Aspen American Insurance Company v. Interstate Warehouseing, Inc.
Aspen American Insurance Company v. Interstate Warehouseing, Inc.
Opinion
¶ 1 The plaintiff, Aspen American Insurance Company, filed a complaint in the circuit court of Cook County in which it alleged that the roof of a Michigan warehouse owned by the defendant, Interstate Warehousing, Inc., had collapsed, causing the destruction of goods owned by plaintiff's insured, Eastern Fish Company. Defendant, an Indiana corporation, moved to dismiss the complaint for lack of personal jurisdiction pursuant to
Daimler AG v. Bauman
,
¶ 2 Background
¶ 3 Plaintiff's complaint alleges the following. Eastern Fish Company (Eastern) is a New Jersey-based corporation that sources and imports fish products. In 2013, Eastern contracted with defendant to store some of its fish products in a refrigerated warehouse near Grand Rapids, Michigan. On March 8, 2014, part of the warehouse's roof collapsed, causing ruptured gas lines and an ammonia leak. The leak contaminated the fish products that were stored in the warehouse, rendering them unfit for human consumption. Plaintiff, which insures Eastern, paid Eastern's claim for the loss and, in exchange, received subrogation rights.
¶ 4 On July 14, 2014, plaintiff filed this subrogation action against defendant in the circuit court of Cook County. Plaintiff's complaint sets forth various causes of action, including breach of contract and negligence, and asserts that defendant is responsible for the loss of Eastern's fish products. The complaint also alleges that defendant "maintain[s] a facility in or near Chicago."
¶ 5 Attached to plaintiff's complaint are several documents: a series of letters between defendant and Eastern's attorneys in which the roof collapse is discussed, a copy of the warehousing contract between defendant and Eastern, and a printout of the masthead from defendant's website. The letterhead of defendant's correspondence and the warehousing contract both state that defendant's corporate office is located in Fort Wayne, Indiana. In addition, *443 the letterhead, contract, and website masthead all contain a list of eight warehouses operated by defendant throughout the country. These include the Michigan warehouse that is at issue in this case; a warehouse in Joliet, Illinois; two warehouses in Indiana; and other warehouses in Colorado, Ohio, Tennessee, and Virginia.
¶ 6 Defendant filed a motion to quash service and dismiss plaintiff's complaint for lack of personal jurisdiction pursuant to section 2-301 of the Code of Civil Procedure ( 735 ILCS 5/2-301 (West 2012) ). In the motion, defendant did not dispute that it was doing business in Illinois through the warehouse located in Joliet. However, defendant asserted that this was insufficient to subject it to general personal jurisdiction in Illinois. Rather, according to defendant, under the United States Supreme Court's decision in
Daimler AG v. Bauman
,
¶ 7 Attached to defendant's motion to dismiss were an affidavit from Jeff Hastings, defendant's chief financial officer, and Ryan Shaffer, the general manager of the Joliet warehouse. In his affidavit, Hastings states that defendant is an Indiana corporation with its principal place of business in Fort Wayne, Indiana. Hastings further states that defendant is "a 75% member of" Interstate Warehousing of Illinois, LLC, a limited liability company organized under Indiana law, which also maintains its principal place of business in Fort Wayne, Indiana. According to Hastings's affidavit, Interstate Warehousing of Illinois "operates" the Joliet warehouse, while Ryan Shaffer, an employee of defendant, is the general manager. In his affidavit, Ryan Shaffer confirms that he is the general manager of the Joliet warehouse, is responsible for its day-to-day operations, and is employed by defendant.
¶ 8 Plaintiff filed a response to defendant's motion to dismiss in which it argued that, because defendant was doing business in Illinois through the Joliet warehouse, it was subject to general personal jurisdiction in this state. According to plaintiff, defendant could, therefore, be sued on causes of action unrelated to its activities in Illinois. Included with plaintiff's response was a printout of a "corporation file detail report" from the Illinois Secretary of State's website. The report indicates that defendant is an Indiana corporation that has been registered to do business in Illinois since 1988. Plaintiff submitted no further filings in the circuit court and made no discovery requests. 1
¶ 9 Following a hearing at which no testimony was taken, the circuit court denied defendant's motion to dismiss. The appellate court affirmed.
