According to the Supreme Court of Illinois, merely conducting business within that state is insufficient to satisfy the standards for personal jurisdiction established by the U.S. Supreme Court in Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  The Illinois Supreme Court recently explored that issue in Aspen American Insurance Company v. Interstate Warehousing, Inc., where a plaintiff headquarted in Indiana attempted to bring an action in Illinois for damages allegedly caused by the collapse of a warehouse in Michigan.  Plaintiff Aspen brought a subrogation action in Cook County, Illinois seeking to recover damages allegedly caused by the collapse of a warehouse near Grand Rapids, Michigan, which was owned by Defendant Interstate Warehousing. The Defendant, which is headquartered in Indiana, operates eight warehouses across the country, one of which is in Joliet, Illinois.

 

In its pleadings, the Plaintiff sought to rely upon the Defendant’s Joliet warehouse to establish personal jurisdiction in Illinois. In its motion to dismiss for lack of personal jurisdiction, the Defendant did not dispute that it was doing business in Illinois. Instead, the Defendant argued that the business it was conducting in Illinois was insufficient to subject it to general personal jurisdiction under the U.S. Supreme Court’s decision in Daimler AG v. Bauman. Relying on Daimler, the Defendant explained that the Plaintiff failed to establish that the Defendant was either domiciled or “at home” in Illinois. The circuit court disagreed, and denied the Defendant’s motion. A divided appellate court affirmed the dismissal denial of the motion to dismiss.

                                                                                                                                                                                   

Writing on behalf of a unanimous Court, Justice Burke reversed the lower court decisions, holding that the Plaintiff failed to make a prima facie showing that the Defendant was “essentially at home” in Illinois, as required by Daimler. More specifically, the Court determined that the Plaintiff’s burden was to show that the Defendant was incorporated or had its principal place of business in Illinois, or in the alternative, that the Defendant’s contacts with Illinois were so substantial that an exception was warranted. In making its determination, the Court looked at Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952), in which the defendant, a Philippines company, was forced to relocate from the Philippines to Ohio during World War II. In that case, the Supreme Court found that Ohio was “the center of the corporation’s wartime activities” and, effectively, a “surrogate for the place of incorporation or head office.” Perkins, 342 U.S. at 448.

 

In the Aspen case, the Defendant Interstate Warehousing was an Indiana corporation with its principal place of business in Indiana, which was registered to conduct business in Illinois and employed the general manager of a warehouse in Joliet. The Plaintiff pointed both to the Defendant’s registration with the Illinois Secretary of State and the business it carried out at its Joliet warehouse as establishing jurisdiction; however, the Illinois Supreme Court ultimately concluded that those facts were insufficient either to render the Defendant at home in the state or to establish that the Defendant’s contacts constituted the type of exceptional connection to the forum that was recognized by the Perkins Court. The Aspen Court reasoned that “if the operation of the warehouse was sufficient, in itself, to establish general jurisdiction, then the defendant would also be at home in all the other states where its warehouses are located.” That kind of reasoning already was expressly rejected by the U.S. Supreme Court in Daimler.

 

Therefore, the Illinois Supreme Court reversed the lower court rulings and remanded the case to be dismissed for lack of personal jurisdiction. The Aspen decision is consistent with the Delaware Supreme Court’s decision last year that merely registering to do business in that state is insufficient to establish personal jurisdiction.  See Genuine Parts Co v. Cepec (137 A.3d 123 (Del. 2016). Earlier this year the U.S. Supreme Court left open the question of whether registration to do business may constitute consent to personal jurisdiction.  See BNSF Railway Co. v. Tyrrell (May 30, 2017), slip op. at 12.  Accordingly, the issue remains unsettled.  However, the Aspen and Genuine Parts decisions suggest that until the U.S. Supreme Court weighs in, momentum currently runs against the use of business registration statutes to establish personal jurisdiction.

Court RulingThe Georgia Supreme Court has weighed-in on the issue of manufacturers’ liability for take-home exposure cases. In the opinion recently issued in CertainTeed Corporation v. Fletcher, the Court drew an unexpected distinction between a manufacturer’s duty to issue warnings and its responsibility to keep harmful products out of the stream of commerce. Justice Carol Hunstein, writing for the Court, concludes that while manufacturers do not generally have a duty to warn third parties of the possible hazards of asbestos dust from its products, a manufacturer does bear the burden of proving that its product, as designed, is not defective. The opinion comes as a bit of surprise, as it seems to contradict a prior opinion issued by the Court, wherein it held that an employer owes no duty to third-party, non-employees, who come into contact with its employees’ asbestos-tainted work clothing at locations away from the work place.

Plaintiff Marcelle Fletcher filed suit in Georgia after being diagnosed with malignant pleural mesothelioma. In her complaint, Fletcher alleges that years of laundering her father’s asbestos-tainted clothing caused her to come into contact with asbestos from cement water pipe manufactured by CertainTeed, which eventually caused her mesothelioma. When the trial court granted CertainTeed’s motion for summary judgment on Fletcher’s failure-to-warn and product defect claims, Fletcher appealed. The appellate court reversed and the Georgia Supreme Court thereafter granted review of CertainTeed’s appeal.

On appeal, the Supreme Court held that CertainTeed, as a manufacturer, owed no duty to warn Fletcher of the possible hazards of asbestos dust from its products. In reaching its conclusion the Court cited public policy concerns that could result from an expansion of the class of individuals protected by a manufacturer’s duty to warn, stating that any such duty placed on the manufacturer would ultimately shift to the product user. Looking at the facts in the case before it, the Court determined that while “Fletcher would not have seen any warning label placed on CertainTeed’s products … a warning could have permitted her father to take steps to mitigate any danger posed by the asbestos dust on his clothing.” The Court nevertheless determined that such a conclusion would be “problematic” in that it effectively makes the product-user responsible for protecting those with whom he or she comes into contact, whether those individuals were members of the same household or members of the same community. The Court reasoned that imposing such an indefinite and imprecise duty on CertainTeed to warn all individuals in Fletcher’s position would be unreasonable, classifying the scope and mechanism of such warnings as “endless.”

