(1) Why did the Robinsons pursue the question of jurisdiction over the dealership and the regional distributor all the way to the Supreme Court when they knew that the court had jurisdiction over the manufacturer and the international distribution by the latter’s acquiescence? Why wouldn’t a judgment against them have been sufficient since, as Justice Blackmun noted (in an opinion not reproduced above), they are presumably solvent? For everything you ever wanted to know about the real story of World-Wide Volkswagen, see Adams, World-Wide Volkswagen v. Woodson—the Rest of the Story, 72 Neb. L. Rev. 1122 (1993).
(2) How can a Court that is so blasé about overreaching in choice of law (as in Hague, page 311 supra) be so concerned about jurisdiction? Doesn’t a state do more harm when it does the former than when it does the latter? The irony was put into sharp relief when the Minnesota Supreme Court, which decided Hague at the state level, ruled that it had no jurisdiction in a case in which a Wisconsin border-city tavern had served alcohol to a Minnesota resident who subsequently had an accident in Minnesota. West American Insurance Co. v. Westin, Inc., 337 P.2d 676 (Minn. 1983). Cf. Meyers Kallestead, 476 N.W.2d 65 (Iowa 1991) (same, citing World-Wide Volkswagen). Isn’t the effect of Hague and World-Wide Volkswagen, taken together, to subject defendants to marginal choices of law when and only when they have substantial unrelated contacts with the forum state? See Martin, Personal Jurisdiction and Choice of Law, 78 Mich. L. Rev. 872 (1980), and Silberman, Shaffer v. Heitner: The End of an Era, 53 N.Y.U. L. Rev. 33, 79-90 (1978).
(3) What would have been the outcome of the case if the Robinsons had been moving to Oklahoma and not merely passing through it on their way to Arizona? If they already lived in Oklahoma at the time of the accident? If they had lived in Oklahoma when they bought the car but the dealership did not know that fact? If they had lived in Oklahoma at the time they bought the car and the dealership did know that fact, but they were the only Oklahoma customers of the dealership? (If you find in favor of jurisdiction in the last hypothetical, would it extend to the regional distributor, which had no dealings with the Robinsons?) What if a moderate number of sales were made to Oklahoma residents and that fact was known to the dealership, but those sales had not been solicited by the dealership?
(4) What is the answer to Justice Brennan’s question of why there is a difference between the case where the chain of distribution takes the car to a distant state and the case where the customer takes it there and that fact could have been predicted? Could the difference be based on the concept of benefit? Consider: If the state of Oklahoma were to disappear tomorrow, the effect on the defendant dealer’s sales would probably be zero. (Recall that the Robinsons were New York residents when they purchased their car.) But if the product in question were one that went through a chain of distribution to Oklahoma (like the valve in Gray v. American Radiator, 22 Ill. 2d 432, 176 N.E.2d 761 (1961)), the disappearance of the state of Oklahoma would decrease sales of the product. Thus, the amount of benefit that the defendant derives from a state, in a pecuniary sense, turns very much on whether the customer or the chain of distribution takes the product into that state.
(5) In footnote 19, Justice Brennan’s dissent suggests that application of an unfavorable substantive law that the defendant could not have anticipated might be a factor, under his scheme, for denying jurisdiction. But does it make sense to say that an unfair choice of law will result in a denial of jurisdiction where that choice of law itself is constitutional? Consider, for example, defendants A and B, both of whom might be subject to unfair and surprising law in State X if jurisdiction is asserted there. Would it be rational to deny jurisdiction and allow defendant A to escape the law of State X while subjecting defendant B to that same unfair and surprising law because B, through “substantial contacts” with State X, totally unrelated to the cause of action, is subject to the general in personam jurisdiction of that state?
(6) In Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493 (1971), the Supreme Court refused to exercise original jurisdiction of a complaint by the state of Ohio against Michigan and Canadian corporations alleged to be polluting Lake Erie. Though it found that it had such jurisdiction, it found the exercise of the jurisdiction unnecessary because alternative forums were available, including Ohio state courts. The Court found explicitly that Ohio courts could exercise in personam jurisdiction over the out-of-state defendants for a direct intrusion of pollutants causing physical harm within the state. Is World-Wide Volkswagen distinguishable because the presence of the automobile in Oklahoma, unlike the presence of the pollutants in Ohio, was due to an “intervening human agency”? Or is the distinction a narrower one—that the presence of the automobile in Oklahoma was due to the activities of the plaintiff, and the plaintiff’s unilateral activities should not be able to create jurisdiction? If the latter distinction is the appropriate one, does it follow that jurisdiction should exist in Oklahoma for a suit brought by the driver of the other car if he, too, happened to have been injured by the burning of the Robinson car’s gas tank (on the grounds that the other driver was not instrumental in getting the Robinson vehicle into Oklahoma)?
(7) Isn’t it fairer to make the Robinsons travel to New York to litigate than to require these defendants to go to Oklahoma? The Robinsons, after all, are the ones responsible for the extra interstate costs of litigation. See Brilmayer, How Contacts Count: Due Process Limitations on State Court Jurisdiction, 1980 S. Ct. Rev. 77.
(8) The Supreme Court provoked a fair amount of interest with its discussion of state sovereignty as an essential element of jurisdiction. Recall the discussion in Insurance Co. of Ireland, page 411 supra. See generally Stein, Styles of Argument and Interstate Federalism in the Law of Personal Jurisdiction, 65 Tex. L. Rev. 689 (1987). Isn’t the dichotomy between sovereignty analysis and individual liberty analysis really a false one, though? Isn’t the defendant’s individual liberty claim essentially a claim that the forum has exceeded the reach of the power legitimately accorded it in a world of territorially limited states?
(9) If foreseeability is the issue, then Doe v. National Medical Services, 974 F.2d 143 (10th Cir. 1992), presents an interesting test case. The Colorado plaintiff was an employee who had been discharged after a Pennsylvania testing laboratory reported (allegedly, negligently) that his urine sample had tested positive for drugs. (He was required to submit to random drug testing by his employer because he had recently completed a substance abuse program.) The urine sample had been collected in Colorado and was then sent to Smith-Kline Bio-Sciences in Van Nuys, California; from there it was sent to NMS in Pennsylvania. NMS did not know that the sample was from a Coloradan; indeed, they could not have known because the sample was identified only by a bar code. Nor did they know that the results would be communicated to a Colorado employer. What should the court decide on the personal jurisdiction motion?
436 U.S. 84 (1978)
Justice MARSHALL delivered the opinion of the court.
[Appellant Ezra Kulko and appellee Sharon Kulko Horn were New York domiciliaries when they got married during a brief stay in California. They returned to New York where their two children, Darwin and Ilsa, were born. The couple and their two children resided in New York until they separated in 1972. Sharon and the children moved to California. Sharon returned briefly to New York to sign a separation agreement specifying that Ezra would pay alimony and that the children would remain with Ezra during the school year and visit Sharon on holidays. Immediately after execution of the separation agreement, Sharon flew to Haiti, where she secured a divorce decree that incorporated the terms of the separation agreement.
Subsequently, each of the children expressed their desire to live with their mother in California. Ezra acquiesced, purchased a one-way plane ticket for Ilsa, and later paid for Darwin’s move. Once both children arrived, Sharon instituted a civil action in California to establish the Haitian divorce as a California judgment, to modify the judgment so as to award her full custody of the children, and to increase appellant’s child support obligations. Ezra was served with process under the California long-arm statute that allows state courts to assert jurisdiction on any basis not inconsistent with the Constitution. He challenged the court’s jurisdiction under the due process clause. The California Supreme Court rejected his argument and held that jurisdiction was proper because appellant had “caused an effect in [California]” by purposefully sending Ilsa into the state.]
In reaching its result, the California Supreme Court did not rely on appellant’s glancing presence in the State some 13 years before the events that led to this controversy, nor could it have. Appellant has been in California on only two occasions, once in 1959 for a three-day military stopover on his way to Korea and again in 1960 for a 24-hour stopover on his return from Korean service. To hold such temporary visits to a State a basis for the assertion of in personam jurisdiction over unrelated actions arising in the future would make a mockery of the limitations on state jurisdiction imposed by the Fourteenth Amendment. Nor did the California court rely on the fact that appellant was actually married in California on one of his two brief visits. We agree that where two New York domiciliaries, for reasons of convenience, marry in the State of California and thereafter spend their entire married life in New York, the fact of their California marriage by itself cannot support a California court’s exercise of jurisdiction over a spouse who remains a New York resident in an action relating to child support.
Finally, in holding that personal jurisdiction existed, the court below carefully disclaimed reliance on the fact that appellant had agreed at the time of separation to allow his children to live with their mother three months a year and that he had sent them to California each year pursuant to this agreement. [T]o find personal jurisdiction in a State on this basis, merely because the mother was residing there, would discourage parents from entering into reasonable visitation agreements. Moreover, it could arbitrarily subject one parent to suit in any State of the Union where the other parent chose to spend time while having custody of their offspring pursuant to a separation agreement. As we have emphasized:
The unilateral activity of those who claim some relationship with a non-resident defendant cannot satisfy the requirement of contact with the forum State.… [I]t is essential in each case that there be some act by which the defendant purposefully avails [him]self of the privilege of conducting activities within the forum State.…
Hanson v. Denckla, 357 U.S. 235, 253 (1958).
The “purposeful act” that the California Supreme Court believed did warrant the exercise of personal jurisdiction over appellant in California was his “actively and fully consent[ing] to Ilsa living in California for the school year … and … send[ing] her to California for that purpose.” We cannot accept the proposition that appellant’s acquiescence in Ilsa’s desire to live with her mother conferred jurisdiction over appellant in the California courts in this action. A father who agrees, in the interests of family harmony and his children’s preferences, to allow them to spend more time in California than was required under a separation agreement can hardly be said to have “purposefully availed himself” of the “benefits and protection” of California’s laws.7
Nor can we agree with the assertion of the court below that the exercise of in personam jurisdiction here was warranted by the financial benefit appellant derived from his daughter’s presence in California for nine months of the year. This argument rests on the premise that, while appellant’s liability for support payments remained unchanged, his yearly expenses for supporting the child in New York decreased. But this circumstance, even if true, does not support California’s assertion of jurisdiction here. Any diminution in appellant’s household costs resulted, not from the child’s presence in California, but rather from her absence from appellant’s home.
In light of our conclusion that appellant did not purposefully derive benefit from any activities relating to the State of California, it is apparent that the California Supreme Court’s reliance on appellant’s having caused an “effect” in California was misplaced. This “effects” test is derived from the American Law Institute’s Restatement (Second) of Conflict §37 (1971), which provides:
A state has power to exercise judicial jurisdiction over an individual who causes effects in the state by an act done elsewhere with respect to any cause of action arising from these effects unless the nature of the effects and of the individual’s relationship to the state make the exercise of such jurisdiction unreasonable.
While this provision is not binding on this Court, it does not in any event support the decision below. As is apparent from the examples accompanying §37 in the Restatement, this section was intended to reach wrongful activity outside of the State causing injury within the State, see, e.g., Comment a, p.157 (shooting bullet from one State into another), or commercial activity affecting the state residents, ibid. Even in such situations, moreover, the Restatement recognizes that there might be circumstances that would render “unreasonable” the assertion of jurisdiction over the nonresident defendant.
The circumstances in this case clearly render “unreasonable” California’s assertion of personal jurisdiction. There is no claim that appellant has visited physical injury on either property or persons within the State of California. The cause of action herein asserted arises, not from the defendant’s commercial transactions in interstate commerce, but rather from his personal, domestic relations. It thus cannot be said that appellant has sought a commercial benefit from solicitation of business from a resident of California that could reasonably render him liable to suit in state court; appellant’s activities cannot fairly be analogized to an insurer’s sending an insurance contract and premium notices into the State to an insured resident of the State. Furthermore, the controversy between the parties arises from a separation that occurred in the State of New York; appellee Horn seeks modification of a contract that was negotiated in New York and that she flew to New York to sign. As in Hanson v. Denckla, the instant action involves an agreement that was entered into with virtually no connection with the forum State.
Finally, basic considerations of fairness point decisively in favor of appellant’s State of domicile as the proper forum for adjudication of this case, whatever the merits of appellee’s underlying claim. It is appellant who has remained in the State of the marital domicile, whereas it is appellee who has moved across the continent. Appellant has at all times resided in New York State, and, until the separation and appellee’s move to California, his entire family resided there as well. As noted above, appellant did no more than acquiesce in the stated preference of one of his children to live with her mother in California. This single act is surely not one that a reasonable parent would expect to result in the substantial financial burden and personal strain of litigating a child-support suit in a forum 3,000 miles away, and we therefore see no basis on which it can be said that appellant could reasonably have anticipated being “haled before a [California] court.” To make jurisdiction in a case such as this turn on whether appellant bought his daughter her ticket or instead unsuccessfully sought to prevent her departure would impose an unreasonable burden on family relations, and one wholly unjustified by the “quality and nature” of appellant’s activities in or relating to the State of California.
In seeking to justify the burden that would be imposed on appellant were the exercise of in personam jurisdiction in California sustained, appellee argues that California has substantial interests in protecting the welfare of its minor residents and in promoting to the fullest extent possible a healthy and supportive family environment in which the children of the State are to be raised. These interests are unquestionably important. But while the presence of the children and one parent in California arguably might favor application of California law in a lawsuit in New York, the fact that California might be the “center of gravity” for choice of law purposes does not mean that California has personal jurisdiction over the defendant. And California has not attempted to assert any particularized interest in trying such cases in its courts by, e.g., enacting a special jurisdictional statute.
California’s legitimate interest in ensuring the support of children resident in California without unduly disrupting the children’s lives, moreover, is already being served by the State’s participation in the Uniform Reciprocal Enforcement of Support Act of 1968. This statute provides a mechanism for communication between court systems in different States, in order to facilitate the procurement and enforcement of child-support decrees where the dependent children reside in a State that cannot obtain personal jurisdiction over the defendant. California’s version of the Act essentially permits a California resident claiming support from a nonresident to file a petition in California and have its merits adjudicated in the State of the alleged obligor’s residence, without either party having to leave his or her own State. Cal. Code Civ. Proc. §1650 et seq. New York State is a signatory to a similar act. Thus, not only may plaintiff-appellee here vindicate her claimed right to additional child support from her former husband in a New York court, but the uniform acts will facilitate both her prosecution of a claim for additional support and collection of any support payments found to be owed by appellant.
It cannot be disputed that California has substantial interests in protecting resident children and in facilitating child-support actions on behalf of those children. But these interests simply do not make California a “fair forum,” Shaffer v. Heitner, in which to require appellant, who derives no personal or commercial benefit from his child’s presence in California and who lacks any other relevant contact with the State, either to defend a child-support suit or to suffer liability by default.
Accordingly, we conclude that the appellant’s motion to quash service, on the ground of lack of personal jurisdiction, was erroneously denied by the California courts. The judgment of the California Supreme Court is, therefore, reversed.
Justice BRENNAN, with whom Justice WHITE and Justice POWELL join, dissenting.
The Court properly treats this case as presenting a single narrow question. That question is whether the California Supreme Court correctly “weighed” “the facts” … of this particular case in applying the settled “constitutional standard,” that before state courts may exercise in personam jurisdiction over a nonresident, nondomiciliary parent of minor children domiciled in the State, it must appear that the nonresident has “certain minimum contacts [with the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington. The Court recognizes that “this determination is one in which few answers will be written ‘in black and white.’”
… I cannot say that the Court’s determination against state court in personam jurisdiction is implausible, but, though the issue is close, my independent weighing of the facts leads me to conclude, in agreement with the analysis and determination of the California Supreme Court, that appellant’s connection with the State of California was not too attenuated, under the standards of reasonableness and fairness implicit in the Due Process Clause, to require him to conduct his defense in the California courts. I therefore dissent.
Questions and Comments
(1) Why was it so clear that the marriage of the parties in California did not provide an adequate basis for jurisdiction needed for modifying child support? What if the children had been conceived during a layover in California? What if they had been born during a brief stop there? Cf. Poston v. Poston, 624 A.2d 853 (Vt. 1993) (no in personam jurisdiction in state of original marital domicile and birth of first child).
(2) Would it have made a difference if Kulko had urged Horn to move to California because it was a better place for the children to spend the summer? Would it have made a difference if Kulko, rather than the children, had been the instigator of their permanent move to residence with their mother?
(3) The Court emphasizes that the divorce and separation agreement were centered in New York. If Kulko had moved from New York to Florida, would New York still be an appropriate place to sue him? If not, would California then become appropriate; that is, is California jurisdiction rejected because it is altogether inappropriate, or merely because, as the facts stand, New York is a much better place to litigate (which might not be so if Kulko moved)?
(4) In McGee v. International Life Insurance Co., 355 U.S. 220 (1957), California jurisdiction over an out-of-state insurance company was upheld, despite a lack of any evidence that the company had any contacts with California apart from its solicitation of the deceased and its subsequent collection of premiums he mailed from California. In Hanson v. Denckla, 357 U.S. 235 (1958), however, the Court rejected Florida jurisdiction over a Delaware trustee of a trust established by a decedent who had moved to Florida after the trust was established, despite continued contact between the decedent and the trustee. In the latter case the trustee had not “purposefully availed itself of the privilege of conducting activities within the forum State”; McGee was further distinguished as a case in which the state of California had manifested strong interests in insurance by its special legislation in the area. Isn’t California even more interested in the welfare of its resident children than in the insurance business? And in any event, if the standards are fair play and substantial justice and minimum contacts, what does the interest of the state have to do with either?
(5) Justice White joined in the brief dissenting opinion in Kulko, which declares that jurisdictional cases such as Kulko are close calls but that the dissenters would weigh the facts slightly differently than would the Kulko majority. Does his majority opinion in World-Wide Volkswagen give any satisfactory method for resolving the ambiguities? Is it possible in such cases to do anything but produce vague verbal formulas and apply them to specific factual situations in the hope that the lower courts will get a feeling for what the Supreme Court thinks goes too far? Do Kulko and World-Wide Volkswagen represent anything more than a signal to the lower courts that they had begun to drift too far toward asserting jurisdiction since International Shoe, McGee, and Hanson v. Denckla?
(6) Is the real point of Kulko that the relaxations in the law of jurisdiction that bloomed in the International Shoe opinion were a result of the expansion of commercial transactions to a national scale, while personal relations, though they may have changed somewhat since the days of Pennoyer, have not changed in a similar manner? After all, the increased cost of litigation in a distant place can be passed on to the customer in the business setting, while the same cannot be said about the cost of inconvenience in litigation of personal matters.
(7) What effect ought it have on the existence of personal jurisdiction that the substantive cause of action is of one sort rather than another? If Kulko is in part explained by the fact that it is a domestic relations dispute, then are there other types of substantive disputes as to which special jurisdictional standards apply? In both Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984), and Calder v. Jones, 465 U.S. 783 (1984), the Court stated in no uncertain terms that it did not matter, for purposes of personal jurisdiction, that the case was a multistate defamation action in which assertion of jurisdiction might “chill” First Amendment rights. It stated that the First Amendment had no bearing on personal jurisdiction.
Is this correct or desirable? What if a state enacted a longer long arm for cases brought against Republican defendants than for cases against Democratic defendants? What if it had a longer long arm for defamation actions than for personal injury actions? See generally Pielemeier, Constitutional Limits on Choice of Law: The Special Case of Multistate Defamation, 133 U. Pa. L. Rev. 381 (1985).
In Connolly v. Burt, 757 F.2d 242 (10th Cir. 1986), the court relied on Keeton and Calder in asserting jurisdiction over a Nebraska doctor who had written a letter of recommendation about a former student to a Colorado hospital at the hospital’s request. The defendant, Connolly, had written, “In reply to your inquiry about Dr. Burt, he did spend time here as an Orthopaedic Resident from 1974-1977. His performance was well below average and he has consequently not been recommended for Board eligibility. I think he might serve adequately in some field of medicine, but not that of Orthopaedic Surgery.” The Supreme Court agreed to review the case, 474 U.S. 1004 (1985), but after the defendant filed his brief on the merits the plaintiff dropped the case, and it was dismissed as moot. 475 U.S. 1063 (1986).
(8) Of potentially great importance to the issues of forseeability and purposefulness is the recent decision of Walden v. Fiore, 134 S. Ct. 1115 (2014). Returning from Puerto Rico to their home in Nevada, Gina Fiore and her partner were stopped while changing planes in Atlanta; federal agents found close to $100,000 in cash in the travelers’ carry-on bags. Fiore claimed that the cash was casino winnings and not drug-related, but it was seized nonetheless; the seizure was justified by an affidavit that (by Fiore’s later account) was deliberately falsified. Eight months later, as there was no evidence to charge Fiore with a crime, the cash was returned. Fiore filed suit in United States District Court for the District of Nevada. The District Court dismissed and the Ninth Circuit reversed, holding that the agent “expressly aimed” his submission of the affidavit at Nevada by submitting it with knowledge that it would affect persons with a “significant connection” to Nevada. The delay in returning the funds, moreover, caused Fiore and her partner foreseeable harm in Nevada.
