779 F. Supp. 2d 739
N.D. Ill.2011Background
- Plaintiffs, KBP shareholders, sue KBP and related entities for RICO, fraud, and fiduciary claims based on misappropriation of KBP assets.
- The court previously dismissed the complaint and allowed amendments; nine motions to dismiss remain at issue in the third amended complaint.
- Alleged misappropriations include sham contracts/payments, self-dealing leases, land misappropriation, and construction kickbacks to enrich defendants.
- Plaintiffs contend funds were diverted to invest in US businesses and to dilute plaintiffs’ KBP ownership, with concealment of wrongdoing.
- Defendants move under Rule 12(b)(6), Rule 12(b)(7), and for forum non conveniens; Adam Swiech challenges personal jurisdiction; nominal KBP entities seek to quash service.
- Court denies all motions to dismiss or quash service and denies forum non conveniens, preserving claims for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Adam Swiech | Adam has extensive Illinois contacts and directed KBP actions there. | Adam lacks sufficient minimum contacts and any claimed contacts do not arise from KBP-related claims. | Personal jurisdiction over Adam established; contacts exceed minimum and forum is proper. |
| Sufficiency of the complaint under Rule 12(b)(6) | Complaint clearly alleges specific predicate acts and a coherent RICO/related-claims framework. | Complaint is disorganized and fails to plead elements under various claims. | All Rule 12(b)(6) motions denied; complaint is sufficiently pled. |
| Service of process on KBP entities; personal jurisdiction over derivative/nominal defendants | KBP entities were properly served; controlling individuals enforce as agents for all subsidiaries. | Service and jurisdiction over derivative/nominal entities are improper. | Service and personal jurisdiction over KBP entities affirmed; motions denied. |
| Forum non conveniens | Polish forum may be available but largely impractical for defendant accountability. | Polish forum is adequate and preferred for convenience and efficiency. | No available adequate Polish forum for all defendants; doctrine denied; case may proceed. |
| Derivative claims assertion and joinder | Derivative claims properly align with nominal defendants and their interests. | Derivative claims fail for lack of proper joinder and standing. | Derivative and direct claims proceed; joinder issues resolved in plaintiffs’ favor. |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts and reasonableness in forum-state. due process)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts standard)
- Helsinki Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) (general vs. specific jurisdiction framework)
- Tamburo v. Dworkin, 601 F.3d 693 (7th Cir. 2010) (prima facie jurisdictional showing in 12(b)(2) motions)
- Kohler Co. v. Kohler Intern., Ltd., 196 F. Supp. 2d 690 (N.D. Ill. 2002) (doing business in forum supports jurisdiction)
- Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422 (2007) (forum non conveniens burden and availability)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) (forum non conveniens considerations and necessity)
- Abad v. Bayer Corp., 563 F.3d 663 (7th Cir. 2009) (home forum presumption in plaintiff-friendly forum)