Case Title: St. Louis-San Francisco Ry. v. Gitchoff

Citation: 369 N.E.2d 52, 68 Ill. 2d 38

Docket Number: 

State: illinois

Court: Illinois Supreme Court

Date: 1977-10-05T00:00:00Z

Document:
68 Ill. 2d 38 (1977)
369 N.E.2d 52
ST. LOUIS-SAN FRANCISCO RAILWAY COMPANY, Petitioner,
v.
JOHN GITCHOFF, Judge, et al., Respondents.
No. 48947.

Supreme Court of Illinois.
Opinion filed October 5, 1977.
*39 Gundlach, Lee, Eggmann, Boyle & Roessler, of Belleville (Norman J. Gundlach and Gerald D. Morris, of counsel), for petitioner.
John T. Pierce, Jr., of Pratt, Pierce & Bradford, Ltd., of East Alton, for respondent Stites.
Writ denied.
*40 MR. JUSTICE MORAN delivered the opinion of the court:
This is an original proceeding wherein petitioner, the St. Louis-San Francisco Railway Company (Railroad), seeks a writ of mandamus from this court reversing the trial court's denial of the Railroad's motion to quash summons, service and return. Respondent Winfred Lane Stites, the plaintiff in the trial court proceeding, there sought recovery under the Federal Employers' Liability Act (45 U.S.C. sec. 51 et seq.) for alleged injuries which occurred in Missouri. As the defendant in that action, the Railroad, under section 20 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 20), filed a limited appearance and the above motion. After a hearing, Judge Gitchoff of the circuit court of Madison County denied the Railroad's motion.
Although neither party asserts the impropriety of an original action in mandamus to resolve the issues of this case, we deem it appropriate to note that this court granted leave to file the mandamus herein at a time when there was pending before it the case of Baltimore & Ohio R.R. Co. v. Mosele (1977), 67 Ill. 2d 321, which raised similar issues in a like context. There, we observed that a substantial number of corresponding cases against that railroad were pending in the circuit court of Madison County. Under these circumstances, in the interest of judicial economy, we have elected to proceed to the merits of this petition.
The Railroad is a foreign corporation organized under the laws of the State of Missouri. It has its headquarters in St. Louis, and is not licensed to do business in the State of Illinois. The Railroad operates in nine states: Missouri, Kansas, Oklahoma, Arkansas, Tennessee, Mississippi, Alabama, Texas and Florida. Its northern terminus is the Lindenwood Yards in St. Louis, Missouri. It has no railroad trackage in Illinois, and therefore operates no "run *41 through" trains in this State. The shipment of the Railroad's freight into or out of Illinois is handled by a corporation known as the Terminal Railroad Association (TRRA), which operates a switching or transfer facility between St. Louis, Missouri, and Madison and St. Clair counties in Illinois. The Railroad maintains a sales office in Chicago, which office is staffed by seven employees. The solicitors there, as in the Railroad's 54 sales offices across the continental United States, are paid a salary, receive no commissions, and collect no money from shippers.
Mr. John Harvey, assistant superintendent of the Railroad's St. Louis terminal, is responsible for coordinating and expediting the movement within Illinois of the company's cars and those cars consigned to it by other railroads. In this connection, Mr. Harvey has, for approximately the last 10 years, spent between 60% and 80% of his working hours in Illinois. An office was provided for his use in the TRRA Brooklyn shops at Lovejoy, Illinois, in St. Clair County, which office was equipped with a direct telephone line to the Railroad's headquarters. While in this office, Mr. Harvey was served process.
Expedited service is of substantial competitive importance to the Railroad in view of the industry's fixed-rate structure. In 1972, the Railroad's revenues for just that traffic which originated or terminated in Madison County, Illinois, totaled $1,867,619. The figure for 1973 was $2,982,188; for 1974, $2,830,545.
The Railroad urges that venue does not lie in Madison County, and that its business contacts in the State of Illinois are insufficient to subject it to personal jurisdiction by the Illinois courts. Dealing briefly with the question of venue, section 6 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 6) provides in pertinent part:
(See Baltimore & Ohio R.R. Co. v. Mosele (1977), 67 Ill. 2d 321.) The pertinent part of the venue statute, section 5 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 5), reads:
