Case Title: Nutri-West v. Gibson

Citation: 

Docket Number: 87-266

State: wyoming

Court: Wyoming Supreme Court

Date: 1988-11-23T00:00:00Z

Document:
Nutri-West v. Gibson1988 WY 146764 P.2d 693Case Number: 87-266Decided: 11/23/1988Supreme Court of Wyoming
NUTRI-WEST, ALSO KNOWN AS 
NUTRI-WEST MANUFACTURING COMPANY, AND NUTRITIONCENTER, INCORPORATED, APPELLANT 
(PLAINTIFF),

v.

BETTY G. GIBSON, JAMES E. 
GIBSON, ROBERT D. DAVIES AND KATHLEEN N. DAVIES, INDIVIDUALLY AND DOING BUSINESS 
AS NUTRI-WEST OF CALIFORNIA, APPELLEES 
(DEFENDANTS).

Appeal from the District 
Court, ConverseCounty, Dan Spangler, 
J.

J. Patrick Hand 
of Hand, Hand & Hand, Douglas, for appellant.

Stuart R. Day 
(argued), of Williams, Porter, Day & Neville, Casper, and Lawrence M. Kahn of Perona, Langer, LaTorraca 
& Beck, Long Beach, 
Cal., for appellees.

Before CARDINE, C.J., and THOMAS, URBIGKIT, and 
MACY, JJ., and BROWN, J., Retired.*

* Retired June 30, 
1988.

CARDINE, Chief 
Justice.

[¶1.]     This case concerns the 
validity of the so-called "transient jurisdiction" doctrine, which provides that 
personal service upon a nonresident individual who is temporarily present in a 
state is a sufficient basis for the exercise of personal jurisdiction over the 
individual. We conclude that the transient rule is still valid, and we reverse 
the district court's order dismissing appellant's complaint for lack of personal 
jurisdiction. Addressing a related issue, we hold that the district court 
acquired personal jurisdiction over appellees' partnership by personal service 
upon a partner while present in the state, but not over unserved nonresident 
partners in their individual capacities.

FACTS

[¶2.]     In October or November 
of 1984, Paul White, manager of appellant Nutri-West, met appellee Betty Gibson 
at a chiropractor's meeting in Omaha, Nebraska. About a month later, Mr. White 
called Ms. Gibson in California and asked if 
she would be interested in an exclusive California distributorship for Nutri-West 
products. On two occasions, Mr. White flew to California and met with Ms. Gibson, and 
ultimately Ms. Gibson agreed to the distributorship. Mr. White mailed Ms. Gibson 
a written distributorship contract which was signed in California by Ms. Gibson, 
her husband James Gibson, Robert Davies and his wife Kathleen 
Davies.

[¶3.]     The Gibsons and the 
Davies formed a partnership called Nutri-West of California. As a distributor of appellant's 
products, Nutri-West of California solicited 
sales of Nutri-West products in California, 
ordered the products by telephone or mail from appellant's Douglas, Wyoming office, 
and sold them in California. As the business relationship 
progressed, appellant became unhappy with appellees' performance and, in June 
1987, filed an action for declaratory judgment and injunction terminating the 
distributorship agreement. Ms. Gibson came to Douglas, Wyoming to attend a convention sponsored by 
appellant, where, on June 27, 1987, she was personally served with four copies 
of the complaint and four summonses naming herself and the other three 
individual appellees as defendants.

[¶4.]     Appellees entered a 
special appearance to quash service and contest jurisdiction, contending that 
the service was defective and that the court's exercise of personal jurisdiction 
over them violated their due process rights under the federal and Wyoming constitutions. 
After affidavits and briefs were filed, the district court dismissed appellant's 
complaint because "the defendants [did] not have sufficient contacts with this 
state to allow a Wyoming court to exercise jurisdiction over 
them." Appellant Nutri-West appeals from the order of dismissal, contending that 
the district court erred in applying the minimum contacts test to determine 
personal jurisdiction over Ms. Gibson, the other individual partners, and the 
partnership.

JURISDICTION OVER MS. 
GIBSON

[¶5.]     In determining personal 
jurisdiction, we must first decide whether the service requirements of Rule 4, 
W.R.C.P., have been met. If Rule 4 is satisfied, we must then determine whether 
the court's exercise of jurisdiction is consistent with due process. See First 
Wyoming Bank, N.A., Rawlins v. Trans Mountain Sales & Leasing, Inc., 
Wyo., 602 P.2d 1219 (1979). With respect to Ms. Gibson, there appears to be no deficiency in 
service of process. Accordingly, we will focus on whether due process 
considerations precluded the district court from exercising personal 
jurisdiction over her.

