To Establish Personal Jurisdiction, Minimum Contacts Must Be With Forum State, Not Just Its Resident

To Establish Personal Jurisdiction, Minimum Contacts Must Be With Forum State, Not Just Its Resident

 Due Process is satisfied when a non-resident has sufficient minimum contacts with a state such that exercise of jurisdiction over him does not offend traditional notions of fair play and substantial justice. The minimum contacts analysis focuses on the relationship between the defendant, the forum and the litigation, and the defendant's conduct must create a substantial connection with the forum state. The relationship must arise out of contacts that defendant himself creates with the forum state, and the contact must be with the forum state itself rather than merely with persons who reside there. The United States Supreme Court recently addressed these concepts in Walden v. Fiore [an enhanced version of this opinion is available to subscribers].

Anthony Walden was working as a DEA agent at the Atlanta airport when, after using a drug-sniffing dog to perform a sniff test, he seized almost $97,000 in cash that Nevada residents Gina Fiore and Keith Gipson claimed to have won gambling in San Juan. Walden later helped draft an affidavit to establish probable cause. Fiore and Gipson sued Walden in Nevada alleging violation of their Fourth Amendment rights. Specifically, they asserted that Walden violated their rights by (1) seizing the cash without probable cause; (2) keeping the money after concluding it did not come from drug-related activity; (3) drafting and forwarding a probable cause affidavit to support a forfeiture action while knowing the affidavit contained false statements; (4) willfully seeking forfeiture while withholding exculpatory information; and (5) withholding that exculpatory information from the United States Attorney's Office.

The United States District Court for the District of Nevada granted Walden's motion to dismiss, determining that his search and seizure in Georgia did not establish a basis to exercise personal jurisdiction over him in Nevada. The Ninth Circuit reversed, holding that the District Court could exercise jurisdiction over the false probable cause affidavit aspect of the case. The court found that Walden expressly aimed the allegedly false affidavit at Nevada by submitting it knowing that it would affect Nevada residents and that the delay in returning the funds caused Fiore and Gipson foreseeable harm in Nevada. The United States Supreme Court reversed, holding that Nevada lacked personal jurisdiction over Walden.

The Supreme Court used a defamation case to illustrate the principle that a state's exercise of jurisdiction over an out-of-state intentional tortfeasor must be based on intentional conduct by the defendant that creates the necessary contacts with the forum. In Calder v. Jones [enhanced version], a California actress sued a reporter and editor working in Florida for the National Enquirer for libel based on an article written and edited in Florida for publication in a weekly paper with a California circulation of approximately 600,000. California's exercise of jurisdiction in that case did not offend due process as California was the focal point of the story and of the harm suffered. For example, the defendants relied on phone calls to California sources, wrote the story about the plaintiff's activities in California, and caused reputational injury in California by writing an allegedly defamatory article that was widely circulated in California. The Supreme Court noted that the reputation-based effects of the alleged libel connected the defendants to the state of California itself and not just to the plaintiff. Because publication to third persons is a necessary element of defamation, the libel actually "occurred" (at least in part) in California, the place of publication. The injury to the plaintiff's reputation in the eyes of the California public connected the defendants' conduct to the state, not just to a person who lived there. That connection, in combination with the facts that gave the article a California focus, made jurisdiction appropriate.

 Read the rest of the article at the Virginia Business Litigation Lawyer Blog.

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