Friday, July 7, 2017

Milestones: Philos Techs., Inc. v. Philos & D, Inc., 802 F.3d 905 (7th Cir. 2015)


This case involves a complicated set of facts that gave rise to parallel proceedings in the United States and South Korea. In the U.S. proceeding, the plaintiff is an Illinois corporation and the defendants are South Korean corporation and two South Korean individuals. Plaintiff alleged that it formed a joint venture in South Korea with the defendants, and had sent certain equipment in exchange for increasing the plaintiff's share in the joint venture. The defendants allegedly refused to increase the share, and refused to return the equipment. The plaintiff sued for conversion, and when the defendants failed to appear, the plaintiff won a default judgment. When the plaintiff attempted to enforce the judgment in Korea, the defendants filed a motion to vacate. The court granted the motion, finding that it did not have personal jurisdiction over the defendants. The court also imposed sanctions on the plaintiff, finding the plaintiff lied to establish personal jurisdiction.

The Court of Appeals affirmed. The court refused to review the corporate structure of the joint venture and focused only on the contacts that the defendants had. The court then found that a few business trips, followed by a contract with an Illinois corporation, do not together constitute sufficient minimum contacts. The court, however, ruled that sanctions were inappropriate as the trial court lacked the full information necessary to determine that the plaintiff had been untruthful.


The panel for this case was headed by Judge Diane Wood, and included Richard Posner. Talk about a heavy-hitting panel!

The full facts of this case is headache-inducting, but Judge Wood cuts through the weed by focusing on substance over form--which I believe is the correct approach. Rather than getting lost at the formal corporate structure, personal jurisdiction analysis is going to be about the actual interactions between the forum and the defendant.

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