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No. 2--01--1015

Defendant Lube Power, Inc. (defendant or Lube Power), appealsfrom the circuit court's order that denied its motion to dismissfor lack of personal jurisdiction a complaint filed against it byplaintiff, Spartan Motors, Inc. (plaintiff or Spartan). Defendantcontends that it is not subject to personal jurisdiction inIllinois under the Illinois long-arm statute, section 2--209 of theCode 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 areMichigan corporations with their principal places of business inMichigan. Defendant sold plaintiff hydraulic pump assemblies. Itmanufactured the pump assemblies at its facility in Michigan anddelivered them to plaintiff at its facility in Michigan. Plaintiffincorporated the pump assemblies into, among other things, firetruck chassis that it sold to customers throughout the UnitedStates and abroad.

In 1995, a fire engine chassis that plaintiff had sold to theElgin fire department malfunctioned, injuring firefighter WayneSabatino. Sabatino sued Spartan and another defendant that wasapparently Spartan's local distributor. Spartan, in turn, filedthird-party actions against other parties, including Lube Power. Sabatino v. Spartan Motors, Inc., No. 97--L--221 (Cir. Ct. KaneCounty).

After investigating the Elgin incident, Spartan decided thatthe cause of the accident was a defective solenoid in the pumpassembly that Lube Power sold. Spartan believed that the samedefect was present in other products Lube Power provided andinitiated a recall to replace the allegedly defective parts. Therecall was not limited to Spartan customers in Illinois.

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

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

A plaintiff asking a court to assert jurisdiction over anonresident defendant must demonstrate a prima facie case forjurisdiction. Zazove v. Pelikan, Inc., 326 Ill. App. 3d 798, 801-02 (2001); Kalata v. Healy, 312 Ill. App. 3d 761, 765 (2000). Where, as here, the trial court decides the jurisdictional issuesolely on the basis of documentary evidence, appellate review is denovo. See Khan v. Van Remmen, Inc., 325 Ill. App. 3d 49, 53(2001); Hendry v. Ornda Health Corp., 318 Ill. App. 3d 851, 852(2000). In deciding whether jurisdiction may be asserted over anonresident defendant, courts evaluate whether jurisdiction isproper under the Illinois long-arm statute and whether jurisdictionwould comport with constitutional due process standards. Khan, 325Ill. App. 3d at 53-54.

The long-arm statute permits an Illinois court to assertjurisdiction over a nonresident defendant who performs one ofseveral enumerated acts in Illinois. 735 ILCS 5/2--209 (West2000). Section 2--209 provides, in relevant part:

"(a) Any person, whether or not a citizen or resident ofthis State, who in person or through an agent does any of theacts hereinafter enumerated, thereby submits such person, and,if an individual, his or her personal representative, to thejurisdiction of the courts of this State as to any cause ofaction arising from the doing of any such acts:

(1) The transaction of any business within thisState;

(2) The commission of a tortious act within thisState;

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

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

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

* * *

(f) Only causes of action arising from acts enumeratedherein may be asserted against a defendant in an action inwhich 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 defendantto be subject to personal jurisdiction, the defendant must havecertain "minimum contacts" with the forum state such thatmaintaining the suit there does not offend " 'traditional notionsof fair play and substantial justice.' " International Shoe Co. v.Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102, 66 S. Ct. 154,158 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed.278, 283, 61 S. Ct. 339, 343 (1940). Those minimum contacts mustbe based on " 'some act by which the defendant purposefully availsitself of the privilege of conducting activities within the forumState, thus invoking the benefits and protections of its laws.' " Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 109, 94L. Ed. 2d 92, 102, 107 S. Ct. 1026, 1030 (1987), quoting BurgerKing Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d 528, 542,105 S. Ct. 2174, 2183 (1985). This requirement ensures that analien defendant will not be forced to litigate in a distant orinconvenient forum solely as a result of random, fortuitous, orattenuated contacts or the unilateral act of a consumer or someother third person. Burger King Corp., 471 U.S. at 475, 85 L. Ed.2d at 542, 105 S. Ct. at 2183.

