Court Opinion

ID: 770917
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:41:39+00
Date Added: 2024-06-11T12:55:30.717660
License: Public Domain

230 F.3d 934 (7th Cir. 2000)
Central States, Southeast and Southwest  Areas Pension Fund, and Howard McDougall,  trustee, Plaintiffs-Appellants,v.Reimer Express World Corporation,  a Canadian corporation, and Reimer Express  Enterprises Limited, a Canadian corporation, Defendants-Appellees.
No. 00-1502
In the  United States Court of Appeals  For the Seventh Circuit
Argued September 13, 2000Decided October 18, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.  No. 99 C 2524--James B. Moran, Judge.[Copyrighted Material Omitted][Copyrighted Material Omitted]
Before Flaum, Chief Judge, and Bauer and Kanne,  Circuit Judges.
Flaum, Chief Judge.

1
Central States, Southeast  and Southwest Areas Pension Fund, and its trustee  Howard McDougall (collectively, the "Fund")  appeal the dismissal of their suit and the denial  of their motion to conduct discovery against  Reimer Express Enterprises, Limited ("REE"), and  Reimer Express World Corporation ("REWCOR"). The  Fund challenges the district court's  determinations that personal jurisdiction over  the defendants, two Canadian companies, was  lacking and that discovery on this issue was  unnecessary. For the reasons stated herein, we  affirm.

I.  Background

2
REE is a Canadian holding company corporation  with its principal place of business in Winnipeg,  Manitoba, Canada. In January 1986, REE owned all  the stock of a Canadian corporation named 141622  Canada, Inc., when this corporation purchased all  the common stock of another Canadian company,  140593 Canada, Inc. The record does not reveal  where this acquisition took place, but the  district court concluded that the transaction  occurred in Canada. 140593 Canada, Inc. owned all  the stock of Inter-City Truck Lines, Inc.  ("ICTL"). Thus, from January 1986 until February  1994 when REE sold 141622 Canada, Inc., REE was  the corporate "great-grandparent" of ICTL.  REWCOR, which was formed as a Canadian  corporation on November 29, 1993, is a wholly  owned subsidiary of REE.

3
ICTL was a Canadian corporation with its  principal place of business in Canada that also  operated a United States trucking enterprise out  of Detroit, Michigan. ICTL engaged in extensive  business in the United States and participated in  the Fund. Under collective bargaining agreements  between ICTL and Local 299 of the International  Brotherhood of Teamsters, ICTL was obligated to  contribute to the Fund on behalf of ICTL's  employees. The Fund is a multiemployer pension  plan within the meaning of the Employee  Retirement Income Security Act ("ERISA"), 29  U.S.C. sec.sec. 1002(37), 1301(a)(3), and is  administered from Rosemont, Illinois.

4
ICTL contributed to the Fund under a collective  bargaining agreement covering April 1, 1988  through March 31, 1991. From the beginning of  this period until March 1990, the Fund sent bills  to ICTL's address in Detroit. In March 1990, ICTL  requested that its billing address be changed to  a street address in Winnipeg, Manitoba, which was  not the address of the registered office of REE.  In January 1991, ICTL asked that the Fund change  its address to a post office box, which also was  located in Winnipeg.

5
On November 13, 1991, the Fund received via fax  a document titled "Fringe Benefit Agreement"  whose cover page was on REE's letterhead. This  agreement extended ICTL's obligation to  contribute to the Fund on the terms provided by  a national collective bargaining agreement. It  was signed by J.D. Cockburn, whose title was  described on the document as Manager of Human  Resources and Industrial Relations of REE and  whose address was that of REE. The fax legend  named the sender of the document as "REE/ICTL."

6
In November 1992, the Fund received a fax from  Linda Messel, whose position was listed as "ICTL  (Payroll)." The letterhead of the fax cover page  read "Reimer Express Enterprises Ltd.,  Administration Centre, Winnipeg." The attachments  to this fax related to ICTL's obligation to remit  contributions to the Fund. Prior to this fax, the  Fund had received a fax from the same person with  a cover page reading "Reimer Express Lines,"  which was a subsidiary of REE at the time.

7
In May 1993, ICTL went out of business and  ceased to have an obligation to contribute to the  Fund. This constituted a withdrawal under the  Multiemployer Pension Plan Amendments Act of 1980  ("MPPAA") to ERISA. 29 U.S.C. sec. 1383. Under  MPPAA, an employer that withdraws from a pension  plan incurs withdrawal liability. 29 U.S.C. sec.  1381. Businesses under common control are jointly  and severally liable for the withdrawal liability  of any affiliate.1 29 U.S.C. sec. 1301(b)(1).

