Rhode Island Superior Court Finds Limited Discovery Insufficient to Waive Personal Jurisdiction, Reaffirms Importance of Minimum Contacts

Since tgavel scale 01he U.S. Supreme Court’s decision  in Daimler AG v. Bauman (2014) 134 S.Ct. 746, personal jurisdiction has quickly become a critical issue for asbestos defendants nationally. Perhaps because asbestos cases involve dozens of parties from multiple states, and are often commenced in jurisdictions far from where the exposures occurred, personal jurisdiction has quickly become a “first line” defense.  When and how this defense may be employed, however, is evolving, with Rhode Island being one of the most recent jurisdictions to address these issues in Harold Wayne Murray and Janice M. Murray v. 3M Company, et al., C.A. No. PC-16-0151 (R.I. Super October 13, 2016, Alice B. Gibney, J.).

In the wake of  Bazor v. Abex Corporation et al., C.A. No. PC-10-3965 (R.I. Super. May 2, 2016),  the Superior Court of Rhode Island answered the “when and how” questions by issuing an instructive ruling on what a defendant must do to preserve its right to contest jurisdiction.  The court held that a defense counsel’s “active conduct constitute[d] forfeiture of the defense of lack of personal jurisdiction.”  Although the defendant in Bazor forfeited its jurisdictional defense, the court nonetheless analyzed its underlying personal jurisdiction argument, holding that the moving defendant did not have sufficient minimum contacts to exercise specific or general jurisdiction over the defendant or its predecessor.  The court’s analysis therefore addressed two issues: 1) What must a defendant do to preserve a personal jurisdiction defense; and 2) What are the sufficient minimum contacts Rhode Island must have in order do exercise jurisdiction?

First, in regard to preservation of a personal jurisdiction defense, the court clarified its ruling in Bazor.  In Murray, the plaintiff served his complaint on defendant on January 29, 2016.  Defendant acted promptly and filed a motion to dismiss on February 29, 2016.  Though defendant’s counsel participated in four days of depositions prior to filing its motion, the court nonetheless found that defendant’s counsel’s participation in an exigent deposition was insufficient to constitute “forfeiture” of a motion to dismiss based on lack of personal jurisdiction.

Looking to federal jurisprudence for guidance, the court noted that it must examine (1) “any delay in the defendant’s assertion [of the 12(b)(6) defense] and the nature of said delay,” as well as (2) “the nature and extent of a defendant’s conduct prior to raising the motion to dismiss.”  The court further held that the first factor could be met by as little as four months’ delay; but reasoned that the second factor weighed more heavily than the mere passage of time.  The court held that the analysis under the second factor “requires proof that defendant’s conduct was inconsistent with defendant’s assertion that the court lacked personal jurisdiction over them.”  (internal citation and quotation omitted).  The level of participation, therefore, appears to be the deciding factor in cases like Bazor and Murray.  Notably, the court found that “Defendant’s participation in discovery was limited and reasonable,” and defendant’s post-filing participation in an additional eleven (11) deposition days did not amount to forfeiture of the lack of personal jurisdiction defense.  Notwithstanding the above, the court did not establish a “bright line” rule to precisely outline the necessary amount of participation required to forfeit a jurisdictional defense.  At most, the court established “[d]elays as short as four (4) months can constitute forfeiture,” however, one-month delays with limited participation in discovery will not.

Although Murray provides more guidance than Bazor, it is not entirely clear where this decision leaves litigants who want to participate in early discovery.  While the Murray decision assuages some fears that participating in any discovery will result in inadvertent forfeiture of a jurisdictional defense, there remains uncertainty of where on the timetable the line crosses from limited and reasonable discovery to potential forfeiture.  Ultimately, the lesson of Murray may be that the defense counsel should file its motion to dismiss timely; i.e. within one-month after being served.  Thereafter, it appears that defense counsel should limit its participation in discovery and timely pursue adjudication of the motion to dismiss.

