National Personal Jurisdiction

• Publication year: 2019

National Personal Jurisdiction

Jonathan Remy Nash

Emory University School of Law

NATIONAL PERSONAL JURISDICTION

Jonathan Remy Nash^*

Abstract

Personal jurisdiction has always constrained plaintiffs' access to courts. Recent Supreme Court decisions impose even more severe limits, especially in suits against nonresident foreign corporations. These limitations are magnified by the standard understanding that the relevant forum for purposes of the personal jurisdiction calculus is the state. The Court's Fourteenth Amendment jurisprudence relies on the state as the relevant forum, and the Federal Rules of Civil Procedure in the typical case direct a federal court to apply the same test as would a court of the state in which it sits.

This Article takes on the challenge of exploring the possibility of expanding the use of national personal jurisdiction, and thus revitalizing plaintiffs' access to courts. In so doing, it undertakes three distinct tasks. First, it argues that there is no Fifth Amendment Due Process Clause barrier to national personal jurisdiction. Second, it considers the viability of national personal jurisdiction as to various categories of claims, brought in federal court and state court. It argues that Congress has the power to introduce national personal jurisdiction as to all claims brought in the federal courts, but that Congress lacks authority to introduce national personal jurisdiction as to any claims brought in the state courts. However, Congress could open the federal courthouse doors wider to claims where national personal jurisdiction is deemed appropriate. Third, this Article considers what steps Congress is free to utilize to implement national personal jurisdiction. While two steps are obvious-Congress can enact statutory authority and can convey authority to a delegate-this Article focuses on a more controversial path to national personal jurisdiction: the common law. It argues that, while federal courts may enjoy interstitial common law powers in this area, they likely do not have broad powers to generate new instances of national personal jurisdiction.

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Introduction.............................................................................................511

I. Fourteenth Amendment Limits on Personal Jurisdiction.....517

A. The Limits of the Fourteenth Amendment's Due Process Clause....................................................................................... 519

1. General Jurisdiction........................................................... 519
2. Specific Jurisdiction ........................................................... 520

B. The Fourteenth Amendment and Federal Court Litigation ...... 521

II. The Fifth Amendment's Due Process Clause and Personal Jurisdiction.....................................................................................522

A. Minimum Contacts.................................................................... 523
B. Concerns of Fairness................................................................ 530

III. In What Courts, and Kinds of Causes of Action, May Courts Apply National Personal Jurisdiction? ...................................534

A. Federal Courts.......................................................................... 534

1. Causes of Action Under Federal Question Jurisdiction..... 535
2. Causes of Action Under Supplemental Jurisdiction ........... 536
3. Causes of Action Under Diversity Jurisdiction .................. 539

B. State Courts .............................................................................. 543

1. Federal Question Cases ..................................................... 544
2. Cases that Fall Within the Federal Diversity Jurisdiction . 548
3. Cases Brought Against Foreign Nonresident Defendants .. 549
4. The Option of Expanding Federal Court Original Jurisdiction ......................................................................... 555

IV. What Steps (if any) Must Congress Take to Effect National Personal Jurisdiction?.................................................................557

Conclusion.................................................................................................561

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Introduction

Personal jurisdiction has always constrained plaintiffs' access to courts; recent Supreme Court decisions impose even more severe limits, especially in suits against nonresident foreign corporations. Consider Robert Nicastro, a New Jersey man who lost several fingers using a machine manufactured by an English corporation, who tried to bring a tort claim against the corporation. The Court reasoned that, even though the corporation deliberately sought to send its products into the United States as a whole, it did not target New Jersey in particular as a destination for its products.¹ As a result, Nicastro could not (absent the corporation's consent) obtain specific personal jurisdiction-that is, jurisdiction where the cause of action arises out of the defendant's contacts with the forum² -over the corporation in a New Jersey court. Neither could Nicastro have obtained general personal jurisdiction-that is, jurisdiction where the cause of action is unrelated to the defendant's forum contacts³ -over the corporation, since New Jersey is neither its place of incorporation nor its principal place of business.⁴

These conclusions rest inexorably on the assumption that the relevant forum for purposes of the personal jurisdiction calculus is the state. Focusing on the forum state accords with the common understanding of the law of personal jurisdiction. Absent the defendant's consent or service of process while the defendant is physically present in the state, a state court may only exert personal jurisdiction over a defendant to the extent that the defendant has "minimum contacts" with the forum state and that assertion of personal jurisdiction is not manifestly unfair.⁵ The Supreme Court has attributed this limitation to the Due Process Clause of the Fourteenth Amendment (and perhaps also to international law incorporated by the Constitution⁶ ), variously describing it as a (i) a personal liberty interest enjoyed by defendants,⁷ and (ii) a recognition of the limits of state sovereignty beyond the state's borders.⁸

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The requirement that a defendant must have minimum contacts with the forum state is not limited to state courts. Rule 4(k)(1) of the Federal Rules of Civil Procedure establishes the general rule that a federal court, no less than a state court, cannot exert personal jurisdiction over a defendant unless the defendant has minimum contacts with the state in which the court sits.⁹ Rule 4(k)(2) provides for a limited exception: Where Congress provides for nationwide jurisdiction by statute, the Rule allows for nationwide service of process upon defendants.¹⁰ But Congress has enacted such provisions very sparsely.¹¹ In short, while Rule 4 generally constrains federal courts more than the Constitution demands, the prerequisite that a defendant have minimum contacts with the state in which the court sits applies in almost all cases pending in U.S. courts, both state and federal.

The notion that personal jurisdiction looks to contacts with the forum state magnifies the scope of the constraints the Court has imposed on personal jurisdiction in recent years. For many years, most courts and commentators believed that national corporations-i.e., domestic corporations that do business in every state (McDonald's, for example)-were subject to general jurisdiction in every state.¹² Over the last decade, the Court has instead made clear that a corporation is subject to general jurisdiction only where it is "at home," which the Court has translated to mean essentially only at its place of incorporation and its principal place of business.¹³ Yet, were contacts with the United States as a whole the proper standard, it is clear that general jurisdiction would be available throughout the country. The focus on contacts with a particular state thus emphasizes the Court's limits on general jurisdiction. One also might imagine (assuming that a corporation's principal place of business can depend on the location of the corporation's sales¹⁴ ) a foreign corporation for which the

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principal place of business is the entire United States, but for which the principal place of business is some other place once sales and employees are disaggregated on a state-by-state basis.

On the specific jurisdiction front, too, recent decisions highlight the importance of the relevant forum in the personal jurisdiction calculus. In J. McIntyre Machinery Ltd. v. Nicastro¹⁵ (the facts of which provided the basis for the opening paragraph), the Court held that New Jersey courts could not exercise jurisdiction over an English company accused of manufacturing a product that caused injury in the state, absent a showing that the company "engaged in conduct purposefully directed at New Jersey."¹⁶ It was not enough that the company "directed marketing and sales efforts at the United States" as a whole.¹⁷ Under this rubric, one can readily conceive of a foreign corporation sued for breach of contract, where the steps of contract formation took place in numerous states (but no two steps took place in any one state): Specific jurisdiction would likely be available were contacts with the country as a whole the proper measure, but likely unavailable using a state-by-state calculus. The Court also has rejected the notion that a court may relax the "specific jurisdiction" requirement that the defendant's contacts give rise to the claim against the defendant simply because the defendant has extensive forum contacts that are unrelated to the claim,¹⁸ which hinders plaintiffs' ability to bring nationwide mass actions.¹⁹ Once again, the state-centered focus of personal jurisdiction analysis magnifies the limiting effect of constraints on the courts' due process reach.²⁰ A national approach to...