ILLINOIS LAW UPDATE

Posted: 11/28/2016

A petition for leave to appeal to the Illinois Supreme Court has been filed and granted. The Illinois Supreme Court will now review the Illinois First District Appellate Court's recent ruling on the general jurisdiction issue in Aspen American Ins. Co. v. Interstate Warehousing, Inc., No. 121281, 1st Dist.  icon _IL_Official_Reports_Appellate_Court_.pdf (1122 KB). You may recall from our prior report that the 1st District Appellate court held that general jurisdiction may be found where plaintiffs made a prima facie case of general jurisdiction by producing evidence showing that defendant advertises its Illinois warehouse in Joliet as its own, that defendant's employee is the general manager of the Joliet warehouse, and that defendant has been licensed to transact business in Illinois for 27 years. The court then held that the burden switched to the defendant to show that its contacts were not sufficiently continuous and systematic enough to "support the assertion of general jurisdiction over [it]." citing Alderson v. Southern Co., 321 Ill. App. 3d 832, 858 (2001).

The defendant argued in opposition that its state of incorporation and its principal place of business were in Indiana, and defendant averred that the Joliet warehouse was operated by IW Illinois, a limited liability corporation in which defendant only had a 75% stake. The court found significant that defendant chose not to offer evidence of the amount of business it was conducting in Illinois and held that the burden was on the defendant to prove that its contacts with Illinois were actually "too slim" to support jurisdiction. Russell, 2013 IL 113909, ¶ 28

Justice Bertina E. Lampkin of the 1st Dist. Appellate Court wrote the dissenting opinion stating:

"The majority, however, misses the point of Daimler, where MBUSA was conducting business in California to a much greater extent than defendant's slim business conduct shown here in Illinois, and the Court still characterized that contact with California as "slim." Daimler, 571 U.S. at ___, 134 S. Ct. at 760. Being authorized to transact business in Illinois does not distinguish this case from Daimler; the relevant question is whether plaintiff has established that defendant should be regarded as comparable to a domestic enterprise. Merely conducting business in Illinois from a home base in Indiana is hardly the sort of unusual fact that would render this an exceptional case amenable to the exercise of general jurisdiction in Illinois."

It will be interesting to see if this jurisdictional issue is either overturned by the Illinois Supreme Court or if it makes its way even further up to the U.S. Supreme Court. In the meantime, defendants will have to contend with the fact that the Illinois First District is now apparently willing to find jurisdiction over out-of-state companies by defining businesses as "at home" in Illinois, supported only by limited business connections from which the litigation did not arise. We will keep you advised.