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BRANDON APPAREL GROUP v. QUITMAN MANUFACTURING CO.
March 18, 1999
BRANDON APPAREL GROUP, INC., PLAINTIFF,
QUITMAN MANUFACTURING COMPANY INC., DEFENDANT.
The opinion of the court was delivered by: Alesia, District Judge.
MEMORANDUM OPINION AND ORDER
Before the court is defendant Quitman Manufacturing Company, Inc.'s
motion (1) to dismiss for lack of personal jurisdiction; (2) to dismiss
for improper venue; or, alternatively, (3) to transfer venue. For the
following reasons, the court denies defendant's motion in full.
Plaintiff Brandon Apparel Group, Inc. ("Brandon") is a Delaware
corporation that has its corporate headquarters and principal place of
business in Chicago, Illinois. Defendant Quitman Manufacturing Company,
Inc. ("Quitman") is a Georgia corporation that has its principal place of
business in Georgia. Brandon is a manufacturer and distributor of
licensed apparel that is embroidered with the logos of various athletic
teams. Brandon purchases blank garments from companies such as Quitman,
embroiders the logos on the garments, and then sells the garments to its
customers, which include major retail department stores. Brandon also
purchases fully embroidered garments from companies such as Quitman and
then packages and sells these garments to its customers.
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.
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 ...