I. JURISDICTION AND VENUE A. Territorial Jurisdiction 1. Historical Formula a. Pennoyer v. Neff - Facts: Lawyer wanted to recover fees owed so he attached property of a non-resident. RULES: No jurisdiction over an individual not currently located within the territorial boundaries of the state. In personam - an action against a person where dollars are sought in recovery, service of process must be made in person. In rem - an action against property which may or may not seek dollars in recovery and service of process may be by publication. Property must be located in the forum state. b. Arndt v. Griggs - Facts: An action was taken to quiet title by a resident of the state, no personal notice was provided to the non-residents. RULES: Notice and service of process by publication is sufficient for an in rem proceeding if notice is in an official paper. This is a Quasi in rem Type I action. c. Harris v. Balk - Facts: Harris an N.C. resident owed a debt to another N.C. resident, a Md. resident claimed a debt was owed to him and served notice while Harris was on a visit to Md. RULES: Debts have no locus or situs of their own but follow the debtor. This case developed a quasi in rem Type II action. Quasi in Rem 1) Property must be located in the forum state. TYPE I 2) Relief relates to the title of the property - who has the right of possession. 3) Ritual of Service - seizure and publication. 4) Notice - can arise from the publications, from the agent for a non-resident or from a side-notice if the address of the defendant is known. TYPE II - Cause of action is unrelated to the property - the property is seized to be used to acquire quasi in rem jurisdiction. 2) Relief sought is satisfaction of debt owed, normally dollars of an in personam obligation. 3) Ritual of Service - attachment or garnishment. 4) Notice - Publication (See notes page 291-295) 2. The Modern Formula a. Milliken v. Meyer - Facts: Wyoming domiciliary served with process while residing in Colorado. RULES: First breach in the territorial doctrine which said service of process could never go beyond the state boundaries. A resident of the forum state may be served in hand out of state and it is valid service of process. b. International Shoe v. State of Washington - Facts: Out of state corporation employed an in state salesmen. State of Washington attempted to collect for the employment compensation fund based on the in state employee. RULES: Established minimum contacts within the state as a basis for a cause of action and provided criteria for implementing this theory: (1) Minimum contacts - activities within the state subject the defendant to jurisdiction of the state; and, (2) The cause of action must arise out of those contacts. Allowed the forum state to reach out and grab a non-resident. c. Hanson v. Denckla - Facts: Mrs. Donner executed a trust in Delaware while residing in Pennsylvania. She subsequently moved to Florida and died. The survivors contested the trust. RULES: Recognized interests of both defendant and state sovereignty and added additional levels of analysis to the minimum contacts theory. (3) The defendant must purposely avail themselves of the benefits and protections of the forum state. (4) The exercise of jurisdiction must be reasonable and fair. (Considers convenience). Doing Business is a presence theory and a cause of action may be brought where a corporation is doing business regardless of where the cause of action occurred. Minimum Contacts - the cause of action must arise out of activities occurring in the forum state. d. Mullane v. Central Hanover Bank & Trust - Facts: Hanover Trust consolidated several funds into one fund for investment purposes. In order to settle the accounts the bank used publication of the notice as required by statute to notify trustholders of the action. RULES: Made a distinction between power to exercise jurisdiction and whether there was sufficient service of process. Three elements for adequate service were developed: (1) The notice must be reasonably calculated, under all the circumstances, to apprise interested parties of the action and afford them an opportunity to present their objections. (2) The notice must be of such nature as reasonably to convey the required information. (3) The notice must afford a reasonable time for those interested to make their appearance. 3. Applying the Contacts Standard a. Shaffer v. Heitner - Facts: Plaintiff sued Greyhound. RULES: Does away with quasi in rem Type II action and says quasi in rem Type I actions must be supported by the minimum contacts theory. b. Kulko v. Superior Court - Facts: Suit filed in California to modify a divorce settlement made in New York. RULES: Establishes an effects test where a wrongful activity outside the state causes an effect within the state. c. World-Wide Volkswagen Corp. v. Woodson - Facts: An action for products liability in Oklahoma brought against a distributor and sales company based in the Northeast with no contacts in Oklahoma. RULES: Stream of Commerce test. Does the manufacturer put the product into the market knowing that the item will go somewhere else and create an effect. The key is the foreseeability that the product would be in the forum state to be haled into court in that jurisdiction. For it to be foreseeable the defendant must have directed the product into the market of the forum jurisdiction. Analysis for reasonableness to exercise jurisdiction under minimum contacts: (1) Burden on the defendant - to what extent is requiring the defendant to come to the forum state a burden, considered by the facts of the case. (2) The forum states interest in adjudicating the action. States have the interest in protecting the rights of its own citizens. (3) Plaintiff's interest in obtaining effective and convenient relief (not forum shopping). (4) Interstate judicial system's interest in obtaining the most efficient resolution of controversies. (5) Shared interests of the severall states in furthering fundamental substantive social policies (not much different from #4). 