Personal Jurisdiction in Context

Welcome to the Civil Procedure Podcast. I am your host, Thomas Maine, and this episode is called Personal Jurisdiction in Context. This episode offers some history and some big-picture perspective about the doctrine of personal jurisdiction. There's another episode that focuses on the application of the contemporary doctrine, and that other episode is called Personal Jurisdiction in Practice. So this episode is instead about context. The doctrine of personal jurisdiction is all about who hosts the litigation. Personal jurisdiction is sometimes referred to as jurisdiction to adjudicate or as adjudicatory jurisdiction. It's asking the question, "Can this forum adjudicate this matter?" Or I like to think of it as, "Can this forum host this litigation?" Now, importantly, the doctrine is not necessarily about what state's law will apply. That might follow, but it doesn't necessarily follow. Which jurisdiction's law will apply is the subject of conflict of laws. That's another doctrine and another course. But the point of emphasis here is that the courts of Missouri might have personal jurisdiction, but whether they then will apply Missouri law or Arkansas law when they host, that's a separate question. A second point of clarification. Personal jurisdiction is also not necessarily about who will enforce this judgment. It's entirely possible that if the courts of Missouri have personal jurisdiction over the matter, that it might be some other court that ultimately seizes the defendant's assets and enforces the judgment issued by the Missouri court. Now there are certainly reasons that we could align those principles with personal jurisdiction. We could unify those doctrines about what law applies and what jurisdiction will enforce the judgment. We could align those doctrines with personal jurisdiction, but there are also reasons why we don't. Because those doctrines are not unified, we need to be careful to make sure that we follow what is in fact at stake with respect to the personal jurisdiction doctrine and what isn't. What is at stake with respect to personal jurisdiction is whether the court gets to host the litigation. Because the host will also be determining the disputing parties' rights and responsibilities. They might be determining those rights and responsibilities according to some other jurisdiction's law, and they might be determining those parties' rights and responsibilities, and then in fact some other jurisdiction will in fact have to enforce that judgment. But personal jurisdiction is about whether this court can host the inquiry that will determine the parties' rights and responsibilities. This doctrine about hosting matters for a whole bunch of reasons, but as an initial matter I want you to think about this doctrine as giving permission to host and also denying permission to host. So put another way, doctrines like this are giving green lights, allowing courts to exercise personal jurisdiction, but are also giving red lights, denying courts from exercising personal jurisdiction. Let's think about why these signals matter. First, personal jurisdiction is important because where litigation can take place or where litigation must take place can affect whether litigation takes place at all. If litigation is conveniently available to plaintiffs, and of course it's plaintiffs who make the decision to file suit, so if litigation is conveniently available to plaintiffs, well then they're more likely to sue. Think of yourself. Imagine that your landlord wrongfully retains your $2,500 security deposit. If you can sue your landlord where you want to sue, well you're more likely to sue, but that court would need to have personal jurisdiction over that landlord defendant. Imagine that the only court with personal jurisdiction over that defendant would be in a neighboring state, or maybe only the courts in Alaska would have personal jurisdiction over that defendant, or in the most extreme example possible, maybe no court in the U.S. would have personal jurisdiction. Then you'd need to sue in some foreign country. This is about convenience, of course, but let's unpack that just a little bit. If you're forced to file a suit in some distant place, you'd need to find a lawyer there. But if it's an unfamiliar place, it would be harder to find a good one, to find an appropriate one. And if it's a distant, unfamiliar place, well then also in the back of your mind, or maybe the front of your mind is the idea that this is going to be a one-time only transaction where this lawyer represents me in this case. That fact alone would make me wonder whether I'm going to get this lawyer's best work, because they're not going to be thinking about repeat business. This is a one-off incident. Also if I need to sue in some place that isn't the most convenient place for me, it's going to cost me more to travel to and from there for litigation. Also if personal jurisdiction requires me to sue in some inconvenient place, well, I might feel like a stranger there. I don't have any network to help me navigate the local scene there or to gain familiarity with the scene there. Net, net, you're less likely to file the suit if the personal jurisdiction doctrine is flashing red lights for the local familiar courts, stopping you from filing in those jurisdictions. And if the only green lights are in inconvenient places, well, then again, you're less likely to file that