Civil Procedure Outline - Personal Jurisdiction

    **Abridged Personal Jurisdiction**

  1. PJ available over a D through physical control (Burnham) or minimum contacts analysis (Int'l Shoe).
  2. Minimum contacts analysis:
    • Long-arm Statute - Does the defendant come within the terms of the applicable long-arm statute? (states have tailored or due process-type)
    • Minimum Contacts - Does the defendant have "minimum contacts" with the forum state such that the assertion of jurisdiction would not violate the Due Process Clause?
      • Availment - Has the defendant "purposely availed" itself of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of the state's laws? (Shoe - D entered state and conducted business there; BK, Hanson, Chalek - D entered into Ks with residents; WWVW, Asahi  - D's products entered "stream of commerce"; Kulko, Calder, Revell, Zippo -  D's out-of-state conduct caused injury/"effect" in the state)
      • Relatedness - Does the lawsuit arise out of or related to the defendant's purposeful contacts with the forum or, if it does not, are the defendant's forum contacts so extensive that no such relationship is necessary? (specific v. general jurisdiction - Perkins, Helicopteros)
    • Reasonableness - Would the exercise of jurisdiction be unfair and unreasonable, taking into account the interests of the defendant, the forum state, the plaintiff, and other states that may have an interest in the matter? (Asahi)

     

    **Full Personal Jurisdiction**

  1. Personal Jurisdiction
     
    1. Essential elements in personal jurisdiction
      • Due process dictates both that the forum state must have power over the target of the action and that litigating the action there must be reasonable. (WW VW and Burger King)
      • While the P has the burden of persuasion as to power, it is up to the D to show unreasonableness
         
      1. Power
        • Physical power (Pennoyer), minimum contacts (Int'l Shoe), purposeful availment (Hanson v. Denckla)
        • Query involved in finding whether power is sufficient is narrowed to whether the relation of the target to the forum state constitutes minimum contacts and does not consider the P's or the public's interests.
      1. Unreasonableness
        • Fair play and substantial justice (Int'l Shoe)
        • Must balance D's, P's, and public's interests (McGee v. Int'l Life Ins. Co)
          • Convenience of litigating in the forum state, the availability of an alternative forum, the state's interest in adjudicating the dispute
          • Forum does not need to be the ideal forum just not unreasonable. Very flexible and liberal test.
             
    1. The Beginning of Personal Jurisdiction in Case Law
      • Rigid methods of applying jurisdiction were used in early case law. These cases resolved some issues but left gaps that needed to be filled. (under inclusivity issues)
      1. Pennoyer v. Neff
        1. Facts - OR attorney sued CA Neff. Published notice in OR newspaper. Neff didn't show, attorney got default judgment. After trial, court attached some of Neff's land in OR and gave it to Neff.
        2.  Rule - A court may enter a judgment against a non-resident only if the party…
          1. Is personally served with process while within the state, or
          2. Has property within the state, and that property is attached before litigation begins (as in quasi in rem jurisdiction)
        1. Notes - Attorney did not have jurisdiction over Neff. This method of personal jurisdiction was too rigid.
      1. Harris v. Balk
        1. Facts - Harris, from NC, owed Balk, from NC, $180. Balk owed Epstein, from MD, $300. Epstein sued Harris when they were both in MD for the amount Harris owed Balk, $180. Epstein won judgment in MD, and Harris paid Epstein $180. Later, Balk sued Harris for the $180 owed to him.
        2. Rule - The situs of a person's debt is not stationery but follows him wherever he goes. States must give "full faith and credit" to judgments made against its residents when those residents are in another state.
        3. Notes - One of the first cases dealing with intangible property. Through this case, someone can gain in personam jurisdiction over a debtor's debtor if they are in the same state. (troublesome for corporate debtors)
           
      • SCOTUS saw that with the nationalization of our economy and advances in transportation technology, jurisdiction needed to be expanded through other cases. Problems were also present in cases of jurisdiction with corporations. Where do they exist? The next few cases expanded the bounds of personal jurisdiction.
         
