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CIVIL PROCEDURE - REVIEW: JURISDICTION


Jurisdiction under Pennoyer
The land must be attached before the first suit started, because that gets you the (quasi) in
rem jurisdiction over it. If you dont get the property attached, you dont have power over it.
The alternative is to serve Neff personally in Oregon.
Thats all Pennoyer tells us!
Under these facts, theres no way Mitchell could have gotten jurisdiction except to trick Neff
into coming into Oregon to serve him process.
The mobility of the American population will lead to our modern contacts view of personal
jurisdiction.
Collateral Attack
Neff didnt appeal the Mitchell v. Nef lawsuit. Instead, he files Nef v. Pennoyer ten years later.
Collateral attack means you start a second suit to challenge the judgment of the first suit.
Could Mitchell have personally served Neff in a different state? Nothe process of a state
cant go into another state and order those people to appear. A state only has power over
people and things within the state.
This is why you can use collateral attack. You can ignore the judgment in the first lawsuit if
you havent been served. You live to fight another day.
But if you make an appearance, the court may decide it has jurisdiction over you. If you make
a special appearance, they cant gotcha you.
In collateral attack, you wait for them to come and get your property, but then you argue:
They cant have my property! The first lawsuit wasnt valid because they didnt have
jurisdiction!
Why use collateral attack from a strategic standpoint? Its cheaper than hiring an out-of-state
lawyer to argue on your behalf. If that state tries to enforce the judgment, theyll have to try
to enforce it in your state.
The merits issue: if you take a default in the first case, you never have a chance to argue on
the merits, i.e. whether or not that debt was really owed.
Personal Jurisdiction under Pennoyer
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Personal service in the state

Attach the land at the start of the 1st suit

But there are exceptions. Welcome to the world of the law. Field crafts a couple of
exceptions, e.g. marriage.
International Shoe Co. v. Washington
American society changes after Pennoyer. We have more corporations, more cars, and more
communications.

Whats going on at the time of the facts of Shoe? Its around 1937-1940. Its near the end of
the Great Depression. Theres massive unemployment. Washingtons response is creating a
state unemployment compensation system. Theyre going to have all of Washingtons
employers contribute to this fund. This is sort of a state New Deal program. At the time, this
right was subject to challenge.
Whats the problem, factually, that creates this case? Shoe is incorporated in Delaware and
lives in Missouri, but they also employ traveling salesmen in Washington. Theyre selling shoes
door-to-door.
Shoe doesnt pay the tax because they say theyre not a Washington employer under the act.
Thats one argument they make. Thats not what the Supreme Court cares about, thats a
matter of state law.
The second question is: how does the state of Washington obtain personal jurisdiction over
Shoe? Washington personally serves one of the salesmen within the state with notice and also
mailed the notice to Missouri.
Theres no question about notice in this case. Shoe knows theyve been sued.
What does Shoe do procedurally? They make a special appearance in Washington at the
office of unemployment to argue that Washington doesnt have personal jurisdiction.
The initial action takes place at the administrative level. We call that a special appearance to
quash1[1] service.
Surprise, surprise! The administrative authority says no dice. Give us the money. They find
in favor of the state.
Shoe appeals to the Superior Court of Washington (the district court). In Washington, the
state trial court reviews the administrative authority as if the trial court were actually an
appeals court.
The state trial court affirms the judgment of the administrative authority. So Shoe has lost
twice now. But they dont pay, they appeal again!
It then goes to the Washington Supreme Court, which also affirms the decision. But Shoe
doesnt pay, they appeal yet again to the United States Supreme Court!
The Supreme Court finally affirms for good.
Why in the world was Shoe willing to litigate this issue all the way to the U.S. Supreme Court?
They seem very motivated.
The bottom line is that we find that the state of Washington does have jurisdiction for the
purposes of this tax over International Shoe.
What would Justice Field have said? He said a state could require a corporation to appoint an
agent for service of process.

