The opinion of the court was delivered by: Gottschall, District Judge.
MEMORANDUM OPINION AND ORDER
Plaintiffs, Spherion Corporation and Spherion Atlantic
Enterprises LLC (collectively, "Spherion"), filed this diversity
suit against defendant Cincinnati Financial Company ("CFC"),
alleging breach of a computer consulting services contract.
Spherion claims that CFC breached the contract by not paying fees
due under the contract prior to its termination. One minute after
Spherion filed this suit, CFC and several of its subsidiaries
filed suit in the Southern District of Ohio against Spherion for
breach of the same contract. In the present action, CFC has moved
for dismissal for lack of personal jurisdiction and improper
venue under Fed.R.Civ.P. 12(b)(2) and (b)(3), or, alternatively,
for a stay of these proceedings. CFC has also moved for transfer
of venue to the Southern District of Ohio under 28 U.S.C. § 1404(a).
For the reasons set forth below, this court grants CFC's
motion to transfer and denies as moot CFC's motion to dismiss or
stay the proceedings.
CFC is an Ohio corporation with its principal place of business
in Ohio. Spherion Corporation is a Delaware corporation with its
principal place of business in Florida. Spherion Atlantic
Enterprises LLC is a Delaware limited liability company with its
principal place of business in Florida. Spherion has offices in
Oak Brook, Illinois, which oversaw at least part of its
performance of the agreement. Spherion also maintained an Ohio
office, which was opened specifically to work on the contract.
In 1996, CFC and its subsidiaries, collectively known as "the
Cincinnati Companies," entered into an agreement with Anatec, a
Michigan company, under which Anatec was to design and deliver
software called the Commercial Personal Rewrite Project, or CPR
Project. Anatec was a subsidiary of Norell Corporation, a Texas
company, which merged in July 1999 with Interim Services, Inc.
("Interim"), a Florida company. Interim was the surviving entity
and later changed its name to Spherion. Spherion administered its
role in the CPR Project from its Illinois division in Oak Brook.
According to CFC, the information department of its subsidiary,
Cincinnati Insurance Company ("CIC"), administered the agreement
on behalf of the Cincinnati Companies.
On July 18, 2000, CIC/CFC terminated Spherion, allegedly for
cause. The parties attempted to negotiate their differences
informally, then participated in mediation as mandated by the
contract. The parties agreed during the course of mediation that
either party could declare an impasse and an intent to terminate
the mediation with seven days' notice. CFC did so on March
26, 2001, setting a termination date of April 2, 2001, at 12:00
p.m. Chicago time. On April 2, Spherion filed this suit, and the
Cincinnati Companies filed suit against Spherion in Ohio.
II. Personal Jurisdiction and Venue
As plaintiff, Spherion has the burden of providing sufficient
evidence to establish a prima facie case of personal
jurisdiction. Michael J. Neuman & Assocs. v. Florabelle Flowers,
Inc., 15 F.3d 721, 724 (7th Cir. 1994). The allegations in the
complaint are taken as true unless controverted by the
defendants' affidavits; and any conflicts in the affidavits are
resolved in the plaintiff's favor. Turnock v. Cope,
816 F.2d 332, 333 (7th Cir. 1987). On this record, the question of whether
Spherion has met this burden is very close.
Under Illinois law, the long-arm statute permits in personam
jurisdiction over a party to the extent allowed under federal due
process. See 735 ILCS 5/2-209(c); Dehmlow v. Austin
Fireworks, 963 F.2d 941, 945 (7th Cir. 1992). Jurisdiction is
constitutional if haling CFC into this court would not offend
"traditional notions of fair play and substantial justice."
Int'l Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90
L.Ed. 95 (1945). The requisite minimum contacts are tantamount to
conduct by which "the defendant purposefully avails itself of the
privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws." Burger King
v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528
(1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct.
1228, 2 L.Ed.2d 1283 (1958)). If defendant's contacts with the
forum state are sufficiently "substantial[,] . . . continuous and
systematic," personal jurisdiction may exist for a cause of
action unrelated to those contacts. Perkins v. Benguet Consol.
Mining Co., 342 U.S. 437, 447-48, 72 S.Ct. 413, 96 L.Ed. 485
(1952). If a nonresident defendant's contacts are not sufficient
to support general jurisdiction, a defendant may still be subject
to specific jurisdiction for claims arising out of or related to
its purposefully directed activities within the state. Burger
King, 471 U.S. at 472 n. 15, 476, 105 S.Ct. 2174. Spherion
claims that this court has both specific and general personal
jurisdiction over CFC.
