Strabala v. Zhang
318 F.R.D. 81
N.D. Ill.2016Background
- Plaintiff Jay Marshall Strabala, an American architect, sued former Chinese partners Qiao Zhang and Zhou Shimiao (2DEFINE) for defamation and intentional interference after partnership fallout and parallel litigation in China and the U.S.
- Strabala filed in the Northern District of Illinois (Feb 9, 2015). He attempted Hague Convention service, sought alternative service by e‑mail and FedEx after delay, and obtained an entry of default which defendants later moved to vacate.
- Defendants appeared, moved to vacate default and to dismiss for lack of subject‑matter jurisdiction (diversity), lack of personal jurisdiction, invalid service, and failure to state Count II. Jurisdictional discovery was ordered.
- Key factual disputes: whether Strabala is domiciled in Illinois (vs. Texas or stateless while living in Shanghai); whether defendants targeted Illinois residents with defamatory e‑mails; whether e‑mail service reached defendants; and authenticity/source of certain e‑mail exhibits allegedly taken from Strabala’s laptop.
- Court: vacated the default for good cause; denied dismissal for lack of subject‑matter jurisdiction (found Strabala domiciled in Illinois); found personal jurisdiction as to Count I (defamation) but not as to Count II (intentional interference); granted plaintiff’s motion to strike two unauthenticated e‑mail exhibits; found service on Zhou effective but required proof/cure for service on Zhang.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Vacatur of default | Default should be set aside; plaintiff not prejudiced and merits should be reached | Plaintiff contends defendants knew of suit and delayed; service concerns not good cause | Default vacated: court finds lenient Rule 55(c) standard met (minimal prejudice, meritorious defenses, prompt action) |
| Subject‑matter jurisdiction (diversity domicile) | Strabala is an Illinois domiciliary despite living/working in Shanghai; retains Chicago home, bank accounts, business ties | Defendants: Strabala lives abroad (China/Texas) and is not domiciled in Illinois; diversity absent | Jurisdiction exists: court finds preponderance supports Illinois domicile (continuing domicile rule; objective indicia) |
| Personal jurisdiction — Count I (defamation) | Defendants sent targeted defamatory e‑mails to persons in Illinois, expressly aimed at forum | Defendants: sending e‑mails is fortuitous; lacked knowledge of recipients’ forum locations | Jurisdiction exists: Calder test satisfied (intentional tort expressly aimed at Illinois; effects known/foreseeable) |
| Personal jurisdiction — Count II (intentional interference) | Interference stems from same campaign and targeted Illinois interests | Defendants: interfering acts occurred in China; no ties to Illinois | Dismissed without prejudice for lack of personal jurisdiction as to acts occurring outside Illinois; Count II also fails to plead required specifics |
| Service of process (Hague/alternative e‑mail) | Hague methods attempted; court authorized alternative service by e‑mail and FedEx under Rule 4(f)(3) after delay | Defendants: Hague required or e‑mail service invalid; Zhang denies receipt | Service on Zhou effective; proof of service for Zhang deficient (return did not list e‑mail address). Court denied dismissal for defective service and ordered plaintiff to amend/cure or obtain waiver |
| Evidentiary/Authentication (Motion to Strike) | Plaintiff: Exhibits F & G (e‑mails/articles) may be doctored/stolen from his laptop and lack foundation | Defendants: exhibits authentic; claim business‑laptop / trade inscription foundation | Motion to strike granted: exhibits not properly authenticated; counsel’s metadata assertions inadequate; authenticity disputed and not proven |
Key Cases Cited
- Trade Well Int’l v. United Cent. Bank, 825 F.3d 854 (7th Cir. 2016) (final judgment void if court lacked personal jurisdiction or proper service)
- Cracco v. Vibran Express, Inc., 559 F.3d 625 (7th Cir. 2009) (elements to set aside default before final judgment: good cause, prompt action, meritorious defense)
- Sims v. EGA Prods., Inc., 475 F.3d 865 (7th Cir. 2007) (Rule 55(c) focuses on judicial action; disproportionate damages can justify vacatur)
- Homer v. Jones‑Bey, 415 F.3d 748 (7th Cir. 2005) (signed return of service prima facie; defendant must rebut)
- Felland v. Clifton, 682 F.3d 665 (7th Cir. 2012) (personal jurisdiction analysis for torts; Calder guidance applied)
- Calder v. Jones, 465 U.S. 783 (U.S. 1984) (purposeful direction/express aiming in libel supporting jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (minimum contacts / fair play and substantial justice framework)
- Walden v. Fiore, 134 S. Ct. 1115 (U.S. 2014) (effects test; defendant’s forum contacts required; reputation‑based torts analyzed in context)
- Advanced Tactical Ordnance Systems, LLC v. Real Action Paintball, Inc., 751 F.3d 796 (7th Cir. 2014) (generic mass e‑mails do not alone establish purposeful availment)