The Personal Jurisdiction Requirement for Civil Lawsuits in U.S. Courts

A certain connection between a defendant and the geographical jurisdiction of a court is necessary in order for a civil lawsuit to proceed in the U.S.

This connection exists, for instance, if an individual defendant is served with a summons and complaint while he is in the geographical jurisdiction of the court or if the defendant waives the defense of lack of personal jurisdiction. Similarly there is clearly personal jurisdiction when an individual defendant is a resident of the geographical jurisdiction of the court or a defendant corporation or other business entity was organized under the laws of that jurisdiction or is “doing business” there.

U.S. Supreme Court Building

In addition, there is personal jurisdiction if the defendant has sufficient “minimum contacts” with the forum state, such that summoning the defendant to the forum state would not offend “‘traditional notions of fair play and substantial justice.’ ” This is the U.S. Supreme Court’s articulation of the requirement under the due process clauses of the Fifth and Fourteenth Amendments to the U.S. Constitution. The Supreme Court also has said that a defendant’s “minimum contacts” with the forum must be more than “random,” “fortuitous,” or “attenuated.” Sufficient contacts exist when “the defendant’s conduct and connection with the forum . . . are such that he should reasonably anticipate being haled into court there.” In assessing the defendant’s reasonable anticipation, there must be “ ‘some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum . . ., thus invoking the benefits and protections of its laws.’ ”[1]

This test is the same whether the defendant is from another state in the U.S. or from a foreign country. However, as the United States Supreme Court has stated, “ ‘Great care and reserve should be exercised when extending our notions of personal jurisdiction into the international field.’ ”[2]

Thus, any defense lawyer in a civil case immediately must determine whether personal jurisdiction obviously is established or whether there is a legitimate basis to challenge this requirement by asserting the defense in the answer to the complaint or by moving to dismiss the case before anything else happens.[3]

As a civil litigator, I encountered this issue all the time in my practice. In two cases for foreign clients I obtained dismissal of the complaint for lack of such jurisdiction at the start of the cases.

Fraser Bridge, Delta, B.C., Canada

In one case, my client was a Canadian corporation from Delta, British Columbia that was a subcontractor to a company from the State of Washington that had an agreement with a Twin Cities FM-radio station to provide certain electronic equipment for the station. The equipment was manufactured by the Canadian company and sold to the Washington company that in turn sold it to the radio station. The equipment allegedly did not work properly so the station sued the Canadian company in a Minnesota state court. The trial court granted the motion to dismiss for lack of personal jurisdiction, and the appellate court affirmed. The latter emphasized that the Canadian company never had an office, owned property or filed tax returns in Minnesota, had never had a mailing address or telephone number in this State, and did not negotiate any agreement with the radio station. While the Canadian company, upon request, shipped the equipment directly to the station in Minnesota and later sent a technician to the state to attempt to fix the equipment, hand delivered a part for the equipment to the station and mailed certain drawings of the equipment directly to the station for use by its consultant, these contacts were insufficient to justify jurisdiction.[4]

Singapore skyline

In the other case, my clients were parent and subsidiary companies from Singapore. Again the trial court (Post: Minnesota’s Federal Court (June 28, 2011) dismissed the case for lack of personal jurisdiction, and the appellate court affirmed. The latter court noted that the Singapore subsidiary had sent numerous letters and faxes and made several telephone calls to Minnesota in connection with the contract and that the contract contained a Minnesota choice-of-law provision. In addition, the Singapore subsidiary sent four samples of the product in question to Minnesota. These, however, the court held to be insufficient to justify personal jurisdiction.[5]

The appellate court in this second case concluded by saying that the negotiations, meetings, production, and delivery were all centered in Singapore. The contacts with Minnesota appeared at best as inconsequential rather than substantial under these circumstances. The Singapore subsidiary did not create a substantial connection between itself and Minnesota, it merely engaged in negotiations with a purchaser who happened to reside in Minnesota. Given the nature and quality of the Singapore subsidiary’s  contacts with Minnesota, traditional notions of fair play and substantial justice indicated that it would not expect to litigate in the State of Minnesota.[6]

The personal jurisdiction issue is part of the regular tool kit of the trial lawyer and litigator. Yet it is built on the constitutional bedrock of fair play.


