Wed., Sept. 21

PERSONAL JURISDICTION IN STATE COURT

Amendment XIV. Section 1.  . . . nor shall any State deprive any person of life, liberty, or property, without due process of law…

The Pennoyer Framework

in personam – source of PJ is presence of D at initiation of suit (NOT at time of event being adjudicated) tagging

in rem – source of PJ is presence of property at initiation of suit suit concerns ownership of property (e.g. quiet title action) binding upon all possible claimants

quasi in rem two types: 1) source of PJ is D’s property in state at initiation of suit, but suit does not concern ownership of property although if P wins, D’s property may be used to execute judgment

2) suit concerns ownership of property (e. g 2) suit concerns ownership of property (e.g. quiet title action), BUT binding only on certain named parties

Art IV, § 1. Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.

28 U.S.C. § 1738. - State and Territorial statutes and judicial proceedings; full faith and credit ... The records and judicial proceedings of any court of any such State, Territory or Possession, or copies thereof, shall be proved or admitted in other courts within the United States and its Territories and Possessions by the attestation of the clerk and seal of the court annexed, if a seal exists, together with a certificate of a judge of the court that the said attestation is in proper form. Such Acts, records and judicial proceedings or copies thereof, so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.

Art. VI This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.

the Pennoyer framework in action

§ 78. Individual Voluntarily Within The State A state can exercise through its courts jurisdiction over an individual voluntarily within its territory whether he is permanently or only temporarily there.

§ 101. Jurisdiction Over Land A state can exercise through its courts jurisdiction over land situated within the territory of the state, although a person owning or claiming an interest in the land is not personally subject to the jurisdiction of the state.

- Mitchell, an Oregon resident, brings an action against Neff in Oregon state court concerning $253.14 in legal fees that were incurred in Alaska. - Neff resides in California. - The Oregon state court attaches property in Oregon owned by Neff worth $300 at the beginning of the suit.

- Same as above except, the personal jurisdictional basis for the suit is $200 property in Oregon owned by Neff. - Neff defaults. - The property is sold and the money given to Mitchell. - Mitchell then brings a suit on the Oregon judgment in California state court to recover the remaining $53.14. - Service on Neff is in-hand on California. - What result?

- Same as the above, except Mitchell brings a suit in California state court to recover the remaining $53.14. - The suit is not to enforce the Oregon judgment but is a new suit on the merits. - Is Mitchell claim precluded?

- Mitchell lures Neff to Oregon with a story that Neff has won a contest. - While he is in Oregon, Neff is served for a suit brought by Mitchell in Oregon state court concerning unpaid lawyers fees. Neff chooses to default. - Under Oregon law, someone can be submitted to personal jurisdiction on the basis of tagging in the state even when the tagging is the result of fraudulent inducement. - Mitchell then brings a suit in California state court to execute the Oregon judgment. - Under California law someone cannot be submitted to personal jurisdiction on the basis of tagging in the state when the tagging is the result of fraudulent inducement. - Neff argues that the earlier Oregon judgment is void. - What result?

Full Faith and Credit: The recognizing jurisdiction must give the judgment the same preclusive effect it would have in the rendering jurisdiction’s courts. e.g. a California court must give the Oregon judgment the same preclusive effect it would have in Oregon state court.

Mitchell sues Neff in Oregon state court Mitchell sues Neff in Oregon state court. Neff has no connection to the state but does not want to default. He appears solely for the purpose of challenging personal jurisdiction. May the Oregon court nevertheless take Neff's presence (including through his lawyer) to create in personam jurisdiction?

special appearance

- Mitchell sues Neff in Oregon state court - Mitchell sues Neff in Oregon state court. - Neff has no connection to the state but does not want to default. - Oregon allows special appearances. - Neff appears for the purpose of challenging personal jurisdiction but also adds the defense of failure to state a claim. - What result?

- Mitchell brings an action against Neff in Oregon state court concerning $253.14 in legal fees. - The personal jurisdictional basis for the suit is $200 property in Oregon owned by Neff. - Neff appears, but solely to litigate liability up to the value of the property attached. - May the Oregon court nevertheless take Neff's presence (including through his lawyer) to create in personam jurisdiction?

limited appearance

P(NY) sues D(Germany) in federal court in NY under German law concerning a brawl they got into in Germany. P asks for $80,000 in damages. The source of PJ is $50,000 in a bank account D has in NYC. Is there SMJ under 1332(a)?

