In the

United States Court of Appeals
               For the Seventh Circuit

No. 08-3229

GCIU-E MPLOYER R ETIREMENT F UND,
                                               Plaintiff-Appellant,
                                v.

T HE G OLDFARB C ORPORATION,
                                              Defendant-Appellee.


            Appeal from the United States District Court
                 for the Central District of Illinois.
             No. 07 C 1174—Joe Billy McDade, Judge.



        A RGUED A PRIL 2, 2009—D ECIDED M AY 11, 2009




 Before B AUER and F LAUM , Circuit Judges, and K APALA ,
District Judge. Œ
 K APALA , District Judge. On June 29, 2007, plaintiff,
Graphic Communications International Union (GCIU)
Employer Retirement Fund, filed a complaint against



Œ
  The Honorable Frederick J. Kapala of the United States
District Court for the Northern District of Illinois, sitting by
designation.
2                                                    No. 08-3229

defendant, The Goldfarb Corporation, seeking to collect
withdrawal liability payments under the Employee
Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. § 1001 et seq. The district court granted defendant’s
motion to dismiss plaintiff’s action for lack of personal
jurisdiction. Plaintiff now appeals.


                        I. Background 1
  Defendant is a Canadian company with its principal
place of business in Canada. It does not maintain a place
of business, employ individuals, serve customers, or
have a designated agent for service inside the United
States. In April 1995, defendant purchased 60% of the
stock of Fleming Packaging Corporation (Fleming). Flem-
ing was a Delaware corporation with its principal place
of business in Peoria, Illinois. Defendant did not direct or
control the daily affairs of Fleming. Defendant and
Fleming maintained separate payrolls, bank accounts,
and leases and filed separate tax returns.
  Fleming, as a consequence of the collective bargaining
agreements of its wholly-owned subsidiaries, was re-


1
  In reciting the facts, we read the complaint liberally with
every inference drawn in favor of plaintiff and resolve all
factual disputes in favor of plaintiff. See Cent. States, Se. & Sw.
Areas Pension Fund v. Phencorp Reinsurance Co., 

,
878 (7th Cir. 2006); Purdue Research Found. v. Sanofi-Synthelabo,
S.A., 

, 782 (7th Cir. 2003). However, we accept as
true any facts contained in the defendant’s affidavits that
remain unrefuted by the plaintiff. See First Nat’l Bank v.
El Camino Res., Ltd., 

, 905 (N.D. Ill. 2006).
No. 08-3229                                                   3

quired to contribute to plaintiff, a multi-employer pension
plan.2 In May 2003, Fleming filed for bankruptcy. There-
after, Fleming’s assets were sold. Plaintiff argues
that when Fleming’s assets, which included its subsid-
iaries, were sold, Fleming withdrew from the Fund, see
29 U.S.C. § 1383, and thereby incurred withdrawal
liability, see 

Plaintiff now seeks to collect from
defendant for Fleming’s withdrawal from the Fund.
  Prior to Fleming’s demise, defendant had considerable
involvement with Fleming’s creditors. In 1997, Fleming
entered a loan agreement with Bank One. In the years
that followed, Fleming defaulted on the loan, and
amended the loan agreement several times. As a result
of Fleming’s continuing financial difficulties, in 2001,
defendant increased its ownership in Fleming to 82.2%.3
In March 2001, three members of the Goldfarb family,
Martin, Stanley, and Alonna, were elected as Fleming
officers and also accounted for 3 of the 9 seats on its
Board of Directors. At that time, Martin and Alonna were


2
    See 29 U.S.C. §§ 1002(37), 1301(a)(3).
3
   “For purposes of determining withdrawal liability, ERISA
defines an ‘employer’ as the business that directly participates
in the plan, as well as those entities that constitute the busi-
ness’s ‘control group.’ All entities constituting the control
group incur withdrawal liability.” 

