JOHN RUSSELL, as Ex'r of the Estate of Michael Russell, Deceased, Appellee,
After the fatal crash of a helicopter, a claim against the French maker of its custom tail-rotor bearing was not lacking in specific personal jurisdiction where, although defendant did not have any direct U.S. customers for its helicopter parts, which were sold through an out-of-state distributor, there were minimum contacts bringing it within the long-arm statute by virtue of multiple sales of its products in Illinois and regular business dealings with an Illinois company, and jurisdiction was reasonable.
Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Jeffrey Lawrence, Judge, presiding.
Robert Marc Chemers and Scott L. Howie, of Pretzel & Stouffer, Chtrd., of Chicago, and Lisa J. Savitt and Joshua M. Kaplowitz, of Crowell & Moring LLP, of Washington D.C., for appellant.
Todd A. Smith and Brian LaCien, of Power Rogers & Smith, P.C., of Chicago, for appellee.
CHIEF JUSTICE KILBRIDE delivered the judgment of the court, with opinion. Justices Freeman, Karmeier, Burke, and Theis concurred in the judgment and opinion.
KILBRIDE Chief Justice.
¶ 1 This is a products liability action arising from a fatal helicopter crash that occurred in Illinois. Plaintiff sought recovery from a number of entities connected to the accident, including defendant SNFA, a French company that manufactured a custom tail-rotor bearing for the helicopter involved in the crash.
¶ 2 Defendant moved to dismiss plaintiff's action, arguing that Illinois lacked personal jurisdiction over it. The circuit court of Cook County agreed with defendant's jurisdictional challenge and dismissed the action. On appeal, the appellate court reversed, finding that defendant was subject to specific personal jurisdiction in Illinois. 2011 IL App (1st) 093012-B, ¶ 27. For the following reasons, we affirm the judgment of the appellate court.
¶ 3 I. BACKGROUND
¶ 4 On January 28, 2003, plaintiff-decedent Michael Russell, the sole occupant and pilot of an Agusta 109C helicopter, died after his helicopter crashed in Illinois. Decedent, a resident of Georgia, was living in Illinois and working for Air Angels, Inc., an Illinois air ambulance service operating in the Chicago area, when the fatal accident occurred.
¶ 5 Plaintiff's helicopter was manufactured by Agusta S.p.A. in Italy in 1989. The helicopter contained seven tail-rotor bearings custom made by defendant for that specific model. Between 1989 and 1998, the helicopter had multiple owners and operators.
¶ 6 In 1998, a German company sold the helicopter to Metro Aviation in Louisiana. On two separate instances in 1998 and in 2002, Metro Aviation replaced some of the helicopter's tail-rotor bearings. Metro Aviation purchased the replacement bearings from Pennsylvania-based Agusta Aerospace Corporation, a wholly owned subsidiary of Agusta. As with the original bearings, the replacement bearings were manufactured by defendant in France. Thereafter, Metro Aviation sold the helicopter to plaintiff's employer. It is uncontested that plaintiff's helicopter contained tail-rotor bearings manufactured by defendant when it crashed in Illinois.
¶ 7 Plaintiff's estate filed a multicount complaint against numerous defendants, alleging that his helicopter suffered a failure of its tail-rotor bearing, causing it to spin out of control and crash. In relevant part, plaintiff raised strict liability and negligence claims against defendant. Plaintiff filed similar claims against: (1) Metro Aviation, the Louisiana company that sold the helicopter to plaintiff's employer; (2) Agusta S.p.A. (Agusta), the Italian manufacturer of the helicopter; and (3) Agusta Aerospace Corporation (AAC), the Pennsylvania-based distributor and wholly owned subsidiary of Agusta that sold the replacement bearings manufactured by defendant to Metro Aviation.
¶ 8 Thereafter, defendant moved to dismiss plaintiff's claims against it for lack of in personam jurisdiction under section 2-301 of the Code of Civil Procedure (735 ILCS 5/2-301 (West 2006)). Specifically, defendant argued that it was not subject to personal jurisdiction in Illinois because there was no allegation of wrongdoing in Illinois by defendant, a French company lacking the requisite contacts with Illinois.
¶ 9 To respond to defendant's motion to dismiss, plaintiff sought jurisdictional discovery. Plaintiff obtained information about defendant's sales, marketing, and distribution activities. Plaintiff also obtained similar information about Agusta and AAC.
