Personal Jurisdiction, Process, and Venue in Antitrust and Business Tort Litigation

• Pages: 303-337

303

CHAPTER X

PERSONAL JURISDICTION, PROCESS,

AND VENUE IN ANTITRUST

AND BUSINESS TORT LITIGATION

Issues of per sonal jurisdiction and venue often arise in

antitrust and business tort litigation, par ticularly in the age of

the Inter net. Some federa l statutes – such a s the antitrust and

securities laws – provide for nationwide ser vice of process. In

cases involving parties from different states, the ability to effect

extraterr itorial service may weigh in favor of asserting such

federal cla ims. On the other hand, venue choices in state court

often are as varied, or more so, tha n those available in the

federal cour ts. This chapter sur veys how personal jur isdiction,

process, and venue may vary in antitrust and business tort

litigation; how these and other factor s impact choice of forum

is further addr essed in Chapter XI. – Eds.

A. Introduction

Assuming a court has subject matter jurisdiction, its power over a

defendant is a function of three related concepts: personal jurisdiction,

service of process, and venue. The rules governing these concepts may vary

depending upon the forum chosen and the substantive claims asserted.

In particular, the assertion of federal antitrust or other statutory

claims may significantly impact the plaintiff’s venue choices, as well as

the defendant’s transfer opportunities. This chapter addresses the

interplay of the constitutional and procedural rules determining a court’s

ability to assert and retain personal jurisdiction in antitrust and business

tort litigation. It also discusses the impact of using the Internet to effect

commerce on the analysis of jurisdiction and venue.

B. Personal Jurisdiction and Service of Process

1.

General Federal Due Process Constraints

The requirement that a court have personal jurisdiction over the

defendant in a federal question case stems from the Due Process Clause

of the Fifth Amendment.

1

The test for personal jurisdiction requires that

1

. Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456

U.S. 694, 702 (1982).

304 Business Torts and Unfair Competition Hand book

the defendant have “minimum contacts” with the forum and t hat

maintenance of the suit “not offend ‘traditional notions of fair play and

substantial justice.’”

2

When a federal court is asked to decide state-created rights under

diversity jurisdiction, the constitutional inquiry is guided by the same

Fourteenth Amendment standards applicable to state long-arm

jurisdiction. The critical question is whether the defendant has sufficient

minimum contacts with the forum state to permit the exercise of

jurisdiction over it.

3

A plaintiff may seek to establish “general

jurisdiction” over a defendant by showing that the defendant maintained

“continuous and systematic” contacts with the forum state.

4

Or a plaintiff

may seek to establish “specific jurisdiction” by showing that the

defendant purposely directed his activities at residents of the forum and

that the plaintiff’s claims arise out of or relate to those activities.

5

In federal question cases, there has been disagreement over whether

the federal courts are constrained by Fourteenth Amendment standards or

by the broader standards emanating from the Fifth Amendment, which

focus on the defendant’s aggregate contacts with the United States.

6

2

. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); see also

Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 112

(1987).

3

. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985).

4

. See Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 414-

15 (1984). T ransient jurisdiction, acquired by personally serving a

nonresident defendant while physically present in the forum state, is also

a constitutionally va lid method of asserting ge neral jurisdiction.

Burnham v. Superior Court of Cal., 495 U.S. 604, 628 (1990) (the Due

Process Clause of the Fourteenth Amendment does not prohibit state

courts from exercising jurisdiction over nonresident based on fact of in-

state service of process).

5

. See Burger King Corp., 471 U.S. at 472-73; Ha ll, 466 U.S. at 414 n.8.

