TABLE OF CONTENTS
A. Brief Summary of Personal Jurisdiction Law
Personal jurisdiction concerns the power of a court to decide a case between the parties. In order for a court to exercise jurisdiction there must be a statutory or common law source of jurisdiction, which does not surpass the limitations imposed by constitutional due process.
Historically, personal jurisdiction law has changed over time reflecting changes of a more mobile society. Initially, personal jurisdiction would only be found if the party was physically present in the forum state. The U.S. Supreme Court later reformulated this approach to allow jurisdiction over non-resident individuals and entities based on the "minimum contacts" of the out-of-state party.
Physical presence in a state is always a basis for personal jurisdiction. In Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565 (1877) states were permitted to exercise jurisdiction of people and property within their territorial borders. The Supreme Court has upheld physical presence in a forum state as the basis for personal jurisdiction, even when an out-of-state individual enters the forum state for a brief time. See Burnham v. Superior Court, 495 U.S. 604, 110 S.Ct. 2105, 109 L.Ed.2d 631 (1990). Physical presence in the forum state also satisfies the requirement of constitutional due process.
2. Non-Resident Motorist Statues
Non-resident motorist statutes allowed states to have personal jurisdiction over out of state residents. In Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091 (1927) the Supreme Court upheld a Massachusetts statute which permitted jurisdiction over any non-resident who was operating a motor vehicle within the state and was involved in an accident. After the court upheld these statutes, many states began passing statutes that allowed jurisdiction over out-of-state defendants for a variety of causes of actions.
3. Jurisdiction over Out of State Defendants
There are two requirements for a court to exercise personal jurisdiction over an out of state defendant. The first is that the state must have statutory authority that grants the court jurisdiction over the out of state defendant. The second requirement is the Due Process Clause of the Constitution must be satisfied. The Supreme Court in a number of cases has limited the reach of state statutory authority because of violations of constitutional due process.
a. Long Arm Statutes
Today almost all states have "long-arm" statutes which allow the state to exercise jurisdiction over an out-of-state defendant. The name "long-arm" comes from the purpose of these statutes, which is to reach into another state and exercise jurisdiction over a nonresident defendant.
One of the first long arm statutes was enacted in Illinois. This statute states in part:
(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:
(1) The transaction of any business within this State;
(2) The commission of a tortious act within this State;
(3) The ownership, use, or possession of any real estate situated in this State; . . . . [The act goes on to list other causes of action that would allow Illinois jurisdiction over the out-of-state resident.]
(c) A court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States. [735 ILCS 5/2-209 (West 1999).]
The Uniform Interstate and International Procedure Act (UIIPA), which is a model long arm statute that several states have enacted, states:
§ 1.02. [Personal Jurisdiction Based upon Enduring Relationship].
A court may exercise personal jurisdiction over a person domiciled in, organized under the laws of, or maintaining his or its principal place of business in, this state as to any [cause of action] [claim for relief].
§ 1.03. [Personal Jurisdiction Based on Conduct].
(a) A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a [cause of action] [claim for relief] arising from the person's
(1) transacting any business in this state;
(2) contracting to supply services or things in this state;
(3) causing tortious injury by an act or omission in this state;
(4) causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this state; [or]
(5) having an interest in, using, or possessing real property in this state ; [or]
(6) contracting to insure any person, property, or risk located within this state at the time of contracting].
(b) When jurisdiction over a person is based solely upon this section, only a [cause of action] [claim for relief] arising from acts enumerated in this section may be asserted against him.
Uniform Interstate and International Procedure Act, 13 U.L.A. 355 (1986 ed.)
Section (c) of the Illinois long arm statute is often termed the "catchall" phrase. It allows the state to assert the maximum possible jurisdiction allowed by constitutional due process requirements. The Uniform Interstate and International Procedure Act (UIIPA) does not contain such a catchall phrase. The UIIPA only allows jurisdiction over claims enumerated by the statute.
b. Constitutional Due Process Requirements
1. Minimum Contacts
The Supreme Court in International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) first adopted a new standard for jurisdiction over out-of-state non resident defendants. The case involved a Washington court attempting to assert jurisdiction over a corporation that was incorporated in Delaware and had a principal place of business in Missouri. The court allowed jurisdiction because there was sufficient "minimum contacts" with Washington. The court explained,
Due process requires only that in order to subject a defendant to a judgement in personam [personal jurisdiction], 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'. International Shoe v. Washington, 326 U.S., at 316, 66 S.Ct. at 158.
