Ruescher 2017 Fall Civil Procedure
Step 1: Federal or State Court – here we focus on Federal Court
Step 2: Rule 4 (k)
4(k)(1)(B): only for third party defendants and necessary parties (100 miles from the District court) (Step 2A)
4(k)(1)(C): Only for special types of cases authorized by Congress (IP, bankruptcy, antitrust, securities) (Step 2B National Personal Jurisdiction, no 14A because it applies to state courts)
4(k)(2): Only for federal claims and only if the Rule 4(k)(1) cannot be used. (Step 2C, 5A)
4(k)(1)(A): use state rules (Step 2D)
Does a court of general subject matter jurisdiction in that state have the authority to exercise personal jurisdiction over the defendant?
Step 3 Exercise Personal Jurisdiction
Step 3A: whether the defendant consented to personal jurisdiction in the forum by:
Making general appearance, i.e. appointing an agent for service of process within the state; filing an answer; motion to dismiss for lack of personal jurisdiction (only submit to court’s determination on the issue of jurisdiction); and forum selection clause.
Three types of personal jurisdiction:
In Personam (person)
In rem (property)
Pennoyer (traditional bases of in personam jurisdiction, still a good law, but here we will focus on shoe; shoes only applies when you cannot serve process on D in the forum)
Tag (D, a natural person rather than a corporation, is served with process) – gives the court general personal jurisdiction (presence, no longer used in Shoe)
D’s domicile (general in personam jurisdiction)
Based upon consent
Hess v Pawloski (nonresident motorist act; driving into the Mass State implied that the defendant give consent to in personam jurisdiction – specific one)
Step 3B-1: is there general personal jurisdiction?
General Personal Jurisdiction
Rule 4 (k)(1)(a)
Q1: is there a general jurisdiction in the state statute in which the federal court locates (whether the state statute says it’s OK)
Q2: Constitutionality 14th Amendment Due Process Clause
Are the D’s continuous and systematic activities in the forum so substantial that we can conclude that the D can be sued in the forum on any claim, regardless of whether the claim relates to or arises from those activities?
Domicile is determined at the date of commencement of the litigation
No relatedness question, the defendant can be sue there for a claim that arose in any place of the U.S.
For corporations: place of incorporation and headquarter (principle place of businesses)
Philippine mining corporation conducted any business during the war in Ohio, keeping all company files in Ohio office, and the president supervise all activities of the company from Ohio office.
Continuous and systematic corporate operation within a state are so substantial and of such a nature as to justify suit against on causes of action arising from dealing entirely distinct from those activities.
Meeting the general jurisdiction requirement as a principal place of business.
Helicopter owned by Columbian corporation crashed in Peru and US Citizens died. The survivors sued in Texas. The corporation has no place of business in Texas and was not licensed to do business there. It sends executive officer to Texas to negotiate contracts, draw NY bank account on a Houston bank, purchase helicopters, equipment and training services from a Texas enterprise for substantial sum and sending personnel to Texas for training. However, all these facts does not give Texas court general jurisdiction over the Columbian corporation because the corporation has no principal place of business in the Texas.
Mere purchases [made in the forum state], even if occurring at regular intervals, are not enough to warrant a State’s assertion of [general] jurisdiction over a non-resident corporation in a cause of action not related to those purchase transactions.
Two soccer players from North Carolina were killed in Paris because of the defective tires manufactured in Europe. Relying on this fact and noting that the foreign manufacturers have made no effort to keep their products out of NC, a state appellate court upheld general jurisdiction over them. The USSC reversed unanimously and held that general jurisdiction cannot be based on a stream of commerce theory.
general jurisdiction cannot be based upon a stream of commerce theory: selling, buying and shipping products, even in a large volume, through the stream of commerce into the forum cannot constitute such substantial and continuous contact as to justify general personal jurisdiction.
Essentially at home where it is incorporated and where it has its principal place of business. Require more than continuous and systematic ties with the forum.
Daimlar (2014) (only place of incorporation and headquarter)
Reconfirmed the statement in goodyear but it left open the theoretical possibility that a corporate defendant might be “at home” other than where incorporated and where it has its principal place of business. (footnote 19)
Reasonableness and fairness would not be considered in general jurisdiction enquiries. (footnote 20, second para)
For individual persons: domicile or tag; for corporation, serving a corporate officer in the state does not give the state the authority to exercise personal jurisdiction over the defendant corporation.
Specific Personal Jurisdiction
Step 3C-1: Is there specific personal jurisdiction à Look for state long-arm statute, interpreting the statute (i.e., contractual issue, torts, or other issues): the case must fall within the terms of a statute
Be careful about the language:
Transacted substantial business v. any business in forum
Difference in interpreting the same language: whether a tort occurs where P is injured or where D did whatever she did (N.Y. long-arm statute: two different clause)
Step 3C-2: Constitutional= minimum contact + fair
Purposefully availing [itself of the
itutionally bad forum. à D must show litigation in the forum is so gravely difficult and inconvenient that a party unfairly is at a severe disadvantage in comparison with his opponent.
Wealth of parties doesn’t matter. Absent compelling considerations, a D who has purposefully derived commercial benefit from his affiliation in a forum may not defeat jurisdiction there simply because of his adversary’s greater wealth.
Stream of commerce
D manufactured valves in Ohio and sold them to a water heater manufacturer in Penn state. The Penn company then put those valve into its water heaters and sold the heaters nationwide. P bought one in Illinois, where the valve malfunction, exploded and injured the plaintiff.
The court speculate there were a large volume of valves sold to the Illinois although there was no record.
The majority in Volkswagen cited this case with approval.
This case does not explicitly involves the “stream of commerce”.
Asahi (1987) (4-4, Steven didn’t vote; failed to provide definitive guidance on how to assess purposeful availment and contact in a stream of commerce case) and only case in which the SC has rejected personal jurisdiction on the basis of unfairness.
Justice Brennan (Marshall, White, and Blackmum)
There is a relevant contact if D put the product into the stream of commerce and could reasonably anticipate that it would be used in State Z. This theory is consistent with the fact that D makes money because there is a market in State Z. Because there is a market for the Widgets (which use D’s component) in State Z, D sells more of its components. Thus, D is making money from State Z, which constitute purposeful availment. (so long as put a product in the stream of commerce and is “aware that the final product is being marketed in the forum state, the possibility of a lawsuit there cannot come as a surprise.)
Justice O’conner (joined by Rehnquist, Powell and Scalia):
There is no contact unless – in addition to what justice Brennan required – D had an intent to serve the market in State Z. D must have target State Z in some way – perhaps by advertising, giving advice to customer, having sales agent there, or by providing customer service there. Without this additional targeting of State Z, D’s component got into State Z only through the unilateral act of third party, which, under Volkswagen, cannot constitute purposefully availment.