Sue Me, I'm Lazy

Wikipedia is blessedly clear and concise on the differences between general and specific jurisdiction.

I’m taking the easy way out and just quoting the wiki…

General jurisdiction exists when an out-of-state party has extensive, systematic and continuous dealings with the state in which the court sits. When a court has general jurisdiction over a party, the court has personal jurisdiction over any dispute involving the party. Thus, a court's general jurisdiction power is equivalent to its power based on presence within the state. As an example, a corporation may advertise and sell so many products for such a long time within a state that it is subject to personal jurisdiction for any claim against it, even if the claim involves activity that occurred only outside the state… Conversely, a court's specific jurisdiction power over a party, when the party does not have systematic and continuous contacts with the state, is specific to cases that have a substantial connection to the party's in-state activity.

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Pavalovich v. Superior Court (2002, California)

Facts
The DVD Copy Control Association created an algorithm to encrypt DVDs. They forced manufacturers of DVD players to pay a licensing fee for the necessary codes. This allowed the CCA to discriminate prices among different markets.

Mr. Pavalovich and other bright individuals were able to crack the encryption. Pavalovich put the code on the Internet, which empowered individuals to watch DVDs illegally.

The CCA filed suit in California. Pavalovich appealed under personal jurisdiction. He lived in Texas, his web server was in Texas, and he had never been to California.

Question
Is there enough evidence (minimum contacts) to assert personal jurisdiction over Pavalovich?

Holding
No

Reasoning
Pavalovich’s website was deemed “passive”. Passive websites simply provide information, and engage in little exchange with visitors. These sites typically do not establish minimum contact. “Active” websites promote a heavy exchange of commerce and information.

The court also accepted that Pavalovich should have known he was potentially harming California-based businesses. However, this knowledge alone was insufficient to establish minimum contacts.

And the winner is…
Pavalovich

Notes
-The court mentioned that DVD CCA might have better luck suing Pavalovich in Texas.
-Although the issue in this case was personal jurisdiction, we got a peek into Pavalovich’s defense against the licensing violation. I found his argument very compelling. Pavalovich testified that he purchased his own DVDs. He broke the encryption only because he wanted to watch the DVDs on his computer using LINUX.

summarized from Life of a Law Student

A layup for the Supreme Court

The Asahi decision provides us with guidelines to determine whether personal jurisdiction is just and reasonable.

Asahi Metal Industry Co. v. Superior Court (1987)

Facts
Gary Zercher, a California resident, was riding his motorcycle. Zercher was injured after his tire blew out. He sued the Taiwanese tire company, and reached a settlement out of court. This tire company then sued Asahi (Japanese) in California court for selling them a defective part.

Question
Is this an appropriate use of personal jurisdiction?

Holding
No

Reasoning
The issue of minimum contacts was irrelevant. Even if minimum contacts were established, asserting personal jurisdiction in this would be unreasonable. The “reasonable test” is made up of the following six elements (plus a bit on how they apply to Asahi):

Burden on defendant
Asahi would be forced to fly halfway around the world for proceedings.

Interests of forum state
California expressed an interest in protecting their state from faulty products. SCOTUS said that California's interests were served when Zercher settled out of court. The remaining conflict was between the two foreign companies.

Plaintiff’s interest in relief
The tire company wanted their money back. SCOTUS felt that they could settle that dispute in Taiwan. Or Japan. Hell, anywhere in Asia would be more pragmatic than California.

Efficient resolution of interstate judicial conflicts
SCOTUS wanted to be very cautious in expanding jurisdiction overseas. Foreign policy is messy enough already.

Shared interest of states in forming fundamental social policies
Doesn’t really apply here.

And the winner is…
Asahi. But they may have been sued later in Taiwan or Japan.

summarized from Life of a Law Student

The Burger King Case

The Burger King Case leads to a fresh look at the minimum contacts standard. Instead of simply deciding whether minimum contacts are present, the court begins to question whether those contacts are a legitimate basis for jurisdiction. Justice Brennan cites the “notion of fair play and justice” as another facet to personal jurisdiction.