The court also explained that the minimum contacts standard was not a mechanical test, but one that depended on the "quality and nature of the activity in relation to the fair and orderly administration of laws." 326 U.S. at 319, 66 S.Ct. at 160. If the nature and quality of the activities is continuous and systematic, a court will have general jurisdiction over the entity. General jurisdiction allows a court to decide any cause of action over the defendant, even if the activity occurred out of state. If the nature of the activity is of an isolated nature, a court would only have specific jurisdiction. Specific jurisdiction only allows a court to exercise jurisdiction for a cause of action which arises from the defendant's activities within the forum state.
2. Reasonable Anticipation
In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Supreme Court stated the defendants contact with the forum state should also be foreseeable to satisfy the due process requirements for personal jurisdiction.
The Court ruled that an Oklahoma State court did not have jurisdiction over out-of-state defendants in a car accident that occurred in Oklahoma. The defendants, a New York car dealer and a New England regional distributor, sold the plaintiffs, then residents of New York, a car in New York. The plaintiffs subsequently moved to Arizona, and while traveling through Oklahoma got into an accident caused by the allegedly defective car.
The Supreme Court held that Oklahoma did not have jurisdiction over the distributor or dealer of the car, both of which did not ever sell cars in Oklahoma or conduct any business in Oklahoma. Here, the court found that the distributor and dealership had not "purposefully availed" themselves of the privilege of conducting business in Oklahoma. 444 U.S. at 297, 100 S.Ct. at 567. The court stated the "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." Id. The court did distinguish this case from a situation when a product is sold because of the "efforts of the manufacturer or distributor to serve, directly, or indirectly, the market for its product in other States". Id.
3. Purposefully Directed Activities
In a fractured decision, the Supreme Court in Asahi Metal Indus. Co v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) held that "mere awareness" is not sufficient to satisfy the minimum contacts test. In this case a foreign defendant, Asahi Metal Industries, was aware that the tire valves it manufactured, sold and transported would find their way to California. The issue was whether the awareness that the tire valves would find their way to California was sufficient for jurisdiction. The court held that a defendant's awareness is not sufficient to satisfy Due Process. Instead, there must be "an action of the defendant purposefully directed toward the forum state." 480 U.S. at 112, 107 S.Ct. at 1032. Examples of these actions may include advertising in the forum state or providing regular advice to customers in the forum state.
4. Effects Cases
In the "effects" cases, the Supreme Court based jurisdiction on the principle that the defendant knew that her action would be injurious to the plaintiff, therefore she must reasonably anticipate being haled into court where the injury occurred. The "effects" cases are of particular importance in cyberspace because conduct in cyberspace often has effects in various jurisdictions.
In Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) the actress Shirley Jones who worked and lived in California brought a libel suit in California against a reporter and executive for the National Enquirer. The defendant had only been to California twice, and neither of these visits was connected in any manner with the Jones claim of libel. However, the court held that because Jones caused the story to the published which he knew would have a "potentially devastating impact . . the brunt of that injury would be felt by [plaintiff] in the state in which she lives and work and in which the National Enquirer has its largest circulation," the defendant must "reasonably anticipate being haled into court there." 465 U.S. at 784, 104 S.Ct. at 1484. The court in Calder emphasized was this was a case of an intentional tort that was highly foreseeable to cause damage in California. The court also found significant that the effects of the article were centered in California, both in the content of the story as well as where the harm would be suffered. Thus the Calder case is considered a classic effects case, because jurisdiction was based on the effects of the defendants conduct.
In another effects case, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) concerned allegedly libelous statements made in Hustler magazine. The plaintiff, brought the action in New Hampshire, despite not being a resident of New Hampshire. Hustler magazine's only contacts with the forum were the 10,000 to 15,000 copies of its magazine it sold every month. This lead the court to the conclusion that Hustler's contacts with New Hampshire could not "by any stretch of the imagination be characterized as random, isolated or fortuitous." 465 U.S. at 774, 104 S.Ct. at 1478. The court then continued its analysis by looking at the additional factors that bore on the fundamental fairness of Hustler Magazine being sued in a distant forum. An important element in the court's analysis was that New Hampshire had a legitimate interest in the controversy, despite the fact that the suit was brought by a nonresident. The basis for the legitimate interest was the injury to the state's residents by being misled by the defendants statements.Go to the next unit of this module