6

. See, e.g., Cargill Inc. v. M/V Paschalis, 1987 WL 17950, at *1-2

(S.D.N.Y. 1987) (noting disagreement over use of nationwide contacts in

consideration of personal jurisdiction); Superior Coal Co. v. Ruhrkohle,

A.G., 83 F.R.D. 414, 418 -20 (E.D. Pa. 1979) (although Fifth Amendment

Due Process Clause permits aggregation of defendant’s contacts across

the nation, no federal statute authorizes district courts to ta ke nationwide

contacts into consideratio n; no personal jurisdiction where defendant

lacked adequate minimum contacts with forum state); see a lso Herbert

Hovenkamp, Per sonal Jurisdictio n a nd Venue in Pr ivate Antitrust

Actions in Federa l Court: A Policy Analysis, 67 IOWA L. REV. 485, 500–

01 (1982); see generally 4 CHARLES ALAN WRIGHT, ARTHUR R. MILLER,

Persona l Jurisdiction 305

Strict application of the minimum contacts doctrine in the federal courts

cannot always be reconciled with various federal statutes authorizing

nationwide service of process, such as section 12 of the Clayton Act.

7

The Supreme Court has not considered the constitutionality of this

national or aggregate contacts theory,

8

and federal circuit courts are split

over whether a national contacts analysis is sufficient when process is

served under a federal statute’s nationwide service of process provision.

9

Since 1993, personal jurisdiction in federal question cases is no

longer subject to the peculiarities of individual state long-arm statutes.

10

MARY K. KANE & RICHARD L. MARCUS, FEDERAL PRACTICE AND

PROCEDURE § 1067.1 (3d ed.) (discussing development of minimum

contacts doctrine).

7

. 15 U.S.C. § 22; see a lso 15 U.S.C. § 77(v) (the Securities Act), 15 U.S.C.

§ 78aa (the Securities Exchange Act), 15 U.S.C. § 49 (the Federal Trade

Commission Act); 18 U.S.C. § 1965 (the Racketeer Influenced and

Corrupt Organizations Act).

8

. Omni Capital Int’l v. Randolph Wolff & Co., 484 U.S. 97, 102 n.5 (1987)

(citing Asahi Metal Indus. Co. v. Superior Ct., 480 U.S. 102, 113 n.*

(1987).

9

. Compare In r e Automotive Refinishing Paint Antitrust Litig., 358 F.3d

288, 298 -99 (3rd Cir. 2004), Autoscribe Corp. v. Goldman & Steinberg,

1995 U.S. App. LEXIS 2848, at *7 (4th Cir. 1995) (citing Hogue v.

Milodon Engineering, 736 F.2 d 989, 991 (4th Cir. 1984), Busch v.

Buchman, Buchman & O’Brien Law Firm, 11 F.3d 1255 , 1258 (5th Cir.

1994), United Liberty Life Ins. Co. v. Ryan, 985 F.2d 1320, 1330 (6th

Cir. 1993), United Elec., Radio & Mach. Workers of Am. v. 163 Pleasant

St. Corp., 960 F.2d 1080, 1085 (1st Cir. 1992), Go-Video v. Akai Elec.

Co., 885 F.2d 1406, 1414-16 (9th Cir. 1989), Lisak v. Mercantile

Bancorp, Inc., 834 F.2d 668, 671-72 (7th Cir. 1 987), Hogue v. Milo don

Eng’g, 736 F.2d 989, 991 (4th Cir. 1984), and Republic of Panama v.

BCCI Holdings (Luxembourg), 119 F.3d 93 5, 942-49 (11th Cir. 1997)

(all holding that national contacts analysis is sufficient), with In re

Vitamins Antitrust Litig., 94 F. Supp. 2d 26, 29-31 (D.D.C. 2000), and

GTE Ne w Media Servs. v. BellSouth Corp., 199 F.3d 1343, 1350 (D.C.

Cir. 2000) (citing Goldlawr, Inc. v. Heiman, 288 F.2d 579, 581 (2d Cir.

1961), rev’d on other grounds, 369 U.S. 463 (1962)) (holding that a local

contacts inquiry is required); see discussion infra Parts E.1, E.2.

10

. Until 1993, in the absence of a federal statutory provision for service, a

federal court’s jurisdiction in federal question cases could be limited by

the forum state’s long-arm statute, not because of t he Due Process Clause

of the Fifth Amendment, but r ather by the incorporation of state law

governing service under Rule 4 of the Fed eral Rules of Ci vil Procedure.

Rule 4 required that extraterritorial service not authoriz ed by federal