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Illinois Supreme Court Upholds the Exclusive Remedy Provisions of the Workers’ Compensation Act and the Workers’ Occupational Diseases Act in Asbestos Related Diseases

On November 4, 2015, the Illinois Supreme Court filed the attached opinion in the matter of Folta v. Ferro Engineering, 2015 L 118070. In a 4-2 decision, the Court held that when the employee’s injury or disease first manifests after the expiration of certain time limitations under the Workers’ Compensation Act (820 ILCS 305/1 et seq. (West 2010)) and the Workers’ Occupational Diseases Act (820 ILCS 310/1 et seq. (West 2010)), the employee’s action is barred by the exclusive remedy provisions of those acts.

Background

Mr. Folta worked for Ferro Engineering from 1966 to 1970, alleging exposure to products containing asbestos during that time period. Forty-one years later, Mr. Folta was diagnosed with mesothelioma. He filed a civil action in Cook County, Illinois against 15, including Ferro. In responses Ferro filed a Motion to Dismiss based on the exclusive remedy provision in the Workers’ Compensation Act and the Workers’ Occupational Diseases Act (Acts). Plaintiff alleged his action fell outside the exclusive remedy provision because his claim was not “compensable” under the Acts because his symptoms manifested more than 40 years after his last exposure to asbestos and any potential asbestos-related compensation claim was barred under the 25-year limitation provision in section 6(c) of the Workers’ Occupational Diseases Act.

The circuit court granted Ferro Engineering’s motion to dismiss, holding that the action was barred by the exclusive remedy provisions. Following resolution of the civil action with the 14 other defendants, Folta appealed the dismissal of the claims against Ferro. The appellate court reversed and remanded. Folta v. Ferro Engineering, 2014 IL App (1st) 123219. Relying on the Illinois Supreme Court’s court’s ruling inMeerbrey v. Marshall Field & Co., 139 Ill. 2d 455 (1990), the appellate court explained that an injured employee may bring a common-law action against his employer where “the injury is not compensable under the Act.” Folta v. Ferro Engineering, 2014 IL App (1st) 123219, ¶ 27. The appellate court determined that the term “compensability” must relate to the “ability to recover under the Act.” Id. ¶ 31. It found that Folta’s injury was “quite literally not compensable” under the Workers’ Compensation Act because all possibility of recovery was foreclosed due to the nature of his injury and the fact that his disease did not manifest until after the statute of repose expired. Id. ¶ 36.  Accordingly, the appellate court held that Folta’s suit against Ferro Engineering was not barred by the exclusivity provisions of the Workers’ Compensation Act and the Workers’ Occupational Diseases Act, and remanded for further proceedings. Id. ¶ 44.

Of note, the Illinois Supreme Court allowed several amici curiae briefs in support of both parties. In support of Folta, the Court allowed briefs from the Illinois Trial Lawyers Association, the Asbestos Disease Awareness Organization, and the Illinois AFL-CIO. In support of Ferro Engineering, we allowed a joint brief from various businesses, including Caterpillar Inc., Aurora Pump Company, Innophos, Inc., Rockwell Automation, Inc., United States Steel Corporation, F.H. Leinweber Company, Inc., Driv-Lok, Inc., Ford Motor Company, and ExxonMobil Oil Corporation, as well as briefs from the Illinois Self-Insurers’ Association, the Illinois Defense Trial Counsel, and a joint brief from the American Insurance Association, Property Casualty Insurers Association of America, and the Travelers Indemnity Company.

Analysis

The Court provided an analysis of the exclusive remedy provisions of the Workers’ Compensation Act and the Workers’ Occupational Diseases Act, in order to determine if these provisions bar an employee’s cause of action against an employer to recover damages for a disease resulting from asbestos exposure which arose out of and in the course of employment even though no compensation is available under those acts due to statutory time limits on the employer’s liability.

After a brief overview of the Acts, the Court noted both acts contain an exclusive remedy provision as part of the quid pro quo which balances the sacrifices and gains of employees and employers. Meerbrey, 139 Ill. 2d at 462. In discussing the scope of the exclusivity provisions under the Workers’ Compensation Act, the Court has indicated that the Act generally provides the exclusive means by which an employee can recover against an employer for a work related injury. Id at 462. However, an employee can escape the exclusivity provisions of the Act if the employee establishes that the injury (1) was not accidental; (2) did not arise from his employment; (3) was not received during the course of employment; or (4) was not compensable under the Act. Id. (citing Collier v. Wagner Castings Co., 81 Ill. 2d 229, 237 (1980)).

In this case, Folta relied on the fourth category, that his injury was not compensable under the act because he never had an opportunity to recover any benefits under the Act. On the other hand, Ferro’s position was that whether an injury is compensable is defined by the scope of the Act’s coverage, and not on the particular employee’s ability to recover benefits.

The Court then reviewed the Illinois Supreme Court’s historical analysis of a “compensable injury”. The Court concluded that Pathfinder Co. v. Industrial Comm’n, 62 Ill. 2d 556 (1976), Collier and Meerbrey stand for the proposition that whether an injury is compensable is related to whether the type of injury categorically fits within the purview of the Act, not whether an injury is compensable by whether there is an ability to recover benefits for a particular injury sustained by an employee. In all of these cases, the exclusivity provisions barred a common-law cause of action.

