With Green's decision to sever the long-arm statute from the due process clause, Illinois courts may begin to adhere more closely to the language of the statute in determining whether it reaches the defendant, and then undertake due process analysis as a separate inquiry before exercising jurisdiction. See Wiles v. Morita Iron Works Co., 125 Ill. 2d 144, 125 Ill. Dec. 812, 530 N.E.2d 1382 (1988) (holding that due process precluded exercising jurisdiction while expressly declining to decide whether the long-arm statute reached the defendant). Until the Illinois courts say as much, however, this court must continue to view the long-arm statute as including an additional relationship requirement.
In Zukerman, Judge Shadur noted that in assessing whether telephone calls from an out-of-state defendant into Illinois constitute the commission of a tortious act within Illinois, Illinois courts have looked to whether the defendant "inten[ded] to affect Illinois interests." 594 F. Supp. at 346-47. The defendant objects to this characterization, urging instead that the inquiry is whether the defendant "invoked the benefits and protections of the law of the forum." Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d at 440.
In fact, Illinois courts have used both phraseologies. This split reflects the United States Supreme Court's divergent approaches to jurisdictional analysis under the due process clause, at times concentrating on the state's regulatory interests in determining the constitutionally permissible reach of long-arm statutes, and at other times stating that amenability to suit turns on the defendant's consensual relationship with the forum state. See generally Stein, Styles of Argument and Interstate Federalism in the Law of Pesonal Jurisdiction, 65 Tex.L.Rev. 689 (1987).
The proper inquiry depends on the type of conduct involved. Jurisdictional analysis focuses on the defendant's intentional acts vis-a-vis the forum state. Where the alleged wrongdoing is unintentional -- i.e., negligence -- the defendant has not intended to do harm in the forum state, so jurisdiction turns on his consensual relationship with the forum state -- i.e., whether he invoked the benefits and protections of its laws. Gray, 22 Ill.2d at 440. On the other hand, where the defendant allegedly has committed an intentional wrong in the forum state, "it is awkward to refer to a defendant's alleged deliberate violation of Illinois law as 'invoking the benefits and protections of Illinois law.'" Zukerman, 594 F. Supp. at 346 n.8. It is also unnecessary. So long as the defendant intended to affect Illinois interests, his conduct is of the sort the Illinois long-arm statute seeks to reach. See Brainerd v. Balish, 164 Ill. App. 3d at 841.
In this case, the defendant clearly intended to affect Illinois interest. He advertised in Illinois, made phone calls to an Illinois resident, and then sold a plane knowing it was destined for Illinois. Accordingly, if the defendant committed a tortious act, and for now the court must assume that he did, then he committed it within Illinois for the purposes of the long-arm statute. Because all of the plaintiff's claims lie in the wake of this tortious conduct, the long-arm statute authorizes jurisdiction over the defendant for each count in the complaint. See Loggans v. Jewish Community Center, 113 Ill. App. 3d 549, 557, 69 Ill. Dec. 484, 447 N.E.2d 919 (1983); para. 2-209(c) ("Only causes of action arising from acts enumerated [in para. 2-209(a)] may be asserted against a defendant in which jurisdiction over him or her is based upon this section.").
That the Illinois long-arm statute reaches the defendant does not quite end the jurisdictional inquiry. The court must also ensure that asserting jurisdiction comports with due process. The Supreme Court as well as the Seventh Circuit consistently have looked to the Due Process Clause of the Fourteenth Amendment as governing in diversity cases. See, e.g., Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 79 L. Ed. 2d 790, 104 S. Ct. 1473 (1984); Mason v. F. Lli Luigi & Franco Dal Maschio, 832 F.2d 383 (7th Cir. 1987); see generally 4 Wright & Miller, Federal Practice & Procedure, § 1067.1 at 505 (1987). Just why this is so, however, is not entirely clear, and is rarely discussed.