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Did the company have property in the state? The office is in Missouri. The contracts are
written up in Missouri. The stock in the corporation is mostly or completely outside the state of
Washington.
Whats in the state of Washington? We have the salesmen and they have their shoe samples
(one shoe of a pair). We also have the money that Shoe sends to pay their salesmen. Can the
salesmen sell any goods in the state of Washington? No way! The salesman can only take
orders.
Shoe has done everything humanly possible to keep from being under the jurisdiction of the
state of Washington.
Could we attach the shoes? Could we attach the permanent sample rooms that theyve
rented?
They try to do personal service on the corporation by serving the salesman. However, theyre
unwilling to make the argument that theyre going to attach the one shoe or the display case.
The state argues that the company is doing a substantial amount of business in Washington,
and the Supreme Court buys into this.2[2]
What is the modern test? Just look at the sentence written by Stone. But what is fair play?
What is substantial justice? How many prongs does this test have? Were going to see
numerous future decisions that try to interpret this decision. Not all of the implications of this
decision are sorted out, even today.
Theres a bell! I just had to ring it. My curiosity has been piqued.
Well soon start picking things up and moving more quickly. We plan to finish International
Shoe today and start on Shafer on Tuesday.
Review
Shoe is a story about the Death of a Salesman! Maybe its not that dramatic, but at least the
Taxing of a Salesman.
The state of Washington slaps a tax on Shoe to help fund an unemployment compensation
scheme to prevent Willy Loman-type situations.
We have a brand new test for personal jurisdiction! Its the minimum contacts test.
The standard for personal jurisdiction in Shoe
What does this standard not mean? Does it have an effect on in rem jurisdiction? No.
Does it have an effect on personal service within the state? Does it change the possibility of
gotcha service? No. Stone explicitly excludes cases where the defendant is not in the
territory of the forum.
If the defendant is out of state, yet has certain minimum contacts within a jurisdiction, we will
determine whether that court has personal jurisdiction based on traditional notions of fair play
and substantial justice. Great!
Heres the problem: Shoe does a poor job of explaining its terms, namely, minimum contacts
and traditional notions of fair play and substantial justice.
The Shoe model
Were given a model of what an out-of-state defendant can do within a state that puts that
defendant under the personal jurisdiction of that state.

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Think about a graph of level of activity versus degree of unrelatedness.
Say a defendant has continuous and systematic contacts with a forum that are related to a
claim. Theres no doubt that the court has jurisdiction over such activities.
So the high level of activity/low level of unrelatedness quadrant gives us jurisdiction, the
low level of activity/high level of unrelatedness quadrant gives us no jurisdiction.
What about high level of activity/high level of unrelatedness? It depends.
What about low level of activity/low level of unrelatedness? Again, it depends.
Think about a shaded area under the line y = x.
Lets apply this vision to an automobile accident like Hess v. Pawloski. You have a single,
isolated contact with the forum. You drive through the state once and do a wrong. Even
without the consent idea, does the state have jurisdiction under the Shoe formulation? You
have only one contact, but that contact is highly related to the claim. If the contact is really,
really related, or the contact is the cause of action, the state can have jurisdiction.
Therefore, Hess v. Pawloski fits into Justice Stones vision.
If we apply the formulation to Shoe, the claim is highly related to lots of contacts in the state
of Washington. This case would fall in the high contacts/low unrelatedness quadrant, and
jurisdiction would result.
Where would Pennoyer fall onto this graph? In particular, think about Mitchell v. Nef.
What was Neffs contact with the Oregon forum? He was trying to acquire land there. He
went to Oregon and hired an attorney to help him get land in Oregon. Thats a contact. But is
that continuous and systematic? Not really.
But how related is that contact to the claim Mitchell had against Neff? The case would fall into
the low contacts/low unrelatedness quadrant, and we must say it depends.
General vs. specific jurisdiction
This doesnt come directly out of Shoe, but its a way that personal jurisdiction is discussed
today. This is a different way of dividing the world of personal jurisdiction.
General jurisdiction is the idea that you have personal jurisdiction over all causes of action,
even those not arising out of contacts with your forum. This is the upper right on the graph.
Specific jurisdiction, on the other hand, is jurisdiction over a specific claim in question, though
not necessarily other claims.
Which of these two types of jurisdiction is going on in Shoe? The jurisdiction is only with
respect to the specific claim; this is specific jurisdiction.
If I go anywhere in the world and do something bad, anybody from anywhere can come to Ohio
and sue me.
The same thing is true of corporations. Theres always somewhere that a corporation can be
sued.

