Minimum Contacts Analysis Personal Jurisdiction
In the early years after 13-423 was enacted, decisions in our cases were guided both by Supreme Court precedent and also by then existing Maryland and Virginia law. We look first at early Supreme Court cases that shaped our initial decisions under 13-423 (a)(1). International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945), the seminal decision, held that, in keeping with "'traditional notions of fair play and substantial justice,'" there must be "minimum contacts" between the defendant and the forum state before personal jurisdiction can be exercised consistently with due process.
"Due process requires . . . that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" International Shoe, supra, 326 U.S. at 316
Id. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940)). at the same time, International Shoe emphasized that when a defendant seeks and "enjoys the benefits and protection of the laws" of the forum state, the defendant may face "obligations which arise out of or are connected with the defendant's activities within the forum state." 326 U.S. at 319.
Under these circumstances, requiring a defendant "to respond to a suit . . . in the forum state in most instances, hardly can be said to be an undue burden." Id.
Hanson v. Denckla, 357 U.S. 235, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958), further refined the required nexus. a plaintiff's unilateral activity in relation to a defendant cannot alone sustain personal jurisdiction under the "minimum contacts" theory. Id. at 253.
Rather, the Court held, "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State . . . ." Id.
In Shaffer v. Heitner, 433 U.S. 186, 53 L. Ed. 2d 683, 97 S. Ct. 2569 (1977), a shareholder's derivative action, and Kulko v. Superior Court of California, 436 U.S. 84, 56 L. Ed. 2d 132, 98 S. Ct. 1690 (1978), a domestic relations matter, the Supreme Court reiterated the "fairness" and "reasonableness" theme sounded in International Shoe.
One of the indices of "fairness" and "reasonableness" of the exercise of personal jurisdiction by the forum state is whether the defendant "'purposefully availed itself' of the 'benefits and protections'" of the forum state's laws, Kulko, supra, 436 U.S. at 94 (citing Shaffer, supra, 433 U.S. at 216 (footnote omitted)), and thus, "could reasonably have anticipated being 'haled before a . . . court'" in that jurisdiction. 436 U.S. at 97-98 (quoting Shaffer, supra, 433 U.S. at 216.
Kulko also examined whether there was a "sufficient connection" between the defendant and the forum state by determining "whether the 'quality and nature' of the defendant's activity is such that it is 'reasonable' and 'fair' to require him to conduct his defense in that State." 436 U.S. at 92. Part of the answer depended on whether the defendant "purposefully derived benefit from any activities relating to the forum state." Id. at 96.
The first of our significant cases decided under 13-423 (a)(1), Environmental Research Int'l, Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808 (D.C. 1976) (en banc), not only articulated the aforementioned principles from Supreme Court cases, but also demonstrated that Congress intended the District's long-arm statute, like the corresponding statutes in Maryland and Virginia, to be coextensive in reach with the exercise of personal jurisdiction permitted by the due process clause. Specifically, we stated that:
the legislative history of the District's long-arm statute makes it clear that it was Congress' intent to provide the District with a long-arm statute equivalent in scope to those already in effect in Maryland and Virginia. . . . In interpreting their statutes, the courts of both Maryland and Virginia have concluded that they permit the exercise of personal jurisdiction over nonresident defendants to the extent permitted by the due process clause of the United States Constitution. 355 A.2d at 810-811.
We then stated: "We reach a similar conclusion as to our statute." Id. at 811.
We "noted the trend toward liberalization of jurisdictional limitations" and the fact that "even a small amount of in-jurisdiction business activity is generally enough to permit the conclusion that a nonresident defendant has transacted business here." Id.
See also Bueno v. La Compania Peruana de Radiodifusion, S.A., 375 A.2d 6, 8 (D.C. 1977) (focusing upon whether the defendant had engaged in some "purposeful, affirmative activity within the District of Columbia") (citations omitted).
Although our earliest cases did not focus much on 13-423 (b), we had occasion to interpret that provision in Cohane v. Arpeja-California, Inc., 385 A.2d 153 (D.C.), cert. denied, 439 U.S. 980, 58 L. Ed. 2d 651, 99 S. Ct. 567 (1978), where we explained:
The limitation in 13-423 (b) that the claim for relief must arise from the transaction of business in the District of Columbia is meant to prevent "the assertion of claims in the forum state that do not bear some relationship to the acts in the forum state relied upon to confer jurisdiction." Malinow v. Eberly, 322 F. Supp. 594, 599 (D. Md. 1971).
