In November 2015, the Madison County Circuit Court denied a motion by Ford Motor Company (“Ford”) to dismiss an asbestos case for lack of personal jurisdiction. The court found that Ford’s “substantial” business activities in the State of Illinois were such that it was at home in the state and subject to the court’s jurisdiction. Jeffs v. Anco Insulations, Inc. et al., No. 15-L-533 (Cir. Ct. Mad. Co. 2015). In February, the Fifth District Appellate Court issued an order denying Ford’s petition for leave to appeal the Circuit Court’s decision pursuant to Supreme Court Rule 306. A few months later, the Illinois Supreme Court granted Ford’s motion for a supervisory order with the Illinois Supreme Court under Rule 383, and ordered the Fifth District to hear the appeal. On December 14, the Fifth District heard oral arguments in the appeal of the Madison County Circuit Court’s decision in Jeffs v. Ford Motor Co., Case No. 5-15-0529. The panel during oral argument included Justice Richard Goldenhersh, Justice James Moore, and Justice Thomas Welch.
Ford argued that it is not “at home” in Illinois under the Daimler test. Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014). To be “at home” in a state, a company must either be a citizen of the state or have its principal place of business there. The panel requested clarification on the definition of principal place of business. Ford responded that a company’s principal place of business is more than just a local office, but rather is the place where the decisions are made. Further, Ford argued that it should only be subject to general jurisdiction in Illinois in exceptional circumstances, such as those that existed in Perkins v. Benguet Consol. Mining Co., 72 S. Ct 413 (1952) (holding that general jurisdiction in Ohio over a Filipino corporation that had temporarily relocated its business operations to Ohio during WWII did not offend due process because Ohio was the corporation’s principal, if temporary, place of business).
The panel asked Ford to clarify why its significant business activities in Illinois did not subject it to general personal jurisdiction there. There was considerable discussion on this point with Ford asserting footnote 20 of the Daimler decision as controlling on the issue: “[a] corporation that operates in many places can scarcely be deemed at home in all of them.” In support of this point, Ford argued that if the Court were to consider all the states in which Ford transacts significant business, it would be suggesting that Ford is “at home” in six different states, over 10 percent of the United States. The panel commented that Illinois has a town named after Ford (Ford Heights, Illinois). Lastly, Ford argued that general jurisdiction should be easily ascertainable and that the Court should not have to do a “deep dive” through the corporation’s history of transacting business in Illinois to ascertain whether general jurisdiction exists.
As to general jurisdiction, Ford argued that it does not consent to general jurisdiction in Illinois simply by registering to do business in Illinois, as neither the Illinois Long Arm Statute nor the Illinois Corporations Act allows for jurisdiction under those circumstances. Ford asserted that it would be unduly coercive, to force it to consent to general jurisdiction simply because it was registered to do business in Illinois. Further, allowing Ford to be subject to general jurisdiction in Illinois would be against public policy as it would discourage Ford and other businesses from conducting business in the state.
Lastly, Ford addressed the issue of whether specific jurisdiction exists in this case. Ford requested that the Court follow its precedent in Keller v. Henderson, 359 Ill. App. 3d 605 (2d Dist. 2007) and use the standard set forth in that case: that the controversy must arise directly out of contacts between the defendant and the forum state. Plaintiff posited a more flexible reading of this standard in her brief.
Irene Jeffs’ Arguments
Plaintiff Irene Jeffs was represented by Jonathon Ruckdeschel of the Ruckdeschel Law Firm and Margaret Smadi of Maune Raichle Hartley French & Mudd LLC. Appellee began by arguing that “96 years ago, Ford chose to come to Illinois.” He further argued that the Illinois’ registration statute should be (and has been) construed to mean that companies registered to do business in Illinois, with an agent in Illinois, are subject to general jurisdiction there. See Hannibal & St. J.R. Co. v. Martin, 11 Ill. App. 386 (3d Dist. 1882). Jeffs’ counsel asked that the Court adhere to the precedent set by Hannibal, to avoid acting as the legislature, and to allow the Illinois Legislature to amend the Illinois statute if it sees fit. Jeffs’ counsel argued that Daimler’s holding was not intended to apply to cases where general jurisdiction is obtained via the consent by registration theory because consent by registration falls within the “traditionally recognized limits” of general jurisdiction and the Daimler court left those limits unchanged. See Daimler, 134 S. Ct. 746, at 758. In rebuttal, Ford cited footnote 18 of the Daimler opinion, where the Daimler court states that cases from the late 1880s embody “territorial thinking… that should not attract heavy reliance today.” Id. at fn. 18. Ford argued that Plaintiff’s 1882 Hannibal case falls within the era referenced in this footnote and should therefore be considered overturned by Daimler.
Appellee countered Ford’s analysis of the Illinois’ specific jurisdiction standard, arguing that Illinois case law has a more flexible reading of the “arises out of” or “related to” requirement. See Russell v. SNFA, 2013 IL 113909. In Russell, the court allowed specific jurisdiction over the defendant despite the weak nexus between the plaintiff’s injury and the defendant’s business activity. Here, appellee argued, the nexus between the decedent’s mesothelioma and Ford’s business activity in Illinois is much “tighter” than it was in Russell, and specific jurisdiction is proper in Illinois. In rebuttal, Ford distinguished Russell from the present case by pointing out that in Russell, the injury actually, physically occurred in Illinois, whereas here, the injury occurred outside of Illinois.
The last topic of argument was fairness, an essential element of the personal jurisdiction analysis. Appellee argued that Ford is not being unduly burdened by having Illinois as the forum state, because Ford has sophisticated asbestos counsel in Illinois to defend asbestos matters. Furthermore, Appellee argued that fairness dictates that Jeffs should be able to bring her case in a forum where she can hail as many of the potential tortfeasors into court as possible. In rebuttal, Ford pointed out that the fairness analysis in jurisdiction cases focuses on fairness to the defendant, not fairness to the plaintiff.
The panel of three justices asked pointed questions of both sides, although questioning of Ford appeared to be more aggressive, particularly from one justice. The other two justices didn’t overtly favor either side, so it’s difficult to anticipate how the Court will rule. Regardless of the ruling, we can expect the losing side will take this issue to the Illinois Supreme Court.
The Court took the matter under advisement and is expected to issue an order in the coming months. If you have questions concerning this or other toxic tort issues, please contact Joe Orlet.