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Yale Law School Faculty Scholarship
1-1-1988
A General Look at General Jurisdiction
Lea Brilmayer
Yale Law School
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Texas
Review
Texas Law Review
Volume
Volume 66, Number
Number 4,
1988
March 1988
A General Look at General Jurisdiction
Jurisdiction
Lea Brilmayer, Jennifer Haverkamp, Buck Logan,
Loretta
Loretta Lynch, Steve Neuwirth, and Jim O'Brien
O'Brien
Table of Contents
I. Introduction
1.
Introduction...............................................
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Jurisdiction...........
. . . . . . . ..
II. The Nature and Existence of General Jurisdiction
A. Unique
Unique Affiliations .................................... ,
om icile ..........................................
1. D
Domicile..........................................
(a)
Conveniencefor the defendant
(a) Convenience
defendant..................
. . . . . . . . . . . . . . ..
(b) Convenience
Conveniencefor the plaintiff
plaintiff...................
. . . . . . . . . . . . . . . . ..
(c) Power
........................................
Power........................................
(d)
and burdens
(d) Reciprocal
Reciprocal benefits and
burdens ............... ,
2. Place
Place of Incorporation
and Principal
PrincipalPlace
Place of
2.
Incorporation and
of
Business
..........................................
Business..........................................
Conclusion ........................................
3. Conclusion.....
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
B. Activities.
Activities .............................................
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
1. Substantive
Substantive Relevance and Related Activities
Activities.........
. . . . . ..
2. Fairness
and Unrelated
UnrelatedActivities ...................
2.
Fairness and
"
"
3. Interstate
and
Intrastate
Interstate and Intrastate Activities .................."
C.
Transient Jurisdiction.
Jurisdiction.................................
C. Transient
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
1. The Past
Past of Transient
Jurisdiction ................ ~ .. "
Transient Jurisdiction
2.
Transient Jurisdiction's
Current Status.............
Status .............
2. Transient
Jurisdiction's Current
3. Current
CurrentJustifications
for
Transient
Jurisdiction....."
Justifications
Transient Jurisdiction
D.
Consent to Jurisdiction
D. Consent
Jurisdiction ................................"
E. Property
Property...............................................
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
1. Jurisdiction
JurisdictionBased
Based on Property
Unrelated to Suit....
Suit ....
Property Unrelated
2. Unrelated
Contact ...................
Unrelated Property
Property as a Contact...................
3. Property
Property Contacts
Contacts and
....................
and Fairness
Fairness....................
4. Assessing the Sufficiency of Unrelated
Unrelated Property
4.
Property
Contacts..........................................
Contacts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
(a) The
"continuous and
..........
(a)
The "continuous
and systematic" test
test..........
723
727
728
728
730
730
730
730
731
732
732
733
735
735
736
741
743
748
749
750
752
755
760
760
762
765
766
766
766
721
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(b) Tangibility
......................
(b)
Tangibility and mobility
mobility......................
Quantity and
(c) Quantity
and substantiality
substantiality.....................
. . . . . . . . . . . . . . . . . ..
F A General
General Theme .....................................
F.
III. The Choice-of-Law
Jurisdiction ....
Choice-of-Law Implications
Implications of General Jurisdiction.
. ..
A. Legislative
Legislative Jurisdiction
Jurisdiction To Apply Procedural
Procedural Law
Law........
. . . . ..
B. Legislative
Legislative Jurisdiction
B.
Jurisdiction To Apply Substantive
Substantive Law ......
Costs ofLegislative
of Legislative Jurisdiction................
Jurisdiction................
1. The Costs
2. Unique
Unique Affiliations .................................
2.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
IV. Conclusion
Conclusion................................................
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
722
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768
770
771
772
773
774
774
775
779
782
782
General Look at General
A General
General Jurisdiction
Jurisdiction
Brilmayer,* Jennifer
Lea Brilmayer,*
Jennifer Haverkamp,** Buck Logan,**
Loretta Lynch,**
Lynch,** Steve Neuwirth,** and Jim O'Brien***
constitutionality of state
assertionsof
personaljurisdiction,
In reviewing the constitutionality
state assertions
ofpersonal
jurisdiction, the
Supreme Court
Court has recognized
ofjurisdiction-generaland
and specific
recognized two types ofjurisdiction-general
specific. Contacts between the defendant
state that are not necessarily
related to the suit
tacts
defendant and the state
necessarily related
form the basis
of generaljurisdiction,
rests on contacts
basis ofgeneral
jurisdiction, while specific jurisdiction
jurisdiction rests
contacts that
are either
cause of
the action
action or at least
least related
related to the suit.
vast bulk of
of
either the direct
direct cause
ofthe
suit The vast
recent scholarly
attention has
hasfocused
issue ofspecific
of specficjurisrecent
scholarly andjudicial
judicial attention
focused solely on the issue
jurisdiction,
leaving general
generaljurisdiction
theory.
diction, leaving
jurisdiction a powerful yet largely unexplored
unexplored theory.
Professor
co-authors examine the theory
theory of general
Professor Brilmayer
Brilmayer and
and her co-authors
general jurisdicjurisdiction, its meaning
meaning and
and its
its rationales.
rationales. They first
discuss the traditional
traditionalbases
tion,
first discuss
bases for
for general
general
jurisdiction:
of incorporationor
orprincipal
business, defendjurisdiction: domicile and
and place
place ofincorporation
principal place of
ofbusiness,
ant'sforum
presence, consent,
consent, and property in the forum.
ant's forum activities,
activities, transient
transient presence,
forum As they
evaluate the rationales
each basis,
basis, they highlight
recurrentthemes and
andanarationales underlying
underlying each
highlight recurrent
anacontacts that support
support generaljurisdiction.
generaljurisdiction. Finally,
contacts
lyzeforum
forum contacts
Finally, they explore the contacts
supporting
adjudicativejurisdiction
alsojustify legislative
legislativejurisdiction
jurisdictionpersupporting general
general adjudicative
jurisdiction that
that also
permitting the court
court to apply the forum's
law to the dispute.
mitting
forum'S substantive
substantive law
dispute.
I. Introduction
Introduction
Earl Cowan died on January
January 18, 1976, as a result of his injury in a
Cherokee County, Texas. Five years later, after
after
pickup truck accident in Cherokee
the two-year Texas statute of limitations had run, his widow filed suit
against Ford Motor
Motor Company and served its resident agent in Mississippi, where the limitations period is six years. Mrs. Cowan was a resident of Texas, as her husband had been. Ford is incorporated
incorporated in
business in Michigan.
Delaware and maintains
maintains its principal place of business
Ford neither manufactured
manufactured nor sold the truck in Mississippi. After itit
of
received service of process, Ford filed a motion to dismiss for want of
jurisdiction.'
jurisdiction.!
circumstances suggest
Although these circumstances
suggest the kind of tortuous hypothetical that first-year law students confront on civil procedure
procedure exams,
they actually
actually represent
represent a typical scenario
scenario in litigation. 22 In this scenario,
*• Nathan
Nathan Baker
Professor of
of Law,
Law, Yale
Yale Law
1970, J.D.
J.D. 1976,
University of
of
Baker Professor
Law School.
School. B.A.
B.A. 1970,
1976, University
California, Berkeley; LL.M. 1978,
1978, Columbia
Columbia University.
**
J.D. 1987,
1987, Yale
Yale Law
Law School.
•• J.D.
SchooL
*
J.D. Candidate 1988, Yale
•••
Yale Law School.
School.
reh'g,
I. Cowan v. Ford Motor Co., 694 F.2d 104, 105 (5th
(5th Cir. 1982), question
question certified
certified on reh'g,
action remanded,
remanded, 719 F.2d
713 F.2d
F.2d 100 (5th Cir.), district
district court rev'd & action
F.2d 785 (5th Cir. 1983). For a
general discussion of Cowan's
Cowan's effects on
exercise of personal
on Mississippi's
Mississippi's exercise
personal jurisdiction
jurisdiction over nonresidents,
(1983).
MISS. L.J. 369 (1983).
dents, see
see Recent
Recent Decisions, 53 Miss.
2. See,
e.g., Schreiber
Schreiber v.
Allis-Chalmers Corp., 611
2.
See, e.g.,
v. Allis-Chalmers
6Il F.2d 790 (10th
(10th Cir. 1979) (suit by a Kansas plaintiff under Mississippi law against a defendant
defendant incorporated in Delaware
Delaware and headquartered
headquartered
in Wisconsin);
Wisconsin); Ratliffv.
Ratliffv. Cooper
Cooper Laboratories,
Inc., 444
444 F.2d
745 (4th
(4th Cir.)
Cir.) (suit
residents of
of
in
Laboratories, Inc.,
F.2d 745
(suit between
between residents
Indiana
Florida and
corporations headquartered
headquartered in
in Connecticut
and New
New York),
Indiana and
and Florida
and corporations
Connecticut and
York), cert.
cert. denied,
denied,
723
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66:721, 1988
a plaintiff
plaintiff seeks jurisdiction
jurisdiction in a forum court over a claim unrelated to
activities in the forum. Such jurisdiction usually is called general jurisdiction, in contrast
contrast to specific jurisdiction,
jurisdiction, under which the claim is related to activities in the forum state.33 The Supreme Court voiced its
approval of general jurisdiction
Perkins v. Benguet Consolidated
ConsolidatedMinjurisdiction in Perkins
Co.4 Finding that the dt:fendant's
defendant's forum activities were "continuous
"continuous
ing CO.4
'5
and systematic,"
systematic,"S
the Court held that Ohio could assert jurisdiction
jurisdiction over
over
a claim unrelated
to
those
activities
and
brought
by
a
nonresident
plainunrelated
activities
nonresident
6 The
tiff.
phrase
"continuous and systematic"
tiff. 6 The
phrase "continuous
systematic" thereafter became
became the test
jurisdiction.77 In
used by lower courts to evaluate assertions of general jurisdiction.
Helicopteros
Helicopteros Nacionales
Nacionales de Colombia,
Colombia, S.A. v. Hall,
Hall, the Supreme Court
renewed its theoretical recognition
recognition of general jurisdiction, but held that
on the facts of the case an inadequate nexus existed to support
8
jurisdiction. 8
of
These are the only two Supreme Court cases addressing
addressing the issue of
general jurisdiction
jurisdiction since 1952. Although they provide
provide some guidance,
the exact status and boundaries
boundaries of general jurisdiction
jurisdiction remain uncertain.
ag-ree on the criteria establishing
establishing an adequate
adequate
Lower courts, unable to agree
Commenbasis for general jurisdiction,
jurisdiction, often reach discordant results. 99 Commentators have failed to clarify the issue; apparently, until quite recently, no
10
exclusively to general jurisdiction. 10
article (:xclusively
one had devoted an article
U.S. 948 (1971).
(1971). For a list of Casel
case citations, see R. CASAD,
CASAD, JURISDICTION
JURISDIrTION IN CIVIL ACTIONS
404 u.s.
ACTIONS
3.02[2][a], at 3-65 n.274 (1983).
(1983).
11S 3.02[2][a],
3. This terminology originated in von Mehren
Jurisdiction To Adjudicate:
Mehren &
& Trautman, Jurisdiction
Adjudicate: A
Suggested Analysis, 79 HARV.
HARV. L. REV.
REV.1121, 1136-45 (1966).
(1966).
(1952).
4. 342 U.S. 437
437 (1952).
Japanese occupation
occupation of the Philippines,
5. Id. at 438. During the Japam:se
Philippines, the defendant, a Philippine
corporation, carried on its entire
entire wartime activity in Ohio, including directors'
directors' meetings, business
business
purchasing of machinery. See id.
correspondence, banking, stock
stock transfers, payments of salaries, and purchasing
at 447-48.
6. Id.
Id. at 448.
448.
Government of Mex., 729 F.2d 641,
641, 648
7. See,
See, eg.,
e.g., Olsen ex rel.
rei. Sheldon v. Government
648 (9th Cir. 1984);
Bucks County Playhouse v. Bradshaw,
F. Supp. 1203, 1207 (E.D. Pa. 1983).
Bradshaw, 577 F.
418 (1984).
The Helicopteros suit arose out ofa
of a helicopter crash
8. 466 U.S. 408,
408,418
(1984). ThllHelicopteros
crash in Peru
Peru that
non,~ of them Texas residents. The victims were employees
employees of a
killed four United States citizens,
citizens, none
corporations and a Delaware corporation. The defendPeruvian consortium
consortium composed
composed of two Texas corporations
corporation, had contracted
ant, a Peruvian corporation,
contracted with the consortium to provide transportation.
transportation. The
included negotiating the contract in Houston, Texas, purchasing
defendant's contacts with Texas inclu:led
most of its helicopters
helicopters and parts in Tex.as,
Texas, accepting
accepting as
as payment checks from Texas banks, leasing a
helicopter
regular
helicopter through a Texas bank, and training and keeping
keeping some employees in Texas on a regular
basis. Id.
Id. at 409-12.
9. See R. CASAD,
3.02[2][a], at 3-65 &
& n.274.
CASAD, supra
supra note 2, 11 3.02[2][a],
10. Discussions of general jurisdiction,
jurisdic,tion, however, do appear
appear in articles addressing a broad range
of jurisdictional
See, e.g.,
jurisdictional issues. See,
e.g., id. 111 1.01-.08 (outlining fundamental concepts
concepts of jurisdiction);
Brilmayer,
ContactsCount: Due Process
State Court
CourtJurisdiction,
SUp. Cr.
CT.
Process Limitations
Limitations on State
Jurisdiction, 1980 SUP.
Brilmayer, How Contacts
REV.
Count] (explaining
REV. 77,
77, 80-82
80-82 [hereinafter Brilmayer. How Contacts
Contacts Count]
(explaining bases for general
general jurisdicjurisdiction); von Mehren
& Trautman, supra
supra note 3,
3, at 1136-44 (discussing jurisdiction
jurisdiction in claims
claims unrelated
unrelated
Mehren &
to forum activities in the context of "directly
circumstances"). For an excellent recent
"directly affiliating circumstances").
recent
addressed to general jurisdiction, see Twitchell, The Myth ofGeneral
of GeneralJurisdiction,
Jurisdiction,
article exclusively
exclusively addressed
724
HeinOnline -- 66 Tex. L. Rev. 724 1987-1988
General
General Jurisdiction
jurisdiction
One reason for this lack of attention may be that general jurisdiction
is now of less practical importance
importance than it once was. Historically, courts
commonly
predicated jurisdiction upon the defendant's general
commonly predicated
general affiliation with the forum, and not the defendant's
defendant's activities in the forum that
were related
related to the litigation.111 Thus, presence in the forum, doing business in the forum, and domicile in the forum were the important bases
for jurisdiction.1122 In International
Co. v. Washington,13
Washington,1 3 however,
International Shoe Co.
the Supreme
Supreme Court fundamentally
constitutional approach
fundamentally changed
changed the constitutional
approach
to personal
personal jurisdiction. The Court's holding enabled
enabled a state to reach
outside its boundaries and compel an absent defendant to defend a claim
that arose in the forum.
forum.1144 Mter
After International
International Shoe, plaintiffs
plaintiffs no longer
longer
must chase defendants to their home states to obtain jurisdiction
jurisdiction over
over
15
them. IS
Nonetheless, general
general jurisdiction is not on its way to extinction.
extinction.
Often, plaintiffs prefer to chase
our
chase defendants to their home states. As our
16
initial example Cowan v. Ford
Motor
Co.
illustrates,
a
plaintiff
may
seek
Ford
16 illustrates,
the application of a distant
distant forum's law because
because it is more favorable than
17
the law of the state where the cause
cause of action arose.
arose,17
Such forum shopping
persistent problem in general
cases, 1 8 given current
general jurisdiction
jurisdiction cases,18
current
ping is a persistent
minimal
19
minimal restraints
restraints on a state's choice of law. 19
HARV. L.
L. REv.
(1988). For a response to Professor Twitchell's arguments, see Brilmayer,
101 HARV.
REV. 610 (1988).
Related Contacts
Contactsand Personal
Jurisdiction, 101 HARV.
HARV. L. REV.
Rav. 1444 (1988).
(1988).
Personal Jurisdiction,
11. See Milliken v. Meyer, 311
(1940); Harris v. Balk, 198 U.S. 215, 222 (1905);
(1905);
11.
311 U.S. 457, 462 (1940);
Court, the Due Process
Process Clauses
Clauses and
and the In
In Personam
see also Kurland, The Supreme Court.
Personam Jurisdiction
Jurisdiction of
of
State Courts,
Courts, 25 U. CHI. L. REV. 569 (1958)
(1958) (relating historical accounts of jurisdiction).
State
11, at 569-74 (analyzing
12. See Kurland, supra
supra note 11,
(analyzing the various early bases for jurisdiction).
jurisdiction).
(1945).
13. 326 U.S. 310 (1945).
id. at 321.
321.
14. See id.
1128.
15. See von Mehren
Mehren &
& Trautman, supra
supra note 3, at 1128.
certified on reh'g,
reh'g, 713 F.2d 100
district
16. 694 F.2d 104 (5th Cir. 1982) question certified
100 (5th Cir.), district
court rev'd
rev'd &
& action
1983).
court
action remanded,
remanded, 719 F.2d 785 (5th Cir. 1983).
17. Other
Other factors also may cause a plaintiff to seek general jurisdiction
jurisdiction over a defendant in a
state other
other than where the claim arose. For example, a plaintiff
plaintiff might prefer to litigate in the defendant's home state when
when it is also the plaintiff's home state
state or when no other forum is available.
See Perkins v. Benguet Conso!.
Consol. Mining Co., 342 U.S. 437 (1952).
(1952).
18. See.
See, e.g.,
e.g., Schreiber v. Allis-Chalmers Corp., 611 F.2d
(10th Cir. 1979)
1979) (plaintiff
F.2d 790, 792 (10th
taking advantage
longer statute of limitations); Goldman
Goldman v. Pre-Fab Transit Co., 520
advantage of the forum's longer
S.W.2d 597, 598 (Tex. Civ. App.-Houston
1975, no writ) (same); see also
also Keeton v.
S.W.2d
App.-Houston [14th
(14th Dist.] 1975,
Hustler Magazine, Inc.,
(1984) (stating, in a specific jurisdiction case, that the
Inc., 465
465 U.S. 770, 773 (1984)
place where the plaintiff
"was the only state where
plaintiff filed suit "was
where [plaintiff's] suit would not have
have been
been
time-barred when it was filed").
time-barred
19. A decision to apply a particular
particular state's substantive law will be unconstitutional only if the
choice of that state's
state's law is arbitrary
arbitrary or fundamentally
fundamentally unfair, based on an assessment
assessment of the aggregaaggregation of contacts between
between the parties,
parties, the occurrence, and the state. See Allstate Ins. Co. v. Hague,
449 U.S. 302, 308 (1981).
(1981). The Hague
of law decision
Hague decision indicates that a state's choice
choice oflaw
decision will
receive only minimal constitutional scrutiny. R. WEINTRAUB,
WEINTRAUB, COMMENTARY
COMMENTARY ON THE CONFLICT
CONFUCf OF
OF
constitutional limits on choice of law in
LAWS §§ 9.2A, at 525-27 (3d ed. 1986). The application of constitutional
of
Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 799 (1985),
(1985), however, may indicate the beginning of
greater scrutiny. Several commentators
commentators have discussed the constitutional
constitutional limits on choice
choice of law.
725
HeinOnline -- 66 Tex. L. Rev. 725 1987-1988
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1988
Vol. 66:721,
We
We will
will explore
explore two questions
qu.estions tied
tied to the forum-shopping
forum-shopping problem.
problem.
should be
be the
the appropriate
appropriate standard
standard for determining
determining whether
whether
First, what should
of
general jurisdiction
jurisdiction exists?
exists? This
This question
question breaks down
down into
into a series
series of
general
subissues.
subissues. When
When must a court rely
rely on
on general
general rather
rather than
than specific
specific jurisjurisdiction?
other words, when is the
the controversy
controversy unrelated
unrelated to the
the forum?
diction? In other
general
jurisdiction
Are the types of contacts that are
are relevant
relevant to
jurisdiction different from the types that are relevant
relevant to specific
specific jurisdiction?
jurisdiction? If so, then
how do the two contacts
contacts inquiries differ?
The second question relates to choice
choice of law. How are general
general and
and
question
This
specific jurisdiction
jurisdiction different for choice-of-law
choice-of-law purposes?
purposes?
question
specific
shopping more of a
also generates
generates more narrow
narrow questions. Why is forum shopping
also
problem
plaintiff relies on unrelated
unrelated contacts
contacts to establish genproblem when the plaintiff
legislative jurisdiction--the
erallegislative
jurisdiction--the power of the forum to apply its own suberal
stantive
circumstances will a finding
rmding of general
general
stantive law? Under what circumstances
constitutional tests for legislative
adjudicative jurisdiction
jurisdiction also satisfy
satisfy the constitutional
adjudicative
jurisdiction?
We examine first the meaning
meaning of general
general jurisdiction
jurisdiction and the ways in
in
implicaaddress
the
choice-of-law
We
then
which it may be established.
established.
address
choice-of-law
tions of general jurisdiction. With such a general look at the subject, we
interesting questions, highlighting
highlighting and
and redecan do little more than raise interesting
fining the central
central issues. Definitive resolution of these issues is nearly
impossible, given the incomplete state of current doctrine. Nevertheless,
Nevertheless,
theoretil~al limitations on the reach of general
suggest theoretical
we will suggest
jurisdiction.
jurisdiction.
These theoretical
theoretical limitations result from basic premises
premises of political
philosophy. Adjudicative jurisdiction is one way in which the state aslegitimacy of a
serts coercive power over individuals. Consequently, the legitimacy
particular
particular assertion of state power is always an issue. Of the various jusof state power, two, in particular, are relevant
tifications for the exercise (If
to the question of adjudicative jurisdiction.
jurisdiction. The first is the notion that a
influence state
those that have a right to influence
with
relationship
state's special
special
the assertion of state power over those individudecision making justifies thl;:
idea that a state may exercise authority
als or entities. The second is the idea
within its territory. The former justification
justification
over activities occurring ·within
Dismal Prospect,
Prospect,
Choice ofLaw:
of Law: A Dismal
and Choice
in Jurisdiction
Jurisdictionand
CourtIntervention
Supreme Court
See, e.g., Juenger, Supreme
See,
Intavention in
HOFSTRA
OpportunityLost,
Lost, 10 HOfSTRA
Case: An Opportunity
(1981); Reese, The Hague Case:
REv. 907, 916 (1981);
14 U.C. DAVIS L. REV.
of
Perspective of
Choice of
of Law: The Perspective
Limitations on Choice
Sedler, CO'lstitutional
ConstitutionalLimitations
195, 201 (1982);
(1982); Sedler,
L. REV. 195,
Constitu& Trautman,
Trautman, Constitu(1982); von Mehren
Mehren &
10 HOfSTRA
HOFSTRA L. REV. 59, 74 (1982);
Generalism, 10
ConstitutionalGeneralism,
Constitutional
39 (1982);
(1982);
10 HOfSTRA
HOFSTRA L. REV. 35, 37, 39
Reflections on Hague, 10
of Choice ofLaw:
of Law: Some Reflections
tionalControl
ControlofChoice
tional
17,
L. REV. 17,
Law?, 10 HOfSTRA
HOESTRA L.
Choice of
Limitationson Choice
of ConstitutionalLimitations
Who's Afraid ofConstitutional
Weintraub, Who's
ofLaw?,
the primary
that fairness to
to litigants should be the
Professor Kogan argues that
(1982). In aa recent article, Profess·:>r
34 (1982).
of
Law: The
The Priority
Priority of
Choice of Law:
Toward a Jurisprudence
Kogan, Toward
constitutional limitation. See Kogan,
constitutional
Jurisprudence of Choice
'EV. 651,
651, 689-700 (1987).
(1987).
Comity, 62 N.Y.U. L. ~:tEV.
Fairnessover Comity,
Fairness
726
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General Jurisdiction
Jurisdiction
supports general jurisdiction while the latter buttresses specific jurisdiction. We argue that the contours of these two justifications
justifications establish the
specific jurisdiction.
outer limits of general and specific
General Jurisdiction
II. The Nature and Existence of General
whether we characterize
characterize assertion of
of
What difference does it make whether
state judicial
power
as
specific
or
general?
Differentiating
between
the
judicial power
general? Differentiating
two is crucial for one important reason: fewer contacts-perhaps
contacts-perhaps only
20 In contrast, the Supreme
one-will support specific
specific jurisdiction. 20
one-will
2 1 and Helicopteros
22 suggest that assertions
Perkins 21
Helicopteros 22
assertions
Court's opinions in Perkins
Plaintiffs
of general jurisdiction
jurisdiction require a larger number of contacts. Plaintiffs
usually benefit from arguing that the cause
of
action
arises
out
of or is
action
cause
related to the defendant's contacts because
because the jurisdictional threshold
threshold is
lower. Because in many cases there will only be contacts
contacts that are not
jurisdiction exists at all will depend
depend
continuous and substantial,
substantial, whether
whether jurisdiction
jurisdiction the plaintiff asserts.
on the type of jurisdiction
Von Mehren and Trautman
Trautman offer the following observations
observations in distinguishing the two types of jurisdiction:
jurisdiction:
[A]ffiliations
underlying controversy
[A]ffiliations between
between the forum and the underlying
normally support only the power to adjudicate..,
adjudicate ... issues deriving
controversy that establishes jufrom, or connected with, the very controversy
risdiction ...... . . This we call specific jurisdiction. On the other
other
exercise power to
hand, American practice
practice for the most part is to exercise
adjudicate any kind of controversy when jurisdiction is based on
on
adjudicate
person
relationships, direct or indirect, between the forum and the person
or persons whose23legal rights are to be affected. This we call general jurisdiction.23
General jurisdiction rests upon a direct relationship between
between the defendant and the forum and does not differentiate
differentiate between the various causes
of action that the plaintiff may assert against the defendant. Once
shown, general jurisdiction
jurisdiction establishes forum adjudicative power over
over
any controversy
controversy involving that defendant. Specific
jurisdiction,
in
conSpecific jurisdiction,
trast, depends
connection between
depends on a connection
between the defendant, the forum, and the
24
particular litigation. 24
While their
their distinction
distinction is enormously
enormously helpful, von Mehren and
Trautman do not specify which contacts might support general jurisdic20. See,
(1957) (finding jurisdicSee. e.g.,
e.g., McGee v. International
International Life Ins. Co., 355 U.S. 220, 223 (1957)
tion based on insurance
insurance contract made by mail with a forum resident, defendant's
defendant's sole contact with
with
the forum).
Consol. Mining Co., 342 ·U.S.
U.S. 437, 447 (1952).
(1952).
21. Perkins v. Benguet Conso!.
22. Helicopteros Nacionales
Hall, 466 U.S. 408, 415-16 (1984).
(1984).
Nacionales de Colombia,
Colombia, S.A. v. HalI,
23.
& Trautman,
supra note 3,
23. von Mehren &
Trautman, supra
3, at 1136.
24. See Brilmayer, How Contacts
Count, supra
24.
Contacts Count,
supra note 10, at 80-81.
80-81.
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1988
tion and which might establish specific jurisdiction. Their distinction
rests more on intuition thl:~n
than analysis. Spelling out the difference
difference more
precisely, however, is no easy matter. An examination
examination of the paradigms
of general jurisdiction's
jurisdiction's bases--domicile, place of incorporation, and
principal place of business--will illuminate the underlying
underlying rationales for
of jurisdiction we discuss. We characterize
characterize these paradigms as
each type ofjurisdiction
affiliations-those that the defendant has with only one state.
unique affiliations-those
A.
Unique Affiliations
Unique
1. Domicile.-Domicile
Domicile.-Domicile is the place with which a person has a settled connection
certain legal purposes, either because the person's
connection for certain.
person's
because the law assigns this significance
significance to that place.2255
home is there or because
Many legal functions-taxation,
functions-taxation, probate, divorce, and adoption-require
domicile for an exercise
exercise of jurisdiction over the
factual findings of domic:l1e
party. 26 "Every
party.26
"Every person ha:
ha:; a domicile at all times, and at least for the
' 27 A
time."27
same purpose, no person has more than one domicile at a time."
28
state has a special
special relationship
relationship28 with its domiciliaries that justifies the
(SECOND)OF CONFLICT OF LAWS § 11 (1969).
(1969). Holmes
25. See RESTATEMENT
RESTATEMENT (SECONJ»
Holmes defined domidomicile as "the
"the one technically
technicalIy pre-eminent headquarters, which...
which ... every person is compelled
compelIed to have in
in
attached to it by the law may be
order that by aid of it certain rights and duties which have been attached
determined." Bergner &
157, 51
determined."
& Engel Brewing
Brewing Co. v. Dreyfus, 172 Mass. 154, 157,
51 N.E. 531,
531, 532
532
(1898).
(1898).
Domicile is not merely residence, although courts and legislatures often confuse the two concepts or use them interchangeably.
interchangeably. See, e.g., Allstate Ins. Co. v. Hague, 449 U.S. 302, 313-17 (1981)
(1981)
(discussing party's
party's residence,
residence, but not domicile, in determining contacts with state); Carrington v.
Rash, 380 U.S. 89, 96 (1965)
(1965) (stating
(stating that "the
"the fact that one is a soldier or sailor does not deprive
deprive
him of the right to change his residence or domicile").
domicile"). Although courts
courts recognize
recognize that
that the concepts
differ, see Note, Martinez
and Residency Requirements
Requirementsfor Free
Education, 26
Martinez v. Bynum and
Free Public
Public Education,
ARIz. L. REv.
court discusses to determine
ARIZ.
REV. 729, 730 (1984),
(1984), one must examine closely the factors a court
determine
whether
whether the court is describing
describing residency or domicile.
26. See,
will is valid accordSee, e.g.,
e.g., CAL. PROB. CODE § 362 (West 1972)
1972) (providing
(providing that a foreign wiIl
Civ. PRAC.
where the testator was domiciled at the time of death); N.Y. CIV.
ing to the law of the place where
L. &
(Consol. 1983)
1983) (matrimonial
long-arm statute alIowingjurisdiction
allowing jurisdiction over nonresident
& R. 302(b) (Conso!.
(matnmoniallong-arm
nonresident
defendant,
defendant, provided
provided that New York
York was the matrimonial domicile before separation); TEX.
TEX. PROB.
ANN. §§ 100 (Vernon
(Vernon 1986) (providing
CODE ANN.
