Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-12-03446/USCOURTS-ca7-12-03446-0/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________________

Nos. 12-3446, 14-2007, 14-3153 

PHILOS TECHNOLOGIES, INC.,

Plaintiff-Appellant,

v.

PHILOS & D, INC., et al.,

Defendants-Appellees.

____________________

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 08 C 7240 — Milton I. Shadur, Judge.

____________________

ARGUED JUNE 1, 2015 — DECIDED SEPTEMBER 22, 2015

____________________

Before WOOD, Chief Judge, and POSNER and WILLIAMS,

Circuit Judges.

WOOD, Chief Judge. This lawsuit involves a complicated 

transaction—or set of transactions—among several related 

companies, most of which are based in the Republic of Korea. At its core, the lawsuit alleges that the defendants, Korean company Philos & D, Inc. (P&D), and Korean citizens

Don-Hee and Jae-Hee Park, unlawfully retained equipment 

that plaintiff Philos Technologies, Inc. (Philos Tech), had sent 

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2 Nos. 12-3446, 14-2007, 14-3153

to P&D as part of a business deal. Although we part company with the district court’s reasoning, we agree with that 

court’s conclusion that it lacked personal jurisdiction over 

the defendants. We also affirm the district court’s denial of 

Philos Tech’s motion asking the court to vacate its judgment 

on account of the Parks’ alleged fraud. Finally, although we 

understand the district court’s frustration with Philos Tech, 

we conclude that its imposition of sanctions on that company cannot stand in light of the many legal and factual uncertainties involved in this case. We therefore vacate the court’s 

sanctions order.

I

A

An ordinary commercial transaction underlies this dispute. Philos Tech sent some equipment to Korea for delivery 

to P&D in connection with an alleged joint venture between 

the two companies. Philos Tech alleges that P&D, along with 

Don-Hee and Jae-Hee Park, unlawfully converted that 

equipment. Because the chief issue before us concerns personal jurisdiction, we will recount not only the actions related to the alleged conversion, but also the events leading up 

to the alleged agreements between Philos Tech and P&D, as 

those events all bear on the question whether personal jurisdiction can be sustained in an Illinois court. 

Philos Tech is an Illinois corporation; Philos Ko (who is 

also known as Jongho Ko) is its chairman. Philos Ko is also 

the chairman of PLS Tech Korea Co., Ltd. (PLST), a Korean 

company that, while not a party to this litigation, plays an 

important role in our story. Philos Tech and PLST are closely 

intertwined: Philos Ko’s wife, Angela Ko (also known as 

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Nos. 12-3446, 14-2007, 14-3153 3

Haewon Park), is the president and CEO of PLST. Philos Ko’s 

son, Sam Ko, is the president and CEO of Philos Tech. P&D, 

one of the defendants here, is a Korean corporation. (Its articles of incorporation appear in the record; they establish that 

P&D is the equivalent of a U.S. corporation.) The formation 

of P&D is a disputed topic, which we explore below. For

now it suffices to say that the two Parks (Don-Hee and JaeHee), both Korean citizens and both defendants in this suit, 

were involved in P&D’s incorporation.

Don-Hee Park visited Illinois in May 2007. While in Illinois, he began engaging in conversations with Philos Tech

about the formation of a joint venture. (In its original complaint, Philos Tech alleged that these conversations did not 

begin until September 2007; this is the first of several such 

contradictions.) P&D and the Parks (collectively Defendants), on the other hand, urge that Don-Hee did not negotiate any details of a potential joint venture while in Illinois. 

They contend instead that Don-Hee’s interactions with 

Philos Tech during his trip were purely for him to learn 

more about Philos Tech’s work and technologies.

On December 20, 2007, PLST (the Korean company also 

chaired by Philos Ko) and P&D executed two written 

agreements. The first agreement, which we call the “Joint 

Venture Agreement,” provisionally established a joint venture between PLST and P&D. In the second, to which we refer as the “Equipment Agreement,” PLST agreed to provide 

P&D with certain equipment. The Equipment Agreement

(between two Korean companies) contains a forum selection 

clause designating Korea as the forum to resolve disputes. 

Philos Tech asserts that on the same day the written 

agreements were executed—December 20, 2007—it had a 

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phone meeting with the Parks. In that meeting, the parties 

decided to rescind and replace the Joint Venture Agreement

between PLST and P&D on which the ink was barely dry

with an oral agreement essentially substituting Philos Tech 

for PLST. Under the revised agreement, Philos Tech would 

take PLST’s place in the joint venture and provide the 

equipment PLST had promised to supply under the Equipment Agreement. (Once again, the earlier complaint paints a 

different picture: in it, Philos Tech did not mention the written agreements with PLST; instead, it merely asserted that

during a “meeting” on December 20, 2007, it and the Parks 

had agreed to form a joint venture between Philos Tech and 

P&D, and that Philos Tech’s role would be that of equipment 

supplier to P&D.) Defendants deny the existence of any oral 

agreement superseding the December 20 written agreements; they maintain that P&D’s joint venture partner has

always been PLST, not Philos Tech.

