Does What Happens in Vegas Really Stay in Vegas?: Revisiting the Personal Jurisdiction 'Effects Test' and Proper Venue

This article provides commentary and analysis of the arguments in Walden v. Fiore, on the Supreme Court’s November 2013 docket. In 2006, a DEA agent at Atlanta’s Hartsfield-Jackson airport seized $97,000 in cash from Gina Fiore and Keith Gipson when these professional gamblers were making a connecting flight from Puerto Rico to Las Vegas, Nevada. After they sued in Nevada, the agent challenged personal jurisdiction and venue. The Court will determine whether the Ninth Circuit’s decision upholding personal jurisdiction and venue in Nevada was erroneous.The Court will decide two issues, one relating to a court’s exercise of personal jurisdiction and the other addressing a court’s proper venue. The issues are: (1) Whether a federal court may assert personal jurisdiction over a non-resident defendant, consistent with due process, where the defendant causes an intentional tort injury to Nevada residents, and (2) Whether a Nevada federal court is an appropriate venue, under 28 U.S.C. § 1391(b)(2), which provides that a case may be brought in a district “in which a substantial part of the events or omissions giving rise to the claim occurred.” This appeal involves an alleged intentional tort by Walden and therefore focuses on Nevada’s assertion of personal jurisdiction based on commission of an intentional tort. Courts have adopted a three-part test to evaluate personal jurisdiction derived from the Court’s decision in Calder v. Jones, 465 U.S. 783 (1984). For a state to assert personal jurisdiction, a defendant must have (1) committed an intentional act, (2) expressly aimed his conduct at the forum state, and (3) caused harm that the defendant knows is likely to be suffered in the forum state. Consequently, the nub of the dispute concerns whether Walden expressly aimed his conduct at Nevada within the meaning of Calder, also focusing on Calder’s so-called “effects test.” This appeal, therefore, invites the Court to clarify the Calder doctrine that the lower courts have developed in that decision’s wake. The appeal additionally asks the Court to umpire the language in the venue provision allowing venue to be laid in any district in which “a substantial part of the events or omissions giving rise to the claim occurred.” Ironically, the Court has been asked to clarify a statutory amendment that Congress intended to clarify a previous ambiguous venue provision which the current language replaced. It remains to be seen whether the Justices will make recourse to the legislative history behind the 1990 amendment, or whether those Justices who eschew reference to legislative history will default to a plain reading of the statutory text. If so, the outcome is uncertain as both sides argue that the plain text of the venue statute dictates venue either in Georgia (as the defendant argues) or Nevada (as the plaintiffs contend).The Court also may pay heed to the Walden’s policy arguments: that affirmation of the Ninth Circuit’s decision will render law enforcement personnel, journalists and publishers, internet users, and businesses vulnerable to personal jurisdiction in far-flung places. Several business-oriented amici therefore have filed briefs in Walden’s support. In addition, the United States Department of Justice also has filed an amicus brief on Walden’s behalf endorsing these same concerns. If the Court agrees that these policy arguments are compelling enough, the Court will have to craft a nuanced doctrine cabining the reach of the Calder effects test.