# Petition for Writ of Certiorari — DeHavilland Aircraft of Canada, Ltd. v. Maunder

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_2328%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1984
- **Citation:** 469 U.S. 1036

## Text

t FivLe VD

oo a/f)
84-512] | sep 26 1984

No. ALEXANDER L. STEVAS.
LERK

In THE

Supreme Court of the Anited States

OctoserR TERM, 1984

DeHAVILLAND AIRCRAFT OF CANADA, LTD.,

Petitioner,
vs.

CRISPIN MAUNDER and SAMUEL J. BETAR, Public
Administrator of Cook County, Administrator
of the Estate of RAGHUBIR DUTT LAW, Deceased,

Respondents.

PETITION FOR WRIT OF CERTIORARI
TO THE SUPREME COURT OF ILLINOIS

Huey C. Grirrin *

RicHarp EK. MvuELLER

Tuomas J. STREUBER

LORD, BISSELL & BROOK
115 South LaSalle Street
Chicago, Illinois 60603
(312) 443-0700

* Attorney of Record Attorneys for Petitioner

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

i

QUESTIONS PRESENTED FOR REVIEW

1) Does this Court’s decision in Cannon Mfg. Co. v.
Cudahy Co., 267 U.S. 333 (1925)—holding that the forum
state presence and activities of a wholly-owned subsidiary
do not constitute the presence and activities of the parent
for purposes of asserting in personam jurisdiction over
the parent—still have ‘‘vitality’’?

2) Regardless of the status of Cannon, did the Illinois
Supreme Court’s upholding of Illinois jurisdiction over
the Canadian Petitioner, for a product made in Canada
and an accident occurring in Africa having nothing to do
with Illinois or with Petitioner’s subsidiary in Illinois,
violate Petitioner’s constitutional rights under the due
process clause of the Fourteenth Amendment of the United
States Constitution?

ii

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED FOR REVIEW .. i
TABLE OF AUTHORITIES .....0.scaccseces iv
GAN URPEN TEAM can ckssncnacseexsaneoear ‘
Pith 0) yy err errr rrr rr err erry

APPLICABLE CONSTITUTIONAL
ie gt ere ee ree rr ery rrr ere

STATEMENT OF THE CASE ...............

Non-Illinois Accident Involving Non-Illiiois
CRUD 5 kcneuncaccecedsuesanenseneueeans 3

Fo Pe es
Subsidiary Corporation Dismissed From Suits . 5

Service Of Process On Employee Of Sub-
GN SOURS onc cadectiiiascdeeassongeuens 5

Due Process—Jurisdictional Issue Raised By
oe a eS errr ee 5

Facts Pertaining To Petitioner—DeHavilland
Aisoreie GE CORBA. BA. <6 cineca bdducaadens 6

Facts Pertaining To Subsidiary Corporation—
DeHavilland Canada, Inc. (Not A Party) ..

i mS Ot ee ee
Illinois Appellate Court ..................
Illinois Supreme Court ...................

© co co

ill

REASONS RELIED ON FOR ALLOWANCE
OF THE WRIT:

I.

THE CONFLICT AMONG THE STATES AND
CIRCUITS ON THE VITALITY OF THE
CANNON DECISION SHOULD BE SETTLED
HE BME GRPUPEEE wo cis scccnccewcsncscnces 10

The Conflicting State And Federal Case Law
Over The “Vitality” Of Cannon Demonstrates
The Need For This Court’s Review ...... 12

Il.

REGARDLESS OF THE STATUS OF CANNON,
SUBJECTING PETITIONER CANADIAN COR-
PORATION TO ILLINOIS JURISDICTION FOR
A CAUSE OF ACTION ARISING IN AFRICA
AND HAVING NOTHING TO DO WITH ILLI-
NOIS, CONFLICTS WITH PRIOR DECISIONS
OF THIS COURT AND VIOLATES PETI-
TIONER’S RIGHT TO DUE PROCESS OF LAW
UNDER THE FOURTEENTH AMENDMENT . 15

Conflict With Prior Decisions Of This Court . 15

SEE cow Rcd ncnvdnansssecsececcesecs 17

APPENDIX

Decision Of Illinois Supreme Court, Rendered
FF og Ae ee App. 1

Decision Of Illinois Appellate Court, Rendered
Om Pemruery 16, IBGS .....cccccccccces App. 14

Decision Of Illinois Circuit Court, Rendered On
i cc Pek wees OAC NOR eso reese App. 22

iv

TABLE OF AUTHORITIES

Cases

ASC Industries, Inc. v. Keller Industries, Inc., 296

F. Supp. 1160 (D.C. Conn. 1969) .......... 14
Boryk v. deHavilland Aircraft Co., 341 F.2d 666

OE STUD havc cen snncccvececasveccess 13
Brunswick Corp. v. Suzuki Motor Co., Ltd., 575

F. Supp. 1412 (E.D. Wis. 1983) ............ 14
Calder v. Jones, ..... US. ....., 79 L. Ed. 804, 104

i ee 2 PPP ree 15, 16
Cannon Mfg. Co. v. Cudahy Packing Co., 292 Fed.

WED CUr eR. TEAL. TER 00 e vesiciccccnecswcancs 10
Cannon Mfg. Co. v. Cudahy Co., 267 U.S. 333

i ERE rre rer erTTryTer tr re Tro te passim
Crow Tribe v. Mohasco Indus., 406 F. Supp. 738

TF. MU Wek dncekaebsdcnnacdcetanves 12
DeWalker v. Pueblo International, Inc., 569 F.2d

Se Ge a hn 68 Kdcbuneee cis cnscccs 12, 13
Energy Reserves Group, Inc. v. Superior Oil Co.,

460 F. Supp. 483 (D. Kan. 1978) .......... 13, 14
Farkas v. Texas Instruments, Inc., 429 F.2d 849

Ce Gi UE hoch nks cess eccecnencss cases 12
Frito-Lay, Inc. v. Procter & Gamble Co., 364 F.

Supp. 143 (W.D. Tex. 1973) ............... 13
Harris v. Deere and Co., 223 F.2d 161 (4th Cir.

SEE chk ddahkencndakd ban Wekes cheeneseEs és 12
Helicopteros Nationales de Columbia v. Hall, .....

US. ....., 80 L. Ed.2d 404, ..... S. Ct. ..... (1984) . 15, 16
Hitt v. Nissan Motor Co., Ltd., 399 F. Supp. 838

GR. Fs HO aS hace vase caas ices cuasss 13

Internaticnal Shoe Co. v. Washington, 326 U.S.
De? SE Wi wiwn’ ce Ceadeub webs cesiunes wes 15

V

Keeton v. Hustler Magazine, ..... i) , 2 A
Ed.2d 790, 104 S. Ct. 1478 (1984) .........
McPheron v. Penn Central Transp. Co., 390 F.
Supp. 943 (D. Conn. 1975) ................
Shaffer v. Heitner, 483 U.S. 186 (1977) .......
Smith v. Piper Aircraft Corp., 425 F.2d 823 (5th
RRR Roan rete cian Sn
Wells Fargo & Co. v. Wells Fargo Exp. Co., 556
ee | ene
Williams v. Canon, Inc., 432 F. Supp. 376 (C.D.
Se NE Ni Gnas cbs a vhs ha Rea WebRss

a MUU novisankccenes<ctakeubewes

Constitutional Provisions and Statutes

U.S. Const. Amend. XIV ....................
errr men

16

12
15

12

13

12

16

nN ©

In Tue

Supreme Court of the United States

Ocroser Term, 1984

DeHAVILLAND AIRCRAFT OF CANADA, LTD.,
Petitioner,
vs.

CRISPIN MAUNDER and SAMUEL J. BETAR, Public
Administrator of Cook County, Administrator
of the Estate of RAGHUBIR DUTT LAW, Deceased,

Respondents.

PETITION FOR WRIT OF CERTIORARI
TO THE SUPREME COURT OF ILLINOIS

Petitioner, DeHavilland Aircraft of Canada, Ltd., a
Canadian corporation, prays that a Writ of Certiorari issue
to review the judgment and opinion of the Illinois Su-
preme Court. The Illinois Supreme Court reversed the
Circuit Court of Cook County and held that the Illinois
presence and activities of Petitioner’s subsidiary enabled
Illinois to properly assert in personam jurisdiction over
Petitioner in a case where Petitioner manufactured an
airplane in Canada that crashed in Africa giving rise to
claims on behalf of citizens of India and Great Britian.

alin
OPINIONS BELOW

The Opinion of the Illinois Supreme Court appears at
102 Ill.2d 342 and 466 N.E.2d 217 and 80 Ill. Dec. 765
(1984) and is printed in the Appendix hereto (App. 1-13).
The Appellate Court opinion is reported at 112 Ill. App.3d
879, 445 N.E.2d 1303 (1983) and is also printed in the Ap-
pendix (App. 14-21). The Circuit Court’s order granting
Petitioner’s .Jotion to Dismiss for lack of personal juris-
diction is not reported, but is also printed in the Appen-
dix (App. 22-25).