In reversing the assertion of jurisdiction, Justice Thomas explained “[w]e have consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State.… Put simply, however significant the plaintiff’s contacts with the forum may be, those contacts cannot be ‘decisive in determining whether the defendant’s due process rights are violated.… The plaintiff cannot be the only link between the defendant and the forum.” 134 S. Ct. 115, 1122.
Asahi Metal Industry Co. v. Superior Court of California
480 U.S. 102 (1987)
Justice O’CONNOR announced the judgment of the Court and delivered the unanimous opinion of the Court with respect to Part I, the opinion of the Court with respect to Part II-B, in which THE CHIEF JUSTICE, Justice BRENNAN, Justice WHITE, Justice MARSHALL, Justice BLACKMUN, Justice POWELL, and Justice STEVENS join, and an opinion with respect to Parts II-A and III, in which THE CHIEF JUSTICE, Justice POWELL, and Justice SCALIA join.
On September 23, 1978, on Interstate Highway 80 in Solano County, California, Gary Zurcher lost control of his Honda motorcycle and collided with a tractor. Zurcher was severely injured, and his passenger and wife, Ruth Ann Moreno, was killed. In September 1979, Zurcher filed a product liability action in the Superior Court of the State of California in and for the County of Solano. Zurcher alleged that the 1978 accident was caused by a sudden loss of air and an explosion in the rear tire of the motorcycle, and alleged that the motorcycle tire, tube, and sealant were defective. Zurcher’s complaint named, inter alia, Cheng Shin Rubber Industrial Co., Ltd. (Cheng Shin), the Taiwanese manufacturer of the tube. Cheng Shin in turn filed a cross-complaint seeking indemnification from its codefendants and from petitioner, Asahi Metal Industry Co., Ltd. (Asahi), the manufacturer of the tube’s valve assembly. Zurcher’s claims against Cheng Shin and the other defendants were eventually settled and dismissed, leaving only Cheng Shin’s indemnity action against Asahi.
California’s long-arm statute authorizes the exercise of jurisdiction “on any basis not inconsistent with the Constitution of this state or of the United States.” Cal. Code Civ. Proc. Ann. §410.10 (West 1973). Asahi moved to quash Cheng Shin’s service of summons arguing the State could not exert jurisdiction over it consistent with the Due Process Clause of the Fourteenth Amendment.
In relation to the motion, the following information was submitted by Asahi and Cheng Shin. Asahi is a Japanese corporation. It manufactures tire valve assemblies in Japan and sells the assemblies to Cheng Shin, and to several other tire manufacturers, for use as components in finished tire tubes. Asahi’s sales to Cheng Shin took place in Taiwan. The shipments from Asahi to Cheng Shin were sent from Japan to Taiwan. Cheng Shin bought and incorporated into its tire tubes 150,000 Asahi valve assemblies in 1978; 500,000 in 1979; 500,000 in 1980; 100,000 in 1981; and 100,000 in 1982. Sales to Cheng Shin accounted for 1.24 percent of Asahi’s income in 1981 and 0.44 percent in 1982. Cheng Shin alleged that approximately 20 percent of its sales in the United States are in California. Cheng Shin purchases valve assemblies from other suppliers as well, and sells finished tubes throughout the world.
In 1983 an attorney for Cheng Shin conducted an informal examination of the valve stems of the tire tubes sold in one cyclery in Solano County. The attorney declared that of the approximately 115 tire tubes in the store, 97 were purportedly manufactured in Japan or Taiwan, and of those 97, 21 valve stems were marked with the circled letter “A,” apparently Asahi’s trademark. Of the 21 Asahi valve stems, 12 were incorporated into Cheng Shin tire tubes. The store contained 41 other Cheng Shin tubes that incorporated the valve assemblies of other manufacturers. An affidavit of a manager of Cheng Shin whose duties included the purchasing of component parts stated: “In discussions with Asahi regarding the purchase of valve stem assemblies the fact that my Company sells tubes throughout the world and specifically the United States has been discussed. I am informed and believe that Asahi was fully aware that valve stem assemblies sold to my Company and to others would end up throughout the United States and in California.” 39 Cal. 3d 35, 48 n.4, 702 P.2d 543, 549-550 n.4 (1985). An affidavit of the president of Asahi, on the other hand, declared that Asahi “has never contemplated that its limited sales of tire valves to Cheng Shin in Taiwan would subject it to lawsuits in California.”
Primarily on the basis of the above information, the Superior Court denied the motion to quash summons, stating that “Asahi obviously does business on an international scale. It is not unreasonable that they defend claims of defect in their product on an international scale.” The Court of Appeal of the State of California issued a peremptory writ of mandate commanding the Superior Court to quash service of summons. The court concluded that “it would be reasonable to require Asahi to respond in California solely on the basis of ultimately realized foreseeability that the product into which its component was embodied would be sold all over the world including California.”
The Supreme Court of the State of California reversed and discharged the writ issued by the Court of Appeal.
We granted certiorari and now reverse.
The Due Process Clause of the Fourteenth Amendment limits the power of a state court to exert personal jurisdiction over a nonresident defendant. “[T]he constitutional touchstone” of the determination whether an exercise of personal jurisdiction comports with due process “remains whether the defendant purposefully established ‘minimum contacts’ in the forum State.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
Applying the principle that minimum contacts must be based on an act of the defendant, the Court in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), rejected the assertion that a consumer’s unilateral act of bringing the defendant’s product into the forum State was a sufficient constitutional basis for personal jurisdiction over the defendant. It had been argued in World-Wide Volkswagen that because an automobile retailer and its wholesale distributor sold a product mobile by design and purpose, they could foresee being haled into court in the distant States into which their customers might drive. The Court rejected this concept of foreseeability as an insufficient basis for jurisdiction under the Due Process Clause. Id., at 295-296. The Court disclaimed, however, the idea that “foreseeability is wholly irrelevant” to personal jurisdiction, concluding that “[t]he forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.” Id., 297-298 (citation omitted).
In World-Wide Volkswagen itself, the state court sought to base jurisdiction not on any act of the defendant, but on the foreseeable unilateral actions of the consumer. Since World-Wide Volkswagen, lower courts have been confronted with cases in which the defendant acted by placing a product in the stream of commerce, and the stream eventually swept defendant’s product into the forum State, but the defendant did nothing else to purposefully avail itself of the market in the forum state. Some courts have understood the Due Process Clause, as interpreted in World-Wide Volkswagen, to allow an exercise of personal jurisdiction to be based on no more than the defendant’s act of placing the product in the stream of commerce. Other courts have understood the Due Process Clause and the above-quoted language in World-Wide Volkswagen to require the action of the defendant to be more purposefully directed at the forum State than the mere act of placing a product in the stream of commerce.
The reasoning of the Supreme Court of California in the present case illustrates the former interpretation of World-Wide Volkswagen. The Supreme Court of California held that, because the stream of commerce eventually brought some valves Asahi sold Cheng Shin into California, Asahi’s awareness that its valves would be sold in California was sufficient to permit California to exercise jurisdiction over Asahi consistent with the requirements of the Due Process Clause.
Other courts, however, have understood the Due Process Clause to require something more than that the defendant was aware of its product’s entry into the forum State through the stream of commerce in order for the state to exert jurisdiction over the defendant. In the present case, for example, the State Court of Appeals did not read the Due Process Clause, as interpreted by World-Wide Volkswagen, to allow “mere foreseeability that the product will enter the forum state [to] be enough by itself to establish jurisdiction over the distributor and retailer.” In Humble v. Toyota Motor Co., Ltd., 727 F.2d 709 (CA8 1984), an injured car passenger brought suit against Arakawa Auto Body Company, a Japanese corporation that manufactured car seats for Toyota. Arakawa did no business in the United States; it had no office, affiliate, subsidiary, or agent in the United States; it manufactured its component parts outside the United States and delivered them to Toyota Motor Company in Japan. The Court of Appeals, adopting the reasoning of the District Court in that case, noted that although it “does not doubt that Arakawa could have foreseen that its product would find its way into the United States,” it would be “manifestly unjust” to require Arakawa to defend itself in the United States. Id., at 710-711, quoting 578 F. Supp. 530, 533 (N.D. Iowa 1982).
We now find this latter position to be consonant with the requirements of due process. The “substantial connection,” Burger King, 471 U.S., at 475; McGee, 355 U.S., at 223, between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State. Burger King, supra, 471 U.S., at 476; Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984). The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State. Additional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State. But a defendant’s awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State.
Assuming, arguendo, that respondents have established Asahi’s awareness that some of the valves sold to Cheng Shin would be incorporated into tire tubes sold in California, respondents have not demonstrated any action by Asahi to purposefully avail itself of the California market. Asahi does not do business in California. It has no office, agents, employees, or property in California. It does not advertise or otherwise solicit business in California. It did not create, control, or employ the distribution system that brought its valves to California. There is no evidence that Asahi designed its product in anticipation of sales in California. On the basis of these facts, the exertion of personal jurisdiction over Asahi by the Superior Court of California* exceeds the limits of Due Process.
The strictures of the Due Process Clause forbid a state court from exercising personal jurisdiction over Asahi under circumstances that would offend “traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S., at 316, quoting Milliken v. Meyer, 311 U.S., at 463.
We have previously explained that the determination of the reasonableness of the exercise of jurisdiction in each case will depend on an evaluation of several factors. A court must consider the burden on the defendant, the interests of the forum state, and the plaintiff’s interest in obtaining relief. It must also weigh in its determination “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies.” World-Wide Volkswagen, 444 U.S., at 292 (citations omitted).
A consideration of these factors in the present case clearly reveals the unreasonableness of the assertion of jurisdiction over Asahi, even apart from the question of the placement of goods in the stream of commerce.
Certainly the burden on the defendant in this case is severe. Asahi has been commanded by the Supreme Court of California not only to traverse the distance between Asahi’s headquarters in Japan and the Superior Court of California in and for the County of Solano, but also to submit its dispute with Cheng Shin to a foreign nation’s judicial system. The unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders.
When minimum contacts have been established, often the interests of the plaintiff and the forum in the exercise of jurisdiction will justify even the serious burdens placed on the alien defendant. In the present case, however, the interests of the plaintiff and the forum in California’s assertion of jurisdiction over Asahi are slight. All that remains is a claim for indemnification asserted by Cheng Shin, a Taiwanese corporation, against Asahi. The transaction on which the indemnification claim is based took place in Taiwan; Asahi’s components were shipped from Japan to Taiwan. Cheng Shin has not demonstrated that it is more convenient for it to litigate its indemnification claim against Asahi in California rather than in Taiwan or Japan.
Because the plaintiff is not a California resident, California’s legitimate interests in the dispute have considerably diminished. The Supreme Court of California argued that the State had an interest in “protecting its consumers by ensuring that foreign manufacturers comply with the state’s safety standards.” 39 Cal. 3d, at 49. The State Supreme Court’s definition of California’s interest, however, was overly broad. The dispute between Cheng Shin and Asahi is primarily about indemnification rather than safety standards. Moreover, it is not at all clear at this point that California law should govern the question whether a Japanese corporation should indemnify a Taiwanese corporation on the basis of a sale made in Taiwan and a shipment of goods from Japan to Taiwan. Phillips Petroleum v. Shutts, 472 U.S. 797, 821-822 (1985); Allstate Insurance Co. v. Hague, 449 U.S. 302, 312-313 (1981). The possibility of being haled into a California court as a result of an accident involving Asahi’s components undoubtedly creates an additional deterrent to the manufacture of unsafe components; however, similar pressures will be placed on Asahi by the purchasers of its components as long as those who use Asahi components in their final products, and sell those products in California, are subject to the application of California tort law.
World-Wide Volkswagen also admonished courts to take into consideration the interests of the “several States,” in addition to the forum state, in the efficient judicial resolution of the dispute and the advancement of substantive policies. In the present case, this advice calls for a court to consider the procedural and substantive policies of other nations whose interests are affected by the assertion of jurisdiction by the California court. The procedural and substantive interests of other nations in a state court’s assertion of jurisdiction over an alien defendant will differ from case to case. In every case, however, those interests, as well as the Federal interest in its foreign relations policies, will be best served by a careful inquiry into the reasonableness of the assertion of jurisdiction in the particular case, and an unwillingness to find the serious burdens on an alien defendant outweighed by minimal interests on the part of the plaintiff or the forum State. “Great care and reserve should be exercised when extending our notions of personal jurisdiction into the international field.” United States v. First National City Bank, 379 U.S. 378, 404 (1965) (Harlan, J., dissenting). See Born, Reflections on Judicial Jurisdiction in International Cases, in 17 Ga. J. Intl. & Comp. L. 1 (1987).
Considering the international context, the heavy burden on the alien defendant, and the slight interests of the plaintiff and the forum State, the exercise of personal jurisdiction by a California court over Asahi in this instance would be unreasonable and unfair.
Because the facts of this case do not establish minimum contacts such that the exercise of personal jurisdiction is consistent with fair play and substantial justice, the judgment of Supreme Court of California is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
Justice BRENNAN, with whom Justice WHITE, Justice MARSHALL, and Justice BLACKMUN join, concurring in part and in the judgment.
I do not agree with the plurality’s interpretation of the stream-of-commerce theory, nor with its conclusion that Asahi did not “purposely avail itself of the California market.” I do agree, however, with the Court’s conclusion in Part II-B that the exercise of personal jurisdiction over Asahi in this case would not comport with “fair play and substantial justice,” International Shoe Co. v. Washington, 326 U.S. 310, 320 (1945). This is one of those rare cases in which “minimum requirements inherent in the concept of ‘fair play and substantial justice’ … defeat the reasonableness of jurisdiction even [though] the defendant has purposefully engaged in forum activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477-478 (1985). I therefore join Parts I and II-B of the Court’s opinion, and write separately to explain my disagreement with Part II-A.
… The stream of commerce refers not to unpredictable currents or eddies, but to the regular and anticipated flow of products from manufacture to distribution to retail sale. As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is no corresponding benefit. A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State’s laws that regulate and facilitate commercial activity. These benefits accrue regardless of whether that participant directly conducts business in the forum State, or engages in additional conduct directed toward that State. Accordingly, most courts and commentators have found that jurisdiction premised on the placement of a product into the stream of commerce is consistent with the Due Process Clause, and have not required a showing of additional conduct.
The plurality’s endorsement of what appears to be the minority view among Federal Courts of Appeals represents a marked retreat from its analysis in World-Wide Volkswagen v. Woodson, 444 U.S. 286 (1980) …
The Court in World-Wide Volkswagen … took great care to distinguish “between a case involving goods which reach a distant State through a chain of distribution and a case involving goods which reach the same State because a consumer … took them there.” 444 U.S., at 306-307 (Brennan, J., dissenting). The California Supreme Court took note of this distinction, and correctly concluded that our holding in World-Wide Volkswagen preserved the stream-of-commerce theory.
In this case, the facts found by the California Supreme Court support its finding of minimum contacts. The Court found that “[a]lthough Asahi did not design or control the system of distribution that carried its valve assemblies into California, Asahi was aware of the distribution system’s operation, and it knew that it would benefit economically from the sale in California of products incorporating its components.” Accordingly, I cannot join the plurality’s determination that Asahi’s regular and extensive sales of component parts to a manufacturer it knew was making regular sales of the final product in California is insufficient to establish minimum contacts with California.
Justice STEVENS, with whom Justice WHITE and Justice BLACKMUN join, concurring in part and concurring in the judgment.
The judgment of the Supreme Court of California should be reversed for the reasons stated in Part II-B of the Court’s opinion. While I join Parts I and II-B, I do not join Part II-A for two reasons. First, it is not necessary to the Court’s decision. An examination of minimum contacts is not always necessary to determine whether a state court’s assertion of personal jurisdiction is constitutional. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-478 (1985). Part II-B establishes, after considering the factors set forth in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980), that California’s exercise of jurisdiction over Asahi in this case would be “unreasonable and unfair.” This finding alone requires reversal; this case fits within the rule that “minimum requirements inherent in the concept of ‘fair play and substantial justice’ may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities.” Burger King, 471 U.S., at 477-478 (quoting International Shoe Co. v. Washington, 326 U.S., 310, 320 (1945)). Accordingly, I see no reason in this case for the Court to articulate “purposeful direction” or any other test as the nexus between an act of a defendant and the forum State that is necessary to establish minimum contacts.
Second, even assuming that the test ought to be formulated here, Part II-A misapplies it to the facts of this case. The Court seems to assume that an unwavering line can be drawn between “mere awareness” that a component will find its way into the forum State and “purposeful availment” of the forum’s market. Over the course of its dealings with Cheng Shin, Asahi has arguably engaged in a higher quantum of conduct than “[t]he placement of a product into the stream of commerce, without more.… ” Whether or not this conduct rises to the level of purposeful availment requires a constitutional determination that is affected by the volume, the value, and the hazardous character of the components. In most circumstances I would be inclined to conclude that a regular course of dealing that results in deliveries of over 100,000 units annually over a period of several years would constitute “purposeful availment” even though the item delivered to the forum State was a standard product marketed throughout the world.
Questions and Comments
(1) Would the Zurchers have been able to sue Asahi directly if they had chosen to name it as defendant in the litigation? If so, presumably Cheng Shin’s claim against Asahi would also be subject to jurisdiction in a California court. Would Cheng Shin be allowed to bring Asahi into the litigation if the Zurchers did not name Asahi as defendant but their suit against Cheng Shin had not settled so that California retained some interest in the litigation?
(2) Is Cheng Shin in the same position as the Robinsons were in World-Wide Volkswagen, in the sense that the defective product was only in the forum because Cheng Shin sent it there?
(3) What is the relationship between parts IIA and IIB of the opinion? If, as Part IIA seems to indicate, jurisdiction violates due process because no action of the defendant was purposefully directed toward the forum state, then of what relevance is the discussion in IIB of the defendant’s burden and the state’s and plaintiff’s interests? Conversely, with a majority joining IIB, why did a group of justices find it necessary to address the stream-of-commerce argument in IIA?
(4) Note the majority’s suggestion in IIB that the federal interest in foreign relations ought to be considered in the due process calculus. It has been argued that choice of law and jurisdiction in international cases perhaps ought to reflect such federal concerns because of the exclusive federal power over international affairs. Brilmayer, Extraterritorial Application of American Law: A Methodological and Constitutional Appraisal, 50 Law & Contemp. Probs. 11 (1987).
(5) In Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1984), the Court upheld Florida’s assertion of jurisdiction over Michigan franchises. Defendants had applied for a franchise to Burger King’s Michigan district office, and their application was forwarded to the Miami headquarters. One of the defendants, MacShara, attended a training course in Miami, and both defendants communicated directly with the Miami office over the contract provisions, especially after they encountered financial problems. The Court stated that jurisdiction is appropriate where a defendant “purposefully directs” his activities toward forum residents and where “the contacts proximately result from actions by the defendant himself that create a ‘substantial connection’ with the forum state.” (Emphasis in original.)
Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with “fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S., at 320. Thus courts in “appropriate case[s]” may evaluate “the burden on the defendant,” “the forum State’s interest in adjudicating the dispute,” “the plaintiff’s interest in obtaining convenient and effective relief,” “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,” and the “shared interest of the several States in furthering fundamental substantive social policies.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 292. These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required. See, e.g., Keeton v. Hustler Magazine, Inc., supra, at 780; Calder v. Jones, supra, at 788-789; McGee v. International Life Insurance Co., supra, at 223-224. On the other hand, where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable. Most such considerations usually may be accommodated through means short of finding jurisdiction unconstitutional. For example, the potential clash of the forum’s law with the “fundamental substantive social policies” of another State may be accommodated through application of the forum’s choice-of-law rules. Similarly, a defendant claiming substantial inconvenience may seek a change of venue. Nevertheless, minimum requirements inherent in the concept of “fair play and substantial justice” may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities. World-Wide Volkswagen Corp. v. Woodson, supra, at 292; see also Restatement (Second) of Conflict of Laws §§36-37 (1971). As we previously have noted, jurisdictional rules may not be employed in such a way as to make litigation “so gravely difficult and inconvenient” that a party unfairly is at a “severe disadvantage” in comparison to his opponent. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 18 (1972) (re forum-selection provisions); McGee v. International Life Insurance Co., supra, at 223-224.
471 U.S. at 476-478.
The Court then cited a number of factors in support of its affirmance of jurisdiction such as the defendant’s refusal to make contractually required payments in Miami, the fact that the defendant deliberately affiliated himself with a Florida company, and the presence of a contract clause choosing Florida law. The Court rejected the argument that Burger King was such a large corporation that it could conveniently litigate anywhere in the country and that Burger King was guilty of misrepresentation, fraud, or duress. Justices Stevens and White dissented on the grounds that the defendant was a purely local Michigan operation, and that franchise relationships characteristically display a disparity of bargaining power.