(citation omitted). Plaintiff alleges that defendant was an
“employer” for the purposes of the assessment of withdrawal
liability because defendant owned more than an 80% interest
in Fleming. See 29 U.S.C. § 1301(b)(1); 26 C.F.R. § 1.414(c)-
(2)(b)(2)(i)(A).
4                                             No. 08-3229

officers, directors, and shareholders of defendant. Al-
though not an officer, Stanley was also a director and
shareholder of defendant. In December 2001, defendant
presented a restructuring plan to Fleming’s lenders, but
the lenders rejected the plan and declared Fleming in
default in February 2002.
  In March 2002, Fleming and Bank One amended the
loan agreement to require Fleming to sell two of its busi-
nesses. On the same day, defendant and Bank One
entered into a subsequent private agreement, containing
a Michigan forum-selection clause, which provided that
when Fleming sold these businesses, defendant would
make a secured, subordinated loan to Fleming for
$1.5 million.
  In July 2002, the Goldfarbs met with Bank One represen-
tatives in Canada before a scheduled Fleming board
meeting. At that meeting, defendant indicated that it
would not fulfill its promise to infuse $1.5 million into
Fleming upon the sale of its businesses. The Goldfarbs
notified Bank One that they planned to use some of the
profits from the sale of two divisions of Fleming to re-
structure Fleming and that they planned to consolidate
Fleming’s Peoria operations and close others. At the
Fleming board meeting, Fleming learned of defendant’s
negotiations regarding the $1.5 million loan to Fleming.
The other lenders at the meeting rejected the restruc-
turing plan that Fleming had presented to Bank One
earlier and insisted that Fleming hire an independent
consultant. On August 15, 2002, Alonna Goldfarb
traveled to Peoria, Illinois, on behalf of defendant. The
nature of this trip is unknown.
No. 08-3229                                              5

  In September 2002, Fleming sold part of its Peoria
operations causing Bank One to demand the $1.5 million
originally promised by defendant. Defendant sought to
condition this loan on Bank One providing additional
money for restructuring. After negotiations between
defendant and Bank One, defendant loaned Fleming
$765,000 of the $1.5 million. Defendant also agreed to
advance an additional $1.5 million to Fleming if the
lenders funded Fleming’s operations until July 2003.
However, between December 2002 and January 2003, the
lenders rejected Fleming’s proposals to continue
operating, sought to have Fleming and its assets sold,
gave notice of default, and retained bankruptcy lawyers.
  In February 2003, the lenders, Fleming, some of Flem-
ing’s subsidiaries, and defendant negotiated and executed
the Fifth Amendment to the Loan Agreement. In the
agreement, the lenders agreed to delay exercising their
default rights if defendant relinquished control of Fleming
to George Gialenios, who was hired in 2002 to develop
Fleming’s restructuring plan. In exchange, defendant
would receive 3.5% of Fleming’s sale proceeds and the
lenders and Bank One agreed not to enforce defendant’s
remaining obligations as to the $1.5 million promised
under defendant’s March 2002 agreement. One of the
purposes of the Fifth Amendment to the Loan Agree-
ment was for the lenders to temporarily forebear from
exercising their rights and thereby permit Fleming to
develop, implement and complete a program for sale
of Fleming’s operations as a going concern. In early
February 2003, the Goldfarbs resigned from Fleming’s
6                                                       No. 08-3229

Board and defendant executed an irrevocable proxy
permitting Gialenios to vote its shares.4
  On April 7, 2003, Martin Goldfarb reported to defen-
dant’s Board of Directors that the banks had taken over
Fleming and he had been informed by the invest-
ment banker that the original negotiated sale was not pro-
ceeding, but he was not otherwise informed of their
progress. In May 2003, Fleming filed for bankruptcy. In
July 2004, the bankruptcy trustee brought an adversary
proceeding against defendant involving many of the
same transactions and events alleged in this case.
  According to Joanna Anderson, an asset manager for
Bank One who was involved in the sale of Fleming,
defendant initially did not intend to cooperate in any
way in the bankruptcy, restructuring or liquidation of
Fleming, but eventually agreed to give up control during
the sale process. In her notes, Anderson remarked that
the lenders’ plan was “to set the path of how the sale
will occur in the sales process before control is trans-
ferred.” Anderson noted that no bankruptcy would occur
until the lenders found a buyer. Thereafter, the plan
was to file for bankruptcy and “run a 363 auction.” 5



4
  The record does not reflect whether the Goldfarbs also
resigned as officers.
5
  The Bankruptcy Code provides that a trustee “after notice
and a hearing, may . . . sell, . . . other than in the ordinary course
of business, property of the estate.” 11 U.S.C. § 363(b). The
Bankruptcy Rules provide that such a sale may be private or
by public auction. Fed. R. Bankr. P. 6004(f)(1).
No. 08-3229                                               7

However, according to Anderson, it was not until after
the Fifth Amendment to the Loan Agreement was signed
that Fleming actively sought out buyers.