JURISDICTION

The Opinion and judgment of the Illinois Supreme Court
was entered on June 29, 1984. This Petition for Certiorari
is timely filed within 90 days of that date, 28 U.S.C.
§2101(c). The statutory provision granting jurisdiction to
the Court is contained in 28 U.S.C. §1257 as follows:

“$1257. State courts; appeal; certiorari

Final —— or decrees rendered by the highest
court of a State in which a decision could be had.
may be reviewed by the Supreme Court as follows:

* * *

(3) By writ of certiorari, where the validity of a
treaty or statute of the United States is drawn in
—— or where the validity of a State statute is

wn in question on the ground of its being repug-
nant to the Constitution, treaties, or laws of the
United States, or where any title, right, privilege or
immunity is specially set up or claimed under the
Constitution, treaties or statutes of, or commission
held or authority exercises under, the United States.”

alin
APPLICABLE CONSTITUTIONAL PROVISION

The constitutional provision applicable to this case is
contained in Section 1 of Amendment XIV of the United
States Constitution as follows:

“Constitution of the United States, Amendment XIV:

Section 1. All persons born or naturalized in the
United States, and subject to the jurisdiction thereof,
are citizens of the United States and of the State
wherein they reside. No State shall make or enforce
any law which shall abridge the privileges or im-
munities of citizens of the United States; nor shall
any State deprive any person of life, liberty, or prop-
erty, without due process of law; nor deny to any
~_- within its jurisdiction the equal protection of
the laws.”

STATEMENT OF THE CASE

Non-Illinois Accident Involving
Non-Illinois Citizens

These wrongful death and injury claims, brought on
behalf of citizens of India and Great Britian, have no fac-
tual connection with Illinois whatsoever.

1) The accident occurred on May 3, 1976 in Zambia,
Central Africa during a demonstration flight for the Zam-
bian Air Force (R. C3).*

° hw record references are to the Betar case unless otherwise
noted.

ellis

2) The injured respondent, Crispin Maunder, is a
British citizen who at the time of the occurrence was the
commercial manager for Autair Helicopters Cafrical Lim-
ited of Luseka, Zambia (Maunder, R. C8).

3) The decedent, Raghubir Dutt Law, was a citizen of
India and a member of the Zambian Air Force. (R. C8).
His widow and children are all Indian nationals (R. C2).

4) The aircraft involved, a “Twin Otter”, was manufac-
tured by Petitioner DeHavilland Aircraft of Canada, Ltd.
(“Ltd.””) in Downsview, Ontario, Canada (R. C77, C180)
and carried Canadian Registration No. C-6-DWA (R. C77).

5) The plane was never in Illinois or even in the United
States for any purpose at any time (R. C77).

6) The complaints alleged negligent operation of the
plane in Zambia by Amos Pudsey, an alleged agent of De-
Havilland Aircraft of Canada, Ltd., and defective design
and/or manufacture of the plane by Ltd. in Canada (R.
C4-C9).

Litigation
Canada

On May 6, 1977, Mr. Law’s widow Urmela Law, a
citizen of India and a resident of Zambia (R. C559), filed
suit against DeHavilland Aircraft of Canada, Ltd. in the
Supreme Court of Ontario, Canada (No. 12969) (R.
C552-C560).

Illinois

On March 17, 1977, Crispin Maunder, a citizen of Bri-
tian residing in Africa, filed an action for personal injuries
in the Circuit Court of Cook County (Cause No. 77 L

~

5215) (Maunder, R. C2-C8). On April 28, 1977, suit was
also filed in the Circuit Court of Cook County by the
Public Administrator of Cook County ox behalf of the
estate of Raghubir Dutt Law and his dependents, all of
whom were Indian nationals (Cause No. 77 L 8087) (R.
C2-C3).

Subsidiary Corporation
Dismissed From Suits

In their attempt to obtain Illinois jurisdiction over De-
Havilland of Canada, Ltd. for this accident having nothing
to do with Illinois, respondents named as an additional
defendant, DeHavilland Canada, Inc., a subsidiary of Peti-
tioner and a Delaware corporation with its principal place
of business in Rosemont, Illinois. However, the subsidiary
company had nothing to do with the airplane involved in
this occurrence and it was subsequently voluntarily dis-
missed from both suits (R. C565).

Service Of Process On Employee
Of Subsidiary Only

No service of process in ei her case was ever obtained
upon any officer or employee of Petitioner. Instead, the
Circuit Court summons and complaint was left with Bar-
bara Schuett, an office employee of the subsidiary cor-
poration working in Rosemont. (Betar, R. C14, C265;
Maunder, R. C25).

Due Process—Jurisdictional Issue
Raised By Motions To Dismiss

Both the Maunder and Betar cases were originally
removed to the Federal District Court for the Northern
District of Illinois. The Maunder case was quickly re-

- =

manded since the federal court lacked jurisdiction over
a suit between aliens, i.e., a British subject and a Cana-
dian corporation (Maunder, R. C43). The Betar case was
originally dismissed by the federal district court for lack
of personal jurisdiction over the Canadian defendant
(R. C55-C63). On appeal, the Seventh Circuit Court of Ap-
peals did not reach the basic jurisdictional issue. Rather,
it held that the Betar case too should have been remanded
since the Illinois Public Administrator had no “stake” in
the action and thus the suit was also between aliens, i.e.,
citizens of India against a Canadian corporation. Betar v.
DeHavilland Aircraft of Canada, Ltd., 603 F.2d 30 (7th
Cir. 1979), cert. denied, 444 U.S. 1098 (1980) (Betar, R.
C44).

On remand to the Illinois Circuit Court, DeHavilland
Aircraft of Canada, Ltd. renewed its motion to quash ser-
vice of summons and to dismiss both cases for lack of per-
sonal jurisdiction (R. C52). Discovery was undertaken with
respect to the jurisdictional issue and the parties were
permitted to file affidavits, depositions and other docu-
ments in support of their positions.

Facts Pertaining To Petitioner—
DeHavilland Aircraft of Canada, Ltd.

Petitioner DeHavilland Aircraft of Canada, Ltd., is a
Canadian corporation with its plant in Downsview,
Ontario, Canada (R. C340, C346). Its corporate offices and
principal place of business are in Ontario (R. C76). Peti-
tioner has no offices, plants, factories or other place of
business in Illinois (R. C76). It has no officers, directors
or employees living, residing or stationed in the State of
Illinois (R. C402). It is not qualified, authorized or other-
wise licensed or entitled to do business in Illinois (R.

=

C403). It does not own, lease or use any real estate in
the State of Illinois (R. C76, C401). It does not hold any
licenses, charters, or permits granted or issued by the
State of Illinois or by any Illinois agency or by any county
or municipal government in Illinois (R. C76, C514). It pays
no Illinois taxes and has no registered agent of any other
authorized agent for receipt of process in Illinois (R. C402,
C514).

Facts Pertaining To Subsidiary Corporation—
DeHavilland Canada, Inc. (Net a Party)

DeHavilland Canada, Inc., a Delaware corporation with
its principal place of business in Rosemont, Illinois, is a
wholly-owned subsidiary of DeHavilland Aircraft of
Canada, Ltd. (R. C105). The subsidiary’s sole business is
the sale of aircraft parts for DeHavilland airplanes (R.
C204), C483). It purchases these parts both from Peti-
tioner in arms-length transactions (R. C59) and from 80
other independent parts suppliers throughout the coun-
try (R. C251, C252, C439, C561-C564). The subsidiary has
kept its separate corporate identity at all times. It has its
own management, its own Chicago auditors, keeps its own
corporate records, pays its own taxes and its own operating
expenses, and funds its own separate pension plan for its
own employees (R. C522, C524, C549, C553-C554).

The subsidiary maintains its own parts inventory and
its own warehouse in Rosemont, Illinois from which it ships
parts directly to its customers (R. C55). Purchase deci-
sions and prices on parts purchased and resold by the sub-
sidiary are set exclusively by the subsidiary’s manager
and director Mr. Jay Cox (R. C195-C236, C250-C251, C256,
C260, C544-C548).

=

Illinois Circuit Court

The Circuit Court granted Petitioner’s motion to dismiss
with a written order providing in part as follows:

“The instant litigation involves the crash in Africa
of a plane manufactured in Canada causing the death
of two residents of India. Jt cannot be said that these
facts are clearly ‘within the ambit of the state’s
legitimate protective policy”. The contacts with this
state involve a separate subsidiary corporation which
supplies parts for DeHavilland aircraft, however, no
activities of this subsidiary are in any way involved
in the basic litigation. There is no contention that the
subsidiary supplied parts for the plane involved in
the crash. There is some evidence that the parent
exercised some control of the subsidiary both in start-
ing up the business and with respect to the line of
authority, however, the evidence does not show that
the subsidiary was a mere sham or alter ego. Fur-
— the subsidiary did not manufacture or sell air-
craft.

“Analyzing the nature and quality of the contacts
with the State of Illinois, this court cannot say that
it would be fair and reasonable to require DeHavil-
land Aircraft, Ltd., a Canadian Corp., to defend this
action in Illinois.”” (R. C703-C794) (Emphasis added.)

