## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 07

- 3425 I LLINO IS B ELL T ELE PHO NE C OMPAN Y, I NC ., Plai nt i f f

-Appe l l ant, v.
G LOBAL NAP S I LLINO IS, I NC ., e tal ., D efend a nts-A pp ellees

.

A pp eal from the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 06 C3431

—Jo hn W. Darrah, Judge

. A RG UE D S EP TE MBE R 11, 2008

— D ECI DE D D ECE MBE R 22, 2008

Befo re E A S T E RB R OO K, Chie f Judg e, a nd P O SNER an d E VANS, Circ uit Ju dg es . P OSNER, C i r cu i tJudg e . Thi s a pp eali n a s uitag ai nst a gr oup ofaffi l i ate d cor pora ti ons c harg es that i n vi ol ati on ofthe pla i nti ff’ s federa l ta ri ff s fi l ed w ith the Fe deral Com m u n ica ti ons Com m i ssi on, i ts sta te tar i ff s fi l ed w i th the I l l i noi s Com m er ce Com m i ssi on, and t h e inter connec-2 N o. 07

- 3425 ti o n a g r ee m en t be twe enthe pl aint i ffa nd o ne o fthe affi l i ate s, Glo balN A Ps I l l i noi s, the defe nd ants f ai l ed to p ay for telec o m m un ications services th at th e plaintiff had sol d to that com pany. Qu e s t i o ns ab o uto urj ur i s di c t i o n l e d u s t o i nv i t e s up p l e m e n ta l brie fs. T h e p lain tiff’s p oin ts ou t t h at a su it to enf or ce a t ar i fffi l ed w i th the FCC i s deem ed to ar i se u n d er f e d er al la w an d is th er efo re w ith in th e fe d er alquesti on j uri sdic ti on o fthe dist ri ct c ourt
. L o uisv ille & N ashvill e R
. R
. v. Rice, 247 U .S . 201 , 201 -03 (19 18 ); Thurs t on M otor Li nes, Inc. v. Jordan K
. Ra nd, Ltd

. , 46 0 U.S
. 533 ( 1983 ) (p er cu ria m ); C a hn m a nn v. Sp rint C o rp . , 13 3 F
. 3d 484, 48 8- 89 ( 7th Ci r . 1998). I t ar g ue s th atthe s ui t i s wi th i n the d ive rs ity j u ris d ict ion as w ell b ec au se , w h ile Illino is B ell is an Il lin ois co rp or at ion , n o n e o fth e d efe n d an ts eit h er is in c or p or at ed in Illin ois or h as i t s p r i n c ip al p lac e o f bu siness ther e. That the case i s withi n the dive rs i ty j uri sdic ti on as w ell as th e fed er al-q u es tio n j u ris d ict ion is p ot en tia lly i m po r ta ntb ec au se the pl aint i ffha s atl ea sto ne , a nd possibl y tw o, cl ai m s under sta te l aw

— one f orf ai l ure to com plywith i ts st at e tar i ff s a nd the othe r f orvi ol ati on o f th e int er c on n ec tio n ag re em en t. A lth ou gh b ot h a r e w ith in the su pp l em entalj uri sdic ti on co nfe rr ed on the federa l cour ts by 28 U
. S. C. § 1 367, the exer ci se ofthatj uri sdic ti on i s, as the sta tute m ake s cl ear, d iscr eti onar y; the exer ci se ofdi ver si ty j uri sdic ti on i s no t. An ex hibi t to th e pl aint i ff’ s su ppl ement alb r i efc o nt ains ana dm i ss i o n b y Gl o ba l NA Ps I l l i no i s th at“ to the e xt en t G lobal [N A Ps I ll inois] d en ied [th a t ] it i s a D elaw are cor pora ti on with i ts pri nci pal pl ace ofbusi ness at 10N o. 07

- 3425 3 M e r r y mou ntR o a d, Qu i nc y, MA tha tde ni a l wa s i na dver tent and i n er ro r. ” The defendants’ supplem entalbr i ef say s, i n a r eve rs alo fthei r previ ous pos i ti on, thatGlobal N A Ps Il l i noi s “ obvi ousl y has i ts pri nci pal pl ace of bus i ne s s i n I l l i no i s , the o nl y s t a t e i n whi c h i ti s l i censed and has e stabl i shed i nter connect i on f aci l i ti es. ” But i ts be i ngl i ce ns ed to d o b us i ne ss i n I l l i no i s an d ha ving “es tabl i shed i nter connect i on f aci liti es” ar e no t e vi dence th at it is a c itiz en of Illin o i s . A T & T is lice n se d to d o b u siness i n I l l i noi s a nd has “es tabl i shed i nter connect i on f aci l i ti es, ” but i s no t a ci ti zen o fI l l i noi s. W he n th e facts th at d eterm ine fede ra l jurisd iction are con teste d , the p lai nt iff

— ori fi t i s a cas e th at h as been r emov ed to fede r alc o ur t, the de fen dan t

— m ust e stabl i sh thos e f acts bya preponderance o fthe evi denc e. M e r i di an Se cu r i ty Ins . Co. v. Sa dows ki, 441 F.3d 536 , 543 (7th C ir. 20 06 ); Gaff

or d v
. Ge ne r al Ele c. Co. , 99 7 F
. 2d 150, 15 9- 60 ( 6th C ir. 19 93 ). G l o b a l N A P s Illin ois h as n otm ou n te d a su ffici entl y c ol or abl e chal l enge to dive rs i ty j uri sdic ti on t o re quire th e plai nti ffto pre sent add i ti onalev i dence of d i v er sit y. G lob al N A P s Illin ois d oe s n oth av e a n Il lin ois cor pora te chart er . N ori s I l l i noi s where i t has i ts pri nci pal pla ce o fbusi ness. I t adm i ts that i t has no em plo yee s o ther than i ts c o r po r at e o ffi ce r s, a nd the y a r e al l i n Mass ac huset ts. A co m pany’s pri nci pal pl ace o fbusi ness i s where i ts “ner ve cente r” i s l oca ted, or , m or e co ncre tel y, wh er e i ts ex ec u tiv e h ea d q u ar te rs are loc at ed

. Kru ege rv. C a rtw r ight, 99 6 F .2d 92 8, 93 1 (7 th C ir. 19 93 ); M e t r opol i t an Li f eIns
. C o. v. Est at eof Cam m on , 929 F.2d 122 0, 1223 ( 7th C ir . 1991); D im m itt & O w ens Fin a nc ia l, Inc. v. U n ited S ta tes , 78 7 F
. 2d4 N o. 07

- 3425 11 86 , 1 191 (7 thCi r . 1 98 6)
. The r e ar e no ne r ve s ( i n a l l b ut th e si m pl es t an i m al s) wi th o uta b r ain, a nd there is no hu manb r a i n wi tho uta h uma n b e i ng . An e xe c ut i v e h e a dquarte rs witho ut any executi ves is si m i l ar l y o xym or oni c. W e can imag i ne a n a ut o m at ed co m pan y tha t ha s no o ffi ce a ny w her e butc o ns i st s o fpi ec es o fe qui pm en t oper ate d by t el eco m m uti ng em plo yee s s catt er ed acr oss the gl obe

. Bu t w hat w e have i n thi s case is c om m onpla ce: a co m pany l oca ted i n one sta te ( M ass achusett s) thathas contr acts with fi rm s in other sta tes , i ncl ud i ng I l l i noi s.