    1. How to Analyze Personal Jurisdiction Today
       
    • Test for "minimum contacts" jurisdiction:
      • Does the defendant come within the terms of the applicable long-arm statute?
      • Does the defendant have "minimum contacts" with the forum state such that the assertion of jurisdiction would not violate the Due Process Clause?
        • Has the defendant "purposely availed" itself of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of the state's laws?
        • Does the lawsuit arise out of or related to the defendant's purposeful contacts with the forum or, if it does not, are the defendant's forum contacts so extensive that no such relationship is necessary?
      • Would the exercise of jurisdiction be unfair and unreasonable, taking into account the interests of the defendant, the forum state, the plaintiff, and other states that may have an interest in the matter?

         
      1. Does the defendant come within the terms of the applicable long-arm statute?
        1. Some states have tailored/specific-act long-arm statutes.
        2. Others have due-process-type long-arm statutes. (A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the U.S.)
           
      1. Does the defendant have "minimum contacts" with the forum state such that the assertion of jurisdiction would not violate the Due Process Clause?
      • International Shoe v. State of WA
        • Facts - Int'l Shoe was a DE based corporation with a main office in St. Louis, MO. It had no offices, made no contracts for sale, and did not keep any warehouses of goods in WA.  They did have several salesmen employees who lived and sold merchandise for the company in WA. The state of WA sued Shoe in WA court for unpaid contributions to the state's unemployment fund. Notice was served to a salesman for the company in WA and via registered mail to the corporation's headquarters in MO.
        • Rule -  If a party has "minimum contacts" in a state, that corporation is subject to the jurisdiction of that state as long as it does not offend "traditional notions of fair play and substantial justice".
        • Notes - Int'l Shoe had minimum contacts with WA because of the continuous relationship with the state and the relatedness of the action to the activities there. Minimum contacts is a qualitative measure.  Continuous and related - jurisdiction; Not continuous but related - tough case; Continuous but unrelated - tough case; Not continuous and unrelated - no jurisdiction
           
        1. Has the defendant "purposely availed" itself of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of the state's laws?
          1. Contract Formation
            1. Active Contract Formation
            • Burger King Corp. v. Rudzewicz
              • Facts - MI Rudzewicz applied for a franchise from FL based BK. Franchise was in MI. Rudzewicz failed to make payments, so BK tried to negotiation with Rudzewicz through its FL office. After negotiations failed, BK terminated the franchise. BK sued in FL.
              • Rule - Alone, signing a contract with a party in the forum state is not sufficient to meet the minimum contacts requirement for that forum state. However, if the contract in that state is an intermediate step to tie up prior negotiations and contemplated future consequences, the party may be seen as having purposefully established minimum contacts in that forum state, especially when the consequences arise proximately from the activities allowed by the contract.
              • Notes - FL had no jurisdiction over the DE trust since trust had not purposely availed itself to the privilege of acting in that state. FL was probably the most judicially efficient place to litigate, but that does not matter. The contact with FL was unilateral.
                 
            1. Passive Contract Formation
            • Chalek v. Klein
              • Facts - IL Chalek sold software to NY Klein. When Klein found the software unsatisfactory, he returned it and put a stop payment on the check. Chalek sued for payment in IL court.
              • Rule - Entering into a passive contract with an entity in a state does not subject someone to personal jurisdiction in that state.
              • Notes - This may have been a case worried about the public policy involved with mail order/internet purchasing.

     

    1. Non-unilateral Activity
    • Hanson v. Denckla
      • Facts - PA Hanson set up trust in DE and made changes to it in FL cutting sisters out of some money. Sisters sued DE trust in FL court.
      • Rule - There be some act by which the defendant "purposely avails" itself of the privilege of conducting activities in the state, thus invoking the benefits and protections of its laws, in order for the minimum contacts requirement for jurisdiction to be met. A forum state can only gain jurisdiction over an out of state corporation if that corporation has "minimal contacts" with that forum state.
      • Notes - FL had no jurisdiction over the DE trust since trust had not purposely availed itself to the privilege of acting in that state. FL was probably the most judicially efficient place to litigate, but that does not matter. The contact with FL was unilateral.
         