suit. Next, personal jurisdiction also will constrain your jointer options. Let's first imagine you wanting to join multiple defendants in the same suit. I want to sue the manufacturer and the seller of this defective product. Here's the problem. Once we have personal jurisdiction doctrines providing green lights for certain jurisdictions and red lights to others, and it's certainly possible we could imagine that you can't sue both of these defendants in the same jurisdiction, which means I'm only going to sue one of them or I need to bring two suits and all that that entails with lawyers and multiple jurisdictions and lawsuits and multiple jurisdictions. The same thing can happen even on the plaintiff side of the V with respect to jointer. Maybe you find a similarly situated plaintiff and you'd like to enjoy certain economies of scale by joining as plaintiffs ensuing a common defendant. Well, depending on how this personal jurisdiction doctrine works, maybe there's personal jurisdiction over the action by plaintiff number one, but not in the action brought by plaintiff two. Personal jurisdiction, then, can constrain your jointer options. The host of litigation also matters because the host will apply its own procedure. Now, I said earlier that personal jurisdiction doesn't necessarily mean that the hosting court will apply its own substantive law. That's true, but it will apply its own procedural law. Well, that necessarily means, then, that personal jurisdiction in giving green lights and red lights to certain jurisdictions is foreclosing certain options to me where I might want to file to take advantage of certain state procedural laws. Because plaintiffs file suits, plaintiffs are the ones that are choosing the forum. Well, necessarily, then, the constriction or expansion of personal jurisdiction correlates with the constriction or expansion of the plaintiffs options. More options, better for plaintiffs. Fewer options, worse for plaintiffs. And because we're talking strategy here, if I'm a plaintiff's lawyer thinking about filing a lawsuit and surveying jurisdictions where I might have the green light, where I might be able to get personal jurisdiction over the defendant, I'm not only evaluating the convenience to my client or the favorability of that forum to my client, but also I'm considering the inconvenience to the defendant and the unfavorability to the defendant. That's part of my calculus as well. Now, in addition to these admittedly crass calculations about strategy, personal jurisdiction also prompts some really big profound questions about our system of courts. In any of the circumstances where we are imagining suits in, let's say, that we have a dispute that somehow touches on Missouri and Arkansas and Illinois, it's not only the disputing participants that care about who hosts the litigation. The states themselves, states qua states, we would say, to use the fancy terms, the states themselves might have a stake in answering the question, who has jurisdiction? Since after all, if an action, in a sense, transcends the boundaries of those three states, well, in litigation in, let's say, Missouri means that as a practical matter, neither Arkansas nor Illinois is going to host the litigation. Well, if the defendant is from Arkansas and the suit involves property in Illinois, what about those states' interests in hosting that litigation? And so the point then is that we might imagine a personal jurisdiction doctrine trying to account for those interests. Whatever we ultimately decide to bake into our personal jurisdiction doctrine, there's another sort of big question that we would need to resolve. And that big question is, are we going to have a personal jurisdiction doctrine that steers cases to the best forum, which would mean that there's only one jurisdiction that gives the green light for personal jurisdiction with all jurisdictions other than the chosen one, flashing red lights, disallowing the exercise of personal jurisdiction? In fact, that's not the approach we've taken, although it's fair to say that some of those issues lurk. Our doctrine has only asked whether the instant court has personal jurisdiction. And implicit in that is the idea that there might be multiple courts that could exercise personal jurisdiction or put another way, our doctrines do not ask whether this is the best court to exercise personal jurisdiction, but rather whether this jurisdiction is good enough to exercise personal jurisdiction. Think of it as a minimal threshold test rather than benchmarking it against any conceivable alternative jurisdictions. So what then is the content of that test? What makes a jurisdiction good enough to exercise personal jurisdiction? Well, since 1877, and the famous case of Pinoyer versus Neff, we've said that a court can exercise personal jurisdiction provided that that exercise is compatible with the due process clause. If it's compatible with the due process clause, it's good enough. As I said earlier in another episode called personal jurisdiction in practice, we tackle the contemporary application of personal jurisdiction doctrine. I instead here want to take the opportunity to lay some background about how we got there. So let's look at some history. I think the most important thing for a first year law student or a practitioner to know about the arc of history of personal jurisdiction is the evolution between regimes of certainty on one hand and