Illinois. The trip concerned Quark business. Zurr has not been
in Illinois in 2003.

Laor did not become an employee of Quark until May 2001.
Prior to that, he was a consultant to Quark. Laor was not
involved in the decision to hire plaintiff. During 2001, Laor
made three or four trips to Illinois on Quark business. At least
one of those trips was while Laor was still a consultant. Prior
to plaintiff's discharge, Laor telephoned plaintiff while
Plaintiff was in Illinois to discuss the possibility of plaintiff
relocating to Ohio. Laor made one business trip to Illinois in
2002 and two personal trips to visit family. Laor has not been
in Illinois in 2003.

Laor was not involved in the decision to discharge
plaintiff. However, he was the one responsible for determining
what payments, including severance payments, were due to
plaintiff upon his discharge. Laor made this calculation based
on the employment contract and directed that payments be direct
deposited to plaintiff's bank account in tllinois.

There are two types of personal jurisdiction, general and
specific. General jurisdiction is based on the defendant's
continuous and systematic contacts with the state and is not
dependent on the particular claim that is brought. Hyatt

International Corp, v. Coco, 302 F.3d 707, 713 (7th Cir. 2002).

Specific jurisdiction is based on claims arising out of or
related to the defendant's contacts with the state. Id. In the

present case, the personal jurisdiction law of Tllinois is


That is conduct from which the IWPCA claim arises.? Nowever, it
still must be determined whether such conduct should be
considered conduct that occurred in Illinois. Laor took all this
action from his place of business in Ohio. Plaintiff contends it
should be considered contact with Illinois because Laor's conduct
had an economic impact upon plaintiff in Illinois. As to a tort
claim, an economic injury in Illinois is generally a sufficient
basis for finding that the wrongful conduct from which the claim
arises occurred in Illinois and it will generally also be found
that it is a fair and sufficient basis for bringing suit in

(illinois. See Janmark, Inc. v, Reidy, 132 F.3d 1200, 1202 (7th

Cir, 1997}; Jamison v. UGN, Inc., 2003 WL 22715810 *2 (NLD. ILL.

Nov. 18, 2003); divine/Whittman-Hart, Inc. v. King, 2002 WL

1611585 *4 (N.D. Ill. July 22, 2002); Clearclad Coatings, Inc. v.
Xontal Itd., 1999 WL 652030 *17 (N,D, Ill. Aug. 20, 1999), But

see Allman, 2003 WL 1811531 at *5-6 (discussing tortious
interference claim based on same basic facts as IWPCA claim in
that case). Whether the [WPCA claim should be characterized as a
contract claim, tort claim, or some other form of statutory
claim, an employee suffering economic injury by being denied
wages is an essential element of an IWPCA claim just as injury is

an essential element of a tort claim. Although Laor performed

*For present purposes, it is also taken as true thal 2urr
had the authority to direct that additional compensation be
provided to plaintiff. Even assuming that is conduct £rom which
the IWPCA claim arises, it is an even less sufficient basis for
personal jurisdiction than Laor's affirmative conduct in deciding
how much compensation to provide.



Hyatt,

Instead, the defendant must have “purposefully
established minimum contacts within the forum
State" before personal jurisdiction will be found
to be reasonable and fair. Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 476, 105 8. Ct. 2174,

85 L. Ed, 2d 528 (1985). Crucial to the minimum
contacts analysis is a showing that the defendant
"should reasonably anticipate being haled into
court [in the forum State],”" id. at 474, 105

S. Ct. 2174 (quoting World-Wide Volkswagen

Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct.
559, 62 L. Ed. 2d 490 (1980)), because the
defendant has "purposefully availfed] itself of
the privilege of conducting activities” there.
Burger King, 471 U.S. at 475, 105 S. Ct. 2174
(quoting Hanson v. Denckla, 357 U.S. 235, 253, 78
S$, Ct. 1228, 2 L. Ed. 2d 1283 (1958)). While an
out-of-state party's contract with an in-state
party is not enough alone to establish the
requisite minimum contacts, Burger King, 471 U.S.
at 478, 105 8. Ct. 2174, "prior negotiations and
contemplated future consequences, along with the
terms of the contract and the parties' actual
course of dealing" may indicate the purposeful
availment that makes litigating in the forum
state foreseeable to the defendant. Id. at 479,
105 S. Ct. 2174.

