Civil Procedure Class Notes 9/3/03

We’d like to finish Shaffer, do McGee, Hanson, and look at another case that we weren’t asked to read. We’d like to start Worldwide Volkswagen tomorrow.

Review

Shaffer seeks to make Shoe the standard for more or less all jurisdictional questions.

In a quasi in rem action, specific jurisdiction depends on how closely related the defendant’s contact to the forum is to the claim itself.

One more hypothetical

I live in Ohio, but I own a house with a swimming pool in Texas. Some kids fall into the pool and get hurt. I get sued for negligence. Does Texas have jurisdiction?

What are my contacts with the forum? I have a house there. The contact has not changed. What obligations go along with my contact? How related is my claim to my contact with the forum? Is this more like a suit for specific performance on the land, or is it more like an auto accident in Ohio?

I’m getting sued for something that I didn’t do.

The court would probably find jurisdiction here, but we’re on a spectrum; it’s sort of a grey area.

A review of two types of quasi in rem

1. An action to secure a preexisting claim in the property or extinguish someone else’s. This is like the specific performance example.

2. An action where you try to substitute for personal jurisdiction, in that you apply the defendant’s property to satisfy a claim that is unrelated to the property. This is more like both the auto accident in Ohio example and the swimming accident in Texas example.

The grey area is in Type 2.

On the other hand, in a true in rem action, the local court will always have personal jurisdiction because the contact is 100% related to the claim.

Let’s go back to Delaware and its assertions of jurisdiction. In Delaware, we have general jurisdiction over Greyhound. The bigger question is: why doesn’t Delaware have the power to reach out and grab the officers and directors when they voluntarily agreed to run a Delaware corporation?

Justice Marshall says that if the state had such a pressing interest, they should have included it in the statute.

In the aftermath of this case, the state of Delaware enacts exactly the statute that the Court suggests. That is, Delaware says that if you accept a position as an officer or director of a Delaware corporation, you consent to Delaware’s jurisdiction. But what does this have to do with minimum contacts? It’s far from clear.

We have traditionally considered the rules of jurisdiction based on fairness to the defendant. But the dissenters in Shaffer suggest that the state has an interest in protecting its citizens and that if it articulates that interest, we ought to give some credence to it.

The court teases out some elements that go into the “minimum contacts” test that are easily stated but hard to define.

Notice and foreseeability

Prior to the statute, you might assume, but would not know, that you might be subject to jurisdiction in Delaware for bad acts elsewhere. You wouldn’t have notice. After the statute, you would have notice.

Concurring opinions in Shaffer

Justice Powell would reserve judgment on the broad statement that all in rem actions will have sufficiently related contacts. He wants to leave that open.

Justice Stevens agrees with the judgment but not the reasoning. He thinks this case is all about notice (the hidden strand of Pennoyer).

Justice Brennan agrees that Shoe controls here, but he fears that the state ignores the State’s interests.

Justice Rehnquist recused himself, possibly because he owned stock in Greyhound or had some other kind of personal connection to the case.

Cases on specific jurisdiction

We’re going back in time to 1957 and 1958. They are decided at about the same time by the same judges with pretty similar facts…yet, the Court comes to two rather different results. What’s the difference?

McGee

What’s going on in McGee? A guy buys life insurance from a company that was based in Arizona, which then got bought out by a Texas company. The Texas sends a reinsurance contract to California. The guy dies, and the company refuses to pay. The beneficiary sues in California and says they should pay. It’s a breach of contract suit.

McGee wins in California. How is she going to get paid? She needs an order enforcing the judgment. She goes to Texas to have the California judgment enforced. This is where the company makes the argument that there is no jurisdiction. Why? It’s the same thing that we saw before: collateral attack!

Who gets to make these front line decisions about jurisdiction? The California court decides it if you raise it there, but if you don’t, the Texas court gets to make the decision. Thus, there may be a strategic advantage in delaying by employing collateral attack.

If you have a defense on the merits of the case, collateral attack is very risky.

What is the result of the case? There are sufficient contacts for California to have jurisdiction in this case. This is according to Justice Black.

Black says that there was a substantial connection between the forum and the defendant.

What contacts are there? The insured mails his premiums to Texas and he gets the offer to reinsure back through the mail.

Is there anything troubling about being able to sue an out-of-state insurance company in your home state when you’ve been paying premiums for years and years and they refuse to pay your claim?

It’s very hard to divorce these cases from the circumstances of the parties in each case. There are poor dead folks in both.

Could the Court be pushing it to get the result they want?

Does the state of California have an interest in protecting the insured or his beneficiary? Sure! There may be unscrupulous business in other states trying to take advantage of our citizens.

In other cases, we’ve heard a lot about the defendant’s interest, but in this case we hear a lot more about the plaintiff’s interest and the state’s interest.

What about notice? Is there notice or foreseeability in this case? Did the insurance company have an idea that they might be sued in California? The company solicits business in the state of California. This is the distinguishing factor from the next case. It’s going to be difficult to prevent jurisdiction in other states when you solicit business in those states.

Wasn’t Black the guy who had trouble with the wishy-washy standard of Shoe?

Stevie Y. describes McGee as the “outer extreme” of jurisdictional aggressiveness. He speculates that if this case were to come up today, the modern Court would not come to the same conclusion. The contacts are weak…but there’s something about this. There seem to be contacts that warrant jurisdiction. It doesn’t seem to be unfair.

Hanson

What are the facts of this case?

A woman has a trust established in Delaware. She moves to Florida. She does some trust business and gets money from the trust. She dies. There’s a fight between family members over whether Delaware or Florida has jurisdiction. If Florida has jurisdiction, one daughter gets everything, but if Delaware has jurisdiction, then three daughters share equally.

There’s a probate court in Florida that says it has jurisdiction, and there’s a declaratory judgment action in Delaware that says there’s no jurisdiction outside the state of Delaware over the trust.

What’s the result? Florida doesn’t have jurisdiction, and the greedy daughter doesn’t win.

Tomorrow, we’ll start asking why, through applying contacts analysis, this one comes out that way.

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