¶ 10 We allowed defendant's petition for leave to appeal. Ill. S. Ct. R. 315(a) (eff. Mar. 5, 2016). In addition, we allowed the Illinois Trial Lawyers Association and the *444 American Association for Justice to file a joint amicus curiae brief in support of plaintiff, and we allowed Certainteed Corporation, Honeywell International, Inc., and Union Carbide Corporation to file a joint amicus curiae brief in support of defendant. Ill. S. Ct. R. 345 (eff. Sept. 20, 2010).
¶ 11 Analysis
¶ 12 The plaintiff has the burden of establishing a
prima facie
basis to exercise personal jurisdiction over a nonresident defendant.
Russell v. SNFA
,
¶ 13 In Illinois, the exercise of personal jurisdiction over nonresident defendants is authorized under the "long-arm" statute found in section 2-209 of the Code of Civil Procedure ( 735 ILCS 5/2-209 (West 2012) ). Plaintiff contends that subsection (c) of the statute supports a finding of jurisdiction here. That provision states that a court may exercise jurisdiction on any "basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States." 735 ILCS 5/2-209(c) (West 2012). Thus, to determine whether jurisdiction is appropriate under subsection (c), we must consider the constitutional limits placed on a state's authority to exercise jurisdiction over a nonresident defendant. Because defendant in this case does not argue that the Illinois Constitution imposes any greater restraints on the exercise of jurisdiction than the federal constitution, we consider only federal constitutional principles.
Russell
,
¶ 14 The United States Supreme Court has held that the federal due process clause permits a state court to exercise personal jurisdiction over a nonresident defendant only when 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.' "
International Shoe Co. v. Washington
,
¶ 15 Plaintiff maintains that, "consistent with U.S. Supreme Court decisions" interpreting the federal due process clause, a state may exercise general jurisdiction over a defendant "where the defendant has continuous and systematic general business *445 contacts with the forum state." Therefore, according to plaintiff, to establish a prima facie case of general jurisdiction under subsection (c) of the long-arm statute, a plaintiff need only "show a defendant's continuous and substantial business activity in Illinois." Plaintiff emphasizes that, in this case, defendant's "Illinois contacts are not tenuous or random, but have been continuous and systematic for over twenty-five years." For this reason, plaintiff asserts that defendant may be subjected to general personal jurisdiction in this state. We disagree.
¶ 16 In
Daimler AG v. Bauman
,
¶ 17 The Supreme Court went on to explain in
Daimler
that the "paradigm" forums in which a corporate defendant is "essentially at home" are the corporation's place of incorporation and its principal place of business.
Daimler
, 571 U.S. at ----,
¶ 18 Accordingly, in this case, to comport with the federal due process standards laid out in Daimler and, in doing so, comply with subsection (c) of the long-arm statute, plaintiff must make a prima facie showing that defendant is essentially at home in Illinois. This means that plaintiff must show that defendant is incorporated or has its principal place of business in Illinois or that defendant's contacts with Illinois are so substantial as to render this an exceptional case. Plaintiff has failed to make this showing.
¶ 19 Plaintiff does not dispute that defendant is incorporated in Indiana and Hastings's uncontradicted affidavit establishes that defendant's principal place of business is in Indiana. Further, plaintiff's complaint does not allege, and there is nothing in the record to suggest, that this is an exceptional case on the order of
Perkins
. To be sure, plaintiff has established that defendant does business in Illinois through the warehouse in Joliet. But this fact falls far short of showing that Illinois is a surrogate home for defendant. Indeed, if the operation of the warehouse was sufficient, in itself, to establish general jurisdiction, then defendant would also be at home in all the other states where its warehouses are located. The Supreme Court has expressly rejected this reasoning.
Daimler
, 571 U.S. at ---- n.20,
¶ 20 Plaintiff has failed to show that defendant's contacts with Illinois render it at home in this state. To subject defendant to general personal jurisdiction would therefore deny it due process of law. Accordingly, jurisdiction is not authorized under subsection (c) of the long-arm statute.