[¶6.]     W.S. 5-1-107(a), 
provides that a "Wyoming court may exercise 
jurisdiction on any basis not inconsistent with the Wyoming or United States 
Constitution." This statute extends state court jurisdiction in Wyoming to the 
constitutionally permissible limit. Shanks v. Westland Equipment and Parts Co., 668 F.2d 1165 
(10th Cir. 1982). The principal question in this appeal is whether it is 
constitutionally permissible to predicate personal jurisdiction on temporary 
physical presence and personal service within the forum 
state.

[¶7.]     The continued vitality 
of jurisdiction based on physical presence, sometimes called "transient" 
jurisdiction, has been discussed by many commentators and several courts. While 
the commentators have been largely critical of the doctrine,1 most courts have concluded that it 
is still valid.2 In urging that transient 
jurisdiction is no longer constitutionally permissible, appellees rely heavily 
on the following statement contained in Shaffer v. Heitner, 433 U.S. 186, 97 S. Ct. 2569, 2584, 53 L. Ed. 2d 683 (1977):

"[A]ll assertions of 
state-court jurisdiction must be evaluated according to the standards set forth 
in International Shoe [326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, 
161 A.L.R. 1057 (1945)] and its progeny."

Contrary to 
appellees' assertions, this statement does not require minimum contacts 
analysis. Instead, it merely requires that the standards set forth in 
International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, 
161 A.L.R. 1057 (1945), and its progeny must be met. In International Shoe, the 
Court recognized an exception from minimum contacts analysis when the defendant 
is present in the forum state:

"[D]ue 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.'" (emphasis added and citation omitted) 66 S. Ct.  at 
158.

See also 
Amusement Equipment, Inc. v. Mordelt, 779 F.2d 264, 269 (5th Cir. 1985). 
Appellee has cited, and we have found, no subsequent United States Supreme Court 
cases requiring minimum contacts where service is made upon an individual within 
the forum state. If an individual is served while present in the forum state, 
minimum contacts analysis is not appropriate for determining jurisdiction over 
that individual. Amusement Equipment, supra.

[¶8.]     Although minimum 
contacts analysis is inappropriate, exercise of personal jurisdiction still must 
satisfy due process, which requires that maintenance of the suit does not offend 
"traditional notions of fair play and substantial justice." Amusement Equipment, 
supra 779 F.2d  at 269 (discussing Insurance Corp. of Ireland, Ltd. v. Compagnie 
des Bauxites de Guinee, 456 U.S. 694, 102 S. Ct. 2099, 72 L. Ed. 2d 492 (1982)). We are convinced that transient jurisdiction does not offend this 
standard. "[A] traditional notion of fair play and substantial justice has been 
that presence alone is sufficient to support personal jurisdiction * * *." 
Amusement Equipment, supra 779 F.2d  at 270. Jurisdiction based upon personal 
service within the forum state is a concept that is historically entrenched, 
nearly universally recognized, very predictable, and easy to apply. One cannot 
claim unfair surprise when he enters a state and is subjected to the 
jurisdiction of that state's courts.

[¶9.]     In his concurring 
opinion in Shaffer v. Heitner, supra, Justice Stevens 
stated:

"If I visit another State 
* * *, I knowingly assume some risk that the State will exercise its power over 
* * * my person while there. My contact with the State, though minimal, gives 
rise to predictable risks." 97 S. Ct.  at 2587, Stevens, J., 
concurring.

The risks 
alluded to by Justice Stevens are accompanied by corresponding benefits. One's 
presence in a state entitles him to the use of the state's public resources and 
the protection of the state's laws. And, one's presence in a state is rarely 
accidental or unrelated to some personal purpose. In this case, Ms. Gibson 
freely and voluntarily traveled to Douglas, Wyoming to attend a business meeting. It is 
not claimed in this appeal that service upon Ms. Gibson was achieved through 
subterfuge or trickery.

[¶10.]  Finally, the exercise of jurisdiction by 
a state court is an act of sovereign power. Considerations of individual liberty 
may limit that power, Insurance Corp. of Ireland, supra 
102 S. Ct.  at 2104, but they do not completely eradicate 
it.

[¶11.]  "While the due process clause necessarily 
restricts the state's sovereign power, no case has yet held that it eliminates 
that power altogether. That the requirement of personal jurisdiction rests in 
all cases on the due process clause does not weaken the proposition that the 
exercise of jurisdiction, as distinguished from its limitation, is a sovereign 
act. If there is anything that characterizes sovereignty, it is the state's 
dominion over its territory and those within it. Fairness does not operate in a 
vacuum. To abstract it from context and elevate it blindly over sovereign 
prerogatives is ultimately to free the individual from the obligations inherent 
in a statist system." Amusement Equipment, supra 779 F.2d  at 
270.

We detect no unfairness 
or injustice in the exercise of personal jurisdiction based upon an individual's 
presence within a state, and "we are unwilling to reject this established 
jurisdictional principle without direction from a higher authority." Opert v. 
Schmidt, 535 F. Supp. 591, 594 (S.D.N Y 1982). The district court erred in 
concluding that the presence of Ms. Gibson in Wyoming and personal service upon her did not 
confer personal jurisdiction over her.

