I.        Statutory Limitations on In Personam Jurisdiction– states have power to decide over whom their courts may exercise jurisdiction. So, first look at state statute to see if personal jurisdiction ok. If yes, then ask the question – Is this constitutional?

A.    Bases of In Personam Jurisdiction:

                                          i.    Traditional Bases for Personal Jurisdiction

1.    Pennoyer v Neff (1877) [modified by international shoe) – Mitchell (Oregon domicile) was an attorney for Neff (nonresident of Oregon). Neff failed to pay fees to Mitchell, and Mitchell sued him.  Neff was served notice through a newspaper in Oregon.  He never showed up in Oregon court to answer, and Judgment was entered upon his default.  Neff then bought land in Oregon, and Mitchell had a sheriff seize the property.  Sheriff sold the property to Pennoyer, and the sheriff paid Mitchell amount owed from the lawsuit.  Neff reappeared in Oregon and when he found his property was seized, filed suit against Pennoyer to get his property back. The issue was whether Oregon had personal jurisdiction over Neff in the original lawsuit by Mitchell. Court found that the court’s original verdict was invalid because Oregon didn’t have in personam jurisdiction over Neff, and so it was wrongly seized and sold to Pennoyer.  Pennoyer v Neff established that:

a.    To have in personam jurisdiction, there must be personal service or process or defendant can make a voluntary appearance. (Presence, Consent)

b.    A state has exclusive jurisdiction over people and property within its borders, and cannot exercise jurisdiction over people in other states (Domicile)

c.    The “Full Faith and Credit” clause of the Constitution only applies “when the court rendering the judgment had jurisdiction of the parties and of the subject-matter”.

                                         ii.    Physical Presence at Time of Personal Service - where the defendant is present in the forum state and is personally served with process in the forum state, no matter how long he was present (i.e., even if just passing through). 

1.    Supreme Court has upheld this type of jurisdiction, allowing a transient defendant to be served with process for a cause of action unrelated to his brief presence in the state

a.    Burnham v. Superior Court (1990) – NJ petitioner under CA jurisdiction because he was served on a divorce action while in CA on unrelated matters. If defendant is voluntarily in a state, and is personally served in that state (so due process satisfied), then the state has jurisdiction.  Can’t claim you were unfairly dragged into state, b/c you should know that by going into the state you are putting yourself at risk of being under the state's jurisdiction if served.  You are under protection of state laws while there.  Easier and fairer, due to advanced technology in travel.  Also, evidenced that it would not be burdensome for defendant to travel to forum state, since he had done it once before.  No unfairness because he is already in the state.

2.    Exceptions: Even though personal service in forum state requirement met, there are limitations.

a.    If P brings D into forum state by fraud or force to serve process, most courts will find the service invalid.

b.    Immunity of personal jurisdiction to nonresidents of a forum state whose only purpose of being the state is due to judicial proceedings in that state or elsewhere

                                        iii.    Domicile - Where the defendant is domiciled in the forum state, even if defendant is not physically within the state when served with process

1.    Citizenship – A U.S. citizen, even if domiciled abroad, is subject to PJ in the U.S.

                                       iv.    Consent - Where the defendant consents to jurisdiction, whether express or implied, or through the making of a general appearance

1.    Express consent – express consent whether given before or after suit commenced, is a sufficient basis for PJ

a.    A person can, by contract, give advance consent to jurisdiction in the event a suit is brought against him.

                                                                                          i.    Carnival Cruise lines v Shute – Shutes took cruise, and on back of ticket, there was a forum selection clause for Florida jurisdiction for any disputes arising.  Issue is whether the forum selection clause is enforceable.  It is a form contract, non-negotiated.  Court says it is permissible because not made in bad faith (i.e. to discourage potential plaintiff from filling a suit), and it is fair since Carnival primarily does business in FL.  Court says clause benefits because otherwise potentially suits from all over, eliminates uncertainty, avoids costly pre-trial motions, and lowers cost of fare because litigation costs are lower.  Dissent says there is unfairness in the unequal bargaining power.

b.    A person, by contract, can appoint an agent in a particular state to accept service of process in that state. Terms of the contract determine extent of agent’s power and scope of jurisdiction

                                                                                          i.    Sometimes states require a business (which the state heavily regulates) to appoint an agent.