[3] E.g., Federal Rules of Civil Procedure 8 (c ), 12(b)(2).

[4]  KSTP-FM, LLC v. Adtronics Signs, Ltd., 602 N.W.2d 919 (Minn. Ct. App. 1999).

[5] Digi-Tel Holdings, Inc. v. Proteq Communications, Inc., 89 F.3d 519 (8th Cir. 1996).

[6]  Id.

U.S. Litigation over a Russian Real Estate Project

Moscow, Russia

After the collapse of the Soviet Union in 1989, many U.S. businesses sought new opportunities in Russia.

One was Ellerbe Becket Construction Services, Inc. (Ellerbe), a Minneapolis-based firm that offered architectural, engineering and construction management services. To assist them in this effort, it hired Nicholas Loukianoff, a Russian-American citizen who was bilingual in English and Russian.

One of the potential projects for Ellerbe was a Korea-Russia Trade Center in Moscow, and Ellerbe asked Loukianoff to help find a site in Moscow for such a building. However, the potential Korean client decided not to proceed, and the building was not built.

Nevertheless, Mr. Loukianoff’s company sued Ellerbe in federal court in San Francisco, California for damages under various legal theories. I was the principal lawyer for Ellerbe in this case.

During the pre-trial discovery, I took the deposition of Mr. Loukianoff’s expert witness, a newly minted Russian real estate agent. I did so by telephone from my office in Minneapolis to Ellerbe’s Moscow office with the English-Russian interpreter in Moscow. During the course of my examination, I asked him something like, “Private real estate transactions in Russia have only been happening in the last several years, right?” He did not agree with that statement and mentioned Russia’s sale of Alaska to the U.S. in 1867. That comment still makes me chuckle.

Several weeks before the trial was scheduled to start in January 1999, the court granted Ellerbe’s motion for summary judgment on three of plaintiff’s claims. Thus, the only claims left for trial were breach of contract and quantum meruit (reasonable value of services).[1]

At the start of the trial, the court granted other Ellerbe motions to exclude certain plaintiff’s evidence at trial, including a new damage theory (1% of the total built-out cost of the Center that was never built).[2] As a result, the potential value of plaintiff’s case collapsed, and the case immediately settled with a very modest payment by Ellerbe.

I still wish that I had obtained a trip to Moscow for this case.


[1] Memorandum Decision & Order, NAL Associates, Inc. v. Ellerbe Becket Construction Services, Inc., No. C-97-0997 (N.D. Cal. Jan. 8, 1999).

[2] Order , NAL Associates, Inc. v. Ellerbe Becket Construction Services, Inc., No. C-97-0997 (N.D. Cal. Jan. 26, 1999).

The Founder of Modern Conservatism’s Perspective on the Current U.S. Political Turmoil

Edmund Burke

Edmund Burke (1729-1797) was an Irish statesman, author, orator, political theorist and philosopher who, after moving to England, served for many years in Britain’s House of Commons as a member of the Whig party. He is remembered for his support of the cause of the American Revolution and for his later opposition to the French Revolution. He often has been regarded as the philosophic founder of modern conservatism.[1]

In 1774 Burke was elected to Parliament for Bristol, which at the time was “England’s second city” and a great trading city. Many of his constituents were opposed to free trade with Ireland, which Burke supported. This and other issues lead to his defeat in the 1780 parliamentary election.