It is clear from the above provisions that the Railroad, a foreign corporation not authorized to do business in this State, is a nonresident and, as such, is not subject to the venue restrictions imposed upon residents of this State by the first sentence of section 5, above. Instead, under the second sentence of section 5, venue in any county is proper. We do not dwell on the issue of venue in view of the clear statutory venue provisions applicable to nonresidents and in view of the Railroad's assertion at oral argument that jurisdiction was the only real issue in this case.
Section 13.3 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 13.3) provides:
This section has been judicially construed to require that a corporation be "doing business" in the State to justify the conclusion that the corporation was sufficiently "present" so that it could be served in the same manner as other resident corporations. Conceptions of what due process requires for the attainment of in personam jurisdiction over foreign corporations have altered dramatically over the last 100 years. These developments have been reviewed by this court in Nelson v. Miller (1957), 11 Ill. 2d 378, 383-84, and again, most recently, in Shaffer v. Heitner (1977), 433 U.S. 186, 53 L. Ed. 2d 683, 97 S. Ct. 2569.
In International Shoe Co. v. Washington (1945), 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154, it was held that in personam jurisdiction for an in-State cause of action lies with the forum State when mere solicitation by the foreign corporation is so continuous as to constitute a course of business within that State. There, it was established that due process is satisfied where in personam jurisdiction is asserted over a foreign corporation which has with the forum State certain minimum contacts, "such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice' * * * [and such] as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there. An `estimate of the inconveniences' which would result to the corporation from a trial away from its `home' or principal place of business is relevant in this connection." (International Shoe Co. v. Washington (1945), 326 U.S. 310, 316-17, 90 L. Ed. 95, 102, 66 S. Ct. 154, 158.) "It is evident that the criteria by which we mark the boundary line between *44 those activities which justify the subjection of a corporation to suit, and those which do not, cannot be simply mechanical or quantitative." International Shoe Co. v. Washington (1945), 326 U.S. 310, 319, 90 L. Ed. 95, 103, 66 S. Ct. 154, 159.
According to International Shoe, "the relationship among the defendant, the forum, and the litigation * * * became the central concern of the inquiry into personal jurisdiction." Shaffer v. Heitner (1977), 433 U.S. 186, 204, 53 L. Ed. 2d 683, 698, 97 S. Ct. 2569, 2580.
Assuming compliance with Federal due process, it is for the State to determine to what extent it will open its doors to foreign corporations. Also, it is now clear that, under the criteria of International Shoe, Federal due process is not offended by a State's assertion of jurisdiction over a foreign corporation in a cause of action arising from out-of-State activities, providing that the business done in-State by the foreign corporation is sufficiently substantial. Perkins v. Benguet Consolidated Mining Co. (1952), 342 U.S. 437, 440-41, 447, 96 L. Ed. 485, 490, 493, 72 S. Ct. 413, 416, 419.
The cornerstones of the Railroad's position are two pre-International Shoe and pre-Perkins cases wherein mere solicitation was held to be insufficient to establish in personam jurisdiction. One case, Green v. Chicago, Burlington & Quincy Ry. Co. (1907), 205 U.S. 530, 533-34, 51 L. Ed. 916, 917, 27 S. Ct. 595, 596, mentioned in International Shoe but not expressly overruled, was a personal injury action which arose in Colorado and was brought in the Federal district court of Pennsylvania. The second case, Booz v. Texas & Pacific Ry. Co. (1911), 250 Ill. 376, bore upon a cause of action which arose in Louisiana but was brought in Illinois. The sole issue in Booz was whether service upon the employee of the defendant deprived defendant of its due process of law under the State and Federal constitutions. Booz, citing Green and other cases, *45 concluded that "mere solicitors of business are not agents, within the meaning of the statute" 250 Ill. 376, 381), and quashed the service of summons.
