Court Opinion

ID: 9486239
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:41:33.049698+00
Date Added: 2024-06-11T17:51:35.628473
License: Public Domain

EMILIO M. GARZA, Circuit Judge,
dissenting:
The majority holds (1) that “[t]he Southern District of Texas has [subject matter] jurisdiction under § 78aa” and (2) that “[g]iven that the relevant sovereign is the United States, it does not offend traditional notions of fair play and substantial justice to exercise personal jurisdiction over a defendant residing within the United States.” Because the majority confuses the rationales underlying the requirements of subject matter and personal jurisdiction, I respectfully dissent.
I agree that “the Southern District of Texas has [subject matter] jurisdiction under § 78aa.”1 See 15 U.S.C. § 78aa. However, *1259as the Supreme Court made clear in Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites, 456 U.S. 694, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982), the rationale supporting subject matter, as opposed to personal jurisdiction, is different. In Bauxites, the Supreme Court stated the following:
Subject-matter jurisdiction ... is an Art. Ill as well as a statutory requirement; it functions as a restriction on federal power, and contributes to the characterization of the federal sovereign.... None of this is true with respect to personal jurisdiction. The requirement that a court have personal jurisdiction flows not from Art. Ill, but from the Due Process Clause. The personal jurisdiction requirement recognizes and protects an individual liberty interest.
Id. at 701, 102 S.Ct. at 2104. These fundamental differences between subject matter and personal jurisdiction undermine the majority’s Due Process analysis in Part II.B.2 I agree that “the test for personal jurisdiction requires that the maintenance of the suit ,... not offend traditional notions of fair play and substantial justice.” Id. (attributions omitted). I disagree, however, with the majority’s conclusion that “[sjóvereignty ... may remain germane [in determining personal jurisdiction] because it defines the scope of the due process analysis.” See id. (“[Personal jurisdiction] represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty.”). Because the personal jurisdiction requirement is a function of the individual liberty interest, the proper focus for a personal jurisdiction test should be on protecting an individual’s liberty interest in avoiding the burdens of litigating in a distant or inconvenient forum.3 Requiring that the individual defendant in a national service of process ease only reside somewhere in the United States does not protect this interest.4 Consequently, I believe that the majority errs when it concludes that the proper personal jurisdiction test in a national service of process case is whether minimum contacts exist between the individ*1260ual defendant and the national sovereign. The authority5 which the majority cites are not persuasive in light of Bauxites. Accordingly, I respectfully dissent.

. I disagree, however, with the way the majority reaches its conclusion. The majority reads § 78aa to require that the act constituting the violation occur in a specific federal district, for that district to obtain subject matter jurisdiction. This analysis confuses § 78aa’s separate treatment of subject matter jurisdiction, personal jurisdiction, and venue. For purposes of subject matter jurisdiction, the statute clearly states, that "[t]he district courts of the United States ... • shall have exclusive jurisdiction of violations of this chapter.” The statute's language concerning *1259where an action may be brought refers to venue, and not subject matter jurisdiction.

. No one disputes that the nationwide service of process contemplated by § 78aa is limited by the Due Process clause of the Fifth Amendment. See, e.g., Securities Investor Protection Corp. v. Vigman, 764 F.2d 1309, 1313-17 (9th Cir.1985), rev’d on other grounds, - U.S. -, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992). In other words, while § 78aa provides a basis for conferring personal jurisdiction, it does not address a defendant's amenability to suit for purposes of satisfying due process. See, e.g., International Shoe Co. v. State of Washington, 326 U.S. 310, 317, 66 S.Ct. 154, 159, 90 L.Ed. 95 ("True, some of the decisions holding the corporation amenable to suit have been supported by resort to the legal fiction that it has given its consent to service and suit, consent being implied from its presence in the state through the • acts of its authorized agents. But more realistically it may be said that those authorized acts were of such a nature as to justify the fiction.” (citations omitted)); id. at 319, 66 S.Ct. at 160 (“Whether due process is satisfied must [therefore] depend ... on the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure.”).

. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 290, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980) ("The concept of minimum contacts ... protects the defendant against the burdens of litigating in a distant or nonconven-ient forum.... The protection against inconvenient litigation is typically described in terms of ‘reasonableness’ or ‘fairness.’ ”).

. See Jon Heller, Pendent Personal Jurisdiction and Nationwide Service of Process, 64 N.Y.U.L.Rev. 113 (1989) ("The national contacts ' test implies that, when process is served pursuant to a nationwide service of process statute, the only limitation upon assertion of personal jurisdiction imposed by due process is sovereign power. None of the reasoning advanced in support of this test, however, explains why the Supreme Court’s fairness requirement is met when defendants are forced to defend suits in distant or inconvenient forums with which they do not have minimum contacts.”); Robert A. Lasardi, Nationwide Service of Process: Due Process Limitations on the Power of the Sovereign, 33 Vill.L.Rev. 1 (1988) ("If individual liberty, or fairness, is the key, then whether or not the defendant is within the sovereign's boundaries, and therefore subject to its sovereign power, she is entitled to protection from an unfair choice of forum.”); Stewart M. Middleman, Federal Courts — Due Process Protection Against Assertions of Personal Jurisdiction in Federal Question Cases—Securities Investor Corp. v. Vigman, 764 F.2d 1309 (9th Cir.1985), 59 Temp.L.Q. 1267 (1986) ("It would seem that if a defendant's fourteenth amendment individual liberty interest can be violated by burdensome litigation then/in at least some federal question cases, burdensome litigation could also violate a defendant’s individual liberty interest protected by the fifth amendment's due process clause.”).

. See Maj. op. at 1258 (citing inter alia United Liberty Life Ins. Co. v. Ryan, 985 F.2d 1320, 1330 (6th Cir.1993); Vigman, 764 F.2d at 1315-16).