The Fourteenth Amendment sets limits on state power. The Fifth Amendment curbs federal power. See Stafford v. Briggs, 444 U.S. 527, 63 L. Ed. 2d 1, 100 S. Ct. 774 (1980) (Stewart, J., dissenting) ("Due process requires only certain minimum contacts between the defendant and the sovereign that has created the court."). So why does the Fourteenth Amendment ever apply to a federal court's power to exercise jurisdiction?
Justice Powell has opined that the answer lies in the Rules of Decisions Act, 28 U.S.C. § 1652. See Insurance Corporation of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 711-13, 72 L. Ed. 2d 492, 102 S. Ct. 2099 (1982) (Powell, J., concurring). But this will not do. The Rules of Decisions Act requires federal courts to apply state substantive law in diversity cases, see Erie Railroad Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938), but the Fourteenth Amendment is not state substantive law, it is federal Constitutional law. Moreover, personal jurisdiction is distinct from the underlying cause of action, and is more procedural than substantive: Were it not, then the Federal Interpleader Statute, 28 U.S.C. § 2361, which authorizes nationwide service of process in diversity cases (see Indianapolis Colts v. Mayor of Baltimore, 733 F.2d 484, 487 (7th Cir. 1984)), would be on shaky constitutional ground, but it is not. See Arrowsmith v. United Press International, 320 F.2d 219, 224-27 (2d Cir. 1963) (Congress has the authority to enact nationwide service of process rules to govern diversity cases).
Some courts have stated that the answer lies in the Federal Rules: Since Rule 4(e) states that, in the absence of a federal statute, a federal court may obtain extraterritorial jurisdiction only "under the circumstances prescribed in [a state] statute or rule," these courts reason that any constitutional limits on state long-arm statutes must apply when a federal court employs the statute.
E.g., Max Daetwyler v. R. Meyer, 762 F.2d 290, 296 & 295-96 n.5 (3d Cir. 1985) (in the absence of congressional authorization of nationwide service, Fourteenth Amendment applies in diversity as well as federal question cases). Yet, Rule 4(e) does not say that constitutional limits on state power must be respected by federal courts. It provides only that, in the absence of a federal service of process statute, the federal court may obtain jurisdiction under the circumstances prescribed by state statute. If the state statute prescribes a jurisdictional reach beyond that allowed by the Fourteenth Amendment, a literal reading of the rule does not mandate that the federal court abide by the limitations of this amendment. See Welkowitz, Beyond Burger King : The Federal Interest in Personal Jurisdiction, 56 Ford.L.Rev. 1, 21 n.36 (1987).
The best reason, then, for utilizing Fourteenth Amendment scrutiny, at least in diversity cases, is that this seems to be the intent of the drafters of Rule 4(e), see Fed.R.Civ.P. 4(e) (Advisory Committee Notes to 1963 Amendments); but see Welkowitz, supra, 56 Ford.L.Rev. at 19 n.123 (discussing the advisory committee notes), and effectuates the interests of intrastate uniformity underlying Erie : Were federal courts to employ a different due process standard in diversity cases than state courts must, plaintiffs would have an incentive to shop for a federal forum, a result not intended by the drafters of Rule 4(e), and, in any case, not sanctioned by the Supreme Court.
Under the Fourteenth Amendment Due Process Clause, a court may not assert jurisdiction over a defendant unless the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'") (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940)). The defendant here cannot deny that he has minimum contacts with Illinois. He advertised in Illinois, spoke directly with the plaintiff while the latter was in Illinois, and then sold an airplane to the plaintiff's employees knowing that they would return with the plane to Illinois. This intentional conduct more than suffices under any of the theories of minimum contacts elaborated by the Supreme Court in recent years. See Asahi Metal Industry Co. v. Superior Court of California, Solano County, 480 U.S. 102, 94 L. Ed. 2d 92, 107 S. Ct. 1026 (1987) (plurality opinion) (the defendant must have purposefully availed himself of the forum's market); id. at 1035-38 (Brennan, J., concurring) (the defendant need only have known that his product would land in the forum's market).