Illinois Appellate Court

On February 16, 1983, the Illinois Appellate Court
reversed the Circuit Court’s dismissal order and held that
the Canadian defendant’s contacts with its Illinois resi-
dent subsidiary were sufficient “minimum contacts” for
general jurisdiction purposes (App. 19-20), thus subjecting
Petitioner to Illinois jurisdiction for all causes of action
arising everywhere and anywhere. Maunder v. DeHavilland

-

Aircraft of Canada, Ltd., 112 Ill. App.3d 879. 445 N.E.2d
1303 (1983).

‘Hinois Svyreme Court

The Illinois Supreme Court affirmed the Appellate
Court’s reversal of the Circuit Court on the basis of the
Illinois activities, not of Petitioner, but of its subsidiary
(“Ine.”): “Ine. has been operating in Illinois for 13 years
and these operations have been continuous and systema-
tic” (102 I1].2d at 350), and Petitioner “through Inc., was
doing business in Illinois” (102 IIl.2d at 352) (emphasis
added.)

Aware that its decision basing jurisdiction on the ac-
tivities of Petitioner’s subsidiary was contrary to this
Court’s holding in Cannon Mfg. Co. v. Cudahy Packing
Co., 267 U.S. 333 (1925), the Illinois Supreme Court
disposed of Cannon by stating (102 IIl.2d at 353):

“Although Cannon has not been expressly overruled,
its vitality has been \imited by the subsequent deci-

sions in International Shoe and its progeny.” (Em-
phasis added)

Petitioner, DeHavilland Aircraft of Canada, Ltd., now
seeks this Court’s review of the Illinois Supreme Court’s
decision. The determination of the continuing “vitality”
of Cannon should be made by this Court, not the IIli-
nois Supreme Court.

wiles,

REASONS RELIED ON
FOR ALLOWANCE OF THE WRIT

i.

THE CONFLICT AMONG THE STATES AND CIRCUITS
ON THE VITALITY OF THE CANNON DECISION
SHOULD BE SETTLED BY THIS COURT.

While the Illinois Supreme Court stated that this Court’s
decision in Cannon Mfg. Co. v. Cudahy Co., 267 U.S. 333
(1925) has “limited vitality’’ (102 U.S. at 353), the Illinois
court interpreted Cannon in a way that leaves it with
“no vitality”.

In Cannon, this Court held that North Carolina could
not assert jurisdiction over Cudahy, a Maine corporation
not licensed to do business in North Carolina, even though
Cudahy had a wholly-owned Alabama subsidiary (with
many common officers and directors)* licensed and doing
business in North Carolina as “the instrumentality em-
ployed to market Cudahy products within the State” (267
_U.S. at 335). Moreover, in Cannon it was established that:

1) The subsidiary bought the parent’s products and
resold them to dealers in the state (267 U.S. at 335).

2) The products were shipped directly from the
parent to the in-state dealers (267 U.S. at 335).

3) Through ownership of the capital stock or other-
wise, the parent ‘“dominated”’ the subsidiary corpora-
tion “immediately and completely;” (267 U.S. at 335)

4) The parent “exerts its control both commercial-
ly and financially in substantially the same way, and

* See Cannon Mig. Co. v. Cudahy Packing Co., 292 Fed. 169,
172, 176 (W.D. N.C. 1928).

wiles

mainly through the same individuals, as it does over
those selling branches or departments of its business
not separately incorporated which are established to
market the Cudahy products in other states” (267
U.S. at 335);

Even with this evidence of “ownership,” “control,” and
“domination” (not present in the case at bar), this Court
held that the formal separateness maintained between the
two corporations was sufficient to prevent the acts of the
subsidiary from being considered the acts of the parent
for purposes of personal jurisdiction. The Court reasoned
(at 335-338):

“The existence of the Alabama Company as a
distinct corporate entity is, however, in all respects
observed. Its books are kept separate. All transactions
between the two corporations are represented by ap-
propriate entries in their respective books in the same
way as if the two were wholly independent corpora-
tions ...
* * *

“The defendant wanted to have business transactions
with persons resident in North Carolina, but for rea-
sons satisfactory to itself did not choose to enter the
State in its corporate capacity. It might have con-
ducted such business through an independent agency
without subjecting itself to the jurisdiction. Bank of
America v. Whitney Central National Bank, 261 U.S.
171. It preferred to employ a subsidiary corporation.

* * *

“(W]hatever might be other legal consequences of the
concentration, we cannot say that for purposes of
jurisdiction, the business of the Alabama
in North Carolina became the business of the defen-
dant.”” (Emphasis added)

This Court has never overruled or “limited’’ Cannon’s
holding that the presence and activities of a wholly-owned
subsidiary are not attributable to the parent company “for
purposes of jurisdiction” (Cannon, 267 U.S. at 338).

The Conflicting State And Federal Case Law
Over The ‘‘Vitality’’ Of Cannon Demonstrates
The Need For This Court’s Review

In recent years, Cannon has been followed in numerous
jurisdictions including the First, Fourth and Fifth Circuits:
1. DeWalker v. Pueblo International, Inc., 569

F.2d 1169 (1st Cir. 1978) (activities of wholly-owned

New York subsidiary not attributable to parent Dela-
ware corporation);

2. Farkas v. Texas Instruments, Inc., 429 F.2d 849
(1st Cir. 1970) (Massachusetts lacked jurisdiction over
parent corporation whose subsidiary was doing busi-
ness within the state);

3. Harris v. Deere and Co., 223 F.2d 161 (4th Cir.
1955) (Illinois defendant corporation not chargeable
with activities of wholly-owned North Carolina sub-
sidiary corporation selling defendant’s products);

4. Smith v. Piper Aircraft Corp., 425 F.2d 823 (5th
Cir. 1970) (Georgia activities of Florida distributor not
attributable to Piper, a Pennsylvania corporation);

5. Williams v. Canon, Inc., 482 F. Supp. 376 (C.D.
Cal. 1977) (activities of wholly-owned US subsidiary
doing business in California not attributable to Japanese
corporation);

6. McPheron v. Penn Central Transp. Co., 390 F.
Supp. 943 (D. Conn. 1975) (activities of Connecticut
holding company not attributable to parent Pennsy]-
vania corporation);

7. Crow Tribe v. Mohasco Indus., 406 F. Supp. 738
(D. Mont. 1975) (Montana court lacked jurisdiction

=

over nonresident parent corporation where formal
a was maintained between it and its sub-
ary doing business within the state);

8. Frito-Lay, Inc. v. Procter & Gamble Co., 364
F. Supp. 248 (W.D. Tex. 1973) (Texas had no jurisdic-
tion over Procter & Gamble Co., even though a wholly-
owned subsidiary, with common officers and directors,
Procter & Gam le Distrib. Co., did substantial busi-
ness and sales of Gamble products in Texas).

Illustrative of the holdings in these cases is this adher-
ence to Cannon in DeWalker v. Pueblo International,
Inc., supra, 569 F.2d at 1172:

“In determining whether a parent is ‘doing busi-
ness’ in a state for purposes of personal jurisdiction,
the Supreme Court has held that a separately incor-
porated subsidiary operating in a state ordinarily
may not be considered to be the parent for purposes
of determining whether the parent is doing business
there (citing Cannon).”’ Suchen added)

In contrast, the following courts, including the Second
and Ninth Circuits, have expressly or impliedly rejected
Cannon:

1. Wells Fargo & Co. v. Wells Fargo Exp. Co.,
556 F.2d 406, 423 (9th Cir. 1977) (activities and
presence of Nevada subsidiary attributable to Liech-
tenstein corporation);

2. Boryk v. deHavilland Aircrajt Co., 341 F.2d 666

(2d Cir. 1965) (Deiaware subsidiary’s New York ac-
tivities attributable to British parent);

3. Energy Reserves Group, Inc. v. Superior Oul
Co., 460 F. Supp. 483 (D. Kan. 1978) (parent corpora-
tion’s Kansas activities attributable to British sub-
sidiary);

4. Hitt v. Nissan Motor Co., Ltd., 399 F. Supp.
838 (S.D. Fla. 1975) (activities of U.S. subsidiary at-
tributable to Japanese parent);

eile

5. ASC Industries, Inc. v. Keller Industries, Inc.,
296 F. Supp. 1160, 1163 (D.C. Conn. 1969) (activities
of wholly-owned Connecticut subsidiary attributable
to Florida parent);

6. Brunswick Corp. v. Suzuki Motor Co., Ltd., 575
F. Supp. 1412 (E.D. Wis. 1983) (forum state activities
of subsidiary attributed to Japanese parent in uphold-
ing Wisconsin jurisdiction over parent).

