Proposed Legislation in Illinois to Expand Jurisdiction Over Out-of-State Corporations Faces Challenges

Minuteman Alert! A Metro-East area state representative has introduced House Amendment No. 2 connected to Senate Bill 26, purporting to subject all out-of-state corporations registered to do business in Illinois to the jurisdiction of Illinois courts, therefore constituting a so-called “consent by registration.”  That is not how it works presently under the concept of “general jurisdiction.”  Based on the case of Daimler v. Bauman, issued by the Supreme Court of the United States in 2014, a corporation must be “at home” in Illinois for general jurisdiction to attach.  There are various factors to consider, but merely doing a fraction of its business in Illinois is usually not enough.  However, following the Supreme Court’s opinion in Mallory v. Norfolk Southern Railway Co., issued in 2023, legislative initiatives like the one sponsored by Jay Hoffman (D) have been anticipated around the country.  While some argue that conducting business in the state at any level should eliminate due process concerns and subject a company to the jurisdiction of the state’s courts, this initiative, if passed, is likely to dampen corporate interest in the Illinois business marketplace. Interestingly, a comparable legislative initiative in New York failed with a veto from Gov. Kathy Hochul (D). Like Illinois, New York is considered a magnet jurisdiction for asbestos litigation, and yet it has ultimately rejected consent by registration, at least for now.