Miner v. Gillette Co.

MR. JUSTICE RYAN, dissenting:

Since the Supreme Court has severely limited the availability of the Federal courts for class action litigation (see Eisen v. Carlisle & Jacquelin (1974), 417 U.S. 156 , 40 L. Ed. 2d 732 , 94 S. Ct. 2140 ; Zahn v. International Paper Co. (1973), 414 U.S. 291 , 38 L. Ed. 2d 511 , 94 S. Ct. 505 ; Snyder v. Harris (1969), 394 U.S. 332 , 22 L. Ed. 2d 319 , 89 S. Ct. 1053 ), those seeking to litigate consumer claims have been urging the use of State courts in which to maintain multistate plaintiffs class suits. (See Note, Toward a Policy-Based Theory of State Court Jurisdiction Over Class Actions, 56 Tex. L. Rev. 1033 (1978); Note, Multistate Plaintiff Class Actions: Jurisdiction and Certification, 92 Harv. L. Rev. 718 (1979); Comment, Civil Procedure: In Personam Jurisdiction Over Nonresident Plaintiffs in Multistate Class Actions, 17 Washburn L.J. 382 (1978); Ross, Multistate Consumer Class Actions in Illinois, 57 Chi.-Kent L. Rev. 397 (1981); Forde, Class Actions in Illinois: Toward A More Attractive Forum For This Essential Remedy, 26 De Paul L. Rev. 211 (1977).) In fact, partly in response to the Supreme Court decisions above referred to, the National Conference of Commissioners on Uniform State Laws prepared and proposed a Uniform Class Actions Act or Rule. (See Vestal, Uniform Class Actions, 63 A.B.A. J. 837 (1977).) I will refer to this uniform proposal later.

I dissent from the opinion of this court because the assertion of jurisdiction over nonresident class members far exceeds the proposal of the uniform act and far exceeds the holding of any case of which I am aware. The opinion seems to be reaching out to sweep into Illinois all nationwide class litigation which cannot be maintained in the Federal courts because of Eisen, Zahn and Snyder, and which no other State will entertain. As I will point out later, Shutts v. Phillips Petroleum Co. (1977), 222 Kan. 527 , 567 P.2d 1292 , relied on by the majority in this opinion to support its decision, is not authority for its holding and, in fact, clearly indicates that this action could not be maintained in Kansas.

The majority opinion omits some essential matters from its statement of facts. In this case, the defendant company, Gillette, is a Delaware corporation, with its headquarters in Massachusetts. The responses to the ad for the lighters were directed to Spott International, a “fulfillment house” in Minnesota. No aspect of the promotion took place in Illinois other than those aspects seeking responses from persons in this State. The 180,000 requests for the accent lighters which could not be filled came from persons in every State of the United States, the District of Columbia, Puerto Rico, and Canada. About 12,000 unfilled requests came from people in Illinois.

My colleagues found that the “minimum contact” requirement for a court to entertain jurisdiction over nonresident defendants is not applicable to nonresident plaintiffs in a class action. The opinion then lifted some language from the Kansas case of Shutts v. Phillips Petroleum Co. referred to above, and found that the only element necessary to the exercise of jurisdiction over nonresident plaintiffs is procedural due process, which would be satisfied by notice to the nonresident plaintiffs and adequate representation of their interests. I submit that more is required.

It is interesting to note that the proposed uniform act retains the “minimum contact” concept for jurisdiction of members of the class whether the action is brought on behalf of a class of plaintiffs or against a class of defendants. Section 6 of the proposed act provides for jurisdiction over a member of a class if “a basis for jurisdiction exists or would exist in a suit against the person under the law of this State.” National Conference of Commissioners on Uniform State Laws, Uniform Class Actions [Act] [Rule] § 6 (1976); Vestal, Uniform Class Actions, 63 A.B.A. J. 837 , 838 (1977); Scher, Opening State Courts to Class Actions: The Uniform Class Actions Act, 32 Bus. Law. 75 (1976).) I realize that the Illinois class action legislation is not patterned after the uniform act. However, the jurisdictional provisions of the uniform act indicate that the “minimum contacts” jurisdictional requirement is not a relic of the past and enjoys substantial present-day support.

Admitting that a departure from the “minimum contacts” requirement is permissible, I, nonetheless, maintain that this State must have a certain nexus with the claims of the absent class members before our courts can extend their jurisdiction beyond the borders of this State. It must be remembered that, by entertaining class actions, Illinois is not simply conferring benefits on the absent class members. It is also binding the absent class members by the judgment rendered in the courts of this State, and it is depriving these absent class members of the right to litigate their claims in the courts of their own States. The mere extending of procedural due process is not by itself sufficient to justify litigating here the rights of those who have no contact with Illinois. In addition to procedural due process, this State must have an interest in the litigation.