                  II. Procedural History
  In June 2007, plaintiff filed this suit seeking to collect
withdrawal liability payments from defendant, and the
matter was referred to Magistrate Judge Byron Cudmore.
In response to defendant’s motion to dismiss for lack
of personal jurisdiction, the Magistrate Judge entered a
Report and Recommendation recommending dismissal.
The Magistrate Judge reasoned that although defendant
had sufficient minimum contacts with the United States,
plaintiff was unable to show that its claim arose from
or was related to defendant’s contacts. The Magistrate
Judge also recommended that plaintiff’s request for
further discovery be denied because further informa-
tion about matters such as Alonna Goldfarb’s trip to
Peoria and defendant’s negotiations with Fleming’s
lenders was unrelated to plaintiff’s claim.
   The district court accepted the Magistrate Judge’s
recommendation and reasoning, finding that plaintiff’s
claims did not arise out of defendant’s minimum
contacts with the United States. The court found that
defendant’s contacts with the United States arose from
its involvement with Fleming’s lenders. However, the
court noted that these contacts did not involve
Fleming’s withdrawal from the Fund, which serves as the
basis for plaintiff’s claim. Specifically, the court found
that defendant had relinquished its control over
8                                                 No. 08-3229

Fleming well before Fleming withdrew from the Fund,
and pointed out that Fleming’s lenders were the ones that
originally sought to have Fleming sold in January 2003. In
addition, the district court found that defendant’s inter-
actions with the lenders had no impact on the collective
bargaining agreements entered into by Fleming’s sub-
sidiaries. The district court also denied defendant’s
request for further discovery, agreeing that the limited
discovery sought would not relate to plaintiff’s claim.


                      III. Discussion
                 A. Personal Jurisdiction
  This court reviews dismissals for lack of personal juris-
diction de novo. Cent. States, Se. & Sw. Areas Pension Fund
v. Reimer Express World Corp., 

, 939 (7th Cir.
2000). Plaintiff has the burden of demonstrating the
existence of personal jurisdiction. RAR, Inc. v. Turner Diesel,
Ltd., 

, 1276 (7th Cir. 1997). When a defen-
dant’s motion to dismiss is based on the submission of
written materials, without the benefit of an evidentiary
hearing, the plaintiff need only make out a prima facie
case of personal jurisdiction. 

.
  “Any district court in which a plaintiff brings an action
under Title I of ERISA will have personal jurisdiction
over the defendant, if the defendant is properly served
and has sufficient minimum contacts with the United
States.” 

(alteration and quotation
marks omitted). These contacts may be related or
unrelated to the facts forming the basis for the lawsuit de-
No. 08-3229                                               9

pending on whether defendants are subject to specific or
general jurisdiction. Id.; 

. General
jurisdiction is for suits neither arising out of nor related
to the defendant’s contacts with the State, and is permitted
only where the defendant conducts continuous
and systematic general business within the forum state.

. Specific jurisdiction, meanwhile,
“refers to jurisdiction over a defendant in a suit arising
out of or related to the defendant’s contacts with the
forum.” 

omitted). In either case, the
defendant’s conduct and connection with the forum
must be such that it should reasonably anticipate being
haled into court there. 

. In this
case, plaintiff does not challenge the district court’s
finding that defendant does not have sufficient contacts
with the United States to merit general jurisdiction. Thus,
we proceed to explore whether the court has specific
jurisdiction.
  To decide whether specific personal jurisdiction may
be exercised, a court must engage in three distinct steps:
    (1) identify the contacts the defendant has with the
    forum; (2) analyze whether these contacts meet consti-
    tutional minimums and whether exercising jurisdic-
    tion on the basis of these minimum contacts suffi-
    ciently comports with fairness and justice; (3) deter-
    mine whether the sufficient minimum contacts, if any,
    arise out of or are related to the causes of action in-
    volved in the suit.

