June 2017

CCG_Seal_260x2001On June 13, 2017, the Illinois First District Appellate Court issued an unpublished opinion holding that a Cook County judge erred in denying a forum non conveniens motion where essentially the entire case rests not in Plaintiffs’ chosen forum of Cook County, but in Winnebago County.[1]

The doctrine of forum non conveniens is premised on “considerations of fundamental fairness and sensible and effective judicial administration.”[2] It assumes that more than one forum possesses the power to hear a case, but permits a court to decline jurisdiction where another forum can “better serve the convenience of the parties and the ends of justice.”[3]  In determining whether to accept or decline jurisdiction, the court must balance private interest factors affecting the convenience of the litigants and public interest factors affecting the administration of the courts.[4]

The private interest factors the court considers include the convenience of the parties; the relative ease of access to testimonial and documentary evidence; and other practical matters, which tend to make a trial “easy, expeditious, and inexpensive.”   The public interest factors include the interest in deciding controversies locally; the unfairness of imposing trial expense and the burden of jury duty on residents of a forum with little connection to the litigation; and adding litigation to already congested court dockets.

In cases such as Rohl, where the primary issue is one of product liability, Illinois courts have found that the location of the accident is less significant and largely supplanted by a more general interest in resolving a claim concerning an allegedly defective product.[5] Also, because a jury visit to the accident site is generally unnecessary, the significance of this factor is further diminished in product liability claims.[6] On appeal, forum non conveniens decisions are evaluated using an abuse of discretion standard in Illinois.  Therefore, it is somewhat of an understatement to say that it is difficult to overturn a trial court’s decision regarding a forum non conveniens motion in Illinois, particularly in a product liability case.

Here, Plaintiffs Irvin and Marlene Rohl sued several defendants in Cook County alleging that asbestos exposure led to Mr. Rohl’s fatal lung cancer.  Certain defendants filed motions to transfer the matter from Cook County to Winnebago County under the doctrine of forum non conveniens.  The Cook County trial judge denied the motions, citing Mr. Rohl’s attendance at a trade school in Cook County in the late 1940s where, according to the Court’s ruling, Mr. Rohl was exposed to asbestos.  The appellate court initially denied the petition for review of the trial court’s denial of the forum non conveniens motion.  However, in December 2016, the Illinois Supreme Court entered a supervisory order directing the appellate court to grant the petition and resolve the forum non conveniens motion on its merits.

The complaint, filed in January 2016, alleged that Mr. Rohl was exposed to asbestos through his employment as a laborer, heavy-equipment operator, and mechanic from 1950 until 1999.  Specifically, Plaintiffs
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supreme-court-building-1209701_1280In a groundbreaking decision that follows closely on the heels of its jurisdictional decision in BNSF Railway Co. v. Tyrrell, 581 U.S. __ (May 30, 2017) (“Tyrrell”), the United States Supreme Court held that the California Supreme Court was wrong to let approximately 600 non-California residents join 86 state residents in a pharmaceutical claim against Bristol-Myers in which plaintiffs alleged that it misrepresented the risk of heart attacks and strokes associated with the use of its blood thinner, Plavix. In overturning the decision of the California Court, the Supreme Court premised its holding on the fact that the out-of-state plaintiffs had not shown enough of a connection between their alleged injuries and the company’s activities in California.

As previously reported, in an effort to find a way around the restrictions imposed on a court’s exercise of specific personal jurisdiction over a foreign corporation by the U.S. Supreme Court’s Daimler decision,  the California Supreme Court used specific personal jurisdiction as a tool to enlarge the Court’s power to exercise personal jurisdiction over a foreign corporation.  In Bristol-Myers Squibb, the California Supreme Court expressly held that Bristol-Myers Squibb was not subject to general personal jurisdiction in California, as its contacts with the state were not substantial enough to render it “at home” in the jurisdiction. It held, however, that specific personal jurisdiction existed over Bristol-Myers Squibb in California—even for plaintiffs who were not injured in California—based on its “purposeful availment” of the benefits and privileges of the laws of the State of California as a result of its “nationwide marketing, promotion and distribution [that] created a substantial nexus between the non-resident plaintiffs’ claims and the company’s contacts in California . . . .” Bristol-Myers Squibb Co. v. Superior Court, No. S221038, 2016 WL 4506107 (Cal. Aug. 29, 2016).

