Opinion ID: 2381510
Heading Depth: 2
Heading Rank: 1

Heading: personal jurisdictionfrom presence to fair play

Text: Over a century ago, the United States Supreme Court was called upon to decide the reach of a state's power to adjudicate a resident plaintiff's claim against an out-of-state defendant in a state court. The Court adopted and applied a simple rule: the state's power to adjudicate was circumscribed by its borders. If a defendant was present within those borders, then he was subject to the state's jurisdiction. Thus, the state courts in Oregon could enter a binding personal judgment against the defendant if, and only if, he was personally served with process within the state or voluntarily appeared before the court. Pennoyer v. Neff, 95 U.S. 714, 720-23, 24 L.Ed. 565 (1878). The presence rule was onerous for both plaintiffs and defendants. Plaintiffs had to capture defendants within a state's borders to serve process. The law compensated for this burden upon plaintiffs by allowing them to serve even transient defendants. This concession to plaintiffs worked a hardship on defendants, who were subjected to assertions of jurisdiction no matter how fleeting the passage of the defendants through a state. For this hardship, the common law provided relief of another kind: the notion that litigants should not be confined to inappropriate forums. This idea, which has developed into what we now call the doctrine of forum non conveniens, stepped in to bridge the gap between the interests of defendants and forums on the one hand and Pennoyer's dogmatic presence rule on the other. See Ehrenzweig, The Transient Rule of Personal Jurisdiction: the Power Myth and Forum Conveniens, 65 Yale L.J. 289, 292 (1956). Pennoyer's jurisdictional scheme proved too simplistic for the complexities of modern life, with its large corporations and controversies involving multi-state elements. A new jurisdictional rule was necessary. It was formulated when the United States Supreme Court dispensed with the presence rule and redefined the nature and extent of a state's power to adjudicate in the case of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In Shoe, the Court held that a state may exercise in personam jurisdiction over an out-of-state defendant when the defendant has certain minimum contacts with the forum such that maintenance of the suit does not offend traditional notions of fair play and substantial justice. Id. at 316, 66 S.Ct. at 158. Two standards derived from Shoe, the first relating to the existence of contacts between an out-of-state defendant and the forum, the second relating to notions of fair play and reasonableness. Although the standards have appeared at times to merge into one idea, they have evolved over the years to perform different functions in the due process analysis. The first standard departs from the traditional concept, described in Pennoyer, that imposition of jurisdiction is always proper where a defendant is present in the forum. In place of that concept, the Shoe Court developed the less stringent requirement that a defendant have minimum contacts with the forum. Id. at 316, 66 S.Ct. at 158. The second standard appears as a theme underlying the first. This theme expresses the Court's belief that irrespective of the contacts upon which a state's exercise of jurisdiction is based, jurisdiction must still be consistent with fair play and substantial justice. Id. It is the first standard, contacts, that dominates both the reasoning in Shoe and in most of the subsequent jurisdiction decisions of the Court. This standard has developed to incorporate most of the rules that inhibit a state in its exercise of jurisdiction over an out-of-state defendant. It is true that in the forty years following Shoe, courts dutifully recited the fair play standard. But once courts applied the analysis developed under the contacts standard and found that minimum contacts existed, courts did not have to be concerned that jurisdiction would falter upon application of the second, fair play, standard. The dominance of Shoe' s contacts standard diminished neither the need for nor recognition of the occasional application of the doctrine of forum non conveniens. In Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1946), the United States Supreme Court acknowledged that a court may apply the doctrine and discussed the circumstances under which the doctrine is appropriate. These include both the private interest of the litigant and the public interest. Private interest considerations include the ease of access to sources of proof, the availability of witnesses, and any other practical problem that makes the trial of a case easy, expeditious, and inexpensive. Id. at 508, 67 S.Ct. at 843. Public interest concerns focus on a court's attention on such factors such as the administrative difficulties that result from litigation pile-ups and the burden of jury duty upon communities which have no relation to the litigation. Id. at 508-09, 67 S.Ct. at 843. The Gilbert decision, which came only one year after Shoe, provided the same balance to Shoe 's jurisdictional scheme that post- Pennoyer