Supreme Court: Illinois has jursidiction over French company in products liability suit

Illinois has jurisdiction to hear a products liability suit involving a French manufacturing company, the state Supreme Court has held.

In a 5-1 ruling with one justice not participating, the state high court on April 18 affirmed the ruling of the First District Appellate Court that reversed the Cook County Circuit Court’s dismissal of the suit stemming from a fatal helicopter crash.

The justices’ decision in this case – John Russell, as the executor of the estate of Michael Russell, v. SNFA – was one of six opinions handed down Thursday. The other five came in criminal cases, including one from the Fifth District, People v. Elijah Lacy.

At issue in the products liability case was whether SNFA could be subject to personal jurisdiction in Illinois when there was no allegation of wrongdoing in Illinois by the French company, which made the custom tail-rotor bearing for the helicopter involved in the crash at the crux of the suit.

Chief Justice Thomas Kilbride delivered the court’s opinion. Justice Rita Garman dissented and Justice Robert Thomas took no part in the decision.

On Jan. 28, 2003, Michael Russell, the plaintiff-decedent, died after the Agusta 109C helicopter he was flying crashed in Illinois.

Russell was a resident of Georgia who at the time of the incident was living in Illinois, where he worked for Air Angels Inc., an air ambulance service that operates in the Chicago area.

Following the fatal accident, Russell’s estate filed a multi-count complaint against several defendants, claiming that a failure of his helicopter’s tail-rotor bearing caused it to spin out of control and crash.

The complaint lodged strict liability and negligence claims against SNFA.

It made similar claims against Metro Aviation, a Louisiana-based company that sold the helicopter to Russell’s employer; Agusta S.p.A, the helicopter’s Italian manufacturer; and Agusta Aerospace Corp., a Pennsylvania-based distributor that sold the replacement bearings to Metro Aviation.

SNFA moved to dismiss the claims against it, alleging that it was not subject to personal jurisdiction in Illinois.

Among other findings, jurisdictional discovery requested by SNFA showed that it wasn’t licensed to do business in Illinois, but did have some sort of business relationship with Hamilton Sundstrand in Rockford since 1997.

Granting the company’s motion to dismiss for lack of jurisdiction, the Cook County Circuit Court determined that SNFA did not have sufficient contacts with Illinois.

A panel of the First District Appellate Court reversed the lower court, a decision that the Illinois Supreme Court vacated in a September 2011 supervisory order.

In that order, the high court directed the appeals panel to reconsider its judgment in light of the U.S. Supreme Court’s 2011 rulings in Goodyear Dunlop Tires Operations, S.A. v. Brown and J. McIntyre Machinery, Ltd. v. Nicastro.

The appeals panel, however, reached the same ruling on reconsideration, finding that the pair of U.S. Supreme Court rulings supported the reversal of the circuit court’s dismissal for lack of jurisdiction.

On appeal to the state Supreme Court, SNFA argued that Illinois couldn’t exercise specific personal jurisdiction over it because there was no evidence that it had “minimum” or “the necessary ‘continuous and systemic’ contacts with Illinois.”

It further argued that Illinois didn’t have jurisdiction over SNFA because the accident didn’t arise from the company’s contact with Illinois and that it would be burdensome to require the French company to defend itself in Illinois.

Russell’s estate, however, asserted that the appellate court was right in determining that SNFA was subject to personal jurisdiction in Illinois based on the state’s long-arm statue, Section 2-209 of the Code of Civil Procedure.

It also claimed that SNFA was subject to general jurisdiction because it does have continuous and systematic contacts with Illinois.

In the court’s 40-page opinion that included a dissenting opinion, Kilbride wrote for the majority that Illinois can’t exercise general jurisdiction over SNFA, but that it does have specific jurisdiction over it.

“[T]here is no evidence showing that defendant engaged in the type of permanent and systematic business activity in Illinois that would justify a finding of general jurisdiction,” he explained.

Citing several cases that applied the “stream of commerce theory,” the majority determined that Illinois does have specific personal jurisdiction over SNFA.

Under specific jurisdiction, Kilbride explained that “a nonresident defendant may be subjected to a forum state’s jurisdiction based on certain ‘single or occasional acts’ in the state but only with respect to matters related to those acts.”

Though “the evolution of the stream of commerce theory has not been consistent,” according to the majority court’s opinion, it basically refers to the principle that a person who participates in placing a defective product in the marketplace can be held liable for harm caused by the product.

When it comes to this theory in the case at issue, the majority of the court agreed with the appeals panel that the Agusta defendants operate as an American distributor for SNFA’s tail-rotor bearings in the U.S.

“In other words, the only way that defendant’s product … would ever reach the final consumer, including consumers in the United States and Illinois, was through Agusta and its American Distributor AAC,” Kilbride wrote.

He explained that this, as well as the company’s relationship with a Rockford business, shows that SNFA had minimum contacts with Illinois for it to be subjected to specific personal jurisdiction in the state.

In addition to determining that SNFA had the requisite minimum contacts with Illinois, the majority of the court found that it is reasonable to require SNFA to litigate in Illinois.

“Aside from Illinois and the foreign forum of France, there does not appear to be any other forum that would have interest in this controversy,” Kilbride wrote.

He added, “Because the incident occurred in Illinois and involved an individual living and working in Illinois for an Illinois-based employer, Illinois has a substantial interest in this dispute that implicates the societal concerns of products liability and occupational safety.”

Garman, however, dissented from the majority’s opinion, saying she does not believe SNFA has “sufficient minimum contacts with this state so as to justify Illinois’ exercise of personal jurisdiction over defendant.”

“The evidence does not show that by doing business with Agusta, defendant delivered its goods into the stream of commerce with the expectation that they would be purchased by Illinois users,” Garman wrote in her dissent.

She added, “ [N]or does defendant’s relationship with Hamilton Sundstrand show that defendant purposefully availed itself of the privilege of doing business in Illinois so as to justify the exercise of specific jurisdiction in this case.”

According to the appellate court opinion in this case, Todd Smith and Brian LaCien of Powers, Rogers & Smith in Chicago represented Russell’s estate while Robert Marc Chemers and Scott Howie of Pretzel & Stouffer in Chicago represented SNFA.