Civil Procedure Fall 2002

Civil Procedure Fall 2002

I. Jurisdiction Over Persons and Property

When making this Analysis:

1.

Asking what the forum states interest is

Looking at what the inconveniences

Looking at the

A. The Development of Our Concept of Jurisdiction

Pennoyer v. Neff

Facts: Mitchell is Neff’s attorney, he sues Neff for services rendered, in Oregon State Court. Neff is not a resident of Oregon, but owns a piece of property there. Mitchell serves Neff by publication in a small religious newspaper in Oregon for six weeks. Neff is never informed of trial, Mitchell wins by default judgment. Neff’s land is sold to satisfy judgment; Mitchell later sells this land to Pennoyer.

Procedural: Mitchell sues Neff in state court. Neff sues Pennoyer in District Federal Court and wins. Pennoyer appeals in Supreme Court.

Holding: No in personam jurisdiction over Neff, in Mitchell’s case, therefore ruling was in violation of due process on two counts: (1) person must be properly served; and (2) ?

Reasoning at Trial Court: Mitchell’s affidavit did not state what measures he had taken to notify (serve) Neff. Plaintiff is required to show “due diligence” in attempt to notify. Also, Mitchell never attached the land Neff owned in Oregon.

1)Important Concepts

a)Territoriality: each state, according to this case is a separate entity and is sovereign within its territory. According to the court there would be no way to afford full faith and credit to sister state judgments without conflict if state territorial boundaries were not honored. [NO LONGER CONTROLLING]

b)Fourteenth amendment due process clause: Nor shall any State deprive any person of life, liberty, or property without due process of law.

c)Direct attack v. Collateral Attack

-Direct Attack is when defendant shows up to challenge personal jurisdiction in a special appearance. This is the approach most preferred/ safe.

-Defendant does not respond. After default judgment, def. brings up separate suit to invalidate the first judgment. This approach is only used when def. is completely confident there is no jurisdiction. (Pennoyer- he was unaware of case pending)

d.) Types of Jurisdiction

• In Rem: power over property within the territory, power over a “thing” within the territory of the state. Lawsuit is all about the property and nothing else.
• Quasi in rem: Land or property within the forum state is used to establish in personam jurisdiction. Attaching property is the same as attaching def. himself. (Pennoyer).
• In personam: Need to somehow show actual physical presence of def. in the forum state. Bright Line Rule adopted in Pennoyer:

1) Service of process within the state

2) Voluntary appearance

3) Def. lives in the jurisdiction

4) Appointing an agent for non-resident to receive service.

e.) Attachment of Property- procedure that files a lien and gives the actor power or control over the property. Means of showing the actual physical presence of the defendant in the forum state. Filing requires:

1) Showing proof of who owns the property

2) Showing a reasonable certainty that the claim will prevail

3) Must be a state claim

f.) State courts can exercise general jurisdiction, but they must have jurisdiction over the person. Almost all cases can be heard, except issues that are specifically prohibited.

g.) Federal Courts have limited jurisdiction, only certain cases can be heard.

Grace v. MacArthur

Summary: Defendant is served over Arkansas airspace, Court rules this is sufficient for Arkansas to exercise jurisdiction.

Hess v Pawloski

Summary: Defendant got into car accident while driving in Mass. Mass. statute provided that any non-resident operating a motor vehicle in Mass. accepts appointment of the registrar to be his agent for receipt of service of process in any action growing out of accident or collision. Court held this was not a violation of due process, consent was established by driving in that state.

International Shoe Co. v. Washington

Facts: Appellant is a Delaware Corporation, having its principle place of business in St. Louis and is engaged in the manufacture and sale of shoes and other footwear. Appellant has no office in Washington and makes no contract either for sale or purchase of merchandise there. It maintains no stock of merchandise in that state and makes there no deliveries of goods in intrastate commerce. During years in question, appellant employed eleven to thirteen salesmen under direct supervision and control of sales managers in St. Louis. Salesmen resided in Washington and were compensated by commission on sales. Commissions totaled more than $31,000.

Issue: 1) Whether, within the limitations of the due process clause of the Fourteenth Amendment, a Delaware corp. has by it’s activities in the State of Washington rendered itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state unemployment compensation fund exacted by state statutes….; and 2) Whether the state can exact those contributions consistently with the due process clause of the Fourteenth Amendment.

Holding: Court holds that state has jurisdiction to enforce the obligations which appellant has incurred there.

Rule: Due process requires only that in order to subject a defendant to a judgment in personam, if he be not within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”

1)Important Concepts:

a) Minimum Contacts Rule- Broad Rule Adopted in Int’l Shoe

1) Activities (business) must be continuous and systematic

2) Result (of activities) in a large volume of commerce

3) Claim arises out of or is related to the contacts (specific jurisdiction)

4) Estimate of the inconveniences is relevant

5) Corp. benefits from laws and protection of the forum state.

