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1 The Complaint Caption Allegation of Standing or Capacity Pre-Answer Motions Attacking The Complaint Lack of Standing or Capacity Components of Complaint Allegation of Constitutional Basis for Personal Jurisdiction Allegation of Subject Matter Jurisdiction Allegation of Venue Allegations of wrongful conduct by the defendant Lack of Personal Jurisdiction Lack of Subject Matter Jurisdiction Lack of Proper Venue Demurrer— Failure to State a Claim Motion to Strike 2 Prayer for Relief Jurisdiction Allegation Requirement: California Law The California Code of Civil Procedure does not require that a plaintiff allege that the court has the authority to exercise jurisdiction over the defendant. The matter is controlled by the United States Constitution. 3 Personal Jurisdiction: United States Constitution Amendment XIV. ***nor shall any State deprive any person of life, liberty or property, without due process of law; *** 4 Jurisdiction Allegation Requirement: Federal Law FRCP 8(a). (a) Claims for Relief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third- party claim, shall contain (I) a short and plain statement of the grounds upon which the court's jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it, (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks. Relief in the alternative or of several different types may be demanded. 5 8(a) statement of jurisdiction 6 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKHILL MANAGEMENT FUND, Plaintiff v. Case No. C-97-20322 DAVID SCHELLHASS, Complaint for Damages for Fraud An individual, Negligent Misrepresentation, 8(a) statement of personal Rescission, jurisdiction Defendant Breach of Contract; Breach of Fiduciary; and Constructive Trust and Accounting JURISDICTION 1. This Court has jurisdiction over the defendant because the actions of the defendant upon which this complaint is based, all took place in the Northern District of California.7 The Complaint Jurisdiction Allegation Requirement: Federal Law What does ―jurisdiction‖ mean? FRCP 8(a). (a) Claims for Relief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third- party claim, shall contain (I) a short and plain statement of the grounds upon which the court's jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it, (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks. Relief in the alternative or of several different types may be demanded. 8 Definition: “JURISDICTION”  In a very broad sense, “jurisdiction” means to have authority over. 9 Definition: “JURISDICTION”  Among other meanings, the word “jurisdiction” refers to the authority of a court to hear and decide a particular case. 10 The Complaint Functions of Complaint Components of Complaint Caption Allegation of Standing or Capacity Allegation of Personal Jurisdiction Allegation of Subject Matter Jurisdiction Allegation of Venue Allegations of wrongful conduct by the defendant Prayer for Relief 11 12 Definition: “Personal Jurisdiction”  “Personal jurisdiction” deals with the relationship the court must have to the defendant or to property that is controlled by the defendant before it can exercise its power to adjudicate a claim made by the plaintiff against the defendant or against the defendant‟s property. 13 Jurisdiction Over Persons or Things “Jurisdiction” is a court‟s power to impose its decision on the parties in a lawsuit. When a plaintiff decides to file a lawsuit against a defendant, in order for any judgment to be effective to force the defendant to comply with its terms, the plaintiff must file the lawsuit in a court which has “jurisdiction” over the person of the defendant. If title to property is the reason for the lawsuit, the plaintiff must file the lawsuit in a court which has “jurisdiction” over the property. 14 Common Law Bases for Jurisdiction over Persons or Things Initially, it was the law that a judgment was only enforceable if the sheriff of the court of the state in which the court was sitting took the defendant or the defendant‟s goods into custody. 15 Common Law Bases of Jurisdiction Thus, during the 1800‟s, jurisdiction was based on statutes and court rules which were based on the presence of persons or property involved in the action within the territorial boundaries of the tribunal. 16 THE THREE COMMON LAW BASES FOR JURISDICTION  IN PERSONAM –a personal judgment may be entered   against the defendant because the defendant is domiciled in the forum state or was present in the state at the time process was served or consented to personal jurisdiction IN REM –a judgment can be entered because the lawsuit is over ownership of property which is located in the forum state QUASI IN REM –a judgment can be entered against the defendant because the defendant, who would otherwise be subject to in personam jurisdiction, is not present but has some property in the forum state and jurisdiction is asserted over the property as a substitute for in personam jurisdiction 17 Common Law Bases-In Personam   Traditionally, in personam jurisdiction existed when the defendant was personally served with process (a summons) while physically present within the court‟s territory or while domiciled within the state. The defendant could also consent to in personam jurisdiction. 18 Common Law Bases-In Personam   Traditionally, in personam jurisdiction existed when the defendant was personally served with process (a summons) while physically present within the court‟s territory or while domiciled within the state. The defendant could also consent to in personam jurisdiction. 19 Domicile Domicile refers to the place where a person maintains his or her permanent home, which, once established in a particular jurisdiction, persists until a new permanent home is established elsewhere. 20 Domicile physical residence Intent to remain indefinitely Domicile refers to the place where a person maintains his or her permanent home, which, once established in a particular jurisdiction, persists until a new permanent home is established elsewhere. 21 Domicile physical residence Intent to remain indefinitely Domicile refers to the place where a person maintains his or her permanent home, which, once established in a particular jurisdiction, persists until a new permanent home is established residence elsewhere. Residence The place where a person happens to be living at a given time. 22 Domicile v. Residence   Domicile and residence usually will coincide. When the defendant maintains more than one residence, the question of which one is the domicile depends on such factors as where the defendant:      works votes registers automobiles pays taxes Believes is home 23 Personal Jurisdiction Issue: Can the courts of a particular state require a defendant to obey its decisions or orders? 24 25 State Line summons If a person breaches a contract made in this state, the aggrieved party may file a law suit in the Courts of this state. If the defendant is located outside of the State at the time the lawsuit is commenced, the defendant may be personally served in whatever state the defendant might be located. 26 In the Oregon Superior Court Plaintiff Defendant Mitchell November, 1865. An action for breach on contract to pay $253.14 attorney’s fees. 27 Long Arm Statute In the Oregon Superior Court Plaintiff Defendant Mitchell Neff was served by publication. “The Code of Oregon provided for service by publication when an action was brought against an absent non-resident, who had property within the State. It allowed the attachment of property when the action was for the recovery of money or damages.” 28 Neff Default Judgment In the Oregon Superior Court Plaintiff Defendant Mitchell defaulted (did not answer) On February 19, 1866 Default Judgment entered in favor of Mitchell against Neff. In March, 1866, Neff’s application for a land grant was approved and title to the tract of land was granted to him. In June, 1866, Mitchell obtained a writ of execution. 29 Sheriff’s Deed To Mitchell Mitchell Deed To Pennoyer Writ Of Execution Default Judgment 7, 1866, pursuant to the writ of execution, Neff’s land was transferred by Sheriff’s deed to Mitchell in satisfaction of the judgment for unpaid attorney’s fees. 10, 1866, Mitchell (for unstated consideration) deeded the Neff land to Sylvester Pennoyer. 30 On August On August In the Oregon Superior Court Plaintiff Defendant Mitchell You will learn in “Real Property” that to have clear title you must always find your grantor as the next previous grantee, with no intervening claims. If Pennoyer had searched the record he would have found: Government grants to Neff Neff grants to Sheriff [forced sale] Sheriff grants to Mitchell Mitchell grant to Pennoyer So it appeared to Pennoyer that he had a clear title. 31 Sheriff’s Deed To Mitchell Mitchell Deed To Pennoyer Writ Of Execution Was the Mitchell judgment, under which the defendant traces his title, a valid judgment? No. The affidavit used to prove service was defective, therefore the judgment was invalid. Judgment in favor of Neff. NEW LAWSUIT Oregon Federal Court Neff 32 ISSUE: HOLDING: Default Judgment In the Oregon Superior Court Plaintiff Defendant Mitchell Sheriff’s Deed To Mitchell Mitchell Deed To Pennoyer Writ Of Execution Judgment Setting Aside deed Oregon Superior Court Plaintiff Mitchell Defendant Oregon Federal Court Neff 33 Sheriff’s Deed To Mitchell Mitchell Deed To Pennoyer Writ Of Execution Circuit Court of Appeals Judgment Setting Aside deed Oregon Superior Court Plaintiff Mitchell Defendant Oregon Federal Court Neff 34 IN THE CIRCUIT COURT OF APPEALS FOR THE DISTRICT OF OREGON  APPELLANT (Pennoyer): I lawfully acquired the land from a person (Mitchell) who got it in execution of a judgment. The judgment was entered in accordance with Oregon law. The judgment cut off any claim by Neff to the property. Therefore, the deed under which I hold the land is valid and superior to the claim by Neff. 35 IN THE CIRCUIT COURT OF APPEALS FOR THE DISTRICT OF OREGON  RESPONDENT (Neff):   1. There was a defect in the affidavit upon which the order allowing service by publication was based. 2. The proof of service was by the editor, when the statute requires that it be by the printer or his foreman or his principal clerk. 36 IN THE CIRCUIT COURT OF APPEALS FOR THE DISTRICT OF OREGON  HELD: The Mitchell judgment was invalid due to defects in the affidavit upon which the order of publication was obtained and in the affidavit by which the publication was proved. Therefore, the judgment in favor of Neff is affirmed. 37 Sheriff’s Deed To Mitchell Mitchell Deed To Pennoyer Writ Of Execution Affirmed Circuit Court of Appeals Judgment Setting Aside deed Oregon Superior Court Plaintiff Mitchell Defendant Oregon Federal Court Neff 38 In the Supreme Court of the United States Pennoyer, Petitioner v. Neff, Respondent 39 ISSUE: Was the judgment under which Petitioner acquired the land a valid judgment notwithstanding the objections made by Respondent? Sheriff’s Deed To Mitchell Mitchell Deed To Pennoyer Writ Of Execution United States Supreme Court Affirmed Circuit Court of Appeals Judgment Setting Aside deed Oregon Superior Court Plaintiff Mitchell Defendant Oregon Federal Court Neff 40 “The majority are of the opinion that inasmuch as the statute requires, for an order of publication, that certain facts shall appear by affidavit to the satisfaction of the court or judge, defects in such affidavit can only by taken advantage of on appeal, or by some other direct proceeding, and cannot be urged to impeach the judgment collaterally.” 41 Translation: “Neff bases his objection to Pennoyer‟s deed on the fact that there were defects in Mitchell‟s affidavit upon which Mitchell obtained a default judgment.” “Neff is legally foreclosed from making such a claim because he did not appeal!” He brought a new lawsuit in which he makes those claims. Such claims cannot be made (collaterally) in a new law suit.” 42 Direct Attack v. Collateral Attack DIRECT ATTACK v. In the Trial Court of State A Plaintiff wins Plaintiff v. Defendant 43 Direct Attack v. Collateral Attack DIRECT ATTACK In the Court of Appeals for State A Appellant Respondent (Defendant v. (Plaintiff below) below) The judgment in favor of Plaintiff is erroneous Plaintiff wins Plaintiff In the Trial Court of State A v. Defendant 44 Direct Attack v. Collateral Attack DIRECT ATTACK In the Court of Appeals for State A Appellant Respondent (Defendant v. (Plaintiff below) below) The judgment in favor of Plaintiff is erroneous Plaintiff wins Plaintiff COLLATERAL ATTACK In the Trial Court of State A v. Defendant In the Trial Court of State A Plaintiff wins Plaintiff v. Defendant 45 Direct Attack v. Collateral Attack DIRECT ATTACK In the Court of Appeals for State A Appellant Respondent (Defendant v. (Plaintiff below) below) The judgment in favor of Plaintiff is erroneous COLLATERAL ATTACK In the Trial Court of State B or C or Federal Court Defendant v. Plaintiff The judgment in favor of Plaintiff is invalid In the Trial Court of State A Plaintiff wins Plaintiff In the Trial Court of State A Plaintiff wins v. Defendant Plaintiff v. Defendant 46 Direct Attack v. Collateral Attack DIRECT ATTACK In the Court of Appeals for State A Appellant Respondent (Defendant v. (Plaintiff below) below) The judgment in favor of Plaintiff is erroneous COLLATERAL ATTACK In the Trial Court of State B or C or Federal Court Defendant v. Plaintiff The judgment in favor of Plaintiff is invalid In the Trial Court of State A Plaintiff wins Plaintiff In the Trial Court of State A Plaintiff wins v. Defendant Plaintiff v. Defendant 47 Neff did not Appeal Neff did not appeal the judgment obtained by Mitchell. The insufficiency of the affidavit is a question which Neff could have raised on direct appeal. It was not. Therefore, the Circuit Court was in error in relying upon the defective affidavit as the basis for its decision. 48 Sheriff’s Deed To Mitchell Mitchell Deed To Pennoyer Writ Of Execution Instead of making a direct attack by appealing the judgment, Neff made a collateral attack by filing a new law suit which attacked the judgment Default Judgment In the Oregon Superior Court Plaintiff Defendant Mitchell Oregon Federal Court Neff 49 Second alleged defect….. “As to the second ground for defect, the majority of the court are also of the opinion that the provision of the statue requiring proof of publication in a newspaper to be made by the „affidavit of the printer, or his foreman, or his principal clerk,‟ is satisfied when the affidavit is made by the editor of the paper.” 50 Is Neff out of luck? “If, therefore, we were confined to the rulings of the court below upon the defects in the affidavits mentioned, we would be unable to uphold its decision [in favor of Neff].” But Neff raised a third ground: the judgment was void due to lack of personal service and the land could only be subject to forfeiture in an in rem action. If these arguments are valid, we can sustain the court of appeals even if we disagree with the reason. 51 The Nature of State Power  Every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory. 52  IT THEREFORE FOLLOWS THAT: No State can exercise direct jurisdiction and authority over person or property without (outside of) its territory. 53 FULL FAITH AND CREDIT CLAUSE ARTICLE IV. Section 1. Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. . . . The Constitution of the United States of America We the people of the United States in order to form a more perfect union, establish justice, promote the general welfare, provide for the common defense and to secure the blessings of liberty … 54 Full Faith and Credit The Constitution requires the courts of the several States to give “Full faith and credit” to the judgments of every other State. This applies only when the court rendering the judgment has jurisdiction of the parties and of the subject matter. 55 Due Process Violation The USSC held that the state judgment was void because Neff was not personally served with process while present in Oregon and the property which was the subject of the action had not been seized prior to judgment. 56 Neff Default Judgment In the Oregon Superior Court Plaintiff Defendant Mitchell defaulted (did not answer) On February 19, 1866 Default Judgment entered in favor of Mitchell against Neff. In March, 1866, Neff’s application for a land grant was approved and title to the tract of land was granted to him. In June, 1866, Mitchell obtained a writ of execution. 57 If no personal jurisdiction: Judgment not entitled to full faith and credit.  Therefore, since Oregon had no jurisdiction over Neff or his property (at the time jurisdiction attached) no other state or federal court had to give effect to the judgment under the Full Faith and Credit Clause of the Constitution. 58 14th AMENDMENT AMENDMENT XIV. “. . .nor shall any State deprive any person of life, liberty, or property, without due process of law. . .” The Constitution of the United States of America We the people of the United States in order to form a more perfect union, establish justice, promote the general welfare, provide for the common defense and to secure the blessings of liberty … 59 Fourteenth Amendment precludes judgments based on lack of personal jurisdiction  “Since the adoption of the Fourteenth Amendment to the Federal Constitution, the validity of such judgments [judgment rendered without a basis for personal jurisdiction] may be directly questioned, and their enforcement in the State resisted, on the ground that proceedings in a court of justice to determine the personal rights and obligations of parties over whom that court has not jurisdiction do not constitute due process of law.” 60 The evil of constructive notice  If an in personam judgment could be obtained without personal service, by mere publication, which would not be seen, such judgments would become instruments of fraud and oppression. 61 When is personal jurisdiction tested? The validity of a judgment depends upon the court having proper jurisdiction at the time the judgment is entered. 62 Subject to collateral attack Under the 14th Amendment, the validity of judgments may be collaterally attacked, questioned and enforcement resisted on the ground that proceedings by a court against person over whom that court has no jurisdiction is a violation of the due process clause. 63 Pennoyer v. Neff 95 U.S. 714 (1877) The 14th Amendment limits the ability of courts in one state to compel defendants in another state to defend a law suit. A forum state may exercise in personam jurisdiction over a defendant in another state on the basis of citizenship in the forum state, presence in the forum state at the time of service of process or consent. A forum state may exercise in rem jurisdiction over property located within its borders. A forum state may exercise quasi in rem jurisdiction if the property is owned by the out-of state defendant at the inception of the lawsuit and if the property is brought within the jurisdiction of the court by attachment and notice. 64 HYPOTHETICAL CASE David of California promises to build a house for Paul on Paul‟s land in San Jose, in exchange for payment to David of $300,000 plus the cost of the materials. David collects $500,000 from Paul to purchase materials. After a year, David still had not started the construction. Paul demands his money back. David says that he put the money in an off-shore account and that the foreign bank has been nationalized and its assets frozen. Paul filed a lawsuit against David in a California court for conversion and breach of contract. Under the common law tests, does the California court have a basis for exercising personal jurisdiction over David? 65 HYPOTHTICAL CASE Donna of Texas promises to build a house for Paul on Paul‟s land in San Jose, in exchange for payment to Donna of $300,000 plus the cost of the materials. Donna collects $500,000 from Paul to purchase materials. Donna built the house and lives in it during the construction. One day Tom comes along and offers Donna $600,000 for the house. Donna agrees and signs a deed to Tom and then leaves for Nevada. A year later, Paul goes to the property to check on the progress of the construction. When he learns what happened, he demanded that Tom vacate the property. When Tom refuses, Paul files a lawsuit against Tom in a California court to quiet (establish) his title to the San Jose property. Does the California court have a basis for exercising jurisdiction over the property and Tom? 66 HYPOTHETICAL CASE In Nevada, Dan of Nevada promises to build a house for Paul on Paul‟s land in San Jose, in exchange for payment to Dan of $300,000 plus the cost of the materials. In Nevada Dan collects $500,000 from Paul to purchase materials. Dan does not build the house but absconds with the money. Paul cannot locate Dan, but does locate a bank account owned by Dan in Santa Clara which has $100,000 in it. Paul files a lawsuit against Dan in a California court and gets an order attaching the account. Paul proves that Dan owes him $500,000 but the Court questions whether it has jurisdiction to enter a judgment for anything other than for the $100,000. Under the common law bases for personal jurisdiction, what is the basis for jurisdiction of the California court? How much can Paul collect? 67 Question???? If the defendant left the state after being served with process while in the forum state, would due process allow the state to continue to exercise jurisdiction over the defendant? 68 Blackmer v. United States  284 U.S. 421 (1932) 69 Blackmer v. United States Blackmer was subpoenaed to appear and testify in a federal court. The subpoena was served on him in France. He did not appear. The trial court held him in contempt. Blackmer argued that the U.S. statute which authorized service of the subpoena on him in a foreign country was a violation of the sovereignty of France and of his rights under the 14th Amendment. 70 Blackmer v. United States HELD: A government has the right to exercise in personam jurisdiction over its citizens, even if they are located in a foreign country, because a citizen is bound to take notice of the laws which are applicable to him or her and to obey them. Thus, a statute which allows service of a subpoena in a foreign country is no violation of the sovereignty of the foreign government and Blackmer has no standing to invoke any such supposed right. 71 Milliken v. Meyer  311 U.S. 457 (1940); text p. 70 In Milliken, the USSC upheld allowing a state to exercise personal jurisdiction under a Wyoming statute that provided for personal jurisdiction based on service by publication or personal service in another state if a resident defendant had departed from the county of residence with the intent to delay or defraud their creditors or avoid service of a summons. 72 United States Supreme Court Reversed Domicile in Wyoming Sufficient for Personal jurisdiction Default Judgment The Wyoming Judgment is Invalid Wyoming Superior Court Plaintiff Defendant Milliken (Wyo) Colorado Superior Court Meyer (Wyo) 73 Milliken v. Meyer HELD: Domicile in the state is alone sufficient to bring an absent defendant within the reach of the state‟s jurisdiction for purposes of a personal judgment by means of appropriate substituted service. 74 Hypothetical Case Pete, who is domiciled in California, departed from California to roam the world. Pete never returned to California, but Pete also never acquired a new domicile by being physically present in any other state or country and having the intention to make that state or country Pete’s home indefinitely or permanently. Alberta, who is also domiciled in California, sued Pete in a California court to recover damages for personal injuries received in a automobile accident with Pete in Nevada, where Alberta and Pete were temporarily present. Pete was served with process in Arizona, where Pete was temporarily present, under a long-arm statute of California authorizing California to assert personal jurisdiction over citizens of California who are absent from the State. Discuss whether personal jurisdiction exists. 75 76 Adam v. Saenger  303 U.S. 59 (1938) 77 UNITED STATES SUPREME COURT Adams v. Saenger Adams Motion granted IN THE TEXAS SUPERIOR COURT IN THE CALIFORNIA SUPERIOR COURT Adams Order: Complaint Dismissed for failure To prosecute DEFAULT JUDGMENT ON CROSS-COMPLAINT Assignment of Judgment CROSS-COMPLAINT 78 Motion To dismiss Beaumont (Texas) Adams v. Saenger IN THE UNITED STATES SUPREME COURT Adams v. Saenger HELD: Beaumont by his voluntary act of demanding justice from the defendant submitted himself to the jurisdiction of the court. 79 Pennoyer was a rigid rule  Unless a person is domiciled there or consents to it, under Pennoyer in order to assert personal jurisdiction over a defendant the plaintiff had to serve process on the defendant in the forum state. 80 Pennoyer was a rigid rule If Patricia traveled to Oregon from Arizona to build a water pump for Dorothy, did a bad job of it and left Oregon and returned to Arizona, could Dorothy obtain personal jurisdiction over Patricia in Oregon under the Pennoyer theory? 81 Pennoyer was a rigid rule Suppose Patricia vacations in California and Dorothy finds out about it files a lawsuit and serves Patricia with process because of the Oregon breach of contract. Under the Pennoyer theory, does this suffice to justify in personam jurisdiction in California? 82 How did the Pennoyer rules apply to a company?  How would you apply the Pennoyer physical presence theory to corporations? 83 Extending Personal Jurisdiction Beyond the Boundary 84 KANE V. NEW JERSEY  242 U.S. 160 (1916) 85 KANE V. NEW JERSEY Welcome to New Jersey 86 Hess v. Pawloski  274 U.S. 352 (1927) 87 Mass. Superior Court Plaintiff Pawloski (Mass) Defendant 88 Mass Gen. Laws Stat. 1923, c. 431 § 2: Long Arm Statute “. . .[T]he operation by a nonresident of a motor vehicle on a public way in the commonwealth . . . shall be deemed equivalent to an appointment by such nonresident of the registrar or his successor in office, to be his true and lawful attorney upon whom may be served all lawful processes in any action. . .growing out of any accident or collision in which said nonresident may be involved while operating a motor vehicle on such a way, and said . . .operation shall be a signification of his agreement that any such process against him which is so served shall be of the same legal force and validity as if served on him personally. . .” 89 Mass Gen. Laws Stat. 1923, c. 431 § 2: “. . .Provided that notice of such service and a copy of the process are forthwith sent by registered mail by the plaintiff to the defendant, and the defendant's return receipt and the plaintiff‟s affidavit of compliance herewith are appended to the writ and entered with the declaration.” 90 Supreme Judicial Court of Mass. Pawloski (Penn) Motion To dismiss Mass. Superior Court Motion Denied Summons By Registered Mail 91 Plaintiff Pawloski (Mass) Hess v. Pawloski ISSUE RAISED ON APPEAL Supreme Judicial Court of Massachusetts Does a state statute that deems nonresident motorists to have appointed a state official as their agent for service of process in cases arising out of in-state accidents involving them violate their due process rights? 92 IN THE SUPREME JUDICIAL COURT OF MASS  HELD: Chapter 90 is a valid exercise of Mass‟s police power. Therefore, it is constitutional. The judgment of the trial court is AFFIRMED. The case is REMANDED for further proceedings consistent with this judgment. 93 Hess v. Pawloski Supreme Judicial Court of Mass. Affirmed Pawloski (Penn) Motion To dismiss Mass. Superior Court Motion Denied Summons By Registered Mail Defendant 94 Plaintiff Pawloski (Mass) Verdict for Plaintiff Mass. Superior Court Plaintiff Pawloski (Mass) Defendant 95 Hess v. Pawloski United States Supreme Court Affirmed Pawloski (Penn) Verdict for Plaintiff Mass. Superior Court Plaintiff Pawloski (Mass) Defendant Plaintiff in error v. Pawlowski, Defendant in error Issue: Does the Mass statute contravene the due process clause of the 14th Amend? 96 Hess, Hess v. Pawloski  HELD: No. It is true that under Pennoyer v. Neff we held that the process of one state cannot be used to summon a person who is not a citizen of the forum state. However, a state may make regulations to promote safety on its highways by residents and nonresidents. 97 Hess v. Pawloski  In Kane v. New Jersey we held that a state may exclude an out of state driver unless he or she appoints an agent for service of process. Therefore, given the limits of this statute, it is constitutionally permissible to consider that a driver has impliedly consented to personal jurisdiction. 98 Hess v. Pawloski  Notice that the statute provides that in addition to service upon the Registrar, a copy of the summons and complaint must be sent by registered mail to the defendant and there must be a return receipt. 99 Hess v. Pawloski  The decision reflects the USSC recognition of the character of automobiles: “Motor vehicles are dangerous machines. . .In the public interest the state may make and enforce regulations reasonably calculated to promote care on the part of all, residents and nonresidents alike, who use its highways. 100 International Shoe Co. v. Washington  326 U.S. 310 (1945) 101 International Shoe v. Washington International Shoe ( Del/Mo) manufactured shoes in several states Sold them through branches in several states No mfg or sales branch in Wash. 1113 salesmen in Washington controlled by manager in Mo. Salesmen solicited order using left shoe. Order shipped f.o.b. mfg. 102 International Shoe v. Washington The State of Wash. provided unemployment compensation to employees in the state. To defray the cost of the program, employers were required to contribute to a state fund based upon a percentage of the annual wages paid to employee. A commissioner was in charge of collecting the contribution. 103 International Shoe v. Washington Notice of delinquency could be personally served on an employer if found in the state or, if not found, it could be sent by registered mail to its last known address. If the contribution was not paid, Commissioner could collect the assessment by distraint (seizure). 104 Washington Superior Court Affirmed Company was properly served And is an “employer” Washington Unemployment Ins. Appeal Board Notice Of Assessment Washington Unemployment Ins Commission 105 IN THE WASHINGTON SUPERIOR COURT Service of Summons While present In the forum state The service upon The sales solicitor Was not proper Service on our corporation International Shoe International Shoe Is a Does not furnish Delaware corporation “employment” With its principal Within the meaning of Place of business That term under In Missouri Washington law International Shoe: Domicile “Therefore, there is no or Citizenship In the forum state basis for asserting personal Consent: Express jurisdiction under the or Implied such as International Shoe Through appointment test.” traditional Does not have an Of agent for service Of process Agent within the state Upon whom Service could be made 106 IN THE WASHINGTON SUPERIOR COURT Service of Summons While present In the forum state The service upon The sales solicitor Was not proper Service on our corporation International Shoe International Shoe Is a Does not furnish Delaware corporation “employment” With its principal Within the meaning of Place of business That term under In Missouri Washington law International Shoe: Domicile “Therefore, Washington‟s or Citizenship In the forum state assertion of personal Consent: Express jurisdiction violates the or Implied such as International Shoe Through appointment Due for service Process clause not have an Does of the Of agent Agent within the th Amendment.”Upon whom state Of process 14 Service could be made 107 IN THE WASHINGTON SUPERIOR COURT International Shoe Co. Petitioner v. The Commissioner Respondent The decision of the Commissioner is affirmed. “We believe that the regular and systematic solicitation of orders in the state by appellants salesmen results in a continuous flow of appellants product into the state sufficient to constitute doing business in the state. Therefore the judgment is affirmed.” 108 UNITED STATES SUPREME COURT The order imposing Unemployment Ins Tax is Affirmed. Washington Superior Court 109 UNITED STATES SUPREME COURT ISSUE: Does mere solicitation of orders for the purchase of goods within a state, to be accepted without the state and filled by shipment of the purchased goods interstate, render a corporationseller amenable to suit within the state under the 14th Amendment? 110 Constitution of UNITED STATES SUPREME The United States the of America COURT We the people of the United States in order the “The activities carried on in behalf of appellant in to form a more perfect union, State of Washington were, neither irregular or casual. establish justice, the general They were systematic and continuous . . . promote provide for welfare, the ***It is evident that these operations establish common defense and to secure the sufficient contacts or ties with the state of blessings of liberty … the forum to make it reasonable and just according to our traditional conception of fair play and substantial justice to permit the state to enforce the obligations which appellant has incurred there. Hence, we cannot say that the maintenance of the present suit in the State of Washington involves an unreasonable or undue procedure.” Text pp. 78-79. 111 UNITED STATES SUPREME COURT ...due process requires only that in order to subject a defendant to a judgment in personam, if that defendant is not present within the territory of the forum, the defendant have certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice... 112 Legal issues under the minimum contacts test    The enactment by the states of “longarm” statutes in reaction to the minimum contacts test The application of the minimum contacts test in particular categories of cases The status of the territorial rules of Pennoyer 113 Degree of Contact none single contact regular limited contact systematic continuous contact International Shoe v. Washington 114 115 CONSTITUTIONAL SCOPE OF JURISDICTION Defendant C Defendant A Constitutional scope of jurisdiction Defendant D Defendant B Exercise of personal jurisdiction unconstitutional 116 STATE STATUTE CONFERRING COURTS WITH JURISDICTION The courts of this State may exercise personal jurisdiction over any person who is present in this State at the time of service of process upon that person. . . D O “present when served M with process. . .” I C I L E CONSENT Exercise of personal jurisdiction unconstitutional 117 LONG-ARM STATUTE breaches a contract in this state The courts of this State may exercise personal jurisdiction over any person who is located outside of this State, but who is alleged to have committed a negligent act in this State, or to have breached a contract in this State commits a negligent act in this state transacts business in this state Example of long-arm provision granting part of the constitutional permissible jurisdiction 118 LONG-ARM STATUTE The courts of this State may exercise personal jurisdiction over any person who is located outside of this State, but who transacts business in this state. . . “transacts business in this state. . .” transacts business in this state but claim arises out of transacting business in Exercise of personal jurisdiction unconstitutional another state 119 LONG-ARM STATUTE “present when served with process. . .” Was present in this state when served with process but claim arises out of transacting Exercise of personal jurisdiction in another state business unconstitutional 120 California, for example authorizes its courts to exercise jurisdiction “on any basis not inconsistent with the Constitution of the State or of the United States.” CCP 410.10 Constitutional scope of jurisdiction The Courts of this State having subject matter jurisdiction may exercise personal jurisdiction on any basis not inconsistent with the Constitution of the State or of the United States. Exercise of personal jurisdiction unconstitutional 121 California, for example authorizes its courts to exercise jurisdiction “on any basis not inconsistent with the Constitution of the State or of the United States.” CCP 410.10 Constitutional scope of jurisdiction California Code of Civil Procedure 410.10 Exercise of personal jurisdiction unconstitutional 122 Gray v. American Radiator & Standard Sanitary Corp. 22 Ill. 2d 432 (1961) 123  The Titan Valve Manufacturing Company (Ohio) made valves. It sold its completed valves to American Radiator & Standard Sanitary Corporation (Penn), which incorporated the valves into water heaters. American Radiator sold its water heaters in several states, including Illinois. One of the water heaters sold in Illinois exploded, injuring Phyllis Gray. 124 Phyllis Gray sued American Radiator to recover damages for personal injury. American Radiator, a manufacturer of safety valves for hot water heaters and an Ohio corporation, was found subject to the state long arm jurisdiction of the Illinois courts in an action arising out of an explosion of a hot water heater, allegedly due to a faulty safety valve. American resisted the exercise of jurisdiction on grounds both that it had not purposefully shipped its valves into Illinois (since they had arrived there only as a part of a larger unit manufactured by another corporation) and that its economic contacts with the forum state were too small and too tenuous to reasonably justify an exercise of jurisdiction. 125 Supreme Court of Illinois Gray American Radiator Titan Valve Motion Granted The Courts of Illinois are authorized to exercise personal jurisdiction over outof-state actors who commit a tortious act within this State. Illinois Circuit Court Cook County Gray American Radiator Titan Valve Motion To Dismiss No tortious act Committed in Illinois Cross claim To Titan Valve: Summons is hereby served On you in Ohio under the Illinois long-arm statute 126 ILLINOIS SUPREME COURT Titan argues that Illinois courts cannot exercise personal jurisdiction over it under Section 16 because any negligent manufacturing was performed by it in Ohio. However, the alleged negligence in manufacturing can not be separated from the resulting injury in Illinois. Therefore, a tortious act has been alleged within the meaning of the statute. 127  Cases applying the Minimum Contacts Test 128 . . .”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. . .” See p. 77 3d full para. “. . .it has been held in cases on which appellant relies that continuous activity of some sort within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity. . .” See p. 77 last para. . . .”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 on action arising from dealings entirely distinct from those activities.” See p. 78 top of page. 129 Kind of Contact none single contact regular limited contact systematic continuous contact Degree of Relatedness No personal jurisdiction Directly Unrelated general personal jurisdiction 130 specific personal jurisdiction McGee v. International Insurance  355 U.S. 220 (1957) 131 United States Supreme Court McGee (Cal) Beneficiary Texas Superior Court Default Judgment Calif. Superior Court Writ Refused Cal Judgment Void for lack of Personal Jurisdiction McGee (Cal) Beneficiary McGee (Cal) Beneficiary Lowell Franklin (Cal) Empire Mutual Ins. Co. (Ariz) 132 McGee v. International Insurance * * *[W]e think it apparent that the Due Process Clause did not preclude the California court from entering a judgment binding on respondent. It is sufficient* * *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. * * * California has a manifest interest in providing effective means of redress for its residents when their interests in providing effective means of redress for its residents when their insurers refuse to pay claims.. . .” 133 DEFINITION: ―SPECIFIC IN PERSONAM JURISDICTION‖  The state has jurisdiction over the defendant only for a claim that arose in the forum. 134 DEFINITION: ― GENERAL IN PERSONAM JURISDICTION‖ The state has personal jurisdiction over the defendant for a claim that arose anywhere in the world. 135 Kind of Contact none single contact regular limited contact systematic continuous contact McGee v. International Ins. Degree of Relatedness No personal jurisdiction Directly Unrelated general personal jurisdiction 136 specific personal jurisdiction Hanson v. Denckla  357 U.S. 235 (1958) 137 Income during my life, the remainder to such person as I might appoint by inter vivos or testamentary instrument Bank of Delaware, Trustee cash Dora Donner (Florida) Daughter Hanson Hanson Child 1 Hanson Child 2 Daughter Denckla Daughter Stewart At the time she created the trust, Donner was a domiciliary of Pennsylvania, but nine years later she became domiciled in Florida, where she lived until her death. Before she died, Donner designated the remainder of her trust to go to two grandchildren, the children of her daughter Hanson. Donner put $200,000 in each grandchild‟s trust. The same day, Donner drew up a will, naming two of her daughters, Denckla and Stewart as her heirs to receive $1,000,000, the 138 remainder of the original trust. United States Supreme Court Denckla & Stewart Hanson Appeal Judgment: Trust Invalid Appeal Motion Denied Motion To Dismiss No Personal Jurisdiction Motion For Summary Motion Judgment: Denied Fla Judgment Res judicata Judgment: Trust Valid Florida Superior Court Delaware Superior Court Denckla & Stewart Denckla & Stewart 139 Hanson v. Denckla IN THE UNITED STATES SUPREME COURT HELD: No contacts. The defendant trust company has no office, transacts no business, none of trust assets has ever been held or administered, and no solicitation of business. Thus, no purposeful availment. 140 PURPOSEFUL AVAILMENT The defendant must purposefully avail itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. 141 Degree of Purposeful Availment none single contact regular limited contact systematic continuous contact Hanson v. Denckla Degree of Relatedness No personal jurisdiction Directly Unrelated general personal jurisdiction 142 specific personal jurisdiction World-Wide Volkswagen v. Woodson 444 U.S. 286 (1980) 143 Degree of Purposeful Availment none single contact regular limited contact systematic continuous contact World-Wide VW v. Woodson Degree of Relatedness No personal jurisdiction Directly Unrelated general personal jurisdiction 144 specific personal jurisdiction Kulko v. Superior Court  436 U.S. 84 (1978) 145 KULKO V. SUPERIOR COURT In an action by a plaintiff ex-wife to modify child support, may a California court exercise personal jurisdiction over her ex-husband, a citizen of New York if he sent a child, who he was obligated to support, to California, thereby causing the plaintiff to suffer financial hardship? 146 Calder v. Jones  465 U.S. 783 (1984) 147 CALDER V. JONES In an action by a California citizen for libel against a Florida writer and editor of an article published in the National Enquirer, does publishing an article which is disseminated in California furnish a constitutionally sufficient contact upon which a California court may exercise personal jurisdiction over the Florida citizens? 148 Degree of Purposeful Availment none single contact regular limited contact Calder v. Jones systematic continuous contact Degree of Relatedness No personal jurisdiction Directly Unrelated general personal jurisdiction 149 specific personal jurisdiction Burger King Corp. v. Rudzewicz  471 U.S. 462 (1985) 150 Burger King v. Rudzewicz   RELEVANT CONTACT FAIRNESS 151 Burger King v. Rudzewicz   Was there a relevant contact? That is the first inquiry Assuming a relevant contact, is the exercise of jurisdiction fair? 152 Degree of Purposeful Availment none single contact regular limited contact Calder v. Jones systematic continuous contact Hanson v. Denckla World-Wide VW v. Woodson McGee v. International Ins. Burger King v. Rudzewicz Degree of Relatedness Inextricably Directly Unrelated general personal jurisdiction 153 no personal jurisdiction specific personal jurisdiction Burger King v. Rudzewicz   There is a sliding scale. If the fairness factors balance strongly in favor of jurisdiction, jurisdiction might be upheld with a lower level of contact. Facts established contact. 154 Burger King v. Rudzewicz   The defendant argued that notwithstanding contact, exercise of jurisdiction is unfair The court discusses the fairness factors Little guys  Large corporation on the other side  155 Personal Jurisdiction Fair 1. Low burden on defendant of suit in forum 2. Forum state has interest in adjudicating dispute NO YES YES NO 3. Serves plaintiff’s interest in obtaining convenient and effective relief 4. Serves judicial system’s interest in the most efficient resolution YES NO NO YES YES 5. Furthers shared state interest in fundamental substantive social policies NO Personal Jurisdiction Unfair 156 Burger King v. Rudzewicz The forum does not have to be the best place for trial. A state may exercise jurisdiction if it is not constitutionally inconvenient 157 Burger King v. Rudzewicz   Once purposeful availment has been established, the forum‟s exercise of personal jurisdiction over the defendant is presumptively reasonable. The burden regarding fairness in on the defendant. The defendant must show that a requirement that it litigate in the forum is so gravely difficult and inconvenient that the defendant is at a severe disadvantage in the litigation 158 Personal Jurisdiction Fair 1. Low burden on defendant of suit in forum 2. Forum state has interest in adjudicating dispute YES YES 3. Serves plaintiff’s interest in obtaining convenient and effective relief 4. Serves judicial system’s interest in the most efficient resolution YES YES YES 5. Furthers shared state interest in fundamental substantive social policies 159 Sanders v. CEG Corporation 95 Cal. App.3d 779 (1979) 160 California Superior Court Dona L. Sanders (Cal) Dona L. Sanders Appellant California Court of Appeal, 4th District, Div 1 Products hydrohammer East Moline Nov, 1975 James E. Sanders (Cal) killed when hydohammer overturned Feb, 1975 Company (Illinois) CEG Corporation, Respondent dba “Arrow Manufacturing Company” Motion granted!! Defendant CEG Corporation, a Minnesota corporation moves to quash service of the summons upon it on the ground that there is no constitutional basis for the Courts of California to exercise personal jurisdiction over it. The County of San Diego California Superior Court $+ Cancel debt All assets CEG Corporation (Minnesota) dba hydrohammer 1970 “The sole issue is whether the California courts may The Cook 1966 constitutionally assume Company (California) jurisdiction over defendant CEG.” hydrohammer “Arrow Manufacturing Company” $ All stock Arrow Manufacturing (Colorado) 161 • • California Superior Court Answer: Yes. CCP 410.10 California courts can Dona L. Sanders (Cal) exercise personal jurisdiction to the Nov, fullest extent allowed by the Due Process James E. Sanders (Cal) killed 1975 U.S. Constitution. clause of the when hydohammer overturned California Court of Appeal, 4th District, Div 1 Products hydrohammer Dona L. Sanders Appellant East Moline The 14th Amend. allows a state to exercise jurisdiction over a foreign Defendant CEG Corporation, a Minnesota arising corporation for harm to a citizen corporationeconomic quash service of the by from moves to activity in California summonsforeign on the ground that there is no the upon it corporation. constitutional basis for the Courts of California to • Through Cook, its regular distributor, exercise personal jurisdiction over it. • Feb, 1975 Company (Illinois) CEG Corporation, Respondent dba “Arrow Manufacturing Company” Motion granted!! California Superior Court $+ Cancel debt All assets CEG Corporation (Minnesota) dba hydrohammer San Diego • “Themerging with Arrow, CEG became By sole issue is whether liable for the liabilities of Arrow. the California courts may The Cook 1966 • Finally, the exercise of personal constitutionally assume Company jurisdiction passes the “fairness factors” (California) jurisdiction over test. Arrow sold a product in California which harmed a California citizen in County of The California. 1970 “Arrow Manufacturing Company” $ All stock defendant CEG.” hydrohammer Arrow Manufacturing (Colorado) 162 163 M manufactures valves in Texas Sells them to X in New Mexico X M 164 X incorporates the valves into steam engines which X sells in Nebraska, Colorado, Utah, Nevada & Arizona Therefore, M’s valves get to States other than New Mexico, but M did not sent them there. X M 165 Pauline is injured in Nevada when one of the engines blows up in Nevada. Can personal jurisdiction be exercised over M in that state? X M 166 Phyllis Gray alleged that she was injured in Illinois when a negligently constructed safety valve caused her water heater to explode. Can personal jurisdiction be exercised by an Illinois court over Titan of Ohio? T X 167 Asahi Metal Industry Co. v. Superior Court 480 U.S. 102 (1987) 168 CALIFORNIA SUPREME COURT Cheng Shin appealed to the California Supreme Court. The California Supreme Court reversed the Court of Appeal. [Asahi has no offices, property or agents in California; solicits no business in California and makes no direct sales, but exercise of personal jurisdiction is permissible under Due Process Clause because Asahi knew that some of the valves which Cheng Shin incorporated would be sold in California.] 169    UNITED STATES SUPREME COURT ISSUES: Was there a relevant contact between Asahi and the state of California under the ―minimum contacts‖ test? Should the Cal Supreme Court decision allowing personal jurisdiction be reversed because the exercise of personal jurisdiction is not fair? 170 Should the Cal Supreme Court be reversed because the exercise of jurisdiction was not fair? YES NO 1. O’Connor 2. Rehnquist 3. Brennan 4. White 5. Marshall 6. Blackmun 7. Powell 8. Powell 9. Scalia 171 YES NO Personal Jurisdiction Fair 1. Burdens on defendant of suit in forum 2. Forum state’s interest in adjudicating dispute Personal Jurisdiction Unfair HIGH LOW LOW 3. Plaintiff’s interest in obtaining convenient and effective relief 4. Judicial system’s interest in the most efficient resolution 5. Shared state interest in furthering fundamental substantive social policies LOW LOW 172 Was there a relevant contact between Asahi and California based solely on its placing a product in the stream of commerce with no intent to purposefully market it in the forum state? YES NO 1. O’Connor 2. Rehnquist 3. Brennan 4. White 5. Marshall 6. Blackmun 7. Powell 8. Stevens 9. Scalia YES NO 173 Was there a relevant contact between Asahi and California based solely on its placing a product in the stream of commerce with no intent to purposefully market it in the forum state? No minimum contact here because no YES NO YES NO purposeful availment 5. Marshall 6. Blackmun 7. Powell 8. Stevens 9. Scalia 174 1. O’Connor 2. Rehnquist 3. Brennan 4. White Asahi Metal Industry Co. v. Superior Court  O‟Connor wing: Mere foreseeability that a product will enter the forum state is insufficient by itself to establish jurisdiction over the distributor and retailer. 175 Was there a relevant contact between Asahi and California based solely on its placing a product in the stream of commerce with no intent to purposefully market it in the forum state? YES NO 1. O’Connor 2. Rehnquist 3. Brennan 4. White Minimum contacts exist, because Asahi was aware that its product was regularly sold in California. YES NO 5. Marshall 6. Blackmun 7. Powell 8. Stevens 9. Scalia 176 Asahi Metal Industry Co. v. Superior Court  Brennen wing: If the defendant puts a product in the stream of commerce and you reasonably anticipate that it will get to the forum, that is a sufficient contact to allow the exercise of jurisdiction over the defendant. 177 The stream of commerce ends here: 178 Hypothetical Case Paul, a citizen of California is injured when the tire on his Honda motorcycle explodes. Paul sues the Taiwanese manufacturer of the tire and the Japanese manufacturer of the tire valve stem assembly in California Superior Court. The Taiwanese manufacturer moves to quash service of the summons citing Asahi. Discuss how you would rule. 179 Hypothetical Case Albert, a citizen of California was injured in California when a machine manufactured and sold in Nevada by Carl, a citizen of Nevada exploded in California. Betty is the doctor who treated Albert for Albert‟s injuries. Albert sued Betty and Carl in a state court in California. Albert asserts a tort claim in the alternative against Betty and Carl in tort. In other words, Albert asserts that the negligence of either Betty or Carl or both contributed to certain permanent injuries received by Albert. Carl objects to jurisdiction, pointing out that Betty and Carl are not indispensable parties to the action. Thus, Albert could sue Betty in California and Carl in Nevada. Using the Asahi balancing test, analyze the factors affecting how the judge should rule on Carl‟s motion. 180 Albert, a citizen of California was injured in California when a machine manufactured and sold in Nevada by Carl, a citizen of Nevada exploded in California. Betty is the doctor who treated Albert for Albert‟s injuries. Albert sued Betty and Carl in a state court in California. Albert asserts a tort claim in the alternative against Betty and Carl in tort. In other words, Albert asserts that the negligence of either Betty or Carl or both contributed to certain permanent injuries received by Albert. Carl objects to jurisdiction, pointing out that Betty and Carl are not indispensable parties to the action. Thus, Albert could sue Betty in California and Carl in Nevada. Using the Asahi balancing test, analyze the factors affecting how the judge should rule on Carl‟s motion. 181 Hypothetical Case ―SPECIFIC IN PERSONAM JURISDICTION‖  The state has jurisdiction over the defendant only for a claim that arose in the forum. 182 “GENERAL IN PERSONAM JURISDICTION‖ The state has personal jurisdiction over the defendant for a claim that arose anywhere in the world. 183 Perkins v. Benguet Consolidated Mining Co.  342 U.S. 437 (1952) 184 Degree of Purposeful Availment none single contact regular limited contact systematic continuous contact Perkins v. Benguet Hanson v. Denckla Degree of Relatedness No personal jurisdiction Directly Unrelated general personal jurisdiction 185 specific personal jurisdiction Helicopteros Nacionales De Colombia, S.A. v. Hall  466 U.S. 408 186 United States Supreme Court Judgment:: Plaintiffs shall Recover $1,141,200 Helicopteros Jury Trial Reversed Helicopteros Motion to Dismiss: Lack of Personal Jurisdiction Order: Motion Denied Texas Supreme Court Hall Texas State Court Plaintiff Defendants Reversed Texas Court of Civil Appeals Hall & other Family of workers Killed in Peru Helicopteros (Columbia) 187 Helicopteros Nacionales De Colombia, S.A. v. Hall   The USSC adopted the terms “general” and “specific” jurisdiction. General in personam jurisdiction may be exercised if the defendant‟s contacts with the forum are “systematic and continuous.” 188 Section F: New Bases of Jurisdiction—Technological Contacts 189 Bellino v. Simon 1999 WL 1059753 (E.D. La. 1999) 190  Forensic Document Services, a California sole proprietorship, operated by James Bellino (Cal), was in the business of selling autographed sports memorbilia. FDA sold two baseballs allegedly autographed by Babe Ruth and Lou Gehrig to Christopher Aubert of Louisiana. In an effort to learn more about the baseballs, Aubert logged onto an Internet website operated by Richard Simon Sports, Inc., A New York corporation. Aubert followed up with a telephone call to Richard Simon, himself. Simon allegedly made defamatory comments to Aubert about FDS and Bellino. Simon recommended that Aubert contact James Spence II Vintage Autographs, a limited liability company in Pennsylvania. Spence also allegedly defamed FDS and Bellino in a telephone call. Aubert returned the baseballs to Bellino and FDS. FDA was suspended from trading on eBay. 191 Bellino v. Simon Plaintiffs assert: Specific personal jurisdiction exists as a results of defamatory phone calls and emails made to Aubert of La. The motion is granted As to Spence but is denied as to Simon. U.S. District Court E.D. La. Bellino & FDS (Cal) Motion to Dismiss: Lack of Personal Jurisdiction 192 Bellino v. Simon  With regard to Mr. Spence, the Court finds that plaintiff has not established specific contacts sufficient to support personal jurisdiction over this Pennsylvania resident in Louisiana. Plaintiff concedes that Mr. Aubert initiated the telephone call in which Mr. Spense allegedly defamed plaintiffs. 193 Bellino v. Simon  However, [the Simon) telephone call resulted from several email communications which began when Mr. Aubert took advantage of a visitor form on Mr. Simon‟s company website allowing readers to contact Mr. Simon directly. Moreover, it is undisputed that Mr. Simon initiated several subsequent emails relating to plaintiffs‟ defamation charge. * * *Accordingly, the Court concludes that plaintiffs have met their prima facie burden of showing that Mr. Simon purposefully established minimum contacts with Louisiana such that he could reasonably anticipate being haled into court there. 194 Bellino v. Simon   Mr. Simon asserts that it would nevertheless offend traditional notions of fair play and substantial justice to compel him to defend this suit in Louisiana because plaintiffs, the injured parties, do not live in Louisiana* * * and would be burdensome. Held: The effect of the tortious activity was felt here, and Louisiana law applies. Therefore the exercise of personal jurisdiction over Simon is fair. 195 Personal Jurisdiction Based on Internet Activity Personal Jurisdiction by a State Proper Personal Jurisdiction by a State Not Proper Maintenance Of website Maintenance Of website 196 Personal Jurisdiction Based on Internet Activity Personal Jurisdiction by a State Proper Personal Jurisdiction by a State Not Proper 197 Section G. Jurisdiction Based Upon Power Over Property 198  Neff owes Mitchell $300 for legal fees, which Mitchell earned advising Neff on an Oregon land acquisition. Neff moves to California without paying and Mitchell wishes to collect. Neff owns a piece of land in Oregon worth $500. 199 Harris v. Balk  198 U.S. 215 (1905) 200 Merchant Goods GARNISHMENT $ debt Wages owed Consumer labor State Court Merchant v. Consumer Action for debt Judgment entered Employer Merchant v. Employer Garnishment of Wages owed to consumer 201 Epstein (Maryland) Goods $ 344 debt $ 180 loan Balk (N. Carolina) $ 180 debt Harris (N. Carolina) Maryland State Court N. Carolina State Court Epstein (Md) v. Harris (N.C.) Balk (N. C.) v. Harris (N. C.) Garnishment of Debt Action to recover $180 debt owed to defendant by Balk [Defense: Extinguishment by [Jurisdiction based on quasi in rem payment of debt of plaintiff to presence in the forum state Epstein] of the creditor] {Reply: The Maryland judgment [Consent Judgment] is void because of lack of personal 202 [Judgment Paid] jurisdiction} Harris v. Balk ―Power over the person of the garnishee confers jurisdiction on the courts of the state where the writ issues. * * * *The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes. The is as much bound to pay his debt in a foreign state when therein sued upon his obligation by his creditor, as he was in the state where the debt was contracted…‖ 203 Shaffer v. Heitner  433 U.S. 186 (1977) 204 The plaintiff was the owner of one share of stock in the Greyhound Corporation The plaintiff sued Greyhound and 28 present or former officers of Greyhound in a Delaware state court. The plaintiff alleged that the individual defendant had violated their duties to Greyhound by causing the company to engage in actions that resulted in it being held liable for substantial antitrust damages and criminal contempt fines. The actions that allegedly led to the damages and contempt fines occurred in Oregon. Greyhound was a Delaware corporation. 205 Shaffer v. Heitner  HELD: The law of state-court jurisdiction no longer stands securely on the foundation established in Pennoyer. The court held that the standard of fairness and substantial justice set forth in International Shoe should be held to govern actions in rem (meaning quasi in rem) as well as in personam. 206 As amended by Shaffer. . . none Degree of Purposeful Availment Owner of property in the State? single contact Yes regular limited contact systematic continuous contact Yes If the lawsuit is one to decide who owns the property, general in personam applies No If personal jurisdiction is based only on presence of property, the defendant must have done something in the state with the property which is related to the claim? Degree of Relatedness No personal jurisdiction Directly Unrelated general personal jurisdiction 207 specific personal jurisdiction Burnham v. Superior Court 495 U.S. 604 (1990) 208 Burnham v. Superior Court Francie Burnham brought suit for divorce in California state court against her husband, Dennis Burnham, from whom she had been separated for 18 months. Dennis, a resident of New Jersey, was served with process at Francie's home in California. At the time of service, Dennis was visiting southern California on business and had traveled to northern California to visit his children. He took his older child to San Francisco for the weekend and was served with process upon returning the child to Francie's home. Dennis returned to New Jersey, but later made a special appearance in a California trial court to file a motion to quash service. 209 Dennis and Francie Burnham lived in New Jersey. They had two children. 210 Francie Burnham and the two children moved to California. Their marriage did not work and so they separated. Dennis Burnham remained in New Jersey. 211 One day Dennis traveled to California on business. While he was there, he decided to go to San Francisco to visit his children. While he was in the Bay Area, Francie, who had filed an action for divorce, caused a summons to be served on Dennis, commanding him to appear in the California Superior Court and answer the petition. 