The Railroad's Illinois activities are represented here as mere solicitation. The Railroad attempts to discount Mr. Harvey's activities in Illinois as mere "fallout" from the real business of the Railroad. Respondent Stites, on the other hand, asserts that the Railroad's Illinois activities constitute a continuous course of solicitation and that the case, consequently, falls directly under the rule enunciated in International Shoe. Respondent Stites therefore urges this court to reconsider the "mere solicitation" rule of Booz and the cases following it.
We believe that neither of these lines of authority adequately covers the situation presented in this case. International Shoe is only generally applicable because that case arose from an in-State cause of action and related to the foreign corporation's in-State activities  not the situation here. The Booz and Green cases arose from out-of-State causes of action but are inapplicable here because mere solicitation was the foreign corporation's only activity within the forum State.
The facts here reveal that, in accordance with Perkins v. Benguet Consolidated Mining Co. (1952), 342 U.S. 437, 440-41, 447, 96 L. Ed. 485, 490, 493, 72 S. Ct. 413, 416, 419, the Railroad's activities within Illinois go beyond mere solicitation and constitute sufficient substantial business. Mr. Harvey, assistant superintendent of one of the Railroad's terminals, has spent the majority of his working time during the past 10 years in Illinois on the Railroad's exclusive behalf. He is not officed with, nor is he by his activities a member of, the Railroad's sales force. From a separate facility having direct contact with the Railroad's headquarters, he coordinates and expedites the movement of the Railroad's cars into and out of this State. He, in fact, is responsible for that aspect of the operation *46 which is the very nature of the Railroad's business, the source of, and essential to, its substantial Illinois revenue.
We note, too, that the "estimate of inconvenience" addressed in International Shoe has no bearing on the instant case. The Railroad's corporate headquarters are only 20 miles away from the forum State's site of service. Additionally, this suit could have been brought under 45 U.S.C. section 56 in the Federal District Court for the Southern District of Illinois, which court is located in the same county in which the action is now pending.
In the context of our evolving concepts of jurisdictional requirements, the Supreme Court has observed:
We conclude that, under the facts of this case, the Railroad was "doing business" within Illinois and was, therefore, subject to in personam jurisdiction. We further conclude that service of process upon John Harvey, an assistant superintendent of the Railroad, complied with section 13.3 of the Civil Practice Act.
Because of our findings, it is unnecessary that we consider respondent Stites' arguments concerning TRRA's agency relationship with the Railroad.
For the foregoing reasons, the issuance of the requested writ of mandamus is denied.
Writ denied.
MR. JUSTICE DOOLEY, specially concurring:
I do not believe mandamus is proper where a defendant contends it was not subject to service of process *47 in the jurisdiction since it was not "doing business" within the State. Should the trial court rule adversely, that issue is vital for review after a trial on the merits. It is properly preserved for review by a special appearance and a motion to quash the summons, service and return. Such was the case here.
The Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 20(3)) provides:
See Keats v. Cates (1968), 100 Ill. App.2d 177, 183-84.
As I have pointed out in my dissent in Baltimore & Ohio R.R. Co. v. Mosele (1977), 67 Ill. 2d 321, 335-37:
So also section 6 of the Federal Employers' Liability Act (45 U.S.C. sec. 56 (1970)), providing that an action may be brought in the district in which the defendant shall be "doing business" at the time of the commencement of the action and that the jurisdiction of the courts of the United States shall be concurrent with that of the State courts, controls this action under the FELA. See Miles v. *49 Illinois Central R.R. Co. (1942), 315 U.S. 698, 86 L. Ed. 1129, 62 S. Ct. 827; Baltimore & Ohio R.R. Co. v. Kepner (1941), 314 U.S. 44, 50, 86 L. Ed. 28, 31-32, 62 S. Ct. 6, 8.
While I concur in the result in this case, a comparison of the majority opinion here with the majority in Baltimore & Ohio R.R. Co. v. Mosele will make manifest many inconsistencies between the two.