*certain factors are favored more heavily; not all factors will need to be met everytime.

B. General v. Specific Jurisdiction

1. Specific Jurisdiction – situation in which the claim arises out of or is related to the contacts with the forum.

McGee v. Int’l Life Ins. Co.

Summary: Plaintiff was attempting to claim proceeds of a life insurance policy purchased by her deceased son, Franklin, from an Arizona Life Ins. Co. The Ins. Co. was later bought out by Int’l Life which had an office in Texas. Int’l Life offered to extend insurance to Franklin by sending reinsurance statement to his home in Cali. Plaintiff brought suit in Cali. And received judgment, but Texas cts. refused to uphold the verdict. Int’l life had no office, agents, employees, or other business in Cali, Franklin’s policy was the single policy and contact with California. Courts upheld California’s exercise of jurisdiction. IMP: DEFENDANT HAD REACHED OUT THERE SERVICE TO PLAINTIFF, NOT PLAINTIFF REQUESTING DEF. SERVICES.

2. General Jurisdiction- situation in which the claim has arisen in another place, and is unrelated to the contacts with the forum. Systematic and continuous contacts should be required in a case of general jurisdiction.

Perkins v. Benguet Consolidated Mining Co.

Summary: Plaintiff filed claim in Ohio, however claim had arisen in the Philippines, where the company had operated profitable gold and silver mines. The president of the company had established an office in Clermont, where he resided. He maintained bank accounts, and carried on correspondence, drew salary checks, and supervised rehabilitation of the company’s properties from that location. Supreme Court held this was enough contact to establish continuous and systematic business activities and allow Ohio jurisdiction.

C. Long-Arm Statutes: State Law Restrictions on Jurisdiction- The extent of a state’s jurisdiction is subject to two different restrictions: 1) state long-arm statute/state law decides which cases that fall within due process it will hear; and 2) due process, or “minimum contacts test.”

Gray v. American Radiator & Standard Sanitary Corp.

Facts: Plaintiff bought a water heater from American Radiator; the water heater exploded and injured the plaintiff in Illinois. A valve on the water heater, manufactured by Titan, was the defective cause of accident. Valves were manufactured defectively at Titan’s place of business in Ohio. Illinois long arm statute states: a nonresident who, either in person or through an agent commits a tortious act within the state submits to jurisdiction. The statute also provides: summons may be personally served upon any party outside the State; and that as to nonresidents who have submitted to the jurisdiction of our courts, such service has the force and effect of personal service within Illinois.

Issue: (1) Whether tortious act was committed in Illinois, so as to warrant the assertion of personal jurisdiction by service of summons in Ohio.

(2) Whether statute violates the requirements of due process.

Holding: (1) Yes. Tortious act was committed in Illinois. (This is stretching the long-arm statute to fit what courts think the law should be).

(2) No, due process clause is not violated.

Reasoning: (1) Court rules that tortious act is completed in place where injury occurs, word “tort” and “tortious act” are indistinguishable. (courts eliminate the requirement of an act from the statute).

(2) The courts look to Titans contacts with the state of Illinois, Ct states the following reasons to show minimum contacts are met:

a. It is reasonable to assume Titans commercial transactions result in substantial use and consumption in this State.

b. Titan enjoys benefits from the laws of the state.

c. ***Where alleged liability arises from the manufacture of products presumably sold in contemplation of use here, it should not matter that the purchase was made from an independent middleman or that someone other than the defendant shipped the product into this State.

Feathers v. Mc Lucas

Summary: Plaintiff was injured by truck driven propane tank near their home in Berlin, N.Y. The N.Y. long arm statute is similar to Illinois, states: tortious act committed within the State… Court disagrees with reasoning in Gray, and rules: the verbiage “committing a tortious act within the state” is not synonymous with “committing a tortious act without the state that results in injury within the state.”

Markham v. Anderson

*This case is different because it is brought in Federal Court.

Summary: Defendant certifies a truck driver to drive, against federal law, who suffers from epileptic seizures. The driver injures Plaintiff. Defendant satisfies the N.Y. long arm statute amended to include tortious act committed outside of the state but results in injury within the state. However, court holds no jurisdiction over the def., because his practice did not constitute “regular” or “continuous” business in New York and did not result in his deriving “substantial” revenue from interstate commerce.

Hall v. Helicopteros Nacionales De Colombia, Tex. Ct. of Appeals, 1982

?????

