Court Opinion

ID: 9468297
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:11:30.903692+00
Date Added: 2024-06-11T17:40:48.654333
License: Public Domain

KEITH, Circuit Judge,
dissenting.
I respectfully dissent. The majority opinion holds that Congress may require a citizen to submit to the jurisdiction of any one of the 95 federal district courts in this country without regard to whether the citizen has had previous contact with a particular jurisdiction. In so holding, the majority concludes that the appellees may be sued in federal district court in Tennessee even though they have never had any contact with that State.
The court, in refusing to apply a “minimum contacts” analysis to the facts of this ease, attempts to distinguish the Supreme Court’s decision in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The majority first states that the “minimum contacts” test was not originally intended to restrict a federal court’s exercise of jurisdiction over persons residing within the territorial boundaries of the United States. It then concludes that International Shoe’s analysis must be limited to questions involving a state’s power to compel the appearance of non-resident defendants before courts within the borders of the state. However, more recent developments in the law recognize that an analy*827sis similar to that used in International Shoe must also be applied in federal question cases. Black v. Acme Markets, Inc., 564 F.2d 681, 686 n.8 (5th Cir. 1977); Lone Star Package Car Co. v. Baltimore and Ohio R. Co., 212 F.2d 147, 155 (5th Cir. 1954); Fraley v. Chesapeake and Ohio Ry., 397 F.2d 1, 3 (3d Cir. 1968); Oxford First Corporation v. PNC Liquidating Corp., 372 F.Supp. 191, 198 (E.D.Pa.1974); Getter v. Dickinson & Company, 366 F.Supp. 559 (S.D.Iowa 1973). See also Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); United States v. Scophony Corp., 333 U.S. 795, 804 n.13, 68 S.Ct. 855, 860 n.13, 92 L.Ed. 1091 (1948). But see First Flight Company v. National Car Loading Corporation, 209 F.Supp. 730, 736 (E.D.Tenn.1962). The due process clause of the Fifth Amendment protects citizens from the arbitrary exercise of in personam jurisdiction by federal courts just as the due process clause of the Fourteenth Amendment protects citizens from such action by state courts. The majority acknowledges the applicability of the Fifth Amendment’s due process clause here. However, the court states that in the federal question cases, the only due process restriction on the exercise of in personam jurisdiction by federal district courts over persons residing within the United States is the notice requirement of Mullane v. Central Hanover Bank and Trust, 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), and its progeny. The Mullane test, which requires “notice reasonably calculated ... to apprise interested parties of the pendency of the action,” id. at 314, 70 S.Ct. at 657, defined the right protected by the Fifth Amendment’s due process clause as the “fundamental right ... to be heard.” Id.
It is my belief that the majority mistakes Mullane’s requirement of reasonable notice as the constitutional right at issue in that case; when in fact, reasonable notice is only one means adopted by the Court to ensure that the individual’s fundamental right to be heard is not abridged. Common sense dictates that a court cannot numbly apply Mullane’s notice requirement as if notice alone assures due process. Moreover, since the decision in International Shoe, the Supreme Court has recognized that there may be other due process limitations on a federal court’s exercise of in personam jurisdiction. However, the Court has not had occasion to define the limits on Congress’ power to compel an individual to defend a federal question suit in a distant federal forum. In United States v. Scophony Corp., the Court stated:
[T]he government, however, suggests that, in view of our recent decision in International Shoe Co. v. Washington, 326 U.S. 310 [66 S.Ct. 154, 90 L.Ed. 95], which was concerned with the jurisdiction of a state over a foreign corporation for purposes of suit . .., and in view of aspects of similarity between that problem and the one now presented, we extend to this case and to § 12 [of the Clayton Act] the criteria there formulated and applied. There is no necessity for doing so. The facts of the two cases are considerably different and, as we have said, we are not concerned here with finding the utmost reach of Congress’ power. Id. at 804 n.13, 68 S.Ct. at 860 n.13.
The Scophony Court found it unnecessary to determine if the International Shoe criteria should be extended to federal question cases since the defendants met the jurisdictional prerequisites required under both the applicable statutes and the “minimum contacts” test formulated in International Shoe.
In light of the absence of Supreme Court authority on this question, I am persuaded by those courts which have held that any constitutionally acceptable test must be based on the notions of “fairness and substantial justice” relied on in International Shoe, supra at 316, 66 S.Ct. at 158. The Supreme Court’s decision in Shaffer v. Heitner, supra, strongly suggests that the Court would also use those notions as guideposts for determining the constitutionality of an exercise of in personam jurisdiction in federal question cases against an alleged denial of due process. United States v. Scophony Corporation, supra.