Supported by affidavit, Spherion alleges that CFC management
personnel traveled to the Chicago area on three different
occasions for business purposes directly related to the goals of
the CPR Project, that CFC solicited visits from and had numerous
discussions with Spherion's management personnel in Oak Brook,
that CFC retained two consultants based in the Chicago area to
perform services for a companion project to the CPR Project, and
that CFC requested and approved efforts by Spherion to recruit
Illinois residents to work on the CPR Project. CFC responds with
its own affidavit, asserting that all of the alleged conduct was
undertaken by CIC, not CFC, personnel, that the Chicago
consultants were working on an unrelated project, and that any
relevant contact with the Oak Brook office occurred after 1999,
near the end of the CPR Project. Spherion comes back with
additional declarations stating that Don Doyle, acting on behalf
of CFC, engaged in telephone conferences, email correspondence,
and correspondence by United States mail with Oak Brook
personnel. Spherion also argues that CIC was acting as CFC's
Even after resolving these factual disputes in Spherion's favor
(as this court must), specific personal jurisdiction is not
clear. It was Spherion, not CFC, that decided to transfer its
management of the CPR Project to the Oak Brook office. Arguably,
CFC did not purposefully direct its activities toward Illinois.
Div. of Nissan Motor Corp. of U.S.A. v. Gunn Infiniti, Inc.,
No. 93-C-7846, 1994 WL 374254, *2, 1994 U.S. Dist. LEXIS 9675, at
*6-7 (N.D.Ill. July 13, 1994) ("Gunn did not elect to business
with an Illinois resident, but with a California resident which
in turn chose to delegate the maintenance of the business
relationship to a regional office in Illinois."); see also
Burger King, 471 U.S. at 472, 105 S.Ct. 2174 ("Jurisdiction is
proper . . . where the contacts proximately result from actions
by the defendant himself that create a substantial connection
with the forum State.") (internal quotation marks omitted);
Hanson, 357 U.S. at 253, 78 S.Ct. 1228 ("The unilateral
activity of those who claim some relationship with a nonresident
defendant cannot satisfy the requirement of contact with the
forum State."). But this argument does not address Spherion's
allegations that, quite apart from any Oak Brook connection, CFC
personnel traveled to Illinois and recruited Chicago-area
consultants for contract-related purposes.
General jurisdiction is similarly murky. In addition to the
project-specific contacts, Spherion cites six suits brought by
CFC in Illinois since 1996 and a website through which it
solicits on-line employment applications from Illinois residents.
On the lawsuits, CFC counters that it was not the real
party-in-interest in five and that the court in the sixth held
that CFC was not subject to taxation in Illinois because, inter
alia, it had not office, assets, or employees in Illinois, had
conducted no business in Illinois, and was not registered to do
business in Illinois. Cincinnati Cas. Co. v. Bower, No.
00-L-050254, at 2, 15 (Ill.Cir. Ct. 2001). Even assuming that CFC
was actually a plaintiff in all six lawsuits, general personal
jurisdiction on this basis alone is constitutionally uncertain.
Cf. Continental Cas. Co. v. State of New York Mortgage Agency,
No. 94-C-1463, 1994 WL 532271, *7-10, 1994 U.S. Dist. LEXIS
13617, at *29-31 (N.D.Ill. Sept.21, 1994) (holding that bringing
13 lawsuits constituted purposeful availment).
CFC claims that the website solicited applications for its
subsidiaries, not for itself, and that it has never hired anyone
through the website. By inviting viewers to submit employment
applications on-line, the website apparently falls in the middle
ground between sites where contracts are actually entered into
and purely passive sites where information is posted. See Zippo
Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D.Pa.
1997). Given that CFC claims to have no employees in Illinois,
there is some question as to whether the invitation was truly
directed to Illinois residents. Cf. LaSalle Nat'l Bank v.
Vitro, 85 F. Supp.2d 857, 862 n. 5 (N.D.Ill. 2000) ("The most
that [the plaintiff] can say is that [the defendant's website] is
targeted to the Western Hemisphere, which happens to include
Illinois."); Bensusan Rest. Corp. v. King, 937 F. Supp. 295, 301
(S.D.N.Y. 1996) (website created by Missouri nightclub was not
directed at viewers in New York and did not constitute purposeful
availment there), aff'd, 126 F.3d 25 (2d Cir. 1997). As in
Search Force, Inc. v. Dataforce International, Inc.,
112 F. Supp.2d 771, 779 (S.D.Ind. 2000), "[n]o evidence has been
produced that communication via these sites has occurred between
[the defendant] and potential IT recruits or employers residing
in [the forum state], let alone that any communication occurred
which gave rise to a contractual or on-going business
relationship between [the defendant] and a [forum state]
resident or entity." Standing alone, the website probably does
not give rise to general personal jurisdiction.