TERRITORIAL JURISDICTION
Definition: the power of a court to render an opinion binding on the parties or particular property involved in the action. The very act of filing a lawsuit is submission by π to the jurisdiction of the court. The following rules deal with jurisdiction over the person or property of Δ.
I. Jurisdiction over the person: involved in cases where π seeks a decision binding over the person of the Δ. Applying the principle that each state has sovereign control over persons and things within its borders, the court in Pennoyer v. Neff found J existing where Δ was present in the forum state and served with process there. Rules have evolved where Δ is a non-resident and not present in the forum state, and the answer to the question requires 2 steps: 1) is there a statute authorizing the assertion of J over persons outside the forum state’s borders, and 2) does the application of the statute meet the constitutional test set in International Shoe. These inquiries are not necessary where the basis of J is Δ’s consent to it (see below).
1. Statutes authorizing assertion of J over non-residents of the forum state:
a. State long-arm statutes: basically 2 types – ones asserting J to the possible constitutional limit (e.g. California) and others listing the kinds of activities on behalf of non-residents that can serve as basis for J (e.g. New York).
b. Rule 4(k) applies to in personam J of federal courts. In the absence of a federal statute specifically authorizing long-arm J (e.g. antitrust, federal securities laws), there are 3 possibilities:
i. Federal courts may use the state’s long-arm statute or statute authorizing attachment of property owned by non-residents;
ii. Service of process is authorized within 100 miles from the federal courthouse for certain additional parties (joined under rule 14 or rule 19) and state lines do not matter in such cases;
iii. Where the claim arises under federal law (but the federal statute does not provide for service of process) and the Δ is not subject to the general J of any state (=> state long arm statutes inapplicable), federal J based on nation-wide aggregation of contacts is possible if it meets the constitutional requirements (fair) – rule 4(k)(2). Nationwide service of process is allowed. Note that π will have to comply also with venue and forum non conveniens or § 1404(a). The rule was adopted to fill the gap at issue in Omni Capital.
c. Federal interpleader actions (§ 1335 – a stakeholder ($500 or more) with a limited fund to which there are conflicting claims is seeking a ruling as to how the fund should be distributed): nationwide service of process available (§ 2361), no limitations on federal courts’ personal J (due process need not be considered in these cases!).
d. When authorized by a federal statute (e.g. securities cases, some anti-trust cases).
2. Court’s power to assert J over non-residents that cannot be found within the forum state’s boundaries is limited by the constitutional requirement of due process. The court in International Shoe Co. v. Washington set the test of “minimum contacts”: Δ should have such contacts with the forum state, that assertion
based assertion of J on Δ’s intention that its actions have an effect in the forum state (libelous story). Where Δ has injected its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state, J can be found (however, in WW Volkswagen J was denied because unilateral actions of π were involved and alternative Δs existed); in Asahi Metal Industry Co. J was also denied because both π and Δ were foreign companies and their interest in litigating within the US was found insufficient to justify J[2]). Burger King: to assess whether a contract
[1] They purposefully catered the national market, received benefit from a countrywide market, reasonably should have expected suits around the country, which was deemed to be sufficient [2] The court was split on whether Δ’s contacts (placing a product in the stream of commerce outside the US with the expectation that it may end in US and that Δ may be sued there – indirect contact) were alone sufficient to constitute minimum contacts absent any other factors (majority –yes, O’Connor minority – no). In Gray v. American Radiator J was upheld over a component supplier whose product was sent into the forum state as part of a product manufactured by its customer.