The majority notes that the Act specifically addresses diseases caused by asbestos exposure, citing several causes where employees and spouses had received compensation, which indicates the legislature intended that occupational diseases arising from workplace asbestos exposure are the type of injury contemplated to be within the scope of the Act. Accordingly, under Pathfinder, Collier and Meerbrey, Foltas injury is the type of injury compensable under the Act.

The Court went on to discuss the cases of Moushon v. National Garages, Inc., 9 Ill. 2d 407 (1956), andDuley v. Caterpillar Tractor Co., 44 Ill. 2d 15 (1969), which dealt with the Acts provisions that limit employer’s liability and the exclusive remedy provisions. Based upon their review of these cases, the Court stated that this court has held that despite limitations on the amount and type of recovery under the Act, the Act is the employee’s exclusive remedy for workplace injuries.

The Court stated that section 6(c) of the Workers’ Occupational Diseases Act barred Folta’s right to file an application for compensation. Based on the plain language of this section, the Court stated this provision acts as a statute of repose, and creates an absolute bar on the right to bring a claim. The Court noted that in enacting this section of the Act, the legislature intended to provide an absolute definitive time period within which all occupational disease claims arising from asbestos exposure must be brought, even if it bars a claim before it has even accrued.  Allowing a common law action in spite of the exclusive remedy provisions, would render the statute of repose useless. Further, this interpretation would directly contradict the plain language of the exclusive remedy provision which provides that the employer’s liability is “exclusive and in place of any and all other civil liability whatsoever, at common law or otherwise.” 820 ILCS 310/11 (West 2010).

Folta further alleged that since decedent was precluded from recovering any compensation benefits offered by the statute, the effect was to essentially exclude this latent disease from coverage under the Act. Thus, relying on the Pennsylvania Supreme Court case of Tooey v. AK Steel Corp., 81 A.3d 851 (Pa. 2013), Folta asserts that her recourse against the employer must be found in the common law. The Tooey court defined “injury” to include “occupational disease” provided that, if occupational disease was the basis for compensation, that Act only applied to disability or death resulting from such disease and occurring within a 300-week time window. The court held, over a dissent, that this time limitation “operate[d] as a de facto exclusion of coverage under the Act for essentially all mesothelioma claims.” Id. at 863. Therefore, common law mesothelioma claims were not barred by the exclusive remedy provision of the Pennsylvania Act. Id. at 865.

The Illinois Supreme Court rejected this argument, based on the plaint language of the statute, which state that there is no right to recover damages from the employer for “any injury to health, disease, or death therefrom, other than for the compensation herein provided”, and that the Act is exclusive with respect to “any disease contracted or sustained in the course of the employment”, it would be “a radical departure to suggest that the exclusivity provisions apply only for certain occupational diseases in which the disability manifests within the time limitation.” “Consistent with Collier and Meerbrey, the litmus test is not whether there is an ability to recover benefits.” Folta v. Ferro Engineering, 2015 IL 118070, ¶ 42. “Nothing in our statute or the history of our jurisprudence suggests that a temporal limitation removes a work-related injury from the purview of the Act.” Id. The Court acknowledges the possible harsh results, but indicates the question of whether a different balance be struck should be addressed by the legislature, rather than the Court.

Finally, Folta argued that holding that the exclusive remedy provisions bar her cause of action would violate the Illinois Constitution’s guarantees of equal protection (Ill. Const. 1970, art. I, § 2), prohibition against special legislation (Ill. Const. 1970, art. IV, § 13), and the right to a certain remedy (Ill. Const. 1970, art. I, § 12). Folta contends that interpreting the exclusive remedy provisions to deprive the family of a right to recovery against the employer would arbitrarily create two classes of similarly situated injured workers who are treated unequally and without any rational basis. Folta argued that those workers who suffer from occupational diseases with short latency periods are eligible to receive compensation benefits, while those workers who suffer from occupational diseases with long latency periods are “categorically” prohibited from a right to recover compensation benefits and are additionally prohibited from seeking common-law damages. Folta v. Ferro Engineering, 2015 IL 118070, ¶ 46.

The Court found no merit with Folta’s arguments indicating that “all of these workers are precluded from seeking common law damages.” Id. at ¶ 47. The Court further noted that there are examples where the particular facts and circumstances are such that they do not allow for recovery of benefits against the employer. But there is no “categorical” class without a right to seek benefits against their employer. Further, “the acts do not prevent an employee from seeking a remedy against other third parties for an injury or disease.” Id. at ¶ 50.  “Rather, in this case, the acts restrict the class of potential defendants from whom Folta could seek a remedy, limiting Folta’s recourse for wrongful death claims to third parties other than the employer.” Id.  “In this case, Folta named 14 defendant manufacturers of asbestos related products. Folta was not left without any remedy.“ Id.

Conclusion

The Illinois Supreme Court concluded Folta’s action against Ferro Engineering for wrongful death is barred by the exclusive remedy provisions of the Workers’ Compensation Act and the Workers’ Occupational Diseases Act.