A court conducting a federal due process analysis mustconsider whether (1) the nonresident defendant had "minimumcontacts" 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 withthe forum state; and (3) it is reasonable to require the defendantto litigate in the forum state. Burger King Corp., 471 U.S. at471-77, 85 L. Ed. 2d at 540-44, 105 S. Ct. at 2181-84; Kalata, 312Ill. App. 3d at 768-69.

The "minimum contacts" and "fair warning" requirements aresatisfied if the defendant has purposefully directed its activitiesat Illinois residents, reached out beyond one state to createcontinuing relationships with citizens of another state, orpurposefully derived benefits from its activities within the forumstate. Alderson v. Southern Co., 321 Ill. App. 3d 832, 857 (2001);see Pilipauskas v. Yakel, 258 Ill. App. 3d 47, 56 (1994).

The meaning of the "minimum contacts" standard depends uponwhether the forum asserts "general" or "specific" jurisdiction.General jurisdiction refers to suits neither arising out of norrelated to the defendant's contacts, and it is permitted only wherethe defendant has carried on its activities in the forum state with"a fair measure of permanence and continuity, not occasionally orcasually." Hendry, 318 Ill. App. 3d at 853. Once a defendant isdetermined to be "doing business" in Illinois under section 2--209(b)(4) of the Code, the defendant is deemed to be a resident whois subject to the circuit court's general jurisdiction and may besued on causes of action both related and unrelated to its Illinoisactivities. Alderson, 321 Ill. App. 3d at 849.

Specific jurisdiction refers to jurisdiction over a defendantin a suit "arising out of or related to the defendant's contactswith the forum." Helicopteros Nacionales de Colombia, S.A. v.Hall, 466 U.S. 408, 414 n.8, 80 L. Ed. 2d 404, 411 n.8, 104 S. Ct.1868, 1872 n.8. (1984). In specific jurisdiction cases, the actionmust directly arise out of the contacts between the defendant andthe forum. Alderson, 321 Ill. App. 3d at 857. Section 2--209(a)of the Code enumerates several acts that confer specificjurisdiction 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 contactswith the forum, and one could argue that these terms suggest a two-part test for finding specific jurisdiction. However, the majorityin Helicopteros avoided determining "whether the terms 'arising outof' and 'related to' describe different connections between a causeof action and a defendant's contacts with a forum" because theparties had not raised the issue. Helicopteros, 466 U.S. at 415n.10, 80 L. Ed. 2d at 411 n.10, 104 S.Ct. at 1872 n.10. Like theCourt in Helicopteros, we decline to address whether the phrases"related to" and "arising out of" describe different standardsbecause Spartan does not argue the point.

We now turn to Spartan's contention that the circuit court hadgeneral jurisdiction over Lube Power because Lube Power was "doingbusiness" in Illinois under section 2--209(b)(4) of the Code. LubePower answered several interrogatories focused on its contacts withIllinois as they relate to the jurisdictional issue. It isundisputed that Lube Power is a Michigan corporation that has neverhad an office or permanent agent in Illinois. At all relevanttimes, Lube Power was in the business of (1) manufacturing oillubrication systems and (2) distributing power units that weremanufactured by another Michigan corporation and similar to theunits identified in Spartan's complaint. In the 21 years LubePower has been in business, Don Coppins, Lube Power's president,has attended two trade shows in Chicago, and Lube Power has soldproducts to Illinois customers 12 times. Nine of these sales wereto BP-Amoco of Tulsa, Oklahoma, which directed Lube Power to shipthe items directly to its facility in Joliet. Coppins went toNaperville four times in March 1995 for consulting purposes only. None of Coppins's trips involved the solicitation of any businessfrom Illinois residents. From 1980 to 1985, Lube Power issued twoor three catalog mailings to equipment manufacturers, but none weredirected to companies in Illinois.

