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FOURTH DIVISION

                                                                                                            November 17, 2005

No. 1-05-0552

ILLINOIS COMMERCE COMMISSION,                                     )          Appeal from the

                                                                                                        )          Circuit Court of

                        Petitioner-Appellee,                                              )           Cook County.

                                             )

v.                                                                                                      )          No. 04 CH 19444

                                                                                                         )

ENTERGY-KOCH TRADING, LP,                                               )          Honorable

                                                                                                         )          Richard A. Siebel,

                        Respondent-Appellant.                                         )          Judge Presiding.

            JUSTICE GREIMAN delivered the opinion of the court:

            Respondent Entergy-Koch Trading, LP, appeals from the circuit court’s denial of itsmotion to dismiss the Illinois Commerce Commission’s (ICC) application to compel theproduction of certain documents and recordings for an administrative proceeding to whichrespondent is not a party. Respondent also appeals from the circuit court’s holding, pursuant toits dismissal order, that respondent is subject to the jurisdiction of Illinois courts. For the reasonsthat follow, we affirm.

            Respondent is a limited partnership entity which is wholly owned by another limitedpartnership, Entergy-Koch, LP (EKLP), and until 2004 functioned as a wholesale energy tradingand consulting company. Respondent was incorporated in Delaware and its principal place ofbusiness is Houston, Texas. EKLP represents a limited partnership between Entergy Corporation,with its principal place of business in New Orleans, Louisiana, and Koch Energy, Inc., with itsprincipal place of business in Wichita, Kansas.

            In October 2000, Koch Energy Trading, Inc., a subsidiary of Koch Energy, Inc., mergedwith IMD Storage Transportation and Management (IMD). In February 2001, Koch EnergyTrading was merged with respondent. Between August 1999 and November 2000, IMD wasregistered in Illinois as a foreign limited liability company and had an Illinois registered agent.

            Between 1999 and 2003, respondent and IMD entered into contracts with NorthernIllinois Gas Company (NICOR) for consultation services in connection with NICOR’s Gas CostPerformance Program (Program), which allowed the company to share in any savings it achievedthrough procuring natural gas on the open market as measured against financial benchmarksestablished by the ICC. Specifically, respondent and IMD received payment from NICOR forproposing strategies on the storage of its acquired gas supplies. In February 2001, the servicesperformed by IMD were transferred to respondent. NICOR’s working relationship withrespondent encompassed approximately 80 contracts, letter agreements, modifications and writtenstrategies. Under those agreements respondent developed, marketed to, and implemented supply,storage, and risk management strategies on behalf of NICOR in order to maximize NICOR’sprofits under the Program. Some of the major agreements were drafted primarily in Illinois andcontained Illinois choice of law provisions. In the performance of those contracts, respondent’spersonnel would travel to Illinois to meet in person with NICOR personnel, speak by telephone,and correspond by mail. Respondent staged several presentations in Illinois relating to itsworking relationship with NICOR, and between 1999 and 2003, NICOR tendered $6.7 million infees to respondent.

            The ICC opened investigations into NICOR’s activities under the Program to determinewhether the rates NICOR charged to Illinois consumers were just and reasonable. As part of theproceedings, in July 2004, the ICC issued administrative subpoenas for certain materials inrespondent’s possession relating to the rates charged by NICOR to consumers under the Program,specifically recordings of telephone calls and business documents pertaining to the consultingservices respondent provided to NICOR from 1999 to 2003. Respondent failed to comply withthe subpoenas, and the ICC filed an application to compel their enforcement in November 2004.

            Respondent filed a motion to dismiss for lack of personal jurisdiction pursuant to section2-301 of the Code of Civil Procedure (735 ILCS 5/2-301 (West 2004)). Respondent argued thatthe ICC’s application to compel failed to allege personal jurisdiction and that no provision existedin the Illinois long-arm statute (735 ILCS 5/2-209 (West 2004)) that would confer jurisdiction. Respondent asserted that it was a foreign entity without a registered agent, office, principal placeof business, affiliates, or parent entities located in Illinois. Respondent also asserted that it had nocontacts or bank accounts in Illinois, nor was it licensed or admitted to do business in the state,nor did it have any employees or property or pay taxes in Illinois.

