Civil Procedure Class Notes 9/4/03


Today, we’ll start World-Wide Volkswagen and take a peek at Harrods (handout).


McGee again


The insurance company didn’t pay out a claim.  The beneficiary sued in California, and the insurance company tried collateral attack.  The state court in Texas decides that California had no jurisdiction over the company.  The United States Supreme Court ruled that the contract on which the suit was based had substantial connection to the state.


Mere contracting is not enough to establish personal jurisdiction.  There must be more in the way of contacts.  As we move beyond McGee and Hanson, we’ll see the Court sort of back off from having such limited contacts constitute jurisdiction.


Hanson as the evil twin of McGee


We’ve gone over the facts.  Mrs. Donner enjoys the benefits of her Delaware trust while she’s domiciled in Florida.  When she croaks, there is a dispute over who gets the cash.  If the trust can be found to have jurisdiction in Florida in probate court, one greedy daughter gets everything.  If it can be found to have jurisdiction in Delaware, the three daughters share.


Is this “stuff”, the transacting of business and sending of money between the Delaware trustee and the now dead lady in Florida sufficient to establish minimum contacts?


The Court concludes that it is not enough.  The Court concludes there is no personal jurisdiction in Florida over the Delaware trustee.  The Court applies the minimum contacts test just like in McGee.


Justice Warren suggests that the defendant must act to “purposefully avail” himself of the “privilege of conducting activities within that state”.


There’s a 5-4 split on Hanson, but it goes against jurisdiction for Florida.


What’s the difference?  The key distinction is the fact that the insurance company solicited business in California: it took initiative to reach out to the California resident.  On the other hand, the Delaware trustee has no control over what the beneficiary is going to do.  The trustee doesn’t do anything more in Florida than is legally required, that is, sending the money she is due as a permanent beneficiary of the trust.


At least one justice flips between the two sides between McGee and Hanson.


These are “bookends” of personal jurisdiction.  Remember the defendant’s purpose in their contacts in a new state.  Are they active or passive?




These cases apply even today.  This case was in the 4th Circuit.  It involved a federal “anti-cybersquatting” act (15 U.S.C. § 1125).  Harrods sued for control of “harrods.everything”.  The statute says you can file an in rem action if you can’t get in personam jurisdiction.


Is it constitutional to allow jurisdiction under this statute?


The court cites Shoe and says the “minimum contacts” rule applying to in rem and quasi in rem actions as well as in personam actions (according to the 4th Circuit, not the Supreme Court).


States and federal district courts have the same jurisdiction.


The domain names are registered in Virginia, so the question is whether the defendants have minimum contacts with the state of Virginia.


Looky!  Shaffer, Shoe, and Hanson are cited!


The court argues that by registering domain names in Virginia, Harrods BA subjected themselves to the jurisdiction of the courts of Virginia at least for the purpose of deciding who owns the domain names.


The court claims that this is not quasi in rem Type 2.  The court says that the controversy directly involves the property in question, so Virginia has jurisdiction.


The bottom line: these seemingly old, stale cases are still the foundation upon which you’re going to make arguments, even on the appellate level.


What was not mentioned in Harrods?  Foreseeability.  Note that we never get a clear definition of minimum contacts.  Contrast this with the clear definition of “traditional notions of substantive justice and fair play” we’ll get soon.


World-Wide Volkswagen Corp. v. Woodson


This is a classic case.  From a jurisprudential standpoint, this is contemporary.


The Robinsons bought their Audi in New York.  They’re on the way to Arizona.  While passing through Oklahoma, they got into an accident.  They sued several companies for a product design flaw.  It’s a product liability suit.


The Robinsons sue everybody.  “This is a good strategy, future plaintiff’s lawyers.  If you’re going to sue anybody, sue everybody that can possibly be liable.”


“We’ve sued all the way up the food chain here for this defective product.”


Where did we sue them?  In Oklahoma.  In what kind of court?  A district court.  Who challenges the jurisdiction of the Oklahoma court?  Seaway and World-Wide (the retailer and distributor).  Volkswagen of America challenged the jurisdiction of the Oklahoma court initially, but then dropped their challenge.


Why didn’t the manufacturer challenge jurisdiction?  Did the manufacturer have contacts in Oklahoma?  Is it likely that they can make an argument that they lack minimum contacts with the state of Oklahoma?  No!  They’re a huge manufacturer that produces cars that goes all over the country.  There are a bunch of Audis in Oklahoma.  Audi has purposefully availed itself of the use of the Oklahoma market.  They probably have advertising and dealers there.  Volkswagen of America drops for pretty much the same reason.


Factually, the case is about jurisdiction over the distributor and the dealer.


Who is Woodson???  Woodson was the trial judge in Oklahoma!  What the defendants did was make a special appearance and argue that Oklahoma didn’t have personal jurisdiction.  But you don’t appeal the ruling on personal jurisdiction, because you would have to wait for the end of the trial on the merits.  That would take a long time.  Some states let you file an “extraordinary writ”.  What if you fail, though?  You end up right back in front of the same dude!


Some judges take it personally when you try to challenge a judge’s ruling in the middle of a proceeding.  Judges don’t like to be reversed.


Also, why didn’t the plaintiffs sue the dude who actually ran into them?  The guy was an old drunk.  He’s judgment-proof!  He didn’t have insurance.


This is one of the practical things you have to decide in litigation: if there’s nothing to recover, there’s no reason to add them as a party (except for some strategic reasons).


Back to Class Notes