Welcome to the Hotel California? Out-of-state plaintiffs should check out and leave, says new decision

Lured by the promise of huge jury verdicts and favorable laws, out-of-state asbestos plaintiffs and their counsel have flocked to California in increasing numbers since at least 2000 to avail themselves of California courts.  To avoid having their cases forcibly returned to their home states on forum non conveniens grounds, plaintiffs have made sure to name defendants in their lawsuits subject to jurisdiction only in California.  Although such defendants are characterized as “nominal” or “sham”  by others in the litigation, cases such as American Cemwood Corp. v. American Home Assurance Co. (2001) 87 Cal.App.4th 431, 433, hold that an action cannot be dismissed for forum non conveniens unless all defendants are subject to jurisdiction in the alternate forum.  Thus, the presence of even one “sham” or “nominal” defendant is sufficient under American Cemwood to defeat a forum non conveniens motion seeking dismissal of the action.  Though Hansen v. Owens Corning Fiberglas Corp. (1996) 51 Cal.App.4th 753 still permits a stay, such a stay can be lifted upon a showing that the California-only defendant is not subject to jurisdiction in the alternate forum.  Thus, the doors of the “Hotel California” have historically been wide open to out of state litigants, with no meaningful way for a defendant to close them no matter how strongly the public and private interest factors favor transfer to another state.

While the Hotel California has not yet closed its doors, it may have finally hired a doorman.  A California appellate court has now ruled that the claims of the California-based “nominal” venue defendant could be severed and the action dismissed on forum non conveniens grounds in favor of the remaining parties. the-hotel-california

David v. Medtronic, Inc. was filed in Los Angeles County Superior Court by 37 plaintiffs, none of whom had any connection to Los Angeles.  Indeed, 36 plaintiffs lived out of state, and the only California-resident plaintiff lived far from Los Angeles County in Sacramento.  Plaintiff sued multiple Medtronic and Wyeth entities, who were sued as manufacturers and sellers of an allegedly defective medical device called Infuse.  Neither Medtronic nor Wyeth are California corporations.

The only connection to Los Angeles County was a local physician, Dr. Gary Michelson, who served as plaintiff’s nominal “venue” defendant.  Over the course of litigation defendants were, in fact, able to prove that Dr. Michelson was nominal, having had no involvement in the manufacture or marketing of the device. Medtronic then brought a “three pronged” motion seeking to (1) sever the claims of each plaintiff from each other; (2) to dismiss the claims of the 36 out-of-state plaintiffs on forum non conveniens grounds; and (3) to transfer venue of the California-resident defendant to his home county of Sacramento.  The trial court granted the motion on all three grounds; plaintiffs appealed the court’s rulings as to the first and second.

On appeal, the David court recognized that “this case squarely presents the issue of whether the existence of a nominal defendant, over whom jurisdiction cannot be established in the proposed alternative forum, can defeat a forum non conveniens motion which should otherwise be granted.”  Although David found that the trial court erred in dismissing plaintiffs’ claims against all defendants, including the resident Los Angeles physician, it held that the dismissal of claims against the non-California defendants was proper.  In doing so, the court noted that there was no dispute that Dr. Michelson was a nominal defendant, and cited various federal cases supporting the transfer of cases despite the claims of a nominal defendant, as for different cases as child abuse the use resources from sites as https://jnlawoffices.com/child-abuse could be the best option as well for this.  While the court stopped short of carving out an exception for nominal defendants, it held that it could properly sever the claim of such a nominal defendant, and dismiss the claims against the remaining non-California defendants on forum non conveniens grounds.  Thus, it affirmed the dismissals of the Medtronic and Wyeth entities.

Though not an asbestos case, David will have wide-ranging impact on asbestos litigation, in which individual cases frequently have dozens of defendants, only a handful of which may subject to jurisdiction in California.  The David decision returns rationality to a forum non conveniens analysis ripe for abuse, and potentially deprives plaintiffs of a “hook” to keep cases otherwise unconnected to the state from being tried here, thereby discouraging forum shopping.  Most importantly, it is a win for California citizens and potential jurors, who will find themselves relieved from hearing cases unconnected to the State and the communities in which they live.

While the Hotel California is still open, perhaps more plaintiffs will be forced to check out.

Are McLean County, Illinois Juries Trending in Favor of Asbestos Defendants?

Despite a string of multimillion-dollar jury verdicts in favor of plaintiffs, asbestos defendants may now have a friendlier forum in McLean County, Illinois.  Recently, after a three-week trial, it took a McLean County jury just one-and-a-half hours of deliberation to reach a verdict for the defendants in a forum that was once placed on the “Judicial Hellholes Watch List” by the American Tort Reform Foundation. The decedent in McGowan v. Illinois Central Railroad (Case No. 08-L-12) was a former rail yard worker. The plaintiff in McGowan alleged the decedent was exposed to and came into contact with asbestos-containing products of Sprinkmann Sons Corporation of Illinois, an insulation contractor, while working at Illinois Central Railroad. In light of the testimony from the decedent’s brother that he could not specifically remember Sprinkmann or any other insulation contractor being at the Illinois Central Railroad yard, perhaps the verdict for the only two remaining defendants in the case should not be a surprise. After all, Judge Rebecca S. Foley had granted a defendant’s motion for a directed verdict at the end of the plaintiff’s presentation of evidence on the product liability claim, with only the plaintiff’s spoliation of evidence claim proceeding to the jury.