            Respondent admitted that it had entered into contracts with NICOR, an Illinois entity, forthe transportation, storage, distribution, and financial trades of natural gas supplies, but arguedthat the negotiation, substantial performance, and execution of those contracts occurred at itsplace of business in Texas. Respondent also asserted that the mere possession of the documentsand recordings sought by the ICC was insufficient to confer jurisdiction to Illinois courts and thatit did not have sufficient minimum contacts with NICOR to submit it to the jurisdiction of Illinoiscourts. Lastly, respondent contended that it never purposefully availed itself of the privilege ofdoing business in Illinois and that the subject matter of the ICC’s application to compel did notarise from its contacts with Illinois.

            In a written order, the circuit court denied respondent’s motion and found that theevidence weighed in favor of jurisdiction over respondent, pursuant to section 2-209(a)(7) of thelong-arm statute, under which foreign corporate defendants in causes of action arising from themaking or performance of contracts connected with Illinois are subject to the jurisdiction ofIllinois courts. 735 ILCS 5/2-209(a)(7) (West 2004). The court relied on the facts that IMD hadpreceded respondent in the agreement to and execution of the contracts with NICOR, that thecontracts were at least partly performed in Illinois, that respondent had engaged in solicitationefforts to secure the agreements, and that the ICC subpoenas related to NICOR’s activitiesrelating to the Program.

            The court also found jurisdiction proper pursuant to section 2-209(a)(1), which confersjurisdiction over causes of action that arise from the transaction of business in Illinois. 735 ILCS5/2-209(a)(1) (West 2004). The court noted that, as a result of its contractual relationship withNICOR, respondent was involved in the execution of and was paid for services in connection withNICOR’s Program, and made continuous and systematic business communications in Illinois, bothin person and electronically.

            The circuit court determined that Illinois jurisdiction did not violate due process becauserespondent had the requisite minimum contacts within Illinois by means of actively marketing itsservices to NICOR, continuously communicating with NICOR, and remitting invoices to andaccepting payment from NICOR, such that respondent had fair warning that it might be subject tolitigation in Illinois at some point in time. The court noted that the agreements betweenrespondent and NICOR specifically incorporated the terms of the agreements between NICORand IMD, that payments were to be remitted to the same bank account that IMD had used, andthat a majority of the agreements between respondent and NICOR contained provisions statingthat Illinois law would govern them and that disputes would be litigated in Illinois. The courttherefore found that respondent had derived financial benefits from its activities with an Illinoisentity and took advantage of the benefits and protections of Illinois law such that it had submitteditself to the jurisdiction of Illinois courts.

            Respondent sought an order from the circuit court to certify the issue of personaljurisdiction for interlocutory appeal, pursuant to Supreme Court Rule 308. 155 Ill. 2d R 308. The circuit court denied respondent’s motion. Respondent thereafter filed a petition in this courtfor leave to file an interlocutory appeal pursuant to Supreme Court Rule 306(a)(3). 166 Ill. 2d R306(a)(3). We granted the petition and now affirm.

            Respondent contends on appeal that the circuit court’s ruling was erroneous because theICC’s application to compel the production of the records it seeks did not allege a prima faciebasis for personal jurisdiction over respondent; because there is no connection betweenrespondent’s business activities in Illinois with NICOR and the instant cause of action, i.e. theICC’s application to compel production; and because the exercise of Illinois jurisdiction overrespondent would violate due process.

