Opinion ID: 894827
Heading Depth: 2
Heading Rank: 2

Heading: Relatedness Requirement

Text: The arise from or relate to requirement lies at the heart of specific jurisdiction by defining the required nexus between the nonresident defendant, the litigation, and the forum. To support specific jurisdiction, the Supreme Court has given relatively little guidance as to how closely related a cause of action must be to the defendant's forum activities. In assessing the relationship between a nonresident's contacts and the litigation, most courts have focused on causation, but they have differed over the proper causative threshold. See Nowak v. Tak How Invs., Ltd., 94 F.3d 708, 714 (1st Cir.1996) (discussing various causative approaches). Some courts have pursued an expansive but-for causative approach, others have adopted a restrictive relatedness view requiring forum contacts to be relevant to a necessary element of proof, and some have applied a sliding-scale analysis that attempts to strike a balance between the two. See Mark M. Maloney, Specific Jurisdiction and the Arise From or Relate to Requirement . . . What Does it Mean?, 50 WASH. & LEE L.REV. 1265, 1276, 1299 (1993). Each approach has proponents and detractors, for the reasons we examine below.
In Helicopteros Nacionales de Colombia v. Hall , the Supreme Court evaluated a Colombian corporation's limited contacts with Texas and decided they were not sufficiently continuous and systematic to support general jurisdiction over the defendant in Texas. 466 U.S. at 418-19, 104 S.Ct. 1868. The Court did not reach specific jurisdiction because the parties had conceded that the plaintiffs' claims did not arise from or relate to the defendant's activities in Texas. Id. at 415-16, 104 S.Ct. 1868. Justice Brennan, though, dissented, espousing a broad but-for approach to relatedness, and courts that have applied that test have generally relied on his view. Id. at 427-28, 104 S.Ct. 1868. Courts that support the but-for approach have said that a cause of action arises from or relates to a defendant's forum contacts when, but for those contacts, the cause of action would never have arisen. See Shute v. Carnival Cruise Lines, 897 F.2d 377, 385 (9th Cir.1990), rev'd on other grounds, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991); see also Prejean v. Sonatrach, Inc., 652 F.2d 1260, 1270 n. 21 (5th Cir.1981) (holding that a contract [was] a but for causative factor for the tort suit); cf. Lanier v. Am. Bd. of Endodontics, 843 F.2d 901, 909 (6th Cir.1988) (interpreting arising out of language in Michigan's long-arm statute and concluding that alleged discrimination would not have occurred but for the defendants' contacts with the forum). Rather than considering only isolated contacts that relate to a specific element of proof or the proximate cause of injury, the but-for analysis considers jurisdictional contacts that occur over the entire course of events of the relationship between the defendant, the forum, and the litigation. See Shute, 897 F.2d at 384. As the sole jurisdiction to explicitly adopt the but-for test, the Ninth Circuit Court of Appeals has been its staunchest advocate, and Shute's progeny have generally demonstrated the circuit's continuing support. Nowak, 94 F.3d at 714 (noting the Ninth Circuit as the most forceful defender of the `but for' test); see Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir.1995); Terracom v. Valley Nat'l Bank, 49 F.3d 555, 561 (9th Cir.1995); but see Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 271 (9th Cir.1995) (noting that [t]he authority of our decision in Shute is questionable). Applying the but-for test, the Shute court held that a passenger's personal injuries suffered aboard a cruise ship arose out of the nonresident cruise line's contacts with Washington because, but for the cruise line's advertisements there, the passenger would not have purchased a ticket and boarded the ship. Shute, 897 F.2d at 386. The cruise line advertised in local media and sent brochures to the state. Id. at 379. The court reasoned that, when a defendant demonstrates continuing efforts to solicit business in the forum state, whether a cause of action arises from those efforts must be viewed over the entire course of events. Id. at 385-86. The court did not limit its relatedness analysis to the passenger's reservation contract, but instead analyzed the range of the cruise line's solicitation activities. Id. at 385-86. The Fifth Circuit appeared to apply relatedness in a similarly expansive manner in Prejean, 652 F.2d at 1270. There, the spouses of passengers who died in a plane crash brought a wrongful-death action in Texas against, among