Gray v. American Radiator & Standard Sanitary Corp.
22 Ill.2d 432, 176 N.E.2d 761 (1961)
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Rule of Law:
A nonresident corporation commits a tortious act within a state for the purposes of a long-arm statute when its product causes injury within that state, and exercising personal jurisdiction over that corporation based on this single contact does not violate due process if the corporation placed its product into the stream of commerce with the reasonable expectation that it would be used in the forum state.
Facts:
- Titan Valve Manufacturing Company (Titan), an Ohio corporation, manufactured a safety valve in Cleveland, Ohio.
- Titan sold the completed valve to American Radiator & Standard Sanitary Corporation (American Radiator) outside of Illinois.
- In Pennsylvania, American Radiator incorporated the Titan valve into a hot water heater.
- The water heater was sold in the course of commerce to an Illinois consumer.
- The water heater exploded in Illinois.
- The explosion injured Phyllis Gray, an Illinois resident.
Procedural Posture:
- Phyllis Gray sued Titan Valve Manufacturing Company and American Radiator & Standard Sanitary Corporation in the circuit court of Cook County, Illinois (trial court).
- Summons was served on Titan's registered agent in Ohio.
- Titan filed a special appearance and a motion to quash the service of summons, arguing the court lacked personal jurisdiction.
- The circuit court granted Titan's motion and dismissed the complaint against it.
- Phyllis Gray appealed the dismissal directly to the Supreme Court of Illinois, the state's highest court, because a constitutional question was involved.
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Issue:
Does an Illinois court's exercise of personal jurisdiction over a nonresident corporation, which manufactured a component part in another state that later caused injury in Illinois, violate the Due Process Clause when the corporation's only contact with Illinois is the injury itself?
Opinions:
Majority - Mr. Justice Klingbiel
No. Exercising personal jurisdiction over a nonresident corporation whose product causes injury in Illinois does not violate the Due Process Clause, even if that injury is the corporation's only contact with the state. For statutory purposes, a 'tortious act' is committed where the injury occurs, not necessarily where the negligent manufacturing took place. The court reasoned that the concept of injury is inseparable from the act itself, and the place of a wrong is where the last event necessary to render the actor liable takes place. Constitutionally, the court held that due process requirements have evolved; it is sufficient if the act or transaction itself has a substantial connection with the forum state. By placing a product into the stream of commerce with the expectation of its use in other states, a manufacturer avails itself of the benefits and protections of the laws of those states. Given modern commerce and transportation, it is not unreasonable or unfair to require a manufacturer to defend a suit in a state where its allegedly defective product causes injury.
Analysis:
This decision is a landmark in the development of personal jurisdiction, establishing the 'stream of commerce' theory for specific jurisdiction in products liability cases. It significantly expanded the ability of state courts to assert jurisdiction over out-of-state manufacturers whose products cause harm within their borders. The ruling shifted the jurisdictional focus from a defendant's physical presence or continuous business activities to the foreseeability of its product's entry into the forum state and the resulting injury. This precedent makes it easier for resident plaintiffs to seek redress in their home states against foreign corporations, reflecting the realities of a nationalized economy.