That much is true for all assertions of
jurisdiction, general or specific. Where the
defendant's contacts are more limited, such that
specific jurisdiction is the only option, the
suit must "arise out of" or "be related to" these
minimum contacts with the forum state. This
nexus is important . . . because it aims to give
“a degree of predictability to the legal system
that allows potential defendants to structure
their primary conduct with some minimum assurance
as to where that conduct will and will not render
them liable to suit." World-Wide Volkswagen,

444 U.S. at 297, 100 S. Ct. 559. Potential
defendants should have some control over--and
certainly should not be surprised by--the
jurisdictional consequences of their actions.
Thus, when conducting business with a forum in
one context, potential defendants should not have
to wonder whether some aggregation of other past
and future contacts will render them liable to
suit there.

302 F.3d at 716.



applied. Id. The Illinois long-arm statute enumerates various
grounds for exercising both specific, 735 ILCS 5/2-209(a), and
general, id, 5/2-209(b), jurisdiction. The statute provides that
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." Id. 5/2-209(c). Because
subsection (c) would cover all permissible grounds under
subsections (a) and (b), it is only necessary to consider
subsection (c). Hyatt, 302 F.3d at 714-15. Because, as regards
due process and personal jurisdiction, no operative difference
between the Illinois Constitution and United States Constitution
has yet been identified, it is only necessary to consider the
federal constitutional limits of personal jurisdiction. Id, at
715-16. It is noted, though, that the arguments made by
plaintiff in support of personal jurisdiction fall within
particular categories set forth in the long-arm statute. See 735

ILCS 5/2-109(a) (1) (transaction of business); id. 5/2-209{a) (2)

(tortious action); id. 5/2-209(a)(7) (making or performance of a
contract). See also id. 5/2-209(b) (4) (doing business within
Tllinois) .

The federal test for assertions of personal
jurisdiction has been settled for more than fifty
years: it is the familiar one found in
International Shoe Co. vy. Washington, 326 U.S,
310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), which
reguires that the defendant must have minimum
contacts with the forum state "Such that the
maintenance of the suit does not offend
‘traditional notions of fair play and substantial
justice.'" Id. at 316, 66 S. Ct, 154 (citation
omitted), Those contacts may not be fortuitous.



902, 912 (2d Dist. 2001) (quoting Miller v. Kiefer Specialty
Flooring, Inc., 317 Tll. App. 3d 370, 739 N.E,2d 982, 986

(2d Dist. 2000), appeal denied, 193 Ill. 2d 588, 744 N.E.2d 285
{2001)). The support for that characterization, however, is an
earlier case describing IWPCA claims as being "[c]laims for wages

or final compensation [that] are thus akin to breach of contract

actions." Doherty v. Kahn, 289 T]1l. App. 3d 544, 682 N.E.2d 163
173 (lst Dist. 1997) (emphasis added) (cited by Miller, supra).
See also Khan, 756 N.E.2d at 638 (accepting, for the sake of
argument, the plaintiff's characterization of an IWPCA claim as a
"statutory tort").

Even assuming an IWPCA claim is a type of contract claim,
it is not a claim that arises from contract formation nor
directly from plaintiff's performance under the contract. ‘hus,
Zurr's involvement in recruiting plaintiff and approving the
contract that was offered to him is not conduct from which the
IWPCA claim arises. Zurr was involved in plaintiff's discharge,
but the nonpayment of wages does not arise from the discharge

itself. Krok, 1999 WL 262125 at *4. Zurr's trips to Illinois,

cf. McMurray, 2001 WL 561376 at *3, and Zurr's involvement in the

discharge, cf. id.; Krok, 1999 WL 262125 at *4, are not conduct

from which plaintiff's IWPCA claim against Zurr arises and
therefore cannot support personal jurisdiction.

Laor, however, was the person who decided how much pay
plaintiff was entitled to upon discharge and thus was directly

involved in the transaction from which plaintiff's claim arises,


Minne Order Torm (06/97)

United States District Court, Northern District of Mlinois

Name of Assigned Judge
or Magistrate Judge

WILLIAM T, HART

Sitting Judge if Other
than Assigned Judge

CASE NUMBER 03 C 5729 DATE DECEMBER | 9s 2003
CASE WILLIAM CHEN v. QUARK BIOTECH, INC., ete,
TITLE
{In the following box (a) indicate the party filing the motion, c.g. plainttt, defendant. 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the mation being presented.]

DOCKET ENTRY:

ion) Qo Filed motion of [ use listing in “Motion” box above.]

(2) im Brief in support of motion due

(3) o Answer briefto motion due___. Reply to answer briefdue_____.

(4) Qo Ruling/Hearing onset fort.

(5) oO Status hearing[held/continued to] [set for/re-set for] onset for_ al

(6) im} Pretrial conference[held/continued to] [set for/re-set for]on set for al

(7) Oo Trial[set for/re-set for]on | _at

(8) 0 (Bench/Jury trialj [Hearing] held/continued to at

(9) o ‘This case is dismissed [with/without] prejudice and without costs[by/agrcement/pursuant to]
OOFRCP4(m) Local Ruled. OPRCP4I(a)(1) OO FRCPAL(a)(2)

ao) «of [Other docket entry] Defendants Laor's and Zurr’s motion to dismiss [6] is granted.

