Part One: Personal Jurisdiction and My Impending Suicide

Judge Wood – Spring 09

CIV PRO II OUTLINE:

PART ONE: PERSONAL JURISDICTION AND MY IMPENDING SUICIDE

HISTORICAL BACKGROUND:

1)TYPES OF PERSONAL JURISDICTION

In Personam Jurisdiction  Permits a court to enter judgment that is personally binding on the defendant either ordering equitable remedies or allowing plaintiff to collect damages from D.
In Rem Jurisdiction  Permits a court to adjudicate the rights of all possible claimants to a specific piece of property, as in a condemnation proceeding.
Quasi in Rem Jurisdiction  TWO TYPES:
Individual disputes related to property under the court’s control  actions for specific performance of a contract to purchase land.
Personal disputes where the court could not assert personal jurisdiction over the D, but where court had jurisdiction over property belonging to the D.  that property could be seized by P and used to satisfy claim if P prevailed!

2)Pennoyer v. Neff:

Court found that for the state to exercise power over individuals or property, there must be:
Valid service of process on individual (in in personam cases)
OR
Attachment of property in the state (in rem actions).
Court made it clear that due process would apply the same limitations on exercise of jurisdiction in future cases.
TERRITORIAL LIMITS ON PROCESS:
State cannot serve an individual domiciled in another state with process and summon that person to respond to lawsuit against him.
WEAKENED BY MODERN SHIFT TO MINIMUM CONTACTS ANALYSIS!
METHODS TO OBTAIN JURISDICTION:
Service within the state  if D in state, P can serve him.
Seizure of D’s property Prejudgment seizure was sufficient to permit a state to dispose of that property to satisfy claims not related to the property.
D is expected to know what is up with his property, and therefore this is sufficient to bring D under jurisdiction of the state.

3)SHIFT TO MINIMUM CONTACTS:

International Shoe Co. v. Washington
Court shifted away from Pennoyer’s insistence on service within the state to support in personam jurisdiction.
Held that to subject a defendant to a judgment in personam, due process requires only that he have “certain minimum contacts with the forum such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’
SO WHAT THE FUCK DOES THAT MEAN?
SYSTEMATIC AND CONTINUOUS ACTIVITY:
Court upholds in personam jurisdiction over nonresident D based on systematic and contihuous contacts with the state.
International Shoe D was Delaware corporation employing 11-13 salesmen in Washington. Court upheld Washington’s jurisdiction given the volume and systematic and continuous nature of contacts.
SINGLE CONTACT:
McGee v. International Life Insurance Sending a K to California from Texas allowd California court to get jurisdiction over D.
EXTENDS STATE JURISDICTION!
LIMITATION: PURPOSEFUL AVAILMENT LIMITATION:
Hanson v. Deckla Court said that there must be some act by which the D PURPOSEFULLY AVAILS itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.

CONTEMPORARY GROUNDS FOR STATE COURT JURISDICTION!

BASIS:

1)Territory

2)Consent

3)Citizenship

[NOTE TO SELF: GO DOWN THE LIST FROM 1-4 ON EXAM]

How to bring an out-of-state party under your jurisdiction…

1)THERE MUST BE STATE STATUE ALLOWING FOR LONG-ARM JURISDICTION

SHE WANTS US TO KNOW THE GODDAMN STATE STATUTES, SO IF AN EXAM QUESTION DEALS WITH STATE – READ STATUTE!

2)TERRITORY - THEREMUST BE MINIMUM CONTACTS WITH FORUM  as per International Shoe!