4. Consent - another method of finding personal jurisdiction. All you need is the defendant saying expressly or impliedly yes, court, you have jurisdiction. a. Express Waiver - expressly waive your contention over jurisdiction (forum selection clause). (1) Burger King v. Rudzewicz - Facts: Defendant involved in litigation with Burger King over terms of the franchise agreement and where disputes should be adjudicated. RULES: So long as the contact creates a substantial connection with the forum even a single act can support jurisdiction. If the unreasonableness of exercising jurisdiction over the defendant can be mitigated, short of giving up jurisdiction, then that is normally what the court will require. (2) Adams v. Saenger - Facts: A Texas corporation institued an action in California. RULE: By commencing an action in the forum state acceptance of the jursidiction of the court is implied. (3) National Equipment Rental - Facts: Farmers in Michigan leased farm equipment from an implements company. The contract contained a clause designating a New York resident to receive service of process. RULES: Court found the forum selection clause valid, you can consent to be sued in a particular jurisdiction and it will hold up in the absence of adhesion (implies a grave inequity in bargaining power) or unconscionability. (So unreasonably detrimental to the interests of a contracting party as to render the contract unenforceable) Choice of Law - an agreement by the parties as to which state or country's law will govern any disputes. The agreement does not address what court will hear the dispute only what law will be applied. Forum Selection Clause - governs acquisition of jurisdiction by the forum court, it is a choice of court to hear disputes. (4) M/S Bremen and Unterwesser Reederei v. Zapata Off Shore Co. - Facts: Drill rig under tow was damaged in a storm. Towing contract specified the London Court for hearing disputes under the contract. RULES: Forum selection clause is prima facie valid unless it can be shown by the party resisting the clause that it would be unreasonable. EXCEPTIONS: (1) If the bargaining involved fraud or undue influence. (2) The choice of forum cannot be an attempt to circumvent the jurisdiction of the U.S. Courts (when all activity occurs within U.S. jurisdiction). (3) Reasonableness - as determined by convenience - must be so inconvenient that a party would be denied his day in court. b. Implied Waiver (1) Insurance Corp. of Ireland, LTD v. Compagnie des Bauxites de Guinea - Facts: Corporation obtained insurance, when insurer failed to pay instituted a cause of action in Pennsylvania the corporate headquarters. RULES: The court as punishment for failure to provide documents on demand may consider that action as a waiver of a personal liberty, consent to jurisdiction and impose jurisdiction. General Jurisdiction - Based on territorial reasons. Defendant may be sued in his home state at any time on any claim regardless of where the cause of action occurred. This is exercise of personal jurisdiction over a defendant in a suit which does not arise out of or relate to the defendant's contact with the forum. Specific Jurisdiction - exercise of jurisdiction over a defendant as a result of the effects of his activities which were purposefully directed to the forum state. By not complying with the court order the court held they implied consent to jurisdiction. (2) Phillips Petroleum - Class suit over interest payments on shares. RULE: Members of a class suit imply consent to jurisdiction by failing to opt out. 5. International Litigation - Consent a. Helicopteras Nacionales de Colombia, S.A. v. Hall - Facts: A Colombian corporation providing helicopter transportation to an American corporation to a work site in Peru. RULES: Systematic and continuous business contacts are required to establish presence. Contacts not related to the cause of action are not considered in considering minimum contacts. b. Asahi Metal Industry Co. v. Superior Court - Facts: Motorcyclist involved in an accident sued the manufacturer of the tire for a defective product. The manufacturer of the tire, a Korean Company, sought indemnity from the manufacturer of the valve, a Japanese Company. RULES: It is unreasonable to exercise jurisdiction when it is so remote from the original litigation. Need more than foreseeability that an item will end up in a particular state to be haled into court there. Must be purpose- ful availment, such as advertising to be subject to jurisdiction. 