United States District Court, N.D. Illinois, Eastern Division
December 12, 2005.
John McGill, Plaintiff,
Gigantex Technologies Co., Ltd., Defendant.
The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
John McGill sues Gigantex Technologies Co., Ltd. ("Gigantex")
for negligence, strict liability, and breach of warranty for
injuries suffered in a bicycle accident. Gigantex moves to
dismiss the complaint for lack of personal jurisdiction.
McGill filed suit against Gigantex, Bell Sports, Inc., and Tien
Hsin Industries Co., Ltd. asserting claims for negligence, strict
liability and breach of warranty in the United States District
Court for the District of Maryland.*fn1 No. 03 C 2570 (D.
Md. Sept. 5, 2003). After Gigantex filed a motion to dismiss for
lack of personal jurisdiction, the district court directed the
parties to conduct discovery on the jurisdictional issue. Upon
the completion of discovery, Gigantex filed a renewed motion to
dismiss for lack of personal jurisdiction. McGill filed a motion
to transfer to the Northern District of Illinois pursuant to
28 U.S.C. § 1406. On September 30, 2005, the district court ruled
that Maryland did not have personal jurisdiction over Gigantex
and granted McGill's motion to transfer to the Northern District
of Illinois pursuant to 28 U.S.C. §§ 1406(a) and 1631. McGill is a Maryland resident. Compl. at ¶ 3. Gigantex is a
Taiwanese company that manufactures and sells bicycle components
with its principal place of business in Taiwan. Id. at ¶ 4.
McGill suffered injuries when a bicycle with components
manufactured by Gigantex malfunctioned. Id. at ¶¶ 7, 10. The
accident occurred in Delaware. Id. at ¶ 10.
In deciding a Rule 12(b)(2) motion to dismiss, McGill bears the
burden of demonstrating the existence of personal jurisdiction.
Jennings v. AC Hydraulic A/S, 383 F.3d 546, 549 (7th Cir.
2004); RAR, Inc. v. Turner Diesel, 107 F.3d 1272, 1276 (7th
Cir. 1997); ABN Amro Sage Corp. v. Cohen, No. 03 C 3556, 2003
WL 22057449, at *1 (N.D. Ill. Sept. 3, 2003). The court accepts
all well-pleaded jurisdictional allegations in the complaint as
true unless controverted by affidavit. Turnock v. Cope,
816 F.2d 332, 333 (7th Cir. 1989); ABN Amro Sage Corp., 2003 WL
22057449, at *1. Any conflict presented by affidavit must be
resolved in McGill's favor. Hyatt Int'l Corp. v. Coco,
302 F.3d 707, 712-13 (7th Cir. 2002).
A federal district court in Illinois may exercise personal
jurisdiction over a nonresident defendant only if an Illinois
court would have jurisdiction over the defendant. RAR, Inc.,
107 F.3d at 1275. An Illinois court has personal jurisdiction
where permitted by state statutory law and state and federal
constitutional law. Id. at 1276. Illinois' long-arm statute
extends personal jurisdiction to the limit allowed under the
Illinois and federal constitutions. Id. Courts typically
consider the reach of Illinois due process by looking to federal
constitutional limits on jurisdiction. Id. at 1276-77; see
also Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir.
2002). A defendant must have "certain minimum contacts with
[Illinois] such that maintenance of the suit does not offend
`traditional notions of fair play and substantial justice."
International Shoe Co. v. State of Washington, Office of Unemployment Compensation and Placement, 326 U.S. 310, 316
(1945) (citation omitted). Gigantex may be subject to either
general or specific jurisdiction under Illinois law. RAR, Inc.,
107 F.3d at 1277.
McGill does not assert that this suit arises out of Gigantex's
conduct in Illinois. Thus, the question of personal jurisdiction
turns on whether Gigantex is subject to general jurisdiction.