(6) Asahi, Burger King, and the requirement of purposeful availment have provoked extensive critical academic scrutiny. See, e.g., Sheehan, Predicting the Future: Personal Jurisdiction for the Twenty-First Century, 66 U. Cin. L. Rev. 385 (1998); Stewart, A New Litany of Personal Jurisdiction, 60 U. Colo. L. Rev. 5 (1989); Symposium, Asahi Metal Industry Co. v. Superior Court and the Future of Personal Jurisdiction, 39 S.C. L. Rev. 815 (1988); Dessem, Personal Jurisdiction After Asahi: The Other (International) Shoe Drops, 55 Tenn. L. Rev. 41 (1987); Weintraub, Asahi Sends Personal Jurisdiction Down the Tubes, 23 Texas Intl. L.J. 55 (1988); Cox, The Interrelationship of Personal Jurisdiction and Choice of Law: Forging New Theory Through Asahi Metal Industry Co. v. Superior Court, 49 U. Pitt. L. Rev. 189 (1987).
(7) “Stream of commerce” cases are common, especially in the products liability area. In addition to World-Wide Volkswagen and Asahi, see Grange Insurance Associates v. State, 110 Wash. 2d 752, 757 P.2d 933 (1988), in which it was held that there was no jurisdiction over Idaho for negligence in certifying as free of brucellosis livestock destined for immediate sale to a Washington buyer. The veterinarian’s certificate specified a Washington destination for the cattle; should such conduct satisfy the Asahi test? See also Clune v. Alimak AB, 233 F.3d 538 (8th Cir. 2000); Alpine View Co. v. Atlas Copco AB, 205 F.3d 208 (5th Cir. 2000); Pennzoil Prods. Co. v. Colelli & Assocs., 149 F.3d 197 (3d Cir. 1998); Viam Corp. v. Iowa Export-Import Trading Co., 84 F.3d 424 (Fed. Cir. 1996); In re Celotex Corp. v. Rapid American Corp., 124 F.3d 619 (4th Cir. 1997); CMMC v. Salinas, 929 S.W.2d 435 (Tex. 1996).
(8) The Supreme Court recently addressed the relevance of a defendant’s business structure to personal jurisdiction in the cases J. McIntyre Machinery Ltd. v. Nicastro, 131 S. Ct. 2780 (2011), reversing Nicastro v. McIntyre Machinery America, Ltd., 987 A.2d 575 (N.J. 2010), and Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011), reversing Brown v. Meter, 681 S.E.2d 383 (N.C. Ct. App. 2009).
In Nicastro, the New Jersey state courts asserted personal jurisdiction over a British manufacturer of a recycling machine that injured a scrap metal worker in New Jersey. The manufacturer commissioned another company, independent of it but carrying the same McIntyre name, to act as its exclusive U.S. distributor. The distributor sold the machine to the plaintiff’s employer in New Jersey. According to the New Jersey Supreme Court, it was not necessary for the defendant to purposely avail itself of a New Jersey market or even to be aware that its product was sold in New Jersey (a fact that it denied). Instead, it was sufficient that defendant commissioned a distributor to market the product throughout the United States. Defendant either “knew or reasonably should have known that its distribution scheme would make its products available to New Jersey consumers,” and, according to the New Jersey court, this availability creates a strong presumption in favor of the exercise of personal jurisdiction over defendant in the case. 987 A.2d at 593. The Supreme Court reversed, observing that McIntyre did not “engage in any activities in New Jersey that reveal an intent to invoke or benefit from the protection of its laws.” 131 S. Ct. at 2789.
In Brown, defendant Goodyear Tire. Co. subsidiaries manufactured tires that were sold in North Carolina. As in Nicastro, the manufacturers did not themselves handle tire distribution in the United States. Instead, they “used their Goodyear parent and affiliated companies to distribute the tires they manufactured to the United States and North Carolina.” 681 S.E.2d at 386. According to the North Carolina court, personal jurisdiction could be based on defendants’ purposefully injecting their product into the stream of commerce without attempting to affirmatively exclude North Carolina as a potential product market. Id. at 391. In Brown, however, the tire that purported to cause plaintiffs’ injuries never entered the state of North Carolina. Instead, the product was manufactured in Turkey and sold in France, where the fatal injury occurred (plaintiffs were North Carolina residents). The North Carolina courts used the fact that some tires manufactured by defendant made their way into North Carolina in order to exercise general jurisdiction over the Turkish defendant. Justice Ginsburg, a dissenter in Nicastro, delivered a unanimous decision of the Supreme Court reversing the North Carolina court’s decision, ruling that Goodyear’s “attenuated connections to [North Carolina] fall far short of the ‘continuous and systematic general business contacts’.” 131 S. Ct. at 2857.
In both Brown and Nicastro, the relationship between entities in the stream of commerce turned out to be central for purposes of imputing both the activities and the mens rea of one of the entities onto the defendant. In Brown, the manufacturer was using both its parent company and affiliated companies to market its products worldwide. Yet, those activities were not imputed to the manufacturer for purposes of satisfying general jurisdiction. Similarly, in Nicastro, a nominally independent firm’s marketing efforts were not imputed to the defendant, which claimed to lack knowledge that the product was sold in New Jersey. Should it have been at all relevant that the independent marketer shared the manufacturer’s name? The implications of the corporate form in the determination of general jurisdiction are further discussed in Daimer AG v. Bauman, 134 S. Ct. 746 (2014), infra.
(9) In footnote * of Asahi, the Court states that it has “no occasion to determine whether Congress could, consistent with the Due Process Clause of the Fifth Amendment, authorize federal court personal jurisdiction over alien defendants based on the aggregate of national contacts, rather than on the contacts between the defendant and the State in which the federal court sits.” See also Omni Capital Intl. v. Rudolf Wolff & Co., 484 U.S. 97, 103 n.5 (1987) (same). Many courts have held that a national contacts test satisfies the Fifth Amendment due process clause. See, e.g., Go-Video, Inc. v. Akai Elec. Co., 885 F. 2d 1406 (9th Cir. 1989). Other courts have tempered this conclusion by insisting that due process requires not only minimum contacts with the nation, but also that the venue for the suit be fair and reasonable. See, e.g., Peay v. Bellsouth Medical Assistance Plan, 205 F.3d 1206, 1212 (10th Cir. 2000).
A 1993 Amendment to Federal Rule of Civil Procedure 4 provides a federal long-arm statute authorization in cases arising under federal laws which themselves lack a long-arm statute. It provides: “If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state.” Fed. R. Civ. P. 4(k)(2). Under Rule 4(k)(2), federal courts may exercise jurisdiction over a defendant (a) against whom a federal claim is asserted, (b) who has nationwide contacts; and (c) who is not subject to personal jurisdiction in any state. U.S.A. v. Swiss American Bank, 191 F.3d 30, 38 (7th Cir. 1999).
In addition to the question of the constitutionality of using nationwide contacts for personal jurisdiction in federal question cases, Rule 4(k)(2) raises two additional difficulties. The first is whether it exceeds the Rules Enabling Act’s prohibition on Rules that “abridge, enlarge, or modify any substantive rights.” 28 U.S.C. §2072(b). The Advisory Committee on the Civil Rules worried that it might. See H.R. Doc. No. 103-74, at 154-155 (1993). The second problem concerns the conundrum of establishing Rule 4(k)(2)’s requirement that the defendant lacks adequate contacts for personal jurisdiction in any particular state. The general rule is that the burden of proof lies with the party attempting to assert jurisdiction. But it is very hard for a plaintiff to demonstrate that the defendant lacks adequate contacts in each of the 50 states, especially since the defendant controls much of the relevant information. See Swiss American Bank, 191 F.3d at 40. On the other hand, shifting the burden to the defendant requires the defendant to either concede amenability to suit in either federal court (by admitting that no state court has jurisdiction) or in a state court (arguing that it has sufficient contacts with some state). Id. at 40-41. Courts have resolved this problem in different ways. Most courts follow the traditional rule and require the plaintiff to prove no jurisdiction in any of the 50 states. See, e.g., CFMT Inc. v. Steag Microtech, Inc., 1997 WL 313161 (D. Del. 1997). The Seventh Circuit, by contrast, assigns the burden to the defendant; on this view, a defendant who wishes to defeat personal jurisdiction under Rule 4(k)(2) must name some state court in which the suit could proceed. See ISI Intl., Inc. v. Borden Ladner Gervais LLP, 2001 U.S. App. LEXIS 15026 (7th Cir. 2001). The First Circuit, by contrast, shifts the burden to the defendant only after the plaintiff has made a prima facie for the applicability of Rule 4(k)(2). See Swiss American Bank, 191 F.3d at 26. For commentary on these and other aspects of Rule 4(k)(2), see Burbank, The United States’ Approach to International Civil Litigation: Recent Developments in Forum Selection, 19 U. Pa. J. Intl. Econ. L. 1, 13 (1998).
Note on Activities-Based Personal Jurisdiction for Internet Disputes
How do personal jurisdiction concepts apply to the Internet, and in particular to a communication or activity on the World Wide Web that potentially appears in every state in the nation (not to mention every nation in the world)? Most courts agree that purely “passive” Web sites—Web sites that merely post information accessible to users in other jurisdictions—cannot be subject to personal jurisdiction in the places where they can be viewed. See, e.g., Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997); McGill Technology, Ltd. v. Gourmet Technologies, Inc., 300 F. Supp. 2d 501, 507 (E.D. Mich. 2004). But does it make sense to decline jurisdiction when a passive Web site viewed in other states causes harm there? Consider Bailey v. Turbine Design, Inc., 86 F. Supp. 2d 790 (W.D. Tenn. 2000), in which a Florida corporation allegedly defamed Bailey, the owner of its Tennessee competitor, when it posted unflattering information about Bailey (arrest records, a mug shot, and damning information about his company) on its Web site located in Florida. Bailey argued that personal jurisdiction in Tennessee was proper because the publication was intended to cause injury in Tennessee. The Court dismissed the case for lack of personal jurisdiction simply because the Web site was “passive.” Isn’t the “passive” label here a poor substitute for analysis? Aren’t the defendant’s contacts in an important sense directed toward Tennessee? Should the defendant receive immunity from jurisdiction in Tennessee simply because the publication could be viewed anywhere?
While courts require something more than mere information on a Web page to establish that a defendant “purposefully directed” its activities to another forum, there is substantial uncertainty about what more is needed. The easiest cases involve online dealings between a Web page operator in one state and residents of another jurisdiction, especially commercial dealings such as online contracts. See, e.g., CompuServe, Inc. v. Patterson, 89 F. 3d 1257 (6th Cir. 1996) (personal jurisdiction in Ohio proper when Texas defendant knowingly contracts with Ohio party, transfers files to that party in Ohio, and collects revenue from related sale of software in Ohio); Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1125-1126 (W.D. Pa. 1997) (jurisdiction appropriate in Pennsylvania because defendant contracted with thousands of individuals and numerous Internet access providers in Pennsylvania). Are these cases really different from the passive Web site cases? Would it make a difference if, as is quite possible, the defendants did not know where the plaintiffs they were doing business with were located? Can one purposefully avail oneself of a forum without knowing the identity of the forum? Must the out-of-state Web page operator take steps to learn the geographical location of Web page users?
Some of the hardest Internet personal jurisdiction cases concern “interactive” Web sites that allow a user to exchange information with the host computer. As a general matter, courts find personal jurisdiction when such Web sites convey “something more” than passive information in a way that is aimed at the forum, but there is uncertainty about what that something more should be. The cases do give some rough guidance, however. Compare, for example, Illinois v. Hemi Group LLC, 622 F.3d 754 (7th Cir. 2010) (asserting personal jurisdiction in Illinois over New Mexico cigarette vendor that had an interactive Web site through which customers could purchase cigarettes, calculate their shipping charges using their ZIP codes, and create accounts, and on which the defendant stated that it would ship to any state in the country except New York), with Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446 (3d Cir. 2003) (declining personal jurisdiction in New Jersey over a Spanish toy company that operated an interactive online toy store that listed prices in pesetas and accepted orders only from Spanish shipping addresses, reasoning that it was not directing its activities to the United States).
Courts also sometimes use the “effects test” applied in Calder v. Jones, 465 U.S. 783 (1984), to find personal jurisdiction in intentional torts cases. Calder establishes jurisdiction if the defendant engages in “(1) intentional action (2) expressly aimed at the forum state (3) causing harm, the brunt of which is suffered, and the defendant knows is likely to be suffered, in the forum state.” Panavision Intl. L.P. v. Toeppen, 141 F. 3d 1316, 1321 (9th Cir. 1998). Not surprisingly, courts have been inconsistent in determining when Internet contacts are expressly aimed at a forum state, “where” the harm is suffered, and whether the defendant likely knew it would be suffered there.
Finally, courts sometimes use Internet contacts as a basis for asserting general jurisdiction. In Gorman v. Ameritrade Holding Corp., 293 F.3d 506 (D.C. Cir. 2002), for example, plaintiff sued Ameritrade, an online brokerage with its principal place of business in Omaha, Nebraska, in federal court in Washington, D.C., for breach of contract. There was no connection between the contract dispute and the District of Columbia, and thus no specific jurisdiction, but Ameritrade’s Web site allowed residents of the District to open accounts, transfer money, and enter binding contracts over the Internet. The court held that online business can be sufficiently “continuous and systematic” to support general jurisdiction, and that “by permitting [real-time] transactions to take place 24 hours a day, the site makes it possible for Ameritrade to have contacts with the District of Columbia that are ‘continuous and systematic’ to a degree that traditional foreign corporations can never even approach.” See also Gator.com Corp. v. L.L. Bean, Inc., 341 F.3d 1072, 1080 (9th Cir. 2003) (Maine firm L.L. Bean’s virtual store gave the California courts general jurisdiction just as a brick-and-mortar store would, but only because it advertised extensively and performed millions of dollars of sales in California).
Goodyear Dunlop Tires Operations, S.A. v. Brown
131 S. Ct. 2846 (2011)
[Two North Carolina residents were killed in a bus accident in France. Their estates brought suit in North Carolina state court against various foreign subsidiaries of Goodyear Dunlop Tires, which unsuccessfully moved to dismiss for lack of personal jurisdiction. On appeal, the Supreme Court unanimously held that North Carolina could not exercise general jurisdiction over the subsidiaries.]
Justice GINSBURG delivered the opinion of the Court.
This case concerns the jurisdiction of state courts over corporations organized and operating abroad. We address, in particular, this question: Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State?
A bus accident outside Paris that took the lives of two 13-year-old boys from North Carolina gave rise to the litigation we here consider. Attributing the accident to a defective tire manufactured in Turkey at the plant of a foreign subsidiary of The Goodyear Tire and Rubber Company (Goodyear USA), the boys’ parents commenced an action for damages in a North Carolina state court; they named as defendants Goodyear USA, an Ohio corporation, and three of its subsidiaries, organized and operating, respectively, in Turkey, France, and Luxembourg. Goodyear USA, which had plants in North Carolina and regularly engaged in commercial activity there, did not contest the North Carolina court’s jurisdiction over it; Goodyear USA’s foreign subsidiaries, however, maintained that North Carolina lacked adjudicatory authority over them.
A state court’s assertion of jurisdiction exposes defendants to the State’s coercive power, and is therefore subject to review for compatibility with the Fourteenth Amendment’s Due Process Clause. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (assertion of jurisdiction over out-of-state corporation must comply with “‘traditional notions of fair play and substantial justice’” (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940))). Opinions in the wake of the pathmarking International Shoe decision have differentiated between general or all-purpose jurisdiction, and specific or case-linked jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, nn. 8, 9 (1984).
A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so “continuous and systematic” as to render them essentially at home in the forum State. See International Shoe, 326 U.S., at 317. Specific jurisdiction, on the other hand, depends on an “affiliatio[n] between the forum and the underlying controversy,” principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation. von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1136 (1966) (hereinafter von Mehren & Trautman); see Brilmayer et al., A General Look at General Jurisdiction, 66 Texas L. Rev. 721, 782 (1988) (hereinafter Brilmayer). In contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication of “issues deriving from, or connected with, the very controversy that establishes jurisdiction.” von Mehren & Trautman 1136.
Because the episode-in-suit, the bus accident, occurred in France, and the tire alleged to have caused the accident was manufactured and sold abroad, North Carolina courts lacked specific jurisdiction to adjudicate the controversy. The North Carolina Court of Appeals so acknowledged. Brown v. Meter, 199 N.C. App. 50, 57-58 (2009). Were the foreign subsidiaries nonetheless amenable to general jurisdiction in North Carolina courts? Confusing or blending general and specific jurisdictional inquiries, the North Carolina courts answered yes. Some of the tires made abroad by Goodyear’s foreign subsidiaries, the North Carolina Court of Appeals stressed, had reached North Carolina through “the stream of commerce”; that connection, the Court of Appeals believed, gave North Carolina courts the handle needed for the exercise of general jurisdiction over the foreign corporations. Id., at 67-68.
A connection so limited between the forum and the foreign corporation, we hold, is an inadequate basis for the exercise of general jurisdiction. Such a connection does not establish the “continuous and systematic” affiliation necessary to empower North Carolina courts to entertain claims unrelated to the foreign corporation’s contacts with the State.
The Due Process Clause of the Fourteenth Amendment sets the outer boundaries of a state tribunal’s authority to proceed against a defendant. Shaffer v. Heitner, 433 U.S. 186, 207 (1977). The canonical opinion in this area remains International Shoe, 326 U.S. 310, in which we held that a State may authorize its courts to exercise personal jurisdiction over an out-of-state defendant if the defendant has “certain minimum contacts with [the State] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Id., at 316 (quoting Meyer, 311 U.S., at 463).
Endeavoring to give specific content to the “fair play and substantial justice” concept, the Court in International Shoe classified cases involving out-of-state corporate defendants. First, as in International Shoe itself, jurisdiction unquestionably could be asserted where the corporation’s in-state activity is “continuous and systematic” and that activity gave rise to the episode-in-suit. 326 U.S., at 317. Further, the Court observed, the commission of certain “single or occasional acts” in a State may be sufficient to render a corporation answerable in that State with respect to those acts, though not with respect to matters unrelated to the forum connections. Id., at 318. The heading courts today use to encompass these two International Shoe categories is “specific jurisdiction.” See von Mehren & Trautman 1144-1163. Adjudicatory authority is “specific” when the suit “aris[es] out of or relate[s] to the defendant’s contacts with the forum.” Helicopteros, 466 U.S., at 414, n. 8.
International Shoe distinguished from cases that fit within the “specific jurisdiction” categories, “instances in which the continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” 326 U.S., at 318. Adjudicatory authority so grounded is today called “general jurisdiction.” Helicopteros, 466 U.S., at 414, n. 9. For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home. See Brilmayer 728 (identifying domicile, place of incorporation, and principal place of business as “paradig[m]” bases for the exercise of general jurisdiction).
[The Court outlined the history of its rulings regarding specific jurisdiction.]
In only two decisions postdating International Shoe, discussed infra, at 2855-2857, has this Court considered whether an out-of-state corporate defendant’s in-state contacts were sufficiently “continuous and systematic” to justify the exercise of general jurisdiction over claims unrelated to those contacts: Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952) (general jurisdiction appropriately exercised over Philippine corporation sued in Ohio, where the company’s affairs were overseen during World War II); and Helicopteros, 466 U.S. 408 (helicopter owned by Colombian corporation crashed in Peru; survivors of U.S. citizens who died in the crash, the Court held, could not maintain wrongful-death actions against the Colombian corporation in Texas, for the corporation’s helicopter purchases and purchase-linked activity in Texas were insufficient to subject it to Texas court’s general jurisdiction).
To justify the exercise of general jurisdiction over petitioners, the North Carolina courts relied on the petitioners’ placement of their tires in the “stream of commerce.” See supra, at 2852. The stream-of-commerce metaphor has been invoked frequently in lower court decisions permitting “jurisdiction in products liability cases in which the product has traveled through an extensive chain of distribution before reaching the ultimate consumer.” 18 W. Fletcher, Cyclopedia of the Law of Corporations §8640.40, p. 133 (rev. ed. 2007). Typically, in such cases, a nonresident defendant, acting outside the forum, places in the stream of commerce a product that ultimately causes harm inside the forum. See generally Dayton, Personal Jurisdiction and the Stream of Commerce, 7 Rev. Litigation 239, 262-268 (1988) (discussing origins and evolution of the stream-of-commerce doctrine).
