The Jurisdiction of Courts over Persons and Property
The right of a particular court to adjudicate a claim involves a number of different legal issues. There must be a state (or federal) long-arm statute authorizing the court to assert jurisdiction over the parties; the defendant must receive adequate notice and an opportunity to defend; venue must be appropriate; and the forum must be sufficiently convenient that the litigation avoids dismissal on the grounds of forum non conveniens. Many of these issues have been alluded to, more or less directly, in earlier chapters. And they constitute an important part of an introductory course on civil procedure.
Much of personal jurisdiction centers on assessments of “fairness,” a notoriously spongy notion. Frequently, what seems eminently fair to one person seems outrageously unfair to the next. Some of the institutions undergirding the Supreme Court’s notions of fairness, however, are oddly familiar. We will see below that one of the chief bases for jurisdictional fairness is the consent of the party objecting to forum authority. Consent arguments are commonplace in liberal political theory; philosophers from Locke to Rawls to Nozick have treated it as one of the most convincing justifications for state authority. Another argument traceable to Locke is the claim that an individual subjects him- or herself to state authority (either explicitly or implicitly) by entering into the state’s territory. This theme, too, finds its way into the personal jurisdiction cases, for a defendant whose entrance into the forum and activities there gives rise to the cause of action will be subject to suit. The parallels between political theory and jurisdictional theory are discussed in Brilmayer, Jurisdictional Due Process and Political Theory, 39 U. Fla. L. Rev. 293 (1987); see also Cappalli, Locke as the Key: A Unifying and Coherent Theory of In Personam Jurisdiction, 43 UCLA L. Rev. 99 (1992).
The discussion below is directed toward the constitutional limitations on exercising long-arm jurisdiction over a case that has attenuated connections with the forum. That is, primarily, a question of due process. At one time, due process limitations were satisfied through the expedient of serving process within the forum state’s territory. Pennoyer v. Neff, 95 U.S. 714 (1877). Another alternative was to obtain jurisdiction by attaching the defendant’s local property. Harris v. Balk, 198 U.S. 215 (1905). The conceptual basis for assertions of state court jurisdiction was drastically rewritten in International Shoe Co. v. Washington, 326 U.S. 310 (1945), which stated that assertions of jurisdiction are constitutional where they are based upon “minimum contacts” adequate to establish “fair play and substantial justice.” This standard, as we will see, has hardly been self-explanatory.
The first basis for jurisdiction that we will examine—the defendant’s consent or waiver of right to object—has not changed very substantially over the historical development of the due process clause. In other respects, however, we’ve come a long way since the days of Pennoyer and Balk.
A. Consent and Waiver
When parties enter into contracts with forum-selection clauses that state that the parties agree that suit either may or must be brought in the courts of a particular state, that state may exercise personal jurisdiction over the parties. In this case, the parties are deemed to have explicitly consented to the court’s jurisdiction. Forum-selection clauses are treated in Chapter 9. Here we discuss other consent-based rationales for the exercise of personal jurisdiction over the parties.
Sternberg v. O’Neil
550 A.2d 1105 (Del. 1988)
The appellant, Richard Sternberg (“Sternberg”), brought a double derivative suit1 against GenCorp Inc. (“GenCorp”), its wholly owned subsidiary, RKO General, Inc. (“RKO General”), and certain past and present officers and directors of both corporations. GenCorp is an Ohio corporation qualified to do business in Delaware under 8 Del. C. §371. RKO General is a Delaware corporation. The Court of Chancery found “that the complaint does not allege a constitutionally permissible basis for the assertion of personal jurisdiction over either GenCorp or those individual defendants who are not directors of RKO General.” The Court of Chancery also found that GenCorp was an indispensable party. It, therefore, held that “the complaint must be dismissed as to all defendants.”
On appeal, we conclude on two bases, that the Court of Chancery erred, as a matter of law, when it determined that it lacked personal jurisdiction over GenCorp. First, when GenCorp registered to do business in Delaware and appointed an agent in Delaware to receive service of process, it consented to the general jurisdiction of Delaware courts. Second, we hold alternatively, that GenCorp’s ownership of a Delaware corporation, whose alleged mismanagement is the subject of the double derivative suit, constitutes a “minimum contact” with Delaware which satisfies due process and enables Delaware courts to exercise specific personal jurisdiction over GenCorp in this matter. Therefore, we reverse the Court of Chancery’s decision to dismiss the complaint as to GenCorp. However, we affirm the dismissal of the complaint as to the individual nonresident defendants, who are not directors of RKO General.
GenCorp, an Ohio corporation, has its principal place of business in Akron, Ohio, and was known as The General Tire & Rubber Company until 1984 when it changed its name. GenCorp is qualified to conduct business in Delaware as a foreign corporation. RKO General, a Delaware corporation, has its principal place of business in New York, New York. All of RKO General’s common stock has been owned by GenCorp since it was acquired in 1955. Sternberg is a shareholder of GenCorp.
Sternberg’s complaint in the Court of Chancery alleged, inter alia, that the directors and officers of RKO General and GenCorp breached their fiduciary duties to the GenCorp shareholders when they made numerous false and misleading statements and omissions to the Federal Communications Commission (“FCC”) about an investigation of GenCorp by the Securities and Exchange Commission (“SEC”).… Sternberg’s double derivative claim is premised upon his allegation that the individual defendants, officers and directors of GenCorp and RKO General, failed to manage the affairs of GenCorp and RKO General in a “fair, careful and prudent manner” and that such failure constitutes a breach of their fiduciary duties.
General Jurisdiction and Consent
The first question that we must address is whether Delaware courts may assert general personal jurisdiction over a foreign corporation3 upon the basis of that corporation’s qualification to do business in Delaware and its appointment of an agent to receive service of process in Delaware pursuant to a registration statute. If we determine that such registration can constitute consent to the general jurisdiction of the Delaware courts, we must then analyze the constitutional validity of that consent. Although parties may not waive subject matter jurisdiction, they may waive personal jurisdiction. Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982). Therefore, consent has been recognized as a basis for the exercise of general personal jurisdiction. In fact, “[a] variety of legal arrangements have been taken to represent express or implied consent to the personal jurisdiction of the Court.” Id.4
EXPRESS STATUTORY CONSENT
Express consent has been found to be a basis for jurisdiction when a foreign corporation appoints an agent for service of process.5 See Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 170-171 (1939); Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93, 95 (1917). In Pennsylvania Fire Ins. Co., the United States Supreme Court ruled that a foreign corporation, which authorizes an agent to receive service of process in compliance with the requirements of a state registration statute, has consented to the exercise of general personal jurisdiction in that state. The unanimous opinion, written by Justice Holmes, held that Missouri could constitutionally exercise general jurisdiction over the defendant foreign corporation, and “not deprive the defendant of due process,” even though its only apparent contact with Missouri was its designation of the Missouri Superintendent of Insurance as its registered agent. Id.
Implied consent has also been found to be a basis for jurisdiction over a foreign corporation. International Shoe Co. v. Washington, 326 U.S. 310 (1945). In fact, the Supreme Court’s decision in International Shoe has become a landmark case because it established the modern doctrine of in personam jurisdiction by implied consent for state courts over foreign corporations (and non-resident defendants) when it held that:
due process requires only that in order to subject a defendant to a judgment in personam, if he not be present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”
Id. at 316 (emphasis added). As a result of International Shoe, “long arm” statutes have been passed in every state. These statutes are legislative enactments describing those contacts between the forum and the defendant by which the nonresident defendant has implicitly consented to the exercise of personal jurisdiction by the courts of the forum state.
QUESTIONS RAISED BY INTERNATIONAL SHOE
It would appear that the due process holdings of Pennsylvania Fire Ins. Co. (express consent by registration) and International Shoe (implied consent by minimum contact) complement one another and are neither inconsistent nor mutually exclusive. However, many legal scholars are of the view that the “due process” basis for the Pennsylvania Fire Ins. Co. decision (statutory consent in the absence of any other contact) would no longer be viable under the “due process” standards of International Shoe and its progeny (requiring minimum contacts). See, e.g., Walker, Foreign Corporation Laws: A Current Account, 47 N.C. L. Rev. 733, 734-738 (1969); Brilmayer, Haverkamp, Logan, Lynch, Neuwirth & O’Brien, A General Look at General Jurisdiction, 66 Tex. L. Rev. 721, 758-759 (1988). The United States Supreme Court has not directly examined its holding in Pennsylvania Fire Ins. Co., since its decision in International Shoe. The state and federal courts that have examined the due process basis for the holding in Pennsylvania Fire Ins. Co. in light of International Shoe are divided as to whether statutory registration can operate as an express consent to personal jurisdiction in the absence of “minimum contacts.” Thus, according to one scholar “the law regarding out-of-state claims against a foreign corporation is in disarray.” Hill, Choice of Law and Jurisdiction in the Supreme Court, 81 Colum. L. Rev. 960, 982 (1981).
The debate about the continued viability of the holding in Pennsylvania Fire Ins. Co. after International Shoe is now before this Court. Sternberg argues that GenCorp., by qualifying to do business in Delaware as a foreign corporation, and by appointing an agent for service of process, has expressly consented to the general jurisdiction of the Delaware courts. GenCorp argues that, independent of its compliance with the Delaware qualification statute, the extent of its consent, if any, to the jurisdiction of Delaware’s courts, must be examined in light of the International Shoe due process “minimum contact” requirements.
EXPRESS STATUTORY CONSENT TO JURISDICTION AND DUE PROCESS
We are of the opinion that express consent is a valid basis for the exercise of general jurisdiction in the absence of any other basis for the exercise of jurisdiction, i.e., “minimum contacts.” In particular, we are of the view that after International Shoe, a state still has power to exercise general judicial jurisdiction over a foreign corporation which has expressly consented to the exercise of such jurisdiction.
Not long after its decision in International Shoe, the United States Supreme Court upheld the constitutional validity of an exercise of in personam general jurisdiction with respect to a claim unrelated to the foreign corporation defendant’s forum activity. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952). The Court of Chancery relied upon a portion of the Perkins decision which stated:
The corporate activities of a foreign corporation which, under state statute, make it necessary for it to secure a license and to designate a statutory agent upon whom process may be served provide a helpful but not a conclusive test.
The context of this quoted language was a search for “minimum contacts” which would support the legal fiction of implied consent to jurisdiction. It was necessary for the Perkins Court to conduct a minimum contact analysis before it could find an implied consent to the general jurisdiction of Ohio because the foreign corporation was not qualified in Ohio and had not appointed an agent for service of process. Nevertheless, Perkins reaffirmed the principle that there would have been no need to search for minimum contacts to support an implied consent to jurisdiction, if express consent had been given:
Today if an authorized representative of a foreign corporation be physically present in the state of the forum and be there engaged in activities appropriate to accepting service and receiving notice on its behalf, we recognize that there is no unfairness in subjecting that corporation to the jurisdiction of the courts of that state through such service of process upon that representative.
Perkins v. Benguet Consol. Mining Co., 342 U.S. at 444.
The United States Supreme Court continued to acknowledge that the due process considerations are different when state court jurisdiction is based on implied consent and when such jurisdiction is based on express consent in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). When jurisdiction is based on implied consent, “[t]he Due Process Clause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’” Id. at 471-472 (citing International Shoe Co. v. Washington, 326 U.S. at 319). However, immediately after stating this general proposition in Burger King Corp., the Court reiterated its longstanding position that the personal jurisdiction requirement is a waivable right. Burger King, supra at 472 n.14. Therefore, the Court held that “[w]here a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there,” due process is satisfied if the defendant has minimum contacts with the forum. Id. at 472 (emphasis added). Thus, in Burger King Corp., as in Perkins, the Supreme Court found that in the absence of express consent, due process requires minimum contacts for a finding of implied consent to a forum’s jurisdiction. Conversely, due process is satisfied by express consent, since express consent constitutes a waiver of all other personal jurisdiction requirements.
STATUTORY CONSENT REMAINS A VALID BASIS FOR JURISDICTION
We also find continuing support for the recognition of statutory consent as a basis for general jurisdiction in the Supreme Court’s very recent decision in Bendix Autolite Corp. v. Midwesco Enterprises, 486 U.S. 888 (1988). The issue in Bendix Autolite Corp., as in Perkins, involved an unregistered foreign corporation and an attempted assertion of jurisdiction over the foreign corporation by the state of Ohio. In Bendix Autolite Corp., the Court appeared to accept the rationale, explicitly stated in the Ohio statute, that the appointment of an agent for service of process would operate as a consent to general jurisdiction in any cause of action, “including those in which it did not have minimum contacts necessary for supporting personal jurisdiction,” without offending the requirements of due process. Id. at 892. In a preamble to its ultimate holding, the Court stated:
[D]esignation of an agent subjects the foreign corporation to the general jurisdiction of the Ohio courts in matters to which Ohio’s tenuous relation would not otherwise extend. The Ohio statutory scheme thus forces a corporation to choose between exposure to the general jurisdiction of Ohio courts or forfeiture of the limitations defense, remaining subject to suit in Ohio and perpetuity. Requiring a foreign corporation to appoint an agent for service in all cases and to defend itself with reference to all transactions, including those in which it did not have the minimum contacts necessary for supporting personal jurisdiction, is a significant burden.
In our opinion, the holdings of the United States Supreme Court which involved foreign corporations, following International Shoe, are entirely consistent with the continued viability of its earlier holding in Pennsylvania Fire Ins. Co. If a foreign corporation has not expressly consented to a state’s jurisdiction by registration, “minimum contacts” with that state can provide a due process basis for finding an implied consent to the state’s jurisdiction.… If a foreign corporation has expressly consented to the jurisdiction of a state by registration, due process is satisfied and an examination of “minimum contacts” to find implied consent is unnecessary.… However, these due process conclusions do not mean that foreign corporations are without any federal constitutional protection from the registration requirements of fifty different states and the District of Columbia.
STATUTORY CONSENT TO JURISDICTION AND THE COMMERCE CLAUSE
In Bendix Autolite Corp., the Court held that “[s]tate interests that are legitimate for equal protection or due process purposes may be insufficient to withstand Commerce Clause scrutiny.” 486 U.S. at 904. Therefore, in the present case, although GenCorp’s consent to the general personal jurisdiction of Delaware courts by qualifying as a foreign corporation satisfies due process, we must also determine if the Delaware statute places an unreasonable burden on interstate commerce.
In Bendix Autolite Corp., the Court was called upon to review an Ohio registration statute which tolled the statute of limitations for any period of time that the foreign corporation was not “present” in the state. To be present in Ohio, a foreign corporation had to appoint an agent for service of process which, by statute, made the corporation subject to the general jurisdiction of the Ohio courts. Thus, the Ohio tolling statute forced a foreign corporation to choose between exposure to the general jurisdiction of the Ohio courts, if it appointed an agent to receive process, and forfeiture of the statute of limitations defense if it did not make the appointment. The Court concluded that the tolling provision placed an undue burden on interstate commerce and thus violated the Commerce Clause. Specifically, the Court found that the burdens imposed on interstate commerce by Ohio’s coercive statutory scheme were not outweighed by Ohio’s interest in protecting its citizens from out-of-state corporations.
It is clear after Bendix Autolite Corp. that any statute which causes a foreign corporation to register and thereby consent to the general jurisdiction of a state, or in the absence of that registration and consent, to be subjected to regulations that are inconsistent with those for domestic corporations, is a burden that violates the federal commerce clause. However, the Delaware statutory scheme contains no coercive penalties or inconsistent regulations for foreign corporations that chose not to register.
