Rensing v. Merck and Company, Inc. ( 2006 )

Rule 23 order filed NO. 5-05-0326
June 8, 2006;
Motion to publish granted IN THE
July 14, 2006.
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
________________________________________________________________________
DORIS RENSING, ) Appeal from the
) Circuit Court of
Plaintiff-Appellee, ) St. Clair County.
)
v. ) No. 04-L-558
)
MERCK AND COMPANY, INC., )
)
Defendant-Appellant, )
)
and )
)
LESLIE WALDRON, ) Honorable
) Michael J. O'Malley,
Defendant. ) Judge, presiding.
________________________________________________________________________
PRESIDING JUSTICE SPOMER delivered the opinion of the court:
The defendant, Merck and Company, Inc., appeals from the order of the circuit court
of St. Clair County that denied the motion of the defendant to transfer this cause to Cook
County. For the reasons set forth below, we reverse and enter an order transferring this cause
to Cook County for further proceedings.
The facts necessary for our disposition of this appeal are as follows. On October 1,
2004, the plaintiff, Doris Rensing, filed a class action complaint in the circuit court of St.
Clair County, on behalf of "all persons within the State of Illinois that have purchased the
drug Vioxx." The crux of the plaintiff's complaint is that the defendant marketed and
promoted Vioxx as safe and effective for persons with hypertension, or persons who had risk
factors for stroke or cardiac problems, despite knowledge of clinical trials associating Vioxx
with hypertension-related adverse health effects. The complaint alleges a cause of action
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under the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et
seq. (West 2004)) and claims that the plaintiff was damaged in the amount expended on the
drug. The cause was removed to federal court on January 31, 2005, but remanded to the
circuit court of St. Clair County on January 31, 2005.
On February 16, 2005, the defendant filed a motion to transfer the cause for improper
venue. See 735 ILCS 5/2-106 (West 2004). In the motion to transfer and supporting
documentation, the defendant established that it is incorporated under the laws of the State of
New Jersey, with its principal place of business in New Jersey. The defendant's registered
office and registered agent in the State of Illinois are in Cook County, Illinois. The defendant
argued that because it did not have any manufacturing plants, facilities, or operations in St.
Clair County and does not make any significant decisions concerning the design,
manufacture, marketing, or promotion of Vioxx in St. Clair County, it does not transact its
usual and customary business within St. Clair County for venue purposes. The defendant
further argued that no significant part of the transaction at issue had occurred in St. Clair
County for venue purposes. The motion was also supported by the affidavit of a manager of
the defendant, which established that the percentage of nationwide sales of Vioxx occurring
in St. Clair County is 0.16%. The percentage of worldwide sales of Vioxx occurring in St.
Clair County is 0.1062%. The motion prayed for a transfer of the cause to Cook County.
In the response to the defendant's motion to transfer, the plaintiff argued that the
defendant's promotion, marketing, and/or selling of Vioxx within St. Clair County was
sufficient to establish venue because the plaintiff was induced into purchasing the Vioxx in
St. Clair County, which is a substantial part of the transaction out of which the cause of
action arose. The response was supported by the affidavit of the plaintiff, which established
that she was prescribed, purchased, and ingested Vioxx in St. Clair County, that she has
never had any direct dealings with the defendant in Cook County, and that she never was
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prescribed, had never purchased, and had never ingested Vioxx in Cook County. Following
a hearing on the motion to transfer venue, the circuit court denied the defendant's motion on
May 19, 2005. We granted the defendant's petition for leave to appeal.
Section 2-101 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-101
(West 2004)) generally governs venue and provides, in relevant part:
"Except as otherwise provided in this Act, every action must be commenced
(1) in the county of residence of any defendant who is joined in good faith and with
probable cause for the purpose of obtaining a judgment against him or her and not
solely for the purpose of fixing venue in that county[] or (2) in the county in which the
transaction or some part thereof occurred out of which the cause of action arose."
Section 2-102 of the Code (735 ILCS 5/2-102 (West 2004)) specifically defines the
residence of corporations and provides, in pertinent part:
"For purpose of venue, the following definitions apply:
(a) Any private corporation *** organized under the laws of this State *** is a
resident of any county in which it has its registered office or other office or is doing
business."
