*Legal Potpourri
October, 2011
by Melinda S. Kollross and Edward M. Kay
We wish to report on several decisions that have recently been issued which we believe you will find of interest in your business and practice.
PERSONAL JURISDICTION RULES APPEAR TO BE TIGHTENING
On June 27, 2011, the United States Supreme Court issued a decision regarding personal jurisdiction in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S.Ct. 2780 (2011). The Supreme Court reviewed New Jersey law which provided that under a stream of commerce theory of personal jurisdiction, a New Jersey court's exercise of jurisdiction over a foreign defendant was proper if that defendant knew or reasonably should have known "that its products are distributed through a nationwide distribution system that might lead to those products being sold in any of the 50 states." Nicastro v. J. McIntyre Machinery America, Ltd., 201 N.J. 48, 77 (2010). At issue in J. McIntyre was whether a New Jersey court had jurisdiction over a foreign manufacturer despite the fact that the foreign manufacturer never sold goods in and never shipped goods to New Jersey. The New Jersey Supreme Court held that the trial court's assertion of jurisdiction over the foreign manufacturer was proper under the stream of commerce theory of personal jurisdiction. McIntyre, 201 N.J. at 77.
At issue in J. McIntyre was whether a New Jersey court had jurisdiction over a foreign manufacturer despite the fact that the foreign manufacturer never sold goods in and never shipped goods to New Jersey. The New Jersey Supreme Court held that the trial court's assertion of jurisdiction over the foreign manufacturer was proper under the stream of commerce theory of personal jurisdiction. McIntyre, 201 N.J. at 77.
The U.S. Supreme Court reversed the New Jersey Supreme Court's decision, holding that jurisdiction over the foreign manufacturer was improper. Justice Kennedy announced the judgment of the Court and wrote an opinion for a 4-justice plurality; Justice Bryer wrote an opinion concurring in the judgment joined by Justice Alito. The plurality opinion rejected the test under which a defendant who foresaw and expected that its goods can be sold as part of a final product to the consumers of some forum could be sued in that forum. The plurality instead adopted an approach that would only allow a state to exercise jurisdiction over a foreign defendant if that defendant had purposefully availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. The concurrence by Justices Bryer and Alito would not adopt as strict a rule as that enunciated by the plurality but they too voiced disagreement with the notion that mere foreseeability is the cornerstone of the stream of commerce jurisprudence. The plurality and concurring opinion nonetheless agreed that the New Jersey Supreme Court's ruling that a manufacturer's mere awareness that its products might be sold in New Jersey did not satisfy the purposeful availment requirement required by due process. The Court reasoned that a state court's exercise of power over a defendant requires an act by which the defendant "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." According to the Court, purposeful availment renders jurisdiction compliant with "traditional notions of fair play and substantial justice."
The Supreme Court held that J. McIntyre had not engaged in conduct purposefully directed at New Jersey where the only evidence submitted in favor of jurisdiction was an agreement by J. McIntyre's distributor to sell the products in the United States, the presence of J. McIntyre's officials at trade shows in various states not including New Jersey, and the fact that four products landed in New Jersey. J. McIntyre did not have an office in New Jersey, it did not pay taxes or own property in New Jersey, it never advertised in New Jersey, and it never sent any employees to New Jersey. Consequently, the Court ruled that the facts were insufficient to establish that J. McIntyre purposefully availed itself of the New Jersey market.
Practice Pointer: If you are currently litigating a case in a state that has adopted a liberal personal jurisdiction rule such as New Jersey's stream of commerce theory, you might want to consider now objecting to personal jurisdiction based upon the intervening decision by the United States Supreme Court in J. McIntyre. Many courts hold that waiver rules will not be applied to a litigant's arguments regarding jurisdiction in the event of an intervening decision changing a law such as in J. McIntyre.
PETRILLO DOCTRINE REAFFIRMED IN AYLWARD V. MICHAEL SETTECASE, 948 N.E.2D 769 (ILL. APP. 2011)
For the last 25 years, Illinois defense counsel have been hamstrung in personal injury litigation by a rule of law known as the "Petrillo doctrine." Under that doctrine, defense counsel cannot have ex parte communications with a plaintiff's treating physician. The First District reaffirmed that doctrine recently.
At issue in Aylward v. Michael Settecase was the question of whether counsel for a co-defendant multi-specialty clinic in a malpractice action could communicate ex parte with its employees whose actions could be a basis for liability against the clinic in the future.
Dr. Settecase was employed by the Midwest Physician Group. Plaintiff alleged that Settecase and the Group were negligent in diagnosing his cancer. In his original complaint, plaintiff alleged that the Group "through its agents, servants and/or employees" undertook to render medical care to plaintiff. When counsel for the group wrote to plaintiff's counsel requesting permission to contact other Group employees to discuss plaintiff's treatment, plaintiff's counsel objected on the grounds that they were not parties to the case and stating that at this time the only defendant was Settecase. Plaintiff then amended his complaint removing the language "through its agents, servants and/or employees" and instead alleged that the Group through Settecase's conduct undertook to render care to him. The Group argued that it should be allowed to interview other employees of the Group because plaintiff could add additional claims against the Group and its employees. The court, however, found that this was an insufficient basis to depart from Petrillo holding that "Petrillo and its progeny, is clear: unless and until the actions of the [group] employees are alleged to be a basis for plaintiff's injuries, [the group] cannot engage in ex parte communications with them."
Practice Pointers: The fact situation in Aylward should be distinguished from that involving a hospital. In Hall v. Flowers, 798 N.E.2d 757 (Ill.App. 2003), the Appellate Court held that the Hospital Licensing Act carves out an exception to the Petrillo doctrine. Where a patient institutes a legal action against a hospital, "[t]he hospital is not a third-party with respect to its own medical information, which is compiled by the hospital's own caregivers." The Appellate Court found that the clear and unambiguous language of the Act permits limited ex parte communications between a hospital's defense counsel and plaintiff's treating physician. These communications can take place so long as (1) the communications are strictly limited to the intra-hospital setting, (2) there is no disclosure of a patient's medical information to outside third-parties, (3) the communications are merely circumscribed to include only medical care and treatment rendered to the patient at the hospital, by the hospital's own medical staff, agents or employees, and (4) the communications involve only information already known to the hospital by virtue of the Act.
THE MINEFIELD OF POST-TRIAL AND APPELLATE PRACTICE
The Illinois Appellate Court's decision in Manny v. City of Chicago, 944 N.E.2d 876 (Ill.App. 2011), again shines the spotlight on the minefield that is known as post-trial and appellate practice.
The decision involves something as mundane as a motion for an extension of time to file a post-trial motion. In Illinois, one can extend the time for filing a post-trial motion beyond the 30-day due date, but the motion for that extension must be filed within the 30-day period and the order granting the motion must be entered in the same 30-day period. In this case, the motion was filed within the 30-day period, but the trial court did not enter the order allowing the motion until after the 30 days had run. This meant that the time for filing the post-trial motion was not properly extended. The result: the litigant lost both his rights to have the adverse judgment reviewed by the trial court and his appeal rights since the appeal was not tolled by an improper extension of the time to file a post-trial motion. The end result was that the litigant's appeal was dismissed and he has no remedy.
Practice Pointer: Appellate counsel should always be retained during the post-trial and appellate phases of a case. As illustrated by Manning, even something as mundane as a simple motion for extension of time, if done improperly, can have fatally disastrous results for your case. Only the appellate attorney knows best and he/she should be retained for post-trial and appellate work.
Back to CM Report of Recent Decisions (2011v3) 2011 Volume 3 Table of Contents