Many States have enacted long-arm statutes authorizing courts to exercise specific jurisdiction over manufacturers when the events in suit, or some of them, occurred within the forum state. For example, the “Local Injury; Foreign Act” subsection of North Carolina’s long-arm statute authorizes North Carolina courts to exercise personal jurisdiction in “any action claiming injury to person or property within this State arising out of [the defendant’s] act or omission outside this State,” if, “in addition[,] at or about the time of the injury,” “[p]roducts … manufactured by the defendant were used or consumed, within this State in the ordinary course of trade.” N.C. Gen. Stat. Ann. §1-75.4(4)(b) (Lexis 2009).2 As the North Carolina Court of Appeals recognized, this provision of the State’s long-arm statute “does not apply to this case,” for both the act alleged to have caused injury (the fabrication of the allegedly defective tire) and its impact (the accident) occurred outside the forum. See 199 N.C. App., at 61, n. 6.3
The North Carolina court’s stream-of-commerce analysis elided the essential difference between case-specific and all-purpose (general) jurisdiction. Flow of a manufacturer’s products into the forum, we have explained, may bolster an affiliation germane to specific jurisdiction. See, e.g., World-Wide Volkswagen, 444 U.S., at 297 (where “the sale of a product … is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve … the market for its product in [several] States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others” (emphasis added)). But ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant. See, e.g., Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distributors Pty. Ltd., 647 F.2d 200, 203, n. 5 (C.A.D.C. 1981) (defendants’ marketing arrangements, although “adequate to permit litigation of claims relating to [their] introduction of … wine into the United States stream of commerce, … would not be adequate to support general, ‘all purpose’ adjudicatory authority”).
A corporation’s “continuous activity of some sorts within a state,” International Shoe instructed, “is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.” 326 U.S., at 318. Our 1952 decision in Perkins v. Benguet Consol. Mining Co. remains “[t]he textbook case of general jurisdiction appropriately exercised over a foreign corporation that has not consented to suit in the forum.” Donahue v. Far Eastern Air Transport Corp., 652 F.2d 1032, 1037 (C.A.D.C. 1981).
Sued in Ohio, the defendant in Perkins was a Philippine mining corporation that had ceased activities in the Philippines during World War II. To the extent that the company was conducting any business during and immediately after the Japanese occupation of the Philippines, it was doing so in Ohio: the corporation’s president maintained his office there, kept the company files in that office, and supervised from the Ohio office “the necessarily limited wartime activities of the company.” Perkins, 342 U.S., at 447-448. Although the claim-in-suit did not arise in Ohio, this Court ruled that it would not violate due process for Ohio to adjudicate the controversy. Ibid.; see Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 779-780, n. 11 (1984) (Ohio’s exercise of general jurisdiction was permissible in Perkins because “Ohio was the corporation’s principal, if temporary, place of business”).
We next addressed the exercise of general jurisdiction over an out-of-state corporation over three decades later, in Helicopteros. In that case, survivors of United States citizens who died in a helicopter crash in Peru instituted wrongful-death actions in a Texas state court against the owner and operator of the helicopter, a Colombian corporation. The Colombian corporation had no place of business in Texas and was not licensed to do business there. “Basically, [the company’s] contacts with Texas consisted of sending its chief executive officer to Houston for a contract-negotiation session; accepting into its New York bank account checks drawn on a Houston bank; purchasing helicopters, equipment, and training services from [a Texas enterprise] for substantial sums; and sending personnel to [Texas] for training.” 466 U.S., at 416. These links to Texas, we determined, did not “constitute the kind of continuous and systematic general business contacts … found to exist in Perkins,” and were insufficient to support the exercise of jurisdiction over a claim that neither “ar[o]se out of … no[r] related to” the defendant’s activities in Texas. Id., at 415-416 (internal quotation marks omitted).
Helicopteros concluded that “mere purchases [made in the forum State], even if occurring at regular intervals, are not enough to warrant a State’s assertion of [general] jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions.” Id., at 418. We see no reason to differentiate from the ties to Texas held insufficient in Helicopteros, the sales of petitioners’ tires sporadically made in North Carolina through intermediaries. Under the sprawling view of general jurisdiction urged by respondents and embraced by the North Carolina Court of Appeals, any substantial manufacturer or seller of goods would be amenable to suit, on any claim for relief, wherever its products are distributed. But cf. World-Wide Volkswagen, 444 U.S., at 296 (every seller of chattels does not, by virtue of the sale, “appoint the chattel his agent for service of process”).
Measured against Helicopteros and Perkins, North Carolina is not a forum in which it would be permissible to subject petitioners to general jurisdiction. Unlike the defendant in Perkins, whose sole wartime business activity was conducted in Ohio, petitioners are in no sense at home in North Carolina. Their attenuated connections to the State, see supra, at 2852, fall far short of the “the continuous and systematic general business contacts” necessary to empower North Carolina to entertain suit against them on claims unrelated to anything that connects them to the State. Helicopteros, 466 U.S., at 416.4
Respondents belatedly assert a “single enterprise” theory, asking us to consolidate petitioners’ ties to North Carolina with those of Goodyear USA and other Goodyear entities. See Brief for Respondents 44-50. In effect, respondents would have us pierce Goodyear corporate veils, at least for jurisdictional purposes. See Brilmayer & Paisley, Personal Jurisdiction and Substantive Legal Relations: Corporations, Conspiracies, and Agency, 74 Cal. L. Rev. 1, 14, 29-30 (1986) (merging parent and subsidiary for jurisdictional purposes requires an inquiry “comparable to the corporate law question of piercing the corporate veil”). But see 199 N.C. App., at 64 (North Carolina Court of Appeals understood that petitioners are “separate corporate entities … not directly responsible for the presence in North Carolina of tires that they had manufactured”). Neither below nor in their brief in opposition to the petition for certiorari did respondents urge disregard of petitioners’ discrete status as subsidiaries and treatment of all Goodyear entities as a “unitary business,” so that jurisdiction over the parent would draw in the subsidiaries as well.5 Brief for Respondents 44. Respondents have therefore forfeited this contention, and we do not address it. This Court’s Rule 15.2; Granite Rock Co. v. Teamsters, 130 S. Ct. 2847, 2861 (2010).
For the reasons stated, the judgment of the North Carolina Court of Appeals is Reversed.
(1) The Goodyear court sidesteps the question of corporate veil-piercing on the grounds that the petitioners did not raise the argument before the case came to the Supreme Court. 131 S. Ct. at 2857. The Court’s reluctance to rule for the petitioners on that issue is not surprising, given that “[l]imited liability is the rule not the exception; and on that assumption large undertakings are rested, vast enterprises are launched, and huge sums of capital attracted.” Anderson v. Abbott, 321 U.S. 349, 362 (1944). However, “there are occasions when the limited liability sought to be obtained through the corporation will be qualified or denied.” Id. What should these “exceptional occasions” include? Would an alleged human rights violation committed by a foreign subsidiary justify a U.S. court’s exercise of general jurisdiction over its parent corporation? This issue was the subject of Daimler AG v. Bauman, 134 S. Ct. 746 (2014), infra. For a general analysis of this problem, see Brilmayer and Paisley, Personal Jurisdiction and Substantive Legal Relations: Corporations, Conspiracies, and Agency, 74 Cal. L. Rev. 1, 14, 29-30 (1986).
(2) Goodyear rules that “[a] court may assert general jurisdiction over foreign … corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” 131 S. Ct. at 2851. What does it mean for a corporation to be “at home” in a state? The Court uses a corporation’s place of incorporation and principal place of business as indicators of a corporate home. Id. at 2854. According to this logic, it appears intuitive that Goodyear’s Turkish, French, and Luxembourgian subsidiaries are not “at home” in the state of North Carolina. However, Goodyear USA, the parent company, was incorporated in Ohio but did not contest the North Carolina courts’ general jurisdiction over it. Moreover, the Supreme Court ruled in Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010), that the “principal place of business” is often the corporation’s “nerve center,” and that the “nerve center will typically be found at a corporation’s headquarters.” Don’t Goodyear and Hertz indicate that Goodyear USA is not “at home” in North Carolina? If neither the parent corporation nor its foreign subsidiaries are “at home” in North Carolina, what explains the affirmance of jurisdiction over the parent but not its subsidiaries?
(3) Justice Ginsburg explains the “at home” test for corporations by comparing it to the concept of domicile for natural persons: “[f]or an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” 131 S. Ct. at 2853-2854. However, given that corporations can move much more freely than people can, is it appropriate to create a test for general jurisdiction over corporations from the test for general jurisdiction over people? For example, “[a]ctual persons have no subsidiaries … [and] individuals cannot be and act in multiple places at the same time.” Michalski, Rights Come with Responsibilities: Personal Jurisdiction in the Age of Corporate Personhood, 50 San Diego L. Rev. 125, 126 n.2 (2013). Professor Michalski argues that corporations can often “evade the obligations that come with personhood,” and that “this discrepancy constitutes a fundamental and dangerous mismatch.” Id.
(4) In resolving conflicts of law, some courts have taken into account “the relative interests of the several jurisdictions [in having their law apply].” Auten v. Auten, 308 N.Y. 155, 161 (1954). Similarly, in Goodyear, the state court ruled that “North Carolina has an interest in this proceeding given that Plaintiffs seek redress for injuries sustained by North Carolina citizens.” Brown v. Meter, 681 S.E.2d 383, 394 (N.C. Ct. App. 2009). Should the Supreme Court have included this factor in its new test for general jurisdiction? Why or why not?
Daimler AG v. Bauman
134 S. Ct. 746 (2014)
[Argentine nationals sued Daimler under the Alien Tort Statute and the Torture Victims Protection Act, alleging that Daimler’s wholly-owned subsidiary collaborated with Argentine security forces to kidnap, torture, and kill the plaintiffs or their family members during Argentina’s “Dirty War.” The District Court dismissed for lack of personal jurisdiction, but the Ninth Circuit reversed. The Supreme Court ruled that the due process clause did not permit exercise of general jurisdiction over Daimler AG.]
Justice GINSBURG delivered the opinion of the Court.
This case concerns the authority of a court in the United States to entertain a claim brought by foreign plaintiffs against a foreign defendant based on events occurring entirely outside the United States. The litigation commenced in 2004, when twenty-two Argentinian residents filed a complaint in the United States District Court for the Northern District of California against DaimlerChrysler Aktiengesellschaft (Daimler), a German public stock company, headquartered in Stuttgart, that manufactures Mercedes-Benz vehicles in Germany. The complaint alleged that during Argentina’s 1976-1983 “Dirty War,” Daimler’s Argentinian subsidiary, Mercedes-Benz Argentina (MB Argentina) collaborated with state security forces to kidnap, detain, torture, and kill certain MB Argentina workers, among them, plaintiffs or persons closely related to plaintiffs. Damages for the alleged human-rights violations were sought from Daimler under the laws of the United States, California, and Argentina. Jurisdiction over the lawsuit was predicated on the California contacts of Mercedes-Benz USA, LLC (MBUSA), a subsidiary of Daimler incorporated in Delaware with its principal place of business in New Jersey. MBUSA distributes Daimler-manufactured vehicles to independent dealerships throughout the United States, including California.
The question presented is whether the Due Process Clause of the Fourteenth Amendment precludes the District Court from exercising jurisdiction over Daimler in this case, given the absence of any California connection to the atrocities, perpetrators, or victims described in the complaint. Plaintiffs invoked the court’s general or all-purpose jurisdiction. California, they urge, is a place where Daimler may be sued on any and all claims against it, wherever in the world the claims may arise. For example, as plaintiffs’ counsel affirmed, under the proffered jurisdictional theory, if a Daimler-manufactured vehicle overturned in Poland, injuring a Polish driver and passenger, the injured parties could maintain a design defect suit in California. See Tr. of Oral Arg. 28-29. Exercises of personal jurisdiction so exorbitant, we hold, are barred by due process constraints on the assertion of adjudicatory authority.
In Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011), we addressed the distinction between general or all-purpose jurisdiction, and specific or conduct-linked jurisdiction. As to the former, we held that a court may assert jurisdiction over a foreign corporation “to hear any and all claims against [it]” only when the corporation’s affiliations with the State in which suit is brought are so constant and pervasive “as to render [it] essentially at home in the forum State.” Id., at 2851. Instructed by Goodyear, we conclude Daimler is not “at home” in California, and cannot be sued there for injuries plaintiffs attribute to MB Argentina’s conduct in Argentina.
MBUSA, an indirect subsidiary of Daimler, is a Delaware limited liability corporation.6 MBUSA serves as Daimler’s exclusive importer and distributor in the United States, purchasing Mercedes-Benz automobiles from Daimler in Germany, then importing those vehicles, and ultimately distributing them to independent dealerships located throughout the Nation. Although MBUSA’s principal place of business is in New Jersey, MBUSA has multiple California-based facilities, including a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine. According to the record developed below, MBUSA is the largest supplier of luxury vehicles to the California market. In particular, over 10% of all sales of new vehicles in the United States take place in California, and MBUSA’s California sales account for 2.4% of Daimler’s worldwide sales.
The relationship between Daimler and MBUSA is delineated in a General Distributor Agreement, which sets forth requirements for MBUSA’s distribution of Mercedes-Benz vehicles in the United States. That agreement established MBUSA as an “independent contracto[r]” that “buy[s] and sell[s] [vehicles] … as an independent business for [its] own account.” App. 179a. The agreement “does not make [MBUSA] … a general or special agent, partner, joint venturer or employee of DAIMLERCHRYSLER or any DaimlerChrysler Group Company”; MBUSA “ha[s] no authority to make binding obligations for or act on behalf of DAIMLERCHRYSLER or any DaimlerChrysler Group Company.” Ibid.
After allowing jurisdictional discovery on plaintiffs’ agency allegations, the District Court granted Daimler’s motion to dismiss. Daimler’s own affiliations with California, the court first determined, were insufficient to support the exercise of all-purpose jurisdiction over the corporation. Bauman v. DaimlerChrysler AG, No. C-04-00194 RMW (N.D. Cal., Nov. 22, 2005), App. to Pet. for Cert. 111a-112a, 2005 WL 3157472, *9-*10. Next, the court declined to attribute MBUSA’s California contacts to Daimler on an agency theory, concluding that plaintiffs failed to demonstrate that MBUSA acted as Daimler’s agent. Id., at 117a, 133a, 2005 WL 3157472, *12, *19; Bauman v. DaimlerChrysler AG, No. C-04-00194 RMW (N.D. Cal., Feb. 12, 2007), App. to Pet. for Cert. 83a-85a, 2007 WL 486389, *2.
The Ninth Circuit at first affirmed the District Court’s judgment. Addressing solely the question of agency, the Court of Appeals held that plaintiffs had not shown the existence of an agency relationship of the kind that might warrant attribution of MBUSA’s contacts to Daimler. Bauman v. DaimlerChrysler Corp., 579 F.3d 1088, 1096-1097 (2009). Judge Reinhardt dissented. In his view, the agency test was satisfied and considerations of “reasonableness” did not bar the exercise of jurisdiction. Id., at 1098-1106. Granting plaintiffs’ petition for rehearing, the panel withdrew its initial opinion and replaced it with one authored by Judge Reinhardt, which elaborated on reasoning he initially expressed in dissent. Bauman v. DaimlerChrysler Corp., 644 F.3d 909 (C.A.9 2011).
Daimler petitioned for rehearing and rehearing en banc, urging that the exercise of personal jurisdiction over Daimler could not be reconciled with this Court’s decision in Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011). Over the dissent of eight judges, the Ninth Circuit denied Daimler’s petition. See Bauman v. DaimlerChrysler Corp., 676 F.3d 774 (2011) (O’Scannlain, J., dissenting from denial of rehearing en banc).
We granted certiorari to decide whether, consistent with the Due Process Clause of the Fourteenth Amendment, Daimler is amenable to suit in California courts for claims involving only foreign plaintiffs and conduct occurring entirely abroad.
Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons. See Fed. Rule Civ. Proc. 4(k)(1)(A) (service of process is effective to establish personal jurisdiction over a defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located”). Under California’s long-arm statute, California state courts may exercise personal jurisdiction “on any basis not inconsistent with the Constitution of this state or of the United States.” Cal. Civ. Proc. Code Ann. §410.10 (West 2004). California’s long-arm statute allows the exercise of personal jurisdiction to the full extent permissible under the U.S. Constitution. We therefore inquire whether the Ninth Circuit’s holding comports with the limits imposed by federal due process. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 464 (1985).
[The Court recounts the history of its rulings regarding specific jurisdiction.]
Our post-International Shoe opinions on general jurisdiction, by comparison, are few. “[The Court’s] 1952 decision in Perkins v. Benguet Consol. Mining Co. remains the textbook case of general jurisdiction appropriately exercised over a foreign corporation that has not consented to suit in the forum.” Goodyear, 131 S. Ct., at 2856 (internal quotation marks and brackets omitted). The defendant in Perkins, Benguet, was a company incorporated under the laws of the Philippines, where it operated gold and silver mines. Benguet ceased its mining operations during the Japanese occupation of the Philippines in World War II; its president moved to Ohio, where he kept an office, maintained the company’s files, and oversaw the company’s activities. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 448 (1952). The plaintiff, an Ohio resident, sued Benguet on a claim that neither arose in Ohio nor related to the corporation’s activities in that State. We held that the Ohio courts could exercise general jurisdiction over Benguet without offending due process. Ibid. That was so, we later noted, because “Ohio was the corporation’s principal, if temporary, place of business.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780, n. 11 (1984).
The next case on point, Helicopteros, 466 U.S. 408, arose from a helicopter crash in Peru. Four U.S. citizens perished in that accident; their survivors and representatives brought suit in Texas state court against the helicopter’s owner and operator, a Colombian corporation. That company’s contacts with Texas were confined to “sending its chief executive officer to Houston for a contract-negotiation session; accepting into its New York bank account checks drawn on a Houston bank; purchasing helicopters, equipment, and training services from [a Texas-based helicopter company] for substantial sums; and sending personnel to [Texas] for training.” Id., at 416. Notably, those contacts bore no apparent relationship to the accident that gave rise to the suit. We held that the company’s Texas connections did not resemble the “continuous and systematic general business contacts … found to exist in Perkins.” Ibid. “[M]ere purchases, even if occurring at regular intervals,” we clarified, “are not enough to warrant a State’s assertion of in personam jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions.” Id., at 418.
Most recently, in Goodyear, we answered the question: “Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State?” 131 S.Ct., at 2850. That case arose from a bus accident outside Paris that killed two boys from North Carolina. The boys’ parents brought a wrongful-death suit in North Carolina state court alleging that the bus’s tire was defectively manufactured. The complaint named as defendants not only The Goodyear Tire and Rubber Company (Goodyear), an Ohio corporation, but also Goodyear’s Turkish, French, and Luxembourgian subsidiaries. Those foreign subsidiaries, which manufactured tires for sale in Europe and Asia, lacked any affiliation with North Carolina. A small percentage of tires manufactured by the foreign subsidiaries were distributed in North Carolina, however, and on that ground, the North Carolina Court of Appeals held the subsidiaries amenable to the general jurisdiction of North Carolina courts.
We reversed, observing that the North Carolina court’s analysis “elided the essential difference between case-specific and all-purpose (general) jurisdiction.” Id., at 2855. Although the placement of a product into the stream of commerce “may bolster an affiliation germane to specific jurisdiction,” we explained, such contacts “do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant.” Id., at 2857. As International Shoe itself teaches, a corporation’s “continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity.” 326 U.S., at 318. Because Goodyear’s foreign subsidiaries were “in no sense at home in North Carolina,” we held, those subsidiaries could not be required to submit to the general jurisdiction of that State’s courts. 131 S. Ct., at 2857. See also J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780, 2797-2798 (2011) (GINSBURG, J., dissenting) (noting unanimous agreement that a foreign manufacturer, which engaged an independent U.S.-based distributor to sell its machines throughout the United States, could not be exposed to all-purpose jurisdiction in New Jersey courts based on those contacts).
As is evident from Perkins, Helicopteros, and Goodyear, general and specific jurisdiction have followed markedly different trajectories post-International Shoe. Specific jurisdiction has been cut loose from Pennoyer’s sway, but we have declined to stretch general jurisdiction beyond limits traditionally recognized. As this Court has increasingly trained on the “relationship among the defendant, the forum, and the litigation,” Shaffer, 433 U.S., at 204, i.e., specific jurisdiction,7 general jurisdiction has come to occupy a less dominant place in the contemporary scheme.8
With this background, we turn directly to the question whether Daimler’s affiliations with California are sufficient to subject it to the general (all-purpose) personal jurisdiction of that State’s courts. In the proceedings below, the parties agreed on, or failed to contest, certain points we now take as given. Plaintiffs have never attempted to fit this case into the specific jurisdiction category. Nor did plaintiffs challenge on appeal the District Court’s holding that Daimler’s own contacts with California were, by themselves, too sporadic to justify the exercise of general jurisdiction. While plaintiffs ultimately persuaded the Ninth Circuit to impute MBUSA’s California contacts to Daimler on an agency theory, at no point have they maintained that MBUSA is an alter ego of Daimler.