The court also ruled on the underlying personal jurisdiction argument.  In doing so, the court addressed whether the defendant had sufficient minimum contacts with the forum enabling it to properly exercise specific or general jurisdiction. See Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014). When faced with the decision as to whether to assert specific jurisdiction over a party, the Rhode Island Supreme Court has employed a two part test:  1) does the cause of action arise out of the defendant’s contacts with Rhode Island; and if so, 2) whether any relationship among the defendant, forum, and the litigation exists.”

In employing this test in Murray, the superior court concluded it did not have a basis to assert specific jurisdiction over the defendant because “the cause of action does not arise out of Defendants’ contacts with Rhode Island.”  Moreover, plaintiff did not reside in Rhode Island and the cause of action was not based on an occurrence in Rhode Island.  Finally, there was no connection between the moving defendant’s Rhode Island based clients and the current cause of action.  Therefore, the court found that it could not assert specific jurisdiction over the defendant.

The court likewise determined that general jurisdiction did not exist.  In making this finding, the court noted that defendant was incorporated in Virginia, with is principal place of business in Ohio; its officers and executive employees were always located solely in Ohio; it has no offices or employees in Rhode Island; and it did not own or lease any property, sell products, nor has it ever registered to conduct business in Rhode Island.  Although the court found that defendant earned approximately one-tenth percent of its total annual net sales from Rhode Island, the totality of the evidence “cannot suggest that [defendant was] virtually at home in the forum state for the purposes of general jurisdiction.”  (internal citation and quotation omitted).

Ultimately, the Murray court’s holding is welcome news for defendants needing to engage in limited discovery to evaluate a motion to dismiss on personal jurisdiction grounds.  In addition, the court made clear that “minimum contacts” means what it says, and a defendant with de minimis sales in the state should not be deemed “at home” there.

 

How Much is too Much? Counsel’s Active Conduct in Asbestos Suit Results in Forfeiture of Jurisdictional Defense

Since the jurisdictionU.S. Supreme Court handed down Daimler AG v. Bauman 134 S.Ct. 746 (2014), personal jurisdiction defenses have experienced a renaissance in asbestos litigation.  Defendants that wish to win such arguments, however, are well advised to heed a recent ruling by Judge Gibney, who presides over Rhode Island’s state court asbestos docket.  In Bazor v. Abex Corporation et al., C.A. No. PC-10-3965 (R.I. Super. May 2, 2016), Judge Gibney issued a ruling that is instructive on what a defendant must do to preserve its right to contest jurisdiction, holding that a defense counsel’s “active conduct constitute[d] forfeiture of the defense of lack of personal jurisdiction.”  The court referred to “forfeiture” as opposed to “waiver” because the defendant had properly asserted the lack of personal jurisdiction as a special defense.

In this instance, the “active participation” included the following conduct during the two years and nine months between the filing of an answer and the motion to dismiss: filing an objection to the trial date, attending a plaintiff’s deposition, requesting and participating in the reopening of that deposition, participating in the deposition of the plaintiffs’ expert, objecting to the expert’s deposition on non-jurisdictional grounds, disclosing eight  expert witnesses, filing 15 motions in limine, supplementing its expert witness disclosure, producing two expert witnesses for depositions, responding to discovery (without preserving the defense of lack of personal jurisdiction), supplementing its expert discovery, moving to compel the production of the plaintiffs’ bankruptcy trust documents, and participating in at least ten status/settlement conferences.  In short, defense counsel’s very active participation in the litigation was so active so as to constitute “forfeiture” of a claim of lack of personal jurisdiction.

Looking to federal jurisprudence for guidance, the court focused on defense counsel’s litany of activity over several years.  Synthesizing federal decisions, the court identified two  principal elements to weigh to determine whether a defense of personal jurisdiction is forfeited: (a) the delay in asserting the defense; and (b) the “nature and extent” of the defendant’s involvement in the case.  The court noted that the first factor could be met by as little as four months’ delay; but reasoned that the second factor weighed more heavily than the mere passage of time.  With regard to the second factor, the court cited defendant’s filing of an appearance, participation in discovery, attending and taking depositions, and filing and opposing motions as evidence of active participation.  Notably, the court found that the defendant had created “substantial delay” without “a sufficiently meritorious reason” for failing to assert its defense for two years and nine months after the filing of its answer.  The level of participation appears to have been the deciding factor; with special attention brought to “the fifteen motions in limine [defendant] filed which sought merits-based rulings” and the failure to continually assert the defense throughout the course of litigation.  However, of concern is that the ruling did nothing to establish a “bright line” rule of precisely how much participation is “too much” so as to result in a forfeiture of a jurisdictional defense.

