F I L E D

United States Court of Appeals

Tenth Circuit

MAR 6 2000

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ROBERT PEAY, as guardian of minor

child Jennifer McCluskey; TEEN HELP,

doing business as Brightway Adolescent

Hospital; DELBERT E. GOATES, M.D.,

Plaintiffs - Appellants,

v.

BELLSOUTH MEDICAL ASSISTANCE

PLAN; BLUE CROSS BLUE SHIELD OF

ALABAMA,

Defendants - Appellees.

--------------------------------

UNITED STATES DEPARTMENT OF

LABOR,

Amicus Curiae.

No. 98-4180

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH

(D. Ct. No. 97-CV-916-K)

Brian S. King and Marcie E. Schaap, King & Isaacson, P.C., Salt Lake City, Utah,

appearing for Plaintiffs-Appellants.

Keith W. Kochler, BellSouth Telecommunications, Inc., Atlanta, Georgia (Gary

L. Johnson, Richards, Brandt, Miller & Nelson, Salt Lake City, Utah, with him on

the brief), appearing for Defendants-Appellees.
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Henry L. Solano, Solicitor of Labor, Allen H. Feldman, Associate Solicitor for

Special Appellate and Supreme Court Litigation, and Edward D. Sieger, Senior

Appellate Attorney, United States Department of Labor, filed an amicus curiae

brief in support of Appellants.

Before TACHA , BRORBY , and EBEL , Circuit Judges.

TACHA , Circuit Judge.

Plaintiffs appeal the district court’s order granting defendants’ motion to

dismiss for lack of personal jurisdiction or, in the alternative, to transfer for

improper venue. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and

reverse.

I. 

At the time of the events in this case, plaintiff Jennifer McCluskey lived in

Tennessee with her guardian, plaintiff Robert Peay. Peay’s employer, BellSouth

Telecommunications, Inc. (BST), provided both Peay and McCluskey with

insurance through defendant BellSouth Medical Assistance Plan (“Plan”). BST is

headquartered in Atlanta, Georgia, and operates in nine southeastern states. 

Defendant Blue Cross & Blue Shield of Alabama (BCBS), located in Birmingham,

Alabama, provided third-party administration services to the Plan.

In 1993, McCluskey received in-patient psychiatric care at plaintiff

Brightway Adolescent Hospital (“Brightway”), a Utah facility. Plaintiff Delbert
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Goates, a Utah resident, was McCluskey’s treating physician. The Plan’s

utilization review agent precertified McCluskey’s treatment, and the Plan and

BCBS paid Goates for a portion of McCluskey’s care. However, the Plan refused

to pay 100% of the covered charges because McCluskey did not use a preferred

provider’s services. McCluskey and Peay executed an assignment of benefits in

favor of Brightway and Goates. 

McCluskey, Peay, Brightway, and Goates then sued the Plan and BCBS in 

Utah federal district court for a determination of medical benefits due under the

Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.

§ 1132(a)(1)(B). Plaintiffs served a summons and the complaint on BCBS in

Birmingham, and the Plan waived service of process.

Pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3),

defendants moved to dismiss for lack of jurisdiction or, in the alternative, to

transfer for improper venue. The district court granted defendants’ motion to

dismiss, and plaintiffs appealed.

II. 

A. 

We review de novo the district court’s legal determination that it lacks

personal jurisdiction over defendants. Application to Enforce Admin. Subpoenas

Duces Tecem of the SEC v. Knowles , 87 F.3d 413, 415 (10th Cir. 1996). The
1Plaintiffs also argue that venue is proper in Utah. Because the district

court dismissed plaintiffs’ case on the ground that it lacked jurisdiction over

defendants, the lower court did not reach venue. Therefore, we do not decide

whether Utah is an appropriate venue for this suit.

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district court found that neither the Plan nor BCBS has an address, an office, a

statutory agent, a telephone listing, employees, active Plan participants, or other

operations in Utah. McCluskey v. BellSouth Med. Assistance Plan , 23 F. Supp.2d

1312, 1315 (D. Utah 1998). Applying a “traditional personal jurisdiction test,”

the lower court held that defendants lacked “sufficient contacts” with Utah to

support the exercise of personal jurisdiction and thus dismissed the suit. Id.