Daimler, on the other hand, failed to object below to plaintiffs’ assertion that the California courts could exercise all-purpose jurisdiction over MBUSA. But see Brief for Petitioner 23, n. 4 (suggestion that in light of Goodyear, MBUSA may not be amenable to general jurisdiction in California); Brief for United States as Amicus Curiae 16, n. 5 (hereinafter U.S. Brief) (same). We will assume then, for purposes of this decision only, that MBUSA qualifies as at home in California.
In sustaining the exercise of general jurisdiction over Daimler, the Ninth Circuit relied on an agency theory, determining that MBUSA acted as Daimler’s agent for jurisdictional purposes and then attributing MBUSA’s California contacts to Daimler. The Ninth Circuit’s agency analysis derived from Circuit precedent considering principally whether the subsidiary “performs services that are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation’s own officials would undertake to perform substantially similar services.” 644 F.3d, at 920 (quoting Doe v. Unocal Corp., 248 F.3d 915, 928 (C.A.9 2001); emphasis deleted).
This Court has not yet addressed whether a foreign corporation may be subjected to a court’s general jurisdiction based on the contacts of its in-state subsidiary. Daimler argues, and several Courts of Appeals have held, that a subsidiary’s jurisdictional contacts can be imputed to its parent only when the former is so dominated by the latter as to be its alter ego. The Ninth Circuit adopted a less rigorous test based on what it described as an “agency” relationship. Agencies, we note, come in many sizes and shapes: “One may be an agent for some business purposes and not others so that the fact that one may be an agent for one purpose does not make him or her an agent for every purpose.” 2A C. J. S., Agency §43, p. 367 (2013) (footnote omitted).9 A subsidiary, for example, might be its parent’s agent for claims arising in the place where the subsidiary operates, yet not its agent regarding claims arising elsewhere. The Court of Appeals did not advert to that prospect. But we need not pass judgment on invocation of an agency theory in the context of general jurisdiction, for in no event can the appeals court’s analysis be sustained.
The Ninth Circuit’s agency finding rested primarily on its observation that MBUSA’s services were “important” to Daimler, as gauged by Daimler’s hypothetical readiness to perform those services itself if MBUSA did not exist. Formulated this way, the inquiry into importance stacks the deck, for it will always yield a pro-jurisdiction answer: “Anything a corporation does through an independent contractor, subsidiary, or distributor is presumably something that the corporation would do ‘by other means’ if the independent contractor, subsidiary, or distributor did not exist.” 676 F.3d, at 777 (O’Scannlain, J., dissenting from denial of rehearing en banc).10 The Ninth Circuit’s agency theory thus appears to subject foreign corporations to general jurisdiction whenever they have an in-state subsidiary or affiliate, an outcome that would sweep beyond even the “sprawling view of general jurisdiction” we rejected in Goodyear. 131 S. Ct., at 2856.11
Even if we were to assume that MBUSA is at home in California, and further to assume MBUSA’s contacts are imputable to Daimler, there would still be no basis to subject Daimler to general jurisdiction in California, for Daimler’s slim contacts with the State hardly render it at home there.12
Goodyear made clear that only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there. “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” 131 S. Ct., at 2853-2854 (citing Brilmayer et al., A General Look at General Jurisdiction, 66 Texas L. Rev. 721, 728 (1988)). With respect to a corporation, the place of incorporation and principal place of business are “paradig[m] … bases for general jurisdiction.” Id., at 735. See also Twitchell, 101 Harv. L. Rev., at 633. Those affiliations have the virtue of being unique—that is, each ordinarily indicates only one place—as well as easily ascertainable. Cf. Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010) (“Simple jurisdictional rules … promote greater predictability.”). These bases afford plaintiffs recourse to at least one clear and certain forum in which a corporate defendant may be sued on any and all claims.
Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business; it simply typed those places paradigm all-purpose forums. Plaintiffs would have us look beyond the exemplar bases Goodyear identified, and approve the exercise of general jurisdiction in every State in which a corporation “engages in a substantial, continuous, and systematic course of business.” Brief for Respondents 16-17, and nn. 7-8. That formulation, we hold, is unacceptably grasping.
As noted, see supra, at 753-754, the words “continuous and systematic” were used in International Shoe to describe instances in which the exercise of specific jurisdiction would be appropriate. See 326 U.S., at 317 (jurisdiction can be asserted where a corporation’s in-state activities are not only “continuous and systematic, but also give rise to the liabilities sued on”). Turning to all-purpose jurisdiction, in contrast, International Shoe speaks of “instances in which the continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit … on causes of action arising from dealings entirely distinct from those activities.” Id., at 318 (emphasis added). See also Twitchell, Why We Keep Doing Business With Doing-Business Jurisdiction, 2001 U. Chi. Legal Forum 171, 184 (International Shoe “is clearly not saying that dispute-blind jurisdiction exists whenever ‘continuous and systematic’ contacts are found.”).13 Accordingly, the inquiry under Goodyear is not whether a foreign corporation’s in-forum contacts can be said to be in some sense “continuous and systematic,” it is whether that corporation’s “affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” 131 S. Ct., at 2851.14
Here, neither Daimler nor MBUSA is incorporated in California, nor does either entity have its principal place of business there. If Daimler’s California activities sufficed to allow adjudication of this Argentina-rooted case in California, the same global reach would presumably be available in every other State in which MBUSA’s sales are sizable. Such exorbitant exercises of all-purpose jurisdiction would scarcely permit out-of-state defendants “to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.” Burger King Corp., 471 U.S., at 472 (internal quotation marks omitted).
It was therefore error for the Ninth Circuit to conclude that Daimler, even with MBUSA’s contacts attributed to it, was at home in California, and hence subject to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred or had its principal impact in California.15
[The Court remarked on the transnational context of this case and the significance of the Alien Tort Statute and the Torture Victims Protection Act.]
* * *
For the reasons stated, the judgment of the United States Court of Appeals for the Ninth Circuit is Reversed.
[A concurring opinion by Justice SOTOMAYOR is omitted.]
(1) Justice Ginsburg, the author of the unanimous opinion in Bauman, wrote a dissenting opinion in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011). In that dissent she criticized the majority for failing to exercise general jurisdiction over a British corporation that effectively availed itself of the U.S. market, but sold its products through a technically independent U.S. distributor in order to avoid liability litigation. 131 S. Ct. at 2794-2795. As Justice Ginsburg observes in Bauman, “MBUSA distributes Daimler-manufactured vehicles to independent dealerships throughout the United States, including California,” Daimler AG v. Bauman, 134 S. Ct. 746, 752 (2014). How does Justice Ginsburg justify Bauman’s refusal to exercise general jurisdiction, in contrast to her dissent in Nicastro?
(2) Similar to Brown v. Meter, 681 S.E.2d 383 (N.C. Ct. App. 2009), the Ninth Circuit ruled that California “ha[s] a significant interest in adjudicating the suit” even though “the events at issue did not take place in California and although the plaintiffs are not California residents.” Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 927 (9th Cir. 2011). An example of this “significant interest” may be to protect human rights and to promote responsible behavior among multinational corporations, a proposal that has some scholarly support. See, e.g., Bensimon, Corporate Liability Under the Alien Tort Statute: Can Corporations Have Their Cake and Eat It Too?, 10 Loy. U. Chi. Int’l L. Rev. 199 (2013). When, for example, human rights violations have occurred in a state without an independent judiciary, should U.S. courts hear suits against the perpetrators on the grounds that there are no feasible alternative venues? Why or why not?
(3) An amicus brief filed by the German Institute for Human Rights and other German legal experts argued that the Supreme Court should affirm the Ninth Circuit because, among other reasons, non-U.S. venues are unavailable. Bauman v. DaimlerChrysler Corp., No. 11-965, 2013 WL 4578964, *6. The Brief observed that Argentine law bars claims about the Dirty War and that German courts would apply the Argentine laws that bar the plaintiffs’ claims. Id. However, the same brief states that “Under Art. 40 EGBGB [Act Introducing the Civil Code], the substantive law applied is that of the territory where the tortfeasor committed the tortious conduct. As an alternative, the plaintiff can demand that the law of the territory where the injurious effect of the conduct is felt.” Id. Under that alternative, couldn’t the plaintiffs go to Germany and sue there, claiming that the injurious effect of Mercedez-Benz Argentina’s tortious conduct is felt wherever the plaintiffs are (in the form of grief and sorrow over the loss of their loved ones)? Why do you think German law retains a provision that exposes German courts to the possibility of forum-shopping?
C. Jurisdiction Based on Property
In Harris v. Balk, 198 U.S. 215 (1905), the famous bête noir of first-year civil procedure students, Harris and Balk were from North Carolina. Harris owed Balk $180. Harris visited Maryland, where Epstein “seized” the debt owed to Balk to help satisfy a claim that Epstein had against Balk for a greater amount. The action proceeded against Harris in Maryland. He put up no defense, admitting that he owed the money to Balk and not involving himself in the merits of the dispute between Epstein and Balk. Epstein won the Maryland judgment and collected the $180. When Harris returned to North Carolina, Balk sued him for the $180. Harris claimed the Maryland judgment in bar. The Supreme Court upheld the defense. Note that two holdings were necessary to reach the result in Harris v. Balk: (1) A debt, though intangible property, is subject to seizure like tangible property; and (2) the debt is “located” where the debtor is (and not where the creditor-owner is) because that is where the debtor can be sued and the debt realized.
Perhaps the cleverest use ever made of the doctrine of Harris v. Balk occurred in Siro v. American Express Co., 99 Conn. 95, 121 A. 280 (1923). Plaintiff had a claim against American Express but either could not or did not bother to obtain personal jurisdiction over American Express in Connecticut. Instead, plaintiff’s lawyers had another lawyer go to the bank and buy $620 worth of travelers’ checks. He made no representation to the bank about the purpose of his purchase. As soon as he left the bank, a deputy sheriff served garnishment papers on the bank—by accepting the lawyer’s money, it became indebted to American Express under the agreement by which the bank sold American Express travelers’ checks. The lawyer who bought the checks had done so with money supplied by the plaintiff’s attorneys, and shortly after buying them he deposited them at another bank to the account of the plaintiff’s attorneys. The court upheld jurisdiction on the basis of Harris v. Balk and ruled that there had been no fraudulent inducement of assets into the state because no misrepresentations had been made. The court added, “If the defendant has a good defense to the plaintiff’s suit, it should rather welcome its determination by a judicial tribunal than seek to avoid or postpone the issue by a technicality.”
The doctrine of Harris v. Balk survived until surprisingly recent times.
Shaffer v. Heitner
433 U.S. 186 (1977)
Justice MARSHALL delivered the opinion of the Court.
The controversy in this case concerns the constitutionality of a Delaware statute that allows a court of that State to take jurisdiction of a lawsuit by sequestering any property of the defendant that happens to be located in Delaware. Appellants contend that the sequestration statute as applied in this case violates the Due Process Clause of the Fourteenth Amendment both because it permits the state courts to exercise jurisdiction despite the absence of sufficient contacts among the defendants, the litigation, and the State of Delaware and because it authorizes the deprivation of defendants’ property without providing adequate procedural safeguards. We find it necessary to consider only the first of these contentions.
Appellee Heitner, a nonresident of Delaware, is the owner of one share of stock in the Greyhound Corporation, a business incorporated under the laws of Delaware with its principal place of business in Phoenix, Ariz. On May 22, 1974, he filed a shareholder’s derivative suit in the Court of Chancery for New Castle County, Del., in which he named as defendants Greyhound, its wholly owned subsidiary Greyhound Lines, Inc. and 28 present or former officers or directors of one or both of the corporations. In essence Heitner alleged that the individual defendants had violated their duties to Greyhound by causing it and its subsidiaries to engage in actions that resulted in the corporation’s being held liable for substantial damages in a private antitrust suit and a large fine in a criminal contempt action. The activities which led to these penalties took place in Oregon.
Simultaneously with his complaint, Heitner filed a motion for an order of sequestration of the Delaware property of the individual defendants pursuant to 10 Del. C. §366. This motion was accompanied by a supporting affidavit of counsel which stated that the individual defendants were non-residents of Delaware. The affidavit identified the property to be sequestered as
common stock, 3% Second Cumulative Preferred Stock and stock unit credits of the Defendant Greyhound Corporation, a Delaware corporation, as well as all options and all warrants to purchase said stock issued to said individual Defendants and all contractual obligations, all rights, debts or credits due or accrued to or for the benefit of any of the said Defendants under any type of written agreement, contract, or other legal instrument of any kind whatever between any of the individual Defendants and said corporation.
The requested sequestration order was signed the day the motion was filed. Pursuant to that order, the sequestrator “seized” approximately 82,000 shares of Greyhound common stock belonging to 19 of the defendants, and options belonging to another two defendants. These seizures are accomplished by placing “stop transfer” orders or their equivalents on the books of the Greyhound Corporation. So far as the record shows, none of the certificates representing the seized property was physically present in Delaware. The stock was considered to be in Delaware, and so subject to seizure, by virtue of a Del. C. §169, which makes Delaware the situs of ownership of all stock in Delaware corporations.
All 28 defendants were notified of the initiation of the suit by certified mail directed to their last known addresses and by publication in a New Castle County newspaper. The 21 defendants whose property was seized (hereafter referred to as appellants) responded by entering a special appearance for the purpose of moving to quash service of process and to vacate the sequestration order. They contended that the ex parte sequestration procedure did not accord them due process of law and that the property seized was not capable of attachment in Delaware. In addition, appellants asserted that under the rule of International Shoe Co. v. Washington, they did not have sufficient contacts with Delaware to sustain the jurisdiction of that State’s courts.
The Court of Chancery rejected these arguments.…
We noted probable jurisdiction. We reverse.
The Delaware courts rejected appellants’ jurisdictional challenge by noting that this suit was brought as a quasi in rem proceeding. Since quasi in rem jurisdiction is traditionally based on attachment or seizure of property present in the jurisdiction, not on contacts between the defendant and the State, the courts considered appellants’ claimed lack of contacts with Delaware to be unimportant. This categorical analysis assumes the continuous soundness of the conceptual structure founded on the century-old case of Pennoyer v. Neff.…
The case for applying to jurisdiction in rem the same test of “fair play and substantial justice” as governs assertions of jurisdiction in personam is simple and straightforward. It is premised on recognition that “[t]he phrase, ‘judicial jurisdiction over a thing,’ is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing.” Restatement (Second) of Conflict of Laws §56, introductory note. This recognition leads to the conclusion that in order to justify an exercise of jurisdiction in rem, the basis for jurisdiction must be sufficient to justify exercising “jurisdiction over the interests of persons in a thing.” The standard for determining whether an exercise of jurisdiction over the interests of persons is consistent with the Due Process Clause is the minimum contacts standard elucidated in International Shoe.
This argument, of course, does not ignore the fact that the presence of property in a State may bear on the existence of jurisdiction by providing contacts among the forum State, the defendant, and the litigation. For example, when claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant,24 it would be unusual for the State where the property is located not to have jurisdiction. In such cases, the defendant’s claim to property located in the State would normally indicate that he expected to benefit from the State’s protection of his interest. The State’s strong interests in assuring the marketability of property within its borders and in providing a procedure for peaceful resolution of disputes about the possession of that property could also support jurisdiction, as would the likelihood that important records and witnesses will be found in the State.28 The presence of property may also favor jurisdiction in cases, such as suits for injury suffered on the land of an absentee owner, where the defendant’s ownership of the property is conceded but the cause of action is otherwise related to rights and duties growing out of that ownership.
It appears, therefore, that jurisdiction over many types of actions which now are or might be brought in rem would not be affected by a holding that any assertion of state court jurisdiction must satisfy the International Shoe standard.30 For the type of quasi in rem action typified by Harris v. Balk and the present case, however, accepting the proposed analysis would result in significant change. These are cases where the property which now serves as the basis for state court jurisdiction is completely unrelated to the plaintiff’s cause of action. Thus, although the presence of the defendant’s property in a State might suggest the existence of other ties among the defendant, the State, and the litigation, the presence of the property alone would not support the State’s jurisdiction. If those other ties did not exist, cases over which the State is now thought to have jurisdiction could not be brought in that forum.
Since acceptance of the International Shoe test would most affect this class of cases, we examine the arguments against adopting that standard as they relate to this category of litigation. Before doing so, however, we note that this type of case also presents the clearest illustration of the argument in favor of assessing assertions of jurisdiction by a single standard. For in cases such as Harris and this one, the only role played by the property is to provide the basis for bringing the defendant into court. Indeed, the express purpose of the Delaware sequestration procedure is to compel the defendant to enter a personal appearance. In such cases, if a direct assertion of personal jurisdiction over the defendant would violate the Constitution, it would seem that an indirect assertion of that jurisdiction should be equally impermissible.
The primary rationale for treating the presence of property as a sufficient basis for jurisdiction to adjudicate claims over which the State would not have jurisdiction if International Shoe applied is that a wrongdoer “should not be able to avoid payment of his obligations by the expedient of removing his assets to a place where he is not subject to an in personam suit.” Restatement (Second) of Conflicts §66, comment a. This justification, however, does not explain why jurisdiction should be recognized without regard to whether the property is present in the State because of an effort to avoid the owner’s obligations. Nor does it support jurisdiction to adjudicate the underlying claim. At most, it suggests that a State in which property is located should have jurisdiction to attach that property, by use of proper procedures, as security for a judgment being sought in a forum where the litigation can be maintained consistently with International Shoe. Moreover, we know of nothing to justify the assumption that a debtor can avoid paying his obligations by removing his property to a State in which his creditor cannot obtain personal jurisdiction over him. The Full Faith and Credit Clause, after all, makes the valid in personam judgment of one State enforceable in all other States.36
It might also be suggested that allowing in rem jurisdiction avoids the uncertainty inherent in the International Shoe standard and assures a plaintiff of a forum.37 We believe, however, that the fairness standard of International Shoe can be easily applied in the vast majority of cases. Moreover, when the existence of jurisdiction in a particular forum under International Shoe is unclear, the cost of simplifying the litigation by avoiding the jurisdictional question may be the sacrifice of “fair play and substantial justice.” That cost is too high.
We are left, then, to consider the significance of the long history of jurisdiction based solely on the presence of property in a State. Although the theory that territorial power is both essential to and sufficient for jurisdiction has been undermined, we have never held that the presence of property in a State does not automatically confer jurisdiction over the owner’s interest in that property. This history must be considered as supporting the proposition that jurisdiction based solely on the presence of property satisfies the demands of due process, but it is not decisive. “[T]raditional notions of fair play and substantial justice” can be as readily offended by the perpetuation of ancient forms that are no longer justified as by the adoption of new procedures that are inconsistent with the basic values of our constitutional heritage. The fiction that an assertion of jurisdiction over property is anything but an assertion of jurisdiction over the owner of the property supports an ancient form without substantial modern justification. Its continued acceptance would serve only to allow state court jurisdiction that is fundamentally unfair to the defendant.
We therefore conclude that all assertions of state court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.39
The Delaware courts based their assertion of jurisdiction in this case solely on the statutory presence of appellants’ property in Delaware. Yet that property is not the subject matter of this litigation, nor is the underlying cause of action related to the property. Appellants’ holdings in Greyhound do not, therefore, provide contacts with Delaware sufficient to support the jurisdiction of that State’s courts over appellants. If it exists, that jurisdiction must have some other foundation.
Appellee Heitner did not allege and does not now claim that appellants have ever set foot in Delaware. Nor does he identify any act related to his cause of action as having taken place in Delaware. Nevertheless, he contends that appellants’ positions as directors and officers of a corporation chartered in Delaware provide sufficient “contacts, ties, or relations,” International Shoe Co. v. Washington, with that State to give its courts jurisdiction over appellants in this stockholder’s derivative action. This argument is based primarily on what Heitner asserts to be the strong interest of Delaware in supervising the management of a Delaware corporation. That interest is said to derive from the role of Delaware law in establishing the corporation and defining the obligations owed to it by its officers and directors. In order to protect this interest, appellee concludes, Delaware’s courts must have jurisdiction over corporate fiduciaries such as appellants.
This argument is undercut by the failure of the Delaware Legislature to assert the state interest appellee finds so compelling. Delaware law bases jurisdiction not on appellants’ status as corporate fiduciaries, but rather on the presence of their property in the State. Although the sequestration procedure used here may be most frequently used in derivative suits against officers and directors, the authorizing statute evinces no specific concern with such actions. Sequestration can be used in any suit against a non-resident, and reaches corporate fiduciaries only if they happen to own interests in a Delaware corporation, or other property in the State. But as Heitner’s failure to secure jurisdiction over seven of the defendants named in his complaint demonstrates, there is no necessary relationship between holding a position as a corporate fiduciary and owning stock or other interests in the corporation. If Delaware perceived its interest in securing jurisdiction over corporate fiduciaries to be as great as Heitner suggests, we would expect it to have enacted a statute more clearly designed to protect that interest.
