The Dormant Commerce Clause As a Limit on Personal Jurisdiction

Author:John F. Preis
Position:Professor of Law, University of Richmond School of Law
Pages:121-164
SUMMARY

For over 70 years, the Due Process Clause has defined the law of personal jurisdiction. This makes sense, because being forced to stand trial in a far-off state will sometimes be fundamentally unfair. What does not make sense, however, is the Dormant Commerce Clause's apparent irrelevance to personal jurisdiction. The Dormant Commerce Clause addresses state laws affecting interstate commerce, and ... (see full summary)

 
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121
The Dormant Commerce Clause As a
Limit on Personal Jurisdiction
John F. Preis
ABSTRACT: For over 70 years, the Due Process Clause has defin ed the law of
personal jurisdiction. This makes sense, because being forced to stand trial in a
far-off state will sometimes be fundamentally unfair. What does not make sens e,
however, is the Dormant Commerce Clause’s apparent irrelevance to personal
jurisdiction. The Dormant Commerce Clause addresses state laws affecting
interstate commerce, and a plaintiff’s choice of forum is often a commer cially
driven choice between different state courts. So why isn’t the Dormant Commerce
Clause part of personal jurisdiction doctrine?
This Article makes the case for its relevance, and demonstrates how the Dorman t
Commerce Clause can resolve a new and vexing personal juri sdiction issue. Since
the Supreme Court’s 2014 decision in Daimler AG v. Bauman—a personal
jurisdiction case that significantly curtailed options for forum shoppers—
plaintiffs across the country have been attempting to establish ju risdiction using
a company’s registration to do business in a state, even when the suit has nothing
to do with the company’s business there. Focusing solely on the Due Process Clause,
courts across the country have split on the issue. The Dormant Commerce C lause,
however, presents a clear answer.
This Article offers the first comprehensive analysis of how the Dormant Commerce
Clause impacts personal jurisdiction. It argues that jurisdiction based on a
company’s registration to do business violates the Dormant Commerce Clause—
but only in cases where the lawsuit has no connection to the forum. It also
demonstrates how personal jurisdiction comports with the Dormant Commerce
Clause in most situations deemed constitutional under the Due Process C lause.
In certain general jurisdiction cases (to the extent any remain after Daimler) and
transient jurisdiction cases, however, this Article argues that the Dormant
Commerce Clause renders personal jurisdiction unconstitutional.
Professor of Law, University of Richmond Scho ol of Law. Special thanks to Kevin
Clermont, Brannon Denning, Jessica Erickson, Andrew McGowan, Tanya Monestier, Wendy
Perdue, Greg Reilly, Rocky Rhodes, Andra Robertson, Shawn Shaunessey and Glen Staszewski.
This Article was generously supported by the Hunton & Williams Summer Research Fellowship
Program.
122 IOWA LAW REVIEW [Vol. 102:121
I. INTRODUCTION ............................................................................. 123
II. PERSONAL JURISDICTION AND THE NEW DEBATE OVER
JURISDICTION-VIA-REGISTRATION ................................................. 126
A. PERSONAL JURISDICTION, BEFORE AND AFTER DAIMLER ........... 126
B. THE NEW FRONTIER OF JURISDICTION-VIA-REGISTRATION ......... 129
1. Arguing Consent After Daimler ..................................... 129
2. Judicial and Scholarly Assessments .............................. 130
3. A Role for the Dormant Commerce Clause? .............. 132
III. JURISDICTION-VIA-REGISTRATION AND THE DORMANT COMMERCE
CLAUSE ......................................................................................... 133
A. PERSONAL JURISDICTION AS UNCONSTITUTIONAL
DISCRIMINATION ..................................................................... 134
1. What is Unconstitutional Discrimination? .................. 134
2. Jurisdiction-via-Registration Is Unconstitutionally
Discriminatory ............................................................... 138
B. PERSONAL JURISDICTION AS UNCONSTITUTIONALLY
BURDENSOME .......................................................................... 144
1. What is an Unconstitutional Burden? ......................... 144
2. Jurisdiction-via-Registration Is Unconstitutionally
Burdensome .................................................................. 147
