contractor for Brandon but was interested in producing finished product
for Brandon. Bruce asked Anderson to send him information so that he
could provide a price quote. Anderson sent the requested information and
asked Bruce to advise her as to what Quitman's best F.O.B. price was. On
January 7, 1998, Bruce sent a letter to Anderson in Chicago stating
Quitman's best price for the garments.
After sending the letter and before March 4, 1998, Bruce tried calling
Anderson, but she never returned his calls, During this time, Bruce spoke
with Steve Everhart, who is associated with another apparel manufacturer
and who spoke periodically with Brad Keywell ("Keywell"), who is the
President of Brandon. Bruce asked Everhart to tell Keywell about
On March 4, 1998, Keywell called Bruce, stating that Everhart had told
him to call. Keywell invited Bruce to come visit Brandon's distribution
center in Chicago to talk about doing business together. Bruce then made
arrangements for him and Larry Snyder, a Quitman sales representative, to
go visit Brandon in Chicago.
On March 13, 1998, Bruce and Snyder visited Brandon in Chicago. Bruce,
Snyder, Keywell, and Eric Lefkofsky, who is Brandon's Chief Executive
Officer, were present for the meeting, during which the parties discussed
Brandon's needs for production and how Quitman could meet those needs.
The parties also discussed Quitman's quest to form an alliance with
another company in the sports apparel business. The meeting ended with
parties agreeing that Brandon would supply Quitman with information about
Brandon's needs for the Fall of 1998 so that Quitman could prepare a
price quote and that discussions would continue about how the two
companies could form an alliance of some sort. After the meeting, Bruce
and Snyder toured Brandon's facility.
After the March 13th meeting and before April 13, 1998 (the date on
which Quitman representatives would visit Brandon in Chicago again), the
parties sent a number of communications to one another. This included
Brandon faxing Bruce the information about Brandon's production needs for
the Fall of 1998 and Bruce faxing Brandon a list of the orders that
Brandon had given Quitman, which listed the quantities ordered and agreed
upon ship dates.
On April 14, 1998, Bruce and Snyder returned to Chicago, along with
Phillip Feinberg, who is the Secretary/Treasurer of Quitman, to visit
Brandon. The parties toured Brandon's facilities and discussed various
ways of integrating their organizations.
During April of 1998 through June of 1998, Brandon faxed Quitman many
purchase orders for the purchase and manufacture of thousands of
garments. The purchase orders identified the garments being purchased by
Brandon from Quitman, the garments being manufactured by Quitman for
Brandon, and the amount of money to be paid by Brandon to Quitman. The
purchase orders were prepared and completed in Chicago and were faxed to
Quitman's offices in New York. As part of the agreement, Brandon agreed
to, and did, supply Quitman with materials and supplies for the
manufacture of garments, which ended up being over $100,000 worth of
After the April 14th meeting and before the end of June 1998 (the time
at which Quitman representatives would visit Brandon for a third and
final time), the parties communicated back and forth with one another by
phone, fax, and letter with respect to matters concerning the purchase
orders. These communications included letters and faxes sent by Quitman
to Brandon in Chicago and telephone calls between Bruce and Keywell or
Lefkofsky in Chicago.
Pursuant to the purchase orders, Quitman made many shipments of goods
to Brandon. The first shipment was shipped overnight via United Parcel
Service. Quitman claims that besides the first shipment, all product was
picked up by Brandon in
Georgia rather than Quitman shipping the product to Illinois. According
to Carolyn Brooker (the Brandon employee who handled Brandon's
relationship with Quitman on a day-to-day basis), there were shipments
that were F.O.B. Georgia; however, there were also shipments where
Quitman sent the product to Illinois. In support of Brooker's statement,
Brandon submitted a copy of a Bill of Lading which shows that Quitman
shipped product to Illinois.
Meanwhile, discussions about the possibility of a merger between the
two companies continued. In June of 1998, Quitman representatives visited
Brandon in Chicago to conduct a due diligence investigation, during which
Quitman representatives discovered what they believed to be problems with
Brandon's accounting records. After the due diligence investigation,
Quitman representatives made no further trips to Illinois on behalf of
Brandon and all merger negotiations ceased. After that occurred, all
discussions between Brandon and Quitman were via telephone and fax and
consisted of discussions about shipping and payment. During the months
from June through mid-October of 1998, over 200 calls were placed from
Quitman to Brandon in Chicago, with at least 38 of those calls lasting
longer than two minutes.
