Civil Procedure – Spring 08’
Choosing: State and Federal Judicial Systems
1) Federal System
i) U.S. Supreme Court – Free to choose the cases it wishes to hear
ii) Court of Appeals (Circuit) – Appellate jurisdiction, there are 12 circuits, In reality this court sometimes is the last resort in many federal question cases
iii) District Court – Where judicial cases originate, limited subject matter jurisdiction
2) State
i) State Supreme Court – Highest state court has the last word, sometimes the last court that will hear the case
ii) Appellate Court – Intermediate appellate, usually have mandatory jurisdiction for appealed cases.
iii) Trial Court – Where cases originate, Small claims
Factors Influencing the Selection of a Court
1) Personal Jurisdiction: the power to issue a judgment binding a person or affecting his property, requiring some voluntary contact between the defendant and the forum state.
i) A State Court can assert personal jurisdiction only if its power is authorized by statute and does not exceed the limitation of the Due Process Clause, which also gives the right to notice and the opportunity to be hard in state court.
ii) A Federal Court is limited by Due Process from the 5th Amendment but not to the extent state courts are.
2) Three Categories of Territorial Jurisdiction
i) In Personam Jurisdiction:
(a) Imposes a personal liability or obligation on one person in favor of another.
(b) If damages cannot be fully recovered, Plaintiff may collect the unsatisfied portion of the judgment in any other state or federal court.
1. Full Faith and Credit Clause: Makes the valid in personam judgment of one state enforceable in all other states.
ii) In Rem Jurisdiction
(a) Affects the interests of all persons in designated property
(b) Focuses not on the person of the Defendant but on some property located within the forum.
(c) The function of in rem jurisdiction is to act upon the thing.
iii) Quasi In Rem Jurisdiction
(a) Affects the interests of particular persons in designated property
(b) The value of a quasi in rem judgment cannot exceed the value of the res (thing)
3) Traditional Accepted Forms of Personal Jurisdiction
i) Suit in the Defendant’s Home State
(a) Courts of the defendant’s home state traditionally have personal jurisdiction over the defendant in all cases.
(b) Home state is where the defendant might have residence, citizenship, and domicile to the forum state.
ii) Personal Jurisdiction over nonresidents through waiver or express consent
(a) Waiver – Nonresident plaintiffs waive due process objection to the court’s jurisdiction by filing suit
(b) Special Appearance – Permits the defendant to participate in the case without submitting to the court’s personal jurisdiction.
· However, if the defendant used this opportunity to urge any other reason why this case should be dismissed or to dispute the merits of plaintiff case, that is general appearance, which functioned as a submission to the court’s jurisdiction.
(c) Limited appearance – pertains to quasi in rem jurisdiction to appear and resist a judgment on the merits against the property without, by so doing, submitting to the court’s in personam jurisdiction
Personal Jurisdiction over Nonresident Defendants
4) Due Process Focused on Forum State Boundaries
· Due Process clause does not actually confer any jurisdiction on state courts; it only defines the outer bounds of permissible. In other words, it tells states that “When you authorize your courts to exercise jurisdiction, you may not go any further than this.”
i) Pennoyer v. Neff:
(a) Every state possesses exclusive jurisdiction and sovereignty over persons and property within its territory; therefore, the courts of that state may enter a binding judgment against a non-resident only if he is personally served with process while within the state, or, if he has property within the state, if that property is attached before litigation begins.
(b) The case identified and resolved the tension between respect for judgments required under the Full Faith and Credit Clause of the Constitution and countervailing policies secured by the Due Process Clause
(c) The Court held that if a state court attempts to exercise in personam jurisdiction over the defendant, that is to adjudicate a case, “that involves merely a determination of the personal liability of the defendant, he must be brought within its jurisdiction by service of process within the state.
(d) Whereas, Quasi In rem jurisdiction was an alternative when the defendant had property in the jurisdiction, but this required a pre-judgment attachment of the property. Because Neff’s property was first seized to enforce a judgment already obtained, quasi in rem jurisdiction was unavailable.
Expanding the bases of Personal Jurisdiction
ii) Hess v. Pawloski
(a) A state has the power to declare that all non-residents who use its highways have impliedly consented to submit to the state’s jurisdiction for all actions arising from that highway usage.