8
The Fund assessed ICTL's withdrawal liability to  be $310,922.12. The Fund prevailed in a suit  against ICTL for this amount plus interest, but  this judgment has not been satisfied. After  determining that REE and REWCOR were affiliated  with ICTL, on June 23, 1994, the Fund sent a  notice demanding payment of ICTL's withdrawal  liability plus interest. The defendants asked for  a review of the Fund's determination, which was  denied by the Fund on November 1, 1994. The  Canadian companies have refused to pay the  withdrawal liability.

9
The Fund filed the current action in federal  district court in Illinois and served process on  REE and REWCOR in Canada. The defendants filed a  motion seeking to dismiss under Federal Rules of  Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6).  As part of that motion, the defendants submitted  the affidavit of W.A. Redekopp, the general  counsel of REWCOR. Redekopp said that REE, REWCOR  and its subsidiaries such as ICTL have observed  all corporate formalities, and that neither  defendant exercised day-to-day management control  of ICTL, 141622 Canada, Inc., or 140593 Canada,  Inc. Redekopp also stated that REE or REWCOR have  not done any business, have not had an office or  telephone number, or owned or leased any property  in Illinois or anywhere in the United States.

10
Accompanying the defendants' reply brief was an  affidavit from James D. Cockburn and a second  affidavit from Redekopp. Cockburn stated that in  1991 he was employed by REE and served as a  consultant to REE's operating subsidiaries on  labor matters. REE charged its subsidiaries a fee  for the use of Cockburn's services. Cockburn  further averred that prior to executing the  aforementioned fringe benefit agreement, he  discussed the matter with Hugh Richardson, then  president of ICTL, who orally authorized Cockburn  to sign the document on behalf of ICTL. Thus,  Cockburn claims that he was serving as an agent  of ICTL and not REE when he signed the agreement.  Redekopp stated that REE provided administrative  services to its subsidiaries in return for fees.  Redekopp explained that Messel was employed by  REE and, at the request and direction of ICTL  management, provided payroll services to ICTL,  which was charged by REE for these services. He  also claimed that none of these REE employees  were involved in the day-to-day management of the  subsidiaries.

11
The trial judge granted the defendants' motion  to dismiss because personal jurisdiction was  absent, without ruling on the other grounds for  dismissal.2 The court stated that corporate  ownership generally is not a sufficient basis for  personal jurisdiction. Likewise, the provision of  administrative services by a parent for a  subsidiary does not trigger personal jurisdiction  over the parent. The Fund had not alleged that  REE and REWCOR were the alter egos of ICTL,  controlled ICTL to the degree necessary to pierce  the corporate veil, or exerted substantial  control over ICTL's day-to-day activities. The  court also denied the Fund's request for  discovery, finding that the activities plaintiffs  wished to investigate were attributable only to  ICTL and were not related to the ERISA cause of  action. The Fund timely appealed.

II.  Discussion
A.  Personal Jurisdiction

12
The Fund argues that the district court had  specific personal jurisdiction3 over the  defendants based on their contacts either with  Illinois or with the United States as a whole. It  claims that the standard rule that corporate  ownership cannot confer jurisdiction over the  parent does not apply in the context of a  statutory scheme that premises liability on such  affiliation. The Fund also asserts that REE and  REWCOR had enough other contacts with either  Illinois or the United States to be subject to  jurisdiction by the district court.

13
Dismissals for lack of personal jurisdiction are  reviewed de novo. See Logan Productions, Inc. v.  Optibase, Inc., 103 F.3d 49, 52 (7th Cir. 1996).  The plaintiff bears the burden of demonstrating  personal jurisdiction. See RAR, Inc. v. Turner  Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir.  1997). We first determine whether there are  federal or state statutory grounds for personal  jurisdiction, then see whether the state  constitution bars such jurisdiction if it is  based on a state statute, and finally determine  if the exercise of jurisdiction over the  defendant would be consistent with the federal  Constitution.

14
1.  Statutory basis.

15
The Fund served process on REE and REWCOR in  Canada. Service is sufficient to establish  personal jurisdiction if the defendant could be  subject to jurisdiction in courts of the state  where the district court is located. Fed.R.Civ.P.  4(k)(1)(A). If no state could exercise  jurisdiction, then service will establish  personal jurisdiction for claims arising under  federal law if the exercise of jurisdiction is  consistent with the Constitution and laws of the  United States. Fed.R.Civ.P. 4(k)(2). The Fund  argues that the district court has personal  jurisdiction over REE and REWCOR under either the  Illinois long-arm statute or, if Illinois cannot  assert jurisdiction, Federal Rule of Civil  Procedure 4(k)(2) since the MPPAA is a federal  statute and no other state could exercise  jurisdiction.

16
a)  Illinois long-arm.

