United States District Court, N.D. Illinois, Eastern Division
PENTWATER EQUITY OPPORTUNITIES MASTER FUND, LTD., PWCM MASTER FUND LTD., PENTWATER CAPITAL MANAGEMENT L.P., and MATTHEW HALBOWER, Plaintiffs,
BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C., Defendant.
MEMORANDUM ORDER AND OPINION
M. Dow, Jr., United States District Judge
matter is before the Court on Plaintiffs' motion for
relief from judgment from the Court's February 5, 2016
order  granting Defendant's motion to dismiss for
lack of personal jurisdiction. In that order, the Court
concluded that it did not have specific personal jurisdiction
over Defendant and closed the case; however, the Court did
not consider, in the alternative, whether it could exercise
general personal jurisdiction over Defendant based on its
contacts with the State of Illinois. Therefore, on February
22, 2016, the Court entered an order  reopening the case
to allow the parties to present their arguments concerning
whether Plaintiffs should be allowed to conduct discovery on
the limited issue of general personal jurisdiction. Having
fully considering the parties briefs and supporting
documentation, see , , , , and , the
Court concludes that Plaintiffs have failed to make a
prima facie showing that the Court has general
personal jurisdiction over Defendant and therefore are not
entitled to conduct discovery on the limited issue of general
personal jurisdiction. Because discovery into general
personal jurisdiction would be futile, and the Court has
already determined that it does not have specific personal
jurisdiction, the Court dismisses Plaintiffs' complaint
for lack of personal jurisdiction over Defendant.
Pentwater Equity Opportunities Master Fund, PWCM Master Fund
Ltd. (collectively, the “Funds”), Pentwater
Capital Management L.P. (“Pentwater”) and Matthew
Halbower (“Halbower”) bring suit against
Defendant Baker, Donelson, Bearman, Caldwell & Berkowitz,
P.C. (“Defendant”) for declaratory relief,
fraudulent inducement, fraudulent misrepresentation, and
fraudulent concealment. The background of this case is set
forth in the Court's February 5, 2016 order ,
knowledge of which is assumed here. Any additional relevant
facts identified by the parties are discussed in the
Court's analysis below.
purposes of the instant motion, the Court accepts as true the
factual allegations relevant to jurisdiction made in
Plaintiffs' complaint, and draws all reasonable
inferences in Plaintiffs' favor. Cent. States, Se.
& Sw. Area Pension Fund v. Phencorp Reinsurance Co.,
Inc., 440 F.3d 870, 878 (7th Cir. 2006). The Court also
resolves any disputes concerning relevant facts in
Plaintiffs' favor. Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003). To the extent that Defendant has submitted affidavits
opposing jurisdiction or contradicting Plaintiffs'
allegations, however, Plaintiffs must go beyond the pleadings
and submit affirmative evidence supporting the exercise of
jurisdiction. Id. at 783.
complaint need not allege personal jurisdiction, but once a
defendant moves to dismiss on that ground, the plaintiff
bears the burden of establishing that jurisdiction is proper.
Purdue Res. Found v. Sanofi-Synthelabo, S.A., 338
F.3d 773, 782 (7th Cir. 2003). Under Seventh Circuit case
law, “it is within the discretion of the district court
to allow a plaintiff to conduct limited discovery in order to
establish that jurisdiction exists.” Sanderson v.
Spectrum Labs, Inc., 248 F.3d 1159, 2000 WL 1909678, at
*3 (7th Cir. 2000). However, the “plaintiff must
establish a colorable or prima facie showing of personal
jurisdiction before discovery should be permitted.”
Cent. States, Se. & Sw. Areas Pension Fund v. Reimer
Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000).
In other words, a plaintiff seeking jurisdictional discovery
must advance “proof to a reasonable probability”
of the facts necessary to establish federal jurisdiction.
Anthony v. Sec. Pac. Fin. Servs., Inc., 75 F.3d 311,
316 (7th Cir. 1996); see also Indag GmbH & Co. v. IMA
S.P.A, 150 F.Supp.3d 946, 971 (N.D. Ill. 2015).
jurisdiction can be either general or specific, depending on
the extent of the defendant's contacts with the forum
state.” uBID, Inc. v. GoDaddy Grp., Inc., 623
F.3d 421, 425 (7th Cir. 2010). The Court previously concluded
that it did not have specific personal jurisdiction over
Defendant because Plaintiffs failed to establish that the
effects of Defendant's allegedly tortious conduct would
be felt in Illinois. In this order, the Court focuses on
whether Plaintiffs have made a prima facie showing
of general personal jurisdiction, such that they should be
permitted to take limited discovery to establish
jurisdiction. Reimer, 230 F.3d at 946.
defendant is subject to general jurisdiction when it has
‘continuous and systematic general business
contacts' with the forum state.” uBID, 623
F.3d at 425 (citing Helicopteros Nacionales de Colombia,
S.A. v. Hall, 466 U.S. 408, 415-16, (1984)). “This
is a demanding standard that requires the defendant to have
such extensive contacts with the state that it can be treated
as present in the state for essentially all purposes.”