6. Statutory Requirements - Long Arm Statutes a. American Eutectic Welding Alloys Sales Co. v. Dytron Alloys Corp. - Facts: An action against two individual defendants and a corporation in violation of the individuals employment agreement to refrain from doing business in a region upon leaving the employ of the plaintiff. RULES: Individual - Conducted enough purposeful acts within the forum state to be covered by the longarm statute. Corporation - Consequential effects from a tortious act do not confer jurisdiction if the only reason an effect occurred in the forum state is that the affected party is incorporated or domiciled there. b. Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust LTD. - Facts: Plaintiff maintained a representative office in New York and lent $15 million to defendant by placing the money in the defendant's account in a New York bank. Defendant failed to repay the money. RULES: When minimum contacts are in place Quasi in rem Type I may be used. Regular use of the bank account satisfied the minimum contacts, and the money seized was directly related to the cause of action as required by in rem. 7. Challenging Territorial Jurisdiction a. Cuellar v. Cuellar - Facts: Plaintiff was granted custody of their daughter in a divorce settlement, subsequently she sought to amend the settlement to receive child support. RULES: If there is continuing jurisdiction it doesn't matter if the defendant moves out of the forum state and another cause of action is raised relating to the original suit. Must make a special appearance to contest jurisdiction before entering a general appearance. States do not have to make an allowance for special appearances to contest jurisdiction and subject all parties who come into court to their jurisdiction. b. Baldwin v. Iowa State Traveling Men's Ass'n - Facts: Defendant is an Iowa Corporation that was never present in Missouri. Service of process was in Missouri on a person the Corporation contends was not their agent. RULES: A defendant who appeared in the original action without objecting to jurisdiction, or one who unsuccessfully litigated the jurisdictional issue in the first action may not collaterally attack the judgment. The unsuccessful objection to jurisdic- tion may be repeated on appeal but this is direct rather than collateral attack. Bootstrap Doctrine c. Cheshire National Bank v. Jaynes - Facts: A New Hampshire Bank brought an action against a resident of Connecticut, no personal service was made, property was attached. RULES: Majority rule requires jurisdiction to be resolved before litigating the merits or the defendant will be bound for the full judgment. Minority rule in this case said that the defendant was only bound for the value of the property seized. 8. Refusals to take Jurisdiction a. Piper Aircraft Co. v. Reyno - American built plane crashed in Scotland killing all passengers all of which were Scottish citizens. RULES: Before the court can rule on forum non conveniens it must establish jurisdiction. Unfavorable law in the alternative forum must be more than the possibility of a reduced or limited recovery, it must deny the litigants their day in court. Forum non conveniens is determined based on the Gilbert factors: Private Interest Factors (1) Ease of access to sources of proof. (2) Availability of process on unwilling witnesses. (3) Possibility of the view of the premises. Public Interest Factors: (1) Administrative inefficiency (2) Local interest in having localized controversies resolved locally. (3) Interest in having the trial in diversity cases held in a forum where the law governs. (4) Avoidance of unnecessary conflicts in applying from law other jurisdictions. (5) The burden of having local juries resolve cases unrelated to the locale. 9. Immunity from Service of Process a. Wangler v. Harvey - Facts: Non-resident defendant was in court and was served with summons for a related complaint. RULES: Immunity is usually denied for service on both plaintiffs and defendants when the second cause of action is related to the first. Non-resident witnesses would normally still have immunity. Immunity to non-resident litigants might still apply if the second action is totally unrelated to the first. B. Commencing the Action: Notice 1. Green v. Lindsay - Facts: Landlord tenant dispute. RULES: Notice by posting may be considered insufficient. 2. Mennonite Board of Missions v. Adams - Facts: Mennonite Board of Missions was the lender for some property a foreclosure notice was given to the property owner only. RULE: Notice must be provided to those who have a substantial interest in the proceedings. 3. Green v. Lindsay - Facts: Landlord/tenant dispute. RULE: Posted notices not sufficient where there is a good liklihood that it will be torn off. Posting may still be good if the situation were more secure. 4. Mennonite Board of Missions v. Adams - Facts: Notice of default in payments and foreclosure was provided only to the property owner and not the mortgage holder. RULE: Everyone with a substantial interest in a controversy should be provided notice. 