Questions to think about in connection
with McGee
1) Can you figure out how Int'l Life Ins. Co. responded to
McGee's
suit against it in California state court? Was this a wise move?
2) Look at McGee from the perspective of Int'l Shoe, with
particular
attention paid to the level of activity giving rise to jurisdiction and
to the extent to which the suit is related to this activity. What Shoe
category would it fall under?
3) Consider the following passage from McGee:
Turning to this case we think it apparent that the Due Process
Clause
did not preclude the California court from entering a judgment binding
on respondent. It is sufficient for purposes of due process that the
suit
was based on a contract which had substantial connection with that
State.
The contract was delivered in California, the premiums were mailed from
there and the insured was a resident of that State when he died. It
cannot
be denied that California has a manifest interest in providing
effective
means of redress for its residents when their insurers refuse to pay
claims.
These residents would be at a severe disadvantage if they were forced
to
follow the insurance company to a distant State in order to hold it
legally
accountable. When claims were small or moderate individual claimants
freguently
could not afford the cost of bringing an action in a foreign
forum--thus
in effect making the company judgment proof. Often the crucial
witnesses--as
here on the company's defense of suicide--will be found in the
insured's
locality.
How is the reasoning here different from that in Int'l Shoe and
Perkins?
Is McGee yet another sea-change in theories of PJ?
4) D
is
incorporated in Oregon, does all its manufactoring in Oregon, and has
all its offices there. P reads D's advertisement in a newspaper in
California. P places an order by a phone call; that P makes to Oregon.
D ships the good to California. PJ over D in California for a suit
concerning the defectiveness of the product?
5) Assume P calls D merely after having read D's website, which
includes D's phone number in Oregon. PJ over D in California for a suit
concerning the defectiveness of the product?
6) Assume P calls D merely after having heard about D from a friend who
bought D's products in Oregon. PJ over D in California for a suit
concerning the defectiveness of the product?
7) D hires a national recruiting service (located in New York) to hire
an engineer to work for a year in Oregon. P, who lives in California,
is contacted by the service and agrees to work in Oregon. There he is
injured on the job. After returning to California, he sues D in
California state court for his injuries. PJ?
8) Consider Andrews University v. Robert Bell Industries, Ltd., 685
F.Supp. 1015 (W.D. Mich. 1988). Michigan P goes to Ontario D to buy
boiler. Ontario D agrees, ships the boiler FOB Ontario. D has sold only
three other boilers to companies in Michigan. Boiler is defective. P
sues for breach in Michigan state court. PJ?
Here is what
the court said:
Bell argues
that the unsolicited sale of three boilers in Michigan between 1972 and
1982 does not constitute sufficient “minimum contacts” to create a
“substantial connection” between Bell and Michigan so as to confer
general personal jurisdiction upon this Court. Moreover, Bell argues
that three sporadic, unsolicited sales do not rise to the level of
“systematic and continuous” business activity in Michigan. Bell argues
that any contacts with Michigan which occurred after the alleged
problems arose should not be considered in the “minimum contacts”
calculus.
In
sum, Bell argues that it is undisputed that Bell 1) has never
registered to do business in Michigan; 2) has never had any offices,
agents, or employees in Michigan; 3) does not own or maintain any
assets, accounts, or property in Michigan; 4) has never advertised in
Michigan publications or disseminated advertising of any kind in
Michigan; 5) has never solicited business in Michigan or had a
marketing system to promote its products in Michigan; 6) has never
maintained a system for distributing its products in Michigan or sold
its products through distributors who have agreed to act as agents in
Michigan; and 7) has in the last fifteen years sold only three boilers
directly to customers in Michigan. See Defendant Bell's Brief in
Support of Motion to Dismiss at 8-9.
Bell
further asserts that the alleged “tortious acts” took place, if at all,
in Canada, not in Michigan, and emphasizes that the complaint alleges
that the boiler was negligently designed and manufactured and does not
allege any injury to person or property, but merely argues that the
boiler is not usable in Michigan....
Proof
alone that a non-resident caused an effect in Michigan that was
foreseeable does not establish a relationship to Michigan such as to
make it fair and reasonable to subject the non-resident to
jurisdiction. (citation omitted)
Unless
products of the manufacturer are distributed in this statute pursuant
to its marketing system in such a manner and to such an extent that it
can properly be said that the manufacturer has ‘purposefully avail[ed]
itself of the privilege of conducting activities' within the state, it
does not ordinarily have ‘substantial connection’ or requisite minimum
contacts with the state justifying the exercise of long arm
jurisdiction.
Would the
case have come out differently if the shipment had not been FOB
Ontario? What does FOB mean?
10) Now
consider Chung v. NANA Development Corp., 783 F.2d 1124 (4th Cir.
1986). A Va. P goes to Alaska to buy reindeer horns from an Alaska D. P
wants the horns to remain frozen. He requests that the D ship some of
them to him in Va. When they arrive in Va. they are melted. P sues D in
federal court in Va. PJ? Here is what the court said:
The contact
between NANA and Virginia in this case was hardly so purposeful that
litigation in Virginia could have been reasonably foreseen. NANA's ties
with Virginia are virtually nonexistent; entirely so, apart from this
single transaction. Although it is true that a single contractual
relationship may furnish a basis for jurisdiction, [cites McGee], the
Court has expressly denied that an individual's contract with an
out-of-state party can alone automatically establish sufficient minimum
contacts. It is essential that the contract relied upon have a
“substantial connection” with the forum state. [Cites McGee] ...