Dissent

In his dissent, Justice Freeman, joined by Justice Kilbride, indicated he would affirm the judgment of the appellate court. Justice Freeman stated that in the unanimous opinion of the appellate court, the court noted the scope of the exclusive remedy provisions is not absolute. The court pointed to Meerbrey, which listed four exceptions to the Workers’ Compensation Act’s exclusivity provisions, which were discussed above. The appellate court rejected Ferro’s argument, correctly noting that Ferro’s proposed definition of compensability “would render the fourth Meerbrey exception superfluous, since Meerbrey already contains explicit exceptions for injuries that did not arise from a worker’s employment and injuries that were not received during the course of employment.” 2014 IL App (1st) 123219, Id. ¶ 30. The court held that the fourthMeerbrey exception applied to allow plaintiff to bring a common law suit against Ferro. Id.

The appellate court held the fourth Meerbrey exception applied here because plaintiff’s injury was “quite literally not compensable under the Act, in that all possibility of recovery is foreclosed because of the nature of plaintiff’s injury.” Id. at ¶ 36. In support of this point, the dissent distinguished Moushon from the current case because in Moushon, plaintiff’s injury was within the Workers’ Compensation Act’s “coverage formula” and the plaintiff received compensation for that injury. That the plaintiff might not have been able to recover statutory compensation for a particular element said to arise from his injury does not entitle him to file a common-law action against his employer for additional damages.

Justice Freeman indicated the majority’s interpretation of the exclusive remedy provisions “includes, at most, only scant mention of the canons of statutory construction”. Folta v. Ferro Engineering, 2015 IL 118070, ¶ 66. The dissent specifically identified the rule that “in construing a statute, the court may consider the reason for the law, the problems sought to be remedied, the purposes to be achieved, and the consequences of construing the statute one way or another.” Hubble v. Bi-State Development Agency of the Illinois-Missouri Metropolitan District, 238 Ill. 2d 262, 268 (2010). Id. at ¶ 69.

The dissent relies on Professor Arthur Lawson’s treatise Larson’s Workers’ Compensation Law § 100.01(1) (2015), which states: the Workers’ Compensation Act’s exclusive remedy provision thus “is part of the quid pro quo in which the sacrifices and gains of employees and employers are to some extent put in balance, for, while the employer assumes a new liability without fault, it is relieved of the prospect of large damage verdicts.”

Justice Freeman indicated the majority’s interpretation of the exclusive remedy provisions could not be the law. The dissent indicated that when the 25 year statute of repose in section 6(c) of the Workers’Occupational Diseases Act expires there is no longer a recognized right of action, therefore, the employee’s injury is not compensable under the Act, and the employee may bring, under the fourth Meerbreyexception, a common law cause of action against the employer.

In support of this opinion, the dissent further relies on Professor Larson’s treatise, which states: “other jurisdictions, including Illinois and Pennsylvania, have refused to follow the twisted logic (emphasis added) in Kane that would (1) bar the claim because it was unknown at the time the statute of repose expired and (2) bar the civil action because of the exclusive remedy provisions of the state’s workers’ compensation law.” 9 Larson’s Workers’ Compensation Law § 100.05(3)(b)(2015). The treatise cites the appellate case at bar,Meerbrey, two other appellate court decisions, and Tooey v. AK Steel Corp., 81 A.3d 851 (Pa. 2013). TheTooey court held that claims for occupational disease which manifested outside the 300-week period prescribed by the Workers’ Compensation Act did not fall within the purview of the Workers’ Compensation Act, and, therefore, the Workers’ Compensation Act’s exclusivity provision did not preclude injured employees from filing common-law claims against their employers.

In the opinion of the dissent, the interpretation of the Act could not be intended to leave the employee with no remedy under the Act or at common law. However, the majority addressed this claim directly, stating: “the acts do not prevent an employee from seeking a remedy against other third parties for an injury or disease.”Folta v. Ferro Engineering, 2015 IL 118070, at ¶ 50.  “Rather, in this case, the acts restrict the class of potential defendants from whom Folta could seek a remedy, limiting Folta’s recourse for wrongful death claims to third parties other than the employer.” Id.  “In this case, Folta named 14 defendant manufacturers of asbestos related products. Folta was not left without any remedy.“ Id.

Disclaimer and Message Required by the Missouri Bar

The content of this blog is intended for informational purposes only, and is not intended to solicit business or to provide legal advice. Since the laws of different states vary, the information on this blog may not apply to every reader. You should not make, or refrain from making, any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Pitzer Snodgrass, PC, or the authors. The choice of a lawyer is an important decision and should not be based solely on advertising.

Missouri Senate Bill 239 – Reinstatement of Damage Caps In Medical Malpractice Cases

When evaluating a claim for medical malpractice, the potential exposure is a key consideration for both health care provider and defense counsel.  Until recently, plaintiffs could receive unlimited non-economic damages awards in medical malpractice lawsuits for personal injury filed in Missouri.  See, Watts v. Lester E. Cox Medical Centers, 376 S.W.3d 633 (Mo. banc 2012).  Such unlimited damages may afford plaintiff a windfall, expose health care providers to unpredictable jury verdicts, and increase the overall cost of health care.  However, the Missouri legislature has recently reinstated damage caps with Senate Bill No. 239, which was signed into law by Governor Jay Nixon on May 7, 2015, and takes effect on August 28, 2015.

