proper. See RAR. Inc. v. Tuer Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1995). “In deciding

a motion to dismiss for lack of personal jurisdiction, the court may receive and consider affidavits

from both parties.” Glass v. Kemper Corp., 930 F. Supp. 332, 337 (N.D. IL. 1996) (citing Pummock

vy, Cope, 816 F.2d 332, 333 (7th Cir. 1987)). “The court resolves factual disputes in the pleadings
and affidavits in favor of the plaintiff, but takes as true facts contained in the defendant’s affidavit
that remain unrefuted by the plaintiff.” Id, (citing Nelson v. Park Industries, Inc., 717 F.2d 1120,
1123 (7th Cir. 1983)).
Ill, DISCUSSION
A. Personal Jurisdiction
A federal district court “has personal juni sdiction over a non-resident defendant only ifacourt

of the state in which it sits would have such jurisdiction.” See Purdue Research Foundation _v.

Sanofi-Synthelabo, S.A., 338 F.3d 773, 779 (7th Cir. 2003); see also RAR. Inc., 107 F.3d at 1275
(citing Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir. 1995)), In Illinois, a federal district court will
have personal jurisdiction overa nonresident defendant only where: 1) Illinois statutory law properly
grants jurisdiction; 2) the exercise of personal jurisdiction would not violate Lllinois constitutional
law due process requirements; and 3) the exercise of personal jurisdiction would not violate the
United States constitutional law due process requirements. See Central States, Southeast _and

Southwest Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000).

In this case, the three inquiries may be consolidated into one, analyzing whether the exercise
of personal jurisdiction would violate the United States constitutional law due process requirements.
Sce Hyatt International Corp. v. Coco, 302 F.3d 707, 714-16 (7th Cir. 2002) (concluding that the

Tilinois long-arm statute permits Ilinois courts to exercise jurisdiction on any basis permitted by the


shipment was made to RMP in Illinois. Furthermore, Plaintiffs’ Amended Complaint alleges that
Randhawa made several telephone death threats to Stambolic’s Illinois home in December 2002.
Am. Comp. 26. Randhawa allegedly made these death threats in an attempt to coerce Plaintiffs
into a particular course of business which related to the Dealer Instruments. Id. These threats alone
could satisfy the minimum contacts necessary to satisfy specific jurisdiction over Randhawa in
Illinois. However, because Plaintiffs allege that the subject of the telephone calls relates to the
contracts in dispute, and because Randhawa is personally liable on at least some of those contracts,
the court may consider all of Randhawa’s contacts with Tilinois in determining whether he is subject
to personal jurisdiction in Illinois. See Burger King, 471 U.S. at 487.

Based on the foregoing circumstances, both Defendants could have anticipated being haled
into an Ilinois court as a result of their various contacts with Illinois relating to the Dealer
Instruments. Asaresult, Plaintiffs choice of bringing this suit in Illinois is reasonable and fair under
the circumstances. Sec id.

C, Venue

Plaintiffs assert federal court jurisdiction pursuant to both diversity of citizenship as well as
federal question jurisdiction, See Am. Compl. 15. Hence, the applicable venue provision is 28
U.S.C. § 1391(b), which provides in part:

A civil action whercin jurisdiction is not founded solely on diversity of citizenship

may ... be brought in (1) a judicial district where any defendant resides, if all

defendants reside in the same State, [or] (2) a judicial district in which a substantial

part of the events or omissions giving rise to the claim occurred, or a substantial part

of property is the subject of the action litigated ....

28 U.S.C. § 1391(b). Having determined that Defendants are subject to personal jurisdiction in

Illinois, LA Oasis is regarded as residing in this district because under § 1391(c), a corporation is



Se __

og

court has general jurisdiction over a nonresident defendant only when the defendant has “continuous
and systematic general business contacts’ with the forum.” See Purdue Research Foundation. 338

F.3d 787 (quoting Helicopteros Nacionales de Colombia, $.A.v. Hall, 466 U.S. 408, 416 (1984)).

If the court finds that such contacts exist, it may exercise personal jurisdiction over the defendant
even if the action does not arise out of or is not related to the defendant’s contacts with the forum.
See Hyatt International Corp,, 302 F.3d at 713. 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

foram.’” See RAR Inc., 107 F.3d at 1277 (quoting Helicopteros Nacionales de Colombia, 466 U.S.

at 414 n.8).