“ [ A ] c o r p o r a t i o n w h o s e c e n t e r o f g r a v i t y i s i n th e s a me sta te [ as the opposi ng par ty] ev en tho ugh i t m ay be i ncor pora ted el sewhere

. . . [ i s] suffi ci en tly ‘ l oc al’

— suffi ci entl y i denti fied w i th the st ate

— to a vo i d the ob loq u y t h at m ay at ta c h to a ‘for eig n ’ co rp or at ion in l i ti g at i o n w ith a l o ca l r es i den t an d tha t pr o vi des the mod e r n r a t i o na l e o fthe di v e r s i t y j ur i s di c t i o n. The wo r ds ‘p rin c ip al p lac e o f bu sin es s’ a re to be co n st ru ed w ith th is pu rpos e in m i nd

. ” D im m itt & O w ens Fin a nc ia l, Inc . v. U nited Sta tes , sup ra , 78 7 F
. 2d at1 19 0. The r e i s no th i ngl o ca l abo ut a c or p or at ion ch ar te re d in a n ot h er st at e, m an ag ed in anothe r sta te, adm in ist er ed in a n ot h er st at e, h ea d q u ar ter ed in an ot h er st at e, its loc al “ p r e se n c e” ac tu ally a gh os tly abse nce o fl i vi ng bo die s. B u t t h e d e f e n d a n t s a r g u e th a te v e n i fth e r e i s p r i ma f aci e federa l j uri sdic ti on, wh etherbas ed on a federa l questi on o r dive rs i ty of c i ti zenshi p, the Tel eco m m unica

tio ns A ct o f19 96, 47U
. S. C. §§ 151 et seq
. , w i th d r a ws tha tj ur i s di c t i o n f r o m a s ui to fthi s k i nd

.N o. 07

- 3425 5 To unde r st an d the a r g um en t o ne mustunde r st an d the tw o types of charg e that one tel eco m m unica ti ons c ar ri er can e xtra ct fro m ano therpursuant to the Tel eco m m unica

tio n s A c t. Iowa Ne t workSe r vi ces , Inc . v . Qw e s tCorp. , 36 3 F. 3d 683, 68 6 ( 8th Ci r. 20 04)
. Fi rs t, an “ i ncum b en t l oca l ex ch an g e ca r r i er ” ( a ca r r i ertha t pr o vi ded l o ca l pho ne se rv ice w h en th e A c t w as p as se d , su c h as Il lin ois B ell) is requ ired to in tercon ne ct on de m an d w ith oth er carriers th at p ro vid e loc al t ele c om m u n ica tio n s s er vic es w ith in i ts s er vi ce a r ea . 47U
. S
. C. § 25 1( c) ( 2)
. A car r i erde m an di ng in ter connect i on m ust neg oti ate with the i ncum bent l oca l e x c h a n g e c a r r i er on p r i c e a n d o th e r t e r ms . I fth e t wo c ar rie rs c an n otrea c h ag re em en t, th eir d isa gr ee m en t is su bmi tt ed to whati s ca l l ed “a rbi trat i o n” b uti s r ea l l y the fi r sts ta g e i n a r egul at o r y pr o ce eding, a s th e “a rbi tr at i o n” d e c i s i o n mu s tb e s u b mi t t e d t o th e s t a t e r e g u l a t o r y c o mm i ssi on f ori ts approval, as m ust a n agre em ent r eached b y n eg ot iat ion
. Id ., §§ 25 2(a )(1) , (b)(1 ), (e)(1 ); Il li nois B el l Tel
. Co. v. Box , N o. 08

- 1489 , 20 08 W L 50066 14, at* 1 ( 7th C ir. N ov . 26 , 2 0 08 ); Il l i noi s Be l l Te l
. Co. v. Box , 52 6 F.3d 106 9, 1070 ( 7th Cir. 2008). The i nt er co nne ct i o n a g r ee m en t be twe enthe pl aint i ffa nd G l o b a l N AP s I l l i n o i s w a s a p p r o v e d b y th e I l l i n o i s C o mme r c e C o mmi s s i o n . A p a r t y a g g r i e v e d b y th e s t a t e c o mmi s s i o n ’ s d e c i s i o n, w h e th e r i mp o s i n go r a l t e r i n gth e t e r ms ofan inter connect i on a gr eem ent, can see k j ud i ci alr evi ew i n federa l di str i ct c ourto n the grou n d that the deci si on vi olate s se ct i o ns 2 51 o r 2 52 o fthe Te l ec o m m uni ca ti o ns A ct. 47U
. S. C. § 2 52( e) ( 6)
. But so f aras appears bo th part i e s we r e c o nt e ntwi th the a g r e e men ta nd n e i the r s o ughtj ud i c i a l r e v i e w o fthe c o mm i s s i o n’ s o r de r a pproving i t. N ordi d anyone el se.6 N o. 07

- 3425 I fas i n thi s ca se the incum b en t l oca lexchange car ri er sues m er el y t o colle c t the i nter connect i on char ge spe ci fi ed i n the a ppr o ve d i nt er co nne ct i o n a g r ee m en t, the su i t i s no t ba se d o n fede r all aw i n a nyr ea l i stic s en se , b ut on a pri ce t er m i n a c ontr act. J ust a s a sui t to en for c e a copyr i ght l i cense i s hel d to ar i se und erst ate r atherthan f edera l l aw ev en tho ugh th e g ra nt o fa copyr i ght i s g over n ed by fed er al la w , Gaiman v. M cF ar l ane, 36 0 F.3 d 64 4, 65 2 (7 th C ir. 20 04 ); T
. B. Harm s C o . v . E li sc u , 33 9 F
. 2d 823, 82 4, 82 6-2 7 (2 d C ir. 19 64 ) (Frie n d ly, J.) , s o likew ise , w h ile “s ec ti o n 2 52 (c)( 6) a utho r i ze s a fede r alc o ur t to de te r m i ne w h e t h er th e a ge n c y’s d ec isio n d ep ar ts from fed er al la w ,” “a deci si on ‘ i nter preting’ an a gr eem ent con tr ary t o i ts ter m s cr eat es a di ffer en t k i nd o fpro bl em

— one und er the l aw o fco ntra cts, and theref or e o ne f orwh i ch a sta te f oru m can supp l y a r em edy. ” Il l i noi s Be l l Te l
. Co. v. Worldcom Technologies, Inc. , 179 F.3d 566, 57 4 (7th C ir. 1999); see al so C onnect C om m unicati ons Co rp. v. Southw es te rn B el l Te l
. , L
. P. , 4 67 F.3d 70 3, 70 8 (8 th C ir. 20 06 ); Southw es te rn B el l Tel
. Co
. v. Pu bli c U ti li ty Com m ’n , 20 8 F
. 3d 475, 48 4- 86 (5th C ir. 2000). J ud ge Fr i endlyanal ogi zed a sui t o n a c ontr ac t bya m oto r car ri err egul ate d by the In terst ate Com m er ce C om m i ssi on t o a co pyri ght l i cense, i n w or ds equ ally appl i c a b l e t o thi s c a s e : “ Th a tthe c o nt r a c t s c o ul d n ot l aw full y b e ca rr i ed ou t s ave w i th I CC approv aldoes not, w ith ou t m or e, d em on st ra t e t h at C on gr es s m ea n t a ll aspects o fthei r pe rform ance ornon- perf or m ance t o be gov er ned by l aw t o be f ashi oned by federa l co urts r ather than bythe st at e l aw appli cabl e t o si m i l arco ntra cts re lat in g t o b u sin es se s n otu n d er fed er al re g u l at ion . Th isN o. 07