Id. at 426. “The standard for general
jurisdiction is demanding because the consequences can be
severe: if a defendant is subject to general jurisdiction in
a state, then it may be called into court there to answer for
any alleged wrong, committed in any place, no matter how
unrelated to the defendant's contacts with the
Supreme Court has recently emphasized that the relevant
inquiry “is not whether a foreign corporation's
in-forum contacts can be said to be in some sense
‘continuous and systematic, ' it is whether that
corporation's ‘affiliations with the State are so
continuous and systematic as to render [it] essentially at
home in the forum State.'” Daimler AG v.
Bauman, 134 S.Ct. 746, 761 (2014) (quoting Goodyear
Dunlop Tires Operations, S.A. v. Brown, 546 U.S. 915,
919 (2011)). The Court recognized that “[a] corporation
that operates in many places can scarcely be deemed at home
in all of them.” Id. at 762 n.20.
“Otherwise, ‘at home' would be synonymous
with ‘doing business' tests framed before specific
jurisdiction evolved in the United States.”
Id. This would be improper because “[n]othing
in International Shoe and its progeny suggests that
‘a particular quantum of local activity' should
give a State authority over a ‘far larger quantum of .
. . activity' having no connection to any in-state
activity.” Id. (citing Int'l Shoe Co.
v. State of Wash., Off. of Unempl. Compen. &
Placement, 326 U.S. 310, 326 (1945)).
“[A]pprov[ing] the exercise of general jurisdiction in
every State in which a corporation engages in a substantial,
continuous, and systematic course of business” would be
“unacceptably grasping” and insufficient to
establish general personal jurisdiction. Id. at 761.
Thus, the general jurisdiction inquiry “calls for an
appraisal of a corporation's activities in their
entirety, nationwide and worldwide.” Id. at
the standards set forth above, the Court concludes that
Plaintiffs have failed to make a prima facie showing
that Illinois courts may exercise general jurisdiction over
Defendant and therefore are not entitled to conduct discovery
before their complaint is dismissed. Reimer, 230
F.3d at 946. Plaintiffs improperly frame their analysis to
focus solely on Defendant's contacts with Illinois. But
as Daimler makes clear, the proper inquiry requires
appraisal of Defendant's activities in their entirety.
Daimler, 134 S.Ct. at 762 n.20. Plaintiffs fail to
even acknowledge Daimler in their briefs. When the
relevant inquiry is properly framed, it is apparent that
Plaintiffs have not made a prima facie showing that
courts in Illinois may exercise general personal jurisdiction
is headquartered in Tennessee and has twenty offices in eight
U.S. states, plus Washington D.C. and London, England. But,
according to the declaration of Defendant's Assistant
General Counsel John Hicks (“Hicks”), Defendant
has no offices, owns no real property, and maintains no bank
accounts in Illinois. Defendant does not pay, nor is it
required to pay, any income or property taxes in Illinois. Of
Defendant's 693 attorneys and advisors, only four have
active Illinois law licenses. None of those four attorneys
resides in or has an office in Illinois. In the past three
years, only nineteen of Defendant's attorneys have
entered appearances in state or federal court in Illinois,
and five of those nineteen attorneys have not actually
participated in ligation in Illinois.
assuming, as Plaintiffs seek discovery to establish, that
Defendant has performed substantial additional transactional
work for Illinois clients, has solicited or is soliciting
business from Illinois clients,  has sponsored and solicited
clients to attend a drug company's seminar in Illinois,
and represents a number of Fortune 100 or Fortune 1000
companies that are located in Illinois, these contacts would
not bring the sum total of Defendant's Illinois
activities to the level required to establish general
jurisdiction. A comparison to the facts in Daimler
is instructive. The Supreme Court held that the Ninth Circuit
erred by finding that Daimler, with its subsidiary
MBUSA's contacts attributed to it, was “at home in
California.” Daimler, 134 S.Ct. at 760, 762.
MBUSA's contacts with California included operating
“multiple California-based facilities, including a
regional office in Costa Mesa, a Vehicle Preparation Center
in Carson, and a Classic Center in Irvine”; being the
“largest supplier of luxury vehicles to the California
market”; and making sales in California that account
for 2.4% of Daimler's total worldwide sales. Id.
at 752. However, neither Daimler nor MBUSA was incorporated
in California or had a principal place of business there.
Id. at 761. The Court reasoned that if it allowed
California to exercise general jurisdiction over
Daimler's Argentina-based lawsuit, “the same global
reach would presumably be available in every other State in
which MBUSA's sales are sizable.” Id. ...