General jurisdiction is appropriate only where defendants have
"continuous and systematic general business contacts" with
Illinois. RAR, Inc., 107 F.3d at 1277 (citing Helicopteros
Nacionales de Colombia, S.A., v. Hall, 466 U.S. 408, 411 n. 8
(1984)). Those contacts must be so extensive as to make it
"fundamentally fair to require [Gigantex] to answer in any
[Illinois] court in any litigation arising out of any
transaction or occurrence taking place anywhere in the world."
Purdue Research Foundation v. Sanofi-Synthelabo, S.A.,
338 F.3d 773, 787 (7th Cir. 2003). In determining whether general
jurisdiction exists, courts examine the following factors: (1)
the extent to which Gigantex conducts business in Illinois; (2)
whether Gigantex maintains offices or employees in Illinois; (3)
whether Gigantex sends agents into Illinois to conduct business;
(4) whether Gigantex advertises or solicits business in Illinois;
and (5) whether Gigantex has designated an agent for service of
process in Illinois. Interlease Aviation Investors II (Aloha)
L.L.C. et al. v. Vanguard Airlines, Inc., 262 F. Supp. 2d 898,
906-07 (N.D. Ill. 2003). In determining whether Gigantex's
contacts with Illinois are continuous and systematic general
business contacts that would submit the company to general
jurisdiction, the court will only consider those contacts which
continued up to the time of the suit. Repository Technologies v.
Systems Consultants, No. 02 C 8640, 2003 WL 21148340, at *6
(N.D. Ill. May 16, 2003) (citing Asset Allocation & Management
Co. v. W. Employers Ins. Co., 892 F.2d 566, 570 (7th Cir. 1989)); Haggerty Enterprises, Inc. v. Lipan
Industrial Co., Ltd., No. 00 C 766, 2001 WL 968592, at *4 (N.D.
Ill. Aug. 23, 2001).
Gigantex is a foreign corporation with a foreign principal
place of business. It has no offices, agents, employees or
property in Illinois. Gigantex Mem. at Ex. A. It does not
advertise or otherwise solicit business in Illinois. Id. Nor
has Gigantex designated an agent for service of process in
It is undisputed that Gigantex' only contact with Illinois is
selling bicycle parts to Sabin West, an individual located in
Illinois. West operates a business on eBay selling a variety of
items, including bicycle parts. Before 2000, West purchased
Gigantex products through Cyrille Vachaudez, an individual
located in Denmark. McGill Mem. at Ex. A, p. 15. Vachaudez
decided to stop selling Gigantex products and asked West if he
would like his contact information passed along to Gigantex.
Id. at pp. 15-16. West confirmed that he would like Vachaudez
to give Gigantex his contact information. Id. In 1999 or 2000,
Gigantex contacted West via email. Id. West now places
approximately two orders a year with Gigantex via email for
bicycle parts that he sells over eBay. Id. at p. 22. Gigantex
ships the parts to West "F.O.B. Taiwan," which means delivery is
complete when the products are sent to a shipper in Taiwan. C.
Yang Chen v. Regitar Power Tools Co. Ltd., No. 86 C 6425, 1987
WL 14734 (N.D. Ill. July 20, 1987). There is no evidence in the
record as to how many parts West sells to Illinois residents.
McGill argues that general jurisdiction exists because
Gigantex' presence in Illinois is continuous and growing.
Gigantex' sales to Illinois, however, are a very small percentage
of its total sales. The percentage of total sales in Illinois
were: 0.3% in 2000, 0.9% in 2001, 3.4% in 2002, and 3.5% in 2003.*fn2 McGill Mem. at Ex. B. McGill contends that
by contacting West, Gigantex solicited business in Illinois and
purposefully availed itself of a business transaction.
McGill has not established that Gigantex had the required
minimum contacts to warrant a finding of general jurisdiction
sufficient to require Gigantex to litigate in Illinois courts.
