Spartan Motors, Inc. v. Lube Power, Inc.

• Decision Date: 10 March 2003
• Docket Number: No. 2-01-1015.,2-01-1015.
• Citation: 337 Ill. App.3d 556,786 N.E.2d 613,272 Ill.Dec. 74
• Court: United States Appellate Court of Illinois
• Parties: SPARTAN MOTORS, INC., Plaintiff-Appellee, v. LUBE POWER, INC., Defendant-Appellant (Monarch Hydraulics, Inc., Defendant).

786 N.E.2d 613

337 Ill. App.3d 556

272 Ill.Dec. 74

SPARTAN MOTORS, INC., Plaintiff-Appellee, v. LUBE POWER, INC., Defendant-Appellant (Monarch Hydraulics, Inc., Defendant).

No. 2-01-1015.

Appellate Court of Illinois, Second District.

March 10, 2003.

Jon P. Malartsik, Harvey A. Paulsen, Paulsen & Malec, Ltd., Wheaton, for Lube Power, Inc.

James F. Best, Kimberly A. Carr, Best, Vanderlaan & Harrington, Wheaton, for Spartan Motors, Inc.

Justice BYRNE delivered the opinion of the court:

Defendant Lube Power, Inc. (defendant or Lube Power), appeals from the circuit court's order that denied its motion to dismiss for lack of personal jurisdiction a complaint filed against it by plaintiff, Spartan Motors, Inc. (plaintiff or Spartan). Defendant contends that it is not subject to personal jurisdiction in Illinois under the Illinois long-arm statute, section 2-209 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-209 (West 2000)) and federal due process standards.

The facts are not disputed. Plaintiff and defendant are Michigan corporations with their principal places of business in Michigan. Defendant sold plaintiff hydraulic pump assemblies. It manufactured the pump assemblies at its facility in Michigan and delivered them to plaintiff at its facility in Michigan. Plaintiff incorporated the pump assemblies into, among other things, fire truck chassis that it sold to customers throughout the United States and abroad.

In 1995, a fire engine chassis that plaintiff had sold to the Elgin fire department malfunctioned, injuring firefighter Wayne Sabatino. Sabatino sued Spartan and another defendant that was apparently Spartan's local distributor. Spartan, in turn, filed third-party actions against other parties, including Lube Power. Sabatino v. Spartan Motors, Inc., No. 97-L-221 (Cir. Ct. Kane County).

After investigating the Elgin incident, Spartan decided that the cause of the accident was a defective solenoid in the pump assembly that Lube Power sold. Spartan believed that the same defect was present in other products Lube Power provided and initiated a recall to replace the allegedly defective parts. The recall was not limited to Spartan customers in Illinois.

Spartan then filed the present action against Lube Power in the circuit court of Kane County. On Spartan's motion, the trial court consolidated the action with cause No. 97-L-221 (Sabatino). That case was later settled. In the present case, Lube Power filed a special and limited appearance and moved to dismiss the action for lack of personal jurisdiction. Spartan responded and the trial court denied the motion to dismiss without conducting an evidentiary hearing. Lube Power filed a petition for leave to appeal, which this court granted. See 166 Ill.2d R. 306(a)(3).

On appeal, Lube Power argues that it has done nothing to submit itself to the jurisdiction of Illinois courts in connection with this case and that requiring it to litigate in Illinois violates federal due process standards. Spartan responds that Lube Power (1) transacted business, (2) committed two tortious acts, and (3) is "doing business" in Illinois, thus subjecting itself to personal jurisdiction here.

A plaintiff asking a court to assert jurisdiction over a nonresident defendant must demonstrate a prima facie case for jurisdiction. Zazove v. Pelikan, Inc., 326 Ill.App.3d 798, 801-02, 260 Ill.Dec. 412, 761 N.E.2d 256 (2001); Kalata v. Healy, 312 Ill.App.3d 761, 765, 245 Ill.Dec. 566, 728 N.E.2d 648 (2000). Where, as here, the trial court decides the jurisdictional issue solely on the basis of documentary evidence, appellate review is de novo. See Khan v. Van Remmen, Inc., 325 Ill.App.3d 49, 53, 258 Ill.Dec. 628, 756 N.E.2d 902 (2001); Hendry v. Ornda Health Corp., 318 Ill.App.3d 851, 852, 252 Ill.Dec. 208, 742 N.E.2d 746 (2000). In deciding whether jurisdiction may be asserted over a nonresident defendant, courts evaluate whether jurisdiction is proper under the Illinois long-arm statute and whether jurisdiction would comport with constitutional due process standards. Khan, 325 Ill. App.3d at 53-54, 258 Ill.Dec. 628, 756 N.E.2d 902. The long-arm statute permits an Illinois court to assert jurisdiction over a nonresident defendant who performs one of several enumerated acts in Illinois. 735 ILCS 5/2-209 (West 2000). Section 2-209 provides, in relevant part:

"(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 such acts:

(1) The transaction of any business within this State;

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

* * *

(b) A court may exercise jurisdiction in any action arising within or without this State against any person who:

* * *

(4) Is a natural person or corporation doing business within this State.

