By Andrew Hahn on September 26, 2018

gavel courtThe Fifth District Appellate Court issued its long-awaited decision in Jeffs v. Ford Motor Company recently finding that Ford Motor Company was not “at home” in Illinois and ordering the Madison County trial court to dismiss Plaintiff’s claims against Ford. Jeffs v. Ford Motor Company, No. 5-15-0529, 2018 WL 3466965 (5th Dist. 2018).

Plaintiff Irene Jeffs (“Plaintiff”) alleged that Decedent Dale E. Jeffs (“Decedent”) suffered direct exposure to asbestos at a Ford plant in Michigan and secondary exposed to asbestos through his father’s time working at the same Michigan plant. Decedent was diagnosed with mesothelioma in January 2015, passed away shortly thereafter. Plaintiff brought suit against several defendants, including Ford.

Ford is incorporated in Delaware and has its principle place of business in Dearborn, Michigan. As such, Ford filed a motion to dismiss Plaintiff’s claims for lack of personal jurisdiction arguing that it was not subject to general jurisdiction in Illinois as it is neither incorporated nor has its principle place of business there.  Further, Ford argued that there was no specific personal jurisdiction, in accordance with Keller v. Henderson, 359 Ill. App. 3d 605 (2d Dist. 2007), because the controversy did not arise directly out of contacts between Ford and Illinois because the factory at issue was in Michigan.

In response to Ford’s motion, plaintiff argued that (1) Ford had consented to general jurisdiction in Illinois; (2) Ford was essentially at home in Illinois; and (3) Illinois had specific jurisdiction over the case. The trial court agreed with Plaintiff, holding that because Ford had a certificate of authority to conduct business in Illinois, owned real property in Illinois, had dealerships in Illinois, sold vehicles in Illinois, maintained a registered agent in Illinois, conducted regular business in Illinois, and litigated numerous cases without asserting any objection to jurisdiction in Illinois, Ford conducted “substantial, not de minimus, business in Illinois.” Further, the trial court determined that Ford had consented to jurisdiction in Illinois because it was authorized, licensed and doing business in Illinois since 1922.

Ford immediately filed a petition for leave to appeal the decision of the trial court. The Fifth District Appellate Court originally denied the leave to appeal, and Ford petitioned the Illinois Supreme Court for leave to appeal. The Supreme Court denied the appeal, but entered an order directing the Court to hear the matter. Arguments were heard in the Fifth District on December 14, 2016. The Toxic Tort Monitor previously discussed this here.

In its opinion, the Court denied that Illinois had specific jurisdiction over Ford stating that because the Ford plant at issue was in Detroit, Michigan, the conduct giving rise to the claim did not occur in Illinois and there was no specific jurisdiction. Next, the Court rejected the idea that Ford had consented to jurisdiction by registering to do business in Illinois and maintaining a registered agent for service of process in Illinois. Relying heavily on the recent Illinois Supreme Court decision in Aspen American Insurance Co., the Court noted that none of the Illinois Business Corporation Act’s provisions require corporations to consent to jurisdiction as a condition of doing business in Illinois or that maintaining a registered agent waives due process limitations on the exercise of general jurisdiction.

Finally, the Court analyzed the previous United States Supreme Court’s rulings in International Shoe Co., Burger King Corp., Goodyear, Perkins, and Daimler. Under these cases, a state can only exercise personal jurisdiction over a nonresident defendant if the defendant has sufficient minimum contacts with the state. For general jurisdiction to exist the foreign corporation’s contacts with the state must be so continuous and systematic that the foreign corporation is “at home” in the state. Generally, a corporation is “at home” in its place of incorporation and its principal place of business, but there can be “exceptional circumstances” that allow a corporation to be considered home in additional forums. The Court noted that the trial court incorrectly used a “substantial business” standard when it ruled on Ford’s motion, instead of the “at home” standard. By applying the “at home” standard, the Court found that Ford’s previously mentioned contacts with Illinois, even if they were substantial, did not rise to the level of an “exceptional circumstance” and Ford was not “at home” in Illinois. Therefore, Illinois did not have general jurisdiction over Ford, and the Court reversed the trial court’s ruling and further instructed the trial court to dismiss the claims against Ford.

The Jeffs order follows other recent rulings – with Aspen from the Illinois Supreme Court – and nationally with BNSF from the United States Supreme Court – that continue to limit jurisdiction over foreign corporations. While Jeffs is not precedential, as it was issued in a Rule 23 unpublished opinion, the order is notable as a guidepost of how the Fifth District may rule in personal jurisdictional disputes.[1] It may influence how the trial courts within the Fifth District, notably Madison County, consider the personal jurisdiction issue, and defendants will certainly point to this decision when bringing motions to dismiss based on personal jurisdiction.

[1] Ford moved to have the opinion published, but that request was denied.