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Tile Unlimited, Inc. v. Blanke Corp.

United States District Court, N.D. Illinois, Eastern Division

June 9, 2014

TILE UNLIMITED, INC., individually, and as a representative of similarly-situated persons, Plaintiff,
v.
BLANKE CORP.; VIRGINIA TILE, INC.; BLANKE GMBH; and INTERPLAST KUNSTSTOFFE, GMBH, Defendants

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[Copyrighted Material Omitted]

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For Tile Unlimited, Inc., both individually and as a representative of all other persons similarly situated, Plaintiff: John Stephen Xydakis, Law Office of John S. Xydakis, P.C., Chicago, IL; Thomas Francis Courtney, Jr, Thomas F. Courtney & Associates, Palos Heights, IL.

For Blanke GmbH, Defendant, Cross Defendant: Federick W. Reif, LEAD ATTORNEY, PRO HAC VICE, LeClairRyan, A Professional Corporation, New York, NY; Joseph Patrick Pozen, LEAD ATTORNEY, Bates Carey Nicolaides LLP, Chicago, IL; Debra Tama, PRO HAC VICE, LeClairRyan, New York, NY.

For Virginia Tile, Inc, Defendant, Cross Claimant, Cross Defendant: Frederick A Berg, LEAD ATTORNEY, PRO HAC VICE, Kotz, Sangster, Wysocki & Berg, P.C., Detroit, MI; Elizabeth Marie Schutte, Belongia, Shapiro & Franklin, LLP, Chicago, IL; Kenneth H Adamczyk, PRO HAC VICE, Kotz Sangster Wysocki P.C., Detroit, MI; Lynn Abraham Sheehy, PRO HAC VICE, Kotz, Sangster, Wysocki And Berg, P.c., Detroit, MI; Pierre Michael Cristache, Roetzel & Andress, Chicago, IL.

For Blanke Corp., Defendant: George Mario Velcich, Steven Brian Belgrade, LEAD ATTORNEYS, Ross M Kucera, Stephanie Tara Potter, Belgrade & O'Donnell PC, Chicago, IL.

For Interplast Kunststoffe GmbH, Defendant, Cross Defendant: Brenton Warren Vincent, Joshua J. Heidelman, LEAD ATTORNEYS, Bryan Cave LLP, Chicago, IL; Christy L. Anderson, PRO HAC VICE, Bryan Cave Llp, Boulder, CO; Neal S. Cohen, Fox Rothschild LLP, Denver, CO.

For Blanke Corp., Cross Claimant, Cross Defendant: George Mario Velcich, Steven Brian Belgrade, LEAD ATTORNEYS, Ross M Kucera, Belgrade & O'Donnell PC, Chicago, IL.

For Blanke Corp., Cross Defendant: George Mario Velcich, LEAD ATTORNEY, Belgrade & O'Donnell PC, Chicago, IL.

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MEMORANDUM OPINION AND ORDER

Honorable Thomas M. Durkin, United States District Judge.

Tile Unlimited, Inc. filed this class action, products liability lawsuit against the collective Defendants, Virginia Tile, Inc., Blanke Corp. (" Blanke USA" ), Blanke GmbH (" Blanke Germany" ), and Interplast Kunststoff, GmbH (" Interplast" ). R. 73. Virginia Tile has filed a cross-claim against Blanke USA, Blanke Germany, and Interplast. R. 113. Blanke USA has filed a cross-claim against Virginia Tile. R. 88. In response to Tile Unlimited's amended complaint, Blanke Germany and Interplast filed motions to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), R. 228; R. 231, which are now before the Court.[1] For the reasons set forth below, Blanke Germany and Interplast's motions to dismiss are granted, and they are dismissed.

BACKGROUND

Uni-Mat Pro (" Uni-Mat" ) is a " tile underlayment product" that is affixed to the ground before a tile surface is installed. R. 73. The following is an advertisement for the product:

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R. 73-1. According to the amended complaint, Interplast, a German corporation, manufactured Uni-Mat in Germany.[2] Id. ¶ ¶ 3-4. Interplast called the product ISO-DRAIN 3 VLIES GITTER (" Iso-Drain" ), but Blanke Germany sold the product as Uni-Mat. R. 231-1 ¶ 3. The only difference between Uni-Mat and Iso-Drain is the name and the color--Blanke has an exclusive right to distribute a blue version of the product worldwide. R. 253-3 at 120:2-8. Blanke USA, which is incorporated in Delaware and has its principal place of business in Atlanta, Georgia, R. 46, forwarded purchase orders for Uni-Mat in the United States to Blanke Germany (a German corporation), who in turn purchased the product from Interplast and had it shipped directly to Blanke USA, one

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of its subsidiaries,[3] in Georgia. R. 230-1 ¶ 3; R. 230-4 at 76. Once the Uni-Mat reached the Blanke USA warehouse in Georgia, Blanke USA would sell the product to Virginia Tile and other distributers who would distribute the product throughout the United States. R. 73 ¶ ¶ 5-6.

