-4-

“General jurisdiction . . . is for suits neither arising out
of or related to the defendant’s contacts [with the forum], and it
is permitted only where the defendant has ‘continuous and
systematic general business contacts’ with the forum.” RAR, 107
F.3d at 1277. Specific jurisdiction, on the other hand, refers to
jurisdiction over a defendant in a suit arising out of or related
to the defendant’s contacts with the forum. See id. Plaintiff
limits his jurisdictional argument to the question of specific
jurisdiction. In failing to argue general jurisdiction over
defendant Cooper, plaintiff waives that ground for personal

jurisdiction. See id; Giotis v. Apollo of the Ozarks, Inc., 800

F.2d 660, 663 (7th Cir. 1986). Thus, we focus exclusively on the
question of specific jurisdiction.

The Constitution permits the court to exercise jurisdiction
over defendants who have certain “minimum contacts” with the forum
state, such that jurisdiction does not offend “traditional notions
of fair play and substantial justice.” International Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). Even defendants not
physically present in the jurisdiction have sufficient “minimum
contacts” if they do some act by which they purposefully avail
themselves of the privilege of conducting activities in the forum

state, see Hanson v. Denckla, 357 U.S. 235, 251-53 (1958), and if

they “should reasonably anticipate being haled into court there.”

World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).


-~9-
B. Cooper and ImproveNet’s Motion to Strike

The Federal Rules of Civil Procedure allow the court to strike
“from any pleading any insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P
12(f). Matter is “scandalous” if it “bears no possible relation to
the controversy or may cause the objecting party prejudice.”

Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 664 (7th Cir.

1992). Although motions to strike are generally disfavored, we
address them when “they serve to expedite, not delay.” Heller

Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir.

1989). The court has considerable discretion in deciding whether
or not to strike an allegation from a complaint. ee Khalid Bin

Talal Bin Abdul Azaiz Seoud v. E.F. Hutton & Co., 720 F. Supp. 671,

686 (N.D. Ill. 1989). Defendants contend that paragraphs 20 and 29
of the complaint must be stricken because they violate Federal Rule
of Evidence 408, which provides that evidence of settlement or
compromise of a disputed claim is inadmissible to prove liability
for the claim or its amount. Paragraph 20 of the complaint states:
“In connection with his employment termination, ImproveNet offered
to pay Plaintiff four’ weeks’ base salary, but demanded in
connection with such payment that Plaintiff sign a full waiver and
complete release of any and all claims he has against ImproveNet.”

Paragraph 29 alleges: “ImproveNet violated the IWPCA by attempting


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Plaintiff, on the other hand, alleges that Cooper has had
“numerous” contacts with Illinois as an officer of ImproveNet and
in connection with transactions relating to plaintiff’s claims
(Complaint, @ 3), and that Cooper does business in Illinois (Id.,
G 5). Specifically, plaintiff alleges that he spoke with Cooper
once a week by telephone. Sometimes Cooper would call plaintiff
from California; sometimes plaintiff would call Cooper from
Chicago. (Affidavit of David F. McMurray, 91 2.) Plaintiff does
not describe the substance of those conversations. Plaintiff also
asserts that he asked Cooper “where things stood” with his overdue
commissions in August 1999 at the annual Hardware Show at McCormick
Place in Chicago. (Id., 46.) According to plaintiff, Cooper told
him that he realized it was a concern and that he would take care
of it. {Id.)

These contacts are not sufficient to justify exercising
jurisdiction over Cooper under federal due process standards
because plaintiff’s claims do not “arise out of or relate to” these
contacts, as required by Burger King. We do not know the substance
of the telephone conversations between plaintiff and Cooper; thus,
they do not afford a basis upon which to assert jurisdiction. And
as for Cooper’s one visit to Chicago in which he allegedly told
plaintiff he would “take care of it,” supposedly meaning
plaintiff’s commissions, the relationship between this contact and

plaintiff’s claims is too tenuous to justify asserting jurisdiction


~5-
Due process also requires that the action arise from or relate to
the defendant’s contacts with the forum state. See Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985); Heritage House

Restaurants, Inc. v. Continental Funding Group, Inc., 906 F.2d 276,

281 (7th Cir. 1990). The court should consider whether it is
reasonable to require the nonresident defendant to litigate in the
forum state, considering factors such as the relative interests of
the litigants, the forum’s interest in litigating the dispute, and
“the interstate judicial system’s interest in obtaining the most
efficient resolution of controversies.” Burger King, 471 U.S. at
477 (quoting World-Wide Volkswagen, 444 U.S. at 292).