After his election in 1774, Burke gave what became a famous speech on the philosophy of the duties of an elected representative. He said:

  • “[I]t ought to be the happiness and glory of a representative to live in the strictest union, the closest correspondence, and the most unreserved communication with his constituents. Their wishes ought to have great weight with him; their opinions high respect; their business unremitted attention. It is his duty to sacrifice his repose, his pleasure, his satisfactions, to theirs—and above all, ever, and in all cases, to prefer their interest to his own.
  • But his unbiased opinion, his mature judgment, his enlightened conscience, he ought not to sacrifice to you, to any man, or to any set of men living. These he does not derive from your pleasure—no, nor from the law and the Constitution. They are a trust from Providence, for the abuse of which he is deeply answerable. Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion. . . .
  • [G]overnment and legislation are matters of reason and judgment, and not of inclination; and what sort of reason is that in which the determination precedes the discussion, in which one set of men deliberate and another decide, and where those who form the conclusion are perhaps three hundred miles distant from those who hear the arguments?
  • To deliver an opinion is the right of all men; that of constituents is a weighty and respectable opinion, which a representative ought always to rejoice to consider. But authoritative instructions, mandates issued, which the member is bound blindly and implicitly to obey, to vote, and to argue for, though contrary to the clearest convictions of his judgment and conscience—these are things utterly unknown to the laws of this land, and which arise from a fundamental mistake of the whole order and tenor of our Constitution.. . .
  • Parliament is a deliberative assembly of one nation, with one interest—that of the whole—where not local purposes, not local prejudices, ought to guide, but the general good, resulting from the general reason of the whole. You choose a member, indeed; but when you have chosen him, he is not member of Bristol, but he is a member of Parliament. If the local constituent should have an interest, or should form an hasty opinion evidently opposite to the real good of the rest of the community, the member for that place ought to be as far as any other from any endeavour to give it effect.” [2] (Emphasis in bold added.)

Fast forward from Britain in 1774 to the U.S. in 2011. Many groups now ask or demand that candidates for public office sign pledges to adhere without exception to certain positions held by the group. I think especially today of Grover Norquist and his Americans for Tax Reform with his insistence on “no new taxes.”[3]

This is a horrible development in our political life. I am opposed to all such pledges on the grounds advanced by Burke. I am also opposed to the Norquist pledge in particular.[4]


[2] Edmund Burke, Speech To The Electors Of Bristol At The Conclusion Of The Poll (Nov. 7, 1774), http://press-pubs.uchicago.edu/founders/documents/v1ch13s7.html.

[3]  Wikipedia, Grover Norquist, http://en.wikipedia.org/wiki/Grover_Norquist; Americans for Tax Reform, http://www.atr.org/taxpayer-protection-pledge.

[4] Post: My Political Philosophy(April 4, 2011); Post: Passionate, Committed Political Leadership (July 22, 2011); Post: Disgusting U.S. Political Scene (July 23, 2011).

Disgusting U.S. Political Scene

The current political wrangling in the U.S. Congress over the U.S. debt ceiling is disgusting.

In order for the U.S. to avoid defaulting on its Treasury securities, the U.S. Congress needs to pass a bill to increase the debt ceiling before August 2, 2011. If the Congress does not do so, then there would be catastrophic consequences for the U.S. and hence the global economy. Most economists and informed commentators, I think, are agreed on these propositions. Moreover, in my opinion, it is too risky to experiment and test the contrary views expressed by the minority.

Some stupid suggestions have been made to evade the above analysis and not raise the debt ceiling. Former Minnesota Governor and presidential candidate Tim Pawlenty said the U.S. could continue to pay interest on its securities (a lot of which are held by the Chinese government) and not pay U.S. military personnel and ordinary Americans.[1] Another Minnesota presidential candidate, Michelle Bachmann, has taken a similar position.[2] Even if such absurd actions could avoid adverse reaction in the world market for U.S. securities, which I doubt, who can seriously believe that there would not be a horrendous chain of reactions from our military personnel and citizens?

How can Pawlenty and Bachmann be taken as serious presidential candidates in light of just these stupid suggestions? Yet I read that Bachmann was number one in recent opinion polls of Republicans.

