I. JURISDICTION OVER PERSONS AND PROPERTY
(in the State Courts)
A. In Personam Jurisdiction
1. The Old Way-Strict Territorialism:
Pennoyer v. Neff (U.S. 1877)
F: P asserts title to premises. D won judgment against P in earlier circuit court action, (First lawsuit: Mitchell v. Neff, Mitchell is lawyer suing for unpaid legal services). P was non resident of the State and not personally served with the process, did not appear, and judgment was entered upon his default. Summons was by publication. Code of Oregon provides for such service if P has property in Oregon. Mitchell has sheriff confiscate land and sell it for his money.
P: Second lawsuit: Neff v. Pennoyer: Neff sues Pennoyer, a later buyer, to get off his land. Court held that original judgment against P was invalid from defects in the affidavit upon which the publication was obtained and in the affidavit by which the publication was proved.
A: Neff claims the sheriff took his land based on an invalid judgment.
I: Was the judgment in the Oregon state court against P void for want of personal service of process on him? Was proceeding in rem: by a direct proceeding against the property for that purpose?
H: Previous judgment was without validity, lower court judgment affirmed.
R: The jurisdiction of the court to inquire into and determine his obligations at all is only incidental to its jurisdiction over the property. Its jurisdiction cannot depend upon facts to be ascertained later: property must be attached or brought under the jurisdiction of the court first. Here the property’s first connection with the case was caused by a levy of the execution. Court cannot confer power ex post.
CLASS NOTES: How do you bring a nonresident into the jurisdiction? How could Mitchell have gotten valid jurisdiction? Personal service of process within the state of Oregon. Or attach Neff’s property, but must be before the lawsuit. Perhaps this might not have compelled him to enter the forum, but you can either bring the person or the property into the power of the court. To do this, it must be attached. Attached before will be a suit called “In Rem 555 Hill.” What falls under the jurisdiction is the property. Court says you could have personal service in the forum state, this does give notice, but more importantly it is sufficient to confer power.
IN PERSONAM JURISDICTION: requires service of process on that individual within that state, or a party can “consent” to the jurisdiction.
Side note on personal jurisdiction: he must be brought within jurisdiction by service of process within the state, or his voluntary appearance.
PURE IN REM JURISDICTION: (jurisdiction over the thing) to have a true in rem suit, the suit must be about the thing in question and being seized. The only thing to be adjudication are rights directly related to the thing being seized. Still must have notice and power.
QUASI IN REM JURISDICTION: you can seize a property, and then have a lawsuit about something unrelated to the property. This is when a court wants to leverage power over the property into power over the person. Follow same procedure of a pure in rem jurisdiction, provide notice.
Distinguish notice and power. There can be instances where court has given notice, but no power. Even if there is power, there must also be notice.
Courts authority over person in Quasi, power tops out at the value of the property seized. All court is authorized to do is to decide what to do with the property, usually orders sale of the property, and awards money to D.
Property must be attached prior to the lawsuit and there must be notice. Service by publication is permitted. (print in relevant newspaper, “property has been attached”)
Why is publication permitted in rem cases, but not in personam jurisdiction? SC says that people look after your property, you should be keeping tabs on it. We don’t expect people to check newspapers for themselves.
Arguably this is a questionable tactic. But it’s easy for people to take off, and rip off people, and there would be no means to bring them back in. Personam jurisdiction not flexible, so in rem has to be, otherwise result is unreasonable.
Why did Mitchell not attach before? Before Mitchell sued Neff, Neff had no property. Neff acquired title after the initial lawsuit.
Under Pennoyer v. Neff, if D refuses to enter state, and owns no property there, then P is out of luck, if P insists on bringing lawsuit in that state. What is Neff’s legal claim? What is in the root of the theory underlying the holding.
Hypo: P is suing D in state of MI. D is resident of NY, owns property in MI.
Under Pennoyer v. Neff:
1. Say P serves D personally in state of NY, comes to MI, appears in the court and challenges personal jurisdiction. Is there jurisdiction? No, personal service must be executed in the forum state (MI). There is no question of notice here, but there is no power. (you can’t tag a person when they come to the state to contest jurisdiction)
2. P serves D personally in state of NY, D allows the default judgment to be entered against her. P goes to NY to enforce. Can P enforce? No, lack of power of the court is not a curable defect. Nor is it something that can be waived.
3. D gets off airplane, P smacks summons on him. D wants to challenge. No challenge to jurisdiction.
4. D gets off plane, D defaults, P goes to NY to enforce. Can he? P because the service of process was sufficient.
5. P attaches property, then gets judgment, seeks to have land sold. No personal service in the forum state, but it’s in rem jurisdiction
6. Say doesn’t attach property, but does provide notice in newspaper. No jurisdiction because notice, but no power. Publication is only okay in in rem. Would not be okay with personam jurisdiction.
Why is personal service in the forum state okay, but not outside of the forum state. Due Process (14th amendment) Court is concerned about NY state.
