Civil Procedure 2 Judge Wood Spring 09
Ch. 2 Jurisdiction over the Parties or Their Property
· On a test for personal jurisdiction:
o First find if there is statutory jurisdiction
o Then if there is, make sure it is not in violation of the due process clause of the constitution. (Minimum contact, fair play and substantial justice, etc.)
§ This is because the Constitution sets the outer limits of state jurisdiction, but it’s up to the states to actually say what areas of jurisdiction they want through statutes.
Traditional Basis
· 14th amendment of due process prohibits unfair judicial procedures, this includes limits on the places where a defendants can be required to defend a lawsuit.
· Basis for personal jurisdiction: Citizenship, domicile, consent, physical presence, and miminum contact (Continuous and substantial business w/ forum).
· In Personam Jurisdiction: Actions against a person and judgments can attach to all of their possessions
· In Rem (the thing) jurisdiction: actions that deal with rights in things (rights to land, ships, inheritance)
o There are two types of this in rem jurisdiction
§ 1) When it is related to the “thing”
§ 2) When not related (quasi in rem); where you have prelaw attachment, and the thing limits the scope of the case, so it can’t address issues beyond lets say the property.
· Direct attack: is when a party disputes a suite in the initial claim or suite, it is best to attack here because you can raise any argument you want.
· Collateral attack: is when you wait until you get to the appeal process and you wait to dispute it then. Here you can’t raise many things but you can say it is void.
Pennoyer v. Neff
· Brief Fact Summary
o Mitchell sued Neff for attorney’s fees and wins a judgment. Neff was out of town and was looking for a way to collect for the judgment. Mitchell acquired Neff's property, the only thing available in the state of Oregon, through a Sheriff's deed and then sold the property to Pennoyer to recover on his judgment. Neff sued to get land back.
· Rule of Law and Holding
o Judgments in personam without personal service of process shall not be upheld. Judgments in rem with only constructive service may be upheld.
Minimum Contact
· Minimum Contact says: Courts may exercise personal juris. over a D if D has such minimum contacts w/ the state that it would be fair to require D to return and defend.
o This depends on the quality and nature of the contacts. Some courts took this to mean only one contact could meat the requirement, but that contacts can’t be casual or isolated.
o In international shoe court says that if one chooses to do business in the state they implicitly accept a reciprocal duty to answer for suits because there activities may cause trouble to the states citizens and if it does the state has a right to hold D accountable because they choose to avail themselves of the benefits and protections of the state.
o The suit must be one that arises out of the business of the D w/ the contact state.
International Shoe v. Washington
· Brief Fact Summary
o Appellant, a Delaware corp., has principle business in Missouri. It employs agents who live in the state of Washington, who solicit contracts but are not allowed to enter into them.
· Rule of Law and Holding
o "Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend the 'traditional notions of fair play and substantial justice.'"
Specific Jurisdiction & State Long arm Laws
· Specific Jurisdiction: This is jurisdiction over claims arising out of the (minimum) contact with a state.
· General Jurisdiction: When the D’s activities in the state are so substantial and continuous that D would expect to be subject to suit there on any claim and would suffer no inconvenience from defending there.
Gray v. American Radiator (this also included the Titan valve company) (This expansive IL long arm statute is pushing the limits of constitutionality)
o Titan is in Ohio and Gray is in Illinois, and American radiator is in Penn.
o Gray has an exploding water heater. Titan sold the valve to Gray in Ohio, it was then assembled with water heater in Penn, and finally sold to Gray in IL.
o Titan didn’t expect to be able to be sued all over the world for a faulty valve. Their products are shipped all over, but IL long arm said that it would adjudicate any torts that took place in IL.
o So the issue here is does Titan have minimum contact with Ill?
§ The Sup Crt said that it is sufficient that the tort takes place in the state of Ill, causing minimal contact and fulfilling the requirement.
§ The stream of commerce suggest that in the commercial world if you don’t want your goods to be used in certain jurisdictions then you should find out before hand.
§ Here the Ill crt says that the tort occurs where the injury is suffered, and it’s also the most convenient place for the suite because the witnesses and evidence is present in that state.
o In this case there is a question as to where the tort was committed, it could be said that a tort happens where harmful comments/conducts are felt/heard. On the other hand, it could be argued to take place where the actors act.
Green v. Advance Ross Electronics
· A former CEO of an Illinois company did a tort in Ill. and now he lived in Texas and the court said that the long arm can’t reach him anymore because he had no connection there.
· Later we see that Ill. changes the law to cover someone’s duties who are performed elsewhere even if the harm is done in Ill
Due Process & Long Arm Statues (Specific Juris)
· Even if the D has never acted physically in the state, if the D knows that an act outside of the state will cause a harmful effect in the forum state then there is minimum contact for claims arising out of that act.
· Purposeful Availment: The D must purposely avail itself of the privilege of doing business in the forum state, thus invoking the benefits and protections of the its laws.
· The theory of personal jurisdiction focus is on the D, and so it doesn’t matter if the P has minimal contacts, only based on whether the D purposefully availed/solicited the benefits/business of state or knows that D’s own actions will cause effects in forum state.