The right of an unregistered foreign corporation to defend an action in Delaware and to raise a statute of limitations defense deserves particular attention in view of Bendix Autolite Corp. In Delaware, the statute of limitations continues to run even with respect to foreign corporations that transact business in this State and have not qualified to do business under Section 371. This Court has specifically held that there is no tolling effect on the applicable statute of limitations in any action when the nonresident defendant in the suit is subject to substituted service of process. Substituted service of process on nonqualifying foreign corporations is provided for in 8 Del. C. §382(a). Therefore, a foreign corporation which transacts business in this State and does not qualify to do business under Section 371, still has an absolute right to raise the statute of limitations as a defense in any action. It is clear that, unlike Midwesco in Bendix Autolite Corp., GenCorp faced no Hobson’s choice in the Delaware statutory scheme which caused it to decide to qualify as a foreign correspondent. In fact, GenCorp did not argue that it had been coerced into qualifying as a foreign corporation, even though, following the oral argument in this case, the parties were directed to address the implications for this appeal of the decision of Bendix Autolite Corp.
SCOPE OF GENCORP’S EXPRESS STATUTORY CONSENT
GenCorp qualified as a foreign corporation in Delaware pursuant to 8 Del. C. §371(b).15 Service of process upon a foreign corporation which has qualified under Section 371 is made upon its registered agent. In its final legal memorandum, although GenCorp did not argue that Sections 371 and 376 were coercive, it did contend that these sections “simply provided a method for service of process, giving fair notice to a foreign corporation that an action had been filed against it, but reserving unto that foreign corporation all rights to contest jurisdiction on due process grounds.” GenCorp was also under the impression that Sections 371 and 376 had never been construed to operate as consent to the general jurisdiction of Delaware courts.
However, we have found that similar arguments were rejected by the United States District Court for the District of Delaware more than a decade ago, in D’Angelo v. Petroleos Mexicanas, 378 F. Supp. 1034 (D. Del. 1974), when it had occasion to address the scope of Section 376:
Section 376 does not in [its] terms limit the amenability of service of a qualified corporation to one which does business in Delaware or with respect to a cause of action arising in Delaware. By the generality of its terms, a foreign corporation qualified in Delaware is subject to service of process in Delaware on any transitory cause of action.
Id. at 1039. The District Court held that by qualifying as a foreign corporation, the Mobil Oil Corporation could be served and sued in Delaware on a transitory cause of action
We agree with the Delaware District Court’s interpretation in D’Angelo of the effect of registration as a foreign corporation in Delaware. We find that when GenCorp qualified as a foreign corporation, pursuant to 8 Del. C. §371, and appointed a registered agent for the service of process, pursuant to 8 Del.C. §376, GenCorp consented to the exercise of general jurisdiction by the Courts of Delaware.19 …
Questions and Comments
(1) Not all courts have reached the same conclusion as Sternberg v. O’Neill. See, e.g., Wenche Siemer v. Learjet Acquisitions Corp., 966 F.2d 179, 183 (5th Cir. 1992):
Not only does the mere act of registering an agent not create Learjet’s general business presence in Texas, it also does not act as consent to be hauled into Texas courts on any dispute with any party anywhere concerning any matter. The Texas Business Corporation Act provides that service on a registered foreign corporation may be effected by serving its president, any vice president, or the registered agent of the corporation.… No Texas state court decision has held that this provision acts as a consent to jurisdiction over a corporation in a case such as ours—that is where plaintiffs are non-residents and the defendant is not conducting substantial activity within the state.… [T]he appointment of an agent for process has not been a waiver of its right to due process protection.… In short, a foreign corporation that properly complies with the Texas registration statute only consents to personal jurisdiction where such jurisdiction is constitutionally permissible.
The Third and Eighth Circuits, by contrast, agree with Sternberg and view registration as sufficient basis for subjecting a corporation to general jurisdiction. See Bane v. Netlink, 925 F.2d 637, 640 (3d Cir. 1991); Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1200 (8th Cir. 1990). The Second Restatement appears to agree, stating that the only issue is the interpretive one of whether registration statutes actually give forum courts authority to exercise general jurisdiction. Restatement (Second) of Conflict of Laws §44 cmt. c (1971).
Like Sternberg, most courts that uphold general jurisdiction on the basis of statutory consent rely on the pre-International Shoe case of Pennsylvania Fire Insurance Co. v. Gold Issue Mining and Milling Co., 243 U.S. 93 (1917). In Pennsylvania Fire Insurance, the Court (per Justice Holmes) held that the appointment of an agent in Missouri constituted consent to suits that had no other connection to Missouri, and that such consent satisfied due process. Does this reasoning survive International Shoe’s “minimum contacts” requirement? Does the requirement of statutory consent to general jurisdiction amount to an unconstitutional condition? For analysis of the problem, see Riou, General Jurisdiction over Foreign Corporations: All That Glitters Is Not Gold Issue Mining, 14 Rev. Litig. 741 (1995); Kipp, Inferring Express Consent: The Paradox of Permitting Registration Statutes to Confer General Jurisdiction, 9 Rev. Litig. 1 (1990); Brilmayer et al., A General Look at General Jurisdiction, 66 Tex. L. Rev. 721, 758-759 (1988).
(2) Compare the statutory waiver in Sternberg with jurisdictional waivers in forum-selection clauses, discussed in Chapter 9. When a forum selection clause is incorporated into a contract, it states that the parties consent to have their claims resolved in the courts of a particular jurisdiction. One might think that statutory waivers are more problematic because they provide the basis for exercising general jurisdiction over defendant, whereas forum-selection clauses only provide the basis for a court’s jurisdiction to hear disputes stemming from that contractual relationship. On the other hand, contractual waivers of jurisdiction often involve consumers while statutory waivers involve corporations doing multistate business. See, e.g., Ocepek v. Corporate Transport, Inc., 950 F.2d 556, 560 (8th Cir. 1991) (statutory waiver cases rest on assumption that “companies which do business nationwide can more easily defend themselves in any of those states in which they do business, than individual citizens can bring suit outside their home states, perhaps at great distances”).
(3) If GenCorp did in fact “consent” to jurisdiction in Delaware, then why did it do so? If the court is correct that no coercion is involved in this Delaware statutory scheme, then why would a defendant unilaterally subject itself to this burden? Given that the statute cited in footnote 15 states that “[n]o foreign corporation shall do any business in this State … until it shall have filed … a statement … setting forth the name and address of its registered agent,” how can the court claim that no compulsion is involved? Is the Delaware Supreme Court really counseling foreign corporations to ignore such statutes? Isn’t it penalizing law-abiding corporations that meet registration requirements all along? If you were a Delaware resident, wouldn’t you want your court to encourage foreign corporations to register, to make them easier to locate and to serve process upon?
(4) Portions of the omitted section of the opinion, discussing the distinction between general and specific jurisdiction and jurisdiction based on the corporate parent/subsidiary relationship, are discussed at page 498 infra.
(5) When did GenCorp file the statement appointing an agent? If its filing was prior to the judicial decision holding such an appointment a consent to general jurisdiction, then is this fair?
(6) What interest of Delaware’s is served by asserting jurisdiction over this dispute?
(7) If an unregistered corporation wishes to file suit in Delaware, then according to the statute cited in the opinion, 8 Del. C. §383(a), it must at that point comply with the registration rules, pay back taxes and franchise fees, and so forth. Presumably, the consent to general jurisdiction then becomes effective. Is it retroactive, that is, can the corporation now be sued for an earlier cause of action? And how far into the future does the consent extend? Is it irrevocable? Doesn’t this provision essentially coerce a defendant into consenting to general jurisdiction?
(9) If in fact the consent to jurisdiction was purely gratuitous—there was no benefit that the state withheld from corporations that did not consent but granted to those that did—then should the consent be invalid for a lack of “consideration”? See generally Brilmayer, Consent, Contract, and Territory, 74 Minn. L. Rev. 1 (1989), discussing consent as a basis for personal jurisdiction in comparison with consent as a basis for political obligation.
Phillips Petroleum Co. v. Shutts
472 U.S. 797 (1985)
[The facts of the case can be found in a portion of the opinion excerpted at page 326 supra.]
Reduced to its essentials, petitioner’s argument is that unless out-of-state plaintiffs affirmatively consent, the Kansas courts may not exert jurisdiction over their claims. Petitioner claims that failure to execute and return the “request for exclusion” provided with the class notice cannot constitute consent of the out-of-state plaintiffs; thus Kansas courts may exercise jurisdiction over these plaintiffs only if the plaintiffs possess the sufficient “minimum contacts” with Kansas as that term is used in cases involving personal jurisdiction over out-of-state defendants. E.g., International Shoe Co. v. Washington, 326 U.S. 310 (1945); Shaffer v. Heitner, 433 U.S. 186 (1977); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). Since Kansas had no prelitigation contact with many of the plaintiffs and leases involved, petitioner claims that Kansas has exceeded its jurisdictional reach and thereby violated the due process rights of the absent plaintiffs.
Although the cases like Shaffer and Woodson which petitioner relies on for a minimum contacts requirement all dealt with out-of-state defendants or parties in the procedural posture of a defendant, cf. New York Life Ins. Co. v. Dunlevy, 241 U.S. 518 (1916); Estin v. Estin, 334 U.S. 541 (1948), petitioner claims that the same analysis must apply to absent class-action plaintiffs. In this regard petitioner correctly points out that a chose in action is a constitutionally recognized property interest possessed by each of the plaintiffs. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950). An adverse judgment by Kansas courts in this case may extinguish the chose in action forever through res judicata. Such an adverse judgment, petitioner claims, would be every bit as onerous to an absent plaintiff as an adverse judgment on the merits would be to a defendant. Thus, the same due process protections should apply to absent plaintiffs: Kansas should not be able to exert jurisdiction over the plaintiffs’ claims unless the plaintiffs have sufficient minimum contacts with Kansas.
We think petitioner’s premise is in error. The burdens placed by a State upon an absent class-action plaintiff are not of the same order or magnitude as those it places upon an absent defendant. An out-of-state defendant summoned by a plaintiff is faced with the full powers of the forum State to render judgment against it. The defendant must generally hire counsel and travel to the forum to defend itself from the plaintiff’s claim, or suffer a default judgment. The defendant may be forced to participate in extended and often costly discovery, and will be forced to respond in damages or to comply with some other form of remedy imposed by the court should it lose the suit. The defendant may also face liability for court costs and attorney’s fees. These burdens are substantial, and the minimum contacts requirement of the Due Process Clause prevents the forum State from unfairly imposing them upon the defendant.
A class-action plaintiff, however, is in quite a different posture. The Court noted this difference in Hansberry v. Lee, 311 U.S. 32, 40-41 (1940), which explained that a “class” or “representative” suit was an exception to the rule that one could not be bound by judgment in personam unless one was made fully a party in the traditional sense. Ibid., citing Pennoyer v. Neff, 95 U.S. 714 (1878). As the Court pointed out in Hansberry, the class action was an invention of equity to enable it to proceed to a decree in suits where the number of those interested in the litigation was too great to permit joinder. The absent parties would be bound by the decree so long as the named parties adequately represented the absent class and the prosecution of the litigation was within the common interest.1 311 U.S., at 41.
Modern plaintiff class actions follow the same goals, permitting litigation of a suit involving common questions when there are too many plaintiffs for proper joinder. Class actions also may permit the plaintiffs to pool claims which would be uneconomical to litigate individually. For example, this lawsuit involves claims averaging about $100 per plaintiff; most of the plaintiffs would have no realistic day in court if a class action were not available.
In sharp contrast to the predicament of a defendant haled into an out-of-state forum, the plaintiffs in this suit are not haled anywhere to defend themselves upon pain of a default judgment.
A plaintiff class in Kansas and numerous other jurisdictions cannot first be certified unless the judge, with the aid of the named plaintiffs and defendants, conducts an inquiry into the common nature of the named plaintiffs’ and the absent plaintiffs’ claims, the adequacy of representation, the jurisdiction possessed over the class, and any other matters that will bear upon proper representation of the absent plaintiffs’ interest. See, e.g., Kan. Stat. Ann. §60-223 (1983); Fed. Rule Civ. Proc. 23. Unlike a defendant in a civil suit, a class-action plaintiff is not required to fend for himself. See Kan. Stat. Ann. §60-223(d) (1983). The court and named plaintiffs protect his interests. Indeed, the class-action defendant itself has a great interest in ensuring that the absent plaintiffs’ claims are properly before the forum. In this case, for example, the defendant sought to avoid class certification by alleging that the absent plaintiffs would not be adequately represented and were not amenable to jurisdiction. See Phillips Petroleum v. Duckworth, No. 82-54608 (Kan., June 28, 1982).
The concern of the typical class-action rules for the absent plaintiffs is manifested in other ways. Most jurisdictions, including Kansas, require that a class action, once certified, may not be dismissed or compromised without the approval of the court. In many jurisdictions such as Kansas the court may amend the pleadings to ensure that all sections of the class are represented adequately. Kan. Stat. Ann. §60-223(d) (1983); see also, e.g., Fed. Rule Civ. Proc. 23(d).
Besides this continuing solicitude for their rights, absent plaintiff class members are not subject to other burdens imposed upon defendants. They need not hire counsel or appear. They are almost never subject to counter-claims or cross-claims, or liability for fees or costs.2 Absent plaintiff class members are not subject to coercive or punitive remedies. Nor will an adverse judgment typically bind an absent plaintiff for any damages, although a valid adverse judgment may extinguish any of the plaintiff’s claims which were litigated.
Unlike a defendant in a normal civil suit, an absent class-action plaintiff is not required to do anything. He may sit back and allow the litigation to run its course, content in knowing that there are safeguards provided for his protection. In most class actions an absent plaintiff is provided at least with an opportunity to “opt out” of the class, and if he takes advantage of that opportunity he is removed from the litigation entirely. This was true of the Kansas proceedings in this case. The Kansas procedure provided for the mailing of a notice to each class member by first-class mail. The notice, as we have previously indicated, described the action and informed the class member that he could appear in person or by counsel, in default of which he would be represented by the named plaintiffs and their attorneys. The notice further stated that class members would be included in the class and bound by judgment unless they “opted out” by executing and returning a “request for exclusion” that was included in the notice.
Petitioner contends, however, that the “opt out” procedure provided by Kansas is not good enough, and that an “opt in” procedure is required to satisfy the Due Process Clause of the Fourteenth Amendment. Insofar as plaintiffs who have no minimum contacts with the forum State are concerned, an “opt in” provision would require that each class member affirmatively consent to his inclusion within the class.
Because States place fewer burdens upon absent class plaintiffs than they do upon absent defendants in nonclass suits, the Due Process Clause need not and does not afford the former as much protection from state-court jurisdiction as it does the latter. The Fourteenth Amendment does protect “persons,” not “defendants,” however, so absent plaintiffs as well as absent defendants are entitled to some protection from the jurisdiction of a forum State which seeks to adjudicate their claims. In this case we hold that a forum State may exercise jurisdiction over the claim of an absent class-action plaintiff, even though that plaintiff may not possess the minimum contacts with the forum which would support personal jurisdiction over a defendant. If the forum State wishes to bind an absent plaintiff concerning a claim for money damages or similar relief at law,3 it must provide minimal procedural due process protection. The plaintiff must receive notice plus an opportunity to be heard and participate in the litigation, whether in person or through counsel. The notice must be the best practicable, “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane, 339 U.S., at 314-315; cf. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 174-175 (1974). The notice should describe the action and the plaintiffs’ rights in it. Additionally, we hold that due process requires at a minimum that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an “opt out” or “request for exclusion” form to the court. Finally, the Due Process Clause of course requires that the named plaintiff at all times adequately represent the interests of the absent class members. Hansberry, 311 U.S., at 42-43, 45.
We reject petitioner’s contention that the Due Process Clause of the Fourteenth Amendment requires that absent plaintiffs affirmatively “opt in” to the class, rather than be deemed members of the class if they do not “opt out.” We think that such a contention is supported by little, if any precedent, and that it ignores the differences between class-action plaintiffs, on the one hand, and defendants in nonclass civil suits on the other. Any plaintiff may consent to jurisdiction. Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984). The essential question, then, is how stringent the requirement for a showing of consent will be.