(providing specific
specific grounds for contesting a foreign will
wiIl based on
on
the existence of domiciliary or nond:>miciliary
nondomiciliary jurisdiction).
jurisdiction).
27. RESTATEMENT
(SECOND) OF
CIFCONFLICT
(1969).
RESTATEMENT (SECOND)
CONFLICT OF LAWS § 11 (1969).
28.
28. This relationship is demonstrated
demonstrated in the Supreme
Supreme Court
Court decisions in suits over durational
residency
repeatedly has held that when
residency requirements. The Court repeatedly
when a state grants benefits to or extracts duties from its domiciliaries, it must do so without regard
regard to length of residence, although the
state may impose a reasonable waiting period for administrative purposes before extending these
benefits. See,
See, e.g., Memorial Hosp. v.
v.Maricopa
Maricopa County, 415 U.S.
U.S. 250, 254
(1974) (holding a dura254 (1974)
tional residency
residency requirement to be an improper basis
basis for denying indigents nonemergency
nonemergency medical
medical
441. 452-53
care); Vlandis v. Kline, 412 U.S. 441.
452-53 (1973)
(1973) (holding unconstitutional a durational
durational residency
residency
requirement
requirement that prohibited out-of-state
out-of-state students from becoming residents
residents for tuition
tuition purposes while
while
they attended
attended the state university); Dunn v. Blumstein,
(1972) (stating that a
Blumstein, 405 U.S.
U.S. 330, 352 (1972)
durational residency requirement
requirement is permissible only to prevent voter
voter fraud, not to keep new residurational residency
dents from voting); Shapiro v. Thompson, 394 U.S. 618, 627 (1969)
(1969) (holding
(holding a dumtional
requirement
requirement to be an improper basis
basis for denying welfare
welfare benefits);
benefits); see also Chimento v. Stark, 353 F.
728
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Jurisdiction
General Jurisdiction
29
ofjudicial and regulatory authority over
over these
these residents.
residents. 29
state's exercise ofjudicial
Indeed, most courts treat as self-evident the state's right to subject domi30
its courts.
ciliaries to the jurisdiction of its
courts.30
A person legally acquires this unique relationship with the domicili3 1 or
32
ary state by operation of law3I
by choice. 32
Because most adults
choose their domicile, domicile of choice is the most important type. A
person establishes a domicile
presence in a
domicile of choice through physical presence
new location and an intent to make the place home, at least for the
33 The
time. 33
presence requirement, although it seems to be of only evidentiary
dentiary value, "may
"may have originated in a felt need for the individual to
be within the physical power of the state before subjecting him to its
3 4 Thus, the
legislative or judicial jurisdiction.
of
jurisdiction."34
remaining element
element of
domicile of choice-subjective
choice-subjective intent to make the state a legal homehome35
becomes the essential determination
determination for domicile. 35
Of course, if a finding of domicile depends solely on state of mind, we might expect
expect litigants
to profess an intent compatible
compatible with the particular
benefit
or burden that
particular
accompanies
accompanies such a finding. For example, one predictably would express
a different domiciliary intent when seeking
seeking in-state tuition at a state university than when seeking
seeking to escape a state's jurisdiction. Consequently,
Consequently,
courts review
actions
that
manifest
the
requisite
domiciliary
intent rather
review actions
domiciliary
rather
36
36
profession.
self-interested
person's
a
on
than relying
self-interested profession.
Although a test focusing on objective facts may establish domicile
on a common-sense
common-sense level, domicile remains an ambiguous legal doctrine.
ways 37 and consider a variThus, courts determine domicile in different
different ways37
whether a party's conduct demonstrates the
ety of factors when deciding whether
38
domicile. 38
degree of intent necessary to establish a new domicile.
1211, 1215
(D.N.H.) (considering durational
requirement to be appropriate
Supp. 1211,
1215 (D.N.H.)
durational residency
residency requirement
appropriate for canaff'd, 414 U.S.
(1973).
didates seeking
seeking public office), aff'd,
U.S. 802 (1973).
(1940); Lawrence v. State Tax Comm'n,
29. See, eg.,
e.g., Milliken
Milliken v. Meyer, 311 U.S.
U.S. 457, 463-64 (1940);
Comm'n,
286 U.S.
U.S. 276, 279 (1932);
(1932); Maguire v. Trefrey, 253 U.S.
U.S. 12, 15
15 (1920).
(1920).
eg., Skiriotes
(1941) (concluding
(concluding summarily that a state
30. See,
See, e.g.,
Skiriotes v. Florida, 313 U.S. 69, 77 (1941)
may exercise authority over its own citizens).
31. The law assigns a domicile to certain
certain classes of persons regarded as incapable
incapable of choosing a
31.
domicile. Children receive the domicile of their parents,
(SECOND) OF CONFLICT OF
OF
parents, RESTATEMENT
RESTATEMENT (SECOND)
id. §§ 23.
LAWS §§ 22 (1969),
(1969), as do incompetent
incompetent persons, id.
15.
32. See id.
id. §§ 15.
33. See Mas v. Perry, 489 F.2d 1396, 1399
(5th Cir.), cert.
denied, 419 U.S.
(1974); Lea
1399 (5th
cert. denied,
U.S. 842 (1974);
Lea v.
18 N.J. 1,
11, 112
(1955); White v. Tennant, 31 W. Va. 790, 791-92,
791-92, 8 S.E. 596,
Lea, 18
I, II,
112 A.2d 540, 545 (1955);
596,
RESTATEMENT (SECOND)
(SECOND) OF CONFLICT OF LAWS §§ 15-16,
15-16, 18 (1969).
(1969).
597 (1888);
(1888); RESTATEMENT
Domicil of Refugees, 42 COLUM.
34. Note, Domicil
COLUM. L. REv.
REV. 640, 643
643 n.19 (1942).
(1942).
35.
35. See generally
generally R. WEINTRAUB,
WEINTRAUB, supra
supra note 19, §§ 2.4-.11 (discussing various issues that arise
from inquiries into domiciliary
domiciliary intent).
Mas, 489
36. See,
See, e.g.,
e.g., Mas,
489 F.2d at 1400; Lea, 18 N.J. at 11,
11, 112 A.2d.
A.2d. at 545; White, 31 W. Va. at
791-92, 8 S.E. at 597.
37. See RESTATEMENT
(SECOND) OF CONFLICT OF LAWS
27-30 (1969).
(1969).
RESTATEMENT (SECOND)
LAWS §§ 27-30
38.
consider
38. For example, a court might consider
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Domicile is traditionally the strongest basis supporting
supporting general
general jurisdiction over a party. Domicile
Domieile provides such a strong foundation for the
imposition of general personal
personal jurisdiction
jurisdiction because
because it typically
typically satisfies
four of the major theoretical justifications for the assertion of jurisdicconvenience for the plaintiff, power,
tion: convenience
convenience for the defendant, convenience
and reciprocal benefits.
(a)
defendant.-Presumably, the domi(aJ Convenience
Convenience Jfr
for the defendant.-Presumably,
them.
parties to a suit would provide
provide forums convenient to
to.them.
ciles of the parties
Defendants, especially, would seem
seem to benefit from a rule basing jurisdic39 Of course, this generalization
generalization is not always true; a
tion upon domicile. 39
defendant might be away
from
home
for a long period of time or might
away
40 Furthermore,
commencement of a suit.
suit.4°
Furthermore, as
move to another state after commencement
Supreme Court emphasized
emphasized in WorldWorld-Wide
Corp. v.
Wide Volkswagen Corp.
v.
the Supreme
sufWoodson, jurisdiction may
may be inappropriate
inappropriate even when a defendant suf41
We must seek, therefore, additional
additional
fers relatively
relatively little inconvenience.
inconvenience.41
explanations for the use of domicile as a basis of general jurisdiction.
jurisdiction.
(b) Convenience
Convenience for the plaintiff.-For
convenience of
of
(bJ
plaintiff-For the convenience
plaintiffs, general jurisdiction should
exist
somewhere
in
order
"to
preshould
somewhere
order "to
serve some place where the defendant can be sued on any cause of ac42
tion."
In light of this policy, von Mehren
Mehren and Trautman
Trautman conclude that
tion."42
general jurisdiction
jurisdiction should be narrowly
narrowly available and tied closely to dom43 The domicile
icile. 43
theoretically enhances
test theoretically
enhances convenience
convenience to the plaintiff by providing one sure forum in which to sue the defendant. But
But
mechanically ascertainable. In our increasingly
domicile is not always
always mechanically
increasingly
mobile society, people not only relocate more often and for a broader
broader
array of reasons, but frequ.ently
frequently do so with less certainty that they will
the paying of taxes and statements
statemcnts on tax returns; the ownership
ownership of property;
property; where
where the
person's
person's children
children attend school; the address at which one receives
receives mail; statements as to
residency contained in contracts
contracts or other documents;
documents; statements
statements on licenses
licenses or governmengovernmental documents; where
znd other personal belongings are kept; which
where furniture 2.nd
which jurisdiction's
jurisdiction's
banks are utilized; membership
professional, fraternal, religious or social organizations;
membership in professional,
organizations;
where one's regular physicians
physicians and dentists are located; where one maintains charge
charge accounts; and any other facts revl:aling
revealing contact with one or the other jurisdiction.
jurisdiction.
Bainum v. Kalen, 272 Md. 490, 499, 325 A.2d 392, 397 (1974).
(1974).
39. See R. WEINTRAUB,
WEINTRAUB, supra
Superior
supra note 19,
19, § 4.33, at 213; cf
cf. Asahi Metal
Metal Indus. Co. v. Superior
Court, 107 S.
(1987)
S. Ct. 1026, 1034 (I
987) (denying jurisdiction
jurisdiction in part
part because of the burden
burden a Japanese
defendant faces in litigating
litigating in California).
defendant
CaIif,)rnia).
See, e.g.,
40. See.
e.g., Milliken v. Meyer,
Meyel', 311 U.S.
U.S. 457, 459 (1940)
(1940) (absent defendant was sued at his
domicile while he was
States, 284 U.S. 421,
421, 433
was residing in a different state); Blackmer
Blackmer v. United States,
(1932) (defendant,
(1932)
(defendant, while living in France,
France, was sued at his domicile).
U.S. 286, 294 (1980).
(1980).
41. 444 U.S.
42. von Mehren
& Trautman, :upra
Mehren &
supra note 3, at 1179.
I 179.
43. Id.
730
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General Jurisdiction
44 Such uncertainty
intention-based domiuncertainty for an intention-based
remain in a new home. 44
cile test thwarts the effort to provide a plaintiff with a simple, reliable
place to sue.
Even if we overcome the definitional problems with a domicile standard, assigning
coincidence of domicile presents
assigning jurisdiction based on the coincidence
implementation
problems.
Assume
Smith
is domiciled in New York
implementation
Assume
when she runs over Jones, domiciled in Connecticut.
Connecticut. Smith then moves
to Califoruia
California and establishes her domicile there. Where should
fIle
should Jones file
suit? One might
might assume that Jones should file
fIle in the state where Smith
was domiciled
not
domiciled when the cause of action arose because this would not
subject Jones
to
the
vagaries
of
Smith's
later
change
in
domicile.
But
Jones
change
from a practical view, Smith is now a domiciliary of California, and a suit
filed
fIled in Connecticut would not serve Smith's convenience.
convenience. Clearly, the
concept
convenience-to-the-plaintiff purconcept of domicile does not serve the convenience-to-the-plaintiff
on
jurisdiction to the extent that it arbitrarily
arbitrarily adopts time limits on
pose of jurisdiction
determining
determining domicile.
(c) Power.-In
of
Power.-In essence, the power rationale for an assertion
assertion of
general jurisdiction relies on practical considerations.
considerations. For the forum
state meaningfully
meaningfully to adjudicate the rights of any party, the state must be
able to compel the appearance
appearance of defendants in its courts and exercise
exercise
obtain
power over them sufficient to enforce its judgments.4455 States may obtain
jurisdiction over defendants as long as they are subject to the state's
state's
physical power. A state derives
derives its physical power from its status as an
independent sovereign, which
which possesses and imposes authority
authority over
over per46
Because a state's authority over a
sons and property within its borders. 46
commensurate with its general territorial limitations,
particular person is commensurate
the state may subject persons that occupy its land to its physical power.
Domiciliaries, therefore, are particularly
particularly amenable
amenable to the state's jurisdic47
InternationalShoe Co.
Washington recThe Supreme Court in International
Co. v. Washington
tion. 47
44. Cf.
Cf. Holmes v. Sopuch, 639 F.2d 431,
1981) (holding that a Missouri citizen
431, 434 (8th Cir. 1981)
citizen
studying at Ohio State University and intending to stay in Ohio only while his studies required it did
Elwert 196 Or. 256, 265,
265, 248 P.2d 847, 851 (1952)
(1952) (holding
not acquire an Ohio domicile); Elwert
Elwert v. Elwert
that an Idaho
Idaho divorce was null and void because the husband, who lived in Idaho
Idaho for 10 months, was
not an Idaho
Idaho resident when he filed for divorce).
45.
Cf. Blackmer
45. Cf.
Blackmer v. United States, 284 U.S.
U.S. 421,
421, 439-40 (1932)
(1932) (stating
(stating that the necessity
necessity of a
defendant justifies contempt finding when the defendant residstate to compel an appearance of the defendant
ing abroad fails to answer a subpoena).
46. See Pennoyer v. Neff,
(1878).
Neff, 95 U.S.
U.S. 714, 722 (1878).
47. Plaintiffs, in comparison, submit
submit to the laws and authority of a state by choosing
choosing to bring
suit
See, eg.,
v. Saenger, 303
(1938) ("The plaintiff
e.g., Adam V.
303 U.S.
U.S. 59, 67-68
67-68 (1938)
plaintiff having, by his
suit in its courts. See,
voluntary act in demanding justice from the defendant,
defendant, submitted himself to the jurisdiction
jurisdiction of the
court,
for
arbitrary or unreasonable in treating
treating him as being there for all purposes for
court, there is nothing arbitrary
which
which justice to the defendant requires
requires his presence.").
presence.").
. 731
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48
ognized
the traditional basis for jurisdiction. 48
ognized physical power as 1he
The power rationale presents several
several problems. First, its worth as a
measure of constitutional due process has given way to an approach cen49
de£~ndant.49 Second, other jurisdictional
jurisdictional bases,
tered on fairness to the defendant.
such as the presence of defendants or their property, are more likely than
power
domicile to confer power over the defendant. Finally, the state's power
over a domiciliary
domiciliary may depend upon whether sister states will enforce its
50
judgment;
if the state of domicile renders
renders judgment against a domicilijudgment;50
if
ary absent from the state, a sister state will enforce that judgment only if
5
51
the rendering
rendering state had constitutional
constitutional jurisdiction
jurisdiction over the defendant. 1
The power rationale, therefore, results in unavoidable circularity:
circularity: a state
defendant domiciliary
has power and thus jurisdiction
jurisd-iction over an absent defendant
enforce the judgment, which sister states will do
only if sister states will enforce
jurisdiction.
only if the first state had jurisdiction.
,
(d) Reciprocal
(dJ
Reciprocal benefits and burdens.-Domicile
burdens.-Domicile creates a
domiciliary and the forum state, a relaunique relationship between
between the domiciliary
tionship
domiciliary and the
tionship composed
composed of the benefits provided to the domiciliary
burdens imposed by the state in consideration
for
those benefits. If a
consideration
state finds
that
Smith
is
a
domiciliary,
that
state
determines
the validity
fmds
divorcs, will, and custody rights. It has administraof Smith's marriage, divorc~,
tive authority over her estate, can impose
impose inheritance
inheritance and income taxes,
the state's judicial processes and rules for any
and can subject her to th<::
claims against
certain
against her. The state, on the other hand, must extend certain
benefits to her, including the right to vote, education (when other locals
for
are granted such benefits), and in-state tuition. She is eligible to run for
office, and the state cannot deny her general welfare and medical
medical assistance. The state can extract
extract these special
special responsibilities
responsibilities from its domiciliaries even when they are absent from the state; for example, in Iv/illiken
Milliken
52
v. Meyer,
Meyer,52 the Court held that a state of domicile
domicile has general
general jurisdiction
jurisdiction
over an absent
domiciliary if the domiciliary
domiciliary has received notice of the
absent domiciliary
(1945); see also
also McDonald
U.S. 90, 91 (1917)
(referring to
48. 326 U.S.
U.s. 310, 316 (1945);
McDonald v. Mabee, 243 U.S.
(1917) (referring
physical power
"foundation of jurisdiction").
jurisdiction").
power as the "foundation
InternationalShoe, 326
also R.
R. WEINTRAUB, supra
19, § 4.8, at
49. See International
326 U.S.
U.S. at 319; see also
supra note 19;·§
International Shoe established a "jurisdictional standard
118 (stating that International
standard of fairness to the
defendant").
50. The full faith and credit clause, U.S. CONsT.
CONST. art. IV, §§ 1, requires states to give to the
judgments
effect that such judgments
jUdgments have in the state of rendition. Morris
Morris
judgments of sister states the same effect
(1947); SEe
see RESTATEMENT
(SECOND) OF
OF CONFLICT
CONFLICT OF
OF LAWS
LAWS § 93 comv. Jones, 329 U.S.
U.S. 545,
545, 551 (1947);
RESTATEMENT (SECOND)
com(1969); see also
also 28 U.S.C.
(1982) (requiring federal courts
credit
U.S.C. §§ 1738
1738 (1982)
courts to give full faith and credit
ment b (1969);
to state court
court judgments).
jndgments).
51. See R.
R. WEINTRAUB,
WEINTRAUB, supra
supra note 19, § 4.3, at 94.
51.
52. 311 U.S.
U.S. 457 (l940).
(1940).
732
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Jurisdiction
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adequate to conform
conform with "traditional
suit53 adequate
suit
"traditional notions of fair play and sub'54 The Court's
stantial
justice...
of
... implicit in due process."
process."54
discussion of
stantial justice
the relationship between notice and fairness later provided the basis for
InternationalShoe's introduction of a minimum
International
minimum contacts
contacts approach
approach to jurisdiction. 555 Although
Although the Court recognized a state's physical power as
the historical
historical basis for general jurisdiction,
jurisdiction, its new approach signaled an
important
theoretical
shift
in
explaining
important theoretical
explaining how a state obtains jurisdiction
jurisdiction
over persons.
One benefit that states regularly confer is the right to vote. The
right to vote gives domiciliaries the chance
chance to influence local political
processes.
When
a
state
applies
its
long-arm
statute to attain jurisdiction
processes.
jurisdiction
over a domiciliary, it simply requires the domiciliary
domiciliary to adhere to a local
law that theoretically
theoretically the party had a chance to influence. For this reason, domicile is different from other bases for general
of
general jurisdiction, all of
which
which raise the question of the state's right to regulate outsiders that
have not had the opportunity to influence
influence the legislative process. On
balance, the reciprocal
reciprocal benefits and burdens rationale provides the most
satisfactory
satisfactory basis for the state's exercise
exercise of coercive power.
2. Place
Incorporation and Principal
Business.-The
2.
Place of Incorporation
Principal Place
Place of Business.-The
law treats corporations
corporations like legal.persons,
legal -persons, and the place
incorporation
place of incorporation
and the principal
principal place of business are both analogous
analogous to domicile. In
some respects, the decision to incorporate
incorporate in a particular
particular state provides a
more powerful
powerful basis for adjudicatory
adjudicatory jurisdiction than does domicile.
First, the corporation intentionally
intentionally chooses to create
create a relationship with
the state of incorporation, presumably
presumably to obtain the benefits
benefits of that
state's substantive and procedural
laws. 56 Such a choice
procedural laws.56
choice creates a unique
corporation.5 7
relationship
relationship that justifies
justifies general
general jurisdiction over the
the corporation.57
Second, the corporation, unlike an individual, cannot ever be absent from
the state of incorporation. Third, even if a corporation
corporation neither
neither does business nor maintains
incorporating state, the incorporation
incorporation
maintains an office in the incorporating
53. See id.
id. at 462.
54. Id. at 463.
55. International
Washington, 326 U.S. 310, 316 (1945)
(1945) (finding that constitutional
International Shoe Co. v. Washington,
due process for jurisdiction
jurisdiction requires that the defendant have "certain
"certain minimum contacts
contacts with [the
'traditional notions of fair play and
state] such that the maintenance of the suit does
does not offend 'traditional
463)).
substantial justice'"
justice'" (quoting Milliken, 311 U.S. at 463».
56. Cf Macey &
& Miller, Toward
Toward an Interest-Group
Delaware Corporate
Corporate Law, 65
65
Interest-Group Theory of Delaware
TEXAS L. REV.
REV. 469, 477 (1987)
(1987) (suggesting that one school
school of thought, the corporate
corporate federalists,
efficient menu of
legal
would hold that corporations
corporations will incorporate in the "state providing the most efficient
oflegal
rules"). Empirical
Empirical evidence
evidence has shown
shown that companies are particularly
particularly sensitive to differences
differences
as a Product:
among states'
states' laws when deciding
deciding where to reincorporate.
reincorporate. See Romano, Law as
Product: Some
Pieces of the Incorporation
Puzzle, 1 J.L. EcON.
ECON. &
& ORGANIZATION
ORGANIZATION 225, 265 (1985).
(1985).
Incorporation Puzzle,
Neff, 95 U.S. 714, 734-35 (1878);
(1878); R. WEINTRAUB,
19, § 4.21.
4.21.
57. See Pennoyer v. Neff,
WEINTRAUB, supra
supra note 19,
733
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Vol. 66:721, 1988
process itself provides notice of the potential for judicial jurisdiction.
jurisdiction. Finally, the corporation is likl~ly
likely to be familiar with that state's law, arguably more familiar than an :individual
-individual domiciliary
domiciliary would be, because the
incorporation decision in part on the
corporation presumably
presumably based its incorporation
58
state's substantive
substantive law. 58
Place of incorporation, however, is not the only affiliation that supports general jurisdiction;
jurisdiction; a corporation
corporation may do sufficient business
business
within a state to give the state general jurisdiction
jurisdiction over it. Perkins
Perkins v.
Benguet Consolidated
ConsolidatedMining
Co.59
Mining Co.
59 suggests two standards with which to
evaluate
corporation's doing business in a state. First, as discussed
evaluate a corporation's
discussed below, 6° an absolute quantum.
quantum, of activity in a forum may give rise t~
to jurislOW,60
corporation's principal place of
diction. Second, if the state is the corporation's
of
business, then a smaller quantum
of
activity
may
establish
jurisdiction.
qu antum
In Perkins,
Perkins, for example, the
thl~ defendant had relocated
relocated its corporate
corporate headquarters to the forum, and its activities in the forum constituted
constituted its entire
wartime business. 6611 The principal place of business standard
standard may rest on
on
conceptual grounds similar
incorporation
conceptual
similar to those supporting
supporting the state of incorporation
as a jurisdictional
jurisdictional basis. This standard, however, incurs definitional
definitional and
functional problems of application similar to those occurring
occurring with the
63 or
62 States may define the term "principal"
"principal" differently
domicile test.62
differently63
or
incorporation rest on the premise that corpo58. The major theories on selection
selection of a state
state of incorporation
corpomanagers base their
states' various laws. The race-to-the-bottom
rate managers
their decisions upon the states'
race-to-the-bottcom theory
contends that corporate
corporate managers pnmarily
pnmarily look to a state with laws favorable
favorable to them and not to
shareholders. See Macey
supra note 56, at 474. The competing theory, proffered
Macey &
& Miller, supra
proffered by the
corporate management
management searches
law and economics movement, contends that corporate
searches for states with efficient
efficient
corporate management prefers Delaware's legal environment
environment
id. at 472. In particular, corporate
rules. See id.
both for the present structure of its rules
nIles and for its
its reliable promise
promise that rules adopted in the future
will continue to be highly favorable. See id.
id. at 471-72.
59. 342 U.S. 437, 444 (1952).
(1952).
60. See infra subpart
subpart II(B).
61. See 342 U.S. at 447-48.
447-48.
62. The defendant's
defendant's activities ma'y
m!,y be spread over several
several states, making it difficult to determine
which state is its principal
Cf Burger King Corp. v. Rudzewicz,
principal place ofbuiness.
ofbminess. Cf.
Rudzewicz, 471 U.S. 462,
462, 485
n.28 (1985)
(1985) (suggesting that the nature of a franchise agreement is such that no single
single corporate
headquarters
principal place of business).
headquarters is a principal
63. Some courts have held that
sufficient to establish
that the location of business supervision is sufficient
establish the
principal
e.g., Tolchester
Tolchester Lines
business. See, e.g.,
Lines v. Dowd, 253 F. Supp. 643, 648 (S.D.N.Y.
principal place of business.
is. where the corporate officers spend the "great
1966) (stating
(stating that principal place i!.
"great bulk of their
their
time");
189, 75 N.W.2d
(1956) (stating that the princ'ipal
principal place
time"); Meyers
Meyers v. Lux, 76 S.D. 182, 189,75
N.W.2d 533,
533, 537 (1956)
of
business is where
occurs and books and records are kept). But see In re Evans, 12 F.
of business
where supervision occurs
(stating that the"
the "'principal
business' is not necessarily
'principal place of business'
necessarily
Supp. 953,
953, 954 (W.D.N.Y. 1935) (stlting
determined
business carried on"). Other courts have held that
corporate chardetermined by the volume of
ofbusines!
that the corporate
ter identifies the principal place of business. See.
See, e.g.,
Universal Film Exchs., 32 Cal. App.
e.g., Kane
Kane v. Universal
2d
(1939) (stating that the principal place
place of business cannot
cannot be estab2d 365, 367,
367, 89 P.2d 693, 694 (1939)
lished
re Charmichael
Charmichael Enters.,
Enters.,
lished unless
unless the correctly filed corporate
corporate charter
charter identifies
identifies it). But see In re
334 F. Supp. 94, 102 (N.D. Ga. 1971)
1971) (stating that the principal place of business would
would be in a
county other
other than
specified in
in charter if business functions so indicated).
county
than the
the one
one specified
734
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General Jurisdiction
General
may determine that they provide benefits which are relatively more important to a particular
particular corporation
corporation than those provided
provided by other states.
3. Conclusion.-Domicile,
Conclusion.-Domicile, place of incorporation,
3.
incorporation, and principal
place of business
general jurisdiction. Unlike
business are paradigms
paradigms of bases for general
other bases for general jurisdiction
discussed
below, 64 these bases
below,64
bases typijurisdiction
cally are unique. A corporation usually has one state of incorporation
incorporation
and one principal place of business, and individuals have a single domicile. In contrast, other bases, such as activities, presence, property, and
65
consent, may exist in any number of states for a single defendant. 6s
Thus, we refer to domicile, place of incorporation,
incorporation, and principal
principal place of
of
affiliations, indicating that one state alone has that
business as unique affiliations,
relationship to the party. That these affiliations are unique may account
account
for the special constitutional
constitutional status they historically
historically have enjoyed; inor
deed, courts have taken their sufficiency
sufficiency as jurisdictional
jurisdictional bases more or
66 We will discuss below 67
67 a considerably more controless for granted. 66
considerably
versial point, namely the significance
contacts for choice-of-law
choice-of-Iaw
significance of unique contacts
purposes. First, we must discuss other nonunique bases for general jurisdiction: activities in the state, presence, consent, and ownership of property. Although many courts properly
properly have relied on these for general
jurisdiction, they are not paradigm bases of general jurisdiction
jurisdiction because
each also establishes specific jurisdiction
jurisdiction in certain
certain circumstances.
B.
Activities
A defendant's activities
activities in the forum can be the basis for either gen68
One important practical
practical implication foleral or specific
specific jurisdiction.
jurisdiction. 68
lows from this fact: one must first determine whether
whether the plaintiff alleges
these nonunique contacts in support of general
general or specific
specific jurisdiction
jurisdiction in
of jurisdiction being
order to decide how many must be shown. The type ofjurisdiction
sufcontacts required;
required; a single activity may sufasserted sets the quantum
quantum of contacts
69
fice to establish specific jurisdiction,
jurisdiction,69
whereas general jurisdiction
jurisdiction re64. See infra
64.
infra subparts
subparts II(B)-(E).
jurisdiction over a
65. For example, state long-arm statutes typically provide some basis of jurisdiction
TEx. CIV. PRAC. & REM. CODE ANN.
ANN.
e.g., TEX.
defendant that contracts
contracts with state residents, see, eg.,
§ l7.044(b)
17.044(b) (Vernon 1986); thus a basis for jurisdiction over a party conceivably
conceivably exists in every state
in which the party
party contracts with a resident.
supra note 10, at 633 &
11.
& n.I
n.ll!.
66. Twitchell, supra
67. See infra
infra Part
Part III.
68. For example, in Perkins v. Benguet Conso!.
Consol. Mining
(1952), general
Mining Co.,
Co., 342 U.S. 437, 444 (1952),
Washington, 326 U.S. 310, 316
316
jurisdiction was based
based on activities; in International Shoe Co. v. Washington,
(1945), specific jurisdiction
(1945),
jurisdiction was based
based on activities.
Shoe, 326 U.S. at 318 (finding that defendant's
69. See,
See, ag.,
e.g., International
International Shoe,
defendant's lone activity in the
state-using salesmen to solicit
orders-supported jurisdiction
solicit orders-supported
jurisdiction over a claim related to that activity).
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1988
quires
continuous and systematic
quires proof of continuouB
systematic activities. 70 Determining
whether
specific or general jurisdiction
jurisdiction turns on the
whether an activity invokes specific
controversy. 7711
whether the activity is related to the
difficult
the controversy.
difficult question of whether
This inquiry is unnecessary
unnecessary when the contact alleged
alleged in support of jurisdiction is either domicile or incorporation.
incorporation. Once the plaintiff has established such a unique affiliation, the type of jurisdiction
jurisdiction sought does not
matter because
of
because the affiliation clearly has shown the requisite level of
contact.
1. Substantive
Substantive Relevance and Related Activities.-When defendants have engaged
engaged in forum activities that are related to the controversy
72 plaintiffs
or out of which the controversy
specific
controversy arises,
arises,72
usually seek specific
jurisdiction. In contrast, when plaintiffs seek general jurisdiction, they
may allege as a basis for jurisdiction
jurisdiction activities unrelated
unrelated to the dispute.