            A plaintiff has the burden of establishing prima facie bases for exercising a court’s inpersonam jurisdiction over a defendant. Haubner v. Abercrombie & Kent International, Inc., 351Ill. App. 3d 112, 117 (2004). A plaintiff’s prima facie case may be rebutted by a defendant’suncontradicted evidence that defeats jurisdiction. Alderson v. Southern Co., 321 Ill. App. 3d 832,846 (2001). Where a circuit court determines jurisdiction based on documentary evidence, wereview the court’s decision de novo. Alderson, 321 Ill. App. 3d at 846.

            Respondent first contends that the ICC’s application to compel failed to plead allegationsestablishing the circuit court’s jurisdiction over respondent and that such an omission is fatal tothe application. A plaintiff must allege facts in its initial complaint upon which to base therelevant court’s jurisdiction over a nonresident defendant under the long-arm statute. HellerFinancial, Inc. v. Conagra, Inc., 166 Ill. App. 3d 1, 4 (1988).

            The ICC’s application stated that it sought compulsory production of records andwitnesses on the basis of NICOR’s contractual relationships with respondent and IMD ininstituting and administering its Program over the course of several years. The application alsostated that NICOR was an Illinois public utility subject to regulation by the ICC, and that the ICCsought the records in respondent’s possession as part of a reconciliation proceeding to determinethe prudence of NICOR’s gas purchasing decisions, which were sometimes implemented based onconsultations with respondent and which affected the cost of gas sold to Illinois consumers byNICOR .

            We find that the ICC’s application, while it may not have cited specific statutory bases forexercising the circuit court’s jurisdiction, did allege sufficient facts to allege jurisdiction pursuantto sections 2-209(a)(1) (transaction of business in Illinois), 2-209(a)(7) (making or performanceof contract connected with Illinois), and 2-209(b)(4) (doing business in Illinois). 735 ILCS 5/2-209 (a)(1), (a)(7), (b)(4) (West 2004). Accordingly, we reject respondent’s argument that theICC’s application to compel was defective on its face, and proceed to the issue of whether thecircuit court’s finding of jurisdiction was proper.

            Our analysis of the propriety of the circuit court’s jurisdiction is a bifurcated process. Indetermining whether an Illinois court’s jurisdiction is proper over a foreign defendant, weevaluate: (1) whether the facts of the case satisfy the requirements of the long-arm statute; and (2)whether jurisdiction is permissible under the notions of due process. Rollins v. Elwood, 141 Ill.2d 244, 271 (1990).

            We first address the issue of whether jurisdiction is proper pursuant to the Illinois long-arm statute. A court can assert either specific or general jurisdiction over a particular defendant. Specific jurisdiction refers to personal jurisdiction in a suit arising out of or related to thedefendant’s contacts with the forum state, while general jurisdiction applies to suits neither arisingout of nor related to the defendant’s particular activities and is proper only where the defendanthas continuous and systematic business contacts within the forum state. Borden Chemicals &Plastics, L.P. v. Zehnder, 312 Ill. App. 3d 35, 41 (2000). In specific jurisdiction cases, the actionmust directly arise out of the contacts between the defendant and the forum. Alderson, 321 Ill.App. 3d at 857. By contrast, a court may assert general jurisdiction over a defendant that hascarried on business activities within the forum state with a fair measure of permanence andcontinuity ("doing business” pursuant to section 2-209(b)(4) of the long-arm statute) regardless ofwhether the cause of action arises directly out of the defendant’s contacts with the forum state. Spartan Motors, Inc. v. Lube Power, Inc., 337 Ill. App. 3d 556, 561 (2003).

            An Illinois court may assert specific jurisdiction over a nonresident defendant pursuant tothe long-arm statute if the defendant, inter alia, transacts business in Illinois or makes or performsa contract substantially connected with Illinois and those activities give rise to the immediatecause of action. 735 ILCS 5/2-209(a)(1), (a)(7), (f) (West 2004); cf. Haubner, 351 Ill. App. 3d at117.