17
The Illinois long-arm statute permits its courts  to exercise jurisdiction on any basis permitted  by the Illinois and United States Constitutions.  735 Ill.Comp.Stat. 5/2-209(c). Thus, we next turn  to the Illinois constitution. The Illinois  constitution's guarantee of due process are not  necessarily the same as those provided by the  federal Constitution, see Rollins v. Ellwood, 565  N.E.2d 1302, 1316 (Ill. 1990), but Illinois case  law does not elucidate any differences regarding  the instant personal jurisdiction question. See  RAR, 107 F.3d at 1276. Illinois courts exercise  jurisdiction over parents based on the activities  of the subsidiary where the corporate veil can be  pierced, or perhaps where all the corporate  formalities are observed but the subsidiary's  only purpose is to conduct the business of the  parent. See IDS Life Ins. Co. v. SunAmerica Life  Ins. Co., 136 F.3d 537, 541 (7th Cir. 1998).  However, whether corporate ownership alone or  coupled with some administrative activities by  the parent on behalf of the subsidiary is  sufficient for jurisdiction under the Illinois  constitution is unclear. See id. In any case, the  defendants do not argue that state constitutional  law prohibits the exercise of jurisdiction, and  so we assume arguendo that personal jurisdiction  here would not violate the Illinois constitution.  See RAR, 107 F.3d at 1277 (finding Illinois  constitutional law unclear on the question of  personal jurisdiction and so moving to next step  of analyzing federal constitutional law). Thus,  neither the state statute nor constitution  prohibits personal jurisdiction, and so we must  determine whether jurisdiction comports with the  federal Constitution.

18
b)  Federal Rule of Civil Procedure 4(k)(2).

19
The Fund argues that if Illinois courts cannot  exercise personal jurisdiction over REE and  REWCOR, then jurisdiction is proper under Rule  4(k)(2) because it served process on the  defendants. Four conditions must be present for  Rule 4(k)(2) to apply (1) the plaintiff's claims  must be based on federal law; (2) no state court  could exercise jurisdiction over the defendants;  (3) the exercise of jurisdiction must be  consistent with the laws of the United States;  and (4) the exercise of jurisdiction must be  consistent with the Constitution. The Fund is  suing under MPPAA so the first condition is met.  The defendants do not argue that jurisdiction is  proper in some state besides Illinois, so we may  assume that if jurisdiction is not proper in  Illinois that it is not proper in any state.  Whether personal jurisdiction in these  circumstances would be constitutional is  addressed below; in this subsection we address  whether such jurisdiction would be consistent  with the laws of the United States.

20
REE and REWCOR claim that the exercise of  jurisdiction would be inconsistent with ERISA and  MPPAA's service of process sections,4 and  buttress their argument with a citation to United  Elec., Radio and Mach. Workers of America v. 163  Pleasant St. Corp., 960 F.2d 1080, 1086 (1st Cir.  1992). We have previously held that the RICO  statute, whose service of process provision, 18  U.S.C. sec. 1965(d),5 is similar to those of  ERISA, does not authorize worldwide service of  process. See Stauffacher v. Bennett, 969 F.2d  455, 460-61 (7th Cir. 1992). However, both of  these cases were decided under old Fed.R.Civ.P.  4(f) (repealed 1993) which stated that all  process (besides a subpoena) could be served  beyond the territorial limits of the state in  which the districts courts sits "when authorized  by a statute of the United States or by these  rules." (emphasis added).6 The word  "authorized" indicates that some affirmative  expression from Congress through a statute was  necessary before process could be served  extraterritorially. See generally Omni Capital  Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97,  108-111 (1987). The RICO and ERISA service of  process provisions state that service may be made  in "any district," which indicates that Congress  authorized service only in the judicial districts  of the United States and not worldwide. In  comparison, Congress authorized worldwide service  in laws stating that service could be made  "wherever the defendant may be found," or similar  language, which is not limited to the judicial  districts of the United States. See Robinson  Eng'g Co. Pension Plan and Trust v. George, 223  F.3d 445, 449 (7th Cir. 2000).

21
We find that Rule 4(k)(2), which was enacted  after United Workers and Stauffacher, permits  jurisdiction to be exercised by the service of  process even if a statute does not specifically  state that service is proper, as long as the  Rule's conditions are satisfied and no other  statute prohibits jurisdiction or indicates that  jurisdiction would be improper. Three reasons  support this conclusion, two based on principles  of statutory interpretation and the third  grounded in the purposes of Congress in enacting  Rule 4(k)(2).