What may be more remarkable is that the verdict for the defendants was the third such verdict recently reached for Sprinkmann in asbestos cases in McLean County, according to HarrisMartin Publishing. Defense counsel in the McGowan case – Matushek, Nilles & Sinars LLC – also report three recent verdicts in favor of asbestos defendants in McLean County. The defense verdicts are significant in part because McLean County is not a high volume asbestos litigation forum and, therefore, the verdicts represent a good sample of cases in the county. To date, only eleven asbestos cases have even been filed in McLean County in 2014.

Asbestos plaintiffs in McLean County have generally worked for Union Asbestos and Rubber Company (UNARCO), Sprinkmann, and Illinois Central Railroad in Bloomington, Illinois. UNARCO filed for Chapter 11 bankruptcy in 1982.  However, in recent years, plaintiffs had been focusing on peripheral defendants – defendants that manufactured products containing asbestos but had no direct relationship to the plaintiff through employment or alleged exposure. In order to establish liability in these attenuated circumstances, plaintiffs alleged civil conspiracy against defendants Owens-Illinois, Honeywell International, and Pneumo Abex.  This resulted in multi-million dollar jury verdicts against these defendants, notwithstanding that plaintiffs had no evidence of exposure from the defendants’ products.  For example, in Gillenwawter v. Honeywell International, the jury entered a verdict of a combined $89.6 million against Owens-Illinois, Honeywell, and Pneumo Abex. But, in following the Supreme Court’s ruling in McClure v. Owens Corning Fiberglass Corp., the Illinois Appellate Court Fourth District issued several decisions starting in 2011 that rejected the plaintiffs’ civil conspiracy theory and most likely paved the way for McGowan and the other recent defense verdicts. McClure v. Owens Corning Fiberglass Corp., 188 Ill. 2d 102 (1999); Rodarmel v. Pneumo Abex, L.L.C., 2011 IL App (4th) 100463; Menssen v. Pneumo Abex Corp., 2012 IL App (4th) 100904; Gillenwater v. Honeywell Int’l, Inc., 2013 IL App (4th) 120929, appeal denied by Gillenwater v. Honeywell Int’l, Inc., No. 116739, 2014 Ill. LEXIS 63 (Ill. Jan. 29, 2014); Garrelts v. Honeywell Int’l, Inc., 2013 IL App (4th) 120997-U. In these cases, the Fourth District held that the defendants were entitled to judgment n.o.v. due to the plaintiffs’ failure to present evidence of a conspiratorial agreement and failure to show the defendants had a relationship with plaintiffs sufficient to owe plaintiffs a legal duty to warn of the dangers of asbestos in defendants’ products.

In the McGowan trial, Owens-Illinois, Honeywell, and Pneumo Abex were notably not a part of the case. After reversals in Rodarmel v. Pneumo Abex, L.L.C. and Menssen v. Pneumo Abex Corp., it appears that the trial court judges in McLean County finally received the message and granted the defendants’ motion for judgment n.o.v. of the $89.6 million jury verdict in Gillenwater v. Honeywell International, Inc. The trial court did, however, enter judgment against John Crane, Inc. in the case, as the plaintiff alleged he used Crane gaskets. The Fourth District affirmed the decision, and the Illinois Supreme Court denied the plaintiff’s petition for leave to appeal. The Fourth District also affirmed the McLean County trial court’s grant of summary judgment against the plaintiffs on the same theory in Garrelts v. Honeywell International, Inc. As the McGowan court granted the defendants’ motion for directed verdict, the Fourth District’s decisions may have forced asbestos plaintiffs in McLean County to abandon the civil conspiracy theory against peripheral defendants. Although two January 2014 jury verdicts of a combined $1.7 million were entered against the plaintiffs’ employer, these verdicts were reached on a different theory – the Federal Employers Liability Act.

The current trend is a welcome departure from the previously excessive jury verdicts, with the Fourth District’s repudiation of the civil conspiracy theory being a likely catalyst of this change.  Moreover, if McGowan and the other cases involving Sprinkmann truly are the start of a trend by McLean County juries to rule in favor of asbestos defendants under like circumstances, perhaps more defendants will elect to try their cases.  Even if such defendants are not emboldened to take their case to a jury, the multiple recent rejections by McLean County juries of highly speculative claimed exposures with no direct relationship to the plaintiff would be very helpful “negotiation points” in assisting those defendants in obtaining dismissals prior to trial, or perhaps providing leverage during settlement negotiations. Ultimately, with a less plaintiff-friendly appellate court and more defense-friendly juries, asbestos plaintiffs may now be more hesitant to file cases in McLean County. Whatever the case may be, a new asbestos filing against a defendant in McLean County should no longer cause a defendant the alarm it once did.