A court can only hear a case if it can exercise authority over the parties. Personal jurisdiction is the term used to describe the power and authority of the court over the parties in the case. And even though both parties are relevant, the focus of this jurisdiction is generally on the defendant because defendants usually argue a court will not have jurisdiction, and thus no authority, to adjudicate the case.
Personal jurisdiction is required by due process in the United States Constitution. That is, the purpose of having personal jurisdiction requirements is to ensure that parties are not unfairly subjected to the courts. However, what is considered satisfactory under due process has changed drastically over time. The article thus seeks to illustrate the early rules of personal jurisdiction and how they differ from today.
Traditional Personal Jurisdiction Rule
A couple of terms that we need to know is In Personam and In Rem:
- In Personam is jurisdiction over the person and all their assets (including property)
- In Rem which is jurisdiction over the property that is within the geographical jurisdiction of the court.
Over time, the distinction between these two terms has become blurred. This is particularly true in light of Pennoyer v. Neff, 95 U.S. 714 (1878) (see case briefs below for more details).
In Pennoyer, the defendant was not present in the state at the time the summons was posted in the local newspaper. A judgment was granted against the defendant, allowing the plaintiff to seize the defendant’s property. When the defendant returned to the state and learned that his property was seized and then sold, he sought to invalidate the judgment against him because he was not served in the state. The Supreme Court agreed. Thus, the state courts were not permitted to simply exercise jurisdiction in rem over property. Instead, the parties need to be “present” for jurisdiction to be found. The rule from Pennoyer can simply be stated as this:
For a court to exercise personal jurisdiction, the defendant must be physically present and served notice within the forum state.
– Pennoyer rule
The physical presence aspect of this rule has remained consistent throughout history, but it is no longer the only method of finding personal jurisdiction against a defendant.
The Modern Approach
With the development of technology, businesses began to abuse the Pennoyer rule. They would conduct sales within a state but would argue they were not subject to the jurisdiction of the state because they were not “present” there. This type of thinking changed with International Shoe Co. v. Washington, 326 U.S. 310 (1945).
In International Shoe, the defendants hired salesmen to conduct sales in a variety of states. The State of Washington sought to subject the company to taxes for having employees within the state. The reasoning was simple: if a company benefits from the laws of the state, they should be subject to the laws of the state. The Supreme Court agreed with Washington. The defendants “contacts” with the forum state (the state where the lawsuit was initiated), subjected them to the jurisdiction of the courts within that forum. This became the basis of what became known as “specific personal jurisdiction.” The rule from International Shoe can be stated as this:
A court may exercise personal jurisdiction over a defendant if the plaintiff’s claims arise from or relate to the defendant’s “sufficient minimum contacts” with the forum state.
– International Shoe rule
Types of Personal Jurisdiction
There are four different types of personal jurisdiction:
- Specific Personal Jurisdiction. You can be sued where the act occurred.
- General Personal Jurisdiction.
- Transient Presence or TAG Jurisdiction.
- Waiver of/Consent Jurisdiction.
These types of finding personal jurisdiction will be discussed more fully in other articles.
Case Briefs
Pennoyer v. Neff
95 U.S. 714 (1878).
Factual and Procedural Background
First, Neff was a client of Mitchell who was an attorney in Oregon. Neff failed to pay attorney fees. Therefore, Mitchell sued Neff in Oregon to obtain compensation for his services. Neff is living in California but has property in Oregon. So, Mitchell, knowing Neff had property in Oregon sought an order to obtain the property to pay the debts. The court gave him that order, obtained the property, auctioned it off, and Pennoyer purchased some of that property.
Next, Neff showed up and says the court had no authority to execute the judgement. Neff claims he needed to be notified in “service of process.” The service was done by publication where the summons is done through a newspaper.
Pennoyer lost in the trial court then appealed.
Issue
Whether the judgment of the sheriff to recover some land on behalf of Pennoyer was a violation of due process.
Holding
The judgment granting ownership of the property to Pennoyer was invalid.
Analysis
The state has the power and a duty to its citizens. This power can cause a state to make a claim over a resident in another state. However, the state must either summon a non-resident personally or have them come voluntarily. Without this summon, the judgement executed by that state may be questioned.
The essential part to understand here is that the court did not have control over Neff’s property. So, they couldn’t enforce a judgement. If they later came into possession of the property, that judgement would still be void and a new trial would need to be conducted.
Why should we care?
Pennoyer has two main rules: (1) A party must receive proper notice (generally in person), and (2) that notice has to occur within the state (personal jurisdiction). If the court did not provide proper notice or have personal jurisdiction over the person, the judgement should be questioned.
International Shoe Co. v. Washington
326 U.S. 310 (1945).
Factual and Procedural History
International Shoe Co. did not have an office or conduct manufacturing in the state of Washington. However, there were several salesmen who were employed by the company who would collect orders and send them to the company headquarters in St. Louis, who would then fulfill those orders. Washington sought to claim unemployment taxes from the company for these salesmen. The company filed suit arguing that there was no personal jurisdiction because the company did not maintain a “presence” there.
International Shoe Co. lost in the state courts, the case now being brought before the Supreme Court.
Questions
- Whether International Shoe Company rendered itself to personal jurisdiction because of its activities in the state of Washington
- Whether the state can exact contributions from the defendant. (we will not address this point in the brief)
Holding
International Shoe Co. developed contacts which showed that the state had specific personal jurisdiction over the company.
Analysis
A company can have a “presence” in a state because of the contacts within the state. These contacts must be related to the claim that is being brought. Because these contacts are collecting orders in Washington, and the claim arises from Washington, Washington can exercise personal jurisdiction over the company in another state.
Why should we care?
This shows how specific personal jurisdiction and general personal jurisdiction functions. These concepts are discussed fully in another article. For now, it is important to realize that Pennoyer is practically overturned by this case. A service could now be given over state boundaries, to an individual not domiciled in that state, and did not consent to be sued in that state. However, there are principles of Pennoyer that remains good law (such as maintaining some form of “presence” within the state).
Other Relevant Cases
Hess v. Pawloski states that implied consent applies to actions taken by the parties that may be considered dangerous. Thus, the state has power to exercise action against parties who “consent” to it. This all depends on the forum of the act being performed (i.e. driving an automobile over state lines).
In Milliken v. Meyer, the court says that being domiciled in a state is sufficient to claim personal jurisdiction. So, even if the party is currently located in another state, summons can be delivered across state borders, the party is expected to be at court, and good judgement is authorized. We discuss more about domicile in another article.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