- 3425 7 i s no t to s aytha t a par ti cul ari ss ue c o nc erni ngs ucha c o nt r a c t, e . g . , whe the r I CC a pp r o v a l ha d o r ha d no tbee n gran ted prior to a p articu lar d ate, w ou ld n ot requ ire d e t e r mi n a t i o n u n d e r fe d e r a l p r i n c i p l e s . B u t the c o mp la i ntdo es no t su g g es t th ata ny s uchi ss ue i s pr es en t he r e. ” M cF addi n Expre s s , Inc . v. Adl ey Corp. , 34 6 F
. 2d 424, 426- 27 ( 2d Cir

. 19 65) ( ci tat i on o m i tte d); se e a l so Chic ago & N o r t h We s t ern R y. v. To ledo , P eoria & Western R .R ., 32 4 F.2d 936 , 938-39 (7th C ir. 1963). W e a re m i nd ful that Ve r iz o n M a ry l a n d, In c . v . Gl ob al NA P s, Inc
. , 3 7 7F
. 3 d 3 5 5 , 3 6 4

- 6 5 ( 4 th Ci r . 2 0 0 4 ) , s a y s tha t i nt e r c o nn e c t i o n a g r e e men t s a r e s o i mpo r t a ntt o the fe deralr egul ati on o fte l eco m m unica ti ons that sui ts to enf or ce them ar i se und erthe Tel eco m m unica tions A ct. Bu t that was a ver y di ffer en t case fro m thi s. Ver i zon w as su i ngs ta te c o m m i ss i o ne r s to b l o ckthe i r o r derr equi r i ng it t o p a y c o m p en sa tio n to an ot h er ca rrie r, an d w h ile it w as d oing so in pa rt beca us e it th ou gh t the y had m isi nt erprete d the i nter connect i on a gr eem ent, “a ccor ding to Veri zon’ s co m pla i nt, wh etheri t m ust p ay re ci proca l com pensati on o n I SP-bound tra ffi c und e rt heter m s of t he agre e m e ntdepend s in substa nti alm eas ure up on the r equi r ement s o fthe Act a nd the F CC’ s r egul at i o ns a nd in te rp re ta tio n s. O n its fac e, th en , Ve riz on ’s c on tr ac t c laim is t ied d ire c tly to fed e r a l la w , an d its as se rt ed ba sis in f edera l l aw i s no t ‘ i nsubstanti al [ or ] fri vol ous. ’ ” Id

. at36 3- 64 (em p ha sis i n origi na l)

. B ellSo uth Teleco m m un i ca tio ns, Inc. v. M C IM etro A ccess Tran s m i s s i on Se r vi ces , Inc . , 3 17 F.3d 1270 , 1 278-79 (11th Cir. 2003 ) ( en banc) , was a s i m i l arcas e

— an d the m aj or i ty8 N o. 07

- 3425 opi ni on drew a pow er ful diss ent by J ud ge Tj oflat , see id

. at 1285

- 1308

—b u t w e n ee d n otta ke sid es , as o u r c a se is dist i ngui shabl e. I l l i noi s Bel l i s s eek i ng m er el y t o col l ect charg es speci fi ed i n the i nter connect i on a gr eem ent. The seco nd ty pe ofchar ge that on e carr i ercan l evy agains t ano th er i s a cha rge for tran sm issi on of a carri e r’s l ong- dist ance t elecom m unica ti ons. S uch a char ge m ust b e e mbo di e d i n a nd c o l l e c t e d pu r s ua nt t o a t a r i fff i l ed wi th the F e de r a l Co mm un i c a t i o ns Co mm i s s i o n. 4 7U. S
. C. § 2 0 3 ( a )
. C a r r i e r s fi l e s i mi l a r t a r i ff s w i th s t a t e c o mm i ssi ons such as the I l l i noi s Com m er ce Co m m issi on f or the t ra nsm i ssi on o fl ong- dist ance intra sta te com m unica

ti ons, and the pla i nti ff’ s o therst ate
- l aw cl aim is base d on su ch a tari ff

. The defe nd ants ar gue that the federa l ta ri ffcannot create fed eral j u risdiction over th is suit, as the p lai nt iff cl ai m s i t doe s, bec ause, theysa y, th e inter connect i on ag re em en t be tw ee n th e pla in tiff an d G lob al N A P s Illin ois “i ncl ud es an ‘ i ntegr ati on cl ause, ’ wh er eby all th e t e r ms and condit i ons ofthe i nter connect i on t o w hi ch Global w as en titl ed by the [ T ele c o m m un ications A ct] w ere ackn ow ledge d by the pa rties to be set f orth in th e [int erconnect i on a gr eem ent]
. Thus, wh ate ver t h e par ti es m i g hto we o ne a no th er on ac co unto fthe t r affi c pas sing b y v irt u e o f th eir int er c on n ec tio n w as p l a i n ly a c kn ow ledg ed t o be s et f or th i n the [ agr eem ent] ( and not e l sew he re) in com p li an ce w ith the regi m e [created by the A ct]. Tari ffcl ai m s pre sente d as ‘ al ter nati ve pl eadi ng’ do not c re at e fe d er al s u b j ec t m at te r j u ris d ict ion .” Bu t the cl ause i s m or e li m i ted than the defendants c l a i m. I tr e a d s : “ E n t i r e A g r e e me n t
. T h i s R e c i p r o c a l C o m-N o. 07

- 3425 9 pensati on Ap pend i x i s int en ded to be re ad i n conj uncti o n wi th the unde r l y i ngI nt er co nne ct i o n Agr ee m en t be twe enI LEC [ I l l i no is B el l, the i nc um be ntl o ca l e xch an g e ca r r i er, t o whi chr ec i pr o ca l c o m pen sa ti o n i s due f ro m co m peti ng l oca l exchange car ri er s that int er c onn ect w ith it, 47U .S.C . § 25 1(b )(5) ; In r e Core Com m uni ca t i ons, Inc ., 45 5 F
. 3d 26 7, 2 70 ( D. C. Ci r . 20 06 ) ] a nd CLEC [ Gl o ba l NA Ps I l l i noi s, the com peti ti ve l oca l exchange car ri er ] , but that as to the Rec i proca l C om pensati on t er m s a nd co nd i ti ons, thi s Ap pend i x const i tutes the enti re ag re em ent b etween the Par ti es on these i ssues , and ther e a re n o othe r or al agr eem ents or und e r sta nd i ngs b etween them o n Reci procal C om pensati on that a re noti ncor pora ted i nto th i s Appendi x. ” The “ent i r e ag r ee m en t” t o whi chthe c l a us e r e f e r s i s thu s the r e ci proc a l

