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Civil Procedure I
University of Cincinnati School of Law
Solimine, Michael E.

Civ Pro I Outline: Fall 2007

PERSONAL JURISDICTION AND RELATED ISSUES

-Early Personal Jurisdiction
-Modern Personal Jurisdiction
-Choice of Law
-Consent
-Other Issues???
-Jurisdiction Over Property
-Venue
-Forum Non Conveniens

PERSONAL JURISDICTION:

I. Power Theory of Personal Jurisdiction (Early Cases)
– A state has complete authority/power over persons and property within its borders, and none outside…must serve a person within the state boundary

A. Pennoyer v. Neff: USSC-1887

– FACTS: Case involves two law suits. Mitchell v. Neff and Neff v. Pennoyer
o Mitchell v. Neff: Mitchell sues Neff in Oregon, and is awarded judgment against him, even though he is a non-resident (CA), and is not served personally (Newspaper in CA).
§ After judgment, Neff purchases property in Oregon. Mitchell immediately seizes this property for payment on the judgment, sells property to Pennoyer
o Neff v. Pennoyer: Neff now sues Pennoyer alleging Mitchell suit is invalid, b/c Oregon court did not have jurisdiction over Neff, a non-resident (CA).
– HOLDING: In state personal service is required for a court to exercise personal jurisdiction over a non-resident. Personal service is not required for state to exercise jurisdiction over property within the state (in-rem jurisdiction.

– NOTE: Mitchell attached the property retroactively: suit might have been upheld if Neff owned property in Oregon prior to suit.

– NOTE: Direct v. Collateral attack:
o Direct Attack: Neff could have moved to dismiss under lack of jurisdiction, appealed on grounds of lack of jurisdiction, move to reopen judgment FRCP 60. (certain limited circumstances)
§ Neff never knew about suit so no direct attack
o Collateral Attack: 2nd Law Suit regarding outcome of the first.

– NOTE: Consent: D can consent to the personal jurisdiction of another state.

B. Hesse v. Pawloski: Supreme Court 1927
– this was only personal jurisdiction case between 1877 and 1945

– Facts: P, Hess sued D, Pawloski, a non-resident in Mass. State court for injuries sustained in an auto accident occurring in Mass. Mass. had a statute providing that non-resident using state highways automatically appoints a Mass. official as agent for in-state service of process. Then notified by registered mail.
– Holding: Supreme Court upheld this means of obtaining personal jurisdiction, Service was made on an agent within the state. Cites Kane v. New Jersey, a similar case where agent was not automatic
– POWER THEORY: In persoam jurisdiction, Power theory is still good law, so must serve process within the state. Set up legal process where registrar receives notice, and satisfies power theory. Also registered mail provision satisfies due process.
o Could view as consent to jurisdiction.
o Public Policy issue: prevent poor driving.

– NOTE: Power theory was difficult to apply to corporations. Presence Theory
– NOTE: Problem: fraudulent inducement into the forum

II. Shift to Minimum Contacts Standard
-Power theory was a RULE
-Minimum contacts STANDARD: looks at facts of each case

A. International Shoe Co. v. Washington – Supreme Court (1945)

– FACTS: Shoe, P, was incorporated in Delaware with headquarters(PPB) in St. Louis. It employed 13 shoe salesmen in WA who were residents of WA. The salesmen reported to Shoe in St. Louis, but Shoe did not maintain any permanent business sites in WA. Sales men showed shoes in hotels, or temp. rental space. WA statute required all companies in the state to pay into the unemployment fund. WA sued Shoe for back payments. WA state Supreme Court found shoe’s activities were sufficient presence for jurisdiction. Shoe appealed, claiming no personal jurisdiction, not present in WA the business contacts are attenuated and indirect…also contractor not employer.
– HOLDING: Minimum Contacts theory: Personal jurisdiction requires that D “have certain minimum contacts with the forum, such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Implicitly overrules Pennoyer, in fact, cites it as good law, while actually rejecting its holding.
– REASONING: If a corporation has minimum contacts with a state, it enjoys the protection of its law, out of this arises obligations. i.e. answering law suits.
a) Two types of contacts: Either could support personal jurisdiction if sufficiently developed
i. related to the controversy (specific jurisdiction)
ii. unrelated to the controversy (general jurisdiction)

– NOTE: case dealt with corporations, since applied to human defendants.

B. McGee v. International Life Ins. Co. – SC (1957) *Expansive reading of minimum contacts for contracts*: Apogee of Liberality
– FACTS: McGee buys a policy from a company in Arizona. The company sells out to a company in Texas. The Texas company has no contacts within California except that McGee has been mailing from California the premiums. McGee dies and the Life refuses to pay the policy because they think it was a case of suicide. California claims jurisdiction and gives McGee the default judgment, because Life doesn’t even bother to go to Cali. McGee goes to Texas to try and enforce the Cali ruling, but Texas says that the Cali court didn’t have jurisdiction. McGee appeals to the US Supreme Court, which finds for McGee under the “minimum contacts” doctrine.
– HOLDING: Substantial Connection: minimum contacts are satisfied when suit is based on a contract with substantial connection with the state.
o Also Due Process not violated by having to defend case in CA: D had notice and time to prepare defense.
– REASONING: court considered the modern realities of business/economy…transforming to a national economy. CA has an interest in the situation…needs to make companies pay claims. P would be disadvantaged to take case to Texas.

