Federal

It is helpful for business people to understand, generally, the concept of personal jurisdiction in terms of where a business can and cannot be sued, and to distinguish between the two types of personal jurisdiction: general and specific. General jurisdiction allows a court to hear any claim against a defendant. Specific jurisdiction applies only to claims arising out of the defendant’s forum contacts.

Following is our brief discussion of the recent personal jurisdiction cases from the United States Supreme Court. Our discussion of recent Illinois personal jurisdiction cases is here

BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549 (2017) is a majority decision joined by eight justices. Tyrrell reinforced earlier decisions of the Supreme Court that general jurisdiction is improper over a corporation outside its state of incorporation or principal place of business. In Tyrell, the Supreme Court decided that Montana courts lacked personal jurisdiction over a railroad that was neither incorporated in Montana nor had its principal place of business in Montana, notwithstanding 2,000 miles of track and 2,000 employees in Montana. Railroad employees who neither lived or were injured in Montana made claims in Montana against the railroad, under the Federal Employers’ Liability Act (FELA). Tyrell reversed the Montana Supreme Court, which had found a proper exercise of personal jurisdiction under FELA. The Court distinguished the FELA provision as one regarding venue (where to sue) and subject matter jurisdiction (what kind of case a court can here), not personal jurisdiction (over whom does a court have power), and emphasized the central holding in the Court’s earlier decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (below): general jurisdiction is improper over a corporation outside its state of incorporation or principal place of business.

In Bristol-Myers Squibb v. Superior Court of California, San Francisco Co., 137 S. Ct. 1773 (2017), the Supreme Court emphasized in a mass tort case the connection between the plaintiff’s claim and the forum, not the defendant’s contacts with the forum. The Court clarified that its long-standing specific jurisdiction principles apply to nonresident plaintiffs whose claims have been joined with claims of in-state plaintiffs. Courts cannot assert jurisdiction over nonresident plaintiffs’ claims unless each such plaintiff can establish a connection between the nonresident defendant’s conduct in the forum and their own specific claims.

In Walden v. Fiore, 571 U.S. 277 (2014), the Supreme Court unanimously decided that a Nevada US District Court could not exercise personal jurisdiction over a Georgia police officer for confiscating cash carried by two Nevada residents before they returned to Las Vegas. The Ninth Circuit had affirmed exercise of personal jurisdiction, because the plaintiffs had alleged the Georgia police officer “expressly aimed” conduct at Nevada residents. The Supreme Court reversed the Ninth Circuit, ruling that a standard focused on the plaintiff’s forum connections rather than the defendant conduct in the forum was incompatible with the Court’s prior rulings on specific jurisdiction. Walden emphasized that to exercise personal jurisdiction over an individual defendant, his or her contacts must be with the forum itself, not simply with forum resident.

In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the Supreme Court addressed whether, under a general jurisdiction theory, foreign nationals could sue the Mercedes Benz foreign parent corporation (headquartered in Germany) in the US District Court in California, because Mercedes’ U.S. subsidiary was headquartered in California. Based on federal due process, the Court held that a proper exercise of general jurisdiction required that the defendant foreign corporation’s forum contacts must be so continuous and systematic that the forum State is essentially the foreign corporation’s home. This decision effectively restricts general jurisdiction over corporations to those that are incorporated or have their principal place of business in the forum. Daimler requires trial courts to consider the entirely of a corporation’s contacts with the forum, noting that not all or any one place in which a foreign corporation operates can be deemed its home.

In Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011), the Supreme Court unanimously clarified that a stream-of-commerce theory is no basis for a state court’s exercise of general jurisdiction. In Goodyear, the plaintiff sought to invoke the general jurisdiction of the North Carolina state court (its domicile), when – on a stream-of-commerce theory – it sued foreign subsidiaries of an Ohio parent corporation for a fatal automobile accident which had occurred in Paris. The Court held that under the Due Process Clause of the Fourteenth Amendment, the North Carolina court lacked personal jurisdiction over the corporate defendants located in Turkey, France, and Luxembourg. The Court criticized the North Carolina court for failing to distinguish between specific and general jurisdiction.

J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011), like Goodyear, is a stream-of-commerce case. Unlike the unanimous Goodyear decision, Nicastro is a divided plurality decision, in which the Supreme Court decided that specific jurisdiction could extend to a foreign manufacturer when an independent distributor sells its products within the forum, but only if the “conduct purposefully directed” the manufacturer’s products at the forum. In Nicastro, only four products of the foreign manufacturer had reached New Jersey. The Court’s main focus was the defendant’s lack of intent to invoke the benefits or protections of New Jersey law. In dissent, Justice Ginsburg suggested that reason and fairness supported the exercise of specific jurisdiction because the defendant had made a conscious decision to distribute products in the United States.

The lawyers at Lubin Austermuehle have over thirty-years of experience litigating personal jurisdiction claims for our business and individual clients. We carefully review personal jurisdiction issues before bringing suit for our clients and if our clients are haled into Illinois courts when there is no jurisdiction, we have achieved dismissal of the claims against them. Conveniently located in Chicago and Elmhurst, Illinois, we have successfully litigated personal jurisdiction issues in federal and state courts all over the Chicago area. To schedule a consultation with one of our skilled attorneys, you can contact us online or give us a call at 630-333-0333.