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Jurisdiction in Civil Procedure: Understanding Personal Jurisdiction and Minimum Contacts, Study notes of Commercial Law

University of Florida (UF)Commercial Law

The concept of jurisdiction in civil procedure, focusing on personal jurisdiction and minimum contacts. It discusses various cases, including international shoe co. V. Washington, milliken v. Meyer, and burger king corp. V. Rudzewicz, which have shaped the legal framework for asserting jurisdiction over corporations and non-residents. The document also touches upon the concepts of general and specific jurisdiction, as well as the role of long arm statutes and the due process clause.

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Civil Procedure – Civ Pro

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B. The Modern Constitutional Formulation of Power

1. Redefining Constitutional Formulation of Power

Corporations were always an issue for personal jurisdictions – service of process rules did not

work very well

• corporation is a fiction – entity created by operation of law

• if corporation was created by laws of state, it is a citizen of that state but what about

the other states?

• Courts tries to look at it under both options created under Pennoyer – seemed

inconsistent (diff. jurisdictions)

o consent – state can create presumption that by doing business within the state,

you are consenting to jurisdiction within that state

§ this would give the state the power to adjudicate only those claims

against the corporation that involved activity within the state... state

gets specific jurisdiction

o physical presence – if you say that doing business in the state is the same as

personal service of process, then you are acquiring general jurisdiction

§ once they leave the state, lose jurisdiction

• the 2 concepts flow together into “doing business” as a basis for asserting personal

jurisdiction over corporation

Milliken v. Meyer

• 2 partners sued each other; Meyer was resident in Wyoming but was served in

Colorado

• Court determined that it was OK even though process was served outside of the states

boundaries

• court says that by being a domiciliary of a state, the courts of that state could exact

personal jurisdiction - mutual benefits

o established domicile as basis for jurisdiction (residence plus intent to remain)

International Shoe Co. v. Washington (1945) p.76

• Facts:

o ISC is a Delaware corporation with its principal place of business in St. Louis,

MI

§ engaged in the manufacture and sale of shoes and other footwear

o ISC maintains no offices in WA, no contracts for sale or purchase there, no

stock in that state, makes no deliveries in interstate commerce

§ employed 11-13 salesman who resided in WA (where their principal

activities occurred)

§ orders were shipped f.o.b. from points outside of WA into the state

(invcd. at place of shpmt)

o Washington sues to recover unpaid contributions to the state unemployment

compensation fund

Discover Study notes of Commercial Law University of Florida (UF)

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B. The Modern Constitutional Formulation of Power

1. Redefining Constitutional Formulation of Power Corporations were always an issue for personal jurisdictions – service of process rules did not work very well - corporation is a fiction – entity created by operation of law - if corporation was created by laws of state, it is a citizen of that state but what about the other states? - Courts tries to look at it under both options created under Pennoyer – seemed inconsistent (diff. jurisdictions) o consent – state can create presumption that by doing business within the state, you are consenting to jurisdiction within that state § this would give the state the power to adjudicate only those claims against the corporation that involved activity within the state... state gets specific jurisdiction o physical presence – if you say that doing business in the state is the same as personal service of process, then you are acquiring general jurisdiction § once they leave the state, lose jurisdiction - the 2 concepts flow together into “doing business” as a basis for asserting personal jurisdiction over corporation Milliken v. Meyer - 2 partners sued each other; Meyer was resident in Wyoming but was served in Colorado - Court determined that it was OK even though process was served outside of the states boundaries - court says that by being a domiciliary of a state, the courts of that state could exact personal jurisdiction - mutual benefits o established domicile as basis for jurisdiction (residence plus intent to remain) International Shoe Co. v. Washington (1945) p. - Facts: o ISC is a Delaware corporation with its principal place of business in St. Louis, MI § engaged in the manufacture and sale of shoes and other footwear o ISC maintains no offices in WA, no contracts for sale or purchase there, no stock in that state, makes no deliveries in interstate commerce § employed 11-13 salesman who resided in WA (where their principal activities occurred) § orders were shipped f.o.b. from points outside of WA into the state (invcd. at place of shpmt) o Washington sues to recover unpaid contributions to the state unemployment compensation fund

§ statute allowed, and WA complied with both, service of process against one of the employees in the state and mailed process to headquarters o ISC contends that is activities within the state are insufficient to confer jurisdiction and thus it would be a denial of due process to subject them to taxation. § used the device of special appearance to raise defense – lost in admin agency and state courts § US SC: affirms