The Illinois Supreme Court recently clarified the standard of review to be employed
when reviewing a motion to transfer for improper venue. Corral v. Mervis Industries, Inc.,
217 Ill. 2d 144, 153-54 (2005). Finding the appellate court's decision in Lake County
Riverboat L.P. v. Illinois Gaming Board, 313 Ill. App. 3d 943 (2000), particularly instructive,
the supreme court noted that proper venue determinations involve separate questions of fact
and law. Corral, 217 Ill. 2d at 153. Questions of fact are reviewed for manifest error, and
questions of law are reviewed de novo. Corral, 217 Ill. 2d at 153. When there is no dispute
concerning the facts relied upon by the court, a de novo standard of review is proper. Corral,
217 Ill. 2d at 153.
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In the plaintiff's motion for leave to cite supplementary authority, which we granted
on February 7, 2006, the plaintiff argues that Corral is also applicable to this case because in
Corral the Illinois Supreme Court held on a record virtually identical to the record in this
case that it could not review a defendant's claim that a trial court erred in denying the
defendant's motion to transfer venue, because there was no way from the record to tell which
facts the trial court had relied upon in making its decision. Corral, 217 Ill. 2d at 157. We do
not believe the holding in Corral mandates a similar disposition in this case. In Corral, the
defendant argued that the reason the circuit court had denied its motion to transfer venue was
that it had found that a residence of a single employee of the defendant in the forum county
constituted an "other office" of the defendant. Corral, 217 Ill. 2d at 155. Because there was
nothing in the record from which the supreme court could review this factual dispute
regarding whether the employee's residence would constitute an "other office," the supreme
court affirmed the circuit court's decision. Corral, 217 Ill. 2d at 157.
Here, unlike Corral, there is no dispute regarding the facts relied upon by the court in
making its determination. There is no dispute that the defendant is not a resident of St. Clair
County and has no offices there. It was not contested in the trial court and is not contested on
appeal that the plaintiff purchased and ingested Vioxx in St. Clair County. There is no
dispute that the registered agent of the defendant is located in Cook County. Because there is
no dispute regarding the facts before the trial court at the time it ruled on the defendant's
motion to transfer venue, this appeal involves a pure question of law, which we review de
novo.
Before examining the transactional prong of the venue statute, we note that the
residence prong of the venue statute is not met in this case. The defendant did not design,
manufacture, or produce its products in St. Clair County. See Boxdorfer v. DaimlerChrysler
Corp., 339 Ill. App. 3d 335, 342 (2003) (citing Gardner v. International Harvester Co., 113
4
Ill. 2d 535 (1986)). In addition, the defendant maintains no offices in St. Clair County. See
Boxdorfer, 339 Ill. App. 3d at 342. As in Boxdorfer, the facts do not support any claim that
the defendant was "doing business" in St. Clair County for purposes of the residency prong
of the venue statute. Boxdorfer, 339 Ill. App. 3d at 342.
Consequently, the plaintiff did not argue in the trial court, and does not argue on
appeal, that the defendant is a resident of St. Clair County as that term is defined for purposes
of the venue statute. Therefore, the sole issue is whether the plaintiff's purchase and
ingestion of Vioxx in St. Clair County, along with the defendant's advertisement and/or
promotion of Vioxx in St. Clair County, are sufficient to establish venue in St. Clair County
under the transactional prong of the venue statute (735 ILCS 5/2-101(2) (West 2004)).
We find Boxdorfer v. DaimlerChrysler Corp., 339 Ill. App. 3d 335 (2003), to be
wholly apposite. In Boxdorfer, the plaintiffs instituted a class action complaint in the circuit
court of Madison County against DaimlerChrysler Corp., alleging common law and
consumer fraud. Boxdorfer, 339 Ill. App. 3d at 337. The complaint alleged that the paint on
vehicles made by the defendant was defective in that it would delaminate and the defendant
had failed to disclose this to the consuming public. The complaint further alleged that the
defendant had failed to disclose that the defect would not exhibit itself until after the
warranty expired and that the defendant had failed to disclose that if the defect did not exhibit
itself until after the warranty expired, the defendant would not repair it. Boxdorfer, 339 Ill.
App. 3d at 337. The defendant was incorporated under the laws of Delaware, with its
principal place of business in Michigan and its registered agent in Sangamon County.
Boxdorfer, 339 Ill. App. 3d at 337. The defendant filed a motion to transfer for improper
venue. Boxdorfer, 339 Ill. App. 3d at 337. The defendant attached an affidavit to its motion
establishing that the defendant did not sell automobiles directly to the citizens of Madison
County, that the defendant had no offices, manufacturing facilities, or operations in Madison
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County, that promotional materials had been developed from its office in Michigan, and that
the defendant conducted no business in Madison County. Boxdorfer, 339 Ill. App. 3d at 338.
