Carter Page, an advisor to former President Donald Trump’s 2016 election campaign, cannot use Chicago’s federal courts to sue the Democratic National Committee and the law firm of Perkins Coie for allegedly smearing his name by spreading lies about his meetings with Russian officials, allegedly on behalf of the Trump campaign, a federal appeals panel has ruled.
In the decision, the federal appeals judges determined federal courts can’t exercise jurisdiction over Perkins Coie because some of the firm’s partners, who are American citizens, reside in China or other foreign countries.
Page, who served on the Trump campaign’s foreign policy team, filed suit in Chicago federal court in early 2020 against the DNC and Perkins Coie.
Seventh Circuit Judge Michael Scudder
The law firm had represented the 2016 campaign of former Secretary of State Hillary Clinton, who Trump defeated in the Electoral College in a razor thin election to secure the presidency, an office he held until he was defeated by current President Joe Biden in 2020.
The lawsuit accused Perkins Coie and the DNC of working together to use “the power of the international intelligence apparatus and the media industry” to spread “false information” and “misrepresentations” about Page, in an effort to defeat Trump.
The complaint centered on the decision to hire opposition research firm Fusion GPS to dig up dirt on Trump and those associated with him, including his campaign officials.
Ultimately, the complaint asserted, Perkins Coie helped arrange meetings between Fusion GPS and various news organizations to peddle the so-called Steele dossier, which, in part, detailed alleged meetings between Page and officials from Russia to benefit the Trump campaign – allegations at the heart of the accusations of collusion with Russia that helped lead to Trump’s first impeachment trial at the hands of the Democrat-controlled House of Representatives.
Those allegations were eventually printed in news stores, ultimately leading to Page’s defamation lawsuit against the DNC and Perkins Coie. The case was first filed in federal court in Oklahoma, where Page lives. But the case was dismissed, because a federal judge there determined the court could not exercise so-called “personal jurisdiction” over the defendants.
When Page refiled the lawsuit in Chicago federal court, the federal judge on that case reached the same conclusion.
The judge found Page’s complaint “recounted only actions performed outside of Illinois by persons from other states, with no accompanying allegation that the defendants targeted Illinois with the allegedly defamatory news story.”
Page appealed, asserting the case belongs in Chicago, because Perkins Coie’s general counsel works from the firm’s office in Chicago.
However, the U.S. Seventh Circuit Court of Appeals said Page’s lawsuit not only doesn’t belong in Chicago federal court, it doesn’t belong in any federal court anywhere.
The key behind that finding, the appellate judges said, lies in the nature of Perkins Coie’s business structure.
Under federal law, companies can only be sued in federal court if they are said to be “domiciled” in another state than the plaintiff, a legal concept known as “diversity.” If there is no diversity – for instance, if a plaintiff and at least one defendant are “domiciled” in the same state – the case likely cannot be heard in federal court.
However, for law firms, such as Perkins Coie, which is organized as a limited liability partnership, the “domicile” of each of its partners can be evaluated.
In this case, while Perkins Coie has an office in Chicago, and does extensive business in Illinois, some of the firm’s partners are “domiciled” in China and elsewhere.
This, the appeals court said, renders Perkins Coie a “stateless” entity, which is not able to be “sued in diversity” in any federal court in any U.S. state.
The Seventh Circuit judges noted the decision marks the first time that decision has been rendered in the Seventh Circuit, a federal jurisdiction that includes federal courts in Illinois, Indiana and Wisconsin.
However, the judges also noted all other federal appellate circuit courts have reached the same conclusion on questions of diversity, pertaining to LLPs with “stateless citizen” partners.
The court noted its decision could be considered “impractical.” And they noted the law could be changed to correct this facet of modern business structure, unheard of when the rules governing diversity were crafted.
But they said those laws, and their later interpretation by the U.S. Supreme Court, controls how the Seventh Circuit and other federal courts can rule on the question.
“If this outcome seems to defy modern commercial realities, the responsibility for amending (the federal law)—updating it to account for today’s forms of business associations—rests with Congress,” the judges wrote.
The decision was authored by Seventh Circuit Judge Michael Y. Scudder. Circuit judges Amy J. St. Eve and Thomas Kirsch concurred in the decision.
All three judges were appointed by President Trump.
Page has been represented by attorney Brian Joseph Murray, and others with the firm of Rathje Woodward LLC, of Wheaton, and attorney John M. Pierce, of the firm of Pierce Bainbridge Beck Price & Hecht LLP, of Los Angeles.
Perkins Coie and the DNC have been represented by attorney Terra Reynolds, and others with the firm of Latham & Watkins, of Chicago, New York and Washington, D.C.