We think that the procedure followed by Kansas, where a fully descriptive notice is sent first-class mail to each class member, with an explanation of the right to “opt out,” satisfies due process. Requiring a plaintiff to affirmatively request inclusion would probably impede the prosecution of those class actions involving an aggregation of small individual claims, where a large number of claims are required to make it economical to bring suit. See, e.g., Eisen, supra, at 161. The plaintiff’s claim may be so small, or the plaintiff so unfamiliar with the law, that he would not file suit individually, nor would he affirmatively request inclusion in the class if such a request were required by the Constitution. If, on the other hand, the plaintiff’s claim is sufficiently large or important that he wishes to litigate it on his own, he will likely have retained an attorney or have thought about filing suit, and should be fully capable of exercising his right to “opt out.”
In this case over 3,400 members of the potential class did “opt out,” which belies the contention that “opt out” procedures result in guaranteed jurisdiction by inertia. Another 1,500 were excluded because the notice and “opt out” form was undeliverable. We think that such results show that the “opt out” procedure provided by Kansas is by no means pro forma, and that the Constitution does not require more to protect what must be the somewhat rare species of class member who is unwilling to execute an “opt out” form, but whose claim is nonetheless so important that he cannot be presumed to consent to being a member of the class by his failure to do so. Petitioner’s “opt in” requirement would require the invalidation of scores of state statutes and of the class-action provision of the Federal Rules of Civil Procedure, and for the reasons stated we do not think that the Constitution requires the State to sacrifice the obvious advantages in judicial efficiency resulting from the “opt out” approach for the protection of the rara avis portrayed by petitioner.
We therefore hold that the protection afforded the plaintiff class members by the Kansas statute satisfies the Due Process Clause. The interests of the absent plaintiffs are sufficiently protected by the forum State when those plaintiffs are provided with a request for exclusion that can be returned within a reasonable time to the court. See Insurance Corp. of Ireland, 456 U.S., at 702-703, and n.10. Both the Kansas trial court and the Supreme Court of Kansas held that the class received adequate representation, and no party disputes that conclusion here. We conclude that the Kansas court properly asserted personal jurisdiction over the absent plaintiffs and their claims against petitioner.
Questions and Comments
(1) For an authoritative account by two authors of briefs on the case, see Miller and Crump, Jurisdiction and Choice of Law in Multistate Class Actions after Phillips Petroleum Co. v. Shutts, 96 Yale L.J. 1 (1986).
(2) If none of the plaintiff class members were from Kansas, and none of the leases were signed there or involved property there, should Kansas still be able to entertain this multistate class action? Does Shutts present problems of a race to the courthouse in one state by eager members of the plaintiff’s bar who located a single class member? Should Kansas be allowed to provide local attorneys with business in this way, by imposing upon persons not otherwise subject to its legislative authority a duty to opt out according to the procedures that Kansas law prescribes? What if Kansas class action law provides a contingent fee of 50 percent as to all class members who do not opt out in time? As a general matter, can Kansas simply notify people throughout the nation that unless they object they will be subject to Kansas law? How does this square with the Court’s choice-of-law analysis, page 326 supra? See Kennedy, The Supreme Court Meets the Bride of Frankenstein: Phillips Petroleum Co. v. Shutts and the State Multistate Class Action, 34 U. Kan. L. Rev. 255, 294 (1985). On the other hand, it is arguable in Shutts that there is no choice-of-law problem in applying Kansas “opt out” law to nonresident class members, because their home states probably also have class action rules with “opt out” rather than “opt in” procedures.
(3) Normally, of course, it is not necessary for the plaintiff to consent to jurisdiction, for the plaintiff has chosen the forum (a form of consent in and of itself). Why is plaintiff consent relevant here?
(4) Certain sorts of class actions, of course, do not guarantee class members a right to opt out. See, for example, Fed. R. Civ. P. 23(b)(2), involving class claims for equitable relief. In footnote 3, the Court’s opinion declined to address class actions other than those wholly or predominately for money judgments. What result, then, in a 23(b)(2) action? May a multistate class action proceed even without offering a right to opt out? Or does Shutts suggest instead that the class action is improper because other than in money judgment actions where a right to opt out is provided, jurisdiction over absent class plaintiffs is improper? See Avagliano v. Sumitomo Shoji America, 107 F.R.D. 749 (1987); In re Jackson Lockdown/MCO Cases, 107 F.R.D. 703 (1987); In re Asbestos School Litigation, 620 F. Supp. 873 (E.D. Pa. 1985).
Brown v. Ticor Title Insurance, 982 F.2d 386 (9th Cir. 1992), dealt with a case involving both money damage and injunctive relief; earlier multidistrict litigation had been certified under Fed. R. Civ. P. 23(b)(1) and (b)(2) (as to which no “opt out” right exists) and the question was whether the current plaintiff was bound by res judicata. The court held that Brown might be bound by the earlier action insofar as he requested injunctive relief, but not as to his money damages claim. See also In re Real Estate and Settlement Servs. Antitrust Litig., 869 F.2d 760 (3d Cir. 1989). The Supreme Court initially agreed to hear Brown v. Ticor, but then in a per curiam opinion dismissed the case as moot on the grounds that a settlement had been reached, and because a majority felt that a nonconstitutional basis for decision would have been available but for the res judicata effect of an earlier holding on the scope of Rule 23. 114 S. Ct. 1359 (1994).
(5) If an absent class member does not comply with discovery requests that would bear on whether he or she had minimum contacts with the forum, then may a court hold that jurisdiction exists under Insurance Corp. of Ireland, below?
(6) Would a better solution be to restrict multistate class actions to federal courts? Note that the Class Action Fairness Act of 2005 gave federal courts expanded diversity jurisdiction over class actions with aggregate claims in excess of five million dollars. See 28 U.S.C.A. §1332(d)(2). In addition, federal courts can exercise supplemental jurisdiction over at least some diversity class claims not falling within CAFA’s ambit. Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005).
(7) Is the “consent” in Shutts express consent or implied consent? Is the answer that the consent at issue in Shutts is “real” implied consent rather than fictitious implied consent? Compare the distinction between implied-in-fact and implied-in-law contracts.
Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee
456 U.S. 694 (1982)
Justice WHITE delivered the opinion of the Court.
Rule 37(b), Federal Rules of Civil Procedure, provides that a District Court may impose sanctions for failure to comply with discovery orders. Included among the available sanctions is:
An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order.
The question presented by this case is whether this rule is applicable to facts that form the basis for personal jurisdiction over a defendant. May a District Court, as a sanction for failure to comply with a discovery order directed at establishing jurisdictional facts, proceed on the basis that personal jurisdiction over the recalcitrant party has been established? Petitioners urge that such an application of the Rule would violate Due Process: If a court does not have jurisdiction over a party, then it may not create that jurisdiction by judicial fiat. They contend also that until a court has jurisdiction over a party, that party need not comply with orders of the court; failure to comply, therefore, cannot provide the ground for a sanction. In our view, petitioners are attempting to create a logical conundrum out of a fairly straightforward matter.
[Plaintiff/respondent Compagnie des Bauxites de Guinee (CBG) arranged to obtain various kinds of insurance, including “excess” insurance against business interruption. When such an interruption allegedly occurred and the insurers, including the excess insurers, refused to pay, CBG brought suit. The regular insurer did not contest jurisdiction, but the excess insurers, a group of foreign insurance companies, did. Plaintiff made certain requests for discovery in the action, which was brought in a Pennsylvania federal district court. The excess insurers refused to comply on the grounds that the requests were too burdensome. CBG sought an order to comply, which the district court granted. A series of further moves failed to produce the required material. Finally the district court warned the defendants that it would assume that there was jurisdiction, as a sanction pursuant to Rule 37, unless there was compliance. There was not, and the court entered an order finding in personam jurisdiction.]
The validity of an order of a federal court depends upon that court’s having jurisdiction over both the subject matter and the parties. [The Court discussed the nature of subject matter jurisdiction, including its nonwaivability and the fact that it may be raised sua sponte by the court.]
None of this is true with respect to personal jurisdiction. The requirement that a court have personal jurisdiction flows not from Art. III, but from the Due Process Clause. The personal jurisdiction requirement recognizes and protects an individual liberty interest. It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty.10 Thus, the test for personal jurisdiction requires that “the maintenance of the suit … not offend ‘traditional notions of fair play and substantial justice.’” International Shoe v. Washington, quoting Milliken v. Meyers.
Because the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived. In McDonald v. Mabee, supra, the Court indicated that regardless of the power of the state to serve process, an individual may submit to the jurisdiction of the Court by appearance. A variety of legal arrangements have been taken to represent express or implied consent to the personal jurisdiction of the court. In National Rental v. Szukhent, we stated that “parties to a contract may agree in advance to submit to the jurisdiction of a given court,” and in Petrowski v. Hawkeye-Security Co., the Court upheld the personal jurisdiction of a district court on the basis of a stipulation entered into by the defendant. In addition, lower federal courts have found such consent implicit in agreements to arbitrate. Furthermore, the Court has upheld state procedures which find constructive consent to the personal jurisdiction of the state court in the voluntary use of certain state procedures. Finally, unlike subject matter jurisdiction, which even an appellate court may review sua sponte, under Rule 12(h), Fed. Rules Civ. Proc., “a defense of lack of jurisdiction over the person … is waived” if not timely raised in the answer or a responsive pleading.
In sum, the requirement of personal jurisdiction may be intentionally waived, or for various reasons a defendant may be estopped from raising the issue. These characteristics portray it for what it is—a legal right protecting the individual. The plaintiff’s demonstration of certain historical facts may make clear to the court that it has personal jurisdiction over the defendant as a matter of law—i.e., certain factual showings will have legal consequences—but this is not the only way in which the personal jurisdiction of the court may arise. The actions of the defendant may amount to a legal submission to the jurisdiction of the court, whether voluntary or not.
The expression of legal rights is often subject to certain procedural rules: The failure to follow those rules may well result in a curtailment of the rights. Thus, the failure to enter a timely objection to personal jurisdiction constitutes, under Rule 12(h)(1), a waiver of the objection. A sanction under Rule 37(b)(2)(A) consisting of a finding of personal jurisdiction has precisely the same effect. As a general proposition, the Rule 37 sanction applied to a finding of personal jurisdiction creates no more of a due process problem than the Rule 12 waiver. Although “a court cannot conclude all persons interested by its mere assertion of its own power,” not all rules that establish legal consequences to a party’s own behavior are “mere assertions” of power.
Rule 37(b)(2)(a) itself embodies the standard established in Hammond Packing Co. v. Arkansas, 212 U.S. 322 (1909), for the Due Process limits on such rules. There the Court held that it did not violate due process for a state court to strike the answer and render a default judgment against a defendant who failed to comply with a pretrial discovery order. Such a rule was permissible as an expression of
the undoubted right of the lawmaking power to create a presumption of fact as to the bad faith and untruth of an answer begotten from the suppression of failure to produce the proof ordered.… [T]he preservation of due process was secured by the presumption that the refusal to produce evidence material to the administration of due process was but an admission of the want of merit in the asserted defense.
The situation in Hammond was specifically distinguished from that in Hovey v. Elliot, 167 U.S. 409 (1897), in which the Court held that it did violate due process for a court to take similar action as “punishment” for failure to obey an order to pay into the registry of the court a certain sum of money. Due process is violated only if the behavior of the defendant will not support the Hammond Packing presumption. A proper application of Rule 37(b)(2) will, as a matter of law, support such a presumption. See Société Intérnationale v. Rogers, 357 U.S. 197, 209-213 (1958). If there is no abuse of discretion in the application of the Rule 37 sanction, as we find to be the case here (see §III), then the sanction is nothing more than the invocation of a legal presumption, or what is the same thing, the finding of a constructive waiver.
Petitioners argue that a sanction consisting of a finding of personal jurisdiction differs from all other instances in which a sanction is imposed, including the default judgment in Hammond Packing, because a party need not obey the orders of a court until it is established that the court has personal jurisdiction over that party. If there is no obligation to obey a judicial order, a sanction cannot be applied for the failure to comply. Until the court has established personal jurisdiction, moreover, any assertion of judicial power over the party violates due process.
This argument again assumes that there is something unique about the requirement of personal jurisdiction, which prevents it from being established or waived like other rights. A defendant is always free to ignore the judicial proceedings, risk a default judgment and then challenge that judgment on jurisdictional grounds in a collateral proceeding. By submitting to the jurisdiction of the court for a limited purpose of challenging jurisdiction, the defendant agrees to abide by that court’s determination on the issue of jurisdiction: That decision will be res judicata on that issue in any further proceedings. As demonstrated above, the manner in which the court determines whether it has personal jurisdiction may include a variety of legal rules and presumptions, as well as straightforward factfinding. A particular rule may offend the due process standard of Hammond Packing, but the mere use of procedural rules does not in itself violate the defendant’s due process rights.
[The Court concluded by finding that the sanction imposed by the district court was not an abuse of discretion under the facts of the case.]
Justice POWELL, concurring in the judgment.
In my view the Court’s broadly theoretical decision misapprehends the issues actually presented for decision. Federal courts are courts of limited jurisdiction. Their personal jurisdiction, no less than their subject matter jurisdiction, is subject both to constitutional and to statutory definition. When the applicable limitations on federal jurisdiction are identified, it becomes apparent that the Court’s theory could require a sweeping but largely unexplicated revision of jurisdictional doctrine. This revision could encompass not only the personal jurisdiction of federal courts but “sovereign” limitations on state jurisdiction as identified by World-Wide Volkswagen Corp. v. Woodson. Fair resolution of this case does not require the Court’s broad holding. Accordingly, although I concur in the Court’s judgment, I cannot join its opinion.
Rule 37(b) is not, however, a jurisdictional provision. As recognized by the Court of Appeals, the governing jurisdictional statute remains the long-arm statute of the State of Pennsylvania. In my view the Court fails to make clear the implications of this central fact: that the District Court in this case relied on state law to obtain personal jurisdiction.
As courts of limited jurisdiction, the federal district courts possess no warrant to create jurisdictional law of their own. Under the Rules of Decision Act, 28 U.S.C. §1652, 62 Stat. 944, they must apply state law “except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide.… ” See generally Erie R. Co. v. Tompkins, 304 U.S. 64 (1938). Thus, in the absence of a federal rule or statute establishing a federal basis for the assertion of personal jurisdiction, the personal jurisdiction of the district courts is determined in diversity cases by the law of the forum State.
As a result of the District Court’s dependence on the law of Pennsylvania to establish personal jurisdiction—a dependence mandated by Congress under 28 U.S.C. §1652—its jurisdiction in this case normally would be subject to the same due process limitations as a state court. Thus, the question arises how today’s decision is related to cases restricting the personal jurisdiction of the States.…
Under traditional principles, the due process question in this case is whether “minimum contacts” exist between petitioners and the forum State that would justify the State in exercising personal jurisdiction. By finding that the establishment of minimum contacts is not a prerequisite to the exercise of jurisdiction to impose sanctions under Fed. Rule Civ. Proc. 37, the Court may be understood as finding that “minimum contacts” no longer is a constitutional requirement for the exercise by the state court of personal jurisdiction over an unconsenting defendant. Whenever the Court’s notions of fairness are not offended, jurisdiction apparently may be upheld.
Before today, of course, our cases had linked minimum contacts and fair play as jointly defining the “sovereign” limits on state assertions of personal jurisdiction over unconsenting defendants. See World-Wide Volkswagen Corp. v. Woodson, Hanson v. Denckla. The Court appears to abandon the rationale of these cases in a footnote. See n.10. But it does not address the implications of its action. By eschewing reliance on the concept of minimum contacts as a “sovereign” limitation on the power of States—for, again, it is the State’s long-arm statute that is invoked to obtain personal jurisdiction in the District Court—the Court today effects a potentially substantial change of law. For the first time it defines personal jurisdiction solely by reference to abstract notions of fair play. And, astonishingly to me, it does so in a case in which this rationale for decision was neither argued nor briefed by the parties.