Complicating matters further is the fact that P&D’s Korean articles of incorporation, which took effect on February

25, 2008, state that P&D’s founders are Don-Hee Park and 

Philos Tech. Defendants’ explanation for the references to 

Philos Tech in the articles and other documents is that they 

were a smokescreen designed to subvert Korea’s foreign investment law. See Foreign Investment Promotion Act (Republic of Korea), enacted Sept. 16, 1998, available at 

http://legal.un.org/avl/pdf/ls/Shin_RelDocs.pdf (visited on 

Aug. 20, 2015, as were all websites cited in this opinion). The 

references falsely represented P&D as a foreign direct investment company so that P&D could obtain government

benefits under that Act. The real agreement, Defendants say, 

was between the two Korean companies (P&D and PLST),

but the parties falsified certain documents and created the 

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Nos. 12-3446, 14-2007, 14-3153 5

illusion that the Illinois-based company Philos Tech was contributing to the Korean economy. They assert that P&D was 

not actually receiving any genuine foreign direct investment 

from the Illinois company in the form of equipment contributions; the equipment instead made a round trip from Korea to Illinois and back again with no value-added at the Illinois end. Philos Tech denies that this was the case. It maintains that the February 2008 articles of incorporation are legitimate and that Philos Tech was making genuine transfers 

of funds and equipment to its Korean joint venture.

Don-Hee Park visited Illinois again in May 2008. (The 

district court found that he came only once, in 2007, but the 

parties agree that he also made a trip in 2008.) Philos Tech 

asserts that it and Don-Hee finalized the details of their joint 

venture at this time. Defendants again deny that any negotiations took place during this visit. They concede that DonHee received an invoice from Philos Tech while he was in 

Illinois, but they say that they did not respond to it because 

they had entered into the agreements with the Korean company PLST, rather than Philos Tech.

On August 18, 2008, PLST sent P&D a letter in which it

stated that it was canceling agreements made on December 

20, 2007. Once again, it is unclear what was happening. 

Philos Tech takes the position that this letter purported to 

cancel solely the Equipment Agreement—and not the Joint 

Venture Agreement—because the Joint Venture Agreement 

already had been superseded by Philos Tech’s December 20 

oral agreement with the Parks to form the joint venture between itself and P&D. Defendants argue that the letter canceled both the Joint Venture Agreement and the Equipment 

Agreement between P&D and PLST, because (they say) there 

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was no oral agreement with Philos Tech and the joint venture between P&D and PLST had remained in force 

throughout 2008. The parties presented the district court

with competing translations of these documents, all of which 

are in Korean.

There were transfers of funds and equipment between 

Korea and Illinois in connection with these machinations, 

but the purpose and details are unclear. The Parks transferred approximately 200 million won to PLST (approximately US$160,000 at the time, see http://www.exchangerates.org/Rate/KRW/USD/12-31-2008); that money was later 

transferred to Philos Tech, which eventually sent either 

funds or some other kind of investment back to P&D. PLST 

sent equipment from Korea to Philos Tech, and Philos Tech 

later sent equipment back to Korea. Defendants maintain 

that the equipment was largely unchanged during its time in 

Illinois, and that these transfers were part of the foreign direct investment scam. Philos Tech insists that the equipment 

PLST sent consisted of component parts, which it assembled 

into completed equipment and returned to Korea.

While this lawsuit has been underway, related litigation 

has been wending its way through the Korean courts. Korean courts have ruled that Philos Tech, not PLST, was the joint 

venture partner of P&D. More recently, both Don-Hee and 

Jae-Hee Park were convicted in Korea for perjury in relation 

to statements made during prior court proceedings; Jae-Hee 

Park’s conviction was then overturned on appeal, and it is on 

appeal to the Korean Supreme Court. (The Korean court of 

first instance found that Jae-Hee committed perjury when 

she stated that P&D’s joint venture partner never changed 

from PLST to Philos Tech.) The Korean courts also deterCase: 12-3446 Document: 74 Filed: 09/22/2015 Pages: 24
Nos. 12-3446, 14-2007, 14-3153 7

mined that Don-Hee Park lied when he said that he had never seen P&D’s Articles of Incorporation before; that conviction was affirmed on appeal.

B

Philos Tech filed this lawsuit in the Northern District of 

Illinois in December 2008, alleging that the Defendants had

unlawfully converted its property. The complaint asserts that

Defendants had agreed to increase Philos Tech’s shares of 

P&D after Philos Tech sent additional equipment to P&D in 

Korea, but that Defendants reneged on this agreement. This 

prompted Philos Tech to demand the return of its equipment. Defendants refused to comply and, according to 

Philos Tech, wrongfully retained the equipment.

