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  • Writer's pictureDenny Esford

You’re Being Sued in Chicago but your Business is not located here!

Now what?

It’s never pleasant-and occasionally unnerving-to be served with a lawsuit. Sometimes you’re given the papers from a private person or agency, other times it’s the county Sheriff, complete with a badge and side arm at the front desk. After calming down the receptionist, it’s time to figure out what to do next. Unfortunately, the initial answer is one most business owners hate to hear from lawyers-it depends. But in this case, it is very important to figure out quickly where you were sued in Chicago and for what. But don’t panic just yet-this article will get you started on the right path.

How much time do you have?

If you were sued in Illinois state court for under $50,000 you are in the Municipal Division of the Circuit Court of Cook County, also informally known by the building where the Court is housed-Daley Center. The time in which you must respond to the lawsuit can vary from 14-40 days from the day you (or your Registered Agent) received the lawsuit. Over $50,000 puts you in the Law Division, and that deadline is 30 days. If you are sued in federal court-in Chicago it’s called the Northern District of Illinois-you have just 21 days. Since you need to hire a lawyer and get him/her up to speed on the facts of your case before they can help you, this is not a lot of time.

Can you hire your local lawyer to handle it?

Probably not. This is not to say you shouldn’t call your trusted local lawyer-you should-it’s just that help may be limited by his/her ability to practice law in Chicago. At the Daley Center, an out-of-state attorney can only appear in the lawsuit if he/she has already retained a licensed Illinois lawyer to provide advice on state and local law and procedure. That means two lawyers for what might be a simple legal issue, e.g., most breach of contract lawsuits.

Federal court is a little trickier. If your local lawyer is not licensed in Illinois, he/she can file to appear for the sole purpose of handling your particular lawsuit, known as “pro hac vice” in legal lingo. However, you must still retain a lawyer up front who is a member of the Northern District’s Trial Bar-a select subgroup of Northern District of Illinois lawyers who are allowed to represent you at trial, or earlier substantive hearings, if your case gets that far.

While there are some very limited “extraordinary” circumstances, as a practical matter, virtually every judge in Northern District will insist that a member of its own Trial Bar file an appearance at the outset of the lawsuit, even if the local lawyer is not required to come to court for every hearing. Another caveat is that even if your local lawyer happens to be licensed in Illinois, if he/she does not have an office here that regularly conducts legal business, Chicago’s federal court still requires you to hire a local member of its Trial Bar.

Why does it matter what I was sued for?

In a word-knowledge. The law between states can be similar but often varies in very legally significant ways. For example, the Uniform Commercial Code (UCC) is familiar to many business owners, yet each state legislature can and does modify the UCC to its own perceived needs. So even if your local lawyer can serve as lead counsel, hiring qualified Illinois counsel can be prudent insurance against critical mistakes based on ignorance of a particular Illinois law or interpretations of that law decided by its appellate courts.

Of course, your local lawyer can (and must) learn this law, but he/she will surely bill you for developing that knowledge in order to adequately represent you. Also important, in federal court what is known as “diversity jurisdiction” permits a lawsuit there based solely on Illinois law, so long as the parties on each side live in different states and you are being sued for more than $75,000.

The bottom line?

As good and trusted as your out-of-state local lawyer may be, if you are sued in Chicago, it is always prudent to seek out qualified Illinois counsel. Even if we can’t help, we can usually refer you to someone by reaching out to our extensive network of highly qualified colleagues.

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