Defendants Boaz Taor and Daniel Zurr are dismissed without prejudice for lack of personal
jurisdiction. Counts III and IV of the Complaint are dismissed without prejudice. All
discovery is to be completed by March 12, 2004, Status hearing set for March 17, 2004 at
11:00 a.m.

(il)

[Por further detail see order attached to the original minute order.]

No notices required, advised in open court, Document “4
et .
No notices required. 4 Nainben:
number of nliges
| Notices mailed by judge's stuf.
DEC

Notified counsel by telephone

23,2003

Docketing to mail notices.

Mail AQ 450 form. dockutiny. deputy initials

[7

03 LsNLSId SN
1un ta

Mo Deoormber 12, 2003

Copy to judge/magistrate judge,

Ante mailed notice
ow courtraom

deputy's
initials

62th WY 21 Tad eu
odd dals Cabal 3

qm

mailing initials



See Khan, 756 N,E.2d at 911. A defendant would not reasonably
anticipate that employing a person in another country and state
could result in being sued in Illinois simply because the person
returned to Illinois and had his final paycheck sent there.

No sufficient basis has been shown for exercising
jurisdiction over Zurr and Laor. They will be dismissed from
this action for lack of personal jurisdiction, If plaintiff
would prefer to bring suit in a venue where all three defendants
are subject to personal jurisdiction, he may move to transfer
venue to an appropriate district in Ohio.

I IS THEREFORE ORDERED that defendants Laor's and Zurr's
motion to dismiss [6] is granted, Defendants Boaz Laor and
Daniel zurr are dismissed without prejudice for lack of personal
jurisdiction. Counts III and IV of the Complaint are dismissed
without prejudice. All discovery is to be completed by March 12,

2004. Status hearing set for March 17, 2004 at 11:00 a.m.

ENTER;

Waa. 7 obo;

UNITED STATES DISTRICT JUDGE

DATED: DECEMBER [ vk , 2003



»

his actions in Ohio, the denial of wages to plaintiff is an
essential element of the IWPCA claim.

At the time he calculated plainti

s final pay, Laor was
aware of where plaintiff was located. However, to the extent
Lacor was aware of where plaintiff had performed work, he would
only have known that plaintiff had performed work in Israel and
that, if not terminated, his next assignment would be in Ohio.
Thus, although the last payment was electronically transferred to
a bank in Illinois for the benefit of an Illinois resident, any
unpaid wages would be for work previously performed in Israel or
future work that would have been performed in Ohio. Since
plaintiff never worked for Quark while in Illinois and it was
never intended that he would perform any work for Quark in
Tilinois, none of the unpaid wages now claimed are for work that
would have been performed in Illinois. Although an Illinois
resident at the time he was discharged, plaintiff was never an
employee in Illinois.‘ The fact that certain payments went to
plaintiff's bank account in Illinois would not be enough of a

connection with Illinois to support personal jurisdiction.

‘This raises a question as to whether the IWPCA would
even apply to plaintiff. See Khan, 756 N.E.2d at 912-13. Under
federal procedure, the merit of the claim generally is not an
appropriate consideration in determining whether personal
jurisdiction exists. See Charles Alan Wright & Arthur R. Miller,
Federal Practice & Procedure § 1351 at 243 (2d ed. 1990).

Compare Khan, 756 N.E,2d at 912 (under Illinois procedures "a
court may make a preliminary inquiry into whether the complaint
states a cause of action against a defendant who contests
jurisdiction to insure that acts or omissions that form the basis
of a cause of action that is patently without merit will not
serve to confer jurisdiction").



At least three cases from this district have considered
personal jurisdiction for IWPCA claims against out-of-state
officers of the plaintiff's employing business entity. All of

these cases have found personal jurisdiction to be lacking. See

Allman, 2003 WL 1811531 at *3-7; McMurray v. Improvenet, Inc.,

2001 WL 561376 *1-4 (N.D. Ill. May 22, 2001); Krok v. Burns &
Wilcox, ttd., 1999 WL 262125 *4-5 (N.D. Ill. April 16, 1999).?
The particular facts relevant to personal jurisdiction in the
present case, however, must be considered.

Plaintiff contends Zurr and Laor are subject to
jurisdiction in Illinois because they have transacted business in
Illinois, committed a tort in Illinois, and breached a contract
made and performed in Illinois. For specific jurisdiction,
however, the focus must be limited to the conduct from which
plaintiff's claim arises.? The claim against the individual

defendants are that they failed to pay plaintiff wages that were

due, inois courts have characterized an IWPCA claim as a
"cause of action that arises cut of the employment contract.”

