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Civil Procedure I
University of Iowa School of Law
Stensvaag, John-Mark

 
Civil Procedure
Stensvaag
Spring 2013

Chapter 2: Jurisdiction Over the Parties or Their Property

Under in personam personal jurisdiction analysis, a corporation is subject to personal jurisdiction in states which it conducts substantial and continuous business activities (would include but not limited to PBB)

I. The Traditional Bases for Jurisdiction
Methods for Obtaining In Personam Jurisdiction:
1.       Process serving in the state (Presence)
2.       Domicile
3.       Voluntary General Appearance
a.        Ex: If Neff hears about case and fights on the merits
4.       Actual Consent
5.       Implied Consent
Personal Jurisdiction Based on Property’s Presence
1.       True In Rem
a.        Only Issue: Who owns the property?
b.       Resulting Judgment will bind the whole world
2.       Quasi In Rem
a.        Only Issue: Who owns the property
b.       However we only bing the people we name in the lawsuit, not the whole world
3.       Quasi In Rem “Gimmick”
a.        A claim not about who owns the property
b.       Does not bind the whole world
c.        Uses property as hostage and justifies bringing case to this court so plaintiff may recover property as an asset, however if you bring like this plaintiff can only collect property
A. Pennoyer v. Neff
·         Downfall was that the property was not attached at the outset of the lawsuit
·         Plaintiff not free to bring wherever they choose (Fourteenth Amendment protections of due process)

II. Expanding the Bases of Personal Jurisdiction
A. Hess v. Pawloski
Facts: Mass. (long-arm) statute says if you drive in the state, someone will be appointed from the register to receive service of process on your behalf (IMPLIED CONSENT)
Held: Mass. had acquired personal jurisdiction through these means, the statute does not violate due process. Process could not be served simply by mailing. Process cannot cross state lines.
Kane v. N.J – State can exclude non-resident motorist
Flexner – cannot keep businesses out
* Conduct in the sate is really what justifies personal jurisdiction. Consent was the tool it had at this time, until International Shoe.
III. A New Theory of Jurisdiction
A. Introduction
B. International Shoe Co. v. Washington (1945)
Facts: Int’l Shoe is incorporate in Delaware with home office (PBB) in St. Louis. Sales officers solicit sales in Washington. Shoes are delivered from St. Louis directly to Washington homes.
Issue: Avoiding personal jurisdiction to pay the state unemployment compensation fund
Test: Certain Minimum Contacts. There must be a sufficient connection (or contacts) with forum state, of which presence is the prime, but not only example. The lawsuit should be related to the contacts with the state, however maybe it doesn’t have to.
Functions of Minimum Contacts:
1.      Protects defendant against burdens of litigating in inconvenient forum “fairness”
2.      Ensures that states do not reach beyond the limits imposed on them as coequal sovereigns (“sovereignty”)
C. General v. Specific Jurisdiction
III. General Jurisdiction and State Long-Arm Statutes
·         General Jurisdiction is when a claim does not arise from contacts with the forum state. Then must assess if the defendant has had “systematic and continuous” activity with the state.
IV. Specific Jurisdiction and State Long-Arm Statutes
·         Specific Jurisdiction is when a claim arises from contacts with the forum state
·         Test:
1.       Is there a state statute that authorizes it to exercise Personal Jurisdiction under the circumstances of the case?
2.       If yes, would it be constitutional under the due process clause to do so?
a.        Remember: The reach of the long-arm may sometimes exceed its constitutional grasp
A. Development of Long-Arm Statutes
1. Gray v. American Radiator & Standard Sanitary Corp. (1961)
Facts: A water heater exploded and injured ¶. She claims safety valve was negligently constructed by Titan Valve, a foreign co. ¶ served Titan’s Agent in Ohio. Titan did not operate in Ill. but sold to Am. Radiator (who did) and made warranties to them
Importance: Defendant acts outside the state but cause an effect within it
Held: Titan’s actions must have a “substantial connection” to the State. ∆’s association with the state was sufficient. Invoked benefits and Protection of the laws
2. Conn v. Whitmore (1959) (Supp: 1)
Importance: Tort cases to this point were trying to protect plaintiff victim, but with contract cases there is no instinctive sympathy.
B. Due Process and Long-Arm Statutes
1. World Wide Volkswagen Corp. v. Woodsen (1980)
Facts: Car bought in N.Y was hit from behind in Oklahoma, causing a fire and injuries. ¶ brought product liability action in OK
Held: There must be ‘minimum contacts’ between ∆. World Wide had no activity at all in Oklahoma. Retract Gray because stating that there must be connection between the defendant and the state, and not just the transaction and the state.
Foreseeable hailability standard: The defendant’s conduct and connection with forum state are such that he should reasonably anticipate being hailed into court there.
Test: Foreseeable forum state purchaser
2. Notes
a. Insurance Corp. of Ireland v. Compagnie (1982)
b. Keeton v. Hustler Magazine Inc. (1984)
Facts: Related to magazine distribution, interest in libel. Was PJ
V. Jurisdiction Based Upon Power Over Property
A. Three Pennington Principles (“Gimmick”):
1.      Quasi in rem jurisdiction may be based on the presence in a forum state of a non resident defendant’s intangible property
2.      Quasi in rem jurisdiction is permitted even though the non-resident defendant’s right to the property is disputed.
3.      Quasi in rem jurisdiction is permitted even though the non resident defendant’s claim to the asset is inchoate (inchoate=claim that is presently incomplete or not quite right)