    1. Stream of Commerce
    • Worldwide Volkswagen v. Woodson
      • Facts - Robinsons purchased an Audi from D (Seaway Volks) in NY. Following year, Robinsons moved to AZ, passing through OK where they were in an accident. Car caught on fire. Robinsons sued auto manufacturer, importer, regional distributor, and retail dealer in OK. Regional distributor (World-wide Volks) and retail dealer (Seaway Volks) are the parties in this case about jurisdiction.
      • Rule -  Jurisdiction may be exercised if a party delivers its products into the "stream of commerce" with the expectation that they will be purchased by consumers in the forum state.
      • No jurisdiction over WW VW in OK. The forseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into a forum state, otherwise every chattel a company sold would be its agent for service of process. It is that the Ds conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there. Thus, minimum contacts was the issue here, not fair play and substantial justice.

     

    1. Stream of Commerce "Plus"
    • Asahi v. Superior Court of CA
      • Facts - CA Zurcher lost control of motorcycle and collided with a tractor. He was badly hurt and his wife was killed. Zurcher sued Korean Cheng Shin Rubber who implicated Japanese Asahi. Asahi sold tire valve assemblies to Cheng Shin. Zurcher sued Asahi in CA court.
      • Rule - The mere awareness on the part of a foreign D that the components it manufactured, sold, and delivered outside the US would reach the forum state in the stream of commerce does not constitute "minimum contacts" in that state.
      • Notes - The "substantial connection" between the D and the forum state necessary for finding of minimum contacts must come about by an action of the D purposefully directed toward the forum state. O'Connor said that stream of commerce by itself is not sufficiently purposeful. Need stream of commerce plus. Advertising, designing for market (It's not terribly hard to find these plus factors, given capable attorneys, for American companies; harder for foreign companies) Ex. Vandelune v. 4B Elevator - Court found that a British manufacturer "designed" a component part for the American grain elevator market
         
    1. Foreseeability
    • Worldwide Volkswagen v. Woodson
      • Facts - Robinsons purchased an Audi from D (Seaway Volks) in NY. Following year, Robinsons moved to AZ, passing through OK where they were in an accident. Car caught on fire. Robinsons sued auto manufacturer, importer, regional distributor, and retail dealer in OK. Regional distributor (World-wide Volks) and retail dealer (Seaway Volks) are the parties in this case about jurisdiction.
      • Rule -  A forum state can exercise in personam jurisdiction over a party whose conduct and connection with the forum state are such that he should reasonably anticipate (forseeability) being haled into court there. Jurisdiction may be exercised if a party delivers its products into the "stream of commerce" with the expectation that they will be purchased by consumers in the forum state.
      • No jurisdiction over WW VW in OK. The forseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into a forum state, otherwise every chattel a company sold would be its agent for service of process. It is that the Ds conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there. Thus, minimum contacts was the issue here, not fair play and substantial justice.
    1. Effects (Test)
    • Calder v. Jones
      • Facts - FL Calder's magazine wrote an article about CA Jones. Magazine's largest circulation was in CA. Jones claimed the article was libelous and sued in CA court.
      • Rule -  A can exercise jurisdiction over a D based on the "effects test" - a state has power to exercise personal jurisdiction over a party who causes effects in a state by an act done elsewhere with respect to any cause of action arising from these effects.
      • Notes - The Calder effects test will allow personal jurisdiction over a party whose conduct was expressly aimed at the forum state, knowing that the harmful effects would be felt primarily there, and that the defendants would "reasonably anticipate being haled into court there". The action was directed at CA, and the Ds knew it would cause an effect there.
    • Zippo sliding scale- applies the effects test to the internet
      • "Passive"- allows owner to post information on the internet. No PJ.
      • "Active"- Repeated online contacts with residents over the internet. Personal jurisdiction may be proper.
      • Middle ground between these- some interactive elements, bilateral info exchange. PJ possible.
    • Revell v. Lidov (2002)
      • Ds (Revell and Columbia U) sued by P (TX res.) for libel over paper posted to CU journalism forum.
      • Fourth Circuit blended Zippo and Calder-  PJ can be exercised when:
        1. The person directs electronic activity into the state
        2. With the manifest intent of engaging in business or other interactions within the state
        3. The activity creates, in a person within the state, a potential cause of action cognizable in the States courts
      • Ct ruled that article contained no reference to TX or Revell's TX activities, wasn't directed at TX readers, and was not the focal point of the article or harm suffered. Internet activity must also be directed at forum state.
    1. General v. Specific Jurisdiction- Does the lawsuit arise out of or is it related to D's purposeful contacts or, if it does not, are D's forum contacts so extensive that no such relationship is necessary?
      1. Specific/Subject matter jurisdiction
        • This is almost always the case- general jurisdiction is much more difficult to prove than specific/subject matter jurisdiction.
      1. General jurisdiction
      • Perkins v. Benguet Mining (1952)
        • P sued D for stock dividends in OH. D operated in Philippines but had moved its essential operations to forum state b/c of Japanese invasion.
        • Cause of action did not arise out of activities in OH, but a continuous and systematic, but limited, part of its general business was there at the time.
        • Court ruled that OH could exercise jurisdiction if it wanted to, but it did not have to. This was a special case- not a normal company/situation.
        • Did not establish a clear rule for general jurisdiction.
        • Jurisdiction may have just been given because there was nowhere else that P could see.
      • Helicopteros v. Hall (1984)
        • Helicopter crash in South America, Ps sue D, the helicopter company, in TX.
        • Ct looks for general jurisdiction- says it is hard to do general jurisdiction, unless it is a "normal company" who is headquartered there.
        • Concern about "reaching" regarding general jurisdiction.
        • If lawyers had just mentioned that pilot was trained in Houston, and the cause of action arises directly out of the pilot's training, case probably would have been decided differently.

