Top 100 Cases in Civil Procedure: Legal Briefs

Top 100 Cases in Civil Procedure Follow-along Manual INTRODUCTION Civil Procedure can be one of the most difficult areas to study in the law. First, you have to memorize all those rules – and they often vary by state. Then, you have to learn the case law, or jurisprudence, that has interpreted and even created the laws since the inception of our country. This audiobook will go over some of the most important cases that have shaped civil procedure over the decades. You’ll learn everything from jurisdiction, venue, how to plead a complaint properly, and even an overview of class actions. The most important part of each case will be the holding and rationale, so you can use these cases to apply to future fact patterns you encounter both in studying for a bar exam or practicing the law.

JURISDICTION One of the most important and initial issues in civil procedure is the question of jurisdiction; that is – can a certain court actually hear a certain case?

State courts have what is called ‘general jurisdiction,’ meaning they can hear all cases in law and equity. Essentially, state courts are the default court, although for purposes of efficiency, most states divide the kinds of cases they hear into subjects, such as family court or criminal court. One case out of New York shows how broad state jurisdiction is.

Lacks v. Lacks, 41 NY2d 71 (NY 1976) Facts: In a family law case, the defendant (wife) sought to set aside the final judgment of divorce by arguing the court lacked subject matter jurisdiction. The case was lengthy (ten years long), and after she had exhausted all appeals, she finally argued that the husband had not satisfied the residence requirement in order to get a divorce under New York law. She stated that her husband had not been a resident of New York for the full year prior to commencing the original action, resulting in an erroneous judgment. It is important to note that, during these 10 years, the law changed a few times, intending to both liberalize the law and prevent the State from becoming a ‘divorce mill.’ Thus, the statute in question required a party to fulfill certain residence requirements before a cause of action could be entertained.

Issue: The issue was whether the competence of the court to hear a case depends upon a correct determination of residence requirements.

Holding: The court held that the overstated principle that lacking subject matter jurisdiction would make a final judgment void is not applicable to cases which do not actually involve jurisdiction, but rather substantive elements of a cause for relief.

Rationale: The courts in New York had long distinguished between the ability of a court to entertain an action and the power to render a judgment on the merits. Despite the 1

wife’s best abilities to interpret the case law in a certain way, her complaint does not go to subject matter jurisdiction, but rather point only to substantive elements in a cause of action which is able to be decided by a court of competent jurisdiction (a.k.a, the Supreme Court of New York).

FEDERAL QUESTION In comparison, federal courts are courts of limited jurisdiction, able to hear cases only in certain circumstances. One of these times a court can hear a case is called Federal Question jurisdiction. The cause of action must arise under the Constitution, laws, or treaties of the United States. There are dozens of cases that cover this issue, all with various focuses.

The TB Harms Co. V Eliscu case explores what is meant by a case “arising under” a federal question.

Facts: In this case, the issue was jurisdiction over a cause of action concerning four copyrighted songs. Essentially, the parties initially desired for the court to determine who owned how much of an interest in the renewal copyrights, as well as an accounting. The defendant then filed in Federal court, requesting equitable relief against the plaintiffs.

Issue: The issue was whether the Federal court had jurisdiction vis a vis whether the complaint alleged any act or threat of copyright infringement.

Held: The court lacked jurisdiction, and the case was dismissed.

Rationale: The law in question, 17 U.S.C. §1, exclusively reserved specific values of the copyright to the owner; the acts alleged sought merely to establish ownership of the copyright, and not to use or threaten to use the copyrighted material. The statute was specific about its causes of actions, and the federal court could not just assume a cause of action arose under the statute because it was a related issue.

The next case discussed shows how important it is to include the appropriate federal question cause of action in the initial complaint, in Louisville & Nasvhille Railroad Co. v.

Mottley.

Facts: This case was essentially a contract dispute, with a railroad company versus residents of Kentucky, suing to compel specific performance to receive free train passes as a settlement from a train accident. The defendant declined renewing the passes, so the Mottleys sued, asserting that the defense claimed was that giving free passes for train passengers was prohibited under an Act of Congress.

Issue: Whether the federal court had jurisdiction to consider the issue on the grounds of a federal question.

Held: The court lacked jurisdiction.