22
First, Rule 4(k)(2) provides that for claims  arising under federal law where no state could  exercise jurisdiction, service of process is  sufficient to establish personal jurisdiction if  "consistent with the Constitution and laws of the  United States." (emphasis added). Different words  in a statute, in this case "authorized" and  "consistent," should be given different meanings  unless the context indicates otherwise. See,  e.g., Bailey v. United States, 516 U.S. 137, 143  (1995). Similarly, we give statutory words their  ordinary meaning absent some indication that  Congress intended these to have a different  import. See, e.g., Williams v. Taylor, 529 U.S.  420, 120 S. Ct. 1479, 1488 (2000). Unlike  "authorized," whose meaning is described above,  use of the word "consistent" in Fed.R.Civ.P.  4(k)(2) does not require that a statute  explicitly permit worldwide service of process  for service to be proper. A law of the United  States and the act of exercising jurisdiction are  consistent unless exercising jurisdiction  contradicts, conflicts with, or is in opposition  to a law. Thus, if a statutory provision permits  nationwide service but is silent with respect to  worldwide service, then worldwide service is  "consistent" with this statute, since such  service does not contradict or oppose the  statutory language. Rule 4(k)(2), if its other  requirements are met, more or less reverses the  presumption of old Rule 4(f). Under the old rule,  service could not be made internationally unless  expressly permitted by federal statute; under the  new rule, again when its other requirements are  satisfied, service may be made internationally  unless doing so would contradict or be in tension  with another federal statute.

23
Second, current Rule 4(k)(1)(D) states that  service of process is sufficient to establish  personal jurisdiction "when authorized by a  statute of the United States." Rule 4(k)(1)(D)  provides for jurisdiction whenever a statute  explicitly authorizes service of process. If  establishing personal jurisdiction by serving  process was considered inconsistent with a law  which is silent on the issue, then Rule 4(k)(2)  would not have any effect. Under the defendants'  argument, whenever a statute explicitly permits  jurisdiction, Rule 4(k)(1)(D) would apply; if the  statute did not explicitly permit jurisdiction,  Rule 4(k)(2) could not apply. Rule 4(k)(2) would  be meaningless, contradicting the interpretive  principle that every word or provision of a  statute must, if possible, be given some effect.  See, e.g., Public Lands Council v. Babbitt, ___  U.S. ___, 120 S. Ct. 1815, 1826 (2000). Thus,  jurisdiction can be exercised under Rule 4(k)(2)  even where not explicitly provided for in another  federal statute.7

24
Third, Rule 4(k)(2) was intended as a response  to the Supreme Court's decision in Omni Capital,  484 U.S. 97. Fed.R.Civ.P. 4 advisory committee's  note. Omni Capital, which was decided under old  Fed.R.Civ.P. 4(f), involved a plaintiff who  served process on a foreign defendant in an  attempt to initiate an action under the  Commodities Exchange Act ("CEA"), which was  silent on the question of international service.  The Supreme Court held that courts could not  create their own rules for service of process,  and thus the plaintiff's service was improper and  the district court lacked personal jurisdiction  over the defendants. 484 U.S. at 108-09. However,  the Court suggested that "[a] narrowly tailored  service of process provision, authorizing service  on an alien in a federal-question case when the  alien is not amenable to service under the  applicable state long-arm statute, might well  serve the ends of the CEA and other federal  statutes." Id. at 111. Rule 4(k)(2) responds to  this suggestion and is meant to permit  international service of process where statutes  are silent, like the CEA at the time of Omni  Capital. This history of Rule 4(k)(2) further  supports the interpretation that it provides a  statutory basis for personal jurisdiction through  service of process unless this contradicts or  conflicts with another federal law.

25
Rule 4(k)(2) may be applicable to our case.  Permitting personal jurisdiction through  international service does not conflict with and  is not in tension with the ERISA service of  process provisions or any other federal statute  that has been brought to our attention. Thus,  three of the requirements for the use of Rule  4(k)(2), all except the constitutional issue, are  satisfied if no state long-arm statute can be  used. If Illinois cannot exercise jurisdiction  over REE and REWCOR, Rule 4(k)(2) may provide a  statutory basis for personal jurisdiction if  there is no constitutional barrier.

26
2.  Constitutional basis.

27
The Fund has alleged two sufficient alternative  statutory bases for obtaining personal  jurisdiction over the defendants. The remaining  question that must be answered is whether the  exercise of such jurisdiction would be  constitutional. We begin by analyzing the state  long-arm statute and determining if Illinois  could exercise personal jurisdiction over REE and  REWCOR.

