National Gun Victims Action Council v. Schecter

2016 IL App (1st) 152694, 68 N.E.3d 448

• Court: Appellate Court of Illinois
• Decided: December 5, 2016
• Docket: 1-15-2694
• Status: Unpublished

Opinion

FIRST DIVISION December 5, 2016 No. 1-15-2694 2016 IL App (1st) 152694

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

NATIONAL GUN VICTIMS ACTION COUNCIL, ) an Illinois not-for-profit corporation and ) Appeal from the ELLIOT FINEMAN, ) Circuit Court of ) Cook County. Plaintiffs-Appellants, ) ) v. ) ) No. 15 L 01798 CLIFFORD D. SCHECTER and LIBERTAS LLC, ) an Ohio limited liability company, ) ) Defendants-Appellees, ) Honorable ) Patrick J. Sherlock, AARON MINTER a/k/a AARON BLACK, ) Judge Presiding. ) Defendant. )

PRESIDING JUSTICE CONNORS delivered the judgment of the court, with opinion. Justice Harris and Justice Simon concurred in the judgment and opinion.

OPINION

¶1 Plaintiffs, an Illinois resident and an Illinois not-for-profit corporation, appeal the order

of the trial court that granted the motion of defendants, an Ohio resident and an Ohio limited

liability corporation, to dismiss for lack of personal jurisdiction. Plaintiffs contend that sufficient

minimum contacts exist to bring defendants within the jurisdiction of Illinois due to the ongoing

business relationship between plaintiffs and defendants that was conducted via Internet-based

communications and document exchanges. We disagree and find that defendants’ contacts with

this state are too attenuated. Requiring defendants to litigate here would offend traditional No. 1-15-2694

notions of fair play and substantial justice. Accordingly, we affirm the trial court’s dismissal of

plaintiffs’ complaint for lack of personal jurisdiction.

¶2 I. BACKGROUND

¶3 The lawsuit from which this appeal stems was filed by plaintiffs, National Gun Victims

Action Council (Council), an Illinois not-for-profit corporation, and Elliot Fineman, an Illinois

resident, against defendants, Clifford D. Schecter, an Ohio resident, Aaron Minter, 1 a New York

resident, and Libertas LLC (Libertas), an Ohio-based limited liability corporation. Fineman is the

president and CEO of the Council, which is a not-for-profit corporation consisting of a network

of gun victims, survivors, the faith community, and others whose purpose is to change the United

States’s gun laws through the leverage of economic power. Fineman created the Council after his

son was shot and killed in 2006. Schecter is the president of Libertas, whose work encompasses

public relations and political strategy.

¶4 We have gleaned the operative facts in this matter from plaintiffs’ verified complaint,

which was filed on February 20, 2015. In their complaint, plaintiffs alleged that they first came

into contact with Schecter in May 2013, when the Council retained Schecter to handle public

relations and other media support on a matter unrelated to the event from which this litigation

stems. For this unrelated matter, Schecter approached plaintiffs regarding services he could

provide. In or around Mary 2014, Fineman approached Schecter to handle public relations for the

event at issue here, known as the Kansas City event. 2 Plaintiffs alleged that in June 2014, they

orally retained Schecter to handle all the public relations aspects of the Kansas City event for a

fee of $3,500 per month. The Kansas City event was to be a “newsworthy” gathering of people

1 Service of summons was never obtained against defendant Minter in the underlying action and he is not a party to this appeal. 2 Plaintiffs refer to the event as the “Hallmark event” and defendants refer to it as the “Kansas City event.” We opted to refer to it as the “Kansas City event” because that is the term the trial court used in its order granting defendants’ motion to dismiss for lack of personal jurisdiction.

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outside the headquarters of Hallmark Cards, Inc. (Hallmark) in Kansas City, Missouri,

demanding that Hallmark meet with the Council and other similar organizations to discuss

Hallmark’s refusal to support and join anti-gun initiatives. It was originally scheduled to take

place in August 2014. The complaint stated that Schecter reassured Fineman he could

successfully handle all the public relations work, and that he had handled similar events in the

past.