Burger King Corp. v. Rudzewicz (1985)

Facts
Rudzewicz and a business partner opened a Burger King franchise in Michigan. Burger King headquarters were in Florida. The original contract was negotiated with both the Michigan district office and the Florida main office. Rudzewicz never physically entered Florida, but engaged in phone and mail correspondence with the state. After a few months, the franchise started to fail and Rudzewicz began missing payments to Burger King Corp. Burger King insisted the franchise be closed, but Rudzewicz continued to operate. Burger King sued in federal court under Florida jurisdiction, which was allowable under diversity jurisdiction. (We’ll talk diversity jurisdiction later. For now, just pretend Burger King sued in Florida.)

The defense argued that Florida did not have personal jurisdiction. Also, Burger King is a large corporation with offices and legal counsel in Michigan. Rudzewicz is a small business owner in financial trouble. Wouldn’t it be fairer (apparently that’s a real word) to dispute the lawsuit in Michigan?

Questions
1. Were minimum contacts established with Florida?
2. Does Florida’s jurisdiction offend the notion of fair play and justice?

Holding
1. Yes
2. No

Reasoning
1. Rudzewicz purposefully entered into a 20-year, multi-million dollar contract with a Florida-based company.
2. Initially, Rudzewicz mostly dealt with Michigan district office. As business went into the crapper, he began trying to re-negotiate his franchise agreement with FL headquarters. Rudzewicz initiated these negotiations.

And the winner is…
The King

Why would Burger King want to sue in Florida anyway?
It’s how they roll. This case sends a message to other franchises: If you fail to live up to your contract, you’ll have to come fight it out in Florida. We hold a huge financial advantage even before you try to fund an out-of-state lawsuit. Also, we don’t want to give you the benefit of your local jury pool.

summarized from Life of a Law Student

If you can't say something famatory, don't say anything at all

In this post, we will look at two more cases dealing with personal jurisdiction.

Calder v. Jones (1984)

Facts
Jones was an entertainer in California. The National Enquirer published an article about her that was possibly defamatory. The National Enquirer was based in Florida. The publication did not bother moving for lack of jurisdiction because 12% of its circulation was in California. But the reporter and editor of the story did move for lack of jurisdiction. The two men had little contact with the state of California: a combined three phone calls, one vacation, and a pending (unrelated) defamation lawsuit.

Question
Can California assert jurisdiction in this case?

Holding
Yes

Reasoning
The court did not bother with minimum contacts, reasoning that this was not a charge of mere untargeted negligence. Instead, the court created the Effects Test. Since the men were charged with allegedly tortuous actions that were intentional and expressly aimed at a California resident, they fell under California jurisdiction.

And the winner is…
Jones, at least on this motion. I don’t know the outcome of the actual defamation suit.

Keeton v. Hustler Magazine, Inc. (1984)

Facts
Hustler Magazine published an allegedly defamatory cartoon of Ms. Keeton, who was dating the Penthouse publisher. The statute of limitations in New York (where Keeton lived) ran out before she could file a lawsuit. The statue had not expired in New Hampshire, so Keeton filed suit there. This case had no special connection to the state of New Hampshire. Hustler sold very few magazines that state.

Question
Can New Hampshire assert personal jurisdiction over Hustler magazine.

Holding
Yes

Reasoning
It does not matter how few magazines Hustler sold in NH. Hustler’s business actions within the state were systematic and continuous. New Hampshire residents who enjoyed Hustler were mislead by the cartoon.

And the winner is…
Keeton

Notes
-All damages sustained in all jurisdictions are recoverable by a single action. Although Hustler was found liable only in New Hampshire, damages from that judgment would have been awarded based on Hustler’s entire American distribution.

summarized from Life of a Law Student

Drivers (preferably flame retardant) Wanted

Forum shopping is when someone attempts to get their case heard in a particular court. Every state and municipality has its own laws. Every potential jury pool has its own culture. Therefore, depending on the case, some forums may be better than others.

World-Wide Volkswagen Corp. v. Woodson (1980)

Facts
Mr. and Mrs. Robinson were New York residents who bought an Audi from a local dealer. While driving the car through Oklahoma they were involved in a wreck. The couple suffered serious injuries, which they alleged were due to the Audi’s faulty gas tank. The Robinsons filed suit against Volkswagen in Oklahoma, a state that happened to have very plaintiff-friendly juries. Volkswagen argued that Oklahoma did not have jurisdiction.

Question
Was minimum contact established?