On appeal, plaintiffs argue that ERISA, 29 U.S.C. § 1132(e)(2), authorizes

nationwide service of process and consequently nationwide personal jurisdiction. 

They assert that when a court’s jurisdiction is invoked based on ERISA’s

nationwide service of process provision, minimum contacts with the forum are

unnecessary. Under these circumstances, plaintiffs insist, a federal district court

can exercise jurisdiction over defendants as long as defendants have minimum

contacts with the United States. Plaintiffs claim that defendants have the

requisite minimum contacts because defendants are large corporations carrying on

day-to-day business throughout this country. 1

Defendants contend that even if § 1132(e)(2) authorizes nationwide service

of process, it does not authorize nationwide jurisdiction. They argue that under
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the plain language of § 1132(e)(2), personal jurisdiction in ERISA cases is coextensive with venue and plaintiffs cannot establish either of these procedural

requirements.

B. 

Before a federal court can assert personal jurisdiction over a defendant in a

federal question case, the court must determine (1) “whether the applicable statute

potentially confers jurisdiction” by authorizing service of process on the

defendant and (2) “whether the exercise of jurisdiction comports with due

process.” Republic of Panama v. BCCI Holdings (Luxembourg) S.A. , 119 F.3d

935, 942 (11th Cir. 1997); see also Omni Capital Int’l v. Rudolf Wolff & Co. , 484

U.S. 97, 104 (1987) (finding, in a federal question case, that before a federal

court may exercise personal jurisdiction over a defendant, there must be “a basis

for the defendant’s amenability to service of summons”).

While service of process and personal jurisdiction both must be satisfied

before a suit can proceed, they are distinct concepts that require separate

inquiries. Willingway Hosp., Inc. v. Blue Cross & Blue Shield , 870 F. Supp.

1102, 1104 (S.D. Ga. 1994) (citing 4 Charles Alan Wright and Arthur R. Miller,

Federal Practice & Procedure § 1063 (1987)). In the federal system, service of

process is governed by Rule 4 of the Federal Rules of Civil Procedure. By

contrast, “‘[t]he requirement that a court have personal jurisdiction flows . . .
2

“No person shall be . . . deprived of life, liberty, or property, without due

process of law . . . .” U.S. Const. amend. V.

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from the Due Process Clause. . . . It represents a restriction on judicial power not

as a matter of sovereignty, but as a matter of individual liberty.’” Omni Capital

Int’l , 484 U.S. at 104 (quoting Insurance Corp. of Ireland v. Compagnie des

Bauxites de Guinee , 456 U.S. 694, 702 (1982)). More specifically, in federal

question cases, personal jurisdiction flows from the Due Process Clause of the

Fifth Amendment. 2 See id. at 103-04 (assuming, in a federal question case, that a

court’s exercise of personal jurisdiction must comport with Fifth Amendment due

process principles); Republic of Panama , 119 F.3d at 942 (“It is well established

that when . . . a federal statute provides the basis for jurisdiction, the

constitutional limits of due process derive from the Fifth, rather than the

Fourteenth, Amendment.”).

C.

To determine whether the applicable statute potentially confers jurisdiction

over defendants by authorizing service of process, we begin with Fed. R. Civ. P.

4(h)(1). Rule 4(h)(1) governs service upon domestic corporations. In pertinent

part, Rule 4(h)(1) provides that, unless a defendant waives service, service must

be made “in a judicial district of the United States in the manner prescribed for

individuals by” Rule 4(e)(1). Rule 4(e)(1) states, “Unless otherwise provided by
3Section 1132(e)(2) states that process may be served in the district where

the defendant resides. Because BCBS is a corporation, we must determine where

it resides. The statute does not define resides; however, the first part of §

1132(e)(2) which discusses venue also uses the word resides. When Congress

uses the same word twice in the same sentence, we presume that it intended the

word to carry the same definition. In determining the definition of resides in the

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federal law, service upon an individual . . . may be effected in any judicial district

of the United States pursuant to the law of the state in which the district court is

located . . . .”

In ERISA cases, federal law provides:

Where an action under this subchapter is brought in a

district court of the United States, it may be brought in

the district where the plan is administered, where

the breach took place, or where a defendant resides or

may be found, and process may be served in any other

district where a defendant resides or may be found .