The
contract for reindeer antlers between Chung and NANA was finalized in
Alaska, and though its essential terms were negotiated by telephone
between Alaska and Virginia, those communications were initiated by
Chung. NANA made no purposeful effort of its own to develop a market
for its product in Virginia. It merely responded to Chung's unilateral
inquiries. Payment for the antlers was tendered in Alaska at the time
of sale. The parties entered into no agreements for a continuing
business relationship beyond this single transaction in Alaska. Nothing
in the parties' contract or course of dealing put NANA on notice that
it might be haled into court in Virginia. NANA appears to have done
everything possible to confine its United States business to its home
state of Alaska during this transaction, and never had any other
dealings with Virginia whatsoever. It only shipped goods to Virginia on
this isolated occasion for the convenience of Chung...
It is
immaterial, in this context, that NANA knew of the ultimate destination
of the shipment, since the foreseeability of injury in a distant forum
is not the touchstone of minimum contacts. While it is only fair that a
corporation seeking to create interstate business by its own endeavors
be subject to suit wherever it extends its reach, as the “contacts
proximately result from actions by the defendant himself,” it is
equally necessary to protect an enterprise such as NANA which has not
made such efforts, but only sells its product to direct purchasers in
its home state. Predictability in structuring business dealings would
otherwise be impaired, and fair notice give way to the whims of
purchasers, leaving jurisdiction to rest on “random, isolated or
fortuitous” circumstances. NANA has simply not sent its goods into the
stream of interstate commerce with the minimal regularity due process
demands.
...This
circuit has previously admitted that a single shipment of goods into
the forum state may sometimes establish a jurisdictional basis. In
other cases, such a single shipment has been held inadequate for
“minimum contacts” purposes. See Erlanger Mills, Inc. v. Cohoes Fibre
Mills, Inc., 239 F.2d 502, 507 (4th Cir.1956). Reasonableness and
fairness are concepts inherently incapable of more precise definition,
and, particularly in this area, “the shades are innumerable.” Examining
with care all of the facts and circumstances here presented, we are not
persuaded that it would be just to subject NANA to the jurisdiction of
courts in Virginia, where its connections to the forum are not
sufficiently purposeful but of an isolated and unsolicited character.
11) Now consider Thompson v. Chrysler Motors Corp., 755 F.2d 1162 (5th
Cir. 1985). Miss. P goes to Ala. to buy car from Ala. D. Returns with
car to Miss. Car has problems, P makes many phone calls to Ala. and
returns a number of times to Ala. for repair. Finally D ships a master
cylinder to P in Miss. for use in repair there. Cylinder is defective
and accident occurs. P sues D in Miss. state court. PJ?
Here is what the court says:
But for Crimson's sale
and shipment of the master cylinder
to Buster's for placement in the Heaths' automobile, we might be
persuaded that
the Heaths' telephone calls to Crimson and their trips to the Alabama
dealership for servicing of their vehicle, as well as the sale itself,
merely
constituted unilateral activity on the part of the Heaths insufficient
to
support an assertion of jurisdiction over Crimson. ...Telephone calls
made from
the forum state to the nonresident defendant represent an insufficient
basis
for the forum's assertion of jurisdiction over the nonresident.
Further, the
sale of an automobile by a dealer who operated in a state contiguous to
the
forum state and who knew that the purchaser would take the car to the
forum
state has been held insufficient to support an exercise of jurisdiction
over
the defendant even when a defect in the vehicle is alleged to have
caused the
accident giving rise to the suit.
Nevertheless, because the case ... involves an allegation of specific
jurisdiction, we must examine the relationship among Crimson, the state
of Mississippi,
and this particular litigation. In this context, the problematic
contact is
clearly Crimson's sale and shipment of the master cylinder to Buster's,
the Mississippi
dealer, for installation in the Heaths' Dodge Magnum. Even a single
purposeful
contact is sufficient to satisfy the due process requirement of
“minimum
contacts” when the cause of action arises from the contact. [Cites
McGee]
In Brown v. Flowers Industries, Inc., we held that due process
permitted the
assertion of jurisdiction over a nonresident whose sole contact with
the forum
state was the making of a single defamatory telephone call to a person
in that
state. ...The sale and shipment of the master cylinder into Mississippi
represented an affirmative act by Crimson to introduce its product into
Mississippi
for use in that state. By this shipment, Crimson purposefully availed
itself of
the privilege of conducting activities in Mississippi
and its connection with the forum is such that it should reasonably
anticipate
being haled into court there when the accident giving rise to the suit
was
caused by an alleged defect in the product sold and shipped to the
forum.
Moreover, while the other asserted contacts between Crimson and Mississippi
might not have been sufficient of themselves to support jurisdiction,
they
weigh in favor of our conclusion when viewed in the aggregate with the
master
cylinder contact.
12) Consider
Bensusan Restaurant Corp., v. King, 937 F.Supp. 295 (S.D.N.Y.1996).
Bensusan, the operator of a New York jazz club sued the operator of a
Missouri jazz club for trademark infringement. The Missori club's
internet web site at issue contained general information about the
defendant's club, a calendar of events and ticket information. The site
was not interactive. If a user wanted to go to the club, she would have
to call or visit a ticket outlet and then pick up tickets at the club
on the night of the show. PJ over the Mo club in NY?