The circuit court denied the defendant's motion to transfer, noting that the plaintiffs
had purchased and garaged their vehicles in Madison County and that the plaintiffs had
suffered damage in Madison County. Boxdorfer, 339 Ill. App. 3d at 338. The circuit court
held that these facts were sufficient to meet the requirements of venue because they
constituted some part of the transaction out of which the cause of action arose. Boxdorfer,
339 Ill. App. 3d at 338.
We reversed the order of the circuit court, holding that all the alleged acts of a failure
to disclose defects on the part of the defendant did not take place in Madison County but,
rather, took place in Michigan, where the cars had been designed, manufactured, and sold by
the defendant. Boxdorfer, 339 Ill. App. 3d at 345. We further held that the plaintiffs'
unilateral acts of purchasing vehicles and suffering damages in Madison County did not
constitute some part of the transaction out of which the cause of action arose. Boxdorfer, 339
Ill. App. 3d at 345. Because venue was not proper in Madison County under either prong of
the venue statute, we ordered the cause transferred to Sangamon County, where the defendant
had its registered agent. Boxdorfer, 339 Ill. App. 3d at 345.
As explained in Boxdorfer, when a court examines the transactional prong of the
venue statute, two dependent variables must be analyzed in order to determine whether a
particular venue is proper. Boxdorfer, 339 Ill. App. 3d at 344. These variables are (1) the
nature of the cause of action and (2) the place where the cause of action springs into
existence. Boxdorfer, 339 Ill. App. 3d at 344. In Boxdorfer, as in this case, the cause of
action is based on consumer fraud, in that the complaint alleges that the defendant failed to
disclose a defect in its products to its purchasers. Boxdorfer, 339 Ill. App. 3d at 345. The
Boxdorfer court found that, where, as here, there are no direct dealings between the parties in
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the county where the suit is filed, a cause of action for consumer fraud springs into existence
where the alleged acts concerning the fraud took place. Boxdorfer, 339 Ill. App. 3d at 345.
This is the place where the product is manufactured and/or the place where the decisions
regarding any advertising, promotion, and/or nondisclosure take place. Boxdorfer, 339 Ill.
App. 3d at 345. As explained in Boxdorfer, the plaintiffs' purchase of the product in the
county where the suit is filed does not constitute some part of the transaction. Boxdorfer, 339
Ill. App. 3d at 345.
We see no reason to depart from our decision in Boxdorfer. Because the residence
and transaction prongs of the venue statute are not met in this case, the circuit court erred in
denying the defendant's motion to transfer for improper venue. Accordingly, we reverse the
order of the circuit court. Because there is no dispute that the residence prong of the venue
statute is satisfied in Cook County, where the defendant has a registered agent, we will
exercise the powers granted us under Supreme Court Rule 366(a)(5) (155 Ill. 2d R.
366(a)(5)) to enter an order transferring this cause to Cook County for further proceedings
pursuant to section 2-106 of the Code (735 ILCS 5/2-106 (West 2004)).
Reversed; order entered.
HOPKINS, J., concurs.
JUSTICE CHAPMAN, dissenting:
I disagree with the decision of my colleagues. I believe that the purchase and
ingestion of Vioxx in St. Clair County is sufficient to establish venue under the transactional
prong of the venue statute. The majority relies on Boxdorfer v. DaimlerChrysler Corp., 339
Ill. App. 3d 335, 790 N.E.2d 391 (2003), in holding that the transactional prong is not met. I
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disagree with the holding reached in Boxdorfer. The actual controversy making this case
justiciable did not occur until after the sale of the Vioxx in St. Clair County, thereby
allegedly causing damage to the plaintiff. See Fetzer v. Wood, 211 Ill. App. 3d 70, 77, 569
N.E.2d 1237, 1242 (1991).
I, therefore, respectfully dissent.
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NO. 5-05-0326
IN THE
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
___________________________________________________________________________________
DORIS RENSING, ) Appeal from the
) Circuit Court of
Plaintiff-Appellee, ) St. Clair County.
)
v. ) No. 04-L-558
)
MERCK AND COMPANY, INC., )
)
Defendant-Appellant, )
)
and )
)
LESLIE WALDRON, ) Honorable
) Michael J. O'Malley,
Defendant. ) Judge, presiding.
___________________________________________________________________________________
Rule 23 Order Filed: June 8, 2006
Motion to Publish Granted: July 14, 2006
Opinion Filed: July 14, 2006
___________________________________________________________________________________
Justices: Honorable Stephen L. Spomer, P.J.
Honorable Terrence J. Hopkins, J.,
Concurring
Honorable Melissa A. Chapman, J.,
Dissenting
___________________________________________________________________________________
Attorneys Alan J. Dixon, Dan H. Ball, Stephen G. Strauss, Thomas J. Palazzolo, 211 North
for Broadway, Suite 3600, St. Louis, MO 63102-2750
Appellant
___________________________________________________________________________________
Attorneys John J. Driscoll, 720 Olive Street, Suite 1800, St. Louis, MO 63101; Jeffrey Schultz,
for 1400 W. Main Street, Suite 17, Carbondale, IL 62901
Appellee
___________________________________________________________________________________