*828The Shaffer Court reaffirmed the importance of applying a basic fairness test in determining whether an individual’s right to be heard has been infringed upon by a court’s exercise of personal jurisdiction. Justice Marshall, writing for the Shaffer majority, stated that the “relationship among the defendant, the forum, and the litigation,” rather than the outdated concept of territorial sovereignty is now the central concern in any inquiry into personal jurisdiction. 433 U.S. at 204, 97 S.Ct. at 2580. Of course Shaffer involved the exercise of state power against a non-resident defendant and did not address the question of personal jurisdiction in federal question cases. Nonetheless, the case is of great significance because it indicates that the Supreme Court would apply a traditional fairness test to any claimed denial of the fundamental right to be heard whether made against a state or federal court. This test recognizes the due process rights of all defendants by its abandonment of the territorial sovereignty strictures of the International Shoe analysis.
I do not suggest that this “modern” International Shoe analysis applied in Shaffer should be blindly adhered to in federal question cases. I think that the analysis should be modified for use in federal question cases where the policy considerations for exercise of personal jurisdiction often differ greatly from those of a lone state. A test which balances the federal and individual interests is necessary. Due process requires a balancing of the following factors in determining the fairness and, thus, the constitutionality of the exercise of personal jurisdiction by federal courts over its citizens:
(1) the extent of the defendant’s contacts with the place where action was brought; (2) the inconvenience to the defendant of having to defend in a distant jurisdiction, taking into consideration the nature and extent and interstate character of the defendant’s business, and the distance from the defendant of the place where the action was brought; (3) judicial economy — the judiciary’s needs to avoid duplication of law suits and to ensure equality of treatment by having all possible defendants joined in a single lawsuit; (4) the residence(s) of the witness(es) and situs of documentary evidence; and (5) whether any governmental policy would be unduly thwarted by the federal court’s refusal to exercise personal jurisdiction over the defendant. Oxford First Corp., supra at 203-04. See also Lone Star Package Car Co. v. Baltimore & Ohio R. Co., supra; International Shoe v. Washington, supra.
Applying the test outlined above, I would hold that the federal district court in Tennessee does not have jurisdiction over the Alabama residents. The appellees, Mr. & Mrs. Bridges and the Henderson National Bank, have had no contact with the forum court. No real property at issue in the case is located in the federal district which encompasses the State of Tennessee. The Bridges did not reside within the Middle District of Tennessee when they signed the promissory note, and the note was not to secure property located within that federal district. The Bridges were residents of Alabama during all times relevant to this litigation. The Bridges’ property, seized through the Alabama Attachment procedure, is not the subject of the pending litigation nor is the underlying cause of action related to that property. The property seized through the attachment procedure — a 1967 Dodge pickup truck, and the appellees’ real property located at 4223 Eastland Drive, Huntsville, Madison County, Alabama — have nothing to do with the proceedings initiated in the federal district court in Tennessee.
Also, the Henderson National Bank cannot be brought into federal district court in Tennessee to defend this action. All offices of the bank are located in Madison County, Alabama. The Bank has never conducted business in Tennessee. The certificates of deposit at issue here were in the exclusive possession of the bank prior to the appointment of the receiver on February 11, 1976, and at all times thereafter, including when Haile was appointed receiver of Miracle Deliverance Revivals, Inc., which was subsequent to February 11.
*829The federal policy encouraging consolidation of actions brought by a receiver cannot tip the balance in favor of jurisdiction where the defendants have had no contact with the state which defines the federal district. Congress has attempted to simplify the procedures a receiver must follow in order to marshall the assets of a bankrupt by allowing the receiver to sue any person allegedly holding property of the bankrupt in the federal district of the appointing court. 28 U.S.C. §§ 754, 1692. See also United States v. Franklin National Bank, 512 F.2d 245 (2d Cir. 1975); Tcherepnin v. Franz, 439 F.Supp. 1340 (N.D.Ill.1977). Congress apparently concluded that taking charge of the bankrupt’s property and protecting the interests of the creditors would be more effectively handled by a receiver if the appointing court had a greater jurisdictional reach. While it is true that Sections 754 and 1692 further the federal policy of encouraging the efficient administration and disposition of the bankrupt’s estate, I am not persuaded that this policy should be allowed to eviscerate the protections of the due process clause of the Fifth Amendment.
Since the appellees have had no contact with the Middle District of Tennessee, the fairness principles embodied in the due process clause of the Fifth Amendment preclude jurisdiction over the cause of action by any court, whether state or federal, in that district. Accordingly, I would affirm judgment of the district court dismissing both complaints for lack of personal jurisdiction.