Purdue Research Foundation, 338 F.3d at 787. Gigantex' sales to
West are not "so extensive to be tantamount to [Gigantex] being
constructively present in the state. . . ." Id. at 787;
Helicopteros Nacionales de Colubmia, 466 U.S. at 418
(insubstantial sales occurring in forum state, "even if occurring
at regular intervals" are insufficient to satisfy requirements of
general jurisdiction); Hot Wax, Inc. v. Stone Soap, Inc. No. 97
C 6878, 1999 WL 183776, at *4 (N.D. Ill. March 25, 1999) (where a
defendant's volume of sales is small, court will only exercise
jurisdiction where defendant also engaged in active solicitation
of business or targeted the forum state with direct
advertisements). Contrary to McGill's assertions, Gigantex has
not actively solicited business or advertised in Illinois.
Gigantex was provided with West's contact information through
another customer, not at Gigantex' request or by active
solicitation or advertisement. Further, McGill does not cite any
authority to support his position that general jurisdiction can
be established by such limited contact. See, e.g., Madison
Consulting Group v. South Carolina, 752 F.2d 1193 (7th Cir.
1985) (contacts were sufficient for specific jurisdiction); RAR,
Inc., 107 F.3d 1272 (personal jurisdiction did not exist);
Central States, Southeast and Southwest Areas v. Reimer Express
World Corp., 230 F.3d 934 (7th Cir. 2000) (personal jurisdiction did not exist); FMC Corp. v.
Varonos, 892 F.2d 1308 (7th Cir. 1990) (contacts were sufficient
for specific jurisdiction).
The second part of the constitutional due process inquiry is
fairness: whether the exercise of personal jurisdiction over
Gigantex under these circumstances would offend "traditional
notions of fair play and substantial justice." Asahi,
480 U.S. at 113-14 (citing International Shoe, 326 U.S. at 316). The
reasonableness of the exercise of jurisdiction over Gigantex
depends on multiple factors. The court considers (1) the burden
on the defendant of litigating in the forum state; (2) the
interests of the forum state; (3) the plaintiff's interest in
obtaining relief; (4) the interstate judicial system's interest
in obtaining the most efficient resolution of controversies; and
(5) the shared interest of the states in furthering fundamental
substantive policies. Asahi, 480 U.S. at 113; Mid-America
Tablewares, Inc. v. Mogi Trading Co., 100 F.3d 1353, 1362 (7th
The burden on Gigantex is substantial. Compelling a foreign
company to defend itself in a state where it does not even have
"minimum contacts" is an unfair burden. Haggerty Enterprises,
Inc., 2001 WL 968592, at *7. "[T]he unique burdens placed upon
one who must defend oneself in a foreign legal system should have
significant weight in assessing the reasonableness of stretching
the long arm of personal jurisdiction over national borders."
Asahi, 480 U.S. at 114. "Great care and reserve should be
exercised when extending our notions of personal jurisdiction
into the international field." Id. at 115.
Neither party has a substantial interest in adjudicating the
case in Illinois. Neither McGill nor Gigantex is an Illinois
resident, nor have any relevant transactions or conduct occurred
in Illinois. Because McGill is not an Illinois resident,
Illinois' legitimate interests in the dispute are diminished.
Asahi, 480 U.S. at 114; Hot Wax, Inc., 1999 WL 183776, at *7
(Illinois does not have a substantial interest in protecting the rights of parties located outside its
borders). Finally, litigating in Illinois would not obtain
efficient resolution of this matter. The parties and all
witnesses and documentary evidence are located outside Illinois.
Considering the international context, the heavy burden on the
foreign defendant, and McGill's lack of interest in Illinois, the
exercise of personal jurisdiction by an Illinois court over
Gigantex would be unfair.
McGill has the burden of demonstrating that Gigantex is subject
to personal jurisdiction in the Northern District of Illinois. To
that end, McGill has failed to identify facts that would show
Gigantex is subject to the jurisdiction of this court.
Accordingly, Gigantex's motion to dismiss for lack of personal
jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) must be
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