Opinion ID: 411165
Heading Depth: 2
Heading Rank: 3

Heading: Constitutional Limitations on State Court Jurisdiction.

Text: 30 The Supreme Court has recently restated the fourteenth amendment due process limitations on state exercise of personal jurisdiction: 31 The personal jurisdiction requirement recognizes and protects an individual liberty interest. It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty. Thus, the test for personal jurisdiction requires that the maintenance of the suit ... not offend 'traditional notions of fair play and substantial justice.'  International Shoe v. Washington, 326 U.S. 310, 316 [66 S.Ct. 154, 158, 90 L.Ed. 95] (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463 [61 S.Ct. 339, 342, 85 L.Ed. 278] (1940). 32 Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, --- U.S. ----, ----, 102 S.Ct. 2099, 2104-05, 72 L.Ed.2d 492 (1982) (footnote omitted). The Court noted, however, that our holding today does not alter the requirement that there be 'minimum contacts' between the nonresident defendant and the forum state. Id. at ---- n. 10, 102 S.Ct. at 2105 n. 10. Nevertheless, when we examine the facts of this case for the adequacy of the Bar's relationship to Louisiana, the standard must be simply traditional notions of fair play and substantial justice, with contacts viewed as a way of demonstrating whether the standard is satisfied. 33 Burstein alleges that the activity of the California Bar which relates to Louisiana is of sufficient quality and quantity to allow suit there without violating fair play and substantial justice. In support of this allegation, she asserts: (1) that approximately fifty-three members of the California Bar live in Louisiana, and thus receive membership bills, the California Bar Journal, and other literature sent to Louisiana by the California Bar; (2) that eighty-nine Louisiana law school students applied to take the California bar examination during the 1970s, and consequently received application forms and results from and sent checks to the California Bar; (3) that her alleged contract with the Bar had sufficient relationship to Louisiana to support a suit on it there; and (4) that the Bar's alleged tort of negligent grading had sufficient consequences in Louisiana to permit personal jurisdiction. We will discuss first whether either of the latter two of these allegations alone will justify personal jurisdiction, and then whether the Bar's contacts as a whole will. 34
35 For the proposition that her alleged contract with the Bar alone will support suit in Louisiana, Burstein relies on Product Promotions, Inc. v. Cousteau, 495 F.2d 483 (5th Cir.1974), and McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). We believe that neither case compels a conclusion in her favor. 36 In Cousteau, the Texas plaintiff had visited the defendant in France, and they subsequently concluded a contract by mail. The defendant agreed to test a product of the plaintiff's and film the tests, with the results and film to be shipped to the plaintiff in Texas. The plaintiff began to market the items with advertising claiming that the defendant's alleged principal, Jacques Cousteau, had endorsed them. The defendant persuaded the plaintiff's retailer to stop selling them because of the allegedly unauthorized advertising; the plaintiff sued the defendant in federal court in Texas for breach of contract and various torts. The Fifth Circuit reversed the district court's finding of no personal jurisdiction over the defendant. 12 37 We believe, however, that Cousteau is distinguishable on its facts. In the first place, there was clearly a contract in Cousteau; the existence of a contract in this case is highly debatable. Further, the contract in Cousteau became effective upon the mailing of the plaintiff's acceptance from Texas; even if there is a contract here, it is unclear whether it became effective upon Burstein's mailing of the application and fee from Louisiana, upon the Bar's finding that she passed the character examination, upon her arrival at the testing place in California on the proper day, or at some other time. Moreover, the performance the Cousteau contract required of the defendant in Texas was delivery of the film and reports, an integral element of a contract for goods and services. Delivery of Burstein's bar examination results to Louisiana was not such an integral element of the Bar's performance of the alleged contract, which was purely for services. The Cousteaucourt found that Texas law might well govern the interpretation of the contract; it seems most unlikely that Louisiana law would control the interpretation of any contract in this case. In short, the substantial connection with and likely consequences in Texas of the Cousteau contract, 495 F.2d at 497, are wholly absent from this case. 38 In its consideration of the application of general principles of fairness to the facts in Cousteau, 13 the court noted that Texas had a legitimate and reasonable interest in providing a forum for [the] suit, because there was a rational nexus between this lawsuit and a Texas forum. Id. at 498 (footnotes omitted). No such nexus is apparent here. As will be discussed infra, Louisiana's interest in providing a forum for this suit is minimal. Since we find such substantial factual differences, we believe Cousteau does not control this case. 39 Similarly, we find McGee, supra, inapplicable. In McGee, the Texas defendant's sole connection with the California forum was the mailing to the decedent at his California home of an offer to renew a life insurance contract. The Supreme Court upheld the California courts' jurisdiction over the subsequent suit on the insurance contract by the plaintiff beneficiary. The Court's analysis took note of the fact that the contract had a substantial connection with California. 