Chalek v. Klein
Illinois Court of Appeals - 1990 (193 Ill. App 3d 767, 550 N.E.2d 645)
- P (Chalek) owned a software company in IL and sold software to Ds Lee (CA) and Klein (NY).
- Both Ds sent P checks for the software. When software was found to be unsatisfactory, they returned the software and put holds on the checks.
- P sued Ds for payment.
- Ds claim that IL does not have personal jurisdiction over them.
- Lower court found for Ds.
- Appeals court affirmed, found for Ds.
- Does entering into a passive contract with an entity in a forum state subject someone to personal jurisdiction of that forum state?
- Entering into a passive contract with an entity in a state does not subject someone to personal jurisdiction in that state.
- Actively entering into a contract (i.e. dictating or vigorously negotiating contract terms or by inspecting production facilities) would dissipate the unfairness associated with the exercise of long arm jurisdiction.
- Distinguishing between active and passive buyers protects out of state mail order purchasers as well as in state custom-built producers.
- Both Ds were passive purchasers, so IL has no personal jurisdiction.
- The mere fact that an out of state individual has entered into a contract with a resident of the forum state is not sufficient by itself to subject the nonresident to the in personam jurisdiction of the state's courts. (reasoning borrowed from SCOTUS on Burger King)
- The ruling in Empress Int'l was inconsistent with SCOTUS ruling in Burger King.
- This seems like more of a policy decision, worried about setting a certain precedent.
- The decision doesn't fall directly in line with Burger King.