Maunder v. DeHavilland Aircraft of Canada, Ltd.

• Decision Date: 29 June 1984
• Docket Number: No. 58108,58108
• Citation: Maunder v. DeHavilland Aircraft of Canada, Ltd., 102 Ill.2d 342, 466 N.E.2d 217, 80 Ill.Dec. 765 (Ill. 1984)
• Parties: , 80 Ill.Dec. 765 Crispin MAUNDER, Appellee, v. DeHAVILLAND AIRCRAFT OF CANADA, LTD., Appellant. Samuel J. BETAR, Adm'r, Appellee, v. DeHAVILLAND AIRCRAFT OF CANADA, LTD., Appellant.
• Court: Illinois Supreme Court

Page 217

466 N.E.2d 217

102 Ill.2d 342, 80 Ill.Dec. 765

Crispin MAUNDER, Appellee, v. DeHAVILLAND AIRCRAFT OF CANADA, LTD., Appellant.

Samuel J. BETAR, Adm'r, Appellee, v. DeHAVILLAND AIRCRAFT OF CANADA, LTD., Appellant.

No. 58108.

Supreme Court of Illinois.

June 29, 1984.

Leonard M. Ring & Associates, Chicago, for appellees, Crispin Maunder and Samuel J. Betar, Public Administrator of Cook County, Administrator of the Estate of Raghubir Dutt Law, Deceased; Leonard M. Ring, Judith E. Fors, Chicago, Ill., of counsel.

Lord, Bissell & Brook, Chicago, Ill., for appellant DeHavilland Aircraft of Canada, Ltd; Thomas J. Strueber, Richard E. Mueller, Hugh C. Griffin, Chicago, Ill., of counsel.

CLARK, Justice:

This appeal requires us to determine whether the circuit court of Cook County has jurisdiction over DeHavilland Aircraft of Canada, Ltd., a foreign corporation. More specifically, we are asked to determine whether the defendant was doing business in Illinois in order to be amenable to service of process and subject to the laws of this State.

These consolidated actions to recover for personal injury and wrongful death are based on the crash of an airplane designed and manufactured by defendant, DeHavilland Aircraft of Canada, Ltd. (Ltd.). The airplane crash occurred on May 3, 1976, in Lusaka, Zambia, during a demonstration flight for the Zambian Air Force and caused the death of Raghubir Dutt Law, a citizen of India and a member of the Zambian Air Force. Mr. Law's widow and children are also Indian citizens. Plaintiff Crispin Maunder, an English citizen and a passenger in the aircraft, was injured in the same crash. In April 1977, Samuel J. Betar, public administrator of Cook County, was appointed administrator of the estate of decedent Law by the probate division of the circuit court of Cook County. On April 28, 1977, Betar filed suit in the circuit court of Cook County against Ltd. and DeHavilland Canada, Inc. (Inc.), a Delaware corporation with its principal office and principal place of business in Rosemont Illinois. Inc. is a wholly owned subsidiary of Ltd. and sells and distributes parts for airplanes manufactured by Ltd.

On March 17, 1977, Crispin Maunder filed suit in the circuit court of Cook County against Inc. and Ltd. Service in the Law and Maunder suits was effectuated by leaving copies of the complaint and summons with an employee of Inc. in the Rosemont office.

On May 27, 1977, the defendants filed petitions to remove both causes to the United States District Court for the Northern District of Illinois. Inc. was voluntarily dismissed from both causes, leaving Ltd. as the sole defendant. A protracted procedural battle ensued in Federal court. Both causes were eventually remanded to the circuit court of Cook County because there was no diversity of citizenship between aliens Maunder (England), Law (India) and Ltd. (Canada). Betar v. DeHavilland Aircraft of Canada, Ltd. (7th Cir.1979), 603 F.2d 30, cert. denied (1980), 444 U.S. 1098, 100 S.Ct. 1064, 62 L.Ed.2d 785.

On May 20, 1981, the circuit court granted Ltd.'s motion to dismiss, noting:

"Analyzing the nature and quality of the contacts with the State of Illinois, this court cannot say that it would be fair and reasonable to require DeHavilland Aircraft Ltd., a Canadian Corp., to defend this action in Illinois."

The appellate court reversed the circuit court's order and remanded the cause to the circuit court, ruling that Ltd.'s Illinois subsidiary, Inc., provided sufficient contacts to invoke the jurisdiction of Illinois courts. (112 Ill.App.3d 879, 68 Ill.Dec. 450, 445 N.E.2d 1303.) We granted defendant's petition for leave to appeal. (87 Ill.2d R. 315(a).) We now affirm the decision of the appellate court.