In the Supreme Court’s June 19, 2017 opinion, it reversed the California Supreme Court by a vote of 8-1. It made clear that specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” If a state has no “legitimate interest” in particular claims, a defendant should not be forced to submit to the coercive power of the state with respect to those claims. Bristol-Myers Squibb Company v. Superior Court of California, San Francisco County, et al., 582 U.S. ___, ____ (2017) (slip op. at 6). The Supreme Court explicitly held that specific jurisdiction requires a connection between the forum and the specific claims at issue. Id. When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State. Id. at ­­­___ (slip op. at 7).  Applying that requirement, the Court found that California could not exercise specific jurisdiction over Bristol-Myers Squibb with respect to non-residents’ claims because: (1) the non-residents did not claim to have suffered harm in California; and (2) all the conduct giving rise to the non-residents’ claims occurred
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blood-pressure-1573037_1920No, this is not déjà vu. On June 8, 2017, the Supreme Court of Florida struck down another legislative mechanism to limit damages in personal injury cases. In North Broward Hospital District v. Kalitan, the Supreme Court decided that non-economic damage caps on medical malpractice actions violate the Equal Protection Clause of the Florida Constitution. Non-economic damages are non-pecuniary harms such as permanent disability, disfigurement, blindness, loss of a limb, paralysis, trauma, or physical pain and suffering. While shocking to some, this decision is not entirely surprising due to the Supreme Court’s 2014 decision in Estate of McCall v. United States that invalidated non-economic damage caps for wrongful death actions under equal protection.

In 2003, the Florida Legislature decided to address the medical malpractice insurance crisis in Florida by enacting Florida Statute 766.118, which limits the non-economic damages that could be awarded in personal injury matters arising from medical negligence.  According to legislative findings at that time, as cited in the McCall opinion, the increase in medical malpractice liability insurance premiums resulted in “physicians leaving Florida, retiring early from the practice of medicine, or refusing to perform high-risk procedures, thereby limiting the availability of health care.” To counter this crisis, Florida Statute 776.118(2) limits non-economic damages awards for medical negligence of practitioners to $500,000 per claimant except where the negligence resulted in a permanent vegetative state, death, or catastrophic injury and a manifest injustice would occur unless increased damages are awarded.  In that case, damages may be awarded in an amount up to $1 million. Section 766.118(3) limits damages to $750,000 and $1.5 million, respectively, when the injury results from the negligence of non-practitioners. By enacting theses caps, the Legislature anticipated that physicians’ medical malpractice insurance premiums would drop, physicians would remain in Florida, not opt for early retirement, the number of physicians practicing without insurance would decrease, and the number of physicians who refused to perform high-risk procedures would decrease.

While it was the Legislature’s position that this alleged crisis was said to be of an “unprecedented magnitude,” the Supreme Court in Kalitan determined that the Legislature’s findings were not supported by the available data. In fact, in the years since the cap’s implementation, the Court found that the intended effects have not manifested themselves.  Instead, physicians have chosen to remain in Florida, but still opt not to carry malpractice insurance; medical malpractice premiums are the same, if not slightly higher; and insurance income increased.

Even if the data were accurate, the Supreme Court declared that the statute nonetheless arbitrarily infringes upon the constitutional guarantee of equal protection under the laws, because there is a lack of evidence supporting a direct correlation between non-economic damage caps and reduced malpractice premiums. Relying on its McCall decision, the Supreme Court explained that the damage caps have the effect of saving a minimal amount for many by imposing devastating costs on the most catastrophically injured, and those who sustain the greatest damage and loss. Doing so “offends the fundamental notion of
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supreme-court-building-1209701_1280With the United States Supreme Court hearing less than 100 cases every year, it is exceedingly rare for the Court to address a particular issue more than once.  However, with state courts throughout the country failing to properly apply its 2014 decision in Daimler AG v. Bauman, 134 S.Ct. 746 (“Daimler”), the Supreme Court recently found it necessary to reaffirm that absent “exceptional” circumstances a foreign corporate defendant is subject to general personal jurisdiction only in its state of incorporation or principal place of business.  Specifically, in BNSF Railway Co. v. Tyrrell, 581 U.S. __ (May 30, 2017) (“Tyrrell”), the Supreme Court held that Montana state courts could not exercise general personal jurisdiction over defendant BNSF, despite the fact that BNSF had fairly significant business ties to the state, because BNSF was neither incorporated in Montana nor had its principal place of business within the state.  While Daimler and Tyrrell will not eliminate the practice of forum shopping by plaintiffs, they do place material limitations on a plaintiff’s ability to file litigation in any forum where the injury did not occur and plaintiff must therefore rely on general personal jurisdiction alone in establishing personal jurisdiction over a foreign corporate defendant.

