변호사 이재욱의 미국법 이야기 (Attorney Lee's commentary about U.S. law)

Jurisdiction 
1. jurisdiction - difference between personal, in rem and quasi in rem

2. federal jurisdiction

3. Jurisdiction Information from Lexis- Nexis summary (see http://profj.us/summary) on law 11 - Civil Procedure

JURISDICTION OVER THE PARTIES
I. GENERAL PRINCIPLES
A. Two kinds of jurisdiction: Before a court can decide a case, it must have jurisdiction over the parties as well as over the subject matter. [7]
1. Subject matter jurisdiction: Subject matter jurisdiction refers to the court’s power to decide the kind of case before it. (Examples of subject matter jurisdiction issues: (1) Does the federal court for the District of New Jersey have the power to decide cases in which the two parties are citizens of different states? (2) Does the Binghamton Municipal Court have the power to decide cases involving more than $1,000?)
2. Jurisdiction over the parties: Jurisdiction over the parties refers to whether the court has jurisdiction to decide a case between the particular parties, or concerning the property, before it. (Examples of issues concerning jurisdiction over the parties: (1) Does Court X have jurisdiction over D, who is a citizen of State X, but who is temporarily out of the state? (2) Does Court Y have jurisdiction over property in State Y where the action is one by P to register title to the land in his name?)
B. Jurisdiction over the parties: There are two distinct requirements which must be met before a court has jurisdiction over the parties: [8]
1. Substantive due process: The court must have power to act, either upon given property, or on a given person so as to subject her to personal liability. The Constitution’s Fourteenth Amendment Due Process Clause imposes this requirement of power to act, as a matter of "substantive due process."
2. Procedural due process: Also, the court must have given the defendant adequate notice of the action against him, and an opportunity to be heard. These, taken together, are requirements of procedural due process, also imposed by the Fourteenth Amendment’s Due Process Clause.
C. Three kinds of jurisdiction over the parties: There are three different kinds of jurisdiction which a court may exercise over the parties – one of these three must be present for the case to go forward. [8]
1. In personam: In personam jurisdiction, or jurisdiction over the defendant’s "person," gives the court power to issue a judgment against her personally. Thus all of the person’s assets may be seized to satisfy the judgment, and the judgment can be sued upon in other states as well. [8]
2. In rem: In rem jurisdiction, or jurisdiction over a thing, gives the court power to adjudicate a claim made about a piece of property or about a status. (Examples: An action to quiet title to real estate, or an action to pronounce a marriage dissolved.) [8]
3. Quasi in rem jurisdiction: In quasi in rem jurisdiction, the action is begun by seizing property owned by (attachment), or a debt owed to (garnishment) the defendant, within the forum state. The thing seized is a pretext for the court to decide the case without having jurisdiction over the defendant’s person. Any judgment affects only the property seized, and the judgment cannot be sued upon in any other court. [8]
4. Minimum contacts requirement: If jurisdiction in the case is in personam or quasi in rem, the court may not exercise that jurisdiction unless D has "minimum contacts" with the state in which the court sits. In brief, the requirement of minimum contacts means that D has to have taken actions that were purposefully directed towards the forum state. (Examples of the required action: D sold goods in the state, or incorporated in the state, or visited the state, or bought property in the state, etc.) Without such minimum contacts, exercise of jurisdiction would violate D’s Fourteenth Amendment federal constitutional right to due process. [8]
a. Unreasonable exercise: Even if D has the requisite "minimum contacts" with the forum state, the court will not exercise jurisdiction if considerations of "fair play and substantial justice" would require making D defend in the forum state so unreasonable as to constitute a due process violation. But in most cases, if D has the required minimum contacts with the forum state, it will not be unreasonable for the case to be tried there.
D. Long-arm statute: Most states have "long-arm statutes." A long-arm statute is a statute which permits the court of a state to obtain jurisdiction over persons not physically present within the state at the time of service. (Example: A long-arm might allow jurisdiction over an out-of-stater who has committed a tort in the state.) [9]
1. Substitute service: Long-arms typically provide for "substitute" means of service, since in-state personal service is not possible. (Example: A long-arm statute might allow the plaintiff to cause the defendant to be served out of state by registered mail.)
