State Of Ill. v. Hemi Group Llc.

Decision Date14 September 2010
Docket NumberNo. 09-1407.,09-1407.
Citation622 F.3d 754
PartiesState of ILLINOIS, Plaintiff-Appellee, v. HEMI GROUP LLC, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

622 F.3d 754

State of ILLINOIS, Plaintiff-Appellee,
v.
HEMI GROUP LLC, Defendant-Appellant.

No. 09-1407.

United States Court of Appeals,Seventh Circuit.

Argued Sept. 24, 2009.
Decided Sept. 14, 2010.


622 F.3d 755

Deborah L. Ahlstrand, Attorney, Brett E. Legner, Attorney, Office of the Attorney General, Chicago, IL, for Plaintiff-Appellee.

Brett E. Legner, Attorney (argued), Office of the Attorney General Civil Appeals Division, Chicago, IL, Randolph H. Barnhouse, Attorney (argued), Luebben Johnson & Barnhouse LLP, Los Ranchos de Albuquerque, NM, for Defendant-Appellant.

Before BAUER, KANNE, and EVANS, Circuit Judges.

KANNE, Circuit Judge.

The state of Illinois sued Hemi Group LLC for selling cigarettes to Illinois residents in violation of state laws and for failing to report those sales in violation of federal law. The district court denied Hemi's motion to dismiss for lack of personal jurisdiction, finding that the Internet transactions sufficed to establish personal jurisdiction over Hemi in Illinois. We affirm.

I. Background

Hemi, based out of New Mexico, sells discount cigarettes through its many websites. Customers may place orders online or through mail, telephone, or fax. Customers online may determine their shipping costs by inputting their zip codes on the website. Illinois alleges that Hemi sold cigarettes to Illinois residents through its websites. The only specific sales to an Illinois resident that Illinois identified in its complaint were instigated by a special senior agent of the Illinois Department of Revenue, who purchased more than three hundred packs of cigarettes from Hemi-operated websites in 2005 and 2007.

On several of its websites, Hemi states that it will not sell cigarettes to New York residents; 1 on one of those sites, it explains

622 F.3d 756

that ongoing litigation in New York led to the decision not to sell cigarettes there. On another of those sites, Hemi notes that it sells to every state except New York. Hemi does not specifically single out Illinois residents on any of its websites.

Hemi pays the federal tax on the cigarettes that it sells via its websites, but Illinois law leaves it to the buyers to pay the applicable state tax on cigarettes purchased over the Internet or by mail, phone, or fax. Hemi's websites direct customers to check with their states to determine their responsibility for paying state taxes.

The parties agree that Hemi is not a resident of Illinois. It is not incorporated or organized under Illinois law, it is not registered to do business in Illinois, it does not have any offices or employees in Illinois, it does not bank in Illinois, and it has not advertised in print media in Illinois.

Illinois sued Hemi in Illinois state court for failing to submit to Illinois monthly reports of sales to Illinois residents as required by the Jenkins Act, for violating the Prevention Act by shipping cigarettes to Illinois residents that were not licensed distributors or export warehouse operators, and for violating the Enforcement Act and the Consumer Fraud Act by selling brands of cigarettes to Illinois residents that were not in the Illinois Directory.

Hemi removed the case to federal court and moved to dismiss for lack of personal jurisdiction. The district court denied Hemi's motion, finding that Hemi purposefully availed itself of the opportunity to do business with Illinois residents and that due process was not offended by exercising personal jurisdiction over Hemi. The district court, however, stayed the proceedings below to allow Hemi to pursue this interlocutory appeal of the district court's order.

II. Analysis

The sole question on appeal is whether the district court in Illinois may properly exercise personal jurisdiction over Hemi. We review questions of personal jurisdiction de novo. Kinslow v. Pullara, 538 F.3d 687, 690 (7th Cir.2008).

A. Scope of Illinois Constitution

Because the Jenkins Act does not provide for service of process, the district court may exercise personal jurisdiction over Hemi only to the extent that a court of general jurisdiction in Illinois could. Fed.R.Civ.P. 4(k)(1)(A). Illinois's long-arm statute provides for jurisdiction “on any ... basis now or hereafter permitted by the Illinois Constitution or the Constitution of the United States.” 735 ILCS 5/2-209(c). The district court may exercise jurisdiction only if both the state and federal constitutional requirements are satisfied. See Sabados v. Planned Parenthood of Greater Indiana, 378 Ill.App.3d 243, 317 Ill.Dec. 547, 882 N.E.2d 121, 125 (2007).

