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In Personam Jurisdiction: Constitutional Limitations

Learn about the second step of an in personam jurisdiction analysis: whether the exercise of jurisdiction over a person complies with the requirements of due process under the Constitution.

Transcript

Once we have decided that there is a statutory basis for personal jurisdiction, we then proceed to the second step of the two-step dance which is to ask whether exercising jurisdiction would comply with the Constitution. Recall that the Due Process Clause of the Fourteenth Amendment provides that a state "shall [not] deprive any person of life, liberty, or property, without due process of law." U.S. Const. amend XLV, § 2. In International Shoe v. Washington, the Supreme Court held that “due process requires only that, in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ (Emphasis added).” Therefore, there are two components to the constitutional analysis: minimum contacts and fairness.

The Supreme Court has written that the inquiry into whether the minimum contacts test and due process are satisfied depends upon the “quality and nature of the activity.” Accordingly, with respect to the character of the defendant’s contacts with the forum state, the International Shoe Court identified two issues that a court must address as a threshold matter. The first is whether the contact with the forum state is continuous and systematic or isolated and sporadic, while the second is whether the defendant’s claim arises out of the contact with the forum state. If a defendant’s contact with the forum is sufficiently continuous and systematic, then a court may exercise jurisdiction regardless of whether the claim arises out of the defendant’s contact with the forum state. Jurisdiction based on this type of contact with the forum eventually became known as general in personam jurisdiction. Examples of general in personam jurisdiction include presence within the state when served with process and citizenship or domicile in the state (or incorporation or principal place of business for corporations). On the other hand, if the defendant’s contacts with the forum state are isolated and sporadic, then the claim must arise out of the defendant’s contact with the forum state. This type of jurisdiction, known as specific in personam jurisdiction, also requires that the defendant’s contact with the forum state be purposeful and intentional, rather than merely fortuitous or unintended. In the context of a specific jurisdiction case, in which the claim must arise out of the defendant’s contact with a forum state, the Court has required some purposeful connection between the defendant and the forum state. This purposeful connection may take the form of wrongful conduct that is directed at individuals in the forum state or the intentional receipt of some significant benefit from the forum state.

The International Shoe Court did not provide a list of what constitutes sufficient minimum contacts to support a finding of personal jurisdiction. However, the Supreme Court’s cases after International Shoe have made clear that there are two prongs to the minimum contacts test. The first prong is that the defendant must have purposefully availed herself of the laws and benefits of the forum state (i.e. purposeful availment); that is the contacts with the forum state must not be accidental or inadvertent. The defendant’s action must be intentionally directed into the forum state. Examples include doing business in the state or driving on the state’s roads.

There has been disagreement about the meaning or requirements of purposeful availment, especially in cases in which the defendant is a downstream retailer or out-of-state manufacturer whose product finds its way into the forum state. These are known as “stream of commerce” cases and most often deal with products liability questions. In these cases, the debate centers on whether mere awareness or foreseeability that the defendant’s product will reach the forum state is sufficient to establish that the defendant purposefully availed herself of the forum state’s laws and privileges. In Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), a Japanese company sold tire valves to a Taiwanese tire company. The Taiwanese company’s tires were eventually sold in California where, through a defect in the tire valve, they caused a motorcycle accident. The question in the case was whether the Japanese company could be sued in California for products liability relating to its allegedly faulty tire valves. The Supreme Court split evenly on this issue. Four justices led by Justice Brennan held that putting a product in the stream of commerce—regardless of whether the manufacturer knows that the product will reach the forum state—is sufficient to establish purposeful availment. Four other justices led by Justice O’Connor held that “mere placement of a product into the stream of commerce” is not sufficient to constitute purposeful availment, “even if done with an awareness that the stream will sweep the product into the forum.”

In 2011, the Court clarified its position on purposeful availment in J. McIntyre Machinery v. Nicastro. In that case, the Court held in a 6-3 decision that a British manufacturer could not be subjected to personal jurisdiction in New Jersey because the manufacturer had not advertised in, sent goods to, or in any relevant sense targeted New Jersey. The majority in Nicastro rejected Justice Brennan’s approach in Asahi that fairness and foreseeability should be the touchstones of purposeful availment and instead embraced Justice O’Connor’s approach which requires that the defendant’s contacts be purposefully directed toward the forum state. In Nicastro, the majority said it was not sufficient that the foreign manufacturer targeted the U.S. market; to sustain a finding of purposeful availment, the manufacturer would have had to target New Jersey specifically. The “stream of commerce” area of personal jurisdiction law is far from settled. But for now, it seems clear that the touchstone of purposeful availment is deliberate, intentional, and conscious targeting of the forum state by the defendant.

The second prong of minimum contacts is that the defendant must have known or reasonably anticipated that her activities in the forum made it foreseeable that she might be haled into court there. Foreseeability alone is not sufficient. In World-Wide Volkswagen Corp v. Woodson, 444 U.S. 286 (1980), the Court held that a New York car dealership could not be sued in Oklahoma for injuries arising out of an accident in Oklahoma involving a car the dealer sold in New York. The Court held that, although it is “foreseeable” that cars sold in New York might travel to and cause injury in Oklahoma, the foreseeability that matters is not the “mere likelihood” that the product will find its way into the forum state. Rather, to establish foreseeability the defendant’s conduct and connection with the forum must be such that he should reasonably anticipate being haled into court there.

The second component of the constitutional analysis is that exercising personal jurisdiction over the defendant must comply with “traditional notions of fair play and substantial justice.” In Asahi, the Supreme Court set forth five factors that it thought relevant in determining whether tradition notions of fair play and substantial justice are satisfied. The five factors are the burden on the defendant; the interests of the forum state in the litigation; the interest of the plaintiff in litigating the matter in that state; interstate efficiency; and interstate policy interests. It should be noted that, while the Asahi factors and fairness balancing are important, they are not sufficient by themselves to sustain a finding of personal jurisdiction. That is to say, if the minimum contacts test is not satisfied, personal jurisdiction is defeated regardless of the Asahi factors. 

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