- Mitchell has Neff tagged in Ore - Mitchell has Neff tagged in Ore. while he is there for a business trip. Mitchell’s suit is in Ore. state ct and concerns unpaid lawyers fees. Neff appears to litigate the merits. - While Neff is there Pennoyer has him served in connection with another unrelated suit, brought in Ore. state ct - PJ?

- Neff is domiciled in Oregon, but is on an extended trip in California. - Mitchell sues Neff in Oregon state court for unpaid lawyers fees incurred in Alaska. - He has Neff served in California. - Neff defaults. - Mitchell then brings a suit in California state court to execute the Oregon judgment. - Neff collaterally attacks the judgment. - What result?

- Neff is domiciled in California, but is spending the summer residing in Oregon. - Mitchell sues Neff in Oregon state court for unpaid lawyers fees incurred in Alaska. - He has Neff served in California, while he was there for a brief trip home. - Neff defaults. - Mitchell then brings a suit in California state court to execute the Oregon judgment. - Neff collaterally attacks the judgment. - What result?

corporations

- the D Corp., incorporated in California, has an agent go to Oregon where he sells a product to P - the product harms P - P seeks to sue the D Corp. in Oregon state court - is there PJ?

- would it be enough that P has the CEO of the D Corp. tagged in Oregon?

- the D Corp., incorporated in California, wishes to sell a product in Oregon - to do so, Oregon requires the D Corp. to appoint the Sect. of State of Oregon as its agent for service of process - the D Corp. does - P is harmed by a D Corp. product and sues the D Corp in Oregon state court, serving the Sect. of State of Oregon - is there PJ?

FRCP 4(h) Serving a Corporation, Partnership, or Association FRCP 4(h) Serving a Corporation, Partnership, or Association. Unless federal law provides otherwise or the defendant’s waiver has been filed, a domestic or foreign corporation, or a partnership or other unincorporated association that is subject to suit under a common name, must be served: (1) in a judicial district of the United States:     (A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or     (B) by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and — if the agent is one authorized by statute and the statute so requires — by also mailing a copy of each to the defendant...

- the D Corp., incorporated in California, wishes to sell a product in Oregon - Oregon takes selling products in Oregon to constitute appointment of the Sect. of State of Oregon as its agent for service of process - P is harmed by a D Corp. product and sues the D Corp in Oregon state court, serving the Sect. of State of Oregon - is there PJ?

- The Neff Corp. is incorporated and has its principal place of business in California. - But it does substantial business in Oregon, selling close to 3 million pairs of shoes a year. It also has 8 employees in Oregon - It has not appointed an agent for service of process, nor does Oregon have a statute claiming that by doing business in the state an agent for service is impliedly appointed. - Mitchell sues the Neff Corp. in Oregon state court for breach of contract (the shoes he bought in Oregon fell apart). Is there PJ under a Pennoyer theory?

same as previous, except Mitchell’s cause of action in Oregon state court concerns shoes he bought in Nevada, wore in Nevada and fell apart in Nevada

- The Neff Corp. is incorporated and has its principal place of business in California. - It used to do substantial business in Oregon, selling close to 3 million pairs of shoes a year. It also had 8 employees in Oregon - Mitchell sues the Neff Corp. in Oregon state court for breach of contract (the shoes he bought in Oregon during the time the Neff Corp. was doing business there fell apart). - But the Neff Corp. no longer has a presence in Oregon. Is there PJ under a Pennoyer theory?

International Shoe v. Washington (U.S. 1945)

Appellant appeared specially before the office of unemployment, and moved to set aside the order and notice of assessment on the ground that the service upon appellant's salesman was not proper service upon appellant; that appellant was not a corporation of the State of Washington, and was not doing business within the state; that it had no agent within the state upon whom service could be made; and that appellant is not an employer, and does not furnish employment within the meaning of the statute…. Appellant in each of these courts assailed the statute as applied, as a violation of the due process clause of the Fourteenth Amendment, and as imposing a constitutionally prohibited burden on interstate commerce.