29 U.S.C. § 1132(e)(2) (emphasis added). There is no question that the last

clause of § 1132(e)(2) authorizes nationwide service of process. “When a federal

statute provides for nationwide service of process, it becomes the statutory basis

for personal jurisdiction.” Republic of Panama , 119 F.3d at 942; see also Fed. R.

Civ. P. 4(k)(1)(D) (“Service of a summons or filing a waiver of service is

effective to establish jurisdiction over the person of a defendant when authorized

by a statute of the United States.”). Thus, provided that due process is satisfied,

§ 1132(e)(2) confers jurisdiction over defendants by authorizing service of

process on them. 3

 
venue context, we supplement the specific venue statute in § 1132(e)(2) with the

more general venue provision applicable in all civil cases found in 28 U.S.C. §

1391(c). See Monument Builders, Inc. v. American Cemetery Ass’n , 891 F.2d

1473, 1477 (10th Cir. 1989). The general provision states that “[f]or purposes of

venue . . . a defendant that is a corporation shall be deemed to reside in any

judicial district in which it is subject to personal jurisdiction at the time the action

is commenced.” 28 U.S.C. § 1391(c). Thus, under § 1132(e)(2), a corporation

resides wherever personal jurisdiction is proper. Although this reading seems to

negate the rest of the venue provisions for corporations, it still has meaning when

a plaintiff sues an individual or a partnership. 

Thus, in this case, because plaintiffs served a summons and complaint on

BCBS in Birmingham, where it has its offices, and the Plan waived service of

process, service was proper.

4On two occasions, the Supreme Court has declined to decide whether the

national contacts approach is constitutional under the Fifth Amendment. Omni

Capital Int’l , 484 U.S. at 103 n.5; Asahi Metal Indus. Co. v. Superior Court of

Cal. , 480 U.S. 102, 113 n.* (1987). Some jurisdictions have adopted the national

contacts test. Federal Fountain, Inc. v. KR Entertainment, Inc. (In re Federal

Fountain, Inc.) , 165 F.3d 600, 601-02 (8th Cir. 1999) (en banc) (bankruptcy);

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D.

Next, we must determine whether the Utah district court’s exercise of

jurisdiction over defendants comports with due process. Plaintiffs argue that

because ERISA authorizes nationwide service of process, the district court can

constitutionally exercise jurisdiction over defendants as long as they have

minimum contacts with the United States as a whole. Under this approach, the

so-called “national contacts” test, a plaintiff could sue a defendant in any federal

court in the United States, regardless of the defendant’s contacts with the forum

or the burden on the defendant of litigating in that forum. We are convinced that

due process requires something more. 4

 
Bellaire Gen. Hosp. v. Blue Cross Blue Shield , 97 F.3d 822, 825-26 (5th Cir.

1996) (following precedent “dutifully” and applying the national contacts test in

an ERISA case, but criticizing this approach because it separates personal

jurisdiction from due process); see also Robert C. Casad, Personal Jurisdiction in

Federal Question Cases , 70 Tex. L. Rev. 1589, 1606 (1992) (advocating the

national contacts approach).

Plaintiffs contend that we adopted the national contacts test in Application

to Enforce Admin. Subpoenas Duces Tecem of the SEC v. Knowles , 87 F.3d 413

(10th Cir. 1996). In Knowles , the SEC filed an application for an order to show

cause and for an order compelling the defendant to comply with administrative

subpoenas duces tecum. Id. at 415. The district court issued an order to show

cause, and the SEC served the defendant with the order in Nassau, Bahamas. Id.

The defendant filed a motion to dismiss, arguing that the district court did not

have jurisdiction over him. Id. We recognized that 15 U.S.C. § 77v(a) provides

for “worldwide service of process in cases of the enforcement of subpoenas

issued by the SEC” and upheld the district court’s order to the defendant to

comply with the subpoenas. Id. at 417, 419. In so doing, we limited our decision

“to the question of the jurisdiction of the district court, based upon the

extraterritorial service of the Order to Show Cause, to enforce the SEC’s

subpoenas duces tecum against [the defendant].” Id. at 416. Thus, Knowles

merely stands for the narrow proposition that under the facts and circumstances

presented in that case, § 77v(a) authorized the district court to exercise and

enforce its subpoena power worldwide.

