Opinion ID: 324764
Heading Depth: 1
Heading Rank: 4

Heading: due process limitations

Text: 49 Ultimately, amenability to extra-territorial personal jurisdiction is a question of due process. The long-standing 'presence' test of due process set forth in Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878) has been considerably eroded in favor of the less stringent requirement announced in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) that a defendant must 50 'have certain minimum contacts with (the forum) such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice. 326 U.S. at 316, 66 S.Ct. at 158. 51 The same rule was adhered to in McGee v. International Life Insurance Co., 355 U.S. 220, 222, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). 52 Although the parties to this appeal have not raised the point in arguing the issue of minimum contacts, we recognize, of course, that International Shoe and its direct progeny reached the federal judiciary either by way of review of state court judgments or by way of diversity jurisdiction, and as a result, the holdings in those cases have been framed in terms of restraints on state power. In this litigation, on the other hand, a federally created right is at issue, and due process is properly a matter for examination in light of the Fifth Amendment rather than the Fourteenth Amendment. 53 That is not to say, however, that the International Shoe line of cases is irrelevant to our inquiry here. The due process clause of the Fifth Amendment is essentially a recognition of the principles of justice and fundamental fairness in a given set of circumstances, Galvan v. Press, 347 U.S. 522, 530, 74 S.Ct. 737, 98 L.Ed. 911 (1954); Aetna Insurance Company v. Hartshorn, 477 F.2d 97, 100 (5th Cir. 1973), and, so viewed, on the facts of this case, we can perceive no operative difference between the concept of due process as applied to the states and as applied to the federal government. This and other courts have reached this result, explicitly or tacitly, and have applied the 'minimum contacts' standard to federal question cases in which in personam jurisdiction was at issue, and we deem it appropriate to do so here. 2 Fisons Limited v. United States, 458 F.2d 1241, 1250 (7th Cir. 1972), cert. denied, 405 U.S. 1041, 92 S.Ct. 1312, 31 L.Ed.2d 581 (1972); Fraley v. Chesapeake and Ohio Railway Company, 397 F.2d 1, 3--4 (3d Cir. 1968); Volkswagen Interamericana, S.A. v. Rohlsen, 360 F.2d 437, 440 (1st Cir. 1966), cert. denied, 385 U.S. 919, 87 S.Ct. 230, 17 L.Ed.2d 143 (1966); Stanley v. Local 926 of Op. Eng., AFL--CIO, 354 F.Supp. 1267, 1271 (N.D.Ga.1973); SCM Corporation v. Brother International Corporation, 316 F.Supp. 1328, 1333--1334 (S.D.N.Y.1970); Securities and Exchange Commission v. Myers, 285 F.Supp. 743, 748--749 (D.Md.1968); Japan Gas Lighter Association v. Ronson Corp., 257 F.Supp. 219, 232 (D.N.J.1966). Cf., Goldberg v. Mutual Readers League, Inc., 195 F.Supp. 778, 782--783 (E.D.Pa.1961); Lone Star Package Car Co. v. Baltimore and O.R. Co., 212 F.2d 147, 154--155 (5th Cir. 1954). 54 The question of minimum contacts has a variety of facets, but its essence is that due process restricts the exercise of in personam jurisdiction to instances in which it would not be unfair to a defendant. Milosavljevic v. Brooks, 55 F.R.D. 543, 547 (N.D.Ind.1972). Thus, the number and extent of contacts which will support exercise of personal jurisdiction are not quantifiable and cannot be determined by application of a rigid formula or rule. In other words, the issue of minimum contacts turns on the specific facts of each case, and the existence or absence of jurisdiction depends on an assessment of the quality and nature of a defendant's activity. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228,2 L.Ed.2d 1233 (1958). The test, then, is a flexible one which emphasizes the reasonableness of subjecting a defendant to suit; and the proper inquiry is whether a non-resident defendant can be said to have invoked, by act or conduct, the benefits and protection of the laws of the forum. International Shoe, supra, 326 U.S. at 319, 66 S.Ct. 154; Hanson, supra, 357 U.S. at 253, 78 S.Ct. 1228; Hutter Northern Trust v. Door County Chamber of Commerce,403 F.2d 481, 484 (7th Cir. 1968); Consolidated Laboratories, Inc. v. Shandon Scientific Co., 384 F.2d 797, 801 (7th Cir. 1967). 