Defendants did not appear in the Illinois court to answer 

the complaint. The district court thus granted Philos Tech’s 

motion for default judgment and awarded damages. After 

Philos Tech attempted to enforce this judgment in Korea, Defendants filed a motion to vacate the judgment under Federal Rule of Civil Procedure 60(b)(4), asserting that the Illinois 

court’s judgment was void for lack of personal jurisdiction. 

The district court concluded that the request was untimely, 

but we reversed that judgment in Philos Technologies, Inc. v. 

Philos & D, Inc., 645 F.3d 851 (7th Cir. 2011). Defendants then 

renewed their motion to vacate.

The district court held an evidentiary hearing to determine whether it had personal jurisdiction over Defendants.

At the hearing, Defendants called Sam Ko and Sung-Hyun 

Nam, a former PLST vice-president. Philos Tech presented 

no witnesses. Relying on the live testimony, affidavits from 

the Parks, and other documentary evidence, the district 

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court vacated the default judgment and dismissed the complaint for lack of personal jurisdiction. It largely credited Defendants’ version of the facts. It found, for example, that 

Philos Ko had contacted the Parks in October 2007 to propose a joint venture. It determined that Don-Hee Park had 

not engaged in any negotiations during his May 2007 trip to 

Illinois and that he had not come to Illinois in May 2008 at 

all. It rejected Philos Tech’s contention that the written 

agreements of December 20, 2007, were rescinded and replaced with an oral agreement between Philos Tech and the 

Parks; instead, the court concluded, the joint venture had

always been between the two Korean companies, P&D and 

PLST. The court criticized what it viewed as the “sham 

transaction” in which P&D was designated as a foreign direct investment company; it took the position, however, that 

it did not need to wade into the details of this potential problem under Korean law in order to determine whether it had 

personal jurisdiction over Defendants. Finally, the court 

opined that Philos Tech’s claim was really one for breach of 

contract rather than conversion, and it concluded that even if 

it were to believe that Philos Tech manufactured the equipment in Illinois as part of some sort of agreement with P&D, 

these facts still were insufficient to confer personal jurisdiction over Defendants. They simply bought a product from 

an Illinois company, the court reasoned, and this action does 

not constitute purposeful availment of the benefits of Illinois 

law. 

After the court’s ruling, Defendants filed a motion for 

sanctions against Philos Tech and its counsel under Federal 

Rule of Civil Procedure 11 and 28 U.S.C. § 1927. The district 

court imposed sanctions pursuant to Rule 11 in the amount 

of $778,489.72 against Philos Tech, finding that Philos Tech

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Nos. 12-3446, 14-2007, 14-3153 9

had lied in order to demonstrate that the court had personal 

jurisdiction over the defendants. The district court also 

thought that Philos Tech had falsely claimed that it had a 

meeting with the defendants on December 20, 2007, and the 

court pointed to Philos Tech’s failure to discuss the written 

agreements with PLST in its complaint and to the other 

changes in its story.

Philos Tech later filed a motion for relief from the judgment under Federal Rule of Civil Procedure 60(b)(3) (fraud 

by opposing party), (b)(6) (catch-all), and (d)(3) (fraud on the 

court). It argued that the recent Korean convictions of the 

Parks for perjury in connection with statements regarding 

the joint venture were grounds for vacating the judgment, 

because those convictions showed that the Parks had lied to 

the court about the nature of the joint venture. The district 

court denied the motion, noting that the Korean judgment 

postdated its own judgment and reasoning that its prior determination of the facts was “not dependent on the truthfulness or falsity of the Parks’ testimony.”

Philos Tech appealed the district court’s orders vacating 

the court’s previous default judgment, imposing sanctions, 

and denying its Rule 60 motion. The defendants crossappealed the district court’s denial of sanctions against 

Philos Tech’s counsel, but we later dismissed the crossappeal upon the joint motion of the parties. See FED. R. APP.

P. 42(b). The district court had subject-matter jurisdiction

under 28 U.S.C. § 1332(a)(2). (The parties are diverse: Philos

Tech is an Illinois corporation with its principal place of 

business in Illinois; P&D is a Korean corporation with its 

principal place of business in that country; and Don-Hee and 

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Jae-Hee Park are citizens of Korea.) We have appellate jurisdiction pursuant to 28 U.S.C. § 1291.

