Court Opinion

ID: 9454951
Source: CourtListenerOpinion
Date Created: 2023-08-04 19:04:50.876438+00
Date Added: 2024-06-11T17:34:23.578827
License: Public Domain

ELY, Circuit Judge
(dissenting):
I respectfully dissent. The extension of Hawaii’s “long-arm” statute so that it stretches halfway around the world to grab the alien appellant brings to mind a caricature of Blind Justice with arms of rubber! I see such a caricature as depicting, and the majority's opinion as constituting, an implausible denial of due process as well as an unnecessary intrusion into the field of international relations. While the majority opinion is admittedly a scholarly exposition of prior case law, my Brothers seem to overlook the fact that every cited case deals with suits against American corporations and that the rationales of those cases are tailored to fit the needs of interstate commerce within this Country. I submit that a sympathetic reading of those cases reveals that they do not, and cannot, deal with the problem of the jurisdiction of an American state over an English corporation. The same reading demonstrates the injustice of the result reached in the majority opinion.
The extensive treatment of in personam jurisdiction by the Supreme Court in recent years has emphasized one recurrent theme. The exercise of jurisdiction over a nonresident defendant can be maintained only if he has “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940). The application of this concept of fairness rests upon a factual determination in each ease of whether the defendant’s conduct has been sufficient to justify the fiction that he has “given [his] consent to service and suit, consent being implied from [his], presence in the state through the acts of [his] authorized agents.” 1 One towering point in all the significant litigation on this subject is that the activity of the defendant and not the reach of the jurisdictional statute is of paramount importance in the resolution of the due process problem.
International Shoe also supplied the guidelines for the direction to be taken in making the necessary factual determination. “Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws * * * ” Id., 326 U.S. at 319, 66 S.Ct. at 160. The emphasis is on the extent of the defendant’s activity, the dependence of that activity on the laws of *237the forum state, and the relationship of the alleged cause of action to the activity. For example, the signing of a contract within the forum state will not support the state’s jurisdiction over a cause of action for breach of the contract if both parties are nonresidents and all other aspects of the transaction occurred outside the state. Kaye-Martin v. Brooks, 267 F.2d 394 (7th Cir.), cert. denied, 361 U.S. 832, 80 S.Ct. 84, 4 L.Ed.2d 75 (1959). From this, it appears that the jurisdictional question turns on many of the same issues as the choice-of-law question, but requires that the defendant’s conduct, rather than the interests of the state, be given transcending emphasis. In this particular case, Hawaii’s interests are protected without its stretching its arm into the heard of England.
Emphasis on the defendant’s conduct was basis for the Supreme Court’s most recent pronouncement on in personam jurisdiction in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958):
“The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant’s activity, but it is essential in each case that there be some act by which the defendant purposefully avails himself 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 (emphasis added).
The simple requirement that a nonresident defendant must have invoked the benefit and protection of the laws of the forum state is, of itself, a sufficient ground for reversing the challenged Order. Duple’s contract was with another English corporation, admittedly suable in Hawaii, and the contract was wholly executed and performed in England. Duple would have had no occasion to resort to either Hawaii law or the Hawaii courts for enforcement of its contractual rights.
It has been suggested that a cause of action based on products liability should be differentiated from other causes of action and that invocation of the privilege of doing business within the forum state should be irrelevant. This proposition is based on the tenet that the manufacturer should bear the risk of any loss occasioned by his product wherever that product may be carried by the natural flow of commerce. I cannot believe, however, that the acceptance of such a broad proposition could comport with due process. Moreover, the oppression of such a rule is inconsistent with my notion of fundamental fairness in relation to a manufacturer, such as Duple here, whose product might reach a particular forum in an isolated instance. See Pendzimas v. Eastern Metal Products Corp., 218 F.Supp. 524 (D.Minn.1961); O’Brien v. Comstock Foods, Inc., 123 Vt. 461, 194 A.2d 568 (1963). While I cannot fully agree with Pendzimas, it was there held that even though the defendant manufacturer shipped his product directly into the forum state, that was not enough to demonstrate the manufacturer’s intent to do business within the state. An almost identical result was reached in Mann v. Equitable Gas Co., 209 F.Supp. 571 (N.D.W.Va.1962), in which it was held that supplying one defective product was not sufficient contact with the forum state.
Of particular significance here is the fact that all of Duple’s activities took place before Hawaii’s adoption of its long-arm legislation. From the standpoint of either physical power over the alien nonresident or implied consent, it is conceded that Hawaii did not have jurisdiction over Duple at the time of the activities claimed to support jurisdiction *238when the suit was instituted 2 I simply cannot think it right that jurisdiction should be permitted, in the circumstances of this case, to rest upon ex post facto application of the statute.