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As we noted above, the personal jurisdiction requirement flows from the

Due Process Clause of the Fifth Amendment and restricts judicial power in order

to protect the individual’s liberty interest. Bauxites , 456 U.S. at 702. Thus, the

“proper focus for a personal jurisdiction test should be on protecting an

individual’s liberty interest in avoiding the burdens of litigating” in an unfair or

unreasonable forum. Busch v. Buchman, Buchman & O’Brien , 11 F.3d 1255,

1259 (5th Cir. 1994) (Garza, J., dissenting). “Requiring that the individual

defendant in a national service of process case only reside somewhere in the
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United States does not protect this interest.” Id. (Garza, J., dissenting); see also

Willingway Hosp., Inc. , 870 F. Supp. at 1106 (“To allow Congress to dictate

personal jurisdiction through the enactment of nationwide service of process

provisions, unquestioned by the judiciary[,] is nonsensical.”).

The Supreme Court has not yet defined Fifth Amendment due process limits

on personal jurisdiction. However, the Court has held that due process under the

Fourteenth Amendment requires that “maintenance of [a] suit . . . not offend

traditional notions of fair play and substantial justice.” International Shoe Co. v.

Washington , 326 U.S. 310, 316 (1945) (internal quotation marks and citation

omitted). Due process limits on a court’s ability to exercise jurisdiction “are

designed to protect [defendants] by providing them with fair notice that their

activities will render them liable to suit in a particular forum.” Republic of

Panama , 119 F.3d at 945 (citing Burger King Corp. v. Rudzewicz , 471 U.S. 462,

470-77 (1985)). A defendant is deemed to have “fair warning” if it has

“purposefully directed [its] activities at residents of the forum.” Burger King

Corp. , 471 U.S. at 472 (internal quotation marks and citation omitted). However,

even if a defendant has “minimum contacts” with the forum, due process is not

satisfied unless “the assertion of personal jurisdiction would comport with fair

play and substantial justice.” Id. at 476 (internal quotation marks and citation

omitted).
5Compare U.S. Const. amend. XIV, § 1 (“No State shall . . . deprive any

person of life, liberty, or property, without due process of law . . . .”), with U.S.

Const. amend. V (“No person shall be . . . deprived of life, liberty, or property,

without due process of law . . . .”).

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Like the Eleventh Circuit, we discern no reason why the Fourteenth

Amendment’s fairness and reasonableness requirements “should be discarded

completely when jurisdiction is asserted under a federal statute.” Republic of

Panama , 119 F.3d at 945. The Due Process Clauses of the Fourteenth and Fifth

Amendments are virtually identical, 5 and both “were designed to protect

individual liberties from the same types of government infringement.” Id. (citing

Mathews v. Eldridge , 424 U.S. 319, 331-32 (1976)). Accordingly, we hold that in

a federal question case where jurisdiction is invoked based on nationwide service

of process, the Fifth Amendment requires the plaintiff’s choice of forum to be fair

and reasonable to the defendant. In other words, the Fifth Amendment “protects

individual litigants against the burdens of litigation in an unduly inconvenient

forum.” Id. 

 To establish that jurisdiction does not comport with Fifth Amendment due

process principles, a defendant must first demonstrate “that his liberty interests

actually have been infringed.” Id. at 946. The burden is on the defendant to

show that the exercise of jurisdiction in the chosen forum will “make litigation so

gravely difficult and inconvenient that [he] unfairly is at a severe disadvantage in
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comparison to his opponent.” Burger King Corp. , 471 U.S. at 478 (internal

quotation marks and citations omitted); accord Republic of Panama , 119 F.3d at

948 (following Burger King Corp. ). 

However, as Judge Becker has pointed out, given the “practical

considerations emanating from the realities of contemporary litigation, . . . any

constitutional due process limitations upon a federal extraterritorial (nationwide)

service of process statute must be broadly defined.” Oxford First Corp. v. PNC

Liquidating Corp. , 372 F. Supp. 191, 201 (E.D. Pa. 1974). Thus, in evaluating

whether the defendant has met his burden “of establishing constitutionally

significant inconvenience,” Republic of Panama , 119 F.3d at 946, courts should

consider the following factors: (1) the extent of the defendant’s contacts with the

place where the action was filed; (2) the inconvenience to the defendant of having

to defend in a jurisdiction other than that of his residence or place of business,

including (a) the nature and extent and interstate character of the defendant’s

business, (b) the defendant’s access to counsel, and (c) the distance from the

defendant to the place where the action was brought; (3) judicial economy; (4) the

probable situs of the discovery proceedings and the extent to which the discovery

proceedings will take place outside the state of the defendant’s residence or place

of business; and (5) the nature of the regulated activity in question and the extent

of impact that the defendant’s activities have beyond the borders of his state of
6