For instance, one standard
basis
for
general
jurisdiction
has been the destandard
73
Perkins v.v.
fornm;73 the Supreme Court in Perkins
fendant's doing business in the forum;
Benguet Consolidated
Consolidated Mining
Mining Co., for example, predicated
jurisdiction
predicated jurisdiction
74
defendant's business
upon the defendant's
busim:ss activities in the forum. 74
Mehren and Trautman, specific jurisdiction
According to von Me:llren
jurisdiction is
"the power to adjudicate with respect to issues deriving from, or con"the
nected with, the very controversy that establishes jurisdiction to adjudicate."' 75 A plaintiff can show specific jurisdiction
of
cate."75
jurisdiction with a small number of
contacts if they are related to the controversy,
controversy, or if the controversy
controversy arises
Givert that general jurisdiction requires a larger
larger
out of the contacts. Given
determining whether activities are related or concontacts, detemtining
number of contacts,
nected in the appropriate
appropriate sense becomes
becomes crucial. Resolution
Resolution of the relatedness issue thus should
should precede
precede an assessment of the contacts' quantity.
The vast bulk of commentary
commentary on jurisdictional
jurisdictional due process, however, is
76
76
.
issue
this
on
silent
strangely
this issue.
Supreme Court likewise has been
The Supreme
been relatively unhelpful. While it
70. See,
See, e.g.,
e.g., Helicopteros
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416-17 (1984)
(1984)
(holding
(holding that continuous and systematic
systematic activities between
between the defendant and the forum were necessary
sary to establish jurisdiction
jurisdiction over a claim unrelated to those activities).
71.
L. BRILMAYER
BRILMAYER AND OTHERS, AN INTRODUCf10N
INTRODUCTION TO JURISDlCf10N
JURISDICTION IN
71. See L.
IN THE
THE AMERIAMERICAN
(1986) [hereinafter
BRILMAYER].
CAN FEDERAL SYSTEM
SYSTEM 22 (1986)
[hereinafter L. BRILMAYER].
See, e.g.,
e.g., McGee v. International
72. See.
Interuational Life Ins. Co.,
Co., 355 U.S.
U.S. 220, 223 (1957);
(1957); International
International
U.S. at 319.
Shoe, 326 U.S.
73. See.
See, e.g.,
N.Y.2d 626, 626, 208 N.E.2d 439, 439, 255
e.g., Bryant v. Finnish Nat'l Airline, 15 N.Y.2d
N.Y.S.2d
(1965). See generally
generally Kurland, supra
supra note 11,
11, at 584 (analyzing the doing busiN.Y.S.2d 671,
671, 671 (1965).
ness doctrine).
74. See 342 U.S.
(1952).
U.S. 437, 445-47 (1952).
75. von Mehren
suora note 3, at 1136.
Mehren &
& Trautman, sUrJra
76. But see Richman,
I-Casad'sJurisdiction
Civil Actions,
Actions, Part
SlidingScale To
To
Richman, Part
Part I-Casad's
Jurisdiction in Civil
Part II-A Sliding
G.tneral and
and Specific Jurisdiction
Jurisdiction(Review
Supplement the Distinction
Distinction Between G.meral
(Review Essay), 72 CALIF. L.
REV.
(1984) (discussing the distinction between general and specific jurisdiction and
REV. 1328, 1336-46 (1984)
736
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General Jurisdiction
Jurisdiction
has acknowledged
acknowledged the importance of the relation of the claim to the fo77
rum,
the Court's opinions
exactly what type of relatedrum,77
opinions fail to describe exactly
order to establish
establish
ness between
between the claim and the forum is necessary in order
78 Must the claim have arisen out of the defendant's
specific jurisdiction.78
sufficient if the forum
forum activities in a substantive law sense? Or is it sufficient
contacts are in some other way related or similar to the activities
activities that
79
constitute the cause of action?
action?79 Purportedly because
because the parties did not
not
Helicopteros majority did not reach
of
reach the question of
argue the issue, the Helicopteros
whether "a forum's exercise
exercise of personal jurisdiction
jurisdiction in a situation where
the cause
action 'relates to,' but does not 'arise
'arise out of,'
of,' the defendant's
cause of action
contacts with the forum should be analyzed as an assertion of specific
80
jurisdiction."
jurisdiction."80
Some courts have embraced the position
position that specific jurisdiction is
is
justified when the forum contacts
contacts are in some way related
related to or connected
of
action did not arise out of
nected with a claim, even
even though the cause of action
8 1 For example, although the
81
the defendant's
forum
activities.
California
defendant's
activities.
California
Cornelison v.
v. Chaney stated
stated that the defendant's
defendant's forum
Supreme Court in Cornelison
contacts were insufficient to establish
establish general
general jurisdiction
jurisdiction over a tort
claim, it nonetheless
nonetheless found "a substantial nexus between plaintiff's cause
California. ' 82 The accident
of action
action and defendant's activities
activities in California."82
accident occurred while the defendant, a trucker, was en route to California, and he
arguing that more
more attention
attention be paid to the relatedness of the defendant's contacts to the cause of
of
action).
77. See.
See, eg.,
e.g., International
International Shoe Co. v. Washington, 326 U.S. 310, 320 (1945).
(1945).
78. Cf
Cf.Helicopteros Nacionales
(1984) (Brennan,
Nacionales de Colombia, S.A. v. Hall,
HalI, 466 U.S. 408, 420 (1984)
(Brennan,
J., dissenting) (arguing that the Court fails to distinguish controversies
controversies that relate to defendant's
defendant's
contacts
the forum
forum from
with the
from disputes
disputes that arise out of such contacts).
contacts with
79. For example, one approach
approach uses a sliding scale between specific and general
general jurisdiction.
As
defendant's total forum contacts must
As related
related contacts become more
more attenuated, the level of the defendant's
jurisdiction, midway between specific and general jurisdiction, rerise concomitantly. This type of jurisdiction,
combined relatedness
relatedness (although not related enough to establish
quires contacts sufficient
sufficient in their combined
specific jurisdiction)
jurisdiction) and amount (although
(although not enough
enough to establish general jurisdiction) to create
create an
an
adequate
CIVIL PROCEDURE
PROCEDURE 147 (1982);
(1982); Richman, supra
supra note 76, at
adequate nexus. See K. CLERMONT, CIVIL
1336-45. Justice
Justice Brennan
in his
his dissent
dissent in Helicopteros.
Helicopteros. See 466 U.S. at
1336-45.
Brennan proposed
proposed such
such aa sliding
sliding scale
scale in
425 (Brennan, J., dissenting).
80.
466 U.S.
415 n.10.
id. at 425
80. 466
U.S. at
at 415
n.lO. But
But cf.
cf id.
425 (Brennan, J., dissenting) (contending that although
the
claim did
of forum
activities, it was related to such activities and therefore the
the claim
did not
not arise
arise out
out of
forum activities,
activities should support
support specific jurisdiction).
jurisdiction).
81. See,
1984) (finding
81.
See. e.g.,
e.g., Cubbage
Cubbage v. Merchent,
Merchent, 744
744 F.2d 665, 668 (9th Cir. 1984)
(finding that a malpracmalpractice
"claim arose out of or resulted from appellant's
tice "claim
appelIant's forum-related
forum"related activities,"
activities," which amounted
amounted to
minimal advertising and obtaining
"Medi-Cal" number that enabled them
collect
obtaining from the state a "Medi-Ca1"
them to coIIect
fees); Southwire
Southwire Co.
v. Trans-World
Metals &
& Co.,
fees);
Co. v.
Trans-World Metals
Co., 735 F.2d 440, 442 (11th Cir. 1984) (construing
"transacting
business" requirement in a state long-arm
liberally to include jurisdiction
over
"transacting business"
long-arm statute
statute liberaIIy
jurisdiction over
actions arising
arising directly
directly or indirectly out of transactions).
82. 16 Cal.
545 P.2d 264, 268, 127 Cal. Rptr. 352, 356 (1976);
(1976); see also Comment,
Cal. 3d
3d 143, 149,
149,545
The Cornelison
Cornelison Doctrine:
Doctrine: A
A New
14 SAN
SAN DIEGO
458,460-69
(1977)
The
New Jurisdictional
Jurisdictional Approach,
Approach, 14
DIEGO L.
L. REV. 458,
460-69 (1977)
(discussing Cornelison's
Cornelison's structure
structure and application).
application).
737
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1988
83
carried
unrelated trucking activities there.
there.83
carried on some other unrelated
concept
Just what courts mean when they speak
speak of this amorphous concept
of relatedness,
relatedness, however, is simply
simply unclear. Practically
Practically any contact might
support specific jurisappear to be related to the cause of action and thus support
apparently bounddiction. In short, such a vague term offers a state an apparently
jurisdictional reach-a
reach-a result out of step with our notions of due
less jurisdictional
Cornelison, would it have been enough that the defendant
defendant
process. In Cornelison,
on
once carried on trucking activities in the forum, or that it now carried on
a small bus charter
operation?
What
if
the
driver
had
been
planning
charter operation?
to
California three months hence? In what sense are the actual
drive to Califoruia
Cornelison any more "related"?
contacts in Cornelison
A test of substantive relevance
relevance provides a different approach in discerning the boundary between specific and general
general jurisdiction. ~ Sub"[a] contact is related to the controversy
controversy if it
stantive relevance finds that "[a]
geographical qualification
is the geographical
qualification of a fact relevant
relevant to the merits. A forum
occurrence which would ordinarily be alleged as part of a comparable
comparable
occurrence
domestic complaint is a related contact."85
contact. '8 5 Some have criticized this apjurisdiction to the vagaries of state
boundaries of
ofjurisdiction
proach as relegating
relegating the boundaries
should vary with state
substantive law. 86 Yet these boundaries arguably should
law just as a particular caus(~
cause of action will vary from state to state, and
and
87
87
whose
variances
are
a
well-accepted
aspect
of
federalism.
Indeed,
the
whose
well-2;ccepted
88
89
Supreme Court in both Rush v. Savchuk 88 and Shaffer v. Heitner,89
Heitner, while
jurisdiction
83. See 16 Cal. 3d at 146-47,
146-47, 545 P.2d
P.2d at 266, 127
127 Cal. Rptr. at 354. As one jurisdiction
aficionado
Cornelison, "a
"a funny thing happened on the way to the foaficionado described the connection in Cornelison,
rum."
Gergen, Assistant
of Texas School
rum." Conversation with Mark Gergen,
Assistant Professor
Professor of Law, The University ofTexas
of Law (summer 1980).
Contacts Count,
Count, supra
84. See Brilmayer, How Contacts
supra note 10, at 82.
Id; see also
also Standard
Standard Life &
Accident Ins. Co. v. Western
Western Fin., Inc., 436 F. Supp. 843,
. 85. Id;
& Accident
843, 846
(W.D.
alleged to give rise to the cause of action must be the same acts which
(W.D. Okla. 1977) ("The acts alleged
provide
ofjurisdiction over the nonresident
nonresident defendant.").
defendant.").
provide the basis for the Oklahoma
Oklahoma court's exercise
exercise ofjurisdiction
86. See,
See, e.g., Helicopteros
(1984)
Helicopteros Nacionales
Nacio:lales de Colombia, S.A. v. Hall, 466 U.S. 408, 427 (1984)
(Brennan,
(Brennan, J., dissenting).
87.
that federalism
should assume
87. For
For arguments
arguments that
federalism should
assume a larger role in determining
determining limits on
on personal jurisdiction,
and Interstate
Federalism in the Law of Personal
Personal
Interstate Federalism
jurisdiction, see Stein, Styles of Argument and
Jurisdiction,
689 (1987).
TEXAS L. REv.
REV. 689
(1987).
Jurisdiction, 65 TEXAs
88.
88. 444 U.S. 320, 330-31
330-31 (1980)
(1980) (observing that a direct
direct action statute
statute would make a defendant
defendant
amenable
amenable to suit while jurisdiction founded on the garnishment of an insurer's obligation to defend a
suit against its
its insured would
would not).
89. 433 U.S. 186,
186, 214 (1977)
(1977) (disallowing quasi
quasi in rem jurisdiction
jurisdiction over corporate
corporate directors'
directors'
"present" in Delaware, but suggesting
stock holdings
holdings "present"
suggesting that personal
personal jurisdiction
jurisdiction over the directors,
directors,
Shaffer, Delaware
Delaware enacted
enacted a long-arm
long-arm
granted by a long-arm
long-arm statute, would be constitutional). After Shaffer,
statute affording
affording jurisdiction
over directors
directors of
Delaware corporations,
DEL. CODE
CODE ANN.
ANN. tit. 10,
10,
of Delaware
corporations, see
see DEL.
statute
jurisdiction over
(Supp. 1986);
1986); the
the Delaware
Delaware Supreme
Supreme Court later upheld the statute
§§ 3114
3114 (Supp.
statute as constitutional, ArmArmstrong v. Pomerance, 423 A.2d 174, 179 (Del. 1980). Shaffer is probably wrong to the extent that itit
allows a state to
to alter the due
due process
process calculus
calculus simply by tinkering
tinkering with its long-arm statute. See
Brilmayer,
Interests in Multistate
Multistate Problems:
Problems: As Between State and
and Federal
Brilmayer, Legitimate
Legitimate Interests
Federal Law, 79
MIcH. L. REV.
REv. 1315,
(1981). Rush, in contrast, requires a state to change
MICH.
1315, 1323 (1981).
change its substantive
substantive law.
Id.
Id.
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General Jurisdiction
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disallowing jurisdiction, left open the door for each state to enact legislation that would create
adequate basis for jurisdiction-an
jurisdiction-an even more
create an adequate
expansive
language supexpansive route to a similar
similar end. Moreover, Rush contains language
9o
porting a test of substantive
substantive relevance. 90
Any analysis of what activities, or contacts, should count towards
specific
jurisdiction-and in effect weigh more heavily than those only
specific jurisdiction-and
counting towards general jurisdiction-must rest on some underlying notion of why·
why relatedness
relatedness should matter. For unique affiliations,
affiliations, the
justification for a state's jurisdiction is the reciprocal
strongest justification
reciprocal benefits
91
and burdens that arise from the affiliation. 91
defendant has no
When a defendanLhas
such affiliation
affiliation with a forum, however, some other rationale for requiring
obedience
obedience to a state's coercive
coercive authority is needed.
One possibility lies in the state's authority
authority to regulate occurrences
occurrences
within its territory. Surely the state may condition entry
into
the state
the"
entry
upon willinguess
willingness to comply with its laws. When an individual enters a
state and engages in tortious activities
activities there, the state has an interest in
in
92 Assertion of jurisdiction is a
adjudicating
Assertion jurisdiction
adjudicating the legality
legality of the conduct.92
rational means to that legitimate end. Whether
Whether the conduct is a criminal
criminal
or a civil
individual"to decivil wrong, the state reasonably
reasonably may require the individual'
fend a suit in the state and satisfy any judgment
a
judgment arising out of such 93
Washington,
Co. v.
InternationalShoe Co.
transgression. For example, in International
v. Washington,93
assertion
assertion of jurisdiction
jurisdiction was a means
means toward collecting a tax that the
state arguably
arguably had a right to impose
impose because
because the activities taxed were
substantive interest to assert, and achieving this
local. The forum had a substantive
94
interest
the litigation.
litigation. 94
"
interest was the goal
goal of the
On the other hand, allowing
allowing a state to use innocent
innocent conduct within
within
the state as a pretextual basis for asserting power over conduct
conduct occurring
occurring
outside the state would not be reasonable. The state's interest in regulating activities
10activities in the state cannot justify predicating
predicating jurisdiction
jurisdiction upon lo90. In Rush, the Court faced the question whether an insurer's obligation under its insurance
policy
policy was related to the suit's cause
cause of action, which
which arose out of an automobile accident. The
Court held that the policy was not related, noting that it was not part of the "operative
"operative facts of the
negligence
negligence action."
action." 444
444 U.S. at 329.
329. An amorphous test for relatedness
relatedness probably would have found
found
the policy
policy related. Indeed, prior to Rush several commentators
commentators had argued that an insurance
insurance policy
should
Law: The ConseConseshould be deemed related property. See Sedler, Judicial
Judicial Jurisdiction
Jurisdiction and Choice of
ofLaw:
quences of ShatTer
Shaffer v. Heitner, 63 IOWA L. REV. 1031,
Constitutionalityof
1031, 1038 (1978);
(1978); Note, The Constitutionality
of
Seider
Shaffer v. Heitner, 78 COLUM.
COLUM. L. REV. 409, 426-33
(1978).
Seider v. Roth after ShatTer
426-33 (1978).
91.
contended that the paradigm
paradigm cases of general
91. We have contended
general jurisdiction
jurisdiction involve
involve defendants that
that
are insiders
insiders who are
are entitled
entitled to all the benefits
benefits of membership in the forum, such as voting, educational benefits, and welfare. In such cases, it is reasonable to require defendants
defendants to comply
comply with laws
theoretically have
participated in making. See supra
supra subsection
II(A)(1)(d).
that they theoretically
have participated
subsection II(A)(I)(d).
Cf R. WEINTRAUB,
WEINTRAUB, supra
supra note 19, §§ 6.10
92. Cj
6.10 (discussing the interests
interests of the state where the
tort occurred in applying its law to the case).
93. 326 U.S. 310 (1945).
(1945).
id. at 311-12.
94. See id.
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cal conduct
v.
conduct that is not legally wrongful. The facts of Cornelison
Cornelison v.
95
Chaney
Chaney 95 well illustrate
illustrate this point. California
California could not explain its assertion of jurisdiction
jurisdiction in terms of its interest in regulating local conduct
because the litigation was not an adjudication
because
adjudication concerning
concerning the defendant's
defendant's
96
local conduct. 96
A test of substantive
substantive relevance helps to identify those situations in
activity. 97 Conthe:: litigation to regulate
regulate local activity.97
which the state is using the
duct that has no legal relevance is unlikely to give rise to any plausible
state interest in regulation. Consequently, if such legally irrelevant conduct is the only local contaft,
jurisdiction
conta,~t, then a state cannot predicate
predicate jurisdiction
upon any purported
purported desire to regulate
regulate local activities. Moreover, this
perspective n<;>t
not surprisingly explains
explains why the contours of local substanperspective
tive law might influence an assessment
constitutionality ofjurisdicassessment of the constitutionality
tion. Clearly, if one factor in the constitutional
constitutional equation is the state's
state's
adjudication, 98 then asking whether the state has manifested
interest in adjudication,98
manifested
such an interest in its substantive law is both reasonable
reasonable and desirable.
Perhaps we should em.phasize
emphasize what may already be obvious: the
inquiry into substantive relevance
relevance is not talismanic, but instead
instead is a
means to a particular
particular end-to determine whether
whether entertaining the
th~ litigation would further the state's legitimate interests in local regulation. In
some unusual circumstances,
circumstanceH, a fact may be formally relevant to the substantive dispute but still not
not. support a state interest. In others, it might
might
not be formally relevant, yet may establish an interest. Nevertheless,
Nevertheless,
substantive relevance is an important
'important starting point for inquiring into a
Acknowledging that an interest does exist, moreover,
state's interest. Acknowledging
will not ensure satisfaction of the due process clause; in some circum143, 545 P.2d 2M,
264., 127 Cal. Rptr. 352 (1976).
95. 16 Cal. 3d 143,
(1976).
Cornelison involved a vehicle collision in Nevada
96. The
The cause of action in Cornelison
Nevada between
between a defendant from Nebraska
Id. at 152-53,545
152-53, 545 P.2d at 269, 127 Cal. Rptr. at
at
Nebraska and a plaintiff from California. ld.
357.
BRILMAYER, supra
71, at 38
97. L. BRILMAYER,
supra note 71,
38 n.98.
98. In
International LEe
Li3e Ins. Co., 355 U.S.
U.S. 220, 223 (1957),
(1957), the Court
In McGee
McGee v. International
Court found that the
forum state's
state's interest in providing effective
effective means of redress to its residents when their insurers fail
to pay claims supported
supported jurisdiction
recognized
jurisdiction over a nonresident insurer. Similarly, the Court
Court has recognized
that a state has a special interest in exercising
exercising judicial
judicial jurisdiction
jurisdiction over those who commit torts
within
See, e.g., Keeton v. Hustler
Hustler Magazine, Inc., 465 U.S.
U.S. 770, 776 (1984)
(1984) (finding,
within its territory. See,
in a libel suit, jurisdiction based on circulation
forum state). A
magazine within
within the fornm
circulation of a national magazine
state's
ofjurisdiction. See, eg.,
e.g.,
state's interest in protecting its residents does not always justify the exercise ofjurisdiction.
Kulko
Kulko v. Superior Court, 436 U.S.
U.S. 84, 98 (1978)
(1978) (stating that the state's interest in protecting
protecting its
minor
jurisdiction
minor residents may favor application
application of that state's law, but it does not grant personal jurisdiction
over the defendant). A state's interest in adjudication nonetheless
consideration in
in
nonetheless continues to be a consideration
determining
determining whether
whether a state may exercise
exercise jurisdiction.
jurisdiction. For example, in Asahi Metal Indus. Co. v.
Superior
S.Ct. 1026 (1987),
(197), the Court
Superior Court, 107 S.
Court observed that California
California had little interest in
asserting jurisdiction to protect its resident
r~ident because
because the resident had dropped out of the suit. The
court
of
court found that California
California had minimal legitimate
legitimate interests, and it could not justify its assertion of
jurisdiction
id. at 1034.
jurisdiction in a suit involving two foreign parties. See id.
740
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General Jurisdiction
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General
stances asserting
asserting that
that interest
interest against
against a particular
particular defendant
defendant may
may still be
be
stances
99
or unreasonable.
unreasonable. 99
unfair or
unfair
Ascertaining the
the distinction
distinction between
between related
related and
and unrelated
unrelated contacts,
contacts,
Ascertaining
ofjurisdictional
due process.
process. The
The disdistherefore, cannot
cannot answer
answer all issues
issues of
jurisdictional due
therefore,
only part
part of a threshold
threshold question
question to determine
determine whether
whether a small
small
tinction is only
number of contacts
contacts may suffice,
suffice, as is the
the case
case in specific
specific jurisdiction,
jurisdiction, or
or
whether the
the continuous
continuous and systematic
systematic contacts
contacts required
required for
for general
general juwhether
risdiction are necessary.
necessary. Even
Even once
once we establish,
establish, by whatever
whatever test
test for
for
risdiction
relatedness we choose,
choose, that the contacts
contacts in a particular
particular case
case are
are unrerelatedness
many and what
what kind of
of activlated, there remain
remain important issues of how many
fair.
of
general
jurisdiction
jurisdiction
ities would make
make assertion general
2. Fairness
Fairness and Unrelated
Unrelated Activities.-If,
Activities.-If, in a particular
particular case, local
unrelated to the litigation,
litigation, and as
as a result, regulation
regulation of inactivities are unrelated
state activities will not provide
provide a basis for jurisdiction, then why should
the activities
suffice
activities be relevant
relevant at all? Why and when should activities suffice
general jurisdiction?
jurisdiction? We address this question by first reas a basis for general
calling our paradigm
jurisdiction: domicile, place of inparadigm bases of general jurisdiction:
circumstances
corporation, and principal
principal place of business. Under what circumstances
corporation,
unrelated activities present as good a justification
justification for the assertion
assertion
would unrelated
answer
of state power as would local domicile or incorporation?
incorporation? The answer
incorporation to be
reasons given for finding domicile and incorporation
turns on the reasons
adequate bases
adequate
bases in the first place.
incorporation,
Previously, we demonstrated that domicile, place of incorporation,
and principal place of business satisfy the theoretical justifications
justifications for
for
100 A substantial quantity of unrelated activities also
jurisdiction.
100
general
may satisfy these rationales: convenience to both the plaintiff and defendant, power, and reciprocal
reciprocal benefits'and
benefits'and burdens. To the extent that
defending in one's domicile is convenient, litigating where one carries on
continuous and systematic activities is also likely to be convenient. Simiserves the plainlarly, allowing suit where the defendant is so engaged serves
tiff's convenience
convenience by providing a more definite forum; indeed, a test that
focuses on continuous and systematic activities eliminates the uncertainty of proving which of several places is the defendant's principal
place of business. Most importantly, the reciprocal benefits rationale obactivities, which implitains when the defendant carries out substantial activities,
cate the police
facilities of the state.
police powers and public facilities
of jurisdiction over a
exercise of
96-98 (finding unreasonable the exercise
99.
Kulko, 436
436 U.S. at 96-98
See, e.g.,
eg., Kulka,
99. See,
interdespite the
the state's interstate, despite
into the state,
moved their children into
former spouse moved
whose former
father whose
nonresident
nonresident father
residents).
minor residents).
welfare of minor
est in
in the welfare
est
IH(A).
subpart II(A).
supra subpart
See supra
100. See
100.
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1988
The only difference between a defendant with substantial local activities and one with a local principal place of business
business may be that the
former defendant has a more substantial connection
connection with another state
than the latter. The absolute amount of each defendant's activity may be
be
defendant actually
identical, or the former de£::ndant
actually may have a larger absolute
quantity of local contact. We should
should not treat defendants as less amenaamenain
ble to suit merely because they carry on more substantial business in
immediately below,
other states; with one possible qualification, noted immediately
the amount of activity elsewhere seems virtually irrelevant
irrelevant to any of the
convenience or fairness policies
convenience
polides underlying
underlying the imposition of general
general jurisdiction over a defendant. Thus, the due process
process clause should permit
permit
defendant reaches
general jurisdiction
jurisdiction on the basis of activities when the defendant
the quantum of local activity in which a purely local company
company typically
would engage.
A defendant's greater affiliation
affIliation with a different state is, in one circircumstance occurs
great significance. This circumstance
occurs when the decumstance, of great
fendant has the right to vote in a different state. Only domicile, not
substantial activity in a state, earns the right to vote. Because
Because political
fairness results from an opportunity
opportunity to participate
participate in political processes,
domicile indeed
indeed provides
provides a stronger basis for general jurisdiction than
carrying on substantial unrelated
unrelated activities
activities in a state, even when the abqualification, howsolute amount of activity for each is the same. This qualification,
ever, is likely to have little practical importance. Natural persons usually
do not perform substantial or continuous unrelated
unrelated activities in a state
to vote. And, of course, a corporate defendwhere they are not eligible 10
defendant cannot exert
exert political
political influence by the right to vote. Instead, they
may lobby, advertise, make
campaign contributions, and exert other
mak,:: campaign
types of political pressure
pressure where they have a substantial enough
enough stake in
in
the political process to justify
justify such activity. This decision to exert political influence,
does; not depend on whether the corporation has
influence, however, doeH
its greatest attachment
attachment to that state, but rather
of
rather on whether
whether the level of
attachment
attachment in that state exceeds
exceeds the threshold beyond which exerting
political influence
influence is profitable.
activities,
The nonunique
nonunique relationship of continuous and systematic ac1l:ivities,
therefore, satisfies the reciprocal benefits
benefits and burdens rationale
well as
rationale as ~ell
do unique
unique affiliations, with the sole exception
exception that domicile remains superior to nonunique
nonunique activities
activitie:s as a jurisdictional
jurisdictional basis for natural persons
who have no right to vote in the state in which they carry on these activities. The basic inquiry
mus: be whether
inquiry mUS1;
whether the defendant's
defendant's level of activity
relegating the defendant
defendant
rises to the level of activity of an insider, so that relegating
to the political processes
processes is fair. Such a quantum of activity is a prerequi-
742
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General
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site
site to asserting
asserting a state's
state's coercive
coercive power
power when
when the state
state cannot
cannot -justify
justify
such power
power by its
its authority
authority to regulate
regulate in-state
in-state activities.
activities. Significantly,
Significantly,
such
for purposes
purposes of general jurisdiction,
jurisdiction, the
the relevant issue is the absolute
amount
amount of activity,
activity, not
not the amount of activity relative
relative to what the defendant
fendant does outside
outside the state.
3. Interstate
Interstate and Intrastate
Intrastate Activities.-We
Activities.-We have discussed thus far
only the quantity
quantity of local contacts
contacts necessary
necessary to establish
establish general jurisdiconly
quality. Inquiry
tion and have
have left aside
aside issues of quality.
Inquiry into
into the type of activiunnecessary because
ties might seem
seem unnecessary
because the determination
determination of
of substantive
substantive
relevance
relevance exhausts
exhausts qualitative issues. But
But not all contacts
contacts unrelated
unrelated to a
suit are alike, and the
the reason
reason for the differences
differences bears
bears on the qualitative
qualitative
jurisdiction.
Predicating
underlying
the
test
for
general
distinction
distinction underlying
Predicating jurisconduct that
diction on
on certain contacts
contacts will likely
likely cause disincentives
disincentives for conduct
diction
recognizes that
gives
gives rise to such contacts. 101
WI Indeed, the relatedness
relatedness test recognizes
jurisdiction aids the state in discouraging or regulating
the availability
availability of
ofjurisdiction
regulating
conduct
actionable conduct
conduct within the state. Discouraging
Discouraging some sorts of conduct
actionable
by the imposition
imposition of jurisdiction,
jurisdiction, however, may be constitutionally
constitutionally
problematic.
problematic.
activities as a basis of general jurisdiction
Again, we can analyze
jurisdiction by
analyze activities
or
activities to the paradigm bases, domicile, incorporation,
comparing activities
incorporation, or
of
between the in-state actions of
principal
business. One difference
principal place of
ofbusiness.
difference between
locals
locals and the in-state actions
actions of outsiders is that the latter are more
interstate transactions. An outsider's
likely than the former to involve interstate
activities in the state may stem entirely from interstate activity, a fact
2 Because predicating jurisdiction
102
made relevant by the Constitution.10
predicating juris~iction
disincentives to engage in it, such jurisupon interstate conduct provides disincentives
0 3 Disinclause.'103
unconstitutional under the commerce clause.
diction may be unconstitutional
particularly problematic
centives to interstate commerce
commerce are particularly
problematic in general
general
conduct that
because they affect innocent conduct, not conduct
jurisdiction cases because
gives rise to the litigation
litigation and that the state legitimately may seek to
interstate activity may deny the exercise of
discourage. To illustrate how interstate
general jurisdiction
jurisdiction despite a large quantity of innocent, intrastate activandJurisdiction
JurisdictionofState
ofState Courts,
Courts,66 MICH. L.
& Martin,
Martin,Substantive
Substantive Interests
Interestsand
101. Cf Carrington &
101.
stifle commerce
commerce in states
states quite
that liberal long-arm statutes can stifle
(1967) (asserting that
227, 234 (1967)
forum).
distant from the forum).
cl. 3. The
The Constitution does not explicitly limit state interfer102. See U.S.
102.