Regarding Fletcher’s design defect claim, however, the Supreme Court upheld the appellate court’s reversal of summary judgment, finding that CertainTeed had failed to prove that its product was not defectively designed. The Court’s holding seems, at first, to contradict its 2005 decision in CSK Trans. v. Williams, 278 Ga. 888, 608 SE 2d 208 (2005), wherein the Court barred take-home exposure claims against employers, holding that employers did not owe a duty to the household members of its employees. The Court in Fletcher drew a distinction between the duties owed by an employer to its employees’ household members and the duties owed by a product manufacturer to third-party, non-users of its products. The Court explained that unlike a duty to warn claim, analysis of a design defect claim centers on the conduct of the manufacturer and the reasonableness of its product’s design. Both factors are considered within the standard framework of risk-utility analysis utilized in product liability claims, including the consideration of factors such as the usefulness of the product and whether the manufacturer acted reasonably in choosing a particular product design given the seriousness of the risk posed by the product.

Moving forward, the current ruling lessens the burden on manufacturers defending take-home exposure claims in Georgia by eliminating the need for those manufacturers to prove that they issued sufficient warnings decades ago, a generally fact-sensitive determination that often hinges on witness testimony and presumably faulty memories. Manufacturers can likewise find some relief in the Court’s holding regarding design defect claims. Because the analysis of a design defect claim does not consider a plaintiff’s use of the alleged defective product but rather focuses on the manufacturer’s conduct in designing the product, manufacturers are in a position to establish and fine-tune these defenses without having to rely heavily on the specific facts of each case where it applies. Given the Court’s ruling on duty to warn claims, we expect that the State of Georgia will see an increase in design defect claims brought by take-home plaintiffs.

KastenmeierUSCT_Madison_WI_exterior_941675052106904545_1435163225376
Robert W. Kastenmeier United States Courthouse Madison, WI

A district court judge for the Western District of Wisconsin has issued a defense-verdict following a three-day bench trial, during which Plaintiff argued that his father’s work with Kaylo pipe insulation caused his death from mesothelioma. In his opinion in Gary Suoja, Individually and as Special Administrator of the Estate of Oswald Suoja v. Owens-Illinois, Inc., Magistrate Judge Stephen Crocker found that Plaintiff failed to meet his burden of showing that exposure to Kaylo was a substantial cause of Mr. Suoja’s mesothelioma. Though ultimately decided on the basis of pretrial motions that precluded the testimony offered by Plaintiff’s causation expert, Judge Crocker discussed Plaintiff’s failure to incorporate evidence of alternative exposures, stating that ignoring such evidence when arguing cumulative exposure was “disingenuous” on the part of the Plaintiff.

The current matter was filed on behalf of the Estate of Gary Suoja against numerous companies, only one of which—Owens-Illinois—remained at trial. Mr. Suoja worked as a union asbestos worker for 40 years, beginning in 1944. Throughout the course of the lawsuit, the Estate argued that Mr. Suoja’s lengthy career as an asbestos worker caused him to work with and around numerous asbestos-containing products; however, evidence of these exposures was noticeably absent from trial.

In order to establish the causation element of his negligence and strict liability claims, Plaintiff offered only the testimony of Dr. Frank. Dr. Frank’s position was that Mr. Suoja’s cumulative exposure to asbestos from working with Kaylo, manufactured by Owens-Illinois, caused his mesothelioma. When presenting his cumulative exposure theory, Dr. Frank took the position that any asbestos exposure, “no matter how slight, no matter how minimal” is a part of an individual’s cumulative exposure and thus a cause of resulting disease. Dr. Frank offered this opinion only in relation to Mr. Suoja’s limited work with Kaylo insulation; he did not offer any opinion about the amount of asbestos from Kaylo to which Mr. Suoja was exposed, nor did he compare the amount of Mr. Suoja’s Kaylo exposure to Mr. Suoja’s cumulative exposure to asbestos from the numerous other products he worked with over the course of his 40-year career.

Plaintiff took the position that Mr. Suoja’s admissions of other exposures were largely irrelevant, arguing that most were simply assertions of exposure without any information regarding the dosage level at which Mr. Suoja was exposed. Plaintiff further argued that if Owens-Illinois wanted to attack Dr. Frank’s causation opinion on the ground that he failed to account for other exposures, then it was defendant’s burden to establish that these alternative exposures were substantial in nature.

Judge Crocker addressed Plaintiff’s argument, calling it “unpersuasive” and stating that “[i]t is disingenuous for plaintiff to have obtained recovery from numerous bankruptcy trusts and asbestos manufacturers based upon sworn admissions of asbestos exposure and then to brush aside those admissions as irrelevant to causation in this lawsuit.” Plaintiff’s lawsuit against Owens-Illinois was ultimately dismissed for failure to establish both exposure and causation.

About the Author

Katherine Vogelhuber is an associate in the firm’s products liability and complex tort practice, where she concentrates on products liability defense and litigation management for a number of the firm’s national clients. Kate is admitted to practice in the Commonwealth of Massachusetts and the State of Illinois. In 2007, Kate received her Bachelor of Arts from Skidmore College in Saratoga Springs, New York. She received her J.D. from DePaul University College of Law in Chicago, Illinois in 2012.