Updates To Illinois Personal Jurisdiction Law After In re Plavix Related Cases and its Applicability to Illinois Asbestos Cases
In the recent case of In re Plavix Related Cases, 2014 WL 3928240 (2014), the Court narrowed the scope of personal jurisdiction in Illinois for out-of-state residents attempting to file a claim in Illinois courts. Specifically, In re Plavix Related Cases deals with the situation of several non-Illinois residents suing non-Illinois corporations in Illinois courts.
The In re Plavix Related Cases court began with a review of general jurisdiction. “Personal jurisdiction is a court’s power to bring a person into its adjudicative process.” In re M. W., 232 Ill. 2d 408, 415 (2009). To be valid, the exercise of personal jurisdiction must be authorized by state law and consistent with state and federal due process. Illinois law authorizes courts to exercise jurisdiction over non-resident defendants to the full extent permitted by the Illinois and federal Constitutions, 735 ILCS 5/2-209(c), and Illinois due process is satisfied when federal due process requirements are met. See Russell v. SNFA, 987 N.E.2d 778, 785 (2013). Therefore, the only issue the Court need decide is whether the exercise of jurisdiction in this case comports with due process under the Fourteenth Amendment to the United States Constitution. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853 (2011).
There are two forms of personal jurisdiction: specific and general. Specific jurisdiction permits a forum to exercise judicial power over a non-resident defendant only for claims arising from the defendant’s contacts with the forum. Russell, 987 N.E.2d at 787. General jurisdiction, by contrast, permits a forum to exercise judicial power over a non-resident defendant for any and all claims. Id. at 786. Under either theory, due process requires that the defendant have sufficient minimum contacts with the forum such that haling the defendant into court in the forum “does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Wash., 326 U.S. 310, 316(1945).
Under general jurisdiction the Court noted a defendant who is subject to general jurisdiction in a forum may be sued in the forum for any cause of action, regardless of whether the suit arises from the defendant’s contacts with the forum. See Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1224 (9th Cir. 2011). The Supreme Court has explained that “a court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State.” Daimler, 134 S. Ct. at 754 (quoting Goodyear, 134 S. Ct. at 2851)(internal quotation omitted). Accordingly, “only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there.” Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). A corporation may be subject to general jurisdiction somewhere other than its principal place of business or place of incorporation only in an “exceptional case.” Id. at 761 n.19.
The Court applied the holding in Daimler to the instant case. The Daimler Court made clear that, outside of the principal place of business and place of incorporation, a non-resident defendant corporation may be subject to general jurisdiction only in an “exceptional case.” Id. at 761 n.19. In Daimler, the Court cited Perkins v. Benguet Consol Mining Co., 342 U.S. 437 (1952) as an example of an exceptional case. Daimler, 134 S. Ct. at 760 n. 19. In Perkins, the defendant corporation was essentially headquartered in Ohio on an interim basis, including bank account, corporate meetings, and day-to-day activities.
In In re Plavix Related Cases, Plaintiffs claim that Defendants should be subject to general jurisdiction in Illinois because Defendants have retained an Illinois agent for service of process, occupied buildings in Illinois, and employed Illinois residents. Defendants’ Illinois contacts are far from exceptional. To the contrary, these are contacts which would be typical of a corporation doing business in any state. Additionally, the Plavix Court found that Defendants’ Illinois sales revenue, although substantial, does not provide a valid basis for exercising general jurisdiction.
The Supreme Court cautioned in Daimler that “[a] corporation that operates in many places can scarcely be deemed at home in all of them.” Id. at 762. n. 20. The Plavix Court found that the present case is not an “exceptional case” akin to Perkins and did not exercise general jurisdiction over Defendants.
Next the Court addressed specific jurisdiction. The first prong of the specific jurisdiction analysis is whether Defendants have “purposefully directed [their] activities at [Illinois].” Russell, 987 N.E.2d at 787. The second prong of the specific jurisdiction analysis considers whether Plaintiffs’ claims arise from or relate to Defendants’ Illinois contacts. In Illinois, to satisfy the second factor of the specific jurisdiction analysis, the plaintiff’s claim “must directly arise out of the contacts between the defendant and the forum.” Spartan Motors, Inc. v. Lube Power, Inc., 337 Ill. App. 3d 556, 561 (2nd Dist. 2003). Subsequent cases have clarified that the relationship between the plaintiff’s claim and the defendant’s forum contacts exists where (1) the plaintiff’s claim “would not have occurred ‘but for’ the defendant’s forum activities” and (2) “the defendant’s forum conduct ‘gave birth to’ the cause of action.” Keller v. Henderson, 359 Ill. App. 3d 604, 617 (2nd Dist. 2005) (quoting Massachusetts Sch. of Law v. ABA, 142 F.3d 26, 35 (1st Cir. 1998)).