Holding
No

Reasoning
One of the key issues with minimum contact is foreseeability. That the Audi might ultimately travel to Oklahoma from New York was reasonably foreseeable. But Audi had no service or sales centers in Oklahoma. Audi did not seek to serve the Oklahoma market by direct or indirect means. It was the plaintiff’s unilateral action that established minimum contact with Oklahoma. If the court defines forseeability in the way the Robinsons desire, forum shopping will quickly get out of hand.

And the winner is…
The Germans, series tied 1-1

Notes
- Is forum shopping ethical? On the one hand, attorneys should absolutely use the system to assist their clients. On the other hand, this feels like it’s violating the spirit of the law.

- Speaking of forum shopping, federal grand juries are noted for their relative objectivity and fairness. Since FGJs are drawn from a much larger pool, they should be more diverse.

– There is a theory that personal jurisdiction rules should be modified. Poor people are disadvantaged because they can’t afford to maintain long-distance lawsuits. Should poor people be allowed to sue locally regardless of minimum contacts?

More Long-Arm Statutes

Every state has long-arm statutes, which define when the state can assert jurisdiction over non-residents. States with aggressive long-arm statutes can assert jurisdiction as soon as the non-resident makes minimum contact. This is a one-step process.

States with less aggressive long-arm statutes use a two-step process. The first step is to determine whether the non-resident established minimum contact. The second step involves determining if a certain minimum criteria is met. Let's look at a hypothetical example of this minimum criteria:

A resident files suit against an out-of-state insurance company for failure to pay a claim. The state throws out the case, because the claim is only for $100. The state's long-arm statutes specify that insurance claims must exceed $5000 before the state will seek to assert jurisdiction.

summarized from Life of a Law Student

Don't Mess With Illinois

The minimum contacts standard helps us determine whether a state can assert jurisdiction over a non-resident. If a non-resident has not established minimum contact, they must be served in person within the state. In today's cases, we'll see the minimum contacts standard being expanded. As communication and transportation became more efficient, SCOTUS made it easier to sue out of state residents and companies.

McGee v. International Life Insurance Company (1957)

Facts
Mr. McGee was a resident of California. He held a policy with International Life Insurance Company, which was based in Texas. Mr. McGee was most likely their only policy holder in California. They had no agencies within the state, and this particular policy was executed entirely by mail.

When McGee died, the company refused to pay out on his policy. They contended that the policy was void because he committed suicide. McGee's wife sued in California court. Notice of the suit was sent by registered mail to International Life. They did not appear in court, and Ms. McGee won by default.

The state of Texas then refused to give full faith and credit to the judgment. The state felt that due process was not served.

Question
Did International Life Insurance Company establish minimum contact within the state of California?

Holding
Yes

Reasoning
The policy holder was a resident of California. The policy was delivered in California. The premiums were paid in California.

And the winner is...
Ms. Mcgee

Gray v. American Radiator

Facts
Illinois adopted long-arm statutes. Long-arm statutes mean that the state will aggressively try to assert jurisdiction on non-residents as often as possible.

Gray purchased a water heater in his home state of Illinois. The water heater exploded and Gray sued American Radiator. Also named in the suit was Titan Valve, who allegedly manufactured the defective part. Titan was an Ohio based company who sold the part to American Radiator in Pennsylvania. Titan never did business in Illinois.

Question
Do Illinois' long-arm statutes give them the right to assert jurisdiction over Titan?

Holding
Yes

Reasoning
The U.S. economy is made up of middlemen. Once Titan's products entered the stream of commerce, the company was responsible for them regardless of where they ended up.

And the winner is...
Gray

summarized from Life of a Law Student

Personal Jurisdiction and Minimum Contact

Blogger is acting quite weird today. If my summary of minimum contact ultimately ends up in italicized Korean Pig Latin, blame technology and not me.

If a non-resident individual or corporation establishes minimum contact within a state, that state has personal jurisdiction. Like the man of ordinary prudence, minimum contact is a standard. The court is supposed to objectively decide exactly how much "contact" warrants jurisdiction. I'm guessing there are loads of appeals.

International Shoe v. Washington, 326 U.S. 310 (1945)

Facts
International Shoe maintains its headquarters in Delaware. The company employs salesmen in the state of Washington. These men receive sample shoes, and solicit residents of Washington to order from International Shoe. The salesmen do not enter into contracts. They send the orders to Missouri, where the shoes are manufactured and the orders approved. The shoes are then shipped to the purchaser back in Washington. The state of Washington maintains that International Shoe should be bound to contribute to the state's unemployment fund. International Shoe argues that they technically do not conduct business in the state.