II

Philos Tech first focuses on the district court’s grant of the 

Defendants’ motion under Rule 60(b)(4), which provides relief from final judgment if a judgment is void for lack of personal jurisdiction. Although we usually review a grant of a 

Rule 60(b) motion for abuse of discretion, the court’s resolution of the legal question about the existence of personal jurisdiction is subject to de novo review. See In re ChineseManufactured Drywall Prods. Liab. Litig., 742 F.3d 576, 584 (5th 

Cir. 2014); be2, LLC v. Ivanov, 642 F.3d 555, 557–58 (7th Cir. 

2011); Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 400 (7th 

Cir. 1986) (if district court lacked jurisdiction it was a per se 

abuse of discretion to deny the Rule 60(b)(4) motion). Factual 

findings related to the personal-jurisdiction issue are reviewed for clear error. See In re Chinese-Manufactured Drywall, 742 F.3d at 584. On a Rule 60(b)(4) motion, the defendant bears the burden of proving the court’s lack of personal 

jurisdiction. See Bally, 804 F.2d at 401.

A

Philos Tech begins with a procedural complaint about the 

scope of the hearing that the district court held to determine 

its jurisdiction over Defendants. It contends that because the 

jurisdictional and merits determinations were intertwined, 

the court should have held a “full-blown” hearing, before 

which Philos Tech could have conducted discovery and at 

which it could have called and cross-examined more witnesses. Because, as Philos Tech claims, the hearing was more 

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Nos. 12-3446, 14-2007, 14-3153 11

limited and the court relied on the affidavits of the Parks

(who did not testify at the hearing), Philos Tech asserts that 

it was required only to make out a prima facie case of jurisdiction. Furthermore, it asserts, the court was required to construe all factual disputes in its favor.

If material facts about personal jurisdiction are in dispute, the court “must hold an evidentiary hearing to resolve 

them.” Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 

2002). Until that hearing is held, “the party asserting personal jurisdiction need only make out a prima facie case.” Id. In

some circumstances, particularly when the court is required 

to assess credibility in order to resolve factual disputes, the 

court may be required to allow either cross-examination of 

witnesses or pre-hearing discovery if a party so requests. See 

Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 676 (1st Cir. 1992).

The problem with Philos Tech’s position is simple: the 

district court never prohibited pre-hearing discovery or live 

testimony, and Philos Tech never asked for either opportunity. Philos Tech did not call the Parks (or anyone else) as witnesses, in spite of the fact that Defendants presented live testimony. The court was not obliged to divine from Philos 

Tech’s silence exactly what discovery it wanted to undertake 

and which live witnesses it wanted. A district court may

conduct an evidentiary hearing to determine personal jurisdiction as long as “both sides have the opportunity to present 

their cases fully.” Walk Haydel & Assocs., Inc. v. Coastal Power 

Prod. Co., 517 F.3d 235, 241–42 (5th Cir. 2008) (emphasis added). Both Philos Tech and the defendants had such an opportunity. Philos Tech’s failure to take advantage of it was not 

the court’s fault and casts no cloud on the court’s handling of 

the hearing. 

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B

Philos Tech’s primary argument is that the court erred 

when it found that it lacked personal jurisdiction over Defendants. Though we affirm the district court’s conclusion, 

we approach this issue from a different perspective, focusing

on Defendants’ contacts with Illinois rather than on the 

complicated relationships between the parties and non-party 

PLST.

District courts exercising diversity jurisdiction apply the 

personal jurisdiction rules of the state in which they are located. See Hyatt, 302 F.3d at 713. The district court here 

properly looked to Illinois’s long-arm statute, which provides that the Due Process Clause of the Fourteenth 

Amendment sets the outer boundary of the personal jurisdiction of its courts. See 735 ILCS 5/2-209(c) (“A court may 

also exercise jurisdiction on any other basis now or hereafter 

permitted by the Illinois Constitution and the Constitution 

of the United States.”). We have concluded that normally

there is “no operative difference” between Illinois constitutional and federal constitutional limits on personal jurisdiction. Hyatt, 302 F.3d at 715 (determining that even though 

these standards “hypothetically might diverge,” the two are 

for most purposes one and the same); see also Rollins v. 

Ellwood, 565 N.E.2d 1302, 1316 (Ill. 1990) (Illinois Constitution requires “[j]urisdiction ... to be asserted only when it is 

fair, just, and reasonable to require a nonresident defendant 

to defend an action in Illinois, considering the quality and 

nature of the defendant’s acts which occur in Illinois or 

which affect interests located in Illinois”). None of the parties before us has suggested that there is any material divergence between the state and federal standard for our case; 

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Nos. 12-3446, 14-2007, 14-3153 13

we therefore turn to the familiar federal due-process principles to resolve the issue.

