Opinion ID: 146156
Heading Depth: 2
Heading Rank: 1

Heading: Reasonableness of Exercising Personal Jurisdiction

Text: We apply Federal Circuit precedent when considering whether the district court properly declined to exercise personal jurisdiction. Akro Corp. v. Luker, 45 F.3d 1541, 1543 (Fed.Cir.1995) (citing Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564 (Fed.Cir.1994)). Because personal jurisdiction is a question of law, we review de novo whether exercising personal jurisdiction over either SPEC or VGT would be unreasonable. 3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373, 1376 (Fed.Cir.1998). In general, a federal district court may exercise personal jurisdiction over a non-consenting out-of-state defendant if two requirements are satisfied. First, the defendant must be amenable to service of process. See Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987) (Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied.); Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed.Cir.1998) (explaining that usually the first step in a personal jurisdiction analysis is determin[ing] whether a provision makes the defendant amenable to process.). Determining whether a defendant is amenable to service of process often entails considering whether the defendant is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located, Fed.R.Civ.P. 4(k)(1)(A). This, in turn, involves examining the state's long-arm statute. See, e.g., Red Wing Shoe Co., 148 F.3d at 1358. Second, exercising jurisdiction over the defendant must comport with due process. See Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1329 (Fed.Cir.2008) (Determining whether personal jurisdiction exists over an out-of-state defendant involves ... [considering] whether the assertion of personal jurisdiction would violate due process. (quoting Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed.Cir.2001))). The constitutional touchstone of the due process inquiry remains whether the defendant purposefully established `minimum contacts' in the forum State. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Finding the necessary minimum contacts to exist, however, does not end the inquiry. Even where a party has been shown to have minimum contacts with the forum state, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with `fair play and substantial justice,' i.e., whether exercising jurisdiction would be reasonable. See id. at 476, 105 S.Ct. 2174. The requirements inherent in the concept of `fair play and substantial justice' may defeat the reasonableness of jurisdiction even if [a] defendant has purposefully engaged in forum activities. Id. at 477-78, 105 S.Ct. 2174. Factors relevant to this inquiry may include the following: [T]he burden on the defendant, the forum State's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies. Id. at 476-77, 105 S.Ct. 2174 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490 (1985)) (internal quotation marks omitted). The Supreme Court has stated that where a defendant [that] purposefully has directed [its] activities at forum residents seeks to defeat jurisdiction, [it] must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable. Id. at 477, 105 S.Ct. 2174. We have explained that these compelling cases are limited to the rare situation in which the plaintiff's interest and the state's interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum. Beverly Hills Fan Co., 21 F.3d at 1568. Here, the district court correctly noted that the relevant long-arm statute, Nevada Revised Statute § 14.065, permits Nevada courts to exercise personal jurisdiction over a party to the extent permitted by the United States Constitution. See Baker v. Eighth Judicial Dist. Court, 116 Nev. 527, 531, 999 P.2d 1020 (2000) (Nevada's long-arm statute, NRS 14.065, reaches the limits of due process set by the United States Constitution. (citation omitted)). Thus, the two-step personal jurisdiction inquiry described above reduces to a single question: Does exercising personal jurisdiction over SPEC and VGT satisfy due process? The district court acknowledged that exercising personal jurisdiction over SPEC and VGT would satisfy due process only if each company had the requisite minimum contacts with Nevada. But instead of determining whether either SPEC or VGT had such minimum contacts with Nevada, the district court evaluated only whether exercising personal jurisdiction over either SPEC or VGT should be defeated as being unreasonable, applying the seven-factor test set out by the Ninth Circuit in Amoco Egypt Oil Co. v. Leonis Navigation Co., 1 F.3d 848 (9th Cir.1993). The district court concluded that exercising personal jurisdiction would be unreasonable, finding that three factors militated in favor of this conclusion: (1) both SPEC and VGT had limited purposeful contact with Nevada, consisting essentially of only appearances at trade