EAST ST. LOUIS SCHOOL DISTRICT 189 v. ARAMARK CORPORATION

DAVID R. HERNDON, District Judge.

I. Introduction and Background

This matter comes before the Court on Aramark Educational Service Inc.'s motion to dismiss and Aramark Corporation's motion to dismiss (Docs. 6 13, respectively). District 189 objects to the motion. On November 8, 2001, the Court heard oral argument on the motions to dismiss and took the matter under advisement. Based on the pleadings and the applicable law, the Court grants in part and denies in part Aramark Educational Service Inc.'s motion to dismiss and denies Aramark Corporation's motion to dismiss.

On June 14, 2001, the East St. Louis School District 189 ("District 189"), individually and on behalf of all other similarly situated school districts both public and private, filed a three-count complaint against Aramark Corporation ("Aramark"), Aramark Educational Services, Inc. ("AES"). Stephen DiPrima, George Nash and Louise Esaian in the St. Clair County, Illinois Circuit Court (Doc. 2). The complaint alleges breach of contract (Count I), common law fraud (Count II) and civil conspiracy (Count III). This case arises out of food management contract between District 189 and Defendants in which Defendants provided food services to students. On July 13, 2001, AES removed the case to this Judicial District based on 28 U.S.C. § 1332, diversity jurisdiction (Doc. 1).

This case purports to be a class action. As of this date, District 189 has not moved for class certification, thus, the case is not proceeding as such.

Now before the Court is AES' motion to dismiss for failure to state a claim (Doc. 6) and Aramark's motion to dismiss Plaintiff's complaint in its entirety due to lack of personal jurisdiction (Doc. 13). District 189 objects to the motions to dismiss. Based on reasons stated herein, the Court rules as follows.

II. Aramark Educational Service's Rule 12(b)(6) Motion to Dismiss

When ruling on a motion to dismiss for failure to state a claim, the district court assumes as true all facts well-pled plus the reasonable inferences therefrom and construes them in the light most favorable to the plaintiff. Fries v. Helsper, 146 F.3d 452, 457 (7th Cir. 1998) (citing Wiemerslage Through Wiemerslage v. Maine Township High School Dist. 207, 29 F.3d 1149, 1151 (7th Cir. 1994)). The question is whether, under those assumptions, the plaintiff would have a right to legal relief. Id. This standard also has been articulated:

[U]nder "simplified notice pleading," . . . the allegations of the complaint should be liberally construed, and the "complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."

Lewis v. Local Union No. 100 of Laborers' Int'l Union, 750 F.2d 1368, 1373 (7th Cir. 1984) (quoting Conley v. Gibson, 355 U.S. 41, 46-47 (1957)). Accord Fries at 457; Vickery v. Jones, 100 F.3d 1334, 1341 (7th Cir. 1996).

The Seventh Circuit has reiterated the liberal standard governing notice pleading:

It is sufficient if the complaint adequately notifies the defendants of the nature of the cause of action. . . . As the Supreme Court has recently reminded us, the Federal Rules of Civil Procedure do not permit us to demand a greater level of specificity except in those instances in which the Rules specifically provide for more detailed elaboration. See Leatherman v. Tarrant County Narcotics Intelligence Coordination Unit, 507 U.S. 163, 168 (1993).

Duda v. Bd. of Educ. of Franklin Park Pub. Sch. Dist. No. 84, 133 F.3d 1054, 1057 (7th Cir. 1998); See also Kaplan v. Shure Brothers, Inc., 153 F.3d 413, 419 (7th Cir. 1998). In fact, the Seventh Circuit has instructed that a plaintiff's claims must survive a 12(b)(6) dismissal motion if relief could be granted under any set of facts that could be proved consistent with the allegations. Hi-Lite Products Co. v. American Home Products Corp., 11 F.3d 1402, 1409 (7th Cir. 1993).

In Counts I and II, District 189 has delineated facts sufficient to allow the Court to "understand the gravamen of the plaintiff's complaint." Kyle v. Morton High School, 144 F.3d 448, 455 (7th Cir. 1998). Affording Counts I and II liberal construction, this Court cannot say that "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Ledford v. Sullivan, 105 F.3d 354, 356 (7th Cir. 1997) (citing Hishon v. King Spaulding, 467 U.S. 69, 73 (1984)). Thus, the Court denies AES' motion as to Counts I and II of District 189's complaint.

