Hutter Northern Trust v. Door County Chamber of Commerce

• Citation: 403 F.2d 481
• Decision Date: 05 November 1968
• Docket Number: No. 16819.,16819.
• Parties: HUTTER NORTHERN TRUST, by John A. Hutter, Trustee, John A. Hutter, operating Chateau Hutter and John A. Hutter, individually, Plaintiffs-Appellants, v. DOOR COUNTY CHAMBER OF COMMERCE et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

403 F.2d 481 (1968)

HUTTER NORTHERN TRUST, by John A. Hutter, Trustee, John A. Hutter, operating Chateau Hutter and John A. Hutter, individually, Plaintiffs-Appellants, v. DOOR COUNTY CHAMBER OF COMMERCE et al., Defendants-Appellees.

No. 16819.

United States Court of Appeals Seventh Circuit.

November 5, 1968.

COPYRIGHT MATERIAL OMITTED

John A. Hutter, Chicago, Ill., for plaintiffs-appellants.

Laurens G. Hastings, Henry L. Mason, III, David P. List, Chicago, Ill., for defendants-appellees; Leibman, Williams, Bennett, Baird & Minow, Chicago, Ill., of counsel.

Before HASTINGS, SWYGERT and CUMMINGS, Circuit Judges.

SWYGERT, Circuit Judge.

This diversity action charged that defendants Door County Chamber of Commerce and certain named resort owners residing in Door County, Wisconsin conspired to maliciously interfere with and do injury to plaintiff's (John A. Hutter's) Door County resort business known as "Chateau Hutter," illegally expelled the plaintiff Hutter from Chamber of Commerce membership, wrongfully interfered with his resort space contract rights, and libelled the plaintiff by letters written to Illinois residents. The district court dismissed the suit for lack of personal jurisdiction over the defendants, and the plaintff has appealed. We reverse and remand as to the Chamber of Commerce and affirm as to the individual defendants.

Chateau Hutter has been owned and operated by the plaintiff for over twenty years. The plaintiff apparently became a member of the Door County Chamber of Commerce immediately upon commencing operation of Chateau Hutter and remained a member of the organization until April, 1965 when he was informed by the Chicago Tribune that since he was no longer a Chamber of Commerce member, he could not participate in the "block" advertisements which the Chamber runs each year in the newspaper. According to the complaint, such advertisements were the prime source of reservation inquiries and consequent resort space reservation contracts. The complaint alleged that the Chamber was in effect a vehicle for the cooperation among resort owners which was essential for the undertaking of these joint advertising endeavors.

After the Tribune rebuff, the plaintiff alleged that he contacted the Chamber's advertising agency and through it learned of the Chamber's instructions to exclude his resort from all group advertising and to discontinue business relations with the plaintiff. The plaintiff further alleged that he contacted the directors of the Chamber concerning their arbitrary exclusion which he claimed was contrary to Wisconsin corporation law because there had been no compliance with the due notice and hearing provisions of the Chamber's by-laws. He further averred that although he was reinstated as a Chamber member in April, 1966, he was again expelled from membership in January, 1967.

The vital questions are whether plaintiff's claims arise from the transaction of business in Illinois by the Chamber of Commerce and the individual defendants and whether the defendants committed tortious acts in Illinois within the meaning of the Illinois "long-arm" statute. Ill.Rev.Stat. ch. 110, § 17 (1965).¹

On the question of transaction of business in Illinois by the Door County Chamber of Commerce, the complaint alleged that the Chamber spent most of its funds for advertising in newspapers and over radio stations in the Chicago area, that it maintained booths and displays in travel, boat, and sportsman's shows conducted in Chicago, and that it distributed brochures and travel literature at the Wisconsin State Travel office and at the offices of newspapers and other travel agencies, all located in Chicago. In response to the block newspaper advertisements, it is alleged that the Chamber sent to Illinois residents promotional literature concerning Door County resorts. The plaintiff also alleged that he received ninety per cent of his resort contract business from Illinois residents and that the other Chamber members got the "greater part of their reservations" from Chicago area inhabitants. The plaintiff further alleged that the Chamber wrote letters to various Illinois residents asserting that he had been dropped from membership in the Chamber and that as a result of the Chamber's intervention, the plaintiff's literature and listing were excluded from booths in boat, travel and sportsman's shows conducted in Illinois. Since this case comes to us on appeal from the district court's quashing service of process and the dismissal of the complaint, we treat as true the foregoing jurisdictional allegations.

The district court decided that the Chamber of Commerce and the individual defendants did not transact business in Illinois, citing as authority Koplin v. Saul Lerner Co., Inc., 52 Ill.App.2d 97, 201 N. E.2d 763 (1964). In that case, a dealer in puts and calls was held not subject to personal jurisdiction in Illinois where it appeared that his only activity in the state was by way of newspaper advertising. The court there stated and the court below here reiterated that, "A willingness to do business and solicitation of business do not constitute the doing of business." 52 Ill.App.2d at 104, 201 N.E.2d at 767. We believe, however, that unquestioning reliance on the Koplin decision is misplaced. As our discussion hereinafter indicates, we think a more flexible test than that outlined in Koplin v. Saul Lerner Co., Inc., must be applied to the business activities of a chamber of commerce.

A basic consideration which underlies the law relating to jurisdiction over nonresidents is that the evidence of sufficient contacts within a state to avoid violation of due process by substituted service depends upon the particular facts of each case. Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961). The service there was upheld in a tort action where defendant's only contact in Illinois was its sale in the course of commerce in that state of a valve put into a water heater in Pennsylvania which exploded and injured the plaintiff, a resident of Illinois. This is the leading Illinois decision determining the "extent to which due process permits substituted service where defendant had no agent or employee" in Illinois. 22 Ill.2d at 437, 176 N.E.2d at 763.

It is unnecessary to trace the recent extension of personal jurisdiction over nonresident defendants through substituted service. Suffice it to say that due process implications were settled in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L. Ed. 95 (1945), McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L. Ed.2d 1283 (1958). The thrust of these decisions is that sufficient "minimum contacts" must exist in the forum state so that jurisdiction over nonresident defendants is reasonable and just according to traditional concepts of fair play and substantial justice. See also National Gas Appliance Corp. v. AB Electrolux, 270 F.2d 472 (7th Cir. 1959), cert. denied, 361 U.S. 959, 80 S.Ct. 584, 4 L.Ed.2d 542 (1960), and Consolidated Laboratories, Inc. v. Shandon Scientific Co., 384 F.2d 797 (7th Cir. 1967). Whether...