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SUTHERLAND v. CYBERGENICS CORP.

December 8, 1995

RALPH SUTHERLAND, Plaintiff,
v.
CYBERGENICS CORPORATION and MATT CHAMLIN, Defendants.



The opinion of the court was delivered by: ALESIA

 Now before the court is defendants Cybergenics Corporation and Matt Chamlin's motion to dismiss or, in the alternative to transfer, pursuant to FED. R. CIV. P. 12(b)(2) and 28 U.S.C. § 1404(a), respectively. As set forth more fully below, the court denies the defendants' motion to dismiss for lack of personal jurisdiction, and grants defendants' motion to transfer.

 I. FACTS

 Defendant Matt Chamlin ("Chamlin") is the president of Cybergenics Corporation ("Cybergenics") and works from an office in Westchester County, New York. Defendant Cybergenics is a Delaware corporation with its principal place of business in New Jersey. Cybergenics is in the business of manufacturing and selling nutritional products.

 On or about February 15, 1995, Chamlin contacted Martin Kartin Associates, an executive recruiting firm in Manhattan. Chamlin told Martin Kartin ("Kartin") that Cybergenics was looking to hire an individual to come into the sales department with the potential of someday heading up the department. Chamlin gave Kartin the job of locating such a person.

 Shortly thereafter, Kartin telephoned Chamlin to arrange a meeting in New York between Ralph Sutherland ("Sutherland"), the plaintiff in this case, and Chamlin to discuss Sutherland's potential employment with Cybergenics. On or about February 22, 1995, Chamlin did meet with Sutherland and Kartin to discuss the position. At the meeting, they discussed what it would take to get Sutherland to accept the position, however no final agreement was reached.

 Shortly after that meeting, Chamlin telephoned Sutherland at his home in Illinois and extended to him an offer of employment. The parties negotiated various terms of the deal and agreed that Sutherland would commence employment around March 1, 1995. *fn1" They also agreed and understood that plaintiff would not be able to physically move to the east coast prior to March 1, but that he and his family would move as soon as reasonably convenient thereafter.

 Sutherland did begin working in early March, 1995, as agreed, and shortly afterwards received a written employment contract from Cybergenics. Since the contract was consistent with the arrangement made with Chamlin, Sutherland signed it and returned it to Cybergenics.

 Plaintiff alleges that at all times he performed as a loyal and faithful employee of Cybergenics but that Chamlin developed a personal animosity to plaintiff and secretly set about to replace him. He also alleges that by mid-June, 1995, Chamlin had already decided to replace plaintiff but instead lied to Sutherland about his future at the firm in order to induce the plaintiff to remain at Cybergenics until his replacement was in place. Relying on Chamlin's representations, Sutherland did not renew his lease in Illinois, agreed to lease a home in New York, and soon thereafter drove his car to New York.

 On July 10, 1995, plaintiff was told for the first time that another sales executive had been hired. At this time, he was not told that he would be fired. On July 20, 1995, however, Chamlin did inform Sutherland that he was terminated immediately. Plaintiff alleges that he was terminated without cause or justification.

 II. DISCUSSION

 A. Personal Jurisdiction

 This action was removed from the Illinois state court because it qualifies as a diversity case under 28 U.S.C. § 1332. In a case based on diversity of citizenship, a federal district court in Illinois has personal jurisdiction over nonresident defendants only if an Illinois court would have jurisdiction. Daniel J. Hartwig Assoc., Inc. v. Kanner, 913 F.2d 1213, 1216 (7th Cir. 1990). In determining whether a state court has jurisdiction a court needs to make a two-part inquiry: "(1) whether the state statute allows jurisdiction, and (2) whether the assertion of jurisdiction complies with constitutional due process standards." Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir. 1990), cert. denied, 499 U.S. 947, 111 S. Ct. 1415, 113 L. Ed. 2d 468 (1991). Here, these two inquiries collapse into one because Illinois' long-arm statute extends personal jurisdiction to the limit allowed under the due process clause of the fourteenth amendment. *fn2" Dehmlow v. Austin Fireworks, 963 F.2d 941, 945 (7th Cir. 1992); Mors v. Williams, 791 F. Supp. 739, 741 (N.D. Ill. 1992); see also Wilson, 916 F.2d at 1243. Therefore, the court's sole inquiry is whether the district court could, consistent with due process, assert in personam jurisdiction over the defendants. Wallace v. Herron, 778 F.2d 391, 393 (7th Cir. 1985), cert. denied, 475 U.S. 1122, 106 S. Ct. 1642, 90 L. Ed. 2d 187 (1986).

 The Due Process Clause operates to limit the power of a State to assert in personam jurisdiction over nonresident defendants. Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565 (1878). Due process requires that the defendant have "minimum contacts with [the forum] such that the maintenance of the suit does not afford 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, ...


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