            In determining whether a defendant was in fact transacting business and entered intocontracts in Illinois, we consider several factors, including who initiated the transactions, wherethe contract was entered into, and where the performance of the contract was to take place. Ruprecht Co. v. Sysco Food Services of Seattle, Inc., 309 Ill. App. 3d 113, 122 (1999). Thelocation of the actual parties in a transaction or to a contract and the formation of the relevantcontract are rarely dispositive of whether a defendant indeed transacted business in Illinois, seeingas much of modern business is transacted by mail and electronic communications across statelines. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 85 L. Ed. 2d 528, 543, 105 S. Ct.2174, 2184 (1985). Often, even isolated solicitation of Illinois residents that results in ongoingcommercial relationships and has substantial impacts on their interests is sufficient to constitutethe transaction of business under the long-arm statute. Alderson, 321 Ill. App. 3d at 855-56.

            Here, it is undisputed that respondent entered into as many as 80 contracts with NICORand advised NICOR, repeatedly and over the course of several years, regarding the utility’sacquisition and storage of natural gas reserves for later sale to Illinois consumers in exchange forseveral million dollars in consulting fees. Respondent and NICOR corresponded numerous timesvia telephone and letter and their respective personnel met in person on several occasions. Onthese facts it is obvious that respondent actively solicited business from NICOR, that it enteredinto an ongoing contractual relationship with NICOR, and that its actions affected the interests ofIllinois residents by way of its advice to NICOR concerning the acquisition, storage, anddistribution of natural gas. Accordingly, we find that respondent’s interaction with NICORconstituted the transaction of business in Illinois pursuant to the long-arm statute.

            Respondent argues that the circuit court erred in finding jurisdiction pursuant to sections2-209(a)(1) and 2-209(a)(7) because respondent’s interactions with NICOR did not give rise tothe immediate cause of action, the ICC’s application to compel respondent to produce witnessesand records. Respondent argues that the cause of action is between it and the ICC, not between itand NICOR, and that jurisdiction would only be proper if respondent had had direct businesstransactions or contractual obligations with the ICC.

            Respondent relies on section 2-209(f), which states: "Only causes of action arising fromacts enumerated herein may be asserted against a defendant in an action in which jurisdiction overhim or her is based upon subsection (a).” 735 ILCS 2-209(f) (West 2004). Respondent alsorelies on this court’s decision in Gaidar v. Tippecanoe Distribution Service, Inc., 299 Ill. App. 3d1034 (1998), where we held that the dismissal of a defendant for lack of personal jurisdiction wasproper even though the defendant had conducted business in Illinois but the cause of action forwhich the plaintiff sought relief – negligence on the part of the defendant leading to a fatalautomobile accident – arose in Indiana and not in Illinois. The court reasoned that conductingbusiness in Illinois then later traveling to Indiana where the accident occurred did not constitute aclose enough relationship between the defendant and his actions within the forum state to hale himinto an Illinois court to defend against the plaintiff’s suit. Gaidar, 299 Ill. App. 3d at 1046-47.

            Respondent points out that the instant action arises from its possession of documents andrecordings that the ICC wishes to examine in the course of a reconciliation proceeding involvingNICOR and that respondent is not a party to that proceeding, as well as the fact that thepossession of records is not an act explicitly listed as giving rise to Illinois jurisdiction undersection 2-209(a). Respondent maintains that the circuit court’s finding of jurisdiction pursuant tothat section was therefore erroneous.