Under the Fourteenth Amendment’s Due Process Clause, 

a court may exercise personal jurisdiction over an out-ofstate defendant when that defendant has “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. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). The defendant 

must have deliberately established these contacts, or, in other words, he must have purposefully availed himself of the 

forum state, “’such that he should reasonably anticipate being haled into court there.’” Burger King Corp. v. Rudzewicz, 

471 U.S. 462, 474–75 (1985) (quoting World-Wide Volkswagen 

Corp. v. Woodson, 444 U.S. 286, 297 (1980)). It is the defendant—not the plaintiff or third parties—that must create the 

contacts in the forum state, and those contacts must be “with 

the forum State itself, not ... with persons who reside there.” 

Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014) (“[T]he plaintiff 

cannot be the only link between the defendant and the forum.”).

Standing alone, the fact that a foreign party has formed a 

contract with an in-state party is often insufficient to supply

the minimum contacts required by the Constitution. Burger 

King, 471 U.S. at 478. Other links, such as “prior negotiations 

and contemplated future consequences, along with the terms 

of the contract and the parties’ actual course of dealing” may 

demonstrate that the defendant has purposefully availed itself of the forum. Id. at 479; see also RAR, Inc. v. Turner Diesel, 

Ltd., 107 F.3d 1272, 1277–78 (7th Cir. 1997). Illinois courts use

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a multi-factor test for determining whether personal jurisdiction exists in these types of situations. They consider “(1) 

who initiated the transaction; (2) where the contract was negotiated; (3) where the contract was formed; and (4) where 

performance of the contract was to take place.” Estate of 

Isringhausen ex rel. Isringhausen v. Prime Contractors & Assocs., 

Inc., 883 N.E.2d 594, 600–01 (Ill. App. Ct. 2008). 

While there are two branches of personal jurisdiction 

theory—general and specific—only the latter is relevant 

here. For a court to exercise specific jurisdiction, the lawsuit 

must “result[] from alleged injuries that ‘arise out of or relate 

to’” the defendant’s contacts with the forum. Burger King, 471 

U.S. at 472–73 (quoting Helicopteros Nacionales de Colombia, 

S.A. v. Hall, 466 U.S. 408, 414 (1984)); see also Hyatt, 302 F.3d 

at 716 (noting that a “suit must ‘arise out of’ or ‘be related to’ 

[a defendant’s] minimum contacts with the forum state”).

With these principles in mind, we turn to the contacts 

with Illinois that P&D and the Parks had. In so doing, we 

find it more helpful to keep in mind the fluidity of the relationships among P&D, Philos Tech, and PLST (as well as the 

various people who controlled these companies), rather than 

to focus narrowly on the precise legal structures they chose. 

We see nothing to be gained by investigating whether PLST 

or Philos Tech is technically the joint venture partner of 

P&D—an examination that we fear would be fruitless given 

our lack of expertise in Korean law, the lack of any expert 

evidence on that law, and the parties’ conflicting accounts. 

Instead, we move straight to the central question: whether 

P&D, Don-Hee Park, and Jae-Hee Park had the type, quality, 

and level of contacts with Illinois to support personal jurisdiction. 

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Defendants’ first alleged contact occurred in May 2007, 

when Don-Hee Park traveled to Illinois. The district court 

concluded that Don-Hee did not conduct negotiations or solicit Philos Tech to enter a joint venture on this trip. In coming to this conclusion, it credited Defendants’ version of the 

trip, i.e., that Don-Hee had come to the United States for unrelated reasons and that, while he happened to be in the 

country, he decided to learn more about Philos Tech’s work. 

The court also noted that May 2007 seemed quite early for 

the solicitation of a deal that did not result in final agreements until December of that year. The court credited DonHee’s avowal that Philos Ko did not propose the joint venture until October 2007. It did not clearly err in making these

findings. Philos Tech (perhaps relying too heavily on the fact 

that it did not bear the burden of proof) presented no evidence that anything beyond a preliminary informational visit occurred during Don-Hee’s trip. The court’s conclusion 

that neither negotiations nor solicitation of a deal took place

at that time is consistent with the evidence before it. Thus, 

because the May 2007 trip was largely unrelated to the matters at issue in this lawsuit, this contact is irrelevant to our

personal-jurisdiction inquiry.

The next potential contact is the December 20, 2007 

agreements. The written agreements, which were executed 

in Korea between two Korean companies, are immaterial to 

our analysis. They reflect a purely Korean transaction lacking any connection to Illinois. If we credit Philos Tech’s version of the events, the Joint Venture Agreement was orally 

modified immediately to make Philos Tech the joint venture

partner. We consider later whether this adds enough to Defendants’ Illinois contacts to make a difference.

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Regardless of the identity of P&D’s joint venture partner, 

Philos Tech did send equipment from its Illinois facility to 

P&D in Korea. Although the court noted that the evidence is 

conflicting whether Philos Tech actually manufactured that 

equipment or simply passed it through from PLST to P&D, it 

never resolved that question. Instead, it concluded that 

“Philos Tech appears to have the better of it in characterizing 

itself as the manufacturer.” We will assume that this means 

the court thought that P&D acquired a product from an Illinois company.