Questions
1. Is International Shoe liable for unemployment contributions in the state of Washington?
2. Does the state of Washington have personal jurisdiction over International Shoe?

Holding
1. Yes
2. Yes

Reasoning
1. International Shoe has benefited from laws and services provided by the state and state funding.
2. International Shoe's business dealings in Washington were "systematic and continuous", and therefore sufficient to establish minimum contact with the state.

Don't mess with Massachusetts

Today we look at an example of implied consent, which in this case provides an alternate path for a state to gain jurisdiction over a non-resident.

Hess v. Pawloski, 274 U.S. 352 (1927)

Facts
A resident of Pennsylvania named Pawloski was driving on a public road in Massachusetts. He hit and injured Hess, who sued for damages. Concordant to Massachusetts state law the suit was served to a state registrar. When a non-resident uses public roads within the state they implicitly grant consent for state officials to act as their agents in legal proceedings. The registrar mailed the suit to Pawloski, and he did not appear in court. The court ruled in favor of Hess. Pawloski appealed, arguing that his right to due process was violated. The court overruled and found him liable for damages.

Question
1. Does this statute of implied consent offer a valid path for a state to obtain personal jurisdiction?

Holding
1. Yes

Reasoning
1. Automobiles are dangerous and states have the right to regulate their use. Both residents and non-residents fall within state jurisdiction when they choose to use public roads. This statute only violates the right to due process if it discriminates against non-residents, which it does not.

Notes
Don't forget that this case is 80 years old and only applies to Massachusetts state law.

Mitchell got SERVED!

How can a state court assert jurisdiction over a non-resident?

Pennoyer v. Neff , 95 U.S. 714 (1877)

Facts
Marcus Neff, a resident of California, wanted to obtain land in Oregon under a land grant. Neff needed the help of an attorney, so he hired John Mitchell to assist him. Mitchell later sued Neff in Oregon for unpaid legal fees. Mitchell told the court that he could not find Neff because he didn't know his address in California. He was instructed to place notice of the suit in an Oregon newspaper every Sunday for six weeks. Of course Neff never heard about the suit and lost becuase he did not show up for the proceedings. Oregon seized Neff's land and sold it to Mitchell, who then sold it to Pennoyer.

Question
1. Can a state court seize and sell property of an out-of-state resident without serving them notice of legal proceedings?

Holding
1. No

Reasoning
1. There are two ways a state can assert jurisdiction over a non-resident. The individual must be personally served notice, or their property must be seized prior to legal proceedings.

Notes
This case began as an in personam dispute, which means that one individual makes a claim against another.

Another type of case is in rem, when two individuals have a dispute over who owns a piece of property.

Finally we have quasi in rem cases, which is where Mitchell v. Neff ended up. In quasi in rem a court seizes a non-resident's property and rules on it. The court does this because it doesn't have jurisdiction over the non-resident.

It appears Mitchell was trying to pull a fast one. But since Neff was never served notice, Mitchell himself got SERVED!

Pennoyer primer

Later this week we'll take a look at out first Civil Procedure case, Pennoyer v. Neff. This case deals with the issue of personal jurisdiction. Let's take a quick look at subject matter jurisdiction and personal jurisdiction as explained by wikipedia.

Subject matter jurisdiction is "the authority of a court to hear cases relating to a specific subject matter." Civil courts hear civil cases. Family courts hear custody cases. SCOTUS hears constitutional cases. Judge Judy hears "I gave my mistress a key to my apartment and now all my Iron Eagle DVDs are gone" cases.

Personal jurisdiction is "the power of a court to render a judgment against a particular defendant." State courts do not have jurisdiction over nonresidents. The exception to this rule occurs when the individual is shown to have substantial dealings within the state.

What is Civil Procedure?

Laws can be generally divided into two groups, criminal and civil. Criminal law is fairly self explanatory. Civil law is everything else, including contracts, torts, domestic issues, and civil rights.

According to wisegeek.com, civil procedure is "an intricate and complex set of rules and regulations that apply to the filing, pursuance, and trial of civil lawsuits." Civil procedure does not apply to criminal court.