Rationale: A case ‘arising under’ the Constitution or laws of the United States will exist only when the plaintiff’s statement of his own cause of action is based upon those laws or Constitution, not that the plaintiff alleges an anticipated defense which is subsequently invalidated by some provision of the United States. The plaintiff’s original cause of action must have a Federal Question element – not any anticipated defense.

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The last case that we will explore under the issue of federal jurisdiction using a federal question is Merrell Dow Pharmaceuticals Inc. v. Thompson.

Facts: The Thompsons of Canada and the MacTavishes of Scotland filed similar complaints against Merrell Dow Pharmaceuticals listing a ton of tort and breach of contract claims, including misbranding in violation of the Federal Food, Drug and Cosmetic Act (FDCA). The mothers in the family had taken Bendectin while pregnant, claiming that it caused birth defects.

Procedural Background: The case was filed in state court, then removed to federal court where the misbranding claim was held to arise under federal law. However, the petitioner’s motion to dismiss was granted on the grounds of forum non conveniens. It was then appealed to the Sixth Circuit.

Issue: Whether federal district courts have jurisdiction when a claim arises out of a federal statute that does not specifically grant a private right to a cause of action.

Held: The FDCA did not create or imply a private right to sue for injury, and therefore, the could be no federal subject matter jurisdiction.

Rationale: The petitioner claimed that because a federal issue was present in a state court cause of action, and thus could give rise to federal jurisdiction. However, the court found that Congress did not intend to create a private Federal cause of action for violations of the FDCA, and that the absence of including a federal cause of action can’t be overstated.

Dissent: The dissenting justices argued that there is federal jurisdiction whenever a federal question is an ingredient of the action, making it a much lower threshold. As additional consideration, federal courts are better at interpreting and applying federal law than state courts.

The Grable v. Darue matter covers the situation where an explicit federal cause of action might not exist.

Facts and Procedural history: The IRS took property from Plaintiff due to a lien from an outstanding tax bill. The defendant then bought the property at a tax sale, with a quitclaim deed from the government. The plaintiff later brought a quiet title action in state court against the defendant, saying the IRS did not follow the law in giving him notice to seize the property. Defendant removed the matter to federal court, stating that this case now depended on an interpretation of a federal statute.

Issue: Does federal question jurisdiction require the presence of a federal cause of action if it’s a state law claim?

Held: It depends (how frustrating!)

Rationale: When a federal cause of action doesn’t exist, federal question jurisdiction might still exist over state law claims that implicate federal law, provided it does not distort the division of labor between state and federal courts. In this case, federal jurisdiction is required to interpret a federal tax statute, and the state law claim is a rare, quiet title claim based on federal seizure; therefore, the balance between the two will not be upset.

This case is notable in that referred to a series of tests to determine when a case would be eligible for original jurisdiction in federal court. The Holmes Creation Test comes from 3

the statement of Justice Holmes stating that a suit arises under the law that creates the cause of action. The Franchise Tax Board test, stemming from the eponymous case, granted jurisdiction where the vindication of a right under state law necessarily turns upon some construction of federal law. And the dissent used the Smith test, stating that if it appears from the statement of the plaintiff that the right to relief depends on the construction of the Constitution or federal laws, and is not merely a colorable claim but rests upon a reasonable foundation, then it would confer jurisdiction upon the federal courts.

DIVERSITY OF CITIZENSHIP Federal courts also get jurisdiction when the parties involved are citizens of different states. This can include states in the country, as well as completely different countries. Courts can – and should- determine whether they have jurisdiction, even if the parties do not allege it. This issue was covered in Capron v. Van Noorden.

Facts and Procedural History: The initial issue was an action of trespass, which found in favor of the defendant. The plaintiff sued, assigning error by arguing that the court never found that it had jurisdiction over the matter before rendering judgment, not determining if either party was diverse.

Issue: Was it an error for the court to fail to say they had jurisdiction?

Held: Yes, it was the duty of the Court to see that they had jurisdiction Rationale: The parties cannot merely consent to jurisdiction to create jurisdiction in a federal venue. The court needed to determine and find that the parties were diverse before rendering its judgment.

Of course, many issues have since been rectified via statute, and Federal Rule 8a1 made it clear that the complaint shall now contain the grounds upon which the court’s jurisdiction depends. Some statutes are silent on some issues, and therefore, case law is the gap filler. This is the case with Strawbridge v. Curtiss, which requires complete diversity of citizenship, even if the statute is not explicit.