Moreover, even if Heitner’s assessment of the importance of Delaware’s interest is accepted, his argument fails to demonstrate that Delaware is a fair forum for this litigation. The interest appellee has identified may support the application of Delaware law to resolve any controversy over appellants’ actions in their capacities as officers and directors.44 But we have rejected the argument that if a State’s law can properly be applied to a dispute, its courts necessarily have jurisdiction over the parties to that dispute.
Appellee suggests that by accepting positions as officers or directors of a Delaware corporation, appellants performed the acts required by Hanson v. Denckla. He notes that Delaware law provides substantial benefits to corporate officers and directors, and that these benefits were at least in part the incentive for appellants to assume their positions. It is, he says, “only fair and just” to require appellants, in return for these benefits, to respond in the State of Delaware when they are accused of misusing their powers. But like Heitner’s first argument, this line of reasoning establishes only that it is appropriate for Delaware law to govern the obligations of appellants to Greyhound and its stockholders. It does not demonstrate that appellants have “purposefully avail[ed themselves] of the privilege of conducting activities within the forum State,” Hanson v. Denckla, in a way that would justify bringing them before a Delaware tribunal. Appellants have simply had nothing to do with the State of Delaware. Moreover, appellants had no reason to expect to be haled before a Delaware court. Delaware, unlike some States, has not enacted a statute that treats acceptance of a directorship as consent to jurisdiction in the State. And “[i]t strains reason … to suggest that anyone buying securities in a corporation formed in Delaware ‘impliedly consents’ to subject himself to Delaware’s … jurisdiction on any cause of action.” Appellants, who were not required to acquire interests in Greyhound in order to hold their positions, did not by acquiring those interests surrender their right to be brought to judgment only in States with which they had had “minimum contacts.”
The judgment of the Delaware Supreme Court must, therefore, be reversed. It is so ordered.
Justice REHNQUIST took no part in the consideration or decision of this case.
Justice POWELL, concurring.
I agree that the principles of International Shoe Co. v. Washington should be extended to govern assertions of in rem as well as in personam jurisdiction in state court. I also agree that neither the statutory presence of appellants’ stock in Delaware nor their positions as directors and officers of a Delaware corporation can provide sufficient contacts to support the Delaware courts’ assertion of jurisdiction in this case.
I would explicitly reserve judgment, however, on whether the ownership of some forms of property whose situs is indisputably and permanently located within a State may, without more, provide the contacts necessary to subject a defendant to jurisdiction within the State to the extent of the value of the property. In the case of real property, in particular, preservation of the common law concept of quasi in rem jurisdiction arguably would avoid the uncertainty of the general International Shoe standard without significant cost to “traditional notions of fair play and substantial justice.”
Subject to that reservation, I join the opinion of the Court.
Justice STEVENS, concurring in the judgment.
The Due Process Clause affords protection against “judgments without notice.” International Shoe Co. v. Washington (opinion of Black, J.). Throughout our history the acceptable exercise of in rem and quasi in rem jurisdiction has included a procedure giving reasonable assurance that actual notice of the particular claim will be conveyed to the defendant. Thus, publication, notice by registered mail, or extraterritorial personal service has been an essential ingredient of any procedure that serves as a substitute for personal service within the jurisdiction.
The requirement of fair notice also, I believe, includes fair warning that a particular activity may subject a person to the jurisdiction of a foreign sovereign. If I visit another state, or acquire real estate or open a bank account in it, I knowingly assume some risk that the state will exercise its power over my property or my person while there. My contact with the state, though minimal, gives rise to predictable risks.
Perhaps the same consequences should flow from the purchase of stock of a corporation organized under the laws of a foreign state, because to some limited extent one’s property and affairs then become subject to the laws of the state of domicile of the corporation. As a matter of international law, that suggestion might be acceptable because a foreign investment is sufficiently unusual to make it appropriate to require the investor to study the ramifications of his decision. But a purchase of securities in the domestic market is an entirely different matter.
One who purchases shares of stock on the open market can hardly be expected to know that he has thereby become subject to suit in a forum remote from his residence and unrelated to the transaction. As a practical matter, the Delaware Sequestration Statute created an unacceptable risk of judgment without notice. Unlike the 49 other States, Delaware treats the place of incorporation as the situs of the stock, even though both the owner and the custodian of the shares are elsewhere. Moreover, Delaware denies the defendant the opportunity to defend the merits of the suit unless he subjects himself to the unlimited jurisdiction of the court. Thus, it coerces a defendant either to submit to personal jurisdiction in a forum which could not otherwise obtain such jurisdiction or to lose the securities which have been attached. If its procedure were upheld, Delaware would, in effect, impose a duty of inquiry on every purchaser of securities in the national market. For unless the purchaser ascertains both the state of incorporation of the company whose shares he is buying, and also the idiosyncrasies of its law, he may be assuming an unknown risk of litigation. I therefore agree with the Court that on the record before us no adequate basis for jurisdiction exists and that the Delaware statute is unconstitutional on its face.
How the Court’s opinion may be applied in other contexts is not entirely clear to me. I agree with Mr. Justice Powell that it should not be read to invalidate in rem jurisdiction where real estate is involved. I would also not read it as invalidating other long accepted methods of acquiring jurisdiction over persons with adequate notice of both the particular controversy and also that their local activities might subject them to suit. My uncertainty as to the reach of the opinion, and my fear that it purports to decide a great deal more than is necessary to dispose of this case, persuade me merely to concur in the judgment.
Justice BRENNAN, concurring and dissenting.
I join Parts I-III of the Court’s opinion. I fully agree that the minimum-contacts analysis developed in International Shoe Co. v. Washington represents a far more sensible construct for the exercise of state court jurisdiction than the patchwork of legal and factual fictions that has been generated from the decision in Pennoyer v. Neff. It is precisely because the inquiry into minimum contacts is now of such overriding importance, however, that I must respectfully dissent from Part IV of the Court’s opinion.…
… While evidence derived through discovery might satisfy me that minimum contacts are lacking in a given case, I am convinced that as a general rule a state forum has jurisdiction to adjudicate a shareholder derivative action centering on the conduct and policies of the directors and officers of a corporation chartered by that State. Unlike the Court, I therefore would not foreclose Delaware from asserting jurisdiction over appellants were it persuaded to do so on the basis of minimum contacts.
It is well settled that a derivative lawsuit as presented here does not inure primarily to the benefit of the named plaintiff. Rather, the primary beneficiaries are the corporation and its owners, the shareholders. “The cause of action which such a plaintiff brings before the court is not his own but the corporation’s.… Such a plaintiff may represent an important public and stockholder interest in bringing faithless managers to book.”
Viewed in this light, the chartering State has an unusually powerful interest in insuring the availability of a convenient forum for litigating claims involving a possible multiplicity of defendant fiduciaries and for vindicating the State’s substantive policies regarding the management of its domestic corporations. I believe that our cases fairly establish that the State’s valid substantive interests are important considerations in assessing whether it constitutionally may claim jurisdiction over a given cause of action.
In this instance, Delaware can point to at least three interrelated public policies that are furthered by its assertion of jurisdiction. First, the State has a substantial interest in providing restitution for its local corporations that allegedly have been victimized by fiduciary misconduct, even if the managerial decisions occurred outside the State.… I, of course, am not suggesting that Delaware’s varied interests would justify its acceptance of jurisdiction over any transaction touching upon the affairs of its domestic corporations. But a derivative action which raises allegations of abuses of the basic management of an institution whose existence is created by the State and whose powers and duties are defined by state law fundamentally implicates the public policies of that forum.
To be sure, the Court is not blind to these considerations. It notes that the State’s interests “may support the application of Delaware law to resolve any controversy over appellants’ actions in their capacities as officers and directors.” But this, the Court argues, pertains to choice of law, not jurisdiction. I recognize that the jurisdictional and choice-of-law inquiries are not identical. Hanson v. Denckla. But I would not compartmentalize thinking in this area quite so rigidly as it seems to me the Court does today, for both inquiries “are often closely related and to a substantial degree depend upon similar considerations.” Id. (Black, J. dissenting). In either case an important linchpin is the extent of contacts between the controversy, the parties, and the forum state. While constitutional limitations on the choice of law are by no means settled, see, e.g., Home Ins. Co. v. Dick, important considerations certainly include the expectancies of the parties and the fairness of governing the defendants’ acts and behavior by rules of conduct created by a given jurisdiction. See, e.g., Restatement (Second) Choice of Law §6. These same factors bear upon the propriety of a State’s exercising jurisdiction over a legal dispute. At the minimum, the decision that it is fair to bind a defendant by a State’s laws and rules should prove to be highly relevant to the fairness of permitting that same State to accept jurisdiction for adjudicating the controversy.…
I, therefore, would approach the minimum contacts analysis differently than does the Court. Crucial to me is the fact that appellants voluntarily associated themselves with the State of Delaware, “invoking the benefits and protections of its laws,” Hanson v. Denckla; International Shoe Co. v. Washington, by entering into a long term and fragile relationship with one of its domestic corporations. They thereby elected to assume powers and to undertake responsibilities wholly derived from that State’s rules and regulations, and to become eligible for those benefits that Delaware law makes available to its corporations’ officials. E.g., 8 Del. C. §§143 (interest-free loans); 145 (indemnification). While it is possible that countervailing issues of judicial efficiency and the like might clearly favor a different forum, they do not appear on the meager record before us; and, of course, we are concerned solely with “minimum” contacts, not the “best” contacts. I thus do not believe that it is unfair to insist that appellants make themselves available to suit in a competent forum that Delaware might create for vindication of its important public policies directly pertaining to appellants’ fiduciary associations with the State.
Sternberg v. O’Neil
550 A.2d 1105 (Del. 1988)
[The facts of the case can be found in a portion of the opinion excerpted at page 396 supra.]
In the first portion of this opinion, we concluded that GenCorp has expressly consented to the general jurisdiction of the State of Delaware. However, for the purpose of discerning any implied consent to Delaware’s jurisdiction, we will limit our inquiry to GenCorp’s implicit consent to specific jurisdiction in the double derivative action brought by Sternberg. The question which we will address is whether a foreign corporation’s ownership of a Delaware corporate subsidiary, constitutes a due process minimum contact which permits Delaware courts to assert specific jurisdiction over the foreign parent corporation in a double derivative action.
… [W]hether the requisite minimum contacts exist is determined by examining the relationship between the defendant, the forum and the litigation. Shaffer v. Heitner, 433 U.S. at 204. Our analysis of GenCorp’s implied consent to Delaware’s specific jurisdiction in this case must focus, therefore, upon the relationship between GenCorp, Delaware, and Sternberg’s lawsuit.
GenCorp is an Ohio corporation. For more than thirty years, GenCorp has owned 100% of the issued and outstanding shares of RKO General, a Delaware corporation. Sternberg’s action is a double derivative suit. One aspect of the suit alleges mismanagement and breaches of fiduciary duty on the part of the directors of RKO General, the Delaware corporation, resulting in detriment to that corporation and therefore to GenCorp, the sole stockholder of that Delaware corporation. The other aspect of the Sternberg suit alleges mismanagement and breaches of fiduciary duty on the part of the GenCorp directors. Sternberg’s complaint alleges that as a result of the breaches of fiduciary duty by the directors and officers of each of the corporations, RKO General has lost its radio and television broadcast licenses or the value thereof, to the detriment of both GenCorp and RKO General.
We must decide whether or not Delaware has specific jurisdiction to hear this controversy. The Court of Chancery concluded that GenCorp’s ownership of a Delaware subsidiary was an insufficient contact with this State to establish a basis for personal jurisdiction.… The Court of Chancery ruled that Delaware had no authority to exercise in personam jurisdiction over GenCorp and that since GenCorp was an indispensable party, the entire case must be dismissed. On appeal, GenCorp argues that this conclusion was correct and is mandated by the holding in Shaffer.
[The Court discusses the facts and holding of Shaffer.]
… As one legal scholar has observed “whatever its nuances, the obvious impact of Shaffer is to limit jurisdiction where the property of a non-resident is seized in order to provide a basis for prosecuting an unrelated claim.” Lilly, Jurisdiction over Domestic and Alien Defendants, 69 Va. L. Rev. 85, 98 (1983).
One of the first in rem actions to come before this Court after Shaffer involved the attachment of a parent-foreign corporation’s stock interest in a wholly owned Delaware subsidiary. Papendick v. Bosch, Del. Supr., 410 A.2d 148 (1979), cert. denied, 446 U.S. 909, 100 S. Ct. 1837 (1980). In Papendick, the litigation involved an alleged breach of contract. The parent foreign corporation had formed a Delaware subsidiary for the purpose of executing the contract which was in dispute. This Court found that a foreign corporation which had formed a Delaware subsidiary for the purpose of implementing a contract, had implicitly consented to the jurisdiction of the Delaware courts in an action brought against both corporations alleging a breach of that contract. Id. at 152. In Papendick, this Court followed the directive of Shaffer to focus upon the defendant, the forum, and the litigation Id.
In Papendick, after distinguishing the facts in Shaffer, this Court acknowledged its obligations to apply the International Shoe minimum contact standard, in accordance with the Shaffer holding. This Court was not only aware that the standards of International Shoe were to be applied, but that “[t]he requirements of International Shoe … must be met as to each defendant over whom a state court exercises jurisdiction.” Rush v. Savchuk. Jurisdiction over a wholly owned Delaware subsidiary does not automatically establish jurisdiction over the parent corporation in any forum. Cf. Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (1925).28 Therefore, both the parent and the subsidiary corporation’s contacts with the forum state must be assessed individually.
The decision of the foreign parent corporation to maintain a direct and continuing connection between Delaware and itself, as the owner of a Delaware subsidiary, was found to be a “minimum contact” of paramount importance in the specific jurisdictional analysis of Papendick:
We do not believe that the International Shoe “minimum contact” due process standards were intended to deprive Delaware courts of jurisdiction by permitting an alien corporation to come into this State to create a Delaware corporate subsidiary for the purpose of implementing a contract under the protection of and pursuant to powers granted by the laws of Delaware, and then be heard to say, in a suit arising from the very contract which the subsidiary was created to implement, that the only contact between it and Delaware is the “mere” ownership of stock of the subsidiary.
The latter point is most significant in applying International Shoe standards. There is a controlling distinction, for present purposes, between the ownership of shares of stock acquired by purchase or grant as in Shaffer, on the one hand, and ownership arising from the purposeful utilization of the benefits and protections of the Delaware Corporation Law in activities related to the underlying cause of action, on the other hand. [The appellee] purposefully availed itself of the benefits and protections of the laws of the State of Delaware for financial gain in activities related to the cause of action [by forming a Delaware subsidiary]. Therein lies the “minimum contact” sufficient to sustain the jurisdiction of Delaware’s courts over [the appellee].
Papendick v. Bosch, 410 A.2d at 152.…
GenCorp seeks to distinguish Papendick on two grounds. First, it alleges that GenCorp did not form RKO General as a subsidiary corporation but instead purchased it after it had already been formed. Second, GenCorp argues that in Papendick, it was appropriate for Delaware to assert jurisdiction over the contract dispute but that in the present case, Delaware has little or no connection with Sternberg’s double derivative action. We do not find either of GenCorp’s arguments to be persuasive.
GenCorp and Delaware
Although GenCorp did not form RKO General as a Delaware subsidiary, it knew at the time of its acquisition that RKO General was incorporated under the laws of the State of Delaware. The record reflects that GenCorp has owned and operated RKO General as a Delaware subsidiary since 1955—more than 30 years. We find that the difference between creating a wholly owned subsidiary in Delaware and purchasing a Delaware subsidiary is a distinction without significance, when the subsidiary is not thereafter reincorporated in another state.
The decision to reincorporate or not to reincorporate in a particular jurisdiction is a deliberate one. The majority stockholders in a parent corporation can vote to change the state of incorporation of the parent, or of a subsidiary, anytime there is a preference to be governed by the laws of another jurisdiction. In fact, after the United States Supreme Court decision in Shaffer, the Delaware corporation involved in that litigation, Greyhound, reincorporated in Arizona. Conversely, it is well known that many corporations have chosen to incorporate or reincorporate in the State of Delaware, although the reasons for the decision have been debated. These competing positions are discussed at length in Macey & Miller, Toward an Interest-Group Theory of Delaware Corporate Law, 65 Tex. L. Rev. 469 (1987).
… Although scholars may debate its motivation, the fact remains that for more than thirty years, GenCorp has made the conscious decision to operate RKO General, its subsidiary, as a Delaware corporation. For more than thirty years, GenCorp has benefited from the protections of the Delaware law in operating RKO General for commercial gain, including the benefits afforded to it directly as a shareholder of a Delaware corporation. We conclude that GenCorp intentionally established and maintained minimum contacts with Delaware by its decision to continue to operate its wholly owned subsidiary, RKO General, as a Delaware corporation.
… Delaware has a legitimate interest in Sternberg’s double derivative claim.… In this case, GenCorp used the benefits and protections of the State of Delaware to maintain a corporate subsidiary. Sternberg’s double derivative suit alleges that the operation of RKO General, the wholly owned Delaware subsidiary, has caused damage to RKO General, GenCorp and the GenCorp stockholders. Delaware has an interest in holding accountable those responsible for the operation of a Delaware corporation. Moreover, just as the internal affairs doctrine mandates the application of Ohio law to the internal operations of GenCorp, that same doctrine mandates the application of Delaware law to the internal operation of RKO General. It is a basic principle of Delaware corporation law that the directors of Delaware corporations are subject to fiduciary duties. Specifically, the Delaware law provides that “in a parent and wholly owned subsidiary context, the directors of the subsidiary are obligated only to manage the affairs of the subsidiary in the best interests of the parent and its shareholders.”
The United States Supreme Court has recognized that “[a] State has an interest in promoting stable relationships among parties involved in the corporation it charters.” CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69 (1987). In particular, the Supreme Court noted that states have “a substantial interest in preventing the corporate form from becoming a shield for unfair business dealing.” Id. 107. In this case, Delaware has a legitimate interest in providing a forum for hearing and applying Delaware law to a double derivative claim related to the internal operation of a wholly owned Delaware subsidiary.… In this case, Delaware also has an interest in providing a forum for efficiently litigating, in a single proceeding, all issues and damages arising out of a double derivative claim alleging harm based upon the foreign parent corporation’s maintenance of a Delaware subsidiary.
In a shareholder’s derivative suit, the shareholder sues on behalf of the corporation for harm done to the corporation. Therefore, the damages recovered in the suit are paid to the corporation. R. Clark, Corporate Law, 639-640 (1986).41 In a single derivative suit the corporation is an indispensable party. The presence of the corporation is required so that it can receive the monetary award in the event of recovery. The same logic has been held to apply in a double derivative suit. The parent corporation is an indispensable party in a double derivative suit against a subsidiary because any recovery for losses suffered by the subsidiary that were being sued upon would go to the parent. Thus, the Court of Chancery was correct in concluding that if it did not have jurisdiction over the parent corporation, the entire double derivative suit must be dismissed.
Delaware has more than an interest in providing a sure forum for shareholder derivative litigation involving the internal affairs of its domestic corporations. Delaware has an obligation to provide such a forum. All “traditional notions of fair play and substantial justice” would be offended if Delaware permitted GenCorp to use its laws to maintain a Delaware subsidiary and then declined to exercise jurisdiction over GenCorp in a double derivative suit, where GenCorp was an indispensable party.
We conclude that fairness and justice permit jurisdiction to be asserted by Delaware under the totality of the circumstances of this case. We find that the exercise of specific jurisdiction in this case is consistent with the requirements of due process. We hold that GenCorp’s ownership of RKO General is a minimum contact with Delaware which is sufficient to support an exercise of specific jurisdiction by the Delaware Courts over GenCorp to hear and decide Sternberg’s double derivative complaint.45 This holding is an independent and alternative basis for reversing the Court of Chancery’s decision not to exercise specific jurisdiction over GenCorp.
Questions and Comments
(1) Shaffer purports to lay down the same standards for in personam and quasi in rem jurisdiction, citing International Shoe as the source for the former standards. But International Shoe required minimum contacts between the defendant and the forum state, while Shaffer requires minimum contacts among the forum state, the litigation, and the defendant. Can the apparent distinction be eliminated?