(c) A court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States.

* * *

(f) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him or her is based upon subsection (a)." (Emphasis added.) 735 ILCS 5/2-209 (West 2000).

Federal due process requires that, for a nonresident defendant to be subject to personal jurisdiction, the defendant must have certain "minimum contacts" with the forum state such that maintaining the suit there does not offend "`traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 283 (1940). Those minimum contacts must be based on "`some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 109, 107 S.Ct. 1026, 1030, 94 L.Ed.2d 92, 102 (1987), quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528, 542 (1985). This requirement ensures that an alien defendant will not be forced to litigate in a distant or inconvenient forum solely as a result of random, fortuitous, or attenuated contacts or the unilateral act of a consumer or some other third person. Burger King Corp., 471 U.S. at 475, 105 S.Ct. at 2183, 85 L.Ed.2d at 542.

A court conducting a federal due process analysis must consider whether (1) the nonresident defendant had "minimum contacts" with the forum state such that there was "fair warning" that the nonresident defendant may be hailed into court there; (2) the action arose out of or related to the defendant's contacts with the forum state; and (3) it is reasonable to require the defendant to litigate in the forum state. Burger King Corp., 471 U.S. at 471-77, 105 S.Ct. at 2181-84, 85 L.Ed.2d at 540-44; Kalata, 312 Ill.App.3d at 768-69, 245 Ill.Dec. 566, 728 N.E.2d 648.

The "minimum contacts" and "fair warning" requirements are satisfied if the defendant has purposefully directed its activities at Illinois residents, reached out beyond one state to create continuing relationships with citizens of another state, or purposefully derived benefits from its activities within the forum state. Alderson v. Southern Co., 321 Ill.App.3d 832, 857, 254 Ill.Dec. 514, 747 N.E.2d 926 (2001); see Pilipauskas v. Yakel, 258 Ill.App.3d 47, 56, 196 Ill.Dec. 188, 629 N.E.2d 733 (1994).

The meaning of the "minimum contacts" standard depends upon whether the forum asserts "general" or "specific" jurisdiction. General jurisdiction refers to suits neither arising out of nor related to the defendant's contacts, and it is permitted only where the defendant has carried on its activities in the forum state with "a fair measure of permanence and continuity, not occasionally or casually." Hendry, 318 Ill.App.3d at 853, 252 Ill.Dec. 208, 742 N.E.2d 746. Once a defendant is determined to be "doing business" in Illinois under section 2-209(b)(4) of the Code, the defendant is deemed to be a resident who is subject to the circuit court's general jurisdiction and may be sued on causes of action both related and unrelated to its Illinois activities. Alderson, 321 Ill.App.3d at 849, 254 Ill.Dec. 514, 747 N.E.2d 926.

Specific jurisdiction refers to jurisdiction over a defendant in a suit "arising out of or related to the defendant's contacts with the forum." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404, 411 n. 8 (1984). In specific jurisdiction cases, the action must directly arise out of the contacts between the defendant and the forum. Alderson, 321 Ill.App.3d at 857, 254 Ill. Dec. 514, 747 N.E.2d 926. Section 2-209(a) of the Code enumerates several acts that confer specific jurisdiction over defendants in these cases. 735 ILCS 5/2-209(a), (f) (West 2000).

We note that the Helicopteros Court used the alternative terms "related to" and "arising out of" to describe a party's contacts with the forum, and one could argue that these terms suggest a two-part test for finding specific jurisdiction. However, the majority in Helicopteros avoided determining "whether the terms `arising out of' and `related to' describe different connections between a cause of action and a defendant's contacts with a forum" because the parties had not raised the issue. Helicopteros, 466 U.S. at 415 n. 10, 104 S.Ct. at 1872 n. 10, 80 L.Ed.2d at 411 n. 10. Like the Court in Helicopteros, we decline to address whether the phrases "related to" and "arising out of" describe different standards because Spartan does not argue the point.

We now turn to Spartan's...