In Strawbridge v. Curtiss, the case is quite succinct – very unlike SCOTUS. Facts and Procedural History: The case involved multiple plaintiffs and multiple defendants. All plaintiffs and defendants, except Curtiss were all citizens of Massachusetts. Curtiss hailed from Vermont. Strawbridge sued Curtiss and the other defendants in federal court, alleging subject matter jurisdiction based on diversity of citizenship.

Issue: Was there diversity of citizenship?

Held: No – there must be complete diversity of citizenship. No one defendant can be from the same state as a plaintiff.

Rationale: As mentioned, the court was succinct, and in its 150-odd word judgment, states that if there are more than 2 plaintiffs, and more than 2 defendants, then each of the plaintiffs must be capable of suing each of the defendants in federal court. Because most of the plaintiffs were from the same state as most of the defendants, this was not diversity of citizenship, because not all of the plaintiffs could sue the defendants individually in federal court.

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Finally, a recent case emphasizes the confusion of determining the citizenship of a corporation in the Hertz Corp. v. Friend case.

Facts and Procedural History: The plaintiffs, citizens of California, sued Hertz in state court, seeking damages for violations of the state wage and hour laws. Hertz requested to remove the case to federal court, stating that the two parties lived in different states, so diversity of citizenship applied. Hertz claimed its operations were in New Jersey, and the operations in California were minor and so, did not constitute the principal place of business.

Issue: Was Hertz a California citizen not entitled to federal jurisdiction?

Held: Rationale: The court had to determine where the company’s principal place of business way. Some courts used the ‘nerve center’ test, usually deferring to where the major decisions occurred, such as where headquarters was located. Other courts utilized the Place of Operations method, such as where the biggest factory or plant was. Using these two methods in the case, the court found that it was still unclear; however, ultimately, it determined that while the operations in California were significant, they were not enough for Hertz to be considered a citizen of California – it was not the primary place of business generating most of the revenue. Therefore, the nerve center of Hertz in New Jersey was used, resulting in diversity of citizenship.

This case is significant in that it allows the court to use both tests to determine citizenship. Each business and corporation is different, and therefore, the tests must be flexible and broad enough to allow the court to consider all the circumstances when determining citizenship.

The next way to obtain federal subject matter jurisdiction is to ensure that the amount in controversy exceeds $75,000.00.

RULE 4 – AMOUNT IN CONTROVERSY

This one is pretty straightforward –before bringing a case before Federal court, the amount in controversy – aka, the damages and restitution requested – must exceed $75,000.00. There are a few rules within this rule. First – an individual plaintiff can aggregate claims provided they arise from the same common nexus and as long as it does not destroy diversity of citizenship, which is also required for the amount in controversy.

Additionally, there are certain requirements for multiple defendants, as outlined in the Middle Tennessee News Co., Inc. v. Charnel of Cincinnati, Inc. case.

Facts and Procedural History: The case was disposed of at the trial court, but the defendants raised jurisdictional issues on appeal. The plaintiffs had already brought a diversity action against the defendants, alleging a breach of contract for the defendant’s failure to pay money due on several prior sales. The defendants, during said sales, held themselves out to the plaintiffs as one corporation, due to the president and shareholder 5

of three companies being one man – Nelson. During pre-trial, an independent account was hired to determine liability and damages, over the defendant’s repeated objections.

Issue: Did the plaintiffs assert subject matter jurisdiction when it aggregated several claims against one defendant?

Held: No – there was a lack of subject matter jurisdiction.

Rationale: The plaintiffs could not demonstrate there was diversity jurisdiction because there was neither a separate amount alleged in controversy or an allegation that Nelson could be held jointly liable for corporate debts. In Indiana, where the case originated, corporate officers acting on behalf of the company are not generally liable for the obligations of the corporation. However, the suit will stand against the corporations, because they were held out as doing business as one entity, which is sufficient to hold them jointly liable. This case reiterated the concept that where there are multiple defendants, the plaintiff can aggregate the amount against the defendants to reach the amount in controversy – but only if the defendants are jointly liable. If the defendants are severally liable, the plaintiff has to satisfy the amount in controversy as to each individual defendant.

A similar concept in making sure the amount in controversy is made for everyone is played out with the issue of class actions in Zahn v. International Paper.

