Illinois Gov. JB Pritzker
In coming weeks, Illinois Gov. JB Pritzker will decide to either veto or sign a new law which would greatly expand the ability of trial lawyers to drag companies from all over the country into Illinois' famously plaintiff-friendly state courts to face big money lawsuits that may have nothing to do with Illinois or anyone in the state.
However, as Illinois Democrats have moved to open the state's courts to a potential flood of out-of-state lawsuits, a recent controversial U.S. Supreme Court decision that supporters of the legislation have cited to support the change in the law yet faces an uncertain future and could rest on shaky constitutional ground.
"The constitutionality of laws like the proposed Illinois statute - which would deem a corporation to have consented to jurisdiction simply by registering to do business in the state - remains a developing and unsettled area of law," said attorney Jennifer L. Dlugosz, of the firm of Husch Blackwell, of Chicago.
Dlugosz’s practice centers on representing companies facing lawsuits for so-called “toxic torts,” or lawsuits accusing them of causing injuries through exposure to toxic substances, like pesticides or pollutants.
Known as SB328, the legislation would create a new "consent-by-registration" system in Illinois, under which the companies from throughout the U.S. and the world could be sued in Illinois courts for certain kinds of claims, whether or not the company has any real presence in Illinois or if the alleged injury occurred in Illinois.
To this point, Illinois courts have operated as so-called "specific personal jurisdiction" legal venues. Under such a system, plaintiffs attempting to sue companies in Illinois state courts needed to prove that the company had sufficient ties to the state or that an incident that caused the alleged harms happened in Illinois.
The specific jurisdiction rules, which historically have controlled in most U.S. states, have served to limit the legal exposure of companies which operate across state lines, limiting the ability of trial lawyers to "forum shop" by choosing to file lawsuits in court systems considered to be more friendly to their pursuit of massive verdicts and settlements, often worth many millions or even billions of dollars.
Businesses and lawsuit reform advocates have denounced such tactics as abuses of the nation's legal system in pursuit of big profits for trial lawyers.
However, under the SB328 legislation, the law would be rewritten to allow trial lawyers to sue any company that has registered to do business in Illinois - a clerical act mandated by law in all 50 states - for "injury or illness resulting from exposure to a substance defined as toxic" under Illinois state law "whether the cause of actions arises within or without the State."
"The new law seems to allow Illinois courts to hear toxic tort claims against registered (or even unregistered but active) foreign corporations, even where the alleged exposure or injury occurred entirely outside Illinois and involves non-resident plaintiffs," said Dlugosz.
In the context of state courts and lawsuits, the term "foreign corporations" is a legal term referring to companies based outside of Illinois, not necessarily to non-U.S. companies.
"This could open Illinois courts to a broader range of toxic tort claims that previously would have been barred for lack of jurisdiction," Dlugosz said.
Flood of new lawsuits?
Business and legal reform advocates have similarly warned of a potential flood of new lawsuits, flowing into Illinois state courts, which they said would only further cement Illinois' widespread and longstanding reputation for being anti-business.
Lou Sandoval, president of the Illinois Chamber of Commerce, said his organization is among a coalition that both opposed SB328 when it was rushed through the Illinois General Assembly and is urging Pritzker to veto the legislation now.
Sandoval noted that Pritzker's Democratic counterpart in New York, Gov. Kathy Hochul, vetoed similar legislation enacted by Democrats in that state, also at the urging of the state's powerful trial lawyers. In vetoing the legislation, Hochul said she worried about the impact such a law might have on New York's economy.
Sandoval said he hoped Pritzker would take that into account in Illinois, as well.
"We have expressed our strong concerns about SB 328 to the governor’s office and remain hopeful that he will carefully consider the economic implications of this bill," Sandoval said in response to questions from The Record.
"We encourage Gov. Pritzker to take the same prudent course that another governor took, recognizing that expanding litigation risk doesn’t support a strong business climate. A veto would send a clear message that Illinois values fairness, balance, and economic growth."
The Illinois legislation appears to be patterned after a similar consent-by-registration jurisdiction system in place in Pennsylvania's state courts.
There, the system has notably been used in recent years by trial lawyers to pile in thousands of lawsuits from out-of-state plaintiffs into Philadelphia's local courts. The reputation of Philadelphia's courts is similar to that of Cook County and other Illinois state courts, including courts in downstate Madison and St. Clair counties, near St. Louis. All of the jurisdictions have been labeled "Judicial Hellholes" by legal reform group, the American Tort Reform Association.
The system in Pennsylvania has been repeatedly challenged in court in recent years, as businesses have asserted that state's consent-by-registration statute violates their constitutional rights to due process.
They have also asserted the system stands as a violation of the Constitutions' so-called Commerce Clause, which they say should be read to forbid lawsuits to be filed in a state court by plaintiffs from outside the state against defendants either located wholly outside the state or which otherwise have no real ties to the state.
The question of such jurisdiction has occupied the attention of the U.S. Supreme Court on several occasions in recent years.
In 2017, for instance, the nation's high court ruled in the case known as Bristol-Myers Squibb v Superior Court of California that non-California residents couldn't use California federal courts to sue a non-California based company - in that case, pharmaceutical company Bristol-Myers Squibb - because the courts lacked specific personal jurisdiction over the parties involved.
Lou Sandoval
Accepting a SCOTUS ‘invitation?’