An example of the view of these cases is this statement
in Energy Reserves Group, Inc. v. Superior Oil Co.,
supra, 460 F. Supp. at 490:

“The Court secondly holds that formal separation
of corporate identities does not raise a constitutional
barrier to the exercise of jurisdiction over a non-
resident whose affiliated corporation has a substan-
tial nexus with the forum. This follows from the con-
clusion that the time-honored doctrine of Cannon
Manufacturing Co. v. Cudahy Packing Co., 267 U.S.
333, 45 S.Ct. 250, 69 L.Ed. 634 (1925), must no longer
be followed. The Court finds Cannon to be limited
in scope or modified in holding by International Shoe
and its hg og Reliance on the rule of Cannon is
unsound when extraterritorial service is authorized
by statute and when personal jurisdiction is predi-
cated on the due process standards of International
Shoe.”” (Emphasis added)

It is thus apparent that the status of the Cannon rule
is an issue of national and international significance on
which this Court’s guidance is urgently needed, not only
by Petitioner, but by all parent corporations and their sub-
sidiaries. The issue is squarely presented by the facts of
this case and should be resolved at this time for the bene-
fit of state and federal courts everywhere.

i

REGARDLESS OF THE STATUS OF CANNON, SUB-
JECTING PETITIONER CANADIAN CORPORATION TO
ILLINOIS JURISDICTION FOR A CAUSE OF ACTION
ARISING IN AFRICA AND HAVING NOTHING TO DO
WITH ILLINOIS, CONFLICTS WITH PRIOR DECISIONS
OF THIS COURT AND VIOLATES PETITIONER’S RIGHT
TO DUE PROCESS OF LAW UNDER THE FOURTEENTH
AMENDMENT.

The guiding constitutional principles applicable to the
jurisdictional issue presented herein are embodied in the
“minimum contacts” standard first announced by this
Court in International Shoe Co. v. Washington, 326 U.S.
310 (1945) and recently reiterated in Calder v. Jones, .....
US. ....., 79 L. Ed. 804, 104 S. Ct. 1482 (1984), citing
Shaffer v. Heitner, 433 U.S. 186, 204 (1977) and stating:

“In judging minimum contacts, a Court properly
focuses on the relationship among the defendant, the
forum and the litigation.” (104 S. Ct. at 1486)

In the instant case, the litigation has no relationship at
all with the Illinois forum or with any activities of the
Petitioner or its subsidiary in Illinois. Upholding jurisdic-
tion on the facts of this case, simply does not comport
with any jurisdictional-due process formula ever announced
by this Court. Moreover, the recent decisions of this Court
relied upon by the Illinois Supreme Court are directly con-
trary to upholding Illinois jurisdiction over Petitioner in
this case.

Conflict With Prior Decisions Of This Court
The Illinois Supreme Court cited this Court’s decision

in Helicopteros Nationales de Columbia v. Hall, ..... US.
‘atom , 80 L. Ed.2d 404, ..... S. Ct. ..... (1984). But in Hall,

=

this Court held that Texas could not constitutionally assert
in personam jurisdiction over a Columbian corporation for
an accident which occurred in Peru, even though the
foreign corporation did substantial business in Texas and
that business had at least an indirect connection with the
occurrence, i.e., the helicopter involved in the accident was
one of many purchased in Texas by the Columbian defen-
dant and the contract pursuant to which plaintiff's de-
cedent was being transported at the time of the accident
was negotiated by defendant in Texas (104 S. Ct. at 1870,
1874).

The instant case does not have even such tangential con-
nections with I!linois. Nothing about this case has any-
thing to do with Illinois or with any Illinois activity of
Petitioner or its subsidiary.

The Illinois Supreme Court also cited Calder v. Jones,
sensi USS. ....., 79 L. Ed.2d 804, 104 S. Ct. 1482 (1984) and
Keeton v. Hustler Magazine, ..... USS. ....., 79 L. Ed.2d
790, 104 S. Ct. 1478 (1984). But in these libel cases, this
Court upheld a finding of a long-arm jurisdiction over
defendants since the libel actually occurred and caused
injury in the forum state. (104 S. Ct. at 1478-1479, 1486-
1487).

In the case at bar, no tort occurred in Illinois, no in-
jury occurred there, and long-arm jurisdiction was not
even asserted.

On the facts of this case, there is simply no basis on
which Petitioner could or should have “reasonably antici-
pate[d] being haled into court” in Illinois, World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980),
and the due process clause “in its role as guarantor
against inconvenient litigation” should serve to protect
Petitioner from having to defend this case in Illinois
(Woodson, 444 U.S. at 292).

=_ =

If the Illinois Supreme Court’s holding is correct, a
foreign corporation may now be sued in the state where
its subsidiary is located for each and every conceivable
accident and event no matter where it occurs and no
matter that it has absolutely no connection with the sub-
sidiary or with any of the subsidiary’s activities. Such an
unprecedented result ignores the basic principles of juris-
dictional due process, and certainly should not become the
law of any state without this Court’s review.

CONCLUSION

To decide the continued vitality of a landmark decision
and thereby resolve the conflict and confusion among the
states, circuits and districts on the parent/subsidiary juris-
dictional issue and also to align the Illinois Supreme
Court’s decision in this case with the basic principles of
jurisdictional due process, Petitioner DeHavilland Aircraft
of Canada, Ltd. respectfully requests that a Writ of Cer-
tiorari issue to review the judgment and Opinion of the
Illinois Supreme Court herein.

Respectfully submitted,

Hucu C. GrIFFin *

RICHARD E. MUELLER

THOMAS J. STREUBER

LORD, BISSELL & BROOK
115 South LaSalle Street
Chicago, Illinois 60603
(312) 443-0700

* Attorney of Record Attorneys for Petitioner

APPENDIX

App. 1

Decision Of Illinois Supreme Court
Rendered On June 29, 1984

(No. 58108.—Affirmed and remanded.)

CRISPIN MAUNDER, Appellee, v. DEHAVILLAND AIRCRAFT

OF CANADA, LTD., Appellant.—SAMUEL J. BETAR, Adm’r,

Appellee, v. DEHAVILLAND AIRCRAFT OF CANADA, LTD.,
Appellant.

JUSTICE CLARK delivered the opinion of the court:

This appeal requires us to determine whether the cir-
cuit court of Cook County has jurisdiction over DeHavil-
land Aircraft of Canada, Ltd., a foreign corporation. More
specifically, we are asked to determine whether the defen-
dant was doing business in Illinois in order to be amenable
to service of process and subject to the laws of this State.

These consolidated actions to recover for personal in-
jury and wrongful death are based on the crash of an
airplane designed and manufactured by defendant, De-
Havilland Aircraft of Canada, Ltd. (Ltd.). The airplane
crash occurred on May 3, 1976, in Lusaka, Zambia, dur-
ing a demonstration flight for the Zambian Air Force and
caused the death of Raghubir Dutt Law, a citizen of
India and a member of the Zambian Air Force. Mr. Law’s
widow and children are also Indian citizens. Plaintiff
Crispin Maunder, an English citizen and a passenger
in the aircraft, was injured in the same crash. In April
1977, Samual J. Betar, public administrator of Cook Coun-
ty, was appointed administrator of the estate of decedent
Law by the probate division of the circuit court of Cook
County. On April 28, 1977, Betar filed suit in the circuit

App. 2

court of Cook County against Ltd. and DeHavilland
Canada, Inc. (Inc.), a Delaware corporation with its prin-
cipal office and principal place of business in Rosemont,
Illinois. Inc. is a wholly owned subsidiary of Ltd. and sells
and distributes parts for airplanes manufactured by Ltd.

On March 17, 1977, Crispin Maunder filed suit in the
circuit court of Cook County against Inc. and Ltd. Ser-
vice in the Law and Maunder suits was effectuated by
leaving copies of the complaint and summons with an em-
ployee of Inc. in the Rosemont office.

On May 27, 1977, the defendants filed petitions to
remove both causes to the United States District Court
for the Northern District of Illinois. Inc. was voluntarily
dismissed from both causes, leaving Ltd. as the sole defen-
dant. A protracted procedural battle ensued in Federal
court. Both causes were eventually remanded to the cir-
cuit court of Cook County because there was no diver-
sity of citizenship between aliens Maunder (England), Law
(India) and Ltd. (Canada). Betar v. DeHavilland Aircraft
of Canada, Ltd. (7th Cir. 1979), 603 F.2d 30, cert. denied
(1980), 444 U.S. 1098, 62 L. Ed. 2d 785, 100 S. Ct. 1064.

On May 20, 1981, the circuit court granted Ltd.’s mo-
tion to dismiss, noting:

“Analyzing the nature and quality of the contacts
with the State of Illinois, this court cannot say that
it would be fair and reasonable to require DeHavil-
land Aircraft Ltd., a Canadian Corp., to defend this
action in Illinois.”

The appellate court reversed the circuit court’s order
and remanded the cause to the circuit court, ruling that
Ltd.’s Illinois subsidiary, Inc., provided sufficient contacts
to invoke the jurisdiction of Illinois courts. (112 Ill. App.
3d 879.) We granted defendant’s petition for leave to ap-

App. 3

peal. (87 Ill. 2d R. 315(a).) We now affirm the decision
of the appellate court.