28
In order for personal jurisdiction to be  proper, a defendant must have purposefully  established minimum contacts with the forum. See  Burger King Corp. v. Rudzewicz, 471 U.S. 462,  474-76 (1985); RAR, 107 F.3d at 1277. The  generalized foreseeability of the defendant's  action causing harm in the forum is not  sufficient for the exercise of jurisdiction.  Burger King, 471 U.S. at 474. Instead, whether  the defendant's conduct and connection with the  forum are such that it should reasonably  anticipate being hailed into court there is the  crucial inquiry. Id.; RAR, 107 F.3d at 1277. To  establish such a reasonable anticipation the  defendant must have purposefully availed itself  of the privilege of conducting activities in the  forum, invoking the benefits and protections of  its laws. Burger King, 471 U.S. at 474-75; RAR,  107 F.3d at 1277. Once minimum contacts have been  shown to exist, a court must examine other  factors, such as the forum's interest in  adjudicating the dispute and the burden on the  defendant, to determine whether the exercise of  personal jurisdiction satisfies traditional  notions of fair play and substantial justice.  Burger King, 471 U.S. at 476-77. In certain  limited circumstances, these factors may show  that a forum has such a strong interest in  adjudicating a dispute that a lesser showing of  minimum contacts than is normally the case may  suffice for jurisdiction. Id. at 477. To exercise  specific personal jurisdiction, the plaintiff's  cause of action must arise out of or be related  to these minimum contacts that sufficiently  comport with fairness and justice. See  Helicopteros, 466 U.S. at 414 & n.8; RAR, 107  F.3d at 1277.

29
a)  Corporate affiliation.

30
The Fund acknowledges the general rule that  corporate ownership alone is not sufficient for  personal jurisdiction. Nevertheless, the Fund  claims that this principle does not apply in the  context of withdrawal liability under MPPAA  because 29 U.S.C. sec. 1301(b)(1) states that all  businesses under common control shall be treated  as a single entity. The Fund argues that because  this provision has been in effect since 1980, REE  and REWCOR should have reasonably anticipated  being subject to MPPAA liability in Illinois and  the United States. The Fund concludes that  because a district court in Illinois was able to  assert personal jurisdiction over ICTL, Illinois  can exercise such jurisdiction over the  defendants.

31
While we have not squarely considered this  issue before, we hold that constitutional due  process requires that personal jurisdiction  cannot be premised on corporate affiliation or  stock ownership alone where corporate formalities  are substantially observed and the parent does  not exercise an unusually high degree of control  over the subsidiary. Though we are mindful of the  Supreme Court's admonition that "mechanical"  tests generally should not be relied upon in  determining when personal jurisdiction is  constitutional, Burger King, 471 U.S. at 478, the  Court itself has suggested this rule, see Keeton  v. Hustler Magazine, Inc., 465 U.S. 770, 781 n.13  (1984) ("[N]or does jurisdiction over a parent  corporation automatically establish jurisdiction  over a wholly owned subsidiary."). We join other  courts in finding that stock ownership in or  affiliation with a corporation, without more, is  not a sufficient minimum contact. See, e.g., Dean  v. Motel 6 Operating L.P., 134 F.3d 1269, 1273-74  (6th Cir. 1998); Miller v. Honda Motor Co., 779  F.2d 769, 771-72 (1st Cir. 1985); Transure, Inc.  v. Marsh and McLennan, Inc., 766 F.2d 1297, 1299  (9th Cir. 1985); see also Shaffer v. Heitner, 433  U.S. 186, 216 (1977) (holding that ownership of  shares in a corporation located in a particular  forum is not purposeful availment of that forum);  Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S.  333, 336-37 (1925) (holding, though not on  constitutional grounds, that jurisdiction over a  subsidiary does not provide for jurisdiction over  the parent where the two are separate entities).

32
A couple of reasons support this holding.  First, where corporate formalities are  substantially observed and the parent does not  dominate the subsidiary, a parent and a  subsidiary are two separate entities and the acts  of one cannot be attributed to the other. The  Supreme Court, in a discussion of whether  jurisdiction over the subsidiary can be leveraged  into jurisdiction over the parent, has stated  that "[e]ach defendant's contacts with the forum  State must be assessed individually." Keeton, 465  U.S. at 781 n.13. The unilateral activity of an  entity cannot subject a nonresident defendant to  personal jurisdiction in the entity's forum. See  Burger King, 471 U.S. at 474-75 (quoting Hanson  v. Denckla, 357 U.S. 235, 253 (1958)). Where two  corporations are in fact separate, permitting the  activities of the subsidiary to be used as a  basis for personal jurisdiction over the parent  violates this principle and thus due process.  Second, the primary purpose of the corporate form  is to prevent a company's owners, whether they  are persons or other corporations, from being  liable for the activities of the company. Where  corporate formalities have been observed, a  company's owners reasonably expect that they  cannot be held liable for the faults of the  company. Thus, such owners do not reasonably  anticipate being hailed into a foreign forum to  defend against liability for the errors of the  corporation.