            We would posit that respondent’s interactions with NICOR did indeed give rise to theimmediate cause of action. As stated above, respondent engaged in significant businesstransactions and several contracts with NICOR, a public utility that is subject to state regulationunder the Public Utilities Act (Act) (220 ILCS 5/1 et seq. (West 2004)). 220 ILCS 5/3-105(West 2004). As a regulated utility, NICOR is subject to supervision by the ICC in establishingits rates and providing reliable service without discrimination. 220 ILCS 5/4-101 (West 2004);City of Chicago v. Illinois Commerce Comm’n, 294 Ill. App. 3d 129 (1997). Under the Act,NICOR is required to file tariffs with the ICC; tariffs are public documents setting forth servicesbeing offered, the rates and charges for those services, and the rules, regulations, and practicesrelating to those services. 220 ILCS 5/9-102 (West 2004); Adams v. Northern Illinois Gas Co.,211 Ill. 2d 32, 55 (2004). The ICC is required to conduct annual hearings to examine whether autility’s tariffs reflect the costs of purchased fuel, gas, or power in order to determine whethersuch purchases were prudent. 220 ILCS 5/9-220(a) (West 2004); Illinois Power Co. v. IllinoisCommerce Comm’n, 339 Ill. App. 3d 425, 427 (2003). In such proceedings, the utility mustshow that it exercised a reasonable standard of care under the circumstances that prevailed and inlight of the facts available at the time it made its purchasing decisions. Illinois Power Co., 339 Ill.App. 3d at 428.

            Alternatively, a utility may petition the ICC to implement other regulatory ratemechanisms that reward or penalize the utility through the adjustment of rates based on itsperformance. 220 ILCS 5/9-244(a)(ii) (West 2002). The ICC may approve such a program if itfinds that it is likely to result in rates lower than those that would have been in effect undertraditional rate regulation, the program is likely to result in benefits to the utility’s customers, andthe program otherwise complies with the provisions of the Act. 220 ILCS 5/9-244(b)(1) through(b)(8) (West 2004). The ICC is required to review any program it approves under this subsectiontwo years after its implementation to determine whether the program is meeting its objectives or itmay investigate whether the utility is implementing its program in accordance with the ICC’sapproval order. 220 ILCS 5/9-244(c), (d) (West 2004). It was just this sort of proceeding thatled to the present appeal.

            For the past two years and in three separate proceedings, the ICC has been attempting tofulfill its duties pursuant to the Act and determine whether NICOR’s gas purchases under theProgram, which were often executed on the advice and counsel of respondent, were executed inaccordance with the Program’s objectives and the ICC’s approval of the Program’simplementation. By its own admission, respondent consulted and advised NICOR on its naturalgas purchasing and storage strategy, which undoubtedly affected the rates it charged to customersto reflect its own costs in providing service. Further, the fees NICOR paid respondent for itsadvice obviously factored into its costs of providing service and in turn the rates it chargedcustomers. Respondent’s advice to NICOR undeniably influenced the rates NICOR chargedcustomers during the periods the ICC has been attempting to review, a review which requires acomplete record of the facts available to NICOR at the time it administered the Program. Respondent’s advice to NICOR at those times is an integral part of such a record, and the ICCcannot conduct the kind of review that it is statutorily required to conduct without accuraterepresentations of respondent’s advice.

            While respondent maintains that its contacts with Illinois and its regulators are tooattenuated for an Illinois court to assert jurisdiction, we believe that the relationship between theimmediate cause of action and respondent’s jurisdictional activities is sufficiently close in thisinstance to justify Illinois jurisdiction. The present action is certainly one that "lies in the wake”of respondent’s commercial activities involving an Illinois public utility. See VolkswagenInsurance Co. v. Whittington, 58 Ill. App. 3d 621, 624 (1978). Accordingly, we find that thefacts of the case satisfy the requirements for jurisdiction under the Illinois long-arm statute.

            We next examine whether jurisdiction in this instance would be proper according to thenotions of due process. Under federal due process guidelines, a state may exercise jurisdictionover a foreign defendant where the defendant has certain minimum contacts with the forum statesuch that requiring the defendant to litigate in the forum state would not offend traditional notionsof fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316, 90L. Ed. 95, 102, 66 S. Ct. 154, 158 (1945). Illinois courts comport with due process when theyassert jurisdiction over a nonresident defendant where it is fair, just, and reasonable to require thedefendant to litigate in Illinois, considering the quality and nature of the defendant’s acts in Illinoisor which affect interests in Illinois. Rollins, 141 Ill. 2d at 275. Jurisdiction accords with federaldue process where the nonresident defendant has purposefully directed its activities at residents ofthe forum state and the litigation results from those activities. Burger King, 471 U.S. at 471-72,85 L. Ed. 2d at 540-41, 105 S. Ct. at 2181-82. The minimum contacts requirement is met wherethe foreign defendant deliberately engages is significant activities within the forum state or hasestablished continuing obligations with forum state residents. Burger King, 471 U.S. at 474, 85L. Ed. 2d at 542, 105 S. Ct. at 2183.

