John Crane, Incorporated v. Shein Law Center, Ltd.
Opinion
John Crane, Inc., as a manufacturer of products containing asbestos, has been sued many times for injuries caused by exposure to asbestos. Now it claims some of those suits were part of a conspiracy to defraud the company. It filed lawsuits in the Northern District of Illinois against two law firms and their lawyers who brought some of those injury suits. Because the Northern District lacked personal jurisdiction over the defendants, we affirm the dismissal of the lawsuits.
I. BACKGROUND
John Crane, Inc. ("JCI") is a manufacturing company with its principal place of business in Illinois. The Shein Law Center is a law firm based in Pennsylvania. Benjamin Shein, the partner named in this case, is a resident of Pennsylvania. Simon Greenstone Panatier Bartlett is a law firm based in Texas. The firm has offices in Texas and California, and its partners and shareholders are residents of those states.
Shein and Simon Greenstone 1 sued JCI on behalf of their clients in state courts in Pennsylvania, California, and Texas. JCI alleges these suits were part of a conspiracy to defraud the company. Specifically, JCI alleges the defendants concealed information during discovery regarding their clients' exposure to asbestos from other manufacturers' products so that they could extract larger recoveries from JCI. The other manufacturers are bankrupt; JCI is one of the few remaining asbestos manufacturers that are not. After winning verdicts against JCI, the defendants allegedly filed claims against the bankrupt manufacturers' trusts.
*695
JCI filed lawsuits against Shein and Simon Greenstone in the Northern District of Illinois alleging fraud, conspiracy, and violations of the Racketeer Influenced and Corrupt Organizations Act,
II. ANALYSIS
"Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons."
Walden v. Fiore
,
The parties agree that the district court did not have general personal jurisdiction. To establish specific personal jurisdiction, JCI needed to demonstrate that the defendants' contacts with Illinois related to the challenged conduct.
JCI argues that the defendants established contacts with Illinois when they engaged in fraudulent litigation against JCI, an Illinois-based company. As part of that litigation, JCI stresses, the defendants sent fraudulent litigation materials to JCI. The defendants counter that their activities were directed at the states in which the litigation was carried out-Texas, California, and Pennsylvania. They had contact with Illinois in that JCI is an Illinois resident, but had no other contact with the state.
In
Wallace v. Herron
, this court considered whether a federal court in Indiana could exercise personal jurisdiction over California-based lawyers who, the plaintiff alleged, engaged in malicious prosecution when they filed lawsuits in California against the plaintiffs, Indiana residents.
JCI attempts to distinguish
Wallace
on the basis that the litigation in this case is alleged to be part of a broader scheme. Sending fraudulent materials in furtherance of such a scheme, JCI contends, creates sufficient contacts. In
Felland v. Clifton
, this court found sufficient contacts based on communications sent to the plaintiffs in the forum state.
JCI alternatively argues the district court should have granted its request for additional discovery. JCI alleges the defendants submitted claims to bankrupt manufacturers' trusts as part of their conspiracy to defraud JCI. It sought to conduct discovery into the defendants' contacts with these trusts, at least one of which is based in Illinois. But the location of these trusts was entirely coincidental and had nothing to do with the defendants' decisions to file claims. Even if JCI had discovered that the defendants had submitted claims to a trust in Illinois, it would not be enough to establish personal jurisdiction in a suit brought by JCI.
See
Brook
,
Finally, because we conclude that the district court lacked personal jurisdiction, we need not consider whether the district court also lacked subject matter jurisdiction.
Ruhrgas Ag v. Marathon Oil Co.
,
III. CONCLUSION
Out-of-state litigation against an Illinois resident is not sufficient to establish personal jurisdiction in Illinois over a lawyer involved in the out-of-state litigation. Shein and Simon Greenstone's alleged unlawful conduct at issue in this case was targeted at the litigation conducted in Texas, Pennsylvania, and California. All contacts the defendants had with JCI in Illinois were incidental to the litigation proceeding else-where. It would be unfair to require the defendants to appear in Illinois because of these limited contacts.
Nothing in this opinion is meant to weigh on the merits of JCI's allegations. The claims JCI levies are serious and ought to be examined. The Northern District of Illinois is simply the wrong jurisdiction.
*697 For this reason, we AFFIRM the dismissal of the cases.
For our purposes, there is no reason to differentiate between the lawyers and the firms for which they work. We refer to Benjamin Shein and his firm, the Shein Law Center, as "Shein" and Jeffrey Simon, David Greenstone, and their firm, Simon Greenstone Panatier Bartlett, as "Simon Greenstone" in this opinion.
JCI also sued Shein in the Eastern District of Pennsylvania, Docket No. 17-2210. That litigation has been stayed pending our decision in this case.
Reference
- Full Case Name
- JOHN CRANE, INC., Plaintiff-Appellant/Cross-Appellee, v. SHEIN LAW CENTER, LTD. and Benjamin P. Shein, Defendants-Appellees/Cross-Appellants, v. Simon Greenstone Panatier Bartlett, Jeffrey B. Simon and David C. Greenstone, Defendants-Appellees.
- Cited By
- 47 cases
- Status
- Published