55 Applying these principles to the case at hand, we hold that Metz had the requisite minimum contacts with the state of Illinois to subject it to the personal jurisdiction of the District Court. Unlike the situation in Marston v. Gant, 351 F.Supp. 1122 (E.D.Va.1972), upon which Metz relies, Metz was not merely a foreign manufacturer which sold to various foreign exporters, knowing that the exporters would, in turn, sell to distributors throughout the world, including the United States. 56 Originally, Metz attempted to obtain a license under the Honeywell patents, and from the time that the license negotiations were terminated, Metz was acting with the knowledge that exportation of the accused devices to the United States would infringe Honeywell's patent rights. Moreover, by entering into the exclusive agreement for distribution in the United States, Metz purposely promoted American sales and ensured that such infringement would take place, causing injury to Honeywell, a corporation with its principal place of business in Illinois. Subsequently, sales did, in fact, take place in Illinois and these sales obviously generated revenue for Metz, although such revenue passed through EPOI. 57 To the extent that a corporate defendant avails itself of the privilege of conducting activities in a state, it enjoys the benefits and protection of the laws of that state, International Shoe, supra, 326 U.S. at 319, 66 S.Ct. 154, and we believe that Metz has done so by injecting its products into the Illinois market-place. Metz urges that its activity does not fit this mold simply because its products are sold to EPOI 'f.o.b. German seaport or German border,' Appellee's Brief at 11, but that position is not, of course, a realistic evaluation of the nature and quality of Metz's business affairs, viewed in light of the arrangement with EPOI. 58 Direct contact with the forum state is not essential to the exercise of personal jurisdiction. Metz may not have physically entered the state of Illinois, but it placed its flash devices in the stream of commerce under such circumstances that it should reasonably have anticipated that injury through infringement would occur there. Jones Enterprises, Inc. v. Atlas Service Corporation, 442 F.2d 1136, 1138--1140 (9th Cir. 1971); Duple Motor Bodies, Ltd. v. Hollingsworth, 417 F.2d 231, 235 (9th Cir. 1969); Eyerly Aircraft Co. v. Killian, 414 F.2d 591, 596--597 (5th Cir. 1969); Keckler v. Brookwood Country Club, 248 F.Supp. 645, 648--649 (N.D.Ill.1965); Gray, supra, 22 Ill.2d at 441--443, 176 N.E.2d at 766. We look to the economic and commercial realities of this case, and in our view, it is not within the contemplation of the concepts of fairness and due process to allow a wrongdoing manufacturer to insulate himself from the long arm of the courts by using an intermediary or by professing ignorance of the ultimate destination of his products. 59 Lastly, we recognize, as the Supreme Court stated in International Shoe, supra, 326 U.S. at 317, 66 S.Ct. at 158, that '(a)n 'estimate of the inconveniences' which would result to' a defendant is relevant to the issue of 'minimum contacts.' We have taken this into account and have determined that any inconvenience that may come to Metz in defending this lawsuit is outweighed by the considerations discussed above. Inconvenience alone is not a violation of due process. 60 We conclude that the activities engaged in by Metz were sufficient to establish minimum contacts with the state of Illinois, and that exercise of personal jurisdiction pursuant to the 'tortious act' provision of the Illinois long-arm statute, Ill.Rev.Stat. Ch. 110, § 17(1)(b), would not violate the due process clause of the Fifth Amendment. 61 Reversed and remanded. 62