According to Brandon, during the months from May through October of
1998, Bruce and Phillip made representations to Lefkofsky and Keywell
that Quitman would supply Brandon with quality goods in a timely fashion
and would use only the materials supplied by Brandon to Quitman for use
in garments that Quitman was making pursuant to a Brandon purchase
order. At the time that these representations were made, Lefkofsky and
Keywell were in Lefkofsky's office in Chicago. Brandon alleges that
despite these representations, Quitman failed to deliver the garments
ordered by Brandon in an acceptable condition and at the dates and times
agreed to by the parties. Brandon further alleges that Quitman refused to
use the materials and supplies provided by Brandon to manufacture the
garments ordered by Brandon and refuses to return the materials and
supplies to Brandon.
Based on the above, Brandon filed a complaint against Quitman in this
court, which was amended on November 16, 1998. The first amended
complaint contains claims for breach of contract, fraud and
misrepresentation, and unjust enrichment. This court has subject matter
jurisdiction over the case pursuant to 28 U.S.C. § 1332 as there
exists complete diversity between the parties and the amount in
controversy exceeds $75,000. In response to Brandon's complaint, Quitman
filed a motion to dismiss for lack of personal jurisdiction, to dismiss
for improper venue, or, alternatively, to transfer the case to the United
States District Court for the Middle District of Georgia pursuant to
28 U.S.C. § 1404 (a).
A. Quitman's motion to dismiss for lack of personal jurisdiction
Quitman has moved to dismiss for lack of personal jurisdiction, arguing
that Quitman's "contacts with Illinois do not meet the requirements of
due process under either the Illinois or United States Constitutions."
(Def.'s Mot. at 6.) Brandon opposes the motion, arguing that this court's
assertion of jurisdiction would not violate due process.
The standard for deciding a motion to dismiss for lack of personal
jurisdiction is straightforward. The plaintiff bears the burden of
proving that personal jurisdiction exists. RAR, Inc. v. Turner Diesel,
Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997); McIlwee v. ADM Indus., Inc.,
17 F.3d 222, 223 (7th Cir. 1994). In deciding a motion to dismiss for
lack of personal jurisdiction, the court may receive and consider
affidavits from the parties. Turnock v. Cope, 816 F.2d 332, 333 (7th
Cir. 1987). The court resolves factual disputes in the pleadings and
affidavits in favor of the plaintiff but takes as true those facts
contained in the defendant's affidavits that
remain unrefuted by the plaintiff. BAR, 107 F.3d at 1275; Boese v.
Paramount Pictures Corp., No. 93 C 5976, 1994 WL 484622, at "2 (N.D.Ill.
Sept. 2, 1994) (citing Nelson v. Park Indus., Inc., 717 F.2d 1120, 1123
(7th Cir. 1983)). The court must also accept as true those allegations in
the complaint which are uncontroverted by the defendant.'s affidavits.
Turnock, 816 F.2d at 333.
In a case based on diversity of citizenship, a federal district court
sitting in Illinois has personal jurisdiction over a nonresident
defendant only if an Illinois court would have jurisdiction. RAR, 107
F.3d at 1275. For an Illinois court to have personal jurisdiction over a
nonresident defendant, personal jurisdiction must be permitted by (1)
Illinois statutory law; (2) the Illinois Constitution; and (3) the
Constitution of the United States. Id. at 1276. With respect to Illinois
statutory law, the Illinois long-arm statute extends personal
jurisdiction to the limit allowed under the due process clauses of the
Constitution of the United States and Illinois Constitution. 735
ILL.COMP.SAT. § 5/209(c); RAR, 107 F.3d at 1276; Dehmlow v. Austin
Fireworks, 963 F.2d 941, 945 (7th Cir. 1992). Thus, in Illinois, the
court need only inquire whether personal jurisdiction is permitted by (1)
the Illinois Constitution and (2) the Constitution of the United States.
