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Griffith Laboratories, Inc. v. Kancor Ingredients LTD

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

February 8, 2017

GRIFFITH LABORATORIES INC., et al., Plaintiffs,
v.
KANCOR INGREDIENTS LTD., et al., Defendants. KANCOR INGREDIENTS LTD., Crossclaim Plaintiff,
v.
BALMER LAWRIE VAN LEER LTD., Crossclaim Defendant.

          MEMORANDUM OPINION AND ORDER

          JORGE L. ALONSO United States District Judge

         Before the Court is defendant Balmer Lawrie Van Leer Ltd.'s (“BLVL”) motion to dismiss the first amended complaint and crossclaim [52] pursuant to Federal Rule of Civil Procedure 12(b)(2). For the reasons set forth below, BLVL's motion is granted.

         BACKGROUND

         In this products liability case, plaintiffs Griffith Laboratories and Innova (“Griffith”) allege as follows. In early 2013, defendant Kancor Ingredients Limited (“Kancor”) supplied Griffith with an ingredient (Oleoresin Paprika or “OR Paprika”) for use in liquid pepperoni seasoning that plaintiffs sell to pepperoni manufacturers. (Am. Compl. ¶ 15.) Kancor delivered two specific OR Paprika batches to Griffith in plastic containers manufactured by BLVL. (Id. ¶ 16.) Those two OR Paprika batches were used to make two seasoning lots that then ended up in five different liquid pepperoni seasoning lots. (Id. ¶ 17.) From there, the five liquid seasoning lots were sent to two of plaintiffs' customers and used to flavor those customers' meat products that were later used on an unnamed pizza franchisor's pizzas. (Id. ¶ 18.) In February 2013, two of Griffith's customers informed Griffith that small pieces of plastic had been found in their liquid pepperoni seasoning lots. (Id. ¶¶ 19-20.) Accordingly, Griffith screened its remaining inventory of OR Paprika and found more plastic pieces. (Id. ¶ 21.) Griffith had those plastic pieces tested and confirmed that they were polypropylene copolymer, of which they believe the BLVL containers, used to ship the OR Paprika, were made. (Id. ¶ 22.) In mid-2013, after plaintiffs visited Kancor and BLVL's manufacturing facilities and observed similar pieces of plastic lying on and near the filling line, plaintiffs paid their two customers over $900, 000 to settle the claims made against them over the plastic contamination. (Id. ¶¶ 23-26.) Griffith now seeks contribution from Kancor and BLVL under the Illinois Joint Tortfeasor Contribution Act, for the claims paid and profits lost as a result of the plastic contamination. (Id. ¶¶ 28-29.)

         In its crossclaim against BLVL, Kancor alleges that if the OR Paprika delivered to Griffith contained plastic particles, that contamination was caused by defects in the containers Kancor received from BLVL. (Crossclm. ¶ 5.) Kancor seeks indemnification for all losses, costs, and damages caused by BLVL's allegedly defective containers. (Id. ¶¶ 13-14.)

         STANDARD

         “A motion to dismiss pursuant to Rule 12(b)(2) tests whether a federal court has personal jurisdiction over a defendant.” In re First Farmers Fin. Litig., No. 14-CV-7581, 2017 WL 85442, at *3 (N.D. Ill. Jan. 10, 2017). If a defendant moves to dismiss under Rule 12(b)(2), the plaintiff bears the burden of making a prima facie case for personal jurisdiction. uBID, Inc., v. Go Daddy Grp., Inc., 623 F.3d 421, 423-24 (7th Cir. 2010). The Court takes “the plaintiff's asserted facts as true and resolve[s] any factual disputes in its favor.” Id. If, however, the plaintiff does not refute facts contained in the defendant's affidavit, the Court will accept those facts as true. GCIU-Emp'r Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009).

         DISCUSSION

         In support of its motion to dismiss, BLVL asserts that the Court does not have general personal jurisdiction over it because it is headquartered and incorporated in India. (Def.'s Mem. at 1.) BLVL also argues it is not subject to specific personal jurisdiction because BLVL did not purposely avail itself of the Illinois market, the claims against it do not arise out of its contacts with Illinois, and exercising jurisdiction over it would offend traditional notions of fair play and substantial justice. (Id. at 2.)