In this respect, the majority opinion has misread Shutts v. Phillips Petroleum Co. In that case the defendant had withheld certain royalty payments on natural gas to the owners of royalty interests in a gas-producing area known as the Hugoton-Anadarko rate-making area until a final determination of the rates. When the determination was made, the defendant made the payments that had been withheld, but paid no interest. The class action was brought to collect the interest on the withheld payments. All of the State of Kansas, as well as parts of the States of Oklahoma and Texas, comprised the Hugoton-Anadarko area. Kansas comprised the largest portion of the area. The trial court, in Shutts, determined “that this court having jurisdiction of a large physical portion of the Hugoton-Anadarko area is a convenient forum for such action.” Shutts v. Phillips Petroleum Co. (1977), 222 Kan. 527, 539 , 567 P.2d 1292, 1303 .

In addition to noting the interest of the State of Kansas in the payment of royalties on natural gas extracted from that area, the Shutts court also likened the case to one involving a common fund. Had the defendant placed the withheld payments in a trust fund separate from its operating funds, the court stated that the case would “dovetail nicely into the ‘common fund’ cases.” (Shutts v. Phillips Petroleum Co. (1977), 222 Kan. 527, 552 , 567 P.2d 1292, 1311 .) The court held that the fact the defendant had commingled the funds with its own would not take the case out of the “common fund” category. The court stated that a class action may be binding on nonresident plaintiffs when a “common fund” is involved and where due process requirements are met. (Shutts v. Phillips Petroleum Co. (1977), 222 Kan. 527, 552 , 567 P.2d 1292, 1311 .) Kansas clearly had an interest in the litigation, and the Shutts case does not hold that extending due process requirements alone confers jurisdiction on the State courts over nonresident plaintiffs. In Shutts, the court also discussed Feldman v. Bates Manufacturing Co. (1976), 143 N.J. Super. 84, 94 , 362 A.2d 1177, 1182 , which held that without “affiliating circumstances” between the forum State and the litigation, the judgment in a plaintiff’s class action suit could not bind nonresident class members. In Shutts, the court stated that Feldman was an excellent example of a factual situation in which a judge should deny certification of a class action where nonresident class members are involved. The facts in Feldman are strikingly similar to those in our case. The nonresident plaintiffs had no contacts in New Jersey, and that State had no interest in the litigation.

Illinois clearly has an interest in providing a forum wherein its citizens may seek redress for a wrong. Thus, a class action on behalf of resident members of the class is justified. Also, if the defendant had its corporate headquarters in Illinois, or if the solicitation had directed that money be sent to an entity in this State in response to the ad, Illinois would have had some interest in seeing that any wrong arising out of such a solicitation was rectified. But I fail to see any justification for attempting to litigate a claim in Illinois that someone residing in Puerto Rico, Canada, the District of Columbia, or any of the othér 49 States has against a Delaware corporation with its headquarters in Massachusetts, when the money solicited was sent to a Minnesota entity. “[T]he crystallized issue simply is whether it is fair, as a policy matter, to permit the forum to resolve the dispute vis-a-vis the nonresidents.” (Note, Toward A Policy-Based Theory of State Court Jurisdiction Over Class Actions, 56 Tex. L. Rev. 1033 , 1048 (1978).) Mr. Justice Brennan emphasized the policy-based nature of the inquiry, stating the “cases fairly establish that the State’s valid substantive interests are important considerations in assessing whether it constitutionally may claim jurisdiction under a given cause of action.” (Shaffer v. Heitner (1977), 433 U.S. 186, 222-23 , 53 L. Ed. 2d 683, 709 , 97 S. Ct. 2569, 2589 (Brennan, J., concurring in part and dissenting in part).) Although a State has an interest in protecting the rights of its citizens, it has no duty to protect, or interest in protecting, the rights of citizens of other States. It has been asserted that jurisdiction in class actions will not be upheld where the nonresident has no contact whatever with the particular State. (Note, Multistate Plaintiff Class Actions: Jurisdiction and Certification, 92 Harv. L. Rev. 718 , 731 (1979).) Absent a nonresident plaintiff’s contact with the forum State, or that State’s interest in the litigation, it is doubtful if the judgment in the class action would be binding on nonresident plaintiffs or that it would be given full faith and credit or would be res judicata in another action against the same defendant by the absentee plaintiffs. This is particularly true where the forum State, in its eagerness to entertain the class action, undertakes to apply and construe the law of the State of residence of nonresident plaintiffs. Such conduct has the potential for undermining the ability and the right of other States to regulate transactions within their borders. Multistate Plaintiff Class Actions: Jurisdiction and Certification, 92 Harv. L. Rev. 718 , 731-33 (1979).

