Opinion ID: 76984
Heading Depth: 2
Heading Rank: 1

Heading: Personal Jurisdiction Over Auto Club

Text: 42 Auto Club issued McGow an automobile insurance policy that covered all of the United States, and the automobile accident in issue occurred in Georgia and resulted in litigation in Georgia. Despite these facts, Auto Club argues on appeal that the district court lacked personal jurisdiction over it and erred in denying Auto Club's motion to dismiss. 2 Auto Club's appeal presents the issue of whether a forum state, like Georgia, can properly exercise personal jurisdiction over an insurer, like Auto Club, whose only relevant contacts with the forum are (1) the inclusion of the forum state within the covered territory of the insurer's policy and (2) the occurrence of the relevant accident in the forum state. For the reasons outlined below, we conclude that the district court properly exercised personal jurisdiction over Auto Club. 43 This Court has recognized that the Georgia long-arm statute, O.C.G.A. § 9-10-91, confers personal jurisdiction over a non-resident defendant to the maximum extent permitted by due process. Nippon Credit Bank, Ltd. v. Matthews, 291 F.3d 738, 746 (11th Cir.2002). In turn, [d]ue process requires that a non-resident defendant have certain minimum contacts with the forum so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1274 (11th Cir.2002) (citation omitted). 44 In concluding that sufficient minimum contacts exist between Auto Club and Georgia, the district court properly relied upon a theory of specific, as opposed to general, personal jurisdiction. 3 To constitute minimum contacts for purposes of specific jurisdiction consistent with due process, this Court has stated that the defendant's contacts with the applicable forum must satisfy these three criteria: 45 First, the contacts must be related to the plaintiff's cause of action or have given rise to it. Second, the contacts must involve some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum, thus invoking the benefits and protections of its laws. Third, the defendant's contacts with the forum must be such that the defendant should reasonably anticipate being haled into court there. 46 Francosteel Corp. v. M/V Charm, 19 F.3d 624, 627 (11th Cir.1994) (quotation marks, punctuation, and citation omitted). 47 The district court here correctly concluded that Auto Club's contacts with Georgia satisfied these three criteria and therefore the requirements of due process. First, Auto Club's contact with Georgia— i.e., its inclusion of Georgia within its covered territory for UM coverage, is related to McGow's cause of action for damages covered by the policy. 48 Second, contrary to Auto Club's arguments, Auto Club purposefully availed itself of the privileges and benefits of providing insurance coverage in Georgia and the entire United States. This Court has not examined whether a territory-of-coverage clause constitutes purposeful availment for purposes of subjecting the insurer to suit in the policy territory. However, at least four other circuits have decided that it can. See Ferrell v. West Bend Mut. Ins. Co., 393 F.3d 786, 791 (8th Cir.2005) (concluding that territory-of-coverage clause constituted sufficient contact between Wisconsin insurer and Arkansas to subject insurer to suit in Arkansas where the insured event occurred there); Payne v. Motorists' Mut. Ins. Co., 4 F.3d 452, 456 (6th Cir.1993) (stating that the fact that the insurer chose to provide coverage for all fifty states. . . constitutes purposeful availment of any individual state's forum); Farmers Ins. Exch. v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 913 (9th Cir.1990) (concluding the purposeful-availment requirement was established because the insurance policy coverage extended into Montana and an insured event resulted in litigation there) 4 ; Rossman v. State Farm Mut. Auto. Ins. Co., 832 F.2d 282, 286-87 (4th Cir.1987); see also Eli Lilly & Co. v. Home Ins. Co., 794 F.2d 710, 721 (D.C.Cir.1986) (product liability insurer for a national manufacturer was subject to personal jurisdiction in any forum in which its insured was likely to be subject to suit). 49 We agree with those circuits. As the Fourth Circuit noted in Rossman, [p]resumably, [the insurer] offers this type of broad coverage to induce customers to buy its policies and to pay higher premiums for them. The benefits thereby accruing to [the insurer] are neither fortuitous nor incidental. 832 F.2d at 287. Further, [i]f [the insurer] wished to avoid suit in [the forum state] or any other forum, it could have excluded that state from the `policy territory' defined in the policy. [The insurer] is well aware that such a limitation would make its policy less marketable. Id. By including Georgia within its covered territory, Auto Club purposefully sought to provide coverage for accidents occurring in Georgia, with full knowledge that litigation could result and that Auto Club could be haled into court in Georgia and required to make payments in Georgia based on that coverage. Auto Club purposefully included Georgia in its coverage territory in order to charge higher premiums. See Payne, 4 F.3d at 456 (The fact that [the insurer] chose to provide coverage for all fifty states—indeed, such coverage is almost certainly the only kind of marketable auto insurance—constitutes purposeful availment of any individual state's forum.). Under these same circumstances here, Auto Club purposefully availed itself of the privileges of Georgia. 50 Third, Auto Club reasonably should have foreseen being haled into court in Georgia because its policy covered the entire United States. Auto Club hence should have recognized that an accident could occur in any state and could result in litigation, and that Auto Club could be called upon to litigate and to pay in Georgia or any other state within the covered territory. As the Fourth Circuit has noted, [i]nsurance by its nature involves the assertion of claims, and resort to litigation is often necessary. Rossman, 832 F.2d at 286 (quotation marks and citation omitted). Thus, not only was it foreseeable that Auto Club might be sued in Georgia in connection with an accident in Georgia covered by its policy, but the expectation of being haled into court in a foreign state is an express feature of its policy. Id. 51 Auto Club does not argue that the district court's exercise of jurisdiction over it otherwise violates traditional notions of fair play and substantial justice. In any event, we conclude that it does not. In determining whether jurisdiction comports with traditional notions of fair play and substantial justice, the court looks at: (a) the burden on the defendant, (b) the forum State's interest in adjudicating the dispute, (c) the plaintiff's interest in obtaining convenient and effective relief, (d) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (e) the shared interest of the several States in furthering fundamental substantive social policies. Meier, 288 F.3d at 1276. Here, the accident occurred in Georgia, the defendant is a resident of Georgia, and Auto Club's policy provided insurance in Georgia. Under these circumstances, we easily conclude that the minimal inconvenience to Auto Club in defending the action in Georgia does not violate traditional notions of fair play and substantial justice. 52 Accordingly, the district court properly exercised personal jurisdiction over Auto Club in Georgia where its territory-of-coverage clause included Georgia and the accident occurred in Georgia. 5