Minimum contacts, however, is not enough. Although their existence makes it more likely that exercising jurisdiction will be appropriate, see id. at 1034 (plurality opinion); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985), the court still must ensure that haling the defendant into the forum would not be "unreasonable and unfair," Asahi, 107 S. Ct. at 1038 (Stevens, J., concurring); Burger King, 471 U.S. at 477-78. In making this determination:
A court must consider the burden on the defendant, the interests of the forum state, and the plaintiff's interest in obtaining relief. It must also weigh in its determination "the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies."
Asahi, 107 S. Ct. at 1034 (plurality opinion) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980))
The only factor favoring the defendant is the first: the substantial burden he will face in having to litigate in Illinois. Yet, this burden is no greater than the burden the plaintiff would endure were he forced to go to Massachusetts to obtain relief. And Illinois has a substantial interest in protecting its citizens from the sort of interstate fraud alleged here. Cf. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 79 L. Ed. 2d 790, 104 S. Ct. 1473 (1984). These factors, when considered in light of the defendant's intentional decision to engage in business with an Illinois citizen (in Illinois), leave no question that the exercise of jurisdiction over him would be fair and reasonable. See Burger King Corp. v. Rudzewizc, 471 U.S. at 477 ("Where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable."). Accordingly, the defendant's motion to dismiss for lack of personal jurisdiction will be denied.
The defendant requests a transfer of venue to the United States District Court in Massachusetts pursuant to 28 U.S.C. § 1404(a).
In order to obtain transfer under this provision, the defendant must establish (1) that venue is proper in the transferor forum, (2) that venue is proper in the transferee forum, and (3) that the transfer is "for the convenience of the parties and the witnesses, in the interest of justice." 28 U.S.C. § 1404(a); Countryman v. Stein, Roe & Farnham, 681 F. Supp. 479, 481 (N.D. Ill. 1987).
The parties do not dispute that venue is proper here, and would be proper in Massachusetts. Thus, the only issue left is the third. The statute instructs the court to take account of three factors: the convenience of the parties, the convenience of the witnesses, and the interests of justice. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 221 (7th Cir. 1986). A fourth factor is the plaintiff's choice of forum (which usually is, but may not be, the most convenient one for him), Fossett Corp. v. Gearhart, 694 F. Supp. 1325 (N.D. Ill. 1988); see Norwood v. Kirkpatrick, 349 U.S. 29, 32, 99 L. Ed. 789, 75 S. Ct. 544 (1955), but courts sometimes incorporate this factor into the statute's three-pronged standard by requiring the movant to show "a clear balance of inconvenience" favoring transfer. Waites v. First Energy Leasing Corp., 605 F. Supp. 219, 221 (N.D. Ill. 1985); Coffey v. Van Dorn Iron Works, 796 F.2d at 220 ("clearly more convenient").
With respect to the convenience of the parties, the defendant cannot do so. Although the defendant will be inconvenienced if he must litigate here, he has provided no evidence suggesting that the plaintiff will be any less inconvenienced if he must litigate in Massachusetts. Thus, this factor comes down even. C. Wright & A. Miller, Federal Practice & Procedure, § 3848 at 246 (1976) (transfer improper if it would merely "shift the inconvenience from one party to the other").
As for the convenience of the witnesses, the defendant says that his witnesses will be more severely inconvenienced if the case goes forward here than will be the plaintiff's witnesses if the litigation moves to Massachusetts. He also suggests that whereas the plaintiff's witnesses all work for the plaintiff and therefore will voluntarily appear, the defendant's witnesses do not work for the defendant, will have to be subpoenaed for testimony, and may be unwilling to appear in Illinois for trial.
