Civil Procedure Class Notes 9/9/03

 

We left off with World-Wide, where the Court continues to struggle with just how the standards that Shoe clearly articulated in 1945 ought to be applied.

 

The Court gives us some guidelines on “fair play”, but is less clear on helping us sort out minimum contacts.

 

In World-Wide, Brennan dissents because he is concerned that states’ interests are being neglected.

 

Marshall challenges the language on stream of commerce and feels that automobile dealer and distributors have fair notice that they could be liable in other states.

 

Justice White characterizes such ties as merely “collateral relations”.

 

Forum shopping and other tactics

 

Why the heck did the lawyers in World-Wide think it was worth getting to the Supreme Court?  What interests did they have?  The plaintiff’s lawyers are forum shopping.  They want to be in a particularly plaintiff-friendly county in Oklahoma (which fortuitously is the county where the accident happened), and they want to be in state court rather than federal court.  How come?  The state courts choose juries in a different way than federal courts do.  For example, you might choose juries by voter registration or you might go by automobile registration.

 

Furthermore, this is a tactical move.  The Robinsons, it will be argued, are still New York residents, and thus there is no diversity jurisdiction for federal court since Seaway and World-Wide are New York corporations.  If Seaway and World-Wide are gone, removal to federal court is a defendant’s right under 28 U.S.C. § 1441, if the case could have been originally brought in federal court.  As long as Seaway and World-Wide are in on it at the beginning, that suit can’t be originally brought, because you’d have New York on both sides of the “v.”.

 

Therefore, this lawsuit cannot be removed to federal court.  “Very smart plaintiffs’ lawyers: They designed their litigation package to keep it in the form that they want—at least temporarily.”

 

If the case was Arizona v. New York in Oklahoma, that case could be automagically removed to federal court.

 

If the case was New York v. New York in Oklahoma, it can’t go to federal court.

 

If it went to federal court, but you successfully argue that it must go back to state court (“fraudulent removal”), it will get remanded back to state court.  It’s a good strategy to remove a case to federal court if you can at all, even if you get remanded again, because you get a six month delay before you relitigate in state court.  These are superunderhanded tactics!

 

So if Seaway and World-Wide get taken off of the case, it becomes a removable case.  That’s what happens after the Supreme Court’s opinion in World-Wide.  Right after the Supreme Court rules, VW and Audi will have the case removed to federal court.  Long story, but they ultimately get nothing in 1996.  The Robinsons are big losers.

 

World-Wide = convenience factor test + two factor test where minimum contacts is the first threshold.

 

Asahi Metal Industry Co. v. Superior Court

 

What are the real parties here?  It’s Asahi, from Japan, and Cheng Shin from Taiwan.  It doesn’t start with them, though.  It starts out like virtually everything in procedure: an auto accident.

 

Zurcher has a blowout on his motorcycle and he’s seriously injured, while his wife dies.  He sued everybody he can, including Cheng Shin, who make tires.  Zurcher sues in California state court.

 

What does Cheng Shin say by way of argument about liability?  They say it wasn’t their fault, they say it was Asahi’s fault for making bad valves.  So they file a third-party claim for indemnification against Asahi.  In other words: “If I am liable to Zurcher, any liability really belongs to Asahi because it really isn’t my fault.”

 

What does Zurcher do?  He settles with everybody.  He’s out of the picture.  What’s left of our lawsuit?  It’s Cheng Shin (Taiwan) v. Asahi (Japan) in California.  “The dog is gone and all that’s left is the tail of this lawsuit.”

 

When we bring together parties and claims, some of those parties and claims will go away, but if they don’t all go away, the court still has to deal with the remaining parties and claims.  It must settle the remaining disputes somehow.

 

What does the trial court say in regard to jurisdiction over Asahi?  They say California has jurisdiction because Asahi “does business on an international scale” and thus should be prepared to defend themselves on an international scale.  The California Supreme Court upholds the decision of the trial court.  Both courts seize upon the language of World-Wide of “purposeful availment”.  If you place something in the “stream of commerce”, you should expect that your purposeful act will subject you to jurisdiction wherever those products end up.

 

What is the holding of the United States Supreme Court?  The Court finds that California does not have jurisdiction, but they disagree on the reasons.

 

Does the Supreme Court hold that putting something in the stream of commerce, without more, will subject you to personal jurisdiction?  The Supreme Court doesn’t hold this, even though Justice O’Connor wrote the part of the opinion that says this.

 

We have to count votes.  Part I was unanimous.  Part II-B was 8-1, and Parts II-A and III are 4-5.  Only Part I and Part II-B are precedent.

 

Part I is merely the facts!

 

Part II-A and III is the stream of commerce stuff plus other stuff.  Why does O’Connor get to write the opinion if she only has four votes?  The Chief Justice assigns the opinions, and the Chief is on O’Connor’s side.

 

Part II-B is the part about fair play and substantial justice.  Everybody’s for it except Scalia.  Why in the world?

 

We’re almost there.  All we know is that this isn’t fair, but the way that it will fit into our jurisdictional analysis is uncertain: in the previous case, we found contacts is the first test, and you only move on to fair play if there are minimum contacts.

 

The Court will do this a lot where different people sign on to different parts.

 

Who dissents?[1]  Brennan, White, Marshall, and Blackmun disagree with Part II-A.  Stevens, White, and Blackmun disagree with Part II-A, but for different reasons.  Because they split their opinions, there are two four-judge opinions and a three-judge opinion.  If there had been a five-judge opinion, it would have been clear and the Chief would have had to assign the opinion to one of those five judges.

 

Five judges agree = holding.

 

In order for there to be a dissent, there must be a majority opinion to dissent from.  There isn’t technically any dissent in this case.

 

Fairman will try to argue that we can put the five “dissenting” justices together and get some idea about minimum contacts.  However, four of those five are now gone and Stevens is really old.

 

This vote-counting is what you must do with Supreme Court cases that come down today.  The Supreme Court today is even more divided on cases that are even more politicized than those of the Asahi court.  It’s super zany!

 

Where do these counts line up?  What do these votes mean as far as the law of personal jurisdiction?

 

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[1] Fairman goes for the jugular, though, to his credit he previously announced that it would be tough.