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Civil Procedure I
University of Illinois School of Law
Stancil, Paul J.

Civil Procedure

Stancil

Spring 2012

The Origins

Pennoyer v. Neff

SCOTUS, 1877 (pp. 61-67)

Neff’s Oregon property was seized and sold by the sheriff to Pennoyer in order to satisfy the judgment.

Due process prevents suit against nonresident Δs who could only be found and served elsewhere.

(Presence is KEY)

· NOTICE MATTERS: If a state court attempts to exercise PJ over a Δ, the Δ “must be brought within its jurisdiction by service of process within the State, or his voluntary appearance.”

· Connection between the problem & the forum is irrelevant under Pennoyer.

· 3 ways to obtain proper PJ over non-residents (in Pennoyer era)

1. Appearance (if they appear at court)

2. Served within the state

3. Pre-suit attachment of the land

àBRIGHT LINE

· EXCEPTIONS: States can determine the Status (civil) of citizens (re: divorces), the status of Businesses registered in their state, Contract out obligation of service.

· Pennoyer is about FORMALISM

o Did they find him and serve him in the state? PJ

o Did they attach his property on time? Jurisdiction up the amount of the claim.

o Did they serve him outside his jurisdiction? No PJ

· International Shoe is about FAIRNESS

o Move away from predictability/clarity/efficient into fairness/balancing

Modern Underpinnings

International Shoe (PJ)

“traditional notions of fair play and substantial justice”

Employees contact

Facts

· International Shoe: Incorporated = Delaware; Principal Place of Business = Missouri

· No offices in Washington, no contracts in Washington, no stock of merchandise in Washington, no distributor in Washington

· Orders transmitted to Missouri for acceptance or rejection; all merchandise invoiced outside of Washington; no salesman can enter into a contract

· 11-13 employees in Washington supervised by a manager in Missouri for three years; salesman reside in Washington and principal activities in Washington, compensated by sales within state of Washington, rent sample rooms in hotels/business in Washington

Arguments

· International Shoe: 1) Activities within Washington are not sufficient to establish; 2) Because they weren’t present within the state they don’t need to pay tax; 3) Independent agents who work on commissions (with no benefits); 4) Orders themselves processed in Missouri; 5) Only $30,000 worth of business (insignificant compared to total business)

· Counterargument: 1) 1 employee is enough because otherwise you go down a slippery slope (Nicastro Dissent) à Nicastro shielding argument; 2) Don’t want to make Washington residents travel to Missouri

Holding

PERSONAL JURISDICTION EXISTS

· “Presence” within a state generally exists when a corporation’s activities in the state are continuous and systematic à General Jurisdiction Theory (before existed)

· A state may have personal jurisdiction over a defendant that is not present within a state, without violating the requirements of due process, if the defendant has certain minimum contacts with the state such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”

· Triange of CLAIM, FORUM and DEFENDANT à smaller the triangle, more likely to have PJ

· Two types of contacts a nonresident Δ could have with the forum. Sliding scale:

1) General Jurisdiction (Stancil does not like this distinction):

· Contacts unrelated to the controversy that are of such a nature as to justify suit against Δ in the current controversy; contacts are such that you can essentially be sued for anything in this jurisdiction.

· Were Δ’s activities systematic and continuous in the jurisdiction?

· Fair to be served in your hometown (fairer to be served where you live)

2) In the middle:

· Contacts are kind of there, but not specifically related to the claim. (This is where conversion claim – supposed to send money, soliciting business – comes in. Might be fair to sue him in IL on that claim)

· But, when you order something off the internet, do you care where it comes from? What if they claim you didn’t pay and they can sue you in THEIR home state? Fair? Tough issue.

3) Specific Jurisdiction (Stancil does not like this distinction):

· Δ has sufficient contacts related to the specific claim.

· Where the Δ’s activities fall short on general jurisdiction, the minimum contacts of International Shoe become important: the court is then concerned about the extent of those contacts AND the relation between those contacts and the claim on which the π is suing.

· Jurisdiction exists for the specific claim but not necessarily for other claims.

McGee v. International Life (PJ)

“A trend is clearly discernible toward expanding the permissible scope of state jurisdiction”

Contract

Facts

· Franklin is a resident of California and purchases life insurance from a Texas company that has no office or agent in California

· Franklin paid his premiums by mail in California home to the Texas office until death

Arguments

· McGee: Trend toward expanding state jurisdiction reach

o Globalized society

o Modernized technology

o Mail across state lines

· Two-way relationship (back and forth between plaintiffs)

Holding

PERSONAL JURISDICTION EXISTS

1. Suit was based on a contract that had substantial connection with California

a. Contract was delivered in California

b. Premium mailed from California

c. Franklin was a resident of California

b. In quasi in rem, you just use the property to go after the person, which is unfair, so really to make it fair, it should be all about the person

Powell Concurrence

Agrees that we should use International Shoe standard for in rem and in personam jurisdiction, but is concerned about real property

Brennan Dissent

Likes minimum contacts analysis, but believes there was enough minimum contacts because directors voluntarily associated themselves with the state of Delaware by entering into a long-term and fragile relationship with one of its domestic corporations

1. Wants jurisdiction over everyone, everywhere

à Destroys quasi in rem jurisdiction because we don’t want the property to be used as a pretext for a lawsuit

Modern Trilogy

World-Wide Volkswagen v. Woodson (NO PJ)

Products Liability/Stream of Commerce

Facts

· Accident takes place in Oklahoma; gas tank defect, rear-ended by drunk driver with no insurance or assets

· Plaintiffs in process of moving from New York to Arizona

· Plaintiffs hospitalized in Oklahoma, evidence and witnesses in Oklahoma

· Creek County, Oklahoma, is one of the best plaintiff forums in the country

· Four Defendants: Audi (car manufacturer), Volkswagen of America (Audi’s importer, US subsidiary), World-Wide Volkswagen (regional distributor) and Seaway (retail dealer)

· Only two contest jurisdiction: Seaway and World-Wide Volkswagen

o Audi and Volkswagen did not attempt to contest the personal jurisdiction claim because they had dealerships in Oklahoma, so purposefully availing themselves into Oklahoma à no leg to stand on in personal jurisdiction in Oklahoma

· Seaway and WWV are incorporated in New York and PPB is the tri-state area (NY, NJ and Conn.)

· No evidence that Seaway or WWV does any business in Oklahoma, ships/sells any products in Oklahoma or that even one car had previously been in Oklahoma prior to this

· No agent has received process in Oklahoma or purchases advertisements in any media calculated to reach Oklahoma

o Ex: St. Louis Post-Dispatch (Missouri newspaper) also targets East St. Louis, Illinois