¶ 21 Plaintiff also notes, however, that subsection (b)(4) of the long-arm statute authorizes a court to exercise jurisdiction in any action arising within or without Illinois against any defendant "doing business within this State." 735 ILCS 5/2-209(b)(4) (West 2012). Plaintiff asserts that jurisdiction in this case is authorized under this provision. We reject this contention. In light of Daimler , subsection (b)(4) cannot constitutionally be applied to establish general jurisdiction where, as here, there is no evidence that defendant's contacts with Illinois have rendered it "essentially at home" in this state.
¶ 22 Finally, plaintiff argues that, because defendant has registered to do business in Illinois under the Business Corporation Act of 1983 (Act) ( 805 ILCS 5/1.01 et seq. (West 2012)), and because defendant has a registered agent in Illinois for service of process, it has "subjected itself to the jurisdiction and laws of Illinois." That is, plaintiff maintains that, by registering to do business in Illinois, defendant has effectively consented to the exercise of general jurisdiction in this state and thereby obviated any due process concerns. Again, we disagree.
*447 ¶ 23 Section 13.05 of the Act states that "a foreign corporation organized for profit, before it transacts business in this State, shall procure authority so to do from the Secretary of State." 805 ILCS 5/13.05 (West 2012). Section 13.15 of the Act ( 805 ILCS 5/13.15 (West 2012) ) lists the requirements that must be met and information that must be provided before authorization is approved. The Act also requires, under section 5.05 ( 805 ILCS 5/5.05 (West 2012) ), that each foreign (and domestic) corporation having authority to transact business in Illinois maintain a registered office and registered agent in this state. In addition, section 5.25 of the Act ( 805 ILCS 5/5.25 (West 2012) ) states that a foreign corporation having authority to transact business in Illinois may be served with process either upon the registered agent appointed by the corporation or upon the Secretary of State.
¶ 24 None of the foregoing provisions require foreign corporations to consent to general jurisdiction as a condition of doing business in Illinois, nor do they indicate that, by registering in Illinois or appointing a registered agent, a corporation waives any due process limitations on this state's exercise of general jurisdiction. Indeed, the Act makes no mention of personal jurisdiction at all. Accord
Surita v. AM General LLC
, No.
¶ 25 Further, section 5.25(a) of the Act states that service on the registered agent of a foreign corporation is for that process, notice or demand that is "required or permitted by law." 805 ILCS 5/5.25(a) (West 2012). This phrase indicates "some limitation in accordance with law."
Brown
,
¶ 26 Plaintiff points to section 13.10 of the Act ( 805 ILCS 5/13.10 (West 2016) ). This provision states that a foreign corporation "shall be subject to the same duties, restrictions, penalties, and liabilities now or hereafter imposed upon a domestic corporation of like character."
¶ 27 Under the Act, a foreign corporation must register with the Secretary of State and appoint an agent to accept service of process in order to conduct business in Illinois. We hold, however, that in the absence of any language to the contrary, the fact that a foreign corporation has registered to do business under the Act does not mean that the corporation has thereby consented to general jurisdiction over all causes of action, including those that are completely unrelated to the corporation's activities in Illinois. Notably, other courts have reached similar conclusions. See,
e.g.
,
*448
Perez v. Air & Liquid Systems Corp.
, No. 3:16-CV-00842-NJR-DGW,
¶ 28 Conclusion
¶ 29 For the foregoing reasons, the judgments of the appellate and circuit courts are reversed. The cause is remanded to the circuit court to enter judgment dismissing plaintiff's complaint.
¶ 30 Appellate court judgment reversed.
¶ 31 Circuit court judgment reversed.
¶ 32 Cause remanded with directions.
Chief Justice Karmeier and Justices Freeman, Thomas, Kilbride, Garman, and Theis concurred in the judgment and opinion.
Under Illinois Supreme Court Rule 201( l ) (eff. July 1, 2014), the parties have the right to discovery on the issue of personal jurisdiction. Jurisdictional discovery is warranted only when it is shown that the requested discovery is "relevant to the subject matter" (Ill. S. Ct. R. 201(b)(1) (eff. July 1, 2014)) of personal jurisdiction.
Reference
- Full Case Name
- ASPEN AMERICAN INSURANCE COMPANY, Appellee, v. INTERSTATE WAREHOUSING, INC., Appellant.
- Cited By
- 23 cases
- Status
- Published