Cassidy v. China Vitamins, LLC

• Decision Date: 18 October 2018
• Docket Number: Docket No. 122873
• Citation: 427 Ill.Dec. 892,120 N.E.3d 959,2018 IL 122873
• Parties: Martin CASSIDY, Appellee, v. CHINA VITAMINS, LLC, Appellant.
• Court: Illinois Supreme Court

2018 IL 122873

120 N.E.3d 959

427 Ill.Dec. 892

Martin CASSIDY, Appellee,

v.CHINA VITAMINS, LLC, Appellant.

Docket No. 122873

Supreme Court of Illinois.

Opinion filed October 18, 2018.

JUSTICE KILBRIDE delivered the judgment of the court, with opinion.

¶ 1 Alleging injuries caused by a defective product that was manufactured in China, the plaintiff, Martin Cassidy, filed a strict product liability action against China Vitamins, LLC (China Vitamins), a nonmanufacturer defendant. China Vitamins was dismissed from the lawsuit, however, after providing Cassidy with information about the product's Chinese manufacturer, Taihua Group. A default judgment of over $9 million was eventually entered against the manufacturer, but Cassidy's efforts to collect on the judgment were unsuccessful. Consequently, he sought to reinstate China Vitamins as a defendant under section 2-621(b)(4) of the Illinois Code of Civil Procedure ( 735 ILCS 5/2-621(b)(4) (West 1994) ).¹

¶ 2 After initially reinstating China Vitamins, the trial court vacated that order and denied Cassidy's reinstatement motion, finding that he had failed to establish the statutory requirement "[t]hat the manufacturer is unable to satisfy any judgment as determined by the court." In making that finding, the trial court relied on the standard set forth in Chraca v. U.S. Battery Manufacturing Co. , 2014 IL App (1st) 132325, 388 Ill.Dec. 275, 24 N.E.3d 183, conditioning reinstatement on the plaintiff's showing that the manufacturer was bankrupt or no longer in existence. On appeal, a divided appellate court rejected Chraca 's interpretation of section 2-621(b), instead requiring evidence that the manufacturer was "judgment-proof" or "execution-proof." 2017 IL App (1st) 160933, ¶¶ 33-34, 418 Ill.Dec. 110, 89 N.E.3d 944.

¶ 3 This court is now tasked with interpreting section 2-621(b)(4) in light of our rules of statutory construction and the legislative intent underlying this state's strict product liability laws. We affirm the appellate court's judgment and remand the cause for further proceedings on Cassidy's motion to reinstate China Vitamins.

¶ 4 I. BACKGROUND

¶ 5 Martin Cassidy was working at the Ridley Feed Ingredients facility in Mendota, Illinois, in October 2006, when he was severely injured. He filed a three-count complaint in the circuit court of Cook County against New Jersey-based defendant China Vitamins, the distributor of an imported flexible bulk container of vitamins that allegedly broke, causing a stacked bulk container to fall and seriously injure him. His complaint raised theories of recovery based on strict product liability, negligence product liability, and res ipsa loquitur . China Vitamins filed an answer admitting that it distributed and sold the product inside the flexible bulk containers but denying that it manufactured either that product or the containers. Later, the trial court dismissed Cassidy's res ipsa loquitur count for failure to state a cause of action.

¶ 6 In May 2008, China Vitamins identified the manufacturer of the flexible bulk containers as Taihua Group Shanghai Taiwei Trading Company Limited,² headquartered in China. Cassidy then filed a nine-count amended complaint adding Taihua Group and Zhejiang Nhu Company, Ltd. (Zhejiang Nhu), the Chinese manufacturer of the vitamins, as defendants. Taihua Group's legal counsel filed an answer admitting it designed, manufactured, distributed, supplied, and/or sold a flexible bulk container but withdrew from the case in January 2010. The trial court ordered Taihua Group to obtain new counsel by March 2010. In 2011, China Vitamins filed a summary judgment motion and sought dismissal of the strict product liability and negligence product liability counts against it on the grounds that it was neither the designer nor the manufacturer of the defective container. Cassidy opposed the motion, and China Vitamins filed a reply.

¶ 7 The evidence showed that China Vitamins bought vitamins from Chinese manufacturer Zhejiang Nhu³ and imported them for sale to third parties, such as Cassidy's employer, Ridley Feed Ingredients (Ridley), for use in animal feed and human dietary and food supplements. Ridley had purchased bulk vitamins from China Vitamins since 2000. After China Vitamins placed an order in China, totes weighing approximately one metric ton would be loaded into shipping containers before being transported to the west coast of the United States, where they would be transferred to trains bound for the Chicago area. The container at issue here was part of an order delivered to Ridley's Mendota facility, where Cassidy was injured.

