sale of IMS South Africa until January 7, 1989, or earlier if the case was dismissed. As a result, we vacated the TRO that we had entered the day before.
Because both sides indicated that time was of the essence, we set an expedited briefing schedule at the hearing, and by January 3, 1989, briefing was complete. On January 4, 1989, we issued a one-page order dismissing the case. In the order, we summarized our conclusion: that we lacked personal jurisdiction over both D&B and IMS, and that D&B and IMS were indispensable parties. The reasoning underlying our conclusion is presented below.
II. Personal Jurisdiction
When we sit in diversity, we have personal jurisdiction over a party only if an Illinois state court would have such jurisdiction. John Walker & Sons, Ltd. v. DeMert & Dougherty, Inc., 821 F.2d 399, 401 (7th Cir. 1987); General Accident Insurance Co. v. Old Republic International Corp., 648 F. Supp. 634, 636 (N.D. Ill. 1986). Under Illinois law, a court may acquire jurisdiction over a non-resident defendant under the Illinois long-arm statute, Ill.Rev.Stat. ch. 110, para. 2-209 (1987), or because the defendant is "doing business" in Illinois. R. W. Sawant & Co. v. Allied Programs Corp., 111 Ill. 2d 304, 312-13, 489 N.E.2d 1360, 1364-65, 95 Ill. Dec. 496 (1986); Cook Associates, Inc. v. Lexington United Corp., 87 Ill. 2d 190, 198-99, 429 N.E.2d 847, 850-51, 57 Ill. Dec. 730 (1981). If we determine that personal jurisdiction is present under Illinois law, we must then determine whether the exercise of judicial power is consistent with the due process clause of the Fourteenth Amendment. See John Walker, 821 F.2d at 403. We note that the Illinois courts no longer equate the Illinois long-arm statute with the requirements of the due process clause. See Cook Associates, 87 Ill.2d at 197, 429 N.E.2d at 850.
Under Illinois law, the party seeking to establish personal jurisdiction -- in this case, IBIS -- must make out a prima facie case. Saylor v. Dyniewski, 836 F.2d 341, 342 (7th Cir. 1988); see also 4 C. Wright & A. Miller, Federal Practice & Procedure § 1068 at 345 (2d ed. 1987) (hereinafter "Wright & Miller"). The allegations in IBIS's complaint concerning jurisdiction are to be taken as true unless controverted by the defendants' affidavits, and any conflicts in the affidavits are to be resolved in IBIS's favor. John Walker, 821 F.2d at 402; Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987). This rule, however, applies only to the facts presented in the complaint or affidavits. Therefore, because "doing business" is a legal conclusion, and despite IBIS's protestations to the contrary, we need not conclude that D&B and IMS are doing business in Illinois just because IBIS's affidavits assert that it is so.
Clearly, because ACN has its principal place of business here in Illinois, we have personal jurisdiction over it, and the defendants concede as much. The more difficult questions concern D&B and IMS. IBIS does not contend that we have jurisdiction under the long-arm statute, nor does it contend that D&B and IMS are themselves doing business in Illinois. Rather, it contends that we have jurisdiction because D&B and IMS have wholly-owned subsidiaries doing business in Illinois, including, in D&B's case, ACN. In general, the parent-subsidiary relationship is insufficient to confer personal jurisdiction. As we have noted recently, "In the absence of any evidence that can justify piercing the corporate veil, 'the mere relationship of parent corporation and subsidiary corporation is not in itself a sufficient basis for subjecting both to the jurisdiction of the forum state.'" Uresil Corp. v. Cook Group, Inc., No. 88 C 6171, slip op. at 9 n.5 (N.D. Ill. Nov. 14, 1988) (Aspen, J.) (quoting 2 J. Moore, W. Taggart & W. Wicker, Moore's Federal Practice para. 4.41-1 at 4-370 (1988); see also 4 Wright & Miller § 1069 at 363 (jurisdiction over the local subsidiary does not confer jurisdiction over the foreign parent "if the subsidiary's presence in the state is primarily for the purpose of carrying on its own business and the subsidiary has preserved some semblance of independence from the parent").
However, the Illinois courts have held that in certain circumstances, jurisdiction over the subsidiary translates into jurisdiction over the parent. For example, in Maunder v. DeHavilland Aircraft of Canada, Ltd., 102 Ill. 2d 342, 466 N.E.2d 217, 80 Ill. Dec. 765, cert. denied, 469 U.S. 1036, 105 S. Ct. 511, 83 L. Ed. 2d 401 (1984), the parent corporation was a Canadian aircraft manufacturer, while the wholly owned subsidiary was a Delaware corporation with its principal place of business in Illinois. The subsidiary's sole business was the sale of the parent's aircraft parts, and the parent had included the subsidiary in its advertisement in American aviation journals. In addition, the subsidiary's operating manual stated that the subsidiary was controlled by the parent and operated under the parent's Vice President of Sales. Id. at 346-47, 466 N.E.2d at 219. Under the circumstances of the case, the Illinois Supreme Court concluded that the parent was "clearly . . . doing business in Illinois." Id. at 352, 466 N.E.2d at 222.
Similarly, in Schlunk v. Volkswagenwerk Aktiengesellschaft, 145 Ill. App. 3d 594, 503 N.E.2d 1045, 105 Ill. Dec. 39 (1st Dist. 1986), aff'd on other grounds, 486 U.S. 694, 108 S. Ct. 2104, 100 L. Ed. 2d 722 (1988), the parent was the German automobile manufacturer ("VWAG") and the subsidiary ("VWoA") was the exclusive importer and distributor of VWAG products sold in the United States. Technically, the question in Schlunk was not whether VWAG was subject to the jurisdiction of the court, but whether service on VWoA constituted valid service on VWAG. However, the court noted that the jurisdiction and the service issues both turned on whether the parent was doing business in Illinois, and the "answer to this question usually depends upon the relationship between parent and subsidiary." Id. at 601, 503 N.E.2d at 1049. VWoA was concededly doing business in Illinois, and the Illinois Appellate Court concluded that VWAG was doing business in Illinois by virtue of its relationship with VWoA. In reaching this conclusion, the Court relied, inter alia, on the following facts:
VWoA has bound itself to sell VWAG's products within its territory and to maintain and repair VWAG's automobiles regardless of where they were sold. VWAG is empowered to terminate the importer agreement without prior notice if VWoA experiences business or financial difficulties. VWAG controls VWoA's choice of dealers, the designation of VWoA's products and services, stock levels, and methods of ordering. In addition it dominates the VWoA Board and often conducts VWoA board meetings in its own domicile. VWoA is required by contract to keep VWAG apprised of all aspects of its business, and is authorized to prosecute trademark infringement suits in VWAG's name.