1. General Jurisdiction

In this case, Plaintiffs do not allege that Defendants had any contacts with IHinois outside of
those which give tise to the claims before the court. Plaintiffs’ Complaint alleges that Defendants
breached the various Dealer Instruments, including the Dealer Agreement authorizing Defendant’ s
use of Shell’s trademarks, colors and identifications. It further alleges that Defendants’ continued
use of these items after the alleged breach constitutes violations under the Lanham Act and that
Randhawa’s threatening statements relate to the Dealer Instruments. Plaintiffs identify only those
contacts which arise out of or retate to Defendants’ negotiation and execution of the Dealer
Agreements and the obligations which arise thereunder. ‘Thus, Plaintiffs fail to show that Defendants
have such continuous and systematic general business contacts in Dlinois which would subject them
to the general jurisdiction of the [Hinois courts. See Purdue Research Foundation, 338 F.3d at 788
(recognizing the high standard needed to establish general jurisdiction over a nonresident defendant).

As such, the court only need to analyze whether Plaintiffs’ Amended Complaint establishes that the



Ree

Illinois and United States Constitution); see also Klump, 71 F.3d at 1371 (indicating “if the contacts
between the defendant and Ilinois are sufficient to satisty the requirements of due process, then the
requirements of both the [{Ilinois long-arm statute and the United States Constitution have been met,
and no other inquiry is necessary”).
B. Constitutional Limits on Personal Jurisdiction

The Due Process Clause of the Fourteenth Amendment limits when a state may assett
personal jurisdiction over nonresident individuals and corporations. RAR, 107 F.2d at 1277 (citing

Pennoyer v. Neff, 95 U.S. 714,733 (1878)). As elucidated by International Shoe Co. v. Washington,

326 U.S. 310 (1945) and its progeny, to satisfy the requirements of federal due process, a non-
resident defendant must have established sufficient “minimum contacts” with the forum state such
that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice.
See generally RAR, 107 F.2d at 1277. To establish such “minimum contacts... [ilt is essential in
each case that there be some act by which the defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the benefits and protections of its laws,”
Hanson y. Denckla, 357 U.S, 235, 253 (1938). In determining whether sufficient “minimum
contacts” exist, courts consider whether a defendant could “reasonably anticipate being haled into
court” in that forum. See World-Wide Volkswagen Corp. v. Woodsen, 444 U.S. 286, 297 (4980),
This requirement is satisfied when the defendant intentionally directs his activities at forum state
residents and the litigation arises from injuries allegedly caused by those activitics. See Burger King
Corp. v. Rudzewiez, 471 U.S, 462, 474 (1985).

The Supreme Court has divided the “minimum contacts” inquiry into two distinct categories,

general jurisdiction and personal jurisdiction. See Hyatt International Corp., 302 F.3d at 713. A



and La Oasis, Inc....” Id. By executing all of the Dealer Instruments, Defendants knew they were
contracting to do business with a company located in Illinois.

Although contracting with an out-of-state party alone cannot automatically establish
sufficient minimum contacts in the other party’s forum, the court must view “the contract in the
context of the entire transaction of which it is a part.” Burger King, 471 U.S. at 478-79, Under the
Dealer Instruments, all purchase orders for gasoline were to be communicated to a company in
Mlinois. See Am, Compl., Ex. A. Similarly, all payments required under the Dealer Agreement were
to be made (o a company in [Ilinois. See id. This alone is enough to establish personal jurisdiction
over Defendants. See Burger King, 471 U.S. 487 (holding that where a franchisee establishes a
“substantial and continual relationship” with a franchisor located in another state, the franchisce
subjects himself to personal jurisdiction within that state). Although Plaintiffs were not parties to
the Dealer Instruments at this time, these contacts are nevertheless relevant to the analysis because
in breach of contract cases, the focus is on Defendants’ contacts with the forum which relate to the
contract itself. Sce Purduc Research Foundation, 338 F.3d at 781. Because the Dealer Instruments
are the contracts in dispute, Shell’s later assignment of the rights under the agreements to RMP does
not affect Defendants’ previous contacts with Tllinois. See id.

Additionally, after Equilon assigned the rights under the Dealer Instruments to RMP,
Defendants had further contacts with Illinois, On January 13, 2003, Randhawa sent an e-mail to
RMP acknowledging the existence and binding nature of the Dealer Instruments and offering to sell
unbranded gasoline in return for the termination or modification the agreements. See Am. Compl.
4.19. Also, on April 16, 2003, LA Oasis received a shipment of gasoline from RMP, See Pls.”