See Khan v. Van Remmen, Inc., 325 L1l. App. 3d 49, 756 N.&.2d

*In Krok, the court found that there would not be
personal jurisdiction for the IWPCA claim, but, because there was
personal jurisdiction based on other claims against the same
defendants, the IWPCA claim was not dismissed for lack of
personal jurisdiction.

"To the extent plaintiff is making a general jurisdiction
argument, neither defendant's conduct was sufficient to
constitute doing business in Illinois. hefendant's contacts were
not continuous and systematic enough to support general
jurisdiction,



Facts taken as true for purposes of defendants' motion
are as follows. Plaintiff's employment contract was signed in
Chicago on March 8, 2001. Neither Zurr nor Laor signed the
contract on Quark's behalf. Zurr, however, approved the contract
that had been negotiated by other employees of Quark. Plaintiff
began working approximately April 1, 2001 and was discharged
December 4, 2001. Plaintiff worked for Quark in Israel. There
is no evidence or allegation that plaintiff worked for Quark in
Illinois prior to working in Israel. Under the terms of the
contract, plaintiff agreed that, upon the completion of his work
in Israel, he would move to Cleveland to work for Quark. On some
unspecified date prior to December 4, 2001, plaintiff returned to
Tllinois and continued to be paid by Quark until his discharge
date. However, after returning to Illinois, plaintiff did not
perform any work duties while awaiting his reassignment. Before
being reassigned to perform work at Quark's Cleveland location,
plaintiff's employment was terminated. Zurr signed the letter
informing plaintiff of the discharge, which was effective
December 4, 2001, The letter was signed in Ohio and mailed to
Illinois, Zurr does not dispute the allegation of the complaint
that he had the authority to pay plaintiff termination pay.

On at least four occasions between spring and December
2000, Zurr met with plaintiff in Illinois in an effort to recruit
plaintiff for employment with Quark, Zurr made a total of five
business trips to Illinois during 2000. In 2001, Zurr was in

Illinois for only a few hours. In 2002, Zurr made one trip to



Collection Act ("IWPCA"), 820 ILCS 115, against all three
defendants. ‘The IWPCA has a provision making certain corporate
officers liable for unpaid wages of employees. It provides:
"Any officers of a corporation or agents of an employer who
knowingly permit such employer to violate the provisions of this
Act shall be deemed to be the employers of the employees of the
corporation." 820 ILCS 115/13. Zurr and Laor have moved to
dismiss the claims against them on the ground of lack of personal
jurisdiction.

The burden is on plaintiff to show that personal
jurisdiction over the individual defendants is proper. Purdue

Research Foundation v. Sanofi-Synthelabo, $.A., 338 F.3d 773, 782

(7th Cir, 2003); Steel Warehouse of Wisconsin, Inc. v. Leach,
154 F.3d 712, 714 (7th Cir. 1998); Allman vy. McGann, 2003 WL
1811531 *2 (N.b. Tl], April 4, 2603). For purposes of ruling on
the question of personal jurisdiction, all uncontroverted facts
alleged by plaintiff, all facts adequately supported by any
affidavit or other evidence submitted by plaintiff, and ail
uncontroverted facts supported by defendants' affidavits or
documentary submissions are assumed to be true. See Purdue

Research, 338 F.3d at 782-83; Mctlwee v. ADM Industries, Inc.,

17 F.3d 222, 223 (7th Cir. 1994); Weidner Communications, Inc. v.

H.R.H. Prince Bandar Al Faisal, 859 F.2d 1302, 1306 n.7 (7th Cir.

1988); Turnock v, Cope, 816 F.2d 332, 333 (7th Cir. 1987);
Allman, 2003 WL 1811531 at *2.



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

WILLIAM CHEN,
Plaintifé,

No, 03 ¢ 5729

QUARK BIOTECH, INC., a
California corporation,

Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiff William Chen is a former employee of defendant
Quark Biotech, Inc., a California corporation with its principal
piace of business in Cleveland, Ohio. Chen is an Illinois
resident. Quark's President and Chief Executive Officer, Daniel
Zurr, is also named as a defendant. Additionally, Boaz Laor is
named as a defendant. Laor is an Executive Vice President for
Quark and President of its United States operations. ‘%urr and
Laor are both Israeli citizens residing in Ohio. There is
complete diversity of citizenship and the amount in controversy
exceeds $75,000.

Plaintiff had a three-year employment contract with Quark
that was terminated after less than nine months of work.
Plaintiff brings a claim against Quark for breach of contract.

He also brings a claim under the Lllinois Wage Payment and