However, the Court finds that District 189 has failed to allege the essential elements to state a claim for civil conspiracy. Under Illinois law, "civil conspiracy arises where two or more persons combine to accomplish by concerted action either a lawful purpose through unlawful means or an unlawful purpose through lawful means." Belkow v. Celotex Corp., 722 F. Supp. 1547, 1550 (N.D.Ill. 1989). A conspiracy cannot exist where the two or more persons involved in the alleged conspiracy were merely interchangeable entities or were essentially conducting a single act as a single entity. See Dombrowski v. Dowling, 459 F.2d 190, 196 (7th Cir. 1972); Thomas v. Rohner-Gehrig Co., 582 F. Supp. 669, 673 (N.D.Ill. 1984). Similarly, a conspiracy cannot exist between a principal and an agent or servant. See Salaymeh v. Interqual, Inc., 508 N.E.2d 1155, 1158-59 (Ill.App. 1987).

In its complaint, District 189 sets forth its civil conspiracy claim against Defendants by repeating and re-alleging facts contained in paragraphs 2-13 of the complaint. Paragraph 2 alleges that "Aramark Corporation is the parent corporation of many subsidiary corporations which engage in business activities including, but not limited to, catering, meeting planning education, janitorial services, recreational activities, job training and corporate apparel." Paragraph 4 alleges that Aramark Corporation is the sole shareholder of Aramark Educational Services, Inc. Paragraphs 5 through 13 allege that Defendants DiPrima, Nash and Esaian were employees of Aramark Educational Services, Inc. and that they were also agents or apparent agents of Aramark Corporation. Thus, District 189 civil conspiracy claim incorporates allegations that Aramark Educational Services, Inc., and Aramark Corporation have a relationship of parent and subsidiary and that DiPrima, Nash and Esaian were employees of the subsidiary and agents of the parent. Under Illinois law, these allegations make the parties one in the same for the purpose of civil conspiracy. Further, Aramark Educational Services, Inc., Aramark Corporation, DiPrima, Nash and Esaian are the only parties District 189 implicates in the civil conspiracy. Accepting as true all of the well-pleaded facts in the complaint, District 189 fails to allege a claim for civil conspiracy because, under Illinois law, a civil conspiracy must involve two or more parties. Accordingly, the Court grants AES' motion to dismiss Count III.

District 189 also alleges that "The defendants herein, Aramark Corporation, Aramark Educational Services, Inc., Stephen P. DiPrima, George Nash and Louise agreed to participate in the unlawful scheme to deprive East St. Louis School District 189 and the plaintiff-class of the value of federally donated commodities." (Doc. 2, ¶ 68).

IV. Aramark Corporation's Rule 12(b)(2) Motion to Dismiss

Aramark argues that it lacks sufficient contacts with the State of Illinois to make in personam jurisdiction constitutional. Specifically, Aramark contends that it is not registered to do business in Illinois and that District 189 has not alleged facts that would prove that Aramark is doing business in Illinois, that it committed a tortious act in Illinois, or that it made a contract connected with the Illinois. Moreover, Aramark contends that District 189 has not alleged facts which would prove that Aramark owns, uses or possesses real estate in Illinois. To the contrary, District 189 argues that Aramark through multiple offices, numerous agents and employees has had many contacts in Illinois directly related to this suit and that Aramark's Illinois activities are sufficient to permit personal jurisdiction in Illinois. The Court agrees with District 189.

A federal district court exercising diversity jurisdiction has personal jurisdiction if a state court in the district in which it sits would have jurisdiction. See RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). The exercise of jurisdiction must be consistent with the Illinois long-arm statute and the Illinois and Federal constitutions. Id. at 1276. Plaintiff bears the burden of demonstrating the existence of personal jurisdiction. See Steel Warehouse of Wisconsin, Inc. v. Leach, 154 F.3d 712, 714 (7th Cir. 1998). To withstand a motion to dismiss for lack of personal jurisdiction, a plaintiff must provide sufficient evidence to establish at least a prima facie case of personal jurisdiction. See Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987); see also Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992) (stating that "a prima facie showing of personal jurisdiction must be based on evidence of specific facts set forth in the record; the plaintiff must go beyond the pleadings and make affirmative proof.").