2.    Implied Consent – when the state has substantial reason to regulate the in-state activity of a nonresident of the state, it may provide that by engaging in such activity, the nonresident thereby appoints a designated state official as his agent for service of process

a.    Hard to get personam jurisdiction through the traditional bases from Pennoyer. As society becomes more mobile, def can more easily leave jurisdiction. So, Court has expanded the traditional bases because of this problem

                                                                                          i.    Hess v. Palowski (1927) - Court allows to expand consent to include implied consent.  A state can legislate that a nonresident motorist using its highways be deemed to have appointed a local official as his agent to receive service of process in any action growing out of the use of the vehicle within the state

3.    Voluntary Appearance – i.e., by contesting the case without challenging personal jurisdiction, becomes subject to PJ

a.    By making an "appearance" in response to a lawsuit a defendant is in effect submitting to the jurisdiction of the court and waiving any defects, if any, in personal jurisdiction.  In most states a defendant who wishes to challenge jurisdiction may do so by making a special appearance which is limited to the issue of jurisdiction. If he or she raises any other issues or claims he has made a general appearance and waives any defects in jurisdiction. 

b.    In federal courts no special appearance is necessary.  Jurisdiction may be challenged in a motion or included as a defense in the answer.

                                        v.    Long Arm Statutes - Where the defendant has committed acts bringing him within the forum state’s long-arm statutes, there is PJ, service can be within or outside forum state, but limited to acts performed within the state

1.    Unlimited Long Arm Statutes – a few states (CA) have this; it gives their courts power over any person or property over which the state can exercise jurisdiction.

2.    Limited (or Specific) Long Arm Statutes – most states have this; specify in detail situations in which their courts can exercise jurisdiction

   II.        Constitutional Limitations – once determined that a state statute allows PJ, we must then ask if it is constitutional.  The due process clause.

A.    General Jurisdiction – when defendant engages in systematic and continuous activity within the forum state, PJ for any cause of action (however, casual occasional or indirect activities within the state do not give general jurisdiction

                                          i.    Helicopteros Nacionales de Colombia v. Hall (1984) - recognizes a distinction between "general" and "specific" jurisdiction.  In order to assert general jurisdiction there must be substantial forum related activity on the part of the defendant.  The threshold for satisfying minimum contacts is higher than in specific jurisdiction cases

B.    Specific Jurisdiction - the claim asserted arises out of defendant’s contact with the forum (with the specific in-state activity). There is an isolated transaction/business. You put yourself in that area, you have such contacts that it is fair to be held in that state (you have voluntary action to go into the area), as long as lawsuit arises directly out of it.  Depends on the quality & nature of transaction to apply specific jurisdiction. ***Must be minimum contact; related-to; it shouldn’t violate fair play & justice.

C.    Sufficient Contacts with the Forum

                                          i.    Traditionally, jurisdiction over a person (or res) was based on the state’s physical power to carry out its judgment.

a.    There is no personal jurisdiction over a defendant unless the defendant is served while physically within the forum state

2.    Court later expanded states’ physical power to extend not only to those defendants who were served within the state (Pennoyer v Neff), but also those defendants who consented to the state’s power or who were domiciled in the state, regardless of where they were served.      

                                         ii.    Modern Due Process Standard (if traditional view cannot be met, we can come to the International Shoe test) – the focus became whether sufficient minimum contacts exist between the defendant and the forum so that it does not offend “traditional notions of fair play and substantial justice.” There must be contact and fairness. 

1.    The due process clause does not permit a state to exercise personal jurisdiction over an individual or corporation with whom the state has no contacts, ties or relations.

2.    Minimum Contacts - Having sufficient dealings or affiliations with the forum jurisdiction so that the exercise of jurisdiction would be fair and reasonable, and such that compelling him to appear and defend in the forum does not offend traditional notions of fair play and substantial justice. 

a.    International Shoe Co. V. Washington (1945) – International Shoe is a DE company based in Missouri. They have some salesmen working on commission in Washington but don’t have any offices there. Washington state trying to get International Shoe to pay into an unemployment fund, and personally served one of the salesmen in Washington with the notice, as well as sending registered mail to their home office in Missouri.  The issue was whether Washington had jurisdiction over International Shoe. Court said yes, because there were sufficient contacts with the state (minimum contacts). International Shoe benefited by having business in Washington, and was protected by its laws while doing so. 

b.    International Shoe held:

                                                                                          i.    To exercise personal jurisdiction, there must be:

1.    Contact with the forum (minimum contacts)

a.    purposeful availment

b.    foreseeability

2.    Fairness

a.    cannot offend “traditional notions of fair play and justice.” 

