In the
United States Court of Appeals
For the Seventh Circuit
No. 09-1407
STATE OF ILLINOIS,
Plaintiff-Appellee,
v.
HEMI GROUP LLC,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of Illinois.
No. 3:08-cv-03050—Jeanne E. Scott, Judge.
ARGUED SEPTEMBER 24, 2009—DECIDED SEPTEMBER 14, 2010
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 jurisdic-
tion, finding that the Internet transactions sufficed to
establish personal jurisdiction over Hemi in Illinois. We
affirm.
2 No. 09-1407
I. BACKGROUND
Hemi, based out of New Mexico, sells discount ciga-
rettes 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 web-
sites. 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 Reve-
nue, 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 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 web-
sites direct customers to check with their states to deter-
mine their responsibility for paying state taxes.
1
At oral argument, counsel for Illinois indicated that Hemi
has subsequently increased the number of states to which it
will not ship cigarettes, although the additional states
are not part of the record on appeal.
No. 09-1407 3
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 jurisdic-
tion over Hemi. We review questions of personal jurisdic-
4 No. 09-1407
tion 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 juris-
diction 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 juris-
diction “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, 882
N.E.2d 121, 125 (Ill. App. Ct. 2007).
The Illinois Constitution allows a state court to exer-
cise 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. Washing-
ton Reg’l Med. Ctr., 536 F.3d 757, 761 (7th Cir. 2008) (inter-
nal 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 juris-
dictional aspect of the Federal due process clause in
any particular situation,” Rollins v. Ellwood, 565 N.E.2d
1302, 1315 (Ill. 1990), subsequent courts have noted that
no case has yet arisen where federal due process would
allow the exercise of personal jurisdiction over a defen-
No. 09-1407 5
dant 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, 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., 883 N.E.2d 594 (Ill.
App. Ct. 2008); Hanson v. Ahmed, 889 N.E.2d 740 (Ill. App.
Ct. 2008); Sabados, 882 N.E.2d 121; Bolger v. Nautica
Int’l, Inc., 861 N.E.2d 666 (Ill. App. Ct. 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 un-
aware of any case actually holding that “personal jurisdic-
tion could be satisfied under the federal constitution, but
not the Illinois Constitution.” 882 N.E.2d at 125 n.2 (citing
Kostal v. Pinkus Dermatopathology Lab., 827 N.E.2d 1031,
1037 (Ill. App. Ct. 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 juris-
diction over Hemi comports with the federal guarantee
of due process. See Citadel Group, 536 F.3d at 761.
6 No. 09-1407
B. Federal Constitutional Limits on Personal Jurisdiction
We recently described the “current state of the con-
stitutional 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 jurisdic-
tion will be found to be reasonable and fair.
Crucial to the minimum contacts analysis is a
showing that the defendant should reasonably
anticipate being haled into court in the forum
State, because the defendant has purposefully
availed itself of the privilege of conducting activi-
ties there.
Kinslow, 538 F.3d at 691 (internal quotation marks omitted).
The district court held, and Illinois does not appear to
disagree, that Hemi does not have the continuous and
systematic general business contacts with Illinois to
justify exercising general jurisdiction over Hemi. Illinois
v. Hemi Group LLC, No. 08-3050, 2008 WL 4545349, at *2
(C.D. Ill. Oct. 10, 2008); see also RAR, Inc. v. Turner Diesel,
Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997). Therefore, we
consider only whether the district court may exercise
specific jurisdiction over Hemi.
No. 09-1407 7
1. Minimum Contacts
We find that Hemi’s contacts with Illinois were suf-
ficient to satisfy due process. Hemi maintained com-
mercial websites through which customers could pur-
chase cigarettes, calculate their shipping charges using
their zip codes, and create accounts. Hemi stated that
it would ship to any state in the country except New
York. This statement is important for two reasons.
First, Hemi expressly elected to do business with the
residents of forty-nine states. Although listing all forty-
nine states by name would have made a stronger case
for jurisdiction in this case, inasmuch as it would
have expressly stated that Hemi wanted to do business
with Illinois residents, the net result is the same—Hemi
stood ready and willing to do business with Illinois
residents. Cf. Neogen Corp. v. Neo Gen Screening, Inc.,
282 F.3d 883, 891 (6th Cir. 2002). And Hemi, in fact,
knowingly did do business with Illinois residents. In
light of this, Hemi’s argument that it did not pur-
posefully avail itself of doing business in Illinois rings
particularly hollow.