Ltd.’s corporate offices and principal place of business
are in Downsview, Ontario. Ltd. has manufactured “Twin
Otter” propeller-driven planes for many years, and these
pianes are used all over the world for short passenger
flights. The record reveals that there were 885 DeHavil-
land Ltd. aircraft operating in the United States in 1982.
In 1971, Ltd. established a subsidiary corporation, De-
Havilland Canada, Inc., to facilitate Ltd.’s business opera-
tions in the United States. Inc. is a wholly owned sub-
sidiary of Ltd., and all of Inc.’s stock is owned by Ltd.
The salaries of Inc.’s directors are paid by Ltd., and Ltd.
guaranteed Inc.’s lease in Rosemont. The record reveals
that an average of eight telephone calls per day were
made from Inc.’s office to the parent’s office in Ontario.
The subsidiary’s sole business is the sale of aircraft parts
for DeHavilland aircraft. The manual of Inc. provides the
following descriptions of the relationship between Ltd. and
Inc.:

“DeHavilland Aircraft of Canada has incorporated a

subsidiary company in the United States of America.
The registered name and address of the Company is:

DEHAVILLAND CANADA INC.
5321 North Pearl Street
Rosemont Illinois 60018

The Company is controlled by the Parent Company
and will operate under the authority of the Vice
President [of] Sales. The function of this Company
is to provide Product Support to the American users
of the Parent Company’s products.”

Ltd. has included Inc. in advertisements published in
American aviation journals. One full-page advertisement
contained the following claims:

App. 4

‘“‘How to carry 3 million passengers an
average of 42 miles each.
And make it pay.

* * *

In the last 10 years, Golden West has flown over
168,400,000 passenger miles, making it the largest
commuter airline in the U.S.A. Their 12 Twin Otters
have made an astonishing 1,387,000 landings. * * *

* * * (Dje Havilland Twin Otter proves 99.9% reli-
able. Rugged airframe and simple systems keep main-
tenance to a minimum. Quiet turboprops with TBOs
of over 8,000 hours conserve fuel, and reverse to

shorten landings and extend brake life.

Golden West President James M. Harmon sums up
his passengers’ satisfaction with Twin Otter: “They
know they can depend on its comfort, convenience
and on-time reliability.’ And to short haul operators,
that’s pure gold.

The de Havilland Aircraft of Canada, Limited
Downsview, Ontario M38K 1Y5

Telephone: (416) 633-7310

Telex: 0622128. Cable: MOTHTOR, Toronto.

DE HAVILAND Twin Otter

The standard of dependability and versatility
around the world.

Twin Otter service and spares support also avail-
able through de Havilland Canada Inc., 5321
North Pearl Street, Rosemont, Illinois 60018.
Telephone (312) 678-8380. Telex 00726409.”

In this appeal, we are only concerned with the issue
of jurisdiction. The merits of this case have never been
addressed in more than seven years of litigation. We begin
our discussion of the jurisdictional arguments by noting
that the plaintiffs do not contend that Illinois courts have
jurisdiction based on the long-arm statute (Ill. Rev. Stat.
1981, ch. 110, par. 2-209). Rather, the plaintiffs contend

App. 5

that Ltd.’s contacts with Illinois constituted “doing busi-
ness” in Illinois, thus subjecting Ltd. to the personal juris-
diction of Illinois courts.

The United States Supreme Court has determined that
a State’s power to enter in personam judgments bind-
ing on nonresident defendants is limited by the due
process clause of the fourteenth amendment (U.S. Const.,
amend. XIV) (due process guarantees made applicable to
the States by the fourteenth amendment). Criteria for
such determinations were delineated in International Shoe
Co. v. Washington (1945), 326 U.S. 310, 90 L. Ed. 95, 66
S. Ct. 154. State courts may invoke personal jurisdiction
over a nonresident defendant that has minimum contacts
with the forum, so long as the suit does not offend
“ ‘traditional notions of fair play and substantial justice.’ ”
(326 U.S. 310, 316, 90 L. Ed. 95, 102, 66 S. Ct. 154, 158.)
The court noted:

“Whether due process is satisfied must depend rather
upon the quality and nature of the activity in rela-
tion to the fair and orderly administration of the laws
which it was the purpose of the due process clause
to insure. * * * [T]Jo the extent that a corporation ex-
ercises the privilege of conducting activities within
a state, it enjoys the benefits and protection of the
laws of that state. The exercise of that privilege may
give rise to obligations, and, so far as those obliga-
tions arise out of or are connected with the activities
within the state, a procedure which requires the cor-
poration to respond to a suit brought to enforce them
can, in most instances, hardly be said to be undue.”
326 U.S. 310, 319, 90 L. Ed. 95, 104, 66 S. Ct. 154,
160.

Our review of subsequent United States Supreme Court
cases supports our determination that Ltd. is subject to
the jurisdiction of Illinois courts. In Keeton v. Hustler

App. 6

Magazine (1984), _._. U.S. ___, 79 L. Ed. 2d 790, 104
S. Ct. 1473, a unanimous court ruled that New Hamp-
shire could exercise in personam jurisdiction over a
nonresident magazine publisher that had circulated his
publication in New Hampshire. The court noted that New
Hampshire was chosen as the forum State because New
Hampshire’s statute of limitations for libel provided a
longer period of time than the statute of limitations of
other States. Similarly, the court found no due process
violation in Calder v. Jones (1384), ___. U.S. ___, 79 L.
Ed. 2d 804, 104 S. Ct. 1482. In Calder, another unanimous
court determined that a California court could exercise
in personam jurisdiction over Florida journalists, even
though the allegedly libelous article was written and
published in Florida and the only contact with the forum
State was the circulation of the article. Although these
two cases deal with libel and not airplane crashes, we
believe that the due process considerations in Keeton and
Calder support our determination in the case at bar.

Business contacts must be of a continuous and system-
atic nature to invoke the jurisdiction of State courts. In
Helicopteros Nacionales de Columbia v. Hall (1984), ___
U.S. ___, 80 L. Ed. 2d 404, 104 S. Ct. 1868, the United
States Supreme Court held that a nonresident Columbian
corporation was not subject to in personam jurisdiction
of the State courts of Texas. Helicopteros (Helicol) had
entered into a contract to provide helicopter transporta-
tion in Peru for the Peruvian State oil company. Four
American citizens were killed in a helicopter crash in
Peru, and suit was brought in a Texas court. The court
held that Helicol’s contacts with Texas were insufficient
to satisfy the requirements of the due process clause of
the fourteenth amendment. The court noted:

App. 7

“Helicol never has been authorized to do business in
Texas and never has had an agent for the service
of process within the State. It never has performed
helicopter operations in Texas or sold any product
that reached Texas, never solicited business in Texas,
never signed any contract in Texas, never had any
employee based there, and never recruited an em-
ployee in Texas. In addition, Helicol never has owned
real or personal property in Texas and never has
maintained an office or establishment there.” _ _
US. , , 80 L. Ed. 2d 404, 409, 104 S. Ct.
1868, 1871.

We contrast this with the business contacts between
Ltd. and the State of Illinois. Ltd. established a wholly
owned subsidiary in Illinois to provide product support
for the users of Ltd.’s products. Inc. has been operating
in Illinois for 13 years, and these operations have been
continuous and systematic. Inc. has been included in Ltd.’s
American advertising, and has been an essential compo-
nent of Ltd.’s business activities in Illinois. We believe
that the case at bar, unlike Helicopteros, presents a pat-
tern of continuous and systematic business activities, and
these contacts are sufficient to invoke the jurisdiction of
Illinois courts.

In Illinois, jurisdiction over nonresident corporations
doing business in the State is based on the following
statutory provision:

“A private corporation may be served (1) by leav-
ing a copy of the process with its registered agent
or any officer or agent of said corporation found any-
where in the State; or (2) in any other manner now
or hereafter permitted by law. A private corporation
may also be notified by publication and mail in like
manner and with like effect as individuals.” Ill. Rev.
Stat. 1981, ch. 110, par. 2-204.

App. 8

A determination of whether a foreign corporation is
doing business in the State of Illinois turns on the facts
unique to each case. (Cf. Cook Associates, Inc. v. Lexing-
ton United Corp. (1981), 87 Ili. 2d 190; Connelly v. Uni-
royal, Inc. (1979), 75 Ill. 2d 393.) We have been unable
to fashion a precise test or talismanic phrase to guide us
in this task. (See Waits, Values, Intuiiions and Opinion
Writing: The Judicial Process and State Court Jurisdic-
tion, 1983 U. Ill. L. Rev. 917.) Justice Cardozo defined
the term “doing business” for jurisdictional purposes as
the corporation operating within the State “not occasional-
ly or casually, but with a fair measure of permanence and
continuity.” Tauza v. Susquehanna Coal Co. (1917), 220
N.Y. 259, 267, 115 N.E. 915, 917.