Issue: Within the limitations of the Due Process clause of the 14th^ Amendment, has ISC, by its activities in the State of Washington, rendered itself amenable to proceedings in the courts of that state?
Holding: Yes (thus, it is not a denial of due process to exact taxes on them) o Old Rule: jurisdiction to render judgment in personam is grounded in de facto power over their person o New Rule: To be subject to a state’s jurisdiction, a party must have certain minimum contacts with it such that maintenance of the suit does not offend traditional notions of fair play and substantial justice
Analysis o Assertion of jurisdiction by a state where it does not comply with requirements violates due process, thus it is a federal constitutional issue (giving rise to jurisdiction) o if you are within the boundaries of the state, then personal service of process still sufficient § but, when not within the boundaries, then minimum contacts are sufficient o Previous Law § Bases for Personal Jurisdiction ú presence – “doing business” ú consent ú implied consent - “doing business” - driving + tort ú domicile § ISCo – the Court is looking back over all the decisions (general rule plus exceptions) and looking at the underlying principle behind them ú saying the Courts in the past were instead basing decisions unconsciously on the minimum contacts principle (which is broad enough to cover these exceptions) o Minimum Contacts: § 2 Components ú continuous and systematic ú activities in the state give rise to the claim § Insufficient ú isolated and casual

Long Arm Statutes: statutes authorizing courts to reach beyond their own borders (extend their jurisdictional “arms”) Gibbons v. Brown (1998) p.

Facts o G, passenger in Mr. B’s car, allegedly gave wrong directions causing Mr. B to turn the wrong way onto a one way street, and resulting in a head-on collision that injured both passengers (all in Canada) o 1995: G, TX resident, sued Mr. B in FL (Mrs. B was not a party) o 1997: Mrs. B sought to recover for own injuries by bringing action against G in FL § alleged that G had subjected herself to the personal jurisdiction of FL by bringing prior suit § G moved to dismiss claiming that the allegations were insufficient to satisfy the FL long arm statute
Issue: Jurisdiction?
Holding: No.
Analysis o G was able to sue Mr. B in FL because FL had general personal jurisdiction o Court: 2 Part Test § does the plaintiff allege sufficient jurisdictional facts to bring the defendant within the coverage of the long arm statute § whether sufficient “minimum contacts” are shown to comply with the requirements of due process o See FL Long Arm Statute Handout (§48.193) § Subsection 1: Specific Jurisdiction ú includes: torts (b), (f); contracts (g); conducting business (a) § Subsection 2: General Jurisdiction o Here: Brown seems to be trying to assert general jurisdiction from Mrs. B’s prior dealings in the state – all previous instate activities were related to the past litigation § not substantial presence – litigation happened a while ago § if they have stopped that activity and left – then this subsection is not satisfied o This is a torts case, why does subsection 1 not apply § b – must have occurred within the state § f – doesn’t work o What if Ms. G owned condo in FL, could they have used (c) – no, because the specific jurisdiction section would have required that injury resulted from the use of that property o Note: would it have mattered if Mrs. B sued in fed. ct. – NO because of 4(k) § apply the jurisdiction statutes of the state in which they are sitting

p.162 (b) – thinks that should have had jurisdiction under these facts 01/31/ B. The Modern Constitutional Formulation of Power

2. Absorbing In Rem Jurisdiction See p. 84 Harris v. Balk - illeogical extreme extension of quasi-in-rem jurisdiction - allowed you to sue someone by attaching debt to them, and then using transitory movement to assert jurisdiction o Garnishment § debt clings to the debtor § attaches and allows you to adjudicate (just as with real property) - Note: this is no longer good law o see Shaffer v. Heitner McGee v. International Life Insurance Co. (1957) p. - Facts: o Franklin, CA resident, purchased life insurance policy and when the ins. co. was bought out, accept the reinsurance certificate that was sent to him. § paid premiums by mail from his CA home to Ins. Co.’s TX office o when Franklin died, Ins. Co. refused to pay, claiming he had committed suicide and McGee brought suit in CA § Ins. Co. claims no jurisdiction - Issue: Jurisdiction? - Holding: Yes. - Analysis o Insurance Companies Contacts with State of CA: § Frequency – one long standing contracting (pretty low on this side) § Relatedness – directly related, the contract is the exact thing being sued on o This case is a lot like Hess where a single tort was enough for assertion of specific jurisdiction § Here: a single contract within the state is enough to subject yourself to jurisdiction on it o What if he signed in Oregon, then moved to California and continued paying premiums from there? § still isolated and casual and still highly related so seems like this too would be a yes. § but... it was up to Π to move to CA, ins. co. had no control over contract being related to CA Hanson v. Denckla (1958) p.