"Transient contact, such as attendance at trade shows,advertising, or mere solicitation, has been rejected as ajurisdictional basis under section 2--209(b)(4)." Alderson, 321 Ill. App. 3d at 853. In this case, Coppins's trade show visits andconsulting trips were few and sporadic. Furthermore, the nine BP-Amoco sales, which Spartan emphasizes, totaled only $5,742. Spartan's claim for contract damages exceeding $50,000 dwarfs thetotal BP-Amoco sales, which appear to be a small portion of LubePower's total business. We conclude that Lube Power's transientcontact with Illinois is not the "permanence and continuity"required for general jurisdiction.

Next, we quickly dispose of Spartan's claim that itstransaction with Lube Power gave the circuit court specificjurisdiction under section 2--209(a)(1) of the Code. It isundisputed that the negotiations, execution, and performance of theparties' contract occurred entirely in Michigan and had noconnection to Illinois. Therefore, Spartan's present cause ofaction did not arise from the transaction of "any business withinthis State." 735 ILCS 5/2-209(a)(1) (West 2000).

Spartan also argues that the circuit court had specificjurisdiction under section 2--209(a)(2) because Lube Powercommitted two tortious acts: (1) a breach of its warranty and (2)the personal injury of Sabatino. It is clear that section 2--209(a)(2) does not apply to Spartan's warranty claim, which seeksa contractual remedy and does not allege that Lube Power committeda tort in Illinois. Therefore, we are left to consider whetherSabatino's alleged personal injury in Illinois could createspecific jurisdiction over Lube Power.

Spartan contends that Lube Power established minimum contactswith Illinois when (1) Lube Power placed the allegedly defectivepump assembly into the stream of commerce by selling it to Spartanand (2) it was foreseeable that the product might be used by aconsumer in another state. Spartan invokes the "stream ofcommerce" theory of specific jurisdiction that our supreme courtadopted in Gray v. American Radiator & Standard Sanitary Corp., 22Ill. 2d 432 (1961). There, Titan Valve Company (Titan) sold a partthat was incorporated into a water heater that American Radiatorsold to a consumer in Illinois. When the water heater exploded andinjured the plaintiff, she sued Titan and American Radiator, whichfiled a counterclaim against Titan. In upholding jurisdiction overTitan, the supreme court stated, "As a general proposition, if acorporation elects to sell its products for ultimate use in anotherState, it is not unjust to hold it answerable there for any damagecaused by defects in those products." Gray, 22 Ill. 2d at 442.

Since Gray, the Supreme Court has addressed the viability andscope of the "stream of commerce" theory of specific jurisdiction. In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 62 L. Ed.2d 490, 100 S. Ct. 559 (1980), a car purchased in New York wasinvolved in an accident in Oklahoma. The purchaser sued the cardealer and the regional distributor in Oklahoma. In deciding thatjurisdiction in Oklahoma was improper, the Court rejected theargument that, because the car's inherent mobility made itspresence in another state foreseeable, the nonresident defendantshad minimum contacts with Oklahoma. The Court held thatforeseeability alone is not the benchmark for personal jurisdictionunder the due process clause. World-Wide Volkswagen, 444 U.S. at295, 62 L. Ed. 2d at 500, 100 S. Ct. at 566. If this were not so,"[e]very seller of chattels would in effect appoint the chattel hisagent for service of process. His amenability to suit would travelwith the chattel." World-Wide Volkswagen, 444 U.S. at 296, 62 L.Ed. 2d at 501, 100 S. Ct. at 566.

World-Wide Volkswagen reiterated that personal jurisdictionmust be based on the defendant's conscious acts, rather than theunilateral activity of the purchaser or some third party. World-Wide Volkswagen, 444 U.S. at 298, 62 L. Ed. 2d at 502, 100 S. Ct.at 567. The Court stated in dicta that a state would not exceedits powers under the due process clause by asserting jurisdictionover a defendant that "delivers its products into the stream ofcommerce with the expectation that they will be purchased byconsumers in the forum State." World-Wide Volkswagen, 444 U.S. at297-98, 62 L. Ed. 2d at 501-02, 100 S. Ct. at 567, citing, e.g.,Gray, 22 Ill. 2d 432.