¶5 The complaint alleges that the Kansas City event resulted from Hallmark’s unwillingness

to meet with the Council and other similarly-aligned entities to discuss its stance on gun laws. In

or around April 2014, the Council and these other philosophically similar organizations sent a

letter to Hallmark’s CEO requesting a meeting to discuss “the disconnect between (a) statements

on the Hallmark website regarding concerns for the welfare of families, children, and

community, and (b) Hallmark’s public statement that it did not intend to be involved with any

anti-gun initiatives.” After the letter was sent, Fineman had three conversations with Hallmark’s

vice president of public affairs and communication, during which Fineman was allegedly told

that Hallmark did not get involved in “divisive issues,” and that Hallmark would not meet with

the Council and others to discuss the issues set forth above. As a result of Hallmark’s refusal to

meet, the Council called for a boycott of Hallmark products and published free gun violence

prevention-focused Father’s Day cards on the Council’s website, urging people to use those

cards instead of Hallmark’s cards. Additionally, the Council intended to hold the Kansas City

event in order to bring media attention to Hallmark’s refusal to meet.

¶6 After Schecter was allegedly retained to handle the Kansas City event, he and Fineman

engaged in email correspondence. The record contains the following email exchanges:

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• May 5, 2014: Email from Schecter to Fineman regarding issues unrelated to the

Kansas City event;

• June 1, 2014: Email from Fineman to Schecter regarding an op-ed for a boycott

of Hallmark products;

• June 4, 2014 Email from Schecter/Libertas to Fineman/the Council regarding

Libertas’s June invoice for $3,500;

• June 9, 2014: Email exchange between Fineman and Schecter regarding starting

a Hallmark-focused petition and beginning of a discussion of the Kansas City

event in which Schecter states:

“If we do Hallmark event, you either need to hire someone to do the whole

thing or you need me to do it. If I do it, organizing is a ton of time, as we

need a) props b) an organizer on the ground who we have to likely fly in

and pay for c) press d) permits taken care of e) a huge online push with

Facebook/Twitter/Blogs.”

Schecter also states: “This is well beyond the scope of what we’ve agreed to, i.e.,

my doing strict pr, and getting you the results you want. So if I’m gonna [sic] do

this, I’m going to start by saying I’ll need another 3K in addition to what you’re

paying”;

• July 3, 2014: Email exchange regarding July invoice for $6,500.00;

• July 15, 2014: Email from Schecter to Fineman regarding some of the work

being done on the Kansas City event and providing information regarding some

other organizations’ involvement in the event;

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• August 8, 2014: Email from Schecter to Fineman with two attachments: (1)

overall budget of the Kansas City event and (2) August invoice for $9,500.00.

This email referenced the event as taking place in September 2014, not August.

The record does not contain evidence of any other correspondence that may have been sent

between Schecter and Fineman. The complaint alleges that numerous phone calls took place.

Specifically, the complaint references a phone call in early July 2014, wherein Schecter

suggested Fineman also hire defendant Minter to handle some of the items outlined in the June 9,

2014, email regarding what needed to be done for the Kansas City event. In the July 15, 2014,

email, Schecter informed Fineman that Minter had agreed to do some of this work. Also, the

complaint alleges that in other phone conversations in August 2014, Schecter represented that

Minter needed to be “on the ground” in Kansas City for two weeks prior to the event. Sometime

in August 2014, the Kansas City event was rescheduled from August to September 2014.

¶7 The complaint alleges that on August 21, 2014, Schecter circulated a timeline relating to

work preparing for the Kansas City event. The record does not contain this correspondence.

Thereafter, the relationship between Fineman, Schecter, and Minter broke down and ultimately

dissolved. The complaint states that in early September 2014, Schecter and Minter missed

scheduled phone conferences and Minter was not “on the ground” in Kansas City, as previously

discussed. Ultimately, Schecter informed plaintiffs that he could not get people to attend the

Kansas City event due to its “messaging,” he had not obtained the requisite permits, and he had

not secured press coverage. Eventually, plaintiffs cancelled the event and rescheduled it to

November 12, 2014. At the time of rescheduling the event, plaintiffs had paid Libertas and

Minter $31,000. Plaintiffs’ complaint references email correspondence from Schecter to Fineman

that allegedly occurred on November 7, 2014, but the record does not contain copies of this

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email. On October 14, 2014, plaintiffs terminated their relationship with Schecter, Libertas, and

Minter. Thereafter on February 20, 2015, plaintiffs filed their verified complaint, containing

counts for breach of contract, scheme to defraud, civil conspiracy, and unjust enrichment.