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Also, claim by claim, there may be individual forums where you may be subject to specific
jurisdiction.
In the next few weeks, well be asking the questions: 1. Does the court have specific
jurisdiction over the defendant? 2. Does the court have general jurisdiction over the
defendant?
Yeazells hypotheticals, p. 102
Take the circumstances of Shoe and think about some events taking place in Wyoming.
a.

Say a Shoe truck is on the way to Washington and hits a rancher in Wyoming. The
rancher sues Shoe in Wyoming for personal injuries. Is this an issue of specific or
general jurisdiction? This is specific jurisdiction. Would there be jurisdiction over Shoe
in Wyoming? Yes, because the contact is 100% related to the claim.

b.

What about a former employee of Shoe who moves to Wyoming and sues for wrongful
dismissal? No way. The contact is virtually not a contact at all, and furthermore, Shoe
had nothing to do with the plaintiff going to Wyoming. This would fall solidly into the
low level of activity/high degree of unrelatedness quadrant, and the answer would be
no jurisdiction.

c.

What if the former employee or the rancher sued in the state of Missouri? Missouri
would have jurisdiction. We have a boost in the contacts and the relatedness of the
contacts. We go to the high level of activity/low degree of unrelatedless quadrant
and get a solid case for general jurisdiction. The contacts Shoe has to Missouri are as
great as in any forum: off the charts!

d.

Can we sue Shoe in Delaware? We would not have sufficient contacts related to the
forum to justify specific jurisdiction regarding the former employees wrongful
dismissal claim. But what about general jurisdiction? The law recognizes Delaware as
the state of corporate birth. As a matter of law and fact, if you want to sue a
corporation in the state in which it is incorporated, you can. This is one reason so
many corporations are incorporated in the state of Delaware. They have a special
system of courts just to deal with corporate issues (Court of Chancery).

e.

Say the rancher gets injured, plus gets boned on some bonds he holds from Shoe.
Say the rancher sues for both in Wyoming. What will happen? Under our traditional
analysis, the court would have jurisdiction over one claim (the injury claim), but not the
other (the bond claim). What if the rancher sues for both claims in Missouri? Missouri
has general jurisdiction, and so you can sue them for both there. Delaware will have
general jurisdiction for both issues, and specific jurisdiction on the bonds, since thats
probably where the bonds were issued.

How will the Internet affect this vision of jurisdiction? This is a growing area of interest and
controversy.
How did Justice Stone figure out this case? Stone just made up this vision of jurisdiction.
Shoes Minimum Contacts

Shoe had a large volume of interstate business.


Shoes activities in Washington were systematic and continuous: they always
multiple salespeople in the state during the three year period involved.
Shoe had the right to resort to the courts of the state of Washington.
Shoes obligation arose out of [its] activities. The more related the contact is to the
claim, the more likely the local forum is to exercise jurisdiction.

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Why did Shoe fight this battle?
Shoe did business in a lot of states other than Washington. For Shoe, this is a tax case. They
dont care about jurisdiction. If Washington can tax Shoe, then every state can tax Shoe.
Thats really what this case is about for Shoe, even though they carefully crafted their business
to avoid paying taxes in states other than Missouri and Delaware.
Corporate counsels engage in this kind of planning, and theres nothing wrong with it.
However, the law can change, like it did here
On Thursday, we wound up Shoe. Shoe introduced our modern concept of personal
jurisdiction, which involves minimum contacts and traditional notions of substantive justice
and fair play.
Now well look at cases that develop and interpret the Shoe model.
To review, what were International Shoes contacts?
-

large volume of interstate business

systematic and continuous contacts

the right to resort to the courts

relatedness the obligation arose out of activities e.g. the automobile accident,
where the contact is 100% related to the claim stemming from that accident

One thing we didnt point out about Shoe last week: Justice Black dissented, and said that in
the area of taxation, states should be able to tax businesses coming into their territory. Black
wasnt as concerned about the jurisdiction implication on the facts of this case. Black was
concerned about the language that the court used: substantive justice and fair play are not
in the Constitution or the Fifth or Fourteenth Amendments, yet these are going to be the tests
the Court will use going forward.
The cases so far, in brief
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Pennoyer asks: Is it there?

Shoe asks: Is it fair?