others, an Algerian oil company that chartered the flight. Id. In reversing the trial court's dismissal for want of personal jurisdiction and remanding for further factual inquiry, the Fifth Circuit stated that, assuming the defendant had chartered the plane, the wrongful-death suit would arise from that charter because the charter contract would be a but-for causative factor for the tort of wrongful death. Id. Several justifications have been posited for the but-for approach. See Shute, 897 F.2d at 385. In Shute, the court explained that the but-for test preserves the specific-jurisdiction requirement that there be a nexus between the cause of action and the defendant's activities in the forum. Id. At the same time, the court opined, the expansive approach is more fundamentally fair because it does not allow a defendant to engage in significant purposeful activities in the forum yet still avoid jurisdiction when the relationship of the cause of action to those activities is tenuous. Id. at 385-86. On the other hand, the but-for approach has been widely criticized for the expanse of its seemingly unlimited jurisdictional reach: [a] `but for' requirement . . . has in itself no limiting principle; it literally embraces every event that hindsight can logically identify in the causative chain. Nowak, 94 F.3d at 715; see also Lea Brilmayer, Related Contacts and Personal Jurisdiction, 101 HARV. L.REV. 1444, 1462 (1988) (criticizing the but-for test for its limitless reach). Although the Shute court posited that the required reasonableness inquiry would act as a check on the but-for test's expansiveness, commentators have questioned the efficacy of the reasonableness safeguard, calling it highly deferential. See, e.g., Maloney, supra at 1298. Few courts beyond the Ninth Circuit have adopted the but-for approach to relatedness. Specifically, both the Fifth and Sixth Circuits have signaled a movement away from such a broad test. [3] We agree with those courts and commentators who view the but-for test as too broad and judicially unmoored to satisfy due-process concerns.
Far more structured than the but-for approach is the restrictive view of relatedness known as substantive relevance. As the name implies, this test requires forum-related contacts to be substantively relevant, or even necessary, to proof of the claim. See Tecre Co. v. Buttonpro, Inc., 387 F.Supp.2d 927, 933 (E.D.Wis.2005) (citing Marino v. Hyatt Corp., 793 F.2d 427, 430 (1st Cir.1986)). One iteration of this standard is known as the proximate cause test, reasoning that a contact that is the proximate or legal cause of an injury is substantively relevant to a cause of action that arises from it. The First, Second, and Eighth Circuits appear to have followed this approach. See United Elec., Radio & Mach. Workers of Am. v. 163 Pleasant St. Corp., 960 F.2d 1080, 1089 (1st Cir.1992); Pizarro v. Hoteles Concorde Int'l, C.A., 907 F.2d 1256, 1259-60 (1st Cir.1990); Marino, 793 F.2d at 429-30; Morris v. Barkbuster, Inc., 923 F.2d 1277, 1281 (8th Cir.1991); Pearrow v. Nat'l Life & Accident Ins. Co., 703 F.2d 1067, 1068-69 (8th Cir.1983); Gelfand v. Tanner Motor Tours, 339 F.2d 317, 321-22 (2d Cir.1964). Proximate cause requires the defendant's conduct to be both the cause in fact and the foreseeable cause of injury. See Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex.1995). Under this more stringent relatedness standard, the purposeful contact that is a proximate cause of injury is an essential liability element and is thus substantively relevant to a plaintiff's claim of harm. In Marino, for instance, a Massachusetts resident brought suit in her home state against Hyatt, a Delaware corporation, for injuries sustained when she slipped in the bathtub of her Hawaii hotel room. Marino, 793 F.2d 427. Applying the relatedness requirement restrictively, the court concluded that Marino's claim did not arise from any business that Hyatt transacted in Massachusetts. Id. at 431. The court reasoned that [the] plaintiffs' advance reservation agreement with Hyatt would hardly be an important, or perhaps even a material, element of proof in [the] slip and fall case, and emphasized that to accept the plaintiffs' argument would be to render the `arising from' requirement . . . a virtual nullity. Id. at 430; see also Pizarro, 907 F.2d at 1259-60 (holding that personal injuries sustained in an Aruban hotel did not arise out of or result from advertisements in Puerto Rico). Courts in the Third and Tenth Circuits have similarly applied the substantive-relevance/proximate-cause standard. See Wims v. Beach Terrace Motor Inn, Inc., 759 F.Supp. 264, 267-69 (E.D.Pa.1991) (holding that the