Opinion ID: 3013816
Heading Depth: 2
Heading Rank: 2

Heading: Fed. R. Civ. P. 4(k)(2)

Text: 1. Claim Preclusion and Issue Preclusion as Applied to the Rule 4(k)(2) Claim The federal court in Texas dismissed Saudi’s case without prejudice for lack of personal jurisdiction. Acomarit contends Saudi already litigated whether jurisdiction lies under Fed. R. Civ. P. 4(k)(2), so he should have been estopped from litigating the Rule 4(k)(2) claim before the District Court here. See Saudi v. S/T Marine Atlantic, 159 F. Supp. 2d 469, 479-83 (S.D. Tex. 2000). Two types of estoppel might be applicable: res judicata (claim preclusion) and collateral estoppel (issue preclusion). Claim preclusion does not apply here. Three elements are required for claim preclusion to take effect: (1) a final judgment on the merits must have been rendered in a 9 prior suit; (2) the same parties or their privies are involved; and (3) the subsequent suit is based on the same cause of action as the original. Lubrizol Corp. v. Exxon Corp, 929 F.2d 960, 963 (3d Cir. 1991). The first prong has not been satisfied here. The federal court in Texas dismissed Saudi’s suit for lack of personal jurisdiction, rather than issuing a judgment “on the merits.” See Fed. R. Civ. P. 41(b); Compagnie des Bauxites de Guinee v. L’Union Atlantique S.A. d’Assurances, 723 F.2d 357, 360 (3d Cir. 1983). Furthermore, dismissals without prejudice are not considered to be “final judgments” as required for claim preclusion to take effect. Trevino-Barton v. Pittsburgh Nat’l Bank, 919 F.2d 874, 877-78 (3d Cir. 1990). As the District Court correctly concluded, claim preclusion does not bar Saudi from bringing the current Rule 4(k)(2) action. It is possible that issue preclusion, might bar Saudi’s Rule 4(k)(2) action.2 Issue preclusion may apply to non-merits judgments which are conclusive as to those matters actually adjudged. See Matosantos Commercial Corp. v. Applebee’s Int’l, Inc., 245 F.3d 1203, 1209 (10th Cir. 2001) (“Although the dismissal for lack of personal jurisdiction in the Puerto Rico district court does not have res judicata effect, it does have collateral 2 While counsel for Acomarit mainly focused its arguments on claim preclusion, their arguments appear to encompass issue preclusion as well. Counsel wrote in two separate briefs, “the Court correctly noted that the issue of Rule 4(k)(2) jurisdiction was ‘previously resolved in the Texas litigation,’” App. 496, and “[t]he issue of Fed. R. Civ. P. 4(k)(2) jurisdiction has already been decided by the United States District Court for the Southern District of Texas and serves as res judicata to bar the re-litigation of that claim in this case” (emphasis added). Furthermore, counsel for Acomarit supported its contentions by citing to Montana v. Supreme Court of the United States, 440 U.S. 147, 153-55 (1979), a case addressing issue preclusion. 10 estoppel effect, preventing the relitigation of issues decided in the Puerto Rico district court”); Okoro v. Bohman, 164 F.3d 1059, 1063 (7th Cir. 1999). To establish issue preclusion, Acomarit must demonstrate: “(1) the issue sought to be precluded is the same as that involved in the prior action; (2) that issue was actually litigated; (3) it was determined by a final and valid judgment; and (4) the determination was essential to the prior judgment.” Burlington N. R.R. v. Hyundai Merchant Marine Co., 63 F.3d 1227, 1232 (3d Cir. 1995) (quoting In re Braen, 900 F.2d 621, 628-29 n.5 (3d Cir. 1990), cert. denied, 498 U.S. 1066 (1991)). It appears all four elements may have been met here. The Southern District of Texas decided the same Rule 4(k)(2) issue that Saudi now raises, namely whether Acomarit was subject to personal jurisdiction based upon nationwide contacts. See Saudi, 159 F.Supp.2d at 479-83, and Saudi, 245 F.Supp.2d at 676-681. This issue was litigated in the Texas action, the Texas court issued a valid judgment regarding Rule 4(k)(2) jurisdiction, and the issue of Rule 4(k)(2) jurisdiction was essential to the Texas judgment in determining whether there was personal jurisdiction over Acomarit. See 159 F.Supp.2d at 479-83. Nonetheless, the able District Court did not specifically address issue preclusion and so we are reluctant to rule on it here, especially since we believe plaintiff cannot prevail on the merits. 