33
The Fund's argument that this analysis changes  where a federal statute premises liability on  corporate affiliation ignores the process by  which courts determine whether specific personal  jurisdiction exists and confuses liability and  jurisdiction. To decide whether specific personal  jurisdiction may be exercised, a court must  engage in three distinct steps in the following  order: (1) identify the contacts the defendant  has with the forum; (2) analyze whether these  contacts meet constitutional minimums and whether  exercising jurisdiction on the basis of these  minimum contacts sufficiently comports with  fairness and justice; (3) determine whether the  sufficient minimum contacts, if any, arise out of  or are related to the causes of action involved  in the suit. If the court determines at the  second step that a defendant does not have  sufficient minimum contacts with the forum, then  its personal jurisdiction analysis ends without  examining the plaintiff's causes of action. The  laws on which the suit are based would be  irrelevant because a state or federal statute  cannot transmogrify insufficient minimum contacts  into a basis for personal jurisdiction by making  these contacts elements of a cause of action,  since this would violate due process. See AT & T  Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586,  590-91 (9th Cir. 1996). Similarly, jurisdiction  and liability are two separate inquiries. See  id.; Carty v. Beech Aircraft Corp., 679 F.2d  1051, 1061 (1st Cir. 1982); Witt v. Scully, 539  F.2d 950, 951-52 (3d Cir. 1976). The fact that a  defendant would be liable under a statute if  personal jurisdiction over it could be obtained  is irrelevant to the question of whether such  jurisdiction can be exercised. MPPAA's definition  of corporate affiliation as an element of  withdrawal liability cannot confer personal  jurisdiction on the basis of such affiliation any  more than a California cause of action's  inclusion of a defective product as an element of  liability can confer jurisdiction over a Japanese  manufacturer whose defective product causes  injury in California but who does not have  sufficient minimum contacts with that state. See  Asahi Metal Indus. v. Superior Court of  California, Solano County, 480 U.S. 102, 105-06,  112-13 (1987) (opinion of O'Connor, J.). In many  circumstances, the conduct of a foreign defendant  may satisfy the elements of liability contained  in a statute, but this defendant will escape  judgment because personal jurisdiction is  lacking. Thus, MPPAA's control group provision  regarding withdrawal liability does not alter the  rule that corporate affiliation or ownership is  not a sufficient minimum contact for the exercise  of personal jurisdiction.8

34
Applying our above holding to this case,  corporate affiliation cannot serve as a basis for  personal jurisdiction over REE or REWCOR. ICTL  conducted business as a corporate entity distinct  from REE and REWCOR. ICTL maintained separate  books, records, financial statements, and tax  returns, as well as observing all corporate  formalities. Neither REE nor REWCOR exercised  day-to-day management control over ICTL. The Fund  does not claim that REE or REWCOR were mere alter  egos of ICTL, or that the two defendants  exercised an abnormal degree of control over  ICTL. The Fund does claim that a fax cover page's  indication that it was sent by "REE/ICTL"  suggests an erosion of corporate distinctions.  However, a more obvious interpretation is that  REE was sending the fax on behalf of ICTL, whose  jurisdictional significance is discussed below.  In any case, a mere fax legend is insufficient to  show either that corporate formalities were not  substantially observed or that REE controlled  ICTL to an unusually high degree. Thus, the facts  of this case do not demonstrate that REE or  REWCOR can be subjected to personal jurisdiction  on the basis of their affiliation with ICTL.

35
At this point in our analysis, we affirm the  dismissal of defendant REWCOR. The only contact  REWCOR has with either Illinois or the United  States was affiliation with ICTL. REWCOR was not  a parent of ICTL and apparently did not exercise  any control whatsoever over ICTL, much less the  domination necessary for us to find personal  jurisdiction over a parent based on the actions  of the subsidiary. Thus, regardless of whether  the Illinois long-arm statute or Fed.R.Civ.P  4(k)(2) provides the statutory basis for  jurisdiction, REWCOR lacks sufficient minimum  contacts with either forum.

36
b)  Other contacts.

37
The Fund claims that REE has other contacts  with Illinois and the United States that are  sufficient for the exercise of jurisdiction.  These contacts include the correspondence the  Fund received with REE's letterhead on the fax  cover pages and the fringe benefit agreement that  was signed by an REE employee.