was not capable of attachment in DE and that they did not have sufficient contract with DE to sustain the jurisdiction of that states courts § DE Courts: rejected Δs claims – asserted quasi in rem jurisdiction § US SC: reversed

Issue: Should the standard of fairness and substantial justice set forth in International Shoe Co. be held to govern actions in rem as well as in personam?
Holding: Yes. o Rule: all assertions of state curt jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.
Analysis o the court is asserting quasi-in-rem: using its jurisdiction over the stock to assert jurisdiction over the nonresident defendants § the stock has nothing to do with the litigation itself § attachment at outset of the litigation of property of defendant completely unrelated to claim ú Note: DE had statute saying that stock was property of state in which incorporated o Why does it make sense that ISC should extend to cases involving the presence of property? § asserting jurisdiction based on the presence of property is a fiction ú the presence of property has no significance unless it represents a contact o The Court does not hold that presence of property in the state is irrelevant § can provide evidence of contacts o Also: for pure in-rem actions, the presence of property in the state is enough § when the law suit relates to the property within the jurisdiction, it would make sense to assert jurisdiction (even if minimal contacts, highly related) o Here: § the stock is completely unrelated to the litigation and does not suggest contacts that would meet the other tests for jurisdiction – thus no jurisdiction o Re-Evaluation of Harris v. Balk § isolated, contact, likely not cause à no grounds for jurisdiction o What about real property? § if law suit has nothing to do with the land, then probably still do not have jurisdiction § might be sufficient if even though completely unrelated, totally continuous and systematic ú ie: deriving income off a farm that you own but do not work it yourself 3. Specific Jurisdiction

World-Wide Volkswagen Corp. v. Woodsen (1980) p.

Facts: o Robinson’s bough Audi from Seaway Volkswagen in NY – driving it through Oklahoma, car was stuck causing a fire which severely burned mother and 2 children o R’s brought a products-liability action in DC for County Creek, Oklahoma § Volkswagen challenged Okla. from exercising in personam jurisdiction § When Okla. S.C. denied writ, appealed to US S.C.
Issue: In personam jurisdiction?
Holding: No. o Foreseeability alone is not a sufficient benchmark under the due process clause. o Rule: It is the defendant’s conduct and connection with the forum State that determine whether he should reasonable anticipate being haled into court there.
Analysis: o Volkswagen carried on no activity whatsoever in the state § R: argues that because could have foreseen the vehicle would travel there, should be subject to litigation there o Due Process Clause is not violated if forum state asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state o Note: the manufacturer of the product (in this case Audi) will be subject to suit where the product cause injury § issue comes in with those who precede and follow the manufacturer (ie Word-Wide) 02/05/ Burger King Corp. v. Rudzewicz (1985) p.
Facts: o Rudzewicz and MacShara opened a Burger King Franchise in Drayton Plains, Michigan § in the course of opening, purchased supplies from BK Miami, went to training there, and negotiated with Miami Headquarters o R and M fell behind in rent payments, BK first negotiated then sued in FL fed. District Court (invoking diversity and trademark jurisdiction) § R and M challenged based on personal jurisdiction, DC entered judgment against them § Circuit Court: Reversed § BK appealed to US SC - Reversed
Issue: Was there fair warning that particular activity may subject them to the jurisdiction of a foreign sovereign?

o California Superior Court (the state trial court): found that it was not unreasonable that Asahi should defend claims of defect on international scale § Asahi appeals to US S.C. à Reversed.

Issue: Does mere awareness that the components the defendant manufactured, sold, and delivered outside the US would reach the forum State in the stream of commerce constitute minimum contacts?
Holding: No. Not reasonable. o More care should be given in asserting jurisdiction in the international context. § heavy burden on Δ, little interest for state of adjudicate– perfect anti- reasonableness argument
Analysis o World-Wide: a consumer’s unilateral act of bringing defendant’s product into the forum State is an insufficient constitutional basis for personal jurisdiction over the defendant o also looked into whether it would be reasonable and fair o Sales: Asahis à Cheng Shen à Honda à Zurcher § Cheng Shen affidavit: Asahi is aware that the parts they make are incorporated in tires that will ultimately go into US and into CA o Long Arm Statute: asserts limit to the extent of the Constitution and thus apply the same test o 2 Part Tests (1) Minimum Contacts/ Purposeful Availment ú The “substantial connection” between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State” – this is not court holding (4/9 votes) ú Stream of Commerce position - maybe (2) Reasonableness (Fair Play and Substantial Justice) ú court determines that the burden on this case would be severe (this is the holding) Should we have separate technology review standards or should we adopt technology neutral internet standards? Blue Note Case:
name of NY Jazz Club and Record Label – trademark holder
Columbia, Missouri – also opened a Blue Note o claimed trademark violation o sued in NYC – why? advertised on the internet, links to TicketMaster etc § Court found no jurisdiction Zippo Case
CA company provided information over internet, subscription service