jurisprudence provided to the presence test. Forum non conveniens, although not explicitly dealt with in the jurisdictional analysis, was still the bridge that transversed the gap between constitutional doctrines of jurisdiction and problems arising from inconvenient forums. The pre-eminence of contacts over fair play as a jurisdictional yardstick began to taper when the Court decided World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). In Volkswagen, the Court both acknowledged the existence of the fair play standard and extracted from prior case law the elements that comprise this standard. They include: (1) the burden on a defendant; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief, at least when that interest is not adequately protected by the plaintiff's power to choose the forum; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several states in furthering fundamental substantive social policies. Id. at 292, 100 S.Ct. at 564. Volkswagen's accumulation of these factors transformed the fair play standard from a dutifully recited incantation to a substantial test for gauging the propriety of jurisdictional assertions. Although not applied in Volkswagen, the factors contained the sum of ideas concerning fair play and substantial justice that had developed in case law over the years. Not surprisingly, the factors included and overlapped some of the same ideas that had been developing in the doctrine of forum non conveniens. The test for jurisdiction and the test for forum appropriateness were, therefore, undergoing parallel developments. See generally Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). In Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), the Court gave real power to the fair play standard by stating that minimum contacts, even where established, may be considered in light of the Volkswagen factors to determine whether the assertion of jurisdiction comports with fair play and substantial justice. Id. at 476, 105 S.Ct. at 2184. At the same time, the Court discussed the function of forum non conveniens in the context of a jurisdictional analysis. First, the Court conceded that, in most cases, the Shoe test of due process need never be implicated. Objections to jurisdiction arising from the fair play standard could be accommodated through a means short of finding jurisdiction unreasonable. Id. at 477, 105 S.Ct. at 2184. In plainer words, a court could address the concerns inherent in the fair play standard without raising those concerns to the level of a constitutional inquiry. Second, the Court noted examples of means short of finding jurisdiction unreasonable. Choice-of-law clashes, said the Court, may be accommodated through application of the forum's choice-of-law rules. Similarly, a defendant claiming substantial inconvenience may seek a change of venue under the federal venue statutes or forum non conveniens. Id. The Burger King view of the proper place for forum non conveniens was, therefore, not so distant from the place the doctrine had occupied in the years following both Pennoyer and Shoe. The doctrine reached where the due process test of jurisdiction did not and, once again, bridged the gap between the due process test for jurisdiction and concerns about forum appropriateness. Where the law provided that bridge, there was no need for application of the Volkswagen factors. The Court made it clear, however, that where a defendant presents a compelling case that the presence of the Volkswagen factors renders jurisdiction unreasonable, then the Constitution comes into play, and the fair play standard may defeat jurisdiction. [1] Id. at 477-78, 105 S.Ct. at 2184-85. Burger King 's pronouncement, however strong, did not determine the outcome in that case. In Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), however, application of certain factors of the fair play standard defeated jurisdiction independently of considerations about the defendant's contacts with the forum state. Id. at 114-16, 107 S.Ct. at 1034-36. The Court decided that a Taiwanese company which had been sued and had settled with a California plaintiff could not seek indemnification from a Japanese defendant in a California court. Specifically, the Court was influenced by: (1) the procedural and substantive policies of other nations whose interests were affected by the assertion of the state's jurisdiction; (2) the slight interests of the Taiwanese plaintiff and the California forum in the state's assertion of jurisdiction over the defendant; and (3) the severe burden on the Japanese defendant. Id. Justice Brennan noted in his concurring opinion that the case presented one of those rare instances in which the fair play standard defeated jurisdiction even where the defendant had purposefully availed himself of the forum. Id. at 116, 107 S.Ct. at 1035. The fair play standard had achieved, at long last, the independent status and power of the contacts standard. As Justice Stevens flatly stated, An examination of minimum contacts is not always necessary to determine whether a state court's assertion of personal jurisdiction is constitutional. Id. at 121, 107 S.Ct. at 1037.