¶8 Schecter and Libertas (collectively, defendants) filed their appearance on April 20, 2015.

On April 30, 2015, defendants filed their motion to dismiss for lack of personal jurisdiction,

arguing that neither Schecter nor Libertas were residents of Illinois and did not have sufficient

minimum contacts so as to be subject to either specific or general personal jurisdiction in Illinois.

Defendants argued that the relevant transaction here was initiated by plaintiffs and the

negotiations regarding defendants’ services took place over the phone or email, not in Illinois.

The event at the center of the parties’ relationship was to take place in Missouri, not Illinois, and

all pre-event planning by defendants took place in Ohio. Additionally, defendants contended that

it would be unreasonable for defendants to be required to litigate in Illinois.

¶9 Plaintiffs filed their response to the motion on June 18, 2015, asserting that Illinois had

specific personal jurisdiction over defendants via the “on-going business relationship they

established with [p]laintiffs” through an Internet-based exchange of communications and

documents. Plaintiffs did not argue that general personal jurisdiction applied. Plaintiffs asserted

that the Internet and email communications could form the basis for sufficient minimum

contacts. Plaintiffs further stated that it was, in fact, defendants who initiated the relationship

with plaintiffs. Defendants knew that plaintiffs were Illinois residents and directed their

communications at plaintiffs here. Plaintiffs argued that defendants’ contacts with Illinois were

not attenuated and instead were “aimed” at this state; thus, it did not matter that defendants never

physically entered Illinois. In sum, plaintiffs contended that defendants offered to provide

services to Illinois-based plaintiffs, were paid for those services, but never actually performed,

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resulting in damage that occurred in Illinois to Illinois residents and establishing sufficient

minimum contacts.

¶ 10 Defendants’ reply was filed on June 26, 2015, wherein they argued that plaintiffs could

not establish specific personal jurisdiction because plaintiffs failed to offer evidence establishing

that the alleged contract and alleged breach had anything to do with Illinois. Defendants

emphasized that the relationship regarding the Kansas City event was initiated when plaintiffs

contacted defendants. Additionally, defendants argued that plaintiffs could not show that

defendants availed themselves of the benefits of Illinois through email and telephone

communications. Finally, defendants contended that requiring them to litigate here would be

unfair and unjust because they are both from Ohio, and are alleged to have breached a contract

that was for a Missouri event.

¶ 11 Without holding a hearing, the trial court issued a written ruling on July 14, 2015. The

court’s order indicated that the question before it was whether emails between plaintiffs and

defendants, coupled with an uncertain number of telephone calls, were sufficient to establish the

minimum contacts requirement for specific personal jurisdiction in Illinois. The court determined

that such correspondence was not sufficient. The court pointed out that Fineman and Schecter

met face-to-face one time in 2013 in Washington D.C. prior to the formation of the relationship

for the Kansas City event. Regarding the Kansas City event, plaintiffs reached out to defendants

and defendants did not solicit plaintiffs’ business. Also, defendants never entered Illinois and

none of the services were performed in Illinois. During their relationship regarding the Kansas

City event, plaintiffs and defendants only communicated via telephone and email. Ultimately, the

court determined that plaintiffs had the burden of establishing a prima facie case for jurisdiction

and failed to do so. Thus, defendants’ motion to dismiss was granted.

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¶ 12 On August 18, 2015, the trial court entered an order voluntarily dismissing defendant

Minter from this case, disposing of the entire case. As a result, the court found that language

pursuant to Illinois Supreme Court Rule 304(a) was inapplicable. Ill. S. Ct. R. 304(a) (eff. Feb

26, 2010) (allowing a party to appeal from a final judgment “as to one or more but fewer than all

of the parties or claims only if the trial court has made an express written finding that there is no

just reason for delaying either enforcement or appeal or both”). Plaintiffs filed their timely notice

of appeal on September 17, 2015.