2. Rule 4(k)(2) Discussion on the Merits Even if Saudi were permitted to bring a claim of personal jurisdiction under Fed. R. Civ. P. 4(k)(2), his claim would fail. Rule 4(k)(2) allows a federal court to exert 11 jurisdiction over a foreign defendant where the defendant lacks sufficient contacts in a single state to bring it within the reach of the state’s long arm statute, yet has enough contacts with the United States as a whole to make jurisdiction constitutional. Thomas A. Coyne, Federal Rules of Civil Procedure II-25 (2d ed. 2002). The rule, enacted in December 1993, provides: If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state. Therefore, to establish personal jurisdiction, there must be: (1) a claim arising under federal law; (2) the defendant must be beyond the jurisdictional reach of any state court of general jurisdiction; and (3) the defendant must have sufficient contacts with the United States so that the court’s exercise of personal jurisdiction over the defendant comports with the due process requirements of the Constitution or other federal law. See BP Chem. Ltd., 229 F.3d at 262; United States v. Swiss American Bank, Ltd., 191 F.3d 30, 38 (1st Cir. 1999). The third prong of the test under Rule 4(k)(2)—minimum contacts—is similar to that of personal jurisdiction for a particular state: “general jurisdiction is available when the defendant’s contacts unrelated to the litigation are ‘continuous and systematic.’” BP Chemicals, 229 F.3d at 262 (citing Helicopteros, 466 U.S. at 416.3 3 In Leasco, 468 F.2d 1326, a case decided before Rule 4(k)(2) was promulgated, the Court of Appeals for the Second Circuit stated: (continued...) 12 Saudi claims he presented sufficient contacts with the United States, described by the Texas court as a “laundry list” but not elaborated on, see 159 F. Supp. 2d at 483, to ensure due process has been satisfied. He also argues his injury necessarily has an effect within the United States. We do not believe that the “minimum contacts” presented by Saudi are sufficient to establish personal jurisdiction over Acomarit. As the District Court noted, Saudi presented even fewer contacts with the United States than the moving party in BP Chemicals Ltd., 227 F.3d 254. In BP Chemicals, we found that a foreign defendant did not have sufficient contacts with the United States as a whole to justify the exercise of Rule 4(k)(2) jurisdiction. Id. at 258. Although the defendant Taiwanese corporation 3 (...continued) [T]he Restatement (Second) of Conflict of Laws, § 27, lists various bases for the exercise of judicial jurisdiction over an individual who is not present. Those relevant here are doing business in the state, § 35; doing an act in the state, § 36; and causing an effect in the state by an act done elsewhere, § 37. 468 F.2d at 1340. The Second Circuit chose three of the many factors under the Restatement which apply to the facts of that particular case. See also, e.g., United States v. Swiss American Bank, Ltd., 191 F.3d 30 (1st Cir. 1999) (performing a Rule 4(k)(2) minimum contacts test but not limiting its analysis to the three factors described above); Chew v. Dietrich, 143 F.3d 24 (2d Cir. 1998) (same); World Tankers Carriers Corp., 99 F.3d 717 (5th Cir. 1996) (same); Central States v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000) (ERISA case); Doe v. Unocal Corp., 27 F. Sup. 2d 1174 (C.D. Ca. 1998); aff’d, 248 F.3d 915 (9th Cir. 2001); SEC v. Knowles, 87 F.3d 413, 416-19 (10th Cir. 1996) (involving a contract dispute); Associated Transp. Line, Inc. v. Productos Fitosanitarios Proficol El Carmen, S.A., 197 F.3d 1070, 1074-76 (11th Cir. 1999) (tort case involving communication of misinformation). 13 exported its products to the United States, held an ownership interest in a Delaware corporation, and entered into contracts requiring its personnel to travel to the United States for training, we held the cumulative effects of these contacts did not meet the requirements for general personal jurisdiction under Rule 4(k)(2). Id. at 258-59. In this case, there appear to be fewer jurisdictional connections than in BP Chemicals. Saudi’s accident occurred outside the United States, and Saudi presents no evidence that Acomarit solicited or transacted business in the United States. The District Court did not err in finding lack of sufficient contacts with the United States. C. Motion to Compel Discovery and Impose Sanctions Finally, Saudi alleges Acomarit abused the discovery process and blocked discovery of jurisdictional facts. He alleges Acomarit committed unauthorized redactions, submitted meritless objections to requests for telephone bills and financial records showing reimbursements in Pennsylvania, and made unsupported claims that documents were destroyed and cannot be produced. Saudi claims that he is entitled to a finding of personal jurisdiction based on this alleged willful obstruction of discovery. The District Court found no abuse of discovery. It noted, “Despite [Saudi’s] insistence that Acomarit has not produced documents in its possession, [Saudi] has not produced any evidence to prove that Acomarit is withholding documents.” Saudi, 245 F. Supp. at 681. We see no abuse of discretion. 14