Personal Jurisdiction Flashcards
PJ Hypos!
Lisa Vanderpump is a traveling saleswoman who lives in California and sells SUR glassware in parts of California, Arizona, and Nevada. While en route to deliver glassware to a Nevada customer, she is involved in an auto accident in Nevada with Holly Madison, a Nevada citizen. She brings suit against Holly in California for her injuries in the accident. Does the court have PJ over Holly?
In this case Lisa has sued Holly in a state in which Lisa has contacts, but Holly has none. As fasr as the example tells us, Holly has never been there, has not formed any deliberate relationship to or performed acts within the state, and has done nothing to derive benefits from CA. Consequently, she has no reason to expect to be sued there and has not impliedly swallowed that bitter pill in exchange for the benefits of in-state activity. She lacks minimum contacts with CA and may not be sued there on this claim.
NOTE: PJ rules are DEFENDANT ORIENTED. The court must find some basis for forcing the defendant to appear before it.
NOTE: It is irrelevant if the plaintiff does not have minimum contacts with the forum state as long as the defendant does.
As a result of the same accident, Holly brings suit against Lisa for her injuries. She sues in Arizona. Does the court have Jx over Lisa based on minimum contacts?
The AZ court will not have PJ over Lisa under the minimum contacts test. It is true that Lisa has some contacts with AZ because she travels there to sell glassware. However, Intl. Shoe does not hold that a defendant may be sued in a state simply because she has had SOME contacts with that state. Intl. Shoe holds that a defendant may, by committing limited acts within a state, submit herself to Jx for claims arising OUT OF THE IN-STATE ACTS THEMSELVES. Holly’s claim is unrelated to Lisa’s glassware sales in az.
The situation would be different if the claim were for faulty glassware sold to an AZ customer.
However, if Holly serves Lisa while Lisa is in AZ, then AZ would be able to assert PJ over Lisa due to “transient Jx”
To be on the safe side, Holly also files suit against Holly in Nevada. Does that court have PJ over Lisa based on minimum contacts?
Holly has gotten it right by suing Lisa in NV. Lisa’s act of driving in NV provides a minimum contacts basis for a suit against her there for injuries suffered in the accident.
Jesse, a New Mexico citizen, buys a VW from Smoky Mountain VW, located on the east side of the Smoky Mountains in North Carolina while he is on vacation there. Shortly after he returns home, all four wheels fall off while he is driving, and Jesse is injured. Understandably upset, Jesse sues Smoky Mountain in a New Mexico court for negligence. Does the court have PJ over the dealer?
The plaintiff purchased the car in one state and took it to another where he suffered injury from alleged defects in the car. As in WWVW, the plaintiff sues where the injury is suffered although the defendant acted in another state and is still in that state. And, as in WWVW, the court will dismiss the case for lack of PJ.
Smoky Mountain has committed no deliberate act that affiliates it with NM. It does not sell cars there, has not availed itself of the protection of NM’s laws, and has no reason to expect that it will be sued there. Although it is foreseeable that the car will be driven through or end up in NM, it is equaly foreseeable that it will go to many other states. a rule that such foreseeability establishes Jx would essentially subject the seller of any portable product to nationalwide Jx making “the chattle [product] his agent for service of process.” WWVW at 296.
After Jesse leaves, Walter pulls into Smoky Mountain’s lot with his engine belching smoke. His car is clearly a total loss, and he tells Saul, the salesman, that he must have a car to get back home to New Mexico. Saul sells him a (very) used Chevy. After crossing into New Mexico, Walter pushes the windshield wiper button, and the engine automatically ejects into the dessert. Walter sues Saul and Smoky Mountain in New Mexico. Is PJ proper there?
Saul knew he was dealing with a NM citizen (in this instance) who would use the Chevy in NM, however it is very doubtful that his knowledge is enough to support Jx over Saul and Smoky Mountain in NM. PJ is the price defendants pay for DELIBERATE EFFORTS TO DERIVE BENEFITS FROM or conduct activities in a state. Saul and Smoky Mt. did not solicit business from Walter. Walter came to the dealership under his own steam and initiated the transaction in North Carolina. It was only by chance that Walter told Saul why he needed the car; it is reasonable to infer that it was irrelevant to Saul that Walter planned to drive it back to NM.
