United States District Court, N.D. Illinois, Eastern Division
MARSHALL SPIEGEL, individually and on behalf of a class of those similarly situated, Plaintiff,
JAMES T. REYNOLDS; JIM REYNOLDS; KRISTINA HIXSON REYNOLDS; and ASSOCIATED COMMUNITY SERVICES, INC., Defendants.
MEMORANDUM OPINION AND ORDER
E. CHANG, UNITED STATES DISTRICT JUDGE
proposed class action lawsuit, Marshall Spiegel claims that
James T. Reynolds, Jim Reynolds, Kristina Hixson Reynolds,
and Associated Community Services, Inc. (ACS) violated the
Telephone Consumer Protection Act, 47 U.S.C. § 227
et seq. R. 1, Compl.; R. 46, Am.
Compl. Specifically, Spiegel alleges that he and
other class members received unwanted phone calls from ACS on
behalf of The Breast Cancer Society, Inc., which Spiegel says
is a sham charity run by the Reynoldses. Am. Compl.
¶¶ 1, 3. Now, James and Kristina
Reynolds move to dismiss the case for lack of
personal jurisdiction and all of the defendants move to
dismiss for failure to adequately state a
claim. R. 48, Reynolds Defs.' Mot. to
Dismiss; R. 49, Reynolds Defs.' Br.; R. 50, ACS
Def.'s Mot. to Dismiss; R. 51, ACS Def.'s Br. For the
reasons discussed below, the Court denies the Reynoldses'
motion to dismiss for lack of personal jurisdiction, but
without prejudice so that they may file another Rule 12(b)(2)
motion to dismiss if, after jurisdictional discovery, the
facts still support the motion. The Court also denies the
Defendants' motion to dismiss for failure to state a
purposes of this motion, the Court must accept as true the
allegations in Spiegel's First Amended Complaint.
Erickson v. Pardus, 551 U.S. 89, 94 (2007). Spiegel
has been on the National Do Not Call Registry since 2003. Am.
Compl. ¶ 12. Between October 2013 and August 2014,
Spiegel received four calls on his home telephone from ACS, a
Michigan-based telemarketing company. Id.
¶¶ 5, 13, 29. These calls “sought donations
and/or the purchase of goods or services” on behalf of
The Breast Cancer Society, Inc. (call it the
“Society” for short) pursuant to a services
contract between ACS and the Society. Id.
¶¶ 1, 28, 30(e); R. 49-1, James Reynolds Decl.
¶¶ 9-10. According to Spiegel, the Society is a
“sham charity” run by the Reynoldses. Am. Compl.
¶¶ 1, 3, 30(a). That is, the Reynoldses used the
donations collected by the Society to line their own pockets,
not for any charitable purpose. Id. ¶¶ 34,
35. ACS also was in on the scheme, feathering its own nest
with the donations it elicited on behalf of the Society all
the while knowing that the Society was a sham charity.
Id. ¶¶ 30(b), 34, 39. So, even though
“each call placed by ACS [was] purportedly for the
benefit of [the Society], ” in reality ACS made the
calls “on behalf of, and for the benefit of, ACS and
the Reynolds family.” Id. ¶ 38; see
also Id. ¶¶ 7, 9, 13, 30.
now brings one claim against the Reynoldses and ACS for
violation of the Telephone Consumer Protection Act
(TCPA). See Am. Compl. He alleges that
the Defendants violated the TCPA's do-not-call provisions
when ACS called him and other Illinois residents on behalf of
the Society, id. ¶¶ 25, 30; see
47 U.S.C. § 227(c). Because the Society is a sham
charity, Spiegel's theory goes, the calls do not fall
under the TCPA's exception for calls made “[b]y or
on behalf of a tax-exempt nonprofit organization.” 47
C.F.R. § 64.1200(f)(14)(iii). The Reynoldses move to
dismiss the case against them for lack of personal
jurisdiction, and all of the Defendants move to dismiss for
failure to adequately state a claim.
plaintiff bears the burden of establishing that personal
jurisdiction is proper when jurisdiction is challenged by the
defendant. Purdue Research Found. v. Sanofi-Synthelabo,
S.A., 338 F.3d 773, 782 (7th Cir. 2003) (noting that the
plaintiff must generally only make a prima facie case of
personal jurisdiction). When personal jurisdiction is
challenged under Federal Rule of Civil Procedure 12(b)(2) and
material facts necessary to rule on the issue are in dispute,
the Court must grant discovery and hold an evidentiary
hearing to resolve the dispute. Hyatt Int'l Corp. v.