Neither party disputes the district court’s
identification of defendant’s contacts as those defendant
10                                                No. 08-3229

had with Fleming’s lenders, or its decision that those
contacts would fairly and justly merit specific jurisdic-
tion in suits arising out of those contacts. Rather, the sole
issue on appeal is whether plaintiff’s claim meets the
third criterion as one arising out of or related to the
minimum contacts defendant had with the United States
   Initially, we note, and neither party contests, that defen-
dant’s ownership of a majority of Fleming stock is insuf-
ficient to establish specific personal jurisdiction. See 

In Reimer, this court noted that “jurisdiction and
liability are two separate inquiries.” 

As such,
we recognized that in actions seeking withdrawal
liability, ERISA’s broad “definition of corporate affilia-
tion as an element of withdrawal liability does not confer
personal jurisdiction on the basis of such affiliation.” 

with the forum must be assessed
separate from Fleming’s. 

(citing Keeton v. Hustler
Magazine, Inc., 

, 781 n.13 (1984)). Although
in this case, at times defendant’s actions may have evi-
denced more than a normal parent-subsidiary relation-
ship, we agree with the district court that the proper
focus of the analysis is on defendant’s conduct and
whether plaintiff’s claim arises out of that conduct. See

n.13.
  In order to determine whether a claim relates to or
arises out of a party’s contacts, the court “cannot simply
aggregate all of a defendant’s contacts with a state- no
matter how dissimilar in terms of geography, time, or
substance- as evidence of the constitutionally-required
minimum contacts.” 

. As such,
this court has held that, to be relevant for personal juris-
No. 08-3229                                                11

diction, past contacts should either bear on the sub-
stantive legal dispute between the parties or relate to the
operative facts of the case. 

Thus, “the action
must directly arise out of the specific contacts between
the defendant and the forum state.” 

omitted).
   The parties agree that because the only contact defendant
had with the United States was its interaction with Flem-
ing’s lenders, the crux of this case is whether defendant’s
involvement with Fleming’s lenders is sufficiently
related to plaintiff’s cause of action. In order to answer
that question, we look first to the elements of plaintiff’s
cause of action for withdrawal liability. An employer is
liable to the multi-employer plan in the amount deter-
mined to be withdrawal liability when the employer
engages in a complete or partial withdrawal. See 29
U.S.C. § 1381(a). Plaintiff alleges that Fleming completely
withdrew from the Fund. “Complete withdrawal” occurs
when an employer “(1) permanently ceases to have
an obligation to contribute under the plan, or (2) perma-
nently ceases all covered operations under the plan.” 

  That being said, plaintiff acknowledges that only
certain types of sales of Fleming would have caused a
“complete withdrawal” as defined by § 1383(a). For
example, plaintiff points out that a stock sale of
Fleming would not necessarily have caused a complete
withdrawal. See Santa Fe Pac. Corp. v. Cent. States, Se. & Sw.
Areas Pension Fund, 

, 727 (7th Cir. 1994). In
addition, neither filing for bankruptcy protection nor
insolvency is necessarily a repudiation of obligations or a
12                                                 No. 08-3229

cessation of operations. Cent. States, Se. & Sw. Areas Pension
Fund v. Basic Am. Indus., Inc., 

, 916-17 (7th Cir.
2001). In contrast, a sale of Fleming’s assets without
complying with ERISA’s “safe harbor” provision, as
plaintiff argues occurred here, would trigger complete
withdrawal. See 29 U.S.C. § 1384.6 As such, the cause
of action here does not arise out of the general decision
to sell Fleming or financial demise of Fleming, but
rather the actual sale of Fleming’s assets without com-
plying with the “safe harbor” provisions.
  Next we determine whether defendant’s contacts
were sufficiently related to the cause of action. It is undis-
puted that defendant surrendered all of its controlling
interest in Fleming in February 2003, months before
Fleming was sold and withdrew from the Fund. 7 Despite
this fact, plaintiff contends that defendant’s contacts
directly relate to plaintiff’s claim. Plaintiff argues that
defendant’s failure to honor its March 11, 2002 agree-
ment with Bank One may have caused the lenders to be
more aggressive in recovering their loans and, thus,
increased the likelihood Fleming would withdraw from



