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ZENITH ELECTRONICS v. WH-TV BROADCASTING

February 4, 2004.

ZENITH ELECTRONICS CORPORATION, Plaintiff/Counter-Defendant
v.
WH-TV BROADCASTING CORPORATION, Defendant/Counter-Plaintiff



The opinion of the court was delivered by: GEORGE LINDBERG, Senior District Judge

MEMORANDUM OPINION AND ORDER

WH-TV Broadcasting Corporation ("WH-TV") is a Puerto Rico corporation that operates a wireless cable television system in Puerto Rico. Zenith Electronics Corporation ("Zenith") is a Delaware corporation, with its principal place of business in Illinois. On February 20, 2002, this court denied WH-TV's motion to dismiss this action for lack of personal jurisdiction. Discovery was completed long ago, and WH-TV now moves for reconsideration of this court's February 20, 2002 order. For the reasons stated below, WH-TV's motion for reconsideration is denied.

I. Factual Background

  In 1998, WH-TV sought a proposal for the sale of set-top boxes ("STBs") from Zenith's Georgia office, for use in WH-TV's conversion to a digital television service. Negotiations ensued between WH-TV and Zenith. It appears that most of these negotiations took place in Puerto Rico and Georgia.*fn1 In May 1999, WH-TV sent three purchase orders, for a total of 6,900 Page 2 STBs, to Zenith's Illinois office. The STBs, which were manufactured in Mexico, were delivered to WH-TV in multiple shipments beginning in June 1999. WH-TV made payments to Zenith's Illinois office for the STBs shipped pursuant to these three purchase orders.

  In July 1999, WH-TV faxed its specifications for an electronic programming guide for the STBs to Zenith's Illinois office. Also in July 1999, Zenith's Illinois office sent WH-TV sample logos for WH-TV's new digital television service. WH-TV chose one of the samples, and sent its decision to Zenith's Illinois office by e-mail. In August 1999, WH-TV sent an e-mail to Zenith's Illinois office, with an additional inquiry relating to the logo.

  Beginning in August 1999, WH-TV reported problems with the STBs to Zenith's engineers in Illinois, and requested technical support. Between August 1999 and the end of 1999, WH-TV initiated numerous discussions with Zenith's Illinois office regarding the performance of the STBs. During that time, Zenith supplied several revised versions of software for the STBs in an effort to correct problems.

  On December 14, 1999, WH-TV sent a letter to Zenith's Illinois office requesting 2,000 additional STBs by March 7, 2000. The letter also requested technical support on a number of issues, requested additional training, and requested a simpler remote control. WH-TV sent a fourth purchase order, for the 2,000 STBs, to Zenith's Illinois office on December 23, 1999. Zenith shipped STBs pursuant to WH-TV's fourth purchase order in multiple shipments, with a final shipment of 500 STBs delivered on July 10, 2000.

  Between January 2000 and July 2000, when the final shipment of STBs was delivered, discussions continued between WH-TV and Zenith's Illinois office regarding the performance of the STBs. During that time, WH-TV sent numerous e-mails to Zenith's Illinois office reporting Page 3 problems, as well as reporting the results of Zenith's attempted fixes.

  On June 11, 2001, Zenith brought this action against WH-TV in the Northern District of Illinois, alleging breach of contract for WH-TV's failure to pay for the final shipment of STBs. WH-TV later counterclaimed for breach of contract and fraud.

  II. Legal Standard

  On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of proving that personal jurisdiction exists. Central States, S.E. & S.W. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 939 (7th Cir. 2000). 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.Inc. v. Turner Diesel. Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997).

  An Illinois court would have personal jurisdiction over a nonresident defendant only where it is permitted by state statutory law, state constitutional law, and federal constitutional law. Id. at 1276. Illinois' long-arm statute extends personal jurisdiction to the limit allowed under the Illinois Constitution and the Constitution of the United States. 735 ILCS 5/2-209(c); RAR. Inc., 107 F.3d at 1276. Thus, the court's inquiry collapses into a state and federal constitutional inquiry. RAR. Inc., 107 F.3d at 1276.

  Under the Illinois Constitution, jurisdiction 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.'" Hyatt Int'l Corp. v. Coco. 302 F.3d 707, 715 (7th Cir. 2002) (quoting Rollins v. Ellwood, 565 N.E.2d 1302, 1316 (Ill. 1990)). Since there is little guidance available regarding Page 4 the reach of the Illinois Due Process Clause, court typically look to the federal Due Process Clause for guidance. See, e.g., id. at 715-16; RAR, 107 F.3d at 1276-77. Thus, the court turns to the federal constitutional limits on jurisdiction.

  Under the United States Constitution, the Due Process Clause of the Fourteenth Amendment limits a state court's power to assert personal jurisdiction over a nonresident defendant. RAR. Inc., 107 F.3d at 1277. A defendant must have "certain minimum contacts [with the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and ...


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