Ltd.'s corporate offices and principal place of business are in Downsview, Ontario. Ltd. has manufactured "Twin Otter" propeller-driven planes for many years, and these planes are used all over the world for short passenger flights. The record reveals that there were 885 DeHavilland Ltd. aircraft operating in the United States in 1982. In 1971, Ltd. established a subsidiary corporation, DeHavilland Canada, Inc., to facilitate Ltd.'s business operations in the United States. Inc. is a wholly owned subsidiary of Ltd., and all of Inc.'s stock is owned by Ltd. The salaries of Inc.'s directors are paid by Ltd., and Ltd. guaranteed Inc.'s lease in Rosemont. The record reveals that an average of eight telephone calls per day were made from Inc.'s office to the parent's office in Ontario. The subsidiary's sole business is the sale of aircraft parts for DeHavilland aircraft. The manual of Inc. provides the following descriptions of the relationship between Ltd. and Inc.:

"DeHavilland Aircraft of Canada has incorporated a subsidiary company in the United States of America. The registered name and address of the Company is:

DEHAVILLAND CANADA INC.

5321 North Pearl Street

Rosemont Illinois 60018

The Company is controlled by the Parent Company and will operate under the authority of the Vice President [of] Sales. The function of this Company is to provide Product Support to the American users of the Parent Company's products."

Ltd. has included Inc. in advertisements published in American aviation journals. One full-page advertisement contained the following claims:

"How to carry 3 million passengers an

average of 42 miles each.

And make it pay.

* * *

* * *

In the last 10 years, Golden West has flown over 168,400,000 passenger miles, making it the largest commuter airline in the U.S.A. Their 12 Twin Otters have made an astonishing 1,387,000 landings. * * *

* * * [D]e Havilland Twin Otter proves 99.9% reliable. Rugged airframe and simple systems keep maintenance to a minimum. Quiet turboprops with TBOs of over 8,000 hours conserve fuel, and reverse to shorten landings and extend brake life.

Golden West President James M. Harmon sums up his passengers' satisfaction with Twin Otter: 'They know they can depend on its comfort, convenience and on-time reliability.' And to short haul operators, that's pure gold.

The de Havilland Aircraft of Canada, Limited

Downsview, Ontario. M3K 1Y5

Telephone: (416)633-7310

Telex: 0622128. Cable: MOTHTOR, Toronto.

DE HAVILLAND Twin Otter

The standard of dependability and versatility around the world.

Twin Otter service and spares support also available through de Havilland Canada Inc., 5321 North Pearl Street, Rosemont, Illinois 60018. Telephone (312) 678- 8380. Telex 00726409."

In this appeal, we are only concerned with the issue of jurisdiction. The merits of this case have never been addressed in more than seven years of litigation. We begin our discussion of the jurisdictional arguments by noting that the plaintiffs do not contend that Illinois courts have jurisdiction based on the long-arm statute (Ill.Rev.Stat.1981, ch. 110, par. 2-209). Rather, the plaintiffs contend that Ltd.'s contacts with Illinois constituted "doing business" in Illinois, thus subjecting Ltd. to the personal jurisdiction of Illinois courts.

The United States Supreme Court has determined that a State's power to enter in personam judgments binding on nonresident defendants is limited by the due process clause of the fourteenth amendment (U.S. Const., amend. XIV) (due process guarantees made applicable to the States by the fourteenth amendment). Criteria for such determinations were delineated in International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. State courts may invoke personal jurisdiction over a nonresident defendant that has minimum contacts with the forum, so long as the suit does not offend " 'traditional notions of fair play and substantial justice.' " (326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102.) The court noted:

"Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. * * * [T]o the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations, and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue." 326 U.S. 310, 319, 66 S.Ct. 154, 160, 90 L.Ed. 95, 104.

Our review of subsequent United States Supreme Court cases supports our determination that Ltd. is subject to the jurisdiction of Illinois courts. In Keeton v. Hustler Magazine (1984), 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790, a unanimous court ruled that New Hampshire could exercise in personam jurisdiction over a nonresident magazine publisher that had circulated his publication in New Hampshire. The court noted that New Hampshire was chosen as the forum State because New Hampshire's statute of limitations for libel provided a longer period of time than the statute of limitations of other States. Similarly, the court found no due process violation in Calder v. Jones (1984), 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804. In Calder, another unanimous court determined that a California court could exercise in personam jurisdiction over Florida journalists, even though the allegedly libelous article was written and published in Florida and the only contact with the forum State was the circulation of the article. Although these two cases deal with libel and not airplane crashes, we believe that the due process considerations in Keeton and Calder support our determination in the case at bar.

Business contacts must be of a continuous and systematic nature to invoke the jurisdiction of State courts. In Helicopteros Nacionales de Columbia v. Hall (1984), 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404, the United States...