6
   That provision exempts sales of assets from withdrawal
liability if the buyers and sellers structure the sale appropri-
ately and comply with certain reporting and bonding require-
ments. Cent. States, Se. & Sw. Areas Pension Fund v.
Nitehawk Express, Inc., 

, 488 (7th Cir. 2000).
7
  It is also undisputed that defendant had no role in either
negotiating or entering the collective bargaining agreements
that provided for Fleming’s subsidiaries’ contributions to the
Fund.
No. 08-3229                                              13

the Fund. Plaintiff also argues that defendant’s imprudent
negotiation with Fleming’s lenders and eventual agreement
to “abandon its investment,” were contributing factors
in the sale of Fleming’s assets, which caused Fleming’s
withdrawal from the Fund. In addition, plaintiff argues
that by negotiating and executing the final amendment
to the loan agreement, in which the Goldfarbs resigned
from Fleming’s Board and defendant executed an irrevo-
cable proxy, defendant allowed the resulting asset sale.
  However, we find these contacts too attenuated to
support specific personal jurisdiction. First, the fact that
defendant’s poor financial decisions in relation to
Fleming may have caused Fleming to garner a more
contentious relationship with its lenders does not neces-
sarily mean that Fleming would or had to withdraw
from the Fund. See 

(holding that
the fact that defendant would not have been performing
the task that subjected him to liability but for his
previous contacts with plaintiff in Illinois was a loose
causal connection that did not provide the basis for
personal jurisdiction).
  Second, even assuming that defendant’s poor negoti-
ating tactics contributed to Fleming’s withdrawal, these
tactics do not “directly” relate to Fleming’s withdrawal
from the Fund. Although, arguably, the withdrawal
would not have occurred but for the failure of
defendant’s negotiations, defendant’s negotiations were
temporally far from the actual withdrawal, and several
independent decisions were made by the lenders between
the failed negotiations and the withdrawal. See O’Connor
v. Sandy Lane Hotel Co., Ltd., 

, 322 (3d Cir.
14                                                  No. 08-3229

2007) (“But-for causation cannot be the sole measure of
relatedness because it is vastly overinclusive in its calcula-
tion of a defendant’s reciprocal obligations. The problem
is that it ‘has . . . no limiting principle; it literally
embraces every event that hindsight can logically
identify in the causative chain.’ ”).
  Finally, it is important to realize that even if defendant’s
contacts included an acquiescence that Fleming would
be sold, there is no evidence that defendant’s contacts
involved the decision to sell assets without considering the
Fund obligations. As plaintiff acknowledges there were
many ways Fleming could have been sold to avoid with-
drawal. Plaintiff points to no evidence that defendant’s
contacts with the United States included any contribu-
tion or input on how Fleming would ultimately be sold.8
In fact, Anderson’s notes reflect that the lenders decided
on what was the best plan for sale.9




8
   In response to this final point, plaintiff argues that an em-
ployer’s pure intent should not insulate them from with-
drawal liability. However, as discussed above, liability should
not be confused with jurisdiction. See 

.
Moreover, it is not defendant’s intentions that are determina-
tive, but rather its conduct related to withdrawal. Because
defendant was not involved in structuring the sale, its con-
tacts did not relate to the actions that directly caused Fleming’s
withdrawal from the Fund.
9
  Although Anderson indicates that the lenders may have
decided how the sale would occur before defendant sur-
rendered control, there is no indication defendant was aware
of this plan or participated in it.
No. 08-3229                                                15

  At oral argument, plaintiff asserted that defendant knew
of the asset sale because it agreed to the sale of Fleming “as
a going concern.” A going concern is “[a] commercial
enterprise actively engaging in business with the expecta-
tion of indefinite continuance.” Black’s Law Dictionary
712 (8th ed. 2004). In its brief, defendant contends that
this meant that Fleming’s lenders were going to sell
Fleming through a stock sale as opposed to an asset
sale. However, a sale of assets as a group also can be
referred to as a sale of assets as a “going concern.” See Fla.
Dept. of Revenue v. Piccadilly Cafeterias, Inc., ___ U.S. ___,