Early decisions of this court required that a corpora-
tion have agents or physical offices in this State, and that
these agents do more than mere solicitation of business.
(Booz v. Texas & Pacific R.R. Co. (1911), 250 Ill. 376; see
also Eaton, Illinois Replaces “Profit” for “Presence” in
Determining Long-Arm Jurisdiction Over Foreign Cor-
porations, 69 Ill B.J. 676, 678 (1981).) Technological change
and a more sophisticated national economy mandated a
departure from the restrictive rule in Booz, and this step
was taken in Braband v. Beech Aircraft Corp. (1978), 72
Ill. 2d 548. In Braband, plaintiffs’ decedents were killed
while aboard an aircraft that crashed in Frobisher Bay,
Northwest Territories, Canada. Beech Aircraft Corpora-
tion was a Delaware corporation with its principal place
of business in Kansas. The defective airplane had been
manufactured in Kansas, but Beech had an agreement
with Hartzog Aviation, Inc., an Illinois corporation, to
market Beech’s products within Illinois. This court held
that Beech was “doing business”’ in Illinois even though
the activities of Hartzog Aviation were not related to the

App. 9

subject matter of the litigation. The Braband court de-
clined to decide the question of whether Hartzog’s ac-
tivities alone would subject Beech to the jurisdiction of
Illinois courts but based the decision on the business ac-
tivities of Beech. The court noted:
“In view of defendant’s activities within Illinois de-
signed to effect sales to residents of Illinois, defen-
dant could reasonably assume that airplanes which
it manufactured would be owned by residents of IIli-
nois and in view of the high de of mobility
peculiar to its products could er assume that
they would be flown both within Illinois and into
other States, or as in this instance, to other coun-
tries. We hold, therefore, that * * * defendant’s ac-
tivities showed sufficient contacts with this State so
that requiring it to defend this action does not of-
fend ‘traditional notions of fair play and substantial
justice.’ ””’ 72 Ill. 2d 548, 559.

In the case at bar, we believe that Ltd. had sufficient
contacts with Illinois to invoke the jurisdiction of Illinois
courts. The record demonstrates that Inc. was a wholly
owned subsidiary of Ltd., and that Inc. operated in Rose-
mont, Illinois, as a supply depot for Ltd. products for the
entire United States. Clearly Ltd., through Inc., was
doing business in Illinois.

Defendant urges us to follow the decision in People ex
rel. Compagnie Nationale Air France v. Giliberto (1978),
74 Ill. 2d 90, where this court held that the circuit court
of Cook County could not entertain an action arising out
of the events surrounding the Israeli rescue of a terrorist-
held plane at Entebbe Airport in Uganda. We find Air
France distinguishable because it involved a determina-
tion of lack of jurisdiction over Air France because of the
Warsaw Convention governing international air transpor-
tation (74 Ill. 2d 90, 108) and a related determination that

App. 10

forum non conveniens principles precluded the exercise
of jurisdiction over Singapore Airlines (74 Ill. 2d 99,
108-16). Air France did not squarely involve the “doing
business” test for jurisdiction over a nonresident corpora-
tion. The case at bar is not comparable.

Defendant argues that Cannon Manufacturing Co. v.
Cudahy Packing Co. (1925), 267 U.S. 333, 69 L. Ed. 634,
45 S. Ct. 250, warrants a reversal of the appellate court’s
holding. In Cannon, the United States Supreme Court
held that the activities of a subsidiary corporation did not
automatically subject the parent corporation to the juris-
diction of the State court where the subsidiary was
domiciled. Although Cannon has not been expressly over-
ruled, its vitality has been limited by the subsequent deci-
sions in International Shoe and its progeny. (See Com-
ment, A New Footnote in Erie v. Tompkins: “Cannon
is Overruled,” 36 N.C. L. Rev. 181 (1958); see generally
Wellborn, Subsidiary Corporations in New York: When
Mere Ownership is Enough to Establish Jurisdiction Over
the Parent, 22 Buffalo L. Rev. 681 (1973).) Many commen-
tators have noted that the Cannon opinion is no longer
followed in an era when the United States Supreme Court
focuses on “contacts” rather than “physical presence”’ in
determining the scope of State court jurisdiction over non-
resident defendants. (See Kurland, The Supreme Court,
the Due Process Clause, and the In Personam Jurisdic-
tion of State Courts From Pennoyer to Denckla: A Re-
view, 25 U. Chi. L. Rev. 569 (1958); see generally Bril-
mayer, How Contacts Count: Due Process Limitations on
State Court Jurisdiction, 1980 S. Ct. Rev. 77.) Even an
expansive reading of Cannon does not justify the conclu-
sion that a parent corporation can never be subject to
the jurisdiction of a State where a subsidiary is located.
We conclude that Cannon does not prevent the State of
Illinois from exercising jurisdiction over Ltd.

App. 11

Ltd.’s contention that service of process on Inc. was not
effective is without merit. We believe that Inc. was an
agent of Ltd. for service of process, and that Ltd. was
fully apprised of the pendency of the suit by the delivery
of a copy of the complaints and summons at Inc.’s office
in Rosemont. Davis v. Dresback (1876), 81 Ill. 393.

We next consider Ltd.’s argument that Illinois cannot
exercise jurisdiction over Ltd. because none of the plain-
tiffs had any contact with Illinois. We believe the crucial
question is whether due process prevents the plaintiffs
from suing Ltd. in Illinois, not whether any of the plain-
tiffs are domiciled here. The nature of air-crash litigation
frequently produces an exotic cast of characters, and there
is often no ideal place to try the case. (See Simpson, Re-
cent Trends in International Aviation Accident Litigation—
A Practical View. 5 Annals Air & Space Law 189 (1980);
2 J. Kennelly, Litigation and Trial of Air Crash Cases
ch. 4.) Ltd.’s argument that the case should be tried in
Zambia or Canada is misdirected. This appeal is based
on the question of jurisdiction, nor forum non conveniens.
Although many of the occurrence witnesses reside in
Africa, and although it may be more convenient for Ltd.
to defend this lawsuit in Canada because its main offices
are located there, that cannot affect our determination of
the extent of jurisdiction of Illinois courts. If Ltd. can-
not be sued in Illinois, it follows that Ltd. cannot be sued
anywhere in the United States under the theory of “doing
business,” since Inc. is the only subsidiary of Ltd. in the
United States. We believe that a corporation that has
established a supply depot in Illinois to support an enter-
prise that has sold 885 airplanes in the United States and
logged millions of passenger miles should be subject to
the jurisdiction of Illinois courts.

App. 12

Since we have determined that Inc. was doing business
in Illinois, we need not address the alternative theory of
whether Inc. was the alter ego of Ltd. We therefore con-
clude that Ltd. was doing businez* in Illinois and that
Illinois courts have jurisdiction over this cause of action.
The judgment of the appellate court is affirmed, and the
cause is remanded to the circuit court for proceedings con-
sistent with the views expressed in this opinion.

Affirmed and remanded.

JUSTICE SIMON, specially concurring:

I concur in the court’s conclusion that Illinois has juris-
diction over this case, but not for the reason given, name-
ly that the Canadian corporation is doing business in IIli-
nois merely because it has a subsidiary corporation here.
Rather, I would hold that Inc. is an alter ege of Ltd.

The record shows that Inc. exists for the sole purpose
of selling Ltd.’s products within the United States, that
Ltd. provides Inc. with inventory for which Inc. is per-
mitted to pay out of receipts on the sales of that inven-
tory, and that Ltd. owns all of Inc.’s stock. Inc. is over-
seen, not by a board of directors of its own, but by Ltd.’s
board of directors, all Canadians, and two of whose mem-
bers also serve as president and vice-president of both
Ltd. and Inc. In addition, the position of “resident direc-
tor and manager” of Inc. ranks on Inc.’s official organ-
izational chart with its “service manager” and “spare
parts manager” and two levels below its executive of-
ficers, both of whom are directors and officers of Ltd. The
officers of Inc. are paid by Ltd., as are expenses for busi-
ness trips on behalf of Inc. Finally, in addition to the sub-
stantial name identity between “De Havilland Aircraft of

App. 13

Canada, Ltd.” and “De Havilland Canada, Inc.,” Inc. is
described in Ltd’s Illustrated Parts Catalogue as one of
three “De Havilland Canada Products Support Depot{s].”

In short, Inc. exhibits few of the independent character-
istics of a subsidiary company but behaves functionally
as a branch of Ltd. and holds itself out to the public to
be so. Under these circumstances Inc. is properly viewed
as an instrumentality or alter ego of Ltd., and Illinois has
general jurisdiction over Ltd. based on Inc.’s activities
here. See Leach Co. v. General Sani-Can Manufacturing
Corp. (7th Cir. 1968), 393 F.2d 183; Boryk v. deHavilland
Aircraft Co. (2d Cir. 1965), 341 F.2d 666; Top Form Mills,
Inc. v. Sociedad Nationale Industria Applicazioni Viscosa
(S.D.N.Y. 1977), 428 F. Supp. 1237; Captain International
Industries, Inc. v. The Westbury, Chicago, Inc. (N.D. Ill.
1975), 416 F. Supp. 721; Tokyo Boeki (U.S.A.), Inc. v. SS
Navarino (S.D.N.Y. 1971), 324 F. Supp. 361.

App. 14

Decision of Illinois Appellate Court,
Rendered on February 16, 1983

CRISPIN MAUNDER, Plaintiff-Appellant, v. DEHAVILLAND

AIRCRAFT OF CANADA, LTD., Defendant-Appellee.—(Samuel

J. Betar, Public Adm’r of Cook County, Adm’r of the Es-

tate of Raghubir Dutt Law, Deceased, Plaintiff-Appellant,

v. DeHavilland Aircraft of Canada, Ltd., Defendant-
Appellee.)