TERRITORIAL THEORY OF JURISDICTION:
The authority of every tribunal is necessarily restricted by the territorial limits of the State in which it is established. Any attempt to exercise authority beyond those limits would be deemed in every other forum an illegitimate assumption of power. Two well established principles of public law respecting the jurisdiction of an indep. state over persons and property. 1) Every state possesses exclusive jurisdiction and sovereignty over persons and property within its territory. 2) No state can exercise direct jurisdiction and authority over persons or property without its territory.
But due process seems to be about providing the fairness to individual litigants. There seems to be something strange about this.
Before Pennoyer v. Neff, nobody knew there was constitutional limits to jurisdiction. States were just passing their own laws. Presumption before Pennoyer was to just look to state statutes. Pennoyer defines a box, says anything inside the box is okay, anything outside is unconstitutional. State can assign additional regulations to the inside of the box.
You always must look to the statute first. Is the exercise of jurisdiction consistent with the laws of the state. If yes, then ask if has the state extended beyond constitutional limits.
Long arm jurisdiction: jurisdiction over nonresident defendants.
2. The Modern Approach
a. Introduction: “Minimum Contacts” and Purposeful Availment”
International Shoe Co. v. Washington (U.S. 1945)
F: State of Washington wants contributions from the company (D) for an unemployment compensation fund. Notice of assessment personally served upon sales solicitor of D, and copy of notice mailed to D. D has no office in state, makes no contracts for sale or purchase, maintains no stock, makes no deliveries intrastate. Salesman only exhibited samples and solicited orders, but don’t enter in contracts. D argues activities within state not sufficient to manifest “presence”.
P: Supreme Court of Washington found continuous flow and sufficient additional activities to render corporation amenable to suit.
Background: Pennoyer rule of personal service no longer, now due process requires not that the D be present within the territory of the forum, but “have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.”
H: There is a legal fiction of consent to service and suit: depends on the quality and nature of the activity in relation to the fair and orderly administration of the law which it was the purpose of the due process clause to ensure. Here the state has constitutional power to lay the tax and to subject appellant to a suit to recover it. Continuous and systematic contact is the test.
R: Corporation exercises privilege of conducting activities within a state and enjoys the benefits and protection of the law
general? Specific. No one claims systematic continuous contact (general test).
Court is saying if you don’t want to be sued in Ill, don’t sell if it might end in Ill. Stream of commerce theory: jurisdiction is fair in this case. Beginning of concept of foreseeability. It is unclear what needs to be foreseeable. American Radiator might mean foreseeability that product will be sold in Ill, or that the product be used in Ill.
World-Wide Volkswagen Corporation v. Woodson (U.S. 1980)
F: P sues D for liability in defective design of Audi that collided with her in OK. D’s only connection with OK is the fact that an automobile sold in NY to NY residents became involved in an accident in OK. D argues they had no minimal contacts with OK.
P: District Court denied D’s motion, found jurisdiction. Looked to D’s foreseeability of use and therefore lawsuits. Also point to fact of income from cars time to time used in OK.
H: Reverse. No jurisdiction. State lines are not irrelevant for jurisdictional purposes. Framers intended that the States retain many essential attributes of sovereignty. Here there is a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Foreseeability alone has never been a sufficient benchmark for personal jurisdiction. Rather it is that D’s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there. When a corporation purposefully avails itself of the privilege of conducting activities within the forum state, it has clear notice that it is subject to suit there. Financial benefits will not support jurisdiction if they do not stem from a constitutionally cognizable contact with that state. Whatever marginal revenues D may receive by virtue of the fact that their products are capable of use in OK is far to attenuated a contact to justify that State’s exercise of in personam jurisdiction over them.
Jurisdiction when corporation delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state.
Dissent:
Brennan: The burden should not turn on the number of miles, but instead be analyzed in relation to the mobility of D’s defense. (moving witnesses, evidence, etc.) Here it’s all in OK. An automobile is intended to be moved around. The dealer actually intends that the purchasers will use the cars to travel to distant states. Looks to Ohio v. Wyandotte Chemicals Corp in which D’s pollution traveled down river to Ohio. Jurisdiction should arise if distributor serves that State indirectly by delivering products in to the stream of commerce with the expectation that they will be purchased by consumers in the forum state.
Says that question of whether D can foresee being haled into the forum, is entirely up to the SC, it begs the question! Concern with state’s interest in providing relief weighs very heavily, especially with the lack of inconvenience for D in this case. Essentially a sliding scale: inconvenience of P, and for D.
Marshall and Blackmun: “Jurisdiction is premised on the deliberate and purposeful actions of the D themselves in choosing to become part of a nationwide, indeed a global, network for marketing and servicing automobiles.”
Classnotes:
Purposeful availment is a value judgment.
Court says contact is virtually nonexistent, sounds a lot like Hanson. (unilateral activity of third party) Mere fact that you sell product that causes damage in another state is not enough alone.