Tile Unlimited, an Illinois corporation with its principal place of business in Illinois, R. 1 ¶ 5, claims that it purchased Uni-Mat from Virginia Tile, a Michigan corporation with its principal place of business in Michigan, id., in August 2008 and installed it at a " new construction residence." R. 73 ¶ ¶ 29, 31. According to Tile Unlimited, the homeowners complained of certain noises emanating from the floor when they walked on the tiled area where Uni-Mat had been installed. Id. ¶ ¶ 34-35. A similar situation occurred at a different " construction residence" in November 2009, id. ¶ ¶ 34-35, and in two custom homes at another " large development" by Portfolio Properties, id. ¶ ¶ 37-40.

As a result of the alleged " audible crunching sound" the product made when walked on, Tile Unlimited filed this class action product liability suit against all the entities up the chain of distribution--Virginia Tile, Blanke USA, Blanke Germany, and Interplast. R. 1; R. 73. It alleges that Uni-Mat was " defective," R. 73 ¶ 1, did not conform to the industry standards for such a product, and was not fit for the ordinary purpose for which Uni-Mat was used. Id. ¶ 42. Blanke Germany and Interplast seek dismissal from the case because they lack sufficient " minimum contacts" with Illinois to be required to defend itself in an Illinois court. R. 228; R. 231.[4]

LEGAL STANDARD

The plaintiff, in this case Tile Unlimited,[5] bears the burden of demonstrating the existence of personal jurisdiction when a defendant moves to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of jurisdiction. Purdue Res. Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). An evidentiary hearing on the matter was not held, so Tile Unlimited is only required to make out a prima facie case of personal jurisdiction to defeat the motion. Northern Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014). As with a Rule 12(b)(6) motion, the Court must " accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff" when assessing its jurisdiction. St. John's United Church of Christ v. City of Chi., 502 F.3d 616, 625 (7th Cir. 2007) (quoting Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999)).

ANALYSIS

Personal jurisdiction encompasses a court's " power to bring a person into its adjudicative process." Black's Law Dictionary 930 (9th ed. 2009). " The court's exercise of jurisdiction over the defendant must be authorized by the terms of the forum state's personal-jurisdiction statute and also must comport with the requirements of the Fourteenth Amendment's Due Process Clause."

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Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012); see also Fed.R.Civ.P. 4(k)(1)(A) (providing that service of process is effective to establish personal jurisdiction over a defendant " who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located" ). Looking first to Illinois law, " [a] court may . . . exercise jurisdiction on any . . . basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States." 735 ILCS 5/2-209(c). Thus, the separate questions regarding whether jurisdiction is proper under Illinois's long-arm statute and the Due Process Clause merge, and jurisdiction will be appropriate provided the federal constitutional requirements are satisfied. See Citadel Group, Ltd. v. Wash. Reg'l Med. Ctr., 536 F.3d 757, 761 (7th Cir. 2008) (explaining that " no case has yet emerged where due process was satisfied under the federal constitution but not under the Illinois constitution" ).

The Due Process Clause of the Fourteenth Amendment " protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful 'contacts, ties, or relations.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Int'l Shoe Co. v. Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). It follows that " [a] court may subject a defendant to judgment only when the defendant has sufficient contacts with the sovereign 'such that the maintenance of the suit does not offend " traditional notions of fair play and substantial justice." '" J. McIntyre Mach., Ltd., v. Nicastro, __ U.S. __, 131 S.Ct. 2780, 2787, 180 L.Ed.2d 765 (2011) (Kennedy, J., plurality opinion)[6] (quoting Int'l Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940))). " The nature of the defendant's contacts with the forum state determines the propriety of personal jurisdiction and also its scope--that is, whether jurisdiction is proper at all, and if so, whether it is general or specific to the claims made in the case." N. Grain Mktg., LLC, 743 F.3d at 492 (quoting Tamburo v. Dworkin, 601 F.3d 693, 701 (7th Cir. 2010)). Here, Tile Unlimited does not contend that Blanke Germany and Interplast are subject to the general jurisdiction of Illinois courts, so the ...


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