RAR, 107 F.3d at 1276; Banwell v. Illinois College of Optometry,
981 F. Supp. 1137, 1139 (N.D.Ill. 1997). If jurisdiction is improper
under either the United States or Illinois Constitution, the court cannot
exercise jurisdiction over the defendant. Glass v. Kemper Cop.,
930 F. Supp. 332, 337 (N.D.Ill. 1996).
1. Whether the Illinois Constitution permits personal jurisdiction
The Illinois Constitution contains a guarantee of due process which is
separate and independent from the federal due process clause. Rollins v.
Ellwood, 141 Ill.2d 244, 152 Ill.Dec. 384, 565 N.E.2d 1302, 1316 (1990).
"[T]he doctrine of constitutional avoidance counsels that `federal courts
should avoid addressing federal constitutional issues when it is possible
to dispose of a case on state grounds.'" RAP, 107 F.3d at 1276 (quoting
Triple G Landfills, Inc. v. Board of Comm'rs of Fountain County, Ind.,
977 F.2d 287, 291 (7th Cir. 1992)). Accordingly, the court must first
attempt to address whether the Illinois Constitution permits personal
jurisdiction in this case.
There are two problems with the court's attempting to address this
issue first. The first problem is that although "[t]he Illinois Supreme
Court has made it clear that the Illinois due process guarantee is not
necessarily co-extensive with the federal due process protections, . . .
the Illinois courts have given little guidance as to how state due
process protection differs from federal protection in the context of
personal jurisdiction." RAR, 107 F.3d at 1276. The Illinois Supreme Court
has only explained "that "`[j]urisdiction is to be asserted only when it
is fair, just, and reasonable to require a nonresident defendant to
defend an action in Illinois, considering the quality and nature of the
defendant's acts which occur in Illinois or which affect interests
located in Illinois.'" id. However, other than this general statement,
there is a paucity of case law on the issue.
The second problem with attempting to address the state constitutional
issue first is that the parties have failed to address this issue in
their briefs. Although Quitman argues that personal jurisdiction is not
permitted by the Illinois Constitution, Quitman offers not even a
scintilla of analysis on this issue. Quitman only analyzes the federal
Because there is no guidance on the difference between Illinois and
federal due process protections and because the parties have not
addressed this issue in their briefs, the court's analysis will focus on
the federal constitutional issue. See infra Part II.A.2. After addressing
the federal constitutional issue, the court will then revisit the state
constitutional issue. See infra Part II.A.3; see also Michael. J. Neuman
& Assocs. v. Florabelle Flowers,
Inc., 15 F.3d 721, 725 (7th Cir. 1994) ("While a court must conduct an
independent analysis of due process under Illinois law, it may look to
federal due process for guidance.").
2. Whether the Constitution of the United States permits personal
The Due Process Clause of the Fourteenth Amendment limits when a state
court may assert personal jurisdiction over a nonresident defendant.
RAP, 107 F.3d at 1277. Federal due process requires that the defendant
have "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.'" International Shoe Co. v. Washington,
326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v.
Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). Courts have
typically considered the due process analysis as a two-part inquiry: (1)
the court must determine whether minimum contacts exist and, if so, (2)
the court must determine whether the exercise of personal jurisdiction
comports with traditional notions of fair play and substantial justice.
Tingstol Co. v. Rainbow Sales, Inc., 8 F. Supp.2d 1113, 1115 (N.D.Ill.
In deciding whether the federal Constitution permits the exercise of
personal jurisdiction, the court is under no obligation to defer to
Illinois state courts' interpretation of federal law. RAP, 107 F.3d at
1276. State-court precedent is binding upon a federal court sitting in
diversity with respect to state-law issues; however, state-court
precedent is only persuasive authority with respect to issues of federal
law. Id. Thus, although the parties have relied on cases from the
Illinois state courts with respect to this issue, the court will look to
the body of federal case law to resolve the issue of whether the federal
constitution permits the exercise of personal jurisdiction in this case.
a. Whether Quitman has minimum contacts with Illinois
Minimum contacts are those acts by which the defendant has
"purposefully avail[ed] [himself] of the privilege of conducting
activities within the forum," Hanson v. Denckla, 357 U.S. 235, 253, 78
S.Ct. 1228, 2 L.Ed.2d 1283 (1958), such that he should "reasonably
anticipate being haled into court there." World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). If a
defendant has purposefully availed himself of the privilege of conducting
business within the state, he has enjoyed the benefits and protections of
that state's laws such that jurisdiction over him satisfies due process.