Resp., Ex. A. This shipment was from a refinery located in Argo, Illinois. See id. Payment for this


Se

Minute Order Form (04/97)

United States District Court, Northern District of Minois

Nana ef Aine utr Charles Norgle mo oe er

CASE NUMBER 03 C 3358 DATE 2/3/2004
CASE RM Petroleum, Inc. vs. LA Oasis, Inc.
TITLE

{in the following hox (a) indicate the party filing the motion, «.g., plaintiff, defendant, 3rd party plaintiff, and (by stave briefly che nature
of the motion being presented]

MOTION;
Defendants’ Motion to Dismiss Plaintiffs’ Amended Complaint
DOCKET ENTRY:
(1) qa Filed motion of [ use listing in “Motion” box above.]
(2) a Brief in support of motion due_
3) a Answer briefto motion due. Reply to answer briefdue_
(4) G Ruling/Hearing on set for at
3) QO Status hearing[held/continued to) {set for/re-set for]on set for at.
(6) a Pretrial conference[he}d/continned to} [set for/re-set for}on set for_ at
(7) im} Trial{set for/re-set for}on at
(8) 9 {BenchJury trial] [Hearing] held/continuedto___— ss at__
(9) im This case is dismissed {with/without} prejudice and without costs[by/agreemenU/pursuant to]
COFRCP4(m) C Local Rule 4t.t COFRCPSt(a)\(1} 0 FRCP41{ax(2),
ao [Other docket entry} Before the court is Defendants’ Motion to Dismiss Plaintiffs’ Amended

Complaint [20-1]. For the reasons stated on the attached Opinion and Order, Defendants’ motion [20-1]
is DENTED, (See attached.) Additionally, the Cletk’s docket shows Plaintiffs’ Motion for a Preliminary
Injunction [3-1] as pending. Given the passage of time and the efforts by the parties to resolve the issues
raised in the motion, the court regards the motion as moot. Thus, Plaintiffs’ motion [3-1] is DENIED as
moot. If either party is not in agreement, it shall file an appropriate motion within 14 days. It is so
ordered. fe )

a [For further detai) sec order attached to the original minute order,

No notices required, advised in open court.

qy

Document:
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25

No tiotices required.
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EB 05,2004

Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing Lo mail notices.

Mail AQ 450 form.

Lunea fanvsia sia

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Copy to judge/magistrate judge. aon Ud
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Dealer Instruments were executed in Indiana, they required thal payment be made to Illinois. It is
the failure to pay RMP in Illinois that forms the basis of RMP’s breach of contract claims against
Defendants. See Truserv Corp., 6 F. Supp, 2d at 792 (although contracts were exccuted in
Pennsylvania, it is the defendant’s failure to pay plaintiff in Llinois that constitutes the basis of its
claims). This applies to both LA Oasis and Randhawa, who signed personally guarantying payment
on both the Dealer Agreement and the Note, Similarly, undcr the Dealer Agreement, Defendants are
required to take delivery of Shell branded gasoline from RMP in Ilinois. Because Plaintiffs allege
that Defendants failed to do this, this omission, which forms the basis of Plaintiffs’ claims, occurred
in Illinois. See id. Also, Plaintiffs allege that Defendants sent checks for payment of obligations
under the Dealer Instruments knowing that there were insufficient funds available in the account.
These checks were sent to Illinois. Therefore, this alleged breach also occurred in Tllinois, Lastly,
Plaintiffs allege that Randhawa made several threatening telephone calls to Stambolic at his home
in Illinois, Although Randhawa was in Indiana when he made these calls, the alleged threat was
conveyed to Stambolic in Illinois, for which he could expect to be haled into the courts of Illinois.

Based on the foregoing activities, a substantial portion of the activities and omissions giving
rise to Plaintiffs’ claims occurred in the Northern District of Illinois. Sce Trusery Corp., 6 F. Supp.

2d at 792. Therefore, venue is proper in the Northern District of Illinois.

li



deemed to reside in a district in which it is subject to personal jurisdiction, Randhawa, however, is
not a corporation and resides in Indiana. Therefore, because both Defendants do not reside in
Illinois, venue is not proper in this judicial district under § 1391(b)(1).