- c o mpe ns a t i o n a pp en d ix, an d a nu m ber of the p lai nt iff’ s claim s are unrel ate d to re ci proca l co m pensati on. The duty t o provi de such co m pensati on is o n l y o ne o fthe du ti es cre ate d by the i nter connection p ro vi si ons ofthe Tel ecom m un ications A ct. See 47 U
. S. C
. §§ 251(b)(1)- (4), ( c). W e cannot fi nd the “und er l yi ng Inter connect i on Agree

m ent” i n the re cor d, but the pl ai nti ffco ncedes that s o me ofthe paym ents that i t cl ai m s Gl obalN A Ps I l l i noi s o w es i t ar e ba se d s o l el y o n the i nt er co nne ct i o n ag r ee m en t, a nd w e hav e j ust r ule d that a sui t f ornonpaym en t in vi ol ati on o fsuc h an a gr eem ent doe s no t a ri se und erfedera l l aw . A nd we supp ose an integr ati on cl au se (though not thi s o ne, wh i ch i s narr ow in sco pe) coul d m ake all cl ai m s f o r pa y m en t t o a ca r r i erar i se underthe a g r ee m en t r athe r th an unde r fi l ed ta r i ff s. An o r di nary agr ee m en t coul dn ’ t do that

— th e obli gation crea t e d by a fi led tariff10 N o. 07

- 3425 cannot be a l ter ed by an ag re em ent o fthe parties
. M aisl in Indust ri es, Inc. v. Prim ary Ste el, Inc. , 49 7 U.S
. 11 6, 12 6- 30 (19 90 ) ; Lou i s vi l l e& Nas hvi l l eR. R. Co. v. Ce nt r al Ir on & Coal Co. , 2 6 5 U
. S
. 5 9 , 6 5 ( 1 9 2 4 )
. B u tt e l e c o mm u n i c a t i o n s c o mm o n c ar r i er s ar e au th o r i ze d t o make b i ndi ngi nt er co nne ct i o n a g r ee m en ts s et tingf o r th th e pri ce s o fthe services agree d up on. 47 U
. S. C
. § 252(a)( 1). The possibi l i ty oftur ni ng a federa l ta ri ffc lai m i nto a s i mpl e co n t r a c tc l a i m d o e s n o ta ffe c tj u r i s d i c t i o n, h o weve r. A sui t t o enf or ce a federa l t ar i ffar i ses under federa l l a w e v e n i fth e d e f e n d a n th a s a g o o d d e fe n s e t o th e c l a i m, such as that the pl ai nti ffhad agr eed notto m ake i t. That i s the i m plic ati on o fthe w el l

- ple aded com pla i nt r ule

. C a t e rp i l l a r, In c . v . Wi l l i a ms , 482 U
. S. 38 6, 39 2 ( 1987 )
. ( Fori ts appl i ca ti o n t o a c as e si m i l art o thi s, i nv olvi ng o ne o fthe defe nd ants i n thi s ca se, se e Ver izon N e w York Inc . v. Gl ob al NAP s , Inc . , N o . 1 : 03

- cv - 05 07 3- EN V- RM L, a t 6- 7 ( E. D. N
. Y. Se pt. 20 , 20 07)
. ) Onlyi fthe c om pla i nt’ s invocat i on o f f edera l l aw i s fri vol ous doe s the r ule f orbi d acces s to fed er al c ou rt u n d er th e fe d er al-q u es tio n j u ris d ict ion . E .g., S at u r da y Eve n i n g Pos tCo
. v . Ru mbl e s e atPre s s , Inc. , 8 16 F.2d 119 1, 1195 ( 7th Cir. 1987). T h e in te g r a t i o n cla u se is a re m in d er , ho w ev er , th at if an i nter connect i on a gr eem ent s peci fi es a par ti cu lar pri ce f o r a pa r ti cular se r vi ce , the s el l erc an no t, s i m pl y b y fi l i ng a t ar iff, pr ev en t t h e b u y e r fro m ch alle n gin g t h e p ric e in th e ta r i ffa s di sc r epa ntwi ththe pr i ce i n the i nt er co nne ct i o n a g r ee m en t. Gl o ba l NA Ps I l l i no i s ar g ue s th atthe pl aint i ff’ s c la i m i s ba se d o n a mis i nt er pr et at i o n o fthe agr eem ent. S uch a di sa gr eem ent s houl d norm al l y b eN o. 07

- 3425 11

r efer r ed to the s ta te r egul at o r y a g en cy, i n th is c as e th e I ll inois Com m erce C om m issi on, before the fed er al court deci des the c as e. T h e a gencyhad to approv e the par ti es’ ag r ee m en t an d ha d the a utho r i tyt o i m pose a di ffer en t agr eem ent o n them , o r, wh at am ounts to the s am e thi ng, t o mo di fy the a g r e e ment they h a d n e g o t i a t e d. 4 7U. S
. C. § 2 52( e) ( 1) , ( 2)
. Ifa dispute ove r the m eani ng ofthe agr eem en t a ris es , th e a ge n c y w ill us u al l y be in t h e b es t p os iti on t o re sol ve i t. T ru e, th e T e l e c o m m u n ica tio n s A c t d oe s n otex p re ss ly au th orize a state com m issi on, after it app roves an i nt erconnect i on a gr eem ent, to r eso l ve disputes ari si ng under i t. N ordoes the A ct e xpressl y a uthor ize a federa l co urt to re fer su c h a d isp u te , i f t h e d i s p u te aris es in a su it in f edera l co urt, to the sta te com m i ssi on, ei th er . B ut such author i ty i s a se nsibl e c or olla ryto the al l oca ti on o fst ate an d fed er al re sp on sib ilitie s m ad e b y t h e A c t. CoreCom m uni ca t i ons, Inc . v. Ve r izon Pen ns yl vani a, Inc . , 4 93 F. 3d 333, 34 4 (3 d C ir. 20 07 ); Bel l South Tel e co m m uni ca t i ons, Inc . v. M CIM e t r o A cc e s s Tr ans m i s s i on Se r vi ces , Inc ., sup ra , 31 7 F
. 3d at 12 76

- 77; c f

. Pe te r W
. Hube r, M i ch ae l K. Kel l o g g& J o hn T h or n e, Fe de r al Te l e co m m uni ca t i ons La w § 3. 3. 4, pp. 226- 28 (2d ed . 1 99 9) (t h e T ele c om m u n ica tio n s A c t o f 19 96 “d ir ec tl y c o nt r o l s i nt r as ta te i ss ue s th at w ere o nc e th e ex c l us i v e pr o v i nc e o f the s t a t e s . To tha t e xt e nt, the A ct f ede r al i ze s these l o ca l i nt er co nne ct i o n i ss ue s. Butthe re specti ve ro l es of the sta te and federa l age nci es i n i m ple

m en ting these m ar ket

- openi ng pro vi si ons have been a m att erof c on sid erabl e di spute .
. . . A s a bac kst op to i ts pri m ar y r el i a nc e o n pri vate l y neg oti ate d ag re em en ts
. . . C on gr es s e n list ed th e a i d of st at e p u b lic12 N o. 07