Facts and Procedural History: In this case, over 200 lakefront property owners and lessees sought damages from International Paper Co., out of New York, for having permitted discharges into a river which flowed into Lake Champlain, polluting their property. The suit was brought as a diversity action and, for class actions at the time, the parties needed to each satisfy an amount of $10,000 in damages. The lower court was not convinced that each claimant had been damaged by the requisite amount in controversy, and it was appealed.

Issue: Did each owner have pollution damages in excess of $10,000 in order to gain jurisdiction for a class action?

Held: No – multiple plaintiffs with separate and distinct claims must satisfy the jurisdictional amount for suits in federal courts, and where the named plaintiffs, but not the unnamed plaintiffs, can show damages in the jurisdictional amount, a class action cannot be maintained.

Rationale: The court relied on precedent, where in a prior case, none of the plaintiffs alleged a claim over $10,000, and the rule was created there that each of the several plaintiffs who assert separate and distinct claims must satisfy the jurisdictional amount if the claim is to survive a motion to dismiss. There can be no aggregation, and one plaintiff may not ride in on another’s coattails.

SUPPLEMENTAL JURISDICTION

Speaking of aggregation, sometimes there is something called supplemental jurisdiction, where parties might want to bring a case based on both state and federal law. Basically, the rule was that courts have the discretionary power to hear otherwise jurisdictionally-insufficient claims as long as they derive from a common nucleus of operative facts in which there is bearing on a substantial federal issue. The seminal 6

case discussing this issue, where the rule was created, is in United Mine Workers of America v. Gibbs.

Facts and Procedural History: The case came out of a dispute between two labor unions over who would represent the coal miners of Marion County, TN. The plaintiff, Gibbs, was hired by Grundy – owned by the Tennessee Consolidated Coal Co – to run a new coal mine. The mien would have been under the UMW Local 5881 – whose workers used to work for Tennessee Consolidated. Instead, Gibbs was going to use members of the rival union, Southern Labor Union, to work the mine. Of course, the UMW members found out, and they showed up with weapons to prevent the opening of the mine. The violence stopped, but Gibbs lost his job, and lost several other leases and contracts, so he sued the United Mine Workers (but not the specific locale or its members). The trial court jury held that UMW had violated both federal and state laws, and awarded claims. This was affirmed by the Sixth Circuit.

Issue: Whether the district court acted properly in exercising jurisdiction over both the state and federal law claims.

Held: In this particular case, yes, since the events arose out of a common nucleus of operative fact.

Rationale: The law encourages the joinder of claims, remedies and parties to the extent possible in line with judicial economy.

Whether the courts have supplemental jurisdiction is a matter for the courts, not the matter for the plaintiff. There must be a common nucleus of operative fact; in other words, the claims must come from the same situation, such that a plaintiff would ordinarily expect to need to try them all in one judicial proceeding. The concurrence agreed with the jurisdictional issue, but criticized other aspects of the case not relevant to this discussion.

After this case came several others concerning the ins and outs of supplemental jurisdiction. First up, is Aldinger v. Howard.

Facts and Procedural History: Petitioner was discharged – without a hearing – from her job in the respondent’s office (who was the county treasurer), because she was allegedly living with her boyfriend. (It was the 70s, people were not that progressive).

Petitioner sued the treasurer, the county and other official officers in Federal Court, under a statute which allowed sued for deprivation of federal constitutional rights, and stated the courts would have jurisdiction over "any civil action authorized by law to be commenced by any person" to redress the deprivation, under color of state law, of federal constitutional rights. Pendent – or supplemental - jurisdiction was alleged to lie over a state law claim against the county. The District Court dismissed, stating that the county was not a person that could be sued – thus, there was no independent basis of jurisdiction.

Issue: Whether the doctrine of supplemental jurisdiction extends to confer jurisdiction over a party where no independent basis of federal jurisdiction actually exists, even if the state claim arose out of a common nucleus of operative fact?

Held: No, it does not.

Rationale: The law was settled that supplemental jurisdiction covered the litigation of additional claims between parties – but was much debated in the circuits when it came down to parties without any independent basis of federal jurisdiction. However, it is one thing to allow parties already before the court to litigate an additional state law claim 7

arising from the same set of facts, and it is another thing entirely to allow a plaintiff to join an entirely different defendant on the basis of a state law claim simply because they share a common nucleus of operative fact. Despite improving judicial economy, allowing a completely new party would go against the principle that federal courts are courts of limited – not general – jurisdiction.