In addition to the fact that Duple did not in any way or at any time invoke the protection and benefits of Hawaii’s law, I also deem it significant that Duple did not engage in any distributional scheme by which it could have placed its product in Hawaii without the efforts of its co-defendants in this case, which co-defendants, incidentally, have aligned themselves with the appellees in this appeal. Indeed, Duple was solicited for its product by one of the other defendants, the principal manufacturer. In this sense, the case is quite similar to Taylor v. Portland Paramount Corp., 383 F.2d 634 (9th Cir. 1967), wherein the defendant actress and co-producer had surrendered the product of her efforts to a third person for distribution. Despite her knowledge that the film in question would be displayed in Oregon, this court held that Oregon could not impose its jurisdiction upon her. And there, as is not the case here, Oregon had already enacted its long-arm statute when the defendant’s product reached its territory.
The reasoning of Taylor has been applied in the products liability-personal injury field to deny jurisdiction over a manufacturer of thermostats which were assembled into hot water heaters before entering the channels of distribution supplied by the manufacturer of the heater. Hodge v. Sands Mfg. Co., 151 W.Va. 133, 150 S.E.2d 793 (1966). A more compelling decision in its bearing on this case is Velandra v. Regie Nationale Des Usines Renault, 336 F.2d 292 (6th Cir. 1964). There, a foreign manufacturer of automobiles was able to defeat the claimed jurisdiction despite the fact that a subsidiary of the manufacturer maintained three dealerships for distribution of the product within the forum state. The Sixth Circuit held that the significance whether jurisdiction exists must of of the defendant’s contacts must be shown not only by the nature of its activities (selling to an independent subsidiary for distribution), but also by the volume of the business in relation to other facets of the economy, such as the volume of sales of other automobiles and other products and the defendant’s sales in other parts of the world. Id. at 298.
Turning to consideration of the “fairness” factor, I truly think it shocking that Duple should be required to travel halfway around the world to participate in the defense of a suit in which there are several other defendants directly privy to the transaction and who are amenable to the jurisdiction of the District Court. Their involvement in the transaction extended far beyond the remote and, as I see it, less than “minimal” participation of Duple.- The principal justification for the modern extension of a state’s in personam jurisdiction over nonresident defendants has centered around the expanded means of interstate commerce that have now evolved. As Mr. Justice Black pointed out in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957).
“Today many commercial transactions touch two or more States and may involve parties separated by the *239full continent. With this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity.”
Id. at 222, 78 S.Ct. at 201.
It is true that this two-pronged justification applies, with some degree, to the international commercial scene, but it certainly cannot be inflexibly applied in every case, regardless of the circumstances. Important criteria for determining course, be the existence or nonexistence of the factors mentioned by Mr. Justice Black. I am not at this time prepared to accept as undeniable fact that either the channels of commerce or the means and economy of transportation between England and Hawaii are comparable to those between our own states. And, even if we were in a position to appraise the factor and evaluate it unfavorably to Duple, that would not, of itself alone, require us to equate Duple’s single extraterritorial transaction with those “minimal contacts” which due process requires.
I am disturbed over another consequence of the majority’s result. Upholding Hawaii’s jurisdiction over Duple in a case such as this will necessarily have an adverse effect on our Country’s international relations, a field exclusively within the province of the legislative and executive branches of our Government. See Zschernig v. Miller, 389 U.S. 429, 88 S.Ct. 664, 19 L.Ed.2d 683 (1968). If alien corporations are to be made subject to the jurisdiction of American courts on the basis of an isolated transaction, then that decision should be made as a matter of national policy, particularly in light of possible reprisals, political, economic, or legal. See Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1121, 1127 (1966).
Balanced against all of the factors which weigh against the exercise of jurisdiction is the justifiable interest of the State of Hawaii. That interest, primarily, is that its residents recover against foreign manufacturers for injuries caused by defective products.3 It is a legitimate and commendable interest, but it is an interest which is fully protected in this case despite Duple’s absence from the suit. The allegations of the complaint, if true, indicate that in all probability one or more of Duple’s co-defendants will be held jointly or severally liable. I assume that there is nothing in the English law which would prevent their then undertaking, in the English courts, to seek indemnity or contribution from Duple. If Duple is eventually held liable in the District Court, either alone or jointly, I expect that neither the plaintiffs nor any jointly held co-defendant can enforce the judgment without resorting to the courts of England. And I cannot imagine that an English court would, without a full reexamination of the facts, enforce a judgment rendered in an American state against one of its citizens whose contact with the state was so extremely minimal and remote. In light of all the foregoing, I cannot believe that Hawaii’s interest in this action outweighs the intolerable burden which the majority places upon Duple’s back.
Summarizing, I reiterate. Duple did not invoke the benefit or protection of Hawaii law. It conducted the particular activities in England exclusively and at a time when the jurisdictional law of Hawaii did not purport to reach it. It pursued no distributional scheme in Hawaii. It is the creature of a friendly foreign nation and conducts its business oceans and a continent away from the forum state. To require it to undergo the hardship now thrust upon it is, in this case, highly offensive to my “traditional no*240tion of fair play and substantial justice” and thus violative of its rights under the American Constitution.
I would reverse.4