Defendants cited Glater v. Eli Lilly & Co., 744 F.2d 213 (1st Cir. 1984) and argue that Plaintiffs claims do not arise from or relate to Defendants’ Illinois contacts. In Glater, cited by Defendants, the plaintiff sued Eli Lily Company in New Hampshire, alleging that she was injured by in utero exposure to diethylstilbestrol (DES). Id. The plaintiff was exposed to DES when her mother ingested the chemical while living in Massachusetts. The court held that it could not exercise personal jurisdiction over Eli Lilly Company because “Glater’s cause of action did not arise from Lilly’s New Hampshire activities; rather, her injuries were caused in Massachusetts by exposure in utero to DES which her mother purchased and consumed in Massachusetts.” Id. at 216. The Court also held that the plaintiff’s injury did not relate to Eli Lilly’s New Hampshire contacts, noting that such a holding would require the court to hold that “any plaintiff in Glater’s position-a nonresident injured out of state by a drug sold and consumed out of state-could bring suit in New Hampshire for DES injuries.” Id. n. 4.
The In re Plavix Related Cases court found Glater persuasive because of the similarities to the present case. Both the plaintiff in Glater and Plaintiffs in the present case are individuals who (1) ingested a drug in one state; (2) were allegedly harmed by the drug in that state, and (3) then filed suit for injuries caused by the drug in a different state where the drug is also distributed. Just like the plaintiff in Glater, the injuries suffered by Plaintiffs’ in the present case do not arise from Defendants’ Illinois contacts. While Defendants established a large business network to facilitate the distribution of Plavix in Illinois, Plaintiffs have failed to establish any causal or logical link between their claims and Defendants’ Illinois operations. The Court found Plaintiffs failed to satisfy the second factor of the specific jurisdiction analysis, which was fatal to Plaintiffs’ jurisdictional argument.
The third factor the Court must consider is whether the exercise of jurisdiction is reasonable. The Court declined to consider this factor because Plaintiffs had not satisfied the second factor of the specific jurisdiction analysis. The In re Plavix Related Cases court concluded is could not exercise specific jurisdiction over Defendants.
Pendent Personal Jurisdiction
The In re Plavix Related Cases court also discussed the doctrine of pendent personal jurisdiction, which plaintiffs attempted to apply in this case. The doctrine of pendent personal jurisdiction permits a court to exercise personal jurisdiction “over a defendant with respect to a claim for which there is no independent basis of personal jurisdiction so long as it arises out of a common nucleus of operative facts with a claim in the same suit over which the court does have personal jurisdiction.” Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004). The doctrine serves in furtherance of “judicial economy, avoidance of piecemeal litigation, and overall convenience of the parties.” Id. at 1181. “But the doctrine does not jettison the requirements of due process.” Fiore v. Walden, 688 F.3d 558, 567 (O’Scannlain, J., dissenting from denial of rehearing en banc). That means the court “must actually possess jurisdiction over at least one claim.” Id. As the case law makes clear, the claims must come from the same lawsuit. See Action Embroidery, 368 F.3d at 1181. This doctrine would only come into play if plaintiffs attempted to consolidate a non-Illinois resident case with an Illinois resident case.
Based on the foregoing, the In re Plavix Related Cases court dismissed all non-Illinois plaintiffs’ cases.
Analysis as to Asbestos Cases
The new interpretations of personal jurisdiction in Illinois would be very beneficial to defending asbestos cases in Illinois courts.
Under general jurisdiction, if the plaintiff is a non-Illinois resident, the court will look to the defendants’ contacts with the state to determine if general jurisdiction is appropriate. In order for a defendant to be subject to Illinois general jurisdiction, these contacts continuous and systematic as to render them essentially at home in the forum State. It must be an “exceptional case” for a corporation to be subject to general jurisdiction somewhere other than its principal place of business or place of incorporation. The In re Plavix Related Cases court found that retaining an Illinois agent for service of process, occupying buildings in Illinois, and employing Illinois residents are typical of a corporation doing business in any state, not exceptional. Additionally, a defendants’ Illinois sales revenue, even if substantial, does not provide a valid basis for exercising general jurisdiction.
If a client is not incorporated in Illinois and Illinois is not their principal place of business, in the case of a non-Illinois resident, a challenge personal jurisdiction would be appropriate and the plaintiff will have to show the case is an “exceptional” case.
Regarding specific jurisdiction, an asbestos exposure case is very similar to the In re Plavix Related Cases and Glater, in that in most non-Illinois resident asbestos cases (1) the plaintiff/decedent was exposed to asbestos in one state; (2) were allegedly harmed by the asbestos exposure in that state, and (3) then filed suit for injuries caused by the asbestos exposure in a different state where the asbestos containing products were also distributed.
If we apply the ruling of In re Plavix Related Cases to an asbestos case, just because a client established a large business network to facilitate the distribution of products in Illinois, plaintiffs must still establish a causal or logical link between their claims and defendants’ Illinois operations. The mere fact that a corporation did business in Illinois is not enough. The plaintiff must show they were injured due the corporations’ actions in Illinois.
Interestingly, the In re Plavix Related Cases Court denied Defendants’ Motion to Dismiss Non-Illinois Plaintiffs on Forum Non Conveniens Grounds based on the analysis of private and public interests factors and found Defendants did not meet their burden of showing Illinois was an inconvenient forum.