The business of personal jurisdiction.

Author:Robertson, Cassandra Burke
Position:Symposium: Business in the Roberts Court
 
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CONTENTS INTRODUCTION I. THE ROBERTS COURT'S APPROACH TO PERSONAL JURISDICTION. A. The New Equilibrium of Personal Jurisdiction B. The Business Impact of the New Equilibrium II. THE ROBERTS COURT'S GUIDING PRINCIPLES A. Limitations on Transnational Litigation B. A Commitment to Formalism and Territorial Boundaries C. Predicting the Court's Approach to Unresolved Issues III. THE UPCOMING CHALLENGE: JURISDICTIONAL DISCOVERY A. The New Scope of Discovery B. The Existing Approaches to Jurisdictional Discovery C. The New Jurisdictional Discovery Equilibrium CONCLUSION INTRODUCTION

Perhaps the most notable aspect of the Roberts Court's approach to personal jurisdiction is that it has an approach at all. For nearly twenty-five years, the Supreme Court declined to hear any personal jurisdiction cases. (1) Nonetheless, personal jurisdiction issues continued to be litigated. As a result, personal jurisdiction doctrine developed in the circuit courts of appeals and in the state supreme courts, and these courts developed a relatively coherent body of law, albeit with circuit splits on some significant issues. (2) After decades of avoiding personal jurisdiction cases, the Supreme Court issued four opinions addressing the law of personal jurisdiction within three years. (3) These opinions significantly changed the shape of personal jurisdiction doctrine, leading to a rebalancing of the jurisdictional equilibrium--a balance whose center is still not fully known, as courts struggle to fit cases into the new framework set out by the Supreme Court. (4)

In this Article, we analyze how the Roberts Court's approach to personal jurisdiction affects business and commercial interests. First, we explain how the Roberts Court reshaped the doctrine of personal jurisdiction, narrowing jurisdictional bases in some areas while leaving other issues open for future litigation and ultimately crafting a new equilibrium in jurisdictional doctrine. Next, we examine the guiding principles underlying the Court's personal jurisdiction cases. We find little evidence that the Court was motivated by a desire to favor business interests--the Court failed to resolve the major question that the business lobby wanted answered, and it increased litigation costs by leaving open new avenues for jurisdictional challenges. Instead, it appears that the Court was driven more by a commitment to formalist evaluation of individual cases and a generalized resistance to allowing United States courts to serve as a magnet forum for transnational litigation.

We then evaluate the likely progression of the Court's further jurisdictional jurisprudence in light of these underlying commitments. Wre conclude that although it is difficult to predict exactly how the Court will rule in the currently pending issues involving the "relatedness" prong and in the "consent by registration" cases, it is clear that future cases will rely heavily on factual development to determine the scope, type, duration, and effect of the defendant's in-forum contacts. In Part III, we then turn to the challenges of jurisdictional discovery created by the increased need for factual development, analyzing how the Roberts Court's recent changes to the discovery rules are likely to play out in the jurisdictional context. Although the discovery rules were recently amended in an attempt to reduce costs and promote efficiency, courts and rulemakers alike will need to give additional attention to jurisdictional discovery; until they do so, businesses and other litigants are likely to continue to face jurisdictional uncertainty.

  1. THE ROBERTS COURT'S APPROACH TO PERSONAL JURISDICTION

    After decades of Supreme Court neglect, the Roberts Court issued four personal jurisdiction cases in a period spanning less than four years. (5) Each of these cases narrowed personal jurisdiction doctrine, holding that, the defendant in each case could not constitutionally be subject to involuntary personal jurisdiction in the state where it was sued. The decisions were, in effect, defendant-friendly: in each of the cases, the defendant had objected to being haled into the plaintiff's choice of forum, and in each case the Court ultimately ruled that the defendant could not be sued there.(6) Thus, to the extent that business interests are often viewed as largely synonymous with defendants' interests, the decisions may be considered to be protective of business interests as a whole. (7) As with the larger theme of Professor Jonathan Adler's conclusion in Business and the Roberts Court, however, the jurisprudential story is more complicated. (8)