38
We adopt the rule that a corporate parent may  provide administrative services for its  subsidiary in the ordinary course of business  without calling into question the separateness of  the two entities for purposes of personal  jurisdiction. See, e.g., Dunn v. A/S Em. Z.  Svitzer, 885 F. Supp. 980, 988-89 (S.D. Tex.  1995); Calvert v. Huckins, 875 F. Supp. 674, 678-  79 (E.D. Cal. 1995). The basis for this  proposition is much the same as for the more  general principle that jurisdiction over a parent  cannot be based merely on jurisdiction over a  subsidiary. Parent corporations regularly provide  certain services to their subsidiaries. Such  parents do not expect that performing these  activities may subject them to liability because  of the actions of the subsidiaries. Thus, such  standard services are not sufficient minimum  contacts to support the exercise of jurisdiction.

39
The fringe benefit agreement extended ICTL's  obligation to contribute to the Fund. This  contract did not impose any obligation on or  otherwise involve REE. Cockburn, an employee of  REE, did sign the agreement. However, the  uncontroverted affidavit of Cockburn explains  that he serves as a consultant to REE's  subsidiaries, and that the subsidiaries pay REE  for his services.9 He states that he signed the  fringe benefit agreement on behalf of ICTL at the  direction of Hugh Richardson, who was the  president of ICTL. When the parent receives  compensation for the subsidiary's use of the  services of an employee of the parent, the  employee acts on behalf of the subsidiary and not  the parent, and the employee acts at the  direction of the subsidiary's officers, the  parent, at most, provides standard administrative  services to the subsidiary. Thus, the fringe  benefit agreement is not a sufficient minimum  contact.

40
The other contacts alleged by the Fund fail for  similar reasons. Messel was an employee of REE,  but provided payroll services for ITCL at the  direction of ITCL, who paid REE for her services.  Her use of REE letterhead when she sent faxes to  the Fund does not change the fact that she  provided standard administrative services.  Similarly, ICTL asking the Fund to change its  billing address to Winnipeg, Manitoba shows, at  most, that REE was providing payroll services.  None of these activities constitute a sufficient  minimum contact. Thus, we conclude that Illinois  could not constitutionally exercise jurisdiction  on the basis of these administrative services  that REE provided to ICTL.

41
As discussed above, if Illinois could not exert  personal jurisdiction, the Fund could take  advantage of Fed.R. Civ.P. 4(k)(2), under which  we analyze all of REE's contacts with the United  States.10 However, the Fund has not brought  to our attention any contacts that REE itself had  with the United States other than those with  Illinois. Whatever business ICTL may have done  throughout the United States is irrelevant since  this cannot be a basis for jurisdiction over  ICTL's parent REE, a separate corporate entity.  Therefore, Fed.R.Civ.P. 4(k)(2) does not aid the  Fund. None of the contacts alleged by the Fund  would permit either Illinois or the United States  to exercise specific personal jurisdiction over  REE consistent with due process.

B.  Discovery

42
The Fund claims that the district court should  have permitted discovery concerning whether  personal jurisdiction over REE and REWCOR would  be proper. At a minimum, the plaintiff must  establish a colorable or prima facie showing of  personal jurisdiction before discovery should be  permitted. See Ellis v. Fortune Seas, Ltd., 175  F.R.D. 308, 312 (S.D. Ind. 1997). Foreign  nationals usually should not be subjected to  extensive discovery in order to determine whether  personal jurisdiction over them exists. See  Jazini v. Nissan Motor Co., 148 F.3d 181, 185-86  (2d Cir. 1998). We review the district court's  denial of discovery on this issue for abuse of  discretion. See Caribbean Broad. Sys., Ltd. v.  Cable & Wireless P.L.C., 148 F.3d 1080, 1089  (D.C. Cir. 1998); Noonan v. Winston Co., 135 F.3d  85, 94 (1st Cir. 1998).

43
We conclude that the district court did not  abuse its discretion in denying the Fund's  request for discovery into whether REE and REWCOR  are subject to the personal jurisdiction of the  court. Almost all of the Fund's evidence showed  only that REE and REWCOR were affiliated with  ICTL, without any showing that the defendants  exercised an unusually high degree of control  over ICTL or that corporate formalities were not  substantially observed, or that REE provided  standard administrative services to ICTL. None of  this is sufficient to show a colorable basis for  jurisdiction. Further, even if the fax cover  legend naming "REE/ICTL" as the sender suggested  a lack of corporate formalities sufficient to  support a colorable showing of personal  jurisdiction, granting the Fund's broad  interrogatories and document requests would have  been inappropriate for two reasons, both noted by  the district court. First, most of these requests  were irrelevant to the issue of specific personal  jurisdiction. For example, such demands as that  REE and REWCOR produce all documents sent to any  United States federal or state agency from 1986  to 1993, produce all documents sent to any United  States based entity, and identify all of their  shareholders in the United States, even if they  might aid in establishing that the defendants had  minimum contacts with the United States, would  not establish any contacts arising out of or  relating to the defendants' responsibility under  MPPAA for ICTL's withdrawal liability. Second,  imposing such burdensome, wide-ranging discovery  against defendants from a foreign nation is not  appropriate at a stage where the district court  is trying to determine whether it has any power  over the defendants. While perhaps the district  court might have decided to permit more narrowly  targeted discovery against REE and REWCOR, we do  not find that its refusal to do so constitutes an  abuse of discretion.