U.S. Senator Mitch McConnell, the Republican leader in the Senate, has admitted that not raising the debt ceiling runs a very high risk of causing disastrous consequences to the U.S. Therefore, he has proposed what is sometimes referred to as “Plan B,” a bill that would allow President Obama unilaterally to raise the debt ceiling for the balance of his term of office. This plan, McConnell crassly admitted, was motivated by his desire not to help President Obama get reelected.[3]

The Republicans’ call for reductions in government spending  flies in the face of the elemental formula for Gross National Product: B (business spending) + C (consumer spending) + G (government spending) + E (net exports or exports- imports) = GNP (Gross National Product). Reducing government spending their way will reduce the incomes of many people dependent upon the government and, therefore, probably cause a reduction in consumer spending. Moreover, it is delusional, in my judgment, to believe that reducing government spending will cause an explosive increase in business confidence and spending to counterbalance the reduction in the former. Many corporations already have huge stashes of cash that they are not spending because consumer spending is weak. Consumer spending is weak because of high unemployment, general economic anxiety and reduced consumer wealth associated with declines in home values. In short, reducing government spending the way the Republicans want to do it will worsen our stalling recovery.[4]

Moreover, the Republicans’ call focuses on the smaller slice of the federal budget devoted to improving our deteriorating infrastructure and maintaining the frayed social safety net for our citizens. We the People should be able to see these adverse developments with our own eyes. And those who know something about what is happening in the rest of the world know that the U.S. is falling behind many other countries on many facets of a healthful society.[5]

No one, to my knowledge, is discussing the most important issue, in my opinion, that is raised by the huge and mounting U.S. national debt that needs to be addressed. What is a new U.S. national security strategy that protects the vital interests of our country while vastly reducing the size and global span of the U.S. military? Is the U.S. now in the position of earlier empires whose foreign expenditures to maintain their empires dragged down those regimes?

We the People and all of our elected representatives need to recover the spirit of moderation.

Learned Hand

This spirit, said Learned Hand, “is the temper which does not press a partisan advantage to the bitter end, which can understand and will respect the other side, which feels a unity between all citizens–real and not the factitious product of propaganda–which recognizes their common fate and their common aspirations–in a word, which has faith in the sacredness of the individual. . . . [Such a spirit and faith] are the last flowers of civilization, delicate and easily overrun by the weeds of our sinful human nature. . . . They are the fruit of the wisdom that comes of trial and a pure heart; no one can possess them who has not stood in awe before the spectacle of this mysterious Universe; no one can possess them whom that spectacle has not purged through pity and through fear–pity for the pride and folly which inexorably enmesh men in toils of their own contriving; fear, because that same pride and that same folly lie deep in the recesses of his own soul.”[6]


[1] E.g., Kane, Pawlenty: If debt ceiling not raised, pay “outsie creditors” first, (July 15, 2011), http://www.rawstory.com.

[2] E.g., Bachmann, No Debt Ceiling Increase, http://www.michelebachmann.com; Drum, Bachmann and the Debt Ceiling, (July 20, 2011), www. motherjones.com.

[3] E.g., Stein, McConnell Debt Ceiling Strategy: “I refuse To Help Obama Reelection,” Huffington Post (July 13, 2011).

[4] E.g., Krugman, The Lesser Depression, N.Y. Times (July 21, 2011).

[5] E.g., Thomas Friedman, Still Digging (Dec. 7, 2010).

[6]  Learned Hand, The Spirit of Liberty at 164-65 (3d ed.; Phoenix ed.; Chicago: Univ. Chicago Press 1977).

Blogging in Havana

 

The blog from Havana– “Generation Y”[1]— is Yoani Sanchez’s courageous effort to let the world know about the daily life      and frustrations of ordinary Cubans.

She provides sketches of daily life in Cuba–“a dreary, enervating routine of food shortages, transportation troubles and          narrowed opportunity.”[2] Other major themes are the need for political and economic changes in Cuba and the Cuban          regime’s efforts to stifle her criticisms of the government.

