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Respondent sustained business losses due to mechanical problems at its mines. Respondent sued Petitioner in federal district court in Pennsylvania to recover on certain business interruption insurance policies. Petitioner objected to jurisdiction and moved for summary judgment. Respondent sought discovery on the jurisdictional issue. Petitioners failed to comply with court-ordered discovery of documents. The district court found that it had jurisdiction as a sanction under Federal Rule of Civil Procedure 37(b)(2)(A).
A sanction under Rule 37(b)(2)(A) consisting of a finding of personal jurisdiction does not violate Due Process.
After sustaining business losses due to mechanical problems at its mines, Respondent, a Delaware corporation owned jointly by a Pennsylvania company and the Republic of Guinee, sought reimbursement from certain business interruption insurance policies. After the insurers denied coverage for the loss, Respondent sued Petitioner, a foreign insurer, and other insurers in federal district court in Pennsylvania. Petitioner objected to the jurisdiction of the Pennsylvania and moved for summary judgment. Respondent sought discovery related to the Respondent’s insurance policies in Pennsylvania. Petitioners failed to comply with court-ordered production of the requested discovery in Pennsylvania. The district court found that it had jurisdiction as a sanction under Federal Rule of Civil Procedure 37(b)(2)(A).
Was the district court’s exercise of jurisdiction over Petitioner proper?
Yes. By submitting to the court’s jurisdiction for the limited purpose of challenging jurisdiction, Petitioner agreed to abide by the court’s determination on the issue of jurisdiction.
Personal jurisdiction can be waived, or a defendant can be estopped from raising the issue. A sanction under Rule 37(b)(2)(A)constitutes a waiver of the objection to personal jurisdiction.