     

    1. Would the exercise of jurisdiction be unfair and unreasonable, taking into account the interests of the defendant, the forum state, the plaintiff, and other states that may have an interest in the matter?
      1. Reasonableness: Would the exercise of jurisdiction be unfair and unreasonable, taking into account the interests of D, the forum state, P, and other states' interests?
        1. Unreasonableness
          • Asahi v. Superior Ct of CA (1987)(PART II)
            • Essentially the court agreed that, even if there was purposeful availment, the case shouldn't be tried.
            • Hurt American (Zucher) has already settled, and the Ct was left litigating indemnification suit between two foreign countries.
            • Balance between P's interest (already settled), burden on D (high), state's interest (little to none), litigation interest (good reason not to want int'l cases)
        1. Policy concerns
          •  Kulko v. Superior Court (1978)
            • Kulkos got a divorce, mom moved to CA, kids stayed w/dad. Dad bought daughter plane ticket to move in with mom and visited kids while on business in CA. Mom filed for divorce in CA.
            • Court ruled no jurisdiction, because D's only contacts were domestic relations and finding jurisdiction there would be bad public policy since it would discourage contacts with state former spouse was living in.

    NOTES:

  2. Measuring "contacts" is a qualitative rather than a quantitative measure.
  3. Contact quality can be measured in terms of its relation to the subject of the lawsuit.

    4.  

  4. Post- Pennoyer in rem and quasi in rem jurisdiction
    1. Shaffer v. Heitner (1977)
      • P sued D in shareholder's derivative suit. P filed motion to sequester all Ds stocks, since DE said the situs of a stock was the state where Greyhound was incorporated.
      • Court ruled that a state cannot acquire jurisdiction over a nonresident party's property solely because the property is in the forum state. The "minimum contacts" test applies.
        • Court was basically saying that quasi in rem is not really needed anymore; everything should be tested under International Shoe.
    1. Pennoyer's in personam jurisdiction is still applicable.
      • Burnham v. Superior Court (1990)
        • P sued D for divorce, served him while he was in CA on business.
        • Jurisdiction based on physical presence alone constitutes due process because it is one of the continuing traditions of our legal system that define the due process standard of "traditional notions of fair play and substantial justice."