Shaffer v. Heitner
This opinion came down in 1977. Shoe was in 1945. Were jumped forward in time. Thats
important because well go back and pick up cases that came up in the interim, but Stevie Y.
will organize the cases thematically rather than strictly chronologically.
Weve talked a lot about general jurisdiction: everybody, including corporations, can be sued
somewhere. For example, if the company was incorporated in Delaware, they can be sued
there under general jurisdiction principles.
Greyhound was incorporated in Delaware and had their headquarters in Arizona. We could sue
them in Delaware or Arizona without much trouble.
Why was there any question about suing Greyhound in Delaware? Well, we werent suing
Greyhound here. The plaintiff was suing these dudes, these individual directors and officers, in
a:

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Shareholder Derivative Action
A shareholder sues on behalf of the corporation. He sues the officers and directors for breach
of their fiduciary duty. You must also have the corporation as one of the defendants.
So its:
Shareholder (Heitner)
v.
Officers & Directors of the Corporation (including Shafer),
plus the Corporation itself (Greyhound)
It turns out that Heitner owned just one share.
Greyhound is just a nominal defendant, but the real dispute is against the officers and
directors.
Why would Heitner be willing to be the plaintiff in this lawsuit? I mean, he only has one share!
There must be some incentive for him to be the plaintiff here.
Lots of these things settle, and the settlements often have a little something in them for the
named plaintiff.
Where are all these people from? Greyhound is headquartered in Arizona. The bad acts
happened in Oregon. The plaintiff is a non-resident of Delaware; it doesnt make any
difference where hes from. The 28 officers and directors are from all over the place, but
definitely not Delaware.
So the lawsuit is filed in the Delaware Court of Chancery. The question is not whether
Delaware has jurisdiction over Greyhound, its whether they have jurisdiction over the 28
dudes.
Why doesnt Shoe answer this question? To what does the holding of Shoe apply? Shoe seems
to deal with in personam jurisdiction rather than in rem jurisdiction.
The present case is about in rem jurisdiction, therefore, on its face, Shoe doesnt seem to apply
to Shafer.

So the Delaware court seized the 28 dudes stock. Whered the stock go? I dont know.
Delaware has a state law that says that stock in Delaware corporations is considered to be
present in the state. How come? Theyre doing this to establish jurisdiction over stockholders
in Delaware corporations.
What allows Delaware to create this rule? It looks like this comes out of Pennoyer.
In Pennoyer, stuff thats in the state is under the jurisdiction of the state.

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What about the note cases after Pennoyer? How about Harris v. Balk? We find that a debt is
going to be located for in rem purposes wherever the debtor travels! This is what gives us the
law for the present case. The question is, Where is intangible property located? The
Delaware statute answers this question.
Pennoyer + Harris = if we attach the property at the start of the lawsuit, and the property is
located within the jurisdiction of the forum, then the forum has in rem jurisdiction.
The state issues stop orders so the stock cant be sold. So in the old way, the state is all set
to have jurisdiction in rem against the 28 dudes.
Shoe Rules Everything Around Me
Now, the Court says that Shoe rules everything. What happens to Harris v. Balk? Its explicitly
overruled! However, the basic principles of Pennoyer are not overruled.
Whats the rationale? Jurisdiction over a thing is sort of a euphemism for jurisdiction over
the interests of a person in a thing. Everything is owned by somebody, so whatever or
wherever the property is, were really trying to get power over the person through their stuff.
Is the location of the stuff relevant anymore? The test of Shoe is minimum contacts such
that the suit does not offend the notions of fair play and substantial justice. So the
location of the stuff is relevant in so far as it is a contact. In rem gave property a special
status; Shoe says that property is just another contact, nothing special. Well just add it into
the mix.
A hypothetical
Say a relative in Texas dies and leaves you a house there. You offer to sell it to someone in
Texas. After agreeing to sell it, you change your mind. Lets say the person in Texas sues you
for specific performance of the contract, i.e. you must sell the house as agreed.
Under Pennoyer, would the Texas dude have jurisdiction over you? Sure, if they attach the
land first.
Under Shoe and Shafer, we consider the volume and connectedness of our contacts with
Texas. Our contact is that we have land there plus contacts related to the process of selling
the house. What is the relatedness of the claim to the contact? Its very highly related. So,
Texas would have jurisdiction.
The Court says that it would be unusual for a state not to have jurisdiction in a controversy
over some land in a state, because that land is what its all about and would constitute
sufficient contacts.
After Shafer, we will still see courts talking about in rem and quasi in rem. The law says that
all assertions of jurisdiction must be made according to Shoe. Shoe, in turn, encompasses in
personam, in rem, and quasi in rem.
Under Shoe, you dont need to attach property to satisfy Constitutional jurisdictional
principles. State law might establish other requirements when you file a lawsuit over some
property. In practice, you really should attach the property.
Change the factual pattern: lets say you get into a car accident in Ohio, and the victim wants
to sue you over the house in Texas. The contact is the same. You still have the house in Texas.
However, in this factual pattern, the contact is totally unrelated to the claim. Therefore, there
would be no jurisdiction in Texas. Where should the victim sue? She should have sued in Ohio.
Wed like to finish Shafer, do McGee, Hanson, and look at another case that we werent asked
to read. Wed like to start Worldwide Volkswagen tomorrow.