II. JURISDICTION OVER INDIVIDUALS
A. Different categories: In most states, there are a number of different criteria which will enable the court to take personal jurisdiction over an individual. Some of the most common (each of which will be considered in detail below) are: [9]
1. Presence within the forum state;
2. Domicile or residence within the forum state;
3. Consent to be sued within the forum state;
4. Driving a car within the forum state;
5. Committing a tortious act within the state (or, perhaps, committing an out-of-state act with in-state tortious consequences);
6. Ownership of property in the forum state;
7. Conducting business in the forum state;
8. Being married in, or living while married in, the forum state.
Note: Regardless of the criteria used by the state and its long-arm for establishing personal jurisdiction over the individual, due process requires that the individual have minimum contacts with the forum state before personal jurisdiction may be exercised over her. The meaning of "minimum contacts" is discussed further below in the treatment of jurisdiction over corporations.
B. Presence: Jurisdiction may be exercised over an individual by virtue of his presence within the forum state. That is, even if the individual is an out-of-state resident who comes into the forum state only briefly, personal jurisdiction over him may be gotten as long as service was made on him while he was in the forum state. [10]
Example: D and his wife, P, separate while residing in New Jersey. P moves to California with their children. D visits California on business, and stops briefly to visit the children. While D is visiting, P serves him with process in a California suit for divorce. D never visits the state again.
Held, California can constitutionally assert personal jurisdiction over D based on his presence in the state at the time of service, even though that presence was brief, and even though D had virtually no other contacts with the state. [Burnham v. Superior Court].
C. Domicile: Jurisdiction may be exercised over a person who is domiciled within the forum state, even if the person is temporarily absent from the state. A person is considered to be domiciled in the place where he has his current dwelling place, if he also has the intention to remain in that place for an indefinite period. [11 - 13]
D. Residence: Some states allow jurisdiction to be exercised on the basis of D’s residence in the forum state, even though he is absent from the state. A person may have several residences simultaneously. (The Supreme Court has not yet passed on the due process validity of jurisdiction based solely on residence, so this remains presumptively a valid method of gaining jurisdiction.) [13]
E. Consent: Jurisdiction over a party can be exercised by virtue of her consent, even if she has no contacts whatsoever with the forum state. [14]
Example: P, who does not reside in Ohio or have any other contacts with Ohio, brings suit against D in Ohio. By filing the suit in Ohio, P will be deemed to have consented to Ohio’s jurisdiction. D may then counterclaim against P. Even if P dismisses his own suit, his consent to the action will be binding, and the Ohio courts will have personal jurisdiction over him on the counterclaim.
F. Non-resident motorist: Most states have statutes allowing the courts to exercise jurisdiction over non-resident motorists who have been involved in accidents in the state. [15]
Example: P is a resident of the forum state. D, not a resident of the forum state, is driving his car in the forum state, and has a collision with P’s car. Even if D has no other contacts with the state, a non-resident motorist statute will probably be in force in the state, and will probably give the forum state’s courts jurisdiction over a tort suit by P against D.
1. Service on state official: Most of the non-resident motorist statutes provide for in-state service of process on a designated state official (e.g., the Director of Motor Vehicles) and for registered mail service on the out-of-state defendant himself. [16]
G. In-state tortiousness: Many states have statutes allowing their courts jurisdiction over persons committing tortious acts within the state. [16]
Example: D, an out-of-stater, gets into a fight with P at a bar in P’s home state. P wants to bring a civil battery claim against D in the state. If, as is likely, the state has a long-arm provision governing tortious acts within the state, P will be able to get personal jurisdiction over D in the battery action.