regimes of flexibility on the other. And by the way, this includes faux certainty, faux flexibility. Sometimes the appearance of certainty or flexibility is illusory. But the modern history of personal jurisdiction begins with that Pinoyer case. And I think it's useful to see this as the commencement of a regime that valued certainty in the area of personal jurisdiction doctrine. In any area of law, certainty has some virtues. Certainty is good because it allows people to order their affairs with confidence about the consequences of their actions. That sort of predictability also reduces the number of disputes and the associated transaction costs that come with disputes because people know what the law requires. So they follow the law or if they don't follow the law, everybody knows what the law will require. So there isn't much litigation about it. That's what predictability delivers. Certainty also ensures that similarly situated people are always going to be treated similarly. And that sounds about as fundamental of a principle of justice as one can imagine. Similarly situated people being treated similarly. Now specifically with regard to personal jurisdiction, certainty is good because you can advise your client with confidence about their options. We can file here or we can file here but we can't file there. Or if you engage in this action here you can't be sued there or you will be subject to suit there. We can advise our client. Now when instead we have to hedge about what the law requires, sometimes it sounds to clients like we don't even know what we're talking about. They start wondering where we went to law school, whether we passed the bar, whether we're a real lawyer. Well that's yet another virtue of certainty and predictability. Now it's something of a paradox that Penoir is about certainty because it's so hard to read. But with the help of a translator, a reader can see that the Penoir opinion lays out the four bases for the exercise of personal jurisdiction. Now this is the traditional test. It is not the current test. But the traditional test had four bases for personal jurisdiction. These are laid out in the Penoir case and any one of these four bases could be the grounds upon which a court exercised personal jurisdiction in a manner that would be consistent with the due process clause. So these were the bases. Any one would be good enough. Basis number one, consent. If a defendant consented to personal jurisdiction in a particular place, well then that place would have personal jurisdiction. After all, the logic goes, the due process clause is about fairness. And if the defendant's consenting, well then it's sort of presumptively fair. They're consenting to jurisdiction there and that would be one of the four bases under the traditional test. Basis number two, what we call in personum jurisdiction, in personum. What it really meant was in hand service within the state. So in personum jurisdiction was established if, but only if, the defendant was served, meaning served with papers, served with the summons and the complaint, served in hand, not by mail, not by leaving it with your spouse, not by leaving it at your workplace, and not just served in hand, but served in hand within the forum state. Now from the perspective of certainty, appreciate that this second basis in personum jurisdiction had two conditions. Service in hand and that service occurred within the forum state. Let's go to the third traditional basis. It was called in rem. This basis was established if, but only if, the defendant had property in the forum state and the litigation was about title to that property. Again, two conditions, property in the forum state and the litigation is about title to that property. From the perspective of certainty, this third basis, oh, yep, I see when there is and isn't in rem jurisdiction, two necessary and sufficient conditions to establish it. The fourth basis and final basis, quasi in rem jurisdiction. This was established again if the defendant had property in the forum state, but this one didn't require litigation to be about title to that property. That was the third basis. The fourth basis, quasi in rem. Yes, again, the defendant needs to have property in the forum state, but even if the litigation wasn't about that property, the court would have jurisdiction up to the value of the defendant's property that was in the forum state. Think land, boat, tools, vehicle. If the defendant had property in the forum state, the court had personal jurisdiction over that defendant up to the value of that forum property. Now with both in rem and quasi in rem, the property needed to be attached at the outset of the litigation, and what attachment means varies from jurisdiction to jurisdiction and even from asset to asset. How do you attach a boat? Does somebody need to seize it or merely put a sign on it and lock it to a dock? How do I attach crops that are growing in a field? Maybe it just requires somebody to circumnavigate the crops, post signs every quarter mile and to mouth some magic words while they're circumnavigating the field. The important point here is not to identify exactly what assets required, what types of attachment in which jurisdictions, but rather to appreciate that there was one overarching requirement here in order for in rem or quasi in rem jurisdiction to be exercised, and that was that whatever the mechanics are for attaching property in