355 U.S. at 223, 78 S.Ct. at 201. This substantial connection arose from several facts: the contract was delivered in California, the premiums were mailed from there, and the insured died there; further, California had a manifest interest in seeing that California residents got the benefits of their insurance contracts. Id. The Court observed that the Californians, usually holders of small claims, might be unable to pursue nonresident insurers to their home states and that the crucial witnesses in such suits would often be found in California. The Court thus held that any inconvenience to the defendant in having the suit in California did not amount to a denial of due process. 40 One final relevant aspect of the facts of McGee is that California had expressed its interest in being the forum for such suits by passing a special statute to authorize service of process on nonresident insurers. Id. at 221, 78 S.Ct. at 200. While it is not clear whether the McGee Court relied on that fact, the Supreme Court has subsequently noted it in distinguishing McGee from other cases. See Kulko v. Superior Court, 436 U.S. 84, 98, 98 S.Ct. 1690, 1700, 56 L.Ed.2d 132 (1978); Hanson v. Denckla, 357 U.S. 235, 252, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958); cf. Shaffer v. Heitner, 433 U.S. 186, 214-15, 97 S.Ct. 2569, 2584-2585, 53 L.Ed.2d 683 (1977) (noting incongruence between Delaware's asserted interest in the suit and Delaware statute). 41 The first distinction between McGee and this case is, again, the disputability of the existence of a contract here. In McGee, the defendant solicited the contract; here, Burstein had to take the initial step of seeking an application. There was no delivery of the contract (if any) in this case. It is true that Burstein mailed the application fee from Louisiana, but that is not a precise analogy to the premium mailing, since the premiums were the only performance required of the decedent in McGee, while Burstein, at least before the Bar could be required to admit her to practice, had to take and pass the examination. Certainly Louisiana's interest in insuring that those few of its residents who take out-of-state bar examinations have them graded fairly is much less substantial than California's interest in preventing out-of-state insurance companies from wrongfully refusing to pay the claims of California residents. There is no analog here to the California service of process statute used in McGee. Finally, any witnesses necessary to Burstein's suit (or any Louisianan's suit against an out-of-state bar association) will not be in Louisiana. 42 The only factor favoring jurisdiction in McGee that is clearly present here is that Burstein may be financially unable to pursue the Bar to California. We decline to predicate jurisdiction solely on that circumstance. We thus find that the alleged breach of contract alone does not justify the exercise of personal jurisdiction in this case. 43
44 Burstein also alleges that the Bar negligently graded her examination in breach of a duty of care it owed to her, and that the resulting injury to her in Louisiana will permit this court to find personal jurisdiction over the defendant. While this theory has some surface plausibility, 14 it founders on the fact that there is absolutely no evidence that Burstein suffered any harm in Louisiana. 45 Assuming that there was a duty owed her and that the Bar breached it, the sole resulting harm is that Burstein cannot practice law in California. She has not alleged any injury to her professional reputation in Louisiana, nor any decrease in her law practice as a result of the Bar's actions. She has not indicated that being licensed to practice law in California would have increased her practice in Louisiana. Thus, there is absolutely nothing on which to predicate any finding of injury in Louisiana to support jurisdiction under this theory. 46
47 Since we cannot sustain personal jurisdiction solely on the basis of those actions of the Bar that gave rise to this suit, the only remaining question is whether the totality of its relations with Louisiana are such that maintenance of this suit would not offend traditional notions of fair play and substantial justice. Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, --- U.S. ----, ----, 102 S.Ct. 2099, 2105, 72 L.Ed.2d 492 (1982) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)). 48 The Bar's total alleged contacts with Louisiana are that approximately fifty of its members live there and thus receive mailings there, including membership fee statements; that those members pay their membership fees by checks mailed from Louisiana; and that some eighty-nine students from Louisiana law schools applied to take the California bar examination during the 1970s. There is no allegation that these students were Louisiana residents, although presumably most of them were, at least when they applied. 49 Any determination as to fairness must result from a weighing of all the relevant facts; the inquiry is therefore highly specific to each case and not susceptible of easy determination. [F]ew answers will be written 'in black and white. The greys are dominant and even among them the shades are innumerable.'  Kulko v. Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978) (quoting Estin v. Estin, 34 U.S. 541, 545, 68 S.Ct. 1213, 1216, 92 L.Ed. 1561 (1948)). Nevertheless, some guidance can be gleaned from previous cases, particularly in identifying the factors relevant to the decision. 50 The leading Supreme Court cases have evaluated the facts in light of a number of considerations. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), looked at the inconvenience to the defendant of having to litigate away from its residence, the relationship between the defendant's contacts with the forum and the cause of action, the quality and nature of the contacts, and the extent to which the defendant exercise[d] the privilege of conducting activities within [the] state ... [and] enjoy[ed] the benefits and protection of the laws of that state. Id. at 319, 66 S.Ct. at 159. 51 In McGee v. International Life Insurance Co., supra, the Court considered some new elements: the interest of the forum state in maintaining the suit, the difficulty to the plaintiff of pursuing the defendant to its home state, and the location of the likely witnesses. Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), laid particular emphasis on whether the defendant had purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. Id. at 253, 78 S.Ct. at 1239 (citing International Shoe, supra ). Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), which applied the International Shoe line of cases to in rem jurisdiction, observed that if the law of the forum state would be used to decide the controversy, that would support but not establish personal jurisdiction. It also stressed Hanson's concern with purposeful availment of the privileges of the forum. The Court reiterated that emphasis in Kulko v. Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978), and noted that the only reason the forum state in that case had any contact with the controversy was because the plaintiff had moved there. The Kulko Court also stated that a reasonable person in the defendant's place would not have expected his actions to result in having to litigate so far from his home, citing Shaffer v. Heitner, supra. Kulko, 436 U.S. at 97-8, 98 S.Ct. at 1699-1700. Finally, World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), identified as relevant: 52 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 ...; 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 .... 53 Id. at 292, 100 S.Ct. at 564 (citations omitted). 15 The Court went on to state: [T]he foreseeability that is critical to due process analysis ... is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. Id. at 297, 100 S.Ct. at 567 (citing Kulko v. Superior Court, supra, and Shaffer v. Heitner, supra ). 54 After viewing the facts of this case in light of the foregoing considerations, we find that it would offend traditional notions of fair play and substantial justice to require the Bar to defend this suit in Louisiana. While some of the factors support jurisdiction, on balance the entire case does not. 55 Unquestionably, it would be inconvenient for the Bar to litigate in Louisiana, but that is an aspect of every suit against a nonresident defendant. It seems likely, however, that the mere inconvenience to the Bar is less than that to Burstein if she were required to litigate in California. 56 The cause of action here is essentially unrelated to the Bar's contacts with Louisiana; the only connection is that Burstein's application was mailed from Louisiana and her score received there. Neither of those occurrences are truly relevant to her cause of action for misgrading, of which all the essential elements must have occurred, if at all, outside of Louisiana. Because of this, any witnesses likely to be called, other than Burstein herself, are located outside of Louisiana. 57 One of the aspects of this case that weighs most heavily against allowing suit in Louisiana is the relative interests of the two potential forum states. Louisiana's interest in the process of admission of its residents to the bars of other states is minimal at best. It certainly bears no comparison to the state interest in McGee, which was to give residents who held insurance policies issued by out-of-state companies (potentially a much larger group of residents than applicants for out-of-state bars) protection similar to that which the state provided through its insurance company regulations for customers of in-state companies. Insurance is, of course, an industry traditionally highly regulated by the state. 58 In contrast, while admission to the Louisiana bar is quite rightly an important subject of regulation for Louisiana, admission to the California bar is not. Problems with admission to the California bar simply do not have the same effect on Louisianans as insurance fraud by out-of-state companies could on Californians. 59 On the other hand, California clearly has a vital interest in this suit, because admission to a state's bar is an important subject of state regulation. Also, it seems more likely (although we reserve decision) that California law will govern the tort and contract claims than that Louisiana law will. 60 We also find it difficult to characterize the Bar's relationship to Louisiana as one of purposeful[ ] avail[ment] ... of the privilege of conducting activities within the forum State .... Hanson v. Denckla, 357 U.S. at 253, 78 S.Ct. at 1239. The fact that the Bar permits Louisianans to apply for or retain membership does not appear to be equivalent to the commercial activities relied on in International Shoe and McGee. The benefits conferred on the Bar by so doing are not very great. The Bar does not go into Louisiana to seek new members; all its contacts with Louisiana are initiated by Louisianans. This bears more of a resemblance to the activities in Hanson (Delaware trustee merely received instructions from settlor who had moved to Florida; Florida had no personal jurisdiction over trustee) and Kulko (father, a New York resident with custody, permitted daughter to live with mother in California; California had no personal jurisdiction over father) than in those McGee (solicitation of insurance contract; personal jurisdiction over insurer) or International Shoe (salesmen soliciting orders; personal jurisdiction over seller). 61 The only aspect of the case strongly supporting personal jurisdiction is that the burden on Burstein of maintaining suit in California is presumably greater than that on the Bar of defending in Louisiana, because she is an individual and may not be as financially able to bear the costs of litigating in a distant forum. In the first place, however, this is speculation; in the second, it is outweighed by all the other considerations pointing away from a Louisiana forum. 62 Finally, Burstein wishes us to consider an additional factor: she claims that the Bar so permeates the courts in California that she cannot get a fair trial of her claims in any court there, state or federal. We decline to accept so generalized and undocumented an accusation of bias, or to give it any weight in our determination. 63