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Personal Jurisdiction: The Enigma of Minimum Contacts

    SPECIFIC AND GENERAL JURISDICTION: THE “SHOE SPECTRUM”

    Although International Shoe is primarily viewed as a minimum contacts case, the opinion analyzes a broad spectrum of possible contacts with a state and their jurisdictional consequences. Figure 1-1 illustrates this spectrum of increasing contacts.

    At one end of the “Shoe spectrum” are cases in which a defendant has no contact with the forum state. In such cases, Shoe indicates that the state has no authority to exercise personal jurisdiction over the defendant, unless she consents to it. “Casual” or “isolated” contacts (whatever they may be) are also insufficient to support jurisdiction. But other single acts, because of their “quality and nature,” will support “specific in personam jurisdiction,” that is, jurisdiction over claims arising out of that single act. See, e.g., McGee v. International Ins. Co., 355 U.S. 220 (1957) (upholding jurisdiction over claim arising out of a single contract solicited in the state). Continuous but limited activity in the forum state, such as the ongoing business relationship in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), will also support “specific” in personam jurisdiction, that is, jurisdiction over claims arising out of that continuous activity. In each of these categories of cases, the in-state activity is limited. In each, the defendant is only subject to jurisdiction for claims arising out of those “minimum contacts.”

    The Shoe opinion also suggests that if the defendant’s forum contacts fall at the far right end of the spectrum, where the in-state contacts are very substantial, the defendant is subject to “general in personam jurisdiction.” This means that the defendant may be sued in the state for any claim, even one completely unrelated to its in-state activities. Several cases since International Shoe affirm that general in personam jurisdiction is sometimes permissible (see Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984); Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952)), but the Supreme Court has not clearly indicated where the line (marked “G” on Figure 1-1) lies between contacts that support general in personam jurisdiction and those that support only specific, minimum contacts jurisdiction.

    The Supreme Court’s recent general in personam jurisdiction case, Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011), held that several foreign subsidiaries of Goodyear Tire and Rubber Company were not subject to general in personam jurisdiction in North Carolina, even though several thousands of their tires were redistributed in North Carolina. The Goodyear Court rejected the argument that continuous sales into the state suffice to support general jurisdiction (as it had for substantial purchases in Helicopteros). However, in dicta, the Court endorsed the proposition that a corporation is subject to general in personam jurisdiction in the state where it is incorporated and the state of its principal place of business. The opinion states that the corporation is “fairly regarded as home” (131 S. Ct. at 2853-2854) in these states, analogizing to the state of domicile of a natural person, which may exercise general in personam jurisdiction over its domiciliaries. Milliken v. Meyer, 311 U.S. 457 (1940).

    But Goodyear leaves unclear whether a corporation can be subject to general in personam jurisdiction in other states in addition to the states of incorporation and principal place of business. Suppose, for example, that MegaSales Inc. is incorporated in Delaware and has its principal place of business in Colorado, but also has 50 stores employing 10,000 people in California. MegaSales is apparently subject to general in personam jurisdiction in Delaware and Colorado, but the Court did not clarify whether its substantial and continuous contacts in California subject it to general jurisdiction there as well. The Court’s emphasis on places where the corporation is “at home” (131 S. Ct. at 2854) suggests that they may not be, but we don’t know.

    Be careful not to confuse Goodyear’s analysis of general in personam jurisdiction with the analysis of a corporation’s state citizenship under 28 U.S.C. §1332(c)(1). Section 1332(c)(1) defines the corporation’s state citizenship for diversity purposes—to determine subject matter jurisdiction. Justice Ginsburg’s Goodyear opinion considers whether a corporation is subject to personal jurisdiction in a state for a claim that does not arise out of its contacts in that state.

    Admittedly, after Goodyear, the two tests are similar, but they may not be exactly the same. In Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010) the Supreme Court adopted the “home office” or “nerve center” test for principal place of business for diversity purposes under §1332(c)(1). But it is not clear whether that same test will be adopted to analyze general in personam jurisdiction. There may be good reasons to use a different test for personal jurisdiction purposes. Arguably, general in personam jurisdiction analysis should focus on the extent of the defendant’s in-state activity, and that activity may be much greater in states where a corporation has production or sales facilities than the state of the home office.[1]


    [1]. One Supreme Court opinion suggests in dicta that general in personam jurisdiction based on extensive in-state contact may only apply to corporations. Burnham v. Superior Court of California, 495 U.S. 604, 610, n.1 (1990). Whether or not this is true, the overwhelming majority of general in personam cases involve corporate defendants. Individuals’ contacts with states other than their domicile are seldom so extensive as to support an argument for general in personam jurisdiction.

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