Alternatively, it is possible to read the Court opinion, not as affecting the state jurisdiction, but simply as asserting that Rule 37 of the Federal Rules of Civil Procedure represents a congressionally approved basis for the exercise of personal jurisdiction by a federal district court. On this view Rule 37 vests the federal district courts with authority to take jurisdiction over persons not in compliance with discovery orders. This of course would be a more limited holding. Yet the Court does not cast its decision in these terms. And it provides no support for such an interpretation, either in the language or in the history of the Federal Rules.
In the absence of such support, I could not join the Court in embracing such a construction of the Rules of Civil Procedure. There is nothing in Rule 37 to suggest that it is intended to confer a grant of personal jurisdiction. Indeed, the clear language of Rule 82 seems to establish that Rule 37 should not be construed as a jurisdictional grant: “These rules shall not be construed to extend … the jurisdiction of the United States district courts or the venue of actions therein.” Moreover, assuming that minimum contacts remain a constitutional predicate for the exercise of a State’s in personam jurisdiction over an unconsenting defendant, constitutional questions would arise if Rule 37 were read to permit a plaintiff in a diversity action to subject a defendant to a “fishing expedition” in a foreign jurisdiction. A plaintiff is not entitled to discovery to establish essentially speculative allegations necessary to personal jurisdiction. Nor would the use of Rule 37 sanctions to enforce discovery orders constitute a mere abuse of discretion in such a case. For me at least, such a use of discovery would raise serious questions as to the constitutionality as well as the statutory authority of a federal court—in a diversity case—to exercise personal jurisdiction absent some showing of minimum contacts between the unconsenting defendant and the forum State.
In this case the facts alone—unaided by broad jurisdictional theories—more than amply demonstrate that the District Court possessed personal jurisdiction to impose sanctions under Rule 37 and otherwise to adjudicate this case. I would decide the case on this narrow basis.…
Questions and Comments
(1) The majority, as Justice Powell notes, does not seem to base its decision purely on a sanction rationale: Instead it invokes Hammond Packing Co. v. Arkansas for the proposition that a presumption that the facts giving rise to actual jurisdiction actually exist may be drawn from the defendants’ silence. Is such an inference credible? What if the defendants truly thought the requests for documents were excessively burdensome?
(2) Could the result of the case be rested on a sanction rationale? Or is it improper to impose a sanction on a party over whom the court has no jurisdiction?
(3) Some exercises of authority over defendants and their cases are permitted without the trial court’s determination that it can exercise personal jurisdiction over the defendant. In Sinochem International Co. Ltd. v. Malaysia International Shipping Corp, 549 U.S. 422 (2007), the Supreme Court concluded that it was permissible for a district court to dismiss the claims on grounds of forum non conveniens even though limited discovery to determine whether there was personal jurisdiction over the defendant had not yet occurred. The Court reasoned that although a federal court cannot rule on the merits of a case without first establishing that it has subject matter over the claims and personal jurisdiction over the parties, there is no mandatory sequencing of nonmerits issues.
(4) If in Insurance Corp., the defendants had made no appearance at all, even to contest jurisdiction, the court might have entered a judgment against them, but it would have been subject to collateral attack—that is, a second court, asked to enforce the judgment, would be required to inspect the jurisdictional contacts afresh and make its own judgment. In the actual case, however, collateral attack is presumably not permitted. How can the Court justify worse treatment for the defendants who show up but don’t cooperate fully as against those who don’t cooperate at all by failing to show up?
(5) Waiver of the right to assert lack of jurisdiction may also occur under the federal rules if the defendant makes a preliminary motion and the motion does not include objection to lack of jurisdiction. Fed. R. Civ. P. 12(h). (The defendant may choose instead to include the defense in its answer.)
In some pleading systems the defense of lack of jurisdiction may not be joined with a defense on the merits; instead one must make a “special appearance” for the purpose of contesting jurisdiction. If the merits are contested, the jurisdictional issue is waived. May a court provide that any kind of appearance will constitute a waiver, that is, give the defendant the choice between showing up and litigating on the merits (despite a possibly meritorious jurisdictional defense) or staying away and suffering a default judgment that, if the defendant was wrong on the jurisdictional defense, will be binding and will preclude consideration of the merits? The Supreme Court said yes in York v. Texas, 137 U.S. 15 (1890), saying that the availability of collateral attack was sufficient to ensure due process.
It has long been taken for granted that an individual is subject to suit in the state of his or her domicile on any cause of action whatsoever. See, e.g., Milliken v. Meyer, 311 U.S. 457 (1940). By the same token, a corporation is subject to suit generally at the place of its incorporation or its principal place of business. In Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952), jurisdiction over a cause of action unrelated to the defendant’s forum activities was justified by the very substantial amount of business that the defendant transacted in the forum.
But the Supreme Court has repeatedly held that the forum affiliation need not be so extensive where the cause of action arises out of the defendant’s forum activities. McGee v. International Life Insurance Co., 355 U.S. 220 (1957), upheld, for instance, an assertion of jurisdiction based upon the solicitation and writing of a single life insurance contract for a forum resident. Such holdings create an incentive for plaintiffs to argue that their cause of action arises out of or is related to the defendant’s forum activities, for then the amount of contact shown need not be as great. Such assertions of “specific jurisdiction” are differentiated from “general jurisdiction” over all causes of action involving the particular defendant, based upon extensive contacts such as domicile or place of incorporation.
1. General and Specific Jurisdiction
Helicopteros Nacionales de Colombia, S.A. v. Hall
466 U.S. 408 (1983)
Justice BLACKMUN delivered the opinion of the Court.
We granted certiorari in this case to decide whether the Supreme Court of Texas correctly ruled that the contacts of a foreign corporation with the state of Texas were sufficient to allow a Texas state court to assert jurisdiction over the corporation in a cause of action not arising out of or related to the corporation’s activities within the State.
Petitioner Helicopteros Nacionales de Colombia, S.A. (Helicol), is a Colombian corporation with its principal place of business in the city of Bogota in that country. It is engaged in the business of providing helicopter transportation for oil and construction companies in South America. On January 26, 1976, a helicopter owned by Helicol crashed in Peru. Four United States citizens were among those who lost their lives in the accident. Respondents are the survivors and representatives of the four decedents.
At the time of the crash, respondents’ decedents were employed by Consorcio, a Peruvian consortium, and were working on a pipeline in Peru. Consorcio is the alter ego of a joint venture named Williams-Sedco-Horn (WSH). The venture had its headquarters in Houston, Tex. Consorcio had been formed to enable the venturers to enter into a contract with Petro Peru, the Peruvian state-owned oil company. Consorcio was to construct a pipeline for Petro Peru running from the interior of Peru westward to the Pacific Ocean. Peruvian law forbade construction of the pipeline by any non-Peruvian entity.
Consorcio/WSH needed helicopters to move personnel, materials, and equipment into and out of the construction area. In 1974, upon request of Consorcio/WSH, the chief executive officer of Helicol, Francisco Restrepo, flew to the United States and conferred in Houston with representatives of the three joint venturers. At that meeting, there was a discussion of prices, availability, working conditions, fuel, supplies, and housing. Restrepo represented that Helicol could have the first helicopter on the job in 15 days. The Consorcio/WSH representatives decided to accept the contract proposed by Restrepo. Helicol began performing before the agreement was formally signed in Peru on November 11, 1974.3 The contract was written in Spanish on official government stationery and provided that the residence of all the parties would be Lima, Peru. It further stated that controversies arising out of the contract would be submitted to the jurisdiction of Peruvian courts. In addition, it provided that Consorcio/WSH would make payments to Helicol’s account with the Bank of America in New York City.
Aside from the negotiation session in Houston between Restrepo and the representatives of Consorcio/WSH, Helicol had other contacts with Texas. During the years 1970-1977, it purchased helicopters (approximately 80% of its fleet), spare parts, and accessories for more than $4 million from Bell Helicopter Company in Fort Worth. In that period, Helicol sent prospective pilots to Fort Worth for training and to ferry the aircraft to South America. It also sent management and maintenance personnel to visit Bell Helicopter in Fort Worth during the same period in order to receive “plant familiarization” and for technical consultation. Helicol received into its New York City and Panama City, Fla., bank accounts over $5 million in payments from Consorcio/WSH drawn upon First City National Bank of Houston.
Beyond the foregoing, there have been no other business contacts between Helicol and the State of Texas. Helicol never has been authorized to do business in Texas and never has had an agent for the service of process within the State. It never has performed helicopter operations in Texas or sold any product that reached Texas, never solicited business in Texas, never signed any contract in Texas, never had any employee based there, and never recruited an employee in Texas. In addition, Helicol never has owned real or personal property in Texas and never has maintained an office or establishment there. Helicol has maintained no records in Texas and has no shareholders in that State. None of the respondents or their decedents were domiciled in Texas …,5 but all of the decedents were hired in Houston by Consorcio/WSH to work on the Petro Peru pipeline project.
Respondents instituted wrongful-death actions in the District Court of Harris County, Tex., against Consorcio/WSH, Bell Helicopter Company, and Helicol. Helicol filed special appearances and moved to dismiss the actions for lack of in personam jurisdiction over it. The motion was denied. After a consolidated jury trial, judgment was entered against Helicol on a jury verdict of $1,141,200 in favor of respondents.… In ruling that the Texas courts had in personam jurisdiction, the Texas Supreme Court first held that the State’s long-arm statute reaches as far as the Due Process Clause of the Fourteenth Amendment permits. Thus, the only question remaining for the court to decide was whether it was consistent with the Due Process Clause for Texas courts to assert in personam jurisdiction over Helicol.
The Due Process Clause of the Fourteenth Amendment operates to limit the power of a State to assert in personam jurisdiction over a nonresident defendant. Pennoyer v. Neff, 95 U.S. 714 (1878). Due process requirements are satisfied when in personam jurisdiction is asserted over a nonresident corporate defendant that has “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). When a controversy is related to or “arises out of” a defendant’s contacts with the forum, the Court has said that a “relationship among the defendant, the forum, and the litigation” is the essential foundation of in personam jurisdiction. Shaffer v. Heitner, 433 U.S. 186, 204 (1977).8
Even when the cause of action does not arise out of or relate to the foreign corporation’s activities in the forum State,9 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. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952); see Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 779-780 (1984). In Perkins, the Court addressed a situation in which state courts had asserted general jurisdiction over a defendant foreign corporation. During the Japanese occupation of the Philippine Islands, the president and general manager of a Philippine mining corporation maintained an office in Ohio from which he conducted activities on behalf of the company. He kept company files and held directors’ meetings in the office, carried on correspondence relating to the business, distributed salary checks drawn on two active Ohio bank accounts, engaged an Ohio bank to act as transfer agent, and supervised policies dealing with the rehabilitation of the corporation’s properties in the Philippines. In short, the foreign corporation, through its president, “ha[d] been carrying on in Ohio a continuous and systematic, but limited, part of its general business,” and the exercise of general jurisdiction over the Philippine corporation by an Ohio court was “reasonable and just.” 342 U.S., at 438, 445.
All parties to the present case concede that respondents’ claims against Helicol did not “arise out of,” and are not related to, Helicol’s activities within Texas.10 We thus must explore the nature of Helicol’s contacts with the State of Texas to determine whether they constitute the kind of continuous and systematic general business contacts the Court found to exist in Perkins. We hold that they do not.
It is undisputed that Helicol does not have a place of business in Texas and never has been licensed to do business in the State. Basically, Helicol’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 Bell Helicopter for substantial sums; and sending personnel to Bell’s facilities in Fort Worth for training.
The one trip to Houston by Helicol’s chief executive officer for the purpose of negotiating the transportation-services contract with Consorcio/WSH cannot be described or regarded as a contact of a “continuous and systematic” nature, as Perkins described it, see also International Shoe Co. v. Washington, 326 U.S., at 320, and thus cannot support an assertion of in personam jurisdiction over Helicol by a Texas court. Similarly, Helicol’s acceptance from Consorcio/WSH of checks drawn on a Texas bank is of negligible significance for purposes of determining whether Helicol had sufficient contacts in Texas. There is no indication that Helicol ever requested that the checks be drawn on a Texas bank or that there was any negotiation between Helicol and Consorcio/WSH with respect to the location or identity of the bank on which checks would be drawn. Common sense and everyday experience suggest that, absent unusual circumstances, the bank on which a check is drawn is generally of little consequence to the payee and is a matter left to the discretion of the drawer. Such unilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction. See Kulko v. California Superior Court, 436 U.S. 84, 93 (1978) (arbitrary to subject one parent to suit in any State where other parent chooses to spend time while having custody of child pursuant to separation agreement); Hanson v. Denckla, 357 U.S. 235, 253 (1958) (“The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State”).
The Texas Supreme Court focused on the purchases and the related training trips in finding contacts sufficient to support an assertion of jurisdiction. We do not agree with that assessment, for the Court’s opinion in Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516 (1923) (Brandeis, J., for a unanimous tribunal), makes clear that purchases and related trips, standing alone, are not a sufficient basis for a State’s assertion of jurisdiction.
The defendant in Rosenberg was a small retailer in Tulsa, Okla., who dealt in men’s clothing and furnishings. It never had applied for a license to do business in New York, nor had it at any time authorized suit to be brought against it there. It never had an established place of business in New York and never regularly carried on business in that State. Its only connection with New York was that it purchased from New York wholesalers a large portion of the merchandise sold in its Tulsa store. The purchases sometimes were made by correspondence and sometimes through visits to New York by an officer of the defendant. The Court concluded: “Visits on such business, even if occurring at regular intervals, would not warrant the inference that the corporation was present within the jurisdiction of [New York].” Id., at 518.
This Court in International Shoe acknowledged and did not repudiate its holding in Rosenberg. See 326 U.S., at 318. In accordance with Rosenberg, we hold that mere purchases, even if occurring at regular intervals, are not enough to warrant a State’s assertion of in personam jurisdiction over a non-resident corporation in a cause of action not related to those purchase transactions.12 Nor can we conclude that the fact that Helicol sent personnel into Texas for training in connection with the purchase of helicopters and equipment in that State in any way enhanced the nature of Helicol’s contacts with Texas. The training was a part of the package of goods and services purchased by Helicol from Bell Helicopter. The brief presence of Helicol employees in Texas for the purpose of attending the training sessions is no more a significant contact than were the trips to New York made by the buyer for the retail store in Rosenberg.
We hold that Helicol’s contacts with the State of Texas were insufficient to satisfy the requirements of the Due Process Clause of the Fourteenth Amendment.13 Accordingly, we reverse the judgment of the Supreme Court of Texas.
Justice BRENNAN, dissenting.
The Court expressly limits its decision in this case to “an assertion of general jurisdiction over a foreign defendant.” Having framed the question in this way, the Court is obliged to address our prior holdings in Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952), and Rosenberg Bros. & Co. v. Curtis Brown Co., supra. In Perkins, the Court considered a State’s assertion of general jurisdiction over a foreign corporation that “ha[d] been carrying on … a continuous and systematic, but limited, part of its general business” in the forum. 342 U.S., at 438. Under the circumstances of that case, we held that such contacts were constitutionally sufficient “to make it reasonable and just to subject the corporation to the jurisdiction” of that State. Id., at 445 (citing International Shoe, supra, at 317-320). Nothing in Perkins suggests, however, that such “continuous and systematic” contacts are a necessary minimum before a State may constitutionally assert general jurisdiction over a foreign corporation.