U.S. CONST. art. I, § 8, cl.
interstate commerce. Early on, however, the Supreme Court found that the negative imence with interstate
commerce clause limit the scope of state power even in the absence of explicit
plications of the commerce
U.S. (9 Wheat.)
1, 9 (1824).
See Gibbons v. Ogden, 22 U.S.
Wheat.) 1,9
congressional regulation under the clause. See
(1923) (holding that the
eg., Davis v. Farmer's Co-op. Equity Co., 262 U.S. 312, 315 (1923)
103. See,
See, e.g.,
103.
railroad that maintained
state's imposition ofgeneral
of general jurisdiction over every railroad
maintained a soliciting agent in that
supra note
state was unconstitutional under the commerce clause). See generally
generally R. WEINTRAUB, supra
state
on state
state court jurisdiction).
commerce clause as a limit on
19, § 4.30 (discussing the commerce
19,
REV.
REV.
743
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ity, we turn to Helicopteros
Hall.'04
Helicopteros Nacionales
Nacionales de Colombia,
Colombia, S.A. v.
v. Hall.
104
In ruling that Texas
could
not
exercise
general
jurisdiction,
Texas
exercise
jurisdiction, the
Helicopteros gave short shrift to the defendant's contacts with
Court in Helicopteros
Texas, which included large-scale
large-scale purchases
helicopters manufactured
manufactured
purchases of helicopters
l05 Relying on Rosenberg
there.105
RosenbergBros.
CurtisBrown Co.
Co.106
Bros. v.
v. Curtis
106 for the proposition that mere purchases in the forum by a defendant do not justify
justify
10 7 the
personal jurisdiction,
Court dismissed as insignificant the defendjurisdiction,107
ant's negotiations in Texas, withdrawal
Texas bank, the
withdrawal of money from a Texas
purchase
purchase of ninety percent of its helicopter
helicopter fleet in Texas over a sevenyear period, and sending of numerous
numerous pilots and management personnel
concluded that these activities
to Texas for training.10IDS8 The
The Court concluded
activities were
not "the
kind
of
continuous
and
systematic
general
business
contacts"
"the
continuous
systematic
contacts"
required by due process to uphold general jurisdiction
jurisdiction over a foreign cor1099 Although the Helicopteros
Helicopteros Court clearly
poration.10
clearly suggested
suggested that
some contacts count for general jurisdiction while others do not, the
opinion itself offers no explicit
explicit guidance for distinguishing between
between them.
One approach would be to distinguish between intrastate and interintrastate activity should count more
state activities. A defendant's
defendant's intrastate
activityheavily towards general
general jurisdiction
jurisdiction than its purely interstate activitythat in-state activity which engages the defendant
defendant from across the state's
interstate activity
of
borders. An example
example of int,~rstate
activity would be the solicitation of
orders from out of state, whereas
whereas intrastate activity would include local
manufacturing or management.
difmanagement. This distinction helps to explain
explain the difmanufacturing
Perkins. In Perkins,
Perkins, the Court permitHelicopteros and Perkins.
ferent results of Helicopteros
exercise general
genera~i jurisdiction
corporation
ted Ohio to exercise
jurisdiction over a Philippine
Philippine corporation
whose forum contacts consisted of directors'
meetings,
business
corredirectors'
salaries, and the general
general
spondence, banking, stock transfers,
transfers, payment of salaries,
management of the corporation's
corporation's wartime activities by its Ohio-based
Ohio-based
management
10 Unlike those
president.'110
Perkins, the contacts in Helicopteros
Helicopteros were
in Perkins,
president.
1 This distinction
intrastate transactions.
not primarily
primarily the result of intrastate
transactions.1111
be(1984).
104. 466 U.S. 408 (1984).
105.
105. See id.
id. at 423-24 (Brennan,
(Brennan, J., dissenting).
106.
(1923).
106. 260 U.S. 516 (1923).
107. See Helicopteros,
Helicopteros,466
466 U.S. at 418.
108. See id.
id. at 423-24 (Brennan,
(Brennan, J., dissenting).
109.
also International
109. Id.
[d. at 416 (emphasis
(emphasis added); see
5ee also
International Shoe Co. v. Washington, 326 U.S. 310,
(1945) (stating that the "quality
"quality and nature of the activity in relation to the fair and orderly
319 (1945)
laws" is an important concern in considering
considering whether
administration of the laws"
whether the court has general
general
jurisdiction).
(1952).
110. Perkins
Perkins v. Benguet
Benguet Consol. Mining
Mining Co., 342 U.S. 437, 447-48 (1952).
111.
Ill. See Helicopteros,
Helicopteros, 466 U.S. at 410. Technically,
Technically, the contacts in Helicopteros
Helicopteros were international rather than interstate: the defendant
defendant was a Colombian
Colombian corporation that performed
performed all its
services,
not affect,
services, helicopter transportation,
transportation, in South America. See id. at 409-10. This
This fact should
should 1I0t
however, the analysis under
dormant commerce
commerce clause. The clause expressly applies to "Com"Comunder the dormz.nt
merce
"among the several States."
States." U.S. CONsT.
merce with foreign Nations"
Nations" as well as
al; commerce "among
CONST. art. I,
744
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General Jurisdiction
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tween interstate and intrastate
intrastate contacts also explains the otherwise peculiar suggestion, in other cases, that mere solicitation does not constitute
12
doing business and cannot in itself establish
establish jurisdiction.'
jurisdiction. I 12
justification for an interstate-intrastate
The justification
interstate-intrastate distinction appears
appears in
in
113 Two strands of theory underlie
dormant commerce
commerce clause
clause doctrine. 113
14 one focuses
this doctrine:1114
on the protection of free trade between
between the
115
states,
and
the
other
concentrates
discrimination
states,115
concentrates on preventing
preventing state discrimination
16 Courts reviewing
against interstate
interstate trade.1116
reviewing state action under the free
trade strand
strand generally
generally assess the extent of the burden imposed on interstate commerce
commerce and then balance
balance state and national interests against that
1 7 If both the
burden. 117
burden and the national interest favoring unrestricted commerce
commerce are large, the state action will be struck down as an
undue burden on interstate
interstate commerce, unless a countervailing
countervailing state inter18
prevails.'us
est prevails.
commerce clause
Arguably this free trade strand of the dormant commerce
doctrine supports the distinction between
between interstate
interstate and intrastate
intrastate activjurisdiction analysis. Imposing
ity in general jurisdiction
Imposing general jurisdiction
jurisdiction over a
foreign corporation
corporation engaged only in interstate activity may constitute a
burden on interstate
interstate commerce. Such jurisdiction raises the cost of en§ 8,
8, cl. 1.
I. Apparently, most dormant commerce clause
clause cases address state restrictions
restrictions on interstate
commerce. Nonetheless,
differentiating between
international and interstate
between international
interstate
Nonetheless, there is no reason for differentiating
activity in this context. Consequently, we will treat situations involving international contacts as
raising the
same dormant
dormant commerce
commerce clause issues as interstate contacts
contacts and will use interstate to
raising
the same
refer to both
both types of contacts.
112.
Tobacco Co., 246 U.S. 79, 87 (1918)
(1918) (stating
112. See,
See. e.g.,
e.g., People's Tobacco Co. v. American
American Tobacco
that acts
acts of
agents without
of agents
without authority beyond
beyond solicitation
solicitation are not sufficient
sufficient to constitute
constitute doing busithat
jurisdiction); Barcelona
Barcelona Hotel, Ltd. v. Mahoney
Mahoney Hadlow
Hadlow &
& Adams, 82 A.D.2d
ness for purposes of jurisdiction);
790, 791, 440 N.Y.S.2d
(1981) (finding that a law firm whose only contact
790,791,440
N.Y.S.2d 660, 661 (1981)
contact was mail and
and
"continuous, systematic and regular" presence).
telephone transactions did not have a "continuous,
113. The dormant power
113.
power to regulate interstate commerce
commerce lies exclusively
exclusively in Congress. See Gib1, 9 (1824).
"the power
(1824). The Supreme Court first referred
referred to "the
power to
to
bons v. Ogden, 22 U.S. (9 Wheat.) 1,
commerce in its dormant state" in Wilson v. Black Bird Creek Marsh
Marsh Co., 27 U.S. (2 Pet.)
regulate commerce
245, 252 (1829).
(1829). See generally
generally L. TRIBE, AMERICAN
AMERICAN CONSTITUTIONAL
1988)
245,252
CONSTITUTIONAL LAW § 6-2 (2d ed. 1988)
(discussing "implied
"implied rather than expressed"
expressed" constitutional
constitutional limitations
limitations on states under the commerce
commerce
clause).
114. For a general discussion of the two strands of theory that underlie the dormant commerce
clause,
Laying the Dormant
Commerce Clause
Clause To Rest, 91 YALE
YALE L.J. 425, 439-41 (1982);
Dormant Commerce
(1982);
clause, see Eule, Laying
Tushnet,
Rethinking the Dormant
Clause, 1979
1979 Wis.
REv. 125, 130-31.
130-31.
Dormant Commerce Clause,
WIS. L. REV.
Tushnet, Rethinking
115. See.
See, e.g.,
(1959) (invalidating
(invalidating Illinois
e.g., Bibb v. Navajo
Navajo Freight Lines, 359 U.S. 520, 527-29 (1959)
Il1inois
statute
because it
"a great
of delay
delay and
and inconvenience"
statute because
it placed
placed "a
great burden
burden of
inconvenience" on
on interstate truck lines by
making
innovative
making equipment
equipment illegal
illegal that
that was legal in 45 other states and requiring installation
installation of innovative
equipment).
equipment).
116.
See, e.g.,
U.S. 322, 336-38
(1979) (articulating a three-part test
116. See.
e.g., Hughes v. Oklahoma, 441 U.s.
336-38 (1979)
that
includes determining
whether the
challenged statute
"discriminates against
that includes
determining whether
the challenged
statute "discriminates
against interstate commerce
commerce
either
either on its face or in practical
practical effect").
117.
See, e.g.,
Southern Pac. Co. v. Arizona, 325 U.S. 761, 779 (1945)
(1945) (finding that a "slight and
117. See.
e.g., Southern
and
dubious"
safety advantage
of a state law limiting the number
number of railroad cars
cars in a train does not
dubious" safety
advantage of
counterbalance
the harm to interstate commerce).
counterbalance the
id.
118. See id.
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gaging in interstate business by requiring the corporate defendant to litigate claims
claims unrelated to its forum activities
activities in distant and perhaps
unpredictable forums, where it possibly will be subject to local
local law. Inunpredictable
deed, in several
several older cases, courts
l~ourtS invalidated assertions
assertions of jurisdiction
jurisdiction
119
on commerce
commerce clause grounds. 119
In contrast, if a corporation engages only in a large amount of intrastate activity, general jurisdiction over it may impose little burden on
"home" forum not only will be predictinterstate commerce. Suit in a "home"
able, but also should not overly tax the resources
resources of the foreign corporation, which presumably
presumably will be familiar with local law and can retain
local counsel more easily. Moreover,
Moreover, allowing jurisdiction
jurisdiction will not
threaten the national
national interest
interest in free trade because any burden derives
120
constitutionally protected.
intrastate activities, which are not constitutionally
from intrastate
protected. 120
The discrimination
discrimination strand of the dormant commerce
commerce clause doctrine
also offers support for distinguishing interstate
interstate and intrastate
intrastate contacts.
Discriminatory
state
treatment
of
interstate
commerce
interstate commerce is invalid because
because
Discriminatory
"legislative
action
is
not
likely
to
be
"legislative action is not likely to be subjected
subjected to those political restraints
which are normally exerted on legislation
legislation where it affects
affects adversely some
12
- This standard will invalidate
state."12~
invalidate state action
interests within the state."
of
that has the discriminatory
discriminatory effect of favoring insiders at the expense
expense of
122
122
minimal.
is
trade
free
burden on
outsiders, even when the bUl'den
on free trade is miuimal.
Of course, imposing general jurisdiction
jurisdiction on the basis of continuous
continuous
and systematic activities is not discriminatory on its face; both outsiders
v.Mix, 278 U.S. 492, 495 (1929);
(1929); Atchison, Topeka
& Santa
119. See, e.g.,
e.g., Michigan
Michigan Cent. Ry. \".
Topeka &
Santa
Fe Ry.
Ry. v.
v. Wells,
265 U.S.
101, 103
103 (1924);
(1924); Davis
Davis v.
v. Farmers
Co-op. Equity
315
Fe
Wells, 265
U.S. 101,
Farmers Co-op.
Equity Co., 262 U.S. 312,
312, 315
(1923).
(1923).
AND LOCAL TAXATION
120. See J. HELLERSTEIN &
& W. HELLERSTEIN,
HELLERSTEIN, STATE AND
TAXATION 303 (1978)
(1978) (defining interstate
interstate commerce). The Court has drawn
drawn on the interstate-intrastate
interstate-intrastate distinction in passing
the constitutionality
constitutionality of
on the
of state
which bar foreign
foreign corporations
corporations that
that have
have not
not
on
state door-closing
door-closing statutes,
statutes, which
qualified to conduct intrastate business from litigating in local courts. In Allenberg Cotton Co. v.
Pittman, 419 U.S. 20, 31-34 (1974),
commerce clause does not allow a state
Pittman,
(1974), the Court held that the commerce
to deny
deny access to its courts if the plaint:ff
& Co. v. SavSayto
plaintff is litigating an interstate
interstate claim. In Eli Lilly &
On-Drugs, Inc.,
Inc., 366
U.S. 276,
276, 283-84
283-84 (1961),
(1961), however,
permitted such
when the
On-Drugs,
366 U.S.
however, the
the Court
Court permitted
such aa bar
bar when
the
foreign corporation's
also Note, AA Proposed
ProposedMinimum Threshold
Threshold
foreign
corporation's claim was intrastate in nature. See also
Imposition of State Door-Closing
Analysis for
Statutes, 51 FORDHAM
FORDHAM L. REV.
REV. 1360. 1365-73
1365-73
for the Imposition
D.,or-Closing Statutes,
(1983) (proposing
(proposing aa uniform
contacts to permit an unqualified corporate
(1983)
uniform minimum threshold of contacts
plaintiff to
to sue in
in a state
state court on an interstate claim).
plaintiff
121.
v. Barnwell
Barnwell Bros.,
185 n.2 (1938).
121. South Carolina State Highway
Highway Dep't v.
Bros., 303 U.S. 177, 185
(1938). But
see CTS Corp. v. Dynamics Corp. of Am., 107 S.
(1987) (finding that the the mere
S. Ct. 1637, 1648-49 (1987)
not establish
regulation falls on some interstate companies
companies does lIot
fact that some of the burden of state regulation
discrimination).
122.
(1978). The Supreme Court
122. See City of Philadelphia v.
v. New Jersey, 437 U.S. 617, 626-27 (1978).
has
various meanings
meanings to
to the
the term
term "discrimination."
See G.
G. GUNTHER, CONSTITUTIONAL
CONSTITUTIONAL
has given
given various
"discrimination." See
276 (1
lth ed.
ed. 1985).
1985). For
For example, whereas City ofPhiladelphia
of Philadelphiaconcerned
concerned a state law that was
LAW 276
(11th
enacted for an illegitimate
discriminatory on its face, presumptively enacted
illegitimate purpose, 437 U.S. at 627, the
v. Madison, 34')
340 U.S. 349 (1951),
(1951), invalidated
was discrimCourt in Dean Milk Co.
Co. v.
invalidated an ordinance
ordinance that wa~
inatory
in its
its effect,
effect, although
noted the law's legitimate purpose, see id.
id. at 354-56.
inatory only
only in
although it n'Jted
746
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General
General Jurisdiction
and insiders are subject to it. In application, however, the burden of
of
expansive
expansive general jurisdiction falls entirely on the shoulders of the outsider. Assume, for example, that state A counts interstate activity in its
minimum
minimum contacts analysis for general jurisdiction. Insider Corporation
Corporation
is not concerned
concerned with A's aggressiveness
aggressiveness because
because it will be subject to general jurisdiction in A even under the most conservative
conservative jurisdictional
jurisdictional
standards.
standards. But Outsider Corporation now must answer not only to unrelated claims in states where it is a true insider, but also to unrelated
unrelated
claims in A,
A, where
where it is an outsider. Assuming
Assuming that their businesses are
equal
equal in size and distribution throughout the country, Outsider Corporation is subject to one more forum of general jurisdiction
jurisdiction than Insider
Insider
2 3 Not only is
Corporation
Corporation solely because A counts interstate contacts.1123
Outsider
Outsider Corporation
Corporation less politically able than insiders
insiders to change this
situation, but the local government will have incentive to continue this
practice
practice because it will give insider businesses a competitive edge over
outsiders
outsiders that exclusively bear the costs of the extra forum of general
general
jurisdiction.
jurisdiction. Furthermore, the practice provides a boon to the local bar,
124
politics.124
local politics.
a group that is hardly without influence in
in local
Thus, courts should weigh a defendant's
defendant's intrastate contacts
contacts more
heavily
and
should
discount
purely
interstate
activity
in
determining
heavily
should
interstate
whether
to
exercise
general
whether
general jurisdiction. The Perkins
Perkins Court upheld general jurisdiction
intrastate activity
jurisdiction over a defendant engaging in extensive intrastate
2 5 In
that amounted to the management
management of the company
company in the forum.112s
Helicopteros,
Helicopteros, on the other hand, the Court denied the state's exercise of
of
general
jurisdiction
over
a
defendant
whose
general jurisdiction
defendant
intrastate activity-negotiations and pilot and management
training-was far from substantial
management training-was
substantial and
and
could
defendant's large-scale
could not be counted
counted with the defendant's
large-scale interstate
interstate and in126
ternational
activity-purchases of helicopters. 126
ternational activity-purchases
At least one court has
refused
to
exercise
general
jurisdiction
over
a
defendant
whose forum
refused
general jurisdiction
contacts
Mart,Inc.
Inc. v.v. Haas
Haas InternaInternacontacts were wholly interstate. In Lumber Mart,
tional
Sales &
& Service,
Service, Inc., the North Dakota Supreme Court denied the
tional Sales
exercise of jurisdiction because the unrelated forum contacts included
only interstate commerce
commerce activity, namely, registering with a regulatory
27 But
department
and
obtaining a trip permit.1127
another court has exdepartment
(1938) (prohibiting
123. Cf
CJ. Western
Western Live Stock v. Bureau of Revenue, 303
303 U.S. 250, 256 (l938)
(prohibiting the
taxation of interstate
commerce to "cumulative
interstate commerce when it subjects such commerce
"cumulative burdens
burdens not imcommerce").
posed on local commerce").
& Miller, supra
supranote
124. Cf
CJ. Macey
Macey &
note 56, at 506-09 (describing
(describing the power of the Delaware
Delaware bar as a
political interest group influencing
influencing Delaware
Delaware corporate law).
(1952).
125. See Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 448 (1952).
126. See Helicopteros
Helicopteros Nacionales
Nacionales de Colombia, S.A. v. Hall, 466
466 U.S. 408, 416 (1984).
(1st
127. 269 N.W.2d 83,
83, 89 (N.D. 1978); see also Glater
Glater v. Eli Lilly &
& Co., 744 F.2d 213,
213, 217 (lst
747
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Vol.
tended general jurisdiction
corporations whose
jurisdiction over foreign corporations
whose forum contacts were interstate in nature.
Chelsea Industries,
Quaker Oats
Oats Co.
Co. v. Chelsea
Industries,
natur·e. In Quaker
Inc., the district court exerted general jurisdiction
whose
jurisdiction over defendants
defendants.whose
only contacts
contacts were periodic :~ales
sales of food products to Illinois
companies
lllinois
128
three-year period. 128
Exercising such jurisdiction
jurisdiction ignores the disover a three-year
criminatory and burdensome
burdensome impact
criminatory
impact on interstate
interstate trade that results when
interstate contacts are the sole basis for general jurisdiction.
interstate
C.
C.
Transient Jurisdiction
Transient
Jurisdiction
129
Transient jurisdiction 129
presents an unresolved
unresolved question of due process: Does an individual's
mere
presence
individual's
presence in the state for service of process constitute sufficient contact
contact to confer on the state power to
individual
adjudicate? The issue predominantly arises in the context of individual
corporate defendants
defendants because a corporation does not have a
rather than corporate
is unable to move about. Yet the presence
presence of
tangible existence and thus i8
a corporate
employee
acting
as
agent
in
the
forum
arguably
constitutes
corporate
employee's mere presence
the presence of the corporation. A corporate
corporate employee's
necessarily indicate the representation
of
representation of
in the forum, however, does not necessarily
the corporation, and at least;
leasl; two lower courts have held that transient
transient
inappropriate basis for jurisdiction
jurisdiction over corporate
presence may be an inappropriate
130
defendants. 130
however, the Supreme
Pennoyer v. Neff
For individuals, howev,er,
Supreme Court in Pennoyer
enshrined the principle that a state has the power to assert jurisdiction
jurisdiction
l3l
state.131
in the
while in
over individuals solely because
because they were served while
the state.
Pennoyer's
Pennoyer's rationale
rationale was simple: a state has complete authority over per-
v.
Cir. 1984) (stating that interstate sales to wholesale distributors and employment
employment of sales representageneral jurisdiction).
tives to solicit business in forum were insufficient to establish general
Ill. 1980);
also Huffman v. Inland Oil &
128. See 496 F. Supp. 85, 88
88 (N.D.
(N.D. III.
1980); see also
& Transp. Co., 98
Ill.
1017, 424 N.E.2d
III. App. 3d 1010, 1017,424
N.E.2d 1209, 1215 (1981)
(1981) (finding that a "regular pattern of commerce
and transportation by [the defendant]
waterways of the State"
State" was
defendant] throughout
throughout the waterways
was an adequate
nexus for general jurisdiction).
129.
"transient jurisdiction"
jurisdiction" refers
129. The term "transient
refers to jurisdiction over persons temporarily present in
the forum. See R. WEINTRAUB,
19, § 4.10.
WEINTRAUB, supra
supra note 19,
130. See, e.g., Amusement
Amusement Equip., Inc.
Inc. v. Mordelt, 779 F.2d 264, 271 (5th Cir. 1985) (remarking
defendant employee
employee had visited the forum in a purely personal
that the case was not one in which the defendant
capacity); Harold M. Pitman Co. v. Typecraft Software Ltd., 626 F.
F. Supp. 305, 312 (N.D.
1986)
(N.D. Ill.
III. 1986)
"mere service of process upon
(stating that "mere
upon a defendant transiently
transiently present in the jurisdiction
jurisdiction does
jurisdiction over the defendant");
also 4 C. WRIGHT &
not vest a state with personal jurisdiction
defendant"); see also
& A. MILLER,
MILLER,
FEDERAL PRACTICE AND PROCEDURE
PROCEDURE § 1067, at 251-53
251-53 (2d ed. 1987) (stating that courts
courts gradually
gradually
have recognized
recognized that the casual
casual presence of a corporate agent
agent in a state is insufficient to subject a
corporation to suit there on claims unconnected
unconnected to the corporation's activities there).
there). But see
Commercial Assoc., 89 F.R.D. 326, 328 (S.D.N.Y.
(S.D.N.Y. 1980)
Aluminal Indus. v. Newtown
Newtown Commercial
1980) (finding
sufficient
sufficient evidence to support jurisdiction
jurisdiction over the defendant's managing
managing partner while in transit at
at
the airport).
131.
131. 95 U.S.
U.S. 714, 722
722 (1878).
(1878).
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General Jurisdiction
132
The more modem
modern focus on defendsons and things within its borders. 132
naked
ants' rights, however, casts doubt upon the propriety of such naked
133
territorial
territorial assertions of jurisdiction. 133
Increasingly, the Supreme Court
34
has emphasized that assertions
jurisdiction must be fair'
fair 134
and that
assertions of jurisdiction
defendants
must
be
able
to
predict
when
their
behavior
might
result in
in
defendants
predict when
1
35
their being subject to suit in a particular
particular forum. 135 Indeed, the Pennoyer
notion that state power extends to all defendants physically
physically within the
perished in Shaffer v.v. Heitner,
Heitner, in which the Supreme
forum may have perished
jurisdiction must satisfy the stanCourt held that all assertions of state jurisdiction
dard of fairness based on minimum contacts set forth in International
International
136
Shoe. 136
We begin our analysis by examining the past of transient jurisdiction. Then, we assess its current legal vitality and conclude
conclude by evaluating the current justifications for the doctrine,
doctrine.
L
Transient Jurisdiction.-Before
1. The Past
Past of Transient
Jurisdiction.-Before the advent of modem
ern transportation, when
when traveling was difficult and ties between jurisdictions were attenuated, courts justifiably were concerned
concerned that defendants
could evade suit by avoiding forums in which potential plaintiffs
plaintiffs resided.
Early American jurisdictional
a-rejurisdictional theory developed at least in part as a'response to this problem. An early Massachusetts
Massachusetts opinion concludes:
A debtor coming here merely for the purpose of embarking may
may be
detained several
several months before he procures a passage;
passage; he may have
all his effects about him; and he may never return to the place
where he transacted
cannot
take him
transacted his business. If the creditor cannot
137
debt. 137
here, he may lose his chance of securing his
his debt.
Theoretical notions of sovereignty
sovereignty exacerbated
exacerbated the practical
Theoretical
practical
problems associated
someone outside
associated with obtaining
obtaining jurisdiction against someone
a forum. Nations had absolute authority over persons and things
things within
territory. 138
their
outside
things
and
persons
their borders but none over
over persons
outside their territory.138
The American federal system incorporated
incorporated a theory of state sovereignty
sovereignty
that paralleled
paralleled Locke's theory of sovereignty
sovereignty of independent nations.
Locke concluded that an individual's very presence "within
"within the territo139
government. 139
obey the
government" obligated that person to
ries of [a]
[aJ government"
to obey
the government.
id.
132. See id.
See, e.g.,
e.g., International
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
133. See.
(1945) (focusing
(focusing on
whether
corporate defendant
whether the corporate
defendant has minimum contacts with the forum so that maintenance
maintenance of the
suit is fair and just).
134. See,
e.g., Shaffer v. Heitner, 433 U.S. 186, 212 (1977).
(1977).
See. e.g.,
135. See World-Wide Volkswagen
Volkswagen v. Woodson, 444 U.S. 286, 297 (1980).
(1980).
136. See Shaffer, 433 U.S. at 212.
212.
Benjamin, 15 Mass.
137. Barrell
Barrell v. Benjamin,
Mass. 354, 358 (1819).
(1819).
138. See Pennoyer
Pennoyer v. Neff, 95 U.S. 714, 726-27 (1878).
(1878).
J. LOCKE,
GOVERNMENT §§ 119,
(T. Cook ed.
139. J.
LOCKE, THE SECOND
SECOND TREATISE
TREATISE OF
OF CIVIL GOVERNMENT
119, at 181-82 (T.
1947).
1947).
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Vol. 66:721,
66:721, 1988
The Supreme
Supreme Court in Pennoyer
Pemloyer accepted the view that the American
American
states
"exercise the authority
independent States,"
States," and concluded
authority of independent
concluded that
states "exercise
"every State
State possesses
"every
possesses exclusive
exclusive jurisdiction
jurisdiction and
and sovereignty
sovereignty over persons
14°
and property
property within its territory."'
territory."I40
The development
development of transient
transient jurisdiction
jurisdiction after Pennoyer
Pennoyer revealed
141
the conflation
conflation of notice to the defendant
defendant with power to
to adjudicate.
adjudicate. 141
Initially, the rule in Pennoyer
Pennoyer sought to protect defendants from suits
liapotentialliabrought in states where they were unlikely to hear of their potential
bility.' 42 Concern with due process
process requirements led the Pennoyer
Pennoyer Court
bility.142
providing constructive
to invalidate
invalidate Oregon's
Oregon's practice
practice of providing
constructive notice to non143
resident defendants who owned property
Transient jurisproperty in Oregon. 143
diction worked a nice balance between
notions
of
state
sovereignty
sovereignty and
between
defendant had received notice
individual rights, because
because it ensured that a defendant
of the suit, and at the same time it allowed the state to exercise its tradiPentional authority over those present within its borders. Hence, after Pennoyer,'4 courts regularly
regularly upheld a forum's power over individuals on the
noyer,l44
145
served. 14S
when served.
sole basis of the person's presence in the forum when
2.
TransientJurisdiction's
CurrentStatus.-The
Status.-The key
2. Transient
Jurisdiction's Current
key to the current
current
legal status of transient jurisdiction
rests
with
the
holdings
of
Internajuriisdiction
Interna46 and
47 In International Shoe Co.
Co. v.v. Washington
Washington 1
International
146
Shaffer v. Heitner.
Heitner. 147
140. 95 U.S. at 722.
141. Courts have read
Pennoyeras
as evaluating state power to adjudicate
141.
read Pennoyer
adjudicate in terms of the reliability
See, e.g.,
eg., Milliken
457,463
of notice
notice to defendant.
defendant. See.
Milliken v. Meyer, 311 U.S. 457,
463 (1940)
(1940) (expanding the bases of
jurisdiction acceptable
acceptable under Pennoyer
Pennoyer in light of more efficient means of providing constructive
constructive
notice).
142.
from.Pennoyer's
142. This protection derived from
Pennoyer's requirement of presence within the territorial
territorial juris"encroachment
diction of the court. See 95 U.S. at 733.
7:13. The
The Pennoyer
Pennoyer rule also sought to prevent "encroachment
independence of the state" te·
to exercise its sovereignty
upon the independence
sovereignty over the defendant,
defendant, when
when the defenddefendant or his property was present within
id. at 723.
within the state's borders. See id.
143. See id.
id. at 726.
144. Commentators disagree on the extent to which Pennoyer
Pennoyer created transient
transient jurisdiction in
Compare Ehrenzweig,
Ehrenzweig, The Transient
Transient Rule of Personal
"Power" Myth
Personal Jurisdiction:
Jurisdiction: The "Power"
America. Compare
andForum
Conveniens, 65 YALE L.J. 289, 292 (1956)
(1956) (finding little support for the doctrine
and
Forum Conveniens,
doctrine in the
and the
common law before Pennoyer)
Pennoyer) with Werner, Dropping
Dropping the Other Shoe: Shaffer v. Heitner and
Demise of
Presence-OrientedJurisdiction,
Jurisdiction,45 BROOKLYN
REv. 565,
ofPresence-Oriented
BROOKLYN L. REV.