 

A collection of her blog posts from 2007 through 2010 has been published as Havana Real.[3] Two of them prompt comments based upon my three church mission trips to Cuba since 2001.

Most Cubans struggle to survive. Those who have jobs generally make around $20 to $30 per month. They still have rationed basic food essentials at subsidized low prices, but as the blog emphasizes, many of these rationed essentials are very small quantities and are not really always available, and the government recently has talked about ending or reducing these pitifully limited rations. One day, Yoani’s mother called her to report that there was toilet paper available at a distant market, but that Yoani needed to hurry to get there because the “tp” would soon be gone.[4] On my last trip to visit our partner Presbyterian church in the city of Matanzas, its pastor told us that he was not able to buy any “tp” for our visit and stay in the church’s dormitory. He, therefore, asked the members of the congregation to give the church any extra “tp.”

Not surprisingly Yoani has negative reactions to Cuban political speeches that talk about the Cuban Revolution’s being “eternal.” She says she avoids using words like “eternal,” “always” and “never.” The word “eternal”, she says, means something that “lasts into the future ad infinitum,” but also something that “has no beginning.” There is little, if anything, that meets those requirements. She concludes with these words of wisdom, “It’s a relief that all the things in this world’s days are numbered.”[5]

In addition to her own blogging, she helps organize and present workshops in Cuba on creating blogs on “wordpress.com.”

Yoani has won many international awards for her blogging: one of the 100 Most Influential People in the World and Best Blog (Time Magazine), Ortega y Gasset Prize for digital journalism (Spain), one of the 100 Most Notable Hispanic Americans (El Pais Spanish newspaper), World Press Freedom Hero award (International Press Institute) and Young Global Leader (World Economic Forum).[6]

“Generation Y” honors those people like Yoani whose have names containing the Greek Y letter, so unusual in Spanish, but relatively common in Cuba in the 1970’s and 1980’s when Cuba was under Russian or Soviet influence.


[1] http://www.desdecuba.com/generationy/. The blog also has links to other Cuban blogs in English and in Spanish as well as her articles and interviews.

[2] Rohter, In Cuba, the Voice of a Blog Generation, N.Y. Times (July 5, 2011).

[3] Sanchez, Havana Real (Brooklyn: Melville House 2011).

[4]  Id. at 361-63.

[5]  Id. at 31-33.

[6]  Id. at 2.

Refugee and Asylum Law: Office of the United Nations High Commissioner for Refugees

 
In the modern era, the principal U.N. agency responsible for refugees is the Office of the United Nations High Commissioner for Refugees (UNHCR) in Geneva, Switzerland.[1]

The UNHCR was established by U.N. General Assembly Resolution 28(v), December 14, 1950 (after the Universal Declaration of Human Rights, but before the signing of Convention Relating to Status of Refugees). This Resolution adopted the Statute for the UNHCR that charges the agency with “providing international protection . . . to refugees . . . and . . . seeking permanent solutions for the problem of refugees by assisting Governments and . . . private organizations to facilitate         the voluntary repatriation of such refugees, or their assimilation within new national communities.” The Statute also contained a definition of “refugee” that was similar to the one set forth in the subsequent Convention Relating to the Status of Refugees. This definition states a “refugee” is

  • “Any person who, as a result of events occurring before 1 January 1951 and owing to well-founded fear of being persecuted for reasons of race, religion, nationality or political opinion, is outside the country of his nationality and is unable or, owing to such fear or for reason other than personal convenience, is unwilling to avail himself of the protection of that country . . . .”

