Tuesday, February 25, 2014

SCOTUS Decision in Walden v. Fiore: More on Personal Jurisdiction

Today the Supreme Court issued a unanimous decision in Walden v. Fiore. The case is a Bivens action against an officer involved in seizing cash that the plaintiffs were carrying through the Atlanta airport. Justice Thomas’s unanimous opinion begins: “This case asks us to decide whether a court in Nevada may exercise personal jurisdiction over a defendant on the basis that he knew his allegedly tortious conduct in Geor­gia would delay the return of funds to plaintiffs with connections to Nevada.” The answer? No. From the final paragraph:

Well-established principles of personal jurisdiction are sufficient to decide this case. The proper focus of the “minimum contacts” inquiry in intentional-tort cases is “‘the relationship among the defendant, the forum, and the litigation.’” Calder, 465 U. S., at 788. And it is the defendant, not the plaintiff or third parties, who must create contacts with the forum State. In this case, the application of those principles is clear: Petitioner’s rele­vant conduct occurred entirely in Georgia, and the mere fact that his conduct affected plaintiffs with connections to the forum State does not suffice to authorize jurisdic­tion.

Here are some highlights from the opinion:

 

For a State to exercise jurisdiction consistent with due process, the defendant’s suit-related conduct must create a substantial connection with the forum State. Two related aspects of this necessary relationship are relevant in this case.

First, the relationship must arise out of contacts that the “defendant himself ” creates with the forum State. Burger King Corp. v. Rudzewicz, 471 U. S. 462, 475 (1985).*** Put simply, however sig­nificant the plaintiff’s contacts with the forum may be, those contacts cannot be “decisive in determining whether the defendants due process rights are violated.” Rush, 444 U. S., at 332.

Second, our “minimum contacts” analysis looks to the defendant’s contacts with the forum State itself, not the defendant’s contacts with persons who reside there. See, e.g., International Shoe, supra, at 319 (Due process “does not contemplate that a state may make binding a judg­ment in personam against an individual . . . with which the state has no contacts, ties, or relations”); Hanson, supra, at 251 (“However minimal the burden of defending in a foreign tribunal, a defendant may not be called upon to do so unless he has had the ‘minimal contacts’ with that State that are a prerequisite to its exercise of power over him”).*** And although physical pres­ence in the forum is not a prerequisite to jurisdiction, Burger King, supra, at 476, physical entry into the State—either by the defendant in person or through an agent, goods, mail, or some other means—is certainly a relevant contact. See, e.g., Keeton, supra, at 773–774.  But the plaintiff cannot be the only link between the defendant and the forum. ***

These same principles apply when intentional torts are involved. In that context, it is likewise insufficient to rely on a defendant’s “random, fortuitous, or attenuated con­tacts” or on the “unilateral activity” of a plaintiff. Ibid. (same). A forum State’s exercise of jurisdiction over an out-of-state intentional tortfeasor must be based on inten­tional conduct by the defendant that creates the necessary contacts with the forum.

Calder v. Jones, 465 U. S. 783, illustrates the applica­tion of these principles.*** The crux of Calder was that the reputation-based “ef­fects” of the alleged libel connected the defendants to California, not just to the plaintiff. The strength of that connection was largely a function of the nature of the libel tort. However scandalous a newspaper article might be, it can lead to a loss of reputation only if communicated to(and read and understood by) third persons. See Restate­ment (Second) of Torts §577, Comment b (1976); see also ibid. (“[R]eputation is the estimation in which one’s char­acter is held by his neighbors or associates”). Accordingly, the reputational injury caused by the defendants’ story would not have occurred but for the fact that the defend­ants wrote an article for publication in California that was read by a large number of California citizens. Indeed, because publication to third persons is a necessary ele­ment of libel, see id., §558, the defendants’ intentional tort actually occurred in California. Keeton, 465 U. S., at 777 (“The tort of libel is generally held to occur wherever the offending material is circulated”). In this way, the “ef­fects” caused by the defendants’ article—i.e., the injury to the plaintiff’s reputation in the estimation of the Califor­nia public—connected the defendants’ conduct to Califor­nia, not just to a plaintiff who lived there. That connec­tion, combined with the various facts that gave the article a California focus, sufficed to authorize the California court’s exercise of jurisdiction.***

Applying the foregoing principles, we conclude that petitioner lacks the “minimal contacts” with Nevada that are a prerequisite to the exercise of jurisdiction over him. Hanson, 357 U. S., at 251. It is undisputed that no part of petitioner’s course of conduct occurred in Nevada. Petitioner approached, questioned, and searched respondents, and seized the cash at issue, in the Atlanta airport. It is alleged that petitioner later helped draft a “false probable cause affidavit” in Georgia and forwarded that affidavit to a United States Attorney’s Office in Georgia to support a potential action for forfeiture of the seized funds. 688 F.3d, at 563. Petitioner never traveled to, conducted activities within, contacted anyone in, or sent anything or anyone to Nevada. In short, when viewed through the proper lens—whether the defendant’s actions connect him to the forum—petitioner formed no jurisdictionally relevant contacts with Nevada.

The Court of Appeals reached a contrary conclusion by shifting the analytical focus from petitioner’s contacts with the forum to his contacts with respondents. See Rush, 444 U. S., at 332. *** This approach to the “minimum contacts” analysis impermissibly allows a plaintiff’s contacts with the de­fendant and forum to drive the jurisdictional analysis. Petitioner’s actions in Georgia did not create sufficient contacts with Nevada simply because he allegedly directed his conduct at plaintiffs whom he knew had Nevada con­nections. Such reasoning improperly attributes a plain­tiff’s forum connections to the defendant and makes those connections “decisive” in the jurisdictional analysis. See Rush, supra, at 332. It also obscures the reality that none of petitioner’s challenged conduct had anything to do with Nevada itself.

And in footnote 9, the Court takes pains to clarify, yet again, that significant questions remain about personal jurisdiction in cases involving the internet:

Respondents warn that if we decide petitioner lacks minimum contacts in this case, it will bring about unfairness in cases where intentional torts are committed via the Internet or other electronic means (e.g., fraudulent access of financial accounts or “phishing” schemes). As an initial matter, we reiterate that the “minimum contacts” inquiry principally protects the liberty of the nonresident defendant, not theinterests of the plaintiff. World-Wide Volkswagen Corp. v. Woodson, 444 U. S., 286, 291–292 (1980). In any event, this case does not present the very different questions whether and how a defendant’s virtual “presence” and conduct translate into “contacts” with a particular State. To the contrary, there is no question where the conduct givingrise to this litigation took place: Petitioner seized physical cash from respondents in the Atlanta airport, and he later drafted and forwarded an affidavit in Georgia. We leave questions about virtual contacts for another day.

 

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