¶ 10 It was established during discovery that defendant is a French corporation manufacturing custom-made bearings for the aerospace industry. Specifically, defendant makes bearings for auxiliary power units used in airplanes and for fixed-winged aircraft engines. Defendant also makes bearings for helicopters. Defendant conducts business internationally, with customers in Europe and the United States. Defendant, however, does not have any offices, assets, property, or employees in Illinois, and defendant is not licensed to do business in Illinois.
¶ 11 Agusta, the manufacturer of plaintiff's helicopter, is based in Italy. AAC, the wholly owned subsidiary of Agusta, is located in Pennsylvania and distributes helicopters and component parts internationally and in the United States. Eight different models of Agusta helicopters with defendant's bearings are available for sale in the United States.
¶ 12 In plaintiff's interrogatory to AAC, plaintiff requested information about AAC's distribution or sales of defendant's products in Illinois in the last 10 years. In response, AAC stated that it "sold approximately 2, 198 [defendant]-produced parts between 2000 and the date of its response, March 26, 2007." During the past 10 years, five Agusta helicopters were sold to customers located in Illinois. AAC also provided customer service and parts to operators of Agusta aircraft in Illinois.
¶ 13 Defendant sold various custom-made helicopter tail-bearings to Agusta, including the type at issue here. Defendant acknowledged that it was aware that Agusta incorporated defendant's bearings into the helicopters sold by Agusta. Agusta provided defendant with precise specifications and then defendant manufactured the tail-rotor bearings accordingly. Agusta also kept some of defendant's bearings to be sold individually. Although defendant knew that Agusta intended to sell defendant's bearings both in helicopters or as individual parts, defendant denied specific knowledge of the final destination of its custom-made helicopter tail-rotor bearings. Defendant does not have any direct United States customers for its custom-made helicopter bearings.
¶ 14 Similar to its helicopter bearings, defendant manufactures bearings for airplanes and fixed-wing aircraft to its customers' specifications. Defendant sells those bearings to customers throughout Europe and to three companies in the United States: (1) Rolls Royce, a jet-engine manufacturer in Indiana; (2) Honeywell, a military and engine manufacturer in Arizona; and (3) Hamilton Sundstrand, an aerospace manufacturer in California. As with its other products, defendant does not exercise control over the products its customers incorporate its bearings into.
¶ 15 Relevant to the issue here, defendant disclosed in an interrogatory that it had a business relationship with Hamilton Sundstrand in Rockford, Illinois, since 1997. Hamilton Sundstrand is a manufacturer of aerospace machinery and is a part of the United Technology Corporation. Defendant explained that it sold Hamilton Sundstrand aerospace bearings, but not the same model or type of bearings in defendant's helicopter.
¶ 16 Plaintiff took two depositions of defendant's employee, Frederic Ponchon, who was responsible for selling defendant's products in the United States, Canada, and certain parts of Asia and Europe. Ponchon explained that Hamilton Sundstrand had multiple locations throughout the United States, including divisions or locations in Rockford, Illinois, and San Diego, California. Ponchon personally attended at least three meetings with Hamilton Sundstrand in Rockford about defendant's products and Hamilton Sundstrand's payment systems. Ponchon further explained that he sought to sell a certain type of bearing to the Rockford location but was unable to complete the sale.
¶ 17 Ponchon stated that defendant sold its aerospace bearings to Hamilton Sundstrand, who incorporated defendant's bearings into Hamilton Sundstrand aerospace products, including auxiliary power units. Ponchon claimed that defendant's bearings sold to Hamilton Sundstrand were shipped to San Diego and that the Rockford location only processed payments.
¶ 18 A purchasing agreement between defendant and Hamilton Sundstrand lists Rockford, Illinois, as the buying and buyer agent location. Similarly, the proprietary sharing agreement or contract between defendant and Hamilton Sundstrand identifies Hamilton Sundstrand's place of business to be "4747 Harrison Avenue, Rockford, Illinois 61106" and states that proprietary information disclosed by defendant will be shared with an employee located in Rockford, Illinois. The proprietary agreement expressly provides that "[t]his agreement shall be governed by and interpreted under the internal laws of the state of Illinois, U.S.A."
¶ 19 When asked about defendant's business relationship with Agusta, Ponchon acknowledged that he knew that Agusta sold helicopters that contained defendant's bearings in the United States. Ponchon denied, however, knowing whether any Agusta helicopters were sold in Illinois.