Turning to § 1391(b)(2), this section is the result of a 1990 amendment in which Congress
chose to broaden the scope of the previous provision which usually resulted in venue being proper
in only one judicial district. See First of Michigan Corp. v. Bramlet, 141 F.3d 260, 263 (6th Cir.
1998); see also David D. Siegel, Commentary on the 1988 and 1990 Revisions of Section 1391,
Subdivisions (a), (b) and (e), 28 U.S.C.A. § 1391 (1993). Thus under the current version of §
1391(b)(2), venue can be proper in more than one judicial district. Sce Truserv Corp. v. Neff, 6 F.
Supp. 2d 790, 792 (N.D. Til. June 2, 1998). Section 1391(b)(2) provides that venue exists in a
district if “a substantial part of the events or omissions giving rise to the claim occurred” there, 28
U.S.C. § 1391(b)(2). This does not mean, however, that the majority of the events in the instant case

must have taken place in Illinois. See id.; see also Chemical Waste Management, Inc. v. Sims, 870

F, Supp. 870, 875 (N.D. Ill. Dec. 12, 1994). “The test is not whether a majority of the activities

pertaining to the case were performed in a particular district, but whether a substantial portion of the
activities giving rise to the claim occurred in the particular district.” Id.

In this case, Defendants contend that the claims against them are based on alleged acts and
omissions that took place in Indiana, not Illinois. Defendants argue that because the only substantial
events occurred, if at all, in Indiana, venuc in Illinois is not proper. See Def’s.’ Mot. to Dismiss, at
8. However, Defendants’ decision to focus solely on the events which occurred in Indiana, at a
particular point-in-time, is misplaced, Given the unitary nature of the Dealer Instruments, the court

must look at all of Defendants’ actions under the contracts to determine proper venue. Although the

10



Illinois courts have specific jurisdiction over Defendants. Scc¢ RAR Inc., 107 F.3d at 1277
(indicating that a party waives its general jurisdiction argument when it fails to allege “systematic
contacts with Illinois” in its complaint).

2. Specific Jurisdiction

In specific jurisdiction cases, the court must decide whether a defendant has “purposefully
established minimum contacts within the forum state” and consider whether those contacts would
make personal jurisdiction reasonable and fair under the circumstances. See Burger King, 471 U.S.
at 476-77. This requircs a showing that the defendant could have anticipated being haled into the
courts of the slate as a result of its contacts with the forum. See id.; see also World-Wide
Volkswagen, 444 U.S. at 297. “Notably, it must be the activity of the defendant that makes it
amenable to jurisdiction, not the unilateral activity of the plaintiff or some other entity.” Purdue
Research Foundation, 338 F.3d at 787, To ensure that jurisdiction is not based on fortuitous
contacts, there must be at least some showing that the defendant purposefully availed itself of the
privilege of conducting activities within the forum state. Id,

In this case, Plaintiffs’ First Amended Complaint alleges that Defendants had contacts with
Illinois dating back at least to November 12, 1997. At this time, Defendants sought to enter into a
franchise agreement with Shell, through its agency located in Oak Brook, Illinois (“Oak Brook
Shell”). See Am. Compl., Ex. A (Nov. 12, 1997 letter). Thus, Defendants solicited the contract and
negotiated its terms with a corporation in Illinois several weeks prior to the execution of the

agreement, Also, although the Dealer Instruments appear to have been executed in Indiana, the

Dealer Agreement itself expressly states that it is “an agreement... between [Oak Brook Shell] . .



“

branded products to Defendants at the Taft Station pursuant to the Dealer Instruments, Numerous
purchases and sales were transacted.

In December 2002, Randhawa made at least three telephone calls to the linois home of
Plaintiff Robert Stambolic, the President of RMP. Plaintiffs allege that these calls conveyed
threatening messages, including threats that he intended to murder Stambolic and his family.
Plaintiffs further allege that these threats were an attempt to coerce Stambolic into a particular course
of action regarding the Dealer Instruments.

After May 12, 2003, Defendants treated the Dealer Agreement as terminated, Defendants
also allegedly continued to sell Shell-branded products and commingle Shell-branded gasoline with
unbranded gasoline despite the presence of Shell-branded trademarks, colors and other Sheli
identifications on or about the Taft Station.