The Court therefore looks for guidance to our 1923 decision in Rosenberg, supra, which until today was of dubious validity given the subsequent expansion of personal jurisdiction that began with International Shoe, supra, in 1945. In Rosenberg, the Court held that a company’s purchases within a State, even when combined with related trips to the State by company officials, would not allow the courts of that State to assert general jurisdiction over all claims against the nonresident corporate defendant making those purchases. Reasoning by analogy, the Court in this case concludes that Helicol’s contacts with the State of Texas are no more significant than the purchases made by the defendant in Rosenberg. The Court makes no attempt, however, to ascertain whether the narrow view of in personam jurisdiction adopted by the Court in Rosenberg comports with “the fundamental transformation of our national economy” that has occurred since 1923. This failure, in my view, is fatal to the Court’s analysis.
The vast expansion of our national economy during the past several decades has provided the primary rationale for expanding the permissible reach of a State’s jurisdiction under the Due Process Clause. By broadening the type and amount of business opportunities available to participants in interstate and foreign commerce, our economy has increased the frequency with which foreign corporations actively pursue commercial transactions throughout the various States. In turn, it has become both necessary and, in my view, desirable to allow the States more leeway in bringing the activities of these nonresident corporations within the scope of their respective jurisdictions.…
As a foreign corporation that has actively and purposefully engaged in numerous and frequent commercial transactions in the State of Texas, Helicol clearly falls within the category of nonresident defendants that may be subject to that forum’s general jurisdiction. Helicol not only purchased helicopters and other equipment in the State for many years, but also sent pilots and management personnel into Texas to be trained in the use of this equipment and to consult with the seller on technical matters. Moreover, negotiations for the contract under which Helicol provided transportation services to the joint venture that employed the respondents’ decedents also took place in the State of Texas. Taken together, these contacts demonstrate that Helicol obtained numerous benefits from its transaction of business in Texas. In turn, it is eminently fair and reasonable to expect Helicol to face the obligations that attach to its participation in such commercial transactions. Accordingly, on the basis of continuous commercial contacts with the forum, I would conclude that the Due Process Clause allows the State of Texas to assert general jurisdiction over petitioner Helicol.
The Court also fails to distinguish the legal principles that controlled our prior decisions in Perkins and Rosenberg. In particular, the contacts between petitioner Helicol and the State of Texas, unlike the contacts between the defendant and the forum in each of those cases, are significantly related to the cause of action alleged in the original suit filed by the respondents. Accordingly, in my view, it is both fair and reasonable for the Texas courts to assert specific jurisdiction over Helicol in this case.
By asserting that the present case does not implicate the specific jurisdiction of the Texas courts, the Court necessarily removes its decision from the reality of the actual facts presented for our consideration.3 Moreover, the Court refuses to consider any distinction between contacts that are “related to” the underlying cause of action and contacts that “give rise” to the underlying cause of action. In my view, however, there is a substantial difference between these two standards for asserting specific jurisdiction. Thus, although I agree that the respondents’ cause of action did not formally “arise out of” specific activities initiated by Helicol in the State of Texas, I believe that the wrongful-death claim filed by the respondents is significantly related to the undisputed contacts between Helicol and the forum. On that basis, I would conclude that the Due Process Clause allows the Texas courts to assert specific jurisdiction over this particular action.
The wrongful-death actions filed by the respondents were premised on a fatal helicopter crash that occurred in Peru. Helicol was joined as a defendant in the lawsuits because it provided transportation services, including the particular helicopter and pilot involved in the crash, to the joint venture that employed the decedents. Specifically, the respondent Hall claimed in her original complaint that “Helicol is … legally responsible for its own negligence through its pilot employee.” App. 6a. Viewed in light of these allegations, the contacts between Helicol and the State of Texas are directly and significantly related to the underlying claim filed by the respondents. The negotiations that took place in Texas led to the contract in which Helicol agreed to provide the precise transportation services that were being used at the time of the crash. Moreover, the helicopter involved in the crash was purchased by Helicol in Texas, and the pilot whose negligence was alleged to have caused the crash was actually trained in Texas. This is simply not a case, therefore, in which a state court has asserted jurisdiction over a nonresident defendant on the basis of wholly unrelated contacts with the forum. Rather, the contacts between Helicol and the forum are directly related to the negligence that was alleged in the respondent Hall’s original complaint.4 Because Helicol should have expected to be amenable to suit in the Texas courts for claims directly related to these contacts, it is fair and reasonable to allow the assertion of jurisdiction in this case.
Despite this substantial relationship between the contacts and the cause of action, the Court declines to consider whether the courts of Texas may assert specific jurisdiction over this suit. Apparently, this simply reflects a narrow interpretation of the question presented for review. It is nonetheless possible that the Court’s opinion may be read to imply that the specific jurisdiction of the Texas courts is inapplicable because the cause of action did not formally “arise out of” the contacts between Helicol and the forum. In my view, however, such a rule would place unjustifiable limits on the bases under which Texas may assert its jurisdictional power.5
Limiting the specific jurisdiction of a forum to cases in which the cause of action formally arose out of the defendant’s contacts with the State would subject constitutional standards under the Due Process Clause to the vagaries of the substantive law or pleading requirements of each State. For example, the complaint filed against Helicol in this case alleged negligence based on pilot error. Even though the pilot was trained in Texas, the Court assumes that the Texas courts may not assert jurisdiction over the suit because the cause of action “did not ‘arise out of,’ and [is] not related to,” that training. If, however, the applicable substantive law required that negligent training of the pilot was a necessary element of a cause of action for pilot error, or if the respondents had simply added an allegation of negligence in the training provided for the Helicol pilot, then presumably the Court would concede that the specific jurisdiction of the Texas courts was applicable.
Our interpretation of the Due Process Clause has never been so dependent upon the applicable substantive law or the State’s formal pleading requirements. At least since International Shoe Co. v. Washington, 326 U.S. 310 (1945), the principal focus when determining whether a forum may constitutionally assert jurisdiction over a nonresident defendant has been on fairness and reasonableness to the defendant. To this extent, a court’s specific jurisdiction should be applicable whenever the cause of action arises out of or relates to the contacts between the defendant and the forum. It is eminently fair and reasonable, in my view, to subject a defendant to suit in a forum with which it has significant contacts directly related to the underlying cause of action. Because Helicol’s contacts with the State of Texas meet this standard, I would affirm the judgment of the Supreme Court of Texas.
Questions and Comments
(1) What does it mean to say that the controversy “arises out of” or “relates to” the defendant’s activities in the forum? Are these the same? In the Supreme Court Review article cited in the majority’s footnote 9, the author argued that specific jurisdiction should be based upon contacts that were themselves of substantive relevance to the dispute. In rejecting this suggestion, did the dissent have an alternative conception of what “relating to” means, how it is different from “arising out of,” and how both differ from total unrelatedness? Isn’t this crucial if different types of contacts are to be weighted differently?
This issue has provoked considerable discussion in the courts and in the academic literature. Sternberg v. O’Neil, 550 A.2d 1105 (Del. 1988), excerpted at page 396 supra, contained a serious discussion of specific jurisdiction as it related to the court’s differentiation between implied and express consent, 550 A.2d at 1116-1117. Different definitions of the requirement that a cause of action “arise from” the local contacts can be found in: Hexacomb Corp. v. Damage Prevention Products Corp., 905 F. Supp. 557 (N.D. Ind. 1995) (defendant’s contacts with the forum must be substantively related to the cause of action); Creech v. Roberts, 908 F.2d 75 (6th Cir. 1990) (contacts must be related to the “operative facts” of the controversy); Pizzaro v. Hoteles Concorde Intl., C.A., 907 F.2d 1256 (1st Cir. 1990) (in applying proximate cause test, the court examined whether the facts constituting the defendant’s contacts were relevant to the proof of the elements of the plaintiff’s cause of action); Nowak v. Tak How Invs., Ltd., 94 F.3d 708 (1st Cir. 1996) (court deviates from proximate cause test to exercise jurisdiction where meaningful link exists between defendant’s contacts and harm suffered by plaintiff); Shopper’s Food Warehouse v. Moreno, 746 A.2d 320 (D.D.C. 2000) (contacts must have a substantial connection with plaintiff’s claim); Vons Companies, Inc. v. Seabest Foods, Inc., 926 P.2d 1085 (Cal. 1996) (rejecting proximate cause test as too narrow and “but for” test as too broad, and holding that there must be a substantial nexus or connection between the defendant’s forum activities and the plaintiff’s claim); In re Oil Spill by Amoco Cadiz Off Coast of France, 699 F.2d 909 (7th Cir. 1983) (applying “in the wake of” test to state long-arm statute).
The lower court opinion in Carnival Cruise v. Shute, reprinted at page 722 infra, addressed the question of whether the injury arose out of the defendant’s advertising activities in the forum, answering the question in the affirmative after applying a “but for” test. Shute v. Carnival Cruise Lines, 863 F.2d 1437 (9th Cir. 1988); see also Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995) (reaffirming “but for” test). Many observers hoped when the Supreme Court agreed to hear the case that its decision would clarify the issue; instead, the issue was avoided by the Court’s holding that jurisdiction existed on the basis of the forum selection clause.
For academic discussion of these and other possible tests, see Twitchell, The Myth of General Jurisdiction, 101 Harv. L. Rev. 610 (1988); Brilmayer, Related Contacts and Personal Jurisdiction, 101 Harv. L. Rev. 1444 (1988); Twitchell, A Rejoinder to Professor Brilmayer, 101 Harv. L. Rev. 1465 (1988). For an analysis of the Ninth Circuit’s “but for” test, see Comment, Related Contacts and Personal Jurisdiction: The “But For” Test, 82 Cal. L. Rev. 1545 (1994); Comment, Specific Personal Jurisdiction and the “Arise From or Relate To” Requirement: What Does It Mean? 50 Wash. & Lee L. Rev. 1265 (1993).
(2) Why should purchases be treated qualitatively differently from other sorts of unrelated contacts? Would unrelated purchases really be constitutionally distinguishable from, for example, unrelated sales? From unrelated visits? Ought the volume of unrelated purchases be important? Does the Court really mean that no quantity of unrelated purchases could ever support general jurisdiction?
(3) Even if the majority is correct that the plaintiffs did not argue that the cause of action is related to the contacts, why does it follow that this is a problem of general jurisdiction? Why not say, in other words, that unless the defendant shows why the contacts are unrelated, it will be assumed that the problem is one of specific jurisdiction?
(4) Is it possible to have hybrid jurisdiction, where some unrelated contacts that would themselves be insufficient are combined with either some somewhat related contacts or some related contacts that would also, by themselves, be insufficient? See Richman, Review Essay: Part II—A Sliding Scale to Supplement the Distinction Between General and Specific Jurisdiction, 72 Calif. L. Rev. 1328 (1984). In Camelback Ski Corp. v. Behning, 539 A.2d 1107 (Md. 1988), the court denied jurisdiction over a Pennsylvania ski resort for injuries sustained by plaintiff while skiing:
Camelback is principally a “day”2 resort, although it does receive some “destination business.” Its market area, to which it devotes one hundred percent of its advertising budget, is comprised of those parts of Pennsylvania, New York, and New Jersey lying within a 100-mile radius of the resort. On one occasion in 1982, for a period of one or two days, a sales representative of Camelback called on travel agencies and military installations in Maryland, in an attempt to stimulate mid-week destination business. This effort was unsuccessful, and was not repeated.
Camelback was aware that some of its customers came from Maryland. The record does not disclose what percentage of Camelback’s customers were from this State, or whether Camelback had any means of obtaining information concerning the State of residence of its customers. The Behnings trip to Camelback did not result from any solicitation by Camelback within this State.
… The Behnings correctly assert that forcing all cases into a rigid classification as either “general jurisdiction” or “specific jurisdiction” cases, and then mechanically applying a fixed standard for the quantum of contacts required to support personal jurisdiction in each class, would be inappropriate. We agree that the quality and quantity of contacts required to support the exercise of personal jurisdiction will depend upon the nature of the action brought and the nexus of the contacts to the subject matter of the action. We further agree that the spectrum of cases may be generally divided into those involving general jurisdiction (the cause of action is unrelated to the contacts), and those involving specific jurisdiction (the cause of action arises out of the conduct which constitutes the contacts). Generally speaking, when the cause of action does not arise out of, or is not directly related to, the conduct of the defendant within the forum, contacts reflecting continuous and systematic general business conduct will be required to sustain jurisdiction.… On the other hand, when the cause of action arises out of the contacts that the defendant had with the forum, it may be entirely fair to permit the exercise of jurisdiction as to that claim.
Some cases fit neatly into one or the other category.… McGee v. International Life Ins. Co., 355 U.S. 220 (1957), involved a claim arising out of the issuance and delivery of a single life insurance policy by a Texas insurance company to a California resident, and was therefore a case involving specific jurisdiction. By way of contrast, Perkins v. Benguet Mining Co., 342 U.S. 437 (1952) involved a cause of action that did not arise out of, or relate to, the activities of the defendant in the forum State, and was therefore a general jurisdiction case. The concept of specific and general jurisdiction is a useful tool in the sometimes difficult task of detecting how much contact is enough, and most cases will fit nicely into one category or the other. If, however, the facts of a given case do not naturally place it at either end of the spectrum, there is no need to jettison the concept, or to force-fit the case. In that instance, the proper approach is to identify the approximate position of the case on the continuum that exists between the two extremes, and apply the corresponding standard, recognizing that the quantum of required contacts increases as the nexus between the contacts and the cause of action decreases.
This case does not fit the classic mold of specific jurisdiction, and we find that the contacts required to support jurisdiction more nearly resemble those of a general jurisdiction case. Behning was not injured by any product Camelback sent into Maryland. There is no evidence that Behning went from Maryland to Pennsylvania in response to solicitation by Camelback. Yet, the Behnings argue the cause of action is not totally divorced from the contacts they rely upon, because Behning was one of a number of Maryland residents coming to Camelback to ski, and thus formed a part of a stream of commerce from which Camelback knew it derived economic advantage. The argument, though innovative, is not persuasive.
(5) Note the Helicopteros majority’s apparently disapproving characterization, in footnote 13, of jurisdiction by necessity as a “potentially far-reaching modification of existing law.” What sort of more complete record would have encouraged the Court to address the argument? Merely a showing that the defendants could not all be sued in the same forum? That fact alone would not single out Texas as an appropriate place to litigate, would it? After all, if the three defendants could not all be sued in Peru, Colombia, or Texas, then Texas is not better situated in this regard than Peru or Colombia.
(6) At what point in time ought the defendant’s contacts be measured? Should the defendant’s domicile (or business contacts) be assessed as of the time that the cause of action arose or as of the time that the suit was filed? Or, are both relevant? See, e.g., Schneider v. Linkfield, 389 Mich. 608, 209 N.W.2d 225 (1973) (defendants resided in the forum at the time of the accident; jurisdiction upheld); Greene v. Sha-Na-Na, 637 F. Supp. 591 (D. Conn. 1986) (defendant’s activities subsequent to filing of complaint not counted toward personal jurisdiction).
Burnham v. Superior Court of California
495 U.S. 604 (1990)
Justice SCALIA announced the judgment of the Court and delivered an opinion in which THE CHIEF JUSTICE and Justice KENNEDY join, and in which Justice WHITE joins with respect to Parts I, II-A, II-B, and II-C.
The question presented is whether the Due Process Clause of the Fourteenth Amendment denies California courts jurisdiction over a nonresident, who was personally served with process while temporarily in that State, in a suit unrelated to his activities in the State.
Petitioner Dennis Burnham married Francie Burnham in 1976, in West Virginia. In 1977 the couple moved to New Jersey, where their two children were born. In July 1987 the Burnhams decided to separate. They agreed that Mrs. Burnham, who intended to move to California, would take custody of the children. Shortly before Mrs. Burnham departed for California that same month, she and petitioner agreed that she would file for divorce on grounds of “irreconcilable differences.”