Dissent: To not allow the rationale in Gibbs to extend to parties as well as claims would be a waste of judicial time, to require a party to prosecute a claim involving the exact same facts against a party in State court when he is already litigating in Federal court. th In light of the fact that this case contained a form of discrimination, and the 14 amendment, the federal courts should be able to entertain these cases, given the history of the ability of federal courts to remedy discrimination (particularly during the Reformation era and more recent civil rights movement). It clearly does not go against Congressional intent to entertain a party as well as a claim.

The next case to explore the limits of supplemental and ancillary jurisdiction was the Owen Equipment & Erection Co v. Kroger case.

Facts and Procedural History: Kroger, a citizen of Iowa, sued the Omaha Public Power District (OPPD), a Nebraska utility company, in order to receive damages from the wrongful death of her husband, electrocuted while walking next to a crane whose boom touched a power line. OPPD filed a third-party complaint against Owen – they owned and operated the crane. So, Kroger amended her petition to also include Owen.

Owen stated they were a Nebraska corporation, but actually, their principal place of business was in Iowa – so it destroyed the diversity of citizenship.

Issue: Whether a court can hear a claim against a third-party defendant if there is no independent basis for federal jurisdiction when the action is based on diversity of citizenship?

Held: In this case, no.

Rationale: Kroger was a plaintiff who had chosen federal court; her claim against Owen was entirely separate from her original claim against OPPD because Owen’s liability to her did not depend at all on whether OPPD was liable, too. Diversity of jurisdiction was destroyed, and therefore, the court had no jurisdiction otherwise.

Dissent: There should be federal jurisdiction because, once again, the convenience and preservation of judicial economy should take precedence.

Note: 28 USC §1367 was amended and codified the majority’s ruling, but only after Finley.

This basic principle was affirmed in Finley v US. Facts and Procedural History- The decedents of Petitioner were killed when their plane hit electric lines while about to land in San Diego. Petitioner filed a claim in Federal Court under the Federal Tort Claims Act, claiming negligence on the part of the Federal Aviation Administration (FAA). She then moved to amend her claim, adding state law tort claims against the city and utility company. The District Court accepted her motion, and the jurisdiction, while the Court of Appeals reversed it.

Issue: Can a federal complaint include claims against original state court defendants where no independent federal jurisdiction exists?

Held: No. 8

Rationale: Citing to Kroger, the court recalled that jurisdiction over a matter in controversy between diverse parties cannot confer supplemental jurisdiction over a different, nondiverse defendant, even if the claim involving the defendant meets the Gibbs test (the common nucleus of operative fact). Even though the petitioner was already in Federal court, the ruling in Kroger should stand – despite the FTCA’s revision of the code, which Petitioner argued broadened jurisdiction. The court disagreed, stating that the efficiency and convenience of an action will have to be foregone in favor of separate actions in state and federal courts.

28 USC §1367 superseded Finley – and Kroger stood for the fact that supplemental jurisdiction will be available unless diversity of jurisdiction would be destroyed. As a note, the courts can refuse to exercise supplemental jurisdiction if: The claim raises a novel or complex issue of state law; The claim substantially predominates over the claim or claims over which the district court has original jurisdiction; The district court has dismissed all claims over which it has original jurisdiction; Other exceptional circumstances.

One of the latest cases on supplemental jurisdiction is the Exxon v Allapattah case.

Facts and Procedural History: This case consolidated two cases where other plaintiffs wanted to join in, but did not have the amount required to satisfy the diversity requirement. The Supreme Court looked at these cases because there was a split in the circuits. In the Exxon matter, Exxon dealers filed a class action against the Exxon corporation, arguing that they intentionally conspired to overcharge fuel bought from Exxon. In the added on case, Star-Kist tuna, a 9-year-old girl sued them for damages when she sliced her finger open on a can of tuna.

Issue: Do the federal rules grant supplemental jurisdiction to claims and parties joined to a claim where original jurisdiction is based solely on diversity of citizenship, and where the additional joined claims cannot independently meet the amount-incontroversy requirements?

Held: Yes, as long as other elements of diversity jurisdiction are present and at least one plaintiff satisfies the amount in controversy requirement.

Rationale: Using the plain language of the statute, the court held that as long as one claim satisfies the amount-in-controversy requirement, then the court has original jurisdiction over the claim, even if they otherwise would not over the other claims that have been joined in.