It is unclear where this decision leaves litigants who need to participate in early discovery and who also want to preserve their jurisdictional defenses.  Defendants who wish to maintain their defenses are faced with choosing from various interpretations of the Bazor decision, focusing on the assertion of their rights and carefully monitoring the level of their participation.  The decision could reasonably be read to indicate that a party may participate in discovery, but only if they continue to maintain and pursue their jurisdictional defense.  Alternatively, some parties may refuse to participate in non-jurisdictional discovery for fear of inadvertent forfeiture. This may create friction with plaintiff’s counsel when their clients are in poor health, which frequently occurs in asbestos cases across the country.  Ultimately, the lesson of Bazor may be that safest resolution for defense counsel will be to file and pursue dispositive jurisdictional motions as early in the case as possible.  At the very least, defense counsel should raise the defense in pleadings and discovery which precede the filing of the motion to dismiss on jurisdictional grounds and/or reach some sort of agreement with opposing counsel to prevent forfeiture despite some level of active participation in the case. For example, defense counsel in the asbestos litigation should obtain a stipulation that attendance at an exigent deposition does not constitute a waiver of personal jurisdiction arguments; and that stipulation should be placed on the record.

Connecticut Rejects Asbestos Plaintiff’s Effort to Assert Environmental Exposure Claim

11-23A Connecticut state court jury recently returned a defense verdict in case alleging injury from exposure to asbestos that drifted into the air from a facility, but in doing so thrust to the forefront the potential of future similar claims in Connecticut. In Lagerberg v. Armstrong International, Inc., plaintiffs’ decedent was a former factory worker at Rogers Corporation in Killingly, Connecticut between 1958 and 1978. Rogers conceded that the decedent was exposed to raw asbestos and asbestos-containing materials during his employment at the facility. In an effort to avoid the exclusivity of the Connecticut Workers’ Compensation Act, plaintiffs also alleged that decedent’s condition was then exacerbated by exposure to airborne asbestos particles that drifted away from the plant to his neighborhood, which at times was as close as 830 feet from the Rogers facility and at other times as far away as several miles.

In pitching this theory to the jury, plaintiffs highlighted at length that even when decedent had clocked out for the day, he was still being exposed to asbestos when he went home, when he was around town at the grocery store, the post office, Little League, running errands and visiting friends and family. Plaintiffs’ counsel made every effort to paint a picture of constant and cumulative exposure that was a substantial contributing cause of the decedent’s mesothelioma.

Defendant conceded causation due to the occupational exposures. Was this a risky approach? Not really, because to argue otherwise would have resulted in a loss of credibility with the jury. The defense argued that in the face of that massive work place exposure, these “environmental” claims were specious.

Under Connecticut law, negligence contributes materially to the production of an injury if its causative effects remain in active operation until the moment of injury, or at least until the setting in motion of the final active injurious force which immediately produces or precedes the injury. By this definition, negligence which makes only a remote, a trivial or an inconsequential contribution to the production of an injury is not a substantial factor in bringing about the injury, and thus cannot be proximate cause of the injury. See Doe v. Manheimer, 212 Conn. 748, 757-58 (1989) quoting Kowal v. Hohfer, 181 Conn. 355, 359-60 (1980). Therefore, the court instructed the jury that it had to find that the environmental exposure in and of itself was sufficient to cause the decedent’s mesothelioma and thereafter to apply a substantial factor analysis. Ultimately, the jury found that the inhaling of asbestos particles by the Plaintiffs’ decedent away from the Rogers’ facility was not the proximate cause (substantial factor) of decedent’s malignant mesothelioma. While the jury has reached a verdict in this case, the story isn’t yet over. Recently, counsel for the Lagerberg family filed a motion seeking a new trial on the grounds of discovery of new evidence. Whether this new evidence will entitle Plaintiffs to a new trial has yet to be determined.

