Rhode Island Asbestos Litigation and Waiver or Forfeiture of a Personal Jurisdiction Defense

| Oct 24, 2016 | Firm News

In a pair of recent decisions in two different cases, Presiding Justice Gibney of the Rhode Island Supreme Court has granted and denied motions to dismiss for lack of personal jurisdiction by the same asbestos defendant based on whether the defendant had forfeited its personal jurisdiction defense. Murray v. 3M Co., C.A. No. PC-16-0151, slip decision (R.I.Super. Oct. 13, 2016) (“Murray“) (granting motion); Bazor v. Abex Corp., C.A. No. PC-10-3965, 2016 WL 25944665 (R.I.Super. May 2, 2016) (“Bazor“) (denying motion).

In the Rhode Island asbestos litigation there has been an explosion of personal jurisdiction motions following the United States Supreme Court’s decisions that significantly reduce the scope of general personal jurisdiction. Daimler AG v. Bauman, 134 S.Ct. 746 (2014) (“Daimler“); Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846 (2011) (“Goodyear“). There are two different kinds of personal jurisdiction: specific, which addresses the court’s jurisdiction when the defendant’s wrongful or conduct or the plaintiff’s injury or harm occurred in the forum jurisdiction, and general, when the wrongful conduct or the harm did not occur in the forum. In Daimler and Goodyear, Justice Ginsburg wrote that there can be general personal jurisdiction only where the corporate defendant is “at home,” i.e., its place of incorporation or principal place of business or a place where it does a substantial amount of its business. In Daimler, the Court rejected California as an appropriate forum for general personal jurisdiction even though the corporate defendant did 2.4 percent of its worldwide business in that state. These decisions resonate in the Rhode Island asbestos litigation because a high percentage of the cases do not involve wrongful conduct or damages in the forum.

However, in Bazor, plaintiff argued that the defendant, Dana Companies (“Dana”) had waived its personal jurisdiction defense by waiting too long to assert it. Plaintiffs had filed their complaint in 2010 and Dana was one of the original defendants. It asserted lack of personal jurisdiction as an affirmative defense in its answer. Dana subsequently participated in plaintiff’s deposition, and re-deposition, presented a Rule 30(b)(6) witness for deposition, filed expert witness designations, presented one expert for deposition, produced additional expert witness reports, responded to plaintiffs’ written discovery, filed motions in limine, and participated in status and settlement conferences. Almost three years after filing its answer, Dana filed its motion to dismiss for lack of personal jurisdiction.

Justice Gibney distinguished between the “waiver” of a personal jurisdiction defense and the “forfeiture” of it. She said a waiver occurs when the defendant fails to preserve the defense in its answer. A forfeiture occurs when the defendant asserts the defense but relinquishes it based on its subsequent conduct. Justice Gibney noted that although Dana had asserted a lack of personal jurisdiction in its answer, it had participated in much litigation before filing its motion. Justice Gibney rejected Dana’s argument that it did not know until the Daimler decision that it had a viable personal jurisdiction motion. She noted prior personal jurisdiction decisions upon which Dana could have based its motion. More importantly, “Dana actively engaged in the litigation process and accessed judicial resources during the process. Such conduct evinces intent to the Court that Dana was forfeiting its defense of lack of personal jurisdiction.” Justice Gibney denied Dana’s motion in Bazor.

However, Murray was a different matter. In that case, plaintiffs filed suit in 2016 and plaintiff’s deposition began in Tennessee less than thirty days later. Dana filed its motion after four days of the deposition. It appeared at eleven more days of the deposition before requesting a hearing on its motion. Plaintiffs argued that Dana had forfeited its defense by participating in plaintiff’s deposition.

Justice Gibney initially found there was no specific personal jurisdiction over Dana because plaintiff’s claims arose from alleged conduct and consequences occurring outside Rhode Island. She also found there was no general personal jurisdiction, based on Daimler, because Dana was incorporated in Virginia and had its principal place of business in Ohio. It owned no property in Rhode Island, nor did it have any offices or employees in Rhode Island, nor did it do business in Rhode Island. Justice Gibney rejected the argument that Dana could be subject to jurisdiction based on its predecessor’s business contacts because that business was less than one tenth of one percent of the predecessor’s total annual sales.

With respect to whether Dana had forfeited its personal jurisdiction defense, Justice Gibney said courts look both to whether there was a delay in asserting the defense and the defendant’s conduct prior to doing so. She held that the passage of time alone is generally not sufficient to indicate forfeiture of the defense. With respect the defendant’s conduct, the issue is the extent to which the defendant litigated the merits of the case before pressing its defense. She said that in Murray, in contrast to Bazor, Dana had participated in minimal discovery and had timely filed and pressed its motion to dismiss. She granted the motion in Murray.

Arguing personal jurisdiction in Rhode Island asbestos litigation can be complicated because the plaintiffs’ complaints are often very vague as to where the allegedly harmful conduct and consequences occurred. Many times, it is not until the plaintiff responds to written discovery, or sometimes until plaintiff’s deposition, that it is apparent the claims have no meaningful connection to Rhode Island. While it is still unclear from these decisions how much litigation on the merits constitutes a forfeiture, it is clear that if an asbestos defendant in Rhode Island files a motion to dismiss as soon as the merits of the personal jurisdiction defense are clear, and, presumably, presses the motion, the defense will not be deemed forfeited.

Bazor v. Abex Corp., C.A. No. PC-10-3965, 2016 WL 25944665 (R.I.Super. May 2, 2016)

Murray v. 3M Co., C.A. No. PC-16-0151, slip decision (R.I.Super. Oct. 13, 2016)

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