Coco, 302 F.3d 707, 713 (7th Cir. 2002). Then,
“the plaintiff must establish jurisdiction by a
preponderance of the evidence, ” Purdue Research
Found., 338 F.3d at 783, and “prove what it
alleged” at that hearing, Hyatt Int'l
Corp., 302 F.3d at 713. This is in contrast to what is
“[n]ormally [done] on review of a motion to dismiss,
” where the Court “accepts all well-pleaded
allegations in the complaint as true.” Purdue
Research Found., 338 F.3d at 783.
Federal Rule of Civil Procedure 8(a)(2), a complaint
generally need only include “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). This short and plain
statement must “give the defendant fair notice of what
the … claim is and the grounds upon which it
rests.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (alteration in original) (internal quotation
marks and citation omitted). The Seventh Circuit has
explained that this rule “reflects a liberal notice
pleading regime, which is intended to ‘focus litigation
on the merits of a claim' rather than on technicalities
that might keep plaintiffs out of court.” Brooks v.
Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514
motion under Rule 12(b)(6) challenges the sufficiency of the
complaint to state a claim upon which relief may be
granted.” Hallinan v. Fraternal Order of Police of
Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009).
“[A] complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). These allegations
“must be enough to raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555.
The allegations that are entitled to the assumption of truth
are those that are factual, rather than mere legal
conclusions. Iqbal, 556 U.S. at 678-79.
Analysis of the Reynoldses' 12(b)(2) Motion
federal district court sits in diversity, it has personal
jurisdiction over a nonresident defendant “only if a
court of the state in which it sits would have
jurisdiction.” Purdue Research Found., 338
F.3d at 779. An Illinois court has personal jurisdiction over
a nonresident when Illinois's long-arm statute authorizes
jurisdiction and when the assertion of personal jurisdiction
comports with the requirements of the Fourteenth
Amendment's Due Process Clause. U.S. Const. amend. XIV,
§ 1; Hyatt Int'l Corp., 302 F.3d at 714.
“Because Illinois permits personal jurisdiction if it
would be authorized by … the United States
Constitution, the state statutory and federal constitutional
requirements merge.” uBID, Inc. v. GoDaddy Grp.,
Inc., 623 F.3d 421, 425 (7th Cir. 2010). Therefore, if
personal jurisdiction would be constitutional, the Illinois
long-arm statute is satisfied. See 735 ILCS
the Fourteenth Amendment's Due Process Clause, personal
jurisdiction is proper only when the defendant has
“certain minimum contacts with [the forum 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)).
Personal jurisdiction may be general or specific to the
claims made in the case. uBID, 623 F.3d at 425;
Tamburo v. Dworkin, 601 F.3d 693, 701-02 (7th Cir.
2010). If the defendant's contacts with the state are
“continuous and systematic, ” the defendant is
subject to general jurisdiction there in any action,
regardless of whether the action is related to those
contacts. Tamburo, 601 F.3d at 701 (internal
quotation marks and citation omitted). But because Spiegel
contends only that the Court has specific
jurisdiction over the Reynoldses, that is the only relevant
theory of jurisdiction here. See Am. Compl. ¶ 9
(“By profiting from tortious acts committed within the
State [the Reynoldses] have submitted to personal
jurisdiction here.”). Specific jurisdiction is proper
when a defendant directs his activities at the forum state
and the cause of action relates to those activities.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985). There must be “some act by which the defendant
purposefully avails itself of the privilege of conducting
activities within the forum State … .”
Hanson v. Denckla, 357 U.S. 235, 253 (1958).
Seventh Circuit has explained that “the contacts
supporting specific jurisdiction can take many different
forms.” uBID, 623 F.3d at 426. One way to be
on the personal-jurisdiction hook is to deploy agents to the
forum state, Int'l Shoe, 326 U.S. at 318-20, and
another way is to act through someone else to commit a tort
within the forum state, see IDS Life Ins. Co. v.
SunAmerica Life Ins. Co., 136 F.3d 537, 540 (7th Cir.
1998); Rice v. Nova Biomedical Corp., 38 F.3d 909,
912 (7th Cir. 1994). Above all, the defendant must
“purposefully direct” his activities at the
forum state. Keeton v. Hustler Magazine, Inc., 465
U.S. 770, 774 (1984) (internal quotation marks and citation
omitted). Purposefulness is crucial: “[t]he
due process clause will not permit jurisdiction to be based
on contacts with the forum that are random, fortuitous, or
attenuated.” uBID, 623 F.3d at 426 (citing
Burger King, 471 U.S. at 475). The ...