(b) Extended the powers of authority to states to create the legal fiction that a non-resident using the highways appoints an agent for service of process.
5) Beginning of the Modern Era – New theory of Jurisdiction
i) Consent Theory – Presupposed that a foreign corporation could transact business in a state only with that state’s consent. Under this theory, a foreign corporation could be required to consent to service of process in the state by appointing an agent to receive process within the state, as a condition of obtaining permission to do business there.
ii) Presence Theory – A foreign corporation is amenable to process, if it is doing business within the state in such manner and to such extent as to warrant the inference that it is present there.
(a) International Shoe Co. v. Washington
1. A corporation will be subject to the jurisdiction of any state with which it has “minimum contacts” that make the exercise of jurisdiction consistent with “traditional notions of fair play and substantial justice.”
2. Generally, systematic and continuous activities within a state have been held to be enough to subject a corporation to jurisdiction there, especially when the cause of action arises from those activities, but even in some cases where the cause of action does not arise from those activities.
3. There is no mechanical way to decide whether, in particular case, a corporation’s contacts with a state have reached the level necessary for the exercise of jurisdiction; instead, the nature and extent of those contacts must be evaluated under traditional concepts of fairness and justice to determine whether it would be reasonable to require the corporation to defend a suit in that state.
4. Due process requires only that in order to subject a defendant to a judgment in personam, if he is not present within the territory of the forum is that he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice”
5. Due process will limit plaintiff to “reasonable” choices and tells us that an important focus for determining jurisdiction will be on the “contacts” the corporate defendant has with the forum state.
6. Two Types of Contacts:
i. Related: Defendant’s activity within the forum state related to the controversy
ii. Unrelated: Even when the facts of the controversy arose outside the forum, personal jurisdiction might be possible if a sufficient amount of the nonresident defendant’s other activities occurred within the forum.
7. Justification for holding:
i. Corporation enjoys benefits and protection of the laws of
personal jurisdiction under the circumstances of the case
ii) If there is, the court then asks if it would be constitutional under the due process clause to do so
Gray v. American Radiator & Standard Sanitary Corp.
a) A state can exercise jurisdiction over a corporation which does no business within the state, provided that the act giving rise to the litigation has a substantial connection to the state.
b) General rule, if a corporation elects to sell its products for ultimate use in another state, it is not unjust to hold it answerable there for any damage caused by defects in those products.
c) IL S. Court said that American Radiator has installed a lot of boilers in IL and they have Titan valves in it. Meaning IL will have jurisdiction over Titan. IL said that there is no valve store, there is this big commercial assembly line and they are at the end of it. Hence, they are held liable for it b/c they are making money from IL consumers. This is all called the “Stream of Commerce Theory.”
i) This idea, that a corporation which puts a product into the “stream of commerce” (i.e. sells it to someone other than the ultimate consumer), should expect and anticipate that the product might be swept by the current to other states, is examined at length in several very important U.S. Supreme Court Cases.
Due Process and Long-Arm Statutes
1) Interpreting the relevant Long-arm statute is only half of the job. Once the meaning of the statute has been determined, it must be asked whether the statute, as interpreted, is consistent with the Due Process Clause of the Constitution.
(1) McGee v. International Life Insurance Co.
(a) A state may exercise jurisdiction over a defendant whose contacts with that state consist of only a single act, provided that the act is what gave rise to the claim for which jurisdiction is being sought, and was deliberately directed toward the state.
(b) Although the court did not use the term, this is now referred to as nature of the contacts it does have us such as the justify the state’s exercise of jurisdiction over cases arising from those contacts, but not over cases unrelated to those contacts
(2) Hanson v. Denckla
(a) A state may not exercise jurisdiction over a defendant if the defendant’s contacts with the state are negligible and non-deliberate, and the claim does not arise from those contacts.
(b) A state may not exercise jurisdiction over a non-resident defendant with only sporadic and inadvertent contacts with the state, when those contacts do not give rise to the claim for which jurisdiction is being sought.
(c) Without some action “by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws,” it cannot be said to have the necessary contacts with that sate.
2) When you are faced with a Personal Jurisdiction question:
a) See if a long-arm jurisdiction applies, see if they have jurisdiction over the individual.
b) If the statute does apply to the situation, does it violate the Constitution