- 3425 uti l i ty com m i ssi ons to ensur e that l oca l co m peti ti on was i m pl ement ed fai rl y a nd wi thdue r eg ar d t o the l oca l co nd i ti ons and the par ti cul arhi sto ri calci rcum sta nces o fl o ca l r egul at i o n un derthe pr i o r r egi m e”) ; Le o n T. K n au er , R on ald K
. M ac h tle y & T h om as M . L yn c h, Te l e c o mm uni ca t i ons ActHandb ook 127-31 (1996 ). Regul ato ryag enci es d on ’ t usual l y e ngage i n contr act interp retation. Bu t since interc onn ectio n agree m en ts are com ple x and have t o be a pp ro ved by a s tat e co m m i ss i on an d di spu te s o ve r the i r mean i nga r e v er y l i k el y t o pr es en t issues rel ated t o th e com m issi on’s fed eral statu tory author i ty

— for ex am p le w he th er the con tractu al int erpreta ti on urge d b y one ofthe parti es w oul d res ulti n pri ce d isc rim in at ion , 47 U .S.C . § 25 2(d )(1) (A )(ii)

— the r efer ra l o f i nter preti ve disputes to the sta te com m i ssi on, unl ess they see m co nt r i v e d o r a r e o the r wi s e e a s y t o r e s o l v e , i s a s e n s ib l e p r o c e d u r e ; a n d t he r e i s n o th i n gi n th e T e l e c o mm uni ca ti o ns Actt o f o rbi d i t. And i fthi s i s r i g ht, the n a ca r r i ers ee k i ngt o e nf o r ce a n i nt er co nnecti o n a g r ee m en t m ust no t be per m i tte d to preve nt r efer ra l b y fi l i ng a ta r i ffa nd s ui ngt o e nf o r ce i t r athe r tha n the i nt er co nn ec tio n ag re em en t. U
. S. Wes t C om m u n ic ations, Inc. , v. H ix , 183 F. Supp. 2d 1249 , 1266 ( D. Col o. 20 00) ; se e G lo ba l NA P s, In c . v . F CC, 247 F.3d 252 , 255-56 (D.C
. Cir. 2001). To g i ve the r efer r alpr o ce dur e a l ab el, we ar e sa y i ng that i ssues that a rise in the cour se ofa federa l sui t t o enf or ce a n i nter connect i on a gr eem ent m ay som etim es b e w ithin the “pri m ar y j uri sdic ti on” ofthe sta te re gul at o r y a gen cy. As e xpl aine d i n U nited Sta tes v. Western Pac i f i cRy
. , 35 2 U.S
. 59 , 6 3-6 4 (1956 ) , “the doctr i ne o f pri m ar y j uri sdic ti on, l i ke the r ule req uir i ng exhaust i on o fN o. 07

- 3425 13 admi ni st r at i ve r emedi es , i s co nc erne d wi thpr o m o ting properr e l a t i o ns hi ps b e twe e n thec o urts and adm i ni str ati ve ag en c ies ch ar ge d w ith p a r t i c u lar reg u lat or y d u tie s . . . . ‘P rim ar y jur isd ict ion ’ .
. . ap p lies w h er e a c l a i m is orig ina l l y co g ni zabl e i n the c o ur ts , a nd c o m es i nt o pl aywhen

eve r enfor c em ent o fthe cl ai m r equi re s the r eso l uti on o f i ssues w hi ch, under a re gul ato rysche m e, have bee n pla ced w i thi n the speci alco m petence ofan a dm i ni str ati ve body; i n such a case the j ud i cial p roces s i s s uspend ed pend i ng r efer ra l of su ch i ssues to the adm i ni str ati ve b od y for i ts vi ew s. ” S ee al so City of Pe or i a v. Ge ne r al E lectric C a blev isio n C o rp ., 6 9 0 F. 2d 116, 120-21 (7th Cir. 1982 )
. A l though the ro l e ass i gned by the Tel eco m m unica

ti ons A ct t o the s tat e co m m i ssi on i n approvi ng, r ej ec ti ng, o r i m po singa g r ee m en ts i s l ar g ely l i m i te d t o a ss ur i ng th at th ey are “n on d isc rim in at or y” an d se rv e t h e “ p u b lic i nt e r est , conveni ence and necess i ty, ” 4 7 U. S
. C. §§ 252( d)( 1) ( A ) ( i i ) , ( e) ( 2) ( A ) , thes e are br oad cr i ter i a that cr ea te r egu lat o r y di sc r et i o n b as ed o n f ami l i ar i tywi tha techni calfi eld . Se e al so I l l i noi s Publ i c Util i ti es A ct, 22 0 I LC S 5/ 9- 250, 5/ 10- 108. A federa l co urt can pro perl y s tay its p roceed ings to all ow th e state com m issi on to int erp ret the term s of an i nt ercon ne ction agree m en t to assu re com p li an ce w ith th e statu tory c r it eria before th e cou rt add re sse s othe r aspects of the sui t, i ncl ud i ng ( as in thi s ca se) federa l ta ri ffand vei l

- pie rcing cl ai m s. Pri m ar y j uri sdicti on usual l y invol ves re fer ra l to a f ede r ala g en cy, b uti n a c as e su cha s th i s, i n whi cha sta te c om m issi on i s e xerci si ng in effect del ega ted federa l p ow er, the logic oft h e d octrine p erm its a fed eral court’s re fer en c e t o a st at e a ge n c y. C f. Ken dra O i l & Gas , Inc . v.14 N o. 07

- 3425 Hom c o, Ltd ., 87 9 F
. 2d 240, 24 2 ( 7th Ci r. 19 89)
. A n al ter nati ve ap p ro ach

— th e d octrine of B urfo rd v . Sun O il C o ., 31 9 U
. S. 31 5 ( 1943 ) , wh i ch r eq u i re s federa l di str i ct c ourt s t o decl i ne to exer ci se federa l j uri sdic ti on o ve r c ertai n types ofcas es confi ded by st ate l aw to st ate adm i ni str ati ve age nci es

— do es no t fi t th i s c ase. The r ea so n i s no t th e uncert ain ty about w hetherthe sta te com m i ssi on ca n r es o l ve the e nt i r e di spu te o ve r no npa y m en t o fthe pl ainti ff’ s i nt er co nne ct i o n c ha r g es , e ve n tho ug h, i fno t, the properdi sposi ti on i s a s ta y o fthe cour t ca se ra ther than

— w ha t is th e norm al r esu lt of B urfo rd abs tenti on

— i ts d ism iss al. H i Tech Tran s, LL Cv . N e w Jersey, 38 2 F
. 3d 295, 302 ( 3d Cir

. 20 04)
. Fo r i n a dam age s s uit, a sta y m i ght b e an appropr i ate m eans ofeffectuat i ng Bur f o rd abs te nt i o n, as e xpl aine d i n FrontRoyal & War r e n Coun ty Indu s t r i al Park Corp
. v. Town of