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REVIEW
Shafer 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 defendants
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?
Im getting sued for something that I didnt do.
The court would probably find jurisdiction here, but were on a spectrum; its 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 elses.


This is like the specific performance example.

2.

An action where you try to substitute for personal jurisdiction, in that you apply the
defendants 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.
Lets go back to Delaware and its assertions of jurisdiction. In Delaware, we have general
jurisdiction over Greyhound. The bigger question is: why doesnt 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 Delawares jurisdiction. But what does this have to do
with minimum contacts? Its far from clear.
We have traditionally considered the rules of jurisdiction based on fairness to the defendant.
But the dissenters in Shafer 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 wouldnt have notice. After the statute,
you would have notice.

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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 States
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
Were going back in time to 1957 and 1958. They are decided at about the same time by the
same judges with pretty similar factsyet, the Court comes to two rather different results.
Whats the difference?
McGee
Whats 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. Its 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? Its 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 dont, 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 youve been paying premiums for years and years and they refuse to pay
your claim?
Its 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.

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In other cases, weve heard a lot about the defendants interest, but in this case we hear a lot
more about the plaintiffs interest and the states 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. Its going to be difficult to
prevent jurisdiction in other states when you solicit business in those states.
Wasnt 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 weakbut theres something about this. There seem to be
contacts that warrant jurisdiction. It doesnt 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. Theres 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.
Theres a probate court in Florida that says it has jurisdiction, and theres a declaratory
judgment action in Delaware that says theres no jurisdiction outside the state of Delaware
over the trust.
Whats the result? Florida doesnt have jurisdiction, and the greedy daughter doesnt win.
Tomorrow, well start asking why, through applying contacts analysis, this one comes out that
way.Today, well start World-Wide Volkswagen and take a peek at Harrods (handout).
McGee again
The insurance company didnt 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, well see the Court sort of back off
from having such limited contacts constitute jurisdiction.
Hanson as the evil twin of McGee
Weve gone over the facts. Mrs. Donner enjoys the benefits of her Delaware trust while shes
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.

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Theres a 5-4 split on Hanson, but it goes against jurisdiction for Florida.
Whats 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 doesnt 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 defendants purpose in their
contacts in a new state. Are they active or passive?
Harrods
These cases apply even today. This case was in the 4 th Circuit. It involved a federal anticybersquatting 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 cant 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! Shafer, 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 youre
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 well 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. Theyre on the way to Arizona. While passing
through Oklahoma, they got into an accident. They sued several companies for a product
design flaw. Its a product liability suit.
The Robinsons sue everybody. This is a good strategy, future plaintiffs lawyers. If youre
going to sue anybody, sue everybody that can possibly be liable.
Weve sued all the way up the food chain here for this defective product.
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Where did we sue them? In Oklahoma.

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In what kind of court? A district court.


Who challenges the jx of the OK court? Seaway and World-Wide (retailer
&distributor).
Volkswagen of America challenged the jurisdiction of the Oklahoma court initially,
but then dropped their challenge.

Why didnt 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! Theyre 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 didnt have personal jurisdiction. But
you dont 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 judges ruling in the middle of a
proceeding. Judges dont like to be reversed.
Also, why didnt the plaintiffs sue the dude who actually ran into them? The guy was an old
drunk. Hes judgment-proof! He didnt have insurance.