1. Out-of-state acts with in-state consequences: Some "in-state tortious acts" long-arm clauses have been interpreted to include acts done outside the state which produce tortious consequences within the state. In a products liability situation, a vendor who sells products that he knows will be used in the state may constitutionally be required to defend in the state, if the product causes injury in the state. [Gray v. American Radiator Corp.] [16]
H. Owners of in-state property: Many states exercise jurisdiction over owners of in-state property in causes of action arising from that property. [18]
I. Conducting business: States often exercise jurisdiction over non-residents who conduct businesses within the state. Since states may regulate an individual’s business conduct in the state, they may constitutionally exercise jurisdiction relating to that doing of business. [19]
J. Domestic relations cases: Courts sometimes try to take personal jurisdiction over a non-resident party to a domestic relations case. However, the requirement of "minimum contacts" applies here (as in every personal jurisdiction situation), and that requirement may bar the state from taking jurisdiction. [26]
Example: A father resides in New York, and permits his minor daughter to go to California to live there with her mother. Held, the father does not have sufficient minimum contacts with California to allow the mother to bring an in personam suit in California against him for increased child support. [Kulko v. Superior Court]
III. JURISDICTION OVER CORPORATIONS
A. Domestic corporations: Any action may be brought against a domestic corporation, i.e., one which is incorporated in the forum state. [21]
B. Foreign corporations generally: A state is much more limited in its ability to exercise jurisdiction over a foreign corporation (i.e., a corporation not incorporated in the forum state). [22 - 27]
1. Minimum contacts: The forum state may exercise personal jurisdiction over the corporation only if the corporation has "minimum contacts" with the forum state "such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’" [International Shoe Co. v. Washington] [22 - 23]
2. Dealings with residents of forum state: Usually, a corporation will be found to have the requisite "minimum contacts" with the forum state only if the corporation has somehow voluntarily sought to do business in, or with the residents of, the forum state. [23 - 27]
Example 1 (minimum contacts found): D has no activities in Washington except for the activities of its salesmen, who live in the state and work from their homes. All orders are sent by the salesmen to the home office, and approved at the home office. The salesmen earn a total of $31,000 per year in commissions.
Held, the company has minimum contacts with Washington. [International Shoe Co.]
Example 2 (minimum contacts found): D is a Texas insurance company. It does not solicit business in California. However, it takes over, from a previous insurance company, a policy written on the life of X, a California resident. D sends X a new policy; X sends premiums from his California home to D’s out-of-state office. X dies; P (the beneficiary under the policy) is a California resident. P sues D in California for payment under the policy.
Held, D has minimum contacts with California, and can thus be sued in personam there in a suit by P for payment on the policy. [McGee v. International Life Ins. Co.]
Example 3 (minimum contacts not found): D is a Delaware bank, which acts as trustee of a certain trust. S, the settlor of the trust, is a Pennsylvania resident at the time she sets up the trust. Years later, she moves to Florida. Later, her two children, also Florida residents, want to sue D in Florida for a judgment that they are entitled to the remaining trust assets. D has no other contacts with Florida.
Held, D does not have minimum contacts with Florida, and therefore, cannot be sued in personam there. [Hanson v. Denckla]
Note: The key idea is that D will be found to have minimum contacts with the state only if D has purposely availed itself of the chance to do business in the forum state. Thus in McGee (Example 2 above), the insurance company offered a policy to someone who it knew was a resident of the forum state. In Hanson (Example 3 above), by contrast, the trustee never voluntarily initiated business transactions with a resident of the forum state or otherwise voluntarily did business in the state – it was only S’s unilateral decision to move to the forum state that established any kind of connection with that state, so minimum contacts did not exist.
C. Use of agents: Sometimes an out-of-state company does not itself conduct activities within the forum state, but uses another company as its agent in the state. Even though all business within the state is done by the agent, the principal (the foreign corporation) can be sued there, if the agent does a significant amount of business on the foreign company’s behalf. [27]
D. Operation of an Internet Website that reaches in-staters: A hot question today is whether the operation of an Internet Website that’s hosted outside the forum state, but that’s accessed by some in-staters, constitutes minimum contacts with the state. The main issue is, did the Website operator intended to "target" residents of the forum state? If yes, there are probably minimum contacts; if no, there probably aren’t. [27 - 29]
1. Passive site that just posts information: So if an out-of-state local business just passively posts info on the Web, and doesn’t especially want to reach in-staters or conduct transactions with them, this probably doesn’t amount to minimum contacts, even if some in-staters happen to access the site.
Example: D operates a local jazz cafe in a small town in Kansas. He puts up a Website with a schedule of upcoming events, and uses a trademark belonging to P on the site. P, based in New York, sues D in N.Y. federal court for trademark infringement. Even though a few New Yorkers may have accessed D’s site, this won’t be enough to constitute minimum contacts with N.Y., because D wasn’t trying to attract business from N.Y. [Cf. Cybersell, Inc. v. Cybersell, Inc.]
