Russell v. Snfa

• Decision Date: 31 March 2011
• Docket Number: No. 1–09–3012.,1–09–3012.
• Parties: John RUSSELL, as an Executor of the Estate of Michael Russell, Deceased, Plaintiff–Appellant,v.SNFA, Defendant–Appellee.
• Court: United States Appellate Court of Illinois

408 Ill.App.3d 827
946 N.E.2d 1076
349 Ill.Dec. 580

John RUSSELL, as an Executor of the Estate of Michael Russell, Deceased, Plaintiff–Appellant,
v.
SNFA, Defendant–Appellee.

No. 1–09–3012.

Appellate Court of Illinois, First District, Sixth Division.

March 31, 2011.

[946 N.E.2d 1079]

Todd A. Smith, Brian LaCien, Powers Rogers & Smith, P.C., Chicago, for Appellant.Robert Marc Chemers, Scott L. Howie, Pretzel & Stouffer, Chartered, Chicago, for Appellee.

[349 Ill.Dec. 583] OPINION Justice ROBERT E. GORDON delivered the judgment of the court, with opinion.

[408 Ill.App.3d 828] Plaintiff's brother died during a helicopter crash in Illinois. Defendant SNFA, a French company, made a part for that helicopter, which plaintiff claims was defective and the cause of the crash. Defendant moved to dismiss on the ground that Illinois had no jurisdiction over it, and the trial court dismissed for lack of personal jurisdiction. For the reasons discussed below, we reverse and remand for further proceedings consistent with this opinion.

BACKGROUND I. The Parties

On January 28, 2003, Michael Russell (Russell) died during a helicopter crash in Illinois. Russell, who was the pilot and sole occupant, was working for Air Angels, a medical air service that did business primarily in Illinois and, in particular, Cook County. Russell died leaving a wife and two sons. Plaintiff John Russell (plaintiff) is Michael Russell's brother and the executor of Michael Russell's estate.

In his complaint, plaintiff alleged that the crash was caused, specifically, by the failure of one of the helicopter's tail-rotor drive-shaft bearings, which defendant manufactured. Plaintiff alleged that, as a result of this failure, the drive shaft fractured, leaving the tail rotor inoperable. The helicopter spun out of control, crashing to the ground.

Defendant is a French manufacturer of both custom-made aerospace bearings and helicopter tail-rotor bearings.

[408 Ill.App.3d 829] II. The Product at Issue

In its brief to this court, defendant admitted the following facts.

The helicopter involved in the accident was an A 109 helicopter manufactured by Agusta S.P.A. (Agusta) in Italy in 1989. The helicopter contained seven tail-rotor bearings manufactured by defendant. These bearings were custom-made by defendant for use in Agusta's A 109 helicopters. The helicopter in question had several owners and operators. In 1998, a German company sold it to Metro Aviation in Louisiana, which in turn sold it to Air Angels, which was Russell's employer at the time of the crash.

In 1998 and again in 2002, Metro Aviation replaced some of the bearings. The replacement bearings had been manufactured by defendant in France, and then sold to Agusta in Italy, which in turn sold them to its American subsidiary, Agusta Aerospace Corporation (Agusta AC), which then sold them to Metro Aviation in Louisiana. Defendant acknowledges that Agusta AC sells SNFA's custom-made bearings to owners of A 109 aircraft around the world.

Specifically for Agusta, defendant manufactures several different custom-made tail-rotor bearings. Agusta provides defendant with precise specifications, and defendant manufactures the bearings according to those specifications. Defendant acknowledges that it knows that its custom-made tail-rotor bearings are incorporated by Agusta into helicopters and also sold as individual replacement parts.

Defendant states that it is in the business of providing custom-made bearings,

[349 Ill.Dec. 584 , 946 N.E.2d 1080]

mostly to European customers. Defendant manufactures custom-made bearings for both the aerospace industry and for helicopters. Defendant claims that it has no American customers for its helicopter bearings, but admits that it does have three American customers for its aerospace bearings: (1) Rolls Royce, a jet-engine manufacturer; (2) Honeywell, an engine manufacturer; and (3) Hamilton Sundstrand, a subsidiary of United Technologies Corporation.

III. Orders Appealed From

On August 26, 2010, the trial court granted defendant's motion to dismiss for lack of personal jurisdiction, but it stayed the order. The trial court's written order stated that its ruling was “made in accordance w/ [ sic ] transcript.” In open court, the trial court explained, as follows, why it rejected plaintiff's claim that defendant was doing business in Illinois:

“Now, in the case before me, there is no office, there is no showing whatsoever of the derivation of a substantial portion of overall business in Illinois.

[408 Ill.App.3d 830] There is only the most minimal showing of physical presence in Illinois. Two visits are discussed, but only one of those visits falls within the parameter of which the cases say the Court should consider, in determining the existence of general jurisdiction. * * *

So, I selected a slightly broader period of two-and-a-half years, but the first visit was in 2000, and the accident didn't occur [until] 2003.

So, during the relevant period, we have a single visit of a SNFA representative to Hamilton Sundstrand in Rockford, and we have invoicing done through Rockford, although the product, itself, was shipped to San Diego.

