Litigation Law Roundup

Sharp   Thinking

No. 185   Perspectives on Developments in the Law from Sharp-Hundley, P.C.   July 2020

Court Limits Specific Jurisdiction Doctrine

An Illinois court may not exercise specific personal jurisdiction over out-of-state defendants on behalf of out-of-state plaintiffs where the claims at issue do not “arise out of,” or “relate to,” the defendants’ Illinois activities in “any meaningful sense of the terms.”

So held the Illinois Supreme Court last month in a key application of federal jurisdiction limitations upon Illinois cases.  Rios v. Bayer Corp., 2020 IL 125020.

In Rios, 94 plaintiffs from 25 other states joined with a Madison County resident in suing the manufacturers of a medical device made outside Illinois.  Plaintiffs sought to defend choice of the Illinois forum on the grounds that defendants marketed in Illinois, conducted clinical trials in Illinois, contracted with Illinois physicians and facilities, and established a physician accreditation program in Illinois.

However, these contacts were insufficient to justify specific jurisdiction over the defendants as to the non-resident plaintiffs’ claims, the court said.  Citing Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), it said a state may assert specific personal jurisdiction over an out-of-state defendant only if “the litigation results from alleged injuries that arise out of or related to these [in-state] activities.”

Citing Bristol-Myers Squibb Co. v. Superior Court, 138 S.Ct. 1773 (2017), it said “a nonresident defendant’s general connections with a forum do not provide a basis for state courts to assert specific personal jurisdiction.”  Hence the contacts cited by plaintiffs did not confer jurisdiction where the gravamen of the case was manufacture, plaintiffs’ doctors were not trained in Illinois, and plaintiffs’ devices were not implanted in Illinois.

“Where no adequate link exists between Illinois and the nonresident plaintiffs’ claims, it necessarily follows that Illinois lacks specific personal jurisdiction over defendants as to those claims,” the court said.

Federal Rules Can’t Provide Duty Element In Negligence Suit

The Federal Rules of Civil Procedure cannot be the basis for the duty of care required in a state-law negligence claim, the United States Court of Appeals for the Seventh Circuit ruled recently.

In Turubchuk v. Southern Ill. Asphalt Co., 958 F.3d 541 (7th Cir. 2020), plaintiffs were injured while traveling on an expressway that was being repaved by a joint venture.  Plaintiffs sued in federal district court and settled for the policy limits of the joint venture’s insurance.  Later they learned the participants in the joint venture individually had additional insurance, and the plaintiffs sued again, claiming defendants negligently had misrepresented the applicable insurance in their initial disclosures under Federal Rule of Civil Procedure 26.  They claimed defendants had a duty to disclose insurance correctly under Rule 26, and that defendants negligently had failed to do so.  The district court found for plaintiffs.

The Seventh Circuit reversed.  Noting that the Rules Enabling Act, 28 U.S.C. § 2072(b), provides that rules enacted thereunder “shall not abridge, enlarge or modify any substantive right”, the court said “[v]iolation of the federal rules has not been policed by permitting them to serve as the duty component of a state law negligence claim.”

“It was a legal error for the district court in the second lawsuit to allow plaintiffs’ negligence claim to proceed when it relied on a Federal Rule of Civil Procedure for a duty of care”, the court said.

Place Of Issuance Controls On Process Server Appointment

A licensed or registered private detective may serve process, without special appointment, anywhere in the state so long as summons was issued from a county with a population less than 2 million, the Appellate Court’s Third District has held.

The decision in Municipal Trust & Savings Bank v. Moriarity, 2020 IL App (3d) 190016, puts the Third District in open disagreement with the Appellate Court’s Second District, which had held that where the process is served – not where the process is issued – determines whether the special appointment provisions of 735 ILCS 5/2-202(a) must be met.  See Schorsch v. Fireside Chrysler-Plymouth, Mazda, Inc., 172 Ill. App. 3d 993 (1988).

In Moriarity, summons was issued from Kankakee County (less than 2 million persons) but served in Cook County (more than 2 million persons) by a registered employee of a detective agency who was not specially appointed.  Under Schorsch the service – and the resulting judgment – would have been void.

However, citing 735 ILCS 5/2-202(b) (“Summons may be served upon the defendants wherever they may be found in the State, by any person authorized to serve process”), the Third District said the statute was “clear and unambiguous” and empowered “‘any person authorized to serve process’ to do so on ‘defendants wherever they may be found in the State.’”

Dismissed Defendant Still A “Party” For Discovery Purposes

A dismissed defendant is still a “party” and a circuit court has discretion to permit it to conduct discovery in support of its post-judgment motion for sanctions under Supreme Court Rule 137, a panel in the Appellate Court’s Fifth District has ruled.

Acting in Hursey v. Calhoun, 2020 IL App (5th) 190276, the court rejected an argument that the former defendants no longer were parties once claims against them were dismissed.  Supreme Court Rule 201(b)(1) provides that “a party” may obtain disclosures by discovery.  After the dismissed defendants filed a Rule 137 motion against plaintiffs and the circuit court ruled an evidentiary hearing was required, the former defendants initiated discovery to learn what, if anything, had supported the claims against them.  The trial court ordered such discovery and the plaintiffs refused to comply.  Plaintiffs appealed from the resulting contempt order.

The Appellate Court held that the trial court had discretion to permit such discovery.  “Because the supreme court considers a pending motion for sanctions as the substantive equivalent of a pending ‘claim’ in the underlying action, the logical conclusion is that the circuit court has discretion to allow discovery related to this ‘claim,’ so that the party seeking sanctions can obtain full disclosure of matters relevant to the pending motion,” the court said.  It said this was “particularly true” where the circuit court had determined that an evidentiary hearing was necessary.