Defendant Cooper does not consent to personal jurisdiction in
Tilinois. (Affidavit of Ronald Cooper, @ 12.) According to his
affidavit, he lives and works in California and does not own real
property, vote, pay taxes, or maintain an office or telephone
number in Illinois. (Id., II 3-8.) Cooper states that he has
visited Illinois approximately four times since he was hired by
ImproveNet in March 1999, each time on behalf of ImproveNet. (Id.,
4 11.) Cooper argues that he has “made no contacts with Illinois
sufficient to expect him to bear the time and financial burdens of
litigating in Illinois” and that plaintiff can show no purposeful
Illinois-related activity that arises out of or is related to his

claims. (Defendants’ Reply at 3-4.)


suffice. See id.; Darovec Mktg. Group, Inc. v. Bio-Genics, Inc.,

42 F. Supp. 2d 810, 819 (N.D. Ill. 1999).

Plaintiff contends that the fiduciary shield doctrine does not
apply here because Cooper was motivated by personal interests.}
Plaintiff refers to his allegation in the complaint that Cooper
“willfully and maliciously interfered, and continues willfully and
maliciously to interfere, with Plaintiff’s Employment Contract by
making the decision to deprive Plaintiff of the entire amount of
his commissions earned while an employee of ImproveNet so as to
deprive Plaintiff of his contractual rights.” (Complaint, J 45.)
This statement, however, does not adequately allege that Cooper’s
personal interests motivated the purported tortious interference
with the employment contract between plaintiff and ImproveNet. The
adverbs “willfully” and “maliciously” are too general to describe
a personal interest. Moreover, we are not persuaded by plaintiff’s
argument that a high-ranking corporate officer automatically has a
personal interest to motivate interference with a former employee’s
contract. That inference does not follow.

Because we lack jurisdiction over Cooper, it is unnecessary
to reach Cooper’s motion to dismiss Count II of the complaint as it

pertains to him.

¥V Plaintiff also argues that the fiduciary shield doctrine would not

protect Cooper because his actions were “discretionary.” It is an unsettled
question, though, whether the fiduciary shield doctrine should apply to an
employee, acting solely for his employer’s benefit, who had discretion over his
contacts with the State of Illinois. See Robinson v. Sabis Educ. Sys., Inc., No.
98 C 4251, 1999 WL 412642, at *3 n.3 (N.D. Ill. May 28, 1999).


Minute Order Form (08/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge Sitting Judge if Other
or Magistrate Judge Hon. John F. Grady than Assigned Judge
CASE NUMBER 00 C 7137 DATE 5/16/2001
CASE DAVID F. McMURRAY vs. IMPROVENET, INC. and RONALD COOPER
TITLE
[in the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
Defendants’ Motion to Dismiss

DOCKET ENTRY:

(ly im) Filed motion of [ use listing in “Motion” box above.]

(2) a Brief in support of motion due

(3) a Answer brief to motion due. . Reply to answer brief due

(4) Oo Ruling/Hearing on set for at

(5) Oo Status hearing[held/continued to] [set for/re-set for] on set for at.

(6) Q Pretrial conference{held/continued to] [set for/re-set for] on set for _ at :

(7) oO Trial[set for/re-set for] on at

(8) Oo [Bench/Jury trial] [Hearing] held/continued to at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

DOFRCP4(m) OGeneral Rule 21 CFRCP41(a)(1) CFRCP41(a)(2).

(10) Ml (Otherdocket entry] Defendant Ronald Cooper’s motion to dismiss for lack of personal jurisdiction
is granted and the defendant Cooper is dismissed from this action. Cooper’s motion to dismiss Count II
of the complaint for failure to state a claim as to Cooper is denied as moot. Defendants’ motion to strike
paragraphs 20 and 29 of the compliant is denied. ENTER MEMORANDUM OPINION.