Now that you have a good idea of the basic, major cases concerning subject matter jurisdiction for a federal court, let’s move on to Personal Jurisdiction. The dissenting justices that expansion of supplemental jurisdiction was not intended by Congress, and that historical precedent supported a narrower reading of the statute.

Diversity of citizenship came up in a case that also centered around the request of a party to remove the case to federal court in Caterpillar, Inc. v Lewis.

Facts and Procedural history: Lewis, of Kentucky, filed suit in state court against Caterpillar after he suffered injuries while operating a bulldozer. He named the defendants as both a Delaware and Kentucky corporation. The Kentucky corporation 9

and the plaintiff later settled out of court, after which the plaintiff attempted to remove the case to Federal court on the basis of diversity jurisdiction.

Issue: Does the absence of complete diversity at the time of removal to Federal court kill federal court jurisdiction?

Held: No, federal jurisdiction is permissible if the jurisdictional requirements are met at the time of entry of judgment.

Rationale: Because complete diversity existed at the moment trial was commenced, then jurisdiction could be had. Additionally, policy reasons compelled the opinion – remanding the case to state court at this point in the litigation (after judgment had been reached) would go against judicial economy.

PERSONAL JURISDICTION In order to determine whether a court can get personal jurisdiction over someone, there are three main questions you must ask. First, is there a traditional base of personal jurisdiction? If not, does the long-arm statute apply? If it does, is its application Constitutional?

Let’s cover the first question – what are some of the traditional bases of personal jurisdiction?

- Territoriality or sovereignty is one. This means that the state has exclusive jurisdiction over the people and its property within its border.

This principle was established in a case called Pennoyer v Neff. This case is really old.

Facts and Procedural History: Neff hired an attorney to help him with paperwork when he tried to get a land grant under a law which incentivized the development of land in the American West. Neff ultimately got property in Oregon, and had an estimated value of $15,000 at the time. The attorney sued Neff for debts concerning his legal service.

Neff could not be found, so the attorney won by default. At the time, the land grant had not come through. The attorney waited until Neff’s land grant came through, and he then executed on his judgment, seizing the land, which was subsequently purchased by Pennoyer – whom Neff later sued in an effort to recover his land. Of course, it was appealed.

Issue: The issue was whether a state court had personal jurisdiction over a nonresident who was not personally served with process within the state, and who had no property in the state at the time of the original lawsuit.

Holding: The court held the trial court did not have personal jurisdiction, because the property needed to be attached before litigation.

Rationale: The court could have had quasi in rem jurisdiction at that point. Constructive notice is insufficient to inform a person living in another state except for cases affecting personal status (like divorce). If cases are in rem, or are property matters, and the property sought is within the boundaries of the state, then the law presumes the owner would know what happens to the property; therefore, in order for constructive notice to be effective for cases in rem, the attachment of the property before judicial proceedings must occur.

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While courts have tried to expand or challenge this view, it is a firm foundation of personal jurisdiction, subsequently affirmed by Burnham v. Superior Court of California.

Facts and Procedural History: The Burnhams were a married couple in New Jersey, who decided to divorce. On July 14, 1987, the wife, with their two children, moved to California. She convinced her husband to delay filing for divorce in New Jersey until the 18 months of being separated would qualify for a ‘no fault’ divorce. Then, before the 6month residency requirement was met in California, the wife filed for divorce in California. The nerve! When the husband, Dennis, found out about it, he tried to file and serve the New Jersey action instead of waiting. Dennis was served with the California suit when he was there on business and visiting his children. The next day, the wife was served with the New Jersey summons. Dennis filed a special appearance contesting personal jurisdiction. The court determined it had jurisdiction. It wound its way through the court system, and ultimately ended up before SCOTUS. Issue: Did a state court have personal jurisdiction over a non-resident of the state who was served with process while temporarily visiting the state?

Held: Yes – this is known as transient jurisdiction, and is constitutionally permissible.