Section 8. The Congress shall have power to… regulate commerce with foreign nations, and among the several states, and with the Indian tribes; …constitute tribunals inferior to the Supreme Court

Appellant's argument, renewed here, that the statute imposes an unconstitutional burden on interstate commerce need not detain us. For 53 Stat. 1391, 26 U.S.C. § 1606(a) provides that No person required under a State law to make payments to an unemployment fund shall be relieved from compliance therewith on the ground that he is engaged in interstate or foreign commerce, or that the State law does not distinguish between employees engaged in interstate or foreign commerce and those engaged in intrastate commerce. It is no longer debatable that Congress, in the exercise of the commerce power, may authorize the states, in specified ways, to regulate interstate commerce or impose burdens upon it.

notice?

We are likewise unable to conclude that the service of the process within the state upon an agent whose activities establish appellant's "presence" there was not sufficient notice of the suit, or that the suit was so unrelated to those activities as to make the agent an inappropriate vehicle for communicating the notice. It is enough that appellant has established such contacts with the state that the particular form of substituted service adopted there gives reasonable assurance that the notice will be actual.

PJ?

Historically, the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence, his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, 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 "traditional notions of fair play and substantial justice."

To say that the corporation is so far "present" there as to satisfy due process requirements, for purposes of taxation or the maintenance of suits against it in the courts of the state, is to beg the question to be decided. For the terms "present" or "presence" are used merely to symbolize those activities of the corporation's agent within the state which courts will deem to be sufficient to satisfy the demands of due process. Those demands may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there. An "estimate of the inconveniences" which would result to the corporation from a trial away from its "home" or principal place of business is relevant in this connection.

“reasonableness” including convenience, e. g “reasonableness” including convenience, e.g. burden on D of going to forum state

The D Corp. has its headquarters in Camden, New Jersey, a few miles from the state court in Pennsylvania. It has no contacts with Pa. but it would be very convenient for the D Corp. to litigate there. Is there PJ of the D Corp. in Pa. state court?

New Theory of Personal Jurisdictional Power

But to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations; and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.

recharacterization of cases under Pennoyer framework in the light of the new power theory

‘Presence' in the state in this sense has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or authorization to an agent to accept service of process has been given.

Conversely it has been generally recognized that the casual presence of the corporate agent or even his conduct of single or isolated items of activities in a state in the corporation's behalf are not enough to subject it to suit on causes of action unconnected with the activities there.

While it has been held in cases on which appellant relies that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity, there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.

Finally, although the commission of some single or occasional acts of the corporate agent in a state sufficient to impose an obligation or liability on the corporation has not been thought to confer upon the state authority to enforce it, other such acts, because of their nature and quality and the circumstances of their commission, may be deemed sufficient to render the corporation liable to suit.

True, some of the decisions holding the corporation amenable to suit have been supported by resort to the legal fiction that it has given its consent to service and suit, consent being implied from its presence in the state through the acts of its authorized agents. But more realistically it may be said that those authorized acts were of such a nature as to justify the fiction.

activities are continuous and systematic & give rise to liabilities sued upon

casual presence, single isolated activities - suit unconnected with activities in state

substantial continuous activity - suit concerning activities entirely distinct from those in the state

single or occasional acts had nature and quality making corporation amenable to suit - related to cause of action

specific jurisdiction pj only for specific causes of action the activities giving rise to pj include those giving rise to the cause of action

D (a domiciliary of Cal. ) enters Va. and batters P a Va D (a domiciliary of Cal.) enters Va. and batters P a Va. state court has specific pj over D for the battery not for P’s action against D for breach of a contract negotiated and signed in Cal. with performance to be in Cal.

compare general jurisdiction a Cal compare general jurisdiction a Cal. state court has general pj over D (by virtue of Cal. being D’s domicile) D can be sued on any cause of action in Cal. State court

something in between…? category jurisdiction: PJ for a category of (not all) causes of action, even when nothing about the transaction giving rise to the cause of action occurred in the forum state

Black’s opinion?

Black: There is a strong emotional appeal in the words "fair play," "justice," and "reasonableness." But they were not chosen by those who wrote the original Constitution or the Fourteenth Amendment as a measuring rod for this Court to use in invalidating State or Federal laws passed by elected legislative representatives. No one, not even those who most feared a democratic government, ever formally proposed that courts should be given power to invalidate legislation under any such elastic standards. … For application of this natural law concept, whether under the terms "reasonableness," "justice," or "fair play," makes judges the supreme arbiters of the country's laws and practices. This result, I believe, alters the form of government our Constitution provides. I cannot agree.