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

Review
In World-Wide, the family that gets into a car accident in Oklahoma sues everybody.
The key to the case: Does the test of minimum contacts a one-part test or a two-part
test?
The two functions of the Shoe test
Justice West says that the main functions of the Shoe test are:
1.

To protect the defendant against having to litigate in far-off lands

2.

To keep the states power in line

These ideas come right out of Pennoyer. Defendants ought not be subject to unfair burdens,
and state power must be constrained.
The first function is known as the convenience prong of Shoe. The second function is known
as the sovereignty prong.
The convenience prong
White says that the fair play test speaks to the convenience of a particular forum. He spells
out in detail what he perceives to be the factors one ought to consider on this prong. He says
how we will do fair play and substantive justice from now on.
Whites factors:

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1.

Burden on the defendant burdens on corporate defendants tend to be diluted as


compared to burdens on individual defendants.

2.

The states interest what interests does the forum have in having that litigation in
that state as far as protecting its citizens and corporations?

3.

The plaintiffs interest everyone would prefer to sue in their own forum.

4.

Interstate efficiency interest is this forum better, more efficient, more expedient, or
cheaper than any other forum?3[1] It is rare that jurisdiction in a case turns on
efficiency, because it can usually be argued both ways.

5.

Interstate policy interest this would be a stretch. The Courts of Appeals these days
tend to lump this and efficiency together.

On an exam, know and go through all five prongs. However, the big three are the
first three, where the defendants burden is primary.
Note that these factors have nothing to do with minimum contacts, but rather with traditional
notions of fair play & substantial justice.
Does the court apply these five factors in the case of Seaway and World-Wide? No, and what
does that tell us? He takes a lot of time to develop these factors, yet he doesnt apply them.
What conclusion do we draw? He implies that minimum contacts is the threshold, and thus if
you dont have contacts, you never get to fair play.
So there are two prongs, and two parts. The parts are (1) minimum contacts, and (2) fair play,
as detailed by White.
The Supreme Court reverses the ruling of the Oklahoma Supreme Court, and thus Oklahoma
has no jurisdiction over the defendants.
Minimum Contacts in World-Wide
If this case is not decided on fair play, it must be decided on contacts. What do we look at for
contacts?
Is foreseeability the test? NO! White explicitly rejects this as the test. Its conceivable that
everything every manufacturer makes could find its way to Oklahoma.
What about foreseeing being sued in a jurisdiction? You might decide to get insurance.
Remember to reread your brief before class, especially if its been a long time since you
looked at the case.
White gives us other suggestions. How about purposeful availment? Well, that gives the
defendant clear notice that they can get sued in the state where they solicit business. But
Seaway and World-Wide dont solicit business in Oklahoma and in no way seek the legal
protection of that state.
What about the seeks to serve standard? If you market in other states, and try to get
business there, its reasonable to think its possible you can get sued there.
The court never gives us a clear definition of minimum contacts.

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So purposeful availment and the seeks to serve standards apply to minimum contacts, while
the five convenience factors above relate to fair play.
Hypotheticals
Say we have an Audi dealer in Camden. The dealer advertises in Pennsylvania. Could
Pennsylvania have jurisdiction? How much did they advertise and in what venues? Did they
broadcast, and if so, where? Did they advertise on Pennsylvania TV? The content of the
advertisement might be important as well. How many cars did they sell in Philadelphia and
how many in New Jersey?
Another example: consider Seaway. Instead of just buying the car, you go in to have your
brakes done and then you end up in a wreck in Oklahoma due to those faulty brakes. Will
Oklahoma have jurisdiction in this case? What distinguishes this case from World-Wide? What
if Seaway has notice? What has changed about the contacts if Seaway is put on notice?
Thats not going to make a difference. There must be more than notice to create contacts.
Two forgotten defendants: Audi and VW
Initially, Audi didnt object to jurisdiction and VW conceded to jurisdiction after a short fight.
What does White tell us about jurisdiction over these two parties?
He says if the defendants introduce their products into the stream of commerce in a
jurisdiction, they will be subject to the jurisdiction of that forum. Arent Seaway and WorldWide putting products into the stream of commerce too? Whats different?