Second, the fact that Hemi excluded New York residents
from its customer pool shows both that Hemi knew that
conducting business with residents of a particular state
could subject it to jurisdiction there and also that
it knew how to protect itself from being haled
into court in any particular state. Due process requires
that “potential defendants should have some control
over—and certainly should not be surprised by—the
jurisdictional consequences of their actions.” RAR, Inc., 107
8 No. 09-1407
F.3d at 1278. That requirement is satisfied here. While
Hemi is correct that its contacts, or lack of contacts, with
any other state has no bearing on whether it is subject
to personal jurisdiction in Illinois, its election not to do
business with New York demonstrates that it should
have foreseen being subject to litigation in Illinois as a
result of its cigarette sales to Illinois customers.
Hemi argues that its sales to customers, specifically
the sales to the special agent of the Illinois Department of
Revenue, cannot constitute the required minimum con-
tacts because the purchases were unilateral actions by
the customers. See Kulko v. Superior Court of Calif., 436
U.S. 84, 93-94 (“ ‘The unilateral activity of those who
claim some relationship with a nonresident defendant
cannot satisfy the requirement of contact with the
forum State.’ ” (quoting Hanson v. Denckla, 357 U.S. 235,
253 (1958))). Characterizing the sales as unilateral is
misleading, however, because it ignores several of Hemi’s
own actions that led up to and followed the sales. Hemi
created several commercial, interactive websites through
which customers could purchase cigarettes from Hemi.
Hemi held itself out as open to do business with every
state (including Illinois) except New York. After the
customers made their purchases online, Hemi shipped
the cigarettes to their various destinations. It is Hemi
reaching out to residents of Illinois, and not the
residents reaching back, that creates the sufficient mini-
mum contacts with Illinois that justify exercising
personal jurisdiction over Hemi in Illinois.
We wish to point out that we have done the entire
minimum contacts analysis without resorting to the
No. 09-1407 9
sliding scale approach first developed in Zippo Mfg.
Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124
(W.D. Pa. 1997). This was not by mistake. Although
several other circuits have explicitly adopted the sliding
scale approach, see Tamburo v. Dworkin, 601 F.3d 693, 703
n.7 (7th Cir. 2010) (collecting cases), our court has ex-
pressly declined to do so. In Tamburo, we said that we
were hesitant “to fashion a special jurisdictional test
for Internet-based cases.” Id. That case dealt specifically
with an intentional tort (defamation) committed over
the Internet and through e-mail. Long before the Internet
became a medium for defamation, the Supreme Court
in Calder v. Jones, 465 U.S. 783 (1984), had decided the
relevant jurisdictional standard for intentional torts that
cross state lines. We concluded that “the principles articu-
lated [in Calder] can be applied to cases involving tortious
conduct committed over the Internet.” Tamburo, 601 F.3d
at 703.
We reach the same conclusion here. Zippo’s sliding
scale was always just short-hand for determining
whether a defendant had established sufficient mini-
mum contacts with a forum to justify exercising per-
sonal jurisdiction over him in the forum state. But we
think that the traditional due process inquiry described
earlier is not so difficult to apply to cases involving
Internet contacts that courts need some sort of easier-to-
apply categorical test. See Jennings v. AC Hydraulic A/S,
383 F.3d 546, 550 (7th Cir. 2004) (“[A]lthough tech-
nological advances may alter the analysis of personal
jurisdiction, those advances may not eviscerate the con-
stitutional limits on a state’s power to exercise jurisdic-
tion over nonresident defendants.”).
10 No. 09-1407
We have on at least one prior occasion made refer-
ence to Zippo’s sliding scale approach. In Jennings v. AC
Hydraulic A/S, we found that “[t]he exercise of personal
jurisdiction based on the maintenance of a passive web-
site is impermissible because the defendant is not
directing its business activities toward consumers in the
forum state in particular.” 383 F.3d at 549-50. We specifi-
cally declined to determine “what level of ‘interactivity’
is sufficient to establish personal jurisdiction based on
the operation of an interactive website.” Id. at 549. We do
not read Jennings to stand for anything more than the
accepted notion that a website that provides only infor-
mation does not create the minimum contacts necessary
to establish personal jurisdiction over a defendant in a
particular state. Jennings did not expressly adopt the
sliding scale approach and does not preclude our
decision today rejecting that approach.