JURISDICTION OVER THE 
PARTNERSHIP AND CO-PARTNERS

[¶12.]  Turning to the question of jurisdiction 
over Ms. Gibson's co-partners and the partnership, we begin our analysis with 
Rule 4(d)(3), W.R.C.P., which provides that service of process shall be 
made

"[u]pon a partnership, or 
other unincorporated association, by delivery of copies to one or more of the 
partners or associates, or a managing or general agent thereof, or by leaving 
same at the usual place of business of such defendant with any employee then in 
charge thereof."

For purposes of 
service, the rule treats a partnership as an entity which may be summoned to 
appear by service upon a single partner. In the caption of appellant's 
complaint, the four individual appellees are named as defendants "individually 
and doing business as NUTRI-WEST OF CALIFORNIA." Although Nutri-West of 
California is 
not specifically identified as a partnership, it is identified as an entity. Ms. 
Gibson, its managing partner, was personally served with a copy of the 
complaint. In our view, these undisputed facts demonstrate adequate service in 
accordance with Rule 4(d)(3).

[¶13.]  In contrast, effective service upon Ms. 
Gibson's co-partners as individuals was not achieved. The summonses for the 
individual co-partners were served upon Ms. Gibson as their "agent and partner." 
Nothing in the record suggests that the co-partners appointed Ms. Gibson as 
their agent for service of process, and nothing in Rule 4 validates this manner 
of service upon an individual. Accordingly, the district court did not acquire 
jurisdiction over the partners of Nutri-West of California in their individual 
capacities.

[¶14.]  Although service upon the partnership was 
achieved in accordance with Rule 4, we must still determine whether due process 
considerations precluded the court from obtaining personal jurisdiction over it. 
The general rule appears to be that personal service upon one partner who is 
present in the forum state confers jurisdiction over the partnership, 
particularly when, as in this case, the partner's presence in the jurisdiction 
is related to partnership activity. See Long v. Baldt, 464 F. Supp. 269, 275, n. 
8 (D.S.C. 1979); R. Casad, Civil Jurisdiction ¶ 3.03, n. 366 (1986 Supp.); 2 
Cavitch, Business Organizations, § 25.02[1] (1984); E. 
Scoles and P. Hay, Conflict of Laws, § 9.1 (1984). We conclude that 
the district court acquired personal jurisdiction over Nutri-West of California by personal service upon Ms. Gibson in 
Wyoming.

CONCLUSION

[¶15.]  Personal service upon Ms. Gibson in 
Wyoming 
conferred jurisdiction over the partnership and Ms. Gibson individually, but not 
over her co-partners in their individual capacities. If appellant is successful 
in obtaining a declaratory judgment or injunction, Ms. Gibson and the 
partnership would be bound by it. Her three co-partners cannot be bound in their 
individual capacities, however, because effective service upon them as 
individuals was not achieved. Olsen v. Puntervold, 338 F.2d 21 (5th Cir. 1964). 
See also 4A C. Wright & A. Miller, Federal Practice and Procedure: Civil 2d 
§ 1105, p. 136 (1987).

[¶16.]  Reversed and remanded for proceedings in 
accordance with this opinion.

FOOTNOTES

1 See, e.g., Ehrenzweig, 
The Transient Rule of Personal Jurisdiction: The "Power" Myth and Forum 
Conveniens, 65 Yale L.J. 289 (1956); Bernstine, Shaffer v. Heitner: A Death 
Warrant for the Transient Rule of In Personam Jurisdiction?, 25 Vil.L.Rev. 38 
(1979). Cf. Glen, An Analysis of "Mere Presence" and Other Traditional Bases of 
Jurisdiction, 45 Brooklyn L.Rev. 607 
(1979).

2 See Driver v. Helms, 577 F.2d 147 (1st Cir. 1978); Donald Manter Co., Inc. v. Davis, 543 F.2d 419 (1st 
Cir. 1976); Aluminal Industries, Inc. v. Newtown Commercial Associates, 89 F.R.D. 326 (S.D.N.Y. 1980); O'Brien v. Eubanks, Colo. App., 701 P.2d 614 (1984); 
Oxmans' Erwin Meat Co. v. Blacketer, 86 Wis.2d 683, 273 N.W.2d 285 (1979); 
Lockert v. Breedlove, 321 N.C. 66, 361 S.E.2d 581 (1987); Opert v. Schmid, 535 F. Supp. 591 (S.D.N.Y. 1982); In re Marriage of Pridemore, 146 Ill. App.3d 990, 
100 Ill.Dec. 640, 497 N.E.2d 818 (1986); Humphrey v. Langford, 246 Ga. 732, 273 S.E.2d 22 
(1980); Amusement Equipment, Inc. v. Mordelt, 779 F.2d 264 (5th Cir. 1985).