FrontRoyal, 13 5 F
. 3d 275, 2 82

- 83 ( 4th Cir
. 19 98)
. The cr i ti calpoi nt, r ather, i s that B urfo rd is li m it e d to cases in w hich “ad j ud ication in federal cou rt woul d ‘ undul y i nt r ude i nt o the pr o ce ss es o fs ta te g o ve r nm en t o r u n d er m in e t h e St at e’s ab ility to m ain ta in d es ire d u n iform ity ,’ ” o r in va d e “ th e St at e’s int er es ts in m ain ta in in g ‘u n iform ity in t h e t re at m en t o f an es se n tia lly l oca l p ro b l em ’
. . . and [ i n] re tai ni ng l oca l co ntro l o ver
‘ d i ffi c u l tq u e s t i o n s o fs t a t e l a w b e a r i n go n p o l i c y p r o b l e ms ofsubst anti alpubli c i m port
. ’ ” Q ua ck enbu sh v . Allsta te Ins. Co. , 51 7 U .S. 70 6, 72 8 ( 1996 ) ( ci tat i ons om i tte d); se e a l so Be h a v i o r a l In s t i t u t eo f In d i a n a, L L C v . Ho b a r tC i tyof C om m on C ouncil , 406 F.3d 926 , 931 (7th C ir. 2005). The r e g ul a t o r y i s s ue s tha ta r i s e i n c a s e s g o v e r ne d b y the Tele com m unica ti ons A ct are not“l oca l ” i n the B urfo rd sense. The r ol e that the A ct c ar ves out f orthe sta tes isN o. 07

- 3425 15 th a to fa n c i l l a r y e n f o r c e r s o fth e c o mp r e h e n s i v e s c h e me of f ede r alt el ec o m m uni ca ti o ns r egul at i o n s etf o r thi n the A ct. The st ate co m m i ssi ons ar e no t e nfo rcing pol i ci es ce nt r alt o s ta te g o ve r nm en t when th eya r e r egulating t e l e c o mm un i c a t i o ns ; i n tha tr o l e the y a r e “ ‘ de pu t i z e d’ f edera l r egul ato r[ s] ” o fthe Tel eco m m unica tion s Act. M C I Teleco m m un ic a t i o n s C o rp. v. Illino is B ell Tel. Co ., 22 2 F. 3d 323, 34 4 ( 7th Ci r. 20 00)
. Despit e the te rm pri m ar y j ur i s di ct i on , the referen ce of a case to an a gencypursuant to that doctr i ne, r atherthan de ny i ng the j ur i s di c t i o n o fthe c o ur to v e r the c a s e , p r e s up p os es th at j u ris d ict ion . See , e.g., U nited Sta tes v. We stern Pac i f i cRy ., sup ra , 352 U .S. at 6 3-6 4; B aker v . IB P, Inc. , 35 7 F.3 d 68 5, 69 2 (7th C ir. 20 04 ); C lark v. Tim e WarnerCa ble, 52 3 F. 3d 1110 , 11 14- 15 ( 9th C ir. 2 00 8)
. I fthe cour t l acke d j u ris d ict ion it w ou ld h av e t o d ism iss t h e su it, n ots ta y it in anti ci pati on o fi ts eve ntual r es u m pti on a fterthe age ncy r ul es . As e xpl aine d i n A rs be rry v. Il li nois , 24 4 F
. 3d 558, 56 3- 64 ( 7th Ci r. 20 01) ( ci tat i ons om i tte d), we are atthe hear t o f the doct ri ne o fp ri m ar y j uri sdic ti on w hen “in a suit i nvol ving a regulated fi rm bu t not brou gh t un d er th e regulatory sta tute i tse l f, an i ssue ar i ses t h at i s withi n the excl usi ve or i gi nal j uri sdic ti on o fthe re gul ato ryag ency to re sol ve, al though the ag ency’ s r eso l ution o f i t wil l usual l y b e su bj ec t to j udi ci alreview
. W he n s ucha n i ss ue a r i se s, the sui t m ust s top a nd the i ssue m ust be re fer re d t o the a gency f orr eso l uti on. If t h e agency ’ s r eso l uti on o fthe i ssue does not dispos e ofthe enti re cas e, the case can re sum e, subj ect to j ud i ci alr evie w o fthatr eso l uti on a l ong w hatev erpath gov er ns r evi ew o fthe age ncy’ s d eci si ons, wh etherbac k t o16 N o. 07

- 3425 th e c o u r t i n wh i c h th e o r i g i n a l c a s e i s p e n d i n g o r, i ft he st atute go ver ni ng r evi ew o fthe age ncy’ s deci si ons desi gn at es a n ot h er c ou rt, t o t h at co u rt .” D es p ite th e re fer en c e in thi s pass age to the “ exc l us i veo r i g i na l j urisdi ct i o n o fthe r egul at o r y a g en cy, ” as we sa i d e ar l i erwe do no t th i nk the c ou rtneed r eferal l di sputes o veran inter connect i on ag r ee m en t to the s ta te c o m m i ss i o n, on ly tho se wher e th e di s pu t e r a i s e s a g e nu i ne p o l i c y i s s ue the r e s o l ut i o n of whi chha s be enc o nfi ded bythe Te l ec o m m uni ca ti o ns A ct t o the s tat e co m m i ssi ons. Forco m ple tenes s we note thati n t h e absence o f di ve r si tyo r fede r al

- que st i o n j urisdi ct i o n, a s ui t to e nf or ce a n i nter connect i on a gr eem ent woul d hav e to be br o ug hti n s ta te c o ur t, thou gh if i n the c o ur se o fthe l i ti gat i on a questi on withi n the pri m ar y j urisdi cti on o f the s t a t e c o mm i s s i o n a r o s e the qu e s t i o n wo ul d ha ve to be r efer r ed to the c o m m i ss i o n. The de f en dan ts do r ai se i ss ue s co nc erni ng the mean i ng of t h e i n te rc on n ec tio n ag re em en t, as w e s aid , bu t it w oul d be pre m atur e a t thi s j unc tu re to r eferany oftho se i s s u es to th e Illino is C om m er c e C om m iss ion . Th e o n ly i ssue add re sse d thus f arin thi s l itig ati on ( apartfro m su bj ect-m atter j urisd iction) i s w he t h e r the d istri ct cou rt ha s per so na l j ur i sdi ct i o n o ve r s i x affi l i at es ofGloba l NA Ps I l l i noi s o n a theor y of“p i er ci ng the co rpor ate ve i l

. ” To ask t h e Illino is C om m er c e C om m iss ion to op in e o n th at to p ic w oul d be t o aski t to ru le on an i ssue unrel ate d to i ts re gu lato ryr esponsibi l i ti es. I t i s a thr esho l d i ssue because u n l e s s i t i s re so lve d in Illin ois B ell’s fav or th is s u it is ac ad em ic