o provided information to individuals in PA o Zippo Mfg. in PA sued in PA for trademark infringement § Court determined that there was personal jurisdiction ú here, there is a direct service to paying subscribers as opposed to Blue Note which was just informational § Sliding Scale Test (mentioned in Pavlovich) 02/07/ Most Frequently Cited Test for Internet Cases: Sliding Scale

most often cited from Zippo Case
refers to the degree of interactiveness of the website o more analogous to a store front Palovich v. Superior Court (2002) p.
Facts o Palovich operated a website that provided DeCSS program source code along with other information § Palovich started the website while he was a student at Purdue in Indiana § now resides in Texas and is president of a technology consulting company there o The Code of the unencryption software contained some of the algorithms of the CSS software § this is copyright infringement § also allows them to get at the encrypted content o DCD CAA, owner of CSS technology, brought suit against Palovich in CA § CA court exercised jurisdiction over Palovich § US SC reverses
Issue: Does CA have personal jurisdiction?
Holding: No. o Look to see if you can attribute local harm to the activities of the non-resident defendant.
Analysis o Argument for asserting personal jurisdiction: § because he targeted businesses, should be subject to jurisdiction § applied Calder v. Jones (defamation case) effects test ú where you commit an intentional tort, and you know the effects will be localized in one area, may provide a basis for personal jurisdiction ú Key: intentional torts, intended effects § Arguing that Δ knew he was making it easier to obtain pirated information and thus should have known CA residents would be harmed o Zippo Case

Notes: o must arise out of federal law – does not apply to diversity jurisdiction o how could it be that both A and B are true § extending minimal contacts to the national level in the international realm § contacts with one state may be insufficient, but enough contacts with states as a whole Burnham v. Superior Court (1990) p.
Facts o Dennis Burnham was in the process of divorcing his wife Mrs. Burnham – she was going to CA and there was an understanding that she would file in CA for irreconcilable differences § he filed suit in NJ state court where they had lived but did not attempt to serve process to her § she brought suit for divorce in CA state court in Jan. o Late Jan. Mr. B visited CA o a business trip and then visited his children – took one to San Fran for the weekend and upon returning to Mrs. B’s house was served with CA court summons and a copy of the divorce petition § Mr. B made special appearance in CA Superior Court to quash service of process on the ground that CA lacked personal jurisdiction: motion denied § CA Court of Appeals: denied mandamus relief § US SC granted cert: affirmed
Issue: Does the Due Process Clause of the 14 th Amendment deny CA courts jurisdiction over a nonresident who was personally served with process while temporarily in that State, in a suit unrelated to his activities there?
Holding: No. o Rule: 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.”
Analysis: o Why is he subject to personal jurisdiction in CA? § Pennoyer v. Neff – within state’s borders, this is the traditional basis for asserting jurisdiction o Husband’s Argument: § Shaffer v. Heitner – “We therefore conclude that all assertions of state court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny” ú he claims that after ISC physical presence is not only unnecessary, also insufficient § contacts with the state are isolated and casual and unrelated to the case at hand § Basic Contact:

ú ISC: minimum contacts for non-residents, physical presence not necessary ú Shaffer: physical presence insufficient, need minimal contacts o No majority opinion § if there are no minimum contacts with the state, how is there due process? § Scalia ú Originalism: from the P.O.V. of original intent, this is what the Constitution mean ú Traditionalism: since that time, personal service is most common way of asserting PJ

if what we were doing was bad, would have fallen out of favor § Brennan: says that it is all about minimum contacts, but physical presence in the state usually establishes minimum contacts with the state ú business – states enforcing contracts, law enforcement protects, etc... o because no majority à status quo continues (and personal service of process remains sufficient) Siemer:
physical presence is only sufficient for individuals, not corporations
can’t serve physical process to a corporate agent – non-resident corporations must meet minimum contacts

Jurisdiction in Civil Procedure: Understanding Personal Jurisdiction and Minimum Contacts, Study notes of Commercial Law

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