personal-jurisdiction-considerations-in-missouri-illinois

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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