In October 1987, petitioner filed for divorce in New Jersey state court on grounds of “desertion.” Petitioner did not, however, obtain an issuance of summons against his wife, and did not attempt to serve her with process. Mrs. Burnham, after unsuccessfully demanding that petitioner adhere to their prior agreement to submit to an “irreconcilable differences” divorce, brought suit for divorce in California state court in early January 1988.
In late January, petitioner visited southern California on business, after which he went north to visit his children in the San Francisco Bay area, where his wife resided. He took the older child to San Francisco for the weekend. Upon returning the child to Mrs. Burnham’s home on January 24, 1988, petitioner was served with a California court summons and a copy of Mrs. Burnham’s divorce petition. He then returned to New Jersey.
Later that year, petitioner made a special appearance in the California Superior Court, moving to quash the service of process on the ground that the court lacked personal jurisdiction over him because his only contacts with California were a few short visits to the State for the purposes of conducting business and visiting his children. The Superior Court denied the motion, and the California Court of Appeal denied mandamus relief, rejecting petitioner’s contention that the Due Process Clause prohibited California courts from asserting jurisdiction over him because he lacked “minimum contacts” with the State. The court held it to be “a valid jurisdictional predicate for in personam jurisdiction” that the “defendant [was] present in the forum state and personally served with process.” We granted certiorari.
The proposition that the judgment of a court lacking jurisdiction is void traces back to the English Year Books, see Bowser v. Collins, Y.B. Mich. 22 Edw. 4, f. 30, pl. 11, 145 Eng. Rep. 97 (1482), and was made settled law by Lord Coke in Case of the Marshalsea, 10 Co. Rep. 68b, 77 Eng. Rep. 1027, 1041 (K.B. 1612). Traditionally that proposition was embodied in the phrase coram non judice, “before a person not a judge”—meaning, in effect, that the proceeding in question was not a judicial proceeding because lawful judicial authority was not present, and could therefore not yield a judgment. American courts invalidated, or denied recognition to, judgments that violated this common-law principle long before the Fourteenth Amendment was adopted. In Pennoyer v. Neff, 95 U.S. 714, 732 (1878) we announced that the judgment of a court lacking personal jurisdiction violated the Due Process Clause of the Fourteenth Amendment as well.
To determine whether the assertion of personal jurisdiction is consistent with due process, we have long relied on the principles traditionally followed by American courts in marking out the territorial limits of each State’s authority. That criterion was first announced in Pennoyer v. Neff, supra, in which we stated that due process “mean[s] a course of legal proceedings according to those rules and principles which have been established in our systems of jurisprudence for the protection and enforcement of private rights,” id., at 733, including the “well-established principles of public law respecting the jurisdiction of an independent State over persons and property,” id., at 722. In what has become the classic expression of the criterion, we said in International Shoe Co. v. Washington, 326 U.S. 310 (1945), that a State court’s assertion of personal jurisdiction satisfies the Due Process Clause if it does not violate “traditional notions of fair play and substantial justice.” Since International Shoe, we have only been called upon to decide whether these “traditional notions” permit States to exercise jurisdiction over absent defendants in a manner that deviates from the rules of jurisdiction applied in the 19th century. We have held such deviations permissible, but only with respect to suits arising out of the absent defendant’s contacts with the State.1 See, e.g., Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414 (1984). The question we must decide today is whether due process requires a similar connection between the litigation and the defendant’s contacts with the State in cases where the defendant is physically present in the State at the time process is served upon him.
Among the most firmly established principles of personal jurisdiction in American tradition is that the courts of a State have jurisdiction over non-residents who are physically present in the State. The view developed early that each State had the power to hale before its courts any individual who could be found within its borders, and that once having acquired jurisdiction over such a person by properly serving him with process, the State could retain jurisdiction to enter judgment against him, no matter how fleeting his visit. See, e.g., Potter v. Allin, 2 Root 63, 67 (Conn. 1793); Barrell v. Benjamin, 15 Mass. 354 (1819). That view had antecedents in English common-law practice, which sometimes allowed “transitory” actions, arising out of events outside the country, to be maintained against seemingly nonresident defendants who were present in England. See, e.g., Mostyn v. Fabrigas, 98 Eng. Rep. 1021 (K.B. 1774); Cartwright v. Pettus, 22 Eng. Rep. 916 (Ch. 1675). Justice Story believed the principle, which he traced to Roman origins, to be firmly grounded in English tradition: “[B]y the common law[,] personal actions, being transitory, may be brought in any place, where the party defendant may be found,” for “every nation may … rightfully exercise jurisdiction over all persons within its domains.” Story, Commentaries on the Conflict of Laws §§543, 554 (1846). See also §§530-538; Picquet v. Swan, supra, at 611-612 (Story, J.) (“Where a party is within a territory, he may justly be subjected to its process, and bound personally by the judgment pronounced, on such process, against him.”).
Recent scholarship has suggested that English tradition was not as clear as Story thought, see Hazard, A General Theory of State-Court Jurisdiction, 1965 Sup. Ct. Rev. 241, 253-260; Ehrenzweig, The Transient Rule of Personal Jurisdiction: The “Power” Myth and Forum Conveniens, 65 Yale L.J. 289 (1956). Accurate or not, however, judging by the evidence of contemporaneous or near-contemporaneous decisions one must conclude that Story’s understanding was shared by American courts at the crucial time for present purposes: 1868, when the Fourteenth Amendment was adopted.…
Decisions in the courts of many States in the 19th and early 20th centuries held that personal service upon a physically present defendant sufficed to confer jurisdiction, without regard to whether the defendant was only briefly in the State or whether the cause of action was related to his activities there.
Although research has not revealed a case deciding the issue in every State’s courts, that appears to be because the issue was so well settled that it went unlitigated. Opinions from the courts of other States announced the rule in dictum. Most States, moreover, had statutes or common-law rules that exempted from service of process individuals who were brought into the forum by force or fraud, see, e.g., Wanzer v. Bright, 52 Ill. 35 (1869), or who were there as a party or witness in unrelated judicial proceedings, see, e.g., Burroughs v. Cocke & Willis, 56 Okla. 627, 156 P. 196 (1916); Malloy v. Brewer, 7 S.D. 587, 64 N.W. 1120 (1895). These exceptions obviously rested upon the premise that service of process conferred jurisdiction. Particularly striking is the fact that, as far as we have been able to determine, not one American case from the period (or, for that matter, not one American case until 1978) held, or even suggested, that in-state personal service on an individual was insufficient to confer personal jurisdiction. Commentators were also seemingly unanimous on the rule.
This American jurisdictional practice is, moreover, not merely old; it is continuing. It remains the practice of, not only a substantial number of the States, but as far as we are aware all the States and the federal government—if one disregards (as one must for this purpose) the few opinions since 1978 that have erroneously said, on grounds similar to those that petitioner presses here, that this Court’s due-process decisions render the practice unconstitutional. We do not know of a single State or federal statute or a single judicial decision resting upon State law, that has abandoned in-state service as a basis of jurisdiction. Many recent cases reaffirm it.
Despite this formidable body of precedent, petitioner contends, in reliance on our decisions applying the International Shoe standard, that in the absence of “continuous and systematic” contacts with the forum, see note 1, supra, a nonresident defendant can be subjected to judgment only as to matters that arise out of or relate to his contacts with the forum. This argument rests on a thorough misunderstanding of our cases.
The view of most courts in the 19th century was that a court simply could not exercise in personam jurisdiction over a nonresident who had not been personally served with process in the forum. Pennoyer v. Neff, while renowned for its statement of the principle that the Fourteenth Amendment prohibits such an exercise of jurisdiction, in fact set that forth only as dictum, and decided the case (which involved a judgment rendered more than two years before the Fourteenth Amendment’s ratification) under “well-established principles of public law.” 95 U.S., at 722. Those principles, embodied in the Due Process Clause, required (we said) that when proceedings “involve[d] merely a determination of the personal liability of the defendant, he must be brought within [the court’s] jurisdiction by service of process within the State, or his voluntary appearance.” Id., at 733. We invoked that rule in a series of subsequent cases, as either a matter of due process or a “fundamental principl[e] of jurisprudence.”
Later years, however, saw the weakening of the Pennoyer rule. In the late 19th and early 20th centuries, changes in the technology of transportation and communication, and the tremendous growth of interstate business activity, led to an “inevitable relaxation of the strict limits on state jurisdiction” over nonresident individuals and corporations.
States required, for example, that nonresident corporations appoint an in-state agent upon whom process could be served as a condition of transacting business within their borders, see, e.g., St. Clair v. Cox, 106 U.S. 350 (1882), and provided in-state “substituted service” for nonresident motorists who caused injury in the State and left before personal service could be accomplished, see, e.g., Kane v. New Jersey, 242 U.S. 160 (1916); Hess v. Pawloski, 274 U.S. 352 (1927). We initially upheld these laws under the Due Process Clause on grounds that they complied with Pennoyer’s rigid requirement of either “consent,” see, e.g., Hess v. Pawloski, supra, at 356, or “presence,” see, e.g., Philadelphia & Reading R. Co. v. McKibbin, 243 U.S. 264, 265 (1917). As many observed, however, the consent and presence were purely fictional.
Our opinion in International Shoe cast these fictions aside, and made explicit the underlying basis of these decisions: due process does not necessarily require the States to adhere to the unbending territorial limits on jurisdiction set forth in Pennoyer. The validity of assertion of jurisdiction over a nonconsenting defendant who is not present in the forum depends upon whether “the quality and nature of [his] activity” in relation to the forum, 326 U.S., at 319, renders such jurisdiction consistent with “traditional notions of fair play and substantial justice.” Id., at 316 (citation omitted). Subsequent cases have derived from the International Shoe standard the general rule that a State may dispense with in-forum personal service on nonresident defendants in suits arising out of their activities in the State. See generally Helicopteros Nacionales de Colombia v. Hall, 466 U.S., at 414-415. As International Shoe suggests, the defendant’s litigation-related “minimum contacts” may take the place of physical presence as the basis for jurisdiction:
Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant’s person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding on him. Pennoyer v. Neff, 95 U.S. 714, 733. But now that the capias ad respondendum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”
326 U.S., at 316 (citations omitted).
Nothing in International Shoe or the cases that have followed it, however, offers support for the very different proposition petitioner seeks to establish today: that a defendant’s presence in the forum is not only unnecessary to validate novel, nontraditional assertions of jurisdiction, but is itself no longer sufficient to establish jurisdiction. That proposition is unfaithful to both elementary logic and the foundations of our due process jurisprudence. The distinction between what is needed to support novel procedures and what is needed to sustain traditional ones is fundamental, as we observed over a century ago:
[A] process of law, which is not otherwise forbidden, must be taken to be due process of law, if it can show the sanction of settled usage both in England and in this country; but it by no means followed that nothing else can be due process of law.… [That which], in substance, has been immemorially the actual law of the land … therefor[e] is due process of law. But to hold that such a characteristic is essential to due process of law, would be to deny every quality of the law but its age, and to render it incapable of progress or improvement. It would be to stamp upon our jurisprudence the unchangeableness attributed to the laws of the Medes and Persians.
Hurtado v. California, 110 U.S. 516, 528-529 (1884).
The short of the matter is that jurisdiction based on physical presence alone constitutes due process because it is one of the continuing traditions of our legal system that define the due process standard of “traditional notions of fair play and substantial justice.” That standard was developed by analogy to “physical presence,” and it would be perverse to say it could now be turned against that touchstone of jurisdiction.
Petitioner’s strongest argument, though we ultimately reject it, relies upon our decision in Shaffer v. Heitner, 433 U.S. 186 (1977).…
It goes too far to say, as petitioner contends, that Shaffer compels the conclusion that a State lacks jurisdiction over an individual unless the litigation arises out of his activities in the State. Shaffer, like International Shoe, involved jurisdiction over an absent defendant, and it stands for nothing more than the proposition that when the “minimum contact” that is a substitute for physical presence consists of property ownership it must, like other minimum contacts, be related to the litigation. Petitioner wrenches out of its context our statement in Shaffer that “all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny,” 433 U.S., at 212. When read together with the two sentences that preceded it, the meaning of this statement becomes clear:
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.
Shaffer was saying, in other words, not that all bases for the assertion of in personam jurisdiction (including, presumably, in-state service) must be treated alike and subjected to the “minimum contacts” analysis of International Shoe; but rather that quasi in rem jurisdiction, that fictional “ancient form,” and in personam jurisdiction, are really one and the same and must be treated alike—leading to the conclusion that quasi in rem jurisdiction, i.e., that form of in personam jurisdiction based upon a “property ownership” contact and by definition unaccompanied by personal, in-state service, must satisfy the litigation-relatedness requirement of International Shoe. The logic of Shaffer’s holding—which places all suits against absent nonresidents on the same constitutional footing, regardless of whether a separate Latin label is attached to one particular basis of contact—does not compel the conclusion that physically present defendants must be treated identically to absent ones. As we have demonstrated at length, our tradition has treated the two classes of defendants quite differently, and it is unreasonable to read Shaffer as casually obliterating that distinction. International Shoe confined its “minimum contacts” requirement to situations in which the defendant “be not present within the territory of the forum,” 326 U.S., at 316, and nothing in Shaffer expands that requirement beyond that.
It is fair to say, however, that while our holding today does not contradict Shaffer, our basic approach to the due process question is different. We have conducted no independent inquiry into the desirability or fairness of the prevailing in-state service rule, leaving that judgment to the legislatures that are free to amend it; for our purposes, its validation is its pedigree, as the phrase “traditional notions of fair play and substantial justice” makes clear. Shaffer did conduct such an independent inquiry, asserting that “‘traditional 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.” 433 U.S., at 212. Perhaps that assertion can be sustained when the “perpetuation of ancient forms” is engaged in by only a very small minority of the States.4 Where, however, as in the present case, a jurisdictional principle is both firmly approved by tradition and still favored, it is impossible to imagine what standard we could appeal to for the judgment that it is “no longer justified.” While in no way receding from or casting doubt upon the holding of Shaffer or any other case, we reaffirm today our time-honored approach. For new procedures, hitherto unknown, the Due Process Clause requires analysis to determine whether “traditional notions of fair play and substantial justice” have been offended. International Shoe, 326 U.S., at 316. But a doctrine of personal jurisdiction that dates back to the adoption of the Fourteenth Amendment and is still generally observed unquestionably meets that standard.
A few words in response to Justice Brennan’s concurrence: It insists that we apply “contemporary notions of due process” to determine the constitutionality of California’s assertion of jurisdiction. But our analysis today comports with that prescription, at least if we give it the only sense allowed by our precedents. The “contemporary notions of due process” applicable to personal jurisdiction are the enduring “traditional notions of fair play and substantial justice” established as the test by International Shoe. By its very language, that test is satisfied if a state court adheres to jurisdictional rules that are generally applied and have always been applied in the United States.
But the concurrence’s proposed standard of “contemporary notions of due process” requires more: it measures state-court jurisdiction not only against traditional doctrines in this country, including current state-court practice, but against each Justice’s subjective assessment of what is fair and just. Authority for that seductive standard is not to be found in any of our personal jurisdiction cases. It is, indeed, an outright break with the test of “traditional notions of fair play and substantial justice,” which would have to be reformulated “our notions of fair play and substantial justice.”
