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UNITED PHOSPHORUS, LTD. v. ANGUS CHEMICAL COMPANY
March 24, 1999
UNITED PHOSPHORUS, LTD., ET AL., PLAINTIFFS,
ANGUS CHEMICAL COMPANY, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Manning, District Judge.
Defendant Lupin Laboratories, Ltd. and D.B. Gupta's renewed motion to
dismiss for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12
(b)(2) is before the court. For the following reasons, the motion is
The plaintiffs in this antitrust action claim that the defendants
— Angus Chemical Company and its corporate officers, Freeman
Hughes, Ollie Chandler, Lowell Pals, and Gary Granzow (collectively,
"Angus"), Angus Chemie GmbH ("Chemie"), and Lupin Laboratories, Ltd. and
its officer and owner D.B. Gupta (collectively, the "Lupin defendants")
— engaged in various anti-competitive acts to prevent them from
entering the United States and world markets for two chemicals,
1-Nitropropane ("1-NP") and 2-Amino-1-Butanol ("AB"). AB is the key
ingredient in Ethambutol, a drug used to treat tuberculosis, while 1-NP
is the raw material used to make AB.
For the purposes of this order, the court will assume familiarity with
its prior decisions: (1) granting the Lupin defendants' first motion to
dismiss for lack of personal jurisdiction and permitting the plaintiffs
to amend their complaint; and (2) denying the plaintiffs' motion to
reconsider. See United Phosphorus, Ltd. v. Angus Chemical Co., No. 94 C
2078, 1996 WL 164394 (N.D.Ill. Apr.2, 1996); United Phosphorus, Ltd. v.
Angus Chemical Co., No. 94 C 2078 (N.D.Ill. Mar. 20, 1997) (unpublished
order); see also United Phosphorus, Ltd. v. Angus Chemical Co., No. 94 C
2078, 1994 WL 577246 (N.D.Ill. Oct.18, 1994). At this time, the
plaintiffs have amended the jurisdictional allegations in their complaint
directed at the Lupin defendants and the parties have completed the
discovery necessary to determine if personal jurisdiction over the Lupin
defendants is proper.
A. Standard for a Motion to Dismiss Under Fed.R.Civ.P. 12(b)(2)
B. Can the Court Consider Contacts by the Lupin Defendants Which
Occurred After the Complaint was Filed?
As a threshold matter, the court must first address whether the Lupin
defendants' contacts with Illinois after the filing of the complaint on
April 4, 1994 are relevant. The Lupin defendants assert that the clock
stopped on the day the complaint was filed, while the plaintiffs claim
that all contacts with Illinois, regardless of when they occurred, are
relevant. For the purposes of this inquiry, it is important to note that
this is a specific jurisdiction case, as the Lupin defendants' contacts
with Illinois arise from their alleged involvement in a conspiracy and
the Angus defendants. Thus, a brief recap of principles relating to
specific jurisdiction is in order.
The central inquiries with respect to specific jurisdiction are whether
the defendant purposefully established minimum contacts with the forum
state and whether those contacts would make personal jurisdiction
reasonable and fair under the circumstances. RAR, Inc. v. Turner Diesel,
Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997), citing Burger King v.
Rudzewicz, 471 U.S. 462, 476-77, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).
"Crucial to the minimum contacts analysis is showing that the defendant
`should reasonably anticipate being haled into court' [in the forum
state] because the defendant has `purposefully avail[ed] itself of the
privilege of conducting activities there.'" Id. (citations omitted).
Factors such as the parties' negotiations, the future consequences
contemplated by the parties, the terms of any contract at issue, and the
parties' actual course of dealings are relevant and must indicate the kind
of purposeful availment that makes litigation in the forum state
foreseeable to the defendant. Id.
The focus on whether a defendant has purposefully availed itself of the
privilege of conducting activities in the forum state necessarily implies
that only conduct prior to the accrual of the cause of action or, at the
very latest, the filing of the lawsuit is relevant. In other words,
"purposeful availment" implies that the defendant, as shown by its
activities, intended to be amenable to suit in the forum state. Conduct
post-dating the filing of a complaint by definition cannot show that, when
the defendant engaged in the post-complaint acts purportedly supporting
jurisdiction, it intentionally exposed itself to the possibility of an
event which had already occurred (the filing of a complaint in the forum
While Sportmart understandably occupies a starring role in the Lupin
defendants' briefs, the plaintiffs assert that the Seventh Circuit has
subsequently held that all contacts — both pre and post-filing
— are relevant, citing to Logan Productions, Inc. v. Optibase,
Inc., 103 F.3d 49, 53 (7th Cir. 1996), Dehmlow v. Austin Fireworks,
963 F.2d 941, 947-48 (7th Cir. 1992), and Daniel J. Hartwig Associates,
Inc. v. Kanner, 913 F.2d 1213, 1218-20 (7th Cir. 1990). They also direct
the court to the Supreme Court's decision in Asahi Metal Industry Co. v.
Superior Court, 480 U.S. 102, 114, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987).
The Lupin defendants attempt to distinguish these cases by claiming
that this is a specific jurisdiction case but that the cited cases
address whether general personal jurisdiction (which is based on evidence
of continuous and systemic contacts between the defendant and the forum
state) exists. See Dehmlow v. Austin Fireworks, 963 F.2d at 948 n. 6
(general jurisdiction requires evidence of continuous and systematic
contacts with the forum state, while specific jurisdiction "rests on the
defendant's contacts with the forum state regarding the transaction
underlying [the] litigation"). They also attempt to distinguish the cases
by contending that they turn on whether the defendants had the requisite
ongoing intent to serve the forum state (i.e., a "stream of commerce" or
"intent to serve the forum state" theory). According to the Lupin
defendants, because this case deals with contacts arising out of a
conspiracy, the "stream of commerce"/"intent to serve the forum state"
cases are inapposite.
Both sides' positions are problematic. First, an attempt to distinguish
these cases based on the distinction between specific and general
jurisdiction is unconvincing, as at least one of the cases cited by the
plaintiffs — Logan Productions, Inc. v. Optibase, Inc. —
unequivocally states that it is a specific jurisdiction case. 103 F.3d at
52. Second, the Lupin defendants' "stream of commerce"/"intent to serve
the forum state" distinction is unavailing because the complaint
expressly alleges that the conspiracy is ongoing. An ongoing conspiracy
is analogous to ongoing contacts with ...