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February 16, 2000


The opinion of the court was delivered by: Nordberg, Senior District Judge.


This is a diversity action challenging the fairness of the court-approved sale of Anchor Glass Container Corporation ("Anchor"), which was a former indirect subsidiary of defendant Vitro, Sociedad Anonima de Capital Variable ("Vitro"). Vitro has filed a motion to dismiss for lack of personal jurisdiction, pursuant to Fed. R.Civ.P. 12(b)(2), and argues that it is a Mexican holding corporation with no jurisdictionally relevant contacts to Illinois. Plaintiff argues that Vitro is really a "super-corporation" actively controlling a number of U.S. subsidiaries which, together, have enough Illinois contacts to support jurisdiction over their parent corporation. For the reasons set forth below, the motion is granted.


Defendant Vitro is a Mexican corporation headquartered in San Pedro Garza Garcia, Nuevo Leon, Mexico. Vitro is described in the complaint as a "multinational holding company, who through its direct and indirect subsidiaries is a leading manufacturer of glass and household products in 60 countries, worldwide, including the United States." (Am.Cmplt. ¶ 4.) Some of these subsidiaries are headquartered in the United States, although none of them is headquartered or incorporated in Illinois. These subsidiaries produce various glass products that allegedly "are marketed and sold to residents of the State of Illinois." (Id.) However, Vitro itself does not manufacture any of these products.

Plaintiff — LaSalle Bank N.A., as Preference Litigation Trustee ("LaSalle") — is a national bank headquartered in Chicago. LaSalle serves as a litigation trustee for the holders of certain senior subordinated debentures issued in 1993 by Anchor. In November 1989, Vitro acquired, through a wholly-owned subsidiary, all of the stock of Anchor. Anchor was a Delaware corporation formed in 1983 to manufacture and sell glass containers primarily in the beverage and food industries. Anchor owned approximately 13 glass manufacturing facilities in 11 states. One of those facilities was located in Waukegan, Illinois. In September 1996, Anchor filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware. Thereafter, Anchor was sold to a third party, although much of the negotiations for the sale took place before the bankruptcy filing. The asset sale was approved by the bankruptcy court after two days of hearings in December 1996.

The complaint focuses on that sale and specifically on Vitro's role in managing it. LaSalle alleges that Vitro, as the indirect owner of Anchor, orchestrated the sale in such a way as to benefit Vitro at the expense of the debenture holders. Vitro allegedly manipulated the sale by having the purchaser assume certain debts of Anchor for which Vitro (as the parent) was secondarily liable. These debts included pension and environmental liabilities. The net effect of this arrangement was that the purchaser paid less in cash, which in turn meant that there was a reduced amount of cash to compensate the debenture holders. In other words, certain debts were given preference over others. This preference allegedly violated the debenture holders' contractual rights to be treated equally with the other non-senior debt of Anchor. The debenture holders ultimately received only a small distribution and now ask that Vitro be held responsible for the repayment of the debentures.*fn1

On December 24, 1998, LaSalle filed its original complaint here in the Northern District of Illinois. As a basis for jurisdiction over Vitro, LaSalle alleged that Anchor conducted activities in Illinois and that other subsidiaries of Vitro introduced products into the stream of commerce in Illinois. (Cmplt. ¶ 7.) Vitro then filed a motion to dismiss, arguing generally that it only had de minimis contacts with Illinois, that the contacts of Vitro's subsidiaries should not be imputed to Vitro, and that, even if they were, they were not enough to confer jurisdiction over their parent corporation. In its response brief, LaSalle added additional grounds for jurisdiction and requested permission to take discovery on the jurisdictional question. After Vitro filed its reply, we granted LaSalle 45 days to take discovery on the jurisdictional question. Each party then filed a supplemental brief, and LaSalle filed an amended complaint, which included all of its current grounds for personal jurisdiction.


The parties agree on the basic legal framework to resolve this motion. LaSalle, as the plaintiff, bears the burden of establishing that there is personal jurisdiction over Vitro. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275-76 (7th Cir. 1997). However, this court must resolve any factual disputes in favor of LaSalle. Id.

Because the federal basis of jurisdiction is diversity, LaSalle must show that the law of the forum state (Illinois) would permit the exercise of jurisdiction over Vitro and that such an exercise would not violate Vitro's constitutional due process rights. Id. Because the Illinois long-arm statute allows jurisdiction to be exercised to the extent permitted by due process, these two inquiries essentially collapse into one such that we may focus on the basic question of whether personal jurisdiction is permitted under the federal and state constitutional due process rights. Id.; see 735 ILCS 5/2-209.*fn2

In RAR, the Seventh Circuit provided the following succinct summary of the federal due process standard in this context:

The Due Process Clause of the Fourteenth Amendment limits when a state may assert in personam jurisdiction over nonresident individuals and corporations. See Pennoyer v. Neff, 95 U.S. 714, 733, 24 L.Ed. 565 (1878). A defendant must have "certain minimum contacts with [the 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)). What the standard means in a particular case depends on whether the state asserts "general" or "specific" jurisdiction. Specific jurisdiction refers to jurisdiction over a defendant in a suit "arising out of or related to the defendant's contacts with the forum." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). General jurisdiction, meanwhile, is for suits neither arising out of nor related to the defendant's contacts, and it is permitted only where the defendant has "continuous and systematic general business contacts" with the forum. Id. at 416, 104 S.Ct. 1868.

107 F.3d at 1277 (parallel citations omitted).

In arguing that there is jurisdiction over Vitro, LaSalle relies on a number of disparate facts and legal theories. In particular, LaSalle relies not only on contacts of Vitro itself, but also on the contacts of Vitro's subsidiaries. LaSalle also argues that there is a basis for both specific and general personal jurisdiction. We first discuss the argument for specific jurisdiction, which (in our opinion) is the weaker of the two arguments, and then turn to general jurisdiction.*fn3

I. Specific Jurisdiction.

We do not find this argument persuasive. It rests on a skewed interpretation of the complaint. In order to make the argument work, LaSalle implies that its current claims relate to the specific debts in Illinois. If true, you would expect that the complaint would discuss some of the details and facts concerning such debts. Yet, as we read the complaint, it focuses solely on how those debts were later treated in the sale (i.e., why did the purchaser assume those debts rather than paying cash?) and does not hinge on anything unique to those debts. In its supplemental response brief, LaSalle seems to recognize this point when it states that this case "centers around . . . the manner in which Anchor's assets were managed, marketed and sold in Anchor's bankruptcy proceeding." (LaSalle Am.Resp. at 3.) In other words, the whole focus of the ...

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