Civil Procedure Outline Constitutional limits on Personal Jurisdiction 1. The Fountainhead a. Pennoyer v. Neff – Supreme Court held that due process prevented suit against nonresident defendants who could only be found and served elsewhere. i. FACTS: Pennoyer involved a default judgment entered by an Oregon state court against Neff for attorney‟s fees. Neff was neither a citizen of Oregon nor had he been served there, although he did own property in the state. Neff‟s Oregon property was seized and sold by the sheriff to Pennoyer in order to satisfy the judgment. Subsequently, Neff sued Pennoyer in federal court for recovery of his property. ii. HOLDING: Concluding that Oregon couldn‟t exercise personal jurisdiction over Neff in an action to determine personal liability, the Court invalidated the default judgment and resulting sheriff‟s sale. The Court held that if a state court attempts to exercise personal jurisdiction over a defendant, the defendant “must be brought within its jurisdiction by service of process within the State, or his voluntary appearance.” 2. Interim Developments a. Hess v. Pawloski i. FACTS: ii. HOLDING: 3. The Modern Era a. International Shoe Co. v. Washington i. FACTS: International Shoe Co. was incorporated in Delaware and had its principal place of business in Missouri. The company employed Washington residents to solicit orders there, who reported directly to the company‟s main office in Missouri. The state of Washington sued International Shoe to collect unemployment compensation tax upon salaries defendant had paid to its Washington employees, and International Shoe challenged personal jurisdiction in Washington. The Supreme Court affirmed Washington‟s exercise of personal jurisdiction of International Shoe, finding sufficient contacts in the state to do so. International Shoe identified two types of contacts a nonresident defendant could have with the forum: 1. Those related to the controversy (specific jurisdiction) 2. Those unrelated to the controversy that are of such a nature as to justify suit against the defendant in the current controversy. (general jurisdiction) ii. HOLDING: The Supreme Court articulated a new test of determining whether personal jurisdiction exists over a nonresident defendant who cannot be found and served within the state: Whether the defendant has 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.” b. World-Wide Volkswagen v. Woodson i. FACTS: Plaintiff‟s purchased an Audi from defendant retailer Seaway Volkswagen in New York. Thereafter, while traveling cross-country in the car, they were involved in a collision in Oklahoma, and the gas tank ignited, seriously injuring the plaintiffs. P‟s brought suit in Oklahoma state court against manufacturer Audi. ii. HOLDING: The court held that Oklahoma courts were without minimum contacts necessary to assert personal jurisdiction. Defendants didn‟t sell cars, advertise, or carry on any other activity in that state. Thus, the Court reasoned that the conduct of the retailer and wholesaler was no such as to cause them to anticipate being sued in Oklahoma. 1. Refined the minimum contacts test, saying that “critical to due process analysis … is that the defendant‟s contact and connection with the
forum State as such that he should reasonably anticipate being haled into court there. c. Note on Keeton and Calder i. Keeton – Keeton sued Hustler Magazine in federal court in New Hampshire for libel. Hustler Magazine had circulated in New Hampshire copies of the magazine alleged to have libeled plaintiff (related contacts), and it had circulated other issues there in a continuous and systematic fashion (unrelated contacts). Aggregate of defendant‟s contacts with the forum were proved sufficient. ii. Calder – Defendant was held subject to personal jurisdiction in California for an allegedly defamatory article written in Florida, since the article was to be circulated in California, the plaintiff lived there, and the plaintiff‟s career was centered there. d. Burger King Corp. v. Rudzewicz i. FACTS: Through negotiation with Burger King‟s regional office in Michigan, Rudzewicz and another Michigan defendant obtained a franchise in that state. Defendants failed to make payments, and Burger King brought a federal diversity suit on the franchise agreement in Florida, its headquarters and place of incorporation. ii. HOLDING: Concluded that personal jurisdiction over Rudzewicz was constitutional, finding that there were enough Florida contacts related to the controversy to satisfy the test. Defendants at times dealt directly with Burger King‟s Miami headquarters, they contracted with Burger King to have Florida law govern the franchise agreement, and they promised to send their franchise payments to Burger King‟s Florida address. Under the circumstances, the Court refused to attach importance to the fact that Rudzewicz had not been in the forum state. e. Asahi Metal Industry Co. v. Superior Court of California i. FACTS: P sued in California over a serious accident, caused by failure of the rear tire of P‟s motorcycle. P sues the Taiwanese tire manufacturer, which to bring Asahi, a Japanese company into the picture. ii. HOLDING: The Court interpreted the standard from International Shoe that “maintenance of the suit doesn‟t offend „traditional notions of fair play and substantial justice.‟” The interests of P and the forum state would be “slight,” and Asahi‟s burden from defending in California “severe.”