Illinois Appellate Court Adopts Fiduciary Shield Doctrine in Defamation Case

In Femal v Square D Company, the Illinois Appellate Court applied the fiduciary shield doctrine to determine whether the trial court had personal jurisdiction over the defendant.  In Femal, the attorney for Rockwell International, a Wisconsin corporation, traveled to Illinois to explore the possibility of a settlement between Rockwell and another corporation in a patent infringement case.  In the course of that meeting, the attorney purportedly made statements accusing Femal, an employee of the other corporation, with certain ethical violations which Femal claimed led to his termination.  Femal sued the attorney for defamation.  The attorney claimed that the court lacked personal jurisdiction since he did not reside or do business in Illinois and only traveled to Illinois for the settlement conference on behalf of his Wisconsin employer.  The court, citing the Illinois Supreme Court’s decision in Rollins v. Ellwood, a kidnapping case, found that the fiduciary shield doctrine prevents courts from asserting jurisdiction over a person on the basis of acts by that person not on his own behalf, but on behalf of his employer.  The court found that it would be unfair and unreasonable under Illinois’ due process clause to assert jurisdiction over an individual whose sole contacts with the state were a consequence of his acting on behalf of his employer.  Ultimately, the court found that there were questions of fact as to whether the defendant acted out of personal interests or solely in the interests of his employer and ordered an evidentiary hearing on the issue.  Femal provides an important defense for individual defamation defendants whose statements were made in the course of their employment.  There is contrary Illinois authority which could support arguments that jurisdiction existed since the defendant’s tortious conduct occurred in Illinois and the plaintiff’s injury occurred in Illinois.  Also, there is authority from the Illinois Supreme Court’s decision in Van Horne v. Muller, that whoever participates in the publication of a defamatory statement is liable for defamation.  However, Femal provides an important defense to out of state defendants who can show that their statements were made in the course of their employment duties.

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