Court Opinion

ID: 9884560
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:01:48.103958+00
Date Added: 2024-06-11T07:40:03.315688
License: Public Domain

Mr. Justice Schaefer, dissenting: Mr. Justice Underwood, Mr. Justice Ward and I are of the opinion that jurisdiction of this case should be declined under the doctrine of forum non conveniens. Of the four plaintiffs, the two who have owned stock in Crucible for any appreciable length of time reside in Arizona. Of the two plaintiffs who reside in Illinois, one, Morris J. Rubin, acquired the 10,000 shares of stock that he owns between December 10, 1965, and January 10, 1966; on January 12, 1966, he announced the formation of a stockholders’ committee. The other, Harold M. Kass, acquired the 400 shares that he owns on January 3, 1966. This action was commenced on March 23, 1966. As the Supreme Court of the United States pointed out in Koster v. Lumbermens Mutual Casualty Co., 330 U.S. 518, 524, 91 L. Ed. 1067, 1074, the leading case concerning the application of forum non conveniens to stockholders’ derivative actions in the Federal courts: “In any balancing of conveniences, a real showing of convenience by a plaintiff who has sued in his home forum will normally outweigh the inconvenience the defendant may have shown. But where there are hundreds of potential plaintiffs, all equally entitled voluntarily to invest themselves with the corporation’s cause of action and all of whom could with equal show of right go into their many home courts, the claim of any one plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened.” Apart from the fact that the plaintiffs Rubin and Kass, who recently bought stock in Crucible and became members of a stockholders committee to solicit proxies in an effort to elect a new board of directors, reside here, Illinois has no connection with this case. Crucible is a New Jersey corporation. Its principal offices and manufacturing facilities are in Pennsylvania, and its stockholders meetings are required to be held either in New Jersey or in Pennsylvania. Its connections with Illinois, measured in terms of percentage of total sales, total assets and total employees located here, are minimal. None of the conduct of which the plaintiffs complain took place in Illinois. Illinois law will govern the rights of the parties only to the extent that its doctrines of conflicts of laws may be involved. The defendants are three corporations and forty-six individuals. The three corporate defendants have answered the complaint. But jurisdiction has been obtained over only one of the individual defendants, Richard A. Aishton, a former director who lives in Illinois. Our “long-arm” statute provides in relevant part: "Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person * * * to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts: (a) The transaction of any business within this State; (b) The commission of a tortious act within this State; (c) The ownership, use, or possession of any real estate situated in this State * * (Ill. Rev. Stat. 1965, chap, no, par. 17.) It is not suggested that any individual defendant transacted any business in this State which gave rise to the cause of action asserted, or committed any tort in this State. The cause of action is not related to Illinois real estate. It is apparent, therefore, that the court can not obtain jurisdiction over the individual defendants unless they are personally served with process in Illinois. The complaint, however, is aimed primarily at the individual defendants. The relief sought is drastic: injunctions to restrain the defendants from voting for directors, and from acquiring additional stock and further representation on Crucible’s board of directors, and as to the defendant Simon and three other defendants described as his nominees, an injunction to restrain them from acting as directors of Crucible. Damages in the total sum of 200 million dollars are also sought. I am unable to understand the suggestion in the majority opinion that it may not be “necessary” to obtain jurisdiction over the nonresident individual defendants. Jurisdiction over them is particularly important because of the principle that corporations are not responsible for the wrongful acts of their officers or directors, unless done with actual or implied authority, or the corporation has accepted the benefits of those acts. See 19 Am. Jur. 2d Corporations, secs. 1256, 1266, 1427; C.J.S. Corporations, sec. 996. The majority justifies retention of this case primarily upon the ground that it has not been shown that process can be validly served on all of the individual defendants in any other State. Even if it is a fact that no other court can obtain jurisdiction over all of the active participants in the alleged misconduct, that hardly seems to be a persuasive reason for insisting upon the retention of the case in a jurisdiction that can not acquire jurisdiction over any of them. If it be assumed that the conduct of the individual defendants was wrongful, it still would not follow that responsibility for that wrongful conduct can be imposed upon the stockholders of Hunt and Wheeling. Although the majority opinion suggests that there is no forum better suited than Illinois to try the present action, it fails to take account of the fact that Pennsylvania is Crucible’s principal place of business and that several individual defendants apparently reside there and are subject to the jurisdiction of Pennsylvania’s courts. Crucible’s corporate records are there, and much of the conduct of which the plaintiffs complain occurred in that State. The majority also state that “defendants do not * * * claim that they are in any way precluded from putting on a defense in Chicago by reason of having to produce records there.” But a defense can be put on anywhere if the costs of moving records, documents and witnesses are paid. The question is not whether the possibility of a defense is precluded, but the fairness of the imposition of an unnecessary burden. As the majority points out, we do not know the condition of the calendars in other jurisdictions in which this action might have been brought. The gross congestion of the jury calendars in Cook County is, however, a matter of public knowledge. And this court has been alerted to the alarming dimensions of existing and future delay in the disposition of equity cases. Many corporations engage in business in Illinois, and many of them have Illinois stockholders. To retain jurisdiction over a case like this, with which Illinois has no significant connection, will invite an influx of this type of litigation which consumes an inordinate amount of judicial time and energy both in the trial of the action and in the administration of the affairs of the corporations during its pendency. With reference to the doctrine of forum non conveniens as applied to the maintenance of a stockholder’s derivative action, the Supreme Court of the United States said in Koster v. Lumbermans Mutual Casualty Co.: “To entertain such an action places the forum in a position of responsibility toward the whole class which the plaintiff assumes to represent. * * * Thus, such a litigation brings to the court more than an ordinary task of adjudication; it brings a task of administration; and what forum is appropriate for such a task may require consideration of its relation to the whole group of members and stockholders whom plaintiff volunteers to represent as well as to the nominal plaintiff himself.” 330 U.S. at 524, 525-26. This court has assumed grave administrative responsibilities with respect to the management of Crucible. The order of the trial court made no findings as to the truth of the allegations of the complaint, but continued the 1966 annual meeting of the stockholders until August 29, 1966. The judgment of the appellate court directing dismissal of the action was entered on July 22, 1966. On July 29, 1966, the reconvening of the 1966 annual meeting was enjoined pending this court’s final action in the case. Under the laws of New Jersey and its own by-laws, Crucible was required to hold an annual meeting of its shareholders on April 26, 1967. On April 6, 1967, however, another order was entered enjoining Crucible from conducting its 1967 annual meeting pending this court’s final action in the case. On June 15, 1967, Crucible filed a motion requesting leave to conduct a special meeting of its stockholders for the purpose of considering the issuance of additional capital stock. Affidavits in support of its motion emphasized the necessity of this action in terms of the orderly expansion of the business of the company and the maintenance of its competitive position. This court has not acted upon that motion. The majority now reverses the appellate court and remands the case “to the trial court for further proceedings, including the entry of an order setting a new date for the annual shareholders meeting.” For well over a year, without any determination of the truth of the facts alleged in the complaint but denied in the answers, the orderly conduct of the business of Crucible has been prevented. In our opinion the judgment of the appellate court should be affirmed. Underwood, and Ward, JJ., join in this dissent.