Chalek v. Klein
193 Ill.App.3d 767, 140 Ill. Dec. 760, 550 N.E.2d 645 (1990)
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Rule of Law:
An out-of-state consumer who merely places an order with an in-state seller is a 'passive purchaser' and does not have sufficient minimum contacts with the seller's state to be subject to personal jurisdiction there consistent with the Due Process Clause.
Facts:
- Michael Chalek operated a sole proprietorship in Oak Brook, Illinois, selling a computer software system.
- Sam Lee, a California resident, saw an advertisement for Chalek's software in a magazine.
- Lee placed a telephone call to Chalek, ordered the software, and sent a check for $3,500.
- Milton Klein, a New York resident, also read about the software in a magazine and placed a telephone call to Chalek.
- After receiving advertisements and an order form from Chalek, Klein mailed the order form and a check for $3,000 to Chalek's Illinois office.
- The software was shipped to both Lee in California and Klein in New York.
- After finding the software unsatisfactory, both Lee and Klein returned it and stopped payment on their checks.
Procedural Posture:
- Plaintiff Michael Chalek filed separate lawsuits against defendants Sam Lee and Milton Klein in the circuit court of Du Page County, Illinois (a state trial court).
- Both defendants filed motions to dismiss the complaints, arguing the court lacked personal jurisdiction over them.
- The trial court granted the defendants' motions and dismissed both of Chalek's complaints.
- Chalek, as appellant, filed an appeal of the dismissal orders to the Illinois appellate court.
- The appellate court granted Chalek's motion to consolidate the two appeals.
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Issue:
Does an Illinois court have personal jurisdiction over non-resident consumers whose only contact with Illinois is ordering a product by mail or telephone from an Illinois resident?
Opinions:
Majority - Justice Dunn
No. An Illinois court does not have personal jurisdiction over out-of-state consumers whose only contact with the state is ordering a product because such consumers are 'passive purchasers' who have not purposefully availed themselves of the benefits and protections of Illinois law. The court declined to follow prior Illinois precedent that focused on who initiated the transaction and where the contract was formed. Instead, citing due process concerns for out-of-state consumers articulated in Burger King Corp. v. Rudzewicz, the court adopted the 'active purchaser' versus 'passive purchaser' distinction. A passive purchaser merely places an order by mail or telephone and accepts the seller's advertised price. An active purchaser, who would be subject to jurisdiction, dictates or vigorously negotiates contract terms or inspects production facilities. Here, Lee and Klein were classic passive purchasers; their actions of calling and mailing an order form after seeing an advertisement did not constitute the minimum contacts necessary to satisfy due process.
Analysis:
This decision significantly clarifies the limits of personal jurisdiction over out-of-state consumer defendants in Illinois. By explicitly rejecting the broader test from Empress International and adopting the more defendant-friendly 'active/passive purchaser' test, the court aligns Illinois law with the due process concerns expressed by the U.S. Supreme Court. This ruling provides a degree of predictability for out-of-state consumers, ensuring they will not be haled into an Illinois court merely for purchasing a product from an Illinois-based business. It requires a more substantial, purposeful engagement by the non-resident buyer before jurisdiction can be asserted.