The Missouri legislature has pursued tort reform over the past several years, which has brought meaningful change, but has also caused confusion regarding when damage caps are available at trial.  In Lilian M. Lewellen v. Chad Franklin and Chad Franklin Auto Sales North LLC, 441 S.W.3d 136 (Mo. banc 2014), the Supreme Court of Missouri struck down Missouri’s statutory cap on punitive damages for all common law causes of action that existed prior to the adoption of Missouri’s Constitution in 1820.  The Court’s rationale was that the statutory cap violated an individual’s right to due process and a jury trial for all claims existing at common law before 1820, when Missouri’s Constitution was ratified.  However, the Court had previously held that claims brought under statutes created by the legislature could be subject to damage caps.  Estate of Overbey v. Chad Franklin National Auto Sales North, LLC, 361 S.W.3d 364 (Mo. banc 2012).  Therefore, whether a damage award could be capped was dependent upon whether the cause of action arose under the common law or was created by statute.  Under this framework, any cause of action brought under a statute, such as wrongful death against health care providers, was subject to limited damages, while any cause of action brought under the common law, such as personal injury medical malpractice claims against health care providers, could not be limited by damage caps.

The Missouri Legislature recently voted to reinstate damage caps in medical malpractice cases with the passing of Senate Bill No. 239.  The bill creates a statutory cause of action for claims against health care providers and abolishes the common law cause of action.  Requiring plaintiffs to bring claims against health care providers under a statute, rather than the common law, allows the Legislature to limit damages by using the framework set forth by the Missouri Supreme Court.  With this law, health care providers and their counsel are better able to evaluate the value of a claim and more meaningfully engage in settlement

Under the new law, plaintiffs are unable to receive an award of more than $400,000 in non-economic damages in medical malpractice claims, irrespective of the number of defendants.  The Legislature has also created a separate damage cap for cases classified as “catastrophic personal injury.”  The cap for catastrophic claims is increased to $700,000, irrespective of the number of defendants.  The statute defines “catastrophic personal injury” to include cases of quadriplegia, paraplegia, loss of two or more limbs, brain injuries involving permanent cognitive impairment, irreversible major organ failure, and severe vision loss.  These damage amounts were previously unlimited, which created increased exposure and risk at trial for health care defendants.  The act also adjusts the statutory cap on non-economic damages in actions against health care providers for wrongful death from $350,000 to $700,000.  Once again, this limit is irrespective of the number of defendants.  The statutory caps will increase each year at a rate of 1.7%, effective January 1 of each year.

The caps apply to all “non-economic” damages, which include claims for pain and suffering, mental anguish, inconvenience, physical impairment, disfigurement, loss of capacity to enjoy life, and loss of consortium.  The caps do not apply to compensation for any “economic” losses, such as the cost of past and future medical treatment or past and future lost wages.  The caps also do not limit jury awards for punitive damages, which are defined in Missouri as damages intended to punish or deter willful, wanton, or malicious misconduct.  In Missouri, punitive damages are considered extraordinary and harsh, and should be awarded sparingly.  See, Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104 (Mo. banc 1996).

If a jury returns a non-economic damage award in excess of the applicable cap, the party wishing to limit the award must file a post-trial Motion requesting application of the statutory cap.  Only at that point in time shall the trial court determine whether the increased limitation for catastrophic claims applies to the facts of the case, allowing for a maximum of $700,000 in non-economic damages.  Health care providers have witnessed several changes over the last several years in the area of tort reform.  The enactment of Senate Bill No. 239 is a protection for health care providers, which will serve to help providers and their counsel better evaluate claims for personal injury brought against them.

Disclaimer and Message Required by the Missouri Bar

The content of this blog is intended for informational purposes only, and is not intended to solicit business or to provide legal advice. Since the laws of different states vary, the information on this blog may not apply to every reader. You should not make, or refrain from making, any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Pitzer Snodgrass, PC, or the authors. The choice of a lawyer is an important decision and should not be based solely on advertising.

Personal Jurisdiction Considerations in Missouri & Illinois after Daimler AG v. Bauman, 134 S. Ct. 746 (2014)

On January 14, 2014, the United States Supreme Court decided the case of Daimler AG v. Bauman, 134 S. Ct. 746 (2014). The background of this case is as follows: Daimler is a German corporation which was sued in California by Argentinian plaintiffs for human rights violations in Argentina.  The United States Court of Appeals for the Ninth Circuit upheld jurisdiction, reasoning that Mercedes-Benz USA, an indirect subsidiary of Daimler, was indeed an agent of Daimler and that the exercise of personal jurisdiction over Daimler was reasonable “under the circumstances of this case”. The circuits have disagreed over when such conduct may be attributed to a parent corporation, and Daimler argued that the Ninth Circuit made it too easy to attribute one corporation’s behavior to another.

