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CF Industries v. Ben-Trei

August 27, 2009

CF INDUSTRIES, PLAINTIFF,
v.
BEN-TREI, LTD., DEFENDANT.



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

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court is Defendant Ben-Trei, Ltd.'s ("Ben-Trei") Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue, or, Alternatively Motion to Transfer Venue. For the reasons stated below, the Court finds that it lacks personal jurisdiction over Defendant and the action is dismissed. Because the action is dismissed, the Court does not reach Defendant's alternative argument in support of transferring the case to a different venue

I. BACKGROUND

Plaintiff CF Industries, Inc. ("CF") is a Delaware corporation with its principal place of business in Deerfield, Illinois. CF sells various types of fertilizer and has multiple distribution facilities, including one in Oklahoma. Defendant Ben-Trei, Ltd., is an Oklahoma corporation with its principal place of business in Tulsa, Oklahoma.

Ben-Trei does not maintain an office in Illinois but it conducts business with Illinois customers and vendors and leases fifteen railcars from an Illinois company for this purpose. From 2005 to April 2009, Ben-Trei shipped $7.6 million in product to Illinois, representing 1.2% of its total sales and .93% of its total revenue for that period. Ben-Trei also belongs to an Illinois trade association and sends two of its employees to the trade association's annual meeting in Illinois where they meet and solicit potential Illinois customers.

At some time prior to March 14, 2005, Ben-Trei negotiated the Master Product Sales Agreement ("MPSA") with Jeff Dye, a CF employee located in Oklahoma. The MPSA specified the terms and conditions under which Ben-Trei would purchase fertilizer from CF. Once the parties agreed upon its terms, Ben-Trei executed the MPSA in Oklahoma and then sent it to CF in Illinois where CF executed it on March 14, 2005.

Pursuant to the MPSA, Ben-Trei placed five separate orders for fertilizer with CF. Two of the five orders that Ben-Trei placed with CF called for CF to deliver fertilizer to Ben-Trei or its customers at CF's Oklahoma distribution facility. Two of the orders called for CF to deliver fertilizer to Ben-Trei in Oklahoma via river barge from Louisiana. The last order called for CF to ship fertilizer via rail to a customer that Ben-Trei would designate and did not contemplate CF shipping fertilizer from or to any location in Illinois.

Ben-Trei paid the requisite deposit to CF for each order by submitting payment electronically to CF's deposit account at Harris Bank in Illinois. CF filled three of Ben-Trei's orders but BenTrei failed to pay the balances on those orders when they became due on November 20, 2008. CF never filled the remaining two orders because, in or about December 2008, Ben-Trei notified CF that it was unable to pay for them. On March 3, 2009, CF filed suit against Ben-Trei in this Court asserting claims for breach of contract with respect to the three orders CF filled and anticipatory breach with respect to the two orders that CF did not fill.

On March 30, 2009, Ben-Trei filed the instant motion to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer the case to the Northern District of Oklahoma. The parties conducted limited discovery on the jurisdictional issue and the pending motion ensued. Because the Court finds that it lacks jurisdiction over Ben-Trei and dismisses the action, it does not reach Ben-Trei's argument in support of transferring the case to the Northern District of Oklahoma.

II. DISCUSSION

A. Standard of Review

When the Court rules on a defendant's motion to dismiss for lack of personal jurisdiction in reliance on the parties' written submissions, without an evidentiary hearing, the plaintiff "need only make out a prima facie case of personal jurisdiction." Hyatt Intern. Corp. v. Coco, 302 F.3d 707 (7th Cir., 2002). The Court resolves factual disputes in the pleadings and any affidavits in favor of the plaintiff but takes as true facts contained in the defendant's affidavits that the plaintiff does not refute. See RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir., 1997). The Court must also take as true those allegations in the complaint that are not controverted by the defendant's affidavits. Turnock v. Cope, 816 F.2d 332, 333 (7th Cir., 1987).

A federal district court exercising diversity jurisdiction has personal jurisdiction over a defendant "only if a court of the state in which it sits would have such jurisdiction." RAR, 107 F.3d at 1275 (citing Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir., 1995). For an Illinois court to have personal jurisdiction over a nonresident defendant, such jurisdiction must be permitted by (1) Illinois ...


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