Later, in Asahi Metal Industry Co. v. Superior Court, 480 U.S.102, 94 L. Ed. 2d 92, 107 S. Ct. 1026 (1987), the Court againconfronted the issue of personal jurisdiction over a nonresidentdefendant based on the stream of commerce theory. A majority ofthe Court held that jurisdiction over Asahi Metal Industry Company,a Japanese manufacturer that supplied an allegedly defectivecomponent part, was improper under the facts of the case. Aportion of the lead opinion authored by Justice O'Connor and joinedby three other justices stated that "a defendant's awareness thatthe stream of commerce may or will sweep the product into the forumState does not convert the mere act of placing the product into thestream into an act purposefully directed toward the forum State." Asahi Metal, 480 U.S. at 112, 94 L. Ed. 2d at 104, 107 S. Ct. at1032. The opinion noted that the only remaining claim in the casewas one for indemnification by a Taiwanese distributor against theJapanese manufacturer and, therefore, California had littleinterest in resolving the dispute. Because the only remainingclaim concerned indemnification, not safety standards, the Courtrejected as "overly broad" the contention that the case implicatedthe California courts' legitimate interest in protecting Californiaconsumers. Asahi Metal, 480 U.S. at 114-15, 94 L. Ed. 2d at 106,107 S. Ct. at 1033. A separate opinion, authored by JusticeBrennan and joined by three other justices, concluded that thestream of commerce theory was an adequate basis for personaljurisdiction consistent with due process. Asahi Metal, 480 U.S. at119-20, 94 L. Ed. 2d at 109, 107 S. Ct. at 1036 (Brennan, J.,concurring, joined by White, Marshall, and Blackmun, JJ.). The twoopinions authored by O'Connor and Brennan reveal that the AsahiMetal Court left undecided the scope of the stream of commercetheory.

Nevertheless, in light of World-Wide Volkswagen and AsahiMetal, we conclude that Gray is distinguishable from this case. AsLube Power points out, the plaintiff in Gray was the actualpurchaser of the defective product. Thus, there was no questionthat the cause of action arose out of the defendant's contacts withIllinois.

Here, the plaintiff is not an Illinois resident who wasinjured by the defendant's product. The plaintiff, Spartan, isanother Michigan corporation suing Lube Power for breach ofwarranty.⁽¹⁾ If a breach of warranty occurred in this case, itoccurred when Lube Power delivered the products to Spartan at itsMichigan headquarters. Spartan concedes that its recall programcovered purchasers of its products in many states and severalforeign countries, not just Illinois. As in Asahi Metal, thepresent case involves a plaintiff attempting to recoup its economiclosses rather than protect consumers in the forum state. IfSpartan ultimately wins, the benefit will be received at Spartan'sMichigan headquarters, not in Illinois.

This case would be analogous to Gray if Lube Power had beensued by an injured consumer. In fact, Lube Power filed a generalappearance in the Sabatino litigation and did not contestjurisdiction.⁽²⁾ If the Sabatino litigation were still pending, itwould qualify as the type of minimum contacts necessary forestablishing specific jurisdiction over Lube Power in the currentmatter. However, once the personal injury case was settled, theonly remaining connection this case had with Illinois was Spartan'sdiscovery of the solenoid problem in Illinois. This is the type ofrandom, fortuitous contact that the Supreme Court has rejected asa basis for personal jurisdiction. Accordingly, the circuit courtshould have granted Lube Power's motion to dismiss for lack ofpersonal jurisdiction.

The judgment of the circuit court of Kane County is reversed.

Reversed.

GROMETER and KAPALA, JJ., concur.

1. Spartan's complaint contains a count for negligence. Itis clear, however, that the only negligence alleged is themanufacture and delivery of a defective product. It is doubtfulthat such a claim is viable under Moorman Manufacturing Co. v.National Tank Co., 91 Ill. 2d 69 (1982).

2. Spartan does not contend that defendant's entry of ageneral appearance in the Sabatino case submitted it to thecourt's jurisdiction for purposes of this case. Such a theorywould surely be inconsistent with due process.