(il) x [For further detail see order (on reverse side offattached to) the original minute order.]

No notices required, advised in open court,
No notices required. pater otnoeg
X_ | Notices mailed by judge’s staff.
Notified counsel by telephone.
Docketing to mail notices. ri) d
Mail AO 450 form, ED-7 feting dehy initits
Copy to judge/magistrate judge. FILED FOR DGCKETING
courtroom OLMAY 21 PH Ge 52 sats otse
fl’ deputy’s
initials
Date/time received in
central Clerk's Office nailing deputy initials

TinplentMoerIoT



-l-
principles, we decline at this time to strike paragraphs 20 and 29
of the complaint on the current record. We note the preliminary
stage of this proceeding, and find that the questions raised by
defendants will be more easily determinable after adequate
discovery. The context and circumstances of the discussions
between the plaintiff | and defendants regarding plaintiff's
commissions are unclear, and there is a question concerning whether
evidence concerning the paragraphs in dispute might be admissible
on other grounds. Although we believe it possible that evidence in
support of the disputed paragraphs will ultimately be refused
pursuant to Fed. R. Evid. 408, it would be improper to grant the
motion to strike at this point in the proceeding.
CONCLUSION
For the reasons stated above, defendant Ronald Cooper’s motion
to dismiss for lack of personal jurisdiction is granted; Cooper’s
motion to dismiss Count II of the complaint for failure to state a
claim as to Cooper is thus moot. Defendants’ motion to strike

paragraphs 20 and 29 of the complaint is denied.

DATE: May 15, 2001

John/F./ Grady, United States Distri Judge



-10-
to coerce Plaintiff to sign a release in order to receive even a
small portion of his earned commissions.”

Federal Rule of Evidence 408 bars admission of evidence of
offering “a valuable consideration in compromising or attempting to
compromise a claim which was disputed as to either validity or
amount” to prove liability for a claim or its amount. The rule
does allow such evidence if it is offered for another purpose,
“such as proving bias or prejudice of a witness, negativing a
contention of undue delay, or proving an effort to obstruct a
criminal investigation or prosecution.” Fed. R. Evid. 408.
Plaintiff appears to contend that defendants’ alleged demand for a
waiver and release did not constitute an attempt to settle a
“disputed” claim. Plaintiff also argues that he is not alleging
the settlement offer to prove liability on defendants’ part, but
instead to prove the “bad faith” of Cooper. (Plaintiff’s
Memorandum in Opposition at 12-13.)

When confronted with a motion to strike a portion of a
pleading, a court should'’consider whether there is any possibility

that the pleading could form the basis for admissible evidence.

See Lipsky v. Commonwealth United Corp., 551 F.2d 887, 893 (2d Cir.
1976). The court should not tamper with the pleadings unless there

is strong reason for doing so. See id.; Nissan Motor Acceptance

Corp. v. Schaumburg Nissan, Inc., Nos. 93 C 2701 & No. 92¢ 6089,

1993 WL 360426, at *6 (N.D. Ill. Sept. 15, 1993). Given these


-7-

over Cooper. The Seventh Circuit has indicated that, to be
relevant for personal jurisdiction, past contacts involving the
forum state should either bear on the substantive legal dispute
between the parties or inform the court regarding the economic
substance of the disputed contract. See RAR, 107 F.3d at 1278.
The exchange between Cooper and plaintiff tells us virtually
nothing about plaintiff's claims or the alleged employment
contract. Cooper’s contacts with Illinois simply do not rise to
the constitutionally-mandated minimum. We cannot say that, through
these limited contacts, Cooper could reasonably anticipate being
required to defend himself here.

Even if plaintiff's claims were sufficiently related to
Cooper’s contacts with Illinois, we would lack jurisdiction over
Cooper because he is protected by the “fiduciary shield” doctrine.
This doctrine, recognized by the Illinois courts, prevents the
exercise of personal jurisdiction over an individual whose presence
and activity in the forum state were solely on behalf of his

employer. See Rice v. Nova Biomedical Corp., 38 F.3d 909, 912 (7th

Cir. 1994) (citing Rollins, 141 Tll. 2d at 268-80, 565 N.E.2d at
1313-18). The fiduciary shield doctrine is not available if the
employee was also (or instead) acting to serve his own personal

interests. See Rice, 38 F.3d at 912. The personal interests need

not be pecuniary; dislike of or malice toward the plaintiff would


-3-

both parties, see Nelson by Carson v. Park Indus., Inc., 717 F.2d

1120, 1123 (7th Cir. 1983), and will resolve all factual conflicts

in favor of the plaintiff, see Deluxe Ice Cream Co. v. R.C.H. Tool

Corp., 726 F.2d 1209, 1215 (7th Cir. 1984).