To fulfill this mandate UNHCR “strives to ensure that everyone can exercise the right to seek asylum and find safe refuge in another State, and to return home voluntarily. By assisting refugees to return to their own country or to settle permanently in another country, UNHCR also seeks lasting solutions to their plight.” It also publishes a handbook on procedures and criteria for determining refugee status and guidelines on common issues that have arisen in such determinations.[2]

The UNHCR now is concerned with refugees, 80% of whom are in poorer, developing countries,  and certain other individuals in the world. As of January 2010, it was concerned with the welfare of the following people:

Category Number
Refugees 10,397,000
Asylum seekers      983,000
Returned refugees      251,000
Internally Displaced People 15,628,000
Returned IDPs   2,230,000
Stateless persons   6,560,000
Other       412,000
TOTAL  36,460,000

 


[1] This post is based upon the UNHCR website: http://www.unhcr.org/cgi-bin/texis/vtx/home.

[2]  One example of these publications is UNHCR Guidelines on International Protection No. 1: “Gender-Related Persecution,”  (May 7, 2002), http://www.unhcr.org/3d58ddef4.html.

 

Alien Tort Statute: Important Cases Heading to U.S. Supreme Court

On July 8, 2011, the U.S. Court of Appeals for the District of Columbia Circuit decided an important case under the Alien Tort Statute (ATS) that is headed for the U.S. Supreme Court.

In Doe v. Exxon Mobil Corp., the D.C. Circuit held, 2 to 1, that corporations may be held liable for aiding and abetting human rights violations under the ATS. The plaintiffs were Indonesian villagers who accused Exxon Mobil of aiding and abetting murder, torture and rape by Indonesian soldiers acting under the corporation’s direction to protect its natural-gas operations in that country.[1]

Late last year the U.S. Court of Appeals for the Second Circuit in New York City reached the opposite conclusion, 2 to 1, in Kiobel v. Royal Dutch Petroleum Co., another ATS case, this one by Nigerians against Royal Dutch Petroleum Co. for alleged complicity in crimes against humanity.[2]

In Kiobel, the plaintiffs already have asked the U.S. Supreme Court for review of that case,[3] and it is likely that Exxon Mobil will do as well in the other case. Since an important factor in the Supreme Court’s decision to grant such review (granting the writ of certiorari) is a split in decisions by the courts of appeal on important issues of federal law,[4] the Court, in my opinion, is highly likely to grant such review in both cases and to consider them on the merits next Term (October 2011-September 2012).

The ATS provides that the U.S. district courts have “original jurisdiction of any civil action by an alien [non-U.S. citizen] for a tort only, committed in violation of the law of nations or a treaty of the United States.”[5]

In future posts, I will review (a) the adoption of the ATS in 1789 and its use through 1979; (b) the interpretation of the ATS by the Supreme Court in 2004; (c) the use of the ATS by the lower federal courts since 1980; (d) the issue of aiding and abetting in ATS cases; and (e) the issue of corporate liability in ATS cases.


[1] Doe v. Exxon Mobil Corp., No. 09-7125 (D.C. Cir. July 8, 2011), http://www.cadc.uscourts.gov/internet/opinions.nsf; Reuters, Exxon to Face Lawsuit Over Rights Violations in Indonesia, N.Y. Times (July 8, 2011); Kendall, Exxon Hit by Reversal in Human-Rights Case, W.S.J. (July 9, 2011).

[2]  Kiobel v. Royal Dutch Pet. Co., 621 F.3d 111 (2d Cir. 2010), pet. for reh’g denied, 642 F.3d 268 (2d Cir. 2011), pet. for reh’g en banc denied, 642 F.3d 379 (2d Cir. 2011), pet. for cert. filed (No. 10-1491 June 6, 2011).

[3]  Id.

[4]  U.S. Sup. Ct. Rule 10 (a): “A petition for a writ of certiorari will be granted only for compelling  reasons.  The  following,  although  neither controlling  nor fully measuring  the Court’s discretion,  indicate  the  character of the  reasons  the  Court  considers: (a) a United States court of appeals has entered a decision  in  conflict  with  the  decision  of  another  United States  court  of  appeals  on  the  same  important matter. . . .”

[5] 28 U.S.C. § 1350.