We must consider with the above reasoning the correlative question: Why should the court system of this State assume the burden of adjudicating and administering a class action of this complexity when Illinois has no connection with the litigation beyond that of protecting its residents? Class actions of this magnitude are time consuming and difficult to manage. They constitute unusual burdens on an already burdened court system. (Tornquist, Road Map to Illinois Class Actions, 5 Loy. Chi. L.J. 45, 47 (1974); Comment, Consumer Class Actions With A Multistate Class: A Problem Of Jurisdiction, 25 Hastings L.J. 1411 , 1448 (1974).) Even in Shutts the court expressed concern about overburdening the Kansas court system by entertaining class actions in which that State did not have an interest. Shutts v. Phillips Petroleum Co. (1977), 222 Kan. 527, 557 , 567 P.2d 1292, 1314 .

I also wish to point out that the court in Shutts stated: “When liability is to be determined according to varying and inconsistent state laws, the common question of law or fact prerequisite [in our statute] will not be fulfilled.” (Shutts v. Phillips Petroleum Co. (1977), 222 Kan. 527, 557 , 567 P.2d 1292, 1314 .)

This language forms the basis for another disagreement I have with the majority opinion. In some States a mass promotional scheme, as is involved in our case, is viewed as an offer. (See Oliver v. Henley (Tex. Civ. App. 1929), 21 S. W.2d 576 .) Whereas, in other States such an advertisement is viewed only as an invitation to make an offer. (See People v. Gimbel Bros., Inc. (1952), 202 Misc. 229 , 115 N.Y.S.2d 857 .) Under the holding of Shutts, in the language quoted above this difference would destroy the commonality necessary to the maintenance of a class action under the contract theory under count II of the complaint in our case, whether or not the courts of this State can take judicial notice of and apply the law of other States. (See Ross, Multistate Consumer Class Actions In Illinois, 57 Chi.-Kent L. Rev. 397 , 418-22 (1981).) The holding of Shutts, the case relied on in the majority opinion, makes a class action on behalf of the nonresident plaintiffs inappropriate in this case.

Count I of the complaint is based on the Illinois Consumer Fraud and Deceptive Rusiness Practices Act (Ill. Rev. Stat. 1979, ch. 121/2, par. 261 et seq.). I just cannot understand how, under the facts of this case, a resident of Puerto Rico, Canada, the District of Columbia, or any of the other 49 States can possibly have a right to recover under the Illinois statute. The majority opinion speaks of grouping the laws of the various States into a “manageable number of subclasses.” (87 Ill. 2d at 18.) It is not clear whether or not the majority, in making this statement, is referring to consumer fraud laws of other States. However, the plaintiff argues in its brief for the application of the consumer fraud laws of the other jurisdictions. Count I of the complaint, however, appears to be based on the Illinois statute and not those of other States. Even if it were proper, under the pleadings of this case, to attempt to apply the consumer fraud statutes of other jurisdictions, it must be acknowledged that these statutes differ substantially and the plaintiffs’ rights under such statutes will not be the same. For example, some consumer fraud statutes do not permit a private cause of action or permit one only under certain circumstances. (See Hoover v. May Department Stores Co. (1979), 77 Ill. 2d 93 .) Under the holding of Shutts, this would destroy the common interest necessary for the maintenance of a class action. It appears to me that, in a case where Illinois has no interest, we are reaching out and dragging into this State nonresident litigation from 49 other States, Puerto Rico, the District of Columbia, and Canada, and are usurping the authority of the courts of those other jurisdictions to provide a forum for the protection of the rights of their citizens.

I not only view the majority opinion as usurping the authority of other jurisdictions, but I also see it as imposing a needless burden upon our judicial system accompanied by the imposition of needless expenses upon the taxpayers of this State. The opinion speaks of grouping the classes into a “manageable number of subclasses.” (87 Ill. 2d at 18.) Of course, any litigation is manageable if sufficient resources are devoted to it. At a time when the judicial system of this State, and especially that of Cook County, is striving to eliminate unacceptable delay in the disposition of cases, we should not needlessly add this additional burden and the burden of other multistate class actions that will surely follow as a result of this opinion.

One of the requirements of our class action statute is that the trial court find that “[t]he class action is' an appropriate method for the fair and efficient adjudication of the controversy.” (Emphasis added.) (Ill. Rev. Stat. 1979, ch. 110, par. 57.2(a)(4).) Upon remand I suggest that the trial court seriously consider the fairness of depriving other jurisdictions of the right to protect their own citizens under the circumstances of this case and likewise consider whether it is an efficient utilization of the resources of this State to litigate claims in which Illinois has no interest. In determining whether the action is manageable, the court should consider not whether it is manageable by the use of unlimited resources, but whether it is reasonably manageable under the circumstances of this particular case.

MR. JUSTICE UNDERWOOD joins in this dissent.