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Unidex Group, Inc. v. ECSI International

February 9, 2010


The opinion of the court was delivered by: Judge James B. Zagel


Plaintiff, Unidex Group, Inc. ("Unidex") filed a complaint against Defendant ECSI International, Inc. ("ECSI") alleging breaches of two contracts, seeking accountings for both contracts, and requesting a declaratory judgment as to the rights and obligations under one of the contracts. ECSI seeks to dismiss Unidex's complaint pursuant to Fed. R. Civ. P. 12(b)(1), (2) and (3) for lack of jurisdiction and venue; and, in the alternative, seeks to compel arbitration. For the following reasons, Defendant's motion to dismiss is granted.


Defendant ECSI International, Inc. ("ECSI") is a New Jersey corporation with corporate headquarters located in New Jersey. ECSI is in the business of supplying security equipment to government agencies and non-governmental customers in the United States and overseas. Plaintiff Unidex Group, Inc. ("Unidex") is an Illinois corporation that sells and distributes industrial supplies and equipment. Pursuant to various agreements between ECSI and Unidex signed in April of 1997, January of 2000, and February of 2009, as well as other less formal agreements, Unidex marketed and sold ECSI's products in Asia.

The 2000 Agreement and the 2009 Agreement are at issue in this case. Unidex maintains that the 2000 agreement gave Unidex the exclusive right to market the sale, installation, and service of security systems manufactured by ECSI in Korea and China. Unidex further claims that the 2009 agreement gave Unidex the exclusive right to market ECSI's products in South Korea. In its complaint, Unidex alleges that ECSI breached the exclusivity provisions of these agreements by allowing one or more other firms to serve as ECSI sales representatives in Korea. The issues I must consider in deciding ECSI's motion to dismiss are: (1) whether personal jurisdiction exists; (2) whether subject-matter jurisdiction exists; and (3) whether this venue is improper. If jurisdiction does exist and this venue is proper, I must consider whether to compel arbitration.


A federal district court can exercise two types of personal jurisdiction over an out-of-state defendant like ECSI - general and specific. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002).*fn1

Under either the general or specific rubric for exercising personal jurisdiction, the Fourteenth Amendment Due Process Clause requires that Defendant have "minimum contacts" with the forum state "such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice." Id. at 716 (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)). Defendant must have "purposefully established minimum contacts within the forum State" in order for the exercise of personal jurisdiction to be reasonable and fair. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985). Crucial to the minimum contacts analysis is a showing that ECSI "should reasonably anticipate being haled into court [in the forum State]," id. at 474 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)), because Defendant has "purposefully avail[ed] itself of the privilege of conducting activities" there. Hanson v. Denckla, 357 U.S. 235, 253 (1958).

As Plaintiff, Unidex has the burden of demonstrating the existence of personal jurisdiction. GCIU-Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). Because I am deciding this issue based on written submissions, Unidex must establish a prima facie case of personal jurisdiction. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782-83 (7th Cir. 2003). I must resolve conflicts between the parties' written submissions in favor of Unidex, but once Defendant ECSI "has submitted affidavits or other evidence in opposition to the exercise of jurisdiction, . . . [Unidex] must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction." Id. at 783. In other words, although I must resolve "factual disputes in the pleadings and affidavits in favor of the party asserting jurisdiction," I must also "take . . . 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) (citing Jamik, Inc. v. Days Inn of Mount Laurel, 74 F. Supp. 2d 818, 821 (N.D. Ill. Nov. 30, 1999).*fn2

A. General Jurisdiction

General jurisdiction over an out-of-state defendant is permitted where the defendant has "continuous and systematic general business contacts" with the forum state, even if the suit does not arise out of or relate to the defendant's contacts. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984). The Seventh Circuit has held that these continuous and systematic contacts "must be so extensive to be tantamount to [the defendant] being constructively present in the state to such a degree that it would be fundamentally fair to require it to answer in [the state's] court in any litigation arising out of any transaction or occurrence taking place anywhere in the world." Purdue, 338 F.3d at 787.

The only contacts Unidex puts forward to establish general jurisdiction is ECSI's allegedly constant shipment of its products to Illinois. In support, Unidex offers a declaration from its president Jong Kim stating that 95% of ECSI's shipments to Korea were delivered by ECSI to Unidex's shipping company in the Chicago area before subsequent shipping to Asia. Unidex also provides freight and cargo receipts, which it claims establish that ECSI shipped their products to Illinois. These receipts do not indicate whether ECSI or Unidex arranged and paid for the pick up and delivery of the ECSI products.

ECSI contests Unidex's allegations and maintains that ECSI never shipped any products purchased by Unidex to Illinois. Rather, ECSI claims that Unidex chose the place to which the goods would be shipped and arranged and paid for pick-up of the goods. In support, ECSI offers a declaration from its president Arthur Birch and an invoice from an ECSI-Unidex shipment stating that the shipment was "To Be Picked Up By Forwarder As Designated by UNIDEX."

Def.'s Rep., Ex. 3. This evidence, which was not refuted by Unidex, demonstrates that Unidex arranged for the shipment of ECSI goods into Illinois. There is no indication that ECSI requested that their products be shipped to Illinois or any indication that they otherwise purposefully established this contact. Such "unilateral activity" cannot be used to establish minimum contacts for purposes of exercising personal jurisdiction. Helicopteros, 466 U.S. at 416 (holding that alleged contact with forum state was too unilateral to be considered for personal jurisdiction analysis where defendant accepted ...

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