Russell v. SNFA, 113909.

• Citation: 987 N.E.2d 778,2013 IL 113909,370 Ill.Dec. 12
• Decision Date: 18 April 2013
• Docket Number: No. 113909.,113909.
• Parties: John RUSSELL, as Ex'r of the Estate of Michael Russell, Deceased, Appellee, v. SNFA, Appellant.
• Court: Supreme Court of Illinois

2013 IL 113909
987 N.E.2d 778
370 Ill.Dec. 12

John RUSSELL, as Ex'r of the Estate of Michael Russell, Deceased, Appellee,
v.
SNFA, Appellant.

No. 113909.

Supreme Court of Illinois.

April 18, 2013.

[987 N.E.2d 780]

Robert Marc Chemers, Scott L. Howie, Pretzel & Stouffer, Chtrd., Chicago, Lisa J. Savitt, Joshua M. Kaplowitz, Crowell & Moring LLP, Washington, D.C., for appellant.

Todd A. Smith, Brian LaCien, Power Rogers & Smith, P.C., Chicago, for appellee.

OPINION
Chief Justice KILBRIDE delivered the judgment of the court, with opinion.

[370 Ill.Dec. 14]¶ 1 This is a products liability action arising from a fatal helicopter crash that [370 Ill.Dec. 15]

[987 N.E.2d 781]

occurred in Illinois. Plaintiff sought recovery from a number of entities connected to the accident, including defendant SNFA, a French company that manufactured a custom tail-rotor bearing for the helicopter involved in the crash.

¶ 2 Defendant moved to dismiss plaintiff's action, arguing that Illinois lacked personal jurisdiction over it. The circuit court of Cook County agreed with defendant's jurisdictional challenge and dismissed the action. On appeal, the appellate court reversed, finding that defendant was subject to specific personal jurisdiction in Illinois. 2011 IL App (1st) 093012–B, ¶ 27, 358 Ill.Dec. 273, 965 N.E.2d 1. For the following reasons, we affirm the judgment of the appellate court.

¶ 3 I. BACKGROUND

¶ 4 On January 28, 2003, plaintiff-decedent Michael Russell, the sole occupant and pilot of an Agusta 109C helicopter, died after his helicopter crashed in Illinois. Decedent, a resident of Georgia, was living in Illinois and working for Air Angels, Inc., an Illinois air ambulance service operating in the Chicago area, when the fatal accident occurred.

¶ 5 Plaintiff's helicopter was manufactured by Agusta S.p.A. in Italy in 1989. The helicopter contained seven tail-rotor bearings custom made by defendant for that specific model. Between 1989 and 1998, the helicopter had multiple owners and operators.

¶ 6 In 1998, a German company sold the helicopter to Metro Aviation in Louisiana. On two separate instances in 1998 and in 2002, Metro Aviation replaced some of the helicopter's tail-rotor bearings. Metro Aviation purchased the replacement bearings from Pennsylvania-based Agusta Aerospace Corporation, a wholly owned subsidiary of Agusta. As with the original bearings, the replacement bearings were manufactured by defendant in France. Thereafter, Metro Aviation sold the helicopter to plaintiff's employer. It is uncontested that plaintiff's helicopter contained tail-rotor bearings manufactured by defendant when it crashed in Illinois.

¶ 7 Plaintiff's estate filed a multicount complaint against numerous defendants, alleging that his helicopter suffered a failure of its tail-rotor bearing, causing it to spin out of control and crash. In relevant part, plaintiff raised strict liability and negligence claims against defendant. Plaintiff filed similar claims against: (1) Metro Aviation, the Louisiana company that sold the helicopter to plaintiff's employer; (2) Agusta S.p.A. (Agusta), the Italian manufacturer of the helicopter; and (3) Agusta Aerospace Corporation (AAC), the Pennsylvania-based distributor and wholly owned subsidiary of Agusta that sold the replacement bearings manufactured by defendant to Metro Aviation.

¶ 8 Thereafter, defendant moved to dismiss plaintiff's claims against it for lack of in personam jurisdiction under section 2–301 of the Code of Civil Procedure (735 ILCS 5/2–301 (West 2006)).¹ Specifically, defendant argued that it was not subject to personal jurisdiction in Illinois because there was no allegation of wrongdoing in Illinois by defendant, a French company lacking the requisite contacts with Illinois.

¶ 9 To respond to defendant's motion to dismiss, plaintiff sought jurisdictional discovery. Plaintiff obtained information about defendant's sales, marketing, and distribution activities. Plaintiff also obtained similar information about Agusta and AAC.

[987 N.E.2d 782]

[370 Ill.Dec. 16]¶ 10 It was established during discovery that defendant is a French corporation manufacturing custom-made bearings for the aerospace industry. Specifically, defendant makes bearings for auxiliary power units used in airplanes and for fixed-winged aircraft engines. Defendant also makes bearings for helicopters. Defendant conducts business internationally, with customers in Europe and the United States. Defendant, however, does not have any offices, assets, property, or employees in Illinois, and defendant is not licensed to do business in Illinois.