The subjectivity, and hence inadequacy, of this approach becomes apparent when the concurrence tries to explain why the assertion of jurisdiction in the present case meets its standard of continuing-American-tradition-plus-innate-fairness. Justice Brennan lists the “benefits” Mr. Burnham derived from the State of California—the fact that, during the few days he was there, “his health and safety [were] guaranteed by the State’s police, fire, and emergency medical services; he [was] free to travel on the State’s roads and waterways; he likely enjoy[ed] the fruits of the State’s economy.” Three days’ worth of these benefits strike us as powerfully inadequate to establish, as an abstract matter, that it is “fair” for California to decree the ownership of all Mr. Burnham’s worldly goods acquired during the ten years of his marriage, and the custody over his children. We daresay a contractual exchange swapping those benefits for that power would not survive the “unconscionability” provision of the Uniform Commercial Code. Even less persuasive are the other “fairness” factors alluded to by Justice Brennan. It would create “an asymmetry,” we are told, if Burnham were permitted (as he is) to appear in California courts as a plaintiff, but were not compelled to appear in California courts as defendant; and travel being as easy as it is nowadays, and modern procedural devices being so convenient, it is no great hardship to appear in California courts. The problem with these assertions is that they justify the exercise of jurisdiction over everyone, whether or not he ever comes to California. The only “fairness” elements setting Mr. Burnham apart from the rest of the world are the three-days’ “benefits” referred to above—and even those, do not set him apart from many other people who have enjoyed three days in the Golden State (savoring the fruits of its economy, the availability of its roads and police services) but who were fortunate enough not to be served with process while they were there and thus are not (simply by reason of that savoring) subject to the general jurisdiction of California’s courts. See, e.g., Helicopteros Nacionales de Colombia v. Hall, 466 U.S., at 414-416. In other words, even if one agreed with Justice Brennan’s conception of an equitable bargain, the “benefits” we have been discussing would explain why it is “fair” to assert general jurisdiction over Burnham-returned-to-New-Jersey-after-service only at the expense of proving that it is also “fair” to assert general jurisdiction over Burnham-returned-to-New-Jersey-without-service—which we know does not conform with “contemporary notions of due process.”
There is, we must acknowledge, one factor mentioned by Justice Brennan that both relates distinctively to the assertion of jurisdiction on the basis of personal in-state service and is fully persuasive—namely, the fact that a defendant voluntarily present in a particular State has a “reasonable expectatio[n]” that he is subject to suit there. By formulating it as a “reasonable expectation” Justice Brennan makes that seem like a “fairness” factor; but in reality, of course, it is just tradition masquerading as “fairness.” The only reason for charging Mr. Burnham with the reasonable expectation of being subject to suit is that the States of the Union assert adjudicatory jurisdiction over the person, and have always asserted adjudicatory jurisdiction over the person, by serving him with process during his temporary physical presence in their territory. That continuing tradition, which anyone entering California should have known about, renders it “fair” for Mr. Burnham, who voluntarily entered California, to be sued there for divorce—at least “fair” in the limited sense that he has no one but himself to blame. Justice Brennan’s long journey is a circular one, leaving him, at the end of the day, in complete reliance upon the very factor he sought to avoid: The existence of a continuing tradition is not enough, fairness also must be considered; fairness exists here because there is a continuing tradition.
While Justice Brennan’s concurrence is unwilling to confess that the Justices of this Court can possibly be bound by a continuing American tradition that a particular procedure is fair, neither is it willing to embrace the logical consequences of that refusal—or even to be clear about what consequences (logical or otherwise) it does embrace. Justice Brennan says that “[f]or these reasons [i.e., because of the reasonableness factors enumerated above], as a rule the exercise of personal jurisdiction over a defendant based on his voluntary presence in the forum will satisfy the requirements of due process.” The use of the word “rule” conveys the reassuring feeling that he is establishing a principle of law one can rely upon—but of course he is not. Since Justice Brennan’s only criterion of constitutionality is “fairness,” the phrase “as a rule” represents nothing more than his estimation that, usually, all the elements of “fairness” he discusses in the present case will exist. But what if they do not? Suppose, for example, that a defendant in Mr. Burnham’s situation enjoys not three days’ worth of California “benefits,” but fifteen minutes’ worth. Or suppose we remove one of those “benefits”—“enjoy[ment of] the fruits of the State’s economy”—by positing that Mr. Burnham had not come to California on business, but only to visit his children. Or suppose that Mr. Burnham were demonstrably so impecunious as to be unable to take advantage of the modern means of transportation and communication that Justice Brennan finds so relevant. Or suppose, finally, that the California courts lacked the “variety of procedural devices,” post, at 2125, that Justice Brennan says can reduce the burden upon out-of-state litigants. One may also make additional suppositions, relating not to the absence of the factors that Justice Brennan discusses, but to the presence of additional factors bearing upon the ultimate criterion of “fairness.” What if, for example, Mr. Burnham were visiting a sick child? Or a dying child? Cf. Kulko v. California Superior Court, 436 U.S. 84, 93 (1978) (finding the exercise of long-arm jurisdiction over an absent parent unreasonable because it would “discourage parents from entering into reasonable visitation agreements”). Since, so far as one can tell, Justice Brennan’s approval of applying the in-state service rule in the present case rests on the presence of all the factors he lists, and on the absence of any others, every different case will present a different litigable issue. Thus, despite the fact that he manages to work the word “rule” into his formulation, Justice Brennan’s approach does not establish a rule of law at all, but only a “totality of the circumstances” test, guaranteeing what traditional territorial rules of jurisdiction were designed precisely to avoid: uncertainty and litigation over the preliminary issue of the forum’s competence. It may be that those evils, necessarily accompanying a freestanding “reasonableness” inquiry, must be accepted at the margins, when we evaluate non-traditional forms of jurisdiction newly adopted by the states, see, e.g., Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102 (1987). But that is no reason for injecting them into the core of our American practice, exposing to such a “reasonableness” inquiry the ground of jurisdiction that has hitherto been considered the very baseline of reasonableness, physical presence.
… Nothing we say today prevents individual States from limiting or entirely abandoning the in-state-service basis of jurisdiction. And nothing prevents an overwhelming majority of them from doing so, with the consequence that the “traditional notions of fairness” that this Court applies may change. But the states have overwhelmingly declined to adopt such limitation or abandonment, evidently not considering it to be progress.5 The question is whether armed with no authority other than individual Justices’ perceptions of fairness that conflict with both past and current practice, this Court can compel the states to make such a change on the ground that “due process” requires it. We hold that it cannot.…
Because the Due Process Clause does not prohibit the California courts from exercising jurisdiction over petitioner based on the fact of in-state service of process, the judgment is
Justice WHITE, concurring in part and concurring in the judgment.
I join Part I and Parts II-A, II-B, and II-C of Justice Scalia’s opinion and concur in the judgment of affirmance. The rule allowing jurisdiction to be obtained over a non-resident by personal service in the forum state, without more, has been and is so widely accepted throughout this country that I could not possibly strike it down, either on its face or as applied in this case, on the ground that it denies due process of law guaranteed by the Fourteenth Amendment. Although the Court has the authority under the Amendment to examine even traditionally accepted procedures and declare them invalid, e.g., Shaffer v. Heitner, 433 U.S. 186 (1977), there has been no showing here or elsewhere that as a general proposition the rule is so arbitrary and lacking in common sense in so many instances that it should be held violative of Due Process in every case. Furthermore, until such a showing is made, which would be difficult indeed, claims in individual cases that the rule would operate unfairly as applied to the particular non-resident involved need not be entertained. At least this would be the case where presence in the forum state is intentional, which would almost always be the fact. Otherwise, there would be endless, fact-specific litigation in the trial and appellate courts, including this one. Here, personal service in California, without more, is enough, and I agree that the judgment should be affirmed.
Justice BRENNAN, with whom Justice MARSHALL, Justice BLACKMUN, and Justice O’CONNOR join, concurring in the judgment.
I believe that the approach adopted by Justice Scalia’s opinion today—reliance solely on historical pedigree—is foreclosed by our decisions in International Shoe Co. v. Washington, 326 U.S. 310 (1945), and Shaffer v. Heitner, 433 U.S. 186 (1977). In International Shoe, we held that a state court’s assertion of personal jurisdiction does not violate the Due Process Clause if it is consistent with “traditional notions of fair play and substantial justice.”2 In Shaffer, we stated that “all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.” The critical insight of Shaffer is that all rules of jurisdiction, even ancient ones, must satisfy contemporary notions of due process. No longer were we content to limit our jurisdictional analysis to pronouncements that “[t]he foundation of jurisdiction is physical power,” McDonald v. Mabee, 243 U.S. 90, 91 (1917), and that “every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory.” Pennoyer v. Neff, 95 U.S. 714, 722 (1878). While acknowledging that “history must be considered as supporting the proposition that jurisdiction based solely on the presence of property satisfie[d] the demands of due process,” we found that this factor could not be “decisive.” 433 U.S., at 211-212. We recognized that “‘[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.” Id., at 212 (citations omitted). I agree with this approach and continue to believe that “the minimum-contacts analysis developed in International Shoe … 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.” Id., at 219 (citation omitted) (Brennan, J., concurring in part and dissenting in part).
Tradition, though alone not dispositive, is of course relevant to the question whether the rule of transient jurisdiction is consistent with due process.7 Tradition is salient not in the sense that practices of the past are automatically reasonable today; indeed, under such a standard, the legitimacy of transient jurisdiction would be called into question because the rule’s historical “pedigree” is a matter of intense debate. The rule was a stranger to the common law and was rather weakly implanted in American jurisprudence “at the crucial time for present purposes: 1868, when the Fourteenth Amendment was adopted.” Ante, at 2111. For much of the 19th century, American courts did not uniformly recognize the concept of transient jurisdiction, and it appears that the transient rule did not receive wide currency until well after our decision in Pennoyer v. Neff, 95 U.S. 714 (1878).
Rather, I find the historical background relevant because, however murky the jurisprudential origins of transient jurisdiction, the fact that American courts have announced the rule for perhaps a century (first in dicta, more recently in holdings) provides a defendant voluntarily present in a particular state today “clear notice that [he] is subject to suit” in the forum. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Regardless of whether Justice Story’s account of the rule’s genesis is mythical, our common understanding now, fortified by a century of judicial practice, is that jurisdiction is often a function of geography. The transient rule is consistent with reasonable expectations and is entitled to a strong presumption that it comports with due process.
By visiting the forum State, a transient defendant actually “avail[s]” himself, Burger King, of significant benefits provided by the State. His health and safety are guaranteed by the State’s police, fire, and emergency medical services; he is free to travel on the State’s roads and waterways; he likely enjoys the fruits of the State’s economy as well. Moreover, the Privileges and Immunities Clause of Article IV prevents a state government from discriminating against a transient defendant by denying him the protections of its law or the right of access to its courts. Subject only to the doctrine of forum non conveniens, an out-of-state plaintiff may use state courts in all circumstances in which those courts would be available to state citizens. Without transient jurisdiction, an asymmetry would arise: a transient would have the full benefit of the power of the forum State’s courts as a plaintiff while retaining immunity from their authority as a defendant. See Maltz, Sovereign Authority, Fairness, and Personal Jurisdiction: The Case for the Doctrine of Transient Jurisdiction, 66 Wash. U. L.Q. 671, 698-699 (1988).
The potential burdens on a transient defendant are slight. “[M]odern transportation and communications have made it much less burdensome for a party sued to defend himself” in a State outside his place of residence. That the defendant has already journeyed at least once before to the forum—as evidenced by the fact that he was served with process there—is an indication that suit in the forum likely would not be prohibitively inconvenient. Finally, any burdens that do arise can be ameliorated by a variety of procedural devices. For these reasons, as a rule the exercise of personal jurisdiction over a defendant based on his voluntary presence in the forum will satisfy the requirements of due process.
In this case, it is undisputed that petitioner was served with process while voluntarily and knowingly in the State of California. I therefore concur in the judgment.
Justice STEVENS, concurring in the judgment.
As I explained in my separate writing, I did not join the Court’s opinion in Shaffer v. Heitner, 433 U.S. 186 (1977), because I was concerned by its unnecessarily broad reach. Id., at 217-219 (opinion concurring in judgment). The same concern prevents me from joining either Justice Scalia’s or Justice Brennan’s opinion in this case. For me, it is sufficient to note that the historical evidence and consensus identified by Justice Scalia, the considerations of fairness identified by Justice Brennan, and the common sense displayed by Justice White, all combine to demonstrate that this is, indeed, a very easy case.* Accordingly, I agree that the judgment should be affirmed.
Questions and Comments
(1) Which way do you think Justice Scalia would have voted, had he been on the Court, in Shaffer v. Heitner, page 489 infra? Compare his opinion for the Court in Sun Oil v. Wortman, page 333 supra. Is there any real reason that due process should be more tied to tradition than any other constitutional provision? Or is it simply a result of the coincidence that the justices who penned certain important personal jurisdiction precedents happened “subjectively” to choose to phrase the test in terms of tradition?
(2) In response to Justice Scalia’s charges of subjectivity, Professor Weintraub offers one objective basis for rejecting transient jurisdiction: “[T]he use of the defendant’s temporary presence in the forum as grounds for personal jurisdiction is contrary to the consensus of civilized nations and, if used against foreigners, may violate international law.” Weintraub, An Objective Basis for Rejecting Transient Jurisdiction, in The Future of Personal Jurisdiction: A Symposium on Burnham v. Superior Court, 22 Rutgers L.J. 611 (1991).
(3) In Grace v. MacArthur, 170 F. Supp. 442 (E.D. Ark. 1959), jurisdiction was based on service of process while in an airplane flying over the territory. Would such service meet Justice Scalia’s test of tradition? Would it satisfy the test set out in the 1986 revisions to the Restatement Second, cited in the opinion?
(4) “Tag” jurisdiction is exercised regularly in human rights litigation between alien plaintiffs against alien defendants alleging human rights abuses committed abroad. For example, in Kadic v. Karadzic, 70 F.3d 232 (2d Cir. 1995), Radovan Karadzic, president of the self-proclaimed Bosnian-Serb republic of “Srpska,” was served in New York while attending a conference at the United Nations. Karadzic left New York soon thereafter, and a jury returned a default judgment worth $4.5 billion. To date the judgment has not been enforced.
(5) Most courts refrain from exercising “tag jurisdiction” when the defendant is brought into the state by fraud or unlawful force for the purpose of service of process. See, e.g., May Dept. Stores Co. v. Wilansky, 900 F. Supp. 1154 (E.D. Mo. 1995); Wyman v. Newhouse, 93 F.2d 313 (2d Cir. 1937); see also Restatement (Second) of Conflict of Laws §82 (1971); compare Coyne v. Grupo Industrial Trieme, S.A. de C.V., 105 F.R.D. 627, 630 n.6 (D.D.C. 1985) (extending immunity from service given defendants lured into the jurisdiction by fraud to any later attempts to serve the defendant pursuant to a long-arm statute). Courts disagree about the legal basis for this rule. Most courts hold that jurisdiction cannot be acquired when service of process is obtained fraudulently. See, e.g., Wyman, 93 F.2d at 315. Some courts, as well as the Restatement, conclude that jurisdiction is technically satisfied but that courts should refrain from exercising jurisdiction in favor of one who has obtained service of his summons by unlawful means. See, e.g., Economy Electric Co. v. Automatic Electric Co., 118 S.E. 3 (N.C. 1923); Restatement §82 cmt. f (1971). Does anything turn on this distinction?
Apart from its seaminess, what is objectionable about fraudulent inducement into the jurisdiction? Is basing judicial jurisdiction upon presence procured by fraud any worse than basing it on presence completely unrelated to the lawsuit? Is the difference that the defendant who enters the jurisdiction voluntarily and without fraudulent inducement knows the danger that may befall him and therefore waives the right to be free of suit by entering?
2. Purposeful Availment and Foreseeability
World-Wide Volkswagen Corp. v. Woodson
444 U.S. 286 (1980)
Justice WHITE delivered the opinion of the Court.
