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Walker v. Macy's Merchandising Group, Inc.

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

October 12, 2016

NORMA WALKER, Plaintiff,
v.
MACY'S MERCHANDISING GROUP, INC., WALMART STORES, INC., REX GARMENTS LTD., and CHARLES KOMAR & SONS, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          Ruben Castillo, Chief Judge

         Norma Walker ("Plaintiff) brings her fourth amended complaint against Macy's Merchandising Group, Inc. ("MMG"), Walmart Stores, Inc. ("Walmart"), Rex Garments Ltd. ("Rex"), and Charles Komar & Sons, Inc. ("Komar") (collectively "Defendants"). (R. 69, Fourth Am. Compl.) Plaintiff alleges numerous strict products-liability and breach of warranty claims against Defendants, seeking to recover for injuries she sustained when her clothing caught fire. (Id.) Presently before the Court is Rex's motion to dismiss Counts I through VI for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). (R. 98, Mot.) For the reasons stated below, the Court grants Rex's motion.

         BACKGROUND

         At some time before January 14, 2014, Plaintiff purchased a Style & Co. Sport brand jacket from a Macy's retail store located in Cook County, Illinois. (R. 69, Fourth Am. Compl. ¶ 17.) Plaintiffs daughter also purchased two sets of Secret Treasures sleepwear, each consisting of a shirt and pants, from a Walmart retail store prior to the incident. (Id. ¶ 19.) Plaintiffs daughter gave one of the sleepwear sets to Plaintiff. (Id.) On January 14, 2014, Plaintiff was wearing the jacket and the sleepwear while cooking on her stove when the clothing caught fire. (Id. ¶¶ 21-22.) Although Plaintiff attempted to extinguish the flames, she claims that the clothing burned so rapidly that she suffered extensive burns to numerous parts of her body, was hospitalized for months, underwent multiple surgeries, and then spent additional months in rehabilitation therapy. (Id. f¶ 23-25.)

         Plaintiff filed suit in the Circuit Court of Cook County on February 28, 2014, asserting products-liability and breach of warranty negligence claims against Macy's Retail Holdings, Inc. and Walmart.[1] (R, 1-1, Compl.) Waimart removed the lawsuit to this District pursuant to 28 U.S.C. § 1441(b) and 28 U.S.C. § 1332. (R. 1, Notice of Removal.) Plaintiff subsequently filed a motion to remand to state court, (R. 17, Mot. to Remand at 1-2), which this Court denied, (R. 30, Order). The Court dismissed Plaintiffs initial state complaint without prejudice, (R. 16, Min. Order), and granted Plaintiff leave to amend her subsequent federal complaint, (R. 21, Min. Order). On January 11, 2016, Plaintiff filed her fourth amended complaint, which names Rex and Korman as Defendants for the first time. (R. 69, Fourth Am. Compl.) Plaintiffs fourth amended complaint alleges that Rex, a Hong Kong corporation, manufactured the jacket worn during the incident, (id. ¶¶ 8-9), while Korman, a New York corporation, made the sleepwear, (id. ¶¶ 11-12).

         Plaintiff brings three strict products-liability counts against Rex for the allegedly defective manufacturing and design of the sport jacket, and for the alleged defect of the jacket due to inadequate warning. (Id. ¶¶ 27-53.) Plaintiffs additional three counts against Rex allege breach of express warranty of fitness, breach of implied warranty of fitness, and negligence. (Id. If 54-78.) Rex filed the present Rule 12(b)(2) motion to dismiss on April 1, 2016.[2] (R. 98, Mot. at 1-2.) Rex argues that because it has no presence in or contacts with Illinois, this Court cannot lawfully exercise personal jurisdiction over it. (Id. at 1.) Plaintiff argues that this Court can properly exercise personal jurisdiction over Rex pursuant to the "stream of commerce" doctrine. (R. 114, Resp. at 2.)

         LEGAL STANDARD

         Personal jurisdiction refers to a court's "power to bring an individual into its adjudicative process." N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014). A district court exercising diversity jurisdiction applies the personal jurisdiction rules of the state in which it is located. Philos Techs., Inc. v. Philos & D, Inc., 802 F.3d 905, 912 (7th Cir. 2015) (citation omitted). This Court can thus exercise personal jurisdiction only to the extent that Illinois courts are permitted to do so under the Illinois long-arm statute.[3] See Id. A complaint does not need to include facts that allege personal jurisdiction. Purdue Research Found, v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). However, a defendant may move for dismissal for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). Fed.R.Civ.P. 12(b)(2).