Purposeful Availment – Established by Hanson v. Deckla.
Meaning?
Voluntary action by D establishing a relationship with the forum.
D usually gets a benefit!
WHY?
Burger King Corp. v. Rudzewicz – This requirement gives defendants “fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign.”
Instills a degree of predictability to the legal system that allows potential Ds to structure primary conduct with minimum assurance as to where conduct will and will not render them liable.
ELEMENTS: What is a minimum contact?
INSUFFICIENT - UNILATERAL ACTS BY P:
World-Wide Volkswagen Corp. v. Woodson “The defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.”
Unilateral act by Plaintiff of driving a car from New York to Oklahoma, where they were in an accident, did not establish contact between NY retailer and Oklahoma!
LONG-TERM RELATIONSHIP WITH FORUM RESIDENT:
Burger King Corp. v. Rudzewicz Burger King (Florida Corp) entered into 20-year franchsie agreement with Michigan defendant. Jurisdiction valid because D “ reached out beyond Michigan and negotiated with a Florida corporation for purchase of a long-term franchise and manifold benefits that would derive from that affiliation.”
SEEKING TO SERVE:
World-Wide Volkswagen v. Woodson Court notes that iof the retailer was seeking to serve the Oklahoma market, that would allow Oklahoma jurisdiction.
McGee v. International Life Insurace Even ONE ATTEMPT to seek to serve forum market has been held sufficient to support jurisdiction in action asserting claim growing out of that act.
Keeton v. Hustler Publishers of Hustler able to be sued in New Hampshire because they targeted magazine sales to that state. EVEN THOUGH P HAD NO CONNECTION TO STATE!
STREAM OF COMMERCE:
Forum state may assert in personam jurisdiction over corporations that deliver its products into the stream of commerce with expectation they will be purchased by consumers in that state.
RETAIL SELLERS:
World-Wide Volkswagen – Stream of commerce ends with RETAIL SALE OF PRODUCT, even if foreseeable that purchaser will take it to another state. (NOTE  If sells a lot to other state, might be liable under “seek to serve” standard)
MANUFACTURERS/COMPONENT SUPPLIERS – 2 VIEWS!
Gray v. Radiator & Standard Sanitary Corp. Upheld jurisdiction over component supplier whose product was sent into forum state as part of product manufactured by customer.
GRAY STANDARD  Wherever stream of commerce ends….
HOWEVER, NARROWED!
Asahi Metal Industry Co. v. Superior Court PLURALITY – O’Conner says that placing a product in the stream of commerce is not sufficient!
P MUST SHOW
Additional conduct by which the defendant indicates an intent or purpose to serve the forum state!
TARGETING OR INTENDING EFFECTS IN FORUM:
For intentional torts, jurisdiction can be obtained over a nonresident D if D intended that his actions could an effect in that forum.
LIMITED TO WRONGFUL OR COMMERCIAL ACTIVITY!
Kulko v. Superior Court – Effects test was “intended to reach wrongful activity outside of the State causing injury within the State or commercial activity affecting State residents.”
Husband derived no BENEFIT from his actions in buying plane ticket to California nor was his action wrongful!
Helicopteros v. Hall Purchases of equipment and training of personnel may be insufficient to confer personal jurisdiction.
CONTACT MUST ALSO BE REASONABLE:
“Fair play and substantial justice” fromInternational Shoe.
The State must be reasonably exercising jurisdiction!
Burger King “Where a D who purposefully has directed his activities at forum residents seeksto defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”
BALANCING FACTORS TO CONSIDER:
Burden of the defendant to defend litigation in forum.
Asahi Metal Industry Supreme Court recognized that there are “unique burdens placed upon one who must defend oneself in a foreign legal system.”
Forum state’s interest in adjudicating the dispute.
Plaintiff’s interest in obtaining convenient and effective relief.
Interstate judicial system’s interest in obtaining the most efficient resolution of the dispute.
Shared interest of the several states in furthering fundamental substantive social policies.
SPECIAL APPLICATIONS:
INTERNET
SAME MINIMUM CONTACTS STANDARD THAT IS USED FOR OTHER SUITS!
Contracts  Entering into a contract via internet communications usually will suffice to support jurisdiction at the forum for either party.
Causing effects in Forum  Might allow for jurisdiction!
SPECIAL ISSUES UNDER ASAHI “SOMETHING MORE” REQUIREMENT:
Ability of Forum Residents to Access Internet Site Not Sufficient:
Pebble Beach Co. v. Caddy Did not find the fact that a California resident could access the website
Level of Interaction and Nature of Web Page Relevant:
Pebble Beach Co. v. Caddy Website was “passive” (merely providing information).
Zippo Manufacturing Co. v. Dippo Dot Com, Inc. 
Active websites (sites that business use to carry out transactions with residents of a forum state) almost always provide for an exercise of personal jurisdiction.
PROPERTY IN FORUM STATE:
JUST BECAUSE PROPERTY MAY BE IN STATE DOES NOT AUTOMATICALLY CONFER JURISDICTION!
Shaffer v. Heitner Presence of property in a State may bear on the existence of jurisdiction by providing contacts among the forum State, defendant and litigation, BUT:
MUST SATISFY MINIMUM CONTACTS TEST UNDER INTERNATIONAL SHOE!!