The Illinois Constitution allows a state court to exercise personal jurisdiction “only where it is fair, just, and reasonable ... considering the quality and nature of the defendant's acts which occur in Illinois or which affect interests located in Illinois.” Citadel Group Ltd. v. Washington Reg'l Med. Ctr., 536 F.3d 757, 761 (7th Cir.2008) (internal quotation marks omitted). Although the Illinois Supreme Court has stated that “the scope of Illinois's long-arm statute may not be co-extensive with the jurisdictional aspect of the Federal due process clause in any particular situation,”

622 F.3d 757

Rollins v. Ellwood, 141 Ill.2d 244, 152 Ill.Dec. 384, 565 N.E.2d 1302, 1315 (1990), subsequent courts have noted that no case has yet arisen where federal due process would allow the exercise of personal jurisdiction over a defendant but the Illinois Constitution would not. See Kinslow, 538 F.3d at 691; Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715-16 (7th Cir.2002); Sabados, 317 Ill.Dec. 547, 882 N.E.2d at 125 n. 2. Hemi argues, however, that a series of recent Illinois appellate court decisions demonstrates that Illinois does in fact require more than federal law. See Estate of Isringhausen v. Prime Contractors and Associates, Inc., 378 Ill.App.3d 1059, 318 Ill.Dec. 363, 883 N.E.2d 594 (2008); Hanson v. Ahmed, 382 Ill.App.3d 941, 321 Ill.Dec. 475, 889 N.E.2d 740 (2008); Sabados, 378 Ill.App.3d 243, 317 Ill.Dec. 547, 882 N.E.2d 121; Bolger v. Nautica Int'l, Inc., 369 Ill.App.3d 947, 308 Ill.Dec. 335, 861 N.E.2d 666 (2007).

We are not convinced. None of the cases cited by Hemi even suggests, much less holds, that there is a meaningful difference between the federal and Illinois due process standards. In fact, the court in Sabados-a case cited by Hemi in support of its position-noted that the distinction was theoretical, and that it was unaware of any case actually holding that “personal jurisdiction could be satisfied under the federal constitution, but not the Illinois Constitution.” 317 Ill.Dec. 547, 882 N.E.2d at 125 n. 2 ( citing Kostal v. Pinkus Dermatopathology Lab., 357 Ill.App.3d 381, 293 Ill.Dec. 150, 827 N.E.2d 1031, 1037 (2005)). We are not interested in usurping Illinois's conceptualization of due process. However, we are still unable to discern an “operative difference between the limits imposed by the Illinois Constitution and the federal limitations on personal jurisdiction.” Hyatt Int'l Corp., 302 F.3d at 715. Therefore, we will limit our analysis to whether exercising jurisdiction over Hemi comports with the federal guarantee of due process. See Citadel Group, 536 F.3d at 761.

B. Federal Constitutional Limits on Personal Jurisdiction

We recently described the “current state of the constitutional dimension of personal jurisdiction”:

[T]he 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. Those contacts may not be fortuitous. Instead, the defendant must have purposefully established minimum contacts within the forum State before personal jurisdiction will be found to be reasonable and fair. Crucial to the minimum...

To continue reading

Request your trial
221 cases
  • Curry v. Revolution Labs., LLC, No. 17-2900
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 10 Febrero 2020
    ...to apply to cases involving Internet contacts that courts need some sort of easier-to-apply categorical test." Illinois v. Hemi Grp. LLC , 622 F.3d 754, 759 (7th Cir. 2010).1. We first examine whether Revolution’s activity can be characterized as purposefully directed at Illinois, the forum......
  • N. Sails Grp., LLC v. Bds. & More GMBH
    • United States
    • Connecticut Supreme Court
    • 20 Agosto 2021
    ..., supra, 141 S. Ct. at 1025 ; World-Wide Volkswagen Corp . v. Woodson , supra, 444 U.S. at 297, 100 S.Ct. 559 ; Illinois v. Hemi Group, LLC , 622 F.3d 754, 758 (7th Cir. 2010). Due process would not be offended by calling B&M to account in Connecticut for its alleged misconduct under its co......
  • Plixer Int'l, Inc. v. Scrutinizer GMBH
    • United States
    • U.S. Court of Appeals — First Circuit
    • 13 Septiembre 2018
    ...is not intended for U.S. users. See Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997) ; cf. Illinois v. Hemi Group LLC, 622 F.3d 754, 755 (7th Cir. 2010). Again, it has not done so.10 Instead, Scrutinizer's website (https://scrutinizer-ci.com/) is globally accessible. In fac......
  • Ubid Inc. v. The Godaddy Group Inc.
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 29 Septiembre 2010
    ...S.A., 338 F.3d 773, 782 (7th Cir.2003). Our review of the district court's legal analysis is de novo. State of Illinois v. Hemi Group LLC, 622 F.3d 754, 756-57 (7th Cir.2010). GoDaddy, which has offered registration services since 2000, has tried to restrict its physical presence to Arizona......
  • Request a trial to view additional results
2 books & journal articles
  • Personal Jurisdiction and Choice of Law
    • United States
    • Iowa Law Review No. 98-3, March 2013
    • 1 Marzo 2013
    ...consumers against a group of Nevada hotels that maintained a website soliciting reservations). 83. Cf. Illinois v. Hemi Grp. LLC, 622 F.3d 754, 75556 (7th Cir. 2010). Hemi Group operated a website offering to sell discount cigarettes to residents of any state other than New York. Id. On th......
  • Personal Jurisdiction, Process, and Venue in Antitrust and Business Tort Litigation
    • United States
    • ABA Antitrust Library Business Torts and Unfair Competition Handbook Business tort litigation
    • 1 Enero 2014
    ...at forum state, personal jurisdiction could not be exercised) (quoting Cybersell, Inc., 130 F.3d at 419); see Illinois v. Hemi Group, 622 F.3d 754, 758 (7th Cir. 2010) (“It is Hemi reaching out to residents of Illinois, and not the residents reaching back, that creates 332 Business Torts an......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT