Acrison, Inc. v. Control and Metering Ltd., 89 C 541.

• Decision Date: 25 January 1990
• Docket Number: No. 89 C 541.,89 C 541.
• Citation: 14 USPQ 2d 1833,730 F. Supp. 1445
• Court: U.S. District Court — Northern District of Illinois
• Parties: ACRISON, INC., Plaintiff, v. CONTROL AND METERING LIMITED, et al., Defendants.

730 F. Supp. 1445

14 USPQ 2d 1833

ACRISON, INC., Plaintiff, v. CONTROL AND METERING LIMITED, et al., Defendants.

No. 89 C 541.

United States District Court, N.D. Illinois, E.D.

January 25, 1990.

Mark T. Banner, Grantland G. Drutchas, Allegretti & Witcoff, Ltd., Chicago, Ill., Charles Bradley, Peter Bucci, Bradford Breen, Davis, Hoxie, Faithfull & Hapgood, and James D. Fornari, Jarblum, Solomon & Fornari, P.C., New York City, for plaintiff.

Robert Harmon, Rodney Daniel, William, Brinks, Olds, Hofer, Gilson & Lione, Ltd., Stephen G. Rudisill, Arnold, White & Durkee, Chicago, Ill., and Willem G. Schuurman, Arnold, White & Durkee, Austin, Tex., for defendants.

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Brabender Technologie KG ("Brabender") has moved for dismissal from this patent infringement action brought by Acrison, Inc. ("Acrison") against Brabender, its licensee Control and Metering Limited ("CML") and CML's subsidiary Control and Metering, Inc. ("CMI"). Of the three defendants, only CMI has an Illinois place of business, so that Brabender's amenability to suit here depends on the reach of the Illinois long-arm statute, Ill.Rev.Stat. ch. 110, ¶ 2-209(a) ("Section 2-209(a)").¹ For the reasons stated in this memorandum opinion and order, Brabender's motion is granted.

Facts²

Acrison challenges a Brabender gravimetric feeding system as an infringement of an Acrison patent. Brabender, a German national, does not do business directly in the United States. Instead it entered into an exclusive distributorship agreement with CML in 1984,³ which was converted to an exclusive ten-year license agreement for the same territory and on essentially the same substantive terms on April 1, 1987. Brabender did not agree to indemnify CML against claims of the type involved here, so that they are operating independently (and with separate counsel) in this action.

CML's manufacturing operation is in Canada. It buys components from Brabender F.O.B. Duisburg, Germany and ships them to its facilities in Canada where they are combined with components of other manufacturers to produce CML's weighing devices. CML markets those devices in North America. It has a United States subsidiary, CMI, with an established place of business in Batavia, Illinois.

Except for the sporadic provision of repair parts during the 1983-86 period to maintain a Brabender device sold to an Illinois company some time before 1983,⁴ Brabender itself has never sold, solicited, advertised or shipped any products into Illinois. Brabender has never maintained any employees, agents, offices, telephone listings, property, bank accounts, subsidiaries or affiliates in the United States. Indeed, it has never provided assistance to any end users in this country relating to installing, assembling, using or repairing Brabender equipment, nor has it ever extended any warranties or guaranties of its products to United States purchasers or users.

Although Brabender has thus been conspicuously absent from Illinois (and indeed from the entire United States) in terms of the direct active conduct of business — not only absent in terms of personnel but also in terms of its own shipment of products — certain of its people have from 1984 through 1989 attended the industry's annual trade show in Chicago (the Chicago Powder and Bulk Solids Show). CML's booth at those shows exhibited Brabender's products, but that was solely a CML activity. Not surprisingly, of course, Brabender's people who came to the show observed CML's booth and display⁵ — and they also were interested in observing, and did observe, competitive equipment. On occasion during the trade shows, the Brabender people visited a few Illinois companies that had purchased CML equipment, but those visits were purely social or for the purpose of gathering information. No service or solicitation by Brabender was performed during the trade show visits.

Absence of Personal Jurisdiction

Jurisdictional jurisprudence has long since moved away from the bright line prescribed by Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878), in which the predicate for personal jurisdiction was simply physical power — the service of process on a defendant within the territorial boundaries of the forum. Although some movement from that simplistic approach began a good deal earlier than the decision in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), that case — now nearly a half-century old — is generally perceived as first having announced the modern approach to the problem in due process terms. Since then the United States Supreme Court has been called upon to deal with the subject with some degree of frequency, each time adding refinements to the analysis — perhaps most significantly in recent years in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984), Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) and most recently Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987).

Although to this Court's knowledge the cases have not spoken in just these analytical terms, it has seemed to this Court that in at least the tort field (if not in others as well) a key development has been the engrafting of what are essentially in rem concepts to generate in personam liability. That is, the presence of a defendant's property in the forum has in some instances been enough to invoke jurisdiction not merely over that property — the familiar notion of in rem liability — but over its owner as well, to allow a judgment in personam. That has been the hallmark of such cases as Gray v. American Radiator and Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961) (an Illinois Supreme Court decision that has found favor with the United States Supreme Court as a valid exercise of jurisdiction in due process terms)—and it has been the benchmark against which both World-Wide Volkswagen and Asahi measured the requirements of due process but rejected in personam jurisdiction.

Essentially that is what is at issue here — whether Brabender, whose own personnel have not established any presence in Illinois except for their nonmaterial trade show attendance (to which this opinion will refer later), is subject to service of process and to a potential judgment in personam merely because its claimed infringing products were sold in Illinois under the auspices of CML, originally its exclusive distributor and now its exclusive licensee for the United States and Canada. And because this case is governed by the version of the Illinois long-arm statute that preceded the September 1, 1989 amendment to Section 2-209(a), that statute and the Illinois state law decisions interpreting it (rather than the full reach of the Due Process Clause) are at issue here. In relevant part Section 2-209(a) provides:

(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:

* * * * * *

(2) The commission of a tortious act within this State.

Acrison's strongest position stems from its invocation of a 15-year-old decision from our Court of Appeals in a startlingly similar case, Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137 (7th Cir.1975). Except in one critical respect dealt with hereafter, Honeywell is so similar to this case that the factual descriptions there and here might almost have been written by the same pen.⁶ Under the circumstances it is surprising that although Brabender's counsel were well aware of Honeywell — they cited it at their Mem. 4 n. 1 only for the unexceptionable proposition that the operative principles at issue in this case are in part questions of due process — they made no effort to distinguish the case in their opening submission. Their R.Mem. 11-12 attempted some distinctions, not altogether successfully.

This Court has serious misgivings as to the current force to be ascribed to Honeywell, which was a split decision reversing then District Judge (now Chief Judge of the Court of Appeals) William Bauer, who had held that the activities of a German company quite comparable to those of Brabender here did not subject the defendant to jurisdiction under the "commission of a tortious act" provision of the Illinois long-arm statute. But this Court's place in the judicial hierarchy requires it still to adhere to Honeywell unless a departure is clearly signified by later developments from a Supreme Court (either the United States Supreme Court or the Illinois Supreme Court), or of course from the Court of Appeals itself. Brabender urges that Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290 (3d Cir.1985), a case given partial approval in Asahi (480 U.S. at 112, 113 n. *, 107 S.Ct. at 1033 n. *), calls for such a disavowal of Honeywell. That would really be a major step, the product of building an inference on an inference — but that step need not be considered in light of a dispositive reason that neither party has really spoken to.

It will be recalled that the source of jurisdiction under Section 2-209(a)(2) is the "commission of a tortious act within this State" (emphasis added). Familiar jurisprudence teaches that in tort law the key operative factors for determining the locus of the tort and the defendant's amenability to suit at that locus are normally the place where plaintiff sustained its injury and the relationship (or lack of relationship) of the foreign defendant to that place — that is the lesson of Gray, of World-Wide Volkswagen, of Asahi and, yes, of Honeywell itself. True enough,...