shows; (2) both the companies and their respective witnesses are located outside Nevada, making defending a lawsuit in Nevada burdensome; and (3) both companies would be subject to personal jurisdiction in another forum, namely, Michigan or Tennessee. Order Granting Motion to Dismiss at 2-3, Video Gaming Techs. ( Dismissal Order ). The court found the remaining considerations neutral, concluding that this case does not present issues of state sovereignty; the parties' respective home states have an interest in the litigation equal to that of Nevada; and a Nevada district court would be no more convenient or efficient for Patent Rights than any other district court. Id. at 3. The district court also considered that Patent Rights is a Nevada company that chose to pursue its claim in Nevada. Id. Patent Rights contends that under our precedent this case does not present a compelling situation where Patent Rights' and Nevada's interests are outweighed by the burden faced by either SPEC or VGT. Patent Rights argues that, on balance, the factors set forth in Burger King indicate that exercising personal jurisdiction over SPEC and VGT would be reasonable. SPEC and VGT disagree and contend that weighing the relevant factors leads to the conclusion that asserting personal jurisdiction over either company is unreasonable. Specifically, they argue that defending this suit in Nevada is overly burdensome because their respective witnesses and documents related to the alleged infringing products are outside Nevada. They also contend that Tennessee and Michigan each have an interest in this suit equal to, if not greater than, that of Nevada and that either Tennessee or Michigan provides a more efficient forum to hear Patent Rights' claims. SPEC and VGT believe that Nevada's interest here is limited to providing a forum for Nevada citizens who would be severely economically disadvantaged by pursuing their claims outside Nevada. They claim that Patent Rights would not suffer significant hardship, pecuniary or otherwise, if forced to pursue its claims elsewhere. We agree with Patent Rights. [B]ecause modern transportation and communications have made it much less burdensome for a party sued to defend [itself] outside its home state, Burger King, 471 U.S. at 474, 105 S.Ct. 2174 (citation omitted), defending this suit in Nevada is not prohibitively burdensome for either SPEC or VGT. Indeed, their admitted presence at numerous trade shows in Nevada indicates that, despite their arguments to the contrary, neither company faces a particularly onerous burden in defending itself in Nevada. When SPEC's and VGT's respective burdens are weighed against the other factors set forth in Burger King, in particular Nevada's and Patent Rights' interest in this litigation, it cannot properly be concluded that the either SPEC or VGT has presented a compelling case that the presence of some other consideration would render jurisdiction unreasonable. See id. at 477, 105 S.Ct. 2174. Here, Nevada has an interest in providing a convenient forum for all Nevada citizens, not just those who might face severe economic hardship if forced to litigate outside Nevada. Cf. id. at 473, 105 S.Ct. 2174. (A State generally has a `manifest interest' in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors.). This interest extends to actions for patent infringement. Beverly Hills Fan Co., 21 F.3d at 1568. Moreover, Nevada has a substantial interest in cooperating with other states to provide a forum for efficiently litigating [a] plaintiff's cause of action. Id. (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 777, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984)). By providing a forum for Patent Rights' claims against SPEC and VGT, Nevada spares Tennessee and Michigan the burden of providing a forum for Patent Rights. Not only does this further the interstate judicial system's interest in obtaining the most efficient resolution of controversies, it also satisfies Patent Rights' interest in obtaining convenient and effective relief, as Patent Rights might otherwise face the substantial burden of pursuing separate, largely similar actions against SPEC and VGT in their respective home states. Because patent infringement is a matter of federal law, the shared interest of the several States in furthering fundamental substantive social policies is not implicated by this action. See Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1352 (Fed.Cir. 2003). After weighing the relevant factors, we are convinced that this is not the rare situation in which the plaintiffs and the state's interests in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendants to litigation within the forum. See Beverly Hills Fan Co., 21 F.3d at 1568. We therefore conclude that the district court erred when it declined to exercise jurisdiction over SPEC and VGT solely on the ground that to do so was unreasonable.