Don-Hee’s May 2008 visit to Illinois is the final potentially relevant contact with the state. The district court concluded that Don-Hee did not make this trip, despite the uncontradicted evidence that he did (including a transcript of a 

Chicago radio broadcast with Don-Hee on May 2, 2008) and 

the parties’ agreement on the matter. The court’s finding that 

this trip never occurred was clearly erroneous, though not in 

the end harmful. Don-Hee contends that he merely toured 

Philos Tech’s facilities and received an invoice while in the 

state; he maintains that he did not engage in any negotiations or business discussions. Moreover, he says that his 

chief purpose in coming to the United States was not to visit 

Philos Tech but rather to attend an academic conference. 

Philos Tech, to the contrary, asserts that it and Don-Hee “finalized” their joint venture agreement during this trip; nevertheless, Philos Tech failed to provide details about what 

this “finalization” entailed.

The suit that Philos Tech filed in Illinois does not arise 

out of or relate to these mostly incidental interactions that 

Defendants had with the state. Even if we assume that P&D 

had some sort of agreement with Philos Tech, we already 

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have observed that a foreign party’s contract with an in-state 

party alone is insufficient to support personal jurisdiction. 

Burger King, 471 U.S. at 478. Burger King did note that the circumstances surrounding a contract might demonstrate a foreign party’s purposeful availment of a forum. Philos Tech 

has not, however, directed our attention to any such circumstances. To the contrary, the facts compel the conclusion that 

this was a Korean business deal from start to finish, with a 

couple of incidental interactions with Illinois. Most of the 

parties involved, including the Parks, P&D, and PLST, are 

Korean. The original written agreements were executed in 

Korea, and even the purported oral agreement was concluded over a phone call with one party in Korea. Philos Tech also acknowledges that it outsourced component parts from 

Korea-based PLST for the equipment that it sent to P&D in 

Korea.

As we already have noted, Don-Hee Park’s 2007 trip to 

the United States is irrelevant for purposes of specific jurisdiction, because Philos Tech’s lawsuit to recover the equipment it sold to P&D is not sufficiently related to this purely 

informational visit. See Hyatt, 302 F.3d at 717 (“[I]t is only the

‘dealings between the parties in regard to the disputed contract’ that are relevant to minimum contacts analysis.”) 

(quoting Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods.

Co., 75 F.3d 147, 153 (3d Cir. 1996)). Even if Don-Hee engaged in some negotiations during his later May 2008 trip to 

Illinois, it was not he who initiated the transaction. (The district court credited Don-Hee’s account, according to which 

Philos Ko was the instigator of this deal.) Moreover, DonHee did not undertake the trip for the purpose of communicating or negotiating with Philos Tech. That Defendants 

made a contract with an Illinois company and may have had 

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some conversations about it in Illinois does not outweigh the 

fact that they neither solicited the Illinois company to enter 

into an agreement nor travelled to the state for the purpose 

of conducting business with that company. Cf. Daniel J. 

Hartwig Assocs., Inc. v. Kanner, 913 F.2d 1213, 1218 (7th Cir. 

1990) (noting that “[t]wo significant factors” in the conclusion that defendant purposefully availed himself of the forum were that he solicited the plaintiff’s services and did so 

on numerous occasions). Even more jarring, for purposes of 

personal jurisdiction over Jae-Hee Park specifically, is the 

fact that, to our knowledge, Jae-Hee Park has never visited 

Illinois, at least on a trip that was in any way connected with 

Philos Tech.

The deal before us is categorically different from the 

franchise relationship held to confer personal jurisdiction on 

an out-of-state franchisee in Burger King. The defendant 

there had “entered into a carefully structured 20-year relationship that envisioned continuing and wide-reaching contacts with Burger King in Florida.” Burger King, 471 U.S. at 

480. Here, the agreement was neither highly structured nor 

long-lasting; instead, it was in essence a contract for the provision of goods to a Korean company. The mere fact that 

Philos Tech produced those goods in Illinois (possibly at the 

behest of Korean-based PLST) is largely incidental to the jurisdictional analysis and does not automatically confer jurisdiction over foreign defendants who otherwise lack significant connections to Illinois. Cf. Walden, 134 S. Ct. at 1125 (defendant’s actions did not constitute sufficient contacts with 

forum state “simply because he allegedly directed his conduct at plaintiffs whom he knew had [forum state] connections”).

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Nos. 12-3446, 14-2007, 14-3153 19

Our conclusion would remain the same if we read Philos 

Tech’s complaint to raise a claim of conversion, rather than 

breach of contract. Illinois courts have stated that they may

exercise personal jurisdiction over defendants in tort suits “if 

the defendant performs an act or omission that causes an injury in Illinois and the plaintiff alleges the act was tortious in 

nature.” Kalata v. Healy, 728 N.E.2d 648, 653 (Ill. App. Ct. 