Justice Ginsburg wrote the opinion, which was joined by seven other justices, which held that it did not matter whether Mercedes-Benz USA’s conduct was attributed to Daimler, because California did not have general jurisdiction over Daimler. Justice Ginsburg’s opinion begins by outlining the jurisprudential history of in personam jurisdiction, beginning with the “rigidly territorial focus” of Pennoyer v. Neff, 95 U.S. 714 (1878). Justice Ginsburg viewed International Shoe Co. v. Washington, 326 U.S. 310 (1945) as recognizing the distinction between specific jurisdiction, which includes only the specific conduct that connects the defendant to the territory, and general jurisdiction, which is “exercisable when a foreign corporation’s “continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” Daimler at 754, citing International Shoe at 318. Ginsburg further stated that general jurisdiction should be exercised only when the corporation’s affiliations with the State in which suit is brought are so constant and pervasive “as to render [it] essentially at home in the forum State.” CitingGoodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846 (2011).

In the Daimler case, Justice Ginsburg assumed, for the purposes of this decision only, that Mercedes-Benz USA’s “contacts are imputable to Daimler, there would still be no basis to subject Daimler to general jurisdiction in California, for Daimler’s slim contacts with the State hardly render it at home there”. Daimlerat 760. The Court reiterated it’s holding in Goodyear, stating limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there. Id. With respect to a corporation, the place of incorporation and principal place of business are paradigm bases for general jurisdiction. Id.

Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business; it simply typed those places paradigm all-purpose forums.Id. Accordingly, the inquiry under Goodyear is not whether a foreign corporation’s in-forum contacts can be said to be in some sense “continuous and systematic,” it is whether that corporation’s affiliations with the State are so “continuous and systematic” as to render essentially at home in the forum State. Id. at 761.

The U.S. Supreme Court concluded that Daimler, even with Mercedes-Benz USA’s contacts attributed to it, was not at home in California, and hence Daimler was not subject to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred or had its principal impact in California.

Based on this decision, there are several considerations corporations must consider when contesting personal jurisdiction in Missouri and Illinois.

MISSOURI

Does a Defendant need to file Motion to Dismiss Based on Lack of Personal Jurisdiction as Initial Filing?

Not necessarily. A Defendant can file a Motion to Dismiss Based on Lack of Personal Jurisdiction or include this defense in an Answer, or both. If a Defendant wants to argue their motion, it may be a better practice to have a separate Motion to Dismiss Based on Lack of Personal Jurisdiction to notice for Hearing. If a Defendant chooses to file a Motion to Dismiss Based on Lack of Personal Jurisdiction, it should be filed within the time to file a responsive pleading.

According to Missouri Supreme Court Rule 55.27(a)(2), “every defense, in law or fact, to a claim in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motio.” Including “(2) lack of jurisdiction over the person”. Rule 55.27(a) goes on to state, “(a) motion making any of these defenses shall be made: (A) Within the time allowed for responding to the opposing party’s pleading”.

Want of jurisdiction over the person may be raised by answer or by motion at the option of the pleader, but it is not necessary to use the label of “special appearance” in either the motion or an answer.  State ex rel. Metal Service Center v. Gaertner, 677 S.W.2d 325, 327 (Mo. banc 1984). In re Marriage of Wheeler, 743 S.W.2d 605, 606 (Mo. Ct. App. 1988)

If not, does a Defendant waive their challenge to Personal Jurisdiction?

No, as long as the defense was included in Defendant’s responsive pleading with other affirmative defenses.

Further, according to Rule 55.27(a), “(m)otions and pleadings may be filed simultaneously without waiver of the matters contained in either” and “(n)o defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion.”

Does a Defendant waive their challenge to Personal Jurisdiction if Defendant engages in discovery, discloses experts, etc.?

No. But it is a good practice to continue to assert the lack of personal jurisdiction defense when answering discovery, disclosing experts, attending depositions, etc.

It has long been held that a defendant who in a timely and proper manner raises the jurisdictional question created by a lack of venue may thereafter plead over, prepare for trial, utilize all of the procedures available for trial preparation, apply for or consent to continuances and changes of venue and actually try the case on the merits without waiving the defense of lack of personal jurisdiction. Greenwood v. Schnake, 396 S.W.2d 723, 726 (Mo.1965). “Having once hoisted the flag at the beginning of the journey a litigant over whose person a court lacks jurisdiction need not continuously wave the flag at every way station along the route.” Id.

In re Marriage of Berry, 155 S.W.3d 838, (Mo.App S.D. 2005), citing Crouch v. Crouch, 641 S.W.2d 86, 90 (Mo.banc 1982), states that “Rule 55.27(g)(1)(B) provides that the defense of lack of personal jurisdiction, among other things, is waived … if it is neither made by motion under this Rule [55.27] nor included in a responsive pleading.”  “Due process requires that, in the absence of minimum contacts to support personal jurisdiction, the rule effect a waiver of the jurisdictional defense only if the defendant has already appeared before the court and has neither timely raised nor otherwise waived jurisdiction.” Id.