— Glo balN A Ps Il l i noi s has n o asse ts out ofwh i chN o. 07

- 3425 17 to pay a j ud gm ent. The i ss u e of pi er ci ng the co rpor ate ve i l ha s to b e r esolved be f o r e th er e i s an y r efer r alt o the st at e c om m is sio n . Th e d ist ric t c ou rtth er efo re p ro p er ly addr e s s e d th e i s s u e a n d we h a v e n o w t o d e t e r mi ne w hetherthe cour t r eso l ved i t co rr ectl y. F er r o us M inerHol di ng s i s th e par en t o fGl o ba l NA Ps I l l i noi s a nd the othe r defe nd ants. The di str i ct c ourtdi sm i sse d i t a s no t be i ng within t h e cour t’ s per sonalj uri sdict i on. The j ud ge enter ed that d ism i ssa l as a fi nal j ud gm en t unde r Rul e 5 4(b) , fi ndi ngno r ea so n t o de l aythe en tr y o fa n a pp ealabl e o r derl et tingF er r o us M i ne r o ut ofthe case . The plain tiff argues that the di str i ct j ud ge w as not au th o r i z e d t o i s s u e a R u l e 5 4 ( b ) j u d g me n tb e c a u s e t he q u es tio n of p er so n al jur isd ict ion ov er Fe rro u s M in er is entwined w i th questi ons i nvol vi ng o therdefendants, su c h as w h et h er th e d oc tr in e o f p ier c in g t h e c or p or at e v eil can be u s e d b y the p l a i nt i fft o fi x l i a b i l i t y o n othe r affi l i at es o fGl o ba l NA Ps I l l i no i s, f o ur of w hi ch( al l b ut Fer ro us M i ner) r em ai n def endants i n the dist ri ct c ourt
. The ar gum ent i s fri vol ous. The rul e pr ovi des that“when an act i on pre se n ts m or e than one cl ai m f orr el i ef

. . . o r w hen m ult i ple parti es ar e i nvol ved, the cour t m ay [pro

vide d there is n o j us t reason f or delay] direct en try of a fina l j u d gm en t a s t o on e o r m or e, bu t fe w er th an all, of th e cl ai m s o r parti es. ” M ult i ple cl ai m s orm u ltip le p arties. If th ere is one clai m bu t m ultiple p arties, the cou rt can ent erj ud gm ent as t o one o r m or e o fthe parti es, re lea sin g t h em from th e t h re at of liab ility . E .g ., U nited18 N o. 07

- 3425 S t at e s v . Et t r i c k Woo d Pr od u c t s , In c. , 91 6 F
. 2d 1211 , 12 17- 19 (7th C ir. 1990). That the pla i nti ffsho uld be se eking i n thi s a pp ealto change the j ud gm ent into a m er e inter l ocuto ryr uling by th e di st r i ctj udg e th atthe pl aint i ffc an no t br i ngF er r o us M i ne r i nt o the c a s e ( a r ul i ngwi tho utr e s j ud i c a t a e ffe ct unt i l a fi na l j ud gm en t i s en te r ed) i s defea ti st, a nd surpri ses us, as the m er i ts ofthe appeal

— whi chf o r tu
natel y forthe pla i nti ffit has al so ar gued

— ar e co m pel l i ng. F er r o us M i ne r i s th e so l e st o ckho l dero f Gl o ba l NA Ps Illino is, w h ich h as n o a ss et s o th er th an it s Illin ois ce rt ifi ca te o fc o nv en i en ce a nd ne ce ss i ty, no r ev en ue s, no i nc o m e, no fi na nc i als ta te m en ts , no pa y r o l l a ccoun ts, a nd no e m plo yee s be si des i ts thre e o ffi cer s. T he district j ud ge seem s to hav e thou gh t tha t a cou rt i n I l l i noi s co uld o btain j uri sdic ti on o verFe rr ous M i ner only ifthere w as a basis for p ie r c in g Ferrous M iner’s c or p or at e v eil. B u t t h e p lain tiff is n ottry in g t o ob ta in r el i ef ag ains t F r an k Gang i, the o wnero fF er r o us M i ne r . The v e i l i twi s he s t o p i e r c e i s tha to fF e r r o us Mi ne r ’ s s ub s i diary

— th e co r po r at e l i m i te d l i ab i l i tyo fGl o ba l NA Ps I l l i nois

— s o t h at it ca n ge t a t t h e p ar en t c om p an y. U nited St at e s v. Be s t

f oods , 524 U .S. 51 , 61-6 4 (1 99 8); P apa v. Ka ty Indust ri es, Inc. , 166 F.3d 93 7, 94 0-4 1 (7 th C ir. 19 99 ); AP S Sports Co ll ec ti bles, Inc. v. Sports Tim e, Inc. , 29 9 F
. 3d 624, 63 0- 31 ( 7th Ci r . 2 00 2)
. Tha t c orp o r at i o n i s a sh el l

. F o r a ug ht that appears, the onl y r eas on fo r i ts exi ste nce i s that Fer ro us M i ne r d oes notwant to pay f orthe com m unica

ti o ns s er vi ces tha t i t bo ug htfr o m the pl aint i ffi n the nam e o fthe shel l . R ich ar d G angi, the tr eas urero fGlobal N APs I l l i no i s, ha s ac k no wl edg ed th atF er r o us M i ne r ’sN o. 07

- 3425 19

su b sid iar ies are “file c om p an ies ” th at “ d on ’t d o a n yt h in g.” “T he y ha ve no a ss et s. The y ha ve no e m pl o y ee s. ” F r an k Gangi si m i l ar l y desc ribed w hat he cal l s “ re gul ato ry ” co r po r at i o ns as one s tha t e xi st“f o r the pur po se o fs er ving a re gu lat o r y r e q u ire m en t.” It “m ay h av e n o a ss et s, it m ay have no i ncom e, i t m ay h av e no expenses . I t m ay be j ust what w e ca l l a fi l e dra w erco m pany. ” The co rpor ate stru ctu re that the G an gi broth ers ha ve creat ed ap p ears to be des i gned to ke ep al l i ts ass ets i n c or p orati ons that ha ve no l i ab i l i ti es an d al l i ts l i ab i l i ti es i n corp or at i o ns that have no a sse ts. F er r o us M i ne r a r g ue s tha t the l aw appl i cabl e t o pi er ci ng the c or pora te vei l i n thi s ca se i s Del aw ar e law , and that unde r De l awar e l aw the veil c anb e pi er ce d o nl y upo n a sh ow in g of fra u d

. T h at is no t tru e, as it w ou l d e n a b le com panie s t o i nsul ate them sel ves fro m to rtl i abi l i ty by oper ati ng thr ough s hel l co rpor ation s. Fo r i fyo u ar e a b ys ta nd eri nj ured bya tr uck dri ven bythe em plo yee o f a corp oration t ha t has no asse ts, you can not cry
“ f r a ud ”

— th e co r po r at i o n h ad m ade no r epr es en ta ti o ns to y o u. W h at is tr ue i s that in a c ontr actualve i l

- pie rcing ca se, su c h as th is c as e, D ela w ar e p er m i t s p ier c in g t h e v eil on ly up on pro ofei thero ffra ud o r that the c or pora ti on si m plyfuncti oned as a f açade forthe d om in an t s hare

hol der. S ee St ephen B. Pres ser, P ie rc ing t he Corporate Veil § 2 : 8 ( 2008 )
. These ar e cl ose l y r el ate d c rit er i a. S ee Trustees of National Elevator Indust ry Pensi on, Health B ene fi t & E du ca t i onalFu nds v. Lu tyk, 332 F.3d 188 , 193-94 (3d Cir. 20 03 ); So uth east Texa s Inns, Inc . v. P rim e H o spita lity C o rp ., 462 F. 3d 666, 674- 75 ( 6th Ci r. 20 06) , ci ti ng Wal l ace v.20 N o. 07