. The majority undertakes to explain that the reach of Hawaii’s long-arm statute does not depend upon the fictional concept of consent. I note, however, that the statute provides that the nonresident defendant who does certain acts “thereby submits his person * * * to the jurisdiction of the courts of” Hawaii. The use of the word “submits” connotes that the person committing the act thereby consents to jurisdiction. The cases dealing with a defendant’s conduct as a basis for jurisdiction also indicate that the modern due-process approach is more concerned with that conduct and the nonresident’s intent than with concepts of raw power. See note 2, infra.

. Appellees argue that the relevant point in time is the time of the accident. This is true as regards the time when the cause of action arose, but it does not govern the due process limitations on jurisdiction. These limitations are more concerned with the defendant’s intentional conduct than with later events outside his control at the time they occur. At the time of its activities, Duple could not have known that it might be required to defend a suit in Hawaii.
In addition, there are allegations in the complaint regarding solicitation of business after the passage of the statute. The alleged solicitations, which took place in England, apparently did not find favor and gave rise to no transactions of business within the state of Hawaii. I therefore do not consider them to be material to the basic issue with which we are here concerned.

. Hawaii’s legitimate interest does not, of course, include a transcendent right that its citizens always be permitted to maintain actions against nonresidents within Hawaii’s borders.

. After my above opinion was written, the Supreme Court of California, in a perceptive opinion authored by Justice Peters, reviewed the law of in personam jurisdiction in its application to a nonresident defendant in a suit involving products liability. Buckeye Boiler Co. v. Superior Ct., 80 Cal.Rptr. 113, 57 P.2d 45S (Cal., Aug. 28, 1969). The Court unanimously adopted the following basic approach:
“Once it is established that the defendant has engaged in activity of the requisite quality and nature in the forum state and that the cause of action is sufficiently connected with this activity, the propriety of an assumption of jurisdiction depends upon a balancing of the inconvenience to the defendant in having to defend itself in the forum state against both the interest of the plaintiff in suing locally and the interrelated interest of the state in assuming jurisdiction.”
The Court then emphasized several of the points which I have made. First, the Hanson v. Denckla requirement of “purposefully” invoking the forum’s protection should apply equally in products liability cases. Secondly, the Court emphasized that “doing business” within the state must be proved as a matter of “eommereial actuality,” requiring a showing of substantial economic contacts other than the transaction on which the cause of action is based. Finally, the relative inconvenience to the parties, the choice-of-law questions, the full-faith- and-credit factor, and the location of relevant evidence and witnesses are all factors to be considered in the balancing process.
It is reassuring to see that a great state court has undertaken an exhaustive analysis in the interest of reaching a fairer and more just result than any which would necessarily follow from a mere mechanical search for “minimum contacts.” It is interesting, if not anomalous, that California’s Supreme Court has evidenced more concern for the federal rights of a nonresident of its state than I believe the majority of this federal court has here done in adjudicating the rights of an English citizen.
Finally, I cannot resist the observation that if all state courts were so faithfully attentive to the rights of nonresidents, then asserted justifications for federal court diversity jurisdiction would cease to liave any persuasive value whatsoever. See Lumbermen’s Mutual Casualty Co. v. Elbert, 348 U.S. 48, 75 S.Ct. 151, 99 L.Ed. 59 (1954) (Frankfurter, J., concurring).