causal link between brochures the Inn sent to Pennsylvania and the injury sustained at the Inn in New Jersey was simply too attenuated to say that the injury arose from Beach Terrace's activities in the Commonwealth of Pennsylvania); Dirks v. Carnival Cruise Lines, 642 F.Supp. 971, 975 (D.Kan.1986) (finding the connection between the cruise ship operator's negligent preparation of food on board ship in California and its acts of soliciting passengers and sending tickets to Kansas too tenuous to support jurisdiction). In Gelfand, the Second Circuit implicitly rejected the but-for approach on facts largely similar to those before us. 339 F.2d at 321-22. There, the Gelfands sued a tour bus company for injuries sustained during a motor vehicle crash. Id. at 318. The court held that the sale of bus tickets in New York was an insufficient basis to establish personal jurisdiction over the non-resident defendant because the claim did not arise from the sale. Id. at 321-22; see also Reich v. Signal Oil & Gas Co., 409 F.Supp. 846, 852 (S.D.Tex.1974) (concluding that a contract signed in Texas to build a helicopter that crashed in Ghana, killing two oil rig workers, was too tenuous a contact to say that the tort arose from it). Although Moki Mac urges us to follow the substantive-relevance approach, we have generally eschewed pinning jurisdictional analysis on the type of claim alleged. See, e.g., Michiana, 168 S.W.3d at 791-92. In Michiana, we warned against the dangers of the plaintiff's pleadings driving the analysis, stating that such an approach shifts a court's focus from the relationship among the defendant, the forum, and the litigation to the relationship among the plaintiff, the forum . . . and litigation. Id. at 790 (emphasis in original) (internal citations omitted). We reject a categorical approach that runs the danger of posing too narrow an inquiry. Although ostensibly imbued with a bright-line benefit, in practice it would require a court to delve into the merits to determine whether a jurisdictional fact is actually a legal cause of the injury. See Maloney, supra at 1290. Moreover, ease of application should not overshadow the principal constitutional due-process inquiry, which is whether the defendant has certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). We note, too, that the substantive-relevance/proximate-cause standard is more stringent than the Supreme Court has, at least thus far, required. Helicopteros, 466 U.S. at 415 n. 10, 104 S.Ct. 1868.
Attempting to moderate the seemingly categorical effects of the but-for and substantive-relevance tests, some commentators have espoused, and a few courts have adopted, a sliding scale approach that examines the relationship between forum contacts and the litigation along a continuum. Under this view, as the extent of forum contacts goes up, the degree of relatedness to the litigation necessary to establish specific jurisdiction goes down, and vice versa. Maloney, supra at 1299-1300. As articulated by the Supreme Court of California, as the relationship of the defendant with the state seeking to exercise jurisdiction over him grows more tenuous, the scope of jurisdiction also retracts, and fairness is assured by limiting the circumstances under which the plaintiff can compel him to appear and defend. Vons Cos. v. Seabest Foods, Inc., 14 Cal.4th 434, 58 Cal.Rptr.2d 899, 926 P.2d 1085, 1094 (1996); see also Davis v. Baylor Univ., 976 S.W.2d 5, 9 (Mo.Ct.App.1998); William M. Richman, Jurisdiction in Civil Actions, 72 CAL. L.REV. 1328, 1338-40 (1984) (review essay). Although the sliding scale jurisdictional analysis studiously avoids the extremes that the other two relatedness tests present, it too presents a number of problems. Most significantly, deciding jurisdiction based on a sliding continuum blurs the distinction between general and specific jurisdiction that our judicial system has firmly embraced and that provides an established structure for courts to analyze questions of in personam jurisdiction. See Maloney, supra at 1299-1300. Removing the jurisdictional analysis from these judicial underpinnings allows general and specific jurisdiction to melt together in the middle . . . severely weaken[ing] the defendant's ability to anticipate the jurisdictional consequences of its conduct. Linda Sandstrom Simard, Meeting Expectations: Two Profiles for Specific Jurisdiction, 38 IND. L.REV. 343, 366 (2005). In sum, this tradeoff does not fulfill the underlying goals of either general or specific jurisdiction and may raise far more difficult questions than it resolves. Id. at 366-67. For these reasons, we decline to adopt the sliding-scale approach to relatedness.