¶ 8 In January 2012, the trial court dismissed China Vitamins from the action under section 2-621(b) of the Illinois Code of Civil Procedure ( 735 ILCS 5/2-621(b) (West 1994) ), treating its summary judgment motion as a motion to dismiss without prejudice. After Taihua Group failed to retain new counsel as ordered in 2010, the trial judge entered a default judgment against it. The cause of action was transferred for prove-up, and Cassidy was awarded a default judgment of over $9.1 million against Taihua Group in June 2012.

¶ 9 Cassidy issued a citation to discover assets against Taihua Group that was quashed for lack of proper foreign service. Between March and October 2013, he also issued several third-party citations to discover assets for collection of the default judgment. When those collection efforts failed, Cassidy filed a motion to reinstate China Vitamins under section 2-621(b). China Vitamins argued that Cassidy's motion did not satisfy the statutory reinstatement requirements. The trial court granted Cassidy's motion on jurisdictional grounds in September 2015 but did not address the statutory requirements. China Vitamins filed a motion to reconsider, again raising Cassidy's failure to satisfy the requirements in section 2-621(b). The trial court then vacated its prior order and granted China Vitamins' motion to reconsider, concluding that Cassidy had not met the statutory reinstatement requirements and making the order final and appealable under Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). After filing his own unsuccessful motion to reconsider, Cassidy filed a timely notice of appeal.

¶ 10 A divided appellate court rejected the appellate court's interpretation of section 2-621(b)(4) in Chraca, 2014 IL App (1st) 132325, 388 Ill.Dec. 275, 24 N.E.3d 183. That court concluded the statutory requirement that the manufacturer be "unable to satisfy any judgment" is met only if the manufacturer is shown to be bankrupt or no longer in existence. 2017 IL App (1st) 160933, ¶ 28, 418 Ill.Dec. 110, 89 N.E.3d 944. Instead, the appellate majority in this case interpreted the statutory language to require a showing that the manufacturer is "judgment-proof" or "execution-proof" before a previously dismissed seller or distributor could be reinstated as a party. 2017 IL App (1st) 160933, ¶¶ 29-35, 418 Ill.Dec. 110, 89 N.E.3d 944. The majority then remanded Cassidy's cause of action for an initial determination of whether Taihua Group was indeed unable to satisfy the default judgment entered against it under the majority's new interpretation of section 2-621(b)(4). 2017 IL App (1st) 160933, ¶¶ 38, 41, 418 Ill.Dec. 110, 89 N.E.3d 944.⁴

¶ 11 In a partial dissent, Justice Rochford agreed with Chraca ’s interpretation of section 2-621(b), believing that it properly focused on the manufacturer's inability to pay rather than on the plaintiff's inability to enforce the judgment . The partial dissent also noted that the legislature had not adopted a provision, approved in other states, allowing reinstatement if a plaintiff could not enforce a judgment. Finally, because Illinois recognizes out-of-state judgments, the dissent argued that a defendant is not "judgment-proof" as long as it has assets outside the court's jurisdiction. Here, the record showed that Taihua Group was still in operation, with subsidiaries in China and several other countries. Cassidy even admitted on appeal that, however unlikely, Taihua Group could still choose to pay the damages " ‘voluntarily.’ " 2017 IL App (1st) 160933, ¶ 62, 418 Ill.Dec. 110, 89 N.E.3d 944 (Rochford, J., concurring in part and dissenting in part).

¶ 12 This court allowed China Vitamins' petition for leave to appeal pursuant to Illinois Supreme Court Rule 315(a) (eff. Jan. 1, 2015). We also permitted the Illinois Trial Lawyers Association to file an amicus curiae brief in support of Cassidy.

¶ 13 II. ANALYSIS

¶ 14 We now examine when a distributor that was previously dismissed as a defendant in a strict product liability case under section 2-621 of the Illinois Code of Civil Procedure can be properly reinstated as a party under section 2-621(b)(4). See 735 ILCS 5/2-621 (West 1994). Section 2-621 sets forth a scheme that allows a defendant that is not a manufacturer of the allegedly defective product at issue in a strict liability action to seek dismissal after it accurately certifies the identity of the product's manufacturer. If the plaintiff then files a complaint that the manufacturer is required to answer, the trial court must dismiss the strict tort liability claim against the certifying nonmanufacturer-defendant, in the absence of certain limitations not at issue here. 735 ILCS 5/2-621(a), (b) (West 1994). Because the conditions set forth in section 2-621(b) result in the dismissal of a defendant that is not the product manufacturer, that section is sometimes deemed the "seller's exception." 2017 IL App (1st) 160933, ¶ 19, 418 Ill.Dec. 110, 89 N.E.3d 944. Even if the certifying defendant is dismissed, however, the trial court retains jurisdiction over it, and section 2-621(b) permits the plaintiff to request the vacatur of the dismissal order and the reinstatement of that defendant as a party at any time if the plaintiff is able to satisfy one of five enumerated criteria. 735 ILCS 5/2-621(b)(1)-(5) (West 1994).

¶ 15 The dispute in this...