A federal district court sitting in diversity in Illinois has
jurisdiction over a non-consenting, non-resident defendant if an
Illinois state court would have jurisdiction. See McIllwee v. ADM
Indus., Inc., 17 F.3d 222, 223 (7th Cir. 1994). “Three distinct
obstacles to personal jurisdiction must generally be examined: (1
state statutory law, (2) state constitutional law, and (3) federal
constitutional law.” RAR, 107 F.3d at 1276. As for state
statutory law, the Illinois long-arm statute provides that an
Illinois state court also may exercise jurisdiction “on any other
basis now or hereafter permitted” by the state and federal
constitutions. 735 ILCS 5/2-209(c). Because § 2-209(c) authorizes
personal jurisdiction to the constitutional limit, the analysis
collapses into two constitutional inquiries--one state and one
federal--and we need not consider whether defendants engaged in any
of the acts enumerated in the Illinois long-arm statute. See RAR,
107 F.3d at 1276. Typically, the courts look to the federal due
process clause to construe the Illinois due process clause. See

PepsiCo, Inc. v. Marion Pepsi-Cola Bottling Co., No. 99 C 3939

2000 WL 263973, at *7 (N.D. Ill. Mar. 6, 2000).


-2-
complaint alleges five claims: (1) that ImproveNet breached a
written employment contract with plaintiff, dated June 24, 1998, by
failing to pay certain commissions; (2) that defendants violated
the Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et
seg. (the “IWPCA”’); (3) that plaintiff is entitled to attorneys’
fees from ImproveNet under the Illinois Attorneys Fees in Wage
Actions Act, 705 ILCS 225/1; (4) that plaintiff is entitled to a
declaratory judgment against ImproveNet for future commissions; and
(5) that Cooper tortiously interfered with the employment contract
between plaintiff and ImproveNet. McMurray alleges that he is owed
$265,589.25 plus interest and fees in past commissions and
$694,429.80 in future commissions. (Complaint, @I 25, 41.)

Cooper moves to dismiss the complaint as to him based on lack
of personal jurisdiction and moves to dismiss Count II for failure
to state a claim. Both defendants move to strike paragraphs 20 and
29 of the complaint based on violation of Federal Rule of Evidence
408.

DISCUSSION

A. Cooper’s Motion to Dismiss

On a motion to dismiss for lack of personal jurisdiction, the

plaintiff bears the burden of making a prima facie showing that

jurisdiction over the defendant is proper. See RAR, Inc. v. Turner

Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). The court, in

deciding such a motion, may receive and consider affidavits from


00~7137.011-JCD May 15, 2001

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DAVID F. McMURRAY,
Plaintiff,
v.

No. 00 C 7137

IMPROVENET, INC. and
RONALD COOPER,

Defendants.

MEMORANDUM OPINION

Before the court is defendant Ronald Cooper’s motion to
dismiss plaintiff’s complaint, as it pertains to him, for lack of
personal jurisdiction pursuant to Federal Rule of Civil Procedure
12(b) (2) and for failure to state a claim pursuant to Federal Rule
of Civil Procedure 12(b) (6). Also before the court is defendants’
motion to strike paragraphs 20 and 29 of the complaint pursuant to
Federal Rule of Civil Procedure 12(f). As explained below,
defendants’ motions are granted in part and denied in part.

BACKGROUND

Plaintiff David F. McMurray was employed by defendant
ImproveNet, Inc. (“ImproveNet”), an Internet business, as the
Director of Manufacturer Marketing and Sales from July 13, 1998
until his termination on July 14, 2000. (Complaint, {I 1-2.)

Defendant Ronald Cooper is the president of ImproveNet. The