Opinion
No. 99 C 3852
February 22, 2000
MEMORANDUM OPINION AND ORDER
This action is before the court on the motion of the defendant, Eurand International S.p.A ("Eurand"), to dismiss Eurand as a party to this suit for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 1 2(b)(2). Defendant moves in the alternative to quash service pursuant to Fed.R.Civ.P. 12(b)(5). For the following reasons, the court denies these motions.
BACKGROUND
Plaintiffs James R. Wise and Karen E. Wise, individually and as parents and next friends of Ryan Wise, a minor, reside in the State of Illinois. Defendant Eurand is a foreign corporation organized under the laws of Italy, with its principal place of business in Italy. Eurand manufactures pancreatic enzyme supplements for cystic fibrosis patients and, pursuant to an Exclusive Supply Agreement with defendant Scandipharm, Inc., distributes and sells Ultrase in the United States, including Illinois. In 1996, the plaintiff Ryan Wise, a child suffering from cystic fibrosis allegedly suffered injury in Illinois as a result of using Eurand's product, Ultrase. Plaintiffs have filed this product liability action against several defendants, including Eurand, alleging that the Eurand's product, Ultrase, was the proximate cause of plaintiffs condition.
DISCUSSION
The plaintiff bears the burden of proving facts sufficient to establish personal jurisdiction. See Steel Warehouse of Wis., Inc. v. Leach, 154 F.3d 712, 714 (7th Cir. 1998). In ruling on a motion to dismiss for lack of personal jurisdiction or a motion to quash service, the court must accept all allegations of the complaint as true, and any conflict in affidavits must be resolved in favor of the plaintiff. Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987); National Hydro Systems, A Div. of McNish Corp. v. Summit Constructors. Inc., 731 F. Supp. 264, 265 (N.D. Ill. 1989).
I. Motion To Quash Service
Since the defendant filed the motion to quash service, the plaintiff has properly served the foreign corporation Eurand pursuant to Rule 4(h)(2) of the Federal Rules of Civil Procedure, which adopts The Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil and Criminal Matters as an appropriate means for service of summons on corporations in foreign countries. Therefore, this argument is moot. Eurand has been properly served, and the motion to quash service is denied.
II. Motion To Dismiss For Lack of Personal Jurisdiction
Eurand argues that it lacks sufficient contact with Illinois to permit this court to exercise jurisdiction over it. The court has jurisdiction over a defendant "who could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located." Fed.R.Civ.P. 4(k)(1)(A). Thus, this court has jurisdiction over Eurand only if an Illinois court would have jurisdiction. Nucor Corp. v. Aceros Y Maquilas de Occidente, S.A. de C.V., 28 F.3d 572 (7th Cir. 1994).
To determine whether an Illinois court has jurisdiction over a defendant, the court must make two initial inquiries: 1) whether a state statute grants personal jurisdiction over the defendant, and 2) whether such jurisdiction is within constitutional bounds.Dehmlow v. Austin Fireworks, 963 F.2d 941, 945 (7th Cir. 1992). The expansion of Illinois' long-arm statute to allow jurisdiction to the fullest extent "permitted by the Illinois Constitution and the Constitution of the United States" makes the first inquiry somewhat superfluous. 735 ILCS 5/2-209(c). Regardless, Illinois explicitly provides for personal jurisdiction over a defendant who has committed a tortious act in Illinois, 735 ILCS 5/2-202 (a)(2), and Illinois has evidenced a desire to exercise jurisdiction in such circumstances. See, e.g., Gray v. American Radiator Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961).
In the instant case, like in Gray, since the alleged negligence in manufacturing the drug which caused the plaintiffs injury in Illinois cannot be separated from that injury, the tort was committed in Illinois. Id. at 435-46, 176 N.E.2d at 762, 763. Since Illinois' long-arm statute clearly grants jurisdiction over Eurand, the focus turns to the constitutionality of exercising personal jurisdiction over a non-resident defendant who sold its product for ultimate use in Illinois and whose product caused serious injury in Illinois to a citizen of Illinois.
Federal due process requirements allow an Illinois court to exercise jurisdiction over a nonresident defendant only if the defendant has certain "minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice'."International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The defendant must purposefully avail itself of the rights and privileges of conducting activities in the forum state such that it invokes the benefits and protections of that forum's law. See Hanson v. Denckla, 357 U.S. 235, 253 (1958). The Supreme Court has held that federal courts may properly exercise jurisdiction over a manufacturer or distributor that makes efforts "to serve directly or indirectly, the market for its product in other states." See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). If the corporation "delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State," the due process requirements are satisfied and personal jurisdiction is proper. Id.
Eurand correctly notes that the plaintiffs rely on a "stream of commerce" theory. Under that theory, "[t]he forum state does not exceed its powers under the Due Process Clause if its asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state."World-Wide Volkswagen, 444 U.S. at 297-98. Although in a later case, Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1985), a plurality of Justices attempted to narrow the stream, Illinois courts have repeatedly endorsed the more permissive "stream of commerce" theory and have resolved cases on the basis of it. See, e.g., Dehmlow, 963 F.2d at 947; Mason v. Lli Luigi Franco Dal Maschio, 832 F.2d 383, 386 (7th Cir. 1987) (holding that Illinois courts have personal jurisdiction over Italian company whose machine caused personal injury in Illinois).
Eurand contends that its activities did not meet the required minimum contacts to establish personal jurisdiction because it was only interested in the overall volume of sales in the United States and not any particular state. In addition, Eurand argues that it should not be held to the jurisdiction of this court because it had no particular knowledge of sales percentages in each state. We disagree. Due process does not "allow a manufacturer to insulate himself from the long arm of the courts by using an intermediary or by professing ignorance of the ultimate destination of his products." Honeywell. Inc. v. Metz Apparatewerke, 509 F.2d 1137, 1144 (7th Cir. 1975).
Eurand concedes that it distributes and sells drugs in the United States and that Illinois is part of the United States. Eurand does not deny that its distribution system may ultimately cause Ultrase to become available for sale in Illinois. Additionally, some evidence exists that Eurand's distributor, Scandipharm, Inc., specifically targeted Illinois as a sales target for Ultrase. If a company places its product into the stream of commerce to reap the benefits of those sales, then it should also be prepared to face the consequences of those sales. The fact that the defendant did not advertise, solicit or market in Illinois is "of minimal consequence." See Chi-Lites v. San Juan Music Group, Ltd., 98 C 3393, 1999 WL 1009862, at *4 (N.D. Ill. Oct. 19, 1999).
Additionally, the state of Illinois has a strong interest in "assuring adequate remedial relief for its citizens who have been injured" and applying its product liability laws. Dehmlow v. Austin Fireworks, 963 F.2d 941, 945 (7th Cir. 1992). Although we realize that it is a burden on Eurand to defend itself in a foreign judicial system, we believe that the significant interests of both the plaintiff and the State of Illinois in protecting its citizens outweighs this burden. Thus, exercising jurisdiction over the defendant comports with traditional notions of fair play and justice.
CONCLUSION
For all of the foregoing reasons, the motion of Eurand International S.p.A. to dismiss this case for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) is denied. The motion of defendant to quash service pursuant to Fed.R.Civ.P. 12 (b)(5) is also denied.
It is so ordered.