The Takeaway
The differences in the facts of two Illinois cases relating to personal jurisdiction accounted for the differences in their outcomes. These cases clearly illustrate that to effectively argue personal jurisdiction after Daimler, defense attorneys need to carefully examine and analyze the facts of individual cases.
Background
Daimler AG v. Bauman, 134 S. Ct. 746, 761-62 (2014) was a tectonic event in analysis of the personal jurisdiction defense. The opinions of the U.S. Supreme Court and subsequent Illinois appellate courts’ decisions regarding personal jurisdiction that followed represent aftershocks that continue to shape and change personal jurisdiction analysis in Illinois.
Two recent Illinois appellate cases where Illinois appellate courts reached opposite conclusions regarding the viability of the personal jurisdiction defense offer guidance in this area.
The Higgins Case [1]
Patient’s attending physician in Illinois sought transfer of his patient to a Missouri hospital. The physician phoned two on-call physicians at that Missouri hospital to coordinate transfer. Because the Missouri hospital had no available bed, the Illinois physician sought input from the two on-call physicians on how to stabilize the patient until a bed became available. One of the Missouri doctors allegedly suggested a medication. After the Illinois doctor administered this medication, the patient went into cardiac arrest, at which point the doctor stopped giving the medication. The patient was transferred to the Missouri hospital, where she died the next day.
Among other defendants, the administrator of the patient’s estate sued the two Missouri doctors whom the Illinois physician had called as well as the university in Missouri that employed those two doctors.
Both Missouri doctors lived in Missouri and maintained their professional offices there.
Neither physician owned nor leased any real or personal property in Illinois. Neither advertised themselves as actively practicing medicine in Illinois. Neither physician ordered any medication to be administered to the patient while the patient was in Illinois.
Likewise, the university was a Missouri corporation and maintained its principal place of business in Missouri. It occasionally leased some of its physicians to Illinois healthcare facilities and recruited Illinois residents to become its students.
The university also had an Illinois not-for-profit organization affiliated with it that provided services exclusively in Illinois. The Illinois affiliate’s physicians were full-time faculty members of the university’s school of medicine. Neither of the Missouri doctors in this case was acting as this affiliate’s employee during the relevant times in this case, and plaintiff did not name this affiliate as a defendant nor raise any claims against it in this case.
The trial court found it did not have jurisdiction over the two Missouri doctors and the Missouri university. The Fourth District Court of Appeals affirmed.
Analysis of the Ruling
On appeal, plaintiff contended there was specific personal jurisdiction over the defendant doctors and general jurisdiction over the university. Plaintiff did not claim general jurisdiction in Illinois over the two Missouri doctors.
Specific Jurisdiction
The Fourth District rejected plaintiff’s contention there was specific jurisdiction over defendants. The Court relied on the facts that both Missouri doctors lived in Missouri and maintained their professional offices there. It further noted that neither physician owned nor leased any real or personal property in Illinois and had not advertised as actively practicing medicine in Illinois. The Court also believed it was important that neither Missouri physician ordered any medication be administered to the patient while the patient was in Illinois.
The appellate court found the only connection these two Missouri doctors had to Illinois in this case were the phone calls they had with the patient’s Illinois treating physician. The Court believed the Missouri doctors provided advice focused solely on facilitating the patient’s transfer to Missouri. The Court emphasized that the Illinois physician initiated the phone calls; neither Missouri doctor nor any other employee of the university initiated the calls.
The appellate court held that the facts were insufficient to find the two Missouri doctors—nor the university, as their employer—purposely availed themselves of the benefits and protections of the laws of Illinois.
General Jurisdiction
The Court then turned to plaintiff’s contention that Illinois had general jurisdiction over the university.
On appeal, plaintiff argued that the university “has repeatedly taken steps to make itself at home in Illinois” by continuously providing healthcare services throughout Illinois and specifically targeting Illinois residents to attend the university. Plaintiff also contended that the university’s Illinois not-for-profit affiliate’s connections to Illinois were attributable to the university for jurisdictional purposes.
The appellate court held that the university’s occasionally leasing some of its physicians to Illinois facilities was not a sufficient basis for general jurisdiction. The Court noted that the university conducted approximately 98% or more of its business in Missouri, meaning it conducted approximately 2% or less in Illinois. The Court further noted that the university did not operate any facilities in Illinois and did not bill patients or their insurers for the medical care provided by its physicians when they were leased to Illinois healthcare facilities.
It also rejected plaintiff’s contention that recruiting Illinois residents to become students provided a basis for general jurisdiction over the university in Illinois.
Finally, the Court refused to attribute the university’s Illinois not-for-profit affiliate’s connections to Illinois to the university because plaintiff failed to present any evidence that the affiliate was effectively only doing the university’s business.