(2) If, as suggested in note (1) supra, the standards are now the same for in personam and quasi in rem jurisdiction, doesn’t it follow that whenever a long-arm statute, if it existed, would be constitutional, quasi in rem jurisdiction would also be constitutional, and conversely, that if quasi in rem jurisdiction is not constitutional, a long-arm statute would not be either? If that proposition is true, was the Delaware statute that it discussed unconstitutional? On the other hand, if a long-arm statute would not be constitutional under the facts of Shaffer, why did the majority opinion say, “If Delaware perceived its interest in securing jurisdiction over corporate fiduciaries to be as great as Heitner suggests, we would expect it to have enacted a statute more clearly designed to protect that interest”? And why did it say, “Delaware, unlike some States, has not enacted a statute that treats acceptance of a directorship as consent to jurisdiction in the State”? Of what relevance are these observations unless such a statute would be constitutional?
Moreover, wasn’t the whole “implied consent” line of reasoning rejected in International Shoe—the very basis for the Shaffer holding? (“True, some of the decisions holding the corporation amenable to suit have been supported by resort to the legal fiction that it has given its consent to service and suit, consent being implied from its presence in the state through the acts of its authorized agents. But more realistically it may be said that those authorized acts were of such a nature as to justify the fiction.”) Doesn’t it follow that if Delaware could have exacted consent, it can simply declare that it has jurisdiction over the corporate officers (though admittedly it did not do so here)?
Has Delaware solved these problems with the statute and analysis in Sternberg?
(3) As Sternberg suggests, there has been considerable litigation over the effect on jurisdictional analysis of corporate ties. See, e.g., Miller v. Honda Motor Co. Ltd., 779 F.2d 769 (1st Cir. 1985). In Keeton v. Hustler, 465 U.S. 770 n.13 (1984), the Supreme Court made clear that jurisdiction could not be predicated merely upon the fact of corporate ownership. The defendants were Hustler magazine, which was subject to jurisdiction in New Hampshire, and its parent corporation and sole owner, LFP Inc. and Larry Flynt. The fact that the magazine was subject to jurisdiction did not automatically subject the others; as to each party, jurisdiction had to be established. This is sometimes known as the Cannon doctrine from Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333 (1925). Where the parent controls the subsidiary’s forum activities, however, jurisdiction over the parent may be appropriate. See, e.g., Hill by Hill v. Showa Denko, K.K., 425 S.E.2d 609 (W. Va. 1992). See generally Blumberg, The Increasing Recognition of Enterprise Principles in Determining Parent and Subsidiary Corporation Liabilities, 28 Conn. L. Rev. 295 (1996); Alexander, Unlimited Shareholder Liability Through a Procedural Lens, 106 Harv. L. Rev. 387 (1992); Brilmayer & Paisley, Personal Jurisdiction and Substantive Legal Relations: Corporations, Conspiracy, and Agency, 74 Cal. L. Rev. 1 (1986).
(4) In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the Supreme Court had a chance to address the issue of whether courts could base general jurisdiction over a parent corporation on the parent’s control over a subsidiary’s foreign activities. However, the Court ruled upon the dispute without reaching the issue.
(5) Is Sternberg consistent with Shaffer? Can it be explained as consistent on the grounds that the defendant, GenCorp, owned property in Delaware that was “related to” the controversy? Is the test for “related” or specific jurisdiction the same for assets as it is for activities, as discussed in Section B, supra? Was the property in Shaffer any less closely related to the controversy than the property in Sternberg? Is there any more of a Delaware interest in one case than in the other?
In Anderson v. Heartland Oil and Gas, Inc., 819 P.2d 1192 (Kan. 1991), the court upheld jurisdiction over two Colorado defendants whose only connection with the forum was that they were corporate directors and officers of a Kansas corporation. “Jurisdiction over individual officers, directors, and employees of a domestic corporation, for claims that may result in personal liability, is predicated merely upon jurisdiction over the corporation itself.” 819 P.2d at 1200. Note that the rationale—that there is jurisdiction over the corporation—seems potentially quite expansive. Wouldn’t it extend even to directors of a nonresident corporation that happened to be subject to forum jurisdiction for some other reason (e.g., because it had committed a tort or breached a contract there, or because it carried on substantial unrelated business)? Is the rationale consistent with Shaffer v. Heitner?
(6) Footnote 37 of the Shaffer opinion suggests that quasi in rem jurisdiction might yet be available when “no other forum is available to the plaintiff.” When might such circumstances occur? When the defendant is domiciled outside the country? Would that be discriminating against foreign defendants? Should the fact that a claim is barred by the statutes of limitations of other states bring it within the rationale of footnote 37 and allow a forum with otherwise inadequate contacts to assert jurisdiction? Compare footnote 13 in Helicopteros, supra, where the Court declined to adopt the theory of jurisdiction by necessity, which it apparently deemed rather novel.
(7) In Grand Bahama Petroleum Co. v. Canadian Transportation Agencies, 450 F. Supp. 447 (W.D. Wash. 1978), the court upheld garnishment of a bank account in a district having no contacts with the defendant other than the bank account. The case involved a claim for services to a ship, and the court distinguished Shaffer on those grounds. It noted that attachment jurisdiction has traditionally been the keystone of admiralty litigation, that such litigation usually involves people in commerce who are away from home for long periods of time, that admiralty has always been treated separately, as indicated by the separate listing of admiralty in Article III of the Constitution as a basis for federal jurisdiction, and the fact that maritime attachment jurisdiction does not trace back to Pennoyer v. Neff but has its own long history recognizing such attachment.
(8) Some states authorize quasi in rem jurisdiction after Shaffer. In these states, attachment plus notice authorize the court to exercise jurisdiction over a foreign defendant and limit the extent of the judgment to the value of the property attached. This exercise of jurisdiction is limited by the constitutional “minimum contacts” test and largely operates in states that have not extended their long arm to the limits of the Constitution. See, e.g., Cargill Inc. v. Sabine Trading & Shipping Co., 756 F.2d 224 (2d Cir. 1984) (New York’s limited appearance statutes apply in diversity action where the sole basis of jurisdiction was quasi in rem); Campbell v. Landmark First National Bank of Fort Lauderdale, 421 So. 2d 813 (Fla. 1982) (denying motion to quash constructive service in quasi in rem claim seeking imposition of a constructive trust and on accounting); Britton v. Howard Savings Bank, 727 F.2d 315 (1984) (upholding writ of attachment under amended New Jersey statute allowing prejudgment jurisdictional attachment where it conforms with due process).
(9) Traditionally, judgments of courts lacking jurisdiction over either person or property are considered void and thus not entitled to full faith and credit or res judicata effect. After Shaffer, what would be the remedy for a person who suffered a quasi in rem judgment before Shaffer was decided? Would a default judgment based on quasi in rem jurisdiction give rise to actions to recover the property?
(10) In Rush v. Savchuk, 444 U.S. 320 (1980), the Supreme Court applied the logic of Shaffer to invalidate quasi in rem jurisdiction over a defendant on the basis of attachment of the contractual obligation of his insurer to defend and indemnify him in the suit. This so-called Seider jurisdiction (the doctrine was derived from Seider v. Roth, 17 N.Y.2d 111 (N.Y. 1966)) allowed plaintiffs to attach the defendant’s insurance policy, and thus sue, in any state in which the insurance company did business. In Rush, the Court reasoned that because International Shoe’s minimum contacts analysis applied to each defendant separately, and because the contacts of the insurer could not be attributed to the insured, Seider jurisdiction is unconstitutional unless the insured had minimum contacts with the forum.
Rush insinuated that direct action statutes—which allow an injured party to sue the tortfeasor’s insurance company directly instead of proceeding first against the tortfeasor—are constitutional. See 444 U.S. at 331-332. The Court distinguished direct action statutes from Seider jurisdiction on the basis of the fact that the former requires that the nominal defendant (the insured) have minimum contacts with the forum as a prerequisite to bringing suit against the insurer. See id.; compare Watson v. Employers Liability Assurance Corp., 348 U.S. 66 (1954), reproduced supra, which upheld the constitutionality of applying a direct action statute to an out-of-state insurance company.
(11) The Internet creates new forms of intangible property that implicate many difficult jurisdictional issues. This is especially true of Internet domain names, which are the unique verbal names—such as aol.com, mcdonalds.com, and disney.com—that correlate with Web pages and Internet addresses. From 1992 to 1998, during the early years of Internet growth, Network Solutions, Inc. (“NSI”), a private company in Virginia, held a contractual monopoly from the U.S. government to register and maintain domain name information. As a general matter, NSI doled out domain names on a first-come, first-served basis. This led many to engage in “cybersquatting,” a term that refers to the registration of domain names similar or identical to protected trademarks with the intent of intercepting Internet traffic intended for the mark owner or selling the domain name to mark owners for hefty fees. In 1999, Congress enacted the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. §1125 (d), which establishes civil liability for registering a domain name that is identical or confusingly similar to a trademark with the “bad faith intent to profit from that mark.” The ACPA provides that a trademark holder may proceed against the cybersquatter not only in an in personam action, but also, in certain circumstances, against the domain name itself in an in rem action. This raises the questions (a) where is the property located? and (b) is the assertion of in rem jurisdiction over domain names consistent with Shaffer v. Heitner?
Caesars World Inc. v. Caesars-Palace.com, 112 F. Supp. 2d 502 (E.D. Va. 2000), a domain name dispute in Virginia federal court against an out-of-state defendant, addresses these questions in a typical way:
[D]efendant Casares.com argues that under Shaffer v. Heitner, in rem jurisdiction is only constitutional in those circumstances where the res provides minimum contacts sufficient for in personam jurisdiction. The court rejects this argument, and concludes that under Shaffer, there must be minimum contacts to support personal jurisdiction only in those in rem proceedings where the underlying cause of action is unrelated to the property which is located in the forum state. Here the property, that is, the domain name, is not only related to the cause of action but is its entire subject matter. Accordingly, it is unnecessary for minimum contacts to meet personal jurisdiction standards.
To the extent that minimum contacts are required for in rem jurisdiction under Shaffer, moreover, the fact of domain name registration with Network Solutions, Inc., in Virginia supplies that. Given the limited relief afforded by the Act, namely “the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark,” no due process violation occurs here as to defendants personally. The court considers the enactment of the Anticybersquatting Consumer Protection Act a classic case of the distinction between in rem jurisdiction and in personam jurisdiction and a proper and constitutional use of in rem jurisdiction.
In further support of its constitutional challenge, defendant Casares.com argues that a domain name registration is not a proper kind of thing to serve as a res. In this regard, defendant contends, among other things, a domain name is merely data that forms part of an Internet addressing computer protocol and therefore, is not property. Defendant Casares.com contends further that even if it were property, it has no situs in Virginia. The court finds this line of argument unpersuasive. There is no prohibition on a legislative body making something property. Even if a domain name is no more than data, Congress can make data property and assign its place of registration as its situs.
Is Caesar’s World correct to say that “under Shaffer, there must be minimum contacts to support personal jurisdiction only in those in rem proceedings where the underlying cause of action is unrelated to the property which is located in the forum state”? Does the court correct any possible error when it says that “[t]o the extent that minimum contacts are required for in rem jurisdiction under Shaffer, … the fact of domain name registration with Network Solutions, Inc., in Virginia supplies that”? Did the owner of caesarcasino.com purposefully avail itself of the benefits of Virginia when it registered its name on NSI’s Web site? Does it matter whether it knew where NSI’s headquarters were?
1. A “double derivative” action is a derivative action maintained by the shareholders of a parent corporation or holding company on behalf of a subsidiary company. See 13 W. Fletcher, Cyclopedia of the Law of Private Corporations §5977 (rev. perm. ed. Supp. 1988). The wrongs addressed include wrongs directly incurred by the parent corporation as well as those indirectly incurred, because of wrongs suffered by the subsidiary company. Id.
3. A “foreign” corporation is one that is organized under the laws of another state.
4. A party may submit to a given court’s jurisdiction by contractual consent. National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311 (1964). Parties may stipulate to personal jurisdiction. Petrowski v. Hawkeye-Security Insurance Co., 350 U.S. 495 (1956).
5. Currently, all fifty states and the District of Columbia require the appointment of a local agent as a condition for transacting certain kinds of business within their boundaries. See R. Casad, Jurisdiction in Civil Actions §3.02[a](1983).
15. 8 Del. C. §371(b) reads as follows:
(b) No foreign corporation shall do any business in this State, through or by branch offices, agents or representatives located in this State, until it shall have paid to the Secretary of State of this State for the use of this State, $50, and shall have filed in the office of the Secretary of State:
(1) A certificate issued by an authorized officer of the jurisdiction of its incorporation evidencing its corporate existence. If such certificate is in a foreign language, a translation thereof, under oath of the translator, shall be attached thereto.
(2) A statement executed by an authorized officer of each corporation setting forth (i) the name and address of its registered agent in this State, which agent shall be either an individual resident in this State when appointed or another corporation authorized to transact business in this State, (ii) a statement, as of a date not earlier than [six] months prior to the filing date, of the assets and liabilities of the corporation, and (iii) the business it proposes to do in this State and a statement that it is authorized to do that business in the jurisdiction of its incorporation. The statement shall be acknowledged in accordance with [section] 103 of this title.
19. “[W]hen a power actually is conferred by a document, the party executing it takes the risk of the interpretation that may be put upon it by the courts.” Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U.S. at 96.
1. The holding in Hansberry, of course, was that petitioners in that case had not a sufficient common interest with the parties to a prior lawsuit such that a decree against those parties in the prior suit would bind the petitioners. But in the present case there is no question that the named plaintiffs adequately represent the class, and that all members of the class have the same interest in enforcing their claims against the defendant.
2. Petitioner places emphasis on the fact that absent class members might be subject to discovery, counterclaims, cross-claims, or court costs. Petitioner cites no cases involving any such imposition upon plaintiffs, however. We are convinced that such burdens are rarely imposed upon plaintiff class members, and that the disposition of these issues is best left to a case which presents them in a more concrete way.
3. Our holding today is limited to those class actions which seek to bind known plaintiffs concerning claims wholly or predominately for money judgments. We intimate no view concerning other types of class actions, such as those seeking equitable relief. Nor, of course, does our discussion of personal jurisdiction address class actions where the jurisdiction is asserted against a defendant class.
10. It is true that we have stated that the requirement of personal jurisdiction, as applied to state courts, reflects an element of federalism and the character of state sovereignty vis-à-vis other states.… Contrary to the suggestion of Justice Powell, post, at 5-6, our holding today does not alter the requirement that there be “minimum contacts” between the non-resident defendant and the forum state. Rather, our holding deals with how the facts needed to show those “minimum contacts” can be established when a defendant fails to comply with court-ordered discovery. The restriction on state sovereign power described in World-Wide Volkswagen Corp., however, must be seen as ultimately a function of the individual liberty interest preserved by the Due Process Clause. That clause is the only source of the personal jurisdiction requirement and the clause itself makes no mention of federalism concerns. Furthermore, if the federalism concept operated as an independent restriction on the sovereign power of the court, it would not be possible to waive the personal jurisdiction requirement: Individual actions cannot change the powers of sovereignty, although the individual can subject himself to powers from which he may otherwise be protected.
3. Respondents acknowledge that the contract was executed in Peru and not in the United States. Tr. of Oral Arg. 22-23. See App. 79a; Brief for Respondents 3.
5. Respondents’ lack of residential or other contacts with Texas of itself does not defeat otherwise proper jurisdiction. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780 (1984); Calder v. Jones, 465 U.S. 783, 788 (1984). We mention respondents’ lack of contacts merely to show that nothing in the nature of the relationship between respondents and Helicol could possibly enhance Helicol’s contacts with Texas. The harm suffered by respondents did not occur in Texas. Nor is it alleged that any negligence on the part of Helicol took place in Texas.
8. It has been said that when a State exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant’s contacts with the forum, the State is exercising “specific jurisdiction” over the defendant. See Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1144-1164 (1966).
9. When a State exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant’s contacts with the forum, the State has been said to be exercising “general jurisdiction” over the defendant. See Brilmayer, How Contacts Count: Due Process Limitations on State Court Jurisdiction, 1980 S. Ct. Rev. 77, 80-81; Von Mehren & Trautman, 79 Harv. L. Rev., at 1136-1144; Calder v. Jones, 465 U.S., at 786.
10. Because the parties have not argued any relationship between the cause of action and Helicol’s contacts with the State of Texas, we, contrary to the dissent’s implication, assert no “view” with respect to that issue.
The dissent suggests that we have erred in drawing no distinction between controversies that “relate to” a defendant’s contacts with a forum and those that “arise out of” such contacts. Post, at 420. This criticism is somewhat puzzling, for the dissent goes on to urge that, for purposes of determining the constitutional validity of an assertion of specific jurisdiction, there really should be no distinction between the two.
We do not address the validity or consequences of such a distinction because the issue has not been presented in this case. Respondents have made no argument that their cause of action either arose out of or is related to Helicol’s contacts with the state of Texas. Absent any briefing on the issue, we decline to reach the questions (1) whether the terms “arising out of” and “related to” describe different connections between a cause of action and a defendant’s contacts with a forum, and (2) what sort of tie between a cause of action and a defendant’s contacts with a forum is necessary to a determination that either connection exists. Nor do we reach the question whether, if the two types of relationship differ, a forum’s exercise of personal jurisdiction in a situation where the cause of action “relates to,” but does not “arise out of,” the defendant’s contacts with the forum should be analyzed as an assertion of specific jurisdiction.
12. This Court in International Shoe cited Rosenberg for the proposition that “the commission of some single or occasional acts of the corporate agent in a state sufficient to impose an obligation or liability on the corporation has not been thought to confer upon the state authority to enforce it.” 326 U.S., at 318. Arguably, therefore, Rosenberg also stands for the proposition that mere purchases are not a sufficient basis for either general or specific jurisdiction.
Because the case before us is one in which there has been an assertion of general jurisdiction over a foreign defendant, we need not decide the continuing validity of Rosenberg with respect to an assertion of specific jurisdiction, i.e., where the cause of action arises out of or relates to the purchases by the defendant in the forum State.
13. As an alternative to traditional minimum-contacts analysis, respondents suggest that the Court hold that the State of Texas had personal jurisdiction over Helicol under a doctrine of “jurisdiction by necessity.” See Shaffer v. Heitner, 433 U.S. 186, 211, n.37 (1977). We conclude, however, that respondents failed to carry their burden of showing that all three defendants could not be sued together in a single forum. It is not clear from the record, for example, whether suit could have been brought against all three defendants in either Colombia or Peru. We decline to consider adoption of a doctrine of jurisdiction by necessity—a potentially far-reaching modification of existing law—in the absence of a more complete record.
3. Nor do I agree with the Court that the respondents have conceded that their claims are not related to Helicol’s activities within the State of Texas. Although parts of their written and oral arguments before the Court proceed on the assumption that no such relationship exists, other portions suggest just the opposite.…
4. The jury specifically found that “the pilot failed to keep the helicopter under proper control,” that “the helicopter was flown into a treetop fog condition, whereby the vision of the pilot was impaired,” that “such flying was negligence,” and that “such negligence … was a proximate cause of the crash.” On the basis of these findings, Helicol was ordered to pay over $1 million in damages to the respondents.
5. Compare Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1144-1163 (1966), with Brilmayer, How Contacts Count: Due Process Limitations on State Court Jurisdiction, 1980 S. Ct. Rev. 77, 80-88. See also Lilly, Jurisdiction over Domestic and Alien Defendants, 69 Va. L. Rev. 85, 100-101, and n.66 (1983).
This term refers to the fact that a majority of the resort’s clientele comes to the area for a day of skiing and then returns home. In contrast, a “destination” resort is one which attracts skiers for extended periods of time. Camelback has no facilities for lodging guests. It has made available to some local hotels and motels discount ski lift tickets, but it has not participated in the advertising efforts of those establishments.
1. We have said that “[e]ven when the cause of action does not arise out of or relate to the foreign corporation’s activities in the forum State, due process is not offended by a State’s subjecting the corporation to its in personam jurisdiction when there are sufficient contacts between the State and the foreign corporation.” Helicopteros Nacionales de Colombia v. Hall, 466 U.S., at 414. Our only holding supporting that statement, however, involved “regular service of summons upon [the corporation’s] president while he was in [the forum State] acting in that capacity.” See Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 440 (1952). It may be that whatever special rule exists permitting “continuous and systematic” contacts, id., at 438, to support jurisdiction with respect to matters unrelated to activity in the forum, applies only to corporations, which have never fitted comfortably in a jurisdictional regime based primarily upon “de facto power over the defendant’s person.” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). We express no views on these matters—and, for simplicity’s sake, omit reference to this aspect of “contacts”-based jurisdiction in our discussion.
4. Shaffer may have involved a unique state procedure in one respect: Justice Stevens noted that Delaware was the only State that treated the place of incorporation as the situs of corporate stock when both owner and custodian were elsewhere. See 433 U.S., at 218 (opinion concurring in judgment).
