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October 2, 2017Client Alert

Can A College Or University Be Sued In Any State Where It Recruits Students Or Fundraises?

Of course an educational institution can be sued by anyone, anywhere. But wouldn’t one expect that a state court complaint could be dismissed where it is filed against an institution in a state where it has no campuses, no registered agents and where it is not registered to do business?

It might not be so easy. Georgetown University recently found itself in this position and had to take its case to the Illinois appellate court to obtain dismissal of the case. Georgetown’s victory on this issue resulted in a decision that can benefit colleges and universities across the United States.

In Kessler v. Georgetown, a part-time faculty member sued Washington, D.C.-based Georgetown in Illinois state court. Georgetown asked the trial court to dismiss the complaint for lack of personal jurisdiction. 

As it pointed out to the trial court, Georgetown is a private university located in Washington, D.C.  It has no campuses or offices in Illinois; it is not registered to do business or charity in Illinois; and it does not have a registered agent in Illinois. In opposition, the plaintiff presented to the court information from Georgetown’s website showing the University’s recruiting and fundraising efforts in Illinois, including the number of applicants, students and alumni from Illinois, as well as the number of events held in Illinois and the existence of an alumni club in the state. Without issuing a written option, the trial court denied the motion to dismiss.

Georgetown petitioned the appellate court for leave to appeal the decision immediately and the court granted its petition, which presented an issue of first impression for the court. On appeal, the appellate court reversed the trial court’s finding and ordered dismissal of the complaint for lack of personal jurisdiction. 

In the most critical part of the decision for other colleges and universities, the appellate court found Georgetown was not “doing business” for purposes of general jurisdiction in Illinois. Acknowledging the issue involving general jurisdiction pertaining to an out-of-state university was one of first impression in Illinois, the court pointed out that other jurisdictions have had the opportunity to address this issue and consistently declined to exercise jurisdiction, except in exceptional cases where the contacts with the state were not minimal. Based on the facts set forth by Georgetown (e.g., no campus, no office, no agents, no business license in Illinois), the Court “reject[ed] the notion that this is an ‘exceptional case’ where the nonresident university’s contacts with the state of Illinois qualify as the type of systematic and continuous operations rendering Georgetown essentially ‘at home’ in the state of Illinois for purposes of general personal jurisdiction based on general business activities.”

The court also found specific jurisdiction did not exist because no agent of Georgetown had specifically directed a tort at the state of Illinois.

With this decision, Illinois joins courts across the nation that have found out-of-state universities cannot be hauled into a state court where their only contacts with the forum state are their involvement in activities typical of nationally prominent universities – such as recruiting and fundraising in various states.

Daniel A. Kaufman and Sarah E. Flotte served as trial and appellate counsel in this case. The full text of the opinion can be found here. Daniel and Sarah are partners in Michael Best’s Chicago office. They are members of the firm’s Higher Education Group and represent universities across the country.

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