Is there a time limit to call up a Motion to Dismiss Based on Lack of Personal Jurisdiction?

There does not appear to be a time limit for calling up a Motion to Dismiss based on Lack of Personal Jurisdiction.

According to Missouri Supreme Court Rule 55.27(c), “(t)he defenses specifically enumerated (1)-(11) in subdivision (a) of this Rule [including lack of jurisdiction over a person], whether made in a pleading or by motion, and the motion for judgment mentioned in subdivision (b) of this Rule shall be heard and determined before trial on application of any party, unless the court orders that the hearing and determination thereof be deferred until the trial. Courts seem to prefer that Motions to Dismiss for Lack of Personal Jurisdiction are argued earlier in the litigation in order to streamline the litigation.

According to the Missouri Circuit Court for the Twenty-Second Judicial Circuit (St. Louis City)’s Docket Procedures, Dispositive Motions shall be scheduled and submitted at least 60 days prior to any peremptory trial setting or the motion may not be heard, unless circumstances establish good cause why that was not possible.

Recent Personal Jurisdiction Rulings in Missouri

There have been recent rulings on Defendants’ Motions to Dismiss Based on Lack of Personal Jurisdiction in St. Louis City circuit court motion divisions.

Hon. Robert H. Dierker [1]

In Smith v. Union Carbide, et al. (1422-CC00457), an asbestos case, DuPont filed a Motion to Dismiss Based on Lack of Personal Jurisdiction. Plaintiff relied on the State ex rel. K-mart Corp. v. Holliger, 986 S.W.2d 165 (Mo. banc 1999) and DuPont relied on the Daimler case. During oral arguments, Hon. Robert H. Dierker indicated he did not know if K-Mart was still good law after Daimler. He stated he believed Daimlerdoes not look at fairness, but constitutionality, saying “It might be fair, but it might not be constitutional.” Judge Dierker went on to say he thought K-Mart was a stretch and believed Daimler took the legs out of K-Mart.

In his written opinion, Judge Dierker rejected Plaintiff’s arguments that the presence and conduct of a DuPont subsidiary in Missouri should be attributed to DuPont for purposes of the jurisdictional analysis. Plaintiff also unsuccessfully argued that service upon DuPont’s registered agent in Missouri was sufficient to confer general personal jurisdiction against DuPont. In considering this argument, the Court noted that inK-Mart, however, K-mart conceded that “its contacts with Missouri [were] sufficient to satisfy due process requirements.” 986 S.W.2d at 168-69. Consequently, Judge Dierker applied the due process analysis set forth in Daimler. Applying that analysis, the Court found that DuPont is neither incorporated in, nor has its principal place of business in, Missouri and that Plaintiff failed to present evidence “indicating that this is an ‘exceptional case’ under Daimler such that general personal jurisdiction should be extended beyond these paradigmatic forums.”

Hon. David Dowd

Hon. David Dowd recently denied Genuine Parts Motion to Dismiss Based on Lack of Personal Jurisdiction in Sagers v. AGCO Corp., et al. (1422-CC10026), another asbestos case. Judge Dowd stated in his Order that since Genuine Parts maintained a registered agent in Missouri for service of process, Genuine Parts consented to being sued in Missouri. In support of his opinion, Judge Dowd stated “(u)nder section 351.582(2), issuance of a certificate of authority to a foreign corporation authorizes it to conduct business in Missouri and makes it “subject to the same duties, restrictions, penalties, and liabilities…imposed on, the domestic corporation of like character.” State ex rel. K-Mart Corp. v. Hollinger, 986 S.W.2d 165, 168 (Mo. Banc 1999). Doing business in a foreign territory in accordance with the laws of the territory has long been considered consent to be sued there. Railroad Co. v. Harris, 79 U.S. 65, 81 (1871).

Judge Dowd went on to rule that since Genuine Parts has a registered agent to accept service of process in Missouri, the long-arm statute is not needed to reach a Defendant, citing K-Mart. Judge Dowd also citedKnowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1199 (8th Cir. 1990), for the proposition that the “whole purpose of requiring designation of an agent for service is to make a nonresident suable in the local courts.” Judge Dowd opined that Daimler did not affect the rule that a defendant has consented to jurisdiction through the appointment of a registered agent in the state.

ILLINOIS

 Does a Defendant need to file Motion to Dismiss Based on Lack of Personal Jurisdiction as Initial Filing?

 Yes. Unless, a Defendant files a Motion for Extension of Time to Answer or Otherwise Appear (this is not considered a responsive pleading).

According to Illinois Supreme Court Rule 735 ILCS 5/2-301(a) (amended in 2000), “(p)rior to the filing of any other pleading or motion other than a motion for an extension of time to answer or otherwise appear, a party may object to the court’s jurisdiction over the party’s person, either on the ground that the party is not amenable to process of a court of this State or on the ground of insufficiency of process or insufficiency of service of process, by filing a motion to dismiss the entire proceeding or any cause of action involved in the proceeding or by filing a motion to quash service of process. Such a motion may be made singly or included with others in a combined motion, but the parts of a combined motion must be identified in the manner described in Section 2-619.1.