2. Conducting transactions with in-staters: But if D runs an "e-commerce" site that actively tries to get in-staters to buy stuff from the site, and some do, that probably will be enough to constitute minimum contacts with the state, at least where the suit relates to the in-staters’ transactions. (And if the Web-based transactions with in-staters are "systematic and continuous," as discussed in the next paragraph, then these contacts will even be enough for jurisdiction in the state on claims not relating to the in-state activities.) [32]
E. Claims unrelated to in-state activities: The above discusses generally assumes that the claim relates to D’s in-state activities. Where the cause of action does not arise from the company’s in-state activities, greater contacts between D and the forum state are required. The in-state activities in this situation must be "systematic and continuous." [29 - 31]
Example: D is a South American corporation that supplies helicopter transportation in South America for oil companies. D has no contacts with Texas except: (1) one negotiation there with a client, (2) the purchase by D of 80% of its helicopter fleet from a Texas supplier, (3) the sending of pilots and maintenance people to Texas for training, and (4) the receipt out-of-state of two checks written in Texas by the client. D is sued in Texas by the Ps (Texas residents) when they are killed in South America while being transported by D.
Held, the Ps cannot sue D in Texas. Because the Ps’ claims did not arise out of D’s in-Texas activities, those Texas contacts had to be "systematic and continuous" in order to be sufficient for jurisdiction. The contacts here were too sparse for that. [Helicopteros Nacionales de Colombia v. Hall]
F. Products liability: The requirement of "minimum contacts" with the forum state has special bite in products liability cases. [32 - 37]
1. Effort to market in forum state: The mere fact that a product manufactured or sold by D outside of the forum state finds its way into the forum state and causes injury there is not enough to subject D to personal jurisdiction there. Instead, D can be sued in the forum state only if it made some effort to market in the forum state, either directly or indirectly. [33]
Example: The Ps are injured in Oklahoma in an accident involving an allegedly defective car. They had purchased the car in New York while they were New York residents. The Ps sue in Oklahoma. D1 is the distributor of the car, who distributed only on the East Coast. D2 is the dealer, whose showroom was in New York. Neither D1 nor D2 sold cars in Oklahoma or did any business there.
Held, neither D may be sued in Oklahoma. Neither D had made efforts to "serve directly or indirectly" the Oklahoma market. Any connection between the Ds’ product and Oklahoma was merely an isolated occurrence, completely due to the unilateral activity of the Ps. [World-Wide Volkswagen v. Woodson]
2. Knowledge of in-state sales enough: But if the out-of-state manufacturer makes or sells a product that it knows will be eventually sold in the forum state, this fact by itself is probably enough to establish minimum contacts. However, if this is the only contact that exists, it may nonetheless be "unreasonable" to make D defend there, and thus violate due process. [34 - 37]
Example: P is injured while riding a motorcycle in California. He brings a products liability suit in California against, inter alia, D, the Taiwanese manufacturer who made the cycle’s rear innertube. D "impleads" X, the Japanese manufacturer of the tube’s valve assembly, claiming that X must pay D any amount that D has to pay to P. X has no contacts with California, except that X knew that: (1) tires made by D from X’s components were sold in the U.S., and (2) 20% of the U.S. sales were in California. The P-D suit has been settled but the D-X case is to be tried.
Held, X had minimum contacts with California, because it put its goods into a stream of commerce that it knew would lead many of them to California. But despite these minimum contacts, it would be "unreasonable and unfair" – and thus a violation of due process – for California to hear the case, because of the burden to X of having to defend in California, the slenderness of California’s interest in having the case heard there, and the foreign relations problems that would be created by hearing an indemnity suit between two foreign corporations. [Asahi Metal Industry Co. v. Superior Court]
G. Unreasonableness: As the case in the above example shows, even where minimum contacts exist, it will be a violation of due process for the court to hear a case against a non-resident defendant where it would be "unreasonable" for the suit to be heard. The more burdensome it is to the defendant to have to litigate the case in the forum state, and the slimmer the contacts (though "minimum") with the forum state, the more likely this result is to occur. [35]
H. Suits based on contractual relationship: The requisite "minimum contacts" are more likely to be found where one party to a contract is a resident of the forum state. But the fact that one party to a contract is a resident does not by itself automatically mean that the other party has "minimum contacts" – the existence of a contract is just one factor to look at. [37 - 40]
1. Contractual relationship involving the state: Where the contract itself somehow ties the parties’ business activities into the forum state, this will be an important factor tending to show the existence of minimum contacts. For instance, if one party is to make payments to the other, and the latter will be receiving the payments in the forum state, this stream of payments coming into the state is likely to establish minimum contacts and thus to permit suit against the payor.
Example: D runs a fast food restaurant in Michigan under franchise from P, which has its headquarters in Florida. The contract requires D to make royalty payments to P in Florida.