    1. The New Equilibrium of Personal Jurisdiction

      The Supreme Court had long distinguished between two types of personal jurisdiction. General, or dispute-blind jurisdiction, allowed a court to exercise jurisdiction against a particular defendant for any claim, regardless of where it arose or whether it had any connection to the forum. (9) Specific jurisdiction, on the other hand, allowed a court to exercise jurisdiction over a defendant only for cases sufficiently related to the judicial forum. (10) The paradigm case for general jurisdiction was Perkins v. Benguet Consolidated Mining Co. (11) The paradigm case for specific jurisdiction was International Shoe Co. v. Washington. (12)

      Between these poles, however, there was much room for debate. What kind of contacts, short of the corporation-directing activity present in Perkins, would suffice to allow dispute-blind jurisdiction? (13) How should the "minimum contacts" and "fairness" factors be weighed to determine whether specific jurisdiction would be appropriate? (14)

      For decades, these questions were addressed by state supreme courts and federal circuit courts of appeals, which developed their own doctrinal formulations. (15) Before the Roberts Court decided the new personal jurisdiction cases, first-year law students across the nation learned the approach developed in these courts. (16) This approach held that general jurisdiction was appropriate when a defendant's in-state contacts were continuous, systematic, and substantial (thus allowing Wal-Mart, for example, to be subject to dispute-blind jurisdiction in all fifty states), but that specific jurisdiction under the International Shoe framework required a fairly tight nexus between the defendant's instate contacts and the plaintiff's cause of action. (17) Although there were some areas of disagreement between the circuits, this equilibrium functioned fairly stably for decades. (18)

      In 2011, the Court decided the first two cases: J. McIntyre Machinery, Ltd. v. Nicastro (19) and Goodyear Dunlop Tires Operations, S.A. v. Brown. (20) Both cases arose out of transnational commerce, were decided on the same day, and appeared to make relatively minor clarifications in personal jurisdiction doctrine. In Nicastro, the Court was asked to decide whether a New Jersey court could exercise specific jurisdiction over J. McIntyre Machinery, an English manufacturer; the record did not indicate that more than a handful of its machines had been sold through its U.S. distributor to New Jersey customers, but plaintiffs argued that McIntyre had sufficiently "targeted" the forum by marketing its products throughout the United States, including New Jersey. (21) A divided Court concluded that such generalized and indirect targeting was insufficient to support jurisdiction, at least in the absence of regular forum sales. (22) In Goodyear, the Court was asked to decide whether a North Carolina court could exercise general jurisdiction over a Turkish subsidiary of the Goodyear Corporation, when the tires manufactured by the Turkish subsidiary allegedly caused an accident involving children from North Carolina in France. (23) Again, the Court held that such jurisdiction was improper, writing that the subsidiary's "attenuated connections to the State ... fall far short of ... 'the continuous and systematic general business contacts' necessary to empower North Carolina to entertain suit against them on claims unrelated to anything that connects them to the State." (24) Instead, the Court said, general jurisdiction was appropriate only when those contacts were so extensive that the defendant was "essentially at home" in the forum. (25)

      In the 2013-14 term, the Court again returned to the subject of personal jurisdiction, deciding two additional cases. One of those was Walden v. Fiore, (26) which further refined the type of "targeting" necessary for specific jurisdiction; it held that the defendant's mere awareness that the plaintiff will feel the effects of the defendant's conduct in a particular forum is insufficient to amount to targeting that forum for jurisdictional purposes. (27) This might have been viewed as a relatively significant decision, (28) but it was overshadowed by the Court's other personal jurisdiction case of the term, Daimler AG v. Bauman. (29)

      Daimler utterly upended the structure of personal jurisdiction. (30) It involved another transnational case, this time brought by Argentinian plaintiffs suing over the actions of Mercedes-Benz during the Argentinian "Dirty War." (31) The plaintiffs sought to proceed against the German parent company, DaimlerChrysler Aktiengesellschaft, relying on the extensive California contacts of its American subsidiary. (32) The Court held that the "continuous and systematic general business contacts" test applied by the circuit courts for general jurisdiction was the wrong test. (33) Instead, the Court maintained, the relevant analysis was the one alluded to--but not expanded upon--in Goodyear, was the defendant "at home" in the forum? (34) The Court explained that in all except the most unusual circumstances, a defendant would be at home in no more than two jurisdictions: the state of incorporation and the state in which the corporation maintained its principal place of business. (35) Since Daimler was a German company with a principal place of business...

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