¶ 20 Plaintiff also obtained defendant's invoices and sales documents on defendant's sales to Hamilton Sundstrand. During an approximately four-year period, between July 2001 and February 2005, defendant sold products totaling approximately $1 million to Hamilton Sundstrand in a number of separate shipments. The invoices listed Hamilton Sundstrand's business address as Rockford, Illinois, and a delivery address in San Diego, California.
¶ 21 Ultimately, the circuit court granted defendant's motion to dismiss for lack of jurisdiction. The court concluded that defendant did not have sufficient contacts with Illinois.
¶ 22 On appeal, the appellate court reversed the circuit court's judgment. Russell v. SNFA, 408 Ill.App.3d 827 (2011). This court, however, vacated the appellate court's judgment and directed it to reconsider in light of the United States Supreme Court's decisions in Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S.__, 131 S.Ct. 2846 (2011), and J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. __, 131 S.Ct. 2780 (2011) (plurality op.). Russell v. SNFA, No. 112323 (Sept. 28, 2011) (supervisory order).
¶ 23 On reconsideration, the appellate court again reversed the circuit court's dismissal for lack of personal jurisdiction, finding that Goodyear and McIntyre supported its original decision. 2011 IL App (1st) 093012-B, ¶ 2. The court relied heavily on Rockwell International Corp. v. Costruzioni Aeronautiche Giovonni Agusta, S.p.A., 553 F.Supp. 328 (E.D. Pa. 1982), a case involving almost identical facts, in finding that Illinois' exercise of jurisdiction over defendant was proper. 2011 IL App (1st) 093012-B, ¶ 36. The court further found that its holding was consistent with the United States Supreme Court's observation in McIntyre that "distribution by an American distributor in the states could be sufficient to establish jurisdiction, given the right set of facts." 2011 IL App (1st) 093012-B, ¶ 45.
¶ 24 This court allowed defendant's petition for leave to appeal. Ill. S.Ct. R. 315 (eff. Feb. 26, 2010).
¶ 25 II. ANALYSIS
¶ 26 On appeal, defendant argues that the appellate court erred when it reversed the circuit court's judgment dismissing plaintiff's action for lack of personal jurisdiction. Defendant contends that Illinois cannot exercise specific personal jurisdiction because defendant lacks the requisite "minimum contacts" with Illinois, the accident did not arise from defendant's contact with Illinois, and it would be unreasonably burdensome to require defendant to defend itself in Illinois. Defendant asserts that the appellate court misinterpreted McIntyre and erroneously relied on Rockwell, a 1982 Pennsylvania federal case employing a standard rejected by McIntyre. Defendant further argues that Illinois cannot exercise general personal jurisdiction because there is no evidence that defendant had the necessary "continuous and systemic" contacts with Illinois.
¶ 27 Plaintiff responds that the appellate court properly found that defendant was subject to specific personal jurisdiction in Illinois under applicable provisions of the Illinois long-arm statute (735 ILCS 5/2-209(a), (c) (West 2002)). Plaintiff argues that the appellate court's judgment comports with federal and Illinois due process concerns because defendant has more than sufficient minimum contacts with Illinois, the cause of action arose from or relates to those contacts, and it is reasonable to require defendant to litigate in Illinois. Plaintiff further argues that defendant is subject to general personal jurisdiction because it has continuous and systemic contacts with Illinois.
¶ 28 It is settled that the plaintiff has the burden to establish a prima facie basis to exercise personal jurisdiction over a nonresident defendant. Wiggen v. Wiggen, 2011 IL App (2d) 100982, ¶ 20. When, as here, the circuit court decides a jurisdictional question solely on documentary evidence, without an evidentiary hearing, our review is de novo. Id. ¶ 20. Any conflicts in the pleadings and affidavits must be resolved in the plaintiff's favor, but the defendant may overcome plaintiff's prima facie case for jurisdiction by offering uncontradicted evidence that defeats jurisdiction. Id. ¶ 20.
¶ 29 Section 2-209 of the Code of Civil Procedure, commonly referred to as the Illinois long-arm statute, governs the exercise of personal jurisdiction by an Illinois court over a nonresident and is divided into three subsections identifying multiple grounds for exercising jurisdiction. See 735 ILCS 5/2-209(a), (b), (c) (West 2002). Historically, this court has employed a two-part analysis in deciding a jurisdictional issue under the long-arm statute, first determining whether a specific statutory provision of section 2-209 has been satisfied, and then determining whether the due process requirements of the United States and Illinois Constitutions have been met. Rollins v. Ellwood, 141 Ill.2d 244, 275 (1990).