¶ 11 Agusta, the manufacturer of plaintiff's helicopter, is based in Italy. AAC, the wholly owned subsidiary of Agusta, is located in Pennsylvania and distributes helicopters and component parts internationally and in the United States. Eight different models of Agusta helicopters with defendant's bearings are available for sale in the United States.

¶ 12 In plaintiff's interrogatory to AAC, plaintiff requested information about AAC's distribution or sales of defendant's products in Illinois in the last 10 years. In response, AAC stated that it “sold approximately 2,198 [defendant]-produced parts between 2000 and the date of its response, March 26, 2007.” During the past 10 years, five Agusta helicopters were sold to customers located in Illinois. AAC also provided customer service and parts to operators of Agusta aircraft in Illinois.

¶ 13 Defendant sold various custom-made helicopter tail-bearings to Agusta, including the type at issue here. Defendant acknowledged that it was aware that Agusta incorporated defendant's bearings into the helicopters sold by Agusta. Agusta provided defendant with precise specifications and then defendant manufactured the tail-rotor bearings accordingly. Agusta also kept some of defendant's bearings to be sold individually. Although defendant knew that Agusta intended to sell defendant's bearings both in helicopters or as individual parts, defendant denied specific knowledge of the final destination of its custom-made helicopter tail-rotor bearings. Defendant does not have any direct United States customers for its custom-made helicopter bearings.

¶ 14 Similar to its helicopter bearings, defendant manufactures bearings for airplanes and fixed-wing aircraft to its customers' specifications. Defendant sells those bearings to customers throughout Europe and to three companies in the United States: (1) Rolls Royce, a jet-engine manufacturer in Indiana; (2) Honeywell, a military and engine manufacturer in Arizona; and (3) Hamilton Sundstrand, an aerospace manufacturer in California. As with its other products, defendant does not exercise control over the products its customers incorporate its bearings into.

¶ 15 Relevant to the issue here, defendant disclosed in an interrogatory that it had a business relationship with Hamilton Sundstrand in Rockford, Illinois, since 1997. Hamilton Sundstrand is a manufacturer of aerospace machinery and is a part of the United Technology Corporation. Defendant explained that it sold Hamilton Sundstrand aerospace bearings, but not the same model or type of bearings in defendant's helicopter.

¶ 16 Plaintiff took two depositions of defendant's employee, Frederic Ponchon, who was responsible for selling defendant's products in the United States, Canada, and certain parts of Asia and Europe. Ponchon explained that Hamilton Sundstrand had multiple locations throughout the United States, including divisions or locations in Rockford, Illinois, and San Diego, California. Ponchon personally attended at least three meetings with Hamilton Sundstrand in Rockford about defendant's products and Hamilton Sundstrand's payment[370 Ill.Dec. 17]

[987 N.E.2d 783]

systems. Ponchon further explained that he sought to sell a certain type of bearing to the Rockford location but was unable to complete the sale.

¶ 17 Ponchon stated that defendant sold its aerospace bearings to Hamilton Sundstrand, who incorporated defendant's bearings into Hamilton Sundstrand aerospace products, including auxiliary power units. Ponchon claimed that defendant's bearings sold to Hamilton Sundstrand were shipped to San Diego and that the Rockford location only processed payments.

¶ 18 A purchasing agreement between defendant and Hamilton Sundstrand lists Rockford, Illinois, as the buying and buyer agent location. Similarly, the proprietary sharing agreement or contract between defendant and Hamilton Sundstrand identifies Hamilton Sundstrand's place of business to be “4747 Harrison Avenue, Rockford, Illinois 61106” and states that proprietary information disclosed by defendant will be shared with an employee located in Rockford, Illinois. The proprietary agreement expressly provides that “[t]his agreement shall be governed by and interpreted under the internal laws of the state of Illinois, U.S.A.”

¶ 19 When asked about defendant's business relationship with Agusta, Ponchon acknowledged that he knew that Agusta sold helicopters that contained defendant's bearings in the United States. Ponchon denied, however, knowing whether any Agusta helicopters were sold in Illinois.

¶ 20 Plaintiff also obtained defendant's invoices and sales documents on defendant's sales to Hamilton Sundstrand. During an approximately four-year period, between July 2001 and February 2005, defendant sold products totaling approximately $1 million to Hamilton Sundstrand in a number of separate shipments. The invoices listed Hamilton Sundstrand's business address as Rockford, Illinois, and a delivery address in San Diego, California.

¶ 21 Ultimately, the circuit court granted defendant's motion to dismiss for lack of jurisdiction. The court concluded that defendant did not have sufficient contacts with Illinois.

¶ 22 On appeal, the appellate court reversed the circuit court's judgment. Russell v. SNFA, 408 Ill.App.3d 827, 349 Ill.Dec. 580, 946 N.E.2d 1076 (2011). This court, however, vacated the...