i. Burden: Choice-of-Law Rules ..................................... 148
ii. Burden: Local Practice ............................................... 150
iii. Benefit: Providing a Forum for Residents or Persons
Injured in the State .................................................... 153
iv. The Balance of Burdens and Benefits ......................... 154
IV. THE DORMANT COMMERCE CLAUSE APPLIED TO OTHER BASES
FOR PERSONAL JURISDICTION ....................................................... 154
A. CONSTITUTIONAL .................................................................... 154
1. Domicile ......................................................................... 155
2. Consent via Contract or Waiver ................................... 155
3. Specific Jurisdiction ...................................................... 156
B. UNCONSTITUTIONAL ............................................................... 157
1. General Jurisdiction ...................................................... 157
2. Transient Jurisdiction ................................................... 159
V. CONCLUSION ................................................................................ 163
2016] THE DORMANT COMMERCE CLAUSE 123
I. INTRODUCTION
Have you ever been to a “judicial hellhole?”1 It is a place where judges
hate summary judgment, and juries love to give money to old ladies burned
by hot coffee. Or at least that is what the defense bar will tell you. The
plaintiffs’ bar will tell you that these dens of iniquity are actually safe havens—
places where the little guy can fight a big corporation that forgot to put a
safety shield in front of a spinning blade. Whether hellhole or haven, there is
one issue that both sides can agree on: forum matters.
Because forum matters, plaintiffs understandably search for the most
advantageous forum in which to bring their suit. A major factor in forum
selection is the law of personal jurisdiction, a body of law based in large part
on the Fourteenth Amendment’s Due Process Clause.2 The Due Process
Clause means many things, but at a minimum, it guarantees litigants the
freedom from random or irregular adjudication.3 In the context of personal
jurisdiction, this means that defendants may not be hauled into court in a far-
off state simply because a plaintiff has chosen to sue them there. In the
Supreme Court’s opinion, a judicial system in which a plaintiff has unfettered
discretion to file suit in dozens of different states, many of them thousands of
miles away, is not an orderly system of law.4
Even though the Due Process Clause is an essential component of
personal jurisdiction law, it is odd that it seems to be the only component. To
the extent that a state’s personal jurisdiction law discourages companies from
doing business in a state (and thus subjecting themselves to jurisdiction
there), the Dormant Commerce Clause—which renders unconstitutional
state laws that discourage outsiders from engaging in commerce in a
particular state—should have much to say about personal jurisdiction.
Indeed, in the first part of the 20th century, courts routinely applied the
Dormant Commerce Clause to limit state assertions of personal jurisdiction.5
After standing in the background for so long, it is high time for the
Dormant Commerce Clause to step forward. In recent years, the Supreme
1. For a list of the leading “hellholes,” see JUDICIAL HELLHOLES, http://www.judicialhell
holes.org (last visited September 16, 2016).
2. U.S. CONST. amend. XIV.
3. See Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (holding that a court’s
assertion of authority over a party must comport with “traditional notions of fair play and
substantial justice” (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940))).
4. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (explaining that
the Due Process Clause “gives a degree of predictability to the legal system that allows potential
defendants to structure their primary conduct with some minimum assurance as to where that
conduct will and will not render them liable to suit”).
5. See, e.g., Denver & Rio Grande W. R.R. Co. v. Terte, 284 U.S. 284, 287 (1932); Michigan
Cent. R.R. Co. v. Mix, 278 U.S. 492, 495 (1929); Davis v. Farmers’ Co-Op. Equity Co., 262 U.S. 312,
315 (1923); Panstwowe Zaklady Graviozne v. Auto. Ins. Co., 36 F.2d 504, 506 (S.D.N.Y. 1928).

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