Opinion ID: 1873714
Heading Depth: 1
Heading Rank: 4

Heading: the two-part test should apply to general jurisdiction cases

Text: The Supreme Court has not indicated whether a two-part test similar to the minimum contacts/fair-play factors analysis should be applied in general jurisdiction cases. In fact, the Court has directly addressed the general jurisdiction problem only twice since the adoption of the International Shoe standards. See George, In Search of General Jurisdiction, 64 Tulane L Rev 1097, 1108 (1990): In Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952), the Court held that Ohio could assert general jurisdiction over a Philippine corporation because of the continuous and systematic, but limited, part of its general business activities in the forum, although the cause of action sued on did not arise in Ohio and was unrelated to the business activities of the corporation in that state. The company's Philippine operations had been interrupted by the Japanese occupation of the islands during World War II. The president of the corporation returned to his residence in Ohio to personally supervise steps for rehabilitating the company after the war, including the employment of secretaries, appointment of a bank as transfer agent, maintaining bank accounts, and conducting correspondence. The court held these activities to be sufficiently substantial and of such a nature as to permit Ohio, if it chose, to entertain the suit against the corporation arising out of its non-Ohio activities. More recently, in Helicopteros, supra, the Supreme Court reaffirmed the viability of general jurisdiction but concluded that it could not be asserted because the foreign corporation's contacts with the forum did not amount to continuous and systematic activity. This was a wrongful death action brought in Texas against a Colombian corporation for an accident in Peru involving a crash of the corporation's helicopter. The corporation provided transportation for oil and construction companies in South America. The corporation's contacts with Texas were its chief executive officer's one trip to Texas to negotiate a contract, its purchase of most of its helicopters over a period of years from a Texas firm, its arranging to have prospective pilots and management personnel trained in Texas, and its acceptance of checks paying for its transportation services drawn on a Texas bank for payment into a New York account. The Supreme Court dismissed these contacts as either sporadic or of negligible significance and concluded that as a whole they did not constitute continuous and systematic activities with Texas. It may be inferred from the decisions that a foreign corporation's continuous and systematic activities in a state are constitutionally equivalent at least to the purposeful establishment of minimum contacts with the forum. Further, it is evident that the conducting of business regularly out of a corporate office in the forum state is considered as an extremely substantial step toward creating jurisdiction: ... territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there. Burger King Corp., 471 U.S. at 476, 105 S.Ct. at 2184. The Court in World-Wide Volkswagen Corp. v. Woodson, supra , recognized that when a corporation purposefully avails itself of the privilege of conducting business activities within the forum state that: [I]t 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 444 U.S. at 297, 100 S.Ct. at 567. Cf., Asahi Metal Industry Co., supra (one of the factors leaning against jurisdiction was finding that defendant had no office in forum state); Helicopteros, 466 U.S. at 416, 104 S.Ct. at 1873 (No jurisdiction found where [i]t is undisputed that Helicol does not have a place of business in Texas). Some courts have resisted application of the two-part test to cases involving general jurisdiction, instead holding that plaintiff's showing of systematic and continuous contacts renders the exercise of jurisdiction fair per se. See e.g., Behagen v. Amateur Basketball Association of U.S.A., 744 F.2d 731 (10th Cir.1984), and Crane v. Carr, 814 F.2d 758 (D.C.Cir.1987). Many other courts have required that an assertion of general jurisdiction pass both prongs of the two-part test. Dalton v. R & W Marine, Inc., 897 F.2d 1359 (5th Cir.1990); Donatelli v. National Hockey League, 893 F.2d 459 (1st Cir.1990); Bearry v. Beech Aircraft Corp., 818 F.2d 370 (5th Cir.1987); Williams Electric Co., Inc. v. Honeywell, Inc., 854 F.2d 389 (11th Cir.1988); Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773 (5th Cir.1986); Abuan v. General Electric Co., 735 F.Supp. 1479 (D.Guam 1990); Kervin v. Red River Ski Area, Inc., 711 F.Supp. 1383 (E.D.Tex.1989); Simmons v. SeaTide International, Inc., 693 F.Supp. 510 (E.D.La.1988); Palmer v. Kawaguchi Iron Works, Ltd., 644 F.Supp. 327 (N.D.Ill.1986). The Supreme Court did not expressly apply fairness considerations in either of its general jurisdiction cases but this fact is not truly significant. Perkins v. Benguet Consolidated Mining Co., supra , was decided long before the Court's recent attempts to more fully articulate and channel the fairness considerations. The Helicopteros court concluded that the plaintiffs had failed to meet their initial burden of showing that the defendant's forum contacts were continuous and systematic; therefore, the Court did not reach the stage of the case in which a fairness analysis otherwise might have been called for. In our opinion, a state's assertion of general jurisdiction over an unconsenting defendant ought to be measured by a test similar to that for specific jurisdiction elaborated upon in Asahi Metal Industry Co., supra, and Burger King Corp., supra . The Court in International Shoe Co. v. Washington, supra , linked traditional notions of fair play and substantial justice with minimal contacts as joint standards for determining whether maintenance of a particular suit based on personal jurisdiction comports with due process. It is clear that the Supreme Court sought to adopt criteria that would tend to be mutually definitive, yet not be simply mechanical or quantitative 326 U.S. at 319, 66 S.Ct. at 159. See also Schaffer v. Heitner, 433 U.S. 186, 203-4, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977). To apply one criterion without the leaven of considerations implied by the other would tend to defeat both purposes. In fact, the Court has not done so, but has from time to time stressed and expounded upon both ideas in the course of developing the International Shoe doctrine. We are unaware of any reason to suppose that the vivifying and corrective influences of the traditional notions of fair play and substantial justice are automatically incorporated in the continuous and systematic activities test any more than they are in the minimum contacts test. While the distinction between general and specific jurisdiction provides a useful analytic device, the use of these categories does not eliminate the need to evaluate each assertion of personal jurisdiction in light of traditional notions of fair play and substantial justice. Cf., Holt Oil & Gas Corp. v. Harvey, supra . For all of these reasons, we conclude that, while adjustments and modifications may be necessary, as in any instance in which precepts developed for one type of case are applied by analogy to a similar category, the two-part minimum contacts/fairness analysis which evolved in specific jurisdiction cases should also be applied to evaluate the assertion of general jurisdiction in the present case.