that jurisdiction, those mechanics needed to be pursued at the outset of the litigation. Now from the perspective of certainty, the property that is attached has that clarifying role of establishing jurisdiction and in the instance of quasi in rem jurisdiction indicating the quantum of the court's jurisdiction since the court's jurisdiction extended only to the value of that attached property. The traditional Penoir test experienced the stress that rigid, predictable, certain regimes invariably do, and that stress test is often referred to as mischief. There are two kinds of mischief, although the two kinds are related and really two sides of the same coin. One kind of mischief is created by virtue of the fact that our rigid, predictable rules can't imagine every conceivable circumstance in which those rules would be applied. And so when circumstances present that were unanticipated, we may not like the result that our rigid, predictable regime is producing for us. It's all of a sudden the algorithm looks bad. The second kind of mischief is that when there is an algorithm, that algorithm or formula can be contorted by somebody to reach a result that wasn't desired by the designers of that rigid, predictable formula or algorithm. That first kind of mischief will happen because the unimaginable is inevitable. It's coming. And the second kind of mischief will happen because people are rewarded handsomely for creative arguments. And especially when there is a rigid, predictable rule that allows you to exploit that rigidity by finding ways to formally comply with it or to fit within its confines, well, then creative lawyers like you will find a way to do it. In both of those instances of mischief, what you realize is that the formula, the rigid, predictable, certain algorithm is providing an answer that doesn't match your intuition. It's giving us what feels like the wrong answer. And when a rigid system produces what feels like the wrong answer, you've got two ugly choices. Choice number one is to live with the result that we just described as something that seems like it's not the right answer. So that's an ugly option from the perspective of justice or common sense. But the other option is that we abandon our rigid, predictable algorithm in circumstances where it isn't producing the right answer. But that's problematic because it defeats the very purpose of having a rigid, predictable algorithm, an algorithm that has an escape hatch in circumstances where it's not providing us the right answer is not a very certain and predictable test at all, meaning we've squandered the very virtue of certainty. So, for example, with Pinoyer, because one of the categories for establishing personal jurisdiction was consent, we saw very creative expansions of what constitutes consent. Does that word consent include implied consent? Does it include an entirely fictionalized consent? Or instead is consent only an informed, knowing, willful, written species of consent? Where did we see this in the context of personal jurisdiction? As interstate travel and interstate commerce became more popular, it was difficult for states to obtain personal jurisdiction over out-of-staters who engaged in some negligent act within the state that injured a local. Oklahoma travels into Texas, injures a Texan, and then gets back into Oklahoma by the time the lawsuit is filed. Well, reviewing the basis for personal jurisdiction authorized by Pinoyer, if that Oklahoman wasn't present in the state of Texas, well, then in-hand in-state service was a non-starter, so there isn't going to be in-personum jurisdiction. And if the Oklahoman didn't have property in Texas, then in-rem and quasi-in-rem jurisdiction were also unavailable. So states started experimenting with the idea of consent. Can you have a statute that says, "Hey, if you drive on our Texas roads, you are thereby consenting to personal jurisdiction in some future suit." Can you say that? Or how about a statute that says if you sell a product in our state, "You are thereby consenting to personal jurisdiction in some future suit." Or for that matter, maybe the statute says, "Hey, any out-of-stater is consenting to personal jurisdiction in this state if you injure somebody who is from this state, no matter where you injure them." The traditional test experienced the stressors because it doesn't seem right that the state of Texas wouldn't have personal jurisdiction over that Oklahoman who comes into the state of Texas, engages in a negligent act in Texas, injures a Texan, well, then to get the intuitively right result, the courts started tolerating more fictionalized notions of consent and those fictionalized notions perverted the algorithm. To reach the intuitively right results, courts also started getting creative with notions of what it meant to have "property" in the state. Remember that under the traditional Penoir test, personal jurisdiction would be proper if a defendant had "property" in the state and under theories of quasi and REM jurisdiction, there could be jurisdiction even if the suit was unrelated to the property that the out-of-stater had in the forum state. But what exactly is "property"? Especially as transportation and commerce experienced dramatic change since the 1877 Penoir decision, the meaning of "property" and the exploitation of that meaning to allow the algorithm to reach the intuitively right result was intense. Let's go back to that Texas