2000); see also 735 ILCS 5/2-209(a)(2). This analysis, however,

accounts for only the statutory authorization to exercise personal jurisdiction; any such exercise still must comport with 

federal due-process principles. See Walden, 134 S. Ct. at 1125 

(“[M]ere injury to a forum resident is not a sufficient connection to the forum.”); Kalata, 728 N.E.2d at 654. And, as we 

have just discussed, the defendants did not have sufficient 

contacts with Illinois such that the exercise of personal jurisdiction over them would conform to constitutional standards. Philos Tech cannot avoid that conclusion by a simple 

shift in the state-law theory that supports its claim. 

III

We now address Philos Tech’s appeal of the district 

court’s grant of sanctions against it under Federal Rule of 

Civil Procedure 11. We review a district court’s grant of Rule 

11 sanctions for abuse of discretion; an order imposing sanctions based on an error of law or a clearly erroneous finding 

of fact is a per se abuse of discretion. See Hartmarx Corp. v. 

Abboud, 326 F.3d 862, 866–67 (7th Cir. 2003). 

The district court found sanctions appropriate based on 

its finding that Philos Tech “made its submissions to this 

District Court with an improper purpose and with a faulty 

factual basis.” It pointed to the discrepancy between the 

complaint’s allegation that Philos Tech had a “meeting” with 

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20 Nos. 12-3446, 14-2007, 14-3153

the Parks and contracted with them to form a joint venture,

and Philos Tech’s later contention that its meeting was really 

a telephone conversation it had (likely with only Jae-Hee 

Park) after the Parks had executed written agreements with 

PLST. The court also thought that Philos Tech was lying 

about the existence of an oral agreement with P&D; it found 

instead that PLST had always been P&D’s joint venture partner. It branded the relationship between Philos Tech and 

P&D, documented by the articles of incorporation and other 

papers, as a sham that the parties had perpetrated in order 

to obtain benefits from the Korean government.

These would be serious problems indeed if they were 

supported by a proper record. But they are not. The record 

that was developed in the hearing before the court focused 

on personal jurisdiction, not the merits. Such issues as the 

scope of the telephone meeting that occurred, why (in this 

close-knit group of family companies) an oral agreement 

might quickly have superseded a written agreement, what 

Korean law provides in the way of benefits to foreign investors, and how the Korean authorities would have viewed the 

parties’ arrangements, were not adequately explored. On the 

record before us, it is impossible to evaluate either the legal 

significance of P&D’s articles of incorporation and other official documents or the legitimacy of the parties’ transfers of 

funds and equipment between Korea and the United States. 

And without more information about Korean law, we cannot 

tell whether the parties’ attempts to obtain foreign direct investment benefits were part of a valid business strategy or a 

sham meant to deceive Korean officials. 

In the absence of a solid reason for condemning the joint 

venture reflected in P&D’s articles of incorporation as a 

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Nos. 12-3446, 14-2007, 14-3153 21

“sham,” we cannot be confident that Philos Tech was untruthful in its filings about its dealings with P&D and the 

Parks. On such a murky record, where the legal implications 

of the parties’ actions are so uncertain, the court was wrong 

to characterize Philos Tech’s bid for personal jurisdiction in 

the Northern District of Illinois as unscrupulous or underhanded. Philos Tech’s argument that personal jurisdiction 

over Defendants existed was not baseless. If Philos Tech had 

not taken such a passive position at the critical hearing, then 

there would have been some chance that the district court 

might have found personal jurisdiction. (Several Korean 

courts have found that it was a joint venture partner of P&D, 

after all.) A court should not impose sanctions on a party 

that loses an argument, as long as the argument was not entirely groundless. See Nat'l Wrecking Co. v. Int'l Bhd. of Teamsters, Local 731, 990 F.2d 957, 963 (7th Cir. 1993). Philos Tech 

had enough support for its contentions related to personal 

jurisdiction to avoid Rule 11 sanctions. 

Our uncertainty about relevant Korean law, the existence 

of related Korean litigation, and principles of comity reinforce our doubts about the propriety of sanctions. See Hilton 

v. Guyot, 159 U.S. 113, 164 (1895) (“[Comity] is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation.”). Before 

the district court issued its sanctions order, several Korean 

courts had made findings that contradicted the factual determinations that undergirded the district court’s imposition 

of sanctions. In particular, those courts determined that 

Philos Tech was P&D’s joint venture partner. The district 

court’s sanctions order unnecessarily put it in conflict with 

the Korean judiciary. Especially since possible abuse of KoCase: 12-3446 Document: 74 Filed: 09/22/2015 Pages: 24
22 Nos. 12-3446, 14-2007, 14-3153

rean law played a significant role in the court’s decision, 

there is every reason to defer to the Korean courts’ assessment of that issue. The existence of these Korean court 

judgments, combined with the many legal and factual uncertainties in this case, lead us to conclude that the district court 

went too far when it imposed sanctions on Philos Tech.

