Wed., Sep. 26

The Pennoyer Framework

two big problems with the Pennoyer framework

Neff, a domiciliary of California, enters Oregon, kills Mitchell’s family, and returns to California Neff owns no property in Oregon Mitchell sues Neff in Oregon state court for wrongful death NO PJ (also a problem for past acts of a corporation in a state)

also how do you determine whether a corporation is present within a state other than its state of incorporation to subject it to in personam PJ not a problem for individuals, because they have bodies

reliance on legal fictions that created a continued presence that could be tagged in the state (an agent for service of process)

- the D Corp., incorporated in California, wishes to do business 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?

- the D Corp., incorporated in California, wishes to do business in Oregon - Oregon takes doing business 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?

but these statutes were subject to constitutional limits the Privileges and Immunities Clause and the Commerce Clause

don’t worry about the details of why these statutes could not completely solve the problem just know they couldn’t

that made a new theory of PJ necessary

a theory of corporate presence also arose under the Pennoyer framework

- 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?

- 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 -PJ under a Pennoyer theory?

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

plaintiff? defendant? cause of action? method of service?

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

failure to state a claim. interstate commerce argument against taxes failure to state a claim? interstate commerce argument against taxes? due process argument against taxes?

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?

what were Int’l Shoe’s activities in Wash.?

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

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.

McGee v. Int’l Life Ins. Co. (US 1957)

P? D? before what court? cause of action?

what were D’s contacts with Cal.?

how can there be PJ on the basis of so few contacts?

Turning to this case we think it apparent that the Due Process Clause did not preclude the California court from entering a judgment binding on respondent. It is sufficient for purposes of due process that the suit was based on a contract which had substantial connection with that State. The contract was delivered in California, the premiums were mailed from there and the insured was a resident of that State when he died.

- D (a TX corp.) enters into an insurance contract with P (a TX domiciliary) in TX. - after paying some premiums, P moves to CA and continues paying the premiums from there. - PJ over D in CA for breach of the contract?

It cannot be denied that California has a manifest interest in providing effective means of redress for its residents when their insurers refuse to pay claims. These residents would be at a severe disadvantage if they were forced to follow the insurance company to a distant State in order to hold it legally accountable. When claims were small or moderate individual claimants frequently could not afford the cost of bringing an action in a foreign forum - thus in effect making the company judgment proof. Often the crucial witnesses - as here on the company's defense of suicide - will be found in the insured's locality. Of course there may be inconvenience to the insurer if it is held amenable to suit in California where it had this contract but certainly nothing which amounts to a denial of due process.

Int’l Shoe theory of power v Int’l Shoe theory of power v. convenience/reasonableness (or “McGee factors”)