565, 572 (1979)
(1979) (claiming that state
courts adopted the English concept of presence-oriented
presence-oriented jurisdiction
jurisdiction early in the nineteenth century).
145. See,
eg., Donald
Cir. 1976)
1976) (upholdingjurisdic(upholding jurisdicSee. e.g.,
Donald Manter
Manter Co. v. Davis, 543 F.2d 419, 420 (st
Ost Cir.
170 F. Supp.
tion over defendant
defendant served
served while in forum on unrelated
unrelated business); Grace
Grace v. MacArthur, 170
442, 447 (E.D. Ark. 1959) (upholding jurisdiction
jurisdiction over defendant served while flying over forum);
F. 234, 237 (E.D. Ark. 1918) (upholding
Fitzhugh v. Reid, 252 F.
(upholding jurisdiction
jurisdiction over defendant served
served
while in forum for medical treatment);
(1903)
treatment); Lee v. Baird, 139 Ala. 526, 528, 36 So. 720, 720 (1903)
(upholding jurisdiction over defendant:
defendant served
& Co.
served while traveling
traveling through forum); Fisher, Brown &
"14, 715 (1895)
(1895) (upholding jurisdiction
defendant served
v. Fielding, 67 Conn. 91,
91, 104, 34 A. "14,
jurisdiction over defendant
served
119
while in forum on business unrelated
unrelated to cause
cause of action); Nielsen
Nielsen v. Braland,
Braland, 264 Minn. 481,484,
481, 484, 119
(1963) (same).
N.W.2d 737, 739 (1963)
146.
(1945).
146. 326 U.S. 310 (1945).
147. 433 U.S. 186 (1977).
(1977).
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tional
in
tional Shoe, the Supreme Court imposed a minimum contacts test for in
148
148
It also suggested, however, that presence repersonam jurisdiction.
mained an alternate
alternate basis for jurisdiction:
[D]ue process requires only that in order to subject a defendant to
if he be not present
territory of
personam, if
present within the territory
of
a judgment in personam,
the forum,
forum, he have certain minimum contacts
contacts with it such that the
maintenance
"traditional notions of fair
offend "traditional
maintenance of the suit does 'not
14 9
play and substantial justice."
justice."149
The phrasing
notwithstanding the new minimum contacts
phrasing suggests that notwithstanding
approach, the International
International Shoe Court approved transient
transient
approach,
ISO
jurisdiction. 150
Some years later, the Court appeared to reassert both transient jurisdiction and the state's absolute power over persons served within its bor5 1 Obeying an interstate
O'Neill.1
lSI
Obeying
interstate agreement, Florida
ders in New York v. O'Neill.
authorities transported O'Neill, a nonresident, to New York to appear
appear as
IS2 O'Neill objected
objected
a witness in a criminal proceeding taking place there. 152
and the Florida Supreme
Supreme Court agreed that the state lacked
lacked power to
order a nonresident
nonresident to perform acts outside Florida. The United
United States
"IT]he Florida
Supreme Court, without a single citation, reversed:
reversed: "[T]he
of
courts had immediate personal
personal jurisdiction
jurisdiction over respondent
respondent by virtue of
State."' 15 3 O'Neill's presence
"gave the Florida
his presence within that State."IS3
presence "gave
Courts constitutional
constitutional jurisdiction
jurisdiction to order an act even though that act is
State."' 154
outside
to be performed outside of the State."IS4
Shaffer v. Heitner,
InternationalShoe, emphasized fundamental
Heitner, like International
55 Commentators
jurisdictional due process. ISS
fairness as the core of
ofjurisdictional
Commentators were
interpret Shaffer's
extension
of
minimum
contacts
to all bases of
of
quick to interpret
Shaffer's extension
of
jurisdiction as the death knell of transient
transient jurisdiction. Representative of
the general trend is the view of Professor Werner:
[Transient jurisdiction]
[Transient
jurisdiction] can find no support, however, in the post'catch as catch
Shaffer world ofjurisdiction....
ofjurisdiction.... In my opinion, the 'catch
catch
can' theory of in personam jurisdiction, based upon the unrelated
presence of a defendant within the forum state, is, and
physical presence
attachment basis of
should be, entombed along with the attachment
148.
148. 326 U.S. at 316.
149.
149. Id.
Id. (quoting Milliken v. Meyer, 311
311 U.S. 457, 463 (1940))
(1940» (emphasis
(emphasis added).
150. According to one recent decision, this exception in International
International Shoe "foreclosed
"foreclosed judicial
reconsideration" of transient jurisdiction
of U.S.A.,
jurisdiction until Shaffer.
Shaffer. Nehemiah v. Athletics Congress (of
reconsideration"
1985).
765 F.2d 42, 47 (3d Cir. 1985).
151.
151. 359 U.S. 1 (1959).
(1959).
152. Florida invoked
or
invoked its Uniform Statute To Secure the Attendance of Witnesses from Within or
Without the State in Criminal Proceedings to justify
justify transporting O'Neill to New York. O'Neill, a
id. at 3.
nonresident of Florida, was there for a convention. See id.
153.
153. Id. at 8-9.
154. Id.
Id. at 9.
155.
(1977).
155. See 433 U.S. 186,
186, 212 (1977).
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156
jurisdiction. 156
The proposed revisions to the Restatement (Second)
(Second) of Conflict
Conflict of Laws
57
presence.1
mere
of
sufficiency
the
likewise cast doubt on
sufficiency of mere presence. I57
The relevance of Shaffer to transient jurisdiction, however, is not at
all clear, given O'Neill's
O'Neill's indication
indication that transient presence remained a
valid basis ofjurisdiction
of jurisdiction after
InternationalShoe. Shaffer arguably
afl:er International
arguabiy only
extended
extended in personam standards to jurisdiction
jurisdiction based on property. Justice Stevens, concurring in Shaffer,
Shaffer, suggested that transient presence in a
forum may satisfy International
International Shoe's minimum contacts
contacts standard.
Basing his analysis
analysis on notice to the defendant, Stevens's definition of nofiling of a particular suit;
tice included more than mere notification of the fIling
notice meant that an individual
individual could foresee that certain conduct might
subject one to jurisdiction.
5s At least one current Justice, then, seems
jurisdiction. 15s
seems
willing to accept
accept transient jurisdiction on the grounds that it meets InterInternational Shoe's notice-based
national
notice-based analysis of due process. Various lower
lower
I59
persuasive. 159
courts have found the notice
notiee reasoning persuasive.
3. Current
Current Justifications
Transient Jurisdiction.-Against
Justificati'Jns for Transient
Jurisdiction.-Against this
uncertain and contradictory
contradictory case
case law, a return to first princibackdrop of uncertain
ples is in order. Transient jurisdiction is comparable
of
comparable to other forms of
general jurisdiction in several ways. First, the state cannot justify this
authority in terms of its power to effectuate
assertion of adjudicatory
adjudicatory a.uthority
substantive interests. Like most general jurisdiction cases, the
local substantive
transient jurisdiction
jurisdiction case is not related
related to forum
cause of action in a transient
activities; therefore, the litigation is not a means
of
regulating
means regulating local conactivity to which the
duct. Innocent transit through the state is not an activity
state reasonably
reasonably can object.
& A. MILLER, supra
supra note 130,
156. Werner, supra
supra note 144, at 589; see also 4 C. WRIGHT &
15 (suggesting
§ 1064, at 232 n.
n.15
(suggesting that Shaffer may undercut transient
transient jurisdiction,
jurisdiction, at least for
f,3r in rem
and quasi
in rem
rem cases);
cases); Bernstine,
Warrantfor the Transient
ofIn
and
quasi in
Bernstine, Shaffer
Sllaffer v. Heitner: A Death
Death Warrantfor
Transient Rule ofIn
Personam
"there is
Personam Jurisdiction?,
Jurisdiction?, 25 VILL. L. REv.
REV. 38, 61 (1979)
(1979) (asserting that in light of Shaffer "there
is
little need
An
need for the 'catch-as-catch-can'
'catch-as-catch-can' attitude which justifies the transient
transient rule"). But see Glen, An
"Mere Presence" and
and Oth('r
Other Traditional
TraditionalBases
Bases of
Jurisdiction,45 BROOKLYN
Analysis of "Mere
ofJurisdiction,
BROOKLYN L. REV. 607,
611 (1979)
(1979) (contending that transient
transient jurisdiction
jurisdiction is appropriate if an individual entered
entered a forum
forum
purposefully).
157.
OF LAWS §§ 16, 17,28
17, 28 (proposed
(Proposed Revisions 1986).
157. RESTATEMENT (SECOND)
(SECOND) OF CONFLICT
CONFLlCTOF
158. Stevens described
described his idea cf notice as follows:
The requirement of fair notice also, I believe,
believe, includes fair warning that a particular activity may
ity
may subject
subject a person to the jurisdiction
jurisdiction of a foreign sovereign. If I visit another State
...II knowingly
knowingly assume some rink
risk that the State will exercise its power
...my person
...
power over ...
person
while there.
there. My contact
tIe State, though
while
contact with the
though minimal, gives rise to predictable risks.
433 U.S. at 218 (Stevens, J., concuning).
159.
159. See,
See, e.g.,
e.g., Amusement Equip.,
Equip., Inc. v. Mordelt, 779 F.2d 264, 270 (5th Cir. 1985) (stating
sufficient for due process);
that notice of suit is sufficient
process); Leab v. Streit, 584 F. Supp. 748, 756 (S.D.N.Y. 1984)
1984)
(emphasizing that defendant received
received notice adequate for due process requirements).
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Jurisdiction
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160 casts
The constitutional protection
protection afforded innocent transit 160
further doubt on the validity of transient jurisdiction.
jurisdiction. A state may not discourage nonresidents from exercising
exercising their simple right to travel into the
state, 16 1 particularly
state,161
particularly when the state can point to no cognizable substantive interest justifying imposition of the burden. In addition, many states
circumstances imposition of jurisdichave recognized
recognized that under certain
certain circumstances
conduct upon
burdensome and may deter the conduct
tion on nonresidents
nonresidents is burdensome
predicated. For instance, courts typically grant immunity
which it is predicated.
from process for nonresident
nonresident witnesses, so as not to discourage
discourage them
1
62
from appearing voluntarily
testify.162 Admittedly, the state voluntavoluntarily to testify.
rily grants this immunity; the due process clause does not require
require special
163
treatment
as witnesses.
witnesses. 163
treatment for those appearing as
Other justifications
justifications for transient
transient jurisdiction
jurisdiction are equally
equally problematic. The argument that service within the state assures notice of suit
appears to justify transient jurisdiction,
jurisdiction, but notice alone cannot establish
establish
jurisdiction.164
establish
jurisdiction. l64 Furthermore, mere entry into a state should not establish
notice that defendants may be served with process. The forum could as
property in the state alerts deeasily determine that ownership of real property
fendants that they may be subject to suit on unrelated
unrelated claims,
claims, yet Shaffer
65
v.v. Heitner
Heitner prohibits such assertions of jurisdiction.
jurisdiction.165
Moreover,
Moreover, if notice of the suit is the goal, other means can accomplish this end; service of process need not coincide
coincide with the defendant's
defendant's
presence
presence in the state. Suppose, for example,
example, a state adopts a long-arm
long-arm
fundamental constitutional
constitutional right. See Shapiro v. Thompson, 394
394
160. The right to travel is a fundamental
U.S.
(1969).
U.S. 618, 629 (1969).
161.
See, e.g.,
e.g., Edwards v. California,
161. See.
California, 314 U.S. 160, 177 (1941)
(1941) (striking down a California law
that made bringing a known nonresident indigent into the state a misdemeanor);
misdemeanor); Crandall
Crandall v. Nevada,
or
vada, 73 U.S. (6 Wall.) 35,
35, 49 (1867)
(1867) (invalidating
(invalidating a Nevada
Nevada tax imposed
imposed on persons entering
entering or
leaving
leaving the state).
.
See, e.g., Stewart v. Ramsay, 242 U.S. 128, 129 (1916)
162. See.
(1916) (discussing the immunity of parties
when process is served
served on them while in attendance at court and in transit thereto);
thereto); Diamond
Diamond v.
Earle, 217 Mass. 499, 500-01,
(1914) (describing witnesses'
500-01, 105 N.E. 363, 363 (1914)
witnesses' immunity
immunity from service); Crusco
(1950) (explaining immunity
365 Pa. 326, 327-28,
327-28, 74 A.2d 142,
142, 143
143 (1950)
Crusco v. Strunk Steel Co., 365
from service granted to a nonresident
nonresident defendant present in the state for criminal proceeding). See
generally
F. JAMES
JAMEs &
& G. HAZARD, CIVIL
(1985) (summarizing
CIVIL PROCEDURE
PROCEDURE §§ 2.26-2.31,
2.26-2.31, at 98-101 (1985)
generally F.
rules relating to immunity from service).
See, eg.,
(1963) (stating that a
163. See.
e.g., Wangler v. Harvey, 41 N.J. 277, 286, 196 A.2d 513, 522 (1963)
court may retain
International
retain jurisdiction
jurisdiction over a witness unless such jurisdiction would violate the International
RESTATEMENT (SECOND)
comment b
(SECOND) OF CONFLICT
CONFLlCT OF LAWS §§ 83 comment
Shoe standards of fairness); REsTATEMENT
(1969)
judicial administration
administration support granting
granting witnesses and attor(1969) (stating that only the needs of judicial
neys immunity); see also
Sentimentality, 32 CORNELL L.Q. 471,
489
also Keeffe
Keeffe &
& Roscia,
Roscia, Immunity and Sentimentality,
471,489
(1947)
(1947) (arguing that sentimentality for the defendant has led to the expansion
expansion of circumstances
circum~tances in
which a witness receives immunity from service).
service).
164. Many of the Supreme Court's jurisdictional
jurisdictional decisions
decisions resulted from cases in which defendants received
received actual notice and appeared to urge the constitutional defense of
of due process. See,
See. e.g.,
Helicopteros
(1984); World-Wide Volkswagen
Helicopteros Nacionales
Nacionales de Colombia,
Colombia, S.A. v. Hall, 466 U.S. 408 (1984);
Volkswagen
Corp.
(1978).
U.S. 286 (1980);
(1980); Kulko v. Superior Court, 436 U.S.
U.S. 84 (1978).
Corp. v. Woodson, 444 U.S.
165. See 433 U.S. 186, 212 (1977).
(1977).
165.
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defendant's prior presence in the
statute predicating
predicating jurisdiction upon the defendant's
state at any time and directing
directing notice by registered
registered mail. This statute
underlying notice rationale
probably would violate due process, but its underlying
66
t:iansient jurisdiction.1166
differs little from that for transient
This hypothetical
hypothetical statute also illustrates why the consent justification for transient jurisdiction
jurisdiction is unconvincing. If we assume that every
person entering a state effectively agrees
agrees to state-imposed conditions,
then the state should be able to extract consent
consent to suit from the defendant's ever having
having entered the forum. Perhaps entering
entering the state does signal consent
consent to obey
obey state law while there, and the state has a clear
clear
legitimate
interest justilegitimate interest in the obedience of visitors. 167 But this interest
fies only specific
specific jurisdiction
jurisdiction to regulate
regulate local activities and not transient
jurisdiction
over
unrelated
claims.
jurisdiction
unrelated
Furthermore,
Furthermore, the state's rationale for compelling attendance
attendance after a
defendant
because
defendant has received service but left the state is far from clear, because
the power to regulate
regulate seems to dissolve upon departure. Consent adds
nothing to the analysis;
analysis; the state simply cannot presume
presume tacit consent to
state jurisdiction
individual rights
jurisdiction for any unrelated
unrelated matter. Interests of individual
and comity among the states
unreasonable presumpstates preclude
preclude such an unreasonable
tion. A sovereign
sovereign nation may have the right to forbid entry, and thus it
may condition
American states,
condition entry upon assent to jurisdiction. The American
however, neither can forbid nor impose
unreasonable
impose unreasonable conditions
conditions upon
168
168
travel.
interstate
interstate
Notwithstanding
Notwithstanding these criticisms, lower courts have not been quick
quick
to consign transient
jurisdi<tion to the dustbin of history. Some courts
transient jurisdi:;tion
have upheld it in the belief
belief that forum non conveniens
conveniens or venue transfer
transfer
169 But
because a court may condition forum non
will prevent abuses. 169
0
forum,17
170
conveniens dismissals upon waiving certain
certain defenses in
in the
the new
new forum,
law,17 1
choice of
and because
because venue transfers
transfers preserve the plaintiff's
plaintiff's choice
of law,171
these devices
devices do little to curb abusive forum shopping. Other courts simply have noted that the Supreme
Supreme Court has not yet declared transient
transient
166. One could argue that transient
transient presence
presence at least protects
protects the defendant's
defendant's repose;
repose; the person
that leaves the state
state without
without being served
served has completely
completely escaped transient jurisdiction. Our hypothetical long-arm statute would not allow such an escape.
theticallong-arm
167. Cf
Cf. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 773-74 (1984)
(1984) (concluding that publijurisdiction in a libel
cation's regular circulation in the forum was sufficient to support assertion of jurisdiction
WEINTRAUB, supra
supra note 19, § 6.10 (stating that
that
action based on contents of the publication); R. WEINTRAUB,
states have an interest in shaping their
within
thei r tort rules to influence the conduct
conduct of those that come within
their borders).
(1969).
168. See Shapiro v. Thompson, 394 U.S. 618, 629 (1969).
169.
See, e.g., Amusement
169. See.
Amusement Equip., Inc. v. Mordelt, 779 F.2d 264, 270-71 (5th Cir. 1985);
1980).
Aluminal Indus. v. Newtown Commercial
Commercial Assoc., 89 F.R.D. 326, 329-30
329-30 (S.D.N.Y. 1980).
170. See,
1982).
See. e.g.,
e.g., Opert v. Schmid, 535
~i35 F. Supp. 591, 594-95
594-95 (S.D.N.Y. 1982).
171. See Van Dusen v. Barrack, 376 U.s.
U.S. 612, 624 (1964).
(1964).
171.
754
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General
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I72 Still others
jurisdiction invalid under
analysis.172
under minimum
mInImUm contacts
contacts analysis.
of the parties have some connection
connection with
have required that at least one 9f
17 3
the forum. 173
Certainly the rule's most favorable aspect is its straightforward application, a rare and welcome
characteristic in due process litigation.
welcome characteristic
The rule allows a state court to bypass complicated weighings
weighings of unrelated contacts
contacts under the continuous and systematic
systematic test. Furthermore,
extreme abuses, cases in which transient presence
ba;;is for
presence is the sole ba~is
jurisdiction, may be rare because
because plaintiffs typically
typically locate defendants by
their more substantial
substantial forum activities.
simple-though overly broadbroadWe must choose between
between a clear, simple-though
rule, or the more difficult tests for general jurisdiction
jurisdiction that are used when
the defendant
served in another state. On balance, transient jurisdicdefendant is served
tion has outlived its theoretical
theoretical justifications. Originally, the doctrine
sought to ensnre
ensure that defendants received
received notice of pending lawsuits. In
the day of Pennoyer,
Pennoyer, notice seemed a sufficient protection
protection of defendants'
defendants'
74
rights.'I74
The Supreme
Supreme Court now recognizes, however, that notice
rights.
alone does not confer
adjudicate. 175s We are uncertain
whether
confer power to adjudicate.l7
uncertain whether
allowing suits against defendants whose only connection
connection to the forum is
transient presence
presence serves any legitimate state interests.
D.
Consent
Consent to Jurisdiction
Jurisdiction
Consent traditionally
traditionally has been a basis for exercising personal jurisdiction because, unlike for subject matter
matter jurisdiction, the parties may
76 A
jurisdiction.1176
party expressly
expressly may submit to a court's
waive personal jurisdiction.
77
dispute'I77
jurisdiction by contractual
contractual consent in advance of the dispute
or may
1
78
I78
submit inadvertently
by
making
a
general
appearance.
The
Supreme
inadvertently
general
Court recognized
Equiprecognized consent
consent as a basis for jurisdiction
jurisdiction in National
National Equip79
Ltd. v. Szukhent.
ment Rental,
Rental, Ltd.
Szukhent. 1I79
The out-of-state
out-of-state defendants in that
172. See,
See. e.g., Amusement
Amusement Equip., 779 F.2d at 268
268 &
& n.8 (noting that the Supreme Court's apLangford, 246 Ga. 732, 734, 273
proach has precluded clear-cut jurisdictional
jurisdictional rules); Humphrey
Humphrey v. Langford,
(1980) (stating that the Supreme Court
S.E.2d 22, 23-24 (1980)
Court has "yet to reach the issue"
issue" whether persons
persons
jurisdiction solely because they were served
without minimum contacts
contacts can be subject to personal jurisdiction
served
while transient in the state).
173.
173. See Waite v. Waite, 367 N.W.2d 679,
679, 681 (Minn. 1985).
1985).
II(C)(1).
174. See supra
supra section
section II(C)(I).
175. See supra
supra notes 164-65 and accompanying
accompanying text.
176. See Sosna
& Night Mfg. Corp., 576 F.2d
Sosna v. Iowa, 419 U.S. 393,
393, 398 (1975);
(1975); Rauch
Rauch v. Day &
697, 699-700 (6th Cir.
Cir. 1978); see also
also C. WRIGHT,
23, 25
697,699-700
WRIGHT, THE
THE LAW
LAW OF FEDERAL COURTS §§ 7, at 23,25
(4th ed. 1983) (contending that parties
parties cannot waive lack of subject matter
matter jurisdiction,
jurisdiction, but may
personam jurisdiction).
waive in personam
Szukhent, 375 U.S. 311,
(1964).
177. See National Equip. Rental, Ltd. v. Szukhent,
311, 316 (1964).
178.
178. See Cuellar v. Cuellar, 406 S.W.2d 510, 512 (Tex. Civ. App.-Fort
App.-Fort Worth 1966, no writ).
179.
(1964).
179. 375 U.S. 311 (1964).
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contract to designate a third party as agent
case had agreed in a leasing contract
for service
of process within the state of New York. Recognizing
Recognizing the
service of
parties'
ability
to
consent
to
jurisdiction
by
contract,
the
Court upheld
parties'
jurisdiction
8
0
180
the agreement.'
agreement.
8'
consented to specific jurisdiction,'
The Szukhent defendants consented
jurisdiction,181
but
parties conceivably might provide for jurisdiction
jurisdiction that is general in all
respects. In other
jurisdiction for suits that
other words, they might agree to jurisdiction
that
bear no relationship to the instrument
instrument in which they express consent and
182
that have no relationship to the chosen forum. 182
Parties could draft an
agreement
d,~fendant to the forum's general jurisdiction,
agreement that subjects a defendant
which would permit
permit any individual, even
even one not a party to the agreeeven one with no connection to the
ment, to sue on any subject matter, eveu
consent clause would rarely appear
appear in a private conforum. This kind of consent.
wotd have little reason
consent
tract because one party would
reason to extract such consent
from another. Analogous consent does exist, however, when a foreign
83
process.'183
of process.
corporation appoints an agent
agmt for service
service of
corporation
contract
Contractual consent
consent to jurisdiction is subject
subject to standard
standard contract
law doctrine and may be unenforceable
unenforceable when the consent results from
84 But these
unequal bargaining positions.'
positions. 184
adhesion, overreaching,
overreaching, or unequal
85
limits are imposed by state law, not necessarily
necessarily by the Constitution.'
Constitution. 18s
constitutional limitations on assertion of judicial jurisdiction based
The constitutional
on general consent are unclear;
unclear; the due process clause possibly would
would
dispatched with such limits or interpreted contractual
intervene if a state dispatched
contractual
consent clauses very broadly. For example, in Szukhent, the due process
clause
interpreted
clause might have come
come into play if the New York courts had interpreted
180. Id.
Id. at 315-16.
315-16.
181. The agreement apparently
181.
apparently encompassed
encompassed only amenability to suit arising out of the contract,
and not to suit on unrelated
unrelated claims. Consent
Consent to jurisdiction
jurisdiction given in a private contract ordinarily
ordinarily
does not constitute consent to a jurisdiction
in
juri3diction over any cause of action whatsoever. The Court in
"for
Szukhent did not specifically discuss this issue. The contract
contract designated
designated Weinberg as agent
agent "for
service
process," and the Court only discussed
discussed jurisdiction
jurisdiction over that particular dispute. See id. at
at
service of process,"
313.
plaintiffs, the forum had some
some
313. Further, because New York was the location of the offices of the plaintiffs,
connection
Th~ opinion
opinion states that the corporation's principal place
place of busiconnection with the controversy. Th-_
ness was New York. See id.
id.
182. See.
See, e.g.,
e.g., The Bremen
contract
Bremen v. Zapata
Zapata Off-Shore
Off-Shore Co., 407 U.S.
U.S. 1,
I, 8-9
8-9 (1972)
(1972) (upholding contract
clause that required parties to bring
bring suit in English forum even
even though that forum was unrelated to
towage contract).
183. Currently, all fifty states require the appointment of a local agent as a condition for trans183.
acting certain kinds of business in thl~
the state. See,
eg., CAL. CIV.
See. e.g.,
Clv. PROC. CODE §§ 1018 (West 1986);
MAss.
181, § 4 (1986);
AGRIC. CODE ANN.
ANN. § 63.032 (Vernon Supp. 1988).
1988). See
MASS. GEN.
GEN. L. cl.
ch. 181,
(1986); TEX. AGRlc.
generally
CASAD, supra
supra note 2, 11 ~;.02[2][a]
.;.02[2][a] (discussing state requirements that corporations
generally R. CASAD,
corporations consent to jurisdiction
operat in the state); Walker, Foreign
CorporationLaws: The Loss of
of
Foreign Corporation
jurisdiction in order to operat~
Reason, 47 N.C.L. REy.
REy. 1,20
1, 20 (1968)
requirements that corporations
(1968) (discussing state requirements
corporations appoint local
agents for service
service of process).
& G.
G. HAZAR~,
HAZARD, supra
supra note 162, § 2.23,
184. See F. JAMES
JAMES &
2.23, at 93.
U.S. at
tt 324-25 (Black, J., dissenting) (suggesting
185. But see Szukhent, 375 U.S.
(suggesting that some constitutional protection against adhesion
adhesion contracts may exist).
756
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General Jurisdiction
Jurisdiction
the contract
designation of an agent for service
service of procontract to mean that the designation
of
cess made the Szukhent's amenable to suit in New York on any cause of
action, whether or not it related to the contract or to New York. States,
constitutional limits of contractual
contractual clauses
however, have not pressed the constitutional
through expansive
readings
of
private
contracts.
expansive
The most formidable constitutional issue surrounding general jurisdiction by consent
consent arises when consent
consent derives from a statutorily re18 6 rather than from contract. If states with such
186
quired appointment
appointment
such
statutes allow general jurisdiction when the defendant's
defendant's forum contacts
arguably
controversy nor are "continuous
"continuous and sysarguably neither
neither relate to the controversy
18 7
tematic,"
they render the due process credentials
credentials of statutory appointtematic,"187
ment doubtful. To avoid this issue, some courts explicitly require a
minimum
defendant's
minimum contacts analysis in addition to a showing that the defendant's
statutory
agent
received
service
of
process.
In
Springle
v.
Cottrell
Springle Cottrell EngiEngistatutory
neering
Corp.,1838 a Maryland appellate
neering Corp.,188
appellate court held that service on a forcorporation's agent subjects the corporation
if
eign corporation's
corporation to state jurisdiction if
"the corporation
"the
corporation has sufficient
sufficient contact
contact with the State to make it constitutionally
here."'189 Under
appointment
Under this view, the mere appointment
tionally subject to suit here."189
of a resident agent
agent does not reduce the amount of actual forum contacts
required for jurisdiction.190
jurisdiction. 90
Other courts, however, have almost eliminated
eliminated minimum contacts
analysis
analysis for defendants that have
have appointed agents. The court in Cowan
v. Ford
FordMotor Co.
Co. 191 summarily
summarily concluded
concluded that "[b]y
"[b]y appointing
appointing a resident agent and conducting
conducting substantial business
business in Mississippi,
Mississippi, [the defendant] has consented
consented to Mississippi's
Mississippi's exercise of personal
192
jurisdiction."'
The
opinion
fails
to reveal what those substantial
jurisdiction."192
substantial conjurisdiction that
186. Of course, the agent
agent frequently provides
provides an additional
additional basis for asserting jurisdiction
already
already exists for other reasons.
reasons. For example, when the cause of
of action arises in the forum, the state
state
probably has jurisdiction
jurisdiction anyway, so the agent becomes
becomes simply
simply the method
method for serving process.
process.
Likewise,
sufficiently continuous
Likewise, contacts
contacts may be sufficiently
continuous and systematic that general jurisdiction
jurisdiction would
exist independent of the in-state agent. In Perkins v. Benguet Consol.
Conso!. Mining Co., 342 U.S.
U.S. 437, 446
(1952),
court held that Ohio could assert general
(1952), the court
general jurisdiction over
over the defendant even though it
had not appointed
appointed a statutory agent for service of process.
187. In some states, statutory consent only applies to suits arising
arising from the defendant's forum
activity. See Dragor Shipping Corp.
Tank Car
denied,
Corp. v. Union Tank
car Co., 361 F.2d 43, 49 (9th Cir.), cert.
cert. denied,
385 U.S.
U.S. 831 (1966);
(1966); Williams
1981).
569-70 (Tenn. Ct. App. 1981).
Williams v. Williams, 621 S.W.2d 567, 569-70
188. 40 Md. App. 267, 391
(1978).
188.
391 A.2d 456 (1978).
189. Id.
[d. at 288,
288, 391 A.2d at 469; see also Nelson v. World Wide Lease, Inc., 110 Idaho 369,
369, 373,
716 P.2d 513, 517 (Ct. App. 1986)
1986) (stating that although valid service on resident agent establishes
establishes
jurisdiction
jurisdiction over nonresident corporation, it is proper to determine the reasonableness
reasonableness of the exercise
of jurisdiction by considering the corporation's contacts with the state).
supra note 2, ~ 3.02[2][a][ii],
of
190. See R. CASAD,
CASAD, supra
3.02[2][a][ii], at 3-67
3-67 to -69
-69 (questioning the reasoning of
Schreiber v. Allis-Chalmers
Allis-Chalmers Corp.,
Schreiber
Corp., 611
611 F.2d 790 (10th
(10th Cir. 1979)).
1979».
191. 694 F.2d 104
104 (5th
1982), question
question certified
certified on reh'g, 713 F.2d 100
100 (5th
district
191.