B. Harris v. Balk (1905) (Supp: 1)
Facts: Harris owes money to Balk, Balk owes to Epstein. Harris is from N.C., so is Balk. Harris goes to Maryland, Epstein lives in Maryland. Balk is creditor to Harris, Epstein is creditor to Balk.
Held: 1) Plaintiff may enforce her claim against a defendant debtor, and 2) a debtor accepts personal jurisdiction wherever he… can be served.
C. New York Life Insurance Co. v. Dunlevy (1916) p.719
Principle: Except for the gimmick, a claimant’s right to a fund cannot be cut off without having first obtained in personam jurisdiction over the claimant
D. Western Union Tel. Co. v. Commonwealth of Pennsylvania (1961)
Principle: It denies due process to order a stakeholder to pay over money if other claimants are not bound by the judgment, so that the stakeholder may be required to pay more than once.
E. Shaffer v. Heitner (1977)
Facts: Shared of Greyhound Stock, filed a shareholder’s derivative suit corporation lost his value of stock due to recklessness he claims. Seized the stock in Delaware, notified by mail/paper. Defendant says property not capable of seizure in Delaware.
Held: Should apply minimum contacts test to “in rem” too
Held: ALWAYS ALWAYS MINIMUM CONTACTS
F. See Articles about Shaffer in Supplement
G. The Seider Doctrine (Supp: 11)
·         Since you claim quasi in rem is limited to asset, cannot give issue preclusion because limited to the property they asserted
·         “The promise to defend the insured is assumed to furnish the jurisdiction for a civil suit which must be validly commenced before the obligation to defend can possibly accrue”
H. O’Connor v. Lee-Hy Paving Corp. (1978) (Supp:12)
Facts: Plaintiff attaches insurance company’s obligations to defend and indemnify Lee-Hy under its policy
Held: The right/obligation to indemnify is not enough to bring a lawsuit in that jurisdiction
I. Rush v. Savchuk (1980) (Supp:16)
Facts: Passenger sues driver, accident in Indiana. Could not bring to Indiana because of guest statute. Passenger moves to Minnesota, brings suit there.
Held: If a defendant has minimum contacts, you can assert in personam jurisdiction to shake him by the ankles and get every dime.
J. Asahi Metal Industry Co. v. Superior Court (1987)
Facts: Man has accident on Honda Motorcycle, kills wife. Man sues the tire maker and the valve maker for product liability. Tire maker from Taiwan and valve maker from Japan. Tire maker says “I’m not liable to plaintiff, but if I am, valve maker will indemnify me.” Plaintiff recovers so now indemnity suit between Tire and Valve maker.
Arguments: The valve maker knew its valves were being soled to California purchasers so was foreseeable
Held: (Not by majority opinion) A foreseeable forum state purchaser is not enough
Held: 5 justices believed there were minimum contacts but all of them thought it would be unreasonable and unfair to assert personal jurisdiction
VI. A Refrain: Jurisdiction Based Upon Physical Presence
A. Burnham v. Superior Court (1990)
Facts: Divorce case. Wife in California, husband in New Jersey, and husband comes to CA to visit his kids and do business. He is served with process in the state. They had agreed on the reason for divorce as “irreconcilable differences,” he filed first and changed to “desertion.” She wants ownership of all his worldy goods acquired during marriage and custody.
1. Notes on Burnham (Supp:23)
VII. Challenging a Court’s Exercise of Jurisdiction over the Person or Property
A. Raising the Jurisdictional Issue Directly
B. Coll