¶ 13 II. ANALYSIS

¶ 14 On appeal, plaintiffs argue that the trial court erred in finding a lack of specific personal

jurisdiction over defendants. Specifically, plaintiffs argue that defendants have sufficient

minimum contacts with Illinois such that a finding of specific jurisdiction would comport with

notions of fair play and substantial justice due to, inter alia, defendants’ knowledge that

plaintiffs were Illinois residents and defendants’ conduct was “aimed” at Illinois. Defendants

respond that the limited email communications between the parties here do not amount to

sufficient contacts. Additionally, defendants point out that plaintiffs sought defendants’ services

for the Kansas City event, which was set to take place in a state other than Illinois. We agree

with defendants’ position and find that there were not sufficient minimum contacts to justify

personal jurisdiction over defendants in Illinois.

¶ 15 Our review when the circuit court decides a jurisdictional question solely on the basis of

documentary evidence is de novo. Cardenas Marketing Network, Inc. v. Pabon, 2012 IL App

(1st) 111645, ¶ 28.

¶ 16 It is the plaintiff’s burden to establish a prima facie case for personal jurisdiction over the

defendant. Id. Section 2-209 of the Code of Civil Procedure, known as the Illinois long-arm

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statute, sets forth the grounds for when Illinois courts can exercise personal jurisdiction over a

nonresident defendant. 735 ILCS 5/2-209 (West 2012). Relevant here, section 2-209(c) is a

catchall provision, which permits Illinois courts to “exercise jurisdiction on any other basis now

or hereafter permitted by the Illinois Constitution and the Constitution of the United States.” 735

ILCS 5/2-209(c) (West 2012). “Accordingly, if the contacts between a defendant and Illinois are

sufficient to satisfy both federal and state due process concerns, the requirements of Illinois’

long-arm statute have been met, and no other inquiry is necessary.” (Internal quotation marks

omitted.) Cardenas, 2012 IL App (1st) 111645, ¶ 29. State due process requires that it be fair,

just, and reasonable to require a nonresident defendant to defend an action in Illinois and that

courts take into consideration the quality and nature of the defendant’s actions that take place in

Illinois or that affect interests located in Illinois. Wiggen v. Wiggen, 2011 IL App (2d) 100982,

¶ 22. Further, federal due process analysis requires courts to consider whether: “(1) the

nonresident defendant had minimum contacts with the forum state such that there was fair

warning that the nonresident defendant may be haled into court there; (2) the action arose out of

or related to the defendant’s contacts with the forum state; and (3) it is reasonable to require the

defendant to litigate in the forum state.” (Internal quotation marks omitted.) Id.

¶ 17 At issue here is whether defendants had sufficient minimum contacts with Illinois so as to

justify personal jurisdiction over them. For personal jurisdiction to comport with the

requirements of federal due process, the defendant must have sufficient minimum contacts with

the forum state so that maintaining the suit in the forum state does not offend traditional notions

of fair play and substantial justice. Innovative Garage Door Co. v. High Ranking Domains, LLC,

2012 IL App (2d) 120117, ¶ 16. Because plaintiffs have not argued that general jurisdiction 3

3 “General jurisdiction can be found when the defendant has continuous and systematic general business contacts with the forum.” (Internal quotation marks omitted.) Wiggen, 2011 IL App (2d) 100982, ¶ 26. “That

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applies, we limit our review to specific jurisdiction. For specific jurisdiction, the suit must derive

directly from the contacts between the defendant and the forum state. Wiggen, 2011 IL App (2d)

100982, ¶ 29. “The focus is on the defendant’s activities within the forum State, not on those of

the plaintiff.” (Internal quotation marks omitted.) Id.

¶ 18 In order to determine whether a defendant has transacted business in such a manner so as

to have purposefully availed himself of the benefits of Illinois law, a court must look to the

following factors: (1) who initiated the transaction, (2) where the contract was formed, and (3)

where performance of the contract was to take place. Innovative Garage Door Co., 2012 IL App

(2d) 120117, ¶ 28.

