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Chicago Regional Council of Carpenters v. Joseph J. Sciamanna

June 3, 2009

CHICAGO REGIONAL COUNCIL OF CARPENTERS; UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, A VOLUNTARY ASSOCIATION; JESUS HEURTA; AND IGNACIO CASTILLO, LLC, PLAINTIFFS,
v.
JOSEPH J. SCIAMANNA, INC., A MICHIGAN CORPORATION; SCIAMANNA GROUP EAST, LLC, A MICHIGAN LIMITED LIABILITY COMPANY; DOMINGO CASTILLO, D/B/A DOMINGO DRYWALL AND BANKSTON ENTERPRISES. LLC, A MISSISSIPPI LIMITED LIABILITY COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Harry D. Leinenweber, Judge United States District Court

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Presently before the Court is Defendants' Motion to Dismiss Plaintiffs' Second Amended Complaint pursuant to Federal Rules of Civil Procedure 11(a), 12(b)(2), 12(b)(5), and 12(b)(6). For the following reasons, the Motion is granted in part and denied in part.

I. BACKGROUND

On June 18, 2008, Plaintiffs Chicago Regional Council of Carpenters, Jesus Huerta, and Ignacio Castillo filed a Complaint in the Circuit Court of Cook County against Defendants Joseph J.

Sciamanna, Inc. ("Sciamanna Inc."), Joseph J. Sciamanna ("Mr. Sciamanna"), and other defendants. The Complaint alleged that Defendants misclassified their employees as independent contractors in violation of the Illinois Employee Classification Act, 820 ILCS 185/1, et seq. (the "Illinois ECA"). Plaintiffs sought declaratory, equitable, and monetary relief.

Defendants Sciamanna Inc. and Mr. Sciamanna removed the case to this Court based on diversity jurisdiction. Defendants then moved to dismiss on the basis that: (1) the Illinois ECA does not provide a private cause of action against Mr. Sciamanna as an individual, and (2) Sciamanna Inc. was not a proper party because the contracts at issue were with an affiliated company, Sciamanna Group East, LLC ("Sciamanna LLC"). On October 23, 2008, the Court granted the motion to dismiss as to Mr. Sciamanna with prejudice and as to Sciamanna Inc. without prejudice. Chicago Reg. Council of Carpenters v. Joseph J. Sciamanna, Inc., No. 08 C 4636, 2008 WL 4696162 (N.D.Ill., Oct. 23, 2008). The Court granted Plaintiffs leave to amend the Complaint to state a claim against Sciamanna LLC and to allege a claim against Sciamanna Inc. based on a theory of fraud or alter ego if such evidence existed. Id.

On November 7, 2008, Plaintiffs filed a Second Amended Complaint, essentially raising the same allegations, but now naming Sciamanna Inc. and Sciamanna LLC as alter egos. On December 12, 2008, Defendants Sciamanna Inc. and Sciamanna LLC filed a motion to dismiss: (1) Defendant Sciamanna Inc. for lack of personal jurisdiction and failure to state a claim for alter ego liability;

(2) Defendant Sciamanna LLC for inadequate service of process; (3) Plaintiff Carpenters Union for failure to state a claim under the Illinois ECA; and (4) Plaintiffs Huerta and Castillo for failure to comply with Federal Rule of Civil Procedure 11(a).

III. ANALYSIS

A. Defendant Sciamanna Inc.

Defendants first argue that Sciamanna Inc. should be dismissed for lack of personal jurisdiction pursuant to Rule 12(b)(2) because Plaintiffs have failed to allege sufficiently their alter ego theory, the only basis for asserting personal jurisdiction against Sciamanna Inc. Alternatively, Defendants contend that the claims against Sciamanna Inc. should be dismissed pursuant to Rule 12(b)(6) for failure to state a claim based on the alter ego theory. The Court first considers the motion to dismiss for lack of personal jurisdiction. See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 93-102 (1998). If the Court determines that it lacks jurisdiction over Sciamanna Inc., it will become unnecessary to consider the motion to dismiss for failure to state a claim.

1. Personal Jurisdiction

An action against a party over whom the Court lacks personal jurisdiction must be dismissed. FED. R. CIV. P. 12(b)(2). A complaint need not include facts alleging personal jurisdiction.

Steel Warehouse of Wisconsin, Inc. v. Leach, 154 F.3d 712, 715 (7th Cir., 1998). However, once a defendant moves to dismiss the complaint under Rule 12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden of establishing the existence of jurisdiction. See Purdue Research Foundation v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir., 2003). If the defendant submits affidavits or other evidence opposing the exercise of jurisdiction, "the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction." Id. "The Court resolves factual disputes in the pleadings and affidavits in favor of the party asserting jurisdiction, but takes as true those facts contained in the defendant's affidavits that remain unrefuted by the plaintiff." C.S.B. Commodities, Inc. v. Urban Trend (HK) Ltd., No. 08 C 1548, 2009 WL 57455, *3 (N.D.Ill., Jan. 7, 2009).

Plaintiffs' asserted basis for personal jurisdiction over Sciamanna Inc. is that it is the alter ego of Sciamanna LLC, the entity that conducts business in Illinois and purportedly executed contracts with Plaintiffs Huerta and Castillo. Since this Court has personal jurisdiction over Sciamanna LLC, if these two entities are alter egos, then the Court also would have personal jurisdiction over Sciamanna Inc. See Minnesota Mining & Mfg. Co. v. Eco Chem, Inc., 757 F.2d 1256, ...


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