Jim Dey: Illinois Supreme Court smells a fishy situation

Jim Dey: Illinois Supreme Court smells a fishy situation

Business groups have for years sought to persuade Illinois legislators to limit the worst of what they consider to be abusive litigation, mostly without success.

But a recent unanimous Illinois Supreme Court decision, one that relies as a controlling precedent on a unanimous 2014 U.S. Supreme Court decision, looks like it will do what legislators have declined to do — put limits on forum shopping by some trial lawyers looking for friendly venues to file their lawsuits.

"It's a game-changer," said Travis Akin, who represents Marion-based Illinois Lawsuit Abuse Watch.

The Illinois Supreme Court's decision, on its face, is unexciting. Issued in mid-September, the decision merely concluded the Aspen American Insurance Co. wrongly filed its lawsuit against Interstate Waterhousing in Cook County, Ill., instead of Indiana.

As a consequence of the ruling, Aspen can pursue the same claim against the same defendant, this time in Hoosier country.

The bigger issue is why Aspen preferred to file in Illinois and what the high court's ruling means for lawyers who want to file future lawsuits.

It's all about the money.

That's why major corporations, including Honeywell and Union Carbide, filed friend-of-the-court briefs supporting Interstate Warehousing's position that the lawsuit was filed in the wrong venue. It's also why the Illinois Trial Lawyers Association and the American Association for Justice filed amicus briefs arguing that the Cook County courts were the correct setting.

The warehousing company wanted to avoid Cook because it's one of three Illinois counties that have been labeled "judicial hellholes" by tort reform groups, places where plaintiffs have a distinct advantage. (The other two are St. Clair and Madison counties, located across the river from St. Louis.)

The trial lawyers wanted the case to be resolved in Cook County for the same reason business groups want to avoid it. They wanted a home-court advantage.

The incident that led to the lawsuit had nothing to do with Illinois.

Here's what happened.

An Interstate warehouse, one located near Grand Rapids, Mich. was storing "fish products" in a refrigerated building for the Eastern Fish Co. On March 8, 2014, a warehouse roof collapse ruptured gas lines and caused an ammonia leak. That led to the contamination of fish products that were "rendered unfit for human consumption."

Aspen insurance, based in Michigan, paid off New Jersey-based Eastern Fish. Then it sought reimbursement damages from Indiana-based Interstate Warehousing for the roof collapse.

It filed suit in Cook County under a so-called "long arm" provision in law that brought Illinois into play. It seems that Interstate operates a number of warehouse across the county, including one in Will County.

Claiming that the presence of the Will County warehouse means that Interstate's home base is, effectively, Illinois, the insurance company's lawyers filed in Cook County.

Interstate sought to dismiss the case on the grounds of wrongful jurisdiction. But the trial and appellate courts, ignoring the U.S. Supreme Court decision, held the Will County warehouse was sufficient to establish Illinois as the company's home base.

The two rulings were egregiously in error, as the Illinois Supreme Court subsequently held.

The rules changed with the U.S. Supreme Court's decision in Daimler AG v. Bauman.

In that case, Supreme Court Justice Ruth Ginsburg wrote for the court that Daimler could "not be sued in California for injuries allegedly caused" by human rights violations in Argentina when the alleged conduct "took place entirely outside of the United States."

Writing for Scotusblog, legal analyst William Baude said that Ginsburg's decision held lawsuits of this nature must be filed where the incident occurred — specific jurisdiction — or where the company is located — general jurisdiction.

"Outside of 'an exceptional case,' the court ruled, general jurisdiction will generally be limited to the places where a corporation is incorporated and its principal place of business." Baude wrote.

Relying on that finding, Illinois Supreme Court Justice Anne Burke said Illinois has no general jurisdiction over the warehousing company simply because of the Will County facility.

"Indeed, if the operation of a warehouse was sufficient, in itself, then defendant would also be at home in all the other states where its warehouses are located," Burke wrote. "... To subject defendant to general personal jurisdiction would therefore deny it due process of law."

With this decision, Illinois has become the latest state to address jurisdiction issues in light of the Daimler decision. They include Missouri, Utah and Oregon.

Trial lawyers have reacted with unsurprising disappointment to the Illinois decision. They suggest the law requires certainty, and the latest decision changes the rules.

There's no doubt about that. Madison and St. Clair counties have been for years notorious havens for asbestos litigation, many of the cases having little to nothing to do with Illinois.

Lawsuit reform advocate Akin suggested that the decision not only will affect future filings but current ones as well.

"You're going to see defendants more and more challenging why their cases are being filed in Madison County, St. Clair County and Cook County," he said.

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or by phone at 217-351-5369.