¶ 30 The year before Rollins was decided, however, the General Assembly substantively amended the long-arm statute by adding subsection (c), effective September 7, 1989. 735 ILCS 5/2-209(c) (West 2002). Subsection (c), commonly referred to as the "catch-all provision, " broadly provides that a court "may also 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) (West 2002). In consideration of that amendment, our appellate court has found that Rollins's two-part analysis is no longer necessary when subsection (c) is invoked because it constitutes an independent basis for exercising personal jurisdiction that effectively collapses the jurisdictional inquiry into the single issue of whether a defendant's Illinois contacts are sufficient to satisfy federal and Illinois due process. See, e.g., Soria v. Chrysler Canada, Inc., 2011 IL App (2d) 101236, ¶ 16; Morgan, Lewis & Bockius LLP v. City of East Chicago, 401 Ill.App.3d 947, 952 (2010); Old Orchard Urban Ltd. Partnership v. Harry Rosen, Inc., 389 Ill.App.3d 58, 64 (2009); Knaus v. Guidry, 389 Ill.App.3d 804, 814 (2009); Kostal v. Pinkus Dermatopathology Laboratory, P.C., 357 Ill.App.3d 381, 386-87 (2005); Alderson v. Southern Co., 321 Ill.App.3d 832, 856 (2001); Weiden v. Benveniste, 298 Ill.App.3d 531, 533 (1998); see also Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010) (concluding that under subsection (c) "the state statutory and federal constitutional inquiries merge"). We agree. Thus, when, as here, a plaintiff argues that personal jurisdiction is proper under subsection (c) of the Illinois long-arm statute, the sole issue before the court is whether the nonresident defendant's connection or contact with Illinois is sufficient to satisfy federal and Illinois due process.
¶ 31 Before turning to that issue, though, we must clarify another part of our decision in Rollins. In Rollins, we observed that "Illinois' long-arm statute is to be given a definite meaning and scope which does not fluctuate with every new pronouncement on the limits of Federal due process." Rollins, 141 Ill.2d at 271 (citing Green v. Advance Ross Electronics Corp., 86 Ill.2d 431, 436 (1981)). We instructed courts deciding whether personal jurisdiction should be exercised under the long-arm statute to consider the Illinois long-arm statute "separately" from federal due process standards. Rollins, 141 Ill.2d at 271. Consequently, we concluded that the Illinois long-arm statute "may well restrict the power that the courts of this State have to bring nonresidents before them to a greater extent than do the Federal due process clause and the 'minimum contacts' standard developed over the years by the Supreme Court." Rollins, 141 Ill.2d at 271-72. Rollins suggests that, in the context of personal jurisdiction over nonresident defendants, due process protection under the Illinois long-arm statute may be greater than federal due process protections.
¶ 32 Since our decision in Rollins, however, there have been no decisions from this court or the appellate court identifying any substantive difference between Illinois due process and federal due process on the issue of a court's exercising personal jurisdiction over a nonresident defendant. When interpreting Illinois law on personal jurisdiction, the Seventh Circuit has observed that "in no case post-Rollins has an Illinois court found federal due process to allow the exercise of jurisdiction in a case where Illinois limits [or] prohibit[s] it." Hyatt International Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2002). Similarly, also in the context of the Illinois long-arm statute, a federal district court has concluded "that it is only in the rare (and perhaps hypothetical) case that the federal due process analysis might actually differ from the Illinois due process analysis." GMAC Real Estate, LLC v. E.L. Cutler & Associates, Inc., 472 F.Supp.2d 960, 964 (N.D. Ill. 2006).
¶ 33 Defendant, as the party challenging personal jurisdiction here, does not argue that it is entitled to greater due process protections under the Illinois due process clause and long-arm statute. Therefore, we do not need to determine in this case the extent, if any, that Illinois due process protections differ from federal due process protections on the issue of personal jurisdiction. Accordingly, we will not consider our long-arm statute separately from federal due process concerns.
¶ 34 The United States Supreme Court has observed that "[t]he Due Process Clause of the Fourteenth Amendment sets the outer boundaries of a state tribunal's authority to proceed against a defendant." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S.,, 131 S.Ct. 2846, 2853 (2011). In all cases involving a nonresident defendant, before a court may subject the defendant to a judgment in personam, "due process requires that the defendant have certain minimum contacts with the forum State such that maintenance of the suit there does not offend 'traditional notions of fair play and substantial justice.' " Wiles v. Morita Iron Works Co., 125 Ill.2d 144, 150 (1988) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). We therefore ...