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Illinois had jurisdiction over lawsuit against Idaho-based helmet manufacturer, distributor

June/July 2021

An Illinois appellate court held that the state had personal jurisdiction over a products liability lawsuit against an Idaho-based motorcycle helmet company and its Idaho-based helmet distributor.

Kevin Hernandez, who was wearing a model 68S GMAX motorcycle helmet, was operating a motorcycle on a Chicago roadway. Andrea Rodriguez was riding as his passenger while wearing a model 69S GMAX motorcycle helmet. A motorist made an abrupt U-turn in front of the motorcycle, causing a collision that resulted in serious injuries, including head injuries, for Hernandez and Rodriguez.

Hernandez and Rodriguez brought an Illinois products liability suit against Idaho-based GMAX, LLC; Idaho distributor Western Power Sports, Inc. (WPS); and Delaware distributor RevZilla Motorsports, LLC. GMAX and WPS each moved to dismiss, asserting lack of personal jurisdiction. In its motion, GMAX asserted that it had not manufactured, designed, or distributed the plaintiffs’ helmets and had not marketed its helmets in Illinois. Thus, GMAX argued, it did not have sufficient contacts with Illinois to justify personal jurisdiction.

Denying the motions, the trial court held that general jurisdiction did not exist in the case due to GMAX and WPS’s lack of continuous and systematic contacts with Illinois. Nevertheless, the court determined that specific jurisdiction existed under the broad stream-of-commerce theory. The court reasoned that WPS is a wholesale distributor of GMAX helmets, with two authorized retailers in the Chicago area, and had estimated annual revenue of approximately $6 million from Illinois sales.

Affirming, the appellate court noted that under the federal due process analysis, courts must consider whether a nonresident defendant had minimum contacts with the forum state such that the defendant was fairly warned that it may be haled into court there; the action arose out of or was related to the defendant’s contacts with the forum state; and it is reasonable to require the defendant to litigate in the forum state. The court found that the plaintiffs’ helmets were GMAX products and that GMAX was aware that its products were being marketed and sold in Illinois through authorized retailers. It is immaterial, the court said, that the retailers were authorized through WPS because WPS is GMAX’s sole distributor responsible for distributing GMAX products through the retailers. The court rejected GMAX’s argument that it lacked minimum contacts with Illinois because third parties distributed and sold its products in the state. Allowing GMAX to avail itself of the benefits of the Illinois market while exempting it from lawsuits there would allow the company to “have its cake and eat it too,” the court found. Thus, the court concluded that GMAX had the requisite minimum contacts with Illinois under the stream of commerce theory.

The court also found that the plaintiffs’ purchase and use of their helmets in Illinois demonstrated that their cause of action arose out of or was related to GMAX’s contacts with Illinois. Moreover, considering that the plaintiffs are Illinois residents who suffered head injuries in a collision occurring in the state, it is logical and fair to resolve their lawsuit there. Consequently, the trial court’s denial of the defendants’ motion to dismiss was proper.

Citation: Hernandez v. Oliveros, 2021 Ill. App. 200032 (Ill. App. Ct. Mar. 26, 2021).

Plaintiff counsel: A. Fredrick Chapekis, Chicago.