First District (8d Division) Nos. 81-1527, 81-1528 cons.
Reversed and remanded.

PRESIDING JUSTICE MCNAMARA delivered the opinion of
the court:

These consolidated actions for persona] injury and
wrongful death arose from the crash of an airplane
manufactured by defendant DeHavilland Aircraft of
Canada, Ltd., a Canadian corporation. The trial court
granted defendant’s motion to quash service of summons
and dismissed both causes for lack of jurisdiction. Plain-
tiffs appeal.

An airplane manufactured by defendant crashed on May
3. 1976, in Zambia, Central Africa. As a result of the
crash, plaintiff Crispin Maunder, a passenger and English
subject, was injured. Another passenger, Raghubir Dutt
Law, a citizen of India, was killed. Maunder and Samuel
J. Betar, an Illinois citizen and administrator of Law’s
estate, filed separate suits in the circuit court of Cook
County against defendant for personal injuries and
wrongful death. Plaintiffs also named as a defendant
DeHavilland Canada, Inc. (DeHavilland, Inc.), a Delaware

App. 15

corporation with its principal place of business in Rose-
mont, Illinois. DeHavilland, Inc., is a wholly owned sub-
sidiary of defendant and sells and distributes parts for
airplanes manufactured by defendant. Service of the com-
plaint and summons for both actions was affected upon
defendant and DeHavilland, Inc., by leaving service on
an employee of DeHavilland, Inc.. at its Illinois office.

Pursuant to petitions filed by defendant, the cases were
removed to the United States District Court for the
Northern District of Illinois. While the matters were
pending in that court, DeHavilland, Inc., was dismissed
as a party defendant. The district court granted Maunder’s
motion to remand his action to the circuit court of Cook
County on the ground that the Federal Court was without
jurisdiction, the suit being between aliens. A similar mo-
tion filed by Betar was denied on the ground that diver-
sity did exist between Betar, as administrator, and de-
fendant. The court subsequently found that defendant was
not doing business in Illinois and granted defendant’s mo-
tion to dismiss.

On appeal, the Seventh Circuit Court of Appeals re-
versed the district court’s denial of Betar’s motion to re-
mand, holding that Betar was merely a nominal plaintiff
and that therefore, like Maunder, the suit was between
aliens. (Betar v DeHavilland Aircraft of Canada, Ltd. (7th
Cir. 1979), 603 F.2d 30, cert. denied (1980), 444 U.S. 1098,
62 L. Ed. 2d 785, 100 S. Ct. 1064.) The district court was
instructed to remand the case to the circuit court of Cook
County. The issue of personal jurisdiction was not ad-
dressed.

Upon remand to the circuit court, defendant renewed
its motions to quash service of summons and to dismiss
both actions for lack of personal jurisdiction. Specifically,

App. 16

defendant alleged that it was not subject to service of
process under the long-arm statute (Ill. Rev. Stat. 1979,
ch. 110, par. 17), and that DeHavilland, Inc., was not its
agent for service of process in Illinois. After the cases
were consolidated and discovery was pursued with respect
to the jurisdictional issue, the trial court granted defen-
dant’s motion to dismiss.

On appeal, plaintiffs do not base their jurisdictional argu-
ment on the long-arm statute. They do not maintain that
the airplane involved in the crash was ever in Illinois or
that any of its parts had been handled, sold or otherwise
connected with defendant’s Illinois subsidiary. Rather,
plaintiffs urge that defendant’s activities within Illinois are
sufficient to constitute “doing business” here thus sub-
jecting it to the personal jurisdiction of the Illinois courts.
Alternatively, plaintiffs argue that DeHavilland, Inc., is
merely an alter ego of defendant and that defendant has
therefore submitted to personal jurisdiction in [Illinois
through DeHavilland, Inc.’s, systematic and continuous ac-
tivities within this State. We initially address the claim
that defendant’s activities in Illinois are sufficient to con-
stitute “doing business.”

In Illinois, jurisdiction may be acquired over a nonresi-
dent for a cause of action unrelated to the corporation’s
activities in this State so long as the corporation is do-
ing business in Illinois. (Braband v. Beech Aircraft Corp.,
(1978), 72 Ill. 2d 548, 382 N.E.2d 252, cert. denied (1979),
442 U.S. 928, 61 L. Ed. 2d 296, 99 S. Ct. 2857.) There
is no all-inclusive test for determining whether a foreign
corporation is doing business in this State. (Cook
Associates, Inc. v. Lexington United Corp. (1981), 87 IIl.
2d 190, 429 N.E.2d 847.) Such finding, however, general-
ly requires that the corporation conducts business in IIli-
nois of such a character and extent as to warrant the in-

App. 17

ference that it has subjected itself to the jurisdiction and
laws of Illinois. (Cook Associates, Inc. v. Lexington United
Corp.) More than mere solicitation generally is required.
(St. Louis-San Francisco Ry. Co. v. Gitchoff (1977), 68
Ill. 2d 38, 369 N.E.2d 52.) Nevertheless, jurisdiction has
been found based on a variety of other activities. In Git-
choff a foreign railroad with no Illinois tracking was held
to be amenable to Illinois jurisdiction because it main-
tained an office in Illinois staffed with employees who
solicited business and one employee who spent 60% to
80% of his working time in Illinois coordinating the
movements of defendant’s railcars. In Connelly v.
Uniroyal, Inc. (1979), 75 Ill. 2d 393, 389 N.E.2d 155, ap-
peal dismissed (1980), 444 U.S. 1060, 62 L. Ed. 2d 738,
100 S. Ct. 992, a product liability action, a foreign cor-
poration was found to be doing business in Illinois because
its products regularly entered Illinois in substantial
amounts. In Braband v. Beech Aircraft Corp., which is
factually similar to the present case, defendant manufac-
turer was held to be present and doing business in IIli-
nois because it maintained a contractual relationship with
an Illinois distributor who, subject to defendant’s inspec-
tion, was authorized to sell and required to service de-
fendant’s products. Defendant also cosponsored an Illinois
sales program and advertised its products in Illinois.

Unlike Beech Aircraft, there is no contractual relation-
ship between defendant here and DeHavilland, Inc., nor
is DeHavilland, Inc., required to service defendant’s prod-
ucts. In other respects, however, the justification for juris-
diction in the present case appears to be as strong or even
stronger than that in Beech Aircraft.

Similar to the distributor in Beech Aircraft, DeHavil-
land, Inc.’s, sole business is to sell and distribute
parts for defendant’s airplanes. DeHavilland, Inc., is in

App. 18

fact defendant’s only distributor in the United States.
Defendant prints and distributes an “Illustrated Parts
Catalog”’ which provides that all orders for parts in the
United States should be directed to DeHavilland, Inc. All
orders for parts received by defendant from its customers
in the United States are likewise referred to DeHavilland,
Inc. For the first six years of its existence DeHavilland,
Inc., merely ordered parts from defendant as it re-
ceived orders from defendant’s customers. It then paid
defendant from proceeds of the sale. In 1974 DeHavilland,
Inc., expanded its inventory and began to pay defendant
within 30 days of shipment. Some standard parts are pur-
chased by DeHavilland, Inc., directly from suppliers in
the United States. DeHavilland, Inc., also has some discre-
tion as to pricing.

The control exercised by defendant over DeHavilland,
Inc., appears to be greater than that exercised by the
defendant in Beech Aircraft over its Illinois distributor.
Defendant owns 100% of DeHavilland, Inc.’s, stock. James
B. Cox, manager and sole director of DeHavilland, Inc.,
was previously a service representative for defendant. He
is directly responsible to Russell Bannock, president of
DeHavilland, Inc., and of defendant. All the officers, with
one exception, serve both corporations. They are likewise
responsible to Bannock, not Cox. Stanley Kerr, DeHavil-
land’s secretary-treasurer, made occasional trips to Chi-
cago to discuss financing for potential customers with local
banks. Expenses for these trips were paid by defendant.
Defendant and DeHavilland, Inc., used a combined finan-
cial statement.

Defendant in the present case, as in Beech Aircraft,
entered the Illinois market by way of its distributor,
which was also its wholly owned subsidiary. Defendant
regularly and systematically reaped substantial profits

App. 19

through the sale of its parts by its Illinois subsidiary. The
fact that these sales were conducted indirectly through
a third party does not excuse defendant from the juris-
diction of Illinois courts. (Connelly v. Uniroyal, Inc.) In
light of the control exercised by defendant over DeHavil-
land, Inc., coupled with its own activities directed at pro-
moting the sale of its product in Illinois, we hold that de-
fendant is actively and systematically doing business in
Illinois and is therefore subject to the jurisdiction of Illi-
nois cou~ts.