3.    There must be purposeful availment and Foreseeability.

a.    Purposeful Availment – the contacts with the forum state cannot be accidental. Defendant must reach out to the forum in some way, such as to make money there or use the roads there. The court must find that through these contacts the defendant purposefully availed herself “of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.”

b.    Foreseeability – in addition to purposeful availment, the contact requirement of International Shoe requires that it be foreseeable that the defendant’s activities make her amenable to suit in that forum. The defendant must know or reasonably anticipate that her activities in the forum render it foreseeable that she may be ”haled into court” there

c.    Case Examples:

                                                                                          i.    McGee v International Life Insurance - McGee had a policy, signed contract (w/ Texas corp.) mailed to him in CA, mailed his premium payments from CA.  Wife recovered when he died by filing suit in CA against insurance co.  Issue was whether CA had jurisdiction over TX insurance company. Yes. No minimum contacts, but there is relatedness, where the plaintiff’s claim arises out defendant’s contact with the forum.  Also, Defendant reached out to CA to solicit business. Finally, it is in the state’s interest in making sure their citizens get justice.

                                                                                         ii.    Hanson v. Denckla (1958) – Decedent established trust in DE, but later moved to and died in FL. Trust company had no dealings in FL, except to pay decedent in FL via mail.  Issue is of whether FL had jurisdiction. Says no jurisdiction because insufficient minimum contacts.  Court creates the concepts of purposeful contacts; must “purposefully avail" themselves of activities and benefits in the forum state.

                                                                                        iii.    Burger King v. Rudzewicz (1985) – Defendant opened BK franchise in MI; BK in FL, and Def were trained in FL. Issue is whether FL had jurisdiction. The Supreme Court concluded that the defendants purposefully availed themselves to the protections of the forum state (FL) and are, therefore, subject to jurisdiction there. The Court reasoned that the defendants had a "substantial and continuing" relationship with BK in Florida and that due process would not be violated because the defendants should have reasonably anticipated being summoned into court in Florida for breach of contract.  Therefore, minimum contacts is established. Burden on defendant to show unfairness, and they could not.

                                                                                       iv.    Kulko v. Superior Court (1978) – sending child to CA doesn’t subject father to CA jurisdiction. It didn’t constitute minimum contacts.  Also, unfair and unreasonable.

                                                                                        v.    Stream of Commerce

1.    World-Wide Volkswagen Corp. v. Woodson (1980)- Car purchased in NY, accident in OK.  Plaintiffs brought suit in OK, but were still domiciles of NY. Distributor had no business dealings in OK; did not solicit business there, no purposeful availment. Only contact was this accident, but car bought in NY, so no relevant contacts. Court says foreseeability IS relevant - test is not whether the product would get to OK. Rather, it must be foreseeable that the defendant would get sued in that forum, OK.  Court says OK has no jurisdiction over the local distributor. However, the joint party, a national distributor would be under any jurisdiction, b/c they have business dealings nationally.

2.    Asahi Metal Industry Co. v. Superior Court - Asahi (Japan) sold parts to manufacturer in Asia who put them in stuff sold in CA.  No purposeful availment by Asahi of CA market, therefore no jurisdiction even if it was foreseeable that Asahi’s products would end up there.  Interpretation of stream-of-commerce theory played a part in opinion, also consideration of “fair play and substantial justice,” said it was a severe burden for Asahi, an alien corporation, to have to defend itself in CA.  Also, interpreted minimum contacts test as also requiring fair play and substantial justice).

