Don't Bet the Business

Earlier this month, the Illinois Supreme Court held that its state courts lacked personal jurisdiction over the claims of more than 160 non-residents allegedly injured from conduct occurring wholly outside of Illinois. Rios v. Bayer, 2020 IL 125020 (June 4, 2020).

In reversing the trial and Fifth District Appellate Courts’ denial of Defendant’s motion to dismiss the Supreme Court followed the U.S. Supreme Court’s 2017 landmark ruling on personal jurisdiction in Bristol-Myers Squibb Co. v. Superior Court of Calif., 137 S. Ct. 1773 (2017).

Rios may have a profound impact on litigation tourism in Illinois.

Background

Two Illinois residents and more than 160 non-residents filed two separate product liability lawsuits in Madison County, Illinois alleging injuries suffered as a result of being implanted with Essure, a birth control device manufactured by Conceptus, a California corporation. Bayer purchased Conceptus.

Both lawsuits named various Bayer entities as defendants, none of which was incorporated or located in Illinois. Both lawsuits, as amended, asserted defendants’ acts in conducting clinical trials and developing Essure marketing campaigns and physician training programs in Illinois subjected them to specific personal jurisdiction in Illinois under the Illinois long arm statute, 735 ILCS 5/2-209. Neither lawsuit alleged that Essure was manufactured in Illinois, that the non-residents were implanted with Essure in Illinois or received any treatment for their injuries in Illinois.

Constitutional Limits on Personal Jurisdiction under the Long Arm Statute

The Rios Court noted that state courts may “exercise personal jurisdiction over an out-of-state defendant if the defendant has certain minimum contacts with [the state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Daimler AG v. Bauman, 571 U.S. 117, 126, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). The plaintiffs in Rios asserted Bayer’s contacts in Illinois subjected it to specific jurisdiction in the Illinois state court under the loan arm statute.

“Specific jurisdiction is very different.” Bristol-Myers, 582 U.S. at ––––, 137 S. Ct. at 1780. A state may assert specific personal jurisdiction over an out-of-state defendant only “if the defendant has purposefully directed [its] activities at residents of the forum” and if “the litigation results from alleged injuries that arise out of or relate to those activities.” (Internal quotation marks omitted.) Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

In rejecting the non-resident plaintiffs’ claims the Rios Court noted that none of the foreign plaintiffs alleged they or their doctors received any of the allegedly deficient Essure marketing or training materials in Illinois. Because “the nonresident plaintiffs have identified no jurisdictionally relevant links between their claims and Illinois” under Bristol-Myers Squibb specific jurisdiction over the foreign plaintiffs’ claims is lacking.

Rios’ Impact on Litigation Tourism in Illinois

Madison County has long been a popular destination for litigation tourists. In 2016 28% of asbestos lawsuits filed in the United States were filed in Madison County. That same year almost 50% of all mesothelioma lawsuits filed nationally were filed in that county. It is estimated that less than 10% of the asbestos lawsuits filed in Madison County are brought on behalf of Illinois residents – the remainder being filed on behalf of litigation tourists from other states.

Generally there are dozens of companies named as defendants in asbestos lawsuits. Many of those defendants are not incorporated in and have no operations in Illinois. The first thing a foreign entity should assess when being hailed into an Illinois state court is whether the plaintiff is also a non-resident. Plaintiff’s residency and alleged use of or exposure to an injurious product can often be gleaned from the allegations in the complaint.

If a foreign defendant is sued by a non-resident plaintiff in an Illinois state court a motion to dismiss for lack of personal jurisdiction should be immediately assessed and filed before any other action is taken in the case to avoid waiver of jurisdictional defects. Rios provides compelling authority for dismissal of cases filed in Illinois state courts against non-resident defendants on behalf of litigation tourists.