Friday, November 10, 2017

Case of the Day: Kowal v. Westchester Wheels, Inc., 2017 IL App (1st) 152293 (Ill. App. Ct. Sept. 8, 2017)


Defendant-appellant Giant Manufacturing, a Taiwanese bicycle maker, appealed the trial court's denial of its motion to dismiss. The plaintiff-appellee purchased the bicycle from Illinois from Giant's authorized distributor, and was injured while participating in a bicycle race in Iowa. Giant Manufacturing distributed its bicycles through a Virginia corporation called Giant Bicycle. Giant Manufacturing itself had no contact with Illinois, as it was not a party to contract with an Illinois person and did not directly conduct any business in Illinois otherwise.

The court engaged in an extensive discussion of the stream-of-commerce theory in the U.S. Supreme Court jurisprudence, and found that in Nicastro, the Supreme Court endorsed a "narrow" version of the stream-of-commerce theory. But the court also noted Russell v. SNFA, 987 N.E. 2d 778 (Ill. 2013), in which the Illinois Supreme Court interpreted Nicastro and held a knowing use of an American distributor to market its product throughout the United States is sufficient minimum contacts for long-arm personal jurisdiction. Accordingly, the court denied the appeal.


Plaintiffs' counsels, get thee to Illinois right now! Amid the consisten trend across the board for U.S. courts to pull back the reach of long-arm jurisdiction, Illinois state court issued a clear directive that it would adhere to the old model of the stream-of-commerce theory under Asahi Metal. At the state court level, there seems to be a trend of resisting the federal jurisprudence on long-arm jurisdiction. (Hedger v. Medline from Delaware state court comes to mind.) The law in this area may end up developing in the same manner as the securities class action litigation, where the federal law's pull-back caused the plaintiffs to resort to the state courts that went contrary to the federal trend.

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