Illinois Supreme Court Rejects Bid for Forum-Shopping

Posted by Bradford S. Purcell | Oct 31, 2017 | 0Comments

Defendants have long been wary of several counties in Illinois that have a reputation for plaintiff-friendly courts and juries. These venues include Cook County, home to Chicago and many of its suburbs, and Madison and St. Clair Counties, immediately across the Mississippi River from St. Louis. These three counties shared the dubious distinction of ranking #6 on the American Tort Reform Foundation's 2016–17 Judicial Hellholes list.

But on September 21, 2017, the Illinois Supreme Court provided a new tool for out-of-state defendants seeking to avoid litigating cases in these counties (or any others in Illinois) where the facts of the litigation bear no relationship to the plaintiff's chosen venue. In Aspen American Insurance Co. v. Interstate Warehousing, Inc., 2017 IL 121281, Aspen's insured, Eastern Fish Company, stored fish products in Interstate's refrigerated warehouse near Grand Rapids, Michigan. A portion of the warehouse roof collapsed, causing an ammonia leak that contaminated Eastern's fish. Aspen paid Eastern for its lost fish and brought a subrogation suit against Interstate in Cook County, Illinois. Although Interstate had another warehouse in nearby Will County, Illinois, Interstate was incorporated and headquartered in Indiana.

The court explained the difference between specific personal jurisdiction, which exists when the plaintiff's claims arise out of the defendant's contacts with the forum state, and general personal jurisdiction, which can exist even if the defendant's conduct at issue in the suit occurred entirely outside the forum state. Id. at ¶ 14. Aspen claimed that the Will County warehouse sufficed to subject Interstate to general personal jurisdiction in Illinois because it showed Interstate had “continuous and systematic” contacts with Illinois and was “doing business within” Illinois. But Interstate said the Will County warehouse did not establish that Interstate was “at home” in Illinois, citing the United States Supreme Court's decision in Daimler AG v. Bauman, 134 S.Ct. 746 (2014).

The Illinois Supreme Court agreed with Interstate, reversing the denial of Interstate's motion to dismiss. It noted that Interstate was “at home” in Indiana and did not have sufficient contacts to make it “essentially at home” in Illinois as well, or to make Illinois a “surrogate home.” As Daimler noted, “A corporation that operates in many places can scarcely be deemed at home in all of them.” Aspen at ¶ 19 (quoting Daimler, 134 S.Ct. at 762 n.20). The Illinois Supreme Court further held that under the Daimler test, the “doing business” section of the Illinois “long-arm” statute, 735 ILCS 5/2-209(b)(4), cannot constitutionally be applied to establish general jurisdiction where the defendant's contacts have not rendered it “essentially at home” in Illinois. Aspen at ¶ 21. A corporation's mere registration with the Illinois Secretary of State to transact business under 805 ILCS 5/13.05 or its maintenance of a registered agent in Illinois under § 5.05 likewise did not establish general personal jurisdiction. Id. at ¶¶ 23–27.

The United States Supreme Court has issued further decisions that confirm the Aspen court's interpretation of Daimler, such as BNSF Railway Co. v. Tyrell, 137 S.Ct. 1549 (2017), holding that a Montana court could not exercise general jurisdiction over a railroad in a FELA suit based on injuries allegedly sustained outside Montana, and Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 137 S.Ct. 1773 (2017), holding that where a California court lacked general jurisdiction over the defendant, it also could not assert specific jurisdiction over nonresident plaintiffs' products liability claims. The Aspen case indicates that such jurisdictional decisions may have lasting effects on plaintiffs' attempts to take advantage of reputedly friendly venues with no real connection to the defendants or to the plaintiffs' claims.

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