Held, P may sue D in Florida. The fact that the payment stream comes into Florida is an important factor, though not by itself dispositive, in the court’s conclusion that there were minimum contacts with Florida. [Burger King Corp. v. Rudzewicz]
2. Choice-of-law clause: Where there is a contract between the parties to the suit, the fact that the contract contains a choice of law clause requiring use of the forum state’s law will also be a factor (though not a dispositive one) tending towards a finding of minimum contacts. (Example: On the facts of the above example, the franchise contract stated that Florida law would be used. This was a factor helping lead the court to conclude that D had minimum contacts with Florida.) [40]
3. "Reasonable anticipation" of defendant: In suits relating to a contract, as with any other kind of suit, the minimum contacts issue always boils down to this: Could the defendant have reasonably anticipated being required to litigate in the forum state? The fact that the other party was a resident of the forum state, the fact that a stream of payments went into the forum state, and the fact that the forum state’s law was to be used in the contract, are all non-dispositive, but important, factors tending towards the conclusion that the out-of-stater had minimum contacts with the forum state. [40]
I. Class action plaintiffs: An "absent" plaintiff in a class action that takes place in the forum state may be bound by the decision in the case, even if that plaintiff did not have minimum contacts with the forum state. [Phillips Petroleum Co. v. Shutts] [40 - 42]
J. Libel and slander cases: The First Amendment imposes certain limits on the substantive libel and slander laws of the states (e.g., that no "public figure" may recover without a showing of "actual malice"). But this special first amendment protection does not affect the personal jurisdiction requirements for libel and slander suits – no more extensive contacts between D and the forum state must be shown in defamation suits than in any other type of case. [Calder v. Jones] [42]
IV. FEDERAL JURISDICTION OVER THE PARTIES
A. General principles: To determine whether a federal court has personal jurisdiction over the defendant, you must check three things: [45]
1. Territory for service: Whether service took place within the appropriate territory;
2. Manner of service: Whether the service was carried out in the correct manner; and
3. Amenability: Whether the defendant was "amenable" to the federal suit.
B. Territory for service: [46 - 49]
1. General rule: As a general rule, in both diversity actions and federal question cases, service of process may be made only: (1) within the territorial limits of the state in which the District Court sits; or (2) anywhere else permitted by the state law of the state where the District Court sits. FRCP 4(k)(1)(A). [45]
Example (within the territorial limits of state): P sues D in a federal action in the Northern District of Ohio. Whether the suit is based on diversity or federal question, service will be territorially valid if D is served with process anywhere within the state of Ohio, since this is the state where the district court sits. This is true even if service is physically made in the Southern District of Ohio.
Example (out-of-state service based on state law): Under the New Jersey long-arm statute, if a non-resident is involved in a motor vehicle accident inside New Jersey with a New Jersey resident, the New Jersey resident may serve the non-resident outside New Jersey, and the New Jersey courts may then exercise personal jurisdiction. P, a New Jersey resident, and D, a California resident, have an accident in New Jersey. P may sue D in diversity in federal District Court for New Jersey; P may serve D with process in California, because the long-arm of the state where the district court sits (New Jersey) would allow such service. FRCP 4(k)(1)(A).
2. 100-mile bulge: A special 100-mile bulge provision (FRCP 4(k)(1)(B)) allows for out-of-state service sometimes, even if local law does not permit it. When the provision applies, it allows service anywhere (even across a state boundary) within a 100-mile radius of the federal courthouse where suit is pending. The bulge provision applies only where out-of-staters will be brought in as additional parties to an already pending action. There are two types of parties against whom it can be used: [47 - 48]
a. Third-party defendants: Third-party defendants (FRCP 14) may be served within the bulge.
Example: P sues D in a New Jersey federal district court diversity action. D claims that if D is liable to P, X is liable to D as an indemnitor. The suit is pending in Newark, less than 100 miles from New York City. D may serve X in New York City, even if no New Jersey long-arm statute would allow the suit.
b. Indispensable parties: So-called "indispensable parties" – that is, persons who are needed in the action for just adjudication, and whose joinder will not involve subject matter jurisdiction problems – may also be served if they are within the bulge.