(5th Cir. 1982),
(5th Cir.), district
court rev'd
rev'd &
& action
action remanded,
remanded, 719
1983).
court
719 F.2d
F.2d 785 (5th Cir. 1983).
107; see also Recent
case).
192. Id.
[d. at 107;
Recent Decisions, supra
supra note 1 (discussing the Cowan ease).
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tacts were, preferring
"sufficient conpreferring simply to state in a footnote that "sufficient
193
tacts indisputably are present."'
present."193
Even conclusory
conc1usory assertions of connections to the forum are lacking
lacking
from some opinions that have based general jurisdiction
jurisdiction wholly on the
defendant's
statutory appointment of an agent. In a brief opinion, the
defendant's statutory
court in Goldman v.
Transit Co.
v. Pre-Fab
Pre-Fab Transit
Co. held that Texas courts could
entertain
entertain a suit against a foreign corporation
corporation for property
property damages suf194 Noting
fered in a truck crash in Louisiana. 194
service
on the defendant's
defendant's
Noting
resident agent, the court explained
"[t]he rationale behind the theexplained that "[t]he
ory of consent is that in return for the privilege
privilege of doing business in the
domestic corporastate, and enjoying the same
same rights and privileges as a 90mestic
corporation has consented to amenability to jurisdiction
jurisdiction
tion, the foreign corporation
9
5
for purposes
of
all
lawsuits
within
the
state."'
The court in Junction
all
state."195
Junction
purposes
Bit & Tool Co.
Co. v. Institution
Co. 196
196 went so far as to say that
Institution Mortgage
Mortgage Co.
"minimum contacts
contacts would
seem patently
"minimum
would seem
patently established"
established" when a "foreign
"foreign
corporation has actually
actually qualified under Florida law to transact business
in th[e] state and has appointed
appointed a resident agent for service of process"
process" as
x97
197
the Florida statute required.
required.
consistent with some early Supreme
Supreme Court preceThese holdings are conuistent
this century the Court held that the designation
designation
dent. In the first part of thh
of an agent could constitutionally
constitutionally confer unlimited general
general jurisdic98
tion.'
Issue Mining
Pennsylvania Fire
Fire Insurance
Insurance v.
v. Gold Issue
Mining & Milling
Milling
tion. 198 In Pennsylvania
constitutionally exercise
Co., Justice Holmes wrote that Missouri could constitutionally
general
contact
general jurisdiction
jurisdiction even though the defendant's only apparent contact
with the forum was its designation
of
the
Missouri
Commissioner
of Indesignation
199
surance as its local agent. 199
cases or their underlying
underlying theories seems viable
But none of these Casl~S
viable
under
°O Although the rigid territoriality
under today's due process standards. 22°°
193. 694 F.2d at 107
193.
107 n.8.
S.W.2d 597
194. 520 S.W.2d
597 (Tex. Civ. App.-Houston [14th Dist.] 1970, no writ).
195. ld.
Id. at 598 (citation omitted) (emphasis added).
196. 240 So. 2d 879 (Fla. Dist. Ct. App. 1970).
197.
Id. at 882 (emphasis
197. ld.
(emphasis added); see also Anderson v. United States, 220 F. Supp. 769, 770-71
(E.D.
jurisdiction, even
even without
without
(B.D. Pa. 1963) (holding that statutory consent is a sufficient basis for jurisdiction,
contact
defendant and the forum).
contact between the defendant
& Milling
198. See Pennsylvania Fire Ins. Co. v. Gold Issue Mining
Mining &
Milling Co.,
Co., 243 U.S. 93, 96 (1917)
(1917)
(Holmes,
Smolik v. Philadelphia &
& Reading Coal &
& Iron Co., 222 F. 148, 151 (S.D.N.Y.
(S.D.N.Y.
(Holmes, J.); see also Smolik
1915) (L. Hand, J.) (holding that when a corporation designates an agent
agent in a state, it is as if the
1915)
corporation
consented to jurisdiction
& Reading Coal
Bagdon v. Philadelphia
Philadelphia &
corporation consented
jurisdiction in that state's courts); Bagdon
&
1075, 1077
(1916) (Cardozo, J.) (holding that the presence
of
& Iron Co., 217 N.Y. 432,438,
432, 438, 11
11 N.E.
N.H. 1075,
1077 (1916)
presence of
aa designated
designated agent within the state brings the corporation
corporation within the jurisdiction
jurisdiction of the state courts).
For
onsent theory, see Kurland, supra
supra note 11,
For aa discussion of these cases and C'Jnsent
11, at 578-82; Walker,
Foreign
(1969).
Foreign Corporation
Corporation Laws: A Current
Current Account, 47 N.C.L. REV. 733, 734-36 (1969).
199. 243 U.S. at 95.
95.
200. Professor
Professor Walker
Walker adopts this view and argues that
that
758
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General
Jurisdiction
General Jurisdiction
of Pennoyer
Pennoyerv. Neff once required in-state service of process to support in
20 '
personam
personam jurisdiction,
jurisdiction,201
the minimum contacts approach of InternaInterna202
tional Shoe Co.
Co. v. Washington
Washington 202 led to long-arm jurisdiction. Furthertional
more, the old notion that a state could entirely exclude
or
exclude corporations or
condition
condition their entry upon consent
consent to jurisdiction because corporations
corporations
were state-created
state-created legal entities that could not operate beyond a sover2 °4
20 3
eroded long
long ago.
ago. 204
eign's borders203
20 5
& Co.
The New Jersey statute
statute at issue in G.D. Searle
Searle &
Co. v.
v. CQhn
CQhn 205
illustrates
illustrates the difficulties inherent in continuing
continuing to recognize general jurisdiction
risdiction based solely upon consent. Foreign corporations that operate
operate
in New Jersey without having appointed
an
agent
for
service
of
process
appointed
face an automatic tolling against them of the state's statute of limitations
2066 Searle
during the time that the agent is not residing within the state. 20
argued that the statute violated due process by requiring the company
company to
assent to general jurisdiction in order to receive the benefits
benefits of the statute
0 7 The
20 8 but
of limitations. 2207
Court declined
declined to address this issue,
issue,208
it upheld the statute against Searle's argument
argument that this rule violated the equal
protection
state rationally could not
not
protection clause. Searle had argued
argued that the state
the original
corporation laws is lost, and their conceptual
conceptual foundation is
original reason for foreign corporation
is
today largely discredited. State qualification
qualification statutes
statutes were adopted to solve
solve problems created by a nineteenth century
process be
century constitutional requirement that original legal process
be
served
served within the boundaries
boundaries of forum states. The operating
operating principle
principle of the laws was also
the product of an unusual nineteenth
development-the proposition that states can
nineteenth century
century development-the
can
admit out-of-state corporations
corporations upon condition because, it was said, they could exclude
them entirely. Subsequent Supreme Court decisions have
have eliminated
eliminated the service
service of process
process
requirement
requirement and modern judicial thinking has cut deeply
deeply into the acceptability
acceptability of the
the principle of conditional
conditional entry.
Walker, supra
supranote 198,
(contending that the origi198, at 733; see also Walker, supra
supra note 183, at 24-30 (contending
nal purposes
of service within forums are no longer tenable).
purposes underlying the requirement of
201.
in-state service of process necessitated fictions
201. 95 U.S.
U.s. 714, 722 (1878).
(1878). This requirement of
ofin-state
whereby
"consented" to jurisdiction.
See, e.g.,
U.S. 352,
e.g., Hess v. Pawloski, 274 U.S.
whereby out-of-state residents "consented"
jurisdiction. See,
355 (1927)
(1927) (sustaining jurisdiction
Massachusetts statute that
jurisdiction over nonresident motorist under a Massachusetts
made using state highways equivalent
of
service of
equivalent to appointing the State Registrar as agent for service
process).
process).
202. 326 U.S. 310
(1945).
310 (1945).
203. See Bank of Augusta v. Earle, 38 U.S. (13
(1839).
(13 Pet.) 519, 587
587 (1839).
204. See.
See, eg.,
Western Union Tel. Co., 96 U.S. 1,
1, 10-12 (1877)
(1877) (stating that
e.g., Pensacola Tel. Co. v. Westeru
that
a state may not prevent a foreign corporation from carrying on interstate commerce within its
borders).
borders).
205. 455 U.S. 404 (1981).
(1981).
206. N.J. STAT.
STAT. ANN.
ANN. §§ 2A:14-22
2A:I4-22 (West 1987).
1987).
207. 455 U.S. at 412 n.7. In making the argument,
[Searle]
[Searle] notes that it can obtain the benefit of the statute of limitations by appointing an
an
agent to accept service. Fearing that appointment
appointment of an agent might subject it to suit in
in
New Jersey
when
there
otherwise
would
not
be
the
minimum
contacts
required
for
suit
in
Jersey
otherwise
that State under
under the Due Process Clause, petitioner
petitioner insists
insists that New
New Jersey law violates
violates due
process by conditioning the benefit
benefit of the limitation
limitation period upon
upon the appointment
appointment of a New
Jersey agent.
Id.
Id.
208. See id.
id.
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1988
toll the statute simply because
because a corporation had not named an agent for
2099 Statutes
receipt of service.20
effect
Statute:s such as that in G.D. Searle,
Searle, which in effect
require consent to jurisdiction, circumvent
circumvent all due process notions of fairness underlying minimum contacts analysis and expose the fiction of consent as a basis for jurisdiction. Other lower courts have heeded similar
similar
2 10
constitutional arguments.
axguments. 210
due process constitutional
E.
Property
E. Property
JurisdictionBased on Property
Unrelatedto Suit.-For
Suit.-For about a
1. Jurisdiction
Property Unrelated
century, jurisdiction
in
American
courts
was
governed
by Pennoyer
jurisdiction
Pennoyer v.
21 1 which established that the due
Neff,
process clause limited a state's
NejJ,211
state's
judicial jurisdiction
jurisdiction to persons
pers.ons or property present in its territory. In
In
personam jurisdiction rested on state power over a defendant's person,
and in rem jurisdiction
jurisdiction resulted from state authority over property
property located within its borders.
Under in rem jurisdiction,
jurisdiction, the property itself is the subject of the
12
cause of action
action2212
and judgment
judgment affects
affects the interests
interests of all persons in the
property. 21 3 Quasi in rem jurisdiction
property.213
jurisdiction arose in part from the difficulty of
214 Before long-arm
satisfying judgments against nonresident
nonresident defendants.
defendants. 214
long-arm
statutes and before widespread
widespread recognition
recognition of sister states' judgments
21 5 plaintiffs had
clause,21s
little assurance of
under the full faith and credit
credit clause,
defendant into the forum court or of enforcing
enforcing a
getting a nonresident defendant
judgment against an absent defendant. To redress this situation, states
allowed plaintiffs to reque8t
request that the court sequester or garnish defenddefendproperty either would
ants' property in the state. Judicial
Judicial attachment
attachment of property
209. Id. at 408.
210. For example, the district
court in
inIn re Mid-Atlantic
Toyota Antitrust
AntitrustLitigation
district COllrt
Mid-Atlantic Toyota
Litigation ruled that a
of an agent could not alone make it amenable
amenable to suit for an unrelated claim
claim
defendant's designation
designation of
maintained no contact
in West Virginia, when the defendant had maintained
contact with the state for years. 525 F.
Supp. 1265,
1265, 1287-88
1287-88 (D. Md. 1981).
1981). The Court explained:
meaningless-it is significant
significant only as a manifestation
manifestation of
of the corporaConsent by itself is meaningless-it
tion's recognition that it has availed itself of "the
of
"the benefits
benefits and protections of
of the laws"
laws" of
the forum by virtue of
of conducting
conducting business
business activities
activities there. If the corporation conducts
conducts no
business
"benefits and protections of the laws" of
of
business in the forum, it has not availed itself of
of "benefits
the forum and there is no bargain
bargain between
between the corporation
corporation and the forum state and there is
is
no
corporation's consent to jurisdiction.
no meaning
meaning to the corporation's
jurisdiction. In such a situation, it would not
be "reasonable
of fair play and substantial
"reasonable and just, according to our traditional conception
conception offair
justice" to subject the corporation
corporation to jurisdiction in that forum. In short, a consent statute
such as [West Virginia's]
contacts"
Virginia's] necessarily
necessarily incorporates
incorporates the Due Process "minimum
"minimum contacts"
requirement.
requirement.
Id.
Id. at 1278 (citations omitted).
211.
U.S. 714 (1878).
(1878).
211. 95 U.S.
212. See L. BRILMAYER,
supra note 71,
71, at 21.
BRILMAYER, supra
213. See Hanson
Hanson v. Denckla,
Denckla, 357 U.S.
U.S. 235, 246 n.12 (1958).
(1958).
214. See Freeman
119 U.S. 185, 187 (1886).
(1886).
Freeman v. Alderson, 119
215. U.S.
CONsT. art. IV, § 1.
1.
U.S. CONST.
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General Jurisdiction
2 16
satisfy default judgment. 216
force appearance by the defendant or would satisfy
idea that an action in rem or quasi in rem proceeded only against
against
The idea
affected the property owner only indirectly was therefore a
property and affected
convenient fiction which enabled plaintiffs to bypass the in personam ju217
forum. 217
the forum.
within the
be within
requirement that the defendant be
risdiction requirement
No significant constitutional problems, beyond determining relateddefendant
ness, arise when a court bases jurisdiction on property of the defendant
that relates to the cause of action. The Supreme Court has recognized:
When claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant, it would
be unusual for the State where the property is located not to have
jurisdiction. In such cases, the defendant's claim to property loexpected to bencated in the State would normally indicate that2he
18 expected
interest.218
his interest.
of his
protection of
efit from the State's protection
contract dispute after
after
For example, actions to quiet title or to resolve a contract
the forum court attaches the disputed goods are clearly within the juris19
diction of the state where the property
property is located. 2219
We will not focus on
such relatively uncomplicated
uncomplicated and straightforward applications
applications of quasi
in rem and in rem jurisdiction. Instead, we will examine jurisdiction
of
based on property
property unrelated
unrelated to the dispute and focus on the relevance of
unrelated property to in personam jurisdiction.
By extending the minimum contacts requirement
requirement to property-based
property-based
220 corrected
Heitner 220
corrected the anomalous treatment of a
jurisdiction, Shaffer v. Heitner
defendant's unrelated
Shafunrelated property under quasi in rem jurisdiction.
jurisdiction. In Shaffer,
the
defendants'
only
purported
contact
with
the
fer,
defendants'
purported
forum was their
other rights statutorily
statutorily deemed presshares of stock, stock options, and other
22 1 The-lower
The-lower court sequestered
sequestered this property
property to obent within the state. 221
tain jurisdiction
over
the
defendants
in
plaintiff's
stockholder
jurisdiction
defendants
stockholder derivative
222
suit.222
The
Supreme
Court
found the contacts
contacts between the forum and
suit.
jurisdiction; 223 sequestration
the defendants
defendants insufficient to justify jurisdiction;223
sequestration alone
because
could not correct such a defect because
the only role played by the property is to provide
provide the basis for
for
216. For
For an example
example of
of the operation
operation of these procedures,
procedures, see Harris
Harris v. Balk, 198 U.S. 215,
215, 222
(1905).
(1905).
217.
See Pennoyer
217. See
Pennoyer v. Neff, 95
95 U.S. 714, 720-22
720-22 (1878).
(1878).
218.
207-08 (1977).
(1977).
218. Shaffer v. Heitner, 433 U.S. 186, 207-08
219.
See, e.g.,
219. See,
e.g., Canterbury
Canterbury v. Monroe
Monroe Lange Hardware
Hardware Imports
Imports Corp., 48
48 N.C. App. 90, 93-94,
268
268 S.E.2d
S.E.2d 868,
868, 870-71
870-71 (1980)
(1980) (finding
(finding minimum contacts for quasi in
in rem
rem jurisdiction
jurisdiction by attaching
attaching
defendant's
defendant had
defendant's lumber, which was
was the
the subject of the contract dispute and
and which
which the defendant
had
instructed
instructed the plaintiff
plaintiff to ship
ship to the forum state).
220. 433 U.S. 186, 212 (1977).
(1977).
221.
Id. at 214.
221. Id.
222. Id.
223. Id. at 216-17.
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bringing the defendant into court. Indeed, the express purpose of
of
defendant
the Delaware sequestration procedure
procedure is to compel the defendant
appearance. In such cases, if a direct assertion
to enter a personal appearance.
of personal jurisdiction
jurisdiction over the defendant would
would violate the Constitution, it would seem that an indirect
indirect
assertion
of that jurisdic224
tion should be equally
equally impermissible. 224
2255 elaborated
elaborated on Shaffer's holdThree years later, Rush v. Savchuk 22
of
ing by declaring unconstitutional
unconstitutional the practice of judicial attachment of
contractual obligation
an insurer's contractual
obligation to defend and indemnify a defend26 as a means of obtaining jurisdiction over
ant2226
that defendant. In Rush,
means
attempted to assert jurisdiction
a Minnesota court
court had atte:mpted
jurisdiction over an Indiana
Indiana
contact with the forum was that his insurer was liresident whose sole contact
censed to do business in Minnesota. The Supreme Court held that the
contractual obligation
obligation to defend and indemnify the defendant
defend,ant in
in
insurer's contractual
a tort suit arising from an automobile accident
in
Indiana
did
not
satisfy
accident
227
the minimum contacts test.
test. 227
not fully resolve property's
contact
Shaffer and Rush do 11.ot
property's status as a contact
Although
for the purposes of quasi in rem and in personam jurisdiction. Although
the Shaffer opinion clearly
clearly states that unrelated
unrelated property
property is not always a
228
it does not
sufficient contact
contact by itself for quasi in rem jurisdiction,
jurisdiction,228
determine whether a defendant's ownership of unrelated property in the
forum might sometimes
sometimes constitute a countable contact, or even a suffiitself, for general
general in personam
cient contact
contact by itself,
personam jurisdiction.
2. Unrelated
UnrelatedProperty
Contact.--Some courts have read Shaft
2.
Property as a Contact.-Some
Shaffer to exclude
use of unrelated property
exclude entirely the 'lIse
property both
both as a countable
contact
obtaining
contact for in personam jurisdiction
jurisdiction and as the sole means
means of obtaining
jurisdiction
contact
longer a special jurisdictional
jurisdictional contact
jurisdiction over a defendant. No longer
uniquely
minimum contacts
contacts test,
uniquely exempted
exempted from applications of the minimum
property
countable contacts. If
If
property is instead an outcast from the ranks of countable
these courts are correct, Shaffer has not
n,ot rescued
rescued property from its unique
role in jurisdictional
jurisdictional theory, but merely has changed the explanation
explanation for
this uniqueness. Such an i:llterpretation
Eaterpretation is unreasonably
unreasonably constricting and
ignores a defendant's
Gutierrez v. Rayignores
defendant's relevant ties to a potential forum. Gutierrez
9 demonstrates the unreasonableness of this
2 ;:9
mond International,
International,Inc. 22
demonstrates
unreasonableness
view of Shaffer.
Shaffer. A federal district court in Texas had to decide whether
whether
224. Id. at 209.
225. 444 U.S. 319 (1980).
(1980).
dubbed Seider-type
jurisdiction, after the first case to employ
Selder-typejurisdiction,
employ it.
it See
226. This practice
practice has been dub1:ed
Seider v. Roth, 17 N.Y.2d 111,
(1966).
111, 114, 216 N.E.2d 312,
312, 315,
315, 269 N.Y.S.2d 99, 102 (1966).
227. See Rush, 444 U.S. at 329-30.
228. See 433 U.S. at 207.
F. Supp. 241 (S.D. Te:.
1979).
Tex. 1979).
229. 484 F.
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the defendant's extensive
extensive ownership of land in Texas was an act that
30
constituted
Even
constituted doing business
business under the state long-arm statute.2230
though Texas law interprets
its
statute
"as broadly as the federal constiinterprets
statute "as
tutional requirements
requirements of due process will permit,"231
permit,"12 3 1 the court
court held that
that
"under
the
single
standard
for
determining
"under the single standard for determining judicial jurisdiction, it would
would
be improper to allow those contacts to support an action brought in per' 232
sonam.
But property
property ownership
ownership was not this defendant's
defendant's only consonam."232
tact with the forum. The defendant corporation
corporation also owned several
several
Texas subsidiaries and transferred funds used by a nonresident subsidiary
233
through the Houston offices of another resident subsidiary.
subsidiary.233
.
234
The court in Nelepovitz v. Boatwright
Boatwright234 decided just months after
Shaffer that neither the defendant
defendant husband's
Carolina
husband's interest in a South Carolina
2 35 nor
limited partnership
the defendant
defendant wife's ownership
ownership of mortgaged
partnership235
real estate in the state provided sufficient
sufficient contacts between the defend236
ants and the South Carolina
Carolina forum. 236
Admittedly, such property interests might not be very
very significant;
significant; however, the court rejected them not
not
because they were insignificant
insignificant but simply because they were property
237
interests. 237
These courts are wrong. For one thing, they treat property
property ownership as though it exists in a vacuum and creates no other possible rights,
expectations,
obligations between the defendant
expectations, or obligations
defendant and the forum. Moreover, even if the Supreme Court in Shaffer had unwittingly suggested
relegating unrelated
relegating
unrelated property
property to the uncountable, lower courts should
recognize that the suggestive language
language is only dictum and should not be
followed.
and
We begin our analysis with the facts and wording of Shaffer and
Rush, which leave open the possibility of counting unrelated
unrelated property as
a contact. The Shaffer Court did not declare
property's presence in
declare that property's
in
irrelevant, 238 but clearly
clearly authorized reliance on related
a forum was irrelevant,238
property.2 39 Furthermore, the Court did not say that the presence of
property.239
of
230. Id.
Id. at 247-48.
U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.
(Tex, 1977»).
1977)).
231. Id. at 247 (citing U-Anchor
232. Id. at 248.
233. Id. at 253.
F. Supp. 1336 (D.
(D.S.C.
234. 442
442 F.
S.C. 1977).
1977). The underlying cause of action was a claim
claim for injuries
and loss of consortium due to the alleged negligence
negligence of the defendants in allowing their dog to trip
defendants' Missouri
Missouri home. See
one of the plaintiffs, causing her to fall down a flight of stairs in the defendants'
id. at 1338.
id.
1338.
property." S.C. CODE ANN. § 33-42-1210 (Law. Co-op.
235. "A partnership
partnership interest is personal property."
1987).
1987).
F. Supp at 1338.
236. See 442 F.
1338.
237. See id.
id. at 1340.
238. See Brilmayer, How Contacts
supra note 10, at 97.
238.
Contacts Count,
Count, supra
186, 208 (1977).
239. See Shaffer v. Heitner, 433 U.S. 186,208
(1977).
763
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Court
unrelated property could
could never support jurisdiction; rather, the ,(::ourt
could not always jussaid that the presence of unrelated property alone could
240 The Sheffer
tify jurisdiction. 24°
Shqffer Court acknowledged
"the presence
acknowledged that "the
presence
of property
in
a
State
may
bear
on
the
existence
of
jurisdiction
property
h;:ar
existence jurisdiction by provid'24
the litigation."
ing contacts among the forum State, the defendant, and the
litigation."241'
Although Shaffer gives as examples suits arising from property ownership and torts arising from an absentee owner's negligent care of his
property, these do not compose an exhaustive
exhaustive list of possible jurisdictional bases. The Court does not exclude
unrelated
exclude the possibility of unrelated
property
contacts.
property providing contact~,.
In Rush v. Savchuk, the Court
Court stated outright that "ownership
"ownership of
of
property in the State is a contact between the defendant and the forum,
ties. '2 42 Rush thus does not
and it may suggest the presence of other ties."242
preclude the possibility that courts could include the contact
contact of property
est~ablish jurisdiction
jurisdiction under International
International Shoe's
ownership with others to eSl:ablish
standard.
Consequently, not all judges narrowly
Shaffer. Courts frenarrowly construe
construe Shaffer.
business test a nonquently have included as a component
component of the doing business
resident's ownership of property243
property2 43 in the forum. Property ownership
ownership
directly, as a counted activity, or indirectly,244
indirectly, 244 as an
may affect the test directly.,
activities that constitute
outgrowth of other activiti{:s
constitute doing business. Courts also
unrelated property as a countable contact for
have viewed a defendant's
defendant's °anrelated
for
240. Brilmayer, How Contacts
Contacts Count,
supra note 10, at 97.
Count, supra
241. 433 U.S. at 207.
242. 444 U.S.
(1980).
U.S. 320, 328 (1980).
243.
defendant's
243. Property's
Property's role is sometimes unclear because
because the importance
importance of a corporate
corporate defendant's
state often will be overshadowed
overshadowed by activities that would
would
ownership of unrelated property in a forum state
be sufficient in themselves, such as incorporation in the forum or maintaining
maintaining a principal place of
of
business there.
244. See,
See, e.g., Rollins
& Schwartz, 478 F. Supp. 1136, 1140 (D.S.C. 1979) (listing
Rollins v. Proctor &
among
rev'd on other
corporation in-state ownership of two filing cabinets), rev'd
among contacts of nonresident corporation
grounds, 634 F.2d 738 (4th Cir. 1980); Horton v. Richards,
891, 893 (Utah 1979)
1979) (listing
grounds,
Richards, 594 P.2d 891,
among
Schroeder v. Raich, 89
89
bank account
account and office records);
records); Schroeder
among contacts
contacts in-state ownership of a bank
Wis. 2d 588,
871, 375
588, 596, 278 N.W.2d
N.W.2d 871,
375 (1979)
(1979) (inferring
(inferring substantial
substantial contacts
contacts from the defendant's
defendant's
membership
three parcels
parcels of land).
membership in one in-state partnership
partnership and ownership of three
Schroedercourt, relying on Wisconsin's
"substantial and not isolated
isolated
Wisconsin's statute that requires "substantial
The Schroeder
activities
state," Wis.
ANN. § 801.05(1)(d)
801.05(1)(d) (1977), found:
WIS. S-rAT.
STAT. ANN.
activities within [the] state,"
The trier of fact can
from Raich's
can infer frorr.
Raich's membership in at least one partnership
partnership and his
ownership
Raich
ownership of three parcels
parcels of real estate, including two stores, that at a minimum, Raich
was involved in the payment
payment of property
property taxes
taxes and income taxes
taxes in Wisconsin, in obtaining
obtaining
insurance
insurance coverage on Wisconsin
Wisconsin property, and in the rental,
rental, maintenance,
maintenance, or other
other manoperations of the prop~rties
prop.orties ....
[With three properties
don't
agement operations
..
"[W]ith
properties in Wisconsin, I don't
think there is any question abollt
about it that he is here for not just isolated activities. He has
activities."
substantial activities."
89 Wis. 2d at 596, 278 N.W.2d at 875.
parcels of property was related to the cause of action, in that the promissory
One of the three parcels
note was given in partial payment for it. The court,
court, however, does not appear
appear to distinguish this
contact from the unrelated property contacts.
0
•
764
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General Jurisdiction
Jurisdiction
General
245 Morein personam
personam jurisdiction
jurisdiction outside
outside of
of the
the doing
doing business
business context.
context.245
Morein
a
defendant's
few
cases
list
property
ownership
as
one
of
defendant's
over,
although
one
of
cases list property ownership
over, although
countable contacts
contacts with
with a forum,
forum, some
some courts
courts have implied
implied that the ababcountable
of property
property owned
owned by
by the
the defendant
defendant was relevant
relevant to aa finding
fmding of
of no
sence of
sence
6 Perhaps
246
Perhaps most
most noteworthy
noteworthy is the Supreme
Supreme Court's
Court's conjurisdiction.24
jurisdiction.
v. Hall;
S.A.
de
Colombia,
Nacionales
tact-counting
Helicopteros
Nacionales
de
Colombia,
S.A.
Hall; the
Helicopteros
in
tact-counting
alongside
property ownership
ownership alongside such
such
Court listed the
the defendant's
defendant's lack of property
Court
business, and consent
consent
single-factor contacts
contacts as domicile, doing business,
weighty, single-factor
247
service, which also
also were
were missing in that
that case.
case. 247
to service,
245. In Beechem
Beechem v. C.M. Pippin,
Pippin, 686 S.W.2d
S.W.2d 356,
356, 363 (Tex. App.-Austin
App.-Austin 1985,
1985, no
no writ), aa
245.
of Appeals
Appeals found sufficient
sufficient contacts
between the
the forum and
and a nonresident
nonresident defendant
defendant
Court of
contacts between
Texas Court
corporation and its representative
representative to justify
justify jurisdiction.
jurisdiction. The court
court went
went on
on to
to note, however,
however, that
that
corporation
'substantially just'
or 'substantially
just' to
to assert
assert jurisdicjurisdic"another particularly
particularly significant reason
reason why
why it seems
seems 'fair'
'fair' or
"another
"owning both real and personal proption" over the nonresident representative
representative was his admission
admission to "owning
tion"
Id. The
The court explained:
and to having
having previously
previously conducted sales in Texas."
Texas." ld.
erty in Texas and
possession of
of property
property in the forum state does
does not alone necessarily constitute
constitute
While the possession
contact to justify
justify the exercise
exercise of
of in personam
personam jurisdiction,
jurisdiction, Shaffer v. Heitner,
Heitner, it
sufficient contact
important, along with the other
other activities,
activities, to a determination
determination of whether the
undoubtedly is important,
undoubtedly
of the forum state as to
defendant has so enjoyed the benefits, protections
protections and privileges
privileges of
defendant
jurisdiction over his person consistent with "fundamental
render
render the
the exercise
exercise of
ofjurisdiction
"fundamental fairness,"
fairness,"
Co. v. Washington,
Washington, even, we think, when those contacts are unrelated to
International
InternationalShoe Co.
the controversy.
controversy.
Id. at 363 (citations omitted).
ld.
•
Yet another case involving
involving jurisdiction
jurisdiction based in part on unrelated property is Hann v. Hann,
separate
sued her husband for separate
175 N.J. Super. 608,421
608, 421 A.2d 607 (Ch. Div. 1980), in which a woman sued
maintenance. The New
New Jersey Chancery
Chancery Court based in personam jurisdiction over the nonresident
nonresident
maintenance.
property in
in
husband on several contacts, including the husband and wife's joint ownership of rental property
husband
New Jersey. The court was careful to distinguish property not related to the cause of action from
marital property that would be related to the cause of action and therefore might confer specific
jurisdiction.
jurisdiction. Because the plaintiff sought an equitable remedy-she asked the court to restrain her
property was
her-rather than a divorce action dividing their assets, the property
husband from harassing her-rather
Heitner, the court nevertheless counted the
ofShaffer
of action. Well aware of
unrelated to the cause ofaction.