                                                                                       vi.    Pavlovich v. Superior Court

1.    Pavlovich worked on defeating DVD copy protection and put up a web page with information about the DeCSS program.  DVD CCA brought suit against Pavlovich in California alleging that the defendant had “misappropriated its trade secrets”.  The defendant moved to quash service based on a lack of personal jurisdiction in California.   Def says yes, there is PJ, b/c his actions hurt the movie industry, largely based in CA, so Pavlovich should have known that (foreseeability). Internet webpage is available anywhere, and in CA. The issue was whether California had specific jurisdiction over Pavlovich based on the web page he posted? Court says no. Pavlovich’s intention in having info on webpage was for programming development, not to broadcast how to defeat the copyright.   Therefore, no personal availment, no foreseeability, and thus no minimum contacts.

d.    Fairness – cannot offend “traditional notions of fair play and justice.”  It is possible that a strong showing of fairness might make up for lesser amount of contact, but minimum contact always necessary. Several factors relevant to determine whether jurisdiction would be fair:

                                                                                          i.    Relatedness of claim to contact- must arise out of the transaction in the forum to have specific jurisdiction

                                                                                         ii.    Convenience – forum doesn’t have to be the best available, so long as it is not “so gravely difficult and inconvenient that a party is unfairly put at a severe disadvantage in comparison with his opponent.

1.    World-Wide Volkswagen Corp. v. Woodson (1980) – not fair for local NY retailer to be dragged to OK. National retailer suffers no inconvenience b/c they have insurance company to deal with this.

2.    This is a hard standard to meet and defendant will probably not be able to meet it simply by showing that the plaintiff has superior economic resources.

a.    Burger King v. Rudzewicz

                                                                                        iii.    Forum State’s Interest – forum may have a legitimate reason for providing redress for its residents

1.    McGee v International Life Insurance – Insurer (TX), insured resident of CA.  Issue was whether CA had jurisdiction over TX insurance company. Yes. Court referred to CA’s interest in providing its citizens with means of redress.

2.    World-Wide Volkswagen Corp. v. Woodson (1980) – OK cares about safety in their state.

                                                                                       iv.    Other Factors

1.    Plaintiff’s interest in obtaining convenient and effective relief

2.    The interstate judicial system’s interest in obtaining the most efficient resolution of controversies

3.    The shared interest of the states in furthering fundamental substantive social policies

D.    Notice – in addition to minimum contacts and fairness, due process requires that a reasonable method be used to notify the defendant of a pending lawsuit so that she may have an opportunity to appear and be heard (traditionally called service of process).

                                          i.    Due process must be “reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.

                                         ii.    Federal Rule 4

1.    Process consists of the summons and a copy of the complaint

a.    Summons very important - symbol of gov’t power over defendant. Rule 4(a)(1)

b.    Service can be made by any non-party who is at least age 18.  Rule 4(c)(2)

2.    This is important because defendant must be given an opportunity to be heard Rule 4(c)

a.    Factors to protect defendant

                                                                                          i.    Plaintiff must give an affidavit - under penalty of perjury, a statement why they have to get property back

                                                                                         ii.    Affidavit must state specific facts

                                                                                        iii.    Plaintiff must get an order from the court (not sheriff)

                                                                                       iv.    Plaintiff may have to post a bond

                                                                                        v.    Defendant should get a hearing at some point

                                        iii.    How do we serve an individual?

1.    Rule 4(e)(2)

a.    Personal Service – can be done anywhere

b.    Substituted service

                                                                                          i.    Ok if it is in defendant’s usual abode

                                                                                         ii.    We serve someone of suitable age and discretion who resides there

c.    You can serve the defendant’s agent

                                                                                          i.    You can appoint one yourself, or one can be appointed by law

2.    Rule 4(e)(1) – incorporates method of service from state law

a.    Look at the state in which the federal court sits Or look at state where service is effected   

3.    Rule 4(d) – Waiver of service by mail

a.    Allows you to mail the process and waiver form to the defendant. Also must send a self-stamped envelope. Def can waive formal service of process. If they do not return waiver, then you DO have to personally serve def.

                                       iv.    Requirement that agent notify defendant

1.    If agent is automatically appointed by contract, or by operative law, the agent’s failure to notify defendant will prohibit jurisdiction, since defendant was not given an opportunity to be heard

2.    If agent is voluntarily appointed by the defendant, then any failure by agent to notify defendant will not prohibit jurisdiction, since the mistake will be attributed to the defendant

                                        v.    Requirements for cases involving multiple parties or unknown parties

1.    Mullane v Central Hanover Bank & Trust Co. – action brought against vast number of trust beneficiaries, scattered throughout the world.  Supreme Court said constitution does not require personal service on each beneficiary, since cost would be prohibitive.  However, each beneficiary had to be notified by the best practical means (by publication, etc.).