On May 20, 2003, Plaintiffs filed the present lawsuit. On September 9, 2003, Plaintiffs filed
a first Amended Complaint alleging that Defendants breached the various Dealer Agreements,
violated the Lanham Act, 15 U.S.C. §§ 1051-1127, and that Defendant Randhawa committed the tort
of assault against Stambolic, On October 2, 2003, Defendants filed their Motion to Dismiss
Plaintiffs’ First Amended Complaint, which asserts that the court lacks personal jurisdiction over
both Defendants and that venue is improper. On January 24, 2004, after granting Plaintiffs’ Motion
to Set Ruling on Defendants’ Motion to Dismiss, the court heard oral argument on Defendants’
Motion to Dismiss. Defendants’ Motion to Dismiss is now ready for ruling.

Il. STANDARD OF REVIEW
Once a defendant has challenged a court’s exercise of personal jurisdiction, the plaintiff has

the burden of demonstrating that the court’s exercise of personal jurisdiction over a defendant is


of all indebtedness incurred by LA Oasis to Shell (“General Guaranty”), On December 2, 1997, LA
Oasis entered into a Dealer Agreement relating to the Taft Station with Shell. The Dealer Agreement
required, among other things, that LA Oasis purchase certain quantities of gasoline from Shell each
month, and sell Shell-brandcd motor fuels and lubricants under Shell’s trademarks, brand names,
service marks and color schemes. Defendants also entered into a Promissory Note (“Note”) on
December 2, 1987, in which Shell agreed to pay Defendants $350,000 for the purpose of financing
improvements at the Taft Station pursuant to the Dealer Agreement. Additionally, on the same date,
Randhawa signed agreements in which he personally guaranteed the Note (“Note Guaranty”) and in
which LA Oasis gave Shell a security interest in certain assets 10 secure payment on all existing and
future indebtedness, liabilities and obligations (“Security Agreement”).

Upon execution of the Dealer Agrecment, Note, Note Guaranty, Security Agreement, and
General Guaranty (hereinafter collectively referred to as “Dealer Instruments”), Defendants
commenced a commercial relationship with Shell lasting about three years. Under the terms of the
Dealer Agreement, Defendants operated the Taft Station until May 12, 2003, the date on which the
Dealer Agreement expired.

On September 1, 2002, Shell entered into a Wholesale Marketer Agreement (“Wholesale
Agreement”) with Plaintiff RM Petroleum (“RMP”), RMP is an Illinois Corporation with its
principal place of business in Chicago, Illinois. Under the terms of the Wholesale Agreement, RMP
was authorized, as a non-exclusive wholesaler, to sell Shell products in Lake County, Indiana. On
October 10, 2002, Shell, through its successor Equilon, assigned to RMP all of Shell’s retail
operations in Lake County, Indiana, including the contractual rights and obligations pursuant to the

Dealer Instruments. Pursuant to the assignment, RMP took the place of Shell in supplying Shell-


Re __

IN THE UNITED STATES DISTRICT COURT
FOR TRE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION DOCKE TED

RM PETROLEUM, INC. and

ROBERT STAMBOLIC,
Plaintiffs, No. 63 € 3358

v. Honorable Charles R. Norge

LA OASIS, INC.,
HARRY RANDHAWA,

Defendants.
OPINION AND ORDER
Before the court is Defendants’ Motion to Dismiss Plaintiffs’ Amended Complaint brought
pursuant to Federal Rules of Civil Procedure 12(b)(2) and ( 3). For the following reasons,
Defendants’ motion is dented.
1. BACKGROUND
Defendant LA Oasis, Inc. (“LA Oasis”) is an Indiana corporation which owns and operates
aretail petroleum station located at 9247 Taft Street, Merriville, Indiana (“Taft Station”). Defendant
arry Randhawa is an officer and shareholder of LA Oasis.
In December of 1997, LA Oasis and Randhawa (hereinafter collectively referred to a
“Defendants”) entered into several agreements with the Shell Oil Company (“Shell”). Specifically,

on December 1, 1997, Randhawa entered into an agreement guarantying prompt and full payment

‘In the alternative, Defendants move for the court to transfer this action to the Northern
District of Indiana. At this time, the court does not consider Defendants’ Motion to Transfer
Venue because no party has addressed the issues in light of the factors contemplated in 28 U.S.C.
§ 1404(a}. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220 (7th Cir, 1986),

1

FEB 05 2og4

Soy


{V. CONCLUSION

For the foregoing reasons, Defendants’ Motion to Dismiss Plaintiffs’ First Amended

Complaint is denied.

ITIS SO ORDERED.
Lyle?

Charles Ronald Norgle, Judge {/

United States District Court
paren VHA Y

12