Shaffer v. Heitner,
Id. at 612, 421 A.2d at 609.
property
property contact. ld.
court
F. Supp. 483 (D. Kan. 1978), the co,urt
Reserves Group, Inc. v. Superior Oil Co., 460 F.
In Energy Reserves
the corporate law
counted
counted a form of personal property, the wholly-owned subsidiary. Distinguishing the
and its subsidiary, the
corporation and
between aa corporation
from the jurisdictional
issues
jurisdictional issue of a relationship between
issues from
court declared:
court
"contact, tie
within the forum is a "contact,
affiliated corporation within
ownership of an affiliated
Quite clearly, the ownership
Quite
the
ownership of property in the
.... Like the ownership
with the forum ....
of that
that non-resident with
or relation" of
has
non-resident has
affiliated corporation with which the non-resident
the existence in a forum of an affiliated
state, the
forum as a
and benefits to and from the forum
of control and
flow of
implicates aa flow
some relationship implicates
non-resident's nexus with
the non-resident's
one indication of the
It is thus one
of that ownership. It
consequence of
reasonof the fairness or reasonthe overall evaluation of
some weight
weight in the
the
and therefore has some
the forum and
of jurisdiction.
of the exercise ofjurisdiction.
ableness of
Id. at 507.
ld.
property
of property
wholly-owned subsidiary was one kind of
that aa wholly-owned
believed that
Thus, the
the court
court apparently believed
of the
of the relatedness of
and a forum, regardless of
defendant and
that
that entailed sufficient ties between aa defendant
of action.
the cause
cause of
subsidiary to the
1980)
987 (S.D.N.Y.
(S.D.N.Y. 1980)
979, 987
F. Supp.
Supp. 979,
Inc., 492
492 F.
& Son, Inc.,
Johnson &
v. S.C.
S.C. Johnson
e.g., Saraceno
Saraceno v.
See, e.g.,
246. See.
no
pays no
New York, pays
in New
no property in
owns no
York, owns
in New York,
or employees
employees in
offices or
has no offices
("[Defendant]
("[Defendant] has
York.").
in New
New York.").
no banking in
York, and does no
New York,
taxes in New
taxes
247. 466 U.S. 408,
(1985).
408, 411 (1985).
765
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1988
3. Property
Property Contacts
Contacts and Fairness.-Counting
Fairness.-Counting property
property contacts
contacts
and even
t:ypes of pioperty,
property, under certain
certain circumstances,
circumstances,
even treating
treating certain
certain types
as the decisive or sole countable
countable contact
contact between
between a defendant
defendant and
and a forum is
is undoubtedly
undoubtedly reasonable. Ironically, refusing to count
count unrelated
unrelated
property
property as
as a contact perpetuates
perpetuates the unjustified
unjustified treatment
treatment property
property has
248 As an
ownership occuan uncountable
uncountable contact, property
property ownership
long received.248
pies a role that is less significant
significant than other dubiously important
important relationships a defendant
defendant may
may have with a forum, such
such as maintaining
maintaining a
or visiting
visiting the state for wholly
wholly unrelated
unrelated reatelephone directory
directory listing Dr
sons. Singling out quasi
quasi in rem jurisdiction
jurisdiction for discredit creates
creates distincsingle-factor bases
bases that are difficult to justify.
tions between
between it and other single-factor
unrelated business
business transacWhy should unrelated
unrelated visits to the state or unrelated
significance than a defendant's
tions have
have so much
much more jurisdictional
jurisdictional significance
defendant's
property ownership?
ownership? Why
Why should
should transient presence
presence in the forum, an
24 9
general jurisdiction
Pennoyer v.
v. Neff
Neff power theory of
of general
jurisdiction249
artifact of the Pennoyer
and usually unrelated
unrelated to the cause of action, continue to be jurisdiction250
ownership?250
ally significant
significant if courts have rejected
rejected unrelated property
property ownership?
Using property
property as a jurisdictional
jurisdictional contact is reasonable
reasonable because
because such
an approach
provide a fair place to defend
defend a suit. - Fairness, not simapproach can provide
ply foreseeability
foreseeability of suit or state interest, is the most important
important consider25 1
general jurisdiction. 251
For example, we previously
previously argued that
ation for generaljurisdiction.
jurisdiction
jurisdiction based on unrelated
unrelated activities
activities would be fair if they indicate
indicate
that the defendant is suffictently
suffidently involved
involved in the activities
activities of the state to
relegate to its political
be an insider whom the state may safely relegate
252 Some forms of property
ownership could entail similarly
property ownership
processes. 252
exercise of general jurisdiction.
close ties and thus justify the exercise
Contacts.-AsUnrelated Property
4.
4. Assessing the Sufficiency
Sujilciency of Unrelated
Property Contacts.-Assuming that unrelated property
property should count as a jurisdictionally
jurisdictionally significant contact, how should we evaluate the due process sufficiency of a
particular property contact? Evaluating minimum contacts is never an
Particularly with
easy task, and no one test can be applied inflexibly. Particularly
contacts, however, no adequate test presently exists.
regard to property
property contactH,
sufficient to support jurisdiction
Heitner, property was automatically sufficient
Shaffer v.v. Heitner,
248. Before Shaffer
(1905), under which an attachment
198 U.S. 215, 222 (1905),
attachment of defendant's
under the rule in Harris v. Balk, 198
the forum granted the
th,~ forum court jurisdiction to render aa judgment
judgment up to the value
property within the
of thc
the property.
of
-notes 140-45
140-45 and accompanying
accompanying text.
supra notes
249. See supra
supra note 10, at 81.
Contacts Count,
Count, supra
250. See Brilmayer, How Contacts
"tradiU.S. 310, 316 (1945)
(1945) (making "tradiInternational Shoe Co. v. Washington, 326 U.S.
See, e.g.,
251. See.
e.g., International
fair play and substantial justice"
justice" the cornerstones of the constitutional test for
tional notions of fair
19, § 4.8, at 117-18
117-18 (stating that International
InternationalShoe created
WEINTRAUB, supra
supra note 19,
jurisdiction); R. WEINTRAUB,
"a jurisdictional
jurisdictional standard of fairness to the defendant").
defendant").
II(B)(2).
supra section II(B)(2).
252. See supra
766
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General
General Jurisdiction
(a)
"continuous and
and systematic" test.-Courts
test.-Courts currently
(aJ The "continuous
measure the sufficiency
unrelated business contacts between
between the forum
sufficiency of unrelated
state and the defendant with the continuous and systematic
systematic test: the defendant's activities in the forum state must be continuous and systematic
53
to support jurisdiction.
Applying this test to a property contact, howjurisdiction.2253
ever, distorts the meaning of the words and produces an unsatisfactory
result. The continuousness
continuousness of a property
property contact
contact obtains meaning
meaning only
by joint reference
reference to the property's
property's presence in the forum and the duration of the defendant's ownership of it. Even a trivial item of property
could satisfy
satisfy a continuousness
continuousness test based solely on the length of the property's presence
presence in the state. Admittedly, an individual or corporate
corporate defendant might engage in continuous and systematic
activities
in the
systematic
overseeing or managing its property; however, such acforum as part of overseeing
tivities are themselves
themselves likely to be countable
countable contacts
contacts independent of the
property. Thus, continuousness
continuousness is not helpful
helpful as an attribute
attribute of mere
continuousness test might help to distinguish tangible
ownership. The continuousness
from intangible property according
according to whether
whether the property
property had a contin54
uous existence. 2254
The relevant jurisdictional
jurisdictional question, however, depends
continuousness of the contact with the forum, not the continuouson the continuousness
existence in general.
ness of the property's
property's existence
A continuousness
continuousness test cannot
cannot encompass the full range of property
set
attributes that merit jurisdictional
jurisdictional attention. What is needed is a new set
of criteria for assessing property contacts, accompanied
accompanied by a greater
greater will253. The Supreme
Supreme Court first articulated
articulated this test in International
International Shoe, 326 U.S. at 317, further
Consol. Mining Co., 342 U.S. 437, 445-46 (1952),
(1952), and has consistexplained it in Perkins
Perkins v. Benguet ConsoI.
Helicopteros Nacionales
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416
416
ently applied it since then, see Helicopteros
(1985). Courts sometimes
See. eg.,
e.g., Gehling v. St. George's School of Medicine,
(1985).
sometimes rephrase the test. See,
Ltd., 773 F.2d 539, 541 (3d Cir. 1985)
"continuous and substantial forum
1985) (articulating a test of
of "continuous
forum
affiliations"); Reed v. American
American Airlines, Inc.,
Inc., 197 Mont. 34, 39, 640 P.2d 912, 915 (1982)
(1982) (applying
systematic" activities).
"substantial, continuous, and systematic"
a test of "substantial,
The International
International Shoe opinion itself does not appear to distinguish between
between systematic and
Compare 326 U.S. at 320 (characterizing
(characterizing the defendant's
defendant's forum activities as
substantial activities.
activities. Compare
continuous and systematic) with id.
id. at 318 (explaining that sometimes
sometimes "continuous
"continuous corporate operations within a state were
substantial" that they
were thought so substantial"
they justified general jurisdiction).
254. Real
systematic test.
Real property
property generally
generally will satisfy
satisfy a minimum contacts continuous and
and systematic
Barring a shift
permanent and therefore
shift in state
state boundaries,
boundaries, the presence of real estate in a forum is permanent
continuous.
moved or, except in extreme circumstances, destroyed.
destroyed. Tangible personal
continuous. It cannot be moved
property, on the other hand, can be moved out of the forum. Possibly, the length of time that movable property
continuousness; even
property was in the forum could be
be relevant to the contact's continuousness;
even then, other
other
factors such as how the property
of continuouscontinuousproperty entered the forum would affect any determination of
ness.
stock, bonds, promissory
ness. Intangible property such as paper securities, debts, certificates
certificates of stock,
notes, and franchises can have several fictional
fictional situses, which render it worthless as a jurisdictional
contact. In addition, the parties may dispute the duration
duration of intangible property's existence. For
example,
example, renegotiation
renegotiation of
of a debt often presents
presents the question
question whether a promissory
promissory note has been
been
problems regarding
regarding situs
situs for
for
renewed or replaced with a new note. For a discussion of some of the problems
intangible property, see
Jurisdictional Limits on Intangible
Intangible Property
Property in Eminent Domain:
Domain: FoFointangible
sec Note, Jurisdictional
cus on the Indianapolis
IndianapolisColts,
(1985).
Colts, 60 IND. L.J. 389, 394-95
394-95 (1985).
767
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ingness to consider property ownership as evidence
evidence that a corporate
corporate defendant is doing business
business in a forum. A new test for property's
property's
"simply mechanical
quantitative"; it
mechanical or quantitative";
sufficiency as a contact cannot be "simply
property. 2 55 Such a reshould depend
depend on the quality and nature of the property.255
quirement would consider the property's physical attributes: situs (real
or fictional), mobility, tangibility, and substantiality (i.e., quantity or
value).
(b) Tangibility
Tangibilityand mobility.
-The jurisdictional
(b)
mobility.-The
jurisdictional significance
significance of
of
an item of property is linked closely to the determinability
determinability of its situs,
which varies with both its tangibility and mobility. Justice Powell alludes to the importance
importance of situs in his Shaffer concurrence.
concurrence. While agreeing that the statutorily deemed
appellants' stock in Delaware
deemed presence of appellants'
could not sustain jurisdiction, Justice Powell "would
"would explicitly
explicitly reserve
judgment...
property whose
judgment ... on whether the ownership of some forms of property
situs is indisputably and permanently
located
within
a
State
may, withpermanently
out more, provide the contacts necessary
necessary to subject a defendant to juris. . . ."256
diction within the State ....
A definite and ascertainable
ascertainable situs supports the inference that a defendant's property link with a forum is conscious and involves more than
mere ownership, while the fictional
'fictional presence of intangible
intangible property
property provides weak evidence
d€:fendant's connection
connection with the forum. Thus,
vides'
evidence of a defendant's
the property that presumably
Shafpresumably justified
justified quasi in rem jurisdiction
jurisdiction in Shaffer,
presence in the state was but a fiction, confer, shares of stock whose presence
ferred no jurisdiction over the nonresident stock owners; these owners
"simply
nothing to
do with
with the
state of
of Delaware."257
Delaware."' 257 A person who
had nothing
to do
the state
"simply had
buys stock in a Delaware
Delaware corporation
corporation might even be unaware of the fictiof
property and the forum. In contrast, owners
owners of
tious link between the property
tangible property
property are aware of where they are using the property as soon
soon
as they use it.
In Rush v.v. Savchuk, the Supreme Court highlights the distinction
distinction
intangible property:
between tangible and intan,gible
Minnesota
[T]he fictitious presence of the insurer's obligation in Minnesota
does not, without more, provide a basis for concluding that there is
any contact
contact in the International
International Shoe sense between Minnesota and
the insured. To say tha.t
that "a
"a debt follows the debtor" is simply to
. say that intangible
intangible property has no actual situs, and a debt may be
jurisdiction over the debtor. State Farm
sued on wherever there is jurisdiction
States and the
is "found,"
''found,'' in the sense of doing business, in all 50 States
255.
256.
257.
International
Shoe, 326 U.S. at 319.
International Shoe,
186, 217 (1977)
(Powell, J., concurring).
Shaffer v. Heitner, 433 U.S. 186,217
(1977) (powell,
Id. at 216.
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District of Columbia. Under appellee's theory, the "debt" owed to
to
"present" in each of those jurisdictions simultane~
Rush would be "present"
simultaneIt is apparent
"contact"
jurisdicously. It
2 58 that such a "contact" can have no jurisdic~
tional significance. 258
Not all kinds of intangible property are equally prone to this objection. The situs of some kinds of intangible property is more determinable
than others. For example, the situs of a defendant's business reputation
is likely to follow the defendant's
defendant's location. Many locatable property
rights have little significance for minimum contacts analysis, however,
because they are likely to be incidental to some other general jurisdictional basis, such as the defendant's principal place of business or
or
domicile.
In contrast, tangible property, real or personal, has an objective situs. This fact has two relevant consequences. First, because only one
tus.
situs exists, only one forum can base jurisdiction on the property. Second, the property's one location enables a defendant to foresee the possibility of suit in that forum.
The ability to localize
localize a situs also depends
depends on mobility. Real property is a fixed, easily established tie between a defendant and the forum.
But the jurisdictional
jurisdictional link between a defendant's movable tangible property and the forum is contingent upon several factors.
Counting movable
movable property as a contact would require courts to
designate a time when the property's presence in the forum acquires jurisdictional
risdictional significance. The relevant issue for property
property related to the
controversy
should
be
the
location
of
the
property
property when
when the events giving
giving
controversy
rise to the cause of action
took
place. For unrelated
action
unrelated property, the issue
may differ. Courts might count
count certain
certain unrelated
unrelated contacts at the time the
litigation
litigation is before the court instead of the time the cause
cause of action
action arose.
For
example,
the
court
could
look
to
a
defendant's
current
For
look
defendant's current domicile instead
Transient presence similarly
similarly is a jurisdictional
jurisdictional
stead of a prior domicile. Transient
contact
contact obtained
obtained at a point in time after the cause of action arises. If the
contact
contact itself admittedly
admittedly is unrelated
unrelated to the cause
cause of action, its presence
in the forum need not necessarily
coincide with the time that the cause
necessarily coincide
cause of
of
action
arose.
action
Nevertheless,
Nevertheless, at a minimum
minimum courts
courts should limit
limit the time at which
which
they count movable property
as
a
jurisdictional
contact
to
either
the
time
property
jurisdictional contact either
when the events
giving
rise to suit occurred
occurred or the time when the court
events
court
must decide
count
decide whether to exercise
exercise jurisdiction. Courts
Courts should
should not count
arose beproperty removed from the forum before
before the cause
cause of action arose
258.
329-30 (1980).
258. 444
444 U.S.
U.S. 320, 329-30
(1980).
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cause its removal by the owner implies a conscious decision to sever that
tie with the forum.
In addition, fairness would dictate that movable property purposefully placed in the forum should have more jurisdictional
jurisdictional significance
the forum without its owner's knowledge. As
than property present in th~:
Helicopteros, "[U]nilateral
"[U]nilateral activity of anthe Supreme Court noted in Helicopteros,
other party or a third person is not an appropriate
appropriate consideration.
consideration- when
determining whether a defendant has sufficient contacts with a forum
jurisdiction. 259 Applied to movable propState to justify an assertion of
ofjurisdiction."259
erty, this language indicates that either the defendant or his agent must
have taken or sent the movable property into the forum. Limiting jurisdiction to situations in which the defendant
defendant is responsible for the property's presence
presence in the forum
forum also would be consistent
In
consistent with Shaffer.
Shaffer. In
26 0
overruling Harris
Harris v. Balk,
Balk,260
the Shaffer Court indicated that a third
party's fortuitous act of bringing a defendant's property
property into the forum
without the defendant's knowledge
or
consent
would no longer confer
confer
knowledge
1
26
261
jurisdiction.
jurisdiction.
(c) Quantity
Quantity and substantiality.-The
substantiality.-The substantiality of a de(c)
fendant's property contac:ts
contacts also has jurisdictional
jurisdictional significance.
Although overshadowed
overshadowed by the continuous and systematic
systematic activity requirement, substantiality nevertheless was a due process requirement in
in
262
Co.262
Mining Co.
ConsolidatedMining
Perkins
Perkins v. Benguet Consolidated
A substantiality criterion has commonsensical
defendant
commonsensical appeal: a defendant
who has entrusted huge sums of capital to a forum's banks or purchased
'[sland within Texas would seem to have a
a ranch the size of Rhode
Rhode Island
more significant
contact
with
the state than someone who bought one
significant
week per year of a time-share resort condominium
condominium or left a few filing
cabinets in the offices of a successor company. Of course, we should
sufficiency based solely on
avoid mechanical
mechanical guidelines for jurisdictional
jurisdictional sufficiency
on
monetary value or acreage, but most forms of property are more easily
quantified, in units of size or worth in dollars, than other sorts of contacts. These quantifications
quantifications could reveal at least partially the signifi(1984).
259. Helicopteros Nacionales
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984).
260. 198 U.S. 215 (1905).
(1905).
(1977).
261. See Shaffer v. Heitner, 433 U.S. 186, 208-09
208-09 (1977).
262. 342 U.S. 437, 447 (1952).
(1952). The
Th,~ Court noted:
It remains
remains only
consider...
issue of
of whether,
whether, as a matter of federal due process,
It
only to
to consider
... the
the issue
process, the
business
substantialand
business done in Ohio by the respondent mining company
company was
was sufficiently substantial
and
of such a nature as to permit Ohio
Ohio to entertain
entertain a cause of action against a foreign corporation, where the cause of action arose from activities entirely distinct from its activities in
Ohio.
Id. (emphasis added).
770
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General Jurisdiction
Jurisdiction
cance
attached to the property by either the defendant or the forum. For
cance attached
example, a court could consider how much of their own worth defendants have invested
invested in a state and what proportion the property bears to
that worth. Courts making this inquiry will equalize treatment among
defendants with few resources, a relatively small
defendants. For some defendants
amount of property might seem more important. The size of the investment from a defendant's point of view would also bear on fairness because
defendant
cause the investment's
investment's relative size could indicate whether
whether the defendant
was aware of the property ownership, or whether
whether such acquisitions rouaccountant, trustee, or employee.
employee.
tinely were made by an accountant,
F. A General
General Theme
F.
Several basic threads run through these different aspects of general
Several
jurisdiction. By hypothesis, general jurisdiction involves the adjudication
adjudication
of a controversy
controversy that is centered outside the forum. For such controversies, only a direct relationship between
between the forum and the defendant justifies the imposition of the state's coercive power. That relationship does
not rest upon the state's right to regulate the outside activities, but on its
power over the individual directly. The defendant's
defendant's local activities,
therefore,
substantial enough to justify such power; they cannot
cannot
therefore, must be substantial
be sporadic
occasional, even though sporadic
sporadic activities
activities themselves
sporadic or occasional,
might be subject
regulation when they are the source of the
subject to local regulation
dispute.
subject
For instance, persons who travel into the forum are properly subject
engage during that soto forum regulation of activities in which they engage
263 Travel into the state, however, does not give the state the right
journ.263
to regulate
travelers' activities elsewhere. Regulation of activities in
regulate the travelers'
the forum invokes
invokes specific
specific jurisdiction.
jurisdiction. Regulation
Regulation of activities outside
the forum requires general
general jurisdiction,
jurisdiction, which
which in turn
tum requires far more
extensive contacts
contacts between the forum and the individual than does specific
cific jurisdiction.
jurisdiction. For instance, a state in effect may require an individual's consent
condition of driving or doing
consent to specific jurisdiction
jurisdiction as a condition
business within the state. But a state may not reasonably
reasonably require this
individual, as a condition
occasional business, to concondition for mere entry or occasional
sent to general
general jurisdiction
jurisdiction over litigation arising outside of the state.
Considering adjudicative jurisdiction
jurisdiction in terms of the state's right to
regulate
regulate highlights a related choice-of-law
choice-of-Iaw problem: Under what circum263.
See, e.g., South
263. See.
South Carolina State Highway Dep't v. Barnwell
Barnwell Bros.,
Bros., 303 U.S. 177,
177, 184 (1938);
(1938);
Morris v. Duby, 274 U.S. 135, 143 (1927).
(1927). But
But see World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286, 298-99 (1980)
(1980) (holding that mere capacity to travel
travel into a state is an insufficient basis for
for
jurisdiction
jurisdiction if business
business contacts are lacking).
771
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Review
stances
stances does
does an affiliation
affiliation t6hat
fb.at justifies
justifies general
general adjudicative
adjudicative jurisdiction
jurisdiction
also justify
justify the application
application of forum law?
law? Although
Although this
this question
question presuppresupposes that general
general jurisdiction
jurisdiction in
in a given case is appropriate,
appropriate, the
the answer
answer
actually affects
affects the
the determination
determination whether
whether adjudicative
adjudicative jurisdiction
jurisdiction is appropriate. If
If the forum has the right
right to
to apply
apply its law, then local adjudicaadjudication presumably
presumably may be a reasonable
reasonable method towards that end. To
address this question, we next examine whether
whether a direct affiliation suffiof
cient to support general
general adjudication
adjudication also will
will support the
the application
application of
forum legislation.
III. The
The Choice-of-Law
Choice-of-Law Implications
Implications of General
General Jurisdiction
Jurisdiction
Substantial affiliations
affiliations that support
support general
general adjudicative
adjudicative power, such
such
in
certain
may
also
systematic
business,
and
in
continuous
as engaging
engaging
continuous
systematic
certain
circumstances support
such cases,
cases, we can
can
circumstances
support the application
application of local law. In such
explain general
general adjudicative
adjudicative power, just as we explain specific
specific adjudicaimplt::menting the right to regulate. Because those
tive power, in terms of implementing
defendant's acsubstantial affiliations
affiliations justify the state's regulation
regulation of the defendant's
tivities elsewhere, the state may assert adjudicative jurisdiction. This direct-affiliation justification
rect-affiliation
justification for adjudicative
adjudicative jurisdiction
jurisdiction then collapses
into the activities-regulation
activities-regulation justification
justification because
because both justifications
justifications ultimately depend on contacts
contacts that give the state a right to regulate. By
definition, the contacts supporting general
general adjudicative
adjudicative jurisdiction
jurisdiction are
unrelated to the subject matter of the litigation. Under what circumstances will these same contacts justify the application
application of forum law?
consider
Adjudicativejurisdiction
Adjudicative jurisdiction refers to a forum court's power to consider
legislaa case, while a forum court's power to apply forum law is termed legisla64
tive or choice-of-law jurisdiction.
jurisdiction. 2264
When litigation concerns activities
fcrum and the court has specific adjudicative
within the borders of the ferum
jurisdiction,
jurisdiction, we will call the forum court's ability to apply forum law
specific legislative
legislativejurisdiction.
specific
jurisdiction. Conversely, when litigation concerns
concerns activities outside the borders of the forum, and when the forum only has
of
unrelated
unrelated contacts with the litigating parties, we will call the ability of
forur law general
general legislative
legislativejurisdiction.
forum courts to apply forum
jurisdiction.
We argue that general legislative jurisdiction should exist only when
2 65
affiliation 265
with the individual
the forum bears an appropriate unique affIliation
1587 (1978). See generally
generally
Jurisdiction, 78
78 COLUM.
COLUM. L.
L. REV.
REv. 1587,
1587, 1587
See Reese, Legislative
Legislative Jurisdiction,
264. See
court's
(1969) (describing limitations on a court's
(SECOND) OF CONFLIc-T
RESTATEMENT (SECOND)
RESTATEMENT
CONFLICT OF LAWS § 9 (1969)
§§ 3,56-64
3, 56-64 (1968)
(1968) (discussing legislative
choice of
law); R. LEFLAR, AMERICA'l
AMERICAN CONFLICTS LAW §§
oflaw);
legislative
supra note 19,
19, § 9.2A, at 526-39 (describing due
law); R. WEINTRAUB,
WEINTRAUB, supra
jurisdiction and choice of law);
choice-of-law experimentation
experimentation is limof law and arguing that choice-of-Iaw
process limitation on aa state's choice cof
on the
the judicial jurisdiction
jurisdiction of state courts).
ited by restrictions on
See supra
H(A).
265. See
supra subpart II(A).
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contacts--citizenship or domicile,266
domicile, 266 primary
defendant. Four unique contacts--citizenship
place of residence, place of incorporation,
incorporation, and principal place of business-create forum rights that justify general legislative
legislative jurisdiction.
ness--create
Nonunique contacts, on the other hand, should not give rise to general
legislative jurisdiction. The contacts that will support general adjudicalegislative
tive jurisdiction, therefore, will support general legislative jurisdiction in
in
some cases but not others.
A.
Legislative Jurisdiction
JurisdictionTo Apply Procedural
ProceduralLaw
Law
Legislative
In cases involving conflict of state laws, the Supreme Court has emphasized
legislative jurisdiction
phasized that adjudicative and legislative
jurisdiction must be distinconstitutional standards exist for
guished, implying that separate constitutional
evaluating each type of jurisdiction. The Court has held that the asevaluating
sumption of adjudicative jurisdiction alone is insufficient to justify the
67
application of
forum law. 2267
Similarly, a mere demonstration
offorum
demonstration that a state
should have legislative
legislative jurisdiction
jurisdiction is insufficient
insufficient to justify state adjudica68
defendant.2268
over aa defendant.
jurisdiction over
tive jurisdiction
Adjudicative jurisdiction, however, automatically gives rise to legislative jurisdiction
jurisdiction over the procedural rules for activities within the
courts. Courts normally may apply their own rules of procedure, and
procedural
this practice makes sense if we characterize application of procedural
rules as specific legislative jurisdiction.
jurisdiction. Once a state becomes the forum,
activity.2 69
it has direct contacts with all courtroom
courtroom activity.269
Although the precise test for substance
substance versus procedure
procedure is problemproblem270
atic,
atic,27° a distinction does exist, at least in general
general terms. Substantive
Substantive law
is law that governs actual rights and remedies. It creates
creates the legal impliprocedural law
conduct outside the courtroom.
courtroom. Conversely,
Conversely, procedural
cations of conduct
governs the structure
of
litigation;
it
dictates
the rules within the courtstructure
2711 At the very
room. 27
very least, the forum's specific
specific contacts
contacts with the conroom.
litigation allow it to apply purely
purely procedural rules, rules that
that
duct of the litigation
substantive impact. Rules about the size of paper
paper
indisputably have no substantive
on which
which motions
motions must be filed or the hours during which
which the court will
hear cases presumably
procedure category.
presumably fall well within the pure procedure.
category. By
266.
"nationality,"
266. In the
the international
international context, the appropriate
appropriate term would
would be "citizenship"
"citizenship" or "nationality,"
while
appropriate term
"domicile."
while in the interstate
interstate context, the
the appropriate
term would be "domicile."
267.
Petroleum Co. v. Shutts, 472
267. See Phillips
PhilIips Petroleum
472 U.S. 797, 821 (1985)
(1985) (forbidding
(forbidding state from using
using
its
[adjudicative] jurisdiction
jurisdiction as an added weight
weight in
in the scale when considering
considering the
the
its "assumption
"assumption of [adjudicative]
permissible
substantive law").
law").
permissible constitutional
constitutional limits
limits on choice
choice of substantive
268.
268. See Kulko
Kulko v. Superior
Superior Court, 436
436 U.S. 84,
84, 98
98 (1978).
(1978).
269.
supra note 71,
between
269. See generally
generally L.
L. BRILMAYER,
BRILMAYER, supra
71, at 249-65
249-65 (explaining
(explaining the difference
difference between
substance
procedure and why
substance and
and procedure
why the forum
forum has
has the right to apply
apply its own
own procedural
procedural rules).
270.
See id.
270. See
id. at 250-52.
271.
271. See id.
id.
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virtue of its specific contacts
contacts with the process
process of litigation, however, the
forum also normally can apply rules with a clear procedural purpose,
272
even if they have some substantive
substantive impact.
impact. 272
B.
Legislative
Jurisdiction To Apply
Apply Substantive
Substantive Law
Legislative Jurisdiction
Law
Courts may apply the procedural law of the forum because adjudicative jurisdiction
jurisdiction creates
creates specific forum contacts
contacts with the litigation process
General adjudicative
in its courts. General
adjudicative jurisdiction, however, presupposes
that the forum has no direct contacts with the subject matter of the litigation. Thus, courts cannot justify the application of the forum's substanthat general legislative
legislative jurisdiction
jurisdiction derives from
tive law on the ground tha't
the forum's right to regulate the conduct that spawns the dispute.
jurisdiction must emanate from some other
Rather, general
general legislative
legislative jurisdiction
parties to the litigation.
state right to regulate
regulate the behavior of the parties
Supreme Court
Contrasting two Supn:me
Court choice-of-law
choice-of-law cases may afford a
better
implications of general adjudicative
adjudicative jurisdicbetter understanding of the implications
law. In Phillips
PhillipsPetroleum
Petroleum Co.
Shutts, 273 the defendCo. v. Shutts,273
tion for choice of
oflaw.
ant was clearly
clearly subject
subject to personal jurisdiction in the forum because
because it
carried on substantial business
there.