IV

Finally, we address Philos Tech’s argument that the district court should have granted its motion under Federal 

Rule of Civil Procedure 60(b)(3), (b)(6), and (d)(3). We review the denial of a Rule 60(b) motion for abuse of discretion. Wickens v. Shell Oil Co., 620 F.3d 747, 758 (7th Cir. 2010). 

Rule 60(b)(3) provides relief from a final judgment when a 

party has committed fraud in the context of the legal proceeding. The party complaining of fraud must establish the 

fraud by clear and convincing evidence and must demonstrate that the fraud prevented it from fully and fairly presenting a meritorious claim. See id. at 758–59; see generally 

11 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY 

KANE, FEDERAL PRACTICE AND PROCEDURE § 2860 at 412–13 

(3d ed. 2012). Rule 60(b)(6) is a catch-all provision that allows a judgment to be set aside for “any other reason that 

justifies relief,” and Rule 60(d)(3) affirms that a court can 

“set aside a judgment for fraud on the court.” 

Philos Tech filed its motion on the basis of the Parks’ Korean perjury convictions for statements regarding the joint 

venture with P&D. As we noted earlier, Jae-Hee was found 

guilty of perjury for falsely averring that P&D’s joint venture 

partner had never changed from PLST to Philos Tech. Her 

conviction was vacated by the appellate court, but the prosecutors have taken a further appeal to the Korean Supreme 

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Nos. 12-3446, 14-2007, 14-3153 23

Court. Don-Hee was convicted on the basis of his avowal 

that he had never seen P&D’s Articles of Incorporation before and that he had not made an agreement for Philos Tech 

to supply equipment to P&D as an investment in P&D. Their

convictions occurred after the district court’s orders granting

Defendants’ Rule 60(b) motion and imposing sanctions.

Philos Tech argues that the court should have concluded 

from these convictions that the Parks had committed fraud 

when they swore in this litigation that Philos Tech was never 

P&D’s joint venture partner.

These judgments do not, however, supply the requisite 

evidence of fraud. The Parks have never admitted that they 

lied, and in fact Jae-Hee Park’s conviction was vacated on 

appeal, and both cases continue to be appealed in the Korean courts. Korean criminal trials may involve different burdens of proof and evidentiary standards than those in the 

United States, and the line between fraud and perjury might 

differ. The cases on which Philos Tech relies deal with incontrovertible (or nearly incontrovertible) evidence of perjury or 

forgery, such as witnesses’ admissions of lying under oath or 

the discovery of physical facts that would lead any reasonable person to conclude that earlier statements were false. See, 

e.g., Murdoch's Estate v. City of Philadelphia, 432 F.2d 867, 869–

70 (3d Cir. 1970) (involving uncontroverted documentary 

evidence showing that litigant had misrepresented his involvement in the event in dispute); Peacock Records, Inc. v. 

Checker Records, Inc., 365 F.2d 145, 148 (7th Cir. 1966) (relief 

required where witnesses were willing to testify that they 

had perjured themselves in the course of the litigation). The 

later-in-time, appealable decisions of foreign courts that we 

have here are qualitatively different from (and significantly 

less conclusive than) the evidence of fraud presented in 

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these cases. Moreover, neither comity nor any U.S.-Korea 

treaty requires a U.S. court to give preclusive effect to a foreign-court judgment that postdates the U.S. court’s contrary 

ruling. Cf. Gabbanelli Accordions & Imports, LLC v. Gabbanelli, 

575 F.3d 693, 697 (7th Cir. 2009) (“Because the Italian judgment postdates the American one, it cannot be pleaded as 

res judicata.”). If the Parks committed perjury in Korea, then 

presumably they will suffer the consequences there. As for 

the U.S. proceeding, Philos Tech has not mustered clear and 

convincing evidence of the Parks’ fraud, and so the district 

court acted within permissible boundaries when it refused to 

set aside the judgment on this basis.

V

Because Defendants lack sufficient contacts with Illinois, 

the district court lacked personal jurisdiction over them. We 

thus AFFIRM the district court’s grant of Defendants’ motion 

under Federal Rule of Civil Procedure 60(b)(4). We also 

AFFIRM the district court’s denial of Philos Tech’s motion 

under Rules 60(b)(3), (b)(6), and (d)(3). We conclude, finally, 

that the district court erred in imposing sanctions on Philos 

Tech, and so we VACATE its sanctions order. Each side must 

bear its own costs on appeal. 

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