However, in 2023, the U.S. Supreme Court appeared to sow more confusion over such jurisdictional questions, when a closely divided court ruled for trial lawyers and their plaintiffs seeking to keep their personal injury claims against railroad operator Norfolk Southern alive in Philadelphia's state courts.
In the ruling known as Mallory v Norfolk Southern, the Supreme Court, overall, ruled 5-4 that Norfolk Southern's attempt to defeat the claims on jurisdictional grounds should fail, even though the plaintiffs may be from outside Pennsylvania and Norfolk Southern isn't based in Pennsylvania.
The majority, led by conservative Justice Samuel Alito, said the cases against Norfolk Southern should be allowed to proceed based on the railroad's "substantial business operations" within the Keystone State. The majority in Mallory said this means the Philadelphia lawsuits don't violate Norfolk Southern's constitutional due process rights.
However, the ruling featured an array of opinions from the nine justices, with four justices strenuously dissenting. Led by conservative Justice Amy Coney Barrett, the dissenting justices said they believed it was clear the use of Philadelphia's courts in such a fashion were unconstitutional legal abuses.
Barrett and her fellow dissenters noted the Mallory ruling will result in an "invitation" from the Supreme Court for states "to manipulate registration" to open their courts to out-of-state claims, making "specific jurisdiction" requirements "superfluous."
Under SB328, Illinois lawmakers, pointing to the Mallory decision, appear to have accepted that invitation, moving quickly at the behest of the state's trial lawyers to expand the reach of Illinois' courts to so-called "toxic tort" claims from throughout the country.
In the years since the ruling, however, legal observers and lower courts have agreed the Mallory decision left many more questions unanswered than it answered.
This summer, the U.S. Supreme Court has already been asked to overturn or at least clarify its holdings in Mallory. In an action again arising out of Philadelphia's courts, Switzerland-based agricultural tech company Syngenta has petitioned the U.S. Supreme Court to decided if thousands of lawsuits have been lodged against them unconstitutionally in Philadelphia courts.
Those lawsuits center on claims that Syngenta's commercial weed killer, known as Paraquat, has caused Parkinson's disease in humans.
Syngenta, however, has argued trial lawyers have engaged in illegal "forum shopping" by bringing those lawsuits in Philadelphia courts on behalf of hundreds of people who don't live in Pennsylvania.
And unlike Norfolk Southern in the Mallory case, Syngenta argues it doesn't have the "substantial business operations" in Pennsylvania identified by the majority in Mallory that allowed the lawsuits against Norfolk Southern to continue.
Pennsylvania state judges rejected Syngenta's contentions, and the Pennsylvania Supreme Court declined to take up the case, even though the Mallory decision had overturned its own earlier decision in favor of Norfolk Southern on the jurisdictional questions.
Syngenta then filed a petition on appeal to the U.S. Supreme Court, asserting the high court needs to address confusion the Mallory ruling has created in lower courts throughout the country. Those courts were already sharply divided on such jurisdictional questions before the Mallory ruling, Syngenta noted, and remain so after the ruling.
Syngenta argues the Mallory ruling left unanswered the questions of whether states, like Pennsylvania and Illinois, can force companies to agree to be sued in their courts as a precondition of doing business in that state without violating the Constitution's Commerce Clause or violating the due process rights of companies with only a minimal presence in that state.
The Mallory decision, Syngenta said, "opens the door to subjecting every company that does even a modicum of business across the 50 States to general personal jurisdiction in all 50 States, for claims having nothing whatsoever to do with at least 49 (if not all 50) of the States."
The U.S. Supreme Court has not yet ruled on Syngenta's petition for appeal and has given the trial lawyers suing the company until Aug. 4 to respond to Syngenta's petition. It is not yet known when the Supreme Court may decide the fate of Syngenta's petition.
However, any Supreme Court decision will likely come weeks, if not months, after Pritzker decides to sign or veto SB328 in Illinois.
Dlugosz noted the Illinois legislation comes against a backdrop of legal uncertainty surrounding the question of personal jurisdiction under consent-by-registration laws.
"Prior to Mallory, courts were divided on whether consent-by-registration statutes were constitutional, and even after Mallory, litigation continues over the scope and application of such laws," Dlugosz said. "For example, some courts have suggested that other constitutional challenges may still be viable, or that not all registration statutes are sufficiently clear to constitute valid consent.
"Given this evolving legal landscape, it is not yet settled whether all laws of this type will withstand constitutional scrutiny in every circumstance."
At the Illinois Chamber, Sandoval declined to weigh in on the question of whether SB328 would pass constitutional scrutiny, instead saying he hoped Pritzker will take into consideration the economic impact from the legislation.
Pritzker has in recent years launched a campaign advertising Illinois as "the best state to do business."
The constitutional questions are "obviously up to the courts to decide," Sandoval said. "But for an organization that prioritizes pro-business, pro-growth policies, I fear for the chilling effect it will have on attracting businesses to Illinois."
Should Pritzker sign the law, it could also open Illinois to yet more legal action over constitutionally questionable legislation enacted by Illinois Democrats on Pritzker's watch.
The state, for instance, among other legal actions, is being sued by gun owners over its so-called "assault weapons" ban; has been sued by abortion opponents for attempting to use the state's consumer fraud law against so-called crisis pregnancy centers; and is facing legal action from the U.S. Justice Department for its so-called "sanctuary" policies, offering government benefits to illegal immigrants and shielding illegal immigrants from immigration enforcement actions, and for a state law which could expose employers to state government action for using the federal E-Verify system when screening employees to determine if they have legal authorization to work in the U.S.