Unless the facts that constitute the basis for the objection are apparent from papers already on file in the case, the motion must be supported by an affidavit setting forth those facts.” The affidavits must assert the personal knowledge of the affiant, and set forth the particular facts of the claim or defense. Ill. S. Ct. R. 191. Certified copies of any documents upon which the affiant relies should be attached to the affidavit. Id. The affidavit should contain facts admissible into evidence and should affirmatively show that the affiant, if sworn as a witness, can testify to them. Id.

If not, does a Defendant waive their challenge to Personal Jurisdiction?

Yes.

Further, 735 ILSC 5/2-301(a-5) states, “(i)f the objecting party files a responsive pleading or a motion (other than a motion for an extension of time to answer or otherwise appear) prior to the filing of a motion in compliance with subsection (a), that party waives all objections to the court’s jurisdiction over the party’s person”.

The court should rule on an objection to personal jurisdiction without deciding any issue of fact or considering the merits of the claim. Id. at § 5/2-301(b). If the court denies the motion to dismiss or to quash service, the moving party may still raise any objection or defense which it might otherwise have made. Id.

If the court denies the motion attacking personal jurisdiction, error in ruling against the objecting party on the objection is waived by the party’s taking part in further proceedings, unless the objection is on the ground that the party is not amenable to process issued by an Illinois court. 735 ILCS 5/2-301(c).

Does a Defendant waive their challenge to Personal Jurisdiction if Defendant engages in discovery, discloses experts, etc.?

Maybe. Depending on the activities a Defendant performs.

Filing a written appearance and paying an appearance fee do not waive an objection to personal jurisdiction, because neither of those acts involves a responsive pleading or a motion (which are the only kinds of acts that can cause a waiver under section 2–301 (a–5)). 88 Ill. B.J. at 33. KSAC Corp. v. Recycle Free, Inc., 364 Ill. App. 3d 593, 596, 846 N.E.2d 1021, 1024 (2006). According to the KSCA Court, citing Larochelle v. Allamian, 361 Ill. App. 3d 217, 836 N.E.2d 176 (2005), there is no longer a need for special appearance, “(s)ince section 2–301 no longer requires the filing of a special appearance (indeed, there is no longer any mention of a special appearance in the Code), we cannot conclude that the filing of a general appearance waives the issue of personal jurisdiction.” Id.

A pleading “consists of a party’s formal allegations of his claims or defenses,” and a motion is “an application to the court for a ruling or an order in a pending case.” In re Marriage of Wolff, 355 Ill.App.3d 403, 407, 290 Ill.Dec. 1011, 822 N.E.2d 596 (2005). Neither filing a jury demand nor responding to a discovery request fits the description of either a pleading or a motion. Accordingly, defendant’s actions in this case did not result in waiver of its objection to personal jurisdiction. KSAC Corp. v. Recycle Free, Inc., at 597.

The KSAC Court, in reviewing the case of Haubner v. Abercrombie & Kent Int’l, Inc., 351 Ill. App. 3d 112, 812 N.E.2d 704 (2004), which occurred before Section 2-301 was amended, stated “(t)he (Haubner) court noted that Supreme Court Rule 201(1) (210 Ill. 2d R. 201(1)) provides that engaging in discovery relative to the question of personal jurisdiction does not waive the right to raise an objection based on personal jurisdiction.” KSAC Corp. v. Recycle Free, Inc., at 596. However, because the defendant’s discovery request went beyond the question of personal jurisdiction, the court held that it amounted to a general appearance (waiver of personal jurisdiction). Id.

When a Defendant files a motion pursuant to Section 2-301 of the Code of Civil Procedure to object to the court’s jurisdiction for insufficient process or service of process, a party may obtain discovery only on the issue of the court’s jurisdiction over the Defendant, unless the parties agree otherwise or the court orders discovery on issues other than personal jurisdiction for good cause. Ill. S. Ct. R. 201(l). The Defendant may participate in a hearing regarding discovery or may conduct discovery pursuant to an agreement of the parties or court order without waiving its objection to the court’s jurisdiction. Id.

Is there a time limit to call up a Motion to Dismiss Based on Lack of Personal Jurisdiction?

No, but the better practice is to avoid accidently waiving a personal jurisdiction defense, so the sooner, the better.

Illinois Supreme Court Rule 184 appears to be the only provision dealing with the timing for the hearing of a motion. That rule simply provides: “(n)o provision in these rules or in the Civil Practice Law prescribing a period for filing a motion requires that the motion be heard within that period. Either party may call up the motion for disposition before or after the expiration of the filing period.” Id.

A motion must be brought to the attention of the court, and the court must be asked to rule on it. Verlinden v. Turner, 351 Ill.App. 511, 115 N.E.2d 576 (1st Dist. 1953) (abst.). To be considered, motions must be made promptly and at the earliest possible time. Stein v. Automatic Electric Co., 152 Ill.App. 392 (1st Dist. 1910). A motion on which no order is ever entered or that is never called to the attention of the court presumably is waived or abandoned. Brandes v. Illinois Protestant Children’s Home, Inc., 33 Ill.App.2d 319, 179 N.E.2d 425 (1st Dist. 1962) (abst.); City National Bank of Hoopeston, Illinois v. Langley, 161 Ill.App.3d 266, 514 N.E.2d 508, 112 Ill.Dec. 845 (4th Dist. 1987); Herricane Graphics, Inc. v. Blinderman Construction Co., 354 Ill.App.3d 151, 820 N.E.2d 619, 289 Ill.Dec. 843 (2d Dist. 2004).