Defendant relies on Cannon Manufacturing Co. v.
Cudahy Packing Co. (1925), 267 U.S. 333, 68 L. Ed. 634,
45 S. Ct. 250, primarily to dispute plaintiffs alter ego
theory. Nevertheless, to the extent that defendant relies
on Cannon for its argument that defendant is not doing
business in Illinois we believe that such reliance is
misplaced. As noted in Beech Aircraft, Cannon was decided
more than 20 years prior to International Shoe Co.
v. Washington (1945), 326 U.S. 310, 90 L. Ed. 95, 66 S.
Ct. 154, the decision in which the focus of the court on
jurisdictional questions shifted from a defendant’s
“presence” in the forum State to his “minimum contacts”
therewith. Consequently, Cannon merely purports to hold
that conducting business through a wholly owned sub-
sidiary does not necessarily render the parent corpora-
tion amenable to process in the State where the sub-
sidiary does business. Braband v. Beech Aircraft Corp.

Having determined that defendant is doing business in
Illinois, we next turn to the question of whether subject-
ing it to Illinois jurisdiction violated due process. Under
the due process clause of the fourteenth amendment there
are limits to which a State is confined in asserting in per-
sonam jurisdiction over a nonresident corporate defen-
dant. First, it must appear that defendant had such

App. 20

“minimum contacts” with the State as to render it con-
sistent with “traditional notions of fair play and substan-
tial jus. ve” that it be compelled to defend itself there.
(International Shoe Co. v. Washington (1945), 326 U.S.
310, 90 L. Ed. 95, 66 S. Ct. 154.) Second, assuming the
requisite minimum contacts, a method of service must be
employed which is reasonably designed to give defendant
actual notice of the action pending against it. Milliken
v. Meyer (1940), 311 U.S. 457, 85 L. Ed. 278, 61 S. Ct.
339.

In determining whether it is reasonable to require de-
fendant to defend this suit in Illinois, we must focus on
the quality and nature of defendant’s activities here. (In-
ternational Shoe Co. v. Washington.) In view of defen-
dant’s activities directed at promoting the sale of its prod-
ucts in Illinois and the profits which defendant regularly
reaped as a result of such activities, we find that it does
not offend traditional notions of fair play and substantial
justice to require defendant to defend this action in Illinois.

Having found that jurisdiction over defendant in Illinois
is both in accord with Illinois law and within the confines
of due process, we next address the question of whether
defendant was properly served. Since defendant was not
personally served in Canada and since the cause of ac-
tion is unrelated to defendant’s activities in Illinois, proper
service could have been effected by serving an officer or
agent of defendant found within the State. Ill. Rev. Stat.
1977, ch. 110, par. 13.3.

Plaintiffs attempted to serve defendant by leaving copies
of the complaints and summons with an employee of De-
Havilland, Inc., at its Illinois office. In its motion to
dismiss, defendant contended that this method of service
was improper because DeHavilland, Inc., was not an agent
of defendant for purposes of service of process pursuant

App. 21

to section 13.3. We do not agree. In Beech Aircraft, as
in the present case, service on the foreign defendant was
accomplished through service on its Illinois distributor.
Having found that Beech was doing business in Illinois
through its Illinois distributor, the court also found the
distributor to be the agent of Beech and thus a proper
recipient of service of process upon Beech. (Braband v.
Beech Aircraft Corp. (1977), 51 Ill. App. 3d 296, 367
N.E.2d 118.) Likewise in the present case we find that
DeHavilland, Inc., was an agent of defendant for purposes
of service of process.

Defendants also argue, relying on Mason v. Freeman
National Printing Equipment Co. (1977), 51 Ill. App. 3d
581, 366 N.E.2d 1015, that even if DeHavilland, Inc., was
an agent of defendant, the requirements of section 13.3
were not satisfied because a mere employee of the agent
was served. We note that this issue was not raised by
defendant in its motions to dismiss. We also find that
Mason is distinguishable. In that case neither defendant
nor his agent were actually given notice of the complaint
prior to the ex parte judgment that was entered. In the
present case there is no question that defendant received
actual notice. It is obvious, therefore, that plaintiffs’ method
of service at least met the requirements of due process.

In view of our holding, we need not address plaintiffs’
contention that DeHavilland, Inc., is merely an alter ego
of defendant and that defendant has therefore submitted
to jurisdiction in Illinois.

For the foregoing reasons, the judgment of the circuit
court of Cook County dismissing plaintiffs’ causes of ac-
tion are reversed and the causes are remanded for fur-
ther proceedings.

Reversed and remanded.
MCGILLICUDDY and WHITE, JJ., concur.

App. 22

Decision of Illinois Circuit Court,
Rendered on May 20, 1981

IN THE
CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT—LAW DIVISION

BETAR
-VS.-
DEHAVILLAND
and
MAUNDER
-VS.-

No. 77 L 8087

No. 77 L 5215

ee ee ee ee

DEHAVILLAND

ORDER

This cause coming on to be heard upon the special and
limited appearance and motion to quash and dismiss
presented by DeHavilland Aircraft of Canada, Ltd., the
court being fully advised in the premises;

This court finds that the case of Cannon v. Cudahy,
267 U.S. 333 did not involve a constitutional question and
is not solely dispositive of the issues in this case. Can-
non does, however, reflect traditional notions of fair play
and substantial justice.

The court further finds that the standards applicable
to this case are contained in Worldwide Volkswagen v.
Woodson, 444 U.S. 286, Braband v. Beech Aircraft, 72

App. 23

Ill.2d 548, U.A.L. Conductron, 69 Ill.App.3d 847 at page
852, and in addition Cook Associated v. Lexington United,
86 Ill.App.3d 909.

Worldwide reiterates the Constitutional standards in
terms of “minimum contacts.” The concept, according to
the Supreme Court, performs two related functions: 1)
protection of the defendants against the burdens of litigating
on a distant or inconvenient forum, and 2) ensurers against
individual states over-reaching under the federal system.

With respect to 1) above, the court stated: “The pro-
tection against inconvenient litigation is typically described
in terms of ‘reasonableness’ or ‘fairness’. We have said
that the defendant’s contacts with the forum state must
be such that maintenance of the suit ‘does not offend
traditional notions of fair play and substantial justice’. (Cita-
tions omitted.) The relationship between the defendant and
the forum must be such that it is reasonable to require
the corporation to defend the particular suit which is
brought there” (emphasis supplied). Among other factors to
be considered is the forum state’s interest in adjudicating
the dispute.

In Braband the Illinois Supreme Court specifically did
not decide that the activities of the distributor-agent were
sufficient minimum contacts to establish jurisdiction in Illi-
nois. Rather the court found that Beech itself, conducted
sufficient activities in Illinois to meet the minimum con-
tacts test. It is important to note that the court in Bra-
band did not merely find minimum contacts, but went
further, as required by International Shoe and Shafer and
analyzed “the quality and nature of the activities in which
the defendant was engaged and whether it is reasonable
to require defendant to defend the particular suit which
is brought here.” In this analysis the court first noted

App. 24

that the suit was brought on behalf of Illinois residents
for death occurring on a flight originating in Illinois—
“clearly within the ambit of the states [sic.] legitimate pro-
tective policy.” Secondly, the court analyzed the contacts
in light of the nature of the litigation, concluding its
analysis as follows:

“In review of defendant’s activities within Illinois designed
to effect sales to residents of Illinois, defendant could
reasonably assume that airplanes which it manufactured
would be owned by residents of Illinois and in view of
the high degree of mobility peculiar to its products could
further assume that they would be flown both within IIli-
nois and into other states, or as in this instance, to other
countries. Conductron at page 852 further reiterates this
analysis and notes that it is not merely the contracts [sic.]
but the nature of the contacts which must be analyzed
to determine whether it is fair to require a defendant to
defend in Illinois.

The instant litigation involves the crash in Africa of a
plane manufactured in Canada causing the death of two
residents of India. It cannot be said that these facts are
clearly “within the ambit of the states [sic.] legitimate pro-
tective policy”. The contacts with this state involve a
separate subsidiary corporation which supplies parts for
DeHavilland aircrafts, however, no activities of this sub-
sidiary are in any way involved in the basic litigation.
There is no contention that the subsidiary supplied parts
for the plane involved in the crash. There is some evi-
dence that the parent exercised some control of the sub-
sidiary both in starting up the business and with respect
to the line of authority, however, the evidence does not
show that the subsidiary was a mere sham or alter ego.
Further, the subsidiary did not manufacture or sell
aircraft.

App. 25

Analyzing the nature and quality of the contacts with
the State of Illinois, this court cannot say that it would
be fair and reasonable to require DeHavilland Aircraft,
Ltd., a Canadian Corp., to defend this action in Illinois.

Additionaliy, reference is made to Cook Associates v.
Lexington, supra, wherein the Illinois Appellate Court
adopts a broader method of analysis requiring a deter-
mination of the relationship among the forum, the defen-
dant and the litigation. Under this analysis, there is an
insufficient relationship among the defendant, the forum
and the litigation to show that DeHavilland, Ltd. could
have reasonably anticipated being haled [sic.] into court
in Illinois to defend this action.

For the reasons stated, the defendant’s motiun to quash
service and dismiss the action is granted.

JUDGE ARTHUR A. SULLIVAN, JR.
ENTER: May 20, 1981
CiRCUIT COURT

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_2328%3A1. Public record. Not legal advice.