2. Relatedness
For the court to exercise specific jurisdiction over
Hemi, Illinois’s claims must arise out of Hemi’s contacts
with Illinois. RAR, Inc., 107 F.3d at 1277-78. This require-
ment is satisfied here. Hemi sold and shipped cigarettes
to Illinois residents, and Hemi’s actions surrounding
those sales triggered Illinois’s claims against it. Even if
the sales technically occurred in New Mexico under
commercial law, Illinois’s claims are not based on the
contract between Hemi and its customers, but rather on
the fact that when it sold cigarettes to Illinois customers,
Hemi allegedly violated Illinois law and failed to satisfy
No. 09-1407 11
its reporting obligations. Thus, the legal location of the
sales contract is not dispositive of the personal jurisdic-
tion question.
3. Fairness
Finally, jurisdiction over Hemi is only proper if ex-
ercising jurisdiction “does not offend traditional notions
of fair play and substantial justice.” Int’l Shoe Co. v. Wash-
ington, 326 U.S. 310, 316 (1945) (internal quotation
marks omitted). We will consider:
[T]he burden on the defendant, the forum
State’s interest in adjudicating the dispute, the
plaintiff’s interest in obtaining convenient
and effective relief, the interstate judicial system’s
interest in obtaining the most efficient resolution
of [the underlying dispute], and the shared inter-
est of the several States in furthering funda-
mental substantive social policies.
Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d
773, 781 (7th Cir. 2003) (internal quotation marks omitted).
Here we do apply a sliding scale test: the weaker the
defendant’s contacts with the forum state are, the less
likely it is that exercising jurisdiction over that defendant
is appropriate. Id. However, “[t]hese factors rarely will
justify a determination against personal jurisdiction”
because there are other mechanisms available to the
court—such as choice of law and transfer of venue—to
accommodate the various interests at play. Id. at 781 n.10.
We conclude that exercising jurisdiction over Hemi in
Illinois is fair. Hemi set up an expansive, sophisticated
12 No. 09-1407
commercial venture online. It held itself out to conduct
business nationwide and was apparently successful in
reaching customers across the country. It was savvy
enough to at least try to limit its exposure to lawsuits in
states in which it felt that the upside of doing business
was outweighed by the risk of litigation. Hemi wants to
have its cake and eat it, too: it wants the benefit of a
nationwide business model with none of the exposure.
There is nothing constitutionally unfair about allowing
Illinois, a state with which Hemi has had sufficient mini-
mum contacts, to exercise personal jurisdiction over Hemi.
To be sure, defending against a lawsuit in Illinois may
prove to be a burden on Hemi, whose physical business
operations are located entirely in New Mexico. However,
Illinois courts have a strong interest in providing a
forum to resolve a dispute involving the state itself, and
it would be most convenient to the state of Illinois (and
likely New Mexico) to adjudicate a dispute based on
Illinois law in Illinois courts. None of the other relevant
factors weighs conclusively in Hemi’s favor.
This case is still at the very earliest stages of litigation,
and we conclude only that Illinois has established a
prima facie case of personal jurisdiction over Hemi in
Illinois. Moving forward, the district court will be able
to employ other mechanisms to balance the various
competing interests in this litigation.
We note the legitimate concern that “[p]remising per-
sonal jurisdiction on the maintenance of a website, with-
out requiring some level of ‘interactivity’ between the
defendant and consumers in the forum state, would create
No. 09-1407 13
almost universal personal jurisdiction because of the
virtually unlimited accessibility of websites across the
country.” Jennings, 383 F.3d at 550. Courts should be
careful in resolving questions about personal jurisdic-
tion involving online contacts to ensure that a defendant
is not haled into court simply because the defendant
owns or operates a website that is accessible in the
forum state, even if that site is “interactive.” Here, we
affirm the district court’s conclusion that Hemi is sub-
ject to personal jurisdiction in Illinois, not merely be-
cause it operated several “interactive” websites, but
because Hemi had sufficient voluntary contacts with the
state of Illinois. See Neogen, 282 F.3d at 890-91. We make
no comment on whether Hemi may be subject to
personal jurisdiction in any other state.
III. Conclusion
We A FFIRM the district court’s denial of Hemi’s motion
to dismiss for lack of personal jurisdiction and R EMAND
for further proceedings.
9-14-10