Supreme Court Reinforces Basic Principles of Personal Jurisdiction | Practical Law

Supreme Court Reinforces Basic Principles of Personal Jurisdiction | Practical Law

In Walden v. Fiore, decided on February 25, 2014, the US Supreme Court reversed the Court of Appeals for the Ninth Circuit and held that a court cannot exercise personal jurisdiction over a defendant based solely on the fact that a plaintiff was injured in the forum, where the defendant otherwise has no contacts with that forum.

Supreme Court Reinforces Basic Principles of Personal Jurisdiction

Practical Law Legal Update 7-559-0725 (Approx. 4 pages)

Supreme Court Reinforces Basic Principles of Personal Jurisdiction

by Practical Law Litigation
Law stated as at 27 Feb 2014USA (National/Federal)
In Walden v. Fiore, decided on February 25, 2014, the US Supreme Court reversed the Court of Appeals for the Ninth Circuit and held that a court cannot exercise personal jurisdiction over a defendant based solely on the fact that a plaintiff was injured in the forum, where the defendant otherwise has no contacts with that forum.
On February 25, 2014, the US Supreme Court decided Walden v. Fiore, which reinforced basic principles of personal jurisdiction: a court does not have personal jurisdiction over a defendant unless the defendant has minimum contacts with the forum created by the defendant himself (No. 12-civ-574, (U.S. Feb. 25, 2014)).

Background

Gina Fiore and Keith Gipson (respondents) sued former Drug Enforcement Administration (DEA) agent Anthony Walden for violating their Fourth Amendment rights, stemming from a DEA search and seizure conducted at an airport in Atlanta, Georgia. As a result of the search, Walden seized almost $97,000 in cash from respondents. Walton later helped draft an affidavit to show probable cause for forfeiture of the funds, which Walden forwarded to the US Attorney's Office in Georgia. Respondents alleged that the affidavit was false and misleading because Walden, among other things, omitted exculpatory information from the affidavit. In the end, no forfeiture complaint was filed, and the DEA eventually returned the cash to respondents, who resided in Nevada.
Respondents filed their suit in the US District Court for the District of Nevada, although Walden had no connection to Nevada. Walden moved to dismiss the case for lack of personal jurisdiction. The district court granted Walden's motion and dismissed the case, finding that the search and seizure in Georgia did not establish a basis to exercise personal jurisdiction in Nevada, even if Walden caused harm to respondents in Nevada while knowing they lived in Nevada. Respondents subsequently appealed to the US Court of Appeals for the Ninth Circuit.
On appeal, a divided panel of the Ninth Circuit reversed, and found that the exercise of personal jurisdiction over Walden in Nevada was reasonable. Specifically, the Ninth Circuit concluded that:
  • Walden had expressly aimed his submission of the affidavit (which he forwarded to the US Attorney's Office in Georgia) at Nevada by submitting the allegedly false affidavit with knowledge that it would affect persons with a "significant connection" to Nevada.
  • The delay in returning the funds to respondents caused them foreseeable harm in Nevada.
  • The exercise of personal jurisdiction over Walden by the District of Nevada was otherwise reasonable.
The US Supreme Court granted certiorari to decide whether due process permitted a Nevada court to exercise jurisdiction over Walden.

Outcome

The US Supreme Court reversed the Ninth Circuit, and found that a Nevada court could not properly exercise jurisdiction over Walden.
First, the Court discussed the Due Process Clause of the Fourteenth Amendment and reviewed the basic principles of specific jurisdiction, including the requirement that a nonresident defendant must have minimum contacts with the forum state, citing Int'l Shoe Co. v. Washington, 26 U.S. 310 (1945). The Court noted that:
  • Contacts with the forum state must be those that the "defendant himself" creates.
  • A plaintiff's contacts with the forum state cannot satisfy the defendant-focused minimum contacts inquiry.
  • A defendant's relationship with a plaintiff in a forum state, standing alone, is insufficient to establish personal jurisdiction.
  • Due process requires that a defendant be haled into court based on his own affiliation with a forum state, not based on contacts he makes by interacting with other persons affiliated with the forum state.
  • In tort cases, a forum state's exercise of jurisdiction must be based on intentional conduct by a defendant that creates the necessary contacts with that forum.
Based on these principles, the Court concluded that, "when viewed through the proper lens - whether the defendant's actions connected him to the forum," Walden lacked minimum contacts with Nevada, because:
  • No part of Walden's conduct occurred in Nevada, and all of his relevant conduct occurred in Georgia.
  • Walden never traveled to, conducted activities within, contacted anyone in, or sent anything or anyone to Nevada, as Walden had nothing to do with the return of the seized cash to respondents in Nevada.
The Court found that the Ninth Circuit improperly shifted the analytical focus from Walden's contacts with Nevada to his contacts with respondents, and improperly attributed respondents' forum connections to Walden. The Court then reiterated the "well-established principles" of personal jurisdiction that the proper focus of the minimum contacts inquiry in intentional tort cases is the relationship among the defendant, the forum, and the litigation, and that it is the defendant who must create contacts with the forum state.
In the opinion's final footnote, the Court stated that this case did not raise any issue regarding torts committed via the Internet or other electronic means, or regarding how a defendant's virtual presence and conduct could translate into contacts with a particular state.

Practical Implications

To avoid the time and expense of litigating a motion to dismiss, counsel should always determine before filing suit whether a defendant has sufficient minimum contacts with the desired forum to allow the court to exercise personal jurisdiction over the defendant. When preparing responsive pleadings, defense counsel should also be sure to raise the issue of personal jurisdiction where minimum contacts are in question. For more information on personal jurisdiction, see Practice Notes, Commencing a Federal Lawsuit: Initial Considerations: Does the Court Have Personal Jurisdiction Over the Defendant?, Responsive Pleadings: Counterclaims and Crossclaims: Personal Jurisdiction, and Motion to Dismiss: Overview: Lack of Personal Jurisdiction.