Saul has an eye for fast cars. At the moment, he has a nice Maserati on the lot, with all the extras (engine, wheels, brakes). A customer tells him that a trucker buddy of his, Hank, from New Mexico, might be interested in buying the Maserati. Saul calls Hank in New Mexico, extols the Maserati’s virtues, and encourages him to come in and test drive the car on his next delivery in North Carolina. Hank does stop to see the car, likes it, and buys it. He makes the mistake of towing it home, only to discover upon arrival that the engine, lights, carburetor, and exhaust system are missing. He sues Saul in New Mexico. Saul has no other contacts with New Mexico. Will the New Mexico court have PJ over Saul?
Saul has consciously dealt with an out of state citizen, but here, unlike the earlier situation, he has voluntarily affiliated himself with the plaintiff’s state. He not only anticipates that his acts will have consequences in another state, but he has also deliberately set those events into motion by his own in-state act. Saul voluntarily reached into NM to conduct business with a NM citizen. He made representations to Hank in NM that encouraged him to come to North Carolina to buy the car. He can reasonably anticipate that Hank will use the car extensively in NM and likely suffer deliberate relationship with a NMexican which he initiated by calling into that state, may lead to a lawsuit, and that if a claim arises out of the sale, Hank will likely bring suit in NM. Therefore, Saul will be subject to PJ in this action.
His single contact with NM is sufficient to support specific personam Jx (Jx for claims arising out of the contact itself)
After lunch, Skyler comes in. Skyler lives across the border in Tennessee (now), where she had read in a Tennessee paper Smoky Mountain’s ad for a one-year-old Audi for $1,100. Because Smoky Mountain dealership is located ten miles from the Tennessee border, it advertises frequently in Tennessee, as well as in North Carolina. Skyler visits the dealership, talks Saul down to $1,025, and buys the car. She barely gets across the Tennessee line when the steering wheel comes off in her hand, and the body comes entirely loose from the frame of the car. Skyler sues Smoky Mountain in Tennessee. Does the court have PJ over Smoky Mountain?
In this case the dealership has reached into Tennessee to solicit business. It has attempted to draw customers from there into North Carolina, and in Skyler’s case it succeeded. Although the actual sale took place in North Carolina, the claim arises directly out of deliberate efforts to serve the Tennessee market. Smoky Mountain can hardly plead unfairness or surprise when suits that arise from those efforts are brought in Tennessee.
Assume, on the facts regarding Skyler, that Smoky Mountain only advertises occasionally in Tennessee and derives only 5% of its business ($40,000 of its annual gross sales of $800,000) from sales to Tennessee customers. The rest of its sales are in North Carolina. Skyler sees the ad and buys the Audi at Smoky Mountain’s dealership; it breaks down in Tennessee on the way home. Can Skyler sue Smoky Mountain in Tennessee?
PJ is not based on the most contacts or the best contacts, but on MINIMUM CONTACTS. Here, Smoky Mtn. has a great deal more contact with North Carolina than it has with Tennessee, but hte dealership has solicited business in Tennessee, and the claim arises out of its efforts to obtain that business. That is enough to support Jx in Tennessee. Smoky Mtn. will not be able to defeat Jx there by arguing that it has more contacts with North Carolina.
When Saul relaxes, he likes to go to the Georgia coast for some deep sea fishing. While drinking at a bar in the fishing lodge there, he gets to talking with Lydia, another guest at the lodge. Lydia asks Saul about his work. The two get into a car lovers’ debate over the relative merits of various sports cars. Before leaving the bar, Lydia asks Saul for his card.
Two months later, Lydia visits Smoky Mountain and buys a jazzy looking Ferrari from Saul. Imagine for yourself what happens to the Ferrari when Lydia gets it back to Georgia. Lydia sues Saul in Georgia. Will the court have PJ over Saul?