III.  Conclusion

44
Corporate affiliation with and the provision of  standard administrative services to ICTL are not  sufficient minimum contacts to exercise specific  personal jurisdiction over REE and REWCOR. The  trial judge did not abuse his discretion in  denying the Fund's discovery requests because of  the burden these would have imposed on the  foreign defendants and, in many cases, their  irrelevance to the specific personal jurisdiction  issue. Therefore, the judgment of the district  court is Affirmed.

Notes:

1
 A fuller account of withdrawal liability under  ERISA and the MPPAA can be found in Central  States, Southeast and Southwest Areas Pension  Fund v. Midwest Motor Express, Inc., 181 F.3d  799, 803-04 (7th Cir. 1999).

2
 Though subject-matter jurisdiction generally  should be considered before personal  jurisdiction, a district court may dismiss for  lack of personal jurisdiction without determining  whether subject-matter jurisdiction exists. See  Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574,  578, 587-88 (1999). Since we have the benefit of  the lower court's reasoning regarding personal  jurisdiction but not subject-matter jurisdiction,  we follow its lead and discuss personal  jurisdiction first.

3
 The Fund concedes that its evidence is  insufficient to show the systematic and  continuous contacts necessary to subject the  defendants to general personal jurisdiction. See  generally Helicopteros Nacionales de Colombia,  S.A. v. Hall, 466 U.S. 408, 414-15 & n.9 (1984).

4
 These two provisions are 29 U.S.C. sec.  1132(e)(2) ("[P]rocess may be served in any other  district where a defendant resides or may be  found."), which is the general provision, and 29  U.S.C. sec. 1451(d) ("[P]rocess may be served in  any district where a defendant resides, does  business, or may be found."), which applies only  to actions involving multiemployer plans such as  the Fund.

5
 "All other process . . . may be served on any  person in any judicial district in which such  person resides, is found, has an agent, or  transacts his affairs."

6
 As explained hereafter, the substance of this old  Rule 4(f) has been recodified in current Rule  4(k)(1)(D).

7
 Note that this interpretation of Rule 4(k)(2)  does not render Rule 4(k)(1)(D) superfluous. Rule  4(k)(1)(D) has an independent effect whenever a  federal statute authorizes service of process but  a state could exercise jurisdiction. For example,  under ERISA, if process is properly served on  defendants within the United States, those  defendants can be required to litigate in the  district where the plan is administered, even if  they have no contacts with that state. See Board  of Trustees, Sheet Metal Workers' Nat'l Pension  Fund v. Elite Erectors, Inc., 212 F.3d 1031, 1037  (7th Cir. 2000). In such cases, Rule 4(k)(1)(D)  provides the statutory basis for jurisdiction  because the defendants would be subject to the  jurisdiction of the state in which they are  found, and so Rule 4(k)(2) would not apply.

8
 Our decision on this issue is consistent with the  Ninth Circuit's analogous determination in AT&T,  94 F.3d 586. In that case, the plaintiffs argued  that a parent corporation was an "operator" of a  subsidiary that had incurred CERCLA liability  because of its stock ownership and control of the  subsidiary. Id. at 588. (AT&T predated the  decision in United States v. Bestfoods, 524 U.S.  51, 61-62 (1998) which held that CERCLA liability  cannot be imposed on a parent because of its  ownership of a polluting subsidiary unless the  corporate veil can be pierced.) Because the  parent corporation would be liable due to the  affiliation, the court could exercise personal  jurisdiction over the parent. The Ninth Circuit  rejected this argument and held that even if the  defendants would be liable under CERCLA, the  defendant's ownership of the subsidiary alone was  not sufficient for personal jurisdiction and  Congress could not alter this. 94 F.3d at 590-91.

9
 The Fund forfeited any objection to the  introduction of Cockburn's affidavit, which was  submitted with the defendants' reply memorandum  to the motion for dismissal, by failing to raise  it during the five-and-a-half month period after  the motion was fully briefed and before the  district court ruled. See Dugan v. Smerwick  Sewerage Co., 142 F.3d 398, 406 (7th Cir. 1998).

10
 Where a federal statutory basis for jurisdiction  exists, then we analyze whether the defendant has  sufficient minimum contacts with the United  States as a whole to determine whether personal  jurisdiction is constitutional under the Due  Process Clause of the Fifth Amendment. See Elite  Erectors, 212 F.3d at 1035-36.