2.    Mullane discusses whether the notice is constitutional

a.    It is ok if it is reasonably calculated under all the circumstances to apprise the party of the suit.

                                       vi.    If you meet Rule 4, almost never a constitutional problem.  Ok, even if def did not get the notice.

1.    But, if plaintiff becomes aware that defendant did not receive it, plaintiff may have to pursue other means of notice.

                                      vii.    Defective service of process can be challenged by a FRCP 12(b)(5) motion to dismiss or the objection can be made in the answer.  Defective service of process goes to lack of notice.  Due process requires notice and an opportunity to be heard.

 III.        In Rem Jurisdiction – (jurisdiction over the property) the basis of jurisdiction is the presence of the property in the state.  Since the state has a great interest in adjudicating any rights regarding this property, it is constitutional.  An in rem judgment does not bind the parties personally, but is binding as to the disposition of the property in the state.

1.    A court has no in rem jurisdiction of a property not located in the forum state

2.    A court has no in rem jurisdiction if the property was brought into the state by fraud or force

                                         ii.    Notice – The early view held that attachment of property, when supplemented by publication of notice in a local newspaper or by posting of notice on the property, would give all interested persons sufficient notice of the action.  However, such procedures are no longer adequate, and the requirements of Mullane v. Central Hanover Bank & Trust apply to in rem actions.  Thus, persons who interests are affected and whose addresses are known must at least be notified by ordinary mail.

 IV.        Quasi in Rem Jurisdiction – In quasi in rem cases, the plaintiff is unable to obtain personal jurisdiction over the defendant, but the defendant has property in the state that the plaintiff attached (trying to use the property to get PJ).  The court then adjudicates the dispute between the parties on the basis of its power over the property. Since the court’s sole basis of jurisdiction is the property, any judgment against the defendant can be satisfied only out of that property.

A.    When the dispute involves the rights of the parties in the property itself, jurisdiction based on presence of the property in the state is proper.  The close connection between the litigation and the property provides the necessary minimum contacts. This is the same as in rem now. Previously, quasi in rem meant something else (below), which was found to be unconstitutional.

B.    When the dispute is unrelated to the ownership of the property, jurisdiction cannot be based solely on the presence of property in the forum state; there must be minimum contacts between the defendant and the forum. 

                                          i.    Before 1977, a state clearly had power over all persons and property found within its borders.  A defendant with no other connections with the state could be sued in the state for any dispute simply because he owned property there

1.    Pennoyer v Neff – if was ok to attach the property to gain jurisdiction.  Problem here was that Mitchell didn’t attach the property. Instead, he seized it after getting judgment.  If he had attached the property in the beginning, then there would have been PJ based on quasi in rem.

                                         ii.    However, in 1977, the Supreme Court held that the minimum contacts standard is applicable to every exercise of jurisdiction. And the court found that the mere presence of property within a state is not itself sufficient to permit a court to exercise quasi in rem jurisdiction over property in a quasi in rem action.

1.    Shaffer v. Heitner (1977) – Heitner was a shareholder in Greyhound who sued a number of officers of the company.  He moved to “sequester” their property in Delaware.  This property included the defendants’ stock in Greyhound and other financial instruments.  The issue was whether DE had jurisdiction over the defendants, their property, or both. Court says International Shoe test must also apply to in rem as well as in personam.  Court says you can no longer attach property to gain in personam jurisdiction.  So, quasi in rem jurisdiction is proper only when minimum contacts exist making exercise of jurisdiction fair and just.

C.    Procedural Requirements – to obtain quasi in rem jurisdiction, a plaintiff must “bring the asset before the court” by attachment (or garnishment).

D.    Notice – requires best practical notice, as in Mullane

   V.        How to Analyze a Personal Jurisdiction Issue

A.    Does a statute (long-arm-statute) purport to authorize the exercise of personal jurisdiction?

B.    If answer is "no" then end of analysis.  No personal jurisdiction can be asserted.  If the answer is "yes" then;   

C.    Does the statute go beyond the constitutional limits of due process set forth in International Shoe?

D.    If "yes" then no personal jurisdiction.  If "no" then personal jurisdiction can be constitutionally asserted.