¶ 19 Prior to applying these three factors, we examine Innovative, the case upon which

plaintiffs primarily rely as support for their position that the trial court erred in granting

defendants’ motion to dismiss. In that case, the plaintiff, an Illinois garage door repair and

installation company, filed a breach of contract suit against the defendant, an Arizona company

whose business consisted of websites designed to solicit inquires from people seeking

handyman, plumbing, or garage door services, which they then sold to companies throughout the

United States. Id. ¶ 3. Because the defendant did not have any offices in Illinois, did not travel to

Illinois, and did not maintain business activities in Illinois, the trial court granted the defendant’s

motion to dismiss for lack of personal jurisdiction. Id. ¶ 8.

¶ 20 On appeal, the Second District reversed, holding that “[the defendant’s] maintenance of a

commercial website directed at this state, which is related to the subject matter of this litigation,

in addition to its entering into a contract to provide an Illinois business with leads to

predominantly Illinois customers, is a sufficient basis for specific personal jurisdiction in this

standard requires a nonresident defendant to carry on business activity in Illinois, not occasionally or casually, but with a fair measure of permanence and continuity.” (Internal quotation marks omitted.) Id.

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case.” Id. ¶ 27. The Innovative court relied on the United States Supreme Court’s holding in

Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), “that specific personal jurisdiction exists

where a defendant has ‘purposefully directed’ his or her activities at the forum state and the

claimed injuries arise out of those activities.” Innovative Garage Door Co., 2012 IL App (2d)

120117, ¶ 23 (quoting Burger King, 471 U.S. at 472). The Innovative court noted that the

defendant’s website was only “minimally interactive,” but found that the website was

“unquestionably directed (in relevant part) at Illinois” because its website specifically invited

Illinois residents to fill out forms. Id. ¶ 26. The court emphasized that without the Internet and

users in Illinois visiting the defendant’s website from Illinois, the performance of the contract at

issue would have been impossible based on the defendant’s business model. Id. The court further

explained that the defendant was not merely sending information to consumers; rather, it was

directing them to a specific Illinois company based on the company’s willingness to pay the

defendant a referral fee, which resulted in the facilitation of a business transaction that might not

have otherwise occurred. Id. ¶ 29. Finally, the court found relevant the fact that the relationship

between the plaintiff and the defendant was “substantial and ongoing,” due to the defendant

having provided the plaintiff with approximately 150 leads per year for about 3½ years. Id. ¶ 27.

Thus, sufficient minimum contacts existed to satisfy personal jurisdiction requirements. Id. ¶ 32.

¶ 21 Plaintiffs assert that the trial court misapplied the Innovative decision and failed to

acknowledge that the case at bar deals with the ever-changing arena of on-going, internet-based

business relationships. Defendants respond that the court properly found that this case was unlike

Innovative because that case involved far more substantial business relationships with Illinois

than here, where the basis of the relationship was limited, infrequent email communication.

Although the decision in Innovative is instructive for analytical purposes, we find the contacts

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with Illinois here do not rise to the same level of substantiality as in Innovative, and therefore do

not justify personal jurisdiction over defendants. Unlike the Innovative defendant, here,

defendants’ contacts with Illinois are too “ ‘random, fortuitous, or attenuated’ ” to justify

personal jurisdiction. Id. ¶ 25 (quoting Wiggen, 2011 IL App (2d) 100982, ¶ 24).

¶ 22 Returning to the three factors that assist in our determination of whether defendants

availed themselves of the benefits of doing business in Illinois, we first examine who initiated

the transaction. See Innovative Garage Door Co., 2012 IL App (2d) 120117, ¶ 28. The

relationship between plaintiffs and defendants began sometime in 2013 when plaintiffs retained

defendants for public relations services for a matter unrelated to the Kansas City event.

Subsequently in 2014, plaintiffs contacted defendants in order to seek their assistance with

Hallmark and the Kansas City event. It is for this event that the parties allegedly entered into an

oral contract pursuant to which defendants were to provide public relations services to plaintiffs.

Thus, it was plaintiffs, through their pursuit of defendants, who initiated the transaction at the

center of this lawsuit. Although plaintiffs argue that defendants originally approached them, we

find such an assertion to be misplaced as this factor directs us to look to who initiated the

transaction. See Innovative Garage Door Co., 2012 IL App (2d) 120117, ¶ 28. Thus, we find this

factor weighs in favor of defendants’ position.

