It has been argued by some that Illinois Supreme Court Rule 277 – the rule pertaining to supplementary proceedings – grants courts personal jurisdiction over corporations that neither reside nor transact business in the state. This argument, however, is flawed.

Illinois Supreme Court Rule 277(d) details when supplementary proceedings may be commenced, and provides, inter alia, “If the party to be cited neither resides nor is employed nor transacts his business in person in this State, the proceeding may be commenced in any county in the State, upon the filing of a transcript of the judgment in the court in the county in which the proceeding is to be commenced.” The argument that has been made is that this particular language from Rule 277(d) grants courts personal jurisdiction over out-of-state companies that have no ties to Illinois since it specifically notes that supplementary proceedings can be commenced in any county in the state upon the filing of a transcript of the judgment in the county in which the proceedings are being commenced. This argument, however, ignores the law of long-arm jurisdiction and assumes that Rule 277(d) pertains to personal, rather than subject matter, jurisdiction.

To determine whether a prima facie case for personal jurisdiction exists, courts are to evaluate personal jurisdiction under Illinois’ long-arm statute and the due process clauses under both the Illinois and United States Constitutions. The Illinois long-arm statute states that a court may "exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States." 735 ILCS 5/2-209(c). In addition, in order for an Illinois court to have personal jurisdiction over an out-of-state party, the court must find either specific jurisdiction or general jurisdiction. 735 ILCS 5/2-209; Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).

If Illinois has specific jurisdiction over an out-of-state company, then it makes sense that supplementary proceedings can occur in any Illinois county. While the out-of-state party does not reside here, is not employed here, and does not transact business here, if the party engaged in some conduct that gives Illinois courts specific jurisdiction over it, then personal jurisdiction in Illinois exists – simple. The problem arises when there is no specific jurisdiction, so the only way that Illinois courts can obtain personal jurisdiction is by utilizing general jurisdiction principles. As our United States Supreme Court teaches us in Daimler AG v. Bowman, 571 U.S. 117 (2014), and the Illinois Supreme Court teaches us in Aspen American Insurance Co. v. Interstate Warehousing, Inc., 2017 IL 121281, general jurisdiction only applies to states where corporations are essentially “at home” – and that location is only the state of their incorporation or the state where their principal place of business (i.e., headquarters) is located.

But what about the language found in Rule 277(d)? Does that language usurp Illinois’ long-arm statute and grant Illinois courts personal jurisdiction over any out-of-state entity? This question was addressed years ago in Salvator v. Admiral Merchants Motor Freight, 175 Ill.App.3d 901 (4th Dist. 1988). In Salvator, the judgment creditor argued that Rule 277 gave the court personal jurisdiction over an out-of-state individual who was also an employee of the judgment debtor. The citation was directed at the third-party, individually, not to the judgment debtor. The Salvator court held that: “These rules [Rule 277(c)(3), (d), and (e)] show that subject matter jurisdiction exists in this case, but are not conclusive concerning in personam jurisdiction.” What Salvator made clear was that any court in Illinois has jurisdiction over the subject matter of supplementary proceedings, but the law regarding personal jurisdiction was not supplanted by Rule 277.

The bottom line is that Rule 277 does not grant courts personal jurisdiction over out-of-state entities. Illinois’ long-arm statute indicates that a court may “exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution or the Constitution of the United States.” 735 ILCS 5/2-209(c). Merely issuing a citation to discover assets does not, in and of itself, confer upon the court personal jurisdiction over the cited entity.