Jurisdictional Nexus Requirement
The requirement of a nexus between the plaintiff's claim and the defendant's business activities in the forum jurisdiction has been stated in the disjunctive: the claim for relief must "result from alleged injuries that 'arise out of or relate to' those activities." Burger King, supra, 471 U.S. at 472 (quoting Helicopteros, supra, 466 U.S. at 414).
Thus, if the claim either arises out of or relates to the nonresident defendant's business activity, specific jurisdiction may be exercised. Earlier, in considering an insurance contract case, McGee, supra note 8, asserted: "It is sufficient for purposes of due process that the suit was based on a contract which had substantial connection with the forum State." 355 U.S. at 223.
Section 423 (b) states: "When jurisdiction over a person is based solely upon 13- 423, only a claim for relief arising from acts enumerated in this section may be asserted against him."
The words "claim for relief arising from" also appear in 13-423 (a)(1): "A District of Columbia Court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's (1) transacting any business in the District of Columbia" Supreme Court precedent and our case law have construed 13-423 (b)'s "arising from" requirement flexibly.
In Cohane and Berwyn we followed the "relate to" language. Cohane, supra, 385 A.2d at 158-59 (under 13-423 (b), "the claim must be related to acts in the District"); Berwyn, supra, 399 A.2d at 80 ("the claim must relate to the particular act or transaction forming the basis for personal jurisdiction").
In Lex Tex, supra, we fleetingly focused on the "arising out of" nexus language, rather than the words "relate to," in concluding that "one can hardly demand the right to come to the District of Columbia to pursue activities exclusively on behalf of an out-of-state principal and expect to be absolutely immune from suit here by that principal for causes of action arising directly out of the performance of such activities." 579 A.2d at 250. Most recently, in Trerotola, supra, we interpreted the nexus requirement of 13-423 (b) to mean only "that the claim raised must have a discernible relationship to the 'business' transacted in the District." 601 A.2d at 64.
We went on to explain that this "discernible relationship" is shown if "'certain minimum contacts' between the nonresident and the forum" exist. Id. (quoting World-Wide Volkswagen, supra, 444 U.S. at 291). These minimum contacts reflect "'conduct and connection with the forum state . . . such that the nonresident should reasonably anticipate being haled into court there.'" Id. (quoting World-Wide Volkswagen, supra, 444 U.S. at 297). Stated differently, 13-423 (b) bars only "claims 'unrelated to the acts forming the basis for personal jurisdiction.'" 601 A.2d at 63 (quoting Willis v. Willis, 211 U.S. App. D.C. 103, 106, 655 F.2d 1333, 1336 (1981).
Section 13- 423 (b) thus operates as a due process check on the reach or scope of the "transacting business" provision of the long-arm statute.
Other jurisdictions have wrestled with the nexus requirement of specific jurisdiction in a variety of factual settings and have reached diverse conclusions as to the appropriate test for determining the proper nexus between the nonresident defendant's business activity and the claim asserted by the plaintiff. the tests adopted range from narrow or strict causation-based tests to more flexible relatedness tests requiring the showing of some connection or relationship between the claim and the business activity.
Into the strict, causation-based category fall the substantive relevance and proximate cause tests. These tests have sometimes been described as one test: substantive relevance/proximate cause. the substantive relevance test has been explained as follows:
Under this test, for a cause of action to "arise from or relate to" a defendant's contacts with the forum state, the contacts must have substantive relevance to the cause of action. More plainly, the forum contacts must be necessary to the proof of the cause of action.
Mark M. Maloney, NOTE, Specific Personal Jurisdiction and the "Arise from or Relate To" Requirement . . . What Does It Mean?, 50 WASHINGTON AND LEE LAW REVIEW 1265, 1282 (1993);
see also, Lea Brilmayer, How Contacts Count: Due Process Limitations on State Court Jurisdiction, 1980 SUPREME CT. REV. 77. In Pizarro v. Hoteles Concorde Int'l, C.A., 907 F.2d 1256, 1259 (1st Cir. 1990), the First Circuit summarized and applied the proximate cause test to affirm a federal trial court's dismissal of a negligence action for lack of personal jurisdiction:
"Whether certain events 'arise out of' a nonresident defendant's actions within the forum jurisdiction is comparable or analogous to whether certain actions can be said to be the legal, or the proximate cause of injuries suffered by a plaintiff." See also Peckham v. Continental Casualty Ins. Co., 895 F.2d 830, 836 (1st Cir. 1990).
In a later case, Nowak v. Tak How Invs., Ltd., 94 F.3d 708, 716 (1st Cir. 1996), the First Circuit, desiring greater flexibility, deviated from its reliance on the proximate causation test, saying in part: "we intend to emphasize the importance of proximate causation, but to allow a slight loosening of that standard when circumstances dictate," and concluding in the wrongful death action that:
"While the nexus between the nonresident defendant's solicitation of . . . business in the forum jurisdiction and . . . the death of the plaintiff's wife, a Massachusetts' resident does not constitute a proximate cause relationship, it does represent a meaningful link between the nonresident defendant's contact with the forum jurisdiction and the harm suffered."
The court also stated, in language relevant to our case: "When a foreign corporation directly targets residents in an ongoing effort to further a business relationship, . . . the corporation's own conduct increases the likelihood that a specific resident will respond favorably." Id. at 715.
