We continue our preview of the new civil review grants from the Illinois Supreme Court with Russell v. SNFA, which raises questions of general and specific jurisdiction over a French-based manufacturer.
Russell [pdf] arose from a 2003 helicopter crash in Illinois. The decedent’s estate sued, alleging that one of the helicopter’s tail rotor drive-shaft bearings had failed, fracturing the drive shaft, making the tail rotor inoperable, and leading to the crash. The defendant was a French-based manufacturer of custom-made aerospace bearings and helicopter tail-rotor bearings.
And that’s where the trouble started. Turns out the helicopter had been built in Italy by an Italian company. From there, it had found its way into the hands of first a Germany company, then a Louisiana-based company, and finally, to the decedent’s employer, which was based in Cook County. The Louisiana company had replaced several of the bearings with replacements made by defendant. Those were manufactured in France, sold in Italy, sold again to the customer’s American subsidiary, and then sold to the Louisiana-based former owner (note that we still haven’t tied anything to Illinois other than the accident and the domicile of the decedent). Both the original and the replacement bearings had been custom-made by the defendant for the Italian-based customer.
The trial court dismissed for lack of jurisdiction, noting that the only contact between the defendant and Illinois anytime in the general vicinity of the accident had been a single visit to a completely different customer. The court mentioned a little less than a million dollars in sales into the state, but it’s not clear whether these sales came straight from the defendant, as opposed to passing through a distributor. The court held that the plaintiff was dependent on general jurisdiction — which grants authority over any action based on "doing business" — rather than specific jurisdiction, and plaintiff’s showing fell short.
The Appellate Court reversed. Heavily relying on Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), the Court held that specific jurisdiction was present over the French defendant. After all, the defendant knew that its Italian customer sold its helicopters throughout the United States, and that the customer had an American subsidiary to facilitate American distribution. So it should expect to be haled into court in Illinois or — for that matter — any other state in the country, the Court concluded. Jurisdiction was reasonable since the defendant had designed and manufactured a component that was incorporated into a product that was intended to be, and was in fact sold in the United States, according to the Court.
So why did the Supreme Court take the case? Simple: J. McIntyre Machinery, Ltd. v. Nicastro – decided by the United States Supreme Court three months after Russell came down. Nicastro arose from an accident which occurred in New Jersey. Like the Appellate Court in Russell, the New Jersey Supreme Court affirmed jurisdiction, relying heavily on Asahi. But the Supreme Court reversed.
It was immaterial, the Court held, that the defendant had placed its product into the stream of commerce, and could have expected that it would wind up in New Jersey. It had not "engaged in conduct purposefully directed at New Jersey." The defendant had attended U.S. trade shows, but none in New Jersey; relatively few machines wound up there; the defendant had no office there, paid no taxes, owned no property, and didn’t advertise in New Jersey. As Justice Breyer observed in his concurring opinion, a single isolated sale, even if accompanied by a nationwide sales effort, is simply not enough.
Russell should give the Illinois Supreme Court its first opportunity to apply Nicastro. It’s bound to be a major opinion, and Appellate Strategist will be following developments closely.