Opinion ID: 2508401
Heading Depth: 3
Heading Rank: 2

Heading: The Rational Nexus Test Is Satisfied Because Jacobsen's Primary Place of Business Is in Utah

Text: ¶ 40 Teton contends that, even if Phone Directories applies to the current case, the fact that Jacobsen's primary place of business is in Utah is not sufficient to meet Phone Directories's rational nexus requirement. We disagree. ¶ 41 The rational nexus test is not properly considered a due process requirement. [5] Rather it operates as a safety valve, providing a mechanism whereby Utah courts may decline to exercise jurisdiction when Utah has no real interest in the outcome of a given dispute. The potential risks of expanded jurisdiction  particularly the waste of judicial resources  are addressed by the requirement of a rational nexus between this state and either the parties to or the subject matter of the contract. Phone Directories, 2000 UT 64 at ¶ 15, 8 P.3d 256. ¶ 42 For example, under certain circumstances it may be reasonable for a resident of Colorado and a resident of Wyoming to bargain for a forum selection clause designating Utah as the appropriate forum for any dispute arising in relation to a contract to be performed in Nevada. A Utah court hearing a subsequent action brought pursuant to the contract could very well find that the forum selection clause was reasonable under the circumstances, but nevertheless decline to exercise jurisdiction over the matter due to the lack of a rational nexus to Utah. ¶ 43 In this case, the rational nexus test is satisfied because Jacobsen's primary place of business is in Utah. Teton contests this conclusion, pointing to language in Phone Directories suggesting that there must be a nexus between Utah and the parties to the litigation. See id. at ¶ 14. However, because both of the parties in Phone Directories had contacts with Utah, we were not forced to confront the question presented by the current appeal; specifically, can one party's connection to Utah be sufficient to satisfy the rational nexus inquiry? Given the purpose served by the rational nexus test, we now answer that question in the affirmative. We do note, however, that the nexus between the underlying dispute and the State of Utah must be truly rational. Consequently, the mere presence of a post office box maintained in Utah by a litigant, for example, or the fact that parties wholly unconnected to Utah reasonably viewed Utah as providing a fair forum for a potential future dispute, would not provide a sufficiently rational nexus to justify the exercise of personal jurisdiction.