Putting aside the issue of a potential new trial in Lagerberg, certain questions must be asked about the underlying verdict and its ramifications moving forward. Would a purely environmental exposure claim receive the same treatment from a Connecticut jury? In other words, would a plaintiff claiming asbestos-related disease, with no occupational exposure but solely based upon living within close proximity to a manufacturing facility that used raw asbestos, be able to establish substantial factor causation? The answers to those questions will likely be answered soon, as the law firm that represented the plaintiffs in Lagerberg filed that precise claim against Rogers Corporation and others within a month of the Lagerberg verdict.

Whodunit? Plaintiffs set up showdown between tobacco and asbestos defendants

On June 10, 2015, two well-known “asbestos” plaintiff firms, The Shepard Law Firm and Levy Konigsberg, LLP, together filed a complaint in the Superior Court of the Commonwealth of Massachusetts on behalf of plaintiffs Louis and Joanna Summerlin. Mr. Summerlin’s claimed injury is lung cancer, while Mrs. Summerlin’s claim is for loss of consortium. However, this is not a run-of-the-mill asbestos lawsuit. Rather, the plaintiffs have named more typical asbestos and big tobacco defendants Philip Morris USA and RJ Reynolds Tobacco Company in a clear effort to potentially pit asbestos against tobacco in a “whodunit” battle over what caused Mr. Summerlin’s cancer. Time will tell if this tactic will be successful.

cigaretteAsbestos cases generally fall into three categories: 1) mesothelioma claims; 2) non-malignant asbestosis claims/pleural disease; and 3) lung cancer claims. While categories (1) and (2) involve injuries commonly associated with asbestos exposure, lung cancers claims are not generally associated with asbestos, especially when the person with lung cancer smoked cigarettes for decades. That is, lung cancer claims are generally attributed to smoking and, absent very specific underlying diagnoses and smoking histories, are heavily contested by defendants in the asbestos litigation.

The normal defense in a case like this is the obvious one: the plaintiff’s lung cancer was caused by smoking cigarettes. Here, Mr. Summerlin was a two pack per day smoker of six decades (1950’s – 2009). Given the lengthy, heavy, and recent smoking history of Mr. Summerlin, the expected and obvious defense of the defendants sued for asbestos exposure would be that Mr. Summerlin’s lung cancer was caused by smoking cigarettes. While it is unclear from his complaint as to whether Mr. Summerlin alleges any markers of asbestos exposure, the assertion that Mr. Summerlin’s lung cancer was caused by smoking cigarettes would likely be accepted by any medical professional, thereby calling into question plaintiff’s claim that asbestos exposure is a contributing cause of Mr. Summerlin’s cancer. This is especially true given Mr. Summerlin’s work as an automotive mechanic, which the defense has successfully argued on many occasions that the epidemiological evidence does not support a conclusion that an individual in the trade is at any increased risk of developing an asbestos-related disease.

This is where the plaintiffs’ firms in Mr. Summerlin’s case appear to have taken a unique approach in New England in the pursuit of a lung cancer claim: they have sued both asbestos and tobacco defendants and alleged that exposure to both carcinogens acted as “concurrent” causes of Mr. Summerlin’s lung cancer. Specifically, the plaintiffs allege that “[c]igarette smoking and asbestos exposure act ‘synergistically’ and in combination to cause lung cancer in persons, such as Mr. Summerlin, who regularly smoked cigarettes and were regularly exposed to asbestos.” For years, plaintiffs in the asbestos litigation have made this claim in the face of the smoking defense. Here, they make the claim with big tobacco in the room. Regardless of the outcome, it is guaranteed that counsel on both sides will closely monitor the success – or failure – of this strategy.