5. I find quite unacceptable as a basis for this Court’s decisions Justice Brennan’s view that “the raison d’être of various constitutional doctrines designed to protect out-of-staters such as the Art. IV Privileges and Immunities Clause and the Commerce Clause,” post, at 2125, n.13, entitles this Court to brand as “unfair,” and hence unconstitutional, the refusal of all fifty states “to limit or abandon bases of jurisdiction that have become obsolete,” post, at 2125, n.13. “Due process” (which is the constitutional text at issue here) does not mean that process which shifting majorities of this Court feel to be “due”; but that process which American society—self-interested American society, which expresses its judgments in the laws of self-interested states—has traditionally considered “due.” The notion that the Constitution, through some penumbra emanating from the Privileges and Immunities Clause and the Commerce Clause, establishes this Court as a platonic check upon the society’s greedy adherence to its traditions can only be described as imperious.
2. Our reference in International Shoe to “traditional notions of fair play and substantial justice,” 326 U.S., at 316, meant simply that those concepts are indeed traditional ones, not that, as Justice Scalia’s opinion suggests, see ante, at 2116, 2117, their specific content was to be determined by tradition alone. We recognized that contemporary societal norms must play a role in our analysis. See, e.g., 326 U.S., at 317 (considerations of “reasonable[ness], in the context of our federal system of government”).
7. I do not propose that the “contemporary notions of due process” to be applied are no more than “each Justice’s subjective assessment of what is fair and just.” Ante, at 2117. Rather, the inquiry is guided by our decisions beginning with International Shoe Co. v. Washington, 326 U.S. 310 (1945), and the specific factors that we have developed to ascertain whether a jurisdictional rule comports with “traditional notions of fair play and substantial justice.” This analysis may not be “mechanical or quantitative,” International Shoe, 326 U.S., at 319, but neither is it “freestanding,” ante, at 2119, or dependent on personal whim. Our experience with this approach demonstrates that it is well within our competence to employ.
* Perhaps the adage about hard cases making bad law should be revised to cover easy cases.
1. The driver of the other automobile does not figure in the present litigation.
3. Volkswagen also entered a special appearance in the District Court, but unlike World-Wide and Seaway did not seek review in the Supreme Court of Oklahoma and is not a petitioner here. Both Volkswagen and Audi remain as defendants in the litigation pending before the District Court in Oklahoma.
11. Respondents’ counsel, at oral argument, sought to limit the reach of the foreseeability standard by suggesting that there is something unique about automobiles. It is true that automobiles are uniquely mobile, that they did play a crucial role in the expansion of personal jurisdiction through the fiction of implied consent, e.g., Hess v. Pawloski, and that some of the cases have treated the automobile as a “dangerous instrumentality.” But today, under the regime of International Shoe, we see no difference for jurisdictional purposes between an automobile and any other chattel. The “dangerous instrumentality” concept apparently was never used to support personal jurisdiction; and to the extent it has relevance today it bears not on jurisdiction but on the possible desirability of imposing substantive principles of tort law such as strict liability.
12. As we have noted, petitioners earn no direct revenues from these service centers.
1. In fact, a courtroom just across the state line from a defendant may often be far more convenient for the defendant than a courtroom in a distant corner of his own State.
8. On the basis of this fact the state court inferred that the petitioners derived substantial revenue from goods used in Oklahoma. The inference is not without support. Certainly, were use of goods accepted as a relevant contact a plaintiff would not need to have an exact count of the number of petitioners’ cars that are used in Oklahoma.
9. Moreover, imposing liability in this case would not so undermine certainty as to destroy an automobile dealer’s ability to do business. According jurisdiction does not expand liability except in the marginal case where a plaintiff cannot afford to bring an action except in the plaintiff’s own State. In addition, these petitioners are represented by insurance companies. They not only could, but did, purchase insurance to protect them should they stand trial and lose the case. The costs of insurance no doubt are passed on to customers.
11. For example, I cannot understand the constitutional distinction between selling an item in New Jersey and selling an item in New York expecting it to be used in New Jersey.
18. The Court suggests that this is the critical foreseeability rather than the likelihood that the product will go to the forum State. But the reasoning begs the question. A defendant cannot know if his actions will subject him to jurisdiction in another State until we have declared what the law of jurisdiction is.
19. One consideration that might create some unfairness would be if the choice of forum also imposed on the defendant an unfavorable substantive law which the defendant could justly have assumed would not apply.
7. The court below stated that the presence in California of appellant’s daughter gave appellant the benefit of California’s “police and fire protection, its school system, its hospital services, its recreational facilities, its libraries and museums.… ” But, in the circumstances presented here, these services provided by the State were essentially benefits to the child, not the father, and in any event were not benefits that appellant purposefully sought for himself.
* We have no occasion here to determine whether Congress could, consistent with the Due Process Clause of the Fifth Amendment, authorize federal court personal jurisdiction over alien defendants based on the aggregate of national contacts, rather than on the contacts between the defendant and the State in which the federal court sits. See Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 293-295 (CA3 1985); DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 283 (3d Cir. 1981); see also Born, Reflections on Judicial Jurisdiction in International Cases, 17 Ga. J. Intl. & Comp. L. 1 (1987); Lilly, Jurisdiction over Domestic and Alien Defendants, 69 Va. L. Rev. 85, 127-145 (1983).
2. Cf. D.C. Code §13-423(a)(4) (2001) (providing for specific jurisdiction over defendant who “caus[es] tortious injury in the [forum] by an act or omission outside the [forum]” when, in addition, the defendant “derives substantial revenue from goods used or consumed … in the [forum]”).
3. The court instead relied on N.C. Gen. Stat. Ann. §1-75.4(1)(d), see 199 N.C. App., at 57, which provides for jurisdiction, “whether the claim arises within or without [the] State,” when the defendant “[i]s engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise.” This provision, the North Carolina Supreme Court has held, was “intended to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process.” Dillon v. Numismatic Funding Corp., 291 N.C. 674, 676 (1977).
4. As earlier noted, see supra, at 2853, the North Carolina Court of Appeals invoked the State’s “well-recognized interest in providing a forum in which its citizens are able to seek redress for injuries that they have sustained.” 199 N.C. App., at 68. But “[g]eneral jurisdiction to adjudicate has in [United States] practice never been based on the plaintiff’s relationship to the forum. There is nothing in [our] law comparable to … article 14 of the Civil Code of France (1804) under which the French nationality of the plaintiff is a sufficient ground for jurisdiction.” von Mehren & Trautman 1137; see Clermont & Palmer, Exorbitant Jurisdiction, 58 ME. L. REV. 474, 492-495 (2006) (French law permitting plaintiff-based jurisdiction is rarely invoked in the absence of other supporting factors). When a defendant’s act outside the forum causes injury in the forum, by contrast, a plaintiff’s residence in the forum may strengthen the case for the exercise of specific jurisdiction. See Calder v. Jones, 465 U.S. 783, 788 (1984); von Mehren & Trautman 1167-1173.
5. In the brief they filed in the North Carolina Court of Appeals, respondents stated that petitioners were part of an “integrated world-wide efforts to design, manufacture, market and sell their tires in the United States, including in North Carolina.” App. 485 (emphasis added). See also Brief in Opposition 18. Read in context, that assertion was offered in support of a narrower proposition: The distribution of petitioners’ tires in North Carolina, respondents maintained, demonstrated petitioners’ own “calculated and deliberate efforts to take advantage of the North Carolina market.” App. 485. As already explained, see supra, at 2856-2857, even regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales.
6. At times relevant to this suit, MBUSA was wholly owned by DaimlerChrysler North America Holding Corporation, a Daimler subsidiary.
7. Remarkably, Justice SOTOMAYOR treats specific jurisdiction as though it were barely there. Given the many decades in which specific jurisdiction has flourished, it would be hard to conjure up an example of the “deep injustice” Justice SOTOMAYOR predicts as a consequence of our holding that California is not an all-purpose forum for suits against Daimler. Post, at 771. Justice SOTOMAYOR identifies “the concept of reciprocal fairness” as the “touchstone principle of due process in this field.” Post, at 768 (citing International Shoe, 326 U.S., at 319). She overlooks, however, that in the very passage of International Shoe on which she relies, the Court left no doubt that it was addressing specific—not general—jurisdiction. See id., at 319 (“The exercise of th[e] privilege [of conducting corporate activities within a State] may give rise to obligations, and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.” (emphasis added))
8. As the Court made plain in Goodyear and repeats here, general jurisdiction requires affiliations “so ‘continuous and systematic’ as to render [the foreign corporation] essentially at home in the forum State.” 131 S. Ct., at 2851, i.e., comparable to a domestic enterprise in that State.
9. Agency relationships, we have recognized, may be relevant to the existence of specific jurisdiction. “[T]he corporate personality,” International Shoe Co. v. Washington, 326 U.S. 310 (1945), observed, “is a fiction, although a fiction intended to be acted upon as though it were a fact.” Id., at 316, 66 S. Ct. 154. See generally 1 W. Fletcher, Cyclopedia of the Law of Corporations §30, p. 30 (Supp. 2012-2013) (“A corporation is a distinct legal entity that can act only through its agents.”). As such, a corporation can purposefully avail itself of a forum by directing its agents or distributors to take action there. See, e.g., Asahi, 480 U.S., at 112 (opinion of O’Connor, J.) (defendant’s act of “marketing [a] product through a distributor who has agreed to serve as the sales agent in the forum State” may amount to purposeful availment); International Shoe, 326 U.S., at 318 (“the commission of some single or occasional acts of the corporate agent in a state” may sometimes “be deemed sufficient to render the corporation liable to suit” on related claims). See also Brief for Petitioner 24 (acknowledging that “an agency relationship may be sufficient in some circumstances to give rise to specific jurisdiction”). It does not inevitably follow, however, that similar reasoning applies to general jurisdiction. Cf. Goodyear, 131 S. Ct., at 2855 (faulting analysis that “elided the essential difference between case-specific and all-purpose (general) jurisdiction”).
10. Indeed, plaintiffs do not defend this aspect of the Ninth Circuit’s analysis. See Brief for Respondents 39, n. 18 (“We do not believe that this gloss is particularly helpful.”).
11. The Ninth Circuit’s agency analysis also looked to whether the parent enjoys “the right to substantially control” the subsidiary’s activities. Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 924 (2011). The Court of Appeals found the requisite “control” demonstrated by the General Distributor Agreement between Daimler and MBUSA, which gives Daimler the right to oversee certain of MBUSA’s operations, even though that agreement expressly disavowed the creation of any agency relationship. Thus grounded, the separate inquiry into control hardly curtails the overbreadth of the Ninth Circuit’s agency holding.
12. By addressing this point, Justice SOTOMAYOR asserts, we have strayed from the question on which we granted certiorari to decide an issue not argued below. Post, at 765-766. That assertion is doubly flawed. First, the question on which we granted certiorari, as stated in Daimler’s petition, is “whether it violates due process for a court to exercise general personal jurisdiction over a foreign corporation based solely on the fact that an indirect corporate subsidiary performs services on behalf of the defendant in the forum State.” Pet. for Cert. i. That question fairly encompasses an inquiry into whether, in light of Goodyear, Daimler can be considered at home in California based on MBUSA’s in-state activities. See also this Court’s Rule 14.1(a) (a party’s statement of the question presented “is deemed to comprise every subsidiary question fairly included therein”). Moreover, both in the Ninth Circuit, see, e.g., Brief for Federation of German Industries et al. as Amici Curiae in No. 07-15386(CA9), p. 3, and in this Court, see, e.g., U.S. Brief 13-18; Brief for Chamber of Commerce of United States of America et al. as Amici Curiae 6-23; Brief for Lea Brilmayer as Amica Curiae 10-12, amici in support of Daimler homed in on the insufficiency of Daimler’s California contacts for general jurisdiction purposes. In short, and in light of our pathmarking opinion in Goodyear, we perceive no unfairness in deciding today that California is not an all-purpose forum for claims against Daimler.
13. Plaintiffs emphasize two decisions, Barrow S.S. Co. v. Kane, 170 U.S. 100 (1898), and Tauza v. Susquehanna Coal Co., 220 N.Y. 259 (1917) (Cardozo, J.), both cited in Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952), just after the statement that a corporation’s continuous operations in-state may suffice to establish general jurisdiction. Id., at 446, and n. 6. See also International Shoe, 326 U.S., at 318 (citing Tauza). Barrow and Tauza indeed upheld the exercise of general jurisdiction based on the presence of a local office, which signaled that the corporation was “doing business” in the forum. Perkins’ unadorned citations to these cases, both decided in the era dominated by Pennoyer’s territorial thinking, see supra, at 753-754, should not attract heavy reliance today. See generally Feder, Goodyear, “Home,” and the Uncertain Future of Doing Business Jurisdiction, 63 S.C. L. Rev. 671 (2012) (questioning whether “doing business” should persist as a basis for general jurisdiction).
14. We do not foreclose the possibility that in an exceptional case, see, e.g., Perkins, described supra, at 755-757, and n. 8, a corporation’s operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State. But this case presents no occasion to explore that question, because Daimler’s activities in California plainly do not approach that level. It is one thing to hold a corporation answerable for operations in the forum State, see infra, at 763, quite another to expose it to suit on claims having no connection whatever to the forum State.
15. To clarify in light of Justice SOTOMAYOR’s opinion concurring in the judgment, the general jurisdiction inquiry does not “focu[s] solely on the magnitude of the defendant’s in-state contacts.” Post, at 767. General jurisdiction instead calls for an appraisal of a corporation’s activities in their entirety, nationwide and worldwide. A corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, “at home” would be synonymous with “doing business” tests framed before specific jurisdiction evolved in the United States. See von Mehren & Trautman 1142-1144. Nothing in International Shoe and its progeny suggests that “a particular quantum of local activity” should give a State authority over a “far larger quantum of … activity” having no connection to any in-state activity. Feder, supra, at 694.
Justice SOTOMAYOR would reach the same result, but for a different reason. Rather than concluding that Daimler is not at home in California, Justice SOTOMAYOR would hold that the exercise of general jurisdiction over Daimler would be unreasonable “in the unique circumstances of this case.” Post, at 763. In other words, she favors a resolution fit for this day and case only. True, a multipronged reasonableness check was articulated in Asahi, 480 U.S., at 113-114, but not as a free-floating test. Instead, the check was to be essayed when specific jurisdiction is at issue. See also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-478 (1985). First, a court is to determine whether the connection between the forum and the episode-in-suit could justify the exercise of specific jurisdiction. Then, in a second step, the court is to consider several additional factors to assess the reasonableness of entertaining the case. When a corporation is genuinely at home in the forum State, however, any second-step inquiry would be superfluous.
Justice SOTOMAYOR fears that our holding will “lead to greater unpredictability by radically expanding the scope of jurisdictional discovery.” Post, at 770-771. But it is hard to see why much in the way of discovery would be needed to determine where a corporation is at home. Justice SOTOMAYOR’s proposal to import Asahi’s “reasonableness” check into the general jurisdiction determination, on the other hand, would indeed compound the jurisdictional inquiry. The reasonableness factors identified in Asahi include “the burden on the defendant,” “the interests of the forum State,” “the plaintiff’s interest in obtaining relief,” “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,” “the shared interest of the several States in furthering fundamental substantive social policies,” and, in the international context, “the procedural and substantive policies of other nations whose interests are affected by the assertion of jurisdiction.” 480 U.S., at 113-115 (some internal quotation marks omitted). Imposing such a checklist in cases of general jurisdiction would hardly promote the efficient disposition of an issue that should be resolved expeditiously at the outset of litigation.
24. This category includes true in rem actions and the first type of quasi in rem proceedings. See n.17 [which follows:]
[17. “A judgment in rem affects the interests of all persons in designated property. A judgment quasi in rem affects the interests of particular persons in designated property. The latter is of two types. In one the plaintiff is seeking to secure a pre-existing claim in the subject property and to extinguish or establish the nonexistence of similar interests of particular persons. In the other the plaintiff seeks to apply what he concedes to be the property of the defendant to the satisfaction of a claim against him. Restatement, Judgments, 5-9.” Hanson v. Denckla, 357 U.S. 235, 246 n.12.
As did the Court in Hanson, we will for convenience generally use the term “in rem” in place of “in rem and quasi in rem.”]
28. We do not suggest that these illustrations include all the factors that may affect the decision, nor that the factors we have mentioned are necessarily decisive.
30. Cf. Smit, The Enduring Utility of In Rem Rules: A Lasting Legacy of Pennoyer v. Neff, 48 Brook. L. Rev. 600 (1977). We do not suggest that jurisdictional doctrines other than those discussed in text, such as the particularized rules governing adjudications of status, are inconsistent with the standard of fairness.
36. Once it has been determined by a court of competent jurisdiction that the defendant is a debtor of the plaintiff, there would seem to be no unfairness in allowing an action to realize on that debt in a State where the defendant has property, whether or not that State would have jurisdiction to determine the existence of the debt as an original matter.
37. This case does not raise, and we therefore do not consider, the question whether the presence of a defendant’s property in a State is a sufficient basis for jurisdiction when no other forum is available to the plaintiff.
39. It would not be fruitful for us to re-examine the facts of cases decided on the rationales of Pennoyer and Harris to determine whether jurisdiction might have been sustained under the standard we adopt today. To the extent that prior decisions are inconsistent with this standard, they are overruled.
44. In general, the law of the State of incorporation is held to govern the liabilities of officers or directors to the corporation and its stockholders. See Restatement (Second) of Conflict of Laws §309. But see Cal. Corp. Code §2115 (West Supp. 1976). The rationale for the general rule appears to be based more on the need for a uniform and certain standard to govern the internal affairs of a corporation than on the perceived interest of the state of incorporation.
28.For a discussion of the “Cannon Doctrine,” see Brilmayer & Paisley, Personal Jurisdiction and Substantive Legal Relations: Corporations, Conspiracies and Agency, 74 Calif. L. Rev. 1, 2-8 (1986). For a case distinguishing Cannon, see Waters v. Deutz Corp., Del. Supr., 479 A.2d 273, 275 (1984).
41. The normal derivative suit was “two suits in one: (1) The plaintiff brought a suit in equity against the corporation seeking an order against it; (2) to bring a suit for damages or other legal injury for damages or other relief against some third person who had caused legal injury to the corporation.” R. Clark, Corporate Law, 639-640 (1986).
45. We note that legal scholars have suggested two ways of establishing jurisdiction over the parent based on jurisdiction over the subsidiary:
These two methods for establishing jurisdiction involve showing either that the absent parent instigated the subsidiary’s local activities or that the absent parent and the subsidiary are in fact a single legal entity. The first method we call attribution, the second merger. They are obviously similar in that both involve disregarding separate entity status and shifting responsibility for the subsidiary’s actions onto the parent. The difference between attribution and merger lies in the extent of this shifting of responsibility. Under the attribution theory, only the precise conduct shown to be instigated by the parent is attributed to the parent; the rest of the subsidiary’s actions still pertain only to the subsidiary. The two corporations remain distinct entities. If merger is shown, however, all of the activities of the subsidiary are by definition activities of the parent. Merger requires a greater showing of interconnectedness than attribution, but once shown, its scope is broader. Under both theories, the parent is declared responsible for in-state activities of the subsidiary, but in attribution the responsibility results from causing a separate legal entity to act while in merger there is no separate legal entity at all.
Brilmayer & Paisley, Personal Jurisdiction and Substantive Legal Relations: Corporations, Conspiracies and Agency, 74 Cal. L. Rev. 1, 12 (1986) (emphasis in original). The allegations in Sternberg’s double derivative law suit appear to fit into the attribution method for establishing jurisdiction. In this double derivative action, Sternberg alleges that the parent-subsidiary relationship was simply the vehicle by which GenCorp caused RKO General to carry out its own wishes, which then ultimately led to the injury to GenCorp. The attribution principle is mentioned in a footnote in Burger King Corp., where the United States Supreme Court said,
[W]e have previously noted that when commercial activities are “carried on on behalf of” an out-of-state party, those activities may sometimes be ascribed to the party, … at least where he is a “primary participant[t]” in the enterprise and has acted purposefully in directing those activities.
Burger King Corp. v. Rudzewicz, 471 U.S. at 479 n.22, (citing International Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)); Calder v. Jones, 465 U.S. 783, 790 (1984).
Sternberg also argues that the corporate existence of GenCorp and RKO General should be ignored. In essence, Sternberg argues for the merger method of establishing jurisdiction based upon the findings of the FCC. Cf. Lucas v. Gulf & Western Industries, Inc., 666 F.2d 800, 806 (1981). Our analysis makes it unnecessary to base a finding of specific jurisdiction upon either one of these theories. However, we recognize the merit of both approaches if the facts in a given case support their applicability. See Waters v. Deutz Corp., Del. Supr., 479 A.2d 273 (1984); Japan Petroleum Co. (Nigeria) Ltd. v. Ashland Oil, Inc., 456 F. Supp. 831, 839 (D. Del. 1978); Cf. Akzona, Inc. v. E. I. Du Pont De Nemours & Co., 607 F. Supp. 227, 237-240 (D. Del. 1984).