Personal Jurisdiction
GENERAL PRINCIPLES
In order for a court to decide any issues it must have jurisdiction both over the parties and the subject matter of the lawsuit. Subject matter jurisdiction is a fundamental power of a court to decide the case before it. Jurisdiction over the parties is merely whether the court can decide the case between the actual parties before it over the matters or subject matters at issue. There are two requirements that must be met before a court has jurisdiction over the parties: 1. Substantive due process: The Constitution’s Fourteenth Amendment Due Process Clause imposes this requirement. The court must have power to act, either upon given property, or on a given person so as to subject him to personal liability. 2. Procedural due process: The defendant must be given adequate notice of the action against him, and an opportunity to be heard.
TYPES OF JURISDICTION
There are three basic kinds of jurisdiction over parties:
In personam jurisdiction: A court’s ability to order a defendant to obey the court. A court’s ability to issue a decree ordering the defendant to pay a plaintiff damages. This is then the power of the court to issue a judicial command or judgment personally against a party.
In rem jurisdiction: A court’s ability to adjudicate the rights of all claimants to a specific piece of property located within the jurisdiction. This is jurisdiction over a thing that is located within a geographical location over which the court has the authority to exercise its power.
Quasi in rem jurisdiction: A court’s ability to issue decrees involving property under its control. This includes an action for specific performance of a contract to purchase land and cases in which personal jurisdiction was lacking but the court had in rem jurisdiction over the property of the defendant. This type of action is usually commenced when physical property is seized within the court’s geographical area of power. The thing seized provides the basis for the court to issue is judgment even if there is no personal jurisdiction over the party that may own the property. This type of judgment only affects the property seized and cannot be sued upon in any other court.
There are also a number of theories and requirements that guide these three types of jurisdiction:
The Power Theory: Due Process under the fourteenth amendment requires that every state have exclusive jurisdiction over persons and property within the state. States may not exercise direct authority over persons or property outside the state. The power theory disregards the significance of the indirect effects of full faith and credit between states in honoring judgments from other states. This theory accepts transient jurisdiction because any service within the state is sufficient for jurisdiction. The common example of transient jurisdiction is the service of a passenger in an airplane while over the state. However, transient jurisdiction is not permitted if the defendant was fraudulently induced into the state. The power theory permits quasi in rem jurisdiction. The absence of service within the jurisdiction does not limit the court’s power to dispose of property to satisfy unrelated claims. Property is interpreted to include debt obligations and insurance indemnification clauses. Prejudgment seizure of property in the state is sufficient notice. Exceptions were made to this rigid theory by allowing states to determine the status of one of its citizens toward a nonresident (divorces). States could also require noncitizens to consent to suit within the state as a condition for conducting activities in the state.
The Minimum Contacts Theory: Due Process requires that a defendant have certain minimum contacts with the state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Minimum contact includes any systematic and continuous activity. Single contacts have been held to be sufficient to meet the systematic and continuous activity requirement. Minimum contact is satisfied if a defendant purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. That means that the defendant took actions that were purposefully directed towards the forum state.
Unreasonable Exercise: Even if there are minimum contacts with the forum state, the court will not exercise jurisdiction if considerations of “fair play and substantial justice” would require making a defendant to defend in the forum state so unreasonable as to constitute a due process violation. As a rule of thumb once the required minimum contacts with the forum state are shown, it will not be unreasonable for the case to be tried there.
Long-arm statutes: This is a statute which permits the court of a state to obtain jurisdiction over persons not physically present within the state at the time of service. Most of them allow for jurisdiction over someone who is out of state for committing a tort that has its effects within the forum state. Long-arms provide for “substitute” means of service, since in-state personal service is not possible. Most provide for out of state service by registered mail.
JURISDICTION OVER INDIVIDUALS
There are a number of common well established methods of obtaining personal jurisdiction over individuals.
Consent: A party can consent to jurisdiction within a state. This is usually done by contract. Consent may also be implied where a party is sued even though there is no jurisdiction over the party and the party answers the complaint or counterclaims and joins the lawsuit. Merely going into a jurisdiction to litigate jurisdiction under special appearances is not consent either express of implied.
Presence: Jurisdiction may be exercised over an individual by virtue of his presence within the forum state. Even an out-of-state resident who comes into the forum state only briefly, personal jurisdiction over him may be gotten as long as service was made on him while he was in the forum state. However, from case law most states will not tolerate tricks or ruses to get someone into the forum state. If the party is in the forum state on legal business such as testifying at a criminal trial, presence in the forum state will not be sufficient for jurisdiction. If does not matter how long the person is within the forum state for presence with service to enable jurisdiction against the person.
Residence: Some states allow jurisdiction based on residence in the forum state, even the party is absent from the state.
Domicile: Jurisdiction can be exercised over a person who is domiciled within the forum state. Domicile is a legal definition and is not dependent on physical presence within the forum state. A person is per se assumed to be domiciled in the place
re seized to satisfy a potential judgment. These actions would have been in personam had personal jurisdiction had been obtained over the owner of the thing. These actions are not subject to res judicata in other states. There is a minority position in some states that holds that if a party makes an appearance and fully litigates certain issues those issues are res judicata. Quasi in rem jurisdiction requires a finding of minimum contacts with the forum state such that in personam jurisdiction could be exercised (Shaffer v. Heitner). The Shaffer ruling put an end to quasi-in rem jurisdiction. Federal courts follow the law of the state with respect to quasi-in rem jurisdiction. There is a split on how to determine $75,000 jurisdictional limits as against the property attached or the amount actually claimed.
Limited Appearances: Some states allow a party to make a limited appearance in in rem or quasi in rem actions to defend the suits on their merits only to the extent of the property attached. A special appearance is allowed to defend against jurisdiction only.
FEDERAL JURISDICTION
Personal jurisdiction over the defendant in a federal court is dependent on three things:
(1) Territory for service: If service took place in the appropriate territory needs to be determined; Generally in diversity and federal question suits, service of process can only be made within the territorial limits of the state in which the District Court sits or in places permitted by the state law of the state where the District Court sits. There are of course exceptions to this rule. Under FRCP 4(k)(1)(B), out-of-state service sometimes is permitted even if local law forbids it. This rule allows service anywhere within a 100-mile radius of the federal courthouse where suit is pending. The 100 mile provision applies only when those who are out-of-state will be brought in as additional parties to an already pending action. This provision can be used against third-party defendants and indispensable parties. Indispensable parties are those persons who are needed for just adjudication, and whose joinder will not involve subject matter jurisdiction problems.
Nationwide service of process is also available when Congress has provided for it. In suits against federal officials and agencies, and suits based on statutory interpleader, nationwide service of process is available. Also FRCP 4(k)(2) allows for a federal question suit to be brought any person or organization who cannot be sued in any state court. Generally those served under 4(k)(2) are foreigners. It is clear that there may be those who do not fit into the four categories of service for federal courts and thus they cannot be served even if they have minimum contacts with the forum.