· Stream of Commerce: They argued that personal jurisdiction requires the action of the D to be more purposefully directed at the Forum State than the mere act of placing a product in the stream of commerce (Asahi)
o There is a split in application of the Stream of Commerce principal. Some use a far-reaching standard based on World-Wide, others adopt the O’Conner approach which says mere stream of commerce is not enough.
o There are two types of Stream of commerce 1) Where the out of state manufacturer sells a component to be added to an item that is sold in a particular state (Gray Radiator) (Asahi) 2) When the manufacturer sells a finished good to a wholesaler outside the state, the wholesaler then resells to a retailer in the forum state (Perry v. Ernst & World Wide). In both cases the starting manufacturer didn’t import it into the forum state themselves and, may know it was going to be imported, may think it highly likely, or may not know or care about the ultimate destination. This is why this issue is so hard.
· Other Factors: Interest of the forum state in providing redress to its citizens, the interest of the P in obtaining relief in a convenient forum, the interest of the states in enforcing
McGee v. International life Insurance
· Brief Fact Summary
o McGee, a California resident, bought life insurance from D, a TX Corp., who had solicited to re-ensure D through the mail. D refused to pay when McGee died.
· Rule of Law and Holding
o Mail is sufficient to establish minimum contacts when the claim is related to the D’s activity in the state so the D had to answer in CA even though located in TX.
Hanson v. Denckla
· Brief Fact Summary
o The case arose over a dispute between three sisters, whose mother had died. The mother, Mrs. Donner, established a trust in Delaware and then subsequently moved to Florida, where she spent the remainder of her life. The principle issue was whether the Delaware or Florida courts had jurisdiction over the assets of the trust. The issue was hotly contested, because if Florida had jurisdiction, two daughters inherited the trust. If Delaware had jurisdiction, the daughters would have to share the trust equally. The Court held that Florida did not have jurisdiction.
· Rule of Law and Holding
o To be considered a resident of a state, the individual must “purposefully avail" themselves of activities and benefits in the forum state
World-Wide Volkswagen v. Woodson
· Brief Fact Summary
o Plaintiff buys a car from a dealership (defendant) in New York. In a fit of manifest destiny, plaintiff drives his family cross country, only to be rear-ended in Oklahoma. To add injury to insult, the car catches fire, severely burning plaintiff's wife and two children. Plaintiff sues dealership in Oklahoma state court.
· Rule of Law and Holding
o In order for a state court to exercise personal jurisdiction over a defendant, there must exist "minimum contacts" between defendant, the forum, and the claim. Whereas a defendant's "purposeful availment" of a forum state's laws and privileges satisfies the minimum contacts test, "foreseeability alone has never been a sufficient benchmark for personal jurisdiction." So even though it was foreseeable the D (Seaway car dealer) only sold in tri-city area of NY, and never solicited business in Oklahoma and was not reasonably foreseeable, Can’t be Haled into court. .
o The problem with this is that when you expand this to other items then you run into a situation where you let the chattel be your agent and open you up to service everywhere, and this is not fair play and substantial justice.
Keeton v. Hustler
· In this case the P in brought suite in New Hampshire because it was the only venue that had a statute of limitation long enough for her to still bring her claim.
· She sues hustler, and the D argues that they shouldn’t be held to their courts.
· The court said that D did have minimal contact with New H. But the court said that the P didn’t.
· The theory of personal jurisdiction focus is on the D, and so the P is trying to disrupt the D and trying to drag them into court. So if the P doesn’t mind flying to that place to bring suite then the D is stuck if they have minimal contacts.
· The issue was that the P was focusing on Liable on a nationwide level.
· There was the single publication rule in multi state liable cases, and so as soon as you bring a suite in one case then the scope of the damages reaches all states.
· The majority opinion says that New H has power to bring them into court but in this case it can only focus on New H damages, and that it can’t recover for all the other states here.
Kulko v. Superior Court
· Dad buys a ticket to send kids with mom, and mom sues in Cali court trying to bring the NY father to a Cali court.
· The mom tries to say the minimal contact was buying the ticket. Here the court said this was stretching to far.
· The court also mentions that it is the father that stayed in the domiciled state and so the moving party can’t drag the father out.
Burger King v. Rudzewicz
o This is a contract case.
o What is the FL link?
§ Here in this case the contracts were made in FL.
§ Rent was paid to FL for 20 years
§ Contract said FL law must be used
o We have to issue choice of law and choice of forum.
§ The law will probably be FL law, but why couldn’t Michigan apply FL law.
§ The court says because the nature of the agreement relied so much on the Florida office.
o The D is really trying to get the case to be in Michigan because they have different principals of franchise and contract law
o There is also a big problem with fair notice, for the D. He has a strong argument for not having notice of being HALED into Florida courts.
Asahi Metal Industry v. Superior Court
· Brief Fact Summary
o Plaintiff is riding motorcycle when back tire blows out, causing severe injury and the death of plaintiff's wife. Plaintiff files suit in California state court against Taiwanese manufacturer of tire tube, who then files cross claim against the Japanese corporation (defendant) that manufacturers another component of the tire tube.
· Rule of Law and Holding
o Defendant's "awareness that the stream of commerce may or will sweep the product into the forum State," alone, is not sufficient to constitute a "substantial connection between the defendant and the forum State necessary for a finding of minimum contacts." Additional conduct is necessary, such as: "(a) designing the product for the market in the forum State, (b) advertising in the forum State, (c) establishing channels for providing regular advice to customers in the forum State, or (d) marketing the product through a distributor who has agreed to serve as the sales agent in the forum State."
o Other factors that were considered was the distance of the Japanese company to answer in a foreign court.
· Other view of the rule
o The concurrence argues that putting goods into the stream of commerce in significant quantities constitutes purposeful availment if they know it will reach a forum state or not because the maker foresees and benefits from such sales .