5. Schiavone v. Fortune - Facts: Corporation was incorrectly identified in the notice. RULES: Different states have different rules which toll (suspend) the statute of limitations either service or filing. If it is service and service is wrong then the statute is not suspended. C. Allocation of Judicial Authority Among the Courts of a State 1. Local Action - Court cannot take jurisdiction over real property located in another jurisdiction, distinguished from transitory actions which are pretty much anything else. a. Reasor-Hill Corp v. Harrison - Facts: Arkansas crop sprayer damaged a crop located in Missouri. RULE: Majority doctrine a cause of action affecting real property must be brought in the jurisdiction where the property is located. Exception - may be brought in another jurisdiction if the action involves injury to the property and not title. b. Silver Surprize v. Sunshine Mining Co. - Facts: Contract dispute over mining of an ore claim. RULE: If the court can classify the case as a transitory action the court will mostly not impose the local action rule. D. Form and the Service of Summons - See notes pages 458 - 460 1. Notice - actual form of the notice must be constitutionally sufficient. a. Include when and where the action will be decided. b. That the rights of the defendant will be determined at that time. c. Statute will define proper notice for type of action. d. Must be reasonably calculated to reach and inform the defendant - Mullane Factors (1) Reasonably calculated to inform all interested parties of the action. (2) Reasonably convey the required information. (3) Must afford a reasonable time for those interested to make an appearance. 2. Service of Process - means by which the notice is transmitted. a. Publication alone is not sufficient. b. Statute will determine sufficient service. c. Actual notice must be sufficient. d. Types of service (1) Personal service - in hand to the defendant. (2) Mail - through the mail (3) Constructive service - Publication or posting. e. Standard for measuring reasonable efforts of service - what a person would do if they really wanted to get a defendant in court. f. Service of process stops the statute of limitations from running for a number of days specified by statute. E. Subject Matter Jurisdiction - See notes pages 502, 512, 518. The authority of a court to hear a case regardless of the type of jurisdiction. 1. Court of limited jurisdiction - normally a dollar limit on the type of case that may be hear. The dollar limit is based on the amount of alleged damages. 2. Court of General Jurisdiction - authorized to hear almost any case. 3. Subject matter jurisdiction may not be conferred by the consent of the parties except under the bootstrap doctrine if a final judgment is entered without raising the question of subject matter jurisdiction it cannot be raised after the judgment. 4. Challenging subject matter jurisdiction a. May be challenged by motion b. May be raised independently by the court c. May be raised after judgment, for the first time on appeal and by either party - even the party which invoked the jurisdiction of the court in the first place. 5. If the action is brought in the wrong court the action is dismissal and the action must be brought in the correct court. F. Venue 1. Miles v. Chinto Mining Co. - Facts: An action to quiet title to property located in Stevens County. Parties stipulated to accept the jurisdiction of the court in Spokane County. RULES: Parties cannot confer subject matter juris- diction by consent. Change of venue may be agreed to and/or waived by parties. Jurisdictional Venue - (mandatory venue) A hybrid type of situation between subject matter jurisdiction and venue. A variety of mini local action for personal property, when brought in the wrong forum the action is dismissed, when brought in the right forum the action may be transferred. 2. Andrews v. Cusin - Facts: A leasehold for property was damaged when seed potatoes were bought which were guaranteed to be disease free but weren't. RULE: In a transitory action the basic rule is that the proper venue is the defendant's place of residence. G. Service for Personal Judgment 1. John Hancock Mut. Life Ins. Co. v. Gooley - Facts: Mortgage on farm was foreclosed because of failure to pay. Service of process was performed at a temporary residence and left with a visitor. RULES: The affidavit of service may be amended to represent the actual facts as long as the service was proper in the first place. Service not placed in hand but left at a residence must be at the normal place of abode and left with another resident and not a visitor. 2. Dobbins v. Beal - Facts: Parties were involved in a car accident. Defendant couldn't be found for service. RULE: In personam jurisdiction may be achieved by publication if due diligence was made to find a defendant and he can't be located. Plaintiff must set forth the facts showing that diligence before publication. 3. Smith v. Forty Million - Facts: After a car accident plaintiff did not file an action within the statute of limitations on the Secretary of State as provided in RCW 46.64.040. After the expiration of the statute of limitations plaintiff served the Secretary of State and the non-resident defendant. RULE: Non resident motorist statute allows service to be made on the Secretary of State so the statute of limitations is not tolled by a defendant's absence from the state. Plaintiff must provide defendant with notice of the service to satisfy due process requirements. 