Once, however, the claim is related to acts in the District, 13-423 does not require that the scope of the claim be limited to activity within this jurisdiction.
385 A.2d at 158-59. Thus, under Cohane, if a claim is "related to defendant's acts in the District," the requirement of 13-423 (b) is met. We applied the same "relate to" principle in Berwyn Fuel, Inc. v. Hogan, 399 A.2d 79, 80 (D.C. 1979), where we also made explicit the principle recognized in Lockwood Greene, supra, that 13-423 "permits a jurisdictional reach coextensive with that permitted by the due process clause." Id. at 80 (citing International Shoe, supra, 326 U.S. at 310; Cohane, supra, 385 A.2d at 158).
Berwyn reiterated that "the only nexus required by 13-423 (a)(1) . . . between the District of Columbia and the nonresident defendant is 'some affirmative act by which the defendant brings itself within the jurisdiction and establishes minimum contacts.'" Id. (quoting Cohane, supra, 385 A.2d at 158).
Between 1981 and 1983, after the Supreme Court decided World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980), we determined that personal jurisdiction over nonresident defendants existed under our long-arm statute in four out of five cases.
One of these cases, AMAF Int'l Corp. v. Ralston Purina Co., 428 A.2d 849 (D.C. 1981), was decided under D.C. Code 13-334 pertaining to foreign corporations that "do" or transact business in the District. AMAF International, a District corporation, sued Ralston, a Missouri corporation for negligence and breach of contract relating to an order of 600 bags of poultry feed to be shipped to Nigeria.
Ralston engaged in another type of business activity in the District -- making sales of its products to local supermarkets. In reversing the trial court's dismissal of the complaint for lack of personal jurisdiction, we stressed a principle re-articulated in World-Wide Volkswagen, supra, "'When a corporation purposefully avails itself of the privilege of conducting activities within the forum State, it has clear notice that it is subject to suit there.'" AMAF International, 428 A.2d at 851 (quoting World-Wide Volkswagen, supra, 444 U.S. at 297.
World- Wide Volkswagen reaffirmed that "the limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient litigation, have been substantially relaxed over the years." Id. at 292. It referenced the "fundamental transformation in the American economy" and "the economic interdependence of the States," id. at 293, and highlighted two principles governing a due process analysis in personal jurisdiction cases:
(1) "the foreseeability that is critical . . . . is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there";
(2) "when a corporation 'purposefully avails itself of the privilege of conducting activities within the forum State,' . . . it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State." 444 U.S. at 297 (quoting Hanson, supra, 357 U.S. at 253).
World-Wide Volkswagen helped to guide our decisions in the cases decided between 1981 and 1983, the most significant of which were Mouzavires v. Baxter, 434 A.2d 988 (D.C. 1981) (en banc); Smith v. Jenkins, 452 A.2d 333 (D.C. 1982); and Hummel v. Koehler, 458 A.2d 1187 (D.C. 1983).
In addition to following previous announced principles, these cases clarified that "the most critical inquiry is not whether the nonresident defendant is physically present in the forum but whether the defendant's contacts with the forum are of such a quality and nature that they manifest a deliberate and voluntary association with the forum" and are not "fortuitous or accidental." Mouzavires, supra, 434 A.2d at 995, 997; Smith, supra, 452 A.2d at 337.
Mouzavires also declared that 13-423 (a)(1) "embraces those contractual activities of a nonresident defendant which cause a consequence in this jurisdiction." 434 A.2d at 992. and see Cockrell v. Cumberland Corp., 458 A.2d 716 (D.C. 1983) (applying the "cause a consequence" principle).
Between 1984 and 1993, three important decisions were handed down by the Supreme Court: Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 79 L. Ed. 2d 790, 104 S. Ct. 1473 (1984); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 80 L. Ed. 2d 404, 104 S. Ct. 1868 (1984); and Burger King Corp. v. Rudzewicz, 471 U.S. 462, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985).
Discussion in Keeton centered on whether the minimum contacts requirement was met under New Hampshire's long-arm statute in a libel action brought by a resident of New York who sued an Ohio corporation, Hustler Magazine, Inc. in a federal court in New Hampshire. If those contacts are "random, isolated, or fortuitous," the Court stated, due process requirements are not satisfied. 465 U.S. at 774.
The only connection the Ohio corporation had with New Hampshire was the monthly sale of its magazine, issues of which contained the alleged libel that was the focus of the lawsuit.
