Building on federal precedent regarding specific jurisdiction over vehicle manufacturers, the Appellate Court of Illinois recently extended personal jurisdiction to a component parts manufacturer in a decision with implications for any company that directs significant product volume to the state. In Kothawala v. Whole Leaf, LLC, 2023 IL App (1st) 210972, the component parts manufacturer was found to have submitted to personal jurisdiction based on battery sales to multiple companies for inclusion in specific products and to one distributor for resale. It was not necessary to show that sales to the lone distributor for resale were causally related to the battery’s presence in the vape pen that failed, causing injury.
In Whole Leaf, the plaintiff filed negligence and strict product liability claims against LG Chem, a subsidiary of the well-known South Korean electronics manufacturer, when one of its batteries, embedded in a vaping device, exploded in his pocket. LG Chem moved to dismiss, claiming a lack of personal jurisdiction because it did not avail itself of the vape-pen industry. Jurisdictional discovery showed that LG Chem sold nearly 2 million batteries within Illinois during the relevant period. The appellate court upheld the trial court’s exercise of specific jurisdiction, stating that LG Chem “purposefully availed itself of the laws of Illinois by intentionally selling batteries within the state, and plaintiff’s claims unquestionably relate to that business.”
Importantly, while LG Chem argued that it did not authorize the batteries’ use in vape pens per se, the court “f[ou]nd that argument relevant to liability and not personal jurisdiction.”
In conducting its minimum contacts analysis under principles of federal law, which the court found are coextensive with Illinois law, the court noted the U.S. Supreme Court’s recent expansive interpretation, in Ford Motor Co. v. Montana Eighth Judicial District Court, 592 U.S. ___, ___, 141 S. Ct. 1017, 1024 (2021), of whether a plaintiff’s claims “arise out of or relate to the defendant’s contacts with the forum.” In Ford Motor, the Supreme Court explained that the second half of that disjunctive phrase “contemplates that some relationships will support jurisdiction without a causal showing.”
After finding, with “no hesitation,” that LG Chem purposely availed itself of the privileges of doing business in Illinois because it directly sold nearly 2 million batteries into the state, the Whole Leaf court also found that the “relatedness” prong was satisfied because there was evidence LG Chem sold the battery packs at issue to at least one distributor for resale. Thus, the court found it unnecessary to answer the abstract question of whether the relatedness requirement would have been satisfied if the batteries were sold into the forum solely for inclusion in various industrial products.
The court concluded: “In the end, we are left with these facts: (1) LG Chem sold millions of the 18650 battery to businesses in Illinois, including to a distributor for resale; (2) one of its batteries found its way into plaintiff’s vape pen, which was purchased in Illinois; and (3) plaintiff is an Illinois resident who used the vape pen in Illinois and was injured when the vape pen exploded in Illinois. Under these circumstances, and given that a finding of relatedness requires something short of but-for causation under Ford, it is difficult to see how anyone could plausibly argue that plaintiff’s claims are notat least ‘related to’ LG Chem’s activities in this state.”
Lastly, as to the reasonableness of requiring LG Chem to litigate in Illinois, given the company’s extensive battery sales into the state, and presumably considerable profits therefrom, the court found “[i]t cannot come as a surprise that litigation might follow in this forum, even if the particularities of how its product was used might be unforeseen.” Illinois, the court held, has an interest in its resident suffering injury in the state from a product purchased in the state, and the plaintiff has an unquestioned interest in seeking redress.