orp. v. Allapattah Services, Inc.
H. Horton v. Liberty Mutual Insurance Co. (1961) (Supp:31)
Facts: Horton sought $14,000 from state administrative agency, but only received $1,050. $10,000 was required at the time as minimum for amount in controversy. Insurance company seeks to set aside $1,000 and Horton counterclaims for $14,000
Held: The well-pleaded complaint rule does not apply to diversity jurisdiction
Not the law anywhere else.
III. Supplemental Claims and Parties
A.  United Mine Workers of America v. Gibbs (1966) p.325
Facts: Gibbs was to supervise a mine adjacent to a shut down one that was against the labor workers, also had a contract to haul the mine's coal to the nearest railroad loading point. Armed members of the Local Union forcibly prevented opening of the mine, because they were not given jobs to work there. Gibbs lost his job as superintendent, since they were not able to open the mine. He lost other jobs, claiming these effects were a result of a concerted union plan against him.
Procedural Facts: Gibbs asserted a federal claim against the defendant under the LMR Act and a second claim under state law for interference with contractual relations. Both based on the same dispute.
Held: The federal court had pendent jurisdiction over the state law claim because it was joined with the federal labor law claim. As long as the claims arise out of the same “common nucleus of operative fact”. Courts have the power to hear these claims but they are not required to hear them. The judge must decide is it makes sense to exercise that jurisdiction.
Pendent Jurisdiction: When plaintiff asserts a jurisdictionally proper claim against a nondiverse party and added on a related state law claim.
Test:
1.       Does the claim arise out of the “common nucleus of operative fact”?
2.       Does it make sense to exercise that jurisdiction?
B. Note on Pendent and Ancillary Jurisdiction Following Gibbs
After these cases, Congress passed 28 USC §1367 with provides the necessary statutory authority to hear related claims that were unavailable under these cases before.
1. Aldinger v. Howard (1976)
Facts: In 1976, the plaintiff had a job with the county of Spokane. She was fired by her supervisor because she was living with her boyfriend. (!) She sued Howard for violation of her civil rights. There was subject matter jurisdiction because of Section 1983 (federal), she worked for the government and she was denied her constitutional rights. No one objected to suing Howard. Then (and the jurisdictional problem) she wanted to bring the County as a party also. She was bringing a state law claim against the county, while bringing a federal claim against Howard. This is a PENDENT case because it is being brought by the plaintiff. But, Congress did not want counties to be suable in federal court at all. 
Held: Even though the case could be viewed as part of a single constitutional case under the first part of Gibbs, allowing a state law claim against the county would be inconsistent with the apparent intent of Congress to bar federal civil rights claims under §1983 against counties. Thus there was no statutory grant of jurisdiction over the pendent party claim.
2. Owen Equipment & Erection Co. v. Kroger (1978) p.332
Facts: Kroger sues Power Co. in Nebraska for wrongful death of her husband on the job. She is a citizen of Iowa. Tort claim, in federal court because of diversity jurisdiction. The Power Co. brought in Owen Equipment and said they were responsible.  Owen is from Nebraska and Iowa. Kroger asserted a direct claim against Owen even though they were not diverse and there was no federal question.
Held: Plaintiff may not assert a state claim against a non-diverse third-party defendant. However the defendant add a party and assert a state claim against him.