- 3425 Wood, 7 52 A. 2d 11 75 , 1 18 4 ( Del

. Ch. 1 99 9)
. I f th ere is no subst a nc e a t a l l t o a c o r po r a t i o n, s o tha t i t c a nno t be m ade to answer f orany ofi ts debts, no ra ti onalper son wo ul d ma k e a c o nt r a c twi th i tu nl e s s h e we r e de c e i v e d. “S uppo se a c o nt r o l l i n g s h a r e ho l der [ F er r o us M i ner]
. . . p er su ades a l ender to extend cr edi t o n f avo rabl e t er m s t o the s hare hol der’ s co rpor ati on [ Glo bal NAPs I l l i no i s ] b y r e pr e s e nt i ngtha tthe c o r po r a t i o n ha s su b st an tia l ne t a ss et s, b u t in fac t itis a s h ell, an d all th e assets osten sibly ow ne d by the corp ora t ion are actual l y o w ned by the shar ehol der. The co rpor ati on defa ult s, and w h en t he l ender tr i es to sue the shar ehol der t o col l ect hi s l oan

— f o r the corp or at i o n h as no as se ts ou t o f w h ich to co llec t it

— he i s m et by the defens e ofl i m i ted l i abi l i ty. T h is i s the par adig m ati c ca se f or rej ecting the defense. ” In re Ka iser, 7 91 F.2d 73, 75 (7th Cir. 19 86 ) ; se e a l so Bro wn i n g - F e r r i s In d u s t r i e s o f Il l i n o i s , In c . v. TerM aat, 19 5 F
. 3d 953, 95 9- 60 ( 7th C i r. 19 99)
. H ad Gl o ba l NA Ps I l l i no i s d uri ngi ts ne g o ti at i o ns wi ththe pl aint i ffs ai d that in th e e ve nti t br o k e i ts c o nt r ac t th e pl aint i ffc o ul d f o r g etabo uts ui ng, b ec au se i t i s a sh el l, the pla i nti ffwould not have si gned the contr ac t w i thout a guar anty b y Ferr ous M i ner. I t i s har d to i m agi ne wh y, ex c e p t to co m m it s u c h a fra u d , a bu sin es sm an w ou ld create shell corp orations o t he r than f or tax or regu latory re as on s, w h ich w ou ld n otj u st ify u sin g t h e s h ell to st rip unknow i ng co ntra cti ng par ti es ofal l r em edi es f orbr each ofco ntra ct. N ot that th e pl ai nti ffhas yet pro ved fra ud , o r eve n that Glo balN A Ps I l l i noi s i s j u st a shel l ; the onl y quest i on a t thi s s tag e i s whether the plai nti ffpro du ced enough evi d en c e t o bring F er ro us M i ner w i thi n the perso nalN o. 07

- 3425 21 j uri sdic ti on o fthe dist ri ct c ourt, a p re l i m i naryi ssue to be re sol ved sum m ar i l y b y the j ud ge. The pl ai nti ffh as pro d u c ed m or e t h an en ou gh ev id en c e. Phil l ips v. Pr ai r i eEye C enter, 53 0 F. 3d 22, 26 ( 1st Cir
. 2008 ) ; see al so C entra l Sta tes, So uth east & So uth w est A rea s P e nsio n F un d v . P hen co rp Rei ns uranc eC o ., 4 4 0 F. 3d 870, 877-78 (7th Cir. 2006); Szabo v. B ri dgeport M achines, In c. , 249 F.3d 672 , 675-77 (7th C ir. 2001 ). Sinc e w e a re notr uling tha t the pl ai nti ffcan pie rce G lob al N A P s Illin ois ’s c o rp or at e v eil

— on ly th at th er e is en o ug h ev i den ce to en ab l e th e co m pan y ’ s o wner, F er r o us M in er, to be bro ught withi n the perso nal j uri sdic ti on o f th e d istri ct cou rt

— w e s houl d consi der, i n or der t o pr o v i de s o me g ui da nc e t o the di s t ri ct co ur to n r e man d, th e pla in tiff’s ar gu m en t t h at a fed er al c om m on law of ve il pi e r c i ng, l e s s de man di ng tha n the De l a wa r e s t a nd a r d, sh ou ld a p p ly in st ea d of th at st an d ar d . Th e p lain tiff is cor re ct th at a s tate’ s r est ri cti ve l aw o fve i l pi er ci ng i s no t al l owed to underm i ne the effecti venes s o fa federa l sta tute that provi des r em edi es f orper son s w ho m ay fi nd i ti mpo s s ib l e t o v i nd i c a t e the i r fe de r a l r i g hts i fo pposed by such a l aw . “[ T]he pol i cy und er l yi ng a federa l sta tute m ay not be defeat ed by suc h a n ass er ti on o fst ate p ow er, ” A nders on v. A bbott, 3 2 1 U. S
. 3 4 9 , 3 6 5 ( 1 9 4 4) ; se e al so U ni t e d S t at e s v. Be s t f oods , sup ra ; FirstNational City B ankv. Ba nco P ara E l Com er ci o E xter ior D e C uba , 462 U
. S. 61 1, 62 9 (1 98 3); Brothe rhood of Lo co m ot i ve E ngin e e rs v. S pr i n gf i e l d Te r min al Ry
. , 210 F.3d 18, 25-30 ( 1st C ir. 2000); Lowe n v. TowerA s s e tM anag e m e nt, Inc . , 82 9 F
. 2d 1209 , 12 20 (2d Cir. 1987).22 N o. 07

- 3425 Bu t we doubt that there w i l l be any ne ed i n thi s ca se to de par t from th e Del awar e st an dar d. A per so n who d ea ls w ith a c or p or at ion kn ow in g t h at it is ra d ica lly und er capi tal i zed oro ther w i se unu sual l y di ffi cul t t o obta in a coll ectible j ud gm en t against i n th e even t of a bre ach o fco ntra ct e i th er has onl y hi m sel fto bl am e o r w as com pensated by the other partyf orthe i ncre ase d ris k t h at its ca p ita l st ruct u re p lac ed on h im
. B rown ing-Fe rr is Indu s t r i e s of

Il l i noi s , Inc . v. Te rM aat, s upra , 19 5 F
. 3d at 960. ( The r e i s no su g g es ti o n th at as a co m m o n ca rri er the pla i nti ffwas obl i gat ed to se l l to a fi rm thatco uld not pay f or the ser vi ce i t w as buyi ng. ) The pla i nti ffar gues that i tw a s mi s l e d b y th e s h e l l ’ s a p p e a r i n gt o b e a r e a l fi r m. If th at is righ t itis en tit led to p ier c e t h e c or p or at e v eil, id. at 959 -60 ; I n re Ka iser, sup ra , 791 F.2d at76 ; Bri das S. A. P.I
. C. v. Gove r nm e ntof Turkm e ni s t an , 44 7 F
. 3d 411, 41 6- 17 (5 th C ir. 20 06 ); Torc o Oil Co. v. Inno vat i veThe r m al Corp. , 763 F. S up p. 14 45, 14 50- 51 ( N
. D. I l l

. 19 91) , and i fnot, not
. Fer ro us M i ner i s with in the dist ri ct c ourt ’ s per sonal j urisd iction. T he j ud gm en t d ism issi ng it is t he refore r e v e r s e d.

12- 22- 08