This argument unquestionably is the defendant's strongest one favoring transfer. The convenience of witnesses is often viewed as the most important factor in the transfer balance, see C. Wright & A. Miller, Federal Practice & Procedure, § 3851 at 264 (1976), and is all the more so when the convenience of the parties is a wash. The defendant, however, has made it difficult for this court to gauge just how much weight this factor merits.
The defendant states in an affidavit that he intends to call certain (unspecified) individuals residing in the Massachusetts area as witnesses to testify about the condition of the plane. He indicates that these witnesses will assist him in showing that the defects in the plane were obvious to anyone experienced in aircraft engines. Yet, he does not spell out why this testimony will be critical for his case. As far as this court can tell, the plaintiff's case rests on the defendant's alleged misrepresentations regarding the condition of the aircraft vis-a-vis its actual condition. The defendant's own testimony about what he said thus will be his most important evidence.
Of course, the defendant could build a defense around the obviousness of the defects, but if this is his approach, he will need far more than the testimony of a few individuals who knew of them: He will need the testimony of experts regarding the condition of the plane. The plane, however, is right here in Illinois, and according to the plaintiff, immobile at that, so if the Massachusetts witnesses tilt the scale towards transfer, their weight is offset, at least in part, by the location of the aircraft. Without the defendant's assistance in elucidating who his witnesses are, and why they are important, this factor weighs, if at all, only marginally in the defendant's favor. See General Portland Cement Co. v. Perry, 204 F.2d 316, 320 (7th Cir. 1953); C. Wright & A. Miller, Federal Practice & Procedure, § 3851 at 270-71 (1976).
The final factor is the "interest of justice," a broad category relating to the "efficient functioning of the courts, not to the merits of the underlying dispute." Coffey v. Van Dorn Iron Works, 796 F.2d at 221. Encompassed within this category are the relative speed with which the case is likely to get to trial, the presence of related litigation in a particular forum, and in diversity cases, the advantage of having federal judges most familiar with the applicable state law try the case. Id.; see generally C. Wright & A. Miller, Federal Practice & Procedure, § 3854 (1976).
This court does not know the condition of the Massachusetts District Court docket, but things here are just fine; the court will be ready for trial when the parties are. And, as far as the court is aware, there is no related litigation in either district. As for the final item, the defendant contends it weighs in his favor because Massachusetts contract law will apply to this case, and a federal court sitting there will have a better feel for that law; yet he ignores one crucial point. Under Van Dusen v. Barrack, 376 U.S. 612, 11 L. Ed. 2d 945, 84 S. Ct. 805 (1964), the transferee court must apply state law in the exact manner in which the transferor court would have. Id. at 639. Thus, the transferee court must look to the choice of law rules of the transferor's state to determine the applicable law.
Here, the defendant appears correct that, under Illinois conflicts of law rules, Massachusetts law would govern the contract claim. This fact favors transfer, but only slightly. After all, contracts are contracts; it seems extremely unlikely that the Massachusetts federal court will have any noticeable advantage over this court in applying Massachusetts law.
More important, however, is that any such advantage would be more than offset by the legal issues surrounding the fraud claim. The defendant confidently has asserted that this claim poses no problem because it will be dismissed under the Illinois economic loss doctrine; yet, as discussed earlier, he is wrong. Whether the defendant's argument on this score constitutes a stipulation that Illinois law should govern the fraud claim presents an interesting question, see ante at p. 1209 n.5, but one this court need not resolve now. For even if the defendant has not so stipulated, Illinois principles of conflicts of law will determine which substantive law applies. This court, sitting in Illinois, is in a far better position to apply Illinois conflicts law than would be a Massachusetts federal court.
In sum, then, the "convenience of the parties" factor favors neither side, the "convenience of witnesses" factor marginally supports the defendant, and the "interest of justice" factor marginally supports the plaintiff. Thus, whether the plaintiff's choice of forum is considered as a fourth factor, or instead is viewed as imposing a heavier burden on the defendant in seeking transfer, the motion to transfer cannot prevail.
The defendant's motion to dismiss or transfer is denied.