Toward a New Equilibrium in Personal Jurisdiction

Abstract

In early 2014, the Supreme Court decided two new personal jurisdiction cases that will have a deep and wide-ranging impact on civil litigation in the coming decades: Daimler AG v. Bauman, 134 S. Ct. 746 (2014), and Walden v. Fiore, 134 S. Ct. 1115 (2014). Bauman eliminates the traditional “continuous and systematic” contacts test for general jurisdiction, and Walden significantly retracts the ability of courts to exercise personal jurisdiction over out-of-state defendants whose actions have in-state effects. Taken together, both cases will make it significantly more difficult for plaintiffs to exercise control over where lawsuits are filed. In some cases — such as large-scale class actions — the new decisions may make it impossible to identify a single forum where multiple defendants can be sued together, and will therefore shift the balance of litigation power from plaintiffs to defendants.

This Article examines the effect that these decisions will have on future litigation and suggests solutions to the problems that will arise in the wake of these decisions. It analyzes how the Court’s new jurisprudence has shifted the balance of power in the jurisdictional framework, and it explores areas of future litigation. We predict four areas in which disputes are likely to become more salient: first, the “connectedness” requirement of specific jurisdiction; second, the availability of personal jurisdiction over pendent claims that form part of a single case or controversy; third, the future availability of personal jurisdiction over a defendant whose out-of-state conduct has caused effects within the forum state; and fourth, the availability of “consent jurisdiction” based on the appointment of a registered agent for service of process. Even before the Court’s 2014 cases, circuit splits had arisen over the propriety of jurisdiction in each of these four areas. Now that the Court has limited other grounds for personal jurisdiction, we predict those pre-existing splits will become more critical to resolve and will take on a central role in future litigation.

Our Article suggests solutions to the problems that will inevitably arise in the wake of these decisions, and it proposes a method of recalibrating specific jurisdiction to account for the demise of general contacts jurisdiction and the limitation on effects-test jurisdiction. It recognizes that International Shoe described two categories of specific jurisdiction — not just one — and it builds on this two-tier framework to reach a new equilibrium. When the defendant’s forum activities fall within Shoe’s “continuous and systematic” category, the balance of individual and state interests should tilt toward authorizing jurisdiction as long as some loose connection exists between the forum and the actions that give rise to the litigation. Thus, in cases that would have been eligible for general jurisdiction in the past, the forum relatedness requirement should be relaxed. In contrast, for adjudicatory jurisdiction in the “single or occasional” acts scenario, the state must have a tighter link to its sovereign regulatory interests. This rebalanced jurisdictional framework would therefore take into account the defendants’ liberty interests as protected by Bauman and Walden without sacrificing the states’ sovereign interest in protecting their citizens..

Keywords

Personal Jurisdiction, Daimler AG v. Bauman, 134 S Ct. 746 (2014), Walden v. Fiore, 134 S. Ct. 1115 (2014), Continuous and systematic, Out-of-state defendants, In-state effects, International Shoe Co. v. Washington, 326 U.S. 310 (1945), State regulatory and adjudicatory interests

Publication Date

2014

Document Type

Article

Place of Original Publication

U.C. Davis Law Review

Publication Information

48 U.C. Davis Law Review 207 (2014)

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COinS Charles W. (Rocky) Rhodes Faculty Bio