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Cleary v. Morris

March 17, 2000

BRIAN CLEARY AND DAN TRENHOLM, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-APPELLEES,
V.
PHILIP MORRIS, INCORPORATED, ET AL., DEFENDANTS,
AND B.A.T. INDUSTRIES, P.L.C., RICHARD E. NEVILLE, DEFENDANT-APPELLANT.



The opinion of the court was delivered by: Presiding Justice Zwick

Appeal from the Circuit Court of Cook County. Honorable Judge Presiding.

This action, brought on behalf of a State-wide class of smokers, seeks to recover money spent on tobacco products. Defendant, B.A.T. Industries, p.l.c. ("BAT Industries") appeals from the circuit court's order denying its motion to dismiss plaintiffs' complaint as against it for lack of personal jurisdiction. We granted B.A.T. Industries Petition for Leave to Appeal under Supreme Court Rule 306(a)(3). 134 Ill. 2d R. 306(a)(3).

The record shows that B.A.T. Industries is incorporated under the laws of England and Wales with its office located in London, England. Affidavits filed by B.A.T. Industries state that it has never had more than 185 employees, all located in London. The company is engaged in the administering of its investment interests as a shareholder in hundreds of subsidiaries, including defendants Brown & Williamson Tobacco Corporation ("B&W") and British-American Tobacco Company Limited ("BATCo")(which company changed its name on April 24, 1998 to British-American Tobacco (Investments) Limited.) Neither of those two subsidiaries has contested personal jurisdiction in this matter.

B.A.T. Industries asserts, without challenge from plaintiffs, that it has never engaged in the manufacture, sale, advertising or marketing of tobacco products, nor any other goods or products, in Illinois or anywhere else. It has no office, place of business, mailing address, bank account, telephone listing, real estate or personal property in Illinois, does not pay taxes of any kind in Illinois, is not licensed or qualified to do business in Illinois, has no employees in Illinois, and does not contract to supply goods or services in Illinois.

Whether plaintiffs can assert jurisdiction over B.A.T. Industries is initially considered by examining the Illinois long-arm statute. 735 ILCS 5/2-209 (West 1998). The doing of any of the specific acts enumerated in section 2-209 furnishes the "minimum contacts" with Illinois to satisfy due process. Illinois applies a two-step analysis to determine whether the court acquires personal jurisdiction pursuant to the long-arm statute. IBM v. Martin Property, 281 Ill. App. 3d 854, 666 N.E.2d 866 (1996). The first step is to determine if jurisdiction is proper under the specific language used by section 2-209. If the answer is no, the inquiry ends; but if jurisdiction if found to be proper under the statute, then we reach the second step and determine whether the exercise of jurisdiction comports with due process of law. IBM, 281 Ill. App. 3d at 858.

The "commission of a tortious act within this State" is a sufficient basis on which to base the assertion of personal jurisdiction under the long-arm statute. 735 ILCS 5/2-209(a)(2)(1998). The plaintiffs contend that B.A.T. Industries is subject to Illinois jurisdiction as a result of its joining a conspiracy the purpose of which was to commit tortious acts in Illinois, as well as violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. The complaint alleges, for example, that the defendants engaged in a scheme to conceal the addictive nature of nicotine and that Brown & Williams, a B.A.T. Industries American subsidiary, sent to B.A.T. Industries in England certain research and development reports compiled in the United States on the topic of smoking, disease and addiction, in order to remove sensitive and inculpatory documents from the United States. This and other actions undertaken by B.A.T. Industries were meant to deceive Illinois consumers about the true addictive and harmful nature of tobacco use. Thus, plaintiffs claim that B.A.T. Industries comes within Illinois' jurisdiction as a co-conspirator.

B.A.T. Industries first challenges the notion that it can be summoned into court in Illinois merely on the basis of its alleged participation in a conspiracy to do harm in Illinois.

The conspiracy theory of personal jurisdiction employed by plaintiffs is based on the premise "that the acts of [a] conspirator in furtherance of a conspiracy may be attributed to the other members of the conspiracy." Markarian v. Garoogian, 767 F. Supp 173 (N.D.Ill 1991).

A non-resident defendant can be subject to an Illinois court under the theory if: (1) the defendant was part of an actionable conspiracy, and (2) a co-conspirator performed a substantial act in furtherance of the conspiracy in Illinois. Textor v. Board of Regents, 711 F.2d 1387, 1392-93 (7th Cir. 1983).

Up until recently, the viability of the conspiracy theory of jurisdiction in Illinois was unclear. As B.A.T. Industries argues, our supreme court has indicated some hesitancy in applying it. See Green v. Advance Ross Electronics Corp., 86 Ill. 2d 431, 427 N.E.2d 1203 (1981), citing Chromium Industries, Inc. v. Mirror Polishing & Plating Co., 448 F. Supp 544, 552 (N.D.Ill 1978). In Cameron v. Owens-Corning Fiberglas Corp., 296 Ill. App. 3d 978, 695 N.E.2d 572 (1998), however, this court endorsed the theory, finding that it was both consistent with the Illinois long-arm statute and the requirements of due process. In its ruling, the circuit court held that the conspiracy allegations against the defendants, including B.A.T. Industries, created a sufficient basis for it to assert personal jurisdiction under Cameron, even though B.A.T. Industries was an overseas defendant and had submitted affidavits countering many of the allegations of the complaint.

B.A.T. Industries asks that we review Cameron, a case which has not yet been considered by a First District panel, as well as consider the question of whether the circuit court applied Cameron properly to the facts of the case before it. According to B.A.T. Industries, the conspiracy theory of jurisdiction is not "well-rooted in Illinois law"; it is conceptually flawed because it conflates liability and jurisdiction; it violates the Illinois and federal constitutions by removing the individualized analysis required by due process; and "courts across the nation" have recognized its weakness.

We summarily reject any argument that the conspiracy theory of personal jurisdiction should not be adopted simply because it is novel. The fact that it is not "well-rooted" in Illinois jurisprudence or even that other courts have rejected it are not sufficient reasons to reject the theory in the absence of an analysis of its strengths and flaws. It is enough for us to note that, at the present time, the theory has not been widely rejected by Illinois courts.

As for the logical basis of the theory, we believe there is more to support its adoption in Illinois than to oppose it. B.A.T. Industries argues strongly that the theory is defective because it confuses liability with jurisdiction. To be sure, there is an important distinction to be drawn between these two concepts. The fact that a defendant may be liable under Illinois law is not particularly relevant to the question of whether jurisdiction may be asserted. See Olinski v. Duce, 155 Ill. App. 3d 441, 443-44, 508 N.E.2d 398 (1987). One of this court's decisions has specifically cautioned that "the question of personal jurisdiction and personal liability should not be blurred." Burnhope v. National Mortgage Equity Corp., 208 Ill. App. 3d 426, 440, 567 N.E.2d (1990).

However, the rationale underlying the due process requirement of "minimum contacts" is that the defendant must be able to foresee the possibility of being haled into a forum court given its conduct and connection with the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985). To reject the conspiracy in all cases has the effect of giving those outside Illinois who have perpetrated an Illinois tort through the agency of others a potentially unfair immunity from suit. Surely those that join a conspiracy the purpose of which is to commit fraud or other tort in Illinois should, in some circumstances, reasonably foresee the possibility of being haled into court here. We therefore hold that in ...


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