Example: P sues D for copyright infringement in federal district court for the Eastern District of Kentucky, located in Lexington. D files a counterclaim against P. D wants to join X as a co-defendant to this counterclaim, arguing that P and X conspired to violate D’s copyrights. X resides in Cincinnati, Ohio, located 78 miles from Lexington. If the court agrees that X is required for just adjudication of D’s counterclaim, service on X in Cincinnati is valid, even if the Kentucky long-arm would not allow service there.
3. Nationwide service of process: In several kinds of cases, Congress has provided for nationwide service of process. Suits against federal officials and agencies, and suits based on statutory interpleader, are examples of nationwide service. [47]
4. Foreign defendant not servable in any state: Rule 4(k)(2) allows a federal question suit to be brought against any person or organization who cannot be sued in any state court (almost always because they are a foreigner).
Example: D, a French company, without setting foot in the U.S., solicits business by phone and mail from residents of a large number of states. D does not solicit enough from the residents of any one state to satisfy that state’s long-arm. Therefore, D could not be sued in any state court for a claim concerning its activities. P, a New York investor, brings a suit based upon the federal securities laws against D in the federal district court for the Southern District of New York. Assuming that D can be said to have had minimum contacts with the United States as a whole, the New York federal court will have personal jurisdiction over D for this federal-question claim, because D is not subject to the jurisdiction of the courts of any state. FRCP 4(k)(2).
5. Gaps possible: A defendant who is not located in the state where the district court sits may not be served if he does not fall within one of the four special cases described above (servable pursuant to state long-arm, 100-mile bulge, nationwide service or foreign defendant not servable in any state), even if he has the constitutionally-required minimum contacts with the forum. This is true whether the case is based on diversity or federal question. [49]
Example: P, a Connecticut resident, wants to bring a federal diversity suit in Connecticut against D, a New Yorker. The suit involves an accident that occurred in New York. D owns a second home in Connecticut, as well as lots of other real estate there. Assume that this ownership gives him not only minimum contacts but "systematic and continuous" contacts with Connecticut. However, Connecticut has a very narrow long-arm, which would not allow service on D in New York for a Connecticut state action.
P will not be able to serve D in New York in his federal action, because none of the special cases is satisfied. This is true even though it would not be a violation of due process for either the Connecticut courts or the federal court in Connecticut to exercise personal jurisdiction over D.
C. Manner of service: Once you determine that the party to be served lies within the territory described above, you must determine if the service was carried out in the correct manner.
1. Individual: Service on an individual (Rule 4(e)) may be made in any of several ways:
a. Personal: By serving him personally;
b. Substitute: By handing the summons and complaint to a person of "suitable age and discretion" residing at D’s residence;
c. Agent: By serving an agent appointed or designated by law to receive process. (Example: Many states designate the Director of Motor Vehicles as the agent to receive process in suits involving car accidents);
d. Local state law: By serving D in the manner provided by either: (1) the law of the state where the district court sits, if that state has such a provision, or (2) the law of the state where the person is being served. (Example: P brings an action against D, a resident of California, in New Jersey federal court, and wishes to serve him by certified mail. Service will be possible if either the courts of New Jersey or California allow certified-mail service.)
2. Corporation: Service on a corporation may be made by leaving the papers with an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive process for the corporation. FRCP 4(h)(1).
a. Local state law: As with individuals, service on a corporation may also be made in the manner provided by the local law of (i) the state where the action is pending or (ii) the state where the service is made. FRCP 4(h)(1), first sentence.
3. Waiver of service: Rule 4(d) allows plaintiff to in effect serve the summons and complaint by mail, provided that the defendant cooperates. P mails to D a "request for waiver of service"; if D agrees, no actual in-person service is needed.
a. Incentives: D is free to refuse to grant the waiver, in which case P must serve the summons by the in-person methods described above. But, if D refuses the waiver, the court will impose the costs subsequently incurred by P in effecting service on D unless "good cause" is shown for D’s refusal. (FRCP 4(d)(2), last sentence.)