court getting personal jurisdiction over an Oklahoman who injured the Texan in Texas. Well, even if that Oklahoman doesn't own a vacation home in Texas or doesn't have a boat docked in Texas, maybe they're licensed to practice law in Texas. Is that licensed to practice law "property" or more creative yet? What if the Oklahoman has money deposited in a bank in their state of Oklahoma, but you know what? That Oklahoma bank has a branch in Texas. Well, if you could walk into that Texas branch and withdraw money from that account, maybe that Oklahoman has "property" in the forum state of Texas. Wow, really? Well, lawyers will get, or strike that, you will get creative when you are rewarded handsomely for such creativity. And that's what was happening with the personal jurisdiction algorithm. Well, that's what happens with every algorithm. Circumstances, putting pressure, circumstances like the ubiquity of interstate travel and interstate commerce that were not anticipated, and lawyers creating creative arguments with judges countenancing those arguments so that the algorithm generated the intuitively right result. The traditional Penoir model ultimately did not withstand these stressors, and the case International Shoe was the result. This new model took a different approach based on the relationship among the claim and the defendant's contacts and the forum. And with this model, the pendulum shifted away from the supposed rigid certain predictable model of Penoir and replaced it with inquiries that allow plenty of wiggle room. Replacing those four traditional categories that were at least initially and facially certain and predictable, not the new categories, the new concepts in International Shoe include vague concepts like systematic and continuous, minimum contacts, fair play and substantial justice. With this pendulum swing in the jurisprudential approach, whether a court had personal jurisdiction in any given case became a highly fact dependent inquiry which had the virtue of flexibility and justice for the individual case. There was no algorithm now, no algorithm to create mischief here, because there was no algorithm or formula or test that really tied the judge's hands. Rather, each case could be resolved on its own merits. But of course, flexible approaches too have their own pathologies. Standards that do not constrain or rules that do not dictate outcomes, they allow similarly situated persons to be treated differently. Rules that do not dictate outcomes create transaction costs because every inquiry becomes a free-for-all, requiring fact finding and disputes and hearings and court decisions. Such uncertainty and lack of predictability makes it hard even for us to advise our clients about the consequences of certain acts. So our client asks us, "Hey lawyer, can I be sued in Wisconsin if I do such and such?" Our answer, "Well, who's to know for sure it depends?" Now one way to view the 75 years of personal jurisdiction case law since International Shoe is as an effort to restore some sort of order and predictability and certainty to an otherwise unwieldy mess. Oops, I mean to a highly flexible and discretionary result. In all of the modern techniques for establishing personal jurisdiction, one can observe a deliberate effort by the court to discipline that unwieldy model. For example, the scope of general jurisdiction has shrunk from systematic and continuous presence somewhere to the very specific inquiries into state of incorporation and principal place of business corporate headquarters. Not only narrowing the scope of general jurisdiction, which tends to get more of the attention and is true, but not just narrowing, the clarification makes the inquiry into general jurisdiction much more certain in its scope. Specific jurisdiction, too, has shrunk and grown more certain by the requiring of targeting. Forum selection clauses are now virtually rubber-stamped as opposed to something that is a more discretionary inquiry. We've also seen a cabining of the exceptions to TAG or transient service. In each of these instances, the jurisprudential pendulum is shifting back toward certainty, and your seeing this arc can help you better see personal jurisdiction doctrine in this broader context. Finally, personal jurisdiction gets a lot of attention in a civil procedure course because there is fun and relevant history, because there are big shifts in the doctrine, because it features case law, and because it taps big constitutional questions. Personal jurisdiction is a particularly favorite topic among civil procedure professors who didn't practice. Now, truth be told, personal jurisdiction is not a very big issue in contemporary litigation. It doesn't arise frequently, and more importantly, it doesn't sneak up on you. The issue always arises early in litigation at a consistent moment. When the issue does arise, it's isolated, it's not intertwined with other issues, and you can see it coming a mile away. And as a practitioner, you can often even avoid the issue altogether by filing in this jurisdiction instead of that one, and the jurisdiction issue disappears. However, when the issue of personal jurisdiction does arise, it can be enormously consequential, highly contentious, and it is almost always very fact contingent, and many of us lawyers really love that. That's it for this episode about personal jurisdiction in context. Thank you for your attention, and have a good day.