We continue our discussion on personal jurisdiction. Once again, personal jurisdiction is on determining factor that has to be met for a court to hear a case. However, with the expansion of technology, ease of communication and travel has made commerce much better. So, how do we determine which state personal jurisdiction?
Reading Notes
Federal Rule 12(b)(2)
(b) How to Present Defenses. Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:
… (2) lack of personal jurisdiction…
McGee v. International Life Insurance Co.
355 U.S. 220 (1957)
Parties
McGee is the plaintiff and International Life Insurance Co. is the defendant
Procedural history
McGee couldn’t receive jurisdiction in California or Texas so the case is now before the Supreme Court.
Question
Does a long-arm statute (a statute giving personal jurisdiction to one state from another) violate the due process clause of the 14th Amendment?
Holding
If the defendant has a contact in a foreign state, the plaintiff can find personal jurisdiction.
Rule
A contact is can be deemed sufficient if the defendant:
- Has established a contract with the state in question
- Receives premiums from the state in question
Facts
Franklin was offered and accepted a life insurance policy from a corporation whose offices were in Texas. Franklin passed but his mother and beneficiary, McGee, was unable to collect payment from the company because they claimed Franklin committed suicide. Unable to collect in California (home state), McGee went to Texas, where the courts said that she did not have personal jurisdiction.
Analysis
The courts now need to decide if a statute by California would allow McGee to collect from a foreign corporation. Here, the courts say that she can find personal jurisdiction for several reasons.
- The state has an interest in protecting its citizen’s and maintaining a place where they can sue close to witnesses.
- The contract was opened in the state of California
- Mailings came to and from the state of California regarding the policy.
Why should we care?
We learn from this case that personal jurisdiction can be met as long as there are sufficient contacts with the State in question. However, McGee did not make it clear as to who had to initiate the contacts. The court made this more clear in Hanson by saying that the defendant would have to initiate the contact with the plaintiff.
In Rem
Shaffer v. Heitner
433 U.S. 186 (1977)
Parties
Shaffer is the defendant while Heitner is the plaintiff.
Procedural History
Heitner won in the lower courts and Shaffer appealed. That is why his name appears first in this case.
Question
Should we adopt the international shoe standard of requiring contacts to find personal jurisdiction in cases involving in rem (property)? Does the stock in this case constitute a contact?
Holding
We will apply International Shoe for cases involving in rem. This does not constitute a contact.
Facts
Heitner had an issue with Shaffer in Oregon. A company was in Delaware that Shaffer and others owned stock of (part ownership). However, they did not conduct any of their business in Delaware and the suit was brought because of a controversy in Oregon.
*Alterations from class
The states in dispute here are Oregon, Arizona, and Delaware. There was a dispute in Oregon about the directors of the company. Greyhound’s directors (who is being sued) are domiciled in Arizona.
Here, the directors and officers are being sued. If they were sued in Arizona they could have specific and general personal jurisdiction. If they were sued in Oregon, they could have found specific personal jurisdiction. The plaintiffs wanted to sue in Delaware, thinking for the best outcome. Their reasoning was that because the owners had property (in rem) through stock in Delaware, they could find specific personal jurisdiction.
Analysis
The court needs to decide whether it will apply Pennoyer or International Shoe in its analysis. Here, they decide to apply International Shoe because citing jurisdiction over property is like citing jurisdiction over person. So, you should apply the standard to both in rem and in personam.
After deciding to use the International Shoe standard, we need to determine if the case at hand constitutes a contact. Although under some circumstance it can, it does not in this case. This is primarily because the controversy originated in Oregon, not Delaware. Therefore, there is no need to take possession of the stock finding it as a contact for personal jurisdiction in Delaware. However, there is a way that Delaware could have found personal jurisdiction. If there was a statute that said that any owners of stock in a corporation filed in Delaware gave consent, then they could have found that jurisdiction.
Additional Notes
The difference between in rem and in personam is that in rem is only over property while in personam is over a person, including their property. So, from Shaffer, we learn that we will most likely never use in rem for practice. This is because the rule in Shaffer made the rule for both as the same. In Rem is much more limited. Judgements made can only be in effect to the specific property in question, within the forum state. In Personam gives the judge jurisdiction to render judgements that are binding on all assets in every state.
Why is having land or property in one state not enough to establish jurisdiction in the state? Because the court adopts International Shoe here. Delaware does not have a statute that requires companies to give consent to jurisdiction. Therefore, there is no personal jurisdiction in this case.
The key takeaway from this case is that in rem and in personam follow the same rule (the plaintiffs claim needs to arise from or relate to the defendants sufficient minimum contacts with the forum state). Therefore, we might as well use in personam jurisdiction when making our jurisdictional claims.
Additional Notes
Review – Forum court. This is the court where the plaintiff files suit.
Personal Jurisdiction can take form in 4 ways
- Specific Jurisdiction
- General Jurisdiction
- Transient Presence (TAG) – Requires the summons and complaint
- Consent/Waiver
Today we are going to focus on Specific jurisdiction.
A human being can only have 1 domicile (for general jurisdiction). Corporations can have 2 citizenships. First, in their principle place of business. Second, where they are incorporated. An incorporated is a state where they give life to the corporation.
Terms:
- Filing – what you do with the court
- Serve – is what you do with the party
Serving an employee of a company does not have enough notice to be enforceable.
The property term we get from International Shoe is Sufficient Minimum Contacts. We are talking about the contacts of the defendant with the forum state.
So, lets summarize International Shoe so the above makes sense.
- International shoe is incorporated in Delaware but has a principle place of business in Missouri
- International shoe has salesman in Washington
- Washington failed to receive unemployment payment from International Shoe
- So, Washington sued IN Washington not Missouri.
- International Shoe filed a motion to dismiss for lack of personal jurisdiction
- The Supreme Court said that if there is Sufficient Minimum Contacts, then there is personal jurisdiction
- “traditional notions of fair play and substantial justice.” Refers to the Constitution, but discusses making sure everything is “fair” for all parties involved.
International Shoe was a foundational case. Things have changed. Here is the rule today:
- Does the plaintiff’s claim arise from or relate to the defendants sufficient minimum contacts with the forum state?
In rem jurisdiction: “A court’s power to adjudicate the rights to a given piece of property, including the power to seize and hold it.”
International Shoe and the following cases only apply to specific personal jurisdiction.
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.