¶ 23 Next, we examine where the contract was formed. See Innovative Garage Door Co.,

2012 IL App (2d) 120117, ¶ 28. The evidence before this court shows that the parties solely

engaged in communication via email and telephone calls. Specifically, the record contains less

than 10 emails, and no evidence of the number or substance of any phone calls. There was no

written agreement setting forth the terms of the alleged contract. Rather, plaintiffs’ complaint

states that Schecter was “verbally retained” to assist with the Kansas City event. Thus, the terms

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of the agreement must have been negotiated over the phone or via email, because it is undisputed

that the parties never met in person regarding the Kansas City event. Additionally, unlike

Innovative, there are no allegations that defendants’ website played a part in the parties’

relationship. The Innovative court found that the defendant’s website was unquestionably

directed at Illinois because it “specifically invites Illinois residents to fill out forms seeking

information. Without the Internet, and without users in Illinois accessing [the defendant’s]

website from Illinois, performance of the contract would be impossible under [the defendant’s]

business model.” Id. ¶ 26. We do not find the case at bar to be similar. Plaintiffs here just happen

to be Illinois residents. Nothing about the transaction between plaintiffs and defendants was

required to take place in Illinois in order for the contract to be possible. Plaintiffs could have

communicated via telephone or email from anywhere in the world. The fact that they may have

used the phone or accessed their emails in Illinois does not parallel the scenario in Innovative,

where Illinois customers sought out Illinois businesses to perform handyman, plumbing, or

garage door services on properties located in Illinois. Also weighing against plaintiffs is the fact

that the alleged contract here was formed through telephone or email communications, not in-

person negotiation within Illinois. As a result, this factor favors defendants.

¶ 24 The third factor, where performance of the contract was to take place, unquestionably

favors defendants. See Innovative Garage Door Co., 2012 IL App (2d) 120117, ¶ 28. There is no

dispute that the event in question here was to take place in Kansas City, Missouri. Plaintiffs’

complaint does not allege that any part of the contract was to be performed in Illinois. Thus, this

final factor overwhelmingly favors defendants, as there is no alleged tie between Illinois and the

contract’s performance. Having determined that all three factors weigh in favor of defendants,

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we find that defendants did not avail themselves of the benefits of Illinois law when they entered

into the alleged contract with plaintiffs.

¶ 25 As a final note, although plaintiffs argue that Innovative was misapplied and the trial

court failed to recognize the ever-changing nature of Internet-based relationships, we find their

contention unconvincing. The trial court stated in its July 14, 2015, order, “[Innovative] is clearly

of no help to plaintiffs in this case” as the court’s focus there centered on the defendant’s

website. We agree. Here, defendants are not alleged to have maintained a website or targeted

plaintiffs into using their services through a website; thus, as discussed above, the purposeful

availment issue heavily weighs against plaintiffs. Merely because the parties here used email as a

form of communication does not transform what would normally be a lack of jurisdiction into a

case that satisfies sufficient minimum contacts. As the Court in Burger King recognized:

“[I]t is an inescapable fact of modern commercial life that a substantial amount of

business is transacted solely by mail and wire communications across state lines, thus

obviating the need for physical presence within a State in which business is conducted.

So long as a commercial actor’s efforts are ‘purposefully directed’ toward residents of

another State, we have consistently rejected the notion that an absence of physical

contacts can defeat personal jurisdiction there.” Burger King, 471 U.S. at 476.

Here, although defendants were not physically present in Illinois but used email to communicate,

such a fact is not dispositive in light of Burger King’s reasoning. Our decision hinges on the fact

that defendants did not purposefully direct their efforts at Illinois residents. Rather, as more fully

explained above, plaintiffs just happened to be residents of Illinois with whom defendants

entered into a transaction unconnected with this state. The facts here sharply contrast with

Innovative, where the defendants engaged in the purposeful direction of efforts to Illinois

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residents through their website. As a result, defendants do not possess sufficient minimum

contacts with Illinois; requiring them to litigate here would offend traditional notions of fair play

and substantial justice.

¶ 26 III. CONCLUSION

¶ 27 Based on the foregoing, we find that the trial court properly granted defendants’ motion

to dismiss for lack of personal jurisdiction, and we affirm its decision.

¶ 28 Affirmed.