– NOTE: Apogee of liberality: now minimum contacts are not required…here a single dealing.

C. Hanson v. Denkla – Supreme Court (1958):
-Case was decided months after McGee. Return to Minimum Contacts and established Purposeful Availment

– Facts: Complicated case where a trust was set-up in Delaware by a PA woman who moved to Florida and died.
– HOLDING: Exercise of jurisdiction unconstitutional, because it is essential that there be some act by which D purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.
o Unilateral activity of those who claim some relationship with a nonresident D cannot satisfy the requirement of contact with the forum state.

III. STATE LONG-ARM STATUTES

– State courts are courts of limited jurisdiction, and only have jurisdiction granted to them by state legislatures. State Long-Arm Statutes are method for state courts to gain jurisdiction over non-resident parties, essentially codified the minimum contacts standard. Some states exercise jurisdiction to the maximum extent permitted by due process…others limit jurisdiction. Illinois was first state to pass long arm statute. CA exercises maximum jurisdiction.

A. Grey v. American Radiator and Standard Sanitary Corp. (ARSSC) Supreme Court 1961
-NOTE: TORT case illustrates the application of the IL long-arm statue, and expansive reading of minimum contacts

– FACTS: P was injured when a water heater exploded. He sued the Pennsylvania company that made the water heater and the Ohio company (Titan) that made the faulty valve. The court used part of the long-arm statute to assert jurisdiction. It interpreted “the commission of a tortious act within this state” to apply to tortious acts committed outside the state which caused injury within the state. Titan objected to jurisdiction b/c it did no business nor had an agent in IL.
– STREAM OF COMMERCE theory: if a commercial actor puts products into the “stream of commerce” with the expectation that they will be marketed in the forum it may be sued in that forum for injuries resulting there. (SOC phraseology was not used in the case: court stated that reasonable assumption that Titan’s dealing would result in substantial use and consumption in IL. Middlemen not

roversy as to provide jurisdiction

B. Calder v. Jones: Supreme Court 1984
-EFFECTS TEST: another factor for determining contacts

– FACTS: Jones,P, sues the Nation Enquirer, it’s editor (Calder), and a reporter (South) for libel in California. Calder and South are Florida residents and objected to jurisdiction. South wrote the story in FL, but travels to CA frequently for business. Calder has only been to CA twice, neither visit related to anything in this suit. Supreme Court upholds jurisdiction, but not based on the parties contacts with CA.
– HOLDING: Jurisdiction is constitutional, b/c CA is the focal point of the story, and the focal point of where the harm is suffered. The EFFECT of their FL actions are based and aimed at/in CA
– RULE: EFFECTS TEST for Intentional Torts: at least applies to libel/defamation, other intentional torts: Personal Jurisdiction can be established over non-resident D if (1) tort is intentional, (2) the forum is the focal point of the harm, (3) d expressly aimed conduct at the forum
o Distinguish GREY: here acts are intentional and directed at P, grey the negligence was undirected.

C. Keeton v. Hustler: Supreme Court 1984
– Single Publication rule/ Minimum Contacts doesn’t apply to P

– FACTS: Keeton, P, NY resident was allegedly defamed in Hustler Magazine, D (Ohio). She sued D in OH, but case was dismissed due to Statute of limitations. P, then sued D in NH, the only state with a longer SOL. P has no connection with the forum state. The magazine, which sold 10k copies in NH, objected to jurisdiction.
– HOLDING: Jurisdiction is constitutional: monthly sales constituted minimum contacts, and NH has an interest in addressing injuries that occur in the state.
– RULE 1: Single Publication Rule: allows P to sue in one forum for all damages it suffered nationwide.
– Rule 2: Minimum Contacts does not apply to P.

D. Burger King Corp v. Rudzewicz: Supreme Court 1985

– FACTS: Rudzewicz, D, entered into a franchize agreement with BK ,P, to operate a BK franchise in MI. BK is headquated in FL, and the contract contained a FL choice of law clause. D was unable to pay BK the stipulated fees, and BK sued this MI resident and operatior of a MI restaurant in FL federal court.
– HOLDING: Jurisdiction is proper.
– Brennan’s TWO PART BALLANCING TEST:
· Minimum Contacts: D must have min. contacts with the forum: applies the purposeful availement analysis.
§ Supreme Court saw D as reaching out to FL, established contacts
· Reasonableness: examine factors contributing to “fair play and substantial justice” (established by WWV and Shoe) such as burden on D to answer suit, P’s interest convient and effective relief, forum court’s interest in the matter.
§ Forum was reasonable, D was burdned, but P has strong interest in litigating in FL.
§ NOTE: if min contacts are satisfied, then examine the reasonableness, if unreasonable then jurisdiction may be unreasonable. HOWEVER, if min contacts are lacking, reasonablenss may make jurisdiction appropriate.
– NOTE: Approach echos Brennan’s dissent in WWV where he suggested a balancing test, and alluded to factors indicating reasonableness.
– NOTE: a K does not establish min contacts, but McGee is cited as good law…lessend prescedential value.