Therefore, the Court affirmed the dismissal of both Missouri doctors and the university from the case based on lack of personal jurisdiction over them by Illinois courts.
The Brody Case[2]
An Illinois company’s Chicago office received five anonymous letters addressed to its current and former leaders. The letters claimed that one of the company’s senior executives, who was a resident of Tennessee, had engaged in money laundering, wire fraud, unlicensed money transmitting, embezzlement, and tax evasion. DNA tests linked these letters to two California residents. The Tennessee resident then sued the California letter writers for defamation in Illinois, alleging that the comments in the letters constituted defamation per se.
Defendants asserted that as nonresidents, the Illinois court lacked specific personal jurisdiction over them because there was neither public policy nor efficiency in hearing the case in Illinois. Defendants also asserted that they didn’t have minimum contacts with Illinois and had no fair warning that they could be subject to the jurisdiction of the forum state.
Relying on the fact that the plaintiff whom defendants allegedly targeted resided in Tennessee not Illinois, the trial court granted defendants motion to dismiss for lack of personal jurisdiction. The trial court believed it was not reasonable to assert jurisdiction over defendants because neither Illinois nor plaintiff had a compelling interest in litigating this case in Illinois.
Analysis of the Ruling
The First District disagreed with the circuit court. As plaintiff had not contended there was general personal jurisdiction over defendants, the appellate court analyzed the issue based solely on specific jurisdiction.
The Court relied on the principle that the tort of defamation occurs where the defamatory statements are published and that publication of defamatory statements occurs when the statements are conveyed to third parties. The Court reasoned that because defendants allegedly sent the letters to the leaders of the company, who received and read them in Illinois, publication of defendants’ statements occurred in Illinois.
Due Process Requirement
The Court then addressed whether requiring defendants to litigate in Illinois satisfied the due process requirement. The Court noted that the three prongs of the test plaintiff needed to establish were:
- Defendants had “minimum contact” with the forum state, so defendants had “fair warning” that they might be brought into court in that state.
- The action arose out of or was related to defendants’ contact with the forum state.
- It was reasonable to require defendants to litigate in the forum state.
The Court reasoned that the first two prongs of the test were met because defendants allegedly directed their activities toward Illinois when they intentionally sent five defamatory letters about plaintiff to the company located in Illinois. The Court also found that by sending the five letters, defendants established minimum contacts with Illinois, thereby satisfying the first due process requirement. The Court held that because plaintiff’s alleged injuries arose out of and were directly related to the defamatory letters that were published in Illinois, defendants’ contacts with Illinois gave rise to this action, which was sufficient to satisfy the second requirement.
The Court then turned to the last prong, that of reasonableness, for which they utilized a five-factor test:
- burden on defendants to defend the action in the forum state
- forum state’s interest in adjudicating the suit
- plaintiff’s interest in obtaining effective relief
- interstate judicial system’s interest in obtaining the most efficient resolution of the suit
- shared interests of the several states in promoting fundamental social policies
The Court concluded that the first factor was not satisfied. Defendants were residents of California and faced a notable burden in litigating the case in Illinois. It found, however, that the other four factors were satisfied.
The Court believed that the fact that plaintiff’s injuries stemmed from defendants’ Illinois publication of the supposedly defamatory statements gave Illinois a strong interest in preventing defamation in the state, thus satisfying the second factor.
The Court found that because plaintiff’s injuries occurred in Illinois when the letters about him were sent to recipients in Illinois, plaintiff had a strong interest in obtaining relief in Illinois and in defending his reputation among the company’s Illinois employees, which satisfied the third factor.
Furthermore, the appellate court believed that since the tort occurred in Illinois and the recipients of the defamatory letters were located in Illinois, Illinois was an efficient forum for the resolution of plaintiff’s suit.
Finally, the Court felt that the fifth factor had also been satisfied because Illinois has a strong social policy of compensating tort victims (like plaintiff) who are defamed in the state.
Therefore, in weighing all five factors, the First District found that exercising jurisdiction over defendants in Illinois was reasonable and there was personal jurisdiction over defendants in Illinois under the specific jurisdiction principle. Thus it reversed the judgment of the circuit court on this issue.
Conclusion
The tectonic plates of the personal jurisdiction analysis are still evolving and have not yet settled. To effectively argue personal jurisdiction, defense attorneys need to carefully examine and analyze the details of individual cases. Similarly to the aftermath of any tectonic event, failure to do so could result in either a personal jurisdiction defense or an entire case crashing to the bottom of the abyss.
[1] Higgins v. Blessing Hosp., 2024 IL App (4th) 231531
[2] Brody v. Hoch, 2024 IL App (1st) 231524
AssociateAlex Belotserkovsky focuses his practice on trials involving complex litigation matters, including asbestos cases and toxic tort issues. He has decades of civil litigation experience.
Mr. Belotserkovsky is fluent in Russian.
