New York asbestos attorney Paul Napoli says a recent decision out of the Delaware Supreme Court could provide defendants with the support they need to transfer asbestos cases out of Madison County on personal jurisdiction arguments.
On April 18, the Delaware Supreme Court reversed a decision out of the state’s Superior Court and ruled that Delaware “could not exercise general jurisdiction over a foreign corporation for claims having nothing to do with Delaware.”
The Court explained that states require foreign corporations that sell products or services in that state to register to do business and agree to the appointment of a registered agent, but that doesn’t mean jurisdiction can be extended to that state when the claims have nothing to do with that particular state.
“[W]e hold that Delaware’s registration statutes must be read as a requirement that a foreign corporation must appoint a registered agent to accept service of process, but not as a broad consent to personal jurisdiction in any cause of action, however unrelated to the foreign corporation’s activities in Delaware.
“Rather, any use of the service of process provision for registered foreign corporations must involve an exercise of personal jurisdiction consistent with the Due Process Clause of the Fourteenth Amendment,” the decision states.
In the Delaware case, plaintiffs Ralph and Sandra Cepec of Georgia, allege Ralph worked for defendant Genuine Parts Company in Florida from 1988 to 1991. During his time there, he claims he was exposed to asbestos and eventually developed mesothelioma.
While five of the seven named defendants are Delaware corporations, Genuine Parts is a Georgia corporation with a principal place of business in Atlanta.
“The foreign corporation in this case does not have its principal place of business in Delaware; nor is there any other plausible basis on which Delaware is essentially its home," the opinion states. "Hence, Delaware cannot exercise general jurisdiction over it consistent with principles of due process.
“Furthermore, the plaintiffs concede that they cannot establish specific jurisdiction over the nonresident defendant under the long-arm statute or principles of due process."
Napoli said this is a “bad decision for lawyers in Delaware,” because it means cases will go to new jurisdictions.
Napoli had previously stated that he anticipated asbestos filings in Madison County to drop drastically over the coming years as defendants try to transfer cases based on forum non conveniens motions and personal jurisdiction arguments.
However, several asbestos defense attorneys who declined to speak on the record said off the record that they believe Madison County’s asbestos docket isn’t going anywhere anytime soon.
Forum motions to move cases out of Madison County have not fared well so far, but Napoli stated that new personal jurisdiction motions could be the beginning of getting asbestos cases with little to no connection to Madison County - or Illinois - out of the local jurisdiction.
“There will be a seismic shift in how these cases are litigated,” Napoli said of asbestos cases with questions of personal jurisdiction.
“They will be decentralized in multiple jurisdictions with new judges and new rulings.”
Spreading asbestos cases out to new jurisdictions provides new opportunities for asbestos plaintiffs to “divide and conquer,” Napoli said.
Napoli explained that because a defendant may argue that it has no personal jurisdiction to a specific court, cases could be spread out over a wide number of jurisdictions in multiple states. So one plaintiff could have claims against several defendants in several states for the same case. Defendants will then have to either countersue other defendants or find a way to show that other defendants belong in a certain court in order to keep litigation in one courthouse instead of several.
“Usually the defendants want to have coordinated jurisdictions because you go to one judge and you do depositions once and you disclose documents once and you get rulings once.
“With plaintiffs being all over the place, they get 100 bites of the apple. The defendants usually rush to consolidate. In their rush to move the cases, they’ve ended up creating their own worst nightmare.
“Be careful what you wish for."
Napoli said his firm is working on an analysis of specific jurisdictions for the typical asbestos defendants and cases could be spread out over all 50 states, which could present new challenges for firms that are not prepared or equipped to handle such a widespread docket.
He added that the Madison County docket isn’t always as appealing for plaintiffs hoping to get a quick trial slot. But the chance to open new dockets in potentially any courthouse will provide plaintiffs the opportunity to try cases sooner.
“It will be a great relief for plaintiffs because we will be able to open up dockets and trial dockets quicker,” he said.
“Theoretically, we could have our own docket in every courthouse … and that is just going to crush the resources of the defendants,” Napoli continued.
As for firms that focus primarily on filing in Madison County, such as the Simmons Firm, Napoli said those firms will have no choice but to file cases in other jurisdictions or risk having cases transferred. But, he added that most local firms are well-equipped to handle widespread case filings across the country.
The issue of personal jurisdiction has remained a focus in asbestos litigation this year after the Brown v. Lockheed Martin Corp. case was decided by the Second Circuit Court of Appeals on Feb. 18. The case focused specifically on personal jurisdiction in Connecticut.
The Second Circuit held that “the terms of [Connecticut’s] registration and appointment statutes are unclear as to whether they purport to confer on the state’s courts the power to exercise general jurisdiction over duly registered foreign corporations.”
The Lockheed case was an asbestos lawsuit filed by Cindy S. Brown, as personal representative of her father’s estate. She appealed a judgment from the U.S. District Court for the District of Connecticut dismissing the case based on personal jurisdiction.
Brown’s father was allegedly exposed to asbestos during his work as an Air Force airplane mechanic in various locations in the U.S. and Europe. However, he was not specifically exposed to asbestos in Connecticut. Lockheed, an aerospace company, is incorporated and maintains its principal place of business in Maryland.
Brown argued that Lockheed consented to jurisdiction in Connecticut when it registered business in the state and appointed an agent to receive service of process there.
The Second Circuit concluded that Lockheed’s contacts with Connecticut “fall well below the high level needed to place the corporation ‘essentially at home’ in the state. The court also held that Lockheed did not consent to the state courts’ exercise of general jurisdiction over it.