         If a defendant moves for dismissal based on a lack of personal jurisdiction, "the plaintiff bears the burden of demonstrating the existence of jurisdiction." Kipp v. Ski Enter. Corp of Wis., Inc., 783 F.3d 695, 697 (7th Cir. 2015) (citation omitted). Absent an evidentiary hearing, the plaintiffs burden is only to establish a prima facie case of personal jurisdiction. Id. at 695. When ruling on a Rule 12(b)(2) motion to dismiss, the Court accepts all well-pleaded allegations as true, but may also consider outside materials such as affidavits. See Felland v. Clifton, 682 F.3d 665, 672 (7th Cir. 2012). If the defendant submits declarations or other outside materials challenging personal jurisdiction, the plaintiff has an obligation to submit affirmative evidence supporting the exercise of jurisdiction. Purdue Research Found, 338 F.3d at 782-83. Although disputes must be resolved in the plaintiffs favor, unrefuted assertions contained in the defendant's affidavit will be accepted as true. GCIU-Emp'r Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009).

         ANALYSIS

         The Due Process Clause limits when a state may exercise personal jurisdiction over out-of-state defendants. Jennings v. AC Hydraulic A/S, 383 F.3d 546, 549 (7th Cir. 2004) (citing Asahi Metal Indus. Co. v. Super. Ct. of Cal, 480 U.S. 102, 108 (1987)). The Clause "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." N. Grain Mktg., 743 F.3d. at 492 (quoting Int'l Shoe Co. v. Wash. Office of Unemployment Comp. & Placement, 326 U.S. 310, 319 (1945)). A court's exercise of personal jurisdiction is thus proper when the defendant has "minimum contacts with the [forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Philos, 802 F.3d at 913 (quoting Int'l Shoe Co., 326 U.S. at 316).

         Courts recognize two distinct forms of personal jurisdiction: general and specific. Kipp, 783 F.3d at 697 (citing Daimler AG v. Bauman, 134 S.Ct. 746, 751 (2014)). "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." Tamburo v. Dworkin, 601 F.3d 693, 701 (7th Cir. 2010). General jurisdiction applies to all suits regardless of whether they arise out of the defendant's forum-related activity. Daimler AG, 134 S.Ct. at 754. However, it can be exercised only when the defendant has such "continuous and systematic" contacts with the forum state that he or she can be deemed "essentially at home" in the forum state. Id. (citation omitted). "The threshold for general jurisdiction is high, " because "the contacts must be sufficiently extensive and pervasive to approximate physical presence." Tamburo, 601 F.3d at 701. Thus, "isolated or sporadic contacts-such as occasional visits to the forum state" are insufficient to support the exercise of jurisdiction. Id. A foreign corporation is considered "at home" in its state of incorporation and its principal place of business. Advanced Tactical Ordnance Sys. v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th Cir. 2014). Specific jurisdiction is more limited, and requires a plaintiff to show that the controversy between the parties directly arises out of the defendant's "forum-related activity." Id.

         In support of its motion, Rex submits a declaration from Chow Yick Ping, Rex's managing director, attesting that it is a "Hong Kong Limited Company, " located in Hong Kong, and supplying garments that are manufactured in Hong Kong and China. (R. 99-1, Ping Decl. ¶¶ 4-6.) Ping attests that Rex is not registered or incorporated in Illinois, does not have any offices, employees, or property in Illinois, and has never entered into a contract with any party in Illinois. (Id. ¶¶ 7-10, 14.) He attests that Rex has supplied garments to MMG, including one of the garments at issue in this case. (Id. ¶¶16-17.) This garment was manufactured by a company located in Fosham Guangdong, China, and Rex shipped it to Yantian, China, to be delivered to MMG. (Id. ¶ 19.) From Yantian, Rex has no control or knowledge of where its garments would be ultimately sold by distributors, though it believes that MMG shipped the garments from Yantian to Los Angeles. (Id. ¶¶ 20-21.)

         Based on these facts, which are uncontradicted by Plaintiff, Rex argues that its contacts with Illinois are too limited to support the exercise of personal jurisdiction. (R. 99, Mem. at 6-7.) Plaintiff disagrees, arguing that Rex's actions are sufficient to establish specific jurisdiction in Illinois under the stream-of-commerce doctrine. (R. 114, Resp. at 5-6.) Although Plaintiff does not explicitly address general jurisdiction, she does not argue-and this Court cannot discern any basis for concluding-that a company based and incorporated in Hong Kong, with no property or direct business ties to Illinois, could be deemed "at home" in Illinois. See Purdue Research, 338 F.3d at 787 (holding that for general jurisdiction to exist over a nonresident defendant, his or her contacts with the forum state "must be so extensive to be ...


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