“We note that inconvenience ‘most frequently can be accommodated

through a change of venue.’ Alternative methods of addressing inconvenience do

not, however, do away with the need for a constitutional floor to protect litigants

against truly undue burdens. ‘[I]nconvenience may at some point become so

substantial as to achieve constitutional magnitude.’” Republic of Panama , 119

F.3d at 947 n.25 (quoting Burger King Corp. , 471 U.S. at 484).

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residence or business. Oxford First Corp. , 372 F. Supp. at 203. 

“We emphasize that it is only in highly unusual cases that inconvenience

will rise to a level of constitutional concern.” Republic of Panama , 119 F.3d at

947. Certainly, “[i]n this age of instant communication,” Oxford First Corp. , 372

F. Supp. at 201, and modern transportation, the burdens of litigating in a distant

forum have lessened, Republic of Panama , 119 F.3d at 947-48. 6

If a defendant successfully demonstrates that litigation in the plaintiff’s

chosen forum is unduly inconvenient, then “jurisdiction will comport with due

process only if the federal interest in litigating the dispute in the chosen forum

outweighs the burden imposed on the defendant.” Republic of Panama , 119 F.3d

at 948. To determine whether infringement on the defendant’s liberty is justified

sufficiently by government interests, 

courts should examine the federal policies advanced by

the statute, the relationship between nationwide service

of process and the advancement of these policies, the

connection between the exercise of jurisdiction in the

chosen forum and the plaintiff’s vindication of his federal

right, and concerns of judicial efficiency and economy.

Where . . . Congress has provided for nationwide service

of process, courts should presume that nationwide personal
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jurisdiction is necessary to further congressional objectives.

Id.

III. 

We conclude that under the broad standard set forth above, defendants

cannot show that their liberty interests actually have been infringed. First,

defendants have sufficient contacts with Utah: they precertified plaintiff

McCluskey’s treatment at a Utah hospital and paid plaintiff Goates, a Utah

resident, for a portion of McCluskey’s care. Because defendants rendered

benefits in Utah, they knew or should have known that a dispute over benefits

could arise in Utah. 

Second, even though defendants may be inconvenienced by defending this

action in Utah, they cannot show that this burden rises to the level of

constitutional concern. Defendants are large corporations operating throughout

the southeastern United States. They surely have the resources to access counsel

in Utah. And, while Utah may be some distance from the southeast, modern

methods of communication and transportation greatly reduce the significance of

this physical burden. 

Third, nothing in the record indicates that considerations of judicial

economy or the probable location of discovery in this case make Utah an unfair

forum. Finally, because defendants operate and administer a multi-state insurance
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plan regulated by federal law, their activities unquestionably have a significant

impact beyond the borders of Alabama and Georgia. Indeed, as this case

demonstrates, defendants’ activities reach far beyond the southeastern United

States. 

Thus, defendants have not met their burden of demonstrating that the

district court’s assertion of jurisdiction will make litigation so difficult and

inconvenient that they unfairly will be at a severe disadvantage compared to

plaintiffs. See ESAB Group, Inc. v. Centricut, Inc. , 126 F.3d 617, 627 (11th Cir.

1997) (finding, in a RICO case, that jurisdiction was consistent with the Fifth

Amendment because there was no evidence in the record of “extreme

inconvenience or unfairness” to the defendants), cert. denied , 523 U.S. 1048

(1998); Republic of Panama , 119 F.3d at 948 (same); Oxford First Corp. , 372 F.

Supp. at 203-05 (applying the “fairness test” set forth above in a securities case

and finding that it was not unfair to subject defendants to the court’s jurisdiction). 

Because defendants have not shown that the district court’s assertion of

jurisdiction will infringe upon their liberty interests, we need not balance the

federal interests at stake in this suit. We hold that the district court erred in

granting defendants’ motion to dismiss for lack of personal jurisdiction.

REVERSED AND REMANDED.