Hanson, 357 U.S. at 253, 78 S.Ct. 1228; Federated Rural Elec. Ins. Corp.
v. Inland Power & Light Co., 18 F.3d 389, 394 (7th Cir. 1994).
Subject to the limits of due process, a court may exercise two types of
personal jurisdiction over a nonresident defendant: general and specific.
Glass v. Kemper Corp., 930 F. Supp. 332, 338 (N.D.Ill. 1996). General
jurisdiction exists in cases where a defendant has "continuous and
systematic general business contacts" with a state which allows the
defendant to be sued in that state regardless of the subject matter of
the suit. Logan Productions, Inc. v. Optibase, Inc., 103 F.3d 49, 52 (7th
Cir. 1996) (citing Helicopteros Nacionales de Colombia, S.A v. Hall,
466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). Specific
jurisdiction exists in a case where the defendant has a lesser degree of
contact with the state, but the litigation arises out of or is related to
those contacts. Id.
In this case, Brandon argues that Quitman has sufficient minimum
contacts for this court to exercise both specific and general
jurisdiction over Quitman. The court first addresses whether it has
specific jurisdiction over Quitman.
In a specific jurisdiction case, the court must determine "whether a
`has purposefully established minimum contacts with the forum State'"
such that it should "reasonably anticipate being haled into court [in the
forum State]" because it has "`purposefully availed itself of the
privilege of conducting activities' there." RAP, 107 F.3d at 1277. To
determine whether specific jurisdiction exists, the court must assess the
relationship among the defendant, the forum, and the litigation. NUCOR
v. Aceros Y Maquilas de Occidente, S.A. de C.V., 28 F.3d 572, 580 (7th
Specific jurisdiction requires that the suit `arise out of' or "be
related to" the nonresident defendant's contacts with the forum state.
Helicopteros, 466 U.S. at 414 n. 8, 104 S.Ct. 1868; Wilson v. Humphreys
(Cayman) Ltd., 916 F.2d 1239, 1244 (7th Cir. 1990). The court "cannot
simply aggregate all of a defendant's contacts with a state-no matter how
dissimilar in terms of geography, time or substance-as evidence of the
constitutionally required minimum contacts." RAP, 107 F.3d at 1277. "[I]n
a breach of contract case, it is the `dealings between the parties in
regard to the disputed contract' that are relevant to minimum contacts
analysis." Id. at 1278 (emphasis in original). In a case where the
parties have engaged in an ongoing commercial relationship involving
repeated transactions over time, the only past contacts which are
relevant to personal jurisdiction are those "past contacts involving the
forum state [that] either bear on the substantive legal dispute between
the parties or inform the court regarding the economic substance of the
Applying the above principles, the court finds that Quitman has
purposefully established minimum contacts with Illinois sufficient to
justify exercising specific jurisdiction over Quitman. First, it is
undisputed that Quitman regularly contacted Brandon in Illinois via
telephone, fax, and letter regarding the disputed contracts. See Heritage
House Restaurants v. Continental Funding, 906 F.2d 276, 283 (7th Cir.
1990) (finding jurisdiction where the defendant created a relationship
which was naturally based on telephone and mail contacts rather than
physical presence). For example, during the months from June through
mid-October of 1998, Quitman placed over 200 telephone calls to Brandon
in Chicago, with at least 38 of those calls lasting longer than two
minutes. These communications concerned price quotes, shipping
information, production issues, payment issues, and other issues
regarding the contracts in dispute. It makes no difference that the vast
majority of contact between the parties occurred via telephone, fax, and
letter. As the Supreme Court has stated:
[I]t is an inescapable fact of modern
commercial life that a substantial
amount of business is transacted solely
by mail and wire communications across
state lines, thus obviating the need for
physical presence within a State in
which business is conducted. So long as
a commercial actor's efforts are "purposefully
directed" toward residents of
another State, we have consistently rejected
the notion that an absence of
physical contacts can defeat personal
Burger King Corp. v. Rudzewicz,