 (7th Cir. 1979). It is therefore necessary to look to Illinois law in determining whether Welles has established a prima facie showing of personal jurisdiction.

Until the Illinois Supreme Court's recent decision in Green v. Advance Ross Electronics Corp., 86 Ill.2d 431, 56 Ill.Dec. 657, 427 N.E.2d 1203 (1981), section 2-209 was interpreted as coextensive with the due process requirements of the Fourteenth Amendment. See Braband v. Beech Aircraft Corp., 72 Ill.2d 548, 557, 21 Ill.Dec. 888, 892, 382 N.E.2d 252, 256 (1978); Nelson v. Miller, 11 Ill.2d 378, 389, 143 N.E.2d 673, 679 (1957). In Green, the Illinois Supreme Court determined that section 2-209 "should have a fixed meaning without regard to changing concepts of due process, except, of course, that an interpretation which renders the statute unconstitutional should be avoided, if possible." Green, supra, 86 Ill.2d at 436, 56 Ill.Dec. at 660, 427 N.E.2d at 1206. In determining long-arm jurisdiction, the courts must first look to the meaning of the applicable portion of the Illinois statute. Only in those situations where Illinois law provides jurisdiction are the courts to take the second step and assure that the minimum requirements of due process are met. Green, supra, 86 Ill.2d at 436-37, 56 Ill.Dec. at 660, 427 N.E.2d at 1206. While Green involved a tort case, this same approach was soon adopted for the "transaction of business" section of Illinois' Long Arm Statute applicable in the instant case. Cook Assoc., Inc. v. Lexington United Corp., 87 Ill.2d 190, 57 Ill.Dec. 730, 429 N.E.2d 847 (1981).

While the Green and Cook cases indicated that the long arm statute should not thereafter be interpreted as coextensive with new interpretations of the due process clause, those cases did not purport to overrule any past decisions in which particular sets of contacts were found to constitute, or not to constitute, the transactions of business.*fn3

In circumstances similar to the case at bar, courts in this district have found that a defendant had transacted business within the meaning of the Long Arm Statute. Tatham-Laird & Kudner, Inc. v. Johnny's American Inn, 383 F. Supp. 28 (N.D.Ill. 1974), involved a service contract between a Nebraska buyer and an Illinois seller. In determining that the buyer had transacted business in Illinois, that Court stated:

  the defendant voluntarily and affirmatively
  sought the plaintiff's services in Illinois, it
  traveled into Illinois for contract negotiations,
  and thereafter met in Illinois in furtherance of
  the contractual relationship. It also placed
  numerous phone calls to plaintiff's Chicago
  office and paid for certain services by mailing
  its checks to Chicago.

Tatham, supra, 383 F. Supp. at 31. So too in this case, the defendant Plad's nearly identical contacts with Welles in Illinois mandate the conclusion ...


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