After reiterating the fairness and reasonableness principles governing the minimum contacts doctrine, the Supreme Court reversed the trial court's dismissal of the complaint, saying in part:
"Where, as in this case, respondent Hustler Magazine, Inc., has continuously and deliberately exploited the New Hampshire market, it must reasonably anticipate being haled into court there in a libel action based on the contents of its magazine." 465 U.S. at 781 (citing World-Wide Volkswagen, supra, 444 U.S. at 297-98).
Helicopteros, supra, elucidated the distinction between general and specific jurisdiction in personal jurisdiction cases:
(1) "When a State exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the forum, the State is exercising 'specific jurisdiction' over the defendant," 466 U.S. at 414 n.8 (citation omitted);
(2) "When a State exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum, the State has been said to be exercising 'general jurisdiction' over the defendant." Id at n.9 (citations omitted). Burger King, in turn, summarized the principles and policies relating to the due process clause and personal jurisdiction.
First, the court rejected any "mechanical tests" or "talismanic formulas" for the determination of personal jurisdiction, 471 U.S. at 478, 485, and reaffirmed that "'the facts of each case must always be weighed' in determining whether personal jurisdiction would comport with 'fair play and substantial justice.'" 471 U.S. at 485-486 (quoting Kulko, supra, 436 U.S. at 92).
Second, "where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, the 'fair warning' requirement is satisfied if the defendant has 'purposefully directed' his activities at residents of the forum, Keeton, supra, 465 U.S. at 774, and the litigation results from alleged injuries that 'arise out of or relate to' those activities, Helicopteros, supra, 466 U.S. at 414." Burger King, supra, 471 U.S. at 472.
Third, "jurisdiction is proper . . . where the contacts proximately result from actions by the defendant himself that create a 'substantial connection' with the forum State." 471 U.S. at 475 (quoting McGee, supra note 8, 355 U.S. at 223).
Fourth, "where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Id. at 477.
Finally, "a State generally has a 'manifest interest' in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors." 471 U.S. at 473 (citing McGee, supra note 8, 355 U.S. at 223).
Our later decisions construing 13-423 have been consistent with the teaching of the Supreme Court in these due process cases. See, e.g., Salins, Inc. v. Sure Way Refrigerated Truck Transp. Brokers, Inc., 510 A.2d 1032 (D.C. 1986); Fisher v. Bander, 519 A.2d 162 (D.C. 1986); Lex Tex Ltd. v. Skillman, 579 A.2d 244 (D.C. 1990); Trerotola v. Cotter, 601 A.2d 60 (D.C. 1991).
In Fisher, for example, we stressed three justifications for asserting jurisdiction.
First, "the District has an interest in providing its residents with the opportunity to redress grievances inflicted by out-of-state defendants." 519 A.2d at 164.
Second, "when out-of-state actors avail themselves of the benefits of contact within the forum asserting jurisdiction, fairness requires that they be held accountable therein for the consequences of such activities." Id.
Third, "the voluntary establishment of contacts within the forum asserting jurisdiction helps to assure that litigating within that jurisdiction would not impose an undue burden on the out-of-state party." Id.
In Trerotola, supra, our focus was on 13-423 (b), and the question was "whether, in the words of 13-423 (b), Cotter's 'claim for relief arose from acts enumerated in' any subsection of 13-423 - in this case in 13-423 (a)(1)." 601 A.2d at 63 (citing Cohane, supra, 385 A.2d at 158).
Pointing out that " 13-423 (b) bars claims 'unrelated to the acts forming the basis for personal jurisdiction,'" id. (citing Willis v. Willis, 211 U.S. App. D.C. 103, 106, 655 F.2d 1333, 1336 (1981)), we continued:
For proper jurisdiction, therefore, the long-arm statute requires that the claim raised have a discernible relationship to the "business" transacted in the District . . . . the critical test is whether the nonresident's "conduct and connection with the forum state are such that he or she should reasonably anticipate being haled into court there." World-Wide Volkswagen, supra, 444 U.S. at 297, quoted in Smith, supra, 452 A.2d at 336.
601 A.2d at 64.
See also Everett v. Nissan Motor Corp. in U.S.A., 628 A.2d 106, 107 (D.C. 1993), (emphasizing "the seminal requirement that the out-of-state defendant must undertake 'some affirmative act by which the defendant brings itself within the jurisdiction and established minimum contact.'") (quoting Cohane, supra, 385 A.2d at 158).