“Generally, courts grant jurisdictional discovery if the plaintiff can show that the factual record is at least ambiguous or unclear on the jurisdiction issue.”
How later courts described this case
- “Generally, courts grant jurisdictional discovery if the plaintiff can show that the factual record is at least ambiguous or unclear on the jurisdiction issue.”
Written by the judges who cited it.
The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
PEORIA DIVISION
MARQUIS PROCAP SYSTEMS, )
)
Plaintiff, )
)
v. ) Case No. 20-1020
)
NOVOZYMES NORTH AMERICA, )
INC. and GREEN PLAINS, INC., )
)
Respondent. )
ORDER AND OPINION
Pending before the Court is Defendant Green Plains, Inc.’s1 Motion to Dismiss Plaintiff’s
Complaint for Lack of Personal Jurisdiction. ECF No. 56. For the reasons stated below, this
motion is GRANTED.
BACKGROUND
Plaintiff is a dry-mill ethanol facility with its headquarters in Hennepin, Illinois.2 In
addition to fuel-grade ethanol, Plaintiff’s facility produces and sells other co-products of ethanol
production. In short, Plaintiff asserts that it spent tens of millions of dollars developing an
innovative system for processing the co-products of the corn-to-ethanol production and that
under the guise of entering a partnership, Defendant Novozymes stole and shared that
information with Defendant Green Plains.
Plaintiff pleads that it explored a potential partnership with Novozymes and to that end,
Plaintiff shared trade secrets over the period of several months. Novozymes then surprised
Plaintiff by announcing it was entering a partnership with Plaintiff’s competitor, Defendant
1 Defendant Novozymes North America, Inc. has not moved to dismiss this matter.
2 The facts in the background section are derived from Plaintiff’s Complaint. ECF No. 1
Green Plains. Plaintiff alleges that because the same scientists worked on both partnership and
because the partnership with Green Plains would require the use of the trade secrets that Plaintiff
shared with Novozymes, that Novozymes must have stolen its information. Plaintiff has sued
Green Plains for enticing Novozymes into a breach of the confidentiality agreement.
On January 14, 2020, Plaintiff filed its Complaint seeking emergency injunctive relief
against all Defendants. ECF No. 1. In its Complaint, Plaintiff alleges a violation of the Defend
Trade Secrets Act against both Defendants (Count I); a violation of the Illinois Trade Secrets Act
against both Defendants (Count II); and breach of contract against Novozymes (Count III).
Plaintiff also filed an Emergency Motion for Temporary Restraining Order and a Motion to
Expedite Discovery, and the Court held a hearing on Plaintiff’s emergency requests. During the
hearing, the Parties represented that they reached an agreement on the pending emergency
motions, and the Court adopted a proposed order submitted by the Parties which addressed issues
raised in the emergency motions. ECF No. 19. Defendant Green Plains filed a Motion to Dismiss
Plaintiff’s Complaint for lack of personal jurisdiction, explaining that it is an Iowa corporation
with a principal place of business in Nebraska with no role in the activity between Novozymes
and Plaintiff that occurred in Illinois. Plaintiff, however, asserted in that motion that Green
Plains has several subsidiaries that regularly transact business in Illinois and serve as little more
than shell companies for Defendant Green Plains. Accordingly, Plaintiff asserted that this Court
had general jurisdiction over Defendant Green Plains through its subsidiaries. The Court granted
Plaintiff limited jurisdictional discovery and denied the Defendant’s Motion with leave to refile.
Defendant filed another motion to dismiss for lack of personal jurisdiction at the close of
discovery, and this opinion follows.
LEGAL STANDARD
Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of
personal jurisdiction. Under Rule 12(b)(2), if this Court lacks personal jurisdiction over
Defendant, it must dismiss the Complaint against it. See Purdue Research Found. v. Sanofi-
Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). “Personal jurisdiction determines, in part,
where a plaintiff may hale a defendant into court.” Jennings v. AC Hydraulic A/S, 383 F.3d 546,
548 (7th Cir. 2004). Once personal jurisdiction is challenged, the plaintiff has the burden of
demonstrating the existence of jurisdiction. Cent. States, Se. & Sw. Areas Pension Fund v.
Reimer Express World Corp., 230 F.3d 934, 939 (7th Cir. 2000). When a district court rules on a
defendant’s motion to dismiss without an evidentiary hearing, the plaintiff only needs to prove a
prima facie case of general jurisdiction. Id. (quoting Purdue, 338 F.3d at 713).
ANALYSIS
Parties may either be subject to either general or personal jurisdiction. See Tamburo v.
Dworkin, 601 F.3d 693, 701 (7th Cir. 2010). Parties may be subject to general jurisdiction when
they have continuous and systematic contacts with that state and may be haled into court on
matters unrelated to their contact with the state. Id. Parties may only be subject to specific
jurisdiction when the conflict arises from the parties’ contact with the forum state. Id. In this
case, the only dispute is over whether this Court has general jurisdiction over Defendant Green
Plains.3
For corporations, “general jurisdiction exists only when the organization is ‘essentially at
home’ in the forum State.” Kipp v. Ski Enter. Corp. of Wisconsin, 783 F.3d 695, 698 (7th Cir.
3 The Plaintiff vaguely claims in its response that it “reserves the right to assert specific jurisdiction” over Green
Plains. ECF 68 at 23. Plaintiff claims it will address this in a separate motion, but the Court will only decide the
motion and arguments presently before it.