Personal jurisdiction over a non-resident defendant may be based on either specific or general contacts with the forum. See RAR, Inc., 107 F.3d at 1277. Specific jurisdiction exists when the claims alleged themselves relate to, or arise out of, the defendant's contacts with the forum. See Id. In specific jurisdiction cases, the Court must determine if the defendant "purposefully established minimum contacts within the forum State" and consider whether, by traditional standards, those contacts make personal jurisdiction reasonable and fair under the circumstances. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985). General jurisdiction requires continuous and systematic general business contacts with the forum. See RAR, Inc., 107 F.3d at 1277. Illinois courts recognize two methods by which a plaintiff can establish jurisdiction over a foreign parent based on the activities of its subsidiary. First, the plaintiff can provide evidence that justifies piercing the corporate veil of the subsidiary. See IDS Life Ins. Co. v. SunAmerica Life Ins. Co., 136 F.3d 537 (7th Cir. 1998). Alternatively, the plaintiff can show that the subsidiaries were acting as the parent's agent, so that in fact, the parent was doing business in Illinois, albeit through its subsidiaries. See Id. at 541.

The Court finds that there is sufficient evidence to exercise personal jurisdiction over Aramark. First, District 189's complaint alleges that DiPrima, Nash and Esaian were agents or apparent agents of Aramark (Doc. 2, ¶¶ 7, 10 13). Secondly, Esaian and DiPrima, have sent letters regarding the claims at issue on Aramark letterhead (Doc. 22, Exhibits A1, A2, A3). Each letter contains "Aramark Corporation" preprinted on the upper left side along with the preprinted Aramark logo on the upper right side. The letter sent by Esaian contain the address 7000 Ridge Avenue, East. St. Louis, IL 62201 and the letters sent by DiPrima contain the address 2000 Spring Road, Suite 300 Oak Brook, IL 60523. Further, Richard Wells, Director of Business and Operations of District 189, sent a letter to Mr. Robert Sommerfield, Regional Manager of Aramark, to an address in Belleville, Illinois regarding the contract at issue in this matter (Doc. 22, Exhibit A4). Moreover, Richard J. Chapman, Regional Sales Director School Nutritional Services, sent a letter to Mr. Wells, on the same stationary that Esaian and DiPrima used in Exhibits A1, A2 A3 (Doc. 22, Exhibit A5). Chapman's letter contains an address from 1090 West Fork Drive, Lake Forest, IL 60045. Lastly, Exhibits A7, A8 and A9 are invoices containing the Aramark logo sent to District 189. On the upper right corner, the invoices state in bold "Terms: Due Upon Presentation Make Checks Payable to `Aramark Corporation.'" The invoices also contain a return address located in East St. Louis and a contact person of George Nash with the phone number of (618) 398-6120.

618 is one of the area codes for this Judicial District.

The Court finds that it has specific and general jurisdiction over Aramark. The Court concludes that based on these contacts with Illinois, subjecting Aramark Corporation to the jurisdiction of this Court does not violate due process or offend traditional notions of fair play and substantial justice. Aramark Corporation purposefully availed itself of the benefits and burdens of Illinois law and Aramark Corporation has failed to demonstrate jurisdiction in this Court would be so burdensome that it would offend notions of fair play and substantial justice. Thus, the Court finds that it has personal jurisdiction over Aramark.

VI. Conclusion

Accordingly, the Court GRANTS in part and DENIES in part Aramark Educational Services' motion to dismiss (Doc. 6). The Court DENIES Aramark Corporation's motion to dismiss (Doc. 13). The Court DISMISSES without prejudice Count III of the complaint. The Court ALLOWS East St. Louis School District 189 up to and including December 12, 2001 to file an amended complaint that comports with this Order, the Federal Rules of Civil Procedure and the Local Rules of this Judicial District. Further, the Court DENIES as moot the remaining motion to dismiss (Doc. 35).

IT IS SO ORDERED.