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Flexicorps, Inc. v. Benjamin & Williams Debt Collectors

May 29, 2007


The opinion of the court was delivered by: Judge Virginia M. Kendall


Plaintiff Flexicorps, Inc. brings this putative class action against Defendants for alleged violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, the Illinois Consumer Fraud and Deceptive Practices Act ("ICFA"), 815 Ill. Comp. Stat. 505/2, and for conversion. Plaintiff's claims arise from a fax allegedly sent by Defendant Benjamin & Williams Debt Collectors, Inc. ("BW Debt Collectors") to Plaintiff. Benjamin and Williams Consulting Inc. ("BW Consulting") and Benjamin and Williams Marketing Corp. a/k/a Benjamin and Williams Credit Investigators, Inc. ("BW Marketing") were corporations formed to continue the business of BW Debt Collectors. William Mecca is the sole shareholder in all three corporations. Defendants collectively have moved to dismiss this action on the basis of forum non conveniens or, alternatively, to transfer the action to the United States District Court for the Eastern District of New York under 28 U.S.C. § 1404(a). If neither of these motions is granted, Mecca separately moves to dismiss all claims against him on the grounds that this Court has no jurisdiction over him personally.

Because Mecca has not had sufficient contacts with Illinois, this Court cannot exercise personal jurisdiction over him. Notwithstanding this Court's lack of personal jurisdiction over Mecca, neither the convenience of the parties and witnesses nor the interests of justice require this Court to transfer this action under § 1404(a) or dismiss it on grounds of forum non conveniens.

Plaintiff's Allegations

On March 1, 2004, BW Debt Collectors transmitted by telephone facsimile machine an unsolicited advertisement to Plaintiff's telephone facsimile machine. (Compl. ¶ 12.) Mecca is President and sole shareholder of BW Debt Collectors. (Compl. ¶ 10.) Mecca also wholly owns BW Consulting and BW Marketing. (Compl. ¶ 11.) After Plaintiff initiated the instant litigation, Mecca transferred to BW Consulting and BW Marketing the accounts and assets of BW Debt Collectors. (Compl. ¶ 11.) BW Consulting and BW Marketing now operate with the same employees, telephone numbers and website as BW Debt Collectors. (Compl. ¶ 11.)

Defendants have sent thousands of unsolicited facsimile advertisements throughout the United States. (Compl. ¶ 14.) By sending these unsolicited faxes to Plaintiff and the other class members, Defendants violated the ICFA and TCPA.*fn1 (Compl. ¶¶ 16-29; 40-50.) Defendants also improperly and unlawfully converted Plaintiff's and other class members' fax machine toner, paper, memory, and employee time to Defendants' own use. (Compl. ¶¶ 30-39.)


All Defendants have moved to dismiss or transfer this matter in the interests of convenience and justice. Mecca himself moves to dismiss Plaintiff's claims, pursuant to Federal Rules of Civil Procedure 12(b)(2), for lack of personal jurisdiction. Because it will inform the transfer inquiry, this Court will look first at whether it has jurisdiction over Mecca personally. See Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp., 127 S.Ct. 1184, 1194 (2007) ("In the mine run of cases, jurisdiction 'will involve no arduous inquiry' and both judicial economy and the consideration ordinarily accorded the plaintiff's choice of forum 'should impel the federal court to dispose of [those] issue[s] first.'" (citation omitted)).

I. Personal Jurisdiction

A plaintiff bears the burden of "demonstrating the existence of personal jurisdiction." RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). Although a court must take the allegations made in the complaint as true, these allegations can be disputed and opposed by affidavits. See Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987) (superceded by statute on other grounds). If any conflicts exist between a plaintiff's and defendant's affidavits, the conflicts are resolved in the plaintiff's favor. See id.

A federal court may assert personal jurisdiction over a defendant if there is either consent to a service of summons or, in the absence of consent, authorization for a service of summons. See Omni Capital Int'l Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). Mecca has not consented to service in Illinois. The Federal Rules of Civil Procedure authorize service in the state in which the district court resides, or beyond the limits of that state when authorized by a federal statute or the Rules. FED. R. CIV. P. 4(f). A party not "found within the state in which the district court is held" may be served "in the manner prescribed by the statute" giving rise to the cause of action. Id. 4(e); see also Omni Capital, 484 U.S. at 105. If the federal statute does not prescribe a method of service, "service may . . . be made under the circumstances and in the manner prescribed in [the] statute or rule" of a court of the state in which the district court resides. FED. R. CIV. P. 4(e). Therefore, a federal court will look to either the federal statute giving rise to the cause of action or the long-arm statute of the state in which it sits in order to determine whether the assertion of personal jurisdiction over the absent defendant is proper. See Omni Capital, 484 U.S. at 105.

The TCPA does not speak to how process is to be served in private actions. 47 U.S.C. § 227.*fn2 The Illinois long-arm statute contains a "catch-all" provision that "permits its courts to exercise jurisdiction on any basis permitted by the Illinois and United States Constitutions." Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 714-15 (7th Cir. 2002) (citing 735 Ill. Comp. Stat. 5/2-209(c)). Because there is no "operative difference" between the limits on personal jurisdiction in the Illinois and United States Constitutions, the Seventh Circuit has instructed a district court to look directly at whether the due process guaranteed in the United States Constitution allows for the exercise of personal jurisdiction over a defendant. Hyatt, 302 F.3d at 715 (citing RAR, 107 F.3d at 1276).

In order to satisfy federal due process, a defendant must have sufficient contact with the state such that the assertion of jurisdiction will not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). In establishing jurisdiction over a non-resident defendant, a court may look to either general jurisdiction or specific jurisdiction. See RAR, Inc., 107 F.3d at 1277. If a defendant's contact with the state has been "continuous and systematic," the court may assert general jurisdiction even if the suit did not arise out of those contacts. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984). If a defendant has not had continuous and systematic contact with the forum state, personal jurisdiction is conditioned upon there being a sufficient amount of minimum contacts and the lawsuit at issue arising from, or being related to, those contacts. See id. at 414 n.8; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985).

Plaintiff alleges that Mecca does business in Illinois and purposefully directed BW Debt Collectors' business activities into Illinois. Plaintiff further alleges that Mecca "authorized, permitted and actively participated" in sending the advertising fax to Flexicorps. (Compl. ΒΆ 10.) Without controverting evidence, these allegations would be taken as true. In an affidavit, Mecca asserts that he is a resident of the State of New York, owns no property in Illinois, has no other fiduciary interests in Illinois, conducts no personal business in Illinois, and has not traveled to Illinois since 1974. Further, in his deposition, Mecca denied authorizing, directing or requesting that the fax be sent to Flexicorps. In response, Plaintiff offers evidence that BW Debt Collectors reached into Illinois in order to solicit business and perform services. Plaintiff also points out that Mecca was the sole shareholder of BW Debt Collectors; a corporation that held no shareholder meetings, elected no officers and drafted no corporate minutes. On Mecca's whim, all of BW Debt Collectors' assets and employees were transferred to the newly formed BW Consulting and BW ...

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