Rationale: Interestingly, this case produced no majority opinion because while they unanimously agreed that transient jurisdiction was available, they were divided on how due-process issues should be analyzed. The lead opinion, written by Scalia, affirmed that State courts have jurisdiction even over nonresidents as long as they are physically present within the state, based on the jurisprudence of the court. Justice Brennan concurred that California had jurisdiction over Dennis, but felt that simply because this had been done for time in memoriam was insufficient to justify why. Essentially, when a person is voluntarily in the state, they avail themselves of the benefits of the state. And, technology has made it less burdensome than previously for a non-resident to go into the jurisdiction – and if it is too burdensome, then they can use the doctrine of forum non conveniens to avoid it. Justice White had a different approach, he agreed with Scalia that it was a traditional, accepted notion; however, this was not completely binding because SCOTUS can overrule its own opinion. In this case, there was no need to do so. Finally, Justice Stevens essentially said that all of these opinions made it a “very easy case” to decide.

The Burnham case covers the traditional base of territoriality. There is also the domicile version, where the state has jurisdiction over those domiciled in state, regardless of where they located. To have a domicile is the place where the party has both a physical presence (like a home or office) and the intent to remain indefinitely.

States also have personal jurisdiction over an agent, if the agent is acting in the interest

of the individual. Essentially, the agent can be served, and the court will have jurisdiction over that individual, as though they were personally served.

Parties can also consent to personal jurisdiction, either through express or implied methods. One case that explores the use of express consent is Carnival Cruise Lines, Inc. v. Shute.

Facts and Procedural Background: A couple from Washington State – the Shutes – bought passage on a ship owned by Carnival, based in Florida. The tickets had a clause 11

designated Florida as the agreed upon location for the resolution of any disputes between the parties. The Shutes boarded in L.A., and in international waters, the wife slipped and suffered injuries. They filed suit in a Washington Federal District Court, which granted summary judgment in their favor. The Court of Appeals refused to uphold the forum-selection clause on the tickets.

Issue: Should the forum-selection clause be enforceable?

Holding: Ye s Rationale: The Court used the rationale set forth in the Bremen v Zapata Off-Shore Co. case. In that case, the court determined that a freely negotiated forum-selection clause should be given full effect; however, the lack of opportunity to negotiate the forum clause should not negate it. Including such a clause, provided its reasonable, would be permissible for several reasons, like the fact it is somewhat likely an event could happen on a cruise ship that would make it susceptible to litigation in multiple places, cruise liners have a special interest in limiting the forums in which they can be sued. The court did not set it aside on the grounds of inconvenience because the Shutes did not claim lack of notice for the forum clause, and they probably benefited from reduced fares due to more affordable costs of litigation.

Because this court affirmed and applied the Zapata case rationale, the Zapata case is worth reviewing.

Facts and Procedural background: The parties entered into a contract for a drilling rig to be moved from Louisiana all the way to Italy. The contract included a clause which stated a court in England would settle any disputes. A storm forced the towing company to stop in Tampa, Florida, and the other party sued there. The lower courts refused to uphold the forum selection clause, and so it was appealed.

Issue: Are forum selection clauses valid and enforceable in a contract?

Held: Ye s Rationale: It is enforceable unless the party seeking to avoid such a clause can meet a burden, which is high, to show that said clause is unreasonable or unjust. In this case, given the long journey and the endless possibilities for forums, there was a lot of uncertainty and the potential for a lot of inconvenience to both parties if this happened.

The court in England was no doubt an attempt to reach a fair, halfway point for the parties to litigate.

What’s important about the Zapata case is that this rationale applies not only to American citizens, but to aliens as well. These cases explored clauses for the use of express consent within a contract for personal jurisdiction. The next case discusses how personal jurisdiction can arise out of implied consent. Hess v. Pawloski was a Supreme Court case.

Facts and Procedural history- Hess, from Pennsylvania, was in a car wreck with Pawloski, who lived in Massachusetts. The accident occurred in Massachusetts. At the time, there was a statute in Massachusetts which stated that a non-resident motorist implicitly consented to the appointment of the registrar of motor vehicles to be their agent to get served within the state, and such service was valid to ensure personal jurisdiction. Hess contested the jurisdiction, and his motion was denied.

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Issue: Does a statute implying personal jurisdiction via use of an agent within the state th for out-of-state motorists comply with the Due process amendment of the 14 amendment?

Held: Ye s Rationale: The court suggested that residents are subject to a court having jurisdiction at the location where the accidents occur, and therefore, relaxed the legal rules concerning consent in order to include residents who travel through states using the highway system. Because cars are dangerous, states should have the power to regulate their use on the roads to make highways safer.

Finally, the last traditional base of jurisdiction is corporate presence – jurisdiction will be

in the state where the business is incorporated and where the state is doing business.