D. Modern Expansions and Contractions of the Minimum Contacts Doctorine

[1] Commercial Defendants: “Purposeful Availing,” “Reasonable Anticipation,” and “Convenience”

Hanson v. Denckla

Facts:Ms. Donner set up a trust with Wilmington Bank of Delaware appointed as trustee. She later moves to Florida and continues to receive income from the Delaware trustee, she communicated regularly with the trustee regarding trust business. Before her death in Florida, she exercises her power of appointment and leaves the trust to Hanson and group. She also executed a will that gave the residue of her property to Denckla and group. Denckla sues, claiming the trust is invalid and should pass to them under the will. Two suits commence, one in Delaware and the other in Florida. Two different results: Florida cts. hold thetrust invalid and pass contents to Denckla; Delaware cts. refuse to uphold Florida judgment and rule trust is valid and should pass to Hanson.

Issue: Whether Florida ct. had jurisdiction against trustee (Wilmington Bank).

Holding: Supreme Court say there was no jurisdiction. No in rem, because the situs of the trust was in Delaware. No in personam, because trustee did not have requisite contacts (Int’l shoe). Delaware trustee had no office, property or business in Florida other than its dealings with Ms. Donner. Difference from McGee: PURPOSEFUL AVAILMENT; trustee did not solicit the continued business of Ms. Donner, she moved and decided to continue her business with the trustee. Ct. rules there was not the requisite purposeful availment.

Counterargument (Dissent): Shouldn’t Florida have the power to adjudicate the issues arising out of a will administered in it’s state? Florida has a strong interest in this resolution and there would be no “heavy or disproportionate burden on a non-resident that would offend . . . ‘traditional notions of fair play and substantial justice.’”

World-Wide Volkswagen Corp. v. Woodson

Facts: Plaintiffs buy a Volkswagen from N.Y. and then drive cross-country to Arizona. While in Oklahoma they are rear-ended by another vehicle. The wife and two children are seriously injured. Plaintiff files suit against manufacturer, importer, regional distributor, and retail dealer. The distributor and retailer file special appearance to deny jurisdiction.

Oklahoma long arm statute holds jurisdiction over defendants that cause “tortious injury in this state by an act or omission outside this state if he regularly does or solicits business or engages in any other persistent course of conduct, or derives substantial revenue . . . from this state. . . .”

Holding: U.S. Supreme ct. reverses Oklahoma Sup. Ct, holds state ct does not have jurisdiction over the retailer or dealer.

Reasoning: IMPORTANT: Mere foreseeability is not enough to enough to allow jurisdiction over a defendant, the defendant must also have minimum contacts with the state and purposefully avail themselves of the jurisdiction of the state.

In this case, the defendants carry on no activity in Oklahoma; they close no sales there, and perform no services there.

The argument can be made that given an automobile is mobile by its very design and purpose, it is foreseeable that the vehicle would cause injury in Oklahoma. The RULE stated by the court to counter this argument: “the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum state. Rather, it is that the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there. . . . Hence if the sale of a product of a manufacturer or distributor . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or the distributor to serve, directly or indirectly, the market for its product in other states, it is not unreasonable to subject it to suit in one of those states if its allegedly defective merchandise has been the source of injury to its owner or to others.”

Helicopteros Nacionales De Colombia, S.A. v. Hall

Summary: Plaintiff’s decedents were killed in a plane crash in Peru. Defendants was a Colombian Corp. that maintained no office in Texas, but has purchased helicopters and supplies extensively in Texas. Def. had sent pilots to Texas for training, accepted a check drawn on a Texas bank, and sent its president to Texas to negotiate and sign the contract for helicopter service.

Supreme courts rule this is a case of general jurisdiction, which requires continuous and systematic contacts with the forum state. Court holds the defendant does not meet this level of contact. Ct makes a distinction between purchasing from a state rather than solicitingor selling in a state. This distinction goes toward the idea of “purposeful availment.” The defendant has more to gain from selling product and purchasing may be considered unilateral action.

Burger King Corp. v. Rudzewic

Facts: Defendants are residents from Michigan, who contract with Burger King to purchase a franchise in Michigan area. Defendants negotiate with both the Michigan district office and the Miami Headquarters. One of the defendants travel to Miami for a training seminar; this is the only physical presence the defendants have with the state of Florida. The defendants breach their contract by failing to make the required payments and when asked to vacate the premises defendants refuse and continue to occupy and operate the facility as a Burger King restaurant. Burger King files suit in district court for the Southern District of Florida under diversity jurisdiction.

RULE: COURT SUMMARIZES THE MODERN REQUIREMENTS FOR IN PERSONAM JURISDICTION:

(1) Look at the long-arm statute of the state( even when suit is filed in fed. Ct; look at the long-arm of the state law that will be applied).

- This needs to be evaluated on an exam even if the long-arm reaches to the extents of due process.

(2) Requirements of Due Process: Is states exercise of jurisdiction over the defendant fair and reasonable as defined by the due process clause in the fourteenth amendment.

- In Specific Jurisdiction cases:

1. “Purposeful Availment”- “defendant has ‘purposefully directed’ his activities at residents of the forum, . . . and the litigation results from alleged injuries that ‘arise out of or relate to’ those activities . . . .”

**unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum state.