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C.H. Johnson Consulting, Inc. v. Roosevelt Roads Naval Station Lands

United States District Court, Seventh Circuit

November 5, 2013

C.H. JOHNSON CONSULTING, INC., Plaintiff,
v.
ROOSEVELT ROADS NAVAL STATION LANDS AND FACILITIES REDEVELOPMENT AUTHORITY, Defendant.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, Jr., District Judge.

Plaintiff C.H. Johnson Consulting, Inc. ("CHJC") has sued Defendant Roosevelt Roads Naval Station Lands and Facilities Redevelopment Authority ("Roosevelt Roads") for breach of contract, unjust enrichment, and an equitable lien. Defendant has moved to dismiss for lack of personal jurisdiction, or in the alternative, requested a change of venue to the United States District Court for the District of Puerto Rico [11], arguing that venue is not proper in the Northern District of Illinois. For the reasons stated below, the Court denies Defendant's motion to dismiss for lack of personal jurisdiction or improper venue [11] and also denies Plaintiff's motion to open and supplement briefing schedule [28].

I. Background

Rule 12(b)(2) states that an action against a party over whom the Court lacks personal jurisdiction must be dismissed. Fed.R.Civ.P. 12(b)(2). Plaintiff has the burden of establishing a prima facie case of personal jurisdiction. See Steel Warehouse of Wis., Inc. v. Leach, 154 F.3d 712, 714 (7th Cir. 1998). When determining whether Plaintiff has met its burden, jurisdictional allegations pleaded in the complaint are accepted as true unless proved otherwise by affidavits or exhibits. See Purdue Research Found. v. Sanofi-Sythelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003); Travelers Cas. & Sur. Co. v. Interclaim (Bermuda) Ltd., 304 F.Supp.2d 1018, 1021 (N.D. Ill. 2004). In addition, any conflicts in the affidavits regarding relevant facts must be resolved in Plaintiff's favor. See Purdue, 338 F.3d at 782 (citations omitted). But "once the defendant has submitted affidavits or other evidence in opposition to the exercise of jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction." Id. at 783.

According to Defendant, Roosevelt Roads is a "public corporation and a governmental entity of the Commonwealth of Puerto Rico, " created for the purpose of economic redevelopment of the lands and facilities at a former Navy base located in Ceiba, Puerto Rico, and to regulate usage of the lands and facilities. Defendant's place of business is located in San Juan, Puerto Rico. In 2009, Defendant was looking for a firm to provide consultation in the development of the former Navy base. Roosevelt Roads' executive director at that time, Jaime Gonzalez, had worked with Plaintiff CHJC in 1997, when the Puerto Rico Tourism Company hired CHJC for consultation in developing Puerto Rico's new convention center. CHJC is an Illinois corporation that provides economic development and planning services.

In February 2009, Gonzalez contacted Charles Johnson, the president of CHJC, to discuss the possibility of retaining CHJC's services. Following their conversation, CHJC and Roosevelt Roads entered into a series of contracts and agreements for the redevelopment of lands located in Ceiba, Puerto Rico. The first contract covered the period of May 13, 2009 through June 30, 2009. The second contract covered the period of July 1, 2009 through June 30, 2010, and the third contract covered the period of May 2, 2010 through June 30, 2010.[1] Each contract was signed and executed in Puerto Rico and was entered for the purposes of securing and providing consulting services in strategic planning, advice in gaming legislation, and financial modeling in order to develop the Ceiba property. Gonzalez traveled to Chicago in June 2009 to discuss renewal of the contract for the period of July 2009 through June 2010. During this time, Gonzalez and Johnson also prepared for a briefing to be held at an economic summit in Puerto Rico in late June 2009.

According to CHJC, Roosevelt Roads also authorized CHJC to hire sub-contractors- including Chicago Consulting Studios (CCS), a Chicago-based consulting firm-to perform work on the 2009-2010 contract. When CCS completed work under its 2009 sub-contract with CHJC, which term ended December 31, 2009, Roosevelt Roads contracted directly with CCS for CCS's services.

As a result of Roosevelt Roads' dealings with CHJC and CCS, Erwin Kiess, who replaced Gonzalez as executive director of Roosevelt Roads, traveled to Chicago several times between December 2009 and August 2011. Roosevelt Roads also participated in telephone calls and teleconferences with CCS and CHJC in Chicago during the time period at issue and exchanged "hundreds of emails, faxes, and phone calls" with CHJC and CCS. In total, CHJC alleges that Roosevelt Roads held approximately nine meetings in Chicago to discuss execution of the project with CHJC and CCS. Although the current record does not support a finding that a Roosevelt Roads' representative was present in person for each meeting, it appears that a Roosevelt Roads' representative was present for at least five or six of the nine meetings and also participated by phone during other meetings. In turn, CHJC representatives traveled to Puerto Rico on various occasions to perform obligations under the contract. However, according to CHJC's president, most of the work performed by CHJC was performed in Chicago.

II. Personal Jurisdiction

A. Legal Standard

A federal court sitting in diversity in Illinois will have personal jurisdiction over a defendant only if jurisdiction is proper under Illinois's long-arm statute. Citadel Grp. Ltd. v. Wash. Reg'l Med. Ctr., 536 F.3d 757, 760 (7th Cir. 2008). Thus, courts examine three "distinct obstacles to personal jurisdiction:" (1) state statutory law, (2) state constitutional law, and (3) federal constitutional law. See RAR, Inc. v. Turner Diesel Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). But because the Illinois long-arm statute authorizes personal jurisdiction to the constitutional limit, the analysis "collapse[s] into two constitutional inquiries - one state and one federal." RAR, 107 F.3d at 1276.

The Seventh Circuit has noted that "there is no operative difference between the limits imposed by the Illinois Constitution and the federal limitations on personal jurisdiction, " Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2003), despite a cautionary pronouncement in a 1990 Illinois Supreme Court decision suggesting that the state and federal standards may not be co-extensive. See Rollins v. Elwood, 565 N.E.2d 1302, 1316 (Ill. 1990); see also Hyatt Int'l, 302 F.3d at 715 (acknowledging Rollins, but noting that even if the Illinois state and federal due process standards hypothetically might diverge, no basis for such a divergence existed in the case before it). In light of the Seventh Circuit's assessment in Hyatt and the absence of post- Rollins guidance from the Illinois courts as to how Illinois and federal law may differ as a practical matter in regard to personal jurisdiction, a single due process inquiry will suffice. See Hyatt, 302 F.3d at 715; Kostal v. Pinkus Dermatopathology Lab., P.C., 827 N.E.2d 1031, 1037 (Ill.App.Ct. 1st Dist. 2005) (noting that the court had not located any post- Rollins cases finding that federal due process requirements had been met where Illinois due process requirements were not).

The federal test for personal jurisdiction under the Due Process Clause of Fourteenth Amendment authorizes a court to exercise jurisdiction over a non-resident defendant only if the defendant has "certain minimum contacts with [the state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). "[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). This "purposeful availment" requirement ensures that a non-resident defendant will not be forced to litigate in a jurisdiction as a result of random contacts with the forum or the unilateral activity of the plaintiff. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75 (1985).

In addition, the Supreme Court has distinguished two types of personal jurisdiction: general and specific. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-16 (1984); see also uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 425-26 (7th Cir. 2010). General jurisdiction exists where the defendant has "continuous and systematic" contacts with the forum state. Helicopteros, 466 U.S. at 416. If such contacts exist, "the court may exercise personal jurisdiction over the ...


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