Statutory Limits on Personal Jurisdiction

JURISDICTION BASED ON ACTS COMMITTED OUTSIDE THE STATE

In many cases, a party commits acts that have an impact in a state, even though he doesn’t actually enter the state. A party may contract to deliver goods in the state, or develop a computer program for an in-state company and deliver it over the Internet. A party might call into the state and defame a local citizen. A manufacturer might make its goods in Oregon and sell them to a wholesaler in Arizona, which resells them to consumers in Texas. In each of these cases, the out-of-state party has engaged in conduct that ultimately has effects in the state, without physically entering it.

In some circumstances, such contacts suffice under the due process clause to support the exercise of personal jurisdiction over the out-of-state actor. For example, in International Ins. Co. v. McGee, 355 U.S. 220 (1957), an insurer sent an offer to re-insure to a policy holder in California. The Supreme Court held that this was a deliberate reaching in that supported jurisdiction over the insurer. In Calder v. Jones, 465 U.S. 783 (1984), the defendant published an allegedly defamatory article about a California actress and distributed it in California. That too was held as a deliberate reaching into California that supported personal jurisdiction. And in Burger King Co. v. Rudzewicz, 471 U.S. 462 (1985), one of the defendants was held subject to jurisdiction in Florida when he established a twenty-year franchise relationship to a Florida franchisor, even though he never actually went to Florida.

A number of provisions in enumerated act long-arm statutes authorize jurisdiction in such cases, in which the defendant acts outside the state but causes an effect within it. Many such cases, for example, would satisfy subsection 103(a)(1) of the Uniform Act, which authorizes jurisdiction for claims that arise out of “transacting business” in the forum state. In others, subsection 103(a)(2), dealing with contracting to supply services or things in the state, will apply. In others, subsection 103(a)(4), which premises jurisdiction on an out-of-state tortious act that causes tortious injury in the state, will authorize jurisdiction.

Perhaps the most extravagant example of a long-arm statute that authorizes jurisdiction for out-of-state acts is found in the Illinois Supreme Court’s opinion in Gray v. American Radiator and Standard Sanitary Corp., 176 N.E.2d 761 (1961). The Gray case interpreted Ill. Rev. Stat. Chap. 110, §17(1)(b),[2] which allowed jurisdiction if the defendant “commits a tortious act” in Illinois. In Gray, the plaintiff sued a defendant in Illinois that had negligently manufactured a water heater valve in Ohio, which was incorporated in a water heater in Pennsylvania by a different manufacturer. The assembled water heater was later sold in Illinois and exploded there. The Gray court concluded that the Ohio valve maker—which had done nothing in Illinois—had “committed a tortious act” in the state, since the explosion that injured the plaintiff took place in Illinois. This expansive interpretation of the Illinois long-arm statute (much criticized, but never overruled) authorizes jurisdiction in many cases in which the defendant did not act in Illinois, did not send goods there, and did not know or anticipate that its product would end up in Illinois. As the examples that follow will illustrate, in many cases, application of this provision would fall in the “bulge area” in Figure 2-3, in which the statute authorizes jurisdiction, but exercising that jurisdiction would exceed constitutional limits.