As we have said, the but-for relatedness test is too broad and conceptually unlimited in scope, the substantive-relevance/proximate-cause test poses too narrow an inquiry, and the sliding-scale analysis conflates the fundamental distinction between general and specific jurisdiction that is firmly embedded in our jurisprudence. In light of these concerns, some courts have applied alternative approaches, requiring that a cause of action lie in the wake of the [defendant's] commercial activities in the forum, Deluxe Ice Cream Co. v. R.C.H. Tool Corp., 726 F.2d 1209, 1215-16 (7th Cir.1984), or that the forum contacts be critical steps in the chain of events that led to the [injury], In re Oil Spill by Amoco Cadiz, 699 F.2d 909, 915-16 (7th Cir.1983). The Sixth Circuit has generally applied a test that falls somewhere between proximate cause and but-for, requiring a substantial connection between the defendant's contacts and the plaintiff's claim to warrant the exercise of specific jurisdiction. See WEDGE Group, Inc., 882 F.2d at 1091 (6th Cir.1989); Southern Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 384 n. 27 (6th Cir.1968). In WEDGE Group, Inc., the court explained that the specific jurisdiction's relatedness element does not require that the cause of action formally `arise from' defendant's contacts with the forum [but instead requires] that the cause of action, of whatever type, have a substantial connection with the defendant's in-state activities. WEDGE Group Inc., 882 F.2d at 1091 (emphasis in original) (quoting Southern Mach. Co., 401 F.2d at 384 n. 27). The Supreme Court has yet to explicate the degree of relatedness necessary to support specific jurisdiction over a nonresident defendant. However, in Rush v. Savchuk, the Court did consider the relation between forum contacts and the litigation in a case filed in Minnesota for personal injuries arising from an Indiana automobile accident. 444 U.S. 320, 324, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980). The plaintiff claimed jurisdiction was proper in Minnesota because the defendant's insurance company did business there, and the insurer's obligation to defend and indemnify its insured in the accident litigation was inevitably the focus that would determine the victim's rights and obligations. Id. at 327-28, 100 S.Ct. 571. Holding that the insurance company's contacts could not be imputed to the defendant for the purpose of establishing jurisdiction, the Court concluded there were not significant contacts between the litigation and the forum because the insurance policy is not the subject matter of the case . . . nor is it related to the operative facts of the negligence action. Id. at 329, 100 S.Ct. 571. The Court concluded that the insurance contract pertained only to the conduct and not the substance [] of the litigation, and therefore the forum's jurisdiction was not affected. Id. Our limited jurisprudence similarly suggests a middle ground, more flexible than substantive relevance but more structured than but-for relatedness, in assessing the strength of the necessary connection between the defendant, the forum, and the litigation. See Guardian Royal, 815 S.W.2d at 229-33. In Guardian Royal, we spoke in terms of a substantial connection between the nonresident defendant and Texas arising from purposeful action or conduct directed here. Id. at 226 (citing Burger King, 471 U.S. at 475 n. 18, 105 S.Ct. 2174) (stating [s]o long as it creates a `substantial connection' with the forum, even a single act can support jurisdiction); see also Shell Compania Argentina de Petroleo, S.A. v. Reef Exploration, Inc., 84 S.W.3d 830, 837 (Tex.App.-Houston [1st Dist.] 2002, pet. denied) (stating contacts must have a `substantial connection' that results in the alleged injuries) (citing Guardian Royal, 815 S.W.2d at 226). Considering our own jurisprudence and the Supreme Court's analysis in Rush, we believe that for a nonresident defendant's forum contacts to support an exercise of specific jurisdiction, there must be a substantial connection between those contacts and the operative facts of the litigation. See Guardian Royal, 815 S.W.2d at 229-33; Rush, 444 U.S. at 329, 100 S.Ct. 571.