The issue before us is whether, consistently with the Due Process Clause of the Fourteenth Amendment, an Oklahoma court may exercise in personam jurisdiction over a nonresident automobile retailer and its wholesale distributor in a products liability action, when the defendants’ only connection with Oklahoma is the fact that an automobile sold in New York to New York residents became involved in an accident in Oklahoma.
Respondents Harry and Kay Robinson purchased a new Audi automobile from petitioner Seaway Volkswagen, Inc. (Seaway) in Massena, N.Y., in 1976. The following year the Robinson family, who resided in New York, left that State for a new home in Arizona. As they passed through the State of Oklahoma, another car struck their Audi in the rear, causing a fire which severely burned Kay Robinson and her two children.1
The Robinsons subsequently brought a products liability action in the District Court for Creek County, Okla., claiming that their injuries resulted from defective design and placement of the Audi’s gas tank and fuel system. They joined as defendants the automobile’s manufacturer, Audi NSU Auto Union Aktiengesellschaft (Audi); its importer, Volkswagen of America, Inc. (Volkswagen); its regional distributor, petitioner World-Wide Volkswagen Corporation (World-Wide); and its retail dealer, petitioner Seaway. Seaway and World-Wide entered special appearances,3 claiming that Oklahoma’s exercise of jurisdiction over them would offend the limitations on the State’s jurisdiction imposed by the Due Process Clause of the Fourteenth Amendment.
The facts presented to the District Court showed that World-Wide is incorporated and has its business office in New York. It distributes vehicles, parts and accessories, under contract with Volkswagen, to retail dealers in New York, New Jersey, and Connecticut. Seaway, one of these retail dealers, is incorporated and has its place of business in New York. Insofar as the record reveals, Seaway and World-Wide are fully independent corporations whose relations with each other and with Volkswagen and Audi are contractual only. Respondents adduced no evidence that either World-Wide or Seaway does any business in Oklahoma, ships or sells any products to or in that State, has an agent to receive process there, or purchases advertisements in any media calculated to reach Oklahoma. In fact, as respondents’ counsel conceded at oral argument, there was no showing that any automobile sold by World-Wide or Seaway has ever entered Oklahoma with the single exception of the vehicle involved in the present case.
Despite the apparent paucity of contacts between petitioners and Oklahoma, the District Court rejected their constitutional claim and reaffirmed that ruling in denying petitioners’ motion for reconsideration. Petitioners then sought a writ of prohibition in the Supreme Court of Oklahoma to restrain the District Judge, respondent Charles S. Woodson, from exercising in personam jurisdiction over them. They renewed their contention that because they had no “minimal contacts,” with the State of Oklahoma, the actions of the District Judge were in violation of their rights under the Due Process Clause.
The Supreme Court of Oklahoma denied the writ, holding that personal jurisdiction over petitioners was authorized by Oklahoma’s “Long-Arm” Statute, Okla. Stat., Tit. 12, §1701.3(a)(4) (1961). Although the Court noted that the proper approach was to test jurisdiction against both statutory and constitutional standards, its analysis did not distinguish these questions, probably because §1701.03(a)(4) has been interpreted as conferring jurisdiction to the limits permitted by the United States Constitution. The Court’s rationale was contained in the following paragraph:
In the case before us, the product being sold and distributed by the petitioners is by its very design and purpose so mobile that petitioners can foresee its possible use in Oklahoma. This is especially true of the distributor, who has the exclusive right to distribute such automobile [sic] in New York, New Jersey and Connecticut. The evidence presented below demonstrated that goods sold and distributed by the petitioners were used in the State of Oklahoma, and under the facts we believe it reasonable to infer, given the retail value of the automobile, that the petitioners derive substantial income from automobiles which from time to time are used in the State of Oklahoma. This being the case, we hold that under the facts presented, the trial court was justified in concluding that the petitioners derive substantial revenue from goods used or consumed in this State.
We granted certiorari to consider an important constitutional question with respect to state-court jurisdiction and to resolve a conflict between the Supreme Court of Oklahoma and the highest courts of at least four other States. We reverse.
As has long been settled, and as we reaffirm today, a state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist “minimum contacts” between the defendant and the forum State. International Shoe Co. v. Washington. The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.
The protection against inconvenient litigations is typically described in terms of “reasonableness” or “fairness.” We have said that the defendant’s contacts with the forum State must be such that maintenance of the suit “does not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington, quoting Milliken v. Meyer. The relationship between the defendant and the forum must be such that it is “reasonable … to require the corporation to defend the particular suit which is brought there.” Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum State’s interest in adjudicating the dispute, see McGee v. International Life Ins. Co.; the plaintiff’s interest in obtaining convenient and effective relief, see Kulko v. Superior Court, at least when that interest is not adequately protected by the plaintiff’s power to choose the forum, cf. Shaffer v. Heitner; 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, see Kulko v. Superior Court.
The limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient litigation, have been substantially relaxed over the years. As we noted in McGee v. International Life Ins. Co., this trend is largely attributable to a fundamental transformation in the American economy:
Today many commercial transactions touch two or more States and may involve parties separated by the full continent. With this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity.
The historical developments noted in McGee, of course, have only accelerated in the generation since that case was decided.
Nevertheless, we have never accepted the proposition that state lines are irrelevant for jurisdictional purposes, nor could we and remain faithful to the principles of interstate federalism embodied in the Constitution. The economic interdependence of the States was foreseen and desired by the Framers. In the Commerce Clause, they provided that the Nation was to be a common market, a “free trade unit” in which the States are debarred from acting as separable economic entities. But the Framers also intended that the States retain many essential attributes of sovereignty, including, in particular, the sovereign power to try causes in their courts. The sovereignty of each State, in turn, implied a limitation on the sovereignty of all of its sister States—a limitation express or implicit in both the original scheme of the Constitution and the Fourteenth Amendment.
Thus, the Due Process Clause “does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations.” International Shoe Co. v. Washington. Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment. Hanson v. Denckla.
Applying these principles to the case at hand, we find in the record before us a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the privileges and benefits of Oklahoma law. They solicit no business there either through salespersons or through advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve the Oklahoma market. In short, respondents seek to base jurisdiction on one, isolated occurrence and whatever inferences can be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma.
It is argued, however, that because an automobile is mobile by its very definition and purpose it was “foreseeable” that the Robinsons’ Audi would cause injury in Oklahoma. Yet “foreseeability” alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause.… In Kulko v. Superior Court, supra, it was surely “foreseeable” that a divorced wife would move to California from New York, the domicile of the marriage, and that a minor daughter would live with the mother. Yet we held that California could not exercise jurisdiction in a child-support action over the former husband who had remained in New York.
If foreseeability were the criterion, a local California tire retailer could be forced to defend in Pennsylvania when a blowout occurs there: see Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc.; a Wisconsin seller of a defective automobile jack could be haled before a distant court for damage caused in New Jersey; or a Florida soft drink concessionaire could be summoned to Alaska to account for injuries happening there. Every seller of chattels would in effect appoint the chattel his agent for service of process. His amenability to suit would travel with the chattel. We recently abandoned the outworn rule of Harris v. Balk, that the interest of a creditor in a debt could be extinguished or otherwise affected by any State having transitory jurisdiction over the debtor. Shaffer v. Heitner. Having interred the mechanical rule that a creditor’s amenability to a quasi in rem action travels with his debtor, we are unwilling to endorse an analogous principle in the present case.11
This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. The Due Process Clause, by ensuring the “orderly administration of the laws,” gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.
When a corporation “purposefully avails itself of the privilege of conducting activities within the forum State,” it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other 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 owners or to others. The 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. Compare Gray v. American Radiator & Standard Sanitary Corp.
But there is no such or similar basis for Oklahoma jurisdiction over World-Wide or Seaway in this case. Seaway’s sales are made in Massena, N.Y. World-Wide’s market, although substantially larger, is limited to dealers in New York, New Jersey, and Connecticut. There is no evidence of record that any automobiles distributed by World-Wide are sold to retail customers outside this tri-State area. It is foreseeable that the purchasers of automobiles sold by World-Wide and Seaway may take them to Oklahoma. But the mere “unilateral activity of those who claim some relationship with a non-resident defendant cannot satisfy the requirement of contact with the forum State.” Hanson v. Denckla.
In a variant on the previous argument, it is contended that jurisdiction can be supported by the fact that petitioners earn substantial revenue from goods used in Oklahoma. The Oklahoma Supreme Court so found, drawing the inference that because one automobile sold by petitioners had been used in Oklahoma, others might have been used there also. While this inference seems less than compelling on the facts of the instant case, we need not question the Court’s factual findings in order to reject its reasoning.
This argument seems to make the point that the purchase of automobiles in New York, from which the petitioners earn substantial revenue, would not occur but for the fact that the automobiles are capable of use in distant States like Oklahoma. Respondents observe that the very purpose of an automobile is to travel, and that travel of automobiles sold by petitioners is facilitated by an extensive chain of Volkswagen service centers throughout the Country, including some in Oklahoma.12 However, financial benefits accruing to the defendant from a collateral relation to the forum State will not support jurisdiction if they do not stem from a constitutionally cognizable contact with that State. See Kulko v. Superior Court. In our view, whatever marginal revenues petitioners may receive by virtue of the fact that their products are capable of use in Oklahoma is far too attenuated a contact to justify that State’s exercise of in personam jurisdiction over them.
Justice BRENNAN, dissenting.
The Court’s opinions focus tightly on the existence of contacts between the forum and the defendant. In so doing, they accord too little weight to the strength of the forum State’s interest in the case and fail to explore whether there would be any actual inconvenience to the defendant. The essential inquiry in locating the constitutional limits on state court jurisdiction over absent defendants is whether the particular exercise of jurisdiction offends “traditional notions of fair play and substantial justice.” The clear focus in International Shoe was on fairness and reasonableness. The Court specifically declined to establish a mechanical test based on the quantum of contacts between a State and the defendant.… The existence of contacts, so long as there were some, was merely one way of giving content to the determination of fairness and reasonableness.
Another consideration is the actual burden a defendant must bear in defending the suit in the forum. Because lesser burdens reduce the unfairness to the defendant, jurisdiction may be justified despite less significant contacts. The burden, of course, must be of constitutional dimension. Due process limits on jurisdiction do not protect a defendant from all inconvenience of travel, and it would not be sensible to make the constitutional rule turn solely on the number of miles the defendant must travel to the courtroom.1 Instead, the constitutionally significant “burden” to be analyzed relates to the mobility of the defendant’s defense. For instance, if having to travel to a foreign forum would hamper the defense because witness or evidence of the defendant himself were immobile, or if there were a disproportionately large number of witnesses or amount of evidence that would have to be transported at the defendant’s expense, or if being away from home for the duration of the trial would work some special hardship on the defendant, then the Constitution would require special consideration for the defendant’s interests.
That considerations other than contacts between the forum and the defendant are relevant necessarily means that the Constitution does not require that trial be held in the State which has the “best contacts” with the defendant. The defendant has no constitutional entitlement to the best forum or, for that matter, to any particular forum. Under even the most restrictive view of International Shoe, several States could have jurisdiction over a particular cause of action. We need only determine whether the forum States in these cases satisfy the constitutional minimum.…
[T]he interest of the forum State and its connection to the litigation is strong. The automobile accident underlying the litigation occurred in Oklahoma. The plaintiffs were hospitalized in Oklahoma when they brought suit. Essential witnesses and evidence were in Oklahoma. See Shaffer v. Heitner. The State has a legitimate interest in enforcing its laws designed to keep its highway system safe, and the trial can proceed at least as efficiently in Oklahoma as anywhere else.
The petitioners are not unconnected with the forum. Although both sell automobiles within limited sales territories, each sold the automobile which in fact was driven to Oklahoma where it was involved in an accident.8 It may be true, as the Court suggests, that each sincerely intended to limit its commercial impact to the limited territory, and that each intended to accept the benefits and protection of the laws only of those States within the territory. But obviously these were unrealistic hopes that cannot be treated as an automatic constitutional shield.9
An automobile simply is not a stationary item or one designed to be used in one place. An automobile is intended to be moved around. Someone in the business of selling large numbers of automobiles can hardly plead ignorance of their mobility or pretend that the automobiles stay put after they are sold. It is not merely that a dealer in automobiles foresees that they will move. The dealer actually intends that the purchasers will use the automobiles to travel to distant States where the dealer does not directly “do business.” The sale of an automobile does purposefully inject the vehicle into the stream of interstate commerce so that it can travel to distant States.
The Court accepts that a State may exercise jurisdiction over a distributor which “serves” that State “indirectly” by “deliver[ing] its products into the stream of commerce with the expectation that they will [be] purchased by consumers in other States.” It is difficult to see why the Constitution should 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, using them as the dealer knew the customer would, took them there.11 In each case the seller purposefully injects the goods into the stream of commerce and those goods predictably are used in the forum State.
Furthermore, an automobile seller derives substantial benefits from States other than its own. A large part of the value of automobiles is the extensive, nationwide network of highways. Significant portions of that network have been constructed by and are maintained by the individual States, including Oklahoma. The States, through their highway programs, contribute in a very direct and important way to the value of petitioner’s business. Additionally, a network of other related dealerships with their service departments operate throughout the country under the protection of the laws of the various States, including Oklahoma, and enhance the value of petitioners’ businesses by facilitating their customers’ traveling.
Thus, the Court errs in its conclusion (emphasis added) that “petitioners have no ‘contacts, ties, or relations’” with Oklahoma. There obviously are contacts, and given Oklahoma’s connection to the litigation, the contacts are sufficiently significant to make it fair and reasonable for the petitioners to submit to Oklahoma’s jurisdiction.
It may be that affirmance of the judgments in these cases would approach the outer limits of International Shoe’s jurisdictional principle. But that principle, with its almost exclusive focus on the rights of defendants, may be outdated. As Mr. Justice Marshall wrote in Shaffer v. Heitner, “‘[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.” …
The Court opinion suggests that the defendant ought to be subject to a State’s jurisdiction only if he has contacts with the State “such that he should reasonably anticipate being haled into court there.”18 There is nothing unreasonable or unfair, however, about recognizing commercial reality. Given the tremendous mobility of goods and people, and the inability of businessmen to control where goods are taken by customers (or retailers), I do not think that the defendant should be in complete control of the geographical stretch of his amenability to suit. Jurisdiction is no longer premised on the notion that nonresident defendants have somehow impliedly consented to suit. People should understand that they are held responsible for the consequences of their actions and that in our society most actions have consequences affecting many States. When an action in fact causes injury in another State, the actor should be prepared to answer for it there unless defending in that State would be unfair for some reason other than that a State boundary must be crossed.19
In effect the Court is allowing defendants to assert the sovereign rights of their home States. The expressed fear is that otherwise all limits on personal jurisdiction would disappear. But the argument’s premise is wrong. I would not abolish limits on jurisdiction or strip state boundaries of all significance; I would still require the plaintiff to demonstrate sufficient contacts among the parties, the forum, and the litigation to make the forum a reasonable State in which to hold the trial.
Justice MARSHALL, with whom Justice BLACKMUN joins, dissenting.…
This is a difficult case, and reasonable minds may differ as to whether respondents have alleged a sufficient “relationship among the defendant[s], the forum, and the litigation,” Shaffer v. Heitner, to satisfy the requirements of International Shoe. I am concerned, however, that the majority has reached its result by taking an unnecessarily narrow view of petitioners’ forum-related conduct. The majority asserts that “respondents seek to base jurisdiction on one, isolated occurrence and whatever inferences can be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma.” If that were the case, I would readily agree that the minimum contacts necessary to sustain jurisdiction are not present. But the basis for the assertion of jurisdiction is not the happenstance that an individual over whom petitioners had no control made a unilateral decision to take a chattel with him to a distant State. Rather, jurisdiction is premised on the deliberate and purposeful actions of the defendants themselves in choosing to become part of a nationwide, indeed a global, network for marketing and servicing automobiles.