But,
business
the majority of the plaintiff
plaintiff
74
relaflonship to the forum.2274
The Court held that
class members had no relatitonship
the forum could not apply its law automatically
automatically to all the claims, but
but
must first perform a choice-of-law
choice-of-law analysis to determine
determine the applicable
5
275
law.27
Shutts presents an obvious case in which general adjudicative
adjudicative juShutts
risdiction
did
not confer general legislative jurisdiction.
risdiction
272. The power of federal courts to apply their procedural rules is particularly
particularly well established.
The Rules Enabling Act, 28 U.S.C.
(1982), gives the Supreme Court power to establish
U.S.C. § 2072 (1982),
establish general
motions, and the practice and procedure
procedure of
of
eral rules for the forms of process, writs, pleadings, and motions,
the federal courts. This authority is subject to the restriction
restriction that such
such rules shall not "abridge,
enlarge
Id. Virtually
substantive right."
right." [d.
Virtually every procedural
procedural rule has some substantive
substantive
enlarge or modify any substantive
impact; thus, the Court has
"incidental
has held that the Act's prohibition was
was not intended to restrict "incidental
effects
procedure." Hanna v. Plumer, 380 U.S.
U.S.
effects which
which necessarily attend the ac.option
at.option of new rules of procedure."
460,
465 (1965).
Hanna Court held that federal rules of procedure
procedure apply in diversity unless the
460,465
(1965). The
The Hanna
rule violates either the Rules Enabling
been
Enablinl~ Act
Act or the Constitution.
Constitution. See id. at 471.
471. No rule
rule yet has been
found to violate either of these restrictions, and courts have upheld applications
applications of procedural rules
with substantive
(1977) (holding
See, eg.,
e.g., Donovan
Donovan v. Penn Shipping
Shipping Co., 429 U.S. 648,
648, 649 (1977)
(holding
substantive impact. See,
that federal law bars plaintiff from appealing
a?pealing a remittitur order that he has accepted);
accepted); Hanna,
Hanna, 380
U.S.
acknowledged impact
process rule despite its acknowledged
U.S. at 473-74 (applying federal rule 4 instead of state process
upon the defendant's substantive right to repose
limitations); Davis
Davis v. Piper
repose under state statute of limitations);
15(c) and permitting
Aircraft Corp., 615 F.2d 606, 611-12 (4th Cir.) (enforcing federal
federal rule 15(c)
permitting relation
back of an amendment to a complaint in a diversity
diversity suit, which cured plaintiff's lack of capacity
even
cert. dismissed,
dismissed, 448 U.S.
U.S. 911 (1980);
(1980); see also R.
even though
though state law would not have done so), cert.
WEINTRAUB, supra
& n.84 (stating that after Hanna,
of
WEINTRAUB,
supra note 19, § 10.3, at 586-87
586-87 &
Hanna, all federal rules of
civil procedure
procedure probably
probably will triumph over conflicting
conflicting state rules).
273. 472 U.S.
(1985).
U.S. 797
797 (1985).
id. at 815.
274. See id.
id. at 821-22.
275. See id.
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In other cases, the facts that confer general adjudicative jurisdiction
jurisdiction
276 the
Skiriotes v.v. Florida,
also justify application
application of forum law. In Skiriotes
Florida,276
Supreme Court held that Florida could apply its regulations on the removal of sponges from the sea to a resident who conducted his activities
outside the territorial waters of the state. The Court recognized
recognized Florida's
right to regulate the activities of its own resident even when those activities occurred out of the state, a right derived solely from the state's pow277
The Court stressed that Florida's
Florida's
ers in relation to its citizens. 277
exclusive relationship to the parties conferred
conferred unrestricted power
power to ap278 The Skiriotes
Skiriotes Court specifically
specifically distinguished Florida's reply its law. 278
lationship with its citizens from the relationship
Massachusetts to the
lationship
relationship of Massachusetts
279 in which the Court had denied
parties in Manchester
Manchesterv.
Massachusetts,
v. Massachusetts,279
Massachusetts
Massachusetts the right to enforce
enforce its regulations against Rhode Island
80
limits.2280
Massachusetts' territorial
territoriallimits.
citizens in waters that were outside Massachusetts'
Costs of Legislative
Legislative Jurisdiction.
-At the outset, one may
1. The Costs
Jurisdiction.-At
standards for general adjudicative
adjudicative jurisdiction
wonder why the standards
jurisdiction ought to
legislative jurisdiction. Both raise isbe different from the standards for legislative
sues of political fairness, and both involve a state's right to assert coerAdjudicative jurisdiction
cive power over a protesting party. Adjudicative
jurisdiction implicates
the state's right to compel an individual to defend litigation in its courts
and to comply with its procedures
procedures for resolving disputes. Legislative jurisdiction involves state regulation
regulation of an individual's
individual's out-of-court
out-of-court activities. One might think that once the state's coercive
power
is established,
coercive
adjudicate and the right to apply
it would carry with it both the right to adjudicate
its own law. State power, however, is not so unitary. Adjudicative
Adjudicative and
therefore require differlegislative power differ in their implications and therefore
ent justifications.
justifications.
The assertion of adjudicative
adjudicative jurisdiction
jurisdiction only determines where a
case will be heard and what procedures
procedures will govern
govern the litigation. The
assertion of legislative jurisdiction, on the other hand, determines the
settlement for the parties. The differences
differences between
between
cost of judgment or settlement
the two are substantial. First, less is at stake with adjudicative
adjudicative jurisdiction. The minimum contacts
contacts standards for adjudicative
adjudicative jurisdiction
jurisdiction usually ensure that a party has some physical presence
presence in the forum state.
276. 313 U.S.
U.s. 69 (1941).
(1941).
277. See id.
id. at 77.
278. The
The Court explained
explained that "[n]o
"[n]o question
question as to the authority of the United States over
over these
waters, or over
over the sponge fishery, is here
here involved.
involved. No right of a citizen
citizen of any other
other state is here
asserted. The question is solely between appellant and his own state."
state." ld.
Id. at 76.
279. 139
139 U.S. 240 (1893).
(1893).
280. See Skiriotes,
Skiriotes, 313 U.S. at 77.
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Even when a defendant is not actually present in the forum at the time of
of
modem transportation
communications resources make
litigation, modern
transportation and communications
participation
participation in foreign litigation possible. Moreover, litigation is normally expensive in any state. Admittedly, a forum's exercise of adjudicative jurisdiction may burden a defendant with extra costs of litigating in a
more distant, a more inconvenient, and a less familiar forum. Yet these
additional costs will be relatively
relatively small compared to the overall costs of
litigation. Where
Where choice of law is not an issue, the doctrine of forum non
conveniens helps to prevent litigation where location
location is prejudicially
prejudicially in28 1
convenient to one of the
convenient
the parties.
palties. 281
Much
Much more is at stake with legislative jurisdiction.
jurisdiction. A party's cost
cost
for application
application of state law can vary greatly from state to state. A fosubstantive law may result in a judgment
rum's application
application of its own substantive
judgment
against the defendant
defendant that the law of another forum would not have im282 Rarely
posed. 282
Rarely will the unique costs that attend litigation in a particular forum exceed
exceed the costs that attend the possibility of full judgment
judgment
against a party. The costs imposed by legislative jurisdiction
jurisdiction include
both the cost of an actual judgment
judgment and the costs of an increase in the
opposing party's leverage
leverage in settlement negotiations. Although the
threat of forum location possibly may give a plaintiff
plaintiff some leverage
leverage in
in
settlement negotiations,
negotiations, the degree of leverage, absent some choice-of-law
choice-of-Iaw
See, e.g.,
(1981) (stating
281. See.
e.g., Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 n. 23 (1981)
(stating that dismissal
is proper if the balance
convenience; suggests that trial in the chosen forum would be unnecessabalance of convenience:;
rily burdensome
501, 507-08 (1947)
(1947) (stating
burdensome for the defendant); Galf
G.I1f Oil Corp. v. Gilbert, 330
330 U.S. 501,
that plaintiffs may not choose an inconvenient
"expense or trouble not
inconvenient forum to inflict on defendants
defendants "expense
necessary to [the] right to pursue [the] remedy"). To guide trial court discretion in deciding forum
non conveniens
Supreme Court has set forth a list of "private
"private interest factors"
conveniens questions, the Supreme:
factors" affecting the convenience
ia'. at 508, and a list of "public
"public interest factors" affecting
convenience of litigants, see ia'.
affecting the
convenience of the forum, see id.
-09. Private interests of the
convenience
id. at 50E
50E-09.
the litigants include practical
practical considerations that may make trial easier, more expeditious, and less expensive. Public
Public interests include
even distribution of administrative
administrative burdens
burdens among
among courts, local interest in deciding local controversies, and the appropriateness
appropriateness of holding the trial in a forum that is accustomed
accustomed to the state law that
must govern
govern the case.
In Asahi Metal Indus. Co. v. Superior
Superior Court, 107
107 S. Ct. 1026 (1987),
(1987), the Court considered
many of these factors in resolving a ptrsonal
personal jurisdiction challenge.
challenge. The Court considered the burden upon the Japanese defendant
defendant both in terms of distance
distance and the difficulty it would encounter
encounter
id. at 1034. The Court
Court held that California had minidefending itself in a foreign legal system. See id.
interest in resolving the matter
mal interest
matter and its courts were
were not suited to apply Japanese or Taiwanese
law to the dispute. See id.
id. Thus, the Court arguably
incorporated many
arguably has incorporated
many of the considerations
considerations
underlying forum non conveniens into
inte· the constitutional
constitutional standard of jurisdiction.
jurisdiction.
choice-of-law cases present situations in which the application
282. Indeed, the classic choice-of-Iaw
application of the
exacly opposite to the one that would
forum's law results in a judgment exacdy
would obtain under
under another state's
state's
law. For example, the forum's substantive law may bar suits by wives against
against their
their husbands
husbands while
the substantive law of the marital dom:cile may allow such suits. Thus, if the wife can prove liability
other completely determines
and damages against the husband, the choice of one state's law over the other
whether the wife wins or is denied a day in court. An example
297
example of such a case is Sesito v. Knop, 297
1961).
F.2d 33 (7th Cir. 1961).
776
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Jurisdiction
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consequences
consequences attendant to the choice of forum, will be minimal compared to the leverage
leverage caused by the threat of maximum judgment.
Our argument is not limited to the claim that adjudicative
adjudicative burdens
in foreign states are de minimis. More importantly, legislative jurisdiction creates
creates a zero-sum allocation
allocation of costs that generally is absent in adjudicative
jurisdiction.
A plaintiff
judicative
plaintiff normally will not gain from
adjudicative
adjudicative jurisdiction
jurisdiction whatever
whatever a defendant loses when the litigation
litigation
takes place in a particular
particular forum. While a plaintiff may prefer a forum
that the defendant dislikes, and while that forum may save a plaintiff
plaintiff
money and cost a defendant more, the plaintiff's
benefits
and
the
defendplaintiff's
ant's costs rarely, if ever, will be proportionate
proportionate because
because the defendant's
defendant's
loss in cases of adjudicative
adjudicative jurisdiction
plaintiff's
jurisdiction does not determine the plaintiff's
gain. The most expensive
expensive forum for the plaintiff also may be the most
most
expensive
expensive forum for the defendant. Similarly, the benefits that a plaintiff
plaintiff
gains by selecting a place to litigate normally do not correlate
correlate to the
losses that a defendant
defendant incurs because
because of that selection.
In contrast, choice of law is zero sum; the plaintiff's gain is the defendant's loss, and vice versa. Applying a law that benefits a plaintiff will
will
necessarily
necessarily harm a defendant in exact proportion to that benefit. Presumably, plaintiffs will always choose
choose the forum with law most advantageous to them, and given the zero-sum
choice-of-law
zero-sum nature of the choice-of-law
process, the defendant will bear the costs of this opportunity. While the
parties'
parties' common interest in avoiding mutually inconvenient forums allows them to rule out such
such forums for adjudicative jurisdiction, the defendant cannot rely on any common interest with the plaintiff
out
plaintiff to rule out
a truly irrational
irrational choice of law.
The plaintiff
plaintiff is likely to have only a few convenient
convenient forums. Setting
aside choice-of-law
choice-of-law considerations,
possibilities
considerations, increasing
increasing the number of possibilities
preferences or presbeyond these few is unlikely to change the plaintiff's preferences
ent additional problems for defendants. Being subject to adjudicative
adjudicative jurisdiction in a large
number
of
forums
does
not
harm
the defendant.
large
Assuming the plaintiff chooses a forum solely for convenience, multiplydefendant's
ing possible forums does not necessarily pose a threat to the defendant's
defendant an interest in avoidinterests. The plaintiff will share with the defendant
ing the majority of potential forums that would be mutually inconvenient. In contrast, increasing the plaintiff's
plaintiff's options as to legislative
jurisdiction necessarily
necessarily imposes
imposes costs on defendants because
because of the zerosum nature of choice of law. The plaintiff has an incentive to choose the
law that is least advantageous
advantageous to the defendant. Recent cases illustrate
that only when plaintiffs are able to forum shop for applicable law and
or
not just for forum location do they choose ridiculously
ridiculously inconvenient
inconvenient or
777
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1988
28 3
disinterested forums. 283
In this way, legislative
legislative jurisdiction creates
creates a cumulative burden that
In
adjudicative
jurisdiction
does
not
create.
This cumulative burden arises
adjudicative
doe8
important but distinct ways. First,
First, given the larger costs imposed
imposed
in two important
assertion of
of legislative jurisdiction, the potential costs to be borne
by the assertion
every time aa state's law becomes available.
by the defendant increase every
This result cumulates the pot.~ntia11y
potentially large costs of legislative jurisdiction.
Adjudicative jurisdiction
jurisdiction lacks these costs because the total cumulative
effect of having more states with adjudicative jurisdiction is limited by
difference between the most expensive and least exthe relatively
relatively small differenc~
pensive states in which the plaintiff might force the defendant to litigate.
The degree of benefit to the plaintiff
plaintiff and loss to the defendant resulting
choices is far less than the benefits and losses resultfrom multiple forum choices"is
substantive law choices.
ing from multiple substantive
The second cumulative burden caused by legislative jurisdiction is
increased likelihood of different outcomes caused by the accumulathe increased
tion of states with legislative jurisdiction. Even when the costs of litigation in different states vary for a defendant, having several states
burden because the possiavailable as potential forums itself adds no real burden
bility of different litigation outcomes
outcomes resulting from the choice of forums
will be negligible. Yet the varying approaches
approaches of different states to both
substantive law and choice-of-law
rules
increase the likelihood that the
choice-of-law
plaintiff
will
shop
for
the
forum
with
the
plaintiff
substantive law most harmful to
the defendant,
consequently that the defendant
defendant, and consequently
defendant will incur the maximum possible liability for the particular
particular claim. Moreover, the ability of
of a
greater
number
of
states
to
apply
their
own
substantive
law
increases
the
states apply
substantive
greater
likelihood of conflict
between
these
substantive
laws;
this
concern
conflict between
substantive
concern is
wholly absent when several states
adjudicative but not legislative
legislative
states have adjudicative
jurisdiction.
jurisdiction.
283.
283. For example, in Piper
Piper Aircraft,
Aircraft, the plaintiff, as representative
representative of
of the estates of several citicitizens
zens and
and residents
residents of
of Scotland
Scotland who were
were killed
killed in an airplane crash in Scotland, brought a wrongful
wrongful
death suit in a California state court against
manufacturers. The plaintiff
against defendant
defendant manufacturers.
plaintiff sought
sought to recover
liability theory, neither
neither of
of which
which were recognized
recognized by Scottish law.
cover under
under aa negligence
negligence or strict liabilily
Plaintiff
admitted that
she filed
Plaintiff admitted
that she
filed the
the action
action in
in the
the United
United States
States because
because its
its laws of liability, capacity
to
sue, and
favorable: to her position than those
those of Scotland.
Scotland. 454
454 U.S.
U.S. at 240; see
to sue,
and damages
damages were
were more favorable
also
1981) (stating
also Holzsager
Holzsager v. Valley Hosp., 646 F.2d
F.2d 792,
792, 798 (2d Cir. 1981)
(stating that
that although
although the
the "logical
"logical
place"
for plaintiff
action was New Jersey-where
Jersey-where the defendant
defendant
place" for
plaintiff to have
have brought her wrongful death action
was located
death-she was not
not
located and where
where the plaintiff
plaintiff and her husband
husband resided
resided at the time of his death-she
precluded
Ameritech
cf. Ameritech
precluded from forum shopping
shopping in an eflbrt
eflort to find a more advantageous
advantageous jurisdiction); cf.
Mobile Communications,
Communications, Inc. v. Cellular
Cellular Communications
Communications Corp.,
Corp., 664 F. Supp. 1175,
1175, 1182
1182 (N.D. I11.
Ill.
1987) (noting that plaintiffs
1987)
plaintiffs can choose any
any proper forum and that courts
courts should
should not disturb the
choice
transfer merely
than eliminates
eliminates inconvenience
if aa transfer
merely shifts
shifts rather
rather than
inconvenience to the parties);
parties); Heller
Heller Fin.,
Fin.,
choice if
Inc.
v. Nutra
F. Supp.
Nutra Food,
Food, Inc.,
Inc., 655
655 F.
Supp. 1432, 1434-35 (N.D. Ill. 1987)
1987) (asserting that
that the
the plaintiff's
plaintiff's
Inc. v.
choice of forum will
will not be
be disturbed
disturbed absent a clear showing
showing of inconvenience
inconvenience to the defendant).
778
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Jurisdiction
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subjection to the legislative
legislative jurisdiction
jurisdiction of a greater number of
of
Thus, subjection
states imposes burdens on parties that subjection to the adjudicative
adjudicative jurisdiction
risdiction of those states does not. Given
Given these burdens, the contacts
justifying general legislative
legislative jurisdiction
jurisdiction should be greater than those
contacts
general adjudicative
adjudicative jurisdiction. In cases
cases of specontacts that support general
cific jurisdiction, the forum may justifiably apply its laws because
because an activity has occurred within its borders. Generally,
can
Generally, no other state can
show a greater right to apply its law, and the application of forum law is
not unfair to the parties who acted within the forum. In cases of general
jurisdiction,
jurisdiction, however, the relationship between the forum and the parties
must justify some state right to apply forum law to an extraterritorial
extraterritorial
occurrence.
occurrence.
2. Unique
Unique Affiliations.-Generallegislative
Affiliations.-Generallegislative jurisdiction,
2.
jurisdiction, therefore,
should
should derive only from a unique
unique affiliation between a state and a party,
which gives that state a right to regulate all the party's activities regardless of where they might occur. Unique affiliations, because they are few,
subjection to authority
authority as do
do not pose the same threat of cumulative
cumulative subjection
nonunique
nonunique affiliations. Only four relationships between a state and a
party meet the uniqueness test required for general legislative jurisdiction: citizenship or domicile, primary
primary place of residence, incorporation,
and principal
place
of
business.
principal
The first of these unique affiliations, citizenship,
citizenship, vests an individual
with the rights and privileges of political participation
participation and state protection. These rights and privileges
in
turn
justify
individual duties of alleprivileges tum
giance
obedience to state law. A state can
giance to the government and obedience
regulate the activities of its citizens at home or abroad
abroad to protect and
benefit the interests both of the state and the citizens. As Justice McKenna explained,
[T]he government, by its very nature, benefits the citizen and his
property wherever
wherever found and, therefore, has the power to make the
benefit complete....
complete.... [T]he basis of the power to tax was not and
cannot be made dependent
property ... but
dependent upon the situs of the property...
upon [the
[the defendant's] relation as citizen
citizen to the
United
States and
284
citizen. 284
the relation of the latter to him as
as aa citizen.
285 the Supreme Court upheld
Similarly, in Blackmer v. United
United States,
an
States,285
act of Congress that required
required a citizen of the United States residing in
France
explained
France to return in order to give testimony at trial. The Court explained
that "[h]e
"[h]e continued to owe allegiance
allegiance to the United
United States. By virtue of
284. Cook v. Tait, 265 U.S.
u.s. 47, 56 (1924).
U.S. 421 (1932).
285. 284 u.s.
(1932).
779
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1988
the obligations
obligations of citizenship, the United States retained its authority
over him, and he was bound by its laws made applicable to him in a
country. '2 86
foreign country."286
The state rights present
citizenship relationship also exist in
in
present. in the citizenship
the relationship
between
a
state
and
a
company
incorporated
in the state.
stite
company
relationship
source: of state rights in this relationship is the
Perhaps the greatest source
287 By allowing incorporation,
state's creation of the corporation. 287
incorporation, the
state confers
confers the privilege of limited immunity
immunity to shareholders
shareholders and direc8
tors2288
along with other tax and institutional benefits that vary from state
8 9 By accepting these privileges, a corporation willingly
to state.2289
privileges,
submits
290 Like
corporation
to the state's regulation
regulation of its behavior. 290
citizens, a corporation
can enjoy the pleasures of its relationship to the state only if it accepts the
burdens
burdens the state imposes. Without a doubt, corporations rely on the
relative benefits
benefits and burdens
burdens of state corporation
corporation laws when deciding
29 1
291
incorporate.
to
where
.
Two
Two other unique relationships, principal place of business and prigeneral legislative
legislative jurisdiction.
jurisdiction. Bemary place of residence, also justify general
cause principal
place
of
business
and
primary
place
of
residence are by
principal place
definition exclusive relationships,
relationships, they will grant only one state an intercorporate o:r
o:T individual activities
activities beyond
beyond the state's borest in regulating
regulating corporate
ders. Only the unique contEcts
contacts of primary place of business or primary
place of residence will justify
legislative jurisdiction
justify general
genera/legislative
jurisdiction arising from
business activities or residence. The state of the principal place of business will be the state offering
offering the greatest
greatest privileges
privileges and benefits
benefits to the
292
292
business.
Likewise, the state of primary
primary residence will be the state
business.
286. ld.
Id. at 436. The Court
"one of the duties which the citizen owes to his
Court determined
determined that "one
government
justice by attending
attending its courts
courts and giving his testigovernment is to support the administration of justice
mony whenever he is properly summoned."
summoned." ld.
Id. at 438 (citing Blair v. United States, 250 U.S. 273,
273,
281 (1919)).
(1919)).
287. Cf
BusINSS CORP. Acr
ACT § 3.01(b)
(1984) ("A corporation engaging
CJ. REVISED MODEL
MODEL BUSINESS
3.01(b) (1984)
engaging in a
business that is subject to regulation
regulation under another statute of this state may incorporate
incorporate under this
Act only if permitted
to all limitations
of, the other statute.").
permitted by, and
and subject 10
limitations of,
288. Unless otherwise
otherwise provided in the articles of incorporation, shareholders are not personally
liable
id.
conduct. See id.
liable for the acts or debts of the corporation except by reason of their own acts or conduct.
§§ 6.22(b). Directors are not liable for their
Iheir official
official actions if they perform their duties in good faith
prudent person under similar circumstances. See id. § 8.30(d).
ordinary prndent
and with the care of an ordinary
generally N. LAiTlN,
LATrIN, LATrIN
CORPORATIONS 65 (2d ed. 1971)
1971) (noting the practical
289. See generally
LA"ITlN ON CORPORATIONS
practical
advantages of the corporation's
personality).
advantages
corporation's legal J:ersonality).
See, e.g.,
ANN. tit. 8, § 101(b) (1983)
(1983) (providing that incorporation
incorporation is available
available
290. See,
e.g., DEL. CODE ANN.
for the conduct
conduct or promotion
promotion of lawful business). Federal
Federal law frequently treats
treats place of incorporation as the place of citizenship.
citizenship. For example, in defining diversity jurisdiction,
jurisdiction, the United States
Judicial Code
incorporated and of
"a citizen
citizen of any state by which
which it has been incorporated
Code deems a corporation
corporation "a
the state where it has its principal
(1982).
principal place
plal:e of business."
business." 28 U.S.C. § 1332 (1982).
291. See supra
291.
supra note 58.
"looks to the
292. Professor Wright suggests
suggests that the rule for locating principal place of business
business "Iooks
place where the bulk of the corporate
corporate activity takes
one state in which this is
takes place, if there is any
anyone
true, while resorting to the location of the home
home office only if the corporation's activities are dis-
780
HeinOnline -- 66 Tex. L. Rev. 780 1987-1988
General Jurisdiction
Jurisdiction
of
from which an individual receives the greatest privileges
privileges and benefits of
residency; undoubtedly,
residency;
undoubtedly, the amount of time spent at a particular residence will be the critical element for determining this state.
Of course, a party's principal
principal place of business may be in a state
incorporation, or a party may be a citizen of one
other than the state of incorporation,
residence in another state. Nonethestate and have a primary place of residence
less, the four unique
affiliations,
citizenship,
incorporation, priunique affiliations, citizenship, place of incorporation,
business, at least can
mary place of residence, and principal place of business,
minimize the chance
chance that conflicts
conflicts will arise by limiting the number of
of
states that could
could assert general jurisdiction.
Nonunique relationships
relationships should not support general
general legislative
legislative jurisimpose on defendants. These
These reladiction because
because of the costs this would impose
or
doing
business,
do
not confer
tionships, such as a vacation residence
confer
residence
privileges and benefits
benefits on a party that unique
unique affiliations
the types of privileges
confer. Moreover, many states will have nonunique affiliations with a
particular person or legal entity; using such affiliations to support general
legislative jurisdiction
inconsistent
jurisdiction would create
create the risk of cumulative or inconsistent
overlapping regulation. Making such relationships
relationships the basis of general
legislative
jurisdiction also would encourage forum shopping and subject
legislative jurisdiction
subject
parties to unpredictable
unpredictable and unfairly
unfairly increased burdens from their activities. Many
Constitutional limiMany companies do business in all fifty states. Constitutionallimi293 would be rendered meaningless
tations on choice of law293
meaningless if any of the
fifty states could apply its law to all the activities of a company. Indeed,
the Supreme
Phillips Petroleum
Petroleum Co.
Co. v.
v. Shutts indicated
indicated that a
Supreme Court in Phillips
company does not acquiesce
acquiesce in application
application of forum law to all its activities across the nation simply because it engages
engages in unrelated business ac294
forum.
the
in
tivities
294
Our argument that unique affiliations confer legislative jurisdiction
jurisdiction
finds noteworthy support in a recent Supreme
Supreme Court case dealing with
the proper reach of state law under the commerce
Corp.
commerce clause. In CTS Corp.
296
law296
upheld an
America,295 the Court upheld
Corp. of America,295
Dynamics Corp.
v.
v. Dynamics
an Indiana
Indiana law
regulating
regulating tender offers for stock in Indiana
Indiana corporations
corporations against
against a commerce clause challenge. The commerce
clause
argument
relied upon a
commerce
plurality opinion
v. MITE Corp., which invalidated
invalidated a similar
similar
opinion in Edgar
Edgar v.
Illinois statute
statute for corporations
corporations that did a threshold amount of business
persed
supra note 176,
persed among several states and no one state clearly predominates."
predominates." C. WRIGHT, supra
§§ 27, at 153.
19.
293. See supra
supra note 19.
294. See 472 U.S. 797, 818-19 (1985).
(1985).
295. 107 S.
S.Ct. 1637 (1987).
(1987).
ANN. § 23-1-42-1
23-1-42-1 (West Supp. 1987).
296. IND. CODE
CODE ANN.
1987).
781
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97 The
within the state.2297
CTS Court distinguished MITE on the grounds
that the Indiana law applied. only to local corporations,
corporations, and remarked,
"So
long
as
each
State
regulates
voting
rights
only in the corporation
corporation it
"So
has created, each corporation
corporation will be subject to the law of only one
298
state.
state.""298
CTS and MITE both involved statutes asserting general legislative
jurisdiction.
of the
jurisdiction. Both laws regulated activities going on outside .of
state-the tender
tender of stock--when
stock--when the regulated party had the proper
proper
statutory affiliation with the state. The only difference between the two
comparable to the
cases was that MITE rested on a nonunique affiliation, comparable
doing business
test
for
adjudicative
jurisdiction,
while
the CTS law inbusiness
adjudicative
volved a unique affiliation, the place of incorporation.
By
affecting only
incorporation.
a unique affiliation, the law in CTS minimized or even eliminated the
possibility of cumulative or inconsistent
inconsistent regulation.
IV.
IV.
Conclusion
Conclusion
We saw at the outset that domicile, place of incorporation,
incorporation, and principal place of business were the paradigm
paradigm bases for general adjudicative
adjudicative
jurisdiction.
jurisdiction. The reasons should now be clearer. These are relationships
relationships
so direct that they make fair the assertion of state adjudicative
adjudicative power or
legislative authority. They are unique afftliations
affiliations that an individual or
legislative
legal entity normally will have with only one state.
These bases provide
provide the standard for evaluating other
other bases for general
jurisdiction.
Is
an
affiliation
closely
enough
analogous
eral jurisdiction.
analogous to these
unique relationships that it justifies assertion of state power? Indeed,
several
several nonunique affiliations
affiliations are similar enough to support general adjudicative jurisdiction. These nonunique affiliations, however, are inadequate to support state le~~slative
legislative power. Legislative
Legislative power
power creates
greater cumulative burdens on a defendant than does adjudicative
adjudicative power.
difference between
These cumulative burdens make the central difference
between unique
and nonunique
affiliations-that a party may have many nonunique
nonunique afftliations-that
nonunique affiliations but will usually have only one of a particular
particular unique affiliationaffiliationcrucial
crucial in the legislative
legislative jurisdiction
jurisdiction context.
Both legislative and adjudicative jurisdiction
jurisdiction must derive from the
fair exercise of state coercive
coercive power. General jurisdiction, of both sorts,
depends
depe~ds upon a particular sort of fairness. Unlike specific
specific jurisdiction,
which derives from a state's.
regulate local activities, general justate's. right to regulate
risdiction
risdiction depends on the fairness of regulating
regulating the activities of insiders,
297. See 457 U.S. 624,'641-43
624,'641-43 (1982).
(1982).
S.Ct. at 1649.
298. 107 S.
782
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General Jurisdiction
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regardless of where the activities occur. Although fairness in a given
given
case depends upon whether the state is only instructing the defendant to
defendant's priinstead is imposing its rules upon the defendant's
appear in court or instead
mary conduct, the basic principles
underlying
the
exercise
of both types
principles
of general jurisdiction, adjudicative
adjudicative and legislative, remain the same.
general jurisdiction is born
boru of a perspective
perspecti"e founded
This general view of general
exercise of power by sovereign states.
on a theory
theory of the legitimate exercise
783
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