, 2330 (2008); Phason v. Meridian Rail Corp.,

, 529 (7th Cir. 2007); EEOC v. G-K-G, Inc., 

, 747 (1994). Moreover, the complaint alleges
that defendant agreed to “permit a sale of [Fleming’s]
operations as a going concern,” suggesting the assets were
to be sold as a going concern. (Emphasis added). Accord-
ingly, when construing the evidence and the complaint
in the light most favorable to plaintiff, one could con-
clude defendant was aware that an asset sale was possible.
  However, though we reach this conclusion, such knowl-
edge in itself is not enough to show that defendant’s
conduct related to withdrawal because withdrawal in-
volves not only a sale of assets, but a sale of assets with-
out complying with the safe harbor provisions. See 29
U.S.C. § 1384. Anderson’s notes indicate that at the time
defendant surrendered control of Fleming there was no
buyer, and no sale was set to occur. Thus, defendant’s
contacts regarding the Fifth Amendment to the Loan
Agreement could not have involved decisions related to
withdrawal because there had been no determination
16                                              No. 08-3229

of whether a yet unknown potential buyer was amenable
to complying with ERISA’s safe harbor provisions. More-
over, three months passed between defendant’s sur-
render of control and the sale. As noted by Martin
Goldfarb, during that time the plans for sale changed
and in any event defendant was not informed of the
progress of the sale. As such, this court cannot find that
defendant’s contacts with the United States were suffi-
ciently related to decisions regarding the sale of Fleming
that triggered withdrawal liability.
  As a result, plaintiff has not met its burden to make
out a prima facie case that its cause of action is one
“arising out of” or “related to” defendant’s minimum
contacts with the United States. See 

.
Accordingly, we affirm the district court’s order
granting defendant’s motion to dismiss.


                       B. Discovery
  Plaintiff next argues that the district court erred in
denying its motion for further discovery. Plaintiff argues
it should have been allowed limited discovery
regarding Alonna Goldfarb’s travel to Peoria as well as
information about the extent of defendant’s negotiations
with Fleming. “We review the district court’s decision
on discovery matters for an abuse of discretion.” 

. In order to garner discovery, “[a]t a
minimum, the plaintiff must establish a colorable or
prima facie showing of personal jurisdiction . . . .” 

. “Foreign nationals usually should not
No. 08-3229                                               17

be subjected to extensive discovery in order to deter-
mine whether personal jurisdiction over them exists.” 

court did not abuse its discretion in
denying plaintiff’s request for discovery. In investigating
its claim, plaintiff admits it already had reviewed over
6,000 documents as well as the depositions of the
Goldfarbs and Anderson in the bankruptcy proceedings.
Despite this search, plaintiff points to nothing indicating
that defendant was involved in deciding to implement
an asset sale of Fleming that did not comply with ERISA’s
safe harbor provisions. Plaintiff asserts that it is crucial
to find out information about defendant’s final agree-
ment to surrender control of Fleming because defendant
could possibly have suggested structuring its divestiture
of Fleming as an asset sale. However, there is nothing
plaintiff points to that indicates this was a possibility. In
fact, Anderson’s deposition suggests otherwise. In addi-
tion, Alonna’s trip occurred long before the sale, and
there is no indication that defendant had yet contem-
plated allowing the lenders to control any sale of Fleming.
  Moreover, the agreement makes it clear that defendant
surrendered its control in February 2003 so that Gialenios,
not defendant, could structure the sale of Fleming. Addi-
tional evidence presented by plaintiff also indicates
that defendant’s input was not considered in the sale.
For example, Anderson stated in her deposition in the
bankruptcy case that during the negotiation in which
defendant surrendered control, “the bank group wanted
a quick and clear path to a sale and felt that a third party
would be able to better implement a sale.” In addition,
18                                              No. 08-3229

Anderson specifically acknowledged that the Goldfarbs
were difficult to deal with during this time period in
terms of getting things accomplished and that it took
a lot more time to make decisions dealing with them.
  Accordingly, the district court did not abuse its discre-
tion in finding that further information about Alonna’s trip
or the negotiations surrounding defendant’s surrender
of control was unlikely to yield evidence of any contacts
arising out of or relating to Fleming’s withdrawal from
the Fund. Compare 

As such, we affirm the
district court’s denial of plaintiff’s motion for further
discovery.


                     IV. Conclusion
  For the foregoing reasons, we A FFIRM the district
court’s judgment in favor of defendant.




                           5-11-09