Background

Tyrrell involves two initially independent cases brought in Montana state courts by plaintiffs (Tyrrell and Nelson) under the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. §51 et seq., which allows railroad employees to sue their employers for injuries sustained on the job.  Both plaintiffs brought suit in Montana state courts, but neither case involved an injury that occurred in the state, and neither plaintiff resided in the state.  While defendant BNSF is incorporated in Delaware with its headquarters in Texas, it does have significant business ties to Montana, where 5% of its work force is located and roughly 6% of its railroad track is contained.  BNSF filed a motion to dismiss in each lawsuit, asserting that pursuant to Daimler it was not “at home” in Montana, and therefore not subject to general personal jurisdiction.  Because the injuries giving rise to the causes of action did not occur in Montana, specific personal jurisdiction was not at issue.  In Nelson’s case the motion was granted, but in Tyrrell’s case the motion was denied.  The rulings were appealed, and on appeal the Montana Supreme Court consolidated the two matters.

The Montana Supreme Court found that the state courts had general personal jurisdiction over BNSF under FELA because BNSF was doing business in Montana at the time of the suit.  In finding personal jurisdiction over BNSF, the Montana Supreme Court distinguished the Supreme Court’s holding in Daimler based on the application of FELA, concluding that because of the federal statute general personal jurisdiction could be conferred to the state courts even if the Daimler test was not satisfied.  The Montana Supreme Court also found that Montana state law allows for the state courts to exercise personal jurisdiction over BNSF because BNSF conducts business in the state. 
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Asbestos(Cropped)On Friday, June 2, 2017, the California Court of Appeal for the Second District, issued an unpublished opinion holding that Shell Oil Company owed a duty to protect from asbestos exposure the wife of a former machinist who worked at Shell facilities from approximately 1954 to 1992. Beckering v. Shell Oil Company (Cal. Ct. App., June 2, 2017, No. B256407), “Beckering II”). In this recent opinion, the Court of Appeal reversed its own earlier ruling from 2014 which initially held that a premises owner has no duty to protect a family member from secondary exposure to asbestos off the premises (Beckering v. Shell Oil Company (Cal. Ct. App., Nov. 21, 2014, No. B256407), “Beckering I”).

Beckering II, the latest appellate decision regarding the scope of duty owed in secondary asbestos exposure or “take home” cases, is the result of the trickledown effect of the California Supreme Court’s December 2016 decision Kesner v. Superior Court (2016) 1 Cal.5th 1132.

Kesner v. Superior Court

In Kesner, the California Supreme Court examined whether employers and landowners owe a duty of care to prevent secondary exposure to asbestos and held that “the duty of employers and premises owners to exercise ordinary care in their use of asbestos includes preventing exposure to asbestos carried by the bodies and clothing of on-site workers.” Kesner v. Superior Court (2016) 1 Cal.5th 1132, 1140. In so holding, the Court found it was “reasonably foreseeable that workers, their clothing, or personal effects will act as vectors carrying asbestos from the premises to household members [and that, therefore] employers have a duty to take reasonable care to prevent this means of transmission.” Id. Notably, “[t]his duty also applies to premises owners who use asbestos on their property” regardless of whether the premises owner is the vector’s employer, although the Court recognized that premises liability includes a number of affirmative defenses and exceptions which may be applicable depending on the facts of the case. See Id., at 1140, 1160.

To arrive at this conclusion, the Supreme Court examined and applied the well-established “Rowland factors” which, when balanced together, can justify a departure from the general rule of ordinary care: (1) the foreseeability of harm to the plaintiff; (2) the degree of certainty that the plaintiff suffered injury; (3) the closeness of the connection between the defendant’s conduct and the injury suffered; (4) the moral blame attached to the defendant’s conduct; (5) the policy of preventing future harm; (6) the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach; (7) and the availability, cost, and prevalence of insurance for the risk involved. Kesner, 1 Cal.5th at 1145; see Cabral v. Ralphs Grocery Co. (2011) 51 Cal.4th 764, 771; Rowland v. Christian (1968) 69 Cal.2d 105, 112; see also Parsons v. Crown Disposal Co. (1997) 15 Cal.4th 456, 472.

In finding that “[t]he most important [
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