D. Amenability to suit: If D was served in an appropriate territory, and in an appropriate manner, you still have to determine whether D is closely-enough linked to the state where the federal district court sits to make him "amenable to suit" in that court. [52 - 54]
1. Federal question: In federal question cases, most courts hold that D is amenable to suit in their court if jurisdiction could constitutionally be exercised over him in the state courts of the state where the federal court is sitting, even if the state court itself would not (because of a limited long-arm) have jurisdiction. [52]
Example: P sues D for copyright infringement. The suit is brought in the Northern District of Ohio. D’s only contact with Ohio is that he sold 100 copies of the allegedly infringing book in Ohio. The state courts of Ohio, although they could constitutionally take personal jurisdiction over D in a similar state-created claim – libel, for instance – would not do so because the Ohio long-arm is very limited and would not cover any action growing out of these facts. However, the federal district court will hear the federal question copyright claim against D, because P has minimum contacts with the state where the federal court sits.
a. Foreign defendants: In general, if the defendant is a foreign corporation or resident, most federal courts will exercise jurisdiction over the defendant only if that defendant has minimum contacts with the state where the federal court sits, not merely minimum contacts with the United States as a whole. (Again, as with an out-of-state but not foreign defendant, the federal court will hear the federal question claim even though the state courts might not exercise jurisdiction over the defendant due to a limited state long-arm.)
i. Narrow exception: If a foreign defendant could not be sued in any state, he may be sued on a federal-question claim in any federal judicial district, assuming that he has minimum contacts with the U.S. as a whole. (FRCP 4(k)(2).) But assuming that the foreign defendant could be sued in at least some state court, the general rule described in the prior paragraph (D must have minimum contacts with the state where the federal court sits, not just with the U.S. as a whole) continues to apply.
2. Diversity: In diversity cases, the federal courts exercise only the jurisdiction that is allowed by the statutory law of the state in which they sit. So if the state statutory law does not go to the limits of due process, the federal court will follow suit. [54]
V. JURISDICTION OVER THINGS
A. Two types of actions: There are two types of actions that relate primarily to "things" rather than to people: (1) in rem actions; and (2) quasi in rem actions. [57 - 68]
1. In rem actions: In rem actions are ones which do not seek to impose personal liability on anyone, but instead seek to affect the interests of persons in a specific thing (or res). (Examples: Probate court actions; admiralty actions concerning title to a ship; actions to quiet title to real estate or to foreclose a lien upon it; actions for divorce.)
a. No personal liability: In all of these types of in rem actions, no judgment imposing personal liability on anyone results – all that happens is that the status of a thing is adjudicated. (Example: In a quiet title action, a determination is reached that A, rather than B, is the owner of Blackacre).
2. Quasi in rem actions: Quasi in rem actions are actions that would have been in personam if jurisdiction over D’s person had been attainable. Instead, property or intangibles are seized not as the object of the litigation, but merely as a means of satisfying a possible judgment against D.
B. In rem jurisdiction: [58 - 59]
1. Specific performance of land sale contract: One important type of in rem action is an action for specific performance of a contract to convey land. Even if the defendant is out of state and has no connection with the forum state other than having entered into a contract to convey in-state land, the forum state may hear the action. D does not have to have minimum contacts with the forum state for the action to proceed – it is enough that the contract involved in-state land, and that D has received reasonable notice. [58]
2. Effect of Shaffer: The landmark case of Shaffer v. Heitner, discussed below, has almost no effect on in rem suits. Shaffer holds that there must be minimum contacts before a quasi in rem action may proceed; but no minimum contacts are needed for the court to adjudicate the status of property or some other thing located in the state, even though it affects the rights of an out-of-state defendant. [59]
C. Quasi in rem jurisdiction: [59 - 67]
1. Definition: As noted, a quasi in rem action is one that would have been in personam if jurisdiction over D’s person had been attainable. Instead, property or intangibles are seized not as the object of the litigation, but merely as a means of satisfying a possible judgment against D. [59]
Example: P wants to sue D on a contract claim in California state court. The contract has no connection with California, nor does D himself have sufficient contacts with California to allow that state to exercise personal jurisdiction over him. D does, however, own a bank account in California. Putting aside constitutional due process problems, P could attach that bank account as a basis of jurisdiction, and bring a quasi in rem action on the contract claim. If P wins, he will be able to collect only the value of the bank account, and D will not be personally liable for the remainder if the damages exceed the value of the account.
2. No res judicata value: Quasi in rem judgments have no res judicata value. (Example: If P wins against D in a quasi in rem action in Connecticut, he cannot in a later suit against D in California claim that the matter has been decided for all time. Instead, he must go through another trial on the merits if he wishes to subject D to further liability.) [60]
a. Possible exception: Some courts hold that if D makes a limited appearance (an appearance that does not confer personal jurisdiction over him) and fully litigates certain issues, he will not be allowed to re-litigate those issues in a subsequent trial. But other courts hold that even here, the first suit will not prevent D from re-litigating the same issues later on.