         General Jurisdiction

         BLVL relies on its location and headquarters and also asserts that the Court should not exercise general jurisdiction over it based on Greif Inc. (a BLVL corporate “grandparent”) and American Flange's (a BLVL customer) contacts with Illinois. (Def.'s Mem. at 7-8.) BLVL argues that it has no operations in Illinois and that its sale of steel closures to American Flange in Illinois does not trigger personal jurisdiction here. (Id. at 8-10.) Griffith disagrees, arguing that 1.92% of BLVL's annual sales are made to American Flange and constitute continuous and systematic sales to Illinois sufficient to justify its filing suit here. (Griffith Resp. at 2-3.) Kancor concurs and asserts that in the first quarter of 2016, BLVL shipped more than $300, 000 of products to Illinois. (Kancor Resp. at 2.) Additionally, Griffith asserts that BLVL promotes its products in the United States through industry websites. (Griffith Resp. at 2.)[1] Griffith also contends that Greif Inc., an Ohio corporation, became BLVL's partner at some unspecified point and owns 48% of BLVL. (Id. at 3-4.)[2] Griffith argues that BLVL has links to Illinois by virtue of Greif Inc.'s sales facility in Alsip, Illinois as well as BLVL's division Tri-Sure, which has an office in Carol Stream, Illinois. (Id. at 4-5.)[3] Additionally, Griffith asserts that BLVL continued to take orders and sell plastic containers to Kancor after being put on notice of the plastic contamination losses and with specific knowledge that some of the containers would be sent to Illinois. (Id. at 6.) Finally, Griffith disputes that BLVL would suffer a hardship by having to litigate this case here. (Id. at 7-8.)[4] In its reply, BLVL asserts that plaintiffs' arguments rely on outdated law that is no longer applicable. (Def.'s Reply at 4, 6.) Further, BLVL argues that Griffith has not introduced any evidence demonstrating that BLVL exercises a high degree of control over any other entity or vice versa and it therefore cannot be subject to jurisdiction based on Greif Inc. or American Flange/Tri-Sure's contacts with Illinois. (Id. at 7.)[5]

         “General jurisdiction is all-purpose; it exists only when the party's affiliations with the State in which suit is brought are so constant and pervasive as to render it essentially at home in the forum State.” Kipp v. Ski Enter. Corp. of Wis., Inc., 783 F.3d 695, 697-98 (7th Cir. 2015) (internal quotations and citations omitted). In two recent Supreme Court decisions, the Court “made clear that only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there.” Daimler AG v. Bauman, 134 S.Ct. 746, 760 (2014); see also Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (general jurisdiction may be asserted over a foreign corporation when its continuous and systematic affiliations cause it to be at home in the forum State.) “[T]he inquiry under Goodyear is not whether a foreign corporation's in-forum contacts can be said to be in some sense ‘continuous and systematic, ' it is whether that corporation's ‘affiliations with the State are so continuous and systematic as to render it essentially at home in the forum State.'” Daimler, 134 S.Ct. at 761 (quoting Goodyear, 564 U.S. at 919).

         BLVL is an Indian company headquartered in Mumbai. (Def.'s Mem. Ex. 1, Silva Decl. ¶ 4.)[6] It is owned by Greif International (a Dutch corporation)[7] and Balmer Lawrie (an Indian corporation). (Id. ¶ 5; Suppl. Silva Decl. ¶¶ 7-8; Def.'s Reply Ex. A at 29, 30, 44, 79.)[8] None of these entities are at home in Illinois. Neither BLVL's annual sales to American Flange (a Delaware corporation registered in Illinois)[9] nor its web presence render BLVL at home in Illinois. See Nicholson v. E-Telequote Ins. Inc., No. 14-CV-4269, 2015 WL 5950659, at *4 (N.D. Ill. Oct. 13, 2015) (“[D]oing 10 percent of your business in Illinois does not make a corporation at home in Illinois.”); see also be2 LLC v Ivanov, 642 F.3d 555, 558-59 (“Beyond simply operating an interactive website that is accessible from the forum state, a defendant must in some way target the forum state's market.”). Accordingly, the Court does not have general jurisdiction over BLVL. See Siswanto v. Airbus, 153 F.Supp.3d 1024, 1029 (N.D. Ill. 2015) (sales in the forum unrelated to the underlying issue did not establish personal jurisdiction.)

         Specific ...


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