2015) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).
The Supreme Court “has identified only two places where [the essentially at home] condition
will be met: the state of the corporation’s principal place of business and the state of its
incorporation.” Id. (citing Daimler AG v. Bauman, 571 U.S. 117, 137 (2104)). “Any additional
candidates would . . . require more than the ‘substantial, continuous, and systematic course of
business’ that was once thought to suffice.” Id. (quoting Daimler, 571 U.S. at 137). The Seventh
Circuit has described cases where a court has general jurisdiction over a corporation that is not
incorporated and does not have its principal place of business in a state as “rare.” Id.
The parties agree that Green Plains is an Iowa corporation with its principal place of
business in Nebraska. Plaintiff points to the contacts of Green Plains’ subsidiaries to establish
general jurisdiction. In exceptional cases, courts may find that the contacts of the subsidiaries
may be imputed to the parent company when the “the subsidiary’s only purpose is to conduct the
business of the parent.” Cent. States, Se., 230 F.3d at 939. Plaintiff dedicates a great deal of its
response to explaining why the contacts of the subsidiaries should be imputed to Green Plains
but fails to demonstrate that the subsidiaries are subject to general jurisdiction in Illinois. Instead,
Green Plains presents unrebutted evidence that none of the subsidiaries that conduct some
business in Illinois are incorporated in Illinois or have principal places of business in Illinois.
Green Plains further demonstrates that the subsidiaries conduct a relatively small portion of their
business in the Illinois.
Plaintiff offers little by way of evidence or argument to rebut Green Plains’ assertion that
none of the subsidiaries are subject to general jurisdiction in Illinois. Instead, Plaintiff attempts to
argue that this Court has already conclusively determined that Green Plains’ subsidiaries are
subject to general personal jurisdiction. Plaintiff points to a sentence where the court observed
that if “Illinois subsidiaries” are conducting Green Plains’ business rather than their own,
“Defendant can rightfully be sued.” ECF No. 50 at 7. This statement was not intended to signal
that the Court had conclusively decided the issue of whether the subsidiaries were subject to
general jurisdiction in Illinois. Indeed, the Defendant has presented evidence that these
subsidiaries are not at home in Illinois and thus, are not “Illinois subsidiaries” for the purpose of
general jurisdiction. All that the Court decided in its initial order was that Plaintiff met the
relatively low bar to demonstrate that it was entitled to limited jurisdictional discovery. See Cent.
States Se., 230 F.3d at 946 (“[a]t a minimum, the plaintiff must establish a colorable or prima
facie showing of personal jurisdiction before discovery should be permitted”); Ticketreserve, Inc.
v. viagogo, Inc., 656 F. Supp. 2d 775, 782 (N.D. Ill. 2009) (“Generally, courts grant
jurisdictional discovery if the plaintiff can show that the factual record is at least ambiguous or
unclear on the jurisdiction issue.”) To the extent that the order could be read to decide any of
Green Plains’ subsidiaries are subject to general personal jurisdiction in Illinois, that motion is
VACATED.
Plaintiff then argues that the Court should ignore the facts that Defendant proffered to
show that the relevant subsidiaries do a relatively modest portion of their business in Illinois.
Plaintiff argues that Defendant directed a deponent to not answer a question related to this topic,
so Green Plains should now be barred from bringing this information. This is problematic for
several reasons. Notably, the deponent answered the question, but did so by saying that she
would only be able to speculate, and Green Plains points out that the question was beyond the
scope of the 30(b)(6) deposition. Additionally, a response to a motion to dismiss is not the
appropriate manner to resolve discovery disputes, and Plaintiff does not adequately explain why
it could not have requested that information in some other fashion, nor does Plaintiff explain how
it was prejudiced by the delayed reveal of this information. Finally, the burden rests upon
Plaintiff to prove its motion and must demonstrate that this is the “rare” case for a court to find
general jurisdiction when the subsidiaries are neither incorporated nor have their principal place
of business in Illinois. The exclusion of Defendant’s evidence regarding the percentage of
business the subsidiaries does not assist Plaintiff in meeting that burden.
The Supreme Court has made clear that the general jurisdiction requirement that a
corporation be “at home” in a state is not synonymous with “doing business” in the state.
Daimler, 571 U.S. at 139 n. 20. Plaintiff has done little other than show that some subsidiaries do
some business in the state, which courts have repeatedly affirmed is not enough. The Court
further observes that Defendant points to several important corporate formalities that are
respected between Green Plains and its subsidiaries, which undercut Plaintiff’s argument that the
subsidiaries are merely shell companies for Green Plains. However, the Court need not decide
that issue when Plaintiff has failed to demonstrate that those subsidiaries would be subject to
general personal jurisdiction in Illinois.
CONCLUSION
Accordingly, it is ORDERED as follows:
(1) Defendant Green Plains’ Motion to Dismiss [56] is GRANTED and Green Plains is
DISMISSED from this case.
(2) Defendant Green Plains’ Motion to Stay Discovery [71] is DENIED as moot.
(3) To the extent the Court’s previous order [50] could be read to conclusively determine that
Green Plains’ subsidiaries are subject to general jurisdiction in Illinois it is VACATED.
ENTERED this 25th day of August, 2020.
/s/ Michael M. Mihm
Michael M. Mihm
United States District Judge