Plaintiff John Crane Inc. brought a six-count complaint against defendants Simon Greenstone Panatier Bartlett, P.C., Jeffrey B. Simon, and David C. Greenstone, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, et seq., and common law claims for conspiracy and fraud in the U.S. District Court for the Northern District of Illinois, Eastern Division. The defendants contemporaneously filed a motion to dismiss for lack of subject matter jurisdiction and failure to state a claim, however, as a matter of economy, the court first addresses the defendants’ motion to dismiss for personal jurisdiction and venue.
The plaintiff was a Delaware corporation with its principal place of business in Morton Grove, Illinois that manufactured and distributed industrial sealing products. Defendant Simon Greenstone Panatier Bartlett, PC, a a law firm, organized under the laws of Texas, with its principal place of business in Dallas, Texas. The firm’s partners and shareholders are residents of Texas and California. The firm has offices in California and Texas and primarily represents injured persons in asbestos and mesothelioma personal-injury cases. The plaintiff alleged that Simon was lead counsel in the firm’s mesothelioma cases and had final decision-making authority over all firm litigation, while Greenstone headed the firm’s asbestos bankruptcy practice and served as the firm’s managing partner.
The plaintiff contended that the firm and the referring lawyers exploited the two track system by making claims with the trusts, but withholding in tort litigation the asbestos exposures on which the trust claims were based. The plaintiff alleged the defendants had total control over exposure evidence because their clients’ testimony was often the only evidence of exposure. Further, evidence of exposure to a bankrupt company’s product can provide a defendant in tort litigation with a basis to argue that another company’s product partially or fully caused the plaintiff’s disease, particularly if the other company’s product is more potent. As a result, alternative exposure evidence, especially when it comes directly from the plaintiff’s testimony, makes it substantially more likely that a tort-defendant will be found not liable or that the plaintiff’s recovery will be limited. The plaintiff alleged this created an incentive for the firm to falsify their clients’ exposure histories. Additionally, the plaintiff alleged that the firm generally delayed filing trust claims until after the resolution of the tort litigation, especially if the firm handled the trust claims as well as the tort litigation in an attempt to fraudulently obtain money verdicts and settlements in tort litigation.
To file under the RICO statute, the plaintiff alleged that this scheme was “nationwide in scope.” In addition, the plaintiff alleged although the firm had offices in Texas and California, they practice throughout the country, including in Illinois, and the exemplar cases are from Texas, California, and Pennsylvania. According to the plaintiff, the defendants relied on interstate mail and wires to serve court documents, sent pleadings and discovery response, filed motions with the court, and communicated settlement demands with the plaintiff and its counsel, both located in Chicago. The defendants also caused the plaintiff to make payments to the defendants’ clients via interstate mail and wires and the defendants’ scheme occurred in the regular course and scope of business.
The court applied Illinois law to the defendants’ personal jurisdiction claim in arriving at the conclusion that John Crane lacked both general and specific jurisdiction. “…the key question is “whether the exercise of personal jurisdiction would violate federal due process.” The due process clause permits the exercise of personal jurisdiction over a nonresident defendant as long as the defendant purposefully has established “minimum contacts” with the forum state. The “minimum contacts” standard may be satisfied by personal jurisdiction that is either general or specific. (Citations omitted). The defendants argued that this court did not have personal jurisdiction over them because the plaintiff’s claims against the defendants related entirely to the defendants’ alleged conduct in cases litigated outside of Illinois, namely in California, Texas, and Pennsylvania. The plaintiff counter argued that the defendants “expressly aimed” their activities at Illinois by directing communications that they knew contained misrepresentations to the plaintiff in Illinois and caused injury to the plaintiff in Illinois.
In granting the defendant’s motion, the court commented: “Other courts, in several jurisdictions, have similarly refused to exercise specific jurisdiction over attorneys for their forum state contacts related to out-of-state litigation, even when the attorneys were representing clients residing in the forum state.” The court continued: “Plaintiff has thus failed to establish that Defendants expressly aimed their conduct at Illinois, so it has failed to establish that the Court has personal jurisdiction over Defendants.”