The opinion of the court was delivered by: Elaine E. Bucklo, United States District Judge:
MEMORANDUM OPINION AND ORDER
Quantum Color Graphics, LLC ("Quantum") sues The Fan Association Event
Photo GmbH ("GmbH") and Fans United AG, both German corporations, as well
as The Fan Association USA, LLC ("USA LLC"), a California limited
liability corporation, and Guido Karp, a resident of Germany, for breach
of contract. I have subject matter jurisdiction based on diversity and
alienage under 28 U.S.C. § 1332. I entered a default judgment against
the USA L.L.C., see Minute Order of June 8, 2001, and the record does not
reflect that service has been made on Fans United AG. Karp and GmbH move
to dismiss the complaint, and I deny the motion.
Karp and GmbH argue that Quantum fails to state a claim for breach of
contract and that Quantum has failed to sufficiently allege the requisite
contacts with Illinois to support the exercise of personal jurisdiction
over them. On a motion to dismiss for lack of jurisdiction, I read the
complaint liberally and accept as true the well pleaded allegations of
the complaint and the inferences that may be reasonably drawn from those
allegations. Sapperstein v. Hager, 188 F.3d 852, 855 (7th Cir. 1999). I
may consider evidence outside of the complaint, and "[t]he presumption of
correctness . . accord[ed] to a complaint's allegations falls away on the
jurisdictional issue once a defendant proffers evidence that calls the
court's jurisdiction into question." Id. at 855-56. Once challenged with
evidence, the "plaintiff has the obligation to establish jurisdiction by
competent proof." Id. at 855.
The first issue concerns whether Quantum can establish that the amount
in controversy exceeds $75,000, as required for alienage jurisdiction.
The defendants argue that by lumping all of the defendants together,
Quantum engaged in artful pleading "to prevent [the] Court from reaching
the inevitable conclusion that if plead[ed] properly, the Complaint
cannot set forth the required amount in controversy for diversity
jurisdiction against any one of the defendants." Motion at 5 n. 4. In
their reply brief, the defendants argue that Quantum could not aggregate
its claims against the defendants because it did not allege that they
were jointly liable. Ordinarily, claims raised for the first time in
reply are waived, see Kauthar SDN BHD v. Steinberg, 149 F.3d 659, 668
(7th Cir. 1998); United States v. Cherif, 943 F.2d 692, 700 (7th Cir.
1991) (same for footnote), but I have an independent duty to police
subject matter jurisdiction even if the parties raise no objection, see
Amgen, Inc. v. Kidney Center of Delaware County, Ltd., 95 F.3d 562, 567
(7th Cir. 1996).
Although Quantum contends that the defendants are alter egos, the
defendants argue that, because Quantum failed to state specifically
whether it seeks to hold the defendants jointly or severally liable, it
has failed to properly plead jurisdiction. The Seventh Circuit has held
that a plaintiff may aggregate claims against multiple defendants where
it demonstrates a reasonable probability that the corporate veil should
be pierced. Middle Tenn. News Co., Inc. v. Charnel of Cincinnati, Inc.,
250 F.3d 1077, 1081-82 (7th Cir. 2001) (Indiana law). In Illinois,
corporate "alter egos" are jointly and severally liable for breach of
contract. See, e.g., Knickman v. Midland Risk Servs.-Ill., Inc.,
700 N.E.2d 458, 460-62 (Ill.App. Ct. 1998). In order to pierce the
corporate veil and hold alter egos jointly liable, a plaintiff must be
able to prove "(1) a unity of interest and ownership that causes the
separate personalities of the corporation[S] and the individual to no
longer exist; and (2) the presence of circumstances under which adherence
fiction of a separate corporate existence would sanction a fraud,
promote injustice or promote inequitable consequences." Jacobson v.
Buffalo Rock Shooters Supply, Inc., 664 N.E.2d 328, 331 (Ill.App. Ct.
Quantum "believes that Karp has utilized the three corporate defendants
interchangeably in an attempt to avoid the amounts due and owing via a
corporate shell game." Compl. ¶ 17. Quantum says as well that Karp
is a principal of the three corporate defendants. Id. ¶ 5. The
defendants do not challenge the underlying facts, only the legal
conclusion that they should be subject to joint liability, so I must
accept the factual allegations as true. Sapperstein, 188 F.3d at 855-56.
Moreover, based on the correspondence submitted by Quantum in its
surreply, which I may consider in ascertaining whether I have subject
matter jurisdiction, id., it appears that Karp identified himself with
all three corporate defendants and that orders were submitted by GmbH but
billed to USA LLC. I may reasonably infer for the purposes of this motion
that Quantum could prove a unity of interest that destroys the separate
personalities of the defendants, and if Karp has abused the corporate form
to avoid obligations to Quantum, that would certainly "promote
injustice." If Quantum can establish alter ego liability, the defendants
may be held jointly liable, so the claims against each defendant could be
aggregated for jurisdictional purposes. Quantum has sufficiently alleged
the required amount in controversy for alienage jurisdiction.
Both GmbH and Karp move to dismiss for lack of personal jurisdiction
under Fed.R.Civ.P. 12(b)(2). I have personal jurisdiction over a
defendant "only if a court of the state in which [I] sit would have
such jurisdiction." Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir. 1995).
The plaintiff has the burden of showing that jurisdiction is proper under
(1) the Illinois long-arm statute, 735 ILCS 5/2-209, (2) Illinois
constitutional law, and (3) federal constitutional law. RAR, Inc. v.
Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). The Illinois
long-arm statute authorizes personal jurisdiction to the limits of the
Illinois and federal constitutions, § 2-209(c), so the inquiry
collapses into two constitutional inquiries — state and federal.
107 F.3d at 1276.
I must attempt to avoid reaching federal constitutional questions where
the case can be disposed of on state law grounds, so I address the
Illinois constitutional question first. Id. The Illinois Supreme Court
has held that Illinois due process is not necessarily co-extensive with
federal due process, though federal law may inform the state inquiry.
Rollins v. Ellwood, 565 N.E.2d 1302, 1316 (Ill. 1990). Illinois courts
have given little guidance on how Illinois due process varies from
federal concerns, RAR, Inc., 107 F.2d at 1276-77, but they "have upheld
(under the state constitution) personal jurisdiction "over a non-resident
corporate purchaser engaged in a commercial relationship with an Illinois
corporation through the placing of purchase orders to the plaintiff in
Illinois for products manufactured in Illinois.'" Id. at 1276 (citing
Autotech Controls Corp. v. N.J. Elec. Corp., 628 N.E.2d 990, 995-96
(Ill.App. Ct. 1993); G.M. Signs, Inc. v. Kirn Signs, Inc., 596 N.E.2d 212,
214-15 (Ill.App. Ct. 1992)). These are the same operative facts on which
Quantum relies to establish personal jurisdiction, so RAR might be read
to mean that Illinois due process would not be offended by the exercise
of personal jurisdiction in this case.
In Autotech, the court found no violation of Illinois due process where
the non-resident defendant had a distributorship agreement with an
Illinois company under which it submitted orders by telephone and
facsimile, returned some goods to Illinois for repairs, and breached the
contract by failing to pay. 628 N.E.2d at 994-95. The only basis for
distinguishing Autotech is the return of non-conforming goods for
repair; however, that is roughly comparable to the present defendants'
shipment of a CD-rom to Quantum for use in one printing job, so there is
no meaningful distinction to be ...