At best, we have a decent dollar amount of sales reflected in the invoices, not quite a million dollars, if I rely on that figure in that contract that I mentioned.

Whereas, in Riemer

[ v. KSL Recreation Corp., 348 Ill.App.3d 26, 283 Ill.Dec. 163, 807 N.E.2d 1004 (2004) ]

, $6 million in sales by a much smaller company than SNFA were held insufficient, and the Court found a lack of general jurisdiction in that case.

So, my conclusion is that the plaintiff in this case has failed to meet its burden of showing continuous and systematic presence in Illinois.”

In open court, the trial court also explained why it rejected plaintiff's claim that the court had jurisdiction over defendant due to the fact that the helicopter crashed in Illinois:

“[I]f the plaintiff was to make a case at all, it had to be based on general jurisdiction, simply because the [helicopter] accident didn't arise out of their Illinois contacts.

So, it doesn't meet—putting aside the question of purposefully-directed activity, [the accident] simply did not arise out of the Illinois activity.”

On September 24, 2008, the trial court found that there was no just reason to delay either enforcement or appeal of its ruling. Plaintiff filed a notice of appeal, appealing the orders dated August 26, 2009, and September 24, 2009, as well as earlier orders related to discovery. This appeal followed.

ANALYSIS I. Standard of Review

“The plaintiff bears the burden of establishing a prima facie basis upon which jurisdiction over an out-of-state resident may be exercised.”

[349 Ill.Dec. 585 , 946 N.E.2d 1081]

Rosier v. Cascade Mountain, Inc., 367 Ill.App.3d 559, 561, 305 Ill.Dec. 352, 855 N.E.2d 243 (2006); Alderson v. Southern Co., 321 Ill.App.3d 832, 846, 254 Ill.Dec. 514, 747 N.E.2d 926 (2001); Khan v. Van Remmen, Inc., 325 Ill.App.3d 49, 53–54, 258 Ill.Dec. 628, 756 N.E.2d 902 (2001). “If jurisdictional facts remain in controversy, then the court must conduct [408 Ill.App.3d 831] a hearing to resolve those disputes.” Knaus v. Guidry, 389 Ill.App.3d 804, 813, 329 Ill.Dec. 446, 906 N.E.2d 644 (2009). “When the circuit court decides a jurisdictional question solely on the basis of documentary evidence” and without an evidentiary hearing, as it did in this case, then “the question is addressed de novo on appeal.” Rosier, 367 Ill.App.3d at 561, 305 Ill.Dec. 352, 855 N.E.2d 243; Alderson, 321 Ill.App.3d at 846, 254 Ill.Dec. 514, 747 N.E.2d 926. On appeal, we must “resolve in favor of the plaintiff any conflicts in the pleadings and affidavits.” MacNeil v. Trambert, 401 Ill.App.3d 1077, 1080, 342 Ill.Dec. 314, 932 N.E.2d 441 (2010). If we find that plaintiff has made a prima facie case for jurisdiction, we must then determine if any material evidentiary conflicts exist. MacNeil, 401 Ill.App.3d at 1080, 342 Ill.Dec. 314, 932 N.E.2d 441. If a material evidentiary conflict exists, we must remand the case to the trial court for an evidentiary hearing. MacNeil, 401 Ill.App.3d at 1080, 342 Ill.Dec. 314, 932 N.E.2d 441.

II. Applicable Statutory and Constitutional Provisions

Section 2–209 of the Code of Civil Procedure (735 ILCS 5/2–209 (West 2002)) sets forth when Illinois courts will exercise personal jurisdiction over a defendant. Subsection (a), which governs specific jurisdiction, lists 14 different actions by a defendant which will subject him or her to Illinois jurisdiction. 735 ILCS 5/2–209(a)(1) through (a)(14) (West 2002). A defendant is subject to jurisdiction for “any cause of action arising from the doing of any” of these “acts,” which include the transaction of business or the commission of a tort. 735 ILCS 5/2–209(a)(1) through (a)(14) (West 2002). Subsection (b), which governs general jurisdiction, lists four grounds, only two of which apply to corporations: “(3) * * * a corporation organized under the laws of this State; or (4) * * * [a] corporation doing business within this State.” 735 ILCS 5/2–209(a)(3), (b)(4) (West 2002). Subsection (c) is a “catchall provision” which permits Illinois courts to “ ‘exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States.’ ” Rosier, 367 Ill.App.3d at 561, 305 Ill.Dec. 352, 855 N.E.2d 243 (quoting 735 ILCS 5/2–209(c) (West 2002)). Subsection (c) permits an Illinois court to exercise personal jurisdiction to the extent permitted by the due process clause of the fourteenth amendment to the United States Constitution. Klump v. Duffus, 71 F.3d 1368, 1371 (7th Cir.1995) (Illinois long-arm statute was amended in 1989 to add subsection (c), which is “coextensive with the due process requirements of the United States Constitution”).

An exercise of jurisdiction under any of the three statutory subsections must also comport with the due process clause. The due process clause limits a...