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Simplicity And Clarity In The Administration And Enforcement Of Jurisdictional Rules

Simplicity And Clarity In The Administration And Enforcement Of Jurisdictional Rules

Jurisdictional rules are intended to be simple and thereby easy to administer and enforce. See Hertz Corp. v. Friend, 559 U.S. 77, 81, 94-95 (2010) (“[W]e place primary weight upon the need for judicial administration of a jurisdictional statute to remain as simple as possible. *** Simple jurisdictional rules also promote greater predictability. Predictability is valuable to corporations making business and investment decisions. . . . Predictability also benefits plaintiffs deciding whether to file suit in a state or federal court.”). This principle applies not only to federal statutes establishing subject matter jurisdiction but to those tests that address the extent to which any State or Federal court may exercise personal jurisdiction over an individual or a business corporation. See Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). Furthermore, even “in cases removed from state court to federal court, as in cases originating in federal court, there is no unyielding jurisdictional hierarchy,” and these principles calling for simplicity, clarity, and ease of judicial administration permit a federal court in the appropriate circumstance to give priority to resolution of the issue of personal jurisdiction over that of subject matter jurisdiction. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 578 (1999).

 Daimler AG v. Bauman, 134 S. Ct. 746 (2014)[1], is another example of the Supreme Court’s application of bringing clarity to the jurisdictional standards that apply to corporations. An extension of Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011), Daimler holds that, consistent with the Due Process Clause of the Fourteenth Amendment, a personal injury suit against a corporation may go forward in one of only three places – (1) the state in which the plaintiff’s alleged injury arose; (2) the state where the defendant is incorporated; or (3) the state of the principal place of business of the defendant.

Personal jurisdiction exists where the defendant’s alleged misconduct causes foreseeable injury to the plaintiff within the forum state. This is called specific jurisdiction. Personal jurisdiction may also be established by the forum’s authority to assert general jurisdiction over the activities of a corporation. Daimler significantly limited the reach of a forum state’s authority to exercise general jurisdiction over a defendant corporation, holding its “affiliations with the [forum] state [must be] so ‘continuous and systematic’ as to render [it] essentially at home in the forum state,” which is restricted without virtual exception to the corporation’s place of incorporation or its principal place of business. Daimler, 134 S. Ct. at 754, 760.

Each plaintiff named in a suit bears the burden of proof to show that the forum has the authority under the Due Process Clause to exercise specific or personal jurisdiction over that plaintiff’s claims brought against the defendant. Specific jurisdiction must also exist for each claim asserted by a plaintiff against a defendant. See 5B Wright & Miller, Fed. Prac. & Proc. Civ.3d § 1351, at n. 30 (‘[I]f separate claims are pled, specific personal jurisdiction must independently exist for each claim and the existence of personal jurisdiction for one claim will not provide the basis for another claim.’)); Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 275 (5th Cir. 2006); Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001); Phillips Exeter Academy v. Howard Phillips Fund, Inc., 196 F.3d 284, 289 (1st Cir. 1999); Morris v. Barkbuster, Inc., 923 F.2d 1277, 1281-82 (8th Cir. 1991). To hold otherwise would be to bootstrap jurisdiction over parties and claims and eliminate any meaningful specific jurisdiction inquiry, thereby violating the Federal due process rights of the defendant corporation. See Gatekeeper Inc. v. Stratech Systems, LTD., 718 F. Supp. 2d 664, 667 (E.D. Va. 2010) (“Yet, if specific personal jurisdiction over a defendant with respect to one cause of action were sufficient to allow a plaintiff to allege a series of other claims not arising from the defendant’s forum state contacts — an “ancillary” theory of specific jurisdiction, of sorts — then this important distinction between general and specific jurisdiction would be significantly attenuated, if not eviscerated.”).

All of these principles are important tools to keep in mind not only when deciding whether to answer or move to dismiss based on personal jurisdiction but in deciding whether to remove in those instances where a favorable decision dismissing a non-diverse plaintiff’s claims for lack of personal jurisdiction will result in the establishment of subject matter jurisdiction in federal court over the action. See Ruhrgas, supra.

John C. Henegan

HeneganJohn-cropped

[1] For more discussion of the Daimler opinion, read Phillip Sykes’s blog article.