3)OR (Instead of 1 + 2)

4)CONSENT:

EXPRESS CONSENT:
Can be made either before or after suit is filed, and suffices to support jurisdiction without reference to other contacts with the forum.
IMPLIED CONSENT:
By filing suit, the P is deemed to have consented to the jurisdiction of the forum for the purpose of a counterclaim by the defendant.
EXCEPTION  This does not extent to counterclaim unrelated to the subject matter of P’s claims against D.
THROUGH CONTRACT:
M/S Bremen v. Zapata Off-Shore Upholds forum selection clause for adjudication in London because “we cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts.”
Carnival Cruise Lines, Inc. v. Shute Forum-selection clause expanded for policy reasons.
Cruise line has special interest in limiting the for a in which it potentially could be subject to suit (many passengers from different countries, many different potential jurisdictional suits).
Ex ante forum decision has salutary effect of dispelling confusion about where shuits must be brought and defended.
Passengers enjoy the economic benefits that stem from such a clause (lower ticket prices because of less litigation costs).
APPEARANCE IN THE ACTION:
A party’s voluntary appearance (when D appears to defend his litigation on the merits) in an action is sufficient by itself to support jurisdiction.
STATE COURTS:
LIMITATION  A defendant who wishes to preserve objections to person jurisdiction must often make a special appearance raising only jurisdictional issues.
Raising any other matters subjects the defendant to the risk of having made a general appearance and thereby consenting to jurisdiction.
FEDERAL COURTS:
A defendant need not make a special appearance; all grounds of defense, including lack of personal jurisdiction, can be asserted in a motion or answer.
WAIVER  FRCP 12(h)(1) – If D fails to raise personal jurisdiction in her initial motion, that objection is waived.
CONSENT TO JURISDICTION TO DECIDE JURISDICTION  By moving to dismiss for lack of personal jurisdiction, D consents to the power of the court to decide that question, including the power to order discovery pertinent to the jurisdictional question.

5)OR

6)SIMPLY BEING IN THE STATE.

Under Pennoyer, service of process within the jurisdiction was presumptively sufficient to support jurisdiction!
Burnham v. Superior Court Supreme Court upheld in a plurality decision the constitutionality of “transient jurisdiction,” obtained by service on a nonresident temporarily within the state, even though the suit was unrelated to D’s activities in the state.
CAUTION – This ground for jurisdiction may not suffice, according to some Justices’ opinions, if D’s presence in the state was not INTENTIONAL or VOLUNTARY.

7)JURISDICTIONAL REACH OF FEDERAL COURTS:

FRCP 4(k)(1)(A):
Federal court may “piggy-back” on the long-arm statute of the state in which it sits.
Minimum contacts necessary!
FRCP 4(k)(1)(B):
Allows parties joined under Rules 14 and 19 to service process “100 miles from where the summons was issued.”
FRCP 4(k)(1)(C):
Establishes personal jurisdiction authorized by a federal statute.
FRCP 4(k)(2):
Limited federal long-arm provision that establishes personal jurisdiction “for a claim that arises under federal law” if the D is not subject to jurisdiction in any one of the fifty states and jurisdiction is “consistent with the US Constitution and laws.”
If defendant does not want this, burden is on him to show another state where the claim could proceed.

8)CHALLENGING A COURT’S EXERCISE OF JURISDICTION:

RAISING JURISDICTIONAL ISSUE DIRECTLY:
At common law, can make special appearance!
This has mostly been discarded, but making a special appearance gives you immunity from being served with any other process while you’re in the jurisdiction.
WAIVER  Remember, according to Rule 12, you MUST raise this issue in your first written motion.
COLLATERAL ATTACKS ON PERSONAL JURISDICTION:
If you make a special appearance but your jurisdictional challenge is denied, then you lose all rights to bring attack against jurisdiction, even if you don’t plead anything else and thereby lose by default judgment (Baldwin v. Iowa State Traveling Men’s Association)
REMEMBER  if you don’t appear AT ALL, then you can still challenge jurisdiction!
LIMITED APPEARANCE APPROACH:
Allows a D in an action commenced on a quasi-in-rem basis to appear for the limited purpose of defending his interest in the attached property without submitting to full in personam jurisdiction.

PART TWO: FEDERAL SUBJECT MATTER JURISDICTION

1)DIVERSITY JURISDICTION – 28 USC §1332:

Constitutional Basis:
Article III, Section 2 of the Constitution provides that the judicial power ot the US may extend to controversies between 2 or more states, between a state and a citizen of another state, between citizens of different states, or between a state and foreign states, citizens or subjects.
ELEMENTS: YOU NEED BOTH DIVERSITY OF CITIZEN AND A MINIMUM AMOUNT IN CONTROVERSY
DIVERSITY OF CITIZENSHIP:
Complete Diversity Requirement:
In 1806, SC interpreted diversity statute to require that there be no defendant having the same citizenship as any plaintiff. (Strawbridge v. Curtiss).
Statutory Exceptions to Complete Diversity:
Interpleader  The federal interpleader act permits a federal court to exercise jurisdiction in interpleader actions whenever any two or more adverse parties are of diverse citizenship.
Class Action Fairness Act (28 USC §1332(d)(2))  Provides federal district courts with original jurisdiction over certain class actions in which there is minimal diversity between the class members and the named defendants.
Multiparty, Multiforum Jurisdiction – 28 USC §1369  This act confers jurisdiction on the federal district courts for actions arising from accidents that involve the deaths of at least 75 people so long as there is minimal diversity between adverse parties.
Alienage Diversity Jurisdiction:
1332(a)(2) confers federal subject matter jurisdiction over cases involving a citizen of the US and a citizen of a freign country, and (a)(3) confers federal SM jurisdiction over cases involving completely diverse citizens of American states in which aliens are additional parties.
How is citizenship determined?
Burden of pleading diverse citizenship is upon the party invoking federal jurisdiction.
NATURAL PERSONS:
For US Nationals, “citizenship” has the same meaning as DOMICILE (and not mere residence):
Mas v. Perry “For diversity purposes, citizenship means domicile; mere residence in the State is not sufficient.”
DOMICLE =” true, fixed and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent therefrom.”
ELEMENTS OF ESTABLISHING DOMICILE:
Physical presence in the state.
AND
Intention to remain there.
Until you positively establish a new domicile, you remain a domiciliary of your previous domicile.
ALIENS:
Alein admitted to the US for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.
HOWEVER – There may not be minimal diversity between two aliens.
Saadeh v. Farouki Held that 1332(a) should not be interpreted to authorize a suit between aliens even if one were domiciled in an American state.
CORPORATIONS:
ELEMENTS: A corporation is deemed to be a citizen of EVERY state in which it is incorporated and of the state in which it has its principal place of business.
“Principal Place of Business”
Where executive office and its other activities are in the same stat,e the concept causes no trouble.
TESTS:
Nerve-center Test:Some courts consider the executive offices as the NERVE CENTER of the corporation and thus principal place of business.
Operating Assets TestOther courts hold that the MAIN PHYSICAL PLANT is the principal place of business.
Total Activity TestHybrid of both, testing them both to consider the circumstances to discover its principal place of business.
Time For Determination
GENERAL RULE: Diversity need only exist at the commencement of the action.
Change before filing  IT is immaterial that the parties had the same citizenship when the claim arose, and a party may even more to another state to create diversity as long as there is a genuine change of citizenship.
Change after filing  A change in either party’s citizenship after filing does not deprive court of jurisdiction.
PARTIAL EXCEPTION – removal
When an action is removed to federal court from state court on grounds of diversity, diversity must exist at the time of filing of the suit AND on the date of filing of the notice of removal.
Parties’ Efforts to Create or Defeat Diversity:
CREATE:
GENERAL RULE = 28 USC 1359 provides that there shall be no jurisdiction when a paerson has collusively or improperly been made a party or joined in order to invoke federal jurisdiction.
A GENUINE change of citizenship can create diversity!
DEFEAT:
Joinder of Nondiverse Defendants:
A P can bring a single action against a number of defendants, as long as the claims against the defendans arise out of the same series of occurrences or transactions and there is a question of law or fact common to parties.
Often, P may add claims against nondiverse defendants and thereby defeat diversity.
LIMITATIONS:
Valid Claims/Parties in Interest  P must have valid claim against nondiverse D or presence of D will be disregarded in making diversity determination.
Rose v. Giamatti Because real parties in interest were diverse, addition of non-diverse additional defendants did not defeat diversity.
MINIMUM AMOUNT IN CONTROVERSY:
GENERAL RULE: Limits federal diversity jurisdiction to cases involving MORE THAN $75’0000!
Not greater than or equal too! Must be at least $75,000.01.
Time for Computing:
Date of commencement of the action.
Legal Certainty Test:
RULE ARTICULATED: “The rule is that the sum claimed by the P controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.” (St. Paul Mercury Indemnity Co. v. Red. Cab Co.)
If there is SOME legal possibility that the damages could be more than minimum jurisdictional amount, then it is OK!
No need for plaintiff to itemize how she arrived at the amount of damages claimed in complaint.
REMEMBER – early in most cases, Federal Rules require that certain disclosures be made, including a computation of damages.
LIMITATION – Good Faith:
This only goes for damages claims made in good faith; where there need be only some legal possibility of recovering that minimum amount.
AFA Tours, Inc. v. Whitchurch  “The court must afford the plaintiff the ‘appropriate and reasonable opportunity to show good faith in believing that a recovery in excess of the jurisdictional amount is reasonably possible.”
Aggregation of Claims to Satisfy Requirement:
Single Plaintiff/Single Defendant:
All claims of the P against the D, whether or not related, can be aggregated.
Single Plaintiff/Several Defendants:
Only claims for which all defendants are JOINTLY LIABLE to the P may be combined.
Several Plaintiffs/One Defendant:
Aggregated only if they have a common undivided ownership interest in the claims.

2)FEDERAL QUESTION JURISDICTION: