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Personal jurisdiction - PowerPoint


									Personal jurisdiction

   Civil Procedure I
   Class 9 & 10
Helicopteros v. Hall (p. 96)

                      (pipeline in Colombia)

  Decedents (WSH employees)
                                    (contract for helicopter services)
Helicopteros v. Hall

  General jurisdiction?
  "Even when the cause of action does not
   arise out of or relate to the foreign
   corporation's activities in the forum
   State, due process is not offended by a
   State's subjecting the corporation to its in
   personam jurisdiction when there are
   sufficient contacts between the State and
   the foreign corporation.“ (p. 98)

  How to define?
  Court cites Perkins case, where general
   jurisdiction was upheld when foreign
   corporation had been carrying on in Ohio "a
   continuous and systematic, but limited, part of
   its general business," and the assertion of
   general jurisdiction was "reasonable and just.“
  Place of business in the forum
  Licensed to do business in the state
Helicopteros: specific jurisdiction?

     Helicol’s contacts with Texas:
     --Entered into contract to provide helicopter services
      with Consorcio, the alter ego of WSH, a Texas joint
     --Helicol CEO met in Houston with WSH to negotiate
     --$5 million in payments from WSH were sent out of a
      Texas bank account into Helicol’s New York bank
     --Purchased 80% of its fleet from a company in Fort
     --Sent pilots to Fort Worth for training and to move the
      helicopters to South America.
    Is there a difference between a cause of action that
     “arises out of” or the defendant’s forum contacts, and
     a cause of action that is “related to” the defendant’s
     forum contacts?
    Ex.: Carnival Cruise Lines v. Shute. Carnival
     advertised in WA and the Shutes purchased a cruise.
     Mrs. Shute was injured on the cruise in a slip-and-fall
     accident, which was not in WA. What is the
     relationship between the advertising contacts and the
     cause of action?
    Some courts adopt a “but for” analysis to establish the
     connection. Here, for example, but for Carnival’s
     advertising and selling tickets in WA, the Shutes would
     not have purchased a Carnival cruise and Mrs. Shute
     would not have been injured.
Consent to personal juridiction

  Remember Pennoyer: “voluntary
   appearance in the forum” acceptable for
   exercise of personal jurisdiction.
  Waiver: failure to raise defense of lack of
   personal jurisdiction in the time required
   by rules of civil procedure (in Federal
   Rules, in first pre-answer motion or in
   answer if no pre-answer motion has
   been filed).
Consent: by appointing agent for
accepting service of process
  National Equipment v. Szukhent (p. 107)
  Defendants were Michigan farmers who
   leased farm equipment from NY company.
   Lease appointed Florence Weinberg, in New
   York, defendants agent for accepting service
   of process.
  When defendants failed to pay rent, plaintiff
   filed suit in New York and served Florence,
   who sent defendants a copy of the summons.
  Supreme Court upheld jurisdiction over
   defendants in New York.
Consent: by using court procedures

  Hypo: Shoe salesman in Washington,
   with no contacts in Missouri, sues
   International Shoe in Missouri for unpaid
   benefits. International Shoe
   counterclaims for misappropriation of
   trade secrets. Can Missouri court
   exercise personal jurisdiction over
  Yes, Adam v. Saenger, p. 107.
Consent: forum selection clause
  Carnival Cruise Lines v. Shute (p. 107)
  Couple from Washington state purchased
   nonrefundable tickets on Carnival Cruise; back
   of tickets mandated jurisdiction in Florida.
   Mrs. Shute injured on cruise; couple sued in
  Supreme Court upheld forum selection clause
   and dismissal of case, although FSC is
   “subject to judicial scrutiny for fundamental
“Consent”: as discovery sanction

  Insurance Corp. of Ireland v. CBG (p. 107)
  Plaintiff CBG was a bauxite mining company in
   Guinee, Africa. Purchased business
   interruption insurance from Insurance Corp. of
   Ireland (“ICI”), an Irish company.
  When ICI refused to pay on the policy, CBG
   filed suit in federal district court in
   Pennsylvania. ICI filed a motion to dismiss
   complaint for lack of personal jurisdiction.
Insurance Corp. of Ireland v. CBG

  In connection with juridictional motion, CBG
   requested document discovery of all policies
   ICI had issued in Pennsylvania. ICI refused to
   comply. CBG’s motion to compel production
   was granted.
  When ICI failed to comply with production
   order, district court entered an order upholding
   personal jurisdiction as a discovery sanction
   authorized by the FRCP.
Insurance Corp. of Ireland v. CBG

  ICI argued on appeal that the trial court did not
   have jurisdiction to enter such a sanctions
   order until it was determined that the trial court
   had jurisdiction.
  U.S. Supreme Court rejected that argument,
   stating that the requirement of personal
   jurisdiction is an individual right that can be
   waived. Also, "the expression of legal rights is
   often subject to certain procedural rules."
Back to in rem jurisdiction

  Shaffer v. Heitner (p. 108)(1977)
  Parties?
  Plaintiff: Heitner, a stockholder in
   Greyhound -- one share of stock.
  Defendants: Greyhound (DE corp.;
   PPOB AZ) and 28 directors and officers
   of Greyhound, one of which is Shaffer.
  Court?
Shaffer v. Heitner (p. 108)
  Plaintiff’s cause of action?
  Defendants breached fiduciary duties in permitting
   Greyhound to incur substantial antitrust liabilities
   arising out of their activities in Oregon.
  Procedure plaintiff used to obtain jurisdiction over the
   21 individual appellants?
  Sequestration of their Greyhound stock. A Delaware
   statute “deemed” the stock certificates to be in
   Delaware, and they were "seized" by placing stop
   transfer orders on the corporation's books.
  Did Greyhound contest jurisdiction? Why or why not?
Shaffer v. Heitner
  Lower court ruling?
  Who are appellants?
  21 individual defendants who had their
   Greyhound stock seized
  Under Pennoyer, could a plaintiff obtain
   jurisdiction based upon seizure of property in
   the state at the beginning of the lawsuit?
  Yes, to the extent of the property seized. But
   Pennoyer was talking about in rem -- this
   seemed to be more a device for forcing in
   personam jurisdiction.
Justice Thurgood Marshall (1908-
                    Appointed to U.S. Sup. Ct. by
                     Lyndon B. Johnson in 1967.
                    Legal director of the NAACP
                     from 1940 to 1961; argued
                     Brown v. Board of Education in
                     1954. Defined “equal” for
                     Justice Frankfurter as “getting
                     the same thing, at the same time
                     and in the same place."
                    During a death penalty argument
                     in 1981, Justice Rehnquist
                     suggested that an inmate's
                     repeated appeals had cost the
                     state too much money. Justice
                     Marshall interrupted, "It would
                     have been cheaper to shoot him
                     right after he was arrested,
                     wouldn't it?"
Shaffer v. Heitner
  If Pennoyer said the attachment of defendant’s
   property in the forum state was a proper
   exercise of jurisdiction, what was the problem?
  International Shoe
  What is the issue?
  "Whether the standard of fairness and
   substantial justice set forth in International
   Shoe should be held to govern actions in rem
   as well as in personam." More specifically,
   whether this Delaware statute (§ 366) is
   unconstitutional as applied.
Shaffer v. Heitner

  According to the majority, are in rem
   actions subject to the same standards as
   International Shoe prescribed for in
   personam jurisdiction?
  Yes -- "All" assertions of state court
   jurisdiction must satisfy the minimum
   contacts analysis of International Shoe.
Shaffer v. Heitner
  Argument for jurisdiction #1: Wrongdoer
   should not be allowed to escape payment by
   removing his assets to a place where he is not
   subject to in personam liability.
  Example: Peter claims that Donia fraudulently
   obtained $100,000 of Peter's money in Texas
   and deposited it into a bank account in Maine.
   Donia has no other contacts with Maine.
   Traditional view was that Maine court had
   jurisdiction based on the presence of the bank
   account by garnishing the account.
Shaffer v. Heitner
  Justice Marshall’s response?
  There has been no case-specific inquiry as to whether
   the property is in the state to avoid payment
   elsewhere, to see if that rationale applies in this case.
  Presence of bank account in Maine does not support
   jurisdiction to adjudicate the underlying claim.
  At most, Maine should have jurisdiction to attach that
   property as security while the state with proper
   personal jurisdiction is litigating the issue.
Shaffer v. Heitner
  Under Shaffer v. Heitner, could Maine exercise
   personal jurisdiction over Donia to adjudicate
   entitlement to the money by garnishing Donia's
   Maine bank account?
  What if Donia stole a $100,000 Picasso
   painting (rather than cash) and moved it from
   Texas to Maine? Would Maine court be able
   to exercise personal jurisdiction over Donia in
   an action to recover the painting?
  The "relationship among the defendant, the
   forum, and the litigation" (p. 111) becomes
   stronger when the property is not fungible.
Shaffer v. Heitner
    Back to the $100,000 cash example. Say Peter sues
     Donia in Texas, which has personal jurisdiction, and
     Peter recovers a judgment in Texas against Donia for
     $100,000. Now Peter goes to enforce the judgment in
     Maine. After Shaffer, is there a due process problem
     with allowing Maine to enforce this judgment without
     making a minimum contacts analysis?
    No -- full faith and credit requires Maine to recognize
     and enforce the Texas judgment.
    Why doesn’t Maine have to do another minimum
     contacts analysis?
Shaffer v. Heitner

  Argument for jurisdiction #2: Jurisdiction based
   only upon the presence of property in the state
   is that it assures plaintiff of a certain forum and
   avoids the uncertainty created by the
   International Shoe factors analysis.
  How does Justice Marshall respond?
  The application of International Shoe is easy in
   most cases, and in the hard ones, we're not
   going to sacrifice fairness for certainty.
Shaffer v. Heitner

  Plaintiff’s argument # 3: jurisdiction
   based only upon the presence of
   property in the state is all right because
   of the “long history” of in rem jurisdiction.
  How does Justice Marshall respond?
  “Traditional notions of fair play and
   substantial justice" can be offended by
   old forms as well as new.
Shaffer v. Heitner
    After Shaffer, if property in the forum state alone is not
     sufficient for personal jurisdiction, what is its
     jurisdictional significance?
    Depends on the relationship between the claim and
     the property. Property in the forum may still supply the
     basis for jurisdiction because it counts as a contact
     with the forum state. "[T]he presence of property in a
     State may bear on the existence of jurisdiction by
     providing contacts among the forum state, the
     defendant, and the litigation.”
    For example, “when claims to the property itself are
     the source of the underlying controversy between the
     plaintiff and the defendant, it would be unusual for the
     State where the property is located not to have
Shaffer v. Heitner

  Is any part of Pennoyer v. Neff overruled
   by this case?
  “For the type of quasi in rem action
   typified by Harris v. Balk [i.e., attachment
   jurisdiction], . . . accepting the proposed
   analysis would result in significant
Shaffer v. Heitner
    Applying the minimum contacts test, did Delaware
     have jurisdiction over defendants based on their
     Delaware contacts, in the majority's view?
    Only contact (besides the “deemed” ownership of
     stock in Delaware) was they were directors of a
     Delaware corporation. Delaware had not enacted a
     statute requiring directors to consent to jurisdiction
    But if Delaware had such a statute (which it now
     does), could Delaware constitutionally exercise
     jurisdiction over the officers and directors?
    The majority's opinion suggests it could, and a
     Delaware state court has so held. The statute places
     potential defendants on notice. It is related to their
     activities because the statute only covers malfeasance
     in their corporate capacity.
Shaffer v. Heitner
  With what part of the Court’s opinion does Justice
   Brennan concur?
  International Shoe standard should be applied in all
  On what point did Justice Brennan disagree with
   Justice Marshall?
  Says the Court shouldn't even have reached the
   minimum contacts analysis because it wasn't argued
   and there was no record (through discovery or
   otherwise) below.
  What was the point of Justice Powell's concurrence?
  Believed that a court should retain quasi in rem
   jurisdiction over real property.
Hypotheticals, pp. 121-122

  Fred is a CA citizen who owns real
   estate in DE.
  (a) Fred doesn’t make his mortgage
   payments. Bank wants to foreclose. Is
   there personal jurisdiction over Fred for a
   foreclosure action in DE?
  (b) Someone trips and falls on Fred’s
   property in DE. Is there p.j. over Fred in
   a personal injury action filed in DE?
Hypotheticals, p. 122

  2(c). Sally, a CA citizen, has a contract with
   Fred. The deal goes bad, and Sally sues Fred
   in CA and wins. Fred refuses to pay the
   judgment. Sally goes to DE and enforces the
   judgment by attaching Fred’s Delaware real
   estate. Is this permitted after Shaffer?
  (d). Suppose the directors in Shaffer had
   owned real estate in DE instead of stock.
   Would that have changed the result?

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