3. Requirement of minimum contacts (Shaffer): Quasi in rem jurisdiction over D cannot be exercised unless D had such "minimum contacts" with the forum state that in personam jurisdiction could be exercised over him. This is the holding of the landmark case of Shaffer v. Heitner. [63 - 67]
Example: P brings a shareholder’s derivative suit in Delaware on behalf of XYZ Corp. against 28 of XYZ’s non-resident directors and officers. None of the activities complained of took place in Delaware, nor did any D have any other contact with Delaware. P takes advantage of a Delaware statute providing that any stock in a Delaware corporation is deemed to be present in Delaware, allowing that stock to be attached to provide quasi in rem jurisdiction against its owner. Thus P is able to tie up each D’s XYZ stockholdings even though there is no other connection with Delaware.
Held, this use of quasi in rem jurisdiction violates constitutional due process. No D may be subjected to quasi in rem jurisdiction unless he has minimum contacts with the forum state. Here, neither the Ds’ actions nor the fact that those actions related to a Delaware corporation were sufficient to create minimum contacts, so the exercise of jurisdiction was improper. [Shaffer v. Heitner]
4. Jurisdiction based on debt, insurance or other obligation: Shaffer basically abolishes the utility of quasi in rem jurisdiction – since quasi in rem is only used where there is no personal jurisdiction, and since the same minimum contacts needed for quasi in rem will suffice for personal jurisdiction, quasi in rem will rarely be advantageous. (The one exception is where minimum contacts are present, but the state long-arm for personal jurisdiction is too narrow to reach the defendant, yet a state attachment statute applies.) One big practical effect is that attachment of a third party’s debt to the defendant, or attachment of an insurance company’s obligation to defend and pay a claim, are largely wiped out as bases for jurisdiction. [61 - 62]
Example 1: Harris, of North Carolina, owes $180 to Balk, of North Carolina. Epstein, of Maryland, has a claim against Balk for $300. While Harris is visiting in Maryland, Epstein attaches Harris’ debt to Balk by serving Harris with process in a Maryland suit. Under pre-Shaffer law, this established quasi in rem jurisdiction over the $180 debt, on the theory that the debt goes wherever the debtor goes. If Epstein won, he could require Harris to pay the $180 to him rather than to Balk. [Harris v. Balk] [61]
But after Shaffer, the fact that Balk’s debtor happened to be in North Carolina and available for personal service was irrelevant. Since Balk himself did not minimum contacts with Maryland, and thus could not be sued there personally, Shaffer means that a quasi in rem suit based on Harris’ debt to him may also not be heard in Maryland.
Example 2: Same facts as above, except assume that instead of Harris’ being sued, Insurance Co., which had an obligation to defend Balk and pay judgments issued against Balk, was served in Maryland. Pre-Shaffer, this would have been enough for quasi in rem jurisdiction over Balk. [61]
But because of Shaffer, the fact that Insurer had minimum contacts with Maryland would be irrelevant – an insurance company’s obligation to defend the debtor in the forum state and to pay claims arising out of suits in the forum state is not enough to subject the insured to a quasi in rem suit in the forum state.
D. Limited appearance: [66]
1. Definition: Some states allow a "limited appearance." Under a limited appearance, D appears in an in rem or quasi in rem suit, contests the case on its merits, but is subjected to liability only to the extent of the property attached or debt garnished by the court.
a. Distinguished from special appearance: Distinguish limited appearances from special appearances – in the latter, a defendant against whom personal jurisdiction is asserted is allowed to argue the invalidity of that jurisdiction without having this argument, or his presence in the court, itself constitute a submission to the court’s jurisdiction.
2. Federal limited appearances: Federal courts usually follow the rule of the state in which they are sitting in determining whether to allow a limited appearance.
E. Federal quasi in rem jurisdiction: [67 - 68]
1. General rule: Quasi in rem jurisdiction is allowed in a federal court if: (1) the law of the state in which the federal court sits permits such quasi in rem jurisdiction, and (2) P cannot obtain personal jurisdiction over D in the state through reasonable efforts. Rule 4(n). (Examples of conditions satisfying (2): D is a fugitive, or the local long-arm is too weak to reach D even though he has minimum contacts with the state where the district court sits.)
2. Amount in controversy: In a federal quasi in rem case, courts are split as to whether it is the value of the attached property, or the amount claimed, which should control for the $75,000 amount in controversy re