This is the kind of “causal” or “isolated” contact that is insufficient to subject the defendant to PJ. Although Saul did at in the state, he was not soliciting business and did not initiate the conversation for business purposes. He gave Lydia his card at Lydia’s request. He did not ENCOURAGE Lydia to go to North Carolina to buy a car. In the “but-for” sense, this contact did give rise to the claim that Lydia asserts, but if was not a PURPOSEFUL ACT intended to take advantage of the benefits and projections of conducting activity in Georgia. Saul would be justifiably upset if this offhand interaction led to a suit in Georgia. He would hardly expect that to be the consequence of responding to a request for a business car, and Jx doctrine is largely based on common sense appraisal of what people should expect.
Louis Vuitton (LV) makes purses in France. It sells them to Nordstrom, a French wholesaler of luxury products. Nordstrom sells a LV purse to a boutique in Colorado, and ships it to the store. Natalie buys it, is injured using it in Colorado, and sues LV (which has no other US contacts) in Colorado court. Does the court have PJ over LV for this claim?
No. Here a foreign manufacturer makes a product outside the US and sells it there. This would not satisfy the Asahi plurality test for purposeful availment in Colorado, because it was LV’s buyer that chose to sell the purse into Colorado, not LV.
Viewed through a McIntyre lens, in selling the product to a US distributor, is insufficient to support Jx in a different state where it was resold and caused injury, so they presumably would find LV’s lesser contacts also insufficient.
Same facts, but LV exports purses to Macy’s in Moline, Illinois. Macy’s resells five LV purses to the boutique store in Colorado. Natalie buys one and is injured using it in Colorado. Would the Colorado court have PJ over LV for this claim?
LV’s contacts here resemble those of the manufacturer in J. McIntyre, which the plurality found insufficient to support PJ. LV has chosesn to serve the market for its products in the US by selling to an Illinois distributor, but it has not independently reached into Colorado. Here again, it seems that the plurality opinions in Asahi and J. McIntyre would reject PJ over LV.
J. McIntyre dissenters argue strenuously that there should be jurisdiction over the foreign manufacturer in cases like this one, where it has served the US market - albeit through an intermediary - and derived profits from it. The concurring judges may concede on some points, however they still would not find Jx justified on these facts - a sale of five purses on a single occasion.
LV makes purses in Florida that it sells to Macy’s in Illinois, and ships to Macy’s. Macy’s resells an LV purse to a Colorado boutique store in an isolated transaction. Natalie buys it and is injured using it in Colorado. Would the Colorado court have PJ over LV for this claim?
The main difference here is that LV makes its purses in the US. It seems unlikely that this difference would lead the Justices who signed on to the plurality opinion in either Asahi or J.McIntyre to reach a different result. LV has still not done anything to focus on Colorado. It has simply made a product in one state and sold it to a wholesaler in another, which redistributes the product in other states.
LV makes purses in France and sells to Macy’s in Illinois, which resells a few purses to boutique in Colorado. Natalie buys one of them, is injured in Colorado, and sues LV for her injury in Illinois. Does the Illinois court have Jx over LV?
It almost certainly would. LV has imported goods into Illinois, a purposeful contact that supports Jx for claims that arise out of that purposeful decision to do business in Illinois. Although the injury occurred in Colorado, the claim against LV does arise out of its sale of the purse into Illinois.
Illinois would not be a logical place to litigate as neither party is from there and the events giving rise to the claim took place in France (where the purse was made) and Colorado (where Natalie was injured). LV might move to dismiss for forum non conveniens, claiming that there is no reason to litigate this case in Illinois. Yet it is hard to see an Illinois judge granting that motion, which would leave Natalie with only the option of a French court to litigate her Colorado claim.
Same facts, except that Macy’s resells substantial numbers of LV purses into Colorado every year. Natalie buys one in Colorado and is injured using it in Colorado. Will LV be subject to PJ in Colorado?
No one really knows for sure, but it is likely that due to substantial, on-going sales into Colorado the judge would likely rule in favor of PJ.
LV makes purses in Florida and sells them to Macy’s in Illinois. Macy’s resells five LV purses to the boutique store in Colorado. Natalie buys one and is injured using it in Colorado. Natalie sues Macy’s in Colorado for her injury. Will Macy’s be subject to PJ for the claim?
Absolutely. Macy’s sold goods into the state, a deliberate contact with the state that supports specific in personum jurisdiction for claims that arise from the contact. This is like LV’s contacts with Illinois.