4. Bethel v. Sturmer - Facts: Parties were involved in a car accident in Tacoma. The defendant claimed to be a resident of Florida, service was made on the Secretary of State and copies and notice were sent to the Florida address but defendant was actually a resident of B.C. Plaintiff claimed that defendant intentionally concealed themself from service but service had been successfully made on the defendant by two other plaintiffs for the same action. RULE: To toll the statute of limitations the defendant's absence from the state or concealment within it must be such that process cannot be served upon him. Statute of limitations is tolled if defendant willfully evades process or conceals himself. RCW 4.16.170 Hip Pocket Statute allows either service or filing to commence an action as long as the other is accomplished within 90 days to complete the commencement. Must be initiated within the statute of limitations and allows a grace period only when at the end of the limit. 5. Werner v. Werner - Facts: Defendant's illegally attempted to transfer and sell some property, notaries failed to verify identities when notarizing documents. Plaintiff brought an action to quiet title. RULE: Derivative Service - service on the notaries is service on their insurers. The basis for jurisdiction over the sureties is derived from the jurisidictional power over the notaries. Derivative service is not allowed by statute and is in derogation of common law. Adopted Forum Non Conveniens for the first time. Washington law applied to the question of title but California law applies to the negligent action against the notaries. 6. Crose v. Volkswagenwerk - Facts: The car accident occurred in California, the injured passenger was a resident of Washington. The vehicle was ordered in California for delivery in Germany and was subsequently shipped by the owner to California. The injured plaintiff brought an action against Volkswagon and the American importers. RULE: The cause of action did not arise within the state so could not apply minimum contacts within Washington. Doing business is to be distinguished from minimum contacts as separate and distinct theories of jurisdiction. Anytime general jurisdiction is exercised territorial notions apply and service of process must be made within the territorial boundaries of the state. Service outside the state would be ineffective. II. Default Judgment A. Sceva Steel Bldgs, Inc. v. Weitz - Facts: The defendant purchased seven lots and contracted with plaintiff to build a steel building. The defendant's made a down payment and the plaintiff built the building. The defendant's failed to pay the balance owed and the plaintiff sued to recover. The defendant received a default judgment which was greater than the original complaint and no notice was given about the amended complaint. RULES: A party has the right to assume that the relief granted on default will not differ from that described in the complaint. If the judgment sought in the original complaint is amended new notice and service must be made on the defendant or the judmgent will be vacated. B. Ware v. Phillips - Facts: Al Phillips was sued by MacLane. As part of that proceeding, Phillips commenced an action against Mary Phillips. At that time, the respondents were purchasing a house from Mary Phillips. A default judgment was entered against respondents for a debt owed by Mary Phillips. The respondents received no notice of the judgment against them until four years later when they attempted to sell the house. RULE: The flaw in the writ, and in the statute authorizing it, is that no notice was provided that a claim was being asserted against garnishees or that a judgment might be taken against them if they failed to answer. They were not apprised that their property was in jeopardy, and the judgment against them, rendered without such notice, was void because they were not accorded due process of law. C. Staley v. Staley - Facts: Alice Staley files for divorce against her husband. She sought $3,000 in addition to her divorce, she published a notice stating that the object of the action was to obtain a divorce without ever mentioning anything about the property being attached or that a dollar judgment was sought. RULES: The notice was inadequate because it only addressed the divorce and not the action against the property. As such, the divorce action was proper but not the attachment of the property. The defendant must be given notice that his property is in jeopardy. Notice by publication is authorized if the defendant is a resident of the state and can't be found for service. III. Choice of Law A. Allstate Insurance Co. v. Hague - Facts: Decedant worked in Minnesota for 15 years, was involved in an accident in Wisconsin. All parties in the accident lived in Wisconsin. The surviving spouse moved to Minnesota and filed a claim for insurance on a policy that was issued in Wisconsin. Minnesota law permitted stacking of insurance claims, Wisconsin didn't. RULES: If there are enough trivial and irrelevant contacts within a state they made add up to enough to impose choice of law. Choice of law elements: 1.Significant aggregation of contacts. 2.State interests. 3.The application of law was neither arbitrary nor fundamentally unfair.