A Sample Timeline of a Motion to Dismiss Based on Lack of Personal Jurisdiction in Illinois

In the recent Madison County, Illinois case of Billy Cirkles, Individually and as Personal Representative of Mary Lou Cirkles v. Asbestos Corp. LTD., et al (13-L-940), filed on June 4, 2013, defendant Whittaker, Clark & Daniels, Inc. filed a Special and Limited Entry of Appearance, Motion for Extension of Time to File Responsive Pleading, and a Notice of Hearing for its Motion for Extension of time on June 28, 2014.

On September 13, 2013, Whittaker, Clark & Daniels, Inc. filed a Motion to Dismiss for Lack of Personal Jurisdiction and noticed the Motion for Hearing on October 4, 2013. Plaintiff filed personal jurisdiction discovery against Whittaker, Clark & Daniels, Inc., and the Hearing for the Motion to Dismiss was continued and took place on February 11, 2014. In the interim, Whittaker, Clark & Daniels, Inc. only answered Plaintiff’s discovery regarding personal jurisdiction and filed a Response to Plaintiff’s Opposition to their Motion to Dismiss.

Judge Stephen Stobbs issued an Order, dated February 13, 2014, granting Whittaker, Clark & Daniels, Inc.’s Motion to Dismiss Based on Lack of Personal Jurisdiction, finding that Plaintiff failed to establish Whittaker, Clark & Daniels, Inc. had any contacts with Illinois such that it can be regarded as “at home” and doing business in Illinois. He further stated, discovery revealed Whittaker, Clark & Daniels, Inc., a New Jersey corporation, with its principal place of business in Connecticut, had no facilities, assets, employees, or registered agents in Illinois.

Recent Personal Jurisdiction Rulings in Illinois

There have been recent rulings on Defendants’ Motions to Dismiss Based on Lack of Personal Jurisdiction in the U.S. District Court, Southern District of Illinois, which are briefly summarized below.

In Cebulske v Johnson & Johnson, 2015 U.S. Dist. Lexis 38537, Personal Care Products Council (PCPC) brought their motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). The Court stated the plaintiff must show that PCPC “purposefully directed activities at the forum state or purposefully availed himself of the privilege of conducting business in the state” N.Grain Mktg., LLC v. Greving, 743 F.3d 487, 492 (7th Cir. 2014) in order to establish minimum contacts to ensure that defendant is put on notice that PCPC may be required “to submit to the burdens of litigation in the forum.”Burger King Corp. v. Rudzewicz, 471 US. At 474-476.

Judge Herndon determined plaintiff failed to assert that PCPC sold any products to the public, let alone Illinois residents, and failed to assert that PCPC intended for its activities to affect Illinois residents. Despite plaintiff’s presentation of a prima facie showing of a conspiracy involving the named defendants, no allegations were made that PCPC, as a nonresident defendant, was targeting Illinois residents, or that the organization had any ties with the state of Illinois to satisfy the “minimum contacts” due process requirement. Ultimately, plaintiff’s reliance on the conspiracy theory of personal jurisdiction is misplaced, as courts in Illinois are moving away from the theory as a basis for establishing personal jurisdiction.

Because PCPC has insufficient contacts with Illinois to establish “minimum contacts” for Due Process Clause purposes, this Court has no specific personal jurisdiction over the moving defendant. Additionally, plaintiff did not allege general personal jurisdiction, which requires a defendant to have “continuous and systematic” connections with the forum state so as to render the defendant at home in the forum for all intents and purposes. Therefore, because PCPC lacks the minimum contacts with Illinois necessary to justify the exercise of personal jurisdiction under the Due Process Clause of the Fourteenth Amendment, PCPC must be dismissed for lack of personal jurisdiction.

In Denton v. Air & Liquid Systems Corp., 2015 U.S. Dist. LEXIS 21986, Judge Yandle found plaintiff had failed to make out a prima facie case of personal jurisdiction. In this case, Defendant Valero was neither incorporated nor maintained its principal place of business in Illinois. Plaintiff did not contest that fact. Further, Plaintiff had not provided facts suggesting that Valero’s affiliation with Illinois was “so continuous and systematic as to render” Valero at home in Illinois. Valero undoubtedly has a presence in Illinois. However, the Supreme Court has made it clear that the mere presence of a defendant in the forum does not subject it to all-purpose jurisdiction in that forum. See Daimler AG, 134 S. Ct. at 752, 762 Accordingly, Plaintiff has failed to make out a prima facie case of personal jurisdiction. (Of note: five other defendants received separate opinions the same day with similar outcomes.)

[1] As of January 2015, Judge Robert Dierker was no longer assigned to one of St. Louis City circuit court’s two motion divisions.

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