Other courts have rejected the substantive relevance/proximate cause test altogether. for example, in Vons Companies, Inc. v. Seabest Foods, Inc., 14 Cal. 4th 434, 926 P.2d 1085 (Cal. 1996), the court stated:
"A proximate cause test . . . is inconsistent with the fairness rationale underlying the specific jurisdiction doctrine. a person who purposefully avails himself or herself of the benefits of doing business in the forum state must be prepared to answer lawsuits that relate to his or her activity there." 926 P.2d at 1104 (referencing Burger King, supra, 471 U.S. at 472);
see also Mary Twitchell, the Myth of General Jurisdiction, 101 HARV. L. REV. 610, 653-54 (1988) ("The substantive relevance approach is not the best guide to dispute-specific jurisdiction" in part because "the Supreme Court did not limit the specific jurisdiction quid pro quo rationale in International Shoe to claims 'directly arising out of' forum activities; it noted that due process would be satisfied 'in most instances' if the obligations arise out of or are connected with the activities within the state.").
The "but for" test has been adopted by other courts. In contrast to the First Circuit, for example, the Supreme Judicial Court of Massachusetts has rejected the substantive relevance/proximate cause test in favor of a "but for" test. See Tatro v. Manor Care, Inc., 416 Mass. 763, 625 N.E.2d 549, 553 (Mass. 1994) ("There is no readily apparent basis in the statutory language ('arising from') for the restrictive proximate cause approach adopted by the First Circuit.").
The "but for" test has been described as follows:
The general theory of the "but for" test is that a cause of action 'arises from or relates to' the defendant's forum state activities when "but for" those activities the cause of action would not have arisen. Therefore, if a plaintiff can trace the train of events leading up to the cause of action and find that the defendant's activities contribute to this chain, the cause of action is said to arise from those activities for the purposes of determining personal jurisdiction.
Maloney, supra, 50 WASHINGTON AND LEE LAW REVIEW at 1277 . In Alexander v. Circus Circus Enterprises, Inc., 939 F.2d 847 (9th Cir. 1991), the Ninth Circuit said: "The critical focus in the 'arising out of' prong is whether, 'but for' the defendant's forum-related activities, the injury would have occurred; that is, whether the 'entire course of events . . . was an uninterrupted whole which began with, and was uniquely made possible by, the defendant's contacts in the forum state.'" Id. at 853 (quoting Shute v. Carnival Cruise Lines, 897 F.2d 377, 384 (9th Cir. 1990), rev'd on other grounds, 499 U.S. 585, 113 L. Ed. 2d 622, 111 S. Ct. 1522 (1991)).
The Supreme Court of California has rejected the "but for" test as probably "too lax" because "theoretically it may include any historical cause of the plaintiff's injuries," Vons Companies, supra, 926 P.2d at 1106, and because it "is overly mechanical and fails to concentrate on the central issue presented by a motion to quash for lack of specific jurisdiction - - that is, whether the defendant's forum contacts and plaintiff's claim are related sufficiently so that it is fair to subject the defendant to jurisdiction in the forum." 926 P.2d at 1108 (emphasis supplied); see also BRILMAYER, supra, 1980 Supreme Court Review at 84.
Two other nexus tests should be mentioned. As early as 1976, the Supreme Court of California applied the "substantial connection" test to determine whether the nexus requirement had been satisfied:
"Our inquiry is directed to whether plaintiff's cause of action, based on an accident which resulted from defendant's allegedly tortuous act in Nevada, arises out of or has a substantial connection with a business relationship defendant has purposefully established with California." Cornelison v. Chaney, 16 Cal. 3d 143, 545 P.2d 264, 267, 127 Cal. Rptr. 352 (Cal. 1976).
In 1995, after revisiting the issue of the proper nexus test and surveying other case law, the Supreme Court of California decided to retain its "substantial connection" test as a flexible standard which best interprets the relatedness requirement. the court stated:
A claim need not arise directly from the defendant's forum contacts in order to be sufficiently related to the contact to warrant the exercise of specific jurisdiction.
Rather, as long as the claim bears a substantial connection to the nonresident's forum contacts, the exercise of specific jurisdiction is appropriate. the due process clause is concerned with protecting nonresident defendants from being brought unfairly into court in the forum, on the basis of random contacts.
That constitutional provision, however, does not provide defendants with a shield against jurisdiction when the defendant purposefully has availed himself or herself of benefits in the forum.
Vons Companies, supra, 926 P.2d at 1096. See also Domtar, Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 31 (Minn. 1995) ("When a claim arises out of a contract that has a 'substantial connection' with the forum state, specific jurisdiction exists." (citing McGee, supra note 8, 355 U.S. at 223)).
The Supreme Court of Connecticut also articulated a flexible or less restrictive reasonably foreseeable standard in Thomason, supra, declaring:
The words "arising out of" . . . must be interpreted in a manner that reconciles the legislative decision to impose some limits on constitutionally permitted jurisdiction with its decision not to require a causal connection between the defendant's solicitation here and the plaintiffs' lawsuit. Our interpretation is as follows.
For purposes of the applicable Connecticut long-arm statutory provision, "a plaintiff's "cause of action arises . . . out of . . . business solicited in this state" if, at the time the defendant engaged in solicitation in Connecticut, it was reasonably foreseeable that, as a result of that solicitation, the defendant could be sued in Connecticut by a solicited person on a cause of action similar to that now being brought by the plaintiffs.