212 Motion Denied!!! Special Appearance: Motion to quash service of process—no personal jurisdiction California Superior Court F. Burnham (Cal) D. Burnham (N.J.) 213 Petition Denied!!! Petition for Writ of Mandamus California Court of Appeals D. Burnham (N.J.) Special Appearance: Motion to quash service of process—no personal jurisdiction California Superior Court Motion Denied!!! California Superior Court F. Burnham (Cal) D. Burnham (N.J.) 214 United States Supreme Court Petition for Writ of Certiorari Petition Denied!!! Petition for Writ of Mandamus D. Burnham (N.J.) California Superior Court California Court of Appeals D. Burnham (N.J.) Special Appearance: Motion to quash service of process—no personal jurisdiction California Superior Court Motion Denied!!! California Superior Court F. Burnham (Cal) D. Burnham (N.J.) 215 United States Supreme Court Petition for Writ of Certiorari Petition Denied!!! Petition for Writ of Mandamus D. Burnham (N.J.) California Superior Court California Court of Appeals D. Burnham (N.J.) Special Appearance: Motion to quash service of process—no personal jurisdiction California Superior Court ISSUE: Is due process violated if a state exercises personal jurisdiction over a non-citizen who is served with process while present in the forum state? Motion Denied!!! California Superior Court F. Burnham (Cal) D. Burnham (N.J.) 216 Burnham v. Superior Court Is it consistent with constitutional due process for California to exercise personal jurisdiction over a nonresident who was personally served with process while temporarily in California for a claim that in unrelated to his in-state activities? 217 Burnham v. Superior Court    Yes, presence alone is enough, because…. Traditional Waivable right v. Article III 218 Section I. Another Basis of Jurisdiction: Consent 219 Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee 456 U.S. 694 (1982) 220 Compagnie des Bauxites de Guinee (CBG), a bauxite producer, had purchased business-interruption insurance from the Insurance Corp. of Ireland and other insurers. When a mechanical failure forced a halt in CBG's bauxite production, CBG filed a multi-million dollar claim. However, the insurers refused to pay the claim. CBG then brought suit in federal court in Pennsylvania. Most of the foreign insurance companies made special appearances to contest personal jurisdiction. In order to prove that jurisdiction existed, CBG attempted to use discovery. However, the insurance companies failed to comply with discovery requests and with the court's orders for document production. The District Court then imposed a sanction, pursuant to Rule 37(b)(2)(A) [Court may impose reasonable sanctions for failure to comply with order compelling discovery], consisting of a presumptive finding that the insurers were subject to jurisdiction because of their business contacts with Pennsylvania. The Supreme Court granted certiorari. 221 Issue: May objections to personal jurisdiction be impliedly waived by failure to comply with a court's discovery orders? 222  HELD: Yes. Objections to personal jurisdiction may be impliedly waived by failure to comply with a court's discovery orders. In voluntarily submitting to the jurisdiction of the District Court for the limited purpose of challenging jurisdiction, a defendant agrees to abide by the court's determination on the jurisdictional issue. Thus, the insurers did not have the option of blocking CBG's attempts to prove the insurers had sufficient minimum contacts with Pennsylvania. The insurers' failure to supply the requested information as to their contacts with Pennsylvania supports the presumption that the insurers' jurisdictional defense was invalid. Thus, the sanction was reasonable, as it presumed the facts that CBG was seeking to establish through discovery. Affirmed. 223 M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) 224 M/S Bremen v. Zapata Off-Shore Co Zapata Off-Shore Co. an American corporation, contracted with Unterweser, a German corporation, to tow Zapata's drilling rig from Louisiana to Italy. Unterweser used a ship called Bremen to tow the rig. After the rig was damaged in a storm off Florida, Zapata brought suit against Unterweser in a Florida district court. Unterweser claimed that the original contract contained a forum-selection clause requiring all disputes to be litigated in London. Thus, Unterweser moved to dismiss or, alternatively, to stay the Florida proceedings and sued Zapata for breach of contract. The District Court refused to dismiss or stay the Florida action, and the Court of Appeals affirmed. The Supreme Court granted certiorari. 225 M/S Bremen v. Zapata Off-Shore Co Issue: May an express forumselection clause establish jurisdiction by consent? 226 M/S Bremen v. Zapata Off-Shore Co HELD: Yes. An express forum-selection clause in a contract suffices to establish jurisdiction by consent. In the case at hand, Zapata and Unterweser clearly agreed to litigate all suits in London. The expansion of American business and industry will be adversely affected if we insist on resolving all disputes in our own courts. We cannot have international trade governed only by American laws and resolved only in American courts. 227 Carnival Cruise Lines v. Schutte 111 S.Ct. 1522 (1991) 228 Eulala and Russel Shutte purchased tickets for a cruise on Carnival Cruise Lines. The tickets were purchased from a travel agent in Washington, who forwarded the payment to Carnival's headquarters in Florida. A provision on the tickets stated that all disputes were required to be litigated in Florida. While sailing from Los Angeles to Mexico, Mrs. Shutte slipped on a deck mat and was injured. The Shuttes filed suit in a Washington district court, alleging damages for negligence on the part of Carnival and its employees. However, the District Court ruled that Carnival's contacts with Washington were insufficient to support jurisdiction. The Court of Appeals reversed, and the Supreme Court granted certiorari. 229 Issue: Is a reasonable forum selection clause enforceable to establish consent to jurisdiction? 230 HELD: Yes. A reasonable forum selection clause is enforceable in order to establish consent to jurisdiction. The minimum contacts analysis is inapplicable in the instant action, as the forum selection clause contained on the ticket was reasonable for several reasons. First, a cruise line has a special interest in limiting the potentially vast number of forums in which it could be sued. Second, a forum selection clause has the beneficial effect of sparing litigants and courts the time and expense of pretrial motions to determine the correct forum [although it does not spare parties the cost of litigating in a distant jurisdiction!]. Third, passengers who purchase tickets containing a forum selection clause presumably benefit in the form of reduced fares, reflecting the savings that cruise lines enjoy by limiting the forums in which they may be sued. 231 Hypothetical Case  David, a citizen of California sells 300,000 prefab storage buildings in Nevada each year. Patrick, a Nevada citizen purchased two of them for his ranch. While Patrick was in California on vacation, David runs into Patrick with his car and injures Patrick. After he returns home, Patrick files a lawsuit against David in Nevada. Is personal jurisdiction proper? 232 Section J: Jurisdictional Reach of the Federal District Courts 233 Omni v. Rudolph Wolff & Co. Omni Capital International and Omni Capital Corporation, New York corporations, marketed an investment program involving commodity futures trades on the London Metal Exchange. The United States Internal Revenue Service disallowed income tax deductions, claimed by the participants in Omni's investment program, on the ground that the commodities trades were not bona fide transactions. Investors then sued Omni in the federal district court in Louisiana, charging that Omni fraudulently induced them to participate in the program in violation of various federal securities laws. Omni then impleaded Rudolph Wolff & Co., a British corporation that was employed by Omni to handle trades on the London Exchange, and Gourlay, a British citizen who was Wolff's representative in soliciting Omnis' business. The Omni Companies contended that their liability, if any, was caused by Wolff and Gourlay’s improper trading activities. 234 Omni v. Rudolph Wolff & Co. Investors Invest money in commodities futures traded on the London Metal Exchange and receive annual tax deductions for losses based on market fluxuations far beyond amount of original investment. Omni (N.Y.) Contract to assist Omni to trade commodity futures on the London Metal Exchange Investors Investors Wolff & Co.(England) Gourlay(England) 235 The deduction is disallowed the entire investment program was a scheme to avoid taxes! Investors Invest money in commodities futures traded on the London Metal Exchange and receive annual tax deductions for losses based on market fluxuations far beyond amount of original investment. Omni (N.Y.) Contract to assist Omni to trade commodity futures on the London Metal Exchange Investors Investors Wolff & Co.(England) Gourlay(England) 236 Omni v. Rudolph Wolff & Co. Omni defrauded us into investing by falsely promising that the the trading scheme would be proper under the IRC. U.S. DISTRICT COURT, DISTRICT LOUISIANA Investors Investors V. Omni (N.Y.) Investors Plaintiffs Defendants 237 Omni v. Rudolph Wolff & Co. Omni defrauded us into investing by falsely promising that the the trading scheme would be proper under the IRC. U.S. DISTRICT COURT, DISTRICT LOUISIANA Investors Investors V. Omni (N.Y.) If we are liable to the investors, it is because Wolff and Gourlay engaged in illegal trading on the London Exchange. Investors Plaintiffs Defendants Third Party Plaintiffs V. Wolff & Co.(England) Gourlay(England) Third Party Defendants 238 Omni v. Rudolph Wolff & Co. Amended Complaint: Defendant also violated the CEA Omni defrauded us into investing by falsely promising that the the trading scheme would be proper under the IRC. U.S. DISTRICT COURT, DISTRICT LOUISIANA Investors Investors V. Omni (N.Y.) If we are liable to the investors, it is because Wolff and Gourlay engaged in illegal trading on the London Exchange. Investors Plaintiffs Defendants Third Party Plaintiffs V. Wolff & Co.(England) Gourlay(England) Third Party Defendants 239 Omni v. Rudolph Wolff & Co. Motion Granted Motion to Amended Complaint: Defendant also dismiss all other violated the CEA claims because preempted by Omni defrauded us into investing by falsely promising that the the CEA trading scheme would be proper under the IRC. U.S. DISTRICT COURT, DISTRICT LOUISIANA Investors Investors V. Omni (N.Y.) If we are liable to the investors, it is because Wolff and Gourlay engaged in illegal trading on the London Exchange. Investors Plaintiffs Defendants Third Party Plaintiffs V. Wolff & Co.(England) Gourlay(England) Third Party Defendants 240 Motion Granted Motion Granted Motion to Amended Complaint: Defendant also dismiss all other violated the CEA claims because preempted by Omni defrauded us into investing by falsely promising that the the CEA trading scheme would be proper under the IRC. Motion to dismiss the CEA claim because CEA has no long-arm statute which allows Louisiana federal court to exercise personal jurisdiction over English citizens U.S. DISTRICT COURT, DISTRICT LOUISIANA Investors Investors V. Omni (N.Y.) If we are liable to the investors, it is because Wolff and Gourlay engaged in illegal trading on the London Exchange. Investors Plaintiffs Defendants Third Party Plaintiffs V. Wolff & Co.(England) Gourlay(England) Third Party Defendants 241 Petition for Certiorari to U.S.S.C. U.S. Court of Appeals AFFIRMED! Motion Granted Motion Granted Motion to Amended Complaint: Defendant also dismiss all other violated the CEA claims because preempted by Omni defrauded us into investing by falsely promising that the the CEA trading scheme would be proper under the IRC. Motion to dismiss the CEA claim because CEA has no long-arm statute which allows Louisiana federal court to exercise personal jurisdiction over English citizens U.S. DISTRICT COURT, DISTRICT LOUISIANA Investors Investors V. Omni (N.Y.) If we are liable to the investors, it is because Wolff and Gourlay engaged in illegal trading on the London Exchange. Investors Plaintiffs Defendants Third Party Plaintiffs V. Wolff & Co.(England) Gourlay(England) Third Party Defendants 242 Omni v. Rudolph Wolff & Co. Before The United States Supreme Court In the absence of a state long arm statute, does a federal court have personal jurisdiction over a foreign defendant on the basis of a federal act which is silent on service of process? 243 Extent of Personal Jurisdiction under Arizona State Statutes Superior Court of the State of Arizona244 Extent of Personal Jurisdiction in the absence of Congressional Statute Extent of Personal Jurisdiction under Arizona State Statutes United States District Court for the District of Arizona Superior Court of the State of Arizona245 Extent of Personal Jurisdiction under California State Statutes Superior Court of the State of California 246 Extent of Personal Jurisdiction in the absence of Congressional Statute United States District Court for the Districts of California Extent of Personal Jurisdiction under California State Statutes Superior Court of the State of California 247 Hypothetical Case PACCO, a 24 hour copy machine company with two locations in San Francisco purchased a photocopy machine from Davis Office Supply of San Francisco, California. Later PACCO closed its stores and moved its operations to Las Vegas, Nevada, taking the photocopy machine with it. Davis Office Supply had sold a photocopier to a law firm in Nevada several years before the PACCO sale, pursuant to a telephone order. After moving its operations, PACCO experienced difficulties with the machine which were covered by a warranty. Davis Office Supply refused to repair the machine. PACCO commenced an action against Davis Office Supply in a Nevada Court for breach of warranty. Personal jurisdiction proper or improper? Explain your answer. 248 Hypothetical Case Polteco Corporation was incorporated in Nevada solely to obtain the benefits of a favorable corporation law. Polteco‟s only place of business is in Arizona. It has no business dealings at all with Nevada: no property, no business activity, no shareholders. Paul, an Arizona resident, sues Polteco in Nevada state court on an automobile accident that occurred in Arizona. May Nevada exercise personal jurisdiction over Polteco? Explain your answer. 249 Hypothetical Case Deltech Co. is incorporated and has its principal place of business in California. It ships 2000 cases of Westoil, a door hinge lubricant, each year to Paul, a wholesaler in Oregon. It does no other business in Oregon. Yancy, a management consultant in Oregon, sued Deltech in state court in Oregon claiming failure to pay Yancy for services which he rendered in California. May Oregon exercise personal jurisdiction in the case of Yancy v. Deltech? Explain. 250 Hypothetical Case Alex is a traveling salesman who lives in California and sell NeverFlat tires in parts of California, Arizona and Nevada. While en route to deliver tires to a Nevada customer, he is involved in an auto accident in Nevada with Helen a Nevada citizen. He brings suit against Helen in California for his injuries in the accident. Does the Court have personal jurisdiction over Helen? Briefly explain your answer. 251 Hypothetical Case As a result of the same accident, Helen brings suit against Alex for her injuries. She sues in Arizona. Does the court have jurisdiction over Alex based on minimum contacts? Briefly explain your answer. 252 Hypothetical Case To be on the safe side, Helen also files suit against Alex in Nevada. Does that court have personal jurisdiction over Alex based on minimum contacts? Briefly explain your answer. 253 Hypothetical Case While she in on vacation in California, Bernadette, an Oregon citizen, buys a Volkswagen from Mountain View VW, located in Redding, California. Shortly after she returns home, all four wheels fall off while she is driving and Bernadette is injured. Understandably upset, Bernadette sues Mountain View VW in an Oregon court for negligence. Does the court have personal jurisdiction over the defendant? Briefly explain your answer. 254 Hypothetical Case After Bernadette leaves, Tom pulls into Mountain View VW’s lot with his engine belching smoke. His car is clearly a total loss, and he tells Smilie, the salesman, that he must have a car to get back home to Florida. Smilie sells him a (very) used Chevy. After crossing into Florida, Tom pushes the windshield wiper button and the engine automatically ejects into the Everglades. Tom sues Smilie and Mountain View VW in Florida . Is personal jurisdiction proper there? Briefly explain your answer. 255 Hypothetical Case Smilie has an eye for fast cars. At the moment, he has a nice Maserati on the lot, with all the extras (engine, wheels, brakes). A customer tells him that a trucker buddy of his, Danielle, from Nevada, might be interested in buying the Maserati. Smilie calls Danielle in Nevada, extols the Maserti’s virtues and encourages her to come in and test drive the car on her next delivery in Redding. Danielle does stop to see the car, likes it, and buys it. She makes the mistake of towing it home, only to discover upon arrival that the lights, carburetor, and exhaust system are missing. She sues Smilie in Nevada. Smilie has no other contacts with Nevada. Will the Nevada court have personal jurisdiction over Smilie? Explain. 256 Hypothetical Case After lunch, Rex comes in. Rex lives across the border in Ashland, Oregon, where he read in the Globe, an Ashland newspaper Mountain View’s ad for a one-yearold Audi for $1,100. Because the Mountain View dealership is located 40 miles for the Oregon border, it advertises frequently in Ashland, as well as in upper Northern California. Rex visits the dealership, talks Smilie down to $1,025 and buys the car. He barely gets across the Oregon line when the steering wheel comes off in his hand, and the body comes entirely loose form the frame of the car. Rex sues Mountain View in Oregon. Does the court have personal jurisdiction over 257 Mountain View? Briefly explain your answer. Hypothetical Case Assume on the same facts as previous case, that Mountain View only advertises occasionally in Oregon and derives only 5% of its business ($20,000 of its annual gross sales of $400,000) from sales to Oregon customers. The rest of its sales are in Northern California. Rex sees the ad and buys an Audi at Mountain View's dealership; it breaks down in Oregon on the way home. Can Rex sue Mountain View in Oregon? Briefly explain your answer. 258 Hypothetical Case When Smilie relaxes, he likes to go to the Oregon coast for some deep sea fishing. While drinking at a bar in the fishing lodge there, he gets to talking with Lois, another guest at the lodge, who lives in Oregon. Lois asks Smilie about his work. The two get into a car lovers’ debate over the relative merits of various sports cars. Before leaving the bar, Lois asks Smilie for his card. Two months later, Lois visits Mountain View VW and buys a jazzy looking Ferrari from Smilie. Imagine for yourself what happens to the Ferrari when Lois gets it back to Oregon. Lois sues Smilie in Oregon. Will the Oregon court have personal jurisdiction over Smilie? Briefly explain your answer. 259 Hypothetical Case In a national magazine, Dando, from Oregon advertises an piano for sale, which he claims had been previously owned by Liberace. Phillip from Nevada sees the ad, goes up to see the piano and agrees in Oregon to purchase it. Dando has it shipped down to Phillip a week later. When Phillip discovers that the date of manufacture of the piano was after Liberace’s death, Phillip sues Dando in Nevada state court. The Nevada longarm statute authorizes jurisdiction over a defendant if the defendant has transacted business in the state. Discuss whether Nevada may exercise personal jurisdiction over Dando. 260 Hypothetical Case Assuming the same background facts as the WorldWide case, the Robinsons sue Seaway in Oklahoma. The Oklahoma long-arm statute authorizes its courts to take personal jurisdiction if the defendant ―committed a tort in the state.‖ Assume that in a series of cases, the Oklahoma state courts have concluded that a defendant commits a tort in the state under the long-arm statute if the injury takes place in the state even if the negligent act took place elsewhere. Discuss whether the Oklahoma court may exercise personal jurisdiction over Seaway. 261