When you cannot achieve personal jurisdiction over a party using traditional bases, then

an examination for the expanded bases is used. The first issue is the ‘minimum contacts’ tests. A multitude of cases cover this, including some we have already discussed. Essentially, if someone has continuous and systematic contact with the state, plus a cause of action that arises from those contacts, there will almost always be general jurisdiction. This is the basis of long-arm statutes, where the subject matter of the action must relate to or have a specific connection with the forum state.

The first and best-known case that explores this concept of minimum contacts is International Shoe.

Facts and Procedural History: The State of Washington (again) was the plaintiff in this matter. The state established a tax on employers who conducted business within the state to provide a fund to help newly unemployed workers in the state. It was a mandatory contribution. The defendant, the international Shoe Co., was incorporated in Delaware, but had its principal place of business in Missouri. There were about 11 to 13 salesmen at any given time in Washington, working strictly on commission. These salesmen were residents of the state, met with clients in various locations across the state, and occasionally rented out space, but the company did not really have a permanent site in Washington, although the salesmen earned about $31,000 in total.

The company did not pay the tax, so the state effected service of process on one of their salesmen, as well as a letter sent via registered mail to their place of business in Missouri. The trial court ruled Washington has personal jurisdiction over the defendant, and the ruling was upheld. So, on it went to SCOTUS. Issue: What is the level of connection required between a non-resident corporation and a state in order for that corporation to be properly sued within said state?

Held: The fact the corporation is involved in interstate commerce doesn’t relieve it from the requirement to pay to the state unemployment compensation fund.

Rationale: The activities of the corporation made it available to state courts to sue, establishing sufficient contacts between the State and the business making it reasonable and just for the State to enforce obligations arising out of business activities.

The Court essentially created a new doctrine, allowing a court to exercise personal jurisdiction over an out-of-state defendant as long as the defendant has sufficient minimum contacts with the state, such that the exercise of jurisdiction “will not offend 13

traditional notions of fair play and substantial justice.” However, the court did distinguish

between ‘casual’ contact and systematic and continuous contact. If a defendant has only casual contact, then the claim has to relate to the contact in order for the state to have jurisdiction (like a car accident). Systematic and continuous contact will allow claims both related and unrelated to the contact to be brought.

The next case which looked at the application of this doctrine is Gray v. American Radiator.

Facts and Procedural Background: The Plaintiff, in Illinois, was injured when a water heater exploded. He sued Titan Valve, who manufactured a safety valve which had been negligently built for use in the water heater, along with American Radiator, the manufacturer. Titan was of Ohio and the manufacturer was based in Pennsylvania. Titan had no connection to Illinois except that its valves were used in the water heater and subsequently sold there.

Issue: Does the court have jurisdiction over Titan, and does the Illinois long-arm statute violate the due process guarantees of the U.S. Constitution?

Held: The court does have jurisdiction, and the long-arm statute does not violate due process.

Rationale: The International Shoe test has been quite relaxed given the evolving nature of interstate commerce, and in this case, because the injury occurred in Illinois, it was the most convenient forum. From this case, manufacturers should be aware more than ever that any products are used in a foreign state.

McGee v. International Life Insurance explores the same issues in a different setting, really bringing home how companies doing national business must be prepared to have lawsuits elsewhere.

Facts and Procedural Background: Petitioner’s son, a resident of California, bought life insurance from Arizona, and named the Petitioner as a beneficiary. Respondent, a Texas corporation, assumed the responsibilities of the company from Arizona, and mailed a reinsurance certificate to the son in California, who accepted. When the son died, Petitioner sent proof, but the insurer refused to pay the claim, stating the son had committed suicide. The petitioner sued the Texas corporation and obtained a judgment after serving the respondent’s principal place of business via registered mail.

Respondent has never solicited or done insurance business in California apart from the instant case.

Issue: Was the California long-arm statute in violation of due process?

Held: No. Rationale: It was sufficient for purposes of due process that the suit was based on a contract which itself had a substantial connection to the State. California has an interest in ensuring their residents have recourse when their insurers fail to pay claims, even if out of state. The actions of the insurance company were purposefully directed to the State – it accepted payments of premiums from the CA resident. There might be an argument for an inconvenient forum –which was not raised, and so was not considered.

Another case shows that contacts should actually be volitional and willing (Hanson v.

Denckla) 14