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From Products Liability Law Daily, April 19, 2013

French Helicopter Bearings Manufacturer Had Sufficient Contacts with Illinois to Be Haled into Court

By Leah S. Poniatowski, J.D.

A French aerospace bearings manufacturer was subject to personal jurisdiction in Illinois because it knowingly placed its products into the stream of commerce through a distributor that established minimum contact with the state, and the reasonableness factors favored litigating the substantive products liability claims in Illinois, the state’s highest court ruled (Russell v. SNFA, April 18, 2013, Kilbride, T.).

Background. Michael Russell was killed after his helicopter crashed during a work flight for Air Angels, Inc., an Illinois air ambulance service. His estate asserted that the accident occurred because the tail-rotor bearing failed, which caused the helicopter to spin out of control. The estate filed claims for strict products liability and negligence against SNFA, the French manufacturer of the replacement custom tail-rotor, in addition to filing similar claims against the helicopter’s Italian manufacturer, Agusta S.p.A., and its U.S.-based distributor and wholly-owned subsidiary, Agusta Aerospace Corporation, among others.

The French manufacturer moved to dismiss the claim on the ground that it was not subject to personal jurisdiction in Illinois because the manufacturer did not have the requisite contacts with the state. The manufacturer did not have property or other assets in Illinois, nor was it licensed to do business in Illinois. However, Agusta and Agusta Aerospace Corporation had sold five helicopters to Illinois customers and almost 2,200 parts manufactured by the defendant within the past ten years. Additionally, the French manufacturer had a business relationship with an aerospace machinery manufacturer located in Illinois, even entering into an agreement with the Illinois company containing a forum-selection clause providing that the agreement was to be governed and interpreted by the laws of the state of Illinois.

Personal jurisdiction. The sole issue before Illinois’ supreme court was whether the French manufacturer’s contacts with Illinois were sufficient to satisfy state and federal due process, which the estate was required to establish under Illinois’ long-arm statute. Thus, the inquiry focused on whether the manufacturer had minimum contacts with the state, and whether subjecting the manufacturer to litigation in Illinois courts was reasonable under traditional notions of fair play and substantial justice.

Minimum contacts. First, the high court determined that it could exercise specific jurisdiction because, under the stream-of-commerce theory, the Italian manufacturer and its subsidiary effectively operated as distributors of the French manufacturer’s products. The high court observed that the sole market for the bearings effectively was the Italian manufacturer. Further, the high court agreed with the analysis and conclusion drawn by a federal district court, which reasoned that despite the French manufacturer’s one or two-step removal from the sale and distribution of its bearings, the manufacturer purposefully availed itself to courts in the United States when it decided to enter and exploit the international transport market.

In addition to its relationship with the Italian companies, the French manufacturer had a long-term business agreement with an Illinois company, thus benefitting from the laws, infrastructure, and business climate of Illinois and specifically agreeing to resolve its disagreements under Illinois law. Consequently, the French manufacturer’s relationship to the Illinois company established it had minimum contacts with Illinois under the flexible standard that a claim "arise out of" or "relate to" that relationship.

Reasonableness. Finally, the high court concluded that exercising personal jurisdiction over the French manufacturer was reasonable because most of the reasonableness test factors favored the estate. The burden imposed on the manufacturer to litigate in a foreign forum—the only factor favoring the manufacturer—was given weight, but other than France, there was no other forum likely to have an interest in the case. Additionally, the issue was a substantive products liability claim, and the French manufacturer made multiple sales of its products in Illinois over the course of ten years.

Therefore, the appellate court’s determination that personal jurisdiction was proper was affirmed.

The case number is 113909.

Attorneys: Robert Marc Chemers (Pretzel & Stouffer Chartered) for Michael Russell; Brian LaCien (Power Rogers & Smith P.C.), and Todd Smith (Todd Smith Law Firm), for SFNA.

Companies: SNFA; Agusta S.p.A.; Agusta Aerospace Corporation.

MainStory: TopStory JurisdictionNews AircraftWatercraftNews IllinoisNews

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