            In determining whether jurisdiction conforms with notions of fair play and substantialjustice, this court considers: (1) Illinois’ interest in adjudicating the dispute; (2) the plaintiff’sinterest in obtaining convenient and effective relief; (3) the interstate judicial system’s interest inobtaining the most effective resolution of controversies; and (4) the states’ shared interest infurthering social policies. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 62 L.Ed. 2d 490, 498, 100 S. Ct. 559, 564 (1980).

             We have already examined the quality and nature of respondent’s activities in Illinois andestablished that respondent purposefully directed its activities at NICOR, engaged in continuingobligations with it, and earned significant revenue as a result of those activities, and that itsactivities most certainly affected the interests of Illinois residents by influencing the rates they paidfor gas services during the periods in which respondent consulted on NICOR’s purchasing andstorage strategies under the Program. Moreover, respondent, at the time of its transactions withNICOR, was an established energy trader, and in negotiating and executing numerous significanttransactions with NICOR, had to have been aware that it was dealing with a state-regulated entitywhose purchasing decisions and overall operation were subject to strict oversight from the ICC. Respondent certainly was not lacking notice that its activities would affect interests in Illinois andcould certainly give rise to legal disputes here.

            Moreover, we have already established that finding jurisdiction in this instance wouldserve Illinois’ interest in adjudicating the immediate dispute by way of the ICC’s obligations tofulfill its statutory duty to review NICOR’s implementation and administration of its natural gasProgram, which the ICC cannot effectively fulfill without the records currently in respondent’spossession. This dovetails with the ICC’s interest in obtaining the relief it seeks, in that theproduction of the records in respondent’s possession would enable it to fulfill its statutory dutiesand ensure that Illinois consumers are being provided with adequate service at reasonable rates onthe part of NICOR. A finding of jurisdiction would also serve the interests of the interstatejudicial system in that it would expedite the ICC’s review and spare the system the initiation ofextraneous proceedings in other fora, such as a Texas or federal district court, in order for theICC to obtain another judicial directive and receive the information that it seeks from respondent.

            Finally, jurisdiction would serve the state’s interest in furthering social policies in that theICC would be able to perform its statutory mandate to ensure that Illinois consumers receivereliable utility service at reasonable rates by determining whether the rates Illinois consumers werecharged as a result of NICOR’s consultations with respondent were indeed fair and reasonable. With the increasing rate of deregulation of interstate energy sales and services at the federal level(see, e.g., J. Jurewitz, Evolving Structural Change and Business Strategies in the U.S. ElectricityIndustry, Claremont Colleges Working Papers in Economics (2000)), it rests with state authoritiesto ensure that their citizens receive dependable utility service at fair prices. While respondentmaintains that its services affected only the utility, NICOR, and not its customers, we do notbelieve that such a distinction insulates it from requests for information necessary to the properfunctioning of state regulatory proceedings. If respondent is able to avoid complying with anorder to produce information necessary to the resolution of statutorily mandated reviews, foreignthird-party consultants could also be shielded from cooperating with similar proceedings in otherstates, leaving regulators with little to no authority to enforce just and reasonable rate schemes,on no basis other than geography.

            Accordingly, we conclude that jurisdiction would not offend federal notions of dueprocess, and, for the foregoing reasons, we affirm the circuit court’s finding of jurisdiction and itsdenial of respondent’s motion to dismiss.

            Affirmed.

            QUINN, P.J., and MURPHY, J., concur.